[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4801 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4801

        To amend the Small Business Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 20, 1994

Mr. LaFalce (for himself, Mr. Smith of Iowa, Mr. Skelton, Mr. Mazzoli, 
 Mr. Wyden, Mr. Bilbray, Mr. Mfume, Mr. Klink, Ms. Roybal- Allard, Mr. 
  Hilliard, and Mr. Thompson of Mississippi) introduced the following 
      bill; which was referred to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
        To amend the Small Business Act, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
That this Act may be cited as the ``Small Business Reauthorization and 
Amendment Act of 1994''.

                        TITLE I--AUTHORIZATIONS

SEC. 101. AUTHORIZATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended by striking all of such section after subsection (k), as added 
by section 115(a) of the Small Business Credit and Business Opportunity 
Enhancement Act of 1992, and by inserting in lieu thereof the 
following:
    ``(l) The following program levels are authorized for fiscal year 
1995:
            ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make $142,000,000 in direct and 
        immediate participation loans; and of such sum, the 
        Administration is authorized to make $12,000,000 in loans as 
        provided in section 7(a)(10) and $130,000,000 in loans as 
        provided in section 7(m).
            ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $12,320,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                    ``(A) $9,315,000,000 in general business loans as 
                provided in section 7(a);
                    ``(B) $2,200,000,000 in financings as provided in 
                section 7(a)(13) and section 504 of the Small Business 
                Investment Act of 1958; and
                    ``(C) $20,000,000 in loans as provided in section 
                7(m).
            ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                    ``(A) $33,000,000 in purchases of preferred 
                securities;
                    ``(B) $285,000,000 in guarantees of debentures, of 
                which $55,000,000 is authorized in guarantees of 
                debentures from companies operating pursuant to section 
                301(d) of such Act; and
                    ``(C) $500,000,000 in guarantees of participating 
                securities.
            ``(4) 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 
        $1,800,000,000, of which not more than $600,000,000 may be in 
        bonds approved pursuant to the provisions of section 411(a)(3) 
        of such Act.
            ``(5) For the Service Corps of Retired Executives program 
        authorized by section 8(b)(1) of this Act, the Administration 
        is authorized to make grants or enter cooperative agreements 
        not to exceed $3,500,000, and for the small business institute 
        program authorized by section 8(b)(1) of this Act, the 
        Administration is authorized to make grants or enter 
        cooperative agreements not to exceed $3,000,000.
    ``(m) There are authorized to be appropriated to the Administration 
for fiscal year 1995 such sums as may be necessary to carry out the 
provisions of this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the provisions of the Small Business Investment Act of 1958, 
including salaries and expenses of the Administration.
    ``(n) The following program levels are authorized for fiscal year 
1996:
            ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make $208,000,000 in direct and 
        immediate participation loans; and of such sum the 
        Administration is authorized to make $13,000,000 in loans as 
        provided in section 7(a)(10) and $195,000,000 in loans as 
        provided in section 7(m).
            ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $14,610,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                    ``(A) $10,935,000,000 in general business loans as 
                provided in section 7(a);
                    ``(B) $2,500,000,000 in financings as provided in 
                section 7(a)(13) and section 504 of the Small Business 
                Investment Act of 1958; and
                    ``(C) $20,000,000 in loans as provided in section 
                7(m).
            ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                    ``(A) $39,000,000 in purchases of preferred 
                securities;
                    ``(B) $405,000,000 in guarantees of debentures, of 
                which $55,000,000 is authorized in guarantees of 
                debentures from companies operating pursuant to section 
                301(d) of such Act; and
                    ``(C) $750,000,000 in guarantees of participating 
                securities.
            ``(4) 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 
        $1,800,000,000, of which not more than $600,000,000 may be in 
        bonds approved pursuant to the provisions of section 411(a)(3) 
        of such Act.
            ``(5) For the Service Corps of Retired Executives program 
        authorized by section 8(b)(1) of this Act, the Administration 
        is authorized to make grants or enter cooperative agreements 
        not to exceed $3,675,000, and for the small business institute 
        program authorized by section 8(b)(1) of this Act, the 
        Administration is authorized to make grants or enter 
        cooperative agreements not to exceed $3,150,000.
    ``(o) There are authorized to be appropriated to the Administration 
for fiscal year 1996 such sums as may be necessary to carry out the 
provisions of this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the provisions of the Small Business Investment Act of 1958, 
including salaries and expenses of the Administration.
    ``(p) The following program levels are authorized for fiscal year 
1997:
            ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make $284,000,000 in direct and 
        immediate participation loans; and of such sum the 
        Administration is authorized to make $14,000,000 in loans as 
        provided in section 7(a)(10) and $270,000,000 in loans as 
        provided in section 7(m).
            ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $18,875,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                    ``(A) $14,175,000,000 in general business loans as 
                provided in section 7(a);
                    ``(B) $3,000,000,000 in financings as provided in 
                section 7(a)(13) and section 504 of the Small Business 
                Investment Act of 1958; and
                    ``(C) $20,000,000 in loans as provided in section 
                7(m).
            ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                    ``(A) $45,000,000 in purchases of preferred 
                securities;
                    ``(B) $555,000,000 in guarantees of debentures, of 
                which $55,000,000 is authorized in guarantees of 
                debentures from companies operating pursuant to section 
                301(d) of such Act; and
                    ``(C) $1,125,000,000 in guarantees of participating 
                securities.
            ``(4) 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 
        $1,800,000,000, of which not more than $600,000,000 may be in 
        bonds approved pursuant to the provisions of section 411(a)(3) 
        of such Act.
            ``(5) For the Service Corps of Retired Executives program 
        authorized by section 8(b)(1) of this Act, the Administration 
        is authorized to make grants or enter cooperative agreements 
        not to exceed $3,860,000, and for the small business institute 
        program authorized by section 8(b)(1) of this Act, the 
        Administration is authorized to make grants or enter 
        cooperative agreements not to exceed $3,310,000.
    ``(q) There are authorized to be appropriated to the Administration 
for fiscal year 1997 such sums as may be necessary to carry out the 
provisions of this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the provisions of the Small Business Investment Act of 1958, 
including salaries and expenses of the Administration.''.

