Privacy Act

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SMALL BUSINESS ACT
[Public Law 85–536; Approved July 18, 1958]
[As Amended Through P.L. 118–31, Enacted December 22, 2023]
[15 U.S.C. 631 et seq.; 72 Stat. 384 et seq.]
øCurrency: This publication is a compilation of the text of Public Law 85-536. It was
last amended by the public law listed in the As Amended Through note above and
below at the bottom of each page of the pdf version and reflects current law
through the date of the enactment of the public law listed at https://
www.govinfo.gov/app/collection/comps/¿
øNote: While this publication does not represent an official version of any Federal
statute, substantial efforts have been made to ensure the accuracy of its contents.
The official version of Federal law is found in the United States Statutes at Large
and in the United States Code. The legal effect to be given to the Statutes at
Large and the United States Code is established by statute (1 U.S.C. 112, 204).¿
AN ACT To amend the Small Business Act of 1953, as amended.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That title II of the
Act of July 30, 1953 (Public Law 163, Eighty-third Congress), as
amended, is hereby withdrawn as a part of that Act and is made
a separate Act to be known as the ‘‘Small Business Act’’.
SEC. 1. ø15 U.S.C. 631 note¿ This Act may be cited as the
‘‘Small Business Act’’.
SEC. 2. ø15 U.S.C. 631¿ (a) The essence of the American 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 Administrator of the Small Business Administration, acting through the Associate Administrator for Inter1
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national Trade, and 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 United States own and control little productive capital because they have limited opportunities for small business ownership;
(iii) that the broadening of small business ownership
among groups that presently own and control little productive
capital is essential to provide for the well-being of this Nation
by promoting their increased participation in the free enterprise system of the United States;
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(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. 1
(v) that the power to let 2 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 that own control little productive capital; and
(vi) that the procurement authority under section 8(a) of
the Small Business Act shall be used only as a tool for 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 3 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 economically
disadvantaged groups;
1 So in original. The period probably should be a semicolon.
2 Section 204(a) of Public Law 100–656, 102 Stat. 3859 amended section 2(c)(2)(A)(v), but
should have referred to section 2(d)(2)(B), as it was redesignated by section 8002 of Public Law
100–418.
3 So in original. Probably should be ‘‘With’’.

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(F) that such development can be materially advantaged
through the procurement by the United States of articles,
equipment, supplies, services, materials, and construction work
from such concerns; and
(G) that such procurements also benefit the United States
by encouraging the expansion of suppliers for such procurements, thereby encouraging competition among such suppliers
and promoting economy in such procurements.
(2) 4 It is therefore the purpose of section 8(a) to—
(A) promote the business development of small business
concerns owned and controlled by socially and economically
disadvantaged individuals so that such concerns can compete
on an equal basis in the American economy;
(B) promote the competitive viability of such concerns in
the marketplace by providing such available contract, financial,
technical, and mangement 5 assistance as may be necessary;
and
(C) clarify and expand the program for the procurement by
the United States of articles, supplies, services, materials, and
construction work from small business concerns owned by socially and economically disadvantaged individuals.
(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;
4 Section 8002 of Public Law 100–418 (102 Stat. 1553) redesignates subsection (e) as (f) of section 2. Section 204(a)(2) of Public Law 100–656 (102 Stat. 3859) subsequently amended ‘‘2(e)(2)
of the Act is amended to reads as follows:...’’. This latter amendment was executed to subsection
(f)(2) as redesignated by Public Law 100–418.
5 So in original. Probably should be ‘‘management’’.

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(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.
SEC. 3. ø15 U.S.C. 632¿ DEFINITIONS.
(a) SMALL BUSINESS CONCERNS.—
(1) IN GENERAL.—For the purposes

of this Act, a smallbusiness concern, including but not limited to enterprises that
are engaged in the business of production of food and fiber,
ranching and raising of livestock, aquaculture, and all other
farming and agricultural related industries, shall be deemed to
be one which is independently owned and operated and which
is not dominant in its field of operation.
(2) ESTABLISHMENT OF SIZE STANDARDS.—

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(A) IN GENERAL.—In addition to the criteria specified
in paragraph (1) and subject to the requirements specified
under subparagraph (C), 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 (including the
Administration when acting pursuant to subparagraph (A))
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 24 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 5 years;
(III) the size of other business concerns on the
basis of data over a period of not less than 3
years; or
(IV) other appropriate factors; and
(iii) is approved by the Administrator.
(3) VARIATION BY INDUSTRY AND CONSIDERATION OF OTHER
FACTORS.—When establishing or approving any size standard
pursuant to paragraph (2), the Administrator shall ensure that
the size standard varies from industry to industry to the extent
necessary to reflect the differing characteristics of the various
industries and consider other factors deemed to be relevant by
the Administrator.
(4) EXCLUSION OF CERTAIN SECURITY EXPENSES FROM CONSIDERATION FOR PURPOSE OF SMALL BUSINESS SIZE STANDARDS.—
(A) DETERMINATION REQUIRED.—Not later than 30
days after the date of enactment of this paragraph, the Administrator shall review the application of size standards
established pursuant to paragraph (2) to small business
concerns that are performing contracts in qualified areas
and determine whether it would be fair and appropriate to
exclude from consideration in the average annual gross receipts of such small business concerns any payments made
to such small business concerns by Federal agencies to reimburse such small business concerns for the cost of subFebruary 1, 2024

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contracts entered for the sole purpose of providing security
services in a qualified area.
(B) ACTION REQUIRED.—Not later than 60 days after
the date of enactment of this paragraph, the Administrator
shall either—
(i) initiate an adjustment to the size standards, as
described in subparagraph (A), if the Administrator
determines that such an adjustment would be fair and
appropriate; or
(ii) provide a report to the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives explaining in detail the basis for the determination by the Administrator that such an adjustment would not be fair and appropriate.
(C) QUALIFIED AREAS.—In this paragraph, the term
‘‘qualified area’’ means—
(i) Iraq,
(ii) Afghanistan, and
(iii) any foreign country which included a combat
zone, as that term is defined in section 112(c)(2) of the
Internal Revenue Code of 1986, at the time of performance of the relevant Federal contract or subcontract.
(5) ALTERNATIVE SIZE STANDARD.—
(A) IN GENERAL.—The Administrator shall establish
an alternative size standard for applicants for business
loans under section 7(a) and applicants for development
company loans under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), that uses maximum tangible net worth and average net income as an alternative to the use of industry standards.
(B) INTERIM RULE.—Until the date on which the alternative size standard established under subparagraph (A) is
in effect, an applicant for a business loan under section
7(a) or an applicant for a development company loan under
title V of the Small Business Investment Act of 1958 may
be eligible for such a loan if—
(i) the maximum tangible net worth of the applicant is not more than $15,000,000; and
(ii) the average net income after Federal income
taxes (excluding any carry-over losses) of the applicant
for the 2 full fiscal years before the date of the application is not more than $5,000,000.
(6) PROPOSED RULEMAKING.—In conducting rulemaking to
revise, modify or establish size standards pursuant to this section, the Administrator shall consider, and address, and make
publicly available as part of the notice of proposed rulemaking
and notice of final rule each of the following:
(A) a detailed description of the industry for which the
new size standard is proposed;
(B) an analysis of the competitive environment for
that industry;
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(C) the approach the Administrator used to develop
the proposed standard including the source of all data used
to develop the proposed rule making; and
(D) the anticipated effect of the proposed rulemaking
on the industry, including the number of concerns not currently considered small that would be considered small
under the proposed rule making and the number of concerns currently considered small that would be deemed
other than small under the proposed rulemaking.
(7) COMMON SIZE STANDARDS.—In carrying out this subsection, the Administrator may establish or approve a single
size standard for a grouping of 4-digit North American Industry Classification System codes only if the Administrator
makes publicly available, not later than the date on which
such size standard is established or approved, a justification
demonstrating that such size standard is appropriate for each
individual industry classification included in the grouping.
(8) NUMBER OF SIZE STANDARDS.—The Administrator shall
not limit the number of size standards established pursuant to
paragraph (2), and shall assign the appropriate size standard
to each North American Industry Classification System Code.
(9) PETITIONS FOR RECONSIDERATION OF SIZE STANDARDS.—
(A) IN GENERAL.—A person may file a petition for reconsideration with the Office of Hearings and Appeals (as
established under section 5(i)) of a size standard revised,
modified, or established by the Administrator pursuant to
this subsection.
(B) TIME LIMIT.—A person filing a petition for reconsideration described in subparagraph (A) shall file such petition not later than 30 days after the publication in the
Federal Register of the notice of final rule to revise, modify, or establish size standards described in paragraph (6).
(C) PROCESS FOR AGENCY REVIEW.—The Office of Hearings and Appeals shall use the same process it uses to decide challenges to the size of a small business concern to
decide a petition for review pursuant to this paragraph.
(D) JUDICIAL REVIEW.—The publication of a final rule
in the Federal Register described in subparagraph (B)
shall be considered final agency action for purposes of
seeking judicial review. Filing a petition for reconsideration under subparagraph (A) shall not be a condition
precedent to judicial review of any such size standard.
(E) RULES OR GUIDANCE.—The Office of Hearings and
Appeals shall begin accepting petitions for reconsideration
described in subparagraph (A) after the date on which the
Administration issues a rule or other guidance implementing this paragraph. Notwithstanding the provisions of
subparagraph (B), petitions for reconsideration of size
standards revised, modified, or established in a Federal
Register final rule published between November 25, 2015,
and the effective date of such rule or other guidance shall
be considered timely if filed within 30 days of such effective date.
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(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 is entitled to
direct the plan trustee as to the manner of how to vote the
qualified employer securities (as defined in section
4975(e)(8) of the Internal Revenue Code of 1986), which
are allocated to the account of such participant with respect to a corporate matter which (by law or charter) must
be decided by a vote conducted in accordance with section
409(e) of the Internal Revenue Code of 1986; and
(B) in the case of any loan guarantee under section 7(a),
the trustee of which enters into an agreement with the Administrator of which enters into an agreement with the Administrator which is binding on the trust and no 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 employee 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
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(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 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 insure in whole or
in part to the benefit of any shareholder or other individual;
(2) which complies with any applicable occupational health
and safety standard prescribed by the Secretary of Labor; and
(3) which, in the production of commodities and in the 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 equipment;
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(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 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) The term ‘‘credit elsewhere’’ means—
(1) for the purposes of this Act (except as used in section
7(b)), the availability of credit on reasonable terms and conditions to the individual loan applicant from non-Federal, nonState, or non-local government sources, considering factors associated with conventional lending practices, including—
(A) the business industry in which the loan applicant
operates;
(B) whether the loan applicant is an enterprise that
has been in operation for a period of not more than 2
years;
(C) the adequacy of the collateral available to secure
the requested loan;
(D) the loan term necessary to reasonably assure the
ability of the loan applicant to repay the debt from the actual or projected cash flow of the business; and
(E) any other factor relating to the particular credit
application, as documented in detail by the lender, that
cannot be overcome except through obtaining a Federal
loan guarantee under prudent lending standards; and
(2) for the purposes of section 7(b), the availability of credit
on reasonable terms and conditions from non-Federal sources
taking into consideration the prevailing rates and terms in the
community in or near where the applicant business concern
transacts business, or the applicant 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
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lished by the Administration for other similar agricultural small
business concerns. In determining such size, the Administration
shall regard the association as a business concern and shall not include the income or employees of any member shareholder of such
cooperative.
(k)(1) 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 the Fishery Resource Disasters Improvement Act), ocean conditions resulting in the closure of
customary fishing waters, riots, civil disorders or other catastrophes, except it does not include economic dislocations.
(2) For purposes of section 7(b)(2), the term ‘‘disaster’’ includes—
(A) drought;
(B) below average water levels in the Great Lakes, or on
any body of water in the United States that supports commerce
by small business concerns; and
(C) ice storms and blizzards.
(l) For purposes of this Act—
(1) 6 the term ‘‘computer crime’’ means’’—
(A) any crime committed against a small business 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) DEFINITIONS RELATING TO CONTRACTING.—In this Act:
(1) PRIME CONTRACT.—The term ‘‘prime contract’’ has the
meaning given such term in section 8701(4) of title 41, United
States Code.
(2) PRIME CONTRACTOR.—The term ‘‘prime contractor’’ has
the meaning given such term in section 8701(5) of title 41,
United States Code.
(3) SIMPLIFIED ACQUISITION THRESHOLD.—The term ‘‘simplified acquisition threshold’’ has the meaning given such term
in section 134 of title 41, United States Code.
(4) MICRO-PURCHASE THRESHOLD.—The term ‘‘micro-purchase threshold’’ has the meaning given such term in section
1902 of title 41, United States Code.
(5) TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND
SERVICES.—The term ‘‘total purchases and contracts for property and services’’ shall mean total number and total dollar
amount of contracts and orders for property and services.
(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
6 So

in original. Subsection enacted without a paragraph (2).

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(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 SMALLER CONTRACT.—The term ‘‘separate
smaller contract’’, with respect to a bundling of contract requirements, means a contract that has been performed by 1 or
more small business concerns or was suitable for award to 1
or more small business concerns.
(p) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—In this
Act, the term ‘‘qualified HUBZone small business concern’’ has the
meaning given such term in section 31(b).
(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
any of the following:
(A) A small business concern—
(i) 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 (not including any stock owned by an
ESOP) of which is owned by one or more service-disabled veterans; and
(ii) 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.
(B) A small business concern—
(i) not less than 51 percent of which is owned by
one or more service-disabled veterans with a disability
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that is rated by the Secretary of Veterans Affairs as
a permanent and total disability who are unable to
manage the daily business operations of such concern;
or
(ii) in the case of a publicly owned business, not
less than 51 percent of the stock (not including any
stock owned by an ESOP) of which is owned by one or
more such veterans.
(C)(i) During the time period described in clause (ii),
a small business concern that was a small business concern described in subparagraph (A) or (B) immediately
prior to the death of a service-disabled veteran who was
the owner of the concern, the death of whom causes the
concern to be less than 51 percent owned by one or more
service-disabled veterans, if—
(I) the surviving spouse of the deceased veteran acquires such veteran’s ownership interest in
such concern;
(II) such veteran had a service-connected disability (as defined in section 101(16) of title 38,
United States Code); and
(III) immediately prior to the death of such
veteran, and during the period described in clause
(ii), the small business concern is included in the
database described in section 36.
(ii) 7 The time period described in this clause is
the time period beginning on the date of the veteran’s
death and ending on the earlier of—
(I) the date on which the surviving spouse remarries;
(II) the date on which the surviving spouse relinquishes an ownership interest in the small
business concern; or
(III) the date that—
(aa) in the case of a surviving spouse of a veteran with a service-connected disability rated as
100 percent disabling or who dies as a result of a
service-connected disability, is 10 years after the
date of the death of the veteran; or
(bb) in the case of a surviving spouse of a veteran with a service-connected disability rated as
less than 100 percent disabling who does not die
as a result of a service-connected disability, is 3
years after the date of the death of the 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
7 Margin

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(B) the management and daily business operations of
which are controlled by one or more veterans.
(4) VETERAN.—The term ‘‘veteran’’ has the meaning given
the term in section 101(2) of title 38, United States Code.
(5) RELIEF FROM TIME LIMITATIONS.—
(A) IN GENERAL.—Any time limitation on any qualification, certification, or period of participation imposed
under this Act on any program that is available to small
business concerns shall be extended for a small business
concern that—
(i) is owned and controlled by—
(I) a veteran who was called or ordered to active duty under a provision of law specified in section 101(a)(13)(B) of title 10, United States Code,
on or after September 11, 2001; or
(II) a service-disabled veteran who became
such a veteran due to an injury or illness incurred
or aggravated in the active military, naval, or air
service during a period of active duty pursuant to
a call or order to active duty under a provision of
law referred to in subclause (I) on or after September 11, 2001; and
(ii) was subject to the time limitation during such
period of active duty.
(B) DURATION.—Upon submission of proper documentation to the Administrator, the extension of a time
limitation under subparagraph (A) shall be equal to the
period of time that such veteran who owned or controlled
such a concern was on active duty as described in that
subparagraph.
(C) EXCEPTION FOR PROGRAMS SUBJECT TO FEDERAL
CREDIT REFORM ACT OF 1990.—The provisions of subparagraphs (A) and (B) shall not apply to any programs subject
to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et
seq.).
(6) ESOP.—The term ‘‘ESOP’’ has the meaning given the
term ‘‘employee stock ownership plan’’ in section 4975(e)(7) of
the Internal Revenue Code of 1986 (26 U.S.C. 4975(e)(7)).
(7) SURVIVING SPOUSE.—The term ‘‘surviving spouse’’ has
the meaning given such term in section 101(3) 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 LENDER.—The term ‘‘nonFederally regulated 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
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(C) the lending activities of such concern are not regulated by any Federal banking authority.
(s) MAJOR DISASTER.—In this Act, the term ‘‘major disaster’’
has the meaning given that term in section 102 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5122).
(t) SMALL BUSINESS DEVELOPMENT CENTER.—In this Act, the
term ‘‘small business development center’’ means a small business
development center described in section 21.
(u) REGION OF THE ADMINISTRATION.—In this Act, the term ‘‘region of the Administration’’ means the geographic area served by
a regional office of the Administration established under section
4(a).
(v) MULTIPLE AWARD CONTRACT.—In this Act, the term ‘‘multiple award contract’’ means—
(1) a multiple award task order contract or delivery order
contract that is entered into under the authority of sections
303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and
(2) any other indefinite delivery, indefinite quantity contract that is entered into by the head of a Federal agency with
2 or more sources pursuant to the same solicitation.
(w) PRESUMPTION.—
(1) IN GENERAL.—In every contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant which is set aside, reserved, or otherwise classified as intended for award to small business concerns, there
shall be a presumption of loss to the United States based on
the total amount expended on the contract, subcontract, cooperative agreement, cooperative research and development
agreement, or grant whenever it is established that a business
concern other than a small business concern willfully sought
and received the award by misrepresentation.
(2) DEEMED CERTIFICATIONS.—The following actions shall
be deemed affirmative, willful, and intentional certifications of
small business size and status:
(A) Submission of a bid or proposal for a Federal
grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement reserved,
set aside, or otherwise classified as intended for award to
small business concerns.
(B) Submission of a bid or proposal for a Federal
grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement which in
any way encourages a Federal agency to classify the bid or
proposal, if awarded, as an award to a small business concern.
(C) Registration on any Federal electronic database for
the purpose of being considered for award of a Federal
grant, contract, subcontract, cooperative agreement, or cooperative research agreement, as a small business concern.
(3) CERTIFICATION BY SIGNATURE OF RESPONSIBLE OFFICIAL.—
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(A) IN GENERAL.—Each solicitation, bid, or application
for a Federal contract, subcontract, or grant shall contain
a certification concerning the small business size and status of a business concern seeking the Federal contract,
subcontract, or grant.
(B) CONTENT OF CERTIFICATIONS.—A certification that
a business concern qualifies as a small business concern of
the exact size and status claimed by the business concern
for purposes of bidding on a Federal contract or subcontract, or applying for a Federal grant, shall contain the
signature of an authorized official on the same page on
which the certification is contained.
(4) REGULATIONS.—The Administrator shall promulgate
regulations to provide adequate protections to individuals and
business concerns from liability under this subsection in cases
of unintentional errors, technical malfunctions, and other similar situations.
(x) ANNUAL CERTIFICATION.—
(1) IN GENERAL.—Each business certified as a small business concern under this Act shall annually certify its small
business size and, if appropriate, its small business status, by
means of a confirming entry on the Online Representations
and Certifications Application database of the Administration,
or any successor thereto.
(2) REGULATIONS.—Not later than 1 year after the date of
enactment of this subsection, the Administrator, in consultation with the Inspector General and the Chief Counsel for Advocacy of the Administration, shall promulgate regulations to
ensure that—
(A) no business concern continues to be certified as a
small business concern on the Online Representations and
Certifications Application database of the Administration,
or any successor thereto, without fulfilling the requirements for annual certification under this subsection; and
(B) the requirements of this subsection are implemented in a manner presenting the least possible regulatory burden on small business concerns.
(y) POLICY ON PROSECUTIONS OF SMALL BUSINESS SIZE AND
STATUS FRAUD.—Not later than 1 year after the date of enactment
of this subsection, the Administrator, in consultation with the Attorney General, shall issue a Government-wide policy on prosecution of small business size and status fraud, which shall direct Federal agencies to appropriately publicize the policy.
(z) AQUACULTURE BUSINESS DISASTER ASSISTANCE.—Subject to
section 18(a) and notwithstanding section 18(b)(1), the Administrator may provide disaster assistance under section 7(b)(2) to
aquaculture enterprises that are small businesses.
(aa) VENTURE CAPITAL OPERATING COMPANY.—In this Act, the
term ‘‘venture capital operating company’’ means an entity described in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13,
Code of Federal Regulations (or any successor thereto).
(bb) HEDGE FUND.—In this Act, the term ‘‘hedge fund’’ has the
meaning given that term in section 13(h)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1851(h)(2)).
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(cc) PRIVATE EQUITY FIRM.—In this Act, the term ‘‘private equity firm’’ has the meaning given the term ‘‘private equity fund’’ in
section 13(h)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1851(h)(2)).
(dd) DEFINITIONS PERTAINING TO SUBCONTRACTING.—In this
Act:
(1) SUBCONTRACT.—The term ‘‘subcontract’’ means a legally binding agreement between a contractor that is already
under contract to another party to perform work, and a third
party, hereinafter referred to as the subcontractor, for the subcontractor to perform a part, or all, of the work that the contractor has undertaken.
(2) FIRST TIER SUBCONTRACTOR.—The term ‘‘first tier subcontractor’’ means a subcontractor who has a subcontract directly with the prime contractor.
(3) AT ANY TIER.—The term ‘‘at any tier’’ means any subcontractor other than a subcontractor who is a first tier subcontractor.
(ee) PUERTO RICO BUSINESS.—In this Act, the term ‘‘Puerto
Rico business’’ means a small business concern that has its principal office located in the Commonwealth of Puerto Rico.
(ff) COVERED TERRITORY BUSINESS.—In this Act, the term ‘‘covered territory business’’ means a small business concern that has
its principal office located in one of the following:
(1) The United States Virgin Islands.
(2) American Samoa.
(3) Guam.
(4) The Northern Mariana Islands.
SEC. 4. ø15 U.S.C. 633¿ (a) In order to carry out the policies
of this Act there is hereby created an agency under the name
‘‘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 District of Columbia. The Administration may establish such branch and regional offices in other places in the United
States as may be determined by the Administrator of the Administration. As used in this Act, the term ‘‘United States’’ includes the
several States, the Territories and possessions of the United States,
the Commonwealth of Puerto Rico, the Trust territory of the Pacific
Islands, and the District of Columbia.
(b)(1) The management of the Administration shall be vested
in an Administrator who shall be appointed from civilian life by the
President, by and with the advice and consent of the Senate, and
who shall be a person of outstanding qualifications known to be 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,
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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 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
such Associate Administrator shall be the Associate Administrator
for Veterans Business Development, who shall administer the Office of Veterans Business Development established under section
32. One of the Associate Administrators shall be designated at the
time of his appointment as the Associate Administrator for 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. 8 One such Associate
Administrator shall be the Associate Administrator for International Trade, who shall be the head of the Office of International
Trade established under section 22. One such Associate Administrator shall be the Chief Hearing Officer, who shall administer the
Office of Hearings and Appeals established under section 5(i).
(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 formation and failures;
(iv) sales and new orders;
(v) back orders;
(vi) investment in plant and equipment;
(vii) changes in inventory and rate of inventory turnover;
8 Section 103 of Public Law 96–481 (94 Stat. 2321) amended section 4(b) of the Small Business
Act by ‘‘striking all after the phrase ‘Capital Ownership Development’ through the period and
inserting in lieu thereof ‘and shall be responsible to the Administrator for the formulation and
execution of the policies and programs under sections 7(j) and 8(a) of this Act which provide
assistance to minority small business concerns.’ ’’.
There is uncertainty as to the correct manner in which to carry out this amendment. The
version shown above was carried as if the amendment instruction stated ‘‘...through the periodat
the end...’’ of the subsection as opposed to the end of the penultimate sentence.
The last sentence of section 4(b), prior to the enactment of the amendment made by section
103 of Public Law 96–481, reads as follows: ‘‘The Deputy Administrator shall be Acting 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.’’.

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(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, district and region of the Administration, for
all the data elements maintained; and
(xi) underwriting characteristics of each loan that
has entered into default, including term, amount and
type of collateral, loan-to-value and other actual and
projected ratios, line of business, credit history, and
type of loan.
(C) DEADLINE FOR OPERATIONAL CAPABILITY.—The
database established under subparagraph (A) shall—
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(i) be operational not later than June 30, 1997;
and
(ii) capture data beginning on the first day of the
second quarter of fiscal year 1997 beginning after such
date and thereafter.
(4)(A) The Administrator shall establish a small business computer security and education program to—
(i) provide small business concerns information regarding—
(I) utilization and management of computer technology;
(II) computer crimes committed against small business
concerns; and
(III) security for computers owned or utilized by small
business concerns;
(ii) provide for periodic forums for small business concerns
to improve their knowledge of the matters described in clause
(i); and
(iii) provide training opportunities to educate small business users on computer security techniques.
(B) The Administrator, after consultation with the Director of
Institute of Computer Sciences and Technology within the Department of Commerce, shall develop information and materials to
carry out the activities described in subparagraph (A) of this paragraph.
(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 section 7(b)(1),
7(b)(2), 7(b)(3), 7(b)(4), 7(d)(2), and 7(m) of this Act; and (B) a 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 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(b)(5), 7(b)(6), (7(b)(7), 7(b)(8),
7(d)(2), and 7(g) of this Act shall be paid into a disaster loan fund;
and (B) pursuant to sections 5(g), 7(a), 7(h), 7(i), 7(l), 7(m), and 8(a)
of this Act, and titles III, IV and V of the Small Business 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
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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 U.S.C. 847–849)) for wholly
owned Government corporations.
(5)(A) The Administration is authorized to make and issue
notes to the Secretary of the Treasury for the purpose of obtaining
funds necessary for discharging obligations under the revolving
funds created by section 4(c)(1) of this Act and for authorized 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 United States having maturities comparable to the notes issued by the Administration under
this paragraph. The Secretary of the Treasury is authorized and directed to purchase any notes of the Administration issued hereunder, and, for that purpose, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the
sale of any securities issued under the Second Liberty Bond Act,
as amended, and the purposes for which such securities may be
issued under such Act, as amended, are extended to include the
purchase of notes issued by the Administration. All redemptions,
purchases, and sales by the Secretary of the Treasury of such notes
shall be treated as public debt transactions of the United States.
All borrowing authority contained herein shall be effective only to
such extent or in such amounts as are provided in advance in appropriation Acts.
(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 1958 providing the capital used
to perform such functions originated from appropriated funds. Such
payments shall be treated by the Department of the Treasury as
interest income, not as retirement of indebtedness.
(D) There are authorized to be appropriated, in any fiscal year,
such sums as may be necessary for losses and interest subsidies incurred by the funds established by subsection (c)(1), 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 Administration, as Chairman, the Secretary
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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) BUSINESS OPPORTUNITY SPECIALISTS.—
(1) DUTIES.—The exclusive duties of a Business Opportunity Specialist employed by the Administrator and reporting
to the senior official appointed by the Administrator with responsibilities under sections 8, 15, 31, and 36 (or the designee
of such official) shall be to implement sections 7, 8, and 45 and
to complete other duties related to contracting programs under
this Act. Such duties shall include—
(A) with respect to small business concerns eligible to
receive contracts and subcontracts pursuant to section
8(a)—
(i) providing guidance, counseling, and referrals
for assistance with technical, management, financial,
or other matters that will improve the competitive viability of such concerns;
(ii) identifying causes of success or failure of such
concerns;
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(iii) providing comprehensive assessments of such
concerns, including identifying the strengths and
weaknesses of such concerns;
(iv) monitoring and documenting compliance with
the requirements of sections 7 and 8 and any regulations implementing those sections;
(v) explaining the requirements of sections 7, 8,
15, 31, 36, and 45; and
(vi) advising on compliance with contracting regulations (including the Federal Acquisition Regulation)
after award of such a contract or subcontract;
(B) reviewing and monitoring compliance with mentorprotege agreements under section 45;
(C) representing the interests of the Administrator
and small business concerns in the award, modification,
and administration of contracts and subcontracts awarded
pursuant to section 8(a); and
(D) reporting fraud or abuse under section 7, 8, 15, 31,
36, or 45 or any regulations implementing such sections.
(2) CERTIFICATION REQUIREMENTS.—
(A) IN GENERAL.—Consistent with the requirements of
subparagraph (B), a Business Opportunity Specialist described under section 7(j)(10)(D) shall have a Level I Federal Acquisition Certification in Contracting (or any successor certification) or the equivalent Department of Defense certification.
(B) DELAY OF CERTIFICATION REQUIREMENT.—The certification described in subparagraph (A) is not required—
(i) for any person serving as a Business Opportunity Specialist on the date of the enactment of this
subsection, until the date that is one calendar year
after the date such person was appointed as a Business Opportunity Specialist; or
(ii) for any person serving as a Business Opportunity Specialist on or before January 3, 2013, until
January 3, 2020.
(3) JOB POSTING REQUIREMENTS.—The duties and certification requirements described in this subsection shall be included in any initial job posting for the position of a Business
Opportunity Specialist.
(h) COMMERCIAL MARKET REPRESENTATIVES.—
(1) DUTIES.—The principal duties of a commercial market
representative employed by the Administrator and reporting to
the senior official appointed by the Administrator with responsibilities under sections 8, 15, 31, and 36 (or the designee of
the official) shall be to advance the policies established in section 8(d)(1) relating to subcontracting, including—
(A) helping prime contractors to find small business
concerns that are capable of performing subcontracts;
(B) for contractors awarded contracts containing the
clause described in section 8(d)(3), providing—
(i) counseling on the responsibility of the contractor to maximize subcontracting opportunities for
small business concerns;
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(ii) instruction on methods and tools to identify
potential subcontractors that are small business concerns; and
(iii) assistance to increase awards to subcontractors that are small business concerns through visits,
training, and reviews of past performance;
(C) providing counseling on how a small business concern may promote the capacity of the small business concern to contractors awarded contracts containing the
clause described in section 8(d)(3); and
(D) conducting periodic reviews of contractors awarded
contracts containing the clause described in section 8(d)(3)
to assess compliance with subcontracting plans required
under section 8(d)(6).
(2) CERTIFICATION REQUIREMENTS.—
(A) IN GENERAL.—Consistent with the requirements of
subparagraph (B), a commercial market representative referred to in section 15(q)(3) shall have a Level I Federal
Acquisition Certification in Contracting (or any successor
certification) or the equivalent Department of Defense certification.
(B) DELAY OF CERTIFICATION REQUIREMENT.—The certification described in subparagraph (A) is not required—
(i) for any person serving as a commercial market
representative on the date of enactment of this subsection, until the date that is one calendar year after
the date on which the person was appointed as a commercial market representative; or
(ii) for any person serving as a commercial market
representative on or before November 25, 2015, until
November 25, 2020.
(3) JOB POSTING REQUIREMENTS.—The duties and certification requirements described in this subsection shall be included in any initial job posting for the position of a commercial market representative.
SEC. 5. ø15 U.S.C. 634¿ (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 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 nonreimbursable basis of the use of information,
services, facilities (including any field service thereof), officers, and
employees thereof, in carrying out the provisions of this Act.
(b) In the performance of, and with respect to, the functions,
powers, and duties vested in him by this Act the Administrator
may—
(1) sue and be sued in any court of record of a State having general jurisdiction, or in any United States district court,
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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 form delegating such power by
order or by power of attorney, in his discretion, to any officer
or agent he may appoint;
(5) acquire, in any lawful manner, any property (real, 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 conFebruary 1, 2024

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tract 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 9, That with respect
to deferred participation loans, including loans guaranteed
under paragraph (15) or (35) of section 7(a), 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 service and facilities of Federal, State, and
local agencies and groups, both public and private, and utilize
such gratuitous services and facilities as may, from time to
time, be necessary, to further the objectives of section 7(b);
(10) upon purchase by the Administration of any deferred
participation entered into under section 7 of this Act, continue
to charge a rate of interest not to exceed that initially charged
by the participating institution on the amount so purchased for
the remaining term of the indebtedness;
(11) make sure such investigations as he deems necessary
to determine whether a recipient of or participant in any 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 witnesses, compel their attendance, take evidence, and require the production
of any books, papers, and documents which are relevant to the
inquiry. Such attendance of witnesses and the production of
any such records may be required from any place in the United
States. In case of contumacy by, or refusal to obey a subpena
issued to, any person, including a recipient or participant, the
Administration may invoke the aid of any court of the United
9 So

in law. Probably should read ‘‘Provided,’’.

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States within the jurisdiction of which such investigation or
proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of
witnesses and the production of books, papers, and documents;
and such court may issue an order requiring such person to appear before the Administration, there to produce records, if so
ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be
punished by such court as a contempt thereof. All process in
any such case may be served in the judicial district whereof
such person is an inhabitant or wherever he may be found;
(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 the civil-service and
classification laws and, except in the case of stenographic reporting
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services by organizations, without regard to section 3709 of the Revised Statutes, as amended (41 U.S.C., sec. 5). Any individual so
employed may be compensated at a rate not in excess of the daily
equivalent of the highest rate payable under section 5332 of title
5, United States Code, including traveltime, and, while such 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)(1) of this Act, the Administration may extend the maturity of
any loan on which the Administration undertakes or suspends the
obligation pursuant to this subsection for a corresponding period of
time.
(4)(A) Prior to the undertaking or suspension by the Administration of any small business concern’s obligation under this subsection, the Administration, consistent with the purposes sought to
be achieved herein, small require the small business concern to
agree in writing to repay to it the aggregate amount of the 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
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(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 and after the period in which such obligation is so undertaken or suspended.
(f)(1) The guaranteed portion of any loan made pursuant to
this Act may be sold by the lender, and by any subsequent holder,
consistent with regulations on such sales as the Administration
shall establish, subject to the following limitations:
(A) prior to the Administration’s approval of the sale, or
upon any subsequent resale, of any loan guaranteed by the Administration, if the lender certifies that such loan has been
property closed and that the lender has substantially complied
with the provisions of the guarantee agreement and the 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
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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 default of all loans constituting the pool.
(3) The full faith and credit of the United States is pledged to
the payment of all amounts which may be required to be paid
under any guarantee of such trust certificates issued by the Administration or its agent pursuant to this subsection.
(4)(A) 10 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) 11 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
10 Section 7 of the Small Business Guaranteed Credit Enhancement Act of 1993, Public Law
103–81, 107 Stat. 782, repeals section 3 of such Act, which amended this paragraph, effective
September 30, 1996. The repeal probably should have included a provision to amend the text
of this paragraph on the effective date so as to read as it did before the date of enactment. Without this provision, however, the repeal does not repeal the amendment. Indentation so in law.
Section 4(b) of the Small Business Lending Enhancement Act of 1995, Public Law 104–36, 109
Stat. 297, subsequently amends this paragraph.
11 Indentation so in law. See section 3(1) of Public Law 108–306 (118 Stat. 1131).

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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.
(6) If the amount of the guaranteed portion of any loan under
section 7(a) is more than $500,000, the Administrator shall, upon
request of a pool assembler, divide the loan guarantee into increments of $500,000 and 1 increment of any remaining amount less
than $500,000, in order to permit the maximum amount of any
loan in a pool to be not more than $500,000. Only 1 increment of
any loan guarantee divided under this paragraph may be included
in the same pool. Increments of loan guarantees to different borrowers that are divided under this paragraph may be included in
the same pool.
(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 the
terms, conditions, and yield of such instrument. As used in
this paragraph, if the instrument being sold is a loan, the
term ‘‘seller’’ does not include (A) an entity which made
the loan or (B) any individual or entity which sells three
or fewer guaranteed loans per year; and
(D) have the authority to regulate brokers and dealers
in guaranteed loans and trust certificates sold pursuant to
subsection (f) and (g) of this section.
(2) The agent described in paragraph (1)(B) may be 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.
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(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.
(i) OFFICE OF HEARINGS AND APPEALS.—
(1) ESTABLISHMENT.—
(A) OFFICE.—There is established in the Administration an Office of Hearings and Appeals—
(i) to impartially decide matters relating to program decisions of the Administrator—
(I) for which Congress requires a hearing on
the record; or
(II) that the Administrator designates for
hearing by regulation; and
(ii) which shall contain the office of the Administration that handles requests submitted pursuant to
sections 552 of title 5, United States Code (commonly
referred to as the ‘‘Freedom of Information Act’’) and
maintains records pursuant to section 552a of title 5,
United States Code (commonly referred to as the ‘‘Privacy Act of 1974’’).
(B) JURISDICTION.—
(i) IN GENERAL.—Except as provided in clause (ii),
the Office of Hearings and Appeals shall hear appeals
of agency actions under or pursuant to this Act, the
Small Business Investment Act of 1958 (15 U.S.C. 661
et seq.), and title 13 of the Code of Federal Regulations, and shall hear such other matters as the Administrator may determine appropriate.
(ii) EXCEPTION.—The Office of Hearings and Appeals shall not adjudicate disputes that require a
hearing on the record, except disputes pertaining to
the small business programs described in this Act.
(C) ASSOCIATE ADMINISTRATOR.—The head of the Office of Hearings and Appeals shall be the Chief Hearing
Officer appointed under section 4(b)(1), who shall be responsible to the Administrator.
(2) CHIEF HEARING OFFICER DUTIES.—
(A) IN GENERAL.—The Chief Hearing Officer shall—
(i) be a career appointee in the Senior Executive
Service and an attorney licensed by a State, commonwealth, territory or possession of the United States, or
the District of Columbia; and
(ii) be responsible for the operation and management of the Office of Hearings and Appeals.
(B) ALTERNATIVE DISPUTE RESOLUTION.—The Chief
Hearing Officer may assign a matter for mediation or
other means of alternative dispute resolution.
(3) HEARING OFFICERS.—
(A) IN GENERAL.—The Office of Hearings and Appeals
shall appoint Hearing Officers to carry out the duties described in paragraph (1)(A)(i).
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(B) CONDITIONS OF EMPLOYMENT.—A Hearing Officer
appointed under this paragraph—
(i) shall serve in the excepted service as an employee of the Administration under section 2103 of
title 5, United States Code, and under the supervision
of the Chief Hearing Officer;
(ii) shall be classified at a position to which section 5376 of title 5, United States Code, applies; and
(iii) shall be compensated at a rate not exceeding
the maximum rate payable under such section.
(C) AUTHORITY; POWERS.—Notwithstanding section
556(b) of title 5, United States Code—
(i) a Hearing Officer may hear cases arising under
section 554 of such title;
(ii) a Hearing Officer shall have the powers described in section 556(c) of such title; and
(iii) the relevant provisions of subchapter II of
chapter 5 of such title (except for section 556(b) of
such title) shall apply to such Hearing Officer.
(D) TREATMENT OF CURRENT PERSONNEL.—An individual serving as a Judge in the Office of Hearings and
Appeals (as that position and office are designated in section 134.101 of title 13, Code of Federal Regulations) on
the effective date of this subsection shall be considered as
qualified to be, and redesignated as, a Hearing Officer.
(4) DETERMINATIONS REGARDING STATUS OF CONCERNS.—
(A) IN GENERAL.—Not later than 2 days after the date
on which a final determination that a business concern
does not meet the requirements of the status such concern
claims to hold is made, such concern or the Administrator,
as applicable, shall update the status of such concern in
the System for Award Management (or any successor system).
(B) ADMINISTRATOR UPDATES.—If such concern fails to
update the status of such concern as described in subparagraph (A), not later than 2 days after such failure the Administrator shall make such update.
(C) NOTIFICATION.—A concern required to make an update described under subparagraph (A) shall notify a contracting officer for each contract with respect to which
such concern has an offer or bid pending of the determination made under subparagraph (A), if the concern finds, in
good faith, that such determination affects the eligibility of
the concern to perform such a contract.
(5) HEARING OFFICER DEFINED.—In this subsection, the
term ‘‘Hearing Officer’’ means an individual appointed or redesignated under this subsection who is an attorney licensed
by a State, commonwealth, territory or possession of the
United States, or the District of Columbia.
SEC. 6. ø15 U.S.C. 635¿ (a) All moneys of the Administration
not otherwise employed may be deposited with the Treasury of the
United States subject to check by authority of the Administration.
The Federal Reserve banks are authorized and directed to act as
depositaries, custodians, and fiscal agents for the Administration in
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the general performance of its powers conferred by this Act. Any
banks insured by the Federal Deposit Insurance Corporation, when
designated by the Secretary of the Treasury, shall act as custodians
and financial agents for the Administration. Each Federal Reserve
bank, when designated by the Administration as fiscal agents for
the Administration, shall be entitled to be reimbursed for all expenses incurred as such fiscal agent.
(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.
SEC. 7. ø15 U.S.C. 636¿ (a) LOANS TO SMALL BUSINESS CONCERNS; ALLOWABLE PURPOSES; QUALIFIED BUSINESS; RESTRICTIONS
AND LIMITATIONS.—The Administration is empowered to the extent
and in such amounts as provided in advance in appropriation Acts
to make loans for plant acquisition, construction, conversion, or expansion, including the acquisition of land, material, supplies,
equipment, and working capital, and to make loans to any qualified
small business concern, including those owned by qualified Indian
tribes, for purposes of this Act. Such financings may be made either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however,
to the following restrictions, limitations, and provisions:
(1) IN GENERAL.—
(A) CREDIT ELSEWHERE.—
(i) IN GENERAL.—The Administrator has the authority to direct, and conduct oversight for, the methods by which lenders determine whether a borrower is
able to obtain credit elsewhere. No financial assistance
shall be extended pursuant to this subsection if the
applicant can obtain credit elsewhere. No immediate
participation may be purchased unless it is shown that
a deferred participation is not available; and no direct
financing may be made unless it is shown that a participation is not available.
(ii) LIQUIDITY.—On and after October 1, 2015, the
Administrator may not guarantee a loan under this
subsection if the lender determines that the borrower
is unable to obtain credit elsewhere solely because the
liquidity of the lender depends upon the guaranteed
portion of the loan being sold on the secondary market.
(B) BACKGROUND CHECKS.—Prior to the approval of
any loan made pursuant to this subsection, or section 503
of the Small Business Investment Act of 1958, the Administrator may verify the applicant’s criminal background, or
lack thereof, through the best available means, including,
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if possible, use of the National Crime Information Center
computer system at the Federal Bureau of Investigation.
(C) LENDING LIMITS OF LENDERS.—On and after October 1, 2015, the Administrator may not guarantee a loan
under this subsection if the sole purpose for requesting the
guarantee is to allow the lender to exceed the legal lending
limit of the lender.
(2) LEVEL OF PARTICIPATION IN GUARANTEED LOANS.—
(A) IN GENERAL.—Except as provided in subparagraphs (B), (D), (E), and (F), in an agreement to participate in a loan on a deferred basis under this subsection
(including a loan made under the Preferred Lenders Program), such participation by the Administration shall be
equal to—
(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if
such balance exceeds $150,000; or
(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if
such balance is less than or equal to $150,000.
(B) REDUCED PARTICIPATION UPON REQUEST.—
(i) IN GENERAL.—The guarantee percentage specified by subparagraph (A) for any loan under this subsection may be reduced upon the request of the participating lender.
(ii) PROHIBITION.—The Administration shall not
use the guarantee percentage requested by a participating lender under clause (i) as a criterion for establishing priorities in approving loan guarantee requests
under this subsection.
(C) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM.—
(i) IN GENERAL.—The maximum interest rate for a
loan guaranteed under the Preferred Lenders Program
shall not exceed the maximum interest rate, as determined by the Administration, applicable to other loans
guaranteed under this subsection.
(ii) EXPORT-IMPORT BANK LENDERS.—Any lender
that is participating in the Delegated Authority Lender Program of the Export-Import Bank of the United
States (or any successor to the Program) shall be eligible to participate in the Preferred Lenders Program.
(iii) PREFERRED LENDERS PROGRAM DEFINED.—For
purposes of this subparagraph, the term ‘‘Preferred
Lenders Program’’ means any program established by
the Administrator, as authorized under the proviso in
section 5(b)(7), under which a written agreement between the lender and the Administration delegates to
the lender—
(I) complete authority to make and close loans
with a guarantee from the Administration without
obtaining the prior specific approval of the Administration; and
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(II) complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine
servicing and liquidation activities, but shall not
take any actions creating an actual or apparent
conflict of interest.
(D) PARTICIPATION UNDER EXPORT WORKING CAPITAL
PROGRAM.—In an agreement to participate in a loan on a
deferred basis under the Export Working Capital Program
established pursuant to paragraph (14)(A), such participation by the Administration shall be 90 percent.
(E) PARTICIPATION IN INTERNATIONAL TRADE LOAN.—In
an agreement to participate in a loan on a deferred basis
under paragraph (16), the participation by the Administration may not exceed 90 percent.
(F) PARTICIPATION IN THE PAYCHECK PROTECTION PROGRAM.—In an agreement to participate in a loan on a deferred basis under paragraph (36), the participation by the
Administration shall be 100 percent.
(3) No loan shall be made under this subsection—
(A) if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the business loan and investment fund established by this Act
would exceed $3,750,000 (or if the gross loan amount
would exceed $5,000,000), except as provided in subparagraph (B);
(B) if the total amount outstanding and committed (on
a deferred basis) solely for the purposes provided in paragraph (16) to the borrower from the business loan and investment fund established by this Act would exceed
$4,500,000 (or if the gross loan amount would exceed
$5,000,000), of which not more than $4,000,000 may be
used for working capital, supplies, or financings under section 7(a)(14) for export purposes; and
(C) if effected either directly or in cooperation with
banks or other lending institutions through agreements to
participate on an immediate basis if the amount would exceed $350,000.
(4) INTEREST RATES AND PREPAYMENT CHARGES.—
(A) INTEREST RATES.—Notwithstanding the provisions
of the constitution of any State or the laws of any State
limiting the rate or amount of interest which may be
charged, taken, received, or reserved, the maximum legal
rate of interest on any financing made on a deferred basis
pursuant to this subsection shall not exceed a rate prescribed by the Administration, and the rate of interest for
the Administration’s share of any direct or immediate participation loan shall not exceed the current average market
yield on outstanding marketable obligations of the United
States with remaining periods to maturity comparable to
the average maturities of such loans and adjusted to the
nearest one-eighth of 1 per centum, and an additional
amount as determined by the Administration, but not to
exceed 1 per centum per annum: Provided, That for those
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loans to assist any public or private organization for the
handicapped or to assist any handicapped individual as
provided in paragraph (10) of this subsection, the interest
rate shall be 3 per centum per annum.
(B) PAYMENT OF ACCRUED INTEREST.—
(i) IN GENERAL.—Any bank or other lending institution making a claim for payment on the guaranteed
portion of a loan made under this subsection shall be
paid the accrued interest due on the loan from the earliest date of default to the date of payment of the
claim at a rate not to exceed the rate of interest on the
loan on the date of default, minus one percent.
(ii) LOANS SOLD ON SECONDARY MARKET.—If a loan
described in clause (i) is sold on the secondary market,
the amount of interest paid to a bank or other lending
institution described in that clause from the earliest
date of default to the date of payment of the claim
shall be no more than the agreed upon rate, minus one
percent.
(iii) APPLICABILITY.—Clauses (i) and (ii) shall not
apply to loans made on or after October 1, 2000.
(C) PREPAYMENT CHARGES.—
(i) IN GENERAL.—A borrower who prepays any
loan guaranteed under this subsection shall remit to
the Administration a subsidy recoupment fee calculated in accordance with clause (ii) if—
(I) the loan is for a term of not less than 15
years;
(II) the prepayment is voluntary;
(III) the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and
(IV) the prepayment is made within the first
3 years after disbursement of the loan proceeds.
(ii) SUBSIDY RECOUPMENT FEE.—The subsidy
recoupment fee charged under clause (i) shall be—
(I) 5 percent of the amount of prepayment, if
the borrower prepays during the first year after
disbursement;
(II) 3 percent of the amount of prepayment, if
the borrower prepays during the second year after
disbursement; and
(III) 1 percent of the amount of prepayment,
if the borrower prepays during the third year after
disbursement.
(5) No such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty-five
years, except that such portion of a loan made for the purpose
of acquiring real property or constructing, converting, or expanding facilities may have a maturity of twenty-five years
plus such additional period as is estimated may be required to
complete such construction, conversion, or expansion.
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(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 12
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 13 on the Administration shall be exercised solely
by the Administration and shall not be delegated to other than
Administration personnel.
(7)(A) 14 IN GENERAL.—The Administrator may defer payments on the principal and interest 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.
(B) DEFERRAL REQUIREMENTS.—With respect to a deferral provided under this paragraph, the Administrator
may allow lenders under this subsection—
(i) to provide full payment deferment relief (including payment of principal and interest) for a period
of not more than 1 year; and
(ii) to provide an additional deferment period if
the borrower provides documentation justifying such
additional deferment.
(C) SECONDARY MARKET.—
(i) IN GENERAL.—Except as provided in clause (ii),
if an investor declines to approve a deferral or additional deferment requested by a lender under subparagraph (B), the Administrator shall exercise the authority to purchase the loan so that the borrower may receive full payment deferment relief (including payment
of principal and interest) or an additional deferment
as described in subparagraph (B).
12 See amendments made by sections 1902 and 1910 of Public Law 97–35 (95 Stat. 767 and
778).
13 The reference in the continuation text for paragraph (6) to ‘‘this subparagraph’’ probably
should be to ‘‘this paragraph’’.
14 The margin of subparagraph (A), as amended by section 334(1) of division N of Public Law
116–260, does not conform with the margins of subparagraphs (B) and (C).

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(ii) EXCEPTION.—If, in a fiscal year, the Administrator determines that the cost of implementing clause
(i) is greater than zero, the Administrator shall not
implement that clause.
(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) 15 The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or installation of pollution control facilities for the purposes set forth in
section 404 of the Small Business Investment Act of 1958. Notwithstanding the limitation expressed in paragraph (3) of this subsection, a loan made under this paragraph may not result in a total
amount outstanding and committed to a borrower from the business loan and investment fund of more than $1,000,000.
(13) The Administration may provide financing under this
subsection to State and local development companies for the
purposes of, and subject to the restrictions in, title V of the
Small Business Investment Act of 1958.
(14) EXPORT WORKING CAPITAL PROGRAM.—
(A) IN GENERAL.—The Administrator may provide extensions of credit, standby letters of credit, revolving lines
of credit for export purposes, and other financing to enable
small business concerns, including small business export
trading companies and small business export management
companies, to develop foreign markets. A bank or partici15 So in law. Probably should be ‘‘(B)’’. Section 111(c)(2) of Public Law 100–590 added this
‘‘new subparagraph’’, but in the subparagraph designation probably should be capitalized, and
indention probably should be moved two ems to right.

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pating lending institution may establish the rate of interest on such financings as may be legal and reasonable.
(B) TERMS.—
(i) LOAN AMOUNT.—The Administrator may not
guarantee a loan under this paragraph of more than
$5,000,000.
(ii) FEES.—
(I) IN GENERAL.—For a loan under this paragraph, the Administrator shall collect the fee assessed under paragraph (23) not more frequently
than once each year.
(II) UNTAPPED CREDIT.—The Administrator
may not assess a fee on capital that is not
accessed by the small business concern.
(C) CONSIDERATIONS.—When considering loan or guarantee applications, the Administration shall give weight to
export-related benefits, including opening new markets for
United States goods and services abroad and encouraging
the involvement of small businesses, including agricultural
concerns, in the export market.
(D) MARKETING.—The Administrator shall aggressively market its export financing program to small businesses.
(15)(A) The Administration may guarantee loans under
this subsection—
(i) to qualified employee trusts with respect to a small
business concern for the purpose of purchasing, and for
any transaction costs associated with purchasing, stock of
the concern under a plan approved by the Administrator
which, when carried out, results in the qualified employee
trust owning at least 51 per centum of the stock of the concern; and
(ii) to a small business concern under a plan approved
by the Administrator, if the proceeds from the loan are
only used to make a loan to a qualified employee trust,
and for any transaction costs associated with making that
loan, that results in the qualified employee trust owning
at least 51 percent of the small business concern.
(B) The plan requiring the Administrator’s approval under
subparagraph (A) shall be submitted to the Administration by
the trustee of such trust or by the small business concern with
its application for the guarantee. Such plan shall include an
agreement with the Administrator which is binding on such
trust and on the small business concern and which provides
that—
(i) not later than the date the loan guaranteed under
subparagraph (A) is repaid (or as soon thereafter as is consistent with the requirements of section 401(a) of the Internal Revenue Code of 1954), at least 51 per centum of
the total stock of such concern shall be allocated to the accounts of at least 51 per centum of the employees of such
concern who are entitled to share in such allocation,
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(ii) there will be periodic reviews of the role in the
management of such concern of employees to whose accounts stock is allocated,
(iii) there will be adequate management to assure
management expertise and continuity, and
(iv) with respect to a loan made to a trust, or to a cooperative in accordance with paragraph (35)—
(I) a seller of the small business concern may remain involved as an officer, director, or key employee
of the small business concern when a qualified employee trust or cooperative has acquired 100 percent of
ownership of the small business concern; and
(II) any seller of the small business concern who
remains as an owner of the small business concern, regardless of the percentage of ownership interest, shall
be required to provide a personal guarantee by the Administration.
(C) In determining whether to guarantee any loan under
this paragraph, the individual business experience or personal
assets of employee-owners shall not be used as criteria, except
inasmuch as certain employee-owners may assume managerial
responsibilities, in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation which is
controlled by any other person shall be treated as a small business concern if such corporation would, after the plan described in subparagraph (B) is carried out, be treated as a
small business concern.
(E) The Administration shall compile a separate list of applications for assistance under this paragraph, indicating
which applications were accepted and which were denied, and
shall report periodically to the Congress on the status of employee-owned firms assisted by the Administration, which shall
include—
(i) the total number of loans made to employeeowned business concerns that were guaranteed by the
Administrator under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) or section 502 of the Small
Business Investment Act of 1958 (15 U.S.C. 696), including the number of loans made—
(I) to small business concerns owned and controlled by socially and economically disadvantaged
individuals; and
(II) to cooperatives;
(ii) the total number of financings made to employee-owned business concerns by companies licensed
under section 301(c) of the Small Business Investment
Act of 1958 (15 U.S.C. 696(c)), including the number
of financings made—
(I) to small business concerns owned and controlled by socially and economically disadvantaged
individuals; and
(II) to cooperatives; and
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(iii) any outreach and educational activities conducted by the Administration with respect to employee-owned business concerns.
(F) A small business concern that makes a loan to a qualified employee trust under subparagraph (A)(ii) is not required
to contain the same terms and conditions as the loan made to
the small business concern that is guaranteed by the Administration under such subparagraph.
(G) With respect to a loan made to a qualified employee
trust under this paragraph, or to a cooperative in accordance
with paragraph (35), the Administrator may, as deemed appropriate, elect to not require any mandatory equity to be provided by the qualified employee trust or cooperative to make
the loan.
(16) INTERNATIONAL TRADE.—
(A) IN GENERAL.—If the Administrator determines
that a loan guaranteed under this subsection will allow an
eligible small business concern that is engaged in or adversely affected by international trade to improve its competitive position, the Administrator may make such loan to
assist such concern—
(i) in the financing of the acquisition, construction,
renovation, modernization, improvement, or expansion
of productive facilities or equipment to be used in the
United States in the production of goods and services
involved in international trade;
(ii) in the refinancing of existing indebtedness
that is not structured with reasonable terms and conditions, including any debt that qualifies for refinancing under any other provision of this subsection;
or
(iii) by providing working capital.
(B) SECURITY.—
(i) IN GENERAL.—Except as provided in clause (ii),
each loan made under this paragraph shall be secured
by a first lien position or first mortgage on the property or equipment financed by the loan or on other assets of the small business concern.
(ii) EXCEPTION.—A loan under this paragraph may
be secured by a second lien position on the property or
equipment financed by the loan or on other assets of
the small business concern, if the Administrator determines the lien provides adequate assurance of the payment of the loan.
(C) ENGAGED IN INTERNATIONAL TRADE.—For purposes
of this paragraph, a small business concern is engaged in
international trade if, as determined by the Administrator,
the small business concern is in a position to expand existing export markets or develop new export markets.
(D) ADVERSELY AFFECTED BY INTERNATIONAL TRADE.—
For purposes of this paragraph, a small business concern
is adversely affected by international trade if, as determined by the Administrator, the small business concern—
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(i) is confronting increased competition with foreign firms in the relevant market; and
(ii) is injured by such competition.
(E) FINDINGS BY CERTAIN FEDERAL AGENCIES.—For
purposes of subparagraph (D)(ii) the Administrator shall
accept any finding of injury by the International Trade
Commission or any finding of injury by the Secretary of
Commerce pursuant to chapter 3 of title II of the Trade
Act of 1974.
(F) LIST OF EXPORT FINANCE LENDERS.—
(i) PUBLICATION OF LIST REQUIRED.—The Administrator shall publish an annual list of the banks and
participating lending institutions that, during the 1year period ending on the date of publication of the
list, have made loans guaranteed by the Administration under—
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii) AVAILABILITY OF LIST.—The Administrator
shall—
(I) post the list published under clause (i) on
the website of the Administration; and
(II) make the list published under clause (i)
available, upon request, at each district office of
the Administration.
(17) The Administration shall authorize lending institutions and other entities in addition to banks to make loans authorized under this subsection.
(18) GUARANTEE FEES.—
(A) IN GENERAL.—With respect to each loan guaranteed under this subsection (other than a loan that is repayable in 1 year or less), the Administration shall collect a
guarantee fee, which shall be payable by the participating
lender, and may be charged to the borrower, as follows:
(i) A guarantee fee not to exceed 2 percent of the
deferred participation share of a total loan amount
that is not more than $150,000.
(ii) A guarantee fee not to exceed 3 percent of the
deferred participation share of a total loan amount
that is more than $150,000, but not more than
$700,000.
(iii) A guarantee fee not to exceed 3.5 percent of
the deferred participation share of a total loan amount
that is more than $700,000.
(iv) In addition to the fee under clause (iii), a
guarantee fee equal to 0.25 percent of any portion of
the deferred participation share that is more than
$1,000,000.
(B) RETENTION OF CERTAIN FEES.—Lenders participating in the programs established under this subsection
may retain not more than 25 percent of a fee collected
under subparagraph (A)(i).
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(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 16.—
(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 17.—If the Administrator
does not approve or deny a request for approval of a
liquidation plan within 10 business days of the date on
which the request is made (or with respect to any 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 civil16 So
17 So

in law. Probably should be ‘‘AUTHORITY TO LIQUIDATE
in law. Probably should be ‘‘AUTOMATIC APPROVAL’’.

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ian production or as may be necessary to insure 18 a wellbalanced national economy; and
(iv) such assistance is of such sound value as reasonably to assure that the terms under which it is provided
will not be breached by the small business concern.
(B)(i) No loan shall be made under this paragraph if the
total amount outstanding and committed (by participation or
otherwise) to the borrower would exceed $750,000.
(ii) Subject to the provisions of clause (i), in agreements to
participate in loans on a deferred (guaranteed) basis, participation by the Administration shall be not less than 85 per centum of the balance of the financing outstanding at the time of
disbursement.
(iii) The rate of interest on financings made on a deferred
(guaranteed) basis shall be legal and reasonable.
(iv) Financings made pursuant to this paragraph shall be
subject to the following limitations:
(I) No immediate participation may be purchased unless it is shown that a deferred participation is not available.
(II) No direct financing may be made unless it is
shown that a participation is unavailable.
(C) A direct loan or the Administration’s share of an immediate participation loan made pursuant to this paragraph shall
be any secured debt instrument—
(i) that is subordinated by its terms to all other borrowings of the issuer;
(ii) the rate of interest on which shall not exceed the
current average market yield on outstanding marketable
obligations of the United States with remaining periods to
maturity comparable to the average maturities of such
loan and adjusted to the nearest one-eighth of 1 per centum;
(iii) the term of which is not more than twenty-five
years; and
(iv) the principal on which is amortized at such rate
as may be deemed appropriate by the Administration, and
the interest on which is payable not less often than annually.
(21)(A) 19 The Administration may make loans on a guaranteed
basis under the authority of this subsection—
(i) to a small business concern that has been (or can 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.
18 So
19 So

in original. Probably should be ‘‘ensure’’.
in law. All of section 7(a)(21) indentions probably should be moved two ems to right.

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(B) Recognizing that greater risk may be associated with a
loan to a small business concern described in subparagraph (A)(i),
any reasonable doubts concerning the firm’s proposed business plan
for transition to nondefense-related markets shall be resolved in
favor of the loan applicant when making any determination regarding the sound value of the proposed loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in
such amounts as provided in advance in appropriation Acts for the
purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual is—
(i) a member of the Armed Forces of the United States,
honorably discharged from active duty involuntarily or pursuant to a program providing bonuses or other inducements to
encourage voluntary separation or early retirement;
(ii) a civilian employee of the Department of Defense involuntarily separated from Federal service or retired pursuant to
a program offering inducements to encourage early retirement;
or
(iii) an employee of a prime contractor, subcontractor, or
supplier at any tier of a Department of Defense program whose
employment is involuntarily terminated (or voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due to the termination (or substantial reduction) of a Department of Defense
program.
(E) 20 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
20 Margin

so in law.

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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 21, 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.
21 So

in original. Probably should read ‘‘paragraph’’.

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(28) 22 LEASING.—In addition to such other lease arrangements as may be authorized by the Administration, a borrower
may permanently lease to one or more tenants not more than
20 percent of any property constructed with the proceeds of a
loan guaranteed under this subsection, if the borrower permanently occupies and uses not less than 60 percent of the total
business space in the property.
(29) REAL ESTATE APPRAISALS.—
(A) IN GENERAL.—With respect to a loan under this
subsection that is secured by commercial real property, an
appraisal of such property by a State licensed or certified
appraiser—
(i) shall be required by the Administration in connection with any such loan, if such loan is in an
amount greater than the Federal banking regulator
appraisal threshold; or
(ii) may be required by the Administration or the
lender in connection with any such loan, if such loan
is in an amount equal to or less than the Federal
banking regulator appraisal threshold, if such appraisal is necessary for appropriate evaluation of creditworthiness.
(B) FEDERAL BANKING REGULATOR APPRAISAL THRESHOLD DEFINED.—For purposes of this paragraph, the term
‘‘Federal banking regulator appraisal threshold’’ means the
lesser of the threshold amounts set by the Board of Governors of the Federal Reserve System, the Comptroller of
the Currency, and the Federal Deposit Insurance Corporation for when a federally related transaction that is a commercial real estate transaction requires an appraisal prepared by a State licensed or certified appraiser.
(30) OWNERSHIP REQUIREMENTS.—Ownership requirements
to determine the eligibility of a small business concern that applies for assistance under any credit program under this Act
shall be determined without regard to any ownership interest
of a spouse arising solely from the application of the community property laws of a State for purposes of determining marital interests.
(31) EXPRESS LOANS.—
(A) DEFINITIONS.—As used in this paragraph:
(i) The term ‘‘disaster area’’ means the area for
which the President has declared a major disaster,
during the 5-year period beginning on the date of the
declaration.
(ii) The term ‘‘express lender’’ means any lender
authorized by the Administration to participate in the
Express Loan Program.
(iii) The term ‘‘express loan’’ means any loan made
pursuant to this paragraph in which a lender utilizes
to the maximum extent practicable its own loan analyses, procedures, and documentation.
22 Paragraph

(27) was repealed.

