This compilation includes
PL 108‑447, approved 12/8/04.
SMALL BUSINESS ACT
(Public Law 85‑536, as amended)
§ 1. This Act may be cited as the "Small Business Act".
§ 2. (a) 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. Such security and well‑being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small‑business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation.
(b) (1) It is the declared policy of the Congress that the Federal Government, through the Small Business Administration, acting in cooperation with the Department of Commerce and other relevant State and Federal agencies, should aid and assist small businesses, as defined under this Act, to increase their ability to compete in international markets by—
(A) enhancing their ability to export;
(B) facilitating technology transfers;
(C) enhancing their ability to compete effectively and efficiently against imports;
(D) increasing the access of small businesses to long‑term capital for the purchase of new plant and equipment used in the production of goods and services involved in international trade;
(E) disseminating information concerning State, Federal, and private programs and initiatives to enhance the ability of small businesses to compete in international markets; and
(F) ensuring that the interests of small businesses are adequately represented in bilateral and multilateral trade negotiations.
(2) The Congress recognizes that the Department of Commerce is the principal Federal agency for trade development and export promotion and that the Department of Commerce and the Small Business Administration work together to advance joint interests. It is the purpose of this Act to enhance, not alter, their respective roles.
(c) It is the declared policy of the Congress that the Government, through the Small Business Administration, should aid and assist small business concerns which are engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and the financial assistance programs authorized by this Act are also to be used to assist such concerns.
(d) (1) The assistance programs authorized by sections 7(i) and 7(j) of this Act are to be utilized to assist in the establishment, preservation, and strengthening of small business concerns and improve the managerial skills employed in such enterprises, with special attention to small business concerns (1) located in urban or rural areas with high proportions of unemployed or low‑income individuals; or (2) owned by low‑income individuals; and to mobilize for these objectives private as well as public managerial skills and resources.
(2) (A) With respect to the programs authorized by section 7(j) of this Act, the Congress finds—
(i) that ownership and control of productive capital is concentrated in the economy of the United States and certain groups, therefore, own and control little productive capital;
(ii) that certain groups in the
(iii) that the broadening of small business ownership among groups that presently own and control little productive capital is essential to provide for the well‑being of this Nation by promoting their increased participation in the free enterprise system of the United States;
(iv) that such development of business ownership among groups that presently own and control little productive capital will be greatly facilitated through the creation of a small business ownership development program, which shall provide services, including, but not limited to, financial, management, and technical assistance.
(v) that the power to let Federal contracts pursuant to section 8(a) of the Small Business Act can be an effective procurement assistance tool for development of business ownership among groups that own and control little productive capital; and
(vi) that the procurement authority under section 8(a) of the Small Business Act shall be used only as a tool for developing business ownership among groups that own and control little productive capital.
(B) It is therefore the purpose of the programs authorized by section 7(j) of this Act to—
(i) foster business ownership and development by individuals in groups that own and control little productive capital; and
(ii) promote the competitive viability of such firms in the marketplace by creating a small business and capital ownership development program to provide such available financial, technical, and management assistance as may be necessary.
(e) Further, it is the declared policy of the Congress that the Government should aid and assist victims of floods and other catastrophes, and small‑business concerns which are displaced as a result of federally aided construction programs.
(f) (1) With respect to the Administration's business development programs the Congress finds—
(A) that the opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic equality for such persons and improve the functioning of our national economy;
(B) that many such persons are socially disadvantaged because of their identification as members of certain groups that have suffered the effects of discriminatory practices or similar invidious circumstances over which they have no control;
(C) that such groups include, but are not limited to, Black Americans, Hispanic Americans, Native Americans, Indian tribes, Asian Pacific Americans, Native Hawaiian Organizations, and other minorities;
(D) that it is in the national interest to expeditiously ameliorate the conditions of socially and economically disadvantaged groups;
(E) that such conditions can be improved by providing the maximum practicable opportunity for the development of small business concerns owned by members of socially and economically disadvantaged groups;
(F) that such development can be materially advanced through the procurement by the United States of articles, equipment, supplies, services, materials, and construction work from such concerns; and
(G) that such procurements also benefit the
(2) It is, therefore, the purpose of section 8(a) to—
(A) promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals so that such concerns can compete on an equal basis in the American economy;
(B) promote the competitive viability of such concerns in the marketplace by providing such available contract, financial, technical, and management assistance as may be necessary; and
(C) clarify and expand the program for the
procurement by the
(g) In administering the disaster loan program authorized by section 7 of this Act, to the maximum extent possible, the Administration shall provide assistance and counseling to disaster victims in filing applications, providing information relevant to loan processing, and in loan closing and prompt disbursement of loan proceeds and shall give the disaster program a high priority in allocating funds for administrative expenses.
(h) (1) With respect to the programs and activities authorized by this Act, the Congress finds that—
(A) women owned business has become a major contributor to the American economy by providing goods and services, revenues, and jobs;
(B) over the past two decades there have been substantial gains in the social and economic status of women as they have sought economic equality and independence;
(C) despite such progress, women, as a group, are subjected to discrimination in entrepreneurial endeavors due to their gender;
(D) such discrimination takes many overt and subtle forms adversely impacting the ability to raise or secure capital, to acquire managerial talents, and to capture market opportunities;
(E) it is in the national interest to expeditiously remove discriminatory barriers to the creation and development of small business concerns owned and controlled by women;
(F) the removal of such barriers is essential to provide a fair opportunity for full participation in the free enterprise system by women and to further increase the economic vitality of the Nation;
(G) increased numbers of small business concerns owned and controlled by women will directly benefit the United States Government by expanding the potential number of suppliers of goods and services to the Government; and
(H) programs and activities designed to assist small business concerns owned and controlled by women must be implemented in such a way as to remove such discriminatory barriers while not adversely affecting the rights of socially and economically disadvantaged individuals.
(2) It is, therefore, the purpose of those programs and activities conducted under the authority of this Act that assist women entrepreneurs to‑‑
(A) vigorously promote the legitimate interests of small business concerns owned and controlled by women;
(B) remove, insofar as possible, the discriminatory barriers that are encountered by women in accessing capital and other factors of production; and
(C) require that the Government engage in a systematic and sustained effort to identify, define and analyze those discriminatory barriers facing women and that such effort directly involve the participation of women business owners in the public/private sector partnership.
(i) PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT LAWFULLY WITHIN THE UNITED STATES.—None of the funds made available pursuant to this Act may be used to provide any direct benefit or assistance to any individual in the United States if the Administrator or the official to which the funds are made available receives notification that the individual is not lawfully within the United States.
(j) CONTRACT BUNDLING.—In complying with the statement of congressional policy expressed in subsection (a), relating to fostering the participation of small business concerns in the contracting opportunities of the Government, each Federal agency, to the maximum extent practicable, shall—
(1) comply with congressional intent to 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 their participation; and
(3) avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors.
§ 3 (a) (1) For the purposes of this Act, a small‑business concern, including but not limited to enterprises that are engaged in the business of production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming and agricultural related industries, shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation: Provided, That notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small business concern if it (including its affiliates) has annual receipts not in excess of $750,000.
(2) ESTABLISHMENT OF SIZE STANDARDS.—
(A) IN GENERAL.—In addition to the criteria specified in paragraph (1), the Administrator may specify detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of this Act or any other Act.
(B) ADDITIONAL CRITERIA.—The standards described in paragraph (1) may utilize number of employees, dollar volume of business, net worth, net income, a combination thereof, or other appropriate factors.
(C) REQUIREMENTS.—Unless specifically authorized by statute, no Federal department or agency may prescribe a size standard for categorizing a business concern as a small business concern, unless such proposed size standard—
(i) is proposed after an opportunity for public notice and comment;
(ii) provides for determining—
(I) the size of a manufacturing concern as measured by the manufacturing concern's average employment based upon employment during each of the manufacturing concern's pay periods for the preceding 12 months;
(II) the size of a business concern providing services on the basis of the annual average gross receipts of the business concern over a period of not less than 3 years;
(III) the size of other business concerns on the basis of data over a period of not less than 3 years; or
(IV) other appropriate factors; and
(iii) is approved by the Administrator.
(3) When establishing or approving any size standard pursuant to paragraph (2), the Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.
(b) for purposes of this Act, any reference to an agency or department of the United States, and the term " Federal agency", shall have the meaning given the term "agency" by section 551(1) of title 5, United States Code, but does not include the United States Postal Service or the General Accounting Office.
(c) (1) For purposes of this Act, a qualified employee trust shall be eligible for any loan guarantee under section 7(a) with respect to a small business concern on the same basis as if such trust were the same legal entity as such concern.
(2) For purposes of this Act, the term "qualified employee trust" means, with respect to a small business concern, a trust—
(A) which forms part of an employee stock ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code of 1954)—
(i) which is maintained by such concern, and
(ii) which provides that each participant in the plan is entitled to direct the plan as to the manner in which voting rights under qualifying employer securities (as defined in section 4975(e)(8) of such Code) which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of outstanding common shares voted; and
(B) in the case of any loan guarantee under section 7(a), the trustee of which enters into an agreement with the Administrator which is binding on the trust and on such small business concern and which provides that—
(i) the loan guaranteed under section 7(a) shall be used solely for the purchase of qualifying employer securities of such concern,
(ii) all funds acquired by the concern in such purchase shall be used by such concern solely for the purposes for which such loan was guaranteed,
(iii) such concern will provide such funds as may be necessary for the timely repayment of such loan, and the property of such concern shall be available as security for repayment of such loan, and
(iv) all qualifying employer securities acquired by such trust in such purchase shall be allocated to the accounts of participants in such plan who are entitled to share in such allocation, and each participant has a nonforfeitable right, not later than the date such loan is repaid, to all such qualifying employer securities which are so allocated to the participant's account.
(3) Under regulations which may be prescribed by the Administrator, a trust may be treated as a qualified employee trust with respect to a small business concern if—
(A) the trust is maintained by an employee organization which represents at least 51 percent of the employees of such concern, and
(B) such concern maintains a plan—
(i) which is an employee benefit plan which is designed to invest primarily in qualifying employer securities (as defined in section 4975(e)(8) of the Internal Revenue Code of 1954),
(ii) which provides that each participant in the plan is entitled to direct the plan as to the manner in which voting rights under qualifying employer securities which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of the outstanding common shares voted,
(iii) which provides that each participant who is entitled to distribution from the plan has a right, in the case of qualifying employer securities which are not readily tradable on an established market, to require that the concern repurchase such securities under a fair valuation formula, and
(iv) which meets such other requirements (similar to requirements applicable to employee stock ownership plans as defined in section 4975(e)(7) of the Internal Revenue Code of 1954) as the Administrator may prescribe, and
(C) in the case of a loan guarantee under section 7(a), such organization enters into an agreement with the Administration which is described in paragraph (2)(B).
(d) For purposes of section 7 of this Act, the term "qualified Indian tribe" means an Indian tribe as defined in section 4(a) of the Indian Self-Determination and Education Assistance Act, which owns and controls 100 per centum of a small business concern.
(e) For purposes of section 7 of this Act, the term "public or private organization for the handicapped" means one—
(1) which is organized under the laws of the United States or of any State, operated in the interest of handicapped individuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;
(2) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
(3) which, in the production of commodities and in the provision of services during any fiscal year in which it received financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man‑hours required for the production or provision of the commodities or services.
(f) For purposes of section 7 of this Act, the term “handicapped individual” means an individual—
(1) who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise be qualified or qualifiable; or
(2) who is a service-disabled veteran.
(g) For purposes of section 7 of this Act, the term "energy measures" includes—
(1) solar thermal energy equipment which is either of the active type based upon mechanically forced energy transfer or of the passive type based on convective, conductive, or radiant energy transfer or some combination of these types;
(2) photovoltaic cells and related equipment;
(3) a product or service the primary purpose of which is conservation of energy through devices or techniques which increase the energy efficiency of existing equipment, methods of operation, or systems which use fossil fuels, and which is on the Energy Conservation Measures list of the Secretary of Energy or which the Administrator determines to be consistent with the intent of this subsection;
(4) equipment the primary purpose of which is production of energy from wood, biological waste, grain or other biomass source of energy;
(5) equipment the primary purpose of which is industrial cogeneration of energy, district heating, or production of energy from industrial waste;
(6) hydroelectric power equipment;
(7) wind energy conversion equipment; and
(8) engineering, architectural, consulting, or other professional services which are necessary or appropriate to aid citizens in using any of the measures described in paragraph (1) through (7).
(h) For purposes of this Act, the term "credit elsewhere" means the availability of credit from non‑Federal sources on reasonable terms and conditions taking into consideration the prevailing rates and terms in the community in or near where the concern transacts business, or the homeowner resides, for similar purposes and periods of time.
(i) For purposes of section 7 of this Act, the term "homeowners" includes owners and lessees of residential property and also includes personal property.
(j) For the purposes of this Act, the term "small agricultural cooperative" means an association (corporate or otherwise) acting pursuant to the provisions of the Agricultural Marketing Act (12 U.S.C. 1141(j), whose size does not exceed the size standard established by the Administration for other similar agricultural small business concerns. In determining such size, the Administration shall regard the association as a business concern and shall not include the income or employees of any member shareholder of such cooperative.
(k) For the purposes of this Act, the term "disaster" means a sudden event which causes severe damage including, but not limited to, floods, hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes, windstorms, landslides or mudslides, tidal waves, commercial fishery failures or fishery resource disasters (as determined by the Secretary of Commerce under section 308(b) of the Interjurisdictional Fisheries Act of 1986), ocean conditions resulting in the closure of customary fishing waters, riots, civil disorders or other catastrophes, except it does not include economic dislocations.
(l) For purposes of this Act—
(1) The term "computer crime" means—
(A) any crime committed against a small business concern by means of the use of a computer; and
(B) any crime involving the illegal use of, or tampering with, a computer owned or utilized by a small business concern.
(m) For purposes of this Act, the term "simplified acquisition threshold" has the meaning given such term in section 4(11) of the Office of Federal Procurement Policy Act (41 USC 403(11)).
(n) For the purposes of this Act, a small business concern is a small business concern owned and controlled by women if—
(1) at least 51 percent of small business concern is owned by one or more women or, in the case of any publicly owned business at least 51 percent of the stock of which is owned by one or more women; and
(2) the management and daily business operations of the business are controlled by one or more women.
(o) DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS AND RELATED TERMS.—In this Act:
(1) BUNDLED CONTRACT.—The term “bundled contract” means a contract that is entered into to meet requirements that are consolidated in a bundling of contract requirements.
(2) BUNDLING OF CONTRACT REQUIREMENTS.—The term “bundling of contract requirements” means consolidating 2 or more procurement requirements for goods or services 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—
(A) the diversity, size, or specialized nature of the elements of the performance specified;
(B) the aggregate dollar value of the anticipated award;
(C) the geographical dispersion of the contract performance sites; or
(D) any combination of the factors described in subparagraphs (A), (B), and (C).
(3) SEPARATE SMALL CONTRACT.—The term “separate smaller contract”, with respect to a bundling of contract requirements, means a contract that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns.
(p) DEFINITIONS RELATING TO HUBZONES.—In this Act:
(1) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The term “historically underutilized business zone” means any area located within 1 or more—
(A) qualified census tracts;
(B) qualified nonmetropolitan counties;
(C) lands within the external boundaries of an Indian reservation;
(D) redesignated areas; or
(E) base closure areas.
(2) HUBZONE.—The term “HUBZone” means a historically underutilized business zone.
(3) HUBZONE SMALL BUSINESS CONCERN.—The term “HUBZone small business concern” means—
(A) a small business concern that is at least
51 percent owned and controlled by
(B) a small business concern that is—
(i) an Alaska Native Corporation owned and controlled by Natives (as determined pursuant to section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(1))); or
(ii) a direct or indirect subsidiary corporation, joint venture, or partnership of an Alaska Native Corporation qualifying pursuant to section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(1)), if that subsidiary, joint venture, or partnership is owned and controlled by Natives (as determined pursuant to section 29(e)(2) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(2)));
(C) a small business concern—
(i) that is wholly owned by 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 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 (41 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
(E) a small business concern that is—
(i) a small
agricultural cooperative organized or incorporated in the
(ii) wholly owned by 1 or more small
agricultural cooperatives organized or incorporated in the
(iii) owned in part by 1 or more small
agricultural cooperatives organized or incorporated in the
(4) QUALIFIED AREAS—
(A) QUALIFIED CENSUS TRACT.—The term “qualified census tract” has the meaning given that term in section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986.
(B) QUALIFIED NONMETROPOLITAN COUNTY.—The term “qualified nonmetropolitan county” means any county—
(i) that was not located in a metropolitan statistical area (as defined in section 143(k)(2)(B) of the Internal Revenue Code of 1986) at the time of the most recent census taken for purposes of selecting qualified census tracts under section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986; and
(ii) in which—
(I) the median household income is less than 80 percent of the nonmetropolitan State median household income, based on the most recent data available from the Bureau of the Census of the Department of Commerce; or
(II) the unemployment rate is not less than
140 percent of the average unemployment rate for the
(C) REDESIGNATED AREA.—The term “redesignated
area” means any census tract that ceases to be qualified under subparagraph (A)
and any nonmetropolitan county that ceases to be qualified under subparagraph
(B), except that a census tract or a nonmetropolitan county may be a
“redesignated area” only until the later of—
(i) the date on
which the Census Bureau publicly releases the first results from the 2010
decennial census; or
(ii) 3 years after the date on which the census tract or nonmetropolitan county ceased to be so qualified.
(D) BASE CLOSURE AREA.—The term “base closure area” means lands within the external boundaries of a military installation that were closed through a privatization process under the authority of—
(i) the Defense
Base Closure and Realignment Act of 1990
(part A of title XXIX of division B of Public Law 101-510; 10 U.S.C. 2687
note);
(ii) title II of the Defense Authorization
Amendments and Base Closure and Realignment Act (Public Law 100-526; 10 U.S.C.
2687 note);
(iii) section 2687 of title 10, United States
Code; or
(iv) any other provision of law authorizing or 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 of [sic] redevelopment, while retaining the authority to enter into a leaseback of all or a portion of the property for military use.
(5) QUALIFIED HUBZONE SMALL BUSINESS CONCERN—
(A) IN GENERAL.—A HUBZone small business concern is “qualified”, if—
(i) the small business concern has certified in writing to the Administrator (or the Administrator otherwise determines, based on information submitted to the Administrator by the small business concern, or based on certification procedures, which shall be established by the Administration by regulation) that—
(I) it is a HUBZone small business concern—
(aa) pursuant to subparagraph (A), (B), (C), (D) or (E) of paragraph (3), and that its principal office is located in a HUBZone and not fewer than 35 percent of its employees reside in a HUBZone; or
(bb) pursuant to paragraph (3)(C), and not fewer than 35 percent of its employees engaged in performing a contract awarded to the small business concern on the basis of a preference provided under section 31(b) reside within any Indian reservation governed by 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 subclause (I) during the performance of any contract awarded to the small business concern on the basis of a preference provided under section 31(b); and
(III) with respect to any subcontract entered into by the small business concern pursuant to a contract awarded to the small business concern under section 31, the small business concern will ensure that—
(aa) in the case of a contract for services (except construction), not less than 50 percent of the cost of contract performance incurred for personnel will be expended for its employees or for employees of other HUBZone small business concerns;
(bb) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), not less than 50 percent of the cost of manufacturing the supplies (not including the cost of materials) will be incurred in connection with the performance of the contract in a HUBZone by 1 or more HUBZone small business concerns;
(cc) in the case of a contract for the procurement by the Secretary of Agriculture of agricultural commodities, none of the commodity being procured will be obtained by the prime contractor through a subcontractor for the purchase of the commodity in substantially the final form in which it is to be supplied to the Government; and
(ii) no certification made or information provided by the small business concern under clause (i) has been, in accordance with the procedures established under section 31(c)(1)—
(I) successfully challenged by an interested party; or
(II) otherwise determined by the Administrator to be materially false.
(B) CHANGE IN PERCENTAGES.—The Administrator may utilize a percentage other than the percentage specified in under [sic] item (aa) or (bb) of subparagraph (A)(i)(III), if the Administrator determines that such action is necessary to reflect conventional industry practices among small business concerns that are below the numerical size standard for businesses in that industry category.
(C) CONSTRUCTION AND OTHER CONTRACTS.—The Administrator shall promulgate final regulations imposing requirements that are similar to those specified in items (aa) and (bb) of subparagraph (A)(i)(III) on contracts for general and specialty construction, and on contracts for any other industry category that would not otherwise be subject to those requirements. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B).
(D) LIST OF QUALIFIED SMALL BUSINESS CONCERNS.—The Administrator shall establish and maintain a list of qualified HUBZone small business concerns, which list shall, to the extent practicable—
(i) once the Administrator has made the certification required by subparagraph (A)(i) regarding a qualified HUBZone small business concern and has determined that subparagraph (A)(ii) does not apply to that concern, include the name, address, and type of business with respect to each such small business concern;
(ii) be updated by the Administrator not less than annually; and
(iii) be provided upon request to any Federal agency or other entity.
(6) NATIVE AMERICAN SMALL BUSINESS CONCERNS.—
(A) ALASKA NATIVE CORPORATION.—The term “Alaska Native Corporation” has the same meaning as the term “Native Corporation” in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).
(B) ALASKA NATIVE VILLAGE.—The term “Alaska Native Village” has the same meaning as the term “Native village” in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).
(C) INDIAN RESERVATION.—The term “Indian reservation”—
(i) has the same meaning as the term “Indian country” in section 1151 of title 18, United States Code, except that such term does not include—
(I) any lands that are located within a State in which a tribe did not exercise governmental jurisdiction on the date of enactment of this paragraph, unless that tribe is recognized after that date of enactment 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); and
(II) lands taken into trust or acquired by an Indian tribe after the date of enactment of this paragraph if such lands are not located within the external boundaries of an Indian reservation or former reservation or are not contiguous to the lands held in trust or restricted status on that date of enactment; and
(ii) in the State of
(I) are within the jurisdictional areas of an Oklahoma Indian tribe (as determined by the Secretary of the Interior); and
(II) are recognized by the Secretary of the Interior as eligible for trust land status under part 151 of title 25, Code of Federal Regulations (as in effect on the date of enactment of this paragraph).
(7) AGRICULTURAL COMMODITY.—The term “agricultural commodity” has the same meaning as in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(q) DEFINITIONS RELATING TO VETERANS.—In this Act, the following definitions apply:
(1) SERVICE-DISABLED VETERAN.—The term “service-disabled veteran” means a veteran with a disability that is service-connected (as defined in section 101(16) of title 38, United States Code).
(2) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS.—The term “small business concern owned and controlled by service-disabled veterans” means a small business concern—
(A) not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and
(B) the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.
(3) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY VETERANS.—The term “small business concern owned and controlled by veterans” means a small business concern—
(A) not less than 51 percent of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and
(B) the management and daily business operations of which are controlled by one or more veterans.
(4) VETERAN.—The term “veteran” has the meaning given the term in section 101(2) of title 38, United States Code.
(r) DEFINITIONS
RELATING TO SMALL BUSINESS LENDING COMPANIES.—As used in section 23 of this
Act:
(1) SMALL BUSINESS LENDING COMPANY.—The term
“small business lending company” means a business concern that is authorized by
the Administrator to make loans pursuant to section 7(a) and whose lending
activities are not subject to regulation by any Federal or State regulatory
agency.
(2) NON-FEDERALLY REGULATED SBA LENDER.—The
term “non-Federally regulated SBA lender” means a business concern if—
(A) such concern is authorized by the
Administrator to make loans under section 7;
(B) such concern is subject to regulation by
a State; and
(C) the lending activities of such concern are not regulated by any Federal banking authority.
§ 4. (a) In order to carry out the policies of
this Act there is hereby created an agency under the name "Small Business
Administration" (herein referred to as the Administration), which
Administration shall be under the general direction and supervision of the
President and shall not be affiliated with or be within any other agency or
department of the Federal Government. The principal office of the
Administration shall be located in the
(b) (1) The management of the Administration shall be vested in an Administrator who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate, and who shall be a person of outstanding qualifications known to be familiar and sympathetic with small‑business needs and problems. The Administrator shall not engage in any other business, vocation, or employment than that of serving as Administrator. In carrying out the programs administered by the Small Business Administration including its lending and guaranteeing functions, the Administrator shall not discriminate on the basis of sex or marital status against any person or small business concern applying for or receiving assistance from the Small Business Administration, and the Small Business Administration shall give special consideration to veterans of the Armed Forces of the United States and their survivors or dependents. The President also may appoint a Deputy Administrator, by and with the advice and consent of the Senate. The Administrator is authorized to appoint five Associate Administrators (including the Associate Administrator specified in section 201 of the Small Business Investment Act of 1958) to assist in the execution of the functions vested in the Administration. One of the Associate Administrators shall be designated at the time of his appointment as the Associate Administrator for Minority Small Business and Capital Ownership Development who shall be an employee in the competitive service or in the Senior Executive Service and a career appointee and shall be responsible to the Administrator for the formulation and execution of the policies and programs under sections 7(j) and 8(a) of this Act which provide assistance to minority small business concerns. The Deputy Administrator shall be Acting Administrator of the Administration during the absence or disability of the Administrator or in the event of a vacancy in the office of the Administrator.
(2) The Administrator also shall be responsible for—
(A) establishing and maintaining an external small business economic data base for the purpose of providing the Congress and the Administration information on the economic condition and the expansion or contraction of the small business sector. To that end, the Administrator shall publish on a regular basis national small business economic indices and, to the extent feasible, regional small business economic indices, which shall include, but need not be limited to, data on—
(i) employment, layoffs, and new hires;
(ii) number of business establishments and the types of such establishments such as sole proprietorships, corporations, and partnerships;
(iii) number of business formations and failures;
(iv) sales and new orders;
(v) back orders;
(vi) investment in plant and equipment;
(vii) changes in inventory and rate of inventory turnover;
(viii) sources and amounts of capital investment, including debt, equity, and internally generated funds;
(ix) debt to equity ratios;
(x) exports;
(xi) number and dollar amount of mergers and acquisitions by size of acquiring and acquired firm; and
(xii) concentration ratios; and
(B) publishing annually a report giving a comparative analysis and interpretation of the historical trends of the small business sector as reflected by the data acquired pursuant to subparagraph (A) of this subsection.
(3) RISK MANAGEMENT DATABASE.—
(A) ESTABLISHMENT.—The Administration shall establish, within the management system for the loan programs authorized by subsections (a) and (b) of section 7 of this Act and title V of the Small Business Investment Act of 1958, a management information system that will generate a database capable of providing timely and accurate information in order to identify loan underwriting, collections, recovery, and liquidation problems.
(B) INFORMATION TO BE MAINTAINED.—In addition to such other information as the Administration considers appropriate, the database established under subparagraph (A) shall, with respect to each loan program described in subparagraph (A), include information relating to—
(i) the identity of the institution making the guaranteed loan or issuing the debenture;
(ii) the identity of the borrower;
(iii) the total dollar amount of the loan or debenture;
(iv) the total dollar amount of government exposure in each loan;
(v) the district of the Administration in which the borrower has its principal office;
(vi) the principal line of business of the borrower, as identified by Standard Industrial Classification Code (or any successor to that system);
(vii) the delinquency rate for each program (including number of instances and days overdue);
(viii) the number and amount of repurchases, losses, and recoveries in each program;
(ix) the number of deferrals or forbearances in each program (including days and number of instances);
(x) comparisons on the basis of loan program, lender, Administration district and region, for all the data elements maintained; and
(xi) underwriting characteristics of each loan that has entered into default, including term, amount and type of collateral, loan-to-value and other actual and projected ratios, line of business, credit history, and type of loan.
(C) DEADLINE FOR OPERATIONAL CAPABILITY.—The database established under subparagraph (A) shall—
(i) be operational not later than June 30, 1997; and
(ii) capture data beginning on the first day of the second quarter of fiscal year 1997 beginning after such date and thereafter.
(c) (1) There are hereby established in the Treasury the following revolving funds: (A) a disaster loan fund which shall be available for financing functions performed under sections 5(e), 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), and 7(c)(2) of this Act; and (B) a business loan and investment fund which shall be available for financing functions performed under sections 5(g), 7(a), and 8(a) of this Act, and titles III, IV and V of the Small Business Investment Act of 1958.
(2) All repayments of loans and debentures, payments of interest and other receipts arising out of transactions heretofore or hereafter entered into by the Administration (A) pursuant to sections 5(e), 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8), 7(c)(2), and 7(g) of this Act shall be paid into a disaster loan fund; and (B) pursuant to sections 5(g), 7(a), 7(e), 7(h), 7(i), 7(l), 7(m), and 8(a) of this Act, and titles III, IV and V of the Small Business Investment Act of 1958, shall be paid into the business loan and investment fund.
(3) Unexpended balances of appropriations made to the fund pursuant to this subsection, as in effect immediately prior to the effective date of this paragraph, shall be allocated, together with related assets and liabilities, to the funds established by paragraph (1) in such amounts as the Administrator shall determine.
(4) The Administration shall submit to the Committees on Appropriations, Senate Select Committee on Small Business, and the Committee on Small Business of the House of Representatives, as soon as possible after the beginning of each calendar quarter, a full and complete report on the status of each of the funds established by paragraph (1). Business‑type budgets for each of the funds established by paragraph (1) shall be prepared, transmitted to the Committees on Appropriations, the Senate Select Committee on Small Business and the Committee on Small Business of the House of Representatives and considered, and enacted in the manner prescribed by law (Sections 102, 103 and 104 of the Government Corporation Control Act (31 USC 847‑849)) for wholly owned Government corporations.
(5) (A) The
Administration is authorized to make and issue notes to the Secretary of the
Treasury for the purpose of obtaining funds necessary for discharging
obligations under the revolving funds created by section 4(c)(1) of this Act and
for authorized expenditures out of the funds.
Such notes shall be in such form and denominations and have such
maturities and be subject to such terms and conditions as may be prescribed by
the Administration with the approval of the Secretary of the Treasury. Such
notes shall bear interest at a rate fixed by the Secretary of the Treasury,
taking into consideration the current average market yield of outstanding
marketable obligations of the
(B) (i) Moneys in the funds established in subsection (c)(1) not needed for current operations may be paid into miscellaneous receipts of the Treasury.
(ii) Following the close of each fiscal year, the Administration shall pay into the miscellaneous receipts of the United States Treasury the actual interest that the Administration collects during that fiscal year on all financings made under this Act.
(C) Except on those loan disbursements on which interest is paid under subsection (B)(ii), the Administration shall pay into miscellaneous receipts of the Treasury, following the close of each fiscal year, interest received by the Administration on financing functions performed under this Act and titles III and V of the Small Business Investment Act of l958 providing the capital used to perform such functions originated from appropriated funds. Such payments shall be treated by the Department of the Treasury as interest income, not as retirement of indebtedness.
(D) There are authorized to be appropriated, in any fiscal year, such sums as may be necessary for losses and interest subsidies incurred by the funds established by subsection (c)(l), but not previously reimbursed.
(d) There is hereby created the Loan Policy Board of the Small Business Administration, which shall consist of the following members, all ex officio. The Administrator, as Chairman, the Secretary of the Treasury, and the Secretary of Commerce. Either of the said Secretaries may designate an officer of his Department, who has been appointed by the President by and with the advice and consent of the Senate, to act in his stead as a member of the Loan Policy Board with respect to any matter or matters. The Loan Policy Board shall establish general policies (particularly with reference to the public interest involved in the granting and denial of applications for financial assistance by the Administration and with reference to the coordination of the functions of the Administration with other activities and policies of the Government), which shall govern the granting and denial of applications for financial assistance by the Administration.
(e) PROHIBITION ON THE PROVISION OF ASSISTANCE.—Notwithstanding any other provision of law, the Administration is prohibited from providing any financial or other assistance to any business concern or other person engaged in the production or distribution of any product or service that has been determined to be obscene by a court of competent jurisdiction.
(f) CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT OBLIGATIONS.—
(1) IN GENERAL.—For financial assistance approved after the promulgation of final regulations to implement this section, each recipient of financial assistance under this Act, including a recipient of a direct loan or a loan guarantee, shall certify that the recipient is not more than 60 days delinquent under the terms of any—
(A) administrative order;
(B) court order; or
(C) repayment agreement entered into between the recipient and the custodial parent or State agency providing child support enforcement services,
that requires the recipient to pay child support, as such term is defined in section 462(b) of the Social Security Act.
(2) ENFORCEMENT.—Not later than 6 months after the date of enactment of this subsection, the Administration shall promulgate such regulations as may be necessary to enforce compliance with the requirements of this subsection.
(g) GIFTS.—
(1) IN GENERAL.—The Administrator may, for purposes of this Act, the Small Business Investment Act of 1954 [sic; should be 1958], and title IV of the Women’s Business Ownership Act of 1988, solicit, accept, hold, administer, utilize, and dispose of gifts, devises, and bequests of cash, property (including tangible, intangible, real, and personal), subsistence, and services. Notwithstanding any other provision of law, the Administrator may utilize gifts, devises, or bequests for marketing and outreach activities, including the cost of promotional materials and wearing apparel.
(2) AUDITS.—Any gift, devise, or bequest of
cash accepted by the Administrator shall be held in a separate account and
shall be subject to semi-annual audits by the Inspector General of the
Administration who shall report his findings to the Congress.
(3) CONFLICTS OF INTEREST.—No gift, devise,
or bequest shall be solicited or accepted under the authority of this
subsection if such solicitation or acceptance would, in the determination of
the General Counsel, create a conflict of interest.
(4) ACCEPTANCE OF SERVICES AND FACILITIES
FOR DISASTER LOAN PROGRAM.—The Administrator may accept the services and
facilities of Federal, State, and local agencies and groups, both public and
private, and utilize such gratuitous services and facilities as may, from time
to time, be necessary, to further the objectives of section 7(b).
(h) CO-SPONSORSHIP
OF EVENTS.—
(1) AUTHORIZATION.—The Administrator, after
consultation with the General Counsel, may provide assistance for the benefit
of small business through Administration-sponsored activities, through
cosponsored activities with any eligible entity, or through such other
activities that the Administrator determines to be appropriate, including
recognition events.
(2) ELIGIBLE ENTITY.—For purposes of this
subsection, the term “eligible entity” means any for-profit or not-for-profit
entity, any Federal, State, or local government official, or any Federal,
State, or local government entity.
(3) PROHIBITION ON ENDORSEMENTS.—The
Administrator shall ensure that the Administration and any eligible entities
that cosponsor activities receive appropriate recognition for such
cosponsorship, and that such recognition does not constitute or imply an
endorsement by the Administration of any product or service of such entity.
(4) AUTHORITY TO CHARGE
FEES.—Notwithstanding any other provision of law, the Administrator may charge
a participant in any activity sponsored or cosponsored by the Administration a
minimal fee, and retain and use such fee to cover the costs of such activity.
(5) LIMITED DELEGATION.—The Administrator
may not delegate the authority described in this subsection except to the
Deputy Administrator, an Associate Administrator, or an Assistant Administrator.
(6) REPORT TO CONGRESS.—The Inspector
General of the Administration shall report semi-annually to Congress on the
Administrator’s use of authority under this subsection.
(7) RULEMAKING.—Not later than 180 days after the date of enactment of this subsection, the Administrator shall promulgate regulations to carry out the provisions of this subsection.
§ 5 (a) The Administration shall have power to adopt, alter, and use a seal, which shall be judicially noticed. The Administrator is authorized, subject to the civil service and classification laws, to select, employ, appoint, and fix the compensation of such officers, employees, attorneys, and agents as shall be necessary to carry out the provisions of this Act; to define their authority and duties; and to pay the costs of qualification of certain of them as notaries public. The Administration, with the consent of any board, commission, independent establishment or executive department of the Government, may avail itself on a reimbursable or non‑reimbursable basis of the use of information, services, facilities (including any field service thereof), officers, and employees thereof, in carrying out the provisions of this Act.
(b) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act the Administrator may—
(1) sue and be sued in any court of record of a State having general jurisdiction, or in any United States district court, and jurisdiction is conferred upon such district court to determine such controversies without regard to the amount in controversy; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Administrator or his property;
(2) under regulations prescribed by him, assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of loans granted under this Act, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such loans until such time as such obligations may be referred to the Attorney General for suit or collection;
(3) deal with, complete, renovate, improve, modernize, insure, or rent, or sell for cash or credit upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any real property conveyed to or otherwise acquired by him in connection with the payment of loans granted under this Act;
(4) pursue to final collection, by way of compromise or otherwise, all claims against third parties assigned to the Administrator in connection with loans made by him. This shall include authority to obtain deficiency judgments or otherwise in the case of mortgages assigned to the Administrator. Section 3709 of the Revised Statutes, as amended (41 U.S.C., sec. 5), shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of property obtained by the Administrator as a result of loans made under this Act if the premium therefor or the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Administrator deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein acquired by the Administrator pursuant to the provisions of this Act may be exercised by the Administrator or by any officer or agent appointed by him without the execution of any express delegation of power or power of attorney. Nothing in this section shall be construed to prevent the Administrator from delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint;
(5) acquire, in any lawful manner, any property (real, personal, or mixed, tangible or intangible), whenever deemed necessary or appropriate to the conduct of the activities authorized in sections 7(a) and 7(b);
(6) make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this Act;
(7) in addition to any powers, functions, privileges and immunities otherwise vested in him, take any and all actions (including the procurement of the services of attorneys by contract in any office where an attorney or attorneys are not or cannot be economically employed full time to render such services) when he determines such actions are necessary or desirable in making, servicing, compromising, modifying, liquidating, or otherwise dealing with or realizing on loans made under the provisions of this Act: Provided, That with respect to deferred participation loans, the Administrator may, in the discretion of and pursuant to regulations promulgated by the Administrator, authorize participating lending institutions to take actions relating to loan servicing on behalf of the Administrator, including determining eligibility and creditworthiness and loan monitoring, collection, and liquidation;
(8) pay the transportation expenses and per diem in lieu of subsistence expenses, in accordance with the Travel Expense Act of 1949, for travel of any person employed by the Administration to render temporary services not in excess of six months in connection with any disaster referred to in section 7(b) from place of appointment to, and while at, the disaster area and any other temporary posts of duty and return upon completion of the assignment: Provided That the Administrator may extend the six-month limitation for an additional six months if the Administrator determines the extension is necessary to continue efficient disaster loan making activities;
(9) accept the services and facilities of Federal, State, and local agencies and groups, both public and private, and utilize such gratuitous services and facilities as may, from time to time, be necessary, to further the objectives of section 7(b);
(10) upon purchase by the Administration of any deferred participation entered into under section 7 of this Act, continue to charge a rate of interest not to exceed that initially charged by the participating institution on the amount so purchased for the remaining term of the indebtedness;
(11) make such investigations as he deems
necessary to determine whether a recipient of or participant in any assistance
under this Act or any other person has engaged or is about to engage in any
acts or practices which constitute or will constitute a violation of any
provision of this Act, or of any rule or regulation under this Act, or of any
order issued under this Act. The
Administration shall permit any person to file with it a statement in writing,
under oath or otherwise as the Administration shall determine, as to all the
facts and circumstances concerning the matter to be investigated. For the purpose of any investigation, the
Administration is empowered to administer oaths and affirmations, subpena [sic]
witnesses, compel their attendance, take evidence, and require the production
of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the
production of any such records may be required from any place in the
(12) impose, retain, and use only those fees which are specifically authorized by law or which are in effect on September 30, 1994, and in the amounts and at the rates in effect on such date, except that the Administrator may, subject to approval in appropriations Acts, impose, retain, and utilize, additional fees—
(A) not to exceed $100 for each loan servicing action (other than a loan assumption) requested after disbursement of the loan, including any substitution of collateral, release or substitution of a guarantor, reamortization, or similar action;
(B) not to exceed $300 for loan assumptions;
(C) not to exceed 1 percent of the amount of requested financings under title III of the Small Business Investment Act of 1958 for which the applicant requests a commitment from the Administration for funding during the following year; and
(D) to recover the direct, incremental cost involved in the production and dissemination of compilations of information produced by the Administration under the authority of this Act and the Small Business Investment Act of 1958;
(13) collect, retain and utilize, subject to approval in appropriations Acts, any amounts collected by fiscal transfer agents and not used by such agent as payment of the cost of loan pooling or debenture servicing operations, except that amounts collected under this paragraph and paragraph (12) shall be utilized solely to facilitate the administration of the program that generated the excess amounts; and
(14) require any lender authorized to make
loans under section 7 of this Act to pay examination and review fees, which
shall be deposited in the account for salaries and expenses of the
Administration, and shall be available for the costs of examinations, reviews,
and other lender oversight activities.
(c) To such extent as he finds necessary to carry out the provisions of this Act, the Administrator is authorized to procure the temporary (not in excess of one year) or intermittent services of experts or consultants or organizations thereof, including stenographic reporting services, by contract or appointment, and in such cases such services shall be without regard to the civil‑service and classification laws and, except in the case of stenographic reporting services by organizations, without regard to section 3709 of the Revised Statutes, as amended (41 U.S.C., § 5). Any individual so employed may be compensated at a rate not in excess of the daily equivalent of the highest rate payable under section 5332 of title 5, United States Code, including traveltime, and, while such individual is away from his or her home or regular place of business, he or she may be allowed travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5, United States Code.
(d) Section 3648 of the Revised Statutes (31 U.S.C. 529) shall not apply to prepayments of rentals made by the Administration on safety deposit boxes used by the Administration for the safeguarding of instruments held as security for loans or for the safeguarding of other documents.
(e) (1) Subject to the requirements and conditions contained in this subsection, upon application by a small business concern which is the recipient of a loan made under this Act, the Administration may undertake the small business concern's obligation to make the required payments under such loan or may suspend such obligation if the loan was a direct loan made by the Administration. While such payments are being made by the Administration pursuant to the undertaking of such obligation or while such obligation is suspended, no such payment with respect to the loan may be required from the small business concern.
(2) The Administration may undertake or suspend for a period of not to exceed 5 years any small business concern's obligation under this subsection only if—
(A) without such undertaking or suspension of the obligation, the small business concern would, in the sole discretion of the Administration, become insolvent or remain insolvent;
(B) with the undertaking or suspension of the obligation, the small business concern would, in the sole discretion of the Administration, become or remain a viable small business entity; and
(C) the small business concern executes an agreement in writing satisfactory to the Administration as provided by paragraph (4).
(3) Notwithstanding the provisions of sections 7(a)(4)(C) and 7(i)(l) of this Act, the Administration may extend the maturity of any loan on which the Administration undertakes or suspends the obligation pursuant to this subsection for a corresponding period of time.
(4) (A) Prior to the undertaking or suspension by the Administration of any small business concern's obligation under this subsection, the Administration, consistent with the purposes sought to be achieved herein, shall require the small business concern to agree in writing to repay to it the aggregate amount of the payments which were required under the loan during the period for which such obligation was undertaken or suspended, either—
(i) by periodic payments not less in amount or less frequently falling due than those which were due under the loan during such period, or
(ii) pursuant to a repayment schedule agreed upon by the Administration and the small business concern, or
(iii) by a combination of the payments described in clause (i) and clause (ii).
(B) In addition to requiring the small business concern to execute the agreement described in subparagraph (A), the Administration shall, prior to the undertaking or suspension of the obligation, take such action, and require the small business concern to take such action as the Administration deems appropriate in the circumstances, including the provision of such security as the Administration deems necessary or appropriate to insure that the rights and interests of the lender (Small Business Administration or participant) will be safeguarded adequately during or after the period in which such obligation is so undertaken or suspended.
(5) The term "required payments" with respect to any loan means payments of principal and interest under the loan.
(f) (1) The guaranteed portion of any loan made pursuant this Act may be sold by the lender, and by any subsequent holder, consistent with regulations on such sales as the Administration shall establish, subject to the following limitations:
(A) prior to the Administration's approval of the sale, or upon any subsequent resale, of any loan guaranteed by the Administration, if the lender certifies that such loan has been properly closed and that the lender has substantially complied with the provisions of the guarantee agreement and the regulations of the Administration, the Administration shall review and approve only materials not previously approved;
(B) all fees due the Administration on a guaranteed loan shall have been paid in full prior to any sale; and
(C) each loan, except each loan made under section 7(a)(14), shall have been fully disbursed to the borrower prior to any sale.
(2) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement with the Administration, and shall continue to service the loan in a manner consistent with the terms and conditions of such agreement.
(3) The Administration shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary market operations, and for assessing the increase of small business access to capital at reasonable rates and terms as a result of secondary market operations. Beginning on March 31, 1997, the sale of the unguaranteed portion of any loan made under section 7(a) shall not be permitted until a final regulation that applies uniformly to both depository institutions and other lenders is promulgated by the Administration setting forth the terms and conditions under which such sales can be permitted, including maintenance of appropriate reserve requirements and other safeguards to protect the safety and soundness of the program.
