[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6389 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 6389
To enact certain laws relating to small business as title 57, United
States Code, ``Small Business''.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 16, 2018
Mr. Chabot (for himself, Ms. Velazquez, Mr. Goodlatte, and Mr. Nadler)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To enact certain laws relating to small business as title 57, United
States Code, ``Small Business''.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
Sec. 2. Purpose; restatement does not change meaning or effect of
existing law.
Sec. 3. Enactment of title 57, United States Code.
Sec. 4. Conforming amendments.
Sec. 5. Transitional and savings provisions.
Sec. 6. Repeals.
SEC. 2. PURPOSE; RESTATEMENT DOES NOT CHANGE MEANING OR EFFECT OF
EXISTING LAW.
(a) Purpose.--The purpose of this Act is to enact a restatement of
certain existing law relating to small business as a positive law title
of the United States Code.
(b) Restatement Does Not Change Meaning or Effect of Existing Law.--
(1) In general.--The restatement of existing law enacted by
this Act does not change the meaning or effect of the existing
law. The restatement consolidates various provisions that were
enacted separately over a period of many years, reorganizing
them, conforming style and terminology, modernizing obsolete
language, and correcting drafting errors. These changes serve
to remove ambiguities, contradictions, and other imperfections,
but they do not change the meaning or effect of the existing
law or impair the precedential value of earlier judicial
decisions or other interpretations.
(2) Rule of construction.--
(A) In general.--Notwithstanding the plain meaning
rule or other rules of statutory construction, a change
in wording made in the restatement of existing law
enacted by this Act serves to clarify the existing law
as indicated in paragraph (1), but not to change the
meaning or effect of the existing law.
(B) Revision notes.--Subparagraph (A) applies whether
or not a change in wording is explained by a revision
note appearing in a congressional report accompanying
this Act. If such a revision note does appear, a court
shall consider the revision note in interpreting the
change.
SEC. 3. ENACTMENT OF TITLE 57, UNITED STATES CODE.
(a) Title 57.--Title 57, United States Code, ``Small Business'', is
enacted as follows:
TITLE 57--SMALL BUSINESS
Subtitle I--General Provisions
Chap. Sec.
Declarations; Definitions; Small Business Concerns................101101
Small Business Administration.....................................103101
Penalties.........................................................105101
Periodic Reports..................................................107101
Funding...........................................................109101
Subtitle II--Loan, Contracting, and Related Assistance Programs
Division A--General Provisions
General Provisions................................................201101
Division B--General Business Loan Program
General Purpose Loans.............................................203101
Special Purpose Loans.............................................205101
Small Business Lending Companies and Non-Federally Regulated Lende207101
Division C--Intermediary Lending Pilot Program
Intermediary Lending Pilot Program................................211101
Division D--Microloan Program
Microloan Program.................................................213101
Division E--Disaster Assistance Programs
Disaster Loan Program.............................................221101
Private Disaster Assistance Program...............................223101
Immediate Disaster Assistance Program.............................225101
Expedited Disaster Assistance Business Loan Guarantee Program.....227101
Division F--Business Development Program
General Provisions................................................231101
Contracting.......................................................233101
Technical and Management Assistance...............................235101
Division G--Procurement Assistance
General Provisions................................................241101
Subcontracting Provisions.........................................243101
Notice Provisions.................................................245101
Noncompetitive Procedures.........................................247101
Division H--Contract Reservation Programs
General Provisions................................................251101
HUBZone Program...................................................253101
Small Business Concerns Owned and Controlled by Service-Disabled
Veterans..........................................................255101
Small Business Concerns Owned and Controlled by Women.............257101
Division I--Research and Development
General Provisions................................................261101
SBIR Programs and STTR Programs...................................263101
Division J--Small Business Development Center Program
Small Business Development Center Program.........................271101
Division K--Women's Business Center Program
Women's Business Center Program...................................273101
Division L--Veterans and Reservists
Veterans and Reservists...........................................275101
Division M--International Trade
International Trade...............................................277101
Divisions N Through Y--Reserved
through 297. reserved
Division Z--Miscellaneous
Miscellaneous.....................................................299101
Subtitle III--Investment Division
Division A--General provisions
General Provisions................................................301101
Division B--Investment Programs
Small Business Investment Company Program.........................303101
New Markets Venture Capital Company Program.......................305101
Renewable Fuel Capital Investment Pilot Program...................307101
Division C--Surety Bond Guarantee Program
Surety Bond Guarantee Program.....................................321101
Division D--Certified Development Company Program
Certified Development Company Program.............................331101
Subtitle IV--Miscellaneous
PRIME Program.....................................................401101
Women's Business Enterprise Development...........................403101
through 489. reserved
Miscellaneous.....................................................491101
Subtitle I--General Provisions
Chapter 101--Declarations; Definitions; Small Business Concerns
Sec.
101101. Declarations.
101102. Definitions.
101103. Small business concerns.
Sec. 101101. Declarations
(a) In General.--
(1) Free competition.--The essence of the American economic
system of private enterprise is free competition. Only through
full and free competition can free markets, free entry into
business, and opportunities for the expression and growth of
personal initiative and individual judgment be assured. The
preservation and expansion of such competition is basic not
only to the economic well-being but to the security of this
Nation. National security and well-being cannot be realized
unless the actual and potential capacity of small business is
encouraged and developed.
(2) Policy.--It is the policy of Congress that the Government
should aid, counsel, assist, and protect, insofar as is
possible, the interests of small business concerns in order
to--
(A) preserve free competitive enterprise;
(B) ensure that a fair proportion of the total
purchases and contracts or subcontracts for property
and services for the Government (including contracts or
subcontracts for maintenance, repair, and construction)
be placed with small business concerns;
(C) ensure that a fair proportion of the total sales
of Government property be made to small business
concerns; and
(D) maintain and strengthen the overall economy of
the Nation.
(b) International Trade.--
(1) Policy.--It is the policy of Congress that the Federal
Government, through the Administrator, acting through the
Associate Administrator for International Trade and in
cooperation with the Department of Commerce and other relevant
State and Federal agencies, should assist small businesses 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; and
(F) ensuring that the interests of small business
concerns are adequately represented in bilateral and
multilateral trade negotiations.
(2) Respective agency roles.--Congress recognizes that the
Department of Commerce is the principal Federal agency for
trade development and export promotion and that the Department
of Commerce and the Small Business Administration work together
to advance joint interests. It is the purpose of this subtitle
and subtitle II to enhance, not alter, their respective roles.
(c) Agriculture and Related Industries.--It is the policy of Congress
that the Government, through the Small Business Administration, should
assist small business concerns that are engaged in--
(1) the production of food and fiber;
(2) ranching;
(3) raising of livestock;
(4) aquaculture; or
(5) any other industry relating to agriculture.
(d) Business Development Program.--
(1) 1978.--
(A) Findings.--With respect to the business
development program, Congress finds that--
(i) ownership and control of productive
capital are concentrated in the economy of the
United States, and therefore, certain groups
own and control little productive capital;
(ii) certain groups in the United States own
and control little productive capital because
they have limited opportunities for small
business ownership;
(iii) the broadening of small business
ownership among groups that, on October 24,
1978, owned and controlled 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;
(iv) such development of business ownership
among groups that, on October 24, 1978, owned
and controlled little productive capital will
be greatly facilitated through the creation of
a small business ownership development program,
which shall provide services including
financial, management, and technical
assistance;
(v) the power to let Federal contracts under
the business development program can be an
effective procurement assistance tool for
development of business ownership among groups
that own and control little productive capital;
(vi) the opportunity for full participation
in our free enterprise system by socially and
economically disadvantaged persons is essential
if we are to obtain social and economic
equality for such persons and improve the
functioning of our national economy;
(vii) many such persons 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;
(viii) those groups include Black Americans,
Hispanic Americans, Native Americans, Indian
tribes, Asian Pacific Americans, Native
Hawaiian Organizations, and other minorities;
(ix) it is in the national interest to
expeditiously ameliorate the conditions of
socially and economically disadvantaged groups;
(x) those conditions can be improved by
providing the maximum practicable opportunity
for the development of small business concerns
owned by members of socially and economically
disadvantaged groups;
(xi) that development can be materially
advanced through the procurement by the United
States of articles, equipment, supplies,
services, materials, and construction work from
those concerns; and
(xii) those procurements also benefit the
United States by encouraging the expansion of
suppliers for the procurements, thereby
encouraging competition among the suppliers and
promoting economy in the procurements.
(B) Purpose.--The purpose of the business development
program is to--
(i) foster business firm ownership and
development by individuals in groups that own
and control little productive capital;
(ii) promote the competitive viability of
those firms in the marketplace by providing
such available financial, technical, and
management assistance as may be necessary;
(iii) promote the business development of
small business concerns owned and controlled by
socially and economically disadvantaged
individuals so that those concerns can compete
on an equal basis in the American economy;
(iv) promote the competitive viability of
those concerns in the marketplace by providing
such available contract, financial, technical,
and management assistance as may be necessary;
and
(v) clarify and expand the program for the
procurement by the United States of articles,
supplies, services, materials, and construction
work from small business concerns owned by
socially and economically disadvantaged
individuals.
(2) 1988.--
(A) Findings.--Congress finds that--
(i) the business development program and the
award of contracts under chapter 233 remain a
primary tool for improving opportunities for
small business concerns owned and controlled by
socially and economically disadvantaged
individuals in the Federal procurement process
and bringing those concerns into the Nation's
economic mainstream;
(ii) although some progress has resulted from
the business development program, it has
generally failed to meet its objectives, which
remain as valid on November 15, 1988, as when
the program was initiated;
(iii) too few concerns that have exited the
business development program have been prepared
to compete successfully in the open marketplace
on competitive procurements, and many concerns
have developed an unhealthy dependency on sole-
source contracts by the time the concerns are
required to leave the program;
(iv) the application and certification
process for admitting new participants to the
business development program is inordinately
lengthy and burdensome;
(v) the Administrator has often not
efficiently and equitably administered and
managed the business development program in a
manner that provided clear lines of
responsibility for implementing and monitoring
many of the administrative duties under the
program;
(vi) the Administrator and some program
participants have given insufficient attention
and support to the business development goals
of the business development program and instead
have focused almost entirely on the size of
contract awards or the number of concerns
certified to participate in the program;
(vii) many Federal procuring agencies have
failed to identify and offer the amount of
contract support necessary to allow for
diversification and growth of disadvantaged
businesses participating in the business
development program;
(viii) contract support and business
development expenses have been misused by both
the Administrator and participants in the
business development program and have not been
equitably distributed pursuant to objective
criteria;
(ix) the widespread perception of undue
political influence in the operation and
administration of the business development
program has significantly contributed to the
program's poor image and has deterred
utilization of the program by socially and
economically disadvantaged concerns and by
Federal procuring agencies; and
(x) it is imperative that increased
competition and other substantial reforms be
accomplished in the business development
program to promote the congressionally mandated
business development objectives and purposes.
(B) Purposes.--The purposes of Public Law 100-656
(102 Stat. 3853) are--
(i) to affirm that the business development
program and chapter 233 shall be used
exclusively for business development purposes
to help small businesses owned and controlled
by socially and economically disadvantaged
individuals compete on an equal basis in the
mainstream of the American economy;
(ii) to affirm that the measure of success of
the business development program, including the
authority under chapter 233, shall be the
number of competitive firms that--
(I) exit the business development
program without being unreasonably
reliant on contracts under chapter 233;
and
(II) are able to compete on an equal
basis in the mainstream of the American
economy;
(iii) to ensure that program benefits accrue
to individuals who are both socially and
economically disadvantaged;
(iv) to increase the number of small
businesses owned and controlled by socially and
economically disadvantaged individuals from
which the United States may purchase products
and services (including construction work); and
(v) to ensure integrity, competence, and
efficiency in the administration of business
development services and the Federal
contracting opportunities made available to
small business concerns owned and controlled by
socially and economically disadvantaged
individuals.
(e) Victims of Floods and Other Catastrophes; Small Business Concerns
That Are Displaced as a Result of Federally Aided Construction
Programs.--It is the policy of Congress that the Government should
assist--
(1) victims of floods and other catastrophes; and
(2) small business concerns that are displaced as a result of
federally aided construction programs.
(f) Women's Business Ownership.--
(1) Findings.--With respect to the programs and activities
authorized by this subtitle and subtitle II, 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 2 decades preceding October 25, 1988,
there were substantial gains in the social and economic
status of women as women sought economic equality and
independence;
(C) despite that progress, women, as a group, are
subjected to discrimination in entrepreneurial
endeavors due to their gender;
(D) that discrimination takes many overt and subtle
forms having an adverse impact on 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 those 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 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 those
discriminatory barriers while not adversely affecting
the rights of socially and economically disadvantaged
individuals.
(2) Purpose.--The purpose of the programs and activities
conducted under this subtitle and subtitle II that assist women
entrepreneurs is 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--
(i) the Government engage in a systematic and
sustained effort to identify, define, and
analyze the discriminatory barriers facing
women; and
(ii) that effort directly involve the
participation of women business owners in the
public/private sector partnership.
(g) Subcontracting.--
(1) Participation in performance of contracts.--It is the
policy of the United States that qualified HUBZone small
business concerns, small business concerns owned and controlled
by service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
women, and other small business concerns shall have the maximum
practicable opportunity to participate in the performance of
contracts let by any Federal agency (including contracts and
subcontracts for subsystems, assemblies, components, and
related services for major systems).
(2) Timely payment of amounts due.--It is the policy of the
United States that its prime contractors establish procedures
to ensure the timely payment of amounts due pursuant to the
terms of their subcontracts with qualified HUBZone small
business concerns, small business concerns owned and controlled
by service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
women, and other small business concerns.
(h) Research and Development.--Research and development are major
factors in the growth and progress of industry and the national
economy. The expense of carrying on research and development programs
is beyond the means of many small business concerns, and small business
concerns are handicapped in obtaining the benefits of research and
development programs conducted at Government expense. Small business
concerns are thereby placed at a competitive disadvantage. This weakens
the competitive free enterprise system and prevents the orderly
development of the national economy. It is the policy of Congress that
assistance be given to small business concerns to enable small business
concerns to undertake and to obtain the benefits of research and
development in order to maintain and strengthen the competitive free
enterprise system and the national economy.
(i) Mentoring Networks.--Congress finds that--
(1) the SBIR program and STTR program create jobs, increase
capacity for technological innovation, and boost international
competitiveness;
(2) increasing the quantity of applications from all States
to the SBIR program and STTR program would enhance competition
for awards under the FAST program and the quality of the
completed projects; and
(3) mentoring is a natural complement to the FAST program of
reaching out to new companies regarding the SBIR program and
STTR program as an effective and low cost way to improve the
likelihood that the companies will succeed in the SBIR program
and STTR program in developing and commercializing their
research.
(j) Interest Rates Charged by Small Business Investment Companies.--
The purpose of section 303112 of this title is to facilitate the
orderly and necessary flow of long-term loans and equity funds from
small business investment companies to small business concerns.
(k) SBIR Programs.--
(1) 1982 findings and purposes.--
(A) Findings.--Congress finds that--
(i) technological innovation--
(I) creates jobs;
(II) increases productivity,
competition, and economic growth; and
(III) is a valuable counterforce to
inflation and the United States
balance-of-payments deficit;
(ii) while small business is the principal
source of significant innovations in the
Nation, the vast majority of federally funded
research and development is conducted by large
businesses, universities, and Government
laboratories; and
(iii) small businesses--
(I) are among the most cost-effective
performers of research and development;
and
(II) are particularly capable of
developing research and development
results into new products.
(B) Purposes.--The purposes of Public Law 97-219 (96
Stat. 217) are--
(i) to stimulate technological innovation;
(ii) to use small business to meet Federal
research and development needs;
(iii) to foster and encourage participation
by minority and disadvantaged persons in
technological innovation; and
(iv) to increase private sector
commercialization innovations derived from
Federal research and development.
(2) 1992 findings and purposes.--
(A) Findings.--Congress finds that--
(i) the SBIR programs have been a successful
method of involving small business concerns in
Federal research and development;
(ii) the SBIR programs have been an effective
catalyst for the development of technological
innovations by small business concerns;
(iii) SBIR program participants have provided
high quality research and development in a
cost-effective manner;
(iv) the innovative products and services
developed by small business concerns
participating in SBIR programs have been
important to the national defense and to the
missions of the other participating Federal
agencies;
(v) SBIR programs have effectively stimulated
the commercialization of technology developed
through Federal research and development,
benefiting the public and private sectors of
the Nation;
(vi) by encouraging the development and
commercialization of technological innovations,
the SBIR program have created jobs, expanded
business opportunities for small firms,
stimulated the development of new products and
services, and improved the competitiveness of
the Nation's high technology industries;
(vii) SBIR programs have helped increase
exports from small business concerns;
(viii) despite the general success of the
SBIR programs, the proportion of Federal
research and development funds received by
small business concerns has not increased over
the life of the programs, but has remained at 3
percent; and
(ix) although the participating Federal
agencies have successfully implemented most
aspects of the SBIR programs, additional
outreach efforts are necessary to stimulate
increased participation of socially and
economically disadvantaged small business
concerns.
(B) Purposes.--The purposes of title I of Public Law
102-564 (106 Stat. 4249) are--
(i) to expand and improve the SBIR programs;
(ii) to emphasize the SBIR programs' goal of
increasing private sector commercialization of
technology developed through Federal research
and development;
(iii) to increase small business
participation in Federal research and
development; and
(iv) to improve the Federal Government's
dissemination of information concerning the
SBIR programs, particularly with regard to
program participation by small business
concerns owned and controlled by women and by
small business concerns owned and controlled by
socially and economically disadvantaged
individuals.
(3) 2000 findings.--Congress finds that--
(A) SBIR programs are highly successful in involving
small businesses in federally funded research and
development;
(B) SBIR programs made the cost-effective and unique
research and development capabilities possessed by the
small businesses of the Nation available to Federal
agencies;
(C) the innovative goods and services developed by
small businesses that participated in SBIR programs
have produced innovations of critical importance in a
wide variety of high-technology fields, including
biology, medicine, education, and defense;
(D) SBIR programs are a catalyst in--
(i) the promotion of research and
development;
(ii) the commercialization of innovative
technology;
(iii) the development of new products and
services; and
(iv) the continued excellence of the Nation's
high-technology industries; and
(E) the continuation of SBIR programs will--
(i) provide expanded opportunities for 1 of
the Nation's vital resources, its small
businesses;
(ii) foster invention, research, and
technology;
(iii) create jobs; and
(iv) increase this Nation's competitiveness
in international markets.
Sec. 101102. Definitions
In this title:
(1) 1st tier subcontractor.--The term ``1st tier
subcontractor'', with respect to a contract, means a
subcontractor that has a subcontract directly with the prime
contractor on the contract.
(2) Accredited lenders program.--The term ``accredited
lenders program'' means the program under section 331107 of
this title.
(3) Activated.--The term ``activated'', with respect to a
reservist, means having received an order placing the reservist
on active duty.
(4) Active duty.--The term ``active duty'' has the meaning
given the term in section 101 of title 10.
(5) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(6) Agricultural commodity.--The term ``agricultural
commodity'' has the meaning given the term in section 102 of
the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(7) Agricultural enterprise.--The term ``agricultural
enterprise'' means a small business concern engaged in--
(A) the production of food or fiber;
(B) ranching;
(C) raising of livestock;
(D) aquaculture; or
(E) any other industry related to agriculture.
(8) Alaska native corporation.--The term ``Alaska Native
Corporation'' has the meaning given the term ``Native
Corporation'' in section 3 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602).
(9) Alaska native village.--The term ``Alaska Native
Village'' has the meaning given the term ``Native village'' in
section 3 of the Alaska Native Claims Settlement Act (43 U.S.C.
1602).
(10) Association.--The term ``Association'' means the
association of small business development centers recognized
under section 271102(f) of this title.
(11) Base closure area.--The term ``base closure area'' has
the meaning given the term in section 253101 of this title.
(12) Biomass.--
(A) In general.--The term ``biomass'' means any
organic material that is available on a renewable or
recurring basis.
(B) Inclusions.--The term ``biomass'' includes--
(i) agricultural crops;
(ii) trees grown for energy production;
(iii) wood waste and wood residues;
(iv) plants (including aquatic plants and
grasses);
(v) residues;
(vi) fibers;
(vii) animal wastes and other waste
materials; and
(viii) fats, oils, and greases (including
recycled fats, oils, and greases).
(C) Exclusions.--The term ``biomass'' does not
include--
(i) paper that is commonly recycled; or
(ii) unsegregated solid waste.
(13) 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.
(14) Bundling of contract requirements.--
(A) In general.--The term ``bundling of contract
requirements'' means consolidating 2 or more
procurement requirements for goods or services
previously provided or performed under separate smaller
contracts into a solicitation of offers for a single
contract that is likely to be unsuitable for award to a
small business concern due to--
(i) the diversity, size, or specialized
nature of the elements of the performance
specified;
(ii) the aggregate dollar value of the
anticipated award;
(iii) the geographical dispersion of the
contract performance sites; or
(iv) a combination of the factors described
in clauses (i), (ii), and (iii).
(B) Separate smaller contract.--In subparagraph (A),
the term ``separate smaller contract'' means a contract
that--
(i) has been performed by 1 or more small
business concerns; or
(ii) was suitable for award to 1 or more
small business concerns.
(15) Business development program.--The term ``business
development program'' means the program under division F of
subtitle II.
(16) Certified development company program.--The term
``certified development company program'' means the program
under division D of subtitle III.
(17) Chief acquisition officer.--The term ``Chief Acquisition
Officer'' means the employee of a Federal agency appointed or
designated as the Chief Acquisition Officer for the Federal
agency under section 1702 of title 41.
(18) Computer crime.--The term ``computer crime'' means--
(A) a crime committed against a small business
concern by means of the use of a computer; and
(B) a crime involving the illegal use of, or
tampering with, a computer owned or utilized by a small
business concern.
(19) Consolidated contract.--The term ``consolidated
contract'' means a contract resulting from the consolidation of
contract requirements.
(20) Consolidation of contract requirements.--The term
``consolidation of contract requirements'', with respect to
contract requirements of a Federal agency, means a use of a
solicitation to obtain offers for a single contract or a
multiple award contract--
(A) to satisfy 2 or more requirements of the Federal
agency for goods or services that have been provided to
or performed for the Federal agency under 2 or more
separate contracts lower in cost than the total cost of
the contract for which the offers are solicited; or
(B) to satisfy requirements of the Federal agency for
construction projects to be performed at 2 or more
discrete sites.
(21) Contracting officer.--The term ``contracting officer''
has the meaning given the term in section 2101 of title 41.
(22) Credit elsewhere.--The term ``credit elsewhere'', with
respect to a concern or homeowner, means sufficient credit that
is available from a non-Federal source on reasonable terms and
conditions taking into consideration the prevailing rates and
terms in the community in or near which the concern transacts
business or the homeowner resides, for similar purposes and
periods of time.
(23) Defense agency.--The term ``defense agency'' has the
meaning given the term in section 101 of title 10.
(24) Disabled individual.--The term ``disabled individual''
means an individual who--
(A) has a physical, mental, or emotional impairment,
defect, ailment, disease, or disability of a permanent
nature that in any way limits the selection of any type
of employment for which the person would otherwise be
qualified or qualifiable; or
(B) is a service-disabled veteran.
(25) Disabled veteran.--The term ``disabled veteran'' has the
meaning given the term in section 4211 of title 38.
(26) Disadvantaged owner.--The term ``disadvantaged owner''
has the meaning given the term in section 231101 of this title.
(27) Disaster.--
(A) In general.--The term ``disaster'' means a sudden
event that causes severe damage.
(B) Inclusions.--The term ``disaster'' includes a
flood, hurricane, tornado, earthquake, fire, explosion,
volcano, windstorm, landslide or mudslide, tidal wave,
commercial fishery failure or fishery resource disaster
(as determined by the Secretary of Commerce under
section 308(b) of the Interjurisdictional Fisheries Act
of 1986 (16 U.S.C. 4107(b))), ocean condition resulting
in the closure of customary fishing water, riot, civil
disorder, or other catastrophe.
(C) Exclusion.--The term ``disaster'' does not
include an economic dislocation.
(28) Disaster area.--The term ``disaster area'' means an area
affected by a natural or other disaster, as determined for
purposes of section 221101 or 221102 of this title, during the
period of the declaration.
(29) Disaster assistance program.--The term ``disaster
assistance program'' means--
(A) the disaster loan program;
(B) the private disaster assistance program;
(C) the immediate disaster assistance program; and
(D) the expedited disaster assistance business loan
guarantee program.
(30) Disaster loan program.--The term ``disaster loan
program'' means the program under chapter 221.
(31) Economically disadvantaged indian tribe.--The term
``economically disadvantaged Indian tribe'' has the meaning
given the term in section 231101 of this title.
(32) Energy efficiency project.--The term ``energy efficiency
project'' means the installation or upgrading of equipment that
results in a significant reduction in energy usage.
(33) Energy measure.--The term ``energy measure'' includes--
(A) solar thermal energy equipment that is--
(i) of the active type based on mechanically
forced energy transfer;
(ii) of the passive type based on convective,
conductive, or radiant energy transfer; or
(iii) a combination of the types described in
clauses (i) and (ii);
(B) photovoltaic cells and related equipment;
(C) a product or service--
(i) the primary purpose of which is
conservation of energy through a device or
technique that increases the energy efficiency
of existing equipment, methods of operation, or
systems that use fossil fuel; and
(ii) that is on the Energy Conservation
Measures list of the Secretary of Energy or
that the Administrator determines to be
consistent with the intent of this paragraph;
(D) equipment the primary purpose of which is
production of energy from wood, biological waste,
grain, or another biomass (as defined by the
Administrator) source of energy;
(E) equipment the primary purpose of which is
industrial cogeneration of energy, district heating, or
production of energy from industrial waste;
(F) hydroelectric power equipment;
(G) wind energy conversion equipment; and
(H) an engineering, architectural, consulting, or
other professional service that is necessary or
appropriate to aid citizens in using any of the
measures described in subparagraphs (A) to (G).
(34) ESOP.--Effective on and after the date the Administrator
and the Secretary of Veterans Affairs jointly issue
implementing regulations described in section 1832(e) of the
National Defense Authorization Act for Fiscal Year 2017 (Public
Law 114-328, 130 Stat. 2660), the term ``ESOP'' has the meaning
given the term ``employee stock ownership plan'' in section
4975(e)(7) of the Internal Revenue Code of 1986 (26 U.S.C.
4975(e)(7)).
(35) Expedited disaster assistance business loan guarantee
program.--The term ``expedited disaster assistance business
loan guarantee program'' means the program under chapter 227.
(36) Export assistance center.--The term ``export assistance
center'' means a 1-stop shop for United States exporters
established by the United States and Foreign Commercial Service
of the Department of Commerce pursuant to section 2301(b)(8) of
the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.
4721(b)(8)).
(37) Export development activity.--The term ``export
development activity'' includes--
(A) obtaining a standby letter of credit when
required as a bid bond, performance bond, or advance
payment guarantee;
(B) participation in a trade show that takes place
outside the United States;
(C) translation of product brochures or catalogues
for use in markets outside the United States;
(D) obtaining a general line of credit for export
purposes;
(E) performing a service contract from buyers located
outside the United States;
(F) obtaining transaction-specific financing
associated with completing export orders;
(G) purchasing real estate or equipment to be used in
the production of a good or service for export;
(H) providing a term loan or other financing to
enable a small business concern, including an export
trading company and an export management company, to
develop a market outside the United States; and
(I) acquiring, constructing, renovating, modernizing,
improving, or expanding a production facility or
equipment to be used in the United States in the
production of a good or service for export.
(38) Export express program.--The term ``export express
program'' means the program under section 205114 of this title.
(39) Export finance specialist.--The term ``export finance
specialist'' means a full-time equivalent employee of the
Office of International Trade assigned to an export assistance
center to carry out the duties described in section 277105 of
this title.
(40) Export working capital program.--The term ``export
working capital program'' means the program established under
section 205108 of this title.
(41) Express lender.--The term ``express lender'' means a
lender authorized by the Administrator to participate in the
express loan program.
(42) Express loan.--
(A) Export express program.--For purposes of the
export express program, the term ``express loan'' means
a loan in which a lender uses to the maximum extent
practicable the loan analyses, procedures, and
documentation of the lender to provide expedited
processing of a loan application.
(B) Express loan.--For purposes of the express loan
program, the term ``express loan'' means a loan made
pursuant to section 203120 of this title in which a
lender utilizes to the maximum extent practicable its
own loan analyses, procedures, and documentation.
(43) Express loan program.--The term ``express loan program''
means the program for express loans established by the
Administrator under section 7(a)(25)(B) of the Small Business
Act (15 U.S.C. 636(a)(25)(B)) (as in existence on April 5,
2004), with a guarantee rate of not more than 50 percent.
(44) Extraordinary disaster.--The term ``extraordinary
disaster'' means a major disaster that the Administrator
declares to be an extraordinary disaster under section 221108
of this title.
(45) Extraordinary disaster-related substantial economic
injury.--The term ``extraordinary disaster-related substantial
economic injury'' means economic injury to a small business
concern that results in the inability of the small business
concern to--
(A) meet its obligations as they mature;
(B) meet its ordinary and necessary operating
expenses; or
(C) market, produce, or provide a product or service
ordinarily marketed, produced, or provided by the small
business concern;
because the small business concern relies on materials from the
extraordinary disaster area or sells or markets in the
extraordinary disaster area.
(46) FAST program.--The term ``FAST program'' means the
program under section 263305 of this title.
(47) Federal agency.--Except in subtitles III and IV:
(A) In general.--The term ``Federal agency'' has the
meaning given the term ``agency'' in section 551 of
title 5.
(B) Exclusion.--The term ``Federal agency'' does not
include--
(i) the United States Postal Service; or
(ii) the Government Accountability Office.
(48) General business loan program.--The term ``general
business loan program'' means the program under division B of
subtitle II.
(49) Hedge fund.--The term ``hedge fund'' has the meaning
given the term in section 13(h)(2) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1851(h)(2)).
(50) Historically underutilized business zone.--The term
``historically underutilized business zone'' has the meaning
given the term in section 253101 of this title.
(51) Homeowner.--The term ``homeowner'' includes an owner or
lessee of residential property (including personal property of
the owner or lessee of the residential property).
(52) HUBZone.--The term ``HUBZone'' has the meaning given the
term in section 253101 of this title.
(53) HUBZone program.--The term ``HUBZone program'' means the
program under chapter 253.
(54) HUBZone small business concern.--The term ``HUBZone
small business concern'' has the meaning given the term in
section 253101 of this title.
(55) Immediate disaster assistance program.--The term
``immediate disaster assistance program'' means the program
under chapter 225.
(56) Indian reservation.--
(A) In general.--The term ``Indian reservation'' has
the meaning given the term ``Indian country'' in
section 1151 of title 18.
(B) Exclusions.--The term ``Indian reservation'' does
not include--
(i) land located in a State in which an
Indian tribe did not exercise governmental
jurisdiction on December 21, 2000, unless that
Indian tribe is recognized after December 21,
2000, by either an Act of Congress or pursuant
to regulations of the Secretary of the Interior
for the administrative recognition that an
Indian group exists as an Indian tribe (part 83
of title 25, Code of Federal Regulations); or
(ii) land taken into trust or acquired by an
Indian tribe after December 21, 2000, if the
land--
(I) is not located within the
external boundaries of an Indian
reservation or former reservation; or
(II) is not contiguous to the land
held in trust or restricted status on
December 21, 2000.
(C) Land in oklahoma.--With respect to land in the
State of Oklahoma, the term ``Indian reservation''
means land that--
(i) is within the jurisdictional areas of an
Oklahoma Indian tribe (as determined by the
Secretary of the Interior); and
(ii) is 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).
(57) Lower tier subcontractor.--The term ``lower tier
subcontractor'' means a subcontractor other than a 1st tier
subcontractor.
(58) Major disaster.--The term ``major disaster'' has the
meaning given the term in section 102 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).
(59) Major disaster area.--The term ``major disaster area''
means the area for which a major disaster is declared.
(60) Microloan program.--The term ``microloan program'' means
the program under chapter 213.
(61) Military department.--The term ``military department''
has the meaning given the term in section 101 of title 10.
(62) Multiple award contract.--The term ``multiple award
contract'' means--
(A) a multiple award task order contract or delivery
order contract that is entered into under chapter 41 of
title 41; and
(B) any other indefinite delivery, indefinite
quantity contract that is entered into by the head of a
Federal agency with 2 or more sources pursuant to the
same solicitation.
(63) Native hawaiian organization.--The term ``Native
Hawaiian organization'' means a community service organization
serving Native Hawaiians in the State of Hawaii--
(A) that is a nonprofit corporation that has filed
articles of incorporation with the director of the
Hawaii Department of Commerce and Consumer Affairs, or
any successor agency;
(B) that is controlled by Native Hawaiians; and
(C) the business activities of which will principally
benefit Native Hawaiians in the State of Hawaii.
(64) New markets venture capital company program.--The term
``new markets venture capital company program'' means the
program under chapter 305.
(65) Non-federally regulated lender.--The term ``non-
federally regulated lender'' means a business concern (other
than a small business lending company)--
(A) that is authorized by the Administrator to make
loans under the general business loan program;
(B) that is subject to regulation by a State; and
(C) the lending activities of which are not regulated
by any Federal banking authority.
(66) Preferred lender.--The term ``preferred lender'' means a
lender participating in the preferred lenders program.
(67) Preferred lenders program.--The term ``preferred lenders
program'' means the preferred lenders program carried out under
section 103202(f)(3) of this title.
(68) Premier certified lenders program.--The term ``premier
certified lenders program'' means the program under section
331108 of this title.
(69) PRIME program.--The term ``PRIME program'' means the
program under chapter 401.
(70) Private disaster assistance program.--The term ``private
disaster assistance program'' means the program under chapter
223.
(71) Private equity firm.--The term ``private equity firm''
has the meaning given the term ``private equity fund'' in
section 13(h)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1851(h)(2)).
(72) Procuring agency.--The term ``procuring agency'' means a
Federal agency that has procurement power.
(73) Public or private organization for the disabled.--The
term ``public or private organization for the disabled'' means
an organization--
(A) that is organized under the laws of the United
States or of a State;
(B) that is operated in the interest of disabled
individuals;
(C) the net income of which does not inure in whole
or in part to the benefit of any shareholder or other
individual;
(D) that complies with any applicable occupational
health and safety standard prescribed by the Secretary
of Labor; and
(E) that, in the production of commodities and in the
provision of services during any fiscal year in which
the organization received financial assistance under
the general business loan program, employs disabled
individuals for not less than 75 percent of the man-
hours required for the production or provision of the
commodities or services.
(74) Qualified census tract.--
(A) In general.--The term ``qualified census tract''
has the meaning given the term in section
42(d)(5)(B)(ii) of the Internal Revenue Code of 1986
(26 U.S.C. 42(d)(5)(B)(ii)).
(B) Exception for puerto rico.--
(i) In general.--For a metropolitan
statistical area in Puerto Rico, the term
``qualified census tract'' has the meaning
given the term in clause (ii) of section
42(d)(5)(B) of the Internal Revenue Code of
1986 (26 U.S.C. 42(d)(5)(B)(ii)) as applied
without regard to subclause (II) of that
clause.
(ii) Applicability.--This subparagraph
applies on the earlier of--
(I) the date that is 10 years after
the date on which the Administrator
implements this subparagraph; or
(II) the date on which the Financial
Oversight and Management Board for
Puerto Rico established by section 101
of the Puerto Rico Oversight,
Management, and Economic Stability Act
(48 U.S.C. 2121) ceases to exist.
(75) Qualified employee trust.--The term ``qualified employee
trust'' has the meaning given the term in section 205109(a) of
this title.
(76) Qualified hubzone small business concern.--The term
``qualified HUBZone small business concern'' has the meaning
given the term in section 253101 of this title.
(77) Qualified indian tribe.--The term ``qualified Indian
tribe'' means an Indian tribe (as defined in section 4 of the
Indian Self-Determination and Education Assistance Act (25
U.S.C. 450b)) that owns and controls 100 percent of a small
business concern.
(78) Qualified nonmetropolitan county.--The term ``qualified
nonmetropolitan county'' has the meaning given the term in
section 253101 of this title.
(79) Redesignated area.--The term ``redesignated area'' has
the meaning given the term in section 253101 of this title.
(80) Renewable energy system.--The term ``renewable energy
system'' means a system of energy derived from--
(A) a wind, solar, biomass (including biodiesel), or
geothermal source; or
(B) hydrogen derived from biomass or water using an
energy source described in subparagraph (A).
(81) Renewable fuel capital investment pilot program.--The
term ``renewable fuel capital investment pilot program'' means
the program under chapter 307.
(82) Reservist.--The term ``reservist'' means a member of a
reserve component of the Armed Forces, as described in section
10101 of title 10.
(83) SBA.--The term ``SBA'' means the Small Business
Administration.
(84) SBA district.--The term ``SBA district'' means a part of
an SBA region designated by the Administrator as a district.
(85) SBA district office.--The term ``SBA district office''
means a district office of SBA established under section
103101(c) of this title.
(86) SBA region.--The term ``SBA region'' means a geographic
region served by an SBA regional office.
(87) SBA regional office.--The term ``SBA regional office''
means a regional office of SBA established under section
103101(c) of this title.
(88) SBIR agency.--The term ``SBIR agency'' has the meaning
given the term in section 261101 of this title.
(89) SBIR program.--The term ``SBIR program'' has the meaning
given the term in section 261101 of this title.
(90) SCORE.--The term ``SCORE'' means a service corps of
retired executives established under section 241103(b) of this
title.
(91) Senior procurement executive.--The term ``senior
procurement executive'' means an official designated under
section 1702 of title 41 as the senior procurement executive
for a Federal agency.
(92) Service-disabled veteran.--The term ``service-disabled
veteran'' means a veteran with a disability that is service-
connected (as defined in section 101 of title 38).
(93) Simplified acquisition threshold.--The term ``simplified
acquisition threshold'' has the meaning given the term in
section 134 of title 41.
(94) Small agricultural cooperative.--
(A) In general.--The term ``small agricultural
cooperative'' means an association (corporate or
otherwise) acting pursuant to the Agricultural
Marketing Act (12 U.S.C. 1141 et seq.) the size of
which does not exceed the size standard established by
the Administrator for other similar agricultural small
business concerns.
(B) Size determination.--In determining the size of
an association described in subparagraph (A), the
Administrator--
(i) shall regard the association as a
business concern; and
(ii) shall not include the income or
employees of any member shareholder of the
association.
(95) Small business concern.--The term ``small business
concern'' has the meaning given the term under section 101103
of this title.
(96) Small business concern owned and controlled by service-
disabled veterans.--
(A) Effective prior to joint issuance of implementing
regulations.--Effective prior to the date on which the
Administrator and the Secretary of Veterans Affairs
jointly issue implementing regulations described in
section 1832(e) of the National Defense Authorization
Act for Fiscal Year 2017 (Public Law 114-328, 130 Stat.
2660), the term ``small business concern owned and
controlled by service-disabled veterans'' means a small
business concern--
(i) not less than 51 percent of which is
owned by 1 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 1 or more service-disabled
veterans; and
(ii) the management and daily business
operations of which are controlled by 1 or more
service-disabled veterans or, in the case of a
veteran with permanent and severe disability,
the spouse or permanent caregiver of the
veteran.
(B) Effective with joint issuance of implementing
regulations.--Effective on and after the date on which
the Administrator and the Secretary of Veterans Affairs
jointly issue implementing regulations described in
section 1832(e) of the National Defense Authorization
Act for Fiscal Year 2017 (Public Law 114-328, 130 Stat.
2660), the term ``small business concern owned and
controlled by service-disabled veterans'' means any of
the following:
(i) A small business concern--
(I) not less than 51 percent of which
is owned by 1 or more service-disabled
veterans or, in the case of any
publicly owned business, not less than
51 percent of the stock (not including
any stock owned by an ESOP) of which is
owned by 1 or more service-disabled
veterans; and
(II) the management and daily
business operations of which are
controlled by 1 or more service-
disabled veterans or, in the case of a
veteran with permanent and severe
disability, the spouse or permanent
caregiver of the veteran.
(ii) A small business concern--
(I) not less than 51 percent of which
is owned by 1 or more service-disabled
veterans with a disability that is
rated by the Secretary of Veterans
Affairs as a permanent and total
disability who are unable to manage the
daily business operations of such
concern; or
(II) in the case of a publicly owned
business, not less than 51 percent of
the stock (not including any stock
owned by an ESOP) of which is owned by
1 or more such veterans.
(iii)(I) During the time period described in
subclause (II), a small business concern that
was a small business concern described in
clause (i) or (ii) immediately prior to the
death of a service-disabled veteran who was the
owner of the concern, the death of whom causes
the concern to be less than 51 percent owned by
1 or more service-disabled veterans, if--
(aa) the surviving spouse of the
deceased veteran acquires such
veteran's ownership interest in such
concern;
(bb) such veteran had a service-
connected disability (as defined in
section 101(16) of title 38) rated as
100 percent disabling under the laws
administered by the Secretary of
Veterans Affairs or such veteran died
as a result of a service-connected
disability; and
(cc) immediately prior to the death
of such veteran, and during the period
described in subclause (II), the small
business concern is included in the
database described in section 8127(f)
of title 38.
(II) The time period described in this
subclause is the time period beginning on the
date of the veteran's death and ending on the
earliest of--
(aa) the date on which the surviving
spouse remarries;
(bb) the date on which the surviving
spouse relinquishes an ownership
interest in the small business concern;
or
(cc) the date that is 10 years after
the date of the death of the veteran.
(97) Small business concern owned and controlled by socially
and economically disadvantaged individuals.--The term ``small
business concern owned and controlled by socially and
economically disadvantaged individuals'' has the meaning given
the term in section 231101 of this title.
(98) 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 1
or more veterans; and
(B) the management and daily business operations of
which are controlled by 1 or more veterans.
(99) Small business concern owned and controlled by women.--
The term ``small business concern owned and controlled by
women'' means a small business concern--
(A) at least 51 percent of which is owned by 1 or
more women; and
(B) the management and daily business operations of
the business of which are controlled by 1 or more
women.
(100) Small business development center.--The term ``small
business development center'' means a small business
development center that receives financial assistance under
chapter 271.
(101) Small business development center program.--The term
``small business development center program'' means the small
business development center program under chapter 271.
(102) Small business investment company program.--The term
``small business investment company program'' means the program
under chapter 303.
(103) Small business lending company.--The term ``small
business lending company'' means a business concern--
(A) that is authorized by the Administrator to make
loans under the general business loan program; and
(B) the lending activities of which are not subject
to regulation by any Federal or State regulatory
agency.
(104) Socially and economically disadvantaged individual.--
The term ``socially and economically disadvantaged individual''
has the meaning given the term in section 231101 of this title.
(105) Socially disadvantaged individual.--The term ``socially
disadvantaged individual'' has the meaning given the term in
section 231101 of this title.
(106) STTR agency.--The term ``STTR agency'' has the meaning
given the term in section 261101 of this title.
(107) STTR program.--The term ``STTR program'' has the
meaning given the term in section 261101 of this title.
(108) Subcontract.--The term ``subcontract'' means a binding
agreement between a contractor and a person for the person to
perform all or part of the work that the contractor undertakes
to perform under a contract with another person.
(109) Subcontractor.--The term ``subcontractor'' means a
person that enters into a subcontract with a contractor as
described in paragraph (107).
(110) Subcontractor at any tier.--The term ``subcontractor at
any tier'' means--
(A) a 1st tier subcontractor; and
(B) a lower tier subcontractor.
(111) Surety bond guarantee program.--The term ``surety bond
guarantee program'' means the program under chapter 321.
(112) Surviving spouse.--Effective on and after the date the
Administrator and the Secretary of Veterans Affairs jointly
issue implementing regulations described in section 1832(e) of
the National Defense Authorization Act for Fiscal Year 2017
(Public Law 114-328, 130 Stat. 2660), the term ``surviving
spouse'' has the meaning given the term in section 101(3) of
title 38.
(113) United states.--The term ``United States'' includes the
States, the District of Columbia, Puerto Rico, and any other
territory (including a possession) of the United States.
(114) Venture capital operating company.--The term ``venture
capital operating company'' means an entity described in clause
(i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of
Federal Regulations (or any successor regulation).
(115) Veteran.--The term ``veteran'' has the meaning given
the term in section 101 of title 38.
(116) Women's business center.--The term ``women's business
center'' means a women's business center operating under
chapter 273.
(117) Women's business center program.--The term ``women's
business center program'' means the women's business center
program under chapter 273.
Sec. 101103. Small business concerns
(a) In General.--In this title, the term ``small business concern''
means a business concern (including an agricultural enterprise) that--
(1) is independently owned and operated; and
(2) is not dominant in its field of operation.
(b) Size Standards.--
(1) In general.--In addition to the criteria specified in
subsection (a), 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 title or any other law.
(2) Additional criteria.--The standards described in
paragraph (1) may use--
(A) number of employees, dollar volume of business,
net worth, net income, or a combination thereof; or
(B) other appropriate factors.
(3) Requirements for prescription of size standard.--Unless
specifically authorized by statute, no Federal agency may
prescribe a size standard for categorizing a business concern
as a small business concern unless the proposed size standard--
(A) is proposed after an opportunity for public
notice and comment;
(B) provides for determining--
(i) the size of a manufacturing concern as
measured by the manufacturing concern's average
employment based on 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
(C) is approved by the Administrator.
(4) Variation by industry; consideration of other factors.--
In establishing or approving a size standard under this
subsection, the Administrator shall--
(A) ensure that the size standard varies from
industry to industry to the extent necessary to reflect
the differing characteristics of the various
industries; and
(B) consider other factors that the Administrator
considers to be relevant.
(5) Alternative size standards.--
(A) In general.--The Administrator shall establish an
alternative size standard for applicants for business
loans under the general business loan program and
applicants for development company loans under the
certified development company program.
(B) Use of maximum tangible net worth and average net
income.--The alternative size standard under
subparagraph (A) shall use maximum tangible net worth
and average net income as an alternative to the use of
industry standards.
(6) Proposed rulemaking.--In conducting rulemaking to revise,
modify, or establish a size standard under this section, the
Administrator shall consider, address, and make publicly
available as part of the notice of proposed rulemaking and
notice of final rule--
(A) a detailed description of the industry for which
the new size standard is proposed;
(B) an analysis of the competitive environment for
that industry;
(C) the approach that the Administrator used to
develop the proposed standard, including the source of
all data used to develop the proposed rulemaking; and
(D) the anticipated effect of the proposed rulemaking
on the industry, including--
(i) the number of concerns that do not
currently qualify as a small business concern
that would qualify as a small business concern
under the proposed rulemaking; and
(ii) the number of concerns that currently
qualify as a small business concern that would
not qualify as a small business concern under
the proposed rulemaking.
(7) Common size standards.--In carrying out this subsection,
the Administrator may establish or approve a single size
standard for a grouping of 4-digit North American Industry
Classification System codes only if the Administrator makes
publicly available, not later than the date on which the size
standard is established or approved, a justification
demonstrating that the size standard is appropriate for each
individual industry classification included in the grouping.
(8) Number of size standards.--The Administrator shall not
limit the number of size standards established under this
subsection, but shall assign the appropriate size standard to
each North American Industry Classification System code.
(9) Listing of additional size standards.--The Administrator
shall prescribe regulations to carry out this subsection. The
regulations shall include a listing of all small business size
standards prescribed by statute or by individual Federal
agencies, identifying the programs or purposes to which the
size standards apply.
(10) Updated size standards.--
(A) Rolling review.--
(i) In general.--The Administrator shall--
(I) during every 18-month period,
conduct a detailed review of not less
than \1/3\ of the size standards for
small business concerns established
under this subsection, which shall
include holding not less than 2 public
forums located in different geographic
regions of the United States;
(II) after completing a review under
subclause (I) make appropriate
adjustments to the size standards to
reflect market conditions;
(III) make publicly available--
(aa) information regarding
the factors evaluated as part
of each review conducted under
subclause (I); and
(bb) information regarding
the criteria used for any
revised size standards
promulgated under subclause
(II); and
(IV) not later than 30 days after the
date on which the Administrator
completes a review under subclause (I),
submit to the Committee on Small
Business and Entrepreneurship of the
Senate and the Committee on Small
Business of the House of
Representatives and make publicly
available a report regarding the
review, including why the
Administrator--
(aa) used the factors and
criteria described in subclause
(III); and
(bb) adjusted or did not
adjust any size standard that
was reviewed.
(ii) Complete review of size standards.--The
Administrator shall ensure that each size
standard for small business concerns
established under this subsection is reviewed
under clause (i) not less frequently than once
every 5 years.
(B) Regulations.--The Administrator shall promulgate
regulations for conducting the reviews required under
subparagraph (A).
(C) Agricultural enterprises.--Size standards
established for agricultural enterprises under this
subsection shall be subject to the rolling review
procedures established under this paragraph.
(11) Petitions for reconsideration of size standards.--
(A) In general.--A person may file a petition for
reconsideration with the Office of Hearings and Appeals
of a size standard revised, modified, or established by
the Administrator under this subsection.
(B) Time limit.--A person filing a petition for
reconsideration of a size standard under subparagraph
(A) shall file the petition not later than 30 days
after the publication in the Federal Register of the
notice of final rule to revise, modify, or establish
the size standard.
(C) Process for agency review.--In deciding a
petition for reconsideration under this paragraph, the
Office of Hearings and Appeals shall use the same
process that it uses to decide challenges to the size
of a small business concern.
(D) Judicial review.--The publication of a final rule
in the Federal Register described in subparagraph (B)
shall be considered final agency action for purposes of
seeking judicial review. The filing of a petition for
reconsideration under subparagraph (A) shall not be a
condition precedent to judicial review of a size
standard.
(E) Rules or guidance.--The Office of Hearings and
Appeals shall begin accepting petitions for
reconsideration described in subparagraph (A) after the
date on which the Administrator issues a rule or other
guidance implementing this paragraph. Notwithstanding
the provisions of subparagraph (B), petitions for
reconsideration of size standards revised, modified, or
established in a Federal Register final rule published
between November 25, 2015, and the effective date of
such rule or other guidance shall be considered timely
if filed within 30 days of such effective date.
(c) Size and Status Integrity.--
(1) Recovery of loss from misrepresentation.--
(A) In general.--In a case in which it is established
that a business concern other than a small business
concern, by misrepresentation concerning the small
business size and status of the business concern,
willfully sought and received an award of a contract,
subcontract, cooperative agreement, cooperative
research and development agreement, or grant that was
set aside, reserved, or otherwise classified as
intended for award to small business concerns, the
United States, in addition to any other remedy
available to the United States, shall recover from the
business concern the amount that is equal to the amount
expended by the United States on the contract,
subcontract, cooperative agreement, cooperative
research and development agreement, or grant.
(B) Deemed certifications.--The following actions
shall be deemed affirmative, willful, and intentional
certifications of small business size and status:
(i) Submission of a bid or proposal for a
Federal contract, subcontract, cooperative
agreement, cooperative research and development
agreement, or grant that is reserved, set
aside, or otherwise classified as intended for
award to, small business concerns.
(ii) Submission of a bid or proposal for a
Federal contract, subcontract, cooperative
agreement, cooperative research and development
agreement reserved, or grant that in any way
encourages a Federal agency to classify the bid
or proposal, if awarded, as an award to a small
business concern.
(iii) Registration on a Federal electronic
database for the purpose of being considered
for award of a Federal contract, subcontract,
cooperative agreement, cooperative research and
development agreement, or grant as a small
business concern.
(C) Certification by signature of responsible
official.--
(i) In general.--A solicitation, bid, or
application for a Federal contract,
subcontract, or grant shall contain a
certification concerning the small business
size and status of a business concern seeking
the Federal contract, subcontract, or grant.
(ii) Content of certification.--A
certification that a business concern qualifies
as a small business concern of the exact size
and status claimed by the business concern for
purposes of bidding on a Federal contract or
subcontract, or applying for a Federal grant,
shall contain the signature of an authorized
official on the same page on which the
certification is contained.
(D) Regulations.--The Administrator shall promulgate
regulations to provide adequate protections to
individuals and business concerns from liability under
this paragraph in cases of unintentional errors,
technical malfunctions, and other similar situations.
(2) Annual Certification.--
(A) In general.--A business certified as a small
business concern under this title and subtitle II shall
annually certify its small business size and, if
appropriate, its small business status, by means of a
confirming entry on SBA's Online Representations and
Certifications Application database, or any successor
to the database.
(B) Regulations.--The Administrator, in consultation
with the Inspector General and the Chief Counsel for
Advocacy of SBA, shall promulgate regulations to ensure
that--
(i) no business concern continues to be
certified as a small business concern on SBA's
Online Representations and Certifications
Application database, or any successor to the
database, without fulfilling the requirements
for annual certification under this paragraph;
and
(ii) the requirements of this paragraph are
implemented in a manner presenting the least
possible regulatory burden on small business
concerns.
(3) Policy on prosecutions of small business size and status
fraud.--The Administrator, in consultation with the Attorney
General, shall issue a Governmentwide policy on prosecution of
small business size and status fraud, which shall direct
Federal agencies to appropriately publicize the policy.
(d) Compliance Guide.--Pursuant to section 212(a) of the Small
Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601
note, Public Law 104-121), the Administrator shall issue a compliance
guide to assist business concerns in accurately determining their
status as a small business concern.
Chapter 103--Small Business Administration
Subchapter I--Organization
Sec.
103101. Establishment.
103102. Administrator.
103103. Deputy Administrator.
103104. Associate Administrators.
103105. Personnel.
103106. Small Business Investment Division.
103107. Office of Advocacy.
103108. Division of Program Certification and Eligibility.
103109. Office of International Trade.
103110. Office of Rural Affairs.
103111. Office of Women's Business Ownership.
103112. Small Business and Agriculture Regulatory Enforcement
Ombudsman; regional small business regulatory fairness boards.
103113. Office of Veterans Business Development.
103114. Task force on purchases from people who are blind or severely
disabled.
103115. Advisory committees.
103116. Bureau of PCLP Oversight.
103117. Office of Hearings and Appeals.
Subchapter II--Functions
103201. General powers.
103202. Financial management.
103203. Small business economic database.
103204. Small business computer security and education program.
103205. General policies governing the granting and denial of
applications.
103206. Retention of records.
103207. Consultation and cooperation with other Federal agencies.
103208. Representation of status as small business concern.
103209. Criminal background checks.
Subchapter I--Organization
Sec. 103101. Establishment
(a) In General.--There is established to carry out the authorities
committed to the Administrator under this title and other law an agency
to be known as the Small Business Administration.
(b) Independent Establishment.--SBA shall be under the general
direction and supervision of the President and shall not be affiliated
with or be within any other Federal agency.
(c) Offices.--SBA's principal office shall be located in the District
of Columbia. The Administrator may establish such regional, district,
and branch offices in other places in the United States as the
Administrator may determine.
Sec. 103102. Administrator
(a) In General.--The management of SBA 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 small business needs and problems.
(b) Full-Time Position.--The Administrator shall not engage in any
business, vocation, or employment other than that of serving as
Administrator.
Sec. 103103. Deputy Administrator
(a) In General.--The President may appoint a Deputy Administrator of
SBA, by and with the advice and consent of the Senate.
(b) Duties.--The Deputy Administrator shall be Acting Administrator
of SBA during the absence or disability of the Administrator or in the
event of a vacancy in the office of Administrator.
Sec. 103104. Associate Administrators
(a) In General.--The Administrator may appoint Associate
Administrators (including the Associate Administrator specified in
section 103106 of this title) to assist in the execution of the
functions vested in the Administrator.
(b) Associate Administrator for Veterans Business Development.--
(1) In general.--One Associate Administrator appointed under
subsection (a) shall be the Associate Administrator for
Veterans Business Development.
(2) Position.--The Associate Administrator for Veterans
Business Development shall be an appointee in the Senior
Executive Service.
(3) Reporting.--The Associate Administrator for Veterans
Business Development shall report to and be responsible
directly to the Administrator.
(4) Duties.--The Associate Administrator for Veterans
Business Development shall administer the Office of Veterans
Business Development established under section 103113 of this
title.
(c) Associate Administrator for Minority Small Business and Capital
Ownership Development.--
(1) In general.--One of the Associate Administrators shall be
designated at the time of appointment as the Associate
Administrator for Minority Small Business and Capital Ownership
Development.
(2) Position.--The Associate Administrator for Minority Small
Business and Capital Ownership Development shall be an employee
in the competitive service or a career appointee in the Senior
Executive Service, and the position of Associate Administrator
for Minority Small Business and Capital Ownership Development
shall be a career reserved position.
(3) Duties.--
(A) Formulation and coordination of policies.--The
Associate Administrator for Minority Small Business and
Capital Ownership Development shall be responsible for
formulating and coordinating policies relating to
Federal assistance to small business concerns eligible
for assistance under section 205104 of this title and
small business concerns eligible to receive contracts
under the business development program.
(B) Business development program.--The Associate
Administrator for Minority Small Business and Capital
Ownership Development shall be responsible to the
Administrator for the formulation, execution, and
management of the business development program
(including the making of determinations under
paragraphs (8), (15), (16), and (17) of section 231101
of this title and sections 233110, 233112(a)(1), and
233118(g) of this title), under the supervision of the
Administrator.
(d) Associate Administrator for Small Business Development Centers.--
(1) Appointment and compensation.--The Administrator shall
appoint an Associate Administrator for Small Business
Development Centers who shall--
(A) report to an official who is not more than 1
level below the Office of the Administrator; and
(B) serve without regard to the provisions of title 5
governing appointments in the competitive service, and
without regard to chapter 51 and subchapter III of
chapter 53 of that title relating to classification and
General Schedule pay rates, but at a rate not less than
the rate of pay for a position classified above GS-15
pursuant to section 5108 of title 5.
(2) Duties.--
(A) In general.--The sole responsibility of the
Associate Administrator for Small Business Development
Centers shall be to administer the small business
development center program.
(B) Duties included.--Duties of the position shall
include--
(i) recommending the annual budget for the
small business development center program;
(ii) reviewing the annual budgets submitted
by each applicant under the small business
development center program;
(iii) establishing appropriate funding levels
for applicants under the small business
development center program;
(iv) selecting applicants to participate in
the small business development center program;
(v) implementing chapter 271;
(vi) maintaining a clearinghouse to provide
for the dissemination and exchange of
information between small business development
centers; and
(vii) conducting audits of recipients of
grants under chapter 241.
(3) Consultation.--
(A) In general.--In carrying out the duties described
in this subsection, the Associate Administrator for
Small Business Development Centers shall confer with
and seek the advice of the National Small Business
Development Center Advisory Board and SBA officials in
areas served by the small business development centers.
(B) Responsibility.--Notwithstanding subparagraph
(A), the Associate Administrator shall be responsible
for the management and administration of the program
and shall not be subject to the approval or concurrence
of SBA officials described in subparagraph (A).
(e) Associate Administrator for International Trade.--One of the
Associate Administrators shall be the Associate Administrator for
International Trade, who shall be the head of the Office of
International Trade established under section 103109 of this title.
(f) Chief Hearing Officer.--One of the Associate Administrators shall
be the Chief Hearing Officer, who shall administer the Office of
Hearings and Appeals established under section 103117 of this title.
Sec. 103105. Personnel
(a) In General.--The Administrator may, subject to the civil service
and classification laws--
(1) select, employ, appoint, and fix the compensation of such
officers, employees, attorneys, and agents as are necessary to
carry out this title;
(2) define their authority and duties; and
(3) pay the costs of qualification of certain of them as
notaries public.
(b) Individuals Employed To Render Temporary Services in Connection
With a Disaster.--
(1) In general.--The Administrator may pay the transportation
expenses and per diem in lieu of subsistence expenses, in
accordance with subchapter I of chapter 57 of title 5, for
travel of any individual employed by SBA to render temporary
services not in excess of 6 months in connection with a
disaster from place of appointment to, and while at, the
disaster area and any other temporary posts of duty and return
on completion of the assignment.
(2) Extension of term.--The Administrator may extend the six-
month limitation under paragraph (1) for an additional 6 months
if the Administrator determines that the extension is necessary
to continue efficient disaster loan making activities.
(c) Experts and Consultants.--
(1) In general.--To such extent as the Administrator finds
necessary to carry out this title, the Administrator may
procure the temporary (not in excess of 1 year) or intermittent
services of experts or consultants (including stenographic
reporting services) by contract or appointment.
(2) Inapplicability of other law.--Service procured under
paragraph (1)--
(A) shall be without regard to the civil service and
classification laws; and
(B) except in the case of stenographic reporting
services by an organization, shall be without regard to
section 6101 of title 41.
(3) Compensation.--An individual employed under paragraph
(1)--
(A) may be compensated at a rate not in excess of the
daily equivalent of the maximum rate payable under
section 5376 of title 5, including travel time; and
(B) while away from the individual's home or regular
place of business, may be allowed travel expenses
(including per diem in lieu of subsistence) as
authorized by section 5703 of title 5.
Sec. 103106. Small Business Investment Division
(a) Establishment of Division.--There is established in SBA a
division to be known as the Small Business Investment Division.
(b) Associate Administrator.--The Small Business Investment Division
shall be headed by an Associate Administrator appointed by the
Administrator.
(c) Compensation.--The Associate Administrator shall receive
compensation at the rate provided by law for other SBA Associate
Administrators.
Sec. 103107. Office of Advocacy
(a) Definitions.--In this section:
(1) Chief counsel.--The term ``Chief Counsel'' means the
Chief Counsel for Advocacy appointed under subsection (c).
(2) Office.--The term ``Office'' means the Office of Advocacy
established by subsection (b).
(b) Establishment of Office.--There is established in SBA the Office
of Advocacy.
(c) Chief Counsel for Advocacy.--The management of the Office shall
be vested in a Chief Counsel for Advocacy, who shall be appointed from
civilian life by the President, by and with the advice and consent of
the Senate.
(d) Primary Functions.--The primary functions of the Chief Counsel
shall be to--
(1) examine the role of small business in the American
economy and the contribution that small business can make in
improving competition, encouraging economic and social mobility
for all citizens, restraining inflation, spurring production,
expanding employment opportunities, increasing productivity,
promoting exports, stimulating innovation and entrepreneurship,
and providing an avenue through which new and untested products
and services can be brought to the marketplace;
(2) assess the effectiveness of Federal subsidy and
assistance programs for small business and the desirability of
reducing the emphasis on such programs and increasing the
emphasis on general assistance programs designed to benefit all
small business concerns;
(3)(A) measure the direct costs and other effects of
government regulation on small business concerns; and
(B) make legislative and nonlegislative proposals for
eliminating excessive or unnecessary regulation of small
business concerns;
(4) determine the impact of the tax structure on small
business concerns and make legislative and other proposals for
altering the tax structure to enable all small business
concerns to realize their potential for contributing to the
improvement of the Nation's economic well-being;
(5) study the ability of financial markets and institutions
to meet small business credit needs and determine the impact of
government demands for credit on small business concerns;
(6) determine financial resource availability and recommend
methods for delivery of financial assistance to minority
enterprises, including methods for--
(A) securing equity capital;
(B) generating markets for goods and services;
(C) providing effective business education, more
effective management and technical assistance, and
training; and
(D) providing assistance in complying with Federal,
State, and local law;
(7) evaluate the efforts of Federal agencies, business, and
industry to assist minority business concerns;
(8) make such recommendations as may be appropriate to assist
the development and strengthening of minority and other small
business concerns;
(9)(A) recommend specific measures for creating an
environment in which all businesses will have the opportunity
to compete effectively and expand to their full potential; and
(B) ascertain the common reasons, if any, for small business
successes and failures;
(10)(A) determine the desirability of developing a set of
rational, objective criteria to be used to define small
business; and
(B) develop such criteria, if appropriate; and
(11)(A) evaluate the efforts of each Federal agency, and of
private industry, to assist small business concerns owned and
controlled by veterans and small business concerns owned and
controlled by service-disabled veterans;
(B) provide statistical information on the use of such
programs by small business concerns owned and controlled by
veterans and small business concerns owned and controlled by
service-disabled veterans; and
(C) make appropriate recommendations to the Administrator and
to Congress to promote the establishment and growth of small
business concerns owned and controlled by veterans and small
business concerns owned and controlled by service-disabled
veterans.
(e) Duties To Be Performed on a Continuing Basis.--
(1) In general.--The Chief Counsel shall perform the duties
described in this subsection on a continuing basis.
(2) Complaints, criticisms, and suggestions.--The Chief
Counsel shall serve as a focal point for the receipt of
complaints, criticisms, and suggestions concerning the policies
and activities of SBA and any other Federal agency that affects
small business concerns.
(3) Counseling.--The Chief Counsel shall counsel small
business concerns on how to resolve questions and problems
concerning the relationship of the small business to the
Federal Government.
(4) Proposals for change.--The Chief Counsel shall--
(A) develop proposals for changes in the policies and
activities of any Federal agency that will better
fulfill the purposes of this subtitle and subtitle II;
and
(B) communicate the proposals to the appropriate
Federal agencies.
(5) Representation of views and interests.--The Chief Counsel
shall represent the views and interests of small business
concerns before other Federal agencies the policies and
activities of which may affect small business.
(6) Dissemination of information.--The Chief Counsel shall
enlist the cooperation and assistance of public and private
agencies, businesses, and other organizations in
disseminating--
(A) information about the programs and services
provided by the Federal Government that are of benefit
to small business concerns; and
(B) information on how small business concerns can
participate in or make use of those programs and
services.
(7) Regulatory analysis.--The Chief Counsel shall carry out
the responsibilities of the Office under chapter 6 of title 5.
(f) Outreach and Input From Small Businesses on Trade Promotion
Authority.--
(1) Definitions.--In this subsection:
(A) Agency.--The term ``agency'' has the meaning
given the term in section 551 of title 5.
(B) Covered trade agreement.--The term ``covered
trade agreement'' means a trade agreement that at any
time on or after February 24, 2016, is being negotiated
pursuant to section 103(b) of the Bipartisan
Congressional Trade Priorities and Accountability Act
of 2015 (19 U.S.C. 4202(b)).
(C) Working group.--The term ``working group'' means
the interagency working group convened under paragraph
(2)(A).
(2) Working group.--
(A) In general.--Not later than 30 days after the
date on which the President submits the notification
required under section 105(a) of the Bipartisan
Congressional Trade Priorities and Accountability Act
of 2015 (19 U.S.C. 4204(a)), the Chief Counsel shall
convene an interagency working group, which shall
consist of an employee from each of the following
agencies, as selected by the head of the agency or an
official delegated by the head of the agency:
(i) The Office of the United States Trade
Representative.
(ii) The Department of Commerce.
(iii) The Department of Agriculture.
(iv) Any other agency that the Chief Counsel,
in consultation with the United States Trade
Representative, determines to be relevant with
respect to the subject of the covered trade
agreement.
(B) Views of small businesses.--Not later than 30
days after the date on which the Chief Counsel convenes
the working group under subparagraph (A), the Chief
Counsel shall identify a diverse group of small
businesses, representatives of small businesses, or a
combination thereof, to provide to the working group
the views of small businesses in the manufacturing,
services, and agriculture industries on the potential
economic effects of the covered trade agreement.
(3) Report.--
(A) In general.--Not later than 180 days after the
date on which the Chief Counsel convenes the working
group under paragraph (2)(A), the Chief Counsel shall
submit to the Committee on Small Business and
Entrepreneurship and Committee on Finance of the Senate
and the Committee on Small Business and Committee on
Ways and Means of the House of Representatives a report
on the economic impacts of the covered trade agreement
on small businesses.
(B) Contents.--The report shall--
(i) identify the most important priorities,
opportunities, and challenges to various
industries from the covered trade agreement;
(ii) assess the impact for new small
businesses to start exporting, or increase
their exports, to markets in countries that are
parties to the covered trade agreement;
(iii) analyze the competitive position of
industries likely to be significantly affected
by the covered trade agreement;
(iv) identify--
(I) any State-owned enterprises in
each country participating in
negotiations for the covered trade
agreement that could pose a threat to
small businesses; and
(II) any steps to take to create a
level playing field for those small
businesses;
(v) identify any rule of an agency that
should be modified to become compliant with the
covered trade agreement; and
(vi) include an overview of the methodology
used to develop the report, including the
number of small business participants by
industry, how those small businesses were
selected, and any other factors that the Chief
Counsel considers appropriate.
(C) Delayed submission.--To ensure that negotiations
for the covered trade agreement are not disrupted, the
President may require that the Chief Counsel delay
submission of the report until after the negotiations
for the covered trade agreement are concluded, so long
as the delay allows the Chief Counsel to submit the
report to Congress not later than 45 days before the
Senate or the House of Representatives acts to approve
or disapprove the covered trade agreement.
(D) Avoidance of duplication.--The Chief Counsel
shall, to the extent practicable, coordinate the
submission of the report with the United States
International Trade Commission, the United States Trade
Representative, other agencies, and trade advisory
committees to avoid unnecessary duplication of
reporting requirements.
(g) Rural Tourism Training Program.--In conjunction with the Office
of Rural Affairs and appropriate personnel designated by each SBA
district office, the Chief Counsel shall conduct training sessions on
the types of Federal assistance available for the development of rural
small business concerns engaged in tourism and tourism-related
activities.
(h) Powers.--In carrying out this section, the Chief Counsel may--
(1) employ and fix the compensation of such additional staff
personnel as the Chief Counsel considers necessary, without
regard to the provisions of title 5, governing appointments in
the competitive service, and without regard to chapter 51 or
subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates but at rates not
in excess of the lowest rate for GS-15 of the General Schedule,
except that not more than 14 staff personnel at any 1 time may
be employed and compensated at a rate not in excess of GS-15,
step 10, of the General Schedule;
(2) procure temporary and intermittent services to the same
extent as is authorized by section 3109 of title 5;
(3) consult--
(A) with experts and authorities in the fields of
small business investment, venture capital, and
investment and commercial banking and with other
comparable lending institutions involved in the
financing of business;
(B) with individuals with regulatory, legal,
economic, or financial expertise, including members of
the academic community; and
(C) with individuals who generally represent the
public interest;
(4)(A) use the services of the National Advisory Council
established under section 103115 of this title; and
(B) in accordance with that section, appoint such other
advisory boards or committees as the Chief Counsel considers
reasonably appropriate and necessary to carry out this section;
and
(5) hold hearings and sit and act at such times and places as
the Chief Counsel considers advisable.
(i) Assistance of Federal Agencies.--Each Federal agency shall
furnish the Chief Counsel such reports and other information as the
Chief Counsel considers necessary to carry out this section.
(j) Administrative Operations.--The Administrator shall--
(1) provide the Office with appropriate and adequate office
space at central office and field office locations, together
with such equipment, operating budget, and communications
facilities and services as are necessary; and
(2) provide necessary maintenance services for the central
office and field offices and the equipment and facilities
located in the offices.
(k) Reports.--The Chief Counsel may from time to time prepare and
publish such reports as the Chief Counsel considers appropriate.
Sec. 103108. Division of Program Certification and Eligibility
(a) Definitions.--In this section:
(1) Associate administrator.--The term ``Associate
Administrator'' means the Associate Administrator for Minority
Small Business and Capital Ownership Development.
(2) Director.--The term ``Director'' means the Director of
the Division.
(3) Division.--The term ``Division'' means the Division of
Program Certification and Eligibility established by subsection
(b).
(b) Establishment of Division.--There is established, in the Office
of Minority Small Business and Capital Ownership Development, the
Division of Program Certification and Eligibility.
(c) Director.--The Division shall be headed by a Director, who shall
report directly to the Associate Administrator.
(d) Field Offices.--The Director shall establish field offices within
such SBA regional offices as are necessary to perform efficiently the
functions and responsibilities of the Director.
(e) Duties.--The duties of the Director are--
(1) to receive, review, and evaluate applications for
certification under the business development program;
(2) to advise a business development program applicant within
15 days after receipt of an application whether the application
is complete and suitable for evaluation and, if not, what
matters must be rectified;
(3) to make recommendations on such applications to the
Associate Administrator;
(4) to review and evaluate financial statements and other
submissions from small business concerns participating in the
business development program to ascertain continued eligibility
to receive subcontracts under the business development program;
(5) to make a request for the initiation of termination or
graduation proceedings, as appropriate, to the Associate
Administrator;
(6) to make recommendations to the Associate Administrator
concerning protests from applicants that are denied admission
to the business development program;
(7) to decide protests regarding the status of a small
business concern as a small business concern owned and
controlled by socially and economically disadvantaged
individuals for purposes of any program or activity conducted
under chapter 243 or any other provision of Federal law that
refers to that chapter for a definition of eligibility for any
program; and
(8) to implement such policy directives as are issued by the
Associate Administrator under section 233126 of this title
regarding, among other things, the geographic distribution of
small business concerns to be admitted to the business
development program and the industrial makeup of those small
business concerns.
(f) Decisions on Protests.--
(1) In general.--A decision under subsection (e)(7) shall--
(A) be made available to the protestor, the protested
party, the contracting officer (if not the protestor),
and all other parties to the proceeding, and published
in full text; and
(B) include findings of fact and conclusions of law,
with specific reasons supporting the findings or
conclusions, on each material issue of fact and law of
decisional significance regarding the disposition of
the protest.
(2) Precedential value of prior decisions.--A decision under
subsection (e)(7) that was issued before September 4, 1992,
shall not have value as precedent in deciding any subsequent
protest until the decision is published in full text.
Sec. 103109. Office of International Trade
(a) Establishment of Office.--There is established in SBA the Office
of International Trade, which shall implement the programs under
chapter 277 for the primary purposes of increasing--
(1) the number of small business concerns that export; and
(2) the volume of exports by small business concerns.
(b) Associate Administrator.--The head of the Office shall be the
Associate Administrator for International Trade, who shall be
responsible to the Administrator.
Sec. 103110. Office of Rural Affairs
(a) Definition of Office.--In this section, the term ``Office'' means
the Office of Rural Affairs.
(b) Establishment of Office.--There is established in SBA the Office
of Rural Affairs.
(c) Director.--The Office shall be headed by a director appointed by
the Administrator.
(d) Functions.--The Office shall--
(1) strive to achieve an equitable distribution of the
financial assistance available from SBA for small business
concerns located in rural areas;
(2) to the extent practicable, compile annual statistics on
rural areas, including statistics concerning the population,
poverty, job creation and retention, unemployment, business
failures, and business startups;
(3) provide information to industries, organizations, and
State and local governments concerning the assistance available
to rural small business concerns through SBA and through other
Federal agencies;
(4) provide information to industries, organizations,
educational institutions, and State and local governments
concerning programs administered by private organizations,
educational institutions, and Federal, State, and local
governments that improve the economic opportunities of rural
citizens; and
(5) work with the United States National Tourism Organization
to assist small business concerns in rural areas with tourism
promotion and development.
Sec. 103111. Office of Women's Business Ownership
(a) Definitions.--In this section:
(1) Assistant administrator.--The term ``Assistant
Administrator'' means the Assistant Administrator appointed
under subsection (c).
(2) Office.--The term ``Office'' means the Office of Women's
Business Ownership established by subsection (b).
(b) Establishment of Office.--There is established in SBA the Office
of Women's Business Ownership.
(c) Assistant Administrator.--
(1) In general.--The Office shall be administered by an
Assistant Administrator, who shall be appointed by the
Administrator.
(2) Qualification.--The position of Assistant Administrator
shall be a Senior Executive Service position under section
3132(a)(2) of title 5. The Assistant Administrator shall serve
as a noncareer appointee (as defined in section 3132(a)(7) of
that title).
(d) Duties.--The Assistant Administrator shall--
(1) administer SBA's programs for the development of women's
business enterprises (as defined in section 403101 of this
title);
(2) administer the programs and services of the Office to
assist women entrepreneurs in the areas of--
(A) starting and operating a small business concern;
(B) development of management and technical skills;
(C) seeking Federal procurement opportunities; and
(D) increasing the opportunity for access to capital;
(3) administer and manage the women's business center
program;
(4) recommend the annual administrative and program budgets
for the Office (including the budget for the women's business
center program);
(5) establish appropriate funding levels for the Office;
(6) review the annual budgets submitted by each applicant for
the women's business center program;
(7) select applicants to participate in the women's business
center program;
(8) implement chapter 273;
(9) maintain a clearinghouse to provide for the dissemination
and exchange of information between women's business centers;
(10) serve as the vice chairperson of the Interagency
Committee on Women's Business Enterprise;
(11) serve as liaison for the National Women's Business
Council; and
(12) advise the Administrator on appointments to the Women's
Business Council.
(e) Consultation.--In carrying out the duties described in paragraphs
(2) to (12) of subsection (d), the Assistant Administrator shall confer
with and seek the advice of the SBA officials in areas served by the
women's business centers.
Sec. 103112. Small Business and Agriculture Regulatory Enforcement
Ombudsman; regional small business regulatory
fairness boards
(a) Definitions.--In this section:
(1) Board.--The term ``Board'' means a regional small
business regulatory fairness board established under subsection
(e).
(2) Ombudsman.--The term ``Ombudsman'' means the Small
Business and Agriculture Regulatory Enforcement Ombudsman
designated under subsection (b).
(b) Small Business and Agriculture Regulatory Enforcement
Ombudsman.--The Administrator shall designate a Small Business and
Agriculture Regulatory Enforcement Ombudsman, who shall report directly
to the Administrator, using SBA personnel to the extent practicable.
(c) Duties.--The Ombudsman shall--
(1) work with each Federal agency with regulatory authority
over small business concerns to ensure that small business
concerns that receive or are subject to an audit, on-site
inspection, compliance assistance effort, or other enforcement-
related communication or contact by Federal agency personnel
are provided with a means by which to comment on the
enforcement activity conducted by those personnel;
(2)(A) establish means by which to--
(i) receive comments from a small business concern
regarding actions by Federal agency employees
conducting compliance or enforcement activities with
respect to the small business concern; and
(ii) refer comments to the Inspector General of the
Federal agency in the appropriate circumstances; and
(B) otherwise seek to maintain the identity of the person and
small business concern making such comments on a confidential
basis to the same extent as employee identities are protected
under section 7 of the Inspector General Act of 1978 (5 U.S.C.
App.);
(3) based on substantiated comments received from small
business concerns and the Boards, after having provided each
Federal agency described in paragraph (1) an opportunity to
comment on drafts of the report, annually submit to Congress
and those Federal agencies a report that--
(A) evaluates the enforcement activities of Federal
agency personnel; and
(B) includes--
(i) a rating of the responsiveness to small
business concerns of the various regional and
program offices of each such Federal agency;
and
(ii) a section in which any such Federal
agency may make such comments made by the
Federal agency to drafts of the report as are
not addressed by the Ombudsman in the final
draft; and
(4) coordinate, and annually submit to the Administrator and
to the heads of Federal agencies described in paragraph (1) a
report on, the activities, findings, and recommendations of the
Boards.
(d) Federal Agencies Other Than SBA.--
(1) Actions to ensure compliance.--Federal agencies other
than SBA shall assist the Ombudsman and take actions as
necessary to ensure compliance with this section.
(2) Effect of section.--Nothing in this section replaces or
diminishes the activities of any ombudsman or similar office in
any Federal agency.
(e) Regional Small Business Regulatory Fairness Boards.--
(1) Establishment.--The Administrator shall establish a small
business regulatory fairness board in each SBA regional office.
(2) Membership.--
(A) In general.--A Board shall consist of 5 members
who are owners, operators, or officers of small
business concerns, appointed by the Administrator,
after receiving the recommendations of the chair and
ranking minority member of the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives.
(B) Political affiliation.--Not more than 3 of the
members of a Board shall be of the same political
party.
(C) Government officers or employees.--No member of a
Board shall be an officer or employee of the Federal
Government in the executive branch or in Congress.
(D) Term.--A member of a Board shall serve at the
pleasure of the Administrator for a term of 3 years or
less.
(E) Compensation.--A member of a Board shall serve
without compensation, except that a member shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of
agencies under subchapter I of chapter 57 of title 5
while away from the home or regular place of business
of the member in the performance of services for the
Board.
(3) Chair.--The Administrator shall select a chair from among
the members of a Board, who shall serve at the pleasure of the
Administrator for not more than 1 year as chair.
(4) Quorum.--A majority of the members of a Board shall
constitute a quorum for the conduct of business, but a lesser
number may hold hearings.
(5) Duties.--A Board shall--
(A) meet at least annually to advise the Ombudsman on
matters of concern to small business concerns relating
to the enforcement activities of Federal agencies;
(B) report to the Ombudsman on substantiated
instances of excessive enforcement actions of Federal
agencies against small business concerns, including any
findings or recommendations of the Board as to Federal
agency enforcement policy or practice; and
(C) prior to publication, provide comment on the
annual report of the Ombudsman prepared under
subsection (c).
(6) Powers.--
(A) Hearings; collection of information.--A Board may
hold hearings and collect information as appropriate
for carrying out this section.
(B) Mail.--A Board may use the United States mails in
the same manner and under the same conditions as other
Federal agencies.
(C) Acceptance of donations.--A Board may accept
donations of services necessary to conduct its
business, so long as the donations and their sources
are disclosed by the Board.
Sec. 103113. Office of Veterans Business Development
(a) Definition of Associate Administrator.--In this section, the term
``Associate Administrator'' means the Associate Administrator for
Veterans Business Development under section 103104(b) of this title.
(b) Establishment of Office.--There is established in SBA the Office
of Veterans Business Development, which shall be administered by the
Associate Administrator.
(c) Duties.--The Associate Administrator--
(1) shall be responsible for the formulation, execution, and
promotion of SBA policies and programs that provide assistance
to small business concerns owned and controlled by veterans and
small business concerns owned and controlled by service-
disabled veterans; and
(2) shall act as an ombudsman for full consideration of
veterans in all SBA programs.
Sec. 103114. Task force on purchases from people who are blind or
severely disabled
(a) Establishment of Task Force.--There is established in SBA a task
force on purchases from people who are blind or severely disabled.
(b) Membership.--The task force shall consist of 1 representative of
the small business community appointed by the Administrator and 1
individual knowledgeable in the affairs of or experienced in the work
of sheltered workshops appointed by the Executive Director of the
Committee for Purchase from People Who Are Blind or Severely Disabled
established under section 8502 of title 41.
(c) Duties.--The task force shall meet at least once every 6 months
for the purpose of--
(1) reviewing the award of contracts under section 251103 of
this title; and
(2) recommending to the Administrator such administrative or
statutory changes as the task force considers appropriate.
Sec. 103115. Advisory committees
(a) In General.--The Administrator shall--
(1) establish such advisory committees as are necessary to
achieve the purposes of this subtitle and subtitles II and III;
and
(2) call meetings of the advisory committees from time to
time.
(b) Expenses.--The Administrator shall--
(1) pay the transportation expenses and a per diem allowance
in accordance with section 5703 of title 5 to a member of an
advisory committee for travel and subsistence expenses incurred
at the request of the Administrator in connection with travel
to points more than 50 miles distant from the home of the
member in attending a meeting of the advisory committee; and
(2) rent temporarily, within the District of Columbia or
elsewhere, such hotel or other accommodations as are needed to
facilitate the conduct of meetings of an advisory committee.
Sec. 103116. Bureau of PCLP Oversight
(a) Establishment of Bureau.--There is established in SBA the Bureau
of PCLP Oversight.
(b) Purpose.--The Bureau of PCLP Oversight shall carry out such
functions of the Administrator under section 331108(c) of this title as
the Administrator may designate.
Sec. 103117. Office of Hearings and Appeals
(a) Establishment.--
(1) In general.--There is established in the SBA an Office of
Hearings and Appeals (referred to in this section as the
``Office'').
(2) Office included.--There shall be included within the
Office the office of SBA that handles requests under section
552 of title 5 and maintains records under section 552a of that
title.
(3) Duties.--The Office shall decide matters relating to
program decisions of the Administrator--
(A) for which an Act of Congress requires a hearing
on the record; or
(B) that the Administrator by regulation designates
for hearing.
(4) Jurisdiction.--
(A) In general.--Except as provided in subparagraph
(B), the Office shall hear appeals of agency actions
under or pursuant to this subtitle, subtitles II and
III of this title, and title 13 of the Code of Federal
Regulations, and shall hear such other matters as the
Administrator may determine appropriate.
(B) Exception.--The Office shall not adjudicate
disputes that require a hearing on the record, except
disputes pertaining to the small business programs
described in this subtitle and subtitle II of this
title.
(5) Associate administrator.--The head of the Office shall be
the Chief Hearing Officer appointed under section 103104(f) of
this title, who shall be responsible to the Administrator.
(b) Chief Hearing Officer.--
(1) Qualifications.--The Chief Hearing Officer shall be--
(A) a career appointee in the Senior Executive
Service; and
(B) an attorney licensed by a State, the District of
Columbia, or a territory (including a possession) of
the United States.
(2) Duties.--The Chief Hearing Officer shall be responsible
for the operation and management of the Office.
(3) Alternative dispute resolution.--The Chief Hearing
Officer may assign a matter for mediation or other means of
alternative dispute resolution.
(c) Hearing Officers.--
(1) In general.--The Chief Hearing Officer shall appoint
hearing officers to carry out the duties described in
subsection (a)(3).
(2) Qualifications.--A hearing officer shall be an attorney
licensed by a State, the District of Columbia, or a territory
(including a possession) of the United States.
(3) Status.--A hearing officer appointed under paragraph
(1)--
(A) shall serve in the excepted service as an
employee of SBA under section 2103 of title 5 and under
the supervision of the Chief Hearing Officer;
(B) shall be classified at a position to which
section 5376 of title 5 applies; and
(C) shall be compensated at a rate not exceeding the
maximum rate payable under that section.
(4) Authority; powers.--Notwithstanding section 556(b) of
title 5--
(A) a hearing officer may hear cases arising under
section 554 of that title;
(B) a hearing officer shall have the powers described
in section 556(c) of that title; and
(C) the relevant provisions of subchapter II of
chapter 5 of that title (except for section 556(b) of
that title) shall apply to a hearing officer.
Subchapter II--Functions
Sec. 103201. General powers
(a) Seal.--The Administrator shall have power to adopt, alter, and
use a seal, which shall be judicially noticed.
(b) Services and Facilities.--At the request of the Administrator,
the head of any Federal agency or of the Government Accountability
Office or Postal Service may provide to the Administrator (on a
reimbursable or nonreimbursable basis) information, services,
facilities (including any field service of the Federal agency),
officers, and employees of the Federal agency to assist in carrying out
this title or any other law under which the Administrator provides
assistance to small business concerns.
(c) Court Proceedings.--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 on a United
States district court to determine such controversies without regard to
the amount in controversy; but no attachment, injunction, garnishment,
or other similar process, mesne or final, shall be issued against the
Administrator or SBA property.
(d) Limitation on Advertising Requirement.--Section 6101 of title 41
shall not apply to a contract of hazard insurance or a purchase or
contract for a service or supply on account of property obtained by the
Administrator as a result of a loan made under this subtitle or
subtitle II or III if the premium for the insurance or the amount of
the purchase or contract does not exceed $1,000.
(e) Regulations.--The Administrator may prescribe such regulations as
the Administrator considers necessary to carry out the authority vested
in the Administrator under this subtitle and subtitles II and III.
(f) Acceptance of Services and Facilities.--The Administrator may--
(1) accept the services and facilities of Federal, State, and
local agencies and groups, both public and private; and
(2) use such gratuitous services and facilities as may from
time to time be necessary to further the objectives of the
disaster assistance programs.
(g) Investigations.--
(1) In general.--The Administrator may make such
investigations as the Administrator considers necessary to
determine whether a recipient of or participant in assistance
under this subtitle or subtitle II or III or any other person
has engaged or is about to engage in any act or practice that
constitutes or will constitute a violation of any provision of
this subtitle or subtitle II or III (including a regulation or
order issued under this subtitle or subtitle II or III).
(2) Statements.--The Administrator shall permit any person to
file with the Administrator a statement in writing, under oath
or otherwise as the Administrator shall determine, as to all
the facts and circumstances concerning a matter to be
investigated.
(3) Powers.--For the purpose of any investigation, the
Administrator may administer oaths and affirmations, subpoena
witnesses, compel the attendance of witnesses, take evidence,
and require the production of any records that are relevant to
the inquiry. Attendance of witnesses and the production of any
such records may be required from any place in the United
States.
(4) Contumacy or refusal to obey.--
(A) In general.--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 an investigation or proceeding is
carried on, or in which the person resides or carries
on business, in requiring the attendance and testimony
of witnesses and the production of records, and the
court may issue an order requiring the person to appear
before the Administrator, to produce records, if so
ordered, or to give testimony touching the matter under
investigation.
(B) Failure to obey.--A failure to obey an order
under subparagraph (A) may be punished by the court as
a contempt of court, for which purpose process may be
served in any judicial district of which the person is
an inhabitant or in which the person may be found.
(h) Examination and Review Fees.--
(1) In general.--The Administrator may require a lender
authorized to make loans under the general business loan
program, the disaster loan program, the private disaster
assistance program, the intermediary lending pilot program, or
the microloan program to pay examination and review fees.
(2) Use.--Fees collected under paragraph (1) shall be
deposited in the account for salaries and expenses of the
Administrator and shall be available for the costs of
examinations, reviews, and other lender oversight activities.
(i) Loan Requirements Relating to Assistance Provided to Loan
Applicants, Nonemployment of Persons Associated With SBA, and Loan
Applications.--No loan shall be made or equipment, facilities, or
services furnished by the Administrator under this subtitle or subtitle
II or III to any business concern unless the owners, partners, or
officers of the business concern--
(1) certify to the Administrator--
(A) the names of any attorneys, agents, or other
persons engaged by or on behalf of the business concern
for the purpose of expediting applications made to the
Administrator for assistance of any sort; and
(B) the amount of fees paid or to be paid to any such
persons;
(2) execute an agreement binding the business concern, for a
period of 2 years after any assistance is rendered by the
Administrator to the business concern, to refrain from
employing, tendering any office or employment to, or retaining
for professional services any individual who, on the date on
which any part of the assistance was rendered, or within 1 year
prior to that date, served as an officer, attorney, agent, or
employee of the Administrator occupying a position or engaging
in an activity that, as determined by the Administrator,
involves the exercise of discretion with respect to the
granting of assistance under this subtitle or subtitle II or
III; and
(3) furnish--
(A) the names of lending institutions to which the
business concern has applied for a loan; and
(B) the date, amount, terms, and proof of refusal of
any loan.
(j) Authority Relating to Transfer of Functions, Powers, and
Duties.--The President may--
(1) transfer to the Administrator any function, power, or
duty of any Federal agency that relates primarily to small
business problems; and
(2) in connection with the transfer, provide for appropriate
transfers of records, property, necessary personnel, and
unexpended balances of appropriations and other funds available
to the Federal agency from which the transfer is made.
(k) Fair Charges; Recovery of Direct Costs.--To the fullest extent
that the Administrator considers practicable, the Administrator shall--
(1) make a fair charge for the use of Government-owned
property; and
(2) make and let contracts on a basis that will result in a
recovery of the direct costs incurred by the Administrator.
(l) Nonduplication of Work or Activity.--The Administrator shall not
duplicate the work or activity of any other Federal agency unless such
work or activity is expressly provided for in this subtitle or subtitle
II or III.
(m) Safe Deposit Box Rentals.--Subsections (a) and (b) of section
3324 of title 31 shall not apply to prepayments of rentals made by the
Administrator on safe deposit boxes used by the Administrator for the
safeguarding of instruments held as security for loans or for the
safeguarding of other documents.
(n) Nondiscrimination.--In carrying out the programs administered by
the Administrator, the Administrator shall not discriminate on the
basis of sex or marital status against any small business concern or
other person applying for or receiving assistance from SBA.
(o) Special Consideration to Veterans.--In carrying out the programs
administered by the Administrator, the Administrator shall give special
consideration to veterans and their survivors or dependents.
(p) Prohibition of Use of Funds for Individuals Not Lawfully Within
United States.--None of the funds made available under this subtitle or
subtitle II or III 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.
(q) Obscene Products and Services.--Notwithstanding any other
provision of law, the Administrator shall not provide 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 by a court of competent jurisdiction to be obscene.
(r) Gifts.--In carrying out the functions of the Administrator under
this subtitle and subtitles II and III and to carry out the activities
authorized by chapter 403, the Administrator may--
(1) accept, in the name of the Administrator, and employ or
dispose of in furtherance of the purposes of this subtitle or
subtitle II or III, any money or property, real, personal, or
mixed, tangible, or intangible, received by gift, devise,
bequest, or otherwise; and
(2) accept gratuitous services and facilities.
Sec. 103202. Financial management
(a) Accounts.--
(1) In general.--All repayments of loans, debentures,
payments of interest, and other receipts arising out of
transactions entered into by the Administrator shall be
deposited in appropriate accounts as determined by the
Administrator.
(2) Budgets.--Business-type budgets for each of the accounts
referred to in paragraph (1) shall be--
(A) submitted to the Committee on Appropriations and
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Appropriations and
Committee on Small Business of the House of
Representatives; and
(B) enacted in the manner prescribed by sections 9103
and 9104 of title 31 for wholly owned Government
corporations.
(3) Reports.--As soon as possible after the beginning of each
calendar quarter, the Administrator shall submit to the
Committee on Appropriations and Committee on Small Business and
Entrepreneurship of the Senate and the Committee on
Appropriations and Committee on Small Business of the House of
Representatives a report that describes the status of each of
the accounts referred to in paragraph (1).
(4) Issuance of notes.--
(A) In general.--The Administrator may issue notes to
the Secretary of the Treasury for the purpose of
obtaining funds necessary for discharging obligations
under, and for authorized expenditures out of, the
accounts referred to in paragraph (1).
(B) Form.--Notes issued under subparagraph (A) shall
be in such form and denominations, have such
maturities, and be subject to such terms and conditions
as the Administrator may prescribe with the approval of
the Secretary of the Treasury.
(C) Interest.--Notes issued under subparagraph (A)
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 those of the notes issued under
subparagraph (A).
(D) Purchase by the secretary of the treasury.--The
Secretary of the Treasury shall purchase any SBA notes
issued under subparagraph (A), and for that purpose 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, and the
purposes for which such securities may be issued under
that chapter are extended to include the purchase of
notes issued under subparagraph (A).
(E) Treatment as public debt transactions.--All
redemptions, purchases, and sales by the Secretary of
the Treasury of notes issued under subparagraph (A)
shall be treated as public debt transactions of the
United States.
(F) Borrowing authority subject to availability of
appropriations.--All borrowing authority contained in
this paragraph shall be effective only to such extent
or in such amounts as are provided in advance in
appropriation Acts.
(5) Unneeded amounts.--Amounts in an account referred to in
paragraph (1) that are not needed for current operations may be
paid into miscellaneous receipts of the Treasury.
(6) Interest.--
(A) Actual interest collected.--Following the close
of each fiscal year, the Administrator shall pay into
the miscellaneous receipts of the United States
Treasury the actual interest that SBA collects during
that fiscal year on all financings made under subtitle
II.
(B) Interest received on financing functions.--
(i) In general.--Except on loan disbursements
on which interest is paid under subparagraph
(A), following the close of each fiscal year,
the Administrator shall pay into miscellaneous
receipts of the Treasury interest received by
SBA on financing functions performed under this
subtitle, subtitle II, and divisions B and D of
subtitle III if the capital used to perform
those functions originates from appropriated
funds.
(ii) Treatment.--Payments under clause (i)
shall be treated by the Department of the
Treasury as interest income, not as retirement
of indebtedness.
(7) Contributions to employees' compensation funds.--
(A) In general.--The Administrator shall contribute
to the employees' compensation fund, on the basis of
annual billings as determined by the Secretary of
Labor, for the benefit payments made from the fund on
account of employees engaged in carrying out functions
financed under the accounts described in paragraph (1).
(B) Statement of cost.--The annual billings shall
include a statement of the fair portion of the cost of
the administration of the employees' compensation fund,
which shall be paid by the Administrator into the
Treasury as miscellaneous receipts.
(b) Financial Management Powers.--
(1) Disposition of evidence of debt, contract, claim,
personal property, or security.--Under regulations prescribed
by the Administrator, the Administrator may--
(A) assign or sell at public or private sale, or
otherwise dispose of for cash or credit, in the
discretion of the Administrator and on such terms and
conditions and for such consideration as the
Administrator determines to be reasonable, any evidence
of debt, contract, claim, personal property, or
security assigned to or held by the Administrator in
connection with the payment of loans granted under
subtitle II or III; and
(B) collect or compromise all obligations assigned to
or held by the Administrator and all legal or equitable
rights accruing to the Administrator 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.
(2) SBA moneys.--
(A) Deposit in treasury.--All moneys of SBA not
otherwise employed may be deposited in the Treasury
subject to check by authority of the Administrator.
(B) Federal reserve banks.--
(i) In general.--The Federal Reserve banks
shall act as depositaries, custodians, and
fiscal agents for SBA in the general
performance of its powers under this subtitle
and subtitles II and III.
(ii) Reimbursement.--A Federal Reserve bank,
when designated by the Administrator as fiscal
agent for SBA, shall be entitled to be
reimbursed for all expenses incurred as fiscal
agent.
(C) Banks insured by fdic.--A bank insured by the
Federal Deposit Insurance Corporation, when designated
by the Secretary of the Treasury, shall act as
custodian and financial agent for SBA.
(3) Real property.--
(A) Conveyance.--The power to convey and to execute
in the name of the Administrator a deed of conveyance,
deed of release, assignment and satisfaction of
mortgages, or any other written instrument relating to
real property or any interest in real property acquired
by the Administrator under this subtitle or subtitle II
or III may be exercised--
(i) by the Administrator; or
(ii) by any officer or agent appointed by the
Administrator, with or without the execution of
an 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, on such terms and
conditions and for such consideration as the
Administrator determines to be reasonable, any real
property conveyed to or otherwise acquired by the
Administrator in connection with the payment of loans
granted under subtitle II or III.
(4) Collections.--
(A) In general.--The Administrator may pursue to
final collection, by way of compromise or otherwise,
all claims against 3d parties assigned to the
Administrator in connection with loans made by the
Administrator.
(B) Deficiency judgments.--The authority under
subparagraph (A) includes authority to obtain a
deficiency judgment or otherwise in the case of a
mortgage 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), when the Administrator considers it
necessary or appropriate to the conduct of the general business
loan program and disaster assistance programs.
(6) Asset sales.--In connection with the Administrator's
implementation of a program to sell to the private sector loans
and other assets held by the Administrator, the Administrator
shall provide to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a copy of the draft
and final plans describing the sale and the anticipated
benefits resulting from the sale.
(c) Sale of Guaranteed Portion of Loan by Lender or Subsequent
Holder.--
(1) In general.--The guaranteed portion of a loan made under
subtitle II or III may be sold by the lender, and by any
subsequent holder, consistent with regulations prescribed by
the Administrator, subject to the limitations stated in
paragraph (2).
(2) Limitations.--
(A) Approval.--Before the Administrator approves a
sale or resale under paragraph (1), if the lender
certifies that the loan has been properly closed and
that the lender has substantially complied with the
guarantee agreement and the regulations of the
Administrator, the Administrator shall review and
approve only materials not previously approved.
(B) Fees.--All fees due the Administrator on a
guaranteed loan shall be paid in full prior to a sale
or resale under paragraph (1).
(C) Disbursement.--A loan (except a loan made under
section 205108 of this title) shall be fully disbursed
to the borrower before a sale or resale under paragraph
(1).
(3) Continuing obligation.--After a loan is sold, 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 the
guarantee agreement.
(4) Secondary market.--
(A) Procedures.--The Administrator shall develop such
procedures as are necessary for--
(i) the facilitation, administration, and
promotion of secondary market operations; and
(ii) assessing the increase of small business
access to capital at reasonable rates and terms
as a result of secondary market operations.
(B) Uniform regulations.--The sale of the
unguaranteed portion of a loan made under the general
business loan program shall not be permitted except in
accordance with a regulation prescribed by the
Administrator that--
(i) applies uniformly to both depository
institutions and other lenders; and
(ii) specifies 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.
(C) Long-term viability.--The Administrator shall
take such actions in the awarding of contracts as the
Administrator considers necessary to ensure the
continued long-term viability of the secondary market
in loans, debentures, and other securities guaranteed
by the Administrator.
(5) Effect of subsections.--Nothing in this subsection or
subsection (d) impedes or extinguishes--
(A) the right of a borrower or a successor in
interest to a borrower to prepay (in whole or in part)
a loan made under the general business loan program,
the guaranteed portion of which may be included in a
trust or pool; or
(B) the rights of any person under subsection (i).
(d) Trust Certificates.--
(1) In general.--The Administrator may issue trust
certificates representing ownership of all or a fractional part
of the guaranteed portion of 1 or more loans guaranteed by the
Administrator under subtitle II or section 331103 of this
title.
(2) Trust or pool.--A trust certificate shall be based on and
backed by a trust or pool approved by the Administrator and
composed solely of the entire guaranteed portion of a loan.
(3) Guarantee.--
(A) In general.--The Administrator, on such terms and
conditions as the Administrator considers appropriate,
may guarantee the timely payment of the principal of
and interest on trust certificates issued by the
Administrator or an agent of the Administrator for
purposes of this subsection.
(B) Limit.--
(i) In general.--A guarantee under
subparagraph (A) shall be limited to the extent
of principal and interest on the guaranteed
portion of the loan or loans that compose the
trust or pool.
(ii) Prepayment.--If a loan in a 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
certificate shall be reduced in proportion to
the amount of principal and interest that the
prepaid loan represents in the trust or pool.
(iii) Interest.--Interest on prepaid or
defaulted loans shall accrue and be guaranteed
by the Administrator only through the date of
payment on the guarantee.
(iv) Call.--During the term of a trust
certificate, the trust certificate may be
called for redemption due to prepayment or
default of all loans constituting the trust or
pool.
(4) Full faith and credit of the united states.--The full
faith and credit of the United States is pledged to the payment
of all amounts that may be required to be paid under any
guarantee of a trust certificate issued by SBA or its agent
under this subsection.
(5) Fees.--
(A) In general.--The Administrator may impose a fee
for a 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; use.--A fee under subparagraph (A)--
(i) shall be collected by the Administrator
or by the agent that carries out on behalf of
the Administrator the central registration
functions required by subsection (e); and
(ii) shall be paid to the Administrator and
used solely to reduce the subsidy on loans
guaranteed under the general business loan
program.
(C) No charge to borrower.--A fee under subparagraph
(A) shall not be charged to the borrower under the loan
that is guaranteed.
(D) No preclusion.--Nothing in this paragraph
precludes an agent of the Administrator from collecting
a fee approved by the Administrator for the functions
described in subsection (e)(2)(A)(ii).
(E) Penalty.--The Administrator may impose and
collect, directly or through a fiscal and transfer
agent, a reasonable penalty on late payment of a fee
under subparagraph (A) in an amount not to exceed 5
percent of the fee per month plus interest.
(F) Agents.--
(i) In general.--The Administrator may
contract with an agent to carry out, on behalf
of SBA, the assessment and collection of the
annual fee established under section 203114 of
this title.
(ii) Compensation.--An agent may receive, as
compensation for services, any interest earned
on the fee while in the control of the agent
before the time at which the agent is
contractually required to remit the fee to the
Administrator.
(6) Subrogation.--If the Administrator pays a claim under a
guarantee issued under this subsection, the Administrator shall
be subrogated fully to the rights satisfied by the payment.
(7) Exercise of ownership rights.--No Federal, State, or
local law shall preclude or limit the exercise by SBA of its
ownership rights in the portions of loans constituting the
trust or pool against which a trust certificate is issued.
(8) Division of loan guarantee into increments.--
(A) In general.--If the amount of the guaranteed
portion of a loan under the general business loan
program is more than $500,000, the Administrator shall,
on request of a pool assembler, divide the loan
guarantee into increments of $500,000 and 1 increment
of any remaining amount less than $500,000, to permit
the maximum amount of any loan in a pool to be not more
than $500,000.
(B) Limitation.--Only 1 increment of any loan
guarantee divided under subparagraph (A) may be
included in the same pool.
(C) Increments to different borrowers.--Increments of
loan guarantees to different borrowers that are divided
under subparagraph (A) may be included in the same
pool.
(e) Central Registration of Loans and Trust Certificates.--
(1) Definition of seller.--In this subsection, the term
``seller'', with respect to a sale of a loan, does not
include--
(A) an entity that made the loan; or
(B) an individual or entity that sells 3 or fewer
guaranteed loans per year.
(2) In general.--Under regulations prescribed by the
Administrator--
(A) the Administrator shall--
(i) provide for a central registration of all
loans and trust certificates sold under
subsections (c) and (d);
(ii) contract with an agent to carry out on
behalf of the Administrator the central
registration functions of this section and the
issuance of trust certificates to facilitate
pooling; and
(iii) prior to any sale, require the seller
to disclose to a purchaser of the guaranteed
portion of a loan guaranteed under subtitle II
and to the purchaser of a trust certificate
issued under subsection (d) information on the
terms, conditions, and yield of the instrument
to be sold; and
(B) the Administrator may regulate brokers and
dealers in guaranteed loans and trust certificates sold
under subsections (c) and (d).
(3) Agent.--An agent described in paragraph (2)(A)(ii)--
(A) 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; and
(B) may be compensated through any of the fees
assessed under this section and any interest earned on
any funds collected by the agent while the funds are in
the control of the agent and before the time at which
the agent is contractually required to transfer the
funds to the Administrator or to the holders of the
trust certificates, as appropriate.
(4) Form of registration.--
(A) In general.--This subsection does not preclude
the use of a book-entry or other electronic form of
registration for trust certificates.
(B) Book-entry system.--SBA may, with the consent of
the Secretary of the Treasury, use the book-entry
system of the Federal Reserve System.
(f) Action Dealing With or Realizing on Loan.--
(1) In general.--In addition to exercising any power,
function, privilege, or immunity vested in the Administrator by
any other provision of law, the Administrator may take any and
all actions (including the procurement of the services of an
attorney by contract in any office in which an attorney is not
or cannot be economically employed full time to render such
services) if the Administrator determines that such action is
necessary or desirable in making, servicing, compromising,
modifying, liquidating, or otherwise dealing with or realizing
on a loan made under subtitle II or III.
(2) Deferred participation loan.--With respect to a deferred
participation loan, the Administrator may, in the discretion of
and pursuant to regulations promulgated by the Administrator,
authorize a participating lending institution to take action
relating to loan servicing on behalf of the Administrator,
including determining eligibility and creditworthiness and loan
monitoring, collection, and liquidation.
(3) Preferred lenders program.--
(A) In general.--Under this subsection, the
Administrator may carry out a preferred lenders program
under which a written agreement between a lender and
the Administrator delegates to the lender--
(i) complete authority to make and close
loans with a guarantee from the Administrator
without obtaining the prior specific approval
of the Administrator; and
(ii) complete authority to service and
liquidate the loans without obtaining the prior
specific approval of the Administrator for
routine servicing and liquidation activities,
subject to the limitation that the lender shall
not take any action creating an actual or
apparent conflict of interest.
(B) Export-import bank lenders.--A lender that is
participating in the delegated authority lender program
of the Export-Import Bank of the United States (or any
successor to the program) shall be eligible to
participate in the preferred lenders program.
(C) Standard review program.--The Administrator shall
carry out a standard review program under which, on
entry into the preferred lenders program and annually
or more frequently thereafter, each preferred lender's
participation in the preferred lenders program is
assessed, including an assessment of defaults, loans,
and recoveries of loans made by the preferred lender
under the general business loan program.
(g) Fees.--
(1) In general.--Except as provided in paragraph (2), the
Administrator may impose, retain, and use only--
(A) fees that are specifically authorized by law; and
(B) fees that were in effect on September 30, 1994,
in the amounts and at the rates in effect on that date.
(2) Additional fees.--The Administrator may, subject to
approval in appropriations Acts, impose, retain, and use, in
addition to fees described in paragraph (1)--
(A) a fee not exceeding $100 for a 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) a fee not exceeding $300 for a loan assumption;
(C) a fee not exceeding 1 percent of the amount of
requested financings under chapter 303 for which the
applicant requests a commitment from SBA for funding
during the following year; and
(D) fees to recover the direct, incremental cost
involved in the production and dissemination of
compilations of information produced by the
Administrator under this title.
(3) Limitation on use.--Amounts collected under this
subsection shall be used solely to facilitate the
administration of the program that generated the excess
amounts.
(h) Amounts Collected by Fiscal Transfer Agents.--
(1) In general.--The Administrator may collect, retain and
use, subject to approval in appropriations Acts, any amount
collected by a fiscal transfer agent that is not used by the
fiscal transfer agent as payment of the cost of loan pooling or
debenture servicing operations.
(2) Limitation on use.--Amounts collected under this
subsection shall be used solely to facilitate the
administration of the program that generated the excess
amounts.
(i) Undertaking or Suspension of Payment Obligation.--
(1) Definition of required payments.--In this subsection, the
term ``required payment'', with respect to a loan, means a
payment of principal and interest under the loan.
(2) In general.--Subject to the requirements and conditions
contained in this subsection, on application by a small
business concern that is the recipient of a loan made under
subtitle II or III, the Administrator may--
(A) undertake the small business concern's obligation
to make the required payments under the loan; or
(B) if the loan was a direct loan made by the
Administrator, suspend the obligation.
(3) No requirement for payment.--During any period in which
required payments are being made by the Administrator pursuant
to an undertaking of an obligation or in which an obligation is
suspended, no required payment with respect to the loan may be
required to be made by the small business concern.
(4) Conditions.--The Administrator may undertake or suspend
for a period of not to exceed 5 years a small business
concern's obligation under this subsection only if--
(A) without the undertaking or suspension of the
obligation, the small business concern would, as
determined in the sole discretion of the Administrator,
become insolvent or remain insolvent;
(B) with the undertaking or suspension of the
obligation, the small business concern would, as
determined in the sole discretion of the Administrator,
become or remain a viable business; and
(C) the small business concern executes an agreement
in writing satisfactory to the Administrator as
provided in paragraph (6).
(5) Extension of term.--Notwithstanding section 203109 of
this title, the Administrator may extend the term of a loan on
which the Administrator undertakes or suspends the obligation
under this subsection for a corresponding period of time.
(6) Agreement; required action.--
(A) Agreement.--Before undertaking or suspending a
small business concern's obligation under this
subsection, the Administrator, consistent with the
purposes of this subsection, shall require the small
business concern to agree in writing to repay to the
Administrator the aggregate amount of the required
payments during the period for which the obligation was
undertaken or suspended--
(i) by periodic payments not less in amount
or less frequently falling due than those that
were due under the loan during that period;
(ii) pursuant to a repayment schedule agreed
on by the Administrator and the small business
concern; or
(iii) by a combination of the payments
described in clauses (i) and (ii).
(B) Required action.--In addition to requiring the
small business concern to execute the agreement
described in subparagraph (A), the Administrator shall,
before undertaking or suspending the obligation, take
such action, and require the small business concern to
take such action, as the Administrator considers
appropriate in the circumstances (including the
provision of such security as the Administrator
considers necessary or appropriate to ensure that the
rights and interests of the lender will be safeguarded
adequately during and after the period in which the
obligation is undertaken or suspended).
(j) Interest Rate on Deferred Participation.--On purchase by the
Administrator of a deferred participation entered into under the
general business loan program, disaster loan program, private disaster
loan program, intermediary lending pilot program, or microloan program,
the Administrator may continue to charge a rate of interest not to
exceed that initially charged by the participating institution on the
amount purchased for the remaining term of the indebtedness.
(k) 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 the property for taxes due on the property
to a State or political subdivision of a State in any case in which the
lien would, under applicable State law, be superior to that interest if
the interest were held by any party other than the United States.
(l) Risk Management Database.--
(1) Establishment.--The Administrator shall establish, within
the management system for the general business loan program,
disaster assistance programs, and certified development company
program 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) Information to be maintained.--In addition to such other
information as the Administrator considers appropriate, the
database established under paragraph (1) 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 SBA district in which the borrower has its
principal office;
(F) the principal line of business of the borrower,
as identified by North American Industry Classification
System (or any successor to that 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, SBA district, and SBA 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.
Sec. 103203. Small business economic database
(a) In General.--The Administrator shall maintain an external small
business economic database for the purpose of providing Congress and
the Administrator information on the economic condition and the
expansion or contraction of the small business sector.
(b) Economic Indices.--In carrying out subsection (a), the
Administrator shall publish on a regular basis national small business
economic indices and, to the extent feasible, regional small business
economic indices that include data relating to--
(1) employment, layoffs, and new hires;
(2) number of business establishments and the types of such
establishments such as sole proprietorships, corporations, and
partnerships;
(3) number of business formations and failures;
(4) sales and new orders;
(5) back orders;
(6) investment in plant and equipment;
(7) changes in inventory and rate of inventory turnover;
(8) sources and amounts of capital investment, including
debt, equity, and internally generated funds;
(9) debt-to-equity ratios;
(10) exports;
(11) number and dollar amount of mergers and acquisitions by
size of acquiring and acquired firm; and
(12) concentration ratios.
Sec. 103204. Small business computer security and education program
(a) In General.--The Administrator shall establish a small business
computer security and education program to--
(1) provide small business concerns information regarding--
(A) utilization and management of computer
technology;
(B) computer crimes committed against small business
concerns; and
(C) security for computers owned or utilized by small
business concerns;
(2) provide for periodic forums for small business concerns
to improve their knowledge of the matters described in
paragraph (1); and
(3) provide training opportunities to educate small business
users on computer security techniques.
(b) Information and Materials.--The Administrator, after consultation
with the Director of the National Institute of Standards and Technology
of the Department of Commerce, shall develop information and materials
to carry out the activities described in subsection (a).
Sec. 103205. General policies governing the granting and denial of
applications
The Administrator shall establish general policies (particularly with
reference to the public interest in the granting and denial of
applications for financial assistance by the Administrator and with
reference to the coordination of the functions of the Administrator
with other activities and policies of the Government), which shall
govern the granting and denial of applications for financial assistance
by the Administrator.
Sec. 103206. Retention of records
The Administrator and the Inspector General of SBA shall--
(1) retain all correspondence, records of inquiries,
memoranda, reports, books, and other records, including
memoranda as to all investigations conducted by or for SBA, for
a period of at least 1 year after the date of the record; and
(2) at all times keep the records available for inspection
and examination by the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives or the authorized
representatives of either Committee.
Sec. 103207. Consultation and cooperation with other Federal agencies
(a) In General.--To the extent that the Administrator considers it
necessary to protect and preserve small business interests, the
Administrator shall consult and cooperate with other Federal agencies
in the formulation by the Administrator of policies affecting small
business concerns.
(b) Response.--When requested by the Administrator, a Federal agency
shall consult and cooperate with the Administrator in the formulation
by the Federal agency of policies affecting small business concerns to
ensure that small business interests will be recognized, protected, and
preserved.