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(iv) The term ‘‘Express Loan Program’’ means the
program for express loans established by the Administration under paragraph (25)(B), as in existence on
April 5, 2004, with a guarantee 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 $500,000.
(E) OPTION TO PARTICIPATE.—Except as otherwise provided in this paragraph, the Administration shall take no
regulatory, policy, or administrative action, without regard
to whether such action requires notification pursuant to
paragraph (24), that has the effect of requiring a lender to
make an express loan pursuant to subparagraph (D).
(F) EXPRESS LOANS FOR RENEWABLE ENERGY AND ENERGY EFFICIENCY.—
(i) DEFINITIONS.—In this subparagraph—
(I) the term ‘‘biomass’’—
(aa) means any organic material that is
available on a renewable or recurring basis,
including—
(AA) agricultural crops;
(BB) trees grown for energy production;
(CC) wood waste and wood residues;
(DD) plants (including aquatic plants
and grasses);
(EE) residues;
(FF) fibers;
(GG) animal wastes and other waste
materials; and
(HH) fats, oils, and greases (including
recycled fats, oils, and greases); and
(bb) does not include—
(AA) paper that is commonly recycled; or
(BB) unsegregated solid waste;
(II) the term ‘‘energy efficiency project’’ means
the installation or upgrading of equipment that
results in a significant reduction in energy usage;
and
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(III) the term ‘‘renewable energy system’’
means a system of energy derived from—
(aa) a wind, solar, biomass (including biodiesel), or geothermal source; or
(bb) hydrogen derived from biomass or
water using an energy source described in
item (aa).
(ii) LOANS.—The Administrator may make a loan
under the Express Loan Program for the purpose of—
(I) purchasing a renewable energy system; or
(II) carrying out an energy efficiency project
for a small business concern.
(G) GUARANTEE FEE WAIVER FOR VETERANS.—
(i) GUARANTEE FEE WAIVER.—The Administrator
may not collect a guarantee fee described in paragraph
(18) in connection with a loan made under this paragraph to a veteran or spouse of a veteran on or after
October 1, 2015.
(ii) DEFINITION.—In this subparagraph, the term
‘‘veteran or spouse of a veteran’’ means—
(I) a veteran, as defined in section 3(q)(4);
(II) an individual who is eligible to participate
in the Transition Assistance Program established
under section 1144 of title 10, United States Code;
(III) a member of a reserve component of the
Armed Forces named in section 10101 of title 10,
United States Code;
(IV) the spouse of an individual described in
subclause (I), (II), or (III); or
(V) the surviving spouse (as defined in section
101 of title 38, United States Code) of an individual described in subclause (I), (II), or (III) who
died while serving on active duty or as a result of
a disability that is service-connected (as defined in
such section).
(H) RECOVERY OPPORTUNITY LOANS.—
(i) IN GENERAL.—The Administrator may guarantee an express loan to a small business concern located in a disaster area in accordance with this subparagraph.
(ii) MAXIMUMS.—For a loan guaranteed under
clause (i)—
(I) the maximum loan amount is $150,000;
and
(II) the guarantee rate shall be not more than
85 percent.
(iii) OVERALL CAP.—A loan guaranteed under
clause (i) shall not be counted in determining the
amount of loans made to a borrower for purposes of
subparagraph (D).
(iv) OPERATIONS.—A small business concern receiving a loan guaranteed under clause (i) shall certify
that the small business concern was in operation on
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the date on which the applicable major disaster occurred as a condition of receiving the loan.
(v) REPAYMENT ABILITY.—A loan guaranteed under
clause (i) may only be made to a small business concern that demonstrates, to the satisfaction of the Administrator, sufficient capacity to repay the loan.
(vi) TIMING OF PAYMENT OF GUARANTEES.—
(I) IN GENERAL.—Not later than 90 days after
the date on which a request for purchase is filed
with the Administrator, the Administrator shall
determine whether to pay the guaranteed portion
of the loan.
(II) RECAPTURE.—Notwithstanding any other
provision of law, unless there is a subsequent
finding of fraud by a court of competent jurisdiction relating to a loan guaranteed under clause (i),
on and after the date that is 6 months after the
date on which the Administrator determines to
pay the guaranteed portion of the loan, the Administrator may not attempt to recapture the paid
guarantee.
(vii) FEES.—
(I) IN GENERAL.—Unless the Administrator
has waived the guarantee fee that would otherwise be collected by the Administrator under
paragraph (18) for a loan guaranteed under clause
(i), and except as provided in subclause (II), the
guarantee fee for the loan shall be equal to the
guarantee fee that the Administrator would collect
if the guarantee rate for the loan was 50 percent.
(II) EXCEPTION.—Subclause (I) shall not apply
if the cost of carrying out the program under this
subsection in a fiscal year is more than zero and
such cost is directly attributable to the cost of
guaranteeing loans under clause (i).
(viii) RULES.—Not later than 270 days after the
date of enactment of this subparagraph, the Administrator shall promulgate rules to carry out this subparagraph.
(32) LOANS FOR ENERGY EFFICIENT TECHNOLOGIES.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘cost’’ has the meaning given that
term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a);
(ii) the term ‘‘covered energy efficiency loan’’
means a loan—
(I) made under this subsection; and
(II) the proceeds of which are used to purchase energy efficient designs, equipment, or fixtures, or to reduce the energy consumption of the
borrower by 10 percent or more; and
(iii) the term ‘‘pilot program’’ means the pilot program established under subparagraph (B)
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(B) ESTABLISHMENT.—The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for covered energy efficiency
loans.
(C) DURATION.—The pilot program shall terminate at
the end of the second full fiscal year after the date that the
Administrator establishes the pilot program.
(D) MAXIMUM PARTICIPATION.—A covered energy efficiency loan shall include the maximum participation levels
by the Administrator permitted for loans made under this
subsection.
(E) FEES.—
(i) IN GENERAL.—The fee on a covered energy efficiency loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
(ii) WAIVER.—The Administrator may waive clause
(i) for a fiscal year if—
(I) for the fiscal year before that fiscal year,
the annual rate of default of covered energy efficiency loans exceeds that of loans made under this
subsection that are not covered energy efficiency
loans;
(II) the cost to the Administration of making
loans under this subsection is greater than zero
and such cost is directly attributable to the cost of
making covered energy efficiency loans; and
(III) no additional sources of revenue authority are available to reduce the cost of making
loans under this subsection to zero.
(iii) EFFECT OF WAIVER.—If the Administrator
waives the reduction of fees under clause (ii), the Administrator—
(I) shall not assess or collect fees in an
amount greater than necessary to ensure that the
cost of the program under this subsection is not
greater than zero; and
(II) shall reinstate the fee reductions under
clause (i) when the conditions in clause (ii) no
longer apply.
(iv) NO INCREASE OF FEES.—The Administrator
shall not increase the fees under paragraph (18) on
loans made under this subsection that are not covered
energy efficiency loans as a direct result of the pilot
program.
(F) GAO REPORT.—
(i) IN GENERAL.—Not later than 1 year after the
date that the pilot program terminates, the Comptroller General of the United States shall submit to
the Committee on Small Business of the House of Representatives and the Committee on Small Business
and Entrepreneurship of the Senate a report on the
pilot program.
(ii) CONTENTS.—The report submitted under
clause (i) shall include—
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(I) the number of covered energy efficiency
loans for which fees were reduced under the pilot
program;
(II) a description of the energy efficiency savings with the pilot program;
(III) a description of the impact of the pilot
program on the program under this subsection;
(IV) an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
(V) recommendations for improving the pilot
program.
(33) INCREASED VETERAN PARTICIPATION PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘cost’’ has the meaning given that
term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a);
(ii) the term ‘‘pilot program’’ means the pilot program established under subparagraph (B); and
(iii) the term ‘‘veteran participation loan’’ means a
loan made under this subsection to a small business
concern owned and controlled by veterans of the
Armed Forces or members of the reserve components
of the Armed Forces.
(B) ESTABLISHMENT.—The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for veteran participation
loans.
(C) DURATION.—The pilot program shall terminate at
the end of the second full fiscal year after the date that the
Administrator establishes the pilot program.
(D) MAXIMUM PARTICIPATION.—A veteran participation
loan shall include the maximum participation levels by the
Administrator permitted for loans made under this subsection.
(E) FEES.—
(i) IN GENERAL.—The fee on a veteran participation loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
(ii) WAIVER.—The Administrator may waive clause
(i) for a fiscal year if—
(I) for the fiscal year before that fiscal year,
the annual estimated rate of default of veteran
participation loans exceeds that of loans made
under this subsection that are not veteran participation loans;
(II) the cost to the Administration of making
loans under this subsection is greater than zero
and such cost is directly attributable to the cost of
making veteran participation loans; and
(III) no additional sources of revenue authority are available to reduce the cost of making
loans under this subsection to zero.
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(iii) EFFECT OF WAIVER.—If the Administrator
waives the reduction of fees under clause (ii), the Administrator—
(I) shall not assess or collect fees in an
amount greater than necessary to ensure that the
cost of the program under this subsection is not
greater than zero; and
(II) shall reinstate the fee reductions under
clause (i) when the conditions in clause (ii) no
longer apply.
(iv) NO INCREASE OF FEES.—The Administrator
shall not increase the fees under paragraph (18) on
loans made under this subsection that are not veteran
participation loans as a direct result of the pilot program.
(F) GAO REPORT.—
(i) IN GENERAL.—Not later than 1 year after the
date that the pilot program terminates, the Comptroller General of the United States shall submit to
the Committee on Small Business of the House of Representatives and the Committee on Small Business
and Entrepreneurship of the Senate a report on the
pilot program.
(ii) CONTENTS.—The report submitted under
clause (i) shall include—
(I) the number of veteran participation loans
for which fees were reduced under the pilot program;
(II) a description of the impact of the pilot
program on the program under this subsection;
(III) an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
(IV) recommendations for improving the pilot
program.
(34) EXPORT EXPRESS PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘export development activity’’ includes—
(I) obtaining a standby letter of credit when
required as a bid bond, performance bond, or advance payment guarantee;
(II) participation in a trade show that takes
place outside the United States;
(III) translation of product brochures or catalogues for use in markets outside the United
States;
(IV) obtaining a general line of credit for export purposes;
(V) performing a service contract from buyers
located outside the United States;
(VI) obtaining transaction-specific financing
associated with completing export orders;
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(VII) purchasing real estate or equipment to
be used in the production of goods or services for
export;
(VIII) providing term loans or other financing
to enable a small business concern, including an
export trading company and an export management company, to develop a market outside the
United States; and
(IX) acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United
States in the production of goods or services for
export; and
(ii) the term ‘‘express loan’’ means a loan in which
a lender uses to the maximum extent practicable the
loan analyses, procedures, and documentation of the
lender to provide expedited processing of the loan application.
(B) AUTHORITY.—The Administrator may guarantee
the timely payment of an express loan to a small business
concern made for an export development activity.
(C) LEVEL OF PARTICIPATION.—
(i) MAXIMUM AMOUNT.—The maximum amount of
an express loan guaranteed under this paragraph
shall be $500,000.
(ii) PERCENTAGE.—For an express loan guaranteed
under this paragraph, the Administrator shall guarantee—
(I) 90 percent of a loan that is not more than
$350,000; and
(II) 75 percent of a loan that is more than
$350,000 and not more than $500,000.
(35) LOANS TO COOPERATIVES.—
(A) DEFINITION.—In this paragraph, the term ‘‘cooperative’’ means an entity that is determined to be a cooperative by the Administrator, in accordance with applicable
Federal and State laws and regulation.
(B) AUTHORITY.—The Administration shall guarantee
loans made to a cooperative for the purpose described in
paragraph (15).
(36) 23 PAYCHECK PROTECTION PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(i) the terms ‘‘appropriate Federal banking agency’’ and ‘‘insured depository institution’’ have the
meanings given those terms in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813);
(ii) the term ‘‘covered loan’’ means a loan made
under this paragraph during the covered period;
(iii) the term ‘‘covered period’’ means the period
beginning on February 15, 2020 and ending on June
30, 2021;
23 For the forgiveness of loans made under this paragraph, see section 7A of this Act, formerly
section 1106 of division A of the CARES Act (Public Law 116–136), as transferred and amended
by section 304(b) of title III of division N of Pub. L. 116–260.

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(iv) the term ‘‘eligible recipient’’ means an individual or entity that is eligible to receive a covered
loan;
(v) the term ‘‘eligible self-employed individual’’ has
the meaning given the term in section 7002(b) of the
Families First Coronavirus Response Act (Public Law
116–127);
(vi) the term ‘‘insured credit union’’ has the meaning given the term in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
(vii) the term ‘‘nonprofit organization’’ means an
organization that is described in section 501(c)(3) of
the Internal Revenue Code of 1986 and that is exempt
from taxation under section 501(a) of such Code;
(viii) the term ‘‘payroll costs’’—
(I) means—
(aa) the sum of payments of any compensation with respect to employees that is
a—
(AA) salary, wage, commission, or
similar compensation;
(BB) payment of cash tip or equivalent;
(CC) payment for vacation, parental,
family, medical, or sick leave;
(DD) allowance for dismissal or separation;
(EE) payment required for the provisions of group health care or group life,
disability, vision, or dental insurance benefits, including insurance premiums;
(FF) payment of any retirement benefit; or
(GG) payment of State or local tax assessed on the compensation of employees;
and
(bb) the sum of payments of any compensation to or income of a sole proprietor or
independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is
in an amount that is not more than $100,000
on an annualized basis, as prorated for the
period during which the payments are made
or the obligation to make the payments is incurred; and
(II) shall not include—
(aa) the compensation of an individual
employee in excess of $100,000 on an
annualized basis, as prorated for the period
during which the compensation is paid or the
obligation to pay the compensation is incurred;
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(bb) taxes imposed or withheld under
chapters 21, 22, or 24 of the Internal Revenue
Code of 1986 during the applicable period;
(cc) any compensation of an employee
whose principal place of residence is outside
of the United States;
(dd) qualified sick leave wages for which
a credit is allowed under section 7001 of the
Families First Coronavirus Response Act
(Public Law 116–127); or
(ee) qualified family leave wages for
which a credit is allowed under section 7003
of the Families First Coronavirus Response
Act (Public Law 116–127);
(ix) the term ‘‘veterans organization’’ means an organization that is described in section 501(c)(19) of the
Internal Revenue Code that is exempt from taxation
under section 501(a) of such Code;
(x) the term ‘‘community development financial institution’’ has the meaning given the term in section
103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702));
(xi) the term ‘‘community financial institutions’’
means—
(I) a community development financial institution;
(II) a minority depository institution, as defined in section 308 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 1463 note);
(III) a development company that is certified
under title V of the Small Business Investment
Act of 1958 (15 U.S.C. 695 et seq.); and
(IV) an intermediary, as defined in section
7(m)(11);
(xii) the term ‘‘credit union’’ means a State credit
union or a Federal credit union, as those terms are defined, respectively, in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
(xiii) the term ‘‘seasonal employer’’ means an eligible recipient that—
(I) does not operate for more than 7 months
in any calendar year; or
(II) during the preceding calendar year, had
gross receipts for any 6 months of that year that
were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of
that year;
(xiv) the term ‘‘housing cooperative’’ means a cooperative housing corporation (as defined in section
216(b) of the Internal Revenue Code of 1986) that employs not more than 300 employees;
(xv) the term ‘‘destination marketing organization’’
means a nonprofit entity that is—
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(I) an organization described in section 501(c)
of the Internal Revenue Code of 1986 and exempt
from tax under section 501(a) of such Code; or
(II) a State, or a political subdivision of a
State (including any instrumentality of such entities)—
(aa) engaged in marketing and promoting
communities and facilities to businesses and
leisure travelers through a range of activities,
including—
(AA) assisting with the location of
meeting and convention sites;
(BB) providing travel information on
area attractions, lodging accommodations,
and restaurants;
(CC) providing maps; and
(DD) organizing group tours of local
historical, recreational, and cultural attractions; or
(bb) that is engaged in, and derives the
majority of the operating budget of the entity
from revenue attributable to, providing live
events;
(xvi) the terms ‘‘exchange’’, ‘‘issuer’’, and ‘‘security’’
have the meanings given those terms in section 3(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
and
(xvii) the term ‘‘additional covered nonprofit entity’’—
(I) means an organization described in any
paragraph of section 501(c) of the Internal Revenue Code of 1986, other than paragraph (3), (4),
(6), or (19), and exempt from tax under section
501(a) of such Code; and
(II) does not include any entity that, if the entity were a business concern, would be described
in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other
related guidance or rule that may be issued by the
Administrator) other than a business concern described in paragraph (a) or (k) of such section.
(B) PAYCHECK PROTECTION LOANS.—Except as otherwise provided in this paragraph, the Administrator may
guarantee covered loans under the same terms, conditions,
and processes as a loan made under this subsection.
(C) REGISTRATION OF LOANS.—Not later than 15 days
after the date on which a loan is made under this paragraph, the Administration shall register the loan using the
TIN (as defined in section 7701 of the Internal Revenue
Code of 1986) assigned to the borrower.
(D) INCREASED ELIGIBILITY FOR CERTAIN SMALL BUSINESSES AND ORGANIZATIONS.—
(i) IN GENERAL.—During the covered period, in addition to small business concerns, any business conFebruary 1, 2024

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cern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern described in section 31(b)(2)(C) shall be eligible to receive a covered loan if the business concern, nonprofit
organization, housing cooperative, veterans organization, or Tribal business concern employs not more
than the greater of—
(I) 500 employees; or
(II) if applicable, the size standard in number
of employees established by the Administration for
the industry in which the business concern, nonprofit organization, housing cooperative, veterans
organization, or Tribal business concern operates.
(ii) INCLUSION OF SOLE PROPRIETORS, INDEPENDENT CONTRACTORS, AND ELIGIBLE SELF-EMPLOYED
INDIVIDUALS.—
(I) IN GENERAL.—During the covered period,
individuals who operate under a sole proprietorship or as an independent contractor and eligible
self-employed individuals shall be eligible to receive a covered loan.
(II) DOCUMENTATION.—An eligible self-employed individual, independent contractor, or sole
proprietorship seeking a covered loan shall submit
such documentation as determined necessary by
the Administrator and the Secretary, to establish
the applicant as eligible.
(iii) BUSINESS CONCERNS WITH MORE THAN 1 PHYSICAL LOCATION.—
(I) IN GENERAL.—During the covered period,
any business concern that employs not more than
500 employees per physical location of the business concern and that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal shall be eligible to receive a covered loan.
(II) ELIGIBILITY OF NEWS ORGANIZATIONS.—
(aa) DEFINITION.—In this subclause, the
term ‘‘included business concern’’ means a
business concern, including any station which
broadcasts pursuant to a license granted by
the Federal Communications Commission
under title III of the Communications Act of
1934 (47 U.S.C. 301 et seq.) without regard
for whether such a station is a concern as defined in section 121.105 of title 13, Code of
Federal Regulations, or any successor thereto—
(AA) that employs not more than 500
employees, or the size standard established by the Administrator for the North
American Industry Classification System
code applicable to the business concern,
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per physical location of such business concern; or
(BB) any nonprofit organization or
any organization otherwise subject to section 511(a)(2)(B) of the Internal Revenue
Code of 1986 that is a public broadcasting
entity (as defined in section 397(11) of the
Communications Act of 1934 (47 U.S.C.
397(11))).
(bb) ELIGIBILITY.—During the covered period, an included business concern shall be eligible to receive a covered loan if—
(AA) the included business concern is
majority owned or controlled by a business concern that is assigned a North
American Industry Classification System
code beginning with 511110 or 5151 or,
with respect to a public broadcasting entity (as defined in section 397(11) of the
Communications Act of 1934 (47 U.S.C.
397(11))), has a trade or business that
falls under such a code; and
(BB) the included business concern
makes a good faith certification that proceeds of the loan will be used to support
expenses at the component of the included business concern that produces or
distributes locally focused or emergency
information.
(III) ELIGIBILITY OF CERTAIN ORGANIZATIONS.—Subject to the provisions in this subparagraph, during the covered period—
(aa) a nonprofit organization shall be eligible to receive a covered loan if the nonprofit
organization employs not more than 500 employees per physical location of the organization; and
(bb) an additional covered nonprofit entity and an organization that, but for subclauses (I)(dd) and (II)(dd) of clause (vii),
would be eligible for a covered loan under
clause (vii) shall be eligible to receive a covered loan if the entity or organization employs
not more than 300 employees per physical location of the entity or organization.
(IV) ELIGIBILITY OF INTERNET PUBLISHING ORGANIZATIONS.—A business concern or other organization that was not eligible to receive a covered
loan the day before the date of enactment of this
subclause, is assigned a North American Industry
Classification System code of 519130, certifies in
good faith as an Internet-only news publisher or
Internet-only periodical publisher, and is engaged
in the collection and distribution of local or reFebruary 1, 2024

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gional and national news and information shall be
eligible to receive a covered loan for the continued
provision of news, information, content, or emergency information if—
(aa) the business concern or organization
employs not more than 500 employees, or the
size standard established by the Administrator for that North American Industry Classification code, per physical location of the
business concern or organization; and
(bb) the business concern or organization
makes a good faith certification that proceeds
of the loan will be used to support expenses at
the component of the business concern or organization that supports local or regional
news.
(iv) WAIVER OF AFFILIATION RULES.—During the
covered period, the provisions applicable to affiliations
under section 121.103 of title 13, Code of Federal Regulations, or any successor regulation, are waived with
respect to eligibility for a covered loan for—
(I) any business concern with not more than
500 employees that, as of the date on which the
covered loan is disbursed, is assigned a North
American Industry Classification System code beginning with 72;
(II) any business concern operating as a franchise that is assigned a franchise identifier code
by the Administration;
(III) any business concern that receives financial assistance from a company licensed under section 301 of the Small Business Investment Act of
1958 (15 U.S.C. 681);
(IV)(aa) any business concern (including any
station which broadcasts pursuant to a license
granted by the Federal Communications Commission under title III of the Communications Act of
1934 (47 U.S.C. 301 et seq.) without regard for
whether such a station is a concern as defined in
section 121.105 of title 13, Code of Federal Regulations, or any successor thereto) that employs not
more than 500 employees, or the size standard established by the Administrator for the North
American Industry Classification System code applicable to the business concern, per physical location of such business concern and is majority
owned or controlled by a business concern that is
assigned a North American Industry Classification
System code beginning with 511110 or 5151; or
(bb) any nonprofit organization that is assigned a North American Industry Classification
System code beginning with 5151; and
(V) any business concern or other organization that was not eligible to receive a covered loan
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the day before the date of enactment of this subclause, is assigned a North American Industry
Classification System code of 519130, certifies in
good faith as an Internet-only news publisher or
Internet-only periodical publisher, and is engaged
in the collection and distribution of local or regional and national news and information, if the
business concern or organization—
(aa) employs not more than 500 employees, or the size standard established by the
Administrator for that North American Industry Classification code, per physical location of
the business concern or organization; and
(bb) is majority owned or controlled by a
business concern or organization that is assigned a North American Industry Classification System code of 519130.
(v) EMPLOYEE.—For purposes of determining
whether a business concern, nonprofit organization,
veterans organization, or Tribal business concern described in section 31(b)(2)(C) employs not more than
500 employees under clause (i)(I), or for purposes of
determining the number of employees of a housing cooperative or a business concern or organization made
eligible for a loan under this paragraph under subclause (II), (III), or (IV) of clause (iii), subclause (IV)
or (V) of clause (iv), clause (vii), or clause (ix), the
term ‘‘employee’’ includes individuals employed on a
full-time, part-time, or other basis.
(vi) AFFILIATION.—The provisions applicable to affiliations under section 121.103 of title 13, Code of
Federal Regulations, or any successor thereto, shall
apply with respect to a nonprofit organization 24 and,
a housing cooperative, a veterans organization in the
same manner as with respect to a small business concern.
(vii) ELIGIBILITY FOR CERTAIN 501(c)(6) ORGANIZATIONS.—
(I) IN GENERAL.—Any organization that is described in section 501(c)(6) of the Internal Revenue Code and that is exempt from taxation under
section 501(a) of such Code (excluding professional
sports leagues and organizations with the purpose
of promoting or participating in a political campaign or other activity) shall be eligible to receive
a covered loan if—
(aa) the organization does not receive
more than 15 percent of its receipts from lobbying activities;
24 Section 318(2)(B) of division N of Public Law 116–260 provides for an amendment to clause
(vi) by inserting ‘‘a business concern or organization made eligible for a loan under this paragraph under clause (vii),’’ after ‘‘a nonprofit organization,’’. The amendment was not carried out
because the comma at the end of the phrase where the new text is to be inserted does not appear in law.

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(bb) the lobbying activities of the organization do not comprise more than 15 percent
of the total activities of the organization;
(cc) the cost of the lobbying activities of
the organization did not exceed $1,000,000
during the most recent tax year of the organization that ended prior to February 15, 2020;
and
(dd) the organization employs not more
than 300 employees.
(II) DESTINATION MARKETING ORGANIZATIONS.—Any destination marketing organization
shall be eligible to receive a covered loan if—
(aa) the destination marketing organization does not receive more than 15 percent of
its receipts from lobbying activities;
(bb) the lobbying activities of the destination marketing organization do not comprise
more than 15 percent of the total activities of
the organization;
(cc) the cost of the lobbying activities of
the destination marketing organization did
not exceed $1,000,000 during the most recent
tax year of the destination marketing organization that ended prior to February 15, 2020;
and
(dd) the destination marketing organization employs not more than 300 employees;
and
(ee) the destination marketing organization—
(AA) is described in section 501(c) of
the Internal Revenue Code and is exempt
from taxation under section 501(a) of
such Code; or
(BB) is a quasi-governmental entity
or is a political subdivision of a State or
local government, including any instrumentality of those entities.
(viii) INELIGIBILITY OF PUBLICLY-TRADED ENTITIES.—
(I) IN GENERAL.—Subject to subclause (II),
and notwithstanding any other provision of this
paragraph, on and after the date of enactment of
the Economic Aid to Hard-Hit Small Businesses,
Nonprofits, and Venues Act, an entity that is an
issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 6 of the Securities Exchange
Act of 1934 (15 U.S.C. 78f), shall be ineligible to
receive a covered loan under this paragraph.
(II) RULE FOR AFFILIATED ENTITIES.—With respect to a business concern made eligible by subclause (II) or (IV) of clause (iii) or subclause (IV)
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or (V) of clause (iv) of this subparagraph, the Administrator shall not consider whether any affiliated entity, which for purposes of this subclause
shall include any entity that owns or controls such
business concern or organization, is an issuer.
(ix) ELIGIBILITY OF ADDITIONAL COVERED NONPROFIT ENTITIES.—An additional covered nonprofit entity shall be eligible to receive a covered loan if—
(I) the additional covered nonprofit entity
does not receive more than 15 percent of its receipts from lobbying activities;
(II) the lobbying activities of the additional
covered nonprofit entity do not comprise more
than 15 percent of the total activities of the organization;
(III) the cost of the lobbying activities of the
additional covered nonprofit entity did not exceed
$1,000,000 during the most recent tax year of the
additional covered nonprofit entity that ended
prior to February 15, 2020; and
(IV) the additional covered nonprofit entity
employs not more than 300 employees.
(E) MAXIMUM LOAN AMOUNT.—Except as provided in
subparagraph (V), during the covered period, with respect
to a covered loan, the maximum loan amount shall be the
lesser of—
(i)(I) the sum of—
(aa) the product obtained by multiplying—
(AA) the average total monthly payments
by the applicant for payroll costs incurred
during the 1-year period before the date on
which the loan is made, except thatan applicant that is a seasonal employer shall use the
average total monthly payments for payroll
for any 12-week period selected by the seasonal employer between February 15, 2019,
and February 15, 2020; by
(BB) 2.5; and
(bb) the outstanding amount of a loan under
subsection (b)(2) that was made during the period
beginning on January 31, 2020 and ending on the
date on which covered loans are made available to
be refinanced under the covered loan; or
(II) if requested by an otherwise eligible recipient
that was not in business during the period beginning
on February 15, 2019 and ending on June 30, 2019,
the sum of—
(aa) the product obtained by multiplying—
(AA) the average total monthly payments
by the applicant for payroll costs incurred
during the period beginning on January 1,
2020 and ending on February 29, 2020; by
(BB) 2.5; and
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(bb) the outstanding amount of a loan under
subsection (b)(2) that was made during the period
beginning on January 31, 2020 and ending on the
date on which covered loans are made available to
be refinanced under the covered loan; or
(ii) $10,000,000.
(F) ALLOWABLE USES OF COVERED LOANS.—
(i) IN GENERAL.—During the covered period, an eligible recipient may, in addition to the allowable uses
of a loan made under this subsection, use the proceeds
of the covered loan for—
(I) payroll costs;
(II) costs related to the continuation of group
health care benefits during periods of paid sick,
medical, or family leave, and insurance premiums;
(III) employee salaries, commissions, or similar compensations;
(IV) payments of interest on any mortgage obligation (which shall not include any prepayment
of or payment of principal on a mortgage obligation);
(V) rent (including rent under a lease agreement);
(VI) utilities;
(VII) interest on any other debt obligations
that were incurred before the covered period;
(VIII) covered operations expenditures, as defined in section 7A(a);
(IX) covered property damage costs, as defined
in section 7A(a);
(X) covered supplier costs, as defined in section 7A(a); and
(XI) covered worker protection expenditures,
as defined in section 7A(a).
(ii) DELEGATED AUTHORITY.—
(I) IN GENERAL.—For purposes of making covered loans for the purposes described in clause (i),
a lender approved to make loans under this subsection shall be deemed to have been delegated
authority by the Administrator to make and approve covered loans, subject to the provisions of
this paragraph.
(II) CONSIDERATIONS.—In evaluating the eligibility of a borrower for a covered loan with the
terms described in this paragraph, a lender shall
consider whether the borrower—
(aa) was in operation on February 15,
2020; and
(bb)(AA) had employees for whom the borrower paid salaries and payroll taxes; or
(BB) paid independent contractors, as reported on a Form 1099–MISC.
(iii) ADDITIONAL LENDERS.—The authority to make
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tional lenders determined by the Administrator and
the Secretary of the Treasury to have the necessary
qualifications to process, close, disburse and service
loans made with the guarantee of the Administration.
(iv) REFINANCE.—A loan made under subsection
(b)(2) during the period beginning on January 31, 2020
and ending on the date on which covered loans are
made available may be refinanced as part of a covered
loan.
(v) NONRECOURSE.—Notwithstanding the waiver
of the personal guarantee requirement or collateral
under subparagraph (J), the Administrator shall have
no recourse against any individual shareholder, member, or partner of an eligible recipient of a covered
loan for nonpayment of any covered loan, except to the
extent that such shareholder, member, or partner uses
the covered loan proceeds for a purpose not authorized
under clause (i) or (iv).
(vi) PROHIBITION.—None of the proceeds of a covered loan may be used for—
(I) lobbying activities, as defined in section 3
of the Lobbying Disclosure Act of 1995 (2 U.S.C.
1602);
(II) lobbying expenditures related to a State
or local election; or
(III) expenditures designed to influence the
enactment of legislation, appropriations, regulation, administrative action, or Executive order
proposed or pending before Congress or any State
government, State legislature, or local legislature
or legislative body.
(G) BORROWER REQUIREMENTS.—
(i) CERTIFICATION.—An eligible recipient applying
for a covered loan shall make a good faith certification—
(I) that the uncertainty of current economic
conditions makes necessary the loan request to
support the ongoing operations of the eligible recipient;
(II) acknowledging that funds will be used to
retain workers and maintain payroll or make
mortgage payments, lease payments, and utility
payments;
(III) that the eligible recipient does not have
an application pending for a loan under this subsection for the same purpose and duplicative of
amounts applied for or received under a covered
loan; and
(IV) during the period beginning on February
15, 2020 and ending on December 31, 2020, that
the eligible recipient has not received amounts
under this subsection for the same purpose and
duplicative of amounts applied for or received
under a covered loan.
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(H) FEE WAIVER.—With respect to a covered loan—
(i) in lieu of the fee otherwise applicable under
paragraph (23)(A), the Administrator shall collect no
fee; and
(ii) in lieu of the fee otherwise applicable under
paragraph (18)(A), the Administrator shall collect no
fee.
(I) CREDIT ELSEWHERE.—During the covered period,
the requirement that a small business concern is unable to
obtain credit elsewhere, as defined in section 3(h), shall
not apply to a covered loan.
(J) WAIVER OF PERSONAL GUARANTEE REQUIREMENT.—
With respect to a covered loan—
(i) no personal guarantee shall be required for the
covered loan; and
(ii) no collateral shall be required for the covered
loan.
(K) MATURITY FOR LOANS WITH REMAINING BALANCE
AFTER APPLICATION OF FORGIVENESS.—With respect to a
covered loan that has a remaining balance after reduction
based on the loan forgiveness amount under section 7A—
(i) the remaining balance shall continue to be
guaranteed by the Administration under this subsection; and
(ii) the covered loan shall have a minimum maturity of 5 years and a maximum maturity of 10 years
from the date on which the borrower applies for loan
forgiveness under that section.
(L) INTEREST RATE REQUIREMENTS.—A covered loan
shall bear an interest rate not to exceed 4 percent, calculated on a non-compounding, non-adjustable basis.
(M) LOAN DEFERMENT.—
(i) DEFINITION OF IMPACTED BORROWER.—
(I) IN GENERAL.—In this subparagraph, the
term ‘‘impacted borrower’’ means an eligible recipient that—
(aa) is in operation on February 15, 2020;
and
(bb) has an application for a covered loan
that is approved or pending approval on or
after the date of enactment of this paragraph.
(II) PRESUMPTION.—For purposes of this subparagraph, an impacted borrower is presumed to
have been adversely impacted by COVID–19.
(ii) DEFERRAL.—The Administrator shall—
(I) consider each eligible recipient that applies
for a covered loan to be an impacted borrower;
and
(II) require lenders under this subsection to
provide complete payment deferment relief for impacted borrowers with covered loans, including
payment of principal, interest, and fees, until the
date on which the amount of forgiveness determined under section 7A is remitted to the lender.
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(iii) SECONDARY MARKET.—With respect to a covered loan that is sold on the secondary market, if an
investor declines to approve a deferral requested by a
lender under clause (ii), the Administrator shall exercise the authority to purchase the loan so that the impacted borrower may receive a deferral, including payment of principal, interest, and fees, until the date on
which the amount of forgiveness determined under
section 7A is remitted to the lender.
(iv) GUIDANCE.—Not later than 30 days after the
date of enactment of this paragraph, the Administrator shall provide guidance to lenders under this
paragraph on the deferment process described in this
subparagraph.
(v) RULE OF CONSTRUCTION.—If an eligible recipient fails to apply for forgiveness of a covered loan
within 10 months after the last day of the covered period defined in section 7A(a), such eligible recipient
shall make payments of principal, interest, and fees on
such covered loan beginning on the day that is not
earlier than the date that is 10 months after the last
day of such covered period.
(N) SECONDARY MARKET SALES.—A covered loan shall
be eligible to be sold in the secondary market consistent
with this subsection. The Administrator may not collect
any fee for any guarantee sold into the secondary market
under this subparagraph.
(O) REGULATORY CAPITAL REQUIREMENTS.—
(i) RISK WEIGHT.—With respect to the appropriate
Federal banking agencies or the National Credit
Union Administration Board applying capital requirements under their respective risk-based capital requirements, a covered loan shall receive a risk weight
of zero percent.
(ii) TEMPORARY RELIEF FROM TDR DISCLOSURES.—
Notwithstanding any other provision of law, an insured depository institution or an insured credit union
that modifies a covered loan in relation to COVID–19related difficulties in a troubled debt restructuring on
or after March 13, 2020, shall not be required to comply with the Financial Accounting Standards Board
Accounting Standards Codification Subtopic 310–40
(‘‘Receivables – Troubled Debt Restructurings by
Creditors’’) for purposes of compliance with the requirements of the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.), until such time and under such
circumstances as the appropriate Federal banking
agency or the National Credit Union Administration
Board, as applicable, determines appropriate.
(P) REIMBURSEMENT FOR PROCESSING.—
(i) IN GENERAL.—The Administrator shall reimburse a lender authorized to make a covered loan as
follows:
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(I) With respect to a covered loan made during the period beginning on the date of enactment
of this paragraph and ending on the day before
the date of enactment of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act, the Administrator shall reimburse
such a lender at a rate, based on the balance of
the financing outstanding at the time of disbursement of the covered loan, of—
(aa) 5 percent for loans of not more than
$350,000;
(bb) 3 percent for loans of more than
$350,000 and less than $2,000,000; and
(cc) 1 percent for loans of not less than
$2,000,000.
(II) With respect to a covered loan made on or
after the date of enactment of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act, the Administrator shall reimburse
such a lender—
(aa) for a covered loan of not more than
$50,000, in an amount equal to the lesser of—
(AA) 50 percent of the balance of the
financing outstanding at the time of disbursement of the covered loan; or
(BB) $2,500; and
(bb) at a rate, based on the balance of the
financing outstanding at the time of disbursement of the covered loan, of—
(AA) 5 percent for a covered loan of
more than $50,000 and not more than
$350,000;
(BB) 3 percent for a covered loan of
more than $350,000 and less than
$2,000,000; and
(CC) 1 percent for a covered loan of
not less than $2,000,000.
(ii) FEE LIMITS.—An agent that assists an eligible
recipient to prepare an application for a covered loan
may not collect a fee in excess of the limits established
by the Administrator. If an eligible recipient has
knowingly retained an agent, such fees shall be paid
by the eligible recipient and may not be paid out of the
proceeds of a covered loan. A lender shall only be responsible for paying fees to an agent for services for
which the lender directly contracts with the agent.
(iii) TIMING.—A reimbursement described in
clause (i) shall be made not later than 5 days after the
reported disbursement of the covered loan and may
not be required to be repaid by a lender unless the
lender is found guilty of an act of fraud in connection
with the covered loan.
(iv) SENSE OF THE SENATE.—It is the sense of the
Senate that the Administrator should issue guidance
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to lenders and agents to ensure that the processing
and disbursement of covered loans prioritizes small
business concerns and entities in underserved and
rural markets, including veterans and members of the
military community, small business concerns owned
and controlled by socially and economically disadvantaged individuals (as defined in section 8(d)(3)(C)),
women, and businesses in operation for less than 2
years.
(Q) DUPLICATION.—Nothing in this paragraph shall
prohibit a recipient of an economic injury disaster loan
made under subsection (b)(2) during the period beginning
on January 31, 2020 and ending on the date on which covered loans are made available 25 that is for a purpose other
than paying payroll costs and other obligations described
in subparagraph (F) from receiving assistance under this
paragraph.
(R) WAIVER OF PREPAYMENT PENALTY.—Notwithstanding any other provision of law, there shall be no prepayment penalty for any payment made on a covered loan.
(S) SET-ASIDE FOR INSURED DEPOSITORY INSTITUTIONS,
CREDIT UNIONS, AND COMMUNITY FINANCIAL INSTITUTIONS.—
(i) INSURED DEPOSITORY INSTITUTIONS AND CREDIT
UNIONS.—In making loan guarantees under this paragraph after the date of enactment of this clause, the
Administrator shall guarantee not less than
$30,000,000,000 in loans made by—
(I) insured depository institutions with consolidated assets of not less than $10,000,000,000
and less than $50,000,000,000; and
(II) credit unions with consolidated assets of
not less than $10,000,000,000 and less than
$50,000,000,000.
(ii) COMMUNITY FINANCIAL INSTITUTIONS, SMALL
INSURED
DEPOSITORY
INSTITUTIONS,
AND
CREDIT
UNIONS.—In making loan guarantees under this paragraph after the date of enactment of this clause, the
Administrator shall guarantee not less than
$30,000,000,000 in loans made by—
(I) community financial institutions;
(II) insured depository institutions with consolidated assets of less than $10,000,000,000; and
(III) credit unions with consolidated assets of
less than $10,000,000,000.
(T) REQUIREMENT FOR DATE IN OPERATION.—A business or organization that was not in operation on February
15, 2020 shall not be eligible for a loan under this paragraph.
25 Section 341 of division N of Public Law 116–260 provides for an amendment to subparagraph (Q) by striking ‘‘during the period beginning on January 31, 2020, and ending on the date
on which covered loans are made available’’. Such amendment was not carried out because the
comma after ‘‘2020’’ matter proposed to be struck does not appear in law.

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(U) EXCLUSION OF ENTITIES RECEIVING
VENUE OPERATOR GRANTS.—An eligible person

72
SHUTTERED

or entity (as
defined under of section 24 of the Economic Aid to HardHit Small Businesses, Nonprofits, and Venues Act) that receives a grant under such section 24 shall not be eligible
for a loan under this paragraph.
(V) CALCULATION OF MAXIMUM LOAN AMOUNT FOR
FARMERS AND RANCHERS.—
(i) DEFINITION.—In this subparagraph, the term
‘‘covered recipient’’ means an eligible recipient that—
(I) operates as a sole proprietorship or as an
independent contractor, or is an eligible self-employed individual;
(II) reports farm income or expenses on a
Schedule F (or any equivalent successor schedule);
and
(III) was in business as of February 15, 2020.
(ii) NO EMPLOYEES.—With respect to covered recipient without employees, the maximum covered loan
amount shall be the lesser of—
(I) the sum of—
(aa) the product obtained by multiplying—
(AA) the gross income of the covered
recipient in 2019, as reported on a Schedule F (or any equivalent successor schedule), that is not more than $100,000, divided by 12; and
(BB) 2.5; and
(bb) the outstanding amount of a loan
under subsection (b)(2) that was made during
the period beginning on January 31, 2020 and
ending on April 3, 2020 that the borrower intends to refinance under the covered loan, not
including any amount of any advance under
the loan that is not required to be repaid; or
(II) $2,000,000.
(iii) WITH EMPLOYEES.—With respect to a covered
recipient with employees, the maximum covered loan
amount shall be calculated using the formula described in subparagraph (E), except that the gross income of the covered recipient described in clause
(ii)(I)(aa)(AA) of this subparagraph, as divided by 12,
shall be added to the sum calculated under subparagraph (E)(i)(I).
(iv) RECALCULATION.—A lender that made a covered loan to a covered recipient before the date of enactment of this subparagraph may, at the request of
the covered recipient—
(I) recalculate the maximum loan amount applicable to that covered loan based on the formula
described in clause (ii) or (iii), as applicable, if
doing so would result in a larger covered loan
amount; and
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(II) provide the covered recipient with additional covered loan amounts based on that recalculation.
(W) FRAUD ENFORCEMENT HARMONIZATION.—Notwithstanding any other provision of law, any criminal charge
or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed
under this paragraph shall be filed not later than 10 years
after the offense was committed.
(37) PAYCHECK PROTECTION PROGRAM SECOND DRAW
LOANS.—
(A) DEFINITIONS.—In this paragraph—
(i) the terms ‘‘additional covered nonprofit entity’’,‘‘eligible self-employed individual’’, ‘‘housing cooperative’’, ‘‘nonprofit organization’’, ‘‘payroll costs’’, ‘‘seasonal employer’’, and ‘‘veterans organization’’ have the
meanings given those terms in paragraph (36), except
that ‘‘eligible entity’’ shall be substituted for ‘‘eligible
recipient’’ each place it appears in the definitions of
those terms;
(ii) the term ‘‘covered loan’’ means a loan made
under this paragraph;
(iii) the terms ‘‘covered mortgage obligation’’, ‘‘covered operating expenditure’’, ‘‘covered property damage cost’’, ‘‘covered rent obligation’’, ‘‘covered supplier
cost’’, ‘‘covered utility payment’’, and ‘‘covered worker
protection expenditure’’ have the meanings given those
terms in section 7A(a);
(iv) the term ‘‘eligible entity’’—
(I) means any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent
contractor, or small agricultural cooperative
that—
(aa) employs not more than 300 employees; and
(bb)(AA) except as provided in subitems
(BB), (CC), and (DD), had gross receipts during the first, second, third, or, only with respect to an application submitted on or after
January 1, 2021, fourth quarter in 2020 that
demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019;
(BB) if the entity was not in business
during the first or second quarter of 2019, but
was in business during the third and fourth
quarter of 2019, had gross receipts during the
first, second, third, or, only with respect to an
application submitted on or after January 1,
2021, fourth quarter of 2020 that demonstrate
not less than a 25 percent reduction from the
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gross receipts of the entity during the third or
fourth quarter of 2019;
(CC) if the entity was not in business
during the first, second, or third quarter of
2019, but was in business during the fourth
quarter of 2019, had gross receipts during the
first, second, third, or, only with respect to an
application submitted on or after January 1,
2021, fourth quarter of 2020 that demonstrate
not less than a 25 percent reduction from the
gross receipts of the entity during the fourth
quarter of 2019; or
(DD) if the entity was not in business
during 2019, but was in operation on February 15, 2020, had gross receipts during the
second, third, or, only with respect to an application submitted on or after January 1,
2021, fourth quarter of 2020 that demonstrate
not less than a 25 percent reduction from the
gross receipts of the entity during the first
quarter of 2020;
(II) includes a business concern or organization made eligible for a loan under paragraph (36)
under subclause (II), (III), or (IV) of clause (iii),
subclause (IV) or (V) of clause (iv), clause (vii), or
clause (ix) of subparagraph (D) of paragraph (36)
and that meets the requirements described in
items (aa) and (bb) of subclause (I); and
(III) does not include—
(aa) any entity that is a type of business
concern (or would be, if such entity were a
business concern) described in section 120.110
of title 13, Code of Federal Regulations (or in
any successor regulation or other related
guidance or rule that may be issued by the
Administrator) other than a business concern
described in subsection (a) or (k) of such section; or
(bb) any business concern or entity primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political
strategy or otherwise describes itself as a
think tank in any public documents;
(cc) any business concern or entity—
(AA) for which an entity created in or
organized under the laws of the People’s
Republic of China or the Special Administrative Region of Hong Kong, or that has
significant operations in the People’s Republic of China or the Special Administrative Region of Hong Kong, owns or
holds, directly or indirectly, not less than
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20 percent of the economic interest of the
business concern or entity, including as
equity shares or a capital or profit interest in a limited liability company or partnership; or
(BB) that retains, as a member of the
board of directors of the business concern,
a person who is a resident of the People’s
Republic of China;
(dd) any person required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (22
U.S.C. 612); or
(ee) an eligible person or entity (as defined under section 24 of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act) that receives a grant under such
section 24; and
(v) the term ‘‘Tribal business concern’’ means a
Tribal business concern described in section
31(b)(2)(C).
(B) LOANS.—Except as otherwise provided in this
paragraph, the Administrator may guarantee covered
loans to eligible entities under the same terms, conditions,
and processes as a loan made under paragraph (36).
(C) MAXIMUM LOAN AMOUNT.—
(i) IN GENERAL.—Except as otherwise provided in
this subparagraph, the maximum amount of a covered
loan made to an eligible entity is the lesser of—
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity,
the average total monthly payment for payroll
costs incurred or paid by the eligible entity
during—
(AA) the 1-year period before the date
on which the loan is made; or
(BB) calendar year 2019; by
(bb) 2.5; or
(II) $2,000,000.
(ii)
SEASONAL
EMPLOYERS.—The
maximum
amount of a covered loan made to an eligible entity
that is a seasonal employer is the lesser of—
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity,
the average total monthly payments for payroll costs incurred or paid by the eligible entity for any 12-week period between February
15, 2019 and February 15, 2020; by
(bb) 2.5; or
(II) $2,000,000.
(iii) NEW ENTITIES.—The maximum amount of a
covered loan made to an eligible entity that did not
exist during the 1-year period preceding February 15,
2020 is the lesser of—
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(I) the product obtained by multiplying—
(aa) the quotient obtained by dividing—
(AA) the sum of the total monthly
payments by the eligible entity for payroll
costs paid or incurred by the eligible entity as of the date on which the eligible entity applies for the covered loan; by
(BB) the number of months in which
those payroll costs were paid or incurred;
by
(bb) 2.5; or
(II) $2,000,000.
(iv) NAICS 72 ENTITIES.—The maximum amount
of a covered loan made to an eligible entity that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal is
the lesser of—
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity,
the average total monthly payment for payroll
costs incurred or paid by the eligible entity
during—
(AA) the 1-year period before the date
on which the loan is made; or
(BB) calendar year 2019; by
(bb) 3.5; or
(II) $2,000,000.
(D) BUSINESS CONCERNS WITH MORE THAN 1 PHYSICAL
LOCATION.—
(i) IN GENERAL.—For a business concern with
more than 1 physical location, the business concern
shall be an eligible entity if the business concern
would be eligible for a loan under paragraph (36) pursuant to clause (iii) of subparagraph (D) of such paragraph, as applied in accordance with clause (ii) of this
subparagraph, and meets the revenue reduction requirements described in item (bb) of subparagraph
(A)(iv)(I).
(ii) SIZE LIMIT.—For purposes of applying clause
(i), the Administrator shall substitute ‘‘not more than
300 employees’’ for ‘‘not more than 500 employees’’ in
paragraph (36)(D)(iii).
(E) WAIVER OF AFFILIATION RULES.—
(i) IN GENERAL.—The waiver described in paragraph (36)(D)(iv) shall apply for purposes of determining eligibility under this paragraph.
(ii) SIZE LIMIT.—For purposes of applying clause
(i), the Administrator shall substitute ‘‘not more than
300 employees’’ for ‘‘not more than 500 employees’’ in
subclause (I) and (IV) of paragraph (36)(D)(iv).
(F) LOAN NUMBER LIMITATION.—An eligible entity may
only receive 1 covered loan.
(G) EXCEPTION FROM CERTAIN CERTIFICATION REQUIREMENTS.—An eligible entity applying for a covered loan
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shall not be required to make the certification described in
clause (iii) or (iv) of paragraph (36)(G).
(H) FEE WAIVER.—With respect to a covered loan—
(i) in lieu of the fee otherwise applicable under
paragraph (23)(A), the Administrator shall collect no
fee; and
(ii) in lieu of the fee otherwise applicable under
paragraph (18)(A), the Administrator shall collect no
fee.
(I) GROSS RECEIPTS AND SIMPLIFIED CERTIFICATION OF
REVENUE TEST.—
(i) LOANS OF UP TO $150,000.—For a covered loan of
not more than $150,000, the eligible entity—
(I) may submit a certification attesting that
the eligible entity meets the applicable revenue
loss
requirement
under
subparagraph
(A)(iv)(I)(bb); and
(II) if the eligible entity submits a certification under subclause (I), shall, on or before the
date on which the eligible entity submits an application for forgiveness under subparagraph (J),
produce adequate documentation that the eligible
entity met such revenue loss standard.
(ii) FOR NONPROFIT AND VETERANS ORGANIZATIONS.—For purposes of calculating gross receipts
under subparagraph (A)(iv)(I)(bb) for an eligible entity
that is a nonprofit organization, a veterans organization, or an organization described in subparagraph
(A)(iv)(II), gross receipts means gross receipts within
the meaning of section 6033 of the Internal Revenue
Code of 1986.
(J) LOAN FORGIVENESS.—
(i) DEFINITION OF COVERED PERIOD.—In this subparagraph, the term ‘‘covered period’’ has the meaning
given that term in section 7A(a).
(ii) FORGIVENESS GENERALLY.—Except as otherwise provided in this subparagraph, an eligible entity
shall be eligible for forgiveness of indebtedness on a
covered loan in the same manner as an eligible recipient with respect to a loan made under paragraph (36)
of this section, as described in section 7A.
(iii) FORGIVENESS AMOUNT.—An eligible entity
shall be eligible for forgiveness of indebtedness on a
covered loan in an amount equal to the sum of the following costs incurred or expenditures made during the
covered period:
(I) Payroll costs, excluding any payroll costs
that are—
(aa) qualified wages, as defined in subsection (c)(3) of section 2301 of the CARES
Act (26 U.S.C. 3111 note), taken into account
in determining the credit allowed under such
section;
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(bb) qualified wages taken into account in
determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Relief Act of
2020; or
(cc) premiums taken into account in determining the credit allowed under section
6432 of the Internal Revenue Code of 1986.
(II) Any payment of interest on any covered
mortgage obligation (which shall not include any
prepayment of or payment of principal on a covered mortgage obligation).
(III) Any covered operations expenditure.
(IV) Any covered property damage cost.
(V) Any payment on any covered rent obligation.
(VI) Any covered utility payment.
(VII) Any covered supplier cost.
(VIII) Any covered worker protection expenditure.
(iv) LIMITATION ON FORGIVENESS FOR ALL ELIGIBLE
ENTITIES.—Subject to any reductions under section
7A(d), the forgiveness amount under this subparagraph shall be equal to the lesser of—
(I) the amount described in clause (ii); and
(II) the amount equal to the quotient obtained
by dividing—
(aa) the amount of the covered loan used
for payroll costs during the covered period;
and
(bb) 0.60.
(v) SUBMISSION OF MATERIALS FOR FORGIVENESS.—
For purposes of applying subsection (l)(1) of section 7A
to a covered loan of not more than $150,000 under this
paragraph, an eligible entity may be required to provide, at the time of the application for forgiveness, documentation required to substantiate revenue loss in
accordance with subparagraph (I).
(K) LENDER ELIGIBILITY.—Except as otherwise provided in this paragraph, a lender approved to make loans
under paragraph (36) may make covered loans under the
same terms and conditions as in paragraph (36).
(L) REIMBURSEMENT FOR LOAN PROCESSING AND SERVICING.—The Administrator shall reimburse a lender authorized to make a covered loan—
(i) for a covered loan of not more than $50,000, in
an amount equal to the lesser of—
(I) 50 percent of the balance of the financing
outstanding at the time of disbursement of the
covered loan; or
(II) $2,500;
(ii) at a rate, based on the balance of the financing
outstanding at the time of disbursement of the covered
loan, of—
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(I) 5 percent for a covered loan of more than
$50,000 and not more than $350,000; and
(II) 3 percent for a covered loan of more than
$350,000.
(M) PUBLICATION OF GUIDANCE.—Not later than 10
days after the date of enactment of this paragraph, the Administrator shall issue guidance addressing barriers to accessing capital for minority, underserved, veteran, and
women-owned business concerns for the purpose of ensuring equitable access to covered loans.
(N) STANDARD OPERATING PROCEDURE.—The Administrator shall, to the maximum extent practicable, allow a
lender approved to make covered loans to use existing program guidance and standard operating procedures for
loans made under this subsection.
(O) SUPPLEMENTAL COVERED LOANS.—A covered loan
under this paragraph may only be made to an eligible entity that—
(i) has received a loan under paragraph (36); and
(ii) on or before the expected date on which the
covered loan under this paragraph is disbursed to the
eligible entity, has used, or will use, the full amount
of the loan received under paragraph (36).
(P) FRAUD ENFORCEMENT HARMONIZATION.—Notwithstanding any other provision of law, any criminal charge
or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed
under this paragraph shall be filed not later than 10 years
after the offense was committed.
(b) Except as to agricultural enterprises as defined in section
18(b)(1) of this Act, the Administration also is empowered to the
extent and in such amounts as provided in advance in appropriation Acts—
(1)(A) to make such loans (either directly or in cooperation
with banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis) as
the Administration may determine to be necessary or appropriate to repair, rehabilitate or replace property, real or personal, damaged or destroyed by or as a result of natural or
other disasters: Provided, That such damage or destruction is
not compensated for by insurance or otherwise: And provided
further, That the Administration may increase the amount of
the loan by up to an additional 20 per centum of the aggregate
costs of such damage or destruction (whether or not compensated for by insurance or otherwise) if it determines such
increase to be necessary or appropriate in order to protect the
damaged or destroyed property from possible future disasters
by taking mitigating measures, including—
(i) construction of retaining walls and sea walls;
(ii) grading and contouring land; and
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lar storm shelter is constructed in accordance with applicable standards issued by the Federal Emergency Management Agency;
(B) to refinance any mortgage or other lien against a totally destroyed or substantially damaged home or business concern: Provided, That no loan or guarantee shall be extended
unless the Administration finds that (i) the applicant is not
able to obtain credit elsewhere; (ii) such property is to be repaired, rehabilitated, or replaced; (iii) the amount refinanced
shall not exceed the amount of physical loss sustained; and (iv)
such amount shall be reduced to the extent such mortgage or
lien is satisfied by insurance or otherwise; and
(C) during fiscal years 2000 through 2004, to establish a
predisaster mitigation program to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or
deferred (guaranteed) basis), as the Administrator may determine to be necessary or appropriate, to enable small businesses to use mitigation techniques in support of a formal mitigation program established by the Federal Emergency Management Agency, except that no loan or guarantee may be extended to a small business under this subparagraph unless the
Administration finds that the small business is otherwise unable to obtain credit for the purposes described in this subparagraph;
(2) to make such loans (either directly or in cooperation
with banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis) as
the Administration may determine to be necessary or appropriate to any small business concern, private nonprofit organization, or small agricultural cooperative located in an area affected by a disaster, 26 (including drought), with respect to both
farm-related and nonfarm-related small business concerns, if
the Administration determines that the concern, the organization, or the cooperative has suffered a substantial economic injury as a result of such disaster and if such disaster constitutes—
(A) a major disaster, as determined by the President
under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.);
(B) a natural disaster, as determined by the Secretary
of Agriculture pursuant to section 321 of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1961), in
which case, assistance under this paragraph may be provided to farm-related and nonfarm-related small business
concerns, subject to the other applicable requirements of
this paragraph;
(C) a disaster, as determined by the Administrator of
the Small Business Administration;
(D) an emergency involving Federal primary responsibility determined to exist by the President under the sec26 So

in law. The comma before ‘‘(including drought)’’ probably should not appear.

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tion 501(b) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5191(b)); or
(E) if no disaster or emergency declaration has been
issued pursuant to subparagraph (A), (B), (C), or (D), the
Governor of a State in which a disaster or emergency has
occurred may certify to the Small Business Administration
that small business concerns, private nonprofit organizations, or small agricultural cooperatives (1) have suffered
economic injury as a result of such disaster or emergency,
and (2) are in need of financial assistance which is not
available on reasonable terms in the disaster- or emergency-stricken area. Not later than 30 days after the date
of receipt of such certification by a Governor of a State, the
Administration shall respond in writing to that Governor
on its determination and the reasons therefore, and may
then make such loans as would have been available under
this paragraph if a disaster or emergency 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: Provided
further, That for purposes of subparagraph (D), the Administrator shall deem that such an emergency affects each State or
subdivision thereof (including counties), and that each State or
subdivision has sufficient economic damage to small business
concerns to qualify for assistance under this paragraph and the
Administrator shall accept applications for such assistance immediately.
(3)(A) In this paragraph—
(i) the term ‘‘active service’’ has the meaning given
that term in section 101(d)(3) of title 10, United States
Code;
(ii) 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;
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 perform active service for a period of
more than 30 consecutive days.
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(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 service and ending on the
date that is 1 year after the date on which such essential employee is discharged or released from active service. The Administrator may, when appropriate (as determined by the Administrator), extend the ending date specified in the preceding
sentence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this paragraph shall be made at the same interest rate as economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or
deferred basis, if the total amount outstanding and committed
to the borrower under this subsection would exceed $1,500,000,
unless such applicant constitutes, or have 27 become due to
changed economic circumstances, a major source of employment in its surrounding area, as determined by the Administration, in which case the Administration, in its discretion,
may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph, no
declaration of a disaster area shall be required.
(G)(i) 28 Notwithstanding any other provision of law,
the Administrator may make a loan under this paragraph
of not more than $50,000 without collateral.
(ii) The Administrator may defer payment of principal
and interest on a loan described in clause (i) during the
longer of—
(I) the 1-year period beginning on the date of the
initial disbursement of the loan; and
(II) the period during which the relevant essential
employee is on active service.
(H) 28 The Administrator shall give priority to any application for a loan under this paragraph and shall process
and make a determination regarding such applications
prior to processing or making a determination on other
loan applications under this subsection, on a rolling basis.
(4) COORDINATION WITH FEMA.—
(A) IN GENERAL.—Notwithstanding any other provision
of law, for any disaster declared under this subsection or
major disaster (including any major disaster relating to
which the Administrator declares eligibility for additional
disaster assistance under paragraph (9)), the Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, shall ensure, to the
maximum extent practicable, that all application periods
for disaster relief under this Act correspond with application deadlines established under the Robert T. Stafford
27 The

word ‘‘have’’ probably should be ‘‘has’’.
for subparagraphs (G) and (H) of paragraph (3) so in law.

28 Margins

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Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.), or as extended by the President.
(B) DEADLINES.—Notwithstanding any other provision
of law, not later than 10 days before the closing date of an
application period for a major disaster (including any
major disaster relating to which the Administrator declares eligibility for additional disaster assistance under
paragraph (9)), the Administrator, in consultation with the
Administrator of the Federal Emergency Management
Agency, shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives a report
that includes—
(i) the deadline for submitting applications for assistance under this Act relating to that major disaster;
(ii) information regarding the number of loan applications and disbursements processed by the Administrator relating to that major disaster for each day
during the period beginning on the date on which that
major disaster was declared and ending on the date of
that report; and
(iii) an estimate of the number of potential applicants that have not submitted an application relating
to that major disaster.
(5) PUBLIC AWARENESS OF DISASTERS.—If a disaster is declared under this subsection or the Administrator declares eligibility for additional disaster assistance under paragraph (9),
the Administrator shall make every effort to communicate
through radio, television, print, and web-based outlets, all relevant information needed by disaster loan applicants, including—
(A) the date of such declaration;
(B) cities and towns within the area of such declaration;
(C) loan application deadlines related to such disaster;
(D) all relevant contact information for victim services
available through the Administration (including links to
small business development center websites);
(E) links to relevant Federal and State disaster assistance websites, including links to websites providing information regarding assistance available from the Federal
Emergency Management Agency;
(F) information on eligibility criteria for Administration loan programs, including where such applications can
be found; and
(G) application materials that clearly state the function of the Administration as the Federal source of disaster
loans for homeowners and renters.
(6) AUTHORITY FOR QUALIFIED PRIVATE CONTRACTORS.—
(A) DISASTER LOAN PROCESSING.—The Administrator
may enter into an agreement with a qualified private contractor, as determined by the Administrator, to process
loans under this subsection in the event of a major disaster (including any major disaster relating to which the
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Administrator declares eligibility for additional disaster
assistance under paragraph (9)), under which the Administrator shall pay the contractor a fee for each loan processed.
(B) LOAN LOSS VERIFICATION SERVICES.—The Administrator may enter into an agreement with a qualified lender
or loss verification professional, as determined by the Administrator, to verify losses for loans under this subsection
in the event of a major disaster (including any major disaster relating to which the Administrator declares eligibility for additional disaster assistance under paragraph
(9)), under which the Administrator shall pay the lender or
verification professional a fee for each loan for which such
lender or verification professional verifies losses.
(7) DISASTER ASSISTANCE EMPLOYEES.—
(A) IN GENERAL.—In carrying out this section, the Administrator may, where practicable, ensure that the number of full-time equivalent employees—
(i) in the Office of the Disaster Assistance is not
fewer than 800; and
(ii) in the Disaster Cadre of the Administration is
not fewer than 1,000.
(B) REPORT.—In carrying out this subsection, if the
number of full-time employees for either the Office of Disaster Assistance or the Disaster Cadre of the Administration is below the level described in subparagraph (A) for
that office, not later than 21 days after the date on which
that staffing level decreased below the level described in
subparagraph (A), the Administrator shall submit to the
Committee on Appropriations and the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Appropriations and Committee on Small
Business of the House of Representatives, a report—
(i) detailing staffing levels on that date;
(ii) requesting, if practicable and determined appropriate by the Administrator, additional funds for
additional employees; and
(iii) containing such additional information, as determined appropriate by the Administrator.
(8) INCREASED LOAN CAPS.—
(A) AGGREGATE LOAN AMOUNTS.—Except as provided
in subparagraph (B), and notwithstanding any other provision of law, the aggregate loan amount outstanding and
committed to a borrower under this subsection may not exceed $2,000,000.
(B) WAIVER AUTHORITY.—The Administrator may, at
the discretion of the Administrator, increase the aggregate
loan amount under subparagraph (A) for loans relating to
a disaster to a level established by the Administrator,
based on appropriate economic indicators for the region in
which that disaster occurred.
(9) DECLARATION OF ELIGIBILITY FOR ADDITIONAL DISASTER
ASSISTANCE.—
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(A) IN GENERAL.—If the President declares a major
disaster, the Administrator may declare eligibility for additional disaster assistance in accordance with this paragraph.
(B) THRESHOLD.—A major disaster for which the Administrator declares eligibility for additional disaster assistance under this paragraph shall—
(i) have resulted in extraordinary levels of casualties or damage or disruption severely affecting the
population (including mass evacuations), infrastructure, environment, economy, national morale, or government functions in an area;
(ii) be comparable to the description of a catastrophic incident in the National Response Plan of the
Administration, or any successor thereto, unless there
is no successor to such plan, in which case this clause
shall have no force or effect; and
(iii) be of such size and scope that—
(I) the disaster assistance programs under the
other paragraphs under this subsection are incapable of providing adequate and timely assistance to individuals or business concerns located
within the disaster area; or
(II) a significant number of business concerns
outside the disaster area have suffered disasterrelated substantial economic injury as a result of
the incident.
(C) ADDITIONAL ECONOMIC INJURY DISASTER LOAN ASSISTANCE.—
(i) IN GENERAL.—If the Administrator declares eligibility for additional disaster assistance under this
paragraph, the Administrator may make such loans
under this subparagraph (either directly or in cooperation with banks or other lending institutions through
agreements to participate on an immediate or deferred
basis) as the Administrator determines appropriate to
eligible small business concerns located anywhere in
the United States.
(ii) PROCESSING TIME.—
(I) IN GENERAL.—If the Administrator determines that the average processing time for applications for disaster loans under this subparagraph
relating to a specific major disaster is more than
15 days, the Administrator shall give priority to
the processing of such applications submitted by
eligible small business concerns located inside the
disaster area, until the Administrator determines
that the average processing time for such applications is not more than 15 days.
(II) SUSPENSION OF APPLICATIONS FROM OUTSIDE DISASTER AREA.—If the Administrator determines that the average processing time for applications for disaster loans under this subparagraph
relating to a specific major disaster is more than
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30 days, the Administrator shall suspend the processing of such applications submitted by eligible
small business concerns located outside the disaster area, until the Administrator determines
that the average processing time for such applications is not more than 15 days.
(iii) LOAN TERMS.—A loan under this subparagraph shall be made on the same terms as a loan
under paragraph (2).
(D) DEFINITIONS.—In this paragraph—
(i) the term ‘‘disaster area’’ means the area for
which the applicable major disaster was declared;
(ii) the term ‘‘disaster-related substantial economic injury’’ means economic harm to a business concern that results in the inability of the business concern to—
(I) meet its obligations as it matures;
(II) meet its ordinary and necessary operating
expenses; or
(III) market, produce, or provide a product or
service ordinarily marketed, produced, or provided
by the business concern because the business concern relies on materials from the disaster area or
sells or markets in the disaster area; and
(iii) the term ‘‘eligible small business concern’’
means a small business concern—
(I) that has suffered disaster-related substantial economic injury as a result of the applicable
major disaster; and
(II)(aa) for which not less than 25 percent of
the market share of that small business concern is
from business transacted in the disaster area;
(bb) for which not less than 25 percent of an
input into a production process of that small business concern is from the disaster area; or
(cc) that relies on a provider located in the
disaster area for a service that is not readily
available elsewhere.
(10) REDUCING CLOSING AND DISBURSEMENT DELAYS.—The
Administrator shall provide a clear and concise notification on
all application materials for loans made under this subsection
and on relevant websites notifying an applicant that the applicant may submit all documentation necessary for the approval
of the loan at the time of application and that failure to submit
all documentation could delay the approval and disbursement
of the loan.
(11) INCREASING TRANSPARENCY IN LOAN APPROVALS.—The
Administrator shall establish and implement clear, written
policies and procedures for analyzing the ability of a loan applicant to repay a loan made under this subsection.
(12) ADDITIONAL AWARDS TO SMALL BUSINESS DEVELOPMENT CENTERS, WOMEN’S BUSINESS CENTERS, AND SCORE FOR
DISASTER RECOVERY.—
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(A) IN GENERAL.—The Administration may provide financial assistance to a small business development center,
a women’s business center described in section 29, the
Service Corps of Retired Executives, or any proposed consortium of such individuals or entities to spur disaster recovery and growth of small business concerns located in an
area for which the President has declared a major disaster.
(B) FORM OF FINANCIAL ASSISTANCE.—Financial assistance provided under this paragraph shall be in the form
of a grant, contract, or cooperative agreement.
(C) NO MATCHING FUNDS REQUIRED.—Matching funds
shall not be required for any grant, contract, or cooperative
agreement under this paragraph.
(D) REQUIREMENTS.—A recipient of financial assistance under this paragraph shall provide counseling, training, and other related services, such as promoting longterm resiliency, to small business concerns and entrepreneurs impacted by a major disaster.
(E) PERFORMANCE.—
(i) IN GENERAL.—The Administrator, in cooperation with the recipients of financial assistance under
this paragraph, shall establish metrics and goals for
performance of grants, contracts, and cooperative
agreements under this paragraph, which shall include
recovery of sales, recovery of employment, reestablishment of business premises, and establishment of new
small business concerns.
(ii) USE OF ESTIMATES.—The Administrator shall
base the goals and metrics for performance established
under clause (i), in part, on the estimates of disaster
impact prepared by the Office of Disaster Assistance
for purposes of estimating loan-making requirements.
(F) TERM.—
(i) IN GENERAL.—The term of any grant, contract,
or cooperative agreement under this paragraph shall
be for not more than 2 years.
(ii) EXTENSION.—The Administrator may make 1
extension of a grant, contract, or cooperative agreement under this paragraph for a period of not more
than 1 year, upon a showing of good cause and need
for the extension.
(G) EXEMPTION FROM OTHER PROGRAM REQUIREMENTS.—Financial assistance provided under this paragraph is in addition to, and wholly separate from, any
other form of assistance provided by the Administrator
under this Act.
(H) COMPETITIVE BASIS.—The Administration shall
award financial assistance under this paragraph on a competitive basis.
(13) SUPPLEMENTAL ASSISTANCE FOR CONTRACTOR MALFEASANCE.—
(A) IN GENERAL.—If a contractor or other person engages in malfeasance in connection with repairs to, rehabilitation of, or replacement of real or personal property reFebruary 1, 2024

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lating to which a loan was made under this subsection and
the malfeasance results in substantial economic damage to
the recipient of the loan or substantial risks to health or
safety, upon receiving documentation of the substantial
economic damage or the substantial risk to health and
safety from an independent loss verifier, and subject to
subparagraph (B), the Administrator may increase the
amount of the loan under this subsection, as necessary for
the cost of repairs, rehabilitation, or replacement needed
to address the cause of the economic damage or health or
safety risk.
(B) REQUIREMENTS.—The Administrator may only increase the amount of a loan under subparagraph (A) upon
receiving an appropriate certification from the borrower
and person performing the mitigation attesting to the reasonableness of the mitigation costs and an assignment of
any proceeds received from the person engaging in the
malfeasance. The assignment of proceeds recovered from
the person engaging in the malfeasance shall be equal to
the amount of the loan under this section. Any mitigation
activities shall be subject to audit and independent
verification of completeness and cost reasonableness.
(14) BUSINESS RECOVERY CENTERS.—
(A) IN GENERAL.—The Administrator, acting through
the district offices of the Administration, shall identify locations that may be used as recovery centers by the Administration in the event of a disaster declared under this
subsection or a major disaster.
(B) REQUIREMENTS FOR IDENTIFICATION.—Each district
office of the Administration shall—
(i) identify a location described in subparagraph
(A) in each county, parish, or similar unit of general
local government in the area served by the district office; and
(ii) ensure that the locations identified under subparagraph (A) may be used as a recovery center without cost to the Government, to the extent practicable.
(15) INCREASED OVERSIGHT OF ECONOMIC INJURY DISASTER
LOANS.—The Administrator shall increase oversight of entities
receiving loans under paragraph (2), and may consider—
(A) scheduled site visits to ensure borrower eligibility
and compliance with requirements established by the Administrator; and
(B) reviews of the use of the loan proceeds by an entity
described in paragraph (2) to ensure compliance with requirements established by the Administrator.
(16) 29 DISASTER DECLARATION IN RURAL AREAS.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘rural area’’ means any county or
other political subdivision of a State, the District of
Columbia, or a territory or possession of the United
29 There

are two paragraphs (16)s’ in law.