                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

SEC. 201. MICROLOAN FINANCING PILOT.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is 
amended by adding the following new paragraph at the end:
            ``(12) Deferred participation loan pilot.--During fiscal 
        years 1995 through 1997, on a pilot basis, in lieu of making 
        direct loans to intermediaries as authorized in paragraph 
        (1)(B), the Administration may participate on a deferred basis 
        of up to 100 percent on loans made to intermediaries by a for-
        profit or non-profit entity or by alliances of such entities 
        subject to the following conditions:
                    ``(A) Number of loans.--The Administration shall 
                not participate in providing financing on a deferred 
                basis to more than ten intermediaries in urban areas 
                per year and to more than ten intermediaries in rural 
                areas per year.
                    ``(B) Term of loans.--The term of such loans shall 
                be ten years. During the first five years of the loan, 
                the intermediary shall be required to pay interest 
                only; and during the second five years of the loan, the 
                intermediary shall be required to fully amortize 
                principal and interest payments.
                    ``(C) Interest rate.--The interest rate on such 
                loans shall be the rate specified by paragraph (3)(F) 
                for direct loans.''.

SEC. 202. MICROLOAN STATE LIMITATION.

    Section 7(m)(7)(C) of the Small Business Act (15 U.S.C. 
636(m)(7)(C)) is repealed.

SEC. 203. LIMIT ON PARTICIPATION.

    Section 7(m)(7)(A) of the Small Business Act (15 U.S.C. 
636(m)(7)(A)) is amended to read as follows:
                    ``(A) Number of participants.--During this 
                demonstration program, the Administration is authorized 
                to fund, on a competitive basis, not more than 240 
                microloan programs.''.

SEC. 204. EQUITABLE DISTRIBUTION.

    Section 7(m)(8) of the Small Business Act (15 U.S.C. 636(m)(8)) is 
amended to read as follows:
            ``(8) Equitable distribution of intermediaries.--In 
        approving microloan program applicants, the Administration 
        shall select participation by such intermediaries as will 
        ensure appropriate availability of loans to small businesses 
        located in urban areas and in rural areas.''.

SEC. 205. AMOUNT OF LOANS TO INTERMEDIARIES.

    Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
636(m)(3)(C)) is amended to read as follows:
                    ``(C) Loan limits.--In determining the amount of 
                funding which the Administration may provide to one 
                intermediary, it shall take into consideration the 
                small business population in the area served by the 
                intermediary.''.

SEC. 206. LOANS TO EXPORTERS.

    Section 7(a)(14)(A) of the Small Business Act (15 U.S.C. 
636(a)(14)(A)) is amended to read as follows:
                    ``(A) The Administration may provide extensions, 
                standby letters of credit, revolving lines of credit 
                for export purposes, and other financing to enable 
                small business concerns, including small business 
                export trading companies and small business export 
                management companies, to develop foreign markets. A 
                bank or participating lending institution may establish 
                the rate of interest on such financings as may be legal 
                and reasonable.''.

SEC. 207. WORKING CAPITAL INTERNATIONAL TRADE LOANS.

    Section 7(a)(3)(B) of the Small Business Act (15 U.S.C. 
636(a)(3)(B)) is amended to read as follows:
                    ``(B) if the total amount outstanding and committed 
                (on a deferred basis) solely for the purposes provided 
                in paragraph (16) to the borrower from the business 
                loan and investment fund established by this Act would 
                exceed $1,250,000, of which not more than $750,000 may 
                be used for working capital, supplies, or financings 
                under section 7(a)(14) for export purposes; and''.

SEC. 208. GUARANTEES ON INTERNATIONAL TRADE LOANS.

    Section 7(a)(2)(B)(iv) of the Small Business Act (15 U.S.C. 
636(a)(2)(B)(iv)) is amended to read as follows:
                    ``(iv) not less than 85 percent nor more than 90 
                percent of the financing outstanding at the time of 
                disbursement if such financing is a loan under 
                paragraph (14) or under paragraph (16).''.

SEC. 209. ACCREDITED LENDERS PROGRAM.

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

``SEC. 507. ACCREDITED LENDERS PROGRAM.

    ``(a) The Administration is authorized to establish an Accredited 
Lenders Program for qualified State and local development companies 
which meet the requirements of subsection (b).
    ``(b) The Administration may designate a qualified State or local 
development company as an accredited lender if such company--
            ``(1) has been an active participant in the development 
        company program for at least the last 12 months;
            ``(2) has well-trained, qualified personnel who are 
        knowledgeable in the Administration's lending policies and 
        procedures for the development company program;
            ``(3) has the ability to process, close, and service 
        financing for plant and equipment under section 502 of this 
        Act;
            ``(4) has a loss rate on its debentures that is acceptable 
        to the Administration;
            ``(5) has a history of submitting to the Administration 
        complete and accurate debenture guaranty application packages; 
        and
            ``(6) has demonstrated the ability to serve small business 
        credit needs for financing plant and equipment as provided in 
        section 502 of this Act.
    ``(c) The Administration shall expedite the processing of a loan 
application or servicing action submitted by a qualified State or local 
development company that has been designated as an accredited lender in 
accordance with subsection (b).
    ``(d) The designation of a qualified State or local development 
company as an accredited lender may be suspended or revoked if the 
Administration determines that the development company has not 
continued to meet the criteria for eligibility under subsection (b) or 
that the development company has failed to adhere to the 
Administration's rules and regulations or is violating any other 
applicable provision of law. Suspension or revocation shall not affect 
any outstanding debenture guarantee.
    ``(e) For purposes of this section, the term `qualified State or 
local development company' has the same meaning as in section 
503(e).''.
    (b) The Administration shall promulgate regulations to carry out 
this section within 90 days of the date of the enactment of this Act.
    (c) The Administration shall report to the Small Business Committee 
of the United States Senate and to the Small Business Committee of the 
United States House of Representatives within one year, and annually 
thereafter, on the implementation of this section, specifically 
including data on the number of development companies designated as 
accredited lenders, their debenture guarantee volume, their loss rates, 
and the average processing time on their guarantee applications, along 
with such other information as the Administration deems appropriate.

SEC. 210. PREMIER LENDERS PROGRAM.

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

``SEC. 508. PREMIER LENDERS PROGRAM.

