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

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

                      [Report No. 108-325, Part I]

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 21, 2003

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

                            October 21, 2003

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

                            October 31, 2003

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

                            November 7, 2003

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

                           November 21, 2003

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

                            January 31, 2004

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

                             March 2, 2004

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

                             March 8, 2004

                    Additional sponsor: Mr. Bereuter

                             March 8, 2004

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

_______________________________________________________________________

                                 A BILL


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

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

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

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

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

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

                      TITLE III--OTHER PROVISIONS

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

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

SEC. 101. STATE DEFINED.

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

SEC. 102. SMALL MANUFACTURER DEFINED.

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

SEC. 103. MAXIMUM PARTICIPATING SECURITIES RATE.

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

SEC. 104. MAXIMUM LEVERAGE FOR BUYING OPERATIONS.

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

SEC. 105. MAXIMUM AGGREGATE AMOUNT OF LEVERAGE.

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

SEC. 106. INVESTMENTS IN SMALLER ENTERPRISES.

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

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

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

SEC. 108. CONDITIONS FOR DISTRIBUTION.

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

SEC. 109. MODIFICATION OF AGGREGATE LIMITATION.

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

SEC. 110. NOTICE AND COMMENT RULEMAKING.

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

SEC. 111. LOW-INCOME GEOGRAPHIC AREA DEFINITION.

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

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

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

SEC. 113. PARTICIPATION AGREEMENT REQUIREMENT.

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

SEC. 114. FINAL APPROVAL REQUIREMENT.

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

SEC. 115. CONDITIONALLY APPROVED COMPANIES.

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

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

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

SEC. 117. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 118. REPEAL OF LEASE GUARANTEE AUTHORITY.

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

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

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

SEC. 120. QUALIFICATION OF STATE DEVELOPMENT COMPANIES.

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

SEC. 121. JOB REQUIREMENTS; DEFINITION.

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

SEC. 122. SMALL BUSINESS CONCERN LOAN LIMITATIONS.

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

SEC. 123. APPROVAL REQUIREMENT.

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

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

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

SEC. 125. ACCREDITED LENDERS PROGRAM.

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

SEC. 126. PREMIER CERTIFIED LENDERS PROGRAM.

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

``SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM.

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

SEC. 127. FORECLOSURE AND LIQUIDATION OF LOANS.

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

SEC. 128. ADDITIONS TO TITLE V.

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

``SEC. 511. SHORT FORM APPLICATION.

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

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

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

``SEC. 513. REPORTS.

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

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

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

SEC. 130. CONFORMING AMENDMENTS.

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

SEC. 131. DEVELOPMENT COMPANY AFFILIATES.

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

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

SEC. 201. SHORT TITLE.

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

SEC. 202. FINDINGS; STATEMENTS OF POLICY.

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

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

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

SEC. 203. DEFINITIONS.

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

``SEC. 3. DEFINITIONS.

    ``(a) Small Business Concerns.--
            ``(1) In general.--For the purposes of this Act, a small-
        business concern, including but not limited to enterprises that 
        are engaged in the business of production of food and fiber, 
        ranching and raising of livestock, aquaculture, and all other 
        farming and agricultural related industries, shall be deemed to 
        be one which is independently owned and operated and which is 
        not dominant in its field of operation.
            ``(2) Establishment of size standards.--
                    ``(A) In general.--In addition to the criteria 
                specified in paragraph (1), the Administrator may 
                specify detailed definitions or standards by which a 
                business concern may be determined to be a small 
                business concern for the purposes of this Act or any 
                other Act.
                    ``(B) Additional criteria.--The standards described 
                in paragraph (1) may utilize number of employees, 
                dollar volume of business, net worth, net income, a 
                combination thereof, or other appropriate factors.
                    ``(C) Requirements.--Unless specifically authorized 
                by statute, no Federal department or agency may 
                prescribe a size standard for categorizing a business 
                concern as a small business concern, unless such 
                proposed size standard--
                            ``(i) is proposed after an opportunity for 
                        public notice and comment;
                            ``(ii) provides for determining--
                                    ``(I) the size of a manufacturing 
                                concern as measured by the 
                                manufacturing concern's average 
                                employment based upon employment during 
                                each of the manufacturing concern's pay 
                                periods for the preceding 12 months;
                                    ``(II) the size of a business 
                                concern providing services on the basis 
                                of the annual average gross receipts of 
                                the business concern over a period of 
                                not less than 3 years;
                                    ``(III) the size of other business 
                                concerns on the basis of data over a 
                                period of not less than 3 years; or
                                    ``(IV) other appropriate factors; 
                                and
                            ``(iii) is approved by the Administrator.
                    ``(D) Industry variation.--When establishing or 
                approving any size standard pursuant to this paragraph, 
                the Administrator shall ensure that the size standard 
                varies from industry to industry to the extent 
                necessary to reflect the differing characteristics of 
                the various industries and consider other factors 
                deemed to be relevant by the Administrator.
            ``(3) Agricultural enterprises.--Notwithstanding paragraphs 
        (1) and (2), an agricultural enterprise shall be deemed to be a 
        small business concern if it (including its affiliates) has 
        annual receipts not in excess of $750,000.
            ``(4) Recertifications.--
                    ``(A) Timing restriction.--For purposes of 
                determining if a business concern that has been awarded 
                a contracting opportunity as a small business concern 
                is still a small business concern, the Administrator 
                shall not require such concern to be recertified as a 
                small business concern more frequently than each 5 
                years, unless there has been a change in ownership, 
                control, or affiliation, in which case the small 
                business concern shall recertify its status at that 
                time.
                    ``(B) Growth threshold.--In the case of any 
                recertification described in subparagraph (A) of a 
                business concern, such concern shall not fail to be 
                treated as a small business concern for purposes of 
                contracting opportunities awarded before the date of 
                such recertification solely because such concern 
                exceeds--
                            ``(i) the annual receipts standard 
                        applicable to such concern by 20 percent or 
                        less of such standard; or
                            ``(ii) the number of employees standard 
                        applicable to such concern by 5 percent or less 
                        of such standard.
    ``(b) Agency.--For purposes of this Act, any reference to an agency 
or department of the United States, and the term `Federal agency', 
shall have the meaning given the term `agency' by section 551(1) of 
title 5, United States Code, but does not include the United States 
Postal Service or the General Accounting Office.
    ``(c) Qualified Employee Trusts.--For purposes of this Act:
            ``(1) The term `qualified employee trust' means, with 
        respect to a small business concern, a trust--
                    ``(A) which forms part of an employee stock 
                ownership plan (as defined in section 4975(e)(7) of the 
                Internal Revenue Code of 1986)--
                            ``(i) which is maintained by such concern; 
                        and
                            ``(ii) which provides that each participant 
                        in the plan is entitled to direct the plan as 
                        to the manner in which voting rights under 
                        qualifying employer securities (as defined in 
                        section 4975(e)(8) of such Code) which are 
                        allocated to the account of such participant 
                        are to be exercised with respect to a corporate 
                        matter which (by law or charter) must be 
                        decided by a majority vote of outstanding 
                        common shares voted; and
                    ``(B) in the case of any loan guarantee under 
                section 7(a), the trustee of which enters into an 
                agreement with the Administrator which is binding on 
                the trust and on such small business concern and which 
                provides that--
                            ``(i) the loan guaranteed under section 
                        7(a) shall be used solely for the purchase of 
                        qualifying employer securities of such concern;
                            ``(ii) all funds acquired by the concern in 
                        such purchase shall be used by such concern 
                        solely for the purposes for which such loan was 
                        guaranteed;
                            ``(iii) such concern will provide such 
                        funds as may be necessary for the timely 
                        repayment of such loan, and the property of 
                        such concern shall be available as security for 
                        repayment of such loan; and
                            ``(iv) all qualifying employer securities 
                        acquired by such trust in such purchase shall 
                        be allocated to the accounts of participants in 
                        such plan who are entitled to share in such 
                        allocation, and each participant has a 
nonforfeitable right, not later than the date such loan is repaid, to 
all such qualifying employer securities which are so allocated to the 
participant's account.
            ``(2) Under regulations which may be prescribed by the 
        Administrator, a trust may be treated as a qualified employee 
        trust with respect to a small business concern if--
                    ``(A) the trust is maintained by an employee 
                organization which represents at least 51 percent of 
                the employees of such concern; and
                    ``(B) such concern maintains a plan--
                            ``(i) which is an employee benefit plan 
                        which is designed to invest primarily in 
                        qualifying employer securities (as defined in 
                        section 4975(e)(8) of the Internal Revenue Code 
                        of 1986);
                            ``(ii) which provides that each participant 
                        in the plan is entitled to direct the plan as 
                        to the manner in which voting rights under 
                        qualifying employer securities which are 
                        allocated to the account of such participant 
                        are to be exercised with respect to a corporate 
                        matter which (by law or charter) must be 
                        decided by a majority vote of the outstanding 
                        common shares voted;
                            ``(iii) which provides that each 
                        participant who is entitled to distribution 
                        from the plan has a right, in the case of 
                        qualifying employer securities which are not 
                        readily tradable on an established market, to 
                        require that the concern repurchase such 
                        securities under a fair valuation formula; and
                            ``(iv) which meets such other requirements 
                        (similar to requirements applicable to employee 
                        stock ownership plans as defined in section 
                        4975(e)(7) of such Code) as the Administrator 
                        may prescribe; and
                    ``(C) in the case of a loan guarantee under section 
                7(a), such organization enters into an agreement with 
                the Administration which is described in paragraph 
                (2)(B).
    ``(d) Definitions Relating to Indian Tribes.--For purposes of this 
Act:
            ``(1) Indian tribe.--The term `Indian tribe' has the 
        meaning given such term in section 4(e) of the Indian Self-
        Determination and Education Assistance Act.
            ``(2) Qualified indian tribe.--The term `qualified Indian 
        tribe' means any Indian tribe that owns and controls 100 
        percent of a small business concern, except as otherwise 
        provided in section 8.
    ``(e) State; United States.--For purposes of this Act, the terms 
`State' and `United States' include each of the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, the United 
States Virgin Islands, Guam, American Samoa, and the Commonwealth of 
the Northern Mariana Islands.
    ``(f) Contracting Officer.--For purposes of this Act, the term 
`contracting officer' has the meaning given such term in section 
27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 
423(f)(5)).
    ``(g) Small Business Development Center.--For purposes of this Act, 
the term `small business development center' means any office that 
provides any portion of the services described in section 21 under such 
section.
    ``(h) Credit Elsewhere.--For purposes of this Act, the term `credit 
elsewhere' means the availability of credit from non-Federal sources on 
reasonable terms and conditions taking into consideration the 
prevailing rates and terms in the community in or near where the 
concern transacts business, or the homeowner resides, for similar 
purposes and periods of time.
    ``(i) Homeowners.--For purposes of this Act, the term `homeowners' 
includes owners and lessees of residential property and also includes 
personal property.
    ``(j) Small Agricultural Cooperative.--For purposes of this Act, 
the term `small agricultural cooperative' means an association 
(corporate or otherwise) acting pursuant to the provisions of the 
Agricultural Marketing Act (12 U.S.C. 1141j), whose size does not 
exceed the size standard established by the Administrator for other 
similar agricultural small business concerns. In determining such size, 
the Administrator shall regard the association as a business concern 
and shall not include the income or employees of any member shareholder 
of such cooperative.
    ``(k) Disaster.--For purposes of this Act, the term `disaster' 
means a sudden event which causes severe damage including floods, 
hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes, 
windstorms, landslides or mudslides, tidal waves, riots, civil 
disorders, acts of terrorism, or other catastrophes.
    ``(l) Agricultural Enterprises.--For purposes of this Act, the term 
`agricultural enterprises' means those businesses engaged in the 
production of food and fiber, ranching, and raising of livestock, 
aquaculture, and all other farming and agricultural related industries.
    ``(m) Simplified Acquisition Threshold.--For purposes of this Act, 
the term `simplified acquisition threshold' has the meaning given such 
term in section 4(11) of the Office of Federal Procurement Policy Act 
(41 U.S.C. 403(11)).
    ``(n) Small Business Concern Owned and Controlled by Women.--For 
purposes of this Act, the term `small business concern owned and 
controlled by women' means any small business concern if--
            ``(1) at least 51 percent of the small business concern is 
        owned by one or more women or, in the case of any publicly 
        owned business, at least 51 percent of the stock of which is 
        owned by one or more women; and
            ``(2) the management and daily business operations of the 
        business are controlled by one or more women.
    ``(o) Definitions of Bundling of Contract Requirements and Related 
Terms.--For purposes of this Act:
            ``(1) Bundled contract.--The term `bundled contract' means 
        a contract that is entered into to meet requirements that are 
        consolidated in a bundling of contract requirements without 
        regard to its designation by the procuring agency or whether a 
        study of the effects of the solicitation on civilian or 
military personnel has been made.
            ``(2) Bundling of contract requirements.--The term 
        `bundling of contract requirements' means the use of any 
        bundling methodology to satisfy 2 or more requirements for 
        goods or services, including construction services, that have 
        previously been provided to, or performed for, the Federal 
        agency under 2 or more separate contracts lower in cost than 
        the total cost of the contract or order for which the offers 
        are solicited that is likely to be unsuitable for award to a 
        small business concern due to--
                    ``(A) the diversity, size, or specialized nature of 
                the elements of the performance specified;
                    ``(B) the aggregate dollar value of the anticipated 
                award;
                    ``(C) the geographical dispersion of the contract 
                performance sites; or
                    ``(D) any combination of the factors described in 
                subparagraphs (A), (B), and (C).
            ``(3) Bundling methodology.--The term `bundling 
        methodology' means--
                    ``(A) a solicitation to obtain offers for a single 
                contract or a multiple award contract;
                    ``(B) a solicitation of offers for the issuance of 
                a task or a delivery order under an existing single or 
                multiple award contract; or
                    ``(C) the creation of any new procurement 
                requirement that permits a consolidation of contract 
                requirements.
            ``(4) Separate smaller contract.--The term `separate 
        smaller contract', with respect to a bundling of contract 
        requirements, means a contract that has been performed by 1 or 
        more small business concerns or was suitable for award to 1 or 
        more small business concerns.
    ``(p) Definitions Relating to HUBZones.--For purposes of this Act:
            ``(1) Historically underutilized business zone.--The term 
        `historically underutilized business zone' means any area 
        located within 1 or more--
                    ``(A) qualified census tracts;
                    ``(B) qualified nonmetropolitan counties;
                    ``(C) lands within the external boundaries of an 
                Indian reservation; or
                    ``(D) redesignated areas.
            ``(2) HUBZone.--The term `HUBZone' means a historically 
        underutilized business zone.
            ``(3) HUBZone small business concern.--The term `HUBZone 
        small business concern' means--
                    ``(A) a small business concern that is owned and 
                controlled by one or more persons, each of whom is a 
                United States citizen;
                    ``(B) a small business concern that is--
                            ``(i) an Alaska Native Corporation owned 
                        and controlled by Natives (as determined 
                        pursuant to section 29(e)(1) of the Alaska 
                        Native Claims Settlement Act (43 U.S.C. 
                        1626(e)(1))); or
                            ``(ii) a direct or indirect subsidiary 
                        corporation, joint venture, or partnership of 
                        an Alaska Native Corporation qualifying 
                        pursuant to section 29(e)(1) of the Alaska 
                        Native Claims Settlement Act (43 U.S.C. 
                        1626(e)(1)), if that subsidiary, joint venture, 
                        or partnership is owned and controlled by 
                        Natives (as determined pursuant to section 
                        29(e)(2)) of the Alaska Native Claims 
                        Settlement Act (43 U.S.C. 1626(e)(2)));
                    ``(C) a small business concern--
                            ``(i) that is wholly owned by one or more 
                        Indian tribal organizations, or by a 
                        corporation that is wholly owned by one or more 
                        Indian tribal organizations; or
                            ``(ii) that is owned in part by one or more 
                        Indian tribal organizations, or by a 
                        corporation that is wholly owned by one or more 
                        Indian tribal organizations, if all other 
                        owners are either United States citizens or 
                        small business concerns; or
                    ``(D) a small business concern that is--
                            ``(i) wholly owned by a community 
                        development corporation that has received 
                        financial assistance under part 1 of subchapter 
                        A of the Community Economic Development Act of 
                        1981 (42 U.S.C. 9805 et seq.); or
                            ``(ii) owned in part by one or more 
                        community development corporations, if all 
                        other owners are either United States citizens 
                        or small business concerns.
            ``(4) Qualified areas.--
                    ``(A) Qualified census tract.--The term `qualified 
                census tract' has the meaning given that term in 
                section 42(d)(5)(C)(ii) of the Internal Revenue Code of 
                1986.
                    ``(B) Qualified nonmetropolitan county.--The term 
                `qualified nonmetropolitan county' means any county--
                            ``(i) that was not located in a 
                        metropolitan statistical area (as defined in 
                        section 143(k)(2)(B) of the Internal Revenue 
                        Code of 1986) at the time of the most recent 
                        census taken for purposes of selecting 
                        qualified census tracts under section 
                        42(d)(5)(C)(ii) of such Code; and
                            ``(ii) in which--
                                    ``(I) the median household income 
                                is less than 80 percent of the 
                                nonmetropolitan State median household 
                                income, based on the most recent data 
                                available from the Bureau of the Census 
                                of the Department of Commerce; or
                                    ``(II) the unemployment rate is not 
                                less than 140 percent of the Statewide 
                                average unemployment rate for the State 
                                in which the county is located, based 
                                on the most recent data available from 
                                the Secretary of Labor.
                    ``(C) Redesignated area.--The term `redesignated 
                area' means any census tract that ceases to be 
qualified under subparagraph (A) and any nonmetropolitan county that 
ceases to be qualified under subparagraph (B), except that a census 
tract or a nonmetropolitan county may be a `redesignated area' only for 
the 3-year period following the date on which the census tract or 
nonmetropolitan county ceased to be so qualified.
            ``(5) Qualified hubzone small business concern.--
                    ``(A) In general.--The term `qualified HUBZone 
                small business concern' means any small business 
                concern if the small business concern has certified in 
                writing to the Administrator (or the Administrator 
                otherwise determines, based on information submitted to 
                the Administrator by the small business concern, or 
                based on certification procedures, which shall be 
                established by regulation) that--
                            ``(i) it is a HUBZone small business 
                        concern--
                                    ``(I) pursuant to subparagraph (A), 
                                (B), or (D) of paragraph (3), and that 
                                its principal office is located in a 
                                HUBZone and not fewer than 35 percent 
                                of its employees reside in a HUBZone; 
                                or
                                    ``(II) pursuant to paragraph 
                                (3)(C), and not fewer than 35 percent 
                                of its employees engaged in performing 
                                a contract awarded to the small 
                                business concern on the basis of a 
                                preference provided under section 31(b) 
                                reside within any Indian reservation 
                                governed by one or more of the Indian 
                                tribal organization owners, or reside 
                                within any HUBZone adjoining any such 
                                Indian reservation;
                            ``(ii) the small business concern will 
                        attempt to maintain the applicable employment 
                        percentage under clause (i) during the 
                        performance of any contract awarded to the 
                        small business concern on the basis of a 
                        preference provided under section 31(b); and
                            ``(iii) with respect to any subcontract 
                        entered into by the small business concern 
                        pursuant to a contract awarded to the small 
                        business concern under section 31, the small 
                        business concern will ensure that--
                                    ``(I) in the case of a contract for 
                                services (except construction), not 
                                less than 50 percent of the cost of 
                                contract performance incurred for 
                                personnel will be expended for its 
                                employees or for employees of other 
                                HUBZone small business concerns;
                                    ``(II) in the case of a contract 
                                for procurement of supplies (other than 
                                procurement from a regular dealer in 
                                such supplies), not less than 50 
                                percent of the cost of manufacturing 
                                the supplies (not including the cost of 
                                materials) will be incurred in 
                                connection with the performance of the 
                                contract in a HUBZone by 1 or more 
                                HUBZone small business concerns;
                                    ``(III) it is a small business 
                                concern, the majority of which is owned 
                                and controlled by one or more 
                                individuals determined by the 
                                Administrator to be economically 
                                disadvantaged; and
                                    ``(IV) it has received a site visit 
                                from a district counsel to verify its 
                                eligibility before first responding to 
                                a solicitation from a Federal agency 
                                for goods or services under section 31 
                                and again before first responding to a 
                                solicitation from a Federal agency for 
                                goods or services under section 31 
                                after any change in the primary 
                                location of the concern.
                    ``(B) Site visits by district counsel.--A district 
                counsel, not later than 5 days after conducting any 
                site visit described in subparagraph (A)(iii)(IV), 
                shall make a written certification to the district 
                director and general counsel regarding the status of 
                the concern as a qualified HUBZone small business 
                concern.
                    ``(C) Provision of false information.--Such term 
                shall not include any small business concern if any 
                certification made or information provided by such 
                concern under subparagraph (A) has been, in accordance 
                with the procedures established under section 
                31(c)(1)--
                            ``(i) successfully challenged by an 
                        interested party; or
                            ``(ii) otherwise determined by the 
                        Administrator to be materially false.
                    ``(D) Percentage adjustments.--The Administrator 
                may utilize a percentage other than the percentage 
                specified in subclause (I) or (II) of subparagraph 
                (A)(iii), if the Administrator determines that such 
                action is necessary to reflect conventional industry 
                practices among small business concerns that are below 
                the numerical size standard for businesses in that 
                industry category, but under no circumstance shall such 
                adjustment reduce the percentage below 33 percent.
                    ``(E) Construction and other contracts.--The 
                Administrator shall promulgate final regulations 
                imposing requirements that are similar to those 
                specified in subclauses (I) and (II) of subparagraph 
                (A)(iii) on contracts for general and specialty 
                construction, and on contracts for any other industry 
                category that would not otherwise be subject to those 
                requirements. The percentage applicable to any such 
                requirement shall be determined in accordance with 
                subparagraph (D).
            ``(6) Native american small business concerns.--
                    ``(A) Alaska native corporation.--The term `Alaska 
                Native Corporation' has the same meaning as the term 
                `Native Corporation' in section 3 of the Alaska Native 
                Claims Settlement Act (43 U.S.C. 1602).
                    ``(B) Alaska native village.--The term `Alaska 
                Native Village' has the same meaning as the term 
                `Native village' in section 3 of the Alaska Native 
                Claims Settlement Act (43 U.S.C. 1602).
                    ``(C) Indian reservation.--The term `Indian 
                reservation'--
                            ``(i) has the same meaning as the term 
                        `Indian country' in section 1151 of title 18, 
                        United States Code, except that such term does 
                        not include--
                                    ``(I) any lands that are located 
                                within a State in which a tribe did not 
                                exercise governmental jurisdiction on 
                                December 21, 2000, unless that tribe is 
                                recognized after that date by either an 
                                Act of Congress or pursuant to 
                                regulations of the Secretary of the 
                                Interior; and
                                    ``(II) lands taken into trust or 
                                acquired by an Indian tribe after 
                                December 21, 2000, if such lands are 
                                not located within the external 
                                boundaries of an Indian reservation or 
                                former reservation or are not 
                                contiguous to the lands held in trust 
                                or restricted status on that date of 
                                the enactment; and
                            ``(ii) in the State of Oklahoma, means 
                        lands that--
                                    ``(I) are within the jurisdictional 
                                areas of an Oklahoma Indian tribe (as 
                                determined by the Secretary of the 
                                Interior); and
                                    ``(II) are recognized by the 
                                Secretary of the Interior as eligible 
                                for trust land status under part 151 of 
                                title 25, Code of Federal Regulations 
                                (as in effect on December 21, 2000).
                    ``(D) Indian tribal organization.--The term `Indian 
                tribal organization' has the meaning given that term in 
                section 4(l) of the Indian Self-Determination and 
                Education Assistance Act (25 U.S.C. 4506(l)).
    ``(q) Definitions Relating to Veterans.--For purposes of this Act:
            ``(1) Service-disabled veteran.--The term `service-disabled 
        veteran' means a veteran with a disability that is service-
        connected (as defined in section 101(16) of title 38, United 
        States Code).
            ``(2) Small business concern owned and controlled by 
        service-disabled veterans.--The term `small business concern 
        owned and controlled by service-disabled veterans' means a 
        small business concern--
                    ``(A) not less than 51 percent of which is owned by 
                one or more service-disabled veterans or, in the case 
                of any publicly owned business, not less than 51 
                percent of the stock of which is owned by one or more 
                service-disabled veterans; and
                    ``(B) the management and daily business operations 
                of which are controlled by one or more service-disabled 
                veterans or, in the case of a veteran with permanent 
                and severe disability, the spouse or permanent 
                caregiver of such veteran.
            ``(3) Small business concern owned and controlled by 
        veterans.--The term `small business concern owned and 
        controlled by veterans' means a small business concern--
                    ``(A) not less than 51 percent of which is owned by 
                one or more veterans or, in the case of any publicly 
                owned business, not less than 51 percent of the stock 
                of which is owned by one or more veterans; and
                    ``(B) the management and daily business operations 
                of which are controlled by one or more veterans.
            ``(4) Veteran.--The term `veteran' has the meaning given 
        the term in section 101(2) of title 38, United States Code.
    ``(r) Small Manufacturer.--For purposes of this Act, the term 
`small manufacturer' means any small business concern if--
            ``(1) the primary business of the concern is classified in 
        sector 31, 32, or 33 of the North American Industrial 
        Classification System; and
            ``(2) all of its facilities that are used for production 
        are located in the United States.
    ``(s) Small Business Lending Company.--For purposes of this Act, 
the term `small business lending company' means a business concern that 
is authorized by the Administrator to make loans pursuant to section 
7(a) and whose lending activities are not subject to regulation by any 
Federal or State regulatory agency.
    ``(t) Non-Federally Regulated SBA Lenders.--For purposes of this 
Act, the term `Non-federally regulated SBA lenders' means a business 
concern if--
            ``(1) such concern is authorized by the Administrator to 
        make loans under section 7;
            ``(2) such concern is subject to regulation by a State; and
            ``(3) the lending activities of such concern are not 
        regulated by any Federal banking authority.
    ``(u) Procurement Center Representative.--For purposes of this Act, 
the term `procurement center representative' means an employee of the 
Administration whose sole responsibility is to perform the functions 
referred to in section 15(l).
    ``(v) Commercial Marketing Representative.--For purposes of this 
Act, the term `commercial marketing representative' means an employee 
of the Administration whose sole responsibility is to perform the 
functions referred to in section 8(d).
    ``(w) Team.--For purposes of this Act, the term `team' means two or 
more small business concerns who respond together to a solicitation, as 
one entity, for the purposes of providing goods or services to a 
Federal agency. A team shall be considered a small business concern 
provided that each member of the team is a small business concern.''.

SEC. 204. SMALL BUSINESS ADMINISTRATION.

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

``SEC. 4. SMALL BUSINESS ADMINISTRATION.

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

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

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

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

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

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

SEC. 205. FINANCIAL MANAGEMENT.

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

``SEC. 5. FINANCIAL MANAGEMENT.