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States that is designated as a rural area by the Bureau of the Census; and
(ii) the term ‘‘significant damage’’ means, with respect to property, uninsured losses of not less than 40
percent of the estimated fair replacement value or predisaster fair market value of the damaged property,
whichever is lower.
(B) DISASTER DECLARATION.—For the purpose of making loans under paragraph (1) or (2), the Administrator
may declare a disaster in a rural area for which a major
disaster was declared by the President under section 401
of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170) and for which individual
assistance was not authorized under section 408 of such
Act (42 U.S.C. 5174) if—
(i) the Governor of the State or the Chief Executive of the Indian tribal government in which the rural
area is located requests such a declaration; and
(ii) any home, small business concern, private
nonprofit organization, or small agricultural cooperative has incurred significant damage in the rural area.
(C) SBA REPORT.—Not later than 120 days after the
date of enactment of this paragraph, and every year thereafter, the Administrator shall submit to the Committee on
Small Business and Entrepreneurship of the Senate and
the Committee on Small Business of the House of Representatives a report on, with respect to the 1-year period
preceding submission of the report—
(i) any economic injury that resulted from a major
disaster declared by the President under section 401 of
the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170) in a rural area;
(ii) each request for assistance made by the Governor of a State or the Chief Executive of an Indian
tribal government under subparagraph (B)(i) and the
response of the Administrator, including the timeline
for each response; and
(iii) any regulatory changes that will impact the
ability of communities in rural areas to obtain disaster
assistance under this subsection.
(16) 29 STATUTE OF LIMITATIONS.—Notwithstanding any
other provision of law, any criminal charge or civil enforcement
action alleging that a borrower engaged in fraud with respect
to a loan made under this subsection in response to COVID–
19 during the covered period (as defined in section 1110(a) of
the CARES Act) shall be filed not later than 10 years after the
offense was committed.
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,
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(B) the loan was made to enable (i) such homeowner to repair or
replace his home, or (ii) such concern to repair or replace plant or
equipment which was damaged or destroyed as the result of a disaster meeting the requirements of clause (A) or (B) of paragraph
(2) of this subsection, and (C) the Administrator determines such
action is necessary to avoid severe financial hardship: Provided further, That the provisions of paragraph (1) of subsection (d) of this
section shall not be applicable to any such loan having a maturity
in excess of twenty years. Notwithstanding any other provision of
law, and except as provided in subsection (d), the interest rate on
the Administration’s share of any loan made under subsection (b),
shall not exceed the average annual interest rate on all interestbearing obligations of the United States then forming a part of the
public debt as computed at the end of the fiscal year next preceding
the date of the loan and adjusted to the nearest one-eight of 1 per
centum plus one-quarter of 1 per centum: Provided, however, That
the interest rate for loans made under paragraphs (1) and (2) hereof shall not exceed the rate of interest which is in effect at the time
of the occurrence of the disaster. In agreements to participate in
loans on a deferred basis under this subsection, such participation
by the Administration shall not be in excess of 90 per centum of
the balance of the loan outstanding at the time of disbursement.
Notwithstanding any other provision of law, the interest rate on
the Administration’s share of any loan made pursuant to paragraph (1) of this subsection to repair or replace a primary residence
and/or replace or repair damaged or destroyed personal property,
less the amount of compensation by insurance or otherwise, with
respect to a disaster occurring on or after July 1, 1976, and prior
to October 1, 1978, shall be: 1 per centum on the amount of such
loan not exceeding $10,000, and 3 per centum on the amount of
such loan over $10,000 but not exceeding $40,000. The interest rate
on the Administration’s share of the first $250,000 of all other
loans made pursuant to paragraph (1) of this subsection, with respect to a disaster occurring on or after July 1, 1976, and prior to
October 1, 1978, shall be 3 per centum. All repayments of principal
on the Administration’s share of any loan made under the above
provisions shall first be applied to reduce the principal sum of such
loan which bears interest at the lower rates provided in this paragraph. The principal amount of any loan made pursuant to paragraph (1) in connection with a disaster which occurs on or after
April 1, 1977, but prior to January 1, 1978, may be increased by
such amount, but not more than $2,000, as the Administration determines to be reasonable in light of the amount and nature of loss,
damage, or injury sustained in order to finance the installation of
insulation in the property which was lost, damaged, or injured, if
the uninsured, damaged portion of the property is 10 per centum
or more of the market value of the property at the time of the disaster. No later than June 1, 1978, the Administration shall prepare
and transmit to the Select Committee on Small Business of the
Senate, the Committee on Small Business of the House of Representatives, and the Committee of the Senate and House of Representatives having jurisdiction over measures relating to energy
conservation, a report on its activities under this paragraph, including therein an evaluation of the effect of such activities on enFebruary 1, 2024

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couraging the installation of insulation in property which is repaired or replaced after a disaster which is subject to this paragraph, and its recommendations with respect to the continuation,
modification, or termination of such activities.
In the administration of the disaster loan program under paragraphs (1) and (2) of this subsection, in the case of property loss
or damage or injury resulting from a major disaster as determined
by the President or a disaster as determined by the Administrator
which occurs on or after January 1, 1971, and prior to July 1, 1973,
the Small Business Administration, to the extent such loss or damage or injury is not compensated for by insurance or otherwise—
(A) may make any loan for repair, rehabilitation, or replacement of property damaged or destroyed without regard to
whether the required financial assistance is otherwise available from private sources;
(B) may, in the case of the total destruction or substantial
property damage of a home or business concern, refinance any
mortgage or other liens outstanding against the destroyed or
damaged property if such project is to be repaired, rehabilitated, or replaced, except that (1) in the case of a business concern, the amount refinanced shall not exceed the amount of the
physical loss sustained, and (2) in the case of a home, the
amount of each monthly payment of principal and interest on
the loan after refinancing under this clause shall be not less
than the amount of each such payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A) or
a mortgage or other lien refinanced under clause (B) in connection with the destruction of, or substantial damage to, property
owned and used as a residence by an individual who by reason
of retirement, disability, or other similar circumstances relies
for support on survivor, disability, or retirement benefits under
a pension, insurance, or other program, consent to the suspension of the payments of the principal of that loan, mortgage,
or lien during the lifetime of that individual and his souse for
so long as the Administration determines that making such
payments would constitute a substantial hardship;
(D) shall, notwithstanding the provisions of any other law
and upon presentation by the applicant of proof of loss or damage or injury and a bona fide estimate of cost of repair, rehabilitation, or replacement, cancel the principal of any loan
made to cover a loss or damage or injury resulting from such
disaster, except that—
(i) with respect to a loan made in connection with a
disaster occurring on or after January 1, 1971 but prior to
January 1, 1972, the total amount so canceled shall not exceed $2,500, and the interest on the balance of the loan
shall be at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in connection with a
disaster occurring on or after January 1, 1972 but prior to
July 1, 1973, the total amount so canceled shall not exceed
$5,000, and the interest on the balance of the loan shall
be at a rate of 1 per centum per annum.
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With respect to any loan referred to in clause (D) which is outstanding on the date of enactment of this paragraph, the Administrator shall—
(i) make sure change in the interest rate on the balance
of such loan as is required under that clause effective as of
such date of enactment; and
(ii) in applying the limitation set forth in that clause with
respect to the total amount of such loan which may be canceled, consider as part of the amount so canceled any part of
such loan which was previously canceled pursuant to section
231 of the Disaster Relief Act of 1970.
Whoever wrongfully misapplies the proceeds of a loan obtained
under this subsection shall be civilly liable to the Administrator in
an amount equal to one-and-one-half times the original principal
amount of the loan.
(E) A State grant made on or prior to July 1, 1979, shall
not be considered compensation for the purpose of applying the
provisions of section 312(a) of the Disaster Relief and Emergency Assistance Act 30 to a disaster loan under paragraph (1)
(2) 31of this subsection.
(c) PRIVATE DISASTER LOANS.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘disaster area’’ means any area for which
the President declared a major disaster relating to which
the Administrator declares eligibility for additional disaster assistance under subsection (b)(9), during the period
of that major disaster declaration;
(B) the term ‘‘eligible individual’’ means an individual
who is eligible for disaster assistance under subsection
(b)(1) relating to a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9);
(C) the term ‘‘eligible small business concern’’ means
a business concern that is—
(i) a small business concern, as defined under this
Act; or
(ii) a small business concern, as defined in section
103 of the Small Business Investment Act of 1958;
(D) the term ‘‘preferred lender’’ means a lender participating in the Preferred Lender Program;
(E) the term ‘‘Preferred Lender Program’’ has the
meaning given that term in subsection (a)(2)(C)(ii); and
(F) the term ‘‘qualified private lender’’ means any privately-owned bank or other lending institution that—
(i) is not a preferred lender; and
(ii) the Administrator determines meets the criteria established under paragraph (10).
30 Section 109(d) of the Disaster Relief and Emergency Assistance Amendments of 1988, Public
Law 100–707, 102 Stat. 4708, amended this paragraph by striking out ‘‘section 302(a) of the
Disaster Relief Act of 1974’’ and inserting in lieu thereof ‘‘sections 402 and 502 of the Disaster
Relief and Emergency Assistance Act’’. Reference to ‘‘Disaster Relief and Emergency Assistance
Act’’ was so in original. In light of sec. 102(a) Public Law 100–707, probably should read ‘‘Robert
T. Stafford Disaster Relief and Emergency Assistance Act’’.
31 So in law. Section 12078(c)(2)(B) of Public Law 110–246 amends ‘‘the undesignated matter
at the end’’ at the end of subsection (b) by striking ‘‘, (2), or (4)’’ and inserting ‘‘(2)’’.

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(2) PROGRAM REQUIRED.—The Administrator shall carry
out a program, to be known as the Private Disaster Assistance
program, under which the Administration may guarantee timely payment of principal and interest, as scheduled, on any loan
made to an eligible small business concern located in a disaster
area and to an eligible individual.
(3) USE OF LOANS.—A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b).
(4) ONLINE APPLICATIONS.—
(A) ESTABLISHMENT.—The Administrator may establish, directly or through an agreement with another entity,
an online application process for loans guaranteed under
this subsection.
(B) OTHER FEDERAL ASSISTANCE.—The Administrator
may coordinate with the head of any other appropriate
Federal agency so that any application submitted through
an online application process established under this paragraph may be considered for any other Federal assistance
program for disaster relief.
(C) CONSULTATION.—In establishing an online application process under this paragraph, the Administrator shall
consult with appropriate persons from the public and private sectors, including private lenders.
(5) MAXIMUM AMOUNTS.—
(A) GUARANTEE PERCENTAGE.—The Administrator may
guarantee not more than 85 percent of a loan under this
subsection.
(B) LOAN AMOUNT.—The maximum amount of a loan
guaranteed under this subsection shall be $2,000,000.
(6) TERMS AND CONDITIONS.—A loan guaranteed under this
subsection shall be made under the same terms and conditions
as a loan under subsection (b).
(7) LENDERS.—
(A) IN GENERAL.—A loan guaranteed under this subsection made to—
(i) a qualified individual may be made by a preferred lender; and
(ii) a qualified small business concern may be
made by a qualified private lender or by a preferred
lender that also makes loans to qualified individuals.
(B) COMPLIANCE.—If the Administrator determines
that a preferred lender knowingly failed to comply with
the underwriting standards for loans guaranteed under
this subsection or violated the terms of the standard operating procedure agreement between that preferred lender
and the Administration, the Administrator shall do 1 or
more of the following:
(i) Exclude the preferred lender from participating
in the program under this subsection.
(ii) Exclude the preferred lender from participating in the Preferred Lender Program for a period
of not more than 5 years.
(8) FEES.—
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(A) IN GENERAL.—The Administrator may not collect a
guarantee fee under this subsection.
(B) ORIGINATION FEE.—The Administrator may pay a
qualified private lender or preferred lender an origination
fee for a loan guaranteed under this subsection in an
amount agreed upon in advance between the qualified private lender or preferred lender and the Administrator.
(9) DOCUMENTATION.—A qualified private lender or preferred lender may use its own loan documentation for a loan
guaranteed by the Administrator under this subsection, to the
extent authorized by the Administrator. The ability of a lender
to use its own loan documentation for a loan guaranteed under
this subsection shall not be considered part of the criteria for
becoming a qualified private lender under the regulations promulgated under paragraph (10).
(10) IMPLEMENTATION REGULATIONS.—
(A) IN GENERAL.—Not later than 1 year after the date
of enactment of the Small Business Disaster Response and
Loan Improvements Act of 2008, the Administrator shall
issue final regulations establishing permanent criteria for
qualified private lenders.
(B) REPORT TO CONGRESS.—Not later than 6 months
after the date of enactment of the Small Business Disaster
Response and Loan Improvements Act of 2008, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on
Small Business and Entrepreneurship of the Senate and
the Committee on Small Business of the House of Representatives.
(11) AUTHORIZATION OF APPROPRIATIONS.—
(A) IN GENERAL.—Amounts necessary to carry out this
subsection shall be made available from amounts appropriated to the Administration to carry out subsection (b).
(B) AUTHORITY TO REDUCE INTEREST RATES AND OTHER
TERMS AND CONDITIONS.—Funds appropriated to the Administration to carry out this subsection, may be used by
the Administrator to meet the loan terms and conditions
specified in paragraph (6).
(12) PURCHASE OF LOANS.—The Administrator may enter
into an agreement with a qualified private lender or preferred
lender to purchase any loan guaranteed under this subsection.
(d)(1) The Administration may further extend the maturity of
or renew any loan made pursuant to this section, or any loan transferred to the Administration pursuant to Reorganization Plan
Numbered 2 of 1954, or Reorganization Plan Numbered 1 of 1957,
for additional periods not to exceed ten years beyond the period
stated therein, if such extension or renewal will aid in the orderly
liquidation of such loan.
(2) 32 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 participa32 So

in law. Section 7(c)(2) and (3) indentations probably should be moved two ems to left.

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tion in such loan, purchase such participation, or assume the
obligation of the borrower, for the balance of such period, to
make principal and interest payments on the non-Federal
share of such loan: Provided, That no such payments shall be
made by the Administrator in behalf of any borrower unless (i)
the Administrator determines that such action is necessary in
order to avoid a default, and (ii) the borrower agrees to make
payments to the Administration in an agreegate amount equal
to the amount paid in its behalf by the Administrator, in such
manner and at such time (during or after the term of the loan)
as the Administrator shall determine having due regard to the
purposes sought to be achieved by this paragraph.
(3) With respect to a disaster occurring on or after October
1, 1978, and prior the 33 effective date of this Act, on the Administration’s share of loans made pursuant to paragraph (1)
of subsection (b)—
(A) 34 if the loan proceeds are to repair or replace
a primary residence and/or repair or replace damaged
or destroyed personal property, the interest rate shall
be 3 percent on the first $55,000 of such loan;
(B) 34 if the loan proceeds are to repair or replace
property damaged or destroyed and if the applicant is
a business concern which is unable to obtain sufficient
credit elsewhere, the interest rate shall be as determined by the Administration, but not in excess of 5
percent per annum; and
(C) if the loan proceeds are to repair or replace property damaged or destroyed and if the applicant is a business concern which is able to obtain sufficient credit elsewhere, the interest rate shall not exceed the current average market yield on outstanding marketable obligations of
the United States with remaining periods to maturity comparable to the average maturities of such loans and adjusted to the nearest one-eight of 1 percent, and an additional amount as determined by the Administration, but
not to exceed 1 percent: Provided, That three years after
such loan is fully disbursed and every two years thereafter
for the term of the loan, if the Administration determines
that the borrower is able to obtain a loan from one-Federal
sources 35 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 Ad33 So

in original. Probably should be preceded by ‘‘to’’.
(A) and (B) of section 7(c)(3) should be moved 4 ems to the left.
in original. Should be ‘‘source’’.

34 Subparagraphs
35 So

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ministration, in its discretion, may waive the $500,000
limitation.
(4) Notwithstanding the provisions of any other law, the
interest rate on the Federal share of any loan made under subsection (b) shall be—
(A) in the case of a homeowner unable to secure credit
elsewhere, the rate prescribed by the Administration but
not more than one-half the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans
plus an additional charge of not to exceed 1 per centum
per annum as determined by the Administrator, and adjusted to the nearest one-eight of 1 per centum but not to
exceed 8 per centum per annum;
(B) in the case of a homeowner able to secure credit
elsewhere, the rate prescribed by the Administration but
not more than the rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities of such loans plus an additional charge of not to exceed 1 per centum per annum
as determined by the Administrator, and adjusted to the
nearest one-eighth of 1 per centum;
(C) in the case of a business concern unable to obtain
credit elsewhere, not to exceed 8 per centum per annum;
(D) in the case of a business concern able to obtain
credit elsewhere, the rate prescribed by the Administration
but not in excess of the rate prevailing in private market
for similar loans and not more than the rate prescribed by
the Administration as the maximum interest rate for deferred participation (guaranteed) loans under section 7(a)
of this Act. Loans under this subparagraph shall be limited to a maximum term of three years.
(5) 36 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;
36 So

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(B) in the case of a homeowner, able to secure credit
elsewhere, the rate prescribed by the Administration but
not more than the rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities of such loans plus an additional charge of not to exceed 1 per centum per annum
as determined by the Administrator, and adjusted to the
nearest one-eighth of 1 per centum, but not to exceed 8 per
centum per annum;
(C) in the case of a business, private nonprofit organization, or other concern, including agricultural cooperatives, unable to obtain credit elsewhere, not to exceed 4
per centum per annum;
(D) in the case of a business concern able to obtain
credit elsewhere, the rate prescribed by the Administration
but not in excess of the lowest of (i) the rate prevailing in
the private market for similar loans, (ii) the rate prescribed by the Administration as the maximum interest
rate for deferred participation (guaranteed) loans under
section 7(a) of this Act, or (iii) 8 per centum per annum.
Loans under this subparagraph shall be limited to a maximum term of 7 years.
(6) 37 Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by subparagraphs (A) and (B) of paragraph 7(b)(1), shall be in amounts
equal to 100 per centum of loss. The interest rate for loans
made under paragraphs 7(b)(1) and (2), as determined pursuant to paragraph (5), shall be the rate of interest which is in
effect on the date of the disaster commenced: Provided, That
no loan under paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or
deferred (guaranteed) basis, if the total amount outstanding
and committed to the borrower under subsection 7(b) would exceed $500,000 for each disaster unless an applicant constitutes
a major source of employment in an area suffering a disaster,
in which case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the Administration, subject to the reductions required by subparagraphs
(A) and (B) of paragraph 7(b)(1), shall not reduce the amount
of eligibility for any homeowner on account of loss of real estate to less than $100,000 for each disaster nor for any homeowner or lessee on account of loss of personal property to less
than $20,000 for each disaster, such sums being in addition to
any eligible refinancing: Provided further, That the Administration shall not require collateral for loans of $14,000 or less
(or such higher amount as the Administrator determines appropriate in the event of a major disaster) which are made
under paragraph (1) of subsection (b): Provided further, That
the Administrator, in obtaining the best available collateral for
37 The

margin for subsection (c)(6) is so in law.

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a loan of not more than $200,000 under paragraph (1) or (2)
of subsection (b) relating to damage to or destruction of the
property of, or economic injury to, a small business concern,
shall not require the owner of the small business concern to
use the primary residence of the owner as collateral if the Administrator determines that the owner has other assets of
equal quality and with a value equal to or greater than the
amount of the loan that could be used as collateral for the
loan: Provided further, That nothing in the preceding proviso
may be construed to reduce the amount of collateral required
by the Administrator in connection with a loan described in the
preceding proviso or to modify the standards used to evaluate
the quality (rather than the type) of such collateral. Employees
of concerns sharing a common business premises shall be aggregated in determining ‘‘major source of employment’’ status
for nonprofit applicants owning such premises.
With respect to any loan which is outstanding on the date of enactment of this paragraph and which was made on account of a disaster commencing on or after October 1, 1982, the Administrator
shall made such change in the interest rate on the balance of such
loan as is required herein effective as of the date of enactment.
(7) The Administration shall not withhold disaster assistance
pursuant to this paragraph to nurseries who are victims of drought
disasters. As used in section 7(b)(2) the term ‘‘an area affected by
a disaster’’ includes any county, or county contiguous thereto, determined to be a disaster by the President, the Secretary of Agriculture or the Administrator of the Small Business Administration.
(8) DISASTER LOANS FOR SUPERSTORM SANDY.—
(A) IN GENERAL.—Notwithstanding any other provision
of law, and subject to the same requirements and procedures that are used to make loans pursuant to subsection
(b), a small business concern, homeowner, nonprofit entity,
or renter that was located within an area and during the
time period with respect to which a major disaster was declared by the President under section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5170) by reason of Superstorm Sandy may apply to
the Administrator—
(i) for a loan to repair, rehabilitate, or replace
property damaged or destroyed by reason of
Superstorm Sandy; or
(ii) if such a small business concern has suffered
substantial economic injury by reason of Superstorm
Sandy, for a loan to assist such a small business concern.
(B) TIMING.—The Administrator shall select loan recipients and make available loans for a period of not less
than 1 year after the date on which the Administrator carries out this authority.
(C) INSPECTOR GENERAL REVIEW.—Not later than 6
months after the date on which the Administrator begins
carrying out this authority, the Inspector General of the
Administration shall initiate a review of the controls for
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ensuring applicant eligibility for loans made under this
paragraph.
(e) The Administration shall not fund any Small Business Development Center or any variation thereof, except as authorized in
section 21 of this Act.
(f) 38 ADDITIONAL REQUIREMENTS FOR 7(b) LOANS.—
(1) INCREASED DEFERMENT AUTHORIZED.—
(A) IN GENERAL.—In making loans under subsection
(b), the Administrator may provide, to the person receiving
the loan, an option to defer repayment on the loan.
(B) PERIOD.—The period of a deferment under subparagraph (A) may not exceed 4 years.
(g) 39 NET EARNINGS CLAUSES PROHIBITED FOR 7(b) LOANS.—In
making loans under subsection (b), the Administrator shall not require the borrower to pay any non-amortized amount for the first
five years after repayment begins.
(e) [RESERVED]. 40
(f) [RESERVED]. 40
(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 participa38 So

in law. No paragraph (2) was enacted into law by section 12068(a)(2) of Public Law 110–

246.
39 Placement

of (g) so in law. Section 12070 of Public Law 110-246 inerted subsection (g) following subsection (f) as added by section 12068(a)(2) of such Public Law.
40 So in law. Section 7 has two subsections designated as subsections (e) and (f). See section
107(b) and (c) of division D of title I of Public Law 104–208, 110 Stat. 3009.

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tion may total 100 per centum of the balance of the loan at the
time of disbursement. The Administration’s share of any loan made
under this subsection shall bear interest at the rate of 3 per 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
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lated, and the results of such evaluation together with recommendations shall be included in the report required by section
10(a) of this Act.
(5) Loans made pursuant to this subsection (including immediate participation in and guarantees of such loans) shall have such
terms and conditions as the Administration shall determine, subject to the following limitations—
(A) there is reasonable assurance of repayment of the loan;
(B) the financial assistance is not otherwise available on
reasonable terms from private sources or other Federal, State,
or local programs;
(C) the amount of the loan, together with other funds
available, is adequate to assure completion of the project or
achievement of the purposes for which the loan is made;
(D) the loan bears interest at a rate not less than (i) a rate
determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding Treasury
obligations of comparable maturity, plus (ii) such additional
charge, if any, toward covering other costs of the program as
the Administration may determine to be consistent with its
purposes: Provided, however, That the rate of interest charged
on loans made in redevelopment areas designated under the
Public Works and Economic Development Act of 1965 (42
U.S.C. 3108 et seq.) shall not exceed the rate currently applicable to new loans made under section 201 of that Act (42 U.S.C.
3142); and
(E) fees not in excess of amounts necessary to cover administrative expenses and probable losses may be required on loan
guarantees.
(6) The Administration shall take such steps as may be necessary to insure that, in any fiscal year, at least 50 per centum of
the amounts loaned or guaranteed pursuant to this subsection are
allotted to small business concerns located in urban areas identified by the Administration as having high concentrations of unemployed or low-income individuals or to small business concerns
owned by low-income individuals. The Administration shall define
the meaning of low income as it applies to owners of small business
concerns eligible to be assisted under this subsection.
(7) No financial assistance shall be extended pursuant to this
subsection when the Administration determines that the assistance
will be used in relocating establishments from one area to another
if such relocation would result in an increase in unemployment in
the area of original location.
(j)(1) the Administration shall provide financial assistance to
public or private organizations to pay all or part of the cost of
projects designated to provide technical or management assistance
to individuals or enterprises eligible for assistance under sections
7(i), 7(j)(10), and 8(a) of this Act, with special attention to small
businesses located in areas of high concentration of unemployed or
low-income individuals, to small businesses eligible to receive contracts pursuant to section 8(a) of this Act.
(2) Financial assistance under this subsection may be provided
for projects, including, but not limited to—
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(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) 41, and 8(a)
of this Act;
(D) the establishment and strengthening of business service agencies, including trade associations and cooperative; and
(E) the furnishing of business counseling, management
training, and legal and other related services, with special emphasis on the development of management training programs
using the resources of the business community, including the
development of management training opportunities in existing
business, and with emphasis in all cases upon providing management training of sufficient scope and duration to develop
entrepreneurial and managerial self-sufficiency on the part of
the individuals served.
(3) The Administration shall encourage the placement of subcontracts by businesses with small business concerns located in
area of high concentration of unemployed or low-income individuals, with small businesses owned by low-income individuals, and
with small businesses eligible to receive contracts pursuant to section 8(a) of this Act. The Administration may provide incentives
and assistance to such businesses that will aid in the training and
upgrading of potential subcontractors or other small business concerns eligible for assistance under section 7(i), 7(j), and 8(a), of this
Act.
(4) The Administration shall give preference to projects which
promote the ownership, participation in ownership, or management
of small businesses owned by low-income individuals and small
businesses eligible to receive contracts pursuant to section 8(a) of
this Act.
(5) The financial assistance authorized for projects under this
subsection includes assistance advanced by grant, agreement, or
contract.
(6) The Administration is authorized to make payments under
grants and contracts entered into under this subsection in lump
sum or installments, and in advance or by way of reimbursement,
and in the case of grants, with necessary adjustments on account
of overpayments or underpayments.
(7) To the extent feasible, services under this subsection shall
be provided in a location which is easily accessible to the individuals and small business concerns served.
øParagraph (8) of section 7(j) repealed by Public Law 101–
574.¿
(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 Govern41 So

in law. Probably should be ‘‘7(j)(10)’’ (Public Law 95–507, section 204, 92 Stat. 1963).

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ment or with programs aided with Federal funds are placed in such
way as to further the purposes of sections 7(i), 7(j), and 8(a) of this
Act.
(10) There is established with the Administration a small 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) 42 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). 43
(ii) provide for such other nonfinancial services as
deemed necessary for the establishment, preservation, and
growth of small business concerns participating in the Program, including but not limited to (I) loan packaging, (II)
financing counseling, (III) accounting and bookkeeping assistance, (IV) marketing assistance, and (V) management
assistance;
(iii) assist small business concerns participating in the
Program to obtain equity and debt financing;
(iv) establish regular performance monitoring and reporting systems for small business concerns participating
in the Program to assure compliance with their business
plans;
(v) analyze and report the causes of success and failure of small business concerns participating in the Program; and
(vi) provide assistance necessary to help small business concerns participating in the Program to procure surety bonds, with such assistance including, but not limited
to, (I) the preparation of application forms required to receive a surety bond, (II) special management and technical
assistance designed to meet the specific needs of small
business concerns participating in the Program and which
have received or are applying to receive a surety bond, and
(III) guarantee from the Administration pursuant to title
IV, part B of the Small Business Investment Act of 1958.
(B) Small business concerns eligible to receive contracts
pursuant to section 8(a) of this Act shall participate in the Program.
(C)(i) A small business concern participating in any program or activity conducted under the authority of this para42 So
43 So

in law. Section 7(j)(10)(A)(i) indentions probably should be moved two ems to left.
in original. The period should probably be a semicolon.

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graph 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) 44 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
44 So

in law. All of section 7(j)(10)(D)(i) indentions probably should be moved two ems to left.

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Participant’s plan during the first year of the transitional stage of Program participation).
(V) Estimates of contract awards pursuant to section 8(a) and from other sources, which the Program
Participant will require to meet the specific targets,
objectives, and goals for the years covered by its plan.
The estimates established shall be consistent with the
provisions of subparagraph (I) and section 8(a).
(iii) Each Program Participant shall annually review
its currently approved plan with its Business Opportunity
Specialist and modify such plan as may be appropriate.
Any modified plan shall be submitted to the Administration for approval. The currently approved plan shall be
considered valid until such time as a modified plan is approved by the Business Opportunity Specialist. Annual reviews pertaining to years in the transitional stage of program participation shall require, as appropriate, a written
verification that such Program Participant has complied
with the requirements of subparagraph (I) relating to attaining business activity from sources other than contracts
awarded pursuant to section 8(a).
(iv) Each Program Participant shall annually forecast
its needs for contract awards under section 8(a) for the
next program year and the succeeding program year during the review of its business plan, conducted pursuant to
clause (iii). Such forecast shall be known as the section
8(a) contract support level and shall be included in the
Program Participant’s business plan. Such forecast shall
include—
(I) the aggregate dollar value of contract support
to be sought on a noncompetitive basis under section
8(a), reflecting compliance with the requirements of
subparagraph (I) relating to attaining business activity from sources other than contracts awarded pursuant to section 8(a),
(II) the types of contract opportunities being
sought, identified by Standard Industrial Classification (SIC) Code or otherwise,
(III) an estimate of the dollar value of contract
support to be sought on a competitive basis, and
(IV) such other information as may be requested
by the Business Opportunity Specialist to provide effective business development assistance to the Program Participant.
(E) A small business concern participating in the program
conducted under the authority of this paragraph and eligible
for the award of contracts pursuant to section 8(a) shall be denied all such assistance if such concern—
(i) voluntarily elects not to continue participation;
(ii) completes the period of Program participation as
prescribed by paragraph (15);
(iii) is terminated pursuant to a termination proceeding conducted in accordance with section 8(a)(9); or
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(iv) is graduated pursuant to a graduation proceeding
conducted in accordance with section 8(a)(9).
(F) For the purposes of section and 8(a), the terms ‘‘terminated’’ or ‘‘termination’’ means the total denial or suspension
of assistance under this paragraph or under section 8(a) prior
to the graduation of the participating small business concern
or prior to the expiration of the maximum program participation in term. An action for termination shall be based upon
good cause, including—
(i) the failure by such concern to maintain its eligibility for Program participation;
(ii) the failure of the concern to engage in business
practices that will promote its competitiveness within a
reasonable period of time as evidenced by, among other indicators, a pattern of unjustified delinquent performance
or terminations for default with respect to contracts
awarded under the authority of section 8(a);
(iii) a demonstrated pattern of failing to make required submissions or responses to the Administration in
a timely manner;
(iv) the willful violation of any rule or regulation of the
Administration pertaining to material issues;
(v) the debarment of the concern or its disadvantaged
owners by any agency pursuant to subpart 9.4 of title 48,
Code of Federal Regulations (or any successor regulation);
or
(vi) the conviction of the disadvantaged owner or an
officer of the concern for any offense indicating a lack of
business integrity including any conviction for embezzlement, theft, forgery, bribery, falsification or violation of
section 16. For purposes of this clause, no termination action shall be taken with respect to a disadvantaged owner
solely because of the conviction of an officer of the concern
(who is other than a disadvantaged owner) unless such
owner conspired with, abetted, or otherwise knowingly acquiesced in the activity or omission that was the basis of
such officer’s conviction.
(G) The Director of the Division may initiate a termination
proceeding by recommending such action to the Associate Administrator for Minority Small Business and Capital Ownership Development. Whenever the Associate Administrator, or a
designee of such officer, determines such termination is appropriate, within 15 days after making such a determination the
Program Participant shall be provided a written notice of intent to terminate, specifying the reasons for such action. No
Program Participant shall be terminated from the Program
pursuant to subparagraph (F) without first being afforded an
opportunity for a hearing in accordance with section 8(a)(9).
(H) For the purposes of sections 7(j) and 8(a) the term
‘‘graduated’’ or ‘‘graduation’’ means that the Program Participant is recognized as successfully completing the program by
substantially achieving the targets, objectives, and goals contained in the concern’s business plan thereby demonstrating its
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ability to compete in the marketplace without assistance under
this section or section 8(a).
(I)(i) During the developmental stage of its participation in
the Program, a Program Participant shall take all reasonable
efforts within its control to attain the targets contained in its
business plan for contracts awarded other than pursuant to
section 8(a) (hereinafter referred to as ‘‘business activity targets.’’). Such efforts shall be made a part of the business plan
and shall be sufficient in scope and duration to satisfy the Administration that the Program Participant will engage a reasonable marketing strategy that will maximize its potential to
achieve its business activity targets.
(ii) During the transitional stage of the Program a Program Participant shall be subject to regulations regarding
business activity targets that are promulgated by the Administration pursuant to clause (iii);
(iii) The regulations referred to in clause (ii) shall:
(I) establish business activity targets applicable to
Program Participants during the fifth year and each succeeding year of Program Participation; such targets, for
such period of time, shall reflect a reasonably consistent
increase in contracts awarded other than pursuant to section 8(a), expressed as a percentage of total sales; when
promulgating business activity targets the Administration
may establish modified targets for Program Participants
that have participated in the Program for a period of
longer than four years on the effective date of this subparagraph;
(II) require a Program Participant to attain its business activity targets;
(III) provide that, before the receipt of any contract to
be awarded pursuant to section 8(a), the Program Participant (if it is in the transitional stage) must certify that it
has complied with the regulations promulgated pursuant
to subclause (II), or that it is in compliance with such remedial measures as may have been ordered pursuant to
regulations issued under subclause (V);
(IV) require the Administration to review each Program Participant’s performance regarding attainment of
business activity targets during periodic reviews of such
Participant’s business plan; and
(V) authorize the Administration to take appropriate
remedial measures with respect to a Program Participant
that has failed to attain a required business activity target
for the purpose of reducing such Participant’s dependence
on contracts awarded pursuant to section 8(a); such remedial actions may include, but are not limited to assisting
the Program Participant to expand the dollar volume of its
competitive business activity or limiting the dollar volume
of contracts awarded to the Program Participant pursuant
to section 8(a); except for actions that would constitute a
termination, remedial measures taken pursuant to this
subclause shall not be reviewable pursuant to section
8(a)(9).
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(J)(i) The Administration shall conduct an evaluation of a
Program Participant’s eligibility for continued participation in
the Program whenever it receives specific and credible information alleging that such Program Participant no longer meets
the requirements for Program eligibility. Upon making a finding that a Program Participant is no longer eligible, the Administration shall initiate a termination proceeding in accordance with subparagraph (F). A Program Participant’s eligibility
for award of any contract under the authority of section 8(a)
may be suspended pursuant to subpart 9.4 of title 48, Code of
Federal Regulations (or any successor regulation).
(ii)(I) Except as authorized by subclauses (II) or (III), no
award shall be made pursuant to section 8(a) to a concern
other than a small business concern.
(II) In determining the size of a small business concern
owned by a socially and economically disadvantaged Indian
tribe (or a wholly owned business entity of such tribe), each
firm’s size shall be independently determined without regard
to its affiliation with the tribe, any entity of the tribal government, or any other business enterprise owned by the tribe, unless the Administrator determines that one or more such tribally owned business concerns have obtained, or are likely to obtain, a substantial unfair competitive advantage within an industry category.
(III) Any joint venture established under the authority of
section 602(b) of Public Law 100–656, the ‘‘Business Opportunity Development Reform Act of 1988’’, shall be eligible for
award of a contract pursuant to section 8(a).
(11)(A) The Associate Administrator for Minority Small Business and Capital Ownership Development shall be responsible for
coordinating and formulating policies relating to Federal assistance
to small business concerns eligible for assistance under section 7(i)
of this Act and small business concerns eligible to receive contracts
pursuant to section 8(a) of this Act.
(B)(i) 45 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
45 So

in law. All of section 7(b)(11)(B) indentions probably should be moved two ems to left.

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(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) 46 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
46 So

in law. All of section 7(j)(11)(F)(vi) indentions probably should be moved two ems to left.

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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) 47 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
47 So

in law. All of section 7(j)(11)(H) indentions probably should be moved two ems to left.

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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: 48
(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
48 So

in original. Probably should be ‘‘(12)’’.

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due to such persons by the procuring agency or through
any bank the deposits of which are insured by the Federal
Deposit Insurance Corporation; and
(iii) the contract to which it pertains does not exceed
$3,000,000 in amount. This subparagraph shall cease to be
effective on October 1, 1994.
(E) Financial assistance whereby the Administration may
purchase in whole or in part, and on behalf of such concerns,
skills training or upgrading for employees or potential employees of such concerns. Such assistance may be made without regard to section 18(a). Assistance may be made by direct payment to the training provider or by reimbursing the Program
Participant or the Participant’s employee, if such reimbursement is found to be reasonable and appropriate. For purposes
of this subparagraph the term ‘‘training provider’’ shall mean
an institution of higher education, a community or vocational
college, or an institution eligible to provide skills training or
upgrading under title I of the Workforce Innovation and Opportunity Act. The Administration shall, in consultation with
the Secretary of Labor, promulgate rules and regulations to implement this subparagraph that establish acceptable training
and upgrading performance standards and provide for such
monitoring or audit requirements as may be necessary to ensure the integrity of the training effort. No financial assistance
shall be granted under the subparagraph unless the Administrator determines that—
(i) such concern has documented that it has first explored the use of existing cost-free or cost-subsidized training programs offered by public and private sector agencies
working with programs of employment and training and
economic development;
(ii) no more than five employees or potential employees of such concern are recipients of any benefits under
this subparagraph at any one time;
(iii) no more than $2,500 shall be made available for
any one employee or potential employee;
(iv) the length of training or upgrading financed by
this subparagraph shall be no less than one month nor
more than six months;
(v) such concern has given adequate assurance it will
employ the trainee or upgraded employee for at least six
months after the training or upgrading financed by this
subparagraph has been completed and each trainee or upgraded employee has provided a similar assurance to remain within the employ of such concern for such period; if
such concern, trainee, or upgraded employee breaches this
agreement, the Administration shall be entitled to and
shall make diligent efforts to obtain from the violating
party the repayment of all funds expended on behalf of the
violating party, such repayment shall be made to the Administration together with such interest and costs of collection as may be reasonable; the violating party shall be
barred from receiving any further assistance under this
subparagraph;
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(vi) the training to be financed may take place either
at such concern’s facilities or at those of the training provider; and
(vii) such concern will maintain such records as the
Administration deems appropriate to ensure that the provisions of this paragraph and any other applicable law
have not been violated.
(F)(i) The transfer of technology or surplus property owned
by the United States to such a concern. Activities designed to
effect such transfer shall be developed in cooperation with the
heads of Federal agencies and shall include the transfer by
grant, license, or sale of such technology or property to such a
concern. Such property may be transferred to Program Participants on a priority basis. Technology or property transferred
under this subparagraph shall be used by the concern during
the normal conduct of its business operation and shall not be
sold or transferred to any other party (other than the Government) during such concern’s term of participation in the Program and for one year thereafter.
(ii)(I) In this clause—
(aa) the term ‘‘covered period’’ means the 2-year
period beginning on the date on which the President
declared the applicable major disaster; and
(bb) the term ‘‘disaster area’’ means the area for
which the President has declared a major disaster,
during the covered period.
(II) The Administrator may transfer technology or surplus property under clause (i) on a priority basis to a small
business concern located in a disaster area if—
(aa) the small business concern meets the requirements for such a transfer, without regard to whether
the small business concern is a Program Participant;
and
(bb) for a small business concern that is a Program Participant, on and after the date on which the
President declared the applicable major disaster, the
small business concern has not received property
under this subparagraph on the basis of the status of
the small business concern as a Program Participant.
(III) For any transfer of property under this clause to
a small business concern, the terms and conditions shall
be the same as a transfer to a Program Participant, except
that the small business concern shall agree not to sell or
transfer the property to any party other than the Federal
Government during the covered period.
(IV) A small business concern that receives a transfer
of property under this clause may not receive a transfer of
property under clause (i) during the covered period.
(V) If a small business concern sells or transfers property in violation of the agreement described in subclause
(III), the Administrator may initiate proceedings to prohibit the small business concern from receiving a transfer
of property under this clause or clause (i), in addition to
any other remedy available to the Administrator.
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(iii)(I) In this clause, the term ‘‘covered period’’means—
(aa) 49 in the case of a Puerto Rico business, the
period beginning on August 13, 2018, and ending on
the date on which the Oversight Board established
under section 2121 of title 48 terminates; and
(bb) in the case of a covered territory business, the
period beginning on the date of the enactment of this
item and ending on the date that is 4 years after such
date of enactment.
(II) The Administrator may transfer technology or surplus
property under clause (i) to a Puerto Rico business or a covered
territory business if either such business meets the requirements for such a transfer, without regard to whether either
such business is a Program Participant.
(G) Training assistance whereby the Administration shall
conduct training sessions to assist individuals and enterprises
eligible to receive contracts under section 8(a) in the development of business principles and strategies to enhance their
ability to successfully compete for contracts in the marketplace.
(H) Joint ventures, leader-follower arrangements, and
teaming agreements between the Program Participant and
other Program Participants and other business concerns with
respect to contracting opportunities for the research, development, full-scale engineering or production of major systems.
Such activities shall be undertaken on the basis of programs
developed by the agency responsible for the procurement of the
major system, with the assistance of the Administration.
(I) Transitional management business planning training
and technical assistance.
(J) Program Participants in the developmental stage of
Program participation shall be eligible for the assistance provided by subparagraphs (A), (B), (C), (D), (E), (F), and (G).
(14) Program Participants in the transitional stage of Program
participation shall be eligible for the assistance provided by subparagraphs (A), (B), (F), (G), (H), and (I) of paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small
business concern may receive developmental assistance under the
Program and contracts under section 8(a) for a total period of not
longer than nine years, measured from the date of its certification
under the authority of such section, of which—
(A) no more than four years may be spent in the developmental stage of Program Participation; and
(B) no more than five years may be spent in the transitional stage of Program Participation.
(16)(A) The Administrator shall develop and implement a process for the systematic collection of data on the operations of the
Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator
shall submit a report to the Congress on the Program that shall
include the following:
49 Margins for items (aa) and (bb) are so in law. See amendment made by section 866(b)(1)
of Public Law 116–283.

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(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.
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(C) The first report required by subparagraph (B) shall pertain
to fiscal year 1990.
(k) In carrying out its functions under subsections 7(i), 7(j),
and 8(a) of this Act, the Administration is authorized—
(1) to utilize, with their consent, the services and facilities
of Federal agencies without reimbursement, and, with the consent of any State or political subdivision of a State, accept and
utilize the services and facilities of such State or subdivision
without reimbursement;
(2) to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this Act,
any money or property, real, personal, or mixed, tangible, or
intangible, received by gift, device, bequest, or otherwise;
(3) to accept voluntary and uncompensated services, notwithstanding the provisions of section 3679(b) of the Revised
Statutes (31 U.S.C. 655(b)); and
(4) to employ experts and consultants or organizations
thereof as authorized by section 15 of the Administrative Expenses Act of 1946 (5 U.S.C. 55a), except that no individual
may be employed under the authority of this subsection for
more than one hundred days in any fiscal year; to compensate
individuals so employed at rates not in excess of the daily
equivalent of the highest rate payable under section 5332 of
title 5, United States Code, including traveltime; and to allow
them, while away from their homes or regular places of business, travel expenses (including per diem in lieu of subsistence)
a authorized by section 5 of such Act (5 U.S.C. 73b–2) for persons in the Government service employed intermittently, while
so employed: Provided, however, That contracts for such employment may be renewed annually.
(l) SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘eligible intermediary’’—
(i) means a private, nonprofit entity that—
(I) seeks or has been awarded a loan from the
Administrator to make loans to small business
concerns under this subsection; and
(II) has not less than 1 year of experience
making loans to startup, newly established, or
growing small business concerns; and
(ii) includes—
(I) a private, nonprofit community development corporation;
(II) a consortium of private, nonprofit organizations or nonprofit community development corporations; and
(III) an agency of or nonprofit entity established by a Native American Tribal Government;
and
(B) the term ‘‘Program’’ means the small business
intermediary lending pilot program established under
paragraph (2).
(2) ESTABLISHMENT.—There is established a 3-year small
business intermediary lending pilot program, under which the
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Administrator may make direct loans to eligible intermediaries, for the purpose of making loans to startup, newly
established, and growing small business concerns.
(3) PURPOSES.—The purposes of the Program are—
(A) to assist small business concerns in areas suffering
from a lack of credit due to poor economic conditions or
changes in the financial market; and
(B) to establish a loan program under which the Administrator may provide loans to eligible intermediaries to
enable the eligible intermediaries to provide loans to startup, newly established, and growing small business concerns for working capital, real estate, or the acquisition of
materials, supplies, or equipment.
(4) LOANS TO ELIGIBLE INTERMEDIARIES.—
(A) APPLICATION.—Each eligible intermediary desiring
a loan under this subsection shall submit an application to
the Administrator that describes—
(i) the type of small business concerns to be assisted;
(ii) the size and range of loans to be made;
(iii) the interest rate and terms of loans to be
made;
(iv) the geographic area to be served and the economic, poverty, and unemployment characteristics of
the area;
(v) the status of small business concerns in the
area to be served and an analysis of the availability of
credit; and
(vi) the qualifications of the applicant to carry out
this subsection.
(B) LOAN LIMITS.—No loan may be made to an eligible
intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the
Administrator would, as a result of such loan, exceed
$1,000,000 during the participation of the eligible intermediary in the Program.
(C) LOAN DURATION.—Loans made by the Administrator under this subsection shall be for a term of 20
years.
(D) APPLICABLE INTEREST RATES.—Loans made by the
Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 percent.
(E) FEES; COLLATERAL.—The Administrator may not
charge any fees or require collateral with respect to any
loan made to an eligible intermediary under this subsection.
(F) DELAYED PAYMENTS.—The Administrator shall not
require the repayment of principal or interest on a loan
made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial
disbursement of funds under that loan.
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(G) MAXIMUM PARTICIPANTS AND AMOUNTS.—During
each of fiscal years 2011, 2012, and 2013, the Administrator may make loans under the Program—
(i) to not more than 20 eligible intermediaries;
and
(ii) in a total amount of not more than
$20,000,000.
(5) LOANS TO SMALL BUSINESS CONCERNS.—
(A) IN GENERAL.—The Administrator, through an eligible intermediary, shall make loans to startup, newly established, and growing small business concerns for working
capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.
(B) MAXIMUM LOAN.—An eligible intermediary may
not make a loan under this subsection of more than
$200,000 to any 1 small business concern.
(C) APPLICABLE INTEREST RATES.—A loan made by an
eligible intermediary to a small business concern under
this subsection, may have a fixed or a variable interest
rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection.
(D) REVIEW RESTRICTIONS.—The Administrator may
not review individual loans made by an eligible intermediary to a small business concern before approval of the
loan by the eligible intermediary.
(6) TERMINATION.—The authority of the Administrator to
make loans under the Program shall terminate 3 years after
the date of enactment of the Small Business Job Creation and
Access to Capital Act of 2010.
(m) MICROLOAN PROGRAM.—
(1)(A) PURPOSES.—The purposes of the Microloan Program
are—
(i) to assist women, low-income, veteran (within the
meaning of such term under section 3(q)), and minority entrepreneurs and business owners and other individuals
possessing the capability to operate successful business
concerns;
(ii) to assist small business concerns in those areas
suffering from a lack of credit due to economic downturns;
(iii) to establish a microloan program to be administered by the Small Business Administration—
(I) to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans,
particularly loans in amounts averaging not more than
$10,000, to startup, newly established, or growing
small business concerns for working capital or the acquisition of materials, supplies, or equipment;
(II) to make grants to eligible intermediaries that,
together with non-Federal matching funds, will enable
such intermediaries to provide intensive marketing,
management, and technical assistance to microloan
borrowers;
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(III) to make grants to eligible nonprofit entities
that, together with non-Federal matching funds, will
enable such entities to provide intensive marketing,
management, and technical assistance to assist low-income entrepreneurs and other low-income individuals
obtain private sector financing for their businesses,
with or without loan guarantees; and
(IV) to report to the Committees on Small Business of the Senate and the House of Representatives
on the effectiveness of the microloan program and the
advisability and feasibility of implementing such a
program nationwide; and
(iv) to establish a welfare-to-work microloan initiative,
which shall be administered by the Administration, in
order to test the feasibility of supplementing the technical
assistance grants provided under clauses (ii) and (iii) of
subparagraph (B) to individuals who are receiving assistance under the State program funded under part A of title
IV of the Social Security Act (42 U.S.C. 601 et seq.), or
under any comparable State funded means tested program
of assistance for low-income individuals, in order to adequately assist those individuals in—
(I) establishing small businesses; and
(II) eliminating their dependence on that assistance.
(B) ESTABLISHMENT.—There is established a microloan
program, under which the Administration may—
(i) make direct loans to eligible intermediaries, as provided under paragraph (3), for the purpose of making
short-term, fixed interest rate microloans to startup, newly
established, and growing small business concerns under
paragraph (6);
(ii) in conjunction with such loans and subject to the
requirements of paragraph (4), make grants to such intermediaries for the purpose of providing intensive marketing, management, and technical assistance to small
business concerns that are borrowers under this subsection; and
(iii) subject to the requirements of paragraph (5),
make grants to nonprofit entities for the purpose of providing marketing, management, and technical assistance
to low-income individuals seeking to start or enlarge their
own businesses, if such assistance includes working with
the grant recipient to secure loans in amounts not to exceed $50,000 from private sector lending institutions, with
or without a loan guarantee from the nonprofit entity.
(2) ELIGIBILITY FOR PARTICIPATION.—An intermediary shall
be eligible to receive loans and grants under subparagraphs
(B)(i) and (B)(ii) of paragraph (1) if it—
(A) meets the definition in paragraph (10); and
(B) has at least 1 year of experience making
microloans to startup, newly established, or growing small
business concerns and providing, as an integral part of its
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microloan program, intensive marketing, management,
and technical assistance to its borrowers.
(3) LOANS TO INTERMEDIARIES.—
(A) INTERMEDIARY APPLICATIONS.—(i) IN GENERAL.—As
part of its application for a loan, each intermediary shall
submit a description to the Administration of—
(I) the type of businesses to be assisted;
(II) the size and range of loans to be made;
(III) the geographic area to be served and its economic, proverty, and unemployment characteristics;
(IV) the status of small business concerns in the
area to be served and an analysis of their credit and
technical assistance needs;
(V) any marketing, management, and technical assistance to be provided in connection with a loan made
under this subsection;
(VI) the local economic credit markets, including
the costs associated with obtaining credit locally;
(VII) the qualifications of the applicant to carry
out the purpose of this subsection; and
(VIII) any plan to involve other technical assistance providers (such as counselors from the Service
Corps of Retired Executives or small business development centers) or private sector lenders in assisting selected business concerns.
(ii) SELECTION OF INTERMEDIARIES.—In selecting intermediaries to participate in the program established under
this subsection, the Administration shall give priority to
those applicants that provide loans in amounts averaging
not more than $10,000.
(B) INTERMEDIARY CONTRIBUTION.—As a condition of
any loan made to an intermediary under subparagraph
(B)(i) of paragraph (1), the Administrator shall require the
intermediary to contribute not less than 15 percent of the
loan amount in cash from non-Federal sources.
(C) LOAN LIMITS.—Notwithstanding subsection (a)(3),
no loan shall be made under this subsection if the total
amount outstanding and committed to one intermediary
(excluding outstanding grants) from the business loan and
investment fund established by this Act would, as a result
of such loan, exceed $750,000 in the first year of such
intermediary’s participation in the program, $7,000,000 (in
the aggregate) in the remaining years of the
intermediary’s participation in the program, and
$3,000,000 in any of those remaining years.
(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
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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 5year period, except that in no case shall the loan loss
reserve be reduced to less than 10 percent of the outstanding balance of the notes receivable owed to the
intermediary.
(IV) REQUIREMENTS.—The Administrator may reduce the annual loan loss reserve requirement of an
intermediary only if the intermediary demonstrates to
the satisfaction of the Administrator that—
(aa) the average annual loss rate for the
intermediary during the preceding 5-year period is
less than 15 percent; and
(bb) that no other factors exist that may impair the ability of the intermediary to repay all
obligations owed to the Administration under this
subsection.
(E) UNAVAILABILITY OF COMPARABLE CREDIT.—An
intermediary may make a loan under this subsection of
more than $20,000 to a small business concern only if such
small business concern demonstrates that it is unable to
obtain credit elsewhere at comparable interest rates and
that it has good prospects for success. In no case shall an
intermediary make a loan under this subsection of more
than $50,000, or have outstanding or committed to any 1
borrower more than $50,000.
(F) LOAN DURATION; INTEREST RATES.—
(i) LOAN DURATION.—Loans made by the Administration under this subsection shall be for a term of 10
years.
(ii) APPLICABLE INTEREST RATES.—Except as provided in clause (iii), loans made by the Administration
under this subsection to an intermediary shall bear an
interest rate equal to 1.25 percentage points below the
rate determined by the Secretary of the Treasury for
obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of
1 percent.
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(iii) RATES APPLICABLE
LOANS.—Loans made by the

122
TO

CERTAIN

SMALL

Administration to an
intermediary that makes loans to small business concerns and entrepreneurs averaging not more than
$7,500, shall bear an interest rate that is 2 percentage
points below the rate determined by the Secretary of
the Treasury for obligations of the United States with
a period of maturity of 5 years, adjusted to the nearest
one-eighth of 1 percent.
(iv) RATES APPLICABLE TO MULTIPLE SITES OR OFFICES.—The interest rate prescribed in clause (ii) or
(iii) shall apply to each separate loan-making site or
office of 1 intermediary only if such site or office meets
the requirements of that clause.
(v) RATE BASIS.—The applicable rate of interest
under this paragraph shall—
(I) be applied retroactively for the first year of
an intermediary’s participation in the program,
based upon the actual lending practices of the
intermediary as determined by the Administration
prior to the end of such year; and
(II) be based in the second and subsequent
years of an intermediary’s participation in the
program, upon the actual lending practices of the
intermediary
during
the
term
of
the
intermediary’s participation in the program.
(vii) 50 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) 51 GRANT AMOUNTS.—Except as otherwise provided
in subparagraphs (C) and (G) 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
50 So in law. Probably should be redesignated as clause (vi).
51 Section 113(a)(4)(A) of Public Law 102–366 instructed in paragraph (4)(A) of this subsection
by striking ‘‘Subject to’’ and inserting ‘‘Except as otherwise provided in subparagraph (C) and
subject to’’. Section 113(a)(4)(B) of Public Law 102–366 struck existing subparagraph (A) and
inserted a new subparagraph (A) shown above.

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assistance to small business concerns that are borrowers
under this subsection. Except as provided in subparagraphs (C) and (G), each intermediary meeting the requirements of subparagraph (B) may receive a grant of not
more than 25 percent of the total outstanding balance of
loans made to it under this subsection.
(B) CONTRIBUTION.—As a condition of a grant made
under subparagraph (A), the Administrator shall require
the intermediary to contribute an amount equal to 25 percent of the amount of the grant, obtained solely from nonFederal 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) or (G), 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 1 or more residents of an
economically distressed area; or
(II) the intermediary has a portfolio of loans
made under this subsection—
(aa) that averages not more than $10,000
during the period of the intermediary’s participation in the program; or
(bb) of which not less than 25 percent is
serving rural areas during the period of the
intermediary’s participation in the program.
(ii) PURPOSES.—A grant awarded under clause (i)
may be used to provide marketing, management, and
technical assistance to small business concerns that
are borrowers under this subsection.
(iii) CONTRIBUTION EXCEPTION.—The contribution
requirements in subparagraph (B) do not apply to
grants made under this subparagraph.
(D) ELIGIBILITY FOR MULTIPLE SITES OR OFFICES.—The
eligibility for a grant described in subparagraph (A), 52 or
(C) shall be determined separately for each loan-making
site or office of 1 intermediary.
(E) ASSISTANCE TO CERTAIN SMALL BUSINESS CONCERNS.—
(i) IN GENERAL.—Each intermediary may expend
an amount not to exceed 50 percent of the grant funds
received under paragraph (1)(B)(ii) to provide information and technical assistance to small business concerns that are prospective borrowers under this subsection.
52 So in law. The comma after ‘‘subparagraph (A)’’ in paragraph (4)(D) probably should not
appear.

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(ii) TECHNICAL ASSISTANCE.—An intermediary may
expend not more than 50 percent of the funds received
under paragraph (1)(B)(ii) to enter into third party
contracts for the provision of technical assistance.
(F) SUPPLEMENTAL GRANT.—
(i) IN GENERAL.—The Administration may accept
any funds transferred to the Administration from
other departments or agencies of the Federal Government to make grants in accordance with this subparagraph and section 202(b) of the Small Business Reauthorization Act of 1997 to participating intermediaries
and technical assistance providers under paragraph
(5), for use in accordance with clause (iii) to provide
additional technical assistance and related services to
recipients of assistance under a State program described in paragraph (1)(A)(iv) at the time they initially apply for assistance under this subparagraph.
(ii) ELIGIBLE RECIPIENTS; GRANT AMOUNTS.—In
making grants under this subparagraph, the Administration may select, from among participating intermediaries and technical assistance providers described
in clause (i), not more than 20 grantees in fiscal year
1998, not more than 25 grantees in fiscal year 1999,
and not more than 30 grantees in fiscal year 2000,
each of whom may receive a grant under this subparagraph in an amount not to exceed $200,000 per year.
(iii) USE OF GRANT AMOUNTS.—Grants under this
subparagraph—
(I) are in addition to other grants provided
under this subsection and shall not require the
contribution of matching amounts as a condition
of eligibility; and
(II) may be used by a grantee—
(aa) to pay or reimburse a portion of child
care and transportation costs of recipients of
assistance described in clause (i), to the extent such costs are not otherwise paid by
State block grants under the Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858 et seq.) or under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.);
and
(bb) for marketing, management, and
technical assistance to recipients of assistance
described in clause (i).
(iv) MEMORANDUM OF UNDERSTANDING.—Prior to
accepting any transfer of funds under clause (i) from
a department or agency of the Federal Government,
the Administration shall enter into a Memorandum of
Understanding with the department or agency, which
shall—
(I) specify the terms and conditions of the
grants under this subparagraph; and
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(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.
(G) GRANT AMOUNTS BASED ON APPROPRIATIONS.—In
any fiscal year in which the amount appropriated to make
grants under subparagraph (A) is sufficient to provide to
each intermediary that receives a loan under paragraph
(1)(B)(i) a grant of not less than 25 percent of the total outstanding balance of loans made to the intermediary under
this subsection, the Administration shall make a grant
under subparagraph (A) to each intermediary of not less
than 25 percent and not more than 30 percent of that total
outstanding balance for the intermediary.
(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 inkind 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—
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(i) in the case of a loan of more than $7,500 made
by the intermediary to a small business concern or entrepreneur by more than 7.75 percentage points; and
(ii) in the case of a loan of not more than $7,500
made by the intermediary to a small business concern
or entrepreneur by more than 8.5 percentage points.
(D) REVIEW RESTRICTION.—The Administration shall
not review individual microloans made by intermediaries
prior to approval.
(E) ESTABLISHMENT OF CHILD CARE OR TRANSPORTATION BUSINESSES.—In addition to other eligible small
businesses concerns, borrowers under any program under
this subsection may include individuals who will use the
loan proceeds to establish for-profit or nonprofit child care
establishments or businesses providing for-profit transportation services.
(7) PROGRAM FUNDING FOR MICROLOANS.—
(A) NUMBER OF PARTICIPANTS.—Under the program
authorized by this subsection, the Administration may
fund, on a competitive basis, not more than 300 intermediaries.
(B) ALLOCATION.—
(i) MINIMUM ALLOCATION.—Subject to the availability of appropriations, of the total amount of new
loan funds made available for award under this subsection in each fiscal year, the Administration shall
make available for award in each State (including the
District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, and
American Samoa) an amount equal to the sum of—
(I) the lesser of—
(aa) $800,000; or
(bb) 1⁄55 of the total amount of new loan
funds made available for award under this
subsection for that fiscal year; and
(II) any additional amount, as determined by
the Administration.
(ii) REDISTRIBUTION.—If, at the beginning of the
third quarter of a fiscal year, the Administration determines that any portion of the amount made available to carry out this subsection is unlikely to be made
available under clause (i) during that fiscal year, the
Administration may make that portion available for
award in any one or more States (including the District of Columbia, the Commonwealth of Puerto Rico,
the United States Virgin Islands, Guam, and American Samoa) without regard to clause (i).
(8) EQUITABLE DISTRIBUTION OF INTERMEDIARIES.—In approving microloan program applicants and providing funding to
intermediaries under this subsection, the Administration shall
select and provide funding to such intermediaries as will ensure appropriate availability of loans for small businesses in
all industries located throughout each State, particularly those
located in urban and in rural areas.
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(9) GRANTS FOR MANAGEMENT, MARKETING, TECHNICAL ASSISTANCE, AND RELATED SERVICES.—
(A) IN GENERAL.—The Administration may procure
technical assistance for intermediaries participating in the
Microloan Program to ensure that such intermediaries
have the knowledge, skills, and understanding of microlending practices necessary to operate successful microloan
programs.
(B) ASSISTANCE AMOUNT.—The Administration shall
transfer 7 percent of its annual appropriation for loans and
loan guarantees under this subsection to the Administration’s Salaries and Expense Account for the specific purpose of providing 1 or more technical assistance grants to
experienced microlending organizations and national and
regional nonprofit organizations that have demonstrated
experience in providing training support for microenterprise development and financing. 53 to achieve the purpose
set forth in subparagraph (A).
(C) WELFARE-TO-WORK MICROLOAN INITIATIVE.—Of
amounts made available to carry out the welfare-to-work
microloan initiative under paragraph (1)(A)(iv) in any fiscal year, the Administration may use not more than 5 percent to provide technical assistance, either directly or
through contractors, to welfare-to-work microloan initiative grantees, to ensure that, as grantees, they have the
knowledge, skills, and understanding of microlending and
welfare-to-work transition, and other related issues, to operate a successful welfare-to-work microloan initiative.
(10) REPORT TO CONGRESS.—On November 1, 1995, the Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives a report,
including the Administration’s evaluation of the effectiveness
of the first 31⁄2 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;
53 So in law. This period was inserted by section 604(2) of the Small Business Administration
Reauthorization and Amendments Act of 1994 (P.L. 103–403; 108 Stat. 4203).