    ``(a) The Administration is authorized to establish a Premier 
Lenders Program for certified development companies which meet the 
requirements of subsection (b).
    ``(b) The Administration may designate a participant in the 
accredited lenders program as a premier lender if such company--
            ``(1) has been an active participant in the accredited 
        lenders program for at least the last 12 months: Provided, That 
        prior to January 1, 1996, the Administration may waive this 
        provision if the applicant is qualified to participate in the 
        accredited lenders program;
            ``(2) has a history of submitting to the Administration 
        adequately analyzed debenture guarantee application packages; 
        and
            ``(3) agrees to assume and to reimburse the Administration 
        for 5 percent of any loss sustained by the Administration on 
        account of default by the certified development company in the 
        payment of principal or interest on a debenture issued by such 
        company and guaranteed by the Administration under this 
        section.
    ``(c) Upon approval of an applicant as a premier lender, the 
certified development company shall establish a loss reserve in an 
amount equal to the anticipated losses to the certified development 
company pursuant to subsection (b)(3) based upon the historic loss rate 
on debentures issued by such company, or 3 percent of the aggregate 
principal amount of debentures issued by such company and guaranteed by 
the Administration under this section, whichever is greater. The loss 
reserve shall be comprised of segregated assets of the development 
company which shall be securitized in favor of the Administration or of 
such unqualified letters of credit or indemnity agreements from a third 
party as the Administration deems appropriate.
    ``(d) Upon designation and qualification of a company as a premier 
lender, and subject to such terms and conditions as the Administration 
may determine, and notwithstanding the provisions of section 503(b)(6), 
the Administration may permit a premier lender to approve loans to be 
funded with the proceeds of and to authorize the guarantee of a 
debenture issued by such company. The approval by the premier lender 
shall be subject to the final approval as to eligibility of any such 
guarantee by the Administration pursuant to subsection 503(a) of this 
Act, but such final approval shall not include decisions by the company 
involving creditworthiness, loan closing, or compliance with legal 
requirements imposed by law or regulation.
    ``(e) The designation of a qualified State or local development 
company as a premier lender may be suspended or revoked if the 
Administration determines that the company--
            ``(1) has not continued to meet the criteria for 
        eligibility under subsection (b);
            ``(2) has not established or maintained the loss reserve 
        required under subsection (c); or
            ``(3) is failing to adhere to the Administration's rules 
        and regulations or is violating any other applicable provision 
        of law.
    ``(f) Suspension or revocation shall not affect any outstanding 
debenture guarantee.''.
    (b) The Administration shall promulgate such regulations to carry 
out this section within 180 days of the date of the enactment of this 
Act.
    (c) The Administration shall report to the Small Business Committee 
of the United States Senate and to the Small Business Committee of the 
United States House of Representatives within one year, and annually 
thereafter, on the implementation of this section, specifically 
including data on the number of development companies designated as 
premier lenders, their debenture guarantee volume, and the loss rate 
for premier lenders as compared to accredited and other lenders, along 
with such other information as the Administration deems appropriate.
    (d) Section 508 of the Small Business Investment Act of 1958 is 
repealed on October 1, 1999.
    (e) The table of contents contained in section 101 of the Small 
Business Investment Act of 1958 is amended by adding at the end of the 
matter relating to title V the following:

``Sec. 507. Accredited lenders program.
``Sec. 508. Premier lenders program.''.

SEC. 211. SSBIC ADVISORY COUNCIL.

    (a) Council Established.--Not later than 90 days after the date of 
the enactment of this Act, the Administrator of the Small Business 
Administration shall appoint an Investment Advisory Council for the 
Specialized Small Business Investment Company Program. The Council 
shall consist of not less than 12 individuals from the private sector, 
including individuals--
            (1) who have experience in providing venture capital to 
        small business, particularly minority small business;
            (2) who are current participants in the Specialized Small 
        Business Investment Company Program;
            (3) who are former participants in the Specialized Small 
        Business Investment Company Program; or
            (4) who are or who represent small business concerns.
    (b) Chairman and Staff.--The Administrator shall designate one of 
the members of the Council as chairperson. The Investment Division of 
the Small Business Administration shall provide such staff, technical 
support, and information as shall be deemed appropriate. Council 
members shall be deemed to be an advisory board pursuant to section 
8(b)(13) of the Small Business Act for purposes of reimbursement of 
expenses.
    (C) Report.--Within six months of the date of appointment, the 
Council shall make a written report with findings and recommendations 
on the venture capital needs, including debt and equity, of socially or 
economically disadvantaged small business concerns and any needed 
Federal incentives to assist the private sector to meet such needs. The 
report shall specifically address--
            (1) the history of the Specialized Small Business 
        Investment Company program in providing assistance to such 
        concerns and the impact of such assistance on the economy;
            (2) the appropriateness and ability of the Specialized 
        Small Business Investment Company Program to meet these needs;
            (3) the problems affecting the Specialized Small Business 
        Investment Company Program; and
            (4) the effectiveness of the Specialized Small Business 
        Investment Company Program and its administration by the Small 
        Business Administration.

SEC. 212. PARTICIPATING SECURITIES FOR SMALLER SBICS.

    Section 303(g) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(g)) is amended by adding the following new paragraph at the 
end:
            ``(13) Of the amount of the annual program level of 
        participating securities approved in Appropriations Acts, 50 
        percent shall be reserved for funding Small Business Investment 
        Companies with private capital of less than $20,000,000; except 
        that during the last quarter of each fiscal year, the 
        Administrator may, if he determines that there is a lack of 
        qualified applicants with private capital under such amount, 
        utilize all or any part of the securities so reserved.''.

SEC. 213. REPORT ON SBIC PROGRAM.

    The Small Business Administration shall provide the Committee on 
Small Business of the House of Representatives and Senate with a 
comprehensive report on the status and disposition of all Small 
Business Investment Companies, active or in liquidation, and a complete 
accounting of the assets in and the basis of their portfolios, the 
projected and actual loss rates for all portfolios in liquidation or 
active, and a detailed accounting of valuation of the SBIC program's 
investments. This report shall be delivered to the respective 
Committees on Small Business no later than April 15, 1995.

             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

SEC. 301. COMPETITIVE DEMONSTRATION PROJECT SIZE STANDARDS.

    Section 732 of the Business Opportunity Development Reform Act of 
1988 (Public Law 100-656) is amended by repealing the second sentence 
of such section.

SEC. 302. SIZE STANDARD CRITERIA.