    ``(a) Accounts.--
            ``(1) In general.--All repayments of loans, debentures, 
        payments of interest and other receipts arising out of 
        transactions heretofore or hereafter entered into by the 
        Administrator shall be deposited into appropriate accounts and 
        funds as determined by the Administrator.
            ``(2) Report and budget.--The Administrator shall submit to 
        the Committees on Appropriations, the Committee on Small 
        Business and Entrepreneurship of the Senate, and the Committee 
        on Small Business of the House of Representatives, as soon as 
        possible after the beginning of each calendar quarter a full 
        and complete report on the status of each of the accounts and 
        funds referred to in paragraph (1). Business-type budgets for 
        each of the accounts and funds referred to in paragraph (1) 
        shall be prepared, transmitted to the Committees on 
        Appropriations, the Committee on Small Business and 
Entrepreneurship of the Senate, and the Committee on Small Business of 
the House of Representatives, and considered, and enacted in the manner 
prescribed for wholly owned Government corporations under sections 9103 
and 9104 of title 31, United States Code.
            ``(3) Issuance of notes.--
                    ``(A) Issuance.--The Administrator may issue notes 
                to the Secretary of the Treasury for the purpose of 
                obtaining funds necessary for discharging obligations 
                under the accounts and funds referred to in paragraph 
                (1) and for authorized expenditures out of the accounts 
                and funds.
                    ``(B) Form.--The notes authorized by this paragraph 
                shall be in such form and denominations and have such 
                maturities and be subject to such terms and conditions 
                as may be prescribed by the Administrator with the 
                approval of the Secretary of the Treasury.
                    ``(C) Interest rate.--Such notes shall bear 
                interest at a rate fixed by the Secretary of the 
                Treasury, taking into consideration the current average 
                market yield of outstanding marketable obligations of 
                the United States having maturities comparable to the 
                notes issued by the Administrator under this paragraph.
                    ``(D) Purchase by treasury.--The Secretary of the 
                Treasury shall purchase any notes of the Administration 
                issued under subparagraph (A). For purposes of 
                purchasing such notes, the Secretary of the Treasury 
                may use as a public debt transaction the proceeds from 
                the sale of any securities issued under chapter 31 of 
                title 31, United States Code. The purposes for which 
                such securities may be issued under such chapter are 
                extended to include the purchase of notes issued by the 
                Administrator under subparagraph (A). All redemptions, 
                purchases, and sales by the Secretary of the Treasury 
                of such notes shall be treated as public debt 
                transactions of the United States.
            ``(4) Payments to treasury.--
                    ``(A) Excess funds.--Moneys in any account or fund 
                referred to in paragraph (1) which are not needed for 
                current operations shall remain in such account or fund 
                and shall be available solely to carry out the 
                provisions and purposes of programs operated from such 
                account or fund pursuant to law as provided in 
                appropriations Acts.
                    ``(B) Actual interest.--Following the close of each 
                fiscal year, the Administrator shall pay into the 
                miscellaneous receipts of the United States Treasury 
                the actual interest that the Administrator collects 
                during that fiscal year on all financings made under 
                this Act.
                    ``(C) Other interest.--Except on those loan 
                disbursements on which interest is paid under 
                subparagraph (B), the Administrator shall pay into 
                miscellaneous receipts of the Treasury, following the 
                close of each fiscal year, interest received by the 
                Administration on financing functions performed under 
                this Act and titles III and V of the Small Business 
                Investment Act of 1958 if the capital used to perform 
                such functions originated from appropriated funds. Such 
                payments shall be treated by the Department of the 
                Treasury as interest income, not as retirement of 
                indebtedness.
            ``(5) Contributions to employees compensation fund.--The 
        Administrator shall contribute to the employee's compensation 
        fund, on the basis of annual billings as determined by the 
        Secretary of Labor, for the benefit payments made from such 
        fund on account of employees engaged in carrying out functions 
        financed by the accounts and funds referred to in paragraph 
        (1). The annual billings shall also include a statement of the 
        fair portion of the cost of the administration of such funds, 
        which shall be paid by the Administrator into the Treasury as 
        miscellaneous receipts.
            ``(6) Authorization of appropriations.--There are 
        authorized to be appropriated, in any fiscal year, such sums as 
        may be necessary for losses and interest subsidies incurred by 
        the accounts and funds referred to in paragraph (1) and not 
        previously reimbursed. All borrowing authority contained in 
        this subsection shall be effective only to such extent or in 
        such amounts as are provided in advance in appropriation Acts.
    ``(b) Financial Management Powers.--
            ``(1) Sale of financings, etc.--
                    ``(A) In general.--The Administrator, under 
                regulations prescribed by him and codified in the Code 
                of Federal Regulations, may assign or sell at public or 
                private sale, or otherwise dispose of for cash or 
                credit, in his discretion and upon such terms and 
                conditions and for such consideration as he shall 
                determine to be reasonable, any evidence of debt, 
                contract, claim, personal property, or security 
                assigned to or held by him in connection with the 
                payment of loans granted under this Act, and to collect 
                or compromise all obligations assigned to or held by 
                him and all legal or equitable rights accruing to him 
                in connection with the payment of such loans until such 
                time as such obligations may be referred to the 
                Attorney General for suit or collection.
                    ``(B) Limitation.--Notwithstanding subparagraph 
                (A), the Administrator shall not sell any portion of 
                the Administration's interest in, or the rights of the 
                Administration with respect to, any loan made directly 
                or through immediate participation under section 7(b), 
                including by direct sale, through the sale of loan 
                participations, or by including such loan in a pool of 
                assets for the purpose of selling asset-backed 
                securities during--
                            ``(i) the 3-year period beginning on the 
                        date that such loan was originated; and
                            ``(ii) the 3-month period beginning at the 
                        end of such 3-year period if, at any time 
during the 3-month period ending at the end of such 3-year period, the 
Administrator was engaged in negotiations with the borrower for the 
purpose of substantially altering the terms of such loan.
            ``(2) Use of federal reserve depositories.--All moneys of 
        the Administrator not otherwise employed may be deposited with 
        the Treasury of the United States subject to check by authority 
        of the Administrator. The Federal Reserve banks are authorized 
        and directed to act as depositaries, custodians, and fiscal 
        agents for the Administrator in the general performance of its 
        powers conferred by this Act. Any banks insured by the Federal 
        Deposit Insurance Corporation, when designated by the Secretary 
        of the Treasury, shall act as custodians and financial agents 
        for the Administrator. Each Federal Reserve bank, when 
        designated by the Administrator as fiscal agent for the 
        Administrator, shall be entitled to be reimbursed for all 
        expenses incurred as such fiscal agent.
            ``(3) Real property.--
                    ``(A) Conveyance.--The Administrator may convey and 
                execute in the name of the Administration deeds of 
                conveyance, deeds of release, assignments and 
                satisfactions of mortgages, and any other written 
                instrument relating to real property or any interest 
                therein acquired by the Administrator pursuant to the 
                provisions of this Act. Such authority may be exercised 
                by the Administrator or by any officer or agent 
                appointed by him without the execution of any express 
                delegation of power or power of attorney.
                    ``(B) Other authority.--The Administrator may deal 
                with, complete, renovate, improve, modernize, insure, 
                or rent, or sell for cash or credit upon such terms and 
                conditions and for such consideration as the 
                Administrator shall determine to be reasonable, any 
                real property conveyed to or otherwise acquired by him 
                in connection with the payment of loans granted under 
                this Act.
            ``(4) Collections.--The Administrator may pursue to final 
        collection, by way of compromise or otherwise, all claims 
        against third parties assigned to the Administrator in 
        connection with loans made by him, including by obtaining 
        deficiency judgments or otherwise in the case of mortgages 
        assigned to the Administrator.
            ``(5) Acquisition of property.--The Administrator may 
        acquire, in any lawful manner, any property (real, personal, or 
        mixed, tangible or intangible), whenever deemed necessary or 
        appropriate to the conduct of the activities authorized in 
        subsection (a) or (b) of section 7.
            ``(6) Power of attorney.--Nothing in this section shall 
        prevent the Administrator from delegating any authority 
        provided under this section by power of attorney to any officer 
        or agent he may appoint.
    ``(c) Sale of Guaranteed Loans by Lenders.--
            ``(1) In general.--The guaranteed portion of any loan made 
        pursuant to this Act may be sold by the lender, and by any 
        subsequent holder, consistent with regulations on such sales as 
        the Administrator shall establish, subject to the following 
        limitations:
                    ``(A) Prior to the approval of the sale, or upon 
                any subsequent sale, of any loan guaranteed by the 
                Administrator, if the lender certifies that such loan 
                has been properly closed and that the lender has 
                substantially complied with the provisions of the 
                guarantee agreement and the regulations of the 
                Administrator, the Administrator shall review and 
                approve only materials not previously approved.
                    ``(B) All fees due the Administrator on a 
                guaranteed loan shall have been paid in full prior to 
                any sale.
                    ``(C) Each loan, except each loan made under 
                section 7(a)(14), shall have been fully disbursed to 
                the borrower prior to any sale.
            ``(2) Treatment in secondary market.--After a loan is sold 
        in the secondary market, the lender shall remain obligated 
        under its guarantee agreement with the Administrator, and shall 
        continue to service the loan in a manner consistent with the 
        terms and conditions of such agreement.
            ``(3) Procedures.--The Administrator shall develop such 
        procedures as are necessary for:
                    ``(A) The facilitation, administration, and 
                promotion of secondary market operations.
                    ``(B) Assessing the increase of small business 
                access to capital at reasonable rates and terms as a 
                result of secondary market operations.
            ``(4) Certain regulations required.--The unguaranteed 
        portion of any loan made under section 7(a) shall not be sold 
        unless a final regulation promulgated by the Administrator is 
        in effect that applies uniformly to both depository 
        institutions and other lenders and sets forth the terms and 
        conditions under which such sales can be permitted, including 
        maintenance of appropriate reserve requirements and other 
        safeguards to protect the safety and soundness of the program.
            ``(5) Prepayments.--Nothing in this subsection or 
        subsection (d) shall be interpreted to impede or extinguish the 
        right of the borrower or the successor in interest to such 
        borrower to prepay (in whole or in part) any loan made pursuant 
        to section 7(a), the guaranteed portion of which may be 
        included in such trust or pool, or to impede or extinguish the 
        rights of any party pursuant to subsection (f)(3).
    ``(d) Issuance of Trust Certificates.--
            ``(1) In general.--The Administrator may issue trust 
        certificates representing ownership of all or a fractional part 
        of the guaranteed portion of one or more loans which have been 
        guaranteed by the Administration under this Act, or under 
        section 502 of the Small Business Investment Act of 1958. Such 
        trust certificates shall be based on and backed by a trust or 
        pool approved by the Administrator and composed solely of the 
        entire guaranteed portion of such loans.
            ``(2) Guarantee.--
                    ``(A) Authorization.--The Administrator is 
                authorized, upon such terms and conditions as are 
                deemed appropriate, to guarantee the timely payment of 
                the principal of and interest on trust certificates 
                issued by the Administrator or its agent for purposes 
                of this subsection. Such guarantee shall be limited to 
                the extent of principal and interest on the guaranteed 
                portions of loans which compose the trust or pool. The 
                full faith and credit of the United States is pledged 
                to the payment of all amounts which may be required to 
                be paid under any guarantee of such trust certificates 
                issued by the Administrator or its agent pursuant to 
                this subsection.
                    ``(B) Prepayment.--In the event that a loan in such 
                trust or pool is prepaid, either voluntarily or in the 
                event of default, the guarantee of timely payment of 
                principal and interest on the trust certificates shall 
                be reduced in proportion to the amount of principal and 
                interest such prepaid loan represents in the trust or 
                pool.
                    ``(C) Interest; redemption.--Interest on prepaid or 
                defaulted loans shall accrue and be guaranteed by the 
                Administrator only through the date of payment on the 
                guarantee. During the term of the trust certificate, it 
                may be called for redemption due to prepayment or 
                default of all loans constituting the pool.
            ``(3) Fees.--
                    ``(A) In general.--The Administrator may collect a 
                fee for any loan guarantee sold into the secondary 
                market under subsection (c) in an amount equal to not 
                more than 50 percent of the portion of the sale price 
                that exceeds 110 percent of the outstanding principal 
                amount of the portion of the loan guaranteed by the 
                Administrator.
                    ``(B) Collection.--Any such fee imposed by the 
                Administrator shall be collected by the Administrator 
                or by the agent which carries out on behalf of the 
                Administrator the central registration functions 
                required by subsection (e) and shall be paid to the 
                Administrator and used solely to reduce the subsidy on 
                loans guaranteed under section 7(a). Any such fee shall 
                not be charged to the borrower whose loan is 
                guaranteed. Nothing in this paragraph shall preclude 
                any agent of the Administrator from collecting a fee 
                approved by the Administrator for the functions 
                described in subsection (e).
                    ``(C) Late fees.--The Administrator is authorized 
                to impose and collect, either directly or through a 
                fiscal and transfer agent, a reasonable penalty on late 
                payments of the fee authorized under subparagraph (A) 
                in an amount not to exceed 5 percent of such fee per 
                month plus interest.
            ``(4) Subrogation.--In the event the Administrator pays a 
        claim under a guarantee issued under this subsection, it shall 
        be subrogated fully to the rights satisfied by such payment.
            ``(5) Laws superseded.--No federal, state, or local law, 
        shall preclude or limit the exercise by the Administrator of 
        its ownership rights in the portions of loans constituting the 
        trust or pool against which the trust certificates are issued.
    ``(e) Central Registry of Loans and Trust Certificates.--
            ``(1) Establishment.--Upon the adoption of final rules and 
        regulations, the Administrator shall--
                    ``(A) provide for a central registration of all 
                loans and trust certificates sold pursuant to 
                subsections (c) and (d);
                    ``(B) contract with an agent to carry out on behalf 
                of the Administrator the central registration functions 
                of this subsection and the issuance of trust 
                certificates to facilitate pooling;
                    ``(C) prior to any sale, require the seller to 
                disclose to a purchaser of the guaranteed portion of a 
                loan guaranteed under this Act, and to the purchaser of 
                a trust certificate issued pursuant to subsection (d), 
                information on the terms, conditions, and yield of such 
                instrument; and
                    ``(D) have the authority to regulate brokers and 
                dealers in guaranteed loans and trust certificates sold 
                pursuant to subsections (c) and (d).
            ``(2) Bonding requirement.--The agent referred to in 
        paragraph (1)(B) shall provide a fidelity bond or insurance in 
        such amounts as the Administrator determines to be necessary to 
        fully protect the interest of the Government.
            ``(3) Seller.--For purposes of this subsection, the term 
        `seller', with respect to the sale of any loan, does not 
        include the entity which made the loan or any individual or 
        entity which sells three or fewer guaranteed loans per year.
            ``(4) Book-entry system.--Nothing in this subsection shall 
        prohibit the utilization of a book-entry or other electronic 
        form of registration for trust certificates. The Administrator 
        may, with the consent of the Secretary of the Treasury, use the 
        book-entry system of the Federal Reserve System.
            ``(5) Agent fees.--The Administrator may compensate an 
        agent described in paragraph (1)(B) through transaction and 
        servicing fees charged to program users and through interest 
        earnings on payments under the agent's control.
    ``(f) Other Special Rules and Authorities Related to Loan 
Programs.--
            ``(1) In general.--The Administrator may take any and all 
        actions (including the procurement of the services of attorneys 
        by contract in any office where an attorney or attorneys are 
        not or cannot be economically employed full time to render such 
        services) when he determines such actions are necessary or 
        desirable in making, servicing, compromising, modifying, 
        liquidating, or otherwise dealing with or realizing on loans 
        made under the provisions of this Act. With respect to deferred 
        participation loans, the Administrator may, in the discretion 
        of and pursuant to regulations promulgated by the 
        Administrator, authorize participating lending institutions to 
        take actions relating to loan servicing on behalf of the 
        Administrator, including determining eligibility 
and creditworthiness and loan monitoring, collection, and liquidation.
            ``(2) Fees.--The Administrator may impose, retain, and use 
        only those fees which are specifically authorized by law or 
        which are in effect on September 30, 1994, and in the amounts 
        and at the rates in effect on such date, except that the 
        Administrator may, subject to approval in appropriations Acts, 
        impose, retain, and utilize, additional fees--
                    ``(A) not to exceed $100 for each loan servicing 
                action (other than a loan assumption) requested after 
                disbursement of the loan, including any substitution of 
                collateral, release or substitution of a guarantor, 
                reamortization, or similar action;
                    ``(B) not to exceed $300 for loan assumptions;
                    ``(C) not to exceed 1 percent of the amount of 
                requested financings under title III of the Small 
                Business Investment Act of 1958 for which the applicant 
                requests a commitment from the Administrator for 
                funding during the following year;
                    ``(D) to recover the direct, incremental cost 
                involved in the production and dissemination of 
                compilations of information produced by the 
                Administrator under the authority of this Act and the 
                Small Business Investment Act of 1958; and
                    ``(E) collect, retain and utilize, subject to 
                approval in appropriations Acts, any amounts collected 
                by fiscal transfer agents and not used by such agent as 
                payment of the cost of loan pooling or debenture 
                servicing operations, except that amounts collected 
                under this subsection shall be utilized solely to 
                facilitate the administration of the program that 
                generated the excess amounts.
            ``(3) Power to undertake and suspend loans.--
                    ``(A) In general.--Subject to the requirements and 
                conditions contained in this paragraph, upon 
                application by a small business concern which is the 
                recipient of a loan made under this Act, the 
                Administrator may undertake the small business 
                concern's obligation to make the required payments 
                under such loan or may suspend such obligation if the 
                loan was a direct loan made by the Administrator. While 
                such payments are being made by the Administrator 
                pursuant to the undertaking of such obligation or while 
                such obligation is suspended, no such payment with 
                respect to the loan may be required from the small 
                business concern.
                    ``(B) Requirements.--The Administrator may 
                undertake or suspend for a period of not to exceed 5 
                years any small business concern's obligation under 
                this paragraph only if--
                            ``(i) without such undertaking or 
                        suspension of the obligation, the small 
                        business concern would, in the sole discretion 
                        of the Administrator, become insolvent or 
                        remain insolvent;
                            ``(ii) with the undertaking or suspension 
                        of the obligation, the small business concern 
                        would, in the sole discretion of the 
                        Administrator, become or remain a viable small 
                        business concern; and
                            ``(iii) the small business concern executes 
                        an agreement in writing satisfactory to the 
                        Administrator as provided by subparagraph (D) 
                        and takes such actions as are required under 
                        subparagraph (E).
                    ``(C) Extension of maturity.--Notwithstanding the 
                provisions of sections 7(a)(10) and 7(i)(1), the 
                Administrator may extend the maturity of any loan on 
                which the Administrator undertakes or suspends the 
                obligation pursuant to this paragraph for a 
                corresponding period of time.
                    ``(D) Agreement.--Prior to the undertaking or 
                suspension by the Administrator of any small business 
                concern's obligation under this subsection, the 
                Administrator, consistent with the purposes sought to 
                be achieved under this paragraph, shall require the 
                small business concern to agree in writing to repay to 
                it the aggregate amount of the payments which were 
                required under the loan during the period for which 
                such obligation was undertaken or suspended, either--
                            ``(i) by periodic payments not less in 
                        amount or less frequently falling due than 
                        those which were due under the loan during such 
                        period;
                            ``(ii) pursuant to a repayment schedule 
                        agreed upon by the Administrator and the small 
                        business concern; or
                            ``(iii) by a combination of the payments 
                        described in clauses (i) and (ii).
                    ``(E) Security; other actions.--The Administrator 
                shall, prior to the undertaking or suspension of the 
                obligation, take such action, and require the small 
                business concern to take such action as the 
                Administrator deems appropriate in the circumstances, 
                including the provision of such security as the 
                Administrator deems necessary or appropriate to insure 
                that the rights and interests of the lender 
                (Administration or participant) will be safeguarded 
                adequately during and after the period in which such 
                obligation is so undertaken or suspended.
                    ``(F) Required payments.--For purposes of this 
                paragraph, the term `required payments' means, with 
                respect to any loan, payments of principal and interest 
                under the loan.
            ``(4) Interest rate on deferred participation share.--Upon 
        purchase by the Administrator of any deferred participation 
        entered into under section 7, the Administrator may continue to 
        charge a rate of interest not to exceed that initially charged 
        by the participating institution on the amount so purchased for 
        the remaining term of the indebtedness.
            ``(5) Subordination to certain state tax liens.--Any 
        interest held by the Administrator in property, as security for 
a loan, shall be subordinate to any lien on such property for taxes due 
on the property to a State, or political subdivision thereof, in any 
case where such lien would, under applicable State law, be superior to 
such interest if such interest were held by any party other than the 
United States.
    ``(g) Risk Management Database.--
            ``(1) Establishment.--The Administrator shall maintain, 
        within the management system for the loan programs authorized 
        by subsections (a) and (b) of section 7 and title V of the 
        Small Business Investment Act of 1958, a management information 
        system that will generate a database capable of providing 
        timely and accurate information in order to identify loan 
        underwriting, collections, recovery, and liquidation problems.
            ``(2) Contents.--In addition to such other information as 
        the Administrator considers appropriate, the database 
        established under this subsection shall, with respect to each 
        loan program described in paragraph (1), include information 
        relating to--
                    ``(A) the identity of the institution making the 
                guaranteed loan or issuing the debenture;
                    ``(B) the identity of the borrower;
                    ``(C) the total dollar amount of the loan or 
                debenture;
                    ``(D) the total dollar amount of government 
                exposure in each loan;
                    ``(E) the district of the Administration in which 
                the borrower has its principal office;
                    ``(F) the principal line of business of the 
                borrower, as identified by North American Industrial 
                Classification System Code;
                    ``(G) the delinquency rate for each program 
                (including number of instances and days overdue);
                    ``(H) the number and amount of repurchases, losses, 
                and recoveries in each program;
                    ``(I) the number of deferrals or forbearances in 
                each program (including days and number of instances);
                    ``(J) comparisons on the basis of loan program, 
                lender, Administration district and region, for all the 
                data elements maintained; and
                    ``(K) underwriting characteristics of each loan 
                that has entered into default, including term, amount 
                and type of collateral, loan-to-value and other actual 
                and projected ratios, line of business, credit history, 
                and type of loan.''.
    (b) Related Repeal.--Section 17 of the Small Business Act (15 
U.S.C. 646) is amended to read as follows:

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

SEC. 206. ORGANIZATION AND STAFF.

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

``SEC. 6. ORGANIZATION AND STAFF.

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

``SEC. 22. OFFICE OF INTERNATIONAL TRADE.

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

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

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

SEC. 207. LOAN PROGRAMS.

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

``SEC. 7. LOAN PROGRAMS.