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(ii) a private, nonprofit community development
corporation;
(iii) a consortium of private, nonprofit organizations or nonprofit community development corporations;
(iv) a quasi-governmental economic development
entity (such as a planning and development district),
other than a State, county, municipal government, or
any agency thereof, if—
(I) no application is received from an eligible
nonprofit organization; or
(II) the Administration determines that the
needs of a region or geographic area are not adequately served by an existing, eligible nonprofit
organization that has submitted an application; or
(v) an agency of or nonprofit entity established by
a Native American Tribal Government,
that seeks to borrow or has borrowed funds from the Administration to make microloans to small business concerns under this subsection;
(B) the term ‘‘microloan’’ means a short-term, fixed
rate loan of not more than $50,000, made by an intermediary to a startup, newly established, or growing small
business concern;
(C) the term ‘‘rural area’’ means any political subdivision or unincorporated area—
(i) in a nonmetropolitan county (as defined by the
Secretary of Agriculture) or its equivalent thereof; or
(ii) in a metropolitan county or its equivalent that
has a resident population of less than 20,000 if the
Small Business Administration has determined such
political subdivision or area to be rural. 54
(D) 54 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 pro54 The

period at the end of subparagraph (C) is so in law. Probably should be ‘‘; and’’.
Also, the amendment made by section 329(a)(1)(C)(ii) of division N of Public Law 116–260
states ‘‘by striking all after subparagraph (C) and inserting the following:’’ new subparagraph
(D). The amendment was carried out by adding such new subparagraph (D) at the end of paragraph (11) to reflect the probable intent of Congress.

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viding 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 SERVICE RESERVISTS.—
(1) DEFINITIONS.—In this subsection:
(A) ACTIVE SERVICE.—The term ‘‘active service’’ has
the meaning given that term in section 101(d)(3) of title
10, United States Code.
(B) ELIGIBLE RESERVIST.—The term ‘‘eligible reservist’’
means a member of a reserve component of the Armed
Forces ordered to perform active service for a period of
more than 30 consecutive days.
(C) 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.
(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 service; 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 service.
(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 service
and shall terminate on the date that is 180 days after the
date such eligible reservist is discharged or released from
active service.
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(C) INTEREST RATE REDUCTION DURING DEFERRAL.—
Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on
any loan qualifying for a deferral under this paragraph.
(3) DEFERRAL OF LOAN GUARANTEES AND OTHER
FINANCINGS.—The Administration shall—
(A) encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan
made with proceeds made available under that subsection,
if such loan was incurred by a small business concern that
is eligible to apply for assistance under subsection (b)(3);
and
(B) not later than 30 days after the date of the enactment of this subsection, establish guidelines to—
(i) encourage lenders and other intermediaries to
defer repayment of, or provide other relief relating to,
loan guarantees under subsection (a) and financings
under section 504 of the Small Business Investment
Act of 1958 that were incurred by small business concerns that are eligible to apply for assistance under
subsection (b)(3), and loan guarantees provided under
subsection (m) if the intermediary provides relief to a
small business concern under this paragraph; and
(ii) implement a program to provide for the deferral of repayment or other relief to any intermediary
providing relief to a small business borrower under
this paragraph.
SEC. 7A. ø15 U.S.C. 636m¿ LOAN FORGIVENESS.
(a) DEFINITIONS.—In this section—

(1) the term ‘‘covered loan’’ means a loan guaranteed under
section 7(a)(36);
(2) the term ‘‘covered mortgage obligation’’ means any indebtedness or debt instrument incurred in the ordinary course
of business that—
(A) is a liability of the borrower;
(B) is a mortgage on real or personal property; and
(C) was incurred before February 15, 2020;
(3) the term ‘‘covered operations expenditure’’ means a
payment for any business software or cloud computing service
that facilitates business operations, product or service delivery,
the processing, payment, or tracking of payroll expenses,
human resources, sales and billing functions, or accounting or
tracking of supplies, inventory, records and expenses;
(4) the term ‘‘covered period’’ means the period—
(A) beginning on the date of the origination of a covered loan; and
(B) ending on a date selected by the eligible recipient
of the covered loan that occurs during the period—
(i) beginning on the date that is 8 weeks after
such date of origination; and
(ii) ending on the date that is 24 weeks after such
date of origination;
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(5) the term ‘‘covered property damage cost’’ means a cost
related to property damage and vandalism or looting due to
public disturbances that occurred during 2020 that was not
covered by insurance or other compensation;
(6) the term ‘‘covered rent obligation’’ means rent obligated
under a leasing agreement in force before February 15, 2020;
(7) the term ‘‘covered supplier cost’’ means an expenditure
made by an entity to a supplier of goods for the supply of goods
that—
(A) are essential to the operations of the entity at the
time at which the expenditure is made; and
(B) is made pursuant to a contract, order, or purchase
order—
(i) in effect at any time before the covered period
with respect to the applicable covered loan; or
(ii) with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan;
(8) the term ‘‘covered utility payment’’ means payment for
a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020;
(9) the term ‘‘covered worker protection expenditure’’—
(A) means an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance
issued by the Department of Health and Human Services,
the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local
government, during the period beginning on March 1, 2020
and ending the date on which the national emergency declared by the President under the National Emergencies
Act (50 U.S.C. 1601 et seq.) with respect to the
Coronavirus Disease 2019 (COVID–19) expires related to
the maintenance of standards for sanitation, social
distancing, or any other worker or customer safety requirement related to COVID–19;
(B) may include—
(i) the purchase, maintenance, or renovation of assets that create or expand—
(I) a drive-through window facility;
(II) an indoor, outdoor, or combined air or air
pressure ventilation or filtration system;
(III) a physical barrier such as a sneeze
guard;
(IV) an expansion of additional indoor, outdoor, or combined business space;
(V) an onsite or offsite health screening capability; or
(VI) other assets relating to the compliance
with the requirements or guidance described in
subparagraph (A), as determined by the Administrator in consultation with the Secretary of Health
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and Human Services and the Secretary of Labor;
and
(ii) the purchase of—
(I) covered materials described in section
328.103(a) of title 44, Code of Federal Regulations,
or any successor regulation;
(II) particulate filtering facepiece respirators
approved by the National Institute for Occupational Safety and Health, including those approved only for emergency use authorization; or
(III) other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human
Services and the Secretary of Labor; and
(C) does not include residential real property or intangible property;
(10) the term ‘‘eligible recipient’’ means the recipient of a
covered loan;
(11) the term ‘‘expected forgiveness amount’’ means the
amount of principal that a lender reasonably expects a borrower to expend during the covered period on the sum of any—
(A) payroll costs;
(B) payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);
(C) payments on any covered rent obligation;
(D) covered utility payments;
(E) covered operations expenditures;
(F) covered property damage costs;
(G) covered supplier costs; and
(H) covered worker protection expenditures; and
(12) the terms ‘‘payroll costs’’ and ‘‘seasonal employer’’
have the meanings given those terms in section 7(a)(36). Such
payroll costs shall not include qualified wages taken into account in determining the credit allowed under section 2301 of
the CARES Act, qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section
303 of the Taxpayer Certainty and Disaster Relief Act of 2020.
Such payroll costs shall not include qualified wages taken into
account in determining the credit allowed under subsection (a)
or (d) of section 303 of the Taxpayer Certainty and Disaster
Tax Relief Act of 2020, or premiums taken into account in determining the credit allowed under section 6432 of the Internal
Revenue Code of 1986.
(b) FORGIVENESS.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to
the sum of the following costs incurred and payments made during
the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment
of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.
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(5) Any covered operations expenditure.
(6) Any covered property damage cost.
(7) Any covered supplier cost.
(8) Any covered worker protection expenditure.
(c) TREATMENT OF AMOUNTS FORGIVEN.—
(1) IN GENERAL.—Amounts which have been forgiven
under this section shall be considered canceled indebtedness by
a lender authorized under section 7(a).
(2) PURCHASE OF GUARANTEES.—For purposes of the purchase of the guarantee for a covered loan by the Administrator,
amounts which are forgiven under this section shall be treated
in accordance with the procedures that are otherwise applicable to a loan guaranteed under section 7(a).
(3) REMITTANCE.—Not later than 90 days after the date on
which the amount of forgiveness under this section is determined, the Administrator shall remit to the lender an amount
equal to the amount of forgiveness, plus any interest accrued
through the date of payment.
(4) ADVANCE PURCHASE OF COVERED LOAN.—
(A) REPORT.—A lender authorized under section 7(a),
or, at the discretion of the Administrator, a third party
participant in the secondary market, may, report to the
Administrator an expected forgiveness amount on a covered loan or on a pool of covered loans of up to 100 percent
of the principal on the covered loan or pool of covered
loans, respectively.
(B) PURCHASE.—The Administrator shall purchase the
expected forgiveness amount described in subparagraph
(A) as if the amount were the principal amount of a loan
guaranteed under section 7(a) of the Small Business Act
636(a)) 55.
(C) TIMING.—Not later than 15 days after the date on
which the Administrator receives a report under subparagraph (A), the Administrator shall purchase the expected
forgiveness amount under subparagraph (B) with respect
to each covered loan to which the report relates.
(d) LIMITS ON AMOUNT OF FORGIVENESS.—
(1) AMOUNT MAY NOT EXCEED PRINCIPAL.—The amount of
loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.
(2) REDUCTION BASED ON REDUCTION IN NUMBER OF EMPLOYEES.—
(A) IN GENERAL.—The amount of loan forgiveness
under this section shall be reduced, but not increased, by
multiplying the amount described in subsection (b) by the
quotient obtained by dividing—
(i) the average number of full-time equivalent employees per month employed by the eligible recipient
during the covered period; by
(ii)(I) at the election of the borrower—
55 The reference to ‘‘of the Small Business Act 636(a))’’ in subsection (c)(4)(B) should not appear.

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(aa) the average number of full-time
equivalent employees per month employed by
the eligible recipient during the period beginning on February 15, 2019 and ending on
June 30, 2019; or
(bb) the average number of full-time
equivalent employees per month employed by
the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator,
the average number of full-time equivalent employees
per month employed by the eligible recipient during
the period beginning on February 15, 2019 and ending
on June 30, 2019.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined
by calculating the average number of full-time equivalent
employees for each pay period falling within a month.
(3) REDUCTION RELATING TO SALARY AND WAGES.—
(A) IN GENERAL.—The amount of loan forgiveness
under this section shall be reduced by the amount of any
reduction in total salary or wages of any employee described in subparagraph (B) during the covered period that
is in excess of 25 percent of the total salary or wages of
the employee during the most recent full quarter during
which the employee was employed before the covered period.
(B) EMPLOYEES DESCRIBED.—An employee described in
this subparagraph is any employee who did not receive,
during any single pay period during 2019, wages or salary
at an annualized rate of pay in an amount more than
$100,000.
(4) TIPPED WORKERS.—An eligible recipient with tipped
employees described in section 3(m)(2)(A) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) may receive
forgiveness for additional wages paid to those employees.
(5) EXEMPTION FOR RE-HIRES.—
(A) IN GENERAL.—In a circumstance described in subparagraph (B), the amount of loan forgiveness under this
section shall be determined without regard to a reduction
in the number of full-time equivalent employees of an eligible recipient or a reduction in the salary of 1 or more
employees of the eligible recipient, as applicable, during
the period beginning on February 15, 2020 and ending on
the date that is 30 days after the date of enactment of this
Act.
(B) CIRCUMSTANCES.—A circumstance described in this
subparagraph is a circumstance—
(i) in which—
(I) during the period beginning on February
15, 2020 and ending on the date that is 30 days
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after the date of enactment of this Act, there is a
reduction, as compared to February 15, 2020, in
the number of full-time equivalent employees of
an eligible recipient; and
(II) not later than December 31, 2020 (or,
with respect to a covered loan made on or after
the date of enactment of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act, not later than the last day of the covered period with respect to such covered loan), the
eligible employer has eliminated the reduction in
the number of full-time equivalent employees;
(ii) in which—
(I) during the period beginning on February
15, 2020 and ending on the date that is 30 days
after the date of enactment of this Act, there is a
reduction, as compared to February 15, 2020, in
the salary or wages of 1 or more employees of the
eligible recipient; and
(II) not later than December 31, 2020 (or,
with respect to a covered loan made on or after
the date of enactment of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act, not later than the last day of the covered period with respect to such covered loan), the
eligible employer has eliminated the reduction in
the salary or wages of such employees; or
(iii) in which the events described in clause (i) and
(ii) occur.
(6) EXEMPTIONS.—The Administrator and the Secretary of
the Treasury may prescribe regulations granting de minimis
exemptions from the requirements under this subsection.
(7) EXEMPTION BASED ON EMPLOYEE AVAILABILITY.—During
the period beginning on February 15, 2020, and ending on December 31, 2020 (or, with respect to a covered loan made on
or after the date of enactment of the Economic Aid to HardHit Small Businesses, Nonprofits, and Venues Act, ending on
the last day of the covered period with respect to such covered
loan), the amount of loan forgiveness under this section shall
be determined without regard to a proportional reduction in
the number of full-time equivalent employees if an eligible recipient, in good faith—
(A) is able to document—
(i) an inability to rehire individuals who were employees of the eligible recipient on February 15, 2020;
and
(ii) an inability to hire similarly qualified employees for unfilled positions on or before December 31,
2020 (or, with respect to a covered loan made on or
after the date of enactment of the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and Venues
Act, on or before the last day of the covered period
with respect to such covered loan); or
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(B) is able to document an inability to return to the
same level of business activity as such business was operating at before February 15, 2020, due to compliance with
requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the
Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending December 31,
2020 (or, with respect to a covered loan made on or after
the date of enactment of the Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and Venues Act, ending on
the last day of the covered period with respect to such covered loan), related to the maintenance of standards for
sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.
(8) LIMITATION ON FORGIVENESS.—To receive loan forgiveness under this section, an eligible recipient shall use at least
60 percent of the covered loan amount for payroll costs, and
may use up to 40 percent of such amount for any payment of
interest on any covered mortgage obligation (which shall not
include any prepayment of or payment of principal on a covered mortgage obligation), any payment on any covered rent
obligation, any payment on any covered operations expenditure, any payment on any covered property damage cost, any
payment on any covered supplier cost, any payment on any
covered worker protection expenditure, or any covered utility
payment.
(e) APPLICATION.—Except as provided in subsection (l), an eligible recipient seeking loan forgiveness under this section shall submit to the lender that is servicing the covered loan an application,
which shall include—
(1) documentation verifying the number of full-time equivalent employees on payroll and pay rates for the periods described in subsection (d), including—
(A) payroll tax filings reported to the Internal Revenue
Service; and
(B) State income, payroll, and unemployment insurance filings;
(2) documentation, including cancelled checks, payment receipts, transcripts of accounts, purchase orders, orders, invoices, or other documents verifying payments on covered
mortgage obligations, payments on covered rent obligations,
payments on covered operations expenditures, payments on
covered property damage costs, payments on covered supplier
costs, payments on covered worker protection expenditures,
and covered utility payments;
(3) a certification from a representative of the eligible recipient authorized to make such certifications that—
(A) the documentation presented is true and correct;
and
(B) the amount for which forgiveness is requested was
used to retain employees, make interest payments on a
covered mortgage obligation, make payments on a covered
rent obligation, make payments on covered operations exFebruary 1, 2024

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penditures, make payments on covered property damage
costs, make payments on covered supplier costs, make payments on covered worker protection expenditures, or make
covered utility payments; and
(4) any other documentation the Administrator determines
necessary.
(f) PROHIBITION ON FORGIVENESS WITHOUT DOCUMENTATION.—
No eligible recipient shall receive forgiveness under this section
without submitting to the lender that is servicing the covered loan
the documentation required under subsection (e) or the certification
required under subsection (l), as applicable.
(g) DECISION.—Not later than 60 days after the date on which
a lender receives an application for loan forgiveness under this section from an eligible recipient, the lender shall issue a decision on
the an application.
(h) HOLD HARMLESS.—
(1) DEFINITION.—In this subsection, the term ‘‘initial or
second draw PPP loan’’ means a covered loan or a loan under
paragraph (37) of section 7(a).
(2) RELIANCE.—A lender may rely on any certification or
documentation submitted by an applicant for an initial or second draw PPP loan or an eligible recipient or eligible entity receiving initial or second draw PPP loan that—
(A) is submitted pursuant to all applicable statutory
requirements, regulations, and guidance related to initial
or second draw PPP loan, including under paragraph (36)
or (37) of section 7(a) and under this section; and
(B) attests that the applicant, eligible recipient, or eligible entity, as applicable, has accurately provided the certification or documentation to the lender in accordance
with the statutory requirements, regulations, and guidance
described in subparagraph (A).
(3) NO ENFORCEMENT ACTION.—With respect to a lender
that relies on a certification or documentation described in
paragraph (2) related to an initial or second draw PPP loan,
an enforcement action may not be taken against the lender,
and the lender shall not be subject to any penalties relating to
loan origination or forgiveness of the initial or second draw
PPP loan, if—
(A) the lender acts in good faith relating to loan origination or forgiveness of the initial or second draw PPP
loan based on that reliance; and
(B) all other relevant Federal, State, local, and other
statutory and regulatory requirements applicable to the
lender are satisfied with respect to the initial or second
draw PPP loan.
(i) TAX TREATMENT.—For purposes of the Internal Revenue
Code of 1986—
(1) no amount shall be included in the gross income of the
eligible recipient by reason of forgiveness of indebtedness described in subsection (b),
(2) no deduction shall be denied, no tax attribute shall be
reduced, and no basis increase shall be denied, by reason of the
exclusion from gross income provided by paragraph (1), and
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(3) in the case of an eligible recipient that is a partnership
or S corporation—
(A) any amount excluded from income by reason of
paragraph (1) shall be treated as tax exempt income for
purposes of sections 705 and 1366 of the Internal Revenue
Code of 1986, and
(B) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), any increase in the adjusted basis of a partner’s interest in a partnership under
section 705 of the Internal Revenue Code of 1986 with respect to any amount described in subparagraph (A) shall
equal the partner’s distributive share of deductions resulting from costs giving rise to forgiveness described in subsection (b).
(j) RULE OF CONSTRUCTION.—The cancellation of indebtedness
on a covered loan under this section shall not otherwise modify the
terms and conditions of the covered loan.
(k) REGULATIONS.—Not later than 30 days after the date of enactment of this Act, the Administrator shall issue guidance and
regulations implementing this section.
(l) SIMPLIFIED APPLICATION.—
(1) COVERED LOANS UP TO $150,000.—
(A) IN GENERAL.—With respect to a covered loan made
to an eligible recipient that is not more than $150,000, the
covered loan amount shall be forgiven under this section
if the eligible recipient—
(i) signs and submits to the lender a certification,
to be established by the Administrator not later than
24 days after the date of enactment of the Economic
Aid to Hard-Hit Small Businesses, Nonprofits, and
Venues Act, which—
(I) shall be not more than 1 page in length;
and
(II) shall only require the eligible recipient to
provide—
(aa) a description of the number of employees the eligible recipient was able to retain because of the covered loan;
(bb) the estimated amount of the covered
loan amount spent by the eligible recipient on
payroll costs; and
(cc) the total loan value;
(ii) attests that the eligible recipient has—
(I) accurately provided the required certification; and
(II) complied with the requirements under
section 7(a)(36); and
(iii) retains records relevant to the form that prove
compliance with such requirements—
(I) with respect to employment records, for
the 4-year period following submission of the
form; and
(II) with respect to other records, for the 3year period following submission of the form.
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(B) LIMITATION ON REQUIRING ADDITIONAL MATERIALS.—An eligible recipient of a covered loan that is not
more than $150,000 shall not, at the time of the application for forgiveness, be required to submit any application
or documentation in addition to the certification and information required to substantiate forgiveness.
(C) RECORDS FOR OTHER REQUIREMENTS.—Nothing in
subparagraph (A) or (B) shall be construed to exempt an
eligible recipient from having to provide documentation
independently to a lender to satisfy relevant Federal,
State, local, or other statutory or regulatory requirements,
or in connection with an audit as authorized under subparagraph (E).
(D) DEMOGRAPHIC INFORMATION.—The certification established by the Administrator under subparagraph (A)
shall include a means by which an eligible recipient may,
at the discretion of the eligible recipient, submit demographic information of the owner of the eligible recipient,
including the sex, race, ethnicity, and veteran status of the
owner.
(E) AUDIT AUTHORITY.—The Administrator may—
(i) review and audit covered loans described in
subparagraph (A);
(ii) access any records described in subparagraph
(A)(iii); and
(iii) in the case of fraud, ineligibility, or other material noncompliance with applicable loan or loan forgiveness requirements, modify—
(I) the amount of a covered loan described in
subparagraph (A); or
(II) the loan forgiveness amount with respect
to a covered loan described in subparagraph (A).
(2) COVERED LOANS OF MORE THAN $150,000.—
(A) IN GENERAL.—With respect to a covered loan in an
amount that is more than $150,000, the eligible recipient
shall submit to the lender that is servicing the covered
loan the documentation described in subsection (e).
(B) DEMOGRAPHIC INFORMATION.—The process for submitting the documentation described in subsection (e) shall
include a means by which an eligible recipient may, at the
discretion of the eligible recipient, submit demographic information of the owner of the eligible recipient, including
the sex, race, ethnicity, and veteran status of the owner.
(3) FORGIVENESS AUDIT PLAN.—
(A) IN GENERAL.—Not later than 45 days after the
date of enactment of the Economic Aid to Hard-Hit Small
Businesses, Nonprofits, and Venues Act, the Administrator
shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives an audit plan
that details—
(i) the policies and procedures of the Administrator for conducting forgiveness reviews and audits of
covered loans; and
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(ii) the metrics that the Administrator shall use to
determine which covered loans will be audited.
(B) REPORTS.—Not later than 30 days after the date
on which the Administrator submits the audit plan required under subparagraph (A), and each month thereafter, the Administrator shall submit to the Committee on
Small Business and Entrepreneurship of the Senate and
the Committee on Small Business of the House of Representatives a report on the forgiveness review and audit
activities of the Administrator under this subsection,
which shall include—
(i) the number of active reviews and audits;
(ii) the number of reviews and audits that have
been ongoing for more than 60 days; and
(iii) any substantial changes made to the audit
plan submitted under subparagraph (A).
SEC. 8. ø15 U.S.C. 637¿ (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
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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) 56 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 $7,000,000 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
56 So

in law. Paragraphs (a)(1)(C) should probably be moved two ems to the left.

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United States to be accompanied by a performance bond protecting
the United States and by additional bond for the protection of persons furnishing material and labor for the construction, alteration,
or repair of said public buildings or public work,’’ approved August
24, 1935 (49 Stat. 793), no small business concern shall be required
to provide any amount of any bond as a condition or receiving any
subcontract under this subsection if the Administrator determines
that such amount is inappropriate for such concern in performing
such contract: Provided, That the Administrator shall exercise the
authority granted by the paragraph only if—
(A) the Administration takes such measures as it deems
appropriate for the protection of persons furnishing materials
and labor to a small business receiving any benefit pursuant
to this paragraph;
(B) the Administration assists, insofar as practicable, a
small business receiving the benefits of this paragraph to develop, within a reasonable period of time, such financial and
other capability as may be needed to obtain such bonds as the
Administration may subsequently require for the successful
completion of any program conducted under the authority of
this subsection;
(C) the Administration finds that such small business is
unable to obtain the requisite bond or bonds from a surety and
that no surety is willing to issue such bond or bonds subject
to the guarantee provisions of Title IV of the Small Business
Investment Act of 1958; and
(D) that small business is determined to be a start-up concern and such concern has not been participating in any program conducted under the authority of this subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may
not be exercised after September 30, 1988.
(3)(A) Any Program Participant selected by the Administration
to perform a contract to be let noncompetitively pursuant to this
subsection shall, when practicable, participate in any negotiation of
the terms and conditions of such contract.
(B)(i) For purposes of paragraph (1) a ‘‘fair market price’’ shall
be determined by the agency offering the procurement requirement
to the Administration, in accordance with clauses (ii) and (iii).
(ii) The estimate of a current fair market price for a new procurement requirement, or a requirement that does not have a satisfactory procurement history, shall be derived from a price or cost
analysis. Such analysis may take into account prevailing market
conditions, commercial prices for similar products or services, or
data obtained from any other agency. Such analysis shall consider
such cost or pricing data as may be timely submitted by the Administration.
(iii) The estimate of a current fair market price for a procurement requirement that has a satisfactory procurement history shall
be based on recent award prices adjusted to insure 57 comparability. Such adjustments shall take into account differences in
quantities, performance times, plans, specifications, transportation
57 So

in original. Probably should be ‘‘ensure’’.

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costs, packaging and packing costs, labor and materials costs, overhead costs, and any other additional costs which may be deemed
appropriate.
(C) An agency offering a procurement requirement for potential
award pursuant to this subsection shall, upon the request of the
Administration, promptly submit to the Administration a written
statement detailing the method used by the agency to estimate the
current fair market price for such contract, identifying the information, studies, analyses, and other data used by such agency. The
agency’s estimate of the current fair market price (and any supporting data furnished to the Administration) shall not be disclosed
to any potential offeror (other than the Administration).
(D) A small business concern selected by the Administration to
perform or negotiate a contract to be let pursuant to this subsection may request the Administration to protest the agency’s estimate of the fair market price for such contract pursuant to paragraph (1)(A).
(4)(A) For purposes of this section, the term ‘‘socially and economically disadvantaged small business concern’’ means any small
business concern which meets the requirements of subparagraph
(B) and—
(i) which is at least 51 per centum unconditionally owned
by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian
organization, or
(ii) in the case of any publicly owned business, at least 51
per centum of the stock of which is unconditionally owned by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian
organization.
(B) A small business concern meets the requirements of this
subparagraph if the management and daily business operations of
such small business concern are controlled by one or more—
(i) socially and economically disadvantaged individuals described in subparagraph (A)(i)(I) or subparagraph (A)(ii)(I),
(ii) members of an economically disadvantaged Indian tribe
described in subparagraph (A)(i)(II) or subparagraph (A)(ii)(II),
or
(iii) Native Hawaiian organizations described in subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual basis,
that it meets the requirements of this paragraph regarding ownership and control.
(5) Socially disadvantaged individuals are those who have been
subjected to racial or ethnic prejudice or cultural bias because of
their identity as a member of a group without regard to their individual qualities.
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(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—
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(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).
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(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
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dollar value of contract opportunities that such activities may be
awarding over the succeeding 12-month period and which may be
appropriate to consider for award to those concerns for which it has
received capability statements.
(C) Each executive agency reporting to the Federal Procurement Data System contract actions with an aggregate value in excess of $50,000,000 in fiscal year 1988, or in any succeeding fiscal
year, shall prepare a forecast of expected contract opportunities or
classes of contract opportunities for the next and succeeding fiscal
years that small business concerns, including those owned and controlled by socially and economically disadvantaged individuals, are
capable of performing. Such forecast shall be periodically revised
during such year. To the extent such information is available, the
agency forecasts shall specify:
(i) The approximate number of individual contract opportunities (and the number of opportunities within a class).
(ii) The approximate dollar value, or range of dollar values,
for each contract opportunity or class of contract opportunities.
(iii) The anticipated time (by fiscal year quarter) for the
issuance of a procurement request.
(iv) The activity responsible for the award and administration of the contract.
(D) The head of each executive agency subject to the provisions
of subparagraph (C) shall within 10 days of completion furnish
such forecasts to—
(i) the Director of the Office of Small and Disadvantaged
Business Utilization established pursuant to section 15(k) for
such agency; and
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D)
may be limited to classes of items and services for which there are
substantial annual purchases.
(F) Such forecasts shall be available to small business concerns.
(13) For purposes of this subsection, the term ‘‘Indian tribe’’
means any Indian tribe, band, nation, or other organized group or
community of Indians, including any Alaska Native village or regional or village corporation (within the meaning of the Alaska Native Claims Settlement Act) which—
(A) is recognized as eligible for the special programs and
services provided by the United States to Indians because of
their status as Indians, or
(B) is recognized as such by the State in which such tribe,
band, nation, group, or community resides.
(14) LIMITATIONS ON SUBCONTRACTING.—A concern may
not be awarded a contract under this subsection as a small
business concern unless the concern agrees to satisfy the requirements of section 46.
(15) For purposes of this subsection, the term ‘‘Native Hawaiian Organization’’ means any community service organization serving Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of incorporation with the director (or the designee thereof) of the
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Hawaii Department of Commerce and Consumer Affairs, or
any successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally benefit such
Native Hawaiians.
(16)(A) The Administration shall award sole source contracts
under this section to any small business concern recommended by
the procuring agency offering the contract opportunity if—
(i) the Program Participant is determined to be a responsible contractor with respect to performance of such contract
opportunity;
(ii) the award of such contract would be consistent with
the Program Participant’s business plan; and
(iii) the award of the contract would not result in the Program Participant exceeding the requirements established by
section 7(j)(10)(I).
(B) To the maximum extent practicable, the Administration
shall promote the equitable geographic distribution of sole source
contracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in
compliance with the requirements of subparagraph (B) shall not be
denied the opportunity to submit and have considered its offer for
any procurement contract, which contract has as its principal purpose the supply of a product to be let pursuant to this subsection,
subsection (m), section 15(a), section 31, or section 36, solely because such concern is other than the actual manufacturer or processor of the product to be supplied under the contract.
(B) To be in compliance with the requirements referred to in
subparagraph (A), such a business concern shall—
(i) be primarily engaged in the wholesale or retail trade;
(ii) be a small business concern under the numerical size
standard for the Standard Industrial Classification Code assigned to the contract solicitation on which the offer is being
made;
(iii) be a regular dealer, as defined pursuant to section
35(a) of title 41, United States Code (popularly referred to as
the Walsh-Healey Public Contracts Act), in the product to be
offered the Government or be specifically exempted from such
section by section 7(j)(13)(C); and
(iv) represent that it will supply the product of a domestic
small business manufacturer or processor, unless a waiver of
such requirement is granted—
(I) by the Administrator, after reviewing a determination by the contracting officer that no small business manufacturer or processor can reasonably be expected to offer
a product meeting the specifications (including period for
performance) required of an offeror by the solicitation; or
(II) by the Administrator for a product (or class of
products), after determining that no small business manufacturer or processor is available to participate in the Federal procurement market.
(C) LIMITATION.—This paragraph shall not apply to a contract that has as its principal purpose the acquisition of services or construction.
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(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
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the Administration any such action for which such employee’s participation has been solicitated 58 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.
58 So

in original. Probably should be ‘‘solicited’’.

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(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) 59 The Administrator may waive the requirements
of subparagraph (A) if—
(i) in the case of subparagraph (B) (i), (ii) and (iv),
he is requested to do so prior to the actual relinquishment of ownership or control; and
(ii) in the case of subparagraph (B)(iii), he is requested to do so as soon as possible after the incapacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this
subsection shall be required to notify the Administration immediately upon entering an agreement (either oral or in writing) to
transfer all or part of its stock or other ownership interest to any
other party.
(E) Notwithstanding any other provision of law, for the purposes of determining ownership and control of a concern under this
section, any potential ownership interests held by investment companies licensed under the Small Business Investment Act of 1958
shall be treated in the same manner as interests held by the individuals upon whom eligibility is based.
(b) It shall also be the duty of the Administration and it is
hereby empowered, whenever it determines such action is necessary—
(1)(A) to provide—
(i) technical, managerial, and informational aids to
small business concerns—
(I) by advising and counseling on matters in connection with Government procurement and policies,
principles, and practices of good management;
(II) by cooperating and advising with—
59 So

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(aa) voluntary business, professional, educational, and other nonprofit organizations, associations, and institutions (except that the Administration shall take such actions as it determines
necessary to ensure that such cooperation does not
constitute or imply an endorsement by the Administration of the organization or its products or
services, and shall ensure that it receives appropriate recognition in all printed materials); and
(bb) other Federal and State agencies;
(III) by maintaining a clearinghouse for information on managing, financing, and operating small business enterprises; and
(IV) by disseminating such information, including
through recognition events, and by other activities
that the Administration determines to be appropriate;
and
(ii) through cooperation with a profit-making concern
(referred to in this paragraph as a ‘‘cosponsor’’), training,
information, and education to small business concerns, except that the Administration shall—
(I) take such actions as it determines to be appropriate to ensure that—
(aa) the Administration receives appropriate
recognition and publicity;
(bb) the cooperation does not constitute or
imply an endorsement by the Administration of
any product or service of the cosponsor;
(cc) unnecessary promotion of the products or
services of the cosponsor is avoided; and
(dd) utilization of any one cosponsor in a marketing area is minimized; and
(II) develop an agreement, executed on behalf of
the Administration by an employee of the Administration in Washington, the District of Columbia, that provides, at a minimum, that—
(aa) any printed material to announce the cosponsorship or to be distributed at the cosponsored activity, shall be approved in advance by the
Administration;
(bb) the terms and conditions of the cooperation shall be specified;
(cc) only minimal charges may be imposed on
any small business concern to cover the direct
costs of providing the assistance;
(dd) the Administration may provide to the
cosponsorship mailing labels, but not lists of
names and addresses of small business concerns
compiled by the Administration;
(ee) all printed materials containing the
names of both the Administration and the cosponsor shall include a prominent disclaimer that the
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dorsement by the Administration of any product
or service of the cosponsor; and
(ff) the Administration shall ensure that it receives appropriate recognition in all cosponsorship
printed materials.
(B) To establish, conduct, and publicize, and to recruit, select, and train volunteers for (and to enter into contracts,
grants, or cooperative agreements therefor), volunteer programs, including a Service Corps of Retired Executives
(SCORE) and an Active Corps of Executive (ACE) for the purposes of section 8(b)(1)(A) of this Act. To facilitate the implementation of such volunteer programs the Administration shall
maintain at its headquarters and pay the salaries, benefits,
and expenses of a volunteer and professional staff to manage
and oversee the program. Any such payments made pursuant
to this subparagraph shall be effective only to such extent or
in such amounts as are provided in advance in appropriation
Acts. Notwithstanding any other provision of law, SCORE may
solicit cash and in-kind contributions from the private sector to
be used to carry out its functions under this Act, and may use
payments made by the Administration pursuant to this subparagraph for such solicitation and the management of the
contributions received.
(C) To allow any individual or group of persons participating with it in furtherance of the purposes of subparagraphs
(A) and (B) to use the Administration’s office facilities and related material and services as the Administration deems appropriate, including clerical and stenographic service:
(i) such volunteers, while carrying out activities under
section 8(b)(1) of this Act shall be deemed Federal employees for the purposes of the Federal tort claims provisions
in title 28, United States Code; and for the purposes of
subchapter I of chapter 81 of title 5, United States Code
(relative to compensation to Federal employees for work
injuries) shall be deemed civil employees of the United
States within the meaning of the term ‘‘employee’’ as defined in section 8101 of title 5, United States Code, and
the provisions of that subchapter shall apply except that
in computing compensation benefits for disability or death,
the monthly pay of a volunteer shall be deemed that received under the entrance salary for a grade GS–11 employee:
(ii) the Administrator is authorized to reimburse such
volunteers for all necessary out-of-pocket expenses incident
to their provision of services under this Act, or in connection with attendance at meetings sponsored by the Administration, or for the cost of malpractice insurance, as the
Administrator shall determine, in accordance with regulations which he or she shall prescribe, and, while they are
carrying out such activities away from their homes or regular places of business, for travel expenses (including per
diem in lieu of subsistence) as authorized by section 5703
of title 5, United States Code, for individuals serving without pay; and
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(iii) such volunteers shall in no way provide services
to a client of such Administration with a delinquent loan
outstanding, except upon a specific request signed by such
client for assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no payment for supportive services or reimbursement of out-of-pocket
expenses made to persons serving pursuant to section 8(b)(1)
of this Act shall be subject to any tax or charge or be treated
as wages or compensation for the purposes of unemployment,
disability, retirement, public assistance, or similar benefit payments, or minimum wage laws.
(E) In carrying out its functions under subparagraph (A),
to make grants (including contracts and cooperative agreements) to any public or private institution of higher education
for the establishment and operation of a small business institute, which shall be used to provide business counseling and
assistance to small business concerns through the activities of
students enrolled at the institution, which students shall be
entitled to receive educational credits for their activities.
(F) Notwithstanding any other provision of law and pursuant to regulations which the Administrator shall provide, counsel may be employed and counsel fees, court costs, bail, and
other expenses incidental to the defense of volunteers may be
paid in judicial or Administrative proceedings arising directly
out of the performance of activities pursuant to section 8(b)(1)
of this Act, as amended (15 U.S.C. 637(b)(1)) to which volunteers have been made parties.
(G) In carrying out its functions under this Act and to
carry out the activities authorized by title IV of the Women’s
Business Ownership Act of 1988, the Administration is authorized to accept, in the name of the Administration, and employ
or dispose of in furtherance of the purposes of this Act, any
money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise; and, further, to accept gratuitous services and facilities.
(2) to make a complete inventory of all productive facilities
of small-business concerns or to arrange for such inventory to
be made by any other governmental agency which has the facilities. In making any such inventory, the appropriate agencies in the several States may be requested to furnish an inventory of the productive facilities of small-business concerns
in each respective State if such an inventory is available or in
prospect;
(3) to coordinate and to ascertain the means by which the
productive capacity of small-business concerns can be most effectively utilized;
(4) to consult and cooperative with officers of the Government having procurement or property disposal powers, in order
to utilize the potential productive capacity of plants operated
by small-business concerns;
(5) to obtain information as to methods and practices
which Government prime contractors utilize in letting subcontracts and to take action to encourage the letting of subcontracts by prime contractors to small-business concerns at
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prices and on conditions and terms which are fair and equitable;
(6) to determine within any industry the concerns, firms,
persons, corporations, partnerships, cooperatives, or other business enterprises which are to be designated ‘‘small-business
concerns’’ for the purpose of effectuating the provisions of this
Act. To carry out this purpose the Administrator, when requested to do so, shall issue in response to each such request
an appropriate certificate certifying an individual concern as a
‘‘small-business concern’’ in accordance with the criteria expressed in this Act. Any such certificate shall be subject to revocation when the concern covered thereby ceases to be a
‘‘small-business concern.’’ Offices of the Government having
procurement or lending powers, or engaging in the disposal of
Federal property or allocating materials or supplies, or promulgating regulations affecting the distribution of materials or
supplies, shall accept as conclusive the Administration’s determination as to which enterprises are to be designated ‘‘smallbusiness 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. 60
(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
60 So

in original. Should be semicolon.

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responsibility or eligibility. Notwithstanding the first sentence
of this subparagraph, the Administration may not establish an
exemption from referral or notification or refuse to accept a referral or notification from a Government procurement officer
made pursuant to subparagraph (A) or (B) of this paragraph,
but nothing in this paragraph shall require the processing of
an application for certification if the small business concern to
which the referral pertains declines to have the application
processed.
(8) to obtain from any Federal department, establishment,
or agency engaged in procurement or in the financing of procurement or production such reports concerning the letting of
contracts and subcontracts and the making of loans to business
concerns as it may deem pertinent in carrying out its functions
under this Act;
(9) to obtain from any Federal department, establishment,
or agency engaged in the disposal of Federal property such reports concerning the solicitation of bids, time of sale, or otherwise as it may deem pertinent in carrying out its functions
under this Act;
(10) to obtain from suppliers of materials information pertaining to the method of filling orders and the bases for allocating their supply, whenever it appears that any small business is unable to obtain materials from its normal sources;
(11) to make studies and recommendations to the appropriate Federal agencies to insure that a fair proportion of the
total purchases and contracts for property and services for the
Government be placed with small-business enterprises, to insure that a fair proportion of Government contacts for research
and development be placed with small-business concerns, to insure that a fair proportion of the total sales of Government
property be made to small-business concerns, and to insure a
fair and equitable share of materials, supplies, and equipment
to small-business concerns;
(12) to consult and cooperate with all Government agencies
for the purpose of insuring that small-business concerns shall
receive fair and reasonable treatment from such agencies;
(13) to establish such advisory boards and committees as
may be necessary to achieve the purposes of this Act and of the
Small Business Investment Act of 1958; to call meetings of
such boards and committees from time to time; to pay the
transportation expenses and a per diem allowance in accordance with section 5703 of title 5, United States Code, to the
members of such boards and committees for travel and subsistence expenses incurred at the request of the Administration in
connection with travel to points more than fifty miles distant
from the homes of such members in attending the meetings of
such boards and committees; and to rent temporarily, within
the District of Columbia or elsewhere, such hotel or other accommodations as are needed to facilitate the conduct of such
meetings;
(14) to provide at the earliest practicable time such information and assistance as may be appropriate, including information concerning eligibility for loans under section 7(b)(3), to
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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) 61 [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
61 Section 3 of Public Law 102–191 repealed old subsection (c) and redesignated subsections
(d) through (j) as (c) through (k). Probably should have redesignated subsections (d) through (j)
as (c) through (i). Section 232(a)(6) and (7) of Public Law 102–366 redesignated subsections (c)
through (i) as (d) through (j) and inserted the above subsection (c).

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(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
(A) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and small business concerns owned and controlled by women shall have the
maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the
policy of the United States that its prime contractors establish
procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business
concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(B) The contractor hereby agrees to carry out this policy in
the awarding of subcontracts to the fullest extent consistent
with the efficient performance of this contract. The contractor
further agrees to cooperate in any studies or surveys as may
be conducted by the United States Small Business Administration or the awarding agency of the United States as may be
necessary to determine the extent of the contractor’s compliance with this clause.
(C) As used in this contract, the term ‘‘small business concern’’ shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term ‘‘small business concern
owned and controlled by socially and economically disadvantaged individuals’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or
more socially and economically disadvantaged individuals;
or, in the case of any publicly owned business, at least 51
per centum of the stock of which is owned by one or more
socially and economically disadvantaged individuals; and
(ii) whose management and daily business operations
are controlled by one or more of such individuals.
The contractor shall presume that socially and economically
disadvantaged individuals include Black Americans, Hispanic
Americans, Native Americans, Asian Pacific Americans, and
other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the
Small Business Act.
(D) The term ‘‘small business concern owned and controlled by women’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or
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ness, at least 51 per centum of the stock of which is owned
by one or more women; and
(ii) whose management and daily business operations
are controlled by one or more women.
(E) The term ‘‘small business concern owned and controlled by veterans’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or
more eligible veterans; or, in the case of any publicly
owned business, at least 51 per centum of the stock of
which is owned by one or more veterans; and
(ii) whose management and daily business operations
are controlled by such veterans. The contractor shall treat
as veterans all individuals who are veterans within the
meaning of the term under section 3(q) of the Small Business Act.
(F) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status
as either a small business concern, small business concern
owned and controlled by veterans, small business concern
owned and controlled by service-disabled veterans, a small
business concern owned and controlled by socially and economically disadvantaged individuals, or a small business concern owned and controlled by women.
(G) In this contract, the term ‘‘qualified HUBZone small
business concern’’ has the meaning given that term in section
31(b).
(H) In this contract, the term ‘‘small business concern
owned and controlled by service-disabled veterans’’ has the
meaning given that term in section 3(q).
(4)(A) Each solicitation of an offer for a contract to be let by
a Federal agency which is to be awarded pursuant to the negotiated method of procurement and which may exceed $1,000,000, in
the case of a contract for the construction of any public facility, or
$500,000, in the case of all other contracts, shall contain a clause
notifying potential offering companies of the provisions of this subsection relating to contracts awarded pursuant to the negotiated
method of procurement.
(B) Before the award of any contract to be let, or any amendment or modification to any contract let, by any Federal agency
which—
(i) is to be awarded, or was let, pursuant to the negotiated
method of procurement,
(ii) is required to include the clause stated in paragraph
(3),
(iii) may exceed $1,000,000 in the case of a contract for the
construction of any public facility, or $500,000 in the case of
all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the procurement authority a subcontracting plan which incorporates the information prescribed in paragraph (6). The subcontracting plan shall
be included in and made a material part of the contract.
(C) If, within the time limit prescribed in regulations of the
Federal agency concerned, the apparent successful offeror fails to
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negotiate the subcontracting plan required by this paragraph, such
offeror shall become ineligible to be awarded the contract. Prior
compliance of the offeror with other such subcontracting plans
shall be considered by the Federal agency in determining the responsibility of that offeror for the award of the contract.
(D) No contract shall be awarded to any offeror unless the procurement authority determines that the plan to be negotiated by
the offeror pursuant to this paragraph provides the maximum practicable opportunity for small business concerns, qualified HUBZone
small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled
by service-disabled veterans, small business concerns owned and
controlled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women to
participate in the performance of the contract.
(E) Notwithstanding any other provisions of law, every Federal
agency, in order to encourage subcontracting opportunities for
small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled
by service-disabled veterans, qualified HUBZone small business
concerns, and small business concerns owned and controlled by the
socially and economically disadvantaged individuals as defined in
paragraph (3) of this subsection and for small business concerns
owned and controlled by women, is hereby authorized to provide
such incentives as such Federal agency may deem appropriate in
order to encourage such subcontracting opportunities as may be
commensurate with the efficient and economical performance of the
contact: Provided, That, this subparagraph shall apply only to contracts let pursuant to the negotiated method of procurement.
(F)(i) Each contract subject to the requirements of this paragraph or paragraph (5) shall contain a clause for the payment of
liquidated damages upon a finding that a prime contractor has
failed to make a good faith effort to comply with the requirements
imposed on such contractor by this subsection.
(ii) The contractor shall be afforded an opportunity to demonstrate a good faith effort regarding compliance prior to the contracting officer’s final decision regarding the impositon 62 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 of62 So

in original. Should be ‘‘imposition’’.

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fers for a bundled contract where the head of the agency determines that the contract offers a significant opportunity for subcontracting:
(i) A factor that is based on the rate provided under
the subcontracting plan for small business participation in
the performance of the contract.
(ii) For the evaluation of past performance of an offeror, a factor that is based on the extent to which the offeror
attained applicable goals for small business participation
in the performance of contracts.
(5)(A) Each solicitation of a bid for any contract to be let, or
any amendment or modification to any contract let, by any Federal
agency which—
(i) is to be awarded pursuant to the formal advertising
method of procurement,
(ii) is required to contain the clause stated in paragraph
(3) of this subsection,
(iii) may exceed $1,000,000 in the case of a contract for the
construction of any public facility, or $500,000, in the case of
all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to be
awarded a contract to submit to the Federal agency concerned a
subcontracting plan which incorporates the information prescribed
in paragraph (6).
(B) If, within the time limit prescribed in regulations of the
Federal agency concerned, the bidder selected to be awarded the
contract fails to submit the subcontracting plan required by this
paragraph, such bidder shall become ineligible to be awarded the
contract. Prior compliance of the bidder with other such subcontracting plans shall be considered by the Federal agency in determining the responsibility of such bidder for the award of the contract. The subcontracting plan of the bidder awarded the contract
shall be included in and made a material part of the contract.
(6) Each subcontracting plan required under paragraph (4) or
(5) shall include—
(A) percentage goals for the utilization as subcontractors of
small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women;
(B) the name of an individual within the employ of the offeror or bidder who will administer the subcontracting program
of the offeror or bidder and a description of the duties of such
individual;
(C) a description of the efforts the offeror or bidder will
take to assure that small business concerns, small business
concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned
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and controlled by women will have an equitable opportunity to
compete for subcontracts;
(D) assurances that the offeror or bidder will include the
clause required by paragraph (2) of this subsection in all subcontracts which offer further subcontracting opportunities, and
that the offeror or bidder will require all subcontractors (except
small business concerns) who receive subcontracts in excess of
$1,000,000 in the case of a contract for the construction of any
public facility, or in excess of $500,000 in the case of all other
contracts, to adopt a plan similar to the plan required under
paragraph (4) or (5), and assurances at a minimum that the offeror or bidder, and all subcontractors required to maintain
subcontracting plans pursuant to this paragraph, will—
(i) review and approve subcontracting plans submitted
by their subcontractors;
(ii) monitor subcontractor compliance with their approved subcontracting plans;
(iii) ensure that subcontracting reports are submitted
by their subcontractors when required;
(iv) acknowledge receipt of their subcontractors’ reports;
(v) compare the performance of their subcontractors to
subcontracting plans and goals; and
(vi) discuss performance with subcontractors when
necessary to ensure their subcontractors make a good faith
effort to comply with their subcontracting plans;
(E) assurances that the offeror or bidder will submit such
periodic reports and cooperate in any studies or surveys as
may be required by the Federal agency or the Administration
in order to determine the extent of compliance by the offeror
or bidder with the subcontracting plan;
(F) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate procedures which
have been adopted to comply with the requirements and goals
set forth in this plan, including the establishment of source
lists of small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone
small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by
women; and efforts to identify and award subcontracts to such
small business concerns;
(G) 63 a recitation of the types of records the successful
offeror or bidder will maintain to demonstrate that procedures have been adopted to substantiate the credit the successful offeror or bidder will elect to receive under paragraph (16)(A);
(H) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate procedures which
have been adopted to ensure subcontractors at all tiers comply
with the requirements and goals set forth in the plan estab63 Margin

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lished in accordance with subparagraph (D) of this paragraph,
including—
(i) the establishment of source lists of small business
concerns, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by
women; and
(ii) efforts to identify and award subcontracts to such
small business concerns; and
(I) a representation that the offeror or bidder will—
(i) make a good faith effort to acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from the small business
concerns used in preparing and submitting to the contracting agency the bid or proposal, in the same amount
and quality used in preparing and submitting the bid or
proposal; and
(ii) provide to the contracting officer a written explanation if the offeror or bidder fails to acquire articles,
equipment, supplies, services, or materials or obtain the
performance of construction work as described in clause (i).
(7) The head of the contracting agency shall ensure that—
(A) the agency collects and reports data on the extent
to which contractors of the agency meet the goals and objectives set forth in subcontracting plans submitted pursuant to this subsection; and
(B) the agency periodically reviews data collected and
reported pursuant to subparagraph (A) for the purpose of
ensuring that such contractors comply in good faith with
the requirements of this subsection and subcontracting
plans submitted by the contractors pursuant to this subsection.
(8) The provisions of paragraphs (4), (5), and (6) shall not apply
to offerors or bidders who are small business concerns.
(9) MATERIAL BREACH.—The failure of any contractor or
subcontractor to comply in good faith with—
(A) the clause contained in paragraph (3) of this subsection,
(B) any plan required of such contractor pursuant to
the authority of this subsection to be included in its contract or subcontract, or
(C) assurances provided under paragraph (6)(E),
shall be a material breach of such contract or subcontract and
may be considered in any past performance evaluation of the
contractor.
(10) Nothing contained in this subsection shall be construed to
supersede the requirements of Defense Manpower Policy Number
4A (32A CFR Chap. 1) or any successor policy.
(11) In the case of contracts within the provisions of paragraphs (4), (5), and (6), the Administration is authorized to—
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(A) assist Federal agencies and businesses in complying
with their responsibilities under the provisions of this subsection, including the formulation of subcontracting plans pursuant to paragraph (4);
(B) review any solicitation for any contract to be let pursuant to paragraphs (4) and (5) to determine the maximum practicable opportunity for small business concerns, small business
concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned
and controlled by women to participate as subcontractors in
the performance of any contract resulting from any solicitation,
and to submit its findings, which shall be advisory in nature,
to the appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans as a
supplement to evaluations performed by the contracting agency, either on a contract-by-contract basis or, in the case of contractors having multiple contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a subcontract utilization goal under any subcontracting plan entered
into with any executive agency pursuant to this subsection, a mentor firm providing development assistance to a protege firm under
the Mentor-Protege Program established under section 4902 of title
10, United States Code, shall be granted credit for such assistance
in accordance with subsection (f) of such section.
(13) PAYMENT OF SUBCONTRACTORS.—
(A) DEFINITION.—In this paragraph, the term ‘‘covered contract’’ means a contract relating to which a prime contractor is
required to develop a subcontracting plan under paragraph (4)
or (5).
(B) NOTICE.—
(i) IN GENERAL.—A prime contractor for a covered contract shall notify in writing the contracting officer for the
covered contract if the prime contractor pays a reduced
price to a subcontractor for goods and services upon completion of the responsibilities of the subcontractor or the
payment to a subcontractor is more than 30 days past due
for goods or services provided for the covered contract for
which the Federal agency has paid the prime contractor.
(ii) CONTENTS.—A prime contractor shall include the
reason for the reduction in a payment to or failure to pay
a subcontractor in any notice made under clause (i).
(C) PERFORMANCE.—A contracting officer for a covered contract—
(i) shall consider the unjustified failure by a prime
contractor to make a full or timely payment to a subcontractor in evaluating the performance of the prime
contractor; and
(ii) may enter or modify past performance information of the prime contractor in connection with the
unjustified failure to make a full or timely payment to
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a subcontractor subject to this paragraph before or
after close-out of the covered contract.
(D) CONTROL OF FUNDS.—If the contracting officer for a
covered contract determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the identity of the contractor in accordance with the regulations promulgated under subparagraph (F).
(E) 64 COOPERATION.—
(i) IN GENERAL.—Once a contracting officer determines, with respect to the past performance of a prime
contractor, that there was an unjustified failure by the
prime contractor on a covered contract to make a full
or timely payment to a subcontractor covered by subparagraph (B) or (C), the prime contractor is required
to cooperate with the contracting officer, who shall
consult with the Director of Small Business Programs
or the Director of Small and Disadvantaged Business
Utilization acting pursuant to section 15(k)(6) and
other representatives of the Government, regarding
correcting and mitigating the unjustified failure to
make a full or timely payment to a subcontractor.
(ii) DURATION.—The duty of cooperation under
this subparagraph for a prime contractor described in
clause (i) continues until the subcontractor is made
whole or the determination of the contracting officer
determination is no longer effective, and regardless of
performance or close-out status of the covered contract.
(F) REGULATIONS.—Not later than 1 year after the date of
enactment of this paragraph, the Federal Acquisition Regulatory Council established under section 25(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 421(a)) shall amend
the Federal Acquisition Regulation issued under section 25 of
such Act to—
(i) describe the circumstances under which a contractor may be determined to have a history of unjustified,
untimely payments to subcontractors;
(ii) establish a process for contracting officers to record
the identity of a contractor described in clause (i); and
(iii) require the identity of a contractor described in
clause (i) to be incorporated in, and made publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor thereto.
(14) An offeror for a covered contract that intends to identify a small business concern as a potential subcontractor in a
bid or proposal for the contract, or in a plan submitted pursuant to this subsection in connection with the contract, shall notify the small business concern prior to making such identification.
(15) The Administrator shall establish a reporting mechanism that allows a subcontractor or potential subcontractor to
64 Margin

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report fraudulent activity or bad faith by a contractor with respect to a subcontracting plan submitted pursuant to this subsection.
(16) CREDIT FOR CERTAIN SMALL BUSINESS CONCERN SUBCONTRACTORS.—
(A) IN GENERAL.—For purposes of determining whether or not a prime contractor has attained the percentage
goals specified in paragraph (6)—
(i) if the subcontracting goals pertain only to a
single contract with a Federal agency, the prime contractor may elect to receive credit for small business
concerns performing as first tier subcontractors or
subcontractors at any tier pursuant to the subcontracting plans required under paragraph (6)(D) in an
amount equal to the total dollar value of any subcontracts awarded to such small business concerns;
and
(ii) if the subcontracting goals pertain to more
than one contract with one or more Federal agencies,
or to one contract with more than one Federal agency,
the prime contractor may only receive credit for first
tier subcontractors that are small business concerns.
(B) COLLECTION AND REVIEW OF DATA ON SUBCONTRACTING PLANS.—The head of each contracting agency
shall ensure that the agency—
(i) collects and reports data on the extent to which
prime contractors of the agency meet the goals and objectives set forth in subcontracting plans submitted
pursuant to this subsection; and
(ii) periodically reviews data collected and reported pursuant to clause (i) for the purpose of ensuring that such contractors comply in good faith with the
requirements of this subsection.
(C) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed to allow a Federal agency to establish a goal for an number of subcontracts with a subcontractor at any tier for a prime contractor otherwise eligible to receive credit under this paragraph.
(17) PAST PERFORMANCE RATINGS FOR CERTAIN SMALL BUSINESS SUBCONTRACTORS.—Upon request by a small business
concern that performed as a first tier subcontractor on a covered contract (as defined in paragraph (13)(A)), the prime contractor for such covered contract shall submit to such small
business concern a record of past performance for such small
business concern with respect to such covered contract. If a
small business concern elects to use such record of past performance, a contracting officer shall consider such record of
past performance when evaluating an offer for a prime contract
made by such small business concern.
(e)(1) Except as provided in subsection (g)—
(A) an executive agency intending to—
(i) solicit bids or proposals for a contract for property
or services for a price expected to exceed $25,000; or
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(ii) place an order, expected to exceed $25,000, under
a basic agreement, basis ordering agreement, or similar arrangement,
shall publish a notice described in subsection (f);
(B) an executive agency intending to solicit bids or proposals for a contract for property or services shall post, for a
period of not less than ten days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in subsection (f)—
(i) in the case of an executive agency other than the
Department of Defense, if the contract is for a price expected to exceed $10,000, but not to exceed $25,000; and
(ii) in the case of the Department of Defense, if the
contract is for a price expected to exceed $5,000, but not
to exceed $25,000; and
(C) an executive agency awarding a contract for property
or services for a price exceeding $100,000, or placing an order
referred to in clause (A)(ii) exceeding $100,000, shall furnish
for publication by the Secretary of Commerce a notice announcing the award or order if there is likely to be any subcontract
under such contract or order.
(2)(A) A notice of solicitation required to be published under
paragraph (1) may be published—
(i) by electronic means that meet the accessibility requirements under section 18(a)(7) of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(7)); or
(ii) by the Secretary of Commerce in the Commerce Business Daily.
(B) The Secretary of Commerce shall promptly publish in the
Commerce Business Daily each notice or announcement received
under this subsection for publication by that means.
(3) Whenever an executive agency is required by paragraph
(1)(A) to publish a notice of solicitation, such executive agency may
not—
(A) issue the solicitation earlier than 15 days after the
date on which the notice is published; or
(B) in the case of a contract or order estimated to be greater than the simplified acquisition threshold, establish a deadline for the submission of all bids or proposals in response to
the notice required by paragraph (1)(A) that—
(i) in the case of an order under a basic agreement,
basic ordering agreement, or similar arrangement, is earlier than the date 30 days after the date the notice required by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and development, is earlier than the date 45 days after the date the
notice required by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the date 30 days
after the date the solicitation is issued.
(f) Each notice of solicitation required by subparagraph (A) or
(B) of subsection (e)(1) shall include—
(1) an accurate description of the property or services to be
contracted for, which description (A) shall not be unnecessarily
restrictive of competition, and (B) shall include, as appropriate,
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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
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(ii) a proposal submitted under section 9 of this Act;
(D) the procurement is made against an order placed
under a requirements contract;
(E) the procurement is made for perishable subsistence
supplies;
(F) the procurement is for utility services, other than telecommunication services, and only one source is available; or
(G) the procurement is for the services of an expert for use
in any litigation or dispute (including preparation for any foreseeable litigation or dispute) that involves or could involve the
Federal Government in any trial, hearing, or proceeding before
any court, administrative tribunal, or agency, or in any part of
an alternative dispute resolution process, whether or not the
expert is expected to testify.
(2) The requirements of subsection (a)(1)(A) do not apply to any
procurement under conditions described in paragraph (2), (3), (4),
(5), or (7) of section 303(c) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or paragraph (2), (3),
(4), (5), and (7) of section 3204(a) of title 10, United States Code.
(3) The requirements of subsection (a)(1)(A) shall not apply in
the case of any procurement for which the head of the executive
agency makes a determination in writing, after consultation with
the Administrator for Federal Procurement Policy and the Administrator of the Small Business Administration, that it is not appropriate or reasonable to publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using procedures other than competitive procedures unless—
(A) except as provided in paragraph (2), a written justification for the use of such procedures has been approved—
(i) in the case of a contract for an amount exceeding
$100,000 (but equal to or less than $1,000,000), by the advocate for competition for the procuring activity (without
further delegation);
(ii) in the case of a contract for an amount exceeding
$1,000,000 (but equal to or less than $10,000,000), by the
head of the procuring activity or a delegate who, if a member of the Armed Forces, is a general or flag officer, or, if
a civilian, is serving in a position in grade GS–16 or above
under the General Schedule (or in a comparable or higher
position under another schedule); or
(iii) in the case of a contract for an amount exceeding
$10,000,000, by the senior procurement executive of the
agency designated pursuant to section 16(3) of the Office
of Federal Procurement Policy Act (41 U.S.C. 414(3)) (without further delegation); and
(B) all other requirements applicable to the use of such
procedures under title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et sq.) or sections
3201 through 3205 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 paragraphs (3) and (4) of section 3204(e) of title
10, United States Code, shall apply with respect to the requireFebruary 1, 2024

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ments 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 paragraphs (3) and (4) of section 3204(e) of such title,
as appropriate.
(i) An executive agency shall make available to any business
concern, or the authorized representative of such concern, the complete solicitation package for any on-going procurement announced
pursuant to a notice under subsection (e). An executive agency may
require the payment of a fee, not exceeding the actual cost of duplication, for a copy of such package.
(j) For purposes of this section, the term ‘‘executive agency’’ has
the meaning provided such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).
(k) NOTICES OF SUBCONTRACTING OPPORTUNITIES.—
(1) IN GENERAL.—Notices of subcontracting opportunities
may be submitted for publication on the appropriate Federal
Web site (as determined by the Administrator) by—
(A) a business concern awarded a contract by an executive agency subject to subsection (e)(1)(C); and
(B) a business concern that is a subcontractor or supplier (at any tier) to such contractor having a subcontracting opportunity in excess of $10,000.
(2) CONTENT OF NOTICE.—The notice of a subcontracting
opportunity shall include—
(A) a description of the business opportunity that is
comparable to the description specified in paragraphs (1),
(2), (3), and (4) of subsection (f); and
(B) the due date for receipt of offers.
(l) MANAGEMENT ASSISTANCE FOR SMALL BUSINESSES AFFECTED BY MILITARY OPERATIONS.—
(1) IN GENERAL.—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.
(2) DEFINITION OF PERIOD OF MILITARY CONFLICT.—In this
subsection, the term ‘‘period of military conflict’’ means—
(A) a period of war declared by the Congress;
(B) a period of national emergency declared by the
Congress or by the President; or
(C) a period of a contingency operation, as defined in
section 101(a) of title 10, United States Code.
(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
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owned and controlled by women’’ has the meaning given
such term in section 3(n), except that ownership shall be
determined without regard to any community property
law.
(2) AUTHORITY TO RESTRICT COMPETITION.—In accordance
with this subsection, a contracting officer may restrict competition for any contract for the procurement of goods or services
by the Federal Government to small business concerns owned
and controlled by women, if—
(A) each of the concerns is not less than 51 percent
owned by one or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law);
(B) the contracting officer has a reasonable expectation that two or more small business concerns owned and
controlled by women will submit offers for the contract;
(C) the contract is for the procurement of goods or
services with respect to an industry identified by the Administrator pursuant to paragraph (3);
(D) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price;
and
(E) each of the concerns is certified by a Federal agency, a State government, the Administrator, or a national
certifying entity approved by the Administrator as a small
business concern owned and controlled by women.
(3) WAIVER.—With respect to a small business concern
owned and controlled by women, the Administrator may waive
subparagraph (2)(A) if the Administrator determines that the
concern is in an industry in which small business concerns
owned and controlled by women are substantially underrepresented.
(4) IDENTIFICATION OF INDUSTRIES.—The Administrator
shall conduct a study to identify industries in which small
business concerns owned and controlled by women are underrepresented with respect to Federal procurement contracting.
(5) ENFORCEMENT; PENALTIES.—
(A) VERIFICATION OF ELIGIBILITY.—In carrying out this
subsection, the Administrator shall establish procedures
relating to—
(i) the filing, investigation, and disposition by the
Administration of any challenge to the eligibility of a
small business concern to receive assistance under this
subsection (including a challenge, filed by an interested party, relating to the veracity of a certification
made or information provided to the Administration
by a small business concern under paragraph (2)(E));
and
(ii) verification by the Administrator of the accuracy of any certification made or information provided
to the Administration by a small business concern
under paragraph (2)(E).
(B) EXAMINATIONS.—The procedures established under
subparagraph (A) may provide for program examinations
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(including random program examinations) by the Administrator of any small business concern making a certification
or providing information to the Administrator under paragraph (2)(E).
(C) PENALTIES.—In addition to the penalties described
in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the
status of that concern as a small business concern owned
and controlled by women for purposes of this subsection,
shall be subject to—
(i) section 1001 of title 18, United States Code;
and
(ii) sections 3729 through 3733 of title 31, United
States Code.
(6) PROVISION OF DATA.—Upon the request of the Administrator, the head of any Federal department or agency shall
promptly provide to the Administrator such information as the
Administrator determines to be necessary to carry out this subsection.
(7) AUTHORITY FOR SOLE SOURCE CONTRACTS FOR ECONOMICALLY DISADVANTAGED SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY WOMEN.—A contracting officer may award a

sole source contract under this subsection to any small business concern owned and controlled by women described in
paragraph (2)(A) and certified under paragraph (2)(E) if—
(A) such concern is determined to be a responsible contractor with respect to performance of the contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more businesses described in
paragraph (2)(A) will submit offers;
(B) the anticipated award price of the contract (including options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity assigned a standard industrial classification
code for manufacturing; or
(ii) $4,000,000, in the case of any other contract
opportunity; and
(C) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
(8) AUTHORITY FOR SOLE SOURCE CONTRACTS FOR SMALL
BUSINESS CONCERNS OWNED AND CONTROLLED BY WOMEN IN
SUBSTANTIALLY
UNDERREPRESENTED
INDUSTRIES.—A
con-

tracting officer may award a sole source contract under this
subsection to any small business concern owned and controlled
by women certified under paragraph (2)(E) that is in an industry in which small business concerns owned and controlled by
women are substantially underrepresented (as determined by
the Administrator under paragraph (3)) if—
(A) such concern is determined to be a responsible contractor with respect to performance of the contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more businesses in an industry
that has received a waiver under paragraph (3) will submit offers;
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(B) the anticipated award price of the contract (including options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity assigned a standard industrial classification
code for manufacturing; or
(ii) $4,000,000, in the case of any other contract
opportunity; and
(C) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
(n) BUSINESS GRANTS AND COOPERATIVE AGREEMENTS.—
(1) IN GENERAL.—In accordance with this subsection, the
Administrator may make grants to and enter into cooperative
agreements with any coalition of private entities, public entities, or any combination of private and public entities—
(A) to expand business-to-business relationships between large and small businesses; and
(B) to provide businesses, directly or indirectly, with
online information and a database of companies that are
interested in mentor-protege programs or communitybased, statewide, or local business development programs.
(2) MATCHING REQUIREMENT.—Subject to subparagraph
(B), the Administrator may make a grant to a coalition under
paragraph (1) only if the coalition provides for activities described in paragraph (1)(A) or (1)(B) an amount, either in kind
or in cash, equal to the grant amount.
(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $6,600,000,
to remain available until expended, for each of fiscal years
2001 through 2006.
SEC. 9. ø15 U.S.C. 638¿ (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—
(1) to assist small-business concerns to obtain Government
contracts for research and development;
(2) to assist small-business concerns to obtain the benefits
of research and development performed under Government
contracts or at Government expense;
(3) to provide technical assistance to small-business concerns to accomplish the purposes of this section;
(4) to develop and maintain a source file and an information program to assure each qualified and interested small
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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 business’ opportunities to respond to solicitations;
(6) to independently survey and monitor the operation of
SBIR and STTR programs within participating Federal agencies;
(7) to report not less than annually to the Committee on
Small Business of the Senate, and to the Committee on Science
and the Committee on Small Business of the House of Representatives, on the SBIR and STTR programs of the Federal
agencies and the Administration’s information and monitoring
efforts related to the SBIR and STTR programs, including—
(A) the data on output and outcomes collected pursuant to subsections (g)(8) and (o)(9);
(B) the number of proposals received from, and the
number and total amount of awards to, HUBZone small
business concerns and firms with venture capital, hedge
fund, or private equity firm investment (including those
majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of
the SBIR and STTR programs;
(C) a description of the extent to which each Federal
agency is increasing outreach and awards to firms owned
and controlled by women or by socially or economically disadvantaged individuals under each of the SBIR and STTR
programs;
(D) general information about the implementation of,
and compliance with the allocation of funds required
under, subsection (dd) for firms owned in majority part by
venture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;
(E) a detailed description of appeals of Phase III
awards and notices of noncompliance with the SBIR Policy
Directive and the STTR Policy Directive filed by the Administrator with Federal agencies;
(F) an accounting of funds, initiatives, and outcomes
under the Commercialization Readiness Program;
(G) a descriptionof the extent to which Federal agencies are providing in a timely manner information needed
to maintain the database described in subsection (k);
(H) with respect to a Federal agency to which subsection (f)(1) or (n)(1) applies, whether the Federal agency
has complied with the applicable subsection for the year
covered by the report;
(I) the number of applications submitted to each Federal agency participating in the SBIR or STTR program in
innovation open topics as compared to conventional topics,
and how many small business concerns receive funding
from open topics compared to conventional topics;
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(J) the total number and dollar amount, and average
size, of awards made by each Federal agency participating
in the SBIR or STTR program, by phase, from—
(i) open topics; and
(ii) conventional topics;
(K) the minimum performance standards established
under subsection (qq), including any applicable modifications under paragraph (3) of such subsection, and the
number of small business concerns that did not meet those
minimum performance standards, provided that the Administrator does not publish any personally identifiable information, the identity of each such small business concern, or any otherwise sensitive information; and
(L) the aggregate number and dollar amount of SBIR
and STTR awards made pursuant to waivers under subsection (qq)(3)(E), provided that the Administrator does
not publish any personally identifiable information, the
identity of each such small business concern, or any otherwise sensitive information;
(8) to provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(9) to coordinate the implementation of electronic databases at each of the Federal agencies participating in the SBIR
program or the STTR program, including the technical ability
of the participating agencies to electronically share data; and
(10) to consult, where appropriate, with personnel from the
relevant Federal agency to assist small business concerns participating in a SBIR or STTR program with commercializing
research developed under such a program before such small
business concern is awarded a contract from such Federal
agency.
(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)(1) 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
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(F) to negotiate and grant licenses under patents held
under the point 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 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, and except
that for the Department of Energy it shall not include amounts
obligated for atomic energy defense programs for weapons and
weapons-related activities or for naval reactor programs 65;
(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 ex65 Amendment made by section 103(c) of the Small Business Research and Development Enhancement Act of 1992 is unexecutable. This is probably a result of an amendment made by
P.L. 102–484 which added text similar to this unexecutable amendment.