    Section 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)) is 
amended to read as follows:
    ``(2) In addition to the criteria specified in paragraph (1), the 
Administrator may specify detailed definitions or standards by which a 
business concern may be determined to be a small business concern for 
the purposes of this Act or any other Act. Such standards may utilize 
number of employees, dollar volume of business, net worth, net income, 
or a combination thereof. Unless specifically authorized by statute, no 
Federal department or agency may prescribe a size standard for 
categorizing a business concern as a small business concern, unless 
such proposed size standard--
            ``(A) is being proposed after an opportunity for public 
        notice and comment;
            ``(B) provides for determining--
                    ``(i) the size of a manufacturing concern as 
                measured by its average employment based upon 
                employment during each of the concern's pay periods for 
                the preceding twelve calendar months;
                    ``(ii) the size of a concern providing services on 
                the basis of the annual average gross receipts of the 
                concern over a period of not less than 3 years; and
                    ``(iii) the size of other concerns on the basis of 
                data over a period of not less than 3 years; and
            ``(C) is approved by the Administrator if it is not being 
        proposed by the Small Business Administration.''.

SEC. 303. SUNSET ON PREFERRED SURETY BOND GUARANTEE PROGRAM.

    Section 207 of the Small Business Administration Reauthorization 
and Amendment Act of 1988 (Public Law 100-590) is amended by striking 
``September 30, 1994'' and by inserting in lieu thereof ``September 30, 
1997''.

SEC. 304. VERY SMALL BUSINESS CONCERNS.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended by 
redesignating section 30 as section 41 and by inserting after section 
29, as redesignated by section 606 of this Act, the following:

``SEC. 30. PILOT PROGRAM FOR VERY SMALL BUSINESS CONCERNS.

    ``(a) Establishment.--The Administration shall establish and carry 
out a pilot program in accordance with the requirements of this section 
to provide procurement opportunities to very small business concerns.
    ``(b) Subcontracting of Procurement Contracts.--
            ``(1) In general.--In carrying out the program, the 
        Administration is authorized to enter into procurement 
        contracts with the United States Government and to arrange for 
        the performance of such contracts through the award of 
        subcontracts to very small business concerns.
            ``(2) Terms and conditions.--The authority of the 
        Administration under paragraph (1) shall be subject to the same 
        terms and conditions as apply to the authority of the 
        Administration under section 8(a), except that--
                    ``(A) the Administration may make such 
                modifications to such terms and conditions as the 
                Administration determines necessary; and
                    ``(B) all contract opportunities offered for award 
                under the program shall be awarded on the basis of 
                competition restricted to eligible program 
                participants.
    ``(c) Program Participation.--Very small business concerns 
participating in the program shall be subject to the same terms and 
conditions for program participation as apply to program participants 
under sections 7(j) and 8(a); except that--
            ``(1) the Administration may make such modifications to 
        such terms and conditions as the Administration determines 
        necessary; and
            ``(2) eligibility shall be determined on the basis of 
        qualifying as a very small business concern as defined in 
        subsection (g), in lieu of the requirements contained in 
        paragraphs (4), (5), and (6) of section 8(a).
    ``(d) Technical and Financial Assistance.--In order to assist very 
small business concerns participating in the program, the 
Administration is authorized--
            ``(1) to provide technical assistance to such concerns in 
        the same manner and to the same extent as technical assistance 
        is provided to small business concerns pursuant to section 
        7(j); and
            ``(2) to provide pre-authorization to such concerns for the 
        purpose of receiving financial assistance under section 7(a).
    ``(e) Program Term.--The Administration shall carry out the program 
in each of fiscal years 1995, 1996, and 1997.
    ``(f) Report to Congress.--On or before December 31, 1996, the 
Administration shall transmit to Congress a report containing an 
analysis of the results of the program, together with recommendations 
for appropriate legislative and administrative actions.
    ``(g) Definitions.--For the purposes of this section, the following 
definitions apply:
            ``(1) Program.--The term `program' means the program 
        established pursuant to subsection (a).
            ``(2) Very small business concern.--The term `very small 
        business concern' means a small business concern that--
                    ``(A) has 10 employees or less; or
                    ``(B) has average annual receipts that total 
                $1,000,000 or less.''.

                    TITLE IV--MANAGEMENT ASSISTANCE

SEC. 401. SUNSET ON COSPONSORED TRAINING.

    (a) The authority of the Small Business Administration to cosponsor 
training as authorized by section 5(a) of the Small Business Computer 
Security and Education Act of 1984 (15 U.S.C. 633 note) is hereby 
repealed September 30, 1997.
    (b) Section 7(b) of the Small Business Computer Security and 
Education Act of 1984 (15 U.S.C. 633 note) is amended by striking from 
the second sentence ``and the amendments made to section 8(b)(1)(A) of 
the Small Business Act by section 5(a)(2) of this Act are'' and by 
inserting in lieu thereof ``is''.

SEC. 402. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.

    Section 21(a)(4) of the Small Business Act (15 U.S.C. 648(a)(4)) is 
amended to read as follows:
    ``(4) The Administration shall require as a condition of any grant 
(or amendment or modification thereof) made to an applicant under this 
section, that a matching amount (excluding any fees collected from 
recipients of such assistance) equal to the amount of such grant be 
provided from sources other than the Federal Government, to be 
comprised of not less than 50 per centum cash and not more than 50 per 
centum of indirect costs and in-kind contributions: Provided, That this 
matching amount shall not include any indirect costs or in-kind 
contributions derived from any Federal program: Provided further, That 
no recipient of funds under this section shall receive a grant which 
would exceed its pro rata share of a national program based upon the 
population to be served by the Small Business Development Center as 
compared to the total population in the United States, plus $125,000, 
or $200,000, whichever is greater, per year. The amount of the national 
program shall be--
            ``(A) $70,000,000 through September 30, 1995;
            ``(B) $77,500,000 from October 1, 1995 through September 
        30, 1996; and
            ``(C) $85,000,000 beginning October 1, 1996.
The amount of eligibility of each Small Business Development Center 
shall be based upon the amount of the national program in effect as of 
the date for commencement of performance of the Center's grant.''.

SEC. 403. FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CENTERS.

