Short title

This Act may be cited as the

Small Business Reform Act of 2011

or the

Not Too Small to Succeed in Business Act of 2011

Findings

Congress finds the following: (1)Small businesses are a vital part of the economy of the United States. (2)The 26,800,000 small businesses in the United States account for more than 99.7 percent of all employer firms. (3)Small businesses employ just over half of all private sector employees. (4)The 4,100,000 small businesses owned by individuals who are members of economically disadvantaged groups generate approximately $694,000,000,000 in revenues and employ approximately 4,800,000 individuals each year. (5)Small businesses need help to remain competitive in the global economy, particularly during difficult economic times. (6)Together, women-owned and minority-owned businesses receive less than 7 percent of venture capital. (7)Seventy percent of small businesses survive at least 2 years, but less than half survive 5 years. (8)The Small Business Administration was established in 1953 by the Federal Government to aid, counsel, assist, and protect the interests of small business concerns, to preserve free competitive enterprise, and to maintain and strengthen the overall economy of the United States. (9)The Small Business Administration assists firms owned and controlled by economically disadvantaged individuals to enter the economic mainstream by providing firm-specific analysis, counseling, management training, professional consulting and monitoring services, and access to business development opportunities under section 8(a) of the Small Business Act. (10)Although the program under section 8(a) is well intended, the problems of the program are well known. (11)The program under section 8(a) has a record of graduating companies that are not sufficiently prepared to compete for contracts with large and established companies in the private sector, resulting in a large number of former participants in the program failing to remain in business shortly after leaving the program. (12)The problem of graduating companies from the program under section 8(a) that are not sufficiently prepared to compete for contracts with large and established companies in the private sector is caused by the reliance of the Small Business Administration on outdated measures of adjusted gross income and net worth in determining whether a company participating in the program continues to be economically disadvantaged. (13)Reliance by the Small Business Administration on measures that do not reflect contemporary conditions has had, and will continue to have, the unintended consequence of keeping small businesses too small to succeed, which is as undesirable as protecting companies that are too big to fail.

Improvement of program under section 8(a) of the Small Business Act

(a)

Period of eligibility

(1)

Extension

Section 7(j)(15) of the Small Business Act (15 U.S.C. 636(j)(15)) is amended— (A)in the matter preceding subparagraph (A) by striking nine years and inserting 11 years; and (B)in subparagraph (B) by striking five years and inserting 7 years. (2)

Completed periods

A small business concern that completed a 9-year period of participation in the program under section 8(a) of the Small Business Act (15 U.S.C. 637(a)) prior to the date of enactment of this Act and that is otherwise eligible to participate in such program except for having completed such 9-year period, including that such concern satisfies net worth requirements applicable to continued eligibility after initial program admission, may participate in such program during the 2-year period beginning on the date of enactment of this Act. (b)

Net worth and income limitations

(1)

Increase

Section 8(a)(6)(A) of the Small Business Act (15 U.S.C. 637(a)(6)(A)) is amended by inserting after disadvantaged individual. the following: For purposes of eligibility for admission as a Program Participant the net worth of such individual may be any amount not exceeding $750,000 and for purposes of continued eligibility after admission the net worth of such individual may be any amount not exceeding $2,250,000. For purposes of eligibility for admission as a Program Participant and continued eligibility after admission, the modified adjusted gross income (as such term is defined in section 25A(d)(3) of the Internal Revenue Code of 1986) of such individual for an applicable taxable year may be any amount not exceeding $500,000.. (2)

Completed periods of participation

If the Administrator of the Small Business Administration graduated a small business concern from the program under section 8(a) of the Small Business Act (15 U.S.C. 637(a)) prior to the date of enactment of this Act as a result of a determination that such concern did not meet standards relating to economic disadvantage and such concern meets requirements under such section as amended by this Act, such concern may participate in such program for a period— (A)of 11 years less the period of time such concern previously participated in such program; and (B)beginning on the date of enactment of this Act.