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perimental, 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, which shall not include any invitation, pre-screening, or pre-selection process for eligibility
for Phase II, that will further develop proposals which
meet particular program needs, in which awards shall be
made based on the scientific and technical merit and 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 for work that derives from, extends, or completes efforts made under prior
funding agreements under the SBIR program—
(i) in which commercial applications of SBIR-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 merit-based selection procedures;
(5) the term ‘‘research’’ or ‘‘research and development’’
means any activity which is (A) a systematic, intensive study
directed toward greater knowledge or understanding of the
subject studied; (B) a systematic study directed specifically 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
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opment effort is reserved for award to small business concerns
for cooperative research and development through a uniform
process having—
(A) a first phase, to determine, to the extent possible,
the scientific, technical, and commercial merit and feasibility of ideas submitted pursuant to STTR program solicitations;
(B) a second phase, which shall not include any invitation, pre-screening, or pre-selection process for eligibility
for Phase II, that will further develop proposals that meet
particular program needs, in which awards shall be made
based on the scientific, technical, and commercial merit
and feasibility of the idea, as evidenced by the first phase
and by other relevant information; and
(C) where appropriate, a third phase for work that derives from, extends, or completes efforts made under prior
funding agreements under the STTR program—
(i) in which commercial applications of STTRfunded 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;
(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);
(9) the term ‘‘commercial applications’’ shall not be construed to exclude testing and evaluation of products, services,
or technologies for use in technical or weapons systems, and
further, awards for testing and evaluation of products, services,
or technologies for use in technical or weapons systems may be
made in either Phase II or Phase III of the Small Business Innovation Research Program and of the Small Business Technology Transfer Program, as defined in this subsection;
(10) the term ‘‘commercialization’’ means—
(A) the process of developing products, processes, technologies, or services; and
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(B) the production and delivery (whether by the originating party or by others) of products, processes, technologies, or services for sale to or use by the Federal Government or commercial markets;
(11) the term ‘‘Phase I’’ means—
(A) with respect to the SBIR program, the first phase
described in paragraph (4)(A); and
(B) with respect to the STTR program, the first phase
described in paragraph (6)(A);
(12) the term ‘‘Phase II’’ means—
(A) with respect to the SBIR program, the second
phase described in paragraph (4)(B); and
(B) with respect to the STTR program, the second
phase described in paragraph (6)(B);
(13) the term ‘‘Phase III’’ means—
(A) with respect to the SBIR program, the third phase
described in paragraph (4)(C); and
(B) with respect to the STTR program, the third phase
described in paragraph (6)(C);
(14) the term ‘‘senior procurement executive’’ means an official designated under section 1702(c) of title 41, United
States Code, as the senior procurement executive of a Federal
agency participating in a SBIR or STTR program;
(15) the term ‘‘covered individual’’ means an individual
who—
(A) contributes in a substantive, meaningful way to
the scientific development or execution of a research and
development project proposed to be carried out with a research and development award from a Federal research
agency; and
(B) is designated as a covered individual by the Federal research agency concerned;
(16) the term ‘‘foreign affiliation’’ means a funded or unfunded academic, professional, or institutional appointment or
position with a foreign government or government-owned entity, whether full-time, part-time, or voluntary (including adjunct, visiting, or honorary);
(17) the term ‘‘foreign country of concern’’ means the People’s Republic of China, the Democratic People’s Republic of
Korea, the Russian Federation, the Islamic Republic of Iran, or
any other country determined to be a country of concern by the
Secretary of State;
(18) the term ‘‘malign foreign talent recruitment program’’
has the meaning given such term in section 10638 of the Research and Development, Competition, and Innovation Act (division B of Public Law 117–167); and
(19) the term ‘‘federally funded award’’ means a Phase I,
Phase II (including a Phase II award under subsection (cc)), or
Phase III SBIR or STTR award made using a funding agreement.
(f) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.—
(1) REQUIRED EXPENDITURE AMOUNTS.—Except as provided
in paragraph (2)(B), each Federal agency which has an extramural budget for research or research and development in exFebruary 1, 2024

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cess of $100,000,000 for fiscal year 1992, or any fiscal year
thereafter, shall expend with small business concerns—
(A) not less than 1.5 percent of such budget in each of
fiscal years 1993 and 1994;
(B) not less than 2.0 percent of such budget in each of
fiscal years 1995 and 1996;
(C) not less than 2.5 percent of such budget in each of
fiscal years 1997 through 2011;
(D) not less than 2.6 percent of such budget in fiscal
year 2012;
(E) not less than 2.7 percent of such budget in fiscal
year 2013;
(F) not less than 2.8 percent of such budget in fiscal
year 2014;
(G) not less than 2.9 percent of such budget in fiscal
year 2015;
(H) not less than 3.0 percent of such budget in fiscal
year 2016; and
(I) not less than 3.2 percent of such budget in fiscal
year 2017 and each fiscal year thereafter,
specifically in connection with SBIR programs which meet the
requirements of this section, policy directives, and regulations
issued under this section.
(2) 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).
(4) RULE OF CONSTRUCTION.—Nothing in this subsection
may be construed to prohibit a Federal agency from expending
with small business concerns an amount of the extramural
budget for research or research and development of the agency
that exceeds the amount required under paragraph (1).
(g) Each Federal agency required by subsection (f) to establish
a small business innovation research program shall, in accordance
with this Act and regulations issued hereunder—
(1) unilaterally determine categories of projects to be in its
SBIR program;
(2) issue small business innovation research solicitations
in accordance with a schedule determined cooperatively with
the Small Business Administration;
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search 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)(A) unilaterally receive and evaluate proposals resulting
from SBIR proposals; and
(B) make a final decision on each proposal submitted
under the SBIR program—
(i) not later than 1 year after the date on which the
applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating
agency; or
(ii) if the Administrator authorizes an extension with
respect to a solicitation, not later than 90 days after the
date that would otherwise be applicable to the agency
under clause (i);
(5) subject to subsection (l), unilaterally select awardees
for the SBIR funding agreements and inform each awardee
under such an agreement, to the extent possible, of the 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) collect annually, and maintain in a common format in
accordance with the simplified reporting requirements under
subsection (v), such information from awardees as is necessary
to assess the SBIR program, including information necessary
to maintain the database described in subsection (k), including—
(A) whether an awardee—
(i) has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple
venture capital operating companies, hedge funds, or
private equity firms and, if so—
(I) the amount of venture capital, hedge fund,
or private equity firm investment that the awardee has received as of the date of the award; and
(II) the amount of additional capital that the
awardee has invested in the SBIR technology;
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(ii) has an investor that—
(I) is an individual who is not a citizen of the
United States or a lawful permanent resident of
the United States and, if so, the name of any such
individual; or
(II) is a person that is not an individual and
is not organized under the laws of a State or the
United States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a
principal investigator;
(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;
(v) is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001); or
(vi) is located in a State described in subsection
(u)(3);
(B) a justification statement from the agency, if an
awardee receives an award in an amount that is more
than the award guidelines under this section; and
(C) data with respect to the Federal and State Technology Partnership Program (FAST Program);
(9) make an annual report on the SBIR program to the
Small Business Administration and the Office of Science and
Technology Policy;
(10) include, as part of its annual performance plan as required by subsections (a) and (b) of section 1115 of title 31,
United States Code, a section on its SBIR program, which section shall describe whether or not the Federal agency complied
with the requirements of subsection (f) for the year covered by
that plan and include a justification for failure to comply (if applicable),, 66 and shall submit such section to the Committee on
Small Business of the Senate, and the Committee on Science
and the Committee on Small Business of the House of Representatives;
(11) provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(12) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative tribunal concerning the SBIR program of the Federal agency;
(13) require each small business concern submitting a proposal or application for a federally funded award to disclose in
the proposal or application—
(A) the identity of all owners and covered individuals
of the small business concern who are a party to any foreign talent recruitment program of any foreign country of
concern, including the People’s Republic of China;
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(B) the existence of any joint venture or subsidiary of
the small business concern that is based in, funded by, or
has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(C) any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise
owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly
owned in the People’s Republic of China or another foreign
country;
(E) the percentage, if any, of venture capital or institutional investment by an entity that has a general partner
or individual holding a leadership role in such entity who
has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People’s
Republic of China, during the 5-year period preceding submission of the proposal; and
(G) any foreign business entity, offshore entity, or entity outside the United States related to the small business
concern;
(14) after reviewing the disclosures of a small business
concern under paragraph (13), and if determined appropriate
by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect
during the 5-year period preceding submission of the proposal
with respect to which such small business concern made such
disclosures;
(15) not make an award under the SBIR program of the
Federal agency to a small business concern if the head of the
Federal agency determines that—
(A) the small business concern submitting the proposal
or application—
(i) has an owner or covered individual that is
party to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or subsidiary located in the People’s Republic of China or another foreign country of concern; or
(iii) has an owner or covered individual that has
a foreign affiliation with a research institution located
in the People’s Republic of China or another foreign
country of concern; and
(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities supported by the Federal agency to be carried out;
(ii) create duplication with activities supported by
the Federal agency;
(iii) present concerns about conflicts of interest;
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(iv) were not appropriately disclosed to the Federal agency;
(v) violate Federal law or terms and conditions of
the Federal agency; or
(vi) pose a risk to national security;
(16) require a small business concern receiving an award
under its SBIR program to repay all amounts received from
the Federal agency under the award if—
(A) the small business concern makes a material
misstatement that the Federal agency determines poses a
risk to national security; or
(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency determines poses a risk to national security; and
(17) require a small business concern receiving an award
under its SBIR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on—
(A) any change to a disclosure required under subparagraphs (A) through (G) of paragraph (13);
(B) any material misstatement made under paragraph
(16)(A); and
(C) any change described in paragraph (16)(B).
(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 (including awards under subsection (y)) pursuant
to grants, contracts, or cooperative agreements over $10,000 in
amount and the dollar value of all such awards, identifying
SBIR awards and comparing the number and amount of such
awards with awards to other than small business concerns.
(2) CALCULATION OF EXTRAMURAL BUDGET.—
(A) METHODOLOGY.—Not later than 4 months after the
date of the enactment of each appropriations Act for a 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
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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 II 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) 67 MODIFICATIONS.—Not later than 90 days after the
date of 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;
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(B) continued use by a small business concern participating in Phase III of the SBIR program, as a directed
bailment, of any property transferred by a Federal agency
to the small business concern in Phase II of an SBIR program for a period of not less than 2 years, beginning on
the initial date of the concern’s participation in Phase III
of such program;
(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 $150,000 in the amount of funds
which an agency may award in Phase I of an SBIR program, and to $1,000,000 in Phase II of an SBIR program,
and an adjustment of such amounts every year for inflation;
(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 Phase III of such programs, and
the collection of data to document such participation;
(G) technical and programmatic guidance to encourage
agencies to develop gap-funding programs to address the
delay between an award for Phase I of an SBIR program
and the application for and extension of an award for
Phase II of such program;
(H) procedures to ensure that a small business concern
that submits a proposal for a funding agreement for Phase
I of an SBIR program and that has received more than 15
Phase II SBIR awards during the preceding 5 fiscal years
is able to demonstrate the extent to which it was able to
secure Phase III funding to develop concepts resulting
from previous Phase II SBIR awards; and
(I) procedures to ensure that agencies participating in
the SBIR program retain the information submitted under
subparagraph (H) at least until the General Accounting
Office submits the report required under section 105 of the
Small Business Research and Development Enhancement
Act of 1992.
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(3) 68 ADDITIONAL MODIFICATIONS.—Not later than 120
days after the date of the 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 Phase I, Phase II, and Phase III;
(B) to provide for the requirement of a succinct commercialization plan with each application for a Phase II
award that is moving toward commercialization;
(C) to require agencies to report to the Administration,
not less frequently than annually, all instances in which
an agency pursued research, development, or production of
a technology developed by a small business concern using
an award made under the SBIR program of that agency,
and determined that it was not practicable to enter into a
follow-on non-SBIR program funding agreement with the
small business concern, which report shall include, at a
minimum—
(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).
(4) MODIFICATIONS RELATING TO PROCUREMENT CENTER
REPRESENTATIVES.—Upon the enactment of this paragraph, the
Administrator shall modify the policy directives issued pursuant to this subsection to require procurement center representatives (as described in section 15(l)) to consult with the appropriate personnel from the relevant Federal agency, to assist
small business concerns participating in the SBIR program,
particularly in Phase III.
(k) DATABASE.—
(1) PUBLIC DATABASE.—Not later than 180 days after the
date of the 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 Phase I or Phase II SBIR or
STTR award from a Federal agency;
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(B) a description of each Phase I or Phase II 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;
(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; and
(F) for each small business concern that has received
a Phase I or Phase II SBIR or STTR award from a Federal
agency, whether the small business concern—
(i) has venture capital, hedge fund, or private equity firm investment and, if so, whether the small
business concern is registered as majority-owned by
multiple venture capital operating companies, hedge
funds, or private equity firms as required under subsection (dd)(3);
(ii) is owned by a woman or has a woman as a
principal investigator;
(iii) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;
(iv) is owned by a faculty member or a student of
an institution of higher education, as that term is defined in section 101 of the Higher Education Act of
1965 (20 U.S.C. 1001); or
(v) received assistance under the Federal and
State Technology Partnership Program (FAST Program).
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(2) GOVERNMENT DATABASE.—Not later than 90 days after
the date of enactment of the SBIR/STTR Reauthorization Act
of 2011, the Administrator, in consultation with Federal agencies required to have an SBIR program pursuant to subsection
(f)(1) or an STTR program pursuant to subsection (n)(1), shall
develop and maintain a database to be used exclusively for
SBIR and STTR program evaluation that—
(A) contains for each small business concern that applies for, submits a proposal for, or receives an award
under Phase I or Phase II of the SBIR program or the
STTR program—
(i) the name, size, and location of, and the identifying number assigned by the Administration to, the
small business concern;
(ii) an abstract of the applicable project;
(iii) the specific aims of the project;
(iv) the number of employees of the small business
concern;
(v) the names and titles of the key individuals
that will carry out the project, the position each key
individual holds in the small business concern, and
contact information for each key individual;
(vi) the percentage of effort each individual described in clause (v) will contribute to the project;
(vii) whether the small business concern is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and
(viii) the Federal agency to which the application
is made and contact information for the person or office within the Federal agency that is responsible for
reviewing applications and making awards under the
SBIR program or the STTR program;
(B) contains for each Phase II 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 Phase I or Phase II SBIR or STTR awards,
to further the research and development conducted
under the award; and
(iii) any other information received in connection
with the award that the Administrator, in conjunction
with the SBIR and STTR program managers of Federal agencies, considers relevant and appropriate;
(C) includes any narrative information that a small
business concern receiving a Phase II award voluntarily
submits to further describe the outputs and outcomes of its
awards;
(D) includes, for each awardee—
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(i) the name, size, and location of, and any identifying number assigned by the Administrator to, the
awardee;
(ii) whether the awardee has venture capital,
hedge fund, or private equity firm investment and, if
so—
(I) the amount of venture capital, hedge fund,
or private equity firm investment as of the date of
the award;
(II) the percentage of ownership of the awardee held by a venture capital operating company,
hedge fund, or private equity firm, including
whether the awardee is majority-owned by multiple venture capital operating companies, hedge
funds, or private equity firms; and
(III) the amount of additional capital that the
awardee has invested in the SBIR or STTR technology, which information shall be collected on an
annual basis;
(iii) the names and locations of any affiliates of
the awardee;
(iv) the number of employees of the awardee;
(v) the number of employees of the affiliates of the
awardee; and
(vi) the names of, and the percentage of ownership
of the awardee held by—
(I) any individual who is not a citizen of the
United States or a lawful permanent resident of
the United States; or
(II) any person that is not an individual and
is not organized under the laws of a State or the
United States;
(E) includes any other data collected by or available to
any Federal agency that such agency considers may be
useful for SBIR or STTR program evaluation;
(F) is available for use solely for program evaluation
purposes by the Federal Government or, in accordance
with policy directives issued by the Administration, by
other authorized persons who are subject to a use and nondisclosure agreement with the Federal Government covering the use of the database; and
(G) includes a timely and accurate list of any individual or small business concern that has participated in
the SBIR program or STTR program that has been—
(i) convicted of a fraud-related crime involving
funding received under the SBIR program or STTR
program; or
(ii) found civilly liable for a fraud-related violation
involving funding received under the SBIR program or
STTR program.
(3) UPDATING INFORMATION FOR DATABASE.—
(A) IN GENERAL.—A small business concern applying
for a Phase II award under this section shall be required
to update information in the database established under
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this subsection for any prior Phase II 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
Phase II award among those awards, if it notes the apportionment for each award.
(B) ANNUAL UPDATES UPON TERMINATION.—A small
business concern receiving a Phase II award under this
section shall—
(i) update information in the database concerning
that award at the termination of the award period;
and
(ii) be requested to voluntarily update such information annually thereafter for a period of 5 years.
(C) GOVERNMENT DATABASE.—Not later than 60 days
after the date established by a Federal agency for submitting applications or proposals for a Phase I or Phase II
award under the SBIR program or STTR program, the
head of the Federal agency shall submit to the Administrator the data required under paragraph (2) with respect
to each small business concern that applies or submits a
proposal for the Phase I or Phase II award.
(4) PROTECTION OF INFORMATION.—Information provided
under paragraph (2) shall be considered privileged and confidential and not subject to disclosure pursuant to section 552
of title 5, United States Code.
(5) RULE OF CONSTRUCTION.—Inclusion of information in
the database under this subsection shall not be considered to
be publication for purposes of subsection (a) or (b) of section
102 of title 35, United States Code.
(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 Phase I of an SBIR program during the reporting period to entities that have received more than 15 awards for the
Phase II of an SBIR program during the preceding 5 fiscal
years.
(3) CRITICAL TECHNOLOGY AWARDS.—An agency referred to
in paragraph (1) shall include in its next annual report 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 dolFebruary 1, 2024

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lar amount of the agency’s total SBIR awards to such critical
technology topics.
(m) TERMINATION.—The authorization to carry out the Small
Business Innovation Research Program established under this section shall terminate on September 30, 2025.
(n) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGENCIES.—
(1) REQUIRED EXPENDITURE AMOUNTS.—
(A) IN GENERAL.—With respect to each fiscal year
through fiscal year 2025, 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;
(ii) 0.3 percent for each of fiscal years 2004
through 2011;
(iii) 0.35 percent for each of fiscal years 2012 and
2013;
(iv) 0.40 percent for each of fiscal years 2014 and
2015; and
(v) 0.45 percent for fiscal year 2016 and each 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).
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(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)(A) unilaterally receive and evaluate proposals resulting
from STTR solicitations; and
(B) make a final decision on each proposal submitted
under the STTR program—
(i) not later than 1 year after the date on which the
applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating
agency; or
(ii) if the Administrator authorizes an extension for a
solicitation, not later than 90 days after the date that
would be applicable to the agency under clause (i);
(5) unilaterally select awardees for its STTR funding
agreements and inform each awardee under such an 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, which section shall describe whether or not the Federal agency complied
with the requirements of subsection (n) for the year covered by
that plan and include a justification for failure to comply (if applicable),, 69 and shall submit such section to the Committee on
Small Business of the Senate, and the Committee on Science
69 Double

commas are so in law.

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and the Committee on Small Business of the House of Representatives;
(9) collect annually, and maintain in a common format in
accordance with the simplified reporting requirements under
subsection (v), such information from applicants and awardees
as is necessary to assess the STTR program outputs and outcomes, including information necessary to maintain the database described in subsection (k), including—
(A) whether an applicant or awardee—
(i) has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple
venture capital operating companies, hedge funds, or
private equity firms and, if so—
(I) the amount of venture capital, hedge fund,
or private equity firm investment that the applicant or awardee has received as of the date of the
application or award, as applicable; and
(II) the amount of additional capital that the
applicant or awardee has invested in the STTR
technology;
(ii) has an investor that—
(I) is an individual who is not a citizen of the
United States or a lawful permanent resident of
the United States and, if so, the name of any such
individual; or
(II) is a person that is not an individual and
is not organized under the laws of a State or the
United States and, if so, the name of any such
person;
(iii) is owned by a woman or has a woman as a
principal investigator;
(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;
(v) is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001); or
(vi) is located in a State in which the total value
of contracts awarded to small business concerns under
all STTR programs is less than the total value of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal
year 2008, based on the most recent statistics compiled by the Administrator;
(B) if an awardee receives an award in an amount that
is more than the award guidelines under this section, a
statement from the agency that justifies the award
amount; and
(C) data with respect to the Federal and State Technology Partnership Program (FAST Program);
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(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;
(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 Phase II funding commitments
from private sector or non-STTR funding sources;
(C) the existence of Phase III follow-on commitments
for the subject of the research; and
(D) the presence of other indicators of the commercial
potential of the idea;
(14) implement an outreach program to research 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;
(15) provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(16) provide timely notice to the Administrator of any case
or controversy before any Federal judicial or administrative tribunal concerning the STTR program of the Federal agency;
(17) require each small business concern submitting a proposal or application for a federally funded award to disclose in
the proposal or application—
(A) the identity of all owners and covered individuals
of the small business concern who are a party to any foreign talent recruitment program of any foreign country of
concern, including the People’s Republic of China;
(B) the existence of any joint venture or subsidiary of
the small business concern that is based in, funded by, or
has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
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ment, or joint venture-like arrangement with an enterprise
owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly
owned in the People’s Republic of China or another foreign
country;
(E) the percentage, if any, of venture capital or institutional investment by an entity that has a general partner
or individual holding a leadership role in such entity who
has a foreign affiliation with any foreign country of concern, including the People’s Republic of China;
(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People’s
Republic of China, during the 5-year period preceding submission of the proposal; and
(G) any foreign business entity, offshore entity, or entity outside the United States related to the small business
concern;
(18) after reviewing the disclosures of a small business
concern under paragraph (17), and if determined appropriate
by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect
during the 5-year period preceding submission of the proposal
with respect to which such small business concern made such
disclosures;
(19) not make an award under the STTR program of the
Federal agency to a small business concern if the head of the
Federal agency determines that—
(A) the small business concern submitting the proposal
or application—
(i) has an owner or covered individual that is
party to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or subsidiary located in the People’s Republic of China or another foreign country of concern; or
(iii) has an owner or covered individual that has
a foreign affiliation with a research institution located
in the People’s Republic of China or another foreign
country of concern; and
(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities supported by the Federal agency to be carried out;
(ii) create duplication with activities supported by
the Federal agency;
(iii) present concerns about conflicts of interest;
(iv) were not appropriately disclosed to the Federal agency;
(v) violate Federal law or terms and conditions of
the Federal agency; or
(vi) pose a risk to national security;
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(20) require a small business concern receiving an award
under its STTR program to repay all amounts received from
the Federal agency under the award if—
(A) the small business concern makes a material
misstatement that the Federal agency determines poses a
risk to national security; or
(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency determines poses a risk to national security; and
(21) require a small business concern receiving an award
under its STTR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on—
(A) any change to a disclosure required under subparagraphs (A) through (G) of paragraph (17);
(B) any material misstatement made under paragraph
(20)(A); and
(C) any change described in paragraph (20)(B).
(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 United States Patent and
Trademark Office; and
(C) the Director of the Office of Federal Procurement
Policy.
(2) CONTENTS.—The policy directive required by paragraph
(1) shall provide for—
(A) simplified, standardized, and timely STTR 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 Phase
II of the STTR program for a period of not less than
2 years, beginning on the initial date of the concern’s
participation in Phase III of such program;
(vii) cost sharing;
(viii) cost principles and payment schedules; and
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(ix) 1-year awards for Phase I of an STTR program, generally not to exceed $150,000, and 2-year
awards for Phase II of an STTR program, generally
not to exceed $1,000,000, (each of which the Administrator shall adjust for inflation annually) greater or
lesser amounts to be awarded at the discretion of the
awarding agency, and shorter or longer periods of time
to be approved at the discretion of the awarding 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;
(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; and
(G) procedures to ensure that procurement center representatives (as described in section 15(l))—
(i) consult with the appropriate personnel from
the relevant Federal agency, to assist small business
concerns participating in the STTR program, particularly in Phase III;
(ii) provide technical assistance to such concerns
to submit a bid for an award of a Federal contract;
and
(iii) consult with the appropriate personnel from
the relevant Federal agency in providing the assistance described in clause (i).
(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 Phase I, Phase II, and Phase III.
(q) DISCRETIONARY TECHNICAL AND BUSINESS ASSISTANCE.—
(1) IN GENERAL.—Each Federal agency required by this
section to conduct an SBIR program or STTR program may
enter into an agreement with 1 or more vendors selected under
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paragraph (2)(A) to provide small business concerns engaged in
SBIR or STTR projects with technical and business assistance
services, such as access to a network of scientists and engineers engaged in a wide range of technologies, assistance with
product sales, intellectual property protections, market research, market validation, and development of regulatory plans
and manufacturing plans, 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, including intellectual property protections.
(2) VENDOR SELECTION.—
(A) IN GENERAL.—Each agency may select 1 or more
vendors from which small business concerns may obtain
assistance in meeting the goals listed in paragraph (1) for
a term not to exceed 5 years. Such selection shall be competitive and shall utilize merit-based criteria.
(B) SELECTION BY SMALL BUSINESS CONCERN.—A small
business concern may, by contract or otherwise, select 1 or
more vendors to assist the small business concern in meeting the goals listed in paragraph (1).
(3) ADDITIONAL TECHNICAL ASSISTANCE.—
(A) PHASE I.—A Federal agency described in paragraph (1) may—
(i) provide to the recipient of a Phase I SBIR or
STTR award, through a vendor selected under paragraph (2)(A), the services described in paragraph (1),
in an amount equal to not more than $6,500 per year;
or
(ii) authorize the recipient of a Phase I SBIR or
STTR award to purchase the services described in
paragraph (1), in an amount equal to not more than
$6,500 per year, which shall be in addition to the
amount of the recipient’s award.
(B) PHASE II.—A Federal agency described in paragraph (1) may—
(i) provide to the recipient of a Phase II SBIR or
STTR award, through a vendor selected under paragraph (2)(A), the services described in paragraph (1),
in an amount equal to not more than $50,000 per
project; or
(ii) authorize the recipient of a Phase II SBIR or
STTR award to purchase the services described in
paragraph (1), in an amount equal to not more than
$50,000 per project, which may, as determined appropriate by the head of the Federal agency, be included
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as part of the recipient’s award or be in addition to the
amount of the recipient’s award.
(C) FLEXIBILITY.—In carrying out subparagraphs (A)
and (B), each Federal agency shall provide the allowable
amounts to a recipient that meets the eligibility requirements under the applicable subparagraph, if the recipient
requests to seek technical or business assistance from an
individual or entity other than a vendor selected under
paragraph (2)(A) by the Federal agency. Business-related
services aimed at improving the commercialization success
of a small business concern may be obtained from an entity, such as a public or private organization or an agency
of or other entity established or funded by a State that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private
enterprises that are commercializing technology.
(D) LIMITATION.—A Federal agency may not—
(i) use the amounts authorized under subparagraph (A) or (B) unless 1 or more vendors selected
under paragraph (2)(A) provides the technical or business assistance to the recipient; or
(ii) enter a contract with a vendor under paragraph (2)(A) under which the amount provided for
technical or business assistance is based on total number of Phase I or Phase II awards.
(E) MULTIPLE AWARD RECIPIENTS.—The Administrator
shall establish a limit on the amount of technical and business assistance services that may be received or purchased
under subparagraph (B) by a small business concern that
has received multiple Phase II SBIR or STTR awards for
a fiscal year.
(4) ANNUAL REPORTING.—
(A) IN GENERAL.—A small business concern that receives technical or business assistance from a vendor
under this subsection during a fiscal year shall submit to
the Federal agency contracting with the vendor a description of the technical or business assistance provided and
the benefits and results of the technical or business assistance provided.
(B) USE OF EXISTING REPORTING MECHANISM.—The information required under subparagraph (A) shall be collected by a Federal agency as part of a report required to
be submitted by small business concerns engaged in SBIR
or STTR projects of the Federal agency for which the requirement was in effect on the date of enactment of this
paragraph.
(r) PHASE III AGREEMENTS, COMPETITIVE PROCEDURES, AND
JUSTIFICATION FOR AWARDS.—
(1) IN GENERAL.—In the case of a small business concern
that is awarded a funding agreement for Phase II of an SBIR
or STTR program, a Federal agency may enter into a Phase III
agreement with that business concern for additional work to be
performed during or after the Phase II period. The Phase II
funding agreement with the small business concern may, at
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the discretion of the agency awarding the agreement, set out
the procedures applicable to Phase III agreements with that
agency or any other agency.
(2) DEFINITION.—In this subsection, the term ‘‘Phase III
agreement’’ means a follow-on, non-SBIR or non-STTR funded
contract as described in paragraph (4)(C) or paragraph (6)(C)
of subsection (e).
(3) INTELLECTUAL PROPERTY RIGHTS.—Each funding agreement under an SBIR or STTR program shall include provisions
setting forth the respective rights of the United States and the
small business concern with respect to intellectual property
rights and with respect to any right to carry out follow-on research.
(4) COMPETITIVE PROCEDURES AND JUSTIFICATION FOR
AWARDS.—To the greatest extent practicable, Federal agencies
and Federal prime contractors shall—
(A) consider an award under the SBIR program or the
STTR program to satisfy the requirements under sections
3201 through 3205 of title 10, United States Code, and any
other applicable competition requirements; and
(B) issue, without further justification, Phase III
awards relating to technology, including sole source
awards, to the SBIR and STTR award recipients that developed the technology.
(s) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR
PROGRAMS.—All funds awarded, appropriated, or otherwise made
available in accordance with subsection (f) or (n) must be awarded
pursuant to competitive and merit-based selection procedures.
(t) INCLUSION IN STRATEGIC PLANS.—Program information 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, United States Code.
(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.
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(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
one 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 Phase I of the SBIR program, if
the proposal, though meritorious, is not funded through
the SBIR program for that fiscal year due to funding restraints, from a small business concern located in—
(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) REDUCING PAPERWORK AND COMPLIANCE BURDEN.—
(1) STANDARDIZATION OF REPORTING REQUIREMENTS.—The
Administrator shall work with the Federal agencies required
by this section to have an SBIR or STTR program to 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.
(2) SIMPLIFICATION OF APPLICATION AND AWARD PROCESS.—
Not later than 1 year after the date of enactment of this paragraph, and after a period of public comment, the Administrator
shall issue regulations or guidelines, taking into consideration
the unique needs of each Federal agency, to ensure that each
Federal agency required to carry out an SBIR program or
STTR program simplifies and standardizes the program proposal, selection, contracting, compliance, and audit procedures
for the SBIR program or STTR program of the Federal agency
(including procedures relating to overhead rates for applicants
and documentation requirements) to reduce the paperwork and
regulatory compliance burden on small business concerns applying to and participating in the SBIR program or STTR program.
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(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.
(x) RESEARCH AND DEVELOPMENT FOCUS.—
(1) REVISION AND UPDATE OF CRITERIA AND PROCEDURES OF
IDENTIFICATION.—In carrying out subsection (g), the Secretary
of Defense shall, not less often than once every 4 years, revise
and update the criteria and procedures utilized to identify
areas of the research and development efforts of the Department of Defense which are suitable for the provision of funds
under the Small Business Innovation Research Program and
the Small Business Technology Transfer Program.
(2) UTILIZATION OF PLANS.—The criteria and procedures
described in paragraph (1) shall be developed through the use
of the most current versions of the following plans:
(A) The Joint Warfighting Science and Technology
Plan required under section 270 of the National Defense
Authorization Act for Fiscal Year 1997 (Public Law 104–
201; 10 U.S.C. 2501 note).
(B) The Defense Technology Area Plan of the Department of Defense.
(C) The Basic Research Plan of the Department of Defense.
(3) INPUT IN IDENTIFICATION OF AREAS OF EFFORT.—The
criteria and procedures described in paragraph (1) shall include input in the identification of areas of research and development efforts described in that paragraph from Department of
Defense program managers (PMs) and program executive officers (PEOs).
(y) COMMERCIALIZATION READINESS PROGRAM.—
(1) IN GENERAL.—The Secretary of Defense and the Secretary of each military department is authorized to create and
administer a ‘‘Commercialization Readiness Program’’ to accelerate the transition of technologies, products, and services developed under the Small Business Innovation Research Program or Small Business Technology Transfer Program to
Phase III, including the acquisition process. The authority to
create and administer a Commercialization Readiness Program
under this subsection may not be construed to eliminate or replace any other SBIR program or STTR program that enhances
the insertion or transition of SBIR or STTR technologies, including any such program in effect on the date of enactment
of the National Defense Authorization Act for Fiscal Year 2006
(Public Law 109–163; 119 Stat. 3136).
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(2) IDENTIFICATION OF RESEARCH PROGRAMS FOR ACCELERATED TRANSITION TO ACQUISITION PROCESS.—In carrying out
the Commercialization Readiness Program, the Secretary of
Defense and the Secretary of each military department shall
identify research programs of the Small Business Innovation
Research Program or Small Business Technology Transfer Program that have the potential for rapid transitioning to Phase
III and into the acquisition process.
(3) LIMITATION.—No research program may be identified
under paragraph (2) unless the Secretary of the military department concerned certifies in writing that the successful
transition of the program to Phase III and into the acquisition
process is expected to meet high priority military requirements
of such military department.
(4) FUNDING.—
(A) IN GENERAL.—The Secretary of Defense and each
Secretary of a military department may use not more than
an amount equal to 1 percent of the funds available to the
Department of Defense or the military department pursuant to the Small Business Innovation Research Program
for payment of expenses incurred to administer the Commercialization Readiness Program under this subsection.
(B) LIMITATIONS.—The funds described in subparagraph (A)—
(i) shall not be subject to the limitations on the
use of funds in subsection (f)(2); and
(ii) shall not be used to make Phase III awards.
(5) INSERTION INCENTIVES.—For any contract with a value
of not less than $100,000,000, the Secretary of Defense is authorized to—
(A) establish goals for the transition of Phase III technologies in subcontracting plans; and
(B) require a prime contractor on such a contract to report the number and dollar amount of contracts entered
into by that prime contractor for Phase III SBIR or STTR
projects.
(6) GOAL FOR SBIR AND STTR TECHNOLOGY INSERTION.—The
Secretary of Defense shall—
(A) set a goal to increase the number of Phase II SBIR
contracts and the number of Phase II STTR contracts
awarded by the Secretary that lead to technology transition into programs of record or fielded systems;
(B) use incentives in effect on the date of enactment
of the SBIR/STTR Reauthorization Act of 2011, or create
new incentives, to encourage agency program managers
and prime contractors to meet the goal under subparagraph (A); and
(C) submit to the Administrator for inclusion in the
annual report under subsection (b)(7)—
(i) the number and percentage of Phase II SBIR
and STTR contracts awarded by the Secretary that led
to technology transition into programs of record or
fielded systems;
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(ii) information on the status of each project that
received funding through the Commercialization Readiness Program and efforts to transition those projects
into programs of record or fielded systems; and
(iii) a description of each incentive that has been
used by the Secretary under subparagraph (B) and the
effectiveness of that incentive with respect to meeting
the goal under subparagraph (A).
(z) ENCOURAGING INNOVATION IN ENERGY EFFICIENCY.—
(1) FEDERAL AGENCY ENERGY-RELATED PRIORITY.—In carrying out its duties under this section relating to SBIR and
STTR solicitations by Federal departments and agencies, the
Administrator shall—
(A) ensure that such departments and agencies give
high priority to small business concerns that participate in
or conduct energy efficiency or renewable energy system
research and development projects; and
(B) include in the annual report to Congress under
subsection (b)(7) a determination of whether the priority
described in subparagraph (A) is being carried out.
(2) CONSULTATION REQUIRED.—The Administrator shall
consult with the heads of other Federal departments and agencies in determining whether priority has been given to small
business concerns that participate in or conduct energy efficiency or renewable energy system research and development
projects, as required by this subsection.
(3) GUIDELINES.—The Administrator shall, as soon as is
practicable after the date of enactment of this subsection, issue
guidelines and directives to assist Federal agencies in meeting
the requirements of this subsection.
(4) DEFINITIONS.—In this subsection—
(A) the term ‘‘biomass’’—
(i) means any organic material that is available on
a renewable or recurring basis, including—
(I) agricultural crops;
(II) trees grown for energy production;
(III) wood waste and wood residues;
(IV) plants (including aquatic plants and
grasses);
(V) residues;
(VI) fibers;
(VII) animal wastes and other waste materials; and
(VIII) fats, oils, and greases (including recycled fats, oils, and greases); and
(ii) does not include—
(I) paper that is commonly recycled; or
(II) unsegregated solid waste;
(B) the term ‘‘energy efficiency project’’ means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
(C) the term ‘‘renewable energy system’’ means a system of energy derived from—
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(i) a wind, solar, biomass (including biodiesel), or
geothermal source; or
(ii) hydrogen derived from biomass or water using
an energy source described in clause (i).
(aa) LIMITATION ON SIZE OF AWARDS.—
(1) LIMITATION.—No Federal agency may issue an award
under the SBIR program or the STTR program if the size of
the award exceeds the award guidelines established under this
section by more than 50 percent.
(2) MAINTENANCE OF INFORMATION.—Participating agencies shall maintain information on awards exceeding the guidelines established under this section, including—
(A) the amount of each award;
(B) a justification for exceeding the guidelines for each
award;
(C) the identity and location of each award recipient;
and
(D) whether an award recipient has received any venture capital, hedge fund, or private equity firm investment
and, if so, whether the recipient is majority-owned by multiple venture capital operating companies, hedge funds, or
private equity firms.
(3) REPORTS.—The Administrator shall include the information described in paragraph (2) in the annual report of the
Administrator to Congress.
(4) WAIVER FOR SPECIFIC TOPIC.—Upon the receipt of an
application from a Federal agency, the Administrator may
grant a waiver from the requirement under paragraph (1) with
respect to a specific topic (but not for the agency as a whole)
for a fiscal year if the Administrator determines, based on the
information contained in the application from the agency,
that—
(A) the requirement under paragraph (1) will interfere
with the ability of the agency to fulfill its research mission
through the SBIR program or the STTR program; and
(B) the agency will minimize, to the maximum extent
possible, the number of awards that do not satisfy the requirement under paragraph (1) to preserve the nature and
intent of the SBIR program and the STTR program.
(5) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to prevent a Federal agency from
supplementing an award under the SBIR program or the STTR
program using funds of the Federal agency that are not part
of the SBIR program or the STTR program of the Federal
agency.
(bb) SUBSEQUENT PHASE II AWARDS.—
(1) AGENCY FLEXIBILITY.—A small business concern that
received a Phase I award from a Federal agency under this
section shall be eligible to receive a subsequent Phase II award
from another Federal agency, if the head of each relevant Federal agency or the relevant component of the Federal agency
makes a written determination that the topics of the relevant
awards are the same and both agencies report the awards to
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the Administrator for inclusion in the public database under
subsection (k).
(2) SBIR AND STTR PROGRAM FLEXIBILITY.—A small business concern that received a Phase I award under this section
under the SBIR program or the STTR program may receive a
subsequent Phase II award in either the SBIR program or the
STTR program and the participating agency or agencies shall
report the awards to the Administrator for inclusion in the
public database under subsection (k).
(3) PREVENTING DUPLICATIVE AWARDS.—The head of a Federal agency shall verify that any activity to be performed with
respect to a project with a Phase I or Phase II SBIR or STTR
award has not been funded under the SBIR program or STTR
program of another Federal agency.
(cc) PHASE FLEXIBILITY.—During fiscal years 2012 through
2025, the National Institutes of Health, the Department of Defense, and the Department of Education may each provide to a
small business concern an award under Phase II of the SBIR program with respect to a project, without regard to whether the small
business concern was provided an award under Phase I of an SBIR
program with respect to such project, if the head of the applicable
agency determines that the small business concern has completed
the determinations described in subsection (e)(4)(A) with respect to
such project despite not having been provided a Phase I award.
(dd) PARTICIPATION OF SMALL BUSINESS CONCERNS MAJORITYOWNED BY VENTURE CAPITAL OPERATING COMPANIES, HEDGE
FUNDS, OR PRIVATE EQUITY FIRMS IN THE SBIR PROGRAM.—
(1) AUTHORITY.—Upon providing a written determination
described in paragraph (2) to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate,
and the Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Representatives, not later than 30 days before the date on which any such
award is made—
(A) the Director of the National Institutes of Health,
the Secretary of Energy, and the Director of the National
Science Foundation may award not more than 25 percent
of the funds allocated for the SBIR program of the applicable Federal agency to small business concerns that are
owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms
through competitive, merit-based procedures that are open
to all eligible small business concerns; and
(B) the head of a Federal agency other than a Federal
agency described in subparagraph (A) that participates in
the SBIR program may award not more than 15 percent
of the funds allocated for the SBIR program of the Federal
agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible
small business concerns.
(2) DETERMINATION.—A written determination described in
this paragraph is a written determination by the head of a
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Federal agency that explains how the use of the authority
under paragraph (1) will—
(A) induce additional venture capital, hedge fund, or
private equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Federal agency;
(C) demonstrate a need for public research; and
(D) otherwise fulfill the capital needs of small business
concerns for additional financing for SBIR projects.
(3) REGISTRATION.—A small business concern that is majority-owned by multiple venture capital operating companies,
hedge funds, or private equity firms and qualified for participation in the program authorized under paragraph (1) shall—
(A) register with the Administrator on the date that
the small business concern submits an application for an
award under the SBIR program; and
(B) indicate in any SBIR proposal that the small business concern is registered under subparagraph (A) as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(4) COMPLIANCE.—
(A) IN GENERAL.—The head of a Federal agency that
makes an award under this subsection during a fiscal year
shall collect and submit to the Administrator data relating
to the number and dollar amount of Phase I awards, Phase
II awards, and any other category of awards by the Federal agency under the SBIR program during that fiscal
year.
(B) ANNUAL REPORTING.—The Administrator shall include as part of each annual report by the Administration
under subsection (b)(7) any data submitted under subparagraph (A) and a discussion of the compliance of each Federal agency that makes an award under this subsection
during the fiscal year with the maximum percentages
under paragraph (1).
(5) ENFORCEMENT.—If a Federal agency awards more than
the percent of the funds allocated for the SBIR program of the
Federal agency authorized under paragraph (1) for a purpose
described in paragraph (1), the head of the Federal agency
shall transfer an amount equal to the amount awarded in excess of the amount authorized under paragraph (1) to the
funds for general SBIR programs from the non-SBIR and nonSTTR research and development funds of the Federal agency
not later than 180 days after the date on which the Federal
agency made the award that caused the total awarded under
paragraph (1) to be more than the amount authorized under
paragraph (1) for a purpose described in paragraph (1).
(6) FINAL DECISIONS ON APPLICATIONS UNDER THE SBIR
PROGRAM.—
(A) DEFINITION.—In this paragraph, the term ‘‘covered
small business concern’’ means a small business concern
that—
(i) was not majority-owned by multiple venture
capital operating companies, hedge funds, or private
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equity firms on the date on which the small business
concern submitted an application in response to a solicitation under the SBIR programs; and
(ii) on the date of the award under the SBIR program is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity
firms.
(B) IN GENERAL.—If a Federal agency does not make
an award under a solicitation under the SBIR program before the date that is 9 months after the date on which the
period for submitting applications under the solicitation
ends—
(i) a covered small business concern is eligible to
receive the award, without regard to whether the covered small business concern meets the requirements
for receiving an award under the SBIR program for a
small business concern that is majority-owned by multiple venture capital operating companies, hedge
funds, or private equity firms, if the covered small
business concern meets all other requirements for
such an award; and
(ii) the head of the Federal agency shall transfer
an amount equal to any amount awarded to a covered
small business concern under the solicitation to the
funds for general SBIR programs from the non-SBIR
and non-STTR research and development funds of the
Federal agency, not later than 90 days after the date
on which the Federal agency makes the award.
(7) EVALUATION CRITERIA.—A Federal agency may not use
investment of venture capital or investment from hedge funds
or private equity firms as a criterion for the award of contracts
under the SBIR program or STTR program.
(ee) COLLABORATING WITH FEDERAL LABORATORIES AND RESEARCH AND DEVELOPMENT CENTERS.—
(1) AUTHORIZATION.—Subject to the limitations under this
section, the head of each participating Federal agency may
make SBIR and STTR awards to any eligible small business
concern that—
(A) intends to enter into an agreement with a Federal
laboratory or federally funded research and development
center for portions of the activities to be performed under
that award; or
(B) has entered into a cooperative research and development agreement (as defined in section 12(d) of the Stevenson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3710a(d))) with a Federal laboratory.
(2) PROHIBITION.—No Federal agency shall—
(A) condition an SBIR or STTR award upon entering
into agreement with any Federal laboratory or any federally funded laboratory or research and development center
for any portion of the activities to be performed under that
award;
(B) approve an agreement between a small business
concern receiving an SBIR or STTR award and a Federal
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laboratory or federally funded laboratory or research and
development center, if the small business concern performs
a lesser portion of the activities to be performed under
that award than required by this section and by the SBIR
Policy Directive and the STTR Policy Directive of the Administrator; or
(C) approve an agreement that violates any provision,
including any data rights protections provision, of this section or the SBIR and the STTR Policy Directives.
(3) IMPLEMENTATION.—Not later than 180 days after the
date of enactment of this subsection, the Administrator shall
modify the SBIR Policy Directive and the STTR Policy Directive issued under this section to ensure that small business
concerns—
(A) have the flexibility to use the resources of the Federal laboratories or federally funded research and development centers; and
(B) are not mandated to enter into agreement with
any Federal laboratory or any federally funded laboratory
or research and development center as a condition of an
award.
(4) ADVANCE PAYMENT.—If a small business concern receiving an award under this section enters into an agreement with
a Federal laboratory or federally funded research and development center for portions of the activities to be performed under
that award, the Federal laboratory or federally funded research and development center may not require advance payment from the small business concern in an amount greater
than the amount necessary to pay for 30 days of such activities.
(ff) ADDITIONAL SBIR AND STTR AWARDS.—
(1) EXPRESS AUTHORITY FOR AWARDING A SEQUENTIAL
PHASE II AWARD.—A small business concern that receives a
Phase II SBIR award or a Phase II STTR award for a project
remains eligible to receive 1 additional Phase II SBIR award
or Phase II STTR award for continued work on that project.
(2) PREVENTING DUPLICATIVE AWARDS.—The head of a Federal agency shall verify that any activity to be performed with
respect to a project with a Phase I or Phase II SBIR or STTR
award has not been funded under the SBIR program or STTR
program of another Federal agency.
(gg) PILOT PROGRAM.—
(1) AUTHORIZATION.—The head of each covered Federal
agency may allocate not more than 10 percent of the funds allocated to the SBIR program and the STTR program of the covered Federal agency—
(A) for awards for technology development, testing,
evaluation, and commercialization assistance for SBIR and
STTR Phase II technologies; or
(B) to support the progress of research, research and
development, and commercialization conducted under the
SBIR or STTR programs to Phase III.
(2) APPLICATION BY FEDERAL AGENCY.—
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(A) IN GENERAL.—A covered Federal agency may not
establish a pilot program unless the covered Federal agency makes a written application to the Administrator, not
later than 90 days before the first day of the fiscal year in
which the pilot program is to be established, that describes
a compelling reason that additional investment in SBIR or
STTR technologies is necessary, including unusually high
regulatory, systems integration, or other costs relating to
development or manufacturing of identifiable, highly promising small business technologies or a class of such technologies expected to substantially advance the mission of
the agency.
(B) DETERMINATION.—The Administrator shall—
(i) make a determination regarding an application
submitted under subparagraph (A) not later than 30
days before the first day of the fiscal year for which
the application is submitted;
(ii) publish the determination in the Federal Register; and
(iii) make a copy of the determination and any related materials available to the Committee on Small
Business and Entrepreneurship of the Senate and the
Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Representatives.
(3) MAXIMUM AMOUNT OF AWARD.—The head of a covered
Federal agency may not make an award under a pilot program
in excess of 3 times the dollar amounts generally established
for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).
(4) REGISTRATION.—Any applicant that receives an award
under a pilot program shall register with the Administrator in
a registry that is available to the public.
(5) AWARD CRITERIA OR CONSIDERATION.—When making an
award under this section, the head of a covered Federal agency
shall give consideration to whether the technology to be supported by the award is likely to be manufactured in the United
States.
(6) REPORT.—The head of each covered Federal agency
shall include in the annual report of the covered Federal agency to the Administrator an analysis of the various activities
considered for inclusion in the pilot program of the covered
Federal agency and a statement of the reasons why each activity considered was included or not included, as the case may
be.
(7) TERMINATION.—The authority to establish a pilot program under this section expires at the end of fiscal year 2025.
(8) DEFINITIONS.—In this subsection—
(A) the term ‘‘covered Federal agency’’—
(i) means a Federal agency participating in the
SBIR program or the STTR program; and
(ii) does not include the Department of Defense;
and
(B) the term ‘‘pilot program’’ means each program established under paragraph (1).
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(hh) TIMING OF RELEASE OF FUNDING.—
(1) IN GENERAL.—Federal agencies participating in the
SBIR program or STTR program shall, to the extent possible,
shorten the amount of time between the provision of notice of
an award under the SBIR program or STTR program and the
subsequent release of funding with respect to the award.
(2) PILOT PROGRAM TO ACCELERATE DEPARTMENT OF DEFENSE SBIR AND STTR AWARDS.—
(A) IN GENERAL.—Not later than 1 year after the date
of enactment of this paragraph, the Under Secretary of Defense for Research and Engineering, acting through the Director of Defense Procurement and Acquisition Policy of
the Department of Defense, shall establish a pilot program
to reduce the time for awards under the SBIR and STTR
programs of the Department of Defense, under which the
Department of Defense shall—
(i) develop simplified and standardized procedures
and model contracts throughout the Department of
Defense for Phase I, Phase II, and Phase III SBIR
awards;
(ii) for Phase I SBIR and STTR awards, reduce
the amount of time between solicitation closure and
award;
(iii) for Phase II SBIR and STTR awards, reduce
the amount of time between the end of a Phase I
award and the start of the Phase II award;
(iv) for Phase II SBIR and STTR awards that skip
Phase I, reduce the amount of time between solicitation closure and award;
(v) for sequential Phase II SBIR and STTR
awards, reduce the amount of time between Phase II
awards; and
(vi) reduce the award times described in clauses
(ii), (iii), (iv), and (v) to be as close to 90 days as possible.
(B) CONSULTATION.—In carrying out the pilot program
under subparagraph (A), the Director of Defense Procurement and Acquisition Policy of the Department of Defense
shall consult with the Director of the Office of Small Business Programs of the Department of Defense.
(C) TERMINATION.—The pilot program under subparagraph (A) shall terminate on September 30, 2025.
(ii) REPORTING ON TIMING.—
(1) IN GENERAL.—Federal agencies participating in the
SBIR program or STTR program shall provide to the Administrator, for the annual report on the SBIR and STTR program
under subsection (b)(7), the average amount of time the agency
takes to make a final decision on proposals submitted under
such programs, the average amount of time the agency takes
to release funding with respect to an award under such programs, and the goals established to reduce such amounts.
(2) COMPTROLLER GENERAL REPORTS.—The Comptroller
General of the United States shall submit to the Committee on
Small Business and Entrepreneurship of the Senate, the ComFebruary 1, 2024

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mittee on Armed Services of the Senate, the Committee on
Small Business of the House of Representatives, and the Committee on Armed Services of the House of Representatives—
(A) not later than 1 year after the date of enactment
of this paragraph, and every year thereafter for 3 years, a
report that—
(i) provides the average and median amount of
time that each component of the Department of Defense with an SBIR or STTR program takes to review
and make a final decision on proposals submitted
under the program; and
(ii) compares that average and median amount of
time with that of other Federal agencies participating
in the SBIR or STTR program; and
(B) not later than December 5, 2021, a report that—
(i) includes the information described in subparagraph (A);
(ii) assesses where each Federal agency participating in the SBIR or STTR program needs improvement with respect to the proposal review and award
times under the program;
(iii) identifies best practices for shortening the
proposal review and award times under the SBIR and
STTR programs, including the pros and cons of using
contracts compared to grants; and
(iv) analyzes the efficacy of the pilot program established under subsection (hh)(2).
(jj) PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM.—
(1) IN GENERAL.—The Director of the National Institutes of
Health may use $5,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept Partnership pilot program
to accelerate the creation of small businesses and the commercialization of research innovations from qualifying institutions.
To implement this program, the Director shall award, through
a competitive, merit-based process, grants to qualifying institutions. These grants shall only be used to administer Proof of
Concept Partnership awards in conformity with this subsection.
(2) DEFINITIONS.—In this subsection—
(A) the term ‘‘Director’’ means the Director of the National Institutes of Health;
(B) the term ‘‘pilot program’’ refers to the Proof of Concept Partnership pilot program; and
(C) the terms ‘‘qualifying institution’’ and ‘‘institution’’
mean a university or other research institution that participates in the National Institutes of Health’s STTR program.
(3) PROOF OF CONCEPT PARTNERSHIPS.—
(A) IN GENERAL.—A Proof of Concept Partnership shall
be set up by a qualifying institution to award grants to individual researchers. These grants should provide researchers with the initial investment and the resources to
support the proof of concept work and commercialization
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mentoring needed to translate promising research projects
and technologies into a viable company. This work may include technical validations, market research, clarifying intellectual property rights position and strategy, and investigating commercial or business opportunities.
(B) AWARD GUIDELINES.—The administrator of a Proof
of Concept Partnership program shall award grants in accordance with the following guidelines:
(i) The Proof of Concept Partnership shall use a
market-focused project management oversight process,
including—
(I) a rigorous, diverse review board comprised
of local experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;
(II) technology validation milestones focused
on market feasibility;
(III) simple reporting effective at redirecting
projects; and
(IV) the willingness to reallocate funding from
failing projects to those with more potential.
(ii) Not more than $100,000 shall be awarded towards an individual proposal.
(C) EDUCATIONAL RESOURCES AND GUIDANCE.—The administrator of a Proof of Concept Partnership program
shall make educational resources and guidance available
to researchers attempting to commercialize their innovations.
(4) AWARDS.—
(A) SIZE OF AWARD.—The Director may make awards
to a qualifying institution for up to $1,000,000 per year for
up to 4 years.
(B) AWARD CRITERIA.—In determining which qualifying institutions receive pilot program grants, the Director shall consider, in addition to any other criteria the Director determines necessary, the extent to which qualifying
institutions—
(i) have an established and proven technology
transfer or commercialization office and have a plan
for engaging that office in the program’s implementation;
(ii) have demonstrated a commitment to local and
regional economic development;
(iii) are located in diverse geographies and are of
diverse sizes;
(iv) can assemble project management boards comprised of industry, start-up, venture capital, technical,
financial, and business experts;
(v) have an intellectual property rights strategy or
office; and
(vi) demonstrate a plan for sustainability beyond
the duration of the funding award.
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(5) LIMITATIONS.—The funds for the pilot program shall
not be used—
(A) for basic research, but to evaluate the commercial
potential of existing discoveries, including—
(i) proof of concept research or prototype development; and
(ii) activities that contribute to determining a
project’s commercialization path, to include technical
validations, market research, clarifying intellectual
property rights, and investigating commercial and
business opportunities; or
(B) to fund the acquisition of research equipment or
supplies unrelated to commercialization activities.
(6) EVALUATIVE REPORT.—The Director shall submit to the
Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and
the Committee on Small Business and Entrepreneurship of the
Senate an evaluative report regarding the activities of the pilot
program. The report shall include—
(A) a detailed description of the institutional and proposal selection process;
(B) an accounting of the funds used in the pilot program;
(C) a detailed description of the pilot program, including incentives and activities undertaken by review board
experts;
(D) a detailed compilation of results achieved by the
pilot program, including the number of small business concerns included and the number of business packages developed, and the number of projects that progressed into subsequent STTR phases; and
(E) an analysis of the program’s effectiveness with
supporting data.
(7) SUNSET.—The pilot program under this subsection
shall terminate at the end of fiscal year 2025.
(kk) PHASE III REPORTING.—The annual SBIR or STTR report
to Congress by the Administration under subsection (b)(7) shall include, for each Phase III award—
(1) the name of the agency or component of the agency or
the non-Federal source of capital making the Phase III award;
(2) the name of the small business concern or individual
receiving the Phase III award; and
(3) the dollar amount of the Phase III award.
(ll) CONSENT TO RELEASE CONTACT INFORMATION TO ORGANIZATIONS.—
(1) ENABLING CONCERN TO GIVE CONSENT.—Each Federal
agency required by this section to conduct an SBIR program or
an STTR program shall enable a small business concern that
is an SBIR applicant or an STTR applicant to indicate to the
Federal agency whether the Federal agency has the consent of
the concern to—
(A) identify the concern to appropriate local and Statelevel economic development organizations as an SBIR applicant or an STTR applicant; and
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(B) release the contact information of the concern to
such organizations.
(2) RULES.—The Administrator shall establish rules to implement this subsection. The rules shall include a requirement
that a Federal agency include in the SBIR and STTR application a provision through which the applicant can indicate consent for purposes of paragraph (1).
(mm) ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CONTRACT PROCESSING COSTS.—
(1) IN GENERAL.—Subject to paragraph (3) and until September 30, 2025, the Administrator shall allow each Federal
agency required to conduct an SBIR program to use not more
than 3 percent of the funds allocated to the SBIR program of
the Federal agency for—
(A) the administration of the SBIR program or the
STTR program of the Federal agency;
(B) the provision of outreach and technical assistance
relating to the SBIR program or STTR program of the Federal agency, including technical assistance site visits, personnel interviews, and national conferences;
(C) the implementation of commercialization and outreach initiatives that were not in effect on the date of enactment of this subsection;
(D) carrying out the program under subsection (y);
(E) activities relating to oversight and congressional
reporting, including waste, fraud, and abuse prevention activities;
(F) targeted reviews of recipients of awards under the
SBIR program or STTR program of the Federal agency
that the head of the Federal agency determines are at high
risk for fraud, waste, or abuse to ensure compliance with
requirements of the SBIR program or STTR program, respectively;
(G) the implementation of oversight and quality control measures, including verification of reports and invoices and cost reviews;
(H) carrying out subsection (dd);
(I) contract processing costs relating to the SBIR program or STTR program of the Federal agency;
(J) funding for additional personnel and assistance
with application reviews; and
(K) funding for improvements that increase commonality across data systems, reduce redundancy, and improve data oversight and accuracy.
(2) OUTREACH AND TECHNICAL ASSISTANCE.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), a Federal agency participating in the program under
this subsection shall use a portion of the funds authorized
for uses under paragraph (1) to carry out the policy directive required under subsection (j)(2)(F) and to increase the
participation of States with respect to which a low level of
SBIR awards have historically been awarded.
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paragraph (A). Such request shall include an explanation
of why the waiver is necessary. The Administrator may
grant the waiver based on a determination that the agency
has demonstrated a sufficient need for the waiver, that the
outreach objectives of the agency are being met, and that
there is increased participation by States with respect to
which a low level of SBIR awards have historically been
awarded.
(3) PERFORMANCE CRITERIA.—A Federal agency may not
use funds as authorized under paragraph (1) until after the effective date of performance criteria, which the Administrator
shall establish, to measure any benefits of using funds as authorized under paragraph (1) and to assess continuation of the
authority under paragraph (1).
(4) RULES.—Not later than 180 days after the date of enactment of this subsection, the Administrator shall issue rules
to carry out this subsection.
(5) COORDINATION WITH IG.—Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or
(G) of paragraph (1) with their respective Inspectors General,
when appropriate, and each Federal agency that allocates more
than $50,000,000 to the SBIR program of the Federal agency
for a fiscal year may share such funding with its Inspector
General when the Inspector General performs such activities.
(6) REPORTING.—The Administrator shall collect data and
provide to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business,
the Committee on Science, Space, and Technology, and the
Committee on Appropriations of the House of Representatives
a report on the use of funds under this subsection, including
funds used to achieve the objectives of paragraph (2)(A) and
any use of the waiver authority under paragraph (2)(B).
(nn) ANNUAL REPORT ON SBIR AND STTR PROGRAM GOALS.—
(1) DEVELOPMENT OF METRICS.—The head of each Federal
agency required to participate in the SBIR program or the
STTR program shall develop metrics to evaluate the effectiveness and the benefit to the people of the United States of the
SBIR program and the STTR program of the Federal agency
that—
(A) are science-based and statistically driven;
(B) reflect the mission of the Federal agency; and
(C) include factors relating to the economic impact of
the programs.
(2) EVALUATION.—The head of each Federal agency described in paragraph (1) shall conduct an annual evaluation
using the metrics developed under paragraph (1) of—
(A) the SBIR program and the STTR program of the
Federal agency; and
(B) the benefits to the people of the United States of
the SBIR program and the STTR program of the Federal
agency.
(3) REPORT.—
(A) IN GENERAL.—The head of each Federal agency described in paragraph (1) shall submit to the appropriate
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committees of Congress and the Administrator an annual
report describing in detail the results of an evaluation conducted under paragraph (2).
(B) PUBLIC AVAILABILITY OF REPORT.—The head of
each Federal agency described in paragraph (1) shall make
each report submitted under subparagraph (A) available to
the public online.
(C) DEFINITION.—In this paragraph, the term ‘‘appropriate committees of Congress’’ means—
(i) the Committee on Small Business and Entrepreneurship of the Senate; and
(ii) the Committee on Small Business and the
Committee on Science, Space, and Technology of the
House of Representatives.
(oo) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND
STTR PROGRAMS.—All funds awarded, appropriated, or otherwise
made available in accordance with subsection (f) or (n) must be
awarded pursuant to competitive and merit-based selection procedures.
(pp) LIMITATION ON PILOT PROGRAMS.—
(1) EXISTING PILOT PROGRAMS.—The Administrator may
only carry out a covered pilot program that is in operation on
the date of enactment of this subsection during the 3-year period beginning on such date of enactment.
(2) NEW PILOT PROGRAMS.—The Administrator may only
carry out a covered pilot program established after the date of
enactment of this subsection—
(A) during the 3-year period beginning on the date on
which such program is established; and
(B) if such program does not continue and is not based
on, in any manner, a previously established covered pilot
program.
(3) COVERED PILOT PROGRAM DEFINED.—In this subsection,
the term ‘‘covered pilot program’’ means any initiative, project,
innovation, or other activity—
(A) established by the Administrator;
(B) relating to an SBIR or STTR program; and
(C) not specifically authorized by law.
(qq) MINIMUM STANDARDS FOR PARTICIPATION.—
(1) PROGRESS TO PHASE II SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMERCIALIZATION RATE.—Not later than 1 year after the date of
enactment of this subsection, the head of each Federal
agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase II SBIR or STTR awards
for projects that have received Phase I SBIR or STTR
awards;
(ii) establish a minimum performance standard for
small business concerns with respect to the receipt of
Phase II SBIR or STTR awards for projects that have
received Phase I SBIR or STTR awards; and
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(iii) begin evaluating, each fiscal year, whether
each small business concern that received a Phase I
SBIR or STTR award from the agency meets the minimum performance standard established under clause
(ii).
(B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COMMERCIALIZATION RATE.—If the head of a Federal agency determines that a small business concern that received a
Phase I SBIR or STTR award from the agency is not meeting the minimum performance standard established under
subparagraph (A)(ii), such concern may not participate in
Phase I (or Phase II if under the authority of subsection
(cc)) of the SBIR or STTR program of that agency during
the 1-year period beginning on the date on which such determination is made.
(2) PROGRESS TO PHASE III SUCCESS.—
(A) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMERCIALIZATION RATE.—Not later than 2 years after the date
of enactment of this subsection, the head of each Federal
agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase III SBIR or STTR awards
for projects that have received Phase I SBIR or STTR
awards;
(ii) establish a minimum performance standard for
small business concerns with respect to the receipt of
Phase III SBIR or STTR awards for projects that have
received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether
each small business concern that received a Phase I
SBIR or STTR award from the agency meets the minimum performance standard established under clause
(ii).
(B) CONSEQUENCE OF FAILURE TO MEET MINIMUM COMMERCIALIZATION RATE.—If the head of a Federal agency determines that a small business concern that received a
Phase I SBIR or STTR award from the agency is not meeting the minimum performance standard established under
subparagraph (A)(ii), such concern may not participate in
Phase I (or Phase II if under the authority of subsection
(cc)) of the SBIR or STTR program of that agency during
the 1-year period beginning on the date on which such determination is made.
(3) 70 INCREASED MINIMUM PERFORMANCE STANDARDS FOR
EXPERIENCED FIRMS.—
(A) PROGRESS TO PHASE II SUCCESS.—
(i) IN GENERAL.—With respect to a small business
concern that received or receives more than 50 Phase
I awards during a covered period, each minimum per70 Pursuant to subparagraph (D), subparagraphs (A) through (C) take effect on April 1, 2023.
Also, subparagraph (I) of this paragraph provides ‘‘[t]his paragraph shall terminate on September 30, 2025’’.