(4) Nothing in this subsection or subsection (g) of this section shall be interpreted to impede or extinguish the right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made pursuant to section 7(a) of this Act, the guaranteed portion of which may be included in such trust or pool, or to impede or extinguish the rights of any party pursuant to section 7(a)(6)(C) or subsection (e) of this section.
(g) (1) The Administration is authorized to issue trust certificates representing ownership of all or a fractional part of the guaranteed portion of one or more loans which have been guaranteed by the Administration under this Act, or under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 660): Provided, That such trust certificates shall be based on and backed by a trust or pool approved by the Administration and composed solely of the entire guaranteed portion of such loans.
(2) The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the principal of and interest on trust certificates issued by the Administration or its agent for purposes of this subsection. Such guarantee shall be limited to the extent of principal and interest on the guaranteed portions of loans which compose the trust or pool. In the event that a loan in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan represents in the trust or pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Administration only through the date of payment on the guarantee. During the term of the trust certificate, it may be called for redemption due to prepayment or default of all loans constituting the pool.
(3) The full faith and credit of the
(4) (A) The Administration may collect a fee for any loan guarantee sold into the secondary market under subsection (f) in an amount equal to not more than 50 percent of the portion of the sale price that exceeds 110 percent of the outstanding principal amount of the portion of the loan guaranteed by the Administration. Any such fee imposed by the Administration shall be collected by the Administration or by the agent which carries out on behalf of the Administration the central registration functions required by subsection (h) of this section and shall be paid to the Administration and used solely to reduce the subsidy on loans guaranteed under section 7(a) of this Act: Provided, That such fee shall not be charged to the borrower whose loan is guaranteed: and Provided further, That nothing herein shall preclude any agent of the Administration from collecting a fee approved by the Administration for the functions described in subsection (h)(2).
(B) The Administration is authorized to impose and collect, either directly or through a fiscal and transfer agent, a reasonable penalty on late payments of the fee authorized under subparagraph (A) in an amount not to exceed 5 percent of such fee per month plus interest.
(C) The Administration may contract with an agent to carry out, on behalf of the Administration, the assessment and collection of the annual fee established under section 7(a)(23). The agent may receive, as compensation for services, any interest earned on the fee while in the control of the agent before the time at which the agent is contractually required to remit the fee to the Administration.
(5) (A) In the event the Administration pays a claim under a guarantee issued under this subsection, it shall be subrogated fully to the rights satisfied by such payment.
(B) No State or local law, and no Federal law, shall preclude or limit the exercise by the Administration of its ownership rights in the portions of loans constituting the trust or pool against which the trust certificates are issued.
(h) (1) Upon the adoption of final rules and regulations, the Administration shall—
(A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g) of this section;
(B) contract with an agent to carry out on behalf of the Administration the central registration functions of this section and the issuance of trust certificates to facilitate pooling. Such agent shall provide a fidelity bond or insurance in such amounts as the Administration determines to be necessary to fully protect the interest of the Government;
(C) prior to any sale, require the seller to disclose to a purchaser of the guaranteed portion of a loan guaranteed under this Act and to the purchaser of a trust certificate issued pursuant to subsection (g), information on terms, conditions, and yield of such instrument. As used in this paragraph, if the instrument being sold is a loan, the term "seller" does not include (A) an entity which made the loan or (B) any individual or entity which sells three or fewer guaranteed loans per year; and
(D) have the authority to regulate brokers and dealers in guaranteed loans and trust certificates sold pursuant to subsections (f) and (g) of this section.
(2) The agent described in paragraph (1)(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 such funds are in the control of the agent and before the time at which the agent is contractually required to transfer such funds to the Administration or to the holders of the trust certificates, as appropriate.
(3) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registration for trust certificates. The Administration may, with the consent of the Secretary of the Treasury, use the book-entry system of the Federal Reserve System.
§ 6. (a) All
moneys of the Administration not otherwise employed may be deposited with the
Treasury of the
(b) 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 such fund on account of employees engaged in carrying out functions financed by the revolving fund established by section 4(c) of this Act. The annual billings shall also include a statement of the fair portion of the cost of the administration of such fund, which shall be paid by the Administrator into the Treasury as miscellaneous receipts.
§ 7. (a) LOANS TO SMALL BUSINESS CONCERNS; ALLOWABLE PURPOSES; QUALIFIED BUSINESS; RESTRICTIONS AND LIMITATIONS.—The Administration is empowered to the extent and in such amounts as provided in advance in appropriation Acts to make loans for plant acquisition, construction, conversion, or expansion, including the acquisition of land, material, supplies, equipment, and working capital, and to make loans to any qualified small business concern, including those owned by qualified Indian tribes, for purposes of this Act. Such financings may be made either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however, to the following restrictions, limitations, and provisions:
(1) IN GENERAL.—
(A) CREDIT ELSEWHERE.—No financial assistance shall be extended pursuant to this subsection if the applicant can obtain credit elsewhere. No immediate participation may be purchased unless it is shown that a deferred participation is not available; and no direct financing may be made unless it is shown that a participation is not available.
(B) BACKGROUND CHECKS.—Prior to the approval of any loan made pursuant to this subsection, or section 503 of the Small Business Investment Act of 1958, the Administrator may verify the applicant’s criminal background, or lack thereof, through the best available means, including, if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation.
(2) LEVEL OF PARTICIPATION IN GUARANTEED LOANS.—
(A) IN GENERAL.—Except as provided in subparagraph (B), in an agreement to participate in a loan on a deferred basis under this subsection (including a loan made under the Preferred Lenders Program), such participation by the Administration shall be equal to—
(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.
(B) REDUCED PARTICIPATION UPON REQUEST.—
(i) IN GENERAL.—The guarantee percentage specified by subparagraph (A) for any loan under this subsection may be reduced upon the request of the participating lender.
(ii) PROHIBITION.—The Administration shall not use the guarantee percentage requested by a participating lender under clause (i) as a criterion for establishing priorities in approving loan guarantee requests under this subsection.
(C) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM.—
(i) IN GENERAL.—The maximum interest rate for a loan guaranteed under the Preferred Lenders Program shall not exceed the maximum interest rate, as determined by the Administration, applicable to other loans guaranteed under this subsection.
(ii) PREFERRED LENDERS PROGRAM DEFINED.—For purposes of this subparagraph, the term "Preferred Lenders Program" means any program established by the Administrator, as authorized under the proviso in section 5(b)(7), under which a written agreement between the lender and the Administration delegates to the lender—
(I) complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration; and
(II) complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take any actions creating an actual or apparent conflict of interest.
(D) PARTICIPATION UNDER EXPORT WORKING CAPITAL PROGRAM.—Notwithstanding subparagraph (A), in an agreement to participate in a loan on a deferred basis under the Export Working Capital Program established pursuant to paragraph (14)(A), such participation by the Administration shall not exceed 90 percent.
(3) No loan shall be made under this subsection—
(A) if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by this Act would exceed $1,500,000 (or if the gross loan amount would exceed $2,000,000), except as provided in subparagraph (B);
(B) if the total amount outstanding and committed (on a deferred basis) solely for the purposes provided in paragraph (16) to the borrower from the business loan and investment fund established by this Act would exceed $1,750,000, of which not more than $1,250,000 may be used for working capital, supplies or financings under section 7(a)(14) for export purposes; and
(C) if effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate basis if the amount would exceed $350,000.
(4) INTEREST RATES AND PREPAYMENT CHARGES.—
(A) INTEREST RATES.—Notwithstanding the provisions of the constitution of any State or the laws of any State limiting the rate or amount of interest which may be charged, taken, received, or reserved, the maximum legal rate of interest on any financing made on a deferred basis pursuant to this subsection shall not exceed a rate prescribed by the Administration, and the rate of interest for the Administration's share of any direct or immediate participation loan shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans and adjusted to the nearest one‑eighth of 1 per centum, and an additional amount as determined by the Administration, but not to exceed 1 per centum per annum: Provided, That for those loans to assist any public or private organization for the handicapped or to assist any handicapped individual as provided in paragraph (10) of this subsection, the interest rate shall be 3 per centum per annum.
(B) PAYMENT OF ACCRUED INTEREST.—
(i) IN GENERAL.—Any bank or other lending institution making a claim for payment on the guaranteed portion of a loan made under this subsection shall be paid the accrued interest due on the loan from the earliest date of default to the date of payment of the claim at a rate not to exceed the rate of interest on the loan on the date of default, minus one percent.
(ii) LOANS SOLD ON SECONDARY MARKET.—If a loan described in clause (i) is sold on the secondary market, the amount of interest paid to a bank or other lending institution described in that clause from the earliest date of default to the date of payment of the claim shall be no more than the agreed upon rate, minus one percent.
(iii) APPLICABILITY.—Clauses (i) and (ii) shall not apply to loans made on or after October 1, 2000.
(C) PREPAYMENT CHARGES.—
(i) IN GENERAL.—A borrower who prepays any loan guaranteed under this subsection shall remit to the Administration a subsidy recoupment fee calculated in accordance with clause (ii) if—
(I) the loan is for a term of not less than 15 years;
(II) the prepayment is voluntary;
(III) the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and
(IV) the prepayment is made within the first 3 years after disbursement of the loan proceeds.
(ii) SUBSIDY RECOUPMENT FEE.—The subsidy recoupment fee charged under clause (i) shall be—
(I) 5 percent of the amount of prepayment, if the borrower repays during the first year after disbursement;
(II) 3 percent of the amount of prepayment, if the borrower prepays during the second year after disbursement; and
(III) 1 percent of the amount of prepayment, if the borrower prepays during the third year after disbursement.
(5) No such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty-five years, except that such portion of a loan made for the purpose of acquiring real property or constructing, converting, or expanding facilities may have a maturity of twenty‑five years plus such additional period as is estimated may be required to complete such construction, conversion, or expansion.
(6) All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That—
(A) for loans to assist any public or private organization or to assist any handicapped individual as provided in paragraph (10) of this subsection any reasonable doubt shall be resolved in favor of the applicant;
(B) recognizing that greater risk may be associated with loans for energy measures as provided in paragraph (12) of this subsection, factors in determining "sound value" shall include, but not be limited to, quality of the product or service; technical qualifications of the applicant or his employees; sales projections; and the financial status of the business concern: Provided further, That such status need not be as sound as that required for general loans under this subsection; and
(C) [Repealed]
On that portion of the loan used to refinance existing indebtedness held by a bank or other lending institution, the Administration shall limit the amount of deferred participation to 80 per centum of the amount of the loan at the time of disbursement: Provided further, That any authority conferred by this subparagraph on the Administration shall be exercised solely by the Administration and shall not be delegated to other than Administration personnel.
(7) The Administration may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern.
(8) The Administration may make loans under this subsection to small business concerns owned and controlled by disabled veterans (as defined in section 4211(3) of title 38, United States Code).
(9) The Administration may provide loans under this subsection to finance residential or commercial construction or rehabilitation for sale: Provided, however, That such loans shall not be used primarily for the acquisition of land.
(10) The Administration may provide guaranteed loans under this subsection to assist any public or private organization for the handicapped or to assist any handicapped individual, including service-disabled veterans, in establishing, acquiring, or operating a small business concern.
(11) The Administration may provide loans under this subsection to any small business concern, or to any qualified person seeking to establish such a concern when it determines that such loan will further the policies established in section 2(c) of this Act, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low‑income individuals or owned by low‑income individuals.
(12) (A) The Administration may provide loans under this subsection to assist any small business concern, including start up, to enable such concern to design architecturally or engineer, manufacture, distribute, market, install, or service energy measures: Provided, however, That such loan proceeds shall not be used primarily for research and development.
(B) The Administration may provide deferred participation loans under this subsection to finance the planning, design, or installation of pollution control facilities for the purposes set forth in section 404 of the Small Business Investment Act of 1958. Notwithstanding the limitation expressed in paragraph (3) of this subsection, a loan made under this paragraph may not result in a total amount outstanding and committed to a borrower from the business loan and investment fund of more than $1,000,000.
(13) The Administration may provide financings under this subsection to State and local development companies for the purposes of, and subject to the restrictions in, title V of the Small Business Investment Act of 1958.
(14) (A) The Administration may provide extensions of credit, standby letters of credit, revolving lines of credit for export purposes and other financing to enable small business concerns, including small business export trading companies and small business export management companies, to develop foreign markets. A bank or participating lending institution may establish the rate of interest on extensions and revolving lines of credit as may be legal and reasonable.
(B) When considering loan or guarantee
applications, the Administration shall give weight to export‑related
benefits, including opening new markets for
(C) The Administration shall aggressively market its export financing program to small businesses.
(15) (A) The Administration may guarantee loans under this subsection to qualified employee trusts with respect to a small business concern for the purpose of purchasing stock of the concern under a plan approved by the Administrator which, when carried out, results in the qualified employee trust owning at least 51 per centum of the stock of the concern.
(B) The plan requiring the Administrator's approval under subparagraph (A) shall be submitted to the Administration by the trustee of such trust with its application for the guarantee. Such plan shall include an agreement with the Administrator which is binding on such trust and on the small business concern and which provides that—
(i) not later than the date the loan guaranteed under subparagraph (A) is repaid (or as soon thereafter as is consistent with the requirements of section 401(a) of the Internal Revenue Code of 1954), at least 51 per centum of the total stock of such concern shall be allocated to the accounts of at least 51 per centum of the employees of such concern who are entitled to share in such allocation,
(ii) there will be periodic reviews of the role in the management of such concern of employees to whose accounts stock is allocated, and
(iii) there will be adequate management to assure management expertise and continuity.
(C) In determining whether to guarantee any loan under this paragraph, the individual business experience or personal assets of employee‑owners shall not be used as criteria, except inasmuch as certain employee‑owners may assume managerial responsibilities, in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small business concern if such corporation would, after the plan described in subparagraph (B) is carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list of applications for assistance under this paragraph, indicating which applications were accepted and which were denied, and shall report periodically to the Congress on the status of employee‑owned firms assisted by the Administration.
(16) INTERNATIONAL TRADE.—
(A) IN GENERAL.—If the Administrator
determines that a loan guaranteed under this subsection will allow an eligible
small business concern that is engaged in or adversely affected by
international trade to improve its competitive position, the Administrator may
make such loan to assist such concern in—
(i) the financing
of the acquisition, construction, renovation, modernization, improvement, or
expansion of productive facilities or equipment to be used in the United States
in the production of goods and services involved in international trade; or
(ii) the refinancing of existing indebtedness
that is not structured with reasonable terms and conditions.
(B) SECURITY.—Each loan made under this
paragraph shall be secured by a first lien position or first mortgage on the
property or equipment financed by the loan or on other assets of the small
business concern.
(C) ENGAGED IN INTERNATIONAL TRADE.—For
purposes of this paragraph, a small business concern is engaged in
international trade if, as determined by the Administrator, the small business
concern is in a position to expand existing export markets or develop new
export markets.
(D) ADVERSELY AFFECTED BY INTERNATIONAL
TRADE.—For purposes of this paragraph, a small business concern is adversely
affected by international trade if, as determined by the Administrator, the
small business concern—
(i) is
confronting increased competition with foreign firms in the relevant market;
and
(ii) is injured by such competition.
(E) FINDINGS BY CERTAIN FEDERAL AGENCIES.—For purposes of subparagraph (D)(ii) the Administrator shall accept any finding of injury by the International Trade Commission or any finding of injury by the Secretary of Commerce pursuant to chapter 3 of title II of the Trade Act of 1974.
(17) The Administration shall authorize lending institutions and other entities in addition to banks to make loans authorized under this subsection.
(18) GUARANTEE FEES.—
(A) IN GENERAL.—With respect to each loan
guaranteed under this subsection (other than a loan that is repayable in 1 year
or less), the Administration shall collect a guarantee fee, which shall be
payable by the participating lender, and may be charged to the borrower, as
follows:
(i) A guarantee
fee not to exceed 2 percent of the deferred participation share of a total loan
amount that is not more than $150,000.
(ii) A guarantee fee not to exceed 3 percent
of the deferred participation share of a total loan amount that is more than
$150,000, but not more than $700,000.
(iii) A guarantee fee not to exceed 3.5 percent
of the deferred participation share of a total loan amount that is more than
$700,000.
(iv) In addition to the fee under clause (iii), a guarantee fee equal to 0.25 percent of any portion of the deferred participation share that is more than $1,000,000.
(B) RETENTION OF CERTAIN FEES.—Lenders participating in the programs established under this subsection may retain not more than 25 percent of a fee collected under subparagraph (A)(i).
(C) [Deleted.]
(19) (A) In addition to the Preferred Lenders Program authorized by the proviso in section 5(b)(7), the Administration is authorized to establish a Certified Lenders Program for lenders who establish their knowledge of Administration laws and regulations concerning the guaranteed loan program and their proficiency in program requirements. The designation of a lender as a certified lender shall be suspended or revoked at any time that the Administration determines that the lender is not adhering to its rules and regulations or that the loss experience of the lender is excessive as compared to other lenders, but such suspension or revocation shall not affect any outstanding guarantee.
(B) In order to encourage all lending institutions and other entities making loans authorized under this subsection to provide loans of $50,000 or less in guarantees to eligible small business loan applicants, the Administration shall develop and allow participating lenders to solely utilize a uniform and simplified loan form for such loans.
(C) Authority to liquidate loans.—
(i) IN GENERAL.—The Administrator may permit lenders participating in the Certified Lenders Program to liquidate loans made with a guarantee from the Administration pursuant to a liquidation plan approved by the Administrator.
(ii) Automatic approval.—If the Administrator does not approve or deny a request for approval of a liquidation plan within 10 business days of the date on which the request is made (or with respect to any routine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be approved.
(20) (A) The Administration is empowered to make loans either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis to small business concerns eligible for assistance under subsection (j)(10) and section 8(a). Such assistance may be provided only if the Administration determines that—
(i) the type and amount of such assistance requested by such concern is not otherwise available on reasonable terms from other sources;
(ii) with such assistance such concern has a reasonable prospect for operating soundly and profitably within a reasonable period of time;
(iii) the proceeds of such assistance will be used within a reasonable time for plant construction, conversion, or expansion, including the acquisition of equipment, facilities, machinery, supplies, or material or to supply such concern with working capital to be used in the manufacture of articles, equipment, supplies, or material for defense or civilian production or as may be necessary to insure a well‑balanced national economy; and
(iv) such assistance is of such sound value as reasonably to assure that the terms under which it is provided will not be breached by the small business concern.
(B) (i) No loan shall be made under this paragraph if the total amount outstanding and committed (by participation or otherwise) to the borrower would exceed $750,000.
(ii) Subject to the provisions of clause (i), in agreements to participate in loans on a deferred (guaranteed) basis, participation by the Administration shall be not less than 85 per centum of the balance of the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a deferred (guaranteed) basis shall be legal and reasonable.
(iv) Financings made pursuant to this paragraph shall be subject to the following limitations:
(I) No immediate participation may be purchased unless it is shown that a deferred participation is not available.
(II) No direct financing may be made unless it is shown that a participation is unavailable.
(C) A direct loan or the Administration's share of an immediate participation loan made pursuant to this paragraph shall be any secured debt instrument—
(i) that is subordinated by its terms to all other borrowings of the issuer;
(ii) the rate of interest on which shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loan and adjusted to the nearest one‑eighth of 1 per centum;
(iii) the term of which is not more than twenty‑five years; and
(iv) the principal on which amortized at such rate as may be deemed appropriate by the Administration, and the interest on which is payable not less often than annually.
(21) (A) The Administration may make loans on a guaranteed basis under the authority of this subsection—
(i) to a small business concern that has been (or can reasonably be expected to be) detrimentally affected by—
(I) the closure (or substantial reduction) of a Department of Defense installation; or
(II) the termination (or substantial reduction) of a Department of Defense program on which such small business was a prime contractor or subcontractor (or supplier) at any tier; or
(ii) to a qualified individual or a veteran seeking to establish (or acquire) and operate a small business concern.
(B) Recognizing that greater risk may be associated with a loan to a small business concern described in subparagraph (A)(i), any reasonable doubts concerning the firm's proposed business plan for transition to nondefense-related markets shall be resolved in favor of the loan applicant when making any determination regarding the sound value of the proposed loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in such amounts as provided in advance in appropriation Acts for the purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual is—
(i) a member of the Armed Forces of the
(ii) an employee of a prime contractor, subcontractor, or supplier at any tier of a Department of Defense program whose employment is involuntarily terminated (or voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due to the termination (or substantial reduction) of a Department of Defense program.
(E) JOB CREATION AND COMMUNITY BENEFIT.—In providing assistance under this paragraph, the Administration shall develop procedures to ensure, to the maximum extent practicable, that such assistance is used for projects that—
(i) have the greatest potential for—
(I) creating new jobs for individuals whose employment is involuntarily terminated due to reductions in Federal defense expenditures; or
(II) preventing the loss of jobs by employees of small business concerns described in subparagraph (A)(i); and
(ii) have substantial potential for stimulating new economic activity in communities most affected by reductions in Federal defense expenditures.
(22) The Administration is authorized to permit participating lenders to impose and collect a reasonable penalty fee on late payments of loans guaranteed under this subsection in an amount not to exceed 5 percent of the monthly loan payment per month plus interest.
(23) YEARLY FEE.—
(A) IN GENERAL.—With respect to each loan approved under this subsection, the Administration shall assess, collect, and retain a fee, not to exceed 0.55 percent per year of the outstanding balance of the deferred participation share of the loan, in an amount established once annually by the Administration in the Administration’s annual budget request to Congress, as necessary to reduce to zero the cost to the Administration of making guarantees under this subsection. As used in this paragraph, the term “cost” has the meaning given that term in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a).
(B) PAYER.—The yearly fee assessed under subparagraph (A) shall be payable by the participating lender and shall not be charged to the borrower.
(C) LOWERING OF BORROWER FEES.—If the
Administration determines that fees paid by lenders and by small business
borrowers for guarantees under this subsection may be reduced, consistent with
reducing to zero the cost to the Administration of making such guarantees—
(i) the
Administration shall first consider reducing fees paid by small business
borrowers under clauses (i) through (iii) of
paragraph (18)(A), to the maximum extent possible; and
(ii) fees paid by small business borrowers shall not be increased above the levels in effect on the date of enactment of this subparagraph.
(24) NOTIFICATION REQUIREMENT.—The Administration shall notify the Committees on Small Business of the Senate and the House of Representatives not later than 15 days before making any significant policy or administrative change affecting the operation of the loan program under this subsection.
(25) LIMITATION ON CONDUCTING PILOT PROJECTS.—
(A) IN GENERAL.—Not more than 10 percent of the total number of loans guaranteed in any fiscal year under this subsection may be awarded as part of a pilot program which is commenced by the Administrator on or after October 1, 1996.
(B) PILOT PROGRAM DEFINED.—In this paragraph, the term "pilot program" means any lending program initiative, project, innovation, or other activity not specifically authorized by law.
(C) LOW DOCUMENTATION LOAN PROGRAM.—The Administrator may carry out the low documentation loan program for loans of $100,000 or less only through lenders with significant experience in making small business loans. Not later than 90 days after the date of enactment of this subsection, the Administrator shall promulgate regulations defining the experience necessary for participation as a lender in the low documentation loan program.
(26) CALCULATION OF SUBSIDY RATE.—All fees, interest, and profits received and retained by the Administration under this subsection shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing loans under this Act.
(27) Repealed.
(28) LEASING.—In addition to such other lease arrangements as may be authorized by the Administration, a borrower may permanently lease to one or more tenants not more than 20 percent of any property constructed with the proceeds of a loan guaranteed under this subsection, if the borrower permanently occupies and uses not less than 60 percent of the total business space in the property.
(29) REAL ESTATE APPRAISALS.—With respect to a loan under this subsection that is secured by commercial real property, an appraisal of such property by a State licensed or certified appraiser—
(A) shall be required by the Administration in connection with any such loan for more than $250,000; or
(B) may be required by the Administration or the lender in connection with any such loan for $250,000 or less, if such appraisal is necessary for appropriate evaluation of creditworthiness.
(30) OWNERSHIP REQUIREMENTS.—Ownership requirements to determine the eligibility of a small business concern that applies for assistance under any credit program under this Act shall be determined without regard to any ownership interest of a spouse arising solely from the application of the community property laws of a State for purposes of determining marital interests.
(31) EXPRESS LOANS.
(A) DEFINITIONS.—As used in this paragraph:
(i) The term
“express lender” means any lender authorized by the Administration to
participate in the Express Loan Program.
(ii) The term “express loan” means any loan
made pursuant to this paragraph in which a lender utilizes to the maximum
extent practicable its own loan analyses, procedures, and documentation.
(iii) The term “Express Loan Program” means the
program for express loans established by the Administration under paragraph
(25)(B), as in existence on April 5, 2004, with a guaranty rate of not more
than 50 percent.
(B) RESTRICTION TO EXPRESS LENDER.—The
authority to make an express loan shall be limited to those lenders deemed
qualified to make such loans by the Administration. Designation as an express lender for purposes
of making an express loan shall not prohibit such lender from taking any other
action authorized by the Administration for that lender pursuant to this
subsection.
(C) GRANDFATHERING OF EXISTING LENDERS.—Any
express lender shall retain such designation unless the Administration
determines that the express lender has violated the law or regulations
promulgated by the Administration or modifies the requirements to be an express
lender and the lender no longer satisfies those requirements.
(D) MAXIMUM LOAN AMOUNT.—The maximum loan
amount under the Express Loan Program is $350,000.
(E) OPTION TO PARTICIPATE.—Except as otherwise provided in this paragraph, the Administration shall take no regulatory, policy, or administrative action, without regard to whether such action requires notification pursuant to paragraph (24), that has the effect of requiring a lender to make an express loan pursuant to subparagraph (D).
(b) Except as to agricultural enterprises as defined in section 18(b)(1) of this Act, the Administration also is empowered to the extent and in such amounts as provided in advance in appropriation Acts—
(1) (A) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis as the Administration may determine to be necessary or appropriate to repair, rehabilitate or replace property, real or personal, damaged or destroyed by or as a result of natural or other disasters,: Provided, That such damage or destruction is not compensated for by insurance or otherwise: And provided further, That the Administration may increase the amount of the loan by up to an additional 20 per centum if it determines such increase to be necessary or appropriate in order to protect the damaged or destroyed property from possible future disasters by taking mitigating measures, including, but not limited to, construction of retaining walls and sea walls, grading and contouring land, relocating utilities and modifying structures;
(B) to refinance any mortgage or other lien against a totally destroyed or substantially damaged home or business concern: Provided, That no loan or guarantee shall be extended unless the Administration finds that (i) the applicant is not able to obtain credit elsewhere; (ii) such property is to be repaired, rehabilitated, or replaced; (iii) the amount refinanced shall not exceed the amount of physical loss sustained; and (iv) such amount shall be reduced to the extent such mortgage or lien is satisfied by insurance or otherwise; and
(C) during fiscal years 2000 through 2004, to establish a predisaster mitigation program to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis), as the Administrator may determine to be necessary or appropriate, to enable small businesses to use mitigation techniques in support of a formal mitigation program established by the Federal Emergency Management Agency, except that no loan or guarantee may be extended to a small business under this subparagraph unless the Administration finds that the small business is otherwise unable to obtain credit for the purposes described in this subparagraph;
(2) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis as the Administration may determine to be necessary or appropriate to any small business concern or small agricultural cooperative located in an area affected by a disaster, if the Administration determines that the concern or the cooperative has suffered a substantial economic injury as a result of such disaster and if such disaster constitutes—
(A) a major disaster, as determined by the President under the Disaster Relief and Emergency Assistance Act; or
(B) a natural disaster, as determined by the Secretary of Agriculture pursuant to the Consolidated Farmers Home Administration Act of 1961 (7 U.S.C. 1961); or
(C) a disaster, as determined by the Administrator of the Small Business Administration; or
(D) if no disaster declaration has been issued pursuant to subparagraph (A), (B), or (C), the Governor of a State in which a disaster has occurred may certify to the Small Business Administration that small business concerns or small agricultural cooperatives (1) have suffered economic injury as a result of such disaster, and (2) are in need of financial assistance which is not available on reasonable terms in the disaster stricken area. Upon receipt of such certification, the Administration may then make such loans as would have been available under this paragraph if a disaster declaration had been issued.
Provided, That no loan or guarantee shall be extended pursuant to this paragraph (2) unless the Administration finds that the applicant is not able to obtain credit elsewhere.
(3) (A) In this paragraph—
(i) the term “essential employee” means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern;
(ii) the term “period of military conflict” has the meaning given the term in subsection (n)(1); and
(iii) the term “substantial economic injury” means an economic harm to a business concern that results in the inability of the business concern—
(I) to meet its obligations as they mature;
(II) to pay its ordinary and necessary operating expenses; or
(III) to market, produce, or provide a product or service ordinarily marketed, produced, or provided by the business concern.
(B) The Administration may make such disaster loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) to assist a small business concern that has suffered or that is likely to suffer substantial economic injury as the result of an essential employee of such small business concern being ordered to active military duty during a period of military conflict.
(C) A small business concern described in subparagraph (B) shall be eligible to apply for assistance under this paragraph during the period beginning on the date on which the essential employee is ordered to active duty and ending on the date that is 90 days after the date on which such essential employee is discharged or released from active duty.
(D) Any loan or guarantee extended pursuant to this paragraph shall be made at the same interest rate as economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis, if the total amount outstanding and committed to the borrower under this subsection would exceed $1,500,000, unless such applicant constitutes a major source of employment in its surrounding area, as determined by the Administration, in which case the Administration, in its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph, no declaration of a disaster area shall be required.
[THE FOLLOWING PARAGRAPHS PRECEDING SUBSECTION 7(c)
APPLY TO THE ENTIRE SUBSECTION 7(b).]
No
loan under this subsection, including renewals and extensions thereof, may be
made for a period or periods exceeding thirty years: Provided, That the Administrator may
consent to a suspension in the payment of principal and interest charges on,
and to an extension in the maturity of, the Federal share of any loan under
this subsection for a period not to exceed five years, if (A) the borrower
under such loan is a homeowner or a small business concern, (B) the loan was
made to enable (i) such homeowner to repair or replace his home, or (ii) such
concern to repair or replace plant or equipment which was damaged or destroyed
as the result of a disaster meeting the requirements of clause (A) or (B) of paragraph (2) of this
subsection, and (C) the Administrator determines such action is necessary to
avoid severe financial hardship: Provided further, That the provisions of paragraph (1) of
subsection (c) of this section shall not be applicable to any such loan having
a maturity in excess of twenty years.
Notwithstanding the provisions of any other law, the interest rate on
the Administration's share of any loan made under subsection (b), except as
provided in subsection (c), shall not exceed the average annual interest rate
on all interest‑bearing obligations of the United States then forming a
part of the public debt as computed at the end of the fiscal year next
preceding the date of the loan and adjusted to the nearest one‑eighth of
1 per centum plus one‑quarter of 1 per centum: Provided, however, That the interest
rate for loans made under paragraphs (1) and (2) hereof shall not exceed the
rate of interest which is in effect at the time of the occurrence of the
disaster. In agreements to participate
in loans on a deferred basis under this subsection, such participation by the
Administration shall not be in excess of 90 per centum of the balance of the
loan outstanding at the time of disbursement. Notwithstanding any other
provision of law, the interest rate on the Administration's share of any loan
made pursuant to paragraph (1) of this subsection to repair or replace a
primary residence and/or replace or repair damaged or destroyed personal
property, less the amount of compensation by insurance or otherwise, with respect
to a disaster occurring on or after July 1, 1976, and prior to October 1, 1978,
shall be: 1 per centum on the amount of
such loan not exceeding $10,000, and 3 per centum on the amount of such loan
over $10,000 but not exceeding $40,000. The interest rate on the
Administration's share of the first $250,000 of all other loans made pursuant
to paragraph (1) of this subsection, with respect to a disaster occurring on or
after
In the administration of the disaster loan program under paragraphs (1), (2), and (4) of this subsection, in the case of property loss or damage or injury resulting from a major disaster as determined by the President or a disaster as determined by the Administrator which occurs on or after January 1, 1971, and prior to July 1, 1973, the Small Business Administration, to the extent such loss or damage or injury is not compensated for by insurance or otherwise—
(A) may make any loan for repair,
rehabilitation, or replacement of property damaged or destroyed without regard
to whether the required financial assistance is otherwise available from
private sources;
(B) may, in the case of the total destruction
or substantial property damage of a home or business concern, refinance any
mortgage or other liens outstanding against the destroyed or damaged property
if such property is to be repaired, rehabilitated, or replaced, except that (1)
in the case of a business concern, the amount refinanced shall not exceed the
amount of the physical loss sustained, and (2) in the case of a home, the
amount of each monthly payment of principal and interest on the loan after
refinancing under this clause shall be not less than the amount of each such
payment made prior to such refinancing;
(C) may, in the case of a loan made under
clause (A) or a mortgage or other lien
refinanced under clause (B) in connection with the destruction of, or
substantial damage to, property owned and used as a residence by an individual
who by reason of retirement, disability, or other similar circumstances relies
for support on survivor, disability, or retirement benefits under a pension,
insurance, or other program, consent to the suspension of the payments of the
principal of that loan, mortgage, or lien during the lifetime of that
individual and his spouse for so long as the Administration determines that
making such payments would constitute a substantial hardship;
(D) shall, notwithstanding the provisions of any other law and upon presentation by the applicant of proof of loss or damage or injury and a bona fide estimate of cost of repair, rehabilitation, or replacement, cancel the principal of any loan made to cover a loss or damage or injury resulting from such disaster, except that—
(i) with
respect to a loan made in connection with a disaster occurring on or after
January 1, 1971, but prior to January 1, 1972, the total amount so canceled
shall not exceed $2,500, and the interest on the balance of the loan shall be
at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in
connection with a disaster occurring on or after January 1, 1972, but prior to
July 1, 1973, the total amount so canceled shall not exceed $5,000, and the
interest on the balance of the loan shall be at a rate of 1 per centum per
annum.
With respect to any loan referred to in clause (D) which is outstanding on the date of enactment of this paragraph, the Administrator shall—
(i) make such
change in the interest rate on the balance of such loan as is required under
that clause effective as of such date of enactment; and
(ii) in applying the limitation set forth in
that clause with respect to the total amount of such loan which may be
canceled, consider as part of the amount so canceled any part of such loan which
was previously canceled pursuant to section 231 of the Disaster Relief Act of
1970.
Whoever wrongfully
misapplies the proceeds of a loan obtained under this subsection shall be
civilly liable to the Administrator in an amount equal to one‑and‑one‑half
times the original principal amount of the loan.
(E) A State grant made on or prior to July 1,
1979, shall not be considered compensation for the purpose of applying the
provisions
of section 312(a) of the Disaster Relief and Emergency Assistance Act to a
disaster loan under paragraph (1), (2), or (4) of this subsection.
(c) (1) The
Administration may further extend the maturity of or renew any loan made
pursuant to this section, or any loan transferred to the Administration
pursuant to Reorganization Plan Numbered 2 of 1954, or Reorganization Plan
Numbered 1 of 1957, for additional periods not to exceed ten years beyond the
period stated therein, if such extension or renewal will aid in the orderly
liquidation of such loan.
(2) During any period in which principal and
interest charges are suspended on the Federal share of any loan, as provided in
subsection (b), the Administrator shall, upon the request of any person, firm,
or corporation having a participation in such loan, purchase such participation,
or assume the obligation of the borrower, for the balance of such period, to
make principal and interest payments on the non‑Federal share of such
loan: Provided, That no such payments shall be made by the Administrator
in behalf of any borrower unless (i) the
Administrator determines that such action is necessary in order to avoid a
default, and (ii) the borrower agrees to make payments to the Administration in
an aggregate amount equal to the amount paid in its behalf by the
Administrator, in such manner and at such times (during or after the term of
the loan) as the Administrator shall determine having due regard to the
purposes sought to be achieved by this paragraph.
(3) With respect to a disaster occurring on or after October 1, 1978, and prior to the effective date of this Act, on the Administration's share of loans made pursuant to paragraph (1) of subsection (b)—
(C) if the loan proceeds are to repair or
replace property damaged or destroyed and if the applicant is a business
concern which is able to obtain sufficient credit elsewhere, the interest rate
shall not exceed the current average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
comparable
to the average maturities of such loans and adjusted to the nearest one‑eighth
of 1 percent, and an additional amount as determined by the Administration, but
not to exceed 1 percent: Provided,
That three years after such loan is fully disbursed and every two years
thereafter for the term of the loan, if the Administration determines that the
borrower is able to obtain a loan from non‑Federal sources at reasonable
rates and terms for loans of similar purposes and periods of time, the borrower
shall, upon request by the Administration, apply for and accept such a
loan in sufficient amount to repay the Administration: Provided further,
That no loan under subsection (b)(1) shall be made, either directly or in
cooperation with banks or other lending institutions through agreements to
participate on an immediate or deferred basis, if the total amount outstanding
and committed to the borrower under such subsection would exceed $500,000 for
each disaster, unless an applicant constitutes a major source of employment in
an area suffering a disaster, in which case the Administration, in its
discretion, may waive the $500,000 limitation.
(4) Notwithstanding the provisions of any other law, the interest rate on the Federal share of any loan made under subsection (b) shall be—
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by the Administration but not more
than one‑half the rate determined by the Secretary of the Treasury taking
into consideration the current average market yield on outstanding marketable obligations
of the United States with remaining periods to maturity comparable to the
average maturities of such loans plus an additional charge of not to exceed 1
per centum per annum as determined by the Administrator, and adjusted to the
nearest one‑eighth of 1 per centum but not to exceed 8 per centum per
annum;
(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the Administration but not more than
the rate determined by the Secretary of the Treasury taking into consideration
the current average market yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average
maturities of such loans plus an additional charge of not to exceed 1 per
centum per annum as determined by the Administrator, and adjusted to the
nearest one‑eighth of 1 per centum;
(C) in the case of a business concern unable
to obtain credit elsewhere, not to exceed 8 per centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by the Administration but not in
excess of the rate prevailing in private market for similar loans and not more
than the rate prescribed by the Administration as the maximum interest rate for
deferred participation (guaranteed) loans under section 7(a) of this Act. Loans under this subparagraph shall be
limited to a maximum term of three years.
(5) Notwithstanding the provisions of any other law, the interest rate on the Federal share of any loan made under subsection (b)(1) and (b)(2) on account of a disaster commencing on or after October 1, 1982, shall be—
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by the Administration but not more
than one‑half the rate determined by the Secretary of the Treasury taking
into consideration the current average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity comparable
to the average maturities of such loan plus an additional charge of not to
exceed 1 per centum per annum as determined by the Administrator, and adjusted
to the nearest one‑eighth of 1 per centum, but not to exceed 4 per centum
per annum;
(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the Administration but not more than
the rate determined by the Secretary of the Treasury taking into consideration
the current average market yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average
maturities of such loans plus an additional charge of not to exceed 1 per
centum per annum as determined by the Administrator; and adjusted to the
nearest one‑eighth of 1 per centum, but not to exceed 8 per centum per annum;
(C) in the case of a business or other
concern, including agricultural cooperatives, unable to obtain credit
elsewhere, not to exceed 4 per centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by the Administration but not in
excess of the lowest of (i) the rate prevailing in
the private market for similar loans, (ii) the rate prescribed by the
Administration as the maximum interest rate for deferred participation
(guaranteed) loans under section 7(a) of this Act, or (iii) 8 per centum per
annum. Loans under this subparagraph
shall be limited to a maximum term of three years.
(6) Notwithstanding the provisions of any
other law, such loans, subject to the reductions required by subparagraphs (A)
and (B) of paragraph 7(b)(1), shall be in amounts equal to 100 per centum of
loss. The interest rates for loans made
under paragraphs 7(b)(1) and (2), as determined pursuant to paragraph (5),
shall be the rate of interest which is in effect on the date of the disaster
commenced: Provided, That no loan
under paragraphs 7(b)(1) and (2) shall be made, either directly or in
cooperation with banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis, if the total amount
outstanding and committed to the borrower under subsection 7(b) would exceed
$500,000 for each disaster unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which case the Administration,
in its discretion, may waive the $500,000 limitation. Employees of concerns sharing a common
business premises shall be aggregated in determining "major source of
employment" status for nonprofit applicants owning such premises. Provided
further, That the Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall not reduce the amount of
eligibility for any homeowner on account of loss of real estate to less than
$100,000 for each disaster nor for any homeowner or lessee on account of loss
of personal property to less than $20,000 for each disaster, such sums being in
addition to any eligible refinancing: Provided
further, That the Administration
shall not require collateral for loans of $10,000 or less which are made under
paragraph (1) of subsection (b).
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a disaster
commencing on or after October 1, 1982, the Administrator shall make such
change in the interest rate on the balance of such loan as is required herein
effective as of the date of enactment.
(7) The Administration shall not withhold
disaster assistance pursuant to this paragraph to nurseries who are victims of
drought disasters. As used in section
7(b)(2) the term "an area affected by a disaster" includes any
county, or county contiguous thereto, determined to be a disaster by the
President, the Secretary of Agriculture or the Administrator of the Small
Business Administration.
(d) The Administration shall not fund any
Small Business Development Center or any variation thereof, except as
authorized in section 21 of this Act.
(e) [RESERVED].
(f) [RESERVED].
(g) [Repealed].
(h) (1) The Administration also is empowered, where other financial assistance is not available on reasonable terms, to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate—
(A) to assist any public or private organization—
(i) which is
organized under the laws of the United States or of any State, operated in the
interest of handicapped individuals, the net income of which does not inure in
whole or in part to the benefit of any shareholder or other individual;
(ii) which complies with any applicable
occupational health and safety standard prescribed by the Secretary of Labor;
and
(iii) which, in the production of commodities
and in the provision of services during any fiscal year in which it receives
financial assistance under this subsection, employs handicapped individuals for
not less than 75 per centum of the man‑hours required for the production
or provision of the commodities or services; or
(B) to assist any handicapped individual in
establishing, acquiring, or operating a small business concern.
(2) The Administration's share of any loan
made under this subsection shall not exceed $350,000, nor may any such loan be
made if the total amount outstanding and committed (by participation or
otherwise) to the borrower from the business loan and investment fund
established by section 4(c)(1)(B) of this Act would exceed $350,000. In agreements to participate in loans on a
deferred basis under this subsection, the Administration's participation may
total 100 per centum of the balance of the loan at the time of
disbursement. The Administration's share
of any loan made under this subsection shall bear interest at the rate of 3 per
centum per annum. The maximum term of
any such loan, including extensions and renewals thereof, may not exceed
fifteen years. All loans made under this
subsection shall be of such sound value or so secured as reasonably to assure
repayment: Provided, however,
That any reasonable doubt shall be resolved in favor of the applicant.
(3) For purposes of this subsection, the
term "handicapped individual" means a person who has a physical,
mental, or emotional impairment, defect, ailment, disease, or disability of a
permanent nature which in any way limits the selection of any type of
employment for which the person would otherwise be qualified or qualifiable.
(i) (1) The Administration also is empowered to make, participate (on an immediate basis) in, or guarantee loans, repayable in not more than fifteen years, to any small business concern, or to any qualified person seeking to establish such a concern, when it determines that such loans will further the policies established in section 2(b) of this Act, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low‑income individuals, or owned by low‑income individuals: Provided, however, That no such loans shall be made, participated in, or guaranteed if the total of such Federal assistance to a single borrower outstanding at any one time would exceed $100,000. The Administration may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern. The Administration may, in its discretion, as a condition of such financial assistance, require that the borrower take steps to improve his management skills by participating in a management training program approved by the Administration: Provided, however, That any management training program so approved must be of sufficient scope and duration to provide reasonable opportunity for the individuals served to develop entrepreneurial and managerial self‑sufficiency.
(2) The Administration shall encourage, as
far as possible, the participation of the private business community in the
program of assistance to such concerns, and shall seek to stimulate new private
lending activities to such concerns through the use of the loan guarantees,
participations in loans, and pooling arrangements authorized by this
subsection.
(3) To insure an equitable distribution
between urban and rural areas for loans between $3,500 and $100,000 made under
this subsection the Administration is authorized to use the agencies and
agreements and delegations developed under title III of the Economic
Opportunity Act of 1964, as amended, as it shall determine necessary.
(4) The Administration shall provide for the
continuing evaluation of programs under this subsection, including full
information on the location, income characteristics, and types of businesses
and individuals assisted, and on new private lending activity stimulated, and
the results of such evaluation together with recommendations shall be included
in the report required by section 10(a) of this Act.
(5) Loans made pursuant to this subsection (including immediate participation in and guarantees of such loans) shall have such terms and conditions as the Administration shall determine, subject to the following limitations—
(A) there is reasonable assurance of
repayment of the loan;
(B) the financial assistance is not otherwise
available on reasonable terms from private sources or other Federal, State, or
local programs;
(C) the amount of the loan, together with
other funds available, is adequate to assure completion of the project or
achievement of the purposes for which the loan is made;
(D) the loan bears interest at a rate not
less than (i) a rate determined by the Secretary of
the Treasury, taking into consideration the average market yield on outstanding
Treasury obligations of comparable maturity, plus (ii) such additional charge,
if any, toward covering other costs of the program as the Administration may
determine to be consistent with its purposes:
Provided, however, That the rate of interest charged on loans
made in redevelopment areas designated under the Public Works and Economic
Development Act of 1965 (42 U.S.C. 3108 et seq.) shall not exceed the rate
currently applicable to new loans made under section 201 of that Act (42 U.S.C.