    (a) Section 21(a)(5) of the Small Business Act (15 U.S.C. 
648(a)(5)) is amended to read as follows:
    ``(5) A Small Business Development Center may enter a contract with 
a Federal department or agency to provide specific assistance to small 
business concerns if the contract is approved in advance by the Deputy 
Associate Administrator of the Small Business Development Center 
program. Approval shall be based upon a determination that the contract 
will provide assistance to small business concerns and that its 
performance will not hinder the Center in carrying out the terms of its 
grant from the Administration. The amount of any such contract shall 
not be subject to the matching funds requirements of paragraph (4) nor 
shall the amount of eligibility under such paragraph: Provided, That 
notwithstanding any other provision of law, such contracts for 
assistance to small business concerns shall not be counted toward any 
Federal department or agency's small business, women-owned business, or 
socially and economically disadvantaged business contracting goal as 
established by section 15(g) of the Small Business Act (15 U.S.C. 
644(g)).''.
    (b) Section 21(a)(6) of the Small Business Act (15 U.S.C. 
648(a)(6)) is amended by striking ``paragraphs (4) and (5)'' and by 
inserting in lieu thereof ``paragraph (4)''.

SEC. 404. CENTRAL EUROPEAN SMALL BUSINESS DEVELOPMENT.

    Section 25(i) of the Small Business Act (15 U.S.C. 652(i)) is 
amended by striking ``and $2,000,000 for each of fiscal years 1993 and 
1994'' and by inserting in lieu thereof ``, $2,000,000 for each of 
fiscal years 1993 and 1994, and $1,000,000 for fiscal year 1995''.

SEC. 405. MOBILE RESOURCE CENTER PILOT PROGRAM.

    (a) Establishment.--The Administrator of the Small Business 
Administration may establish and carry out in each of fiscal years 
1995, 1996, and 1997 a mobile resource pilot program (in this section 
referred to as the ``program'' in accordance with the requirements of 
this section.
    (b) Mobile Resource Center Vehicles.--Under the program, the 
Administration may use mobile resource center vehicles to provide 
technical assistance, information, and other services available from 
the Small Business Administration to traditionally underserved 
populations. Two of such vehicles should be utilized in rural areas and 
2 of such vehicles should be utilized in urban areas.
    (c) Report to Congress.--If the Administrator conducts the program 
authorized in this section, not later than December 31, 1996, he shall 
transmit to Congress a report containing the results of such program, 
together with recommendations for appropriate legislative and 
administrative actions.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated for fiscal year 1995 $900,000 to carry out this section. 
Of such sums--
            (1) $800,000 may be made available for the purchase or 
        lease of mobile resource center vehicles; and
            (2) $100,000 may be made available for studies, startup 
        expenses, and other administrative expenses.
Such sums shall remain available until expended.

        TITLE V--RELIEF FROM FFB DEBENTURE PREPAYMENT PENALTIES

SEC. 501. CITATION.

    This title may be cited as the ``Small Business Prepayment Penalty 
Relief Act of 1994.''.

SEC. 502. MODIFICATION OF DEVELOPMENT COMPANY DEBENTURE INTEREST RATES.

    (a) In General.--Upon the request of the issuer and the concurrence 
of the borrower, the Small Business Administration is authorized to 
transfer to the Federal Financing Bank such sums as may be necessary to 
carry out the provisions of this section in order to reduce the 
interest rate on a debenture issued by a certified development company. 
The reduction shall be effective January 2, 1995 and shall apply for 
the remainder of the term of the debenture.
    (b) Interest Rate Modification.--Upon receipt of such payment, the 
Federal Financing Bank shall modify the interest rate of each debenture 
for which the payment is made. No other change shall be made in the 
terms and conditions of the debenture, and the modification in the 
interest rate shall not be construed as new budget authority nor 
require any additional appropriation for credit subsidy on account of 
the modification.
    (c) Definitions.--For the purposes of this section--
            (1) the term ``issuer'' means the issuer of a debenture 
        pursuant to section 503 of the Small Business Investment Act of 
        1958 which has been purchased by the Federal Financing Bank if 
        the debenture is outstanding on the date of enactment of this 
        Act, and neither the loan that secures the debenture nor the 
        debenture is in default on such date; and
            (2) the term ``borrower'' means the small business concern 
        whose loan secures a debenture issued pursuant to such section.
    (d) Other Rights.--A modification of the interest rate on a 
debenture as authorized in this section shall not affect any rights or 
options of the issuer or borrower which are otherwise authorized by 
contract or by law.
    (e) Refinancing.--Debentures authorized by sections 504 and 505 of 
the Small Business Investment Act of 1958 may be used to refinance 
debentures issued under section 503 of such Act if the amount of the 
new financing is limited to such amounts as are needed to repay the 
existing debenture, including any prepayment penalty imposed by the 
Federal Financing Bank. Any such refinancing shall be subject to all of 
the other provisions of sections 504 and 505 of such Act and the rules 
and regulations of the Administration promulgated thereunder, 
including, but not limited to, rules and regulations governing payment 
of authorized expenses and commissions, fees and discounts to brokers 
and dealers in trust certificates issued pursuant to section 505: 
Provided, however, That no applicant for refinancing under section 504 
of this Act need demonstrate that the requisite number of jobs will be 
created or preserved with the proceeds of such refinancing: Provided 
further, That a development company which provides refinancing under 
this subsection shall be limited to a loan processing fee not to exceed 
one-half of one percent to cover the cost of packaging, processing and 
other nonlegal staff functions.

SEC. 503. MODIFICATION OF SMALL BUSINESS INVESTMENT COMPANY DEBENTURE 
              INTEREST RATES.

    (a) In General.--Upon the request of the issuer, the Small Business 
Administration is authorized to transfer to the Federal Financing Bank 
such sums as may be necessary to carry out the provisions of this 
section in order to reduce the interest rate on a debenture issued by a 
Small Business Investment Company under the provisions of title III of 
the Small Business Investment Act of 1958. The reduction shall be 
effective January 2, 1995 and shall apply for the remainder of the term 
of the debenture.
    (b) Interest Rate Modification.--Upon receipt of such payment, the 
Federal Financing Bank shall modify the interest rate of each debenture 
for which the payment is made. No other change shall be made in the 
terms and conditions of the debenture, and the modification in the 
interest rate shall not be construed as new budget authority nor 
require any additional appropriation for credit subsidy on account of 
the modification.
    (c) Definitions.--For the purposes of this section, the term 
``issuer'' means the issuer of a debenture pursuant to section 303 of 
the Small Business Investment Act of 1958 which has been purchased by 
the Federal Financing Bank if the debenture is outstanding on the date 
of enactment of this Act, and is not in default on such date.
    (d) Other Rights.--A modification of the interest rate on a 
debenture as authorized in this section shall not affect any rights or 
options of the issuer which are otherwise authorized by contract or by 
law.

