[Congressional Record Volume 140, Number 117 (Thursday, August 18, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 18, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
    SMALL BUSINESS ADMINISTRATION REAUTHORIZATION AND AMENDMENT ACT

  Mr. FORD. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of calendar number 561, S. 2060, 
the Small Business Administration Reauthorization.
  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Small Business, with an 
amendment to strike out all after the enacting clause, and inserting in 
lieu thereof the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Administration Reauthorization and Amendment Act of 
     1994''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorizations.

                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

Sec. 201. Microloan financing pilot.
Sec. 202. Eligibility of Native American tribal governments to be 
              microloan intermediaries.
Sec. 203. Microloan program extension.
Sec. 204. Microloan program funding and State limitations.
Sec. 205. Distribution of intermediaries.
Sec. 206. Microloan intermediary loan limitation.
Sec. 207. Microloan technical assistance to nonborrowers.
Sec. 208. Microloan demonstration program grants.
Sec. 209. Eligibility to participate as a microloan intermediary and a 
              technical assistance provider.
Sec. 210. Loans to exporters.
Sec. 211. Working capital international trade loans.
Sec. 212. Guarantees on international trade loans.
Sec. 213. Accredited lenders program.
Sec. 214. Interest rate on certified development company loans.
Sec. 215. Certifications of eligibility for SBIC and SSBIC financing.
Sec. 216. Participating securities for smaller SBICs.

             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

Sec. 301. Size standard criteria.
Sec. 302. Sunset on preferred surety bond guarantee program.
Sec. 303. Manufacturing contracts through manufacturing application and 
              education centers.

               TITLE IV--BUSINESS DEVELOPMENT ASSISTANCE

                     Subtitle A--General Provisions

Sec. 401. Sunset on cosponsored training.
Sec. 402. Small business development center program level.
Sec. 403. Federal contracts with small business development centers.
Sec. 404. Small business development center program examination and 
              certification.
Sec. 405. Service Corps of Retired Executives (SCORE) program.
Sec. 406. Information concerning franchising.

           Subtitle B--Development of Woman-Owned Businesses

Sec. 411. Extension of authority for demonstration projects.
Sec. 412. Establishment of Office of Women's Business Ownership.
Sec. 413. National Commission on Women in Business.

          TITLE V--RELIEF FROM DEBENTURE PREPAYMENT PENALTIES

Sec. 501. Short title.
Sec. 502. Prepayment of development company debentures.

                   TITLE VI--MISCELLANEOUS AMENDMENTS

Sec. 601. Consolidation of funding accounts.
Sec. 602. Imposition of fees.
Sec. 603. Job creation and community benefit.
Sec. 604. Microloan program amendments.
Sec. 605. Technical clarification.
Sec. 606. Secondary market study due date.
Sec. 607. Study and data base: Guaranteed Business Loan Program and 
              Development Company Program.
Sec. 608. SBIR vendors.
Sec. 609. Program extension.
Sec. 610. Prohibition on the use of funds for individuals not lawfully 
              within the United States.
Sec. 611. Office of advocacy employees.
Sec. 612. Prohibition on the provision of assistance.
Sec. 613. Certification of compliance with child support obligations.
                        TITLE I--AUTHORIZATIONS

     SEC. 101. AUTHORIZATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended by striking subsections (k) (as added by section 
     405(3) of the Small Business Credit and Business Opportunity 
     Enhancement Act of 1992) through (p) and inserting the 
     following:
       ``(l) The following program levels are authorized for 
     fiscal year 1995:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $110,000,000 in direct 
     and immediate participation loans, and $45,000,000 in 
     technical assistance grants as provided in section 7(m).
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $13,315,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $9,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $2,300,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $2,000,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $15,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $33,000,000 in purchases of preferred securities;
       ``(B) $275,000,000 in guarantees of debentures, of which 
     $65,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $500,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $1,800,000,000, of which not more than $450,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter into cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $3,500,000;
       ``(B) for the Small Business Institute program authorized 
     by section 8(b)(1), $3,000,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), $25,000,000, to remain 
     available until expended.
       ``(m) There are authorized to be appropriated to the 
     Administration for fiscal year 1995 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.
       ``(n) The following program levels are authorized for 
     fiscal year 1996:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $175,000,000 in direct 
     and immediate participation loans, and $65,000,000 in 
     technical assistance grants as provided in section 7(m).
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $15,320,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $10,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $2,800,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $2,500,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $20,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $39,000,000 in purchases of preferred securities;
       ``(B) $300,000,000 in guarantees of debentures, of which 
     $70,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $750,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000, of which not more than $500,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $3,750,000;
       ``(B) for the small business institute program authorized 
     by section 8(b)(1), $3,250,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $25,000,000, 
     to remain available until expended.
       ``(o) There are authorized to be appropriated to the 
     Administration for fiscal year 1996 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.
       ``(p) The following program levels are authorized for 
     fiscal year 1997:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $250,000,000 in direct 
     and immediate participation loans and $98,000,000 in 
     technical assistance grants as provided in section 7(m), to 
     remain available until expended.
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $19,020,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $12,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $3,500,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $3,500,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $20,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $45,000,000 in purchases of preferred securities;
       ``(B) $375,000,000 in guarantees of debentures, of which 
     $75,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $1,125,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,200,000,000, of which not more than $650,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $4,000,000;
       ``(B) for the small business institute program authorized 
     by section 8(b)(1), $3,500,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $25,000,000, 
     to remain available until expended.
       ``(q) There are authorized to be appropriated to the 
     Administration for fiscal year 1997 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.''.
                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

     SEC. 201. MICROLOAN FINANCING PILOT.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
     is amended by adding at the end the following new paragraph:
       ``(12) Deferred participation loan pilot.--In lieu of 
     making direct loans to intermediaries as authorized in 
     paragraph (1)(B), during fiscal years 1995 through 1997, the 
     Administration may, on a pilot program basis, participate on 
     a deferred basis of not less than 90 percent and not more 
     than 100 percent on loans made to intermediaries by a for-
     profit or nonprofit entity or by alliances of such entities, 
     subject to the following conditions:
       ``(A) Number of loans.--In carrying out this paragraph, the 
     Administration shall not participate in providing financing 
     on a deferred basis to more than 10 intermediaries in urban 
     areas or more than 10 intermediaries in rural areas.
       ``(B) Term of loans.--The term of each loan shall be 10 
     years. During the first year of the loan, the intermediary 
     shall not be required to repay any interest or principal. 
     During the second through fifth years of the loan, the 
     intermediary shall be required to pay interest only. During 
     the sixth through tenth years of the loan, the intermediary 
     shall be required to make interest payments and fully 
     amortize the principal.
       ``(C) Interest rate.--The interest rate on each loan shall 
     be the rate specified by paragraph (3)(F) for direct loans. 
     Subject to the availability of appropriations, the 
     Administration may make payments to lenders on behalf of 
     intermediaries in order to achieve such interest rate.''.

     SEC. 202. ELIGIBILITY OF NATIVE AMERICAN TRIBAL GOVERNMENTS 
                   TO BE MICROLOAN INTERMEDIARIES.

       Section 7(m)(11)(A) of the Small Business Act (15 U.S.C. 
     636(m)(11)(A)) is amended--
       (1) in clause (iii), by striking ``or'' at the end;
       (2) in clause (iv), by striking the comma at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following new clause:
       ``(v) an agency of or nonprofit entity established by a 
     Native American Tribal Government,''.

     SEC. 203. MICROLOAN PROGRAM EXTENSION.

       Section 609(j) of Public Law 102-140 (105 Stat. 831) is 
     amended by striking ``5 years after the date of enactment of 
     this Act'', and inserting ``on October 1, 1998''.

     SEC. 204. MICROLOAN PROGRAM FUNDING AND STATE LIMITATIONS.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
     is amended--
       (1) in paragraph (5)(A)--
       (A) by striking ``25 grants'' and inserting ``50 grants''; 
     and
       (B) by striking ``$125,000'' and inserting ``$150,000''; 
     and
       (2) by striking paragraph (7) and inserting the following:
       ``(7) Program funding for microloans.--
       ``(A) Number of participants.--In carrying out paragraph 
     (1)(B)(i), the Administration may fund, on a competitive 
     basis, not more than--
       ``(i) 150 microloan programs in fiscal year 1995; and
       ``(ii) 200 microloan programs in each succeeding fiscal 
     year.
       ``(B) State limitations.--A State shall not receive more 
     than $10,000,000 in loan funds during any year of program 
     participation.''.

     SEC. 205. DISTRIBUTION OF INTERMEDIARIES.

       Section 7(m)(8) of the Small Business Act (15 U.S.C. 
     636(m)(8)) is amended to read as follows:
       ``(8) Distribution of intermediaries.--In approving 
     microloan program applicants under this subsection, the 
     Administration shall select such intermediaries as will 
     further microloan availability for small businesses in all 
     industries located throughout each State, especially small 
     businesses located in economically distressed urban and rural 
     areas.''.

     SEC. 206. MICROLOAN INTERMEDIARY LOAN LIMITATION.

       Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
     636(m)(3)(C)) is amended by striking ``$1,250,000'' and 
     inserting ``$2,000,000''.

     SEC. 207. MICROLOAN TECHNICAL ASSISTANCE TO NONBORROWERS.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Assistance to certain small business concerns.--Each 
     intermediary may expend an amount not to exceed 20 percent of 
     the grant funds authorized under paragraph (1)(B)(ii) to 
     provide marketing, management, and technical assistance to 
     small business concerns that are not borrowers under this 
     subsection.''.

     SEC. 208. MICROLOAN DEMONSTRATION PROGRAM GRANTS.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended--
       (1) in subparagraph (B), by inserting ``except for a grant 
     made to an intermediary that provides not less than 50 
     percent of its loans to small business concerns owned by one 
     or more members of a federally recognized Indian tribe,'' 
     after ``under subparagraph (A),''; and
       (2) in subparagraph (C), by striking clause (i) and 
     inserting the following:
       ``(i) In general.--In addition to grants made under 
     subparagraph (A), each intermediary shall be eligible to 
     receive a grant equal to 5 percent of the total outstanding 
     balance of loans made to the intermediary under this 
     subsection if--

       ``(I) the intermediary provides not less than 25 percent of 
     its loans to small business concerns owned by one or more 
     members of a federally recognized Indian tribe; or
       ``(II) the intermediary has a portfolio of loans made under 
     this subsection that averages not more than $7,500 during the 
     period of the intermediary's participation in the program.''.

     SEC. 209. ELIGIBILITY TO PARTICIPATE AS A MICROLOAN 
                   INTERMEDIARY AND A TECHNICAL ASSISTANCE 
                   PROVIDER.

       Section 7(m)(2) of the Small Business Act (15 U.S.C. 
     636(m)(2)) is amended--
       (1) by striking ``(2) Eligibility for participation.--An'' 
     and inserting the following:
       ``(2) Eligibility for participation.--
       ``(A) In general.--An'';
       (2) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and indenting accordingly; and
       (3) by adding at the end the following new subparagraph:
       ``(B) Participation as intermediary and technical 
     assistance provider.--A single entity may simultaneously 
     receive 1 grant as an intermediary pursuant to paragraph 
     (1)(B)(ii) and 1 grant as a nonintermediary technical 
     assistance provider pursuant to paragraph (1)(B)(iii) if the 
     Administration determines that--
       ``(i) the purposes of the grants are not duplicative;
       ``(ii) the grants will enable the entity to provide 
     technical assistance to different geographic areas, or to 
     support both guaranteed and direct loans in the same 
     geographic area; and
       ``(iii) the entity meets all of the requirements of the 
     programs authorized pursuant to clauses (ii) and (iii) of 
     paragraph (1)(B).''.

     SEC. 210. LOANS TO EXPORTERS.

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

     SEC. 211. WORKING CAPITAL INTERNATIONAL TRADE LOANS.

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

     SEC. 212. GUARANTEES ON INTERNATIONAL TRADE LOANS.

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

     SEC. 213. ACCREDITED LENDERS PROGRAM.

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

     ``SEC. 507. ACCREDITED LENDERS PROGRAM.

       ``(a) Establishment.--The Administration is authorized to 
     establish an Accredited Lenders Program for qualified State 
     and local development companies that meet the requirements of 
     subsection (b).
       ``(b) Requirements.--The Administration may designate a 
     qualified State or local development company as an accredited 
     lender if such company--
       ``(1) has been an active participant in the Development 
     Company Program authorized by sections 502, 503, and 504 for 
     not less than the preceding 12 months;
       ``(2) has well-trained, qualified personnel who are 
     knowledgeable in the Administration's lending policies and 
     procedures for such Development Company Program;
       ``(3) has the ability to process, close, and service 
     financing for plant and equipment under such Development 
     Company Program;
       ``(4) has a reasonable and acceptable loss rate on the 
     company's debentures;
       ``(5) has a history of submitting to the Administration 
     complete and accurate debenture guaranty application 
     packages; and
       ``(6) has demonstrated the ability to serve small business 
     credit needs for financing plant and equipment through the 
     Development Company Program authorized by sections 502, 503, 
     and 504.
       ``(c) Expedited Processing of Loan Applications.--The 
     Administration shall develop an expedited procedure for 
     processing a loan application or servicing action submitted 
     by a qualified State or local development company that has 
     been designated as an accredited lender in accordance with 
     subsection (b).
       ``(d) Suspension or Revocation of Designation.--
       ``(1) In general.--The designation of a qualified State or 
     local development company as an accredited lender may be 
     suspended or revoked if the Administration determines that--
       ``(A) the development company has not continued to meet the 
     criteria for eligibility under subsection (b); or
       ``(B) the development company has failed to adhere to the 
     Administration's rules and regulations or is violating any 
     other applicable provision of law.
       ``(2) Effect.--A suspension or revocation under paragraph 
     (1) shall not affect any outstanding debenture guarantee.
       ``(e) Definition.--For purposes of this section, the term 
     `qualified State or local development company' has the same 
     meaning as in section 503(e).''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this Act, the Administration shall promulgate 
     final regulations to carry out this section.
       (c) Report.--Not later than 1 year after the effective date 
     of regulations promulgated under subsection (b), the 
     Administration shall report to the Committees on Small 
     Business of the Senate and the House of Representatives on 
     the implementation of this section. Such report shall include 
     data on the number of development companies designated as 
     accredited lenders, their debenture guarantee volume, their 
     loss rates, the average processing time on their guarantee 
     applications, and such other information as the 
     Administration deems appropriate.

     SEC. 214. INTEREST RATE ON CERTIFIED DEVELOPMENT COMPANY 
                   LOANS.

       Section 112(c) of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (102 Stat. 2996) is 
     amended--
       (1) in paragraph (1), by striking ``(1) In General.--
     Section 503'' and inserting ``Section 503''; and
       (2) by striking paragraph (2).

     SEC. 215. CERTIFICATIONS OF ELIGIBILITY FOR SBIC AND SSBIC 
                   FINANCING.

       Section 308 of the Small Business Investment Act of 1958 
     (15 U.S.C. 687) is amended by adding at the end the following 
     new subsection:
       ``(h) Certifications of Eligibility.--
       ``(1) Certification by small business concern.--Prior to 
     receiving financial assistance from a company licensed 
     pursuant to subsection (c) or (d) of section 301, a small 
     business concern shall certify in writing that it meets the 
     eligibility requirements of the Small Business Investment 
     Company Program or the Specialized Small Business Investment 
     Company Program, as applicable.
       ``(2) Certification by company.--Prior to providing 
     financial assistance to a small business concern under this 
     Act, a company licensed pursuant to subsection (c) or (d) of 
     section 301 shall certify in writing that it has reviewed the 
     application for assistance of the small business concern and 
     that all documentation and other information supports the 
     eligibility of the applicant.
       ``(3) Retention of certifications.--Certificates made 
     pursuant to paragraphs (1) and (2) shall be retained by the 
     company licensed pursuant to subsection (c) or (d) of section 
     301 for the duration of the financial assistance.''.