3141); and
(E) fees not in excess of amounts necessary
to cover administrative expenses and probable losses may be required on loan
guarantees.
(6) The Administration shall take such steps
as may be necessary to insure that, in any fiscal year, at least 50 per centum
of the amounts loaned or guaranteed pursuant to this subsection are allotted to
small business concerns located in urban areas identified by the Administration
as having high concentrations of unemployed or low‑income individuals or
to small business concerns owned by low‑income individuals. The Administration shall define the meaning of
low‑income as it applies to owners of small business concerns eligible to
be assisted under this subsection.
(7) No financial assistance shall be
extended pursuant to this subsection where the Administration determines that
the assistance will be used in relocating establishments from one area to
another if such relocation would result in an increase in unemployment in the
area of original location.
(j) (1) The
Administration shall provide financial assistance to public or private
organizations to pay all or part of the cost of projects designed to provide
technical or management assistance to individuals or enterprises eligible for
assistance under sections 7(i), 7(j)(10), and 8(a) of
this Act, with special attention to small businesses located in areas of high
concentration of unemployed or low‑income individuals, to small
businesses eligible to receive contracts pursuant to section 8(a) of this Act.
(2) Financial assistance under this subsection may be provided for projects, including, but not limited to—
(A) planning and research, including
feasibility studies and market research;
(B) the identification and development of new
business opportunities;
(C) The furnishing of centralized services
with regard to public services and Federal Government programs including
programs authorized under sections 7(i), 7(j)(10),
and 8(a) of this Act;
(D) the establishment and strengthening of
business service agencies, including trade associations and cooperatives; and
(E) the furnishing of business counseling,
management training, and legal and other related services, with special
emphasis on the development of management training programs using the resources
of the business community, including the development of management training
opportunities in existing business, and with emphasis in all cases upon
providing management training of sufficient scope and duration to develop
entrepreneurial and managerial self‑sufficiency on the part of the individuals
served.
(3) The Administration shall encourage the
placement of subcontracts by businesses with small business concerns located in
areas of high concentration of unemployed or low‑income individuals, and
with small businesses eligible to receive contracts pursuant to section 8(a) of
this Act. The Administration may provide
incentives and assistance to such businesses that will aid in the training and
upgrading of potential subcontractors or other small business concerns eligible
for assistance under sections 7(i), 7(j), and 8(a) of
this Act.
(A) [Repealed].
(B) [Repealed].
(4) The Administration shall give preference
to projects which promote the ownership, participation in ownership, or
management of small businesses owned by low‑income individuals and small
businesses eligible to receive contracts pursuant to section 8(a) of this Act.
(5) The financial assistance authorized for
projects under this subsection includes assistance advanced by grant,
agreement, or contract.
(6) The Administration is authorized to make
payments under grants and contracts entered into under this subsection in lump
sum or installments, and in advance or by way of reimbursement, and in the case
of grants, with necessary adjustments on account of overpayments or
underpayments.
(7) To the extent feasible, services under
this subsection shall be provided in a location which is easily accessible to
the individuals and small business concerns served.
(8) [Repealed].
(9) The Administration shall take such steps
as may be necessary and appropriate, in coordination and cooperation with the
heads of other Federal departments and agencies, to insure that contracts,
subcontracts, and deposits made by the Federal Government or with programs
aided with Federal funds are placed in such way as to further the purposes of
sections 7(i), 7(j), and 8(a) of this Act.
(10) There is established within the Administration a small business and capital ownership development program (hereinafter referred to as the "Program") which shall provide assistance exclusively for small business concerns eligible to receive contracts pursuant to section 8(a) of this Act. The program, and all other services and activities authorized under section 7(j) and 8(a) of this Act, shall be managed by the Associate Administrator for Minority Small Business and Capital Ownership Development under the supervision of, and responsible to, the Administrator.
(A) The program shall—
(i) assist small business concerns participating in the Program (either through public or private organizations) to develop and maintain comprehensive business plans which set forth the Program Participant's specific business targets, objectives, and goals developed and maintained in conformity with subparagraph (D).
(ii) provide for such other nonfinancial services as deemed necessary for the establishment, preservation, and growth of small business concerns participating in the Program, including but not limited to (I) loan packaging, (II) financial counseling, (III) accounting and bookkeeping assistance, (IV) marketing assistance, and (V) management assistance;
(iii) assist small business concerns participating in the Program to obtain equity and debt financing;
(iv) establish regular performance monitoring and reporting systems for small business concerns participating in the Program to assure compliance with their business plans;
(v) analyze and report the causes of success and failure of small business concerns participating in Program; and
(vi) provide assistance necessary to help small business concerns participating in the Program to procure surety bonds, with such assistance including, but not limited to (I) the preparation of application forms required to receive a surety bond, (II) special management and technical assistance designed to meet the specific needs of small business concerns participating in the Program and which have received or are applying to receive a surety bond, and (III) preparation of all forms necessary to receive a surety bond guarantee from the Administration pursuant to title IV, part B of the Small Business Investment Act of l958.
(B) Small business concerns eligible to receive contracts pursuant to section 8(a) of this Act shall participate in the Program.
(C) (i) A small business concern participating in any program or activity conducted under the authority of this paragraph or eligible for the award of contracts pursuant to section 8(a) on September 1, 1988, shall be permitted continued participation and eligibility in such program or activity for a period of time which is the greater of—
(I) 9 years less the number of years since the award of its first contract pursuant to section 8(a); or
(II) its original fixed program participation term (plus any extension thereof) assigned prior to the effective date of this paragraph plus eighteen months.
(ii) Nothing contained in this subparagraph shall be deemed to prevent the Administration from instituting a termination or graduation pursuant to subparagraph (F) or (H) for issues unrelated to the expiration of any time period limitation.
(D) (i) Promptly after certification under paragraph (11) a Program Participant shall submit a business plan (hereinafter referred to as the "plan") as described in clause (ii) of this subparagraph for review by the Business Opportunity Specialist assigned to assist such Program Participant. The plan may be a revision of a preliminary business plan submitted by the Program Participant or required by the Administration as a part of the application for certification under this section and shall be designed to result in the Program Participant eliminating the conditions or circumstances upon which the Administration determined eligibility pursuant to section 8(a)(6). Such plan, and subsequent modifications submitted under clause (iii) of this subparagraph, shall be approved by the business opportunity specialist prior to the Program Participant being eligible for award of a contract pursuant to section 8(a).
(ii) The plans submitted under this subparagraph shall include the following:
(I) An analysis of market potential, competitive environment, and other business analyses estimating the Program Participant's prospects for profitable operations during the term of program participation and after graduation.
(II) An analysis of the Program Participant's strengths and weaknesses with particular attention to correcting any financial, managerial, technical, or personnel conditions which are likely to impede the small business concern from receiving contracts other than those awarded under section 8(a).
(III) Specific targets, objectives, and goals, for the business development of the Program Participant during the next and succeeding years utilizing the results of the analyses conducted pursuant to subclauses (I) and (II).
(IV) A transition management plan outlining specific steps to assure profitable business operations after graduation (to be incorporated into the Program Participant's plan during the first year of the transitional stage of Program participation.
(V) Estimates of contract awards pursuant to section 8(a) and from other sources, which the Program Participant will require to meet the specific targets, objectives, and goals for the years covered by its plan. The estimates established shall be consistent with the provisions of subparagraph (I) and section 8(a).
(iii) Each Program Participant shall annually review its currently approved plan with its Business Opportunity Specialist and modify such plan as may be appropriate. Any modified plan shall be submitted to the Administration for approval. The currently approved plan shall be considered valid until such time as a modified plan is approved by the Business Opportunity Specialist. Annual reviews pertaining to years in the transitional stage of program participation shall require, as appropriate, a written verification that such Program Participant has complied with the requirements of subparagraph (I) relating to attaining business activity from sources other that contracts awarded pursuant to section 8(a).
(iv) Each Program Participant shall annually forecast its needs for contract awards under section 8(a) for the next program year and the succeeding program year during the review of its business plan, conducted pursuant to clause (iii). Such forecast shall be known as the section 8(a) contract support level and shall be included in the Program Participant's business plan. Such forecast shall include—
(I) the aggregate dollar value of contract support to be sought on a noncompetitive basis under section 8(a), reflecting compliance with the requirements of subparagraph (I) relating to attaining business activity from sources other than contracts awarded pursuant to section 8(a),
(II) the types of contract opportunities being sought, identified by Standard Industrial Classification (SIC) Code or otherwise,
(III) an estimate of the dollar value of contract support to be sought on a competitive basis, and
(IV) such other information as may be requested by the Business Opportunity Specialist to provide effective business development assistance to the Program Participant.
(E) A small business concern participating in the program conducted under the authority of this paragraph and eligible for the award of contracts pursuant to section 8(a) shall be denied all such assistance if such concern—
(i) voluntarily elects not to continue participation;
(ii) completes the period of Program participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination proceeding conducted in accordance with section 8(a)(9); or
(iv) is graduated pursuant to a graduation proceeding conducted in accordance with section 8(a)(9).
(F) For purposes of this section and section 8(a), the term "terminated" and the term "termination" means the total denial or suspension of assistance under this paragraph or under section 8(a) prior to the graduation of the participating small business concern or prior to the expiration of the maximum program participation term. An action for termination shall be based upon good cause, including—
(i) the failure by such concern to maintain its eligibility for Program participation;
(ii) the failure of the concern to engage in business practices that will promote its competitiveness within a reasonable period of time as evidenced by, among other indicators, a pattern of unjustified delinquent performance or terminations for default with respect to contracts awarded under the authority of section 8(a);
(iii) a demonstrated pattern of failing to make required submissions or responses to the Administration in a timely manner;
(iv) the willful violation of any rule or regulation of the Administration pertaining to material issues;
(v) the debarment of the concern or its disadvantaged owners by any agency pursuant to subpart 9.4 of title 48, Code of Federal Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged owner or an officer of the concern for any offense indicating a lack of business integrity including any conviction for embezzlement, theft, forgery, bribery, falsification or violation of section 16. For purposes of this clause, no termination action shall be taken with respect to a disadvantaged owner solely because of the conviction of an officer of the concern (who is other than a disadvantaged owner) unless such owner conspired with, abetted, or otherwise knowingly acquiesced in the activity or omission that was the basis of such officer's conviction.
(G) The Director of the Division may initiate a termination proceeding by recommending such action to the Associate Administrator for Minority Small Business and Capital Ownership Development. Whenever the Associate Administrator, or a designee of such officer, determines such termination is appropriate, within 15 days after making such a determination the Program Participant shall be provided a written notice of intent to terminate, specifying the reasons for such action. No Program Participant shall be terminated from the Program pursuant to subparagraph (F) without first being afforded an opportunity for a hearing in accordance with section 8(a)(9).
(H) For the purposes of sections 7(j) and 8(a) the term "graduated" or "graduation" means that the Program Participant is recognized as successfully completing the program by substantially achieving the targets, objectives, and goals contained in the concern's business plan thereby demonstrating its ability to compete in the marketplace without assistance under this section or section 8(a).
(I) (i) During the developmental stage of its participation in the Program, a Program Participant shall take all reasonable efforts within its control to attain the targets contained in its business plan for contracts awarded other than pursuant to section 8(a) (hereinafter referred to as "business activity targets."). Such efforts shall be made a part of the business plan and shall be sufficient in scope and duration to satisfy the Administration that the Program Participant will engage [sic] a reasonable marketing strategy that will maximize its potential to achieve its business activity targets.
(ii) During the transitional stage of the Program a Program Participant shall be subject to regulations regarding business activity targets that are promulgated by the Administration pursuant to clause (iii).
(iii) The regulations referred to in clause (ii) shall:
(I) establish business activity targets applicable to Program Participants during the fifth year and each succeeding year of Program Participation; such targets, for such period of time, shall reflect a reasonably consistent increase in contracts awarded other than pursuant to section 8(a), expressed as a percentage of total sales; when promulgating business activity targets the Administration may establish modified targets for Program Participants that have participated in the Program for a period of longer than four years on the effective date of this subparagraph;
(II) require a Program Participant to attain its business activity targets;
(III) provide that, before the receipt of any contract to be awarded pursuant to section 8(a), the Program Participant (if it is in the transitional stage) must certify that it has complied with the regulations promulgated pursuant to subclause (II), or that it is in compliance with such remedial measures as may have been ordered pursuant to regulations issued under subclause (V);
(IV) require the Administration to review each Program Participant's performance regarding attainment of business activity targets during periodic reviews of such Participant's business plan; and
(V) authorize the Administration to take appropriate remedial measures with respect to a Program Participant that has failed to attain a required business activity target for the purpose of reducing such Participant's dependence on contracts awarded pursuant to section 8(a); such remedial actions may include, but are not limited to assisting the Program Participant to expand the dollar volume of its competitive business activity or limiting the dollar volume of contracts awarded to the Program Participant pursuant to section 8(a); except for actions that would constitute a termination, remedial measures taken pursuant to this subclause shall not be reviewable pursuant to section 8(a)(9).
(J) (i) The Administration shall conduct an evaluation of a Program Participant's eligibility for continued participation in the Program whenever it receives specific and credible information alleging that such Program Participant no longer meets the requirements for Program eligibility. Upon making a finding that a Program Participant is no longer eligible, the Administration shall initiate a termination proceeding in accordance with subparagraph (F). A Program Participant's eligibility for award of any contract under the authority of section 8(a) may be suspended pursuant to subpart 9.4 of title 48, Code of Federal Regulations (or any successor regulation).
(ii) (I) Except as authorized by subclause (II) or (III), no award shall be made pursuant to section 8(a) to other than a small business concern.
(II) In determining the size of a small business concern owned by a socially and economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), each firm's size shall be independently determined without regard to its affiliation with the tribe, any entity of the tribal government, or any other business enterprise owned by the tribe, unless the Administrator determines that one or more such tribally owned business concerns have obtained, or are likely to obtain, a substantial unfair competitive advantage within an industry category.
(III) Any joint venture established under the authority of section 602(b) of Public Law 100‑656, the "Business Opportunity Development Reform Act of 1988", shall be eligible for award of a contract pursuant to section 8(a).
(11) (A) The Associate Administrator for Minority Small Business and Capital Ownership Development shall be responsible for coordinating and formulating policies relating to Federal Assistance to small business concerns eligible for assistance under section 7(i) of this Act and small business concerns eligible to receive contracts pursuant to section 8(a) of this Act.
(B) (i) Except as provided in clause (iii), no individual who was determined pursuant to section 8(a) to be socially and economically disadvantaged before the effective date of this subparagraph shall be permitted to assert such disadvantage with respect to any other concern making application for certification after such effective date.
(ii) Except as provided in clause (iii), any individual upon whom eligibility is based pursuant to section 8(a)(4) shall be permitted to assert such eligibility for only one small business concern.
(iii) A socially and economically disadvantaged Indian tribe may own more than one small business concern eligible for assistance pursuant to section 7(j)(10) and section 8(a) if—
(I) the Indian tribe does not own another firm in the same industry which has been determined to be eligible to receive contracts under this program, and
(II) the individuals responsible for the management and daily operations of the concern do not manage more than two Program Participants.
(C) No concern, previously eligible for the award of contracts pursuant to section 8(a), shall be subsequently recertified for program participation if its prior participation in the program was concluded for any of the reasons described in paragraph (10)(E).
(D) A concern eligible for the award of contracts pursuant to this subsection shall remain eligible for such contracts if there is a transfer of ownership and control (as defined pursuant to section 8(a)(4)) to individuals who are determined to be socially and economically disadvantaged pursuant to section 8(a). In the event of such a transfer, the concern, if not terminated or graduated, shall be eligible for a period of continued participation in the program not to exceed the time limitations prescribed in paragraph (15).
(E) There is established a Division of Program Certification and Eligibility (hereinafter referred to in this paragraph as the "Division") that shall be made part of the Office of Minority Small Business and Capital Ownership Development. The Division shall be headed by a Director who shall report directly to the Associate Administrator for Minority Small Business and Capital Ownership Development. The Division shall establish field offices within such regional offices of the Administration as may be necessary to perform efficiently its functions and responsibilities.
(F) Subject to the provisions of section 8(a)(9), the functions and responsibility of the Division are to—
(i) receive, review and evaluate applications for certification pursuant to paragraphs (4), (5), (6) and (7) of section 8(a);
(ii) advise each program applicant within 15 days after the receipt of an application as to whether such application is complete and suitable for evaluation and, if not, what matters must be rectified;
(iii) render recommendations on such applications to the Associate Administrator for Minority Small Business and Capital Ownership Development;
(iv) review and evaluate financial statements and other submissions from concerns participating in the program established by paragraph (10) to ascertain continued eligibility to receive subcontracts pursuant to section 8(a);
(v) make a request for the initiation of termination or graduation proceedings, as appropriate, to the Associate Administrator for Minority Small Business and Capital Ownership Development;
(vi) make recommendations to the Associate Administrator for Minority Small Business and Capital Ownership Development concerning protests from applicants that have been denied program admission;
(vii) decide protests regarding the status of a concern as a disadvantaged concern for purposes of any program or activity conducted under the authority of subsection (d) of section 8, or any other provision of Federal law that references such subsection for a definition of program eligibility; and
(viii) implement such policy directives as may be issued by the Associate Administrator for Minority Small Business and Capital Ownership Development pursuant to subparagraph (I) regarding, among other things, the geographic distribution of concerns to be admitted to the program and the industrial make‑up of such concerns.
(G) An applicant shall not be denied admission into the program established by paragraph (10) due solely to a determination by the Division that specific contract opportunities are unavailable to assist in the development of such concern unless—
(i) the Government has not previously procured and is unlikely to procure the types of products or services offered by the concern; or
(ii) the purchases of such products or services by the Federal Government will not be in quantities sufficient to support the developmental needs of the applicant and other Program Participants providing the same or similar items or services.
(H) Not later than 90 days after receipt of a completed application for Program certification, the Associate Administrator for Minority Small Business and Capital Ownership Development shall certify a small business concern as a Program Participant or shall deny such application.
(I) Thirty days before the conclusion of each fiscal year, the Director of the Division shall review all concerns that have been admitted into the Program during the preceding 12‑month period. The review shall ascertain the number of entrants, their geographic distribution and industrial classification. The Director shall also estimate the expected growth of the Program during the next fiscal year and the number of additional Business Opportunity Specialists, if any, that will be needed to meet the anticipated demand for the Program. The findings and conclusions of the Director shall be reported to the Associate Administrator for Minority Small Business and Capital Ownership Development by September 30 of each year. Based on such report and such additional data as may be relevant, the Associate Administrator shall, by October 31 of each year, issue policy and program directives applicable to such fiscal year that—
(i) establish priorities for the solicitation of program applications from underrepresented regions and industry categories;
(ii) assign staffing levels and allocate other program resources as necessary to meet program needs; and
(iii) establish priorities in the processing and admission of new Program Participants as may be necessary to achieve an equitable geographic distribution of concerns and a distribution of concerns across all industry categories in proportions needed to increase significantly contract awards to small business concerns owned and controlled by socially and economically disadvantaged individuals. When considering such increase the Administration shall give due consideration to those industrial categories where Federal purchases have been substantial but where the participation rate of such concerns has been limited.
(12) (A) The Administration shall segment the Capital Ownership Development Program into two stages: a developmental stage; and a transitional stage.
(B) The developmental stage of program participation shall be designed to assist the concern in its effort to overcome its economic disadvantage by providing such assistance as may be necessary and appropriate to access its markets and to strengthen its financial and managerial skills.
(C) The transitional stage of program participation shall be designed to overcome, insofar as practicable, the remaining elements of economic disadvantage and to prepare such concern for graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be qualified to receive the following assistance during the stages of program participation specified in paragraph 12:
(A) Contract support pursuant to section 8(a).
(B) Financial assistance pursuant to section 7(a)(20).
(C) A maximum of two exemptions from the requirements of section 1(a) of the Act entitled "An Act providing conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes", approved June 30, 1936 (49 Stat. 2036), which exemptions shall apply only to contracts awarded pursuant to section 8(a) and shall only be used to allow for contingent agreements by a small business concern to acquire the machinery, equipment, facilities, or labor needed to perform such contracts. No exemption shall be made pursuant to this subparagraph if the contract to which it pertains has an anticipated value in excess of $10,000,000. This subparagraph shall cease to be effective on October 1, 1992.
(D) A maximum of five exemptions from the requirements of the Act entitled "An Act requiring contracts for the construction, alteration and repair of any public building or public work of the United States to be accompanied by a performance bond protecting the United States and by an additional bond for the protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public works", approved August 24, 1935 (49 Stat. 793), which exemptions shall apply only to contracts awarded pursuant to section 8(a), except that, such exemptions may be granted under this subparagraph only if—
(i) the Administration finds that such concern is unable to obtain the requisite bond or bonds from a surety and that no surety is willing to issue a bond subject to the guarantee provision of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 692 et seq.);
(ii) the Administration and the agency providing the contracting opportunity have provided for the protection of persons furnishing materials or labor to the Program Participant by arranging for the direct disbursement of funds due to such persons by the procuring agency or through any bank the deposits of which are insured by the Federal Deposit Insurance Corporation; and
(iii) the contract to which it pertains does not exceed $3,000,000 in amount. This subparagraph shall cease to be effective on October 1, 1994.
(E) Financial assistance whereby the Administration may purchase in whole or in part, and on behalf of such concerns, skills training or upgrading for employees or potential employees of such concerns. Such assistance may be made without regard to section 18(a). Assistance may be made by direct payment to the training provider or by reimbursing the Program Participant or the Participant's employee, if such reimbursement is found to be reasonable and appropriate. For purposes of this subparagraph the term "training provider" shall mean an institution of higher education, a community or vocational college, or an institution eligible to provide skills training or upgrading under the Job Training Partnership Act or title I of the Workforce Investment Act of 1998. The Administration shall, in consultation with the Secretary of Labor, promulgate rules and regulations to implement this subparagraph that establish acceptable training and upgrading performance standards and provide for such monitoring or audit requirements as may be necessary to ensure the integrity of the training effort. No financial assistance shall be granted under the subparagraph unless the Administrator determines that—
(i) such concern has documented that it has first explored the use of existing cost‑free or cost‑subsidized training programs offered by public and private sector agencies working with programs of employment and training and economic development;
(ii) no more than five employees or potential employees of such concern are recipients of any benefits under this subparagraph at any one time;
(iii) no more than $2,500 shall be made available for any one employee or potential employee;
(iv) the length of training or upgrading financed by this subparagraph shall be no less than one month nor more than six months;
(v) such concern has given adequate assurance it will employ the trainee or upgraded employee for at least six months after the training or upgrading financed by this subparagraph has been completed and each trainee or upgraded employee has provided a similar assurance to remain within the employ of such concern for such period; if such concern, trainee, or upgraded employee breaches this agreement, the Administration shall be entitled to and shall make diligent efforts to obtain from the violating party the repayment of all funds expended on behalf of the violating party, such repayment shall be made to the Administration together with such interest and costs of collection as may be reasonable; the violating party shall be barred from receiving any further assistance under this subparagraph;
(vi) the training to be financed may take place either at such concern's facilities or at those of the training provider; and
(vii) such concern will maintain such records as the Administration deems appropriate to ensure that the provisions of this paragraph and any other applicable law have not been violated.
(F) The transfer of technology or surplus
property owned by the
(G) Training assistance whereby the Administration shall conduct training sessions to assist individuals and enterprises eligible to receive contracts under section 8(a) in the development of business principles and strategies to enhance their ability to successfully compete for contracts in the marketplace.
(H) Joint ventures, leader‑follow arrangements, and teaming agreements between the Program Participant and other Program Participants and other business concerns with respect to contracting opportunities for the research, development, full‑scale engineering or production of major systems. Such activities shall be undertaken on the basis of programs developed by the agency responsible for the procurement of the major system, with the assistance of the Administration.
(I) Transitional management business planning training and technical assistance.
(J) Program Participants in the developmental stage of Program participation shall be eligible for the assistance provided by subparagraphs (A), (B), (C), (D), (E), (F), and (G).
(14) Program Participants in the transitional stage of Program participation shall be eligible for the assistance provided by subparagraphs (A), (B), (F), (G), (H), and (I) of paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small business concern may receive developmental assistance under the Program and contracts under section 8(a) for a total period of not longer than nine years, measured from the date of its certification under the authority of such section, of which—
(A) no more than four years may be spent in the developmental stage of Program Participation; and
(B) no more than five years may be spent in the transitional stage of Program Participation.
(16) (A) The Administrator shall develop and implement a process for the systematic collection of data on the operations of the Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator shall submit a report to the Congress on the Program that shall include the following:
(i) The average personal net worth of individuals who own and control concerns that were initially certified for participation in the Program during the immediately preceding fiscal year. The Administrator shall also indicate the dollar distribution of net worths, at $50,000 increments, of all such individuals found to be socially and economically disadvantaged. For the first report required pursuant to this paragraph the Administrator shall also provide the data specified in the preceding sentence for all eligible individuals in the Program as of the effective date of this paragraph.
(ii) A description and estimate of the benefits and costs that have accrued to the economy and the Government in the immediately preceding fiscal year due to the operations of those business concerns that were performing contracts awarded pursuant to section 8(a).
(iii) A compilation and evaluation of those business concerns that have exited the Program during the immediately preceding three fiscal years. Such compilation and evaluation shall detail the number of concerns actively engaged in business operations, those that have ceased or substantially curtailed such operations, including the reasons for such actions, and those concerns that have been acquired by other firms or organizations owned and controlled by other than socially and economically disadvantaged individuals. For those businesses that have continued operations after they exited from the Program, the Administrator shall also separately detail the benefits and costs that have accrued to the economy during the immediately preceding fiscal year due to the operations of such concerns.
(iv) A listing of all participants in the Program during the preceding fiscal year identifying, by State and by Region, for each firm: the name of the concern, the race or ethnicity, and gender of the disadvantaged owners, the dollar value of all contracts received in the preceding year, the dollar amount of advance payments received by each concern pursuant to contracts awarded under section 8(a), and a description including (if appropriate) an estimate of the dollar value of all benefits received pursuant to paragraphs (13) and (14) and section 7(a)(20) during such year.
(v) The total dollar value of contracts and options awarded during the preceding fiscal year pursuant to section 8(a) and such amount expressed as a percentage of total sales of (I) all firms participating in the Program during such year; and (II) of firms in each of the nine years of program participation.
(vi) A description of such additional resources or program authorities as may be required to provide the types of services needed over the next two‑year period to service the expected portfolio of firms certified pursuant to section 8(a).
(vii) The total dollar value of contracts and options awarded pursuant to section 8(a), at such dollar increments as the Administrator deems appropriate, for each four digit standard industrial classification code under which such contracts and options were classified.
(C) The first report required by subparagraph (B) shall pertain to fiscal year 1990.
(k) In carrying out its functions under subsections 7(i), 7(j) and 8(a) of this Act, the Administration is authorized—
(1) to utilize, with their consent, the services and facilities of Federal agencies without reimbursement, and, with the consent of any State or political subdivision of a State, accept and utilize the services and facilities of such State or subdivision without reimbursement;
(2) to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this Act, any money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise;
(3) to accept voluntary and uncompensated services, notwithstanding the provisions of section 3679(b) of the Revised Statutes (31 U.S.C. 665(b)); and
(4) to employ experts and consultants or organizations thereof as authorized by section 15 of the Administrative Expenses Act of 1946 (5 U.S.C. 55a), except that no individual may be employed under the authority of this subsection for more than one hundred days in any fiscal year; to compensate individuals so employed at rates not in excess of the daily equivalent of the highest rate payable under section 5332 of title 5, United States Code, including traveltime; and to allow them, while away from their homes or regular places of business, travel expenses (including per diem in lieu of subsistence) as authorized by section 5 of such Act (5 U.S.C. 73b‑2) for persons in the Government service employed intermittently, while so employed: Provided, however, that contracts for such employment may be renewed annually.
(l) [RESERVED].
(m) MICROLOAN PROGRAM
(1) (A) PURPOSES. The purposes of the Microloan Program are—
(i) to assist women, low-income, veteran (within the meaning of such term under section 3(q)), and minority entrepreneurs and business owners, and other such individuals possessing the capability to operate successful business concerns; and
(ii) to assist small business concerns in those areas suffering from a lack of credit due to economic downturns;
(iii) to establish a microloan program to be administered by the Small Business Administration--
(I) to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans, particularly loans in amounts averaging not more than $10,000, to startup, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment;
(II) to make grants to eligible intermediaries that, together with non-Federal matching funds, will enable such intermediaries to provide intensive marketing, management, and technical assistance to microloan borrowers;
(III) to make grants to eligible nonprofit entities that, together with non-Federal matching funds, will enable such entities to provide intensive marketing, management, and technical assistance to assist low-income entrepreneurs and other low-income individuals obtain private sector financing for their businesses, with or without loan guarantees; and
(IV) to report to the Committees on Small Business of the Senate and the House of Representatives on the effectiveness of the microloan program and the advisability and feasibility of implementing such a program; and
(iv) to establish a welfare-to-work microloan initiative, which shall be administered by the Administration, in order to test the feasibility of supplementing the technical assistance grants provided under clauses (ii) and (iii) of subparagraph (B) to individuals who are receiving assistance under the State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), or under any comparable State funded means tested program of assistance for low-income individuals, in order to adequately assist those individuals in—
(I) establishing small businesses; and
(II) eliminating their dependence on that assistance.
(B) ESTABLISHMENT. There is established a microloan program, under which the Administration may—
(i) make direct loans to eligible intermediaries, as provided under paragraph (3), for the purpose of making short-term, fixed interest rate microloans to startup, newly established, and growing small business concerns under paragraph (6);
(ii) in conjunction with such loans and subject to the requirements of paragraph (4), make grants to such intermediaries for the purpose of providing intensive marketing, management, and technical assistance to small business concerns that are borrowers under this subsection; and
(iii) subject to the requirements of paragraph (5), make grants to nonprofit entities for the purpose of providing marketing, management, and technical assistance to low-income individuals seeking to start or enlarge their own businesses, if such assistance includes working with the grant recipient to secure loans in amounts not to exceed $35,000 from private sector lending institutions, with or without a loan guarantee from the nonprofit entity.
(2) ELIGIBILITY FOR PARTICIPATION.—An intermediary shall be eligible to receive loans and grants under subparagraphs (B)(i) and (B)(ii) of paragraph (1) if it—
(A) meets the definition in paragraph (10); and
(B) has at least 1 year of experience making microloans to startup, newly established, or growing small business concerns and providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers.
(3) LOANS TO INTERMEDIARIES.—
(A) INTERMEDIARY APPLICATIONS.
(i) IN GENERAL.—As part of its application for a loan, each intermediary shall submit a description to the Administration of—
(I) the type of businesses to be assisted;
(II) the size and range of loans to be made;
(III) the geographic area to be served and its economic and unemployment characteristics;
(IV) the status of small business concerns in the area to be served and an analysis of their credit and technical assistance needs;
(V) any marketing, management, and technical assistance to be provided in connection with a loan made under this subsection;
(VI) the local economic credit markets, including the costs associated with obtaining credit locally;
(VII) the qualifications of the applicant to carry out the purpose of this subsection; and
(VIII) any plan to involve other technical assistance providers (such as counselors from the Service Corps of Retired Executives or small business development centers) or private sector lenders in assisting selected small business concerns.
(ii) SELECTION OF INTERMEDIARIES.—In selecting intermediaries to participate in the program established under this subsection, the Administration shall give priority to those applicants that provide loans in amounts averaging not more than $10,000.
(B) INTERMEDIARY CONTRIBUTION.—As a condition of any loan made to an intermediary under subparagraph (B)(i) of paragraph (1), the Administration shall require the intermediary to contribute not less than 15 percent of the loan amount in cash from non-Federal sources.
(C) LOAN LIMITS.—Notwithstanding subsection (a)(3), no loan shall be made under this subsection if the total amount outstanding and committed to one intermediary (excluding outstanding grants) from the business loan and investment fund established by this Act would, as a result of such loan, exceed $750,000 in the first year of such intermediary's participation in the program, and $3,500,000 in the remaining years of the intermediary's participation in the program.
(D) (i) IN GENERAL.—The Administrator shall, by regulation, require each intermediary to establish a loan loss reserve fund, and to maintain such reserve fund until all obligations owed to the Administration under this subsection are repaid.
(ii) LEVEL OF LOAN LOSS RESERVE FUND.—
(I) IN GENERAL.—Subject to subclause (III), the Administrator shall require the loan loss reserve fund of an intermediary to be maintained at a level equal to 15 percent of the outstanding balance of the notes receivable owed to the intermediary.
(II) REVIEW OF LOAN LOSS RESERVE.—After the initial 5 years of an intermediary’s participation in the program authorized by this subsection, the Administrator shall, at the request of the intermediary, conduct a review of the annual loss rate of the intermediary. Any intermediary in operation under this subsection prior to October 1, 1994, that requests a reduction in its loan loss reserve shall be reviewed based on the most recent 5-year period preceding the request.
(III) REDUCTION OF LOAN LOSS RESERVE.—Subject to the requirements of clause IV, the Administrator may reduce the annual loan loss reserve requirement of an intermediary to reflect the actual average loan loss rate for the intermediary during the preceding 5-year period, except that in no case shall the loan loss reserve be reduced to less than 10 percent of the outstanding balance of the notes receivable owed to the intermediary.
(IV) REQUIREMENTS.—The Administrator may reduce the annual loan loss reserve requirement of an intermediary only if the intermediary demonstrates to the satisfaction of the Administrator that—
(aa) the average annual loss rate for the intermediary during the preceding 5-year period is less than 15 percent; and
(bb) that no other factors exist that may impair the ability of the intermediary to repay all obligations owed to the Administration under this subsection.
(E) UNAVAILABILITY OF COMPARABLE CREDIT.—An intermediary may make a loan under this subsection of more than $20,000 to a small business concern only if such small business concern demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good prospects for success. In no case shall an intermediary make a loan under this subsection of more than $35,000, or have outstanding or committed to any 1 borrower more than $35,000.
(F) LOAN DURATION; INTEREST RATES.—
(i) LOAN DURATION.—Loans made by the Administration under this subsection shall be for a term of 10 years.
(ii) APPLICABLE INTEREST RATES.—Except as provided in clause (iii), loans made by the Administration under this subsection to an intermediary shall bear an interest rate equal to 1.25 percentage points below the rate determined by the Secretary of the Treasury for obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of 1 percent.
(iii) RATES APPLICABLE TO CERTAIN SMALL LOANS.—Loans made by the Administration to an intermediary that makes loans to small business concerns and entrepreneurs averaging not more than $7,500, shall bear an interest rate that is 2 percentage points below the rate determined by the Secretary of the Treasury for obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of 1 percent.
(iv) RATES APPLICABLE TO MULTIPLE SITES OR OFFICES.—The interest rate prescribed in clause (ii) or (iii) shall apply to each separate loanmaking site or office of 1 intermediary only if such site or office meets the requirements of that clause.
(v) RATE BASIS.—The applicable rate of interest under this paragraph shall—
(I) be applied retroactively for the first year of an intermediary's participation in the program, based upon the actual lending practices of the intermediary as determined by the Administration prior to the end of such year; and
(II) be based in the second and subsequent years of an intermediary's participation in the program, based upon the actual lending practices of the intermediary during the term of the intermediary's participation in the program.
(vii)[sic] COVERED INTERMEDIARIES.—The interest rates prescribed in this subparagraph shall apply to all loans made to intermediaries under this subsection on or after October 28, 1991.
(G) DELAYED PAYMENTS.—The Administration shall not require repayment of interest or principal of a loan made to an intermediary under this subsection during the first year of the loan.
(H) FEES; COLLATERAL.—Except as provided in subparagraphs (B) and (D), the Administration shall not charge any fees or require collateral other than an assignment of the notes receivable of the microloans with respect to any loan made to an intermediary under this subsection.
(4) MARKETING, MANAGEMENT AND TECHNICAL ASSISTANCE GRANTS TO INTERMEDIARIES.—Grants made in accordance with subparagraph (B)(ii) of paragraph (1) shall be subject to the following requirements:
(A) GRANT AMOUNTS.—Except as otherwise provided in subparagraph (C) and subject to subparagraph (B), each intermediary that receives a loan under subparagraph (B)(i) of paragraph (1) shall be eligible to receive a grant to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection. Except as provided in subparagraph (C), each intermediary meeting the requirements of subparagraph (B) may receive a grant of not more than 25 percent of the total outstanding balance of loans made to it under this subsection.
(B) CONTRIBUTION.—As a condition of any grant made under subparagraph (A), except for a grant made to an intermediary that provides not less than 50 percent of its loans to small business concerns located in or owned by one or more residents of an economically distressed area, the Administration shall require the intermediary to contribute an amount equal to 25 percent of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under non-Federal programs.
(C) ADDITIONAL TECHNICAL ASSISTANCE GRANTS FOR MAKING CERTAIN LOANS.—
(i) IN GENERAL.—In addition to grants made under subparagraph (A), each intermediary shall be eligible to receive a grant equal to 5 percent of the total outstanding balance of loans made to the intermediary under this subsection if—
(I) the intermediary provides not less than 25 percent of its loans to small business concerns located in or owned by one or more residents of an economically distressed area; or
(II) the intermediary has a portfolio of loans made under this subsection that averages not more than $10,000 during the period of the intermediary's participation.
(ii) PURPOSES.—A grant awarded under clause (i) may be used to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection.
(iii) CONTRIBUTION EXCEPTION.—The contribution requirements in subparagraph (B) do not apply to grants made under this subparagraph.
(D) ELIGIBILITY FOR MULTIPLE SITES OR OFFICES.—The eligibility for a grant described in subparagraph (A) or (C) shall be determined separately for each loan-making site or office of 1 intermediary.
(E) ASSISTANCE TO CERTAIN SMALL BUSINESS CONCERNS.—
(i) IN GENERAL.—Each intermediary may expend an amount not to exceed 25 percent of the grant funds received under paragraph (1)(B)(ii) to provide information and technical assistance to small business concerns that are prospective borrowers under this subsection.
(ii) TECHNICAL ASSISTANCE.—An intermediary may expend not more than 25 percent of the funds received under paragraph (1)(B)(ii) to enter into third party contracts for the provision of technical assistance.
(F) SUPPLEMENTAL GRANT—
(i) IN GENERAL.—The Administration may accept any funds transferred to the Administration from other departments or agencies of the Federal Government to make grants in accordance with this subparagraph and section 202(b) of the Small Business Reauthorization Act of 1997 to participating intermediaries and technical assistance providers under paragraph (5), for use in accordance with clause (iii) to provide additional technical assistance and related services to recipients of assistance under a State program described in paragraph (1)(A)(iv) at the time they initially apply for assistance under this subparagraph.
(ii) ELIGIBLE RECIPIENTS; GRANT AMOUNTS.—In making grants under this subparagraph, the Administration may select, from among participating intermediaries and technical assistance providers described in clause (i), not more than 20 grantees in fiscal year 1998, not more than 25 grantees in fiscal year 1999, and not more than 30 grantees in fiscal year 2000, each of whom may receive a grant under this subparagraph in an amount not to exceed $200,000 per year.
(iii) USE OF GRANT AMOUNTS.—Grants under this subparagraph—
(I) are in addition to other grants provided under this subsection and shall not require the contribution of matching amounts as a condition of eligibility; and
(II) may be used by a grantee—
(aa) to pay or reimburse a portion of child care and transportation costs of recipients of assistance described in clause (i), to the extent such costs are not otherwise paid by State block grants under the Child Care Development Block Grant Act of 1990 (42 U.S.C. 9958 et seq.); and
(bb) for marketing, management, and technical assistance to recipients of assistance described in clause (i).
(iv) MEMORANDUM OF UNDERSTANDING.—Prior to accepting any transfer of funds under clause (i) from a department or agency of the Federal Government, the Administration shall enter into a Memorandum of Understanding with the department or agency, which shall—
(I) specify the terms and conditions of the grants under this subparagraph; and
(II) provide for appropriate monitoring of expenditures by each grantee under this subparagraph and each recipient of assistance described in clause (i) who receives assistance from a grantee under this subparagraph, in order to ensure compliance with this subparagraph by those grantees and recipients of assistance.
(5) PRIVATE SECTOR BORROWING TECHNICAL ASSISTANCE GRANTS. Grants made in accordance with subparagraph (B)(iii) of paragraph (1) shall be subject to the following requirements:
(A) GRANT AMOUNTS. Subject to the requirements of subparagraph (B), the Administration may make not more than 55 grants annually, each in amounts not to exceed $200,000 for the purposes specified in subparagraph (B)(iii) of paragraph (1).
(B) CONTRIBUTION. As a condition of any grant made under subparagraph (A), the Administration shall require the grant recipient to contribute an amount equal to 20 percent of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under non-Federal programs.
(6) LOANS TO SMALL BUSINESS CONCERNS FROM ELIGIBLE INTERMEDIARIES.—
(A) IN GENERAL.—An eligible intermediary shall make short-term, fixed rate loans to startup, newly established, and growing small business concerns from the funds made available to it under subparagraph (B)(i) of paragraph (1) for working capital and the acquisition of materials, supplies, furniture, fixtures, and equipment.
(B) PORTFOLIO REQUIREMENT.—To the extent practicable, each intermediary that operates a microloan program under this subsection shall maintain a microloan portfolio with an average loan size of not more than $15,000.
(C) INTEREST LIMIT.—Notwithstanding any provision of the laws of any State or the constitution of any State pertaining to the rate or amount of interest that may be charged, taken, received or reserved on a loan, the maximum rate of interest to be charged on a microloan funded under this subsection shall not exceed the rate of interest applicable to a loan made to an intermediary by the Administration—
(i) in the case of a loan of more than $7,500 made by the intermediary to a small business concern or entrepreneur by more than 7.75 percentage points; and
(ii) in the case of a loan of not more than $7,500 made by the intermediary to a small business concern or entrepreneur by more than 8.5 percentage points.
(D) REVIEW RESTRICTION.—The Administration shall not review individual microloans made by intermediaries prior to approval.
(E) ESTABLISHMENT OF CHILD CARE OR TRANSPORTATION BUSINESS.—In addition to other eligible small businesses concerns [sic], borrowers under any program under this subsection may include individuals who will use the loan proceeds to establish for-profit or nonprofit child care establishments or business providing for-profit transportation services.
(7) PROGRAM FUNDING FOR MICROLOANS.—
(A) NUMBER OF PARTICIPANTS.—Under the program authorized by this subsection, the Administration may fund, on a competitive basis, not more than 300 intermediaries.
(B) ALLOCATION.—
(i) MINIMUM ALLOCATION.— Subject to the availability of appropriations, of the total amount of new loan funds made available for award under this subsection in each fiscal year, the Administration shall make available for award in each State (including the district of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa) an amount equal to the sum of—
(I) the lesser of—
(aa) $800,000; or
(bb) 1/55 of the total amount of new loan funds made available for award under this subsection for that fiscal year; and
(II) any additional amount, as determined by the Administration.
(ii) REDISTRIBUTION.—If, at the beginning of the third quarter of a fiscal year, the Administration determines that any portion of the amount made available to carry out this subsection is unlikely to be made available under clause (i) during that fiscal year, the Administration may make that portion available for award in any one or more States (including the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa) without regard to clause (i).
(8) EQUITABLE DISTRIBUTION OF INTERMEDIARIES.—In approving microloan program applicants and providing funding to intermediaries under this subsection, the Administration shall select and provide funding to such intermediaries as will ensure appropriate availability of loans for small businesses in all industries located throughout each State, particularly those located in urban and in rural areas.
(9) GRANTS FOR MANAGEMENT, MARKETING, TECHNICAL ASSISTANCE, AND RELATED SERVICES—
(A) IN GENERAL.—The Administration may procure technical assistance for intermediaries participating in the Microloan Program to ensure that such intermediaries have the knowledge, skills, and understanding of microlending practice necessary to operate successful microloan programs.
(B) ASSISTANCE AMOUNT.—The Administration shall transfer 7 percent of its annual appropriation for loans and loan guarantees under this subsection to the Administration's Salaries and Expense Account for the specific purpose of providing 1 or more technical assistance grants to experienced microlending organizations and national and regional nonprofit organizations that have demonstrated experience in providing training support for microenterprise development and financing to achieve the purpose set forth in subparagraph (A).
(C) WELFARE-TO-WORK.—Of amounts made available to carry out the welfare-to-work microloan initiative under paragraph (1)(A)(iv) in any fiscal year, the Administration may use not more than 5 percent to provide technical assistance, either directly or through contractors, to welfare-to-work microloan initiative grantees, to ensure that, as grantees they have the knowledge, skills, and understanding of microlending and welfare-to-work transition, and other related issues, to operate a successful welfare-to-work microloan initiative.