SEC. 504. MODIFICATION OF SPECIALIZED SMALL BUSINESS INVESTMENT COMPANY 
              DEBENTURE INTEREST RATES.

    (a) Interest Rate Modification.--Upon the request of the issuer, 
the Small Business Administration is authorized to modify the interest 
rate on a debenture issued by a Small Business Investment Company 
licensed under the provisions of section 301(d) of the Small Business 
Investment Act of 1958 and which is held by the Administration. No 
debenture which has been sold to a third party shall be eligible for 
modification under this section. The reduction shall be effective 
January 2, 1995 and shall apply for the remainder of the term of the 
debenture. No other change shall be made in the terms and conditions of 
the debenture, and the modification in the interest rate shall not be 
construed as new budget authority nor require any additional 
appropriation for credit subsidy on account of the modification.
    (b) Definitions.--For the purposes of this section, the term 
``issuer'' means a Specialized Small Business Investment Company 
licensed under the provisions of section 301(d) of the Small Business 
Investment Act of 1958 which has issued a debenture which has been 
funded by the Small Business Administration, providing the debenture is 
outstanding on the date of enactment of this Act and is not in default 
on such date.
    (c) Other Rights.--A modification of the interest rate on a 
debenture as authorized in this section shall not affect any rights or 
options of the issuer which are otherwise authorized by contract or by 
law.

SEC. 505. INTEREST RATE REDUCTIONS.

    (a) In General.--Upon enactment of an Appropriations Act providing 
funds to carry out the provisions of this Act and limited to amounts 
specifically provided in advance in Appropriations Acts, the Small 
Business Administration shall evaluate the outstanding portfolio of 
debentures which are eligible for interest rate relief under this Act. 
The Administration shall apply the funds appropriated to carry out this 
Act in order to reduce the highest interest rate on all eligible 
debentures to a uniform rate.
    (b) Authorization.--There are authorized to be appropriated $30 
million to carry out the provisions of this Act in fiscal year 1995.

            TITLE VI--DEVELOPMENT OF WOMEN-OWNED BUSINESSES

SEC. 601. STATUS OF COUNCIL.

    Section 401 of the Women's Business Ownership Act of 1988 (15 
U.S.C. 631 note) is redesignated as section 405 of such Act and, as 
redesignated, is amended--
            (1) in the heading by inserting ``of the council'' after 
        ``establishment''; and
            (2) by striking the period at the end and inserting the 
        following: ``which shall serve as an independent advisory 
        council to the Interagency Committee on Women's Business 
        Enterprise, to the Administrator of the Small Business 
        Administration, and to the Congress of the United States. The 
        Council, in order to carry out its function as an independent 
        advisory council to the Congress, is authorized and directed to 
        report independently of the Interagency Committee directly to 
        the Congress at such times and on such matters as it, in its 
        discretion, deems appropriate.''.

SEC. 602. DUTIES OF NATIONAL WOMEN'S BUSINESS COUNCIL.

    Section 402 of the Women's Business Ownership Act of 1988 (15 
U.S.C. 631 note) is redesignated as section 406 of such Act and, as 
redesignated, is amended to read as follows:

``SEC. 406. DUTIES OF THE COUNCIL.

    ``The Council shall meet at such times as it determines necessary 
in order to advise and consult with the Interagency Committee on 
Women's Business Enterprise on matters relating to the activities, 
functions, and policies of such Committee as provided in this title. 
The Council shall make annual recommendations for consideration by the 
Committee. The Council also shall provide reports and make such other 
recommendations as it deems appropriate to the Committee, to the 
Administrator of the Small Business Administration, and to the Small 
Business Committee of the United States Senate and to the Small 
Business Committee of the United States House of Representatives.''.

SEC. 603. MEMBERSHIP OF THE COUNCIL.

    Section 403 of the Women's Business Ownership Act of 1988 (15 
U.S.C. 631 note) is redesignated as section 407 of such Act, and, as 
redesignated, is amended to read as follows:

``SEC. 407. MEMBERSHIP OF THE COUNCIL.

    ``(a) The Council shall be composed of 15 members who shall be 
appointed by the Administrator of the Small Business Administration and 
who shall serve at the Administrator's discretion. In making the 
appointments, the Administrator shall include racial, geographic and 
economic diversity, and representation from diverse sectors of the 
economy, including manufacturing, high technology, services and credit 
institutions, and shall give priority to include representation of 
major women's business organizations.
    ``(b) Only the owner, operator or employee of a woman-owned 
business shall be eligible for appointment, and not more than eight 
appointees shall be members of the same political party. If any member 
of the Council subsequently becomes an officer or employee of the 
Federal Government or of the Congress, such individual may continue as 
a member of the Council for not longer than the thirty-day period 
beginning on the date such individual becomes such an officer or 
employee.
    ``(c) The Council annually shall select one member to serve as its 
Chairperson. The Chairperson of the Council, or her designee, shall be 
the representative of the Council to all meetings of the Interagency 
Committee on Women's Business Enterprise.
    ``(d) The Council shall meet not less than four times per year. 
Meetings shall be at the call of the Chairperson at such times as she 
deems appropriate.
    ``(e) Members of the Council shall serve without pay for such 
membership, except they shall be entitled to reimbursement for travel, 
subsistence, and other necessary expenses incurred by them in carrying 
out the functions of the Council, in the same manner as persons serving 
on advisory boards pursuant to section 8(b) of the Small Business 
Act.''.

SEC. 604. INTERAGENCY COMMITTEE.

    Title IV of the Women's Business Ownership Act of 1988 (15 U.S.C. 
631 note) is amended by striking section 404 and by inserting the 
following new sections prior to section 405 as redesignated by section 
601 of this Act:

``SEC. 401. ESTABLISHMENT OF THE COMMITTEE.

    ``There is established an Interagency Committee to be known as the 
`Interagency Committee on Women's Business Enterprise' (hereinafter in 
this title referred to as the Committee).

``SEC. 402. DUTIES OF THE COMMITTEE.