     SEC. 216. PARTICIPATING SECURITIES FOR SMALLER SBICS.

       Section 303(g) of the Small Business Investment Act of 1958 
     (15 U.S.C. 683(g)) is amended by adding at the end the 
     following new paragraph:
       ``(13) Participating securities for smaller small business 
     investment companies.--
       ``(A) In general.--Subject to the provisions of 
     subparagraph (B), of the amount of the annual program level 
     of participating securities approved in appropriations Acts, 
     50 percent shall be reserved for funding small business 
     investment companies with private capital of less than 
     $20,000,000.
       ``(B) Exception.--During the last quarter of each fiscal 
     year, if the Administrator determines that there is a lack of 
     qualified applicants with private capital of less than 
     $20,000,000, the Administrator may utilize all or any part of 
     the program level for securities reserved under subparagraph 
     (A) for qualified applicants with private capital of 
     $20,000,000 or more.''.
             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

     SEC. 301. SIZE STANDARD CRITERIA.

       Section 3(a)(2) of the Small Business Act (15 U.S.C. 
     632(a)(2)) is amended to read as follows:
       ``(2) Size standard criteria.--
       ``(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, or a combination thereof.
       ``(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; and

       ``(III) the size of other business concerns on the basis of 
     data over a period of not less than 3 years; and

       ``(iii) is approved by the Administrator.''.

     SEC. 302. SUNSET ON PREFERRED SURETY BOND GUARANTEE PROGRAM.

       Section 207 of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (15 U.S.C. 694b 
     note) is amended by striking ``September 30, 1994'' and 
     inserting ``September 30, 1995''.

     SEC. 303. MANUFACTURING CONTRACTS THROUGH MANUFACTURING 
                   APPLICATION AND EDUCATION CENTERS.

       (a) In General.--The Small Business Administration shall 
     promote the award of Federal manufacturing contracts to small 
     business concerns that participate in manufacturing 
     application and education centers by working with the 
     Department of Commerce and other agencies to identify 
     components and subsystems that are both critical and 
     currently foreign-sourced.
       (b) Qualifications.--In order to qualify as a manufacturing 
     application and education center under this section, an 
     entity shall have the capacity to assist small business 
     concerns in a shared-use production environment and to offer 
     the following services:
       (1) Technology demonstration.
       (2) Technology education.
       (3) Technology application support.
       (4) Technology advancement support.
       (c) Inapplicability of Certain Requirements.--The 
     requirements of section 15(o)(1)(B) of the Small Business Act 
     shall not apply with respect to any manufacturing contract 
     carried out by a small business concern in conjunction with a 
     manufacturing application and education center under this 
     section.
       (d) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration shall promulgate final regulations to 
     carry out this section.
       (e) Termination of Authority.--The authority of the Small 
     Business Administration under this section shall terminate on 
     September 30, 1997.
               TITLE IV--BUSINESS DEVELOPMENT ASSISTANCE
                     Subtitle A--General Provisions

     SEC. 401. SUNSET ON COSPONSORED TRAINING.

       (a) In General.--
       (1) Repeal.--The amendments made by section 5(a) of Small 
     Business Computer Security and Education Act of 1984 (15 
     U.S.C. 633 note) are hereby repealed.
       (2) Effective date.--Paragraph (1) shall take effect on 
     September 30, 1997.
       (b) Conforming Amendment.--Section 7(b) of the Small 
     Business Computer Security and Education Act of 1984 (15 
     U.S.C. 633 note) is amended in the second sentence by 
     striking ``and the amendments made to section 8(b)(1)(A) of 
     the Small Business Act by section 5(a)(2) of this Act are'' 
     and inserting ``is''.

     SEC. 402. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.

       Section 21(a)(4) of the Small Business Act (15 U.S.C. 
     648(a)(4)) is amended to read as follows:
       ``(4) Small Business Development Center Program Level.--
       ``(A) In general.--The Administration shall require as a 
     condition of any grant (or amendment or modification thereof) 
     made to an applicant under this section, that a matching 
     amount (excluding any fees collected from recipients of such 
     assistance) equal to the amount of such grant be provided 
     from sources other than the Federal Government, to be 
     comprised of not less than 50 percent cash and not more than 
     50 percent of indirect costs and in-kind contributions.
       ``(B) Restriction.--The matching amount described in 
     subparagraph (A) shall not include any indirect costs or in-
     kind contributions derived from any Federal program.
       ``(C) National program.--
       ``(i) In general.--No recipient of funds under this section 
     shall receive a grant that exceeds--
       ``(I) for fiscal year 1995, the greater of--

       ``(aa) the sum of such recipient's pro rata share of a 
     national program based upon the population to be served by 
     the small business development center as compared to the 
     total population in the United States, and $100,000; or
       ``(bb) $200,000; and

       ``(II) except as provided in clause (ii), in each 
     succeeding fiscal year, the greater of--

       ``(aa) the sum of such recipient's pro rata share of a 
     national program based upon the population to be served by 
     the small business development center as compared to the 
     total population in the United States, and $200,000; or
       ``(bb) $300,000.

       ``(ii) Exception.--The provisions of clause (i)(I) shall 
     apply in any fiscal year after fiscal year 1995 in which, 
     based on funds appropriated, a small business development 
     center would, under the provisions of clause (i)(II), receive 
     less than the small business development center received in 
     fiscal year 1995.
       ``(iii) Amount.--The amount of the national program shall 
     be--
       ``(I) $70,000,000 through September 30, 1995;
       ``(II) $77,500,000 from October 1, 1995 through September 
     30, 1996; and
       ``(III) $85,000,000 beginning October 1, 1996.
     The amount for which a small business development center is 
     eligible under this paragraph shall be based upon the amount 
     of the national program in effect as of the date for 
     commencement of performance of the small business development 
     center's grant.''.

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

       Section 21(a)(5) of the Small Business Act (15 U.S.C. 
     648(a)(5)) is amended to read as follows:
       ``(5) Federal Contracts With Small Business Development 
     Centers.--
       ``(A) In general.--A small business development center may 
     enter into a contract with a Federal department or agency to 
     provide specific assistance to small business concerns, if 
     the contract is approved in advance by the Associate 
     Administrator of the small business development center 
     program.
       ``(B) Approval criteria.--Each approval of a contract under 
     subparagraph (A) shall be based upon a determination that the 
     contract will provide assistance to small business concerns 
     and that performance of the contract will not hinder the 
     small business development center in carrying out the terms 
     of the grant received by the small business development 
     center from the Administration.
       ``(C) Exemption from matching requirement.--A contract 
     under this paragraph shall not be subject to the matching 
     funds or eligibility requirements of paragraph (4).
       ``(D) Additional provision.--Notwithstanding any other 
     provision of law, a contract for assistance under this 
     paragraph may not be applied to any Federal department or 
     agency's small business, woman-owned business, or socially 
     and economically disadvantaged business contracting goal 
     under section 15(g).''.

     SEC. 404. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM 
                   EXAMINATION AND CERTIFICATION.

       Section 21(k) of the Small Business Act (15 U.S.C. 648(k)) 
     is amended to read as follows:
       ``(k) Program Examination and Certification.--
       ``(1) Examination.--Not later than 180 days after the date 
     of enactment of this subsection, the Administration shall 
     develop and implement a biannual programmatic and financial 
     examination of each small business development center 
     established pursuant to this section.
       ``(2) Certification.--The Administration may provide 
     financial support, by contract or otherwise, to the 
     association authorized by subsection (a)(3)(A) for the 
     purpose of developing a small business development center 
     certification program.
       ``(3) Extension or renewal of cooperative agreements.--In 
     extending or renewing a cooperative agreement of a small 
     business development center, the Administration shall 
     consider the results of the examination and certification 
     program conducted pursuant to paragraphs (1) and (2).''.

     SEC. 405. SERVICE CORPS OF RETIRED EXECUTIVES (SCORE) 
                   PROGRAM.

       Section 8(b)(1) of the Small Business Act (15 U.S.C. 
     637(b)(1)) is amended by adding at the end the following new 
     subparagraph:
       ``(H) In carrying out subparagraph (B), the Administration 
     shall encourage the Service Corps of Retired Executives 
     (SCORE) established pursuant to such subparagraph, to the 
     maximum extent practicable, to consult and work in 
     conjunction with the Corporation for National and Community 
     Service and the Points of Light Foundation established under 
     the National and Community Service Act of 1990.''.

     SEC. 406. INFORMATION CONCERNING FRANCHISING.

       Section 8(b)(1)(A) of the Small Business Act (15 U.S.C. 
     637(b)(1)(A)) is amended by inserting ``including information 
     on the benefits and risks of franchising,'' after ``small-
     business enterprises,''.
           Subtitle B--Development of Woman-Owned Businesses

     SEC. 411. EXTENSION OF AUTHORITY FOR DEMONSTRATION PROJECTS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 28 (as added by section 2 of 
     the Women's Business Development Act of 1991) as section 29; 
     and
       (2) in section 29(g), as redesignated, by striking ``1995'' 
     and inserting ``1997''.

     SEC. 412. ESTABLISHMENT OF OFFICE OF WOMEN'S BUSINESS 
                   OWNERSHIP.

       Section 29 of the Small Business Act (15 U.S.C. 656), as 
     redesignated by section 411, is amended by adding at the end 
     the following new subsection:
       ``(h) Office of Women's Business Ownership.--There is 
     hereby established within the Administration an Office of 
     Women's Business Ownership, which shall be responsible for 
     the administration of the Administration's programs for the 
     development of women's business enterprises, as such term is 
     defined in section 408 of the Women's Business Ownership Act 
     of 1988. The Office of Women's Business Ownership shall be 
     administered by an Assistant Administrator, who shall be 
     appointed by the Administrator.''.

     SEC. 413. NATIONAL COMMISSION ON WOMEN IN BUSINESS.

       (a) Establishment.--Section 401 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended to read 
     as follows:

     ``SEC. 401. ESTABLISHMENT.

       ``There is hereby established a Commission to be known as 
     the `National Commission on Women in Business' (hereafter in 
     this title referred to as the `Commission').''.
       (b) Duties of the Commission.--Section 402 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. 631 note) is 
     amended to read as follows:

     ``SEC. 402. DUTIES OF THE COMMISSION.

       ``The Commission shall--
       ``(1) review, promote, coordinate, and monitor plans and 
     programs, developed in the public and private sectors, which 
     affect the ability of woman-owned businesses to obtain 
     capital and credit;
       ``(2) promote and assist in the development of the 
     Intermediate Census on Women's Business Ownership and other 
     surveys of woman-owned businesses;
       ``(3) provide assistance to and outreach for the 
     involvement of women business owners in White House 
     Conference on Small Business;
       ``(4) study and assess--
       ``(A) the obstacles faced by women seeking to establish 
     businesses and women seeking senior management positions in 
     large and small businesses and in the professions; and
       ``(B) the contributions to the Nation's economy by 
     businesses owned or managed by women; and
       ``(5) design a comprehensive plan for a joint public-
     private sector effort to facilitate the development and 
     growth of woman-owned businesses.
       ``(b) Report.--Not later than January 31, 1996, the 
     Commission shall submit a report to the President and the 
     Committees on Small Business of the Senate and the House of 
     Representatives describing the plan developed pursuant to 
     subsection (a)(5).''.
       (c) Membership.--Section 403 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended to read 
     as follows:

     ``SEC. 403. MEMBERSHIP OF THE COMMISSION.

       ``(a) In General.--The Commission shall be composed of 14 
     members, of whom--
       ``(1) 7 members shall be the individuals described in 
     subsection (b); and
       ``(2) 7 members shall be appointed in accordance with 
     subsection (c).
       ``(b) Public Sector Members.--For purposes of subsection 
     (a)(1), the individuals described in this section are--
       ``(1) the Administrator of the Small Business 
     Administration;
       ``(2) the Assistant Administrator of the Office of Women's 
     Business Ownership of the Small Business Administration;
       ``(3) the Secretary of the Treasury, or the Secretary's 
     designee;
       ``(4) the Secretary of Labor, or the Secretary's designee;
       ``(5) the Secretary of Commerce, or the Secretary's 
     designee;
       ``(6) the Administrator of the General Services 
     Administration, or the Administrator's designee; and
       ``(7) 1 member of the Board of Governors of the Federal 
     Reserve System, or the designee of a member.
       ``(c) Private Sector Members.--
       ``(1) Chairperson.--Not later than 45 days after the date 
     of enactment of the Small Business Administration 
     Reauthorization and Amendment Act of 1994, the President 
     shall appoint an individual to serve as the chairperson of 
     the Commission (hereafter in this title referred to as the 
     `Chairperson') who shall be a prominent business-woman who is 
     qualified to head the Commission by virtue of her education, 
     training, and experience.
       ``(2) Other members.--Not later than 60 days after the date 
     of enactment of the Small Business Administration 
     Reauthorization and Amendment Act of 1994, the Administrator 
     of the Small Business Administration shall appoint 6 members 
     of the Commission, of whom--
       ``(A) 1 shall be an owner of a small business concern, as 
     such term is defined in section 3 of the Small Business Act, 
     who is a member of the same political party as the President;
       ``(B) 1 shall be an owner of a small business concern, as 
     such term is defined in section 3 of the Small Business Act, 
     who is not a member of the same political party as the 
     President; and
       ``(C) 4 shall be representatives of national women's 
     business organizations.
       ``(d) Administrative Provisions.--
       ``(1) Restriction.--The members of the Commission appointed 
     pursuant to subsection (c) shall not be officers or employees 
     of the Federal Government.
       ``(2) Vice chairperson.--The member of the Commission 
     appointed pursuant to subsection (b)(2) shall serve as vice 
     chairperson of the Commission.
       ``(3) Terms.--The term of service of the members of the 
     Commission appointed pursuant to subsection (c) shall be 1 
     year. No member of the Commission may serve for more than 2 
     consecutive terms.
       ``(4) Designees.--Each designee appointed pursuant to 
     subsection (b) shall--
       ``(A) be a policy-making official whose duties are 
     consistent with the duties of the Commission; and
       ``(B) report directly to the head of the agency on the 
     activities of the Commission.
       ``(5) Compensation and travel expenses.--
       ``(A) Public sector members.--The members of the Commission 
     described in subsection (b) shall serve on the Commission 
     without additional compensation.
       ``(B) Private sector members.--The members of the 
     Commission appointed pursuant to subsection (c) shall serve 
     without pay for membership, except that such members shall be 
     entitled to reimbursement for domestic travel, subsistence, 
     and other necessary expenses incurred by them in carrying out 
     the functions of the Commission in the same manner as persons 
     serving on advisory boards pursuant to section 8(b) of the 
     Small Business Act.
       ``(6) Vacancies.--A vacancy on the Commission shall, not 
     later than 30 days after the date on which the vacancy 
     occurs, be filled in the same manner in which the original 
     appointment was made.
       ``(7) Meetings.--The Commission shall meet at the call of 
     the Chairperson not less than 4 times each year.
       ``(8) Quorums.--
       ``(A) Receipt of testimony.--Four members of the Commission 
     shall constitute a quorum for the receipt of testimony and 
     other evidence.
       ``(B) Approval of recommendations.--A majority of the 
     members of the Commission shall constitute a quorum for the 
     approval of recommendations or reports issued pursuant to 
     sections 402 and 406.''.
       (d) Executive Director and Staff.--Section 404 of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. 631 note) 
     is amended to read as follows:

     ``SEC. 404. EXECUTIVE DIRECTOR AND STAFF.