(c) Effect of Section.--This section does not require a Federal
agency to consult or cooperate with the Administrator in a case in
which the head of the Federal agency determines that such consultation
or cooperation would unduly delay action that must be taken by the
Federal agency to protect the national interest in an emergency.
Sec. 103208. Representation of status as small business concern
(a) In General.--Any representation of the status of any concern or
person as a small business concern, HUBZone small business concern,
small business concern owned and controlled by socially and
economically disadvantaged individuals, or small business concern owned
and controlled by women in order to obtain any prime contract or
subcontract described in subsection (b) shall be of no effect unless
the representation is in writing.
(b) Prime Contracts and Subcontracts.--A prime contract or
subcontract referred to in subsection (a) is--
(1) a prime contract to be awarded under chapter 251, 253,
261, or 263;
(2) a subcontract to be awarded under chapter 233;
(3) a subcontract that is to be included as part or all of a
goal contained in a subcontracting plan required under section
243103 of this title; or
(4) a prime contract or subcontract to be awarded as a
result, or in furtherance, of any other provision of Federal
law that specifically references chapter 243 for a definition
of program eligibility.
Sec. 103209. Criminal background checks
Before approval of a loan under the general business loan program or
a debenture guarantee under the certified development company program,
the Administrator may verify the applicant's criminal background (or
lack of criminal background) through the best available means,
including, if possible, use of the National Crime Information Center
computer system at the Federal Bureau of Investigation.
Chapter 105--Penalties
Sec.
105101. Criminal penalties.
105102. Misrepresentation of status as small business concern.
105103. False certification of past compliance.
105104. Subcontracting requirements and limitations.
Sec. 105101. Criminal penalties
Criminal penalties for offenses relating to this title are provided
under chapter 124 of title 18.
Sec. 105102. Misrepresentation of status as small business concern
(a) Offense.--A person that, in writing, misrepresents the status of
a concern or person as a small business concern, qualified HUBZone
small business concern, small business concern owned and controlled by
socially and economically disadvantaged individuals, or small business
concern owned and controlled by women, in order to obtain for that
person or any other person--
(1) a prime contract to be awarded under chapter 251, 253,
261, or 263;
(2) a subcontract to be awarded under chapter 233;
(3) a subcontract that is to be included as part or all of a
goal contained in a subcontracting plan required under section
243103 of this title; or
(4) a prime contract or subcontract to be awarded as a
result, or in furtherance, of any other provision of Federal
law that specifically references chapter 243 for a definition
of program eligibility;
shall be subject to the penalties described in subsection (b).
(b) Penalties.--A person that violates subsection (a)--
(1) shall be subject to the administrative remedies
prescribed by chapter 38 of title 31;
(2) shall be subject to suspension and debarment as specified
in subpart 9.4 of title 48, Code of Federal Regulations (or any
successor regulation); and
(3) shall be ineligible for participation in any program or
activity conducted under this subtitle or subtitle II or III
for a period not to exceed 3 years.
(c) Suspension or Debarment.--
(1) Guidance.--The Administrator shall issue guidance
regarding the basis on which a person that violates subsection
(a) may be suspended or debarred under subsection (b)(3) or
under section 105105(3) or 105106(3) of this title.
(2) Website.--The Administrator shall maintain on the SBA
website--
(A) the current standard operating procedures of SBA
for suspension and debarment; and
(B) the name of and contact information for the
individual designated by the Administrator as the
senior officer responsible for suspension and debarment
proceedings.
(d) Limitation on Liability.--
(1) In general.--This section does not apply to any conduct
in violation of subsection (a) if the violator acts in good
faith reliance on a written advisory opinion issued by a Small
Business Development Center or an entity participating in a
procurement technical assistance cooperative agreement program
under chapter 142 of title 10.
(2) No obligation to issue advisory opinion.--Nothing in this
subtitle or subtitle II obligates a Small Business Development
Center or an entity participating in a procurement technical
assistance cooperative agreement program to issue an advisory
opinion, nor shall the issuance of an advisory opinion by such
an entity render the entity liable to the business concern to
which the advisory letter is issued if the Administrator later
determines that the business concern is not a small business
concern.
(3) Rejection of advisory opinion by sba general counsel.--
(A) Remission to SBA General Counsel.--On issuance of
an advisory opinion under this subsection, the entity
that issues the advisory opinion shall remit a copy of
the opinion to the General Counsel of SBA, who may
reject the advisory opinion.
(B) Notification of rejection.--If the SBA General
Counsel rejects the advisory opinion, the Administrator
shall notify the entity that issued the advisory
opinion and the recipient of the advisory opinion.
(C) No reliance.--After the recipient of an advisory
opinion receives a notification of rejection of the
advisory opinion by the SBA General Counsel, the
recipient shall not be entitled to rely on the advisory
opinion.
(4) Rules.--The Administrator shall issue rules defining what
constitutes an adequate advisory opinion for purposes of this
subsection.
Sec. 105103. False certification of past compliance
A person that falsely certifies past compliance with the requirements
of section 233128 of this title--
(1) shall be subject to the administrative remedies
prescribed by chapter 38 of title 31;
(2) shall be subject to suspension and debarment as specified
in subpart 9.4 of title 48, Code of Federal Regulations (or any
successor regulation) on the basis that the misrepresentation
indicates a lack of business integrity that seriously and
directly affects the present responsibility to perform any
contract awarded by the Federal Government or a subcontract
under such a contract; and
(3) shall be ineligible for participation in any program or
activity conducted under this subtitle or subtitle II or III
for a period not to exceed 3 years.
Sec. 105104. Subcontracting requirements and limitations
(a) Subcontracting Requirement.--A person that fails to supply the
product of a domestic manufacturer or processor that is a small
business concern as required under section 299107(b)(4) of this title--
(1) shall be subject to the administrative remedies
prescribed by chapter 38 of title 31;
(2) shall be subject to suspension and debarment as specified
in subpart 9.4 of title 48, Code of Federal Regulations (or any
successor regulation) on the basis that the misrepresentation
indicates a lack of business integrity that seriously and
directly affects the present responsibility to perform any
contract awarded by the Federal Government or a subcontract
under such a contract; and
(3) shall be ineligible for participation in any program or
activity conducted under this subtitle or subtitle II or III
for a period not more than 3 years.
(b) Subcontracting Limitation.--A person that expends on
subcontractors an amount in excess of the amount permitted under
paragraph (1), (2), or (3) of subsection (b) of section 299107 of this
title or in excess of an amount established by the Administrator under
subsection (e) of that section shall be subject to the penalties
prescribed by subsection (a) of this section.
Chapter 107--Periodic Reports
Sec.
107101. Comprehensive annual report on the state of small business and
on SBA operations.
107102. Annual report on expenditures.
107103. Annual report on secondary market operations.
107104. Annual report on impact of authority to impose secondary market
fees.
107105. Annual report on needs of small business concerns owned and
controlled by veterans and small business concerns owned and
controlled by service-disabled veterans.
107106. Annual report on contract bundling.
107107. Annual report on business development program.
107108. Annual report on contract participation goals.
107109. Annual report on cost savings from procurement center
representatives.
107110. Reports on SBIR programs, STTR programs, and the FAST program.
107111. Annual report on women's business center program.
107112. Annual report of the Associate Administrator for International
Trade.
107113. Biennial report on filling gaps in high-and-low-export volume
areas.
107114. Annual report on historical trends of the small business
sector.
107115. Biennial report on accredited lenders program.
107116. Annual report on premier certified lenders program.
107117. Annual report on foreclosure and liquidation of loans under the
certified development company program.
107118. Reports on disaster assistance.
107119. Annual report on subcontracting goals.
107120. Annual report on suspensions and debarments.
107121. Annual report on training and travel by Directors of Small and
Disadvantaged Business Utilization.
107122. Triennial report regarding procurement center representatives
and commercial market representatives.
107123. Quinquennial report on representation of women.
107124. Annual report on mentor-protege programs.
107125. Annual report on State trade expansion program.
Sec. 107101. Comprehensive annual report on the state of small business
and on SBA operations
(a) In General.--As soon as practicable each fiscal year, the
Administrator shall submit to the President a comprehensive annual
report.
(b) Contents.--A report under subsection (a) shall include--
(1) a description of the state of small business in the
Nation as a whole and in each State;
(2) a description of SBA's operations under this subtitle and
subtitle II, including the general lending, disaster relief,
Government regulation relief, procurement and property
disposal, research and development, technical assistance,
dissemination of data and information, and other functions
under the jurisdiction of SBA during the previous fiscal year;
(3) recommendations--
(A) for strengthening or improving the functions
described in paragraph (2); or
(B) when necessary or desirable to implement more
effectively congressional policies and proposals, for
establishing new or alternative programs;
(4) the names of the business concerns to which contracts are
let and for which financing is arranged by the Administrator,
including the amounts of the contracts and financings;
(5) the proportion of loans and other assistance under
subtitle II and provided to minority small business concerns,
the goals of the Administrator for the next fiscal year with
respect to minority small business concerns, and
recommendations for improving assistance to minority small
business concerns under subtitle II; and
(6)(A) a full and detailed account of operations under
subtitle III that--
(i) discloses the amount of losses sustained by the
Government as a result of such operations during the
preceding fiscal year; and
(ii) includes an estimate of the total losses that
the Government can reasonably expect to incur as a
result of such operations during the then-current
fiscal year;
(B) full and detailed accounts relating to--
(i) the Administrator's recommendations with respect
to the feasibility and organization of a small business
capital bank to encourage private financing of small
business investment companies (as defined in section
301101 of this title) to replace Government financing
of small business investment companies;
(ii) the Administrator's plans to ensure the
provision of small business investment company
financing to all areas of the country and to all
eligible small business concerns, including steps taken
to accomplish that;
(iii) steps taken by the Administrator to maximize
recoupment of Government funds incident to the
inauguration and administration of the small business
investment company program and to ensure compliance
with statutory and regulatory standards relating to the
small business investment company program;
(iv) an accounting by the Director of the Office of
Management and Budget with respect to Federal
expenditures to business by executive agencies,
specifying the proportion of those expenditures going
to business concerns falling above and below small
business size standards applicable to small business
investment companies;
(v) an accounting by the Secretary of the Treasury
with respect to tax revenues accruing to the Government
from business concerns, specifying the source of those
revenues by concerns falling above and below the small
business size standards applicable to small business
investment companies;
(vi) an accounting by the Secretary of the Treasury
with respect to tax losses and increased tax revenues
related to small business investment company financing
of both individual and corporate business taxpayers;
(vii) recommendations of the Secretary of the
Treasury with respect to additional tax incentives to
improve and facilitate the operations of small business
investment companies and to encourage the use of their
financing facilities by eligible small business
concerns;
(viii) a report from the Securities and Exchange
Commission enumerating actions undertaken by the
Securities and Exchange Commission to simplify and
minimize the regulatory requirements governing small
business investment companies under the Federal
securities laws and to eliminate overlapping regulation
and jurisdiction as between the Securities and Exchange
Commission, SBA, and other agencies of the executive
branch;
(ix) a report from the Securities and Exchange
Commission with respect to actions taken to facilitate
and stabilize the access of small business concerns (as
defined in section 301101 of this title) to the
securities markets; and
(x) actions undertaken by the Securities and Exchange
Commission to simplify compliance by small business
investment companies with the requirements of
Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.) and to facilitate the election to be taxed as
regulated investment companies under section 851 of the
Internal Revenue Code of 1986 (26 U.S.C. 851); and
(C) a full and detailed description or account relating to--
(i) the number of small business investment companies
the Administrator licensed under subtitle III, the
number of licensees (as defined in section 301101 of
this title) that have been placed in liquidation, and
the number of licensees that have surrendered their
licenses in the previous year, identifying the amount
of leverage (as defined in section 301101 of this
title) each has received and the type of leverage
instruments each has used;
(ii) the amount of leverage that each licensee
received in the previous year and the types of leverage
instruments each licensee used;
(iii) for each type of financing instrument, the
sizes, geographic locations, and other characteristics
of the small business investment companies using the
financing instrument, including the extent to which
small business investment companies have used the
leverage from each instrument to make small business
loans, equity investments, or both; and
(iv) the frequency with which each type of investment
instrument has been used in the current year and a
comparison of the current year with previous years.
Sec. 107102. Annual report on expenditures
(a) In General.--As soon as practicable each fiscal year, the
Administrator shall submit to the President a report showing as
accurately as possible for the fiscal year the amount of funds
appropriated to SBA that the Administrator has expended in the conduct
of each of the principal activities of SBA such as lending, procurement
contracting, and providing technical and managerial aids.
(b) Contents.--A report under subsection (a) shall disclose,
separately for each type of loan made under sections 205103 to 205109
of this title and separately for all other loan programs, the number
and amount of loans, the number of applications, the total amount
applied for, and the number and amount of defaults for each type of
equipment or service for which loans are authorized by subtitle II.
Sec. 107103. Annual report on secondary market operations
(a) In General.--Not later than March 31 of each year, the
Administrator shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small Business of
the House of Representatives a report on the secondary market
operations during the preceding calendar year.
(b) Contents.--A report under subsection (a) shall include--
(1) the number and the total dollar amount of loans sold into
the secondary market and the distribution of such loans by size
of loan, size of lender, geographic location of lender,
interest rate, maturity, lender servicing fees, whether the
rate is fixed or variable, and premium paid;
(2) the number and dollar amount of loans resold in the
secondary market with a distribution by size of loan, interest
rate, and premiums;
(3) the number and total dollar amount of pools formed;
(4) the number and total dollar amount of loans in each pool;
(5) the dollar amount, interest rate, and terms on each loan
in each pool and whether the rate is fixed or variable;
(6) the number, face value, interest rate, and terms of the
trust certificates issued for each pool;
(7) to the maximum extent possible, the use by the lender of
the proceeds of sales of loans in the secondary market for
additional lending to small business concerns; and
(8) an analysis of the information reported under paragraphs
(1) to (7) to assess the access of small business concerns to
capital at reasonable rates and terms as a result of secondary
market operations.
Sec. 107104. Annual report on impact of authority to impose secondary
market fees
(a) Definition of Small Business Concern Owned and Controlled by
Minorities.--In this section, the term ``small business concerns owned
and controlled by minorities'' includes a small business concern that
is owned and controlled by individuals belonging to 1 of the designated
groups listed in subclause (1)(C) of the contract clause described in
section 243101(c) of this title.
(b) Study, Monitoring, and Evaluation.--The Administrator shall
study, monitor, and evaluate the impact of subparagraphs (A) to (E) of
section 103202(d)(5) of this title on--
(1) the ability of small business concerns owned and
controlled by minorities, small business concerns owned and
controlled by women, and other small business concerns to
obtain financing; and
(2) the effectiveness, viability, and growth of the secondary
market authorized by section 103202(c) of this title.
(c) Annual Reports.--
(1) In general.--The Administrator shall annually submit to
the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report containing the Administrator's
findings and recommendations on the impact described in
subsection (b), specifically including changes in the interest
rates on financings provided to small business concerns owned
and controlled by minorities, small business concerns owned and
controlled by women, and other small business concerns through
the use of the secondary market.
(2) Findings and recommendations.--The report under paragraph
(1) shall state findings and recommendations separately for the
ethnic and gender components of the small business concerns
described in paragraph (1).
Sec. 107105. Annual report on needs of small business concerns owned
and controlled by veterans and small business
concerns owned and controlled by service-disabled
veterans
(a) In General.--The Administrator shall annually submit to the
Committee on Small Business and Entrepreneurship and Committee on
Veterans Affairs of the Senate and the Committee on Small Business and
Committee on Veterans Affairs of the House of Representatives a report
on the needs of small business concerns owned and controlled by
veterans and small business concerns owned and controlled by service-
disabled veterans.
(b) Contents.--A report under subsection (a) shall include
information on--
(1)(A) the availability of SBA programs for small business
concerns owned and controlled by veterans and small business
concerns owned and controlled by service-disabled veterans; and
(B) the degree of utilization of those programs by small
business concerns owned and controlled by veterans and small
business concerns owned and controlled by service-disabled
veterans during the preceding 12-month period, including
statistical information on such utilization as compared with
the small business community as a whole;
(2) the percentage and dollar value of Federal contracts
awarded to small business concerns owned and controlled by
veterans and small business concerns owned and controlled by
service-disabled veterans during the preceding 12-month period,
based on the data collected under section 275113 of this title;
and
(3) proposals to improve the access of small business
concerns owned and controlled by veterans and small business
concerns owned and controlled by service-disabled veterans to
the assistance made available by the United States.
Sec. 107106. Annual report on contract bundling
(a) In General.--In March of each year, using information maintained
under section 251105(e) of this title, the Administrator shall submit
to the Committee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of Representatives a
report on contract bundling.
(b) Contents.--A report under subsection (a) shall include--
(1) information on the number (arranged by industrial
classification) of small business concerns displaced as prime
contractors as a result of the award of bundled contracts by
Federal agencies; and
(2) a description of the activities with respect to
previously bundled contracts of each Federal agency during the
preceding year, including--
(A) information on the number and total dollar amount
of all contract requirements that were bundled; and
(B) with respect to each bundled contract,
information on--
(i) the justification for the bundling of
contract requirements;
(ii) the cost savings realized by bundling
the contract requirements over the life of the
contract;
(iii) the extent to which maintaining the
bundled status of contract requirements is
projected to result in continued cost savings;
(iv) the extent to which the bundling of
contract requirements complied with the
procuring agency's small business
subcontracting plan, including the total dollar
value awarded to small business concerns as
subcontractors and the total dollar value
previously awarded to small business concerns
as prime contractors; and
(v) the impact of the bundling of contract
requirements on small business concerns unable
to compete as prime contractors for the
consolidated requirements and on the industries
of such small business concerns, including a
description of any changes to the proportion of
any such industry that is composed of small
business concerns.
Sec. 107107. Annual report on business development program
(a) In General.--Not later than April 30 of each year, the
Administrator shall submit to Congress a report on the business
development program.
(b) Contents.--
(1) Net worth of participating individuals.--A report under
subsection (a) shall disclose--
(A) the average personal net worth of individuals who
own and control small business concerns that were
initially certified for participation in the business
development program during the immediately preceding
fiscal year; and
(B) the dollar distribution of net worths, at $50,000
increments, of all such individuals determined to be
socially and economically disadvantaged.
(2) Description and estimate of benefits and costs.--A report
under subsection (a) shall include 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 the program participants that were performing
contracts awarded under the business development program.
(3) Program participants exiting the program.--
(A) In general.--A report under subsection (a) shall
include a compilation and evaluation of the former
program participants that exited the program during the
immediately preceding 3 fiscal years.
(B) Contents.--The compilation and evaluation under
subparagraph (A) shall--
(i)(I) disclose the number of former program
participants that are actively engaged in
business operations; and
(II) for those former program participants,
separately detail the benefits and costs that
have accrued to the economy during the
immediately preceding fiscal year due to the
operations of the former program participants;
(ii)(I) disclose the number of former program
participants that have ceased or substantially
curtailed business operations; and
(II) describe the reasons for the cessation
or curtailment; and
(iii) disclose the number of former program
participants that have been acquired by other
business concerns or organizations owned and
controlled by other than socially and
economically disadvantaged individuals.
(4) List of program participants.--A report under subsection
(a) shall include a list of all program participants that
participated in the program during the preceding fiscal year
that discloses, by State and by SBA region, for each program
participant--
(A) the name of the program participant;
(B) the race or ethnicity and gender of the
disadvantaged owners;
(C) the dollar value of all contracts received in the
preceding year;
(D) the dollar amount of advance payments received
under contracts awarded under the business development
program; and
(E) a description (including (if appropriate) an
estimate of the dollar value) of all benefits received
under sections 205111 and 233127 of this title during
the preceding year.
(5) Contract and option value.--A report under subsection (a)
shall include the total dollar value of contracts and options
awarded under this chapter during the preceding fiscal year--
(A) expressed as an absolute amount;
(B) expressed as a percentage of total sales--
(i) of all program participants during that
year; and
(ii) of program participants in each of the 9
years of program participation; and
(C) expressed, at such dollar increments as the
Administrator considers appropriate, for each 6-digit
North American Industry Classification System code
under which the contracts and options were classified.
(6) Additional resources or authorities.--A report under
subsection (a) shall include 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 program participants.
Sec. 107108. Annual report on contract participation goals
(a) Reporting by Federal Agencies.--At the end of each fiscal year,
the head of a Federal agency shall submit to the Administrator a report
that--
(1) describes the extent of participation in procurement
contracts of the Federal agency during the fiscal year by--
(A) small business concerns (excluding categories of
small business concern listed in subparagraphs (B)
through (E));
(B) small business concerns owned and controlled by
veterans (including small business concerns owned and
controlled by service-disabled veterans);
(C) qualified HUBZone small business concerns;
(D) small business concerns owned and controlled by
socially and economically disadvantaged individuals;
and
(E) small business concerns owned and controlled by
women;
(2) states whether the Federal agency achieved the goals
established for the Federal agency under subsection (b) of
section 251106 of this title for the fiscal year;
(3) describes any justifications for failure to meet the
goals; and
(4) includes a remediation plan with proposed new practices
to better meet the goals, including an analysis of the factors
that led to any failure to achieve the goals.
(b) Report by the Administrator.--Not later than 60 days after all
Federal agencies have submitted their reports under subsection (a) with
respect to a fiscal year, the Administrator shall submit to the
President and Congress and make available on a public website a report
that--
(1) includes a copy of each report submitted to the
Administrator under subsection (a);
(2) makes a determination whether each goal established by
the President under section 251106(a) of this title for the
fiscal year was achieved;
(3) makes a determination whether each goal established by
the head of a Federal agency under section 251106(b) of this
title for the fiscal year was achieved;
(4)(A) states the reasons for any failure to achieve a goal
established under subsection (a) or (b) of section 251106 of
this title for the fiscal year; and
(B) describes actions planned by the Federal agency in
question to address the failure under subsection (b) of section
251106 of this title, including the Administrator's comments
and recommendations on the proposed remediation plan;
(5) for the Federal Government and each Federal agency,
includes an analysis of the number and dollar amount of prime
contracts awarded during the fiscal year to--
(A) small business concerns (excluding categories of
small business concern listed in subparagraphs (B)
through (E))--
(i) in the aggregate;
(ii) through sole source contracts;
(iii) through competitions restricted to
small business concerns; and
(iv) through unrestricted competition;
(B) small business concerns owned and controlled by
service-disabled veterans--
(i) in the aggregate;
(ii) through sole source contracts;
(iii) through competitions restricted to
small business concerns;
(iv) through competitions restricted to small
business concerns owned and controlled by
service-disabled veterans; and
(v) through unrestricted competition;
(C) qualified HUBZone small business concerns--
(i) in the aggregate;
(ii) through sole source contracts;
(iii) through competitions restricted to
small business concerns;
(iv) through competitions restricted to
qualified HUBZone small business concerns;
(v) through unrestricted competition in which
a price evaluation preference was used; and
(vi) through unrestricted competition in
which a price evaluation preference was not
used;
(D)(i) small business concerns owned and controlled
by socially and economically disadvantaged
individuals--
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to
small business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by
socially and economically disadvantaged
individuals;
(V) through unrestricted competition; and
(VI) by reason of that concern's
certification as a small business owned and
controlled by socially and economically
disadvantaged individuals;
(ii) small business concerns owned by an Indian tribe
(as defined in section 231101 of this title) other than
an Alaska Native Corporation--
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to
small business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by
socially and economically disadvantaged
individuals; and
(V) through unrestricted competition;
(iii) small business concerns owned by a Native
Hawaiian Organization--
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to
small business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by
socially and economically disadvantaged
individuals; and
(V) through unrestricted competition;
(iv) small business concerns owned by an Alaska
Native Corporation--
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to
small business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by
socially and economically disadvantaged
individuals; and
(V) through unrestricted competition; and
(E) small business concerns owned and controlled by
women--
(i) in the aggregate;
(ii) through competitions restricted to small
business concerns;
(iii) through competitions restricted using
the authority under section 257102 of this
title;
(iv) through competitions restricted using
the authority under subsection (a) of section
257102 of this title and in which the waiver
authority under subsection (b) of that section
was used;
(v) through sole source contracts awarded
using the authority under section 257106 of
this title;
(vi) through sole source contracts awarded
using the authority under section 257107 of
this title;
(vii) by industry for contracts described in
clause (iii), (iv), (v), or (vi); and
(viii) through unrestricted competition; and
(6) for the Federal Government, to the extent that the
information is publicly available through data systems
developed under the Federal Funding Accountability and
Transparency Act of 2006 (Public Law 109-282, 31 U.S.C. 6101
note) or is otherwise available under subsection (c), the
number, dollar amount, and distribution with respect to the
North American Industry Classification System of subcontracts
awarded during the fiscal year to--
(A) small business concerns (excluding categories of
small business concern listed in subparagraphs (B)
through (E));
(B) small business concerns owned and controlled by
service-disabled veterans (including small business
concerns owned and controlled by service-disabled
veterans);
(C) qualified HUBZone small business concerns;
(D) small business concerns owned and controlled by
socially and economically disadvantaged individuals;
and
(E) small business concerns owned and controlled by
women.
(c) Procurement Data.--
(1) Federal procurement data system.--
(A) In general.--To assist in the implementation of
this section, sections 107106, 107121, and 107122 of
this title, and chapter 251 of this title, the
Administrator shall have access to information
collected through the Federal Procurement Data System,
Federal Subcontracting Reporting System, or any new or
successor system.
(B) GSA report.--On the date that the Administrator
makes available the report required under subsection
(b), the Administrator of the General Services
Administration shall submit to the President and
Congress, and shall make available on a public website,
a report in the same form and manner, and including the
same information, as the report required under
subsection (b). The report shall include all
procurements made for the period covered by the report
and may not exclude any contract awarded.
(2) Agency procurement data sources.--To assist in the
implementation of this section, sections 107106, 107121, and
107122 of this title, and chapter 251 of this title, the head
of each contracting agency shall provide, upon request of the
Administrator, procurement information collected through agency
data collection sources in existence at the time of the
request. Contracting agencies shall not be required to
establish new data collection systems to provide such data.
Sec. 107109. Annual report on cost savings from procurement center
representatives
The Administrator shall annually submit to Congress a report that--
(1) describes the cost savings achieved during the year
covered by the report through the efforts of procurement center
representatives assigned to major procurement centers under
section 251110 of this title;
(2) contains an evaluation of the extent to which competition
has been increased as a result of those efforts; and
(3) includes such other information relating to procurement
center representatives as the Administrator considers
appropriate.
Sec. 107110. Reports on SBIR programs, STTR programs, and the FAST
program
(a) SBIR Programs and STTR Programs.--
(1) Administrator.--
(A) In general.--The Administrator, not less than
annually, shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Science and Committee on Small Business of
the House of Representatives a report on the SBIR
programs and STTR programs of the Federal agencies and
the Administrator's information and monitoring efforts
relating to the SBIR programs and STTR programs.
(B) Contents.--A report under subparagraph (A) shall
include--
(i) the data on output and outcomes collected
under sections 263102(a)(8) and 263202(9) of
this title;
(ii) the number of proposals received from,
and the number and total amount of awards to,
HUBZone small business concerns and firms with
venture capital, hedge fund, or private equity
firm investment (including those that are
majority-owned by multiple venture capital
operating companies, hedge funds, or private
equity firms) under each of the SBIR programs
and STTR programs;
(iii) a description of the extent to which
each Federal agency is increasing outreach and
awards to firms owned and controlled by women
or by socially or economically disadvantaged
individuals under each of the SBIR programs and
STTR programs;
(iv) general information about the
implementation of, and compliance with the
allocation of funds required under, section
263109 of this title for firms owned that are
majority-owned by venture capital operating
companies, hedge funds, or private equity firms
and participating in the SBIR program;
(v) a detailed description of appeals of
phase III awards and notices of noncompliance
with the SBIR policy directive and the STTR
policy directive filed by the Administrator
with Federal agencies;
(vi) an accounting of funds, initiatives, and
outcomes under the commercialization readiness
program under section 263314(a) of this title;
(vii) a description of the extent to which
Federal agencies are providing in a timely
manner information needed to maintain the
database under section 263301 of this title;
(viii) for each phase III award--
(I) the name of the agency or
component of the agency or the non-
Federal source of capital that made the
phase III award;
(II) the name of the small business
concern or individual that received the
phase III award; and
(III) the dollar amount of the phase
III award;
(ix) the manufacturing activity information
contained in reports under paragraph (3);
(x) any data submitted under section
263109(d) of this title and a discussion of the
compliance of each Federal agency that makes an
award under this section 263109 of this title
during the fiscal year with the maximum
percentages under 263109(a) of this title;
(xi) the information on award amounts
exceeding guidelines described in section
263308(b) of this title;
(xii) the information on technology
transition submitted under section
263314(a)(6)(C) of this title; and
(xiii) the information on timing of final
decisions on proposals and releases of funding
described in section 263316 of this title.
(2) SBIR agency heads and sttr agency heads.--
(A) Metrics.--The head of an SBIR agency or STTR
agency shall develop metrics to evaluate the
effectiveness and the benefit to the people of the
United States of the SBIR program and the STTR program
of the Federal agency that--
(i) are science-based and statistically
driven;
(ii) reflect the mission of the Federal
agency; and
(iii) include factors relating to the
economic impact of the SBIR program or STTR
program.
(B) Evaluation.--The head of an SBIR agency or STTR
agency shall conduct an annual evaluation using the
metrics developed under subparagraph (A) of--
(i) the SBIR program and STTR program of the
SBIR agency or STTR agency; and
(ii) the benefits to the people of the United
States of the SBIR program and the STTR program
of the Federal agency.
(C) Report.--
(i) In general.--The head of an SBIR agency
or STTR agency shall submit to the Committee on
Small Business and Entrepreneurship of the
Senate and the Committee on Small Business and
Committee on Science, Space, and Technology of
the House of Representatives and to the
Administrator an annual report describing in
detail the results of an evaluation conducted
under subparagraph (B).
(ii) Public availability of report.--The head
of an SBIR agency or STTR agency shall make a
report submitted under clause (i) available to
the public online.
(3) Heads of agencies that make more than $50,000,000 in
awards.--Not later than October 1 of each year, the head of a
Federal agency that makes more than $50,000,000 in awards under
the SBIR program and STTR program of the agency combined shall
submit to the Administrator, for inclusion in the annual report
under paragraph (1), information that includes--
(A) a description of efforts undertaken by the agency
head to enhance United States manufacturing activities;
(B) a comprehensive description of the actions
undertaken each year by the agency head in carrying out
the SBIR program or STTR program of the agency in
support of Executive Order 13329 (69 Fed. Reg. 9181);
(C) an assessment of the effectiveness of the actions
described in subparagraph (B) at enhancing the research
and development of United States manufacturing
technologies and processes;
(D) a description of efforts by vendors selected to
provide discretionary technical assistance under
section 263313 of this title to help small business
concerns that participate in the SBIR program or STTR
program manufacture in the United States; and
(E) recommendations that the program managers of the
SBIR program or STTR program consider appropriate for
additional actions to increase the effectiveness of
enhancing manufacturing activities.
(4) Inspectors general.--Not later than October 1 of each
year, the Inspector General of an SBIR participating agency or
STTR participating agency shall submit to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business and the Committee on Science,
Space, and Technology of the House of Representatives a report
that--
(A) states the number of cases referred to the
Inspector General in the preceding year that related to
fraud, waste, or abuse with respect to the SBIR program
or STTR program;
(B) describes the actions taken in each case referred
to in subparagraph (A) if fraud, waste, or abuse was
determined to have occurred;
(C) if no action was taken in a case referred to
subparagraph (A) and fraud, waste, or abuse was
determined to have occurred, states the justification
for not taking taken; and
(D) makes an accounting of the funds used to address
fraud, waste, and abuse, including a description of
personnel and resources funded and funds that were
recovered or saved.
(5) Comptroller General.--
(A) Impact of requirements relating to venture
capital operating company, hedge fund, and private
equity firm involvement.--Not later than December 31,
2014, and every 3 years thereafter, the Comptroller
General shall--
(i) conduct a study of the impact of
requirements relating to venture capital
operating company, hedge fund, and private
equity firm involvement under this division;
and
(ii) submit to Congress a report regarding
the study conducted under clause (i).
(B) Fraud, waste, and abuse.--To establish a baseline
of changes made to the program to fight fraud, waste,
and abuse, and, every 4 years, to evaluate the
effectiveness of the agency strategies, the Comptroller
General shall--
(i) conduct a study that evaluates--
(I) the implementation by each SBIR
participating agency and STTR
participating agency of the amendments
to the SBIR policy directives and the
STTR policy directive made pursuant to
section 263318 of this title;
(II) the effectiveness of the
management information system of each
SBIR participating agency and STTR
participating agency in identifying
duplicative SBIR projects and STTR
projects;
(III) the effectiveness of the risk
management strategies of each SBIR
participating agency and STTR
participating agency in identifying
areas of the SBIR program or the STTR
program that are at high risk for
fraud;
(IV) technological tools that may be
used to detect patterns of behavior
that may indicate fraud by applicants
to the SBIR program or the STTR
program;
(V) the success of each SBIR
participating agency and STTR
participating agency in reducing fraud,
waste, and abuse in the SBIR program or
the STTR program of the Federal agency;
(VI) the extent to which the
Inspector General of each SBIR
participating agency and STTR
participating agency effectively
conducts investigations, audits,
inspections, and outreach relating to
the SBIR program and STTR program of
the SBIR participating agency or STTR
participating agency; and
(VII) the effectiveness of the
Government and public databases
described in section 263301 of this
title in reducing vulnerabilities of
the SBIR program and STTR program to
fraud, waste, and abuse, particularly
with respect to Federal agencies
funding duplicative proposals and
business concerns falsifying
information in proposals; and
(ii) submit to the Committee on Small
Business and Entrepreneurship of the Senate,
the Committee on Small Business and Committee
on Science, Space, and Technology of the House
of Representatives, and the head of each SBIR
participating agency and STTR participating
agency a report on the results of the study
conducted under clause (i).
(6) National research council.--
(A) Study and recommendations.--The head of each
agency with a budget of more than $50,000,000 for its
SBIR program for fiscal year 1999, in consultation with
the Administrator, shall cooperatively enter into an
agreement with the National Academy of Sciences for the
National Research Council to--
(i) conduct a comprehensive study of how the
SBIR program has stimulated technological
innovation and used small businesses to meet
Federal research and development needs,
including--
(I) a review of the value to the
Federal research agencies of the
research projects being conducted under
the SBIR program, and of the quality of
research being conducted by small
businesses participating under the SBIR
program, including a comparison of the
value of projects conducted under the
SBIR program with those funded by other
Federal research and development
expenditures;
(II) to the extent practicable, an
evaluation of the economic benefits
achieved by the SBIR program, including
the economic rate of return, and a
comparison of the economic benefits,
including the economic rate of return,
achieved by the SBIR program with the
economic benefits, including the
economic rate of return, of other
Federal research and development
expenditures;
(III) an evaluation of the
noneconomic benefits achieved by the
SBIR program over the life of the
program;
(IV) a comparison of the allocation
for fiscal year 2000 of Federal
research and development funds to small
businesses with that allocation for
fiscal year 1983, and an analysis of
the factors that have contributed to
the allocation; and
(V) an analysis of whether Federal
agencies, in fulfilling their
procurement needs, are making
sufficient effort to use small
businesses that have completed a phase
II award under the SBIR program; and
(ii) make recommendations with respect to--
(I) measures of outcomes for
strategic plans submitted under section
306 of title 5 and performance plans
submitted under section 1115 of title
31 of each SBIR participating agency;
(II) whether companies that can
demonstrate project feasibility, but
that have not received a phase I award,
should be eligible for phase II awards,
and the potential impact of such awards
on the competitive selection process of
the program;
(III) whether the Federal Government
should be permitted to recoup some or
all of its expenses if a controlling
interest in a company receiving an SBIR
award is sold to a foreign company or
to a company that is not a small
business concern;
(IV) how to increase the use by the
Federal Government in its programs and
procurements of technology-oriented
small business concerns; and
(V) improvements to the SBIR program,
if any are considered appropriate.
(B) Participation by small business concerns.--
(i) In general.--In a manner consistent with
law and with National Research Council study
guidelines and procedures, knowledgeable
individuals from small business concerns with
experience in the SBIR program shall be
included--
(I) in any panel established by the
National Research Council for the
purpose of performing the study
conducted under this paragraph; and
(II) among those who are asked by the
National Research Council to peer
review the study.
(ii) Consultation.--To ensure that the
concerns of small business concerns are
appropriately considered under this
subparagraph, the National Research Council
shall consult with and consider the views of
the Office of Technology and the Office of
Advocacy of the SBA and other interested
parties, including entities, organizations, and
individuals actively engaged in enhancing or
developing the technological capabilities of
small business concerns.
(C) Report.--The National Research Council shall
submit to the heads of agencies entering into an
agreement under this paragraph and to the Committee on
Science, Space, and Technology and Committee on Small
Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the
Senate--
(i) not later than December 21, 2003, a
report including the results of the study
conducted under subparagraph (A)(i) and
recommendations made under subparagraph
(A)(ii); and
(ii) not later than December 21, 2006, an
update of the report.
(D) Extensions and enhancements of authority.--
(i) In general.--In consultation with the
Administrator, the head of each agency with a
budget of more than $50,000,000 for its SBIR
program for fiscal year 1999 shall
cooperatively enter into an agreement with the
National Academy of Sciences for the National
Research Council to, not later than December
31, 2014, and every 4 years thereafter--
(I) continue the most recent study
under this paragraph relating to the
issues described in subclauses (I),
(II), (III), and (V) of subparagraph
(A)(i);
(II) conduct a comprehensive study of
how the STTR program has stimulated
technological innovation and technology
transfer, including--
(aa) a review of the
collaborations created between
small business concerns and
research institutions,
including an evaluation of the
effectiveness of the STTR
program in stimulating new
collaborations and any
obstacles that may prevent or
inhibit the creation of such
collaborations;
(bb) an evaluation of the
effectiveness of the STTR
program at transferring
technology and capabilities
developed through Federal
funding;
(cc) to the extent
practicable, an evaluation of
the economic benefits achieved
by the STTR program, including
the economic rate of return;
(dd) an analysis of how
Federal agencies are using
small business concerns that
have completed phase II under
the STTR program to fulfill
their procurement needs;
(ee) an analysis of whether
additional funds could be
employed effectively by the
STTR program; and
(ff) an assessment of the
systems and minimum performance
standards relating to
commercialization success
established under section
263321 of this title;
(III) make recommendations with
respect to the issues described in
subclauses (I), (IV), and (V) of
subparagraph (A)(ii) and subclause (II)
of this clause; and
(IV) estimate, to the extent
practicable, the number of jobs created
by the SBIR program or STTR program of
the agency.
(ii) Consultation.--An agreement under clause
(i) shall require the National Research Council
to ensure that there is participation by and
consultation with small business concerns, the
Administrator, and other interested parties as
described in subparagraph (B).
(iii) Reporting.--An agreement under clause
(i) shall require that not later than December
31, 2015, and every 4 years thereafter, the
National Research Council shall submit to the
head of the agency entering into the agreement,
the Committee on Small Business and
Entrepreneurship of the Senate, and the
Committee on Small Business and the Committee
on Science, Space, and Technology of the House
of Representatives a report regarding the study
conducted under clause (i) and containing the
recommendations described in clause (i).
(b) FAST Program.--The Administrator shall annually submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Science and Committee on Small Business of the House of
Representatives a report regarding--
(1) the number and amount of awards provided and cooperative
agreements entered into under the FAST program during the
preceding year;
(2) a list of recipients under section 263305 of this title,
including their location and the activities being performed
with the awards made or under the cooperative agreements
entered into; and
(3) the mentoring networks and the mentoring database, as
provided for under section 263305(f) of this title, including--
(A) the status of the inclusion of mentoring
information in the database required by section 263301
of this title; and
(B) the status of the implementation and description
of the usage of the mentoring networks.
Sec. 107111. Annual report on women's business center program
(a) In General.--The Administrator shall annually submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a report on
the effectiveness of all projects conducted under chapter 273.
(b) Contents.--A report under subsection (a) shall include
information concerning, with respect to each women's business center--
(1) the number of individuals receiving assistance;
(2) the number of startup business concerns formed;
(3) the gross receipts of assisted business concerns;
(4) the employment increases or decreases of assisted
business concerns;
(5) to the maximum extent practicable, increases or decreases
in profits of assisted business concerns; and
(6) the most recent analysis and determination made by the
Administrator under section 273107(a)(2) of this title.
Sec. 107112. Annual report of the Associate Administrator for
International Trade
The Associate Administrator for International Trade shall annually
submit to the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report that contains--
(1) a description of the progress of the Office in
implementing the requirements of chapter 277;
(2) a detailed account of the results of export growth
activities of the Administrator, including the activities of
each SBA district office and SBA regional office, based on the
performance measures described in section 277108 of this title;
(3) an estimate of the total number of jobs created or
retained as a result of export assistance provided by the
Administrator and resource partners of the Administrator;
(4) for any travel by the staff of the Office of
International Trade, the destination of the travel and the
benefits to SBA and to small business concerns resulting from
the travel; and
(5) a description of the participation by the Office of
International Trade in trade negotiations.
Sec. 107113. Biennial report on filling gaps in high-and-low-export
volume areas
Every 2 years, the Administrator shall--
(1) conduct a study of--
(A) the volume of exports for each State;
(B) the availability of export finance specialists in
each State;
(C) the number of exporters in each State that are
small business concerns;
(D) the percentage of exporters in each State that
are small business concerns;
(E) the change, if any, in the number of exporters
that are small business concerns in each State--
(i) for the 1st study conducted under this
paragraph, during the 10-year period ending on
September 27, 2010; and
(ii) for each subsequent study, during the
10-year period ending on the date on which the
study is commenced;
(F) the total value of the exports in each State by
small business concerns;
(G) the percentage of the total volume of exports in
each State that is attributable to small business
concerns; and
(H) the change, if any, in the percentage of the
total volume of exports in each State that is
attributable to small business concerns--
(i) for the 1st study conducted under this
paragraph, during the 10-year period ending on
September 27, 2010; and
(ii) for each subsequent study, during the
10-year period ending on the date on which the
study is commenced; and
(2) submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report containing--
(A) the results of the study under paragraph (1);
(B) to the extent practicable, a recommendation
regarding how to eliminate gaps between the supply of
and demand for export finance specialists in the 15
States that have the greatest volume of exports, based
on the most recent data available from the Department
of Commerce;
(C) to the extent practicable, a recommendation
regarding how to eliminate gaps between the supply of
and demand for export finance specialists in the 15
States that have the lowest volume of exports, based on
the most recent data available from the Department of
Commerce; and
(D) such additional information as the Administrator
determines is appropriate.
Sec. 107114. Annual report on historical trends of the small business
sector
The Administrator shall 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 under section
103203 of this title.
Sec. 107115. Biennial report on accredited lenders program
The Administrator shall biennially submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the implementation
of section 331107 of this title that includes data on the number of
qualified development companies (as defined in section 331101 of this
title) designated as accredited lenders, their debenture guarantee
volume, their loss rates, the average processing time on their
guarantee applications, and such other information as the Administrator
considers appropriate.
Sec. 107116. Annual report on premier certified lenders program
(a) In General.--The Administrator shall annually submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a report on
the implementation of section 331108 of this title.
(b) Contents.--A report under subsection (a) shall include--
(1) the number of certified development companies designated
as premier certified lenders;
(2) the debenture guarantee volume of those certified
development companies;
(3) a comparison of the loss rate of premier certified
lenders with the loss rate of accredited lenders under section
331107 of this title and the loss rate of other certified
development companies under chapter 331, specifically comparing
default rates and recovery rates on liquidations; and
(4) such other information as the Administrator considers
appropriate.
Sec. 107117. Annual report on foreclosure and liquidation of loans
under the certified development company program
(a) In General.--Based on information provided by qualified
development companies (as defined in section 331101 of this title) and
SBA, the Administrator shall annually submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the results of
delegation of authority under section 331109 of this title.
(b) Contents.--A report under subsection (a)--
(1) shall disclose, with respect to each loan foreclosed or
liquidated by a qualified development company under section
331109 of this title, or for which losses were otherwise
mitigated by the qualified development company pursuant to a
workout plan under that section--
(A) the total cost of the project financed with the
loan;
(B) the total original dollar amount guaranteed by
the Administrator;
(C) the total dollar amount of the loan at the time
of liquidation, foreclosure, or mitigation of loss;
(D) the total dollar losses resulting from the
liquidation, foreclosure, or mitigation of loss; and
(E) the total recoveries resulting from the
liquidation, foreclosure, or mitigation of loss, both
as a percentage of the amount guaranteed and the total
cost of the project financed;
(2) shall disclose, with respect to each qualified
development company to which authority is delegated under
section 331109 of this title, the totals of each of the amounts
described in subparagraphs (A) to (E) of paragraph (1);
(3) shall disclose, with respect to all loans subject to
foreclosure, liquidation, or mitigation under section 331109 of
this title, the totals of each of the amounts described in
subparagraphs (A) to (E) of paragraph (1);
(4) include a comparison between--
(A) the information provided under paragraph (3) with
respect to the 12-month period preceding the date on
which the report is submitted; and
(B) the same information with respect to loans
foreclosed and liquidated, or otherwise treated, by the
Administrator during the same period; and
(5)(A) shall disclose the number of times that the
Administrator has failed to--
(i) approve or reject a liquidation plan in
accordance with section 331109(c)(2)(A)(ii) of this
title or a workout plan in accordance with section
331109(c)(2)(C)(ii) of this title; or
(ii) approve or deny a request for purchase of
indebtedness under section 331109(c)(2)(B)(ii) of this
title; and
(B) include specific information regarding--
(i) the reasons for the Administrator's failure; and
(ii) any delays that resulted.
Sec. 107118. Reports on disaster assistance
(a) Definitions.--In this section:
(1) Major disaster update period.--The term ``major disaster
update period'', with respect to a major disaster, means the
period beginning on the date on which the President declares
the major disaster (including any extraordinary disaster) and
ending on the date on which the declaration terminates.
(2) State.--The term ``State'' means a State of the United
States, the District of Columbia, Puerto Rico, the Northern
Mariana Islands, the Virgin Islands, Guam, American Samoa, and
any territory or possession of the United States.
(b) Monthly Accounting Reports for Major Disasters.--
(1) Reporting requirements.--Not later than the 5th business
day of each month during the applicable period for a major
disaster, the Administrator shall submit to the Committee on
Small Business and Entrepreneurship and Committee on
Appropriations of the Senate and the Committee on Small
Business and Committee on Appropriations of the House of
Representatives a report on the operation of the disaster
assistance programs for that major disaster during the
preceding month.
(2) Contents.--A report under paragraph (1) shall include--
(A)(i) the daily average lending volume, in number of
loans and dollars, of each category of loan; and
(ii) the percentage by which each category has
increased or decreased since the previous report;
(B)(i) the weekly average lending volume, in number
of loans and dollars, of each category of loan; and
(ii) the percentage by which each category has
increased or decreased since the previous report;
(C)(i) the amount of funding spent over the month for
each category of loan, both in amount of appropriations
and in program level; and
(ii) the percentage by which each category has
increased or decreased since the previous report;
(D)(i) the amount of funding available for loans, in
amount of appropriations and in program level, for each
category of loan; and
(ii) the percentage by which each category has
increased or decreased since the previous report,
noting the source of any additional funding;
(E) an estimate of how long the available funding for
loans will last, based on the spending rate;
(F)(i) the amount of funding spent over the month for
staff engaged in the operation of the disaster
assistance programs;
(ii) the number of staff engaged in the operation of
the disaster assistance programs; and
(iii) the percentage by which the funding and number
of staff engaged in the operation of the disaster
assistance programs have increased or decreased since
the previous report;
(G)(i) the amount of funding spent over the month for
administrative costs of the disaster assistance
programs; and
(ii) the percentage by which spending for those
administrative costs has increased or decreased since
the previous report;
(H)(i) the amount of funding available for salaries
and expenses combined for operation of the disaster
assistance programs; and
(ii) the percentage by which that funding has
increased or decreased since the previous report,
noting the source of any additional funding; and
(I) an estimate of how long the available funding for
those salaries and expenses will last, based on the
spending rate.
(c) Weekly Disaster Updates for Major Disasters.--
(1) In general.--Each week during a major disaster update
period, the Administrator shall submit to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a
report on the operation of the disaster assistance programs for
the major disaster area.
(2) Contents.--A report under paragraph (1) shall include--
(A)(i) the number of SBA staff performing loan
processing, field inspection, and other duties for the
major disaster; and
(ii) the allocations of the staff in the disaster
field offices, disaster recovery centers, workshops,
and other SBA offices nationwide;
(B)(i) the daily number of applications received from
applicants in the major disaster area; and
(ii) a breakdown of that number by State;
(C)(i) the daily number of applications pending
application entry from applicants in the major disaster
area; and
(ii) a breakdown of that number by State;
(D)(i) the daily number of applications withdrawn by
applicants in the major disaster area; and
(ii) a breakdown of that number by State;
(E)(i) the daily number of applications summarily
declined by the Administrator from applicants in the
major disaster area; and
(ii) a breakdown of that number by State;
(F)(i) the daily number of applications declined by
the Administrator from applicants in the major disaster
area; and
(ii) a breakdown of that number by State;
(G)(i) the daily number of applications in process
from applicants in the major disaster area; and
(ii) a breakdown of that number by State;
(H)(i) the daily number of applications approved by
the Administrator from applicants in the major disaster
area; and
(ii) a breakdown of that number by State;
(I)(i) the daily dollar amount of applications
approved by the Administrator from applicants in the
major disaster area; and
(ii) a breakdown of that number by State;
(J)(i) the daily number of loans disbursed, both
partially and fully, by the Administrator to applicants
in the major disaster area; and
(ii) a breakdown of that number by State;
(K)(i) the daily dollar amount of loans disbursed,
both partially and fully, to applicants in the major
disaster area; and
(ii) a breakdown of that number by State;
(L) the number of applications approved, including
dollar amount approved, and applications partially and
fully disbursed, including dollar amounts, since the
last report under paragraph (1); and
(M)(i) the declaration date, physical damage closing
date, and economic injury closing date for the major
disaster; and
(ii) the number of counties in the major disaster
area.
(d) Periods When Additional Disaster Assistance Is Made Available.--
(1) In general.--During any period for which the
Administrator declares eligibility for additional disaster
assistance under section 221108 of this title, the
Administrator shall, on a monthly basis, submit to the
Committee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of
Representatives a report on the disaster assistance operations
of the Administrator with respect to the applicable major
disaster.
(2) Contents.--A report under paragraph (1) shall specify--
(A) the number of applications for disaster
assistance distributed;
(B) the number of applications for disaster
assistance received;
(C) the average time for the Administrator to approve
or disapprove an application for disaster assistance;
(D) the number of disaster loans approved;
(E) the average time for initial disbursement of
disaster loan proceeds; and
(F) the dollar amount of disaster loan proceeds
disbursed.
(e) Notice of Need for Supplemental Funds.--On the date on which the
Administrator notifies any committee of the Senate or the House of
Representatives that supplemental funding is necessary for the disaster
assistance programs in any fiscal year, the Administrator shall notify
in writing the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives regarding the need for supplemental funds for the
disaster assistance programs.
(f) Report on Contracting.--
(1) In general.--Not later than 6 months after the date on
which the President declares a major disaster, and every 6
months thereafter until the date that is 18 months after the
date on which the major disaster is declared, the Administrator
shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report regarding
Federal contracts awarded as a result of the major disaster.
(2) Contents.--A report under paragraph (1) shall include--
(A) the number of contracts awarded as a result of
the major disaster;
(B) the number of contracts awarded to small business
concerns as a result of the major disaster;
(C) the number of contracts awarded to women-owned
business concerns and minority-owned business concerns
as a result of the major disaster; and
(D) the number of contracts awarded to business
concerns local to the major disaster area as a result
of the major disaster.
(g) Annual Reports on Disaster Assistance.--
(1) In general.--Not later than 45 days after the end of a
fiscal year, the Administrator shall submit to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a
report on the disaster assistance operations of SBA for the
fiscal year.
(2) Contents.--A report under paragraph (1) shall--
(A) specify the number of SBA personnel involved in
disaster assistance operations;
(B) describe any material changes to disaster
assistance operations, such as changes to technologies
used or to personnel responsibilities;
(C) describe and assess the effectiveness of the
Administrator in responding to disasters during the
fiscal year, including a description of the number and
dollar amounts of loans made for damage and for
economic injury; and
(D) describe the plans of the Administrator for
preparing to respond to disasters during the next
fiscal year.
Sec. 107119. Annual report on subcontracting goals
Not later than March 31 of each year, 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, based on data available through systems in existence on January
2, 2013, that discloses, for each Federal agency (and to the extent
practicable, by type of goal or plan)--
(1)(A) the percentage of offerors and bidders that were
required to submit reports under section 243103(d)(5) of this
title during the preceding fiscal year that filed the required
reports; and
(B) the percentage of those offerors and bidders that failed
to file the required reports;
(2) the percentage of offerors and bidders that filed the
required reports that met, exceeded, or failed to meet goals
set forth in their subcontracting plans during the preceding
fiscal year; and
(3) the aggregate value by which offerors and bidders that
filed the required reports exceeded, or failed to meet, their
subcontracting goals during the preceding fiscal year.
Sec. 107120. Annual report on suspensions and debarments
(a) In General.--The Administrator shall annually submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a report on
the suspension and debarment actions taken by the Administrator during
the year preceding the year of submission of the report.
(b) Contents.--A report under subsection (a) shall include the
following information for the year covered by the report:
(1) Number proposed.--The number of contractors proposed for
suspension or debarment.
(2) Source of proposal.--The office within a Federal agency
that originated each proposal for suspension or debarment.
(3) Reasons for proposals.--The reason for each proposal for
suspension or debarment.
(4) Results.--The result of each proposal for suspension or
debarment, and the reason for the result.
(5) Referrals.--The number of suspensions or debarments
referred to the Inspector General of SBA or of another Federal
agency or to the Attorney General.
(c) Redaction of Identifying Information.--For purposes of subsection
(b)(5), the Administrator may redact identifying information on names
of companies or other information to protect the integrity of any
ongoing criminal or civil investigation.
Sec. 107121. Annual report on training and travel by Directors of Small
and Disadvantaged Business Utilization
At the end of each fiscal year, the Director of Small and
Disadvantaged Business Utilization of a Federal agency shall submit to
the Committee on Small Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the Senate a report
that--
(1) describes the training provided by the Director under
section 251109(e)(5) of this title during the fiscal year;
(2) discloses the percentage of the budget of the Director
used for that training;
(3) discloses the percentage of the budget of the Director
used for travel during the fiscal year; and
(4) discloses any failure of the agency to comply with
chapter 231, 233, 241 (except section 241119), 243, or 245 of
this title or division H of subtitle II of this title.
Sec. 107122. Triennial report regarding procurement center
representatives and commercial market
representatives
(a) In General.--Every 3 years, the Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a report
regarding procurement center representatives and commercial market
representatives.
(b) Contents.--A report under subsection (a) shall--
(1) identify each area for which the Administrator has
assigned a procurement center representative or a commercial
market representative;
(2) explain why the Administrator selected the areas
identified under paragraph (1); and
(3) describe the activities performed by procurement center
representatives and commercial market representatives.
Sec. 107123. Quinquennial report on representation of women
(a) Study.--The Administrator shall periodically conduct a study to
identify industries (as defined under the North American Industry
Classification System) that are underrepresented by small business
concerns owned and controlled by women.
(b) Report.--Not later than January 2, 2016, and every 5 years
thereafter, the Administrator shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the results of
each study under subsection (a) conducted during the 5-year period
ending on the date of the report.
Sec. 107124. Annual report on mentor-protege programs
(a) In General.--Not later than January 2, 2015, 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 that--
(1) identifies each Federal mentor-protege program under
section 299106 of this title;
(2) discloses the number of participants in each mentor-
protege program, including the number of participants that
are--
(A) small business concerns;
(B) qualified HUBZone small business concerns;
(C) small business concerns owned and controlled by
service-disabled veterans;
(D) small business concerns owned and controlled by
socially and economically disadvantaged individuals; or
(E) small business concerns owned and controlled by
women;
(3) describes the type of assistance provided to proteges
under each mentor-protege program;
(4) describes the benefits provided to mentors under each
mentor-protege program; and
(5) describes the progress of proteges under each mentor-
protege program with respect to competing for Federal prime
contracts and subcontracts.
(b) Provision of Information.--The head of a Federal agency that
carries out a mentor-protege program under section 299106 of this title
shall annually provide the Administrator the information necessary for
the Administrator to submit a report under subsection (a).
Sec. 107125. Annual report on State trade expansion program
(a) In General.-- The Associate Administrator for International Trade
shall publish on the SBA website an annual report regarding the State
trade expansion program under section 277110 of this title.
(b) Contents.--The report shall--
(1) disclose the number and amount of grants made under the
program during the preceding year;
(2) include a list of the States receiving a grant under the
program during the preceding year, including the activities
being performed with each grant;
(3) describe the effect of each grant on the eligible small
business concerns in the State receiving the grant;
(4) disclose the total return on investment for each State;
and
(5) describe best practices by States that showed high
returns on investment and significant progress in helping more
eligible small business concerns.
(c) Notice to Congress.--On the date on which the Associate
Administrator publishes a report under subsection (a), the Associate
Administrator shall notify the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small Business of
the House of Representatives that the report has been published.
Chapter 109--Funding
Sec.
109101. Commitments in full amounts provided by law.
109102. Program levels.
109103. Authorization of appropriations.
109104. TARP funds and tax increases.
109105. Annual budget request.
Sec. 109101. Commitments in full amounts provided by law
(a) In General.--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
subtitles II and III, in the full amounts provided by law subject only
to--
(1) the availability of qualified applications; and
(2) limitations contained in appropriations Acts.
(b) Effect of Section.--Nothing in this section authorizes the
Administrator to reduce or limit the authority of the Administrator to
enter into a commitment described in subsection (a).
(c) Multiple Fiscal Years.--Subject to approval in appropriations
Acts, amounts authorized for preferred securities, debentures, or
participating securities under chapter 303 may be obligated in 1 fiscal
year and disbursed or guaranteed in any 1 or more of the 4 subsequent
fiscal years.
Sec. 109102. Program levels
(a) Fiscal Year 2005.--The following program levels are authorized
for fiscal year 2005:
(1) For the programs authorized by this subtitle and subtitle
II, the Administrator may make--
(A) $75,000,000 in technical assistance grants, as
provided in chapter 213; and
(B) $105,000,000 in direct loans, as provided in
chapter 213.
(2) For the programs authorized by this subtitle and subtitle
II, the Administrator may make $23,050,000,000 in deferred
participation loans and other financings. Of that sum, the
Administrator may make--
(A) $16,500,000,000 in general business loans, as
provided in division B of subtitle II;
(B) $6,000,000,000 in certified development company
financings, as provided in section 205107 of this title
and chapter 331;
(C) $500,000,000 in loans, as provided in section
205112 of this title; and
(D) $50,000,000 in loans, as provided in chapter 213.
(3) For the programs authorized by chapter 303, the
Administrator may make--
(A) $4,250,000,000 in purchases of participating
securities; and
(B) $3,250,000,000 in guarantees of debentures.
(4) For the programs authorized by chapter 321, the
Administrator may enter into guarantees not to exceed
$6,000,000,000, of which not more than 50 percent may be in
bonds approved under section 321102(a)(4) of this title.
(5) The Administrator may make grants or enter into
cooperative agreements for a total amount of $7,000,000 for
SCORE.
(b) Fiscal Year 2006.--The following program levels are authorized
for fiscal year 2006:
(1) For the programs authorized by this subtitle and subtitle
II, the Administrator may make--
(A) $80,000,000 in technical assistance grants, as
provided in chapter 213; and
(B) $110,000,000 in direct loans, as provided in
chapter 213.
(2) For the programs authorized by this subtitle and subtitle
II, the Administrator may make $25,050,000,000 in deferred
participation loans and other financings. Of that sum, the
Administrator may make--
(A) $17,000,000,000 in general business loans, as
provided in division B of subtitle II;
(B) $7,500,000,000 in certified development company
financings, as provided in section 205107 of this title
and chapter 331;
(C) $500,000,000 in loans, as provided in section
205112 of this title; and
(D) $50,000,000 in loans, as provided in chapter 213.
(3) For the programs authorized by chapter 303, the
Administrator may make--
(A) $4,500,000,000 in purchases of participating
securities; and
(B) $3,500,000,000 in guarantees of debentures.
(4) For the programs authorized by chapter 321, the
Administrator may enter into guarantees not to exceed
$6,000,000,000, of which not more than 50 percent may be in
bonds approved under section 321102(a)(4) of this title.
(5) The Administrator may make grants or enter into
cooperative agreements for a total amount of $7,000,000 for
SCORE.
(c) Amount of Deferred Participation Loans.--Except as may be
otherwise specifically provided by law, the amount of deferred
participation loans authorized in this section--
(1) means the net amount of the loan principal guaranteed by
the Administrator and does not include any amount that is not
guaranteed; and
(2) shall be available for a national program, except that
the Administrator may use not more than an amount equal to 10
percent of the amount authorized each year for any special or
pilot program directed to identified sectors of the small
business community or to specific geographic regions of the
United States.
Sec. 109103. Authorization of appropriations
(a) Certain Administrative Expenses.--For each fiscal year, there are
authorized to be appropriated such sums as are necessary, to remain
available until expended--
(1) to carry out the small business development center
program, but not to exceed the annual funding level specified
in section 271102 of this title;
(2) to pay the expenses of the National Small Business
Development Center Advisory Board under section 271109 of this
title;
(3) to pay the expenses of the information sharing system
under section 271104(j) of this title;
(4) to pay the expenses of the Association for conducting the
accreditation program under section 271111 of this title;
(5) to pay SBA's expenses, including salaries of examiners,
for conducting examinations as part of the accreditation
program conducted by the Association; and
(6) to pay for small business development center grants as
directed by Congress.
(b) Programs for Which Program Levels Are Established Under Section
109102.--
(1) In general.--There are authorized to be appropriated to
SBA for each of fiscal years 2005 and 2006 such sums as are
necessary to carry out--
(A) the provisions of this subtitle and subtitle II
not elsewhere provided for (including salaries and
expenses of SBA and necessary loan capital for loans
under the disaster loan program); and
(B) subtitle III.
(2) Limitations.--Notwithstanding any other provision of this
subsection, for each of fiscal years 2005 and 2006,
respectively--
(A) no funds are authorized to be used as loan
capital for the loan program authorized by section
205112 of this title except by transfer from another
Federal agency to SBA, unless the program level
authorized for general business loans under subsection
(a)(2)(A) or (b)(2)(A) of section 109102 of this title
is fully funded; and
(B) the Administrator may not approve loans on behalf
of SBA or on behalf of any other Federal agency, by
contract or otherwise, under terms or conditions other
than those specifically authorized under this subtitle
or subtitle II or III, except that the Administrator
may approve loans under section 205112 of this title in
gross amounts of not more than $2,000,000.
(c) Office of Advocacy.--
(1) Appropriation requests.--Each budget of the United States
Government submitted by the President under section 1105 of
title 31 shall include a separate statement of the amount of
appropriations requested for the Office of Advocacy of SBA,
which shall be designated in a separate account in the general
fund of the Treasury.
(2) Authorization of appropriations.--There are authorized to
be appropriated such sums as are necessary to carry out section
103107 of this title. Any amount appropriated under this
paragraph shall remain available, without fiscal year
limitation, until expended.
(d) Office of Veterans Business Development.--There are authorized to
be appropriated to carry out section 103113 of this title--
(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
(e) Losses and Interest Subsidies.--There are authorized to be
appropriated for each fiscal year such sums as are necessary for losses
and interest subsidies incurred by the accounts referred to in section
103202(a)(1) of this title.
(f) HUBZone Program.--There is authorized to be appropriated to carry
out chapter 253 $10,000,000 for each of fiscal years 2004 through 2006.
(g) FAST Program.--
(1) In general.--There is authorized to be appropriated to
carry out the FAST program (including mentoring networks)
$10,000,000 for each of fiscal years 2001 through 2005.
(2) Mentoring database.--Of the total amount made available
under paragraph (1) for fiscal years 2001 through 2005, a
reasonable amount, not to exceed a total of $500,000, may be
used by the Administrator to carry out section 263305(f)(3) of
this title.
(h) Small Business Development Center Program.--
(1) In general.--There are authorized to be appropriated to
carry out chapter 271--
(A) $130,000,000 for fiscal year 2005; and
(B) $135,000,000 for fiscal year 2006.
(2) Grants.--There is authorized to be appropriated
$50,000,000 to carry out section 271115 of this title.
(i) State Trade Expansion Program.--There is authorized to be
appropriated to carry out the State trade expansion program under
section 277110 of this title $30,000,000 for each of fiscal years 2016
through 2020.
(j) Business Grants and Cooperative Agreements.--There is authorized
to be appropriated to carry out section 299102 of this title $6,600,000
for each of fiscal years 2001 through 2006, to remain available until
expended.
(k) Paul D. Coverdell Drug-Free Workplace Program.--
(1) In general.--There is authorized to be appropriated to
carry out section 299104 of this title (other than section
299104(b)(2) of this title) $5,000,000 for each of fiscal years
2005 and 2006. Amounts made available under this paragraph
shall remain available until expended.
(2) Small business development centers.--Of the total amount
made available under paragraph (1) for each of fiscal years
2005 and 2006, not more than the greater of 10 percent or
$500,000 may be used to carry out section 271104(b)(21) of this
title.
(3) Additional authorization for technical assistance
grants.--There are authorized to be appropriated to carry out
section 299104(b)(2) of this title $1,500,000 for each of
fiscal years 2005 and 2006. Amounts made available under this
paragraph shall remain available until expended.
(4) Limitation on administrative costs.--Not more than 5
percent of the total amount made available under this
subsection for any fiscal year shall be used for administrative
costs (determined without regard to the administrative costs of
eligible intermediaries).
(l) New Markets Venture Capital Company Program.--
(1) In general.--There are authorized to be appropriated for
fiscal years 2001 through 2006, to remain available until
expended, the following sums:
(A) Such subsidy budget authority as is necessary to
guarantee $150,000,000 of debentures under chapter 305.
(B) $30,000,000 to make grants under chapter 305.
(2) Funds collected for examinations.--Funds deposited under
section 305112(d) of this title are authorized to be
appropriated only for the costs of examinations under section
305112 of this title and for the costs of other oversight
activities with respect to the new markets venture capital
company program.
(m) Renewable Fuel Capital Investment Company Program.--
(1) In general.--Subject to the availability of
appropriations, the Administrator may make $15,000,000 in
operational assistance grants under section 307107 of this
title for each of fiscal years 2008 and 2009.
(2) Funds collected for examinations.--Funds deposited under
section 307111(d) of this title are authorized to be
appropriated only for the costs of examinations under section
307111 of this title and for the costs of other oversight
activities with respect to the renewable fuel capital
investment company program.
Sec. 109104. TARP funds and tax increases
(a) Definition of Covered Amount.--In this section, the term
``covered amount'' means--
(1) an amount made available to the Secretary of the Treasury
under title I of the Emergency Economic Stabilization Act of
2008 (12 U.S.C. 5211 et seq.) to purchase (under section 101 of
that Act (12 U.S.C. 5211)) or guarantee (under section 102 of
that Act (12 U.S.C. 5212)) assets under that Act; and
(2) a revenue increase attributable to any amendment to the
Internal Revenue Code of 1986 made during the period beginning
on September 27, 2010, and ending on December 31, 2010.
(b) Prohibition.--No covered amount shall be used to carry out the
provisions described in subsection (c) (as restated in this title, in
the case of the provisions described in paragraphs (1) to (3), (5) to
(7), and (9) to (13)).
(c) Provisions.--The provisions referred to in subsection (b) are--
(1) the amendments made by section 1111 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2507);
(2) the amendments made by section 1112 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2508);
(3) the amendments made by section 1113 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2508);
(4) the amendments made by section 1114 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2508);
(5) the amendment made by section 1115 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2508);
(6) the amendment made by section 1116 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2509);
(7) the amendment made by section 1117 of the Small Business
Job Creation and Access to Capital Act of 2010 (124 Stat.
2509);
(8) section 1118 of the Small Business Job Creation and
Access to Capital Act of 2010 (124 Stat. 2509);
(9) the amendment made by section 1122(a) of the Small
Business Job Creation and Access to Capital Act of 2010 (124
Stat. 2510);
(10) section 1122(b) of the Small Business Job Creation and
Access to Capital Act of 2010 (124 Stat. 2512);
(11) the amendment made by section 1122(c) of the Small
Business Job Creation and Access to Capital Act of 2010 (124
Stat. 2512);
(12) the amendment made by section 1131(a) of the Small
Business Job Creation and Access to Capital Act of 2010 (124
Stat. 2512); and
(13) subsections (b) and (c) of section 1131 of the Small
Business Job Creation and Access to Capital Act of 2010 (124
Stat. 2514).
Sec. 109105. Annual budget request
(a) In General.--For each fiscal year, the budget request for SBA
shall provide a detailed justification of any proposed changes from the
enacted level by individual appropriation.
(b) Contents.--The detailed justification shall include at a minimum
a description of each credit program and noncredit program, including
the amount of funding and the amount of costs by appropriation account
and fiscal year.
(c) Multiple Appropriations.--For activities funded in multiple
appropriations, the budget justification shall--
(1) specify the amount included in each enacted
appropriation;
(2) specify the amount proposed for the budget year; and
(3) provide a justification for any proposed changes.
Subtitle II--Loan, Contracting, and Related Assistance Programs
Division A--General Provisions
Chapter 201--General Provisions
Sec.
201101. Certification of compliance with child support obligations.
201102. Certification requirements for business opportunity
specialists.
201103. Certification requirements for commercial market
representatives.
201104. Authorities in carrying out programs for small business
concerns in areas with high proportions of unemployed or low-
income individuals and small business concerns owned by low-
income individuals.
201105. Extension or renewal of loans.
201106. Deferral of repayment for active duty reservists.
201107. Ownership interest arising from community property law.
201108. Use of financial assistance programs.
Sec. 201101. Certification of compliance with child support obligations
(a) In General.--A recipient of financial assistance under this
subtitle shall certify that the recipient is not more than 60 days
delinquent under the terms of any--
(1) administrative order;
(2) court order; or
(3) repayment agreement entered into between the recipient
and the custodial parent or State agency providing child
support enforcement services;
that requires the recipient to pay child support (as defined in section
459(i) of the Social Security Act (42 U.S.C. 659(i))).
(b) Enforcement.--The Administrator shall promulgate such regulations
as are necessary to enforce compliance with this section.
Sec. 201102. Certification requirements for business opportunity
specialists
(a) In General.--Consistent with the requirements of subsection (b),
a business opportunity specialist described (as defined in section
231101 of this title) shall have a Level I Federal Acquisition
Certification in Contracting (or any successor certification) or the
equivalent Department of Defense certification, except that a business
opportunity specialist who was serving on or before January 3, 2013,
may continue to serve as a business opportunity specialist for a period
of 5 years beginning on that date without such a certification.
(b) Delay of Certification Requirement.--
(1) Timing.--A certification described in subsection (a) is
not required for any person serving as a business opportunity
specialist until the date that is 1 calendar year after the
date on which the person is appointed as a business opportunity
specialist.
(2) Applicability.--The requirements of paragraph (1)--
(A) shall be included in any initial job posting for
the position of a business opportunity specialist; and
(B) shall apply to any person appointed as a business
opportunity specialist after January 3, 2013.
Sec. 201103. Certification requirements for commercial market
representatives
(a) In General.--Consistent with the requirements of subsection (b),
a commercial market representative referred to in section 107122 of
this title shall have a Level I Federal Acquisition Certification in
Contracting (or any successor certification) or the equivalent
Department of Defense certification, except that a commercial market
representative who was serving on or before November 25, 2015, may
continue to serve as a commercial market representative for a period of
5 years beginning on that date without such a certification.
(b) Delay of Certification Requirement.--
(1) Timing.--A certification described in subsection (a) is
not required for any person serving as a commercial market
representative until the date that is 1 calendar year after the
date on which the person is appointed as a commercial market
representative.
(2) Applicability.--The requirements of paragraph (1)--
(A) shall be included in any initial job posting for
the position of a commercial market representative; and
(B) shall apply to any person appointed as a
commercial market representative after November 25,
2015.
Sec. 201104. Authorities in carrying out programs for small business
concerns in areas with high proportions of
unemployed or low-income individuals and small
business concerns owned by low-income individuals
In carrying out section 205104 of this title and the business
development program, the Administrator may--
(1) use, 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
use the services and facilities of the State or subdivision
without reimbursement;
(2) accept, in the name of SBA, and employ or dispose of in
furtherance of the purposes of this subtitle, any money or
property, real, personal, or mixed, tangible, or intangible,
received by gift, devise, bequest, or otherwise;
(3) accept voluntary and uncompensated services,
notwithstanding section 1342 of title 31; and
(4)(A) employ experts and consultants or organizations of
experts and consultants as authorized by section 3109 of title
5, except that no individual may be employed under this
subsection for more than 100 days in any fiscal year;
(B) compensate individuals employed under subparagraph (A) at
rates not in excess of the daily equivalent of the highest rate
payable under section 5332 of title 5, including travel time;
(C) allow individuals employed under subparagraph (A), 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 for persons in the
Government service employed intermittently, while so employed;
and
(D) notwithstanding section 3109(b) of title 5, renew
contracts for employment under subparagraph (A) annually.
Sec. 201105. Extension or renewal of loans
(a) In General.--The Administrator may extend the maturity of or
renew a loan under the general business loan program, disaster loan
program, private disaster loan program, intermediary lending pilot
program, or microloan program for additional periods not to exceed 10
years beyond the period stated in the loan if the extension or renewal
will aid in the orderly liquidation of the loan.
(b) Inapplicability to Certain Disaster Loans.--Subsection (a) does
not apply to a loan under the disaster loan program that has a term of
more than 20 years.
Sec. 201106. Deferral of repayment for active duty reservists
(a) Definitions.--In this section:
(1) Eligible reservist.--The term ``eligible reservist''
means a member of a reserve component of the Armed Forces
ordered to active duty during a period of military conflict.
(2) 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 the small business concern.
(3) Period of military conflict.--The term ``period of
military conflict'' means--
(A) a period of war declared by Congress;
(B) a period of national emergency declared by
Congress or by the President; or
(C) a period of a contingency operation (as defined
in section 101(a) of title 10).
(4) Qualified borrower.--The term ``qualified borrower''
means--
(A) an individual who is an eligible reservist and
who received a direct loan under the general business
loan program or a disaster assistance program before
being ordered to active duty; or
(B) a small business concern that received a direct
loan under the general business loan program or a
disaster assistance program before an eligible
reservist, who is an essential employee, was ordered to
active duty.
(b) Deferral of Direct Loans.--
(1) In general.--The Administrator shall, on written request,
defer repayment of principal and interest due on a direct loan
made under the general business loan program or a disaster
assistance program if the loan was incurred by a qualified
borrower.
(2) Period of deferral.--The period of deferral for repayment
under paragraph (1) shall begin on the date on which the
eligible reservist is ordered to active duty and terminate on
the date that is 180 days after the date on which the eligible
reservist is discharged or released from active duty.
(3) Interest rate reduction during deferral.--Notwithstanding
any other provision of law, during the period of deferral under
paragraph (2), the Administrator may reduce the interest rate
on a loan qualifying for a deferral under this subsection.
(c) Deferral of Loan Guarantees and Other Financings.--The
Administrator shall--
(1) encourage intermediaries participating in the microloan
program to defer repayment of a microloan made with proceeds
made available under the microloan program, if the microloan
was incurred by a small business concern that is eligible to
apply for assistance under section 221103 of this title; and
(2) establish guidelines to--
(A) encourage lenders and other intermediaries to
defer repayment of, or provide other relief relating
to--
(i) loan guarantees under the general
business loan program and financings under the
certified development company program that were
incurred by small business concerns that are
eligible to apply for assistance under section
221103 of this title; and
(ii) loan guarantees provided under the
microloan program if the intermediary provides
relief to a small business concern under this
subsection; and
(B) implement a program to provide for the deferral
of repayment or other relief to any intermediary
providing relief to a small business borrower under
this subsection.
Sec. 201107. Ownership interest arising from community property law
Ownership requirements to determine the eligibility of a small
business concern that applies for assistance under any credit program
under this subtitle shall be determined without regard to any ownership
interest of a spouse arising solely from the application of the
community property law of a State for purposes of determining marital
interests.
Sec. 201108. Use of financial assistance programs
The financial assistance programs authorized by this subtitle and
subtitle I shall be used to assist small business concerns that are
engaged in--
(1) the production of food or fiber;
(2) ranching;
(3) livestock raising;
(4) aquaculture; or
(5) any other industry relating to agriculture.
Division B--General Business Loan Program
Chapter 203--General Purpose Loans
Sec.
203101. Loan authority.
203102. Methods of participation.
203103. No credit elsewhere.
203104. Sound and secure requirement.
203105. Level of participation in guaranteed loans.
203106. Maximum loan amounts.
203107. Interest rates.
203108. Prepayment charges.
203109. Maximum term.
203110. Deferment of payments.
203111. Guarantee fees.
203112. Certified lenders program.
203113. Penalty fee on late payment.
203114. Yearly fee.
203115. Notification to Congress of significant policy or
administrative changes.
203116. Pilot programs.
203117. Calculation of subsidy rate.
203118. Leasing.
203119. Real estate appraisals.
203120. Express loan program.
203121. Loan application preparation and loan servicing by qualified
development companies.
203122. Increased veteran/reservist participation program.
Sec. 203101. Loan authority
To the extent and in such amounts as are provided in advance in
appropriation Acts, the Administrator may make loans to small business
concerns (including a small business concern owned by a qualified
Indian tribe) for plant acquisition, construction, conversion, or
expansion, including the acquisition of land, material, supplies,
equipment, and working capital.
Sec. 203102. Methods of participation
(a) In General.--The Administrator may make a loan under section
203101 of this title--
(1) directly; or
(2) in cooperation with a bank or other lending institution
or any other entity through an agreement to participate on an
immediate or deferred (guaranteed) basis.
(b) Lending Limits of Lenders.--The Administrator shall not guarantee
a loan under the general business loan program if the sole purpose for
requesting the guarantee is to allow the lender to exceed the legal
lending limit of the lender.
Sec. 203103. No credit elsewhere
(a) In General.--No financial assistance shall be extended under the
general business loan program if the applicant can obtain credit
elsewhere.
(b) Immediate Participation.--No immediate participation may be
purchased unless it is shown that a deferred participation is not
available.
(c) Direct Financing.--No direct financing may be made unless it is
shown that a participation is not available.
(d) Liquidity.--The Administrator shall not guarantee a loan under
the general business loan program if the lender determines that the
borrower is unable to obtain credit elsewhere solely because the
liquidity of the lender depends on the sale of the guaranteed portion
of the loan on the secondary market.
Sec. 203104. Sound and secure requirement
(a) In General.--A loan made under the general business loan program
shall be of such sound value or so secured as reasonably to ensure
repayment.
(b) Reasonable Doubt.--In applying subsection (a) in the case of a
loan to assist a public or private organization for the disabled or to
assist a disabled individual as provided in section 205103 of this
title, any reasonable doubt shall be resolved in favor of the
applicant.
(c) Energy Measures.--Recognizing that greater risk may be associated
with a loan for an energy measure as provided in section 205105 of this
title, in applying subsection (a) in the case of such a loan--
(1) factors in determining sound value shall include--
(A) quality of the product or service;
(B) technical qualifications of the applicant or
employees of the applicant;
(C) sales projections; and
(D) the financial status of the applicant; and
(2) the loan need not be as sound as is generally required
for a loan under the general business loan program.
Sec. 203105. Level of participation in guaranteed loans
(a) In General.--Except as provided in subsections (b), (c), and (d),
in an agreement to participate in a loan on a deferred basis under the
general business loan program (including a loan made under the
preferred lenders program), participation by the Administrator shall be
equal to--
(1) 75 percent of the balance of the financing outstanding at
the time of disbursement of the loan, if the balance exceeds
$150,000; or
(2) 85 percent of the balance of the financing outstanding at
the time of disbursement of the loan, if the balance is less
than or equal to $150,000.
(b) Reduced Participation on Request.--
(1) In general.--The guarantee percentage specified by
subsection (a) for a loan under the general business loan
program may be reduced on the request of the participating
lender.
(2) Prohibition.--The Administrator shall not use the
guarantee percentage requested by a participating lender under
paragraph (1) as a criterion for establishing priorities in
approving loan guarantee requests under the general business
loan program.
(c) Participation Under Export Working Capital Program.--
Notwithstanding subsection (a), under an agreement to participate in a
loan on a deferred basis under the export working capital program,
participation by the Administrator shall be 90 percent.
(d) Participation in International Trade Loan.--In an agreement to
participate in a loan on a deferred basis under section 205110 of this
title, the participation by the Administrator shall not exceed 90
percent.
Sec. 203106. Maximum loan amounts
(a) Total Amount Outstanding and Committed.--A loan shall not be made
to a borrower under the general business loan program--
(1) if the total amount outstanding and committed (on a
deferred basis, through a participation on an immediate basis,
or directly) to the borrower under the general business loan
program would exceed $3,750,000 (or if the gross loan amount
would exceed $5,000,000); or
(2) in the case of a loan solely for the purposes provided in
section 205110 of this title, if the total amount outstanding
and committed (on a deferred basis) to the borrower under the
general business loan program would not exceed $4,500,000 (or
if the gross loan amount would not exceed $5,000,000), of which
not more than $4,000,000 may be used for working capital,
supplies, or financings under section 205108 of this title for
export purposes.
(b) Loan Amount.--A loan shall not be made under the general business
loan program, directly or in cooperation with a bank or other lending
institution through an agreement to participate on an immediate basis,
if the amount of the loan would exceed $350,000.
Sec. 203107. Interest rates
(a) Maximum Rate Prescribed by the Administrator.--Notwithstanding
the provisions of the constitution of any State or the laws of any
State limiting the rate or amount of interest that may be charged,
taken, received, or reserved, the maximum legal rate of interest on a
financing made on a deferred basis under the general business loan
program shall not exceed a rate prescribed by the Administrator.
(b) Direct Loans and Immediate Participation Loans.--The rate of
interest for the Administrator's share of any direct loan or immediate
participation loan under the general business loan program 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 0.125 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
under the general business loan program that is guaranteed under the
preferred lenders program shall not exceed the maximum interest rate,
as determined by the Administrator, applicable to other loans
guaranteed under the general business loan program.
(d) Loans To Assist the Disabled.--In the case of a loan under the
general business loan program to assist a public or private
organization for the disabled or to assist a disabled individual as
provided in section 205103 of this title, the interest rate shall be 3
percent per year.
(e) Payment of Accrued Interest.--
(1) In general.--A bank or other lending institution making a
claim for payment on the guaranteed portion of a loan made
under the general business loan program shall be paid the
accrued interest due on the loan from the earliest date of
default to the date of payment of the claim at a rate not to
exceed the rate of interest on the loan on the date of default,
minus 1 percent.
(2) Loans sold on secondary market.--If a loan described in
paragraph (1) is sold on the secondary market, the amount of
interest paid to a bank or other lending institution described
in that paragraph from the earliest date of default to the date
of payment of the claim shall be no more than the agreed upon
rate, minus 1 percent.
(3) Applicability.--Paragraphs (1) and (2) do not apply to
loans made on or after October 1, 2000.
Sec. 203108. Prepayment charges
(a) In General.--A borrower that prepays a loan guaranteed under the
general business loan program shall remit to the Administrator a
subsidy recoupment fee calculated in accordance with subsection (b)
if--
(1) the loan is for a term of not less than 15 years;
(2) the prepayment is voluntary;
(3) the amount of prepayment in any calendar year is more
than 25 percent of the outstanding balance of the loan; and
(4) the prepayment is made within the 1st 3 years after
disbursement of the loan proceeds.
(b) Subsidy Recoupment Fee.--The subsidy recoupment fee charged under
subsection (a) shall be--
(1) 5 percent of the amount of prepayment, if the borrower
prepays during the 1st year after disbursement;
(2) 3 percent of the amount of prepayment, if the borrower
prepays during the 2d year after disbursement; and
(3) 1 percent of the amount of prepayment, if the borrower
prepays during the 3d year after disbursement.
Sec. 203109. Maximum term
(a) In General.--Except as provided in subsection (b), no loan
(including a loan renewal or extension) shall be made under the general
business loan program for a term or terms exceeding 25 years.
(b) Exception.--Any portion of a loan that is made under the general
business loan program for the purpose of acquiring real property or
constructing, converting, or expanding a facility may have a term of 25
years plus such additional period as is estimated may be required to
complete the construction, conversion, or expansion.
Sec. 203110. Deferment of payments
The Administrator may defer payments on the principal of a loan under
the general business loan program for a grace period, and use such
other methods as the Administrator considers necessary and appropriate,
to ensure the successful establishment and operation of a small
business concern.
Sec. 203111. Guarantee fees
(a) In General.--With respect to a loan guaranteed under the general
business loan program (other than a loan that is repayable in 1 year or
less), the Administrator shall collect a guarantee fee, which shall be
payable by the participating lender, and may be charged to the
borrower, as follows:
(1) A guarantee fee of not to exceed 2 percent of the
deferred participation share of a total loan amount that is not
more than $150,000.
(2) A guarantee fee of not to exceed 3 percent of the
deferred participation share of a total loan amount that is
more than $150,000, but not more than $700,000.
(3) A guarantee fee of not to exceed 3.5 percent of the
deferred participation share of a total loan amount that is
more than $700,000.
(4) In addition to the guarantee fee under paragraph (3), a
guarantee fee equal to 0.25 percent of any portion of the
deferred participation share that is more than $1,000,000.
(b) Retention of Certain Fees.--A lender participating in the general
business loan program may retain not more than 25 percent of a fee
collected under subsection (a)(1).
Sec. 203112. Certified lenders program
(a) In General.--The Administrator may establish a certified lenders
program for lenders that establish their knowledge of the laws
(including regulations) concerning the guaranteed loan program and
their proficiency in program requirements.
(b) Suspension or Revocation.--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 regulations
prescribed by the Administrator or that the loss experience of the
lender is excessive as compared with that of other lenders, but the
suspension or revocation shall not affect any outstanding guarantee.
(c) Uniform and Simplified Loan Form.--To encourage all lending
institutions and other entities making loans under the general business
loan program to provide loans of $50,000 or less in guarantees to
eligible small business loan applicants, the Administrator shall
develop, and allow participating lenders to solely use, a uniform and
simplified loan form for such loans.
(d) Loan Liquidation.--
(1) In general.--The Administrator may permit a lender
participating in the certified lenders program to liquidate a
loan made with a guarantee from the Administrator in accordance
with a liquidation plan approved by the Administrator.
(2) Automatic approval.--If the Administrator does not
approve or deny a request for approval of a liquidation plan
within 10 business days after the date on which the request is
made (or with respect to any routine liquidation activity under
such a plan, within 5 business days), the request shall be
deemed to be approved.
Sec. 203113. Penalty fee on late payment
The Administrator may permit a participating lender to impose and
collect a reasonable penalty fee on late payment of a loan guaranteed
under the general business loan program in an amount not to exceed 5
percent of the monthly loan payment per month plus interest.
Sec. 203114. Yearly fee
(a) Definition of Cost.--In this section, the term ``cost'' has the
meaning given the term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a).
(b) Fee.--With respect to a loan approved under the general business
loan program, the Administrator shall assess, collect, and retain a
fee, not to exceed 0.55 percent per year of the outstanding balance of
the deferred participation share of the loan, in an amount established
once annually by the Administrator in the Administrator's annual budget
request to Congress, as necessary to reduce to zero the cost to the
Administrator of making guarantees under the general business loan
program.
(c) Payer.--The yearly fee assessed under subsection (b) shall be
payable by the participating lender and shall not be charged to the
borrower.
(d) Lowering of Borrower Fees.--If the Administrator determines that
fees paid by lenders and by small business borrowers for guarantees
under the general business loan program may be reduced, consistent with
reducing to zero the cost to the Administrator of making such
guarantees--
(1) the Administrator shall first consider reducing fees paid
by small business borrowers under paragraphs (1) to (3) of
section 203111(a) of this title, to the maximum extent
possible; and
(2) fees paid by small business borrowers shall not be
increased above the levels in effect on December 8, 2004.
Sec. 203115. Notification to Congress of significant policy or
administrative changes
Not later than 15 days before making any significant policy or
administrative change affecting the operation of the general business
loan program, the Administrator shall notify the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives of the change.
Sec. 203116. Pilot programs
(a) Definition of Pilot Program.--In this section, the term ``pilot
program'' means a lending program initiative, project, innovation, or
other activity not specifically authorized by law.
(b) Limitation.--Not more than 10 percent of the number of loans
guaranteed in any fiscal year under the general business loan program
may be awarded as part of a pilot program commenced on or after October
1, 1996.
(c) Low Documentation Loan Program.--
(1) In general.--The Administrator may carry out the low
documentation loan program for loans of $100,000 or less only
through lenders with significant experience in making small
business loans.
(2) Regulations.--The Administrator shall promulgate
regulations defining the experience necessary for participation
as a lender in the low documentation loan program.
Sec. 203117. Calculation of subsidy rate
All fees, interest, and profits received and retained by the
Administrator under the general business loan program shall be included
in the calculations made by the Director of the Office of Management
and Budget to offset the cost (as defined in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a)) to the Administrator of
purchasing and guaranteeing loans under this subtitle.
Sec. 203118. Leasing
In addition to such other lease arrangements as the Administrator may
authorize, a borrower may permanently lease to 1 or more tenants not
more than 20 percent of any property constructed with the proceeds of a
loan guaranteed under the general business loan program if the borrower
permanently occupies and uses not less than 60 percent of the total
business space in the property.
Sec. 203119. Real estate appraisals
With respect to a loan under the general business loan program that
is secured by commercial real property, an appraisal of the property by
a State licensed or certified appraiser--
(1) shall be required by the Administrator in connection with
any such loan for more than $250,000; or
(2) may be required by the Administrator or the lender in
connection with any such loan for $250,000 or less, if an
appraisal is necessary for appropriate evaluation of
creditworthiness.
Sec. 203120. Express loan program
(a) Restriction to Express Lender.--The authority to make an express
loan shall be limited to lenders that the Administrator considers
qualified to make express loans.
(b) Effect of Designation.--Designation as an express lender for
purposes of making an express loan does not preclude the lender from
taking any other action authorized by the Administrator for that lender
under the general business loan program.
(c) Retention of Designation of Express Lender.--An express lender
shall retain that designation unless--
(1) the Administrator determines that the express lender has
violated the law (including regulations); or
(2) the Administrator modifies the requirements to be an
express lender and the lender no longer satisfies those
requirements.
(d) Maximum Loan Amount.--The maximum loan amount under the express
loan program is $350,000.
(e) Option To Participate.--Except as otherwise provided in this
section, the Administrator shall take no regulatory, policy, or
administrative action, without regard to whether the action requires
notification under section 203115 of this title, that has the effect of
requiring a lender to make an express loan.
(f) Renewable Energy and Energy Efficiency.--The Administrator may
make a loan under the express loan program for the purpose of--
(1) purchasing a renewable energy system; or
(2) carrying out an energy efficiency project for a small
business concern.
(g) Guarantee Fee Waiver for Veterans.--
(1) Definition of veteran or spouse of a veteran.--In this
subsection, the term ``veteran or spouse of a veteran'' means--
(A) a veteran (as defined in section 101102 of this
title);
(B) an individual who is eligible to participate in
the transition assistance program under section 1144 of
title 10;
(C) a member of a reserve component of the Armed
Forces named in section 10101 of title 10;
(D) the spouse of an individual described in
subparagraph (A), (B), or (C); and
(E) the surviving spouse (as defined in section 101
of title 38) of an individual described in subparagraph
(A), (B), or (C) who died while serving on active duty
or as a result of a disability that is service-
connected (as defined in that section).
(2) Guarantee fee waiver.--The Administrator shall not
collect a guarantee fee described in section 203111 of this
title in connection with a loan made under this section to a
veteran or spouse of a veteran on or after October 1, 2015.
(3) Exception.--If the President's budget for a fiscal year
submitted to Congress pursuant to section 1105(a) of title 31
includes a cost for the program established under this section
that is above zero, paragraph (2) shall not apply to loans made
during the fiscal year.
(h) Recovery Opportunity Loans.--
(1) In general.--During the 5-year period beginning on the
date on which the President declares a major disaster, the
Administrator may guarantee an express loan to a small business
concern located in a disaster area in accordance with this
subsection.
(2) Maximums.--For a loan guaranteed under paragraph (1)--
(A) the maximum loan amount is $150,000; and
(B) the guarantee rate shall be not more than 85
percent.
(3) Overall cap.--A loan guaranteed under paragraph (1) shall
not be counted in determining the amount of loans made to a
borrower for purposes of subsection (d).
(4) Operations.--A small business concern receiving a loan
guaranteed under paragraph (1) shall certify that the small
business concern was in operation on the date on which the
applicable major disaster occurred as a condition of receiving
the loan.
(5) Repayment ability.--A loan guaranteed under paragraph (1)
may be made only to a small business concern that demonstrates,
to the satisfaction of the Administrator, sufficient capacity
to repay the loan.
(6) Timing of payment of guarantees.--
(A) In general.--Not later than 90 days after the
date on which a request for purchase is filed with the
Administrator, the Administrator shall determine
whether to pay the guaranteed portion of the loan.
(B) Recapture.--Notwithstanding any other provision
of law, unless there is a subsequent finding of fraud
by a court of competent jurisdiction relating to a loan
guaranteed under paragraph (1), on and after the date
that is 6 months after the date on which the
Administrator determines to pay the guaranteed portion
of the loan, the Administrator shall not attempt to
recapture the paid guarantee.
(7) Fees.--
(A) In general.--Unless the Administrator waives the
guarantee fee that would otherwise be collected by the
Administrator under section 203111 of this title for a
loan guaranteed under paragraph (1), and except as
provided in subparagraph (B), the guarantee fee for the
loan shall be equal to the guarantee fee that the
Administrator would collect if the guarantee rate for
the loan were 50 percent.
(B) Exception.--Subparagraph (A) shall not apply if--
(i) the cost of carrying out the general
business loan program in a fiscal year is more
than zero; and
(ii) that cost is directly attributable to
the cost of guaranteeing loans under paragraph
(1).
(8) Regulations.--Not later than 270 days after November 25,
2015, the Administrator shall promulgate regulations to carry
out this subsection.
Sec. 203121. Loan application preparation and loan servicing by
qualified development companies
Notwithstanding any other provision of law, a qualified development
company (as defined in section 331101 of this title) may--
(1) prepare applications for deferred participation loans
under the general business loan program; and
(2) service loans under the general business loan program and
charge a reasonable fee for servicing the loans.
Sec. 203122. Increased veteran/reservist participation program
(a) Definitions.--In this section:
(1) Cost.--The term ``cost'' has the meaning given the term
in section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a).
(2) Pilot program.--The term ``pilot program'' means the
pilot program established under subsection (b).
(3) Veteran/reservist participation loan.--The term
``veteran/reservist participation loan'' means a loan made
under the general business loan program to a small business
concern owned and controlled by veterans or by reservists.
(b) Establishment.--The Administrator shall establish and carry out a
pilot program under which the Administrator shall reduce the fees for
veteran/reservist participation loans.
(c) Duration.--The pilot program shall terminate at the end of the 2d
full fiscal year after the date on which the Administrator establishes
the pilot program.
(d) Maximum participation.--A veteran/reservist participation loan
shall include the maximum participation levels by the Administrator
permitted for loans made under the general business loan program.
(e) Fees.--
(1) In general.--The fee on a veteran/reservist participation
loan shall be equal to 50 percent of the fee otherwise
applicable to that loan under section 203111 of this title.
(2) Waiver.--The Administrator may waive paragraph (1) for a
fiscal year if--
(A) for the fiscal year before that fiscal year, the
annual estimated rate of default of veteran/reservist
participation loans exceeds that of loans made under
the general business loan program that are not veteran/
reservist participation loans;
(B) the cost to the Administrator of making loans
under the general business loan program is greater than
zero and the cost is directly attributable to the cost
of making veteran/reservist participation loans; and
(C) no additional source of revenue authority is
available to reduce the cost of making loans under the
general business loan program to zero.
(3) Effect of waiver.--If the Administrator waives the
reduction of fees under paragraph (2), the Administrator--
(A) shall not assess or collect fees in an amount
greater than necessary to ensure that the cost of the
general business loan program is not greater than zero;
and
(B) shall reinstate the fee reductions under
paragraph (1) when the conditions in paragraph (2) no
longer apply.
(4) No increase of fees.--The Administrator shall not
increase the fees under 203111 of this title on loans made
under the general business loan program that are not veteran/
reservist participation loans as a direct result of the pilot
program.
(f) GAO Report.--
(1) In general.--Not later than 1 year after the date on
which the pilot program terminates, the Comptroller General
shall submit to the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate a report on the pilot program.
(2) Contents.--The report under paragraph (1) shall include--
(A) the number of veteran/reservist participation
loans for which fees were reduced under the pilot
program;
(B) a description of the impact of the pilot program
on the general business loan program;
(C) an evaluation of the efficacy and potential fraud
and abuse of the pilot program; and
(D) recommendations for improving the pilot program.
Chapter 205--Special Purpose Loans
Sec.
205101. Applicability of chapter 203.
205102. Residential or commercial construction or rehabilitation for
sale.
205103. The disabled.
205104. Unemployed or low-income individuals.
205105. Energy measures.
205106. Pollution control facilities.
205107. Certified development companies.
205108. Export working capital program.
205109. Qualified employee trusts.
205110. International trade.
205111. Business development.
205112. Closure of defense installations; termination of defense
programs; veterans and certain other individuals associated
with defense.
205113. Loans for energy efficient technologies.
205114. Export express program.
Sec. 205101. Applicability of chapter 203
The provisions of chapter 203 apply to this chapter except to the
extent that any such provision is inconsistent with a provision of this
chapter.
Sec. 205102. Residential or commercial construction or rehabilitation
for sale
(a) In General.--The Administrator may provide a loan under the
general business loan program to finance residential or commercial
construction or rehabilitation for sale.
(b) Limitation.--A loan under subsection (a) shall not be used
primarily for the acquisition of land.
Sec. 205103. The disabled
The Administrator may provide a guaranteed loan under the general
business loan program to assist a public or private organization for
the disabled or a disabled individual (including a service-disabled
veteran) in establishing, acquiring, or operating a small business
concern.
Sec. 205104. Unemployed or low-income individuals
(a) Implementation.--The general business loan program shall be used
to--
(1) assist in the establishment, preservation, and
strengthening of small business concerns and improve the
managerial skills employed in small business concerns, with
special attention to, and particular emphasis on the
preservation or establishment of, small business concerns that
are--
(A) located in urban or rural areas with high
proportions of unemployed or low-income individuals; or
(B) owned by low-income individuals; and
(2) mobilize for those objectives private as well as public
managerial skills and resources.
(b) Loan Authority.--The Administrator may provide a loan under the
general business loan program to a small business concern or to a
qualified person seeking to establish a small business concern if the
Administrator determines that providing the loan will further the
purposes stated in subsection (a).
Sec. 205105. Energy measures
(a) In General.--The Administrator may provide a loan under the
general business loan program to provide assistance (including startup
assistance) to a small business concern to enable the small business
concern to design architecturally, or engineer, manufacture,
distribute, market, install, or service, an energy measure.
(b) Limitation.--The proceeds of a loan under subsection (a) shall
not be used primarily for research and development.
Sec. 205106. Pollution control facilities
(a) In General.--The Administrator may provide a deferred
participation loan under the general business loan program to finance
the planning, design, or installation of a pollution control facility
for the purposes specified in section 404 of the Small Business
Investment Act of 1958 (15 U.S.C. 694-1), as in effect before the date
of repeal of that section.
(b) Limit on Amount.--A loan under subsection (a) may not result in a
total amount outstanding and committed (on a deferred basis) to a
borrower under the general business loan program of more than
$1,000,000.
Sec. 205107. Certified development companies
The Administrator may provide financing under the general business
loan program to certified development companies for the purposes of,
and subject to the restrictions in, the certified development company
program.
Sec. 205108. Export working capital program
(a) In General.--Under a program to be known as the export working
capital program, the Administrator may provide an extension of credit,
standby letter of credit, revolving line of credit for export purposes,
or other financing to enable a small business concern (including a
small business export trading company and a small business export
management company) to develop a foreign market.
(b) Rate of Interest.--A bank or participating lending institution
may establish such a rate of interest on a financing under subsection
(a) as is legal and reasonable.
(c) Amount.--The amount of a financing under subsection (a) shall be
not more than $5,000,000.
(d) Fees.--
(1) In general.--For a financing under subsection (a), the
Administrator shall collect the fee assessed under section
203114 of this title not more frequently than once each year.
(2) Untapped credit.--The Administrator shall not assess a
fee on capital that is not accessed by the small business
concern.
(e) Considerations.--When considering an application for financing
under subsection (a), the Administrator shall give weight to export-
related benefits, including--
(1) the opening of new markets for United States goods and
services abroad; and
(2) encouragement of the involvement of small business
concerns (including agricultural concerns) in the export
market.
(f) Marketing.--The Administrator shall aggressively market the
export working capital program to small business concerns.
Sec. 205109. Qualified employee trusts
(a) Definition of Qualified Employee Trust.--In this section:
(1) Trust maintained by small business concern.--The term
``qualified employee trust'', with respect to a small business
concern, means a trust--
(A) that forms part of an employee stock ownership
plan (as defined in section 4975(e) of the Internal
Revenue Code of 1986 (26 U.S.C. 4975(e)) that--
(i) is maintained by the small business
concern; and
(ii) 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) of the Internal Revenue Code of 1986
(26 U.S.C. 4975(e)) that are allocated to the
account of the participant are to be exercised
with respect to a corporate matter that (by law
or charter) must be decided by a majority vote
of outstanding common shares voted; and
(B) the trustee of which enters into an agreement
with the Administrator that is binding on the trust and
on the small business concern and provides that--
(i) a loan guaranteed under the general
business loan program shall be used solely for
the purchase of qualifying employer securities
of the small business concern;
(ii) all funds acquired by the small business
concern in the purchase shall be used by the
small business concern solely for the purposes
for which the loan was guaranteed;
(iii) the small business concern will provide
such funds as are necessary for the timely
repayment of the loan, and the property of the
small business concern shall be available as
security for repayment of the loan; and
(iv) all qualifying employer securities
acquired by the trust in the purchase shall be
allocated to the accounts of participants in
the plan who are entitled to share in the
allocation, and each participant has a
nonforfeitable right, not later than the date
on which the loan is repaid, to all such
qualifying employer securities that are
allocated to the participant's account.
(2) Trust maintained by employee organization.--A trust
maintained by an employee organization may be treated as a
qualified employee trust with respect to a small business
concern in accordance with regulations prescribed under
subsection (f).
(b) In General.--The Administrator may guarantee a loan under the
general business loan program to a qualified employee trust with
respect to a small business concern, on the same basis as if the
qualified employee trust were the same entity as the small business
concern, for the purpose of purchasing stock of the small business
concern under a plan approved by the Administrator that, when carried
out, results in the qualified employee trust owning at least 51 percent
of the stock of the small business concern.
(c) Plan.--
(1) Submission with application.--A plan requiring approval
under subsection (b) shall be submitted to the Administrator by
the trustee of the qualified employee trust with the
application for a loan guarantee.
(2) Agreement.--The plan shall include an agreement with the
Administrator that is binding on the qualified employee trust
and on the small business concern and provides that--
(A) not later than the date on which the loan
guaranteed under subsection (b) is repaid (or as soon
after that date as is consistent with the requirements
of section 401(a) of the Internal Revenue Code of 1986
(26 U.S.C. 401(a))), at least 51 percent of the total
stock of the small business concern shall be allocated
to the accounts of at least 51 percent of the employees
of the small business concern who are entitled to share
in the allocation;
(B) there will be periodic reviews of the role in the
management of the small business concern of employees
to whose accounts stock is allocated; and
(C) there will be adequate management to ensure
management expertise and continuity.
(d) Criteria.--
(1) In general.--Except as provided in paragraph (2), in
determining whether to guarantee a loan under this section, the
Administrator shall not use the individual business experience
or personal assets of employee-owners as criteria.
(2) Exception.--To the extent that any employee-owner assumes
managerial responsibilities, the Administrator may consider the
business expertise of that employee-owner.
(e) Treatment of Corporation as Small Business Concern.--For purposes
of this section, a corporation that is controlled by any other person
shall be treated as a small business concern if the corporation would,
after the plan under subsection (c) is carried out, be treated as a
small business concern.
(f) Regulations Relating To Treatment of a Trust Maintained by an
Employee Organization.--The Administrator may prescribe regulations
under which a trust maintained by an employee organization may be
treated as a qualified employee trust with respect to a small business
concern if--
(1) the employee organization represents at least 51 percent
of the employees of the small business concern;
(2) the small business concern maintains a plan that--
(A) is an employee benefit plan that is designed to
invest primarily in qualifying employer securities (as
defined in section 4975(e) of the Internal Revenue Code
of 1986 (26 U.S.C. 4975(e)));
(B) 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 that
are allocated to the account of the participant are to
be exercised with respect to a corporate matter that
(by law or charter) must be decided by a majority vote
of the outstanding common shares voted;
(C) provides that each participant who is entitled to
distribution from the plan has a right, in the case of
qualifying employer securities that are not readily
tradable on an established market, to require that the
small business concern repurchase the securities under
a fair valuation formula; and
(D) meets such other requirements (similar to
requirements applicable to employee stock ownership
plans (as defined in section 4975(e) of the Internal
Revenue Code of 1986 (26 U.S.C. 4975(e)))) as the
Administrator may prescribe; and
(3) in the case of a loan guarantee under the general
business loan program, the employee organization enters into an
agreement with the Administrator that is described in
subsection (a)(1)(B).
(g) Reports.--The Administrator shall--
(1) compile a separate list of applications for assistance
under this section, indicating which applications are accepted
and which denied; and
(2) periodically submit to Congress a report on the status of
employee-owned firms assisted by the Administrator.
Sec. 205110. International trade
(a) In General.--If the Administrator determines that a loan
guaranteed under the general business loan program will allow an
eligible small business concern that is engaged in or adversely
affected by international trade to improve its competitive position,
the Administrator may provide a loan guarantee to assist the small
business concern--
(1) in the financing of the acquisition, construction,
renovation, modernization, improvement, or expansion of
productive facilities or equipment to be used in the United
States in the production of a good or service involved in
international trade;
(2) in the refinancing of existing indebtedness that is not
structured with reasonable terms and conditions, including any
debt that qualifies for refinancing under any other provision
of this division; or
(3) by providing working capital.
(b) Security.--
(1) In general.--Except as provided in paragraph (2), a loan
under this section shall be secured by a 1st lien position or
1st mortgage on the property or equipment financed by the loan
or on other assets of the small business concern.
(2) Exception.--A loan under this section may be secured by a
2d lien position on the property or equipment financed by the
loan or on other assets of the small business concern if the
Administrator determines that the lien provides adequate
assurance of the payment of the loan.
(c) Engagement in International Trade.--For purposes of this section,
a small business concern shall be considered to be engaged in
international trade if, as determined by the Administrator, the small
business concern is in a position to expand existing export markets or
develop new export markets.
(d) Adverse Effect of International Trade.--For purposes of this
section, a small business concern shall be considered to be adversely
affected by international trade if, as determined by the Administrator,
the small business concern--
(1) is confronting increased competition with foreign firms
in the relevant market; and
(2) is injured by such competition.
(e) Findings by Certain Federal Agencies.--For purposes of subsection
(d)(2), the Administrator shall accept any finding of injury by the
International Trade Commission or any finding of injury by the
Secretary of Commerce under chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2341 et seq.).
(f) List of export finance lenders.--
(1) Publication.--The Administrator shall publish an annual
list of the banks and participating lending institutions that,
during the 1-year period ending on the date of publication of
the list, have made loans guaranteed by the Administrator
under--
(A) this section;
(B) section 205108 of this title; or
(C) section 205114 of this title.
(2) Availability.--The Administrator shall--
(A) post the list published under paragraph (1) on
the SBA website; and
(B) make the list available, on request, at each SBA
district office.
Sec. 205111. Business development
(a) In General.--The Administrator may make a loan under the general
business loan program to a small business concern that is eligible for
assistance under the business development program.
(b) Requirements.--Assistance may be provided under subsection (a) if
the Administrator determines that--
(1) the type and amount of assistance requested by a small
business concern is not otherwise available on reasonable terms
from other sources;
(2) with the assistance, the small business concern has a
reasonable prospect for operating soundly and profitably within
a reasonable period of time;
(3) the proceeds of the assistance will be used within a
reasonable time--
(A) for plant construction, conversion, or expansion,
including the acquisition of equipment, facilities,
machinery, supplies, or material; or
(B) to supply the small business 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 ensure a
well-balanced national economy; and
(4) the assistance is of such sound value as reasonably to
ensure that the terms under which the assistance is provided
will not be breached by the small business concern.
(c) Limit on Amount.--
(1) In general.--No loan shall be made under this section if
the total amount outstanding and committed (on a deferred
basis, through a participation on an immediate basis, or
directly) to the borrower under the general business loan
program would exceed $750,000.
(2) Amount of participation.--Subject to paragraph (1), in an
agreement to participate in a loan 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) Rate of Interest.--The rate of interest on a financing made on a
deferred (guaranteed) basis shall be an amount that is legal and
reasonable.
(e) Limitations.--
(1) In general.--A financing under this section shall be
subject to the limitations stated in this subsection.
(2) Immediate financing.--No immediate participation may be
purchased unless it is shown that a deferred participation is
not available.
(3) Direct financing.--No direct financing may be made unless
it is shown that a participation is unavailable.
(f) Secured Debt Instrument.--A direct loan or the Administrator's
share of an immediate participation loan under this section shall be
any secured debt instrument--
(1) that is subordinated by its terms to all other borrowings
of the issuer;
(2) the rate of interest on which does 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 0.125 percent;
(3) the term of which is not more than 25 years;
(4) the principal on which is amortized at such a rate as the
Administrator considers appropriate; and
(5) the interest on which is payable not less often than
annually.
Sec. 205112. Closure of defense installations; termination of defense
programs; veterans and certain other individuals
associated with defense
(a) Definition of Qualified Individual.--In this section, the term
``qualified individual'' means--
(1) a member of the Armed Forces honorably discharged from
active duty involuntarily or under a program providing bonuses
or other inducements to encourage voluntary separation or early
retirement;
(2) a civilian employee of the Department of Defense
involuntarily separated from Federal service or retired under a
program offering inducements to encourage early retirement; or
(3) an employee of a prime contractor, subcontractor at any
tier, or supplier at any tier of a Department of Defense
program whose employment is involuntarily terminated (or
voluntarily terminated under a program offering inducements to
encourage voluntary separation or early retirement) due to the
termination or substantial reduction of a Department of Defense
program.
(b) Loans.--The Administrator may make a loan on a guaranteed basis
under the general business loan program--
(1) to a small business concern that has been (or can
reasonably be expected to be) detrimentally affected by--
(A) the closure or substantial reduction of a
Department of Defense installation; or
(B) the termination or substantial reduction of a
Department of Defense program on which the small
business concern was a prime contractor, subcontractor
at any tier, or supplier at any tier; or
(2) to a qualified individual or a veteran seeking to
establish (or acquire) and operate a small business concern.
(c) Resolution of Doubt.--Recognizing that greater risk may be
associated with a loan to a small business concern described in
subsection (b)(1), in making a determination regarding the sound value
of the proposed loan under section 203104, any reasonable doubt
concerning the small business concern's proposed business plan for
transition to nondefense-related markets shall be resolved in favor of
the loan applicant.
(d) Amounts of Loans.--Loans under this section shall be authorized
in such amounts as are provided in advance in appropriation Acts for
the purposes of loans under this section.
(e) Job Creation and Community Benefit.--In providing assistance
under this section, the Administrator shall develop procedures to
ensure, to the maximum extent practicable, that the assistance is used
for projects that--
(1) have the greatest potential for--
(A) creating new jobs for individuals whose
employment is involuntarily terminated due to
reductions in Federal defense expenditures; or
(B) preventing the loss of jobs by employees of small
business concerns described in subsection (b)(1); and
(2) have substantial potential for stimulating new economic
activity in communities most affected by reductions in Federal
defense expenditures.
Sec. 205113. Loans for energy efficient technologies
(a) Definitions.--In this section:
(1) Cost.--The term ``cost'' has the meaning given the term
in section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a).
(2) Covered energy efficiency loan.--The term ``covered
energy efficiency loan'' means a loan--
(A) made under the general business loan program; and
(B) the proceeds of which are used to--
(i) purchase energy efficient designs,
equipment, or fixtures; or
(ii) reduce the energy consumption of the
borrower by 10 percent or more.
(3) Pilot program.--The term ``pilot program'' means the
pilot program established under subsection (b).
(b) Establishment.--The Administrator shall establish and carry out a
pilot program under which the Administrator shall reduce the fees for
covered energy efficiency loans.
(c) Duration.--The pilot program shall terminate at the end of the 2d
full fiscal year after the date on which the Administrator establishes
the pilot program.
(d) Maximum participation.--A covered energy efficiency loan shall
include the maximum participation levels by the Administrator permitted
for loans made under this division.
(e) Fees.--
(1) In general.--The fee on a covered energy efficiency loan
shall be equal to 50 percent of the fee otherwise applicable to
that loan under 203111 of this title.
(2) Waiver.--The Administrator may waive paragraph (1) for a
fiscal year if--
(A) for the fiscal year before that fiscal year, the
annual rate of default of covered energy efficiency
loans exceeds that of loans made under this division
that are not covered energy efficiency loans;
(B) the cost to the Administrator of making loans
under this division--
(i) is greater than zero; and
(ii) is directly attributable to the cost of
making covered energy efficiency loans; and
(C) no additional sources of revenue authority are
available to reduce the cost of making loans under this
division to zero.
(3) Effect of waiver.--If the Administrator waives the
reduction of fees under paragraph (2), the Administrator--
(A) shall not assess or collect fees in an amount
greater than necessary to ensure that the cost of the
program under this division is not greater than zero;
and
(B) shall reinstate the fee reductions under
paragraph (1) when the conditions in paragraph (2) no
longer apply.
(4) No increase of fees.--The Administrator shall not
increase the fees under section 203111 of this title on loans
made under this division that are not covered energy efficiency
loans as a direct result of the pilot program.
(f) GAO Report.--
(1) In general.--Not later than 1 year after the date on
which the pilot program terminates, the Comptroller General
shall submit to the Committee on Small Business of the House of
Representatives and the Committee on Small Business and
Entrepreneurship of the Senate a report on the pilot program.