(10) REPORT TO CONGRESS. On November 1, 1995, the Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives a report, including the Administration's evaluation of the effectiveness of the first 3 1/2 years of the microloan program and the following:
(A) the numbers and locations of the intermediaries funded to conduct microloan programs;
(B) the amounts of each loan and each grant to intermediaries;
(C) a description of the matching contributions of each intermediary;
(D) the numbers and amounts of microloans made by the intermediaries to small business concern borrowers;
(E) the repayment history of each intermediary;
(F) a description of the loan portfolio of each intermediary including the extent to which it provides microloans to small business concerns in rural areas; and
(G) any recommendations for legislative changes that would improve program operations.
(11) DEFINITIONS. For purposes of this subsection—
(A) the term "intermediary" means
(i) a private, nonprofit entity;
(ii) a private nonprofit community development corporation;
(iii) a consortium of private, nonprofit organizations or nonprofit community development corporations;
(iv) a quasi-governmental economic development entity (such as a planning and development district), other than a State, county, municipal government, or any agency thereof, if--
(I) no application is received from an eligible nonprofit organization; or
(II) the Administration determines that the needs of a region or geographic area are not adequately served by an existing, eligible nonprofit organization that has submitted an application; or
(v) an agency of or nonprofit entity established by a Native American Tribal Government,
that seeks to borrow or has borrowed funds from the Small Business Administration to make microloans to small business concerns under this subsection;
(B) the term "microloan" means a short-term, fixed rate loan of not more than $35,000, made by an intermediary to a startup, newly established, or growing small business concern;
(C) the term "rural area" means any political subdivision or unincorporated area--
(i) in a nonmetropolitan county (as defined by the Secretary of Agriculture) or its equivalent thereof; or
(ii) in a metropolitan county or its equivalent that has a resident population of less than 20,000 if the Small Business Administration has determined such political subdivision or area to be rural; and
(D) the term "economically distressed area", as used in paragraph (4), means a county or equivalent division of local government of a State in which the small business concern is located, in which, according to the most recent data available from the Bureau of the Census, Department of Commerce, not less than 40 percent of residents have an annual income that is at or below the poverty level.
(12) DEFERRED PARTICIPATION LOAN PILOT.—In lieu of making direct loans to intermediaries as authorized in paragraph (1)(B), during fiscal years 1998 through 2000, the Administration may, on a pilot program basis, participate on a deferred basis of not less than 90 percent and not more than 100 percent on loans made to intermediaries by a for-profit or nonprofit entity or by alliances of such entities, subject to the following conditions:
(A) NUMBER OF LOANS.—In carrying out this paragraph, the Administration shall not participate in providing financing on a deferred basis to more than 10 intermediaries in urban areas or more than 10 intermediaries in rural areas.
(B) TERM OF LOANS.—The term of each loan shall be 10 years. During the first year of the loan, the intermediary shall not be required to repay any interest or principal. During the second through fifth years of the loan, the intermediary shall be required to pay interest only. During the sixth through tenth years of the loan, the intermediary shall be required to make interest payments and fully amortize the principal.
(C) INTEREST RATE.—The interest rate on each loan shall be the rate specified by paragraph (3)(F) for direct loans.
(13) EVALUATION OF WELFARE-TO-WORK MICROLOAN INITIATIVE.—On January 31, 1999, and annually thereafter, the Administration shall submit to the Committees on Small Business of the House of Representatives and the Senate a report on any monies distributed pursuant to paragraph (4)(F).
(n) REPAYMENT DEFERRED FOR ACTIVE DUTY RESERVISTS.—
(1) DEFINITIONS.—In this subsection:
(A) ELIGIBLE RESERVIST.—The term “eligible reservist” means a member of a reserve component of the Armed Forces ordered to active duty during a period of military conflict.
(B) ESSENTIAL EMPLOYEE.—The term “essential employee” means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern.
(C) PERIOD OF MILITARY CONFLICT.—The term “period of military conflict” means—
(i) a period of war declared by the Congress;
(ii) a period of national emergency declared by the Congress or by the President; or
(iii) a period of a contingency operation, as defined in section 101(a) of title 10, United States Code.
(D) QUALIFIED BORROWER.—The term “qualified borrower” means—
(i) an individual who is an eligible reservist and who received a direct loan under subsection (a) or (b) before being ordered to active duty; or
(ii) a small business concern that received a direct loan under subsection (a) or (b) before an eligible reservist, who is an essential employee, was ordered to active duty.
(2) DEFERRAL OF DIRECT LOANS.—
(A) IN GENERAL.—The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b), if such loan was incurred by a qualified borrower.
(B) PERIOD OF DEFERRAL.—The period of deferral for repayment under this paragraph shall begin on the date on which the eligible reservist is ordered to active duty and shall terminate on the date that is 180 days after the date such eligible reservist is discharged or released from active duty.
(C) INTEREST RATE REDUCTION DURING DEFERRAL.—Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on any loan qualifying for a deferral under this paragraph.
(3) DEFERRAL OF LOAN GUARANTEES AND OTHER FINANCINGS.—The Administration shall—
(A) encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan made with proceeds made available under that subsection, if such loan was incurred by a small business concern that is eligible to apply for assistance under subsection (b)(3); and
(B) not later than 30 days after the date of the enactment of this subsection, establish guidelines to—
(i) encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) and financings under section 504 of the Small Business Investment Act of 1958 that were incurred by small business concerns that are eligible to apply for assistance under subsection (b)(3), and loan guarantees provided under subsection (m) if the intermediary provides relief to a small business concern under this paragraph; and
(ii) implement a program to provide for the deferral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.
§ 8. (a) (1) It shall be the duty of the Administration and it is hereby empowered, whenever it determines such action is necessary or appropriate—
(A) to enter into contracts with the United States Government and any department, agency, or officer thereof having procurement powers obligating the Administration to furnish articles, equipment, supplies, services, or materials to the Government or to perform construction work for the Government. In any case in which the Administration certifies to any officer of the Government having procurement powers that the Administration is competent and responsible to perform any specific Government procurement contract to be let by any such officer, such officer shall be authorized in his discretion to let such procurement contract to the Administration upon such terms and conditions as may be agreed upon between the Administration and the procurement officer. Whenever the Administration and such procurement officer fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Administrator. Not later than 5 days from the date the Administration is notified of a procurement officer's adverse decision, the Administration may notify the contracting officer of the intent to appeal such adverse decision, and within 15 days of such date the Administrator shall file a written request for a reconsideration of the adverse decision with the Secretary of the department or agency head. For the purposes of this subparagraph, a procurement officer's adverse decision includes a decision not to make available for award pursuant to this subsection a particular procurement requirement or the failure to agree on the terms and conditions of a contract to be awarded noncompetitively under the authority of this subsection. Upon receipt of the notice of intent to appeal, the Secretary of the department or the agency head shall suspend further action regarding the procurement until a written decision on the Administrator's request for reconsideration has been issued by such Secretary or agency head, unless such officer makes a written determination that urgent and compelling circumstances which significantly affect interests of the United States will not permit waiting for a reconsideration of the adverse decision. If the Administrator's request for reconsideration is denied, the Secretary of the department or agency head shall specify the reasons why the selected firm was determined to be incapable to perform the procurement requirement, and the findings supporting such determination, which shall be made a part of the contract file for the requirement. A contract may not be awarded under this subsection if the award of the contract would result in a cost to the awarding agency which exceeds a fair market price;
(B) to arrange for the performance of such procurement contracts by negotiating or otherwise letting subcontracts to socially and economically disadvantaged small business concerns for construction work, services, or the manufacture, supply, assembly of such articles, equipment, supplies, materials, or parts thereof, or servicing or processing in connection therewith, or such management services as may be necessary to enable the Administration to perform such contracts;
(C) to make an award to a small business concern owned and controlled by socially and economically disadvantaged individuals which has completed its period of Program Participation as prescribed by section 7(j)(15), if—
(i) the contract will be awarded as a result of an offer (including price) submitted in response to a published solicitation relating to a competition conducted pursuant to subparagraph (D); and
(ii) the prospective contract awardee was a Program Participant eligible for award of the contract on the date specified for receipt of offers contained in the contract solicitation; and
(D) (i) A contract opportunity offered for award pursuant to this subsection shall be awarded on the basis of competition restricted to eligible Program Participants if—
(I) there is a reasonable expectation that at least two eligible Program Participants will submit offers and that award can be made at a fair market price, and
(II) the anticipated award price of the contract (including options) will exceed $5,000,000 in the case of a contract opportunity assigned a standard industrial classification code for manufacturing and $3,000,000 (including options) in the case of all other contract opportunities.
(ii) The Associate Administrator for Minority Small Business and Capital Ownership Development, on a nondelegable basis, is authorized to approve a request from an agency to award a contract opportunity under this subsection on the basis of a competition restricted to eligible Program Participants even if the anticipated award price is not expected to exceed the dollar amounts specified in clause (i)(II). Such approvals shall be granted only on a limited basis.
(2) Notwithstanding subsections (a) and (c) of the first section of the Act entitled "An Act requiring contracts for the construction, alteration, and repair of any public building or public work of the United States to be accompanied by a performance bond protecting the United States and by additional bond for the protection of persons furnishing material and labor for the construction, alteration, or repair of said public buildings or public works," approved August 24, 1935 (49 Stat. 793), no small business concern shall be required to provide any amount of any bond as a condition of receiving any subcontract under this subsection if the Administrator determines that such amount is inappropriate for such concern in performing such contract: Provided, That the Administrator shall exercise the authority granted by the paragraph only if—
(A) the Administration takes such measures as it deems appropriate for the protection of persons furnishing materials and labor to a small business receiving any benefit pursuant to this paragraph;
(B) the Administration assists, insofar as practicable, a small business receiving the benefits of this paragraph to develop, within a reasonable period of time, such financial and other capability as may be needed to obtain such bonds as the Administration may subsequently require for the successful completion of any program conducted under the authority of this subsection;
(C) the Administration finds that such small business is unable to obtain the requisite bond or bonds from a surety and that no surety is willing to issue such bond or bonds subject to the guarantee provisions of Title IV of the Small Business Investment Act of 1958; and
(D) the small business is determined to be a startup concern and such concern has not been participating in any program conducted under the authority of this subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may not be exercised after September 30, 1988.
(3) (A) Any Program Participant selected by the Administration to perform a contract to be let noncompetitively pursuant to this subsection shall, when practicable, participate in any negotiation of the terms and conditions of such contract.
(B) (i) For purposes of paragraph (1) a "fair market price" shall be determined by the agency offering the procurement requirement to the Administration, in accordance with clauses (ii) and (iii).
(ii) The estimate of a current fair market price for a new procurement requirement, or a requirement that does not have a satisfactory procurement history, shall be derived from a price or cost analysis. Such analysis may take into account prevailing market conditions, commercial prices for similar products or services, or data obtained from any other agency. Such analysis shall consider such cost or pricing data as may be timely submitted by the Administration.
(iii) The estimate of a current fair market price for a procurement requirement that has a satisfactory procurement history shall be based on recent award prices adjusted to insure comparability. Such adjustments shall take into account differences in quantities, performance times, plans, specifications, transportation costs, packaging and packing costs, labor and materials costs, overhead costs, and any other additional costs which may be deemed appropriate.
(C) An agency offering a procurement requirement for potential award pursuant to this subsection shall, upon the request of the Administration, promptly submit to the Administration a written statement detailing the method used by the agency to estimate the current fair market price for such contract, identifying the information, studies, analyses, and other data used by such agency. The agency's estimate of the current fair market price (and any supporting data furnished to the Administration) shall not be disclosed to any potential offeror (other than the Administration).
(D) A small business concern selected by the Administration to perform or negotiate a contract to be let pursuant to this subsection may request the Administration to protect the agency's estimate of the fair market price for such contract pursuant to paragraph (1)(A).
(4) (A) For purposes of this section, the term "socially and economically disadvantaged small business concern" means any small business concern which meets the requirements of subparagraph (B) and—
(i) which is at least 51 per centum unconditionally owned by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian organization, or
(ii) in the case of any publicly owned business, at least 51 per centum of the stock of which is unconditionally owned by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian organization.
(B) A small business concern meets the requirements of this subparagraph if the management and daily business operations of such small concern are controlled by one or more—
(i) socially and economically disadvantaged individuals described in subparagraph (A)(i)(I) or subparagraph (A)(ii)(I), or
(ii) members of an economically disadvantaged Indian tribe described in subparagraph (A)(i)(II) or subparagraph (A)(ii)(II) or
(iii) Native Hawaiian organizations described in subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual basis, that it meets the requirements of this paragraph regarding ownership and control.
(5) Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
(6) (A) Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Administration shall consider, but not be limited to, the assets and net worth of such socially disadvantaged individual. In determining the economic disadvantage of an Indian tribe, the Administration shall consider, where available, information such as the following: the per capita income of members of the tribe excluding judgment awards, the percentage of the local Indian population below the poverty level, and the tribe's access to capital markets.
(B) Each Program Participant shall annually submit to the Administration—
(i) a personal financial statement for each disadvantaged owner;
(ii) a record of all payments made by the Program Participant to each of its disadvantaged owners or to any person or entity affiliated with such owners; and
(iii) such other information as the Administration may deem necessary to make the determinations required by this paragraph.
(C) (i) Whenever, on the basis of information provided by a Program Participant pursuant to subparagraph (B) or otherwise, the Administration has reason to believe that the standards to establish economic disadvantage pursuant to subparagraph (A) have not been met, the Administration shall conduct a review to determine whether such Program Participant and its disadvantaged owners continue to be impaired in their ability to compete in the free enterprise system due to diminished capital and credit opportunities when compared to other concerns in the same business area, which are not socially disadvantaged.
(ii) If the Administration determines, pursuant to such review, that a Program Participant and its disadvantaged owners are no longer economically disadvantaged for the purpose of receiving assistance under this subsection, the Program Participant shall be graduated pursuant to section 7(j)(10)(G) subject to the right to a hearing as provided for under paragraph (9).
(D) (i) Whenever, on the basis of information provided by a Program Participant pursuant to subparagraph (B) or otherwise, the Administration has reason to believe that the amount of funds or other assets withdrawn from a Program Participant for the personal benefit of its disadvantaged owners or any person or entity affiliated with such owners may have been unduly excessive, the Administration shall conduct a review to determine whether such withdrawal of funds or other assets was detrimental to the achievement of the targets, objectives, and goals contained in such Program Participant's business plan.
(ii) If the Administration determines, pursuant to such review, that funds or other assets have been withdrawn to the detriment of the Program Participant's business, the Administration shall—
(I) initiate a proceeding to terminate the Program Participant pursuant to section 7(j)(10)(F), subject to the right to a hearing under paragraph (9); or
(II) require an appropriate reinvestment of funds or other assets and such other steps as the Administration may deem necessary to ensure the protection of the concern.
(E) Whenever the Administration computes personal net worth for any purpose under this paragraph, it shall exclude from such computation—
(i) the value of investments that disadvantaged owners have in their concerns, except that such value shall be taken into account under this paragraph when comparing such concerns to other concerns in the same business area that are owned by other than socially disadvantaged persons;
(ii) the equity that disadvantaged owners have in their primary personal residences, except that any portion of such equity that is attributable to unduly excessive withdrawals from a Program Participant or a concern applying for program participation shall be taken into account.
(7) (A) No small business concern shall be deemed eligible for any assistance pursuant to this subsection unless the Administration determines that with contract, financial, technical, and management support the small business concern will be able to perform contracts which may be awarded to such concern under paragraph (1)(C) and has reasonable prospects for success in competing in the private sector.
(B) Limitations established by the Administration in its regulations and procedures restricting the award of contracts pursuant to this subsection to a limited number of standard industrial classification codes in an approved business plan shall not be applied in a manner that inhibits the logical business progression by a participating small business concern into areas of industrial endeavor where such concern has the potential for success.
(8) All determinations made pursuant to paragraph (5) with respect to whether a group has been subjected to prejudice or bias shall be made by the Administrator after consultation with the Associate Administrator for Minority Small Business and Capital Ownership Development. All other determinations made pursuant to paragraphs (4), (5), (6), and (7) shall be made by the Associate Administrator for Minority Small Business and Capital Ownership Development under the supervision of, and responsible to, the Administrator.
(9) (A) Subject to the provisions of subparagraph (E), the Administration, prior to taking any action described in subparagraph (B), shall provide the small business concern that is the subject of such action, an opportunity for a hearing on the record, in accordance with chapter 5 of title 5, United States Code.
(B) The actions referred to in subparagraph (A) are—
(i) denial of program admission based upon a negative determination pursuant to paragraph (4), (5), or (6);
(ii) a termination pursuant to section 7(j)(10)(F);
(iii) a graduation pursuant to section 7(j)(10)(G); and
(iv) the denial of a request to issue a waiver pursuant to paragraph (21)(B).
(C) The Administration's proposed action, in any proceeding conducted under the authority of this paragraph, shall be sustained unless it is found to be arbitrary, capricious, or contrary to law.
(D) A decision rendered pursuant to this paragraph shall be the final decision of the Administration and shall be binding upon the Administration and those within its employ.
(E) The adjudicator selected to preside over a proceeding conducted under the authority of this paragraph shall decline to accept jurisdiction over any matter that—
(i) does not, on its face, allege facts that, if proven to be true, would warrant reversal or modification of the Administration's position;
(ii) is untimely filed;
(iii) is not filed in accordance with the rules of procedure governing such proceedings; or
(iv) has been decided by or is the subject of an adjudication before a court of competent jurisdiction over such matters.
(F) Proceedings conducted pursuant to the authority of this paragraph shall be completed and a decision rendered, insofar as practicable, within ninety days after a petition for a hearing is filed with the adjudicating office.
(10) The Administration shall develop and implement an outreach program to inform and recruit small business concerns to apply for eligibility for assistance under this subsection. Such program shall make a sustained and substantial effort to solicit applications for certification from small business concerns located in areas of concentrated unemployment or underemployment or within labor surplus areas and within States having relatively few Program Participants and from small disadvantaged business concerns in industry categories that have not substantially participated in the award of contracts let under the authority of this subsection.
(11) To the maximum extent practicable, construction subcontracts awarded by the Administration pursuant to this subsection shall be awarded within the county or State where the work is to be performed.
(12) (A) The Administration shall require each concern eligible to receive subcontracts pursuant to this subsection to annually prepare and submit to the Administration a capability statement. Such statement shall briefly describe such concern's various contract performance capabilities and shall contain the name and telephone number of the Business Opportunity Specialist assigned such concern. The Administration shall separate such statements by those primarily dependent upon local contract support and those primarily requiring a national marketing effort. Statements primarily dependent upon local contract support shall be disseminated to appropriate buying activities in the marketing area of the concern. The remaining statements shall be disseminated to the Directors of Small and Disadvantaged Business Utilization for the appropriate agencies who shall further distribute such statements to buying activities with such agencies that may purchase the types of items or services described on the capability statements.
(B) Contracting activities receiving capability statements shall, within 60 days after receipt, contact the relevant Business Opportunity Specialist to indicate the number, type and approximate dollar value of contract opportunities that such activities may be awarding over the succeeding 12‑month period and which may be appropriate to consider for award to those concerns for which it has received capability statements.
(C) Each executive agency reporting to the Federal Procurement Data System contract actions with an aggregate value in excess of $50,000,000 in fiscal year 1988, or in any succeeding fiscal year, shall prepare a forecast of expected contract opportunities or classes of contract opportunities for the next and succeeding fiscal years that small business concerns, including those owned and controlled by socially and economically disadvantaged individuals, are capable of performing. Such forecast shall be periodically revised during such year. To the extent such information is available, the agency forecasts shall specify:
(i) The approximate number of individual contract opportunities (and the number of opportunities within a class)
(ii) The approximate dollar value, or range of dollar values, for each contract opportunity or class of contract opportunities.
(iii) The anticipated time (by fiscal year quarter) for the issuance of a procurement request.
(iv) The activity responsible for the award and administration of the contract.
(D) The head of each executive agency subject to the provisions of subparagraph (C) shall within 10 days of completion furnish such forecasts to—
(i) the Director of the Office of Small and Disadvantaged Business Utilization established pursuant to section 15(k) for such agency; and
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D) may be limited to classes of items and services for which there are substantial annual purchases.
(F) Such forecasts shall be available to small business concerns.
(13) For purposes of this subsection, the term "Indian tribe" means any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation (within the meaning of the Alaska Native Claims Settlement Act) which—
(A) is recognized as eligible for the special
programs and services provided by the
(B) is recognized as such by the State in which such tribe, band, nation, group, or community resides.
(14) (A) A concern may not be awarded a contract under this subsection as a small business concern unless the concern agrees that—
(i) in the case of a contract for services (except construction), at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; and
(ii) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), the concern will perform work for at least 50 percent of the cost of manufacturing the supplies (not including the cost of materials).
(B) The Administrator may change the percentage under clause (i) or (ii) of subparagraph (A) if the Administrator determines that such change is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category. A percentage established under the preceding sentence may not differ from a percentage established under section 15(o).
(C) The Administration shall establish, through public rulemaking, requirements similar to those specified in subparagraph (A) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not otherwise subject to the requirements of such subparagraph. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B), except that such a percentage may not differ from a percentage established under section 15(o) for the same industry category.
(15) For purposes of this subsection, the term "Native Hawaiian Organization" means any community service organization serving Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of incorporation with the director (or the designee thereof) of the Hawaii Department of Commerce and Consumer Affairs, or any successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally benefit such Native Hawaiians.
(16) (A) The Administration shall award sole source contracts under this section to any small business concern recommended by the procuring agency offering the contract opportunity if—
(i) the Program Participant is determined to be a responsible contractor with respect to performance of such contract opportunity;
(ii) the award of such contract would be consistent with the Program Participant’s business plan; and
(iii) the award of the contract would not result in the Program Participant exceeding the requirements established by section 7(j)(10)(I).
(B) To the maximum extent practicable, the Administration shall promote the equitable geographic distribution of sole source contracts awarded pursuant to this subsection.
(17) (A) An otherwise responsible business concern that is in compliance with the requirements of subparagraph (B) shall not be denied the opportunity to submit and have considered its offer for any procurement contract for the supply of a product to be let pursuant to this subsection or subsection (a) of section 15 solely because such concern is other than the actual manufacturer or processor of the product to be supplied under the contract.
(B) To be in compliance with the requirements referred to in subparagraph (A), such a business concern shall—
(i) be primarily engaged in the wholesale or retail trade;
(ii) be a small business concern under the numerical size standard for the Standard Industrial Classification Code assigned to the contract solicitation on which the offer is being made;
(iii) be a regular dealer, as defined pursuant to section 35(a) of title 41, United States Code (popularly referred to as the Walsh‑Healey Public Contracts Act), in the product to be offered the Government or be specifically exempted from such section by section 7(j)(13)(C); and
(iv) represent that it will supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—
(I) by the Administrator, after reviewing a determination by the contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including period for performance) required of an offeror by the solicitation; or
(II) by the Administrator for a product (or class of products), after determining that no small business manufacturer or processor is available to participate in the Federal procurement market.
(18) (A) No person within the employ of the Administration shall, during the term of such employment and for a period of two years after such employment has been terminated, engage in any activity or transaction specified in subparagraph (B) with respect to any Program Participant during such person's term of employment, if such person participated personally (either directly or indirectly) in decision‑making responsibilities relating to such Program Participant or with respect to the administration of any assistance provided to Program Participants generally under this subsection, section 7(j)(10), or section 7(a)(20).
(B) The activities and transactions prohibited by subparagraph (A) include—
(i) the buying, selling, or receiving (except by inheritance) of any legal or beneficial ownership of stock or any other ownership interest or the right to acquire any such interest;
(ii) the entering into or execution of any written or oral agreement (whether or not legally enforceable) to purchase or otherwise obtain any right or interest described in clause (i); or
(iii) the receipt of any other benefit or right that may be an incident of ownership.
(C) (i) The employees designated in clause (ii) shall annually submit a written certification to the Administration regarding compliance with the requirements of this paragraph.
(ii) The employees referred to in clause (i) are—
(I) regional administrators;
(II) district directors;
(III) the Associate Administrator for Minority Small Business and Capital Ownership Development;
(IV) employees whose principal duties relate to the award of contracts or the provision of other assistance pursuant to this subsection or section 7(j)(10); and
(V) such other employees as the Administrator may deem appropriate.
(iii) Any present or former employee of the Administration who violates this paragraph shall be subject to a civil penalty, assessed by the Attorney General, that shall not exceed 300 per centum of the maximum amount of gain such employee realized or could have realized as a result of engaging in those activities and transactions prescribed by subparagraph (B).
(iv) In addition to any other remedy or sanction provided for under law or regulation, any person who falsely certifies pursuant to clause (i) shall be subject to a civil penalty under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801‑3812).
(19) (A) Any employee of the Administration who has authority to take, direct others to take, recommend, or approve any action with respect to any program or activity conducted pursuant to this subsection or section 7(j), shall not, with respect to any such action, exercise or threaten to exercise such authority on the basis of the political activity or affiliation of any party. Employees of the Administration shall expeditiously report to the Inspector General of the Administration any such action for which such employee's participation has been solicited or directed.
(B) Any employee who willfully and knowingly violates subparagraph (A) shall be subject to disciplinary action which may consist of separation from service, reduction in grade, suspension, or reprimand.
(C) Subparagraph (A) shall not apply to any action taken as a penalty or other enforcement of a violation of any law, rule, or regulation prohibiting or restricting political activity.
(D) The prohibitions of subparagraph (A), and remedial measures provided for under subparagraphs (B) and (C) with regard to such prohibitions, shall be in addition to, and not in lieu of, any other prohibitions, measures or liabilities that may arise under any other provision of law.
(20) (A) Small business concerns participating in the Program under section 7(j)(10) and eligible to receive contracts pursuant to this section shall semiannually report to their assigned Business Opportunity Specialist the following:
(i) A listing of any agents, representatives, attorneys, accountants, consultants, and other parties (other than employees) receiving compensation to assist in obtaining a Federal contract for such Program Participant.
(ii) The amount of compensation received by any person listed under clause (i) during the relevant reporting period and a description of the activities performed in return for such compensation.
(B) The Business Opportunity Specialist shall promptly review and forward such report to the Associate Administrator for Minority Small Business and Capital Ownership Development. Any report that raises a suspicion of improper activity shall be reported immediately to the Inspector General of the Administration.
(C) The failure to submit a report pursuant to the requirements of this subsection and applicable regulations shall be considered "good cause" for the initiation of a termination proceeding pursuant to section 7(j)(10)(F).
(21) (A) Subject to the provisions of subparagraph (B), a contract (including options) awarded pursuant to this subsection shall be performed by the concern that initially received such contract. Notwithstanding the provisions of the preceding sentence, if the owner or owners upon whom eligibility was based relinquish ownership or control of such concern, or enter into any agreement to relinquish such ownership or control, such contract or option shall be terminated for the convenience of the Government, except that no repurchase costs or other damages may be assessed against such concerns due solely to the provisions of this subparagraph.
(B) The Administrator may, on a nondelegable basis, waive the requirements of subparagraph (A) only if one of the following conditions exist:
(i) When it is necessary for the owners of the concern to surrender partial control of such concern on a temporary basis in order to obtain equity financing.
(ii) The head of the contracting agency for which the contract is being performed certifies that termination of the contract would severely impair attainment of the agency's program objectives or missions;
(iii) Ownership and control of the concern that is performing the contract will pass to another small business concern that is a program participant, but only if the acquiring firm would otherwise be eligible to receive the award directly pursuant to subsection (a);
(iv) The individuals upon whom eligibility was based are no longer able to exercise control of the concern due to incapacity or death; or
(v) When, in order to raise equity capital, it is necessary for the disadvantaged owners of the concern to relinquish ownership of a majority of the voting stock of such concern, but only if—
(I) such concern has exited the Capital Ownership Development Program;
(II) the disadvantaged owners will maintain ownership of the largest single outstanding block of voting stock (including stock held by affiliated parties); and
(III) the disadvantaged owners will maintain control of daily business operations.
(C) The Administrator may waive the requirements of subparagraph (A) if—
(i) in the case of subparagraph (B)(i), (ii) and (iv), he is requested to do so prior to the actual relinquishment of ownership or control; and
(ii) in the case of subparagraph (B)(iii), he is requested to do so as soon as possible after the incapacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this subsection shall be required to notify the Administration immediately upon entering an agreement (either oral or in writing) to transfer all or part of its stock or other ownership interest to any other party.
(E) Notwithstanding any other provision of law, for the purposes of determining ownership and control of a concern under this section, any potential ownership interests held by investment companies licensed under the Small Business Investment Act of 1958 shall be treated in the same manner as interests held by the individuals upon whom eligibility is based.
(b) It shall also be the duty of the Administration and it is hereby empowered, whenever it determines such action is necessary—
(1) (A) to provide technical, managerial, and informational aids to small business concerns—
(i) by advising
and counseling on matters in connection with Government procurement and
policies, principles, and practices of good management;
(ii) by cooperating and advising with—
(I) voluntary business, professional,
educational, and other nonprofit organizations, associations, and institutions
(except that the Administration shall take such actions as it determines
necessary to ensure that such cooperation does not constitute or imply an
endorsement by the Administration of the organization or its products or
services, and shall ensure that it receives appropriate recognition in all
printed materials); and
(II) other Federal and State agencies;
(iii) by maintaining a clearinghouse for
information on managing, financing, and operating small business enterprises;
and
(iv) by disseminating such information, including through recognition events, and by other activities that the Administration determines to be appropriate.
(B) To establish, conduct, and publicize, and to recruit, select, and train volunteers for (and to enter into contracts, grants, or cooperative agreements therefor), volunteer programs, including a Service Corps of Retired Executives (SCORE) and an Active Corps of Executive (sic) (ACE) for the purposes of section 8(b)(1)(A) of this Act. To facilitate the implementation of such volunteer programs the Administration shall maintain at its headquarters and pay the salaries, benefits, and expenses of a volunteer and professional staff to manage and oversee the program. Any such payments made pursuant to this subparagraph shall be effective only to such extent or in such amounts as are provided in advance in appropriation Acts. Notwithstanding any other provision of law, SCORE may solicit cash and in-kind contributions from the private sector to be used to carry out its functions under this Act, and may use payments made by the Administration pursuant to this subparagraph for such solicitation and the management of the contributions received.
(C) To allow any individual or group of persons participating with it in furtherance of the purposes of subparagraphs (A) and (B) to use the Administration's office facilities and related material and services as the Administration deems appropriate, including clerical and stenographic services:
(i) such volunteers, while carrying out activities under section 8(b)(1) of this Act shall be deemed Federal employees for the purposes of the Federal tort claims provisions in title 28, United States Code; and for the purposes of subchapter I of chapter 81 of title 5, United States Code (relative to compensation to Federal employees for work injuries) shall be deemed civil employees of the United States within the meaning of the term "employee" as defined in section 8101 of title 5, United States Code, and the provisions of that subchapter shall apply except that in computing compensation benefits for disability or death, the monthly pay of a volunteer shall be deemed that received under the entrance salary for a grade GS‑11 employee;
(ii) the Administrator is authorized to reimburse such volunteers for all necessary out‑of‑pocket expenses incident to their provision of services under this Act, or in connection with attendance at meetings sponsored by the Administration, or for the cost of malpractice insurance, as the Administrator shall determine, in accordance with regulations which he or she shall prescribe, and, while they are carrying out such activities away from their homes or regular places of business, for travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5, United States Code, for individuals serving without pay; and
(iii) such volunteers shall in no way provide services to a client of such Administration with a delinquent loan outstanding, except upon a specific request signed by such client for assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no payment for supportive services or reimbursement of out‑of‑pocket expenses made to persons serving pursuant to section 8(b)(1) of this Act shall be subject to any tax or charge or be treated as wages or compensation for the purposes of unemployment, disability, retirement, public assistance, or similar benefit payments, or minimum wage laws.
(E) In carrying out its functions under subparagraph (A), to make grants (including contracts and cooperative agreements) to any public or private institution of higher education for the establishment and operation of a small business institute, which shall be used to provide business counseling and assistance to small business concerns through the activities of students enrolled at the institution, which students shall be entitled to receive educational credits for their activities.
(F) Notwithstanding any other provision of law and pursuant to regulations which the Administrator shall prescribe, counsel may be employed and counsel fees, court costs, bail, and other expenses incidental to the defense of volunteers may be paid in judicial or administrative proceedings arising directly out of the performance of activities pursuant to section 8(b)(1) of this Act, as amended (15 U.S.C. 637(b)(1)) to which volunteers have been made parties.
(G) In carrying out its functions under this Act and to carry out the activities authorized by title IV of the Women's Business Ownership Act of 1988 the Administration is authorized to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this Act, any money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise; and, further, to accept gratuitous services and facilities.
(2) to make a complete inventory of all productive facilities of small‑business concerns or to arrange for such inventory to be made by any other governmental agency which has the facilities. In making any such inventory, the appropriate agencies in the several States may be requested to furnish an inventory of the productive facilities of small‑business concerns in each respective State if such an inventory is available or in prospect;
(3) to coordinate and to ascertain the means by which the productive capacity of small‑business concerns can be more effectively utilized;
(4) to 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;
(5) to obtain information as to methods and practices which Government prime contractors utilize in letting subcontracts and to take action to encourage the letting of subcontracts by prime contractors to small‑business concerns at prices and on conditions and terms which are fair and equitable;
(6) to determine within any industry the concerns, firms, persons, corporations, partnerships, cooperatives, or other business enterprises which are to be designated "small business concerns" for the purpose of effectuating the provisions of this Act. To carry out this purpose the Administrator, when requested to do so, shall issue in response to each such request an appropriate certificate certifying an individual concern as a "small business concern" in accordance with criteria expressed in this Act. Any such certificate shall be subject to revocation when the concern covered thereby ceases to be a "small business concern". Offices of the Government having procurement or lending powers, or engaging in the disposal of Federal property or allocating materials or supplies, or promulgating regulations affecting the distribution of materials or supplies, shall accept as conclusive the Administration's determination as to which enterprises are to be designated "small‑business concerns," as authorized and directed under this paragraph;
(7) (A) to certify to Government procurement officers, and officers engaged in the sale and disposal of Federal property, with respect to all elements of responsibility, including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, and tenacity, of any small business concern or group of such concerns to receive and perform a specific Government contract. A Government procurement officer or an officer engaged in the sale and disposal of Federal property may not, for any reason specified in the preceding sentence, preclude any small business concern or group of such concerns from being awarded such contract without referring the matter for a final disposition to the Administration.
(B) If a Government procurement officer finds that an otherwise qualified small business concern may be ineligible due to the provisions of section 35(a) of title 41, United States Code (the Walsh‑Healey Public Contracts Act), he shall notify the Administration in writing of such finding. The Administration shall review such finding and shall either dismiss it and certify the small business concern to be an eligible Government contractor for a specific Government contract or if it concurs in the finding, forward the matter to the Secretary of Labor for final disposition, in which case the Administration may certify the small business concern only if the Secretary of Labor finds the small business concern not to be in violation.
(C) In any case in which a small business concern or group of such concerns has been certified by the Administration pursuant to (A) or (B) to be a responsible or eligible Government contractor as to a specific Government contract, the officers of the Government having procurement or property disposal powers are directed to accept such certification as conclusive, and shall let such Government contract to such concern or group of concerns without requiring it to meet any other requirement of responsibility or eligibility. Notwithstanding the first sentence of this subparagraph, the Administration may not establish an exemption from referral or notification or refuse to accept a referral or notification from a Government procurement officer made pursuant to subparagraph (A) or (B) of this paragraph, but nothing in this paragraph shall require the processing of an application for certification if the small business concern to which the referral pertains declines to have the application processed.
(8) to obtain from any Federal department, establishment, or agency engaged in procurement or in the financing of procurement or production such reports concerning the letting of contracts and subcontracts and the making of loans to business concerns as it may deem pertinent in carrying out its functions under this Act;
(9) to obtain from any Federal department, establishment, or agency engaged in the disposal of Federal property such reports concerning the solicitation of bids, time of sale, or otherwise as it may deem pertinent in carrying out its functions under this Act;
(10) to obtain from suppliers of materials information pertaining to the method of filling orders and the bases for allocating their supply, whenever it appears that any small business is unable to obtain materials from its normal sources;
(11) to make studies and recommendations to the appropriate Federal agencies to insure that a fair proportion of the total purchases and contracts for property and services for the Government be placed with small‑business enterprises, to insure that a fair proportion of Government contracts for research and development be placed with small‑business concerns, to insure that a fair proportion of the total sales of Government property be made to small‑business concerns, and to insure a fair and equitable share of materials, supplies, and equipment to small‑business concerns;
(12) to consult and cooperate with all Government agencies for the purpose of insuring that small‑business concerns shall receive fair and reasonable treatment from such agencies;
(13) to establish such advisory boards and committees as may be necessary to achieve the purposes of this Act and of the Small Business Investment Act of 1958; to call meetings of such boards and committees from time to time; to pay the transportation expenses and a per diem allowance in accordance with Section 5703 of title 5, United States Code, to the members of such boards and committees for travel and subsistence expenses incurred at the request of the Administration in connection with travel to points more than fifty miles distant from the homes of such members in attending the meetings of such boards and committees; and to rent temporarily, within the District of Columbia or elsewhere, such hotel or other accommodations as are needed to facilitate the conduct of such meetings;
(14) to provide at the earliest practicable
time such information and
assistance as may be appropriate, including information
concerning eligibility for loans under
section 7(b)(3), to local public agencies (as defined
in section 110(h) of the Housing Act of 1949) and to small‑business
concerns to be displaced by federally aided urban renewal projects in order to
assist such small‑business concerns in reestablishing their operations;
(15) to disseminate, without regard to the provisions of section 3204 of title 39, United States Code, data and information, in such form as it shall deem appropriate, to public agencies, private organizations, and the general public;
(16) to make studies of matters materially affecting the competitive strength of small business, and of the effect on small business of Federal laws, programs, and regulations, and to make recommendations to the appropriate Federal agency or agencies for the adjustment of such programs and regulations to the needs of small business; and
(17) to make grants to, and enter into contracts and cooperative agreements with, educational institutions, private businesses, veterans’ nonprofit community-based organizations, and Federal, State, and local departments and agencies for the establishment and implementation of outreach programs for disabled veterans (as defined in section 4211(3) of title 38, United States Code), veterans, and members of a reserve component of the Armed Forces.
(c) [Reserved].
(d) (1) It is the policy of the United States that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(2) The clause stated in paragraph (3) shall be included in all contracts let by any Federal agency except any contract which—
(A) does not exceed the simplified acquisition threshold;
(B) including all subcontracts under such contracts will be performed entirely outside of any State, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or
(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
"(A) It is the policy of the United States that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
"(B) The contractor hereby agrees to carry out
this policy in the awarding of subcontracts to the fullest extent consistent
with the efficient performance of this contract. The contractor further agrees to cooperate in
any studies or surveys as may be conducted by the United States Small Business
Administration or the awarding agency of the
"(C) As used in this contract, the term 'small business concern' shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term 'small business concern owned and controlled by socially and economically disadvantaged individuals' shall mean a small business concern—
"(i) which is at least 51 per centum owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more socially and economically disadvantaged individuals; and
"(ii) whose management and daily business operations are controlled by one or more of such individuals.
"The contractor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small Business Act.
“(D) The term "small business concern owned and controlled by women" shall mean a small business concern—
(i) which is at least 51 per centum owned by one or more women; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more women; and
(ii) whose management and daily business operations are controlled by one or more women.
“(E) The term “small business concern owned and controlled by veterans” shall mean a small business concern-—
(i) which is at least 51 per centum owned by one or more eligible veterans; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more veterans; and
(ii) whose management and daily business operations are controlled by such veterans. The contractor shall treat as veterans all individuals who are veterans within the meaning of the term under section 3(q) of the Small Business Act.
"(F) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as either a small business concern, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, a small business concern owned and controlled by socially and economically disadvantaged individuals, or a small business concern owned and controlled by women."
“(G) In this contract, the term ‘qualified HUBZone small business concern’ has the meaning given that term in section 3(p) of the Small Business Act.”
(4) (A) Each solicitation of an offer for a contract to be let by a Federal agency which is to be awarded pursuant to the negotiated method of procurement and which may exceed $1,000,000, in the case of a contract for the construction of any public facility, or $500,000, in the case of all other contracts, shall contain a clause notifying potential offering companies of the provisions of this subsection relating to contracts awarded pursuant to the negotiated method of procurement.
(B) Before the award of any contract to be let, or any amendment or modification to any contract let, by any Federal agency which—
(i) is to be awarded, or was let, pursuant to the negotiated method of procurement;
(ii) is required to include the clause stated in paragraph (3),
(iii) may exceed $1,000,000 in the case of a contract for the construction of any public facility, or $500,000 in the case of all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the procurement authority a subcontracting plan which incorporates the information prescribed in paragraph (6). The subcontracting plan shall be included in and made a material part of the contract.
(C) If, within the time limit prescribed in regulations of the Federal agency concerned, the apparent successful offeror fails to negotiate the subcontracting plan required by this paragraph, such offeror shall become ineligible to be awarded the contract. Prior compliance of the offeror with other such subcontracting plans shall be considered by the Federal agency in determining the responsibility of that offeror for the award of the contract.
(D) No contract shall be awarded to any offeror unless the procurement authority determines that the plan to be negotiated by the offeror pursuant to this paragraph provides the maximum practicable opportunity for small business concerns, qualified HUBZone small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women to participate in the performance of the contract.
(E) Notwithstanding any other provision of law, every Federal agency, in order to encourage subcontracting opportunities for small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, and small business concerns owned and controlled by the socially and economically disadvantaged individuals as defined in paragraph (3) of this subsection and for small business concerns owned and controlled by women, is hereby authorized to provide such incentives as such Federal agency may deem appropriate in order to encourage such subcontracting opportunities as may be commensurate with the efficient and economical performance of the contract: Provided, That, this subparagraph shall apply only to contracts let pursuant to the negotiated method of procurement.
(F) (i) Each contract subject to the requirements of this paragraph or paragraph (5) shall contain a clause for the payment of liquidated damages upon a finding that a prime contractor has failed to make a good faith effort to comply with the requirements imposed on such contractor by this subsection.
(ii) The contractor shall be afforded an opportunity to demonstrate a good faith effort regarding compliance prior to the contracting officer's final decision regarding the imposition of damages and the amount thereof. The final decision of a contracting officer regarding the contractor's obligation to pay such damages, or the amounts thereof, shall be subject to the Contract Disputes Act of 1978 (41 U.S.C. 601‑613).
(iii) Each agency shall ensure that the goals offered by the apparent successful bidder or offeror are attainable in relation to—
(I) the subcontracting opportunities available to the contractor, commensurate with the efficient and economical performance of the contract;
(II) the pool of eligible subcontractors available to fulfill the subcontracting opportunities; and
(III) the actual performance of such contractor in fulfilling the subcontracting goals specified in prior plans.
(G) The following factors shall be designated by the Federal agency as significant factors for purposes of evaluating offers for a bundled contract where the head of the agency determines that the contract offers a significant opportunity for subcontracting:
(i) A factor that is based on the rate provided under the subcontracting plan for small business participation in the performance of the contract.
(ii) For the evaluation of past performance of an offeror, a factor that is based on the extent to which the offeror attained applicable goals for small business participation in the performance of contracts.
(5) (A) Each solicitation of a bid for any contract to be let, or any amendment or modification to any contract let, by any Federal agency which—
(i) is to be awarded pursuant to the formal advertising method of procurement,
(ii) is required to contain the clause stated in paragraph (3) of this subsection,
(iii) may exceed $1,000,000 in the case of a contract for the construction of any public facility, or $500,000, in the case of all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to be awarded a contract to submit to the Federal agency concerned a subcontracting plan which incorporates the information prescribed in paragraph (6).
(B) If, within the time limit prescribed in regulations of the Federal agency concerned, the bidder selected to be awarded the contract fails to submit the subcontracting plan required by this paragraph, such bidder shall become ineligible to be awarded the contract. Prior compliance of the bidder with other such subcontracting plans shall be considered by the Federal agency in determining the responsibility of such bidder for the award of the contract. The subcontracting plan of the bidder awarded the contract shall be included in and made a material part of the contract.
(6) Each subcontracting plan required under paragraph (4) or (5) shall include—
(A) percentage goals for the utilization as subcontractors of small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women;
(B) the name of an individual within the employ of the offeror or bidder who will administer the subcontracting program of the offeror or bidder and a description of the duties of such individual;
(C) a description of the efforts the offeror or bidder will take to assure that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by the socially and economically disadvantaged individuals, and small business concerns owned and controlled by women will have an equitable opportunity to compete for subcontracts;
(D) assurances that the offeror or bidder will include the clause required by paragraph (2) of this subsection in all subcontracts which offer further subcontracting opportunities, and that the offeror or bidder will require all subcontractors (except small business concerns) who receive subcontracts in excess of $1,000,000 in the case of a contract for the construction of any public facility, or in excess of $500,000 in the case of all other contracts, to adopt a plan similar to the plan required under paragraph (4) or (5);
(E) assurances that the offeror or bidder will submit such periodic reports and cooperate in any studies or surveys as may be required by the Federal agency or the Administration in order to determine the extent of compliance by the offeror or bidder with the subcontracting plan; and
(F) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate procedures which have been adopted to comply with the requirements and goals set forth in this plan, including the establishment of source lists of small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women; and efforts to identify and award subcontracts to such small business concerns.