       ``(a) Executive Director.--The Commission shall have an 
     Executive Director who shall be appointed by the Chairperson 
     and the Assistant Administrator of the Small Business 
     Administration Office of Women's Business Ownership. Upon the 
     recommendation by the Executive Director, the Chairperson may 
     appoint and fix the pay of 4 additional employees at a rate 
     of pay not to exceed the maximum rate of pay payable for a 
     position at GS-15 of the General Schedule.
       ``(b) Administrative Provisions.--The Executive Director 
     and staff of the Commission may be appointed without regard 
     to the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and except as 
     provided in subsection (a), may be paid without regard to the 
     provisions of chapter 51 and subchapter III of chapter 53 of 
     such title relating to classification and General Schedule 
     pay rates, except that the Executive Director so appointed 
     may not receive pay in excess of the annual rate of basic pay 
     payable for a position at ES-1 of the Senior Executive Pay 
     Schedule under section 5832 of title 5, United States Code.
       ``(c) Detail of Additional Personnel.--Upon request to the 
     Chairperson, the head of any Federal department or agency may 
     detail any of the personnel of such agency to the Commission 
     to assist the Commission in carrying out its duties under 
     this title without regard to section 3341 of title 5, United 
     States Code.''.
       (e) Powers of the Commission.--Section 405 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. 631 note) is 
     amended--
       (1) by striking ``Council'' each place it appears and 
     inserting ``Commission''; and
       (2) by adding at the end the following new subsection:
       ``(f) Cooperation with Private Entities.--
       ``(1) In general.--Subject to the requirements of paragraph 
     (2), the Commission may carry out its duties under section 
     402 through cooperation with private nonprofit and for-profit 
     entities.
       ``(2) Restriction.--If the Commission cooperates with 
     private entities pursuant to paragraph (1), the Commission 
     shall ensure that--
       ``(A) the Commission receives appropriate recognition and 
     publicity;
       ``(B) the cooperation does not constitute or imply an 
     endorsement by the Commission of the products and services of 
     the cosponsor; and
       ``(C) the Commission avoids unnecessary promotion of the 
     products and services of the cosponsor and minimizes 
     utilization of any 1 cosponsor in a marketing area.''.
       (f) Reports.--Section 406 of the Women's Business Ownership 
     Act of 1988 (15 U.S.C. 631 note) is amended--
       (1) by striking ``Council'' each place it appears and 
     inserting ``Commission'';
       (2) by striking ``December 31, 1989'' and inserting ``not 
     later than 1 year after the date of enactment of the Small 
     Business Administration Reauthorization and Amendment Act of 
     1994''; and
       (3) by striking ``based upon its reviews conducted under 
     section 402''.
       (g) Authorization.--Section 407 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--There are authorized to be appropriated 
     to carry out this title--
       ``(1) $500,000 in fiscal year 1995;
       ``(2) $500,000 is fiscal year 1996; and
       ``(3) $100,000 in fiscal year 1997.''; and
       (2) by striking subsection (c).
       (h) Transition Reimbursement.--In order to facilitate the 
     transition from the National Women's Business Council, 
     established by title IV of the Women's Business Ownership Act 
     of 1988, to the National Commission on Women in Business 
     established by this section, the National Commission on Women 
     in Business may, during the 30-day period beginning on the 
     date on which the Chairperson of the National Commission on 
     Women in Business is appointed pursuant to section 413 of 
     this Act, reimburse the costs and salaries, where 
     appropriate, of the Chairperson, Executive Director, and 
     staff of the National Women's Business Council for transition 
     activities .
       (i) Sunset.--The authority of the National Commission on 
     Women in Business established under title IV of the Women's 
     Business Ownership Act of 1988, as amended by this section, 
     shall terminate on November 30, 1996.
          TITLE V--RELIEF FROM DEBENTURE PREPAYMENT PENALTIES

     SEC. 501. SHORT TITLE.

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

     SEC. 502. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

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

     ``SEC. 508. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

       ``(a) In General.--
       ``(1) Prepayment authorized.--Subject to the requirements 
     set forth in subsection (b), an issuer of a debenture 
     purchased by the Federal Financing Bank and guaranteed by the 
     Administration under section 503 may, at the election of the 
     borrower whose loan secures such debenture and with the 
     approval of the Administration, prepay such debenture in 
     accordance with the provisions of this section.
       ``(2) Procedure.--
       ``(A) In general.--In making a prepayment under paragraph 
     (1)--
       ``(i) the borrower shall pay to the Federal Financing Bank 
     an amount that is equal to the sum of the unpaid principal 
     balance due on the debenture as of the date of the prepayment 
     (plus accrued interest at the coupon rate on the debenture) 
     and the amount of the repurchase premium described in 
     subparagraph (B); and
       ``(ii) the Administration shall pay to the Federal 
     Financing Bank the difference between the repurchase premium 
     paid by the borrower under this subsection and the repurchase 
     premium that the Federal Financing Bank would otherwise have 
     received.
       ``(B) Repurchase premium.--
       ``(i) In general.--For purposes of subparagraph (A)(i), the 
     repurchase premium is the amount equal to the product of--

       ``(I) the unpaid principal balance due on the debenture on 
     the date of prepayment; and
       ``(II) the applicable percentage rate, as determined in 
     accordance clause (ii).

       ``(ii) Applicable percentage rate.--For purposes of clause 
     (i)(II), the applicable percentage rate means--

       ``(I) with respect to a 10-year term loan, 9.5 percent;
       ``(II) with respect to a 15-year term loan, 9.5 percent;
       ``(III) with respect to a 20-year term loan, 10.5 percent; 
     and
       ``(IV) with respect to a 25-year term loan, 11.5 percent.

       ``(b) Requirements.--For purposes of subsection (a), the 
     requirements of this subsection are that--
       ``(1) the debenture is outstanding and neither the loan 
     that secures the debenture nor the debenture is in default on 
     the date on which the prepayment is made;
       ``(2) State, local, or personal funds, or the proceeds of a 
     refinancing in accordance with subsection (d) of this section 
     under the programs authorized by sections 504 and 505, are 
     used to prepay the debenture; and
       ``(3) the issuer certifies that the benefits, net of fees 
     and expenses authorized herein, associated with prepayment of 
     the debenture are entirely passed through to the borrower.
       ``(c) No Prepayment Fees or Penalties.--No fees or 
     penalties other than those specified in this section may be 
     imposed on the issuer, the borrower, the Administration, or 
     any fund or account administered by the Administration as the 
     result of a prepayment under this section.
       ``(d) Refinancing Limitations.--
       ``(1) In general.--The refinancing of a debenture under 
     sections 504 and 505, in accordance with subsection (b)(2) of 
     this section--
       ``(A) shall not exceed the amount necessary to prepay 
     existing debentures, including all costs associated with the 
     refinancing and any applicable prepayment penalty or 
     repurchase premium; and
       ``(B) shall be subject to the provisions of sections 504 
     and 505 and the rules and regulations promulgated thereunder, 
     including rules and regulations governing payment of 
     authorized expenses, commissions, fees, and discounts to 
     brokers and dealers in trust certificates issued pursuant to 
     section 505.
       ``(2) Job creation.--An applicant for refinancing under 
     section 504 of a loan made pursuant to section 503 shall not 
     be required to demonstrate that a requisite number of jobs 
     will be created with the proceeds of a refinancing.
       ``(3) Loan processing fee.--To cover the cost of loan 
     packaging, processing, and other administrative functions, a 
     development company that provides refinancing under 
     subsection (b)(2) may impose a loan processing fee, not to 
     exceed 0.5 percent of the principal amount of the loan.
       ``(e) Definitions.--For purposes of this section--
       ``(1) the term `issuer' means the qualified State or local 
     development company that issued a debenture pursuant to 
     section 503, which has been purchased by the Federal 
     Financing Bank; and
       ``(2) the term `borrower' means a small business concern 
     whose loan secures a debenture issued pursuant to section 
     503.''.
       (b) Regulations.--Not later than 30 days after the date of 
     enactment of this Act, the Administration shall promulgate 
     such regulations as may be necessary to carry out this 
     section, including regulations establishing a deadline for 
     receipt of applications for prepayment and refinancing under 
     title V of the Small Business Investment Act of 1958.
       (c) Authorization.--There are authorized to be appropriated 
     such sums as may be necessary to carry out this section.
                   TITLE VI--MISCELLANEOUS AMENDMENTS

     SEC. 601. CONSOLIDATION OF FUNDING ACCOUNTS.

       (a) In General.--Section 4(c) of the Small Business Act (15 
     U.S.C. 633(c)) is amended by striking ``(c)(1) There'' and 
     all that follows through paragraph (4) and inserting the 
     following:
       ``(c) Loan Liquidation Fund.--
       ``(1) In general.--
       ``(A) Establishment.--There is hereby established in the 
     United States Treasury a fund to be known as the Loan 
     Liquidation Fund (hereafter in this subsection referred to as 
     the `Fund').
       ``(B) Amounts contained in fund.--All amounts received by 
     the Administration prior to October 1, 1991, from the 
     repayment of loans and debentures, payments of interest, and 
     other receipts arising out of transactions entered into by 
     the Administration pursuant to section 5(e), 5(g), 7(a), 
     7(b), 7(c)(2), 7(e), 7(h), 7(l), 7(m), or 8(a) of this Act, 
     or title III, IV, or V of the Small Business Investment Act 
     of 1958, shall be paid into the Fund. Balances existing in 
     the revolving funds on or after the effective date of this 
     paragraph shall be transferred to the Fund on such date.
       ``(C) Operating expenses.--The Fund shall have available, 
     without fiscal year limitation, such funds as may be 
     necessary to finance the operational needs of the Fund.
       ``(2) Annual status report.--As soon as practicable after 
     the end of each fiscal year, the Administration shall submit 
     to the Committees on Small Business and Appropriations of the 
     Senate and the House of Representatives a complete report on 
     the status of the Fund.''.
       (b) Interest Payments to Treasury.--Section 4(c) of the 
     Small Business Act (15 U.S.C. 633(c)) is amended--
       (1) by redesignating paragraph (5) as paragraph (3); and
       (2) in paragraph (3)(B), as redesignated, by striking 
     clause (ii) and inserting the following:
       ``(ii) Upon the expiration of each fiscal year, the 
     Administration shall pay into the miscellaneous receipts of 
     the United States Treasury the actual interest the 
     Administration has collected during the preceding fiscal year 
     on all financings made under the authority of this Act.''.

     SEC. 602. IMPOSITION OF FEES.

       Section 5(b) of the Small Business Act (15 U.S.C. 634(b)) 
     is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) in paragraph (11), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(12) impose, retain, and use only those fees which are 
     specifically authorized by law or which are in effect on 
     September 30, 1994, and in the amounts and at the rates in 
     effect on such date, except that the Administrator may, 
     subject to approval in appropriations Acts, impose, retain, 
     and utilize, additional fees--
       ``(A) not to exceed $300 for each loan servicing action 
     requested after disbursement of the loan, including any 
     substitution of collateral, loan assumption, release or 
     substitution of a guarantor, reamortization, or similar 
     action; and
       ``(B) to recover the direct, incremental cost involved in 
     the production and dissemination of compilations of 
     information produced by the Administration under the 
     authority of the Small Business Act and the Small Business 
     Investment Act of 1958; and
       ``(13) collect, retain and utilize, subject to approval in 
     appropriations Acts, any amounts collected by fiscal transfer 
     agents and not used by such agent as payment of the cost of 
     loan pooling or debenture servicing operations, except that 
     amounts collected under this paragraph shall be utilized 
     solely to facilitate the administration of the program that 
     generated the excess amounts.''.

     SEC. 603. JOB CREATION AND COMMUNITY BENEFIT.

       Section 7(a)(21) of the Small Business Act (15 U.S.C. 
     636(a)(21)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Job creation and community benefit.--In providing 
     assistance under this paragraph, the Administration shall 
     develop procedures to ensure, to the maximum extent 
     practicable, that such assistance is used for projects that--
       ``(i) have the greatest potential for--

       ``(I) creating new jobs for individuals whose employment is 
     involuntarily terminated due to reductions in Federal defense 
     expenditures; or
       ``(II) preventing the loss of jobs by employees of small 
     business concerns described in subparagraph (A)(i); and

       ``(ii) have substantial potential for stimulating new 
     economic activity in communities most affected by reductions 
     in Federal defense expenditures.''.

     SEC. 604. MICROLOAN PROGRAM AMENDMENTS.

       Section 7(m)(9)(B) of the Small Business Act (15 U.S.C. 
     636(m)(9)(B)) is amended--
       (1) by inserting ``and loan guarantees'' after ``for 
     loans''; and
       (2) by inserting after ``experienced microlending 
     organizations'' the following: ``and national and regional 
     nonprofit organizations that have demonstrated experience in 
     providing training support for microenterprise development 
     and financing.''.

     SEC. 605. TECHNICAL CLARIFICATION.

       (a) Defense Conversion.--Section 7(a)(21)(A) of the Small 
     Business Act (15 U.S.C. 636(a)(21)(A)) is amended by striking 
     ``under the'' and inserting ``on a guaranteed basis under 
     the''.
       (b) Additional Technical Clarification.--Section 204 of 
     Public Law 94-305 (15 U.S.C. 634d) is amended by striking 
     ``section 202'' and inserting ``this title''.

     SEC. 606. SECONDARY MARKET STUDY DUE DATE.

       Section 6 of the Small Business Credit Enhancement Act of 
     1993 (15 U.S.C. 634 note) is amended by striking ``16 months 
     after the date of enactment'' and inserting ``November 1, 
     1994''.

     SEC. 607. STUDY AND DATA BASE: GUARANTEED BUSINESS LOAN 
                   PROGRAM AND DEVELOPMENT COMPANY PROGRAM.

       (a) Study Authorized.--The Administration shall conduct a 
     study of--
       (1) the Guaranteed Business Loan program under section 7(a) 
     of the Small Business Act; and
       (2) the Development Company program under sections 502, 
     503, and 504 of the Small Business Investment Act of 1958.
       (b) Evaluation.--After conducting the study under 
     subsection (a), the Administration shall evaluate the 
     performance of the programs described in paragraphs (1) and 
     (2) of subsection (a) on an annual and aggregated basis 
     during the most recent 4-year period for which data are 
     available. Such evaluation shall focus on the following 
     factors:
       (1) The number, dollar amount, and average size of the 
     loans or financings under each program.
       (2) The number, dollar amount, and average size of the 
     loans or financings made to woman-owned and minority-owned 
     businesses under each program.
       (3) The geographic distribution of the loans or financings 
     under each program.
       (4) The jobs created or maintained attributable to the 
     loans or financings under each program.
       (5) The number, dollar amount, and average size of the 
     loans or financings on which borrowers defaulted under each 
     program.
       (6) The amounts recovered by the Administration after 
     default, foreclosure, or otherwise under each program.
       (7) The number of companies which are no longer in business 
     despite receiving the loans or financings under each program.
       (8) The taxes paid by businesses which received the loans 
     or financings under each program.
       (9) Such other information as the Administration determines 
     to be appropriate for a complete evaluation of each program.
       (c) Contracting With Independent Entities.--In carrying out 
     subsections (a) and (b), the Administration may contract with 
     an independent entity or entities--
       (1) to conduct the study pursuant to subsection (a); and
       (2) to develop a database of information to enable the 
     Administration to maintain and access, on an ongoing basis, 
     current information relating to the factors set forth in 
     subsection (b).
       (d) Date.--The study authorized by subsection (a) shall be 
     completed not later than September 30, 1995.

     SEC. 608. SBIR VENDORS.

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

     SEC. 609. PROGRAM EXTENSION.

       Section 602(e) of the Business Opportunity Development 
     Reform Act of 1988 (15 U.S.C. 637 note) is amended by 
     striking ``September 30, 1994'', and inserting ``September 
     30, 1995''.

     SEC. 610. PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT 
                   LAWFULLY WITHIN THE UNITED STATES.