(2) Contents.--The report under paragraph (1) shall include--
(A) the number of covered energy efficiency loans for
which fees were reduced under the pilot program;
(B) a description of the energy efficiency savings
with the pilot program;
(C) a description of the impact of the pilot program
on the program under this division;
(D) an evaluation of the efficacy and potential fraud
and abuse of the pilot program; and
(E) recommendations for improving the pilot program.
Sec. 205114. Export express program
(a) In General.--The Administrator may guarantee the timely payment
of an express loan to a small business concern made for an export
development activity.
(b) Level of Participation.--
(1) Maximum amount.--The maximum amount of an express loan
guaranteed under this section shall be $500,000.
(2) Percentage.--For an express loan guaranteed under this
section, the Administrator shall guarantee--
(A) 90 percent of a loan that is not more than
$350,000; and
(B) 75 percent of a loan that is more than $350,000
and not more than $500,000.
Chapter 207--Small Business Lending Companies and Non-Federally
Regulated Lenders
Sec.
207101. Authority to regulate.
207102. Capital directive.
207103. Civil action.
207104. Revocation or suspension of loan authority; cease and desist
orders.
207105. Removal or suspension of management officials.
207106. Appointment of receiver.
207107. Taking of possession of assets.
207108. Reports.
Sec. 207101. Authority to regulate
The Administrator--
(1) may supervise the safety and soundness of small business
lending companies and non-federally regulated lenders;
(2) in accordance with the purposes of this subtitle, may--
(A) regulate small business lending companies;
(B) set capital standards for small business lending
companies;
(C) examine small business lending companies; and
(D) enforce laws governing small business lending
companies; and
(3) in accordance with the purposes of this subtitle, may--
(A) regulate non-federally regulated lenders;
(B) examine non-federally regulated lenders; and
(C) enforce laws governing the lending activities of
non-federally regulated lenders under the general
business loan program.
Sec. 207102. Capital directive
(a) In General.--If the Administrator determines that a small
business lending company is being operated in an imprudent manner, the
Administrator may, in addition to any other action authorized by law,
issue a directive to the small business lending company to increase
capital to such level as the Administrator determines will result in
the safe and sound operation of the small business lending company.
(b) Limit on Delegability.--The Administrator may not delegate the
authority granted under subsection (a) except to an Associate Deputy
Administrator.
(c) Regulations.--The Administrator shall issue regulations outlining
the conditions under which the Administrator may determine the level of
capital under subsection (a).
Sec. 207103. Civil action
If a small business lending company violates this subtitle or
subtitle I, the Administrator may bring a civil action in United States
district court to terminate the rights, privileges, and franchises of
the small business lending company under this subtitle or subtitle I.
Sec. 207104. Revocation or suspension of loan authority; cease and
desist orders
(a) Revocation or Suspension of Loan Authority.--
(1) In general.--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 under the general business loan program--
(A) for false statements knowingly made in any
written submission required under this subtitle;
(B) for omission of a material fact from any written
submission required under this subtitle;
(C) for willful or repeated violation of this
subtitle;
(D) for willful or repeated violation of any
condition imposed by the Administrator with respect to
any application, request, or agreement under this
subtitle; or
(E) for violation of any cease and desist order of
the Administrator under this chapter.
(2) Limitation on delegability.--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 the action.
(3) Procedure.--
(A) In general.--Except as provided in subparagraph
(B), the Administrator may revoke or suspend authority
under paragraph (1) only after a hearing under
subsection (c).
(B) Suspension before hearing.--
(i) In general.--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
under subsection (c).
(ii) Hearing.--If the Administrator issues a
suspension under clause (i), the Administrator
shall, within 2 business days after issuance of
the suspension, follow the procedure specified
in subsection (c).
(C) Action by the administrator after hearing by
administrative law judge.--
(i) In general.--A revocation or suspension
under paragraph (1) shall be made by the
Administrator, except that the Administrator
shall delegate to an administrative law judge
appointed under section 3105 of title 5 the
authority to conduct any hearing required under
subsection (c).
(ii) Basis of decision.--The Administrator
shall base the decision to revoke or suspend on
the record of the hearing.
(4) Effective period of suspension.--A suspension under
paragraph (1) shall remain in effect until the Administrator
makes a decision under paragraph (3)(C) 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.
(5) Notification of borrowers.--On revocation of the
authority of a small business lending company or non-federally
regulated lender under paragraph (1), the small business
lending company or non-federally regulated lender shall, and
the Administrator may, notify borrowers of the revocation and
of the appointment of a new entity to service the borrowers'
loans.
(b) Cease and Desist Orders.--
(1) In general.--If a small business lending company, a non-
federally regulated lender, or other person violates this
subtitle or subtitle I or is engaging or is about to engage in
any act or practice that constitutes or will constitute a
violation of this subtitle or subtitle I, the Administrator,
after an opportunity for hearing under subsection (c), may
order that--
(A) the small business lending company, non-federally
regulated lender, or other person cease and desist from
engaging in the act or practice or in any failure to
act;
(B) the small business lending company, non-federally
regulated lender, or other person take such action or
to refrain from such action as the Administrator
considers necessary to ensure compliance with this
subtitle; or
(C) the authority of the small business lending
company or non-federally regulated lender to lend be
suspended under subsection (a).
(2) Limitation on delegability.--The Administrator may
delegate the authority under paragraph (1) only to the Deputy
Administrator and only if the Administrator is unavailable to
take the action.
(3) Order before hearing.--
(A) In general.--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 under subsection (c).
(B) Hearing.--If the Administrator issues a cease and
desist order under subparagraph (A), the Administrator
shall within 2 business days follow the procedures
specified in subsection (c).
(c) Procedure.--
(1) Order to show cause.--
(A) In general.--Before revoking or suspending
authority under subsection (a) or issuing a cease and
desist order under subsection (b), the Administrator
shall serve an order to show cause on 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.
(B) Contents.--An order under subparagraph (A)
shall--
(i) 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
(ii) state that a hearing will be held before
an administrative law judge at a time and place
stated in the order.
(2) Hearing.--A hearing shall be conducted under sections
554, 556, and 557 of title 5.
(3) Order of revocation or suspension; cease and desist
order.--
(A) In general.--If, after hearing or a waiver of
hearing, 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 the order.
(B) Contents.--An order under subparagraph (A)
shall--
(i) include a statement of the findings of
the Administrator and the grounds and reasons
for the findings; and
(ii) specify the effective date of the order.
(C) Service.--The Administrator shall cause an order
under subparagraph (A) to be served on the small
business lending company, non-federally regulated
lender, or other person that is subject to the order.
(4) Witnesses.--A witness summoned before the Administrator
shall be paid by the party at whose instance the witness is
called the same fees and mileage that are paid witnesses in the
courts of the United States.
(d) Final Agency Action.--An order under subsection (c)(3) is final
agency action for purposes of chapter 7 of title 5.
(e) Judicial Review.--An adversely affected party shall have 20 days
from the date of issuance of an order under subsection (c)(3) to seek
judicial review in United States district court.
Sec. 207105. Removal or suspension of management officials
(a) Definition of Management Official.--In this section, the term
``management official'' means an officer, director, general partner,
manager, employee, agent, or other participant in the management of the
affairs of a small business lending company's or non-federally
regulated lender's activities under the general business loan program.
(b) Removal of Management Official.--
(1) Notice.--The Administrator may serve on a management
official a written notice of the Administrator's intention to
remove that management official if, in the opinion of the
Administrator, the management official--
(A) willfully and knowingly commits a substantial
violation of--
(i) this subtitle or subtitle I (including
any regulation issued under this subtitle or
subtitle I);
(ii) a final cease and desist order under
this subtitle; or
(iii) any agreement under this subtitle by--
(I) the management official; or
(II) the small business lending
company or non-federally regulated
lender in which the management official
is a participant; or
(B) willfully and knowingly commits a substantial
breach of a fiduciary duty of that participant as a
management official, if the violation or breach of
fiduciary duty is one involving personal dishonesty on
the part of the management official.
(2) Contents.--A notice under paragraph (1) shall--
(A) contain a statement of the facts constituting
grounds for the notice; and
(B) state a time and place at which a hearing under
paragraph (3) will be held on the notice.
(3) Hearing.--
(A) Timing.--A hearing under sections 554, 556, and
557 of title 5 shall be held not earlier than 30 nor
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, for good cause;
or
(ii) the Attorney General.
(B) Consent.--Unless the management official appears
at a hearing under this subsection in person or by an
authorized representative, the management official
shall be deemed to have consented to the issuance of an
order of removal under paragraph (1).
(4) Order of removal.--
(A) In general.--In the event of consent under
paragraph (3)(B), or if on the record made at a hearing
under this section, 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 considers
appropriate.
(B) Effectiveness.--An order under subparagraph (A)
shall--
(i) take effect 30 days after the date of
service on the subject small business lending
company or non-federally regulated lender and
the management official concerned (except in
the case of an order issued on consent as
described in paragraph (3)(B), which shall
become effective at the time specified in the
order); and
(ii) remain effective and enforceable, except
to such extent as the order is stayed,
modified, terminated, or set aside by action of
the Administrator or a court in accordance with
this chapter.
(c) Authority To Suspend or Prohibit Participation.--
(1) In general.--To protect a small business lending company,
a non-federally regulated lender, or the interests of SBA 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 non-federally regulated lender a management
official by written notice to that effect served on the
management official.
(2) Prohibited activities.--A suspension or prohibition under
paragraph (1) may prohibit the management official from making,
servicing, reviewing, approving, or liquidating any loan under
the general business loan program.
(3) Effectiveness.--A suspension or prohibition under
paragraph (1)--
(A) shall take effect on service of notice under
subsection (b); and
(B) unless stayed by a court in proceedings under
paragraph (4), shall remain in effect--
(i) pending the completion of the
administrative proceedings pursuant to a notice
of intention to remove served under subsection
(b); 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.
(4) Judicial review of suspension prior to hearing.--Not
later than 10 days after a management official is suspended or
prohibited from participation under paragraph (1), the
management official may apply to a United States 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 on the management official
under subsection (b).
(d) Authority To Suspend on Criminal Charges.--
(1) In general.--If a management official is charged in an
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 on
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 in which the management official is a
participant described in subsection (a).
(2) Effectiveness.--A suspension or prohibition under
paragraph (1) shall remain in effect until the information,
indictment, or complaint is finally disposed of, or until
terminated by the Administrator or by order of a United States
district court.
(3) Authority on conviction.--
(A) In general.--If a judgment of conviction with
respect to an offense described in paragraph (1) is
entered against a management official, at such time as
the judgment is not subject to further judicial review,
the Administrator may issue and serve on the management
official an order removing the management official,
effective on service of a copy of the order on the
small business lending company or non-federally
regulated lender in which the management official is a
participant described in subsection (a).
(B) Judgment not subject to further judicial
review.--For purposes of subparagraph (A), further
judicial review does not include the possibility of
review of a petition for a writ of habeas corpus.
(4) Authority on dismissal or other disposition.--A finding
of not guilty or other disposition of charges described in
paragraph (1) shall not preclude the Administrator from
instituting proceedings under section 207104 of this title.
(e) Notification to Small Business Lending Company or Non-federally
Regulated Lender.--A copy of a notice required to be served on a
management official under this chapter shall also be served on the
small business lending company or non-federally regulated lender in
which the management official is a participant described in subsection
(a).
(f) Decision.--After a hearing under this section, and not later than
30 days after the Administrator notifies the parties that the case has
been submitted for final decision, the Administrator shall--
(1) render a decision in the matter (which shall include
findings of fact on which its decision is predicated); and
(2) issue and cause to be served on each party to the
proceeding an order or orders consistent with this chapter.
(g) Final Agency Action.--A decision under subsection (f) shall
constitute final agency action for purposes of chapter 7 of title 5.
(h) Judicial Review.--An adversely affected party shall have 20 days
from the date of issuance of the order to seek judicial review in
United States district court.
Sec. 207106. Appointment of receiver
(a) In General.--In a civil action under this division, the court
may--
(1) take exclusive jurisdiction over a small business lending
company or non-federally regulated lender; and
(2) appoint a receiver to hold and administer the assets of
the small business lending company or non-federally regulated
lender.
(b) Appointment of Administrator.--On request of the Administrator,
the court may appoint the Administrator as a receiver under subsection
(a).
Sec. 207107. Taking of possession of assets
(a) Taking of Possession of Loan Portfolio.--If a small business
lending company or 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 the loans to a 3d party by means of a receiver appointed under
section 207106 of this title.
(b) Taking of Possession of Servicing Activities.--If a small
business lending company or 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 the servicing rights to a 3d party by means
of a receiver appointed under section 207106 of this title.
Sec. 207108. Reports
(a) Civil Penalty for Failure To File.--
(1) In general.--A small business lending company or non-
federally regulated lender that violates a regulation or
written directive issued by the Administrator regarding the
filing of a regular or special report shall pay to the United
States a civil penalty of not more than $5,000 for each day of
the continuance of the failure to file the report, unless it is
shown that the violation is due to reasonable cause and not due
to willful neglect.
(2) Enforcement.--A civil penalty under paragraph (1) may be
enforced in a civil action brought by the Administrator.
(3) Inapplicability to certain small business lending
companies.--Paragraph (1) does not apply to an affiliate of a
small business lending company that procures at least 10
percent of its annual purchasing requirements from small
manufacturers.
(b) Exemption.--
(1) In general.--If the Administrator determines that
granting an exemption would not be inconsistent with the public
interest or the protection of SBA, the Administrator may exempt
a small business lending company or non-federally regulated
lender from subsection (a)--
(A) in whole or in part; and
(B) on such terms and conditions and for such period
of time as the Administrator considers necessary and
appropriate.
(2) Procedure.--The Administrator may grant an exemption
under paragraph (1)--
(A) by regulation prescribed after an opportunity for
notice and comment; or
(B) on application of an interested party, at any
time previous to a violation described in subsection
(a), by order, after notice and opportunity for hearing
under sections 554, 556, and 557 of title 5.
(c) Alternative Requirements.--The Administrator may for purposes of
this section make any alternative requirement that the Administrator
considers to be appropriate to a situation.
Division C--Intermediary Lending Pilot Program
Chapter 211--Intermediary Lending Pilot Program
Sec.
211101. Definitions.
211102. Establishment.
211103. Purposes.
211104. Loans to eligible intermediaries.
211105. Loans to small business concerns.
211106. Regulations.
211107. Availability of funds.
211108. Termination of authority.
Sec. 211101. Definitions
In this chapter:
(1) Eligible intermediary.--
(A) In general.--The term ``eligible intermediary''
means a private, nonprofit entity that--
(i) seeks or has been awarded a loan from the
Administrator to make loans to small business
concerns under this chapter; and
(ii) has not less than 1 year of experience
making loans to startup, newly established, or
growing small business concerns.
(B) Inclusions.--The term ``eligible intermediary''
includes--
(i) a private, nonprofit community
development corporation;
(ii) a consortium of private, nonprofit
organizations or nonprofit community
development corporations; and
(iii) an agency of or nonprofit entity
established by a Native American Tribal
Government.
(2) Program.--The term ``program'' means the small business
intermediary lending pilot program established under section
211102 of this title.
Sec. 211102. Establishment
There is established a 3-year small business intermediary lending
pilot program under which the Administrator may make direct loans to
eligible intermediaries for the purpose of making loans to startup,
newly established, and growing small business concerns.
Sec. 211103. Purposes
The purposes of the program are--
(1) to assist small business concerns in areas suffering from
a lack of credit due to poor economic conditions or changes in
the financial market; and
(2) to establish a loan program under which the Administrator
may provide loans to eligible intermediaries to enable the
eligible intermediaries to provide loans to startup, newly
established, and growing small business concerns for working
capital, real estate, or the acquisition of materials,
supplies, or equipment.
Sec. 211104. Loans to eligible intermediaries
(a) Application.--An eligible intermediary desiring a loan under the
program shall submit an application to the Administrator that
describes--
(1) the type of small business concerns to be assisted;
(2) the size and range of loans to be made;
(3) the interest rate and terms of loans to be made;
(4) the geographic area to be served and the economic,
poverty, and unemployment characteristics of the area;
(5) the status of small business concerns in the area to be
served and an analysis of the availability of credit; and
(6) the qualifications of the applicant to carry out this
chapter.
(b) Loan Limit.--No loan may be made to an eligible intermediary
under the program if the total amount outstanding and committed to the
eligible intermediary by the Administrator would, as a result of the
loan, exceed $1,000,000 during the participation of the eligible
intermediary in the program.
(c) Loan Term.--A loan made by the Administrator under the program
shall be for a term of 20 years.
(d) Interest Rate.--A loan made by the Administrator to an eligible
intermediary under the program shall bear an annual interest rate equal
to 1.00 percent.
(e) No Fee or Collateral.--The Administrator shall not charge any fee
or require collateral with respect to any loan made to an eligible
intermediary under the program.
(f) Delayed Payment.--The Administrator shall not require the payment
of principal or interest on a loan made to an eligible intermediary
under the program during the 2-year period beginning on the date of the
initial disbursement of funds under the loan.
Sec. 211105. Loans to small business concerns
(a) In General.--The Administrator, through an eligible intermediary,
shall make loans to startup, newly established, and growing small
business concerns for working capital, real estate, and the acquisition
of materials, supplies, furniture, fixtures, and equipment.
(b) Maximum Amount.--An eligible intermediary shall not make a loan
under the program of more than $200,000 to any 1 small business
concern.
(c) Interest rate.--A loan made by an eligible intermediary to a
small business concern under the program--
(1) may have a fixed or a variable interest rate; and
(2) shall bear an interest rate specified by the eligible
intermediary in the application of the eligible intermediary
for a loan under the program.
(d) Review Restrictions.--The Administrator shall not review
individual loans made by an eligible intermediary to a small business
concern before approval of the loan by the eligible intermediary.
Sec. 211106. Regulations
The Administrator shall issue regulations to carry out this chapter.
Sec. 211107. Availability of funds
Any amount provided to the Administrator for the purposes of carrying
out this chapter shall remain available until expended.
Sec. 211108. Termination of authority
The authority of the Administrator to make loans under the program
shall terminate on September 27, 2013.
Division D--Microloan Program
Chapter 213--Microloan Program
Sec.
213101. Definitions.
213102. Establishment of microloan program.
213103. Purposes of microloan program.
213104. Eligibility for participation.
213105. Loans to intermediaries; loans by intermediaries to small
business concerns.
213106. Marketing, management, and technical assistance grants to
intermediaries.
213107. Private sector borrowing technical assistance grants.
213108. Grants for management, marketing, technical assistance, and
related services.
Sec. 213101. Definitions
In this chapter:
(1) Intermediary.--The term ``intermediary'' means--
(A) a private, nonprofit entity;
(B) a private, nonprofit community development
corporation;
(C) a consortium of private, nonprofit organizations
or nonprofit community development corporations;
(D) a quasi-governmental economic development entity
(such as a planning and development district), other
than a State, county, or municipal government (or any
agency of a State, county, or municipal government), in
a geographic area--
(i) in which no application is received from
an eligible nonprofit organization; or
(ii) with respect to which the Administrator
determines that the needs of the geographic
area are not adequately served by an existing,
eligible nonprofit organization that has
submitted an application; or
(E) 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 the microloan program.
(2) Microloan.--The term ``microloan'' means a short-term,
fixed rate loan of not more than $50,000, made by an
intermediary to a startup, newly established, or growing small
business concern.
(3) Rural area.--The term ``rural area'' means a political
subdivision or unincorporated area--
(A) in a nonmetropolitan county (as defined by the
Secretary of Agriculture) or its equivalent; or
(B) in a metropolitan county or its equivalent that
has a resident population of less than 20,000 if the
Administrator determines the political subdivision or
unincorporated area to be rural.
(4) State.--The term ``State'' includes the District of
Columbia, Puerto Rico, the United States Virgin Islands, Guam,
and American Samoa.
Sec. 213102. Establishment of microloan program
There is established within SBA a microloan program.
Sec. 213103. Purposes of microloan program
The purposes of the microloan program are--
(1) to assist women, low-income, veteran, and minority
entrepreneurs and business owners and other such individuals
possessing the capability to operate successful business
concerns;
(2) to assist small business concerns in areas suffering from
a lack of credit due to economic downturns;
(3) to make loans to eligible intermediaries to enable the
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;
(4) to make grants to eligible intermediaries that, together
with non-Federal matching funds, will enable the intermediaries
to provide intensive marketing, management, and technical
assistance to microloan borrowers;
(5) to make grants to eligible nonprofit entities that,
together with non-Federal matching funds, will enable the
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;
(6) 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
(7) to establish a welfare-to-work microloan initiative to
test the feasibility of supplementing the technical assistance
grants provided under sections 213106 and 213107 of this title
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, to adequately assist those individuals in--
(A) establishing small business concerns; and
(B) eliminating their dependence on that assistance.
Sec. 213104. Eligibility for participation
An intermediary shall be eligible to receive loans and grants under
sections 213105 and 213106 of this title if the intermediary 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 the microloan program, intensive marketing,
management, and technical assistance to its borrowers.
Sec. 213105. Loans to intermediaries; loans by intermediaries to small
business concerns
(a) In General.--Under the microloan program, the Administrator may
make direct loans to eligible intermediaries for the purpose of making
microloans to small business concerns under this section.
(b) Loan Applications.--
(1) In general.--As part of an application for a loan, an
intermediary shall submit to the Administrator a description
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, including a
description of the economic, poverty, and unemployment
characteristics of the area;
(D) the status of small business concerns in the area
to be served, including 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 chapter;
(F) the local economic credit markets, including the
costs associated with obtaining credit locally;
(G) the qualifications of the applicant to carry out
the purposes of the microloan program; and
(H) any plan to involve other technical assistance
providers (such as counselors from SCORE or small
business development centers) or private sector lenders
in assisting selected business concerns.
(2) Selection of intermediaries.--In selecting intermediaries
to participate in the microloan program, the Administrator
shall give priority to applicants that provide loans in amounts
averaging not more than $10,000.
(c) Intermediary Contribution.--As a condition of a loan under
subsection (a), the Administrator shall require an intermediary to
contribute not less than 15 percent of the loan amount in cash from a
non-Federal source.
(d) Loan Limits.--A loan shall not be made under the microloan
program if the total amount outstanding and committed (on a deferred
basis, through a participation on an immediate basis, or directly) to 1
intermediary (excluding outstanding grants) under the general business
loan program and microloan program would, as a result of the loan,
exceed $750,000 in the 1st year of the intermediary's participation in
the microloan program or $5,000,000 in any subsequent year of the
intermediary's participation in the microloan program.
(e) Loan Term.--A loan made by the Administrator under this chapter
shall be for a term of 10 years.
(f) Delayed Payments.--Except for a loan loss reserve fund under
subsection (i), the Administrator shall not require repayment of
principal or interest on a loan made to an intermediary under this
chapter during the 1st year of the loan.
(g) No Fee or Collateral.--Except for a loan loss reserve fund under
subsection (i), the Administrator shall not charge any fee or require
collateral other than an assignment of the notes receivable of the
microloans with respect to any loan made to an intermediary under the
microloan program.
(h) Interest Rates.--
(1) In general.--Except as provided in paragraph (2), a loan
made by the Administrator to an intermediary under this chapter
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 0.125 percent.
(2) Rates applicable to certain small loans.--A loan made by
the Administrator to an intermediary that makes loans to small
business concerns and entrepreneurs averaging not more than
$7,500 shall bear an interest rate that is 2 percentage points
below the rate determined by the Secretary of the Treasury for
obligations of the United States with a period of maturity of 5
years, adjusted to the nearest 0.125 percent.
(3) Multiple sites or offices.--The interest rate determined
under paragraph (1) or (2) shall apply to each separate
loanmaking site or office of an intermediary only if the site
or office meets the requirements of that paragraph.
(4) Rate basis.--The applicable rate of interest under this
subsection--
(A) for the 1st year of an intermediary's
participation in the microloan program, shall be
applied retroactively based on the actual lending
practices of the intermediary as determined by the
Administrator before the end of that year; and
(B) for each subsequent year of an intermediary's
participation in the microloan program, shall be based
on the actual lending practices of the intermediary
during the term of the intermediary's participation in
the microloan program.
(i) Loss Reserve of Intermediaries.--
(1) In general.--The Administrator shall by regulation
require an intermediary to establish and maintain a loan loss
reserve fund until all obligations owed to the Administrator
under the microloan program are repaid.
(2) Level of loan loss reserve fund.--
(A) In general.--Subject to subparagraph (C), 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.
(B) Review of loan loss reserve.--
(i) In general.--After the initial 5 years of
an intermediary's participation in the
microloan program, the Administrator shall, at
the request of the intermediary, conduct a
review of the annual loss rate of the
intermediary.
(ii) Review period.--An intermediary that
requests a reduction in its loan loss reserve
shall be reviewed based on the most recent 5-
year period preceding the request.
(C) Reduction of loan loss reserve.--Subject to
subparagraph (D), 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.
(D) Requirements.--The Administrator may reduce the
annual loan loss reserve requirement of an intermediary
only if the intermediary demonstrates to the
satisfaction of the Administrator that--
(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 chapter.
(j) Loans by Intermediaries to Small Business Concerns.--
(1) In general.--From funds made available to an intermediary
under the microloan program, the intermediary shall make short-
term, fixed rate loans to startup, newly established, and
growing small business concerns for working capital and the
acquisition of materials, supplies, furniture, fixtures, and
equipment.
(2) Loan amount.--
(A) Portfolio requirement.--To the extent
practicable, an intermediary that operates under the
microloan program shall maintain a microloan portfolio
with an average loan size of not more than $15,000.
(B) Unavailability of comparable credit.--An
intermediary may make a loan under the microloan
program of more than $20,000 to a small business
concern only if the small business concern demonstrates
that--
(i) it is unable to obtain credit elsewhere
at comparable interest rates; and
(ii) it has good prospects for success.
(C) Maximum amount.--An intermediary shall not--
(i) make a loan under this chapter of more
than $50,000; or
(ii) have outstanding or committed to any 1
borrower more than $50,000.
(3) Interest limit.--Notwithstanding any provision of law of
any State (including the constitution of a State) pertaining to
the rate or amount of interest that may be charged, taken,
received, or reserved on a loan, the maximum rate of interest
to be charged on a microloan funded under this chapter shall
not exceed the rate of interest applicable to a loan made to an
intermediary by the Administrator--
(A) in the case of a loan of more than $7,500 made by
the intermediary to a small business concern or
entrepreneur, by more than 7.75 percentage points; and
(B) in the case of a loan of not more than $7,500
made by the intermediary to a small business concern or
entrepreneur by more than 8.5 percentage points.
(4) Review restriction.--The Administrator shall not review
individual microloans made by intermediaries prior to approval.
(5) Establishment of child care or transportation
businesses.--In addition to other eligible small business
concerns, a borrower under the microloan program may include an
individual who will use the loan proceeds to establish--
(A) a for-profit or nonprofit child care
establishment; or
(B) a business providing a for-profit transportation
service.
(k) Program Funding for Microloans.--
(1) Number of participants.--Under the microloan program, the
Administrator may fund, on a competitive basis, not more than
300 intermediaries.
(2) Allocation.--
(A) Minimum allocation.--Subject to the availability
of appropriations, of the total amount of new loan
funds made available for award under the microloan
program for 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 the microloan program for that
fiscal year; and
(ii) any additional amount, as determined by
the Administrator.
(B) Redistribution.--If, at the beginning of the 3d
quarter of a fiscal year, the Administrator determines
that any portion of the amount made available to carry
out the microloan program is unlikely to be made
available under subparagraph (A) during that fiscal
year, the Administrator may make that portion available
for award in any 1 or more States without regard to
subparagraph (A).
(l) Equitable Distribution of Intermediaries.--In approving microloan
program applicants and providing funding to intermediaries under the
microloan program, the Administrator shall select and provide funding
to such intermediaries as will ensure appropriate availability of loans
for small business concerns in all industries located throughout each
State, particularly industries located in urban areas and industries
located in rural areas.
Sec. 213106. Marketing, management, and technical assistance grants to
intermediaries
(a) In General.--In conjunction with a loan to an intermediary under
section 213105 of this title, the Administrator may make a grant to the
eligible intermediary for the purpose of providing intensive marketing,
management, and technical assistance to small business concerns that
are borrowers under the microloan program.
(b) Grant Amount.--
(1) In general.--An intermediary that receives a loan under
section 213105 of this title shall be eligible to receive a
grant in an amount equal to not more than 25 percent of the
total outstanding balance of loans made to the intermediary
under the microloan program.
(2) Intermediary contribution.--
(A) In general.--As a condition of a grant under
paragraph (1), the Administrator shall require the
intermediary to contribute an amount equal to 25
percent of the amount of the grant, obtained solely
from a non-Federal source.
(B) Form.--In addition to cash or other direct
funding, a contribution under subparagraph (A) may
include indirect costs or in-kind contributions paid
for under a non-Federal program.
(c) Additional Technical Assistance Grants for Making Certain
Loans.--
(1) In general.--An intermediary that has a portfolio of
loans under the microloan program that averages not more than
$10,000 during the period of the intermediary's participation
in the microloan program shall be eligible to receive a grant
equal to 5 percent of the total outstanding balance of loans
made to the intermediary under the microloan program, in
addition to any grant made under subsection (b).
(2) Use.--A grant under paragraph (1) shall be used to
provide marketing, management, and technical assistance to
small business concerns that are borrowers under the microloan
program.
(d) Multiple Sites or Offices.--Eligibility for a grant under
subsection (b) or (c) shall be determined separately for each
loanmaking site or office of an intermediary.
(e) Assistance to Certain Small Business Concerns.--
(1) In general.--An intermediary may expend an amount not to
exceed 25 percent of the funds received under subsection (a) to
provide information and technical assistance to small business
concerns that are prospective borrowers under section 213108 of
this title.
(2) Technical assistance.--An intermediary may provide
technical assistance under paragraph (1) through a 3d party
contract.
Sec. 213107. Private sector borrowing technical assistance grants
(a) In General.--The Administrator may 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 the 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.
(b) Grant Amounts.--The Administrator may make not more than 55
grants annually under subsection (a), each in an amount not to exceed
$200,000.
(c) Grant Recipient Contribution.--
(1) In general.--As a condition of a grant under subsection
(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 a non-Federal source.
(2) Form.--In addition to cash or other direct funding, a
contribution under paragraph (1) may include indirect costs or
in-kind contributions paid for under a non-Federal program.
Sec. 213108. 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 the intermediaries have the knowledge, skills, and understanding
of microlending practices necessary to operate a successful microloan
program.
(b) Assistance Amount.--The Administrator shall transfer 7 percent of
the annual appropriation for loans and loan guarantees under this
chapter to SBA'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 specified in subsection (a).
(c) Welfare-to-Work Microloan Initiative.--Of amounts made available
to carry out the welfare-to-work microloan initiative under section
213103(7) of this title for any fiscal year, the Administrator may use
not more than 5 percent to provide technical assistance, either
directly or through contractors, to welfare-to-work microloan
initiative grantees, to ensure that the grantees have the knowledge,
skills, and understanding of microlending and welfare-to-work
transition, and other related issues, to operate a successful welfare-
to-work microloan initiative.
Division E--Disaster Assistance Programs
Chapter 221--Disaster Loan Program
Sec.
221101. Physical loss disaster loans.
221102. Economic injury disaster loans.
221103. Loans to assist small business concerns that suffer injury as a
result of an essential employee's being ordered to active
military duty.
221104. Public awareness of disaster declaration and application
periods.
221105. Disaster loan processing.
221106. Disaster assistance employees.
221107. Maximum loan amount.
221108. Additional disaster assistance in cases of extraordinary
disaster.
221109. Reduction of approval delays and disbursement delays.
221110. Transparency in loan approvals.
221111. Awards to small business development centers, women's business
centers, and SCORE for disaster recovery.
221112. Supplemental assistance for contractor malfeasance.
221113. Business recovery centers.
221114. Oversight of economic injury disaster loans.
221115. Interest rates.
221116. Maximum term.
221117. Deferment of repayment.
221118. Suspension of payments.
221119. Participation in loans on deferred basis.
221120. Assistance and counseling for disaster victims.
221121. Priority in allocating funds.
221122. Prohibition of cancellation of certain disaster loans.
221123. Prohibition of net earnings clauses.
221124. Biennial disaster simulation exercise.
221125. Disaster planning responsibilities.
221126. Disaster response plan.
221127. Coordination of disaster assistance programs with FEMA.
221128. Plans to secure sufficient office space.
221129. Bond guarantees in procurements relating to a major disaster.
221130. Civil penalty.
Sec. 221101. Physical loss disaster loans
(a) In General.--Except as to agricultural enterprises, to the extent
and in such amounts as are provided in advance in appropriation Acts,
the Administrator may make such a loan (directly or in cooperation with
a bank or other lending institution through an agreement to participate
on an immediate or deferred (guaranteed) basis) as the Administrator
determines to be necessary or appropriate to repair, rehabilitate, or
replace property, real or personal, damaged or destroyed by or as a
result of a natural or other disaster.
(b) Loan Amount.--
(1) In general.--The amount of a loan under subsection (a)
shall be equal to 100 percent of the amount of the loss, minus
any amount compensated for by insurance or otherwise.
(2) Protection from future disasters.--
(A) In general.--The Administrator may increase the
amount of a loan under subsection (a) by up to 20
percent of the aggregate costs of the damage or
destruction (whether or not compensated for by
insurance or otherwise) if the Administrator determines
the increase to be appropriate to protect the damaged
or destroyed property from future disasters by taking
mitigating measures.
(B) Mitigating measures.--In subparagraph (A), the
term ``mitigating measures'' includes--
(i) the construction of a retaining wall or
sea wall;
(ii) the grading or contouring of land; and
(iii) the relocation of a utility or
modification of a structure, including the
construction of a safe room or similar storm
shelter designed to protect property and
occupants from tornadoes or other natural
disasters, if the safe room or similar storm
shelter is constructed in accordance with
applicable standards issued by the Federal
Emergency Management Agency.
(3) Limitation on loan amount.--
(A) In general.--No loan under this section shall be
made if the total amount outstanding and committed to
the borrower under the disaster loan program would
exceed $1,500,000 for any 1 disaster unless an
applicant constitutes a major source of employment in
an area suffering a disaster, in which case the
Administrator may waive the $1,500,000 limitation.
(B) Major source of employment.--For purposes of
determining whether a nonprofit applicant that owns a
premises constitutes a major source of employment under
subparagraph (A), the employees of 2 or more concerns
that share the premises as a common business premises
shall be aggregated.
(4) Limitation on reduction of loan amount.--
(A) In general.--The Administrator shall not reduce
the amount of a loan--
(i) for any homeowner on account of loss of
real estate to less than $100,000 for any 1
disaster; or
(ii) for any homeowner or lessee on account
of loss of personal property to less than
$20,000 for any 1 disaster.
(B) Refinancing.--The $100,000 and $20,000 amounts in
subparagraph (A) are in addition to any refinancing for
which a loan applicant is eligible.
(c) Refinancings.--
(1) In general.--A loan or guarantee may be made to refinance
a mortgage or other lien against a totally destroyed or
substantially damaged home or business concern (other than an
agricultural enterprise).
(2) Requirements.--A loan or guarantee under paragraph (1)
shall not be made unless the Administrator determines that--
(A) the applicant is not able to obtain credit
elsewhere; and
(B) the property is to be repaired, rehabilitated, or
replaced.
(3) Amount.--The amount refinanced under paragraph (1)--
(A) shall not exceed the amount of physical loss
sustained; and
(B) shall be reduced to the extent that the mortgage
or lien is satisfied by insurance or otherwise.
(d) Collateral.--
(1) No collateral to be required for loan below a certain
amount.--The Administrator shall not require collateral for a
loan of $25,000 (or such greater amount as the Administrator
determines to be appropriate in the event of a disaster) or
less that is made under this section.
(2) Primary residence.--
(A) In general.--In obtaining the best available
collateral for a loan of not more than $200,000 under
this section, the Administrator shall not require the
owner of a small business concern to use the primary
residence of the owner as collateral if the
Administrator determines that the owner has other
assets that are of equal quality and have a value equal
to or greater than the amount of the loan that could be
used as collateral for the loan.
(B) No reduction of amount or modification of
standards.--Nothing in subparagraph (A) shall be
construed to--
(i) reduce the amount of collateral required
by the Administrator in connection with a loan
described in subparagraph (A); or
(ii) modify the standards used to evaluate
the quality (rather than the type) of the
collateral.
Sec. 221102. Economic injury disaster loans
(a) Definitions.--In this section:
(1) Disaster.--The term ``disaster'' includes--
(A) a drought;
(B) a below average water level in 1 or more of the
Great Lakes or on any other body of water in the United
States that supports commerce by small business
concerns; and
(C) an ice storm or blizzard.
(2) Disaster area.--The term ``disaster area'' includes--
(A) a county determined to be a disaster by the
President, the Secretary of Agriculture, or the
Administrator; and
(B) a county contiguous to a county described in
subparagraph (A).
(b) Loans.--Except as to agricultural enterprises other than
businesses engaged in aquaculture, to the extent and in such amounts as
are provided in advance in appropriation Acts, the Administrator may
make such a loan (directly or in cooperation with a bank or other
lending institution through an agreement to participate on an immediate
or deferred (guaranteed) basis) as the Administrator determines to be
necessary or appropriate to a farm-related or nonfarm-related small
business concern, private nonprofit organization, or small agricultural
cooperative located in a disaster area if--
(1) the Administrator determines that the small business
concern, private nonprofit organization, or agricultural
cooperative has suffered a substantial economic injury as a
result of the disaster;
(2)(A) the disaster constitutes--
(i) a major disaster;
(ii) a natural disaster, as determined by the
Secretary of Agriculture under section 321 of the
Consolidated Farm and Rural Development Act (7 U.S.C.
1961), in which case, assistance under this section may
be provided to farm-related and nonfarm-related small
business concerns, subject to the other applicable
requirements of this section; or
(iii) a disaster, as determined by the Administrator;
or
(B) if no disaster described in subparagraph (A) is declared,
the Governor of a State in which a disaster has occurred
certifies to the Administrator that small business concerns,
private nonprofits organizations, or small agricultural
cooperatives--
(i) have suffered economic injury as a result of the
disaster; and
(ii) are in need of financial assistance that is not
available on reasonable terms in the disaster area; and
(3) the Administrator determines that the applicant is not
able to obtain credit elsewhere.
(c) Prompt Response to Certification.--Not later than 30 days after
the date of receipt of a certification by a Governor of a State under
subsection (b)(2)(B), the Administrator shall respond in writing to the
Governor on the Administrator's determination regarding the
certification, stating the reasons for the determination.
(d) Limitation on Loan Amount.--
(1) In general.--No loan under this section shall be made if
the total amount outstanding and committed to a borrower under
the disaster loan program would exceed $1,500,000 for any 1
disaster unless the borrower constitutes a major source of
employment in a disaster area, in which case the Administrator
may waive the $1,500,000 limitation.
(2) Major source of employment.--For purposes of determining
whether a nonprofit applicant that owns a premises constitutes
a major source of employment under paragraph (1), the employees
of 2 or more concerns that share the premises as a common
business premises shall be aggregated.
(e) Collateral.--
(1) Primary residence.--In obtaining the best available
collateral for a loan of not more than $200,000 under this
section, the Administrator shall not require the owner of a
small business concern to use the primary residence of the
owner as collateral if the Administrator determines that the
owner has other assets that are of equal quality and have a
value equal to or greater than the amount of the loan that
could be used as collateral for the loan.
(2) No reduction of amount or modification of standards.--
Nothing in paragraph (1) shall be construed to--
(A) reduce the amount of collateral required by the
Administrator in connection with a loan described in
paragraph (1); or
(B) modify the standards used to evaluate the quality
(rather than the type) of the collateral.
(f) Nurseries.--The Administrator shall not withhold disaster
assistance under this section to a nursery that is a victim of a
drought disaster.
(g) Disaster Loans for Superstorm Sandy.--
(1) In general.--Notwithstanding any other provision of law,
and subject to the same requirements and procedures that are
used to make loans under the disaster loan program, a small
business concern, homeowner, nonprofit entity, or renter that
was located within an area and during the time period with
respect to which a major disaster was declared by the President
under section 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5170) by reason of
Superstorm Sandy may apply to the Administrator--
(A) for a loan to repair, rehabilitate, or replace
property damaged or destroyed by reason of Superstorm
Sandy; or
(B) if such a small business concern has suffered
substantial economic injury by reason of Superstorm
Sandy, for a loan to assist such a small business
concern.
(2) Timing.--The Administrator shall select loan recipients
and make available loans for a period of not less than 1 year
after the date on which the Administrator carries out paragraph
(1).
(3) Inspector general review.--Not later than 6 months after
the date on which the Administrator begins carrying out
paragraph (1), the SBA Inspector General shall initiate a
review of the controls for ensuring applicant eligibility for
loans made under this subsection.
Sec. 221103. Loans to assist small business concerns that suffer injury
as a result of an essential employee's being
ordered to active military duty
(a) Definitions.--In this section:
(1) 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 the small business concern.
(2) Period of military conflict.--The term ``period of
military conflict'' has the meaning given the term in section
201106(a) of this title.
(3) Reservist expecting activation.--The term ``reservist
expecting activation'' means a reservist who--
(A) has not been ordered to active duty;
(B) expects to be ordered to active duty during a
period of military conflict; and
(C) is a key employee of a small business concern
that can reasonably demonstrate that the small business
concern will suffer economic injury in the absence of
the reservist.
(4) Substantial economic injury.--The term ``substantial
economic injury'' means an economic harm to a small business
concern that results in the inability of the small business
concern to--
(A) meet its obligations as they mature;
(B) pay its ordinary and necessary operating
expenses; or
(C) market, produce, or provide a product or service
ordinarily marketed, produced, or provided by the small
business concern.
(b) In General.--Except as to agricultural enterprises, to the extent
and in such amounts as are provided in advance in appropriation Acts,
the Administrator may make a loan (directly or in cooperation with a
bank or other lending institution through an agreement 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 the small business
concern's being ordered to active military duty during a period of
military conflict.
(c) Eligibility Period.--
(1) In general.--A small business concern shall be eligible
for assistance under this section during the period beginning
on the date on which an essential employee is ordered to active
duty and ending on the date that is 1 year after the date on
which the essential employee is discharged or released from
active duty.
(2) Extension.--The Administrator may, when appropriate (as
determined by the Administrator), extend the ending date
specified in paragraph (1) by not more than 1 year.
(d) Interest Rate.--A loan or guarantee made under this section shall
be made at the same interest rate as in the case of an economic injury
disaster loan under section 221102 of this title.
(e) Loan Amount.--
(1) In general.--Except as provided in paragraph (2), no loan
may be made under this section if the total amount outstanding
and committed to the borrower under the disaster loan program
would exceed $1,500,000.
(2) Major source of employment.--If the Administrator
determines that the applicant constitutes a major source of
employment in its surrounding area (including a borrower that
was not a major source of employment before the disaster but
became a major source of employment after the disaster), as
determined by the Administrator, the Administrator may waive
the $1,500,000 limitation under paragraph (1).
(f) Preconsideration Process.--The Administrator shall establish a
preconsideration process under which the Administrator--
(1) may collect all relevant materials necessary for
processing a loan to a small business concern under this
section before a reservist expecting activation who is employed
by the small business concern is activated; and
(2) shall distribute funds for any loan approved under
paragraph (1) if the reservist expecting activation is
activated.
(g) Outreach and Technical Assistance Program.--
(1) In general.--The Administrator, in consultation with the
Secretary of Veterans Affairs and the Secretary of Defense, may
develop a comprehensive outreach and technical assistance
program (referred to in this subsection as the ``program'')
to--
(A) market the loans available under this section to
reservists and family members of reservists (including
both reservists that are on active duty and reservists
that are not on active duty); and
(B) provide technical assistance to a small business
concern applying for a loan under this section.
(2) Components.--The program shall--
(A) incorporate appropriate websites maintained by
SBA, the Department of Veterans Affairs, and the
Department of Defense; and
(B) require that information on the program be made
available to small business concerns directly through--
(i) the district offices and resource
partners of SBA, including small business
development centers, women's business centers,
and the SCORE; and
(ii) the Department of Veterans Affairs, the
Department of Defense, and other Federal
agencies.
(h) Noncollateralized Loans.--
(1) In general.--Notwithstanding any other provision of law,
the Administrator may make a loan under this section of not
more than $50,000 without collateral.
(2) Deferral of payment.--The Administrator may defer payment
of principal and interest on a loan described in paragraph (1)
during the longer of--
(A) the 1-year period beginning on the date of the
initial disbursement of the loan; or
(B) the period during which the essential employee is
on active duty.
(i) Priority.--The Administrator shall--
(1) give priority to any application for a loan under this
section; and
(2) process and make a determination regarding applications
under this section prior to processing or making a
determination on other loan applications under the disaster
loan program, on a rolling basis.
Sec. 221104. Public awareness of disaster declaration and application
periods
(a) Coordination With FEMA.--
(1) In general.--Notwithstanding any other provision of law,
for any disaster declared under this chapter or major disaster
(including any major disaster relating to which the
Administrator declares eligibility for additional disaster
assistance under section 221108 of this title), the
Administrator, in consultation with the Administrator of the
Federal Emergency Management Agency, shall ensure, to the
maximum extent practicable, that all application periods for
disaster relief under this subtitle correspond with application
deadlines established under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.),
or as extended by the President.
(2) Deadlines.--Notwithstanding any other provision of law,
not later than 10 days before the closing date of an
application period for a major disaster (including any major
disaster relating to which the Administrator declares
eligibility for additional disaster assistance under section
221108 of this title), the Administrator, in consultation with
the Administrator of the Federal Emergency Management Agency,
shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report that
includes--
(A) the deadline for submitting applications for
assistance under this subtitle relating to the major
disaster;
(B) information regarding the number of loan
applications and disbursements processed by the
Administrator relating to the major disaster for each
day during the period beginning on the date on which
the major disaster was declared and ending on the date
of the report; and
(C) an estimate of the number of potential applicants
that have not submitted an application relating to the
major disaster.
(b) Public Awareness of Disasters.--If a disaster is declared under
this chapter or the Administrator declares eligibility for additional
disaster assistance under section 221108 of this title, the
Administrator shall make every effort to communicate through radio,
television, print, and web-based outlets all relevant information
needed by disaster loan applicants, including--
(1) the date of the declaration;
(2) the names of cities and towns within the disaster area;
(3) loan application deadlines related to the disaster;
(4) all relevant contact information for victim services
available through the Administrator (including links to small
business development center websites);
(5) links to relevant Federal and State disaster assistance
websites, including links to websites providing information
regarding assistance available from the Federal Emergency
Management Agency;
(6) information on eligibility criteria for the disaster
assistance programs, including where loan applications can be
found; and
(7) loan application materials that clearly state the
function of SBA as the Federal source of disaster loans for
homeowners and renters.
(c) Marketing and Outreach.--The Administrator shall create a
marketing and outreach plan that--
(1) encourages a proactive approach to the disaster relief
efforts of the Administrator;
(2) makes clear the services provided by the Administrator,
including contact information, application information, and
timelines for submitting applications, the review of
applications, and the disbursement of funds;
(3) describes each of the disaster assistance programs,
including how each disaster assistance program is made
available and the eligibility requirements for each disaster
assistance program;
(4) provides for regional marketing, focusing on disasters
occurring in each SBA region before June 18, 2008, and likely
scenarios for disasters in each SBA region; and
(5) ensures that the marketing plan is made available at
small business development centers and on the SBA website.
Sec. 221105. Disaster loan processing
(a) Major Disaster Loan Processing and Loss Verification by Qualified
Private Contractors.--
(1) Major disaster loan processing.--The Administrator may
enter into an agreement with a qualified private contractor, as
determined by the Administrator, to process loans under this
chapter in the event of a major disaster (including any major
disaster relating to which the Administrator declares
eligibility for additional disaster assistance under section
221108 of this title), under which the Administrator shall pay
the contractor a fee for each loan processed.
(2) Loan loss verification.--The Administrator may enter into
an agreement with a qualified lender or loss verification
professional, as determined by the Administrator, to verify
losses for loans under this chapter in the event of a major
disaster (including any major disaster relating to which the
Administrator declares eligibility for additional disaster
assistance under section 221108 of this title), under which the
Administrator shall pay the lender or verification professional
a fee for each loan for which the lender or verification
professional verifies a loss.
(b) Coordination of Efforts Between the Administrator and the
Commissioner of Internal Revenue To Expedite Loan Processing.--The
Administrator and the Commissioner of Internal Revenue shall, to the
maximum extent practicable, ensure that all relevant and allowable tax
records for loan approval are shared with loan processors in an
expedited manner on request by the Administrator.
(c) Information Tracking and Followup System.--
(1) Information tracking.--
(A) In general.--The Administrator shall develop,
implement, and maintain a centralized information
system to track communications between SBA personnel
and applicants for disaster assistance.
(B) Information to be recorded.--The information
system shall ensure that when an applicant for disaster
assistance communicates with SBA personnel on a matter
relating to the application, the following information
is recorded:
(i) The method of communication.
(ii) The date of the communication.
(iii) The identity of the SBA personnel.
(iv) A summary of the subject matter of the
communication.
(2) Followup.--The Administrator shall ensure that an
applicant for disaster assistance receives, by telephone, mail,
or electronic mail, followup communications from SBA personnel
at all critical stages of the application process, including
the following:
(A) When SBA personnel determine that additional
information or documentation is required to process the
application.
(B) When SBA personnel determine whether to approve
or deny the disaster assistance.
(C) When the primary contact person managing the
application for disaster assistance has changed.
(d) Disaster Assistance Processing Redundancy.--The Administrator
shall ensure that SBA has in place a facility for disaster assistance
processing that, when SBA's primary facility for disaster loan
processing becomes unavailable, is able to take over all disaster loan
processing from the primary facility within 2 days.
Sec. 221106. Disaster assistance employees
(a) In General.--In carrying out the disaster assistance programs,
the Administrator may, where practicable, ensure that the number of
full-time equivalent employees--
(1) in the Office of the Disaster Assistance is not fewer
than 800; and
(2) in the Disaster Cadre of SBA is not fewer than 1,000.
(b) Report.--In carrying out the disaster assistance programs, if the
number of full-time employees for the Office of Disaster Assistance or
the Disaster Cadre of SBA is below the level required by subsection (a)
for that office, not later than 21 days after the date on which the
staffing level decreases below the level required by subsection (a),
the Administrator shall submit to the Committee on Appropriations and
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Appropriations and Committee on Small Business of the
House of Representatives a report that--
(1) details staffing levels on that date;
(2) requests, if practicable and determined to be appropriate
by the Administrator, additional funds for additional
employees; and
(3) contains such additional information as the Administrator
determines to be appropriate.
Sec. 221107. Maximum loan amount
(a) Aggregate Loan Amounts.--Except as provided in subsection (b),
and notwithstanding any other provision of law, the aggregate loan
amount outstanding and committed to a borrower under the disaster loan
program shall not exceed $2,000,000.
(b) Waiver.--The Administrator may increase the aggregate loan amount
under subsection (a) for loans relating to a disaster to a level
established by the Administrator based on appropriate economic
indicators for the region in which the disaster occurred.
Sec. 221108. Additional disaster assistance in cases of extraordinary
disaster
(a) Definition of Eligible small business concern.--In this section,
the term ``eligible small business concern'' means a small business
concern--
(1) that has suffered extraordinary disaster-related
substantial economic injury as a result of an extraordinary
disaster; and
(2)(A) for which not less than 25 percent of the market share
of the small business concern is from business transacted in
the extraordinary disaster area;
(B) for which not less than 25 percent of an input into a
production process of the small business concern is from the
extraordinary disaster area; or
(C) that relies on a provider located in the extraordinary
disaster area for a service that is not readily available
elsewhere.
(b) Declaration of Extraordinary Disaster.--If the President declares
a major disaster, the Administrator may declare that the major disaster
constitutes an extraordinary disaster if the major disaster--
(1) results in--
(A) extraordinary levels of casualties or damage; or
(B) disruption severely affecting the population
(including a mass evacuation), the infrastructure, the
environment, the economy, national morale, or
government functions in an area;
(2) is comparable to a catastrophic incident described in the
Administrator's national response plan (including any successor
to the national response plan), unless the national response
plan expires and there is no successor to the plan, in which
case this paragraph shall be of no effect; and
(3) is of such size and scope that--
(A) the disaster loan program is incapable of
providing adequate and timely assistance to individuals
or business concerns located within the major disaster
area; or
(B) a significant number of business concerns outside
the major disaster area have suffered major disaster-
related substantial economic injury as a result of the
major disaster.
(c) Additional Economic Injury Disaster Loan Assistance.--
(1) In general.--If the Administrator declares an
extraordinary disaster, the Administrator may make such loans
(directly or in cooperation with a bank or other institution
through an agreement to participate on an immediate or deferred
basis) as the Administrator determines to be appropriate to
eligible small business concerns located anywhere in the United
States.
(2) Processing time.--
(A) In general.--If the Administrator determines that
the average processing time for applications for
disaster loans under this subsection relating to a
specific major disaster is more than 15 days, the
Administrator shall give priority to the processing of
such applications submitted by eligible small business
concerns located inside the major disaster area until
the Administrator determines that the average
processing time for such applications is not more than
15 days.
(B) Suspension of applications from outside major
disaster area.--If the Administrator determines that
the average processing time for applications for
disaster loans under this subsection relating to a
specific major disaster is more than 30 days, the
Administrator shall suspend the processing of such
applications submitted by eligible small business
concerns located outside the major disaster area until
the Administrator determines that the average
processing time for such applications is not more than
15 days.
(3) Loan terms.--A loan under this subsection shall be made
on the same terms as a loan under section 221102 of this title.
Sec. 221109. Reduction of approval delays and disbursement delays
The Administrator shall provide a clear and concise notification on
all application materials for loans made under the disaster loan
program and on relevant websites notifying an applicant that--
(1) the applicant may submit all documentation necessary for
the approval of the loan at the time of application; and
(2) failure to submit all documentation could delay the
approval and disbursement of the loan.
Sec. 221110. Transparency in loan approvals
The Administrator shall establish and implement clear, written
policies and procedures for analyzing the ability of a loan applicant
to repay a loan made under the disaster loan program.
Sec. 221111. Awards to small business development centers, women's
business centers, and SCORE for disaster recovery
(a) In General.--The Administrator may provide financial assistance
to a small business development center, a women's business center,
SCORE, or any proposed consortium of those to spur disaster recovery
and growth of small business concerns located in an area for which the
President declares a major disaster.
(b) Form of Financial Assistance.--Financial assistance provided
under this section shall be in the form of a grant, contract, or
cooperative agreement.
(c) No Matching Fund Requirement.--Matching funds shall not be
required for any grant, contract, or cooperative agreement under this
section.
(d) Requirements.--A recipient of financial assistance under this
section shall provide counseling, training, and other related services,
such as promoting long-term resiliency, to small business concerns and
entrepreneurs affected by a major disaster.
(e) Performance.--
(1) In general.--The Administrator, in cooperation with the
recipients of financial assistance under this section, shall
establish metrics and goals for performance of grants,
contracts, and cooperative agreements under this section.
(2) Metrics and goals.-- The metrics and goals established
under paragraph (1) shall include--
(A) recovery of sales;
(B) recovery of employment;
(C) reestablishment of business premises; and
(D) establishment of new small business concerns.
(3) Use of estimates.--The Administrator shall base the
metrics and goals established under paragraph (1), in part, on
the estimates of disaster impact prepared by the Office of
Disaster Assistance for purposes of estimating loanmaking
requirements.
(f) Term.--
(1) In general.--The term of any grant, contract, or
cooperative agreement under this section shall be not more than
2 years.
(2) Extension.--The Administrator may make 1 extension of a
grant, contract, or cooperative agreement under this section
for a period of not more than 1 year, on a showing of good
cause and need for the extension.
(g) Exemption From Other Program Requirements.--Financial assistance
provided under this section is in addition to, and wholly separate
from, any other form of assistance provided by the Administrator under
this subtitle.
(h) Competitive Basis.--The Administrator shall award financial
assistance under this section on a competitive basis.
Sec. 221112. Supplemental assistance for contractor malfeasance
(a) In General.--If--
(1) a contractor or other person engages in malfeasance in
connection with repairs to, rehabilitation of, or replacement
of real or personal property relating to which a loan was made
under the disaster loan program; and
(2) the malfeasance results in substantial economic damage to
the recipient of the loan or a substantial risk to health or
safety;
on receiving documentation of the substantial economic damage or the
substantial risk to health or safety from an independent loss verifier,
and subject to subsection (b), the Administrator may increase the
amount of the loan as necessary for the cost of repairs,
rehabilitation, or replacement needed to address the cause of the
economic damage or health or safety risk.
(b) Requirements.--
(1) In general.--The Administrator may increase the amount of
a loan under subparagraph (A) only on receiving an appropriate
certification from the borrower and person performing the
mitigation attesting to the reasonableness of the mitigation
costs and an assignment of any proceeds received from the
person engaging in the malfeasance.
(2) Amount.--The assignment of proceeds recovered from the
person engaging in the malfeasance shall be equal to the amount
of the loan.
(3) Audit and verification.--Any mitigation activities shall
be subject to audit and independent verification of
completeness and cost reasonableness.
Sec. 221113. Business recovery centers
(a) In General.--The Administrator, acting through the SBA district
offices, shall identify locations that may be used as recovery centers
by the SBA in the event of a disaster declared under this chapter or a
major disaster.
(b) Requirements for Identification.--An SBA district office shall--
(1) identify a location described in subsection (a) in each
county in the area served by the SBA district office; and
(2) ensure that the locations identified under subsection (a)
may be used as a recovery center without cost to the
Government, to the extent practicable.
Sec. 221114. Oversight of economic injury disaster loans
The Administrator--
(1) shall maintain a degree of oversight of entities
receiving economic injury disaster loans under section 221102
of this title that is greater than the degree of oversight
maintained on November 25, 2015; and
(2) may consider--
(A) scheduled site visits to ensure borrower
eligibility and compliance with requirements
established by the Administrator; and
(B) reviews of the use of the loan proceeds by an
entity described in that section to ensure compliance
with requirements established by the Administrator.
Sec. 221115. Interest rates
(a) In General.--Notwithstanding any other provision of law, except
as provided in subsection (b), the interest rate on the Administrator's
share of a loan under the disaster loan program shall not exceed--
(1) the average annual interest rate on all interest-bearing
obligations of the United States then forming a part of the
public debt as computed at the end of the fiscal year next
preceding the date of the loan and adjusted to the nearest
0.125 percent; plus
(2) 0.25 percent.
(b) Loans Under Section 221101 or 221102.--Notwithstanding any other
provision of law, the interest rate on the Federal share of a loan
under section 221101 or 221102 of this title, determined as of the date
on which the disaster commenced, shall be--
(1) in the case of a homeowner unable to secure credit
elsewhere, the lesser of--
(A) a rate prescribed by the Administrator, not to
exceed half a rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of
the United States with remaining periods to maturity
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 0.125 percent; or
(B) 4 percent per year;
(2) in the case of a homeowner able to secure credit
elsewhere, the lesser of--
(A) a rate prescribed by the Administrator, not to
exceed a rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of
the United States with remaining periods to maturity
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 0.125 percent; or
(B) 8 percent per year;
(3) in the case of a business concern, private nonprofit
organization, or other concern (including an agricultural
cooperative) unable to obtain credit elsewhere, not to exceed 4
percent per year; or
(4) in the case of a business concern able to obtain credit
elsewhere, a rate prescribed by the Administrator, not to
exceed the lowest of--
(A) the rate prevailing in the private market for
similar loans;
(B) the rate prescribed by the Administrator as the
maximum interest rate for deferred participation
(guaranteed) loans under the general business loan
program; or
(C) 8 percent per year.
Sec. 221116. Maximum term
No loan under the disaster loan program (including any renewal or
extension of a loan) may be made for a period or periods exceeding--
(1) 30 years; or
(2) in the case of a loan to a business concern under section
221115(b)(2)(D) of this title that is able to obtain credit
elsewhere, 7 years.
Sec. 221117. Deferment of repayment
(a) In General.--In making a loan under this chapter, the
Administrator may provide the person receiving the loan an option to
defer repayment on the loan.
(b) Deferment Period.--The period of a deferment under subsection (a)
shall not exceed 4 years.
Sec. 221118. Suspension of payments
(a) In General.--The Administrator may consent to a suspension in the
payment of principal and interest on, and to an extension in the
maturity of, the Federal share of a loan under the disaster loan
program, for a period not to exceed 5 years, if--
(1) the borrower under the loan is a homeowner or a small
business concern;
(2) the loan was made to enable--
(A) the homeowner to repair or replace his or her
home; or
(B) the small business concern to repair or replace
plant or equipment that was damaged or destroyed as the
result of a disaster described in clause (i) or (ii) of
section 221102(b)(2)(A) of this title; and
(3) the Administrator determines that the suspension is
necessary to avoid severe financial hardship.
(b) Purchase of Participation or Assumption of Obligation.--During
any period in which principal and interest charges are suspended under
subsection (a), the Administrator shall, on the request of any person
having a participation in the loan, purchase the participation, or
assume the obligation of the borrower, for the balance of the period,
to make principal and interest payments on the non-Federal share of the
loan, if--
(1) the Administrator determines that the action is necessary
to avoid a default; and
(2) the borrower agrees to make payments to the Administrator
in an aggregate amount equal to the amount paid in the
borrower's behalf by the Administrator, in such manner and at
such times (during or after the term of the loan) as the
Administrator determines having due regard for the purposes
sought to be achieved by this subsection.
Sec. 221119. Participation in loans on deferred basis
In an agreement to participate in a loan on a deferred basis under
the disaster loan program, participation by the Administrator shall not
be in excess of 90 percent of the balance of the loan outstanding at
the time of disbursement.
Sec. 221120. Assistance and counseling for disaster victims
In administering the disaster assistance programs, to the maximum
extent possible, the Administrator shall provide assistance and
counseling to disaster victims in--
(1) filing applications (including the provision of
information relevant to loan processing); and
(2) loan closing and prompt disbursement of loan proceeds.
Sec. 221121. Priority in allocating funds
In administering the disaster assistance programs, to the maximum
extent possible, the Administrator shall give the disaster loan program
a high priority in allocating funds for administrative expenses.
Sec. 221122. Prohibition of cancellation of certain disaster loans
No portion of a loan under section 221101 or 221102 of this title
shall be subject to cancellation under any provision of law.
Sec. 221123. Prohibition of net earnings clauses
In making a loan under this chapter, the Administrator shall not
require the borrower to pay any nonamortized amount for the 1st 5 years
after repayment begins.
Sec. 221124. Biennial disaster simulation exercise
(a) In General.--The Administrator shall conduct a disaster
simulation exercise at least once every 2 fiscal years.
(b) Requirements.--A disaster simulation exercise shall--
(1) include the participation of, at a minimum, not fewer
than 50 percent of the individuals in the disaster reserve
corps; and
(2) test, at maximum capacity, all of the information
technology and telecommunications systems of the Administrator
that are vital to the activities of the Administrator during a
disaster.
(c) Report.--The Administrator shall include in a report under
section 107118(g) of this title a report on a disaster simulation
exercise conducted under subsection (a).
Sec. 221125. Disaster planning responsibilities
(a) Definitions.--In this section:
(1) Disaster planning officer.--The term ``disaster planning
officer'' means the individual to whom the disaster planning
function of the Administrator is assigned under subsection (b).
(2) State.--The term ``State'' means a State of the United
States, the District of Columbia, Puerto Rico, the Northern
Mariana Islands, the Virgin Islands, Guam, American Samoa, and
any territory or possession of the United States.
(b) Assignment of SBA Disaster Planning Responsibilities.--The
disaster planning function of the Administrator shall be assigned to an
individual appointed by the Administrator who--
(1) is not an employee of the Office of Disaster Assistance
of SBA;
(2) has proven management ability;
(3) has substantial knowledge in the field of disaster
readiness and emergency response; and
(4) has demonstrated significant experience in the area of
disaster planning.
(c) Responsibilities.--The disaster planning officer shall report
directly and solely to the Administrator and shall be responsible for--
(1) developing, implementing, and maintaining the
comprehensive disaster response plan under section 221126 of
this title;
(2) ensuring that there are in-service and pre-service
training procedures for SBA disaster response staff;
(3) coordinating and directing SBA training exercises
relating to disasters, including disaster simulation exercises
and disaster exercises coordinated with other government
agencies; and
(4) other responsibilities relevant to disaster planning and
readiness, as determined by the Administrator.
(d) Coordination.--In carrying out the responsibilities described in
subsection (c), the disaster planning officer shall coordinate with--
(1) the Office of Disaster Assistance of SBA;
(2) the Administrator of the Federal Emergency Management
Agency; and
(3) other Federal, State, and local disaster planning
offices, as necessary.
(e) Resources.--The Administrator shall ensure that the disaster
planning officer has adequate resources to carry out the
responsibilities described in subsection (c).
Sec. 221126. Disaster response plan
(a) Definition of State.--In this section, the term ``State'' means a
State of the United States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and
any territory or possession of the United States.
(b) Plan.--
(1) In general.--The Administrator shall develop, implement,
and maintain a comprehensive written disaster response plan.
(2) Contents.--The disaster response plan shall include the
following:
(A) For each SBA region, a description of the
disasters most likely to occur in the SBA region.
(B) For each disaster described under subparagraph
(A)--
(i) an assessment of the disaster;
(ii) an assessment of the demand for SBA
assistance most likely to occur in response to
the disaster;
(iii) an assessment of the needs of SBA, with
respect to such resources as information
technology, telecommunications, human
resources, and office space, to meet the demand
referred to in clause (ii); and
(iv) guidelines pursuant to which the
Administrator will coordinate with other
Federal agencies and with State and local
authorities to best respond to the demand
described in clause (ii) and to best use the
resources referred to in clause (iii).
(c) Plan Revision.--
(1) In general.--The Administrator shall update the disaster
response plan--
(A) annually; and
(B) following any major disaster relating to which
the Administrator declares eligibility for additional
disaster assistance under section 221108 of this title.
(2) Extreme volume of applications.--
(A) In general.--The Administrator shall revise the
disaster response plan (or any successor to the plan)
to incorporate the Administrator's response to a
situation in which an extreme volume of applications
are received during the period of time immediately
following a disaster.
(B) Contents.--A revision under subparagraph (A)
shall include--
(i) a plan to ensure that sufficient human
and technological resources are made available;
and
(ii) a plan to prevent delays in loan
processing.
(d) Required Knowledge.--The Administrator shall carry out
subsections (b) and (c)(1) through an individual with substantial
knowledge in the field of disaster readiness and emergency response.
(e) Report.--The Administrator shall include in a report under
section 107118(g) of this title a report on the disaster response plan.
Sec. 221127. Coordination of disaster assistance programs with FEMA
(a) In General.--The Administrator shall ensure that the SBA disaster
assistance programs are coordinated, to the maximum extent practicable,
with the disaster assistance programs of the Federal Emergency
Management Agency.
(b) Regulations.--
(1) In general.--The Administrator, in consultation with the
Administrator of the Federal Emergency Management Agency, shall
establish regulations to ensure that each application for
disaster assistance is submitted as quickly as practicable to
SBA or directed to the appropriate agency under the
circumstances.
(2) Revision.--The regulations shall be revised annually.
(c) Report.--The Administrator shall include in a report under
section 107118(g) of this title a report on the regulations under
subsection (b).
Sec. 221128. Plans to secure sufficient office space
(a) In General.--The Administrator shall develop long-term plans to
secure sufficient office space to accommodate an expanded workforce in
times of disaster.
(b) Report.--The Administrator shall include in a report under
section 107118(g) of this title a report on the plans developed under
subsection (a).
Sec. 221129. Bond guarantees in procurements relating to a major
disaster
(a) In General.--Except as provided in subsection (b), and
notwithstanding any other provision of law, for any procurement
relating to a major disaster, the Administrator may, on such terms and
conditions as the Administrator may prescribe, guarantee and enter into
commitments to guarantee a surety against loss resulting from a breach
of the terms of a bid bond, payment bond, performance bond, or bonds
ancillary thereto, by a principal on any total work order or contract
amount at the time of bond execution that does not exceed $5,000,000.
(b) Increase in Amount.--On request of the head of any Federal agency
(other than SBA) involved in reconstruction efforts in response to a
major disaster, the Administrator may guarantee and enter into a
commitment to guarantee a surety against loss under subsection (a) on
any total work order or contract amount at the time of bond execution
that does not exceed $10,000,000.
(c) Limitation on Use of Other Funds.--The Administrator may carry
out this section only with amounts appropriated in advance specifically
to carry out this section.
Sec. 221130. Civil penalty
A person that wrongfully misapplies the proceeds of a loan made under
the disaster loan program shall be liable to the Administrator for a
civil penalty in the amount that is equal to 1.5 times the original
principal amount of the loan.
Chapter 223--Private Disaster Assistance Program
Sec.
223101. Definitions.
223102. Program.
223103. Use of loans.
223104. Online applications.
223105. Maximum amounts.
223106. Terms and conditions.
223107. Lenders.
223108. Fees.
223109. Documentation.
223110. Purchase of loans.
223111. Regulations.
223112. Authorization of appropriations.
Sec. 223101. Definitions
In this chapter:
(1) Eligible individual.--The term ``eligible individual''
means an individual who is eligible for disaster assistance
under section 221101 of this title relating to a major disaster
relating to which the Administrator declares eligibility for
additional disaster assistance under section 221108 of this
title.
(2) Major disaster area.--The term ``major disaster area''
means an area for which the President declares a major disaster
relating to which the Administrator declares eligibility for
additional disaster assistance under section 221108 of this
title, during the period of the major disaster declaration.
(3) Qualified private lender.--The term ``qualified private
lender'' means a privately-owned bank or other lending
institution that--
(A) is not a preferred lender; and
(B) the Administrator determines meets the criteria
established under section 223111 of this title.
(4) Small business concern.--The term ``small business
concern'' means a small business concern (as defined in section
101102 or 301101 of this title).
Sec. 223102. Program
The Administrator shall carry out a program, to be known as the
private disaster assistance program, under which the Administrator may
guarantee timely payment of principal and interest, as scheduled, on
any loan made to a small business concern located in a major disaster
area or to an eligible individual.
Sec. 223103. Use of loans
A loan guaranteed by the Administrator under this chapter may be used
for any purpose authorized under chapter 221.
Sec. 223104. Online applications
(a) Establishment of Process.--The Administrator may establish,
directly or through an agreement with another entity, an online
application process for loans guaranteed under this chapter.
(b) Other Federal Assistance.--The Administrator may coordinate with
the head of any other appropriate Federal agency so that any
application submitted through an online application process established
under this section may be considered for any other Federal assistance
program for disaster relief.
(c) Consultation.--In establishing an online application process
under this section, the Administrator shall consult with appropriate
persons from the public and private sectors, including private lenders.
Sec. 223105. Maximum amounts
(a) Guarantee Percentage.--The Administrator may guarantee not more
than 85 percent of a loan under this chapter.
(b) Loan Amount.--The maximum amount of a loan guaranteed under this
chapter shall be $2,000,000.
Sec. 223106. Terms and conditions
A loan guaranteed under this chapter shall be made under the same
terms and conditions as a loan under chapter 221.
Sec. 223107. Lenders
(a) In General.--
(1) Loans to an eligible individual.--A loan guaranteed under
this chapter made to an eligible individual may be made by a
preferred lender.
(2) Loans to a small business concern.--A loan guaranteed
under this chapter made to a small business concern may be made
by a qualified private lender or by a preferred lender that
also makes loans to eligible individuals.
(b) Compliance.--If the Administrator determines that a preferred
lender knowingly failed to comply with the underwriting standards for
loans guaranteed under this chapter or violated the terms of the
standard operating procedure agreement between the preferred lender and
the Administrator, the Administrator shall do 1 or both of the
following:
(1) Exclude the preferred lender from participating in the
private disaster assistance program.
(2) Exclude the preferred lender from participating in the
preferred lender program for a period of not more than 5 years.
Sec. 223108. Fees
(a) In General.--The Administrator shall not collect a guarantee fee
under this chapter.
(b) Origination Fee.--The Administrator may pay a qualified private
lender or preferred lender an origination fee for a loan guaranteed
under this chapter in an amount agreed on in advance between the
qualified private lender or preferred lender and the Administrator.
Sec. 223109. Documentation
(a) In General.--A qualified private lender or preferred lender may
use its own loan documentation for a loan guaranteed by the
Administrator under this chapter, to the extent authorized by the
Administrator.
(b) Not Part of Qualification Criteria.--The ability of a lender to
use its own loan documentation for a loan guaranteed under this chapter
shall not be considered part of the criteria for becoming a qualified
private lender under the regulations promulgated under section 223111
of this title.
Sec. 223110. Purchase of loans
The Administrator may enter into an agreement with a qualified
private lender or preferred lender to purchase any loan guaranteed
under this chapter.
Sec. 223111. Regulations
The Administrator shall promulgate regulations establishing permanent
criteria for qualified private lenders.
Sec. 223112. Authorization of appropriations
(a) In General.--Amounts necessary to carry out this chapter shall be
made available from amounts appropriated to SBA to carry out chapter
221.
(b) Authority To Reduce Interest Rates and Other Terms and
Conditions.--Funds appropriated to SBA to carry out this chapter may be
used by the Administrator to meet the loan terms and conditions
specified in section 223106 of this title.
Chapter 225--Immediate Disaster Assistance Program
Sec.
225101. Definition of program.
225102. Program.
225103. Eligibility.
225104. Use of proceeds.
225105. Loan terms.
225106. Approval or disapproval.
Sec. 225101. Definition of program
In this chapter, the term ``program'' means the immediate disaster
assistance program established under section 225102 of this title.
Sec. 225102. Program
The Administrator shall carry out a program, to be known as the
immediate disaster assistance program, under which the Administrator
participates on a deferred (guaranteed) basis in 85 percent of the
balance of the financing outstanding at the time of disbursement of the
loan if the balance is less than or equal to $25,000 for business
concerns affected by a disaster.
Sec. 225103. Eligibility
To receive a loan guarantee under section 225102 of this title, an
applicant shall apply for, and meet basic eligibility standards for, a
loan under chapter 221 or 223.
Sec. 225104. Use of proceeds
A business concern that receives a loan under chapter 221 or 223
shall use the proceeds of the loan to repay all loans guaranteed under
section 225102 of this title, if any, before using the proceeds for any
other purpose.
Sec. 225105. Loan terms
(a) No Prepayment Penalty.--There shall be no prepayment penalty on a
loan guaranteed under section 225102 of this title.
(b) Repayment.--A business concern that receives a loan guaranteed
under section 225102 of this title and that is disapproved for a loan
under chapter 221 or 223 shall repay the loan guaranteed under section
225102 of this title not later than the date established by the
Administrator, which shall not be earlier than 10 years after the date
on which the loan guaranteed under section 225102 of this title is
disbursed.
Sec. 225106. Approval or disapproval
The Administrator shall ensure that each applicant for a loan under
the program receives a decision approving or disapproving the
application within 36 hours after the Administrator receives the
application.
Chapter 227--Expedited Disaster Assistance Business Loan Guarantee
Program
Sec.
227101. Definition of program.
227102. Program.
227103. Consultation.
227104. Regulations.
Sec. 227101. Definition of program
In this chapter, the term ``program'' means the expedited disaster
assistance business loan guarantee program established under section
227102 of this title.
Sec. 227102. Program
The Administrator shall establish and implement an expedited disaster
assistance business loan guarantee program under which the
Administrator may, on an expedited basis, guarantee timely payment of
principal and interest, as scheduled on any loan made to an eligible
small business concern under section 221108 of this title.
Sec. 227103. Consultation
In establishing the program, the Administrator shall consult with--
(1) appropriate personnel (including SBA district office
personnel) of SBA;
(2) appropriate technical assistance providers (including
small business development centers);
(3) appropriate lenders and credit unions; and
(4) the Committee on Small Business and Entrepreneurship of
the Senate and Committee on Small Business of the House of
Representatives.
Sec. 227104. Regulations
(a) In General.--The Administrator shall issue regulations
establishing and implementing the program in accordance with this
chapter.
(b) Contents.--The regulations shall--
(1) identify whether appropriate uses of funds under the
program may include--
(A) paying employees;
(B) paying bills and other financial obligations;
(C) making repairs;
(D) purchasing inventory;
(E) restarting or operating a small business concern
in the community in which the small business concern
was conducting operations prior to the applicable major
disaster or in a neighboring area in the disaster area;
or
(F) covering additional costs until the small
business concern is able to obtain funding through
insurance claims, Federal assistance programs, or other
sources; and
(2) set the terms and conditions of any loan made under the
program.
(c) Terms and Conditions.--A loan guaranteed by the Administrator
under the program--
(1) shall be for not more than $150,000;
(2) shall be a short-term loan, not to exceed 180 days,
except that the Administrator may extend the term as the
Administrator determines to be appropriate on a case-by-case
basis;
(3) shall have an interest rate not to exceed 300 basis
points above the interest rate established by the Board of
Governors of the Federal Reserve System that 1 bank charges
another for reserves that are lent on an overnight basis on the
date on which the loan is made;
(4) shall have no prepayment penalty;
(5) may be made only to a borrower that meets the
requirements for a loan under chapter 221;
(6) may be refinanced as part of any subsequent disaster
assistance provided under chapter 221;
(7) may receive expedited loss verification and loan
processing, if the applicant--
(A) is a major source of employment in the disaster
area (which shall be determined in the same manner as
under section 221103(e)(2) of this title); or
(B) is vital to recovery efforts in the region
(including providing debris removal services,
manufactured housing, or building materials); and
(8) shall be subject to such additional terms as the
Administrator determines to be appropriate.
Division F--Business Development Program
Chapter 231--General Provisions
Sec.
231101. Definitions.
231102. Establishment of business development program.
231103. Unemployed or low-income individuals.
231104. Restrictions on activities of SBA employees.
231105. Encouragement of subcontracts.
231106. Federal contracts, subcontracts, and deposits.
231107. Business opportunity specialists.
231108. Requests for investigation.
231109. Use of procurement authority.
Sec. 231101. Definitions
In this division:
(1) Associate administrator.--The term ``Associate
Administrator'' means the Associate Administrator for Minority
Small Business and Capital Ownership Development.
(2) Business activity target.--The term ``business activity
target'' means a target contained in a business plan for
contracts awarded other than through the program.
(3) Business opportunity specialist.--The term ``business
opportunity specialist'' means an SBA employee responsible for
providing business development assistance to a program
participant.
(4) Business plan.--The term ``business plan'' means the
business plan of a program participant under section 233118 of
this title.
(5) Director.--The term ``Director'' means the Director of
the Division.
(6) Disadvantaged owner.--The term ``disadvantaged owner''
means an individual on whom eligibility is based for
participation in the business development program.
(7) Division.--The term ``Division'' means the Division of
Program Certification and Eligibility established by section
103108 of this title.
(8) Economically disadvantaged indian tribe.--The term
``economically disadvantaged Indian tribe'' means an Indian
tribe that the Administrator determines to be economically
disadvantaged based on consideration of available information
such as--
(A) the per capita income of members of the Indian
tribe, excluding judgment awards;
(B) the percentage of the local Indian population
below the poverty level; and
(C) the Indian tribe's access to capital markets.
(9) Executive agency.--The term ''executive agency'' has the
meaning given the term in section 133 of title 41.
(10) Graduate.--The term ``graduate'', with reference to a
program participant, means to graduate the program participant
from the program under section 233120 of this title.
(11) Indian tribe.--The term ``Indian tribe'' means an Indian
tribe, band, nation, or other organized group or community of
Indians, including any Alaska Native village or regional or
village corporation (within the meaning of the Alaska Native
Claims Settlement Act (43 U.S.C. 1601 et seq.)) that--
(A) is recognized as eligible for the special
programs and services provided by the United States to
Indians because of their status as Indians; or
(B) is recognized as such by the State in which the
Indian tribe, band, nation, group, or community
resides.
(12) Program.--The term ``program'' means the business
development program.
(13) Program participant.--The term ``program participant''
means a small business concern that is participating in the
program.
(14) Program participation period.--The term ``program
participation period'', with respect to a program participant,
means the period of program participation applicable to the
program participant under section 233129 of this title.
(15) Small business concern owned and controlled by socially
and economically disadvantaged individuals.--
(A) In general.--The term ``small business concern
owned and controlled by socially and economically
disadvantaged individuals'' means a small business
concern--
(i) not less than 51 percent of which is
unconditionally owned by--
(I) 1 or more socially and
economically disadvantaged individuals;
(II) an economically disadvantaged
Indian tribe (or a wholly owned
business entity of an economically
disadvantaged Indian tribe); or
(III) an economically disadvantaged
Native Hawaiian organization; and
(ii) the management and daily business
operations of which are controlled by 1 or
more--
(I) socially and economically
disadvantaged individuals;
(II) members of an economically
disadvantaged Indian tribe; or
(III) Native Hawaiian organizations.
(B) Size determination for indian tribes.--In
determining the size of a concern owned by an
economically disadvantaged Indian tribe (or a wholly
owned business entity of an economically disadvantaged
Indian tribe) for purposes of subparagraph (A), the
concern's size shall be independently determined
without regard to its affiliation with the Indian
tribe, any entity of the tribal government, or any
other business enterprise owned by the Indian tribe,
unless the Administrator determines that 1 or more such
tribally owned business concerns have obtained, or are
likely to obtain, a substantial unfair competitive
advantage within an industry category.
(16) Socially and economically disadvantaged individual.--
(A) In general.--The term ``socially and economically
disadvantaged individual'' means a member of a group of
socially disadvantaged individuals whose ability to
compete in the free enterprise system has been impaired
due to diminished capital and credit opportunities as
compared with others in the same business area who are
not socially disadvantaged.
(B) Determination of degree of diminished credit and
capital opportunities.--In determining the degree of
diminished credit and capital opportunities, the
Administrator shall consider, among other things, the
assets and net worth of a socially disadvantaged
individual.
(C) Net worth.--In computing personal net worth for
purposes of this paragraph, there shall be excluded--
(i) the value of investments that
disadvantaged owners have in their concern,
except that the value of such investments shall
be taken into account when comparing the
concern 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,
except that any portion of such equity that is
attributable to unduly excessive withdrawals
from a program participant or a concern
applying for program participation shall be
taken into account.
(17) Socially disadvantaged individual.--
(A) In general.--The term ``socially disadvantaged
individual'' means a member of a group of individuals
who have been subjected to racial or ethnic prejudice
or cultural bias because of their identity as members
of the group without regard to their individual
qualities.
(B) Determination.--A determination under
subparagraph (A) with respect to whether a group has
been subjected to prejudice or bias shall be made by
the Administrator after consultation with the Associate
Administrator for Minority Small Business and Capital
Ownership Development.
(18) Terminate.--The term ``terminate'', with reference to a
program participant, means to suspend or totally deny
assistance to a program participant under the program, prior to
the graduation of the program participant or prior to the
expiration of the program participant's program participation
period, under section 233121 of this title.
Sec. 231102. Establishment of business development program
There is established within SBA the business development program,
which shall provide assistance exclusively for small business concerns
eligible to receive contracts under chapter 233.
Sec. 231103. Unemployed or low-income individuals
The program shall be used to--
(1) assist in the establishment, preservation, and
strengthening of small business concerns and improve the
managerial skills employed in small business concerns, with
special attention to, and particular emphasis on the
preservation or establishment of, small business concerns that
are--
(A) located in urban or rural areas with high
proportions of unemployed or low-income individuals; or
(B) owned by low-income individuals; and
(2) mobilize for those objectives private as well as public
managerial skills and resources.
Sec. 231104. Restrictions on activities of SBA employees
(a) Activities and Transactions Relating to Ownership of a Program
Participant.--
(1) In general.--A person within the employ of SBA shall not,
during the term of such employment and for a period of 2 years
after the employment has been terminated, engage in any
activity or transaction described in paragraph (2) with respect
to any program participant during the person's term of
employment, if the person participated personally (directly or
indirectly)--
(A) in decisionmaking responsibilities relating to
the program participant; or
(B) with respect to the administration of any
assistance provided to program participants generally
under the program.
(2) Activities and transactions.--The activities and
transactions referred to in paragraph (1) are--
(A) 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;
(B) 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 subparagraph (A); and
(C) the receipt of any other benefit or right that
may be an incident of ownership.
(3) Annual certification.--
(A) In general.--An employee described in
subparagraph (B) shall annually submit to the
Administrator a written certification regarding
compliance with this section.
(B) Employee.--The employees referred to in
subparagraph (A) are--
(i) a regional administrator;
(ii) a district director;
(iii) the Associate Administrator;
(iv) an employee whose principal duties
relate to the award of contracts or the
provision of other assistance under the
program; and
(v) such other employees as the Administrator
may designate.
(4) Civil penalties.--
(A) In general.--An employee or former employee of
SBA who violates this section shall be subject to a
civil penalty, assessed by the Attorney General, that
shall not exceed 300 percent of the maximum amount of
gain that the employee realized or could have realized
as a result of engaging in the activity and transaction
prohibited by paragraph (1).
(B) False certification.--In addition to any other
remedy or sanction provided for under law (including a
regulation), a person who makes a false certification
under paragraph (3)(A) shall be subject to a civil
penalty under section 3802 of title 31.
(b) Political Activities and Affiliations.--
(1) Prohibition.--An employee of SBA who has authority to
take, direct others to take, recommend, or approve any action
with respect to any program or activity under the program shall
not, with respect to any such action, exercise or threaten to
exercise that authority on the basis of the political activity
or affiliation of any person.
(2) Reporting of solicitation to violate.--An employee of SBA
whose participation in a violation of paragraph (1) is directed
or solicited shall expeditiously report the direction or
solicitation to the Inspector General of SBA.
(3) Disciplinary action.--An employee of SBA who willfully
and knowingly violates paragraph (1) or (2) shall be subject to
disciplinary action, which may consist of separation from
service, reduction in grade, suspension, or reprimand.
(4) Applicability.--Paragraphs (1) and (2) do not apply to an
action taken as a penalty or other enforcement of a violation
of any law (including a regulation) prohibiting or restricting
political activity.
(5) Other prohibitions, measures, and liabilities.--
Paragraphs (1) to (4) are in addition to, and not in lieu of,
any other prohibitions, measures, or liabilities that may arise
under any other provision of law.
Sec. 231105. Encouragement of subcontracts
(a) In General.--The Administrator shall encourage the placement of
subcontracts by businesses with small business concerns located in
areas of high concentration of unemployed or low-income individuals and
with program participants.
(b) Incentives and Assistance.--The Administrator may provide
incentives and assistance to a business to aid in the training and
upgrading of--
(1) potential small business concern subcontractors; and
(2) program participants.
Sec. 231106. Federal contracts, subcontracts, and deposits
The Administrator shall take such steps as are necessary and
appropriate, in coordination and cooperation with the heads of other
Federal agencies, to ensure that contracts, subcontracts, and deposits
made by the Federal Government or with programs aided with Federal
funds are placed in such a way as to further the purposes of the
program.
Sec. 231107. Business opportunity specialists
(a) Position.--In each SBA field office responsible for assisting 1
or more program participants there shall be a position designated as a
business opportunity specialist.
(b) Adequate Number.--To the maximum extent practicable, the
Administrator shall ensure that an adequate number of business
opportunity specialists are assigned to each district office to carry
out the responsibilities of the program and to assist program
participants.
(c) Training.--The Administrator shall take such actions as are
appropriate to ensure that any person employed as a business
opportunity specialist receives adequate periodic training to ensure
that the employee is capable of assisting program participants in fully
utilizing the program and meeting the requirements of this subtitle and
subtitle I.
Sec. 231108. Requests for investigation
The Committee on Small Business and Entrepreneurship of the Senate or
the Committee on Small Business of the House of Representatives may
request that the Office of the Inspector General of SBA conduct an
investigation of any activity conducted under the program. Not later
than 30 days after the receipt of such a request, the Inspector General
shall inform the committee, in writing, of the disposition of the
request.
Sec. 231109. Use of procurement authority
The procurement authority under the program shall be used only as a
tool for developing business ownership among groups that own and
control little productive capital.
Chapter 233--Contracting
Sec.
233101. Contracting authority.
233102. Contracting procedure.
233103. Fair market price.
233104. Award after completion of program participation period.
233105. Award through competition.
233106. Participation by program participants in negotiation of
contracts to be awarded noncompetitively.
233107. Sole source award.
233108. Annual certification regarding ownership and control.
233109. Annual submission regarding economic disadvantage.
233110. Review of economic disadvantage and withdrawal of assets.
233111. Hearing on the record.
233112. Program participant capability.
233113. Limitations on subcontracting.
233114. Wholesalers and retailers.
233115. Reporting by program participants to business opportunity
specialists.
233116. Transfer of ownership or control.
233117. Assistance for program participants.
233118. Business plans.
233119. Denial of further assistance.
233120. Graduation.
233121. Termination.
233122. Evaluation of eligibility.
233123. Limitation of eligibility to 1 small business concern.
233124. Limitation on denial of admission into program based on
unavailability of specific contract opportunities.
233125. Certification decision.
233126. Review of new entrants into the program.
233127. Program stages.
233128. Attainment of business activity targets.
233129. Program participation period.
233130. Collection of data on program operations.
233131. Approval of contract options and modifications.
233132. Orderly and efficient management of program.
233133. Participation in federally funded programs and projects.
Sec. 233101. Contracting authority
(a) In General.--When the Administrator determines that such action
is necessary or appropriate, the Administrator shall--
(1) enter into contracts with procuring agencies obligating
the Administrator to furnish articles, equipment, supplies,
services, or materials to the Government or to perform
construction work for the Government; and
(2) arrange for the performance of such contracts by
negotiating or otherwise letting a subcontract to 1 or more
small business concerns owned and controlled by socially and
economically disadvantaged individuals--
(A) for the manufacture, supply, assembly of the
articles, equipment, supplies, materials, or parts
thereof, for the construction work, for the services,
or for servicing or processing in connection with the
manufacturing, construction, or services; or
(B) for such management services as are necessary to
enable the Administrator to perform the contract.
(b) Construction Subcontracts.--To the maximum extent practicable,
construction subcontracts awarded by the Administrator under the
program shall be awarded within the county or State in which the work
is to be performed.
(c) Inapplicability to Certain Procurements.--The requirements of the
program do not apply to--
(1) a procurement under conditions described in--
(A) paragraph (2), (3), (4), (5), or (7) of section
3304(a) of title 41; or
(B) paragraph (2), (3), (4), (5), or (7) of section
2304(c) of title 10; or
(2) a procurement by an executive agency for which the head
of the executive agency makes a determination in writing, after
consultation with the Administrator and the Administrator for
Federal Procurement Policy, that it is not appropriate or
reasonable to publish a notice before issuing a solicitation.
Sec. 233102. Contracting procedure
(a) In General.--If the Administrator certifies to a contracting
officer of a procuring agency that the Administrator is competent and
responsible to perform a specific Federal agency procurement contract
to be let by the contracting officer, the contracting officer may let
the contract to the Administrator on such terms and conditions as may
be agreed on between the Administrator and the contracting officer.
(b) Failure To Agree.--
(1) In general.--If the Administrator and the contracting
officer fail to agree on a procurement contract--
(A) not later than 5 days after the date on which the
Administrator is notified of the contracting officer's
adverse decision, the Administrator may notify the
contracting officer of the intent to appeal the adverse
decision; and
(B) not later than 15 days after that date, the
Administrator shall file a written request for a
reconsideration of the adverse decision with the head
of the procuring agency.
(2) Adverse decision.--For the purposes of paragraph (1)(A),
a contracting officer's adverse decision includes--
(A) a decision not to make available for award under
the program a particular procurement requirement; and
(B) a failure to agree on the terms and conditions of
a contract to be awarded noncompetitively under the
program.
(3) Suspension of action.--On receipt of a notice of intent
to appeal under paragraph (1)(A), the agency head shall suspend
further action regarding the procurement until a written
decision on the Administrator's request for reconsideration is
issued by the agency head, unless the contracting officer makes
a written determination that urgent and compelling
circumstances that significantly affect interests of the United
States will not permit waiting for a reconsideration of the
adverse decision.
(4) Denial of request for reconsideration.--If the
Administrator's request for reconsideration is denied, the
procuring agency head shall specify the reasons why the small
business concern selected by the Administrator to perform the
procurement requirement was determined to be incapable of
performing the procurement requirement, and the findings
supporting the determination, which shall be made a part of the
contract file for the requirement.
Sec. 233103. Fair market price
(a) In General.--A contract may not be awarded under the program if
the award of the contract would result in a cost to the procuring
agency that exceeds a fair market price.
(b) Determination.--
(1) In general.--The fair market price under subsection (a)
shall be determined by the procuring agency in accordance with
this subsection.
(2) New procurement.--
(A) In general.--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.
(B) Factors.--A price or cost analysis--
(i) may take into account prevailing market
conditions, commercial prices for similar
products or services, or data obtained from any
other Federal agency; and
(ii) shall consider such cost or pricing data
as may be timely submitted by the
Administrator.
(3) Procurements with satisfactory procurement history.--
(A) In general.--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 ensure comparability.
(B) Adjustment.--An adjustment under subparagraph (A)
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 that are considered appropriate.
(c) Estimation Method.--
(1) In general.--On the request of the Administrator, the
procuring agency shall promptly submit to the Administrator a
written statement detailing the method used by the procuring
agency to estimate the current fair market price for the
contract, identifying the information, studies, analyses, and
other data used by the procuring agency.
(2) Nondisclosure.--The procuring 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.
(d) Protest.--A small business concern selected by the Administrator
to perform or negotiate a contract to be let under the program may
request the Administrator to protest the procuring agency's estimate of
the fair market price for the contract.
Sec. 233104. Award after completion of program participation period
The Administrator shall make an award to a small business concern
owned and controlled by socially and economically disadvantaged
individuals that has completed its program participation period if--
(1) 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 under section
233105 of this title; and
(2) 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.
Sec. 233105. Award through competition
(a) In General.--Except as provided in subsections (b) and (c), a
contract opportunity offered for award under the program shall be
awarded on the basis of competition restricted to eligible program
participants if--
(1) there is a reasonable expectation that--
(A) at least 2 eligible program participants will
submit offers; and
(B) an award can be made at a fair market price; and
(2) the anticipated award price of the contract (including
options) will exceed--
(A) $5,000,000, in the case of a contract opportunity
assigned a North American Industry Classification
System code for manufacturing; or
(B) $3,000,000, in the case of any other contract
opportunity.
(b) Restricted Competition for Smaller Contracts.--
(1) In general.--The Associate Administrator may approve a
request from a Federal agency to award a contract opportunity
under the program on the basis of a competition restricted to
eligible program participants even if the anticipated award
price is not expected to exceed the dollar amounts specified in
subsection (a)(2).
(2) Approvals.--Approvals under paragraph (1) shall be
granted only on a limited basis.
(3) Nondelegability.--The authority of the Associate
Administrator under paragraph (1) may not be delegated.
(c) Program Participants Owned and Controlled by an Economically
Disadvantaged Indian Tribe.--Subsection (a) does not preclude the award
of a sole source contract under section 233107 of this title, without
regard to the anticipated award price of the contract, to a program
participant that is owned and controlled by an economically
disadvantaged Indian tribe.
(d) Program Participants Owned and Controlled by Native Hawaiian
Organizations.--For purposes of contracting with agencies of the
Department of Defense, subsection (a) does not preclude the award of a
sole source contract under section 233107 of this title, without regard
to the anticipated award price of the contract, to a program
participant that is owned and controlled by a Native Hawaiian
organization.
Sec. 233106. Participation by program participants in negotiation of
contracts to be awarded noncompetitively
A program participant selected by the Administrator to perform a
contract to be let noncompetitively under the program shall, when
practicable, participate in any negotiation of the terms and conditions
of the contract.
Sec. 233107. Sole source award
(a) In General.--The Administrator shall award a sole source contract
under the program to a program participant recommended by the Federal
agency offering the contract opportunity if--
(1) the program participant is determined to be a responsible
contractor with respect to performance of the contract;
(2) the award of the contract would be consistent with the
program participant's business plan; and
(3) the award of the contract would not result in the program
participant's exceeding the requirements established by section
233128 of this title.
(b) Equitable Geographic Distribution.--To the maximum extent
practicable, the Administrator shall promote the equitable geographic
distribution of sole source contracts awarded under this section.
Sec. 233108. Annual certification regarding ownership and control
A program participant shall annually certify that the program
participant meets the requirements of section 231101(15) of this title
regarding ownership and control.
Sec. 233109. Annual submission regarding economic disadvantage
A program participant shall annually submit to the Administrator--
(1) a personal financial statement for each disadvantaged
owner;
(2) a record of all payments made by the program participant
to each of its disadvantaged owners or to any person or entity
affiliated with its disadvantaged owners; and
(3) such other information as the Administrator considers
necessary to make the determinations required by paragraphs (8)
and (16) of section 231101 of this title and section 233110 of
this title.
Sec. 233110. Review of economic disadvantage and withdrawal of assets
(a) Economic Disadvantage.--If, on the basis of information provided
by a program participant under section 233109 of this title or
information otherwise obtained by the Administrator, the Administrator
has reason to believe that the standards to establish economic
disadvantage under section 231101(15) of this title are not met, the
Administrator shall conduct a review to determine whether the program
participant and its disadvantaged owners continue to be impaired in
their ability to compete in the free enterprise system due to
diminished capital and credit opportunities as compared with others in
the same business area who are not socially disadvantaged.
(b) Withdrawal of Assets.--
(1) In general.--If, on the basis of information provided by
a program participant under section 233109 of this title or
information otherwise obtained by the Administrator, the
Administrator has reason to believe that the amount of funds or
other assets withdrawn from a program participant for the
personal benefit of its disadvantaged owners or any person or
entity affiliated with its disadvantaged owners may have been
unduly excessive, the Administrator shall conduct a review to
determine whether the withdrawal of funds or other assets was
detrimental to the achievement of the targets, objectives, and
goals contained in the program participant's business plan.
(2) Termination or requirement to reinvest assets.--If the
Administrator determines in a review under paragraph (1) that
funds or other assets have been withdrawn to the detriment of
the program participant's business, the Administrator shall--
(A) initiate a proceeding to terminate the program
participant under section 233121 of this title; or
(B) require an appropriate reinvestment of funds or
other assets and such other steps as the Administrator
considers necessary to ensure the protection of the
program participant.
Sec. 233111. Hearing on the record
(a) Opportunity for Hearing.--Before taking an action described in
subsection (b) with respect to a small business concern, the
Administrator shall provide the small business concern an opportunity
for a hearing on the record in accordance with chapter 5 of title 5.
(b) Actions.--The actions referred to in subsection (a) are--
(1) denial of admission to the program based on a
determination that--
(A) a small business concern is not a small business
concern owned and controlled by socially and
economically disadvantaged individuals under section
231101(15) of this title;
(B) 1 or more of the owners of a small business
concern is not a socially disadvantaged individual
under section 231101(17) of this title; or
(C) 1 or more of the owners of a small business
concern is not a socially and economically
disadvantaged individual under section 231101(16);
(2) graduation under section 233120 of this title;
(3) termination under section 233121 of this title; and
(4) denial of a request to issue a waiver under section
233116(b) of this title.
(c) Declination of Jurisdiction.--The administrative law judge
selected to preside over a proceeding under this section shall decline
to accept jurisdiction over any matter that--
(1) does not, on its face, allege facts that, if proven to be
true, would warrant reversal or modification of the
Administrator's position;
(2) is untimely filed;
(3) is not filed in accordance with the rules of procedure
governing the proceeding; or
(4) has been decided by or is the subject of an adjudication
before a court of competent jurisdiction over such matters.
(d) Timing.--A proceeding under this section shall be completed and a
decision rendered, insofar as practicable, not later than 90 days after
a petition for a hearing is filed with the Office of Hearings and
Appeals.
(e) Final Decision.--A decision rendered under this section shall be
the final decision of the Administrator and shall be binding on the
Administrator and persons in the employ of the Administrator.
Sec. 233112. Program participant capability
(a) Eligibility for Assistance.--
(1) In general.--A small business concern shall not be
eligible for assistance under the program unless the
Administrator determines that with contract, financial,
technical, and management support, the small business concern--
(A) will be able to perform contracts that may be
awarded to the small business concern under 233104 of
this title; and
(B) has reasonable prospects for success in competing
in the private sector.
(2) Period of operation.--
(A) In general.--The Administrator may prescribe a
minimum period of time during which a prospective
program participant must be in operation to meet the
eligibility requirements of paragraph (1) only if the
Administrator provides a waiver of the minimum period
as provided in subparagraph (B).
(B) Waiver.--The Administrator shall provide that any
requirement that the Administrator establishes
regarding the period of time during which a prospective
program participant must have been in operation may be
waived, and that a prospective program participant that
otherwise meets the requirements of paragraph (1) shall
be considered to have demonstrated reasonable prospects
for success, if--
(i) the individual or individuals upon whom
eligibility is to be based have substantial and
demonstrated business management experience;
(ii) the prospective program participant has
demonstrated technical expertise to carry out
its business plan with a substantial likelihood
for success;
(iii) the prospective program participant has
adequate capital to carry out its business
plan;
(iv) the prospective program participant has
a record of successful performance on contracts
from governmental and nongovernmental sources
in the primary industry category in which the
prospective program participant is seeking
certification; and
(v) the prospective program participant has,
or can demonstrate its ability to timely
obtain, the personnel, facilities, equipment,
and any other requirements needed to perform
such contracts.
(b) Capability.--
(1) Capability statements.--
(A) Annual submission.--A program participant shall
annually submit to the Administrator a capability
statement.
(B) Contents.--A capability statement shall--
(i) briefly describe the program
participant's various contract performance
capabilities; and
(ii) include the name and telephone number of
the business opportunity specialist assigned
the program participant.
(C) Statement categories.--The Administrator shall
categorize capability statements as--
(i) statements indicating capability
primarily dependent on local contract support;
and
(ii) statements indicating capability
primarily requiring a national marketing
effort.
(D) Dissemination of capability statements.--
(i) Local.--The Administrator shall
disseminate capability statements described in
subparagraph (C)(i) to appropriate contracting
activities in the marketing area of each
program participant, respectively.
(ii) National.--The Administrator shall
disseminate capability statements described in
subparagraph (C)(ii) to the Directors of Small
and Disadvantaged Business Utilization for the
appropriate Federal agencies, who shall further
distribute the capability statements to
contracting activities with Federal agencies
that may purchase the types of items or
services described in the capability
statements.
(2) Contact by contracting activities.--A contracting
activity that receives a capability statement of a program
participant under paragraph (1)(D) shall, within 60 days after
receipt of the capability statement, contact the business
opportunity specialist identified in the capability statement
to indicate the number, type, and approximate dollar value of
contract opportunities that the contracting activity may award
over the succeeding 12-month period and that may be appropriate
to consider for award to program participants for which the
contracting activity has received capability statements.
(3) Forecast of contract opportunities.--
(A) In general.--An executive agency that reports to
the Federal Procurement Data System contract actions
with an aggregate value in excess of $50,000,000 in any
fiscal year shall--
(i) prepare a forecast of expected contract
opportunities or classes of contract
opportunities for the next and succeeding
fiscal years that program participants are
capable of performing; and
(ii) periodically revise the forecast during
the following year.
(B) Contents.--To the extent that the information is
available, a forecast under subparagraph (A) shall
specify--
(i) the approximate number of individual
contract opportunities (and the number of
opportunities within a class);
(ii) the approximate dollar value, or range
of dollar values, for each contract opportunity
or class of contract opportunities;
(iii) the anticipated time (by fiscal year
quarter) for the issuance of a procurement
request; and
(iv) the activity responsible for the award
and administration of the contract.
(C) Submission of forecasts.--Not later than 10 days
after completion of a forecast under subparagraph (A),
the head of the executive agency that prepared the
forecast shall submit the forecast to--
(i) the Director of the Office of Small and
Disadvantaged Business Utilization of the
executive agency; and
(ii) the Administrator.
(D) Scope of information reported.--A forecast
submitted under subparagraph (C) may be limited to
classes of items and services for which there are
substantial annual purchases.
(E) Availability of forecasts.--A forecast submitted
under subparagraph (C) shall be available to small
business concerns.
Sec. 233113. Limitations on subcontracting
A program participant shall not be awarded a contract under the
program unless the program participant agrees to satisfy the
requirements of section 299107 of this title.
Sec. 233114. Wholesalers and retailers
(a) In General.--An otherwise responsible small business concern that
is described in subsection (b) shall not be denied the opportunity to
submit and have considered its offer for a procurement contract that
has as its principal purpose the supply of a product to be let under
this chapter solely because the small business concern is other than
the manufacturer or processor of the product to be supplied under the
contract.
(b) Requirements.--A small business concern referred to in subsection
(a) is a small business concern that--
(1) is primarily engaged in wholesale or retail trade;
(2) is a small business concern under the numerical size
standard for the North American Industry Classification System
code assigned to the contract solicitation on which the offer
is being made;
(3) is a regular dealer (as defined under section 6510 of
title 41) in the product to be offered the Government; and
(4) represents that the small business concern will supply
the product of a domestic small business manufacturer or
processor, unless a waiver of this paragraph is granted--
(A) by the Administrator, after reviewing a
determination by the contracting officer that no small
business manufacturer or processor can reasonably be
expected to offer a product meeting the specifications
(including period for performance) required of an
offeror by the solicitation; or
(B) by the Administrator for a product (or class of
products), after determining that no small business
manufacturer or processor is available to participate
in the Federal procurement market.
(c) Limitation.--This section does not apply to a contract that has
as its principal purpose the acquisition of a service or construction.
Sec. 233115. Reporting by program participants to business opportunity
specialists
(a) In General.--A program participant shall semiannually submit to
its assigned business opportunity specialist a report identifying each
agent, representative, attorney, accountant, consultant, or other
person (other than an employee of the program participant) that
received compensation during the reporting period to assist the program
participant in obtaining a Federal contract.
(b) Contents.--A report under subsection (a) shall--
(1) disclose the amount of compensation received by each
person identified in the report during the reporting period;
and
(2) describe the activities performed for the compensation.
(c) Review and Transmittal.--The business opportunity specialist
shall promptly--
(1) review the report; and
(2) transmit the report to the Associate Administrator.
(d) Suspicion of Improper Activity.--The Associate Administrator
shall transmit to the Inspector General of SBA any report that raises a
suspicion of improper activity.
(e) Failure To Submit Report.--A failure of a program participant to
submit a report under subsection (a) shall constitute good cause for
initiation of a termination proceeding under section 233121(b) of this
title.
Sec. 233116. Transfer of ownership or control
(a) In General.--
(1) Performance by contract awardee.--A contract (including
options) awarded under the program shall be performed by the
program participant that is initially awarded the contract.
(2) Relinquishment of ownership or control.--
(A) In general.--Notwithstanding paragraph (1), if
the owner or owners on whom eligibility for award of
the contract was based relinquish ownership or control
of the program participant, or enter into any agreement
to relinquish such ownership or control, the contract
or option shall be terminated for the convenience of
the Government.
(B) No damages.--No repurchase costs or other damages
may be assessed against a program participant due
solely to the operation of subparagraph (A).
(b) Waiver.--
(1) In general.--The Administrator may waive subsection (a)
only if--
(A)(i) it is necessary for the owner of the program
participant to surrender partial control of the program
participant on a temporary basis to obtain equity
financing; and
(ii) the Administrator is requested to waive
subsection (a) prior to the actual transfer of
ownership or control;
(B)(i) the procuring agency head certifies that
termination of the contract would severely impair
attainment of the procuring agency's program objectives
or missions; and
(ii) the Administrator is requested to waive
subsection (a) prior to the actual transfer of
ownership or control;
(C)(i) ownership and control of the program
participant will pass to another program participant;
and
(ii) the acquiring program participant would
otherwise be eligible to receive the award directly
under the program; and
(iii) the Administrator is requested to waive
subsection (a) prior to the actual transfer of
ownership or control;
(D)(i) due to incapacity or death, none of 1 or more
individuals on whom eligibility was based is able to
continue to exercise control of the program
participant; and
(ii) the Administrator is requested to waive
subsection (a) as soon as possible after the incapacity
or death occurs; or
(E)(i) to raise equity capital, it is necessary for
the disadvantaged owner of the program participant to
transfer ownership of a majority of the voting stock of
the program participant;
(ii) the program participant has exited the program;
(iii) the disadvantaged owner will maintain ownership
of the largest single outstanding block of voting stock
(including stock held by affiliated persons); and
(iv) the disadvantaged owner will maintain control of
daily business operations of the program participant.
(2) Nondelegability.--The authority of the Administrator
under paragraph (1) may not be delegated.
(c) Notification of Agreement To Transfer.--The owner of a program
participant that is performing a contract awarded under the program
shall notify the Administrator immediately on entering into an oral or
written agreement to transfer all or part of the stock or other
ownership interest in the program participant to any other person.
(d) Treatment of Certain Potential Ownership Interests.--
Notwithstanding any other provision of law, for the purposes of
determining ownership and control of a program participant, any
potential ownership interest held by an investment company licensed
under subtitle III shall be treated in the same manner as an interest
held by the individuals on whom eligibility is based.
(e) Continued Eligibility.--A program participant shall remain
eligible for contracts under the program if there is a transfer of
ownership and control to individuals whom the Administrator determines
to be socially and economically disadvantaged. In the event of such a
transfer, the transferee program participant, if not terminated or
graduated, shall be eligible for a period of continued participation in
the program for the remainder of the program participation period of
the transferor.
Sec. 233117. Assistance for program participants
(a) In General.--The Administrator shall--
(1) assist program participants in developing and maintaining
comprehensive business plans that specify the program
participant's specific business targets, objectives, and goals
developed and maintained in conformity with section 233118 of
this title;
(2) provide for such other nonfinancial services as the
Administrator considers necessary for the establishment,
preservation, and growth of program participants;
(3) assist program participants in obtaining equity and debt
financing;
(4) establish regular performance monitoring and reporting
systems for program participants to ensure compliance with
their business plans;
(5) analyze and report the causes of success and failure of
program participants; and
(6) provide assistance necessary to help program participants
procure surety bonds.
(b) Nonfinancial Services.--Nonfinancial services provided under
subsection (a)(2) may include--
(1) loan packaging;
(2) financial counseling;
(3) accounting and bookkeeping assistance;
(4) marketing assistance; and
(5) management assistance.
(c) Surety Bonds.--Assistance provided under subsection (a)(6) may
include--
(1) assistance in the preparation of application forms
required to receive a surety bond;
(2) special management and technical assistance designed to
meet the specific needs of program participants that have
received or are applying for a surety bond; and
(3) preparation of all forms necessary to receive a surety
bond guarantee under chapter 321.
(d) Outreach Program.--
(1) In general.--The Administrator shall develop and
implement an outreach program to inform and recruit small
business concerns to apply for eligibility for assistance under
the program.
(2) Activities.--The outreach program shall make a sustained
and substantial effort to solicit applications for
certification from--
(A) 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
(B) small disadvantaged business concerns in industry
categories that have not substantially participated in
the award of contracts under the program.
Sec. 233118. Business plans
(a) Submission.--Promptly after certification under section 233125 of
this title, a program participant shall submit a business plan for
review by the business opportunity specialist assigned to assist the
program participant.
(b) Form; Objective.--A business plan--
(1) 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 the program; and
(2) shall be designed to result in the elimination by the
program participant of the conditions or circumstances on which
the Administrator determined eligibility under paragraph (8) or
(16) of section 231101 of this title.
(c) Approval of Business Plan as Condition on Contract Award.--Prior
approval of a business plan by the business opportunity specialist, and
of subsequent modifications submitted under subsection (e), shall be a
condition on the eligibility of a program participant for award of a
contract under the program.
(d) Contents.--A business plan shall include--
(1) 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;
(2) an analysis of the program participant's strengths and
weaknesses, with particular attention to correcting any
financial, managerial, technical, or personnel conditions that
are likely to impede the program participant in receiving
contracts other than contracts awarded under the program;
(3) specific targets, objectives, and goals for the business
development of the program participant during the next and
succeeding years using the results of the analyses conducted
under paragraphs (1) and (2);
(4) a transition management plan outlining specific steps to
ensure profitable business operations after graduation (to be
incorporated into the program participant's plan during the 1st
year of the transitional stage of program participation); and
(5) estimates of contract awards under the program and from
other sources that the program participant will require to meet
the specific targets, objectives, and goals for the years
covered by the business plan, which estimates shall be
consistent with section 233128 of this title and other
applicable provisions of this chapter.
(e) Annual Review.--
(1) In general.--A program participant shall annually review
its currently approved business plan with its business
opportunity specialist and modify the business plan as
appropriate.
(2) Approval.--
(A) Submission.--A modified business plan shall be
submitted to the Administrator for approval.
(B) Continued validity of current plan.--The
currently approved business plan shall be valid until
such time as a modified business plan is approved by
the business opportunity specialist.
(3) Transitional stage.--Annual reviews pertaining to years
in the transitional stage of program participation shall
require, as appropriate, a written verification that the
program participant has complied with the requirements of
section 233128 of this title relating to attaining business
activity from sources other than contracts awarded under the
program.
(f) Annual Needs Forecast.--
(1) In general.--During the review of its plan conducted
under subsection (e), a program participant shall annually
forecast its needs for contract awards under the program for
the next program year and the succeeding program year.
(2) Inclusion in business plan.--An annual needs forecast
shall be included in a program participant's business plan.
(3) Contents.--An annual needs forecast shall include--
(A) the aggregate dollar value of contract support to
be sought on a noncompetitive basis under the program,
reflecting compliance with the requirements of section
233128 of this title relating to attaining business
activity from sources other than contracts awarded
under the program;
(B) the types of contract opportunities being sought,
identified by North American Industry Classification
System code or otherwise;
(C) an estimate of the dollar value of contract
support to be sought on a competitive basis; and
(D) such other information the business opportunity
specialist may request to provide effective business
development assistance to the program participant.
(g) Logical Business Progression.--Limitations established by the
Administrator restricting the award of contracts under the program 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 in which the program participant has
potential for success.
Sec. 233119. Denial of further assistance
(a) In General.--A program participant shall be denied any assistance
under the program if the program participant--
(1) voluntarily elects not to continue participation;
(2) completes its program participation period;
(3) is graduated; or
(4) is terminated.
(b) No Subsequent Recertification.--If participation in the program
by a program participant is concluded for any of the reasons described
in subsection (a), the former program participant shall not
subsequently be recertified for participation in the program.
Sec. 233120. Graduation
A program participant shall be graduated from the program--
(1) when a program participant successfully completes the
program by substantially achieving the targets, objectives, and
goals contained in the program participant's business plan,
thereby demonstrating the ability of the program participant to
compete in the marketplace without assistance under the
program; or
(2) if, in a review of economic disadvantage under section
233110(a) of this title, the Administrator determines that the
program participant and its disadvantaged owners are no longer
economically disadvantaged.