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formance standard established under paragraph
(1)(A)(ii) shall be doubled for such covered period.
(ii) CONSEQUENCE OF FAILURE TO MEET STANDARD.—If the head of a Federal agency determines that
a small business concern that received a Phase I
award from the Federal agency is not meeting an applicable increased minimum performance standard
modified under clause (i), the small business concern
may not receive more than 20 total Phase I awards
and Phase II awards under subsection (cc) from each
Federal agency during the 1-year period beginning on
the date on which such determination is made.
(iii) COVERED PERIOD DEFINED.—In this subparagraph, the term ‘‘covered period’’ means a consecutive
period of 5 fiscal years preceding the most recent fiscal
year.
(B) PROGRESS TO PHASE III SUCCESS.—
(i) IN GENERAL.—Each minimum performance
standard established under paragraph (2)(A)(ii)
shall—
(I) with respect to a small business concern
that received or receives more than 50 Phase II
awards during a covered period, require an average of $250,000 of aggregate sales and investments per Phase II award received during such
covered period; and
(II) with respect to a small business concern
that received or receives more than 100 Phase II
awards during a covered period, require an average of $450,000 of aggregate sales and investments per Phase II award received during such
covered period.
(ii) CONSEQUENCE OF FAILURE TO MEET STANDARD.—If the head of a Federal agency determines that
a small business concern that received a Phase I
award from the agency is not meeting an applicable
increased minimum performance standard modified
under clause (i), the small business concern may not
receive more than 20 total Phase I awards and Phase
II awards under subsection (cc) from each agency during the 1-year period beginning on the date on which
such determination is made.
(iii) DOCUMENTATION.—
(I) IN GENERAL.—A small business concern
that is subject to an increased minimum performance standard described in clause (i) shall submit
to the Administrator supporting documentation
evidencing that all covered sales of the small business concern were properly used to meet the increased minimum performance standard.
(II) COVERED SALE DEFINED.—In this clause,
the term ‘‘covered sale’’ means a sale by a small
business concern—
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(aa) that the small business concern
claims to be attributable to an SBIR or STTR
award;
(bb) for which no amount of the payment
was or is made using Federal funds;
(cc) which the small business concern
uses to meet an applicable increased minimum performance standard under clause (i);
and
(dd) that was or is received during the 5
fiscal years immediately preceding the fiscal
year in which the small business concern uses
the sale to meet the increased minimum performance standard.
(iv) COVERED PERIOD DEFINED.—In this subparagraph, the term ‘‘covered period’’ means a consecutive
period of 10 fiscal years preceding the most recent 2
fiscal years.
(C) PATENTS FOR INCREASED MINIMUM PERFORMANCE
STANDARDS.—A small business concern with respect to
which an increased minimum performance standard under
subparagraph (B) applies may not meet the increased minimum performance standard by obtaining patents.
(D) EFFECTIVE DATE.—Subparagraphs (A) through (C)
shall take effect on April 1, 2023.
(E) WAIVER.—
(i) IN GENERAL.—The Administrator may, upon
the request of a senior official of a Federal agency,
grant a waiver with respect to a topic for the SBIR or
STTR program of the Federal agency if—
(I) the topic is critical to the mission of the
Federal agency or relates to national security; and
(II) the official submits to the Administrator a
request for the waiver in accordance with clause
(iii).
(ii) WAIVER EFFECTS.—If the Administration
grants a waiver with respect to a topic for the SBIR
or STTR program of a Federal agency, subparagraphs
(A)(ii) and (B)(ii) shall not prohibit any covered small
business concern from receiving an SBIR or STTR
award under such topic.
(iii) AGENCY REQUEST AND CONGRESSIONAL NOTIFICATION.—Not later than 15 days before the release of
a solicitation including a topic for which a senior official of a Federal agency is requesting a waiver under
clause (i), the senior official shall submit to the Administrator, the Committee on Small Business and the
Committee on Science, Space, and Technology of the
House of Representatives, and the Committee on
Small Business and Entrepreneurship of the Senate a
request for the waiver.
(iv) ADMINISTRATOR DETERMINATION AND CONGRESSIONAL NOTIFICATION.—Not later than 15 days
after receiving a request for a waiver under clause (i),
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the Administrator shall make a determination with respect to the request and notify the senior official at
the Federal agency that made the request, the Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Representatives, and the Committee on Small Business
and Entrepreneurship of the Senate of the determination.
(v) DEFINITIONS.—In this subparagraph:
(I) COVERED SMALL BUSINESS CONCERN.—The
term ‘‘covered small business concern’’ means a
small business concern that is subject to the consequences under subparagraph (A)(ii) or (B)(ii)
pursuant to a determination by the head of a Federal agency that such small business concern did
not meet an increased minimum performance
standard that was applicable to such small business concern.
(II) SENIOR OFFICIAL.—The term ‘‘senior official’’ means an individual appointed to a position
in a Federal agency that is classified above GS–15
pursuant section 5108 of title 5, United States
Code, or any equivalent position, as determined by
the Administrator.
(F) REPORTING.—
(i) IN GENERAL.—Not later than July 1, 2023, and
annually thereafter, the Administrator shall submit to
Congress a list of the small business concerns that did
not meet—
(I) an applicable minimum performance
standard established under paragraph (1)(A)(ii) or
(2)(A)(ii); or
(II) an applicable increased minimum performance standard.
(ii) WAIVERS.—Each list submitted under clause (i)
shall identify each small business concern that received an SBIR or STTR award pursuant to a waiver
granted under subparagraph (E) by the Administrator
during the period covered by the list.
(iii) CONFIDENTIALITY.—Each list submitted under
clause (i) shall be confidential and exempt from disclosure under section 552(b)(3) of title 5, United States
Code (commonly known as the ‘‘Freedom of Information Act’’).
(G) IMPLEMENTATION.—Not later than April 1, 2023,
the Administration shall implement the increased minimum performance standards under this paragraph.
(H) RULES OF CONSTRUCTION.—Nothing in this paragraph shall be construed—
(i) to prohibit a small business concern from participating in a Phase I (or Phase II if under the authority of subsection (cc)) of an SBIR or STTR program
under paragraph (1)(B) or (2)(B) solely on the basis of
a determination by the head of a Federal agency that
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the small business concern is not meeting an increased minimum performance standard; or
(ii) to prevent the head of a Federal agency from
implementing more restrictive limitations on the number of federally funded Phase I awards and direct to
Phase II awards under subsection (cc) that may be
awarded to a small business concern than the limitations described in subparagraphs (A)(ii) and (B)(ii).
(I) TERMINATION.—This paragraph shall terminate on
September 30, 2025.
(4) ADMINISTRATION OVERSIGHT.—
(A) APPROVAL AND PUBLICATION OF SYSTEMS AND MINIMUM PERFORMANCE STANDARDS.—Each system and minimum performance standard established under paragraph
(1) or paragraph (2) shall be submitted by the head of the
applicable Federal agency to the Administrator and shall
be subject to the approval of the Administrator. In making
a determination with respect to approval, the Administrator shall ensure that the minimum performance standard exceeds a de minimis level. The Administrator shall
publish on the Internet Web site of the Administration the
systems and minimum performance standards approved.
(B) SUBMISSION OF EVALUATION RESULTS BY AGENCY.—
The head of each covered Federal agency shall submit to
the Administrator the results of each evaluation conducted
under paragraph (1) or paragraph (2).
(5) REQUIREMENT OF NOTICE AND COMMENT.—Each system
and minimum performance standard established under paragraph (1) or paragraph (2) and each approval provided by the
Administrator under paragraph (4)(A), at least 60 days before
becoming effective, shall be preceded by the provision of notice
of and an opportunity for public comment on such system,
standard, or approval.
(6) INSPECTOR GENERAL AUDIT.—Not later than 1 year
after the date on which the Administrator implements the increased minimum performance standards under paragraph (3),
and periodically thereafter, the Inspector General of the Administration shall—
(A) conduct an audit on whether the small business
concerns subject to increased minimum performance standards under paragraph (3)(B) verified—
(i) the sales by and investments in the small business concerns—
(I) during the 5 fiscal years immediately preceding the fiscal year in which the small business
concern used such sales and investments to meet
an applicable increased performance standard;
and
(II) as a direct result of a Phase I award or
Phase II award made under subsection (cc) during
the covered period (as defined in paragraph
(3)(B)(iv)), consistent with the definition of Phase
III, as applicable;
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(ii) any third-party revenue the small business
concerns list as investments or incomes to meet the increased minimum performance standard—
(I) is a direct result of a Phase I award or
Phase II award made under subsection (cc) during
the covered period (as defined in paragraph
(3)(B)(iv)); and
(II) consistent with the requirements of the
Administrator as in effect on September 30, 2022,
or any successor requirements; and
(iii) any dollar amounts such small business concerns list as investments or income to meet such increased minimum performance standard the providence of which is unclear and that is not directly attributable to a Phase I award or Phase II award made
under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)), consistent with the definition of Phase III, as applicable;
(B) assess the self-certification requirements for the
minimum performance standards established under paragraph (2)(A)(ii) and the increased minimum performance
standards under paragraph (3)(B); and
(C) submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on
Small Business and the Committee on Science, Space, and
Technology of the House of Representatives a report on the
audit conducted under subparagraph (A) and the assessment conducted under subparagraph (B).
(7) INCREASED MINIMUM PERFORMANCE STANDARD DEFINED.—In this subsection, the term ‘‘increased minimum performance standard’’ means a minimum performance standard
established under paragraph (1)(A)(ii) or (2)(A)(ii) as modified
under subparagraph (A) or (B), respectively, of paragraph (3)
with respect to a small business concern.
(rr) PUBLICATION OF CERTAIN INFORMATION.—In order to increase the number of small businesses receiving awards under the
SBIR or STTR programs of participating agencies, and to simplify
the application process for such awards, the Administrator shall establish and maintain a public Internet Web site on which the Administrator shall publish such information relating to notice of and
application for awards under the SBIR program and STTR program
of each participating Federal agency as the Administrator determines appropriate.
(ss) REPORT ON ENHANCEMENT OF MANUFACTURING ACTIVITIES.—Not later than October 1, 2013, and annually thereafter, the
head of each Federal agency that makes more than $50,000,000 in
awards under the SBIR and STTR programs of the agency combined shall submit to the Administrator, for inclusion in the annual
report required under subsection (b)(7), information that includes—
(1) a description of efforts undertaken by the head of the
Federal agency to enhance United States manufacturing activities;
(2) a comprehensive description of the actions undertaken
each year by the head of the Federal agency in carrying out
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the SBIR or STTR program of the agency in support of Executive Order 13329 (69 Fed. Reg. 9181; relating to encouraging
innovation in manufacturing);
(3) an assessment of the effectiveness of the actions described in paragraph (2) at enhancing the research and development of United States manufacturing technologies and processes;
(4) a description of efforts by vendors selected to provide
discretionary technical assistance under subsection (q)(1) to
help SBIR and STTR concerns manufacture in the United
States; and
(5) recommendations that the program managers of the
SBIR or STTR program of the agency consider appropriate for
additional actions to increase the effectiveness of enhancing
manufacturing activities.
(tt) OUTSTANDING REPORTS AND EVALUATIONS.—
(1) IN GENERAL.—Not later than March 30, 2019, the Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate, the Committee on Small
Business of the House of Representatives, and the Committee
on Science, Space, and Technology of the House of Representatives—
(A) each report, evaluation, or analysis, as applicable,
described in subsection (b)(7), (g)(9), (o)(10), (y)(6)(C),
(gg)(6), (jj)(6), and (mm)(6); and
(B) metrics regarding, and an evaluation of, the authority provided to the National Institutes of Health, the
Department of Defense, and the Department of Education
under subsection (cc).
(2) INFORMATION REQUIRED.—Not later than December 31,
2018, the head of each agency that is responsible for carrying
out a provision described in subparagraph (A) or (B) of paragraph (1) shall submit to the Administrator any information
that is necessary for the Administrator to carry out the responsibilities of the Administrator under that paragraph.
(uu) COMMERCIALIZATION ASSISTANCE PILOT PROGRAMS.—
(1) PILOT PROGRAMS IMPLEMENTED.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), not later than one year after the date of the enactment
of this subsection, a covered agency shall implement a
commercialization assistance pilot program, under which
an eligible entity may receive a subsequent Phase II SBIR
award.
(B) EXCEPTION.—If the Administrator determines that
a covered agency has a program that is sufficiently similar
to the commercialization assistance pilot program established under this subsection, such covered agency shall not
be required to implement a commercialization assistance
pilot program under this subsection.
(2) PERCENT OF AGENCY FUNDS.—The head of each covered
agency may allocate not more than 5 percent of the funds allocated to the SBIR program of the covered agency for the purpose of making a subsequent Phase II SBIR award under the
commercialization assistance pilot program.
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(3) TERMINATION.—A commercialization assistance pilot
program established under this subsection shall terminate on
September 30, 2025.
(4) APPLICATION.—To be selected to receive a subsequent
Phase II SBIR award under a commercialization assistance
pilot program, an eligible entity shall submit to the covered
agency implementing such pilot program an application at
such time, in such manner, and containing such information as
the covered agency may require, including—
(A) an updated Phase II commercialization plan; and
(B) the source and amount of the matching funding required under paragraph (5).
(5) MATCHING FUNDING.—
(A) IN GENERAL.—The Administrator shall require, as
a condition of any subsequent Phase II SBIR award made
to an eligible entity under this subsection, that a matching
amount (excluding any fees collected by the eligible entity
receiving such award) equal to the amount of such award
be provided from an eligible third-party investor.
(B) INELIGIBLE SOURCES.—An eligible entity may not
use funding from ineligible sources to meet the matching
requirement of subparagraph (A).
(6) AWARD.—A subsequent Phase II SBIR award made to
an eligible entity under this subsection—
(A) may not exceed the limitation described under subsection (aa)(1); and
(B) shall be disbursed during Phase II.
(7) USE OF FUNDS.—The funds awarded to an eligible entity under this subsection may only be used for research and development activities that build on eligible entity’s Phase II program and ensure the research funded under such Phase II is
rapidly progressing towards commercialization.
(8) SELECTION.—In selecting eligible entities to participate
in a commercialization assistance pilot program under this
subsection, the head of a covered agency shall consider—
(A) the extent to which such award could aid the eligible entity in commercializing the research funded under
the eligible entity’s Phase II program;
(B) whether the updated Phase II commercialization
plan submitted under paragraph (4) provides a sound approach for establishing technical feasibility that could lead
to commercialization of such research;
(C) whether the proposed activities to be conducted
under such updated Phase II commercialization plan further improve the likelihood that such research will provide
societal benefits;
(D) whether the small business concern has progressed
satisfactorily in Phase II to justify receipt of a subsequent
Phase II SBIR award;
(E) the expectations of the eligible third-party investor
that provides matching funding under paragraph (5); and
(F) the likelihood that the proposed activities to be
conducted under such updated Phase II commercialization
plan using matching funding provided by such eligible
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third-party investor will lead to commercial and societal
benefit.
(9) EVALUATION REPORT.—Not later than 6 years after the
date of the enactment of this subsection, the Comptroller General of the United States shall submit to the Committee on
Science, Space, and Technology and the Committee on Small
Business of the House of Representatives, and the Committee
on Small Business and Entrepreneurship of the Senate, a report including—
(A) a summary of the activities of commercialization
assistance pilot programs carried out under this subsection;
(B) a detailed compilation of results achieved by such
commercialization assistance pilot programs, including the
number of eligible entities that received awards under
such programs;
(C) the rate at which each eligible entity that received
a subsequent Phase II SBIR award under this subsection
commercialized research of the recipient;
(D) the growth in employment and revenue of eligible
entities that is attributable to participation in a commercialization assistance pilot program;
(E) a comparison of commercialization success of eligible entities participating in a commercialization assistance
pilot program with recipients of an additional Phase II
SBIR award under subsection (ff);
(F) demographic information, such as ethnicity and geographic location, of eligible entities participating in a
commercialization assistance pilot program;
(G) an accounting of the funds used at each covered
agency that implements a commercialization assistance
pilot program under this subsection;
(H) the amount of matching funding provided by eligible third-party investors, set forth separately by source of
funding;
(I) an analysis of the effectiveness of the commercialization assistance pilot program implemented by each
covered agency; and
(J) recommendations for improvements to the commercialization assistance pilot program.
(10) DEFINITIONS.—For purposes of this subsection:
(A) COVERED AGENCY.—The term ‘‘covered agency’’
means a Federal agency required to have an SBIR program.
(B) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’
means a small business concern that has received a Phase
II award under an SBIR program and an additional Phase
II SBIR award under subsection (ff) from the covered agency to which such small business concern is applying for a
subsequent Phase II SBIR award.
(C) ELIGIBLE THIRD-PARTY INVESTOR.—The term ‘‘eligible third-party investor’’ means a small business concern
other than an eligible entity, a venture capital firm, an inFebruary 1, 2024

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dividual investor, a non-SBIR Federal, State or local government, or any combination thereof.
(D) INELIGIBLE SOURCES.—The term ‘‘ineligible
sources’’ means the following:
(i) The eligible entity’s internal research and development funds.
(ii) Funding in forms other than cash, such as inkind or other intangible assets.
(iii) Funding from the owners of the eligible entity, or the family members or affiliates of such owners.
(iv) Funding attained through loans or other
forms of debt obligations.
(E) SUBSEQUENT PHASE II SBIR AWARD.—The term
‘‘subsequent Phase II SBIR award’’ means an award granted to an eligible entity under this subsection to carry out
further commercialization activities for research conducted
pursuant to an SBIR program.
(vv) DUE DILIGENCE PROGRAM TO ASSESS SECURITY RISKS.—
(1) ESTABLISHMENT.—The head of each Federal agency required to establish an SBIR or STTR program, in coordination
with the Administrator, shall establish and implement a due
diligence program to assess security risks presented by small
business concerns seeking a federally funded award.
(2) RISKS.—Each program established under paragraph (1)
shall—
(A) assess, using a risk-based approach as appropriate,
the cybersecurity practices, patent analysis, employee
analysis, and foreign ownership of a small business concern seeking an award, including the financial ties and obligations (which shall include surety, equity, and debt obligations) of the small business concern and employees of
the small business concern to a foreign country, foreign
person, or foreign entity; and
(B) assess awards and proposals or applications, as applicable, using a risk-based approach as appropriate, including through the use of open-source analysis and analytical tools, for the nondisclosures of information required
under (g)(13).
(3) 71 ADMINISTRATIVE COSTS.—
(A) IN GENERAL.—In addition to the amount allocated
under subsection (mm)(1), each Federal agency required to
establish an SBIR program may allocate not more than 2
percent of the funds allocated to the SBIR program of the
Federal agency for the cost of establishing the due diligence program required under this subsection.
(B) REPORTING.—
(i) IN GENERAL.—Not later than December 31 of
the year in which this subparagraph is enacted, and
not later than December 31 of each year thereafter,
the head of a Federal agency that exercises the authority under subparagraph (A) shall submit to the
Committee on Small Business and the Committee on
71 See

subparagraph (C) for termination date.

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Science, Space, and Technology of the House of Representatives, the Committee on Small Business and
Entrepreneurship of the Senate, and the Administrator, for the covered year—
(I) the total funds allowed to be allocated for
the cost of establishing the due diligence program
required under this subsection;
(II) the total amount of funds obligated or expended under subparagraph (A); and
(III) the due diligence activities carried out or
to be carried out using amounts allocated under
subparagraph (A).
(ii) ANNUAL REPORT INCLUSION.—The Administrator shall include the information submitted by head
of a Federal agency under clause (i) in the next annual
report submitted under subsection (b)(7) after the Administrator receives such information.
(iii) COVERED YEAR.—In this subparagraph, the
term ‘‘covered year’’ means, with respect to the information required under clause (i), the year covered by
the annual report submitted under subsection (b)(7) in
which the Administrator is required to include such
information by clause (ii).
(C) TERMINATION DATE.—This paragraph shall terminate on September 30, 2025.
(ww) PROGRAM ON INNOVATION OPEN TOPICS.—
(1) ESTABLISHMENT.—Not later than 180 days after the
date of enactment of this subsection, the Secretary of Defense
shall establish innovation open topic activities using the SBIR
and STTR programs of the Department of Defense in order
to—
(A) increase the transition of commercial technology to
the Department of Defense;
(B) expand the small business nontraditional industrial base;
(C) increase commercialization derived from investments of the Department of Defense; and
(D) expand the ability for qualifying small business
concerns to propose technology solutions to meet the needs
of the Department of Defense.
(2) FREQUENCY.—The Secretary of Defense shall conduct
not less than 1 open topic announcement at each component of
the Department of Defense per fiscal year.
(3) BRIEFING.—Not later than 180 days after the date of
enactment of this subsection, the Secretary of Defense shall
provide a briefing on the establishment of the program required under paragraph (1) to—
(A) the Committee on Armed Services and the Committee on Small Business and Entrepreneurship of the
Senate; and
(B) the Committee on Small Business, the Committee
on Armed Services, and the Committee on Science, Space,
and Technology of the House of Representatives.
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(xx) ADDITIONAL PROVISIONS RELATING

230
TO

SOLICITATION TOP-

ICS.—

(1) IN GENERAL.—A Federal agency required to establish
an SBIR or STTR program shall implement a multi-level review and approval process within the Federal agency for solicitation topics to ensure adequate competition and that no private individual or entity is shaping the requirements for eligibility for the solicitation topic after the selection of the solicitation topic, except that the Federal agency may amend the requirements to clarify the solicitation topic.
(2) REFERRAL.—A Federal agency that does not comply
with paragraph (1) shall be referred to the Inspector General
of the Administration for further investigation.
SEC. 10. ø15 U.S.C. 639¿ (a) The Administration shall, as soon
as practicable each fiscal year make a comprehensive annual report
to the President, the President of the Senate, the Senate Select
Committee on Small Business, and the Speaker of the House of
Representatives. Such report shall include a description of the state
of small business in the Nation and the several States, and a 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) CYBERSECURITY REPORTS.—
(1) ANNUAL REPORT.—Not later than 180 days after the
date of enactment of this subsection, and every year thereafter,
the Administrator shall submit a report to the appropriate congressional committees that includes—
(A) a strategy to increase the cybersecurity of information technology infrastructure of the Administration;
(B) a supply chain risk management strategy and an
implementation plan to address the risks of foreign manufactured information technology equipment utilized by the
Administration, including specific risk mitigation activities
for components originating from entities with principal
places of business located in the People’s Republic of
China; and
(C) an account of—
(i) any incident that occurred at the Administration during the 2-year period preceding the date on
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which the first report is submitted, and, for subsequent reports, the 1-year period preceding the date of
submission; and
(ii) any action taken by the Administrator to respond to or remediate any such incident.
(2) FISMA REPORTS.—Each report required under paragraph (1) may be submitted as part of the report required
under section 3554 of title 44, United States Code.
(3) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to affect the reporting requirements of the
Administrator under chapter 35 of title 44, United States Code,
in particular the requirement to notify the Federal information
security incident center under section 3554(b)(7)(C)(ii) of such
title, any guidance issued by the Office of Management and
Budget, or any other provision of law or Federal policy.
(4) DEFINITIONS.—In this subsection:
(A) APPROPRIATE CONGRESSIONAL COMMITTEES.—The
term ‘‘appropriate congressional committees’’ means—
(i) the Committee on Small Business and Entrepreneurship of the Senate;
(ii) the Committee on Homeland Security and
Governmental Affairs of the Senate;
(iii) the Committee on Small Business of the
House of Representatives; and
(iv) the Committee on Oversight and Reform of
the House of Representatives.
(B) INCIDENT.—The term ‘‘incident’’ has the meaning
given the term in section 3552 of title 44, United States
Code.
(C) INFORMATION TECHNOLOGY.—The term ‘‘information technology’’ has the meaning given the term in section
3502 of title 44, United States Code.
(c) øRepealed by section 1091(f) of Public Law 104–66 (109
Stat. 722).¿
(d) For the purpose of aiding in carrying out the national policy
to insure that a fair proportion of the total purchases and contracts
for property and services for the Government be placed with small
business enterprises, and to maintain and strengthen the overall
economy of the Nation, the Department of Defense shall make an
annual report to the Committees on Small Business of the Senate
and the House of Representatives, showing the amount of funds 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
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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) 72 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 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
31 of each year, to the Senate Select Committee on Small Business
and Committee on Small Business of the House of Representatives
a sealed report with respect to—
(1) complaints alleging illegal conduct by employees of the
Administration which were received or acted upon by the 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,
72 Section 406(e) of Public Law 100–656, 102 Stat. 3876, added a new paragraph (2) without
designating a paragraph (1).

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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.
SEC. 11. ø15 U.S.C. 640¿ (a) The President is authorized to
consult with representatives of small-business concerns with a view
to encouraging the making by such persons with the approval of
the President of voluntary agreements and programs to further the
objectives of this Act.
(b) No act or omission to act pursuant to this Act which occurs
while this Act is in effect, if requested by the President pursuant
to a voluntary agreement or program approved under subsection (a)
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.
SEC. 12. ø15 U.S.C. 641¿ 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.
SEC. 13. ø15 U.S.C. 642¿ No loan shall be made or equipment,
facilities, or services furnished by the Administration under this
Act to any business enterprise unless the owners, partners, or 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)
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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
services, any person who, on the date such assistance or any part
thereof was rendered, or within one year prior thereto, shall have
served as an officer, attorney, agent, or employee of the Administration occupying a position or engaging in activities which the 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.
SEC. 14. ø15 U.S.C. 643¿ 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 costs incurred by the Administration.
SEC. 15. ø15 U.S.C. 644¿
(a) SMALL BUSINESS PROCUREMENTS.—
(1) IN GENERAL.—For purposes of this Act, small business
concerns shall receive any award or contract if such award or
contract is, in the determination of the Administrator and the
contracting agency, in the interest of—
(A) maintaining or mobilizing the full productive capacity of the United States;
(B) war or national defense programs; or
(C) assuring that a fair proportion of the total purchases and contracts for goods and services of the Government in each industry category (as defined under paragraph (2)) are awarded to small business concerns.
(2) INDUSTRY CATEGORY DEFINED.—
(A) IN GENERAL.—In this subsection, the term ‘‘industry category’’ means a discrete group of similar goods and
services, as determined by the Administrator in accordance
with the North American Industry Classification System
codes used to establish small business size standards, except that the Administrator shall limit an industry category to a greater extent than provided under the North
American Industry Classification System codes if the Administrator receives evidence indicating that further segmentation of the industry category is warranted—
(i) due to special capital equipment needs;
(ii) due to special labor requirements;
(iii) due to special geographic requirements, except
as provided in subparagraph (B);
(iv) due to unique Federal buying patterns or requirements; or
(v) to recognize a new industry.
(B) EXCEPTION FOR GEOGRAPHIC REQUIREMENTS.—The
Administrator may not further segment an industry category based on geographic requirements unless—
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(i) the Government typically designates the geographic area where work for contracts for goods or
services is to be performed;
(ii) Government purchases comprise the major
portion of the entire domestic market for such goods or
services; and
(iii) it is unreasonable to expect competition from
business concerns located outside of the general geographic area due to the fixed location of facilities, high
mobilization costs, or similar economic factors.
(3) DETERMINATIONS WITH RESPECT TO AWARDS OR CONTRACTS.—Determinations made pursuant to paragraph (1) may
be made for individual awards or contracts, any part of an
award or contract or task order, or for classes of awards or contracts or task orders.
(4) INCREASING PRIME CONTRACTING OPPORTUNITIES FOR
SMALL BUSINESS CONCERNS.—
(A) DESCRIPTION OF COVERED PROPOSED PROCUREMENTS.—The requirements of this paragraph shall apply to
a proposed procurement that includes in its statement of
work goods or services currently being supplied or performed by a small business concern and, as determined by
the Administrator—
(i) is in a quantity or of an estimated dollar value
which makes the participation of a small business concern as a prime contractor unlikely;
(ii) in the case of a proposed procurement for construction, seeks to bundle or consolidate discrete construction projects; or
(iii) is a solicitation that involves an unnecessary
or unjustified bundling of contract requirements.
(B) NOTICE TO PROCUREMENT CENTER REPRESENTATIVES.—With respect to proposed procurements described
in subparagraph (A), at least 30 days before issuing a solicitation and concurrent with other processing steps required before issuing the solicitation, the contracting agency shall provide a copy of the proposed procurement to the
procurement center representative of the contracting agency (as described in subsection (l)) along with a statement
explaining—
(i) why the proposed procurement cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities
less than the total requirement;
(ii) why delivery schedules cannot be established
on a realistic basis that will encourage the participation of small business concerns in a manner consistent
with the actual requirements of the Government;
(iii) why the proposed procurement cannot be offered to increase the likelihood of the participation of
small business concerns;
(iv) in the case of a proposed procurement for construction, why the proposed procurement cannot be offered as separate discrete projects; or
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(v) why the contracting agency has determined
that the bundling of contract requirements is necessary and justified.
(C) ALTERNATIVES TO INCREASE PRIME CONTRACTING
OPPORTUNITIES FOR SMALL BUSINESS CONCERNS.—If the
procurement center representative believes that the proposed procurement will make the participation of small
business concerns as prime contractors unlikely, the procurement center representative, within 15 days after receiving the statement described in subparagraph (B), shall
recommend to the contracting agency alternative procurement methods for increasing prime contracting opportunities for small business concerns.
(D) FAILURE TO AGREE ON AN ALTERNATIVE PROCUREMENT METHOD.—If the procurement center representative
and the contracting agency fail to agree on an alternative
procurement method, the Administrator shall submit the
matter to the head of the appropriate department or agency for a determination.
(5) CONTRACTS FOR SALE OF GOVERNMENT PROPERTY.—
With respect to a contract for the sale of Government property,
small business concerns shall receive any such contract if, in
the determination of the Administrator and the disposal agency, the award of such contract is in the interest of assuring
that a fair proportion of the total sales of Government property
be made to small business concerns.
(6) SALE OF ELECTRICAL POWER OR OTHER PROPERTY.—
Nothing in this subsection shall be construed to change any
preferences or priorities established by law with respect to the
sale of electrical power or other property by the Federal Government.
(7) COSTS EXCEEDING FAIR MARKET PRICE.—A contract may
not be awarded under this subsection if the cost of the contract
to the awarding agency exceeds a fair market price.
(b) 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 auFebruary 1, 2024

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thorized 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 provison of law, total
labor surplus area set-asides pursuant to Defense Manpower Policy
Number 4 (32A C.F.R. Chapter 1) or any successor policy shall be
authorized if the Secretary or his designee specifically determines
that there is a reasonable expectation that offers will be obtained
from a sufficient number of eligible concerns so that awards will be
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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 a Federal department or agency
having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers, and each such Federal department
or agency shall—
(A) provide opportunities for the participation of small
business concerns during acquisition planning processes
and in acquisition plans; and
(B) invite the participation of the appropriate Director
of Small and Disadvantaged Business Utilization in acquisition planning processes and provide that Director access
to acquisition plans.
(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 an acquisition plan for a procurement
involves a substantial bundling of contract requirements, the
head of a contracting agency shall publish a notice on a public
website that such determination has been made not later than
7 days after making such determination. Any solicitation for a
procurement related to the acquisition plan may not be published earlier than 7 days after such notice is published. Along
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with the publication of the solicitation, the head of a contracting agency shall publish a justification for the determination, which shall include the following information:
(A) The specific benefits anticipated to be derived from
the bundling of contract requirements and a determination
that such benefits justify the bundling.
(B) An identification of any alternative contracting approaches that would involve a lesser degree of bundling of
contract requirements.
(C) An assessment of—
(i) the specific impediments to participation by
small business concerns as prime contractors that result from the bundling of contract requirements; and
(ii) the specific actions designed to maximize participation of small business concerns as subcontractors
(including suppliers) at various tiers under the contract or contracts that are awarded to meet the requirements.
(4) CONTRACT TEAMING.—
(A) IN GENERAL.—In the case of a solicitation of offers
for a bundled or consolidated contract that is issued by the
head of an agency, a small business concern that provides
for use of a particular team of subcontractors or a joint
venture of small business concerns may submit an offer for
the performance of the contract.
(B) EVALUATION OF OFFERS.—The head of the agency
shall evaluate an offer described in subparagraph (A) in
the same manner as other offers, with due consideration to
the capabilities of all of the proposed subcontractors or
members of the joint venture as follows:
(i) TEAMS.—When evaluating an offer of a small
business prime contractor that includes a proposed
team of small business subcontractors, the head of the
agency shall consider the capabilities and past performance of each first tier subcontractor that is part of
the team as the capabilities and past performance of
the small business prime contractor.
(ii) JOINT VENTURES.—When evaluating an offer of
a joint venture of small business concerns, if the joint
venture does not demonstrate sufficient capabilities or
past performance to be considered for award of a contract opportunity, the head of the agency shall consider the capabilities and past performance of each
member of the joint venture as the capabilities and
past performance of the joint venture.
(C) STATUS AS A SMALL BUSINESS CONCERN.—Participation of a small business concern in a team or a joint venture under this paragraph shall not affect the status of
that concern as a small business concern for any other
purpose.
(5) PAST PERFORMANCE RATINGS OF JOINT VENTURES FOR
SMALL BUSINESS CONCERNS.—With respect to evaluating an
offer for a prime contract made by a small business concern
that previously participated in a joint venture with another
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business concern (whether or not such other business concern
was a small business concern), the Administrator shall establish regulations—
(A) allowing the small business concern to elect to use
the past performance of the joint venture if the small business concern has no relevant past performance of its own;
(B) requiring the small business concern, when making an election under subparagraph (A)—
(i) to identify to the contracting officer the joint
venture of which the small business concern was a
member; and
(ii) to inform the contracting officer what duties
and responsibilities the small business concern carried
out as part of the joint venture; and
(C) requiring a contracting officer, if the small business concern makes an election under subparagraph (A), to
consider the past performance of the joint venture when
evaluating the past performance of the small business concern, giving due consideration to the information provided
under subparagraph (B)(ii).
(f) CONTRACTING PREFERENCE FOR SMALL BUSINESS CONCERNS
A MAJOR DISASTER AREA.—
(1) DEFINITION.—In this subsection, the term ‘‘disaster
area’’ means the area for which the President has declared a
major disaster, during the period of the declaration.
(2) CONTRACTING PREFERENCE.—An agency shall provide a
contracting preference for a small business concern located in
a disaster area if the small business concern will perform the
work required under the contract in the disaster area.
(3) CREDIT FOR MEETING CONTRACTING GOALS.—If an agency awards a contract to a small business concern under the circumstances described in paragraph (2), the value of the contract shall be doubled for purposes of determining compliance
with the goals for procurement contracts under subsection
(g)(1)(A).
(g) 73
(1) GOVERNMENTWIDE GOALS.—
(A) ESTABLISHMENT.—The President shall annually establish Governmentwide 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 in accordance
with the following:
(i) The Governmentwide goal for participation by
small business concerns shall be established at not
less than 23 percent of the total value of all prime contract awards for each fiscal year. In meeting this goal,
the Government shall ensure the participation of

73 So in law. Paragraph (1) used to run into the subsection designation prior to an amendment
that was enacted to revise such paragraph in its entirety.

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small business concerns from a wide variety of industries and from a broad spectrum of small business concerns within each industry.
(ii) The Governmentwide goal for participation by
small business concerns owned and controlled by service-disabled veterans shall be established at not less
than 5 percent of the total value of all prime contract
and subcontract awards for each fiscal year.
(iii) The Governmentwide goal for participation by
qualified HUBZone small business concerns shall be
established at not less than 3 percent of the total
value of all prime contract and subcontract awards for
each fiscal year.
(iv) The Governmentwide goal for participation by
small business concerns owned and controlled by 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.
(v) The Governmentwide goal for participation by
small business concerns owned and controlled by
women shall be established at not less than 5 percent
of the total value of all prime contract and subcontract
awards for each fiscal year.
(B) ACHIEVEMENT OF GOVERNMENTWIDE GOALS.—Each
agency shall have an annual goal that presents, for that
agency, the maximum practicable opportunity for small
business concerns, small business concerns owned and 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 Small Business Administration and the Administrator for 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 Governmentwide prime contract goal established by the President pursuant to this paragraph.
(2)(A) The head of each Federal agency shall, after consultation
with the Administration, establish goals for the participation by
small business concerns, by small business concerns owned and
controlled by service-disabled veterans, by qualified HUBZone
small business concerns, by small business concerns owned and
controlled by socially and economically disadvantaged individuals,
and by small business concerns owned and controlled by women in
procurement contracts of such agency. Such goals shall separately
address prime contract awards and subcontract awards for each
category of small business covered.
(B) Goals established under this subsection shall be jointly 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-disFebruary 1, 2024

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abled veterans, 74 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 perform such contracts and to
perform subcontracts under such contracts.
(C) Whenever the Administration and the head of any Federal
agency fail to agree on established goals, the disagreement shall be
submitted to the Administrator for Federal Procurement Policy for
final determination.
(D) After establishing goals under this paragraph for a fiscal
year, the head of each Federal agency shall develop a plan for
achieving such goals at both the prime contract and the subcontract level, which shall apportion responsibilities among the
agency’s acquisition executives and officials. In establishing goals
under this paragraph, the head of each Federal agency shall make
a consistent effort to annually expand participation by small business concerns from each industry category in procurement contracts and subcontracts of such agency, including participation by
small business concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned and
controlled by women.
(E) The head of each Federal agency, in attempting to
attain expanded participation under subparagraph (D),
shall consider—
(i) contracts awarded as the result of unrestricted
competition; and
(ii) contracts awarded after competition restricted
to eligible small business concerns under this section
and under the program established under section 8(a).
(F)(i) Each procurement employee or program manager described in clause (ii) shall communicate to the subordinates of the procurement employee or program manager the importance of achieving goals established under
subparagraph (A).
(ii) A procurement employee or program manager described in this clause is a senior procurement executive,
senior program manager, or Director of Small and Disadvantaged Business Utilization of a Federal agency having contracting authority.
(3) 75 First tier subcontracts that are awarded by Management
and Operating contractors sponsored by the Department of Energy
to small business concerns, small businesses concerns owned and
controlled by service disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and controlled
74 The amendments made by section 502(b) of Public Law 106–50 (113 Stat. 247) were executed as to the probable intent of the Congress. The reference to ‘‘section 15’’ should have been
to ‘‘section 15(g)(2)’’.
75 The margin (and placement) of paragraph (3) reflects the probable intent of Congress.
Section 318, title III of Division D of Public Law 113–76 provides for an amendment to Public
Law 85–536 by adding a paragraph (3) at the end of subsection (g). Such amendment (as enacted into law) did not set this new paragraph (3) on it’s own margin and therefore would technically run into clause (ii) of paragraph (2)(F). However, the version above does reflect the proper margin.

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by socially and economically disadvantaged individuals, and small
business concerns owned and controlled by women, shall be considered toward the annually established agency and Government-wide
goals for procurement contracts awarded.
(h) REPORTING ON GOALS FOR PROCUREMENT CONTRACTS
AWARDED TO SMALL BUSINESS CONCERNS.—
(1) AGENCY REPORTS.—At the conclusion of each fiscal
year, the head of each Federal agency shall submit to the Administrator a report describing—
(A) the extent of the participation by small business
concerns, small business concerns owned and controlled by
veterans (including service-disabled veterans), qualified
HUBZone small business concerns, small business concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns
owned and controlled by women in the procurement contracts of such agency during such fiscal year;
(B) whether the agency achieved the goals established
for the agency under subsection (g)(2) with respect to such
fiscal year;
(C) any justifications for a failure to achieve such
goals; and
(D) a remediation plan with proposed new practices to
better meet such goals, including analysis of factors leading to any failure to achieve such goals.
(2) REPORTS BY ADMINISTRATOR.—Not later than 60 days
after receiving a report from each Federal agency under paragraph (1) with respect to a fiscal year, the Administrator shall
submit to the President and Congress, and to make available
on a public Web site, a report that includes—
(A) a copy of each report submitted to the Administrator under paragraph (1);
(B) a determination of whether each goal established
by the President under subsection (g)(1) for such fiscal
year was achieved;
(C) a determination of whether each goal established
by the head of a Federal agency under subsection (g)(2) for
such fiscal year was achieved;
(D) the reasons for any failure to achieve a goal established under paragraph (1) or (2) of subsection (g) for such
fiscal year and a description of actions planned by the applicable agency to address such failure, including the Administrator’s comments and recommendations on the proposed remediation plan; and
(E) for the Federal Government and each Federal
agency, an analysis of the number and dollar amount of
prime contracts awarded during such fiscal year to—
(i) small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through unrestricted competition;
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(V) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns for purposes of the
initial contract; and
(VI) that were awarded using a procurement
method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business
concerns, small business concerns owned and controlled by socially and economically disadvantaged
individuals, small business concerns owned and
controlled by women, or a subset of any such concerns;
(ii) small business concerns owned and controlled
by service-disabled veterans—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by service-disabled veterans;
(V) through unrestricted competition;
(VI) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns owned and controlled by service-disabled veterans for purposes of
the initial contract; and
(VII) that were awarded using a procurement
method that restricted competition to qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or
a subset of any such concerns;
(iii) qualified HUBZone small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to qualified HUBZone small business concerns;
(V) through unrestricted competition where a
price evaluation preference was used;
(VI) through unrestricted competition where a
price evaluation preference was not used;
(VII) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be qualified HUBZone small business concerns
for purposes of the initial contract; and
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(VIII) that were awarded using a procurement
method that restricted competition to small business concerns owned and controlled by service-disabled veterans, small business concerns owned
and controlled by socially and economically disadvantaged individuals, small business concerns
owned and controlled by women, or a subset of
any such concerns;
(iv) small business concerns owned and controlled
by socially and economically disadvantaged individuals—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition;
(VI) by reason of that concern’s certification
as a small business owned and controlled by socially and economically disadvantaged individuals;
(VII) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns owned and controlled by socially and economically disadvantaged
individuals for purposes of the initial contract;
and
(VIII) that were awarded using a procurement
method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business
concerns, small business concerns owned and controlled by women, or a subset of any such concerns;
(v) small business concerns owned by an Indian
tribe (as such term is defined in section 8(a)(13)) other
than an Alaska Native Corporation—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns owned by an Indian
tribe other than an Alaska Native Corporation for
purposes of the initial contract;
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(vi) small business concerns owned by a Native
Hawaiian Organization—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns owned by a Native
Hawaiian Organization for purposes of the initial
contract;
(vii) small business concerns owned by an Alaska
Native Corporation—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
to be small business concerns owned by an Alaska
Native Corporation for purposes of the initial contract; and
(viii) small business concerns owned and controlled by women—
(I) in the aggregate;
(II) through competitions restricted to small
business concerns;
(III) through competitions restricted using the
authority under section 8(m)(2);
(IV) through competitions restricted using the
authority under section 8(m)(2) and in which the
waiver authority under section 8(m)(3) was used;
(V) through sole source contracts awarded
using the authority under subsection 8(m)(7);
(VI) through sole source contracts awarded
using the authority under section 8(m)(8);
(VII) by industry for contracts described in
subclause (III), (IV), (V), or (VI);
(VIII) through unrestricted competition;
(IX) that were purchased by another entity
after the initial contract was awarded and as a result of the purchase, would no longer be deemed
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trolled by women for purposes of the initial contract; and
(X) that were awarded using a procurement
method that restricted competition to 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, or a subset of any such concerns; and
(F) for the Federal Government, the number, dollar
amount, and distribution with respect to the North American Industry Classification System of subcontracts awarded during such fiscal year to small business concerns,
small business concerns owned and controlled by servicedisabled 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,
provided that such information is publicly available
through data systems developed pursuant to the Federal
Funding Accountability and Transparency Act of 2006
(Public Law 109–282), or otherwise available as provided
in paragraph (3).
(3) PROCUREMENT DATA.—
(A) FEDERAL PROCUREMENT DATA SYSTEM.—
(i) IN GENERAL.—To assist in the implementation
of this section, the Administrator shall have access to
information collected through the Federal Procurement Data System, Federal Subcontracting Reporting
System, or any new or successor system.
(ii) GSA REPORT.—On the date that the Administrator makes available the report required under paragraph (2), the Administrator of the General Services
Administration shall submit to the President and Congress, and shall make available on a public website, a
report in the same form and manner, and including
the same information, as the report required under
paragraph (2). The report shall include all procurements made for the period covered by the report and
may not exclude any contract awarded.
(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 Administrator, procurement information collected through agency
data collection sources in existence at the time of the request. Contracting agencies shall not be required to establish new data collection systems to provide such data.
(4) BEST IN CLASS SMALL BUSINESS PARTICIPATION REPORTING.—
(A) ADDENDUM.—In addition to the requirements
under paragraph (2) and for each best in class designation,
the Administrator shall include in the report required by
such paragraph—
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(i) the total amount of spending Governmentwide
in such designation; and
(ii) the number of small business concerns awarded contracts and the dollar amount of such contracts
awarded within each such designation to each of the
following—
(I) qualified HUBZone small business concerns;
(II) small business concerns owned and controlled by women;
(III) small business concerns owned and controlled by service-disabled veterans; and
(IV) small business concerns owned and controlled by socially and economically disadvantaged
individuals.
(B) BEST IN CLASS DEFINED.—The term ‘‘best in class’’
has the meaning given such term by the Director of the
Office of Management and Budget.
(C) EFFECTIVE DATE.—The Administrator shall report
on the information described by subparagraph (A) beginning on the date that such information is available in the
Federal Procurement Data System, the System for Award
Management, or any successor to such systems.
(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 the micro-purchase threshold, but not greater than the simplified acquisition threshold 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
712 of the Business Opportunity Development Reform Act of 1988
(Public Law 100–656; 15 U.S.C. 644 note), or section 7102 of the
Federal Acquisition Streamlining Act of 1994.
(k) There is hereby established in each Federal agency having
procurement powers an office to be known as the ‘‘Office of Small
and Disadvantaged Business Utilization’’. The management of each
such office shall be vested in an officer or employee of such agency,
with experience serving in any combination of the following roles:
program manager, deputy program manager, or assistant program
manager for Federal acquisition program; chief engineer, systems
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ness technical advisor; contracts administrator for Federal Government contracts; attorney specializing in Federal procurement law;
small business liaison officer; officer or employee who managed
Federal Government contracts for a small business; or individual
whose primary responsibilities were for the functions and duties of
section 8, 15, 31, 36, or 44 of this Act. Such officer or employee—
(1) shall be known as the ‘‘Director of Small and Disadvantaged Business Utilization’’ for such agency;
(2) shall be appointed by the head of such agency to a position that is a Senior Executive Service position (as such term
is defined under section 3132(a) of title 5, United States Code),
except that, for any agency in which the positions of Chief Acquisition Officer and senior procurement executive (as such
terms are defined under section 44(a) of this Act) are not Senior Executive Service positions, the Director of Small and Disadvantaged Business Utilization may be appointed to a position compensated at not less than the minimum rate of basic
pay payable for grade GS–15 of the General Schedule under
section 5332 of such title (including comparability payments
under section 5304 of such title);
(3) shall be responsible only to (including with respect to
performance appraisals), and report directly and exclusively to,
the head of such agency or to the deputy of such head, except
that the Director for the Office of the Secretary of Defense
shall be responsible only to (including with respect to performance appraisals), and report directly and exclusively to, such
Secretary or the Secretary’s designee;
(4) shall be responsible for the implementation and execution of the functions and duties under sections 8, 15, 31, 36,
and 44 of this Act which relate to such agency;
(5) shall 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) shall assist small business concerns to obtain payments, required late payment interest penalties, or information
regarding payments due to such concerns from an executive
agency or a contractor, in conformity with chapter 39 of title
31, United States Code, or any other protection for contractors
or subcontractors (including suppliers) that is included in the
Federal Acquisition Regulation or any individual agency supplement to such Government-wide regulation;
(7) shall have supervisory authority over personnel of such
agency to the extent that the functions and duties of such personnel relate to functions and duties under sections 8, 15, 31,
36, and 44 of this Act;
(8) shall assign a small business technical adviser to each
office to which the Administration has assigned a procurement
center representative—
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(A) who shall be a full-time employee of the procuring
activity and shall be well qualified, technically trained and
familiar with the supplies or services purchased at the activity; and
(B) whose principal duty shall be to assist the Administration procurement center representative in his duties
and functions relating to sections 8, 15, 31, 36, and 44 of
this Act,
(9) shall cooperate, and consult on a regular basis, with
the Administration with respect to carrying out the functions
and duties described in paragraph (4) of this subsection;
(10) shall make recommendations to contracting officers as
to whether a particular contract requirement should be awarded pursuant to subsection (a) or section 8, 15, 31, or 36 of this
Act, and the failure of the contracting officer to accept any
such recommendations shall be documented and included within the appropriate contract file;
(11) shall review and advise such agency on any decision
to convert an activity performed by a small business concern
to an activity performed by a Federal employee;
(12) shall provide to the Chief Acquisition Officer and senior procurement executive of such agency advice and comments
on acquisition strategies, market research, and justifications
related to section 44 of this Act;
(13) may provide training to small business concerns and
contract specialists, except that such training may only be provided to the extent that the training does not interfere with
the Director carrying out other responsibilities under this subsection;
(14) shall receive unsolicited proposals and, when appropriate, forward such proposals to personnel of the activity responsible for reviewing such proposals;
(15) shall carry out exclusively the duties enumerated in
this Act, and shall, while the Director, not hold any other title,
position, or responsibility, except as necessary to carry out responsibilities under this subsection;
(16) shall submit, each fiscal year, to the Committee on
Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate
a report describing—
(A) the training provided by the Director under paragraph (13) in the most recently completed fiscal year;
(B) the percentage of the budget of the Director used
for such training in the most recently completed fiscal
year;
(C) the percentage of the budget of the Director used
for travel in the most recently completed fiscal year; and
(D) any failure of the agency to comply with section 8,
15, 31, or 36;
(17) shall, when notified by a small business concern prior
to the award of a contract that the small business concern believes that a solicitation, request for proposal, or request for
quotation unduly restricts the ability of the small business concern to compete for the award—
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(A) submit the notice of the small business concern to
the contracting officer and, if necessary, recommend ways
in which the solicitation, request for proposal, or request
for quotation may be altered to increase the opportunity
for competition;
(B) inform the advocate for competition of such agency
(as established under section 1705 of title 41, United
States Code, or section 3249 of title 10, United States
Code) of such notice; and
(C) ensure that the small business concern is aware of
other resources and processes available to address unduly
restrictive provisions in a solicitation, request for proposal,
or request for quotation, even if such resources and processes are provided by such agency, the Administration, the
Comptroller General, or a procurement technical assistance program established under chapter 388 of title 10,
United States Code;
(18) shall review summary data provided by purchase card
issuers of purchases made by the agency greater than the
micro-purchase threshold (as defined under section 1902 of
title 41, United Stated Code) and less than the simplified acquisition threshold to ensure that the purchases have been
made in compliance with the provisions of this Act and have
been properly recorded in the Federal Procurement Data System, if the method of payment is a purchase card issued by the
Department of Defense pursuant to section 4754 of title 10,
United States Code, or by the head of an executive agency pursuant to section 1909 of title 41, United States Code;
(19) shall provide assistance to a small business concern
awarded a contract or subcontract under this Act or under title
10 or title 41, United States Code, in finding resources for education and training on compliance with contracting regulations
(including the Federal Acquisition Regulation) after award of
such a contract or subcontract;
(20) shall review all subcontracting plans required by
paragraph (4) or (5) of section 8(d) to ensure that the plan provides maximum practicable opportunity for small business concerns to participate in the performance of the contract to which
the plan applies; 76
(21) shall consult with the appropriate personnel from the
relevant Federal agency to assist small business concerns participating in a SBIR or STTR program under section 9 with researching applicable solicitations for the award of a Federal
contract (particularly with the Federal agency that has a funding agreement, as defined under section 9, with the concern)
to market the research developed by such concern under such
SBIR or STTR program.
This subsection shall not apply to the Administration.
(l) PROCUREMENT CENTER REPRESENTATIVES.—
(1) ASSIGNMENT AND ROLE.—The Administrator shall assign to each major procurement center a procurement center
representative with such assistance as may be appropriate.
76 Probably

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(2) ACTIVITIES.—A 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, barriers to small business participation in Federal contracting previously imposed on
goods and services through acquisition method coding or
similar procedures, and recommend to personnel of the appropriate activity the prompt reevaluation of such barriers;
(C) review barriers to small business participation in
Federal contracting arising out of restrictions on the rights
of the United States in technical data, and, when appropriate, recommend that personnel of the appropriate activity initiate a review of the validity of such an asserted restriction;
(D) review any bundled or consolidated solicitation or
contract in accordance with this Act;
(E) have access to procurement records and other data
of the procurement center commensurate with the level of
such representative’s approved security clearance classification, with such data provided upon request in electronic format, when available;
(F) receive unsolicited proposals from small business
concerns and transmit such proposals to personnel of the
activity responsible for reviewing such proposals, who shall
furnish the procurement center representative with information regarding the disposition of any such proposal;
(G) consult with the Director the Office of Small and
Disadvantaged Business Utilization of that agency and the
agency personnel described in paragraph (7) and (8) of subsection (k) with regard to agency insourcing decisions covered by subsection (k)(11);
(H) be an advocate for the maximum practicable utilization of small business concerns in Federal contracting,
including by advocating against the consolidation or bundling of contract requirements when not justified;
(I) assist small business concerns with finding resources for education and training on compliance with contracting regulations (including the Federal Acquisition
Regulation) after award of a contract or subcontract;
(J) consult with the appropriate personnel from the
relevant Federal agency, to assist small business concerns
participating in a SBIR or STTR program under section 9
with Phase III; 77
(K) carry out any other responsibility assigned by the
Administrator.
(3) APPEALS.—A procurement center representative is authorized to appeal the failure to act favorably on any rec77 Probably

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ommendation made pursuant to paragraph (2). Such appeal
shall be filed and processed in the same manner and subject
to the same conditions and limitations as an appeal filed by
the Administrator pursuant to subsection (a).
(4) The Administration shall assign and co-locate at least two
small business technical advisers to each major procurement center
in addition to such other advisers as may be authorized from time
to time. The sole duties of such advisers shall be to assist the 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) POSITION REQUIREMENTS.—
(A) IN GENERAL.—A procurement center representative
assigned under this subsection shall—
(i) be a full-time employee of the Administration;
(ii) be fully qualified, technically trained, and familiar with the goods and services procured by the
major procurement center to which that representative
is assigned; and
(iii) have the certification described in subparagraph (C).
(B) COMPENSATION.—The Administrator shall establish personnel positions for procurement center representatives assigned under this subsection, which are classified
at a grade level of the General Schedule sufficient to attract and retain highly qualified personnel.
(C) CERTIFICATION REQUIREMENTS.—
(i) IN GENERAL.—Consistent with the requirements of clause (ii), a procurement center representative shall have a Level III Federal Acquisition Certification in Contracting (or any successor certification) or
the equivalent Department of Defense certification, except that any person serving in such a position on or
before January 3, 2013, may continue to serve in that
position for a period of 5 years without the required
certification.
(ii) DELAY OF CERTIFICATION REQUIREMENTS.—
(I) TIMING.—The certification described in
clause (i) is not required for any person serving as
a procurement center representative until the
date that is one calendar year after the date such
person is appointed as a procurement center representative.
(II) APPLICATION.—The requirements of subclause (I) shall—
(aa) be included in any initial job posting
for the position of a procurement center representative; and
(bb) apply to any person appointed as a
procurement center representative after January 3, 2013.
(6) MAJOR PROCUREMENT CENTER DEFINED.—For purposes
of this subsection, the term ‘‘major procurement center’’ means
a procurement center that, in the opinion of the Administrator,
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purchases substantial dollar amounts of goods or services, including goods or services that are commercially available.
(7) TRAINING.—
(A) AUTHORIZATION.—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) LIMITATION.—A procurement center representative
may provide training under subparagraph (A) only to the
extent that the training does not interfere with the representative carrying out other activities under this subsection.
(8) ANNUAL BRIEFING AND REPORT.—A procurement center
representative shall prepare and personally deliver an annual
briefing and report to the head of the procurement center to
which such representative is assigned. Such briefing and 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 60 calendar days after receipt, respond, in writing, to each recommendation made by
such representative.
(9) SCOPE OF REVIEW.—The Administrator—
(A) may not limit the scope of review by the procurement center representative for any solicitation of a contract or task order without regard to whether the contract
or task order or part of the contract or task order is set
aside for small business concerns, whether 1 or more contracts or task order awards are reserved for small business
concerns under a multiple award contract, or whether or
not the solicitation would result in a bundled or consolidated contract (as defined in subsection (s)) or a bundled
or consolidated task order; and
(B) shall, unless the contracting agency requests a review, limit the scope of review by the procurement center
representative for any solicitation of a contract or task
order if such solicitation is awarded by or for the Department of Defense and—
(i) is conducted pursuant to section 22 of the Arms
Export Control Act (22 U.S.C. 2762);
(ii) is a humanitarian operation as defined in section 401(e) of title 10, United States Code;
(iii) is for a contingency operation, as defined in
section 101(a)(13) of title 10, United States Code;
(iv) is to be awarded pursuant to an agreement
with the government of a foreign country in which
Armed Forces of the United States are deployed; or
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(v) both the place of award and the place of performance are outside of the United States and its territories.
(m) ADDITIONAL DUTIES OF PROCUREMENT CENTER REPRESENTATIVES.—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 increase, insofar as
possible, the number and dollar value of procurements that may be
used for the programs established under this section and section
8(a).
(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) LIMITATIONS ON SUBCONTRACTING.—A concern may not be
awarded a contract under subsection (a) as a small business concern unless the concern agrees to satisfy the requirements of section 46.
(p) ACCESS TO DATA.—
(1) BUNDLED OR CONSOLIDATED CONTRACT DEFINED.—In
this subsection, the term ‘‘bundled or consolidated contract’’
has the meaning given in subsection (s).
(2) DATABASE.—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—
(A) each bundled contract awarded by a Federal agency; and
(B) each small business concern that has been displaced as a prime contractor as a result of the award of
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 BUNDLED OR CONSOLIDATED CONTRACTS.—
(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
bundled or consolidated contracts to the Committees on
Small Business of the House of Representatives and the
Senate.
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(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
or consolidated contracts by Federal agencies; and
(ii) a description of the activities with respect to
previously bundled or consolidated 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 included in bundled or consolidated contracts; and
(II) with respect to each bundled or consolidated contract, data or information on—
(aa) the justification for the bundling of
contract requirements or the consolidation of
contract requirements (as applicable);
(bb) the cost savings realized by the bundling of contract requirements or the consolidation of contract requirements (as applicable) over the life of the contract;
(cc) the extent to which maintaining contract requirements in a bundled or consolidated contract is projected to result in continued cost savings;
(dd) the extent to which the bundling of
contract requirements or the consolidation of
contract requirements (as applicable) 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 or the consolidation of contract
requirements (as applicable) on small business concerns unable to compete as prime
contractors for the contract 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 to the Administrator data
and information described in paragraphs (2) and (4).
(q) REPORTS RELATED TO PROCUREMENT CENTER REPRESENTATIVES.—
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(1) TEAMING AND JOINT VENTURE REQUIREMENTS.—
(A) IN GENERAL.—Each Federal agency shall include in
each solicitation for any multiple award contract above the
substantial bundling threshold of the Federal agency a
provision soliciting bids from any responsible source, including responsible small business concerns and teams or
joint ventures of small business concerns.
(B) TEAMS.—When evaluating an offer of a small business prime contractor that includes a proposed team of
small business subcontractors for any multiple award contract above the substantial bundling threshold of the Federal agency, the head of the agency shall consider the capabilities and past performance of each first tier subcontractor that is part of the team as the capabilities and past
performance of the small business prime contractor.
(C) JOINT VENTURES.—When evaluating an offer of a
joint venture of small business concerns for any multiple
award contract above the substantial bundling threshold of
the Federal agency, if the joint venture does not demonstrate sufficient capabilities or past performance to be
considered for award of a contract opportunity, the head of
the agency shall consider the capabilities and past performance of each member of the joint venture as the capabilities and past performance of the joint venture.
(2) POLICIES ON REDUCTION OF CONTRACT BUNDLING.—
(A) IN GENERAL.—Not later than 1 year after the date
of enactment of this subsection, the Federal Acquisition
Regulatory Council established under section 25(a) of the
Office of Federal Procurement Policy Act (41 U.S.C.
4219(a)) shall amend the Federal Acquisition Regulation
issued under section 25 of such Act to—
(i) establish a Government-wide policy regarding
contract bundling, including regarding the solicitation
of teaming and joint ventures under paragraph (1);
and
(ii) require that the policy established under
clause (i) be published on the website of each Federal
agency.
(B) RATIONALE FOR CONTRACT BUNDLING.—Not later
than 30 days after the date on which the head of a Federal
agency submits data certifications to the Administrator for
Federal Procurement Policy, the head of the Federal agency shall publish on the website of the Federal agency a list
and rationale for any bundled contract for which the Federal agency solicited bids or that was awarded by the Federal agency.
(3) REPORTING.—Not later than 90 days after the date of
enactment of this subsection, and every 3 years thereafter, the
Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report regarding procurement center representatives and commercial
market representatives, which shall—
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(A) identify each area for which the Administration
has assigned a procurement center representative or a
commercial market representative;
(B) explain why the Administration selected the areas
identified under subparagraph (A); and
(C) describe the activities performed by procurement
center representatives and commercial market representatives.
(r) MULTIPLE AWARD CONTRACTS.—Not later than 1 year after
the date of enactment of this subsection, the Administrator for Federal Procurement Policy and the Administrator, in consultation
with the Administrator of General Services, shall, by regulation, establish guidance under which Federal agencies may, at their discretion—
(1) set aside part or parts of a multiple award contract for
small business concerns, including the subcategories of small
business concerns identified in subsection (g)(2);
(2) notwithstanding the fair opportunity requirements
under section 3406(c) of title 10, United States Code, and section 303J(b) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253j(b)), set aside orders placed
against multiple award contracts for small business concerns,
including the subcategories of small business concerns identified in subsection (g)(2); and
(3) reserve 1 or more contract awards for small business
concerns under full and open multiple award procurements, including the subcategories of small business concerns identified
in subsection (g)(2).
(s) DATA QUALITY IMPROVEMENT PLAN.—
(1) IN GENERAL.—Not later than October 1, 2015, the Administrator of the Small Business Administration, in consultation with the Small Business Procurement Advisory Council,
the Administrator for Federal Procurement Policy, and the Administrator of General Services, shall develop a plan to improve the quality of data reported on bundled or consolidated
contracts in the Federal procurement data system (described in
section 1122(a)(4)(A) of title 41, United States Code).
(2) PLAN REQUIREMENTS.—The plan shall—
(A) describe the roles and responsibilities of the Administrator of the Small Business Administration, each Director of Small and Disadvantaged Business Utilization,
the Administrator for Federal Procurement Policy, the Administrator of General Services, senior procurement executives, and Chief Acquisition Officers in—
(i) improving the quality of data reported on bundled or consolidated contracts in the Federal procurement data system; and
(ii) contributing to the annual report required by
subsection (p)(4);
(B) recommend changes to policies and procedures, including training procedures of relevant personnel, to properly identify and mitigate the effects of bundled or consolidated contracts;
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(C) recommend requirements for periodic and statistically valid data verification and validation; and
(D) recommend clear data verification responsibilities.
(3) PLAN SUBMISSION.—The Administrator of the Small
Business Administration shall submit the plan to the Committee on Small Business of the House of Representatives and
the Committee on Small Business and Entrepreneurship of the
Senate not later than December 1, 2016.
(4) IMPLEMENTATION.—Not later than October 1, 2016, the
Administrator of the Small Business Administration shall implement the plan described in this subsection.
(5) CERTIFICATION.—The Administrator shall annually provide to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a certification of the accuracy and
completeness of data reported on bundled and consolidated
contracts.
(6) DEFINITIONS.—In this subsection, the following definitions apply:
(A) CHIEF ACQUISITION OFFICER; SENIOR PROCUREMENT
EXECUTIVE.—The terms ‘‘Chief Acquisition Officer’’ and
‘‘senior procurement executive’’ have the meanings given
such terms in section 44(a) of this Act.
(B) BUNDLED OR CONSOLIDATED CONTRACT.—The term
‘‘bundled or consolidated contract’’ means a bundled contract (as defined in section 3(o)) or a contract resulting
from the consolidation of contracting requirements (as defined in section 44(a)(2)).
(t) GAO REPORT ON SMALL BUSINESS ADMINISTRATION PROGRAMS IN PUERTO RICO.—Not later than one year after the date of
enactment of this subsection, the Comptroller General of the
United States shall submit to the Committee on Small Business of
the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the application and utilization of contracting activities of the Administration
(including contracting activities relating to HUBZone small business concerns) in Puerto Rico. The report shall also identify any
provisions of Federal law that may create an obstacle to the efficient implementation of such contracting activities.
(u) POST-AWARD COMPLIANCE RESOURCES.—The Administrator
shall provide to small business development centers and entities
participating in the Procurement Technical Assistance Cooperative
Agreement Program under chapter 388 of title 10, United States
Code, and shall make available on the website of the Administration, a list of resources for small business concerns seeking education and assistance on compliance with contracting regulations
(including the Federal Acquisition Regulation) after award of a contract or subcontract.
(v) REGULATORY CHANGES AND TRAINING MATERIALS.—Not less
than annually, the Administrator shall provide to the Defense Acquisition University (established under section 1746 of title 10,
United States Code), the Federal Acquisition Institute (established
under section 1201 of title 41, United States Code), the individual
responsible for mandatory training and education of the acquisition
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workforce of each agency (described under section 1703(f)(1)(C) of
title 41, United States Code), small business development centers,
and entities participating in the Procurement Technical Assistance
Cooperative Agreement Program under chapter 388 of title 10,
United States Code—
(1) a list of all changes made in the prior year to regulations promulgated—
(A) by the Administrator that affect Federal acquisition; and
(B) by the Federal Acquisition Council that implement
amendments to this Act; and
(2) any materials the Administrator has developed that explain, train, or assist Federal agencies or departments or small
business concerns with compliance with the regulations described in paragraph (1).
(w) SOLICITATION NOTICE REGARDING ADMINISTRATION OF
CHANGE ORDERS FOR CONSTRUCTION.—
(1) IN GENERAL.—With respect to any solicitation for the
award of a contract for construction anticipated to be awarded
to a small business concern, the agency administering such
contract shall provide a notice along with the solicitation to
prospective bidders and offerors that includes—
(A) information about the agency’s policies or practices
in complying with the requirements of the Federal Acquisition Regulation relating to the timely definitization of requests for an equitable adjustment; and
(B) information about the agency’s past performance
in definitizing requests for equitable adjustments in accordance with paragraph (2).
(2) REQUIREMENTS FOR AGENCIES.—An agency shall provide the past performance information described under paragraph (1)(B) as follows:
(A) For the 3-year period preceding the issuance of the
notice, to the extent such information is available.
(B) With respect to an agency that, on the date of the
enactment of this subsection, has not compiled the information described under paragraph (1)(B)—
(i) beginning 1 year after the date of the enactment of this subsection, for the 1-year period preceding the issuance of the notice;
(ii) beginning 2 years after the date of the enactment of this subsection, for the 2-year period preceding the issuance of the notice; and
(iii) beginning 3 years after the date of the enactment of this subsection and each year thereafter, for
the 3-year period preceding the issuance of the notice.
(3) FORMAT OF PAST PERFORMANCE INFORMATION.—In the
notice required under paragraph (1), the agency shall ensure
that the past performance information described under paragraph (1)(B) is set forth separately for each definitization action that was completed during the following periods:
(A) Not more than 30 days after receipt of a request
for an equitable adjustment.
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(B) Not more than 60 days after receipt of a request
for an equitable adjustment.
(C) Not more than 90 days after receipt of a request
for an equitable adjustment.
(D) Not more than 180 days after receipt of a request
for an equitable adjustment.
(E) Not more than 365 days after receipt of a request
for an equitable adjustment.
(F) More than 365 days after receipt of a request for
an equitable adjustment.
(G) After the completion of the performance of the contract through a contract modification addressing all
undefinitized requests for an equitable adjustment received during the term of the contract.
(x) SMALL BUSINESS CREDIT FOR PUERTO RICO BUSINESSES
AND COVERED TERRITORY BUSINESSES.—
(1) CREDIT FOR MEETING CONTRACTING GOALS.—If an agency awards a prime contract to Puerto Rico business or a covered territory business, or a prime contractor awards a subcontract (at any tier) to a subcontractor that is a Puerto Rico
business or a covered territory business, during the period beginning on the date of enactment of this subsection and ending
on the date that is 4 years after such date of enactment, the
value of the contract or subcontract shall be doubled for purposes of determining compliance with the goals for procurement contracts under subsection (g)(1)(A) during such period.
(2) REPORT.—Along with the report required under subsection (h)(1), the head of each Federal agency shall submit to
the Administrator, and make publicly available on the scorecard (as defined in subsection (y)), an analysis of the number
and dollar amount of prime contracts awarded pursuant to
paragraph (1) for each fiscal year of the period described in
such paragraph.
øcasterkx: The following subsection (b) came from sec. 868 of
NDAA FY16 that I copied from the update comp from such Act. See
amendments made by section 871(a) of the public law (PL 117263).¿
(y) SCORECARD PROGRAM FOR EVALUATING FEDERAL AGENCY
COMPLIANCE WITH SMALL BUSINESS CONTRACTING GOALS.—
(1) USE OF SCORECARD.—The Administrator shall use a
scorecard to annually evaluate whether each Federal agency is
creating the maximum practicable opportunities for the award
of prime contracts and subcontracts 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, by assigning a score
to each Federal agency for the previous fiscal year.
(2) CONTENTS OF SCORECARD.—The scorecard shall include,
for each Federal agency and Governmentwide, the following information:
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(A) A determination of whether a Federal agency or
the Federal Government, as applicable, met each of the
prime contract goals established pursuant to subsection
(g)(1)(B) with respect 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.
(B) A determination of whether a Federal agency or
the Federal Government, as applicable, met each of the
subcontract goals established pursuant to such section
with respect 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.
(C) The number of 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 awarded prime contracts in each North American Industry Classification System code during the fiscal year and a comparison to the number of awarded contracts during the
prior fiscal year, if available.
(D) The number of 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 awarded subcontracts in each North American Industry Classification System code during the fiscal year and a comparison to the number of awarded subcontracts during the
prior fiscal year, if available.
(E) Any other factors that the Administrator deems
important to achieve the maximum practicable utilization
of 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.
(3) WEIGHTED FACTORS.—In using the scorecard to evaluate and assign a score to a Federal agency, the Administrator
shall base—
(A) fifty percent of the score on the dollar value of
prime contracts described in paragraph (2)(A); and
(B) fifty percent of the score on the information provided in subparagraphs (B) through (E) of paragraph (2),
weighted in a manner determined by the Administrator to
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encourage the maximum practicable opportunity for the
award of prime contracts and subcontracts 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.
(4) ADDITIONAL REQUIREMENTS FOR SCORECARDS.—The
scorecard shall include, for each Federal agency and Governmentwide, the following information with respect to prime contracts:
(A) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by women through sole source contracts and competitions restricted to small business concerns owned and controlled by women under section 8(m).
(B) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by qualified HUBZone small business concerns through sole source contracts and competitions restricted to qualified HUBZone small business concerns under section 31(c)(2).
(C) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by service-disabled veterans through
sole source contracts and competitions restricted to small
business concerns owned and controlled by service-disabled
veterans under section 36.
(D) The number (expressed as a percentage) and total
dollar amount of awards made to socially and economically
disadvantaged small business concerns under section 8(a)
through sole source contracts and competitions restricted
to socially and economically disadvantaged small business
concerns, disaggregated by awards made to such concerns
that are owned and controlled by individuals and awards
made to such concerns that are owned and controlled by
an entity.
(5) PUBLICATION.—The scorecard used by the Administrator under this subsection shall be submitted to the President and Congress along with the report submitted under subsection (h)(2).
(6) SCORECARD DEFINED.—In this subsection, the term
‘‘scorecard’’ means any summary using a rating system to
evaluate the efforts of a Federal agency to meet goals established under subsection (g)(1)(B) that—
(A) includes the measures described in paragraph (2);
and
(B) assigns a score to each Federal agency evaluated.
SEC. 16. ø15 U.S.C. 645¿ (a) Whoever makes any statement
knowing it to be false, or whoever willfully overvalues any security,
for the purpose of obtaining for himself or for any applicant any
loan, or extension thereof by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security therefor,
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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 defrand 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 part 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 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 service-disabled veterans’’, a ‘‘small business concern owned and
controlled by veterans’’, a ‘‘small business concern owned and controlled by socially and economically disadvantaged individuals’’, or
a ‘‘small business concern owned and controlled by women’’, in
order to obtain for oneself or another any—
(A) prime contract to be awarded pursuant to section 8, 9,
15, 31, 36, or 36A;
(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, 78 shall be subject to the penalties and remedies described in paragraph (2).
78 So

in original. Provisions following probably should be set flush with paragraph (1).