       Section 2 of the Small Business Act (15 U.S.C. 631) is 
     amended by adding at the end the following new subsection:
       ``(i) Prohibition on the Use of Funds for Individuals Not 
     Lawfully Within the United States.--None of the funds made 
     available pursuant to this Act may be used to provide any 
     direct benefit or assistance to any individual in the United 
     States if the Administrator or the official to which the 
     funds are made available receives notification that the 
     individual is not lawfully within the United States.''.

     SEC. 611. OFFICE OF ADVOCACY EMPLOYEES.

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

     SEC. 612. PROHIBITION ON THE PROVISION OF ASSISTANCE.

       Section 4 of the Small Business Act (15 U.S.C. 633) is 
     amended by adding at the end the following new subsection:
       ``(e) Prohibition on the Provision of Assistance.--
     Notwithstanding any other provision of law, the 
     Administration is prohibited from providing any financial or 
     other assistance to any business concern or other person 
     engaged in the production or distribution of any product or 
     service that is determined to be obscene.''.

     SEC. 613. CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT 
                   OBLIGATIONS.

       Section 4 of the Small Business Act (15 U.S.C. 633), as 
     amended by section 612, is amended by adding at the end the 
     following new subsection:
       ``(f) Certification of Compliance With Child Support 
     Obligations.--
       ``(1) In general.--Each applicant for financial assistance 
     under this Act, including an applicant for a direct loan or a 
     loan guarantee, shall certify that the applicant is not in 
     violation of the terms of any--
       ``(A) administrative order;
       ``(B) court order; or
       ``(C) repayment agreement entered into between the 
     applicant and the custodial parent or State agency providing 
     child support enforcement services,
     that requires the applicant to pay child support, as such 
     term is defined in section 462(b) of the Social Security Act.
       ``(2) Enforcement.--Not later than 6 months after the date 
     of enactment of this subsection, the Administration shall 
     issue such regulations as may be necessary to enforce 
     compliance the requirements of this subsection.''.
  Mr. FORD. Mr. President, I ask unanimous consent that the committee 
substitute amendment be agreed to, and the bill, as amended, be deemed 
read the third time, passed, and the motion to reconsider to laid upon 
the table; that the title amendment be agreed to, and the motion to 
reconsider be laid on the table; further that any statements appear in 
the Record as if read.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendment was agreed to.
  So the bill (S. 2060), as amended, was deemed read the third, and 
passed, as follows:

                                S. 2060

       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 Administration Reauthorization and Amendment Act of 
     1994''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorizations.

                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

Sec. 201. Microloan financing pilot.
Sec. 202. Eligibility of Native American tribal governments to be 
              microloan intermediaries.
Sec. 203. Microloan program extension.
Sec. 204. Microloan program funding and State limitations.
Sec. 205. Distribution of intermediaries.
Sec. 206. Microloan intermediary loan limitation.
Sec. 207. Microloan technical assistance to nonborrowers.
Sec. 208. Microloan demonstration program grants.
Sec. 209. Eligibility to participate as a microloan intermediary and a 
              technical assistance provider.
Sec. 210. Loans to exporters.
Sec. 211. Working capital international trade loans.
Sec. 212. Guarantees on international trade loans.
Sec. 213. Accredited lenders program.
Sec. 214. Interest rate on certified development company loans.
Sec. 215. Certifications of eligibility for SBIC and SSBIC financing.
Sec. 216. Participating securities for smaller SBICs.

             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

Sec. 301. Size standard criteria.
Sec. 302. Sunset on preferred surety bond guarantee program.
Sec. 303. Manufacturing contracts through manufacturing application and 
              education centers.

               TITLE IV--BUSINESS DEVELOPMENT ASSISTANCE

                     Subtitle A--General Provisions

Sec. 401. Sunset on cosponsored training.
Sec. 402. Small business development center program level.
Sec. 403. Federal contracts with small business development centers.
Sec. 404. Small business development center program examination and 
              certification.
Sec. 405. Service Corps of Retired Executives (SCORE) program.
Sec. 406. Information concerning franchising.

           Subtitle B--Development of Woman-Owned Businesses

Sec. 411. Extension of authority for demonstration projects.
Sec. 412. Establishment of Office of Women's Business Ownership.
Sec. 413. National Commission on Women in Business.

          TITLE V--RELIEF FROM DEBENTURE PREPAYMENT PENALTIES

Sec. 501. Short title.
Sec. 502. Prepayment of development company debentures.

                   TITLE VI--MISCELLANEOUS AMENDMENTS

Sec. 601. Consolidation of funding accounts.
Sec. 602. Imposition of fees.
Sec. 603. Job creation and community benefit.
Sec. 604. Microloan program amendments.
Sec. 605. Technical clarification.
Sec. 606. Secondary market study due date.
Sec. 607. Study and data base: Guaranteed Business Loan Program and 
              Development Company Program.
Sec. 608. SBIR vendors.
Sec. 609. Program extension.
Sec. 610. Prohibition on the use of funds for individuals not lawfully 
              within the United States.
Sec. 611. Office of advocacy employees.
Sec. 612. Prohibition on the provision of assistance.
Sec. 613. Certification of compliance with child support obligations.
                        TITLE I--AUTHORIZATIONS

     SEC. 101. AUTHORIZATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended by striking subsections (k) (as added by section 
     405(3) of the Small Business Credit and Business Opportunity 
     Enhancement Act of 1992) through (p) and inserting the 
     following:
       ``(l) The following program levels are authorized for 
     fiscal year 1995:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $110,000,000 in direct 
     and immediate participation loans, and $45,000,000 in 
     technical assistance grants as provided in section 7(m).
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $13,315,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $9,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $2,300,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $2,000,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $15,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $33,000,000 in purchases of preferred securities;
       ``(B) $275,000,000 in guarantees of debentures, of which 
     $65,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $500,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $1,800,000,000, of which not more than $450,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter into cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $3,500,000;
       ``(B) for the Small Business Institute program authorized 
     by section 8(b)(1), $3,000,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), $25,000,000, to remain 
     available until expended.
       ``(m) There are authorized to be appropriated to the 
     Administration for fiscal year 1995 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.
       ``(n) The following program levels are authorized for 
     fiscal year 1996:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $175,000,000 in direct 
     and immediate participation loans, and $65,000,000 in 
     technical assistance grants as provided in section 7(m).
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $15,320,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $10,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $2,800,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $2,500,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $20,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $39,000,000 in purchases of preferred securities;
       ``(B) $300,000,000 in guarantees of debentures, of which 
     $70,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $750,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000, of which not more than $500,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $3,750,000;
       ``(B) for the small business institute program authorized 
     by section 8(b)(1), $3,250,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $25,000,000, 
     to remain available until expended.
       ``(o) There are authorized to be appropriated to the 
     Administration for fiscal year 1996 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.
       ``(p) The following program levels are authorized for 
     fiscal year 1997:
       ``(1) For the programs authorized by this Act, the 
     Administration is authorized to make $250,000,000 in direct 
     and immediate participation loans and $98,000,000 in 
     technical assistance grants as provided in section 7(m), to 
     remain available until expended.
       ``(2) For the programs authorized by this Act, the 
     Administration is authorized to make $19,020,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(A) $12,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(B) $3,500,000,000 in financings as provided in section 
     7(a)(13) and section 504 of the Small Business Investment Act 
     of 1958;
       ``(C) $3,500,000,000 in loans as provided in section 
     7(a)(21); and
       ``(D) $20,000,000 in loans as provided in section 7(m).
       ``(3) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(A) $45,000,000 in purchases of preferred securities;
       ``(B) $375,000,000 in guarantees of debentures, of which 
     $75,000,000 is authorized in guarantees of debentures from 
     companies operating pursuant to section 301(d) of such Act; 
     and
       ``(C) $1,125,000,000 in guarantees of participating 
     securities.
       ``(4) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,200,000,000, of which not more than $650,000,000 may be in 
     bonds approved pursuant to the provisions of section 
     411(a)(3) of such Act.
       ``(5) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(A) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $4,000,000;
       ``(B) for the small business institute program authorized 
     by section 8(b)(1), $3,500,000; and
       ``(C) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $25,000,000, 
     to remain available until expended.
       ``(q) There are authorized to be appropriated to the 
     Administration for fiscal year 1997 such sums as may be 
     necessary to carry out the provisions of this Act, including 
     administrative expenses and necessary loan capital for 
     disaster loans pursuant to section 7(b), and to carry out the 
     provisions of the Small Business Investment Act of 1958, 
     including salaries and expenses of the Administration.''.
                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

     SEC. 201. MICROLOAN FINANCING PILOT.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
     is amended by adding at the end the following new paragraph:
       ``(12) Deferred participation loan pilot.--In lieu of 
     making direct loans to intermediaries as authorized in 
     paragraph (1)(B), during fiscal years 1995 through 1997, the 
     Administration may, on a pilot program basis, participate on 
     a deferred basis of not less than 90 percent and not more 
     than 100 percent on loans made to intermediaries by a for-
     profit or nonprofit entity or by alliances of such entities, 
     subject to the following conditions:
       ``(A) Number of loans.--In carrying out this paragraph, the 
     Administration shall not participate in providing financing 
     on a deferred basis to more than 10 intermediaries in urban 
     areas or more than 10 intermediaries in rural areas.
       ``(B) Term of loans.--The term of each loan shall be 10 
     years. During the first year of the loan, the intermediary 
     shall not be required to repay any interest or principal. 
     During the second through fifth years of the loan, the 
     intermediary shall be required to pay interest only. During 
     the sixth through tenth years of the loan, the intermediary 
     shall be required to make interest payments and fully 
     amortize the principal.
       ``(C) Interest rate.--The interest rate on each loan shall 
     be the rate specified by paragraph (3)(F) for direct loans. 
     Subject to the availability of appropriations, the 
     Administration may make payments to lenders on behalf of 
     intermediaries in order to achieve such interest rate.''.

     SEC. 202. ELIGIBILITY OF NATIVE AMERICAN TRIBAL GOVERNMENTS 
                   TO BE MICROLOAN INTERMEDIARIES.

       Section 7(m)(11)(A) of the Small Business Act (15 U.S.C. 
     636(m)(11)(A)) is amended--
       (1) in clause (iii), by striking ``or'' at the end;
       (2) in clause (iv), by striking the comma at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following new clause:
       ``(v) an agency of or nonprofit entity established by a 
     Native American Tribal Government,''.

     SEC. 203. MICROLOAN PROGRAM EXTENSION.

       Section 609(j) of Public Law 102-140 (105 Stat. 831) is 
     amended by striking ``5 years after the date of enactment of 
     this Act'', and inserting ``on October 1, 1998''.

     SEC. 204. MICROLOAN PROGRAM FUNDING AND STATE LIMITATIONS.

       Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
     is amended--
       (1) in paragraph (5)(A)--
       (A) by striking ``25 grants'' and inserting ``50 grants''; 
     and
       (B) by striking ``$125,000'' and inserting ``$150,000''; 
     and
       (2) by striking paragraph (7) and inserting the following:
       ``(7) Program funding for microloans.--
       ``(A) Number of participants.--In carrying out paragraph 
     (1)(B)(i), the Administration may fund, on a competitive 
     basis, not more than--
       ``(i) 150 microloan programs in fiscal year 1995; and
       ``(ii) 200 microloan programs in each succeeding fiscal 
     year.
       ``(B) State limitations.--A State shall not receive more 
     than $10,000,000 in loan funds during any year of program 
     participation.''.

     SEC. 205. DISTRIBUTION OF INTERMEDIARIES.

       Section 7(m)(8) of the Small Business Act (15 U.S.C. 
     636(m)(8)) is amended to read as follows:
       ``(8) Distribution of intermediaries.--In approving 
     microloan program applicants under this subsection, the 
     Administration shall select such intermediaries as will 
     further microloan availability for small businesses in all 
     industries located throughout each State, especially small 
     businesses located in economically distressed urban and rural 
     areas.''.

     SEC. 206. MICROLOAN INTERMEDIARY LOAN LIMITATION.

       Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
     636(m)(3)(C)) is amended by striking ``$1,250,000'' and 
     inserting ``$2,000,000''.

     SEC. 207. MICROLOAN TECHNICAL ASSISTANCE TO NONBORROWERS.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Assistance to certain small business concerns.--Each 
     intermediary may expend an amount not to exceed 20 percent of 
     the grant funds authorized under paragraph (1)(B)(ii) to 
     provide marketing, management, and technical assistance to 
     small business concerns that are not borrowers under this 
     subsection.''.

     SEC. 208. MICROLOAN DEMONSTRATION PROGRAM GRANTS.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended--
       (1) in subparagraph (B), by inserting ``except for a grant 
     made to an intermediary that provides not less than 50 
     percent of its loans to small business concerns owned by one 
     or more members of a federally recognized Indian tribe,'' 
     after ``under subparagraph (A),''; and
       (2) in subparagraph (C), by striking clause (i) and 
     inserting the following:
       ``(i) In general.--In addition to grants made under 
     subparagraph (A), each intermediary shall be eligible to 
     receive a grant equal to 5 percent of the total outstanding 
     balance of loans made to the intermediary under this 
     subsection if--

       ``(I) the intermediary provides not less than 25 percent of 
     its loans to small business concerns owned by one or more 
     members of a federally recognized Indian tribe; or
       ``(II) the intermediary has a portfolio of loans made under 
     this subsection that averages not more than $7,500 during the 
     period of the intermediary's participation in the program.''.

     SEC. 209. ELIGIBILITY TO PARTICIPATE AS A MICROLOAN 
                   INTERMEDIARY AND A TECHNICAL ASSISTANCE 
                   PROVIDER.

       Section 7(m)(2) of the Small Business Act (15 U.S.C. 
     636(m)(2)) is amended--
       (1) by striking ``(2) Eligibility for participation.--An'' 
     and inserting the following:
       ``(2) Eligibility for participation.--
       ``(A) In general.--An'';
       (2) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and indenting accordingly; and
       (3) by adding at the end the following new subparagraph:
       ``(B) Participation as intermediary and technical 
     assistance provider.--A single entity may simultaneously 
     receive 1 grant as an intermediary pursuant to paragraph 
     (1)(B)(ii) and 1 grant as a nonintermediary technical 
     assistance provider pursuant to paragraph (1)(B)(iii) if the 
     Administration determines that--
       ``(i) the purposes of the grants are not duplicative;
       ``(ii) the grants will enable the entity to provide 
     technical assistance to different geographic areas, or to 
     support both guaranteed and direct loans in the same 
     geographic area; and
       ``(iii) the entity meets all of the requirements of the 
     programs authorized pursuant to clauses (ii) and (iii) of 
     paragraph (1)(B).''.

     SEC. 210. LOANS TO EXPORTERS.

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

     SEC. 211. WORKING CAPITAL INTERNATIONAL TRADE LOANS.

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

     SEC. 212. GUARANTEES ON INTERNATIONAL TRADE LOANS.

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

     SEC. 213. ACCREDITED LENDERS PROGRAM.

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

     ``SEC. 507. ACCREDITED LENDERS PROGRAM.