(7) The provisions of paragraph (4), (5), and (6) shall not apply to offerors or bidders who are small business concerns.
(8) The failure of any contractor or subcontractor to comply in good faith with—
(A) the clause contained in paragraph (3) of this subsection, or
(B) any plan required of such contractor pursuant to the authority of this subsection to be included in its contract or subcontract,
shall be a material breach of such contract or subcontract.
(9) Nothing contained in this subsection shall be construed to supersede the requirements of Defense Manpower Policy Number 4A (32A CFR Chap. 1) or any successor policy.
(10) In the case of contracts within the provisions of paragraphs (4), (5), and (6), the Administration is authorized to—
(A) assist Federal agencies and businesses in complying with their responsibilities under the provisions of this subsection, including the formulation of subcontracting plans pursuant to paragraph (4);
(B) review any solicitation for any contract to be let pursuant to paragraphs (4) and (5) to determine the maximum practicable opportunity for small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women to participate as subcontractors in the performance of any contract resulting from any solicitation, and to submit its findings, which shall be advisory in nature, to the appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans, either on a contract‑by‑contract basis, or in the case contractors [sic] having multiple contracts, on an aggregate basis.
(11) For purposes of determining the attainment of a subcontract utilization goal under any subcontracting plan entered into with any executive agency pursuant to this subsection, a mentor firm providing development assistance to a protégé firm under the pilot Mentor-Protégé Program established pursuant to section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 10 USC 2301 note) shall be granted credit for such assistance in accordance with subsection (g) of such section.
(e) (1) Except as provided in subsection (g)—
(A) an executive agency intending to—
(i) solicit bids or proposals for a contract for property or services for a price expected to exceed $25,000;
(ii) place an order, expected to exceed $25,000, under a basic agreement, basic ordering agreement, or similar arrangement,
shall furnish for publication by the Secretary of Commerce a notice described in subsection (b) of this section;
(B) an executive agency intending to solicit bids or proposals for a contract for property or services shall post, for a period of not less than ten days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in subsection (f)—
(i) in the case of an executive agency other than the Department of Defense, if the contract is for a price expected to exceed $10,000, but not to exceed $25,000; and
(ii) in the case of the Department of Defense, if the contract is for a price expected to exceed $5,000, but not to exceed $25,000; and
(C) an executive agency awarding a contract for property or services for a price exceeding $100,000, or placing an order referred to in clause (A)(ii) exceeding $100,000, shall furnish for publication by the Secretary of Commerce a notice announcing the award or order if there is likely to be any subcontract under such contract or order.
(2) The Secretary of Commerce shall publish promptly in the Commerce Business Daily each notice required by paragraph (1).
(3) Whenever an executive agency is required by paragraph (1)(A) to furnish a notice to the Secretary of Commerce, such executive agency may not—
(A) issue the solicitation earlier than 15 days after the date on which the notice is published by the Secretary of Commerce; or
(B) in the case of a contract or order estimated to be greater than the simplified acquisition threshold, establish a deadline for the submission of all bids or proposals in response to the notice required by paragraph (1)(A) that—
(i) in the case of an order under a basic agreement, basic ordering agreement, or similar arrangement, is earlier than the date 30 days after the date the notice required by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and development, is earlier than the date 45 days after the date the notice required by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the date 30 days after the date the solicitation is issued.
(f) Each notice of solicitation required by subparagraph (A) or (B) of subsection (e)(1) shall include—
(1) an accurate description of the property or services to be contracted for, which description (A) shall not be unnecessarily restrictive of competition, and (B) shall include, as appropriate, the agency nomenclature, National Stock Number or other part number, and a brief description of the item's form, fit, or function, physical dimensions, predominant material of manufacture, or similar information that will assist a prospective contractor to make an informed business judgment as to whether a copy of the solicitation should be requested;
(2) provisions that—
(A) state whether the technical data required to respond to the solicitation will not be furnished as part of such solicitation, and identify the source in the Government, if any, from which the technical data may be obtained; and
(B) state whether an offeror, its product, or service must meet a qualification requirement in order to be eligible for award, and, if so, identify the office from which a qualification requirement may be obtained;
(3) the name, business address, and telephone number of the contracting officer;
(4) a statement that all responsible sources may submit a bid, proposal, or quotation (as appropriate) which shall be considered by the agency;
(5) in the case of a procurement using procedures other than competitive procedures, a statement of the reason justifying the use of such procedures and the identity of the intended source; and
(6) in the case of a contract in an amount estimated to be greater than $25,000 but not greater than the simplified acquisition threshold—
(A) a description of the procedures to be used in awarding the contract; and
(B) a statement specifying the periods for prospective offerors and the contracting officer to take the necessary preaward and award actions.
(g) (1) A notice is not required under subsection (e)(1)
if—
(A) the proposed procurement is for an amount not greater than the simplified acquisition threshold and is to be conducted by—
(i) using widespread electronic public notice of the solicitation in a form that allows convenient and universal user access through a single, Government-wide point of entry; and
(ii) permitting the public to respond to the solicitation electronically.
(B) the notice would disclose the executive agency's needs and the disclosure of such needs would compromise the national security;
(C) the proposed procurement would result from acceptance of—
(i) any unsolicited proposal that demonstrates a unique and innovative research concept and the publication of any notice of such unsolicited research proposal would disclose the originality of thought or innovativeness of the proposal or would disclose proprietary information associated with the proposal; or
(ii) a proposal submitted under section 9 of this Act;
(D) the procurement is made against an order placed under a requirements contract;
(E) the procurement is made for perishable subsistence supplies;
(F) the procurement is for utility services, other than telecommunication services, and only one source is available; or
(G) the procurement is for the services of an expert for use in any litigation or dispute (including preparation for any foreseeable litigation or dispute) that involves or could involve the Federal Government in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, or in any part of an alternative dispute resolution process, whether or not the expert is expected to testify.
(2) The requirements of subsection (a)(1)(A) do not apply to any procurement under conditions described in paragraph (2), (3), (4), (5), or (7) of section 303(c) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or paragraph (2), (3), (4), (5), or (7) of section 2304(c) of title 10, United States Code.
(3) The requirements of subsection (a)(1)(A) shall not apply in the case of any procurement for which the head of the executive agency makes a determination in writing, after consultation with the Administrator for Federal Procurement Policy and the Administrator of the Small Business Administration, that it is not appropriate or reasonable to publish a notice before issuing a solicitation.
(h) (1) An executive agency may not award a contract using procedures other than competitive procedures unless—
(A) except as provided in paragraph (2), a written justification for the use of such procedures has been approved—
(i) in the case of a contract for an amount exceeding $100,000 (but equal to or less than $1,000,000), by the advocate for competition for the procuring activity (without further delegation);
(ii) in the case of a contract for an amount exceeding $1,000,000 (but equal to or less than $10,000,000), by the head of the procuring activity or a delegate who, if a member of the Armed Forces, is a general or flag officer, or, if a civilian, is serving in a position in grade GS‑16 or above under the General Schedule (or in a comparable or higher position under another schedule); or
(iii) in the case of a contract for an amount exceeding $10,000,000, by the senior procurement executive of the agency designated pursuant to section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)) (without further delegation); and
(B) all other requirements applicable to the use of such procedures under title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or chapter 137 of title 10, United States Code, as appropriate, have been satisfied.
(2) The same exceptions as are provided in section 303(f)(2) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10, United States Code, shall apply with respect to the requirements of paragraph (1)(A) of this subsection in the same manner as such exceptions apply to the requirements of section 303(f)(1) of such Act or section 2304(f)(1) of such title, as appropriate.
(i) An executive agency shall make available to any business concern, or the authorized representative of such concern, the complete solicitation package for any on‑going procurement announced pursuant to a notice under subsection (e). An executive agency may require the payment of a fee, not exceeding the actual cost of duplication, for a copy of such package.
(j) For purposes of this section, the term "executive agency" has the meaning provided such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).
(k) NOTICES OF SUBCONTRACTING OPPORTUNITIES—
(1) IN GENERAL.—Notices of subcontracting opportunities may be submitted for publication in the Commerce Business Daily by—
(A) a business concern awarded a contract by an executive agency subject to subsection (e)(1)(C); and
(B) a business concern that is a subcontractor or supplier (at any tier) to such contractor having a subcontracting opportunity in excess of $10,000.
(2) CONTENT OF NOTICE.—The notice of a subcontracting opportunity shall include—
(A) a description of the business opportunity that is comparable to the description specified in paragraphs (1), (2), (3), and (4) of subsection (f); and
(B) the due date for receipt of offers.
(l) MANAGEMENT ASSISTANCE FOR SMALL BUSINESSES AFFECTED BY MILITARY OPERATIONS.—The Administration shall utilize, as appropriate, its entrepreneurial development and management assistance programs, including programs involving State or private sector partners, to provide business counseling and training to any small business concern adversely affected by the deployment of units of the Armed Forces of the United States in support of a period of military conflict (as defined in section 7(n)(1)).
(m) PROCUREMENT PROGRAM FOR WOMEN-OWNED SMALL BUSINESS CONCERNS.—
(1) DEFINITIONS.—In this subsection, the following definitions apply:
(A) CONTRACTING OFFICER.—The term “contracting officer” has the meaning given such term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)).
(B) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY WOMEN.—The term “small business concern owned and controlled by women” has the meaning given such term in section 3(n), except that ownership shall be determined without regard to any community property law.
(2) AUTHORITY TO RESTRICT COMPETITION.—In accordance with this subsection, a contracting officer may restrict competition for any contract for the procurement of goods or services by the Federal Government to small business concerns owned and controlled by women, if—
(A) each of the concerns is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law);
(B) the contracting officer has a reasonable expectation that 2 or more small business concerns owned and controlled by women will submit offers for the contract;
(C) the contract is for the procurement of goods or services with respect to an industry identified by the Administrator pursuant to paragraph (3);
(D) the anticipated award price of the contract (including options) does not exceed—
(i) $5,000,000, in the case of a contract assigned an industrial classification code for manufacturing; or
(ii) $3,000,000, in the case of all other contracts;
(E) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price; and
(F) each of the concerns—
(i) is certified by a Federal agency, a State government, or a national certifying entity approved by the Administrator, as a small business concern owned and controlled by women; or
(ii) certifies to the contracting officer that it is a small business concern owned and controlled by women and provides adequate documentation, in accordance with standards established by the Administration, to support such certification.
(3) WAIVER.—With respect to a small business concern owned and controlled by women, the Administrator may waive subparagraph (2)(A) if the Administrator determines that the concern is in an industry in which small business concerns owned and controlled by women are substantially underrepresented.
(4) IDENTIFICATION OF INDUSTRIES.—The Administrator shall conduct a study to identify industries in which small business concerns owned and controlled by women are underrepresented with respect to Federal procurement contracting.
(5) ENFORCEMENT; PENALTIES.—
(A) VERIFICATION OF ELIGIBILITY.—In carrying out this subsection, the Administrator shall establish procedures relating to—
(i) the filing, investigation, and disposition by the Administration of any challenge to the eligibility of a small business concern to receive assistance under this subsection (including a challenge, filed by an interested party, relating to the veracity of a certification made or information provided to the Administration by a small business concern under paragraph (2)(F)); and
(ii) verification by the Administrator of the accuracy of any certification made or information provided to the Administration by a small business concern under paragraph (2)(F).
(B) EXAMINATIONS.—The procedures established under subparagraph (A) may provide for program examinations (including random program examinations) by the Administrator of any small business concern making a certification or providing information to the Administrator under paragraph (2)(F).
(C) PENALTIES.—In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a small business concern owned and controlled by women for purposes of this subsection, shall be subject to—
(i) section 1001 of title 18, United States Code; and
(ii) sections 3729 through 3733 of title 31, United States Code;
(6) PROVISION OF DATA.—Upon the request of the Administrator, the head of any Federal department or agency shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out this subsection.
(n) BUSINESSLINC GRANTS AND COOPERATIVE AGREEMENTS.—
(1) IN GENERAL.—In accordance with this subsection, the Administrator may make grants to enter into cooperative agreements with any coalition of private entities, public entities, or any combination of private and public entities—
(A) to expand business-to-business relationships between large and small businesses; and
(B) to provide businesses, directly or indirectly, with online information and a database of companies that are interested in mentor-protégé programs or community-based, statewide, or local business development programs.
(2) MATCHING REQUIREMENT.—Subject to subparagraph (B), the Administrator may make a grant to a coalition under paragraph (1) only if the coalition provides for activities described in paragraph (1)(A) or (1)(B) an amount, either in kind or in cash, equal to the grant amount.
(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $6,600,000, to remain available until expended, for each of fiscal years 2001 through 2006.
§ 9. (a) 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 such concerns are handicapped in obtaining the benefits of research and development programs conducted at Government expense. These small‑business concerns are thereby placed at a competitive disadvantage. This weakens the competitive free enterprise system and prevents the orderly development of the national economy. It is the policy of the Congress that assistance be given to small‑business concerns to enable them 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.
(b) It shall be the duty of the Administration, and it is hereby empowered—
(l) to assist small‑business concerns to obtain Government contracts for research and development;
(2) to assist small‑business concerns to obtain the benefits of research and development performed under Government contracts or at Government expense;
(3) to provide technical assistance to small‑business concerns to accomplish the purposes of this section; and
(4) to 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 small business innovation research programs and small business technology transfer programs;
(5) to coordinate with participating agencies a schedule for release of SBIR and STTR solicitations, and to prepare a master release schedule so as to maximize small businesses' opportunities to respond to solicitations;
(6) to independently survey and monitor the operation of SBIR and STTR programs within participating Federal agencies; and
(7) to report not less than annually to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives, on the SBIR and STTR programs of the Federal agencies and the Administration's information and monitoring efforts related to the SBIR programs, including the data on output and outcomes collected pursuant to subsections (g)(10) and (o)(9) , and (o)(15), the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns under each of the SBIR and STTR programs, and a description of the extent to which Federal agencies are providing in a timely manner information needed to maintain the database described in subsection (k).
(c) The Administration is authorized to consult and cooperate with all Government agencies and to make studies and recommendations to such agencies, and such agencies are authorized and directed to cooperate with the Administration in order to carry out and to accomplish the purposes of this section.
(d) (l) The Administrator is authorized to consult with representatives of small‑business concerns with a view to assisting and encouraging such firms to undertake joint programs for research and development carried out through such corporate or other mechanism as may be most appropriate for the purpose. Such joint programs may, among other things, include the following purposes:
(A) to construct, acquire, or establish laboratories and other facilities for the conduct of research;
(B) to undertake and utilize applied research;
(C) to collect research information related to a particular industry and disseminate it to participating members;
(D) to conduct applied research on a protected, proprietary, and contractual basis with member or nonmember firms, Government agencies, and others;
(E) to prosecute applications for patents and render patent services for participating members; and
(F) to negotiate and grant licenses under patents held under the joint program, and to establish corporations designed to exploit particular patents obtained by it.
(2) The Administrator may, after consultation with the Attorney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, approve any agreement between small‑business firms providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free enterprise system and the economy of the Nation. The Administrator or the Attorney General may at any time withdraw his approval of the agreement and the joint program of research and development covered thereby, if he finds that the agreement or the joint program carried on under it is no longer in the best interests of the competitive free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval intended to be within the coverage of this subsection, and a copy of any modification or withdrawal of approval, shall be published in the Federal Register. The authority conferred by this subsection on the Administrator shall not be delegated by him.
(3) No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator under this subsection, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act. Upon publication in the Federal Register of the notice of withdrawal of his approval of the agreement granted under this subsection, either by the Administrator or by the Attorney General, the provisions of this subsection shall not apply to any subsequent act or omission to act by reason of such agreement or approval.
(e) For the purpose of this section—
(1) the term "extramural budget" means the sum of the total obligations minus amounts obligated for such activities by employees of the agency in or through Government‑owned, Government‑ operated facilities, except that for the Department of Energy it shall not include amounts obligated for atomic energy defense programs solely for weapons activities or for naval reactor programs, and except that for the Agency for International Development it shall not include amounts obligated solely for general institutional support of international research centers or for grants to foreign countries;
(2) the term "Federal agency" means an executive agency as defined in section 105 of title 5, United States Code, or a military department as defined in section 102 of such title, except that it does not include any agency within the Intelligence Community (as the term is defined in section 3.4(f) of Executive Order 12333 or its successor orders);
(3) the term "funding agreement" means any contract, grant, or cooperative agreement entered into between any Federal agency and any small business for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government;
(4) the term "Small Business Innovation Research Program" or "SBIR" means a program under which a portion of a Federal agency's research or research and development effort is reserved for award to small business concerns through a uniform process having ‑‑
(A) a first phase for determining, insofar as possible, the scientific and technical merit and feasibility of ideas that appear to have commercial potential, as described in subparagraph (B), submitted pursuant to SBIR program solicitations;
(B) a second phase, to further develop proposals which meet particular program needs, in which awards shall be made based on the scientific and technical merit and feasibility of the proposals, as evidenced by the first phase, considering, among other things, the proposal's commercial potential, as evidenced by—
(i) the small business concern's record of successfully commercializing SBIR or other research;
(ii) the existence of second phase funding commitments from private sector or non-SBIR funding sources;
(iii) the existence of third phase, follow-on commitments for the subject of the research; and
(iv) the presence of other indicators of the commercial potential of the idea; and
(C) where appropriate, a third phase—
(i) in which commercial applications of SBIR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-SBIR Federal funding awards; or
(ii) for which awards from non-SBIR Federal 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;
(5) the term "research" or "research and development" means any activity which is (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically 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;
(6) the term "Small Business Technology Transfer Program" or "STTR" 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 first 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 second phase, to further develop proposed ideas to meet particular program needs, in which awards shall be made based on the scientific, technical, and commercial merit and feasibility of the idea, as evidenced by the first phase and by other relevant information; and
(C) where appropriate, a third phase—
(i) in which commercial applications of STTR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-STTR Federal funding awards; and
(ii) for which awards from non-STTR 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;
(7) the term "cooperative research and development" means research or research and development conducted jointly by a small business concern and a research institution in which not less than 40 percent of the work is performed by the small business concern, and not less than 30 percent of the work is performed by the research institution; and
(8) the term "research institution" means a nonprofit institution, as defined in section 4(5) of the Stevenson-Wydler Technology Innovation Act of 1980, and includes federally funded research and development centers, as identified by the National Scientific Foundation in accordance with the governmentwide Federal Acquisition Regulation issued in accordance with section 35(c)(1) of the Office of Federal Procurement Policy Act (or any successor regulation thereto).
(f) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.—
(1) REQUIRED EXPENDITURE AMOUNTS.—Each Federal agency which has an extramural budget for research or research and development in excess of $100,000,000 for fiscal year 1992, or any fiscal year thereafter, shall expend with small business concerns—
(A) not less than 1.5 percent of such budget in each of fiscal years 1993 and 1994;
(B) not less than 2.0 percent of such budget in each of fiscal years 1995 and 1996; and
(C) not less than 2.5 percent of such budget in each fiscal year thereafter,
specifically in connection with SBIR programs which meet the requirements of this section, policy directives, and regulations issued under this section.
(2) LIMITATIONS.—A Federal agency shall not—
(A) use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses; or
(B) make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentages specified in paragraph (1).
(3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Funding agreements with small business concerns for research or research and development which result from competitive or single source selections other than an SBIR program shall not be considered to meet any portion of the percentage requirements of paragraph (1).
(g) Each Federal agency required by subsection (f) to establish a small business innovation research program shall, in accordance with this Act and regulations issued hereunder—
(1) unilaterally determine categories of projects to be in its SBIR program;
(2) issue small business innovation research solicitations in accordance with a schedule determined cooperatively with the Small Business Administration;
(3) unilaterally determine research topics within the agency's SBIR 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 (or its successor) in the 1991 report required under section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976, and in subsequent reports issued under that authority; or
(B) the Secretary of Defense, in the 1992 report issued in accordance with section 2522 of title 10, United States Code, and in subsequent reports issued under that authority;
(4) unilaterally receive and evaluate proposals resulting from SBIR proposals;
(5) subject to subsection (l), unilaterally select awardees for its SBIR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6) administer its own SBIR funding agreements (or delegate such administration to another agency);
(7) make payments to recipients of SBIR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, 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 such requirements;
(8) make an annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(9) include, as part of its annual performance plan as required by subsections (a) and (b) of section 1115 of title 31, United States Code, a section on its SBIR program, and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives; and
(10) collect, and maintain in a common format in accordance with subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k).
(h) In addition to the requirements of subsection (f), each Federal agency which has a budget for research or research and development in excess of $20,000,000 for any fiscal year beginning with fiscal year 1983 or subsequent fiscal year shall establish goals specifically for funding agreements for research or research and development to small business concerns, and no goal established under this subsection shall be less than the percentage of the agency's research or research and development budget expended under funding agreements with small business concerns in the immediately preceding fiscal year.
(i) ANNUAL REPORTING.—
(1) IN GENERAL.—Each Federal agency required by this section to have an SBIR program or to establish goals shall report annually to the Small Business Administration the number of awards pursuant to grants, contracts, or cooperative agreements over $10,000 in amount and the dollar value of all such awards, identifying SBIR awards and comparing the number and amount of such awards with awards to other than small business concerns.
(2) CALCULATION OF EXTRAMURAL BUDGET.—
(A) METHODOLOGY.—Not later than 4 months after the date of enactment of each appropriations Act for a Federal agency required by this section to have an SBIR program, the Federal agency shall submit to the Administrator a report, which shall include a description of the methodology used for calculating the amount of the extramural budget of that Federal agency.
(B) ADMINISTRATOR’S ANALYSIS.—The Administrator shall include an analysis of the methodology received from each Federal agency referred to in subparagraph (A) in the report required by subsection (b)(7).
(j) (1) POLICY DIRECTIVES.—The Small Business Administration, after consultation with the Administrator of the Office of Federal Procurement Policy, the Director of the Office of Science and Technology Policy, and the Intergovernmental Affairs Division of the Office of Management and Budget, shall, within one hundred and twenty days of the enactment of the Small Business Innovation Development Act of 1982, issue policy directives for the general conduct of the SBIR programs within the Federal Government, including providing for—
(A) simplified, standardized, and timely SBIR solicitations;
(B) a simplified, standardized funding process which provides for
(i) the timely receipt and review of proposals;
(ii) outside peer review for at least phase two proposals, if appropriate;
(iii) protection of proprietary information provided in proposals;
(iv) selection of awardees;
(v) retention of rights in data generated in the performance of the contract by the small business concern;
(vi) transfer of title to property provided by the agency to the small business concern if such a transfer would be more cost effective than recovery of the property by the agency;
(vii) cost sharing; and
(viii) cost principles and payment schedules;
(C) exemptions from the regulations under paragraph (2) if national security or intelligence functions clearly would be jeopardized;
(D) minimizing regulatory burden associated with participation in the SBIR program for the small business concern which will 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;
(E) simplified, standardized, and timely annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(F) standardized and orderly withdrawal from program participation by an agency having a SBIR program; at the discretion of the Administration, such directives may require a phased withdrawal over a period of time sufficient in duration to minimize any adverse impact on small business concerns; and
(G) the voluntary participation in a SBIR program by a Federal agency not required to establish such a program pursuant to subsection (f).
(2) MODIFICATIONS.--Not later than 90 days after the enactment of the Small Business Research and Development Enhancement Act of 1992, the Administrator shall modify the policy directives issued pursuant to this subsection to provide for—
(A) retention by a small business concern of the rights to data generated by the concern in the performance of an SBIR award for a period of not less than 4 years;
(B) continued use by a small business concern participating in the third phase of the SBIR program, as a directed bailment, of any property transferred by a Federal agency to the small business concern in the second phase of an SBIR program for a period of not less than 2 years, beginning on the initial date of the concern's participation in the third phase of such program;
(C) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an SBIR program enters into follow-on non-SBIR funding agreements with the small business concern for such research, development, or production;
(D) an increase to $100,000 in the first phase of an SBIR program, and to $750,000 in the second phase of an SBIR program, and an adjustment of such amounts once every 5 years to reflect economic adjustments and programmatic considerations;
(E) a process for notifying the participating SBIR agencies and potential SBIR participants of the 1991, 1992, and the current critical technologies, as identified—
(i) by the National Critical Technologies Panel (or its successor), in accordance with section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976; or
(ii) by the Secretary of Defense, in accordance with section 2522 of title 10, United States Code;
(F) enhanced outreach efforts to increase the participation of socially and economically disadvantaged small business concerns, as defined in section 8(a)(4), and the participation of small businesses that are 51 percent owned and controlled by women in technological innovation and in SBIR programs, including the third phase of such programs, and the collection of data to document such participation;
(G) technical and programmatic guidance to encourage agencies to develop gap-funding programs to address the delay between an award for the first phase of an SBIR program and the application for and extension of an award for the second phase of such program;
(H) procedures to ensure that a small business concern that submits a proposal for a funding agreement for the first phase of an SBIR program and that has received more than 15 second phase SBIR awards during the preceding 5 fiscal years is able to demonstrate the extent to which it was able to secure third phase funding to develop concepts resulting from previous second phase SBIR awards; and
(I) procedures to ensure that agencies participating in the SBIR program retain the information submitted under subparagraph (H) at least until the General Accounting Office submits the report required under section 105 of the Small Business Research and Development Enhancement Act of 1992.
(3) ADDITIONAL MODIFICATIONS.—Not later than 120 days after the date of enactment of the Small Business Innovation Research Program Reauthorization Act of 2000, the Administrator shall modify the policy directives issued pursuant to this subsection—
(A) to clarify that the rights provided for under paragraph (2)(A) apply to all Federal funding awards under this section, including the first phase (as described in subsection (e)(4)(A)), the second phase (as described in subsection (e)(4)(B)), and the third phase (as described in subsection (e)(4)(C));
(B) to provide for the requirement of a succinct commercialization plan with each application for a second phase award that is moving toward commercialization;
(C) to require agencies to report to the Administration, not less frequently than annually, all instances in which an agency pursued research, development, or production of a technology developed by a small business concern using an award made under the SBIR program of that agency, and determined that it was not practicable to enter into a follow-on non-SBIR program funding agreement with the small business concern, which report shall include, at a minimum—
(i) the reasons why the follow-on funding agreement with the small business concern was not practicable;
(ii) the identity of the entity with which the agency contracted to perform the research, development, or production; and
(iii) a description of the type of funding agreement under which the research, development, or production was obtained; and
(D) to implement subsection (v), including establishing standardized procedures for the provision of information pursuant to subsection (k)(3).
(k) DATABASE.—
(1) PUBLIC DATABASE.—Not later than 180 days after the date of enactment of the Small Business Innovation Research Program Reauthorization Act of 2000, the Administrator shall develop, maintain, and make available to the public a searchable, up-to-date, electronic database that includes—
(A) the name, size, location, and an identifying number assigned by the Administrator, of each small business concern that has received a first phase or second phase SBIR or STTR award from a Federal agency;
(B) a description of each first phase or second phase SBIR or STTR award received by that small business concern, including—
(i) an abstract of the project funded by the award, excluding any proprietary information so identified by the small business concern;
(ii) the Federal agency making the award; and
(iii) the date and amount of the award;
(C) an identification of any business concern or subsidiary established for the commercial application of a product or service for which an SBIR or STTR award is made; and
(D) information regarding mentors and Mentoring Networks, as required by section 35(d).
(E) with respect to assistance under the STTR program only—
(i) whether the small business concern or the research institution initiated their collaboration on each assisted STTR project;
(ii) whether the small business concern or the research institution originated any technology relating to the assisted STTR project;
(iii) 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
(iv) how the proceeds from commercialization, marketing, or sale of technology resulting from each assisted STTR project were allocated (by percentage) between the small business concern and the research institution.
(2) GOVERNMENT DATABASE.—Not later than 180 days after the date of enactment of the Small Business Innovation Research Program Reauthorization Act of 2000, the Administrator, in consultation with Federal agencies required to have an SBIR program pursuant to subsection (f)(1), shall develop and maintain a database to be used solely for SBIR program evaluation that—
(A) contains for each second phase award made by a Federal agency—
(i) information collected in accordance with paragraph (3) on revenue from the sale of new products or services resulting from the research conducted under the award;
(ii) information collected in accordance with paragraph (3) on additional investment from any source, other than first phase or second phase SBIR or STTR awards, to further the research and development conducted under the award; and
(iii) any other information received in connection with the award that the Administrator, in conjunction with the SBIR program managers of Federal agencies, considers relevant and appropriate;
(B) includes any narrative information that a small business concern receiving a second phase award voluntarily submits to further describe the outputs and outcomes of its awards;
(C) includes for each applicant for a first phase or second phase award that does not receive such an award—
(i) the name, size, and location, and an identifying number assigned by the Administration;
(ii) an abstract of the project; and
(iii) the Federal agency to which the application was made;
(D) includes any other data collected by or available to any Federal agency that such agency considers may be useful for SBIR program evaluation; and
(E) is available for use solely for program evaluation purposes by the Federal Government or, in accordance with policy directives issued by the Administration, by other authorized persons who are subject to a use and nondisclosure agreement with the Federal Government covering the use of the database.
(3) UPDATING INFORMATION FOR DATABASE.—
(A) IN GENERAL.—A small business concern applying for a second phase award under this section shall be required to update information in the database established under this subsection for any prior second phase award received by that small business concern. In complying with this paragraph, a small business concern may apportion sales or additional investment information relating to more than one second phase award among those awards, if it notes the apportionment for each award.
(B) ANNUAL UPDATES UPON TERMINATION.—A small business concern receiving a second phase award under this section shall—
(i) update information in the database concerning that award at the termination of the award period; and
(ii) be requested to voluntarily update such information annually thereafter for a period of 5 years.
(4) PROTECTION OF INFORMATION.—Information provided under paragraph (2) shall be considered privileged and confidential and not subject to disclosure pursuant to section 552 of title 5, Untied States Code.
(5) RULE OF CONSTRUCTION.—Inclusion of information in the database under this subsection shall not be considered to be publication for purposes of subsection (a) or (b) of section 102 of title 35, United States Code.
(l) REPORTING OF AWARDS MADE FROM SINGLE PROPOSAL, TO MULTIPLE AWARD WINNERS, OR TO CRITICAL TECHNOLOGY TOPICS--
(1) SINGLE PROPOSAL.—If a Federal agency required to establish an SBIR program under subsection (f) makes an award with respect to an SBIR solicitation topic or subtopic for which the agency received only 1 proposal, the agency shall provide written justification for making the award in its next quarterly report to the Administration and in the agency's next annual report required under subsection (g)(8).
(2) MULTIPLE AWARDS.—An agency referred to in paragraph (1) shall include in its next annual report required under subsection (g)(8) an accounting of the awards the agency has made for the first phase of an SBIR program during the reporting period to entities that have received more than 15 awards for the second phase of an SBIR program during the preceding 5 fiscal years.
(3) CRITICAL TECHNOLOGY AWARDS.—An agency referred to in paragraph (1) shall include in its next annual report required under subsection (g)(8) an accounting of the number of awards it has made to critical technology topics, as defined in subsection (g)(3), including an identification of the specific critical technologies topics, and the percentage by number and dollar amount of the agency's total SBIR awards to such critical technology topics.
(m) TERMINATION.—The authorization to carry out the Small Business Innovation Research Program under this section shall terminate on September 30, 2008.
(n) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGENCIES.—
(1) REQUIRED EXPENDITURE AMOUNTS.—
(A) IN GENERAL.—With respect to each fiscal year through fiscal year 2009, each Federal agency that has an extramural budget for research, or research and development, in excess of $1,000,000,000 for that fiscal year, shall expend with small business concerns not less than the percentage of that extramural budget specified in subparagraph (B), specifically in connection with STTR programs that meet the requirements of this section and any policy directives and regulations issued under this section.
(B) EXPENDITURE AMOUNTS.—The percentage of the extramural budget required to be expended by an agency in accordance with subparagraph (A) shall be—
(i) 0.15 percent for each fiscal year through fiscal year 2003; and
(ii) 0.3 percent for fiscal year 2004 and each fiscal year thereafter.
(2) LIMITATIONS.—A Federal agency shall not—
(A) use any of its STTR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses, or, in the case of a small business concern or a research institution, costs associated with salaries, expenses, and administrative overhead (other than those direct or indirect costs allowable under guidelines of the Office of Management and Budget and the governmentwide Federal Acquisition Regulation issued in accordance with section 25(c)(1) of the Office of Federal Procurement Policy Act); or
(B) make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentage specified in paragraph (1).
(3) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.—Funding agreements with small business concerns for research or research and development which result from competitive or single source selections other than an STTR program shall not be considered to meet any portion of the percentage requirements of paragraph (1).
(o) FEDERAL AGENCY STTR AUTHORITY.—Each Federal agency required to establish an STTR program in accordance with subsection (n) and regulations issued under this Act, shall—
(1) unilaterally determine categories of projects to be included in its STTR program;
(2) issue STTR solicitations in accordance with a schedule determined cooperatively with the Administration;
(3) unilaterally determine research topics within the agency's STTR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified—
(A) by the National Critical Technologies Panel (or its successor) in reports required under section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976; or
(B) by the Secretary of Defense, in accordance with section 2522 of title 10, United States Code;
(4) unilaterally receive and evaluate proposals resulting from STTR solicitations;
(5) unilaterally select awardees for its STTR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6) administer its own STTR funding agreements (or delegate such administration to another agency);
(7) make payments to recipients of STTR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, 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 the completion of such requirements;
(8) include, as part of its annual performance plan as required by subsections (a) and (b) of section 1115 of title 31, United States Code, a section on its STTR program, and shall submit such section to the Committee on Small Business of the Senate, and the Committee on Science and the Committee on Small Business of the House of Representatives;
(9) collect such data from awardees as is necessary to assess STTR program outputs and outcomes;
(10) submit an annual report on the STTR program to the Administration and the Office of Science and Technology Policy;
(11) adopt the agreement developed by the Administrator under subsection (w) as the agency’s model agreement for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(12) 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 (as defined in subsection (e)(8)) that participate in STTR agreements—
(A) are free from organizational conflicts of interests relative to the STTR program;
(B) do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and
(C) use outside peer review, as appropriate; and
(13) not later than July 31, 1993, develop procedures for assessing the commercial merit and feasibility of STTR proposals, as evidenced by—
(A) the small business concern's record of successfully commercializing STTR or other research;
(B) the existence of second phase funding commitments from private sector or non-STTR funding sources;
(C) the existence of third phase follow-on commitments for the subject of the research; and
(D) the presence of other indicators of the commercial potential of the idea.
(14) implement an outreach program to research institutions and small business concerns for the purpose of enhancing its STTR program, in conjunction with any such outreach done for purposes of the SBIR program; and
(15) collect, and maintain in a common format in accordance with subsection (v), such information from awardees as is necessary to assess the STTR program, including information necessary to maintain the database described in subsection (k).
(p) STTR POLICY DIRECTIVE.—
(1) ISSUANCE.—The Administrator shall issue a policy directive for the general conduct of the STTR programs within the Federal Government. Such policy directive shall be issued after consultation with—
(A) the heads of each of the Federal agencies required by subsection (n) to establish an STTR program;
(B) the Under Secretary of Commerce for
Intellectual Property and Director of the
(C) the Director of the Office of Federal Procurement Policy.
(2) CONTENTS.—The policy directive required by paragraph (1) shall provide for—
(A) simplified, standardized, and timely STTR solicitations;
(B) a simplified, standardized funding process that provides for—
(i) the timely receipt and review of proposals;
(ii) outside peer review, if appropriate;
(iii) protection of proprietary information provided in proposals;
(iv) selection of awardees;
(v) retention by a small business concern of the rights to data generated by the concern in the performance of an STTR award for a period of not less than 4 years;
(vi) continued use by a small business concern, as a directed bailment, of any property transferred by a Federal agency to the small business concern in the second phase of the STTR program for a period of not less than 2 years, beginning on the initial date of the concern's participation in the third phase of such program;
(vii) cost sharing;
(viii) cost principles and payment schedules; and
(ix) 1-year awards for the first phase of an STTR program, generally not to exceed $100,000 and 2-year awards for the second phase of an STTR program, generally not to exceed $750,000, greater or lesser amounts to be awarded at the discretion of the awarding agency, and shorter or longer periods of time to be approved at the discretion of the awarding agency where appropriate for a particular project;
(C) minimizing regulatory burdens associated with participation in STTR programs;
(D) guidelines for a model agreement, to be used by all agencies, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(E) procedures to ensure that—
(i) a recipient of an STTR award is a small business concern, as defined in section 3 and the regulations promulgated thereunder; and
(ii) such small business concern exercises management and control of the performance of the STTR funding agreement pursuant to a business plan providing for the commercialization of the technology that is the subject matter of the award; and
(F) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an STTR program enters into follow-on, non-STTR funding agreements with the small business concern for such research, development, or production.
(3) MODIFICATIONS.—Not later than 120 days after the date of enactment of this paragraph, the Administrator shall modify the policy directive issued pursuant to this subsection to clarify that the rights provided for under paragraph (2)(B)(v) apply to all Federal funding awards under this section, including the first phase (as described in subsection (e)(6)(A)), the second phase (as described in subsection (e)(6)(B)), and the third phase (as described in subsection (e)(6)(C)).
(q) DISCRETIONARY TECHNICAL ASSISTANCE.—
(1) IN GENERAL.—Each Federal agency required by this section to conduct an SBIR program may enter into an agreement with a vendor selected under paragraph (2) to provide small business concerns engaged in SBIR 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 such concerns in—
(A) making better technical decisions concerning such projects;
(B) solving technical problems which arise during the conduct of such projects;
(C) minimizing technical risks associated with such projects; and
(D) developing and commercializing new commercial products and processes resulting from such projects.
(2) VENDOR SELECTION.—Each agency may select a vendor to assist small business concerns to meet the goals listed in paragraph (1) for a term not to exceed 3 years. Such selection shall be competitive and shall utilize merit-based criteria.
(3) ADDITIONAL TECHNICAL ASSISTANCE.—
(A) FIRST PHASE.—Each agency referred to in paragraph (1) may provide services described in paragraph (1) to first phase SBIR award recipients in an amount equal to not more than $4,000, which shall be in addition to the amount of the recipient's award.
(B) SECOND PHASE.—Each agency referred to in paragraph (1) may authorize any second phase SBIR award recipient to purchase, with funds available from their SBIR awards, services described in paragraph (1), in an amount equal to not more than $4,000 per year.
(r) THIRD PHASE AGREEMENTS.—
(1) IN GENERAL.—In the case of a small business concern that is awarded a funding agreement for the second phase of an SBIR or STTR program, a Federal agency may enter into a third phase agreement with that business concern for additional work to be performed during or after the second phase period. The second phase funding agreement with the small business concern may, at the discretion of the agency awarding the agreement, set out the procedures applicable to third phase agreements with that agency or any other agency.
(2) DEFINITION.—In this subsection, the term "third phase agreement" means a follow-on, non-SBIR or non-STTR funded contract as described in paragraph (4)(C) or paragraph (6)(C) of subsection (e).
(3) INTELLECTUAL PROPERTY RIGHTS.—Each
funding agreement under an SBIR or STTR program shall include provisions
setting forth the respective rights of the
(s) OUTREACH.
(1) DEFINITION OF ELIGIBLE STATE.—In this subsection, the term “eligible State” means a State—
(A) if the total value of contracts awarded to the State during fiscal year 1995 under this section was less than $5,000,000; and
(B) that certifies to the Administration described in paragraph (2) that the State will, upon receipt of assistance under this subsection, provide matching funds from non-Federal sources in an amount that is not less than 50 percent of the amount provided under this subsection.
(2) PROGRAM AUTHORITY.—Of amounts made available to carry out this section for each of the fiscal years 2000 through 2005 the Administrator may expend with eligible States not more than $2,000,000 in each such fiscal year in order to increase the participation of small business concerns located in those States in the programs under this section.
(3) AMOUNT OF ASSISTANCE.—The amount of assistance provided to an eligible State under this subsection in any fiscal year—
(A) shall be equal to twice the total amount of matching funds from non-Federal sources provided by the State; and
(B) shall not exceed $100,000.
(4) USE OF ASSISTANCE.—Assistance provided to an eligible State under this subsection shall be used by the State, in consultation with State and local departments and agencies, for programs and activities to increase the participation of small business concerns located in the State in the programs under this section, including—
(A) the establishment of quantifiable performance goals, including goals relating to—
(i) the number of program awards under this section made to small business concerns in the State; and
(ii) the total amount of Federal research and development contracts awarded to small business concerns in the State;
(B) the provision of competition outreach support to small business concerns in the State that are involved in research and development; and
(C) the development and dissemination of educational and promotional information relating to the programs under this section to small business concerns in the State.
(t) INCLUSION
IN STRATEGIC PLANS.—Program information relating to the SBIR and STTR programs
shall be included by each Federal agency in any update or revision required of
the Federal agency under section 306(b) of title 5,
(u) COORDINATION OF TECHNOLOGY DEVELOPMENT PROGRAMS.—
(1) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.—In this subsection, the term “technology development program” means—
(A) 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);
(B) the Defense Experimental Program to Stimulate Competitive Research of the Department of Defense;
(C) the Experimental Program to Stimulate Competitive Research of the Department of Energy;
(D) the Experimental Program to Stimulate Competitive Research of the Environmental Protection Agency;
(E) the Experimental Program to Stimulate Competitive Research of the National Aeronautics and Space Administration;
(F) the Institutional Development Award Program of the National Institutes of Health; and
(G) the National Research Initiative Competitive Grants Program of the Department of Agriculture.
(2) COORDINATION REQUIREMENTS.—Each Federal agency that is subject to subsection (f) and that has established a technology development program may, in each fiscal year, review for funding under that technology development program—
(A) any proposal to provide outreach and assistance to 1 or more small business concerns interested in participating in the SBIR program, including any proposal to make a grant or loan to a company to pay a portion or all of the cost of developing an SBIR proposal, from an entity, organization, or individual located in—
(i) a State that is eligible to participate in that program; or
(ii) a State described in paragraph (3); or
(B) any proposal for the first phase 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—
(i) a State that is eligible to participate in a technology development program; or
(ii) a State described in paragraph (3).
(3) ADDITIONALLY ELIGIBLE STATE.—A State referred to in subparagraph (A)(ii) or (B)(ii) of paragraph (2) is a State in which the total value of contracts awarded to small business concerns under all SBIR programs is less than the total value of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal year 2000, based on the most recent statistics compiled by the Administrator.
(v) SIMPLIFIED REPORTING REQUIREMENTS.—The Administrator shall work with the Federal agencies required by this section to have an SBIR or STTR program to standardize reporting requirements for the collection of data from SBIR or STTR applicants and awardees, including data for inclusion in the database under subsection (k), taking into consideration the unique needs of each agency, and to the extent possible, permitting the updating of previously reported information by electronic means. Such requirements shall be designed to minimize the burden on small businesses.
(w) STTR MODEL AGREEMENT FOR INTELLECTUAL PROPERTY RIGHTS.—
(1) IN GENERAL.—The Administrator shall promulgate regulations establishing a single model agreement for use in the STTR program that allocates between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization.
(2) OPPORTUNITY FOR COMMENT.—In promulgating regulations under paragraph (1), the Administrator shall provide to affected agencies, small business concerns, research institutions, and other interested parties the opportunity to submit written comments.
§ l0. (a) The Administration shall, as soon as practicable each fiscal year make a comprehensive annual report to the President, the President of the Senate, the Senate Select Committee on Small Business, and the Speaker of the House of Representatives. Such report shall include a description of the state of small business in the Nation and the several States, and a description of the operations of the Administration under this chapter, including, but not limited to, 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 the Administration during the previous fiscal year. Such report shall contain recommendations for strengthening or improving such programs, or, when necessary or desirable to implement more effectively congressional policies and proposals, for establishing new or alternative programs. In addition, such report shall include the names of the business concerns to whom contracts are let and for whom financing is arranged by the Administration, together with the amounts involved. With respect to minority small business concerns, the report shall include the proportion of loans and other assistance under this Act provided to such concerns, the goals of the Administration for the next fiscal year with respect to such concerns, and recommendations for improving assistance to minority small business concerns under this Act.