Sec. 233121. Termination
(a) Basis for Termination.--
(1) In general.--Termination from the program shall be based
on good cause.
(2) Good cause.--For purposes of paragraph (1), good cause
includes--
(A) the failure of a program participant to maintain
eligibility for program participation;
(B) the failure of a program participant 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
program;
(C) a demonstrated pattern of failing to make
required submissions or responses to the Administrator
in a timely manner;
(D) the willful violation of any regulation of the
Administrator pertaining to a material issue;
(E) the debarment of a program participant or its
disadvantaged owners by any agency under subpart 9.4 of
title 48, Code of Federal Regulations (or any successor
regulation); and
(F) the conviction of the disadvantaged owner or an
officer of a program participant for an offense
indicating a lack of business integrity (including a
conviction for embezzlement, theft, forgery, bribery,
falsification, or violation of chapter 105).
(3) Termination for conviction.--For purposes of paragraph
(2)(F), a termination action shall not be taken with respect to
a disadvantaged owner of a program participant solely because
of the conviction of an officer of the program participant (who
is not a disadvantaged owner) unless the disadvantaged owner
conspired with, abetted, or otherwise knowingly acquiesced in
the activity or omission that was the basis of the officer's
conviction.
(b) Procedure.--
(1) Initiation of proceeding.--The Director may initiate a
termination proceeding by recommending a termination proceeding
to the Associate Administrator.
(2) Notice of intent to terminate.--If the Associate
Administrator determines that termination is appropriate, the
Associate Administrator shall, not later than 15 days after
making the determination, provide the program participant
written notice of intent to terminate, specifying the reasons
for the termination.
Sec. 233122. Evaluation of eligibility
(a) In General.--The Administrator shall conduct an evaluation of a
program participant's eligibility for continued participation in the
program whenever the Administrator receives specific and credible
information alleging that the program participant no longer meets the
requirements for program eligibility.
(b) Termination Proceeding.--On making a finding that a program
participant is no longer eligible, the Administrator shall initiate a
termination proceeding under section 233121 of this title.
(c) Suspension.--A program participant's eligibility for award of a
contract under the program may be suspended under subpart 9.4 of title
48, Code of Federal Regulations (or any successor regulation).
Sec. 233123. Limitation of eligibility to 1 small business concern
(a) Determination of Social and Economic Disadvantage.--Except as
provided in subsection (c), an individual who was determined to be
socially and economically disadvantaged before August 15, 1989, shall
not be permitted to assert such disadvantage with respect to any other
concern making application for certification as a small business
concern owned and controlled by socially and economically disadvantaged
individuals.
(b) Eligibility as a Socially and Economically Disadvantaged Small
Business Concern.--Except as provided in subsection (c), an individual
on whom eligibility as a small business concern owned and controlled by
socially and economically disadvantaged individuals is based under
section 231101(15) of this title shall be permitted to assert such
eligibility for only 1 small business concern.
(c) Exception.--An economically disadvantaged Indian tribe may own
more than 1 small business concern eligible for assistance under the
program if--
(1) the Indian tribe does not own another concern in the same
industry that has been determined to be eligible to receive
contracts under the program; and
(2) the individuals responsible for the management and daily
operations of the concern do not manage more than 2 program
participants.
Sec. 233124. Limitation on denial of admission into program based on
unavailability of specific contract opportunities
An applicant shall not be denied admission into the program based
solely on a determination that specific contract opportunities are
unavailable to assist in the development of the applicant unless--
(1) the Government has not previously procured and is
unlikely to procure the types of products or services offered
by the applicant; or
(2) the purchases of such products or services by the
Government will not be in quantities sufficient to support the
developmental needs of the applicant and other program
participants providing the same or similar products or
services.
Sec. 233125. Certification decision
Not later than 90 days after receipt of a completed application for
program certification, the Associate Administrator shall--
(1) certify a small business concern as a program
participant; or
(2) deny the application.
Sec. 233126. Review of new entrants into the program
(a) Review.--Thirty days before the conclusion of each fiscal year,
the Director shall review all small business concerns that have been
admitted into the program during the preceding 12-month period.
(b) Determination and Estimate.--In a review under subsection (a),
the Director shall--
(1) determine the number of entrants and their geographic
distribution and industrial classification; and
(2) estimate--
(A) the expected growth of the program during the
next fiscal year; and
(B) the number of additional business opportunity
specialists, if any, that will be needed to meet the
anticipated demand for the program.
(c) Report.--Not later than September 30 of each year, the Director
shall report to the Associate Administrator the determination and
estimates made under subsection (b).
(d) Directives.--
(1) In general.--Based on the report under subsection (c) and
such additional data as are relevant, the Associate
Administrator shall, not later than October 31 of each fiscal
year, issue policy and program directives applicable to the
fiscal year that--
(A) establish priorities for the solicitation of
program applications from underrepresented regions and
industry categories;
(B) assign staffing levels and allocate other program
resources as necessary to meet program needs; and
(C) establish priorities in the processing and
admission of new program participants as necessary to
achieve an equitable geographic distribution of small
business 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.
(2) Considerations.--In considering an increase described in
paragraph (1)(C), the Associate Administrator shall give due
consideration to industrial categories in which Federal
purchases have been substantial but in which the participation
rate of small business concerns owned and controlled by
socially and economically disadvantaged individuals has been
limited.
Sec. 233127. Program stages
(a) In General.--The Administrator shall segment a program
participant's participation in the program into a developmental stage
and a transitional stage.
(b) Developmental Stage.--The developmental stage of program
participation shall be designed to assist a program participant in its
effort to overcome its economic disadvantage by providing such
assistance as is necessary and appropriate to access markets and
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 a
program participant for graduation from the program.
(d) Available Assistance.--
(1) In general.--A program participant, if otherwise
eligible, shall be qualified to receive assistance as provided
in this subsection.
(2) Contract support.--A program participant in the
developmental stage or transitional stage shall be qualified to
receive contract support under the program.
(3) Financial assistance.--A program participant in the
developmental stage or transitional stage shall be qualified to
receive financial assistance under section 205111 of this
title.
(4) Employee skills training or upgrading.--
(A) Definition of training provider.--In this
paragraph, the term ``training provider'' means an
institution of higher education, a community or
vocational college, or an institution eligible to
provide skills training or upgrading under title I of
the Workforce Innovation and Opportunity Act (29 U.S.C.
3101 et seq.).
(B) In general.--A program participant in the
developmental stage shall be qualified to receive
financial assistance under which the Administrator may,
without regard to section 103201(l) of this title,
purchase in whole or in part, on behalf of the program
participant, skills training or upgrading for employees
or potential employees of the program participant.
(C) Form of assistance.--Financial assistance under
subparagraph (B) may be made--
(i) by direct payment to the training
provider; or
(ii) by reimbursing the program participant
or the program participant's employee, if the
Administrator considers reimbursement to be
reasonable and appropriate.
(D) Limitation.--Financial assistance under
subparagraph (B) shall not be granted to a program
participant unless the program participant first
documents that the program participant has 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.
(E) Number of employees.--Not more than 5 employees
or potential employees of the program participant shall
receive skills training or upgrading under subparagraph
(B) at any 1 time.
(F) Amount.--Not more than $2,500 shall be made
available for any 1 employee or potential employee for
skills training or upgrading under subparagraph (B).
(G) Length of training or upgrading.--The length of
training or upgrading financed under subparagraph (B)
shall be not less than 1 nor more than 6 months.
(H) Length of employment.--
(i) Assurances.--Financial assistance under
subparagraph (B) shall not be granted to a
program participant unless--
(I) the program participant has given
adequate assurance that it will employ
the trainee or upgraded employee for a
period of at least 6 months after the
training or upgrading financed under
subparagraph (B) has been completed;
and
(II) each trainee or upgraded
employee has given a similar assurance
to remain within the employ of the
program participant for that period.
(ii) Breach.--If a program participant,
trainee, or upgraded employee fails to fulfill
the assurance under clause (i)--
(I) the Administrator shall be
entitled to, and shall make diligent
efforts to obtain from the violating
program participant, trainee, or
upgraded employee, the repayment of all
funds expended on behalf of the program
participant, trainee, or upgraded
employee;
(II) such repayment shall be made to
the Administrator with such interest
and costs of collection as are
reasonable; and
(III) the program participant,
trainee, or upgraded employee shall be
barred from receiving any further
assistance under subparagraph (B).
(I) Location.--Training or upgrading financed under
subparagraph (B) may take place at a facility of the
program participant or of the training provider.
(J) Records.--A program participant that receives
assistance under subparagraph (B) shall maintain such
records as the Administrator considers appropriate to
ensure that this subsection and any other applicable
law have not been violated.
(K) Regulations.--The Administrator shall, in
consultation with the Secretary of Labor, promulgate
regulations to implement this paragraph that establish
acceptable training and upgrading performance standards
and provide for such monitoring or audit requirements
as are necessary to ensure the integrity of the
training effort.
(5) Technology and surplus property transfer.--
(A) In general.--A program participant in the
developmental stage or transitional stage shall be
qualified to receive the transfer of technology or
surplus property owned by the United States.
(B) Effectuation.--Activities designed to effect
transfers under subparagraph (A)--
(i) shall be developed in cooperation with
the heads of Federal agencies; and
(ii) shall include the transfer by grant,
license, or sale of technology or property to
program participants.
(C) Priority.--Property under subparagraph (A) may be
transferred to program participants on a priority
basis.
(D) Use.--Technology or property transferred under
subparagraph (A)--
(i) shall be used by a program participant
during the normal conduct of its business
operation; and
(ii) shall not be sold or transferred to any
other person (other than the Government) until
1 year after the program participant's term of
participation.
(E) Federal surplus property.--
(i) In general.--The Administrator may
transfer technology or surplus property under
this paragraph on a priority basis to a small
business concern located in a disaster area
if--
(I) the small business concern meets
the requirements for such a transfer,
without regard to whether the small
business concern is a program
participant; and
(II) for a small business concern
that is a program participant, on and
after the date on which the President
declares a major disaster, the small
business concern has not received
property under this paragraph on the
basis of the status of the small
business concern as a program
participant.
(ii) Terms and conditions.--For any transfer
of property under this subparagraph to a small
business concern, the terms and conditions
shall be the same as a transfer to a program
participant, except that the small business
concern shall agree not to sell or transfer the
property to any entity other than the Federal
Government during the period of the declaration
of the disaster area.
(iii) No other transfer.--A small business
concern that receives a transfer of property
under this subparagraph shall not receive any
other transfer of property under this paragraph
during the period of the declaration of the
disaster area.
(iv) Violation.--If a small business concern
sells or transfers property in violation of the
agreement described in clause (ii), the
Administrator may initiate proceedings to
prohibit the small business concern from
receiving a transfer of property under this
paragraph, in addition to any other remedy
available to the Administrator.
(6) Training in the development of business principles and
strategies.--A program participant in the developmental stage
or transitional stage shall be qualified to receive training
assistance under which the Administrator shall conduct training
sessions to assist program participants in the development of
business principles and strategies to enhance their ability to
compete successfully for contracts in the marketplace.
(7) Participation in joint ventures, leader-follower
arrangements, and teaming agreements.--
(A) In general.--A program participant in the
transitional stage shall be qualified to participate in
joint ventures, leader-follower arrangements, and
teaming agreements between the program participant and
other program participants and other business concerns
with respect to contracting opportunities for the
research, development, full-scale engineering, or
production of major systems.
(B) Agency programs.--Activities under subparagraph
(A) shall be undertaken on the basis of programs
developed by the Federal agency responsible for the
procurement of the major system, with the assistance of
the Administrator.
(8) Business planning training and technical assistance.--A
program participant in the transitional stage shall be
qualified to receive transitional management business planning
training and technical assistance.
Sec. 233128. Attainment of business activity targets
(a) Developmental Stage.--During the developmental stage of
participation in the program, a program participant shall take all
reasonable efforts within its control to attain the business activity
targets contained in its business plan. Those 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 a
reasonable marketing strategy that will maximize its potential to
attain its business activity targets.
(b) Transitional Stage.--
(1) In general.--During the transitional stage of
participation in the program, a program participant shall be
subject to regulations regarding business activity targets that
are promulgated by the Administrator.
(2) Establishment of business activity targets.--The
regulations under paragraph (1) shall establish business
activity targets applicable to program participants during the
5th year and each succeeding year of program participation. The
business activity targets, for that period of time, shall
reflect a reasonably consistent increase in contracts awarded
other than under the program, expressed as a percentage of
total sales.
(3) Attainment.--The regulations under paragraph (1) shall
require a program participant to attain its business activity
targets.
(4) Certification of compliance.--The regulations under
paragraph (1) shall provide that, before the receipt of any
contract to be awarded under the program, the program
participant (if it is in the transitional stage) shall certify
that it--
(A) has complied with the regulations; or
(B) is in compliance with such remedial measures as
have been ordered under regulations promulgated under
paragraph (6).
(5) Performance review.--The regulations under paragraph (1)
shall require the Administrator to review a program
participant's performance regarding attainment of business
activity targets during periodic reviews of the program
participant's business plan.
(6) Remedial measures.--
(A) In general.--The regulations under paragraph (1)
shall authorize the Administrator to take appropriate
remedial measures with respect to a program participant
that fails to attain a required business activity
target for the purpose of reducing the program
participant's dependence on contracts awarded under the
program.
(B) Measures.--Remedial measures may include--
(i) assisting the program participant in
expanding the dollar volume of its competitive
business activity; and
(ii) limiting the dollar volume of contracts
awarded to the program participant under the
program.
(C) Nonreviewability.--Except for a remedial measure
that would constitute a termination, a remedial measure
taken under this paragraph shall not be reviewable
under section 233111 of this title.
Sec. 233129. Program participation period
A program participant may receive assistance under the program for a
total period of not more than 9 years, measured from the date of its
certification under section 233125 of this title, of which--
(1) not more than 4 years may be spent in the developmental
stage of program participation; and
(2) not more than 5 years may be spent in the transitional
stage of program participation.
Sec. 233130. Collection of data on program operations
The Administrator shall develop and implement a process for the
systematic collection of data on the operations of the program.
Sec. 233131. Approval of contract options and modifications
The Administrator shall make substantial and sustained efforts to
achieve a maximum 10-day period as the average processing time for
approving options and modifications to contracts awarded under the
program and submitted to the Administrator for approval.
Sec. 233132. Orderly and efficient management of program
The Administrator shall, to the maximum extent practicable, minimize
delay, eliminate excess regulation, and require only such paperwork as
is necessary to effect the orderly and efficient management of the
program and the award of contracts under the program.
Sec. 233133. Participation in federally funded programs and projects
(a) In General.--A small business concern that is certified, or
otherwise meets the criteria for participation in any program under the
program, shall not be required by any State or political subdivision of
a State to meet additional criteria or certification, unrelated to the
capability to provide the requested product or service, to participate
as a small business concern owned and controlled by socially and
economically disadvantaged individuals in any program or project that
is funded, in whole or in part, by the Federal Government.
(b) Notice of Participation by the Secretary of Transportation.--The
Secretary of Transportation shall notify each State or political
subdivision of a State to which the Secretary of Transportation awards
a grant or other Federal funds of the criteria for participation by a
small business concern owned and controlled by socially and
economically disadvantaged individuals in any program or project that
is funded, in whole or in part, by the Federal Government.
Chapter 235--Technical and Management Assistance
Sec.
235101. Financial assistance for projects providing technical or
management assistance.
235102. Eligible projects.
235103. Location of service.
Sec. 235101. Financial assistance for projects providing technical or
management assistance
(a) In General.--The Administrator shall provide financial assistance
to public or private organizations to pay all or part of the cost of
projects designed to provide technical or management assistance to
program participants, with special attention to small business concerns
located in areas with high proportions of unemployed or low-income
individuals.
(b) Form of Assistance.--The financial assistance authorized for
projects under this chapter includes assistance advanced by grant,
agreement, or contract.
(c) Payment.--The Administrator may make payments under a grant or
contract under this chapter in lump sum or installments, and in advance
or by way of reimbursement, and in the case of grants, with necessary
adjustments on account of overpayments or underpayments.
Sec. 235102. Eligible projects
(a) In General.--Financial assistance under this chapter may be
provided for projects, including projects for--
(1) planning and research, including feasibility studies and
market research;
(2) the identification and development of new business
opportunities;
(3) the furnishing of centralized services with regard to
public services and Federal Government programs including the
programs authorized under this division and section 205111 of
this title;
(4) the establishment and strengthening of business service
agencies, including trade associations and cooperatives; and
(5) the furnishing of business counseling, management
training, and legal and other related services, with special
emphasis on the development of management training programs
using the resources of the business community (including the
development of management training opportunities in existing
business) and with emphasis in all cases on providing
management training of sufficient scope and duration to develop
entrepreneurial and managerial self-sufficiency on the part of
the individuals served.
(b) Preference.--The Administrator shall give preference to projects
that promote the ownership, participation in ownership, or management
of small business concerns owned by program participants.
Sec. 235103. Location of service
To the extent feasible, service under this chapter shall be provided
in a location that is easily accessible to the program participants
served.
Division G--Procurement Assistance
Chapter 241--General Provisions
Sec.
241101. Definition of executive agency.
241102. Authority.
241103. Technical, managerial, and informational aids.
241104. Inventory of productive facilities.
241105. Utilization of productive capacity.
241106. Subcontracting to small business concerns.
241107. Size certification.
241108. Responsibility certification.
241109. Information pertaining to Federal procurement or production.
241110. Information pertaining to disposal of Federal property.
241111. Information pertaining to supplies of materials.
241112. Fair proportions of business for small business concerns.
241113. Fair and reasonable treatment of small business concerns.
241114. Information and assistance pertaining to federally aided urban
renewal projects.
241115. Dissemination of information by the Administrator.
241116. Availability of information from Federal agencies.
241117. Adjustment of regulations and programs to the needs of small
business concerns.
241118. Outreach programs for disabled veterans, veterans, and
reservists.
241119. Consolidation of contract requirements.
Sec. 241101. Definition of executive agency
In this division, the term ''executive agency'' has the meaning given
the term in section 133 of title 41.
Sec. 241102. Authority
The Administrator shall take an action under this chapter when the
Administrator determines that the action is necessary.
Sec. 241103. Technical, managerial, and informational aids
(a) In General.--
(1) Activities.--The Administrator shall provide technical,
managerial, and informational aids to small business concerns--
(A) by advising and counseling on matters in
connection with Government procurement and policies,
principles, and practices of good management;
(B) by cooperating and advising with--
(i) voluntary business, professional,
educational, and other nonprofit organizations,
associations, and institutions; and
(ii) other Federal and State agencies;
(C) by maintaining a clearinghouse for information on
managing, financing, and operating small business
concerns; and
(D) by disseminating such information, including
through recognition events, and by other activities
that the Administrator determines to be appropriate.
(2) No endorsement; appropriate recognition.--In cooperating
and advising with an entity under paragraph (1)(B)(i), the
Administrator shall take such actions as the Administrator
determines to be necessary to ensure that--
(A) the cooperation does not constitute or imply an
endorsement by the Administrator of the entity or its
products or services; and
(B) SBA receives appropriate recognition in all
printed material.
(3) For-profit concerns.--The Administrator may provide
technical, managerial, and informational aids to small business
concerns through cooperation with a for-profit concern
(referred to in this paragraph as a ``cosponsor'') if the
Administrator--
(A) takes such action as the Administrator determines
to be appropriate to ensure that--
(i) SBA receives appropriate recognition and
publicity;
(ii) the cooperation does not constitute or
imply an endorsement by the Administrator of
any product or service of the cosponsor;
(iii) unnecessary promotion of the products
or services of the cosponsor is avoided; and
(iv) the use of any 1 cosponsor in a
marketing area is minimized; and
(B) develops an agreement, executed on behalf of the
Administrator by an employee of SBA in Washington, the
District of Columbia, that, at a minimum--
(i) specifies the terms and conditions of the
cooperation; and
(ii) provides that--
(I) any printed material to announce
the cosponsorship or to be distributed
at the cosponsored activity shall be
approved in advance by the
Administrator;
(II) only minimal charges may be
imposed on any small business concern
to cover the direct costs of providing
the assistance;
(III) the Administrator may provide
to the cosponsor mailing labels but not
lists of names and addresses of small
business concerns compiled by the
Administrator;
(IV) all printed materials containing
the names of both SBA and the cosponsor
shall include a prominent disclaimer
that the cooperation does not
constitute or imply an endorsement by
the Administrator of any product or
service of the cosponsor; and
(V) SBA shall receive appropriate
recognition in all cosponsorship
printed materials.
(b) Volunteer Programs.--
(1) In general.--In carrying out this section, the
Administrator shall establish, conduct, and publicize, and
recruit, select, and train volunteers for, and enter into
contracts, grants, or cooperative agreements for, volunteer
programs, including a service corps of retired executives and
an active corps of executives for the purposes of subsection
(a).
(2) Staff.--To facilitate the implementation of the volunteer
programs, the Administrator shall, to the extent and in such
amounts as are provided in advance in appropriation Acts,
maintain at SBA headquarters, and pay the salaries, benefits,
and expenses of, a volunteer and professional staff to manage
and oversee the volunteer programs.
(3) Contributions.--Notwithstanding any other provision of
law, SCORE may--
(A) solicit cash and in-kind contributions from the
private sector to be used to carry out its functions
under this subtitle; and
(B) use payments made by the Administrator under this
subsection for such solicitation and management of the
contributions received.
(c) Use of SBA Facilities.--The Administrator shall allow any
individual or group of persons participating with the Administrator in
furtherance of this section to use such of SBA's office facilities and
related material and services (including clerical and stenographic
services) as the Administrator considers appropriate.
(d) Volunteers Deemed To Be Federal Employees for Federal Tort Claims
Purposes.--A volunteer, while carrying out an activity under this
section, shall be deemed to be a Federal employee for purposes of
chapter 171 of title 28.
(e) Volunteers Deemed To Be Civil Employees for Work Injury
Compensation Purposes.--A volunteer, while carrying out an activity
under this section, shall, for purposes of subchapter I of chapter 81
of title 5 (relative to compensation to Federal employees for work
injuries), be deemed to be a civil employee of the United States within
the meaning of the term ``employee'' as defined in section 8101 of
title 5, and that subchapter shall apply except that in computing
compensation benefits for disability or death, the monthly pay of a
volunteer shall be deemed to be that received under the entrance salary
for a grade GS-11 employee.
(f) Reimbursement of Volunteers.--
(1) In general.--The Administrator may reimburse a volunteer
carrying out an activity under this section for--
(A) all necessary out-of-pocket expenses incident to
the volunteer's provision of services under this
subtitle, or in connection with attendance at a meeting
sponsored by SBA;
(B) the cost of malpractice insurance, as the
Administrator shall determine, in accordance with
regulations that the Administrator shall prescribe; and
(C) travel expenses (including per diem in lieu of
subsistence) as authorized by section 5703 of title 5
for individuals serving without pay, while the
volunteer is carrying out such an activity away from
the volunteer's home or regular place of business.
(2) Treatment of payments.--Notwithstanding any other
provision of law, no payment for supportive services or
reimbursement of out-of-pocket expenses made to a volunteer
serving under this section 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.
(g) Limitation on Provision of Services to Persons With a Delinquent
Loan.--A volunteer carrying out an activity under this section shall
not provide any service to a person with a loan under this subtitle
that is delinquent except on a specific request for assistance signed
by the person in connection with the delinquency.
(h) Grants for Business Counseling and Assistance.--
(1) In general.--In carrying out this section, the
Administrator may make a grant to, or enter into a contract or
cooperative agreement with, a 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.
(2) Educational credits.--A student engaged in an activity
funded under paragraph (1) shall be entitled to receive
educational credit for the activity.
(i) Payment of Expenses in Judicial or Administrative Proceedings.--
Notwithstanding any other provision of law and in accordance with
regulations that the Administrator shall prescribe, in a judicial or
administrative proceeding arising directly out of the performance of an
activity under this section to which a volunteer is made a party, the
Administrator may employ counsel and pay counsel fees, court costs,
bail, and other expenses incidental to the defense of the volunteer.
Sec. 241104. Inventory of productive facilities
(a) In General.--The Administrator shall--
(1) make a complete inventory of all productive facilities of
small business concerns; or
(2) arrange for such an inventory to be made by any other
governmental agency that has the facilities.
(b) Information From State Agencies.--In making an inventory under
subsection (a), the Administrator or other governmental agency may
request an appropriate agency of a State to furnish an inventory of the
productive facilities of small business concerns in the State if such
an inventory is available or in prospect.
Sec. 241105. Utilization of productive capacity
The Administrator shall--
(1) coordinate and ascertain the means by which the
productive capacity of small business concerns can be most
effectively utilized; and
(2) consult and cooperate with officers of the Government
having procurement or property disposal powers, in order to
utilize the potential productive capacity of plants operated by
small business concerns.
Sec. 241106. Subcontracting to small business concerns
The Administrator shall--
(1) obtain information concerning methods and practices that
Government prime contractors utilize in letting subcontracts;
and
(2) take action to encourage the letting of subcontracts by
prime contractors to small business concerns at prices and on
terms and conditions that are fair and equitable.
Sec. 241107. Size certification
(a) In General.--The Administrator shall determine within any
industry the concerns that qualify as a small business concern for
purposes of this subtitle.
(b) Issuance of Certificate.--When requested to do so, the
Administrator shall issue a certificate certifying a concern as a small
business concern in accordance with the criteria stated in section
101103 of this title.
(c) Revocation of Certificate.--A certificate issued under subsection
(b) shall be subject to revocation when the concern covered by the
certificate ceases to qualify as a small business concern.
(d) Conclusive Determination.--An officer of the Government having
procurement or lending power, 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 Administrator's determination whether a
concern qualifies as a small business concern.
Sec. 241108. Responsibility certification
(a) Definitions.--In this section:
(1) Contracting officer.--The term ``contracting officer''
means--
(A) a contracting officer; and
(B) any other officer engaged in the sale and
disposal of Federal property.
(2) Responsibility.--The term ``responsibility'' includes
capability, competency, capacity, credit, integrity,
perseverance, and tenacity.
(b) Certification.--The Administrator shall certify to a contracting
officer with respect to all elements of the responsibility of a small
business concern or group of small business concerns to receive and
perform a specific Government contract.
(c) No Preclusion From Award of Contract Without Referral to the
Administrator.--A contracting officer may not, for any reason relating
to an element of responsibility as determined under subsection (b),
preclude a small business concern or group of small business concerns
from being awarded a contract without referring the matter for a final
disposition to the Administrator.
(d) Conclusive Determination.--A contracting officer shall--
(1) accept as conclusive a certification made under
subsection (b) as to the specific Government contract with
respect to which the certification is made; and
(2) let the contract to the small business concern or group
of small business concerns without requiring the small business
concern or group of small business concerns to meet any other
requirement of responsibility or eligibility.
(e) No Exemption.--The Administrator may not establish an exemption
from referral or notification or refuse to accept a referral or
notification from a contracting officer made under subsection (c), but
nothing in this section requires the processing of an application for
certification if the small business concern to which the referral
pertains declines to have the application processed.
Sec. 241109. Information pertaining to Federal procurement or
production
The Administrator shall obtain from any Federal 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 the Administrator considers
pertinent in carrying out the functions of the Administrator under this
subtitle and subtitle I.
Sec. 241110. Information pertaining to disposal of Federal property
The Administrator shall obtain from any Federal agency engaged in the
disposal of Federal property such reports concerning the solicitation
of bids, time of sale, or otherwise as the Administrator considers
pertinent in carrying out the functions of the Administrator under this
subtitle and subtitle I.
Sec. 241111. Information pertaining to supplies of materials
The Administrator shall obtain from suppliers of materials
information pertaining to the method of filling orders for materials,
and the bases for allocating their supplies of materials, when it
appears that a small business concern is unable to obtain material from
its normal sources.
Sec. 241112. Fair proportions of business for small business concerns
The Administrator shall make studies and recommendations to the
appropriate Federal agencies to ensure that--
(1) a fair proportion of the total purchases and contracts
for property and services for the Government is placed with
small business concerns;
(2) a fair proportion of Government contracts for research
and development is placed with small business concerns;
(3) a fair proportion of the total sales of Government
property is made to small business concerns; and
(4) a fair and equitable share of materials, supplies, and
equipment is available to small business concerns.
Sec. 241113. Fair and reasonable treatment of small business concerns
The Administrator shall consult and cooperate with all Federal
agencies for the purpose of ensuring that small business concerns
receive fair and reasonable treatment from Federal agencies.
Sec. 241114. Information and assistance pertaining to federally aided
urban renewal projects
The Administrator shall provide at the earliest practicable time such
information and assistance as are appropriate (including information
concerning eligibility for loans under section 221103 of this title) to
local public agencies (as defined in section 110(h) of the Housing Act
of 1949 (42 U.S.C. 1460(h))) and to small business concerns to be
displaced by federally aided urban renewal projects in order to assist
the small business concerns in reestablishing operations.
Sec. 241115. Dissemination of information by the Administrator
(a) In General.--The Administrator shall disseminate, without regard
to section 3204 of title 39, information, in such form as the
Administrator considers appropriate, to public agencies, private
organizations, and the general public.
(b) Information on Federal Procurement Practices.--The Administrator
shall, for each fiscal year--
(1) collect information concerning the procurement practices
and procedures of each Federal agency having procurement
authority;
(2) publish and disseminate the information to contracting
officers in all Federal agencies; and
(3) make the information available to any small business
concern that requests the information.
Sec. 241116. Availability of information from Federal agencies
(a) Requests for Information.--For any contract to be let by any
Federal agency, the Federal agency shall provide to any small business
concern, on request by the small business concern--
(1) a copy of bid sets and specifications with respect to the
contract;
(2) the name and telephone number of an employee of the
Federal agency to answer questions with respect to the
contract; and
(3) adequate citations to each major Federal law (including a
regulation) with which the small business concern must comply
in performing the contract.
(b) Exempt Contracts.--Subsection (a) does not apply to a contract
(or subcontract) that--
(1) will be performed entirely outside the United States; or
(2) is for services that are personal in nature.
Sec. 241117. Adjustment of regulations and programs to the needs of
small business concerns
The Administrator shall--
(1) make studies of matters materially affecting the
competitive strength of small business concerns and of the
effect on small business concerns of Federal laws (including
regulations) and programs; and
(2) make recommendations to Federal agencies as appropriate
for the adjustment of regulations and programs to the needs of
small business concerns.
Sec. 241118. Outreach programs for disabled veterans, veterans, and
reservists
(a) In General.--The Administrator shall make grants to, and enter
into contracts and cooperative agreements with, educational
institutions, private businesses, veterans' nonprofit community-based
organizations, and Federal agencies and State and local agencies for
the establishment and implementation of outreach programs for disabled
veterans, veterans, and reservists.
(b) Increase in Number of Veterans Business Outreach Centers.--The
Administrator shall use the authority under subsection (a) to ensure
that the number of veterans business outreach centers throughout the
United States increases by the number that the Administrator considers
appropriate, based on need, for each fiscal year.
Sec. 241119. Consolidation of contract requirements
(a) Decisions Regarding Consolidation of Contract Requirements.--The
head of a Federal agency shall ensure that the decisions made by the
Federal agency regarding consolidation of contract requirements of the
Federal agency are made with a view to providing small business
concerns with appropriate opportunities to participate as prime
contractors and subcontractors in the procurements of the Federal
agency.
(b) Limitation on Use of Acquisition Strategies Involving
Consolidation.--
(1) In general.--The head of a Federal agency shall not carry
out an acquisition strategy that includes a consolidation of
contract requirements of the Federal agency with a total value
of more than $2,000,000 unless the senior procurement executive
or Chief Acquisition Officer for the Federal agency, before
carrying out the acquisition strategy--
(A) conducts market research;
(B) identifies any alternative contracting approaches
that would involve a lesser degree of consolidation of
contract requirements;
(C) makes a written determination that the
consolidation of contract requirements is necessary and
justified;
(D) identifies any negative impact by the acquisition
strategy on contracting with small business concerns;
and
(E) ensures that steps will be taken to include small
business concerns in the acquisition strategy.
(2) Determination that consolidation is necessary and
justified.--
(A) In general.--A senior procurement executive or
Chief Acquisition Officer may determine that an
acquisition strategy involving a consolidation of
contract requirements is necessary and justified for
the purposes of paragraph (1)(C) if the benefits of the
acquisition strategy substantially exceed the benefits
of each of the possible alternative contracting
approaches identified under paragraph (1)(B).
(B) Savings in administrative or personnel costs.--
For purposes of subparagraph (A), savings in
administrative or personnel costs alone do not
constitute a sufficient justification for a
consolidation of contract requirements in a procurement
unless the expected total amount of the cost savings,
as determined by the senior procurement executive or
Chief Acquisition Officer, is expected to be
substantial in relation to the total cost of the
procurement.
(C) Notice.--Not later than 7 days after making a
determination that an acquisition strategy involving a
consolidation of contract requirements is necessary and
justified under subparagraph (A), the senior
procurement executive or Chief Acquisition Officer
shall publish a notice on a public website that the
determination has been made. Any solicitation for a
procurement related to the acquisition strategy shall
not be published earlier than 7 days after the notice
is published. With the publication of the solicitation,
the senior procurement executive or Chief Acquisition
Officer shall publish a justification for the
determination, which shall include the information in
subparagraphs (A) through (E) of paragraph (1).
(3) Benefits to be considered.--The benefits considered for
the purposes of paragraphs (1) and (2) may include--
(A) cost; and
(B) regardless of whether quantifiable in dollar
amounts--
(i) quality;
(ii) acquisition cycle;
(iii) terms and conditions; and
(iv) any other benefit.
Chapter 243--Subcontracting Provisions
Sec.
243101. Opportunity to participate in performance of contracts.
243102. Notice of provisions relating to contracts awarded pursuant to
the negotiated method of procurement.
243103. Subcontracting plans.
243104. Incentives.
243105. Liquidated damages.
243106. Payment of subcontractors.
243107. Subcontracting misrepresentations.
243108. Material breach.
243109. Pilot program providing past performance ratings for other
small business subcontractors.
243110. Effect of chapter.
Sec. 243101. Opportunity to participate in performance of contracts
(a) In General.--The clause stated in subsection (c) shall be
included in all contracts let by a Federal agency except a contract
described in subsection (b).
(b) Excepted Contracts.--The clause stated in subsection (c) need not
be included in--
(1) a contract that does not exceed the simplified
acquisition threshold;
(2) a contract (including all subcontracts under the
contract) that will be performed entirely outside the United
States; or
(3) a contract for a service that is personal in nature.
(c) Required Clause.--The clause required by subsection (a) is as
follows:
``(1) Definitions.--
``(A) In general.--As used in this contract, each of
the terms `qualified HUBZone small business concern',
`small business concern', `small business concern owned
and controlled by service-disabled veterans', `small
business concern owned and controlled by socially and
economically disadvantaged individuals', `small
business concern owned and controlled by veterans', and
`small business concern owned and controlled by women'
has the meaning given the term in section 101102 of
title 57, United States Code.
``(B) Additional term effective with joint issuance
of implementing regulations.--Effective on the date on
which the Administrator of the Small Business
Administration and the Secretary of Veterans Affairs
jointly issue implementing regulations described in
section 1832(e) of the National Defense Authorization
Act for Fiscal Year 2017 (Public Law 114-328, 130 Stat.
2660), the term `small business concern owned and
controlled by service-disabled veterans' has the
meaning given the term in section 101102 of title 57,
United States Code.
``(C) Presumption.--For purposes of applying the
definition of `small business concern owned and
controlled by socially and economically disadvantaged
individuals', the contractor shall presume that
socially and economically disadvantaged individuals
include Black Americans, Hispanic Americans, Native
Americans, Asian Pacific Americans, and other
minorities, or any other individual found to be
disadvantaged by the United States Small Business
Administration.
``(2) Policy.--It is the policy of the United States that
qualified HUBZone small business concerns, small business
concerns owned and controlled by service-disabled veterans,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, small business concerns
owned and controlled by veterans, small business concerns owned
and controlled by women, and other small business concerns
shall have the maximum practicable opportunity to participate
in the performance of contracts let by any Federal agency,
including contracts and subcontracts for subsystems,
assemblies, components, and related services for major systems.
It is further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment
of amounts due pursuant to the terms of their subcontracts with
qualified HUBZone small business concerns, small business
concerns owned and controlled by service-disabled veterans,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, small business concerns
owned and controlled by veterans, small business concerns owned
and controlled by women, and other small business concerns.
``(3) Agreement.--The contractor agrees--
``(A) to carry out the policy stated in paragraph (2)
in the awarding of subcontracts to the fullest extent
consistent with the efficient performance of this
contract; and
``(B) to cooperate in any studies or surveys that may
be conducted by the United States Small Business
Administration or the awarding agency of the United
States as necessary to determine the extent of the
contractor's compliance with this clause.
``(4) Reliance on written representation.--The contractor,
acting in good faith, may rely on a written representation by a
subcontractor regarding its status as a qualified HUBZone small
business concern, small business concern owned and controlled
by service-disabled veterans, small business concern owned and
controlled by socially and economically disadvantaged
individuals, small business concern owned and controlled by
veterans, small business concern owned and controlled by women,
or other small business concern.''
Sec. 243102. Notice of provisions relating to contracts awarded
pursuant to the negotiated method of procurement
(a) Required Clause.--A solicitation of an offer for a contract
described in subsection (b) shall contain a clause notifying potential
offering companies of the provisions of this chapter relating to
contracts awarded pursuant to the negotiated method of procurement.
(b) Contracts.--A contract referred to in subsection (a) is a
contract let by a Federal agency that--
(1) is to be awarded pursuant to the negotiated method of
procurement; and
(2) may exceed--
(A) $1,000,000, in the case of a contract for the
construction of a public facility; or
(B) $500,000, in the case of any other contract.
Sec. 243103. Subcontracting plans
(a) Definitions.--In this section:
(1) Bidder.--The term ``bidder'' does not include a bidder
that is a small business concern.
(2) Offeror.--The term ``offeror'' does not include an
offeror that is a small business concern.
(b) Negotiated Procurements.--
(1) Negotiation.--Before the award of any contract described
in paragraph (2), or any amendment or modification to such a
contract, the apparent successful offeror shall negotiate with
the procurement authority a subcontracting plan that
incorporates the information prescribed in subsection (d).
(2) Contracts.--A contract referred to in paragraph (1) is a
contract let by a Federal agency that--
(A) is to be (or was) awarded pursuant to the
negotiated method of procurement;
(B) is required to include the clause stated in
section 243101 of this title;
(C) may exceed--
(i) $1,000,000, in the case of a contract for
the construction of a public facility; or
(ii) $500,000, in the case of any other
contract; and
(D) offers a subcontracting possibility.
(3) Inclusion in contract.--The subcontracting plan shall be
included in and made a material part of the contract.
(4) Failure to negotiate subcontracting plan.--If, within the
time prescribed in regulations of the procuring agency, the
apparent successful offeror fails to negotiate the
subcontracting plan required by paragraph (1), the offeror
shall be ineligible to be awarded the contract.
(5) Prior compliance a factor in determining
responsibility.--Prior compliance of the offeror with other
subcontracting plans under this subsection shall be considered
by a procuring agency in determining the responsibility of the
offeror for the award of the contract.
(6) Maximum opportunity.--No contract shall be awarded to any
offeror unless the procuring agency determines that the
subcontracting plan to be negotiated by the offeror under
paragraph (2) provides the maximum practicable opportunity for
qualified HUBZone small business concerns, small business
concerns owned and controlled by service-disabled veterans,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, small business concerns
owned and controlled by veterans, small business concerns owned
and controlled by women, and other small business concerns, to
participate in the performance of the contract.
(c) Advertised Procurements.--
(1) Required clause.--A solicitation of a bid for a contract
described in paragraph (2), or any amendment or modification to
such a contract, shall contain a clause requiring any bidder
that is selected to be awarded a contract to submit to the
procuring agency a subcontracting plan that incorporates the
information prescribed in subsection (d).
(2) Contracts.--A contract referred to in paragraph (1) is a
contract let by a Federal agency that--
(A) is to be awarded pursuant to the formal
advertising method of procurement;
(B) is required to contain the clause stated in
section 243101 of this title;
(C) may exceed--
(i) $1,000,000, in the case of a contract for
the construction of a public facility; or
(ii) $500,000, in the case of any other
contract; and
(D) offers a subcontracting possibility.
(3) Inclusion in contract.--The subcontracting plan of the
bidder awarded the contract shall be included in and made a
material part of the contract.
(4) Failure to submit subcontracting plan.--If, within the
time prescribed in regulations of the procuring agency, the
bidder selected to be awarded the contract fails to submit the
subcontracting plan required by paragraph (1), the bidder shall
become ineligible to be awarded the contract.
(5) Prior compliance a factor in determining
responsibility.--Prior compliance of the bidder with other
subcontracting plans under this subsection shall be considered
by the procuring agency in determining the responsibility of
the bidder for the award of the contract.
(d) Contents of Subcontracting Plan.--A subcontracting plan shall
include--
(1) percentage goals for the utilization as subcontractors of
qualified HUBZone small business concerns, small business
concerns owned and controlled by service-disabled veterans,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, small business concerns
owned and controlled by veterans, small business concerns owned
and controlled by women, and other small business concerns;
(2) the name of an individual within the employ of the
offeror or bidder who will administer the subcontracting
program of the offeror or bidder and a description of the
duties of that individual;
(3) a description of the efforts that the offeror or bidder
will take to ensure that qualified HUBZone small business
concerns, small business concerns owned and controlled by
service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
women, and other small business concerns will have an equitable
opportunity to compete for subcontracts;
(4) assurances that the offeror or bidder will--
(A) include the clause required by section 243101 of
this title in all subcontracts that offer further
subcontracting opportunities; and
(B) require all subcontractors (except small business
concerns) that receive subcontracts in excess of
$1,000,000 in the case of a contract for the
construction of a public facility, or in excess of
$500,000 in the case of any other contract, to adopt a
subcontracting plan similar to the subcontracting plan
required under subsection (b) or (c);
(5)(A) assurances that the offeror or bidder will submit such
periodic reports and cooperate in any studies or surveys as may
be required by the procuring agency or the Administrator to
determine the extent of compliance by the offeror or bidder
with the subcontracting plan; and
(B) assurances at a minimum that the offeror or bidder, and
all subcontractors required to maintain subcontracting plans
pursuant to this subsection, will--
(i) review and approve subcontracting plans submitted
by their subcontractors;
(ii) monitor subcontractor compliance with their
approved subcontracting plans;
(iii) ensure that subcontracting reports are
submitted by their subcontractors when required;
(iv) acknowledge receipt of their subcontractors'
reports;
(v) compare the performance of their subcontractors
to subcontracting plans and goals; and
(vi) discuss performance with subcontractors when
necessary to ensure that their subcontractors make a
good faith effort to comply with their subcontracting
plans;
(6) a recitation of--
(A) the types of records that the successful offeror
or bidder will maintain to demonstrate procedures that
are adopted to comply with the requirements and goals
set forth in the subcontracting plan, including the
establishment of source lists of qualified HUBZone
small business concerns, small business concerns owned
and controlled by service-disabled veterans, small
business concerns owned and controlled by socially and
economically disadvantaged individuals, small business
concerns owned and controlled by veterans, small
business concerns owned and controlled by women, and
other small business concerns; and
(B) efforts to identify and award subcontracts to
small business concerns;
(7) a recitation of the types of records that the successful
offeror or bidder will maintain to demonstrate procedures that
have been adopted to ensure that subcontractors at any tier
comply with the requirements and goals set forth in the plan
established in accordance with paragraph (4)(B), including--
(A) the establishment of source lists of qualified
HUBZone small business concerns, small business
concerns owned and controlled by service-disabled
veterans, small business concerns owned and controlled
by socially and economically disadvantaged individuals,
small business concerns owned and controlled by
veterans, small business concerns owned and controlled
by women, and other small business concerns; and
(B) efforts to identify and award subcontracts to
small business concerns; and
(8) a representation that the offeror or bidder will--
(A) make a good faith effort to acquire articles,
equipment, supplies, services, or materials or obtain
the performance of construction work from the small
business concerns used in preparing and submitting to
the contracting agency the bid or proposal, in the same
amount and quality used in preparing and submitting the
bid or proposal; and
(B) provide to the contracting officer a written
explanation if the offeror or bidder fails to acquire
articles, equipment, supplies, services, or materials
or obtain the performance of construction work as
described in subparagraph (A).
(e) Notification of Intention To Identify Small Business Concern as
Potential Subcontractor.--
(1) Definition of covered contract.--In this subsection, the
term ``covered contract'' means a contract relating to which a
prime contractor is required to develop a subcontracting plan
under this section.
(2) Notification.--An offeror for a covered contract that
intends to identify a small business concern as a potential
subcontractor in a bid or proposal for the contract, or in a
plan submitted under this section in connection with the
covered contract, shall notify the small business concern
before making the identification.
(f) Attainment of Goals.--
(1) Attainability of goals.--A Federal agency shall ensure
that the goals offered by an apparent successful bidder or
offeror are attainable in relation to--
(A) the subcontracting opportunities available to the
contractor, commensurate with the efficient and
economical performance of the contract;
(B) the pool of eligible subcontractors available to
fulfill the subcontracting opportunities; and
(C) the actual performance of the contractor in
fulfilling the subcontracting goals specified in prior
subcontracting plans.
(2) Credit for development assistance.--For purposes of
determining the attainment of a subcontract utilization goal
under a subcontracting plan entered into with an executive
agency under subsection (b) or (c), a mentor firm that provides
development assistance to a protege firm under the pilot
Mentor-Protege Program established pursuant to section 831 of
the National Defense Authorization Act for Fiscal Year 1991
(Public Law 101-510; 10 U.S.C. 2302 note) shall be granted
credit for the assistance in accordance with subsection (g) of
that section.
(g) Bundled Contracts.--The following factors shall be designated by
a Federal agency as significant factors for purposes of evaluating
offers for a bundled contract if the head of the Federal agency
determines that the contract offers a significant opportunity for
subcontracting:
(1) A factor that is based on the rate provided under the
subcontracting plan for small business participation in the
performance of the contract.
(2) For the evaluation of past performance of an offeror, a
factor that is based on the extent to which the offeror
attained applicable goals for small business participation in
the performance of contracts.
(h) Compliance Assistance.--The Administrator may--
(1) assist Federal agencies and businesses in complying with
their responsibilities under this section, including the
formulation of subcontracting plans;
(2)(A) review any solicitation for any contract to be let
under subsection (b) or (c) to determine the maximum
practicable opportunity for qualified HUBZone small business
concerns, small business concerns owned and controlled by
service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
women, and other small business concerns to participate as
subcontractors in the performance of any contract resulting
from any solicitation; and
(B) submit findings, which shall be advisory in nature, to
the procuring agency; and
(3) evaluate compliance with subcontracting plans as a
supplement to evaluation by the contracting agency--
(A) on a contract-by-contract basis; or
(B) in the case of a contractor having multiple
contracts, on an aggregate basis.
(i) Collection, Reporting, and Review of Data.--The head of a
contracting agency shall ensure that--
(1) the contracting agency collects and reports data on the
extent to which contractors of the agency meet the goals and
objectives set forth in subcontracting plans submitted under
this section; and
(2) the contracting agency periodically reviews data
collected and reported under paragraph (1) for the purpose of
ensuring that contractors of the agency comply in good faith
with the requirements of this section and subcontracting plans
submitted by the contractors under this section.
(j) Fraudulent or Bad Faith Activity Reporting Mechanism.--The
Administrator shall establish a reporting mechanism that allows a
subcontractor or potential subcontractor to report fraudulent activity
or bad faith by a contractor with respect to a subcontracting plan
submitted under this section.
(k) Credit for Certain Subcontractors.--
(1) In general.--For purposes of determining whether a prime
contractor has attained the percentage goals specified in
subsection (d)--
(A) if the subcontracting goals pertain only to a
single contract with the executive agency, the prime
contractor shall receive credit for small business
concerns performing as subcontractors at any tier
pursuant to the subcontracting plans required under
subsection (d)(4)(B) in an amount equal to the dollar
value of work awarded to those small business concerns;
and
(B) if the subcontracting goals pertain to more than
1 contract with 1 or more executive agencies, or to 1
contract with more than 1 executive agency, the prime
contractor may count only first tier subcontractors
that are small business concerns.
(2) Effect of subsection.--Nothing in this subsection
abrogates--
(A) the responsibility of a prime contractor to make
a good-faith effort to achieve the first tier small
business subcontracting goals negotiated under
subsection (d)(1); or
(B) the requirement for subcontractors with further
opportunities for subcontracting to make a good-faith
effort to achieve the goals established under
subsection (d)(4)(B).
(l) Electronic Subcontracting Reporting System.--The Administrator
shall take such actions as are necessary to ensure that the electronic
subcontracting reporting system established by the Administrator to
carry out the requirement of subsection (d)(5) is able to identify
entities that fail to submit required reports.
Sec. 243104. Incentives
Notwithstanding any other provision of law, a Federal agency, to
encourage subcontracting opportunities for qualified HUBZone small
business concerns, small business concerns owned and controlled by
service-disabled veterans, small business concerns owned and controlled
by socially and economically disadvantaged individuals, small business
concerns owned and controlled by veterans, small business concerns
owned and controlled by women, and other small business concerns, may
provide such incentives as the Federal agency considers appropriate to
encourage such subcontracting opportunities as are commensurate with
the efficient and economical performance of a contract that is let
pursuant to the negotiated method of procurement.
Sec. 243105. Liquidated damages
(a) Required Clause.--
(1) In general.--A contract subject to subsection (b) or (c)
of section 243103 of this title shall contain a clause for the
payment of liquidated damages on a finding that a prime
contractor has failed to make a good faith effort to comply
with the requirements imposed on the contractor by this
chapter.
(2) Inclusion in federal acquisition regulation.--The clause
required by paragraph (1) shall be made part of the Federal
Acquisition Regulation.
(b) Demonstration of Good Faith Effort.--A contractor shall be
afforded an opportunity to demonstrate a good faith effort regarding
compliance prior to the contracting officer's final decision regarding
the imposition of damages and the amount of damages under subsection
(a).
(c) Dispute Resolution.--The final decision of a contracting officer
regarding the contractor's obligation to pay damages under subsection
(a) or the amount of damages shall be subject to chapter 71 of title
41.
Sec. 243106. Payment of subcontractors
(a) Definition of Covered Contract.--In this section, the term
``covered contract'' means a contract relating to which a prime
contractor is required to develop a subcontracting plan under section
243103 of this title.
(b) Notice.--
(1) In general.--A prime contractor for a covered contract
shall notify in writing the contracting officer for the covered
contract if--
(A) the prime contractor pays a reduced price to a
subcontractor for a good or service on completion of
the responsibilities of the subcontractor; or
(B) the payment to a subcontractor is more than 90
days past due for a good or service provided for the
covered contract for which the Federal agency has paid
the prime contractor.
(2) Contents.--A prime contractor shall include in a notice
under paragraph (1) the reason for the reduction in a payment
to or failure to pay a subcontractor.
(c) Performance Evaluation.--In evaluating the performance of a prime
contractor, the contracting officer for a covered contract shall take
into consideration an unjustified failure by the prime contractor to
make a full or timely payment to a subcontractor.
(d) Control of Funds.--If the contracting officer for a covered
contract determines that a prime contractor has a history of
unjustified failures to make full and timely payment to 1 or more
subcontractors, the contracting officer shall record the identity of
the contractor in accordance with the regulations promulgated under
subsection (e).
(e) Regulations.--The Federal Acquisition Regulatory Council shall
amend the Federal Acquisition Regulation to--
(1) describe the circumstances under which a contractor may
be determined to have a history of unjustified failures to make
full and timely payment to 1 or more subcontractors;
(2) establish a process for contracting officers to record
the identity of a contractor described in paragraph (1); and
(3) require the identity of a contractor described in
paragraph (1) to be incorporated in, and made publicly
available through, the Federal Awardee Performance and
Integrity Information System, or any successor to the System.
Sec. 243107. Subcontracting misrepresentations
The Administrator, in consultation with the Administrator for Federal
Procurement Policy, shall promulgate regulations relating to, and the
Federal Acquisition Regulatory Council shall amend the Federal
Acquisition Regulation to establish a policy on, subcontracting
compliance relating to small business concerns, including--
(1) assignment of compliance responsibilities between
contracting offices, small business offices, and program
offices; and
(2) periodic oversight and review activities.
Sec. 243108. Material breach
The failure of a contractor or subcontractor to comply in good faith
with--
(1) the clause required under section 243101 of this title;
(2) a subcontracting plan required of the contractor under
section 243103 of this title to be included in its contract or
subcontract; or
(3) assurances provided under section 243103(d)(5)(A) of this
title,
shall be a material breach of the contract or subcontract and may be
considered in any past performance evaluation of the contactor.
Sec. 243109. Pilot program providing past performance ratings for other
small business subcontractors
(a) Definition of Appropriate Official.--In this section, the term
``appropriate official'' means--
(1) a commercial market representative;
(2) another individual designated by the senior official
appointed by the Administrator with responsibilities under
divisions F, G, and H of subtitle II of this title; or
(3) the Office of Small and Disadvantaged Business
Utilization of a Federal agency, if the head of the Federal
agency and the Administrator agree.
(b) Establishment.--The Administrator shall establish a pilot program
for a small business concern without a past performance rating as a
prime contractor performing as a first tier subcontractor for a covered
contract (as defined in section 243106(a) of this title) to request a
past performance rating in the system used by the Federal Government to
monitor or record contractor past performance.
(c) Application.--A small business concern described in subsection
(b) shall submit an application to the appropriate official for a past
performance rating no later than 270 days after the small business
concern completed the work for which it seeks a past performance rating
or 180 days after the prime contractor completes work on the covered
contract, whichever is earlier. Such application shall include written
evidence of the past performance factors for which the small business
concern seeks a rating and a suggested rating.
(d) Determination.--
(1) In general.--The appropriate official shall submit the
application from the small business concern to the Office of
Small and Disadvantaged Business Utilization for the covered
contract and to the prime contractor for review. The Office of
Small and Disadvantaged Business Utilization and the prime
contractor shall, not later than 30 days after receipt of the
application, submit to the appropriate official a response
regarding the application.
(2) Agreement on rating.--If the Office of Small and
Disadvantaged Business Utilization and the prime contractor
agree on a past performance rating, or if either the Office of
Small and Disadvantaged Business Utilization or the prime
contractor fail to respond and the responding person agrees
with the rating of the applicant small business concern, the
appropriate official shall enter the agreed-upon past
performance rating in the system described in subsection (b).
(3) Disagreement on rating.--If the Office of Small and
Disadvantaged Business Utilization and the prime contractor
fail to respond within 30 days or if they disagree about the
rating, or if either the Office of Small and Disadvantaged
Business Utilization or the prime contractor fail to respond
and the responding person disagrees with the rating of the
applicant small business concern, the Office of Small and
Disadvantaged Business Utilization or the prime contractor
shall submit a notice contesting the application to the
appropriate official. The appropriate official shall follow the
requirements of subsection (e).
(e) Procedure for Rating.--Not later than 14 calendar days after
receipt of a notice under subsection (d)(3), the appropriate official
shall submit such notice to the applicant small business concern. Such
concern may submit comments, rebuttals, or additional information
relating to the past performance of such concern not later than 14
calendar days after receipt of such notice. The appropriate official
shall enter into the system described in subsection (b) a rating that
is neither favorable nor unfavorable along with the initial application
from such concern, any responses of the Office of Small and
Disadvantaged Business Utilization and the prime contractor, and any
additional information provided by such concern. A copy of the
information submitted shall be provided to the contracting officer (or
designee of such officer) for the covered contract.
(f) Use of Information.--A small business subcontractor may use a
past performance rating given under this section to establish its past
performance for a prime contract.
(g) Duration.--The pilot program established under this section shall
terminate 3 years after the date on which the first applicant small
business concern receives a past performance rating for performance as
a first tier subcontractor.
(h) Report.--The Comptroller General of the United States shall begin
an assessment of the pilot program 1 year after the establishment of
such program. Not later than 6 months after beginning such assessment,
the Comptroller General shall submit a report to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives, which shall include--
(1) the number of small business concerns that have received
past performance ratings under the pilot program;
(2) the number of applications in which the contracting
officer (or designee) or the prime contractor contested the
application of the small business concern;
(3) any suggestions or recommendations the Comptroller
General or the small business concerns participating in the
program have to address disputes between the small business
concern, the contracting officer (or designee), and the prime
contractor on past performance ratings;
(4) the number of small business concerns awarded prime
contracts after receiving a past performance rating under this
pilot program; and
(5) any suggestions or recommendation the Comptroller General
has to improve the operation of the pilot program.
Sec. 243110. Effect of chapter
Nothing in this chapter supersedes the requirements of part 331 of
title 44, Code of Federal Regulations (or any successor regulation).
Chapter 245--Notice Provisions
Sec.
245101. Notices of intention to solicit certain bids or proposals or to
place certain orders.
245102. Notices of subcontracting opportunity.
245103. Limited applicability to Tennessee Valley Authority.
Sec. 245101. Notices of intention to solicit certain bids or proposals
or to place certain orders
(a) In General.--Except as provided in subsection (e)--
(1) an executive agency that intends to--
(A) solicit bids or proposals for a contract for
property or services for a price expected to exceed
$25,000; or
(B) place an order, expected to exceed $25,000, under
a basic agreement, basic ordering agreement, or similar
arrangement;
shall publish a notice described in subsection (d);
(2) an executive agency intending to solicit bids or
proposals for a contract for property or services shall post,
for a period of not less than 10 days, in a public place at the
contracting office issuing the solicitation, a notice of
solicitation described in subsection (d)--
(A) in the case of an executive agency other than the
Department of Defense, if the contract is for a price
expected to exceed $10,000, but not to exceed $25,000;
and
(B) in the case of the Department of Defense, if the
contract is for a price expected to exceed $5,000, but
not to exceed $25,000; and
(3) an executive agency awarding a contract for property or
services for a price exceeding $100,000, or placing an order
described in paragraph (1)(B) exceeding $100,000, shall furnish
for publication by the Secretary of Commerce a notice
announcing the award or order if there is likely to be a
subcontract under the contract or order.
(b) Means of Publication.--A notice of solicitation required to be
published under subsection (a) may be published by an electronic means
that meets the accessibility requirements under section 1708(d) of
title 41.
(c) Limitations.--When an executive agency is required by subsection
(a)(1) to publish a notice of solicitation, the executive agency shall
not--
(1) issue the solicitation earlier than 15 days after the
date on which the notice is published; or
(2) in the case of a contract or order estimated to be
greater than the simplified acquisition threshold, establish a
deadline for the submission of all bids or proposals in
response to the notice required by subsection (a)(1) that--
(A) in the case of an order under a basic agreement,
basic ordering agreement, or similar arrangement, is
earlier than the date that is 30 days after the date on
which the notice required by subsection (a)(1)(B) is
published;
(B) in the case of a solicitation for research and
development, is earlier than the date that is 45 days
after the date on which the notice required by
subsection (a)(1)(A) is published; or
(C) in any other case, is earlier than the date that
is 30 days after the date on which the solicitation is
issued.
(d) Contents of Notice.--
(1) In general.--A notice of solicitation required by
paragraph (1) or (2) of subsection (a) shall include--
(A) an accurate description of the property or
services to be contracted for;
(B) provisions that--
(i)(I) state whether the technical data
required to respond to the solicitation will
not be furnished as part of the solicitation;
and
(II) identify the source in the Government,
if any, from which the technical data may be
obtained; and
(ii)(I) state whether an offeror, its
product, or service must meet a qualification
requirement in order to be eligible for award;
and
(II) if so, identify the office from which a
qualification requirement may be obtained;
(C) the name, business address, and telephone number
of the contracting officer;
(D) a statement that all responsible sources may
submit a bid, proposal, or quotation (as appropriate)
that shall be considered by the agency;
(E) in the case of a procurement using procedures
other than competitive procedures, a statement of the
reason justifying the use of such procedures and the
identity of the intended source; and
(F) in the case of a contract in an amount estimated
to be greater than $25,000 but not greater than the
simplified acquisition threshold--
(i) a description of the procedures to be
used in awarding the contract; and
(ii) a statement specifying the periods for
prospective offerors and the contracting
officer to take the necessary preaward and
award actions.
(2) Property or service description.--A property or service
description under paragraph (1)(A)--
(A) shall not be unnecessarily restrictive of
competition; and
(B) shall include, as appropriate, the agency
nomenclature, National Stock Number or other part
number, and a brief description of the item's form,
fit, or function, physical dimensions, predominant
material of manufacture, or similar information that
will assist a prospective contractor in making an
informed business judgment concerning whether the
prospective contractor should request a copy of the
solicitation.
(e) Exempted Activities.--A notice is not required under subsection
(a)(1) if--
(1) the proposed procurement--
(A) is for an amount not greater than the simplified
acquisition threshold; and
(B) is to be conducted by--
(i) using widespread electronic public notice
of the solicitation in a form that allows
convenient and universal user access through a
single, Governmentwide point of entry; and
(ii) permitting the public to respond to the
solicitation electronically;
(2)(A) the notice would disclose the executive agency's
needs; and
(B) the disclosure of those needs would compromise the
national security;
(3)(A) the proposed procurement would result from acceptance
of an unsolicited proposal that demonstrates a unique and
innovative research concept; and
(B) the publication of a notice of the unsolicited research
proposal would disclose the originality of thought or
innovativeness of the proposal or would disclose proprietary
information associated with the proposal;
(4) the proposed procurement would result from acceptance of
a proposal submitted under chapter 263;
(5) the procurement is made against an order placed under a
requirements contract;
(6) the procurement is made for perishable subsistence
supplies;
(7)(A) the procurement is for a utility service other than a
telecommunication service; and
(B) only 1 source is available; or
(8) the procurement is for the service of an expert for use
in any litigation or dispute (including preparation for any
foreseeable litigation or dispute) that involves or could
involve the Federal Government in any trial, hearing, or
proceeding before any court, administrative tribunal, or
agency, or in any part of an alternative dispute resolution
process, whether or not the expert is expected to testify.
(f) Availability of Complete Solicitation Package.--
(1) In general.--An executive agency shall make available to
any business concern, or the authorized representative of a
business concern, the complete solicitation package for any
ongoing procurement announced in a notice under this section.
(2) Fee.--An executive agency may require the payment of a
fee, not exceeding the actual cost of duplication, for a copy
of a solicitation package under paragraph (1).
Sec. 245102. Notices of subcontracting opportunity
(a) In General.--A notice of subcontracting opportunity may be
submitted for publication on the appropriate Federal website (as
determined by the Administrator) by--
(1) a contractor that is a business concern that is awarded a
contract by an executive agency subject to section 245101(a)(3)
of this title section; or
(2) a business concern that is a subcontractor at any tier or
supplier at any tier to a contractor described in paragraph (1)
that has a subcontracting opportunity in excess of $10,000.
(b) Contents.--A notice of a subcontracting opportunity shall
include--
(1) a description of the business opportunity that is
comparable to the description specified in subparagraphs (A),
(B), (C), and (D) of section 245101(d)(1) of this title; and
(2) the deadline for receipt of offers.
(c) Uniform implementation.--The Federal Acquisition Regulation shall
provide for uniform implementation of this section.
Sec. 245103. Limited applicability to Tennessee Valley Authority
This chapter applies to the Tennessee Valley Authority only with
respect to procurements to be paid from appropriated funds.
Chapter 247--Noncompetitive Procedures
Sec.
247101. Limitation on use of noncompetitive procedures.
247102. Limited applicability to Tennessee Valley Authority.
Sec. 247101. Limitation on use of noncompetitive procedures
(a) In General.--An executive agency may not award a contract using
noncompetitive procedures unless--
(1) except as provided in subsection (c), a written
justification for the use of noncompetitive procedures has been
approved--
(A) in the case of a contract for an amount exceeding
$100,000 (but equal to or less than $1,000,000), by the
advocate for competition for the procurement activity;
(B) in the case of a contract for an amount exceeding
$1,000,000 (but equal to or less than $10,000,000), by
the head of the procurement activity or a delegate
who--
(i) if a member of the Armed Forces, is a
general or flag officer; or
(ii) if a civilian, is serving in a position
classified above GS-15 pursuant to section 5108
of title 5; or
(C) in the case of a contract for an amount exceeding
$10,000,000, by the senior procurement executive of the
agency designated pursuant to section 1702(c) of title
41; and
(2) all other requirements applicable to the use of
noncompetitive procedures under section 3304 of title 41 or
chapter 137 of title 10, as appropriate, have been satisfied.
(b) Nondelegability.--The authority of an advocate for competition to
approve the use of noncompetitive procedures under subsection (a)(1)(A)
and the authority of a senior procurement executive to approve the use
of noncompetitive procedures under subsection (a)(1)(C) may not be
delegated.
(c) Exceptions.--The same exceptions as are provided in section
3304(e)(4) of title 41 or section 2304(f)(2) of title 10 shall apply
with respect to the requirements of subsection (a)(1) of this section
in the same manner as those exceptions apply to the requirements of
section 3304(e)(1) of title 41 or section 2304(f)(1) of title 10, as
appropriate.
Sec. 247102. Limited applicability to Tennessee Valley Authority
This chapter applies to the Tennessee Valley Authority only with
respect to procurements to be paid from appropriated funds.
Division H--Contract Reservation Programs
Chapter 251--General Provisions
Sec.
251101. Awards of contracts to small business concerns.
251102. Placement of contracts by procuring agency.
251103. Disabled individuals.
251104. Priorities and preferences.
251105. Procurement strategies; contract bundling.
251106. Goals for participation by small business concerns in
procurement contracts.
251107. No effect on certain small business setasides.
251108. Mandatory contract reservation.
251109. Offices of Small and Disadvantaged Business Utilization.
251110. Procurement center representatives.
251111. Department of Defense, Coast Guard, and National Aeronautics
and Space Administration contract goals.
251112. Actions by procurement center representatives to ensure
compliance.
251113. Limitations on subcontracting.
251114. Multiple award contracts.
251115. Data quality improvement plan.
251116. Post-award compliance resources.
251117. Regulatory changes and training materials.
Sec. 251101. Awards of contracts to small business concerns
(a) Small Business Procurements.--
(1) In general.--For purposes of this subtitle and subtitle I
of this title, small business concerns shall receive any award
or contract if such award or contract is, in the determination
of the Administrator and the contracting agency, in the
interest of--
(A) maintaining or mobilizing the full productive
capacity of the United States;
(B) war or national defense programs; or
(C) assuring that a fair proportion of the total
purchase and contracts for goods and services of the
Government in each industry category (as defined under
paragraph (2)) are awarded to small business concerns.
(2) Definition of industry category.--
(A) In general.--In this subsection, the term
``industry category'' means a discrete group of similar
goods and services, as determined by the Administrator
in accordance with the North American Industry
Classification System codes used to establish small
business size standards, except that the Administrator
shall limit an industry category to a greater extent
than provided under the North American Industry
Classification System codes if the Administrator
receives evidence indicating that further segmentation
of the industry category is warranted--
(i) due to special capital equipment needs;
(ii) due to special labor requirements;
(iii) due to special geographic requirements,
except as provided in subparagraph (B);
(iv) due to unique Federal buying patterns or
requirements; or
(v) to recognize a new industry.
(B) Exception for geographic requirements.--The
Administrator may not further segment an industry
category based on geographic requirements unless--
(i) the Government typically designates the
geographic area where work for contracts for
goods or services is to be performed;
(ii) Government purchases comprise the major
portion of the entire domestic market for such
goods or services; and
(iii) it is unreasonable to expect
competition from business concerns located
outside of the general geographic area due to
the fixed location of facilities, high
mobilization costs, or similar economic
factors.
(3) Determinations with respect to awards or contracts.--
Determinations made pursuant to paragraph (1) may be made for
individual awards or contracts, any part of an award or
contract or task order, or for classes of awards or contracts
or task orders.
(4) Increasing prime contracting opportunities for small
business concerns.--
(A) Description of covered proposed procurements.--
The requirements of this paragraph shall apply to a
proposed procurement that includes in its statement of
work goods or services currently being supplied or
performed by a small business concern and, as
determined by the Administrator--
(i) is in a quantity or of an estimated
dollar value which makes the participation of a
small business concern as a prime contractor
unlikely;
(ii) in the case of a proposed procurement
for construction, seeks to bundle or
consolidate discrete construction projects; or
(iii) is a solicitation that involves an
unnecessary or unjustified bundling of contract
requirements.
(B) Notice to procurement center representatives.--
With respect to proposed procurements described in
subparagraph (A), at least 30 days before issuing a
solicitation and concurrent with other processing steps
required before issuing the solicitation, the
contracting agency shall provide a copy of the proposed
procurement to the procurement center representative of
the contracting agency (as described in section 251110
of this title) along with a statement explaining--
(i) why the proposed procurement cannot be
divided into reasonably small lots (not less
than economic production runs) to permit offers
on quantities less than the total requirement;
(ii) why delivery schedules cannot be
established on a realistic basis that will
encourage the participation of small business
concerns in a manner consistent with the actual
requirements of the Government;
(iii) why the proposed procurement cannot be
offered to increase the likelihood of the
participation of small business concerns;
(iv) in the case of a proposed procurement
for construction, why the proposed procurement
cannot be offered as separate discrete
projects; or
(v) why the contracting agency has determined
that the bundling of contract requirements is
necessary and justified.
(C) Alternatives to increase prime contracting
opportunities for small business concerns.--If the
procurement center representative believes that the
proposed procurement will make the participation of
small business concerns as prime contractors unlikely,
the procurement center representative, within 15 days
after receiving the statement described in subparagraph
(B), shall recommend to the contracting agency
alternative procurement methods for increasing prime
contracting opportunities for small business concerns.
(D) Failure to agree on an alternative procurement
method.--If the procurement center representative and
the contracting agency fail to agree on an alternative
procurement method, the Administrator shall submit the
matter to the head of the appropriate department or
agency for a determination.
(5) Contracts for sale of government property.--With respect
to a contract for the sale of Government property, small
business concerns shall receive any such contract if, in the
determination of the Administrator and the disposal agency, the
award of such contract is in the interest of assuring that a
fair proportion of the total sales of Government property be
made to small business concerns.
(6) Sale of electrical power or other property.--Nothing in
this subsection shall be construed to change any preferences or
priorities established by law with respect to the sale of
electrical power or other property by the Federal Government.
(7) Costs exceeding fair market price.--A contract may not be
awarded under this subsection if the cost of the contract to
the awarding agency exceeds a fair market price.
(b) Avoidance of Contract Bundling.--To foster the participation of
small business concerns in the contracting opportunities of the
Government, a Federal agency, to the maximum extent practicable,
shall--
(1) foster the participation of small business concerns 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 participation by
small business concerns; and
(3) avoid unnecessary and unjustified bundling of contract
requirements that precludes participation by small business in
procurements as prime contractors.
(c) Wholesalers and Retailers.--
(1) In general.--An otherwise responsible small business
concern that is described in paragraph (2) shall not be denied
the opportunity to submit and have considered its offer for a
procurement contract that has as its principal purpose the
supply of a product to be let under this chapter solely because
the small business concern is other than the manufacturer or
processor of the product to be supplied under the contract.
(2) Requirements.--A small business concern referred to in
paragraph (1) is a small business concern that--
(A) is primarily engaged in wholesale or retail
trade;
(B) is a small business concern under the numerical
size standard for the North American Industry
Classification System code assigned to the contract
solicitation on which the offer is being made;
(C) is a regular dealer (as defined under section
6510 of title 41) in the product to be offered the
Government; and
(D) represents that the small business concern will
supply the product of a domestic small business
manufacturer or processor, unless a waiver of this
subparagraph is granted--
(i) by the Administrator, after reviewing a
determination by the contracting officer that
no small business manufacturer or processor can
reasonably be expected to offer a product
meeting the specifications (including period
for performance) required of an offeror by the
solicitation; or
(ii) by the Administrator for a product (or
class of products), after determining that no
small business manufacturer or processor is
available to participate in the Federal
procurement market.
(3) Limitation.--This subsection does not apply to a contract
that has as its principal purpose the acquisition of a service
or construction.
(d) Forecast of Contract Opportunities.--
(1) In general.--An executive agency that reports to the
Federal Procurement Data System contract actions with an
aggregate value in excess of $50,000,000 in any fiscal year
shall--
(A) prepare a forecast of expected contract
opportunities or classes of contract opportunities for
the next and succeeding fiscal years that small
business concerns are capable of performing; and
(B) periodically revise the forecast during the
following year.
(2) Contents.--To the extent that the information is
available, a forecast under paragraph (1) shall specify--
(A) the approximate number of individual contract
opportunities (and the number of opportunities within a
class);
(B) the approximate dollar value, or range of dollar
values, for each contract opportunity or class of
contract opportunities;
(C) the anticipated time (by fiscal year quarter) for
the issuance of a procurement request; and
(D) the activity responsible for the award and
administration of the contract.
(3) Submission of forecasts.--Not later than 10 days after
completion of a forecast under paragraph (1), the head of the
executive agency that prepared the forecast shall submit the
forecast to--
(A) the Director of Small and Disadvantaged Business
Utilization of the executive agency; and
(B) the Administrator.
(4) Scope of information reported.--A forecast submitted
under paragraph (3) may be limited to classes of items and
services for which there are substantial annual purchases.
(5) Availability of forecasts.--A forecast submitted under
paragraph (3) shall be available to small business concerns.
Sec. 251102. Placement of contracts by procuring agency
With respect to any work to be performed the amount of which would
exceed the maximum amount of a contract for which a surety may be
guaranteed against loss under section 321102 of this title, the
contracting procurement agency shall, to the extent practicable, place
contracts so as to allow more than 1 small business concern to perform
the work.
Sec. 251103. Disabled individuals
(a) Definition of Committee.--In this section, the term ``Committee''
means the Committee for Purchase From People Who Are Blind or Severely
Disabled established under section 8502 of title 41.
(b) Participation.--
(1) In general.--During fiscal year 1995, public or private
organizations for the disabled shall be eligible to participate
in programs authorized under this chapter in an aggregate
amount not to exceed $40,000,000.
(2) Procurement list.--None of the amounts authorized for
participation by paragraph (1) may be placed on the procurement
list maintained by the Committee under section 8503 of title
41.
(c) Monitoring and Evaluation.--The Administrator shall monitor and
evaluate participation under subsection (b).
(d) Appeal.--
(1) Filing.--Not later than 10 days after the announcement of
a proposed award of a contract by a Federal agency 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.
(2) Alleviation of injury.--If a small business concern files
an appeal of a proposed award under paragraph (1) and the
Administrator, after consultation with the Executive Director
of the Committee, finds that the small business 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 Federal agency having procurement powers to take such
action as is appropriate to alleviate economic injury sustained
or likely to be sustained by the small business concern.
(e) Maximum Amount of Awards.--
(1) Reporting.--A Federal agency having procurement powers
shall report to the Office of Federal Procurement Policy each
time a contract subject to subsection (b) is entered into and
shall include in its report the amount of the next higher bid
submitted by a for-profit small business concern.
(2) Data collection.--The Office of Federal Procurement
Policy shall collect data reported under paragraph (1) through
the Federal procurement data system and shall report the data
to the Administrator.
(3) Notification.--The Administrator shall notify all Federal
agencies having procurement powers when the maximum amount of
awards authorized under subsection (b) has been made during any
fiscal year.
(f) Contract Performance by Disabled Individuals.--A contract may be
awarded under this section only if at least 75 percent of the direct
labor performed on each item being produced under the contract in a
sheltered workshop or performed in providing each type of service under
the contract by a sheltered workshop is performed by disabled
individuals.
(g) Multiyear Contracts.--A Federal agency that awards 1 or more
contracts to such a public or private organization for the disabled
under this section may use multiyear contracts, if appropriate.
Sec. 251104. Priorities and preferences
(a) Priority for Areas of Concentrated Unemployment or
Underemployment and for Labor Surplus Areas.--
(1) In general.--For purposes of this chapter, priority shall
be given to the awarding of contracts and the placement of
subcontracts to small business concerns that shall perform a
substantial proportion of the production on the contracts and
subcontracts in--
(A) an area of concentrated unemployment or
underemployment; or
(B) a labor surplus area.
(2) Setasides.--
(A) In general.--Notwithstanding any other provision
of law, total labor surplus area setasides under part
331 of title 44, Code of Federal Regulations (or any
successor regulation), shall be authorized if the
Secretary of Defense specifically determines that there
is a reasonable expectation that offers will be
obtained from a sufficient number of eligible concerns
so that awards will be made at reasonable prices.
(B) Determination of labor surplus areas.--
(i) Consideration of persons available for
employment.--To the extent possible, in
determining labor surplus areas, consideration
shall be given to persons who would be
available for employment were suitable
employment available.
(ii) Criteria in effect.--For purposes of
this chapter, the determination of a labor
surplus area shall be made on the basis of the
criteria in effect at the time of the
determination, except that any minimum
population criteria shall not exceed 25,000.
(iii) Determination by secretary of labor.--A
determination of a labor surplus area shall be
made by the Secretary of Labor.
(b) Contracting Preference for Small Business Concerns in a Major
Disaster Area.--
(1) Contracting preference.--A Federal agency shall provide a
contracting preference for a small business concern located in
a disaster area if the small business concern will perform the
work required under the contract in the disaster area.
(2) Credit for meeting contracting goals.--If a Federal
agency awards a contract to a small business concern under the
circumstances described in paragraph (1), the value of the
contract shall be doubled for purposes of determining
compliance with the goals for procurement contracts under
section 251106(a) of this title.
Sec. 251105. Procurement strategies; contract bundling
(a) In General.--To the maximum extent practicable, procurement
strategies used by a Federal agency having contracting authority
shall--
(1) facilitate the maximum participation of small business
concerns as prime contractors, subcontractors, and suppliers;
(2) provide opportunities for the participation of small
business concerns during acquisition planning processes and in
acquisition plans; and
(3) invite the participation of the appropriate Director of
Small and Disadvantaged Business Utilization in acquisition
planning processes and provide the Director access to
acquisition plans.
(b) Market Research.--
(1) In general.--Before proceeding with an acquisition
strategy that could lead to a contract containing consolidated
procurement requirements, the head of a Federal agency shall
conduct market research to determine whether consolidation of
the requirements is necessary and justified.
(2) Factors.--For purposes of paragraph (1), consolidation of
the requirements may be determined as being necessary and
justified if, as compared with the benefits that would be
derived from contracting to meet those requirements if not
consolidated, the Federal Government would derive from the
consolidation measurably substantial benefits, including any
combination of benefits that, in combination, are measurably
substantial.
(3) Benefits.--Benefits described in paragraph (2) may
include--
(A) cost savings;
(B) quality improvements;
(C) reduction in acquisition cycle times;
(D) better terms and conditions; or
(E) any other benefit.
(4) Reduction of administrative or personnel costs not a
sufficient justification.--A reduction of administrative or
personnel costs alone shall not be a justification for bundling
of contract requirements unless the cost savings are expected
to be substantial in relation to the dollar value of the
procurement requirements to be consolidated.
(c) Strategy Specifications.--
(1) In general.--If the head of a contracting agency
determines that an acquisition plan for a procurement involves
a substantial bundling of contract requirements, the head of a
contracting agency shall publish a notice on a public website
that the determination has been made not later than 7 days
after making the determination. Any solicitation for a
procurement related to the acquisition plan shall not be
published earlier than 7 days after the notice is published.
(2) Justification.--
(A) Publication.--With the publication of the
solicitation, the head of a contracting agency shall
publish a justification for the determination.
(B) Contents.--A justification published under
subparagraph (A) shall include--
(i) a description of the specific benefits
anticipated to be derived from the bundling of
contract requirements and a determination that
the benefits justify the bundling;
(ii) an identification of any alternative
contracting approaches that would involve a
lesser degree of bundling of contract
requirements; and
(iii) an assessment of--
(I) the specific impediments to
participation by small business
concerns as prime contractors that
result from the bundling of contract
requirements; and
(II) the specific actions designed to
maximize participation of small
business concerns as subcontractors
(including suppliers) at various tiers
under the contract or contracts that
are awarded to meet the requirements.
(d) Contract Teaming.--
(1) In general.--In the case of a solicitation of offers for
a bundled or consolidated contract that is issued by the head
of a Federal agency, a small business concern that provides for
use of a particular team of subcontractors or a joint venture
of small business concerns may submit an offer for the
performance of the contract.
(2) Evaluation of offers.--
(A) Manner of evaluation.--The head of the Federal
agency shall evaluate an offer described in paragraph
(1) in the same manner as other offers, with due
consideration to the capabilities of all of the
proposed subcontractors or members of the joint venture
as provided in subparagraphs (B) and (C).
(B) Teams.--When evaluating an offer of a small
business prime contractor that includes a proposed team
of small business subcontractors, the head of the
agency shall consider the capabilities and past
performance of each 1st tier subcontractor that is part
of the team as the capabilities and past performance of
the small business prime contractor.
(C) Joint ventures.--When evaluating an offer of a
joint venture of small business concerns, if the joint
venture does not demonstrate sufficient capabilities or
past performance to be considered for award of a
contract opportunity, the head of the Federal agency
shall consider the capabilities and past performance of
each member of the joint venture as the capabilities
and past performance of the joint venture.
(3) Status as a small business concern.--Participation of a
small business concern in a team or a joint venture under this
subsection shall not affect the status of that concern as a
small business concern for any other purpose.
(e) Access to Data.--
(1) Database.--The Administrator shall maintain a database
containing information regarding--
(A) each bundled contract awarded by a Federal
agency; and
(B) each small business concern that has been
displaced as a prime contractor as a result of the
award of a bundled contract.
(2) Analysis.--For each bundled contract that is to be
recompeted as a bundled contract, the Administrator shall
determine--
(A) the amount of savings and benefits (in accordance
with subsection (b)) achieved under the bundling of
contract requirements; and
(B) whether such savings and benefits will continue
to be realized if the contract remains bundled, and
whether such savings and benefits would be greater if
the procurement requirements were divided into separate
solicitations suitable for award to small business
concerns.
(3) Access to data.--
(A) Federal procurement data system.--To assist in
the implementation of this subsection and section
107106 of this title, the Administrator shall have
access to information collected through the Federal
Procurement Data System.
(B) Agency procurement data sources.--To assist in
the implementation of this subsection and section
107106 of this title, the head of each procuring agency
shall provide, on request of the Administrator,
procurement information collected through existing
agency data collection sources.
(f) Bundling Accountability Measures.--
(1) Teaming and joint venture requirements.--
(A) In general.--A Federal agency shall include in
each solicitation for a multiple award contract above
the substantial bundling threshold of the Federal
agency a provision soliciting bids from any responsible
source, including responsible small business concerns
and teams or joint ventures of small business concerns.
(B) Teams.--When evaluating an offer of a small
business prime contractor that includes a proposed team
of small business subcontractors for any multiple award
contract above the substantial bundling threshold of
the Federal agency, the head of the Federal agency
shall consider the capabilities and past performance of
each 1st tier subcontractor that is part of the team as
the capabilities and past performance of the small
business prime contractor.
(C) Joint ventures.--When evaluating an offer of a
joint venture of small business concerns for any
multiple award contract above the substantial bundling
threshold of the Federal agency, if the joint venture
does not demonstrate sufficient capabilities or past
performance to be considered for award of a contract
opportunity, the head of the Federal agency shall
consider the capabilities and past performance of each
member of the joint venture as the capabilities and
past performance of the joint venture.
(2) Policies on reduction of contract bundling.--
(A) In general.--The Federal Acquisition Regulatory
Council shall amend the Federal Acquisition Regulation
to--
(i) establish a Governmentwide policy
regarding contract bundling, including
regarding the solicitation of teaming and joint
ventures under paragraph (1); and
(ii) require that the policy established
under clause (i) be published on the website of
each Federal agency.
(B) Rationale for contract bundling.--Not later than
30 days after the date on which the head of a Federal
agency submits data certifications to the Administrator
for Federal Procurement Policy, the head of the Federal
agency shall publish on the website of the Federal
agency a list and rationale for any bundled contract
for which the Federal agency solicited bids or that was
awarded by the Federal agency.
Sec. 251106. Goals for participation by small business concerns in
procurement contracts
(a) Governmentwide Goals.--
(1) In general.--The President shall annually establish
separate Governmentwide goals for procurement contracts awarded
to each of the following categories of small business concern:
(A) Small business concerns.
(B) Qualified HUBZone small business concerns.
(C) Small business concerns owned and controlled by
service-disabled veterans.
(D) Small business concerns owned and controlled by
socially and economically disadvantaged individuals.
(E) Small business concerns owned and controlled by
women.
(2) Overall goal.--
(A) In general.--The overall Governmentwide 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.
(B) Participation.--In meeting the goal under
subparagraph (A), the Government shall ensure the
participation of small business concerns from a wide
variety of industries and from a broad spectrum of
small business concerns within each industry.
(3) Goals for specific categories of small business
concern.--
(A) Qualified hubzone small business concerns.--The
Governmentwide goal for participation by qualified
HUBZone small business concerns shall be established at
not less than 3 percent of the total value of all prime
contract and subcontract awards for each fiscal year.
(B) Small business concerns owned and controlled by
service-disabled veterans.--The Governmentwide 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.
(C) Small business concerns owned and controlled by
socially and economically disadvantaged individuals.--
The Governmentwide 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 and subcontract awards for
each fiscal year.
(D) Small business concerns owned and controlled by
women.--The Governmentwide goal for participation by
small business concerns owned and controlled by women
shall be established at not less than 5 percent of the
total value of all prime contract and subcontract
awards for each fiscal year.
(4) Federal agency goals.--
(A) In general.--A Federal agency shall have an
annual goal that presents, for that Federal agency, the
maximum practicable opportunity for small business
concerns (including qualified HUBZone small business
concerns, small business concerns owned and controlled
by service-disabled veterans, small business concerns
owned and controlled by socially and economically
disadvantaged individuals, small business concerns
owned and controlled by women, and other small business
concerns) to participate in the performance of
contracts let by the Federal agency.
(B) Cumulative federal agency goals to meet or exceed
governmentwide goal.--The Administrator and the
Administrator for Federal Procurement Policy shall,
when exercising authority under subsection (b), ensure
that the cumulative annual prime contract goals for all
Federal agencies meet or exceed the annual
Governmentwide prime contract goal established by the
President under this subsection.
(C) Scorecard program for evaluating federal agency
compliance with small business contracting goals.--
(i) Definitions.--In this subparagraph:
(I) Federal agency scorecard.--The
term ``Federal agency scorecard'' means
the scorecard developed by the
Administrator under clause (ii).
(II) Scorecard.--The term
``scorecard'' means a summary using a
rating system to evaluate a Federal
agency's efforts to meet goals
established under subparagraph (A)
that--
(aa) includes the measures
described in clause (iii); and
(bb) assigns a score to each
Federal agency evaluated.
(ii) Federal agency scorecard.--In
consultation with Federal agencies, the
Administrator shall--
(I) develop a methodology for
calculating a score to be used to
evaluate the compliance of each Federal
agency with meeting the goals
established under subparagraph (A)
based on each such goal; and
(II) develop a Federal agency
scorecard based on that methodology.
(iii) Use of federal agency scorecard.--The
Administrator shall establish and carry out a
program to use the Federal agency scorecard to
evaluate whether each Federal agency is
creating the maximum practicable opportunities
for the award of prime contracts and
subcontracts to small business concerns
(including qualified HUBZone small business
concerns, small business concerns owned and
controlled by service-disabled veterans, small
business concerns owned and controlled by
socially and economically disadvantaged
individuals, small business concerns owned and
controlled by women, and other small business
concerns) by assigning a score to each Federal
agency for the previous fiscal year.
(iv) Contents of scorecard.--The Federal
agency scorecard shall include, for each
Federal agency, the following information:
(I) A determination whether the
Federal agency met each of the prime
contract goals established under
subparagraph (A) with respect to small
business concerns (including qualified
HUBZone small business concerns, small
business concerns owned and controlled
by service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns).
(II) A determination whether the
Federal agency met each of the
subcontract goals established under
this chapter with respect to small
business concerns (including qualified
HUBZone small business concerns, small
business concerns owned and controlled
by service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns).
(III) The number of small business
concerns (including qualified HUBZone
small business concerns, small business
concerns owned and controlled by
service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns) awarded prime contracts in
each North American Industry
Classification System code during the
fiscal year and a comparison to the
number of awarded contracts during the
prior fiscal year, if available.
(IV) The number of small business
concerns (including qualified HUBZone
small business concerns, small business
concerns owned and controlled by
service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns) awarded subcontracts in each
North American Industry Classification
System code during the fiscal year and
a comparison to the number of awarded
subcontracts during the prior fiscal
year, if available.
(V) Any other factors that the
Administrator considers to be important
to achieve the maximum practicable
utilization of small business concerns
(including qualified HUBZone small
business concerns, small business
concerns owned and controlled by
service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns)
(v) Weighted factors.--In using the Federal
agency scorecard to evaluate and assign a score
to a Federal agency, the Administrator shall
base--
(I) 50 percent of the score on the
dollar value of prime contracts
described in clause (iv)(I); and
(II) 50 percent of the score on the
information provided in subclauses (II)
through (V) of clause (iv), weighted in
a manner determined by the
Administrator to encourage the maximum
practicable opportunity for the award
of prime contracts and subcontracts to
small business concerns, small business
concerns (including qualified HUBZone
small business concerns, small business
concerns owned and controlled by
service-disabled veterans, small
business concerns owned and controlled
by socially and economically
disadvantaged individuals, small
business concerns owned and controlled
by women, and other small business
concerns).
(vi) Inclusion in report.--The Federal agency
scorecard used by the Administrator under this
subsection shall be submitted to the President
and Congress with the report submitted under
section 107108(b) of this title.
(5) Procurement procedures.--
(A) In general.--To facilitate the attainment of a
goal for the participation of small business concerns
owned and controlled by socially and economically
disadvantaged individuals that is established for a
Federal agency under this subsection, the head of the
Federal agency may enter into contracts using--
(i) less than full and open competition by
restricting the competition for such awards to
small business concerns owned and controlled by
socially and economically disadvantaged
individuals; and
(ii) a price evaluation preference not in
excess of 10 percent when evaluating an offer
received from a small business concern owned
and controlled by socially and economically
disadvantaged individuals as the result of an
unrestricted solicitation.
(B) Applicability.--Subparagraph (A) does not apply
to the Department of Defense, the Coast Guard, or the
National Aeronautics and Space Administration.
(C) Implementation through the federal acquisition
regulation.--
(i) In general.--The Federal Acquisition
Regulation shall provide for uniform
implementation of the authority provided in
subparagraph (A).
(ii) Matters to be addressed.--The provisions
of the Federal Acquisition Regulation under
clause (i) shall include--
(I) conditions for the use of advance
payments;
(II) provisions for contract payment
terms that provide for--
(aa) accelerated payment for
work performed during the
period for contract
performance; and
(bb) full payment for work
performed;
(III) guidance on how contracting
officers may use, in solicitations for
various classes of products or
services, a price evaluation preference
under subparagraph (A)(ii), to provide
a reasonable advantage to small
business concerns owned and controlled
by socially and economically
disadvantaged individuals without
effectively eliminating any
participation of other small business
concerns; and
(IV)(aa) procedures for a person to
request the head of a Federal agency to
determine whether the use of
competitions restricted to small
business concerns owned and controlled
by socially and economically
disadvantaged individuals at a
contracting activity of the Federal
agency has caused a particular industry
category to bear a disproportionate
share of the contracts awarded to
attain the goal established for that
contracting activity; and
(bb) guidance for limiting the use of
such restricted competitions in the
case of any contracting activity and
class of contracts determined in
accordance with such procedures to have
caused a particular industry category
to bear a disproportionate share of the
contracts awarded to attain the goal
established for that contracting
activity.
(D) Termination.--This paragraph shall cease to be
effective at the end of September 30, 2003.
(b) Federal Agency Goals.--
(1) In general.--The head of each Federal agency shall, after
consultation with the Administrator, establish goals for the
participation by small business concerns (including qualified
HUBZone small business concerns, small business concerns owned
and controlled by service-disabled veterans, small business
concerns owned and controlled by socially and economically
disadvantaged individuals, small business concerns owned and
controlled by women, and other small business concerns) in
procurement contracts of the agency. The goals shall separately
address prime contract awards and subcontract awards for each
category of small business covered.
(2) Realistic reflection of potential.--Goals established
under this section shall be jointly established by the
Administration and the head of each Federal agency and shall
realistically reflect the potential of small business concerns
(including qualified HUBZone small business concerns, small
business concerns owned and controlled by service-disabled
veterans, small business concerns owned and controlled by
socially and economically disadvantaged individuals, small
business concerns owned and controlled by women, and other
small business concerns) to perform procurement contracts of
the agency and to perform subcontracts under those contracts.
Contracts excluded from review by procurement center
representatives pursuant to section 251110(j)(2) of this title
shall not be considered when establishing the goals.
(3) Disagreement.--If the Administrator and the head of a
Federal agency fail to agree on established goals, the
disagreement shall be submitted to the Administrator for
Federal Procurement Policy for final determination.
(4) Expansion of participation.--
(A) In general.--After establishing goals under this
subsection for a fiscal year, the head of a Federal
agency shall develop a plan for achieving the goals at
both the prime contract level and the subcontract
level.
(B) Responsibilities.--A plan under subparagraph (A)
shall apportion responsibilities among the Federal
agency's acquisition executives and officials.
(C) Participation from each industry category.--In
establishing goals under this subsection, the head of a
Federal agency shall make a consistent effort to
annually expand participation by small business
concerns from each industry category in procurement
contracts and subcontracts of the Federal agency,
including participation by qualified HUBZone small
business concerns, small business concerns owned and
controlled by service-disabled veterans, small business
concerns owned and controlled by socially and
economically disadvantaged individuals, and small
business concerns owned and controlled by women.
(D) Considerations.--The head of a Federal agency, in
attempting to attain participation under subparagraph
(A), shall consider--
(i) contracts awarded as the result of
unrestricted competition; and
(ii) contracts awarded after competition
restricted to eligible small business concerns
under this chapter and under the business
development program.
(E) Communication by procuring employees and program
managers of importance of achieving small business
goals.--
(i) In general.--A procurement employee or
program manager described in clause (ii) shall
communicate to the subordinates of the
procurement employee or program manager the
importance of achieving small business goals
established under subparagraph (A).
(ii) Procurement employees and program
managers.--A procurement employee or program
manager referred to in clause (i) is a senior
procurement executive, senior program manager,
or Director of Small and Disadvantaged Business
Utilization of a Federal agency having
contracting authority.
(F) Responsibility for achieving small business
goals.--
(i) Definition of responsible for
acquisition.--In this subparagraph, the term
``responsible for acquisition'', with respect
to a member of the senior executive service or
other senior official, refers to a member of
the senior executive service or other senior
official who--
(I) acquires services or supplies;
(II) directs Federal agency
organizations to acquire services or
supplies; or
(III) oversees acquisition officials,
including program managers, contracting
officers, and other acquisition
workforce personnel responsible for
formulating and approving acquisition
strategies and plans.
(ii) Steps by federal agency heads to ensure
that members of the senior executive service
responsible for acquisition, other senior
officials responsible for acquisition, and
other members of the senior executive service
assume responsibility.--The head of a Federal
agency shall take steps to ensure that members
of the senior executive service (as defined
under section 3396(a) of title 5) responsible
for acquisition, other senior officials
responsible for acquisition, and other members
of the senior executive service, as
appropriate, assume responsibility for the
Federal agency's success in achieving each of
the small business prime contracting and
subcontracting goals and percentages by--
(I) promoting responsiveness to small
business concerns;
(II) communicating the importance of
achieving the Federal agency's small
business contracting goals; and
(III) encouraging awareness of,
outreach toward, and support of small
business concerns.
(c) Contractors Sponsored by Department of Energy.--Subcontracts that
are awarded to 1st tier subcontractors by management and operating
contractors sponsored by the Department of Energy to qualified HUBZone
small business concerns, small businesses concerns owned and controlled
by service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged individuals,
small business concerns owned and controlled by women, and other small
business concerns shall be considered toward the Governmentwide goals
under subsection (a) and Federal agency goals under subsection (b).
(d) Goaling Guideline.--The Administrator shall review and revise the
Goaling Guidelines for the Small Business Preference Programs for Prime
and Subcontract Federal Procurement Goals and Achievements to the
extent necessary to ensure that--
(1) Federal agency subcontracting goals are established on
the basis of realistically achievable improvements to levels of
subcontracting rather than on the basis of an average of
previous years' subcontracting performance;
(2) Federal agency contracting and subcontracting goals are
established in a manner that does not exclude categories of
contracts on the basis of--
(A) the type of goods or services for which the
Federal agency contracts; or
(B) in the case of a contract subject to competitive
procedures under chapter 33 of title 41--
(i) whether or not funding for the contract
is made directly available to the Federal
agency by an appropriations Act or is made
available by reimbursement from another agency
or account; or
(ii) whether or not a contract is subject to
the Federal Acquisition Regulation; and
(3) if a Federal agency contracting goal or subcontracting
goal is established at a level lower than the Governmentwide
goal for small business concerns or the relevant category of
small business concern, the Administrator documents the basis
for the decision to establish the lower goal.
Sec. 251107. No effect on certain small business setasides
(a) In General.--Nothing in this chapter or any other provision of
law precludes exclusive small business setasides for procurements of
architectural and engineering services, research, development, test,
and evaluation.
(b) Authority.--A Federal agency may develop setasides described in
subsection (a) to further the interests of small business in the areas
described in that subsection.
Sec. 251108. Mandatory contract reservation
(a) In General.--A contract for the purchase of a good or service
that has an anticipated value greater than $2,500 but not greater than
$100,000 shall be reserved exclusively for small business concerns
unless the contracting officer is unable to obtain offers from 2 or
more small business concerns that are--
(1) competitive with market prices; and
(2) competitive with regard to the quality and delivery of
the good or service being purchased.
(b) Consideration of Timely Offers.--In carrying out subsection (a),
a contracting officer shall consider a responsive offer timely received
from an eligible small business concern offeror.
(c) Effect of Section.--Nothing in this section precludes an award of
a contract with a value not greater than $100,000 under--
(1) the business development program;
(2) section 2323 of title 10; or
(3) section 251106(a)(5) of this title.
Sec. 251109. Offices of Small and Disadvantaged Business Utilization
(a) Definitions.--In this section:
(1) Director.--The term ``Director'' means the Director of
Small and Disadvantaged Business Utilization of a Federal
agency appointed under subsection (c).
(2) Office.--The term ``Office'' means the Office of Small
and Disadvantaged Business Utilization of a Federal agency
established by subsection (b).
(b) Establishment of Offices.--There is established in each Federal
agency having procurement powers an office to be known as the Office of
Small and Disadvantaged Business Utilization.
(c) Director.--
(1) In general.--The management of an Office shall be vested
in an officer or employee of the Federal agency, appointed by
the head of the Federal agency, who shall be known as the
Director of Small and Disadvantaged Business Utilization of the
Federal agency.
(2) Qualifications.--The Director shall be an individual with
experience serving in any combination of the following roles:
(A) Program manager, deputy program manager, or
assistant program manager for Federal acquisition
program.
(B) Chief engineer, systems engineer, assistant
engineer, or product support manager for Federal
acquisition program.
(C) Federal contracting officer.
(D) Small business technical advisor.
(E) Contracts administrator for Federal Government
contracts.
(F) Attorney specializing in Federal procurement law.
(G) Small business liaison officer.
(H) Officer or employee who managed Federal
Government contracts for a small business.
(I) Individual whose primary responsibilities were
for the functions and duties of chapter 231, 233, 241,
243, or 245 of this title or division H of subtitle II
of this title.
(3) Position.--The Director shall be appointed to a position
that is a Senior Executive Service position (as defined under
section 3132(a) of title 5), except that, for a Federal agency
in which the positions of Chief Acquisition Officer and senior
procurement executive are not Senior Executive Service
positions, the Director may be appointed to a position
compensated at not less than the minimum rate of basic pay
payable for grade GS-15 of the General Schedule under section
5332 of title 5 (including comparability payments under section
5304 of that title).
(4) Line of authority.--
(A) In General.--The Director for a Federal agency
shall be responsible (including responsibility with
respect to performance appraisals) only to, and shall
report directly to, the head or deputy head of the
Federal agency.
(B) Department of defense.--The Director for the
Department of Defense shall be responsible (including
responsibility with respect to performance appraisals)
only to, and shall report directly to, the Secretary of
Defense or a designee of the Secretary.
(5) Exclusive duties.--The Director shall carry out
exclusively the duties enumerated in this subtitle and subtitle
I, and, while holding the position of Director, shall not hold
any other title, position, or responsibility, except as
necessary to carry out responsibilities under this section.
(d) General Responsibilities.--The Director for a Federal agency
shall be responsible for the implementation and execution of the
functions and duties under chapters 231, 233, 241, 243, and 245 of this
title and division H of subtitle II of this title.
(e) Duties.--The Director for a Federal agency--
(1) shall--
(A) identify proposed solicitations that involve
significant bundling of contract requirements; and
(B) work with acquisition officials of the Federal
agency and the Administrator to revise the procurement
strategies for proposed solicitations as appropriate to
increase the probability of participation by small
business concerns as prime contractors or to facilitate
participation by small business concerns as
subcontractors and suppliers, if a solicitation for a
bundled contract is to be issued;
(2) shall assist small business concerns in obtaining
payments, required late payment interest penalties, or
information regarding payments due to small business concerns
from a Federal agency or a contractor, in conformity with
chapter 39 of title 31 or any other protection for contractors
or subcontractors (including suppliers) that is included in the
Federal Acquisition Regulation or any individual agency
supplement to the Governmentwide regulation;
(3) shall review and advise the Federal agency on any
decision to convert an activity performed by a small business
concern to an activity performed by a Federal employee;
(4) shall provide to the Chief Acquisition Officer and senior
procurement executive of the Federal agency advice and comments
on acquisition strategies, market research, and justifications
relating to section 241119 of this title;
(5) may provide training to small business concerns and
contract specialists, to the extent that the training does not
interfere with the Director's carrying out of other
responsibilities under this section;
(6) shall receive unsolicited proposals and, when
appropriate, forward a proposal to personnel of the activity
responsible for reviewing the proposal;
(7) shall, when notified by a small business concern prior to
the award of a contract that the small business concern
believes that a solicitation, request for proposal, or request
for quotation unduly restricts the ability of the small
business concern to compete for the award--
(A) submit the notice of the small business concern
to the contracting officer and, if necessary, recommend
ways in which the solicitation, request for proposal,
or request for quotation may be altered to increase the
opportunity for competition;
(B) inform the advocate for competition of the
Federal agency (as established under section 1705 of
title 41 or section 2318 of title 10) of the notice;
and
(C) ensure that the small business concern is aware
of other resources and processes available to address
unduly restrictive provisions in a solicitation,
request for proposal, or request for quotation, even if
the resources and processes are provided by the Federal
agency, the Administrator, the Comptroller General, or
a procurement technical assistance program established
under chapter 142 of title 10;
(8) shall review summary data provided by purchase card
issuers of purchases made by the agency greater than the micro-
purchase threshold (as defined under section 1902 of title 41)
and less than the simplified acquisition threshold to ensure
that the purchases have been made in compliance with the
provisions of subtitles I and II of this title and have been
properly recorded in the Federal Procurement Data System, if
the method of payment is a purchase card issued by the
Department of Defense pursuant to section 2784 of title 10 or
by the head of an executive agency pursuant to section 1909 of
title 41;
(9) shall provide assistance to a small business concern
awarded a contract or subcontract under subtitles I and II of
this title or under title 10 or title 41, in finding resources
for education and training on compliance with contracting
regulations (including the Federal Acquisition Regulation)
after award of the contract or subcontract; and
(10) shall review all subcontracting plans required by
section 243103 of this title to ensure that the plan provides
maximum practicable opportunity for small business concerns to
participate in the performance of the contract to which the
plan applies.
(f) Supervisory Authority.--The Director for a Federal agency shall
have supervisory authority over personnel of the Federal agency to the
extent that the functions and duties of those personnel relate to
functions and duties under chapters 231, 233, 241, 243, and 245 of this
title and division H of subtitle II of this title.
(g) Small Business Technical Advisers.--
(1) Assignment.--The Director for a Federal agency shall
assign a small business technical adviser to each office to
which the Administrator assigns a procurement center
representative.
(2) Qualifications.--A small business technical adviser--
(A) shall be a full-time employee of the procurement
activity; and
(B) shall be well qualified, technically trained, and
familiar with the goods or services purchased at the
procurement activity.
(3) Principal duty.--The principal duty of a small business
technical adviser shall be to assist the SBA procurement center
representative in carrying out duties and functions relating to
chapters 231, 233, 241, 243, and 245 of this title and division
H of subtitle II of this title.
(h) Cooperation and Consultation.--The Director for a Federal agency
shall cooperate, and consult on a regular basis, with the Administrator
with respect to carrying out the functions and duties described in
subsection (d).
(i) Recommendations Concerning Award of Contracts.--
(1) In general.--The Director for a Federal agency shall make
recommendations to contracting officers concerning whether a
particular contract requirement should be awarded pursuant to
chapter 231, 233, 241 (except section 241119), 243, or 245 of
this title, division H of subtitle II of this title, or section
2323 of title 10.
(2) Considerations.--A recommendation under paragraph (1)
shall be made with due regard to the requirements of sections
251110 and 251112 of this title.
(3) Documentation of failure to accept recommendation.--The
failure of a contracting officer to accept a recommendation
under paragraph (1) shall be documented and included within the
appropriate contract file.
(j) Applicability of Section.--This section does not apply to SBA.
Sec. 251110. Procurement center representatives
(a) Definition of Major Procurement Center.--In this section, the
term ``major procurement center'' means a procurement center that, in
the opinion of the Administrator, purchases substantial dollar amounts
of goods and services (including goods or services that are
commercially available).
(b) Assignment of Procurement Center Representatives.--The
Administrator shall assign to each major procurement center a
procurement center representative with such assistance as is
appropriate.
(c) Activities.--A procurement center representative may--
(1)(A) attend any provisioning conference or similar
evaluation session during which determinations are made
concerning whether requirements are to be procured through
other than full and open competition; and
(B) make recommendations with respect to those requirements
to the members of the conference or session;
(2)(A) review, at any time, barriers to participation by
small business concerns in Federal contracting imposed on goods
and services through acquisition method coding or similar
procedures; and
(B) recommend to personnel of the appropriate activity the
prompt reevaluation of such barriers;
(3)(A) review barriers to participation by small business
concerns in Federal contracting arising out of restrictions on
the rights of the United States in technical data; and
(B) when appropriate, recommend that personnel of the
appropriate activity initiate a review of the validity of such
an asserted restriction;
(4) review any bundled contact or consolidated contract or
solicitation for a bundled contract or consolidated contract in
accordance with this subtitle;
(5) have access to procurement records and other data of the
major procurement center commensurate with the level of the
procurement center representative's approved security clearance
classification, the data to be provided on request in
electronic format, if available;
(6)(A) receive unsolicited proposals from small business
concerns; and
(B) transmit each proposal to personnel of the activity of a
Federal agency who are responsible for reviewing such
proposals, which personnel shall furnish the procurement center
representative with information regarding the disposition of
the proposal;
(7) consult with the Director of Small and Disadvantaged
Business Utilization of that Federal agency and the agency
personnel described in subsections (f) and (g) of section
251109 of this title with regard to agency insourcing decisions
covered by subsection (e)(3) of that section;
(8) advocate for the maximum practicable utilization of small
business concerns in Federal contracting, including by
advocating against the consolidation or bundling of contract
requirements when not justified;
(9) assist small business concerns with finding resources for
education and training on compliance with contracting
regulations (including the Federal Acquisition Regulation)
after award of a contract or subcontract; and
(10) carry out any other responsibility assigned by the
Administrator.
(d) Appeal of Failure To Act Favorably on Recommendation.--
(1) In general.--A procurement center representative may
appeal the failure to act favorably on any recommendation made
under subsection (c).
(2) Procedure.--An appeal under paragraph (1) shall be filed
and processed in the same manner and shall be subject to the
same conditions and limitations as an appeal filed by the
Administrator under section 251101(a) of this title.
(e) Small Business Technical Advisers.--
(1) In general.--The Administrator shall assign and co-locate
at least 2 small business technical advisers to each major
procurement center in addition to such other advisers as may be
authorized from time to time.
(2) Duties.--The sole duties of small business technical
advisers assigned under paragraph (1) shall be--
(A) to assist the procurement center representative
for the center to which the small business technical
advisers are assigned in carrying out the functions
described in subsection (c); and
(B) to assist the procurement center representative
for each office to which the Administrator assigns a
procurement center representative under section
251109(g) of this title.
(f) Status; Qualifications.--
(1) A procurement center representative--
(A) shall be a full-time employee of SBA;
(B) shall be fully qualified, technically trained,
and familiar with the goods and services procured by
the major procurement center to which the procurement
center representative is assigned; and
(C) shall have the certification described in
paragraph (2).
(2) Certification requirements.--
(A) In general.--Consistent with the requirements of
subparagraph (B), a procurement center representative
shall have a Level III Federal Acquisition
Certification in Contracting (or any successor
certification) or the equivalent Department of Defense
certification, except that any person serving in such a
position on or before January 3, 2013, may continue to
serve in that position for a period of 5 years without
the required certification.
(B) Delay of certification requirements.--
(i) Timing.--The certification described in
subparagraph (A) is not required for any person
serving as a procurement center representative
until the date that is 1 calendar year after
the date on which the person is appointed as a
procurement center representative.
(ii) Applicability.--The requirements of
clause (i) shall--
(I) be included in any initial job
posting for the position of a
procurement center representative; and
(II) apply to any person appointed as
a procurement center representative
after January 3, 2013.
(g) Compensation.--The Administrator shall establish personnel
positions for procurement representatives assigned under this section
that are classified at a grade level of the General Schedule sufficient
to attract and retain highly qualified personnel.
(h) Training.--
(1) In general.--At such times as the Administrator considers
appropriate, a procurement center representative shall conduct
familiarization sessions for contracting officers and other
appropriate personnel of the major procurement center to which
the procurement center representative is assigned.
(2) Purpose.--A familiarization session shall acquaint the
participants with, and instruct the participants in methods
designed to further the purposes of, this section.
(3) Limitation.--A procurement center representative may
provide training under paragraph (1) only to the extent that
the training does not interfere with the carrying out by the
procurement center representative of other activities under
this section.
(i) Annual Briefing and Report.--
(1) In general.--A procurement center representative shall
prepare and personally deliver an annual briefing and report to
the head of the major procurement center to which the
procurement center representative is assigned.
(2) Contents.--A briefing and report under paragraph (1)
shall--
(A) detail the past and planned activities of the
procurement center representative; and
(B) contain such recommendations for improvement in
the operation of the major procurement center as may be
appropriate.
(3) Response.--The head of the major procurement center
shall--
(A) personally receive the briefing and report; and
(B) not later than 60 calendar days after receipt,
respond, in writing, to each recommendation made by the
procurement center representative.
(j) Scope of Review.--The Administrator--
(1) may not limit the scope of review by the procurement
center representative for any solicitation of a contract or
task order without regard to whether the contract or task order
or part of the contract or task order is set aside for small
business concerns, whether 1 or more contracts or task order
awards are reserved for small business concerns under a
multiple award contract, or whether or not the solicitation
would result in a bundled contract (as defined in section
101102 of this title), a consolidated contract (as defined in
section 101102 of this title), or a bundled or consolidated
task order; and
(2) shall, unless the contracting agency requests a review,
limit the scope of review by the procurement center
representative for any solicitation of a contract or task order
if such solicitation is awarded by or for the Department of
Defense and--
(A) is conducted pursuant to section 22 of the Arms
Export Control Act (22 U.S.C. 2762);
(B) is a humanitarian operation as defined in section
401(e) of title 10;
(C) is for a contingency operation, as defined in
section 101(a)(13) of title 10;
(D) is to be awarded pursuant to an agreement with
the government of a foreign country in which Armed
Forces of the United States are deployed; or
(E) both the place of award and the place of
performance are outside of the United States and its
territories.
(k) Standards for Measuring Cost Savings From Procurement Center
Representatives.--The Administrator and the Comptroller General shall
jointly establish standards for measuring--
(1) cost savings achieved through the efforts of procurement
center representatives; and
(2) the extent to which competition has been increased as a
result of those efforts.
Sec. 251111. Department of Defense, Coast Guard, and National
Aeronautics and Space Administration contract goals
A Federal agency subject to the requirements of section 2323 of title
10 shall, when implementing those requirements--
(1) establish policies and procedures that ensure that there
will be no reduction in the number or dollar value of contracts
awarded under this chapter or division F to achieve any goal or
other program objective; and
(2) ensure that those requirements will not alter or change
the procurement process used to implement this chapter, chapter
231, or chapter 233.
Sec. 251112. Actions by procurement center representatives to ensure
compliance
A procurement center representative assigned under section 251109 or
251110 of this title, in addition to such other duties as the
Administrator may assign, shall--
(1) monitor the performance of the procurement activities to
which the procurement center representative is assigned to
ascertain the degree of compliance with the requirements of
section 251111 of this title;
(2) report to the procurement center representative's
immediate supervisors all instances of noncompliance with those
requirements; and
(3) increase, insofar as possible, the number and dollar
value of procurements that may be used for the programs
established under this chapter, division F of this subtitle,
and section 2323 of title 10.
Sec. 251113. Limitations on subcontracting
A concern shall not be awarded a contract under section 251101 of
this title as a small business concern unless the concern agrees to
satisfy the requirements of section 291107 of this title.
Sec. 251114. Multiple award contracts
The Administrator for Federal Procurement Policy and the
Administrator, in consultation with the Administrator of General
Services, shall by regulation establish guidance under which Federal
agencies may--
(1) set aside 1 or more parts of a multiple award contract
for small business concerns, including the subcategories of
small business concerns identified in section 251106(b) of this
title;
(2) notwithstanding the fair opportunity requirements under
section 2304c(b) of title 10 and section 4106(c) of title 41,
set aside orders placed against multiple award contracts for
small business concerns, including the subcategories of small
business concerns identified in section 251106(b) of this
title; and
(3) reserve 1 or more contract awards for small business
concerns under full and open multiple award procurements,
including the subcategories of small business concerns
identified in section 251106(b) of this title.
Sec. 251115. Data quality improvement plan
(a) In General.--In consultation with the Small Business Procurement
Advisory Council, the Administrator for Federal Procurement Policy, and
the Administrator of General Services, the Administrator shall develop
a plan to improve the quality of data reported on bundled contracts or
consolidated contracts in the Federal procurement data system described
in section 1122(a)(4)(A) of title 41.