       ``(a) Establishment.--The Administration is authorized to 
     establish an Accredited Lenders Program for qualified State 
     and local development companies that meet the requirements of 
     subsection (b).
       ``(b) Requirements.--The Administration may designate a 
     qualified State or local development company as an accredited 
     lender if such company--
       ``(1) has been an active participant in the Development 
     Company Program authorized by sections 502, 503, and 504 for 
     not less than the preceding 12 months;
       ``(2) has well-trained, qualified personnel who are 
     knowledgeable in the Administration's lending policies and 
     procedures for such Development Company Program;
       ``(3) has the ability to process, close, and service 
     financing for plant and equipment under such Development 
     Company Program;
       ``(4) has a reasonable and acceptable loss rate on the 
     company's debentures;
       ``(5) has a history of submitting to the Administration 
     complete and accurate debenture guaranty application 
     packages; and
       ``(6) has demonstrated the ability to serve small business 
     credit needs for financing plant and equipment through the 
     Development Company Program authorized by sections 502, 503, 
     and 504.
       ``(c) Expedited Processing of Loan Applications.--The 
     Administration shall develop an expedited procedure for 
     processing a loan application or servicing action submitted 
     by a qualified State or local development company that has 
     been designated as an accredited lender in accordance with 
     subsection (b).
       ``(d) Suspension or Revocation of Designation.--
       ``(1) In general.--The designation of a qualified State or 
     local development company as an accredited lender may be 
     suspended or revoked if the Administration determines that--
       ``(A) the development company has not continued to meet the 
     criteria for eligibility under subsection (b); or
       ``(B) the development company has failed to adhere to the 
     Administration's rules and regulations or is violating any 
     other applicable provision of law.
       ``(2) Effect.--A suspension or revocation under paragraph 
     (1) shall not affect any outstanding debenture guarantee.
       ``(e) Definition.--For purposes of this section, the term 
     `qualified State or local development company' has the same 
     meaning as in section 503(e).''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this Act, the Administration shall promulgate 
     final regulations to carry out this section.
       (c) Report.--Not later than 1 year after the effective date 
     of regulations promulgated under subsection (b), the 
     Administration shall report to the Committees on Small 
     Business of the Senate and the House of Representatives on 
     the implementation of this section. Such report shall include 
     data on the number of development companies designated as 
     accredited lenders, their debenture guarantee volume, their 
     loss rates, the average processing time on their guarantee 
     applications, and such other information as the 
     Administration deems appropriate.

     SEC. 214. INTEREST RATE ON CERTIFIED DEVELOPMENT COMPANY 
                   LOANS.

       Section 112(c) of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (102 Stat. 2996) is 
     amended--
       (1) in paragraph (1), by striking ``(1) In General.--
     Section 503'' and inserting ``Section 503''; and
       (2) by striking paragraph (2).

     SEC. 215. CERTIFICATIONS OF ELIGIBILITY FOR SBIC AND SSBIC 
                   FINANCING.

       Section 308 of the Small Business Investment Act of 1958 
     (15 U.S.C. 687) is amended by adding at the end the following 
     new subsection:
       ``(h) Certifications of Eligibility.--
       ``(1) Certification by small business concern.--Prior to 
     receiving financial assistance from a company licensed 
     pursuant to subsection (c) or (d) of section 301, a small 
     business concern shall certify in writing that it meets the 
     eligibility requirements of the Small Business Investment 
     Company Program or the Specialized Small Business Investment 
     Company Program, as applicable.
       ``(2) Certification by company.--Prior to providing 
     financial assistance to a small business concern under this 
     Act, a company licensed pursuant to subsection (c) or (d) of 
     section 301 shall certify in writing that it has reviewed the 
     application for assistance of the small business concern and 
     that all documentation and other information supports the 
     eligibility of the applicant.
       ``(3) Retention of certifications.--Certificates made 
     pursuant to paragraphs (1) and (2) shall be retained by the 
     company licensed pursuant to subsection (c) or (d) of section 
     301 for the duration of the financial assistance.''.

     SEC. 216. PARTICIPATING SECURITIES FOR SMALLER SBICS.

       Section 303(g) of the Small Business Investment Act of 1958 
     (15 U.S.C. 683(g)) is amended by adding at the end the 
     following new paragraph:
       ``(13) Participating securities for smaller small business 
     investment companies.--
       ``(A) In general.--Subject to the provisions of 
     subparagraph (B), of the amount of the annual program level 
     of participating securities approved in appropriations Acts, 
     50 percent shall be reserved for funding small business 
     investment companies with private capital of less than 
     $20,000,000.
       ``(B) Exception.--During the last quarter of each fiscal 
     year, if the Administrator determines that there is a lack of 
     qualified applicants with private capital of less than 
     $20,000,000, the Administrator may utilize all or any part of 
     the program level for securities reserved under subparagraph 
     (A) for qualified applicants with private capital of 
     $20,000,000 or more.''.
             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

     SEC. 301. SIZE STANDARD CRITERIA.

       Section 3(a)(2) of the Small Business Act (15 U.S.C. 
     632(a)(2)) is amended to read as follows:
       ``(2) Size standard criteria.--
       ``(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, or a combination thereof.
       ``(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; and
       ``(III) the size of other business concerns on the basis of 
     data over a period of not less than 3 years; and

       ``(iii) is approved by the Administrator.''.

     SEC. 302. SUNSET ON PREFERRED SURETY BOND GUARANTEE PROGRAM.

       Section 207 of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (15 U.S.C. 694b 
     note) is amended by striking ``September 30, 1994'' and 
     inserting ``September 30, 1995''.

     SEC. 303. MANUFACTURING CONTRACTS THROUGH MANUFACTURING 
                   APPLICATION AND EDUCATION CENTERS.

       (a) In General.--The Small Business Administration shall 
     promote the award of Federal manufacturing contracts to small 
     business concerns that participate in manufacturing 
     application and education centers by working with the 
     Department of Commerce and other agencies to identify 
     components and subsystems that are both critical and 
     currently foreign-sourced.
       (b) Qualifications.--In order to qualify as a manufacturing 
     application and education center under this section, an 
     entity shall have the capacity to assist small business 
     concerns in a shared-use production environment and to offer 
     the following services:
       (1) Technology demonstration.
       (2) Technology education.
       (3) Technology application support.
       (4) Technology advancement support.
       (c) Inapplicability of Certain Requirements.--The 
     requirements of section 15(o)(1)(B) of the Small Business Act 
     shall not apply with respect to any manufacturing contract 
     carried out by a small business concern in conjunction with a 
     manufacturing application and education center under this 
     section.
       (d) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration shall promulgate final regulations to 
     carry out this section.
       (e) Termination of Authority.--The authority of the Small 
     Business Administration under this section shall terminate on 
     September 30, 1997.
               TITLE IV--BUSINESS DEVELOPMENT ASSISTANCE
                     Subtitle A--General Provisions

     SEC. 401. SUNSET ON COSPONSORED TRAINING.

       (a) In General.--
       (1) Repeal.--The amendments made by section 5(a) of Small 
     Business Computer Security and Education Act of 1984 (15 
     U.S.C. 633 note) are hereby repealed.
       (2) Effective date.--Paragraph (1) shall take effect on 
     September 30, 1997.
       (b) Conforming Amendment.--Section 7(b) of the Small 
     Business Computer Security and Education Act of 1984 (15 
     U.S.C. 633 note) is amended in the second sentence by 
     striking ``and the amendments made to section 8(b)(1)(A) of 
     the Small Business Act by section 5(a)(2) of this Act are'' 
     and inserting ``is''.

     SEC. 402. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.

       Section 21(a)(4) of the Small Business Act (15 U.S.C. 
     648(a)(4)) is amended to read as follows:
       ``(4) Small Business Development Center Program Level.--
       ``(A) In general.--The Administration shall require as a 
     condition of any grant (or amendment or modification thereof) 
     made to an applicant under this section, that a matching 
     amount (excluding any fees collected from recipients of such 
     assistance) equal to the amount of such grant be provided 
     from sources other than the Federal Government, to be 
     comprised of not less than 50 percent cash and not more than 
     50 percent of indirect costs and in-kind contributions.
       ``(B) Restriction.--The matching amount described in 
     subparagraph (A) shall not include any indirect costs or in-
     kind contributions derived from any Federal program.
       ``(C) National program.--
       ``(i) In general.--No recipient of funds under this section 
     shall receive a grant that exceeds--
       ``(I) for fiscal year 1995, the greater of--

       ``(aa) the sum of such recipient's pro rata share of a 
     national program based upon the population to be served by 
     the small business development center as compared to the 
     total population in the United States, and $100,000; or
       ``(bb) $200,000; and

       ``(II) except as provided in clause (ii), in each 
     succeeding fiscal year, the greater of--

       ``(aa) the sum of such recipient's pro rata share of a 
     national program based upon the population to be served by 
     the small business development center as compared to the 
     total population in the United States, and $200,000; or
       ``(bb) $300,000.

       ``(ii) Exception.--The provisions of clause (i)(I) shall 
     apply in any fiscal year after fiscal year 1995 in which, 
     based on funds appropriated, a small business development 
     center would, under the provisions of clause (i)(II), receive 
     less than the small business development center received in 
     fiscal year 1995.
       ``(iii) Amount.--The amount of the national program shall 
     be--
       ``(I) $70,000,000 through September 30, 1995;
       ``(II) $77,500,000 from October 1, 1995 through September 
     30, 1996; and
       ``(III) $85,000,000 beginning October 1, 1996.
     The amount for which a small business development center is 
     eligible under this paragraph shall be based upon the amount 
     of the national program in effect as of the date for 
     commencement of performance of the small business development 
     center's grant.''.

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

       Section 21(a)(5) of the Small Business Act (15 U.S.C. 
     648(a)(5)) is amended to read as follows:
       ``(5) Federal Contracts With Small Business Development 
     Centers.--
       ``(A) In general.--A small business development center may 
     enter into a contract with a Federal department or agency to 
     provide specific assistance to small business concerns, if 
     the contract is approved in advance by the Associate 
     Administrator of the small business development center 
     program.
       ``(B) Approval criteria.--Each approval of a contract under 
     subparagraph (A) shall be based upon a determination that the 
     contract will provide assistance to small business concerns 
     and that performance of the contract will not hinder the 
     small business development center in carrying out the terms 
     of the grant received by the small business development 
     center from the Administration.
       ``(C) Exemption from matching requirement.--A contract 
     under this paragraph shall not be subject to the matching 
     funds or eligibility requirements of paragraph (4).
       ``(D) Additional provision.--Notwithstanding any other 
     provision of law, a contract for assistance under this 
     paragraph may not be applied to any Federal department or 
     agency's small business, woman-owned business, or socially 
     and economically disadvantaged business contracting goal 
     under section 15(g).''.

     SEC. 404. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM 
                   EXAMINATION AND CERTIFICATION.

       Section 21(k) of the Small Business Act (15 U.S.C. 648(k)) 
     is amended to read as follows:
       ``(k) Program Examination and Certification.--
       ``(1) Examination.--Not later than 180 days after the date 
     of enactment of this subsection, the Administration shall 
     develop and implement a biannual programmatic and financial 
     examination of each small business development center 
     established pursuant to this section.
       ``(2) Certification.--The Administration may provide 
     financial support, by contract or otherwise, to the 
     association authorized by subsection (a)(3)(A) for the 
     purpose of developing a small business development center 
     certification program.
       ``(3) Extension or renewal of cooperative agreements.--In 
     extending or renewing a cooperative agreement of a small 
     business development center, the Administration shall 
     consider the results of the examination and certification 
     program conducted pursuant to paragraphs (1) and (2).''.

     SEC. 405. SERVICE CORPS OF RETIRED EXECUTIVES (SCORE) 
                   PROGRAM.

       Section 8(b)(1) of the Small Business Act (15 U.S.C. 
     637(b)(1)) is amended by adding at the end the following new 
     subparagraph:
       ``(H) In carrying out subparagraph (B), the Administration 
     shall encourage the Service Corps of Retired Executives 
     (SCORE) established pursuant to such subparagraph, to the 
     maximum extent practicable, to consult and work in 
     conjunction with the Corporation for National and Community 
     Service and the Points of Light Foundation established under 
     the National and Community Service Act of 1990.''.

     SEC. 406. INFORMATION CONCERNING FRANCHISING.

       Section 8(b)(1)(A) of the Small Business Act (15 U.S.C. 
     637(b)(1)(A)) is amended by inserting ``including information 
     on the benefits and risks of franchising,'' after ``small-
     business enterprises,''.
           Subtitle B--Development of Woman-Owned Businesses

     SEC. 411. EXTENSION OF AUTHORITY FOR DEMONSTRATION PROJECTS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 28 (as added by section 2 of 
     the Women's Business Development Act of 1991) as section 29; 
     and
       (2) in section 29(g), as redesignated, by striking ``1995'' 
     and inserting ``1997''.

     SEC. 412. ESTABLISHMENT OF OFFICE OF WOMEN'S BUSINESS 
                   OWNERSHIP.

       Section 29 of the Small Business Act (15 U.S.C. 656), as 
     redesignated by section 411, is amended by adding at the end 
     the following new subsection:
       ``(h) Office of Women's Business Ownership.--There is 
     hereby established within the Administration an Office of 
     Women's Business Ownership, which shall be responsible for 
     the administration of the Administration's programs for the 
     development of women's business enterprises, as such term is 
     defined in section 408 of the Women's Business Ownership Act 
     of 1988. The Office of Women's Business Ownership shall be 
     administered by an Assistant Administrator, who shall be 
     appointed by the Administrator.''.

     SEC. 413. NATIONAL COMMISSION ON WOMEN IN BUSINESS.

       (a) Establishment.--Section 401 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended to read 
     as follows:

     ``SEC. 401. ESTABLISHMENT.

       ``There is hereby established a Commission to be known as 
     the `National Commission on Women in Business' (hereafter in 
     this title referred to as the `Commission').''.
       (b) Duties of the Commission.--Section 402 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. 631 note) is 
     amended to read as follows:

     ``SEC. 402. DUTIES OF THE COMMISSION.

       ``The Commission shall--
       ``(1) review, promote, coordinate, and monitor plans and 
     programs, developed in the public and private sectors, which 
     affect the ability of woman-owned businesses to obtain 
     capital and credit;
       ``(2) promote and assist in the development of the 
     Intermediate Census on Women's Business Ownership and other 
     surveys of woman-owned businesses;
       ``(3) provide assistance to and outreach for the 
     involvement of women business owners in White House 
     Conference on Small Business;
       ``(4) study and assess--
       ``(A) the obstacles faced by women seeking to establish 
     businesses and women seeking senior management positions in 
     large and small businesses and in the professions; and
       ``(B) the contributions to the Nation's economy by 
     businesses owned or managed by women; and
       ``(5) design a comprehensive plan for a joint public-
     private sector effort to facilitate the development and 
     growth of woman-owned businesses.
       ``(b) Report.--Not later than January 31, 1996, the 
     Commission shall submit a report to the President and the 
     Committees on Small Business of the Senate and the House of 
     Representatives describing the plan developed pursuant to 
     subsection (a)(5).''.
       (c) Membership.--Section 403 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended to read 
     as follows:

     ``SEC. 403. MEMBERSHIP OF THE COMMISSION.