(b) The Administration shall make a report to the President, the President of the Senate, and the Speaker of the House of Representatives, to the Senate Select Committee on Small Business, and to the Committee on Small Business of the House of Representatives, as soon as practicable each fiscal year, showing as accurately as possible for each such period the amount of funds appropriated to it that it has expended in the conduct of each of its principal activities such as lending, procurement, contracting, and providing technical and managerial aids. Such report shall contain the number and amount of loans, the number of applications, the total amount applied for, and the number and amount of defaults for each type of equipment or service for which loans are authorized by this Act. Such report shall provide such information separately on each type of loan made under paragraphs (10) through (15) of section 7(a) and separately for all other loan programs. In addition, the information on loans shall be supplied on a monthly basis to the Committee on Small Business of the Senate and the Committee on Small Business of the House of Representatives.
(c) [Repealed].
(d) For the purpose of aiding in carrying out the national policy to insure that a fair proportion of the total purchases and contracts for property and services for the Government be placed with small‑business enterprises, and to maintain and strengthen the overall economy of the Nation, the Department of Defense shall make an annual report to the Committees on Small Business of the Senate and the House of Representatives showing the amount of funds appropriated to the Department of Defense which have been expended, obligated, or contracted to be spent with small business concerns and the amount of such funds expended, obligated, or contracted to be spent with firms other than small business in the same fields of operation; and such reports shall show separately the funds expended, obligated, or contracted to be spent for basic and applied scientific research and development.
(e) The Administration and the Inspector General of the Administration shall retain all correspondence, records of inquiries, memoranda, reports, books, and records, including memoranda as to all investigations conducted by or for the Administration, for a period of at least one year from the date of each thereof, and shall at all times keep the same available for inspection and examination by the Senate Select Committee on Small Business and the Committee on Small Business of the House of Representatives, or their duly authorized representatives.
(2) The Committee on Small Business of either the Senate or the House of Representatives may request that the Office of the Inspector General of the Administration conduct an investigation of any program or activity conducted under the authority of section 7(j) or 8(a). Not later than thirty days after the receipt of such a request, the Inspector General shall inform the committee, in writing, of the disposition of the request by such office.
(f) To the extent deemed necessary by the Administrator to protect and preserve small‑business interests, the Administration shall consult and cooperate with other departments and agencies of the Federal Government in the formulation by the Administration of policies affecting small‑business concerns. When requested by the Administrator, each department and agency of the Federal Government shall consult and cooperate with the Administration in the formulation by the Administration of policies affecting small‑business concerns. When requested by the Administrator, each department and agency of the Federal Government shall consult and cooperate with the Administration in the formulation by such department or agency of policies affecting small‑ business concerns, in order to insure that small‑business interests will be recognized, protected, and preserved. This subsection shall not require any department or agency to consult or cooperate with the Administration in any case where the head of such department or agency determines that such consultation or cooperation would unduly delay action which must be taken by such department or agency to protect the national interest in an emergency.
(g) The Administration shall transmit, not later than December 3l of each year, to the Senate Select Committee on Small Business and Committee on Small Business of the House of Representatives a sealed report with respect to—
(l) complaints alleging illegal conduct by employees of the Administration which were received or acted upon by the Administration during the preceding fiscal year; and
(2) investigations undertaken by the Administration, including external and internal audits and security and investigation reports.
(h) The Administration shall transmit, not later than March 31 of each year, to the Committees on Small Business of the Senate and House of Representatives a report on the secondary market operations during the preceding calendar year. This report shall include, but not be limited to, (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 in (1) through (7) to assess small businesses' access to capital at reasonable rates and terms as a result of secondary market operations.
§ 11. (a) The President is authorized to consult with representatives of small‑business concerns with a view to encouraging the making by such persons with the approval of the President of voluntary agreements and programs to further the objectives of this Act.
(b) No act or omission to act pursuant to this Act which occurs while this Act is in effect, if requested by the President pursuant to a voluntary agreement or program approved under subsection (a) of this section and found 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 of the United States. A copy of each such request intended to be within the coverage of this section, and any modification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the Federal Register unless publication thereof would, in the opinion of the President, endanger the national security.
(c) The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chairman of the Federal Trade Commission not less than ten days before making any request or finding thereunder, and (3) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.
(d) Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subsequent act, or omission to act, by reason of such finding or request.
§ 12. The President may transfer to the Administration any functions, powers, and duties of any department or agency which relate primarily to small‑business problems. In connection with any such transfer, the President may provide for appropriate transfers of records, property, necessary personnel, and unexpended balances of appropriations and other funds available to the department or agency from which the transfer is made.
§ 13. No loan shall be made or equipment, facilities, or services furnished by the Administration under this Act to any business enterprise unless the owners, partners, or officers of such business enterprise (1) certify to the Administration the names of any attorneys, agents, or other persons engaged by or on behalf of such business enterprise for the purpose of expediting applications made to the Administration for assistance of any sort, and the fees paid or to be paid to any such persons; (2) execute an agreement binding any such business enterprise for a period of two years after any assistance is rendered by the Administration to such business enterprise, to refrain from employing, tendering any office or employment to, or retaining for professional service, any person, who, on the date such assistance or any part thereof was rendered, or within one year prior thereto, shall have served as an officer, attorney, agent, or employee of the Administration occupying a position or engaging in activities which the Administration shall have determined involve discretion with respect to the granting of assistance under this Act; and (3) furnish the names of lending institutions to which such business enterprise has applied for loans together with dates, amounts, terms, and proof of refusal.
§ 14. To the fullest extent the Administration deems practicable, it shall make a fair charge for the use of Government‑owned property and make and let contracts on a basis that will result in a recovery of the direct cost incurred by the Administration.
§ 15. (a) To effectuate the purposes of this Act, small business concerns within the meaning of this Act shall receive any award or contract or any part thereof, and be awarded any contract for the sale of Government property, as to which it is determined by the Administration and the contracting procurement or disposal agency (1) to be in the interest of maintaining or mobilizing the Nation's full productive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Government in each industry category are placed with small‑business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Government property be made to small‑business concerns; but nothing contained in this Act shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Government or any agency thereof. These determinations may be made for individual awards or contracts or for classes of awards or contracts. If a proposed procurement includes in its statement of work goods or services currently being performed by a small business, and if the proposed procurement is in a quantity or estimated dollar value the magnitude of which renders small business prime contract participation unlikely, or if a proposed procurement for construction seeks to package or consolidate discrete construction projects, or the solicitation involves an unnecessary or unjustified bundling of contract requirements, as determined by the Administration, the Procurement Activity shall provide a copy of the proposed procurement to the Procurement Activity's Small Business Procurement Center Representative at least 30 days prior to the solicitation's issuance along with a statement explaining (1) why the proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement, (2) why delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government, (3) why the proposed acquisition cannot be offered so as to make small business participation likely, (4) why construction cannot be procured as separate discrete projects, or (5) why the agency has determined that the bundled contract (as defined in section 3(o)) is necessary and justified. The thirty‑day notification process shall occur concurrently with other processing steps required prior to issuance of the solicitation. Within 15 days after receipt of the proposed procurement and accompanying statement, if the Procurement Center Representative believes that the procurement as proposed will render small business prime contract participation unlikely, the Representative shall recommend to the Procurement Activity alternative procurement methods which would increase small business prime contracting opportunities. Whenever the Administration and the contracting procurement agency fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Administrator. For purposes of clause (3) of the first sentence of this subsection, an industry category is a discrete group of similar goods and services. Such groups shall be determined by the Administration in accordance with the definition of a “United States industry” under the North American Industry Classification System, as established by the Office of Management and Budget, except that the Administration shall limit such an industry category to a greater extent than provided under such classification codes if the Administration receives evidence indicating that further segmentation for purposes of this paragraph is warranted due to special capital equipment needs or special labor or geographic requirements or to recognize a new industry. A market for goods or services may not be segmented under the preceding sentence due to geographic requirements unless the Government typically designates the area where work for contracts for such goods or services is to be performed and Government purchases comprise the major portion of the entire domestic market for such goods or services and, due to the fixed location of facilities, high mobilization costs, or similar economic factors, it is unreasonable to expect competition from business concerns located outside of the general areas where such concerns are located. A contract may not be awarded under this subsection if the award of the contract would result in a cost to the awarding agency which exceeds a fair market price.
(b) With respect to any work to be performed the amount of which would exceed the maximum amount of any contract for which a surety may be guaranteed against loss under section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694 (b)), the contracting procurement agency shall, to the extent practicable, place contracts so as to allow more than one small business concern to perform such work.
(c) (1) As used in this subsection:
(A) The term "Committee" means the Committee for Purchase from the Blind and Other Severely Handicapped established under the first section of the Act entitled "An Act to create a Committee on Purchases of Blind‑made Products, and for other purposes", approved June 25, 1938 (41 U.S.C. 46).
(B) The term "public or private organization for the handicapped" has the same meaning given such term in section 3(e).
(C) The term "handicapped individual" has the same meaning given such term in section 3(f).
(2) (A) During fiscal year 1995, public or private organizations for the handicapped shall be eligible to participate in programs authorized under this section in an aggregate amount not to exceed $40,000,000.
(B) None of the amounts authorized for participation by subparagraph (A) may be placed on the procurement list maintained by the Committee pursuant to section 2 of the Act entitled "An Act to create a Committee on Purchases of Blind-made Products, and for other purposes", approved June 25, 1938 (41 U.S.C. 47).
(3) The Administrator shall monitor and evaluate such participation.
(4) (A) Not later than ten days after the announcement of a proposed award of a contract by an agency or department to a public or private organization for the handicapped, a for‑profit small business concern that has experienced or is likely to experience severe economic injury as the result of the proposed award may file an appeal of the proposed award with the Administrator.
(B) If such a concern files an appeal of a proposed award under subparagraph (A) and the Administrator, after consultation with the Executive Director of the Committee, finds that the concern has experienced or is likely to experience severe economic injury as the result of the proposed award, not later than thirty days after the filing of the appeal, the Administration shall require each agency and department having procurement powers to take such action as may be appropriate to alleviate economic injury sustained or likely to be sustained by the concern.
(5) Each agency and department having procurement powers shall report to the Office of Federal Procurement Policy each time a contract subject to paragraph (2)(A) is entered into, and shall include in its report the amount of the next higher bid submitted by a for‑profit small business concern. The Office of Federal Procurement Policy shall collect data reported under the preceding sentence through the Federal procurement data system and shall report to the Administration which shall notify all such agencies and departments when the maximum amount of awards authorized under paragraph (2)(A) has been made during any fiscal year.
(6) For the purpose of this subsection, a contract may be awarded only if at least 75 per centum of the direct labor performed on each item being produced under the contract in the sheltered workshop or performed in providing each type of service under the contract by the sheltered workshop is performed by handicapped individuals.
(7) Agencies awarding one or more contracts to such an organization pursuant to the provisions of this subsection may use multiyear contracts, if appropriate.
(d) For purposes of this section priority shall be given to the awarding of contracts and the placement of subcontracts to small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas. Notwithstanding any other provision of law, total labor surplus area set‑asides pursuant to Defense Manpower Policy Number 4 (32A C.F.R. Chapter 1) or any successor policy shall be authorized if the Secretary or his designee specifically determines that there is a reasonable expectation that offers will be obtained from a sufficient number of eligible concerns so that awards will be made at reasonable prices. As soon as practicable and to the extent possible, in determining labor surplus areas, consideration shall be given to those persons who would be available for employment were suitable employment available. Until such definition reflects such number, the present criteria of such policy shall govern.
(e) PROCUREMENT STRATEGIES; CONTRACT BUNDLING—
(1) IN GENERAL.—To the maximum extent practicable, procurement strategies used by the various agencies having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers.
(2) MARKET RESEARCH—
(A) IN GENERAL.—Before proceeding with an acquisition strategy that could lead to a contract containing consolidated procurement requirements, the head of an agency shall conduct market research to determine whether consolidation of the requirements is necessary and justified.
(B) FACTORS.—For purposes of subparagraph (A), consolidation of the requirements may be determined as being necessary and justified if, as compared to the benefits that would be derived from contracting to meet those 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. Benefits described in the preceding sentence may include the following:
(i) Cost savings.
(ii) Quality improvements.
(iii) Reduction in acquisition cycle times.
(iv) Better terms and conditions.
(v) Any other benefits.
(C) REDUCTION OF COSTS NOT DETERMINATIVE.—The reduction of administrative or personnel costs alone shall not be a justification for bundling of contract requirements unless the cost savings are expected to be substantial in relation to the dollar value of the procurement requirements to be consolidated.
(3) STRATEGY SPECIFICATIONS.—If the head of a contracting agency determines that a proposed procurement strategy for a procurement involves a substantial bundling of contract requirements, the proposed procurement strategy shall—
(A) identify specifically the benefits anticipated to be derived from the bundling of contract requirements;
(B) set forth an assessment of the specific impediments to participation by small business concerns as prime contractors that result from the bundling of contract requirements and specify actions designed to maximize small business participation as subcontractors (including suppliers) at various tiers under the contract or contracts that are awarded to meet the requirements; and
(C) include a specific determination that the anticipated benefits of the proposed bundled contract justify its use.
(4) CONTRACT TEAMING.—In the case of a solicitation of offers for a bundled contract that is issued by the head of an agency, a small business concern may submit an offer that provides for use of a particular team of subcontractors for the performance of the contract. The head of the agency shall evaluate the offer in the same manner as other offers, with due consideration t the capabilities of all of the proposed subcontractors. If a small business concern teams under this paragraph, it shall not affect its status as a small business concern for any other purpose.
(f) [deleted].
(g) (1) The President shall annually establish Government‑wide goals for procurement contracts awarded to small business concerns, small business concerns owned and controlled by service disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women. The Government‑wide goal for participation by small business concerns shall be established at not less than 23 percent of the total value of all prime contract awards for each fiscal year. The Government-wide goal for participation by small business concerns owned and controlled by service-disabled veterans shall be established at not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year. The Government-wide goal for participation by qualified HUBZone small business concerns shall be established at not less than 1 percent of the total value of all prime contract awards for fiscal year 1999, not less than 1.5 percent of the total value of all prime contract awards for fiscal year 2000, not less than 2 percent of the total value of all prime contract awards for fiscal year 2001, not less than 2.5 percent of the total value of all prime contract awards for fiscal year 2002, and not less than 3 percent of the total value of all prime contract awards for fiscal year 2003 and each fiscal year thereafter. The Government‑wide goal for participation by small business concerns owned and controlled by socially and economically disadvantaged individuals shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year. The Government-wide goal for participation by small business concerns owned and controlled by women shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year. Notwithstanding the Government‑wide goal, each agency shall have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women to participate in the performance of contracts let by such agency. The Administration and the Administrator of the Office of Federal Procurement Policy shall, when exercising their authority pursuant to paragraph (2), insure that the cumulative annual prime contract goals for all agencies meet or exceed the annual Government‑wide prime contract goal established by the President pursuant to this paragraph.
(2) The head of each Federal agency shall, after consultation with the Administration, establish goals for the participation by small business concerns, by small business concerns owned and controlled by service-disabled veterans, by qualified HUBZone small business concerns, by small business concerns owned and controlled by socially and economically disadvantaged individuals, and by small business concerns owned and controlled by women in procurement contracts of such agency having a value of $25,000 or more. Goals established under this subsection shall be jointly established by the Administration and the head of each Federal agency and shall realistically reflect the potential of small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, and small business concerns owned and controlled by socially and economically disadvantaged individuals to perform such contracts and to perform subcontracts under such contracts. Whenever the Administration and the head of any Federal agency fail to agree on established goals, the disagreement shall be submitted to the Administrator of the Office of Federal Procurement Policy for final determination. For the purpose of establishing goals under this subsection, the head of each Federal agency shall make consistent efforts to annually expand participation by small business concerns from each industry category in procurement contracts of the agency, including participation by small business concerns owned and controlled by service-disabled veterans, by qualified HUBZone small business concerns, by small business concerns owned and controlled by socially and economically disadvantaged individuals and by small business concerns owned and controlled by women. The head of each Federal agency, in attempting to attain such participation, shall consider—
(A) contracts awarded as the result of unrestricted competition; and
(B) contracts awarded after competition restricted to eligible small business concerns under this section and under the program established under section 8(a).
(h) (1) At the conclusion of each fiscal year, the head of each Federal agency shall report to the Administration on the extent of participation by small business concerns, small business concerns owned and controlled by veterans (including service-disabled veterans), qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women in procurement contracts of such agency. Such reports shall contain appropriate justifications for failure to meet the goals established under subsection (g) of this section.
(2) The Administration shall annually compile and analyze the reports submitted by the individual agencies pursuant to paragraph (1) and shall submit them to the President and the Congress. The Administration's submission to the President shall include the following:
(A) The Government‑wide goals for participation by small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women and the performance in attaining such goals.
(B) The goals in effect for each agency and the agency's performance in attaining such goals.
(C) An analysis of any failure to achieve the Government‑wide goals or any individual agency goals and the actions planned by such agency (and approved by the Administration) to achieve the goals in the succeeding fiscal year.
(D) The number and dollar value of contracts awarded to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women through—
(i) noncompetitive negotiation,
(ii) competition restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals,
(iii) competition restricted to small business concerns, and
(iv) unrestricted competitions,
for each agency and on a Government‑wide basis.
(E) The number and dollar value of subcontracts awarded to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women.
(F) The number and dollar value of prime contracts and subcontracts awarded to small business concerns owned and controlled by women.
(3) The President shall include the information required by paragraph (2) in each annual report to the Congress on the state of small business prepared pursuant to section 303(a) of the Small Business Economic Policy Act of 1980 (15 U.S.C. 631b(a)).
(i) Nothing in this Act or any other provision of law precludes exclusive small business set‑asides for procurements of architectural and engineering services, research, development, test and evaluation, and each Federal agency is authorized to develop such set‑asides to further the interests of small business in those areas.
(j) (1) Each contract for the purchase of goods and services that has an anticipated value greater than $2,500 but not greater than $100,000 shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and are competitive with regard to the quality and delivery of the goods or services being purchased.
(2) in carrying out paragraph (1), a contracting officer shall consider a responsive offer timely received from an eligible small business offeror.
(3) Nothing in paragraph (1) shall be construed as precluding an award of a contract with a value not greater than $100,000 under the authority of subsection (a) of section 8 of this Act, section 2323 of title 10, United States Code, section 712 of the Business Opportunity Development Reform Act of 1988 (Public Law 100-656; 15 U.S.C. 644 note), or section 7102 of the Federal Acquisition Streamlining Act of 1994.
(k) There is hereby established in each Federal agency having procurement powers an office to be known as the "Office of Small and Disadvantaged Business Utilization". The management of each such office shall be vested in an officer or employee of such agency who shall—
(1) be known as the "Director of Small and Disadvantaged Business Utilization" for such agency,
(2) be appointed by the head of such agency,
(3) be responsible only to, and report directly to, the head of such agency or to the deputy of such head, except that the director for the Office of the Secretary of Defense shall be responsible only to, and report to, such Secretary or the Secretary's designee,
(4) be responsible for the implementation and execution of the functions and duties under sections 8 and 15 of this Act which relate to such agency,
(5) identify proposed solicitations that involve significant bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations where appropriate to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a solicitation for a bundled contract is to be issued;
(6) assist small business concerns to obtain payments, late payment interest penalties, or information due to such concerns from an executive agency or a contractor, in conformity with chapter 39 of title 31, United States Code, or any other protection for contractors or subcontractors (including suppliers) that is included in the Federal Acquisition Regulation or any individual agency supplement to such Government-wide regulation;
(7) have supervisory authority over personnel of such agency to the extent that the functions and duties of such personnel relate to functions and duties under sections 8 and 15 of this Act,
(8) assign a small business technical adviser to each office to which the Administration has assigned a procurement center representative ‑‑
(A) who shall be a full‑time employee of the procuring activity and shall be well qualified, technically trained and familiar with the supplies or services purchased at the activity, and
(B) whose principal duty shall be to assist the Administration procurement center representative in his duties and functions relating to sections 8 and 15 of this Act,
(9) cooperate, and consult on a regular basis, with the Administration with respect to carrying out the functions and duties described in paragraph (4) of this subsection, and
(10) make recommendations to contracting officers as to whether a particular contract requirement should be awarded pursuant to subsection (a), or section 8(a) of this Act or section 2323 of title 10, United States Code. Such recommendations shall be made with due regard to the requirements of subsection (m), and the failure of the contracting officer to accept any such recommendations shall be documented and included within the appropriate contract file.
This subsection shall not apply to the Administration.
(l) (1) The Administration shall assign to each major procurement center a breakout procurement center representative with such assistance as may be appropriate. The breakout procurement center representative shall carry out the activities described in paragraph (2), and shall be an advocate for the breakout of items for procurement through full and open competition, whenever appropriate, while maintaining the integrity of the system in which such items are used, and an advocate for the use of full and open competition, whenever appropriate, for the procurement of supplies and services by such center. Any breakout procurement center representative assigned under this subsection shall be in addition to the representative referred to in subsection (k)(6).
(2) In addition to carrying out the responsibilities assigned by the Administration, a breakout procurement center representative is authorized to ‑‑
(A) attend any provisioning conference or similar evaluation session during which determinations are made as to whether requirements are to be procured through other than full and open competition and make recommendations with respect to such requirements to the members of such conference or session;
(B) review, at any time, restrictions on competition previously imposed on items through acquisition method coding or similar procedures, and recommend to personnel of the appropriate activity the prompt reevaluation of such limitations;
(C) review restrictions on competition
arising out of restrictions on the rights of the
(D) obtain from any governmental source, and make available to personnel of the appropriate activity, technical data necessary for the preparation of a competitive solicitation package for any item of supply or service previously procured noncompetitively due to the unavailability of such technical data;
(E) have access to procurement records and other data of the procurement center commensurate with the level of such representative's approved security clearance classification;
(F) receive unsolicited engineering proposals and, when appropriate (i) conduct a value analysis of such proposal to determine whether such proposal, if adopted, will result in lower costs to the United States without substantially impeding legitimate acquisition objectives and forward to personnel of the appropriate activity recommendations with respect to such proposal, or (ii) forward such proposals without analysis to personnel of the activity responsible for reviewing such proposals and who shall furnish the breakout procurement center representative with information regarding the disposition of any such proposal; and
(G) review the systems that account for the acquisition and management of technical data within the procurement center to assure that such systems provide the maximum availability and access to data needed for the preparation of offers to sell to the United States those supplies to which such data pertain which potential offerors are entitled to receive.
(3) A breakout procurement center representative is authorized to appeal the failure to act favorably on any recommendation made pursuant to paragraph (2). Such appeal shall be filed and processed in the same manner and subject to the same conditions and limitations as an appeal filed by the Administrator pursuant to subsection (a).
(4) The Administration shall assign and co‑locate at least two small business technical advisers to each major procurement center in addition to such other advisers as may be authorized from time to time. The sole duties of such advisers shall be to assist the breakout procurement center representative for the center to which such advisers are assigned in carrying out the functions described in paragraph (2) and the representatives referred to in subsection (k)(6).
(5) (A) The breakout procurement center representatives and technical advisers assigned pursuant to this subsection shall be—
(i) full‑time employees of the Administration; and
(ii) fully qualified, technically trained, and familiar with the supplies and services procured by the major procurement center to which they are assigned.
(B) In addition to the requirements of subparagraph (A), each breakout procurement center representative, and at least one technical adviser assigned to such representative, shall be an accredited engineer.
(C) The Administration shall establish personnel positions for breakout procurement representatives and advisers assigned pursuant to this subsection which are classified at a grade level of the General Schedule sufficient to attract and retain highly qualified personnel.
(6) For purposes of this subsection, the term "major procurement center" means a procurement center that, in the opinion of the Administrator, purchases substantial dollar amounts of other than commercial items and which has the potential to incur significant savings as the result of the placement of a breakout procurement center representative.
(7) (A) At such times as the Administrator deems appropriate, the breakout procurement center representative shall conduct familiarization sessions for contracting officers and other appropriate personnel of the procurement center to which such representative is assigned. Such sessions shall acquaint the participants with the provisions of this subsection and shall instruct them in methods designed to further the purposes of such subsection.
(B) The breakout procurement center representative shall prepare and personally deliver an annual briefing and report to the head of the procurement center to which such representative is assigned. Such briefing and report shall detail the past and planned activities of the representative and shall contain such recommendations for improvement in the operation of the center as may be appropriate. The head of such center shall personally receive such briefing and report and shall, within sixty calendar days after receipt, respond, in writing, to each recommendation made by such representative.
(m) (1) Each agency subject to the requirements of section 2323 of title 10, United States Code, shall, when implementing such requirements—
(A) establish policies and procedures that insure that there will be no reduction in the number of dollar value of contracts awarded pursuant to this section and section 8(a) in order to achieve any goal or other program objective; and
(B) assure that such requirements will not alter or change the procurement process used to implement this section or section 8(a).
(2) All procurement center representatives (including those referred to in subsection (k)(6)), in addition to such other duties as may be assigned by the Administrator, shall—
(A) monitor the performance of the procurement activities to which they are assigned to ascertain the degree of compliance with the requirements of paragraph (l);
(B) report to their immediate supervisors all instances of noncompliance with such requirements; and
(C) increase, insofar as possible, the number and dollar value of procurements that may be used for the programs established under this section, section 8(a), and section 2323 of title 10, United States Code.
(n) For purposes of this section, the determination of labor surplus areas 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 twenty‑five thousand. Such determination, as modified by the preceding sentence, shall be made by the Secretary of Labor.
(o) (1) A concern may not be awarded a contract under subsection (a) as a small business concern unless the concern agrees that—
(A) in the case of a contract for services (except construction), at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; and
(B) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), the concern will perform work for at least 50 percent of the cost of manufacturing the supplies (not including the cost of materials).
(2) The Administrator may change the percentage under subparagraph (A) or (B) of paragraph (1) if the Administrator determines that such change is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category.
(3) The Administration 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 such paragraph. The percentage applicable to any such requirement shall be determined in accordance with paragraph (2).
(p) DATABASE, ANALYSIS, AND ANNUAL REPORT WITH RESPECT TO BUNDLED CONTRACTS.—
(1) BUNDLED CONTRACT DEFINED.—In this subsection, the term “bundled contract” has the meaning given such term in section 3(o)(1).
(2) DATABASE.—
(A) IN GENERAL.—Not later than 180 days after the date of the enactment of this subsection, the Administrator of the Small Business Administration shall develop and shall thereafter maintain a database containing data and information regarding—
(i) each bundled contract awarded by a Federal agency; and
(ii) each small business concern that has been displaced as a prime contractor as a result of the award of such a contract.
(3) 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 (e)) 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.
(4) ANNUAL REPORT ON CONTRACT BUNDLING.—
(A) IN GENERAL.—Not later than 1 year after the date of the enactment of this paragraph, and annually in March thereafter, the Administration shall transmit a report on contract bundling to the Committees on Small Business of the House of Representatives and the Senate.
(B) CONTENTS.—Each report transmitted under subparagraph (A) shall include—
(i) data on the number, arranged by industrial classification, of small business concerns displaced as prime contractors as a result of the award of bundled contracts by Federal agencies; and
(ii) a description of the activities with respect to previously bundled contracts of each Federal agency during the preceding year, including—
(I) data on the number and total dollar amount of all contract requirements that were bundled; and
(II) with respect to each bundled contract, data or information on—
(aa) the justification for the bundling of contract requirements;
(bb) the cost savings realized by bundling the contract requirements over the life of the contract;
(cc) the extent to which maintaining the bundled status of contract requirements is projected to result in continued cost savings;
(dd) the extent to which the bundling of contract requirements complied with the contracting 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
(ee) 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.
(5) ACCESS TO DATA.—
(A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in the implementation of this section, the Administration shall have access to information collected through the Federal Procurement Data System.
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in the implementation of this section, the head of each contracting agency shall provide, upon request of the Administration, procurement information collected through existing agency data collection sources.
§ 16. (a) Whoever makes any statement knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the Administration, or for the purpose of obtaining money, property, or anything of value, under this Act, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.
(b) Whoever, being connected in any capacity with the Administration, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or Pledged or otherwise entrusted to it, or (2) with intent to defraud the Administration or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Administration makes any false entry in any book, report, or statement of or to the Administration, or without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, or (3) with intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the Administration, or (4) gives any unauthorized information concerning any future action or Plan of the Administration which might affect the value of securities, or, having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company or corporation receiving loans or other assistance from the Administration, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.
(c) Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or Pledged to, or held by, the Administration, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.
(d) (1) Whoever misrepresents the status of any concern or person as a “small business concern”, a “qualified HUBZone small business concern”, a "small business concern owned and controlled by socially and economically disadvantaged individuals" or a “small business concern[s] owned and controlled by women”, in order to obtain for oneself or another any—
(A) prime contract to be awarded pursuant to section 9, 15, or 31;
(B) subcontract to be awarded pursuant to section 8(a);
(C) subcontract that is to be included as part or all of a goal contained in a subcontracting Plan required pursuant to section 8(d); or
(D) prime or subcontract to be awarded as a result, or in furtherance, of any other provision of Federal law that specifically references section 8(d) for a definition of program eligibility, shall be subject to the penalties and remedies described in paragraph (2).
(2) Any person who violates paragraph (1) shall—
(A) be punished by a fine of not more than $500,000 or by imprisonment for not more than 10 years, or both;
(B) be subject to the administrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801‑3812);
(C) be subject to suspension and debarment as specified in subpart 9.4 of title 48, Code of Federal Regulations (or any successor regulation) on the basis that such 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
(D) be ineligible for participation in any program or activity conducted under the authority of this Act or the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) for a period not to exceed 3 years.
(e) Any representation of the status of any concern or person as a "small business concern", a “HUBZone small business concern”, a "small business concern owned and controlled by socially and economically disadvantaged individuals", or a "small business concern[s] owned and controlled by women" in order to obtain any prime contract or subcontract enumerated in subsection (d) of this section shall be in writing.
(f) Whoever falsely certifies past compliance with the requirements of section 7(j)(10)(I) of this Act shall be subject to the penalties prescribed in subsection (d).
§ 17. Any interest held by the Administration in property, as security for a loan, shall be subordinate to any lien on such property for taxes due on the property to a State, or political subdivision thereof, in any case where such lien would, under applicable State law, be superior to such interest if such interest were held by any party other than the United States.
§ 18. (a) The Administration shall not duplicate the work or activity of any other department or agency of the Federal Government and nothing contained in this Act shall be construed to authorize any such duplication unless such work or activity is expressly provided for in this Act. If loan applications are being refused or loans denied by such other department or agency responsible for such work or activity due to administrative withholding from obligation or withholding from apportionment, or due to administratively declared moratorium, then, for purposes of this section, no duplication shall be deemed to have occurred.
(b) As used in this Act—
(1) "agricultural enterprises" means those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and
(2) "credit elsewhere" means the availability of sufficient credit from non‑Federal sources at reasonable rates and terms, taking into consideration prevailing private rates and terms in the community in or near where the concern transacts business for similar purposes and periods of time.
§ 19. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.
§ 20. (a) (1) For fiscal year 2000 and each fiscal year thereafter, there are authorized to be appropriated such sums as may be necessary and appropriate, to remain available until expended, and to be available solely—
(A) to carry out the Small Business Development Center Program under section 21, but not to exceed the annual funding level, as specified in section 21(a);
(B) to pay the expenses of the National Small Business Development Center Advisory Board, as provided in section 21(i);
(C) to pay the expenses of the information sharing system, as provided in section 21(c)(8);
(D) to pay the expenses of the association referred to in section 21(a)(3)(A) for conducting the accreditation program, as provided in section 21(k)(2); and
(E) to pay the expenses of the Administration, including salaries of examiners, for conducting examinations as part of the accreditation program conducted by the association referred to in section 21(a)(3)(A).
(F) to pay for small business development center grants as mandated or directed by Congress.
(2) Notwithstanding any other provision of law, the Administration shall enter into commitments for direct loans and to guarantee loans, debentures, payment of rentals, or other amounts due under qualified contracts and other types of financial assistance and enter into commitments to purchase debentures and preferred securities and to guarantee sureties against loss pursuant to programs under this Act and the Small Business Investment Act of 1958, in the full amounts provided by law subject only to (A) the availability of qualified applications, and (B) limitations contained in appropriations Acts. Nothing in this paragraph authorizes the Administration to reduce or limit its authority to enter into such commitments. Subject to approval in appropriations Acts, amounts authorized for preferred securities, debentures or participating securities under title III of the Small Business Investment Act of 1958 may be obligated in one fiscal year and disbursed or guaranteed in any 1 or more of the 4 subsequent fiscal years.
(3) There are authorized to be transferred from the disaster loan revolving fund such sums as may be necessary and appropriate for administrative expenses of the Administration.
(4) Except as may be otherwise specifically provided by law, the amount of deferred participation loans authorized in this section—
(A) shall mean the net amount of the loan principal guaranteed by the Small Business Administration (and does not include any amount which is not guaranteed); and
(B) shall be available for a national
program, except that the Administration may use not more than an amount equal
to 10 percent of the amount authorized each year for any special or pilot
program directed to identified sectors of the small business community or to
specific geographic regions of the
(b) There are authorized to be appropriated to the Administration for fiscal year 1991 such sums as may be necessary to carry out the provisions of this Act and the Small Business Investment Act of 1958. There also are hereby authorized to be appropriated such sums as may be necessary and appropriate for the carrying out of the provisions and purposes, including administrative, of sections 7(b)(1) and 7(b)(2) of this Act; and there are authorized to be transferred from the disaster loan revolving fund such sums as may be necessary and appropriate for such administrative expenses.
(c) DISASTER
MITIGATION PILOT PROGRAM.—The following program levels are authorized for loans
under section 7(b)(1)(C):
(1) $15,000,000 for fiscal year 2005.
(2) $15,000,000 for fiscal year 2006.
(d) FISCAL
YEAR 2005.—
(1) PROGRAM LEVELS.—The following program
levels are authorized for fiscal year 2005:
(A) For the programs authorized by this Act,
the Administration is authorized to make—
(i) $75,000,000
in technical assistance grants, as provided in section 7(m); and
(ii) $105,000,000 in direct loans, as
provided in 7(m).
(B) For the programs authorized by this Act,
the Administration is authorized to make $23,050,000,000 in deferred
participation loans and other financings.
Of such sum, the Administration is authorized to make—
(i) $16,500,000,000
in general business loans, as provided in section 7(a);
(ii) $6,000,000,000 in certified development
company financings, as provided in section 7(a)(13) and as provided in section
504 of the Small Business Investment Act of 1958;
(iii) $500,000,000 in loans, as provided in
section 7(a)(21); and
(iv) $50,000,000 in loans, as provided in
section 7(m).
(C) For the programs authorized by title III
of the Small Business Investment Act of 1958, the Administration is authorized
to make—
(i) $4,250,000,000 in purchases of participating securities; and
(ii) $3,250,000,000 in guarantees of
debentures.
(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958, the Administration is
authorized to enter into guarantees not to exceed $6,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant to section 411(a)(3) of
that Act.
(E) The Administration is authorized to make
grants or enter into cooperative agreements for a total amount of $7,000,000
for the Service Corps of Retired Executives program authorized by section
8(b)(1).
(2) ADDITIONAL AUTHORIZATIONS.—
(A) There are authorized to be appropriated
to the Administration for fiscal year 2005 such sums as may be necessary to
carry out the provisions of this Act not elsewhere provided for, including
administrative expenses and necessary loan capital for disaster loans pursuant
to section 7(b), and to carry out the Small Business Investment Act of 1958,
including salaries and expenses of the Administration.
(B) Notwithstanding any other provision of
this paragraph, for fiscal year 2005—
(i) no funds
are authorized to be used as loan capital for the loan program authorized by
section 7(a)(21) except by transfer from another Federal department or agency
to the Administration, unless the program level authorized for general business
loans under paragraph (1)(B)(i) is fully funded; and
(ii) the Administration may not approve loans
on its own behalf or on behalf of any other Federal department or agency, by
contract or otherwise, under terms and conditions other than those specifically
authorized under this Act or the Small Business Investment Act of 1958, except
that it may approve loans under section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.
(e) FISCAL
YEAR 2006.—
(1) PROGRAM LEVELS.—The following program
levels are authorized for fiscal year 2006:
(A) For the programs authorized by this Act,
the Administration is authorized to make—
(i) $80,000,000
in technical assistance grants, as provided in section 7(m); and
(ii) $110,000,000 in direct loans, as provided in 7(m).
(B) For the programs authorized by this Act,
the Administration is authorized to make $25,050,000,000 in deferred
participation loans and other financings.
Of such sum, the Administration is authorized to make—
(i) $17,000,000,000
in general business loans, as provided in section 7(a);
(ii) $7,500,000,000 in certified development
company financings, as provided in section 7(a)(13) and as provided in section
504 of the Small Business Investment Act of 1958;
(iii) $500,000,000 in loans, as provided in
section 7(a)(21); and
(iv) $50,000,000 in loans, as provided in
section 7(m).
(C) For the programs authorized by title III
of the Small Business Investment Act of 1958, the Administration is authorized
to make—
(i) $4,500,000,000
in purchases of participating securities; and
(ii) $3,500,000,000 in guarantees of
debentures.
(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958, the Administration is
authorized to enter into guarantees not to exceed $6,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant to section 411(a)(3) of
that Act.
(E) The Administration is authorized to make
grants or enter into cooperative agreements for a total amount of $7,000,000
for the Service Corps of Retired Executives program authorized by section
8(b)(1).
(2) ADDITIONAL AUTHORIZATIONS.—
(A) There are authorized to be appropriated
to the Administration for fiscal year 2006 such sums as may be necessary to
carry out the provisions of this Act not elsewhere provided for, including administrative
expenses and necessary loan capital for disaster loans pursuant to section
7(b), and to carry out the Small Business Investment Act of 1958, including
salaries and expenses of the Administration.
(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2006—
(i) no funds
are authorized to be used as loan capital for the loan program authorized by
section 7(a)(21) except by transfer from another Federal department or agency
to the Administration, unless the program level authorized for general business
loans under paragraph (1)(B)(i) is fully funded; and
(ii) the Administration may not approve loans
on its own behalf or on behalf of any other Federal department or agency, by
contract or otherwise, under terms and conditions other than those specifically
authorized under this Act or the Small Business Investment Act of 1958, except
that it may approve loans under section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.
[(f)—(i) deleted].
(j) FISCAL YEAR 2004 PURCHASE AND GUARANTEE AUTHORITY UNDER TITLE III OF SMALL BUSINESS INVESTMENT ACT OF 1958.—For fiscal year 2004, for the programs authorized by title III of the Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.), the Administration is authorized to make—
(1) $4,000,000,000 in purchases of participating securities; and
(2) $3,000,000,000 in guarantees of debentures.
§ 21. (a) (1) The Administration is authorized to make grants (including contracts and cooperative agreements) to any State government or any agency thereof, any regional entity, any State‑chartered development, credit or finance corporation, any women’s business center operating pursuant to section 29, any public or private institution of higher education, including but not limited to any land‑grant college or university, any college or school of business, engineering, commerce, or agriculture, community college or junior college, or to any entity formed by two or more of the above entities (herein referred to as "applicants") to assist in establishing small business development centers and to any such body for: small business oriented employment or natural resources development programs; studies, research, and counseling concerning the managing, financing, and operation of small business enterprises; management and technical assistance regarding small business participation in international markets, export promotion and technology transfer, delivery or distribution of such services and information; and providing access to business analysts who can refer small business concerns to available experts: Provided, That after December 31, 1990, the Administration shall not make a grant to any applicant other than an institution of higher education or a women’s business center operating pursuant to section 29 as a Small Business Development Center unless the applicant was receiving a grant (including a contract or cooperative agreement) on such date. The Administration shall require any applicant for a small business development center grant with performance commencing on or after January 1, 1992 to have its own budget and to primarily utilize institutions of higher education and women’s business centers operating pursuant to section 29 to provide services to the small business community. The term of such grants shall be made on a calendar year basis or to coincide with the Federal fiscal year.
(2) The Small Business Development Centers shall work in close cooperation with the Administration's regional and local offices, the Department of Commerce, appropriate Federal, State and local 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 businesses.
(3) The
(A) Small business development centers are authorized to form an association to pursue matters of common concern. If more than a majority of the small business development centers which are operating pursuant to agreements with the
Administration are members of such an association, the Administration is authorized and directed to recognize the existence and activities of such an association and to consult with it and develop documents (i) announcing the annual scope of activities pursuant to this section, (ii) requesting proposals to deliver assistance as provided in this section and (iii) governing the general operations and administration of the Small Business Development Center Program, specifically including the development of regulations and a uniform negotiated cooperative agreement for use on an annual basis when entering into individual negotiated agreements with small business development centers.
(B) Provisions governing audits, cost principles and administrative requirements for Federal grants, contracts and cooperative agreements which are included in uniform requirements of Office of Management and Budget (OMB) Circulars shall be incorporated by reference and shall not be set forth in summary or other form in regulations.
(C) On an annual basis, the
(4)
(A) IN GENERAL.—The Administration shall require as a condition of any grant (or amendment or modification thereof) made to an applicant under this section, that a matching amount (excluding any fees collected from recipients of such assistance) equal to the amount of such grant be provided from sources other than the Federal Government, to be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions.
(B) RESTRICTION.—The matching amount described in subparagraph (A) shall not include any indirect costs or in-kind contributions derived from any Federal program.
(C) FUNDING FORMULA.—
(i) IN GENERAL.—Subject to clause (iii), the amount of a formula grant received by a State under this subparagraph shall be equal to an amount determined in accordance with the following formula:
(I) The annual amount made available under section 20(a) for the Small Business Development Center Program, less any reductions made for expenses authorized by clause (v) of this subparagraph, shall be divided on a pro rata basis, based on the percentage of the population of each State, as compared to the population of the United States.
(II) If the pro rata amount calculated under subclause (I) for any State is less than the minimum funding level under clause (iii), the Administration shall determine the aggregate amount necessary to achieve that minimum funding level for each such State.
(III) The aggregate amount calculated under subclause (II) shall be deducted from the amount calculated under subclause (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 to the total population of all such States.
(IV) The aggregate amount deducted under subclause (III) shall be added to the grants of those States that are not eligible to receive more than the minimum funding level in order to achieve the minimum funding level for each such State, except that the eligible amount of a grant to any State shall not be reduced to an amount below the minimum funding level.
(ii) GRANT DETERMINATION.—The amount of a grant that a State is eligible to apply for under this subparagraph shall be the amount determined under clause (i), subject to any modifications required under clause (iii), and shall be based on the amount available for the fiscal year in which performance of the grant commences, but not including amounts distributed in accordance with clause (iv). The amount of a grant received by a State under any provision of this subparagraph shall not exceed the amount of matching funds from sources other than the Federal Government, as required under subparagraph (A).
(iii) MINIMUM FUNDING LEVEL.—The amount of the minimum funding level for each State shall be determined for each fiscal year based on the amount made available for that fiscal year to carry out this section, as follows:
(I) If the amount made available is not less than $81,500,000 and not more than $90,000,000, the minimum funding level shall be $500,000.
(II) If the amount made available is less than $81,500,000, the minimum funding level shall be the remainder of $500,000 minus a percentage of $500,000 equal to the percentage amount by which the amount made available is less than $81,500,000.
(III) If the amount 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.
(iv) DISTRIBUTIONS.—Subject to clause (iii), if any State does not apply for, or use, its full funding eligibility for a fiscal year, the Administration shall distribute the remaining funds as follows:
(I) If the grant to any State is less than the amount received by that State in Fiscal year 2000, the Administration shall distribute such remaining funds, on a pro rata bases, based on the percentage of shortage of each such State, as compared to the total amount of such remaining funds available, to the extent necessary in order to increase the amount of the grant to the amount received by that State in fiscal year 2000, or until such funds are exhausted, whichever first occurs.
(II) If any funds remain after the application of subclause (I), the remaining amount may be distributed as supplemental grants to any State, as the Administration determines, in its discretion, to be appropriate, after consultation with the association referred to in subsection (a)(3)(A).
(v) USE OF AMOUNTS.
(I) IN GENERAL.—Of the amounts made available in any fiscal year to carry out this section—
(aa) not more than $500,000 may be used by the Administration to pay expenses enumerated in subparagraphs (B) through (D) of section 20(a)(1); and
(bb) not more than $500,000 may be used by the Administration to pay the examination expenses enumerated in section 20(a)(1)(E).
(II) LIMITATION.—No funds described in subclause (I) may be used for examination expenses under section 20(a)(1)(E) if the usage would reduce the amount of grants made available under clause (i)(I) of this subparagraph 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 small business development center program) or would further reduce the amount of such grants below such amount.
(vi) EXCLUSIONS.—Grants provided to a State by the Administration or another Federal agency to carry out subsection (a)(6) or (c)(3)(G), or for supplemental grants set forth in clause (iv)(II) of this subparagraph, shall not be included in the calculation of maximum funding for a State under clause (ii) of this subparagraph.
(vii) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subparagraph—
(I) $130,000,000 for fiscal year 2005; and
(II) $135,000,000 for fiscal year 2006.