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

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

    (a) In General.--Section 8 of the Small Business Act (15 U.S.C. 
637) is amended by striking subsections (a), (b), and (c) and inserting 
the following new subsections:
    ``(a) Government Contract and Business Development Assistance for 
Small Business Concerns.--
            ``(1) Establishment.--There is within the Administration a 
        program to be carried out by the Administrator to enhance the 
        competitive viability of program participants by providing 
        Government contract and business development assistance to 
        program participants consistent with the requirements of this 
        section.
            ``(2)(A) Contract authority.--The Administrator shall, to 
        the extent that Administrator determines it to be necessary or 
        appropriate, enter into any contract with any contracting 
        officer obligating the Administrator to furnish goods or 
        service to the Government.
            ``(B) Negotiation with contracting officer.--In any case in 
        which the Administrator certifies to a contracting officer that 
        the Administrator is competent and responsible to perform any 
        procurement contract to be let by such officer, such officer 
        may let such procurement contract to the Administrator upon 
        such terms and conditions as may be agreed upon between the 
        Administrator and such officer.
            ``(C) Fair market price restriction.--A contracting officer 
        shall not let a contract for goods or services under this 
        paragraph if the amount of such contract exceeds the fair 
        market price of such goods or services.
            ``(D) Appeal of contracting officer decision.--(i) Whenever 
        the Administrator and a contracting officer fail to agree, the 
        matter shall be submitted for determination by the 
        Administrator to the head of the agency of the contracting 
        officer.
            ``(ii) Not later than 5 days from the date the 
        Administrator is notified of a contracting officer's adverse 
        decision, the Administrator may notify the contracting officer 
        of the intent to appeal such adverse decision, and within 15 
        days of such date the Administrator shall file a written 
        request for a reconsideration of the adverse decision with head 
        of the agency.
            ``(iii) For purposes of this subparagraph, a contracting 
        officer's adverse decision includes a decision not to make 
        available for award pursuant to this subsection a particular 
        procurement requirement or the failure to agree on the terms 
        and conditions of a contract to be awarded noncompetitively 
        under the authority of this subsection.
            ``(iv) Upon receipt of the notice of intent to appeal, the 
        head of the agency shall suspend further action regarding the 
        procurement until a written decision on the Administrator's 
        request for reconsideration has been issued by such agency 
        head, unless the head of the agency makes a written 
        determination that urgent and compelling circumstances which 
        significantly affect interests of the United States will not 
        permit waiting for a reconsideration of the adverse decision.
            ``(v) If the Administrator's request for reconsideration is 
        denied, the head of the agency shall specify the reasons why 
        the selected firm was determined to be incapable to perform the 
        procurement requirement, and the findings supporting such 
        determination, which shall be made a part of the contract file 
        for the requirement.
            ``(E) Determination of unsuitability.--If a contracting 
        officer requests the Administrator to make the certification 
        described in subparagraph (B) with respect to any contract that 
        the Administrator determines is not suitable for award under 
        this subsection, the Administrator shall notify the contracting 
        officer of the Administrator's determination not later than 3 
        days after the date of such request.
            ``(F) Subcontracting authority.--(i) The Administrator 
        shall, to the extent that the Administrator determines it to be 
        necessary or appropriate, arrange for the performance of such 
        procurement contracts by negotiating or otherwise letting 
        subcontracts to program participants for such goods or services 
        as may be necessary to enable the Administrator to perform such 
        contracts.
            ``(ii)(I) Except as authorized by subclause (II) or (III), 
        no award shall be made pursuant to this section to other than a 
        small business concern.
            ``(II) In determining the size of a small business concern 
        owned by a socially and economically disadvantaged Indian tribe 
        (or a wholly owned business entity of such tribe), each firm's 
        size shall be independently determined without regard to its 
        affiliation with the tribe, any entity of the tribal 
        organization, or any other business enterprise owned by the 
        tribe, unless the Administrator determines that one or more 
        such tribally owned business concerns have obtained, or are 
        likely to obtain, a substantial unfair competitive advantage 
        within an industry category.
            ``(III) Any joint venture established under the authority 
        of section 602(b) of the Business Opportunity Development 
        Reform Act of 1988 (Public Law 100-656) shall be eligible for 
        award of a contract pursuant to this section.
            ``(G) Delegation of contract administration.--(i) The 
        Administrator and the head of the agency making the procurement 
        shall enter into an agreement under which a subcontract awarded 
        under this subsection shall be administered by the head of the 
        agency making the procurement.
            ``(ii) Notwithstanding clause (i), the Administrator shall 
        negotiate and award any such subcontract and shall assist the 
        program participant in the settlement of any dispute arising 
        from the performance of such subcontract.
            ``(iii) Any agreement entered into by the Administrator 
        with the head of another agency before the date of the 
        enactment of this clause that allows such agency head to 
        negotiate or award a contract under this subsection shall not 
        apply with respect to any subcontract offered for award after 
        such date.
            ``(H) Award after graduation.--The Administrator shall, to 
        the extent that the Administrator determines it to be necessary 
        or appropriate, make an award to a small business concern which 
        has completed its period of program participation as described 
        in paragraph (21)(F) if--
                    ``(i) the contract will be awarded as a result of 
                an offer (including price) submitted in response to a 
                published solicitation relating to a competition 
                conducted pursuant to subparagraph (H); and
                    ``(ii) the prospective contract awardee was a 
                program participant eligible for award of the contract 
                on the date specified for receipt of offers contained 
                in the contract solicitation.
            ``(I) Award through competition.--(i) A subcontract offered 
        for award pursuant to this subsection shall be awarded on the 
        basis of competition restricted to program participants if--
                    ``(I) there is a reasonable expectation that at 
                least 2 program participants will submit offers and 
                that award can be made at a fair market price; and
                    ``(II) the estimated anticipated award price of the 
                contract (including options) may exceed $5,000,000 in 
                the case of a contract opportunity assigned a North 
                American Industrial Classification System code for 
                manufacturing and $3,000,000 (including options) in the 
                case of all other contract opportunities.
            ``(ii) The Administrator may award a subcontract under this 
        subsection on the basis of a competition restricted to program 
        participants if the requirements of clause (i)(I) are met.
            ``(J) Sole source award.--(i) In the case of any 
        subcontract not awarded under subparagraph (I), the 
        Administrator shall award such contract sole source to a 
        program participant if--
                    ``(I) the program participant is determined to be a 
                responsible contractor with respect to performance of 
                such contract opportunity;
                    ``(II) the award of such contract would be 
                consistent with the program participant's business 
                plan; and
                    ``(III) the award of the contract would not result 
                in the program participant exceeding the requirements 
                established by paragraph (21)(G)(iii).
            ``(ii) To the maximum extent practicable, the Administrator 
        shall promote the equitable geographic distribution of sole 
        source contracts awarded pursuant to this subsection.
            ``(3) Surety bonds.--Notwithstanding subsections (a) and 
        (c) of the first section of the Act entitled `An Act requiring 
        contracts for the construction, alteration, and repair of any 
        public building or public work of the United States to be 
        accompanied by a performance bond protecting the United States 
        and by additional bond for the protection of persons furnishing 
        material and labor for the construction, alteration, or repair 
        of said public buildings or public work,' approved August 24, 
        1935 (49 Stat. 793; 40 U.S.C. 270a), no program participant 
        shall be required to provide any amount of any bond as a 
        condition of receiving any subcontract under this subsection 
        if--
                    ``(A) the Administrator determines that such amount 
                is inappropriate for such program participant in 
                performing such contract;
                    ``(B) the Administrator takes such measures as the 
                Administrator considers appropriate for the protection 
                of persons furnishing materials and labor to a program 
                participant receiving any benefit pursuant to this 
                paragraph;
                    ``(C) the Administrator assists, insofar as 
                practicable, a program participant receiving the 
                benefits of this paragraph to develop, within a 
                reasonable period of time, such financial and other 
                capability as may be needed to obtain such bonds as the 
                Administrator may subsequently require for the 
                successful completion of any program conducted under 
                the authority of this subsection;
                    ``(D) the Administrator finds that such program 
                participant is unable to obtain the requisite bond or 
                bonds from a surety and that no surety is willing to 
                issue such bond or bonds subject to the guarantee 
                provisions of title IV of the Small Business Investment 
                Act of 1958; and
                    ``(E) the program participant is determined to be a 
                startup concern and such concern has not been 
                participating in any program conducted under the 
                authority of this subsection for a period exceeding one 
                year.
            ``(4) Sole source contract negotiation.--(A) Any program 
        participant selected by the Administrator to perform a contract 
        to be let noncompetitively pursuant to this subsection shall, 
        when practicable, participate in any negotiation of the terms 
        and conditions of such contract.
            ``(B) Calculation of fair market price.--(i) For purposes 
        of paragraph (2)(C), a fair market price shall be determined by 
the agency according to clauses (ii) and (iii) and submitted along with 
the procurement requirement to the Administrator. The submission also 
shall include any data used by the agency in calculating the fair 
market price.
            ``(ii) The estimate of a current fair market price for a 
        new procurement requirement, or a requirement that does not 
        have a satisfactory procurement history, shall be derived from 
        a price or cost analysis taking into account prevailing market 
        conditions, commercial prices for similar goods or services, 
        and data from other Federal agencies. Such analysis shall 
        consider such cost or pricing data as may be timely submitted 
        by the Administrator.
            ``(iii) The estimate of a current fair market price for a 
        procurement requirement that has a satisfactory procurement 
        history shall be based on recent award prices adjusted to 
        insure comparability. Such adjustments shall take into account 
        differences in quantities, performance times, plans, 
        specifications, transportation costs, packaging and packing 
        costs, labor and materials costs, overhead costs, and any other 
        additional costs which may be deemed appropriate.
            ``(iv) The agency's estimate of the current fair market 
        price (and any supporting data furnished to the Administrator) 
        shall not be disclosed to any potential offeror (other than the 
        Administrator).
            ``(C) A program participant selected by the Administrator 
        to perform or negotiate a contract to be let pursuant to this 
        subsection may request the Administrator to protect the 
        agency's estimate of the fair market price for such contract 
        pursuant to paragraph (2)(A).
            ``(5) Social disadvantage.--(A) Socially disadvantaged 
        individuals are those who have been subjected to racial or 
        ethnic prejudice or cultural bias because of their identity as 
        a member of a group without regard to their individual 
        qualities.
            ``(B) Any determination made pursuant to this paragraph 
        shall be made by the Administrator and shall not be delegated.
            ``(6) Economic disadvantage.--(A)(i) Economically 
        disadvantaged individuals are those socially disadvantaged 
        individuals whose ability to compete in the free enterprise 
        system has been impaired due to diminished capital and credit 
        opportunities as compared to others in the same business area 
        who are not socially disadvantaged.
            ``(ii) In determining the degree of diminished credit and 
        capital opportunities the Administrator shall consider the 
        assets and net worth of such socially disadvantaged individual 
        as it relates to--
                    ``(I) the assets and net worth of a business owner 
                who is not socially disadvantaged; and
                    ``(II) the capital needs of the primary industry in 
                which the owner of the business is engaged.
            ``(iii) In determining the economic disadvantage of an 
        Indian tribe, the Administrator shall consider, where 
        available, information such as the following--
                    ``(I) the per capita income of members of the tribe 
                excluding judgment awards;
                    ``(II) the percentage of the local Indian 
                population below the poverty level; and
                    ``(III) the tribe's access to capital markets.
            ``(B) For the purpose of this section, an individual who 
        has been determined by the Administrator to be economically 
        disadvantaged at the time of program entry shall be deemed to 
        be economically disadvantaged for the term of the program, as 
        computed under paragraph (21).
            ``(C) Whenever the Administrator computes personal net 
        worth for the purpose of program entry, it shall exclude from 
        such computation--
                    ``(i) the value of investments that disadvantaged 
                owners have in their concerns, except that such value 
                shall be taken into account under this paragraph when 
                comparing such concerns to other concerns in the same 
                business area that are owned by other than socially 
                disadvantaged persons; and
                    ``(ii) the equity that disadvantaged owners have in 
                their primary personal residences.
            ``(D) The Administrator shall not establish a maximum net 
        worth that prohibits program entry that is less than $750,000.
            ``(7) Program participant.--
                    ``(A) Definition.--For purposes of this section, 
                the term `program participant' means a small business 
                concern which is certified by the Administrator that it 
                meets the requirements of subparagraph (B) and--
                            ``(i) which is at least 51 percent 
                        unconditionally owned by--
                                    ``(I) one or more socially and, at 
                                the time of program entry, economically 
                                disadvantaged individuals,
                                    ``(II) an economically 
                                disadvantaged Indian tribe, (or a 
                                wholly owned business entity of such 
                                tribe), or
                                    ``(III) an economically 
                                disadvantaged Native Hawaiian 
                                organization, or
                            ``(ii) in the case of any publicly owned 
                        business, at least 51 percent of the stock of 
                        which is unconditionally owned by--
                                    ``(I) one or more socially and, at 
                                the time of program entry, economically 
                                disadvantaged individuals,
                                    ``(II) an economically 
                                disadvantaged Indian tribe (or a wholly 
                                owned business entity of such tribe), 
                                or
                                    ``(III) an economically 
                                disadvantaged Native Hawaiian 
                                organization.
                    ``(B) Program participation eligibility.--A program 
                participant meets the requirements of this subparagraph 
                if the management and daily business operations of such 
                small concern are controlled by one or more--
                            ``(i) socially and, at the time of program 
                        entry, economically disadvantaged individuals 
                        described in subparagraph (A)(i)(I) or 
                        subparagraph (A)(ii)(I),
                            ``(ii) members of an economically 
                        disadvantaged Indian tribe described in 
                        subparagraph (A)(i)(II) or subparagraph 
                        (A)(ii)(II), or
                            ``(iii) Native Hawaiian organizations 
                        described in subparagraph (A)(i)(III) or 
                        subparagraph (A)(ii)(III).
                    ``(C) Native hawaiian organization.--For purposes 
                of this subsection, the term `Native Hawaiian 
                Organization' means any community service organization 
                serving Native Hawaiians in the State of Hawaii which--
                            ``(i) is a nonprofit corporation that has 
                        filed articles of incorporation with the 
                        director (or the designee thereof) of the 
                        Hawaii Department of Commerce and Consumer 
                        Affairs, or any successor agency,
                            ``(ii) is controlled by Native Hawaiians, 
                        and
                            ``(iii) whose business activities will 
                        principally benefit such Native Hawaiians.
                    ``(D) Annual certification.--Each program 
                participant shall certify to the District Director for 
                the district in which its principal place of business 
                is located, on an annual basis, that it meets the 
                requirements of this paragraph regarding ownership and 
                control by socially disadvantaged individuals.
                    ``(E) Capability determination.--The term `program 
                participant' shall not include any concern unless the 
                Administrator determines that with contract, financial, 
                technical, and management support the small business 
                concern will be able to perform contracts which may be 
                awarded to such concern under paragraph (2)(F) and has 
                reasonable prospects for success in competing in the 
                private sector.
                    ``(F) Special rules on eligibility.--(i) Except as 
                provided in clause (iii), no individual who was 
                determined pursuant to this section to be socially and 
                economically disadvantaged before the date of the 
                enactment of this subparagraph shall be permitted to 
                assert such disadvantage with respect to any other 
                concern making application for certification after such 
                date.
                    ``(ii) Except as provided in clause (iii), any 
                individual upon whom eligibility is based pursuant to 
                paragraph (5) shall be permitted to assert such 
                eligibility for only one small business concern.
                    ``(iii) A socially and economically disadvantaged 
                Indian tribe may own more than one small business 
                concern eligible for assistance pursuant to this 
                subsection if--
                            ``(I) the Indian tribe does not own another 
                        firm in the same industry which has been 
                        determined to be eligible to receive contracts 
                        under this program, and
                            ``(II) the individuals responsible for the 
                        management and daily operations of the concern 
                        do not manage more than two program 
                        participants.
                    ``(iv) No program participant, previously eligible 
                for the award of contracts pursuant to this subsection, 
                shall be subsequently recertified for program 
                participation if its prior participation in the program 
                was concluded for any of the reasons described in 
                paragraph (10).
                    ``(v)(I) A program participant eligible for the 
                award of contracts pursuant to this subsection shall 
                remain eligible for such contracts if there is a 
                transfer of ownership or control of the program 
                participant that does not alter the eligibility of the 
                program participant as determined by paragraphs (5), 
                (6), and (7).
                    ``(II) The program participant shall notify the 
                Assistant Administrator for Minority Small Business and 
                Capital Ownership of any such change in control or 
                ownership and provide the Assistant Administrator with 
                sufficient information to enable the Assistant 
                Administrator to determine that the transfer of 
                ownership and control does not alter eligibility for 
                participation in the program.
                    ``(III) In the event of such a alteration of 
                ownership or control, the concern, if not terminated or 
                graduated, shall be eligible for a period of continued 
                participation in the program not to exceed the time 
                limitations prescribed in paragraph (27).
            ``(8) Management restrictions.--(A) The Administrator shall 
        not restrict the amount of money that may be removed from the 
        program participants by its owners.
            ``(B) The Administrator shall not impose any restrictions 
        on the management of the company except insofar as such 
        management would violate other eligibility provisions or 
        Federal procurement law.
            ``(C) Notwithstanding this provision, the Administrator may 
        determine that a program participant is not capable of 
        performing a specific contract and may choose not to award a 
        contract to a program participant.
            ``(9) Expansion into other industries.--Limitations 
        established by the Administrator in its regulations and 
        procedures restricting the award of contracts pursuant to this 
        subsection to a limited number of North American Industry 
        Classification System codes in an approved business plan shall 
        not be applied in a manner that inhibits the logical business 
        progression by a program participant into areas of industrial 
        endeavor where such concern has the potential for success.
            ``(10) Opportunity for hearing.--(A) Subject to the 
        provisions of subparagraph (E), the Administrator, prior to 
        taking any action described in subparagraph (B), shall provide 
        the program participant that is the subject of such action, an 
        opportunity for a hearing on the record after providing written 
        notification of an action set forth in paragraph (B), in 
        accordance with chapter 5 of title 5, United States Code.
            ``(B) The actions referred to in subparagraph (A) are--
                    ``(i) denial of program admission based upon a 
                negative determination pursuant to paragraph (5), (6), 
                or (7);
                    ``(ii) a termination pursuant to paragraph (21)(D);
                    ``(iii) a graduation pursuant to paragraph (21)(F); 
                and
                    ``(iv) the denial of a request to issue a waiver 
                pursuant to paragraph (20)(B).
            ``(C) The Administrator's proposed action, in any 
        proceeding conducted under the authority of this paragraph, 
        shall be sustained unless the decision is not supported by 
        substantial evidence in the record.
            ``(D) A decision rendered pursuant to this paragraph shall 
        be considered final agency action for purposes of chapter 7 of 
        title 5, United States Code.
            ``(E) The hearing officer selected to preside over a 
        proceeding conducted under the authority of this paragraph 
        shall decline to accept jurisdiction over any matter that--
                    ``(i) does not, on its face, allege facts that, if 
                proven to be true, would warrant reversal or 
                modification of the Administrator's position;
                    ``(ii) is untimely filed;
                    ``(iii) is not filed in accordance with the rules 
                of procedure governing such proceedings; or
                    ``(iv) has been decided by or is the subject of an 
                adjudication before a court of competent jurisdiction 
                over such matters.
            ``(F) Proceedings conducted pursuant to the authority of 
        this paragraph shall be completed and a decision rendered, 
        insofar as practicable, within 90 days after a written 
        notification of the Administrator taking an action pursuant to 
        subparagraph (B).
            ``(11) Outreach effort.--(A) The Administrator shall 
        develop and implement an outreach program to inform and recruit 
        small business concerns to apply for eligibility for assistance 
        under this subsection.
            ``(B) Such program shall make a sustained and substantial 
        effort to solicit applications for certification from small 
        business concerns located in areas of concentrated unemployment 
        or underemployment or within labor surplus areas and within 
        States having relatively few program participants and from 
        potentially eligible program participants in industry 
        categories that have not substantially participated in the 
        award of contracts let under the authority of this subsection.
            ``(12) Construction contracts.--To the maximum extent 
        practicable, construction subcontracts awarded by the 
        Administrator pursuant to this subsection shall be awarded 
        within the county or State where the work is to be performed.
            ``(13) Capability statement.--
                    ``(A) In general.--The Administrator shall require 
                each concern eligible to receive subcontracts pursuant 
                to this subsection to annually prepare and submit to 
                the Administrator a capability statement.
                    ``(B) Contents.--Such statement shall briefly 
                describe such concern's various contract performance 
                capabilities and shall contain the name and telephone 
                number of the business opportunity specialist in the 
                district to which the program participant is assigned.
                    ``(C) Classification.--The Administrator shall 
                separate such statements by those program participants 
                primarily dependent upon local contract support and 
                those primarily requiring a national marketing effort.
                    ``(D) Dissemination.--Statements primarily 
                dependent upon local contract support shall be 
                disseminated to appropriate buying activities in the 
                marketing area of the concern. The remaining statements 
                shall be disseminated to the Directors of Small and 
                Disadvantaged Business Utilization for the appropriate 
                agencies who shall further distribute such statements 
                to buying activities within such agencies that may 
                purchase the types of items or services described on 
                the capability statements.
                    ``(E) Contracting activity communication with 
                administration.--Contracting activities receiving 
                capability statements shall, within 60 days after 
                receipt, contact the relevant business opportunity 
                specialist to indicate the number, type and approximate 
                dollar value of contract opportunities that such 
                activities may be awarding over the succeeding 12-month 
                period and which may be appropriate to consider for 
                contracting with the Administrator and subsequent 
                subcontracting to those concerns for which it has 
                received capability statements.
            ``(14) Contract forecast.--(A) Each executive agency 
        reporting to the Federal Procurement Data System contract 
actions with an aggregate value in excess of $50,000,000 shall prepare 
a forecast of expected contract opportunities or classes of contract 
opportunities for the next and succeeding fiscal years that small 
business concerns, including those owned and controlled by socially and 
economically disadvantaged individuals, are capable of performing. Such 
forecast shall be periodically revised during such year. To the extent 
such information is available, the agency forecasts shall specify the 
following:
                    ``(i) The approximate number of individual contract 
                opportunities (and the number of opportunities within a 
                class).
                    ``(ii) The approximate dollar value, or range of 
                dollar values, for each contract opportunity or class 
                of contract opportunities.
                    ``(iii) The anticipated time (by fiscal year 
                quarter) for the issuance of a procurement request.
                    ``(iv) The activity responsible for the award and 
                administration of the contract.
            ``(B) Forecast dissemination.--The head of each executive 
        agency subject to the provisions of subparagraph (A) shall 
        within 10 days of completion furnish such forecasts to the 
        Administrator and the Director of the Office of Small and 
        Disadvantaged Business Utilization established pursuant to 
        section 15(k) of this Act for such agency.
            ``(C) Limits on dissemination.--The information reported 
        pursuant to subparagraph (B) may be limited to classes of items 
        and services for which there are substantial annual purchases.
            ``(D) Forecast availability.--Such forecasts shall be 
        available to program participants and all other small business 
        concerns.
            ``(15) Percentages of contract performance by program 
        participants.--
                    ``(A) Services and procurement.--A program 
                participant may not be awarded a contract under this 
                subsection unless the program participant agrees that--
                            ``(i) in the case of a contract for 
                        services (except construction), at least 50 
                        percent of the cost of contract performance 
                        incurred for personnel shall be expended for 
                        employees of the concern; and
                            ``(ii) in the case of a contract for 
                        procurement of supplies (other than procurement 
                        from a regular dealer in such supplies), the 
                        concern will perform work for at least 50 
                        percent of the cost of manufacturing the 
                        supplies (not including the cost of materials).
                    ``(B) Alteration of percentages.--The Administrator 
                may change the percentage under clause (i) or (ii) of 
                subparagraph (A) if the Administrator determines that 
                such change is necessary to reflect conventional 
                industry practices among business concerns that are 
                below the numerical size standard established by the 
                Administrator pursuant to section 3(a) of this Act for 
                businesses in that industry category. A percentage 
                established under the preceding sentence may not differ 
                from a percentage established under section 15(n) of 
                this Act.
                    ``(C) Construction contract regulations.--(i) The 
                Administrator shall establish, by regulation and after 
                the opportunity for notice and comment, requirements 
                similar to those specified in subparagraph (A) to be 
                applicable to contracts for general and specialty 
                construction and to contracts for any other industry 
                category not otherwise subject to the requirements of 
                such subparagraph.
                    ``(ii) The percentage applicable to any such 
                requirement shall be determined in accordance with 
                subparagraph (B), except that such a percentage may not 
                differ from a percentage established under section 
                15(n) of this Act for the same industry category.
            ``(16) Performance exception for wholesalers and 
        retailers.--(A) An otherwise responsible program participant 
        that is in compliance with the requirements of subparagraph (B) 
        shall not be denied the opportunity to submit and have 
        considered its offer for any procurement contract for the 
        supply of a product to be let pursuant to this subsection or 
        section 15(a) solely because such concern is other than the 
        actual manufacturer or processor of the product to be supplied 
        under the contract.
            ``(B) To be in compliance with the requirements referred to 
        in subparagraph (A), the program participant shall--
                    ``(i) be primarily engaged in the wholesale or 
                retail trade;
                    ``(ii) be a small business concern under the size 
                standard for the North American Industrial 
                Classification System Code assigned to the contract 
                solicitation on which the offer is being made;
                    ``(iii) be a regular dealer, as defined pursuant to 
                section 1(a) of the Act entitled `An Act to provide 
                conditions for the purchase of supplies and the making 
                of contracts by the United States, and for other 
                purposes', approved June 30, 1936 (popularly known as 
                the `Walsh-Healey Act'; 41 U.S.C. 35(a)), in the 
                product to be offered the Government or be specifically 
                exempted from such section by paragraph (24)(C) of this 
                subsection; and
                    ``(iv) represent that it will supply the product of 
                a small manufacturer as defined in section 3 of this 
                Act, unless a waiver of such requirement is granted--
                            ``(I) by the Administrator, after reviewing 
                        a determination by the contracting officer that 
                        no small manufacturer can reasonably be 
                        expected to offer a product meeting the 
                        specifications (including period for 
                        performance) required of an offeror by the 
                        solicitation; or
                            ``(II) by the Administrator for a product 
                        (or class of products), after determining that 
no small manufacturer is available to participate in the Federal 
procurement market.
            ``(17) Restriction on administration employees.--
                    ``(A) In general.--No person within the employ of 
                the Administration shall, during the term of such 
                employment and for a period of two years after such 
                employment has been terminated, engage in any activity 
                or transaction specified in subparagraph (B) with 
                respect to any program participant if such person 
                participated personally (either directly or indirectly) 
                in decision-making responsibilities relating to such 
                program participant or with respect to the 
                administration of any assistance provided to program 
                participants generally under this subsection, section 
                8(b), or section 7(a)(20).
                    ``(B) Prohibited transactions.--The activities and 
                transactions prohibited by subparagraph (A) include--
                            ``(i) the buying, selling, or receiving 
                        (except by inheritance) of any legal or 
                        beneficial ownership of stock or any other 
                        ownership interest or the right to acquire any 
                        such interest;
                            ``(ii) the entering into or execution of 
                        any written or oral agreement (whether or not 
                        legally enforceable) to purchase or otherwise 
                        obtain any right or interest described in 
                        clause (i); or
                            ``(iii) the receipt of any other benefit or 
                        right that may be an incident of ownership.
                    ``(C) Employee certification and penalties.--(i) 
                The employees designated in clause (ii) shall annually 
                submit a written certification to the Administrator 
                regarding compliance with the requirements of this 
                paragraph.
                    ``(ii) The employees referred to in clause (i) 
                are--
                            ``(I) regional administrators;
                            ``(II) district directors;
                            ``(III) the Assistant Administrator for 
                        Minority Small Business and Capital Ownership 
                        Development;
                            ``(IV) employees whose principal duties 
                        relate to the award of contracts or the 
                        provision of other assistance pursuant to this 
                        subsection or section 8(b); and
                            ``(V) such other employees as the 
                        Administrator may designate.
                    ``(iii) Any present or former employee of the 
                Administration who violates this paragraph shall be 
                subject to a civil penalty, assessed by the Attorney 
                General, that shall not exceed 300 percent of the 
                maximum amount of gain such employee realized or could 
                have realized as a result of engaging in those 
                activities and transactions prescribed by subparagraph 
                (B).
                    ``(iv) In addition to any other remedy or sanction 
                provided for under law or regulation, any person who 
                falsely certifies pursuant to clause (i) shall be 
                subject to a civil penalty under the Program Fraud 
                Civil Remedies Act of 1986 (31 U.S.C. 3801-3812).
            ``(18) Prohibition on political activity.--
                    ``(A) In general.--Any employee of the 
                Administration who has authority to take, direct others 
                to take, recommend, or approve any action with respect 
                to any program or activity conducted pursuant to this 
                subsection or section 8(b), shall not, with respect to 
                any such action, exercise or threaten to exercise such 
                authority on the basis of the political activity or 
                affiliation of any party. Employees of the 
                Administration shall expeditiously report to the 
                Inspector General of the Administration any such action 
                for which such employee's participation has been 
                solicited or directed.
                    ``(B) Penalties.--Any employee who willfully and 
                knowingly violates subparagraph (A) shall be subject to 
                disciplinary action which may consist of separation 
                from service, reduction in grade, suspension, or 
                reprimand.
                    ``(C) Exception.--Subparagraph (A) shall not apply 
                to any action taken as a penalty or other enforcement 
                of a violation of any law, rule, or regulation 
                prohibiting or restricting political activity.
                    ``(D) Other laws not affected.--The prohibitions of 
                subparagraph (A), and remedial measures provided for 
                under subparagraphs (B) and (C) with regard to such 
                prohibitions, shall be in addition to, and not in lieu 
                of, any other prohibitions, measures or liabilities 
                that may arise under any other provision of law.
            ``(19) Annual report to business opportunity specialist.--
                    ``(A) In general.--Program participants shall 
                semiannually report to their assigned business 
                opportunity specialist the following:
                            ``(i) A listing of any agents, 
                        representatives, attorneys, accountants, 
                        consultants, and other parties (other than 
                        employees) receiving compensation to assist in 
                        obtaining a Federal contract for such program 
                        participant.
                            ``(ii) The amount of compensation received 
                        by any person listed under clause (i) during 
                        the relevant reporting period and a description 
                        of the activities performed in return for such 
                        compensation.
                    ``(B) Submissions to principal office.--The 
                business opportunity specialist shall promptly review 
                and forward such report to the Assistant Administrator 
                for Minority Small Business and Capital Ownership 
                Development. Any report that raises a suspicion of 
                improper activity shall be reported immediately to the 
                Inspector General of the Administration.
                    ``(C) Cause for termination.--The failure to submit 
                a report pursuant to the requirements of this 
                subsection and applicable regulations shall be 
                considered good cause for the initiation of a 
                termination proceeding pursuant to paragraph (21)(D) of 
                this section.
            ``(20) Effect of change of ownership and control.--
                    ``(A) In general.--
                            ``(i) Subject to the provisions of 
                        subparagraph (B), a contract (including 
                        options) awarded pursuant to this subsection 
                        shall be performed (as performance is defined 
                        in paragraphs (15) and (16)) by the program 
                        participant that initially received such 
                        contract.
                            ``(ii) Notwithstanding the provisions of 
                        clause (i), if the owner or owners upon whom 
                        eligibility was based relinquish ownership or 
                        control of such concern, or enter into any 
                        agreement to relinquish such ownership or 
                        control, such contract or option shall be 
                        terminated for the convenience of the 
                        Government, except that no repurchase costs or 
                        other damages may be assessed against such 
                        concerns due solely to the provisions of this 
                        subparagraph.
                    ``(B) Waiver.--The Administrator may, on a 
                nondelegable basis, waive the requirements of 
                subparagraph (A) only if one of the following 
                conditions exist:
                            ``(i) When it is necessary for the owners 
                        of the concern to surrender partial control of 
                        such concern on a temporary basis in order to 
                        obtain equity financing.
                            ``(ii) The head of the contracting agency 
                        for which the contract is being performed 
                        certifies that termination of the contract 
                        would severely impair attainment of the 
                        agency's program objectives or missions.
                            ``(iii) Ownership and control of the 
                        concern that is performing the contract will 
                        pass to another small business concern that is 
                        a program participant, but only if the 
                        acquiring firm would otherwise be eligible to 
                        receive the award pursuant to this subsection.
                            ``(iv) The individuals upon whom 
                        eligibility was based are no longer able to 
                        exercise control of the concern due to 
                        incapacity or death.
                            ``(v) When, in order to raise equity 
                        capital, it is necessary for the disadvantaged 
                        owners of the concern to relinquish ownership 
                        of a majority of the voting stock of such 
                        concern, but only if--
                                    ``(I) such concern has exited the 
                                program established under this 
                                subsection;
                                    ``(II) the disadvantaged owners 
                                will maintain ownership of the largest 
                                single outstanding block of voting 
                                stock (including stock held by 
                                affiliated parties); and
                                    ``(III) the disadvantaged owners 
                                will maintain control of daily business 
                                operations.
                    ``(C) Timing of waiver request.--The Administrator 
                may waive the requirements of subparagraph (A) if--
                            ``(i) in the case of subparagraphs (B)(i), 
                        (ii), and (iii), he is requested to do so prior 
                        to the actual relinquishment of ownership or 
                        control; and
                            ``(ii) in the case of subparagraph (B)(iv), 
                        he is requested to do so as soon as possible 
                        after the incapacity or death occurs.
                    ``(D) Notification to administrator.--Concerns 
                performing contracts awarded pursuant to this 
                subsection shall be required to notify the 
                Administration immediately upon entering an agreement 
                (either oral or in writing) to transfer all or part of 
                its stock or other ownership interest to any other 
                party.
                    ``(E) Treatment of small business investment 
                company interest.--Notwithstanding any other provision 
                of law, for the purposes of determining ownership and 
                control of a concern under this section, any potential 
                ownership interests held by investment companies 
                licensed under the Small Business Investment Act of 
                1958 shall be treated in the same manner as interests 
                held by the individuals upon whom eligibility is based.
            ``(21) Conditions of participation.--
                    ``(A) Duration.--A program participant shall be 
                permitted to continue participation in such program for 
                a period of time which is 9 years. Nothing contained in 
                this subparagraph shall be deemed to prevent the 
                Administrator from instituting a termination or 
                graduation pursuant to subparagraph (F) or (H) for 
                issues unrelated to the expiration of any time period 
                limitation.
                    ``(B) Business plan submission.--(i) Promptly after 
                certification as a participant in the program 
                established by this section, a program participant 
                shall submit a business plan (hereinafter referred to 
                as the `plan') as described in clause (ii) of this 
                subparagraph for review by the Business Opportunity 
                Specialist assigned to assist such program participant.
                    ``(ii) The plan may be a revision of a preliminary 
                business plan submitted by the program participant or 
                required by the Administrator as a part of the 
                application for certification under this subsection and 
                shall be designed to result in the program participant 
                eliminating the conditions or circumstances upon which 
                the Administrator determined eligibility pursuant to 
                paragraph (7) of this section.
                    ``(iii) Such plan, and subsequent modifications 
                submitted under clause (v), shall be approved by the 
                Business Opportunity Specialist prior to the program 
                participant being eligible for award of a contract 
                pursuant to this subsection.
                    ``(iv) The plans submitted under this subparagraph 
                shall include the following:
                            ``(I) An analysis of market potential, 
                        competitive environment, and other business 
                        analyses estimating the program participant's 
                        prospects for profitable operations during the 