    ``The Committee shall--
            ``(1) promote, coordinate and monitor the plans, programs 
        and operations of the departments and agencies of the Federal 
        Government which may contribute to the establishment, 
        preservation and strengthening of women's business enterprise. 
        It may, as appropriate, develop comprehensive interagency plans 
        and specific program goals for women's business enterprise with 
        the cooperation of Federal departments and agencies;
            ``(2) promote the better utilization of the activities and 
        resources of State and local governments, business and trade 
        associations, private industry, colleges and universities, 
        foundations, professional organizations, and volunteer and 
        women's business enterprise, and facilitate the coordination of 
        the efforts of these groups with those of Federal departments 
        and agencies;
            ``(3) consult with the Council to develop and promote new 
        initiatives designed to foster women's business enterprise, and 
        to develop policies, programs, and plans intended to promote 
        such development;
            ``(4) consider the Council's recommendations and public and 
        private sector studies of the problems of women entrepreneurs, 
        and promote further research into such problems; and
            ``(5) design a comprehensive plan for a joint public-
        private sector effort to facilitate the development and growth 
        of women-owned businesses. The Committee should submit the plan 
        to the President for review within six months of the effective 
        date of this Act.

``SEC. 403. MEMBERSHIP OF THE COMMITTEE.

    ``(a) The Committee shall be composed of representatives of the 
following departments and agencies: The Departments of Agriculture, 
Commerce, Defense, Energy, Health and Human Services, Education, 
Housing and Urban Development, Interior, Justice, Labor, 
Transportation, Treasury, the Federal Trade Commission, General 
Services Administration, National Science Foundation, Office of Federal 
Procurement Policy, and the Director of the Office of Women's Business 
Ownership of the Small Business Administration, who shall serve as Vice 
Chairperson of the Committee. The head of each such department and 
agency shall designate a representative who shall be a policy making 
official within the department or agency.
    ``(b) The Committee shall have a Chairperson appointed by the 
President, after consultation with the Administrator of the Small 
Business Administration and the Chief Counsel for Advocacy of the Small 
Business Administration. The Chairperson shall be the head of a Federal 
department or agency. If the Chairperson is the head of one of the 
departments or agencies enumerated in subsection (a), he or she shall 
also serve as the representative of such department or agency.
    ``(c) The Committee shall meet not less than four times per year. 
Meetings shall be at the call of the Chairperson at such times as he or 
she deems appropriate.
    ``(d) The members of the Committee shall serve without additional 
pay for such membership.
    ``(e) The Chairperson of the Committee may designate a Director of 
the Committee, after consultation with the Administrator of the Small 
Business Administration and the Chief Counsel for Advocacy of the Small 
Business Administration.
    ``(f) The Chief Counsel for Advocacy is authorized to appoint to 
his staff under the provisions of section 204 of Public Law 94-305 (15 
U.S.C. 634(d)) the person so designated under subsection (e). He or she 
is also authorized to provide additional staff and administrative 
support for the Committee.
    ``(g) The Director of the Office of Women's Business Ownership of 
the Small Business Administration is authorized to provide additional 
staff and administrative support for the Committee.

``SEC. 404. REPORTS FROM THE COMMITTEE.

    ``The Committee shall transmit to the President and to the Small 
Business Committee of the United States Senate and to the Small 
Business Committee of the United States House of Representatives a 
report no less than once in every twelve-month period. The first such 
report shall be submitted no later than March 31, 1995. Such reports 
shall contain any recommendations from the Council and any comments of 
the Committee thereon, a detailed statement on the activities of the 
Committee, the findings and conclusions of the Committee, together with 
its recommendations for such legislation and administrative actions as 
it considers appropriate to promote the development of small business 
concerns owned and controlled by women.''.

SEC. 605. REPEALER.

    Sections 404 through 407 of the Women's Business Ownership Act of 
1988, as in effect on the day before the date of the enactment of this 
Act, are repealed and the following new section is added at the end of 
title IV of such Act:

``SEC. 408. DEFINITIONS.

    ``For the purposes of this Act, the term--
            ``(1) `woman-owned business' shall mean a small business 
        which is at least 51 percent owned by a woman or women who also 
        control and operate it;
            ``(2) `control' shall mean exercising the power to make 
        policy decisions;
            ``(3) `operate' shall mean being actively involved in the 
        day-to-day management; and
            ``(4) `women's business enterprise' shall mean a woman-
        owned business or businesses or the efforts of a woman or women 
        to establish, maintain, or develop such a business or 
        businesses.''.

SEC. 606. EXTENSION OF AUTHORITY FOR DEMONSTRATION PROJECTS.

    Section 28 of the Small Business Act, as added by section 2 of 
Public Law 102-191, is redesignated as section 29 and, as so 
redesignated, is amended by striking from subsection (g) ``1995'' and 
by inserting ``1997''.

SEC. 607. ESTABLISHMENT OF OFFICE OF WOMEN'S BUSINESS OWNERSHIP.

    Section 29 of the Small Business Act, as redesignated by section 
606 of this Act, is amended by adding the following new subsection at 
the end:
    ``(h) 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. The Office shall be headed by a 
director who shall be appointed by the Administrator.''.

SEC. 608. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Title IV of the table of contents of the Women's Business 
Ownership Act of 1988 (15 U.S.C. 631 note) is amended to read as 
follows:

         ``TITLE IV--DEVELOPMENT OF WOMEN'S BUSINESS ENTERPRISE

``Sec. 401. Establishment of the Committee.
``Sec. 402. Duties of the Committee.
``Sec. 403. Membership of the Committee.
``Sec. 404. Reports from the Committee.
``Sec. 405. Establishment of the Council.
``Sec. 406. Duties of the Council.
``Sec. 407. Membership of the Council.
``Sec. 408. Definitions.''.
    (b) The heading to title IV of the Women's Business Ownership Act 
of 1988 (15 U.S.C. 631 note) is amended to read as follows:

       ``TITLE IV--DEVELOPMENT OF WOMEN'S BUSINESS ENTERPRISES''.

SEC. 609. AUTHORIZATION.

    There is authorized to be appropriated $200,000 in each of fiscal 
years 1995 through 1997 to carry out the provisions of title IV of the 
Women's Business Ownership Act of 1988 (15 U.S.C. 631 note).

                  TITLE VII--MISCELLANEOUS AMENDMENTS

SEC. 701. HANDICAPPED PARTICIPATION IN SMALL BUSINESS SET ASIDE 
              CONTRACTS.

    Section 15(c) of the Small Business Act (15 U.S.C. 644(c)) is 
amended--
            (1) by amending paragraph (2)(A) to read as follows:
    ``(2)(A) During each fiscal year, public or private organizations 
for the handicapped shall be eligible to participate in programs 
authorized under this section in an aggregate amount not to exceed 
$50,000,000.''; and
            (2) by adding the following new paragraph at the end 
        thereof:
    ``(7) Any contract awarded to such an organization pursuant to the 
provisions of this subsection may be extended for up to two additional 
years.''.