       ``(a) In General.--The Commission shall be composed of 14 
     members, of whom--
       ``(1) 7 members shall be the individuals described in 
     subsection (b); and
       ``(2) 7 members shall be appointed in accordance with 
     subsection (c).
       ``(b) Public Sector Members.--For purposes of subsection 
     (a)(1), the individuals described in this section are--
       ``(1) the Administrator of the Small Business 
     Administration;
       ``(2) the Assistant Administrator of the Office of Women's 
     Business Ownership of the Small Business Administration;
       ``(3) the Secretary of the Treasury, or the Secretary's 
     designee;
       ``(4) the Secretary of Labor, or the Secretary's designee;
       ``(5) the Secretary of Commerce, or the Secretary's 
     designee;
       ``(6) the Administrator of the General Services 
     Administration, or the Administrator's designee; and
       ``(7) 1 member of the Board of Governors of the Federal 
     Reserve System, or the designee of a member.
       ``(c) Private Sector Members.--
       ``(1) Chairperson.--Not later than 45 days after the date 
     of enactment of the Small Business Administration 
     Reauthorization and Amendment Act of 1994, the President 
     shall appoint an individual to serve as the chairperson of 
     the Commission (hereafter in this title referred to as the 
     `Chairperson') who shall be a prominent business-woman who is 
     qualified to head the Commission by virtue of her education, 
     training, and experience.
       ``(2) Other members.--Not later than 60 days after the date 
     of enactment of the Small Business Administration 
     Reauthorization and Amendment Act of 1994, the Administrator 
     of the Small Business Administration shall appoint 6 members 
     of the Commission, of whom--
       ``(A) 1 shall be an owner of a small business concern, as 
     such term is defined in section 3 of the Small Business Act, 
     who is a member of the same political party as the President;
       ``(B) 1 shall be an owner of a small business concern, as 
     such term is defined in section 3 of the Small Business Act, 
     who is not a member of the same political party as the 
     President; and
       ``(C) 4 shall be representatives of national women's 
     business organizations.
       ``(d) Administrative Provisions.--
       ``(1) Restriction.--The members of the Commission appointed 
     pursuant to subsection (c) shall not be officers or employees 
     of the Federal Government.
       ``(2) Vice chairperson.--The member of the Commission 
     appointed pursuant to subsection (b)(2) shall serve as vice 
     chairperson of the Commission.
       ``(3) Terms.--The term of service of the members of the 
     Commission appointed pursuant to subsection (c) shall be 1 
     year. No member of the Commission may serve for more than 2 
     consecutive terms.
       ``(4) Designees.--Each designee appointed pursuant to 
     subsection (b) shall--
       ``(A) be a policy-making official whose duties are 
     consistent with the duties of the Commission; and
       ``(B) report directly to the head of the agency on the 
     activities of the Commission.
       ``(5) Compensation and travel expenses.--
       ``(A) Public sector members.--The members of the Commission 
     described in subsection (b) shall serve on the Commission 
     without additional compensation.
       ``(B) Private sector members.--The members of the 
     Commission appointed pursuant to subsection (c) shall serve 
     without pay for membership, except that such members shall be 
     entitled to reimbursement for domestic travel, subsistence, 
     and other necessary expenses incurred by them in carrying out 
     the functions of the Commission in the same manner as persons 
     serving on advisory boards pursuant to section 8(b) of the 
     Small Business Act.
       ``(6) Vacancies.--A vacancy on the Commission shall, not 
     later than 30 days after the date on which the vacancy 
     occurs, be filled in the same manner in which the original 
     appointment was made.
       ``(7) Meetings.--The Commission shall meet at the call of 
     the Chairperson not less than 4 times each year.
       ``(8) Quorums.--
       ``(A) Receipt of testimony.--Four members of the Commission 
     shall constitute a quorum for the receipt of testimony and 
     other evidence.
       ``(B) Approval of recommendations.--A majority of the 
     members of the Commission shall constitute a quorum for the 
     approval of recommendations or reports issued pursuant to 
     sections 402 and 406.''.
       (d) Executive Director and Staff.--Section 404 of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. 631 note) 
     is amended to read as follows:

     ``SEC. 404. EXECUTIVE DIRECTOR AND STAFF.

       ``(a) Executive Director.--The Commission shall have an 
     Executive Director who shall be appointed by the Chairperson 
     and the Assistant Administrator of the Small Business 
     Administration Office of Women's Business Ownership. Upon the 
     recommendation by the Executive Director, the Chairperson may 
     appoint and fix the pay of 4 additional employees at a rate 
     of pay not to exceed the maximum rate of pay payable for a 
     position at GS-15 of the General Schedule.
       ``(b) Administrative Provisions.--The Executive Director 
     and staff of the Commission may be appointed without regard 
     to the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and except as 
     provided in subsection (a), may be paid without regard to the 
     provisions of chapter 51 and subchapter III of chapter 53 of 
     such title relating to classification and General Schedule 
     pay rates, except that the Executive Director so appointed 
     may not receive pay in excess of the annual rate of basic pay 
     payable for a position at ES-1 of the Senior Executive Pay 
     Schedule under section 5832 of title 5, United States Code.
       ``(c) Detail of Additional Personnel.--Upon request to the 
     Chairperson, the head of any Federal department or agency may 
     detail any of the personnel of such agency to the Commission 
     to assist the Commission in carrying out its duties under 
     this title without regard to section 3341 of title 5, United 
     States Code.''.
       (e) Powers of the Commission.--Section 405 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. 631 note) is 
     amended--
       (1) by striking ``Council'' each place it appears and 
     inserting ``Commission''; and
       (2) by adding at the end the following new subsection:
       ``(f) Cooperation with Private Entities.--
       ``(1) In general.--Subject to the requirements of paragraph 
     (2), the Commission may carry out its duties under section 
     402 through cooperation with private nonprofit and for-profit 
     entities.
       ``(2) Restriction.--If the Commission cooperates with 
     private entities pursuant to paragraph (1), the Commission 
     shall ensure that--
       ``(A) the Commission receives appropriate recognition and 
     publicity;
       ``(B) the cooperation does not constitute or imply an 
     endorsement by the Commission of the products and services of 
     the cosponsor; and
       ``(C) the Commission avoids unnecessary promotion of the 
     products and services of the cosponsor and minimizes 
     utilization of any 1 cosponsor in a marketing area.''.
       (f) Reports.--Section 406 of the Women's Business Ownership 
     Act of 1988 (15 U.S.C. 631 note) is amended--
       (1) by striking ``Council'' each place it appears and 
     inserting ``Commission'';
       (2) by striking ``December 31, 1989'' and inserting ``not 
     later than 1 year after the date of enactment of the Small 
     Business Administration Reauthorization and Amendment Act of 
     1994''; and
       (3) by striking ``based upon its reviews conducted under 
     section 402''.
       (g) Authorization.--Section 407 of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. 631 note) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--There are authorized to be appropriated 
     to carry out this title--
       ``(1) $500,000 in fiscal year 1995;
       ``(2) $500,000 is fiscal year 1996; and
       ``(3) $100,000 in fiscal year 1997.''; and
       (2) by striking subsection (c).
       (h) Transition Reimbursement.--In order to facilitate the 
     transition from the National Women's Business Council, 
     established by title IV of the Women's Business Ownership Act 
     of 1988, to the National Commission on Women in Business 
     established by this section, the National Commission on Women 
     in Business may, during the 30-day period beginning on the 
     date on which the Chairperson of the National Commission on 
     Women in Business is appointed pursuant to section 413 of 
     this Act, reimburse the costs and salaries, where 
     appropriate, of the Chairperson, Executive Director, and 
     staff of the National Women's Business Council for transition 
     activities .
       (i) Sunset.--The authority of the National Commission on 
     Women in Business established under title IV of the Women's 
     Business Ownership Act of 1988, as amended by this section, 
     shall terminate on November 30, 1996.
          TITLE V--RELIEF FROM DEBENTURE PREPAYMENT PENALTIES

     SEC. 501. SHORT TITLE.

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

     SEC. 502. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

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

     ``SEC. 508. PREPAYMENT OF DEVELOPMENT COMPANY DEBENTURES.

       ``(a) In General.--
       ``(1) Prepayment authorized.--Subject to the requirements 
     set forth in subsection (b), an issuer of a debenture 
     purchased by the Federal Financing Bank and guaranteed by the 
     Administration under section 503 may, at the election of the 
     borrower whose loan secures such debenture and with the 
     approval of the Administration, prepay such debenture in 
     accordance with the provisions of this section.
       ``(2) Procedure.--
       ``(A) In general.--In making a prepayment under paragraph 
     (1)--
       ``(i) the borrower shall pay to the Federal Financing Bank 
     an amount that is equal to the sum of the unpaid principal 
     balance due on the debenture as of the date of the prepayment 
     (plus accrued interest at the coupon rate on the debenture) 
     and the amount of the repurchase premium described in 
     subparagraph (B); and
       ``(ii) the Administration shall pay to the Federal 
     Financing Bank the difference between the repurchase premium 
     paid by the borrower under this subsection and the repurchase 
     premium that the Federal Financing Bank would otherwise have 
     received.
       ``(B) Repurchase premium.--
       ``(i) In general.--For purposes of subparagraph (A)(i), the 
     repurchase premium is the amount equal to the product of--

       ``(I) the unpaid principal balance due on the debenture on 
     the date of prepayment; and
       ``(II) the applicable percentage rate, as determined in 
     accordance clause (ii).

       ``(ii) Applicable percentage rate.--For purposes of clause 
     (i)(II), the applicable percentage rate means--

       ``(I) with respect to a 10-year term loan, 9.5 percent;
       ``(II) with respect to a 15-year term loan, 9.5 percent;
       ``(III) with respect to a 20-year term loan, 10.5 percent; 
     and
       ``(IV) with respect to a 25-year term loan, 11.5 percent.

       ``(b) Requirements.--For purposes of subsection (a), the 
     requirements of this subsection are that--
       ``(1) the debenture is outstanding and neither the loan 
     that secures the debenture nor the debenture is in default on 
     the date on which the prepayment is made;
       ``(2) State, local, or personal funds, or the proceeds of a 
     refinancing in accordance with subsection (d) of this section 
     under the programs authorized by sections 504 and 505, are 
     used to prepay the debenture; and
       ``(3) the issuer certifies that the benefits, net of fees 
     and expenses authorized herein, associated with prepayment of 
     the debenture are entirely passed through to the borrower.
       ``(c) No Prepayment Fees or Penalties.--No fees or 
     penalties other than those specified in this section may be 
     imposed on the issuer, the borrower, the Administration, or 
     any fund or account administered by the Administration as the 
     result of a prepayment under this section.
       ``(d) Refinancing Limitations.--
       ``(1) In general.--The refinancing of a debenture under 
     sections 504 and 505, in accordance with subsection (b)(2) of 
     this section--
       ``(A) shall not exceed the amount necessary to prepay 
     existing debentures, including all costs associated with the 
     refinancing and any applicable prepayment penalty or 
     repurchase premium; and
       ``(B) shall be subject to the provisions of sections 504 
     and 505 and the rules and regulations promulgated thereunder, 
     including rules and regulations governing payment of 
     authorized expenses, commissions, fees, and discounts to 
     brokers and dealers in trust certificates issued pursuant to 
     section 505.
       ``(2) Job creation.--An applicant for refinancing under 
     section 504 of a loan made pursuant to section 503 shall not 
     be required to demonstrate that a requisite number of jobs 
     will be created with the proceeds of a refinancing.
       ``(3) Loan processing fee.--To cover the cost of loan 
     packaging, processing, and other administrative functions, a 
     development company that provides refinancing under 
     subsection (b)(2) may impose a loan processing fee, not to 
     exceed 0.5 percent of the principal amount of the loan.
       ``(e) Definitions.--For purposes of this section--
       ``(1) the term `issuer' means the qualified State or local 
     development company that issued a debenture pursuant to 
     section 503, which has been purchased by the Federal 
     Financing Bank; and
       ``(2) the term `borrower' means a small business concern 
     whose loan secures a debenture issued pursuant to section 
     503.''.
       (b) Regulations.--Not later than 30 days after the date of 
     enactment of this Act, the Administration shall promulgate 
     such regulations as may be necessary to carry out this 
     section, including regulations establishing a deadline for 
     receipt of applications for prepayment and refinancing under 
     title V of the Small Business Investment Act of 1958.
       (c) Authorization.--There are authorized to be appropriated 
     such sums as may be necessary to carry out this section.
                   TITLE VI--MISCELLANEOUS AMENDMENTS

     SEC. 601. CONSOLIDATION OF FUNDING ACCOUNTS.

       (a) In General.--Section 4(c) of the Small Business Act (15 
     U.S.C. 633(c)) is amended by striking ``(c)(1) There'' and 
     all that follows through paragraph (4) and inserting the 
     following:
       ``(c) Loan Liquidation Fund.--
       ``(1) In general.--
       ``(A) Establishment.--There is hereby established in the 
     United States Treasury a fund to be known as the Loan 
     Liquidation Fund (hereafter in this subsection referred to as 
     the `Fund').
       ``(B) Amounts contained in fund.--All amounts received by 
     the Administration prior to October 1, 1991, from the 
     repayment of loans and debentures, payments of interest, and 
     other receipts arising out of transactions entered into by 
     the Administration pursuant to section 5(e), 5(g), 7(a), 
     7(b), 7(c)(2), 7(e), 7(h), 7(l), 7(m), or 8(a) of this Act, 
     or title III, IV, or V of the Small Business Investment Act 
     of 1958, shall be paid into the Fund. Balances existing in 
     the revolving funds on or after the effective date of this 
     paragraph shall be transferred to the Fund on such date.
       ``(C) Operating expenses.--The Fund shall have available, 
     without fiscal year limitation, such funds as may be 
     necessary to finance the operational needs of the Fund.
       ``(2) Annual status report.--As soon as practicable after 
     the end of each fiscal year, the Administration shall submit 
     to the Committees on Small Business and Appropriations of the 
     Senate and the House of Representatives a complete report on 
     the status of the Fund.''.
       (b) Interest Payments to Treasury.--Section 4(c) of the 
     Small Business Act (15 U.S.C. 633(c)) is amended--
       (1) by redesignating paragraph (5) as paragraph (3); and
       (2) in paragraph (3)(B), as redesignated, by striking 
     clause (ii) and inserting the following:
       ``(ii) Upon the expiration of each fiscal year, the 
     Administration shall pay into the miscellaneous receipts of 
     the United States Treasury the actual interest the 
     Administration has collected during the preceding fiscal year 
     on all financings made under the authority of this Act.''.

     SEC. 602. IMPOSITION OF FEES.

       Section 5(b) of the Small Business Act (15 U.S.C. 634(b)) 
     is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) in paragraph (11), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(12) impose, retain, and use only those fees which are 
     specifically authorized by law or which are in effect on 
     September 30, 1994, and in the amounts and at the rates in 
     effect on such date, except that the Administrator may, 
     subject to approval in appropriations Acts, impose, retain, 
     and utilize, additional fees--
       ``(A) not to exceed $300 for each loan servicing action 
     requested after disbursement of the loan, including any 
     substitution of collateral, loan assumption, release or 
     substitution of a guarantor, reamortization, or similar 
     action; and
       ``(B) to recover the direct, incremental cost involved in 
     the production and dissemination of compilations of 
     information produced by the Administration under the 
     authority of the Small Business Act and the Small Business 
     Investment Act of 1958; and
       ``(13) collect, retain and utilize, subject to approval in 
     appropriations Acts, any amounts collected by fiscal transfer 
     agents and not used by such agent as payment of the cost of 
     loan pooling or debenture servicing operations, except that 
     amounts collected under this paragraph shall be utilized 
     solely to facilitate the administration of the program that 
     generated the excess amounts.''.

     SEC. 603. JOB CREATION AND COMMUNITY BENEFIT.

       Section 7(a)(21) of the Small Business Act (15 U.S.C. 
     636(a)(21)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) Job creation and community benefit.--In providing 
     assistance under this paragraph, the Administration shall 
     develop procedures to ensure, to the maximum extent 
     practicable, that such assistance is used for projects that--
       ``(i) have the greatest potential for--

       ``(I) creating new jobs for individuals whose employment is 
     involuntarily terminated due to reductions in Federal defense 
     expenditures; or
       ``(II) preventing the loss of jobs by employees of small 
     business concerns described in subparagraph (A)(i); and

       ``(ii) have substantial potential for stimulating new 
     economic activity in communities most affected by reductions 
     in Federal defense expenditures.''.

     SEC. 604. MICROLOAN PROGRAM AMENDMENTS.

       Section 7(m)(9)(B) of the Small Business Act (15 U.S.C. 
     636(m)(9)(B)) is amended--
       (1) by inserting ``and loan guarantees'' after ``for 
     loans''; and
       (2) by inserting after ``experienced microlending 
     organizations'' the following: ``and national and regional 
     nonprofit organizations that have demonstrated experience in 
     providing training support for microenterprise development 
     and financing.''.

     SEC. 605. TECHNICAL CLARIFICATION.

       (a) Defense Conversion.--Section 7(a)(21)(A) of the Small 
     Business Act (15 U.S.C. 636(a)(21)(A)) is amended by striking 
     ``under the'' and inserting ``on a guaranteed basis under 
     the''.
       (b) Additional Technical Clarification.--Section 204 of 
     Public Law 94-305 (15 U.S.C. 634d) is amended by striking 
     ``section 202'' and inserting ``this title''.