(b) Plan Requirements.--The plan shall--
(1) describe the roles and responsibilities of the
Administrator, each Director of Small and Disadvantaged
Business Utilization, the Administrator for Federal Procurement
Policy, the Administrator of General Services, senior
procurement executives, and Chief Acquisition Officers in--
(A) improving the quality of data reported on bundled
contracts or consolidated contracts in the Federal
procurement data system; and
(B) contributing to the annual report required by
section 107106 of this title;
(2) recommend changes in policies and procedures, including
training procedures of personnel with relevant
responsibilities, to properly identify and mitigate the effects
of bundled contracts or consolidated contracts;
(3) recommend requirements for periodic and statistically
valid data verification and validation; and
(4) recommend clear data verification responsibilities.
(c) Plan Submission.--The Administrator shall submit the plan 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 December 1, 2016.
(d) Certification.--The Administrator shall annually provide to the
Committee on Small Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the Senate a
certification of the accuracy and completeness of data reported on
bundled and consolidated contracts.
Sec. 251116. Post-award compliance resources
The Administrator shall provide to small business development centers
and entities participating in the Procurement Technical Assistance
Cooperative Agreement Program under chapter 142 of title 10, and shall
make available on the SBA website, a list of resources for small
business concerns seeking education and assistance on compliance with
contracting regulations (including the Federal Acquisition Regulation)
after award of a contract or subcontract.
Sec. 251117. Regulatory changes and training materials
(a) In General.--Not less than annually, the Administrator shall
provide to the Defense Acquisition University (established under
section 1746 of title 10), the Federal Acquisition Institute
(established under section 1201 of title 41), the individual
responsible for mandatory training and education of the acquisition
workforce of each agency (described under section 1703(f)(1)(C) of
title 41), small business development centers, and entities
participating in the Procurement Technical Assistance Cooperative
Agreement Program under chapter 142 of title 10--
(1) a list of all changes made in the prior year to
regulations promulgated--
(A) by the Administrator that affect Federal
acquisition; and
(B) by the Federal Acquisition Council that implement
amendments to subtitles I and II of this title; and
(2) any materials the Administrator has developed that
explain, train, or assist Federal agencies or departments or
small business concerns with compliance with the regulations
described in paragraph (1).
(b) Training To Be Updated.--After receipt of information from the
Administrator pursuant to subsection (a), the Defense Acquisition
University (established under section 1746 of title 10) and the Federal
Acquisition Institute (established under section 1201 of title 41)
shall periodically update the training provided to the acquisition
workforce to incorporate the information.
Chapter 253--HUBZone Program
Sec.
253101. Definitions.
253102. Establishment of HUBZone program.
253103. Sole source preference.
253104. Setaside preference.
253105. Appeal of decision not to award contract.
253106. Price evaluation preference in full and open competition.
253107. Relationship to other contracting preferences.
253108. Verification of eligibility.
253109. Mentor-protege program.
253110. Wholesalers and retailers.
253111. List of qualified HUBZone small business concerns.
253112. Regulations.
253113. Penalties.
Sec. 253101. Definitions
In this chapter:
(1) Base closure area.--
(A) In general.--Subject to subparagraph (B), the
term ``base closure area'' means--
(i) land within the external boundaries of a
military installation that was closed through a
privatization process under--
(I) the Defense Base Closure and
Realignment Act of 1990 (part A of
title XXIX of division B of Public Law
101-510; 10 U.S.C. 2687 note);
(II) title II of the Defense
Authorization Amendments and Base
Closure and Realignment Act (Public Law
100-526; 10 U.S.C. 2687 note);
(III) section 2687 of title 10; or
(IV) any other provision of law
authorizing or directing the Secretary
of Defense or the Secretary of a
military department to dispose of real
property at the military installation
for purposes relating to base closures
or redevelopment, while retaining the
authority to enter into a leaseback of
all or a portion of the property for
military use;
(ii) the census tract or nonmetropolitan
county in which land described in clause (i) is
wholly contained;
(iii) a census tract or nonmetropolitan
county the boundaries of which intersect the
area described in clause (i); and
(iv) a census tract or nonmetropolitan county
the boundaries of which are contiguous to the
area described in clause (ii) or (iii).
(B) Limitation.--A base closure area shall be treated
as a HUBZone--
(i) with respect to a census tract or
nonmetropolitan county described in
subparagraph (A), for a period of not less than
8 years, beginning on the date on which the
military installation undergoes final closure
and ending on the date on which the
Administrator makes a final determination
whether to implement the applicable designation
as a qualified census tract or qualified
nonmetropolitan county in accordance with the
results of the decennial census conducted after
the area was initially designated as a base
closure area; and
(ii) if the area was treated as a HUBZone at
any time after 2010, until such time as the
Administrator makes a final determination
whether to implement the applicable designation
as a qualified census tract or qualified
nonmetropolitan county, after the 2020
decennial census.
(C) Definitions.--In this paragraph:
(i) Census tract.--The term ``census tract''
means a census tract delineated by the Bureau
of the Census in the most recent decennial
census that is not located in a nonmetropolitan
county and does not otherwise qualify as a
qualified census tract.
(ii) Nonmetropolitan county.--The term
``nonmetropolitan county'' means a county that
was not located in a metropolitan statistical
area (as defined in section 143(k)(2)(B) of the
Internal Revenue Code of 1986 (26 U.S.C.
143(k)(2)(B))) at the time of the most recent
census taken for purposes of selecting
qualified census tracts and does not otherwise
qualify as a qualified nonmetropolitan county.
(2) Full and open competition.--The term ``full and open
competition'' has the meaning given the term in section 107 of
title 41.
(3) Historically underutilized business zone.--
(A) In general.--The term ``historically
underutilized business zone'' means an area located
within 1 or more--
(i) qualified census tracts;
(ii) qualified nonmetropolitan counties;
(iii) areas of land within the external
boundaries of an Indian reservation;
(iv) redesignated areas;
(v) base closure areas; or
(vi) qualified disaster areas.
(B) HUBZone status timeline and commencement.--
(i) 2004 enactment.--A base closure area that
has undergone final closure shall be treated as
a HUBZone for a period of 5 years.
(ii) 2013 enactment.--
(I) Definition of covered base
closure area.--In this clause, the term
``covered base closure area'' means a
base closure area that, on or before
January 2, 2013, was treated as a
HUBZone for purposes of the Small
Business Act (15 U.S.C. 631 et seq.)
pursuant to section 152(a)(2) of the
Small Business Reauthorization and
Manufacturing Assistance Act of 2004
(15 U.S.C. 632 note).
(II) Treatment as HUBZone.--
(aa) In general.--Subject to
item (bb), a covered base
closure area shall be treated
as a HUBZone for purposes of
this subtitle and subtitle II
during the 5-year period
beginning on January 2, 2013.
(bb) Limitation.--The total
period of time that a covered
base closure area is treated as
a HUBZone for purposes of this
subtitle and subtitle II
pursuant to this clause and
clause (i) shall not exceed 5
years.
(4) HUBZone.--The term ``HUBZone'' means a historically
underutilized business zone.
(5) HUBZone small business concern.--The term ``HUBZone small
business concern'' means--
(A) a small business concern that is at least 51
percent owned and controlled by United States citizens;
(B) a small business concern that is--
(i) an Alaska Native Corporation owned and
controlled by Natives (as determined under
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 under
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
under 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 1 or more Indian
tribal governments, or by a corporation that is
wholly owned by 1 or more Indian tribal
governments; or
(ii) that is owned in part by 1 or more
Indian tribal governments, or by a corporation
that is wholly owned by 1 or more Indian tribal
governments, if all other owners are either
United States citizens or small business
concerns;
(D) a small business concern--
(i) that is wholly owned by 1 or more Native
Hawaiian organizations or by a corporation that
is wholly owned by 1 or more Native Hawaiian
organizations; or
(ii) that is owned in part by 1 or more
Native Hawaiian Organizations, or by a
corporation that is wholly owned by 1 or more
Native Hawaiian organizations, if all other
owners are either United States citizens or
small business concerns;
(E) 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 1 or more community
development corporations, if all other owners
are either United States citizens or small
business concerns; or
(F) a small business concern that is--
(i) a small agricultural cooperative
organized or incorporated in the United States;
(ii) wholly owned by 1 or more small
agricultural cooperatives organized or
incorporated in the United States; or
(iii) owned in part by 1 or more small
agricultural cooperatives organized or
incorporated in the United States, if all
owners are small business concerns or United
States citizens.
(6) Program.--The term ``program'' means the HUBZone program.
(7) Qualified disaster area.--
(A) In general.--Subject to subparagraph (B), the
term ``qualified disaster area'' means a census tract
or nonmetropolitan county located in an area for which
the President declares a major disaster under section
401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5170) or located in
an area in which a catastrophic incident has occurred
if the census tract or nonmetropolitan county ceased to
be a qualified census tract or qualified
nonmetropolitan county, as applicable, during the
period beginning 5 years before the date on which the
President declares the major disaster or the
catastrophic incident occurs and ending on the date
that is 2 years after that date, except that the census
tract or nonmetropolitan county shall be a qualified
disaster area only--
(i) in the case of a major disaster declared
by the President, during the 5-year period
beginning on the date on which the President
declares the major disaster for the area in
which the census tract or nonmetropolitan
county, as applicable, is located; and
(ii) in the case of a catastrophic incident,
during the 10-year period beginning on the date
on which the catastrophic incident occurs in
the area in which the census tract or
nonmetropolitan county, as applicable, is
located.
(B) Limitation.--A qualified disaster area described
in subparagraph (A) shall be treated as a HUBZone for a
period of not less than 8 years, beginning on the date
on which the Administrator makes a final determination
whether to implement the designations as a qualified
census tract or qualified nonmetropolitan county in
accordance with the results of the decennial census
conducted after the area was initially designated as a
qualified disaster area.
(8) Qualified hubzone small business concern.--The term
``qualified HUBZone small business concern'' means a small
business concern--
(A) that certifies in writing to the Administrator
(or with respect to which the Administrator otherwise
determines, based on information submitted to the
Administrator by the small business concern, or based
on certification procedures established under section
253112 of this title) that--
(i) it is a HUBZone small business concern--
(I) under subparagraph (A), (B), (C),
(D), (E), or (F) of paragraph (5), and
its principal office is located in a
HUBZone and not fewer than 35 percent
of its employees reside in a HUBZone;
(II) under subparagraph (A), (B),
(C), (D), (E), or (F) of paragraph (5),
that its principal office is located
within a base closure area and that not
fewer than 35 percent of its employees
reside in that base closure area or in
another HUBZone; or
(III) under paragraph (5)(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 the HUBZone program reside within
any Indian reservation governed by 1 or
more of the tribal government owners,
or reside within any HUBZone adjoining
any such Indian reservation;
(ii) the small business concern will attempt
to maintain the applicable employment
percentage under clause (i) during the
performance of any contract awarded to the
small business concern on the basis of a
preference provided under section 253103,
253104, or 253106 of this title; and
(iii) with respect to any subcontract entered
into by the small business concern under a
contract awarded to the small business concern
under this chapter, the small business concern
will ensure that the requirements of section
299107 of this title are satisfied; and
(B) with respect to which no certification made or
information provided by the small business concern
under subparagraph (A) has been, in accordance with the
procedures established under section 253108 of this
title--
(i) successfully challenged by an interested
party; or
(i) otherwise determined by the Administrator
to be materially false.
(9) Qualified nonmetropolitan county.--The term ``qualified
nonmetropolitan county'' means a county--
(A) that was not located in a metropolitan
statistical area (as defined in section 143(k)(2)(B) of
the Internal Revenue Code of 1986 (26 U.S.C.
143(k)(2)(B))) at the time of the most recent census
taken for purposes of selecting qualified census tracts
under section 42(d)(5)(B)(ii) of the Internal Revenue
Code of 1986 (26 U.S.C. 42(d)(5)(B)(ii)); and
(B) in which--
(i) the median household income is less than
80 percent of the nonmetropolitan State median
household income, based on the most recent data
available from the Bureau of the Census of the
Department of Commerce;
(ii) the unemployment rate is not less than
140 percent of the average unemployment rate
for the United States or for the State in which
the county is located, whichever is less, based
on the most recent data available from the
Secretary of Labor; or
(iii) there is located a difficult
development area, as designated by the
Secretary of Housing and Urban Development in
accordance with section 42(d)(5)(B)(iii) of the
Internal Revenue Code of 1986 (26 U.S.C.
42(d)(5)(B)(iii)), within Alaska, Hawaii, or
any territory or possession of the United
States outside the 48 contiguous States.
(10) Redesignated area.--
(A) In general.--Subject to subparagraph (B), the
term ``redesignated area'' means--
(i) a census tract that was, but ceases to
be, a qualified census tract; and
(ii) a nonmetropolitan county that was, but
ceases to be, a qualified nonmetropolitan
county.
(B) Limitation.--A census tract or nonmetropolitan
county described in subparagraph (A) shall cease to be
a redesignated area on the later of--
(i) the date on which the Bureau of the
Census publicly releases the 1st results from
the 2010 decennial census; or
(ii) 3 years after the date on which the
census tract or nonmetropolitan county ceases
to be a qualified census tract or qualified
nonmetropolitan county.
Sec. 253102. Establishment of HUBZone program
There is established within SBA a program to be carried out by the
Administrator, to be known as the HUBZone program, to provide for
Federal contracting assistance to qualified HUBZone small business
concerns in accordance with this chapter.
Sec. 253103. Sole source preference
A contracting officer may award a sole source contract under the
program to a qualified HUBZone small business concern if--
(1) the contracting officer determines that the qualified
HUBZone small business concern is a responsible contractor with
respect to performance of the contract opportunity;
(2) 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;
(3) the anticipated award price of the contract (including
options) will not exceed--
(A) $5,000,000, in the case of a contract opportunity
assigned a North American Industry Classification
System code for manufacturing; or
(B) $3,000,000, in the case of any other contract
opportunity; and
(4) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
Sec. 253104. Setaside preference
A contract opportunity may be awarded under the program on the basis
of competition restricted to qualified HUBZone small business concerns
if the contracting officer has a reasonable expectation that--
(1) not fewer than 2 qualified HUBZone small business
concerns will submit offers; and
(2) the award can be made at a fair market price.
Sec. 253105. Appeal of decision not to award contract
Not later than 5 days after the date on which the Administrator is
notified of a decision by a contracting officer of a Federal agency not
to award a contract opportunity under the program to a qualified
HUBZone small business concern, the Administrator may notify the
contracting officer of the intent to appeal the contracting officer's
decision, and within 15 days after that date the Administrator may file
a written request for reconsideration of the contracting officer's
decision with the head of the Federal agency.
Sec. 253106. Price evaluation preference in full and open competition
(a) In General.--Subject to subsection (b), in a 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 to be 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) Agricultural Commodities.--
(1) In general.--In the case of a purchase by the Secretary
of Agriculture of agricultural commodities, the price
evaluation preference shall be--
(A) 10 percent for the portion of a contract to be
awarded that is not greater than 25 percent of the
total volume being procured for each agricultural
commodity in a single invitation;
(B) 5 percent for the portion of a contract to be
awarded that is greater than 25 percent, but not
greater than 40 percent, of the total volume being
procured for each agricultural commodity in a single
invitation; and
(C) zero, for the portion of a contract to be awarded
that is greater than 40 percent of the total volume
being procured for each agricultural commodity in a
single invitation.
(2) Treatment of preference.--A contract awarded to a
qualified HUBZone small business concern under a preference
described in paragraph (1) shall not be counted toward the
fulfillment of any requirement partially set aside for
competition restricted to small business concerns.
(3) International food aid export operations.--The price
evaluation preference for a purchase of an agricultural
commodity by the Secretary of Agriculture for export operations
through an international food aid program administered by the
Farm Service Agency shall be 5 percent on the 1st portion of a
contract to be awarded that is not greater than 20 percent of
the total volume of each agricultural commodity being procured
in a single invitation.
Sec. 253107. Relationship to other contracting preferences
A procurement may not be made from a source on the basis of a
preference under the program if the procurement would otherwise be made
from a different source under--
(1) section 4124 or 4125 of title 18; or
(2) chapter 85 of title 41.
Sec. 253108. Verification of eligibility
(a) In General.--In carrying out this chapter, the Administrator
shall establish procedures relating to--
(1) the filing, investigation, and disposition by the
Administrator of any challenge to the eligibility of a small
business concern to receive assistance under the program
(including a challenge, filed by an interested party, relating
to the veracity of a certification made or information provided
to the Administrator by a small business concern under section
253101(7) of this title); and
(2) verification by the Administrator of the accuracy of any
certification made or information provided to the Administrator
by a small business concern under section 253101(7) of this
title.
(b) Examinations.--The procedures established under subsection (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
section 253101(7) of this title.
(c) Provision of Data.--On the request of the Administrator, the
Secretary of Labor, the Administrator of the Federal Emergency
Management Agency, 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
section.
Sec. 253109. Mentor-protege program
The Administrator may establish a mentor-protege program for HUBZone
small business concerns modeled on the mentor-protege program for small
business concerns participating in the business development program.
Sec. 253110. Wholesalers and retailers
(a) In General.--An otherwise responsible small business concern that
is described in subsection (b) shall not be denied the opportunity to
submit and have considered its offer for a procurement contract that
has as its principal purpose the supply of a product to be let under
this chapter solely because the small business concern is other than
the manufacturer or processor of the product to be supplied under the
contract.
(b) Requirements.--A small business concern referred to in subsection
(a) is a small business concern that--
(1) is primarily engaged in wholesale or retail trade;
(2) is a small business concern under the numerical size
standard for the North American Industry Classification System
code assigned to the contract solicitation on which the offer
is being made;
(3) is a regular dealer (as defined under section 6510 of
title 41) in the product to be offered the Government; and
(4) represents that the small business concern will supply
the product of a domestic small business manufacturer or
processor, unless a waiver of this paragraph is granted--
(A) by the Administrator, after reviewing a
determination by the contracting officer that no small
business manufacturer or processor can reasonably be
expected to offer a product meeting the specifications
(including period for performance) required of an
offeror by the solicitation; or
(B) by the Administrator for a product (or class of
products), after determining that no small business
manufacturer or processor is available to participate
in the Federal procurement market.
(c) Limitation.--This section does not apply to a contract that has
as its principal purpose the acquisition of a service or construction.
Sec. 253111. List of qualified HUBZone small business concerns
The Administrator shall establish and maintain a list of qualified
HUBZone small business concerns, which list, to the extent
practicable--
(1) after the Administrator makes the certification required
by section 253101(7)(A)(i) of this title regarding a qualified
HUBZone small business concern and determines that subparagraph
section 253101(7)(A)(ii) of this title does not apply to that
qualified HUBZone small business concern, shall include the
name, address, and type of business with respect to each such
small business concern;
(2) shall be updated by the Administrator not less than
annually; and
(3) on request, shall be provided to any Federal agency or
other entity.
Sec. 253112. Regulations
The Administrator shall by regulation establish procedures for the
certification of a small business concern as a qualified HUBZone small
business concern.
Sec. 253113. Penalties
In addition to the penalties described in section 105104 of this
title, a small business concern that is determined by the Administrator
to have misrepresented the status of that small business concern as a
HUBZone small business concern for purposes of this section shall be
subject to--
(1) section 1001 of title 18; and
(2) sections 3729 to 3733 of title 31.
Chapter 255--Small Business Concerns Owned and Controlled by Service-
Disabled Veterans
Sec.
255101. Sole source preference.
255102. Setaside preference.
255103. Relationship to other contracting preferences.
255104. Provision of data.
255105. Verification of eligibility.
255106. Mentor-protege program.
255107. Wholesalers and retailers.
255108. Penalties.
Sec. 255101. Sole source preference
A contracting officer may award a sole source contract to any small
business concern owned and controlled by service-disabled veterans if--
(1) the contracting officer determines that the small
business concern owned and controlled by service-disabled
veterans is a responsible contractor with respect to
performance of the contract opportunity;
(2) the contracting officer does not have a reasonable
expectation that 2 or more small business concerns owned and
controlled by service-disabled veterans will submit offers for
the contracting opportunity;
(3) the anticipated award price of the contract (including
options) will not exceed--
(A) $5,000,000, in the case of a contract opportunity
assigned a North American Industry Classification
System code for manufacturing; or
(B) $3,000,000, in the case of any other contract
opportunity; and
(4) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
Sec. 255102. Setaside preference
A contracting officer may award a contract on the basis of
competition restricted to small business concerns owned and controlled
by service-disabled veterans if the contracting officer has a
reasonable expectation that--
(1) not fewer than 2 small business concerns owned and
controlled by service-disabled veterans will submit offers; and
(2) the award can be made at a fair market price.
Sec. 255103. Relationship to other contracting preferences
A procurement may not be made from a source on the basis of a
preference provided under section 255101 or 255102 of this title if the
procurement would otherwise be made from a different source under--
(1) section 4124 or 4125 of title 18; or
(2) chapter 85 of title 41.
Sec. 255104. Provision of data
On the request of the Administrator, the head of any Federal agency
shall promptly provide to the Administrator such information as the
Administrator determines to be necessary to carry out this chapter.
Sec. 255105. Verification of eligibility
(a) In General.--In carrying out this chapter, the Administrator
shall establish procedures relating to--
(1) the filing, investigation, and disposition by the
Administrator of any challenge to the eligibility of a small
business concern to receive assistance under this chapter
(including a challenge, filed by an interested party, relating
to the veracity of a certification made or information provided
to the Administrator by a small business concern); and
(2) verification by the Administrator of the accuracy of any
certification made or information provided to the Administrator
by a small business concern.
(b) Examinations.--The procedures established under subsection (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.
Sec. 255106. Mentor-protege program
The Administrator may establish a mentor-protege program for small
business concerns owned and controlled by service-disabled veterans
modeled on the mentor-protege program for small business concerns
participating in the business development program.
Sec. 255107. Wholesalers and retailers
(a) In General.--An otherwise responsible small business concern that
is described in subsection (b) shall not be denied the opportunity to
submit and have considered its offer for a procurement contract that
has as its principal purpose the supply of a product to be let under
this chapter solely because the small business concern is other than
the manufacturer or processor of the product to be supplied under the
contract.
(b) Requirements.--A small business concern referred to in subsection
(a) is a small business concern that--
(1) is primarily engaged in wholesale or retail trade;
(2) is a small business concern under the numerical size
standard for the North American Industry Classification System
code assigned to the contract solicitation on which the offer
is being made;
(3) is a regular dealer (as defined under section 6510 of
title 41) in the product to be offered the Government; and
(4) represents that the small business concern will supply
the product of a domestic small business manufacturer or
processor, unless a waiver of this paragraph is granted--
(A) by the Administrator, after reviewing a
determination by the contracting officer that no small
business manufacturer or processor can reasonably be
expected to offer a product meeting the specifications
(including period for performance) required of an
offeror by the solicitation; or
(B) by the Administrator for a product (or class of
products), after determining that no small business
manufacturer or processor is available to participate
in the Federal procurement market.
(c) Limitation.--This subsection does not apply to a contract that
has as its principal purpose the acquisition of a service or
construction.
Sec. 255108. Penalties
In addition to the penalties described in section 105104 of this
title, a small business concern that is determined by the Administrator
to have misrepresented the status of the small business concern as a
small business concern owned and controlled by service-disabled
veterans for purposes of this chapter shall be subject to--
(1) section 1001 of title 18; and
(2) sections 3729 to 3733 of title 31.
Chapter 257--Small Business Concerns Owned and Controlled by Women
Sec.
257101. Definition of small business concern owned and controlled by
women.
257102. Restricted competition.
257103. Identification of industries.
257104. Provision of data.
257105. Verification of eligibility.
257106. Sole source contracts for economically disadvantaged small
business concerns owned and controlled by women.
257107. Sole source contracts for small business concerns owned and
controlled by women in substantially underrepresented
industries.
257108. Mentor-protege program.
257109. Wholesalers and retailers.
257110. Penalties.
Sec. 257101. Definition of small business concern owned and controlled
by women
In this chapter, the term ``small business concern owned and
controlled by women'' has the meaning given the term in section 101102
of this title, except that ownership shall be determined without regard
to any community property law.
Sec. 257102. Restricted competition
(a) In General.--A contracting officer may restrict competition for
any contract for the procurement of a good or service by the Federal
Government to small business concerns owned and controlled by women
if--
(1) each of the small business concerns owned and controlled
by women is not less than 51 percent owned by 1 or more women
who are economically disadvantaged (for which purpose ownership
shall be determined without regard to any community property
law);
(2) the contracting officer has a reasonable expectation that
2 or more small business concerns owned and controlled by
economically disadvantaged women will submit offers for the
contract;
(3) the contract is for the procurement of a good or service
with respect to an industry identified by the Administrator
under section 257103 of this title;
(4) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price; and
(5) each of the small business concerns owned and controlled
by women is certified by a Federal agency, a State government,
the Administrator, or a national certifying entity approved by
the Administrator as a small business concern owned and
controlled by women.
(b) Waiver.--The Administrator may waive subsection (a)(1) with
respect to a small business concern owned and controlled by women if
the Administrator determines that the small business concern owned and
controlled by women is in an industry in which small business concerns
owned and controlled by women are substantially underrepresented.
Sec. 257103. Identification of industries
The Administrator shall conduct a study to identify industries in
which small business concerns owned and controlled by women are
underrepresented with respect to Federal agency procurement
contracting.
Sec. 257104. Provision of data
On the request of the Administrator, the head of a Federal agency
shall promptly provide to the Administrator such information as the
Administrator determines to be necessary to carry out this chapter.
Sec. 257105. Verification of eligibility
(a) In General.--In carrying out this chapter, the Administrator
shall establish procedures relating to--
(1) the filing, investigation, and disposition by the
Administrator of any challenge to the eligibility of a small
business concern to receive assistance under this chapter
(including a challenge, filed by an interested party, relating
to the veracity of a certification made or information provided
to the Administrator by a small business concern under section
257102(a)(5) of this title); and
(2) verification by the Administrator of the accuracy of any
certification made or information provided to the Administrator
by a small business concern under section 257102(a)(5) of this
title.
(b) Examinations.--The procedures established under subsection (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
section 257102(a)(5) of this title.
Sec. 257106. Sole source contracts for economically disadvantaged small
business concerns owned and controlled by women
A contracting officer may award a sole source contract to a small
business concern owned and controlled by women that is certified under
section 257102(a)(5) of this title if--
(1)(A) the small business concern owned and controlled by
women is determined to be a responsible contractor with respect
to performance of the contract opportunity; and
(B) the contracting officer does not have a reasonable
expectation that more than 1 small business concern owned and
controlled by women described in section 257102(a)(1) of this
title will submit an offer;
(2) the anticipated award price of the contract (including
options) will not exceed--
(A) $6,500,000, in the case of a contract opportunity
assigned a North American Industry Classification
System code for manufacturing; or
(B) $4,000,000, in the case of any other contract
opportunity; and
(3) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
Sec. 257107. Sole source contracts for small business concerns owned
and controlled by women in substantially
underrepresented industries
A contracting officer may award a sole source contract to a small
business concern owned and controlled by women that is certified under
section 257102(a)(5) of this title if--
(1) the small business concern owned and controlled by women
is in an industry in which small business concerns owned and
controlled by women are substantially underrepresented (as
determined by the Administrator under section 257102(b) of this
title);
(2)(A) the small business concern owned and controlled by
women is determined to be a responsible contractor with respect
to performance of the contract opportunity; and
(B) the contracting officer does not have a reasonable
expectation that more than 1 small business concern owned and
controlled by women that has received a waiver under section
257102(b) of this title will submit an offer;
(3) the anticipated award price of the contract (including
options) will not exceed--
(A) $6,500,000, in the case of a contract opportunity
assigned a North American Industry Classification
System code for manufacturing; or
(B) $4,000,000, in the case of any other contract
opportunity; and
(4) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
Sec. 257108. Mentor-protege program
The Administrator may establish a mentor-protege program for small
business concerns owned and controlled by women modeled on the mentor-
protege program for small business concerns participating in the
business development program.
Sec. 257109. Wholesalers and retailers
(a) In General.--An otherwise responsible small business concern that
is described in subsection (b) shall not be denied the opportunity to
submit and have considered its offer for a procurement contract that
has as its principal purpose the supply of a product to be let under
this chapter solely because the small business concern is other than
the manufacturer or processor of the product to be supplied under the
contract.
(b) Requirements.--A small business concern referred to in subsection
(a) is a small business concern that--
(1) is primarily engaged in wholesale or retail trade;
(2) is a small business concern under the numerical size
standard for the North American Industry Classification System
code assigned to the contract solicitation on which the offer
is being made;
(3) is a regular dealer (as defined under section 6510 of
title 41) in the product to be offered the Government; and
(4) represents that the small business concern will supply
the product of a domestic small business manufacturer or
processor, unless a waiver of this paragraph is granted--
(A) by the Administrator, after reviewing a
determination by the contracting officer that no small
business manufacturer or processor can reasonably be
expected to offer a product meeting the specifications
(including period for performance) required of an
offeror by the solicitation; or
(B) by the Administrator for a product (or class of
products), after determining that no small business
manufacturer or processor is available to participate
in the Federal procurement market.
(c) Limitation.--This section does not apply to a contract that has
as its principal purpose the acquisition of a service or construction.
Sec. 257110. Penalties
In addition to the penalties described in section 105102 of this
title, a small business concern that is determined by the Administrator
to have misrepresented the status of the small business concern as a
small business concern owned and controlled by women for purposes of
this chapter shall be subject to--
(1) sections 1001 and 2731 of title 18; and
(2) sections 3729 through 3733 of title 31.
Division I--Research and Development
Chapter 261--General Provisions
Sec.
261101. Definitions.
261102. Assistance to small business concerns.
261103. Federal agency cooperation.
261104. Joint research and development programs.
Sec. 261101. Definitions
In this division:
(1) Commercial application.--The term ``commercial
application'' includes testing and evaluation of products,
services, or technologies for use in technical or weapons
systems.
(2) Commercialization.--The term ``commercialization''
means--
(A) the process of developing a product, process,
technology, or service; and
(B) the production and delivery (whether by the
originating party or by others) of a product, process,
technology, or service for sale to or use by the
Federal Government or a commercial market.
(3) Cooperative research and development.--The term
``cooperative research and development'' means research or
research and development conducted jointly by a small business
concern and a research institution in which not less than 40
percent of the work is performed by the small business concern
and not less than 30 percent of the work is performed by the
research institution.
(4) Extramural budget.--
(A) In general.--The term ``extramural budget'', in
reference to the extramural budget of a Federal agency,
means the sum of the total obligations of the Federal
agency for research and research and development
activities minus amounts obligated for research or
research and development by employees of the Federal
agency in or through Government-owned, Government-
operated facilities.
(B) Applicability to department of energy.--As
applied with respect to the Department of Energy, the
term ``extramural budget'' does not include amounts
obligated for atomic energy defense programs solely for
weapons activities or for naval reactor programs.
(C) Applicability to agency for international
development.--As applied to the Agency for
International Development, the term ``extramural
budget'' does not include amounts obligated solely for
general institutional support of international research
centers or for grants to foreign countries.
(5) Federal agency.--
(A) In general.--The term ``Federal agency'' means--
(i) an executive agency (as defined in
section 105 of title 5); or
(ii) a military department.
(B) Exclusion.--The term ``Federal agency'' does not
include an agency within the Intelligence Community (as
defined in section 3.5(h) of Executive Order 12333 (50
U.S.C. 3001 note) (or any successor Executive order)).
(6) Federally funded research and development center.--The
term ``Federally funded research and development center'' means
a federally funded research and development center identified
by the National Scientific Foundation in accordance with the
Governmentwide Federal Acquisition Regulation (or any successor
regulation).
(7) Funding agreement.--The term ``funding agreement'' means
a contract, grant, or cooperative agreement entered into
between a Federal agency and a small business concern for the
performance of experimental, developmental, or research work
funded in whole or in part by the Federal Government.
(8) Phase I.--The term ``phase I''--
(A) with respect to an SBIR program, means the phase
described in paragraph (17)(A); and
(B) with respect to an STTR program, means the phase
described in paragraph (18)(A).
(9) Phase II.--The term ``phase II''--
(A) with respect to an SBIR program, means the phase
described in paragraph (17)(B); and
(B) with respect to an STTR program, means the phase
described in paragraph (18)(B).
(10) Phase III.--The term ``phase III''--
(A) with respect to an SBIR program, means the phase
described in paragraph (17)(C); and
(B) with respect to an STTR program, means the phase
described in paragraph (18)(C).
(11) Phase III agreement.--The term ``phase III agreement''
means a follow-on, non-SBIR program-funded contract or non-STTR
program-funded contract described in paragraph (17)(C) or
(18)(C).
(12) Research institution.--
(A) In general.--The term ``research institution''
means a nonprofit institution (as defined in section 4
of the Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3703)).
(B) Inclusion.--The term ``research institution''
includes a federally funded research and development
center.
(13) Research or research and development.--The term
``research or research and development'' means an activity that
is--
(A) a systematic, intensive study directed toward
greater knowledge or understanding of the subject
studied;
(B) a systematic study directed specifically toward
applying new knowledge to meet a recognized need; or
(C) a systematic application of knowledge toward the
production of useful materials, devices, and systems or
methods, including design, development, and improvement
of prototypes and new processes to meet specific
requirements.
(14) SBIR agency.--The term ``SBIR agency'' means a Federal
agency that is required by section 263101 of this title to have
an SBIR program.
(15) SBIR participating agency.--The term ``SBIR
participating agency'' means--
(A) an SBIR agency; and
(B) any other Federal agency that participates in the
SBIR program.
(16) SBIR program.--The term ``SBIR program'' means a small
business innovation research program.
(17) Small business innovation research program.--The term
``small business innovation research program'' means a program
under which a portion of a Federal agency's research or
research and development effort is reserved for award to small
business concerns through a uniform process having--
(A) a 1st phase for determining, insofar as possible,
the scientific and technical merit and feasibility of
ideas that appear to have commercial potential, as
described in subparagraph (B), submitted pursuant to
SBIR program solicitations;
(B) a 2d phase, to further develop proposals that
meet particular program needs--
(i) in which awards (including awards for
testing and evaluation of products, services,
or technologies for use in technical or weapons
systems) shall be made based on the scientific
and technical merit and feasibility of the
proposals, as evidenced by the 1st phase,
considering, among other things, the proposal's
commercial potential, as evidenced by--
(I) the small business concern's
record of successfully commercializing
SBIR program research or other
research;
(II) the existence of phase II
funding commitments from private sector
or non-SBIR program funding sources;
(III) the existence of phase III
follow-on commitments for the subject
of the research; and
(IV) the presence of other indicators
of the commercial potential of the
idea; and
(ii) that does not include any invitation,
prescreening, or preselection process for
eligibility; and
(C) where appropriate, a 3d phase for work that
derives from, extends, or completes efforts made under
prior funding agreements under the SBIR program--
(i) in which commercial applications of SBIR
program-funded research or research and
development are funded--
(I) by non-Federal sources of
capital; or
(II) for products or services
intended for use by the Federal
Government, by follow-on non-SBIR
program Federal funding awards; or
(ii) for which awards from non-SBIR program
Federal funding sources are used for the
continuation of research or research and
development that has been competitively
selected using peer review or merit-based
selection procedures.
(18) Small business technology transfer program.--The term
``small business technology transfer program'' means a program
under which a portion of a Federal agency's extramural research
or research and development effort is reserved for award to
small business concerns for cooperative research and
development through a uniform process having--
(A) a 1st phase, to determine, to the extent
possible, the scientific, technical, and commercial
merit and feasibility of ideas submitted pursuant to
STTR program solicitations;
(B) a 2d phase, to further develop proposed ideas to
meet particular program needs--
(i) in which awards (including awards for
testing and evaluation of products, services,
or technologies for use in technical or weapons
systems) shall be made based on the scientific,
technical, and commercial merit and feasibility
of the idea, as evidenced by the 1st phase and
by other relevant information; and
(ii) that does not include any invitation,
prescreening, or preselection process for
eligibility; and
(C) where appropriate, a 3d phase for work that
derives from, extends, or completes efforts made under
prior funding agreements under the STTR program--
(i) in which commercial applications of STTR
program-funded research or research and
development are funded--
(I) by non-Federal sources of
capital; or
(II) for products or services
intended for use by the Federal
Government, by follow-on non-STTR
program Federal funding awards; and
(ii) for which awards from non-STTR program
Federal funding sources are used for the
continuation of research or research and
development that has been competitively
selected using peer review or scientific review
criteria.
(19) STTR agency.--The term ``STTR agency'' means a Federal
agency that is required by section 263201 of this title to have
an STTR program.
(20) STTR participating agency.--The term ``STTR
participating agency'' means--
(A) an STTR agency; and
(B) any other Federal agency that participates in the
STTR program.
(21) STTR program.--The term ``STTR program'' means a small
business technology transfer program.
Sec. 261102. Assistance to small business concerns
The Administrator shall--
(1) assist small business concerns in obtaining Government
contracts for research and development;
(2) assist small business concerns in obtaining the benefits
of research and development performed under Government
contracts or at Government expense;
(3) provide technical assistance to small business concerns
to accomplish the purposes of this division;
(4) develop and maintain a source file and an information
program to assure each qualified and interested small business
concern the opportunity to participate in Federal agency SBIR
programs and STTR programs;
(5) coordinate with participating Federal agencies a schedule
for release of SBIR program and STTR program solicitations, and
prepare a master release schedule so as to maximize the
opportunity of small business concerns to respond to
solicitations;
(6) independently survey and monitor the operation of SBIR
programs and STTR programs within participating Federal
agencies;
(7) provide for and fully implement the tenets of Executive
Order 13329 (Encouraging Innovation in Manufacturing); and
(8) coordinate the implementation of electronic databases at
each of the Federal agencies participating in the SBIR program
or STTR program, including the technical ability of the
participating agencies to share data electronically.
Sec. 261103. Federal agency cooperation
The Administrator may consult and cooperate with, and make studies
and recommendations to, all Federal agencies and the Government
Accountability Office, and a Federal agency or the Government
Accountability Office shall cooperate with the Administrator in order
to carry out and to accomplish the purposes of this division.
Sec. 261104. Joint research and development programs
(a) In General.--The Administrator may consult with representatives
of small business concerns with a view to assisting and encouraging
small business concerns in undertaking joint programs for research and
development carried out through such corporate or other mechanism as
may be most appropriate for the purpose.
(b) Purposes.--A joint program under subsection (a) may, among other
things, include the purposes of--
(1) constructing, acquiring, or establishing a laboratory or
other facility for the conduct of research;
(2) undertaking and utilizing applied research;
(3) collecting research information related to a particular
industry and disseminating the information to participating
members;
(4) conducting applied research on a protected, proprietary,
and contractual basis with member or nonmember concerns,
Federal agencies, the Government Accountability Office, and
others;
(5) prosecuting applications for patents and rendering patent
services for participating members; and
(6) negotiating and granting licenses under patents held
under the joint program and establishing corporations designed
to exploit particular patents obtained by the corporations.
(c) Approval of Agreements.--After consultation with the Attorney
General and the Chairman of the Federal Trade Commission, and with the
prior written approval of the Attorney General, the Administrator may
approve an agreement between small business concerns providing for a
joint program of research and development if the Administrator
determines that the joint program proposed will maintain and strengthen
the free enterprise system and the economy of the Nation.
(d) Withdrawal of Approval.--The Administrator or the Attorney
General may at any time withdraw approval of the agreement and the
joint program of research and development covered by the agreement if
the Administrator or Attorney General determines that the agreement or
the joint program is no longer in the best interests of the competitive
free enterprise system and the economy of the Nation.
(e) Publication in Federal Register.--A copy of the following shall
be published in the Federal Register:
(1) An approval under subsection (c) of an agreement between
small business concerns providing for a joint program of
research and development and an accompanying determination by
the Administrator that the joint program proposed will maintain
and strengthen the free enterprise system and the economy of
the Nation.
(2) A withdrawal of approval of a joint agreement and the
joint program of research and development covered by the
agreement and an accompanying determination by the
Administrator or Attorney General that the agreement or the
joint program is no longer in the best interests of the
competitive free enterprise system and the economy of the
Nation.
(3) A modification of an approval described in paragraph (1).
(f) Nondelegability.--The authority of the Administrator under this
section shall not be delegated.
(g) No Violation of Antitrust Laws or Federal Trade Commission Act.--
(1) In general.--Subject to paragraph (2), no act or omission
to act pursuant to and within the scope of a joint program for
research and development under an agreement approved by the
Administrator under this section shall be within the
prohibitions of the antitrust laws or the Federal Trade
Commission Act (15 U.S.C. 41 et seq.).
(2) Withdrawal of approval.--On publication in the Federal
Register of the notice of withdrawal of approval of an
agreement granted under this section, by the Administrator or
by the Attorney General, this section shall not apply to any
subsequent act or omission to act by reason of the agreement or
the approval.
Chapter 263--SBIR Programs and STTR Programs
Subchapter I--SBIR Programs
Sec.
263101. Required expenditure amounts.
263102. Administration by Federal agencies.
263103. Funding agreement goals.
263104. Policy directives.
263105. Coordination of technology development programs.
263106. Purchase of American-made equipment and products.
263107. Use of Department of Agriculture extramural budget funds.
263108. Phase flexibility.
263109. Participation of small business concerns that are majority-
owned by venture capital operating companies, hedge funds, or
private equity firms in the SBIR program.
263110. Assistance for administrative, oversight, and contract
processing costs.
263111. Reports by Federal agencies.
263112. Termination.
Subchapter II--STTR Programs
263201. Required expenditure amounts.
263202. Administration by Federal agencies.
263203. Policy directive.
263204. Model agreement for intellectual property rights.
263205. Phase 0 proof of concept partnership pilot program.
Subchapter III--Provisions Relating to Both SBIR Programs and STTR
Programs
263301. Database.
263302. Phase III agreements.
263303. Inclusion of SBIR program and STTR program information in
strategic plans.
263304. Reduction of paperwork and compliance burden.
263305. FAST program.
263306. Innovation in energy efficiency.
263307. Competitive selection procedures.
263308. Award amounts in excess of guidelines.
263309. Subsequent phase II awards.
263310. Collaboration with Federal laboratories and research and
development centers.
263311. Sequential SBIR awards and STTR awards for continued work on a
project
263312. Prevention of duplicative awards.
263313. Discretionary technical assistance.
263314. Commercialization readiness programs.
263315. Timing of release of funding.
263316. Reporting on timing of final decisions on proposals and
releases of funding.
263317. Release of contact information to economic development
organizations.
263318. Prevention of fraud, waste, and abuse.
263319. Competitive selection procedures.
263320. Limitation on pilot programs.
263321. Minimum standards for participation.
263322. Publication of information relating to notice of and
application for SBIR awards and STTR awards.
Subchapter I--SBIR Programs
Sec. 263101. Required expenditure amounts
(a) SBIR Program Budget.--Except as provided in subsection (b)(2), a
Federal agency that has an extramural budget for research or research
and development in excess of $100,000,000 for any fiscal year shall
expend with small business concerns, specifically in connection with an
SBIR program that meets the requirements of this division (including
policy directives under section 263104 of this title)--
(1) not less than 2.7 percent of the extramural budget in
fiscal year 2013;
(2) not less than 2.8 percent of the extramural budget in
fiscal year 2014;
(3) not less than 2.9 percent of the extramural budget in
fiscal year 2015;
(4) not less than 3.0 percent of the extramural budget in
fiscal year 2016; and
(5) not less than 3.2 percent of the extramural budget in
fiscal year 2017 and each fiscal year thereafter.
(b) Limitations.--An SBIR agency shall not--
(1) make available for the purpose of meeting the
requirements of subsection (a) an amount of its extramural
budget for basic research that exceeds the percentage specified
in subsection (a); or
(2) after September 30, 2015, use any of its SBIR program
budget established under subsection (a) for the purpose of
funding administrative costs of the program, including costs
associated with salaries and expenses.
(c) Exclusion of Certain Funding Agreements.--A funding agreement
with a small business concern for research or research and development
that results from a competitive or single source selection other than
an SBIR program shall not be considered to meet any portion of the
percentage requirement of subsection (a).
(d) Rule of construction.--Nothing in this section shall be construed
to prohibit a Federal agency from expending with small business
concerns an amount of the extramural budget for research or research
and development of the agency that exceeds the amount required under
subsection (a).
Sec. 263102. Administration by Federal agencies
(a) In General.--An SBIR agency shall, in accordance with this
division (including policy directives under section 263104 of this
title)--
(1) unilaterally determine categories of projects to be in
its SBIR program;
(2) issue SBIR program solicitations in accordance with a
schedule determined cooperatively with the Administrator;
(3) unilaterally determine research topics within the SBIR
agency's SBIR program solicitations, giving special
consideration to broad research topics and to topics that
further 1 or more critical technologies, as identified by--
(A) the National Critical Technologies Panel in the
reports required under section 603 of the National
Science and Technology Policy, Organization, and
Priorities Act of 1976 (42 U.S.C. 6683) (as in effect
before January 1, 2001); or
(B) the Secretary of Defense, in the reports required
under section 2522 of title 10 (as in effect before
February 10, 1996);
(4)(A) unilaterally receive and evaluate proposals resulting
from SBIR program proposals; and
(B) make a final decision on each proposal submitted under
the SBIR program--
(i)(I) in the case of the National Institutes
of Health or the National Science Foundation,
not later than 1 year after the date on which
the applicable solicitation closes; or
(II) in the case of SBIR participating
agency, not later than 90 days after the date
on which the applicable solicitation closes,;
or
(ii) if the Administrator authorizes an
extension with respect to a solicitation, not
later than 90 days after the date that would
otherwise be applicable to the agency under
clause (i);
(5) subject to section 263111(b) of this title--
(A) unilaterally select awardees for its SBIR program
funding agreements; and
(B) inform each awardee under a funding agreement, to
the extent possible, of the expenses of the awardee
that will be allowable under the funding agreement;
(6) administer its own SBIR program funding agreements (or
delegate such administration to another Federal agency);
(7)(A) make payments to recipients of SBIR program funding
agreements on the basis of progress toward or completion of the
funding agreement requirements; and
(B) in all cases, make payment to recipients under such
agreements in full, subject to audit, on or before the last day
of the 12-month period beginning on the date of completion of
the funding agreement requirements;
(8) collect annually, and maintain in a common format in
accordance with the simplified reporting requirements under
section 263304 of this title, such information from awardees as
is necessary to assess the SBIR program, including information
necessary to maintain the database under section 263301 of this
title, including--
(A) whether an awardee--
(i) has venture capital, hedge fund, or
private equity firm investment or is majority-
owned by multiple venture capital operating
companies, hedge funds, or private equity firms
and, if so--
(I) the amount of venture capital,
hedge fund, or private equity firm
investment that the awardee has
received as of the date of the award;
and
(II) the amount of additional
capital that the awardee has invested
in the SBIR technology;
(ii) has an investor that--
(I) is an individual who is not a
citizen of the United States or a
lawful permanent resident of the United
States and, if so, the name of any such
individual; or
(II) is a person that is not an
individual and is not organized under
the laws of a State or the United
States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a
principal investor;
(iv) is owned by a socially or economically
disadvantaged individual or has a socially
disadvantaged individual or economically
disadvantaged individual as a principal
investor;
(v) is a faculty member or a student at an
institution of higher education (as defined in
section 101 of the Higher Education Act of 1965
(20 U.S.C. 1001); or
(vi) is located in a State described in
section 263105(c) of this title;
(B) a justification statement from the agency, if an
awardee receives an award in an amount that is more
than the award guidelines under this division; and
(C) data with respect to the FAST program;
(9)(A) include a section on its SBIR program in its annual
performance plan required by subsections (a) and (b) of section
1115 of title 31; and
(B) submit that section to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Science
and Committee on Small Business of the House of
Representatives;
(10) provide for and fully implement the tenets of Executive
Order 13329 (Encouraging Innovation in Manufacturing); and
(11) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative
tribunal concerning the SBIR program of the SBIR agency.
(b) Research and Development Focus.--
(1) Revision and update of criteria and procedures of
identification.--In carrying out subsection (a), the Secretary
of Defense shall, not less often than once every 4 years,
revise and update the criteria and procedures used to identify
areas of the research and development efforts of the Department
of Defense that are suitable for the provision of funds under
the SBIR program and the STTR program of the Department of
Defense.
(2) Use of plans.--The criteria and procedures described in
paragraph (1) shall be developed through the use of the most
current versions of the following plans:
(A) The Joint Warfighting Science and Technology Plan
required under section 270 of the National Defense
Authorization Act for Fiscal Year 1997 (10 U.S.C. 2501
note; Public Law 104-201).
(B) The Defense Technology Area Plan of the
Department of Defense.
(C) The Basic Research Plan of the Department of
Defense.
(3) Input in identification of areas of effort.--The criteria
and procedures described in paragraph (1) shall include input
in the identification of areas of research and development
efforts described in that paragraph from Department of Defense
program managers and program executive officers.
Sec. 263103. Funding agreement goals
(a) In General.--A Federal agency that has an extramural budget for
research or research and development in excess of $20,000,000 for any
fiscal year shall establish goals specifically for funding agreements
for research or research and development to small business concerns.
(b) No Backsliding.--No goal established by a Federal agency under
subsection (a) shall be less than the percentage of the Federal
agency's research or research and development budget expended under
funding agreements with small business concerns in the immediately
preceding fiscal year.
Sec. 263104. Policy directives
(a) In General.--The Administrator, after consultation with the
Administrator for Federal Procurement Policy, the Director of the
Office of Science and Technology Policy, and the Intergovernmental
Affairs Division of the Office of Management and Budget, shall issue
policy directives for the general conduct of the SBIR programs within
the Federal Government.
(b) Matters To Be Provided For.--Policy directives under subsection
(a) shall provide for--
(1) simplified, standardized, and timely SBIR program
solicitations;
(2) a simplified, standardized funding process that provides
for--
(A) the timely receipt and review of proposals;
(B) outside peer review for at least phase two
proposals, if appropriate;
(C) protection of proprietary information provided in
proposals;
(D) selection of awardees;
(E) retention by a small business concern of the
rights to data generated by the small business concern
in the performance of an SBIR award for a period of not
less than 4 years (without regard to whether the small
business concern continues to qualify as a small
business concern for all of that period);
(F) transfer of title to property provided by a
Federal agency to a small business concern if such a
transfer would be more cost effective than recovery of
the property by the Federal agency;
(G) cost sharing; and
(H) cost principles and payment schedules;
(3) exemptions from the policy directives under paragraph (2)
if national security or intelligence functions clearly would be
jeopardized;
(4) minimizing the regulatory burden associated with
participation in an SBIR program for a small business concern
so as to stimulate the cost-effective conduct of Federal
research and development and the likelihood of
commercialization of the results of research and development
conducted under the SBIR program;
(5) the submission by a Federal agency to the Administrator
and the Office of Science and Technology Policy of a
simplified, standardized, and timely annual report on its SBIR
program;
(6) standardized and orderly withdrawal from SBIR program
participation by a Federal agency;
(7) the voluntary participation in an SBIR program by a
Federal agency not required by section 263101 of this title to
have an SBIR program;
(8) continued use by a small business concern participating
in phase III of an SBIR program, as a directed bailment, of any
property transferred by a Federal agency to the small business
concern in phase II of an SBIR program for a period of not less
than 2 years, beginning on the initial date of the small
business concern's participation in phase III of an SBIR
program;
(9) procedures to ensure, to the extent practicable, that a
Federal agency that intends to pursue research, development, or
production of a technology developed by a small business
concern under an SBIR program enters into a follow-on, non-SBIR
program funding agreement with the small business concern for
the research, development, or production;
(10) thresholds in the amounts of funds that a Federal agency
may award of $150,000 (which amount the Administrator shall
adjust annually for inflation) in phase I of an SBIR program
and $1,000,000 in phase II of an SBIR program (which amount the
Administrator shall adjust annually for inflation);
(11) a process for notifying SBIR agencies and potential SBIR
program participants of the critical technologies, as
identified--
(A) by the National Critical Technologies Panel in
accordance with section 603 of the National Science and
Technology Policy, Organization, and Priorities Act of
1976 (42 U.S.C. 6683) (as in effect before January 1,
2001); or
(B) by the Secretary of Defense in accordance with
section 2522 of title 10 (as in effect before February
10, 1996);
(12)(A) enhanced outreach efforts to increase the
participation of small business concerns owned and controlled
by socially and economically disadvantaged individuals and the
participation of small business concerns owned and controlled
by women in technological innovation and in SBIR programs,
including phase III of SBIR programs; and
(B) the collection of data to document that participation;
(13) technical and programmatic guidance to encourage Federal
agencies to develop gap-funding programs to address the delay
between an award for phase I of an SBIR program and the
application for and extension of an award for phase II of the
SBIR program;
(14) procedures to ensure that a small business concern that
submits a proposal for a funding agreement for phase I of an
SBIR program and that has received more than 15 phase II SBIR
awards during the preceding 5 fiscal years is able to
demonstrate the extent to which the small business concern was
able to secure phase III funding to develop concepts resulting
from previous phase II SBIR awards;
(15) the requirement of a succinct commercialization plan
with each application for a phase II SBIR award that is moving
toward commercialization;
(16) a requirement that a Federal agency report to the
Administrator, not less frequently than annually, all instances
in which the Federal agency pursued research, development, or
production of a technology developed by a small business
concern using an award made under the SBIR program of the
Federal agency and determined that it was not practicable to
enter into a follow-on non-SBIR program funding agreement with
the small business concern; and
(17) implementation of section 263304 of this title,
including establishing standardized procedures for the
provision of information under section 263301(c) of this title.
(c) Phased Withdrawal From SBIR Program.--At the discretion of the
Administrator, the policy directive under subsection (b)(6) may require
a phased withdrawal over a period of time sufficient in duration to
minimize any adverse impact on small business concerns.
(d) Rights to Data.--The rights provided for under subsection
(b)(1)(E) shall apply to all Federal funding awards under this
division, including phase I, phase II, and phase III awards.
(e) Reports on Impracticability of Follow-on Agreements.--A report
under subsection (b)(16) shall include, at a minimum--
(1) the reasons why the follow-on funding agreement with the
small business concern was not practicable;
(2) the identity of the entity with which the Federal agency
contracted to perform the research, development, or production;
and
(3) a description of the type of funding agreement under
which the research, development, or production was obtained.
Sec. 263105. Coordination of technology development programs
(a) Definition of Technology Development Program.--In this section,
the term ``technology development program'' means--
(1) the Experimental Program to Stimulate Competitive
Research of the National Science Foundation, as established
under section 113 of the National Science Foundation
Authorization Act of 1988 (42 U.S.C. 1862g);
(2) the Defense Experimental Program to Stimulate Competitive
Research of the Department of Defense;
(3) the Experimental Program to Stimulate Competitive
Research of the Department of Energy;
(4) the Experimental Program to Stimulate Competitive
Research of the Environmental Protection Agency;
(5) the Experimental Program to Stimulate Competitive
Research of the National Aeronautics and Space Administration;
(6) the Institutional Development Award Program of the
National Institutes of Health; and
(7) the National Research Initiative Competitive Grants
Program of the Department of Agriculture.
(b) Coordination Requirements.--An SBIR agency that establishes a
technology development program may, in each fiscal year, review for
funding under the technology development program--
(1) a proposal to provide outreach and assistance to 1 or
more small business concerns interested in participating in the
Federal agency's SBIR program (including a proposal to make a
grant or loan to a business concern to pay a portion or all of
the cost of developing an SBIR program proposal) from an
entity, organization, or individual located in--
(A) a State that is eligible to participate in the
technology development program; or
(B) a State described in subsection (c); or
(2) a proposal for phase I of the SBIR program (if the
proposal, though meritorious, is not funded through the SBIR
program for that fiscal year due to funding restraints) from a
small business concern located in--
(A) a State that is eligible to participate in the
technology development program; or
(B) a State described in subsection (c).
(c) Additionally Eligible State.--A State referred to in paragraph
(1)(B) or (2)(B) of subsection (b) is a State in which the total value
of contracts awarded to small business concerns under all SBIR programs
is less than the total value of contracts awarded to small business
concerns in a majority of other States, as determined by the
Administrator in even-numbered fiscal years, based on the most recent
statistics compiled by the Administrator.
(d) Coordination of the SBIR Program and the Experimental Program to
Stimulate Competitive Research.--The head of a Federal agency that
participates in the SBIR program and the Experimental Program to
Stimulate Competitive Research or the Institutional Development Award
Program shall coordinate, to the extent possible, the initiatives of
the agency with respect to those programs.
Sec. 263106. Purchase of American-made equipment and products
(a) Purchase of American-Made Equipment and Products.--It is the
sense of Congress that an entity that is awarded a funding agreement
under the SBIR program of a Federal agency should, when purchasing any
equipment or a product with funds provided through the funding
agreement, purchase only American-made equipment and products, to the
extent possible in keeping with the overall purposes of the SBIR
program.
(b) Notice to SBIR awardees.--A Federal agency that awards a funding
agreement under an SBIR program shall provide to each recipient of such
an award a notice describing the sense of the Congress stated in
subsection (a).
Sec. 263107. Use of Department of Agriculture extramural budget funds
All funds appropriated that are determined to be part of the
extramural budget of the Department of Agriculture for any fiscal year
for purposes of meeting the requirements of this division shall be
available for funding agreements with small business concerns for any
purpose in furtherance of the SBIR program of the Department of
Agriculture. Such funds may be transferred for that purpose from 1
appropriation account to another or to a single account.
Sec. 263108. Phase flexibility
During fiscal years 2012 through 2017, the National Institutes of
Health, the Department of Defense, and the Department of Education may
each provide to a small business concern an award under phase II of the
SBIR program with respect to a project, without regard to whether the
small business concern was provided an award under phase I of an SBIR
program with respect to the project, if the head of the applicable
agency determines that the small business concern has completed the
determinations described in section 261101(17)(A) of this title with
respect to the project despite not having been provided a phase I
award.
Sec. 263109. Participation of small business concerns that are
majority-owned by venture capital operating
companies, hedge funds, or private equity firms in
the SBIR program
(a) In General.--On providing a written determination described in
subsection (b) to the Administrator, the Committee on Small Business
and Entrepreneurship of the Senate, and the Committee on Small Business
and Committee on Science, Space, and Technology of the House of
Representatives, not later than 30 days before the date on which any
such award is made--
(1) the Director of the National Institutes of Health, the
Secretary of Energy, and the Director of the National Science
Foundation may award not more than 25 percent of the funds
allocated for the SBIR program of the applicable Federal agency
to small business concerns that are majority-owned by multiple
venture capital operating companies, hedge funds, or private
equity firms through competitive, merit-based procedures that
are open to all eligible small business concerns; and
(2) the head of an SBIR participating agency other than a
Federal agency described in paragraph (1) may award not more
than 15 percent of the funds allocated for the SBIR program of
the Federal agency to small business concerns that are
majority-owned by multiple venture capital operating companies,
hedge funds, or private equity firms through competitive,
merit-based procedures that are open to all eligible small
business concerns.
(b) Determination.--A written determination described in this
subsection is a written determination by the head of a Federal agency
that explains how the use of the authority under subsection (a) will--
(1) induce additional venture capital, hedge fund, or private
equity firm funding of small business innovations;
(2) substantially contribute to the mission of the Federal
agency;
(3) demonstrate a need for public research; and
(4) otherwise fulfill the capital needs of small business
concerns for additional financing for SBIR projects.
(c) Registration.--A small business concern that is majority-owned by
multiple venture capital operating companies, hedge funds, or private
equity firms and qualified for participation in the program authorized
under subsection (a) shall--
(1) register with the Administrator on the date on which the
small business concern submits an application for an award
under the SBIR program; and
(2) indicate in any SBIR proposal that the small business
concern is registered under paragraph (1) as being majority-
owned by multiple venture capital operating companies, hedge
funds, or private equity firms.
(d) Compliance.--The head of a Federal agency that makes an award
under this section during a fiscal year shall collect and submit to the
Administrator data relating to the number and dollar amount of phase I
awards, phase II awards, and any other category of awards by the
Federal agency under the SBIR program during that fiscal year.
(e) Enforcement.--If a Federal agency awards more than the percentage
of the funds allocated for the SBIR program of the Federal agency
authorized under subsection (a) for a purpose described in that
subsection, the head of the Federal agency shall transfer an amount
equal to the amount awarded in excess of the amount authorized under
that subsection to the funds for general SBIR programs from the non-
SBIR and non-STTR research and development funds of the Federal agency
not later than 180 days after the date on which the Federal agency made
the award that caused the total awarded under that subsection to be
more than the amount authorized under that subsection for a purpose
described in that subsection.
(f) Final Decisions on Applications Under the SBIR Program.--
(1) Definition of covered small business concern.--In this
subsection, the term ``covered small business concern'' means a
small business concern that--
(A) was not majority-owned by multiple venture
capital operating companies, hedge funds, or private
equity firms on the date on which the small business
concern submitted an application in response to a
solicitation under an SBIR program; and
(B) on the date of the award under the SBIR program,
is majority-owned by multiple venture capital operating
companies, hedge funds, or private equity firms.
(2) In general.--If a Federal agency does not make an award
under a solicitation under an SBIR program before the date that
is 9 months after the date on which the period for submitting
applications under the solicitation ends--
(A) a covered small business concern is eligible to
receive the award, without regard to whether the
covered small business concern meets the requirements
for receiving an award under the SBIR program for a
small business concern that is majority-owned by
multiple venture capital operating companies, hedge
funds, or private equity firms, if the covered small
business concern meets all other requirements for such
an award; and
(B) the head of the Federal agency shall transfer an
amount equal to any amount awarded to a covered small
business concern under the solicitation to the funds
for general SBIR programs from the non-SBIR and non-
STTR research and development funds of the Federal
agency, not later than 90 days after the date on which
the Federal agency makes the award.
(g) Evaluation Criteria.--A Federal agency shall not use investment
of venture capital or investment from hedge funds or private equity
firms as a criterion for the award of contracts under the SBIR program
or STTR program.
(h) Assistance in determining affiliation
(1) Clear explanation requirement.--The Administrator shall
post on the SBA website (with a direct link displayed on the
homepage of the SBA website or the SBIR and STTR websites of
the SBA)--
(A) a clear explanation of the SBIR and STTR
affiliation rules under part 121 of title 13, Code of
Federal Regulations (or any successor regulation); and
(B) contact information for SBA officers or employees
who--
(i) on request, shall review an issue
relating to the rules described in subparagraph
(A); and
(ii) shall respond to a request under
subparagraph (A) not later than 20 business
days after the date on which the request is
received.
(2) Inclusion of affiliation rules for certain small business
concerns.--On and after the date on which the final regulations
under subsection (i) are prescribed, the Administrator shall
post on the SBA website information relating to the
regulations, in accordance with paragraph (1).
(i) Regulations.--
(1) Statement of congressional intent.--It is the intent of
Congress that the Administrator should prescribe regulations to
carry out this section that--
(A) permit small business concerns that are majority-
owned by multiple venture capital operating companies,
hedge funds, or private equity firms to participate in
the SBIR program in accordance with this section;
(B) provide specific guidance for small business
concerns that are majority-owned by multiple venture
capital operating companies, hedge funds, or private
equity firms with regard to eligibility, participation,
and affiliation rules; and
(C) preserve and maintain the integrity of the SBIR
program as a program for small business concerns in the
United States by prohibiting large businesses or large
entities or foreign-owned businesses or foreign-owned
entities from participation in the SBIR.
(2) Regulations.--The regulations at sections 121.103 and
121.702 of title 13, Code of Federal Regulations (or any
successor regulations), shall provide for participation in the
SBIR program, solely under authority of this section, by small
business concerns that are majority-owned by multiple venture
capital operating companies, hedge funds, or private equity
firms in the SBIR program.
(3) Contents.--
(A) In general.--The regulations shall permit
participation by an applicant that is majority-owned by
multiple venture capital operating companies, hedge
funds, or private equity firms in the SBIR program in
accordance with this section unless the Administrator
determines--
(i) in accordance with the size standards
established under subparagraph (B), that the
applicant--
(I) is a large business or large
entity; or
(II) is majority-owned or controlled
by a large business or large entity; or
(ii) in accordance with the criteria
established under subparagraph (C), that the
applicant--
(I) is a foreign-owned business or a
foreign entity or is not a citizen of
the United States or alien lawfully
admitted for permanent residence; or
(II) is majority-owned or controlled
by a foreign-owned business, foreign
entity, or person who is not a citizen
of the United States or alien lawfully
admitted for permanent residence.
(B) Size standards.--Under the authority to establish
size standards under paragraphs (1) through (4) of
section 101103(b) of this title, the Administrator
shall, in accordance with paragraph (1) of this
subsection, establish size standards for applicants
seeking to participate in the SBIR program solely under
the authority under this section.
(C) Criteria for determining foreign ownership.--The
Administrator shall establish criteria for determining
whether an applicant meets the requirements under
subparagraph (A)(ii), and, in establishing the
criteria, shall consider whether the criteria should
include--
(i) whether the applicant is at least 51
percent owned or controlled by citizens of the
United States or domestic venture capital
operating companies, hedge funds, or private
equity firms;
(ii) whether the applicant is domiciled in
the United States; and
(iii) whether the applicant is a direct or
indirect subsidiary of a foreign-owned firm,
including whether the criteria should include
that an applicant is a direct or indirect
subsidiary of a foreign-owned entity if--
(I) any venture capital operating
company, hedge fund, or private equity
firm that owns more than 20 percent of
the applicant is a direct or indirect
subsidiary of a foreign-owned entity;
or
(II) in the aggregate, entities that
are direct or indirect subsidiaries of
foreign-owned entities own more than 49
percent of the applicant.
(D) Criteria for determining affiliation.--The
Administrator shall establish criteria, in accordance
with paragraph (1), for determining whether an
applicant is affiliated with a venture capital
operating company, hedge fund, private equity firm, or
any other business that the venture capital operating
company, hedge fund, or private equity firm has
financed and, in establishing the criteria, shall
specify that--
(i) if a venture capital operating company,
hedge fund, or private equity firm that is
determined to be affiliated with an applicant
is a minority investor in the applicant, the
portfolio companies of the venture capital
operating company, hedge fund, or private
equity firm shall not be determined to be
affiliated with the applicant, unless--
(I) the venture capital operating
company, hedge fund, or private equity
firm owns a majority of the portfolio
company; or
(II) the venture capital operating
company, hedge fund, or private equity
firm holds a majority of the seats on
the board of directors of the portfolio
company;
(ii) subject to clause (i), the Administrator
retains the authority to determine whether a
venture capital operating company, hedge fund,
or private equity firm is affiliated with an
applicant, including establishing other
criteria;
(iii) the Administrator shall not determine
that a portfolio company of a venture capital
operating company, hedge fund, or private
equity firm is affiliated with an applicant
based solely on 1 or more shared investors; and
(iv) subject to clauses (i), (ii), and (iii),
the Administrator retains the authority to
determine whether a portfolio company of a
venture capital operating company, hedge fund,
or private equity firm is affiliated with an
applicant based on factors independent of
whether there is a shared investor, such as
whether there are contractual obligations
between the portfolio company and the
applicant.
Sec. 263110. Assistance for administrative, oversight, and contract
processing costs
(a) In General.--Subject to subsection (c), until September 30, 2017,
the Administrator shall allow an SBIR agency to use not more than 3
percent of the funds allocated to the SBIR program of the SBIR agency
for--
(1) administering the SBIR program or STTR program of the
SBIR agency;
(2) providing outreach and technical assistance relating to
the SBIR program or STTR program of the SBIR agency, including
technical assistance site visits, personnel interviews, and
national conferences;
(3) implementing commercialization and outreach initiatives
that were not in effect on December 31, 2011;
(4) carrying out the program under section 263314(a) of this
title;
(5) carrying out activities relating to oversight and
congressional reporting, including waste, fraud, and abuse
prevention activities;
(6) carrying out targeted reviews of recipients of awards
under the SBIR program or STTR program of the SBIR agency that
the head of the SBIR agency determines are at high risk for
fraud, waste, or abuse to ensure compliance with requirements
of the SBIR program or STTR program, respectively;
(7) implementing oversight and quality control measures,
including verification of reports and invoices and cost
reviews;
(8) carrying out section 263109 of this title;
(9) paying contract processing costs relating to the SBIR
program or STTR program of the SBIR agency; and
(10) providing funding for additional personnel and
assistance with application reviews.
(b) Outreach and Technical Assistance.--
(1) In general.--Except as provided in paragraph (2), an SBIR
agency participating in the program under this section shall
use a portion of the funds authorized for uses under subsection
(a) to carry out the policy directive required under section
263104(b)(12)(A) of this title and to increase the
participation of States with respect to which a low level of
SBIR awards have historically been awarded.
(2) Waiver.--An SBIR agency may request the Administrator to
waive the requirement under paragraph (1). Such a request shall
include an explanation of why the waiver is necessary. The
Administrator may grant the waiver based on a determination
that--
(A) the SBIR agency has demonstrated a sufficient
need for the waiver;
(B) the outreach objectives of the SBIR agency are
being met; and
(C) there is increased participation by States with
respect to which a low level of SBIR awards have
historically been awarded.
(c) Performance Criteria.--A Federal agency shall not use funds as
authorized under subsection (a) until after the effective date of
performance criteria, which the Administrator shall establish, to
measure any benefits of using funds as authorized under subsection (a)
and to assess continuation of the authority under subsection (a).
(d) Coordination With Inspector General.--The head of an SBIR agency
shall coordinate the activities funded under paragraph (5), (6), or (7)
of subsection (a) with the Inspector General of the SBIR agency, when
appropriate. An SBIR agency that allocates more than $50,000,000 to the
SBIR program of the SBIR agency for a fiscal year may share that
funding with its Inspector General when the Inspector General performs
those activities.
(e) Rules.--The Administrator shall issue rules to carry out this
section.
(f) Reporting.--The Administrator shall collect data and provide to
the Committee on Small Business and Entrepreneurship of the Senate and
the Committee on Small Business, Committee on Science, Space, and
Technology, and Committee on Appropriations of the House of
Representatives a report on the use of funds under this section,
including funds used to achieve the objectives of subsection (b)(1) and
any use of the waiver authority under subsection (b)(2).
Sec. 263111. Reports by Federal agencies
(a) Annual Report.--An SBIR agency shall annually submit to the
Administrator and the Office of Science and Technology Policy a report
on the Federal agency's SBIR program.
(b) Reporting of Awards Made From Single Proposals, Awards to
Multiple Award Winners, and Awards to Critical Technology Topics.--
(1) Single proposal.--If an SBIR agency makes an award with
respect to an SBIR program solicitation topic or subtopic for
which the Federal agency received only 1 proposal, the SBIR
agency shall provide written justification for making the award
in its next quarterly report to the Administrator and in the
SBIR agency's next annual report required under subsection (a).
(2) Multiple awards.--An SBIR agency shall include in its
next annual report required under subsection (a) an accounting
of the awards that the SBIR agency has made for phase I of its
SBIR program during the reporting period to entities that have
received more than 15 awards for phase II of the SBIR program
during the preceding 5 fiscal years.
(3) Critical technology awards.--
(A) In general.--An SBIR agency shall include in its
next annual report required under subsection (a) an
accounting of the number of awards that the SBIR agency
has made to critical technology topics described in
section 263102(a)(3) of this title.
(B) Contents.--An accounting under subparagraph (A)
shall--
(i) include an identification of the specific
critical technologies topics; and
(ii) disclose the percentage by number and
dollar amount of the SBIR agency's total SBIR
awards to critical technology topics.
(c) Number and Dollar Amount of Awards.--
(1) In general.--A Federal agency required by section 263101
of this title to have an SBIR program or to establish goals
shall annually submit to the Administrator a report that
discloses--
(A) the number of awards (including awards under
section 263314 of this title) pursuant to grants,
contracts, or cooperative agreements over $10,000 in
amount; and
(B) the dollar value of all such awards.
(2) Contents.--A report under paragraph (1) shall identify
SBIR awards and compare the number and amount of those awards
with awards to other than small business concerns.
(3) Calculation of extramural budget.--
(A) Methodology.--Not later than 4 months after the
date of enactment of each appropriations Act for an
SBIR agency, the SBIR agency shall submit to the
Administrator a report that includes a description of
the methodology used for calculating the amount of the
extramural budget of that SBIR agency.
(B) Administrator's analysis.--The Administrator
shall include an analysis of the methodology received
from each SBIR agency in the report required by section
107110(a) of this title.
Sec. 263112. Termination
The authorization to carry out an SBIR program under this chapter
terminates on September 30, 2022.
Subchapter II--STTR Programs
Sec. 263201. Required expenditure amounts
(a) STTR Program Budget.--
(1) In general.--With respect to each fiscal year through
fiscal year 2022, a Federal agency that has an extramural
budget for research or research and development in excess of
$1,000,000,000 for the fiscal year shall expend with small
business concerns not less than the percentage of the
extramural budget specified in paragraph (2), specifically in
connection with an STTR program that meets the requirements of
this division (including any policy directive under section
263203 of this title).
(2) Expenditure amounts.--The percentage of the extramural
budget required to be expended by an agency in accordance with
paragraph (1) shall be--
(A) 0.35 percent for each of fiscal years 2012 and
2013;
(B) 0.40 percent for each of fiscal years 2014 and
2015; and
(C) 0.45 percent for fiscal year 2016 and each fiscal
year thereafter.
(b) Limitations.--An STTR agency shall not--
(1) use any of its STTR program budget established under
subsection (a) for the purpose of funding--
(A) administrative costs of the STTR program,
including costs associated with salaries and expenses;
or
(B) in the case of a small business concern or a
research institution, costs associated with salaries,
expenses, and administrative overhead (other than
direct or indirect costs allowable under guidelines of
the Office of Management and Budget and the
Governmentwide Federal Acquisition Regulation; or
(2) make available for the purpose of meeting the
requirements of subsection (a) an amount of its extramural
budget for basic research that exceeds the percentage specified
in subsection (a).
(c) Exclusion of Certain Funding Agreements.--A funding agreement
with a small business concern for research or research and development
that results from a competitive or single source selection other than
an STTR program shall not be considered to meet any portion of the
percentage requirement of subsection (a).
Sec. 263202. Administration by Federal agencies
An STTR agency shall--
(1) unilaterally determine categories of projects to be
included in its STTR program;
(2) issue STTR program solicitations in accordance with a
schedule determined cooperatively with the Administrator;
(3) unilaterally determine research topics within the Federal
agency's STTR program solicitations, giving special
consideration to broad research topics and to topics that
further 1 or more critical technologies, as identified by--
(A) the National Critical Technologies Panel in the
reports required under section 603 of the National
Science and Technology Policy, Organization, and
Priorities Act of 1976 (42 U.S.C. 6683) (as in effect
before January 1, 2001); or
(B) the Secretary of Defense, in the reports required
under section 2522 of title 10 (as in effect before
February 10, 1996);
(4)(A) unilaterally receive and evaluate proposals resulting
from STTR program solicitations; and
(B) make a final decision on each proposal submitted under
the STTR program--
(i) not later than 1 year after the date on which the
applicable solicitation closes, if with respect to the
National Institutes of Health or the National Science
Foundation, or 90 days after the date on which the
applicable solicitation closes, if with respect to any
STTR participating agency; or
(ii) if the Administrator authorizes an extension for
a solicitation, not later than 90 days after the date
that would be applicable to the STTR participating
agency under clause (i);
(5)(A) unilaterally select awardees for its STTR program
funding agreements; and
(B) inform each awardee under a funding agreement, to the
extent possible, of the expenses of the awardee that will be
allowable under the funding agreement;
(6) administer its own STTR program funding agreements (or
delegate such administration to another Federal agency);
(7)(A) make payments to recipients of STTR program funding
agreements on the basis of progress toward or completion of the
funding agreement requirements; and
(B) in all cases, make payment to recipients under funding
agreements in full, subject to audit, on or before the last day
of the 12-month period beginning on the date of the completion
of the funding agreement requirements;
(8)(A) include as part of its annual performance plan as
required by subsections (a) and (b) of section 1115 of title 31
a section on its STTR program; and
(B) submit that section to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Science
and the Committee on Small Business of the House of
Representatives;
(9) collect annually, and maintain in a common format in
accordance with the simplified reporting requirements under
section 263304 of this title, such information from applicants
and awardees as is necessary to assess STTR program outputs and
outcomes, including information necessary to maintain the
database under section 263301 of this title, including--
(A) whether an applicant or awardee--
(i) has venture capital, hedge fund, or
private equity firm investment or is majority-
owned by multiple venture capital operating
companies, hedge funds, or private equity firms
and, if so--
(I) the amount of venture capital,
hedge fund, or private equity firm
investment that the applicant or
awardee has received as of the date of
the application or award, as
applicable; and
(II) the amount of additional capital
that the applicant or awardee has
invested in the STTR technology;
(ii) has an investor that--
(I) is an individual who is not a
citizen of the United States or a
lawful permanent resident of the United
States and, if so, the name of any such
individual; or
(II) is a person that is not an
individual and is not organized under
the laws of a State or the United
States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a
principal investor;
(iv) is owned by a socially or economically
disadvantaged individual or has a socially or
economically disadvantaged individual as a
principal investor;
(v) is a faculty member or a student of an
institution of higher education (as defined in
section 101 of the Higher Education Act of 1965
(20 U.S.C. 1001); or
(vi) is located in a State in which the total
value of contracts awarded to small business
concerns under all STTR programs is less than
the total value of contracts awarded to small
business concerns in a majority of other
States, as determined by the Administrator in
biennial fiscal years, beginning with fiscal
year 2008, based on the most recent statistics
compiled by the Administrator;
(B) if an awardee receives an award in an amount that
is more than the award guidelines under this division,
a statement from the agency that justifies the award
amount; and
(C) data with respect to the FAST program;
(10) adopt the agreement developed by the Administrator under
section 263204 of this title as the STTR agency's model
agreement for allocating between small business concerns and
research institutions--
(A) intellectual property rights; and
(B) rights, if any, to carry out follow-on research,
development, or commercialization;
(11) develop, in consultation with the Office of Federal
Procurement Policy and the Office of Government Ethics,
procedures to ensure that federally funded research and
development centers that participate in STTR program
agreements--
(A) are free from organizational conflicts of
interests relative to the program;
(B) do not use privileged information gained through
work performed for an STTR agency or private access to
STTR agency personnel in the development of an STTR
program proposal; and
(C) use outside peer review, as appropriate;
(12) develop procedures for assessing the commercial merit
and feasibility of STTR program proposals, as evidenced by--
(A) the small business concern's record of
successfully commercializing STTR program research or
other research;
(B) the existence of phase II funding commitments
from private sector or non-STTR program funding
sources;
(C) the existence of phase III follow-on commitments
for the subject of the research; and
(D) the presence of other indicators of the
commercial potential of the idea;
(13) implement an outreach program to research institutions
and small business concerns for the purpose of enhancing its
STTR program, in conjunction with any such outreach done for
purposes of the STTR agency's SBIR program;
(14) provide for and fully implement the tenets of Executive
Order 13329 (Encouraging Innovation in Manufacturing);
(15) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative
tribunal concerning the STTR program of the Federal agency; and
(16) annually submit to the Administrator and the Office of
Science and Technology Policy a report on its STTR program.
Sec. 263203. Policy directive
(a) Issuance.--The Administrator shall issue a policy directive for
the general conduct of the STTR programs within the Federal Government.
(b) Consultation.--The STTR program policy directive shall be issued
after consultation with--
(1) the heads of each of the STTR agencies;
(2) the Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark Office;
and
(3) the Administrator for Federal Procurement Policy.
(c) Contents.--The policy directive required by subsection (a) shall
provide for--
(1) simplified, standardized, and timely STTR program
solicitations;
(2) a simplified, standardized funding process that provides
for--
(A) the timely receipt and review of proposals;
(B) outside peer review, if appropriate;
(C) protection of proprietary information provided in
proposals;
(D) selection of awardees;
(E) retention by a small business concern of the
rights to data generated by the small business concern
in the performance of an STTR award for a period of not
less than 4 years;
(F) continued use by a small business concern, as a
directed bailment, of any property transferred by a
Federal agency to the small business concern in phase
II of the Federal agency's STTR program for a period of
not less than 2 years, beginning on the initial date of
the small business concern's participation in phase III
of the STTR program;
(G) cost sharing;
(H) cost principles and payment schedules; and
(I)(i) 1-year awards for phase I of an STTR program,
generally not to exceed $150,000 (which amount the
Administrator shall adjust annually for inflation),
greater or lesser amounts to be awarded at the
discretion of the awarding Federal agency, and shorter
or longer periods of time to be approved at the
discretion of the awarding agency where appropriate for
a particular project; and
(ii) 2-year awards for phase II of the STTR program,
generally not to exceed $1,000,000 (which amount the
Administrator shall adjust annually for inflation),
greater or lesser amounts to be awarded at the
discretion of the awarding Federal agency, and shorter
or longer periods of time to be approved at the
discretion of the awarding agency where appropriate for
a particular project;
(3) minimizing the regulatory burdens associated with
participation in an STTR program;
(4) guidelines for a model agreement, to be used by all
Federal agencies, for allocating between small business
concerns and research institutions--
(A) intellectual property rights; and
(B) rights, if any, to carry out follow-on research,
development, or commercialization;
(5) procedures to ensure that--
(A) a recipient of an STTR award is a small business
concern; and
(B) the small business concern exercises management
and control of the performance of the STTR program
funding agreement under a business plan providing for
the commercialization of the technology that is the
subject matter of the award; and
(6) procedures to ensure, to the extent practicable, that a
Federal agency that intends to pursue research, development, or
production of a technology developed by a small business
concern under an STTR program enters into a follow-on, non-STTR
program funding agreement with the small business concern for
the research, development, or production.
(d) Rights to Data.--The rights provided for under subsection
(c)(2)(E) shall apply to all Federal funding awards under this
division, including phase I, phase II, and phase III awards.
Sec. 263204. Model agreement for intellectual property rights
(a) In General.--The Administrator shall promulgate regulations
establishing a single model agreement for use in an STTR program that
allocates between small business concerns and research institutions--
(1) intellectual property rights; and
(2) rights, if any, to carry out follow-on research,
development, or commercialization.
(b) Opportunity for Comment.--In promulgating regulations under
subsection (a), the Administrator shall provide to affected Federal
agencies, small business concerns, research institutions, and other
interested parties the opportunity to submit written comments.
Sec. 263205. Phase 0 proof of concept partnership pilot program
(a) Definitions.--In this section:
(1) Director.--The term ``Director'' means the Director of
the National Institutes of Health.
(2) Participating research institution.--The term
``participating research institution'' means a university or
other research institution that participates in the National
Institutes of Health's STTR program.
(3) Pilot program.--The term ``pilot program'' means the
proof of concept partnership pilot program under subsection
(b).
(b) In General.--The Director may use $5,000,000 of the funds
allocated under section 263201(a) of this title for a proof of concept
partnership pilot program to accelerate the creation of small
businesses and the commercialization of research innovations from
participating research institutions. To implement the pilot program,
the Director shall award, through a competitive, merit-based process,
grants to participating research institutions. The grants shall be used
only to administer proof of concept partnership awards in conformity
with this section.
(c) Proof of Concept Partnerships.--
(1) In general.--A proof of concept partnership shall be
established by a participating research institution to award
grants to individual researchers. The grants should provide
researchers with the initial investment and the resources to
support the proof of concept work and commercialization
mentoring needed to translate promising research projects and
technologies into a viable company. The work may include
technical validations, market research, clarifying intellectual
property rights position and strategy, and investigating
commercial or business opportunities.
(2) Award guidelines.--The administrator of a proof of
concept partnership shall award grants in accordance with the
following guidelines:
(A) Oversight process.--The proof of concept
partnership shall use a market-focused project
management oversight process, including--
(i) a rigorous, diverse review board
comprised of local experts in translational and
proof of concept research, including industry,
startup, venture capital, technical, financial,
and business experts and university technology
transfer officials;
(ii) technology validation milestones focused
on market feasibility;
(iii) simple reporting effective at
redirecting projects; and
(iv) the willingness to reallocate funding
from failing projects to projects with more
potential.
(B) Maximum amount toward individual proposal.--Not
more than $100,000 shall be awarded toward an
individual proposal.
(3) Educational resources and guidance.--The administrator of
a proof of concept partnership shall make educational resources
and guidance available to researchers attempting to
commercialize their innovations.
(d) Awards by the Director to Participating Research Institutions.--
(1) Amount.--The Director may make an award to a
participating research institution for not more than $1,000,000
per year for not more than 3 years.
(2) Criteria.--In determining which participating research
institutions receive pilot program grants, the Director shall
consider, in addition to any other criteria that the Director
determines to be necessary, the extent to which participating
research institutions--
(A) have an established and proven technology
transfer or commercialization office and have a plan
for engaging the commercialization office in the pilot
program's implementation;
(B) have demonstrated a commitment to local and
regional economic development;
(C) are located in diverse geographies and are of
diverse sizes;
(D) are able to assemble project management boards
comprised of industry, startup, venture capital,
technical, financial, and business experts;
(E) have an intellectual property rights strategy or
office; and
(F) demonstrate a plan for sustainability beyond the
duration of the award.
(e) No Basic Research; Evaluation of Commercial Potential of Existing
Discoveries.--The funds for the pilot program shall not be used for
basic research, but shall be used to evaluate the commercial potential
of existing discoveries, including--
(1) proof of concept research or prototype development; and
(2) activities that contribute to determining a project's
commercialization path, to include technical validations,
market research, clarifying intellectual property rights, and
investigating commercial and business opportunities.
(f) No Acquisition of Research Equipment or Supplies.--The funds for
the pilot program shall not be used to fund the acquisition of research
equipment or supplies unrelated to commercialization activities.
(g) Evaluative Report.--
(1) In general.--The Director shall submit to the Committee
on Science, Space, and Technology and Committee on Small
Business of the House of Representatives and the Committee on
Small Business and Entrepreneurship of the Senate an evaluative
report regarding the activities of the pilot program.
(2) Contents.--The report shall include--
(A) a detailed description of the institutional and
proposal selection process;
(B) an accounting of the funds used in the pilot
program;
(C) a detailed description of the pilot program,
including incentives and activities undertaken by
review board experts;
(D) a detailed compilation of results achieved by the
pilot program, including the number of small business
concerns included, the number of business packages
developed, and the number of projects that progressed
into subsequent STTR phases; and
(E) an analysis of the pilot program's effectiveness
with supporting data.
(h) Termination.--The pilot program shall terminate at the end of
fiscal year 2017.
Subchapter III--Provisions Relating to Both SBIR Programs and STTR
Programs
Sec. 263301. Database
(a) Public Database.--The Administrator shall develop, maintain, and
make available to the public a searchable, up-to-date, electronic
database that includes--
(1) the name, size, location, and an identifying number
assigned by the Administrator of each small business concern
that has received a phase I or phase II SBIR program or STTR
award from a Federal agency;
(2) a description of each phase I or phase II SBIR program or
STTR award received by that small business concern, including--
(A) an abstract of the project funded by the award,
excluding any information identified by the small
business concern as proprietary information;
(B) the Federal agency making the award; and
(C) the date and amount of the award;
(3) an identification of any business concern or subsidiary
established for the commercial application of a product or
service for which an SBIR program or STTR award is made;
(4) information regarding mentors and mentoring networks, as
required by section 263305(f)(3) of this title;
(5) with respect to assistance under STTR program--
(A) whether the small business concern or the
research institution initiated their collaboration on
each assisted STTR project;
(B) whether the small business concern or the
research institution originated any technology relating
to the assisted STTR project;
(C) the length of time it took to negotiate any
licensing agreement between the small business concern
and the research institution under each assisted STTR
project; and
(D) how the proceeds from commercialization,
marketing, or sale of technology resulting from each
assisted STTR project were allocated (by percentage)
between the small business concern and the research
institution; and
(6) for each small business concern that receives a phase I
or phase II SBIR award or STTR award from a Federal agency,
whether the small business concern--
(A) has venture capital, hedge fund, or private
equity firm investment and, if so, whether the small
business concern is registered as majority-owned by
multiple venture capital operating companies, hedge
funds, or private equity firms as required under
section 263109(c) of this title;
(B) is owned by a woman or has a woman as a principal
investor;
(C) is owned by a socially or economically
disadvantaged individual or has a socially or
economically disadvantaged individual as a principal
investor;
(D) is owned by a faculty member or a student of an
institution of higher education (as defined in section
101 of the Higher Education Act of 1965 (20 U.S.C.
1001); or
(E) received assistance under the FAST Program.
(b) Government Database.--
(1) In general.--The Administrator, in consultation with SBIR
agencies and STTR agencies, shall develop and maintain a
database that--
(A) contains for each small business concern that
applies for, submits a proposal for, or receives an
award under phase I or phase II of the SBIR program or
STTR program--
(i) the name, size, and location of, and the
identifying number assigned by the
Administrator to, the small business concern;
(ii) an abstract of the applicable project;
(iii) the specific aims of the project;
(iv) the number of employees of the small
business concern;
(v) the names and titles of the key
individuals that will carry out the project,
the position each key individual holds in the
small business concern, and contact information
for each key individual;
(vi) the percentage of effort that each
individual described in clause (v) will
contribute to the project;
(vii) whether the small business concern is
majority-owned by multiple venture capital
operating companies, hedge funds, or private
equity firms; and
(viii) the Federal agency to which the
application is made and contact information for
the person or office within the Federal agency
that is responsible for reviewing applications
and making awards under the SBIR program or
STTR program;
(B) contains for each phase II award made by a
Federal agency--
(i) information collected in accordance with
subsection (c) on revenue from the sale of new
products or services resulting from the
research conducted under the award;
(ii) information collected in accordance with
subsection (c) on additional investment from
any source, other than phase I or phase II SBIR
program or STTR awards, to further the research
and development conducted under the award; and
(iii) any other information received in
connection with the award that the
Administrator, in conjunction with the SBIR
program and STTR program managers of Federal
agencies, considers relevant and appropriate;
(C) includes any narrative information that a small
business concern receiving a phase II award voluntarily
submits to further describe the outputs and outcomes of
its awards;
(D) includes, for each awardee--
(i) the name, size, and location of, and any
identifying number assigned by the
Administrator to, the awardee;
(ii) whether the awardee has venture capital,
hedge fund, or private equity firm investment
and, if so--
(I) the amount of venture capital,
hedge fund, or private equity firm
investment as of the date of the award;
(II) the percentage of ownership of
the awardee held by a venture capital
operating company, hedge fund, or
private equity firm, including whether
the awardee is majority-owned by
multiple venture capital operating
companies, hedge funds, or private
equity firms; and
(III) the amount of additional
capital that the awardee has invested
in the SBIR or STTR technology, which
information shall be collected on an
annual basis;
(iii) the names and locations of any
affiliates of the awardee;
(iv) the number of employees of the awardee;
(v) the number of employees of the affiliates
of the awardee; and
(vi) the names of, and the percentage of
ownership of the awardee held by--
(I) any individual who is not a
citizen of the United States or a
lawful permanent resident of the United
States; or
(II) any person that is not an
individual and is not organized under
the laws of a State or the United
States;
(E) includes any other data collected by or available
to any Federal agency that the Federal agency considers
may be useful for SBIR program or STTR program
evaluation; and
(F) includes a timely and accurate list of any
individual or small business concern that has
participated in the SBIR program or STTR program that
has been--
(i) convicted of a fraud-related crime
involving funding received under the SBIR
program or STTR program; or
(ii) found civilly liable for a fraud-related
violation involving funding received under the
SBIR program or STTR program.
(2) Use.--The database under paragraph (1) shall be available
for use solely--
(A) for program evaluation purposes by the Federal
Government; or
(B) in accordance with policy directives issued by
the Administrator, by other authorized persons that are
subject to a use and nondisclosure agreement with the
Federal Government covering the use of the database.
(c) Updating of Information.--
(1) In general.--A small business concern applying for a
phase II award under this division shall be required to update
information in the database established under this section for
any prior phase II award received by that small business
concern.
(2) Apportionment.--In complying with this subsection, a
small business concern may apportion sales or additional
investment information relating to more than 1 phase II award
among those awards, if the small business concern notes the
apportionment for each award.
(3) Updates at termination.--
(A) In general.--A small business concern receiving a
phase II award under this division shall update
information in the database concerning that award at
the termination of the award period.
(B) Voluntary updates.--An SBIR agency shall request
a small business concern described in subparagraph (A)
to voluntarily update such information described in
subparagraph (A) annually after termination for a
period of 5 years.
(4) Government database.--Not later than 60 days after the
date established by a Federal agency for submitting
applications or proposals for a phase I or phase II award under
the SBIR program or STTR program, the head of the Federal
agency shall submit to the Administrator the data required
under subsection (b) with respect to each small business
concern that applies or submits a proposal for the phase I or
phase II award.
(d) Protection of Information.--Information provided under subsection
(b) or (c) shall be considered privileged and confidential and not
subject to disclosure under section 552 of title 5.
(e) Effect of Inclusion of Information in Database.--Inclusion of
information in the database under this section shall not be considered
to be publication for purposes of subsection (a) or (b) of section 102
of title 35.
Sec. 263302. Phase III agreements
(a) In General.--In the case of a small business concern that is
awarded a funding agreement for phase II of an SBIR program or STTR
program, a Federal agency may enter into a phase III agreement with the
small business concern for additional work to be performed during or
after phase II period.
(b) Procedures.--The phase II funding agreement with the small
business concern may, at the discretion of the Federal agency awarding
the agreement, set out the procedures applicable to phase III
agreements with that Federal agency or any other Federal agency.
(c) Intellectual Property Rights.--A funding agreement under an SBIR
program or STTR program shall include provisions setting forth the
respective rights of the United States and the small business concern
with respect to--
(1) intellectual property rights; and
(2) any right to carry out follow-on research.
(d) Phase III Awards.--To the greatest extent practicable, a Federal
agency or Federal prime contractor shall issue a phase III award
relating to technology, including a sole source award, to the SBIR
award recipient or STTR award recipient that developed the technology.
Sec. 263303. Inclusion of SBIR program and STTR program information in
strategic plans
Program information relating to SBIR programs and STTR programs shall
be included by a Federal agency in any update or revision required of
the Federal agency under section 306(b) of title 5.
Sec. 263304. Reduction of paperwork and compliance burden
(a) In General.--
(1) Standardization of reporting requirements.--The
Administrator shall work with SBIR agencies and STTR agencies
to standardize reporting requirements for the collection of
data from SBIR program or STTR program applicants and awardees,
including data for inclusion in the database under section
263301 of this title, taking into consideration the unique
needs of each Federal agency, and to the extent possible,
permitting the updating of previously reported information by
electronic means.
(2) Minimization of Burden.--The reporting requirements
described in paragraph (1) shall be designed to minimize the
burden on small business concerns.
(b) Simplification of Application and Award Process.--After a period
of public comment, the Administrator shall issue regulations or
guidelines, taking into consideration the unique needs of each Federal
agency, to ensure that each SBIR agency and STTR agency simplifies and
standardizes the program proposal, selection, contracting, compliance,
and audit procedures for the SBIR program or STTR program of the SBIR
agency or STTR agency (including procedures relating to overhead rates
for applicants and documentation requirements) to reduce the paperwork
and regulatory compliance burden on small business concerns applying to
and participating in the SBIR program or STTR program.
Sec. 263305. FAST program
(a) Definitions.--In this section:
(1) Applicant.--The term ``applicant'' means an entity,
organization, or individual that submits a proposal for an
award or a cooperative agreement under this section.
(2) Business advice and counseling.--The term ``business
advice and counseling'' means advice and assistance on matters
described in subsection (f) to small business concerns to guide
small business concerns through the SBIR program and STTR
program process, from application to award and successful
completion of each phase of an SBIR program or STTR program.
(3) Catastrophic incident.--The term ``catastrophic
incident'' means a major disaster that is comparable to the
description of a catastrophic incident in the National Response
Plan of the Administration (or any successor to the plan).
(4) Mentor.--The term ``mentor'' means an individual
described in subsection (f).
(5) Mentoring network.--The term ``mentoring network'' means
an association, organization, coalition, or other entity
(including an individual) that meets the requirements of
subsection (f).
(6) Recipient.--The term ``recipient'' means a person that
receives an award or becomes party to a cooperative agreement
under this section.
(7) State.--The term ``State'' means a State, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, and American
Samoa.
(b) Establishment of FAST Program.--The Administrator shall establish
a Federal and State technology partnership program, to be known as the
FAST program, the purpose of which shall be to strengthen the
technological competitiveness of small business concerns in the States.
(c) Grants and Cooperative Agreements.--
(1) Joint review.--In carrying out the FAST program, the
Administrator and the SBIR program managers at the National
Science Foundation and the Department of Defense shall jointly
review proposals submitted by applicants and may make awards or
enter into cooperative agreements under this section based on
the factors for consideration specified in paragraph (2), to
enhance or develop in a State--
(A) technology research and development by small
business concerns;
(B) technology transfer from university research to
technology-based small business concerns;
(C) technology deployment and diffusion benefiting
small business concerns;
(D) the technological capabilities of small business
concerns through the establishment or operation of
consortia comprised of entities, organizations, or
individuals, including--
(i) State and local development agencies and
entities;
(ii) representatives of technology-based
small business concerns;
(iii) industries and emerging companies;
(iv) universities; and
(v) small business development centers; and
(E) outreach, financial support, and technical
assistance to technology-based small business concerns
participating in or interested in participating in an
SBIR program, including initiatives--
(i) to make grants or loans to companies to
pay a portion or all of the cost of developing
SBIR program proposals;
(ii) to establish or operate a mentoring
network within the FAST program to provide
business advice and counseling that will assist
small business concerns that have been
identified by FAST program participants,
program managers of participating SBIR
agencies, the Administrator, or other entities
that--
(I) are knowledgeable about the SBIR
programs and STTR programs as good
candidates for SBIR programs and STTR
programs; and
(II) would benefit from mentoring, in
accordance with subsection (f);
(iii) to create or participate in a training
program for individuals providing SBIR program
outreach and assistance at the State and local
levels; and
(iv) to encourage the commercialization of
technology developed through SBIR program
funding.
(2) Selection considerations.--In making awards or entering
into cooperative agreements under this section, the
Administrator and the SBIR program managers at the National
Science Foundation and the Department of Defense--
(A) may consider only proposals by applicants that
intend to use a portion of the Federal assistance
provided under this section to provide outreach,
financial support, or technical assistance to
technology-based small business concerns participating
in or interested in participating in an SBIR program;
(B) shall consider, at a minimum--
(i) whether the applicant has demonstrated
that the assistance to be provided would
address unmet needs of small business concerns
in the community, and whether it is important
to use Federal funding for the proposed
activities;
(ii) whether the applicant has demonstrated
that a need exists to increase the number or
success of small high-technology businesses in
the State, as measured by the number of phase I
and phase II SBIR awards that have historically
been received by small business concerns in the
State;
(iii) whether the projected costs of the
proposed activities are reasonable;
(iv) whether the proposal integrates and
coordinates the proposed activities with other
State and local programs assisting small high-
technology firms in the State;
(v) the manner in which the applicant will
measure the results of the activities to be
conducted; and
(vi) whether the proposal addresses the needs
of--
(I) small business concerns owned and
controlled by women;
(II) small business concerns owned
and controlled by minorities; and
(III) small business concerns located
in areas that have historically not
participated in the SBIR programs and
STTR programs; and
(C) shall give special consideration to an applicant
that is located in an area affected by a catastrophic
incident.
(3) Proposal limit.--Not more than 1 proposal may be
submitted for inclusion in the FAST program to provide services
in any 1 State in any 1 fiscal year.
(4) Process.--
(A) Proposals and application.--A proposal or
application for assistance under this section shall be
in such form and subject to such procedures as the
Administrator shall establish.
(B) Regulations.--The Administrator shall promulgate
regulations establishing standards for the
consideration of proposals under paragraph (2),
including standards regarding each of the
considerations described in paragraph (2)(B).
(5) Additional assistance for catastrophic incidents.--Upon
application by an applicant that receives an award or has in
effect a cooperative agreement under this section and that is
located in an area affected by a catastrophic incident, the
Administrator may--
(A) provide additional assistance to the applicant;
and
(B) waive the matching requirements under subsection
(e)(2).
(d) Cooperation and Coordination.--In carrying out the FAST program,
the Administrator shall cooperate and coordinate with--
(1) SBIR agencies; and
(2) entities, organizations, and individuals actively engaged
in enhancing or developing the technological capabilities of
small business concerns, including--
(A) State and local development agencies and
entities;
(B) State committees established under the
Experimental Program to Stimulate Competitive Research
of the National Science Foundation established under
section 113 of the National Science Foundation
Authorization Act of 1988 (42 U.S.C. 1862g);
(C) State science and technology councils; and
(D) representatives of technology-based small
business concerns.
(e) Requirements.--
(1) Competitive basis.--An award under this section shall be
made or a cooperative agreement under this section shall be
entered into on a competitive basis.
(2) Matching requirements.--
(A) Amount of non-federal share.--
(i) In general.--The non-Federal share of the
cost of an activity (other than a planning
activity) carried out using an award or under a
cooperative agreement under this section shall
be--
(I) \1/3\, in the case of a recipient
that will serve small business concerns
located in 1 of the 18 States receiving
the fewest SBIR program phase I awards;
(II) except as provided in
subparagraph (B), \1/2\, in the case of
a recipient that will serve small
business concerns located in 1 of the
16 States receiving the greatest number
of SBIR program phase I awards; and
(III) except as provided in
subparagraph (B), \3/7\, in the case of
a recipient that will serve small
business concerns located in a State
not described in subclause (I) or (II)
that is receiving SBIR program phase I
awards.
(ii) Rankings.--For purposes of clause (i),
the Administrator shall reevaluate the ranking
of a State once every 2 fiscal years, based on
the most recent statistics compiled by the
Administrator.
(B) Low-income areas.--To the extent that the Federal
contribution to the cost of the activity will be
directly allocated by a recipient described in
subparagraph (A) to serve small business concerns
located in a qualified census tract, the non-Federal
share of the cost of an activity carried out using an
award or under a cooperative agreement under this
section shall be \1/3\.
(C) Types of funding.--
(i) In general.--The non-Federal share of the
cost of an activity carried out by a recipient
shall be comprised of not less than 50 percent
cash and not more than 50 percent of indirect
costs and in-kind contributions.
(ii) Non-federal source.--None of the non-
Federal share of costs or contributions may be
derived from funds from any other Federal
program.
(3) Duration.--An award may be made or a cooperative
agreement may be entered into under this section for multiple
years, not to exceed 5 years in total.
(f) Mentoring Networks.--
(1) In general.--A recipient of an award or participant in a
cooperative agreement under this section may use a reasonable
amount of the assistance for the establishment of a mentoring
network under this section.
(2) Criteria.--A mentoring network established using
assistance under this section shall--
(A) provide business advice and counseling to high
technology small business concerns located in the State
or region served by the mentoring network and
identified under subsection (c)(1)(E)(ii) as potential
candidates for an SBIR program or STTR program;
(B) identify volunteer mentors who--
(i) are persons associated with a small
business concern that has successfully
completed 1 or more SBIR program or STTR
program funding agreements; and
(ii) have agreed to guide small business
concerns through all stages of the SBIR program
or STTR program process, including providing
assistance relating to--
(I) proposal writing;
(II) marketing;
(III) Government accounting;
(IV) Government audits;
(V) project facilities and equipment;
(VI) human resources;
(VII) phase III partners;
(VIII) commercialization;
(IX) venture capital networking; and
(X) other matters relevant to the
SBIR programs and STTR programs;
(C) have experience working with small business
concerns participating in the SBIR programs and STTR
programs;
(D) contribute information to the national database
referred to in paragraph (3); and
(E) agree to reimburse volunteer mentors for out-of-
pocket expenses related to service as a mentor under
this section.
(3) Mentoring database.--The Administrator, directly or by
contract, shall--
(A) include in the database required by section
263301 of this title, in cooperation with the SBIR
program, STTR program, and FAST program, information on
mentoring networks and mentors participating under this
subsection, including a description of their areas of
expertise;
(B) work cooperatively with mentoring networks to
maintain and update the database; and
(C) take such action as is necessary to aggressively
promote mentoring networks under this subsection.
(g) Termination.--The authority to carry out the FAST program
terminates on September 30, 2005.
Sec. 263306. Innovation in energy efficiency
(a) Federal Agency Energy-Related Priority.--In carrying out its
duties under this division relating to SBIR program and STTR program
solicitations by Federal agencies, the Administrator shall--
(1) ensure that Federal agencies give high priority to small
business concerns that participate in or conduct energy
efficiency or renewable energy system research and development
projects; and
(2) include in the annual report to Congress under section
107110(a) of this title a determination of whether the priority
described in paragraph (1) is being carried out.
(b) Consultation.--The Administrator shall consult with the heads of
other Federal agencies in determining whether priority has been given
to small business concerns that participate in or conduct energy
efficiency or renewable energy system research and development
projects, as required by this section.
(c) Guidelines.--The Administrator shall issue guidelines and
directives to assist Federal agencies in meeting the requirements of
this section.
Sec. 263307. Competitive selection procedures
All funds awarded, appropriated, or otherwise made available in
accordance with section 263101 or 263201 of this title shall be awarded
pursuant to competitive and merit-based selection procedures.
Sec. 263308. Award amounts in excess of guidelines
(a) Prohibition.--
(1) In general.--A Federal agency shall not issue an award
under the SBIR program or STTR program if the amount of the
award would exceed the award guidelines established under this
section by more than 50 percent.
(2) Waiver for specific topic.--On the receipt of an
application from an SBIR agency or STTR agency, the
Administrator may grant a waiver from the prohibition under
paragraph (1) with respect to a specific topic (but not for the
SBIR agency or STTR agency as a whole) for a fiscal year if the
Administrator determines, based on the information contained in
the application from the SBIR agency or STTR agency, that--
(A) the requirement under paragraph (1) will
interfere with the ability of the SBIR agency or STTR
agency to fulfill its research mission through the SBIR
program or STTR program; and
(B) the SBIR agency or STTR agency will minimize, to
the maximum extent possible, the number of awards that
do not satisfy the prohibition under paragraph (1) to
preserve the nature and intent of the SBIR program and
the STTR program.
(b) Maintenance of Information.--An SBIR agency and an STTR agency
shall maintain information on awards exceeding the guidelines
established under this division, including, for each such award--
(1) the amount of the award;
(2) a justification for exceeding the guidelines for the
award;
(3) the identity and location of the award recipient; and
(4) whether the award recipient has received any venture
capital, hedge fund, or private equity firm investment and, if
so, whether the recipient is majority-owned by multiple venture
capital operating companies, hedge funds, or private equity
firms.
(c) Rule of Construction.--Nothing in this section shall be construed
to preclude an SBIR agency or STTR agency from supplementing an award
under the SBIR program or STTR program using funds of the SBIR agency
or STTR agency that are not part of the SBIR program or STTR program of
the SBIR agency or STTR agency.
Sec. 263309. Subsequent phase II awards
(a) Agency Flexibility.--A small business concern that receives a
phase I award from a Federal agency under this division shall be
eligible to receive a subsequent phase II award from another Federal
agency if--
(1) the head of each relevant Federal agency or the relevant
component of the Federal agency makes a written determination
that the topics of the relevant awards are the same; and
(2) both Federal agencies report the awards to the
Administrator for inclusion in the public database under
section 263301 of this title.
(b) SBIR and STTR Program Flexibility.--
(1) In general.--A small business concern that receives a
phase I award under this division under the SBIR program or
STTR program may receive a subsequent phase II award under
either the SBIR program or the STTR program.
(2) Reporting.--The participating Federal agency or agencies
shall report awards referred to in paragraph (1) to the
Administrator for inclusion in the public database under
section 263301 of this title.
(c) Prevention of Duplicative Awards.--The head of a Federal agency
shall verify that any activity to be performed with respect to a
project with a phase I or phase II SBIR or STTR award has not been
funded under the SBIR program or STTR program of another Federal
agency.
Sec. 263310. Collaboration with Federal laboratories and research and
development centers
(a) Authorization.--Subject to the limitations under this section,
the head of an SBIR participating agency or STTR participating agency
may make an SBIR award or STTR award to any eligible small business
concern that--
(1) intends to enter into an agreement with a Federal
laboratory or federally funded research and development center
for a portion of the activities to be performed under the
award; or
(2) enters into a cooperative research and development
agreement (as defined in section 12(d) of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.S. 3710a(d)) with a
Federal laboratory.
(b) Prohibition.--A Federal agency shall not--
(1) condition an SBIR award or STTR award on a small business
concern's entering into an agreement with any Federal
laboratory or any federally funded laboratory or research and
development center for any portion of the activities to be
performed under the award;
(2) approve an agreement between a small business concern
receiving an SBIR award or STTR award and a Federal laboratory
or federally funded laboratory or research and development
center, if the small business concern performs a lesser portion
of the activities to be performed under the award than required
by this section and by the SBIR policy directives and the STTR
policy directive of the Administrator; or
(3) approve an agreement that violates any provision,
including any data rights protections provision, of this
section or the SBIR Directives and the STTR policy directive.
(c) Implementation.--The SBIR policy directives and the STTR policy
directive issued under this division shall ensure that small business
concerns--
(1) have the flexibility to use the resources of the Federal
laboratories or federally funded research and development
centers; and
(2) are not required to enter into agreement with any Federal
laboratory or any federally funded laboratory or research and
development center as a condition of an award.
(d) Advance payment.--If a small business concern that receives an
award under this division enters into an agreement with a Federal
laboratory or federally funded research and development center for a
portion of the activities to be performed under the award, the Federal
laboratory or federally funded research and development center shall
not require advance payment from the small business concern in an
amount greater than the amount necessary to pay for 30 days of the
activities.
Sec. 263311. Sequential SBIR awards and STTR awards for continued work
on a project
A small business concern that receives a phase II SBIR award or phase
II STTR award for a project remains eligible to receive 1 additional
phase II SBIR award or phase II STTR award for continued work on the
project.
Sec. 263312. Prevention of duplicative awards
The head of a Federal agency shall verify that any activity to be
performed with respect to a project with a phase I or phase II SBIR
award or STTR award has not been funded under the SBIR program or STTR
program of another Federal agency.
Sec. 263313. Discretionary technical assistance
(a) In General.--An SBIR agency or STTR agency may enter into an
agreement with a vendor selected under subsection (b) to provide small
business concerns engaged in SBIR projects or STTR projects with
technical assistance services, such as access to a network of
scientists and engineers engaged in a wide range of technologies or
access to technical and business literature available through on-line
data bases, for the purpose of assisting the small business concerns
in--
(1) making better technical decisions concerning the
projects;
(2) solving technical problems that arise during the conduct
of the projects;
(3) minimizing technical risks associated with the projects;
and
(4) developing and commercializing new commercial products
and processes resulting from the projects.
(b) Vendor Selection.--
(1) In general.--An SBIR agency or STTR agency may select a
vendor to assist small business concerns in meeting the goals
listed in subsection (a) for a term not to exceed 5 years.
(2) Competition.--Selection of a vendor shall be competitive
and shall use merit-based criteria.
(c) Additional Technical Assistance.--
(1) In general.--An SBIR agency or STTR agency may--
(A) provide to a phase I or phase II SBIR award or
STTR award recipient, through a vendor selected under
subsection (b), the services described in subsection
(a) in an amount equal to not more than $5,000 per
year; or
(B) authorize a phase I or phase II SBIR award or
STTR award recipient to purchase the services described
in subsection (a) in an amount equal to not more than
$5,000 per year, which shall be in addition to the
amount of the recipient's award.
(2) Flexibility.--In carrying out paragraph (1), an SBIR
agency or STTR agency shall provide the allowable amounts to a
recipient that meets the eligibility requirements under the
paragraph if the recipient requests to seek technical
assistance from an individual or entity other than the vendor
selected under subsection (b) by the SBIR agency or STTR
agency.
(3) Limitation.--An SBIR agency or STTR agency shall not--
(A) use the amounts authorized under paragraph (1)
unless the vendor selected under subsection (b)
provides the technical assistance to the recipient; or
(B) enter a contract with a vendor under subsection
(b) under which the amount provided for technical
assistance is based on the total number of phase I or
phase II awards.
Sec. 263314. Commercialization readiness programs
(a) Department of Defense and Military Departments.--
(1) In general.--The Secretary of Defense or Secretary of a
military department may create and administer a
commercialization readiness program to accelerate the
transition of technologies, products, and services developed
under the SBIR program or STTR program of the Department of
Defense or of the military department to phase III, including
the acquisition process.
(2) Identification of research programs for accelerated
transition to acquisition process.--In carrying out a
commercialization readiness program, the Secretary of Defense
or Secretary of a military department shall identify research
programs of an SBIR program or STTR program that have the
potential for rapid transitioning to phase III and into the
acquisition process.
(3) Limitation.--A research program of a military department
shall not be identified under paragraph (2) unless the
Secretary of the military department certifies in writing that
the successful transition of the research program to phase III
and into the acquisition process is expected to meet high
priority military requirements of the military department.
(4) Funding.--
(A) In general.--The Secretary of Defense or the
Secretary of a military department may use not more
than an amount equal to 1 percent of the funds
available to the Department of Defense or the military
department pursuant to the SBIR program for payment of
expenses incurred to administer the commercialization
readiness program under this subsection.
(B) No use of funds for phase iii awards.--Funds
described in subparagraph (A) shall not be used to make
phase III awards.
(C) Inapplicability of limitations after fiscal year
2015.--After fiscal year 2015, funds described in
subparagraph (A) shall not be subject to the
limitations on the use of funds in section 263101(b) of
this title.
(5) Insertion incentives.--For any contract with a value of
not less than $100,000,000, the Secretary of Defense may--
(A) establish goals for the transition of phase III
technologies in subcontracting plans; and
(B) require a prime contractor on the contract to
report the number and dollar amount of contracts
entered into by that prime contractor for phase III
SBIR projects or STTR projects.
(6) Goal for sbir and sttr technology insertion.--The
Secretary of Defense shall--
(A) set a goal to increase the number of phase II
SBIR contracts and the number of phase II STTR
contracts awarded by the Secretary that lead to
technology transition into programs of record or
fielded systems;
(B) use incentives in effect on December 31, 2011, or
create new incentives, to encourage agency program
managers and prime contractors to meet the goal under
subparagraph (A); and
(C) submit to the Administrator--
(i) the number and percentage of phase II
SBIR and STTR contracts awarded by the
Secretary that led to technology transition
into programs of record or fielded systems;
(ii) information on the status of each
project that received funding through the
commercialization readiness program and efforts
to transition those projects into programs of
record or fielded systems; and
(iii) a description of each incentive that
has been used by the Secretary under
subparagraph (B) and the effectiveness of that
incentive with respect to meeting the goal
under subparagraph (A).
(7) Effect of subsection.--The authority to create and
administer a commercialization readiness program under this
subsection shall not be construed to eliminate or replace any
other part of the SBIR program or STTR program that enhances
the insertion or transition of SBIR or STTR technologies.