SEC. 702. SBA INTEREST PAYMENTS TO TREASURY.

    Section 4(c)(5)(B)(ii) of the Small Business Act (15 U.S.C. 
633(c)(5)(B)(ii)) is amended to read as follows:
    ``(ii) The Administration shall pay into the miscellaneous receipts 
of the Treasury following the close of each fiscal year the actual 
interest it collects during that fiscal year on all financings made 
under the authority of this Act.''.

SEC. 703. IMPOSITION OF FEES.

    Section 5(b) of the Small Business Act (15 U.S.C. 634(b)) is 
amended--
            (1) in paragraph (10) by striking ``and'' at the end;
            (2) in paragraph (11) by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding the following new paragraphs at the end:
            ``(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. The administrator is authorized to impose, 
        retain and utilize, subject to approval in appropriations Acts, 
        the following additional fees--
                    ``(A) not to exceed $100 for each loan servicing 
                action requested after disbursement of the loan, 
                including substitution of collateral, loan assumptions, 
                release or substitution of guarantors, reamortizations 
                or similar actions;
                    ``(B) to recover the direct, incremental cost 
                involved in the production and dissemination of 
                compilations of information produced by the 
                Administration under the authority of the Small 
                Business Act and the Small Business Investment Act of 
                1958; and
            ``(13) to 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: 
        Provided, That any monies so collected shall be utilized solely 
        to facilitate the administration of the program which generated 
        the excess monies.''.

SEC. 704. SBIR VENDORS.

    Section 9(q)(2) of the Small Business Act (15 U.S.C. 638(q)(2)) is 
amended to read as follows:
            ``(2) Vendor selection.--Each agency may select a vendor to 
        assist small business concerns to meet the goals listed in 
        paragraph (1). Such selection shall be competitive using merit-
        based criteria, for a term not to exceed 3 years.''.

SEC. 705. MANUFACTURING CONTRACTS.

    (a) Establishment of Pilot Program.--Section 15 of the Small 
Business Act (15 U.S.C. 644) is amended by adding at the end the 
following:
    ``(p) Manufacturing Modernization Pilot Program.--
            ``(1) Establishment.--The Administrator may establish and 
        carry out a manufacturing modernization pilot program 
        (hereinafter in this section referred to as the `program') for 
        the purpose of promoting the award of Federal procurement 
        contracts to small business concerns that participate in 
        manufacturing application and education centers that are 
        established or certified pursuant to paragraph (2).
            ``(2) Manufacturing application and education centers.--The 
        Administrator may establish manufacturing application and 
        education centers which will provide training to small business 
        concerns on new and innovative manufacturing practices in a 
        shared-use production environment and which will assist such 
        concerns in carrying out Federal procurement contracts for the 
        manufacture of components and subsystems. The Administrator may 
        also certify existing manufacturing application and education 
        centers for participation in the program.
            ``(3) Use of private centers as examples.--In establishing 
        any manufacturing application and education centers pursuant to 
        paragraph (2), the Administrator may use as examples 
        manufacturing application and education centers in the private 
        sector that provide the following services: technology 
        demonstration, technology education, technology application 
        support, technology advancement support, and technology 
        awareness.
            ``(4) Identification of contracts.--The Administrator and 
        the head of a contracting agency may identify for additional 
        small business set-asides pursuant to subsection (a) any 
        procurement, and in particular any procurement which is being 
        foreign-sourced or is considered critical, which is susceptible 
        to performance by a small business concern if the concern is 
        assisted by a manufacturing application and education center 
        under the program. Any such procurement shall be subject to the 
        requirements of subsection (a), including requirements relating 
        to any failure of the Administrator and the head of the 
        contracting agency to agree on procurement methods.
            ``(5) Nonapplicability of performance requirement.--The 
        requirement of subsection (o)(1)(B) shall not apply with 
        respect to any contract carried out by a small business concern 
        under the program with the assistance of a manufacturing 
        application and education center.
            ``(6) Regulations.--Not later than 6 months after the date 
        of the enactment of this subsection, the Administrator shall 
        issue regulations to carry out this subsection if he determines 
        it appropriate to carry out the program authorized by this 
        subsection.
            ``(7) Reports.--
                    ``(A) Progress report.--Not later than 3 months 
                after the last day of the fiscal year in which final 
                regulations are issued pursuant to paragraph (6), the 
                Administrator shall transmit to the Committees on Small 
                Business of the House of Representatives and the Senate 
                a report on the progress of the program.
                    ``(B) Final report.--If the Administrator 
                establishes the program authorized herein, not later 
                than March 31, 1999, he shall transmit to the 
                Committees on Small Business of the House of 
                Representatives and the Senate a report on the success 
                of the program in--
                            ``(i) enabling deployment of technology to 
                        small business concerns participating in the 
                        program, and
                            ``(ii) assisting manufacturing application 
                        and education centers in achieving self-
                        sufficiency,
                together with recommendations concerning continuation, 
                modification, or discontinuance of the program.
            ``(8) Program term.--The Administrator may carry out the 
        program during the period beginning on the date of issuance of 
        final regulations under paragraph (5) and ending on September 
        30, 1999.
            ``(9) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as may be necessary to 
        carry out this subsection.''.

SEC. 706. DENIAL OF USE OF FUNDS FOR INDIVIDUALS NOT LAWFULLY WITHIN 
              THE UNITED STATES.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended by 
inserting after section 30, as added by section 304 of this Act, the 
following:

``SEC. 31. DENIAL OF 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 when it is made known to the Administrator of the Small 
Business Administration or the official to which the funds are made 
available that the individual is not lawfully within the United 
States.''.

SEC. 707. OFFICE OF ADVOCACY EMPLOYEES.

    Section 204 of Public Law 94-305 (15 U.S.C. 634d) is amended as 
follows--
            (1) by striking ``after consultation with and subject to 
        the approval of the Administrator,''; and
            (2) by striking from paragraph (1) ``ten'' and by inserting 
        ``14''.

SEC. 708. ADVOCACY STUDY OF PAPERWORK AND TAX IMPACT.

    The Chief Counsel for Advocacy of the Small Business Administration 
shall conduct a study of the impact of all Federal regulatory paperwork 
and tax requirements upon small business and report its findings to the 
Congress within 1 year of the date of the enactment of this Act.
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