     SEC. 606. SECONDARY MARKET STUDY DUE DATE.

       Section 6 of the Small Business Credit Enhancement Act of 
     1993 (15 U.S.C. 634 note) is amended by striking ``16 months 
     after the date of enactment'' and inserting ``November 1, 
     1994''.

     SEC. 607. STUDY AND DATA BASE: GUARANTEED BUSINESS LOAN 
                   PROGRAM AND DEVELOPMENT COMPANY PROGRAM.

       (a) Study Authorized.--The Administration shall conduct a 
     study of--
       (1) the Guaranteed Business Loan program under section 7(a) 
     of the Small Business Act; and
       (2) the Development Company program under sections 502, 
     503, and 504 of the Small Business Investment Act of 1958.
       (b) Evaluation.--After conducting the study under 
     subsection (a), the Administration shall evaluate the 
     performance of the programs described in paragraphs (1) and 
     (2) of subsection (a) on an annual and aggregated basis 
     during the most recent 4-year period for which data are 
     available. Such evaluation shall focus on the following 
     factors:
       (1) The number, dollar amount, and average size of the 
     loans or financings under each program.
       (2) The number, dollar amount, and average size of the 
     loans or financings made to woman-owned and minority-owned 
     businesses under each program.
       (3) The geographic distribution of the loans or financings 
     under each program.
       (4) The jobs created or maintained attributable to the 
     loans or financings under each program.
       (5) The number, dollar amount, and average size of the 
     loans or financings on which borrowers defaulted under each 
     program.
       (6) The amounts recovered by the Administration after 
     default, foreclosure, or otherwise under each program.
       (7) The number of companies which are no longer in business 
     despite receiving the loans or financings under each program.
       (8) The taxes paid by businesses which received the loans 
     or financings under each program.
       (9) Such other information as the Administration determines 
     to be appropriate for a complete evaluation of each program.
       (c) Contracting With Independent Entities.--In carrying out 
     subsections (a) and (b), the Administration may contract with 
     an independent entity or entities--
       (1) to conduct the study pursuant to subsection (a); and
       (2) to develop a database of information to enable the 
     Administration to maintain and access, on an ongoing basis, 
     current information relating to the factors set forth in 
     subsection (b).
       (d) Date.--The study authorized by subsection (a) shall be 
     completed not later than September 30, 1995.

     SEC. 608. SBIR VENDORS.

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

     SEC. 609. PROGRAM EXTENSION.

       Section 602(e) of the Business Opportunity Development 
     Reform Act of 1988 (15 U.S.C. 637 note) is amended by 
     striking ``September 30, 1994'', and inserting ``September 
     30, 1995''.

     SEC. 610. PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT 
                   LAWFULLY WITHIN THE UNITED STATES.

       Section 2 of the Small Business Act (15 U.S.C. 631) is 
     amended by adding at the end the following new subsection:
       ``(i) Prohibition on the Use of Funds for Individuals Not 
     Lawfully Within the United States.--None of the funds made 
     available pursuant to this Act may be used to provide any 
     direct benefit or assistance to any individual in the United 
     States if the Administrator or the official to which the 
     funds are made available receives notification that the 
     individual is not lawfully within the United States.''.

     SEC. 611. OFFICE OF ADVOCACY EMPLOYEES.

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

     SEC. 612. PROHIBITION ON THE PROVISION OF ASSISTANCE.

       Section 4 of the Small Business Act (15 U.S.C. 633) is 
     amended by adding at the end the following new subsection:
       ``(e) Prohibition on the Provision of Assistance.--
     Notwithstanding any other provision of law, the 
     Administration is prohibited from providing any financial or 
     other assistance to any business concern or other person 
     engaged in the production or distribution of any product or 
     service that is determined to be obscene.''.

     SEC. 613. CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT 
                   OBLIGATIONS.

       Section 4 of the Small Business Act (15 U.S.C. 633), as 
     amended by section 612, is amended by adding at the end the 
     following new subsection:
       ``(f) Certification of Compliance With Child Support 
     Obligations.--
       ``(1) In general.--Each applicant for financial assistance 
     under this Act, including an applicant for a direct loan or a 
     loan guarantee, shall certify that the applicant is not in 
     violation of the terms of any--
       ``(A) administrative order;
       ``(B) court order; or
       ``(C) repayment agreement entered into between the 
     applicant and the custodial parent or State agency providing 
     child support enforcement services,
     that requires the applicant to pay child support, as such 
     term is defined in section 462(b) of the Social Security Act.
       ``(2) Enforcement.--Not later than 6 months after the date 
     of enactment of this subsection, the Administration shall 
     issue such regulations as may be necessary to enforce 
     compliance the requirements of this subsection.''.

  The title was amended so as to read: ``A bill to amend the Small 
Business Act and the Small Business Investment Act of 1958, and for 
other purposes.''.
  Mr. PRESSLER. Mr. President, I rise today as ranking member of the 
Senate Small Business Committee and as a cosponsor of S. 2060, the 
``Small Business Administration Reauthorization and Amendment Act of 
1994.'' This legislation marks the culmination of the most thorough 
review of the Small Business Administration [SBA] in 4 years.
  I am very pleased with the substance of S. 2060 for many reasons. 
This bill addresses the needs of the SBA and America's small business 
men and women in a comprehensive and fair manner. Not only does this 
act provide authorization levels for the SBA's programs for fiscal 
years 1995 through 1997, it also improves numerous programs in a 
variety of ways.
  The road leading to this bill's consideration on the floor today is 
the result of cooperative efforts of many individuals, including my 
colleagues on the Small Business Committee, our counterparts on the 
House Small Business Committee, the Small Business Administration, and 
the millions of small business owners across the Nation. I especially 
would like to thank the chairman of the committee, Senator Bumpers, for 
his good efforts on this legislation and for taking the leadership 
necessary to bring S. 2060 to the Senate floor. This being my first 
experience with a major SBA reauthorization bill since becoming ranking 
member of the committee last year, I truly have enjoyed the opportunity 
to work with Chairman Bumpers.
  Mr. President, S. 2060 is largely the result of many oversight 
hearings held during this second session of the 103d Congress. The 
committee met on February 22, 1994, to discuss the SBA's proposed 
budget for fiscal year 1995. In this hearing, SBA Administrator Erskine 
Bowles unveiled his plans to revamp many of the programs within the 
SBA. Of particular concern to me was the lack of far-reaching internal 
reorganization of the SBA nationwide. At this hearing, I stated my 
disappointment to Administrator Bowles for having abandoned attempts 
truly to reorganize the agency [due to] parochial interests. The SBA, 
although it serves a very worthwhile function in the Nation's small 
business community, has been fraught with waste, fraud, and abuse. I 
commend Administrator Bowles for pursuing the noble cause of 
streamlining the SBA. However, it was, and still is, my hope that the 
Administrator will take even bolder action to prevent future scandals.
  Subsequent oversight hearings explored the effectiveness of other 
programs and possible modifications to them. On March 2, 1994, the 
committee held a hearing on the SBA's increasingly popular 7(a) 
business loan guaranty program and the Disaster Assistance Loan 
Program. This hearing was followed by a March 17 hearing covering the 
Microloan Demonstration Program and the business development programs, 
which include Small Business Development Centers [SBDC's], the Service 
Corps of Retired Executives [SCORE], and Small Business Institutes 
[SBI's]. Since that time, the committee also has conducted hearings to 
analyze the effectiveness of the section 503/504 development companies 
on May 17, and the minority small business/capitol ownership 
development [MSB/COD], or section 8(a) program on July 27.
  S. 2060, in its reported form, owes a great deal to the findings of 
those hearings. The testimony provided by the administration, trade 
associations, and entrepreneurs played a significant role in this 
legislative process. Without their input, the bill before us would be 
incomplete. Mr. President, I would now like to outline some of the key 
provisions of S. 2060.


                        title i--authorizations

  Title I of this bill establishes the SBA's authorization levels for 
fiscal years 1995, 1996, and 1997. I believe the authorization levels 
reflect a realistic expectation of what these programs will be able to 
receive in appropriations. These figures will allow these important 
programs to continue to serve small businesses and, in some cases, even 
expand those services. With these funding levels as a guidepost, 
programs vital to stimulating small business growth like the 7(a) and 
504 loan programs can continue to provide much needed credit. The title 
also authorizes Microloans, Small Business Investment Company [SBIC] 
debentures, specialized SBIC preferred stock and debentures, and SBIC 
participating securities. In addition, the title provides ``such sums 
as may be necessary'' for SBA business and homeowner disaster loans. 
These are direct loans made to individuals and businesses in 
communities which have been affected by natural disasters. I believe 
the bill does an excellent job of responding to the requests of the 
small business community and proposals offered by the administration 
while taking into account this Nation's current fiscal constraints.
  As the centerpiece of SBA's assistance programs, the section 7(a) 
business loan guaranty program is of particular importance. Under this 
program, the agency acts as a partial guarantor of loans made by 
commercial lenders to small businesses across the country. Recent years 
have seen an explosion in demand for these loans. While there are a 
variety of reasons for this increased demand, the most significant has 
been the ``credit crunch'' faced by small entrepreneurs. In recent 
years--at least partially driven by the savings and loan crisis--
lenders have become more reluctant to lend to small firms because of 
increased regulatory pressures. As a result, the 7(a) loan guaranty 
program has seen unprecedented activity.
  A similar strain has been seen in SBA's 504 development company loan 
program in recent years. Under this program, the SBA guarantees 10- and 
20-year debentures issued by Certified Development Companies [CDC's]. 
The proceeds of these debentures are used to fund loans with similar 
terms to small companies for plant acquisition, construction, 
conversion, expansion, or equipment. Mr. President, this is truly an 
amazing program. Virtually nowhere else does the Federal Government get 
this kind of bang for its buck. The program's subsidy rate is roughly 
one-half of 1 percent. This means that for every half cent we 
appropriate, one dollar is loaned to small business. This astounding 
leveraging capability, together with the stringent job creation 
requirements connected with the program, make the 504 program one of 
the most cost-effective economic development tools available to any 
state or local economy.
  The increased program levels authorized by this bill reflect the 
committee's belief that Congress should demonstrate a strong commitment 
to providing adequate financing assistance to America's job creating 
engine--small business. Quite simply, both programs provide the kind of 
long-term financing not available in private markets. In addition, each 
does so at an extremely modest cost as compared to the job creation 
they provide.
  Title I of the bill also authorizes the SBIC debenture program at the 
administration's requested levels, although the committee authorized 
levels for the SBIC participating security program are less than 
requested by the administration. This reflects the committee's view 
that the SBA's venture capital program, although it has a troubled 
history, has an important role to play in financing small business 
development. However, given the as yet untested nature of the SBIC 
participating securities program, the committee felt the most prudent 
course was not to expand the program too quickly. Quite frankly, the 
authorized levels also reflect a realistic view of what the programs 
can expect in terms of appropriations. In other words, the committee 
did not wish to send an unwarranted signal regarding future actual 
funding levels for these programs. I am hopeful that in the not too 
distant future, the new participating securities program will take a 
leading role in SBA's venture capital financing program.


                title ii--financial assistance programs

  Title II of the bill makes changes to the financial assistance 
programs of the SBA. These programs include the Microloan Demonstration 
Program, export assistance and international trade loans, the CDC 
Accredited Lenders Program, and the SBIC, and specialized SBIC 
programs.
  The legislation makes a number of changes to the SBA's Microloan 
Demonstration Program. In this area, the administration proposed that 
the microloan program be converted from direct to guaranteed loans. I 
am pleased with the way this legislation handles the administration's 
request. The program currently makes direct loans to non-profit and 
private lenders called ``intermediaries.'' The intermediaries, in turn, 
make very small loans to disadvantaged businesses. In my view, the SBA 
failed to provide a compelling need to suddenly route loans to 
intermediaries through private lenders on a guaranteed basis. I believe 
that given the Microloan Program's demonstration status, such a 
dramatic shift should not be introduced at this time. Section 201 of 
this bill, consequently, allows the SBA to establish a pilot program to 
provide guaranteed--rather than direct--loans for up to twenty 
intermediaries. This is an excellent compromise.
  Among the other changes made to the Microloan Program was an 
amendment I offered during markup. This amendment resulted directly 
from a field hearing I chaired last September on the Pine Ridge Indian 
reservation in South Dakota. During that hearing, witnesses testified 
as to the extreme scarcity of credit for businesses owned by American 
Indians. Many of the witnesses also discussed how technical assistance, 
in some cases including the teaching of basic business skills, was a 
vital part of effective small business assistance. Several witnesses 
also provided examples that demonstrated how small business developed 
through microlending effectively creates jobs and economic 
opportunities for often economically depressed American Indian 
reservations because micro-business development is a concept well 
suited to the American Indian culture.
  This amendment creates incentives for intermediaries to make loans 
and provide technical assistance to small businesses owned by American 
Indians. Under current law, each loan made by the SBA to an 
intermediary is accompanied by a 25-percent grant to be used to provide 
technical assistance to those microenterprises borrowing from the 
intermediary. This grant is subject to a 25 percent non-Federal 
matching requirement. Additional technical assistance grant money equal 
to 5 percent of an intermediary's total outstanding balance of loans is 
available to those intermediaries maintaining a loan portfolio average 
of not more than $7,500. Thus, these intermediaries can receive a 
maximum of 30 percent in technical assistance grants. This additional 
grant is not subject to the matching requirement.
  My amendment, which passed the committee on a unanimous vote, 
provides the extra 5 percent technical assistance grant to any 
intermediary making 25 percent of its loans to businesses owned by 
members of federally recognized American Indian tribes. Such 
intermediaries, in effect, would be treated just as those maintaining 
an average loan portfolio of not more than $7,500. However, in no case 
would an intermediary be able to receive more than 30 percent in 
technical assistance grants. In addition, my amendment provides 
additional incentives for intermediaries making 50 percent or more of 
their loans to businesses owned by members of federally recognized 
American Indian tribes. These intermediaries will receive the full 30 
percent maximum in technical assistance grants. However, none of the 
grant would be subject to a matching requirement.
  My amendment fits well with section 202 of the bill in making the 
Microloan Program more accessible to American Indian entrepreneurs. The 
Small Business Act in its current form does not allow governmental or 
quasi-governmental agencies to act as intermediaries. Unfortunately, 
adequate resources to provide the services that an intermediary must 
provide are scarce on most Indian reservations and to most tribal 
members. Often, the tribal government must take responsibility for 
providing such services. Section 202, therefore, allows tribal entities 
to act as intermediaries. I fully support this change.
  I also want to touch on Section 213 of this bill. This section 
establishes an Accredited Lenders Program for certain 504 development 
companies. As a part of the Accredited Lenders Program, the SBA is 
directed to develop a procedure for the expedited processing of loan 
applications or servicing actions submitted by qualified development 
companies.
  In some instances, statewide development companies fall under the 
jurisdiction of more than one SBA district office. In the past, some 
statewide development companies have found loans it makes in one part 
of the State are treated differently than those made in another. This 
has not had so much to do with differences in the borrower or terms of 
the loans as with different consideration given by different SBA 
district office personnel. This being the case, the committee's report 
clearly states the committee's intent that any such development company 
qualifying for the Accredited Lenders Program shall be provided the 
same procedure for the expedited processing of its loan applications or 
servicing actions, regardless of which district office has 
responsibility for the particular transaction. This is not meant as a 
criticism of anyone within SBA. It simply is necessary to insure 
uniform treatment of development companies qualifying for the program.