(b) Federal Agencies Other than the Department of Defense.--
(1) In general.--On approval of an application under
paragraph (2), the head of an SBIR participating agency or STTR
participating agency other than the Department of Defense may
establish a pilot program under which the agency head may
allocate not more than 10 percent of the funds allocated to the
SBIR program or STTR program of the SBIR participating agency
or STTR participating agency--
(A) for awards for technology development, testing,
evaluation, and commercialization assistance for SBIR
or STTR phase II technologies; or
(B) to support the progress of research, research and
development, and commercialization conducted under the
SBIR program or STTR program to phase III.
(2) Application.--
(A) Submission.--The head of an SBIR participating
agency or STTR participating agency may establish a
pilot program under paragraph (1) if the agency head,
not later than 90 days before the 1st day of the fiscal
year in which the pilot program is to be established,
submits to the Administrator a written application that
describes a compelling reason, including unusually high
regulatory, systems integration, or other costs
relating to development or manufacturing of
identifiable, highly promising small business
technologies or a class of small business technologies
expected to substantially advance the mission of the
Federal agency, why additional investment in SBIR or
STTR technologies is necessary.
(B) Determination.--The Administrator shall--
(i) make a determination whether to approve
an application under subparagraph (A) not later
than 30 days before the first day of the fiscal
year for which the application is submitted;
(ii) publish the determination in the Federal
Register; and
(iii) make a copy of the determination and
any related materials available to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business and Committee on
Science, Space, and Technology of the House of
Representatives.
(3) Consideration of likelihood of domestic manufacture.--In
making an award under this subsection, an agency head shall
consider whether the technology to be supported by the award is
likely to be manufactured in the United States.
(4) Maximum amount of award.--An agency head shall not make
an award under the pilot program under paragraph (1) in excess
of the amount that is equal to 3 times the dollar amounts
generally established for phase II awards under subsection
section 263104(b)(10) or 263203(c)(2)(I) of this title.
(5) Registration.--The recipient an award under a pilot
program under paragraph (1) shall register with the
Administrator in a registry that is available to the public.
(6) Report.--The head of a Federal agency that carries out a
pilot program under paragraph (1) shall include in the annual
report of the Federal agency to the Administrator--
(A) an analysis of the various activities considered
for inclusion in the pilot program; and
(B) a statement of the reasons why each activity
considered was included or not included, as the case
may be.
(7) Termination of authority.--The authority to establish a
pilot program under this subsection expires at the end of
fiscal year 2017.
Sec. 263315. Timing of release of funding
An SBIR participating agency or STTR participating agency shall, to
the extent possible, attempt to shorten the amount of time between the
provision of notice of an award under the SBIR program or STTR program
and the subsequent release of funding under the award.
Sec. 263316. Reporting on timing of final decisions on proposals and
releases of funding
An SBIR participating agency or STTR participating agency shall
provide the Administrator--
(1) the average length of time that the SBIR participating
agency or STTR participating agency takes to make a final
decision on proposals submitted under the SBIR program or STTR
program;
(2) the average length of time that the SBIR participating
agency or STTR participating agency takes to release funding
under an award under the SBIR program or STTR program; and
(3) the goals established to reduce those lengths of time.
Sec. 263317. Release of contact information to economic development
organizations
(a) Consent of Small Business Concern.--An SBIR agency or STTR agency
shall provide a means by which a small business concern that is an SBIR
applicant or an STTR applicant may indicate to the SBIR agency or STTR
agency whether the SBIR agency or STTR agency has the consent of the
small business concern to--
(1) identify the small business concern to appropriate local
and State economic development organizations as an SBIR
applicant or an STTR applicant; and
(2) release the contact information of the small business
concern to the economic development organizations.
(b) Rules.--The Administrator shall issue rules to implement this
section. The rules shall include a requirement that an SBIR agency or
STTR agency include in the SBIR or STTR application a provision under
which an applicant may indicate consent for purposes of subsection (a).
Sec. 263318. Prevention of fraud, waste, and abuse
(a) In General.--The SBIR policy directives under section 263104 of
this title and the STTR policy directive under section 263203 of this
title shall include measures to prevent fraud, waste, and abuse in the
SBIR program and STTR program.
(b) Contents.--The measures required under subsection (a) include--
(1) definitions or descriptions of fraud, waste, and abuse;
(2) guidelines for the monitoring and oversight of applicants
to and recipients of awards under the SBIR program or STTR
program;
(3) a requirement that an SBIR participating agency or STTR
participating agency include information concerning the method
established by the Inspector General of the SBIR participating
agency or STTR participating agency to report fraud, waste, and
abuse (including any telephone hotline or web-based platform)--
(A) on the website of the SBIR participating agency
or STTR participating agency; and
(B) in any solicitation or notice of funding
opportunity issued by the SBIR participating agency or
STTR participating agency for the SBIR program or STTR
program; and
(4) a requirement that an applicant for and a small business
concern that receives funding under the SBIR program or STTR
program shall certify whether the applicant or small business
concern is in compliance with the laws relating to the SBIR
program and the STTR program and the conduct guidelines
established under the SBIR policy directives and the STTR
policy directive.
(c) Procedures and Requirements for Certification.--
(1) In general.--In consultation with the Council of
Inspectors General on Integrity and Efficiency, and after
providing notice and an opportunity for public comment, the
Administrator shall develop procedures and requirements for a
certification under subsection (b)(4).
(2) Contents.--The form of certification developed under
paragraph (1) may--
(A) cover the lifecycle of an award to require
certifications at the application, funding, reporting,
and closeout phases of every SBIR award and STTR award;
(B) require the small business concern to certify
compliance with the principal investor primary
employment requirement, the small business concern
definition requirement, and the performance of work
requirements as set forth in the directive applicable
to the award;
(C) require a small business concern to disclose
whether the small business concern has applied for, has
plans to apply for, or has received an SBIR award or
STTR award for identical or essentially equivalent work
(as defined under the SBIR policy directives and the
STTR policy directive), and require the small business
concern to certify that the award that the small
business concern is applying for or obtaining funding
for is not identical or essentially equivalent to work
that the small business concern has performed, or will
perform, in connection with any other SBIR award or
STTR award that the small business concern has applied
for or has received from any other agency except as
fully disclosed to all funding agencies; and
(D) require that the small business concern certify
that the small business concern will perform or did
perform the work on the award at its facilities with
its employees, unless otherwise indicated.
(d) Inspectors General.--The Inspector General of a participating
SBIR agency or participating SBIR agency shall cooperate to prevent
fraud, waste, and abuse in the SBIR program and STTR program by--
(1) establishing fraud detection indicators;
(2) reviewing regulations and operating procedures of the
participating SBIR agency or participating SBIR agency;
(3) coordinating information sharing between Federal
agencies, to the extent otherwise permitted under Federal law;
and
(4) improving the education and training of and outreach to--
(A) administrators of the SBIR program and the STTR
program of the participating SBIR agency or
participating SBIR agency;
(B) applicants to the SBIR program or STTR program;
and
(C) recipients of awards under the SBIR program or
STTR program.
Sec. 263319. Competitive selection procedures
All funds awarded, appropriated, or otherwise made available in
accordance with section 263101 or 263201 of this title shall be awarded
pursuant to competitive and merit-based selection procedures.
Sec. 263320. Limitation on pilot programs
(a) Definition of Covered Pilot Program.--In this section, the term
``covered pilot program'' means an initiative, project, innovation, or
other activity that--
(1) is established by the Administrator;
(2) relates to an SBIR program or STTR program; and
(3) is not specifically authorized by law.
(b) Pilot Programs In Operation on December 31, 2011.--The
Administrator may carry out a covered pilot program that is in
operation on December 31, 2011, only until December 31, 2014.
(c) Pilot Programs Established After December 31, 2011.--The
Administrator may carry out a covered pilot program established after
December 31, 2011--
(1) only for a period of 3 years period beginning on the date
on which the covered pilot program is established; and
(2) if the covered pilot program does not continue and is not
based on, in any manner, a previously established covered pilot
program.
Sec. 263321. Minimum standards for participation
(a) Progress to Phase II Success.--
(1) Establishment of system and minimum commercialization
rate.--The head of an SBIR participating agency or STTR
participating agency shall--
(A) establish a system to measure, where appropriate,
the success of small business concerns with respect to
the receipt of phase II SBIR awards or STTR awards for
projects that have received phase I SBIR awards or STTR
awards;
(B) establish a minimum performance standard for
small business concerns with respect to the receipt of
phase II SBIR awards or STTR awards for projects that
have received phase I SBIR awards or STTR awards; and
(C) begin evaluating, each fiscal year, whether each
small business concern that received a phase I SBIR
award or STTR award from the SBIR participating agency
or STTR participating agency meets the minimum
performance standard established under subparagraph
(B).
(2) Consequence of failure to meet minimum commercialization
rate.--If the head of an SBIR participating agency or STTR
participating agency determines that a small business concern
that received a phase I SBIR award or STTR award from the SBIR
participating agency or STTR participating agency is not
meeting the minimum performance standard established under
paragraph (1)(B), the small business concern shall not
participate in phase I (or phase II if under the authority of
section 263108 of this title) of the SBIR program or STTR
program of the SBIR participating agency or STTR participating
agency during the 1-year period beginning on the date on which
the determination is made.
(b) Progress to Phase III Success.--
(1) Establishment of system and minimum commercialization
rate.--Not later than December 31, 2013, the head of an SBIR
participating agency or STTR participating agency shall--
(A) establish a system to measure, where appropriate,
the success of small business concerns with respect to
the receipt of phase III SBIR awards or STTR awards for
projects that have received phase I SBIR awards or STTR
awards;
(B) establish a minimum performance standard for
small business concerns with respect to the receipt of
phase III SBIR awards or STTR awards for projects that
have received phase I SBIR awards or STTR awards; and
(C) begin evaluating, each fiscal year, whether each
small business concern that received a phase I SBIR
award or STTR award from SBIR participating agency or
STTR participating agency meets the minimum performance
standard established under subparagraph (B).
(2) Consequence of failure to meet minimum commercialization
rate.--If the head of an SBIR participating agency or STTR
participating agency determines that a small business concern
that received a phase I SBIR award or STTR award from the SBIR
participating agency or STTR participating agency is not
meeting the minimum performance standard established under
paragraph (1)(B), the small business concern shall not
participate in phase I (or phase II if under the authority of
section 263108 of this title) of the SBIR program or STTR
program of the SBIR participating agency or STTR participating
agency during the 1-year period beginning on the date on which
the determination is made.
(c) SBA oversight.--
(1) Approval and publication of systems and minimum
performance standards.--A system and minimum performance
standard established under subsection (a) or (b) shall be
submitted to the Administrator by the head of an SBIR
participating agency or STTR participating agency and shall be
subject to the approval of the Administrator. In making a
determination with respect to approval, the Administrator shall
ensure that the minimum performance standard exceeds a de
minimis level. The Administrator shall publish on the SBA
website the systems and minimum performance standards approved.
(2) Submission of evaluation results by agency.--The head of
an SBIR participating agency or STTR participating agency shall
submit to the Administrator the results of each evaluation
conducted under subsection (a) or (b).
(d) Notice and Comment.--At least 60 days before becoming effective,
a system and minimum performance standard established under subsection
(a) or (b) and an approval provided by the Administrator under
subsection (c)(1) shall be preceded by the provision of notice of and
an opportunity for public comment on the system, standard, or approval.
Sec. 263322. Publication of information relating to notice of and
application for SBIR awards and STTR awards
To increase the number of small business concerns that receive awards
under the SBIR or STTR programs of SBIR participating agencies and STTR
participating agencies, and to simplify the application process for
SBIR awards and STTR awards, the Administrator shall maintain a website
on which the Administrator shall publish such information relating to
notice of and application for awards under the SBIR program and STTR
program of each SBIR participating agency and STTR participating agency
as the Administrator determines to be appropriate.
Division J--Small Business Development Center Program
Chapter 271--Small Business Development Center Program
Sec.
271101. Definitions.
271102. Financial assistance agreements.
271103. Plans.
271104. Services.
271105. Export enhancement plans.
271106. Assistance from Federal laboratories.
271107. Assistance from the National Science Foundation.
271108. Assistance from the National Aeronautics and Space
Administration.
271109. National Small Business Development Center Advisory Board.
271110. Small business development center advisory boards.
271111. Program examination and accreditation.
271112. Limitations on authority.
271113. Prohibition of fees for counseling service.
271114. Veterans assistance and services program.
271115. Grants for small business development centers
Sec. 271101. Definitions
In this chapter:
(1) Associate administrator.--The term ``Associate
Administrator'' means the Associate Administrator for Small
Business Development Centers.
(2) Financial assistance.--The term ``financial assistance''
means financial assistance under a grant, contract, or
cooperative agreement.
(3) Financial assistance agreement.--The term ``financial
assistance agreement'' means a grant agreement, contract, or
cooperative agreement under which financial assistance is
provided under this chapter.
(4) Program.--The term ``program'' means the small business
development center program under this chapter.
(5) Qualified entity.--The term ``qualified entity'' means--
(A) a public or private institution of higher
education (including a land-grant college or
university, a college or school of business,
engineering, commerce, or agriculture, and a community
college or junior college);
(B) a women's business center; and
(C) any other entity if the entity, on December 31,
1990, was receiving a grant or was a party to a
contract or cooperative agreement under this chapter.
(6) State.--The term ``State'' means a State, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, and American
Samoa.
Sec. 271102. Financial assistance agreements
(a) In General.--Under a program to be known as the small business
development center program, the Administrator may provide financial
assistance to a qualified entity to assist in establishing a small
business development center project for the purpose of providing--
(1) a small business oriented employment or natural resources
development program;
(2) studies, research, and counseling concerning the
managing, financing, and operation of small business concerns;
(3) management and technical assistance regarding
participation by small business concerns in international
markets, export promotion, and technology transfer;
(4) delivery or distribution of services and information in
connection with an activity described in paragraph (1), (2), or
(3);
(5) access to business analysts that can refer small business
concerns to available experts; and
(6) to the extent practicable, assistance in furtherance of
the Small Business Development Center Cyber Strategy developed
under section 1841(a) of the National Defense Authorization Act
for Fiscal Year 2017 (Public Law 114-328, 130 Stat. 2662).
(b) Requirements.--The Administrator shall require an applicant for
financial assistance under this chapter with performance commencing on
or after January 1, 1992, to--
(1) have its own budget; and
(2) primarily use institutions of higher education and
women's business centers to provide services to the small
business community.
(c) Term.--The term of a financial assistance agreement shall be made
on a calendar year or Federal fiscal year basis.
(d) Cooperation To Provide International Trading Services.--
(1) Information and services.--A small business development
center shall work in close cooperation with SBA regional
offices and SBA district offices, the Department of Commerce,
appropriate Federal, State, and local agencies (including State
trade agencies), and the small business community to serve as
an active information dissemination and service delivery
mechanism for existing trade promotion, trade finance, trade
adjustment, trade remedy, and trade data collection programs of
particular utility for small business concerns.
(2) Cooperation with state trade agencies and export
assistance centers.--A small business development center that
counsels a small business concern on issues relating to
international trade shall--
(A) consult with State trade agencies and export
assistance centers to provide appropriate services to
the small business concern; and
(B) as necessary, refer the small business concern to
a State trade agency or export assistance center for
further counseling or assistance.
(e) Management.--
(1) In general.--The program shall be under the general
management and oversight of the Administrator for the delivery
of programs and services to the small business community.
(2) Programs and services.--Programs and services referred to
in paragraph (1) shall be jointly developed, negotiated, and
agreed on, with full participation of a qualified entity and
the Administrator, under an executed financial assistance
agreement between the qualified entity and the Administrator.
(f) Association of Small Business Development Centers.--
(1) In general.--Small business development centers may form
an Association to pursue matters of common concern.
(2) Recognition; documents.--
(A) In general.--If more than a majority of the small
business development centers that are operating under
agreements with the Administrator are members of an
Association formed under paragraph (1), the
Administrator shall--
(i) recognize the existence and activities of
the Association; and
(ii) consult with the Association and develop
documents--
(I) announcing the annual scope of
activities under this chapter;
(II) requesting proposals to deliver
assistance as provided in this chapter;
and
(III) governing the general
operations and administration of the
program, specifically including the
development of regulations and a
uniform negotiated financial assistance
agreement for use on an annual basis
when entering into individual
negotiated financial assistance
agreements with small business
development centers.
(B) Incorporation of certain provisions.--In
regulations under subparagraph (A)(ii)((III),
provisions governing audits, cost principles and
administrative requirements for financial assistance
that are included in uniform requirements of Office of
Management and Budget Circulars shall be incorporated
by reference and shall not be set forth in summary or
other form.
(3) Leveraging of resources.--On an annual basis, a small
business development center 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.
(g) Funding.--
(1) Matching amount.--
(A) In general.--The Administrator shall require as a
condition of any financial assistance agreement (or
amendment or modification of a financial assistance
agreement) made to a qualified entity under this
chapter that a matching amount (excluding any fees
collected from recipients of such assistance) equal to
the amount of the financial assistance be provided from
sources other than the Federal Government, to be
comprised of not less than 50 percent cash and not more
than 50 percent of indirect costs and in-kind
contributions.
(B) Restriction.--The matching amount described in
subparagraph (A) shall not include any indirect costs
or in-kind contributions derived from any Federal
program.
(2) Funding formula.--
(A) In general.--Subject to subparagraph (C), the
total amount of financial assistance received by
recipients of financial assistance in a State under
this section shall be equal to an amount determined in
accordance with the following formula:
(i) Pro rata basis.--The annual amount made
available under section 109103(a) of this title
for the small business development center
program, less any reductions made for expenses
authorized by subparagraph (E), shall be
divided on a pro rata basis, based on the
percentage of the population of each State, as
compared with the population of the United
States.
(ii) Minimum funding level.--If the pro rata
amount calculated under clause (i) for any
State is less than the minimum funding level
under subparagraph (C), the Administrator shall
determine the aggregate amount necessary to
achieve that minimum funding level for each
such State.
(iii) Deduction.--The aggregate amount
calculated under clause (ii) shall be deducted
from the amount calculated under clause (i) 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 with
the total population of all such States.
(iv) Addition.--The aggregate amount deducted
under clause (iii) shall be added to the amount
of financial assistance of the 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 financial assistance to
any State shall not be reduced to an amount
below the minimum funding level.
(B) Determination of amount of financial
assistance.--The amount of financial assistance for
which a State is eligible to apply under this paragraph
shall be the amount determined under subparagraph (A),
subject to any modifications required under
subparagraph (C), and shall be based on the amount
available for the fiscal year in which performance of
the financial assistance agreement commences, but not
including amounts distributed in accordance with
subparagraph (D). The total amount of financial
assistance received by recipients of financial
assistance in a State under any provision of this
paragraph shall not exceed the amount of matching funds
from sources other than the Federal Government, as
required under paragraph (1).
(C) 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 chapter, as follows:
(i) Not less than $81,500,000 and not more
than $90,000,000 made available.--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.
(ii) Less than $81,500,000 made available.--
If the amount made available is less than
$81,500,000, the minimum funding level shall be
the remainder of $500,000 minus a percentage of
$500,000 equal to the percentage amount by
which the amount made available is less than
$81,500,000.
(iii) More than $90,000,000 made available.--
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.
(D) Distributions.--Subject to subparagraph (C), if
qualified entities in any State do not apply for, or
use the full funding eligibility for the State for a
fiscal year, the Administrator shall distribute the
remaining funds as follows:
(i) Amount less than the amount received in
fiscal year 2000.--If the amount of financial
assistance to any State is less than the amount
received by recipients of financial assistance
in that State in fiscal year 2000, the
Administrator shall distribute the remaining
funds, on a pro rata basis, based on the
percentage of shortage of each such State, as
compared with the total amount of such
remaining funds available, to the extent
necessary to increase the amount of the
financial assistance to the amount received by
recipients of financial assistance in that
State in fiscal year 2000, or until such funds
are exhausted, whichever occurs first.
(ii) Remaining amount.--If any funds remain
after application of clause (i), the remaining
amount may be distributed as supplemental
financial assistance to applicants in any
State, as the Administrator determines, in the
discretion of the Administrator, to be
appropriate, after consultation with the
Association.
(E) Use of amounts.--
(i) In general.--Of the amounts made
available in any fiscal year to carry out this
chapter--
(I) not more than $500,000 may be
used by the Administrator to pay
expenses described in paragraphs (2) to
(4) of section 109103(a) of this title;
and
(II) not more than $500,000 may be
used by the Administrator to pay the
examination expenses described in
section 109103(a)(5) of this title.
(ii) Limitation.--No funds described in
clause (i) may be used for examination expenses
under section 109103(a)(5) of this title if the
use would reduce the amount of financial
assistance made available under subparagraph
(A)(i) to less than $85,000,000 (after
excluding any amounts provided in
appropriations Acts, or accompanying report
language, for specific institutions or for
purposes other than the general program) or
would further reduce the amount of such
financial assistance below that amount.
(F) Exclusions.--Financial assistance provided to
grant recipients in a State by the Administrator or
another Federal agency to carry out subsection (j) or
section 271104(b)(7) of this title, or for supplemental
financial assistance under subparagraph (D)(ii) of this
paragraph, shall not be included in the calculation of
maximum funding for a State under subparagraph (B) of
this paragraph.
(h) Portable Assistance for Startup and Sustainability Non-Matching
Financial Assistance Programs.--
(1) In general.--From the funds appropriated under section
109103(h) of this title, the Administrator shall reserve not
less than $1,000,000 for each fiscal year to develop portable
assistance for startup and sustainability non-matching
financial assistance programs to be conducted by eligible small
business development centers in communities that are
economically challenged as a result of a business or government
facility downsizing or closing that has resulted in the loss of
jobs or small business instability.
(2) Maximum amount.--Non-matching financial assistance under
this subsection shall not exceed $100,000.
(3) Use.--Non-matching financial assistance under this
subsection shall be used for small business development center
personnel expenses and related small business programs and
services.
(i) Federal Contracts With Small Business Development Centers.--
(1) In general.--Subject to paragraph (2), a small business
development center may enter into a contract with a Federal
agency to provide specific assistance to small business
concerns.
(2) Contract prerequisites.--
(A) In general.--Before bidding on a contract under
paragraph (1), a small business development center
shall receive approval from the Associate Administrator
of the subject and general scope of the contract.
(B) Approval.--Approval of a contract under paragraph
(1) shall be based on a determination that--
(i) the contract will provide assistance to
small business concerns; and
(ii) performance of the contract will not
hinder the small business development center in
carrying out the terms of the financial
assistance agreement received by the small
business development center from the
Administrator.
(3) Exemption from matching requirement.--A contract under
this subsection shall not be subject to the matching funds or
eligibility requirements of subsection (g).
(4) Inapplicability to certain contracting goals.--
Notwithstanding any other provision of law, a contract for
assistance under this subsection shall not be applied to a
Federal agency's contracting goal under section 251106 of this
title for small business concerns owned and controlled by
socially and economically disadvantaged individuals, small
business concerns owned and controlled by women, or other small
business concerns.
(j) Additional Financial Assistance.--
(1) In general.--A qualified entity that is funded by the
Administrator as a small business development center may apply
to the Administrator for additional financial assistance to be
used solely to assist, as provided in paragraphs (2) to (7) of
section 271104(b), in--
(A) the development and enhancement of exports by
small business concerns;
(B) technology transfer; and
(C) 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.
(2) Compliance requirement.--An applicant applying for
additional financial assistance under paragraph (1) shall
comply with all of the provisions of this chapter, including
providing matching funds.
(3) Funding.--Funding under this subsection shall be
effective for any fiscal year to the extent provided in advance
in appropriations Acts.
(4) Limitation on amount of grant.--No recipient of funds
under this subsection shall receive financial assistance that
would exceed its pro rata share of a $15,000,000 program based
on the populations to be served by the small business
development center as compared with the total population of the
United States.
(5) Minimum state eligibility amount.--The minimum amount of
eligibility for recipients of financial assistance in any State
shall be $100,000.
(6) Financial assistance to nonprofit entities.--
(A) In general.--In a State described in subparagraph
(B), the Administrator may provide financial assistance
to a nonprofit entity in the State to carry out the
activities specified in this subsection.
(B) States.--A State referred to in subparagraph (A)
is a State in which--
(i) the Administrator has not provided
financial assistance under subsection (a); or
(ii) no application for financial assistance
has been made by a small business development
center under this subsection within 60 days
after the later of--
(I) the effective date of a financial
assistance agreement under subsection
(a) to the small business development
center; or
(II) the date on which the
Administrator notifies the financial
assistance recipient funded under
subsection (a) that funds are available
for applications for financial
assistance under this subsection.
(C) Matching funds.--A nonprofit entity that receives
financial assistance under this paragraph shall comply
with the matching funds requirement of subsection (g).
(D) Appropriations.--Financial assistance under this
paragraph shall be effective for any fiscal year only
to the extent provided in advance in an appropriations
Act.
(E) Pro rata share.--The amount of financial
assistance provided under this paragraph in a State
shall be limited to the pro rata share provisions of
paragraph (4).
(k) Privacy Requirements.--
(1) In general.--A small business development center,
consortium of small business development centers, or contractor
or agent of a small business development center may not
disclose the name, address, or telephone number of any
individual or small business concern receiving assistance under
this chapter without the consent of the individual or small
business concern unless--
(A) the Administrator is ordered to make such a
disclosure by a court in any civil or criminal
enforcement action initiated by a Federal agency or
State agency; or
(B) the Administrator considers such a disclosure to
be necessary for the purpose of conducting a financial
audit of a small business development center.
(2) Limitation.--A disclosure under this paragraph (1)(B)
shall be limited to the information necessary for an audit.
(3) Use of information by the administrator.--This chapter
does not--
(A) restrict access by the Administrator to program
activity data; or
(B) preclude the Administrator from using client
information to conduct client surveys.
(4) Regulations.--
(A) In general.--The Administrator shall issue
regulations to establish standards--
(i) for disclosures with respect to financial
audits under paragraph (1)(B); and
(ii) for client surveys under paragraph
(3)(B), including standards for oversight of
such surveys and for dissemination and use of
client information.
(B) Maximum privacy protection.--Regulations under
this paragraph, shall, to the extent practicable,
provide for the maximum amount of privacy protection.
(C) Inspector general.--Until the effective date of
regulations under this paragraph, any client survey and
the use of such information shall be approved by the
Inspector General of SBA, who shall include such
approval in a semiannual report.
(l) Cybersecurity Assistance.--
(1) Definitions.--In this subsection, the terms
``cybersecurity risk'' and ``cyber threat indicator'' have the
meanings given those terms under section 227(a) of the Homeland
Security Act of 2002 (6 U.S.C. 148(a)).
(2) Leveraging small business development centers.--The
Department of Homeland Security, and any other Federal
department or agency in coordination with the Department of
Homeland Security, may leverage small business development
centers to provide assistance to small business concerns by
disseminating information relating to cybersecurity risks and
other homeland security matters to help small business concerns
in developing or enhancing cybersecurity infrastructure,
awareness of cyber threat indicators, and cyber training
programs for employees.
Sec. 271103. Plans
(a) Provision of Financial Assistance Consistent With Area Plan.--
Financial assistance shall not be made available to a qualified entity
if approving the assistance would be inconsistent with a plan for the
area of a State in which service is to be provided that has been
adopted by an agency recognized by the State as authorized to adopt an
area plan and approved by the Administrator in accordance with
standards and requirements established under this chapter.
(b) Plan.--
(1) In general.--A qualified entity may apply to participate
in the small business development center program by submitting
to the Administrator for approval a plan that--
(A) identifies the entities authorized under this
chapter to participate in the small business
development center program;
(B) identifies the geographic area to be served;
(C) describes the services that the applicant would
provide and the method for delivering the services;
(D) includes a budget; and
(E) includes any other information and assurances
that the Administrator may require to ensure that the
qualified entity will carry out the activities eligible
for assistance.
(2) Action by the administrator.--
(A) In general.--The Administrator may approve,
conditionally approve, or reject a qualified entity
plan or combination of plans submitted.
(B) Review.--In all cases, the Administrator shall
review a qualified entity plan--
(i) for conformity with an area plan approved
under subsection (a); and
(ii) with a view toward providing small
business concerns with the most comprehensive
and coordinated assistance in the State or part
of a State to be served.
(c) Assistance Outside the State.--
(1) In general.--The Administrator may permit a small
business development center to provide advice, information, and
assistance, as described in section 271104 of this title, to
small business concerns located outside the State in which the
small business development center is located, but only to the
extent that the small business concerns are located within
close geographical proximity to the small business development
center, as determined by the Administrator.
(2) Disaster recovery assistance.--
(A) In general.--The Administrator may authorize a
small business development center to provide advice,
information, and assistance, as described in section
271104 of this title, to a small business concern
located outside the State, without regard to geographic
proximity to the small business development center, if
the small business concern is located in an area for
which the President declares a major disaster.
(B) Term.--
(i) In general.--A small business development
center may provide advice, information, and
assistance to a small business concern under
clause (i) for a period of not more than 2
years after the date on which the President
declares a major disaster for the area in which
the small business concern is located.
(ii) Extension.--The Administrator may extend
the period described in clause (i).
(C) Continuity of services.--A small business
development center that provides counselors to an area
described in subparagraph (A) shall, to the maximum
extent practicable, ensure continuity of services in
any State in which the small business development
center otherwise provides services.
(D) Access to disaster recovery facilities.--For
purposes of this paragraph, the Administrator shall, to
the maximum extent practicable, permit the personnel of
a small business development center to use any site or
facility designated by the Administrator for use to
provide disaster recovery assistance.
Sec. 271104. Services
(a) In General.--A small business development center--
(1) 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; and
(2) may assist small business concerns by providing, as
appropriate, education on the requirements applicable to small
businesses under the regulations prescribed under section 38 of
the Arms Export Control Act (22 U.S.C. 2778) and on compliance
with those requirements.
(b) Services To Be Provided.--Services provided by a small business
development center shall include--
(1) furnishing one-to-one individual counseling to small
business concerns, including--
(A) working with individuals to increase awareness of
basic credit practices and credit requirements;
(B) working with individuals to develop business
plans, financial packages, credit applications, and
contract proposals;
(C) working with the Administrator to develop and
provide informational tools for use in working with
individuals on pre-business startup planning, existing
business expansion, and export planning; and
(D) working with individuals referred by the local
SBA offices and participating lenders;
(2) assisting in technology transfer, research and
development (including applied research), and coupling from
existing sources to small business concerns, including--
(A) working to increase the access of small business
concerns to the capabilities of automated flexible
manufacturing systems;
(B) 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
(C) exploring the viability of developing shared
production facilities, under appropriate circumstances;
(3)(A) in cooperation with the Department of Commerce and
other relevant Federal agencies, actively assisting small
business concerns in exporting by--
(i) identifying and developing potential export
markets for small business concerns;
(ii) facilitating export transactions for small
business concerns;
(iii) developing linkages between small business
concerns and prescreened foreign buyers;
(iv) assisting small business concerns in
participating in international trade shows;
(v) assisting small business concerns in obtaining
export financing; and
(vi) facilitating the development or reorientation of
marketing and production strategies; and
(B) where appropriate, working with the Administrator in
cooperation with the State to establish a State international
trade center for the purposes described in subparagraph (A);
(4)(A) developing a program in conjunction with the Export-
Import Bank of the United States and local and regional SBA
offices that will enable the small business development center
to serve as an information network and to assist small business
concern applicants for financing programs of the Export-Import
Bank of the United States; and
(B) otherwise identifying and helping to make available
export financing programs to small business concerns;
(5) 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;
(6) cooperating with the Department of Commerce and other
relevant Federal agencies to increase access to available
export market information systems, including the Commercial
Information Management System;
(7) assisting small business concerns in developing and
implementing 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 small business concerns' business base
due to the actual or projected termination (or reduction) of a
Department of Defense program or a contract in support of a
Department of Defense program by--
(A) 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 the facility or to the military and civilian
personnel stationed or working at the facility;
and
(ii) the termination (or reduction) of a
Department of Defense program (or contracts
under a Department of Defense program) on the
small business concerns participating in the
program as a prime contractor, subcontractor at
any tier, or supplier at any tier;
(B) developing, in conjunction with appropriate
Federal, State, and local governmental entities and
private sector organizations, the parameters of a
transition adjustment program adaptable to the needs of
individual small business concerns;
(C) conducting appropriate programs to inform the
affected small business community regarding the
anticipated adverse impacts identified under
subparagraph (A) and the economic adjustment assistance
available to small business concerns; and
(D) assisting small business concerns in developing
and implementing an individualized transition business
plan;
(8)(A) maintaining current information concerning Federal,
State, and local regulations that affect small business
concerns and counsel small business concerns on methods of
compliance; and
(B) providing counseling and technology development when
necessary to help small business concerns find solutions for
complying with environmental, energy, health, safety, and other
Federal, State, and local regulations;
(9) coordinating and conducting research into technical and
general small business problems for which there are no ready
solutions;
(10) providing and maintaining a comprehensive library that
contains current information and statistical data needed by
small business concerns;
(11) 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 associates to help
address the various needs of the small business community;
(12) conducting in-depth surveys for local small business
groups to develop general information regarding the local
economy and general small business strengths and weaknesses in
the locality;
(13) in cooperation with the Department of Commerce, the
Administrator, and relevant Federal agencies, actively
assisting rural small business concerns in exporting by--
(A) identifying and developing potential export
markets for rural small business concerns;
(B) facilitating export transactions for rural small
business concerns;
(C) developing linkages between rural small business
concerns and prescreened foreign buyers;
(D) assisting rural small business concerns in
participating in international trade shows; and
(E) assisting rural small business concerns in
obtaining export financing and developing marketing and
production strategies;
(14) assisting rural small business concerns in developing
marketing and production strategies that will enable rural
small business concerns to better compete in the domestic
market;
(15) assisting rural small business concerns by--
(A) providing technical assistance needed by rural
small business concerns;
(B) making available managerial assistance to rural
small business concerns; and
(C) providing information and assistance in obtaining
financing for business startups and expansion;
(16) in conjunction with the United States National Tourism
Organization, assist rural small business concerns in
developing the tourism potential of rural communities by--
(A) identifying the cultural, historic, recreational,
and scenic resources of rural communities;
(B) providing assistance to small business concerns
in developing tourism marketing and promotion plans
relating to tourism in rural areas; and
(C) assisting small business concerns in obtaining
capital for starting or expanding businesses primarily
serving tourists;
(17) maintaining lists of local and regional private
consultants to whom small business concerns can be referred;
(18) providing information to small business concerns
regarding compliance with regulatory requirements;
(19) developing informational publications, establishing
resource centers of reference materials, and distributing
compliance guides published under section 212(a) of the Small
Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C.
601 note, Public Law 104-121);
(20) providing small business concern owners 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 United States Export Assistance Center
program; and
(21) providing information and assistance to small business
concerns with respect to establishing drug-free workplace
programs on or before October 1, 2006.
(c) Upgrading and Modification of Services.--A small business
development center shall continue to upgrade and modify its services,
as needed, in order to meet the changing and evolving needs of the
small business community.
(d) Location.--
(1) Proximity of service.--A small business development
center shall provide service as close as possible to small
business concerns by providing extension services and using
satellite locations when necessary.
(2) Facilities and staff.--The facilities and staff of a
small business development center shall be located in such
places as to provide maximum accessibility and benefits to the
small business concerns that the small business development
center is intended to serve.
(e) Other Programs.--To the extent possible, a small business
development center shall make full use of other Federal and State
government programs that are concerned with aiding small business
concerns.
(f) Staff.--A small business development center shall have a full-
time staff, including a full-time director who shall have the authority
to make expenditures under the small business development center's
budget and who shall manage the program activities.
(g) Access.--A small business development center shall have access
to--
(1) business analysts to counsel, assist, and inform small
business clients;
(2) technology transfer agents to provide state-of-art
technology to small business concerns through coupling with
national and regional technology data sources;
(3) information specialists to assist in providing
information searches and referrals to small business;
(4) part-time professional specialists to conduct research or
to provide counseling assistance whenever the need arises;
(5) laboratory facilities and adaptive engineering
facilities; and
(6) cybersecurity specialists to counsel, assist, and inform
small business concern clients, in furtherance of the Small
Business Development Center Cyber Strategy developed under
section 1841(a) of the National Defense Authorization Act for
Fiscal Year 2017 (Public Law 114-328, 130 Stat. 2662).
(h) Use of Small Business Vendors.--A small business development
center shall use and compensate as 1 of its resources qualified vendors
that are small business concerns, including private management
consultants, private consulting engineers, and private testing
laboratories, to provide services as described in this section to small
business concerns on behalf of the small business development center.
(i) Cooperation in the Provision of Services.--In performing the
services described in subsection (b), a small business development
center shall work in close cooperation with SBA regional offices and
SBA local offices, the local small business community, and appropriate
State and local agencies.
(j) Information Sharing System.--
(1) In general.--The Associate Administrator, in consultation
with the small business development centers, shall develop and
implement an information sharing system.
(2) Financial assistance.--
(A) In general.--Subject to amounts approved in
advance in appropriations Acts, the Administrator may
provide grants or enter into cooperative agreements to
1 or more small business development centers to carry
out this subsection.
(B) Duration.--Financial assistance under
subparagraph (A) shall be awarded for a period of not
more than 5 years.
(C) Matching funds.--The matching funds provisions of
section 271102 of this title shall not be applicable to
a grant or cooperative agreement under subparagraph
(A).
(3) Functions.--The information sharing system shall--
(A) allow small business development centers
participating in the small business development center
program to exchange information about their programs;
and
(B) provide information central to technology
transfer.
Sec. 271105. Export enhancement plans
(a) In General.--Where appropriate, a small business development
center shall work in conjunction with the relevant State agency and the
Department of Commerce to develop a comprehensive plan for enhancing
the export potential of small business concerns located in the State.
(b) State Office of International Trade.--An export enhancement plan
may provide for--
(1) the cofunding and staffing of a State office of
international trade within a small business development center,
using joint Federal and State funding; and
(2) any other appropriate measures directed at improving the
export performance of small business concerns in the State.
Sec. 271106. Assistance from Federal laboratories
(a) In General.--A laboratory that is operated and funded by the
Federal Government shall cooperate with the Administrator in developing
and establishing programs to support small business development centers
by--
(1) making facilities and equipment available;
(2) providing experiment station capabilities in adaptive
engineering;
(3) providing library and technical information processing
capabilities; and
(4) providing professional staff for consulting.
(b) Reimbursement.--The Administrator may reimburse a laboratory for
the provision of services described in subsection (a).
Sec. 271107. Assistance from the National Science Foundation
The National Science Foundation shall cooperate with the
Administrator and with small business development centers in developing
and establishing programs to support small business development
centers.
Sec. 271108. Assistance from the National Aeronautics and Space
Administration
The National Aeronautics and Space Administration and regional
technology transfer centers supported by the National Aeronautics and
Space Administration shall cooperate with small business development
centers participating in the small business development center program.
Sec. 271109. National Small Business Development Center Advisory Board
(a) Establishment.--There is established a National Small Business
Development Center Advisory Board (referred to in this section as the
``Board'').
(b) Membership.--
(1) In general.--The Board shall consist of 9 members
appointed from civilian life by the Administrator.
(2) Qualifications.--A member of the Board shall be a person
of outstanding qualifications known to be familiar and
sympathetic with small business needs and problems.
(3) Representation.--Not more than 3 members of the Board
shall be from universities or their affiliates, and 6 members
shall be from small business concerns or associations
representing small business concerns.
(4) Term.--A member of the Board shall serve a term of 3
years, with one-third of the members changing each year.
(c) Chairman.--The Board shall elect a chairman.
(d) Duties.--The Board shall advise, counsel, and confer with the
Associate Administrator in carrying out the duties described in this
chapter.
(e) Meetings.--The Board shall meet at least semiannually and at the
call of the Chairman of the Board.
(f) Compensation.--A member of the Board shall be entitled to be
compensated at the rate not in excess of the per diem equivalent of the
maximum rate payable under section 5376 of title 5 for each day engaged
in activities of the Board and shall be entitled to be reimbursed for
expenses as a member of the Board.
Sec. 271110. Small business development center advisory boards
(a) Establishment.--A small business development center shall
establish an advisory board.
(b) Chairman.--A small business development center advisory board
shall elect a chairman.
(c) Duties.--A small business development center advisory board shall
advise, counsel, and confer with the director of the small business
development center on all policy matters pertaining to the operation of
the small business development center, including the persons that may
be eligible to receive assistance from, and how local and regional
private consultants may participate with, the small business
development center.
Sec. 271111. Program examination and accreditation
(a) Examination.--The Administrator shall conduct a biennial
programmatic and financial examination of each small business
development center.
(b) Accreditation.--The Administrator may provide financial support,
by contract or otherwise, to the Association for the purpose of
developing a small business development center accreditation program.
(c) Extension or Renewal of Financial Agreements.--
(1) In general.--In extending or renewing a financial
assistance agreement of a small business development center,
the Administrator shall consider the results of the examination
and accreditation program conducted under subsections (a) and
(b).
(2) Accreditation requirement.--
(A) In general.--Except as provided in subparagraph
(B), the Administrator may not renew or extend a
financial assistance agreement with a small business
development center unless the small business
development center has been approved under the
accreditation program conducted under this section.
(B) Waiver.--The Associate Administrator may waive
the accreditation requirement on a showing that the
small business development center is making a good
faith effort to obtain accreditation.
Sec. 271112. Limitations on authority
(a) Appropriations.--The authority to enter into financial assistance
agreements under this chapter shall be in effect for a fiscal year only
to the extent and in such amounts as are provided in advance in
appropriations Acts.
(b) Suspension, Termination, or Failure To Renew or Extend Financial
Assistance Agreement.--After the Administrator enters into a financial
assistance agreement with a qualified entity under this chapter, the
Administrator shall not suspend, terminate, or fail to renew or extend
the financial assistance agreement unless the Administrator provides
the qualified entity with written notification stating the reasons for
the suspension, termination, or failure to renew or extend and
affording the qualified entity an opportunity for a hearing, appeal, or
other administrative proceeding under chapter 5 of title 5.
(c) Competition for Successor Financial Assistance Agreements.--If a
financial assistance agreement with a qualified entity under this
chapter is not renewed or extended, any award of a successor financial
assistance agreement to another qualified entity under this chapter
shall be made on a competitive basis.
(d) No Other Funding.--The Administrator shall not fund any small
business development center or variation of a small business
development center except as authorized by this chapter.
Sec. 271113. Prohibition of fees for counseling service
A small business development center shall not impose or otherwise
collect a fee or other compensation in connection with the provision of
counseling service under this chapter.
Sec. 271114. Veterans assistance and services program
(a) In General.--A small business development center may apply for a
grant under this section to carry out a veterans assistance and
services program.
(b) Elements of Program.--Under a program carried out with a grant
under this section, a small business development center shall--
(1) create a marketing campaign to promote awareness and
education of the services of the small business development
center that are available to veterans, and to target the
campaign toward veterans, service-disabled veterans, military
units, Federal agencies, and veterans organizations;
(2) use technology-assisted online counseling and distance
learning technology to overcome the impediments to
entrepreneurship faced by veterans and members of the Armed
Forces; and
(3) increase coordination among organizations that assist
veterans, including by establishing virtual integration of
service providers and offerings for a 1-stop point of contact
for veterans who are entrepreneurs or owners of small business
concerns.
(c) Amount of Grants.--A grant under this section shall be for not
less than $75,000 and not more than $250,000.
(d) Funding.--Subject to amounts approved in advance in
appropriations Acts, the Administrator may make grants or enter into
cooperative agreements to carry out this section.
Sec. 271115. Grants for small business development centers
(a) In General.--The Administrator may make grants to small business
development centers to provide targeted technical assistance to small
business concerns seeking--
(1) access to capital or credit;
(2) Federal procurement opportunities;
(3) energy efficiency audits to reduce energy bills;
(4) opportunities to export products or provide services to
foreign customers;
(5) assistance in adopting, making innovations in, and using
broadband technologies; or
(6) other assistance.
(b) Allocation.--
(1) In general.--Subject to paragraph (2), and
notwithstanding the requirements of section 271102(g)(2)(C) of
this title, the amount appropriated to carry out this section
shall be allocated under the formula under section
271102(g)(2)(A) of this title.
(2) Minimum funding.--The amount made available under this
section to each State shall be not less than $325,000.
(3) Types of uses.--Of the total amount of the grants awarded
by the Administrator under this section--
(A) not less than 80 percent shall be used for
counseling of small business concerns; and
(B) not more than 20 percent may be used for classes
or seminars.
(c) No Non-Federal Share.--Notwithstanding section 271102(g)(1)(A) of
this title, the recipient of a grant under this section shall not be
required to provide non-Federal matching funds.
(d) Distribution.--Not later than 30 days after the date on which
amounts are appropriated to carry out this section, the Administrator
shall disburse the total amount appropriated.
Division K--Women's Business Center Program
Chapter 273--Women's Business Center Program
Sec.
273101. Definitions.
273102. Financial assistance.
273103. Conditions of participation.
273104. Contract authority.
273105. 5-year period.
273106. Criteria.
273107. Program examination.
273108. Suspension, termination, or failure to renew or extend
financial assistance.
273109. Continued funding for women's business centers.
273110. Privacy requirements.
273111. Expedited acquisition.
Sec. 273101. Definitions
In this chapter:
(1) Assistant administrator.--The term ``Assistant
Administrator'' means the Assistant Administrator of the Office
of Women's Business Ownership.
(2) Private nonprofit organization.--The term ``private
nonprofit organization'' means an entity that is described in
section 501(c) of the Internal Revenue Code of 1986 (26 U.S.C.
501(c)) and exempt from taxation under section 501(a) of the
Code (26 U.S.C. 501(a)).
(3) Women's business center site.--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 in a State or region--
(i) that reach a distinct population that
would otherwise not be served;
(ii) the services of which are targeted to
women; and
(iii) the scope, function, and activities of
which are similar to those of the primary
women's business center or centers in
conjunction with which it was established.
Sec. 273102. Financial assistance
(a) In General.--The Administrator may provide financial assistance
to a private nonprofit organization to conduct a 5-year project for the
benefit of small business concerns owned and controlled by women.
(b) Forms of Assistance.--A project under subsection (a) shall
provide--
(1) assistance in matters relating to financing, including
training and counseling in--
(A) how to apply for and secure business credit and
investment capital;
(B) preparing and presenting financial statements;
and
(C) 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--
(A) identifying and segmenting domestic and
international market opportunities;
(B) preparing and executing marketing plans;
(C) developing pricing strategies;
(D) locating contract opportunities;
(E) negotiating contracts; and
(F) using varying public relations and advertising
techniques.
(c) Appropriations.--The authority of the Administrator to agree to
provide financial assistance shall be in effect for each fiscal year
only to the extent and in the amounts as are provided in advance in
appropriations Acts.
Sec. 273103. Conditions of participation
(a) Non-Federal Contributions.--As a condition of receiving financial
assistance under this chapter, a recipient organization shall agree to
obtain, after its application has been approved and notice of award has
been issued, cash contributions from non-Federal sources as follows:
(1) In the 1st and 2d years, 1 non-Federal dollar for each 2
Federal dollars.
(2) In the 3d, 4th, and 5th years, 1 non-Federal dollar for
each Federal dollar.
(b) Form of Non-Federal Contributions.--Not more than one-half of the
non-Federal sector matching assistance may be in the form of in-kind
contributions that are budget line items only, including office
equipment and office space.
(c) Form of Federal Contributions.--
(1) In general.--Financial assistance under this chapter--
(A) may be made by grant, contract, or cooperative
agreement; and
(B) may be provided--
(i) in a lump sum or in installments; and
(ii) in advance or by reimbursement.
(2) Partial disbursement before non-federal funds are
obtained.--The Administrator may disburse up to 25 percent of
each year's Federal share awarded to a recipient organization
after notice of the award has been issued and before the non-
Federal sector matching funds are obtained.
(3) Failure to obtain non-federal funding.--If a recipient of
assistance fails to obtain the required non-Federal
contribution during a project--
(A) the recipient shall not be eligible thereafter
for advance disbursements--
(i) during the remainder of that project; or
(ii) for any other project for which the
recipient is or may be funded by the
Administrator; and
(B) before approving assistance to the recipient for
any other project, the Administrator shall--
(i) specifically determine whether the
Administrator believes that the recipient will
be able to obtain the requisite non-Federal
funding; and
(ii) make a written finding stating the
reasons for making the determination.
Sec. 273104. Contract authority
(a) In General.--A women's business center may enter into a contract
with a Federal agency to provide specific assistance to women and other
underserved small business concerns.
(b) Limitation.--Performance of a contract under subsection (a)
should not hinder a women's business center in carrying out the terms
of the grant, contract, or cooperative agreement received by the
women's business center from the Administrator.
Sec. 273105. 5-year period
(a) Submission of Plan.--An organization that applies for financial
assistance under this chapter initially shall submit a 5-year plan to
the Administrator on proposed fundraising and training activities.
(b) Assistance Period.--An organization may receive financial
assistance under this chapter for any 1 women's business center site
for a maximum of 5 years.
Sec. 273106. Criteria
(a) In General.--The Administrator shall evaluate and rank applicants
in accordance with predetermined selection criteria that shall be
stated in terms of relative importance.
(b) Availability.--The criteria and their relative importance shall
be made publicly available and stated in each solicitation for
applications made by the Administrator.
(c) Criteria Included.--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.
Sec. 273107. Program examination
(a) In General.--The Administrator shall--
(1) conduct an annual programmatic and financial examination
of each women's business center under which a women's business
center shall provide to the Administrator--
(A) an itemized cost breakdown of actual expenditures
for costs incurred during the preceding year; and
(B)(i) documentation regarding the amount of matching
assistance from non-Federal sources obtained and
expended by the women's business center during the
preceding year to meet the requirements of section
273103 of this title; and
(ii) with respect to any in-kind contributions
described in section 273103(b) of this title that were
used to satisfy the requirements of section 273103 of
this title, verification of the existence and valuation
of those contributions; and
(2) 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.
(b) Conditions for Continued Funding.--In determining whether to
award a sustainability grant or renew financial assistance to a women's
business center, the Administrator--
(1) shall consider the results of the most recent examination
of the women's business center under subsection (a); and
(2) may withhold the award or renewal if the Administrator
determines that--
(A)(i) the women's business center has failed to
provide any information required to be provided under
subparagraph (A) or (B) of subsection (a)(1); or
(ii) the information provided by the women's business
center is inadequate; or
(B)(i) the women's business center has failed to
provide any information required to be provided by the
women's business center for purposes of the report of
the Administrator under section 107111 of this title;
or
(ii) the information provided by the women's business
center is inadequate.
Sec. 273108. Suspension, termination, or failure to renew or extend
financial assistance
After the Administrator agrees to provide financial assistance to an
applicant under this chapter, the Administrator shall not suspend,
terminate, or fail to renew or extend the financial assistance unless
the Administrator--
(1) provides the applicant with written notification stating
the reasons for suspension, termination, or failure to renew or
extend; and
(2) affords the applicant an opportunity for a hearing,
appeal, or other administrative proceeding under chapter 5 of
title 5.
Sec. 273109. Continued funding for women's business centers
(a) In General.--A nonprofit organization described in subsection (b)
shall be eligible to receive, subject to subsection (c), a 3-year grant
under this subsection.
(b) Applicability.--A nonprofit organization described in this
subsection is a nonprofit organization that has received funding under
section 273102 of this title.
(c) Application and Approval Criteria.--
(1) Criteria.--Subject to paragraph (2), the Administrator
shall develop and publish criteria for the consideration and
approval of applications by nonprofit organizations under this
section.
(2) Contents.--Except as otherwise provided in this section,
the conditions for participation in the grant program under
this section shall be the same as the conditions for
participation in the program under section 29(l) of the Small
Business Act (15 U.S.C. 656(l)) (as in effect on May 25, 2007).
(3) Notification.--Not later than 60 days after the date of
the deadline to submit applications for each fiscal year, the
Administrator shall approve or deny any application under this
section and notify the applicant for each such application.
(d) Award of Grants.--
(1) In general.--Subject to the availability of
appropriations, the Administrator shall provide to an applicant
approved under this section a grant for the Federal share of
the cost of activities described in the application.
(2) Amount.--A grant under this section shall be for not more
than $150,000 for each year of the grant.
(3) Federal share.--The Federal share of the cost of
activities funded under this section shall be not more than 50
percent.
(4) Priority.--In allocating funds made available for grants
under this chapter, the Administrator shall give applications
under this section priority over 1st-time applications under
section 273102 of this title.
(e) Renewal.--
(1) In general.--The Administrator may renew a grant under
this section for additional 3-year periods, if the nonprofit
organization submits an application for renewal at such time,
in such manner, and accompanied by such information as the
Administrator may establish.
(2) Unlimited renewals.--There shall be no limitation on the
number of times that a grant may be renewed under paragraph
(1).
Sec. 273110. Privacy requirements
(a) In General.--A women's business center may not disclose the name,
address, or telephone number of any individual or small business
concern receiving assistance under this chapter without the consent of
the individual or small business concern, unless--
(1) the Administrator is ordered to make such a disclosure by
a court in any civil or criminal enforcement action initiated
by a Federal agency or State agency; or
(2) the Administrator considers such a disclosure to be
necessary for the purpose of conducting a financial audit of a
women's business center, but a disclosure under this paragraph
shall be limited to the information necessary for the audit.
(b) Use of Information by the Administrator.--This section does not--
(1) restrict access by the Administrator to program activity
data; or
(2) preclude the Administrator from using client information
(other than the information described in paragraph (1)) to
conduct client surveys.
(c) Regulations.--The Administrator shall issue regulations to
establish standards for requiring disclosures during a financial audit
under subsection (a)(2).
Sec. 273111. Expedited acquisition
Notwithstanding any other provision of law, the Administrator, acting
through the Assistant Administrator, may use such expedited acquisition
methods as the Administrator determines to be appropriate to carry out
this chapter, except that the Administrator shall ensure that all small
business sources are provided a reasonable opportunity to submit
proposals.
Division L--Veterans and Reservists
Chapter 275--Veterans and Reservists
Sec.
275101. Definitions.
275102. Veterans business development interagency task force.
275103. Advisory Committee on Veterans Business Affairs.
275104. Participation in transition assistance program workshops.
275105. Women veterans business training
275106. Information collection.
275107. Entrepreneurial training, counseling, and management
assistance.
275108. Outreach.
275109. Memorandum of understanding with SCORE.
275110. Memorandum of understanding with the Secretary of Veterans
Affairs and the Association.
275111. Dissemination of information.
275112. Memorandum of understanding with the Secretary of Labor and the
Secretary of Veterans Affairs.
275113. Data collection.
275114. Relief from time limitations.
Sec. 275101. Definitions
In this chapter:
(1) Associate Administrator.--The term ``Associate
Administrator'' means the Associate Administrator for Veterans
Business Development under section 103104(b) of this title.
(2) Advisory committee.--The term ``Advisory Committee''
means the Advisory Committee on Veterans Business Affairs
established under section 275103.
(3) Interagency Task force.--The term ``Interagency Task
Force'' means the veterans business development interagency
task force established under section 275102.
Sec. 275102. Veterans business development interagency task force
(a) Establishment.--The President shall establish an interagency task
force to coordinate the efforts of Federal agencies necessary to
improve capital and business development opportunities for, and ensure
achievement of the pre-established Federal contracting goals for, small
business concerns owned and controlled by service-disabled veterans and
small business concerns owned and controlled by veterans.
(b) Membership.--The members of the Interagency Task Force shall
include--
(1) the Administrator, who shall serve as chairperson of the
Interagency Task Force;
(2) a senior level representative from--
(A) the Department of Veterans Affairs;
(B) the Department of Defense;
(C) SBA (in addition to the Administrator);
(D) the Department of Labor;
(E) the Department of the Treasury;
(F) the General Services Administration;
(G) the Office of Management and Budget; and
(3) 4 representatives from a veterans service organization or
military organization or association, selected by the
President.
(c) Duties.--The Interagency Task Force shall--
(1) consult regularly with veterans service organizations and
military organizations in performing the duties of the
Interagency Task Force; and
(2) coordinate administrative and regulatory activities and
develop proposals relating to--
(A) improving capital access and capacity of small
business concerns owned and controlled by service-
disabled veterans and small business concerns owned and
controlled by veterans through loans, surety bonding,
and franchising;
(B) ensuring achievement of the pre-established
Federal contracting goals for small business concerns
owned and controlled by service-disabled veterans and
small business concerns owned and controlled by
veterans through expanded mentor-protege assistance and
matching such small business concerns with contracting
opportunities;
(C) increasing the integrity of certifications of
status as a small business concern owned and controlled
by service-disabled veterans or a small business
concern owned and controlled by veterans;
(D) reducing paperwork and administrative burdens on
veterans in accessing business development and
entrepreneurship opportunities;
(E) increasing and improving training and counseling
services provided to small business concerns owned and
controlled by veterans; and
(F) making other improvements relating to the support
for veterans business development by the Federal
Government.
Sec. 275103. Advisory Committee on Veterans Business Affairs
(a) In General.--There is established an advisory committee to be
known as the Advisory Committee on Veterans Business Affairs, which
shall serve as an independent source of advice and policy
recommendations to--
(1) the Administrator;
(2) the Associate Administrator;
(3) Congress;
(4) the President; and
(5) other United States policymakers.
(b) Membership.--
(1) In general.--The Committee shall be composed of 15
members appointed by the Administrator, of whom--
(A) 8 shall be veterans who are owners of small
business concerns; and
(B) 7 shall be representatives of veterans
organizations.
(2) Political affiliation.--Not more than 8 members of the
Committee shall be of the same political party as the
President.
(3) Prohibition of federal employment.--
(A) In general.--Except as provided in subparagraph
(B), no member of the Advisory Committee may serve as
an officer or employee of the United States.
(B) Exception.--A member of the Advisory Committee
who accepts a position as an officer or employee of the
United States after the date of the member's
appointment to the Advisory Committee may continue to
serve on the Advisory Committee for not more than 30
days after accepting the position.
(4) Term of service.--The term of service of a member of the
Advisory Committee shall be 3 years.
(5) Vacancies.--The Administrator shall fill any vacancies on
the membership of the Advisory Committee not later than 30 days
after the date on which the vacancy occurs.
(6) Chairperson.--
(A) In general.--The members of the Advisory
Committee shall elect 1 of the members to be
Chairperson of the Advisory Committee.
(B) Vacancies in office of chairperson.--Any vacancy
in the office of the Chairperson of the Advisory
Committee shall be filled by the Advisory Committee at
the 1st meeting of the Advisory Committee following the
date on which the vacancy occurs.
(c) Duties.--The duties of the Advisory Committee shall be to--
(1) review, coordinate, and monitor plans and programs,
developed in the public and private sectors, that affect the
ability of small business concerns owned and controlled by
veterans to obtain capital and credit and to access markets;
(2) promote the collection of business information and survey
data as they relate to veterans and small business concerns
owned and controlled by veterans;
(3) monitor and promote plans, programs, and operations of
Federal agencies that may contribute to the formation and
growth of small business concerns owned and controlled by
veterans;
(4) develop and promote initiatives, policies, programs, and
plans designed to foster small business concerns owned and
controlled by veterans; and
(5) develop a comprehensive plan, to be updated annually, for
joint public-private sector efforts to facilitate growth and
development of small business concerns owned and controlled by
veterans.
(d) Powers.--
(1) Hearings.--Subject to subsection (e), the Advisory
Committee may hold such hearings, sit and act at such times and
places, take such testimony, and receive such evidence as the
Advisory Committee considers advisable to carry out its duties.
(2) Information from federal agencies.--On request of the
Chairperson of the Advisory Committee, the head of any Federal
agency or the Government Accountability Office shall furnish
such information to the Advisory Committee as the Advisory
Committee considers to be necessary to carry out its duties.
(3) Use of mails.--The Advisory Committee may use the United
States mails in the same manner and under the same conditions
as other Federal agencies.
(4) Gifts.--The Advisory Committee may accept, use, and
dispose of gifts or donations of services or property.
(e) Meetings.--
(1) In general.--The Advisory Committee shall meet, not less
than 3 times per year, at the call of the Chairperson or at the
request of the Administrator.
(2) Location.--Each meeting of the full Advisory Committee
shall be held at the SBA headquarters in Washington, District
of Columbia. The Administrator shall provide suitable meeting
facilities and such administrative support as is necessary for
each full meeting of the Advisory Committee.
(3) Task groups.--The Advisory Committee may from time to
time establish temporary task groups as may be necessary in
order to carry out the duties of the Advisory Committee.
(f) Compensation and Expenses.--
(1) No compensation.--Members of the Advisory Committee shall
serve without compensation for their service to the Advisory
Committee.
(2) Expenses.--The members of the Advisory Committee shall be
reimbursed for travel and subsistence expenses in accordance
with section 5703 of title 5.
(g) Report.--Not later than 30 days after the end of each fiscal
year, the Committee shall submit to Congress and the President a report
describing the activities of the Advisory Committee and any
recommendations developed by the Advisory Committee for the promotion
of small business concerns owned and controlled by veterans.
Sec. 275104. Participation in transition assistance program workshops
(a) In General.--The Associate Administrator shall increase veteran
outreach by ensuring that veteran business outreach centers regularly
participate, on a nationwide basis, in the workshops of the transition
assistance program of the Department of Labor.
(b) Presentations.--In carrying out subsection (a), a veteran
business outreach center may provide grants to entities located in
transition assistance program locations to make presentations on the
opportunities available from the Administrator for recently separating
or separated veterans. A presentation under this subsection shall
include, at a minimum, a description of the entrepreneurial and
business training resources available from the Administrator.
(c) Written Materials.--The Associate Administrator shall--
(1) create written materials that provide comprehensive
information on self-employment and veterans entrepreneurship,
including information on resources available from the
Administrator on such topics; and
(2) make the materials created under paragraph (1) available
to the Secretary of Labor for inclusion in the transition
assistance program manual.
(d) Reports.--The Associate Administrator shall submit to Congress
progress reports on the implementation of this section.
Sec. 275105. Women veterans business training
The Associate Administrator shall--
(1) compile information on existing resources available to
women veterans for business training, including resources for--
(A) vocational and technical education;
(B) general business skills, such as marketing and
accounting; and
(C) business assistance programs targeted to women
veterans; and
(2) disseminate the information compiled under paragraph (1)
through veteran business outreach centers and women's business
centers.
Sec. 275106. Information collection
(a) Identification.--The Secretary of Veterans Affairs, in
consultation with the Assistant Secretary for Veterans' Employment and
Training and the Administrator, shall engage in efforts each year to
identify small business concerns owned and controlled by disabled
veterans in the United States.
(b) Provision of Information.--The Secretary of Veterans Affairs
shall inform each small business concern identified under this section
that information on Federal procurement is available from the
Administrator.
Sec. 275107. Entrepreneurial training, counseling, and management
assistance
The Administrator shall take such actions as are necessary to ensure
that small business concerns owned and controlled by disabled veterans
have access to programs established under this subtitle that provide
entrepreneurial training, business development assistance, counseling,
and management assistance to small business concerns, including, among
others, the small business development center program and the SCORE
program.
Sec. 275108. Outreach
(a) In General.--The Administrator, the Secretary of Veterans
Affairs, and the Assistant Secretary of Labor for Veterans' Employment
and Training shall develop and implement a program of comprehensive
outreach to assist disabled veterans.
(b) Activities.--The program under subsection (a) shall include
business training and management assistance, employment and relocation
counseling, and dissemination of information on veterans' benefits and
veterans' entitlements.
Sec. 275109. Memorandum of understanding with SCORE
(a) In General.--The Administrator shall enter into a memorandum of
understanding with SCORE to provide for--
(1) the appointment by SCORE in its national office of an
individual to act as National Veterans Business Coordinator,
whose duties shall relate exclusively to veterans business
matters, and who shall be responsible for the establishment and
administration of a program to coordinate counseling and
training regarding entrepreneurship to veterans through the
chapters of SCORE throughout the United States;
(2) the provision of assistance by SCORE in maintaining a
toll-free telephone number and a website to provide access for
veterans to information about the counseling and training
regarding entrepreneurship available to veterans through SCORE;
and
(3) the collection of statistics concerning services provided
by SCORE to service-disabled veterans and other veterans for
inclusion in each annual report published by the Administrator
under section 107114 of this title.
(b) Resources.--The Administrator shall provide SCORE such resources
as the Administrator determines to be necessary for SCORE to carry out
the requirements of the memorandum of understanding specified under
subsection (a).
Sec. 275110. Memorandum of understanding with the Secretary of Veterans
Affairs and the Association
(a) In General.--The Secretary of Veterans Affairs, the
Administrator, and the head of the Association shall enter into a
memorandum of understanding with respect to entrepreneurial assistance
to service-disabled veterans and other veterans through small business
development centers and facilities of the Department of Veterans
Affairs.
(b) Forms of Assistance.--Assistance provided under the memorandum of
understanding shall include--
(1) conducting of studies and research, and the distribution
of information generated by such studies and research, on the
formation, management, financing, marketing, and operation of
small business concerns by veterans;
(2) provision of training and counseling to veterans
concerning the formation, management, financing, marketing, and
operation of small business concerns;
(3) provision of management and technical assistance to the
owners and operators of small business concerns regarding
international markets, the promotion of exports, and the
transfer of technology;
(4) provision of assistance and information to veterans
regarding procurement opportunities with Federal, State, and
local agencies, especially such agencies funded in whole or in
part with Federal funds;
(5) establishment of an information clearinghouse to collect
and distribute information, including by electronic means, on
the assistance programs of Federal, State, and local
governments, and of the private sector, including information
on office locations, key personnel, telephone numbers, mail and
electronic addresses, and contracting and subcontracting
opportunities;
(6) provision of internet or other distance learning academic
instruction for veterans in business subjects, including
accounting, marketing, and business fundamentals; and
(7) compilation of a list of small business concerns owned
and controlled by service-disabled veterans that provide
products or services that could be procured by the United
States, and delivery of the list to each Federal agency.
(c) List of Small Business Concerns.--The list described in
subsection (b)(7)--
(1) shall be delivered in hard copy and electronic form; and
(2) shall include the name and address of each small business
concern owned and controlled by service-disabled veterans and
the products or services that it provides.
Sec. 275111. Dissemination of information
Each fiscal year, the Secretary of Veterans Affairs shall--
(1) in consultation with the Assistant Secretary of Labor for
Veterans' Employment and Training and the Administrator,
identify small business concerns owned and controlled by
veterans in the United States; and
(2) inform each small business concern owned and controlled
by veterans identified under paragraph (1) that information on
Federal procurement is available from the Administrator, as
provided in section 241115(b) of this title.
Sec. 275112. Memorandum of understanding with the Secretary of Labor
and the Secretary of Veterans Affairs
(a) In General.--The Secretary of Labor, the Secretary of Veterans
Affairs, and the Administrator shall enter into a memorandum of
understanding to provide for coordination of vocational rehabilitation
services, technical and managerial assistance, and financial assistance
to veterans (including service-disabled veterans) seeking to employ
themselves by forming or expanding small business concerns.
(b) Contents.--The memorandum of understanding shall include
recommendations for expanding existing programs or establishing new
programs to provide services described in subsection (a) or assistance
to veterans (including service-disabled veterans).
Sec. 275113. Data collection
The Federal Procurement Data System described in section
1122(a)(4)(A) of title 41 shall collect data regarding the percentage
and dollar value of prime contracts and subcontracts awarded to small
business concerns owned and controlled by veterans (including small
business concerns owned and controlled by service-disabled veterans).
Sec. 275114. Relief from time limitations
(a) In General.--Any time limitation on any qualification,
certification, or period of participation imposed under this subtitle
or subtitle I on any program that is available to small business
concerns shall be extended for a small business concern that--
(1) is owned and controlled by--
(A) a veteran who was called or ordered to active
duty on or after September 11, 2001, under a provision
of law specified in section 101(a)(13)(B) of title 10;
or
(B) a service-disabled veteran who became such a
veteran due to an injury or illness incurred or
aggravated in the active military, naval, or air
service during a period of active duty pursuant to a
call or order to active duty on or after September 11,
2001, under a provision of law specified in section
101(a)(13)(B) of title 10; and
(2) was subject to the time limitation during that period of
active duty.
(b) Duration.--On submission of proper documentation to the
Administrator, the extension of a time limitation under subsection (a)
shall be equal to the period of time that the veteran who owned or
controlled a small business concern was on active duty as described in
subsection (a).
(c) Exception for Programs Subject to Federal Credit Reform Act of
1990.--Subsections (a) and (b) do not apply to any program subject to
the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
Division M--International Trade
Chapter 277--International Trade
Sec.
277101. Definitions.
277102. Trade distribution network.
277103. Promotion of sales opportunities.
277104. Export financing programs.
277105. Trade remedies.
277106. Discharge of international trade responsibilities.
277107. Export and trade counseling.
277108. Performance measures.
277109. Export assistance centers.
277110. State trade expansion program.
Sec. 277101. Definitions
In this chapter:
(1) Associate administrator.--The term ``Associate
Administrator'' means the Associate Administrator for
International Trade.
(2) Office.--The term ``Office'' means the Office of
International Trade established under section 103109 of this
title.
(3) Rural small business concern.--The term ``rural small
business concern'' means a small business concern located in a
rural area (as defined in section 1393(a)(2) of the Internal
Revenue Code of 1986 (26 U.S.C. 1393(a)(2)).
Sec. 277102. Trade distribution network
The Associate Administrator, working in close cooperation with the
Secretary of Commerce, the United States Trade Representative, the
Secretary of Agriculture, the Secretary of State, the President of the
Export-Import Bank of the United States, the President of the Overseas
Private Investment Corporation, the Director of the United States Trade
and Development Agency, and other Federal agencies, small business
development centers engaged in export promotion efforts, export
assistance centers, SBA regional offices, SBA district offices, the
small business community, and State and local export promotion
programs, shall--
(1) maintain a distribution network, using SBA regional
offices and SBA district offices, the small business
development center network, networks of women's business
centers, SCORE, and export assistance centers, for programs
relating to--
(A) trade promotion;
(B) trade finance;
(C) trade adjustment assistance;
(D) trade remedy assistance; and
(E) trade data collection;
(2) aggressively market the programs described in paragraph
(1) and disseminate information, including computerized
marketing data, to small business concerns on--
(A) exporting trends;
(B) market-specific growth;
(C) industry trends; and
(D) international prospects for exports;
(3) promote export assistance programs through the SBA
district offices and SBA regional offices, the small business
development center network, export assistance centers, the
network of women's business centers, SCORE chapters, State and
local export promotion programs, and partners in the private
sector; and
(4) give preference in hiring or approving the transfer of
any employee into the Office or to a position described in
section 277103(b)(9) of this title to otherwise qualified
applicants who are fluent in a language in addition to English,
to--
(A) accompany small business concerns on foreign
trade missions; and
(B) translate documents, interpret conversations, and
facilitate multilingual transactions, including by
providing referral lists for translation services, if
required.
Sec. 277103. Promotion of sales opportunities
(a) In General.--The Associate Administrator shall promote sales
opportunities for small business goods and services abroad.
(b) Activities.--To accomplish the objective stated in subsection
(a), the Associate Administrator shall--
(1) establish annual goals for the Office relating to--
(A) enhancing the exporting capability of small
business concerns;
(B) facilitating technology transfers;
(C) enhancing programs and services to assist small
business concerns to compete effectively and
efficiently in foreign markets;
(D) increasing the ability of small business concerns
to access capital; and
(E) disseminating information concerning Federal,
State, and private programs and initiatives;
(2) in cooperation with the Department of Commerce, other
Federal agencies, regional and local SBA offices, the small
business development center network, and State programs,
develop a mechanism for--
(A) identifying subsectors of the small business
community with strong export potential;
(B) identifying areas of demand in foreign markets;
(C) prescreening foreign buyers for commercial and
credit purposes; and
(D) assisting in increasing international marketing
by disseminating relevant information regarding market
leads, linking potential sellers and buyers, and
catalyzing the formation of joint ventures, where
appropriate;
(3) in cooperation with the Department of Commerce, actively
assist small business concerns in forming and using export
trading companies, export management companies and research and
development pools authorized under division I of subtitle II;
(4) work in conjunction with other Federal agencies, SBA
regional offices, SBA district offices, the small business
development center network, and the private sector to identify
and publicize translation services, including those available
through colleges and universities participating in the small
business development center program;
(5) work closely with the Department of Commerce and other
relevant Federal agencies to--
(A)(i) collect, analyze and periodically update
relevant data regarding the small business share of
United States exports and the nature of State exports
(including the production of Gross State Product
figures); and
(ii) disseminate those data to the public and to
Congress;
(B) make recommendations to the Secretary of Commerce
and to Congress regarding revision of the North
American Industry Classification System codes to
encompass industries currently overlooked and to create
North American Industry Classification System codes for
export trading companies and export management
companies;
(C) improve the utility and accessibility of existing
export promotion programs for small business concerns;
and
(D) increase the accessibility of the Export Trading
Company contact facilitation service of the Department
of Commerce;
(6) make available to the small business community
information regarding conferences on exporting and
international trade sponsored by the public and private
sectors;
(7) provide small business concerns with access to up to date
and complete export information by--
(A) making available, at SBA regional offices and SBA
district offices through cooperation with the
Department of Commerce, export information, including
the worldwide information and trade system and world
trade data reports;
(B) maintaining a list of financial institutions that
finance export operations;
(C) maintaining a directory of all Federal, regional,
State and private sector programs that provide export
information and assistance to small business concerns;
and
(D) preparing and publishing such reports as the
Office determines to be necessary concerning market
conditions, sources of financing, export promotion
programs, and other information pertaining to the needs
of exporting small business concerns so as to ensure
that the maximum information is made available to small
business concerns in a readily usable form;
(8) in cooperation with the Department of Commerce, encourage
greater participation by small business concerns in trade
fairs, shows, missions, and other domestic and overseas export
development activities of the Department of Commerce;
(9) facilitate decentralized delivery of export information
and assistance to small business concerns by assigning primary
responsibility for export development to 1 individual in each
SBA district office and providing each SBA regional office with
a full-time export development specialist, who shall--
(A) assist small business concerns in obtaining
export information and assistance from other Federal
agencies;
(B) maintain a directory of all programs that provide
export information and assistance to small business
concerns in the region;
(C) encourage financial institutions to develop and
expand programs for export financing;
(D) provide advice to SBA personnel involved in
making loans, loan guarantees, and extensions and
revolving lines of credit and providing other forms of
assistance to small business concerns engaged in
exporting;
(E) within 180 days after being appointed as an
export development specialist, participate in a
training program designed by the Administrator, in
conjunction with the Department of Commerce and other
Federal agencies, to study export programs and to
examine the needs of small business concerns for export
information and assistance;
(F) participate, jointly with employees of the
Office, in an annual training program that focuses on
current small business needs for exporting; and
(G) develop and conduct training programs for
exporters and lenders, in cooperation with the export
assistance centers, the Department of Commerce, the
Department of Agriculture, small business development
centers, women's business centers, the Export-Import
Bank of the United States, the Overseas Private
Investment Corporation, and other Federal agencies;
(10) make available on the SBA website the name and contact
information of each individual described in paragraph (9);
(11) carry out a nationwide marketing effort using
technology, online resources, training, and other strategies to
promote exporting as a business development opportunity for
small business concerns;
(12) disseminate information to the small business community
through SBA regional offices and SBA district offices, the
small business development center network, export assistance
centers, the network of women's business centers, SCORE
chapters, State and local export promotion programs, and
partners in the private sector regarding exporting trends,
market-specific growth, industry trends, and prospects for
exporting; and
(13) establish and carry out training programs for the staff
of SBA regional offices and SBA district offices and resource
partners of SBA on export promotion and the provision of
assistance relating to exports.
Sec. 277104. Export financing programs
(a) In General.--The Associate Administrator shall work in
cooperation with the Export-Import Bank of the United States, the
Department of Commerce, other Federal agencies, and the States to
develop a program through which export specialists in SBA regional
offices, regional and local loan officers, and small business
development center personnel can facilitate the access of small
business concerns to--
(1) relevant export financing programs of the Export-Import
Bank of the United States; and
(2) export and pre-export financing programs available from
the Administrator and the private sector.
(b) Trade Finance Specialists.--To accomplish the goal established
under subsection (a), the Associate Administrator shall--
(1) designate at least 1 individual within SBA as a trade
finance specialist to oversee international loan programs and
assist SBA employees with trade finance issues; and
(2) work in cooperation with the Export-Import Bank of the
United States and the small business community, including small
business trade associations, to--
(A) aggressively market existing SBA export financing
and pre-export financing programs;
(B) identify financing available under various
programs of the Export-Import Bank of the United
States, and aggressively market those programs to small
business concerns;
(C) assist in the development of financial
intermediaries and facilitate the access of those
intermediaries to existing financing programs;
(D) promote greater participation by private
financial institutions, particularly institutions
already participating in loan programs under this
subtitle, in export finance; and
(E) provide for the participation of appropriate SBA
personnel in training programs conducted by the Export-
Import Bank of the United States.
Sec. 277105. Trade remedies
The Associate Administrator shall--
(1) work in cooperation with other Federal agencies and the
private sector to counsel small business concerns with respect
to initiating and participating in any proceedings relating to
the administration of the United States trade laws; and
(2) work with the Department of Commerce, the Office of the
United States Trade Representative, and the International Trade
Commission to increase access to trade remedy proceedings for
small business concerns.
Sec. 277106. Discharge of international trade responsibilities
The Administrator shall ensure that--
(1) the responsibilities of the Administrator regarding
international trade are carried out by the Associate
Administrator;
(2) the Associate Administrator has sufficient resources to
carry out those responsibilities; and
(3) the Associate Administrator has direct supervision and
control over--
(A) the staff of the Office; and
(B) any SBA employee whose principal duty station is
an export assistance center, or any successor entity.
Sec. 277107. Export and trade counseling
(a) Definitions.--In this section:
(1) Lead small business development center.--The term ``lead
small business development center'' means a small business
development center that has received a grant from the
Administrator.
(2) Lead women's business center.--The term ``lead women's
business center'' means a women's business center that has
received a grant from the Administrator.
(b) Certification Program.--The Administrator shall establish an
export and trade counseling certification program to certify employees
of lead small business development centers and lead women's business
centers in providing export assistance to small business concerns.
(c) Number of Certified Employees.--The Administrator shall ensure
that the number of employees of each lead small business development
center who are certified in providing export assistance is not less
than the lesser of--
(1) 5; or
(2) 10 percent of the total number of employees of the lead
small business development center.
(d) Reimbursement for Certification.--
(1) In general.--Subject to the availability of
appropriations, the Administrator shall reimburse a lead small
business development center or a lead women's business center
for costs relating to the certification of an employee of the
lead small business center or lead women's business center in
providing export assistance under the program established under
subsection (b).
(2) Limitation.--The total amount reimbursed by the
Administrator under paragraph (1) shall not exceed $350,000 in
any fiscal year.
Sec. 277108. Performance measures
(a) In General.--The Associate Administrator shall develop
performance measures for SBA to support export growth goals for the
activities of the Office under this chapter that include--
(1) the number of small business concerns that--
(A) receive assistance from the Administrator;
(B) had not exported goods or services before
receiving the assistance described in subparagraph (A);
and
(C) export goods or services;
(2) the number of small business concerns receiving
assistance from the Administrator that export goods or services
to a market outside the United States into which the small
business concern did not export before receiving the
assistance;
(3) export revenues by small business concerns assisted by
programs of the Administrator;
(4) the number of small business concerns referred to an
export assistance center or a small business development center
by the staff of the Office;
(5) the number of small business concerns referred to SBA by
an export assistance center or a small business development
center; and
(6) the number of small business concerns referred to the
Department of Commerce, the Department of Agriculture, the
Department of State, the Export-Import Bank of the United
States, the Overseas Private Investment Corporation, or the
United States Trade and Development Agency by the staff of the
Office, an export assistance center, or a small business
development center.
(b) Joint Performance Measures.--The Associate Administrator shall
develop joint performance measures for SBA district offices and export
assistance centers that include the number of export loans made under--
(1) section 205110 of this title;
(2) the export working capital program;
(3) the preferred lenders program; and
(4) the export express program.
(c) Consistency of Tracking.--The Associate Administrator, in
coordination with the Federal agencies that are represented on the
Trade Promotion Coordinating Committee established under section 2312
of the Export Enhancement Act of 1988 (15 U.S.C. 4727) and the small
business development center network, shall develop a system to track
exports by small business concerns, including information relating to
the performance measures developed under subsection (a), that is
consistent with systems used by the Federal agencies and the network.
Sec. 277109. Export assistance centers
(a) Minimum Number of Export Finance Specialists.--
(1) In general.--The Administrator, in coordination with the
Secretary of Commerce, shall ensure that the number of export
finance specialists at all times is not less than the number of
employees assigned as export finance specialists on January 1,
2003.
(2) SBA regions.--The Administrator, in coordination with the
Secretary of Commerce, shall ensure that at all times there are
not fewer than 3 export finance specialists in each SBA region.
(b) Placement of Export Finance Specialists.--
(1) Priority.--The Administrator shall give priority, to the
maximum extent practicable, to placing SBA employees at any
export assistance center that--
(A) had an SBA employee assigned to the export
assistance center before January 2003; and
(B) has not had an SBA employee assigned to the
export assistance center during the period beginning
January 2003 and ending on September 27, 2010, through
either retirement or reassignment.
(2) Needs of exporters.--The Administrator shall, to the
maximum extent practicable, strategically assign SBA employees
to export assistance centers based on the needs of exporters.
(3) Rule of construction.--Nothing in this section shall be
construed to require the Administrator to reassign or remove an
export finance specialist who was assigned to an export
assistance center on September 27, 2010.
(c) Goals.--The Associate Administrator shall work with the
Department of Commerce, the Export-Import Bank of the United States,
and the Overseas Private Investment Corporation to establish shared
annual goals for the export assistance centers.
(d) Oversight.--The Associate Administrator shall designate an
individual within SBA to oversee all activities conducted by SBA
employees assigned to export assistance centers.
Sec. 277110. State trade expansion program
(a) Definitions.--In this section:
(1) Eligible small business concern.--The term ``eligible
small business concern'' means a business concern that--
(A) is organized or incorporated in the United
States;
(B) is operating in the United States;
(C) meets--
(i) the applicable industry-based small
business size standard established under
section 101103 of this title; or
(ii) the alternate size standard applicable
to the program under section 101103(b)(5) of
this title and the loan programs under chapter
331;
(D) has been in business for not less than 1 year, as
of the date on which assistance using a grant under
this subsection commences; and
(E) has access to sufficient resources to bear the
costs associated with trade, including the costs of
packing, shipping, freight forwarding, and customs
brokers.
(2) Program.--The term ``program'' means the State trade
expansion program established under subsection (b).
(3) Rural small business concern.--The term ``rural small
business concern'' means an eligible small business concern
located in a rural area (as defined in section 1393(a) of the
Internal Revenue Code of 1986 (26 U.S.C. 1393(a))).
(4) State.--The term ``State'' means a State, the District of
Columbia, Puerto Rico, Guam, American Samoa, the Virgin
Islands, and the Northern Mariana Islands.
(b) Establishment of Program.--The Associate Administrator shall
establish a trade expansion program, to be known as the State trade
expansion program, to make grants to States to carry out programs that
assist eligible small business concerns in--
(1) participation in foreign trade missions;
(2) a subscription to services provided by the Department of
Commerce;
(3) the payment of website fees;
(4) the design of marketing media;
(5) a trade show exhibition;
(6) participation in training workshops;
(7) a reverse trade mission;
(8) procurement of consultancy services (after consultation
with the Department of Commerce to avoid duplication); or
(9) any other initiative determined appropriate by the
Associate Administrator.
(c) Grants.--
(1) Joint review.--In carrying out the program, the Associate
Administrator may make a grant to a State to increase the
number of eligible small business concerns in the State
exploring significant new trade opportunities.
(2) Considerations.--In making grants under this section, the
Associate Administrator may give priority to an application by
a State that proposes a program that--
(A) focuses on eligible small business concerns as
part of a trade expansion program;
(B) demonstrates intent to promote trade expansion
by--
(i) small business concerns owned and
controlled by socially and economically
disadvantaged individuals;
(ii) small business concerns owned and
controlled by women; and
(iii) rural small business concerns;
(C) promotes trade facilitation from a State that is
not 1 of the 10 States with the highest percentage of
eligible small business concerns that are engaged in
international trade, based on the most recent data from
the Department of Commerce; and
(D) includes--
(i) activities that have resulted in the
highest return on investment based on the most
recent year; and
(ii) the adoption of shared best practices
included in the annual report of the
Administrator.
(3) Limitations.--
(A) Single application.--A State may not submit more
than 1 application for a grant under the program in any
1 fiscal year.
(B) Proportion of amounts.--The total value of grants
made under the program during a fiscal year to the 10
States with the highest percentage of eligible small
business concerns, based on the most recent data
available from the Department of Commerce, shall be not
more than 40 percent of the amounts appropriated for
the program for that fiscal year.
(C) Duration.--The Associate Administrator shall
award a grant under this program for a period of not
more than 2 years.
(4) Application.--
(A) In general.--A State desiring a grant under the
program shall submit an application at such time, in
such manner, and accompanied by such information as the
Associate Administrator may establish.
(B) Consultation to reduce duplication.--A State
desiring a grant under the program shall--
(i) before submitting an application under
subparagraph (A), consult with applicable trade
agencies of the Federal Government on the scope
and mission of the activities that the State
proposes to carry out using the grant, to
ensure proper coordination and reduce
duplication in services; and
(ii) document the consultation conducted
under clause (i) in the application submitted
under subparagraph (A).
(d) Competitive Basis.--The Associate Administrator shall award
grants under the program on a competitive basis.
(e) Federal Share.--The Federal share of the cost of a trade
expansion program carried out using a grant under the program shall
be--
(1) for a State that has a high trade volume, as determined
by the Associate Administrator, not more than 65 percent; and
(2) for a State that does not have a high trade volume, as
determined by the Associate Administrator, not more than 75
percent.
(f) Non-Federal Share.--The non-Federal share of the cost of a trade
expansion program carried out using a grant under the program shall be
comprised of not less than 50 percent cash and not more than 50 percent
of indirect costs and in-kind contributions, except that no such costs
or contributions may be derived from funds from any other Federal
program.
Divisions N Through Y--Reserved
Division Z--Miscellaneous
Chapter 299--Miscellaneous
Sec.
299101. Management assistance for small business concerns affected by
military operations.
299102. Business grants and cooperative agreements.
299103. Voluntary agreements and programs.
299104. Paul D. Coverdell drug-free workplace program.
299105. Course on contracting requirements.
299106. Mentor-protege programs.
299107. Subcontracting requirements and limitations.
Sec. 299101. Management assistance for small business concerns affected
by military operations
(a) Definition of Period of Military Conflict.--In this section, the
term ``period of military conflict'' means--
(1) a period of war declared by Congress;
(2) a period of national emergency declared by Congress or by
the President; or
(3) a period of a contingency operation (as defined in
section 101(a) of title 10).
(b) Assistance.--The Administrator shall use, as appropriate, the
entrepreneurial development and management assistance programs of SBA,
including programs involving State or private sector partners, to
provide business counseling and training to any small business concern
adversely affected by the deployment of units of the Armed Forces of
the United States in support of a period of military conflict.
Sec. 299102. Business grants and cooperative agreements
(a) In General.--The Administrator may make grants to and enter into
cooperative agreements with a coalition of private or public entities
(or combination of private and public entities)--
(1) to expand business-to-business relationships between
small business concerns and large business concerns; and
(2) 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.
(b) Matching Requirement.--The Administrator may make a grant to a
coalition of private entities under subsection (a) only if the
coalition provides for activities described in paragraph (1) or (2) of
subsection (a) in an amount (in kind or in cash) equal to the grant
amount.
Sec. 299103. Voluntary agreements and programs
(a) Consultation.--The President may consult with representatives of
small business concerns with a view to encouraging the making by small
business concerns with the approval of the President of voluntary
agreements and programs to further the objectives of this subtitle.
(b) Exemption From Certain Laws.--
(1) In general.--No act or omission to act pursuant to this
subtitle that occurs while this subtitle is in effect, if
requested by the President pursuant to a voluntary agreement or
program approved under subsection (a) and determined by the
President to be in the public interest as contributing to the
national defense, shall be construed to be within the
prohibitions of the antitrust laws or the Federal Trade
Commission Act (15 U.S.C. 41 et seq.).
(2) Requests.--A copy of a request intended to be within the
coverage of this section, and any modification or withdrawal of
such a request--
(A) shall be furnished to the Attorney General and
the Chairman of the Federal Trade Commission when made;
and
(B) shall be published in the Federal Register unless
publication of the request would, in the opinion of the
President, endanger the national security.
(c) Delegation of Authority.--The authority granted in subsection (b)
shall be delegated only--
(1) to an official who for the purpose of the delegation
shall be required to be appointed by the President by and with
the advice and consent of the Senate;
(2) on the condition that the official consult with the
Attorney General and the Chairman of the Federal Trade
Commission not less than 10 days before making any request or
finding under subsection (b); and
(3) on the condition that the official obtain the approval of
the Attorney General to any request under subsection (b) before
making the request.
(d) Withdrawal of Request or Finding by the President or of Approval
by the Attorney General.--On withdrawal of any request or finding under
this section, or on withdrawal by the Attorney General of approval of
the voluntary agreement or program on which the request or finding is
based, this section shall not apply to any subsequent act, or omission
to act, by reason of the finding or request.
Sec. 299104. Paul D. Coverdell drug-free workplace program
(a) Definitions.--In this section:
(1) Drug-free workplace program.--The term ``drug-free
workplace program'' means a program that includes--
(A) a written policy, including a clear statement
of--
(i) expectations for workplace behavior;
(ii) prohibitions against reporting to work
or working under the influence of illegal drugs
or alcohol;
(iii) prohibitions against the use or
possession of illegal drugs in the workplace;
and
(iv) the consequences of violating those
expectations and prohibitions;
(B)(i) drug and alcohol abuse prevention training for
a total of not less than 2 hours for each employee; and
(ii) additional voluntary drug and alcohol abuse
prevention training for employees who are parents;
(C)(i) testing of employees of a small business
concern for illegal drugs, with analysis conducted by a
drug testing laboratory certified by the Substance
Abuse and Mental Health Services Administration, or
approved by the College of American Pathologists for
forensic drug testing; and
(ii) a review of each positive test result by a
medical review officer who is not--
(I) an employee of that small business
concern; or
(II) an employee or agent of, or any person
having a financial interest in, the laboratory
for which the illegal drug test results are
reviewed;
(D) employee access to an employee assistance
program, including confidential assessment, referral,
and short-term problem resolution; and
(E) continuing alcohol and drug abuse prevention
education.
(2) Eligible intermediary.--The term ``eligible
intermediary'' means an organization--
(A) that has not less than 2 years of experience in
carrying out drug-free workplace programs;
(B) that has a drug-free workplace policy in effect;
(C) that is located in a State, the District of
Columbia, or a territory of the United States; and
(D)(i) the purpose of which is--
(I) to develop comprehensive drug-free
workplace programs or to supply drug-free
workplace services; or
(II) to provide other forms of assistance and
services to small business concerns; or
(ii) that is eligible to receive a grant under
chapter 2 of the National Narcotics Leadership Act of
1988 (21 U.S.C. 1521 et seq.).
(3) Employee.--The term ``employee'' includes--
(A) an applicant for employment;
(B) an employee;
(C) a supervisor;
(D) a manager;
(E) an officer of a small business concern who is
active in management of the small business concern; and
(F) an owner of a small business concern who is
active in management of the small business concern.
(4) Medical review officer.--The term ``medical review
officer'' means a licensed physician with knowledge of
substance abuse disorders.
(b) Establishment.--
(1) In general.--There is established a drug-free workplace
demonstration program, under which the Administrator may make
grants to, or enter into cooperative agreements or contracts
with, eligible intermediaries for the purpose of providing
financial and technical assistance to small business concerns
seeking to establish a drug-free workplace program.
(2) Additional grants for technical assistance.--In addition
to grants under paragraph (1), the Administrator may make
grants to, or enter into cooperative agreements or contracts
with, any grantee for the purpose of providing, in cooperation
with 1 or more small business development centers, technical
assistance to small business concerns seeking to establish a
drug-free workplace program.
(3) 2-year grants.--A grant made under this subsection shall
be for a period of 2 years, subject to an annual performance
review by the Administrator.
(c) Promotion of Effective Practices of Eligible Intermediaries.--
(1) Technical assistance and information.--The Administrator,
after consultation with the Director of the Center for
Substance Abuse and Prevention, shall provide technical
assistance and information to each eligible intermediary under
subsection (b) regarding the most effective practices in
establishing and carrying out drug-free workplace programs.
(2) Evaluation of program.--
(A) Data collection and analysis.--
(i) In general.--An eligible intermediary
receiving a grant under this section shall
establish a system to collect and analyze
information regarding the effectiveness of
drug-free workplace programs established with
assistance provided under this section through
the intermediary, including information
regarding any increase or decrease among
employees in drug use, awareness of the adverse
consequences of drug use, and absenteeism,
injury, and disciplinary problems related to
drug use.
(ii) Requirements.--The system shall conform
to such requirements as the Administrator,
after consultation with the Director of the
Center for Substance Abuse and Prevention, may
prescribe.
(iii) Limitation.--Not more than 5 percent of
the amount of a grant made under subsection (b)
shall be used by the eligible intermediary to
carry out this paragraph.
(B) Method of evaluation.--
(i) In general.--The Administrator, after
consultation with the Director of the Center
for Substance Abuse and Prevention, shall
provide technical assistance and guidance to
each eligible intermediary receiving a grant
under subsection (b) regarding the collection
and analysis of information to evaluate the
effectiveness of drug-free workplace programs
established with assistance provided under this
section, including the information referred to
in paragraph (1).
(ii) Forms of assistance.--Assistance under
clause (i) shall include--
(I) the identification of additional
information suitable for measuring the
benefits of drug-free workplace
programs to the small business concern
and to the small business concern's
employees; and
(II) the identification of methods
suitable for analyzing such
information.
(d) Contract Authority.--In carrying out this section, the
Administrator may--
(1) contract with public and private entities to provide
assistance related to carrying out the program under this
section; and
(2) compensate those entities for provision of that
assistance.
(e) Effect of Section.--Nothing in this section requires an employer
that attends a program offered by an eligible intermediary to contract
for any service offered by the eligible intermediary.
Sec. 299105. Course on contracting requirements
(a) In General.--The Defense Acquisition University and the Federal
Acquisition Institute shall each provide a course on contracting
requirements under this subtitle, including the requirements for--
(1) qualified HUBZone small business concerns;
(2) small business concerns owned and controlled by service-
disabled veterans;
(3) small business concerns owned and controlled by socially
and economically disadvantaged individuals; and
(4) small business concerns owned and controlled by women.
(b) Course Requirement for Certification.--To have a Federal
Acquisition Certification in Contracting (or any successor
certification) or the equivalent Department of Defense certification,
an individual shall be required to complete the course under subsection
(a).
Sec. 299106. Mentor-protege programs
(a) Definitions.--In this section:
(1) Mentor.--The term ``mentor'' means a for-profit business
concern, of any size, that--
(A) has the ability to assist and commits to
assisting a protege to compete for Federal prime
contracts and subcontracts; and
(B) satisfies any other requirements established by
the Administrator.
(2) Mentor-protege program.--The term ``mentor-protege
program'' means a program that pairs a mentor with a protege
for the purpose of assisting the protege to compete for Federal
prime contracts and subcontracts.
(3) Protege.--The term ``protege'' means a small business
concern that--
(A) is eligible to enter into Federal prime contracts
and subcontracts; and
(B) satisfies any other requirements established by
the Administrator.
(b) SBA Program.--
(1) In General.--The Administrator may establish a mentor-
protege program for all small business concerns.
(2) Model for program.--The mentor-protege program
established under paragraph (1) shall be identical to the SBA
mentor-protege program for small business concerns that
participate in the business development program (as in effect
on January 2, 2013), except that the Administrator may modify
the program to the extent necessary given the categories of
small business concern included as proteges.
(c) Programs of Other Federal Agencies.--
(1) Approval.--Except as provided in paragraph (4), a Federal
agency may not carry out a mentor-protege program for small
business concerns unless--
(A) the head of the Federal agency submits to the
Administrator a plan for the program; and
(B) the Administrator approves the plan.
(2) Basis for approval.--The Administrator shall approve or
disapprove a plan submitted under paragraph (1) based on
whether the proposed program--
(A) will assist proteges to compete for Federal prime
contracts and subcontracts; and
(B) complies with the regulations prescribed under
paragraph (3).
(3) Regulations.--The Administrator shall prescribe, after
providing notice and an opportunity for public comment,
regulations with respect to mentor-protege programs, that--
(A) ensure that the programs improve the ability of
proteges to compete for Federal prime contracts and
subcontracts; and
(B) address, at a minimum--
(i) eligibility criteria for program
participants, including any restrictions on the
number of mentor-protege relationships
permitted for each participant;
(ii) the types of developmental assistance to
be provided by mentors, including how the
assistance provided shall improve the
competitive viability of the proteges;
(iii) whether any developmental assistance
provided by a mentor may affect the status of a
program participant as a small business concern
due to affiliation;
(iv) the length of mentor-protege
relationships;
(v) the effect of mentor-protege
relationships on contracting;
(vi) benefits that may accrue to a mentor as
a result of program participation;
(vii) reporting requirements during program
participation;
(viii) postparticipation reporting
requirements;
(ix) the need for a mentor-protege pair, if
accepted to participate as a pair in a mentor-
protege program of any Federal agency, to be
accepted to participate as a pair in all
Federal agency mentor-protege programs;
(x) actions to be taken to ensure benefits
for proteges and to protect a protege against
actions by a mentor that--
(I) may adversely affect the
protege's status as a small business
concern; or
(II) provide disproportionate
economic benefits to the mentor
relative to those provided the protege;
and
(xi) the types of assistance provided by a
mentor to assist with compliance with the
requirements of contracting with the Federal
Government after award of a contract or
subcontract under this section.
(4) Limitation on applicability.--Paragraph (1) does not
apply to--
(A) a mentor-protege program of the Department of
Defense;
(B) mentoring assistance provided under an SBIR
program or a STTR program; or
(C) until the date that is 1 year after the date on
which the Administrator prescribes regulations under
paragraph (3), a Federal agency operating a mentor-
protege program in effect on January 2, 2013.
Sec. 299107. Subcontracting requirements and limitations
(a) Definitions.--In this section:
(1) Covered small business concern.--The term ``covered small
business concern'' means a business concern that--
(A) with respect to a contract awarded under the
business development program, is a small business
concern eligible to receive contracts under the
business development program;
(B) with respect to a contract awarded under chapter
257--
(i) is a small business concern owned and
controlled by women (as defined in section
257101 of this title); or
(ii) is a small business concern owned and
controlled by women (as defined in that
section) that is not less than 51 percent owned
by 1 or more women who are economically
disadvantaged (and such ownership is determined
without regard to any community property law);
(C) with respect to a contract awarded under section
251101 of this title, is a small business concern;
(D) with respect to a contract awarded under the
HUBZone program, is a qualified HUBZone small business
concern; and
(E) with respect to a contract awarded under chapter
255, is a small business concern owned and controlled
by service-disabled veterans.
(2) Similarly situated entity.--The term ``similarly situated
entity'' means a subcontractor that--
(A)(i) is a subcontractor for a small business
concern; and
(ii) is a small business concern;
(B)(i) is a subcontractor for a small business
concern eligible to receive contracts under the
business development program; and
(ii) is a small business concern eligible to receive
contracts under the business development program;
(C)(i) is a subcontractor for a small business
concern owned and controlled by women (as defined in
section 257101 of this title); and
(ii) is a small business concern owned and controlled
by women (as defined in that section);
(D)(i) is a subcontractor for a small business
concern owned and controlled by women (as defined in
257101 of this title) that is not less than 51 percent
owned by 1 or more women who are economically
disadvantaged (and such ownership is determined without
regard to any community property law);
(ii) is small business concern owned and controlled
by women (as defined in that section) that is not less
than 51 percent owned by 1 or more women who are
economically disadvantaged (and such ownership is
determined without regard to any community property
law);
(E)(i) is a subcontractor for a qualified HUBZone
small business concern; and
(ii) is a qualified HUBZone small business concern;
or
(F)(i) is a subcontractor for a small business
concern owned and controlled by service-disabled
veterans; and
(ii) is a small business concern owned and controlled
by service-disabled veterans.
(b) In General.--If awarded a contract under the business development
program, chapter 257, 251101 of this title, the HUBZone program, or
chapter 255, a covered small business concern--
(1) in the case of a contract for services, shall not expend
on subcontractors more than 50 percent of the amount paid to
the covered small business concern under the contract;
(2) in the case of a contract for supplies (other than from a
regular dealer in the supplies), shall not expend on
subcontractors more than 50 percent of the amount, less the
cost of materials, paid to the covered small business concern
under the contract;
(3) in the case of a contract for services and supplies
(other than from a regular dealer in the supplies)--
(A) shall determine for which category, services (as
described in paragraph (1)) or supplies (as described
in paragraph (2)), the greater percentage of the
contract is awarded;
(B) shall determine the amount awarded under the
contract for that category of services or supplies; and
(C) shall not expend on subcontractors, with respect
to the amount determined under subparagraph (B), more
than 50 percent of that amount; and
(4) in the case of a contract that is principally for
supplies from a regular dealer in the supplies (and is not a
contract principally for a service or for construction), shall
supply the product of a domestic manufacturer or processor that
is a small business concern, unless a waiver of the requirement
to supply the product of a domestic manufacturer or processor
that is a small business concern is granted--
(A) by the Administrator, after reviewing a
determination by the applicable contracting officer
that no manufacturer or processor that is a small
business concern can reasonably be expected to offer a
product meeting the specifications (including period
for performance) required by the contract; or
(B) by the Administrator for a product (or class of
products), after determining that no manufacturer or
processor that is a small business concern is available
to participate in the Federal procurement market.
(c) Similarly Situated Entities.--Contract amounts expended by a
covered small business concern on a subcontractor that is a similarly
situated entity shall not be considered to be subcontracted for
purposes of determining whether a covered small business concern failed
to comply with a requirement or limitation under subsection (b) or (e).
(d) Modifications of Percentages.--The Administrator may change, by
rule (after providing notice and an opportunity for public comment), a
percentage specified in paragraph (1), (2), or (3)(C) of subsection (b)
if the Administrator determines that the change is necessary to reflect
conventional industry practices among business concerns that are below
the numerical size standard for businesses in that industry category.
(e) Other Contracts.--
(1) In general.--With respect to a category of contracts to
which a requirement under subsection (b) does not apply, the
Administrator may establish, by rule (after providing notice
and an opportunity for public comment), a requirement that a
covered small business concern shall not expend on
subcontractors more than a specified percentage of the amount
paid to the covered small business concern under a contract in
that category.
(2) Uniformity.--A requirement established under paragraph
(1) shall apply to all covered small business concerns.
(3) Construction projects.--The Administrator shall
establish, through public rulemaking, requirements similar to
those specified in paragraph (1) to be applicable to contracts
for general and specialty construction and to contracts for any
other industry category not otherwise subject to the
requirements of that paragraph. The percentage applicable to
any such requirement shall be determined in accordance with
paragraph (1).
(f) Monitoring.--The Administrator shall take such actions as are
necessary to ensure that a Federal subcontracting reporting system in
existence on January 2, 2013, is modified to notify the Administrator,
the appropriate Director of the Office of Small and Disadvantaged
Business Utilization, and the appropriate contracting officer of a
failure to comply with a requirement or limitation under subsection (b)
or (e).
(g) Inapplicability of Requirement To Review and Justify Contracts.--
The requirements under section 802 of the National Defense
Authorization Act for Fiscal Year 2013 (10 U.S.C. 2304 note) do not
apply to a contract to which this section applies.
Subtitle III--Investment Division
Division A--General Provisions
Chapter 301--General Provisions
Sec.
301101. Definitions.
301102. Implementation of subtitle.
Sec. 301101. Definitions
In this subtitle:
(1) 3d party debt.--The term ``3d party debt'' means any
indebtedness for borrowed money, other than indebtedness owed
to the Administrator.
(2) Articles.--The term ``articles''--
(A) with respect to an incorporated body, means the
articles of incorporation of the incorporated body; and
(B) with respect to any other business entity, means
the functional equivalent of the articles of
incorporation of an incorporated body or other similar
document specified by the Administrator.
(3) Employee welfare benefit plan.--
(A) In general.--The term ``employee welfare benefit
plan'' has the meaning given the term in section 3 of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002).
(B) Inclusions.--The term ``employee welfare benefit
plan'' includes any similar plan not covered by the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.) that has been established and that
is maintained by the Federal Government or any State or
political subdivision, or any agency or instrumentality
thereof, for the benefit of employees.
(4) Energy saving debenture.--The term ``energy saving
debenture'' means a deferred interest debenture that--
(A) is issued at a discount;
(B) has a 5-year maturity or a 10-year maturity;
(C) requires no interest payment or annual charge for
the 1st 5 years;
(D) is restricted to energy saving qualified
investments; and
(E) is issued at no cost (as defined in section 502
of the Credit Reform Act of 1990 (2 U.S.C. 661a)) with
respect to purchasing and guaranteeing the debenture.
(5) Energy saving qualified investment.--The term ``energy
saving qualified investment'' means an investment in a small
business concern that is primarily engaged in researching,
manufacturing, developing, or providing products, goods, or
services that reduce the use or consumption of nonrenewable
energy resources.
(6) Leverage.--The term ``leverage'' includes--
(A) a debenture purchased or guaranteed by the
Administrator;
(B) a participating security purchased or guaranteed
by the Administrator; and
(C) a preferred security outstanding as of October 1,
1995.
(7) License.--The term ``license'' means a license to operate
as a small business investment company issued by the
Administrator to a company under section 303102 of this title.
(8) Licensee.--
(A) In general.--The term ``licensee'' means a
company that is issued a license.
(B) Inclusion.--The term ``licensee'' includes a
specialized small business investment company.
(9) Limited liability company.--The term ``limited liability
company'' means a business entity that is organized and
operating in accordance with a State limited liability company
statute approved by the Administrator.
(10) Long-term.--The term ``long-term'', used in connection
with equity capital or loan funds invested in a small business
concern or smaller enterprise, means a period of time of not
less than 1 year.
(11) Low-income geographic area.--The term ``low-income
geographic area'' means--
(A) a population census tract (or in the case of an
area that is not tracted for population census tracts,
the equivalent county division, as defined by the
Bureau of the Census of the Department of Commerce for
purposes of defining poverty areas), if--
(i) the poverty rate for the population
census tract is not less than 20 percent;
(ii)(I) in the case of a population census
tract that is located within a metropolitan
area, 50 percent or more of the households in
the population census tract have an income
equal to less than 60 percent of the area
median gross income; or
(II) in the case of a population census tract
that is not located within a metropolitan area,
the median household income for the census
tract does not exceed 80 percent of the
statewide median household income; or
(iii) as determined by the Administrator
based on objective criteria, a substantial
population of low-income individuals reside, an
inadequate access to investment capital exists,
or other indications of economic distress exist
in the population census tract; or
(B) an area located within--
(i) a HUBZone;
(ii) an urban empowerment zone or urban
enterprise community (as designated by the
Secretary of Housing and Urban Development); or
(iii) a rural empowerment zone or rural
enterprise community (as designated by the
Secretary of Agriculture).
(12) Management official.--The term ``management official''
means an officer, director, general partner, manager, employee,
agent, or other participant in the management or conduct of the
affairs of a licensee.
(13) Member.--The term ``member'', with respect to a licensee
that is a limited liability company, means--
(A) a holder of an ownership interest in the limited
liability company; or
(B) a person otherwise admitted to membership in the
limited liability company.
(14) Participating security.--The term ``participating
security'' includes--
(A) preferred stock, a preferred limited partnership
interest, or a similar instrument; and
(B) a debenture under the terms of which interest is
payable only to the extent of earnings.
(15) Pension plan.--
(A) In general.--The term ``pension plan'' has the
meaning given the term in section 3 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002).
(B) Inclusions.--The term ``pension plan'' includes--
(i) a public or private pension or retirement
plan subject to the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1001 et seq.);
and
(ii) any similar plan not covered by that Act
that is established and maintained by the
Federal Government or any State or political
subdivision, or any agency or instrumentality
thereof, for the benefit of employees.
(16) Private capital.--
(A) In general.--The term ``private capital'' means
the sum of--
(i)(I) the paid-in capital and paid-in
surplus of a corporate licensee;
(II) the contributed capital of the partners
of a partnership licensee; or
(III) the equity investment of the members of
a limited liability company licensee; and
(ii) subject to subparagraph (B), unfunded
binding commitments, from investors that meet
criteria established by the Administrator, to
contribute capital to the licensee.
(B) Limitation.--An unfunded commitment described in
subparagraph (A)(ii) may be counted as private capital
for purposes of approval by the Administrator of a
request for leverage, but leverage shall not be funded
based on such a commitment.
(C) Exclusions.--The term ``private capital'' does
not include--
(i) funds borrowed by a licensee from any
source;
(ii) funds obtained through the issuance of
leverage; or
(iii) funds obtained directly or indirectly
from a Federal, State, or local government, or
any government agency or instrumentality,
except for--
(I) funds obtained from the business
revenues (excluding any governmental
appropriation) of a federally chartered
or government-sponsored corporation
established before October 1, 1987;
(II) funds invested by an employee
welfare benefit plan or pension plan;
and
(III) qualified nonprivate funds (if
the investors of the qualified
nonprivate funds do not control,
directly or indirectly, the management,
board of directors, general partners,
or members of the licensee).
(17) Qualified hubzone small business concern.--The term
``qualified HUBZone small business concern'' has the meaning
given the term in section 101102 of this title, except that the
exception stated in paragraph (19)(B) of this section applies.
(18) Qualified nonprivate funds.--The term ``qualified
nonprivate funds'' means--
(A) funds directly or indirectly invested in an
applicant or licensee on or before August 16, 1982, by
any Federal agency, other than SBA, under a provision
of law that explicitly requires the inclusion of such
funds in the definition of the term ``private
capital'';
(B) funds directly or indirectly invested in an
applicant or licensee by a Federal agency under a
provision of law enacted after September 4, 1992, that
explicitly requires the inclusion of those funds in the
definition of the term ``private capital''; and
(C) funds invested in an applicant or licensee by 1
or more State or local government entities (including
any guarantee extended by such an entity) in an
aggregate amount that does not exceed 33 percent of the
private capital of the applicant or licensee.
(19) Small business concern.--
(A) In general.--The term ``small business concern''
has the meaning given the term in section 101103 of
this title, except as provided in subparagraph (B).
(B) Exception.--For purposes of this subtitle, in
determining whether a business concern is a small
business concern--
(i) an investment by a venture capital firm,
investment company (including a small business
investment company), employee welfare benefit
plan, pension plan, trust, foundation, or
endowment that is exempt from Federal income
taxation--
(I) shall not cause a business
concern to be considered not
independently owned and operated
regardless of the allocation of control
during the investment period under any
investment agreement between the
business concern and the entity making
the investment;
(II) shall be disregarded in
determining whether a business concern
satisfies size standards established
under section 101103 of this title; and
(III) shall be disregarded in
determining whether a small business
concern is a smaller enterprise; and
(ii) in determining whether a business
concern satisfies net income standards
established under section 101103 of this title,
if the business concern is not required by law
to pay Federal income taxes at the enterprise
level, but is required to pass income through
to the shareholders, partners, beneficiaries,
or other equitable owners of the business
concern, the net income of the business concern
shall be determined by allowing a deduction in
an amount equal to the sum of--
(I) if the business concern is not
required by law to pay State (and
local, if any) income taxes at the
enterprise level, the net income
(determined without regard to this
subparagraph), multiplied by the
marginal State income tax rate (or by
the combined State and local income tax
rates, as applicable) that would apply
if the business concern were a
corporation; and
(II) the net income (so determined)
less any deduction for State (and
local) income taxes calculated under
subclause (I), multiplied by the
marginal Federal income tax rate that
would apply if the business concern
were a corporation.
(20) Small business concern owned and controlled by service-
disabled veterans.--The term ``small business concern owned and
controlled by service-disabled veterans'' has the meaning given
the term in section 101102 of this title, except that the
exception stated in paragraph (19)(B) of this section applies.
(21) Small business concern owned and controlled by socially
and economically disadvantaged individuals.--The term ``small
business concern owned and controlled by socially and
economically disadvantaged individuals'' has the meaning given
the term in section 101102 of this title, except that the
exception stated in paragraph (19)(B) of this section applies.
(22) Small business concern owned and controlled by
veterans.--The term ``small business concern owned and
controlled by veterans'' has the meaning given the term in
section 101102 of this title, except that the exception stated
in paragraph (19)(B) of this section applies.
(23) Small business investment company.--The term ``small
business investment company'' means a licensee.
(24) Smaller enterprise.--
(A) In general.--The term ``smaller enterprise''
means a small business concern that, together with its
affiliates--
(i) has--
(I) a net financial worth of not more
than $6,000,000, as of the date on
which assistance is provided under this
subtitle to that small business
concern; and
(II) an average net income, for the
2-year period preceding the date on
which assistance is provided under this
subtitle to that small business
concern, of not more than $2,000,000,
after Federal income taxes (excluding
any carryover losses); or
(ii) satisfies the North American Industry
Classification System size standards
established by the Administrator for the
industry in which the small business concern is
primarily engaged.
(B) Determination of net income.--For purposes of
subparagraph (A)(i)(II), if a small business concern is
not required by law to pay Federal income tax at the
enterprise level, but is required to pass income
through to the shareholders, partners, beneficiaries,
or other equitable owners of the small business
concern, the net income of the small business concern
shall be determined by deducting from the gross income
of the small business concern--
(i) in the case of a small business concern
that is required by law to pay State (and
local, if any) income taxes at the enterprise
level, the amount that is equal to the net
income of the small business concern determined
without regard to this clause, multiplied by
the marginal Federal income tax rate that would
apply if the small business concern were a
corporation; or
(ii) in the case of a small business concern
that is not required by law to pay State (and
local, if any) income taxes at the enterprise
level, the amount that is equal to the sum of--
(I) the net income of the small
business concern determined without
regard to this clause, multiplied by
the marginal State income tax rate (or
by the combined State and local income
tax rates, as applicable) that would
apply if the small business concern
were a corporation; and
(II) the net income of the small
business concern determined without
regard to this clause, less any
deduction for State (and local) income
taxes calculated under subclause (I),
multiplied by the marginal Federal
income tax rate that would apply if the
business concern were a corporation.