                        term of program participation and after 
                        graduation.
                            ``(II) An analysis of the program 
                        participant's strengths and weaknesses with 
                        particular attention to correcting any 
                        financial, managerial, technical, or personnel 
                        conditions which are likely to impede the 
                        program participant from receiving contracts 
                        other than those awarded under this section.
                            ``(III) Specific targets, objectives, and 
                        goals, for the business development of the 
                        program participant during the next and 
                        succeeding years utilizing the results of the 
                        analyses conducted pursuant to subclauses (I) 
                        and (II).
                            ``(IV) A transition management plan 
                        outlining specific steps to assure profitable 
                        business operations after graduation (to be 
                        incorporated into the program participant's 
                        plan during the first year of the transitional 
                        stage of program participation).
                            ``(V) Estimates of contract awards pursuant 
                        to this subsection and from other sources, 
                        which the program participant will require to 
                        meet the specific targets, objectives, and 
                        goals for the years covered by its plan.
                    ``(v) Each program participant shall annually 
                review its currently approved plan with its Business 
                Opportunity Specialist and modify such plan as may be 
                appropriate. Any modified plan shall be submitted to 
                the District Director for approval. The currently 
                approved plan shall be considered valid until such time 
                as a modified plan is reviewed by the Business 
                Opportunity Specialist and approved by the District 
                Director.
                    ``(vi) Annual reviews pertaining to years in the 
                transitional stage of program participation shall 
                require, as appropriate, a written verification that 
                such program participant has complied with the 
                requirements of paragraph (21)(G) of this section 
                relating to attaining business activity from sources 
                other than contracts awarded pursuant to this section.
                    ``(vii) Each program participant shall annually 
                forecast its needs for contract awards under this 
                section for the next program year and the succeeding 
                program year during the review of its business plan, 
                conducted pursuant to clause (v). Such forecast shall 
                be known as the `section 8(a) contract support level' 
                and shall be included in the program participant's 
                business plan. Such forecast shall include--
                            ``(I) the aggregate dollar value of 
                        contract support to be sought on a 
                        noncompetitive basis under this section, 
                        reflecting compliance with the requirements of 
                        paragraph (21)(G) relating to attaining 
                        business activity from sources other than 
                        contracts awarded pursuant to this section,
                            ``(II) the types of contract opportunities 
                        being sought, identified by North American 
                        Industrial Classification System Code or 
                        otherwise,
                            ``(III) an estimate of the dollar value of 
                        the section 8(a) contract support level to be 
                        sought on a competitive basis, and
                            ``(IV) such other information as may be 
                        requested by the Business Opportunity 
                        Specialist to provide effective business 
                        development assistance to the program 
                        participant.
                    ``(C) Conditions for denial of assistance.--A 
                program participant shall be denied all such assistance 
                if such concern--
                            ``(i) voluntarily elects not to continue 
                        participation;
                            ``(ii) completes the period of Program 
                        participation as prescribed by paragraph 
                        (21)(A); and
                            ``(iii) is terminated or graduated pursuant 
                        to proceedings conducted in accordance with 
                        paragraph (10).
                    ``(D) Termination defined.--For purposes of this 
                subsection, the term `terminated' and the term 
                `termination' means the total denial or suspension of 
                assistance under this paragraph or under this section 
                prior to the graduation of the program participant or 
                prior to the expiration of the maximum program 
                participation term. An action for termination shall be 
                based upon good cause, including--
                            ``(i) the failure by such concern to 
                        maintain its eligibility for program 
                        participation;
                            ``(ii) the failure of the concern to engage 
                        in business practices that will promote its 
                        competitiveness within a reasonable period of 
                        time as evidenced by, among other indicators, a 
                        pattern of unjustified delinquent performance 
                        or terminations for default with respect to 
                        contracts awarded under the authority of this 
                        subsection;
                            ``(iii) a demonstrated pattern of failing 
                        to make required submissions or responses to 
                        Administration officials or employees in a 
                        timely manner;
                            ``(iv) the willful violation of any rule or 
                        regulation of the Administrator pertaining to 
                        material issues;
                            ``(v) the debarment of the concern or its 
                        disadvantaged owners by any agency pursuant to 
                        subpart 9.4 of title 48, Code of Federal 
                        Regulations (or any successor regulation); or
                            ``(vi) the conviction of the disadvantaged 
                        owner or an officer of the concern for any 
                        offense indicating a lack of business integrity 
                        including any conviction for embezzlement, 
                        theft, forgery, bribery, falsification or 
                        violation of section 16. For purposes of this 
                        clause, no termination action shall be taken 
                        with respect to a disadvantaged owner solely 
                        because of the conviction of an officer of the 
                        concern (who is other than a disadvantaged 
                        owner) unless such owner conspired with, 
                        abetted, or otherwise knowingly acquiesced in 
                        the activity or omission that was the basis of 
                        such officer's conviction.
                    ``(E) Initiation of termination proceeding.--(i) 
                The District Director may initiate a termination 
                proceeding by recommending such action to the Assistant 
                Administrator for Minority Small Business and Capital 
                Ownership Development.
                    ``(ii) Whenever the Assistant Administrator 
                determines such termination is appropriate, within 15 
days after making such a determination the program participant shall be 
provided a written notice of intent to terminate, specifying the 
reasons for such action.
                    ``(iii) No program participant shall be terminated 
                from the program pursuant to subparagraph (D) without 
                first being afforded an opportunity for a hearing in 
                accordance with paragraph (10).
                    ``(iv) If a termination proceeding is initiated 
                against a program participant, such participant shall 
                be ineligible from receiving assistance pursuant to 
                this section until the final disposition of the 
                termination action.
                    ``(v) If the program participant is reinstated upon 
                final decision by the Administrator pursuant to 
                paragraph (10), the time during which the program 
                participant did not receive assistance shall be added 
                on to the original program term end date.
                    ``(F) Graduation defined.--For the purposes of this 
                subsection and subsection 8(b) the term `graduated' or 
                `graduation' means that the program participant is 
                recognized as successfully completing the program by 
                substantially achieving the targets, objectives, and 
                goals contained in the concern's business plan thereby 
                demonstrating its ability to compete in the marketplace 
                without assistance under this section.
                    ``(G) Business activity targets.--(i) During the 
                developmental stage of its participation in the 
                program, a program participant shall take all 
                reasonable efforts within its control to attain the 
                targets contained in its business plan for contracts 
                awarded other than pursuant to this subsection 
                (hereinafter referred to as `business activity 
                targets.').
                    ``(ii) Such efforts shall be made a part of the 
                business plan and shall be sufficient in scope and 
                duration to satisfy the Administrator that the program 
                participant will engage in a reasonable marketing 
                strategy that will maximize its potential to achieve 
                its business activity targets.
                    ``(iii) During the transitional stage of the 
                program a program participant shall be subject to 
                regulations regarding business activity targets that 
                are promulgated by the Administrator. Such regulations 
                shall:
                            ``(I) Establish business activity targets 
                        applicable to program participants during the 
                        fifth year and each succeeding year of program 
                        participation.
                                    ``(aa) Such activity targets shall, 
                                for such period of time, reflect a 
                                reasonably consistent increase in 
                                contracts awarded other than pursuant 
                                to this subsection, expressed as a 
                                percentage of total sales.
                                    ``(bb) The Administrator may 
                                establish modified business activity 
                                targets for program participants that 
                                have participated in the program for a 
                                period of longer than 5 years on the 
                                date of the enactment of this Act.
                            ``(II) Require the program participant to 
                        certify that it has met its business activity 
                        targets or that it is in compliance with such 
                        remedial measures as may have been ordered 
                        pursuant to regulations issued under subclause 
                        (III) prior to the receipt of any contract 
                        awarded pursuant to this subsection.
                            ``(III) Authorize the Administrator to take 
                        appropriate remedial measures with respect to a 
                        program participant that has failed to attain a 
                        required business activity target for the 
                        purpose of reducing such participant's 
                        dependence on contracts awarded pursuant to 
                        this section.
                                    ``(aa) Such remedial actions may 
                                include assisting the program 
                                participant to expand the dollar volume 
                                of its competitive business activity or 
                                limiting the dollar volume of contracts 
                                awarded to the program participant 
                                pursuant to this subsection.
                                    ``(bb) Unless the remedial measures 
                                taken pursuant to subclause (aa) bar 
                                the award of contracts to program 
                                participants, no remedial measures 
                                shall be reviewable pursuant to 
                                paragraph (10).
                    ``(H) Eligibility review.--(i) The Administrator 
                shall conduct an evaluation of a program participant's 
                eligibility for continued participation in the program 
                whenever it receives specific and credible information 
                alleging that such program participant no longer meets 
                the requirements for program eligibility.
                    ``(ii) Upon making a finding that a program 
                participant is no longer eligible, the Administrator 
                shall initiate a termination proceeding in accordance 
                with subparagraphs (D) and (E).
                    ``(iii) A program participant's eligibility for 
                award of any contract under the authority of this 
                section may be suspended pursuant to subpart 9.4 of 
                title 48, Code of Federal Regulations (or any successor 
                regulation).
            ``(22) Certification and review by administrator.--
                    ``(A) Assistant administrator coordination.--The 
                Assistant Administrator for Minority Small Business and 
                Capital Ownership Development shall be responsible for 
                coordinating and formulating policies relating to 
                Federal assistance to small business concerns eligible 
                for assistance under section 7(i) of this Act and 
                program participants.
                    ``(B) Division of program certification and 
                eligibility.--(i) There is established a Division of 
                Program Certification and Eligibility (hereinafter 
                referred to in this paragraph as the `Division') in the 
                Office of Minority Small Business and Capital Ownership 
                Development. The Division shall be headed by a Director 
                who shall report directly to the Assistant 
                Administrator for Minority Small Business and Capital 
                Ownership Development. The Division shall establish 
                field offices within such regional offices of the 
                Administration as may be necessary to perform 
                efficiently its functions and responsibilities.
                    ``(ii) Subject to the provisions of paragraph 
                (5)(B), the functions and responsibility of the 
                Division of Program Certification and Eligibility are 
                to--
                            ``(I) receive, review and evaluate 
                        applications for certification pursuant to 
                        paragraphs (5), (6), and (7);
                            ``(II) advise each program applicant within 
                        15 days after the receipt of an application as 
                        to whether such application is complete and 
                        suitable for evaluation and, if not, what 
                        matters must be rectified;
                            ``(III) render recommendations on such 
                        applications to the Assistant Administrator for 
                        Minority Small Business and Capital Ownership 
                        Development;
                            ``(IV) review and evaluate financial 
                        statements and other submissions from concerns 
                        participating in the program established by 
                        this subsection to ascertain continued 
                        eligibility to receive subcontracts pursuant to 
                        this section;
                            ``(V) make a request for the initiation of 
                        termination or graduation proceedings, as 
                        appropriate, to the Assistant Administrator for 
                        Minority Small Business and Capital Ownership 
                        Development;
                            ``(VI) make recommendations to the 
                        Assistant Administrator for Minority Small 
                        Business and Capital Ownership Development 
                        concerning protests from applicants that have 
                        been denied program admission;
                            ``(VII) decide protests regarding the 
                        status of a concern as a disadvantaged concern 
                        for purposes of any program or activity 
                        conducted under the authority of subsection 
                        (d), or any other provision of Federal law that 
                        references such subsection for a definition of 
                        program eligibility; and
                            ``(VIII) implement such policy directives 
                        as may be issued by the Assistant Administrator 
                        for Minority Small Business and Capital 
                        Ownership Development pursuant to subparagraph 
                        (E) regarding, among other things, the 
                        geographic distribution of concerns to be 
                        admitted to the program and the industrial 
                        make-up of such concerns.
                    ``(C) Program admission and contract 
                opportunities.--An applicant shall not be denied 
                admission into the program established by this 
                subsection due solely to a determination by the 
                Division of Program Certification and Eligibility that 
                specific contract opportunities are unavailable to 
                assist in the development of such concern unless--
                            ``(i) the Government has not previously 
                        procured and is unlikely to procure the types 
                        of products or services offered by the concern 
                        on a prime contract basis; or
                            ``(ii) the purchases of such products or 
                        services by the Federal Government will not be 
                        in quantities sufficient to support the 
                        developmental needs of the applicant and other 
                        program participants providing the same or 
                        similar items or services.
                    ``(D) Certification decision.--Except as provided 
                in paragraph 5(B), not later than 90 days after receipt 
                of a completed application for program certification, 
                the Assistant Administrator for Minority Small Business 
                and Capital Ownership Development shall certify a small 
                business concern as a program participant or shall deny 
                such application.
                    ``(E) Division review.--
                            ``(i) Thirty days before the conclusion of 
                        each fiscal year, the Director of the Division 
                        of Program Certification and Eligibility shall 
                        review all concerns that have been admitted 
                        into the program during the preceding 12-month 
                        period.
                            ``(ii) The review shall ascertain the 
                        number of entrants, their geographic 
                        distribution, and their industrial 
                        classification. The Director shall also 
                        estimate the expected growth of the program 
                        during the next fiscal year and the number of 
                        additional Business Opportunity Specialists, if 
                        any, that will be needed to meet the 
                        anticipated demand for the program.
                            ``(iii) The findings and conclusions of the 
                        Director shall be reported to the Assistant 
                        Administrator for Minority Small Business and 
                        Capital Ownership Development by September 30 
                        of each year.
                            ``(iv) Based on such report and such 
                        additional data as may be relevant, the 
                        Assistant Administrator shall, by October 31 of 
                        each year, issue rules as that term is defined 
                        in section 551(4) of title 5, United States 
                        Code, applicable to such fiscal year that--
                                    ``(I) establish priorities for the 
                                solicitation of program applications 
                                from underrepresented regions and 
                                industry categories;
                                    ``(II) assign staffing levels and 
                                allocate other program resources as 
                                necessary to meet program needs; and
                                    ``(III) establish priorities in the 
                                processing and admission of new program 
                                participants as may be necessary to 
                                achieve an equitable geographic 
                                distribution of concerns and a 
                                distribution of concerns across all 
                                industry categories in proportions 
                                needed to increase significantly 
                                contract awards to small business 
                                concerns owned and controlled by 
                                socially and economically disadvantaged 
                                individuals. When considering such 
                                increase the Administrator shall give 
                                due consideration to those industrial 
                                categories where Federal purchases have 
                                been substantial but where the 
                                participation rate of such concerns has 
                                been limited.
            ``(23) Stages of program participation.--
                    ``(A) In general.--The Capital ownership 
                Development Program established by this subsection 
                shall have a developmental stage and transitional 
                stage.
                    ``(B) Developmental stage.--The developmental stage 
                of program participation shall be designed to assist 
                the concern in its effort to overcome its economic 
                disadvantage by providing such assistance as may be 
                necessary and appropriate to access its markets and to 
                strengthen its financial and managerial skills.
                    ``(C) Transitional stage.--The transitional stage 
                of program participation shall be designed to overcome, 
insofar as practicable, the remaining elements of economic disadvantage 
and to prepare such concern for graduation from the program.
            ``(24) Types of assistance provided by the administrator.--
        The Administrator shall make available during the developmental 
        and transitional stages the following assistance:
                    ``(A) Contract support pursuant to this section.
                    ``(B) Financial assistance pursuant to section 
                7(a)(20).
                    ``(C) A maximum of two exemptions from the 
                requirements of section 1(a) of the Act entitled `An 
                Act to provide conditions for the purchase of supplies 
                and the making of contracts by the United States, and 
                for other purposes', approved June 30, 1936 (popularly 
                known as the `Walsh-Healey Act'; 41 U.S.C. 35(a)), 
                which exemptions shall apply only to contracts awarded 
                pursuant to this section and shall only be used to 
                allow for contingent agreements by a small business 
                concern to acquire the machinery, equipment, 
                facilities, or labor needed to perform such contracts. 
                No exemption shall be made pursuant to this 
                subparagraph if the contract to which it pertains has 
                an anticipated value in excess of $10,000,000.
                    ``(D)(i) Financial assistance whereby the 
                Administrator may purchase in whole or in part, and on 
                behalf of such concerns, skills training or upgrading 
                for employees or potential employees of such concerns.
                    ``(ii) For purposes of this subparagraph the term 
                `training provider' shall mean an institution of higher 
                education, a community or vocational college, or an 
                institution eligible to provide skills training or 
                upgrading under the Job Training Partnership Act or 
                title I of the Workforce Investment Act of 1998.
                    ``(iii) Assistance may be made by direct payment to 
                the training provider or by reimbursing the program 
                participant or the participant's employee, if such 
                reimbursement is found to be reasonable and 
                appropriate.
                    ``(iv) The Administrator shall, in consultation 
                with the Secretary of Labor, promulgate rules and 
                regulations to implement this subparagraph that 
                establish acceptable training and upgrading performance 
                standards and provide for such monitoring or audit 
                requirements as may be necessary to ensure the 
                integrity of the training effort.
                    ``(v) No financial assistance shall be granted 
                under this subparagraph unless the Administrator 
                determines each of the following:
                            ``(I) The program participant has 
                        documented that it has first explored the use 
                        of existing cost-free or cost-subsidized 
                        training programs offered by public and private 
                        sector agencies working with programs of 
                        employment and training and economic 
                        development.
                            ``(II) No more than 5 employees or 
                        potential employees of the program participant 
                        are recipients of any benefits under this 
                        subparagraph at any one time.
                            ``(III) No more than $2,500 shall be made 
                        available for any one employee or potential 
                        employee.
                            ``(IV) The length of training or upgrading 
                        financed by this subparagraph shall be no less 
                        than 1 month nor more than 6 months.
                            ``(V) The program participant has given 
                        adequate assurance it will employ the trainee 
                        or upgraded employee for at least 6 months 
                        after the training or upgrading financed by 
                        this subparagraph has been completed and each 
                        trainee or upgraded employee has provided a 
                        similar assurance to remain within the employ 
                        of such concern for such period.
                                    ``(aa) If such concern, trainee, or 
                                upgraded employee breaches this 
                                agreement, the Administrator shall be 
                                entitled to obtain from the violating 
                                party the repayment of all funds 
                                expended on behalf of the violating 
                                party.
                                    ``(bb) Such repayment shall be made 
                                to the Administrator together with such 
                                interest and costs of collection as may 
                                be reasonable.
                                    ``(cc) The violating party shall be 
                                barred from receiving any further 
                                assistance under this subparagraph.
                            ``(VI) The training to be financed may take 
                        place either at such concern's facilities or at 
                        those of the training provider.
                            ``(VII) The program participant will 
                        maintain such records as the Administrator 
                        deems appropriate to ensure that the provisions 
                        of this paragraph and any other applicable law 
                        have not been violated.
                    ``(E)(i) The transfer of technology or surplus 
                property owned by the United States to such a concern.
                    ``(ii) Activities designed to effect such transfer 
                shall be developed in cooperation with the heads of 
                Federal agencies and shall include the transfer by 
                grant, license, or sale of such technology or property 
                to such a concern. Such property may be transferred to 
                program participants on a priority basis.
                    ``(iii) Technology or property transferred under 
                this subparagraph shall be used by the concern during 
                the normal conduct of its business operation and shall 
                not be sold or transferred to any other party (other 
                than the Government) during such concern's term of 
                participation in the program and for one year 
                thereafter.
                    ``(F) Training assistance whereby the Administrator 
                shall conduct training sessions to assist individuals 
                and enterprises eligible to receive contracts under 
this section in the development of business principles and strategies 
to enhance their ability to successfully compete for contracts in the 
marketplace.
                    ``(G) Joint ventures, leader-follow arrangements, 
                and teaming agreements between the program participant 
                and other program participants and other small business 
                concerns with respect to contracting opportunities. 
                Such activities shall be undertaken on the basis of 
                programs developed by the procuring agency with the 
                assistance of the Administration.
                    ``(H) Transitional management business planning 
                training and technical assistance.
            ``(25) Transitional stage assistance.--Program participants 
        in the developmental stage of program participation shall be 
        eligible for the assistance provided by subparagraphs (A), (B), 
        (C), (D), (E), (F), and (G) of paragraph (24).
            ``(26) Developmental stage assistance.--Program 
        Participants in the transitional stage of Program participation 
        shall be eligible for the assistance provided by subparagraphs 
        (A), (B), (F), (G), and (H) of paragraph (24).
            ``(27) Duration of stages.--Subject to the provisions of 
        paragraph (21)(A), a program participant may receive 
        developmental assistance under this subsection and contracts 
        under this subsection for a total period of not longer than 9 
        years, measured from the date of its certification under this 
        subsection, of which--
                    ``(A) no more than 5 years may be spent in the 
                developmental stage of program participation; and
                    ``(B) no more than 4 years may be spent in the 
                transitional stage of program participation.
            ``(28) Data collection.--
                    ``(A) In general.--The Administrator shall develop 
                and implement a process for the systematic collection 
                of data on the operations of the program established 
                pursuant to this section.
                    ``(B) Report.--Not later than April 30 of each 
                year, the Administrator shall submit a report to the 
                Committee on Small Business and Entrepreneurship of the 
                Senate and the Committee on Small Business of the House 
                of Representatives on the program that shall include 
                the following:
                            ``(i) A description and estimate of the 
                        benefits and costs that have accrued to the 
                        economy and the Government in the immediately 
                        preceding fiscal year due to the operations of 
                        those business concerns that were performing 
                        contracts awarded pursuant to this section.
                            ``(ii) A compilation and evaluation of 
                        those business concerns that have exited the 
                        program during the immediately preceding three 
                        fiscal years. Such compilation and evaluation 
                        shall detail the number of concerns actively 
                        engaged in business operations, those that have 
                        ceased or substantially curtailed such 
                        operations, including the reasons for such 
                        actions, and those concerns that have been 
                        acquired by other firms or organizations owned 
                        and controlled by other than socially and 
                        economically disadvantaged individuals.
                            ``(iii) For those businesses that have 
                        continued operations after they exited from the 
                        program, the Administrator shall also 
                        separately detail the benefits and costs that 
                        have accrued to the economy during the 
                        immediately preceding fiscal year due to the 
                        operations of such concerns.
                            ``(iv) A listing of all participants in the 
                        program during the preceding fiscal year 
                        identifying, by State and by region, for each 
                        firm: the name of the concern, the race or 
                        ethnicity, and gender of the disadvantaged 
                        owners, the dollar value of all contracts 
                        received in the preceding year, the dollar 
                        amount of advance payments received by each 
                        concern pursuant to contracts awarded under 
                        this section, and a description including (if 
                        appropriate) an estimate of the dollar value of 
                        all benefits received pursuant to paragraphs 
                        (25) and (26) and section 7(a)(20) during such 
                        year.
                            ``(v) The total dollar value of contracts 
                        and options awarded during the preceding fiscal 
                        year pursuant to this section and such amount 
                        expressed as a percentage of total sales of--
                                    ``(I) all firms participating in 
                                the program during such year; and
                                    ``(II) firms in each of the nine 
                                years of program participation.
                            ``(vi) A description of such additional 
                        resources or program authorities as may be 
                        required to provide the types of services 
                        needed over the next 2-year period to service 
                        the expected portfolio of firms certified 
                        pursuant to this section.
                            ``(vii) The total dollar value of contracts 
                        and options awarded pursuant to this section, 
                        at such dollar increments as the Administrator 
                        deems appropriate, for each 6 digit North 
                        American Industrial Classification System code 
                        under which such contracts and options were 
                        classified.
    ``(b) Management and Technical Assistance.--
            ``(1) Contracts for assistance.--The Administrator shall be 
        required to enter into contracts with business concerns, not-
        for-profit entities, and other persons capable of providing 
        management and technical assistance, as may be necessary, to 
        participants in the program established in subsection (a), to 
        firms described in paragraph (5) or paragraph (6) of that 
        subsection but are not participants in the program established 
        pursuant to that subsection, and to small business concerns 
        which have loans guaranteed pursuant to section 7(i).
            ``(2) Selection of contractors.--The Administrator shall 
        select contractors based on the experience in advising small 
        business concerns on financial and business operations, 
        including but not limited to comprehensive business plans, and 
        other functions needed to preserve and expand small businesses 
        eligible for assistance under paragraph (1). To the extent 
        practical, the Administrator shall select, as contractors, 
        small business concerns but the primary evaluation criteria 
        shall be the technical ability of the contractor to provide the 
        services set forth in this subsection.
            ``(3) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $6,000,000 for each of fiscal years 2004 and 2005. Such sums 
        shall remain available until expended.
    ``(c) Coordination With Other Agencies.--The Administrator shall 
take such steps as may be necessary and appropriate, in coordination 
and cooperation with the heads of Federal agencies to insure that 
contracts, subcontracts, and deposits made by the Federal Government or 
with programs aided with Federal funds are placed in such way as to 
further the purposes of subsection (a) of this section and section 
7(i).''.
    (b) Commercial Marketing.--Section 8(d)(10) of the Small Business 
Act (15 U.S.C. 637(d)(10)) is amended to read as follows:
            ``(10) In the case of contracts within the provisions of 
        paragraphs (4), (5), and (6), the Administrator is authorized 
        to--
                    ``(A) assign at least one commercial marketing 
                representative per state whose primary responsibilities 
                shall be to--
                            ``(i) assist Federal agencies and 
                        businesses in complying with their 
                        responsibilities under the provisions of this 
                        subsection, including the formulation of 
                        subcontracting plans pursuant to paragraph (4);
                            ``(ii) review any solicitation for any 
                        contract to be let pursuant to paragraphs (4) 
                        and (5) to determine the maximum practicable 
                        opportunity for small business concerns, small 
                        manufacturers, small business concerns owned 
                        and controlled by veterans, small business 
                        concerns owned and controlled by service-
                        disabled veterans, qualified HUBZone small 
                        business concerns, small business concerns 
                        owned and controlled by socially and 
                        economically disadvantaged individuals, small 
                        business concerns eligible for participation 
                        under section 8(a), and small business concerns 
                        owned and controlled by women to participate as 
                        subcontractors in the performance of any 
                        contract resulting from any solicitation, and 
                        to submit its findings, which shall be advisory 
                        in nature, to the appropriate Federal agency;
                            ``(iii) evaluate compliance with 
                        subcontracting plans, either on a contract-by-
                        contract basis, or in the case of contractors 
                        having multiple contracts, on an aggregate 
                        basis including recommendations to the 
                        contracting officer for an assessment of 
                        liquidated damages;
                            ``(iv) work directly with small businesses 
                        to counsel them on marketing and subcontracting 
                        to large business prime contractors that have 
                        contracts with the Federal Government;
                            ``(v) identify large business buyers of 
                        small business products and services;
                            ``(vi) assist small businesses in receiving 
                        timely payment from large business prime 
                        contractors that have contracts with the 
                        Federal Government; and
                            ``(vii) perform program reviews of the 
                        small business outreach programs and 
                        subcontracting programs of large businesses.
                    ``(B) Not later than September 30, 2004, each state 
                shall be assigned at least one commercial marketing 
                representative, authorized by paragraph 10(A) of this 
                section, who must be physically located in each state.
                    ``(C) Not later than 120 days after enactment of 
                this Act, the Administrator shall, after the 
                opportunity for notice and comment, promulgate 
                regulations governing the Administrator's review of 
                subcontracting plans including the standards for 
                determining good faith effort of compliance with the 
                subcontracting plans.''.
    (c) Women-Owned Small Business Concerns; Authorities of 
Administrator.--Subsections (m) and (n) of section 8 of the Small 
Business Act (15 U.S.C. 637 (m) and (n)) are amended to read as 
follows:
    ``(m) Procurement Program for Women-Owned Small Business 
Concerns.--
            ``(1) Definitions.--In this subsection, the following 
        definitions apply:
                    ``(A) Small business concern owned and controlled 
                by women.--The term `small business concern owned and 
                controlled by women' has the meaning given such term in 
                section 3(n), except that ownership shall be determined 
                without regard to any community property law.
            ``(2) Authority to restrict competition.--In accordance 
        with this subsection, a contracting officer may restrict 
        competition for any contract for the procurement of goods or 
        services by the Federal Government to small business concerns 
        owned and controlled by women, if--
                    ``(A) each of the concerns is not less than 51 
                percent owned by 1 or more women who are economically 
                disadvantaged (and such ownership is determined without 
                regard to any community property law);
                    ``(B) the contracting officer has a reasonable 
                expectation that 2 or more small business concerns 
                owned and controlled by women will submit offers for 
                the contract;
                    ``(C) the contract is for the procurement of goods 
                or services with respect to an industry identified by 
the Administrator pursuant to paragraph (4);
                    ``(D) the anticipated award price of the contract 
                (including options) does not exceed--
                            ``(i) $5,000,000, in the case of a contract 
                        assigned an industrial classification code for 
                        manufacturing; or
                            ``(ii) $3,000,000, in the case of all other 
                        contracts;
                    ``(E) in the estimation of the contracting officer, 
                the contract award can be made at a fair and reasonable 
                price; and
                    ``(F) each of the concerns--
                            ``(i) is certified by a Federal agency or a 
                        State government as a small business concern 
                        owned and controlled by women;
                            ``(ii) is certified by a national 
                        certifying entity approved by the Administrator 
                        as a small business concern owned and 
                        controlled by women; or
                            ``(iii) certifies to the contracting 
                        officer that it is a small business concern 
                        owned and controlled by women and provides 
                        adequate documentation in accordance with 
                        standards established by the Administration to 
                        support such certification.
            ``(3) Waiver.--With respect to a small business concern 
        owned and controlled by women, the Administrator may waive 
        subparagraph (2)(A) if the Administrator determines that the 
        concern is in an industry in which small business concerns 
        owned and controlled by women are substantially 
        underrepresented.
            ``(4) Identification of industries.--
                    ``(A) In general.--The Administrator shall conduct 
                a study to identify industries in which small business 
                concerns owned and controlled by women are 
                underrepresented with respect to Federal procurement 
                contracting.
                    ``(B) Determination by contracting officer.--Until 
                such time as the Administrator conducts such study, the 
                determination as to whether an industry is under-
                represented by small business concerns owned and 
                controlled by women shall be made by the contracting 
                officer.
                    ``(C) Deadline.--Not later than 90 days after the 
                date of the enactment of this subparagraph the 
                Administrator shall--
                            ``(i) ensure the completion of the study 
                        described in this paragraph;
                            ``(ii) approve national certifying entities 
                        for the purposes of paragraph (2)(F)(ii); and
                            ``(iii) make determinations in accordance 
                        with paragraph (3).
            ``(5) Enforcement; penalties.--
                    ``(A) Verification of eligibility.--In carrying out 
                this subsection, the Administrator shall use existing 
                procedures established by the Office of Hearings and 
                Appeals relating to--
                            ``(i) the filing, investigation, and 
                        disposition by the Administrator of any 
                        challenge to the eligibility of a small 
                        business concern to receive assistance under 
                        this subsection (including a challenge, filed 
                        by an interested party, relating to the 
                        veracity of a certification made or information 
                        provided to the Administration by a small 
                        business concern under paragraph (2)(F)); and
                            ``(ii) verification by the Administrator of 
                        the accuracy of any certification made or 
                        information provided to the Administration by a 
                        small business concern under paragraph (2)(F).
                    ``(B) Examinations.--The procedures established 
                under subparagraph (A) may provide for program 
                examinations (including random program examinations) by 
                the Administrator of any small business concern making 
                a certification or providing information to the 
                Administrator under paragraph (2)(F).
                    ``(C) Penalties.--In addition to the penalties 
                described in section 16(d), any small business concern 
                that is determined by the Administrator to have 
                misrepresented the status of that concern as a small 
                business concern owned and controlled by women for 
                purposes of this subsection, shall be subject to--
                            ``(i) section 1001 of title 18, United 
                        States Code; and
                            ``(ii) sections 3729 through 3733 of title 
                        31, United States Code.
            ``(6) Provision of data.--Upon the request of the 
        Administrator, the head of any Federal department or agency 
        shall promptly provide to the Administrator such information as 
        the Administrator determines to be necessary to carry out this 
        subsection.
    ``(n) Authorities of Administrator.--In carrying out its functions 
under subsections 7(i), 8(a), and 8(b) of this Act the Administrator 
may do the following:
            ``(1) Utilize, with their consent, the services and 
        facilities of Federal agencies without reimbursement, and, with 
        the consent of any State or political subdivision of a State, 
        accept and utilize the services and facilities of such State or 
        subdivision without reimbursement.
            ``(2) Accept voluntary and uncompensated services, 
        notwithstanding section 1342 of title 31, United States Code.
            ``(3) Employ experts and consultants or organizations 
        pursuant to the authority in section 6(h). No individual may be 
        employed under the authority of this paragraph for more than 
        100 days in any fiscal year. No individual employed under this 
        paragraph may be compensated at rates in excess of the daily 
        equivalent of the highest rate payable under section 5332 of 
        title 5, United States Code, including traveltime. Individuals 
        employed under this paragraph may be allowed, while away from 
        their homes or regular places of business, travel expenses 
        (including per diem in lieu of subsistence) as authorized by 
        section 5703 of title 5, United States Code for persons in 
the Government service employed intermittently. Contracts for 
employment under this paragraph may be renewed annually.''.
    (d) Clerical Amendment.--Section 8 of the Small Business Act (15 
U.S.C. 637) is amended by striking ``Sec. 8.'' inserting the following:

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

SEC. 209. TRAINING AND ASSISTANCE.

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

``SEC. 12. TRAINING AND ASSISTANCE.

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

SEC. 210. CONTRACTING ASSISTANCE; ETC.

    (a) Certain Disagreements Submitted to OMB.--Section 15(a) of the 
Small Business Act (15 U.S.C. 644(a)) is amended by striking the 
sentence beginning ``Whenever the Administrator and the contracting 
procurement agency fail to agree,'' and inserting the following: 
``Whenever the Administration and the contracting procurement agency 
fail to agree, the Administrator shall submit the matter to the 
Director of the Office of Management and Budget, who shall render his 
decision regarding the matter not later than 10 days after receiving 
the matter. The Director may not delegate his duties under the 
preceding sentence except to a subordinate official within the Office 
of Management and Budget appointed by the President, by and with the 
advice and consent of the Senate.''.
    (b) Programs for Blind and Handicapped Individuals.--Section 15(c) 
of the Small Business Act (15 U.S.C. 644(c)) is amended to read as 
follows:
    ``(c) Programs for Blind and Handicapped Individuals.--
            ``(1) As used in this subsection:
                    ``(A) The term `Committee' means the Committee for 
                Purchase From People Who Are Blind or Severely Disabled 
                established under the first section of the Act entitled 
                `An Act to create a Committee on Purchases of Blind-
                made Products, and for other purposes', approved June 
                25, 1938 (41 U.S.C. 46).
                    ``(B) The term `public or private organization for 
                the disabled' means any organization--
                            ``(i) which is organized under the laws of 
                        the United States or of any State, operated in 
                        the interest of disabled individuals, the net 
                        income of which does not inure in whole or in 
                        part to the benefit of any shareholder or other 
                        individual;
                            ``(ii) which complies with any applicable 
                        occupational health and safety prescribed by 
                        the Secretary of Labor; and
                            ``(iii) which in the production of 
                        commodities and in the provision of services 
                        during any fiscal year employs disabled 
                        individuals for not less than 75 percent of the 
                        man-hours required for the production or 
                        provision of the commodities or services.
                    ``(C) The term `disabled person' means any 
                individual who--
                            ``(i) is a service-disabled veteran; or
                            ``(ii) has a disability (as defined in 
                        section 3 of the Americans with Disabilities 
                        Act of 1990) which limits such individual's 
                        selection of any type of employment for which 
                        such individual would otherwise be qualified or 
                        qualifiable.
            ``(2) The Administrator shall evaluate the placement of 
        products on the procurement list maintained by the Committee 
        pursuant to section 2 of the Act entitled `An Act to create a 
        Committee on Purchases of Blind made Products, and for other 
        purposes', approved June 25, 1938 (41 U.S.C. 47) to determine 
        the impact of such placement on for-profit small business 
        concerns.
            ``(3) The Administrator shall monitor and evaluate the 
        participation of public or private organizations for the 
        disabled in Federal procurement contracts and shall annually 
        report the results of such monitoring and evaluation to the 
        Committee on Small Business of the House of Representatives 
and the Committee on Small Business and Entrepreneurship of the Senate 
not later than March 31st of each year. This report shall include the 
impact of such participation on for-profit small business concerns.
            ``(4)(A) Not later than 10 days after the announcement of a 
        proposed award of a contract by an agency or department to a 
        public or private organization for the disabled, a for-profit 
        small business concern that has experienced or is likely to 
        experience severe economic injury as the result of the proposed 
        award may file an appeal of the proposed award with the 
        Administrator.
            ``(B) If such a concern files an appeal of a proposed award 
        under subparagraph (A) and the Administrator, after 
        consultation with the Executive Director of the Committee, 
        finds that the concern has experienced or is likely to 
        experience severe economic injury as the result of the proposed 
        award, not later than 30 days after the filing of the appeal, 
        the Administrator shall require each agency and department 
        having procurement powers to take such action as may be 
        appropriate to alleviate economic injury sustained or likely to 
        be sustained by the concern.
            ``(5) Each agency and department having procurement powers 
        shall report to the Office of Federal Procurement Policy each 
        time a contract subject to paragraph (2)(A) is entered into, 
        and shall include in its report the amount of the next highest 
        bid submitted by a for-profit small business concern. The 
        Office of Federal Procurement Policy shall collect data 
        reported under the preceding sentence through the Federal 
        procurement data system and shall report to the Administrator 
        who shall notify all such agencies and departments when the 
        maximum amount of awards authorized under paragraph (2)(A) has 
        been made during any fiscal year.
            ``(6) For the purposes of this subsection, a contract may 
        be awarded only if at least 75 percent of the direct labor 
        performed on each item being produced under the contract in the 
        sheltered workshop or performed in providing each type of 
        service under the contract by the sheltered workshop is 
        performed by disabled individuals.
            ``(7) Agencies awarding one or more contracts to such an 
        organization pursuant to the provisions of this subsection may 
        use multiyear contracts, if appropriate.''.
    (c) Minimum Solicitation Period.--Section 15(e) of the Small 
Business Act (15 U.S.C. 644(e)) is amended by adding at the end the 
following new paragraph:
            ``(5) Minimum solicitation period.--In the case of a 
        solicitation of offers for a bundled contract that is issued by 
        the head of an agency, small business concerns shall be allowed 
        to submit offers for a period of not less than 60 days 
        beginning on the date the solicitation is issued.''.
    (d) Procurement Goals.--Section 15(g) of the Small Business Act (15 
U.S.C. 644(g)) is amended to read as follows:
    ``(g)(1) The President shall before the close of each fiscal year 
establish new Government-wide procurement goals for the following 
fiscal year for procurement contracts awarded to small business 
concerns, small business concerns owned and controlled by service-
disabled veterans, qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and economically 
disadvantaged individuals, and small business concerns owned and 
controlled by women. The President shall not simply readopt the 
preceding years procurement goals. The Government-wide goal for 
participation by small business concerns shall be established at not 
less than 23 percent of the total value of all prime contract awards 
for each fiscal year. The Government-wide goal for participation by 
small business concerns owned and controlled by service-disabled 
veterans shall be established at not less than 3 percent of the total 
value of all prime contract and subcontract awards for each fiscal 
year. The Government-wide goal for participation by qualified HUBZone 
small business concerns shall be established at not less than 3 percent 
of the total value of all prime contract awards. The Government-wide 
goal for participation by small business concerns owned and controlled 
by socially and economically disadvantaged individuals shall be 
established at not less than 5 percent of the total value of all prime 
contract awards and not less than 5 percent of the total value of all 
subcontract awards for each fiscal year. The Government-wide goal for 
participation by small business concerns owned and controlled by women 
shall be established at not less than 5 percent of the total value of 
all prime contract awards and not less than 5 percent of the total 
value of all subcontract awards for each fiscal year. Notwithstanding 
the Government-wide goal, each agency shall have an annual goal that 
presents, for that agency, the maximum practicable opportunity for 
small business concerns, small manufacturers, small business concerns 
owned and controlled by service-disabled veterans, qualified HUBZone 
small business concerns, small business concerns owned and controlled 
by socially and economically disadvantaged individuals, small business 
concerns participating in the program established by section 8(a) of 
this Act, and small business concerns owned and controlled by women to 
participate in the performance of contracts let by such agency. For the 
purposes of the preceding sentence, each agency is prohibited from 
counting towards its procurement goal for small business concerns owned 
and controlled by socially and economically disadvantaged individuals 
any contract awarded to small business concerns participating in the 
program established pursuant to section 8(a) of this Act. The 
Administrator and the Administrator of the Office of Federal 
Procurement Policy shall, when exercising their authority pursuant to 
paragraph (2), insure that the cumulative annual prime contract goals 
for all agencies meet or exceed the annual Government-wide prime 
contract goal established by the President pursuant to this paragraph.
    ``(2) The head of each Federal agency shall, after consultation 
with the Administrator, establish goals for the participation by small 
business concerns, small manufacturers, small business concerns owned 
and controlled by service-disabled veterans, qualified HUBZone small 
business concerns, small business concerns owned and controlled by 
socially and economically disadvantaged individuals, small business 
concerns participating in the program established pursuant to section 
8(a) of this Act, and small business concerns owned and controlled by 
women in procurement contracts of such agency having a value of 
$25,000 or more. For the purposes of the preceding sentence, each 
agency is prohibited from counting towards its procurement goal for 
small business concerns owned and controlled by socially and 
economically disadvantaged individuals any contract awarded to small 
business concerns participating in the program established pursuant to 
section 8(a) of this Act. Goals established under this subsection shall 
be jointly established by the Administrator and the head of each 
Federal agency and shall realistically reflect the potential of small 
business concerns, small manufacturers, small business concerns owned 
and controlled by service-disabled veterans, qualified HUBZone small 
business concerns, small business concerns owned and controlled by 
socially and economically disadvantaged individuals, small business 
concerns participating in the program established pursuant to section 
8(a) of this Act, and small business concerns owned and controlled by 
women to perform subcontracts under such contracts. For the purposes of 
the preceding sentence, each agency is prohibited from counting towards 
its procurement goal for small business concerns owned and controlled 
by socially and economically disadvantaged individuals any contract 
awarded to small business concerns participating in the program 
established pursuant to section 8(a) of this Act. Whenever the 
Administrator and the head of any Federal agency fail to agree on 
established goals, the disagreement shall be submitted to the 
Administrator of the Office of Federal Procurement Policy for final 
determination. For the purpose of establishing goals under this 
subsection, the head of each Federal agency shall make consistent 
efforts to annually expand participation by small business concerns 
from each industry category in procurement contracts of the agency, 
including participation by small business concerns owned and controlled 
by service-disabled veterans, qualified HUBZone small business 
concerns, small business concerns owned and controlled by socially and 
economically disadvantaged individuals, small business concerns 
participating in the program established pursuant to section 8(a), 
small business concerns owned and controlled by women, and small 
manufacturers. For the purposes of the preceding sentence, each agency 
is prohibited from counting towards its procurement goal for small 
business concerns owned and controlled by socially and economically 
disadvantaged individuals any contract awarded to small business 
concerns participating in the program established pursuant to section 
8(a) of this Act. The head of each Federal agency, in attempting to 
attain such participation, shall consider--
            ``(A) contracts awarded as the result of unrestricted 
        competition; and
            ``(B) contracts awarded after competition restricted to 
        eligible small business concerns under this section and under 
        the program established under section 8(a).''.
    (e) Reports.--Section 15(h) of the Small Business Act (15 U.S.C. 
644(h)) is amended to read as follows:
    ``(h)(1) At the conclusion of each fiscal year, the head of each 
Federal agency shall report to the Administrator on the extent of 
participation by small business concerns, small manufacturers, small 
business concerns owned and controlled by veterans (including service-
disabled veterans), qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and economically 
disadvantaged individuals, small business concerns participating in the 
program established pursuant to section 8(a) of this Act, and small 
business concerns owned and controlled by women in procurement 
contracts of such agency. Such reports shall contain appropriate 
justifications for failure to meet the goals established under 
subsection (g) of this section. Additionally, such reports shall 
contain sufficient justification if goals established for the most 
recent fiscal year end were established lower than the same goals for 
the previous fiscal year.
    ``(2) The Administrator shall annually compile and analyze the 
reports submitted by the individual agencies pursuant to paragraph (1) 
and shall submit them to the President and the Congress. The 
Administrator's submission to the President shall include the 
following:
            ``(A) The Government-wide goals for participation by small 
        business concerns, small business concerns owned and controlled 
        by service-disabled veterans, qualified HUBZone small business 
        concerns, small business concerns owned and controlled by 
        socially and economically disadvantaged individuals, small 
        business concerns participating in the program established 
        pursuant to section 8(a) of this Act, and small business 
        concerns owned and controlled by women and the performance in 
        attaining such goals.
            ``(B) The goals in effect for each agency and the agency's 
        performance in attaining such goals.
            ``(C) An analysis of any failure to achieve the Government-
        wide goals or any individual agency goals and the actions 
        planned by such agency (and approved by the Administrator) to 
        achieve the goals in the succeeding fiscal year.
            ``(D) The number and dollar value of prime contracts 
        awarded to small business concerns, small manufacturers small 
        business concerns owned and controlled by service-disabled 
        veterans, qualified HUBZone small business concerns, small 
        business concerns owned and controlled by socially and 
        economically disadvantaged individuals, small business concerns 
        participating in the program established pursuant to section 
        8(a) of this Act, and small business concerns owned and 
        controlled by women. For each agency and on a government-wide 
        basis, number and dollar value of contracts issued through--
                    ``(i) noncompetitive negotiation;
                    ``(ii) competition restricted to small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals;
                    ``(iii) competition restricted to small business 
                concerns participating in the program established by 
                section 8(a) of this Act;
                    ``(iv) competition restricted to small business 
                concerns; and
                    ``(v) unrestricted competitions.
            ``(E) The number and dollar value of subcontracts awarded 
        to small business concerns, small manufacturers, small business 
        concerns owned and controlled by service-disabled veterans, 
        qualified HUBZone small business concerns, small business 
        concerns owned and controlled by socially and economically 
        disadvantaged individuals, small business concerns 
        participating in the program established pursuant to section 
8(a) of this Act, and small business concerns owned and controlled by 
women.
    ``(3) The President shall include the information required by 
paragraph (2) in each annual report to the Congress on the state of 
small business prepared pursuant to section 303(a) of the Small 
Business Economic Policy Act of 1980 (15 U.S.C. 631b(a)).
    ``(4) For the purpose of this subsection, the term `small 
disadvantaged business' means any small business concern that is 
certified as a `small disadvantaged business' by the Administrator.''.
    (f) Restricted Competition.--Section 15(j) of the Small Business 
Act (15 U.S.C. 644(j)) is amended to read as follows:
    ``(j)(1) Each contract for the purchase of goods and services that 
has an anticipated value greater than $2,500 but not greater than 
$1,000,000 shall be reserved exclusively for small business concerns 
unless the contracting officer is unable to obtain offers from two or 
more small business concerns that are competitive with market prices 
and are competitive with regard to the quality and delivery of the 
goods or services being purchased.
    ``(2) In carrying out paragraph (1), a contracting officer shall 
consider a responsive offer timely received from an eligible small 
business offeror.
    ``(3) Nothing in paragraph (1) shall be construed as precluding an 
award of a contract with a value not greater than $1,000,000 under the 
authority of section 8(a) of this Act, section 2323 of title 10, United 
States Code, section 712 of the Business Opportunity Development Reform 
Act of 1988 (Public Law 100-656; 15 U.S.C. 644 note), or section 7102 
of the Federal Acquisition Streamlining Act of 1994.''.
    (g) Assignment of Procurement Center Representatives.--Section 
15(l) of the Small Business Act (15 U.S.C. 644(l)) is amended to read 
as follows:
    ``(l)(1) The Administrator shall assign to each major procurement 
center a procurement center representative with such assistance as may 
be appropriate. The procurement center representative shall carry out 
the activities described in paragraph (2), and shall be an advocate for 
the breakout of items for procurement through full and open 
competition, whenever appropriate, while maintaining the integrity of 
the system in which such items are used, and an advocate for the use of 
full and open competition, whenever appropriate, for the procurement of 
supplies and services by such center. Any procurement center 
representative assigned under this subsection shall be in addition to 
the representative referred to in subsection (k)(6).
    ``(2) A procurement center representative is authorized to--
            ``(A) work directly with small businesses to counsel them 
        on the Federal market and contracting with the Federal 
        Government;
            ``(B) identify Federal agency buyers of small business 
        products and services;
            ``(C) attend any provisioning conference or similar 
        evaluation session during which determinations are made as to 
        whether requirements are to be procured through other than full 
        and open competition and make recommendations with respect to 
        such requirements to the members of such conference or session;
            ``(D) review, at any time, restrictions on competition 
        previously imposed on items through acquisition method coding 
        or similar procedures, and recommend to personnel of the 
        appropriate activity the prompt reevaluation of such 
        limitations;
            ``(E) review restrictions on competition arising out of 
        restrictions on the rights of the United States in technical 
        data, and, when appropriate, recommend that personnel of the 
        appropriate activity initiate a review of the validity of such 
        an asserted restriction;
            ``(F) obtain from any governmental source, and make 
        available to personnel of the appropriate activity, technical 
        data necessary for the preparation of a competitive 
        solicitation package for any item of supply or service 
        previously procured noncompetitively due to the unavailability 
        of such technical data;
            ``(G) have access to procurement records and other data of 
        the procurement center commensurate with the level of such 
        representative's approved security clearance classification; 
        and
            ``(H) receive unsolicited engineering proposals and, when 
        appropriate--
                    ``(i) either--
                            ``(I) conduct a value analysis of such 
                        proposal to determine whether such proposal, if 
                        adopted, will result in lower costs to the 
                        United States without substantially impeding 
                        legitimate acquisition objectives and forward 
                        to personnel of the appropriate activity 
                        recommendations with respect to such proposal; 
                        or
                            ``(II) forward such proposals without 
                        analysis to personnel of the activity 
                        responsible for reviewing such proposals and 
                        who shall furnish the breakout procurement 
                        center representative with information 
                        regarding the disposition of any such proposal; 
                        and
                    ``(ii) review the systems that account for the 
                acquisition and management of technical data within the 
                procurement center to assure that such systems provide 
                the maximum availability and access to data needed for 
                the preparation of offers to sell to the United States 
                those supplies to which such data pertain which 
                potential offerors are entitled to receive.
    ``(3) A procurement center representative is authorized to appeal 
the failure to act favorably on any recommendation made pursuant to 
paragraph (2). Such appeal shall be filed and processed in the same 
manner and subject to the same conditions and limitations as an appeal 
filed by the Administrator pursuant to subsection (a).
    ``(4) The Administrator shall assign and co-locate at least two 
small business technical advisers to each major procurement center in 
addition to such other advisers as may be authorized from time to time. 
The sole duties of such advisers shall be to assist the procurement 
center representative for the center to which such advisers are 
assigned in carrying out the functions described in paragraph (2) and 
the representatives referred to in subsection (k)(6).
    ``(5)(A) The procurement center representatives and technical 
advisers assigned pursuant to this subsection shall be--
            ``(i) full-time employees of the Administration; and
            ``(ii) fully qualified, technically trained, and familiar 
        with the supplies and services procured by the major 
        procurement center to which they are assigned.
    ``(B) In addition to the requirements of subparagraph (A), each 
procurement center representative, and at least one technical adviser 
assigned to such representative, shall be an accredited engineer.
    ``(C) The Administrator shall establish personnel positions for 
procurement representatives and advisers assigned pursuant to this 
subsection which are classified at a grade level of the General 
Schedule sufficient to attract and retain highly qualified personnel.
    ``(6) For purposes of this subsection, the term `major procurement 
center' means a procurement center that, in the opinion of the 
Administrator, purchases substantial dollar amounts of other than 
commercial items and which has the potential to incur significant 
savings as the result of the placement of a procurement center 
representative.
    ``(7)(A) At such times as the Administrator deems appropriate, the 
procurement center representative shall conduct familiarization 
sessions for contracting officers and other appropriate personnel of 
the procurement center to which such representative is assigned. Such 
sessions shall acquaint the participants with the provisions of this 
subsection and shall instruct them in methods designed to further the 
purposes of such subsection.
    ``(B) The procurement center representative shall prepare and 
personally deliver an annual briefing and report to the head of the 
procurement center to which such representative is assigned. Such 
briefing and report shall detail the past and planned activities of the 
representative and shall contain such recommendations for improvement 
in the operation of the center as may be appropriate. The head of such 
center shall personally receive such briefing and report and shall, 
within sixty calendar days after receipt, respond, in writing, to each 
recommendation made by such representative.''.
    (h) Other Duties of Administrator.--Section 15 of the Small 
Business Act (15 U.S.C. 644) is amended by adding at the end the 
following new subsection:
    ``(q)(1) The Administrator shall obtain information as to methods 
and practices which Government prime contractors utilize in letting 
subcontracts and to take action to encourage the letting of 
subcontracts by prime contractors to small business concerns and small 
manufacturers at prices and on conditions and terms which are fair and 
equitable.
    ``(2) The Administrator shall determine within any industry the 
concerns, firms, persons, corporations, partnerships, cooperatives, or 
other business enterprises which are to be designated as small business 
concerns or small manufacturers for the purpose of effectuating the 
provisions of this Act. To carry out this purpose the Administrator, 
when requested to do so, shall issue in response to each such request 
an appropriate certificate certifying an individual concern as a small 
business concern or small manufacturer in accordance with criteria 
expressed in this Act. Any such certificate shall be subject to 
revocation when the concern covered thereby ceases to be a small 
business concern or small manufacturer. Offices of the Government 
having procurement or lending powers, or engaging in the disposal of 
Federal property or allocating materials or supplies, or promulgating 
regulations affecting the distribution of materials or supplies, shall 
accept as conclusive the Administration's determination as to which 
enterprises are to be designated as small business concerns or small 
manufacturers, as authorized and directed under this paragraph.
    ``(3)(A) The Administration shall certify to Government procurement 
officers, and officers engaged in the sale and disposal of Federal 
property, with respect to all elements of responsibility, including, 
but not limited to, capability, competency, capacity, credit, 
integrity, perseverance, and tenacity, of any small business concern or 
group of such concerns to receive and perform a specific Government 
contract. A Government procurement officer or an officer engaged in the 
sale and disposal of Federal property may not, for any reason specified 
in the preceding sentence, preclude any small business concern or group 
of such concerns from being awarded such contract without referring the 
matter for a final disposition to the Administration.
    ``(B) If a Government procurement officer finds that an otherwise 
qualified small business concern may be ineligible due to the 
provisions of section 35(a) of the Act entitled `An Act to provide 
conditions for the purchase of supplies and the making of contracts by 
the United States, and for other purposes', approved June 30, 1936 
(popularly known as the `Walsh-Healey Act'; 41 U.S.C. 35(a)), he shall 
notify the Administration in writing of such finding. The 
Administration shall review such finding and shall either dismiss it 
and certify the small business concern to be an eligible Government 
contractor for a specific Government contract or if it concurs in the 
finding, forward the matter to the Secretary of Labor for final 
disposition, in which case the Administration may certify the small 
business concern only if the Secretary of Labor finds the small 
business concern not to be in violation.
    ``(C) In any case in which a small business concern or group of 
such concerns has been certified by the Administrator pursuant to (A) 
or (B) to be a responsible or eligible Government contractor as to a 
specific Government contract, the officers of the Government having 
procurement or property disposal powers are directed to accept such 
certification as conclusive, and shall let such Government contract to 
such concern or group of concerns without requiring it to meet any 
other requirement of responsibility or eligibility. Notwithstanding the 
first sentence of this subparagraph, the Administrator may not 
establish an exemption from referral or notification or refuse to 
accept a referral or notification from a Government procurement officer 
made pursuant to subparagraph (A) or (B) of this paragraph, but nothing 
in this paragraph shall require the processing of an application for 
certification if the small business concern to which the referral 
pertains declines to have the application processed.
    ``(4) The Administrator shall obtain from any Federal department, 
establishment, or agency engaged in procurement or in the financing of 
procurement or production such reports concerning the letting of 
contracts and subcontracts and the making of loans to business concerns 
as it may deem pertinent in carrying out its functions under this Act.
    ``(5) The Administrator shall obtain from any Federal department, 
establishment, or agency engaged in the disposal of Federal property 
such reports concerning the solicitation of bids, time of sale, or 
otherwise as it may deem pertinent in carrying out its functions under 
this Act.
    ``(6) The Administrator shall obtain from suppliers of materials 
information pertaining to the method of filling orders and the bases 
for allocating their supply, whenever it appears that any small 
business is unable to obtain materials from its normal sources.
    ``(7) The Administrator shall make studies and recommendations to 
the appropriate Federal agencies to insure that a fair proportion of 
the total purchases and contracts for property and services for the 
Government be placed with small-business concerns, to insure that a 
fair proportion of Government contracts for research and development be 
placed with small-business concerns, to insure that a fair proportion 
of the total sales of Government property be made to small-business 
concerns, and to insure a fair and equitable share of materials, 
supplies, and equipment to small-business concerns.
    ``(8) The Administrator shall consult and cooperate with all 
Government agencies for the purpose of insuring that small-business 
concerns shall receive fair and reasonable treatment from such 
agencies.''.
    (i) Priority of Small Business Procurement Preferences.--Section 15 
of the Small Business Act (15 U.S.C. 644) is further amended by adding 
at the end the following new subsection:
    ``(r) Priority of Small Business Procurement Preferences.--
            ``(1) In general.--A contracting officer may not make a 
        procurement from a source on the basis of a preference provided 
        under any provision of this Act referred to in paragraph (2) 
        unless the contracting officer has determined that such 
        procurement cannot be made on the basis of a preference 
        provided under another provision of this Act with a higher 
        priority under such subsection.
            ``(2) Order of priority.--For purposes of this subsection, 
        the following provisions of this Act are listed in order of 
        priority from highest to lowest:
                    ``(A) Section 8(a).
                    ``(B) Section 31(b)(2)(B).
                    ``(C) Section 31(b)(2)(A).
                    ``(D) Section 8(m).
            ``(3) Priority of certain other procurement preferences.--A 
        procurement may not be made from a source on the basis of a 
        preference provided under any provision of this Act referred to 
        in paragraph (2) if the procurement would otherwise by made 
        from a different source under section 4124 or 4125 of title 18, 
        United States Code, or the Act entitled `An Act to create a 
        Committee on Purchases of Blind made Products, and for other 
        purposes', approved June 25, 1938 (41 U.S.C. 47).''.
    (j) Procurement Program for Very Small Business Concerns.--Section 
15 of the Small Business Act (15 U.S.C. 644) is further amended by 
adding at the end the following new subsection:
    ``(s) Procurement Program for Very Small Business Concerns.--
            ``(1) Establishment.--The Administrator shall establish and 
        carry out a program in accordance with the requirements of this 
        subsection to provide improved access to Federal contract 
        opportunities for very small business concerns.
            ``(2) Procurement contracts.--
                    ``(A) Identification of contracts.--The 
                Administrator shall identify procurement contracts of 
                Federal agencies for award under the program.
                    ``(B) Contract awards.--Under the program 
                established pursuant to this subsection, the award of a 
                procurement contract of a Federal agency identified by 
                the Administrator pursuant to subparagraph (A) shall be 
                made by the agency to a very small business concern 
                selected, and determined to be responsible, by the 
                agency.
                    ``(C) Competition.--All contract opportunities 
                offered for award under the program shall be awarded on 
                the basis of competition among very small business 
                concerns. A contracting officer may rely in good faith 
                on a written certification that a small business 
                concern is a very small business concern.
            ``(3) Financial assistance.--In order to assist very small 
        business concerns receiving contract awards under the program, 
        the Administrator shall establish a preauthorization program 
        for such concerns for the purpose of receiving financial 
        assistance under section 7(a).
            ``(4) Very small business concern.--For purposes of this 
        subsection, the term `very small business concern' means a 
        small business concern that has not more than 15 employees 
        and--
                    ``(A) in the case of a small manufacturer, annual 
                gross receipts of not more than $2,000,000; or
                    ``(B) in any other case, annual gross receipts of 
                not more than $500,000.
            ``(5) Regulations.--The Administrator shall--
                    ``(A) issue proposed regulations to carry out this 
                subsection not later than 180 days after the date of 
                enactment of this subsection; and
                    ``(B) issue final regulations to carry out this 
                subsection not later than 270 days after the date of 
                enactment of this subsection.''.
    (k) Other Amendments to Section 15.--
            (1) Section 15(e)(1) of the Small Business Act (15 U.S.C. 
        644(e)(1)) is amended by inserting ``in the following order'' 
        after ``concerns''.
            (2) Section 15(e)(4) of the Small Business Act (15 U.S.C. 
        644(e)(4)) is amended by striking ``bundled''.
            (3) Section 15(k)(9) of the Small Business Act (15 U.S.C. 
        644(k)(9)) is amended by striking ``Administration'' and 
        inserting ``Administrator''.
            (4) Section 15(p)(4)(A) of the Small Business Act (15 
        U.S.C. 644(p)(4)(A)) is amended by striking ``Administration'' 
        and inserting ``Administrator''.