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(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); 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.
(3) LIMITATION ON LIABILITY.—This subsection shall not
apply to any conduct in violation of subsection (a) if the defendant acted in good faith reliance on a written advisory opinion
from a Small Business Development Center (as defined in this
Act), or an entity participating in the Procurement Technical
Assistance Cooperative Agreement Program defined in chapter
388 of title 10, United States Code; however nothing in this
Act shall obligate either entity to provide such a letter nor
shall the provision of such a letter in any way render the providing entity liable to the business concern should the Administrator later determine that the concern is not a small business concern. Upon issuance of an advisory opinion under this
paragraph, the entity issuing the advisory opinion shall remit
a copy of the opinion to the General Counsel of the Administration, who may reject the advisory opinion. If the General Counsel of the Administration rejects the advisory opinion, the Administration shall notify the entity issuing the advisory opinion
and the recipient of the opinion, after which time the business
concern may not rely upon the opinion.
(e) Any representation of the status of any concern or person
as a ‘‘small business concern’’, a ‘‘HUBZone small business concern’’, a ‘‘small business concern owned and controlled by servicedisabled veterans’’, a ‘‘small business concern owned and controlled
by veterans’’, a ‘‘small business concern owned and controlled by socially and economically disadvantaged individuals’’, or a ‘‘small
business concern owned and controlled by women’’ in order to obtain any prime contract or subcontract enumerated in 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).
(g) SUBCONTRACTING LIMITATIONS.—
(1) IN GENERAL.—Whoever violates a requirement established under section 46 shall be subject to the penalties prescribed in subsection (d), except that, for an entity that exceeded a limitation on subcontracting under such section, the fine
described in subsection (d)(2)(A) shall be treated as the greater
of—
(A) $500,000; or
(B) the dollar amount expended, in excess of permitted
levels, by the entity on subcontractors.
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(2) MONITORING.—Not later than 1 year after the date of
enactment of this subsection, the Administrator shall take
such actions as are necessary to ensure that an existing Federal subcontracting reporting system is modified to notify the
Administrator, the appropriate Director of the Office of Small
and Disadvantaged Business Utilization, and the appropriate
contracting officer if a requirement established under section
46 is violated.
SEC. 17. ø15 U.S.C. 646¿ Any interest held by the 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.
SEC. 18. ø15 U.S.C. 647¿ (a) The Administration shall not duplicate the work or activity of any other department or agency of
the Federal Government,, 79 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, the term ‘‘agricultural enterprises’’
means those small business concerns engaged in the production of
food and fiber, ranching, and raising of livestock, aquaculture, and
all other farming and agricultural-related industries.
SEC. 19. ø15 U.S.C. 631 note¿ If any provision of this Act, or
the application thereof to any person or circumstances, is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.
SEC. 20. ø15 U.S.C. 631 note¿ (a)(1) For fiscal year 2000 and
each fiscal year thereafter, there are authorized to be appropriated
such sums as may be necessary and appropriate, to remain available until expended, and to be available solely—
(A) to carry out the Small Business Development Center
Program under section 21, but not to exceed the annual funding level, as specified in section 21(a);
(B) to pay the expenses of the National Small Business Development Center Advisory Board, as provided in section 21(i);
(C) to pay the expenses of the information sharing system,
as provided in section 21(c)(8);
(D) to pay the expenses of the association referred to in
section 21(a)(3)(A) for conducting the accreditation program, as
provided in section 21(k)(2);
(E) to pay the expenses of the Administration, including
salaries of examiners, for conducting examinations as part of
the accreditation program conducted by the association referred to in section 21(a)(3)(A); and
79 So

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(F) 80 to pay for small business development center
grants as mandated or directed by Congress.
(2) Notwithstanding any other provision of law, the Administration shall enter into commitments for direct loans and to guarantee loans, debentures, payment of rentals, or other amounts due
under qualified contracts and other types of financial assistance
and enter into commitments to purchase debentures and preferred
securities and to guarantee sureties against loss pursuant to programs under this Act and the Small Business Investment Act of
1958, in the full amounts provided by law subject only to (A) the
availability of qualified applications, and (B) limitations contained
in appropriations Acts. Nothing in this paragraph authorizes the
Administration to reduce or limit its authority to enter into such
commitments. Subject to approval in appropriations Acts, amounts
authorized for preferred securities, debentures or participating securities under title III of the Small Business Investment Act of
1958 may be obligated in one fiscal year and disbursed or guaranteed in any 1 or more of the 4 subsequent fiscal years.
(3) There are authorized to be transferred from the disaster
loan revolving fund such sums as may be necessary and appropriate for administrative expenses of the Administration.
(4) Except as may be otherwise specifically provided by law,
the amount of deferred participation loans authorized in this section—
(A) shall mean the net amount of the loan principal guaranteed by the Small Business Administration (and does not include any amount which is not guaranteed); and
(B) shall be available for a national program, except that
the Administration may use not more than an amount equal
to 10 percent of the amount authorized each year for any special or pilot program directed to identified sectors of the small
business community or to specific geographic regions of the
United States.
(b) There are authorized to be appropriated to the Administration for fiscal year 1991 such sums as may be necessary to carry
out the provisions of this Act and the Small Business Investment
Act of 1958. There also are hereby authorized to be appropriated
such sums as may be necessary and appropriate for the carrying
out of the provisions and purposes, including administrative expenses, of sections 7(b)(1) and 7(b)(2) of this Act; and there are authorized to be transferred from the disaster loan revolving fund
such sums as may be necessary and appropriate for such administrative expenses.
(c) DISASTER MITIGATION PILOT PROGRAM.—The following program levels are authorized for loans under section 7(b)(1)(C):
(1) $15,000,000 for fiscal year 2005.
(2) $15,000,000 for fiscal year 2006.
(d) FISCAL YEAR 2005.—
(1) PROGRAM LEVELS.—The following program levels are
authorized for fiscal year 2005:
(A) For the programs authorized by this Act, the Administration is authorized to make—
80 Margin

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(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
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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.
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(B) Notwithstanding any other provision of this paragraph, for fiscal year 2006—
(i) no funds are authorized to be used as loan capital for the loan program authorized by section 7(a)(21)
except by transfer from another Federal department or
agency to the Administration, unless the program
level authorized for general business loans under
paragraph (1)(B)(i) is fully funded; and
(ii) the Administration may not approve loans on
its own behalf or on behalf of any other Federal department or agency, by contract or otherwise, under
terms and conditions other than those specifically authorized under this Act or the Small Business Investment Act of 1958, except that it may approve loans
under section 7(a)(21) of this Act in gross amounts of
not more than $2,000,000.
(f) FISCAL YEAR 2004 PURCHASE AND GUARANTEE AUTHORITY
UNDER TITLE III OF SMALL BUSINESS INVESTMENT ACT OF 1958.—
For fiscal year 2004, for the programs authorized by title III of the
Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.), the
Administration is authorized to make—
(1) $4,000,000,000 in purchases of participating securities;
and
(2) $3,000,000,000 in guarantees of debentures.
(g) AUTHORITY TO INCREASE AMOUNT OF GENERAL BUSINESS
LOANS.—
(1) IN GENERAL.—Subject to paragraphs (2) and (3) and
with respect to fiscal year 2019 and each fiscal year thereafter,
if the Administrator determines that the amount of commitments by the Administrator for general business loans authorized under section 7(a) for a fiscal year could exceed the limit
on the total amount of commitments the Administrator may
make for those loans under this Act, an appropriations Act, or
any other provision of law, the Administrator may make commitments for those loans for that fiscal year in an aggregate
amount equal to not more than 115 percent of that limit.
(2) NOTICE REQUIRED BEFORE EXERCISING AUTHORITY.—Not
later than 30 days before the date on which the Administrator
intends to exercise the authority under paragraph (1), the Administrator shall submit notice of intent to exercise the authority to—
(A) the Committee on Small Business and Entrepreneurship and the Subcommittee on Financial Services and
General Government of the Committee on Appropriations
of the Senate; and
(B) the Committee on Small Business and the Subcommittee on Financial Services and General Government
of the Committee on Appropriations of the House of Representatives.
(3) LIMITATION.—The Administrator shall not exercise the
authority under paragraph (1) more than once during any fiscal year.
(h) MICROLOAN PROGRAM.—For each of fiscal years 2021
through 2025, the Administration is authorized to make—
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(1) $80,000,000 in technical assistance grants, as provided
in section 7(m); and
(2) $110,000,000 in direct loans, as provided in section
7(m).
SEC. 21. ø15 U.S.C. 648¿ (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 labor 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; providing access to business analysts who
can refer small business concerns to available experts; and, to the
extent practicable, providing assistance in furtherance of the Small
Business Development Center Cyber Strategy developed under section 1841(a) of the National Defense Authorization Act for Fiscal
Year 2017: 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 previous sentence shall
not apply to an applicant that has its principal office located in the
Commonwealth of the Northern Mariana Islands. 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) COOPERATION TO PROVIDE INTERNATIONAL TRADE SERVICES.—
(A) INFORMATION AND SERVICES.—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 (including State trade agencies), and the small
business community to serve as an active information dissemination and service delivery mechanism for existing
trade promotion, trade finance, trade adjustment, trade
remedy and trade data collection programs of particular
utility for small businesses.
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(B) COOPERATION WITH STATE TRADE AGENCIES AND EXPORT ASSISTANCE CENTERS.—A small business development
center that counsels a small business concern on issues relating to international trade shall—
(i) consult with State trade agencies and Export
Assistance Centers to provide appropriate services to
the small business concern; and
(ii) as necessary, refer the small business concern
to a State trade agency or an Export Assistance Center for further counseling or assistance.
(C) DEFINITION.—In this paragraph, the term ‘‘Export
Assistance Center’’ has the same meaning as in section 22.
(3) The Small Business Development Center Program shall be
under the general management and oversight of the Administration for the delivery of programs and services to the small business
community. Such programs and services shall be jointly developed,
negotiated, and agreed upon, with full participation of both parties,
pursuant to an executed cooperative agreement between the Small
Business Development Center applicant and the Administration.
(A) Small business development centers are authorized to form
an association to pursue matters of common concern. If more than
a majority of the small business development centers which are 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) 81 Whereas On an annual basis, the Small Business
Development Center shall review and coordinate public and
private partnerships and cosponsorships with the Administration for the purpose of more efficiently leveraging available resources on a National 82 and a State basis.
(4) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.—
(A) IN GENERAL.—The Administration shall require as a
condition of any grant (or amendment or modification thereof)
made to an applicant under this section, that a matching
amount (excluding any fees collected from recipients of such
assistance) equal to the amount of such grant be provided from
81 Margin
82 So

so in law. Section 21(a)(3)(C) indention probably should be moved two ems to left.
in law. Probably should be ‘‘national’’.

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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:
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(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 made available is more than
$90,000,000, the minimum funding level shall be the
sum of $500,000 plus a percentage of $500,000 equal
to the percentage amount by which the amount made
available exceeds $90,000,000.
(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 basis, based on the percentage of shortage of each such State, as compared to the total
amount of such remaining funds available, to the extent necessary in order to increase the amount of the
grant to the amount received by that State in fiscal
year 2000, or until such funds are exhausted, whichever first occurs.
(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.
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(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, American Samoa, and the Commonwealth
of the Northern Mariana Islands.
(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).
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(6) 83 Any applicant which is funded by the Administration
as a Small Business Development Center may apply for an additional grant to be used solely to assist—
(A) with the development and enhancement of exports
by small business concerns;
(B) in technology transfer; 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 Small
Business Development Center as compared to the total population of the United States. The minimum amount of eligibility
for any State shall be $100,000.
(7) PRIVACY REQUIREMENTS.—
(A) IN GENERAL.—A small business development 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—
83 So

in law. Section 21(a)(6) indention probably should be moved two ems to left.

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(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, 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.
(8) CYBERSECURITY ASSISTANCE.—
(A) IN GENERAL.—The Department of Homeland Security, and any other Federal department or agency in coordination with the Department of Homeland Security,
may leverage small business development centers to provide assistance to small business concerns by disseminating information relating to cybersecurity risks and
other homeland security matters to help small business
concerns in developing or enhancing cybersecurity infrastructure, awareness of cyber threat indicators, and cyber
training programs for employees.
(B) DEFINITIONS.—In this paragraph, the terms ‘‘cybersecurity risk’’ and ‘‘cyber threat indicator’’ have the
meanings given such terms, respectively, under section
2200 of the Homeland Security Act of 2002.
(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) ASSISTANCE TO OUT-OF-STATE SMALL BUSINESS CONCERNS.—
(A) IN GENERAL.—At the discretion of the Administration, the Administration is authorized to permit a small
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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.
(B) DISASTER RECOVERY ASSISTANCE.—
(i) IN GENERAL.—At the discretion of the Administrator, the Administrator may authorize a small business development center to provide advice, information, and assistance, as described in subsection (c), to
a small business concern located outside of the State,
without regard to geographic proximity to the small
business development center, if the small business
concern is located in an area for which the President
has declared a major disaster.
(ii) TERM.—
(I) IN GENERAL.—A small business development center may provide advice, information, and
assistance to a small business concern under
clause (i) for a period of not more than 2 years
after the date on which the President declared a
major disaster for the area in which the small
business concern is located.
(II) EXTENSION.—The Administrator may, at
the discretion of the Administrator, extend the period described in subclause (I).
(iii) CONTINUITY OF SERVICES.—A small business
development center that provides counselors to an
area described in clause (i) shall, to the maximum extent practicable, ensure continuity of services in any
State in which the small business development center
otherwise provides services.
(iv) ACCESS TO DISASTER RECOVERY FACILITIES.—
For purposes of this subparagraph, the Administrator
shall, to the maximum extent practicable, permit the
personnel of a small business development center to
use any site or facility designated by the Administrator for use to provide disaster recovery assistance.
(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. Applicants receiving
grants under this section may also assist small businesses by providing, where appropriate, education on the requirements applicable to small businesses under the regulations issued under section
38 of the Arms Export Control Act (22 U.S.C. 2778) and on compliance with those requirements.
(2) A small business development center shall provide services
as close as possible to small businesses by providing extension
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services and utilizing satellite locations when necessary. The facilities and staff of each Small Business Development Center shall be
located in such places as to provide maximum accessibility and
benefits to the small businesses which the center is intended to
serve. To the extent possible, it also shall make full use of other
Federal and State government programs that are concerned with
aiding small business. A small business development center shall
have—
(A) a full-time staff, including a full-time director who
shall have the authority to make expenditures under the 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 agent to provide state or
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;
(F) access to laboratory and adaptive engineering facilities;
and
(G) access to cybersecurity specialists to counsel, assist,
and inform small business concern clients, in furtherance of
the Small Business Development Center Cyber Strategy developed under section 1841(a) of the National Defense Authorization Act for Fiscal Year 2017.
(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
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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 ExportImport 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;
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(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 businesses strengths and
weaknesses in the locality;
(M) in cooperation with the Department of Commerce, the
Administration and other relevant Federal agencies, actively
assisting rural small businesses in exporting by identifying
and developing potential export markets for rural small 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
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(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 business 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; 84
(T) providing information and assistance to small business
concerns with respect to establishing drug-free workplace programs on or before October 1, 2006; and 84
(U) 84 encouraging and assisting the provision of succession
planning to small business concerns with a focus on
transitioning to cooperatives, as defined in section 7(a)(35), and
qualified employee trusts (collectively referred to in this subparagraph as ‘‘employee-owned business concerns’’), including
by—
(i) providing training to individuals to promote the
successful management, governance, or operation of a business purchased by those individuals in the formation of an
employee-owned business concern;
(ii) assisting employee-owned business concerns that
meet applicable size standards established under section
3(a) with education and technical assistance with respect
to financing and contracting programs administered by the
Administration;
(iii) coordinating with lenders on conducting outreach
on financing through programs administered by the Administration that may be used to support the transition of
ownership to employees;
(iv) supporting small business concerns in exploring or
assessing the possibility of transitioning to an employeeowned business concern; and
84 The second subparagraph (U), as added by section 5(3) Public Law 115-259, is so in law.
Section 5(1) and (2) of such Public Law also contains conforming amendments to subparagraph
(S) and (T) that do not execute.

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(v) coordinating with the cooperative development centers of the Department of Agriculture, the land grant extension network, the Manufacturing Extension Partnership, community development financial institutions, employee ownership associations and service providers, and
local, regional and national cooperative associations.
(U) 84 in conjunction with the United States Patent and
Trademark Office, providing training—
(i) to small business concerns relating to—
(I) domestic and international intellectual property protections; and
(II) how the protections described in subclause (I)
should be considered in the business plans and growth
strategies of the small business concerns; and
(ii) that may be delivered—
(I) in person; or
(II) through a website.
(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
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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 State Small Business
Development Center, using joint State and Federal funding, and
any other appropriate measures directed at improving the export
performance of small businesses within the State.
(e) Laboratories operated and funded by the Federal 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) NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AND
REGIONAL TECHNOLOGY TRANSFER CENTERS.—The National Aeronautics and Space Administration and regional technology transfer
centers supported by the National Aeronautics and Space Administration are authorized and directed to cooperate with small business development centers participating in the program.
(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 recomFebruary 1, 2024

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mending 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 term shall end in three years from the date
of appointment, and the final third whose term shall end in four
years from the date of appointment. Succeeding Boards shall have
three-year terms, with one-third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and
confer with the Associate Administrator for Small Business Development Centers in carrying out the duties described in this section.
The Board shall meet at least semiannually and at the call of the
Chairman of the Board. Each member of the Board shall be entitled to be compensated at the rate not in excess of the per diem
equivalent of the highest rate of pay for individuals occupying the
position under GS–18 of the General Schedule for each day engaged in activities of the Board and shall be entitled to be reimbursed for expenses as a member of the Board.
(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 deFebruary 1, 2024

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velop 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 accreditation.
(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 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.
(n) VETERANS ASSISTANCE AND SERVICES PROGRAM.—
(1) IN GENERAL.—A small business development center
may apply for a grant under this subsection to carry out a veterans assistance and services program.
(2) ELEMENTS OF PROGRAM.—Under a program carried out
with a grant under this subsection, a small business development center shall—
(A) create a marketing campaign to promote awareness and education of the services of the center that are
available to veterans, and to target the campaign toward
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veterans, service-disabled veterans, military units, Federal
agencies, and veterans organizations;
(B) use technology-assisted online counseling and distance learning technology to overcome the impediments to
entrepreneurship faced by veterans and members of the
Armed Forces; and
(C) increase coordination among organizations that assist veterans, including by establishing virtual integration
of service providers and offerings for a one-stop point of
contact for veterans who are entrepreneurs or owners of
small business concerns.
(3) AMOUNT OF GRANTS.—A grant under this subsection
shall be for not less than $75,000 and not more than $250,000.
(4) FUNDING.—Subject to amounts approved in advance in
appropriations Acts, the Administration may make grants or
enter into cooperative agreements to carry out the provisions
of this subsection.
(o) CYBER STRATEGY TRAINING FOR SMALL BUSINESS DEVELOPMENT CENTERS.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘cyber strategy’’ means resources and tactics to assist in planning for cybersecurity and defending
against cyber risks and attacks; and
(B) the term ‘‘lead small business development center’’
means a small business development center that receives
reimbursement from the Administrator under paragraph
(5).
(2) CERTIFICATION PROGRAM.—The Administrator shall establish a cyber counseling certification program, or designate 1
or more substantially similar governmental or private cybersecurity certification programs, to certify the employees of lead
small business development centers in providing cyber planning assistance to small business concerns.
(3) NUMBER OF CERTIFIED EMPLOYEES.—The Administrator
shall ensure that the number of employees of each lead small
business development center who are certified in providing
cyber planning assistance is not less than the lesser of—
(A) 5; or
(B) 10 percent of the total number of employees of the
lead small business development center.
(4) CYBER STRATEGY.—In carrying out paragraph (2), the
Administrator, to the extent practicable, shall consider any
cyber strategy methods included in the Small Business Development Center Cyber Strategy developed under section
1841(a)(3)(B) of the National Defense Authorization Act for
Fiscal Year 2017 (Public Law 114–328; 130 Stat. 2662).
(5) REIMBURSEMENT FOR CERTIFICATION.—
(A) IN GENERAL.—Subject to the availability of appropriations, the Administrator may reimburse each lead
small business development center for costs relating to the
certification of 1 or more employees of the lead small business center in providing cyber planning assistance under
a program established or designated under paragraph (2).
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(B) LIMITATION.—The total amount reimbursed by the
Administrator under subparagraph (A) may not exceed
$350,000 in any fiscal year.
SEC. 22. ø15 U.S.C. 649¿ OFFICE OF INTERNATIONAL TRADE.
(a) ESTABLISHMENT.—
(1) OFFICE.—There is established within the Administra-

tion an Office of International Trade which shall implement
the programs pursuant to this section for the primary purposes
of increasing—
(A) the number of small business concerns that export;
and
(B) the volume of exports by small business concerns.
(2) ASSOCIATE ADMINISTRATOR.—The head of the Office
shall be the Associate Administrator for International Trade,
who shall be responsible to the Administrator.
(b) TRADE DISTRIBUTION NETWORK.—The Associate Administrator, working in close cooperation with the Secretary of Commerce, the United States Trade Representative, the Secretary of
Agriculture, the Secretary of State, the President of the Export-Import Bank of the United States, the President of the Overseas Private Investment Corporation, Director 85 of the United States Trade
and Development Agency, and other relevant Federal agencies,
small business development centers engaged in export promotion
efforts, Export Assistance Centers, regional and district offices of
the Administration, the small business community, and relevant
State and local export promotion programs, shall—
(1) maintain a distribution network, using regional and
district offices of the Administration, the small business development center network, networks of women’s business centers,
the Service Corps of Retired Executives authorized by section
8(b)(1), and Export Assistance Centers, for programs relating
to—
(A) trade promotion;
(B) trade finance;
(C) trade adjustment assistance;
(D) trade remedy assistance; and
(E) trade data collection;
(2) aggressively market the programs described in paragraph (1) and disseminate information, including computerized
marketing data, to small business concerns on exporting
trends, market-specific growth, industry trends, and international prospects for exports;
(3) promote export assistance programs through the district and regional offices of the Administration, the small business development center network, Export Assistance Centers,
the network of women’s business centers, chapters of the Serv85 Section 1470(c)(1) of the BUILD Act of 2018 (division F of Public Law 115-254) provides
for an amendment to strike ‘‘the President of the Overseas Private Investment Corporation, Director’’ and insert ‘‘the Board of Directors of the United States International Development Finance Corporation, the Director’’. Section 1470(w) of such Act states ‘‘The amendments made
by this section shall take effect at the end of the transition period.’’. Section 1461(2) of such
Act defines the term ‘‘transition period’’ as follows: ‘‘The term ‘transition period’ means the period—(A) beginning on the date of the enactment of this Act; and (B) ending on the effective
date of the reorganization plan required by section 1462(e).’’. For details relating to the reorganization plan, see section 1462(e) of such Act.

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ice Corps of Retired Executives, State and local export promotion programs, and partners in the private sector; and
(4) give preference in hiring or approving the transfer of
any employee into the Office or to a position described in subsection (c)(9) to otherwise qualified applicants who are fluent
in a language in addition to English, to—
(A) accompany small business concerns on foreign
trade missions; and
(B) translate documents, interpret conversations, and
facilitate multilingual transactions, including by providing
referral lists for translation services, if required.
(c) PROMOTION OF SALES OPPORTUNITIES.—The Associate Administrator shall promote sales opportunities for small business
goods and services abroad. To accomplish this objective the office
shall—
(1) establish annual goals for the Office relating to—
(A) enhancing the exporting capability of small business concerns and small manufacturers;
(B) facilitating technology transfers;
(C) enhancing programs and services to assist small
business concerns and small manufacturers to compete effectively and efficiently in foreign markets;
(D) increasing the ability of small business concerns to
access capital; and
(E) disseminating information concerning Federal,
State, and private programs and initiatives;
(2) in cooperation with the Department of Commerce, other
relevant agencies, regional and local Administration offices, the
Small Business Development Center network, and State programs, develop a mechanism for—
(A) identifying subsectors of the small business community with strong export potential;
(B) identifying areas of demand in foreign markets;
(C) prescreening foreign buyers for commercial and
credit purposes; and
(D) assisting in increasing international marketing by
disseminating relevant information regarding market
leads, linking potential sellers and buyers, and catalyzing
the formation of joint ventures, where appropriate;
(3) in cooperation with the Department of Commerce, actively assist small business concerns in forming and using export trading companies, export management companies and research and development pools authorized under section 9 of
this Act;
(4) work in conjunction with other Federal agencies, regional and district offices of the Administration, the small business development center network, and the private sector to
identify and publicize translation services, including those
available through colleges and universities participating in the
small business development center program;
(5) work closely with the Department of Commerce and
other relevant Federal agencies to—
(A) collect, analyze and periodically update relevant
data regarding the small business share of United States
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exports and the nature of State exports (including the production of Gross State Product figures) and disseminate
that data to the public and to Congress;
(B) make recommendations to the Secretary of Commerce and to Congress regarding revision of the North
American Industry Classification System codes to encompass industries currently overlooked and to create North
American Industry Classification System codes for export
trading companies and export management companies;
(C) improve the utility and accessibility of existing export promotion programs for small business concerns; and
(D) increase the accessibility of the Export Trading
Company contact facilitation service;
(6) make available to the small business community information regarding conferences on exporting and international
trade sponsored by the public and private sector;
(7) provide small business concerns with access to up to
date and complete export information by—
(A) making available, at the regional and district offices of the Administration through cooperation with the
Department of Commerce, export information, including,
but not limited to, the worldwide information and trade
system and world trade data reports;
(B) maintaining a list of financial institutions that finance export operations;
(C) maintaining a directory of all Federal, regional,
State and private sector programs that provide export information and assistance to small business concerns; and
(D) preparing and publishing such reports as it determines to be necessary concerning market conditions,
sources of financing, export promotion programs, and other
information pertaining to the needs of small business export firms so as to insure that the maximum information
is made available to small business concerns in a readily
usable form;
(8) encourage through cooperation with the Department of
Commerce, greater small business participation in trade fairs,
shows, missions, and other domestic and overseas export development activities of the Department of Commerce;
(9) facilitate decentralized delivery of export information
and assistance to small business concerns by assigning primary responsibility for export development to one individual in
each district office and providing each Administration regional
office with a full-time export development specialist, who
shall—
(A) assist small business concerns in obtaining export
information and assistance from other Federal departments and agencies;
(B) maintain a directory of all programs which provide
export information and assistance to small business concerns in the region;
(C) encourage financial institutions to develop and expand programs for export financing;
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(D) provide advice to personnel of the Administration
involved in making loans, loan guarantees, and extensions
and revolving lines of credit, and providing other forms of
assistance to small business concerns engaged in exports;
(E) within one hundred and eighty days of their appointment, participate in training programs designed by
the Administrator, in conjunction with the Department of
Commerce and other Federal departments and agencies, to
study export programs and to examine the needs of small
business concerns for export information and assistance;
(F) participate, jointly with employees of the Office, in
an annual training program that focuses on current small
business needs for exporting; and
(G) develop and conduct training programs for exporters and lenders, in cooperation with the Export Assistance
Centers, the Department of Commerce, the Department of
Agriculture, small business development centers, women’s
business centers, the Export-Import Bank of the United
States, the Overseas Private Investment Corporation 86,
and other relevant Federal agencies;
(10) make available on the website of the Administration
the name and contact information of each individual described
in paragraph (9);
(11) carry out a nationwide marketing effort using technology, online resources, training, and other strategies to promote exporting as a business development opportunity for
small business concerns;
(12) disseminate information to the small business community through regional and district offices of the Administration,
the small business development center network, Export Assistance Centers, the network of women’s business centers, chapters of the Service Corps of Retired Executives authorized by
section 8(b)(1), State and local export promotion programs, and
partners in the private sector regarding exporting trends, market-specific growth, industry trends, and prospects for exporting; and
(13) establish and carry out training programs for the staff
of the regional and district offices of the Administration and
resource partners of the Administration on export promotion
and providing assistance relating to exports.
(d) EXPORT FINANCING PROGRAMS.—
(1) IN GENERAL.—The Associate Administrator shall work
in cooperation with the Export-Import Bank of the United
States, the Department of Commerce, other relevant Federal
agencies, and the States to develop a program through which
export specialists in the regional offices of the Administration,
86 Section 1470(c)(2) of the BUILD Act of 2018 (division F of Public Law 115-254) provides
for an amendment to strike ‘‘Overseas Private Investment Corporation’’ each place it appears
in section 22 and insert ‘‘United States International Development Finance Corporation’’. Section 1470(w) of such Act states ‘‘The amendments made by this section shall take effect at the
end of the transition period.’’. Section 1461(2) of such Act defines the term ‘‘transition period’’
as follows: ‘‘The term ‘transition period’ means the period—(A) beginning on the date of the enactment of this Act; and (B) ending on the effective date of the reorganization plan required
by section 1462(e).’’. For details relating to the reorganization plan, see section 1462(e) of such
Act.

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regional and local loan officers, and Small Business Development Center personnel can facilitate the access of small businesses to relevant export financing programs of the Export-Import Bank of the United States and to export and pre-export
financing programs available from the Administration and the
private sector.
(2) TRADE FINANCE SPECIALIST.—To accomplish the goal established under paragraph (1), the Associate Administrator
shall—
(A) designate at least 1 individual within the Administration as a trade finance specialist to oversee international loan programs and assist Administration employees with trade finance issues; and
(B) work in cooperation with the Export-Import Bank
and the small business community, including small business trade associations, to—
(i) aggressively market existing Administration
export financing and pre-export financing programs;
(ii) identify financing available under various Export-Import Bank programs, and aggressively market
those programs to small businesses;
(iii) assist in the development of financial intermediaries and facilitate the access of those intermediaries to existing financing programs;
(iv) promote greater participation by private financial institutions, particularly those institutions already participating in loan programs under this Act,
in export finance; and
(v) provide for the participation of appropriate Administration personnel in training programs conducted
by the Export-Import Bank.
(e) TRADE REMEDIES.—The Associate Administrator shall—
(1) work in cooperation with other Federal agencies and
the private sector to counsel small businesses with respect to
initiating and participating in any proceedings relating to the
administration of the United States trade laws; and
(2) work with the Department of Commerce, the Office of
the United States Trade Representative, and the International
Trade Commission to increase access to trade remedy proceedings for small businesses.
(f) REPORTING REQUIREMENT.—The Associate Administrator
shall submit an annual report to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives that contains—
(1) a description of the progress of the Office in implementing the requirements of this section;
(2) a detailed account of the results of export growth activities of the Administration, including the activities of each district and regional office of the Administration, based on the
performance measures described in subsection (i);
(3) an estimate of the total number of jobs created or retained as a result of export assistance provided by the Administration and resource partners of the Administration;
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(4) for any travel by the staff of the Office, the destination
of such travel and the benefits to the Administration and to
small business concerns resulting from such travel; and
(5) a description of the participation by the Office in trade
negotiations.
(g) STUDIES.—The Associate Administrator, in cooperation,
where appropriate, with the Division of Economic Research of the
Office of Advocacy, and with other Federal agencies, shall undertake studies regarding the following issues and shall report to the
Committees on Small Business of the House of Representatives and
the Senate, and to other relevant Committees of the House and
Senate within 6 months after the date of enactment of the Small
Business International Trade and Competitiveness Act with specific recommendations on—
(1) the viability and cost of establishing an annual, competitive small business export incentive program similar to the
Small Business Innovation Research program and alternative
methods of structuring such a program;
(2) methods of streamlining trade remedy proceedings to
increase access for, and reduce expenses incurred by, smaller
firms;
(3) methods of improving the current small business foreign sales corporation tax incentives and providing small businesses with greater benefits from this initiative;
(4) methods of identifying potential export markets for
United States small businesses; maintaining and disseminating current foreign market data; and devising a comprehensive export marketing strategy for United States small business goods and services, and shall include data on the volume
and dollar amount of goods and services, identified by type, imported by United States trading partners over the past 10
years; and
(5) the results of a survey of major United States trading
partners to identify the domestic policies, programs and incentives, and the private sector initiatives, which exist to encourage the formation and growth of small business.
(h) DISCHARGE OF INTERNATIONAL TRADE RESPONSIBILITIES OF
ADMINISTRATION.—The Administrator shall ensure that—
(1) the responsibilities of the Administration regarding
international trade are carried out by the Associate Administrator;
(2) the Associate Administrator has sufficient resources to
carry out such responsibilities; and
(3) the Associate Administrator has direct supervision and
control over—
(A) the staff of the Office; and
(B) any employee of the Administration whose principal duty station is an Export Assistance Center, or any
successor entity.
(i) EXPORT AND TRADE COUNSELING.—
(1) DEFINITION.—In this subsection—
(A) the term ‘‘lead small business development center’’
means a small business development center that has received a grant from the Administration; and
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(B) the term ‘‘lead women’s business center’’ means a
women’s business center that has received a grant from
the Administration.
(2) CERTIFICATION PROGRAM.—The Administrator shall establish an export and trade counseling certification program to
certify employees of lead small business development centers
and lead women’s business centers in providing export assistance to small business concerns.
(3) NUMBER OF CERTIFIED EMPLOYEES.—The Administrator
shall ensure that the number of employees of each lead small
business development center who are certified in providing export assistance is not less than the lesser of—
(A) 5; or
(B) 10 percent of the total number of employees of the
lead small business development center.
(4) REIMBURSEMENT FOR CERTIFICATION.—
(A) IN GENERAL.—Subject to the availability of appropriations, the Administrator shall reimburse a lead small
business development center or a lead women’s business
center for costs relating to the certification of an employee
of the lead small business center or lead women’s business
center in providing export assistance under the program
established under paragraph (2).
(B) LIMITATION.—The total amount reimbursed by the
Administrator under subparagraph (A) may not exceed
$350,000 in any fiscal year.
(j) PERFORMANCE MEASURES.—
(1) IN GENERAL.—The Associate Administrator shall develop performance measures for the Administration to support
export growth goals for the activities of the Office under this
section that include—
(A) the number of small business concerns that—
(i) receive assistance from the Administration;
(ii) had not exported goods or services before receiving the assistance described in clause (i); and
(iii) export goods or services;
(B) the number of small business concerns receiving
assistance from the Administration that export goods or
services to a market outside the United States into which
the small business concern did not export before receiving
the assistance;
(C) export revenues by small business concerns assisted by programs of the Administration;
(D) the number of small business concerns referred to
an Export Assistance Center or a small business development center by the staff of the Office;
(E) the number of small business concerns referred to
the Administration by an Export Assistance Center or a
small business development center; and
(F) the number of small business concerns referred to
the Department of Commerce, the Department of Agriculture, the Department of State, the Export-Import Bank
of the United States, the Overseas Private Investment
Corporation 86, or the United States Trade and DevelopFebruary 1, 2024

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ment Agency by the staff of the Office, an Export Assistance Center, or a small business development center.
(2) JOINT PERFORMANCE MEASURES.—The Associate Administrator shall develop joint performance measures for the district offices of the Administration and the Export Assistance
Centers that include the number of export loans made under—
(A) section 7(a)(16);
(B) the Export Working Capital Program established
under section 7(a)(14);
(C) the Preferred Lenders Program, as defined in section 7(a)(2)(C)(ii); and
(D) the export express program established under section 7(a)(34).
(3) CONSISTENCY OF TRACKING.—The Associate Administrator, in coordination with the departments and agencies that
are represented on the Trade Promotion Coordinating Committee established under section 2312 of the Export Enhancement Act of 1988 (15 U.S.C. 4727) and the small business development center network, shall develop a system to track exports by small business concerns, including information relating to the performance measures developed under paragraph
(1), that is consistent with systems used by the departments
and agencies and the network.
(k) EXPORT ASSISTANCE CENTERS.—
(1) EXPORT FINANCE SPECIALISTS.—
(A) MINIMUM NUMBER OF EXPORT FINANCE SPECIALISTS.—On and after the date that is 90 days after the date
of enactment of this subsection, the Administrator, in coordination with the Secretary of Commerce, shall ensure
that the number of export finance specialists is not less
than the number of such employees so assigned on January 1, 2003.
(B) EXPORT FINANCE SPECIALISTS ASSIGNED TO EACH
REGION OF THE ADMINISTRATION.—On and after the date
that is 2 years after the date of enactment of this subsection, the Administrator, in coordination with the Secretary of Commerce, shall ensure that there are not fewer
than 3 export finance specialists in each region of the Administration.
(2) PLACEMENT OF EXPORT FINANCE SPECIALISTS.—
(A) PRIORITY.—The Administrator shall give priority,
to the maximum extent practicable, to placing employees
of the Administration at any Export Assistance Center
that—
(i) had an Administration employee assigned to
the Export Assistance Center before January 2003;
and
(ii) has not had an Administration employee assigned to the Export Assistance Center during the period beginning January 2003, and ending on the date
of enactment of this subsection, either through retirement or reassignment.
(B) NEEDS OF EXPORTERS.—The Administrator shall, to
the maximum extent practicable, strategically assign AdFebruary 1, 2024

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ministration employees to Export Assistance Centers,
based on the needs of exporters.
(C) RULE OF CONSTRUCTION.—Nothing in this subsection may be construed to require the Administrator to
reassign or remove an export finance specialist who is assigned to an Export Assistance Center on the date of enactment of this subsection.
(3) GOALS.—The Associate Administrator shall work with
the Department of Commerce, the Export-Import Bank of the
United States, and the Overseas Private Investment Corporation 86 to establish shared annual goals for the Export Assistance Centers.
(4) OVERSIGHT.—The Associate Administrator shall designate an individual within the Administration to oversee all
activities conducted by Administration employees assigned to
Export Assistance Centers.
(l) STATE TRADE EXPANSION PROGRAM.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘eligible small business concern’’ means
a business concern that—
(i) is organized or incorporated in the United
States;
(ii) is operating in the United States;
(iii) meets—
(I) the applicable industry-based small business size standard established under section 3; or
(II) the alternate size standard applicable to
the program under section 7(a) of this Act and the
loan programs under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.);
(iv) has been in business for not less than 1 year,
as of the date on which assistance using a grant under
this subsection commences; and
(v) has access to sufficient resources to bear the
costs associated with trade, including the costs of
packing, shipping, freight forwarding, and customs
brokers;
(B) the term ‘‘program’’ means the State Trade Expansion Program established under paragraph (2);
(C) the term ‘‘rural small business concern’’ means an
eligible small business concern located in a rural area, as
that term is defined in section 1393(a)(2) of the Internal
Revenue Code of 1986;
(D) the term ‘‘socially and economically disadvantaged
small business concern’’ has the meaning given that term
in section 8(a)(4)(A) of the Small Business Act (15 U.S.C.
637(a)(4)(A)); and
(E) the term ‘‘State’’ means each of the several States,
the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands, and American Samoa.
(2) ESTABLISHMENT OF PROGRAM.—The Associate Administrator shall establish a trade expansion program, to be known
as the ‘‘State Trade Expansion Program’’, to make grants to
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States to carry out programs that assist eligible small business
concerns in—
(A) participation in foreign trade missions;
(B) a subscription to services provided by the Department of Commerce;
(C) the payment of website fees;
(D) the design of marketing media;
(E) a trade show exhibition;
(F) participation in training workshops;
(G) a reverse trade mission;
(H) procurement of consultancy services (after consultation with the Department of Commerce to avoid duplication); or
(I) any other initiative determined appropriate by the
Associate Administrator.
(3) GRANTS.—
(A) JOINT REVIEW.—In carrying out the program, the
Associate Administrator may make a grant to a State to
increase the number of eligible small business concerns in
the State exploring significant new trade opportunities.
(B) CONSIDERATIONS.—In making grants under this
subsection, the Associate Administrator may give priority
to an application by a State that proposes a program
that—
(i) focuses on eligible small business concerns as
part of a trade expansion program;
(ii) demonstrates intent to promote trade expansion by—
(I) socially and economically disadvantaged
small business concerns;
(II) small business concerns owned or controlled by women; and
(III) rural small business concerns;
(iii) promotes trade facilitation from a State that
is not 1 of the 10 States with the highest percentage
of eligible small business concerns that are engaged in
international trade, based upon the most recent data
from the Department of Commerce; and
(iv) includes—
(I) activities which have resulted in the highest return on investment based on the most recent
year; and
(II) the adoption of shared best practices included in the annual report of the Administration.
(C) LIMITATIONS.—
(i) SINGLE APPLICATION.—A State may not submit
more than 1 application for a grant under the program
in any 1 fiscal year.
(ii) PROPORTION OF AMOUNTS.—The total value of
grants made under the program during a fiscal year to
the 10 States with the highest percentage of eligible
small business concerns, based upon the most recent
data available from the Department of Commerce,
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shall be not more than 40 percent of the amounts appropriated for the program for that fiscal year.
(iii) DURATION.—The Associate Administrator
shall award a grant under this program for a period
of not more than 2 years.
(D) APPLICATION.—
(i) IN GENERAL.—A State desiring a grant under
the program shall submit an application at such time,
in such manner, and accompanied by such information
as the Associate Administrator may establish.
(ii) CONSULTATION TO REDUCE DUPLICATION.—A
State desiring a grant under the program shall—
(I) before submitting an application under
clause (i), consult with applicable trade agencies
of the Federal Government on the scope and mission of the activities the State proposes to carry
out using the grant, to ensure proper coordination
and reduce duplication in services; and
(II) document the consultation conducted
under subclause (I) in the application submitted
under clause (i).
(4) COMPETITIVE BASIS.—The Associate Administrator shall
award grants under the program on a competitive basis.
(5) FEDERAL SHARE.—The Federal share of the cost of a
trade expansion program carried out using a grant under the
program shall be—
(A) for a State that has a high trade volume, as determined by the Associate Administrator, not more than 65
percent; and
(B) for a State that does not have a high trade volume,
as determined by the Associate Administrator, not more
than 75 percent.
(6) NON-FEDERAL SHARE.—The non-Federal share of the
cost of a trade expansion program carried out using a grant
under the program shall be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and
in-kind contributions, except that no such costs or contributions may be derived from funds from any other Federal program.
(7) REPORTS.—
(A) INITIAL REPORT.—Not later than 120 days after the
date of enactment of this subsection, the Associate Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives a report,
which shall include—
(i) a description of the structure of and procedures
for the program;
(ii) a management plan for the program; and
(iii) a description of the merit-based review process to be used in the program.
(B) ANNUAL REPORTS.—
(i) IN GENERAL.—The Associate Administrator
shall publish on the website of the Administration an
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annual report regarding the program, which shall include—
(I) the number and amount of grants made
under the program during the preceding year;
(II) a list of the States receiving a grant under
the program during the preceding year, including
the activities being performed with each grant;
(III) the effect of each grant on the eligible
small business concerns in the State receiving the
grant;
(IV) the total return on investment for each
State; and
(V) a description of best practices by States
that showed high returns on investment and significant progress in helping more eligible small
business concerns.
(ii) NOTICE TO CONGRESS.—On the date on which
the Associate Administrator publishes a report under
clause (i), the Associate Administrator shall notify the
Committee on Small Business and Entrepreneurship
of the Senate and the Committee on Small Business of
the House of Representatives that the report has been
published.
(8) REVIEWS BY INSPECTOR GENERAL.—
(A) IN GENERAL.—The Inspector General of the Administration shall conduct a review of—
(i) the extent to which recipients of grants under
the program are measuring the performance of the activities being conducted and the results of the measurements; and
(ii) the overall management and effectiveness of
the program.
(B) REPORTS.—
(i) PILOT PROGRAM.—Not later than 6 months
after the date of enactment of this subsection, the Inspector General of the Administration shall submit to
the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding the use of amounts made available under the State
Trade and Export Promotion Grant Program under
section 1207 of the Small Business Jobs Act of 2010
(15 U.S.C. 649b note).
(ii) NEW STEP PROGRAM.—Not later than 18
months after the date on which the first grant is
awarded under this subsection, the Inspector General
of the Administration shall submit to the Committee
on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the
House of Representatives a report regarding the review conducted under subparagraph (A).
(9) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out the program $30,000,000
for each of fiscal years 2016 through 2020.
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(m) DEFINITIONS.—In this section—
(1) the term ‘‘Associate Administrator’’ means the Associate Administrator for International Trade described in subsection (a)(2);
(2) the term ‘‘Export Assistance Center’’ means a one-stop
shop for United States exporters established by the United
States and Foreign Commercial Service of the Department of
Commerce pursuant to section 2301(b)(8) of the Omnibus
Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8));
(3) the term ‘‘export finance specialist’’ means a full-time
equivalent employee of the Office assigned to an Export Assistance Center to carry out the duties described in subsection (e);
and
(4) the term ‘‘Office’’ means the Office of International
Trade established under subsection (a)(1).
SEC. 23. ø15 U.S.C. 650¿ SUPERVISORY AND ENFORCEMENT AUTHORITY
FOR SMALL BUSINESS LENDING COMPANIES.
(a) IN GENERAL.—The Administrator is authorized—

(1) to supervise the safety and soundness of small business
lending companies and non-Federally regulated lenders;
(2) with respect to small business lending companies to set
capital standards to regulate, to examine, and to enforce laws
governing such companies, in accordance with the purposes of
this Act; and
(3) with respect to non-Federally regulated lenders to 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;
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(C) for willful or repeated violation of this Act;
(D) for willful or repeated violation of any condition
imposed by the Administrator with respect to any application, request, or agreement under this Act; or
(E) for violation of any cease and desist order of the
Administrator under this section.
(2) The Administrator may revoke or suspend authority
under paragraph (1) only after a hearing under subsection (f).
The Administrator may delegate power to revoke or suspend
authority under paragraph (1) only to the Deputy Administrator and only if the Administrator is unavailable to take such
action.
(A) The Administrator, after finding extraordinary circumstances and in order to protect the financial or legal
position of the United States, may issue a suspension
order without conducting a hearing pursuant to subsection
(f). If the Administrator issues a suspension under the preceding sentence, the Administrator shall within two business days follow the procedures set forth in subsection (f).
(B) Any suspension under paragraph (1) shall remain
in effect until the Administrator makes a decision pursuant to subparagraph (4) to permanently revoke the authority of the small business lending company or non-Federally
regulated lender, suspend the authority for a time certain,
or terminate the suspension.
(3) The small business lending company or non-Federally
regulated lender must notify borrowers of a revocation and
that a new entity has been appointed to service their loans.
The Administrator or an employee of the Administration designated by the Administrator may provide such notice to the
borrower.
(4) Any revocation or suspension under paragraph (1) shall
be made by the Administrator except that the Administrator
shall delegate to an administrative law judge as that term is
used in section 3105 of title 5, United States Code, the authority to conduct any hearing required under subsection (f). The
Administrator shall base the decision to revoke on the record
of the hearing.
(e) CEASE AND DESIST ORDER.—
(1) Where a small business lending company, a non-Federally regulated lender, or other person violates this Act or is engaging or is about to engage in any acts or practices which constitute or will constitute a violation of this Act, the Administrator may order, after the opportunity for hearing pursuant to
subsection (f), the company, lender, or other person to cease
and desist from such action or failure to act. The Administrator may delegate the authority under the preceding sentence only to the Deputy Administrator and only if the Administrator is unavailable to take such action.
(2) The Administrator, after finding extraordinary circumstances and in order to protect the financial or legal position of the United States, may issue a cease and desist order
without conducting a hearing pursuant to subsection (f). If the
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ceding sentence, the Administrator shall within two business
days follow the procedures set forth in subsection (f).
(3) The Administrator may further order such small business lending company or non-Federally regulated lender or
other person to take such action or to refrain from such action
as the Administrator deems necessary to insure compliance
with this Act.
(4) A cease and desist order under this subsection may also
provide for the suspension of authority to lend in subsection
(d).
(f) PROCEDURE FOR REVOCATION OR SUSPENSION OF LOAN AUTHORITY AND FOR CEASE AND DESIST ORDER.—
(1) Before revoking or suspending authority under subsection (d) or issuing a cease and desist order under subsection
(e), the Administrator shall serve an order to show cause upon
the small business lending company, non-Federally regulated
lender, or other person why an order revoking or suspending
the authority or a cease and desist order should not be issued.
The order to show cause shall contain a statement of the matters of fact and law asserted by the Administrator and the
legal authority and jurisdiction under which a hearing is to be
held, and shall set forth that a hearing will be held before an
administrative law judge at a time and place stated in the
order. Such hearing shall be conducted pursuant to the provisions of sections 554, 556, and 557 of title 5, United States
Code. If after hearing, or a waiver thereof, the Administrator
determines that an order revoking or suspending the authority
or a cease and desist order should be issued, the Administrator
shall promptly issue such order, which shall include a statement of the findings of the Administrator and the grounds and
reasons therefor and specify the effective date of the order, and
shall cause the order to be served on the small business lending company, non-Federally regulated lender, or other person
involved.
(2) Witnesses summoned before the Administrator shall be
paid by the party at whose instance they were called the same
fees and mileage that are paid witnesses in the courts of the
United States.
(3) A cease and desist order, suspension or revocation
issued by the Administrator, after the hearing under this subsection is final agency action for purposes of chapter 7 of title
5, United States Code. An adversely aggrieved party shall have
20 days from the date of issuance of the cease and desist order,
suspension or revocation, to seek judicial review in an appropriate district court.
(g) REMOVAL OR SUSPENSION OF MANAGEMENT OFFICIAL.—
(1) DEFINITION.—In this section, the term ‘‘management official’’ means, with respect to a small business lending company or a non-Federally regulated lender, an officer, director,
general partner, manager, employee, agent, or other participant in the management of the affairs of the company’s or
lender’s activities under section 7(a) of this Act.
(2) REMOVAL OF MANAGEMENT OFFICIAL.—
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(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 nonFederally regulated lender under this Act; or
(ii) willfully and knowingly commits a substantial
breach of a fiduciary duty of that person as a management official and the violation or breach of fiduciary
duty is one involving personal dishonesty on the part
of such management official.
(B) CONTENTS OF NOTICE.—A notice under subparagraph (A) shall contain a statement of the facts constituting grounds therefor and shall fix a time and place at
which a hearing, conducted pursuant to sections 554, 556,
and 557 of title 5, United States Code, will be held thereon.
(C) HEARING.—
(i) TIMING.—A hearing under subparagraph (B)
shall be held not earlier than 30 days and later than
60 days after the date of service of notice of the hearing, unless an earlier or a later date is set by the Administrator at the request of—
(I) the management official, and for good
cause shown; or
(II) the Attorney General.
(ii) CONSENT.—Unless the management official appears at a hearing under this paragraph in person or
by a duly authorized representative, the management
official shall be deemed to have consented to the
issuance of an order of removal under subparagraph
(A).
(D) ORDER OF REMOVAL.—
(i) IN GENERAL.—In the event of consent under
subparagraph (C)(ii), or if upon the record made at a
hearing under this subsection, the Administrator finds
that any of the grounds specified in the notice of removal has been established, the Administrator may
issue such orders of removal from office as the Administrator deems appropriate.
(ii) EFFECTIVENESS.—An order under clause (i)
shall—
(I) take effect 30 days after the date of service
upon the subject small business lending company
or non-Federally regulated lender and the management official concerned (except in the case of
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paragraph (C)(ii), which shall become effective at
the time specified in such order); and
(II) remain effective and enforceable, except to
such extent as it is stayed, modified, terminated,
or set aside by action of the Administrator or a 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 inFebruary 1, 2024

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formation, indictment, or complaint is finally disposed of,
or until terminated by the Administrator or upon an order
of a district court.
(C) AUTHORITY UPON CONVICTION.—If a judgment of
conviction with respect to an offense described in subparagraph (A) is entered against a management official, then
at such time as the judgment is not subject to further judicial review (and for purposes of this subparagraph shall
not include any petition for a writ of habeas corpus), the
Administrator may issue and serve upon the management
official an order removing the management official, effective upon service of a copy of the order upon the small
business lending company or non-Federally regulated lender.
(D) AUTHORITY UPON DISMISSAL OR OTHER DISPOSITION.—A finding of not guilty or other disposition of
charges described in subparagraph (A) shall not preclude
the Administrator from instituting proceedings under subsection (e) or (f).
(5) NOTIFICATION TO SMALL BUSINESS LENDING COMPANY
OR A NON-FEDERALLY REGULATED LENDER.—Copies of each notice required to be served on a management official under this
section shall also be served upon the small business lending
company or non-Federally regulated lender involved.
(6) FINAL AGENCY ACTION AND JUDICIAL REVIEW.—
(A) ISSUANCE OF ORDERS.—After a hearing under this
subsection, and not later than 30 days after the Administrator notifies the parties that the case has been submitted
for final decision, the Administrator shall render a decision
in the matter (which shall include findings of fact upon
which its decision is predicated), and shall issue and cause
to be served upon each party to the proceeding an order
or orders consistent with this section. The decision of the
Administrator shall constitute final agency action for purposes of chapter 7 of title 5, United States Code.
(B) JUDICIAL REVIEW.—An adversely aggrieved party
shall have 20 days from the date of issuance of the order
to seek judicial review in an appropriate district court.
(h) APPOINTMENT OF RECEIVER.—
(1) In any proceeding under subsection (f)(4) or subsection
(g)(6)(C), the court may take exclusive jurisdiction of a small
business lending company or a non-Federally regulated lender
and appoint a receiver 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).
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(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.
SEC. 24. ø15 U.S.C. 651¿ (a) The Administrator is authorized
to make grants to or to enter into contracts with any State for the
purpose of contracting with small businesses to plant trees on land
owned or controlled by such State or local government. The 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
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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 1995 through 1997, 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.
SEC. 25. ø15 U.S.C. 652¿ (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.
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(b) The Commission shall develop in Czechoslovakia, Poland
and Hungary (hereinafter referred to as ‘‘designated Central European countries’’) a self-sustaining system to provide management
and technical assistance to small business owners.
(1) Not later than 90 days after the effective date of this
section, the Commission, in consultation with the Agency for
International Development, shall enter a contract with one or
more entities to—
(A) determine the needs of small businesses in the
designated Central European countries for management
and technical assistance;
(B) evaluate appropriate Small Business Development
Center-programs which might be replicated in order to
meet the needs of each of such countries; and
(C) identify and assess the capability of educational institutions in each such country to develop a Small Business Development Center type program.
(2) Not later than 18 months after the effective date of this
section, the Commission shall review the recommendations
submitted to it and shall formulate and contract for the 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.
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(i) There are hereby authorized to be appropriated to the Small
Business Administration the sum of $3,000,000 for fiscal year 1991,
$5,000,000 for fiscal year 1992, $2,000,000 for each of fiscal years
1993 and 1994, and $1,000,000 for fiscal year 1995 to carry out the
provisions of this section. Such sums shall be disbursed by the
Small Business Administration as requested by the Commission
and may remain available until expended. Any authority to enter
contracts or other spending authority provided for in this section
is subject to amounts provided for in advance in appropriations
Acts.
SEC. 26. ø15 U.S.C. 653¿ OFFICE OF RURAL AFFAIRS.

(a) There is hereby established in the Small Business 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.
SEC. 27. ø15 U.S.C. 654¿ PAUL D. COVERDELL DRUG-FREE WORKPLACE
PROGRAM.
(a) DEFINITIONS.—In this section:
(1) DRUG-FREE WORKPLACE PROGRAM.—The term ‘‘drug-free

workplace program’’ means a program that includes—
(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;
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(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 District of Columbia,
or a territory of the United States; and
(D)(i) the purpose of which is—
(I) to develop comprehensive drug-free workplace programs or to supply drug-free workplace
services; or
(II) to provide other forms of assistance and
services to small business concerns; or
(ii) that is eligible to receive a grant under chapter 2 of the National Narcotics Leadership Act of 1988
(21 U.S.C. 1521 et seq.).
(3) EMPLOYEE.—The term ‘‘employee’’ includes 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
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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
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(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).
SEC. 28. ø15 U.S.C. 655¿ PILOT TECHNOLOGY ACCESS PROGRAM.
(a) ESTABLISHMENT.—The Administration, in consultation

with
the National Institute of Standards and Technology and the 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) CRITERIA FOR SELECTION OF CENTERS.—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) MATCHING REQUIREMENT.—To be eligible to receive an
award under this section, an applicant shall provide a matching
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contribution at least equal to that received under such award, not
more than 50 percent of which may be waived overhead or in-kind
contributions.
(d) PURPOSE OF AWARDS.—Awards made under this section
shall be for the purpose of increasing access by small businesses to
on-line data base services that provide technical and business 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) RENEWAL OF AWARDS.—Awards previously made under section 21A of this Act may be renewed under this section.
(f) INTERIM REPORT.—Two years after the date on which the
first award was issued under section 21A of this Act, the General
Accounting Office shall submit to the Committee on Small Business
and the Committee on Science, Space, and Technology of the House
of Representatives and to the Committee on Small Business and
the Committee on Commerce, Science, and Transportation of the
Senate, an interim report on the implementation of the program
under such section and this section, including the judgments of the
participating Centers as to its effect on small business productivity
and innovation.
(g) FINAL REPORT.—Three years after such date, the General
Accounting Office shall submit to the Committee on Small Business
and the Committee on Science, Space, and Technology of the House
of Representatives and to the Committee on Small Business and
the Committee on Commerce, Science and Transportation of the
Senate, a final report evaluating the effectiveness of the Program
under section 21A and this section in improving small business
productivity and innovation.
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to the Small Business Administration $5 million
for each of fiscal years 1992 through 1995 to carry out this section,
and such amounts may remain available until expended.
(i) 87 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
87 So

in law.