(25) Specialized small business investment company.--The term
``specialized small business investment company'' means a
company that--
(A) invests solely in small business concerns that
contribute to a well-balanced national economy by
facilitating ownership in small business concerns by
persons whose participation in the free enterprise
system is hampered because of social or economic
disadvantages;
(B) is organized or chartered under a State business
or nonprofit corporations statute or formed as a
limited partnership; and
(C) was licensed under subsection (d) of section 301
of the Small Business Investment Act of 1958 (15 U.S.C.
681(d)), as in effect before September 30, 1996.
(26) State.--The term ``State'' includes a State, District of
Columbia, Puerto Rico, and any other territory (including a
possession) of the United States.
Sec. 301102. Implementation of subtitle
The Administrator--
(1) shall carry out this subtitle so as to improve and
stimulate the national economy in general and the small
business segment of the economy in particular by establishing a
program to stimulate and supplement the flow of private equity
capital and long-term loan funds that--
(A) small business concerns need for the sound
financing of their business operations and for their
growth, expansion, and modernization; and
(B) are not available in adequate supply; and
(2) in doing so--
(A) shall ensure the maximum participation of private
financing sources;
(B) shall ensure that any financial assistance
provided under this subtitle does not result in a
substantial increase of unemployment in any area of the
country; and
(C) in the award of financial assistance under this
subtitle, when practicable, shall accord priority to
small business concerns that lease or purchase
equipment and supplies produced in the United States
and encourage small business concerns that receive
assistance under this subtitle to continue to lease or
purchase equipment and supplies produced in the United
States.
Division B--Investment Programs
Chapter 303--Small Business Investment Company Program
Sec.
303101. Requirements for licensing.
303102. Licensing procedure.
303103. Financial institution investments.
303104. Borrowing power.
303105. Equity capital for small business concerns.
303106. Long-term loans to small business concerns.
303107. Limitation on amount of financing.
303108. Cooperation with banks and other investors or lenders.
303109. Advisory services; Federal Reserve Banks as depositories or
fiscal agents; investment of funds.
303110. Nonliability of the United States.
303111. Certifications of eligibility.
303112. Interest rates.
303113. Conflicts of interest.
303114. Ineligibility of guaranteed obligations for purchase by Federal
Financing Bank.
303115. Trust certificates.
303116. Regulations.
303117. Unlawful acts and omissions.
303118. Investigations; examinations; valuations.
303119. Revocation and suspension of licenses; cease and desist orders.
303120. Removal or suspension of, or prohibition of participation by,
management officials.
303121. Direct civil enforcement actions.
303122. Jurisdiction; service of process.
Sec. 303101. Requirements for licensing
(a) In General.--To receive or hold a license to operate as a small
business investment company under this chapter, a company shall meet
the requirements of this section.
(b) Organization.--The company shall be an incorporated body, limited
liability company, or limited partnership organized and chartered or
otherwise existing under State law solely for the purpose of performing
the functions and conducting the activities contemplated under this
chapter.
(c) Succession.--The company--
(1) if it is an incorporated body, shall have succession for
a period of not less than 30 years unless it is sooner
dissolved by its shareholders; and
(2) if it is a limited partnership, shall have succession for
a period of not less than 10 years.
(d) Powers.--The company shall possess the powers reasonably
necessary to perform the functions and conducting the activities
contemplated under this chapter.
(e) Area of Operation.--The area in which the company is to conduct
its operations, and the establishment of branch offices or agencies (if
authorized by the articles), shall be subject to the approval of the
Administrator.
(f) Articles.--
(1) In general.--The articles of the company shall specify in
general terms--
(A) the purposes for which the company is formed;
(B) the name of the company;
(C) the area or areas in which its operations are to
be carried on;
(D) the place where its principal office is to be
located; and
(E) the amount and classes of its shares of capital
stock.
(2) Other provisions.--The articles of the company may
contain any other provisions not inconsistent with this chapter
that the company may see fit to adopt for the regulation of its
business and the conduct of its affairs.
(3) Approval.--The articles of the company and any amendments
to the articles adopted from time to time shall be subject to
the approval of the Administrator.
(g) Capital Requirements.--
(1) In general.--Except as provided in paragraph (2), the
private capital of the company shall be not less than--
(A) $5,000,000; or
(B) $10,000,000, with respect to a company that seeks
authority to issue participating securities to be
purchased or guaranteed by the Administrator under this
chapter.
(2) Exceptions.--
(A) No unreasonable risk of default or loss.--
(i) In general.--The Administrator may, on a
showing of special circumstances and good
cause, permit the private capital of a company
described in paragraph (1)(B) to be less than
$10,000,000, but not less than $5,000,000, if
the Administrator determines that doing so
would not create or otherwise contribute to an
unreasonable risk of default or loss to the
Federal Government.
(ii) Companies licensed before september 30,
1996.--The Administrator may approve leverage
for a licensee licensed under subsection (c) or
(d) of section 301 of the Small Business
Investment Act of 1958 (15 U.S.C. 681(c), (d))
before September 30, 1996, that does not meet
the requirements of paragraph (1) if--
(I) the licensee certifies in writing
that not less than 50 percent of the
aggregate dollar amount of its
financings will be provided to smaller
enterprises; and
(II) the Administrator determines
that doing so would not create or
otherwise contribute to an unreasonable
risk of default or loss to the Federal
Government.
(B) Viable business plan and reasonable timetable.--
(i) In general.--Notwithstanding any other
provision of this chapter, the Administrator
may, on a showing of special circumstances and
good cause, issue a license with respect to a
company that would otherwise be issued a
license, except that the company does not
satisfy the requirements of paragraph (1), if
the company--
(I) has private capital of not less
than $3,000,000; and
(II) has a viable business plan
reasonably projecting profitable
operations and a reasonable timetable
for achieving a level of private
capital that satisfies the requirements
of paragraph (1).
(ii) Leverage.--A company that is licensed
pursuant to the exception provided in clause
(i) shall not be eligible to receive leverage
as a licensee until the company satisfies the
requirements of paragraph (1).
(3) Adequacy.--In addition to the requirements of paragraph
(1), the Administrator shall--
(A) determine whether the private capital of the
company is adequate to ensure a reasonable prospect
that the company will be operated soundly and
profitably and managed actively and prudently in
accordance with its articles;
(B) determine that the company, both prior to
licensing and prior to approving any request for
financing, will be able to make periodic payments on
any debt of the company that is interest-bearing; and
(C) take into consideration--
(i) the income that the company anticipates
on its contemplated investments;
(ii) the experience of the company's owners
and managers;
(iii) the history of the company as an
entity, if any; and
(iv) the company's financial resources.
(h) Diversification of Ownership.--The Administrator shall ensure
that the management of a licensee licensed after September 30, 1996, is
sufficiently diversified from and unaffiliated with the ownership of
the licensee in a manner that ensures independence and objectivity in
the financial management and oversight of the investments and
operations of the licensee.
Sec. 303102. Licensing procedure
(a) Submission of Application.--An applicant for a license to operate
as a small business investment company under this chapter shall submit
to the Administrator an application, in such form and including such
documentation as the Administrator may prescribe.
(b) Status.--Not later than 90 days after receipt by the
Administrator of an application under this section, the Administrator
shall provide the applicant with a written report detailing the status
of the application and any requirements remaining for completion of the
application.
(c) Approval or Disapproval.--Within a reasonable time after
receiving a completed application submitted in accordance with this
section (including such requirements as the Administrator may prescribe
by regulation), the Administrator shall--
(1) approve the application and issue a license to the
applicant if the requirements of this section are satisfied; or
(2) disapprove the application and notify the applicant in
writing of the disapproval.
(d) Matters To Be Considered.--In reviewing and processing an
application under this section, the Administrator--
(1) shall determine whether--
(A) the applicant meets the requirements of
subsections (g) and (h) of section 303101 of this
title; and
(B) the management of the applicant is qualified and
has the knowledge, experience, and capability necessary
to comply with this chapter;
(2) shall take into consideration--
(A) the need for and availability of financing for
small business concerns in the geographic area in which
the applicant is to commence business;
(B) the general business reputation of the owners and
management of the applicant; and
(C) the probability of successful operations of the
applicant, including adequate profitability and
financial soundness; and
(3) shall not take into consideration any projected shortage
or unavailability of leverage.
(e) Fees.--
(1) In general.--The Administrator may prescribe fees to be
paid by an applicant for a license.
(2) Use of amounts.--Fees collected under this subsection--
(A) shall be deposited in the account for salaries
and expenses of SBA; and
(B) are authorized to be appropriated solely to cover
the costs of licensing examinations.
Sec. 303103. Financial institution investments
(a) Certain Banks.--Notwithstanding section 23A of the Federal
Reserve Act (12 U.S.C. 371c), a national bank, or a member bank of the
Federal Reserve System or nonmember insured bank to the extent
permitted under applicable State law, may invest in 1 or more
licensees, or in an entity established to invest solely in licensees,
except that in no event shall the total amount of such investments of
any such bank exceed 5 percent of the capital and surplus of the bank.
(b) Federal Savings Associations.--Notwithstanding any other
provision of law, a Federal savings association may invest in 1 or more
licensees, or in an entity established to invest solely in licensees,
except that in no event shall the total amount of such investments by a
Federal savings association exceed 5 percent of the capital and surplus
of the Federal savings association.
Sec. 303104. Borrowing power
(a) Authority To Issue Obligations.--A licensee shall have authority
to borrow money and to issue its securities, promissory notes, or other
obligations under such general conditions and subject to such
limitations and regulations as the Administrator may prescribe.
(b) Debentures and Participating Securities.--
(1) Authority to purchase or guarantee.--To encourage the
formation and growth of small business investment companies,
the Administrator may, when authorized in an appropriation Act,
purchase, or guarantee the timely payment of all principal and
interest as scheduled on, debentures or participating
securities issued by a licensee.
(2) Terms and conditions.--A purchase or guarantee under
paragraph (1) may be made on such terms and conditions as the
Administrator considers appropriate, under regulations
prescribed by the Administrator.
(3) Full faith and credit of the united states.--The full
faith and credit of the United States is pledged to the payment
of all amounts that may be required to be paid under any
guarantee under this subsection.
(4) Debentures.--
(A) Subordination.--A debenture purchased or
guaranteed by the Administrator under this subsection
shall be subordinate to any other debenture bond,
promissory note, or other debt or obligation of a
licensee, unless the Administrator, in the exercise of
reasonable investment prudence and in consideration of
the financial soundness of the licensee, determines
otherwise.
(B) Term; interest.--A debenture purchased or
guaranteed by the Administrator under this subsection--
(i) may be issued for a term of not to exceed
15 years; and
(ii) shall bear interest at a rate not less
than--
(I) a rate determined by the
Secretary of the Treasury taking into
consideration the current average
market yield on outstanding marketable
obligations of the United States with
remaining periods to maturity
comparable to the average maturities on
such debentures, adjusted to the
nearest 0.125 percent; plus
(II) in the case of a debenture
obligated after September 30, 2001, an
additional charge in an amount
established annually by the
Administrator as necessary to reduce to
zero the cost (as defined in section
502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a)) to the
Administrator of purchasing and
guaranteeing debentures under this
chapter, which amount--
(aa) may not exceed 1.38
percent per year; and
(bb) which shall be paid to
and retained by the
Administrator.
(5) Other terms and conditions.--A debenture or participating
security purchased or guaranteed under this subsection shall
also contain such other terms as the Administrator may
determine.
(6) Total amount.--The total amount of debentures and
participating securities of a licensee that may be guaranteed
by the Administrator and outstanding shall not exceed 300
percent of the private capital of the licensee.
(7) Maximum leverage.--
(A) In general.--The maximum amount of outstanding
leverage made available to any 1 licensee shall not
exceed the lesser of--
(i) 300 percent of the licensee's private
capital; or
(ii) $150,000,000.
(B) Multiple licenses under common control.--The
maximum amount of outstanding leverage made available
to 2 or more licensees that are commonly controlled (as
determined by the Administrator) and not under capital
impairment shall not exceed $350,000,000.
(C) Investments in low-income geographic areas.--
(i) Calculation of outstanding leverage.--In
calculating the outstanding leverage of a
licensee for the purposes of subparagraph (A),
the Administrator shall not include the amount
of the cost basis of any equity investment made
by the licensee in a smaller enterprise located
in a low-income geographic area, to the extent
that the total of such amounts does not exceed
50 percent of the licensee's private capital.
(ii) Maximum leverage.--
(I) In general.--The maximum amount
of outstanding leverage made available
to--
(aa) any 1 licensee described
in subclause (II) shall not
exceed the lesser of--
(AA) 300 percent of
private capital of the
licensee; or
(BB) $175,000,000;
and
(bb) 2 or more licensees
described in subclause (II)
that are under common control
(as determined by the
Administrator) shall not exceed
$250,000,000.
(II) Licensees.--A licensee referred
to in subclause (I) is a company that--
(aa) applies for and receives
a license under section 303102
of this title after September
30, 2009; and
(bb) certifies in writing
that not less than 50 percent
of the dollar amount of
investments of the company
shall be made in companies that
are located in a low-income
geographic area.
(D) Investments in energy saving small businesses.--
(i) In general.--Subject to clause (ii), in
calculating the outstanding leverage of a
company for purposes of subparagraph (A), the
Administrator shall exclude the amount of the
cost basis of any energy saving qualified
investment in a smaller enterprise made in
fiscal year 2009 or any fiscal year thereafter
by a company licensed in the applicable fiscal
year.
(ii) Limitations.--
(I) Amount of exclusion.--The amount
excluded under clause (i) for a company
shall not exceed 33 percent of the
private capital of the company.
(II) Maximum investment.--A company
shall not make an energy saving
qualified investment in any 1 entity in
an amount equal to more than 20 percent
of the private capital of the company.
(III) Other terms.--The exclusion of
amounts under clause (i) shall be
subject to such terms as the
Administrator may impose to ensure that
there is no cost (as defined in section
502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a)) with respect to
purchasing or guaranteeing any
debenture involved.
(8) Authority to have outstanding both guaranteed debentures
and guaranteed participating securities.--Subject to the dollar
and percentage limits stated in paragraphs (6) and (7), a
licensee may issue and have outstanding both guaranteed
debentures and guaranteed participating securities so long as
the total amount of participating securities outstanding does
not exceed 200 percent of the amount of the licensee's private
capital.
(c) 3d Party Debt.--The Administrator--
(1) shall not permit a licensee having outstanding leverage
to incur 3d party debt that would create or contribute to an
unreasonable risk of default or loss to the Federal Government;
and
(2) shall permit a licensee having outstanding leverage to
incur 3d party debt only on such terms and subject to such
conditions as the Administrator may establish by regulation or
otherwise.
(d) Investments in Smaller Enterprises.--The Administrator shall
require a licensee, as a condition of approval of an application for
leverage, to certify in writing that not less than 25 percent of the
licensee's aggregate dollar amount of financings shall be provided to
smaller enterprises.
(e) Capital Impairment.--
(1) In general.--Before approving an application for leverage
submitted by a licensee, the Administrator--
(A) shall determine that the private capital of the
licensee meets the requirements of section 303101(g) of
this title; and
(B) shall determine that the private capital of the
licensee has not been impaired to such an extent that
the issuance of additional leverage would create or
otherwise contribute to an unreasonable risk of default
or loss to the Federal Government, taking into
account--
(i) the nature of the assets of the licensee;
(ii) the amount and terms of any 3d party
debt owed by the licensee; and
(iii) any other factors that the
Administrator determines to be relevant.
(2) Uniform applicability.--Any regulation issued by the
Administrator to implement this subsection that applies to any
licensee with outstanding leverage obtained before the
effective date of the regulation shall apply uniformly to all
licensees with outstanding leverage obtained before that
effective date.
(f) Redemption or Repurchase of Preferred Stock.--Notwithstanding any
other provision of law--
(1) the Administrator may allow the issuer of any preferred
stock sold to the Administrator before November 1, 1989, to
redeem or repurchase the stock, on payment to the Administrator
of an amount less than the par value of the stock, for a
repurchase price determined by the Administrator after
consideration of all relevant factors, including--
(A) the market value of the stock;
(B) the value of benefits provided and anticipated to
accrue to the issuer;
(C) the amount of dividends paid, accrued, and
anticipated; and
(D) the estimate of the Administrator of any
anticipated redemption; and
(2) any amounts received by the Administrator from the
repurchase of preferred stock shall be available solely to
provide debenture leverage to licensees having 50 percent or
more in aggregate dollar amount of their financings invested in
smaller enterprises.
(g) Guarantee of Payment of, and Authority To Purchase, Participating
Securities.--
(1) Definitions.--In this subsection:
(A) Combined capital.--The term ``combined capital''
means the aggregate amount of private capital and
outstanding leverage.
(B) Equity capital.--
(i) In general.--The term ``equity capital''
means common or preferred stock or a similar
instrument.
(ii) Inclusions.--The term ``equity capital''
includes subordinated debt that has equity
features, is not amortized, and provides for
interest payments from appropriate sources, as
determined by the Administrator.
(C) Management expense.--
(i) In general.--The term ``management
expense'' includes--
(I) salaries;
(II) office expenses; and
(III) the costs of travel, business
development, office and equipment
rental, bookkeeping, and the
development, investigation and
monitoring of investments.
(ii) Exclusions.--The term ``management
expense'' does not include--
(I) the cost of services provided by
specialized outside consultants,
outside lawyers, and outside auditors
that perform services not generally
expected of a venture capital company;
or
(II) the cost of services provided by
any affiliate of a licensee that are
not part of the normal process of
making and monitoring venture capital
investments.
(D) Maximum tax liability.--The term ``maximum tax
liability'' means the amount of income allocated to
each partner, shareholder, or member of a licensee
(including an allocation to the Administrator as if the
Administrator were a taxpayer) for Federal income tax
purposes in the income tax return filed or to be filed
by the licensee with respect to the fiscal year of the
licensee immediately preceding a distribution described
in clause (i) or (ii) of paragraph (10)(A), multiplied
by the highest combined marginal Federal and State
income tax rates for corporations or individuals,
whichever is higher, on each type of income included in
the return.
(E) Prioritized payment.--The term ``prioritized
payment'' includes--
(i) a dividend on stock;
(ii) interest on a debenture described in
section 301101(14)(B) of this title; and
(iii) a priority return on a preferred
limited partnership interest that is paid only
to the extent of earnings.
(F) State income tax.--The term ``State income tax'',
in reference to the State income tax liability of a
licensee, means the income tax of the State in which a
licensee's principal place of business is located.
(2) Authority.--
(A) In general.--To encourage licensees to provide
equity capital to small business concerns, the
Administrator may guarantee the payment of the
redemption price and prioritized payments on
participating securities issued by licensees.
(B) Purchase by trust or pool.--A trust or a pool
acting on behalf of the Administrator may purchase
participating securities guaranteed under subparagraph
(A).
(3) Terms and conditions.--A guarantee or purchase under
paragraph (2) shall be made on such terms and conditions as the
Administrator shall establish by regulation.
(4) Redemption of participating securities.--
(A) In general.--A participating security shall be
redeemed not later than 15 years after its date of
issuance for an amount equal to 100 percent of the
original issue price plus the amount of any accrued
prioritized payment.
(B) Continued obligation.--
(i) In general.--If, at the time at which a
participating security is redeemed, whether as
scheduled or in advance, the issuing licensee--
(I) has not paid all accrued
prioritized payments in full as
provided in paragraph (5); and
(II) has not sold or otherwise
disposed of all investments subject to
profit distributions under paragraph
(11);
the licensee's obligation to pay accrued and
unpaid prioritized payments shall continue, and
payment shall be made from the realized gain,
if any, on the disposition of such investments,
but if on disposition there is no realized
gain, the obligation to pay accrued and unpaid
prioritized payments shall be extinguished.
(ii) Limitation.--Between the date on which a
participating security is redeemed and the date
on which the licensee has paid all accrued
prioritized payments in full and has sold or
otherwise disposed of all investments subject
to profit distributions, the licensee shall not
make any in-kind distributions of such
investments unless the licensee pays to the
Administrator such sums, up to the amount of
the unrealized appreciation on such
investments, as are necessary to pay in full
the accrued prioritized payments.
(5) Prioritized payments.--Prioritized payments on a
participating security shall be preferred and cumulative and
payable out of the retained earnings available for distribution
(as defined by the Administrator) of the issuing licensee at--
(A) a rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of
the United States with remaining periods to maturity
comparable to the average maturities on such
securities, adjusted to the nearest 0.125 percent; plus
(B) in the case of a participating security obligated
after September 30, 2001, an additional charge, in an
amount established annually by the Administrator, as
necessary to reduce to zero the cost (as defined in
section 502 of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a)) to the Administrator of purchasing and
guaranteeing participating securities under this
chapter, which amount may not exceed 1.46 percent per
year, and which shall be paid to and retained by the
Administrator.
(6) Seniority of participating securities on liquidation of
licensee.--In the event of liquidation of a licensee, a
participating security issued by the licensee shall be senior
in priority for all purposes to any other equity interest in
the licensee without regard to whether the participating
security was issued before, on, or after the date on which the
other equity interest was issued.
(7) Investment in equity capital.--A licensee that issues a
participating security shall commit to invest or shall invest
an amount equal to the outstanding face value of the
participating security solely in equity capital.
(8) Limitation on amount of debt.--The only debt (other than
leverage obtained under this chapter) that a licensee that
issues a participating security may have outstanding shall be
temporary debt in an amount that is equal to not more than 50
percent of the amount of private capital of the licensee.
(9) Use of proceeds to pay principal on debentures.--The
Administrator may permit the proceeds of a participating
security issued by a licensee to be used to pay the principal
amount due on an outstanding debenture guaranteed by the
Administrator if--
(A) the licensee has outstanding equity capital
invested in an amount equal to the amount of the
debenture being refinanced; and
(B) the Administrator receives profit participation
on such terms and conditions as the Administrator may
determine, but not to exceed the percentages specified
in paragraph (11).
(10) Distributions; return of capital.--
(A) Distributions to partners, shareholders, and
members.--
(i) Annual distributions.--Notwithstanding
subparagraph (B), if a licensee is operating as
a limited partnership or as a subchapter S
corporation or an equivalent pass-through
entity for tax purposes and if there are no
accumulated and unpaid prioritized payments,
the licensee may make annual distributions to
the partners, shareholders, or members in
amounts not greater than each partner's,
shareholder's, or member's maximum tax
liability.
(ii) Interim distributions.--In addition to
an annual distribution, a licensee may make a
distribution under this subparagraph at any
time during any calendar quarter based on an
estimate of the maximum tax liability.
(iii) Excess distribution.--If a licensee
makes 1 or more interim distributions for a
calendar year, and the aggregate amount of
those distributions exceeds the maximum amount
that the licensee could have distributed based
on a single annual computation, any subsequent
distribution by the licensee under this
subparagraph shall be reduced by an amount
equal to the excess amount distributed.
(B) Distributions to investors.--After making any
distributions as provided in subparagraph (A), a
licensee with participating securities outstanding may
distribute the balance of income to its investors
(including the Administrator, in the percentages
specified in paragraph (11)) if there are no
accumulated and unpaid prioritized payments and if all
amounts due the Administrator under paragraph (11) have
been paid in full, subject to the following conditions:
(i) As of the date of the proposed
distribution, if the amount of leverage
outstanding is more than 200 percent of the
amount of private capital, any amounts
distributed shall be made to private investors
and to the Administrator in the ratio of
leverage to private capital.
(ii) As of the date of the proposed
distribution, if the amount of leverage
outstanding is more than 100 percent but not
more than 200 percent of the amount of private
capital, 50 percent of any amounts distributed
shall be made to the Administrator and 50
percent shall be made to the private investors.
(iii) If the amount of leverage outstanding
is 100 percent, or less, of the amount of
private capital, the ratio shall be that for
distribution of profits as provided in
paragraph (11).
(iv) Any amount received by the Administrator
under clause (i) or (ii) shall be applied 1st
as profit participation as provided in
paragraph (11), and any remainder shall be
applied as a prepayment of the principal amount
of the participating securities or debentures.
(C) Return of capital to investors.--
(i) In general.--After making any
distributions under subparagraph (A), a
licensee with participating securities
outstanding may return capital to its investors
(including the Administrator) if there are no
accumulated and unpaid prioritized payments and
if all amounts due the Administrator under
paragraph (11) have been paid in full.
(ii) Ratio.--Except as provided in clause
(iii), any distribution under this subparagraph
shall be made to private investors and to the
Administrator in the ratio of private capital
to leverage as of the date of the proposed
distribution.
(iii) No required distribution to
administrator.--If a licensee's amount of
leverage outstanding is less than 50 percent of
the amount of private capital or $10,000,000,
whichever is less, no distribution shall be
required to be made to the Administrator unless
the Administrator determines, on a case by case
basis, to require a distribution to the
Administrator to reduce the amount of
outstanding leverage to an amount less than
$10,000,000.
(11) Administrator's profit participation.--
(A) In general.--A licensee that issues participating
securities shall agree to allocate to the Administrator
a share of its profits determined by the relationship
of its private capital to the amount of participating
securities guaranteed by the Administrator in
accordance with the following:
(i) If the total amount of participating
securities is 100 percent of private capital or
less, the licensee shall allocate to the
Administrator a percentage share computed as--
(I) the amount of participating
securities; divided by
(II) the amount of private capital;
multiplied by
(III) 9 percent.
(ii) If the total amount of participating
securities is more than 100 percent but not
greater than 200 percent of private capital,
the licensee shall allocate to the
Administrator a percentage share computed as--
(I) 9 percent; plus
(II) 3 percent of--
(aa) the amount of
participating securities minus
the amount of private capital;
divided by
(bb) the amount of private
capital.
(B) Management expenses.--For purposes of computing
profit participation under this paragraph, except as
otherwise determined by the Administrator, the
management expenses of a licensee that issues
participating securities shall not be greater than 2.5
percent per year of the combined capital of the
company, plus $125,000 if the licensee's combined
capital is less than $20,000,000.
(C) Maximum percentage.--
(i) In general.--Notwithstanding any other
provision of this paragraph, unless required by
operation of clause (ii), the total percentage
required by this paragraph shall not exceed 12
percent.
(ii) Adjustment.--If, on the date on which a
participating security is marketed, the
interest rate on Treasury bonds with a maturity
of 10 years is a rate other than 8 percent, the
Administrator shall adjust the rate specified
in subparagraph (A), either higher or lower, by
the same percentage by which the Treasury bond
rate is higher or lower than 8 percent.
(D) Effect of paragraph.--This paragraph does not
create any ownership interest of the Administrator in a
licensee.
(12) In-kind distributions.--
(A) In general.--A licensee may make an in-kind
distribution of securities only if the securities are
publicly traded and marketable.
(B) Administrator's share.--
(i) In general.--A licensee shall deposit the
Administrator's share of an in-kind
distribution of securities for disposition with
a trustee designated by the Administrator, or,
at the option of the Administrator and with the
agreement of the licensee, the Administrator
may direct the licensee to retain the
Administrator's share.
(ii) Trustee.--A trustee designated by the
Administrator under clause (i) shall be a
person that is knowledgeable about and
proficient in the marketing of thinly traded
securities.
(iii) Sale.--If the licensee retains the
Administrator's share, the licensee shall sell
the Administrator's share and promptly remit
the proceeds to the Administrator.
(13) Additional restrictions and limitations.--Participating
securities guaranteed under this subsection shall be subject to
such restrictions and limitations, in addition to restrictions
and limitations specified in this subsection, as the
Administrator may determine.
(h) Computation of Amounts Due Under Participating Securities.--The
computation of amounts due the Administrator under participating
securities shall be subject to the following terms and conditions:
(1) The formula in subsection (g)(11) shall be computed
annually, and the Administrator shall receive distributions of
the Administrator's profit participation at the same time as
other investors in a licensee.
(2) The formula shall not be modified due to an increase in
the private capital unless the increase is provided for in a
proposed business plan submitted to and approved by the
Administrator.
(3) After a distribution is made, the Administrator's share
of the distribution shall not be recomputed or reduced.
(4) If a licensee prepays or repays a participating security,
the Administrator shall receive the requisite participation on
the distribution of profits due to any investments held by the
licensee on the date of the prepayment or repayment.
(5) A licensee that was licensed on or before March 31, 1993,
may exclude from profit participation all investments held on
that date. If such a licensee does so, the Administrator shall
determine the amount of the future expenses attributable to the
prior investment. If the licensee issues participating
securities to refinance debentures as authorized in subsection
(g)(9), the licensee may not exclude profits on existing
investments under this paragraph.
(i) Leverage Fee.--With respect to leverage granted by the
Administrator to a licensee, the Administrator shall collect from the
licensee a nonrefundable fee in an amount equal to 3 percent of the
face amount of the leverage in the following manner:
(1) 1 percent on the date on which the Administrator enters
into a commitment for leverage with the licensee.
(2) The balance of 2 percent (or 3 percent if no commitment
has been entered into by the Administrator) on the date on
which the leverage is drawn by the licensee.
(j) Calculation of Subsidy Rate.--All fees, interest, and profits
received and retained by the Administrator under this section shall be
included in the calculations made by the Director of the Office of
Management and Budget to offset the cost (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to the
Administrator of purchasing and guaranteeing debentures and
participating securities under this chapter.
(k) Periodic Issuance of Guarantees.--The Administrator shall issue
guarantees under this section--
(1) at periodic intervals of not less than every 12 months;
and
(2) at such shorter intervals as the Administrator considers
appropriate, taking into consideration the amount and number of
guarantees.
(l) Energy Saving Debentures.--In addition to any other authority
under this subtitle, a small business investment company licensed in
fiscal year 2009 or any fiscal year thereafter may issue energy saving
debentures.
Sec. 303105. Equity capital for small business concerns
(a) Function of Licensees.--It shall be a function of a licensee to
provide a source of equity capital for small business concerns in such
manner and under such terms as the licensee may determine in accordance
with the regulations of the Administrator.
(b) Conditions.--Before a licensee provides any capital to a small
business concern under this section--
(1) the licensee may require the small business concern to
refinance any or all of its outstanding indebtedness so that
the licensee is the only holder of any evidence of indebtedness
of the small business concern; and
(2) except as provided in regulations issued by the
Administrator, the small business concern shall agree that the
small business concern will not thereafter incur any
indebtedness without first securing the approval of the
licensee and giving the licensee the 1st opportunity to finance
the indebtedness.
(c) Direct or Cooperative Provision of Capital.--Equity capital
provided to an incorporated small business concern under this section
may be provided directly or in cooperation with other investors,
incorporated or unincorporated, through agreements to participate on an
immediate basis.
Sec. 303106. Long-term loans to small business concerns
(a) Authorization.--A licensee may make a loan, in the manner and
subject to the conditions described in this section, to a small
business concern to provide the small business concern with funds
needed for sound financing, growth, modernization, and expansion.
(b) Direct Loans; Loans on Participation Basis.--A loan made under
this section may be made directly or in cooperation with 1 or more
other lenders through an agreement to participate on an immediate or
deferred basis.
(c) Maximum Rate of Interest.--
(1) In general.--The maximum rate of interest for a
licensee's share of a loan made under this section shall be
determined by the Administrator.
(2) Basis of maximum rate.--The Administrator shall permit a
licensee that has issued debentures under this chapter to
charge a maximum rate of interest based on--
(A) the coupon rate of interest on the outstanding
debentures, determined on an annual basis; plus
(B) such other expenses of the licensee as may be
approved by the Administrator.
(d) Maturity.--A loan made under this section shall have a maturity
not exceeding 20 years.
(e) Soundness of Loan; Security.--A loan made under this section
shall be of such sound value, or so secured, as reasonably to ensure
repayment.
(f) Extension or Renewal.--A licensee that has made a loan to a small
business concern under this section may extend the maturity of or renew
the loan for additional periods, not exceeding 10 years, if the
licensee finds that the extension or renewal will aid in the orderly
liquidation of the loan.
Sec. 303107. Limitation on amount of financing
If a licensee has obtained financing from the Administrator and the
financing remains outstanding, the aggregate amount of obligations and
securities acquired and for which commitments may be issued by the
licensee under this chapter for any single small business concern shall
not, without the approval of the Administrator, exceed 10 percent of
the sum of--
(1) the private capital of the licensee; and
(2) the total amount of leverage projected by the licensee in
the licensee's business plan that was approved by the
Administrator at the time of the grant of the licensee's
license.
Sec. 303108. Cooperation with banks and other investors or lenders
(a) In General.--Under any circumstances in which it is practicable,
the operations of a licensee (including the generation of business) may
be undertaken in cooperation with banks or other investors or lenders,
and any servicing or initial investigation required for loans or
acquisitions of securities by the licensee under this chapter may be
handled through such banks or other investors or lenders on a fee
basis.
(b) Fees.--A licensee may receive fees for services rendered to banks
and other investors and lenders.
Sec. 303109. Advisory services; Federal Reserve Banks as depositories
or fiscal agents; investment of funds
(a) Advisory Services.--A licensee, under any circumstances in which
it is practicable, may--
(1) use the advisory services of the Federal Reserve System
and of the Department of Commerce that are available for and
useful to industrial and commercial businesses; and
(2) provide consulting and advisory services on a fee basis
and have on its staff persons competent to provide such
services.
(b) Federal Reserve Bank as Depository or Fiscal Agent.--A Federal
Reserve bank may act as a depository or fiscal agent for a licensee.
(c) Investment of Funds.--A licensee that was licensed before October
1, 2004, and has outstanding financings may invest funds not needed for
its operations--
(1) in direct obligations of, or obligations guaranteed as to
principal and interest by, the United States;
(2) in certificates of deposit or other accounts of federally
insured banks or other federally insured depository
institutions, if the certificates or other accounts mature or
are otherwise fully available not more than 1 year after the
date of the investment; or
(3) in mutual funds, securities, or other instruments that
consist of, or represent pooled assets of, investments
described in paragraph (1) or (2).
Sec. 303110. Nonliability of the United States
Except as expressly provided otherwise in this subtitle, nothing in
this subtitle or in any other provision of law shall be deemed to
impose any liability on the United States with respect to any
obligation entered into, or stocks issued, or commitments made, by a
licensee.
Sec. 303111. Certifications of eligibility
(a) Certification by Small Business Concern.--Before receiving
financial assistance from a licensee, a small business concern shall
certify in writing that the small business concern meets the applicable
eligibility requirements of this chapter.
(b) Certification by Licensee.--Before providing financial assistance
to a small business concern under this chapter, a licensee shall
certify in writing that--
(1) the licensee has reviewed the application for assistance
of the small business concern; and
(2) all documentation and other information supports the
eligibility of the applicant.
(c) Retention of Certifications.--A certificate made under subsection
(a) or (b) shall be retained by a licensee for the duration of the
financial assistance covered by the certificate.
Sec. 303112. Interest rates
(a) Definition of Interest.--In this section:
(1) In general.--The term ``interest'' means the maximum
mandatory sum, expressed in dollars or as a percentage rate,
that is payable with respect to a business loan amount received
by a small business concern.
(2) Exclusion.--The term ``interest'' does not include the
value, if any, of a contingent obligation (including a warrant,
royalty, or conversion right) granting a licensee an ownership
interest in the equity or increased future revenue of a small
business concern receiving the business loan.
(b) Interest Rate.--A licensee may charge interest on a loan at a
rate that does not exceed the maximum rate prescribed by regulation by
the Administrator for loans made by any licensee (determined without
regard to any State rate incorporated by the regulation).
(c) Preemption of State Law.--A State law (including a constitutional
provision) shall be preempted for purposes of subsection (a) with
respect to a loan if the loan is made--
(1) before the date on which the State adopts a law, or
certifies that the voters of the State have voted in favor of
any provision, constitutional or otherwise, that states
explicitly and by its terms that the State does not want this
section to apply with respect to loans made in the State; or
(2) on or after the date on which such a law is adopted or
such a certification is made, pursuant to a commitment to make
the loan that was entered into before the date on which the law
is adopted or the certification is made.
(d) Excessive Interest.--
(1) Forfeiture.--If the maximum rate of interest authorized
under subsection (a) on a loan made by a licensee exceeds the
rate that would be authorized by applicable State law if the
State law were not preempted under subsection (a), the charging
of interest at a rate in excess of the rate authorized by
subsection (a) shall be deemed a forfeiture of the greater of--
(A) all interest that the loan carries with it; or
(B) all interest that has been agreed to be paid on
the loan.
(2) Double recovery.--In the case of a loan with respect to
which there is a forfeiture of interest under paragraph (1),
the person that paid the interest may recover from the licensee
that made the loan, in a civil action commenced in a court of
appropriate jurisdiction not later than 2 years after the most
recent payment of interest, an amount equal to twice the amount
of the interest paid on the loan.
Sec. 303113. Conflicts of interest
(a) In General.--For the purpose of controlling conflicts of interest
that may be detrimental to small business concerns, to licensees, to
the shareholders, partners, or members of small business concerns or
licensees, or to the purposes of this subtitle, the Administrator shall
adopt regulations to govern transactions with--
(1) any officer, director, shareholder, partner, or member of
a licensee; or
(2) any person or concern in which any interest, direct or
indirect, financial or otherwise, is held by any officer,
director, shareholder, partner, or member of--
(A) a licensee; or
(B) any person or concern with an interest, direct or
indirect, financial or otherwise, in a licensee.
(b) Contents.--The regulations under subsection (a) shall include
appropriate requirements for public disclosure necessary to the
purposes of this section.
Sec. 303114. Ineligibility of guaranteed obligations for purchase by
Federal Financing Bank
No provision of law authorizes the Federal Financing Bank to
acquire--
(1) any obligation the payment of principal or interest on
which has at any time been guaranteed in whole or in part under
this chapter;
(2) any obligation that is an interest in an obligation
described in paragraph (1); or
(3) any obligation that is secured by, or substantially all
of the value of which is attributable to, an obligation
described in paragraph (1) or (2).
Sec. 303115. Trust certificates
(a) Issuance.--
(1) In general.--The Administrator may issue trust
certificates representing ownership of all or a fractional part
of--
(A) debentures issued by a licensee and guaranteed by
the Administrator under this chapter; or
(B) participating securities issued by a licensee and
purchased and guaranteed under section 303104 of this
title.
(2) Trust or pool.--A trust certificate issued under
paragraph (1) shall be based on and backed by a trust or pool
approved by the Administrator and composed solely of guaranteed
debentures or guaranteed participating securities.
(b) Guarantee.--
(1) In general.--The Administrator may, on such terms and
conditions as the Administrator considers appropriate,
guarantee the timely payment of the principal of and interest
on trust certificates issued by the Administrator (or an agent
of the Administrator) for purposes of this section.
(2) Limitation.--A guarantee shall be limited to the extent
of principal and interest on the guaranteed debentures or the
redemption price of and priority payments on the participating
securities that compose the trust or pool.
(3) Prepayment or redemption.--
(A) Reduction of guarantee.--If a debenture in a
trust or pool is prepaid or a participating security is
redeemed, voluntarily or involuntarily, or in the event
of default of a debenture or voluntary or involuntary
redemption of a participating security, the guarantee
of timely payment of principal and interest on the
related trust certificates shall be reduced in
proportion to the amount of principal and interest that
the prepaid debenture or redeemed participating
security and priority payments represent in the trust
or pool.
(B) Limitation on guarantee of interest.--Interest on
a prepaid or defaulted debenture or a priority payment
on a participating security shall accrue and be
guaranteed by the Administrator only through the date
of payment on the guarantee.
(C) Call of trust certificate.--During the term of a
trust certificate, the trust certificate may be called
for redemption due to prepayment or default of all
debentures or redemption, voluntary or involuntary, of
all participating securities residing in the trust or
pool.
(c) Full Faith and Credit of the United States.--The full faith and
credit of the United States is pledged to the payment of all amounts
that may be required to be paid under any guarantee of a trust
certificate issued by the Administrator (or an agent of the
Administrator) under this section.
(d) Fees.--
(1) Administrator.--The Administrator shall not collect a fee
for a guarantee under this section.
(2) Agent of the administrator.--This subsection does not
preclude an agent of the Administrator from collecting a fee
approved by the Administrator for performing the functions
described in subsection (f)(2).
(e) Subrogation; Ownership Rights in Debentures and Participating
Securities.--
(1) Subrogation.--If the Administrator pays a claim under a
guarantee issued under this section, the Administrator shall be
subrogated fully to the rights satisfied by the payment.
(2) Ownership rights in debentures and participating
securities.--No Federal, State or local law shall preclude or
limit the exercise by the Administrator of the Administrator's
ownership rights in the debentures or participating securities
residing in a trust or pool against which trust certificates
are issued.
(f) Central Registration; Regulation of Brokers and Dealers.--
(1) Central registration.--The Administrator shall provide
for a central registration of all trust certificates sold under
this section.
(2) Agent.--
(A) In general.--The Administrator shall contract
with 1 or more agents to carry out on behalf of the
Administrator the pooling and the central registration
functions of this section including, notwithstanding
any other provision of law--
(i) maintenance on behalf of and under the
direction of the Administrator, such commercial
bank accounts or investments in obligations of
the United States as may be necessary to
facilitate trusts or pools backed by debentures
or participating securities guaranteed under
this chapter; and
(ii) the issuance of trust certificates to
facilitate such poolings.
(B) Bond or insurance.--An agent under subparagraph
(A) shall provide a fidelity bond or insurance in such
amounts as the Administrator determines to be necessary
to fully protect the interests of the Government.
(3) Disclosure.--The Administrator shall require a seller of
a trust certificate issued under this section to disclose to
the purchaser, before the sale, information on the terms,
conditions, and yield of the trust certificate.
(4) Regulation of brokers and dealers.--The Administrator may
regulate brokers and dealers in trust certificates sold under
this section.
(5) Effect of subsection.--This subsection does not preclude
the use of a book-entry or other electronic form of
registration for trust certificates.
(g) Periodic Issuance of Trust Certificates.--The Administrator shall
issue trust certificates under this section--
(1) at periodic intervals of not less than every 12 months;
and
(2) at such shorter intervals as the Administrator considers
appropriate, taking into consideration the amount and number of
trust certificates.
Sec. 303116. Regulations
The Administrator may prescribe regulations governing the operations
of licensees, and regulations to carry out this subtitle, in accordance
with the purposes of this subtitle.
Sec. 303117. Unlawful acts and omissions
(a) Violation by Licensee Deemed Violation by Person Participating.--
If a licensee violates any provision of this subtitle (including a
regulation issued under this subtitle) by reason of its failure to
comply with the terms of the provision (or regulation) or by reason of
its engaging in any act or practice that constitutes or will constitute
a violation of the provision (or regulation), the violation shall also
be a violation and an unlawful act on the part of any person who,
directly or indirectly, authorizes, orders, participates in, or causes,
brings about, counsels, aids, or abets in the commission of any act,
practice, or transaction that constitutes or will constitute, in whole
or in part, the violation.
(b) Breach of Fiduciary Duty.--It shall be unlawful for an officer,
director, employee, agent, or other participant in the management or
conduct of the affairs of a licensee to engage in any act or practice,
or to omit any act, in breach of the fiduciary duty of the officer,
director, employee, agent, or participant if, as a result of engaging
in the act or practice or of the omission to act, the licensee suffers
or is in imminent danger of suffering financial loss or other damage.
(c) Disqualification of Officers and Employees for Dishonesty, Fraud,
or Breach of Trust.--Except with the written consent of the
Administrator, it shall be unlawful--
(1) for any person to take office as an officer, director, or
employee of a licensee, or to become an agent or participant in
the conduct of the affairs or management of a licensee, if the
person--
(A) has been convicted of--
(i) a felony; or
(ii) a lesser criminal offense that involves
dishonesty or breach of trust; or
(B) has been found civilly liable in damages, or is
permanently or temporarily enjoined by an order,
judgment, or decree of a court of competent
jurisdiction, by reason of any act or practice
involving fraud or breach of trust; or
(2) for any person to continue to serve in any of the above-
described capacities, if the person, after November 6, 1966--
(A) is convicted of--
(i) a felony; or
(ii) a lesser criminal offense that involves
dishonesty or breach of trust; or
(B) is found civilly liable in damages, or is
permanently or temporarily enjoined by an order,
judgment, or decree of a court of competent
jurisdiction, by reason of any act or practice
involving fraud or breach of trust.
Sec. 303118. Investigations; examinations; valuations
(a) Investigation of Violations.--
(1) In general.--The Administrator may make such
investigations as the Administrator considers necessary to
determine whether a licensee or any other person has engaged or
is about to engage in an act or practice that constitutes or
will constitute a violation of any provision of this subtitle
(including a regulation under this subtitle) or of an order
issued under this subtitle.
(2) Statements.--The Administrator shall permit any person to
file with the Administrator 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.
(3) Powers.--For the purpose of any investigation, the
Administrator may administer oaths and affirmations, subpoena
witnesses, compel the attendance of witnesses, take evidence,
and require the production of any records that are relevant to
the inquiry. The attendance of witnesses and the production of
any such records may be required from any place in the United
States.
(4) Contumacy or refusal to obey order of the
administrator.--
(A) In general.--In case of contumacy by, or refusal
to obey a subpoena issued to, any person (including a
licensee), the Administrator may invoke the aid of any
court of the United States within the jurisdiction of
which the investigation or proceeding is carried on, or
in which the person resides or carries on business, in
requiring the attendance and testimony of witnesses and
the production of records, and the court may issue an
order requiring the person to appear before the
Administrator, to produce records, or to give testimony
touching the matter under investigation.
(B) Failure to obey court order.--A failure to obey
an order of the court may be punished by the court as a
contempt of court.
(C) Process.--Process in a case under this paragraph
may be served in the judicial district of which the
person is an inhabitant or wherever the person may be
found.
(b) Examinations of and Reports by Licensees.--
(1) In general.--A licensee shall be subject to examinations
made by direction of the Investment Division of SBA, which may
be conducted with the assistance of a private sector entity
that has the qualifications to conduct and expertise in
conducting such examinations.
(2) Examination fee.--The Administrator may assess against a
licensee that is examined, as an examination fee, the cost of
the examination (including compensation of the examiners), and
the licensee shall pay the examination fee.
(3) Use of examination fees.--Examination fees collected
under this subsection shall be deposited in the account for
salaries and expenses of SBA, and are authorized to be
appropriated solely to cover the costs of examinations and
other program oversight activities.
(4) Reports.--
(A) In general.--A licensee shall make such reports
to the Administrator at such times and in such form as
the Administrator may require.
(B) Exemption.--The Administrator may exempt from a
requirement to make a report a licensee that is
registered under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.) to the extent necessary to avoid
duplication in reporting requirements.
(C) Violation.--
(i) In general.--Except as provided in clause
(ii), a licensee that violates any regulation
or written directive issued by the
Administrator requiring the filing of any
regular or special report under subparagraph
(A) shall pay to the United States a civil
penalty of not more than $100 for each day of
the continuance of the licensee's failure to
file the report, unless it is shown that the
failure is due to reasonable cause and not due
to willful neglect.
(ii) Exemption from reporting requirements.--
(I) In general.--If the Administrator
determines that granting an exemption
would not be inconsistent with the
public interest or the protection of
SBA, the Administrator may exempt a
licensee from clause (i)--
(aa) in whole or in part; and
(bb) on such terms and
conditions and for such period
of time as the Administrator
considers necessary and
appropriate.
(II) Procedure.--The Administrator
may grant an exemption under subclause
(I)--
(aa) by regulation; or
(bb) on application of an
interested party, at any time
previous to a violation
described in clause (i), by
order, after notice and
opportunity for hearing.
(iii) Alternative requirements.--The
Administrator may for purposes of this
subparagraph make any alternative requirement
that the Administrator considers to be
appropriate to a situation.
(iv) Civil action.--The civil penalty
provided for in this subparagraph may be
recovered in a civil action brought by the
Administrator.
(5) Scope of examination.--An examination shall be conducted
in such detail as to determine whether the licensee--
(A) has engaged solely in lawful activities and those
contemplated by this chapter;
(B) has engaged in prohibited conflicts of interest;
(C) has acquired or exercised illegal control of an
assisted small business;
(D) has made investments in small business concerns
for not less than 1 year;
(E) has invested more than 20 percent of its capital
in any individual small business, if that restriction
is applicable;
(F) has engaged in relending, foreign investments, or
passive investments; or
(G) has charged an interest rate in excess of the
maximum permitted by law.
(6) Frequency of examination.--
(A) In general.--A licensee shall be examined at
least every 2 years.
(B) Waiver.--The Administrator may waive an
examination of a licensee--
(i) for up to 1 additional year if, the
Administrator determines that such a delay
would be appropriate, based on the amount of
debentures being issued by the licensee and the
repayment record of the licensee, the prior
operating experience of the licensee, the
contents and results of the last examination of
the licensee, and the management expertise of
the licensee; or
(ii) if the licensee's operations have been
suspended while the licensee is involved in
litigation or is in receivership.
(c) Valuations.--
(1) Frequency of valuations.--
(A) In general.--A licensee shall submit to the
Administrator a written valuation of the loans and
investments of the licensee not less often than
semiannually, or otherwise on the request of the
Administrator, except that a licensee with no leverage
outstanding shall submit a valuation annually unless
the Administrator determines otherwise.
(B) Material adverse changes.--Not later than 30 days
after the end of a fiscal quarter of a licensee during
which a material adverse change in the aggregate
valuation of the loans and investments or operations of
the licensee occurs, the licensee shall notify the
Administrator in writing of the nature and extent of
that change.
(C) Independent certification.--
(i) In general.--Not less than once during
each fiscal year, a licensee shall submit to
the Administrator the financial statements of
the licensee, audited by an independent
certified public accountant approved by the
Administrator.
(ii) Audit requirements.--An audit conducted
under clause (i) shall include--
(I) a review of the procedures and
documentation used by the licensee in
preparing the valuations required by
this section; and
(II) a statement by the independent
certified public accountant that the
valuations were prepared in conformity
with the valuation criteria applicable
to the licensee established in
accordance with paragraph (2).
(2) Valuation criteria.--A valuation submitted under this
subsection shall be prepared by the licensee in accordance with
valuation criteria that--
(A) shall be established or approved by the
Administrator; and
(B) shall include appropriate safeguards to ensure
that the noncash assets of a licensee are not
overvalued.
Sec. 303119. Revocation and suspension of licenses; cease and desist
orders
(a) Grounds for Revocation or Suspension.--The Administrator may
revoke or suspend a license--
(1) for a false statement knowingly made in a written
statement required under this chapter (including a regulation
under this chapter);
(2) for failure, in a written statement required under this
chapter (including a regulation under this chapter), to state a
material fact necessary to make the statement not misleading in
the light of the circumstances under which the statement is
made;
(3) for willful or repeated violation of, or willful or
repeated failure to observe, any provision of this chapter
(including a regulation under this chapter); or
(4) for violation of, or failure to observe, a cease and
desist order issued by the Administrator under this section.
(b) Grounds for Cease and Desist Order.--If a licensee or any other
person has not complied with any provision of this subtitle (including
a regulation issued under this subtitle) or is engaging or is about to
engage in any act or practice that constitutes or will constitute a
violation of this subtitle (including a regulation), the Administrator
may--
(1) order such licensee or other person--
(A) to cease and desist from the action or failure to
act; and
(B) to take such action or to refrain from such
action as the Administrator considers necessary to
ensure compliance with this subtitle (including
regulations); and
(2) suspend the license of a licensee against which an order
has been issued until the licensee complies with the order.
(c) Procedure.--
(1) Order to show cause.--
(A) In general.--Before revoking or suspending a
license under subsection (a) or issuing a cease and
desist order under subsection (b), the Administrator
shall serve on the licensee and any other person
involved an order to show cause why an order revoking
or suspending the license or a cease and desist order
should not be issued.
(B) Contents.--An order to show cause shall--
(i) 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
(ii) state that a hearing will be held before
the Administrator at a time and place stated in
the order.
(2) Determination.--
(A) In general.--If, after hearing (or waiver of
hearing), the Administrator determines on the record
that an order revoking or suspending the license or a
cease and desist order should issue, the Administrator
shall promptly issue such an order.
(B) Contents.--An order revoking or suspending a
license or cease and desist order shall--
(i) include a statement of the findings of
the Administrator and the grounds and reasons
for the order; and
(ii) state the effective date of the order.
(C) Service.--The Administrator shall cause an order
revoking or suspending a license or cease and desist
order to be served on the licensee and any other person
involved.
(d) Subpoenas.--
(1) In general.--The Administrator may require by subpoena
the attendance and testimony of witnesses and the production of
all records relating to a hearing from any place in the United
States.
(2) Fees and mileage.--A witness summoned before the
Administrator shall be paid by the party at whose instance the
witness is called the same fees and mileage that are paid
witnesses in the courts of the United States.
(3) Disobedience of subpoena.--In case of disobedience to a
subpoena, the Administrator, or any party to a proceeding
before the Administrator, may invoke the aid of any court of
the United States in requiring the attendance and testimony of
a witness and the production of a record.
(e) Petition To Modify or Set Aside Order.--
(1) Filing.--
(A) Petition by right.--An order issued by the
Administrator under this section shall be final and
conclusive unless, within 30 days after service of the
order, the licensee or other person against which the
order is issued appeals to the United States court of
appeals for the circuit in which the licensee has its
principal place of business by filing with the clerk of
the court a petition praying that the Administrator's
order be set aside or modified in the manner stated in
the petition.
(B) Petition by leave of court.--After the expiration
of the 30-day period described in subparagraph (A), a
petition may be filed only by leave of court on a
showing of reasonable grounds for failure to file the
petition within the 30-day period.
(2) Transcript.--The clerk of the court shall immediately
cause a copy of the petition to be delivered to the
Administrator, and the Administrator shall certify and file in
the court a transcript of the record on which the order
complained of was entered. If, before the transcript is filed,
the Administrator amends or sets aside the order, in whole or
in part, the petitioner may amend the petition within such time
as the court may determine, on notice to the Administrator.
(3) Stay or suspension.--The filing of a petition for review
shall not of itself stay or suspend the operation of the order
of the Administrator, but the court of appeals may restrain or
suspend, in whole or in part, the operation of the order
pending the final hearing and determination of the petition.
(4) Court action.--The court may affirm, modify, or set aside
the order of the Administrator.
(5) Additional evidence.--
(A) Reopening of hearing.--If the court determines
that the just and proper disposition of the case
requires the taking of additional evidence, the court
shall order the Administrator to reopen the hearing for
the taking of such evidence, in such manner and on such
terms and conditions as the court considers proper.
(B) Modified or new findings.--The Administrator--
(i) may modify the findings as to the facts,
or make new findings, by reason of the
additional evidence so taken; and
(ii) shall file any modified or new findings
and the amendments, if any, of the order, with
the record of such additional evidence.
(6) Limitation on consideration of objections.--No objection
to an order of the Administrator shall be considered by the
court unless the objection was urged before the Administrator
or, if it was not so urged, unless there were reasonable
grounds for failure to do so.
(7) Review of judgment.--A judgment of the court affirming,
modifying, or setting aside an order of the Administrator shall
be subject only to review by the Supreme Court on certification
or certiorari as provided in section 1254 of title 28.
(f) Enforcement of Order.--
(1) In general.--If a licensee or other person against which
an order is issued under this section fails to obey the order,
the Administrator--
(A) may apply to the United States court of appeals
for the circuit in which the licensee has its principal
place of business for the enforcement of the order; and
(B) shall file a transcript of the record on which
the order complained of was entered.
(2) Notice.--On filing of an application under paragraph (1),
the court shall cause notice of the application to be served on
the licensee or other person.
(3) Evidence, procedure, and jurisdiction.--The evidence to
be considered, the procedure to be followed, and the
jurisdiction of the court shall be the same as is provided in
subsection (e) for an application to set aside or modify an
order.
Sec. 303120. Removal or suspension of, or prohibition of participation
by, management officials
(a) Removal.--
(1) Notice of removal.--The Administrator may serve on a
management official a written notice of the Administrator's
intention to remove the management official if, in the opinion
of the Administrator--
(A) the management official--
(i) has willfully and knowingly committed a
substantial violation of--
(I) this subtitle (including a
regulation issued under this subtitle);
or
(II) a cease and desist order that
has become final; or
(ii) has willfully and knowingly committed or
engaged in an act, omission, or practice that
constitutes a substantial breach of a fiduciary
duty of the management official as a management
official; and
(B) the violation or breach of fiduciary duty is one
involving personal dishonesty on the part of the
management official.
(2) Contents of notice.--A notice under paragraph (1) shall--
(A) contain a statement of the facts constituting
grounds for the notice; and
(B) establish a time and place at which a hearing
will be held on the proposed removal.
(3) Hearing.--
(A) Timing.--A hearing on the notice shall be
established for a date not earlier than 30 days nor
later than 60 days after the date of service of the
notice under paragraph (1), unless an earlier or a
later date is set by the Administrator at the request
of--
(i) the management official, for good cause;
or
(ii) the Attorney General.
(B) Consent.--Unless the management official appears
at a hearing under this paragraph in person or by an
authorized representative, the management official
shall be deemed to have consented to the issuance of an
order of removal under paragraph (4).
(4) Issuance of order of removal.--
(A) In general.--In the event of consent under
paragraph (3)(B), or if on 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
considers appropriate.
(B) Effectiveness.--An order under subparagraph (A)
shall--
(i) become effective on the expiration of 30
days after the date of service on the
management official and the licensee (except in
the case of an order issued on consent as
described in paragraph (3)(B), which shall
become effective at the time specified in the
order); and
(ii) remain effective and enforceable, except
to such extent as the order is stayed,
modified, terminated, or set aside by action of
the Administrator or a reviewing court in
accordance with this section.
(b) Suspension or Prohibition of Participation.--
(1) In general.--The Administrator may, if the Administrator
considers it necessary for the protection of the licensee or
the interests of SBA, suspend from office or prohibit from
further participation in any manner in the management or
conduct of the affairs of a licensee, or both, a management
official described in subsection (a)(1) by written notice to
that effect served on the management official and the licensee.
(2) Effectiveness.--A suspension or prohibition under
paragraph (1)--
(A) shall become effective on service of notice under
paragraph (1); and
(B) unless stayed by a court in proceedings under
paragraph (3), shall remain in effect--
(i) until completion of the administrative
proceedings pursuant to a notice of intention
to remove served under subsection (a); 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.
(3) Judicial review.--Not later than 10 days after a
management official is suspended from office or prohibited from
participation in the management or conduct of the affairs of a
licensee under paragraph (1), the management official may apply
to the United States district court for the judicial district
in which the principal office of the licensee is located, or
the United States District Court for the District of Columbia,
for a stay of the suspension or prohibition pending the
completion of the administrative proceedings pursuant to a
notice of intention to remove served on the management official
under subsection (a), and the court shall have jurisdiction to
stay the suspension or prohibition.
(c) Suspension, or Prohibition of Participation, on Criminal
Charges.--
(1) In general.--If a management official is charged, in an
information, indictment, or complaint authorized by a United
States attorney, with the commission of or participation in a
felony involving dishonesty or breach of trust, the
Administrator may, by written notice served on 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
licensee, or both.
(2) Effectiveness.--A suspension or prohibition under
paragraph (1) shall remain in effect--
(A) until the subject information, indictment, or
complaint is finally disposed of; or
(B) until it is terminated by the Administrator.
(3) Conviction.--If a judgment of conviction with respect to
an offense described in paragraph (1) is entered against a
management official, at such time as the judgment is not
subject to further appellate review, the Administrator may
issue and serve on the management official an order removing
the management official from office, which removal shall become
effective on service of a copy of the order on the licensee.
(4) Dismissal or other disposition.--A finding of not guilty
or other disposition of charges described in paragraph (1)
shall not preclude the Administrator from thereafter
instituting proceedings to suspend or remove the management
official from office, or to prohibit the management official
from participation in the management or conduct of the affairs
of the licensee, or both, under subsection (a) or (b).
(d) Procedure.--
(1) Hearing venue.--A hearing under this section shall be--
(A) held in the Federal judicial district or in the
territory in which the principal office of the licensee
is located, unless the party afforded the hearing
consents to another place; and
(B) conducted in accordance with chapter 5 of title
5.
(2) Issuance of orders.--After a hearing under this section,
and not later than 90 days after the Administrator notifies the
parties that the case has been submitted for final decision,
the Administrator shall--
(A) render a decision in the matter (which shall
include findings of fact on which the decision is
predicated); and
(B) serve on each party to the proceeding an order or
orders consistent with this section.
(3) Modification of order.--The Administrator may modify,
terminate, or set aside an order issued under this section--
(A) at any time, on such notice, and in such manner
as the Administrator considers proper, unless a
petition for review is timely filed in a court of
appeals of the United States, as provided in paragraph
(4)(B), and thereafter until the record in the
proceeding has been filed in accordance with paragraph
(4)(C); and
(B) on such filing of the record, with permission of
the court.
(4) Judicial review.--
(A) In general.--Judicial review of an order issued
under this section shall be exclusively as provided in
this subsection.
(B) Petition for review.--A party to a hearing under
this section may obtain a review of an order issued
under paragraph (2) (other than an order issued with
the consent of the management official concerned or an
order issued under subsection (c)) by filing in the
court of appeals of the United States for the circuit
in which the principal office of the licensee is
located, or in the United States Court of Appeals for
the District of Columbia Circuit, not later than 30
days after the date of service of the order, a written
petition praying that the order of the Administrator be
modified, terminated, or set aside.
(C) Notification to the administrator.--A copy of a
petition filed under subparagraph (B) shall be
forthwith transmitted by the clerk of the court to the
Administrator, and thereupon the Administrator shall
file in the court the record in the proceeding, as
provided in section 2112 of title 28.
(D) Court jurisdiction.--On the filing of a petition
under subparagraph (B)--
(i) the court shall have jurisdiction, which,
on the filing of the record under subparagraph
(C), shall be exclusive, to affirm, modify,
terminate, or set aside, in whole or in part,
the order of the Administrator;
(ii) review of the proceedings shall be had
as provided in chapter 7 of title 5; and
(iii) the judgment and decree of the court
shall be final, except that the judgment and
decree shall be subject to review by the
Supreme Court on certiorari as provided in
section 1254 of title 28.
(E) Judicial review not a stay.--The commencement of
proceedings for judicial review under this paragraph
shall not, unless specifically ordered by the court,
operate as a stay of any order issued by the
Administrator under this section.
Sec. 303121. Direct civil enforcement actions
(a) Forfeiture of rights, privileges, and franchises.--
(1) In general.--If a licensee violates or fails to comply
with any provision of this subtitle (including a regulation
prescribed under this subtitle), all of the licensee's rights,
privileges, and franchises derived from this subtitle may be
forfeited.
(2) Civil action.--Before a licensee is declared dissolved,
or its rights, privileges, and franchises forfeited, any
noncompliance with or violation of this subtitle shall be
determined by a court of the United States of competent
jurisdiction in a civil action brought in the district,
territory, or other place subject to the jurisdiction of the
United States in which the principal office of the licensee is
located. Any such civil action shall be brought by the United
States at the instance of the Administrator or the Attorney
General.
(b) Injunctions and Other Orders.--
(1) In general.--If a licensee or any other person engages or
is about to engage in an act or practice that constitutes or
will constitute a violation of any provision of this subtitle
(including a regulation under this subtitle) or of any order
issued under this subtitle, the Administrator may bring a civil
action in United States district court or in a United States
court of any place subject to the jurisdiction of the United
States for an order enjoining the act or practice, or for an
order enforcing compliance with the provision, regulation, or
order, and the court shall have jurisdiction over the civil
action and, on a showing by the Administrator that the licensee
or other person has engaged or is about to engage in any such
act or practice, a permanent or temporary injunction,
restraining order, or other order shall be granted without
bond.
(2) Jurisdiction over licensee and assets of the licensee.--
In a civil action under subsection (a), the court may, to such
extent as the court considers necessary, take exclusive
jurisdiction of the licensee and the assets of the licensee,
wherever located, and the court shall have jurisdiction to
appoint a trustee or receiver to hold or administer the assets
of the licensee under the direction of the court.
(3) Trusteeship or receivership over licensee.--
(A) In general.--The Administrator may act as trustee
or receiver of the licensee on appointment by a court
as provided in subparagraph (B).
(B) Appointment.--On request of the Administrator,
the court may appoint the Administrator to act as
trustee or receiver of the licensee unless the court
considers that such an appointment would be inequitable
or otherwise inappropriate by reason of special
circumstances involved in the civil action.
Sec. 303122. Jurisdiction; service of process
A civil action or other proceeding brought under section
303118(b)(4)(C), 303119, 303120, or 303121 of this title by the
Administrator to enforce any liability or duty created by, or to enjoin
any violation of, this subtitle, or any regulation or order promulgated
under this subtitle shall be brought in the district in which the
licensee maintains its principal office, and process in such cases may
be served in any district in which the defendant maintains its
principal office or transacts business, or wherever the defendant may
be found.
Chapter 305--New Markets Venture Capital Company Program
Sec.
305101. Definitions.
305102. Establishment of program.
305103. Approval of new markets venture capital companies.
305104. Guarantee of new markets venture capital company debentures.
305105. Trust certificates.
305106. Fees.
305107. Operational assistance grants.
305108. Bank participation.
305109. Reporting requirement.
305110. Regulations.
305111. Unlawful acts and omissions.
305112. Examinations.
305113. Removal or suspension of directors or officers.
305114. Direct civil enforcement actions.
Sec. 305101. Definitions
In this chapter:
(1) Developmental venture capital.--
(A) In general.--The term ``developmental venture
capital'' means capital in the form of an equity
capital investment in a smaller enterprise made with a
primary objective of fostering economic development in
a low-income geographic area.
(B) Equity capital.--In subparagraph (A), the term
``equity capital'' has the meaning given the term in
section 303104(g)(1)(B) of this title.
(2) Eligible company.--The term ``eligible company'' means a
company that--
(A) is a newly formed for-profit entity or a newly
formed for-profit subsidiary of an existing entity;
(B) has a management team with experience in
community development financing or relevant venture
capital financing; and
(C) has a primary objective of economic development
of 1 or more low-income geographic areas.
(3) Low-income individual.--The term ``low-income
individual'' means an individual whose income (adjusted for
family size) does not exceed--
(A) in the case of an individual residing in a
metropolitan area, 80 percent of the median income of
all individuals residing in the metropolitan area; and
(B) in the case of an individual residing in a
nonmetropolitan area, the greater of--
(i) 80 percent of the median income of all
individuals residing in the nonmetropolitan
area; or
(ii) 80 percent of the median income of all
individuals residing in all of the
nonmetropolitan areas in the State in which the
individual resides.
(4) New markets venture capital company.--The term ``new
markets venture capital company'' means a company that--
(A) has been granted final approval by the
Administrator under section 305103(c) of this title;
and
(B) has entered into a participation agreement with
the Administrator.
(5) Operational assistance.--The term ``operational
assistance'' means management, marketing, and other technical
assistance that assists a smaller enterprise with business
development.
(6) Participation agreement.--The term ``participation
agreement'' means a participation agreement under section
305103(b)(4)(D) of this title.
(7) Program.--The term ``program'' means the new markets
venture capital company program.
(8) State.--The term ``State'' means a State, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Northern Mariana Islands, and any other
commonwealth, territory, or possession of the United States.
Sec. 305102. Establishment of program
(a) In General.--The Administrator shall establish a developmental
venture capital program to be known as the new markets venture capital
company program--
(1) with the purpose of promoting economic development and
creating wealth and job opportunities in low-income geographic
areas and among individuals living in low-income geographic
areas by encouraging developmental venture capital investments
in smaller enterprises primarily located in low-income
geographic areas; and
(2) with the mission of addressing the unmet equity
investment needs of smaller enterprises located in low-income
geographic areas.
(b) Activities.--Under the program, the Administrator may--
(1) enter into participation agreements with new markets
venture capital companies under section 305103(b)(4)(D) of this
title for the purposes described in subsection (a);
(2) guarantee debentures issued by new markets venture
capital companies under section 305104 of this title; and
(3) make grants to new markets venture capital companies and
specialized small business investment companies under section
305107 of this title.
Sec. 305103. Approval of new markets venture capital companies
(a) Application.--To participate in the program as a new markets
venture capital company, an eligible company shall submit to the
Administrator an application that includes--
(1) a business plan describing how the applicant intends to
make successful developmental venture capital investments in
identified low-income geographic areas;
(2) information regarding the community development finance
or relevant venture capital qualifications and general
reputation of the applicant's management;
(3) a description of how the applicant intends to work with
community organizations and to seek to address the unmet
capital needs of the communities served;
(4) a proposal describing how the applicant intends to use
the grant funds provided under this chapter to provide
operational assistance to smaller enterprises financed by the
applicant, including information regarding whether the
applicant intends to use licensed professionals, when
necessary, on the applicant's staff or from an outside entity;
(5) with respect to binding commitments to be made to the
applicant under this chapter, an estimate of the ratio of cash
to in-kind contributions;
(6) a description of the criteria to be used to evaluate
whether and to what extent the applicant meets the objectives
of the program;
(7) information regarding the management and financial
strength of any parent firm, affiliated firm, or any other firm
essential to the success of the applicant's business plan; and
(8) such other information as the Administrator may require.
(b) Conditional Approval.--
(1) In general.--From among eligible companies submitting
applications under subsection (a), the Administrator shall
conditionally approve applicants to participate in the program.
(2) Selection criteria.--In conditionally approving eligible
companies under paragraph (1), the Administrator shall
consider--
(A) the likelihood that an applicant will meet the
goal of its business plan;
(B) the experience and background of an applicant's
management team;
(C) the need for developmental venture capital
investments in the geographic areas in which an
applicant intends to invest;
(D) the extent to which an applicant will concentrate
its activities on serving the geographic areas in which
the applicant intends to invest;
(E) the likelihood that an applicant will be able to
satisfy the conditions under paragraph (4);
(F) the extent to which the activities proposed by an
applicant will expand economic opportunities in the
geographic areas in which the applicant intends to
invest;
(G) the strength of the applicant's proposal to
provide operational assistance as the proposal relates
to the ability of the applicant to meet applicable cash
requirements and properly use in-kind contributions,
including the use of resources for the services of
licensed professionals, when necessary, whether
provided by employees or by contractors; and
(H) any other factor that the Administrator considers
appropriate.
(3) Nationwide distribution.--The Administrator shall select
applicants under paragraph (1) in a manner that promotes
investment nationwide.
(4) Requirements for final approval.--
(A) Specification of date.--On granting conditional
approval of an applicant, the Administrator shall
specify a date, not to exceed the date that is 2 years
after the date of conditional approval, by which the
conditionally approved applicant shall satisfy the
requirements stated in this paragraph.
(B) Capital requirement.--A conditionally approved
applicant shall raise not less than $5,000,000 of
private capital or binding capital commitments from 1
or more investors (other than Federal agencies) that
meet criteria established by the Administrator.
(C) Resources for operational assistance from others
than the administrator.--
(i) In general.--To provide operational
assistance to smaller enterprises expected to
be financed by a conditionally approved
applicant, the conditionally approved
applicant--
(I) shall have binding commitments
(for contribution in cash or in kind)--
(aa) from any sources other
than the Administrator that
meet criteria established by
the Administrator;
(bb) payable or available
over a multiyear period that
the Administrator considers
appropriate (not to exceed 10
years); and
(cc) in an amount that is not
less than 30 percent of the
total amount of capital and
commitments raised under
subparagraph (B);
(II) shall have purchased from an
insurance company acceptable to the
Administrator, using funds (other than
the funds raised under subparagraph
(B)) from any source other than the
Administrator, an annuity that yields
cash payments over a multiyear period
acceptable to the Administrator (not to
exceed 10 years) in an amount that is
not less than 30 percent of the total
amount of capital and commitments
raised under subparagraph (B); or
(III) shall have binding commitments
(for contributions in cash or in kind)
of the type described in subclause (I)
and shall have purchased an annuity of
the type described in subclause (II),
which in the aggregate make available,
over a multiyear period acceptable to
the Administrator (not to exceed 10
years), an amount that is not less than
30 percent of the total amount of
capital and commitments raised under
subparagraph (B).
(ii) Exception.--On a showing of special
circumstances and good cause, the Administrator
may consider an applicant to satisfy the
requirements of clause (i) if the applicant
has--
(I) a viable plan that reasonably
projects the capacity of the applicant
to raise the amount (in cash or in-
kind) required under clause (i); and
(II) binding commitments in an amount
that is equal to not less than 20
percent of the amount required under
clause (i).
(iii) Limitation.--To comply with the
requirements of clauses (i) and (ii), the
amount of in-kind contributions made by a
conditionally approved applicant shall not
exceed 50 percent of the total contributions
made by the conditionally approved applicant.
(D) Participation agreement.--A conditionally
approved applicant shall enter into a participation
agreement with the Administrator that--
(i) details the conditionally approved
applicant's operating plan and investment
criteria; and
(ii) requires the conditionally approved
applicant, after final approval under
subsection (c), to make investments in smaller
enterprises at least 80 percent of which are
located in low-income geographic areas.
(c) Final Approval.--The Administrator shall--
(1) grant final approval to a conditionally approved
applicant to operate as a new markets venture capital company
if the conditionally approved applicant satisfies the
requirements of paragraph (4) of subsection (b) on or before
the expiration of the date specified under subparagraph (A) of
that paragraph; or
(2) if the conditionally approved applicant fails to satisfy
those requirements on or before the expiration of that date,
revoke the conditional approval granted under subsection (b).
Sec. 305104. Guarantee of new markets venture capital company
debentures
(a) In General.--To enable a new markets venture capital company to
make developmental venture capital investments in smaller enterprises
in a low-income geographic area, the Administrator may guarantee the
timely payment of principal and interest, as scheduled, on debentures
issued by the new markets venture capital company.
(b) Terms and Conditions.--The Administrator may make a guarantee
under this section on such terms and conditions as the Administrator
considers appropriate, except that the term of any debenture guaranteed
under this section shall not exceed 15 years.
(c) Full faith and Credit of the United States.--The full faith and
credit of the United States is pledged to pay all amounts that may be
required to be paid under any guarantee under this chapter.
(d) Maximum Amount of Guarantee.--
(1) In general.--The Administrator may guarantee the
debentures issued by a new markets venture capital company only
to the extent that the total face amount of outstanding
guaranteed debentures of the new markets venture capital
company does not exceed 150 percent of the private capital of
the new markets venture capital company, as determined by the
Administrator.
(2) Treatment of certain federal funds.--For purposes of
paragraph (1), private capital may include capital that is
considered to be Federal funds (within the meaning of section
301101(16)(C)(iii) of this title) if the capital is contributed
by an investor other than a Federal agency.
(e) Investment Limitations.--
(1) Definition of covered new markets venture capital
company.--In this subsection, the term ``covered new markets
venture capital company'' means a new markets venture capital
company--
(A) that is granted final approval by the
Administrator under section 305103(c) of this title on
or after March 1, 2002; and
(B) that has obtained a financing from the
Administrator.
(2) Limitation.--Except to the extent approved by the
Administrator, a covered new markets venture capital company
shall not acquire or issue commitments for securities under
this division for any single enterprise in an aggregate amount
equal to more than 10 percent of the sum of--
(A) the regulatory capital of the covered new markets
venture capital company; and
(B) the total amount of leverage projected in the
participation agreement of the covered new markets
venture capital company.
Sec. 305105. Trust certificates
(a) Issuance.--
(1) In general.--The Administrator, acting directly or
through an agent, may issue trust certificates representing
ownership of all or a fractional part of debentures issued by a
new markets venture capital company and guaranteed by the
Administrator under section 305104 of this title.
(2) Trust or pool.--Trust certificates issued under paragraph
(1) shall be based on and backed by a trust or pool approved by
the Administrator and composed solely of guaranteed debentures.
(b) Guarantee.--
(1) In general.--The Administrator may, under such terms and
conditions as the Administrator considers appropriate,
guarantee the timely payment of the principal of and interest
on trust certificates issued by the Administrator or an agent
of the Administrator under this section.
(2) Limitation.--A guarantee under this subsection shall be
limited to the extent of principal and interest on the
guaranteed debentures that compose the trust or pool.
(3) Prepayment or default.--
(A) In general.--In the event that a debenture in a
trust or pool is prepaid, or in the event of default of
such a debenture, 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 that the prepaid debenture represents in the
trust or pool.
(B) Interest period.--Interest on a prepaid or
defaulted debenture shall accrue and be guaranteed by
the Administrator only through the date of payment of
the guarantee.
(C) Call.--At any time during the term of a trust
certificate, a trust certificate may be called for
redemption due to prepayment or default of all
debentures that compose the trust or pool.
(c) Full Faith and Credit of the United States.--The full faith and
credit of the United States is pledged to pay all amounts that may be
required to be paid under any guarantee of a trust certificate issued
by the Administrator or an agent of the Administrator under this
section.
(d) Fees.--The Administrator shall not collect a fee for any
guarantee of a trust certificate under this section, but an agent of
the Administrator may collect a fee approved by the Administrator for
the functions described in subsection (f)(2).
(e) Subrogation and Ownership Rights.--
(1) Subrogation.--If the Administrator pays a claim under a
guarantee issued under this section, the Administrator shall be
subrogated fully to the rights satisfied by the payment.
(2) Ownership rights.--No Federal, State, or local law shall
preclude or limit the exercise by the Administrator of the
ownership rights of the Administrator in the debentures
residing in a trust or pool against which trust certificates
are issued under this section.
(f) Management and Administration.--
(1) Registration.--The Administrator may provide for a
central registration of all trust certificates issued under
this section.
(2) Contracting of functions.--
(A) In general.--The Administrator may contract with
1 or more agents to carry out on behalf of the
Administrator the pooling and the central registration
functions provided for in this section including,
notwithstanding any other provision of law--
(i) maintenance, on behalf of and under the
direction of the Administrator, of such
commercial bank accounts or investments in
obligations of the United States as may be
necessary to facilitate the creation of trusts
or pools backed by debentures guaranteed under
section 305104 of this title; and
(ii) the issuance of trust certificates to
facilitate the creation of such trusts or
pools.
(B) Fidelity bond or insurance requirement.--An agent
performing functions on behalf of the Administrator
under this paragraph shall provide a fidelity bond or
insurance in such amounts as the Administrator
determines to be necessary to fully protect the
interests of the United States.
(3) Regulation of brokers and dealers.--The Administrator may
regulate brokers and dealers in trust certificates issued under
this section.
(4) Form of registration.--This subsection does not preclude
the use of a book-entry or other electronic form of
registration for trust certificates issued under this section.
Sec. 305106. Fees
Except as provided in section 305105(d) of this title, the
Administrator may charge such fees as the Administrator considers
appropriate with respect to any guarantee or grant issued under this
chapter.
Sec. 305107. Operational assistance grants
(a) In General.--
(1) Authority.--The Administrator may make a grant to a new
markets venture capital company or specialized small business
investment company to enable the new markets venture capital
company or specialized small business investment company to
provide operational assistance to smaller enterprises financed,
or expected to be financed, by the new markets venture capital
company or specialized small business investment company.
(2) Terms.--A grant under this subsection shall be made over
a multiyear period not to exceed 10 years, under such other
terms as the Administrator may require.
(3) Specialized small business investment companies.--
(A) Submission of plan.--A specialized small business
investment company shall be eligible for a grant under
this section only if the specialized small business
investment company submits to the Administrator, in
such form and manner as the Administrator may require,
a plan for use of the grant.
(B) Use of funds.--The proceeds of a grant made to a
specialized small business investment company under
this subsection shall be used by the specialized small
business investment company only to provide operational
assistance in connection with an equity investment made
with capital raised after December 21, 2000, in a
smaller enterprise located in a low-income geographic
area.
(4) Grant amount.--
(A) New markets venture capital companies.--The
amount of a grant made under this subsection to a new
markets venture capital company shall be equal to the
amount of resources (in cash or in kind) raised by the
new markets venture capital company under section
305103(b)(4)(C) of this title.
(B) Specialized small business investment
companies.--The amount of a grant made under this
subsection to a specialized small business investment
company shall be equal to the resources (in cash or in
kind) raised by the entity in accordance with the
requirements applicable to new markets venture capital
companies under section 305103(b)(4)(C) of this title.
(5) Pro rata reductions.--If the amount made available to
carry out this section is insufficient for the Administrator to
provide grants in the amounts provided for in paragraph (4),
the Administrator shall make pro rata reductions in the amounts
otherwise payable to each new markets venture capital company
and specialized small business investment company under that
paragraph.
(b) Supplemental Grants.--
(1) In general.--The Administrator may make a supplemental
grant to a new markets venture capital company or specialized
small business investment company under such terms as the
Administrator may require, to provide additional operational
assistance to smaller enterprises financed, or expected to be
financed, by the new markets venture capital company or
specialized small business investment company.
(2) Matching requirement.--The Administrator may require, as
a condition of a supplemental grant under this subsection, that
the new markets venture capital company or specialized small
business investment company receiving the grant provide from
resources (in cash or in kind), other than those provided by
the Administrator, a matching contribution equal to the amount
of the supplemental grant.
(c) Limitation.--None of the assistance made available under this
section may be used for any overhead or general and administrative
expense of a new markets venture capital company or a specialized small
business investment company.
Sec. 305108. Bank participation
(a) In General.--Except as provided in subsection (b), a national
bank, a member bank of the Federal Reserve System, and (to the extent
permitted under applicable State law) an insured bank that is not a
member of the Federal Reserve System may invest in a new markets
venture capital company or in an entity established to invest solely in
new markets venture capital companies.
(b) Limitation.--A bank described in subsection (a) shall not make
investments described in that subsection in a total amount that is
greater than 5 percent of the capital and surplus of the bank.
Sec. 305109. Reporting requirement
A new markets venture capital company that participates in the
program shall provide the Administrator such information as the
Administrator may require, including--
(1) information relating to the measurement criteria that the
new markets venture capital company proposed in its program
application; and
(2) in each case in which the new markets venture capital
company makes, under this chapter, an investment in, or a loan
or grant to, a business that is not located in a low-income
geographic area, a report on the number and percentage of
employees of the business who reside in a low-income geographic
area.
Sec. 305110. Regulations
The Administrator may issue such regulations as the Administrator
considers necessary to carry out this chapter.
Sec. 305111. Unlawful acts and omissions
(a) Persons Deemed To Commit Violation.--If a new markets venture
capital company violates any provision of this subtitle (including a
regulation issued under this subtitle) or of a participation agreement
by reason of the new markets venture capital company's failure to
comply with terms of this subtitle (including a regulation) or of the
participation agreement, or by reason of the new markets venture
capital company's engaging in any act or practice that constitutes or
will constitute a violation of this subtitle (including a regulation)
or of the participation agreement, the violation shall also be deemed
to be a violation and an unlawful act committed by any person that,
directly or indirectly, authorizes, orders, participates in, causes,
brings about, counsels, aids, or abets in the commission of the act,
practice, or transaction that constitutes or will constitute, in whole
or in part, the violation.
(b) Breach of Fiduciary Duty.--It shall be unlawful for an officer,
director, employee, agent, or other participant in the management or
conduct of the affairs of a new markets venture capital company to
engage in any act or practice, or to omit any act or practice, in
breach of the person's fiduciary duty as officer, director, employee,
agent, or participant if, as a result of the act, practice, or
omission, the new markets venture capital company suffers or is in
imminent danger of suffering financial loss or other damage.
(c) Other Unlawful Acts.--Except with the written consent of the
Administrator, it shall be unlawful--
(1) for any person to take office as an officer, director, or
employee of a new markets venture capital company, or to become
an agent or participant in the conduct of the affairs or
management of a new markets venture capital company, if the
person--
(A) has been convicted of--
(i) a felony; or
(ii) a lesser criminal offense that involves
dishonesty or breach of trust; or
(B) has been found civilly liable in damages, or has
been permanently or temporarily enjoined by an order,
judgment, or decree of a court of competent
jurisdiction, by reason of any act or practice
involving fraud or breach of trust; or
(2) for any person to continue to serve in any of the
capacities described in paragraph (1), if--
(A) the person is convicted of--
(i) a felony; or
(ii) a lesser criminal offense that involves
dishonesty or breach of trust; or
(B) the person is found civilly liable in damages, or
is permanently or temporarily enjoined by an order,
judgment, or decree of a court of competent
jurisdiction, by reason of any act or practice
involving fraud or breach of trust.
Sec. 305112. Examinations
(a) In General.--A new markets venture capital company that
participates in the program shall be subject to examinations made at
the direction of the Investment Division of SBA in accordance with this
section and modeled after oversight developed for the small business
investment company program.
(b) Assistance of Private Sector Entities.--An examination under this
section may be conducted with the assistance of a private sector entity
that has both the qualifications and the expertise necessary to conduct
such an examination.
(c) Costs.--
(1) In general.--The Administrator may assess the cost of an
examination under this section (including compensation of an
examiner) against the new markets venture capital company
examined.
(2) Payment.--A new markets venture capital company against
which the Administrator assesses costs under this paragraph
shall pay the costs.
(d) Deposit of Amounts.--Amounts collected under this section shall
be deposited in the account for salaries and expenses of SBA.
Sec. 305113. Removal or suspension of directors or officers
Using the procedures for removing or suspending a director or an
officer of a licensee under section 303120 of this title (to the extent
that those procedures are not inconsistent with the requirements of
this chapter), the Administrator may remove or suspend a director or
officer of a new markets venture capital company.
Sec. 305114. Direct civil enforcement actions
(a) Forfeiture of rights and privileges.--
(1) In general.--With respect to a new markets venture
capital company that violates or fails to comply with any of
the provisions of this subtitle (including a regulation issued
under this subtitle) or of any participation agreement, the
Administrator may--
(A) void the participation agreement between the
Administrator and the new markets venture capital
company; and
(B) cause the new markets venture capital company to
forfeit all of the rights and privileges derived by the
new markets venture capital company from this subtitle.
(2) Adjudication of noncompliance.--
(A) In general.--Before the Administrator may cause a
new markets venture capital company to forfeit rights
or privileges under paragraph (1), a court of the
United States of competent jurisdiction shall find that
the new markets venture capital company committed a
violation, or failed to comply, in a civil action
brought for that purpose in the district, territory, or
other place subject to the jurisdiction of the United
States in which the principal office of the new markets
venture capital company is located.
(B) Parties authorized to bring civil action.--A
civil action brought by the United States under this
subsection shall be brought by the Administrator or by
the Attorney General.
(b) Injunctions and other orders.--
(1) In general.--If a new markets venture capital company or
any other person engages or is about to engage in an act or
practice that constitutes or will constitute a violation of any
provision of this subtitle (including a regulation under this
subtitle) or of any order issued under this subtitle, the
Administrator may bring a civil action in United States
district court or in a United States court of any place subject
to the jurisdiction of the United States for an order enjoining
the act or practice, or for an order enforcing compliance with
the provision, regulation, or order, and the court shall have
jurisdiction over the civil action and, on a showing by the
Administrator that the new markets venture capital company or
other person has engaged or is about to engage in any such act
or practice, a permanent or temporary injunction, restraining
order, or other order shall be granted without bond.
(2) Jurisdiction over new markets venture capital company and
its assets.--In a civil action under paragraph (1), the court
may, to such extent as the court considers necessary, take
exclusive jurisdiction of the new markets venture capital
company and the assets of the new markets venture capital
company, wherever located, and the court shall have
jurisdiction to appoint a trustee or receiver to hold or
administer the assets of the new markets venture capital
company under the direction of the court.
(3) Trusteeship or receivership over new markets venture
capital company.--On request of the Administrator, the court
may appoint the Administrator to act as trustee or receiver of
the new markets venture capital company unless the court
considers that such an appointment would be inequitable or
otherwise inappropriate by reason of special circumstances
involved in the civil action.
Chapter 307--Renewable Fuel Capital Investment Pilot Program
Sec.
307101. Definitions.
307102. Establishment of program.
307103. Approval of renewable fuel capital investment companies.
307104. Guarantee of renewable fuel capital investment company
debentures.
307105. Trust certificates.
307106. Fees.
307107. Operational assistance grants.
307108. Bank participation.
307109. Reporting requirement.
307110. Regulations.
307111. Examinations.
307112. Conflicts of interest; unlawful acts and omissions; revocation
and suspensions of licenses; cease and desist orders;
injunctions and other orders.
307113. Removal or suspension of directors or officers.
307114. Termination.
Sec. 307101. Definitions
In this chapter:
(1) Eligible company.--The term ``eligible company'' means a
company that--
(A) is a newly formed for-profit entity or a newly
formed for-profit subsidiary of an existing entity;
(B) has a management team with experience in
alternative energy financing or relevant venture
capital financing; and
(C) has a primary objective of investment in smaller
enterprises that research, manufacture, develop,
produce, or bring to market goods, products, or
services that generate or support the production of
renewable energy.
(2) Operational assistance.--The term ``operational
assistance'' means management, marketing, and other technical
assistance that assists a smaller enterprise with business
development.
(3) Participation agreement.--The term ``participation
agreement'' means a participation agreement under section
307103(b)(4)(D) of this title.
(4) Program.--The term ``program'' means the renewable fuel
capital investment pilot program.
(5) Renewable energy.--The term ``renewable energy'' means
energy derived from resources that are regenerative or that
cannot be depleted, including solar, wind, ethanol, and
biodiesel fuels.
(6) Renewable fuel capital investment company.--The term
``renewable fuel capital investment company'' means a company--
(A) that--
(i) has been granted final approval by the
Administrator under section 307103(c) of this
title; and
(ii) has entered into a participation
agreement with the Administrator; or
(B) that has received conditional approval under
section 307103(b) of this title.
(7) State.--The term ``State'' means a State, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Northern Mariana Islands, and any other
commonwealth, territory, or possession of the United States.
(8) Venture capital.--The term ``venture capital'' means
capital in the form of equity capital (as defined in section
303104(g)(1)(B) of this title) investments.
Sec. 307102. Establishment of program
(a) In General.--The Administrator shall establish a renewable fuel
capital investment program--
(1) with the purpose of promoting the research, development,
manufacture, production, and bringing to market of goods,
products, or services that generate or support the production
of renewable energy by encouraging venture capital investments
in smaller enterprises primarily engaged in such activities;
and
(2) with the mission of addressing the unmet equity
investment needs of smaller enterprises engaged in researching,
developing, manufacturing, producing, and bringing to market
goods, products, or services that generate or support the
production of renewable energy.
(b) Activities.--Under the program, the Administrator may--
(1) enter into participation agreements with renewable fuel
capital investment companies under section 307103(b)(4)(D) of
this title for the purposes described in subsection (a);
(2) guarantee debentures issued by renewable fuel capital
investment companies under section 307104 of this title; and
(3) make grants to renewable fuel investment capital
companies under section 307107 of this title.
Sec. 307103. Approval of renewable fuel capital investment companies
(a) Application.--An eligible company desiring to be designated as a
renewable fuel capital investment company shall submit to the
Administrator an application that includes--
(1) a business plan describing how the applicant intends to
make successful venture capital investments in smaller
enterprises primarily engaged in the research, manufacture,
development, production, or bringing to market of goods,
products, or services that generate or support the production
of renewable energy;
(2) information regarding the relevant venture capital
qualifications and general reputation of the applicant's
management;
(3) a description of how the applicant intends to seek to
address the unmet capital needs of the smaller enterprises
served;
(4) a proposal describing how the applicant intends to use
the grant funds provided under this chapter to provide
operational assistance to smaller enterprises financed by the
applicant, including information regarding whether the
applicant has employees with appropriate professional licenses
or will contract with another entity when the services of such
an individual are necessary;
(5) with respect to binding commitments to be made to the
applicant under this chapter, an estimate of the ratio of cash
to in-kind contributions;
(6) a description of whether and to what extent the applicant
meets the criteria under subsection (b)(2) and the objectives
of the program;
(7) information regarding the management and financial
strength of any parent firm, affiliated firm, or any other firm
essential to the success of the applicant's business plan; and
(8) such other information as the Administrator may require.
(b) Conditional Approval.--
(1) In general.--From among eligible companies submitting
applications under subsection (a), the Administrator shall
conditionally approve applicants to operate as renewable fuel
capital investment companies.
(2) Selection criteria.--In conditionally approving companies
under paragraph (1), the Administrator shall consider--
(A) the likelihood that an applicant will meet the
goal of its business plan;
(B) the experience and background of an applicant's
management team;
(C) the need for venture capital investments in the
geographic areas in which an applicant intends to
invest;
(D) the extent to which an applicant will concentrate
its activities on serving the geographic areas in which
the applicant intends to invest;
(E) the likelihood that an applicant will be able to
satisfy the conditions under paragraph (4);
(F) the extent to which the activities proposed by
the applicant will expand economic opportunities in the
geographic areas in which the company intends to
invest;
(G) the strength of the applicant's proposal to
provide operational assistance as the proposal relates
to the ability of the applicant to meet applicable cash
requirements and properly use in-kind contributions,
including the use of resources for the services of
licensed professionals, when necessary, whether
provided by employees or by contractors; and
(H) any other factor that the Administrator considers
appropriate.
(3) Nationwide distribution.--From among eligible companies
submitting applications under subsection (a), the Administrator
shall consider the selection criteria under paragraph (2) and
shall, to the maximum extent practicable, approve at least 1
applicant from each geographic SBA region.
(4) Requirements for final approval.--
(A) In general.--On granting conditional approval of
an applicant, the Administrator shall grant each
conditionally approved applicant 2 years to satisfy the
requirements stated in this paragraph.
(B) Capital requirement.--A conditionally approved
applicant shall raise not less than $3,000,000 of
private capital or binding capital commitments from 1
or more investors (other than Federal agencies) that
meet criteria established by the Administrator.
(C) Resources for operational assistance from others
than the administrator.--
(i) In general.--To provide operational
assistance to smaller enterprises expected to
be financed by the applicant, a conditionally
approved applicant shall have binding
commitments (for contribution in cash or in-
kind)--
(I) from any source other than the
Administrator that meet criteria
established by the Administrator; and
(II) payable or available over a
multiyear period that the Administrator
considers appropriate (not to exceed 10
years).
(ii) Exception.--On a showing of special
circumstances and good cause, the Administrator
may consider an applicant to satisfy the
requirements of clause (i) if the applicant
has--
(I) a viable plan that reasonably
projects the capacity of the applicant
to raise the amount (in cash or in-
kind) required under clause (i); and
(II) binding commitments in an amount
that is equal to not less than 20
percent of the amount required under
clause (i).
(iii) Limitation.--To comply with the
requirements of clauses (i) and (ii), the
amount of in-kind contributions made by a
conditionally approved applicant shall not
exceed 50 percent of the total contributions
made by the conditionally approved applicant.
(D) Participation agreement.--A conditionally
approved applicant shall enter into a participation
agreement with the Administrator that--
(i) details the conditionally approved
applicant's operating plan and investment
criteria; and
(ii) requires the conditionally approved
applicant, after final approval under
subsection (c), to make investments in smaller
enterprises primarily engaged in researching,
manufacturing, developing, producing, or
bringing to market goods, products, or services
that generate or support the production of
renewable energy.
(c) Final Approval.--The Administrator shall, with respect to each
applicant conditionally approved under subsection (b)--
(1) grant final approval to the conditionally approved
applicant to operate as a renewable fuel capital investment
company if the conditionally approved applicant satisfies the
requirements of paragraph (4) of subsection (b) on or before
the expiration of the time period described in that subsection;
or
(2) if the conditionally approved applicant fails to satisfy
those requirements on or before the expiration of that time
period, revoke the conditional approval granted under
subsection (b).
Sec. 307104. Guarantee of renewable fuel capital investment company
debentures
(a) In General.--To enable a renewable fuel capital investment
company to make venture capital investments in smaller enterprises
engaged in the research, development, manufacture, production, and
bringing to market of goods, products, or services that generate or
support the production of renewable energy, the Administrator may
guarantee the timely payment of principal and interest, as scheduled,
on debentures issued by the renewable fuel capital investment company.
(b) Terms and Conditions.--The Administrator may make a guarantee
under this section on such terms and conditions as the Administrator
considers appropriate, except that--
(1) the term of any debenture guaranteed under this section
shall not exceed 15 years; and
(2) a debenture guaranteed under this section--
(A) shall carry no front-end or annual fees;
(B) shall be issued at a discount;
(C) shall require no interest payments during the 5-
year period beginning on the date on which the
debenture is issued;
(D) shall be prepayable without penalty after the end
of the 1-year period beginning on the date on which the
debenture is issued; and
(E) shall require semiannual interest payments after
the period described in subparagraph (C).
(c) Full Faith and Credit of the United States.--The full faith and
credit of the United States is pledged to pay all amounts that may be
required to be paid under any guarantee under this chapter.
(d) Maximum Amount of Guarantee.--
(1) In general.--The Administrator may guarantee the
debentures issued by a renewable fuel capital investment
company only to the extent that the total face amount of
outstanding guaranteed debentures of the renewable fuel capital
investment company does not exceed 150 percent of the private
capital of the renewable fuel capital investment company, as
determined by the Administrator.
(2) Treatment of certain federal funds.--For purposes of
paragraph (1), private capital includes capital that is
considered to be Federal funds (within the meaning of section
301101(16)(C)(iii) of this title) if the capital is contributed
by an investor other than a Federal agency.
Sec. 307105. Trust certificates
(a) Issuance.--
(1) In general.--The Administrator, acting directly or
through an agent, may issue trust certificates representing
ownership of all or a fractional part of debentures issued by a
renewable fuel capital investment company and guaranteed by the
Administrator under section 307104 of this title.
(2) Trust or pool.--Trust certificates issued under paragraph
(1) shall be based on and backed by a trust or pool approved by
the Administrator and composed solely of guaranteed debentures.
(b) Guarantee.--
(1) In general.--The Administrator may, under such terms and
conditions as the Administrator considers appropriate,
guarantee the timely payment of the principal of and interest
on trust certificates issued by the Administrator or an agent
of the Administrator under this section.
(2) Limitation.--A guarantee under this subsection shall be
limited to the extent of principal and interest on the
guaranteed debentures that compose the trust or pool.
(3) Prepayment or default.--
(A) In general.--In the event that a debenture in a
trust or pool is prepaid, or in the event of default of
such a debenture, 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 that the prepaid debenture represents in the
trust or pool.
(B) Interest period.--Interest on a prepaid or
defaulted debenture shall accrue and be guaranteed by
the Administrator only through the date of payment of
the guarantee.
(C) Call.--At any time during the term of a trust
certificate, a trust certificate may be called for
redemption due to prepayment or default of all
debentures that compose the trust or pool.
(c) Full Faith and Credit of the United States.--The full faith and
credit of the United States is pledged to pay all amounts that may be
required to be paid under any guarantee of a trust certificate issued
by the Administrator or an agent of the Administrator under this
section.
(d) Fees.--The Administrator shall not collect a fee for any
guarantee of a trust certificate under this section, but an agent of
the Administrator may collect a fee approved by the Administrator for
the functions described in subsection (f)(2).
(e) Subrogation and Ownership Rights.--
(1) Subrogation.--If the Administrator pays a claim under a
guarantee issued under this section, the Administrator shall be
subrogated fully to the rights satisfied by the payment.
(2) Ownership rights.--No Federal, State, or local law shall
preclude or limit the exercise by the Administrator of the
ownership rights of the Administrator in the debentures
residing in a trust or pool against which trust certificates
are issued under this section.
(f) Management and Administration.--
(1) Registration.--The Administrator may provide for a
central registration of all trust certificates issued under
this section.
(2) Contracting of functions.--
(A) In general.--The Administrator may contract with
1 or more agents to carry out on behalf of the
Administrator the pooling and the central registration
functions provided for in this section including,
notwithstanding any other provision of law--
(i) maintenance, on behalf of and under the
direction of the Administrator, of such
commercial bank accounts or investments in
obligations of the United States as may be
necessary to facilitate the creation of trusts
or pools backed by debentures guaranteed under
section 307104 of this title; and
(ii) the issuance of trust certificates to
facilitate the creation of such trusts or
pools.
(B) Fidelity bond or insurance requirement.--An agent
performing functions on behalf of the Administrator
under this paragraph shall provide a fidelity bond or
insurance in such amounts as the Administrator
determines to be necessary to fully protect the
interests of the United States.
(3) Regulation of brokers and dealers.--The Administrator may
regulate brokers and dealers in trust certificates issued under
this section.
(4) Form of registration.--This subsection does not preclude
the use of a book-entry or other electronic form of
registration for trust certificates issued under this section.
Sec. 307106. Fees
(a) In General.--Except as provided in section 307105(d) of this
title, the Administrator may charge such fees as the Administrator
considers appropriate with respect to any guarantee or grant issued
under this chapter, in an amount established annually by the
Administrator, as necessary to reduce to zero the cost (as defined in
section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a))
to the Administrator of purchasing and guaranteeing debentures under
this chapter, which amounts shall be paid to and retained by the
Administrator.
(b) Offset.--The Administrator may, as provided by subsection (c),
offset fees charged and collected under subsection (a).
(c) Fee Contribution.--
(1) In general.--To the extent that amounts are made
available to the Administrator for the purpose of fee
contributions, the Administrator shall contribute to fees paid
by the renewable fuel capital investment companies under
subsection (a).
(2) Annual adjustment.--Each fee contribution under paragraph
(1) shall be effective for 1 fiscal year and shall be adjusted
as necessary for each fiscal year thereafter to ensure that
amounts under paragraph (1) are fully used. The fee
contribution for a fiscal year shall be based on the
outstanding commitments made and the guarantees and grants that
the Administrator projects will be made during the fiscal year,
given the program level authorized by law for that fiscal year
and any other factors that the Administrator considers
appropriate.
Sec. 307107. Operational assistance grants
(a) In General.--
(1) Authority.--The Administrator may make a grant to a
renewable fuel capital investment company to enable the
renewable fuel capital investment company to provide
operational assistance to smaller enterprises financed, or
expected to be financed, by the renewable fuel capital
investment company.
(2) Terms.--A grant under this subsection shall be made over
a multiyear period not to exceed 10 years, under such other
terms as the Administrator may require.
(3) Grant amount.--The amount of a grant made under this
subsection to a renewable fuel capital investment company shall
be equal to the lesser of--
(A) 10 percent of the resources (in cash or in kind)
raised by the renewable fuel capital investment company
under section 307103(b)(4)(B) of this title; or
(B) $1,000,000.
(4) Pro rata reductions.--If the amount made available to
carry out this section is insufficient for the Administrator to
provide grants in the amounts provided for in paragraph (3),
the Administrator shall make pro rata reductions in the amounts
otherwise payable to each renewable fuel capital investment
company under that paragraph.
(5) Grants to conditionally approved companies.--
(A) In general.--Subject to subparagraphs (B) and
(C), on the request of a renewable fuel capital
investment company conditionally approved under section
307103(b) of this title, the Administrator shall make a
grant to the renewable fuel capital investment company
under this subsection.
(B) Repayment by renewable fuel capital investment
companies not finally approved.--If a renewable fuel
capital investment company receives a grant under this
paragraph and does not enter into a participation
agreement for final approval, the renewable fuel
capital investment company shall, subject to
controlling Federal law, repay the amount of the grant
to the Administrator.
(C) Deduction of grant to approved company.--If a
renewable fuel capital investment company receives a
grant under this paragraph and receives final approval
under section 307103(c) of this title, the
Administrator shall deduct the amount of the grant from
the total grant amount that the renewable fuel capital
investment company receives for operational assistance.
(D) Amount of grant.--No renewable fuel capital
investment company may receive a grant of more than
$100,000 under this paragraph.
(b) Supplemental Grants.--
(1) In general.--The Administrator may make a supplemental
grant to a renewable fuel capital investment company under such
terms as the Administrator may require, to provide additional
operational assistance to smaller enterprises financed, or
expected to be financed, by the renewable fuel capital
investment company.
(2) Matching requirement.--The Administrator may require, as
a condition of a supplemental grant under this subsection, that
the renewable fuel capital investment company receiving the
grant provide from resources (in cash or in kind), other than
those provided by the Administrator, a matching contribution
equal to the amount of the supplemental grant.
(c) Limitation.--None of the assistance made available under this
section may be used for any overhead or general and administrative
expense of a renewable fuel capital investment company.
Sec. 307108. Bank participation
(a) In General.--Except as provided in subsection (b), a national
bank, a member bank of the Federal Reserve System, and (to the extent
permitted under applicable State law) an insured bank that is not a
member of the Federal Reserve System may invest in any renewable fuel
capital investment company or in any entity established to invest
solely in renewable fuel capital investment companies.
(b) Limitation.--A bank described in subsection (a) shall not make
investments described in that subsection in a total amount that is
greater than 5 percent of the capital and surplus of the bank.
Sec. 307109. Reporting requirement
A renewable fuel capital investment company that participates in the
program shall provide the Administrator such information as the
Administrator may require, including--
(1) information relating to the measurement criteria that the
renewable fuel capital investment company proposed in its
program application; and
(2) in each case in which the renewable fuel capital
investment company makes, under this chapter, an investment in,
or a loan or a grant to, a business that is not primarily
engaged in the research, development, manufacture, or bringing
to market or renewable energy sources, a report on the nature,
origin, and revenues of the business in which investments are
made.
Sec. 307110. Regulations
The Administrator may issue such regulations as the Administrator
considers necessary to carry out this chapter.
Sec. 307111. Examinations
(a) In General.--A renewable fuel capital investment company that
participates in the program shall be subject to examinations made at
the direction of the Investment Division of SBA in accordance with this
section and modeled after oversight developed for the small business
investment company program.
(b) Assistance of Private Sector Entities.--An examination under this
section may be conducted with the assistance of a private sector entity
that has both the qualifications and the expertise necessary to conduct
such an examination.
(c) Costs.--
(1) In general.--The Administrator may assess the cost of an
examination under this section (including compensation of an
examiner) against the renewable fuel capital investment company
examined.
(2) Payment.--A renewable fuel capital investment company
against which the Administrator assesses costs under this
paragraph shall pay the costs.
(d) Deposit of Amounts.--Amounts collected under this section shall
be deposited in the account for salaries and expenses of SBA.
Sec. 307112. Conflicts of interest; unlawful acts and omissions;
revocation and suspensions of licenses; cease and
desist orders; injunctions and other orders
(a) Actions and procedures Under Other Provisions.--To the extent
that the actions and procedures described in sections 303113, 303117,
303119, and 303121(b) of this title are not inconsistent with the
requirements of this chapter, the Administrator may take those actions
under those procedures in carrying out this chapter.
(b) Applicability of Requirements Under Other Provisions.--To the
extent that the requirements described in sections 303113, 303117,
303119, and 303121(b) of this title are not inconsistent with the
requirements of this chapter, an officer, director, employee, agent, or
other participant in the management or conduct of the affairs of a
renewable fuel capital investment company shall be subject to the
requirements of sections 303113, 303117, 303119, and 303121(b) of this
title.
Sec. 307113. Removal or suspension of directors or officers
Using the procedures for removing or suspending a director or an
officer of a licensee under section 303120 of this title (to the extent
that those procedures are not inconsistent with the requirements of
this chapter), the Administrator may remove or suspend a director or
officer of a renewable fuel capital investment company.
Sec. 307114. Termination
The program shall terminate at the end of the 2d full fiscal year
after the date on which the Administrator establishes the program.
Division C--Surety Bond Guarantee Program
Chapter 321--Surety Bond Guarantee Program
Sec.
321101. Definitions.
321102. Surety bond guarantees and indemnification agreements.
321103. Surety bond guarantee fund.
Sec. 321101. Definitions
In this chapter:
(1) Bid bond.--The term ``bid bond'' means a bond conditioned
on the bidder on a contract--
(A) entering into the contract, if the bidder
receives the award of the contract; and
(B) furnishing the prescribed payment bond and
performance bond.
(2) Bond.--Except in paragraphs (1), (7), and (8), the term
``bond'' means--
(A) a bid bond;
(B) a payment bond;
(C) a performance bond; and
(D) a bond that is ancillary to a bid bond, payment
bond, or performance bond.
(3) Guarantee.--The term ``guarantee'' means a guarantee of a
bond issued under section 321102(a) of this title.
(4) Indemnification agreement.--The term ``indemnification
agreement'' means an agreement entered into between the
Administrator and a participating surety under section
321102(b) of this title.
(5) Obligee.--The term ``obligee'' means--
(A) in the case of a bid bond, the person requesting
bids for the performance of a contract; or
(B) in the case of a payment bond or performance
bond, the person that has contracted with a principal
for the completion of the contract and to which the
obligation of the surety runs in the event of a breach
by the principal of a condition of a payment bond or
performance bond.
(6) Participating surety.--
(A) In general.--The term ``participating surety''
means a surety to which a guarantee or commitment to
guarantee is issued under section 321102(a)(1) of this
title.
(B) Inclusion.--The term ``participating surety''
includes a preferred surety.
(7) Payment bond.--The term ``payment bond'' means a bond
conditioned on the payment by the principal of money to persons
under contract with the principal.
(8) Performance bond.--The term ``performance bond'' means a
bond conditioned on the completion by the principal of a
contract in accordance with the terms of the contract.
(9) Preferred surety.--The term ``preferred surety'' means a
participating surety that is a participant in the preferred
surety bond guarantee program.
(10) Preferred surety bond guarantee program.--The term
``preferred surety bond guarantee program'' means the program
under section 321102(a)(5) of this title.
(11) Prime contractor.--The term ``prime contractor'' means
the person with whom the obligee has contracted to perform the
contract.
(12) Principal.--
(A) In general.--The term ``principal'' means--
(i) in the case of a bid bond, a person that
bids for the award of a contract; or
(ii) the person--
(I) that is primarily liable to
complete a contract for the obligee or
to make a payment to another person in
respect of the contract; and
(II) for whose performance of the
person's obligation the surety is bound
under the terms of a payment bond or
performance bond.
(B) Prime contractor or subcontractor.--A principal
may be a prime contractor or a subcontractor.
(13) Program.--The term ``program'' means the preferred
surety bond guarantee program.
(14) Small business concern.--The term ``small business
concern'' means a business concern that meets the size standard
for the primary industry in which the business concern and the
affiliates of the business concern are engaged, as determined
by the Administrator in accordance with the North American
Industry Classification System.
(15) Subcontractor.--The term ``subcontractor'' means a
person that contracts with a prime contractor or with another
subcontractor to perform a contract.
(16) Surety.--The term ``surety'' means a person that--
(A) under the terms of a bid bond, undertakes to pay
a sum of money to the obligee if the principal breaches
the conditions of the bond;
(B) under the terms of a performance bond, undertakes
to incur the cost of fulfilling the terms of a contract
if the principal breaches the conditions of the
contract;
(C) under the terms of a payment bond, undertakes to
make payment to all persons supplying labor and
material in the prosecution of the work provided for in
the contract if the principal fails to make prompt
payment; or
(D) is an agent, independent agent, underwriter, or
any other person authorized to act on behalf of a
person described in subparagraph (A), (B), or (C).
Sec. 321102. Surety bond guarantees and indemnification agreements
(a) Guarantee of Surety Against Loss From Principal's Breach of
Bond.--
(1) In general.--The Administrator may, on such terms and
conditions as the Administrator may prescribe, guarantee and
enter into commitments to guarantee a surety against loss
resulting from a breach of the terms of a bond by a principal
on any total work order or contract amount that at the time of
bond execution does not exceed $6,500,000, as adjusted for
inflation in accordance with section 1908 of title 41.
(2) Increased amount if necessary.--The Administrator may
guarantee a surety under paragraph (1) for a total work order
or contract amount that does not exceed $10,000,000 if a
contracting officer of a Federal agency certifies that a
guarantee in the increased amount is necessary.
(3) Terms and conditions.--The terms and conditions of
guarantees and commitments under paragraph (1) may vary from
surety to surety on the basis of the Administrator's experience
with the particular surety.
(4) Eligibility.--A guarantee of a bond shall not be issued
under paragraph (1) unless--
(A) the person that would be principal under the bond
is a small business concern;
(B) the bond is required for the person to bid on a
contract or to serve as a prime contractor or
subcontractor on a contract;
(C) the person is not able to obtain the bond on
reasonable terms and conditions without a guarantee
under this section; and
(D)(i) there is a reasonable expectation that the
principal will perform the covenants and conditions of
the contract with respect to which the bond is
required; and
(ii) the terms and conditions of the bond are
reasonable in the light of the risks involved and the
extent of the surety's participation.
(5) Preferred surety bond guarantee program.--
(A) In general.--The Administrator may authorize a
surety, without further approval by the Administrator,
to issue, monitor, and service bonds that are subject
to a guarantee under paragraph (1).
(B) Action by the administrator.--The Administrator
shall promptly act on an application from a surety to
participate in the preferred surety bond guarantee
program, in accordance with criteria and procedures
established in regulations under subsection (d).
(C) Reduction of allotment; termination.--The
Administrator may reduce the allotment of bond
guarantee authority or terminate the participation of a
preferred surety based on the rate of participation of
the preferred surety during the 4 most recent fiscal
year quarters compared with the median rate of
participation by the other preferred sureties.
(b) Indemnification of Participating Surety Against Loss From
Avoiding Breach.--
(1) In general.--In connection with the issuance of a
guarantee to a surety, the Administrator may enter into an
indemnification agreement with a participating surety to
indemnify the participating surety against a loss sustained by
the participating surety in avoiding or attempting to avoid a
breach of the terms of a bond guaranteed by the Administrator
under subsection (a).
(2) Determination.--Before making any payment under this
subsection, the Administrator shall determine that a breach of
the terms of the bond was imminent.
(3) Approval.--A participating surety shall obtain approval
from the Administrator before making any payments under this
subsection unless the participating surety is a preferred
surety.
(4) Limitation on amount of payment.--
(A) In general.--Subject to subparagraph (B), no
payment by the Administrator under this subsection
shall exceed 10 percent of the contract price unless
the Administrator determines that a greater payment
should be made as a result of a finding by the
Administrator that the participating surety's loss
sustained in avoiding or attempting to avoid the breach
was necessary and reasonable.
(B) Maximum amount.--In no event shall the
Administrator pay a participating surety under this
subsection an amount exceeding the guaranteed share of
the bond available to the participating surety under
subsection (a).
(c) Amount of Liability of the Administrator.--A guarantee or
indemnification agreement shall obligate the Administrator to pay to
the participating surety--
(1) in the case of a preferred surety, an amount not to
exceed 70 percent of the amount of the loss incurred and paid
by the preferred surety; or
(2) in the case of a participating surety other than a
preferred surety--
(A) an amount not to exceed 90 percent of the amount
of the loss incurred and paid by the participating
surety (but in no event may the Administrator make a
duplicate payment under subsection (b) or any other
provision of this section); or
(B) the amount that is equal to 90 percent of the
loss incurred and paid by the participating surety,
if--
(i) the total amount of the contract at the
time of execution of the bond or bonds is
$100,000 or less; or
(ii) the bond was issued to a small business
concern owned and controlled by socially and
economically disadvantaged individuals or to a
qualified HUBZone small business concern.
(d) Regulations.--
(1) In general.--The Administrator may prescribe regulations
for participating sureties.
(2) Contents.--The regulations under paragraph (1) shall
require a participating surety to meet standards established by
the Administrator for underwriting, claim practices, and loss
ratios.