(viii) LIMITATION.—From the funds appropriated pursuant to clause (vii), the Administration shall reserve not less than $1,000,000 in each fiscal year to develop portable assistance for startup and sustainability non-matching grant programs to be conducted by eligible small business development centers in communities that are economically challenged as a result of a business or government facility down sizing or closing, which has resulted in the loss of jobs or small business instability. A non-matching grant under this clause shall not exceed $100,000, and shall be used for small business development center personnel expenses and related small business programs and services.
(ix) STATE DEFINED.—In this subparagraph, the term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
(5) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CENTERS.—
(A) IN GENERAL.—Subject to the conditions set forth in subparagraph (B), a small business development center may enter into a contract with a Federal department or agency to provide specific assistance to small business concerns.
(B) CONTRACT PREREQUISITES.—Before bidding on a contract described in subparagraph (A), a small business development center shall receive approval from the Associate Administrator of the small business development center program of the subject and general scope of the contract. Each approval under subparagraph (A) shall be based upon a determination that the contract will provide assistance to small business concerns and that performance of the contract will not hinder the small business development center in carrying out the terms of the grant received by the small business development center from the Administration.
(C) EXEMPTION FROM MATCHING REQUIREMENT.—A contract under this paragraph shall not be subject to the matching funds or eligibility requirements of paragraph (4).
(D) ADDITIONAL PROVISION.—Notwithstanding any other provision of law, a contract for assistance under this paragraph shall not be applied to any Federal department or agency's small business, woman-owned business, or socially and economically disadvantaged business contracting goal under section 15(g).
(6) Any applicant which is funded by the
Administration as a
(A) with the development and enhancement of exports by small business concerns;
(B) in technology transfer; and
(C) with outreach, development, and enhancement of minority-owned small business startups or expansions, HUBZone small business concerns, veteran-owned small business startups or expansions, and women-owned small business startups or expansions, in communities impacted by base closings or military or corporate downsizing, or in rural or underserved communities;
as
provided under subparagraphs (B) through (G) of subsection (c)(3). Applicants for such additional grants shall
comply with all of the provisions of this section, including providing matching
funds, except that funding under this paragraph shall be effective for any fiscal
year to the extent provided in advance in appropriations Acts and shall be in
addition to the dollar program limitations specified in paragraphs (4) and
(5). No recipient of funds under this
paragraph shall receive a grant which would exceed its pro rata share of a
$15,000,000 program based upon the populations to be served by the
(7) PRIVACY REQUIREMENTS.—
(A) 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 section without the consent of such individual
or small business concern, unless—
(i) the
Administrator is ordered to make such a disclosure by a court in any civil or
criminal enforcement action initiated by a Federal or State agency; or
(ii) the Administrator considers such a
disclosure to be necessary for the purpose of conducting a financial audit of a
small business development center, but a disclosure under this clause shall be
limited to the information necessary for such audit.
(B) ADMINISTRATOR USE OF INFORMATION.—This
section shall not—
(i) restrict
Administrator access to program activity data; or
(ii) prevent the Administrator from using
client information to conduct client surveys.
(C) REGULATIONS.—
(i) IN
GENERAL.—The Administrator shall issue regulations to establish standards—
(I) for disclosures with respect to
financial audits under subparagraph (A)(ii); and
(II) for client surveys under subparagraph (B)(ii), including standards for oversight of such surveys and for dissemination and use of client information.
(ii) MAXIMUM PRIVACY PROTECTION.—Regulations
under this subparagraph, [sic] shall, to the extent practicable, provide for
the maximum amount of privacy protection.
(iii) INSPECTOR GENERAL.—Until the effective date of regulations under this subparagraph, any client survey and the use of such information shall be approved by the Inspector General who shall include such approval in his semi-annual report.
(b) (1) Financial assistance shall not be made available to any applicant if approving such assistance would be inconsistent with a Plan for the area involved which has been adopted by an agency recognized by the State government as authorized to do so and approved by the Administration in accordance with the standards and requirements established pursuant to this section.
(2) An applicant may apply to participate in the program by submitting to the Administration for approval a Plan naming those authorized in subsection (a) to participate in the program, the geographic area to be served, the services that it would provide, the method for delivering services, a budget, and any other information and assurances the Administration may require to insure that the applicant will carry out the activities eligible for assistance. The Administration is authorized to approve, conditionally approve or reject a Plan or combination of Plans submitted. In all cases, the Administration shall review Plans for conformity with the Plan submitted pursuant to paragraph (1) of this subsection, and with a view toward providing small business with the most comprehensive and coordinated assistance in the State or part thereof to be served.
(3) At the discretion of the Administration, the Administration is authorized to permit a small business development center to provide advice, information and assistance, as described in subsection (c), to small businesses located outside the State, but only to the extent such businesses are located within close geographical proximity to the small business development center, as determined by the Administration.
(c) (1) Applicants receiving grants under this section shall assist small businesses in solving problems concerning operations, 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.
(2) A small business development center
shall provide services as close as possible to small businesses by providing
extension services and utilizing satellite locations when necessary. The
facilities and staff of each
(A) a full‑time staff, including a full‑time director who shall have the authority to make expenditures under the center's budget and who shall manage the program activities;
(B) access to business analysts to counsel, assist, and inform small business clients;
(C) access to technology transfer agents to provide state of art technology to small businesses through coupling with national and regional technology data sources;
(D) access to information specialists to assist in providing information searches and referrals to small business;
(E) access to part‑time professional specialists to conduct research or to provide counseling assistance whenever the need arises; and
(F) access to laboratory and adaptive engineering facilities.
(3) Services provided by a small business development center shall include, but shall not be limited to ‑‑
(A) furnishing one‑to‑one individual counseling to small businesses, including—
(i) working with individuals to increase awareness of basic credit practices and credit requirements;
(ii) working with individuals to develop business Plans, financial packages, credit applications, and contract proposals;
(iii) working with the Administration to develop and provide informational tools for use in working with individuals on pre-business startup Planning, existing business expansion, and export Planning; and
(iv) working with individuals referred by the local offices of the Administration and Administration participating lenders;
(B) assisting in technology transfer, research and development, including applied research, and coupling from existing sources to small businesses, including—
(i) working to increase the access of small businesses to the capabilities of automated flexible manufacturing systems;
(ii) working through existing networks and developing new networks for technology transfer that encourage 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
(iii) exploring the viability of developing shared production facilities, under appropriate circumstances;
(C) in cooperation with the Department of Commerce and other relevant Federal agencies, actively assisting small businesses in exporting by identifying and developing potential export markets, facilitating export transactions, developing linkages between United States small business firms and prescreened foreign buyers, assisting small businesses to participate in international trade shows, assisting small businesses in obtaining export financing, and facilitating the development or reorientation of marketing and production strategies; where appropriate, the Small Business Development Center and the Administration may work in cooperation with the State to establish a State international trade center for these purposes;
(D) developing a program in conjunction with the Export‑Import Bank and local and regional Administration offices that will enable Small Business Development Centers to serve as an information network and to assist small business applicants for Export‑Import Bank financing programs, and otherwise identify and help to make available export financing programs to small businesses;
(E) working closely with the small business community, small business consultants, State agencies, universities and other appropriate groups to make translation services more readily available to small business firms doing business, or attempting to develop business, in foreign markets;
(F) in providing assistance under this subsection, applicants shall cooperate with the Department of Commerce and other relevant Federal agencies to increase access to available export market information systems, including the CIMS system;
(G) assisting small businesses to develop and implement strategic business Plans to timely and effectively respond to the Planned closure (or reduction) of a Department of Defense facility within the community, or actual or projected reductions in such firms' business base due to the actual or projected termination (or reduction) of a Department of Defense program or a contract in support of such program—
(i) by developing broad economic assessments of the adverse impacts of—
(I) the closure (or reduction) of the Department of Defense facility on the small business concerns providing goods or services to such facility or to the military and civilian personnel currently stationed or working at such facility; and
(II) the termination (or reduction) of a Department of Defense program (or contracts under such program) on the small business concerns participating in such program as a prime contractor, subcontractor or supplier at any tier;
(ii) by developing, in conjunction with appropriate Federal, State, and local governmental entities and other private sector organizations, the parameters of a transition adjustment program adaptable to the needs of individual small business concerns;
(iii) by conducting appropriate programs to inform the affected small business community regarding the anticipated adverse impacts identified under clause (i) and the economic adjustment assistance available to such firms; and
(iv) by assisting small business concerns to develop and implement an individualized transition business Plan.
(H) maintaining current information concerning Federal, State, and local regulations that affect small businesses and counsel small businesses on methods of compliance. Counseling and technology development shall be provided when necessary to help small businesses find solutions for complying with environmental, energy, health, safety, and other Federal, State, and local regulations;
(I) coordinating and conducting research into technical and general small business problems for which there are no ready solutions;
(J) providing and maintaining a comprehensive library that contains current information and statistical data needed by small businesses;
(K) maintaining a working relationship and open communications with the financial and investment communities, legal associations, local and regional private consultants, and local and regional small business groups and associations in order to help address the various needs of the small business community;
(L) conducting in‑depth surveys for local small business groups in order to develop general information regarding the local economy and general small business strengths and weaknesses in the locality;
(M) in cooperation with the Department of Commerce, the Administration and other relevant Federal agencies, actively assisting rural small businesses in exporting by identifying and developing potential export markets for rural small businesses, facilitating export transactions for rural small businesses, developing linkages between United States' rural small businesses and prescreened foreign buyers, assisting rural small businesses to participate in international trade shows, assisting rural small businesses in obtaining export financing and developing marketing and production strategies;
(N) assisting rural small businesses—
(i) in developing marketing and production strategies that will enable them to better compete in the domestic market—
(ii) by providing technical assistance needed by rural small businesses;
(iii) by making available managerial assistance to rural small business concerns; and
(iv) by providing information and assistance in obtaining financing for business startups and expansion;
(O) in conjunction with the United States Travel and Tourism Administration, assist rural small business in developing the tourism potential of rural communities by—
(i) identifying the cultural, historic, recreational, and scenic resources of such communities;
(ii) providing assistance to small businesses in developing tourism marketing and promotion Plans relating to tourism in rural areas; and
(iii) assisting small business concerns to obtain capital for starting or expanding businesses primarily serving tourists;
(P) maintaining lists of local and regional private consultants to whom small businesses can be referred;
(Q) providing information to small business concerns regarding compliance with regulatory requirements;
(R) developing informational publications, establishing resource centers of reference materials, and distributing compliance guides published under section 312(a) of the Small Business Regulatory Enforcement Fairness Act of 1996;
(S) providing small business 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 Export Assistance Center program; and
(T) providing information and assistance to small business concerns with respect to establishing drug-free workplace programs on or before October 1, 2006.
(4) 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.
(5) In addition to the methods prescribed in section 21(c)(2), a small business development center shall utilize and compensate as one of its resources qualified small business vendors, including but not limited to, private management consultants, private consulting engineers and private testing laboratories, to provide services as described in this subsection to small businesses on behalf of such small business development center.
(6) In any State (A) in which the Administration has not made a grant pursuant to paragraph (1) of subsection (a), or (B) in which no application for a grant has been made by a Small Business Development Center pursuant to paragraph (6) of such subsection within 60 days after the effective date of any grant under subsection (a)(1) to such center or the date the Administration notifies the grantee funded under subsection (a)(1) that funds are available for grant applications pursuant to subsection (a)(6), whichever date occurs last, the Administration may make grants to a non‑profit entity in that State to carry out the activities specified in paragraph (6) of subsection (a). Any such applicants shall comply with the matching funds requirement of paragraph (4) of subsection (a). Such grants shall be effective for any fiscal year only to the extent provided in advance in appropriations Acts, and each State shall be limited to the pro rata share provisions of paragraph (6) of subsection (a).
(7) In performing the services identified in paragraph (3), the Small Business Development Centers shall work in close cooperation with the Administration's regional and local offices, the local small business community, and appropriate State and local agencies.
(8) The Associate Administrator for Small Business Development Centers, in consultation with the Small Business Development Centers, shall develop and implement an information sharing system. Subject to amounts approved in advance in appropriations Acts, the Administration may make grants or enter cooperative agreements with one or more centers to carry out the provisions of this paragraph. Said grants or cooperative agreements shall be awarded for periods of no more than five years duration. The matching funds provisions of subsection (a) shall not be applicable to grants or cooperative agreements under this paragraph. The system shall
(A) allow Small Business Development Centers participating in the program to exchange information about their programs; and
(B) provide information central to technology transfer.
(d) Where
appropriate, the Small Business Development Centers shall work in conjunction
with the relevant State agency and the Department of Commerce to develop a comprehensive
Plan for enhancing the export potential of small businesses located within the
State. This Plan may involve the cofunding and staffing of a State Office of International
Trade within the
(e) Laboratories operated and funded by the Federal Government are authorized and directed to cooperate with the Administration in developing and establishing programs to support small business development centers by making facilities and equipment available; providing experiment station capabilities in adaptive engineering; providing library and technical information processing capabilities; and providing professional staff for consulting. The Administration is authorized to reimburse the laboratories for such services.
(f) The National Science Foundation is authorized and directed to cooperate with the Administration and with the Small Business Development Centers in developing and establishing programs to support the centers.
(g) The National Aeronautics and Space Administration and industrial application centers supported by the National Aeronautics and Space Administration are authorized and directed to cooperate with small business development centers participating in this program. The National Aeronautics and Space Administration shall report annually on the performance of such industrial application centers with recommendations to the Administration and the Congress on how such industrial application centers can be strengthened and expanded. The National Aeronautics and Space Administration shall include in its report to Congress information on the ability of industrial application centers to interact with the Nation's small business community and recommendations to the Administration on continued funding.
(h) 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 report to an official who is not more than one level below the Office of the Administrator and who shall serve without regard to the provisions of title 5 governing appointments in the competitive service, and without regard to chapter 51, and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, but at a rate not less than the rate of GS-17 of the General Schedule.
(2) DUTIES.—
(A) IN GENERAL.—The sole responsibility of the Associate Administrator for Small Business Development Centers shall be to administer the small business development center program. Duties of the position shall include recommending the annual program budget, reviewing the annual budgets submitted by each applicant, establishing appropriate funding levels therefore, selecting applicants to participate in this program, implementing the provisions of this section, maintaining a clearinghouse to provide for the dissemination and exchange of information between small business development centers and conducting audits of recipients of grants under this section.
(B) CONSULTATION REQUIREMENTS.—In carrying out the duties described in this subsection, the Associate Administrator shall confer with and seek the advice of the Board established by subsection (i) and Administration officials in areas served by the small business development centers; however, 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 such Administration officials.
(i) (1) There is established a National Small Business Development Center Advisory Board (herein referred to as "Board") which shall consist of nine members appointed from civilian life by the Administrator and who shall be persons of outstanding qualifications known to be familiar and sympathetic with small business needs and problems. No more than three members shall be from universities or their affiliates and six shall be from small businesses or associations representing small businesses. At the time of the appointment of the Board, the Administrator shall designate one‑third of the members and at least one from each category whose term shall end in two years from the date of appointment, a second third whose terms shall end in three years from the date of appointment, and the final third whose term shall end in four years from the date of appointment. Succeeding Boards shall have three‑year terms, with one‑third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and confer with the Associate Administrator for Small Business Development Centers in carrying out the duties described in this section. The Board shall meet at least semiannually and at the call of the Chairman of the Board. Each member of the Board shall be entitled to be compensated at the rate not in excess of their per diem equivalent of the highest rate of pay for individuals occupying the position under GS‑18 of the General Schedule for each day engaged in activities of the Board and shall be entitled to be reimbursed for expenses as a member of the Board.
(j) (1) Each small business development center shall establish an advisory board.
(2) Each small business development center advisory board shall elect a chairman and advise, counsel, and confer with the director of the small business development center on all policy matters pertaining to the operation of the small business development center, including who may be eligible to receive assistance from, and how local and regional private consultants may participate with the small business development center.
(k) PROGRAM
EXAMINATION AND ACCREDITATION.—
(1) EXAMINATION.—Not later than 180 days
after the date of enactment of this subsection, the Administration shall
develop and implement a biennial programmatic and financial examination of each
small business development center established pursuant to this section.
(2) ACCREDITATION.—The Administration may
provide financial support, by contract or otherwise, to the association
authorized by subsection (a)(3)(A) for the purpose of developing a small
business development center accreditation program.
(3) EXTENSION OR RENEWAL OF COOPERATIVE
AGREEMENTS.—
(A) IN GENERAL.—In extending or renewing a
cooperative agreement of a small business development center, the
Administration shall consider the results of the examination and accreditation
program conducted pursuant to paragraphs (1) and (2).
(B) ACCREDITATION REQUIREMENT.—After September 30, 2000, the Administration may not renew or extend any cooperative agreement with a small business development center unless the center has been approved under the accreditation program conducted pursuant to this subsection, except that the Associate Administrator for Small Business Development Centers may waive such accreditation requirement, in the discretion of the Associate Administrator, upon a showing that the center is making a good faith effort to obtain certification.
(l) CONTRACT AUTHORITY.—The authority to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the administration [sic] has entered a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administration provides the applicant with written notification setting forth the reasons therefore and affording the applicant an opportunity for a hearing, appeal, or other administrative proceeding under the provisions of chapter 5 of title 5, United States Code. If any contract or cooperative agreement under this section with an entity that is covered by this section is not renewed or extended, any award of a successor contract or cooperative agreement under this section to another entity shall be made on a competitive basis.
(m) PROHIBITION ON CERTAIN FEES.—A small business development center shall not impose or otherwise collect a fee or other compensation in connection with the provision of counseling services under this section.
§ 21A. [Repealed].
§ 22. (a) There is established within the Administration an Office of International Trade which shall implement the programs pursuant to this section.
(b) The
Office, working in close cooperation with the Department of Commerce and other
relevant Federal agencies,
(1) assist in developing a distribution network for existing trade promotion, trade finance, trade adjustment, trade remedy assistance and trade data collection programs through use of the Administration's regional and local offices and the Small Business Development Center network;
(2) assist in the aggressive marketing of these programs and the dissemination of marketing information, including computerized marketing data, to the small business community; and
(3) give preference in hiring or approving the transfer of any employee into the Office or to a position described in paragraph (8) below to otherwise qualified applicants who are fluent in a language in addition to English. Such employees shall accompany foreign trade missions if designated by the director of the Office and shall be available as needed to translate documents, interpret conversations and facilitate multilingual transactions including providing referral lists for translation services if required.
(c) The Office shall promote sales opportunities for small business goods and services abroad. To accomplish this objective the office shall—
(1) in cooperation with the Department of Commerce, other relevant agencies, regional and local Administration offices, the Small Business Development Center network, and State programs, develop a mechanism for (A) identifying sub‑sectors 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;
(2) in cooperation with the Department of Commerce, actively assist small businesses in the formation and utilization of export trading companies, export management companies and research and development pools authorized under section 9 of this Act;
(3) work in conjunction with other Federal agencies, regional and local offices of the Administration, the Small Business Development Center network, and the private sector to identify and publicize existing translation services, including those available through colleges and universities participating in the Small Business Development Center Program;
(4) work closely with the Department of Commerce and other relevant Federal agencies to—
(A) collect, analyze and periodically update relevant data regarding the small business share of United States exports and the nature of State exports (including the production of Gross State Produce figures) and disseminate that data to the public and to Congress;
(B) make recommendations to the Secretary of Commerce and to Congress regarding revision of the SIC codes to encompass industries currently overlooked and to create SIC codes for export trading companies and export management companies;
(C) improve the utility and accessibility of existing export promotion programs for small businesses; and
(D) increase the accessibility of the Export Trading Company contact facilitation service;
(5) make available to the small business community information regarding conferences on exporting and international trade sponsored by the public and private sector;
(6) provide small businesses with access to current and complete export information by—
(A) making available, at the Administration's regional offices through cooperation with the Department of Commerce, export information, including, but not limited to, the worldwide information and trade system and world trade data reports;
(B) maintaining a current list of financial institutions that finance export operations;
(C) maintaining a current directory of all Federal, regional, State and private sector programs that provide export information and assistance to small businesses; and
(D) preparing and publishing such reports as it determines to be necessary concerning market conditions, sources of financing, export promotion programs, and other information pertaining to the needs of small business exporting firms so as to insure that the maximum information is made available to small businesses in a readily usable form;
(7) encourage through cooperation with the Department of Commerce, greater small business participation in trade fairs, shows, missions, and other domestic and overseas export development activities of the Department of Commerce; and
(8) facilitate decentralized delivery of export information and assistance to small businesses by assigning full‑time export development specialists to each Administration regional office and assigning primary responsibility for export development to one person in each district office. Such specialists shall ‑‑
(A) assist small businesses in obtaining export information and assistance from other Federal departments and agencies;
(B) maintain a current directory of all programs which provide export information and assistance to small businesses within the region;
(C) encourage financial institutions to develop and expand programs for export financing;
(D) provide advice to Administration personnel involved in granting loans, loan guarantees, and extensions and revolving lines of credit, and providing other forms of assistance to small businesses engaged in exports; and
(E) within one hundred and eighty days of their appointment, participate in training programs designed by the Administrator, in conjunction with the Department of Commerce and other Federal departments and agencies, to study export programs and to examine small businesses' needs for export information and assistance.
(d) The Office shall work in cooperation with the Export‑Import Bank of the United States, the Department of Commerce, other relevant Federal agencies, and the States to develop a program through which export specialists in the regional offices of the Administration, regional and local loan officers, and Small Business Development Center personnel can facilitate the access of small businesses to relevant export financing programs of the Export‑Import Bank of the United States and to export and pre‑export financing programs available from the Administration and the private sector. To accomplish this goal, the Office shall work in cooperation with the Export‑Import Bank and the small business community, including small business trade associations, to—
(1) aggressively market existing Administration export financing and pre‑export financing programs;
(2) identify financing available under various Export‑Import Bank programs, and aggressively market those programs to small businesses;
(3) assist in the development of financial intermediaries and facilitate the access of those intermediaries to existing financing programs;
(4) promote greater participation by private financial institutions, particularly those institutions already participating in loan programs under this Act, in export finance; and
(5) provide for the participation of appropriate Administration personnel in training programs conducted by the Export‑Import Bank.
(e) The Office shall—
(1) work in cooperation with other Federal agencies and the private sector to counsel small businesses with respect to initiating and participating in any proceedings relating to the administration of the United States trade laws; and
(2) work with the Department of Commerce, the Office of the United States Trade Representative, and the International Trade Commission to increase access to trade remedy proceedings for small businesses.
(f) The Office shall report to the Committees on Small Business of the House of Representatives and the Senate on an annual basis as to its progress in implementing the requirements under this section.
(g) The Office, in cooperation, where appropriate, with the Division of Economic Research of the Office of Advocacy, and with other Federal agencies, shall undertake studies regarding the following issues and shall report to the Committees on Small Business of the House of Representatives and the Senate, and to other relevant Committees of the House and Senate within 6 months after the date of enactment of the Small Business International Trade and Competitiveness Act with specific recommendations on—
(1) the viability and cost of establishing an annual, competitive small business export incentive program similar to the Small Business Innovation Research program and alternative methods of structuring such a program;
(2) methods of streamlining trade remedy proceedings to increase access for, and reduce expenses incurred by, smaller firms;
(3) methods of improving the current small business foreign sales corporation tax incentives and providing small businesses with greater benefits from this initiative;
(4) methods of identifying potential export markets for United States small businesses; maintaining and disseminating current foreign market data; and devising a comprehensive export marketing strategy for United States small business goods and services, and shall include data on the volume and dollar amount of goods and services, identified by type, imported by United States trading partners over the past 10 years; and
(5) the results of a survey of major United States trading partners to identify the domestic policies, programs and incentives, and the private sector initiatives, which exist to encourage the formation and growth of small business.
§ 23. SUPERVISORY AND ENFORCEMENT AUTHORITY FOR SMALL BUSINESS LENDING COMPANIES.
(a) IN
GENERAL.—The Administrator is authorized—
(1) to supervise the safety and soundness of
small business lending companies and non-Federally regulated lenders;
(2) with respect to small business lending
companies to set capital standards to regulate, to examine, and to enforce laws
governing such companies, in accordance with the purposes of this Act; and
(3) with respect to non-Federally regulated
lenders to regulate, to examine, and to enforce laws governing the lending
activities of such lenders under section 7(a) in accordance with the purposes
of this Act.
(b) CAPITAL
DIRECTIVE.—
(1) 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 such company to increase capital to
such level as the Administrator determines will result in the safe and sound
operation of such company.
(2) DELEGATION.—The Administrator may not
delegate the authority granted under paragraph (1) except to an Associate
Deputy Administrator.
(3) REGULATIONS.—The Administrator shall
issue regulations outlining the conditions under which the Administrator may
determine the level of capital pursuant to paragraph (1).
(c) CIVIL
ACTION.—If a small business lending company violates this Act, the
Administrator may institute a civil action in an appropriate district court to
terminate the rights, privileges, and franchises of the company under this Act.
(d) REVOCATION
OR SUSPENSION OF LOAN AUTHORITY.—
(1) The Administrator may revoke or suspend
the authority of a small business lending company or a non-Federally regulated
lender to make, service or liquidate business loans authorized by section 7(a)
of this Act—
(A) for false statements knowingly made in any written submission required under this Act;
(B) for omission of a material fact from any
written submission required under this Act;
(C) for willful or repeated violation of this
Act;
(D) for willful or repeated violation of any
condition imposed by the Administrator with respect to any application,
request, or agreement under this Act; or
(E) for violation of any cease and desist
order of the Administrator under this section.
(2) The Administrator may revoke or suspend
authority under paragraph (1) only after a hearing under subsection (f). The Administrator may delegate power to
revoke or suspend authority under paragraph (1) only to the Deputy
Administrator and only if the Administrator is unavailable to take such action.
(A) The Administrator, after finding
extraordinary circumstances and in order to protect the financial or legal
position of the
(B) Any suspension under paragraph (1) shall
remain in effect until the Administrator makes a decision pursuant to subparagraph
(4) to permanently revoke the authority of the small business lending company
or non-Federally regulated lender, suspend the authority for a time certain, or
terminate the suspension.
(3) The small business lending company or
non-Federally regulated lender must notify borrowers of a revocation and that a
new entity has been appointed to service their loans. The Administrator or an employee of the
Administration designated by the Administrator may provide such notice to the
borrower.
(4) Any revocation or suspension under
paragraph (1) shall be made by the Administrator except that the Administrator
shall delegate to an administrative law judge as that term is used in section
3105 of title 5, United States Code, the authority to conduct any hearing
required under subsection (f). The
Administrator shall base the decision to revoke on the record of the hearing.
(e) CEASE
AND DESIST ORDER.—
(1) Where a small business lending company,
a non-Federally regulated lender, or other person violates this Act or is
engaging or is about to engage in any acts or practices which constitute or
will constitute a violation of this Act, the Administrator may order, after the
opportunity for hearing pursuant to subsection (f), the company, lender, or other
person to cease and desist from such action or failure to act. The Administrator may delegate the authority under the preceding
sentence only to the Deputy Administrator and only if the Administrator is
unavailable to take such action.
(2) The Administrator, after finding
extraordinary circumstances and in order to protect the financial or legal
position of the
(3) The Administrator may further order such
small business lending company or non-Federally regulated lender or other
person to take such action or to refrain from such action as the Administrator
deems necessary to insure compliance with this Act.
(4) A cease and desist order under this
subsection may also provide for the suspension of authority to lend in
subsection (d).
(f) PROCEDURE
FOR REVOCATION OR SUSPENSION OF LOAN AUTHORITY AND FOR CEASE AND DESIST ORDER.—
(1) Before revoking or suspending authority
under subsection (d) or issuing a cease and desist order under subsection (e),
the Administrator shall serve an order to show cause upon the small business
lending company, non-Federally regulated lender, or other person why an order
revoking or suspending the authority or a cease and desist order should not be
issued. The order to show cause shall
contain a statement of the matters of fact and law asserted by the
Administrator and the legal authority and jurisdiction under which a hearing is
to be held, and shall set forth that a hearing will be held before an
administrative law judge at a time and place stated in the order. Such hearing shall be conducted pursuant to
the provisions of sections 554, 556, and 557 of title 5, United States
Code. If after hearing, or a waiver
thereof, the Administrator determines that an order revoking or suspending the
authority or a cease and desist order should be issued, the Administrator shall
promptly issue such order, which shall include a statement of the findings of
the Administrator and the grounds and reasons therefore and specify the
effective date of the order, and shall cause the order to be served on the
small business lending company, non-Federally regulated lender, or other person
involved.
(2) Witnesses summoned before the
Administrator shall be paid by the party at whose instance they were called the
same fees and mileage that are paid witnesses in the courts of the
(3) A cease and desist order, suspension or
revocation issued by the Administrator, after the hearing under this subsection
is final agency action for purposes of chapter 7 of title 5, United States
Code. An adversely aggrieved party shall
have 20 days from the date of issuance of the cease and desist order,
suspension or revocation, to seek judicial review in an appropriate district
court.
(g) REMOVAL
OR SUSPENSION OF MANAGEMENT OFFICIAL.—
(1) DEFINITION.—In this section, the term
“management official” means, with respect to a small business lending company
or a non-Federally regulated lender, an officer, director, general partner,
manager, employee, agent, or other participant in the management of the affairs
of the company’s or lender’s activities under section 7(a) of this Act.
(2) REMOVAL OF MANAGEMENT OFFICIAL.—
(A) NOTICE.—The Administrator may serve upon
any management official a written notice of its intention to remove that
management official if, in the opinion of the Administrator, the management
official—
(i) willfully
and knowingly commits a substantial violation of—
(I) this Act;
(II) any regulation issued under this Act;
(III) a final cease-and-desist order under this Act; or
(IV) any agreement by the management official,
the small business lending company or non-Federally regulated lender under this
Act; or
(ii) willfully and knowingly commits a
substantial breach of a fiduciary duty of that person as a management official
and the violation or breach of fiduciary duty is one involving personal
dishonesty on the part of such management official.
(B) CONTENTS OF NOTICE.—A notice under
subparagraph (A) shall contain a statement of the facts constituting grounds
therefore and shall fix a time and place at which a hearing, conducted pursuant
to sections 554, 556, and 557 of title 5, United States Code, will be held
thereon.
(C) HEARING.—
(i) TIMING.—A
hearing under subparagraph (B) shall be held not earlier than 30 days and later
than 60 days after the date of service of notice of the hearing, unless an
earlier or a later date is set by the Administrator at the request of—
(I) the management official, and for good
cause shown; or
(II) the Attorney General.
(ii) CONSENT.—Unless the management official
appears at a hearing under this paragraph in person or by a duly authorized
representative, the management official shall be deemed to have consented to
the issuance of an order of removal under subparagraph (A).
(D) ORDER OF REMOVAL.—
(i) IN
GENERAL.—In the event of consent under subparagraph (C)(ii), or if upon the
record made at a hearing under this subsection, the Administrator finds that
any of the grounds specified in the notice of removal has been established, the
Administrator may issue such orders of removal from office as the Administrator
deems appropriate.
(ii) EFFECTIVENESS.—An order under clause (i) shall—
(I) take effect 30 days after the date of
service upon the subject small business lending company or non-Federally
regulated lender and the management official concerned (except in the case of
an order issued upon consent as described in subparagraph (C)(ii), which shall
become effective at the time specified in such order); and
(II) remain effective and enforceable, except
to such extent as it is stayed, modified, terminated, or set aside by action of
the Administrator or a reviewing court in accordance with this section.
(3) AUTHORITY TO SUSPEND OR PROHIBIT
PARTICIPATION.—
(A) IN GENERAL.—In order to protect a small
business lending company, a non-Federally regulated lender or the interests of
the Administration or the United States, the Administrator may suspend from
office or prohibit from further participation in any manner in the management
or conduct of the affairs of a small business lending company or a
non-Federally regulated lender a management official by written notice to such
effect served upon the management official.
Such suspension or prohibition may prohibit the management official from
making, servicing, reviewing, approving, or liquidating any loan under section
7(a) of this Act.
(B) EFFECTIVENESS.—A suspension or
prohibition under subparagraph (A)—
(i) shall take
effect upon service of notice under paragraph (2); and
(ii) unless stayed by a court in proceedings
authorized by subparagraph (C), shall remain in effect—
(I) pending the completion of the
administrative proceedings pursuant to a notice of intention to remove served
under paragraph (2); and
(II) until such time as the Administrator
dismisses the charges specified in the notice, or, if an order of removal or
prohibition is issued against the management official, until the effective date
of any such order.
(C) JUDICIAL REVIEW OF SUSPENSION PRIOR TO
HEARING.—Not later than 10 days after a management official is suspended or
prohibited from participation under subparagraph (A), the management official
may apply to an appropriate district court for a stay of the suspension or
prohibition pending the completion of the administrative proceedings pursuant
to a notice of intent to remove served upon the management official under
paragraph (2).
(4) AUTHORITY TO SUSPEND ON CRIMINAL
CHARGES.—
(A) IN GENERAL.—If a management official is
charged in any information, indictment, or complaint authorized by a United
States attorney, with a felony involving dishonesty or breach of trust, the
Administrator may, by written notice served upon the management official,
suspend the management official from office or prohibit the management official
from further participation in any manner in the management or conduct of the
affairs of the small business lending company or non-Federally regulated
lender.
(B) EFFECTIVENESS.—A suspension or
prohibition under subparagraph (A) shall remain in effect until the
information, indictment, or complaint is finally disposed of, or until
terminated by the Administrator or upon an order of a district court.
(C) AUTHORITY UPON CONVICTION.—If a judgment
of conviction with respect to an offense described in subparagraph (A) is
entered against a management official, then at such time as the judgment is not
subject to further judicial review (and for purposes of this subparagraph shall
not include any petition for a writ of habeas corpus), the Administrator may
issue and serve upon the management official an order removing the management
official, effective upon service of a copy of the order upon the small business
lending company or non-Federally regulated lender.
(D) AUTHORITY UPON DISMISSAL OR OTHER
DISPOSITION.—A finding of not guilty or other disposition of charges described
in subparagraph (A) shall not preclude the Administrator from instituting
proceedings under subsection (e) or (f).
(5) NOTIFICATION TO SMALL BUSINESS LENDING
COMPANY OR A NON-FEDERALLY REGULATED LENDER.—Copies of each notice required to
be served on a management official under this section shall also be served upon
the small business lending company or non-Federally regulated lender involved.
(6) FINAL AGENCY ACTION AND JUDICIAL
REVIEW.—
(A) ISSUANCE OF ORDERS.—After a hearing under
this subsection, and not later than 30 days after the Administrator notifies
the parties that the case has been submitted for final decision, the
Administrator shall render a decision in the matter (which shall include
findings of fact upon which its decision is predicated), and shall issue and
cause to be served upon each party to the proceeding an order or orders
consistent with this section. The
decision of the Administrator shall constitute final agency action for purposes
of chapter 7 of title 5, United States Code.
(B) JUDICIAL REVIEW.—An adversely aggrieved
party shall have 20 days from the date of issuance of the order to seek
judicial review in an appropriate district court.
(h) APPOINTMENT
OF RECEIVER.—
(1) In any proceeding under subsection
(f)(4) or subsection (g)(6)(C) [sic], the court may take exclusive jurisdiction
of a small business lending company or a non-Federally regulated lender and
appoint a receiver to hold and administer the assets of the company or lender.
(2) Upon request of the Administrator, the
court may appoint the Administrator as a receiver under paragraph (1).
(i) POSSESSION OF ASSETS.—
(1) If a small business lending company or a
non-Federally regulated lender is not in compliance with capital requirements
or is insolvent, the Administrator may take possession of the portfolio of
loans guaranteed by the Administrator and sell such loans to a third party by
means of a receiver appointed under subsection (h).
(2) If a small business lending company or a
non-Federally regulated lender is not in compliance with capital requirements
or is insolvent or otherwise operating in an unsafe and unsound condition, the
Administrator may take possession of servicing activities of loans that are
guaranteed by the Administrator and sell such servicing rights to a third party
by means of a receiver appointed under subsection (h).
(j) PENALTIES
AND FORFEITURES.—
(1) Except as provided in paragraph (2), a
small business lending company or a non-Federally regulated lender which
violates any regulation or written directive issued by the Administrator
regarding the filing of any regular or special report shall pay to the United
States a civil penalty of not more than $5,000 for each day of the continuance
of the failure to file such report, unless it is shown that such failure is due
to reasonable cause and not due to willful neglect. The civil penalties under this subsection may
be enforced in a civil action brought by the Administrator. The penalties under this subsection shall not
apply to any affiliate of a small business lending company that procures at
least 10 percent of its annual purchasing requirements from small
manufacturers.
(2) The Administrator may by rules and regulations that shall be codified in the Code of Federal Regulations, after an opportunity for notice and comment, or upon application of an interested party, at any time previous to such failure, by order, after notice and opportunity for hearing which shall be conducted pursuant to sections 554, 556, and 557 of title 5, United States Code, exempt in whole or in part, any small business lending company or non-Federally regulated lender from paragraph (1), upon such terms and conditions and for such period of time as it deems necessary and appropriate, if the Administrator finds that such action is not inconsistent with the public interest or the protection of the Administration. The Administrator may for the purposes of this section make any alternative requirements appropriate to the situation.
§ 24. (a) The Administrator is authorized to make grants to or to enter into contracts with any State for the purpose of contracting with small businesses to plant trees on land owned or controlled by such State or local government. The Administrator shall require as a condition of any grant (or amendment or modification thereof) under this section that the applicant also contribute to the project a sum equal to at least 25 per centum of a particular project cost from sources other than the Federal Government. Such non‑Federal money may include inkind contributions, including the cost or value of providing care and maintenance for a period of three years after the planting of the trees, but shall not include any value attributable to the land on which the trees are to be planted, nor may any part of any grant be used to pay for land or land charges: Provided, That not less than one‑half of the amounts appropriated under this section shall be allocated to each State, the District of Columbia, and the Commonwealth of Puerto Rico on the basis of the population in each area as compared to the total population in all areas as provided by the Census Bureau of the Department of Commerce in the annual population estimate or the decennial census, whichever is most current. The Administrator may give a priority in awarding the remaining one‑half of appropriated amounts to applicants who agree to contribute more than the requisite 25 per centum, and shall give priority to a proposal to restore an area determined to be a major disaster by the President on a date not more than three years prior to the fiscal year for which the application is made.
(b) In order to accomplish the objectives of this section, the Administrator, in consultation with appropriate Federal agencies, shall be responsible for formulating a national small business tree planting program. Based on this program, a State may submit a detailed proposal for tree planting by contract.
(c) To encourage and develop the capacity of small business concerns, to utilize this important segment of our economy, and to permit rapid increases in employment opportunities in local communities, grantees are directed to utilize small business contractors or concerns in connection with the program established by this section, and shall, to the extent practicable, divide the project to allow more than one small business concern to perform the work under the project.
(d) For purposes of this section, agencies of the Federal Government are hereby authorized to cooperate with all grantees and with State foresters or other appropriate officials by providing without charge, in furtherance of this program, technical services with respect to the planting and growing of such trees.
(e) There are authorized to be appropriated to carry out the objectives of this section, $15,000,000 for fiscal year 1991 and $30,000,000 for each of the fiscal years 1992 through 1994, and all of such sums may remain available until expended.
(f) Notwithstanding any other law, rule, or regulation, the administration shall publish in the Federal Register proposed rules and regulations implementing this section within sixty days after the date of enactment of this section and shall publish final rules and regulations within one hundred and twenty days of the date of enactment of this section.
(g) As used in this section:
(1) the term "local government" includes political subdivisions of a State such as counties, parishes, cities, towns and municipalities;
(2) the term "planting" includes watering, application of fertilizer and herbicides, pruning and shaping, and other subsequent care and maintenance for a period of three years after the trees are planted; and
(3) the term "State" includes any agency thereof.
(h) The Administrator shall submit annually to the President and the Congress a report on activities within the scope of this section.
§ 25. (a) There is hereby established a Central European Small Business Enterprise Development Commission (hereinafter in this section referred to as the "Commission"). The Commission shall be comprised of a representative of each of the following: the Small Business Administration, the Association of American Universities, and the Association of Small Business Development Centers.
(b) The
Commission shall develop in
(1) Not later than 90 days after the effective date of this section, the Commission, in consultation with the Agency for International Development, shall enter a contract with one or more entities to—
(A) determine the needs of small businesses in the designated Central European countries for management and technical assistance;
(B) evaluate appropriate Small Business Development Center‑programs [sic] which might be replicated in order to meet the needs of each of such countries; and
(C) identify and assess the capability of
educational institutions in each such country to develop a
(2) Not later than 18 months after the effective date of this section, the Commission shall review the recommendations submitted to it and shall formulate and contract for the establishment of a three‑year management and technical assistance demonstration program.
(c) In order to be eligible to participate, the educational institution in each designated Central European country shall—
(1) obtain the prior approval of the government to conduct the program;
(2) agree to provide partial financial support for the program, either directly or indirectly, during the second and third years of the demonstration program; and
(3) agree to obtain private sector involvement in the delivery of assistance under the program.
(d) The Commission shall meet and organize not later than 30 days after the date of enactment of this section.
(e) Members of the Commission shall serve without pay, except they shall be entitled to reimbursement for travel, subsistence, and other necessary expenses incurred by them in carrying out their functions in the same manner as persons employed intermittently in the Federal Government are allowed expenses under section 5703 of title 5, United States Code.
(f) Two Commissioners shall constitute a quorum for the transaction of business. Meetings shall be at the call of the Chairperson who shall be elected by the Members of the Commission.
(g) The Commission shall not have any authority to appoint staff, but upon request of the Chairperson, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of such department or agency to the Commission to assist in carrying out the Commission's functions under this section without regard to section 3341 of title 5 of the United States Code. The Administrator of the General Services Administration shall provide, on a reimbursable basis, such administrative support services as the Commission may request.
(h) The Commission shall report to Congress not later than December 1, 1991, and annually thereafter, on the progress in carrying out the provisions of this section.
(i) There are hereby authorized to be appropriated to the Small Business Administration the sum of $3,000,000 for fiscal year 1991, $5,000,000 for fiscal year 1992, $2,000,000 for each of fiscal years 1993 and 1994, and $1,000,000 for fiscal year 1995 to carry out the provisions of this section. Such sums shall be disbursed by the Small Business Administration as requested by the Commission and may remain available until expended. Any authority to enter contracts or other spending authority provided for in this section is subject to amounts provided for in advance in appropriations Acts.
§ 26. (a) There is hereby established in the Small Business Administration an Office of Rural Affairs (hereafter in this section referred to as the "Office").
(b) The Office shall be headed by a director who shall be appointed by the Administrator not later than 90 days after the date of the enactment of this section.
(c) The Office shall—
(1) strive to achieve an equitable distribution of the financial assistance available from the Administration for small business concerns located in rural areas;
(2) to the extent practicable, compile annual statistics on rural areas, including statistics concerning the population, 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 the Administration and through other Federal departments and 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 which improve the economic opportunities of rural citizens; and
(5) work with the United States Tourism and Travel Administration to assist small businesses in rural areas with tourism promotion and development.
§ 27. 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 expectations for workplace behavior, prohibitions against reporting to work or working under the influence of illegal drugs or alcohol, prohibitions against the use or possession of illegal drugs in the workplace, and the consequences of violating those expectations and prohibitions;
(B) drug and alcohol abuse prevention training for a total of not less than 2 hours for each employee, and additional voluntary drug and alcohol abuse prevention training for employees who are parents;
(C) employee illegal drug testing, 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 a review of each positive test result by a medical review officer;
(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
(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 any—
(A) applicant for employment;
(B) employee;
(C) supervisor;
(D) manager;
(E) officer of a small business concern who is active in management of the concern; and
(F) owner of a small business concern who is active in management of the concern.
(4) MEDICAL REVIEW OFFICER.—The term “medical review officer”—
(A) means a licensed physician with knowledge of substance abuse disorders; and
(B) does not include any—
(i) employee of the small business concern; or
(ii) employee or agent of, or any person having a financial interest in, the laboratory for which the illegal drug test results are being reviewed.
(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 one or more small
business development centers, technical assistance to small business concerns
seeking to establish a drug-free workplace program.
(3) 2-YEAR GRANTS.—Each 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.—Each
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. Such system shall conform to such
requirements as the Administrator, after consultation with the Director of the
Center for Substance Abuse and Prevention, may prescribe. Not more than 5 percent of the amount of each
grant made under subsection (b) shall be used by the eligible intermediary to
carry out this paragraph.
(B) METHOD OF EVALUATION.—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). Such assistance shall include the identification of additional information suitable for measuring the benefits of drug-free workplace programs to the small business concern and to the concern’s employees and the identification of methods suitable for analyzing such information.
(d) EVALUATION AND COORDINATION. Not later than 18 months after the date of enactment of the Drug-Free Workplace Act of 1998, the Administrator, in coordination with the Secretary of Labor, the Secretary of Health and Human Services, and the Director of National Drug Control Policy, shall—
(1) evaluate the drug-free workplace programs established with assistance made available under this section; and
(2) submit to Congress a report describing the results of the evaluation under paragraph (1).