SEC. 211. AUTHORIZATION OF APPROPRIATIONS; ETC.

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

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

    ``(a)(1) For fiscal year 2004 and each fiscal year thereafter, 
there are authorized to be appropriated such sums as may be necessary 
and appropriate, to remain available until expended, and to be 
available solely--
            ``(A) to carry out the Small Business Development Center 
        Program under section 21, but not to exceed the annual funding 
        level, as specified in section 21(j)(7);
            ``(B) to pay the expenses of the National Small Business 
        Development Center Advisory Board, as provided in section 
        21(m)(1);
            ``(C) to pay the expenses of the information sharing 
        system, as provided in section 21(o);
            ``(D) to pay the expenses of the association referred to in 
        section 21(k) for conducting the certification program, as 
        provided in section 21(l); and
            ``(E) to pay the expenses of the Administration, including 
        salaries of examiners, for conducting examinations as part of 
        the accreditation program conducted by the association referred 
        to in section 21(l).
    ``(2)(A) Notwithstanding any other provision of law, the 
Administrator shall enter into commitments for direct loans and to 
guarantee loans, debentures, payment of rentals, or other amounts due 
under qualified contracts and other types of financial assistance and 
enter into commitments to purchase debentures and preferred securities 
and to guarantee sureties against loss pursuant to programs under this 
Act and the Small Business Investment Act of 1958, in the full amounts 
provided by law subject only to--
            ``(i) the availability of qualified applications; and
            ``(ii) limitations contained in appropriations Acts.
    ``(B) Nothing in this paragraph authorizes the Administrator to 
reduce or limit its authority to enter into such commitments.
    ``(3) Subject to approval in appropriations Acts, amounts 
authorized for preferred securities, debentures or participating 
securities under title III of the Small Business Investment Act of 1958 
may be obligated in one fiscal year and disbursed or guaranteed in any 
1 or more of the 4 subsequent fiscal years.
    ``(4) The amount of deferred participation loans authorized in this 
section--
            ``(A) shall mean the net amount of the loan principal 
        guaranteed by the Administrator (and does not include any 
        amount which is not guaranteed); and
            ``(B) shall be available for a national program, except as 
        otherwise provided in section 7(a).
    ``(b) There are authorized to be appropriated to the Administration 
for each fiscal year such sums as may be necessary to carry out the 
provisions of this Act and the Small Business Investment Act of 1958. 
There also are hereby authorized to be appropriated such sums as may be 
necessary and appropriate for the carrying out of the provisions and 
purposes, including administrative expenses, of sections 7(b) of this 
Act; and there are authorized to be transferred from such sums as may 
be necessary and appropriate for such administrative expenses.
    ``(c) Fiscal Year 2004.--
            ``(1) Program levels.--The following program levels are 
        authorized for fiscal year 2004:
                    ``(A) For the programs authorized by this Act, the 
                Administrator is authorized to make--
                            ``(i) $70,000,000 in technical assistance 
                        grants, as provided in section 7(m); and
                            ``(ii) $100,000,000 in direct loans, as 
                        provided in section 7(m).
                    ``(B) For the programs authorized by this Act, the 
                Administrator is authorized to make $22,000,000,000 in 
                deferred participation loans and other financings. Of 
                such sum, the Administration is authorized to make--
                            ``(i) $16,000,000,000 in general business 
                        loans as provided in section 7(a);
                            ``(ii) $5,500,000,000 in financings as 
                        provided in section 7(a)(13) of this Act and 
                        section 504 of the Small Business Investment 
                        Act of 1958; and
                            ``(iii) $500,000,000 in loans as provided 
                        in section 7(a)(21).
                    ``(C) For the programs authorized by title III of 
                the Small Business Investment Act of 1958, the 
                Administrator is authorized to make--
                            ``(i) $5,000,000,000 in purchases of 
                        participating securities; and
                            ``(ii) $4,000,000,000 in guarantees of 
                        debentures.
                    ``(D) For the programs authorized by part B of 
                title IV of the Small Business Investment Act of 1958, 
                the Administration is authorized to enter into 
                guarantees not to exceed $6,000,000,000, of which not 
                more than 50 percent may be in bonds approved pursuant 
                to section 411(a)(3) of that Act.
                    ``(E) There is authorized to be appropriated 
                $7,000,000 to carry out section 12(b).
            ``(2) Additional authorizations.--
                    ``(A) There are authorized to be appropriated to 
                the Administration for fiscal year 2004 such sums as 
                may be necessary to carry out this Act not elsewhere 
                provided for, including administrative expenses and 
                necessary loan capital for disaster loans pursuant to 
                section 7(b), and to carry out the Small Business 
                Investment Act of 1958, including salaries and expenses 
                of the Administration.
                    ``(B) Notwithstanding any other provision of this 
                paragraph, for fiscal year 2004--
                            ``(i) no funds are authorized to be 
                        provided to carry out the loan program 
                        authorized by section 7(a)(21) except by 
                        transfer from another Federal department or 
                        agency to the Administration, unless the 
                        program level authorized for general business 
                        loans under paragraph (1)(B)(i) is fully 
                        funded; and
                            ``(ii) the Administrator may not approve 
                        loans on behalf of the Administration or on 
                        behalf of any other department or agency, by 
contract or otherwise, under terms and conditions other than those 
specifically authorized under this Act or the Small Business Investment 
Act of 1958, except that he may approve loans under section 7(a)(21) of 
this Act in gross amounts of not more than $1,250,000.
    ``(d) Fiscal Year 2005.--
            ``(1) Program levels.--The following program levels are 
        authorized for fiscal year 2005:
                    ``(A) For the programs authorized by this Act, the 
                Administrator is authorized to make--
                            ``(i) $$75,000,000 in technical assistance 
                        grants as provided in section 7(m); and
                            ``(ii) $105,000,000 in direct loans, as 
                        provided in section 7(m).
                    ``(B) For the programs authorized by this Act, the 
                Administrator is authorized to make $23,000,000,000 in 
                deferred participation loans and other financings. Of 
                such sum, the Administration is authorized to make--
                            ``(i) $16,500,000,000 in general business 
                        loans as provided in section 7(a);
                            ``(ii) $6,000,000,000 in financings as 
                        provided in section 7(a)(13) of this Act and 
                        section 504 of the Small Business Investment 
                        Act of 1958; and
                            ``(iii) $500,000,000 in loans as provided 
                        in section 7(a)(21).
                    ``(C) For the programs authorized by title III of 
                the Small Business Investment Act of 1958, the 
                Administration is authorized to make--
                            ``(i) $5,500,000,000 in purchases of 
                        participating securities; and
                            ``(ii) $4,500,000,000 in guarantees of 
                        debentures.
                    ``(D) For the programs authorized by part B of 
                title IV of the Small Business Investment Act of 1958, 
                the Administration is authorized to enter into 
                guarantees not to exceed $6,000,000,000, of which not 
                more than 50 percent may be in bonds approved pursuant 
                to section 411(a)(3) of that Act.
                    ``(E) There is authorized to be appropriated 
                $7,000,000 to carry out section 12(b).
            ``(2) Additional authorizations.--
                    ``(A) There are authorized to be appropriated to 
                the Administration for fiscal year 2005 such sums as 
                may be necessary to carry out this Act not elsewhere 
                provided for, including administrative expenses and 
                necessary loan capital for disaster loans pursuant to 
                section 7(b), and to carry out the Small Business 
                Investment Act of 1958, including salaries and expenses 
                of the Administration.
                    ``(B) Notwithstanding any other provision of this 
                paragraph, for fiscal year 2005--
                            ``(i) no funds are authorized to be 
                        provided to carry out the loan program 
                        authorized by section 7(a)(21) except by 
                        transfer from another Federal department or 
                        agency to the Administration, unless the 
                        program level authorized for general business 
                        loans under paragraph (1)(B)(i) is fully 
                        funded; and
                            ``(ii) the Administrator may not approve 
                        loans on behalf of the Administration or on 
                        behalf of any other department or agency, by 
                        contract or otherwise, under terms and 
                        conditions other than those specifically 
                        authorized under this Act or the Small Business 
                        Investment Act of 1958, except that he may 
                        approve loans under section 7(a)(21) of this 
                        Act in gross amounts of not more than 
                        $1,250,000.''.

SEC. 212. SMALL BUSINESS DEVELOPMENT CENTERS.