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and fostering commercialization of Federally-funded research and
development.
SEC. 29. ø15 U.S.C. 656¿ WOMEN’S BUSINESS CENTER PROGRAM.
(a) DEFINITIONS.—In this section—

(1) the term ‘‘Assistant Administrator’’ means the 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
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has been approved and notice of award has been issued, cash
contributions from non-Federal sources as follows:
(A) in the first and second years, 1 non-Federal dollar
for each 2 Federal dollars; and
(B) in the third, fourth, and fifth years, 1 non-Federal
dollar for each Federal dollar.
(2) FORM OF NON-FEDERAL CONTRIBUTIONS.—Not more
than one-half of the non-Federal sector matching assistance
may be in the form of in-kind contributions that are budget
line items only, including office equipment and office space.
(3) FORM OF FEDERAL CONTRIBUTIONS.—The financial 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 nonFederal 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;
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(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) QUALIFICATION.—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 Business Center program;
(II) recommend the annual administrative
and program budgets for the Office of Women’s
Business Ownership (including the budget for the
Women’s Business Center program);
(III) establish appropriate funding levels
therefore;
(IV) review the annual budgets submitted by
each applicant for the Women’s Business Center
program;
(V) select applicants to participate in the 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;
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(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 conFebruary 1, 2024

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tract, 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, postaward 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
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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).
ø(l) Repealed effective October 1, 2007 by 8305(b) of Public
Law 110–28.¿
(m) CONTINUED FUNDING FOR CENTERS.—
(1) IN GENERAL.—A nonprofit organization described in
paragraph (2) shall be eligible to receive, subject to paragraph
(3), a 3-year grant under this subsection.
(2) APPLICABILITY.—A nonprofit organization described in
this paragraph is a nonprofit organization that has received
funding under subsection (b) or (l).
(3) APPLICATION AND APPROVAL CRITERIA.—
(A) CRITERIA.—Subject to subparagraph (B), the Administrator shall develop and publish criteria for the consideration and approval of applications by nonprofit organizations under this subsection.
(B) CONTENTS.—Except as otherwise provided in this
subsection, the conditions for participation in the grant
program under this subsection shall be the same as the
conditions for participation in the program under subsection (l), as in effect on the date of enactment of this Act.
(C) NOTIFICATION.—Not later than 60 days after the
date of the deadline to submit applications for each fiscal
year, the Administrator shall approve or deny any application under this subsection and notify the applicant for each
such application.
(4) AWARD OF GRANTS.—
(A) IN GENERAL.—Subject to the availability of appropriations, the Administrator shall make a grant for the
Federal share of the cost of activities described in the application to each applicant approved under this subsection.
(B) AMOUNT.—A grant under this subsection shall be
for not more than $150,000, for each year of that grant.
(C) FEDERAL SHARE.—The Federal share under this
subsection shall be not more than 50 percent.
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(D) PRIORITY.—In allocating funds made available for
grants under this section, the Administrator shall give applications under this subsection or subsection (l) priority
over first-time applications under subsection (b).
(5) RENEWAL.—
(A) IN GENERAL.—The Administrator may renew a
grant under this subsection for additional 3-year periods,
if the nonprofit organization submits an application for
such renewal at such time, in such manner, and accompanied by such information as the Administrator may establish.
(B) UNLIMITED RENEWALS.—There shall be no limitation on the number of times a grant may be renewed
under subparagraph (A).
(n) PRIVACY REQUIREMENTS.—
(1) IN GENERAL.—A women’s business center may not 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—
(A) 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
(B) the Administrator considers such a disclosure to be
necessary for the purpose of conducting a financial audit
of a women’s business center, but a disclosure under this
subparagraph shall be limited to the information necessary
for such audit.
(2) ADMINISTRATION USE OF INFORMATION.—This subsection shall not—
(A) restrict Administration access to program activity
data; or
(B) prevent the Administration from using client information (other than the information described in subparagraph (A)) to conduct client surveys.
(3) REGULATIONS.—The Administrator shall issue regulations to establish standards for requiring disclosures during a
financial audit under paragraph (1)(B).
(o) STUDY AND REPORT ON REPRESENTATION OF WOMEN.—
(1) STUDY.—The Administrator shall periodically conduct a
study to identify industries, as defined under the North American Industry Classification System, underrepresented by small
business concerns owned and controlled by women.
(2) REPORT.—Not later than 3 years after the date of enactment of this subsection, and every 5 years thereafter, the
Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report on
the results of each study under paragraph (1) conducted during
the 5-year period ending on the date of the report.

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SEC. 30. ø15 U.S.C. 657¿ OVERSIGHT OF REGULATORY ENFORCEMENT.
(a) DEFINITIONS.—For purposes of this section, the term—
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(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 407 of title 5, United States Code;
(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.
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(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 United States mails in the
same manner and under the same conditions as other departments and agencies of the Federal Government.
(3) The Board may accept donations of services necessary
to conduct its business, provided that the donations and their
sources are disclosed by the Board.
(4) Members of the Board shall serve without 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.
(e) CENTRALIZED WEBSITE.—Not later than 6 months after the
date of the enactment of this subsection, the Ombudsman shall
maintain a publicly available website that includes—
(1) hyperlinks to small entity compliance guides described
under section 212(a)(1) of the Small Business Regulatory Enforcement Fairness Act of 1996; and
(2) with respect to each such small entity compliance
guide, the contact information for an individual who can offer
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assistance to small entities with respect to the rules that are
the subject of such guide.
(f) REPORT ON AGENCY COMPLIANCE.—The Ombudsman shall
include in the annual report required under subsection (b)(2)(C) an
assessment of agency compliance with the requirements of section
212 of the Small Business Regulatory Enforcement Fairness Act of
1996 for the year covered by such annual report.
SEC. 31. ø15 U.S.C. 657a¿ HUBZONE PROGRAM.
(a) IN GENERAL.—There is established

within the Administration a program (to be known as the HUBZone program) to be carried out by the Administrator to provide for Federal contracting assistance, including promoting economic development in economically distressed areas (as defined in section 7(m)(11)), to qualified
HUBZone small business concerns in accordance with this section.
(b) DEFINITIONS RELATING TO HUBZONES.—In this section:
(1) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The
terms ‘‘historically underutilized business zone’’ or ‘‘HUBZone’’
mean 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;
(E) base closure areas;
(F) qualified disaster areas; or
(G) a Governor-designated covered area.
(2) HUBZONE SMALL BUSINESS CONCERN.—The term
‘‘HUBZone small business concern’’ means—
(A) a small business concern that is at least 51 percent
owned and controlled by United States citizens;
(B) a small business concern that is—
(i) an Alaska Native Corporation owned and controlled by Natives (as determined pursuant to section
29(e)(1) of the Alaska Native Claims Settlement Act
(43 U.S.C. 1626(e)(1))); or
(ii) a direct or indirect subsidiary corporation,
joint venture, or partnership of an Alaska Native Corporation qualifying pursuant to section 29(e)(1) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1626(e)(1)), if that subsidiary, joint venture, or partnership is owned and controlled by Natives (as determined pursuant to section 29(e)(2)) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(2)));
(C) a small business concern—
(i) that is wholly owned by one or more Indian
tribal governments, or by a corporation that is wholly
owned by one or more Indian tribal governments; or
(ii) that is owned in part by one or more Indian
tribal governments, or by a corporation that is wholly
owned by one or more Indian tribal governments, if all
other owners are either United States citizens or small
business concerns;
(D) a small business concern—
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(i) that is wholly owned by one or more Native
Hawaiian Organizations (as defined in section
8(a)(15)), or by a corporation that is wholly owned by
one or more Native Hawaiian Organizations; or
(ii) that is owned in part by one or more Native
Hawaiian Organizations, or by a corporation that is
wholly owned by one or more Native Hawaiian Organizations, if all other owners are either United States
citizens or small business concerns;
(E) a small business concern that is—
(i) wholly owned by a community development corporation that has received financial assistance under
part 1 of subchapter A of the Community Economic
Development Act of 1981 (42 U.S.C. 9805 et seq.); or
(ii) owned in part by one or more community development corporations, if all other owners are either
United States citizens or small business concerns; or
(F) a small business concern that is—
(i) a small agricultural cooperative organized or
incorporated in the United States;
(ii) wholly owned by 1 or more small agricultural
cooperatives organized or incorporated in the United
States; or
(iii) owned in part by 1 or more small agricultural
cooperatives organized or incorporated in the United
States, if all owners are small business concerns or
United States citizens.
(3) QUALIFIED AREAS.—
(A) QUALIFIED CENSUS TRACT.—
(i) IN GENERAL.—The term ‘‘qualified census tract’’
means a census tract that is covered by the definition
of ‘‘qualified census tract’’ in section 42(d)(5)(B)(ii) of
the Internal Revenue Code of 1986 and that is reflected in an online tool prepared by the Administrator
described under subsection (d)(7).
(ii) EXCEPTION.—For any metropolitan statistical
area in the Commonwealth of Puerto Rico, the term
‘‘qualified census tract’’ has the meaning given that
term in section 42(d)(5)(B)(ii) of the Internal Revenue
Code of 1986 as applied without regard to subclause
(II) of such section and that is reflected in the online
tool described under clause (i), except that this clause
shall only apply—
(I) 10 years after the date that the Administrator implements this clause, or
(II) the date on which the Financial Oversight
and Management Board for the Commonwealth of
Puerto Rico created by the Puerto Rico Oversight,
Management, and Economic Stability Act ceases
to exist,
whichever event occurs first.
(B) QUALIFIED NONMETROPOLITAN COUNTY.—The term
‘‘qualified nonmetropolitan county’’ means any county that
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is reflected in the online tool described under subparagraph (A)(i) and—
(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)(B)(ii) of the Internal Revenue Code of 1986; and
(ii) in which—
(I) the median household income is less than
80 percent of the State median household income,
based on a 5-year average of the available data
from the Bureau of the Census of the Department
of Commerce;
(II) the unemployment rate is not less than
140 percent of the average unemployment rate for
the United States or for the State in which such
county is located, whichever is less, based on a 5year average of the available data from the Secretary of Labor; or
(III) there is located a difficult development
area, as designated by the Secretary of Housing
and Urban Development in accordance with section 42(d)(5)(B)(iii) of the Internal Revenue Code
of 1986, within Alaska, Hawaii, or any territory or
possession of the United States outside the 48
contiguous States.
(C) REDESIGNATED AREA.—The term ‘‘redesignated
area’’ means any census tract that ceases to be qualified
under subparagraph (A) and any nonmetropolitan county
that ceases to be qualified under subparagraph (B) for a
period of 3 years after the date on which the census tract
or nonmetropolitan county ceased to be so qualified.
(D) BASE CLOSURE AREA.—
(i) IN GENERAL.—Subject to clause (ii), the term
‘‘base closure area’’ means—
(I) lands within the external boundaries of a
military installation that were closed through a
privatization process under the authority of—
(aa) 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);
(bb) title II of the Defense Authorization
Amendments and Base Closure and Realignment Act (Public Law 100–526; 10 U.S.C.
2687 note);
(cc) section 2687 of title 10, United States
Code; or
(dd) 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
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redevelopment, while retaining the authority
to enter into a leaseback of all or a portion of
the property for military use;
(II) the census tract or nonmetropolitan county in which the lands described in subclause (I)
are wholly contained;
(III) a census tract or nonmetropolitan county
the boundaries of which intersect the area described in subclause (I); and
(IV) a census tract or nonmetropolitan county
the boundaries of which are contiguous to the area
described in subclause (II) or subclause (III).
(ii) LIMITATION.—A census tract or nonmetropolitan county described in clause (i) shall be considered
to be a base closure area for a period beginning on the
date on which the Administrator designates such census tract or nonmetropolitan county as a base closure
area and ending on the date on which the base closure
area ceases to be a qualified census tract under subparagraph (A) or a qualified nonmetropolitan county
under subparagraph (B) in accordance with the online
tool prepared by the Administrator described under
subsection (d)(7), except that such period may not be
less than 8 years.
(iii) DEFINITIONS.—In this subparagraph:
(I) CENSUS TRACT.—The term ‘‘census tract’’
means a census tract delineated by the United
States Bureau of the Census in the most recent
decennial census that is not located in a nonmetropolitan county and does not otherwise qualify as a qualified census tract.
(II) NONMETROPOLITAN COUNTY.—The term
‘‘nonmetropolitan county’’ means a county that
was not located in a metropolitan statistical area
(as defined in section 143(k)(2)(B) of the Internal
Revenue Code of 1986) at the time of the most recent census taken for purposes of selecting qualified census tracts and does not otherwise qualify
as a qualified nonmetropolitan county.
(E) QUALIFIED DISASTER AREA.—
(i) IN GENERAL.—Subject to clause (ii), the term
‘‘qualified disaster area’’ means any census tract or
nonmetropolitan county located in an area where a
major disaster has occurred or an area in which a catastrophic incident has occurred if such census tract or
nonmetropolitan county ceased to be qualified under
subparagraph (A) or (B), as applicable, during the period beginning 5 years before the date on which the
President declared the major disaster or the catastrophic incident occurred.
(ii) DURATION.—A census tract or nonmetropolitan
county shall be considered to be a qualified disaster
area under clause (i) only for the period of time ending
on the date the area ceases to be a qualified census
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tract under subparagraph (A) or a qualified nonmetropolitan county under subparagraph (B), in accordance
with the online tool prepared by the Administrator described under subsection (d)(7) and beginning—
(I) in the case of a major disaster, on the date
on which the President declared the major disaster for the area in which the census tract or
nonmetropolitan county, as applicable, is located;
or
(II) in the case of a catastrophic incident, on
the date on which the catastrophic incident occurred in the area in which the census tract or
nonmetropolitan county, as applicable, is located.
(iii) DEFINITIONS.—In this subparagraph:
(I) MAJOR DISASTER.—The term ‘‘major disaster’’ means a major disaster declared by the
President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5170).
(II) OTHER DEFINITIONS.—The terms ‘‘census
tract’’ and ‘‘nonmetropolitan county’’ have the
meanings given such terms in subparagraph
(D)(iii).
(F) GOVERNOR-DESIGNATED COVERED AREA.—
(i) IN GENERAL.—A ‘‘Governor-designated covered
area’’ means a covered area that the Administrator
has designated by approving a petition described
under clause (ii).
(ii) PETITION.—For a covered area to receive a designation as a Governor-designated covered area, the
Governor of the State in which the covered area is
wholly contained shall include such covered area in a
petition to the Administrator requesting such a designation. In reviewing a request for designation included in such a petition, the Administrator may consider—
(I) the potential for job creation and investment in the covered area;
(II) the demonstrated interest of small business concerns in the covered area to be designated
as a Governor-designated covered area;
(III) how State and local government officials
have incorporated the covered area into an economic development strategy; and
(IV) if the covered area was a HUBZone before becoming the subject of the petition, the impact on the covered area if the Administrator did
not approve the petition.
(iii) LIMITATIONS.—Each calendar year, a Governor may submit not more than 1 petition described
under clause (ii). Such petition shall include all covered areas in a State for which the Governor seeks
designation as a Governor-designated covered area, except that the total number of covered areas included
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in such petition may not exceed 10 percent of the total
number of covered areas in the State.
(iv) CERTIFICATION.—If the Administrator grants a
petition described under clause (ii), the Governor of
the Governor-designated covered area shall, not less
frequently than annually, submit data to the Administrator certifying that each Governor-designated covered area continues to meet the requirements of clause
(v)(I).
(v) DEFINITIONS.—In this subparagraph:
(I) COVERED AREA.—The term ‘‘covered area’’
means an area in a State—
(aa) that is located outside of an urbanized area, as determined by the Bureau of the
Census;
(bb) with a population of not more than
50,000; and
(cc) for which the average unemployment
rate is not less than 120 percent of the average unemployment rate of the United States
or of the State in which the covered area is located, whichever is less, based on the most recent data available from the American Community Survey conducted by the Bureau of
the Census.
(II) GOVERNOR.—The term ‘‘Governor’’ means
the chief executive of a State.
(III) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States
Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands, and American Samoa.
(4) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The
term ‘‘qualified HUBZone small business concern’’ means a
HUBZone small business concern that has been certified by the
Administrator in accordance with the procedures described in
this section.
(5) 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 the enactment of this
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paragraph, unless that tribe is recognized after
that date of the 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 the 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 the enactment; and
(ii) in the State of Oklahoma, means lands that—
(I) are within the jurisdictional areas of an
Oklahoma Indian tribe (as determined by the Secretary of the Interior); and
(II) are recognized by the Secretary of the Interior as eligible for trust land status under part
151 of title 25, Code of Federal Regulations (as in
effect on the date of the enactment of this paragraph).
(6) 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).
(c) 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.—
(A) SOLE SOURCE CONTRACTS.—A contracting officer
may award sole source contracts under this section to any
qualified HUBZone small business concern, if—
(i) the qualified HUBZone small business concern
is determined to be a responsible contractor with respect to performance of such contract opportunity, and
the contracting officer does not have a reasonable expectation that 2 or more qualified HUBZone small
business concerns will submit offers for the contracting opportunity;
(ii) the anticipated award price of the contract (including options) will not exceed—
(I) $7,000,000, 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
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(iii) in the estimation of the contracting officer,
the contract award can be made at a fair and reasonable price.
(B) RESTRICTED COMPETITION.—A contract opportunity
may 88 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.
(C) APPEALS.—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 preference shall be—
(i) 10 percent, for the portion of a contract to be
awarded that is not greater than 25 percent of the
total volume being procured for each commodity in a
single invitation;
(ii) 5 percent, for the portion of a contract to be
awarded that is greater than 25 percent, but not
greater than 40 percent, of the total volume being 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
88 Section 1347(b)(1) and (c)(3)(A) of Public Law 111–240 (124 Stat. 2547) provide for amendments to section 31(b)(2)(B) of the Small Business Act. The two amendments are in conflict with
each other and as such there is uncertainty as to which amendment should be executed; however, the version shown here reflects the execution of the amendment made by section
1347(c)(3)(A) of such Public Law.

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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.).
(d) ELIGIBILITY REQUIREMENTS; ENFORCEMENT.—
(1) CERTIFICATION.—In order to be eligible for certification
by the Administrator as a qualified HUBZone small business
concern, a HUBZone small business concern shall submit documentation to the Administrator stating that—
(A) at the time of certification and at each examination conducted pursuant to paragraph (4), the principal office of the concern is located in a HUBZone and not fewer
than 35 percent of its employees reside in a HUBZone;
(B) the concern will attempt to maintain the applicable employment percentage under subparagraph (A) during the performance of any contract awarded to such concern on the basis of a preference provided under subsection
(c); and
(C) the concern will ensure that the requirements of
section 46 are satisfied with respect to any subcontract entered into by such concern pursuant to a contract awarded
under this section.
(2) VERIFICATION.—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
HUBZone small business concern to receive assistance
under this section (including a challenge, filed by an interested party, relating to the veracity of documentation provided to the Administration by such a concern under paragraph (1)); and
(B) verification by the Administrator of the accuracy of
any documentation provided by a HUBZone small business
concern under paragraph (1).
(3) TIMING.—The Administrator shall verify the eligibility
of a HUBZone small business concern using the procedures described in paragraph (2) within a reasonable time and not later
than 60 days after the date on which the Administrator receives sufficient and complete documentation from a HUBZone
small business concern under paragraph (1).
(4) RECERTIFICATION.—Not later than 3 years after the
date that such HUBZone small business concern was certified
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as a qualified HUBZone small business concern, and every 3
years thereafter, the Administrator shall verify the accuracy of
any documentation provided by a HUBZone small business
concern under paragraph (1) to determine if such HUBZone
small business concern remains a qualified HUBZone small
business concern.
(5) EXAMINATIONS.—The Administrator shall conduct program examinations of qualified HUBZone small business concerns, using a risk-based analysis to select which concerns are
examined, to ensure that any concern examined meets the requirements of paragraph (1).
(6) LOSS OF CERTIFICATION.—A HUBZone small business
concern that, based on the results of an examination conducted
pursuant to paragraph (5) no longer meets the requirements of
paragraph (1), shall have 30 days to submit documentation to
the Administrator to be eligible to be certified as a qualified
HUBZone small business concern. During the 30-day period,
such concern may not compete for or be awarded a contract
under this section. If such concern fails to meet the requirements of paragraph (1) by the last day of the 30-day period,
the Administrator shall not certify such concern as a qualified
HUBZone small business concern.
(7) HUBZONE ONLINE TOOL.—
(A) IN GENERAL.—The Administrator shall develop a
publicly accessible online tool that depicts HUBZones.
Such online tool shall be updated—
(i) with respect to HUBZones described under subparagraphs (A) and (B) of subsection (b)(3), beginning
on January 1, 2020, and every 5 years thereafter;
(ii) with respect to a HUBZone described under
subsection (b)(3)(C), immediately after the area becomes, or ceases to be, a redesignated area; and
(iii) with respect to HUBZones described under
subparagraphs (D), (E), and (F) of subsection (b)(3),
immediately after an area is designated as a base closure area, qualified disaster area, or Governor-designated covered area, respectively.
(B) DATA.—The online tool required under subparagraph (A) shall clearly and conspicuously provide access to
the data used by the Administrator to determine whether
or not an area is a HUBZone in the year in which the online tool was prepared.
(C) NOTIFICATION OF UPDATE.—The Administrator
shall include in the online tool a notification of the date on
which the online tool, and the data used to create the online tool, will be updated.
(8) LIST OF QUALIFIED HUBZONE SMALL BUSINESS CONCERNS.—The Administrator shall establish and publicly maintain on the internet a list of qualified HUBZone small business
concerns that shall—
(A) to the extent practicable, include the name, address, and type of business with respect to such concern;
(B) be updated by the Administrator not less than annually; and
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(C) be provided upon request to any Federal agency or
other entity.
(9) PROVISION OF DATA.—Upon the request of the Administrator, the Secretary of Labor, the Administrator of the Federal
Emergency Management Agency, the Secretary of Housing and
Urban Development, and the Secretary of the Interior (or the
Assistant Secretary for Indian Affairs), shall promptly provide
to the Administrator such information as the Administrator determines to be necessary to carry out this subsection.
(10) 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 ‘‘qualified HUBZone small business concern’’ for
purposes of this section shall be subject to liability for fraud,
including section 1001 of title 18, United States Code, and sections 3729 through 3733 of title 31, United States Code.
(e) PERFORMANCE METRICS.—
(1) IN GENERAL.—Not later than 1 year after the date of
the enactment of this subsection, the Administrator shall publish performance metrics designed to measure the success of
the HUBZone program established under this section in meeting the program’s objective of promoting economic development
in economically distressed areas (as defined in section
7(m)(11)).
(2) COLLECTING AND MANAGING HUBZONE DATA.—The Administrator shall develop processes to incentivize each regional
office of the Administration to collect and manage data on
HUBZones within the geographic area served by such regional
office.
(3) REPORT.—Not later than 90 days after the last day of
each fiscal year, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of Representatives a report analyzing the data from the performance
metrics established under this subsection and including—
(A) the number of HUBZone small business concerns
that lost certification as a qualified HUBZone small business concern because of the results of an examination performed under subsection (d)(5); and
(B) the number of those concerns that did not submit
documentation to be recertified under subsection (d)(6).
(f) 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 2020 through 2025.
SEC. 32. ø15 U.S.C. 657b¿ VETERANS PROGRAMS.
(a) OFFICE OF VETERANS BUSINESS DEVELOPMENT.—There

is
established in the Administration an Office of Veterans Business
Development, which shall be administered by the Associate 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—
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(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) INTERAGENCY TASK FORCE.—
(1) ESTABLISHMENT.—Not later than 90 days after the date
of enactment of this subsection, the President shall establish
an interagency task force to coordinate the efforts of Federal
agencies necessary to improve capital and business development opportunities for, and ensure achievement of the pre-established Federal contracting goals for, small business concerns owned and controlled by service-disabled veterans and
small business concerns owned and controlled by veterans (in
this section referred to as the ‘‘task force’’).
(2) MEMBERSHIP.—The members of the task force shall include—
(A) the Administrator, who shall serve as chairperson
of the task force; and
(B) a senior level representative from—
(i) the Department of Veterans Affairs;
(ii) the Department of Defense;
(iii) the Administration (in addition to the Administrator);
(iv) the Department of Labor;
(v) the Department of the Treasury;
(vi) the General Services Administration;
(vii) the Office of Management and Budget; and
(viii) 4 representatives from a veterans service organization or military organization or association, selected by the President.
(3) DUTIES.—The task force shall—
(A) consult regularly with veterans service organizations and military organizations in performing the duties
of the task force; and
(B) coordinate administrative and regulatory activities
and develop proposals relating to—
(i) improving capital access and capacity of small
business concerns owned and controlled by service-disabled veterans and small business concerns owned and
controlled by veterans through loans, surety bonding,
and franchising;
(ii) ensuring achievement of the pre-established
Federal contracting goals for small business concerns
owned and controlled by service-disabled veterans and
small business concerns owned and controlled by veterans through expanded mentor-prote´ge´ assistance
and matching such small business concerns with contracting opportunities;
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(iii) increasing the integrity of certifications of status as a small business concern owned and controlled
by service-disabled veterans or a small business concern owned and controlled by veterans;
(iv) reducing paperwork and administrative burdens on veterans in accessing business development
and entrepreneurship opportunities;
(v) increasing and improving training and counseling services provided to small business concerns
owned and controlled by veterans; and
(vi) making other improvements relating to the
support for veterans business development by the Federal Government.
(d) PARTICIPATION IN TAP WORKSHOPS.—
(1) IN GENERAL.—The Associate Administrator shall increase veteran outreach by ensuring that Veteran Business
Outreach Centers regularly participate, on a nationwide basis,
in the workshops of the Transition Assistance Program of the
Department of Labor.
(2) PRESENTATIONS.—In carrying out paragraph (1), a Veteran Business Outreach Center may provide grants to entities
located in Transition Assistance Program locations to make
presentations on the opportunities available from the Administration for recently separating or separated veterans. Each
presentation under this paragraph shall include, at a minimum, a description of the entrepreneurial and business training resources available from the Administration.
(3) WRITTEN MATERIALS.—The Associate Administrator
shall—
(A) create written materials that provide comprehensive information on self-employment and veterans entrepreneurship, including information on resources available
from the Administration on such topics; and
(B) make the materials created under subparagraph
(A) available to the Secretary of Labor for inclusion in the
Transition Assistance Program manual.
(4) REPORTS.—The Associate Administrator shall submit to
Congress progress reports on the implementation of this subsection.
(e) WOMEN VETERANS BUSINESS TRAINING.—The Associate Administrator shall—
(1) compile information on existing resources available to
women veterans for business training, including resources
for—
(A) vocational and technical education;
(B) general business skills, such as marketing and accounting; and
(C) business assistance programs targeted to women
veterans; and
(2) disseminate the information compiled under paragraph
(1) through Veteran Business Outreach Centers and women’s
business centers.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section—
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(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
(g) ACCESS TO SURPLUS PROPERTY FOR VETERAN-OWNED SMALL
BUSINESSES.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘foreign excess property’’ has the meaning given the term in section 102 of title 40, United States
Code; and
(B) the term ‘‘state agency’’ has the meaning given the
term, including the roles and responsibilities assigned, in
section 549 of title 40, United States Code.
(2) REQUIREMENT.—The Administrator, in coordination
with the Administrator of General Services, shall provide access to and manage the distribution of surplus property, and
foreign excess property returned to a State for handling as surplus property, owned by the United States under chapter 7 of
title 40, United States Code, to small business concerns owned
and controlled by veterans (as verified by the Secretary of Veterans Affairs under section 8127 of title 38, United States
Code) pursuant to a memorandum of agreement between the
Administrator, the Administrator of General Services, and the
head of the applicable state agency for surplus properties and
in accordance with section 549 of title 40, United States Code.
øSection 33 repealed by section 1699(a) of division A of Public
Law 112–239.¿
SEC. 34. ø15 U.S.C. 657d¿ FEDERAL AND STATE TECHNOLOGY 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 providing 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) CATASTROPHIC INCIDENT.—The term ‘‘catastrophic incident’’ means a major disaster that is comparable to the description of a catastrophic incident in the National Response
Plan of the Administration, or any successor thereto.
(4) FAST PROGRAM.—The term ‘‘FAST program’’ means the
Federal and State Technology Partnership Program established under this section.
(5) MENTOR.—The term ‘‘mentor’’ means an individual described in section 35(c)(2).
(6) 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).
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(7) RECIPIENT.—The term ‘‘recipient’’ means a person that
receives an award or becomes party to a cooperative agreement
under this section.
(8) SBIR PROGRAM.—The term ‘‘SBIR program’’ has the
same meaning as in section 9(e)(4).
(9) STATE.—The term ‘‘State’’ means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
(10) 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
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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;
(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;
(v) the manner in which the applicant will measure the results of the activities to be conducted; and
(vi) whether the proposal addresses the needs of
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; and
(C) shall give special consideration to an applicant
that is located in an area affected by a catastrophic incident.
(3) PROPOSAL LIMIT.—Not more than one 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
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trator shall promulgate regulations establishing standards for
the consideration of proposals under paragraph (2), including
standards regarding each of the considerations identified in
paragraph (2)(B).
(5) ADDITIONAL ASSISTANCE FOR CATASTROPHIC INCIDENTS.—Upon application by an applicant that receives an
award or has in effect a cooperative agreement under this section and that is located in an area affected by a catastrophic
incident, the Administrator may—
(A) provide additional assistance to the applicant; and
(B) waive the matching requirements under subsection
(e)(2).
(d) COOPERATION AND COORDINATION.—In carrying out the
FAST program 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 and 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.
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(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 the 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
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(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.
SEC. 35. ø15 U.S.C. 657e¿ 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—
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(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.
SEC. 36. ø15 U.S.C. 657f¿ PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SERVICEDISABLED VETERANS.
(a) CONTRACTING OFFICER DEFINED.—For purposes of this sec-

tion, the term ‘‘contracting officer’’ has the meaning given such
term in section 2101 of title 41, United States Code.
(b) CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY SERVICE-DISABLED VETERANS.—With respect to a
procurement program or preference established under this Act that
applies to prime contractors, the Administrator shall—
(1) certify the status of a concern as a small business concern owned and controlled by service-disabled veterans; and
(2) require the periodic recertification of such status.
(c) 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 opporFebruary 1, 2024

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tunity and the contracting officer does not have a reasonable
expectation that 2 or more small business concerns owned and
controlled by service-disabled veterans will submit offers for
the contracting opportunity;
(2) the anticipated award price of the contract (including
options) will not exceed—
(A) $7,000,000, 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.
(d) 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 certified under subsection (b) 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.
(e) 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-WagnerO’Day Act (41 U.S.C. 46 et seq.).
(f) DATABASE OF VETERAN-OWNED BUSINESSES.—(1) Subject to
paragraphs (2) through (6), the Administrator shall maintain a
database of small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, and the veteran owners of such business concerns.
(2)(A) To be eligible for inclusion in the database, such a veteran shall submit to the Administrator such information as the Administrator may require with respect to the small business concern
or the veteran. Application for inclusion in the database shall constitute permission under section 552a of title 5, United States
Code, (commonly referred to as the Privacy Act) for the Administrator to obtain from the Secretary of Veterans Affairs such personal information maintained by the Secretary as may be necessary to verify the information contained in the application.
(B) For purposes of this subsection—
(i) the Secretary of Veterans Affairs shall—
(I) verify an individual’s status as a veteran or a service-disabled veteran; and
(II) establish a system to permit the Administrator to
access, but not alter, the verification of such status; and
(ii) the Administrator shall verify—
(I) the status of a business concern as a small business
concern; and
(II) the ownership and control of such business concern.
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(C) The Administrator may not certify a concern under subsection (b) or section 36A if the Secretary of Veterans Affairs cannot provide the verification described under subparagraph (B)(i)(I).
(3) Information maintained in the database shall be submitted
on a voluntary basis by a veteran described in paragraph (1).
(4) the Administrator shall make the database available to all
Federal departments and agencies and shall notify each such department and agency of the availability of the database.
(5) If the Administrator determines that the public dissemination of certain types of information maintained in the database is
inappropriate, the Administrator shall take such steps as are necessary to maintain such types of information in a secure and confidential manner.
(6)(A) If a small business concern is not included in the database because the Administrator does not certify the status of the
concern as a small business concern owned and controlled by veterans (under section 36A) or a small business concern owned and
controlled by service-disabled veterans (under subsection (g) of this
section), the concern may appeal the denial of certification to the
Office of Hearings and Appeals of the Administration (as established under section 5(i)). The decision of the Office of Hearings
and Appeals shall be considered a final agency action.
(B)(i) If an interested party challenges the inclusion in the
database of a small business concern owned and controlled by veterans or a small business concern owned and controlled by servicedisabled veterans based on the status of the concern as a small
business concern or the ownership or control of the concern, the
challenge shall be heard by the Office of Hearings and Appeals as
described in subparagraph (A). The decision of the Office of Hearings and Appeals shall be considered final agency action.
(ii) In this subparagraph, the term ‘‘interested party’’
means—
(I) the Secretary of Veterans Affairs or the Administrator; or
(II) in the case of a small business concern that is
awarded a contract, the applicable contracting officer or
another small business concern that submitted an offer for
the contract that was awarded to the small business concern that is the subject of a challenge made under clause
(i).
(g) CERTIFICATION REQUIREMENT.—Notwithstanding subsection
(c), a contracting officer may only award a sole source contract to
a small business concern owned and controlled by service-disabled
veterans or a contract on the basis of competition restricted to
small business concerns owned and controlled by service-disabled
veterans if such a concern is certified by the Administrator as a
small business concern owned and controlled by service-disabled
veterans.
(h) 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
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(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 subsection (b)); 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 subsection
(b).
(2) EXAMINATIONS.—The procedures established under
paragraph (1) shall provide for a program of examinations by
the Administrator of any small business concern making a certification or providing information to the Administrator under
subsection (b), to determine the veracity of any statements or
information provided as part of such certification or otherwise
provided under subsection (b).
(3) ENFORCEMENT; PENALTIES.—Rules similar to the rules
of paragraphs (5) and (6) of section 8(m) shall apply for purposes of this section and section 36A.
(i) 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 subsection (b) or to
be able to certify the status of the concern as a small business concern owned and controlled by veterans under section 36A.
SEC. 36A. ø15 U.S.C. 657f–1¿ CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY VETERANS.
(a) IN GENERAL.—With respect to the program established

under section 8127 of title 38, United States Code, the Administrator shall—
(1) certify the status of a concern as a small business concern owned and controlled by veterans; and
(2) require the periodic recertification of such status.
(b) 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 section 36 (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 subsection (a)); 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 subsection
(a).
(2) EXAMINATION OF APPLICANTS.—The procedures established under paragraph (1) shall provide for a program of examinations by the Administrator of any small business concern
making a certification or providing information to the Administrator under subsection (a), to determine the veracity of any
statements or information provided as part of such certification
or otherwise provided under subsection (a).
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SEC. 37. ø15 U.S.C. 657i¿ COORDINATION OF DISASTER ASSISTANCE
PROGRAMS WITH FEMA.
(a) COORDINATION REQUIRED.—The Administrator shall ensure

that the disaster assistance programs of the Administration are coordinated, to the maximum extent practicable, with the disaster assistance programs of the Federal Emergency Management Agency.
(b) REGULATIONS REQUIRED.—The Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, shall establish regulations to ensure that each application for disaster assistance is submitted as quickly as practicable
to the Administration or directed to the appropriate agency under
the circumstances.
(c) COMPLETION; REVISION.—The initial regulations shall be
completed not later than 270 days after the date of the enactment
of the Small Business Disaster Response and Loan Improvements
Act of 2008. Thereafter, the regulations shall be revised on an annual basis.
(d) REPORT.—The Administrator shall include a report on the
regulations whenever the Administration submits the report required by section 43.
SEC. 38. ø15 U.S.C. 657j¿ INFORMATION TRACKING AND FOLLOW-UP
SYSTEM FOR DISASTER ASSISTANCE.
(a) SYSTEM REQUIRED.—The Administrator shall develop, im-

plement, or maintain a centralized information system to track
communications between personnel of the Administration and applicants for disaster assistance. The system shall ensure that
whenever an applicant for disaster assistance communicates with
such personnel on a matter relating to the application, the following information is recorded:
(1) The method of communication.
(2) The date of communication.
(3) The identity of the personnel.
(4) A summary of the subject matter of the communication.
(b) FOLLOW-UP REQUIRED.—The Administrator shall ensure
that an applicant for disaster assistance receives, by telephone,
mail, or electronic mail, follow-up communications from the Administration at all critical stages of the application process, including
the following:
(1) When the Administration determines that additional
information or documentation is required to process the application.
(2) When the Administration determines whether to approve or deny the loan.
(3) When the primary contact person managing the loan
application has changed.
(c) REPORT ON WEB PORTAL FOR DISASTER LOAN APPLICATION
STATUS.—
(1) IN GENERAL.—Not later than 90 days after the date of
enactment of this subsection, the Administrator shall submit to
the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report relating to the creation of a web portal to the track the status of applications for disaster assistance under section 7(b).
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(2) CONTENTS.—The report under paragraph (1) shall include—
(A) information on the progress of the Administration
in implementing the information system under subsection
(a);
(B) recommendations from the Administration relating
to the creation of a web portal for applicants to check the
status of an application for disaster assistance under section 7(b), including a review of best practices and web portal models from the private sector;
(C) information on any related costs or staffing needed
to implement such a web portal;
(D) information on whether such a web portal can
maintain high standards for data privacy and data security;
(E) information on whether such a web portal will
minimize redundancy among Administration disaster programs, improve management of the number of inquiries
made by disaster applicants to employees located in the
area affected by the disaster and to call centers, and reduce paperwork burdens on disaster victims; and
(F) such additional information as is determined necessary by the Administrator.
SEC. 39. ø15 U.S.C. 657k¿ DISASTER PROCESSING REDUNDANCY.
(a) IN GENERAL.—The Administrator shall ensure that the

Administration has in place a facility for disaster loan processing
that, whenever the Administration’s primary facility for disaster
loan processing becomes unavailable, is able to take over all disaster loan processing from that primary facility within 2 days.
(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as may be necessary to carry out this
section.
SEC. 40. ø15 U.S.C. 657l¿ COMPREHENSIVE DISASTER RESPONSE PLAN.
(a) PLAN REQUIRED.—The Administrator shall develop, imple-

ment, or maintain a comprehensive written disaster response plan.
The plan shall include the following:
(1) For each region of the Administration, a description of
the disasters most likely to occur in that region.
(2) For each disaster described under paragraph (1)—
(A) an assessment of the disaster;
(B) an assessment of the demand for Administration
assistance most likely to occur in response to the disaster;
(C) an assessment of the needs of the Administration,
with respect to such resources as information technology,
telecommunications, human resources, and office space, to
meet the demand referred to in subparagraph (B); and
(D) guidelines pursuant to which the Administration
will coordinate with other Federal agencies and with State
and local authorities to best respond to the demand referred to in subparagraph (B) and to best use the resources
referred to in that subparagraph.
(b) COMPLETION; REVISION.—The first plan required by subsection (a) shall be completed not later than 180 days after the
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date of the enactment of this section. Thereafter, the Administrator
shall update the plan on an annual basis and following any major
disaster relating to which the Administrator declares eligibility for
additional disaster assistance under section 7(b)(9).
(c) KNOWLEDGE REQUIRED.—The Administrator shall carry out
subsections (a) and (b) through an individual with substantial
knowledge in the field of disaster readiness and emergency response.
(d) REPORT.—The Administrator shall include a report on the
plan whenever the Administration submits the report required by
section 43.
SEC. 41. ø15 U.S.C. 657m¿ PLANS TO SECURE SUFFICIENT OFFICE
SPACE.
(a) PLANS REQUIRED.—The Administrator shall develop long-

term plans to secure sufficient office space to accommodate an expanded workforce in times of disaster.
(b) REPORT.—The Administrator shall include a report on the
plans developed under subsection (a) each time the Administration
submits a report required under section 43.
SEC. 42. ø15 U.S.C. 657n¿ IMMEDIATE DISASTER ASSISTANCE PROGRAM.
(a) PROGRAM REQUIRED.—The Administrator shall carry out a

program, to be known as the Immediate Disaster Assistance program, under which the Administration participates on a deferred
(guaranteed) basis in 85 percent of the balance of the financing outstanding at the time of disbursement of the loan if such balance
is less than or equal to $25,000 for businesses affected by a disaster.
(b) ELIGIBILITY REQUIREMENT.—To receive a loan guaranteed
under subsection (a), the applicant shall also apply for, and meet
basic eligibility standards for, a loan under subsection (b) or (c) of
section 7.
(c) USE OF PROCEEDS.—A person who receives a loan under
subsection (b) or (c) of section 7 shall use the proceeds of that loan
to repay all loans guaranteed under subsection (a), if any, before
using the proceeds for any other purpose.
(d) LOAN TERMS.—
(1) NO PREPAYMENT PENALTY.—There shall be no prepayment penalty on a loan guaranteed under subsection (a).
(2) REPAYMENT.—A person who receives a loan guaranteed
under subsection (a) and who is disapproved for a loan under
subsection (b) or (c) of section 7, as the case may be, shall
repay the loan guaranteed under subsection (a) not later than
the date established by the Administrator, which may not be
earlier than 10 years after the date on which the loan guaranteed under subsection 89 is disbursed.
(e) APPROVAL OR DISAPPROVAL.—The Administrator shall ensure that each applicant for a loan under the program receives a
decision approving or disapproving of the application within 36
hours after the Administration receives the application.
89 The

word ‘‘subsection’’ probably should be ‘‘subsection (a)’’.

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SEC. 43. ø15 U.S.C. 657o¿ ANNUAL REPORTS ON DISASTER ASSISTANCE.

Not later than 45 days after the end of a fiscal year, the Administrator shall submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the disaster assistance operations of the Administration for that fiscal year. The
report shall—
(1) specify the number of Administration personnel involved in such operations;
(2) describe any material changes to those operations, such
as changes to technologies used or to personnel responsibilities;
(3) describe and assess the effectiveness of the Administration in responding to disasters during that fiscal year, including a description of the number and amounts of loans made for
damage and for economic injury; and
(4) describe the plans of the Administration for preparing
to respond to disasters during the next fiscal year.
SEC. 44. ø15 U.S.C. 657q¿ CONSOLIDATION OF CONTRACT REQUIREMENTS.
(a) DEFINITIONS.—In this section—

(1) the term ‘‘Chief Acquisition Officer’’ means the employee of a Federal agency appointed or designated as the
Chief Acquisition Officer for the Federal agency under section
1702(a) of title 41, United States Code;
(2) the term ‘‘consolidation of contract requirements’’, with
respect to contract requirements of a Federal agency, means a
use of a solicitation to obtain offers for a single contract or a
multiple award contract—
(A) to satisfy 2 or more requirements of the Federal
agency for goods or services that have been provided to or
performed for the Federal agency under 2 or more separate
contracts lower in cost than the total cost of the contract
for which the offers are solicited; or
(B) to satisfy requirements of the Federal agency for
construction projects to be performed at 2 or more discrete
sites; and
(3) the term ‘‘senior procurement executive’’ means an official designated under section 1702(c) of title 41, United States
Code as the senior procurement executive for a Federal agency.
(b) POLICY.—The head of each Federal agency shall ensure that
the decisions made by the Federal agency regarding consolidation
of contract requirements of the Federal agency are made with a
view to providing small business concerns with appropriate opportunities to participate as prime contractors and subcontractors in
the procurements of the Federal agency.
(c) LIMITATION ON USE OF ACQUISITION STRATEGIES INVOLVING
CONSOLIDATION.—
(1) IN GENERAL.—The head of a Federal agency may not
carry out an acquisition strategy that includes a consolidation
of contract requirements of the Federal agency with a total
value of more than $2,000,000, unless the senior procurement
executive or Chief Acquisition Officer for the Federal agency,
before carrying out the acquisition strategy—
(A) conducts market research;
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(B) identifies any alternative contracting approaches
that would involve a lesser degree of consolidation of contract requirements;
(C) makes a written determination that the consolidation of contract requirements is necessary and justified;
(D) identifies any negative impact by the acquisition
strategy on contracting with small business concerns; and
(E) ensures that steps will be taken to include small
business concerns in the acquisition strategy.
(2) DETERMINATION THAT CONSOLIDATION IS NECESSARY
AND JUSTIFIED.—
(A) IN GENERAL.—A senior procurement executive or
Chief Acquisition Officer may determine that an acquisition strategy involving a consolidation of contract requirements is necessary and justified for the purposes of paragraph (1)(C) if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative contracting approaches identified under paragraph
(1)(B).
(B) SAVINGS IN ADMINISTRATIVE OR PERSONNEL
COSTS.—For purposes of subparagraph (A), savings in administrative or personnel costs alone do not constitute a
sufficient justification for a consolidation of contract requirements in a procurement unless the expected total
amount of the cost savings, as determined by the senior
procurement executive or Chief Acquisition Officer, is expected to be substantial in relation to the total cost of the
procurement.
(C) NOTICE.—Not later than 7 days after making a determination that an acquisition strategy involving a consolidation of contract requirements is necessary and justified under subparagraph (A), the senior procurement executive or Chief Acquisition Officer shall publish a notice on
a public website that such determination has been made.
Any solicitation for a procurement related to the acquisition strategy may not be published earlier than 7 days
after such notice is published. Along with the publication
of the solicitation, the senior procurement executive or
Chief Acquisition Officer shall publish a justification for
the determination, which shall include the information in
subparagraphs (A) through (E) of paragraph (1).
(3) BENEFITS TO BE CONSIDERED.—The benefits considered
for the purposes of paragraphs (1) and (2) may include cost
and, regardless of whether quantifiable in dollar amounts—
(A) quality;
(B) acquisition cycle;
(C) terms and conditions; and
(D) any other benefit.
SEC. 45. ø15 U.S.C. 657r¿ MENTOR-PROTEGE PROGRAMS.
(a) ADMINISTRATION PROGRAM.—
(1) AUTHORITY.—The Administrator is authorized

to establish a mentor-protege program for all small business concerns.

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(2) MODEL FOR PROGRAM.—The mentor-protege program
established under paragraph (1) shall be identical to the mentor-protege program of the Administration for small business
concerns that participate in the program under section 8(a) (as
in effect on the date of enactment of this section), except that
the Administrator may modify the program to the extent necessary given the types of small business concerns included as
proteges.
(3) PUERTO RICO BUSINESSES.—During the period beginning on the date of enactment of this paragraph and ending on
the date on which the Oversight Board established under section 101 of the Puerto Rico Oversight, Management, and Economic Stability Act (48 U.S.C. 2121) terminates, the Administrator shall identify potential incentives to a covered mentor
that awards a subcontract to its covered protege, including—
(A) positive consideration in any past performance
evaluation of the covered mentor; and
(B) the application of costs incurred for providing
training to such covered protege to the subcontracting plan
(as required under paragraph (4) or (5) of section 8(d)) of
the covered mentor.
(4) COVERED TERRITORY BUSINESSES.—During the period
beginning on the date of the enactment of this paragraph and
ending on the date that is 4 years after such date of enactment, the Administrator shall identify potential incentives to a
covered territory mentor that awards a subcontract to its covered territory protege, including—
(A) positive consideration in any past performance
evaluation of the covered territory mentor; and
(B) the application of costs incurred for providing
training to such covered territory protege to the subcontracting plan (as required under paragraph (4) or (5) of
section 8(d)) of the covered territory mentor.
(b) PROGRAMS OF OTHER AGENCIES.—
(1) APPROVAL REQUIRED.—Except as provided in paragraph
(4), a Federal department or agency may not carry out a mentor-protege program for small business concerns unless—
(A) the head of the department or agency submits a
plan to the Administrator for the program; and
(B) the Administrator approves such plan.
(2) BASIS FOR APPROVAL.—The Administrator shall approve
or disapprove a plan submitted under paragraph (1) based on
whether the program proposed—
(A) will assist proteges to compete for Federal prime
contracts and subcontracts; and
(B) complies with the regulations issued under paragraph (3).
(3) REGULATIONS.—Not later than 270 days after the date
of enactment of this section, the Administrator shall issue, subject to notice and comment, regulations with respect to mentorprotege programs, which shall ensure that such programs improve the ability of proteges to compete for Federal prime contracts and subcontracts and which shall address, at a minimum, the following:
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(A) Eligibility criteria for program participants, including any restrictions on the number of mentor-protege relationships permitted for each participant, except that such
restrictions shall not apply to up to 2 mentor-protege relationships if such relationships—
(i) are between a covered protege and a covered
mentor; or
(ii) are between a covered territory protege and a
covered territory mentor.
(B) The types of developmental assistance to be provided by mentors, including how the assistance provided
shall improve the competitive viability of the proteges.
(C) Whether any developmental assistance provided by
a mentor may affect the status of a program participant as
a small business concern due to affiliation.
(D) The length of mentor-protege relationships.
(E) The effect of mentor-protege relationships on contracting.
(F) Benefits that may accrue to a mentor as a result
of program participation.
(G) Reporting requirements during program participation.
(H) Postparticipation reporting requirements.
(I) The need for a mentor-protege pair, if accepted to
participate as a pair in a mentor-protege program of any
Federal department or agency, to be accepted to participate as a pair in all Federal mentor-protege programs.
(J) Actions to be taken to ensure benefits for proteges
and to protect a protege against actions by a mentor that—
(i) may adversely affect the protege’s status as a
small business concern; or
(ii) provide disproportionate economic benefits to
the mentor relative to those provided the protege.
(K) The types of assistance provided by a mentor to
assist with compliance with the requirements of contracting with the Federal Government after award of a
contract or subcontract under this section.
(4) LIMITATION ON APPLICABILITY.—Paragraph (1) does not
apply to the following:
(A) Any mentor-protege program of the Department of
Defense.
(B) Any mentoring assistance provided under a Small
Business Innovation Research Program or a Small Business Technology Transfer Program.
(C) Until the date that is 1 year after the date on
which the Administrator issues regulations under paragraph (3), any Federal department or agency operating a
mentor-protege program in effect on the date of enactment
of this section.
(c) REPORTING.—
(1) IN GENERAL.—Not later than 2 years after the date of
enactment of this section, and annually thereafter, the Administrator shall submit to the Committee on Small Business of
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the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report that—
(A) identifies each Federal mentor-protege program;
(B) specifies the number of participants in each such
program, including the number of participants that are—
(i) small business concerns;
(ii) small business concerns owned and controlled
by service-disabled veterans;
(iii) qualified HUBZone small business concerns;
(iv) small business concerns owned and controlled
by socially and economically disadvantaged individuals; or
(v) small business concerns owned and controlled
by women;
(C) describes the type of assistance provided to proteges under each such program;
(D) describes the benefits provided to mentors under
each such program; and
(E) describes the progress of proteges under each such
program with respect to competing for Federal prime contracts and subcontracts.
(2) PROVISION OF INFORMATION.—The head of each Federal
department or agency carrying out a mentor-protege program
shall provide to the Administrator, on an annual basis, the information necessary for the Administrator to submit a report
required under paragraph (1).
(d) DEFINITIONS.—In this section, the following definitions
apply:
(1) MENTOR.—The term ‘‘mentor’’ means a for-profit business concern, of any size, that—
(A) has the ability to assist and commits to assisting
a protege to compete for Federal prime contracts and subcontracts; and
(B) satisfies any other requirements imposed by the
Administrator.
(2) MENTOR-PROTEGE PROGRAM.—The term ‘‘mentor-protege program’’ means a program that pairs a mentor with a
protege for the purpose of assisting the protege to compete for
Federal prime contracts and subcontracts.
(3) PROTEGE.—The term ‘‘protege’’ means a small business
concern that—
(A) is eligible to enter into Federal prime contracts
and subcontracts; and
(B) satisfies any other requirements imposed by the
Administrator.
(4) COVERED MENTOR.—The term ‘‘covered mentor’’ means
a mentor that enters into an agreement under this Act, or
under any mentor-protege program approved under subsection
(b)(1), with a covered protege.
(5) COVERED PROTEGE.—The term ‘‘covered protege’’ means
a protege of a covered mentor that is a Puerto Rico business.
(6) COVERED TERRITORY MENTOR.—The term ‘‘covered territory mentor’’ means a mentor that enters into an agreement
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under this Act, or under any mentor-protege program approved
under subsection (b)(1), with a covered territory protege.
(7) COVERED TERRITORY PROTEGE.—The term ‘‘covered territory protege’’ means a protege of a covered territory mentor
that is a covered territory business.
(e) CURRENT MENTOR PROTEGE AGREEMENTS.—Mentors and
proteges with approved agreement in a program operating pursuant to subsection (b)(4)(C) shall be permitted to continue their relationship according to the terms specified in their agreement until
the expiration date specified in the agreement.
(f) SUBMISSION OF AGENCY PLANS.—Agencies operating mentor
protege programs pursuant to subsection (b)(4)(C) shall submit the
plans specified in subsection (b)(1)(A) to the Administrator within
6 months of the promulgation of rules required by subsection (b)(3).
The Administrator shall provide initial comments on each plan
within 60 days of receipt, and final approval or denial of each plan
within 180 days after receipt.
SEC. 46. ø15 U.S.C. 657s¿ LIMITATIONS ON SUBCONTRACTING.
(a) IN GENERAL.—If awarded a contract under section

8(a),
8(m), 15(a), 31, or 36, a covered small business concern—
(1) in the case of a contract for services, may not expend
on subcontractors more than 50 percent of the amount paid to
the concern under the contract;
(2) in the case of a contract for supplies (other than from
a regular dealer in such supplies), may not expend on subcontractors more than 50 percent of the amount, less the cost
of materials, paid to the concern under the contract;
(3) in the case of a contract described in paragraphs (1)
and (2)—
(A) shall determine for which category, services (as described in paragraph (1)) or supplies (as described in paragraph (2)), the greatest percentage of the contract is
awarded;
(B) shall determine the amount awarded under the
contract for that category of services or supplies; and
(C) may not expend on subcontractors, with respect to
the amount determined under subparagraph (B), more
than 50 percent of that amount; and
(4) in the case of a contract which is principally for supplies from a regular dealer in such supplies, and which is not
a contract principally for services or construction, shall supply
the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—
(A) by the Administrator, after reviewing a determination by the applicable 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 by the contract; or
(B) by the Administrator for a product (or class of
products), after determining that no small business manufacturer or processor is available to participate in the Federal procurement market.
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(b) SIMILARLY SITUATED ENTITIES.—Contract amounts expended by a covered small business concern on a subcontractor
that is a similarly situated entity shall not be considered subcontracted for purposes of determining whether the covered small
business concern has violated a requirement established under subsection (a) or (d).
(c) MODIFICATIONS OF PERCENTAGES.—The Administrator may
change, by rule (after providing notice and an opportunity for public comment), a percentage specified in paragraphs (1) through (4)
of subsection (a) if the Administrator determines that such change
is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category.
(d) OTHER CONTRACTS.—
(1) IN GENERAL.—With respect to a category of contracts to
which a requirement under subsection (a) does not apply, the
Administrator is authorized to establish, by rule (after providing notice and an opportunity for public comment), a requirement that a covered small business concern may not expend on subcontractors more than a specified percentage of the
amount paid to the concern under a contract in that category.
(2) UNIFORMITY.—A requirement established under paragraph (1) shall apply to all covered small business concerns.
(3) CONSTRUCTION PROJECTS.—The Administrator shall establish, through public rulemaking, requirements similar to
those specified in paragraph (1) to be applicable to contracts
for general and specialty construction and to contracts for any
other industry category not otherwise subject to the requirements of such paragraph. The percentage applicable to any
such requirement shall be determined in accordance with paragraph (1).
(e) DEFINITIONS.—In this section, the following definitions
apply:
(1) COVERED SMALL BUSINESS CONCERN.—The term ‘‘covered small business concern’’ means a business concern that—
(A) with respect to a contract awarded under section
8(a), is a small business concern eligible to receive contracts under that section;
(B) with respect to a contract awarded under section
8(m)—
(i) is a small business concern owned and controlled by women (as defined in that section); or
(ii) is a small business concern owned and controlled by women (as defined in that section) that is
not less than 51 percent owned by 1 or more women
who are economically disadvantaged (and such ownership is determined without regard to any community
property law);
(C) with respect to a contract awarded under section
15(a), is a small business concern;
(D) with respect to a contract awarded under section
31, is a qualified HUBZone small business concern; or
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(E) with respect to a contract awarded under section
36, is a small business concern owned and controlled by
service-disabled veterans.
(2) SIMILARLY SITUATED ENTITY.—The term ‘‘similarly situated entity’’ means a subcontractor that—
(A) if a subcontractor for a small business concern, is
a small business concern;
(B) if a subcontractor for a small business concern eligible to receive contracts under section 8(a), is such a concern;
(C) if a subcontractor for a small business concern
owned and controlled by women (as defined in section
8(m)), is such a concern;
(D) if a subcontractor for a small business concern
owned and controlled by women (as defined in section
8(m)) that is not less than 51 percent owned by 1 or more
women who are economically disadvantaged (and such
ownership is determined without regard to any community
property law), is such a concern;
(E) if a subcontractor for a qualified HUBZone small
business concern, is such a concern; or
(F) if a subcontractor for a small business concern
owned and controlled by service-disabled veterans, is such
a concern.
SEC. 47. ø15 U.S.C. 657t¿ OFFICE OF CREDIT RISK MANAGEMENT.
(a) ESTABLISHMENT.—There is established within the Adminis-

tration the Office of Credit Risk Management (in this section referred to as the ‘‘Office’’).
(b) DUTIES.—The Office shall be responsible for supervising—
(1) any lender making loans under section 7(a) (in this section referred to as a ‘‘7(a) lender’’);
(2) any Lending Partner or Intermediary participant of the
Administration in a lending program of the Office of Capital
Access of the Administration; and
(3) any small business lending company or a non-Federally
regulated lender without regard to the requirements of section
23.
(c) DIRECTOR.—
(1) IN GENERAL.—The Office shall be headed by the Director of the Office of Credit Risk Management (in this section referred to as the ‘‘Director’’), who shall be a career appointee in
the Senior Executive Service (as defined in section 3132 of title
5, United States Code).
(2) DUTIES.—The Director shall be responsible for oversight of the lenders and participants described in subsection
(b), including by conducting periodic reviews of the compliance
and performance of such lenders and participants.
(d) SUPERVISION DUTIES FOR 7(A) LENDERS.—
(1) REVIEWS.—With respect to 7(a) lenders, an employee of
the Office shall—
(A) be present for and supervise any such review that
is conducted by a contractor of the Office on the premise
of the 7(a) lender; and
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(B) supervise any such review that is not conducted on
the premise of the 7(a) lender.
(2) REVIEW REPORT TIMELINE.—
(A) IN GENERAL.—Notwithstanding any other requirements of the Office or the Administrator, the Administrator shall develop and implement a review report
timeline which shall—
(i) require the Administrator to—
(I) deliver a written report of the review to
the 7(a) lender not later than 60 business days
after the date on which the review is concluded; or
(II) if the Administrator expects to submit the
report after the end of the 60-day period described
in clause (i), notify the 7(a) lender of the expected
date of submission of the report and the reason for
the delay; and
(ii) if a response by the 7(a) lender is requested in
a report submitted under subparagraph (A), require
the 7(a) lender to submit responses to the Administrator not later than 45 business days after the date
on which the 7(a) lender receives the report.
(B) EXTENSION.—The Administrator may extend the
time frame described in subparagraph (A)(i)(II) with respect to a 7(a) lender as the Administrator determines necessary.
(e) ENFORCEMENT AUTHORITY AGAINST 7(a) LENDERS.—
(1) INFORMAL ENFORCEMENT AUTHORITY.—The Director
may take an informal enforcement action against a 7(a) lender
if the Director finds that the 7(a) lender has violated a statutory or regulatory requirement under section 7(a) or any requirement in a Standard Operating Procedures Manual or Policy Notice related to a program or function of the Office of Capital Access.
(2) FORMAL ENFORCEMENT AUTHORITY.—
(A) IN GENERAL.—With the approval of the Lender
Oversight Committee established under section 48, the Director may take a formal enforcement action against any
7(a) lender if the Director finds that the 7(a) lender has
violated—
(i) a statutory or regulatory requirement under
section 7(a), including a requirement relating to credit
elsewhere; or
(ii) any requirement described in a Standard Operating Procedures Manual or Policy Notice, related to
a program or function of the Office of Capital Access.
(B) ENFORCEMENT ACTIONS.—An enforcement action
imposed on a 7(a) lender by the Director under subparagraph (A) shall be based on the severity or frequency of
the violation and may include assessing a civil monetary
penalty against the 7(a) lender in an amount that is not
greater than $250,000.
(3) APPEAL BY LENDER.—A 7(a) lender may appeal an enforcement action imposed by the Director described in this subsection to the Office of Hearings and Appeals established under
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section 5(i) or to an appropriate district court of the United
States.
(f) REGULATIONS.—Not later than 1 year after the date of the
enactment of this section, the Administrator shall issue regulations, after opportunity for notice and comment, to carry out subsection (e).
(g) SERVICING AND LIQUIDATION RESPONSIBILITIES.—During
any period during which a 7(a) lender is suspended or otherwise
prohibited from making loans under section 7(a), the 7(a) lender
shall remain obligated to maintain all servicing and liquidation activities delegated to the lender by the Administrator, unless otherwise specified by the Director.
(h) PORTFOLIO RISK ANALYSIS OF 7(a) LOANS.—
(1) IN GENERAL.—The Director shall annually conduct a
risk analysis of the portfolio of the Administration with respect
to all loans guaranteed under section 7(a).
(2) REPORT TO CONGRESS.—On December 1, 2018, and
every December 1 thereafter, the Director shall submit to Congress a report containing the results of each portfolio risk analysis conducted under paragraph (1) during the fiscal year preceding the submission of the report, which shall include—
(A) an analysis of the overall program risk of loans
guaranteed under section 7(a);
(B) an analysis of the program risk, set forth separately by industry concentration;
(C) without identifying individual 7(a) lenders by
name, a consolidated analysis of the risk created by the individual 7(a) lenders responsible for not less than 1 percent of the gross loan approvals set forth separately for the
year covered by the report by—
(i) the dollar value of the loans made by such 7(a)
lenders; and
(ii) the number of loans made by such 7(a) lenders;
(D) steps taken by the Administrator to mitigate the
risks identified in subparagraphs (A), (B), and (C);
(E) the number of 7(a) lenders, the number of loans
made, and the gross and net dollar amount of loans made;
(F) the number and dollar amount of total losses, the
number and dollar amount of total purchases, and the percentage and dollar amount of recoveries at the Administration;
(G) the number and type of enforcement actions recommended by the Director;
(H) the number and type of enforcement actions approved by the Lender Oversight Committee established
under section 48;
(I) the number and type of enforcement actions disapproved by the Lender Oversight Committee; and
(J) the number and dollar amount of civil monetary
penalties assessed.
(i) BUDGET SUBMISSION AND JUSTIFICATION.—The Director
shall annually provide, in writing, a fiscal year budget submission
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for the Office and a justification for such submission to the Administrator. Such submission and justification shall—
(1) include salaries and expenses of the Office and the
charge for the lender oversight fees;
(2) be submitted at or about the time of the budget submission by the President under section 1105(a) of title 31; and
(3) be maintained in an indexed form and made available
for public review for a period of not less than 5 years beginning
on the date of submission and justification.
SEC. 48. ø15 U.S.C. 657u¿ LENDER OVERSIGHT COMMITTEE.
(a) ESTABLISHMENT.—There is established within the

Administration the Lender Oversight Committee (in this section referred to
as the ‘‘Committee’’).
(b) MEMBERSHIP.—The Committee shall consist of at least 8
members selected by the Administrator, of which—
(1) 3 members shall be voting members, 2 of whom shall
be career appointees in the Senior Executive Service (as defined in section 3132 of title 5, United States Code); and
(2) the remaining members shall be nonvoting members
who shall serve in an advisory capacity on the Committee.
(c) DUTIES.—The Committee shall—
(1) review reports on lender oversight activities;
(2) review formal enforcement action recommendations of
the Director of the Office of Credit Risk Management with respect to any lender making loans under section 7(a) and any
Lending Partner or Intermediary participant of the Administration in a lending program of the Office of Capital Access of
the Administration;
(3) in carrying out paragraph (2) with respect to formal enforcement actions taken under subsection (d) or (e) of section
23, vote to recommend or not recommend action to the Administrator or a designee of the Administrator;
(4) in carrying out paragraph (2) with respect to any formal enforcement action not specified under subsection (d) or (e)
of section 23, vote to approve, disapprove, or modify the action;
(5) review, in an advisory capacity, any lender oversight,
portfolio risk management, or program integrity matters
brought by the Director; and
(6) take such other actions and perform such other functions as may be delegated to the Committee by the Administrator.
(d) MEETINGS.—
(1) IN GENERAL.—The Committee shall meet as necessary,
but not less frequently than on a quarterly basis.
(2) REPORTS.—The Committee shall submit to the Administrator a report detailing each meeting of the Committee, including if the Committee does or does not vote to approve a formal enforcement action of the Director of the Office of Credit
Risk Management with respect to a lender.
SEC. 49. ø15 U.S. C. 631 note¿ All laws and parts of laws inconsistent with this Act are hereby repealed to the extent of such
inconsistency.
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