(e) CONTRACT AUTHORITY.—In carrying out this section, the Administrator may—
(1) contract with public and private entities to provide assistance related to carrying out the program under this section; and
(2) compensate those entities for provision of that assistance.
(f) CONSTRUCTION.—Nothing in this section may be construed to require an employer who attends a program offered by an intermediary to contract for any service offered by the intermediary.
(g) AUTHORIZATION.—
(1) IN GENERAL.—There is authorized to be
appropriated to carry out this section, (other than subsection (b)(2)),
$5,000,000 for each of fiscal years 2005 and 2006. Amounts made 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 21(c)(3)(T).
(3) ADDITIONAL AUTHORIZATION FOR TECHNICAL
ASSISTANCE GRANTS.—There are authorized to be appropriated to carry out
subsection (b)(2), $1,500,000 for each of fiscal years 2005 and 2006. Amounts made available under this paragraph
shall 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).
§ 28. PILOT TECHNOLOGY ACCESS PROGRAM.
(a) The Administration, in consultation with the National Institute of Standards and Technology and the National Technical Information Service, shall establish a Pilot Technology Access Program, for making awards under this section to Small Business Development Centers (hereinafter in this section referred to as "Centers").
(b) The Administrator of the Small Business Administration shall establish competitive, merit-based criteria for the selection of Centers to receive awards on the basis of—
(1) the ability of the applicant to carry out the purposes described in subsection (d) in a manner relevant to the needs of industries in the area served by the Center;
(2) the ability of the applicant to integrate the implementation of this program with existing Federal and State technical and business assistance resources; and
(3) the ability of the applicant to continue providing technology access after the termination of this pilot program.
(c) To be eligible to receive an award under this section, an applicant shall provide a matching contribution at least equal to that received under such award, not more than 50 percent of which may be waived overhead or in-kind contributions.
(d) Awards made under this section shall be for the purpose of increasing access by small businesses to on-line data base services that provide technical and business information, and access to technical experts, in a wide range of technologies, through such activities as—
(1) defraying the cost of access by small businesses to the data base services;
(2) training small businesses in the use of the data base services; and
(3) establishing a public point of access to the data base services.
Activities described in paragraphs (1) through (3) may be carried out through contract with a private entity.
(e) Awards previously made under section 21A of this Act may be renewed under this section.
(f) Two years after the date on which the first award was issued under section 21A of this Act, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science, and Transportation of the Senate, an interim report on the implementation of the program under such section and this section, including the judgments of the participating Centers as to its effect on small business productivity and innovation.
(g) Three years after such date, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science and Transportation of the Senate, a final report evaluating the effectiveness of the Program under section 21A and this section in improving small business productivity and innovation.
(h) There are authorized to be appropriated to the Small Business Administration $5 million for each of fiscal years 1992 through 1995 to carry out this section, and such amounts may remain available until expended.
(i) Centers are encouraged to seek funding from Federal and non-Federal sources other than those provided for in this section to assist small businesses in the identification of appropriate technologies to fill their needs, the transfer of technologies from Federal laboratories, public and private universities, and other public and private institutions, the analysis of commercial opportunities represented by such technologies, and such other functions as the development business Planning, market research, and financial packaging required for commercialization. Insofar as such Centers pursue these activities, Federal agencies are encouraged to employ these Centers to interface with small businesses for such purposes as facilitating small business participation in Federal procurement and fostering commercialization of Federally-funded research and development.
§ 29. WOMEN’S BUSINESS CENTER PROGRAM.
(a) DEFINITIONS - In this section—
(1) the term “Assistant Administrator” means the Assistant Administrator of the Office of Women’s Business Ownership established under subsection (g);
(2) the term “private nonprofit organization” means an entity that is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code;
(3) the term “small business concern owned and controlled by women”, either startup or existing, includes any small business concern—
(A) that is not less than 51 percent owned by 1 or more women; and
(B) the management and daily business operations of which are controlled by 1 or more women; and
(4) the term “women’s business center site” means the location of—
(A) a women’s business center; or
(B) 1 or more women’s business centers, established in conjunction with another women’s business center in another location within a State or region—
(i) that reach a distinct population that would otherwise not be served;
(ii) whose services are targeted to women; and
(iii) whose scope, function, and activities are similar to those of the primary women’s business center or centers in conjunction with which it was established.
(b) AUTHORITY.—The Administration may provide financial assistance to private nonprofit organizations to conduct 5-year projects for the benefit of small business concerns owned and controlled by women. The projects shall provide—
(1) financial assistance, including training and counseling in how to apply for and secure business credit and investment capital, preparing and presenting financial statements, and managing cash flow and other financial operations of a business concern;
(2) management assistance, including training and counseling in how to Plan, organize, staff, direct, and control each major activity and function of a small business concern; and
(3) marketing assistance, including training and counseling in identifying and segmenting domestic and international market opportunities, preparing and executing marketing Plans, developing pricing strategies, locating contract opportunities, negotiating contracts, and utilizing varying public relations and advertising techniques.
(c) CONDITIONS OF PARTICIPATION—
(1) NON-FEDERAL CONTRIBUTIONS.—As a condition of receiving financial assistance authorized by this section, the recipient organization shall agree to obtain, after its application has been approved and notice of award has been issue, cash contributions from non-Federal sources as follows:
(A) in the first and second years, 1 non-Federal dollar for each 2 Federal dollars; and
(B) in the third, fourth, and fifth years, 1 non-Federal dollar for each Federal dollar.
(2) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more than one-half of the non-Federal sector matching assistance may be in the form of in-kind contributions that are budget line items only, including office equipment and office space.
(3) FORM OF FEDERAL CONTRIBUTIONS.—The financial assistance authorized pursuant to this section may be made by grant, contract, or cooperative agreement and may contain such provision, as necessary, to provide for payments in lump sum or installments, and in advance or by way of reimbursement. The Administration may disburse up to 25 percent of each year’s Federal share awarded to a recipient organization after notice of the award has been issued and before the non-Federal sector matching funds are obtained.
(4) FAILURE TO OBTAIN NON-FEDERAL FUNDING.—If any recipient of assistance fails to obtain the required non-Federal contribution during any project, it shall not be eligible thereafter for advance disbursements pursuant to paragraph (3) during the remainder of that project, or for any other project for which it is or may be funded by the Administration, and prior to approving assistance to such organization for any other projects, the Administration shall specifically determine whether the Administration believes that the recipient will be able to obtain the requisite non-Federal funding and enter a written finding setting forth the reasons for making such determination.
(d) CONTRACT AUTHORITY.—A women’s business center may enter into a contract with a Federal department or agency to provide specific assistance to women and other underserved small business concerns. Performance of such contract should not hinder the women's business centers in carrying out the terms of the grant received by the women's business centers from the Administration.
(e) SUBMISSION OF 5-YEAR PLAN.—Each applicant organization initially shall submit a 5-year Plan to the Administration on proposed fundraising and training activities, and a recipient organization may receive financial assistance under this program for a maximum of 5 years per women's business center site.
(f) CRITERIA.—The Administration shall evaluate and rank applicants in accordance with predetermined selection criteria that shall be stated in terms of relative importance. Such criteria and their relative importance shall be made publicly available and stated in each solicitation for applications made by the Administration. The criteria shall include—
(1) the experience of the applicant in conducting programs or ongoing efforts designed to impart or upgrade the business skills of women business owners or potential owners;
(2) the present ability of the applicant to commence a project within a minimum amount of time;
(3) the ability of the applicant to provide training and 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.
(g) OFFICE OF WOMEN’S BUSINESS OWNERSHIP—
(1) ESTABLISHMENT.—There is established within the Administration an Office of Women’s Business Ownership, which shall be responsible for the administration of the Administration’s programs for the development of women's business enterprises (as defined in section 408 of the Women’s Business Ownership Act of 1988 (15 U.S.C. 631 note)). The Office of Women’s Business Ownership shall be administered by an Assistant Administrator, who shall be appointed by the Administrator.
(2) ASSISTANT ADMINISTRATOR OF THE OFFICE OF WOMEN’S BUSINESS OWNERSHIP—
(A) QUALIFICATIONS.—The position of Assistant Administrator shall be a Senior Executive Service position under section 3132(a)(2) of title 5, United States Code. The Assistant Administrator shall serve as a noncareer appointee (as defined in section 3132(a)(7) of that title).
(B) RESPONSIBILITIES AND DUTIES—
(i) RESPONSIBILITIES.—The responsibilities of the Assistant Administrator shall be to administer the programs and services of the Office of Women’s Business Ownership established to assist women entrepreneurs in the areas of—
(I) starting and operating a small business;
(II) development of management and technical skills;
(III) seeking Federal procurement opportunities; and
(IV) increasing the opportunity for access to capital.
(ii) DUTIES.—The Assistant Administrator shall—
(I) administer and manage the Women's
(II) recommend the annual administrative and
program budgets for the Office of Women’s Business Ownership (including the
budget for the Women's
(III) establish appropriate funding levels therefore;
(IV) review the annual budgets submitted by each applicant for the
Women's
(V) select applicants to participate in the program under this section
(VI) implement this section;
(VII) maintain a clearinghouse to provide for the dissemination and exchange of information between women's business centers;
(VIII) serve as the vice chairperson of the Interagency Committee on Women’s Business Enterprise;
(IX) serve as liaison for the National Women’s Business Council; and
(X) advise the Administrator on appointments to the Women’s Business Council.
(C) CONSULTATION REQUIREMENTS - In carrying out the responsibilities and duties described in this paragraph, the Assistant Administrator shall confer with and seek the advice of the Administration officials in areas served by the women's business centers.
(h) PROGRAM EXAMINATION.—
(1) IN GENERAL.—The Administration shall—
(A) develop and implement an annual programmatic and financial examination of each women’s business center established pursuant to this section, pursuant to which each such center shall provide to the Administration—
(i) an itemized cost breakdown of actual expenditures for costs incurred during the preceding year; and
(ii) documentation regarding the amount of matching assistance from non-Federal sources obtained and expended by the center during the preceding year in order to meet the requirements of subsection (c) and, with respect to any in-kind contributions described in subsection (c)(2) that were used to satisfy the requirements of subsection (c), verification of the existence and valuation of those contributions; and
(B) analyze the results of each such examination and, based on that analysis, make a determination regarding the programmatic and financial viability of each women’s business center.
(2) CONDITIONS FOR CONTINUED FUNDING.—In determining whether to award a contract (as a sustainability grant) under subsection (l) or to renew a contract (either as a grant or cooperative agreement) under this section with a women’s business center, the Administration—
(A) shall consider the results of the most recent examination of the center under paragraph (1); and
(B) may withhold such award or renewal, if the Administration determines that—
(i) the center has failed to provide any information required to be provided under clause (i) or (ii) of paragraph (1)(A), or the information provided by the center is inadequate; or
(ii) the center has failed to provide any information required to be provided by the center for purposes of the report of the Administration under subsection (j), or the information provided by the center is inadequate.
(i) CONTRACT AUTHORITY.—The authority of the Administrator to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the Administrator has entered into a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administrator provides the applicant with written notification setting forth the reasons therefore and affords the applicant an opportunity for a hearing, appeal, or other administrative proceeding under chapter 5 of title 5, United States Code.
(j) MANAGEMENT REPORT.—
(1) IN GENERAL.—The Administration shall prepare and submit to the Committees on Small Business of the House of Representatives and the Senate a report on the effectiveness of all projects conducted under this section.
(2) CONTENTS.—Each report submitted under paragraph (1) shall include information concerning, with respect to each women’s business center established pursuant to this section—
(A) the number of individuals receiving assistance;
(B) the number of startup business concerns formed;
(C) the gross receipts of assisted concerns;
(D) the employment increases or decreases of assisted concerns;
(E) to the maximum extent practicable, increases or decreases in profits of assisted concerns; and
(F) the most recent analysis, as required under subsection (h)(1)(B), and the subsequent determination made by the Administration under that subsection.
(k) AUTHORIZATION OF APPROPRIATIONS—
(1) IN GENERAL.—There is authorized to be appropriated, to remain available until the expiration of the pilot program under subsection (l)—
(A) $12,000,000 for fiscal year 2000;
(B) $12,800,000 for fiscal year 2001;
(C) $13,700,000 for fiscal year 2002; and
(D) $14,500,000 for fiscal year 2003.
(2) USE OF AMOUNTS.—
(A) IN GENERAL.—Except as provided in subparagraph (B), amounts made available under this subsection for fiscal year 1999, and each fiscal year thereafter, may only be used for grant awards and may not be used for costs incurred by the Administration in connection with the management and administration of the program under this section.
(B) EXCEPTIONS.—Of the amount made available under this subsection for a fiscal year, the following amounts shall be available for selection panel costs, post-award conference costs, and costs related to monitoring and oversight:
(i) For fiscal year 2000, 2 percent.
(ii) For fiscal year 2001, 1.9 percent.
(iii) For fiscal year 2002, 1.9 percent.
(iv) For fiscal year 2003, 1.6 percent.
(3) EXPEDITED ACQUISITION.—Notwithstanding any other provision of law, the Administrator, acting through the Assistant Administrator, may use such expedited acquisition methods as the Administrator determines to be appropriate to carry out this section, except that the Administrator shall ensure that all small business sources are provided a reasonable opportunity to submit proposals.
(4) RESERVATION OF FUNDS FOR SUSTAINABILITY PILOT PROGRAM.—
(A) IN GENERAL.—Subject to subparagraph (B), of the total amount made available under this subsection for a fiscal year, the following amounts shall be reserved for sustainability grants under subsection (l):
(i) For fiscal year 2000, 17 percent.
(ii) For fiscal year 2001, 18.8 percent.
(iii) For fiscal year 2002, 30.2 percent.
(iv) For fiscal year 2003, 30.2 percent.
(B) USE OF UNAWARDED FUNDS FOR SUSTAINABILITY PILOT PROGRAM GRANTS.—If the amount reserved under subparagraph (A) for any fiscal year is not fully awarded to private nonprofit organizations described in subsection (l)(1)(B), the Administration is authorized to use the unawarded amount to fund additional women’s business center sites or to increase funding of existing women’s business center sites under subsection (b).
(l) SUSTAINABILITY PILOT PROGRAM.—
(1) IN GENERAL.—There is established a 4-year pilot program under which the Administration is authorized to award grants (referred to in this section as “sustainability grants”) on a competitive basis for an additional 5-year project under this section to any private nonprofit organization (or a division thereof)—
(A) that has received financial assistance under this section pursuant to a grant, contract, or cooperative agreement; and
(B) that—
(i) is in the final year of a 5-year project; or
(ii) has completed a project financed under this section (or any predecessor to this section) and continues to provide assistance to women entrepreneurs.
(2) CONDITIONS FOR PARTICIPATION.—In order to receive a sustainability grant, an organization described in paragraph (1) shall submit to the Administration an application, which shall include—
(A) a certification that the applicant—
(i) is a private nonprofit organization;
(ii) employs a full-time executive director or program manager to manage the center; and
(iii) as a condition of receiving a sustainability grant, agrees—
(I) to a site visit as part of the final selection process and to an annual programmatic and financial examination; and
(II) to the maximum extent practicable, to remedy any problems identified pursuant to that site visit or examination;
(B) information demonstrating that the applicant has the ability and resources to meet the needs of the market to be served by the women’s business center site for which a sustainability grant is sought, including the ability to fundraise;
(C) information relating to assistance provided by the women’s business center site for which a sustainability grant is sought in the area in which the site is located, including—
(i) the number of individuals assisted;
(ii) the number of hours of counseling, training, and workshops provided; and
(iii) the number of startup business concerns formed;
(D) information demonstrating the effective experience of the applicant in—
(i) conducting financial, management, and marketing assistance programs, as described in paragraphs (1), (2), and (3) of subsection (b), designed to impart or upgrade the business skills of women business owners or potential owners;
(ii) providing training and services to a representative number of women who are both socially and economically disadvantaged;
(iii) using resource partners of the Administration and other entities, such as universities;
(iv) complying with the cooperative agreement of the applicant; and
(v) the prudent management of finances and staffing, including the manner in which the performance of the applicant compared to the business Plan of the applicant and the manner in which grant funds awarded under subsection (b) were used by the applicant; and
(E) a 5-year Plan that projects the ability of the women’s business center site for which a sustainability grant is sought—
(i) to serve women business owners or potential owners in the future by improving fundraising and training activities; and
(ii) to provide training and services to a representative number of women who are both socially and economically disadvantaged.
(3) REVIEW OF APPLICATIONS.—
(A) IN GENERAL.—The Administration shall—
(i) review each application submitted under paragraph (2) based on the information provided in subparagraphs (D) and (E) of that paragraph, and the criteria set forth in subsection (f);
(ii) as part of the final selection process, conduct a site visit at each women’s business center for which a sustainability grant is sought; and
(iii) approve or disapprove applications for sustainability grants simultaneously with applications for grants under subsection (b).
(B) DATA COLLECTION.—Consistent with the annual report to Congress under subsection (j), each women’s business center site that is awarded a sustainability grant shall, to the maximum extent practicable, collect information relating to—
(i) the number of individuals assisted;
(ii) the number of hours of counseling and training provided and workshops conducted;
(iii) the number of startup business concerns formed;
(iv) any available gross receipts of assisted concerns; and
(v) the number of jobs created, maintained, or lost at assisted concerns.
(C) RECORD RETENTION.—The Administration shall maintain a copy of each application submitted under this subsection for not less than 10 years.
(4) NON-FEDERAL CONTRIBUTION.—
(A) IN GENERAL.—Notwithstanding any other provision of this section, as a condition of receiving a sustainability grant, an organization described in paragraph (1) shall agree to obtain, after its application has been approved under paragraph (3) and notice of award has been issued, cash and in-kind contributions from non-Federal sources for each year of additional program participation in an amount equal to 1 non-Federal dollar for each Federal dollar.
(B) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more than 50 percent of the non-Federal assistance obtained for purposes of subparagraph (A) may be in the form of in-kind contributions that are budget line items only, including office equipment and office space.
(5) TIMING OF REQUESTS FOR PROPOSALS..—In carrying out this subsection, the Administration shall issue requests for proposals for women’s business centers applying for the pilot program under this subsection simultaneously with requests for proposals for grants under subsection (b).
§ 30. OVERSIGHT OF REGULATORY ENFORCEMENT.
(a) DEFINITIONS.—For purposes of this section, the term—
(1) "Board" means a Regional Small Business Regulatory Fairness Board established under subsection (c); and
(2) "Ombudsman" means the Small Business and Agriculture Regulatory Enforcement Ombudsman designated under subsection (b).
(b) SBA ENFORCEMENT OMBUDSMAN.—
(1) Not later than 180 days after the date of enactment of this section, the Administrator shall designate a Small Business and Agriculture Regulatory Enforcement Ombudsman, who shall report directly to the Administrator, utilizing personnel of the Small Business Administration to the extent practicable. Other agencies shall assist the Ombudsman and take actions as necessary to ensure compliance with the requirements of this section. Nothing in this section is intended to replace or diminish the activities of any Ombudsman or similar office in any other agency.
(2) The Ombudsman shall—
(A) work with each agency with regulatory authority over small businesses to ensure that small business concerns that receive or are subject to an audit, on-site inspection, compliance assistance effort, or other enforcement related communication or contact by agency personnel are provided with a means to comment on the enforcement activity conducted by such personnel;
(B) establish means to receive comments from small business concerns regarding actions by agency employees conducting compliance or enforcement activities with respect to the small business concern, means to refer comments to the Inspector General of the affected agency in the appropriate circumstances, and otherwise seek to maintain the identity of the person and small business concern making such comments on a confidential basis to the same extent as employee identities are protected under section 7 of the Inspector General Act of 1978 (5 U.S.C. App.);
(C) based on substantiated comments received from small business concerns and the Boards, annually report to Congress and affected agencies evaluating the enforcement activities of agency personnel including a rating of the responsiveness to small business of the various regional and program offices of each agency;
(D) coordinate and report annually on the activities, findings and recommendations of the Boards to the Administrator and to the heads of affected agencies; and
(E) provide the affected agency with an opportunity to comment on draft reports prepared under subparagraph (C), and include a section of the final report in which the affected agency may make such comments as are not addressed by the Ombudsman in revisions to the draft.
(c) REGIONAL SMALL BUSINESS REGULATORY FAIRNESS BOARDS.—
(1) Not later than 180 days after the date of enactment of this section, the Administrator shall establish a Small Business Regulatory Fairness Board in each regional office of the Small Business Administration.
(2) Each Board established under paragraph (1) shall—
(A) meet at least annually to advise the Ombudsman on matters of concern to small businesses relating to the enforcement activities of agencies;
(B) report to the Ombudsman on substantiated instances of excessive enforcement actions of agencies against small business concerns including any findings or recommendations of the Board as to agency enforcement policy or practice; and
(C) prior to publication, provide comment on the annual report of the Ombudsman prepared under subsection (b).
(3) Each Board shall consist of five 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 Committees on Small Business of the House of Representatives and the Senate. Not more than three of the Board members shall be of the same political party. No member shall be an officer or employee of the Federal Government, in either the executive branch or the Congress.
(4) Members of the Board shall serve at the Pleasure of the Administrator for terms of three years or less.
(5) The Administrator shall select a chair from among the members of the Board who shall serve at the Pleasure of the Administrator for not more than 1 year as chair.
(6) A majority of the members of the Board shall constitute a quorum for the conduct of business, but a lesser number may hold hearings.
(d) POWERS OF THE BOARDS.
(1) The Board may hold such hearings and collect such information as appropriate for carrying out this section.
(2) The Board may use the
(3) The Board may accept donations of services necessary to conduct its business, provided that the donations and their sources are disclosed by the Board.
(4) Members of the Board shall serve without compensation, provided that, members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular Places of business in the performance of services for the Board.
§ 31. HUBZONE PROGRAM
(a) IN GENERAL.—There is established within the Administration a program to be carried out by the Administrator to provide for Federal contracting assistance to qualified HUBZone small business concerns in accordance with this section.
(b) ELIGIBLE CONTRACTS—
(1) DEFINITIONS .—In this subsection—
(A) the term “contracting officer” has the meaning given that term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5); and
(B) the term “full and open competition” has the meaning given that term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).
(2) AUTHORITY OF CONTRACTING OFFICER.—Notwithstanding any other provision of law—
(A) a contracting officer may award sole source contracts under this section to any qualified HUBZone small business concern, if—
(i) the qualified HUBZone small business concern is determined to be a responsible contractor with respect to performance of such contract opportunity, and the contracting officer does not have a reasonable expectation that 2 or more qualified HUBZone small business concerns will submit offers for the contracting opportunity;
(ii) the anticipated award price of he contract (including options) will not exceed—
(I) $5,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or
(II) $3,000,000, in the case of all other contract opportunities; and
(iii) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price;
(B) a contract opportunity shall be awarded pursuant to this section on the basis of competition restricted to qualified HUBZone small business concerns if the contracting officer has a reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price; and
(C) not later than 5 days from the date the Administration is notified of a procurement officer’s decision not to award a contract opportunity under this section 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 of such date the Administrator may file a written request for reconsideration of the contracting officer’s decision with the Secretary of the department or agency head.
(3) PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITIONS.—
(A) IN GENERAL.—Subject to subparagraph (B), in any case in which a contract is to be awarded on the basis of full and open competition, the price offered by a qualified HUBZone small business concern shall be deemed as being lower than the price offered by another offeror (other than another small business concern), if the price offered by the qualified HUBZone small business concern is not more than 10 percent higher than the price offered by the otherwise lowest, responsive, and responsible offeror.
(B) PROCUREMENT OF COMMODITIES.—For purchases by the Secretary of Agriculture of agricultural commodities, the price evaluation preferences shall be—
(i) 10 percent, for the portion of a contract to be awarded that is not greater than 25 percent of the total volume being procured for each commodity in a single invitation;
(ii) 5 percent, for the portion of a contract to be awarded that is greater than 25 percent, but not greater than 40 percent, of the total volume being procured for each commodity in a single invitation; and
(iii) zero, for the portion of a contract to be awarded that is greater than 40 percent of the total volume being procured for each commodity in a single invitation.
(C) PROCUREMENT OF COMMODITIES FOR INTERNATIONAL FOOD AID EXPORT OPERATIONS.—The price evaluation preference for purchases of agricultural commodities by the Secretary of Agriculture for export operations through international food aid programs administered by the Farm Service Agency shall be 5 percent on the first portion of a contract to be awarded that is not greater than 20 percent of the total volume of each commodity being procured in a single invitation.
(D) TREATMENT OF PREFERENCE.—A contract awarded to a HUBZone small business concern under a preference described in subparagraph (B) shall not be counted toward the fulfillment of any requirement partially set aside for competition restricted to small business concerns.
(4) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—A procurement may not be made from a source on the basis of a preference provided in paragraph (2) or (3), if the procurement would otherwise be made from a different source under section 4124 or 4125 of title 18, United States Code, or the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.).
(c) ENFORCEMENT; PENALTIES—
(1) VERIFICATION OF ELIGIBILITY.—In carrying out this section, the Administrator shall establish procedures relating to—
(A) the filing, investigation, and disposition by the Administration of any challenge to the eligibility of a small business concern to receive assistance under this section (including a challenge, filed by an interested party, relating to the veracity of a certification made or information provided to the Administration by a small business concern under section 3(p)(5); and
(B) verification by the Administrator of the accuracy of any certification made or information provided to the Administration by a small business concern under section 3(p)(5).
(2) EXAMINATIONS.—The procedures established under paragraph (1) may provide for program examinations (including random program examinations) by the Administrator of any small business concern making a certification or providing information to the Administrator under section 3(p)(5).
(3) PROVISION OF DATA.—Upon the request of the Administrator, the Secretary of Labor, the Secretary of Housing and Urban Development, and the Secretary of the Interior (or the Assistant Secretary for Indian Affairs), shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out this subsection.
(4) PENALTIES.—In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a “HUBZone small business concern” for purposes of this section, shall be subject to—
(A) section 1001 of title 18, United States Code; and
(B) sections 3729 through 3733 of title 31, United States Code.
(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out the program established by this section $10,000,000 for each of fiscal years 2004 through 2006.
§ 32. VETERANS PROGRAMS.
(a) OFFICE OF VETERANS BUSINESS DEVELOPMENT.—There is established in the Administration an Office of Veterans Business Development, which shall be administered by the Associate Administrator for Veterans Business Development (in this section referred to as the “Associate Administrator”) appointed under section 4(b)(1).
(b) ASSOCIATE ADMINISTRATOR FOR VETERANS BUSINESS DEVELOPMENT.—The Associate Administrator—
(1) shall be an appointee in the Senior Executive Service;
(2) shall be responsible for the formulation, execution, and promotion of policies and programs of the Administration that provide assistance to small business concerns owned and controlled by veterans and small business concerns owned and controlled by service-disabled veterans. The Associate Administrator shall act as an ombudsman for full consideration of veterans in all programs of the Administration; and
(3) shall report to and be responsible directly to the Administrator.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this
section—
(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
§ 33. NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION.
(a) ESTABLISHMENT.—There is established a federally chartered corporation to be known as the National Veterans Business Development Corporation (in this section referred to as the “Corporation”) which shall be incorporated under the laws of the District of Columbia and which shall have the powers granted in this section. Notwithstanding any other provision of law, the Corporation is a private entity and is not an agency, instrumentality, authority, entity, or establishment of the United States Government.
(b) PURPOSES OF THE CORPORATION.—The purposes of the Corporation shall be—
(1) to expand the provision of and improve access to technical assistance regarding entrepreneurship for the Nation’s veterans; and
(2) to assist veterans, including service-disabled veterans, with the formation and expansion of small business concerns by working with and organizing public and private resources, including those of the Small Business Administration, the Department of Veterans Affairs, the Department of Labor, the Department of Commerce, the Department of Defense, the Service Corps of Retired Executives (described in section 8(b)(1)(B) of this Act), the Small Business Development Centers (described in section 21 of this Act), and the business development staffs of each department and agency of the United States.
(c) BOARD OF DIRECTORS.—
(1) IN GENERAL.—The management of the Corporation shall be vested in a Board of Directors composed of nine voting members and three nonvoting ex officio members.
(2) APPOINTMENT OF VOTING MEMBERS.—The President shall, after considering recommendations which shall be proposed by the Chairmen and Ranking Members of the Committees on Small Business and the Committees on Veterans Affairs of the House of Representatives and the Senate, appoint United States citizens to be voting members of the Board, not more than five of whom shall be members of the same political party.
(3) EX OFFICIO MEMBERS.—The Administrator of the Small Business Administration, the Secretary of Defense, and the Secretary of Veterans Affairs shall serve as the nonvoting ex officio members of the Board of Directors.
(4) INITIAL APPOINTMENTS.—The initial members of the Board of Directors shall be appointed non later than 60 days after the date of enactment of this Act.
(5) CHAIRPERSON.—The members of the Board of Directors appointed under paragraph (2) shall elect one such member to serve as chairperson of the Board of Directors for a term of 2 years.
(6) TERMS OF APPOINTED MEMBERS.—
(A) IN GENERAL.—Each member of the Board of Directors appointed under paragraph (2) shall serve a term of 6 years, except as provided in subparagraph (B).
(B) TERMS OF INITIAL APPOINTEES.—As designated by the President at the time of appointment, of the members first appointed—
(i) three shall be for a term of 2 years; and
(ii) three shall be for a term of 4 years.
(C) UNEXPIRED TERMS.—Any member of the board of Directors appointed to fill a vacancy occurring before the expiration of the term for which the member’s predecessor was appointed shall be appointed only for the remainder of the term. A member may serve after the expiration of that member’s term until a successor has taken office.
(7) VACANCIES.—Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made. In the case of a vacancy in the office of the Administrator of the Small Business Administration or the Secretary of Veterans Affairs, and pending the appointment of a successor, an acting appointee for such vacancy may serve as an ex officio member.
(8) INELIGIBILITY FOR OTHER OFFICES.—No
voting member of the Board of directors may be an officer or employee of the
(9) IMPARTIALITY AND NONDISCRIMINATION.—The Board of Directors shall administer the affairs of the Corporation fairly and impartially and without discrimination.
(10) OBLIGATIONS AND EXPENSES.—The Board of Directors shall prescribe the manner in which the obligations of the Corporation may be incurred and in which its expenses shall be allowed and paid.
(11) QUORUM.—Five voting members of the Board of Directors shall constitute a quorum, but a lesser number may hold hearings.
(d) CORPORATE POWERS.—On October 1, 1999, the Corporation shall become a body corporate and as such shall have the authority to do the following:
(1) To adopt and use a corporate seal.
(2) To have succession until dissolved by an Act of Congress.
(3) To make contracts or grants.
(4) To sue and be sued, and to file and defend against lawsuits in State or Federal court.
(5) To appoint, through the actions of its Board of Directors, officers and employees of the Corporation, to define their duties and responsibilities, fix their compensations, and to dismiss at will such officers or employees.
(6) To prescribe, through the actions of its Board of Directors, bylaws not inconsistent with Federal law and the law of the State of incorporation, regulating the manner in which its general business may be conducted and the manner in which the privileges granted to it by law may be exercised.
(7) To exercise, through the actions of its Board of Directors or duly authorized officers, all powers specifically granted by the provisions of this section, and such incidental powers as shall be necessary.
(8) To solicit, receive, and disburse funds from private, Federal, State and local organizations.
(9) To accept and employ or dispose of in furtherance of the purposes of this section any money or property, real, personal, or mixed, tangible or intangible, received by gift, devise, bequest, or otherwise.
(10) To accept voluntary and uncompensated services.
(e) CORPORATE FUNDS.—
(1) DEPOSIT OF FUNDS.—The board of Directors shall deposit all funds of the Corporation in federally chartered and insured depository institutions until such funds are disbursed under paragraph (2).
(2) DISBURSEMENT OF FUNDS.—Funds of the Corporation may be disbursed only for purposes that are—
(A) approved by the Board of Directors by a recorded vote with a quorum present; and
(B) in accordance with the purposes of the Corporation as specified in subsection (b).
(f) NETWORK OF INFORMATION AND ASSISTANCE CENTERS.—In carrying out the purpose described in subsection (b), the Corporation shall establish and maintain a network of information and assistance centers for use by veterans and the public.
(g) ANNUAL REPORT.—On or before October 1 of each year, the Board of Directors shall transmit a report to the President and the Congress describing the activities and accomplishments of the Corporation for the preceding year and the Corporation’s findings regarding the efforts of Federal, State and private organizations to assist veterans in the formation and expansion of small business concerns.
(h) ASSUMPTION OF DUTIES OF ADVISORY COMMITTEE.—On October 1, 2006, the Corporation established under this section shall assume the duties, responsibilities, and authority of the Advisory Committee on Veterans Affairs established under section 203 of this Act.
(i) USE OF MAILS.—The Corporation may use
the
(j) PROFESSIONAL CERTIFICATION ADVISORY BOARD.—
(1) IN GENERAL.—Acting through the Board of Directors, the Corporation shall establish a Professional Certification Advisory Board to create uniform guidelines and standards for the professional certification of members of the Armed Services to aid in their efficient and orderly transition to civilian occupations and professions and to remove potential barriers in the areas of licensure and certification.
(2) MEMBERSHIP.—The members of the Advisory
Board shall serve without compensation, shall meet in the
(A) PRIVATE SECTOR MEMBERS.—The Corporation shall appoint not less than seven members for terms of 2 years to represent private sector organizations and associations, including the American Association of Community Colleges, the Society for Human Resource Managers, the Coalition for Professional Certification, the Council on Licensure and Enforcement, and the American Legion.
(B) PUBLIC SECTOR MEMBERS.—The Corporation shall invite public sector members to serve at the discretion of their departments or agencies and shall—
(i) encourage the participation of the Under Secretary of Defense for Personnel and Readiness;
(ii) encourage the participation of two officers from each branch of the Armed Forces to represent the Training Commands of their branch; and
(iii) seek the participation and guidance of the Assistant Secretary of Labor for Veterans’ Employment.
(k) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—Subject to paragraph (2), there are authorized to be appropriated to the Corporation to carry out this section—
(A) $4,000,000 for fiscal year 2001;
(B) $4,000,000 for fiscal year 2002;
(C) $2,000,000 for fiscal year 2003; and
(D) $2,000,000 for fiscal year 2004.
(2) MATCHING REQUIREMENT.—
(A) FISCAL YEAR 2002.—The amount made available to the Corporation for fiscal year 2002 may not exceed twice the amount that the Corporation certifies that it will provide for that fiscal year from sources other than the Federal Government.
(B) SUBSEQUENT FISCAL YEARS.—The amount made available to the Corporation for fiscal year 2003 or 2004 may not exceed the amount that the Corporation certifies that it will provide for that fiscal year from sources other than the Federal Government.
(3) PRIVATIZATION.—The Corporation shall institute and implement a Plan to raise private funds and become a self-sustaining corporation.
§ 34. FEDERAL AND STATE TECHNOLOGY PARTNERSHIP PROGRAM.
(a) DEFINITIONS.—In this section and section 35, the following definitions apply:
(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 provide advice and assistance on matters described in section 35(c)(2)(B) to small business concerns to guide them through the SBIR and STTR program process, from application to award and successful completion of each phase of the program.
(3) FAST PROGRAM.—The term “FAST program” means the Federal and State Technology Partnership Program established under this section.
(4) MENTOR.—The term “mentor” means an individual described in section 35(c)(2).
(5) MENTORING NETWORK.—The term “Mentoring Network” means an association, organization, coalition, or other entity (including an individual) that meets the requirements of section 35(c).
(6) RECIPIENT.—The term “recipient” means a person that receives an award or becomes party to a cooperative agreement under this section.
(7) SBIR PROGRAM.—The term “SBIR program” has the same meaning as in section 9(e)(4).
(8) STATE.—The term “State” means each of
the several States, the
(9) STTR PROGRAM.—The term STTR program” has the same meaning as in section 9(e)(6).
(b) ESTABLISHMENT OF PROGRAM.—The Administrator shall establish a program to be known as the Federal and State Technology Partnership 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 under this section, 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 set forth in paragraph (2), in order to enhance or develop in a State—
(A) technology research and development by small business concerns;
(B) technology transfer from university research to technology-based small business concerns;
(C) technology deployment and diffusion benefiting small business concerns;
(D) the technological capabilities of small business concerns through the establishment or operation of 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 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 Administration, or other entities that are knowledgeable about the SBIR and STTR programs as good candidates for the SBIR and STTR programs, and that would benefit from mentoring, in accordance with section 35;
(iii) to create or participate in a training program for individuals providing SBIR outreach and 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 referred to in paragraph (1)—
(A) may only consider 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 the SBIR program; and
(B) shall consider, at a minimum—
(i) whether the applicant has demonstrated that the assistance to be provided would address unmet needs of small business concerns in the community, and whether it is important to use Federal funding for the proposed activities;
(ii) whether the applicant has demonstrated that a need exists to increase the number or success of small high-technology businesses in the State, as measured by the number of first phase and second phase SBIR awards that have historically been 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; and
(v) the manner in which the applicant will measure the results of the activities to be conducted.
(vi) whether the proposal addresses the needs of small business concerns—
(I) owned and controlled by women;
(II) owned and controlled by minorities; and
(III) located in areas that have historically not participated in the SBIR and STTR programs.
(3) PROPOSAL LIMIT.—Not more than 1 proposal may be submitted for inclusion in the FAST program under this section to provide services in any one State in any 1 fiscal year.
(4) PROCESS.—Proposals and applications for assistance under this section shall be in such form and subject to such procedures as the Administrator shall establish. The Administrator shall promulgate regulations establishing standards for the consideration of proposals under paragraph (2), including standards regarding each of the considerations identified in paragraph (2)(B).
(d) COOPERATION AND COORDINATION.—In carrying out the FAST program under this section, the Administrator shall cooperate and coordinate with—
(1) Federal agencies required by section 9 to have an SBIR program; 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 (as established under section 113 of the National Science Foundation Authorization Act of 1988 (42 U.S.C. 1862g));
(C) State science an technology councils; and
(D) representatives of technology-based small business concerns.
(e) ADMINISTRATIVE REQUIREMENTS.—
(1) COMPETITIVE BASIS.—Awards and cooperative agreements under this section shall be made or entered into, as applicable, on a competitive basis.
(2) MATCHING REQUIREMENTS.—
(A) IN GENERAL.—The non-Federal share of the cost of an activity (other than a Planning activity) carried out using an award or under a cooperative agreement under this section shall be—
(i) 50 cents for each Federal dollar, in the case of a recipient that will serve small business concerns located in one of the 18 States receiving the fewest SBIR first phase awards (as described in section 9(e)(4)(A));
(ii) except as provided in subparagraph (B), 1 dollar for each Federal dollar, in the case of a recipient that will serve small business concerns located in one of the 16 States receiving the greatest number of such SBIR first phase awards; and
(iii) except as provided in subparagraph (B), 75 cents for each Federal dollar, in the case of a recipient that will serve small business concerns located in a State that is not described in clause (i) or (ii) that is receiving such SBIR first phase awards.
(B) LOW-INCOME AREAS.—The non-Federal share of the cost of the activity carried out using an award or under a cooperative agreement under this section shall be 50 cents for each Federal dollar that will be directly allocated by a recipient described in subparagraph (A) to serve small business concerns located in a qualified census tract, as that term is defined in section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986. Federal dollars not so allocated by that recipient shall be subject to the matching requirements of subparagraph (A).
(C) TYPES OF FUNDING.—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, except that no such costs or contributions may be derived from funds from any other Federal program.
(D) RANKINGS.—For purposes of subparagraph (A), the Administrator shall reevaluate the ranking of a State once every 2 fiscal years, beginning with fiscal year 2001, based on the most recent statistics compiled by the Administrator.
(3) DURATION.—Awards may be made or cooperative agreements entered into under this section for multiple years, not to exceed 5 years in total.
(f) REPORTS.—
(1) INITIAL REPORT.—Not later than 120 days after the date of enactment of the Small Business Innovation Research Program Reauthorization Act of 2000, the Administrator shall prepare and submit to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives a report, which shall include, with respect to the FAST program, including Mentoring Networks—
(A) a description of the structure and procedures of the program;
(B) a management Plan for the program; and
(C) a description of the merit-based review process to be used in the program.
(2) ANNUAL REPORTS.—The Administrator shall submit an annual report to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives regarding—
(A) the number and amount of awards provided and cooperative agreements entered into under the FAST program during the preceding year;
(B) a list of recipients under this section, including their location and the activities being performed with the awards made or under the cooperative agreements entered into; and
(C) the Mentoring Networks and the mentoring database, as provided for under section 35, including—
(i) the status of the inclusion of mentoring information in the database required by section 9(k); and
(ii) the status of the implementation and description of the usage of the Mentoring Networks.
(g) REVIEWS BY INSPECTOR GENERAL.—
(1) IN GENERAL.—The Inspector General of the Administration shall conduct a review of—
(A) the extent to which recipients under the FAST program are measuring the performance of the activities being conducted and the results of such measurements; and
(B) the overall management and effectiveness of the FAST program.
(2) REPORT.—During the first quarter of fiscal year 2004, the Inspector General of the Administration shall submit a report to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives on the review conducted under paragraph (1).
(h) PROGRAM LEVELS.—
(1) IN GENERAL.—There is authorized to be appropriated to carry out the FAST program, including Mentoring Networks, under this section and section 35, $10,000,000 for each of fiscal years 2001 through 2005.
(2) MENTORING DATABASE.—Of the total amount made available under paragraph (1) for fiscal years 2001 through 2005, a reasonable amount, not to exceed a total of $500,000, may be used by the Administration to carry out section 35(d).
(i) TERMINATION.—The authority to carry out the FAST program under this section shall terminate on September 30, 2005.
§ 35. MENTORING NETWORKS.
(a) FINDINGS.—Congress finds that—
(1) the SBIR and STTR programs create jobs, increase capacity for technological innovation, and boost international competitiveness;
(2) increasing the quantity of applications from all States to the SBIR and STTR programs would enhance competition for such awards and the quality of the completed projects; and
(3) mentoring is a natural complement to the FAST program of reaching out to new companies regarding the SBIR and STTR programs as an effective and low-cost way to improve the likelihood that such companies will succeed in such programs in developing and commercializing their research.
(b) AUTHORIZATION FOR MENTORING NETWORKS.—The recipient of an award or participant in a cooperative agreement under section 34 may use a reasonable amount of such assistance for the establishment of a Mentoring Network under this section.
(c) CRITERIA FOR MENTORING NETWORKS.—A Mentoring Network established using assistance under section 34 shall—
(1) 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 section 34(c)(1)(E)(ii) as potential candidates for the SBIR or STTR programs;
(2) identify volunteer mentors who—
(A) are persons associated with a small business concern that has successfully completed one or more SBIR or STTR funding agreements; and
(B) have agreed to guide small business concerns through all stages of the SBIR or STTR program process, including providing assistance relating to—
(i) proposal writing;
(ii) marketing;
(iii) Government accounting;
(iv) Government audits;
(v) project facilities and equipment;
(vi) human resources;
(vii) third phase partners;
(viii) commercialization;
(ix) venture capital networking; and
(x) other matters relevant to the SBIR and STTR programs;
(3) have experience working with small business concerns participating in the SBIR and STTR programs;
(4) contribute information to the national database referred to in subsection (d); and
(5) agree to reimburse volunteer mentors for out-of-pocket expenses related to service as a mentor under this section.
(d) MENTORING DATABASE.—The Administrator shall—
(1) include in the database required by section 9(k)(1), in cooperation with the SBIR, STTR, and FAST programs, information on Mentoring Networks and mentors participating under this section, including a description of their areas of expertise;
(2) work cooperatively with Mentoring Networks to maintain and update the database;
(3) take such action as may be necessary to aggressively promote Mentoring Networks under this section; and
(4) fulfill the requirements of this subsection either directly or by contract.
§ 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS.
(a) SOLE SOURCE CONTRACTS.—In accordance with this section, a contracting officer may award a sole source contract to any small business concern owned and controlled by service-disabled veterans if—
(1) such concern is determined to be a responsible contractor with respect to performance of such contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more small business concerns owned and controlled by service-disabled veterans will submit offers for the contracting opportunity;
(2) the anticipated award price of the contract (including options) will not exceed—
(A) $5,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or
(B) $3,000,000, 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.
(b) RESTRICTED COMPETITION.—In accordance with this section, a contracting officer may award contracts 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 not less than 2 small business concerns owned and controlled by service-disabled veterans will submit offers and that the award can be made at a fair market price.
(c) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—A procurement may not be made from a source on the basis of a preference provided under subsection (a) or (b) if the procurement would otherwise be made from a different source under section 4124 or 4125 of title 18, United States Code, or the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.).
(d) ENFORCEMENT; PENALTIES.—Rules similar to the rules of paragraphs (5) and (6) of section 8(m) shall apply for purposes of this section.
(e) CONTRACTING OFFICER.—For purposes of this section, the term “contracting officer” has the meaning given such term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)).
§ 37. All laws and parts of laws inconsistent with this Act are hereby repealed to the extent of such inconsistency.