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

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

    ``(a) Establishment of Program.--The Administrator is authorized to 
make grants to any eligible applicant to establish the network of small 
business development centers proposed in the plan submitted by such 
applicant under subsection (b).
    ``(b) Selection of Grantees.--
            ``(1) Application.--An eligible applicant may apply for a 
        grant under subsection (a) by submitting to the Administrator 
        for approval a plan for establishing a network of small 
        business development centers.
            ``(2) Selection.--The Administrator shall select the 
        applicant that demonstrates it has the budgetary and other 
        resources to ensure that it will provide the most comprehensive 
        and coordinated assistance throughout the State. The 
        Administrator shall require the grantee to have a separate 
        budget for the purpose of operating its network of small 
        business development centers and to primarily utilize 
        institutions of higher education and women's business centers 
        operating pursuant to section 29 to provide for the operation 
        of the small business development centers. The Administrator 
        may approve, conditionally approve, or reject, a plan or 
        combination of plans submitted under this section. The 
        Administrator may not delegate the authority to select grantees 
        under this section except to the Deputy Administrator.
            ``(3) Limitation by state.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the Administrator shall select one 
                grantee from each State to serve the entire State.
                    ``(B) Unavailability exception.--The Administrator 
                may select 2 grantees to serve a State if no eligible 
                applicant submits an application to serve the entire 
                State. With respect to any such State, the 
                Administrator, at the end of the 2-year period 
                beginning on the date of the selection of such 
                grantees, shall seek applications under this subsection 
                for the purpose of replacing such grantees with a 
single grantee to serve the entire State.
                    ``(C) Historical exception.--Subparagraph (A) shall 
                not apply with respect to any State if multiple 
                grantees served such State during calendar year 2000 or 
                2001.
                    ``(D) Certain territories.--In the case that no 
                eligible applicant from a qualified territory applies 
                for a grant under this section, the Administrator may 
                select a grantee from any State to serve such qualified 
                territory. For purposes of the preceding sentence, the 
                term `qualified territory' means Guam, the United 
                States Virgin Islands, American Samoa, and the 
                Commonwealth of the Northern Mariana Islands.
            ``(4) Eligible applicant.--For purposes of this section, 
        the term `eligible applicant' means--
                    ``(A) any institution of higher education;
                    ``(B) any women's business center operating 
                pursuant to section 29; or
                    ``(C) in the case of an entity that was receiving a 
                grant under this section on December 31, 1990, any of 
                the following:
                            ``(i) Any State government or any agency 
                        thereof.
                            ``(ii) Any regional entity.
                            ``(iii) Any State-chartered development, 
                        credit or finance corporation.
                            ``(iv) Any entity formed by two or more of 
                        the entities described in this paragraph.
            ``(5) Requirement to seek applications.--If for any reason 
        a grant under this section is terminated or not renewed, the 
        Administrator shall seek applications from eligible applicants 
        with respect to such grant.
    ``(c) Grant Provisions.--
            ``(1) Agreement between grantee and administrator.--The 
        Administrator and the grantee shall jointly develop, negotiate, 
        and agree upon the terms and conditions of the grant. The 
        grantee shall also consult with the district office or offices 
        within the State to determine the special services and 
        assistance that are needed by the community or communities 
        served by the grantee's small business development centers.
            ``(2) Requirements.--Each grant shall--
                    ``(A) allow the grantee to serve portions of the 
                State by subcontracting the operation of a small 
                business development center to another entity, provided 
                that such small business development centers shall, to 
                the extent feasible, be located at institutions of 
                higher education or Women's Business Centers 
                established pursuant to section 29 of this Act;
                    ``(B) ensure that the grantee provides services as 
                close as possible to small business concerns by 
                providing extension services and utilizing satellite 
                facilities, including those of any subcontractor;
                    ``(C) ensure that the grantee provides facilities 
                and staff for each small business development center to 
                provide maximum accessibility and benefit to small 
                business concerns;
                    ``(D) ensure that the grantee is utilizing the 
                resources of other Federal agencies in providing the 
                services and assistance set forth in subsection (f); 
                and
                    ``(E) allow the grantee to enter into a contract 
                described in subsection (g)(2).
            ``(3) Prohibition on delegation to district offices.--The 
        Administrator shall not delegate any authority under paragraph 
        (1) to any employee of the Administration located in a regional 
        or district office.
            ``(4) Form of grant agreements.--For purposes of this 
        section, the term `grant' includes any contract or cooperative 
        agreement.
            ``(5) Prohibition on certain grant requirements.--The 
        Administrator shall not require, and a grant agreement shall 
        not include a requirement, that the grantee serve a particular 
        number of small business concerns with respect to loans under 
        section 7 of this Act or title V of the Small Business 
        Investment Act of 1958.
    ``(d) Term, Renewal, and Termination of Grants.--
            ``(1) Term of grants.--Each grant made under this section 
        shall be made on the basis of a calendar year or the Federal 
        fiscal year, as determined by the Administrator.
            ``(2) Automatic renewal.--Unless the Administrator for 
        cause terminates the grant or the grantee decides not to seek 
        renewal of the grant, the Administrator and the grantee shall 
        renew the agreement and may make mutually satisfactory 
        modifications to the agreement. The renewal shall take effect 
        on the date of termination of the old agreement.
            ``(3) Standards for termination.--After the opportunity for 
        notice and comment and consultation with the association 
        authorized by subsection (k), the Administrator shall 
        promulgate standards for determining when cause exists to 
        terminate a grantee. Such standards shall be codified in the 
        Code of Federal Regulations and shall take into account the 
        grantee's compliance with the standards set forth in the grant 
        agreement, any budgetary restrictions faced by the grantee, the 
        overall economic climate in the State served by the grantee, 
        and the accreditation of the grantee's small business 
        development centers (whether operated by the grantee or through 
        a subcontractor) under the program established pursuant to 
        subsection (l).
            ``(4) Notice of termination.--If the Administrator 
        determines that cause exists to terminate a grant agreement 
        under this section, the Administrator shall provide the grantee 
        with written notification setting forth the reasons therefor 
        and affording the applicant an opportunity for a hearing 
        pursuant to sections 554, 556, and 557 of title 5, United 
        States Code.
    ``(e) Management of Small Business Development Centers by 
Grantees.--
            ``(1) Appointment of grantee director.--Each Grantee shall 
        appoint a full-time director to oversee the operations of the 
        grant, the subcontractors to the grantee, and the small 
business development centers operated by the grantee. The grantee's 
director shall be responsible for accounting for any Federal funds used 
by the grantee to carry out the requirements of this section. The 
grantee shall have the sole discretion of selecting the director 
without requiring the approval of the Administrator, except that the 
Administrator may terminate the employment of the grantee's director if 
the Administrator determines that the grantee's director is unfit for 
the position because of a prior conviction for a felony.
            ``(2) Small business development center staff.--Each small 
        business development center shall have a staff, which shall be 
        full-time, part-time, or on a contract basis, as the grantee 
        may determine.
            ``(3) Expenditures.--Expenditures of funds by the grantee 
        shall not require the approval of the Administrator except that 
        the Administrator may prohibit an expenditure using Federal 
        funds if, after consultation with the General Counsel, the 
        Administrator determines that such expenditure violates Federal 
        law.
    ``(f) Services Provided by the Grantee Through Small Business 
Development Centers.--
            ``(1) In general.--Each grantee and its subcontractors 
        shall assist small business concerns in solving problems 
        concerning operations, manufacturing, engineering, technology 
        exchange and development, personnel administration, marketing, 
        sales, merchandising, finance, accounting, business strategy 
        development, and other disciplines required for small business 
        growth and expansion, innovation, increased productivity, and 
        management improvement, and for decreasing industry economic 
        concentrations. Small Business Development Centers shall, in 
        providing assistance to small manufacturers, coordinate such 
        assistance and utilize the resources of the Manufacturing 
        Extension Partnership of the National Institutes of Standards 
        and Technology.
            ``(2) Periodic modification.--Each grantee or its 
        subcontractors shall continue to upgrade and modify its 
        services, as needed, in order to meet the changing and evolving 
        needs of the small business community and those of small 
        manufacturers in particular.
            ``(3) Access to professionals.--Each grantee shall ensure 
        that small business development centers provide access to:
                    ``(A) Business analysts to counsel, assist, and 
                inform small business clients.
                    ``(B) Technology transfer agents to provide state 
                of art technology to small business concerns through 
                coupling with national and regional technology data 
                sources.
                    ``(C) Information specialists to assist in 
                providing information searches and referrals to small 
                business concerns.
                    ``(D) Part-time professional specialists to conduct 
                research or to provide counseling assistance whenever 
                the need arises.
                    ``(E) Laboratory and adaptive engineering 
                facilities.
            ``(4) Services.--Each grantee shall ensure that the 
        services provided by its network of small business development 
        centers include--
                    ``(A) furnishing one-to-one individual counseling 
                to small business concerns, including--
                            ``(i) working with individuals to increase 
                        awareness of basic credit practices and credit 
                        requirements;
                            ``(ii) working with individuals to develop 
                        business plans, financial packages, credit 
                        applications, and contract proposals;
                            ``(iii) working with the Administration to 
                        develop and provide informational tools for use 
                        in working with individuals on pre-business 
                        startup planning, existing business expansion, 
                        and export planning; and
                            ``(iv) working with individuals referred by 
                        the district offices of the Administration and 
                        Administration participating lenders;
                    ``(B) assisting in technology transfer, research 
                and development, including applied research, and 
                coupling from existing sources to small business 
                concerns, including--
                            ``(i) working to increase the access of 
                        small business concerns to the capabilities of 
                        automated flexible manufacturing systems;
                            ``(ii) working through existing networks 
                        and developing new networks for technology 
                        transfer that encourage partnership between the 
                        small business and academic communities to help 
                        commercialize university-based research and 
                        development and introduce university-based 
                        engineers and scientists to their counterparts 
                        in small technology-based firms and small 
                        manufacturers;
                            ``(iii) exploring the viability of 
                        developing shared production facilities, under 
                        appropriate circumstances; and
                            ``(iv) assisting small manufacturers in 
                        developing more efficient operations, including 
                        coordination of assistance with the 
                        Manufacturing Extension Partnership of the 
                        National Institutes of Standards and 
                        Technology;
                    ``(C) in cooperation with the Department of 
                Commerce, the entities providing services pursuant to 
                section 12(d), and other relevant Federal agencies, 
                actively assisting small business concerns in exporting 
                by identifying and developing potential export markets, 
                facilitating export transactions, developing linkages 
                between United States small business concerns and 
                prescreened foreign buyers, assisting small business 
                concerns to participate in international trade shows, 
                assisting small business concerns in obtaining export 
                financing, assisting small manufacturers in identifying 
                supply chain management opportunities, and facilitating 
                the development or reorientation of marketing and 
                production strategies; where appropriate, the grantee 
                and the Administrator may work in cooperation with the 
                State to establish a State international trade center 
                for these purposes;
                    ``(D) developing a program in conjunction with the 
                Export-Import Bank and local and regional 
                Administration offices that will enable Small Business 
                Development Centers to serve as an information network 
                and to assist small business applicants for Export-
                Import Bank financing programs, and otherwise identify 
                and help to make available export financing programs to 
                small business concerns;
                    ``(E) working closely with the small business 
                community, small business consultants, State agencies, 
                universities and other appropriate groups to make 
                translation services more readily available to small 
                business concerns doing business, or attempting to 
                develop business, in foreign markets;
                    ``(F) in providing assistance under this 
                subsection, grantees shall cooperate with the 
                Department of Commerce and other relevant Federal 
                agencies to increase access to available export market 
                information systems such as the CIMS system;
                    ``(G) assisting small business concerns to develop 
                and implement strategic business plans to timely and 
                effectively respond to the planned closure (or 
                reduction) of a Department of Defense facility within 
                the community, or actual or projected reductions in 
                such firms' business base due to the actual or 
                projected termination (or reduction) of a Department of 
                Defense program or a contract in support of such 
                program--
                            ``(i) by developing broad economic 
                        assessments of the adverse impacts of--
                                    ``(I) the closure (or reduction) of 
                                the Department of Defense facility on 
                                the small business concerns providing 
                                goods or services to such facility or 
                                to the military and civilian personnel 
                                currently stationed or working at such 
                                facility; and
                                    ``(II) the termination (or 
                                reduction) of a Department of Defense 
                                program (or contracts under such 
                                program) on the small business concerns 
                                participating in such program as a 
                                prime contractor, subcontractor or 
                                supplier at any tier;
                            ``(ii) by developing, in conjunction with 
                        appropriate Federal, State, and local 
                        governmental entities and other private sector 
                        organizations, the parameters of a transition 
                        adjustment program adaptable to the needs of 
                        individual small business concerns;
                            ``(iii) by conducting appropriate programs 
                        to inform the affected small business community 
                        regarding the anticipated adverse impacts 
                        identified under clause (i) and the economic 
                        adjustment assistance available to such firms; 
                        and
                            ``(iv) by assisting small business concerns 
                        to develop and implement an individualized 
                        transition business plan;
                    ``(H) maintaining current information concerning 
                Federal, State, and local regulations that affect small 
                business concerns and counsel small business concerns 
                on methods of compliance. Counseling and technology 
                development shall be provided when necessary to help 
                small business concerns find solutions for complying 
                with environmental, energy, health, safety, and other 
                Federal, State, and local regulations;
                    ``(I) coordinating and conducting research into 
                technical and general small business problems for which 
                there are no ready solutions;
                    ``(J) providing and maintaining a comprehensive 
                library that contains current information and 
                statistical data needed by small business concerns;
                    ``(K) maintaining a working relationship and open 
                communications with the financial and investment 
                communities, legal associations, local and regional 
                private consultants, and local and regional small 
                business groups and associations in order to help 
                address the various needs of the small business 
                community;
                    ``(L) conducting in-depth surveys for local small 
                business groups in order to develop general information 
                regarding the local economy and general small business 
                strengths and weaknesses in the locality;
                    ``(M) in cooperation with the Department of 
                Commerce, the Administration and other relevant Federal 
                agencies, actively assisting rural small business 
                concerns, including rural small manufacturers, in 
                exporting by identifying and developing potential 
                export markets for rural small business concerns, 
                facilitating export transactions for rural small 
                business concerns, developing linkages between United 
                States rural small business concerns and prescreened 
                foreign buyers, assisting rural small business concerns 
                to participate in international trade shows, assisting 
                rural small business concerns in obtaining export 
                financing and developing marketing and production 
                strategies;
                    ``(N) assisting rural small business concerns in 
                developing marketing and production strategies that 
                will enable them to better compete in the domestic 
                market by providing technical assistance needed by 
                rural small business concerns, by making available 
                managerial assistance to rural small business concerns, 
                and by providing information and assistance in 
                obtaining financing for business startups and 
                expansion;
                    ``(O) in conjunction with the United States Travel 
                and Tourism Administration, assist rural small business 
                concerns in developing the tourism potential of rural 
                communities by--
                            ``(i) identifying the cultural, historic, 
                        recreational, and scenic resources of such 
                        communities;
                            ``(ii) providing assistance to small 
                        business concerns in developing 
tourism marketing and promotion plans relating to tourism in rural 
areas; and
                            ``(iii) assisting small business concerns 
                        to obtain capital for starting or expanding 
                        businesses primarily serving tourists;
                    ``(P) maintaining lists of local and regional 
                private consultants to whom small business concerns can 
                be referred;
                    ``(Q) providing information to small business 
                concerns regarding compliance with regulatory 
                requirements;
                    ``(R) developing informational publications, 
                establishing resource centers of reference materials, 
                and distributing compliance guides published under 
                section 312(a) of the Small Business Regulatory 
                Enforcement Fairness Act of 1996;
                    ``(S) providing small business concerns with access 
                to a wide variety of export-related information by 
                establishing on-line computer linkages between small 
                business development centers and an international trade 
                data information network with ties to the Export 
                Assistance Center program;
                    ``(T) providing information and assistance to small 
                business concerns with respect to establishing drug-
                free workplace programs;
                    ``(U) in the case of a small business development 
                center located at an institution of higher learning, 
                hosting semi-annually a procurement conference to which 
                the grantee (or its subcontractors) invites small 
                business concerns, including small manufacturers, to 
                meet with the procurement officials of such institution 
                in an effort to increase procurement by such 
                institution from small business concerns and small 
                manufacturers;
                    ``(V) providing comprehensive plans (developed in 
                cooperation with relevant State and Federal agencies) 
                relating to the export potential of small business 
                concerns, including small manufacturers; and
                    ``(W) assisting small business concerns to develop 
                and implement strategic business plans to timely and 
                effectively respond to the closure of a large business 
                concern that has a significant adverse impact on the 
                community--
                            ``(i) by developing broad economic 
                        assessments of the adverse impacts of such 
                        closure;
                            ``(ii) by developing, in conjunction with 
                        appropriate Federal, State, and local 
                        governmental entities and other private sector 
                        organizations, the parameters of a transition 
                        adjustment program adaptable to the needs of 
                        individual small business concerns;
                            ``(iii) by conducting appropriate programs 
                        to inform the affected small business community 
                        regarding the adverse impacts identified under 
                        clause (i) and the economic adjustment 
                        assistance available to such firms;
                            ``(iv) by assisting small business concerns 
                        to develop and implement an individualized 
                        transition business plan; and
                            ``(v) by assisting unemployed individuals 
                        in establishing a small business concern.
    ``(g) Special Rules Relating to Small Business Development 
Centers.--
            ``(1) Services to out-of-state small business concerns.--
        The Administrator may allow a small business development center 
        to serve small business concerns located outside the State in 
        which such center is located (or, in the case of a State with 
        more than one grantee, outside the area served by the grantee) 
        to the extent such business concerns are located within close 
        geographical proximity to the small business development center 
        as determined by the Administrator.
            ``(2) Contracts with other agencies.--Subject to the 
        restrictions set forth in this paragraph, a grantee (or its 
        subcontractors, with the grantee's approval) may contract with 
        a Federal Department or agency to provide specific assistance 
        to small business concerns through its network of small 
        business development centers. Before bidding on a contract 
        described in this paragraph, a grantee shall receive approval 
        from the Administrator. Before granting approval, the 
        Administrator shall consider the subject and scope of the 
        contract and the extent to which performance of the contract 
        would provide assistance to small business and not impair the 
        performance of the grantee's obligations under this section. A 
        contract for assistance under this paragraph shall not count 
        toward the achievement of any contracting goal under section 
        15(g).
            ``(3) Small business vendors.--Each grantee shall ensure, 
        to the extent practicable, that its network of small business 
        development centers utilize and compensate qualified small 
        business vendors, including private management consultants, 
        private consulting engineers, and private testing laboratories, 
        to provide services under this section to small business 
        concerns. To the extent appropriate for the community served by 
        the small business development center, such qualified small 
        business vendors should include at least one such vendor with 
        expertise in manufacturing and assisting small manufacturers.
            ``(4) Coordination with district offices, etc.--The 
        grantees shall ensure that the small business development 
        centers shall work in close cooperation with the 
        Administration's regional and district offices, the local small 
        business community, and appropriate State and local agencies. 
        No action by a grantee or its subcontractors or staff shall 
        require the approval of any employee in a regional or district 
        office of the Administration. Any such employee shall, after 
        consultation with district counsel, notify the Assistant 
        Administrator for Small Business Development Centers if such 
        employee believes that the grantee or its subcontractors or 
        staff has taken action that violates the law or jeopardizes the 
legal position of the United States.
            ``(5) Assistance from state international trade offices.--
        The grantee may use funds provided by State international trade 
        offices and co-locate employees of such offices at small 
        business development centers.
            ``(6) Coordination with administration.--On an annual 
        basis, the grantee, after consultation with the district 
        director, shall review and coordinate public and private 
        partnerships and cosponsorships with the Administrator for the 
        purpose of more efficiently leveraging available resources on a 
        national and a State basis. Should the grantee be unable to 
        consult with the district director, the grantee shall consult 
        with the Assistant Administrator for Small Business Development 
        Centers.
            ``(7) Prohibition on certain fees.--Each grantee shall 
        ensure that small business development centers shall not impose 
        or otherwise collect a fee or other compensation in connection 
        with the provision of counseling services under this section.
            ``(8) Privacy requirements.--
                    ``(A) In general.--Each grantee shall ensure that 
                small business development centers shall not disclose 
                the name or address of any individual or small business 
                concern receiving assistance under this section without 
                the consent of such individual or small business 
                concern, except that--
                            ``(i) the Administrator shall require such 
                        disclosure if ordered to do so by a court in 
                        any civil or criminal action; and
                            ``(ii) if the Administrator considers it 
                        necessary while undertaking a financial audit 
                        of a small business development center or the 
                        grantee's network of small business development 
                        centers, the Administrator shall require such 
                        disclosure for the sole purpose of undertaking 
                        such audit.
                    ``(B) Regulations.--After notice and comment and 
                not later than 180 days after the date of the enactment 
                of this subparagraph, the Administrator shall issue 
                regulations to establish standards for requiring 
                disclosures during a financial audit under subparagraph 
                (A)(ii).
    ``(h) Additional Grants.--
            ``(1) In general.--Any grantee may apply to the 
        Administrator for an additional grant to be used solely to 
        assist--
                    ``(A) with the development and enhancement of 
                exports by small business concerns;
                    ``(B) in technology transfer;
                    ``(C) with outreach, development, and enhancement 
                of minority-owned small business startups or 
                expansions, HUBZone small business concerns, veteran-
                owned small business startups or expansions, and women-
                owned small business startups or expansions, in 
                communities affected by base closings or military or 
                corporate downsizing, or in rural or underserved 
                communities; and
                    ``(D) small manufacturers.
            ``(2) Certain rules to apply.--Except as otherwise provided 
        in this subsection, any additional grant under this subsection 
        shall be subject to rules similar to the rules that apply to 
        grants made under subsection (a).
            ``(3) Grant amount.--A grant shall not be made under this 
        subsection if such grant which would exceed the grantee's pro 
        rata share of a $15,000,000 program based upon the populations 
        to be served by the grantee as compared to the total population 
        of the United States. The minimum amount of eligibility for any 
        State shall be $100,000. Any additional grant made under this 
        section shall not be taken into account for purposes of the 
        dollar program limitations specified in subsection (j).
            ``(4) Reallocation of unused funds.--If the Administrator 
        has not received an application for an additional grant from a 
        grantee pursuant to this subsection within 90 days after the 
        Administrator and the grantee have signed an agreement pursuant 
        to subsection (c) or within 60 days after the grantee and 
        Administrator has renewed an agreement pursuant to subsection 
        (c), the Administrator may make such grant to any eligible 
        applicant (determined without regard to so much of subsection 
        (b)(4)(C) as precedes `1990,') in that State to carry out the 
        activities specified in this subsection subject to the 
        requirements of paragraphs (2) and (3).
    ``(i) Matching Funds.--
            ``(1) In general.--The Administrator shall require as a 
        condition of any grant (or amendment or modification thereof) 
        made to a grantee under this section, that a matching amount 
        equal to the amount of such grant be provided from sources 
        other than the Federal Government, to be comprised of not less 
        than 50 percent cash and not more than 50 percent of indirect 
        costs and in-kind contributions.
            ``(2) Restriction.--The matching amount described in 
        paragraph (1) shall not include--
                    ``(A) any indirect costs or in-kind contributions 
                derived from any Federal program; and
                    ``(B) any amount received under a contract 
                described in subsection (g)(2).
    ``(j) Funding Formula.--
            ``(1) In general.--Subject to paragraph (3), the amount of 
        funds to be made available to the grantee or grantees within a 
        State under this subsection shall be equal to an amount 
        determined in accordance with the following formula:
                    ``(A) The annual amount made available for the 
                Small Business Development Center Program under section 
                20(a), less any reductions made for expenses authorized 
                by paragraph (5), shall be divided on a pro rata basis, 
                based on the percentage of the population of each 
                State, as compared to the population of the United 
                States.
                    ``(B) If the pro rata amount calculated under 
                subparagraph (A) for any State is less than the minimum 
                funding level under paragraph (3), the Administrator 
                shall determine the aggregate amount necessary to 
                achieve that minimum funding level for each such State.
                    ``(C) The aggregate amount calculated under 
                subparagraph (B) shall be deducted from the amount 
                calculated under subparagraph (A) for States eligible 
                to receive more than the minimum funding level. The 
                deductions shall be made on a pro rata basis, based on 
                the population of each such State, as compared to the 
                total population of all such States.
                    ``(D) The aggregate amount deducted under 
                subparagraph (C) shall be added to the funds of those 
                States that are not eligible to receive more than the 
                minimum funding level in order to achieve the minimum 
                funding level for each such State, except that the 
                eligible amount of funds made available to any State 
                under this subsection shall not be reduced to an amount 
                below the minimum funding level.
            ``(2) Funds availability determination.--The amount of 
        funds that one or more grantees within a State are eligible to 
        receive under this subsection shall be the amount determined 
        under paragraph (1), subject to any modifications required 
        under paragraph (3), and shall be based on the amount available 
        for the fiscal year in which performance of the grant 
        commences, but not including amounts distributed in accordance 
        with paragraph (4). The amount of funds received by one or more 
        grantees in any State under any provision of this subsection 
        shall not exceed the amount of matching funds from sources 
        other than the Federal Government, as required under subsection 
        (i).
            ``(3) Minimum funding level.--The amount of the minimum 
        funding level for each State shall be determined for each 
        fiscal year based on the amount made available for that fiscal 
        year to carry out this section, as follows:
                    ``(A) If the amount made available is not less than 
                $81,500,000 and not more than $90,000,000, the minimum 
                funding level shall be $500,000.
                    ``(B) If the amount made available is less than 
                $81,500,000, the minimum funding level shall be the 
                remainder of $500,000 minus a percentage of $500,000 
                equal to the percentage amount by which the amount made 
                available is less than $81,500,000.
                    ``(C) If the amount made available is more than 
                $90,000,000, the minimum funding level shall be the sum 
                of $500,000 plus a percentage of $500,000 equal to the 
                percentage amount by which the amount made available 
                exceeds $90,000,000.
            ``(4) Distributions.--Subject to paragraph (3), if one or 
        more grantees within a State do not apply for, or use, their 
        full funding eligibility for a fiscal year, the Administration 
        shall distribute the remaining funds as follows:
                    ``(A) If the grant to any State is less than the 
                amount received by that State in fiscal year 2000, the 
                Administrator shall distribute such remaining funds, on 
                a pro rata basis, based on the percentage of shortage 
                of each such State, as compared to the total amount of 
                such remaining funds available, to the extent necessary 
                in order to increase the amount of the grant to the 
                amount received by that State in fiscal year 2000, or 
                until such funds are exhausted, whichever first occurs.
                    ``(B) If any funds remain after the application of 
                subparagraph (A), the remaining amount may be 
                distributed as supplemental funds to a grantee or 
                grantees in any State, as the Administrator determines, 
                in its discretion, to be appropriate, after 
                consultation with the association referred to in 
                subsection (k).
            ``(5) Use of amounts.--Of the amounts made available in any 
        fiscal year to carry out this section not more than $500,000 
        may be used by the Administrator to pay expenses enumerated in 
        subparagraphs (B) through (D) of section 20(a)(1).
            ``(6) Exclusions.--Funds made available to one or more 
        grantees within a State provided by the Administrator or 
        another Federal agency to carry out subsection (f)(4), (g)(2), 
        (h), or (o) or for supplemental grants set forth in paragraph 
        (4)(B), shall not be included in the calculation of maximum 
        funding to be made available to one or more grantees within the 
        State under paragraph (2).
            ``(7) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $135,000,000 for 
        fiscal year 2004 and $145,000,000 for fiscal year 2005. The 
        authority to award grants under this section shall be in effect 
        for each fiscal year only to the extent and in the amounts as 
        are provided in advance in appropriations Acts.
    ``(k) Formation of Association.--The grantees' directors are 
authorized to form an association to pursue matters of common concern. 
If more than a majority of the grantees' directors are members of such 
an association, the Administrator is authorized and directed to 
recognize the existence and activities of such an association and to 
consult with it and develop documents--
            ``(1) announcing the annual scope of activities pursuant to 
        this section;
            ``(2) requesting proposals to deliver assistance as 
        provided in this section; and
            ``(3) governing the general operations and administration 
        of the Small Business Development Center Program, specifically 
        including the development of regulations and a uniform 
        negotiated grant agreement for use on an annual basis when 
        entering into agreements with grantees.
    ``(l) Program Examination and Accreditation.--
            ``(1) Examination.--The Administrator shall develop and 
        implement a biennial programmatic and financial examination of 
        each network of small business development centers established 
        pursuant to this section. The biennial examination shall be 
        conducted by the Assistant Administrator for Small Business 
        Development Centers.
            ``(2) Accreditation.--The Administrator shall provide 
        financial support, by contract or otherwise, to the association 
        authorized by subsection (k) for the purpose of developing and 
        implementing a small business development center accreditation 
        program.
            ``(3) Extension or renewal of cooperative agreements.--
                    ``(A) In general.--In renewing a grant or 
                cooperative agreement or contract of a grantee, the 
                Administrator shall consider the results of the 
                examination and accreditation program conducted 
                pursuant to paragraphs (1) and (2).
                    ``(B) Accreditation requirement.--The Administrator 
                may not renew any grant under this section unless the 
                grantee's small business development centers have been 
                accredited under the program conducted pursuant to this 
                subsection, except that the Assistant Administrator for 
                Small Business Development Centers may waive such 
                accreditation requirement if the Assistant 
                Administrator determines that the grantee is making a 
                good faith effort to obtain accreditation for each of 
                the grantee's small business development centers.
    ``(m) Small Business Development Center Advisory Boards.--
            ``(1) National small business development center advisory 
        board.--
                    ``(A) Establishment.--There is established a 
                National Small Business Development Center Advisory 
                Board (herein referred to as `Board') which shall 
                consist of nine members appointed from civilian life by 
                the Administrator and who shall be persons of 
                outstanding qualifications known to be familiar and 
                sympathetic with small business needs and problems. No 
                more than three members shall be from universities or 
                their affiliates and six shall be from small business 
                concerns or associations representing small business 
                concerns. At the time of the appointment of the Board, 
                the Administrator shall designate one-third of the 
                members and at least one from each category whose term 
                shall end in two years from the date of appointment, a 
                second third whose term shall end in three years from 
                the date of appointment, and the final third whose term 
                shall end in four years from the date of appointment. 
                Succeeding Boards shall have three-year terms, with 
                one-third of the Board changing each year.
                    ``(B) Operation.--The Board shall elect a Chairman 
                and advise, counsel, and confer with the Assistant 
                Administrator for Small Business Development Centers in 
                carrying out the duties described in this section. The 
                Board shall meet at least semiannually and at the call 
                of the Chairman of the Board. Each member of the Board 
                shall be entitled to be compensated at the rate not in 
                excess of the per diem equivalent of the highest rate 
                of pay for individuals occupying the position under GS-
                18 of the General Schedule for each day engaged in 
                activities of the Board and shall be entitled to be 
                reimbursed for expenses as a member of the Board.
            ``(2) Local small business development center advisory 
        boards.--Each grantee's director shall establish an advisory 
        board for the grantee's network of small business development 
        centers. The district director shall have no authority to 
        approve or disapprove the members of the advisory board 
        selected by the grantee's director.
    ``(n) Administration of Program.--
            ``(1) In general.--Except as otherwise provided in this 
        section, the program established by this section shall be 
        administered by the Administrator, acting through the Assistant 
        Administrator for Small Business Development Centers with such 
        oversight by the Associate Administrator for Enterprise 
        Outreach and Training as the Administrator determines to be 
        appropriate.
            ``(2) Duties of assistant administrator for small business 
        development centers.--The duties of the Assistant Administrator 
        for Small Business Development Centers shall include 
        recommending the annual program budget, reviewing the annual 
        budgets submitted by each grantee, establishing appropriate 
        funding levels therefore, advising the Administrator on the 
        selection of grantees to participate in the program, 
        implementing the provisions of this section, maintaining a 
        clearinghouse to provide for the dissemination and exchange of 
        information between grantees and their subcontractors and 
        conducting audits of recipients of grantees under this section.
            ``(3) Consultation requirements.--In carrying out the 
        duties described in paragraph (2), the Assistant Administrator 
        shall confer with and seek the advice of the advisory boards 
        established pursuant to subsection (m) and the heads of the 
        regional and district offices of the Administration.
    ``(o) Establishment of Information Sharing System.--
            ``(1) In general.--The Administrator, in consultation with 
        the grantees, their subcontractors, and the association 
        authorized by this section shall develop and implement an 
        information sharing system. Such system shall--
                    ``(A) allow small business development centers to 
                exchange information about their programs;
                    ``(B) provide information central to technology 
                transfer; and
                    ``(C) provide information central to increased 
                utilization by United States businesses of sourcing 
                their procurement requirements with small 
                manufacturers.
            ``(2) Grant authority.--The Administrator may make grants 
        to one or more grantees to carry out the provisions of this 
        subsection. Such grants shall be awarded for a period of not to 
        exceed 5 years. The matching funds requirements of subsection 
        (i) shall not be applicable to grants made under this 
        subsection.
    ``(p) Cooperation With Federal Science Research Facilities and 
Agencies.--
            ``(1) In general.--Laboratories operated and funded by the 
        Federal Government are authorized and directed to cooperate 
        with the Administrator in developing and establishing programs 
        to support small business development centers by making 
        facilities and equipment available; providing experiment 
station capabilities in adaptive engineering; providing library and 
technical information processing capabilities; and providing 
professional staff for consulting. The Administrator is authorized to 
reimburse the laboratories for such services.
            ``(2) National science foundation.--The National Science 
        Foundation is authorized and directed to cooperate with the 
        Administrator in developing and establishing programs to 
        support small business development centers.
            ``(3) National Aeronautics and Space Administration.--The 
        National Aeronautics and Space Administration and regional 
        technology transfer centers supported by the National 
        Aeronautics and Space Administration are authorized and 
        directed to cooperate with grantees and their small business 
        development centers.
    ``(q) Regulations.--In promulgating regulations to carry out this 
section, the Administration shall identify, and require grantee 
compliance with, the provisions included in uniform requirements of 
Office of Management and Budget (OMB) Circulars which govern audits, 
cost principles and administrative requirements for Federal grants, and 
contracts and cooperative agreements.''.
    (b) Conforming Amendment.--Paragraph (2) of section 27(g) of the 
Small Business Act (15 U.S.C. 654(g)) is amended by striking ``section 
21(c)(3)(T)'' and inserting ``section 21(f)(4)(T)''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Grants.--To the extent that the amendment made by 
        subsection (a) applies with respect to grants, such amendment 
        shall apply to grants made, renewed, or terminated after the 
        date of the enactment of this Act.
    (d) Transition Rules.--
            (1) Multiple grantees replaced with single grantee.--In the 
        case of a State which is served by two or more grantees under 
        section 21 of the Small Business Act on the date of the 
        enactment of this Act, the Administrator shall be required to 
        select a new grantee for such State following the selection 
        process set forth in such section (as in effect on the day 
        after the date of the enactment of this Act) if the grantees 
        serving such State on the date of the enactment of this Act 
        were selected after January 1, 2002.
            (2) Small business development center advisory boards.--
        Each member of the National Small Business Development Center 
        Advisory Board and each member serving on a local small 
        business development center advisory board on the day before 
        the date of the enactment of this Act shall continue to so 
        serve until the end of such member's term.

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

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

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

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

``SEC. 23. SUPERVISORY AND ENFORCEMENT AUTHORITY FOR SMALL BUSINESS 
              LENDING COMPANIES.