(e) Reimbursement of Surety.--
(1) In general.--Except as provided in paragraph (2), the
Administrator shall reimburse a participating surety as
provided in a guarantee or indemnification agreement.
(2) No liability.--Subject to paragraph (3), the
Administrator shall be relieved of liability (in whole or in
part, at the discretion of the Administrator) under a guarantee
or indemnification agreement if--
(A) the participating surety obtained the guarantee
or indemnification agreement, or applied for
reimbursement, by fraud or material misrepresentation;
(B) the total contract amount at the time of
execution of the bond or bonds exceeds $6,500,000;
(C) the participating surety has breached a material
term or condition of the guarantee agreement or
indemnification agreement; or
(D) the participating surety has substantially
violated the regulations prescribed under subsection
(d).
(3) Limitation on denial of liability.--In the case of a bond
made or executed with the prior approval of the Administrator,
the Administrator shall not deny liability to a surety based on
material information that was provided as part of the guarantee
application.
(f) Reimbursement Procedure.--The Administrator may, on such terms
and conditions as the Administrator may prescribe, establish a
procedure for reimbursing a participating surety for the paid losses of
the participating surety billed each month, based on prior monthly
payments to the participating surety, with subsequent adjustments after
such reimbursement.
(g) Reporting by Participating Sureties; Audits.--
(1) Reporting by participating sureties.--A participating
surety shall submit reports to the Administrator at such times
and in such form as the Administrator may require.
(2) Audits.--
(A) In general.--The Administrator may at all
reasonable times audit, in the offices of a
participating surety, all records relevant to SBA's
guarantee, commitments to guarantee, and
indemnification agreements issued to or entered into
with the participating surety under this section.
(B) Preferred surety bond guarantee program
participants.--A preferred surety shall be audited at
least once every 3 years by examiners selected and
approved by the Administrator.
(h) Administrative Provisions.--The Administrator shall--
(1) administer the program on a prudent and economically
justifiable basis; and
(2) establish such fees for small business concerns and
premiums for participating sureties as the Administrator
considers reasonable and necessary, to be payable at such times
and under such conditions as the Administrator may determine.
Sec. 321103. Surety bond guarantee fund
(a) In General.--There is created in the Treasury a separate fund for
guarantees, which shall be available to the Administrator without
fiscal year limitation as a revolving fund for the purposes of the
program.
(b) Deposit of Amounts Received by the Administrator.--All amounts
received by the Administrator (including any money, property, or assets
derived by the Administrator from operations in connection with the
program) shall be deposited in the fund.
(c) Use of Fund.--All expenses and payments, excluding administrative
expenses, pursuant to operations of the Administrator under the program
shall be paid from the fund.
(d) Appropriations.--Such sums as may be appropriated to the Fund to
carry out the programs authorized by this chapter shall be without
fiscal year limitation.
Division D--Certified Development Company Program
Chapter 331--Certified Development Company Program
Sec.
331101. Definitions.
331102. Establishment of program.
331103. Debenture guarantees.
331104. Private debenture sales.
331105. Pooling of debentures.
331106. Prohibition of acceptance of funding with certain conditions,
priorities, restrictions, or requirements.
331107. Accredited lenders program.
331108. Premier certified lenders program.
331109. Foreclosure and liquidation of loans.
Sec. 331101. Definitions
In this chapter:
(1) Accredited lender.--The term ``accredited lender'' means
a qualified development company that is designated as an
accredited lender under section 331107 of this title.
(2) Certified development company.--The term ``certified
development company'' means a qualified development company
that the Administrator certifies as meeting criteria
established under this chapter to receive assistance under the
program.
(3) Commercial loan.--The term ``commercial loan'' means a
loan from a private source.
(4) Development company.--The term ``development company''
means an enterprise that is incorporated under State law with
the authority to promote and assist the growth and development
of small business concerns in the area covered by the
operations of the enterprise.
(5) Guaranteed debenture.--The term ``guaranteed debenture''
means a debenture that is guaranteed by the Administrator under
the program.
(6) Premier certified lender.--The term ``premier certified
lender'' means a certified development company that is
designated as a premier certified lender under section 331108
of this title.
(7) Program.--The term ``program'' means the certified
development company program.
(8) Project.--The term ``project'' means a project described
in section 331103(a)(1) of this title.
(9) Qualified development company.--
(A) In general.--The term ``qualified development
company'' means a development company that, as
determined by the Administrator, has--
(i) a full-time professional staff;
(ii) professional management ability
(including adequate accounting, legal, and
business-servicing abilities); and
(iii) a board of directors, or membership,
that meets on a regular basis to make
management decisions for the development
company, including decisions relating to the
making and servicing of loans by the
development company.
(B) Development companies in a rural area.--A
development company in a rural area that does not
satisfy the requirements of clauses (i) and (ii) of
subparagraph (A) shall be deemed to satisfy those
requirements if the development company contracts with
a certified development company that does satisfy those
requirements and is located in the same general area to
provide the services described in those clauses.
(10) Small manufacturer.--The term ``small manufacturer''
means a small business concern--
(A) the primary business of which is classified in
sector 31, 32, or 33 of the North American Industry
Classification System; and
(B) all of the production facilities of which are
located in the United States.
Sec. 331102. Establishment of program
There is established within SBA a certified development company
program for the purpose of fostering economic development and creating
and preserving job opportunities in both urban and rural areas by
providing long-term financing for small business concerns.
Sec. 331103. Debenture guarantees
(a) In General.--
(1) Authority.--The Administrator may guarantee the timely
payment of all principal and interest as scheduled on a
debenture issued by a certified development company the
proceeds of which are used to make a loan to a small business
concern to be used for a project for a sound business purpose,
approved by the Administrator, of plant acquisition,
construction, conversion, or expansion (including land
acquisition).
(2) Limitation.--The Administrator shall not guarantee a
debenture for the purposes of making a loan described in
paragraph (1) unless necessary funds for making the loan are
not available to the certified development company from a
private source on reasonable terms.
(3) Terms and conditions.--A debenture guarantee may be made
on such terms and conditions as the Administrator may by
regulation determine to be appropriate.
(4) Full faith and credit of the united states.--The full
faith and credit of the United States is pledged to the payment
of all amounts guaranteed under this subsection.
(5) Subordination.--A guaranteed debenture may be
subordinated by the Administrator to any other debenture,
promissory note, or other debt or obligation of the certified
development company that issues the debenture.
(b) Eligibility for Assistance.--
(1) Economic development objectives.--
(A) Definitions.--In subclauses (IX) and (X) of
subparagraph (B)(iii), terms have the meanings given
the terms under the Leadership in Energy and
Environmental Design standard for green building
certification, as determined by the Administrator.
(B) Eligibility.--To be eligible for assistance under
the program, a certified development company shall
demonstrate that the project to be funded with the
proceeds of a guaranteed debenture is directed toward
at least 1 of the following economic development
objectives:
(i) Job creation or retention objective.--The
creation of job opportunities within 2 years
after completion of the project, or the
retention of jobs attributable to the project,
as provided in paragraph (3).
(ii) Community economic improvement
objective.--Improvement of the economy of the
local community, such as stimulating other
business development in the community, bringing
new income into the area, or assisting the
community in diversifying and stabilizing its
economy.
(iii) Public policy objective.--The
achievement of 1 or more of the following
public policy objectives:
(I) Business district revitalization.
(II) Expansion of exports.
(III) Expansion of minority business
development or women-owned business
development.
(IV) Rural development.
(V) Expansion of small business
concerns owned and controlled by
veterans, especially small business
concerns owned and controlled by
service-disabled veterans.
(VI) Enhancement of economic
competition, including the advancement
of technology, plan retooling,
conversion to robotics, and competition
with imports.
(VII) Changes necessitated by Federal
budget cutbacks, including cutbacks in
defense-related industries.
(VIII) Business restructuring arising
from Federally mandated standards or
policies affecting the environment or
the safety and health of employees.
(IX) Reduction of energy consumption
by at least 10 percent.
(X) Increased use of sustainable
design, including--
(aa) designs that reduce the
use of greenhouse gas emitting
fossil fuels; and
(bb) low-impact designs to
produce buildings that reduce
the use of nonrenewable
resources and minimize
environmental impact.
(XI) Plant, equipment, and process
upgrades of renewable energy sources
such as--
(aa) the small-scale
production of energy for
individual buildings or
communities consumption,
commonly known as micropower;
and
(bb) renewable fuels
producers, including biodiesel
and ethanol producers.
(XII) Reduction of rates of
unemployment in labor surplus areas, as
those areas are determined by the
Secretary of Labor.
(2) Community economic improvement objective; public policy
objective.--If eligibility is based on the criteria stated in
clause (ii) or (iii) of paragraph (1)(B), the project need not
meet the job creation or job preservation criteria developed by
the Administrator if the overall portfolio of the development
company meets or exceeds those job creation or retention
criteria.
(3) Job creation or retention objective.--
(A) Project standard.--A project meets the job
creation or retention objective under paragraph
(1)(B)(i)) if the project creates or retains--
(i) 1 job for every $65,000 guaranteed by the
Administrator; or
(ii) in the case of a project of a small
manufacturer, 1 job for every $100,000
guaranteed by the Administrator.
(B) Portfolio standard.--A project need not meet the
project standard under subparagraph (A) if--
(i) eligibility of the project is based on
the community economic improvement objective
under paragraph (1)(B)(ii) or 1 or more of the
public policy objectives under paragraph
(1)(B)(iii); and
(ii) after the loan is made for the project,
the certified development company's portfolio
of outstanding guaranteed debentures, excluding
guaranteed debentures for loans to small
manufacturers, creates or retains--
(I) 1 job for every $65,000
guaranteed by the Administrator; or
(II) in the case of a project in
Alaska, Hawaii, a State-designated
enterprise zone, an empowerment zone,
an enterprise community, or labor
surplus area, as determined by the
Secretary of Labor, or in any other
area designated by the Administrator, 1
job for every $75,000 guaranteed by the
Administrator.
(4) Waiver of requirements.--
(A) In general.--Under regulations prescribed by the
Administrator, the Administrator may waive, on a case-
by-case basis or by regulation, any requirement of
paragraph (3) (other than the requirement that a
calculation under paragraph (3)(B)(ii)(II) exclude
debentures for loans to small manufacturers).
(B) Dollar amounts.--The Administrator may not, in
connection with any waiver under subparagraph (A),
adopt any dollar amount that is lower than a dollar
amount specified in paragraph (3).
(c) Criteria for Assistance.--
(1) In general.--A certified development company shall meet
criteria established by the Administrator, including such an
extent of participation to be required or amount of paid-in
capital to be used in each instance as the Administrator
determines to be reasonable.
(2) Small business concern funds.--In the case of any project
of a small business concern financed under the program, the
small business concern (or its owners, stockholders, or
affiliates) receiving assistance through a body authorized by
this chapter shall provide--
(A) at least 15 percent of the total financed cost of
the project if the small business concern has been in
operation for a period of 2 years or less or if the
project involves the construction of a limited-purpose
or single-purpose building or other structure;
(B) at least 20 percent of the total financed cost of
the project if the project involves both of the
conditions described in subparagraph (A); or
(C) an amount specified by the certified development
company, which shall be at least 10 percent of the
total financed cost of the project, if the project
involves neither of the conditions described in
subparagraph (A).
(3) Funding.--
(A) In general.--Funds necessary to meet the extent
of participation or amount of paid-in capital
determined by the Administrator under paragraph (1) for
a project of a small business concern financed under
the program may be derived, in whole or in part, from--
(i) a State or local government;
(ii) a bank or other financial institution;
(iii) a foundation or other nonprofit
institution; or
(iv) the small business concern (or its
owners, stockholders, or affiliates).
(B) 3d party funding requirement.--Not less than 50
percent of the total financed cost of a project
described in subparagraph (A) of (B) of paragraph (2)
shall come from 1 or more 3d party sources described in
clauses (i), (ii), and (iii) of subparagraph (A).
(C) Seller financing.--Financing provided by a seller
of property to a small business concern for a project
may be used to meet the requirements of this paragraph
if the seller subordinates the interest of the seller
in the property to the debenture guaranteed by the
Administrator.
(4) Collateral.--
(A) In general.--The collateral provided by a small
business concern--
(i) shall generally include a subordinate
lien position on the property being financed
under the program; and
(ii) is only 1 of the factors to be evaluated
in the credit determination.
(B) Additional collateral.--Additional collateral
shall be required only if the Administrator determines,
on a case-by-case basis, that additional security is
necessary to protect the interest of the Government.
(C) Appraisals.--With respect to commercial real
property provided by a small business concern as
collateral, an appraisal of the property by a State-
licensed or State-certified appraiser--
(i) shall be required by the Administrator
before disbursement of the loan if the
estimated value of the property is more than
$250,000; and
(ii) may be required by the Administrator or
the certified development company before
disbursement of the loan, if--
(I) the estimated value of the
property is $250,000 or less; and
(II) an appraisal is necessary for
appropriate evaluation of
creditworthiness.
(5) Leasing.--
(A) In general.--In the case of a project to
construct a new facility for a small business concern,
up to 33 percent of the total project may be leased, if
reasonable projections of growth demonstrate that the
small business concern--
(i) will need additional space within 3 years
after the date of completion of the facility;
and
(ii) will fully utilize the additional space
within 10 years after the date of completion of
the facility.
(B) Limitation on leasing.--In addition to any
portion of a project of a small business concern
permitted to be leased under subparagraph (A), not to
exceed 20 percent of the project may be leased by the
small business concern to 1 or more other tenants if
the small business occupies permanently and uses not
less than a total of 60 percent of the space in the
project after the execution of any leases authorized
under this section.
(6) Ownership requirements.--
(A) Ownership by spouse under community property
law.--Ownership requirements to determine the
eligibility of a small business concern that applies
for assistance under the program shall be determined
without regard to any ownership interest of a spouse
arising solely from the application of the community
property law of a State for purposes of determining
marital interests.
(B) Ownership by relatives.--
(i) In general.--The Administrator shall not
decline to issue a debenture guarantee for a
project of a small business concern on the
ground that the ownership interests of the
small business concern and the ownership
interests of the property to be financed with
the proceeds of a loan made with the proceeds
of the guaranteed debenture are not identical
because 1 or more of the classes of relatives
described in clause (ii) have an ownership
interest in the small business concern or the
property if the Administrator determines, on a
case-by-case basis, that the ownership
interest, the guarantee, and the proceeds of
the loan will substantially benefit the small
business concern.
(ii) Classes of relatives.--The classes of
relatives referred to in clause (i) are father,
mother, son, daughter, wife, husband, brother,
or sister.
(7) Permissible debt refinancing.--
(A) In general.--Any financing approved under the
program may include a limited amount of debt
refinancing.
(B) Expansions.--If a project involves expansion of a
small business concern, any amount of existing
indebtedness that does not exceed 50 percent of the
project cost of the expansion may be refinanced and
added to the expansion cost if--
(i) the proceeds of the indebtedness were
used to acquire land, including a building
situated on the land, to construct a building
on the land or to purchase equipment;
(ii) the existing indebtedness is
collateralized by fixed assets;
(iii) the existing indebtedness was incurred
for the benefit of the small business concern;
(iv) the financing under the program will be
used only for refinancing existing indebtedness
or costs relating to the project financed under
the program;
(v) the financing under the program will
provide a substantial benefit to the borrower
when prepayment penalties, financing fees, and
other financing costs are accounted for;
(vi) the borrower has been current on all
payments due on the existing debt for not less
than 1 year preceding the date of refinancing;
and
(vii) the financing under section 331104 of
this title will provide better terms or a
better rate of interest than the existing
indebtedness at the time of refinancing.
(C) Refinancing not involving expansion.--
(i) Definitions.--In this subparagraph:
(I) Borrower.--The term ``borrower''
means a small business concern that
submits an application to a development
company for financing under this
subparagraph.
(II) Eligible fixed asset.--The term
``eligible fixed asset'' means tangible
property relating to which the
Administrator may provide financing
under this section.
(III) Qualified debt.--The term
``qualified debt'' means indebtedness--
(aa) that--
(AA) was incurred not
less than 2 years
before the date of the
application for
assistance under this
subparagraph;
(BB) is a commercial
loan;
(CC) is not subject
to a guarantee by a
Federal agency;
(DD) the proceeds of
which were used to
acquire an eligible
fixed asset;
(EE) was incurred for
the benefit of the
small business concern;
and
(FF) is
collateralized by
eligible fixed assets;
and
(bb) for which the borrower
has been current on all
payments for not less than 1
year before the date of the
application.
(ii) Authority.--A project that does not
involve the expansion of a small business
concern may include the refinancing of
qualified debt if--
(I) the amount of the financing is
not more than 90 percent of the value
of the collateral for the financing,
except that, if the appraised value of
the eligible fixed assets serving as
collateral for the financing is less
than the amount equal to 125 percent of
the amount of the financing, the
borrower may provide additional cash or
other collateral to eliminate any
deficiency;
(II) the borrower has been in
operation for all of the 2-year period
ending on the date of the loan; and
(III) in the case of a financing for
which the Administrator determines that
there will be an additional cost
attributable to the refinancing of the
qualified debt, the borrower agrees to
pay a fee in an amount equal to the
anticipated additional cost.
(iii) Financing for payment of business
expenses.--
(I) Financing for business
expenses.--The Administrator may
provide financing to a borrower that
receives financing that includes a
refinancing of qualified debt under
clause (ii), in addition to the
refinancing under clause (ii), to be
used solely for the payment of business
expenses.
(II) Application for financing.--An
application for financing under
subclause (I) shall include--
(aa) a specific description
of the expenses for which the
additional financing is
requested; and
(bb) an itemization of the
amount of each expense.
(III) Condition on additional
financing.--A borrower shall not use
any part of the financing under this
clause for nonbusiness purposes.
(iv) Loans based on job creation and
retention.--The Administrator may provide
financing under this subparagraph for a
borrower that meets the job creation and
retention goals under subsection (b).
(v) Nondelegation.--Notwithstanding section
331108(e) of this title, the Administrator
shall not permit a premier certified lender to
approve or disapprove an application for
assistance under this subparagraph.
(vi) Total amount of loans.--The
Administrator may provide not more than a total
of $7,500,000,000 of financing under this
subparagraph for each fiscal year.
(vii) Limitation.--Unless, on application by
a development company and after determining
that the refinance loan is needed for good
cause, the Administrator waives this clause, a
development company shall limit its financings
under this section so that, during any fiscal
year, new financings under this subparagraph
shall not exceed 50 percent of the amount
loaned under the certified development company
program during the previous fiscal year.
(viii) Effective period.--This subparagraph
shall be in effect in any fiscal year during
which the cost to the Federal Government of
making guarantees under this section is zero.
(d) Debenture Amount and Interest.--
(1) Maximum debenture amount.--The amount of a guaranteed
debenture shall not exceed the aggregate amount of the loans to
be made from the proceeds of the guaranteed debenture (other
than any excess attributable to the administrative costs of the
loans).
(2) Minimum interest rate.--The interest rate on a guaranteed
debenture shall be not less than the rate of interest
determined by the Secretary of the Treasury for purposes of
section 303104(b) of this title.
(e) Loan Approval, Amount, and Interest Rate.--
(1) Approval by the administrator.--The Administrator shall
approve each loan made with the proceeds of a guaranteed
debenture.
(2) Maximum loan amount.--
(A) Percentage of project cost.--The amount of a loan
made with the proceeds of a guaranteed debenture shall
not exceed the amount that is equal to 50 percent of
the cost of the project with respect to which the loan
is made.
(B) Dollar amount.--
(i) In general.--Except as provided in clause
(ii), the amount of a loan made with the
proceeds of a guaranteed debenture shall not
exceed $5,000,000.
(ii) Exceptions.--
(I) Public policy objectives.--The
amount of a loan for a project directed
toward 1 or more of the public policy
objectives described in subsection
(b)(1)(B)(iii) shall not exceed
$5,000,000.
(II) Small manufacturers.--The amount
of a loan to a small manufacturer for
any 1 project shall not exceed
$5,500,000.
(III) Reduction of energy
consumption.--The amount of a loan for
a project that reduces the borrower's
energy consumption by at least 10
percent shall not exceed $5,500,000.
(IV) Generation of renewable energy
or renewable fuel.--The amount of a
loan for a project that generates
renewable energy or renewable fuel
(such as biodiesel or ethanol
production) shall not exceed
$5,500,000.
(f) Commercial Loan Interest Rate.--
(1) Purpose.--The purpose of this subsection is to facilitate
the orderly and necessary flow of long-term loans from
certified development companies to small business concerns.
(2) Maximum interest rate.--Notwithstanding the provisions of
the constitution or laws of any State limiting the rate or
amount of interest that may be charged, taken, received, or
reserved, the maximum legal rate of interest on any commercial
loan that funds any portion of the cost of the project financed
under the program that is not funded by a guaranteed debenture
shall be a rate established by the Administrator under
paragraph (3).
(3) Establishment by the administrator.--The Administrator
shall establish and publish quarterly a maximum legal interest
rate for any commercial loan that funds any portion of the cost
of a project financed under the program that is not funded by a
guaranteed debenture.
(g) Fees and Charges.--
(1) Loan fees.--
(A) In general.--With respect to each loan made with
the proceeds of a guaranteed debenture, the
Administrator shall assess and collect a fee, which
shall be payable by the borrowing small business
concern, in an amount established annually by the
Administrator.
(B) Amount.--
(i) In general.--Except as provided in clause
(ii), the amount of a loan fee shall not exceed
the lesser of--
(I) 0.9375 percent per year of the
outstanding balance of the loan; or
(II) the minimum amount necessary to
reduce to zero the cost (as defined in
section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a)) to
the Administrator of purchasing and
guaranteeing debentures under the
program.
(ii) Exception.--
(I) In general.--In the case of a
loan made during the 2-year period
beginning on October 1, 2002, the
amount of a loan fee shall be 50
percent of the amount established under
clause (i), for the life of the loan.
(II) Limitation.--Subclause (I) shall
be effective only to the extent that
funds are made available under
appropriations Acts, which funds shall
be used by the Administrator to offset
the cost (as defined in section 502 of
the Federal Credit Reform Act of 1990
(2 U.S.C. 661a)) of that subclause.
(C) Use of proceeds.--The Administrator shall use the
proceeds of loan fees collected to offset the cost (as
defined in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a)) to the Administrator of making
guarantees under the program.
(2) Administrative expense charges.--The Administrator may
impose a charge for administrative expenses with respect to a
guaranteed debenture.
(3) Participation fees.--
(A) In general.--The Administrator shall collect a 1-
time fee in an amount equal to 50 basis points on the
total participation in a project by an entity described
in clause (i), (ii), or (iii) of subsection (c)(3)(A)
if the participation will occupy a senior credit
position to that of the certified development company.
(B) Use of proceeds.--All proceeds of the
participation fee shall be used to offset the cost (as
defined in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a)) to the Administrator of making
guarantees under the program.
(4) Certified development company fees.--
(A) In general.--The Administrator shall collect
annually from a certified development company a fee of
0.125 percent of the outstanding principal balance of
any guaranteed debenture approved by the Administrator
on or after October 1, 1996.
(B) Derivation.--The fee under subparagraph (A) shall
be derived from the servicing fees collected by the
certified development company pursuant to regulation
and not from any additional fee imposed on a small
business concern.
(C) Use of proceeds.--All proceeds of the certified
development company fee shall be used to offset the
cost (as defined in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a)) to the
Administrator of making guarantees under the program.
(5) Applicability.--The fees authorized by this subsection
apply to financings approved by the Administrator on or after
October 1, 1996.
(h) Calculation of Subsidy Rate.--All fees, interest, and profits
received and retained by the Administrator under the program shall be
included in the calculations made by the Director of the Office of
Management and Budget to offset the cost (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to the
Administrator of purchasing and guaranteeing debentures under the
program.
(i) Required Actions on Default.--
(1) Initial actions.--Not later than the 45th day after the
date on which a payment on a loan funded through a guaranteed
debenture is due and not received, the Administrator shall--
(A) take all necessary steps to bring the loan
current; or
(B) implement a formal written deferral agreement.
(2) Purchase or acceleration of debenture.--Not later than
the 65th day after the date on which a payment on a loan
described in paragraph (1) is due and not received, and absent
a formal written deferral agreement, the Administrator shall
take all necessary steps to purchase or accelerate the
guaranteed debenture.
(3) Prepayment penalties.--With respect to the portion of a
project derived from funds described in subsection (c)(3), the
Administrator--
(A) shall negotiate the elimination of any prepayment
penalties or late fees on a defaulted loan made before
September 30, 1996;
(B) shall not pay any prepayment penalty or late fee
on the default-based purchase of a loan issued after
September 30, 1996; and
(C) for any project financed after September 30,
1996, shall not pay any default interest rate higher
than the interest rate on the note prior to the date of
default.
Sec. 331104. Private debenture sales
(a) In General.--Notwithstanding any other law (including a
regulation), all guaranteed debentures shall be sold to investors,
publicly or by private placement.
(b) Federal Financing Bank.--Nothing in any provision of law
authorizes the Federal Financing Bank to acquire--
(1) any obligation the payment of principal or interest on
which at any time has been guaranteed in whole or in part under
the program that is being sold under subsection (a);
(2) any obligation that is an interest in an obligation
described in paragraph (1); or
(3) any obligation that is secured by, or substantially all
of the value of which is attributable to, an obligation
described in paragraph (1) or (2).
Sec. 331105. Pooling of debentures
(a) Issuance.--
(1) In general.--The Administrator may issue trust
certificates representing ownership of all or a fractional part
of a guaranteed debenture.
(2) Trust or pool.--A trust certificate issued under
paragraph (1) shall be based on and backed by a trust or pool
approved by the Administrator and composed solely of guaranteed
debentures.
(b) Guarantee.--
(1) In general.--The Administrator may, on such terms and
conditions as the Administrator considers appropriate,
guarantee the timely payment of the principal of and interest
on trust certificates issued by the Administrator (or an agent
of the Administrator) for purposes of this section.
(2) Limitation.--A guarantee shall be limited to the extent
of principal and interest on the guaranteed debentures that
compose the trust or pool.
(3) Prepayment on redemption.--
(A) Reduction of guarantee.--If a guaranteed
debenture in a trust or pool is prepaid, 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 that the prepaid
guaranteed debenture represents in the trust or pool.
(B) Limitation on guarantee of interest.--Interest on
a prepaid or defaulted guaranteed debenture shall
accrue and be guaranteed by the Administrator only
through the date of payment on the guarantee.
(C) Call of trust certificate.--During the term of a
trust certificate, the trust certificate may be called
for redemption due to prepayment or default of all
guaranteed debentures constituting the trust or pool.
(c) Full Faith and Credit of the United States.--The full faith and
credit of the United States is pledged to the payment of all amounts
that may be required to be paid under any guarantee of a trust
certificate issued by the Administrator (or an agent of the
Administrator) under this section.
(d) Fees.--
(1) Administrator.--The Administrator shall not collect any
fee for a guarantee under this section.
(2) Agent of the administrator.--This subsection does not
preclude an agent of the Administrator from collecting a fee
approved by the Administrator for performing the functions
described in subsection (f)(2).
(e) Subrogation Rights; Ownership Rights in Guaranteed Debentures.--
(1) Subrogation.--If the Administrator pays a claim under a
guarantee issued under this section, the Administrator shall be
subrogated fully to the rights satisfied by the payment.
(2) Ownership rights in guaranteed debentures.--No Federal,
State, or local law shall preclude or limit the exercise by the
Administrator of the Administrator's ownership rights in the
guaranteed debentures constituting the trust or pool against
which the trust certificates are issued.
(f) Central Registration; Regulation of Brokers and Dealers.--
(1) Central registration.--The Administrator shall provide
for a central registration of all trust certificates sold
pursuant to this section.
(2) Agent.--
(A) In general.--The Administrator shall contract
with an agent to carry out on behalf of the
Administrator--
(i) the central registration functions under
this section; and
(ii) the issuance of trust certificates to
facilitate poolings.
(B) Bond or insurance.--The agent under subparagraph
(A) shall provide a fidelity bond or insurance in such
amounts as the Administrator determines to be necessary
to fully protect the interests of the Government.
(3) Disclosure.--The Administrator shall require a seller to
disclose to a purchaser of a trust certificate issued under
this section, before the sale, information on the terms,
conditions, and yield of the trust certificate.
(4) Regulation of brokers and dealers.--The Administrator may
regulate brokers and dealers in trust certificates sold under
this section.
(5) Form of registration.--This subsection does not preclude
the use of a book-entry or other electronic form of
registration for trust certificates.
Sec. 331106. Prohibition of acceptance of funding with certain
conditions, priorities, restrictions, or
requirements
Notwithstanding any other provision of law, a certified development
company shall not accept funding from any source (including a Federal
agency) if the funding--
(1) includes any condition, priority, or restriction on the
type of small business concern to which the certified
development company may provide financial assistance under the
program; or
(2) includes any condition or imposes any requirement,
directly or indirectly, on any recipient of assistance under
the program.
Sec. 331107. Accredited lenders program
(a) Establishment of Program.--The Administrator may establish as
part of the program an accredited development company program for
qualified development companies that meet the requirements of
subsection (b).
(b) Requirements.--The Administrator may designate a qualified
development company as an accredited lender if the qualified
development company--
(1) has been an active participant in the program for not
less than the preceding 12 months;
(2) has well-trained, qualified personnel who are
knowledgeable in SBA's lending policies and procedures for the
program;
(3) has the ability to process, close, and service financing
for plant and equipment under the program;
(4) has a loss rate on the qualified development company's
debentures that is reasonable and acceptable to the
Administrator;
(5) has a history of submitting to the Administrator complete
and accurate debenture guarantee application packages; and
(6) has demonstrated the ability to serve small business
credit needs for financing plant and equipment through the
program.
(c) Expedited Processing of Loan Applications.--The Administrator
shall develop an expedited procedure for processing a loan application
or servicing action submitted by an accredited lender.
(d) Suspension or Revocation of Designation.--
(1) In general.--The Administrator may suspend or revoke the
designation of a qualified development company as an accredited
lender if the Administrator determines that--
(A) the qualified development company has not
continued to meet the criteria for eligibility under
subsection (b); or
(B) the qualified development company has failed to
adhere to the Administrator's regulations or is
violating any other applicable provision of law.
(2) Effect.--A suspension or revocation under paragraph (1)
shall not affect any outstanding debenture guarantee.
Sec. 331108. Premier certified lenders program
(a) Establishment of Program.--The Administrator may establish as
part of the program a premier certified lenders program for certified
development companies that meet the requirements of subsection (b).
(b) Requirements.--
(1) Application.--To be eligible to participate in the
premier certified lenders program, a certified development
company shall 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 certified
development company as a premier certified lender if--
(A) the certified development company is an active
certified development company in good standing;
(B) the certified development company has been an
active participant in the accredited lenders program
during the entire 12-month period preceding the date on
which the certified development company submits an
application under paragraph (1);
(C) the certified development company has a history
of--
(i) submitting to the Administrator
adequately analyzed debenture guarantee
application packages; and
(ii) properly closing loans under the program
and servicing its loan portfolio;
(D) the certified development company agrees to
assume and to reimburse the Administrator--
(i) for 10 percent of any loss sustained by
the Administrator as a result of default by the
certified development company in the payment of
principal or interest on a guaranteed debenture
issued by the certified development company; or
(ii) for 15 percent of the loss, if the loss
is attributable to a guaranteed debenture
issued by the certified development company
during any period for which an election is in
effect under subsection (c)(8) for the
certified development company; and
(E) the Administrator determines, with respect to the
certified development company, that the loss reserve
established under subsection (c) is sufficient for the
certified development company to meet its obligations
to protect the Federal Government from risk of loss.
(3) Waiver of requirement.--The Administrator may waive the
requirement of paragraph (2)(B) with respect to a certified
development company if the certified development company is
qualified to participate in the accredited lenders program.
(4) Applicability of criteria after designation.--The
Administrator may revoke the designation of a certified
development company as a premier certified lender under this
section at any time, if the Administrator determines that the
certified development company does not meet any requirement
described in subparagraphs (A) to (E) of paragraph (2).
(c) Loss Reserve.--
(1) In general.--A premier certified lender shall establish a
loss reserve for financing approved under this section.
(2) Amount.--The amount of a loss reserve under paragraph (1)
shall be 10 percent of the amount of the premier certified
lender's exposure, as determined under subsection (b)(2)(D).
(3) Assets.--A loss reserve under paragraph (1) shall be
comprised of--
(A) segregated funds on deposit in 1 or more accounts
with 1 or more federally insured depository
institutions selected by the premier certified lender,
subject to a collateral assignment in favor of, and in
a format acceptable to, the Administrator;
(B) 1 or more irrevocable 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.--A premier certified lender shall make
contributions to a loss reserve under paragraph (1) 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) Reimbursement of the administrator for loss.--If a loss
is sustained by the Administrator, any portion of the loss
reserve, and other funds provided by the premier certified
lender as necessary, may be used to reimburse the Administrator
for the premier certified lender's share of the loss as
provided in subsection (b)(2)(D) of this section.
(6) Replacement of used funds.--If a premier certified lender
uses funds in its loss reserve, the premier certified lender
shall replace an equivalent amount of funds in the loss reserve
not later than 30 days after the date of the use.
(7) Withdrawals.--The Administrator shall allow a premier
certified lender to withdraw from its loss reserve amounts
attributable to any debenture that is repaid.
(d) Sale of Certain Defaulted Loans.--
(1) Notice.--
(A) In general.--If, on default in repayment, the
Administrator acquires a loan guaranteed under this
section and identifies the loan for inclusion in a bulk
asset sale of defaulted or repurchased loans or other
financings, the Administrator shall give prior notice
of the inclusion of the loan in the bulk asset sale to
any certified development company that has a contingent
liability under this section.
(B) Timing.--The notice shall be given to the
certified development company as soon as possible after
the financing is identified, but not less than 90 days
before the date on which the Administrator first makes
any records on the financing available for examination
by prospective purchasers prior to its offering in a
package of loans for bulk sale.
(2) Limitation.--The Administrator shall not offer a loan
described in paragraph (1) as part of a bulk sale unless the
Administrator--
(A) provides prospective purchasers with the
opportunity to examine the Administrator's records with
respect to the loan; and
(B) provides the notice required by paragraph (1).
(e) Loan Approval Authority.--
(1) In general.--Notwithstanding section 331103(e)(1) of this
title, and subject to such terms and conditions as the
Administrator may establish, the Administrator may--
(A) permit a premier certified lender 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 the premier certified
lender; and
(B) authorize the guarantee of such a 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 under section
331103 of this title, 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 (including a regulation).
(f) Review.--
(1) In general.--After the issuance and sale of debentures
under this section, the Administrator, at intervals of not
greater than 12 months, shall review the financings made by
each premier certified lender.
(2) Matters to be reviewed.--A review shall include a premier
certified lender's credit decisions and general compliance with
the eligibility requirements for each financing approved under
the premier certified lenders program.
(3) Consideration of findings.--The Administrator shall
consider the findings of the review in carrying out subsection
(g), but the review shall not affect any outstanding debenture
guarantee.
(g) Suspension or Revocation.--
(1) In general.--The designation of a certified development
company as a premier certified lender may be suspended or
revoked if the Administrator determines that the certified
development company--
(A) has not continued to meet the criteria for
eligibility under subsection (b);
(B) has not established or maintained the loss
reserve required under subsection (c);
(C) is failing to adhere to the Administrator's
regulations; or
(D) is violating any other applicable provision of
law.
(2) Effect of suspension or revocation.--A suspension or
revocation under this subsection shall not affect any
outstanding debenture guarantee.
(h) Program Goals.--A certified development company that is
designated as a premier certified lender shall establish a goal of
processing a minimum of not less than 50 percent of the loan
applications that the certified development company receives for
assistance under the premier certified lenders program.
Sec. 331109. Foreclosure and liquidation of loans
(a) Delegation of Authority.--The Administrator shall delegate to a
qualified development company that meets the eligibility requirements
of subsection (b)(1) the authority to foreclose and liquidate, or to
otherwise treat in accordance with this section, defaulted loans in its
portfolio that are funded with the proceeds of guaranteed debentures.
(b) Eligibility for Delegation.--
(1) Requirements.--A qualified development company shall be
eligible for a delegation of authority under subsection (a)
if--
(A) the qualified development company--
(i) participated in the loan liquidation
pilot program under section 204 of the Small
Business Programs Improvement Act of 1996 (110
Stat. 3009-736), as in effect on April 8, 2007;
(ii) is participating in the premier
certified lenders program; or
(iii) during the 3 fiscal years immediately
prior to seeking such a delegation, has made an
average of not less than 10 loans per year that
are funded with the proceeds of guaranteed
debentures; and
(B) the qualified development company--
(i) has 1 or more employees--
(I) who have not less than 2 years of
substantive decisionmaking experience
in administering the liquidation and
workout of problem loans secured in a
manner substantially similar to loans
funded with the proceeds of guaranteed
debentures; and
(II) who have completed a training
program on loan liquidation developed
by the Administrator in conjunction
with qualified development companies
that meet the requirements of this
paragraph; or
(ii) submits to the Administrator
documentation demonstrating that the qualified
development company has contracted with a
qualified 3d party to perform any liquidation
activities and secures the approval of the
contract by the Administrator with respect to
the qualifications of the contractor and the
terms and conditions of liquidation activities.
(2) Confirmation.--
(A) Examination.--On request, the Administrator shall
examine the qualifications of a qualified development
company described in subsection (a) to determine
whether the qualified development company is eligible
for the delegation of authority under subsection (a).
(B) Determination of ineligibility.--If the
Administrator determines that a qualified development
company is not eligible, the Administrator shall
provide the qualified development company with the
reasons for ineligibility.
(c) Scope of Delegated Authority.--
(1) In general.--A qualified development company to which the
Administrator delegates authority under subsection (a) may,
with respect to any loan described in subsection (a)--
(A) perform all liquidation and foreclosure
functions, including the purchase in accordance with
this subsection of any other indebtedness secured by
the property securing the loan, in a reasonable and
sound manner according to commercially accepted
practices, pursuant to a liquidation plan approved in
advance by the Administrator under paragraph (2)(A);
(B) litigate any matter relating to the performance
of the functions described in subparagraph (A), except
that the Administrator may--
(i) defend or bring any claim if--
(I) the outcome of the litigation may
adversely affect the Administrator's
management of the program; or
(II) the Administrator is entitled to
legal remedies not available to a
qualified development company, and
those remedies will benefit the
Administrator or the qualified
development company; or
(ii) oversee the conduct of any such
litigation; and
(C) take other appropriate actions to mitigate loan
losses in lieu of total liquidation or foreclosures,
including the restructuring of a loan in accordance
with prudent loan servicing practices and pursuant to a
workout plan approved in advance by the Administrator
under paragraph (2)(C).
(2) Approval by the administrator.--
(A) Liquidation plan.--
(i) Submission.--Before carrying out
functions described in paragraph (1)(A), a
qualified development company shall submit to
the Administrator a proposed liquidation plan.
(ii) Action by the administrator on proposed
liquidation plan.--
(I) Timing.--Not later than 15
business days after a liquidation plan
is received by the Administrator under
clause (i), the Administrator shall
approve or reject the liquidation plan.
(II) Notice of no decision.--With
respect to any liquidation plan that
cannot be approved or denied within the
15-day period required by subclause
(I), the Administrator shall within
that period provide in accordance with
subparagraph (E) notice to the
qualified development company that
submitted the liquidation plan.
(iii) Routine actions.--In carrying out
functions described in paragraph (1)(A), a
qualified development company may undertake
routine actions not addressed in a liquidation
plan without obtaining additional approval from
the Administrator.
(B) Purchase of indebtedness.--
(i) In general.--In carrying out functions
described in paragraph (1)(A), a qualified
development company shall submit to the
Administrator a request for written approval
before committing the Administrator to the
purchase of any other indebtedness secured by
the property securing a defaulted loan.
(ii) Action by the administrator on
request.--
(I) Timing.--Not later than 15
business days after receiving a request
under clause (i), the Administrator
shall approve or deny the request.
(II) Notice of no decision.--With
respect to any request that cannot be
approved or denied within the 15-day
period required by subclause (I), the
Administrator shall within that period
provide in accordance with subparagraph
(E) notice to the qualified development
company that submitted the request.
(C) Workout plan.--
(i) In general.--In carrying out functions
described in paragraph (1)(C), a qualified
development company shall submit to the
Administrator a proposed workout plan.
(ii) Action by the administrator on proposed
workout plan.--
(I) Timing.--Not later than 15
business days after a workout plan is
received by the Administrator under
clause (i), the Administrator shall
approve or reject the workout plan.
(II) Notice of no decision.--With
respect to any workout plan that cannot
be approved or denied within the 15-day
period required by subclause (I), the
Administrator shall, within that
period, provide in accordance with
subparagraph (E) notice to the
qualified development company that
submitted the workout plan.
(D) Compromise of indebtedness.--In carrying out
functions described in paragraph (1)(A), a qualified
development company may--
(i) consider an offer made by an obligor to
compromise the debt for less than the full
amount owing; and
(ii) pursuant to such an offer, release any
obligor or other party contingently liable, if
the qualified development company secures the
written approval of the Administrator.
(E) Contents of notice of no decision.--A notice
provided by the Administrator under subparagraph
(A)(ii)(II), (B)(ii)(II), or (C)(ii)(II)--
(i) shall be in writing;
(ii) shall state the specific reason for the
Administrator's inability to act on a
liquidation plan, request, or workout plan;
(iii) shall include an estimate of the
additional time required by the Administrator
to act on the liquidation plan, request, or
workout plan; and
(iv) if the Administrator cannot act because
insufficient information or documentation was
provided by the qualified development company
that submitted the liquidation plan, request,
or workout plan, shall specify the nature of
such additional information or documentation.
(3) Conflict of interest.--In carrying out functions
described in paragraph (1), a qualified development company
shall take no action that would result in an actual or apparent
conflict of interest between the qualified development company
(or any employee of the qualified development company) and any
3d party lender, associate of a 3d party lender, or any other
person participating in a liquidation, foreclosure, or loss
mitigation action.
(d) Suspension or Revocation of Authority.--The Administrator may
revoke or suspend a delegation of authority under this section to a
qualified development company if the Administrator determines that the
qualified development company--
(1) does not meet the requirements of subsection (b)(1);
(2) has violated any applicable regulation of the
Administrator or any other applicable law; or
(3) fails to comply with any reporting requirement that may
be established by the Administrator relating to the carrying
out of functions described in this section.
Subtitle IV--Miscellaneous
Chapter 401--PRIME Program
Sec.
401101. Definitions.
401102. Establishment of program.
401103. Uses of assistance.
401104. Allocation of assistance; subgrants.
401105. Matching requirement.
401106. Applications for assistance.
401107. Recordkeeping.
401108. Implementation.
401109. Authorization of appropriations.
Sec. 401101. Definitions
In this chapter:
(1) Capacity building service.--The term ``capacity building
service'' means a service provided to an organization that is,
or that is in the process of becoming, a microenterprise
development organization or program, for the purpose of
enhancing its ability to provide training and services to
disadvantaged entrepreneurs.
(2) Collaborative.--The term ``collaborative'' means 2 or
more nonprofit entities that agree to act jointly as a
qualified organization under the program.
(3) Disadvantaged entrepreneur.--The term ``disadvantaged
entrepreneur'' means a microentrepreneur that is--
(A) a low-income person;
(B) a very low-income person; or
(C) an entrepreneur that lacks adequate access to
capital or other resources essential for business
success, or is economically disadvantaged, as
determined by the Administrator.
(4) Indian tribe.--The term ``Indian tribe'' has the meaning
given the term in section 103 of the Community Development
Banking and Financial Institutions Act of 1994 (12 U.S.C.
4702).
(5) Intermediary.--The term ``intermediary'' means a private,
nonprofit entity that seeks to serve qualified organizations.
(6) Low-income person.--The term ``low-income person'' means
a person having income described in the definition of ``low-
income'' in section 103 of the Community Development Banking
and Financial Institutions Act of 1994 (12 U.S.C. 4702).
(7) Microenterprise.--The term ``microenterprise'' means a
sole proprietorship, partnership, or corporation that--
(A) has fewer than 5 employees; and
(B) generally lacks access to conventional loans,
equity, or other banking services.
(8) Microenterprise development organization or program.--The
term ``microenterprise development organization or program''
means a nonprofit entity (including a community development
corporation or other nonprofit development organization or a
social service organization), or a program administered by such
an entity, that provides services to disadvantaged
entrepreneurs.
(9) Microentrepreneur.--The term ``microentrepreneur'' means
the owner or developer of a microenterprise.
(10) Program.--The term ``program'' means the PRIME program.
(11) Qualified organization.--The term ``qualified
organization'' means--
(A) a nonprofit microenterprise development
organization or program (or a group or collaborative
thereof) that has a demonstrated record of delivering
microenterprise services to disadvantaged
entrepreneurs;
(B) an intermediary;
(C) a microenterprise development organization or
program that is accountable to a local community,
working in conjunction with a State or local government
or Indian tribe; or
(D) an Indian tribe acting on its own, if the Indian
tribe certifies that no private organization or program
referred to in this paragraph exists within its
jurisdiction.
(12) Training and technical assistance.--The term ``training
and technical assistance'' means service and support provided
to a disadvantaged entrepreneur, such as assistance for the
purpose of enhancing business planning, marketing, management,
financial management skills, and assistance for the purpose of
accessing financial services.
(13) Very low-income person.--The term ``very low-income
person'' means a person having an income, adjusted for family
size, of not more than 150 percent of the poverty line (as
defined in section 673 of the Community Services Block Grant
Act (42 U.S.C. 9902), including any revision required by that
section).
Sec. 401102. Establishment of program
The Administrator shall establish a microenterprise technical
assistance and capacity building grant program, to be known as the
program for investment in microenterprise or the PRIME program, to
provide assistance in the form of grants to qualified organizations in
accordance with this chapter.
Sec. 401103. Uses of assistance
A qualified organization shall use a grant made under the program--
(1) to provide training and technical assistance to
disadvantaged entrepreneurs;
(2) to provide training and capacity building services to
microenterprise development organizations and programs and
groups of such organizations to assist the organizations and
programs in developing microenterprise training and services;
(3) to aid in researching and developing the best practices
in the field of microenterprise and technical assistance
programs for disadvantaged entrepreneurs; and
(4) for such other activities as the Administrator determines
are consistent with the purposes of the program.
Sec. 401104. Allocation of assistance; subgrants
(a) Allocation of Assistance.--
(1) In general.--The Administrator shall allocate assistance
under the program to ensure that--
(A) activities described in section 401103(1) of this
title are funded using not less than 75 percent of
amounts made available for such assistance; and
(B) activities described in section 401103(2) of this
title are funded using not less than 15 percent of
amounts made available for such assistance.
(2) Limit on individual assistance.--No single person may
receive more than 10 percent of the total funds appropriated
for the program in a single fiscal year.
(b) Targeted Assistance.--The Administrator shall ensure that not
less than 50 percent of the grants made under the program are used to
benefit very low-income persons, including those residing on Indian
reservations.
(c) Subgrants.--
(1) In general.--A qualified organization receiving
assistance under the program may provide grants using that
assistance to qualified small and emerging microenterprise
organizations and programs, subject to such regulations as the
Administrator determines to be appropriate.
(2) Limit on administrative expenses.--Not more than 7.5
percent of the amount of assistance received by a qualified
organization under the program may be used for administrative
expenses in connection with the making of subgrants under
paragraph (1).
(d) Diversity.--In making grants under the program, the Administrator
shall ensure that grant recipients include both large and small
microenterprise organizations, serving urban, rural, and Indian tribal
communities with diverse populations.
(e) Prohibition of Preferential Consideration of Certain SBA Program
Participants.--In making grants under the program, the Administrator
shall ensure that any application made by a qualified organization that
is a participant in the microloan program does not receive preferential
consideration over applications from other qualified organizations that
are not participants in the microloan program.
Sec. 401105. Matching requirement
(a) In General.--Financial assistance under the program shall be
matched with funds from sources other than the Federal Government in
the amount of not less than 50 cents for each dollar provided by the
Administrator.
(b) Sources of Matching Funds.--Fees, grants, gifts, funds from loan
sources, and in-kind resources of a grant recipient from public or
private sources may be used to comply with the matching requirement
under subsection (a).
(c) Exception.--
(1) In general.--In the case of an applicant for assistance
under the program with severe constraints on available sources
of matching funds, the Administrator may reduce or eliminate
the matching requirement under subsection (a).
(2) Limitation.--Not more than 10 percent of the total funds
made available to carry out the program for any fiscal year may
be excepted under paragraph (1) from the matching requirement
under subsection (a).
Sec. 401106. Applications for assistance
An application for assistance under the program shall be submitted in
such form and in accordance with such procedures as the Administrator
shall establish.
Sec. 401107. Recordkeeping
The requirements of section 115 of the Community Development Banking
and Financial Institutions Act of 1994 (12 U.S.C. 4714) shall apply to
a qualified organization receiving assistance from the Administrator
under the program as if the qualified organization were a community
development financial institution receiving assistance from the Fund
under that Act.
Sec. 401108. Implementation
The Administrator shall by regulation establish such requirements as
are necessary to carry out this chapter.
Sec. 401109. Authorization of appropriations
There are authorized to be appropriated to the Administrator to carry
out this chapter--
(1) $15,000,000 for fiscal year 2000;
(2) $15,000,000 for fiscal year 2001;
(3) $15,000,000 for fiscal year 2002; and
(4) $15,000,000 for fiscal year 2003.
Chapter 403--Women's Business Enterprise Development
Sec.
403101. Definitions.
403102. Establishment of the Interagency Committee.
403103. Duties of the Interagency Committee.
403104. Membership of the Interagency Committee.
403105. Reports from the Interagency Committee.
403106. Establishment of the National Women's Business Council.
403107. Duties of the Council.
403108. Membership and staff of the Council.
403109. Studies and other research.
403110. Authorization of appropriations.
Sec. 403101. Definitions
In this chapter:
(1) Control.--The term ``control'' means to exercise the
power to make policy decisions concerning a business.
(2) Council.--The term ``Council'' means the National Women's
Business Council established under section 403106 of this
title.
(3) Interagency committee.--The term ``Interagency
Committee'' means the Interagency Committee on Women's Business
Enterprise established under section 403102 of this title.
(4) Operate.--The term ``operate'' means to be actively
involved in the day-to-day management of a business.
(5) Women's business enterprise.--The term ``women's business
enterprise'' means--
(A) a business or businesses owned by a woman or a
group of women; or
(B) the establishment, maintenance, or development of
a business or businesses by a woman or a group of
women.
(6) Women-owned business.--The term ``women-owned business''
means a small business--
(A) that a woman or a group of women controls and
operates; and
(B) of which not less than 51 percent is owned by a
woman or a group of women.
Sec. 403102. Establishment of the Interagency Committee
There is established an interagency committee to be known as the
Interagency Committee on Women's Business Enterprise.
Sec. 403103. Duties of the Interagency Committee
(a) In General.--The Interagency Committee shall--
(1) monitor, coordinate, and promote the plans, programs, and
operations of the Federal agencies that may contribute to the
establishment and growth of women's business enterprises;
(2) develop and promote new public sector initiatives,
policies, programs, and plans designed to foster women's
business enterprises;
(3) review, monitor, and coordinate plans and programs,
developed in the public sector, that affect the ability of
women-owned businesses to obtain capital and credit; and
(4) promote and assist, as appropriate, in the development of
surveys of women-owned businesses.
(b) Meetings.--
(1) In general.--The Interagency Committee shall meet not
less than biannually at such times as the Interagency Committee
determines to be necessary to perform the duties under
subsection (a).
(2) Quorum.--A majority of the members of the Interagency
Committee shall constitute a quorum for the approval of
recommendations or reports issued under this section.
(c) Interaction With Council.--
(1) Consultation.--In performing its duties under subsection
(a), the Interagency Committee shall consult with the Council.
(2) Joint meetings.--The Interagency Committee--
(A) shall meet jointly with the Council not less
frequently than biannually; and
(B) may meet jointly with the Council more frequently
at the discretion of the chairperson of the Interagency
Committee and the chairperson of the Council.
(3) Chairperson.--The chairperson of the Interagency
Committee shall serve as chairperson of any joint meeting of
the Interagency Committee and the Council.
Sec. 403104. Membership of the Interagency Committee
(a) In General.--
(1) Participants.--The Interagency Committee shall be
composed of 1 representative from each of the following:
(A) The Department of Commerce.
(B) The Department of Defense.
(C) The Department of Health and Human Services.
(D) The Department of Labor.
(E) SBA.
(F) The Department of Transportation.
(G) The Department of the Treasury.
(H) The General Services Administration.
(I) The Board of Governors of the Federal Reserve.
(J) The Executive staff of the President engaged in
policymaking activities.
(2) Appointments.--
(A) In general.--Except as provided in subparagraph
(B), the head of each entity listed in paragraph (1)
shall designate a representative who--
(i) shall be a policymaking official within
the entity; and
(ii) shall report directly to the head of the
entity on the status of the activities of the
Interagency Committee.
(B) SBA.--With respect to SBA, the representative
shall be the Assistant Administrator of the Office of
Women's Business Ownership, who shall--
(i) serve as the vice chairperson of the
Interagency Committee;
(ii) report directly to the Administrator on
the status of the activities on the Interagency
Committee; and
(iii) serve as the Interagency Committee
Liaison to the Council.
(3) Other participation.--Representatives of the Federal
Government not listed in paragraph (1) may participate in the
meetings and functions of the Interagency Committee on a
temporary basis as needed to carry out specific Interagency
Committee goals.
(b) Appointment of Chairperson.--The President, in consultation with
the Administrator, shall appoint 1 of the members of the Interagency
Committee to serve as chairperson.
(c) Noncompensation.--A member of the Interagency Committee shall
serve without additional pay for such membership.
(d) Detail of Federal Employees.--On request by the chairperson of
the Interagency Committee, the head of any Federal agency may detail
any of the personnel of the Federal agency to assist the Interagency
Committee in carrying out its duties under this chapter without regard
to section 3341 of title 5.
Sec. 403105. Reports from the Interagency Committee
The Interagency Committee, through the Administrator, shall annually
submit to the President, the Committee on Small Business and
Entrepreneurship of the Senate, and the Committee on Small Business of
the House of Representatives a report that contains--
(1) a detailed description of the activities of the
Interagency Committee, including a verbatim report on the
status of progress of the Interagency Committee in meeting its
responsibilities and duties under section 403103(a) of this
title;
(2) the findings and conclusions of the Interagency
Committee; and
(3) the Interagency Committee's recommendations for such
legislation and administrative actions as the Interagency
Committee considers appropriate to promote the development of
small business concerns owned and controlled by women.
Sec. 403106. Establishment of the National Women's Business Council
There is established a council to be known as the National Women's
Business Council, which shall serve as an independent source of advice
and policy recommendations to--
(1) the Interagency Committee;
(2) the Administrator (through the Assistant Administrator of
the Office of Women's Business Ownership);
(3) Congress; and
(4) the President.
Sec. 403107. Duties of the Council
(a) In General.--The Council shall advise and consult with the
Interagency Committee on matters relating to the activities, functions,
and policies of the Interagency Committee, as provided in this chapter.
(b) Meetings.--
(1) In general.--The Council--
(A) shall meet jointly with the Interagency Committee
as provided in section 403103(c) of this title; and
(B) shall meet separately at such times as the
Council considers necessary.
(2) Quorum.--A majority of the members of the Council shall
constitute a quorum for the approval of recommendations or
reports issued under this section.
(c) Recommendations and Reports.--The Council shall--
(1) make annual recommendations for consideration by the
Interagency Committee; and
(2) provide reports and make such other recommendations as
the Council considers appropriate to--
(A) the Interagency Committee;
(B) the President;
(C) the Administrator (through the Assistant
Administrator of the Office of Women's Business
Ownership); and
(D) the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives.
(d) Other Duties.--The Council shall--
(1) review, coordinate, and monitor plans and programs
developed in the public and private sectors that affect the
ability of women-owned business enterprises to obtain capital
and credit;
(2) promote and assist in the development of a women's
business census and other surveys of women-owned businesses;
(3) monitor and promote the plans, programs, and operations
of Federal agencies that may contribute to the establishment
and growth of women's business enterprise;
(4) develop and promote new initiatives, policies, programs,
and plans designed to foster women's business enterprises;
(5) advise and consult with the Interagency Committee in the
design of a comprehensive plan for a joint public-private
sector effort to facilitate growth and development of women's
business enterprises; and
(6) not later than 90 days after the last day of each fiscal
year, submit to the President, the Committee on Small Business
and Entrepreneurship of the Senate, and the Committee on Small
Business of the House of Representatives, a report that
contains--
(A) a detailed description of the activities of the
Council, including a status report on the Council's
progress toward meeting its duties under this
subsection and subsection (a);
(B) the findings, conclusions, and recommendations of
the Council; and
(C) the Council's recommendations for such
legislation and administrative actions as the Council
considers appropriate to promote the development of
small business concerns owned and controlled by women.
(e) Form of Information.--The information described in subparagraphs
(A) to (C) of subsection (d)(6) shall be reported in a report under
subsection (d) verbatim, with any separate additional, concurring, or
dissenting views of the Administrator.
Sec. 403108. Membership and staff of the Council
(a) Chairperson.--
(1) In General.--The President shall appoint an individual to
serve as chairperson of the Council, in consultation with the
Administrator.
(2) Qualifications.--The chairperson of the Council shall be
a prominent business woman who is qualified to head the Council
by virtue of her education, training, and experience.
(b) Other Members.--The Administrator shall, after receiving the
recommendations of the Chairman and the Ranking Member of the Committee
on Small Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives, appoint, in
consultation with the chairperson of the Council, 14 members of the
Council, of whom--
(1) 4 shall be--
(A) owners of small business concerns; and
(B) members of the same political party as the
President;
(2) 4 shall--
(A) be owners of small business concerns; and
(B) not be members of the same political party as the
President; and
(3) 6 shall be representatives of women's business
organizations, including representatives of women's business
center sites.
(c) Diversity.--In appointing members of the Council, the
Administrator shall, to the extent possible, ensure that the members
appointed reflect geographic (including both urban and rural areas),
racial, economic, and public-private sectoral diversity.
(d) Terms.--A member of the Council shall be appointed for a term of
3 years.
(e) Other Federal Service.--If, after appointment to the Council, a
member of the Council becomes an officer or employee of the Federal
Government, the member may continue as a member of the Council for not
longer than the 30-day period beginning on the date on which the member
becomes such an officer or employee.
(f) Vacancies.--
(1) In general.--A vacancy on the Council shall be filled not
later than 30 days after the date on which the vacancy occurs,
in the manner in which the original appointment was made, and
shall be subject to any conditions that applied to the original
appointment.
(2) Unexpired term.--An individual chosen to fill a vacancy
shall be appointed for the unexpired term of the member
replaced.
(g) Reimbursements.--A member of the Council shall serve without pay
for such membership, except that a member shall be entitled to
reimbursement for travel, subsistence, and other necessary expenses
incurred by the member in carrying out the functions of the Council, in
the same manner as a person serving on an advisory committee under
section 103115 of this title.
(h) Executive Director and Additional Employees.--
(1) Executive director.--The Administrator, in consultation
with the chairperson of the Council, shall appoint an executive
director of the Council.
(2) Additional employees.--On recommendation by the executive
director, the chairperson of the Council may appoint and fix
the pay of 4 additional employees of the Council, at a rate of
pay not to exceed the maximum rate of pay payable for a
position at GS-15 of the General Schedule.
(3) Appropriations.--An appointment under paragraph (1) or
(2) shall be subject to the appropriation of funds.
(i) Rates of Pay.--The executive director and staff of the Council
may be appointed without regard to the provisions of title 5 governing
appointments in the competitive service, and except as provided in
subsection (e), may be paid without regard to the provisions of chapter
51 and subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates, except that the
executive director may not receive pay in excess of the annual rate of
basic pay payable for a position at ES-3 of the Senior Executive Pay
Schedule under section 5382 of title 5.
Sec. 403109. Studies and other research
(a) In General.--The Council may conduct such studies and other
research relating to the award of Federal prime contracts and
subcontracts to women-owned businesses, to access to credit and
investment capital by women entrepreneurs, or to other issues relating
to women-owned businesses, as the Council determines to be appropriate.
(b) Contract Authority.--In conducting any study or other research
under this section, the Council may contract with 1 or more public or
private entities.
Sec. 403110. Authorization of appropriations
(a) In General.--There is authorized to be appropriated to carry out
this chapter $1,000,000 for each of fiscal years 2001 through 2003, of
which $550,000 shall be available in each such fiscal year to carry out
section 403109 of this title.
(b) Budget Review.--No amount made available under this section for
any fiscal year may be obligated or expended by the Council before the
date on which the Council reviews and approves the operating budget of
the Council to carry out the responsibilities of the Council for that
fiscal year.
Chapters 405 Through 489--Reserved
Chapter 491--Miscellaneous
Sec.
491101. Small business economic policy.
491102. Small Business Manufacturing Task Force.
491103. Test program for negotiation of comprehensive small business
subcontracting plans.
491104. Coordination of Federal assistance for small business concerns
adversely affected by NAFTA.
491105. Disaster aid to major sources of employment.
491106. Background check policy; fingerprinting.
491107. Expedited resolution of contract dispute matters.
491108. Small Business Procurement Advisory Council.
491109. Small business energy efficiency.
491110. Information regarding, and marketing of, programs for veterans
and reservists.
491111. Outreach regarding health insurance options available to
children.
491112. Secondary market lending authority.
Sec. 491101. Small business economic policy
(a) Declaration of Small Business Policy.--
(1) Preservation and promotion of competitive free enterprise
system.--For the purpose of preserving and promoting a
competitive free enterprise economic system, Congress declares
that it is the continuing policy and responsibility of the
Federal Government to use all practical means and to take such
actions as are necessary, consistent with its needs and
obligations and other essential considerations of national
policy, to implement and coordinate all Federal agency
policies, programs, and activities to--
(A) foster the economic interests of small
businesses;
(B) ensure the existence of a competitive economic
climate conducive to the development, growth, and
expansion of small businesses;
(C) establish incentives to ensure that adequate
capital and other resources at competitive prices are
available to small businesses;
(D) reduce the concentration of economic resources
and expand competition; and
(E) provide an opportunity for entrepreneurship,
inventiveness, and the creation and growth of small
businesses.
(2) Availability of adequate capital to small businesses.--
Congress declares that the Federal Government is committed to a
policy of utilizing all reasonable means, consistent with the
overall economic policy goals of the Nation and the
preservation of the competitive free enterprise system of the
Nation, to establish private sector incentives that will help
ensure that adequate capital at competitive prices is available
to small businesses.
(b) Promotion of Investment.--To fulfill the policy stated in
subsection (a), each Federal agency shall use all reasonable means to
coordinate, create, and sustain policies and programs that promote
investment in small businesses, including the investments that expand
employment opportunities and foster the effective and efficient use of
human and natural resources in the national economy.
(c) Report on Small Business and Competition.--
(1) In general.--Not later than January 20 of each year, the
President shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on small
business and competition.
(2) Contents.--A report under paragraph (1) shall--
(A) examine the current role of small business in the
economy on an industry-by-industry basis;
(B) present current and historical data on
production, employment, investment, population, job
creation and retention, annual business failures,
annual business startups, and other economic variables
for small business in the economy as a whole and for
small business in each sector of the economy, with, to
the extent practicable, specific statistics divided as
to urban, suburban, and rural areas;
(C) identify economic trends that may affect the
small business sector and the state of competition;
(D)(i) examine the effects on small business and
competition of policies, programs, and activities,
including--
(I) the Internal Revenue Code of 1986 (26
U.S.C. 1 et seq.);
(II) the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1001 et seq.);
(III) the Securities Act of 1933 (15 U.S.C.
77a et seq.); and
(IV) the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.);
(ii) identify problems generated by such policies,
programs, and activities; and
(iii) recommend legislative and administrative
solutions to such problems;
(E) recommend a program for carrying out the policy
declared in subsection (a), including such
recommendations for legislation as the President
considers necessary or desirable; and
(F) include an appendix that discloses, for each
Federal agency--
(i) the total dollar value of all Federal
contracts (including subcontracts) exceeding
$10,000 in amount; and
(ii) the dollar amount of those contracts
awarded to--
(I) small businesses;
(II) minority-owned businesses;
(III) female-owned businesses; and
(IV) veteran-owned businesses.
(3) Detailing of information.--The information required to be
contained in the report under paragraph (1) shall separately
detail the portions of the information that are relevant to--
(A) small business concerns owned and controlled by
socially and economically disadvantaged individuals, by
gender;
(B) small business concerns owned and controlled by
women;
(C) qualified HUBZone small business concerns; and
(D) small business concerns owned and controlled by
veterans and small business concerns owned and
controlled by service-disabled veterans.
(4) Supplementary reports.--The President may from time to
time submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives reports supplementary
to a report under paragraph (1) that includes such
supplementary or revised recommendations as the President
considers necessary or desirable to achieve the policy declared
in subsection (a).
Sec. 491102. Small Business Manufacturing Task Force
(a) Establishment.--The Administrator shall establish a Small
Business Manufacturing Task Force (referred to in this section as the
``Task Force'') to address the concerns of small manufacturers.
(b) Chair.--The Administrator shall assign a member of the Task Force
to serve as chair of the Task Force.
(c) Duties.--The Task Force shall--
(1) evaluate and identify whether programs and services are
sufficient to serve the needs of small manufacturers;
(2) actively promote the SBA programs and services that serve
small manufacturers; and
(3) identify and study the unique conditions facing small
manufacturers and develop and propose policy initiatives to
support and assist small manufacturers.
(d) Meetings.--
(1) Frequency.--The Task Force shall meet not less than 4
times a year, and more frequently if necessary to perform its
duties.
(2) Quorum.--A majority of the members of the Task Force
shall constitute a quorum to approve recommendations or
reports.
(e) Personnel Matters.--
(1) Compensation of members.--A member of the Task Force
shall serve without compensation in addition to that received
for services rendered as an officer or employee of the United
States.
(2) Detail of sba employees.--Any SBA employee may be
detailed to the Task Force without reimbursement and without
interruption or loss of civil service status or privilege.
(f) Report.--The Task Force shall annually submit a report containing
the findings and recommendations of the Task Force to--
(1) the President;
(2) the Committee on Small Business and Entrepreneurship of
the Senate; and
(3) the Committee on Small Business of the House of
Representatives.
Sec. 491103. Test program for negotiation of comprehensive small
business subcontracting plans
(a) Test Program.--
(1) In general.--The Secretary of Defense shall establish a
test program under which contracting activities in the military
departments and the defense agencies are authorized to
undertake 1 or more demonstration projects to determine whether
the negotiation and administration of comprehensive
subcontracting plans will reduce administrative burdens on
contractors while enhancing opportunities provided under
Department of Defense contracts for qualified HUBZone small
business concerns, small business concerns owned and controlled
by service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged
individuals, small business concerns owned and controlled by
veterans, and small business concerns owned and controlled by
women.
(2) Broad range of supplies and services.--In selecting the
contracting activities to undertake demonstration projects, the
Secretary of Defense shall take such action as is necessary to
ensure that a broad range of the supplies and services acquired
by the Department of Defense are included in the test program.
(3) Consultation; public comment.--In developing the test
program, the Secretary of Defense shall--
(A) consult with the Administrator; and
(B) provide an opportunity for public comment on the
test program.
(b) Comprehensive Small Business Subcontracting Plan.--
(1) In general.--In a demonstration project under the test
program, the Secretary of a military department or head of a
defense agency shall negotiate, monitor, and enforce compliance
with a comprehensive subcontracting plan with a Department of
Defense contractor described in paragraph (4).
(2) Scope.--The comprehensive subcontracting plan of a
contractor--
(A) shall apply to the entire business organization
of the contractor or to 1 or more of the contractor's
divisions or operating elements, as specified in the
subcontracting plan; and
(B) shall cover each Department of Defense contract
that is entered into by the contractor and each
subcontract that is entered into by the contractor as
the subcontractor under a Department of Defense
contract.
(3) Report.--Each comprehensive subcontracting plan of a
contractor shall require that the contractor report to the
Secretary of Defense semiannually the following:
(A) The dollar amount of subcontracts awarded to 1st
tier subcontractors during the 6-month period covered
by the report to qualified HUBZone small business
concerns, small business concerns owned and controlled
by service-disabled veterans, small business concerns
owned and controlled by socially and economically
disadvantaged individuals, small business concerns
owned and controlled by veterans, and small business
concerns owned and controlled by women, with the
information set forth separately--
(i) by North American Industrial
Classification System code;
(ii) by major defense acquisition program (as
defined in section 2430(a) of title 10);
(iii) by contract, if--
(I) the contract is for the
maintenance, overhaul, repair,
servicing, rehabilitation, salvage,
modernization, or modification of
supplies, systems, or equipment; and
(II) the total value of the contract,
including options, exceeds
$100,000,000; and
(iv) by military department.
(B) The total number of subcontracts active under the
test program during the 6-month period covered by the
report that, but for this section, would have required
a subcontracting plan under section 243103 of this
title.
(C) The amount of costs incurred during the 6-month
period covered by the report in negotiating, complying
with, and reporting on comprehensive subcontracting
plans.
(D) The amount of costs avoided during the 6-month
period covered by the report by adoption of a
comprehensive subcontracting plan.
(4) Department of defense contractor.--A Department of
Defense contractor referred to in paragraph (1) is, with
respect to a comprehensive subcontracting plan negotiated in
any fiscal year, a business concern that, during the
immediately preceding fiscal year, furnished the Department of
Defense with goods or services (including professional
services, research and development services, and construction
services) under at least 3 Department of Defense contracts
having an aggregate value of at least $100,000,000.
(c) Waiver of Certain Subcontracting Plan Requirements.--A Department
of Defense contractor is not required to negotiate or submit a
subcontracting plan under section 243103 of this title with respect to
a Department of Defense contract if--
(1) the contractor has negotiated a comprehensive
subcontracting plan under the test program that includes the
matters specified in section 243103(d) of this title;
(2) such matters have been determined to be acceptable by the
Secretary of the military department or head of a Defense
Agency negotiating the comprehensive subcontracting plan; and
(3) the comprehensive subcontracting plan applies to the
contract.
(d) Failure To Make Good Faith Effort To Comply With Comprehensive
Subcontracting Plan.--
(1) In general.--A contractor that has negotiated a
comprehensive subcontracting plan under the test program shall
be subject to section 243105 of this title regarding the
assessment of liquidated damages for failure to make a good
faith effort to comply with the contractor's comprehensive
subcontracting plan and the goals specified in the plan.
(2) Failure a factor to be considered as part of evaluation
of past performance.--A failure by a contractor to make a good
faith effort to comply with the contractor's comprehensive
subcontracting plan and the goals specified in the plan shall
be a factor to be considered as part of the evaluation of past
performance of an offeror.
(3) Evaluation of past performance.--In each fiscal year in
which the test program is in effect, the Secretary of Defense
shall report to Congress on any negotiated comprehensive
subcontracting plan that the Secretary determines did not meet
the subcontracting goals negotiated in the comprehensive
subcontracting plan for the prior fiscal year.
(e) Report.--Not later than September 30, 2015, the Comptroller
General shall submit to the Committee on Armed Services and Committee
on Small Business of the House of Representatives and the Committee on
Armed Services and Committee on Small Business and Entrepreneurship of
the Senate a report on the results of the test program.
(f) Termination.--The test program shall terminate on December 31,
2027.
Sec. 491104. Coordination of Federal assistance for small business
concerns adversely affected by NAFTA
The Administrator shall coordinate Federal assistance to provide
counseling to small business concerns adversely affected by the North
American Free Trade Agreement.
Sec. 491105. Disaster aid to major sources of employment
(a) In General.--The Administrator may provide any nonagricultural
enterprise that has constituted a major source of employment in an area
suffering a major disaster and that is no longer in substantial
operation as a result of the disaster a loan in such amount as is
necessary to enable the enterprise to resume operations in order to
assist in restoring the economic viability of the disaster area.
(b) Loan Amount.--A loan under this section shall be made without
regard to any limitation on the amount of a loan that may otherwise be
imposed by any other provision of law (including a regulation).
(c) Additional Assistance.--Assistance under this section shall be in
addition to any other Federal disaster assistance, except that such
other assistance may be adjusted or modified to the extent that the
Under Secretary of Emergency Preparedness and Response considers
appropriate.
(d) Interest.--A loan made under this section shall bear interest at
a rate determined by the Secretary of the Treasury, taking into
consideration the current average market yield on outstanding
marketable obligations of the United States with remaining periods to
maturity of 10 to 12 years, reduced by not to exceed 2 percent per
year. In no event shall a loan made under this section bear interest at
a rate in excess of 6 percent per year.
(e) Deferral of Payment of Principal and Interest.--The President, if
the President considers it necessary, may defer payments of principal
and interest on a loan under this section for a period not to exceed 3
years after the date of the loan. Any such deferred payments shall bear
interest at the rate determined under subsection (d).
Sec. 491106. Background check policy; fingerprinting
The Administrator shall not require fingerprints to be obtained for
background check purposes from any participant in any SBA program who
is serving on a voluntary basis and without compensation unless the
Administrator has reasonable grounds to believe that the participant's
record or background is such as to make the participant ineligible to
participate in the program.
Sec. 491107. Expedited resolution of contract dispute matters
(a) Required FAR Provision.--The Federal Acquisition Regulation shall
include provisions that require a contracting officer--
(1) to make every reasonable effort to respond in writing
within 30 days to any written request made to a contracting
officer with respect to a matter relating to the administration
of a contract that is received from a small business concern;
and
(2) if the contracting officer is unable to reply within the
30-day period, to transmit to the contractor within that period
a written notification of a specific date by which the
contracting officer expects to respond.
(b) Applicability.--The provision required under subsection (a) shall
not apply to a request for a contracting officer's decision under
chapter 71 of title 41.
(c) Effect of Section.--This section does not create any right under
chapter 71 of title 41.
Sec. 491108. Small Business Procurement Advisory Council
(a) Establishment.--There is established an interagency council to be
known as the Small Business Procurement Advisory Council (referred to
in this section as the ``Council'').
(b) Duties.--The duties of the Council are--
(1) to develop positions on proposed procurement regulations
affecting the small business community;
(2) to submit comments reflecting such positions to
appropriate regulatory authorities;
(3) to conduct reviews of the Office of Small and
Disadvantaged Business Utilization of each Federal agency to
determine the compliance of each Office with requirements under
section 251109 of this title; and
(4) to identify best practices for maximizing small business
utilization in Federal contracting that may be implemented by
Federal agencies having procurement powers.
(c) Membership.--The Council shall be composed of the following
members:
(1) The Administrator (or a designee of the Administrator).
(2) The Director of the Minority Business Development Agency.
(3) The Director of Small and Disadvantaged Business
Utilization of each procuring agency.
(d) Chairman.--The Council shall be chaired by the Administrator (or
a designee of the Administrator).
(e) Meetings.--The Council shall meet at the call of the chairman as
necessary to consider proposed procurement regulations affecting the
small business community.
(f) Consideration of Council Comments.--The Federal Acquisition
Regulatory Council and other appropriate regulatory authorities shall
consider comments submitted in a timely manner under subsection (b)(2).
(g) Annual Report.--The Council shall submit to the Committee on
Small Business of the House of Representatives and the Committee on
Small Business and Entrepreneurship of the Senate an annual report that
describes--
(1) the comments submitted under subsection (b)(2) during the
1-year period ending on the date on which the report is
submitted, including any outcomes related to the comments;
(2) the results of reviews conducted under subsection (b)(3)
during the 1-year period; and
(3) best practices identified under subsection (b)(4) during
the 1-year period.
Sec. 491109. Small business energy efficiency
(a) Definitions.--In this section:
(1) Disability.--The term ``disability'' has the meaning
given the term in section 3 of the Americans with Disabilities
Act of 1990 (42 U.S.C. 12102).
(2) Efficiency program.--the term ``efficiency program''
means the small business energy efficiency program established
under subsection (c).
(3) Electric utility.--The term ``electric utility'' has the
meaning given the term in section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602).
(4) Governmentwide program.--The term ``Governmentwide
program'' means the program established under subsection (b).
(5) High-performance green building.--The term ``high-
performance green building'' has the meaning given the term in
section 401 of the Energy Independence and Security Act of 2007
(42 U.S.C. 17061).
(6) On-bill financing.--The term ``on-bill financing'' means
a low interest or no interest financing agreement between a
small business concern and an electric utility for the purchase
or installation of equipment under which--
(A) the regularly scheduled payment of the small
business concern to the electric utility is not reduced
by the amount of the reduction in cost attributable to
the new equipment; and
(B) that amount is credited to the electric utility
until the cost of the purchase or installation is
repaid.
(7) Telecommuting.--The term ``telecommuting'' means the use
of telecommunications to perform work functions under
circumstances that reduce or eliminate the need to commute.
(8) Telecommuting pilot program.--The term ``telecommuting
pilot program'' means the pilot program established under
subsection (d).
(b) Governmentwide Program.--
(1) In general.--The Administrator shall promulgate final
rules establishing the Governmentwide program authorized under
subsection (d) of section 337 of the Energy Policy and
Conservation Act (42 U.S.C. 6307) that ensure compliance with
that subsection.
(2) Assistance.--The Administrator shall develop and
coordinate a Governmentwide program, building on the Energy
Star for Small Business program, to assist small business
concerns in--
(A) becoming more energy efficient;
(B) understanding the cost savings from improved
energy efficiency; and
(C) identifying financing options for energy
efficiency upgrades.
(3) Consultation and cooperation.--The Governmentwide program
shall be developed and coordinated--
(A) in consultation with the Secretary of Energy and
the Administrator of the Environmental Protection
Agency; and
(B) in cooperation with any entities that the
Administrator considers appropriate, such as industry
trade associations, industry members, and energy
efficiency organizations.
(4) Availability of information.--The Administrator shall
make available the information and materials developed under
the Governmentwide program to--
(A) small business concerns, including smaller
design, engineering, and construction firms; and
(B) other Federal programs for energy efficiency,
such as the Energy Star for Small Business program.
(5) Strategy.--The Administrator shall develop a strategy to
educate, encourage, and assist small business concerns in
adopting energy efficient building fixtures and equipment.
(c) Efficiency Program.--
(1) Authority.--The Administrator shall establish a small
business energy efficiency program to provide energy efficiency
assistance to small business concerns through small business
development centers.
(2) Small business development centers.--
(A) In general.--In carrying out the efficiency
program, the Administrator shall enter into agreements
with small business development centers under which
small business development centers shall--
(i) provide access to information and
resources on energy efficiency practices,
including on-bill financing options;
(ii) conduct training and educational
activities;
(iii) offer confidential, free, one-on-one,
in-depth energy audits to owners and operators
of small business concerns regarding energy
efficiency practices;
(iv) give referrals to certified
professionals and other providers of energy
efficiency assistance that meet such standards
for educational, technical, and professional
competency as the Administrator shall
establish;
(v) to the extent not inconsistent with
controlling State public utility regulations,
act as a facilitator between small business
concerns, electric utilities, lenders, and the
Administrator to facilitate on-bill financing
arrangements;
(vi) provide necessary support to small
business concerns to--
(I) evaluate energy efficiency
opportunities and opportunities to
design or construct high-performance
green buildings;
(II) evaluate renewable energy
sources, such as the use of solar and
small wind energy to supplement power
consumption;
(III) secure financing to achieve
energy efficiency or to design or
construct high-performance green
buildings; and
(IV) implement energy efficiency
projects;
(vii) assist owners and operators of small
business concerns with the development and
commercialization of clean technology products,
goods, services, and processes that use
renewable energy sources, dramatically reduce
the use of natural resources, and cut or
eliminate greenhouse gas emissions through--
(I) technology assessment;
(II) intellectual property;
(III) small business innovation
research submissions under division I
of subtitle II;
(IV) strategic alliances;
(V) business model development; and
(VI) preparation for investors; and
(viii) help small business concerns improve
environmental performance by shifting to less
hazardous materials and reducing waste and
emissions, including by providing assistance
for small business concerns to adapt the
materials they use, the processes they operate,
and the products and services they produce.
(B) Reports.--A small business development center
participating in the efficiency program shall submit to
the Administrator and the Administrator of the
Environmental Protection Agency an annual report that
includes--
(i) a summary of the energy efficiency
assistance provided by the small business
development center under the efficiency
program;
(ii) the number of small business concerns
assisted by the small business development
center under the efficiency program;
(iii) statistics on the total amount of
energy saved as a result of assistance provided
by that center under the efficiency program;
and
(iv) any additional information that the
Administrator, in consultation with the
Association, determines to be necessary.
(C) Reports to congress.--Not later than 60 days
after the date on which all reports under subparagraph
(B) relating to a year are submitted, the Administrator
shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives a report
summarizing the information regarding the efficiency
program submitted by small business development centers
participating in the efficiency program.
(3) Eligibility.--A small business development center shall
be eligible to participate in the efficiency program only if
the small business development center is accredited under
section 271111(b) of this title.
(4) Selection of participating state programs.--From among
small business development centers submitting applications to
participate in the efficiency program, the Administrator--
(A) shall, to the maximum extent practicable, select
small business development centers in such a manner as
to promote a nationwide distribution of small business
development centers participating in the efficiency
program; and
(B) may not select more than 1 small business
development center in a State to participate in the
efficiency program.
(5) Matching requirement.--Section 271102(g)(1) of this title
shall apply to assistance made available under the efficiency
program.
(6) Grant amounts.--A small business development center
selected to participate in the efficiency program under
paragraph (4) shall be eligible to receive a grant in an amount
equal to not less than $100,000 nor more than $300,000 in each
fiscal year.
(7) Evaluation and report.--The Comptroller General shall--
(A) not later than 30 months after the date of
disbursement of the 1st grant under the efficiency
program, initiate an evaluation of the efficiency
program; and
(B) not later than 6 months after the date of the
initiation of the evaluation under subparagraph (A),
submit to the Administrator, the Committee on Small
Business and Entrepreneurship of the Senate, and the
Committee on Small Business of the House of
Representatives a report containing--
(i) the results of the evaluation; and
(ii) any recommendations regarding whether
the efficiency program, with or without
modification, should be extended to include the
participation of all small business development
centers.
(8) Guarantee.--To the extent not inconsistent with State
law, the Administrator may guarantee the timely payment of a
loan made to a small business concern through an on-bill
financing agreement on such terms and conditions as the
Administrator shall establish through a formal rulemaking,
after providing notice and an opportunity for comment.
(9) Implementation.--Subject to amounts approved in advance
in appropriations Acts and separate from amounts approved to
carry out section 271102(a) of this title, the Administrator
may make grants or enter into cooperative agreements to carry
out this subsection.
(10) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to make grants
and enter into cooperative agreements to carry out this
subsection.
(11) Termination.--The authority under this subsection shall
terminate 4 years after the date of disbursement of the 1st
grant under the efficiency program.
(d) Telecommuting pilot program.--
(1) In general.--The Administrator shall conduct, in not more
than 5 SBA regions, a pilot program to provide information
regarding telecommuting to small business concerns and to
encourage small business concerns to offer telecommuting
options to their employees.
(2) Special outreach to individuals with disabilities.--In
carrying out the telecommuting pilot program, the Administrator
shall make a concerted effort to provide information to--
(A) small business concerns owned by or employing
individuals with disabilities, particularly veterans
who are individuals with disabilities;
(B) Federal, State, and local agencies having
knowledge and expertise in assisting individuals with
disabilities, including veterans who are individuals
with disabilities; and
(C) any group or organization the primary purpose of
which is to aid individuals with disabilities or
veterans who are individuals with disabilities.
(3) Permissible activities.--In carrying out the
telecommuting pilot program, the Administrator may--
(A) produce educational materials and conduct
presentations designed to raise awareness in the small
business community of the benefits and the ease of
telecommuting;
(B)(i) conduct outreach to small business concerns
that are considering offering telecommuting options;
and
(ii) conduct outreach as provided in paragraph (2);
and
(C) acquire telecommuting technologies and equipment
to be used for demonstration purposes.
(4) Selection of regions.--In determining which regions will
participate in the telecommuting pilot program, the
Administrator shall give priority consideration to regions in
which Federal agencies and private-sector employers have
demonstrated a strong regional commitment to telecommuting.
(5) Report.--Not later than 2 years after the date on which
funds are first appropriated to carry out this subsection, the
Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report containing
the results of an evaluation of the telecommuting pilot program
and any recommendations regarding whether the pilot program,
with or without modification, should be extended to include the
participation of all SBA regions.
(6) Authorization of appropriations.--There is authorized to
be appropriated to SBA $5,000,000 to carry out this subsection.
(7) Termination.--The telecommuting pilot program shall
terminate 4 years after the date on which funds are first
appropriated to carry out this subsection.
Sec. 491110. Information regarding, and marketing of, programs for
veterans and reservists
(a) In General.--The Administrator and the Secretary of Defense shall
develop a joint website and printed materials providing information
regarding any program for small business concerns that is available to
veterans or reservists.
(b) Marketing.--The Administrator may--
(1) advertise and promote the program under section 221103 of
this title jointly with the Secretary of Defense and veterans'
service organizations; and
(2) advertise and promote participation by lenders in the
program jointly with trade associations for banks or other
lending institutions.
Sec. 491111. Outreach regarding health insurance options available to
children
(a) Definitions.--In this section:
(1) Certified development company.--The term ``certified
development company'' means a development company that is
participating in the certified development company program.
(2) Medicaid program.--The term ``Medicaid program'' means
the program established under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.).
(3) State.--The term ``State'' has the meaning given the term
for purposes of title XXI of the Social Security Act (42 U.S.C.
1397aa et seq.).
(4) State children's health insurance program.--The term
``State children's health insurance program'' means the State
children's health insurance program established under title XXI
of the Social Security Act (42 U.S.C. 1397aa et seq.).
(5) Task force.--The term ``task force'' means the task force
established under subsection (b)(1).
(b) Establishment of Task Force.--
(1) Establishment.--There is established a task force to
conduct a nationwide campaign of education and outreach for
small business concerns regarding the availability of coverage
for children through private insurance options, the Medicaid
program, and the State children's health insurance program.
(2) Membership.--The task force shall consist of the
Administrator, the Secretary of Health and Human Services, the
Secretary of Labor, and the Secretary of the Treasury.
(3) Responsibilities.--The campaign conducted under this
subsection shall include--
(A) efforts to educate the owners of small business
concerns about the value of health coverage for
children;
(B) information regarding options available to the
owners and employees of small business concerns to make
insurance more affordable, including Federal and State
tax deductions and credits for health care-related
expenses and health insurance expenses and Federal tax
exclusion for health insurance options available under
employer-sponsored cafeteria plans under section 125 of
the Internal Revenue Code of 1986 (26 U.S.C. 125);
(C) efforts to educate the owners of small business
concerns about assistance available through public
programs; and
(D) efforts to educate the owners and employees of
small business concerns regarding the availability of
the hotline operated as part of the Insure Kids Now
program of the Department of Health and Human Services.
(4) Implementation.--In carrying out this subsection, the
task force may--
(A) use any business partner of SBA, including--
(i) a small business development center;
(ii) a certified development company;
(iii) a women's business center; and
(iv) SCORE;
(B) enter into--
(i) a memorandum of understanding with a
chamber of commerce; and
(ii) a partnership with any appropriate small
business concern or health advocacy group; and
(C) designate outreach programs at regional offices
of the Department of Health and Human Services to work
with SBA district offices.
(5) Website.--The Administrator shall ensure that links to
information on the eligibility and enrollment requirements for
the Medicaid program and State children's health insurance
program of each State are prominently displayed on the SBA
website.
(6) Report.--
(A) In general.--Every 2 years, the Administrator
shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives a report
on the status of the nationwide campaign conducted
under paragraph (1).
(B) Contents.--A report under subparagraph (A) shall
include a status update on all efforts made to educate
owners and employees of small business concerns on
options for providing health insurance for children
through public and private alternatives.
Sec. 491112. Secondary market lending authority
(a) Definitions.--In this section:
(1) Authority.--The term ``Authority'' mean the Secondary
Market Lending Authority established under subsection (b)(2).
(2) SBA secondary market.--The term ``SBA secondary market''
means the market for the purchase and sale of loans originated,
underwritten, and closed under subtitles I and II.
(3) Systemically important SBA secondary market broker-
dealer.--The term ``systemically important SBA secondary market
broker-dealer'' means an entity designated as such under
subsection (b)(1).
(b) Responsibilities, Authorities, Organization, and Limitations.--
(1) Designation of systemically important sba secondary
market broker-dealers.--The Administrator shall establish a
process by which the Administrator, in consultation with the
Board of Governors of the Federal Reserve and the Secretary of
the Treasury, shall designate as systemically important SBA
secondary market broker-dealers entities that are vital to the
continued operation of the SBA secondary market by reason of
their purchase and sale of the government guaranteed portion of
loans, or pools of loans, originated, underwritten, and closed
under subtitles I and II.
(2) Establishment of SBA secondary market lending
authority.--
(A) Organization.--
(i) In general.--The Administrator shall
establish within the SBA an office, to be known
as the Secondary Market Lending Authority, to
provide loans to systemically important SBA
secondary market broker-dealers to be used for
the purpose of financing the inventory of the
government guaranteed portion of loans,
originated, underwritten, and closed under
subtitles I and II, or pools of such loans.
(ii) Director.--The Administrator shall
appoint a Director of the Authority, who shall
report to the Administrator.
(iii) Personnel.--The Administrator may hire
such personnel as are necessary to operate the
Authority.
(iv) Contracting of operations.--The
Administrator may contract such Authority
operations as the Administrator determines to
be necessary to qualified 3d party persons.
(v) Contracting with fiduciary and custodial
agents.--The Administrator may contract with
private sector fiduciary and custodial agents
as necessary to operate the Authority.
(B) Loans.--
(i) Process.--The Administrator shall
establish by regulation a process under which
systemically important SBA secondary market
broker-dealers may apply to the Administrator
for loans under this section.
(ii) Contents.--
(I) Process.--The regulation under
clause (i) shall provide a process by
which the Administrator shall consider
and make decisions regarding whether to
extend a loan applied for under this
section.
(II) Documentation.--The regulation
under clause (i) shall provide for such
loan documents, legal covenants,
collateral requirements and other
required documentation as necessary to
protect the interests of the
Administrator and the United States.
(III) Other provisions.--The
regulation under clause (i) shall
include provisions to ensure that--
(aa) loans made under this
section are for the sole
purpose of financing the
inventory of the Government
guaranteed portion of loans,
originated, underwritten, and
closed under subtitles I and
II, or pools of such loans.
(bb) loans made under this
section are fully
collateralized to the
satisfaction of the
Administrator;
(cc) there is no limit to the
frequency with which a borrower
may borrow under this section
unless the Administrator
determines that doing so would
create an undue risk of loss to
the Administrator or the United
States; and
(dd) there is no limit on the
size of a loan, subject to the
discretion of the
Administrator.
(iii) Interest.--Interest on loans under this
section shall not exceed the Federal Funds
target rate established by the Federal Reserve
Board of Governors plus 25 basis points.
(iv) Custodial accounts.--The Administrator
shall establish custodial accounts to safeguard
any collateral pledged to the Administrator in
connection with a loan under this section.
(v) Process for disbursements and receipts.--
The Administrator shall establish a process to
disburse and receive funds to and from
borrowers under this section.
(C) Limitations on use of loan proceeds by
systemically important SBA secondary market broker-
dealers.--
(I) Use of funds for specified
purposes.--The Administrator shall
ensure that borrowers under this
section are using funds provided under
this section only for the purpose
specified in subparagraph
(B)(ii)(III)(aa).
(II) Use of funds for other than
specified purposes.--If the
Administrator finds that funds provided
under this section were used for any
purpose other than a purpose specified
in subparagraph (B)(ii)(III)(aa), the
Administrator shall--
(aa) require immediate
repayment of outstanding loans;
(bb) prohibit the borrower,
its affiliates, or any future
corporate manifestation of the
borrower from using the
Authority; and
(cc) take any other action
that the Administrator, in
consultation with the Attorney
General, considers appropriate.
(c) Fees.--The Administrator shall charge fees (up front, annual, or
both) at a specified percentage of the loan amount that is at such a
rate that the cost of the program under the Federal Credit Reform Act
of 1990 (2 U.S.C. 661 et seq.) shall be equal to zero.
(d) Regulations.--The Administrator shall promulgate regulations
under this section. The notice requirements of section 553(b) of title
5 shall not apply to promulgation of regulations under this section.
(e) Budget Treatment.--Nothing in this section shall be construed to
exempt any activity of the Administrator under this section from the
Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
(f) Monthly Report.--Not later than the 3d business day of each
month, the Administrator shall submit to Congress a report that
discloses--
(1) the aggregate loan amounts extended during the preceding
month under this section;
(2) the aggregate loan amounts repaid under this section
during the preceding month;
(3) the aggregate loan amount outstanding under this section;
(4) the aggregate value of assets held as collateral under
this section;
(5) the amount of any defaults or delinquencies on loans made
under this section;
(6) the identity of any borrower found by the Administrator
to have misused funds made available under this section; and
(7) any other information that the Administrator considers
necessary to fully inform Congress of undue risk of financial
loss to the United States in connection with loans made under
this section.
(g) Duration of Authority.--The authority of this section shall
remain in effect for a period of 2 years after February 17, 2009.
(b) Title 18.--
(1) In general.--Part I of title 18, United States Code, is
amended by adding at the end the following:
``CHAPTER 124--SMALL BUSINESS AND RELATED MATTERS UNDER TITLE 57
``Sec.
``2731. Small business and related matters under title 57.
``Sec. 2731. Small business and related matters under title 57
``(a) Definitions.--In this chapter, the terms `Administrator',
`qualified HUBZone small business concern', `SBA', `small business
concern', `small business concern owned and controlled by socially and
economically disadvantaged individuals', `small business concern owned
and controlled by women', `subcontract', and `subcontractor' have the
meanings given those terms in section 101102 of title 57.
``(b) False Statement; Overvaluation of Security.--A person that
makes a statement, knowing the statement to be false, or willfully
overvalues a security for the purpose of obtaining for himself or for
any applicant a loan, or a loan extension by renewal, deferment of
action, or otherwise, or the acceptance, release, or substitution of
security for a loan, or for the purpose of influencing in any way the
action of the Administrator, or for the purpose of obtaining money,
property, or anything of value, under subtitle I, II, or III of title
57, shall be imprisoned not more than 2 years, fined under this title,
or both.
``(c) Unlawful Act by Person Connected With SBA.--A person connected
in any capacity with SBA that--
``(1) embezzles, abstracts, purloins, or willfully misapplies
any money, funds, security, or other thing of value, whether
belonging to the Administrator or pledged or otherwise
entrusted to the Administrator;
``(2) with intent to defraud the Administrator or any other
body politic or corporate, or any individual, or to deceive any
SBA officer, auditor, or examiner--
``(A) makes a false entry in a book, report, or
statement of or to the Administrator; or
``(B) without being duly authorized, draws an order
or issues, puts forth, or assigns a note, debenture,
bond, or other obligation, or draft, bill of exchange,
mortgage, judgment, or decree of judgment of the
Administrator;
``(3) with intent to defraud, participates or shares in or
receives directly or indirectly any money, profit, property, or
benefit through any transaction, loan, commission, contract, or
other act of the Administrator; or
``(4)(A) gives any unauthorized information concerning a
future action or plan of the Administrator that might affect
the value of a security; or
``(B) having such knowledge, invests or speculates, directly
or indirectly, in a security or property of any company or
corporation receiving a loan or other assistance from the
Administrator;
shall be imprisoned not more than 5 years, fined under this title, or
both.
``(d) Concealment, Disposal, or Conversion of Property.--A person
that, with intent to defraud, knowingly conceals, removes, disposes of,
or converts to the use of that person or any other person any property
mortgaged or pledged to, or held by, the Administrator--
``(1) shall be imprisoned not more than 1 year, fined under
this title, or both; or
``(2) if the value of the property exceeds $100, shall be
imprisoned not more than 5 years, fined under this title, or
both.
``(e) Misrepresentation of Status as Small Business Concern.--
``(1) Offense.--A person that, in writing, misrepresents the
status of a concern or person as a small business concern,
qualified HUBZone small business concern, small business
concern owned and controlled by socially and economically
disadvantaged individuals, or small business concern owned and
controlled by women, in order to obtain for that person or any
other person--
``(A) a prime contract to be awarded under chapter
251, 253, 261, or 263 of title 57;
``(B) a subcontract to be awarded under chapter 233
of title 57;
``(C) a subcontract that is to be included as part or
all of a goal contained in a subcontracting plan
required under section 243103 title 57; or
``(D) a prime contract or subcontract to be awarded
as a result, or in furtherance, of any other provision
of Federal law that specifically references chapter 243
of title 57 for a definition of program eligibility;
shall be imprisoned not more than 10 years, fined not more than
$500,000, or both.
``(2) Limitation on Liability.--This subsection does not
apply to any conduct in violation of paragraph (1) if the
violator acts in good faith reliance on a written advisory
opinion issued as provided under section 105102(d) of title 57.
``(f) False Certification of Past Compliance.--A person that falsely
certifies past compliance with the requirements of section 233128 of
title 57 shall be imprisoned not more than 10 years, fined not more
than $500,000, or both.
``(g) Subcontracting Requirements and Limitations.--
``(1) Subcontracting requirement.--A person that fails to
supply the product of a domestic manufacturer or processor that
is a small business concern as required under section
299107(b)(4) of title 57 shall be imprisoned not more than 10
years, fined not more than $500,000, or both.
``(2) Subcontracting limitation.--A person that expends on
subcontractors an amount in excess of the amount permitted
under paragraph (1), (2), or (3) of subsection (b) of section
299107 of title 57 or in excess of an amount established by the
Administrator under subsection (e) of that section shall be
imprisoned not more than 10 years, fined not more than the
greater of--
``(A) $500,000; or
``(B) the amount of the excess expenditure;
or both imprisoned and fined.''.
(2) Conforming amendment.--The table of contents of part I of
title 18, United States Code, is amended by adding at the end
the following:
Small business and related matters under title 57................2731''.
SEC. 4. CONFORMING AMENDMENTS.
(a) Section 234 of the Disaster Relief Act of 1970 (15 U.S.C. 636b)
is amended in the second sentence by striking ``sections 231, 232,
236(b) and 237'' and inserting ``section 236(b)''.
(b) Section 235 of the Disaster Relief Act of 1970 (15 U.S.C. 636c)
is amended by striking ``section 231, 232, or 233'' and inserting
``section 233''.
(c) Section 237(a) of the Disaster Relief Act of 1970 (15 U.S.C.
636d(a)) is amended in the 1st sentence by striking ``The Small
Business Administration in the case of a nonagricultural enterprise,
and the Farmers Home Administration in the case of an agricultural
enterprise, are authorized to provide any industrial, commercial,
agricultural, or other enterprise, which'' and inserting ``The
Secretary of Agriculture may provide an agricultural enterprise that''.
(d) Section 874(b) of Public Law 114-92 (129 Stat. 941) is amended by
striking ``Section 411(c)(1) of the Small Business Investment Act of
1958 (15 U.S.C. 694b(c)(1))'' and inserting ``section 321102 of title
57, United States Code,''.
SEC. 5. TRANSITIONAL AND SAVINGS PROVISIONS.
(a) Definitions.--In this section:
(1) Restated provision.--The term ``restated provision''
means a provision of title 18 or 57, United States Code, that
is enacted by section 3.
(2) Source provision.--The term ``source provision'' means a
provision of law that is replaced by a restated provision.
(b) Cutoff Date.--The restated provisions replace certain provisions
of law enacted on or before August 18, 2017. If a law enacted after
that date amends or repeals a source provision, that law is deemed to
amend or repeal, as the case may be, the corresponding restated
provision. If a law enacted after that date is otherwise inconsistent
with a restated provision or a provision of this Act, that law
supersedes the restated provision or provision of this Act to the
extent of the inconsistency.
(c) Original Date of Enactment Unchanged.--A restated provision is
deemed to have been enacted on the date of enactment of the
corresponding source provision.
(d) References to Restated Provisions.--A reference to a restated
provision is deemed to refer to the corresponding source provision.
(e) References to Source Provisions.--A reference to a source
provision, including a reference in a regulation, order, or other law,
is deemed to refer to the corresponding restated provision.
(f) Regulations, Orders, and Other Administrative Actions.--A
regulation, order, or other administrative action in effect under a
source provision continues in effect under the corresponding restated
provision.
(g) Actions Taken and Offenses Committed.--An action taken or an
offense committed under a source provision is deemed to have been taken
or committed under the corresponding restated provision.
SEC. 6. REPEALS.
The following provisions of law are repealed, except with respect to
rights and duties that matured, penalties that were incurred, or
proceedings that were begun before the date of enactment of this Act:
Schedule of Laws Repealed
----------------------------------------------------------------------------------------------------------------
United States Code Former
Act Section Classification
----------------------------------------------------------------------------------------------------------------
Small Business Act (Public Law 85-536, Sec. 2).... 2 15 U.S.C. 631
3(a)(1) through (5)(A) 15 U.S.C. 632(a)(1) through
(5)(A)
3(a)(6) through (cc) 15 U.S.C. 632(a)(6) through
(cc)
4 15 U.S.C. 633
5(a) through (i)(3)(C) 15 U.S.C. 634(a) through
(i)(3)(C)
5(i)(4) 15 U.S.C. 634(i)(4)
6 15 U.S.C. 635
7 15 U.S.C. 636
8 15 U.S.C. 637
9 15 U.S.C. 638
10 15 U.S.C. 639
11 15 U.S.C. 640
12 15 U.S.C. 641
13 15 U.S.C. 642
14 15 U.S.C. 643
15(a) through (d) (3d 15 U.S.C. 644(a) through (d)
sentence) (3d sentence)
15(e) through (s)(3) 15 U.S.C. 644(e) through
(s)(3)
15(s)(5), (6) 15 U.S.C. 644(s)(5), (6)
15(u) 15 U.S.C. 644(u)
15(v) 15 U.S.C. 644(v)
16 15 U.S.C. 645
17 15 U.S.C. 646
18 15 U.S.C. 647
19 15 U.S.C. 631 note
20(a)(1), (2), (4), (b) 15 U.S.C. 631 note
through (e), (j)
21 15 U.S.C. 648
22(a) through (l)(6) 15 U.S.C. 649(a) through
(l)(6)
22(l)(7)(B) 15 U.S.C. 649(l)(7)(B)
22(l)(9) 15 U.S.C. 649(l)(9)
23 15 U.S.C. 650
24 15 U.S.C. 651
25 15 U.S.C. 652
26 15 U.S.C. 653
27 15 U.S.C. 654
28 15 U.S.C. 655
29 15 U.S.C. 656
30 15 U.S.C. 657
31 15 U.S.C. 657a
32 15 U.S.C. 657b
34 15 U.S.C. 657d
35 15 U.S.C. 657e
36 15 U.S.C. 657f
37 15 U.S.C. 657i
38(a), (b) 15 U.S.C. 657j(a), (b)
39 15 U.S.C. 657k
40 15 U.S.C. 657l
41 15 U.S.C. 657m
42 15 U.S.C. 657n
43 15 U.S.C. 657o
44 15 U.S.C. 657q
45(a) through (d) 15 U.S.C. 657r(a) through (d)
46 15 U.S.C. 657s
Small Business Investment Act of 1958 (Public Law 101 15 U.S.C. 661 note
85-699)..........................................
102 15 U.S.C. 661
103 15 U.S.C. 662
201 15 U.S.C. 671
301 15 U.S.C. 681
302 15 U.S.C. 682
303 15 U.S.C. 683
304 15 U.S.C. 684
305 15 U.S.C. 685
306 15 U.S.C. 686
308 15 U.S.C. 687
309 15 U.S.C. 687a
310 15 U.S.C. 687b
311 15 U.S.C. 687c
312 15 U.S.C. 687d
313 15 U.S.C. 687e
314 15 U.S.C. 687f
315 15 U.S.C. 687g
316 15 U.S.C. 687h
318 15 U.S.C. 687k
319 15 U.S.C. 687l
320 15 U.S.C. 687m
351 15 U.S.C. 689
352 15 U.S.C. 689a
353 15 U.S.C. 689b
354 15 U.S.C. 689c
355 15 U.S.C. 689d
356 15 U.S.C. 689e
357 15 U.S.C. 689f
358 15 U.S.C. 689g
359 15 U.S.C. 689h
360 15 U.S.C. 689i
361 15 U.S.C. 689j
362 15 U.S.C. 689k
363 15 U.S.C. 689l
364 15 U.S.C. 689m
365 15 U.S.C. 689n
366 15 U.S.C. 689o
367 15 U.S.C. 689p
368 15 U.S.C. 689q
381 15 U.S.C. 690
382 15 U.S.C. 690a
383 15 U.S.C. 690b
384 15 U.S.C. 690c
385 15 U.S.C. 690d
386 15 U.S.C. 690e
387 15 U.S.C. 690f
388 15 U.S.C. 690g
389 15 U.S.C. 690h
390 15 U.S.C. 690i
391 15 U.S.C. 690j
392 15 U.S.C. 690k
393 15 U.S.C. 690l
394 15 U.S.C. 690m
395 15 U.S.C. 690n
396 15 U.S.C. 690o
397 15 U.S.C. 690p
398 15 U.S.C. 690q
401 15 U.S.C. 692
402 15 U.S.C. 693
404 15 U.S.C. 694-1
405 15 U.S.C. 694-2
410 15 U.S.C. 694a
411 15 U.S.C. 694b
412 15 U.S.C. 694c
501 15 U.S.C. 695
502 15 U.S.C. 696
503 15 U.S.C. 697
504 15 U.S.C. 697a
505 15 U.S.C. 697b
506 15 U.S.C. 697c
507 15 U.S.C. 697d
508 15 U.S.C. 697e
509 15 U.S.C. 697f
510 15 U.S.C. 697g
Public Law 91-151................................. 301 15 U.S.C. 633 note
Disaster Relief Act of 1970 (Public Law 91-606)... 234 (1st sentence) 15 U.S.C. 636b (1st sentence)
Public Law 93-24.................................. 9 15 U.S.C. 636 note
Public Law 94-305................................. 201 15 U.S.C. 634a
202 15 U.S.C. 634b
203 15 U.S.C. 634c
204 15 U.S.C. 634d
205 15 U.S.C. 634e
206 15 U.S.C. 634f
207 15 U.S.C. 634g
Public Law 95-507................................. 223 15 U.S.C. 637b
224(a) 15 U.S.C. 637c
Small Business Economic Policy Act of 1980 (Public 302 15 U.S.C. 631a
Law 96-302)......................................
303 15 U.S.C. 631b
Public Law 96-481................................. 301 15 U.S.C. 649a
302 15 U.S.C. 649b
303 15 U.S.C. 649c
304 15 U.S.C. 649d
Small Business Innovation Development Act of 1982 2 15 U.S.C. 638 note
(Public Law 97-219)..............................
Small Business and Federal Procurement Competition 403(b) 15 U.S.C. 644 note
Enhancement Act of 1984 (Public Law 98-577)......
404(c) 15 U.S.C. 637 note
Public Law 99-500................................. 101(a) [title VI, Sec. 630], 15 U.S.C. 638 note
100 Stat. 1783, 1783-30
Public Law 99-591................................. 101(a) [title VI, Sec. 630], 15 U.S.C. 638 note
100 Stat. 3341, 3341-30
Public Law 100-71................................. title I, chapter I, proviso 15 U.S.C. 633 note
in the matter under heading
``salaries and expenses''
under heading ``Small
Business Administration'', at
101 Stat. 396
Women's Business Ownership Act of 1988 (Public Law 401 15 U.S.C. 7101
100-533).........................................
402 15 U.S.C. 7102
403 15 U.S.C. 7103
404 15 U.S.C. 7104
405 15 U.S.C. 7105
406 15 U.S.C. 7106
407 15 U.S.C. 7107
408 15 U.S.C. 7108
409 15 U.S.C. 7109
410 15 U.S.C. 7110
Small Business Administration Reauthorization and 132 15 U.S.C. 637 note
Amendment Act of 1988 (Public Law 100-590).......
133(c) 15 U.S.C. 644 note
Business Opportunity Development Reform Act of 2 15 U.S.C. 636 note
1988 (Public Law 100-656)........................
101 15 U.S.C. 636 note
303(f) 15 U.S.C. 637 note
304(b) 15 U.S.C. 637 note
401(b) 15 U.S.C. 633 note
410 15 U.S.C. 636 note
504 15 U.S.C. 636 note
505 15 U.S.C. 636 note
602(a) 15 U.S.C. 637 note
Public Law 101-189................................ 834 15 U.S.C. 637 note
Small Business Administration Reauthorization and 203 15 U.S.C. 637 note
Amendments Act of 1990 (Public Law 101-574)......
311 15 U.S.C. 653 note
402 15 U.S.C. 637 note
Women's Business Development Act of 1991 (Public 3 (2d sentence) 15 U.S.C. 637 note
Law 102-191).....................................
Small Business Credit and Business Opportunity 202(h) 15 U.S.C. 644 note
Enhancement Act of 1992 (Public Law 102-366).....
221 15 U.S.C. 636 note
222(b)(2) 15 U.S.C. 632 note
226 15 U.S.C. 634 note
Public Law 102-484................................ 4237 15 U.S.C. 638 note
Small Business Research and Development 102 15 U.S.C. 638 note
Enhancement Act of 1992 (Public Law 102-564).....
306 15 U.S.C. 638 note
Small Business Guaranteed Credit Enhancement Act 6 15 U.S.C. 634 note
of 1993 (Public Law 103-81)......................
Riegle Community Development and Regulatory 172 15 U.S.C. 6901
Improvement Act of 1994 (Public Law 103-325).....
173 15 U.S.C. 6902
174 15 U.S.C. 6903
175 15 U.S.C. 6904
176 15 U.S.C. 6905
177 15 U.S.C. 6906
178 15 U.S.C. 6907
179 15 U.S.C. 6908
180 15 U.S.C. 6909
181 15 U.S.C. 6910
Federal Acquisition Streamlining Act of 1994 2353 15 U.S.C. 644 note
(Public Law 103-355).............................
7102 15 U.S.C. 644 note
7104 15 U.S.C. 644a
Small Business Administration Reauthorization and 212(c) 15 U.S.C. 697d note
Amendments Act of 1994 (Public Law 103-403)......
Small Business Programs Improvement Act of 1996 Sec. 103(h) 15 U.S.C. 634 note
(Public Law 104-208).............................
208(d)(4)(B)(i) 15 U.S.C. 683 note
Public Law 105-85................................. 850(e)(3) 15 U.S.C. 637 note
Small Business Reauthorization Act of 1997 (Public 202(b) 15 U.S.C. 636 note
Law 105-135).....................................
416(b) 15 U.S.C. 637 note
501(b)(2) 15 U.S.C. 638 note
505 15 U.S.C. 634 note
507 15 U.S.C. 636 note
509 15 U.S.C. 636 note
704 15 U.S.C. 631 note
707 15 U.S.C. 631 note
709 15 U.S.C. 631 note
Veterans Entrepreneurship and Small Business 203 15 U.S.C. 657b note
Development Act of 1999 (Public Law 106-50)......
301 15 U.S.C. 657b note
302 15 U.S.C. 657b note
603 15 U.S.C. 657b note
604 15 U.S.C. 657b note
Small Business Innovation Research Program 1(a)(9) [title I, Sec. 102], 15 U.S.C. 638 note
Reauthorization Act of 2000 (Public Law 106-554). 114 Stat. 2763A-668
1(a)(9) [title I, Sec. 108], 15 U.S.C. 638 note
114 Stat. 2763A-671
Small Business Investment Company Amendments Act 6(d) 15 U.S.C. 697 note
of 2001 (Public Law 107-100).....................
Small Business Reauthorization and Manufacturing Sec. 147 15 U.S.C. 631c
Assistance Act of 2004 (Public Law 108-447)......
Sec. 152(a)(2) 15 U.S.C. 632 note
Sec. 155 15 U.S.C. 657g
Public Law 109-59................................. 10201 15 U.S.C. 657g note
Public Law 109-289................................ Sec. 8018 (last proviso) 15 U.S.C. 637 note
Public Law 110-140................................ 1203 15 U.S.C. 657h
Military Reservist and Veteran Small Business 3 15 U.S.C. 636 note
Reauthorization and Opportunity Act of 2008
(Public Law 110-186).............................
105 15 U.S.C. 637 note
201(b), (c) 15 U.S.C. 636 note
202 15 U.S.C. 636 note
Small Business Disaster Response and Loan 12052 15 U.S.C. 636e
Improvements Act of 2008 (Public Law 110-246)....
12063(b) 15 U.S.C. 636 note
12066(b) 15 U.S.C. 636f
12072 15 U.S.C. 636g
12073 15 U.S.C. 636h
12079 15 U.S.C. 636i
12085 15 U.S.C. 636j
12091 15 U.S.C. 636k
Public Law 111-3.................................. 621 15 U.S.C. 657p
Public Law 111-5, div. A, title V................. 509 not classified
Small Business Jobs Act of 2010 (Public Law 111- 1131(b), (c) 15 U.S.C. 636 note
240).............................................
1136 15 U.S.C. 632 note
1202(a) 15 U.S.C. 649b note
1205(b) 15 U.S.C. 649 note
1207 15 U.S.C. 649b note
1321 15 U.S.C. 637 note
1344 15 U.S.C. 632 note
1347(a)(1), (b)(3) 15 U.S.C. 637 note
1401(c) 15 U.S.C. 636 note
1402 15 U.S.C. 648b note
Public Law 112-74................................. 532 15 U.S.C. 633a
SBIR/STTR Reauthorization Act of 2011 (Public Law 5107(c), (d) 15 U.S.C. 638 note
112-81)..........................................
5142 15 U.S.C. 638a
5143(a), (c) 15 U.S.C. 638b(a), (c)
5168(a) 15 U.S.C. 638 note
Public Law 112-239................................ 1622(a), (b) 15 U.S.C. 631 note
1631(c) 15 U.S.C. 644 note
1633(b), (c) 15 U.S.C. 631 note
1653(b) 15 U.S.C. 637d
1681(b) 15 U.S.C. 645 note
1681(c) 15 U.S.C. 632 note
1682(b), (c) 15 U.S.C. 645 note
1683 15 U.S.C. 645a
1698 15 U.S.C. 632 note
Public Law 113-66, div. A, title XVI.............. 1615 15 U.S.C. 657s note
Public Law 114-88, div. A, title I................ 1105 15 U.S.C. 657l note
Public Law 114-92, div. A, title VIII............. 868(b)(1) through (5), (8) 15 U.S.C. 644 note
Public Law 114-113, div. E, title V............... 521(a) 15 U.S.C. 636 note
Public Law 114-328, div. A, title XVIII........... 1814(b) 15 U.S.C. 644 note
1831(c) 15 U.S.C. 632 note
----------------------------------------------------------------------------------------------------------------
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