    ``(a) In General.--The Administrator is authorized--
            ``(1) to supervise the safety and soundness of small 
        business lending companies and non-Federally regulated lenders;
            ``(2) with respect to small business lending companies to 
        set capital standards to regulate, to examine, and to enforce 
        laws governing such companies, in accordance with the purposes 
        of this Act; and
            ``(3) with respect to non-Federally regulated lenders to 
        regulate, to examine, and to enforce laws governing the lending 
        activities of such lenders under section 7(a) in accordance 
        with the purposes of this Act.
    ``(b) Capital Directive.--The Administrator may determine that 
failure of a small business lending company to maintain capital at the 
minimum level established by the Administrator is an unsafe and unsound 
practice. In addition to any other action authorized by law, the 
Administrator may issue a directive to a small business lending company 
that does not comply with the minimum capital requirement requiring the 
small business lending company to increase capital to level established 
by the Administrator.
    ``(c) Civil Action.--If a small business lending company violates 
this Act, the Administrator may institute a civil action in an 
appropriate district court to terminate the rights, privileges, and 
franchises of the company under this Act.
    ``(d) Revocation or Suspension of Loan Authority.--
            ``(1) The Administrator may revoke or suspend the authority 
        of a small business lending company or a non-Federally 
        regulated lender to make, service or liquidate business loans 
        authorized by section 7(a) of this Act--
                    ``(A) for false statements knowingly made in any 
                written submission required under this Act;
                    ``(B) for omission of a material fact from any 
                written submission required under this Act;
                    ``(C) for willful or repeated violation of this 
                Act;
                    ``(D) for willful or repeated violation of any 
                condition imposed by the Administrator with respect to 
                any application, request, or agreement under this Act; 
                or
                    ``(E) for violation of any cease and desist order 
                of the Administrator under this section.
            ``(2) The Administrator may revoke or suspend authority 
        under paragraph (1) only after a hearing under subsection (f). 
        The Administrator may delegate power to revoke or suspend 
        authority under paragraph (1) only to the Deputy Administrator 
        and only if the Administrator is unavailable to take such 
        action.
                    ``(A) The Administrator, after finding 
                extraordinary circumstances and in order to protect the 
                financial or legal position of the United States, may 
                issue a suspension order without conducting a hearing 
                pursuant to subsection (f). If the Administrator issues 
                a suspension under the preceding sentence, the 
                Administrator shall within two business days follow the 
                procedures set forth in subsection (f).
                    ``(B) Any suspension under paragraph (1) shall 
                remain in effect until the Administrator makes a 
                decision pursuant to subparagraph (4) to permanently 
                revoke the authority of the small business lending 
                company or non-Federally regulated lender, suspend the 
                authority for a time certain, or terminate the 
                suspension.
            ``(3) The small business lending company or non-Federally 
        regulated lender must notify borrowers of a revocation and that 
        a new entity has been appointed to service their loans. The 
        Administrator or an employee of the Administration designated 
        by the Administrator may provide such notice to the borrower.
            ``(4) Any revocation or suspension under paragraph (1) 
        shall be made by the Administrator except that the 
        Administrator shall delegate to an administrative law judge as 
        that term is used in section 3105 of title 5, United States 
        Code the authority to conduct any hearing required under 
        subsection (f). The Administrator shall base the decision to 
        revoke on the record of the hearing.
    ``(e) Cease and Desist Order.--
            ``(1) Where a small business lending company, a non-
        Federally regulated lender, or other person violates this Act 
        or is engaging or is about to engage in any acts or practices 
        which constitute or will constitute a violation of this Act, 
        the Administrator may order, after the opportunity for hearing 
        pursuant to subsection (f), the company, lender, or other 
        person to cease and desist from such action or failure to act. 
        The Administrator may delegate the authority under the 
        preceding sentence only to the Deputy Administrator and only if 
        the Administrator is unavailable to take such action.
            ``(2) The Administrator, after finding extraordinary 
        circumstances and in order to protect the financial or legal 
        position of the United States, may issue a cease and desist 
        order without conducting a hearing pursuant to subsection (f). 
        If the Administrator issues a cease and desist order under the 
        preceding sentence, the Administrator shall within two business 
        days follow the procedures set forth in subsection (f).
            ``(3) The Administrator may further order such small 
        business lending company or non-Federally regulated lender or 
        other person to take such action or to refrain from such action 
        as the Administrator deems necessary to insure compliance with 
        this Act.
            ``(4) A cease and desist order under this subsection may 
        also provide for the suspension of authority to lend in 
        subsection (d).
    ``(f) Procedure for Revocation or Suspension of Loan Authority and 
for Cease and Desist Order.--
            ``(1) Before revoking or suspending authority under 
        subsection (d) or issuing a cease and desist order under 
        subsection (e), the Administrator shall serve an order to show 
        cause upon the small business lending company, non-Federally 
        regulated lender, or other person why an order revoking or 
        suspending the authority or a cease and desist order should not 
        be issued. The order to show cause shall contain a statement of 
        the matters of fact and law asserted by the Administrator and 
        the legal authority and jurisdiction under which a hearing is 
        to be held, and shall set forth that a hearing will be held 
        before an administrative law judge at a time and place stated 
        in the order. Such hearing shall be conducted pursuant to the 
        provisions of sections 554, 556, and 557 of title 5, United 
        States Code. If after hearing, or a waiver thereof, the 
        Administrator determines that an order revoking or suspending 
        the authority or a cease and desist order should be issued, the 
        Administrator shall promptly issue such order, which shall 
        include a statement of the findings of the Administrator and 
        the grounds and reasons therefor and specify the effective date 
        of the order, and shall cause the order to be served on the 
        small business lending company, non-Federally regulated lender, 
        or other person involved.
            ``(2) Witnesses summoned before the Administrator shall be 
        paid by the party at whose instance they were called the same 
        fees and mileage that are paid witnesses in the courts of the 
        United States.
            ``(3) A cease and desist order, suspension or revocation 
        issued by the Administrator, after the hearing under this 
        subsection is final agency action for purposes of chapter 7 of 
        title 5, United States Code. An adversely aggrieved party shall 
        have 20 days from the date of issuance of the cease and desist 
        order, suspension or revocation, to seek judicial review in an 
        appropriate district court.
    ``(g) Removal or Suspension of Management Official.--
            ``(1) Definition.--In this section, the term `management 
        official' means, with respect to a small business lending 
        company or a non-Federally regulated lender, an officer, 
        director, general partner, manager, employee, agent, or other 
        participant in the management of the affairs of the company's 
        or lender's activities under section 7(a) of this Act.
            ``(2) Removal of management official.--
                    ``(A) Notice.--The Administrator may serve upon any 
                management official a written notice of its intention 
                to remove that management official if, in the opinion 
                of the Administrator, the management official--
                            ``(i) willfully and knowingly commits a 
                        substantial violation of--
                                    ``(I) this Act;
                                    ``(II) any regulation issued under 
                                this Act;
                                    ``(III) a final cease-and-desist 
                                order under this Act; or
                                    ``(IV) any agreement by the 
                                management official, the small business 
                                lending company or non-Federally 
                                regulated lender under this Act; or
                            ``(ii) willfully and knowingly commits a 
                        substantial breach of a fiduciary duty of that 
                        person as a management official and the 
                        violation or breach of fiduciary duty is one 
                        involving personal dishonesty on the part of 
                        such management official.
                    ``(B) Contents of notice.--A notice under 
                subparagraph (A) shall contain a statement of the facts 
                constituting grounds therefor and shall fix a time and 
                place at which a hearing, conducted pursuant to 
                sections 554, 556, and 557 of title 5, United States 
                Code, will be held thereon.
                    ``(C) Hearing.--
                            ``(i) Timing.--A hearing under subparagraph 
                        (B) shall be held not earlier than 30 days and 
                        later than 60 days after the date of service of 
                        notice of the hearing, unless an earlier or a 
                        later date is set by the Administrator at the 
                        request of--
                                    ``(I) the management official, and 
                                for good cause shown; or
                                    ``(II) the Attorney General.
                            ``(ii) Consent.--Unless the management 
                        official appears at a hearing under this 
                        paragraph in person or by a duly authorized 
                        representative, the management official shall 
                        be deemed to have consented to the issuance of 
                        an order of removal under subparagraph (A).
                    ``(D) Order of removal.--
                            ``(i) In general.--In the event of consent 
                        under subparagraph (C)(ii), or if upon the 
                        record made at a hearing under this subsection, 
                        the Administrator finds that any of the grounds 
                        specified in the notice of removal has been 
                        established, the Administrator may issue such 
                        orders of removal from office as the 
                        Administrator deems appropriate.
                            ``(ii) Effectiveness.--An order under 
                        clause (i) shall--
                                    ``(I) take effect 30 days after the 
                                date of service upon the subject small 
                                business lending company or non-
                                Federally regulated lender and the 
                                management official concerned (except 
                                in the case of an order issued upon 
                                consent as described in subparagraph 
                                (C)(ii), which shall become effective 
                                at the time specified in such order); 
                                and
                                    ``(II) remain effective and 
                                enforceable, except to such extent as 
                                it is stayed, modified, terminated, or 
                                set aside by action of the 
                                Administrator or a reviewing court in 
                                accordance with this section.
            ``(3) Authority to suspend or prohibit participation.--
                    ``(A) In general.--In order to protect a small 
                business lending company, a non-Federally regulated 
                lender or the interests of the Administration or the 
                United States, the Administrator may suspend from 
                office or prohibit from further participation in any 
                manner in the management or conduct of the affairs of a 
                small business lending company or a non-Federally 
                regulated lender a management official by written 
                notice to such effect served upon the management 
                official. Such suspension or prohibition may prohibit 
                the management official from making, servicing, 
                reviewing, approving, or liquidating any loan under 
                section 7(a) of this Act.-
                    ``(B) Effectiveness.--A suspension or prohibition 
                under subparagraph (A)--
                            ``(i) shall take effect upon service of 
                        notice under paragraph (2); and
                            ``(ii) unless stayed by a court in 
                        proceedings authorized by subparagraph (C), 
                        shall remain in effect--
                                    ``(I) pending the completion of the 
                                administrative proceedings pursuant to 
                                a notice of intention to remove served 
                                under paragraph (2); and
                                    ``(II) until such time as the 
                                Administrator dismisses the charges 
                                specified in the notice, or, if an 
                                order of removal or prohibition is 
                                issued against the management official, 
                                until the effective date of any such 
                                order.
                    ``(C) Judicial review of suspension prior to 
                hearing.--Not later than 10 days after a management 
                official is suspended or prohibited from participation 
                under subparagraph (A), the management official may 
                apply to an appropriate district court for a stay of 
                the suspension or prohibition pending the completion of 
                the administrative proceedings pursuant to a notice of 
                intent to remove served upon the management official 
                under paragraph (2).
            ``(4) Authority to suspend on criminal charges.--
                    ``(A) In general.--If a management official is 
                charged in any information, indictment, or complaint 
                authorized by a United States attorney, with a felony 
                involving dishonesty or breach of trust, the 
                Administrator may, by written notice served upon the 
                management official, suspend the management official 
                from office or prohibit the management official from 
                further participation in any manner in the management 
                or conduct of the affairs of the small business lending 
                company or non-Federally regulated lender.
                    ``(B) Effectiveness.--A suspension or prohibition 
                under subparagraph (A) shall remain in effect until the 
                information, indictment, or complaint is finally 
                disposed of, or until terminated by the Administrator 
                or upon an order of a district court.
                    ``(C) Authority upon conviction.--If a judgment of 
                conviction with respect to an offense described in 
                subparagraph (A) is entered against a management 
                official, then at such time as the judgment is not 
                subject to further judicial review (and for purposes of 
                this subparagraph shall not include any petition for a 
                writ of habeas corpus), the Administrator may issue and 
                serve upon the management official an order removing 
                the management official, effective upon service of a 
                copy of the order upon the small business lending 
                company or non-Federally regulated lender.
                    ``(D) Authority upon dismissal or other 
                disposition.--A finding of not guilty or other 
                disposition of charges described in subparagraph (A) 
                shall not preclude the Administrator from instituting 
                proceedings under subsection (e) or (f).
            ``(5) Notification to small business lending company or a 
        non-federally regulated lender.--Copies of each notice required 
        to be served on a management official under this section shall 
        also be served upon the small business lending company or non-
        Federally regulated lender involved.
            ``(6) Final agency action and judicial review.--
                    ``(A) Issuance of orders.--After a hearing under 
                this subsection, and not later than 30 days after the 
                Administrator notifies the parties that the case has 
                been submitted for final decision, the Administrator 
                shall render a decision in the matter (which shall 
                include findings of fact upon which its decision is 
                predicated), and shall issue and cause to be served 
                upon each party to the proceeding an order or orders 
                consistent with this section. The decision of the 
                Administrator shall constitute final agency action for 
                purposes of chapter 7 of title 5, United States Code.
                    ``(B) Judicial review.--An adversely aggrieved 
                party shall have 20 days from the date of issuance of 
                the order to seek judicial review in an appropriate 
                district court.
    ``(h) Appointment of Receiver.--
            ``(1) In any proceeding under subsection (f)(4) or 
        subsection (g)(6)(C), the court may take exclusive jurisdiction 
        of a small business lending company or a non-Federally 
        regulated lender and appoint a receiver for assets of the 
        company or lender.
            ``(2) Upon request of the Administrator, the court may 
        appoint the Administrator as a receiver under paragraph (1).
    ``(i) Possession of Assets.--
            ``(1) If a small business lending company or a non-
        Federally regulated lender is not in compliance with capital 
        requirements or is insolvent, the Administrator may take 
        possession of the portfolio of loans guaranteed by the 
        Administrator and sell such loans to a third party by means of 
        a receiver appointed under subsection (h).
            ``(2) If a small business lending company or a non-
        Federally regulated lender is not in compliance with capital 
        requirements or is insolvent or otherwise operating in an 
        unsafe and unsound condition, the Administrator may take 
        possession of servicing activities of loans that are guaranteed 
        by the Administrator and sell such servicing rights to a third 
        party by means of a receiver appointed under subsection (h).
    ``(j) Penalties and Forfeitures.--
            ``(1) Except as provided in paragraph (2), a small business 
        lending company or a non-Federally regulated lender which 
        violates any regulation or written directive issued by the 
        Administrator regarding the filing of any regular or special 
        report shall pay to the United States a civil penalty of not 
        more than $100 for each day of the continuance of the failure 
        to file such report, unless it is shown that such failure is 
        due to reasonable cause and not due to willful neglect. The 
        civil penalties under this subsection may be enforced in a 
        civil action brought by the Administrator. The penalties under 
        this subsection shall not apply to any affiliate of a small 
        business lending company that procures at least 10 percent of 
        its annual purchasing requirements from small manufacturers.
            ``(2) The Administration may by rules and regulations that 
        shall be codified in the Code of Federal Regulations, after an 
        opportunity for notice and comment, or upon application of an 
        interested party, at any time previous to such failure, by 
        order, after notice and opportunity for hearing which shall be 
        conducted pursuant to sections 554, 556, and 557 of title 5, 
        United States Code, exempt in whole or in part, any small 
        business lending company or non-Federally regulated lender from 
        paragraph (1), upon such terms and conditions and for such 
        period of time as it deems necessary and appropriate, if the 
        Administration finds that such action is not inconsistent with 
        the public interest or the protection of the Administration. 
        The Administration may for the purposes of this section make 
        any alternative requirements appropriate to the situation.''.

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

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

SEC. 216. WOMEN'S BUSINESS CENTER PROGRAM.

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

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

    ``(a) Definitions.--For purposes of this section:
            ``(1) The term `private nonprofit organization' means an 
        entity that is described in section 501(c) of the Internal 
Revenue Code of 1986 and exempt from taxation under section 501(a) of 
such Code.
            ``(2) The term `women's business center site' means the 
        location of--
                    ``(A) a women's business center; or
                    ``(B) 1 or more women's business centers, 
                established in conjunction with another women's 
                business center in another location within a State or 
                region--
                            ``(i) that reach a distinct population that 
                        would otherwise not be served;
                            ``(ii) whose services are targeted to 
                        women; and
                            ``(iii) whose scope, function, and 
                        activities are similar to those of the primary 
                        women's business center or centers in 
                        conjunction with which it was established.
    ``(b) Authority.--The Administrator may provide financial 
assistance to private nonprofit organizations to conduct projects which 
will receive Federal funding for 5 years and those that receive 
extensions for funding under the conditions set forth in this section 
for the benefit of small business concerns owned and controlled by 
women. The projects shall provide--
            ``(1) financial assistance, including training and 
        counseling in how to apply for and secure business credit and 
        investment capital, preparing and presenting financial 
        statements, and managing cash flow and other financial 
        operations of a business concern;
            ``(2) management assistance, including training and 
        counseling in how to plan, organize, staff, direct, and control 
        each major activity and function of a small business concern; 
        and
            ``(3) marketing assistance, including training and 
        counseling in identifying and segmenting domestic and 
        international market opportunities, preparing and executing 
        marketing plans, developing pricing strategies, locating 
        contract opportunities, negotiating contracts, and utilizing 
        varying public relations and advertising techniques.
    ``(c) Submission of 5-year plans.--
            ``(1) In response to solicitations made by the 
        Administrator requesting applications for grants to operate 
        women's business centers, each applicant organization initially 
        shall submit a 5-year plan to the Administrator detailing the 
        budget required to provide the services set forth in subsection 
        (b), the services that will be provided, the target population, 
        and the proposed fundraising activities to meet the non-Federal 
        contributions mandated by this section.
            ``(2)(A) Notwithstanding any other provision of law, the 
        Administrator may use such expedited methods of solicitation 
        and award as the Administrator determines to be appropriate to 
        carry out this section.
            ``(B) Any expedited procedures utilized by the 
        Administrator shall ensure that all small business sources are 
        provided a reasonable opportunity to submit applications.
    ``(d) Criteria.--The Administrator shall evaluate and rank 
applicants in accordance with predetermined selection criteria that 
shall be stated in terms of relative importance. Such criteria and 
their relative importance shall be made publicly available and stated 
in each solicitation for applications made by the Administrator. The 
criteria shall include--
            ``(1) the experience of the applicant in conducting 
        programs or ongoing efforts designed to impart or upgrade the 
        business skills of women business owners or potential owners;
            ``(2) the present ability of the applicant to commence a 
        project within a minimum amount of time;
            ``(3) the ability of the applicant to provide training and 
        services to a representative number of women who are both 
        socially and economically disadvantaged; and
            ``(4) the location for the women's business center site 
        proposed by the applicant.
    ``(e) Selection of Grantees.--Assuming other ranking factors to be 
equal, the Administrator shall make selection of grantees in the 
following order of preference:
            ``(1) The Administrator shall select from the applications 
        those that demonstrate the greatest ability to serve women who 
        are socially and economically disadvantaged whether located in 
        standard metropolitan statistical areas or rural areas and 
        without regard to the location of an existing center.
            ``(2) If, in the opinion of the Administrator, 2 or more 
        applicants have the same rank with respect to service of 
        socially and economically disadvantaged women, the 
        Administrator shall prefer the applicant that proposes to serve 
        part of a State in a State that was served by a higher number 
        of women's business centers at any time in the last 5 years 
        than the number of such centers that serve such State at the 
        time of selection.
            ``(3) If no application has been received under which an 
        award can be made pursuant to paragraph (2), the Administrator 
        then shall select an applicant that proposes to serve a 
        standard metropolitan statistical area that was served by a 
        higher number of women's business centers at any time in the 
        last 5 years than the number of such centers that serve such 
        area at the time of selection.
    ``(f) Administrator Funding of Grantees.--The Administrator, except 
as otherwise provided by subsection (m), shall provide funding 
according to the following formula:
            ``(1) During the first and second years of operation, two 
        dollars in Federal funds for each dollar in matching funds as 
        required by subsection (g).
            ``(2) During the third, fourth, and fifth years, one dollar 
        in Federal funds for each dollar in matching funds as required 
        by subsection (g).
            ``(3) The grant agreement shall provide for the mechanism 
        of disbursement of Federal funds by the Administrator including 
        payment in lump sum or installments, in advance, or by way of 
        reimbursement. The Administrator may disburse up to 25 percent 
        of each year's Federal share to a grantee before the non-
        Federal sector matching funds are obtained.
            ``(4) If a grantee fails to obtain the required non-Federal 
        contribution at any time during the life of the grant, such 
        grantee shall not be eligible thereafter for advance 
        disbursements pursuant to paragraph (3) during the remainder of 
        the term of the grant, or for any other women's business center 
        which it operates or for which it has applied to establish.
            ``(5) Prior to approving assistance to a grantee for any 
        other projects, the Administrator shall specifically determine 
        whether the Administrator believes that the grantee will be 
        able to obtain the requisite non-Federal funding and enter a 
        written finding setting forth the reasons for making such 
        determination.
            ``(6) The authority of the Administrator to provide funding 
        pursuant to this section shall only be in effect for each 
        fiscal year and only to the extent and in amounts as are 
        provided for in advance of appropriations Acts.
    ``(g) Matching Funds.--
            ``(1) Except as provided by subsection (n), each grantee, 
        shall be required to obtain matching contributions according to 
        the formula set forth in subsection (f).
            ``(2) No more than one-half of such contributions may be in 
        the form of in-kind contributions that are budget line items 
        only, including office equipment and office space.
            ``(3) The restriction in paragraph (2) shall apply to all 
        grantees under this section.
    ``(h) Contract Authority.--A women's business center may enter into 
a contract with a Federal department or agency to provide specific 
assistance to women and other underserved small business concerns. 
Performance of such contract should not hinder the women's business 
centers in carrying out the terms of the grant received by the women's 
business centers from the Administrator.
    ``(i) Annual Program Examination.--
            ``(1) The Administrator shall--
                    ``(A) develop and implement an annual programmatic 
                and financial examination of each women's business 
                center established pursuant to this section, pursuant 
                to which each such center shall provide to the 
                Administrator--
                            ``(i) an itemized cost breakdown of actual 
                        expenditures for costs incurred during the 
                        preceding year;
                            ``(ii) documentation regarding the amount 
                        of matching assistance from non-Federal sources 
                        obtained and expended by the center during the 
                        preceding year in order to meet the 
                        requirements of subsection (g) and, with 
                        respect to any in-kind contributions described 
                        in that subsection that were used to satisfy 
                        the matching requirements, verification of the 
                        existence and valuation of those contributions; 
                        and
                            ``(iii) a review of the grantee's success 
                        in fundraising plan and whether that needs 
                        revision to ensure that the grantee can sustain 
                        operations after five years; and
                    ``(B) analyze the results of each such examination 
                and, based on that analysis, make a determination 
                regarding the programmatic and financial viability of 
                each women's business center.
            ``(2) In conducting such annual examination, the 
        Administrator shall limit the total number of site visits to a 
        particular women's business center to no more than 2 per year, 
        unless the Administrator determines that extraordinary 
        circumstances, as defined in regulations promulgated by the 
        Administrator, requires more than 2 such visits.
    ``(j) Renewal of Funding and Termination.--
            ``(1) On an annual basis, commencing with the end of the 
        grantee's second year of operation of a women's business 
        center, the Administrator, based on the program review made 
        pursuant to subsection (i), shall determine whether to continue 
        funding the grantee according to the formula set forth in 
        subsection (f). In determining whether to renew funding during 
        any year of the life of the project operated by the grantee, 
        the Administrator--
                    ``(A) shall consider the results of each annual 
                examination of the center under subsection (i); and
                    ``(B) may withhold funding for the following year 
                or years, if the Administrator determines that--
                            ``(i) the grantee has failed to provide for 
                        any women's business center which it operates 
                        any information required to by the 
                        Administrator to perform the annual program 
                        examination required under subsection (i), or 
                        the information is deemed to be inadequate to 
                        conduct the annual examination under subsection 
                        (i);
                            ``(ii) the center has failed to provide any 
                        information required to be provided by the 
                        center for purposes of the report of the 
                        Administrator under subsection (l), or the 
                        information provided by the center is 
                        inadequate; or
                            ``(iii) the Administrator determines, 
                        pursuant to regulations adopted by the 
                        Administrator and codified in the Code of 
                        Federal Regulations, that the grantee has 
                        failed to deliver the services required by 
                        subsection (b) taking into account current 
                        economic conditions and the target population 
                        served by the grantee.
            ``(2) The Administrator shall not require, as a condition 
        of initial or continued funding, and a grant agreement shall 
        not include a requirement that a women's business center 
        operated by the grantee serve a particular number of women with 
        respect to loans under section 7 of this Act or title V of the 
        Small Business Investment Act of 1958.
            ``(3) The Administrator shall not fund a grantee for the 
        operation of a women's business center that has been in 
        operation for 5 years unless it applies for and receives an 
        extension of Federal funding pursuant to subsection (m) or the 
        grantee reapplies as a new applicant pursuant to subsection (c) 
        and the Administrator selects the grantee pursuant to 
        subsections (d) and (e).
            ``(4) If the Administrator makes a determination pursuant 
        to subparagraph (1)(B)(iii), prior to the withholding of any 
        funds, the Administrator shall provide the grantee with a 
        written notification of the reasons and shall provide the 
        grantee with the opportunity for a hearing pursuant to sections 
        554, 556, and 557 of title 5, United States Code.
            ``(5) The Administrator shall make a final decision based 
        on the record of the hearing and such decision shall be made 
        within 60 days of the notification provided in paragraph (4).
    ``(k) Management Report.--
            ``(1) The Administrator shall prepare and submit to the 
        Committee on Small Business of the House of Representatives and 
        the Committee on Small Business and Entrepreneurship of the 
        Senate a report on the effectiveness of all projects, including 
        those operated pursuant to extensions of Federal funding, 
        conducted under this section.
            ``(2) Each report submitted under paragraph (1) shall 
        include information concerning, with respect to each women's 
        business center established pursuant to this section--
                    ``(A) the number of individuals receiving 
                assistance;
                    ``(B) the number of startup business concerns 
                formed;
                    ``(C) the gross receipts of assisted concerns;
                    ``(D) the employment increases or decreases of 
                assisted concerns;
                    ``(E) to the maximum extent practicable, increases 
                or decreases in profits of assisted concerns;
                    ``(F) the number of hours of counseling and 
                training provided and workshops conducted; and
                    ``(G) the most recent analysis, as required under 
                subsection (i)(1)(B), and the subsequent determination 
                made by the Administrator under that subsection.
    ``(l) Authorization of Appropriations.--
            ``(1) There is authorized to be appropriated--
                    ``(A) $ 16,000,000 for fiscal year 2004; and
                    ``(B) $ 17,500,000 for fiscal year 2005.
            ``(2)(A) Except as provided in subparagraph (B), amounts 
        made available under this subsection for each fiscal year, may 
        only be used for grant awards and may not be used for costs 
        incurred by the Administrator in connection with the management 
        and administration of the program under this section.
            ``(B) Of the amount made available under this subsection 
        for a fiscal year, 1.75 percent shall be available for costs 
        associated with selection, monitoring, and oversight.
            ``(3)(A) Subject to subparagraph (B), 30.2 percent of the 
        funds authorized pursuant to this subsection shall be reserved 
        to provide extensions of Federal funding to grantees that meet 
        the standards set forth in subsection (m).
            ``(B) If the Administrator does not distribute all funds 
        reserved for extensions of Federal funding pursuant to 
        subsection (m), the Administrator shall utilize the unawarded 
        funds to grantees according to the priorities set forth in 
        paragraphs (1), (2), and (3) of subsection (e).
    ``(m) Extensions of Federal Funding After Five Years.--
            ``(1) The Administrator is authorized to extend Federal 
        funding to any grantee for 5 years after the term of the 
        original grant ends.
            ``(2) In order to receive an extension of Federal funding, 
        the grantee shall submit an application in the fourth year of 
        its operation of a women's business center and has met all of 
        the criteria set by the Administrator for continued funding in 
        its fifth year.
    ``(n) Selection of Grantees for Extensions of Federal Funding.--
            ``(1) The Administrator shall review each application 
        submitted under paragraph (2) and select grantees for 
        extensions of Federal funding who have--
                    ``(A) a demonstrated record of serving 
                predominantly socially and economically disadvantaged 
                women; and
                    ``(B) are unable to meet their matching fund 
                requirements due to their target populations.
            ``(2) If the Administrator does not receive any 
        applications that meet the standards of subparagraph (A), the 
        Administrator shall select grantees under this subsection 
        according to the following preferences:
                    ``(A) Those that meet the matching requirements in 
                subsection (f)(2).
                    ``(B) If there are no applicants that meet that 
                standard in subparagraph (A) then based on criteria 
                developed by the Administrator to rank applicants for 
                extensions of Federal funding.
            ``(3) The Administrator shall maintain a copy of each 
        application submitted under this subsection for not less than 
        10 years.
            ``(4) In awarding an extension of Federal funding, the 
        Administrator may condition such award on the grantee obtaining 
        a match requirement at least equal to 2 non-Federal dollars for 
        each dollar of Federal funding except that grantees meeting the 
        standards of paragraph (1)(A) shall only be required to match 
        each Federal dollar with a non-Federal dollar.''.

SEC. 217. HUBZONE PROGRAM.

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

``SEC. 31. HUBZONE PROGRAM.

    ``(a) In General.--There is established within the Administration a 
program to be carried out by the Administrator to provide for Federal 
contracting assistance to qualified HUBZone small business concerns in 
accordance with this section.
    ``(b) Eligible Contracts.--
            ``(1) Authority of contracting officer.--
                    ``(A) A contracting officer may award sole source 
                contracts under this section to any qualified HUBZone 
                small business concern, if--
                            ``(i) the qualified HUBZone small business 
                        concern is determined to be a responsible 
                        contractor with respect to performance of such 
                        contract opportunity, and the contracting 
                        officer does not have a reasonable expectation 
                        that 2 or more qualified HUBZone small business 
                        concerns will submit offers for the contracting 
                        opportunity;
                            ``(ii) the anticipated award price of the 
                        contract (including options) will not exceed--
                                    ``(I) $5,000,000, in the case of a 
                                contract opportunity assigned a 
                                standard industrial classification code 
                                for manufacturing; or
                                    ``(II) $3,000,000, in the case of 
                                all other contract opportunities; and
                            ``(iii) in the estimation of the 
                        contracting officer, the contract award can be 
                        made at a fair and reasonable price.
                    ``(B) A contract opportunity may be awarded 
                pursuant to this section on the basis of competition 
                restricted to qualified HUBZone small business concerns 
                if the contracting officer has a reasonable expectation 
                that not less than 2 qualified HUBZone small business 
                concerns will submit offers and that the award can be 
                made at a fair market price.
            ``(2) Price evaluation preference in full and open 
        competitions.--
                    ``(A) In general.--In any case in which a contract 
                is to be awarded on the basis of full and open 
                competition, the price offered by a qualified HUBZone 
                small business concern shall be deemed as being lower 
                than the price offered by another offeror (other than 
                another small business concern), if the price offered 
                by the qualified HUBZone small business concern is not 
                more than 10 percent higher than the price offered by 
                the otherwise lowest, responsive, and responsible 
                offeror.
                    ``(B) Full and open competition.--For purposes of 
                this paragraph, the term `full and open competition' 
                has the meaning given that term in section 4 of the 
                Office of Federal Procurement Policy Act (41 U.S.C. 
                403).
            ``(3) Relationship to other contracting preferences.--A 
        procurement may not be made from a source on the basis of a 
        preference provided in paragraph (1) or (2), if the procurement 
        would otherwise be made from a different source under section 
        4124 or 4125 of title 18, United States Code, or the Javits-
        Wagner-O'Day Act (41 U.S.C. 46 et seq.).
    ``(c) Enforcement; Penalties.--
            ``(1) Verification of eligibility.--In carrying out this 
        section, the Administrator shall establish procedures relating 
        to--
                    ``(A) the filing, investigation, and disposition by 
                the Administration of any challenge to the eligibility 
                of a small business concern to receive assistance under 
                this section (including a challenge, filed by an 
                interested party, relating to the veracity of a 
                certification made or information provided to the 
                Administration by a small business concern under 
                section 3(p)(5); and
                    ``(B) verification by the Administrator of the 
                accuracy of any certification made or information 
                provided to the Administration by a small business 
                concern under section 3(p)(5).
            ``(2) Examinations.--The procedures established under 
        paragraph (1) may provide for program examinations (including 
        random program examinations) by the Administrator of any small 
        business concern making a certification or providing 
        information to the Administrator under section 3(p)(5).
            ``(3) Provision of data.--Upon the request of the 
        Administrator, the Secretary of Labor, the Secretary of Housing 
        and Urban Development, and the Secretary of the Interior (or 
        the Assistant Secretary for Indian Affairs), shall promptly 
        provide to the Administrator such information as the 
        Administrator determines to be necessary to carry out this 
        subsection.
            ``(4) Penalties.--In addition to the penalties described in 
        section 16(d), any small business concern that is determined by 
        the Administrator to have misrepresented the status of that 
        concern as a `HUBZone small business concern' for purposes of 
        this section, shall be subject to--
                    ``(A) section 1001 of title 18, United States Code; 
                and
                    ``(B) sections 3729 through 3733 of title 31, 
                United States Code.
    ``(d) List of Qualified Small Business Concerns.--The Administrator 
shall establish and maintain a list of qualified HUBZone small business 
concerns, which list shall, to the extent practicable--
            ``(1) once the Administrator has made the certification 
        required by subsection 3(p)(5)(A)(i) of this Act regarding a 
        qualified HUBZone small business concern and has determined 
        that subsection 3(p)(5)(B) does not apply to that concern, 
        include the name, address, and type of business with respect to 
        each such small business concern;
            ``(2) be updated by the Administrator not less than 
        annually; and
            ``(3) be provided upon request to any Federal agency or 
        other entity.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out the program established by this section 
$5,000,000 for each of fiscal years 2004 through 2005.''.

SEC. 218. OTHER REPEALS AND REORGANIZATIONS.

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

``SEC. 36. SEVERABILITY.

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

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

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

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

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

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

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

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

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

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

SEC. 219. RULES OF CONSTRUCTION.

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

                      TITLE III--OTHER PROVISIONS

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

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

SEC. 302. WORKFORCE TRANSFORMATION PLAN.

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

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

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

SEC. 304. REGULATIONS ON SIZE STANDARDS OF FRANCHISEES.

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

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

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

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

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

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

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

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

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

SEC. 309. SOCIALLY AND ECONOMICALLY DISADVANTAGED BUSINESS.

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

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

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

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

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

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

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

SEC. 313. DATA COLLECTION CAPABILITIES.

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

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

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

SEC. 315. NATIONAL SMALL BUSINESS INCUBATOR PROGRAM.

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

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

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

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

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

SEC. 318. DEFINITIONS.

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




                                                 Union Calendar No. 249

108th CONGRESS

  2d Session

                               H. R. 2802

                      [Report No. 108-325, Part I]

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                            October 21, 2003

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

                             March 2, 2004

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

                             March 8, 2004

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