             title iii--size standards and bond guarantees

  Section 301 of the bill clarifies requirements under the Small 
Business Act that allow Federal departments or agencies other than the 
SBA to issue size standards with the approval of the SBA Administrator. 
This section broadens the criteria available for setting such size 
standards, but does nothing to change the requirements that the 
standard be set by a rulemaking, including a proposal and an 
opportunity for public comment, and that the standard be approved by 
the Administrator.
  I believe it may be necessary for the Committee to revisit this issue 
in the future as it seems not all Federal agencies understand the 
requirements relating to the setting of size standards contained in the 
Small Business Act. Specifically, I am referring to a recent rulemaking 
in which the Federal Communications Commission [FCC] set a size 
standard to define a ``small cable system.'' It appears the FCC failed 
to secure the statutorily required approval by the SBA Administrator in 
this case. As a result, on July 21, Chairman Bumpers and I, together 
with 14 of our Senate colleagues, wrote a letter to SBA chief counsel 
for advocacy Jere Glover requesting that he file an amicus brief in a 
lawsuit brought by the small cable industry against the FCC over the 
issue.


               title iv--business development assistance

  I am pleased with the opportunities that will be created for SBDCs in 
title IV of the bill. Section 402 of this title raises the minimum 
level, also known as a ``floor,'' that an SBDC may receive in Federal 
funds from $200,000 to $300,000, and raises the base level of funding 
from $100,000 plus the state's pro rata share to $200,000 plus the pro 
rata share. This increase is absolutely vital to the so-called ``big 
rectangular'' Western states, like South Dakota, that have a large 
geographic area to cover, but too small a population from which to draw 
a large enough pro rata share to support disproportionately large 
travel and programming expenses.
  The title also authorizes the SCORE and SBI Programs for the next 3 
fiscal years. These important programs provide grass roots counseling 
to small businesses for an extremely nominal Federal expenditure. The 
SCORE program teams experienced small business men and women and their 
wealth of experience with fledgling entrepreneurs who sometimes have 
little more than an idea and a great deal of enthusiasm.
  I remain somewhat concerned with the manner in which SCORE funds are 
apportioned among the local chapters and have been studying this issue 
for some time. I am not convinced reliable standards exist to guide the 
national SCORE office in its decisionmaking process in this regard. 
While I considered amending this legislation in an effort to ensure 
equitable distribution of SCORE funding, after discussions with 
Chairman Bumpers we have agreed to ask the General Accounting Office to 
study the program before any modifications are made. I will consider 
further legislative options once the results of that study are 
released.
  SBI's throughout our Nation provide a valuable service and help our 
small businesses create jobs. This program, in conjunction with State 
colleges and universities, provides teams of business students and 
faculty members to work one-on-one with existing businesses. Although 
the administration did not request funding for the SBI Program, I am 
extremely pleased the committee acted to reauthorize it. The SBI 
program provides invaluable assistance to small businesses--especially 
those with little or no access to an SBDC--in a very cost effective 
manner. It also provides the students involved with invaluable hands on 
experience in the workings of an actual business.
  I would be concerned if the committee or the administration were to 
seek an increase in SBA's financial assistance programs at the expense 
of technical assistance programs such as SCORE or SBI. If this were to 
happen, new businessowners could find themselves with capital, but with 
little or no additional assistance. If businesses should fail as a 
result and, in the process, default on their loans, neither our 
communities nor the Federal treasury would come out ahead.


          title v--relief from debenture prepayment penalties

  Title V of the committee's bill tackles a very difficult problem that 
has been with us for several years. This title is designed to provide 
relief for borrowers stuck with onerous prepayment penalties under the 
former section 503 Development Company program. Like the 504 program, 
503 loans were used to provide long-term, fixed-rate financing to small 
companies for plant acquisition, construction, conversion or expansion, 
equipment and job creation. However, presently some 3,500 borrowers 
under the old 503 program are locked into SBA-backed loans with 
interest rates reflecting the Government's cost of money 10 or more 
years ago. Thus, rates on these loans can run 12 to 15 percent and 
higher. Unfortunately, these borrowers are unable to refinance these 
loans because of extremely high prepayment penalties of which many 
borrowers say they were either unaware of or mislead about at the time 
they took out the loan.
  Another unfortunate reality is that the Federal Government is simply 
not in a position to absorb the cost--by some estimates well over $100 
million--of totally relieving these borrowers of their obligations. 
However, this year for the first time, we were able to secure $30 
million in appropriated funds to address the problem. It then became 
the committee's challenge to determine how to spread this relief as 
equitably as possible. I believe the bill accomplishes this goal. 
Borrowers wishing to refinance will be required to pay a reduced 
penalty. However, the legislation at least makes refinancing possible 
for many who simply find it impossible under current law.


                   title vi--miscellaneous amendments

  Title VI of the committee bill makes a number of improvements and 
corrections in a wide variety of SBA programs. In addition, the title 
allows for certain fees to be collected and requires that studies be 
conducted.
  Throughout the reauthorization process, one proposal that caused me 
great concern was the administration's request that it be allowed to 
collect a $15 per hour fee for SBDC counseling services. SBDC's provide 
valuable counseling service to established and fledgling entrepreneurs. 
In some areas of the country, the fee may not have been unreasonable. 
However, in many rural States such a requirement could easily close the 
door of opportunity for a potential or new entrepreneur with limited 
resources. In addition, I feel that such a fee would unnecessarily 
encumber SBDC staff already faced with limited time and money. I am 
extremely pleased that S. 2060 does not authorize SBA to charge or 
collect such fees.
  The last topic I will discuss involves another amendment I offered 
during markup of S. 2060. This amendment, also adopted on a unanimous 
committee vote, prohibits the SBA from providing assistance to 
businesses engaged in the production and/or distribution of obscene 
products or services. The amendment was offered in response to the 
SBA's recent repeal of its ``opinion molder rule'' promulgated in 1953. 
Under that rule, the administration, with few exceptions, could not 
provide assistance to small businesses engaged in the ``creation, 
origination, expression, dissemination, propagation or distribution of 
ideas, values, thought, opinions, or similar intellectual property, 
regardless of medium, form, or content.'' With the repeal of the rule, 
businesses such as newspapers, movie theaters, radio stations, and 
bookstores now are eligible for administration assistance.
  However, members of the committee shared my concern that a blanket 
repeal of the rule also would allow businesses involved in the 
production and distribution of obscene products and services to seek 
SBA support and that the agency would have no means by which to deny 
such loans or other assistance. My amendment makes it clear the SBA is 
not authorized to provide any assistance to those engaged in obscene 
businesses--and thus not entitled to first amendment protection--as 
defined by the U.S. Supreme Court. The amendment is intended to cover 
the narrow range of adult theme businesses, including adult book 
stores, adult theaters, adult film and video producers, and adult film 
and video distributors. It is not meant to apply to businesses such as 
convenience stores that may carry adult materials that do not fall 
within the Supreme Court's definition of obscenity.
  Mr. President, I once again offer my full support for this 
legislation. I truly believe the program levels authorized will 
adequately provide the SBA with the ability to continue to provide its 
invaluable services. The SBA is vital to the small businesses of this 
country. Without the support of 7(a) loans, SBIC's, Microloans, 502/504 
development companies, and the many business development programs, the 
viability of this Nation's small businesses certainly would be placed 
in jeopardy. For many budding entrepreneurs, the assistance the SBA can 
provide is just the catalyst they need to flourish. As you know, Mr. 
President, America's No. 1 job creators are this Nation's small 
businesses. In a time when so much Congressional action stymies the 
growth of small businesses, I firmly believe that S. 2060 is an 
excellent vehicle by which Congress can improve the economic 
environment for Main Street businesses.
  Mr. BUMPERS. Mr. President, S. 2060 is the first SBA reauthorization 
to be considered by Congress since President Clinton took office. It is 
a dramatic departure from the hold-the-line, do-as-little-as-necessary 
policy of the previous two administrations. President Clinton's fiscal 
year 1995 budget and legislation contain significant increases in SBA 
loan programs aimed at economic development and meeting the credit 
needs of small firms in a changing economy. This bill is major economic 
legislation which is badly needed and which can and will help further 
the Nation's recovery.
  The committee-reported bill responds to the President's requests to 
the greatest extent possible in a time of fiscal constraints and sends 
a strong economic message. The small business sector has been and will 
remain the major source of new jobs in the American economy. 
Paradoxically, small businesses face more difficulty than ever in 
obtaining the capital required for business startups, expansion, and 
operating capital.
  In business loans, loan guarantees and bond guarantees, S. 2060 as 
reported by the Small Business Committee authorizes $16.033 billion in 
financial assistance to small businesses in 1995, $18.599 billion in 
fiscal year 1996, and $23.048 billion in 1997. The role of the Small 
Business Administration under the energetic leadership of Administrator 
Erskine Bowles is more vital than ever before in sustaining and 
expanding the economic recovery now underway.
  I introduced S. 2060 on May 3, 1994. The bill authorizes SBA programs 
for 3 years, makes changes in a number of existing programs, and 
extends certain expiring provisions of law. At a markup on August 10, 
1994, the committee considered and adopted a chairman's substitute 
amendment and several other amendments detailed below.
  Prior to the markup, the committee held budget or oversight hearings 
on February 22, March 2, and March 17. Additionally, on May 17, a full 
committee hearing examined problems with prepayment penalties under the 
former section 503 Development Company Program and oversight of the 
section 504 program which succeeded the 503 program. The committee 
heard testimony on S. 737, a bill introduced by Senator Hatfield which 
eases prepayment penalties imposed on borrowers of high interest 
bearing loans under the section 503 program. The committee has included 
a substitute for S. 737 as title V of the committee amendment.


                        title i--authorizations

  Section 101 of the committee amendment authorizes SBA loan programs 
and certain business development programs. Included are sec. 7(a) loan 
guarantees, section 502 and 504 development company loans, microloans, 
Small Business Investment Company [SBIC] debentures, specialized SBIC 
preferred stock and debentures, and SBIC participating securities. Also 
included is a ``such sums as may be necessary'' authorization for SBA 
business and homeowner disaster loans. These are direct loans made to 
individuals and businesses in communities which have been affected by 
natural disasters.
  Funding for SBA programs with the exception of disaster loans are 
detailed in the following chart. The committee considered the 
administration's funding requests and the levels set in a House-
reported bill, H.R. 4801, which has not yet passed the House. It is 
possible that final House levels represented in the chart could be 
changed by floor action.
  I ask unanimous consent to print the chart in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                                                                                       SBA REAUTHORIZATION FUNDING LEVELS                                                                                                                       
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             Appropriated and                             Proposed fiscal year 1995                                                  Proposed fiscal year 1996                                                 Proposed fiscal year 1997                        
                           reprogrammed fiscal   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                year 1994                 Senate                    House                    Admin                   Senate                    House                    Admin                   Senate                    House                    Admin        
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
7(A) Guarantees\1\.....  \2\$8.788.4 billion....  $9 billion.............  $7.815 billion.........  $11.5 billion..........  $10 billion............  $10.93 billion.........  $13.5 billion..........  $12 billion............  $14.2 billion..........  $15.5 billion         
Defense conversion       .......................  $2.0 billion...........  $1.5 billion...........  $0.....................  $2.5 billion...........  $0.....................  $0.....................  $3.5 billion...........  $0.....................  $0                    
 (7(A)(21)) (not                                                                                                                                                                                                                                                                
 funded).                                                                                                                                                                                                                                                                       
Microloans direct......  $86.6 million..........  $110 million...........  $130 million...........  \3\$110 million........  $175 million...........  $195 million...........  \3\$175 million........  $250 million...........  $270 million...........  \3\$250 million       
Microloan-TA...........  $9 million.............  $45 million............  $0.....................  $15.1 million..........  $65 million............  $0.....................  $0.....................  $98 million............  $0.....................  $0                    
Micro guarantee pilot    .......................  $15 million............  $20 million............  \3\$15 million.........  $20 million............  $20 million............  \3\$20 million.........  $20 million............  $20 million............  \3\$20 million        
 (new).                                                                                                                                                                                                                                                                         
504/502 Development      $1.54 billion..........  $2.3 billion...........  $2.2 billion...........  $2.3 billion...........  $2.8 billion...........  $2.5 billion...........  $3.8 billion...........  $3.5 billion...........  $3 billion.............  $5.7 billion          
 Cos..                                                                                                                                                                                                                                                                          
SBIC debentures........  $100 million...........  $230 million...........  $260 million...........  $210 million...........  $250 million...........  $350 million...........  $250 million...........  $310 million...........  $500 million...........  $310 million          
SBIC participating.....  $207.8 million.........  $500 million...........  $500 million...........  $550 million...........  $750 million...........  $750 million...........  $1.1 billion...........  $1.125 billion.........  $1.125 billion.........  $1.7 billion          
Mesbic stock (SSBIC)...  $15 million............  $33 million............  $33 million............  $23 million............  $39 million............  $39 million............  $24 million............  $45 million............  $45 million............  $25 million           
Mesbic guaranty (SSBIC)  $17.9 million..........  $55 million............  $25 million............  $65 million............  $70 million............  $55 million............  $70 million............  $75 million............  $55 million............  $75 million           
Surety bond............  $1.7515 billion........  $1.8 billion...........  $1.8 billion...........  $2 billion.............  $2 billion.............  $1.8 billion...........  $2 billion.............  $2.2 billion...........  $1.8 billion...........  $2 billion            
Score..................  $3.5 million...........  $3.5 million...........  $3.5 million...........  \4\$3.08 million.......  $3.75 million..........  $3.67 million..........  $0.....................  $4 million.............  $3.86 million..........  $0                    
SBI....................  $3 million.............  $3 million.............  $3 million.............  \4\$0..................  $3.25 million..........  $3.15 million..........  $0.....................  $3.5 million...........  $3.31 million..........  $0                    
SBDCs: Regular.........  $71.3 million..........  $70 million............  $70 million............  \4\$67 million.........  $77.5 million..........  $77.5 million..........  $0.....................  $85 million............  $85 million............  $0                    
SBDCs: Defense           .......................  $25 million............  $0.....................  $0.....................  $25 million............  $0.....................  $0.....................  $25 million............  $0.....................  $0                    
 conversion (not                                                                                                                                                                                                                                                                
 funded).                                                                                                                                                                                                                                                                       
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\The Administration request includes the non-guaranteed portion of Sec. 7(a) loans which, in SBA's view, is required by credit reform. The House and Senate bills include only the SBA share of the program in conformance with section 20 of the Small Business Act.         
\2\Includes $1.8 billion carryover.                                                                                                                                                                                                                                             
\3\The Administration request combines direct and guaranteed amounts.                                                                                                                                                                                                           
\4\Administration requests are from Budget submission only for these programs. No authorizing language was requested.                                                                                                                                                           

                        Sec. 7(a) business loans

  Mr. BUMPERS. Mr. President, SBA's flagship program remains the sec. 
7(a) business loan guaranty program under which the agency acts as a 
partial guarantor of loans from commercial lenders to small firms. With 
SBA's guaranty of 70-90 percent of the loan amount, banks and other 
lenders are willing to provide longer term financing than would 
otherwise be available, and also larger loan amounts at lower interest 
rates than the market and the regulatory environment would permit 
without SBA's participation.
  The committee has provided separate authorizations for the regular 
7(a) program and defense conversion loans under section 7(a)(21). 
Demand for 7(a) loan guarantees has risen sharply since 1991, and 
Congress has labored to ensure that adequate program levels are 
available to meet small business credit needs in a recovering economy. 
No decrease in demand is expected in the foreseeable future for regular 
7(a) loans, while the 7(a)(21) program anticipates new borrowers as the 
economy continues to shift away from the heavy emphasis on national 
defense before the end of the cold war. This bill looks to the needs of 
a post-cold-war economy.
  Defense conversion loans under sec. 7(a)(21) were authorized in 1991 
but have received no funding to date. The program will assist 
businesses which have been severely adversely affected by reductions in 
defense expenditures, and those located in communities which have been 
adversely affected by base closings and curtailment of defense 
procurement. Members of the Armed Forces who have left the service 
earlier than planned and who wish to establish small businesses are 
also eligible for financing under section 7(a)(21).
  For defense conversion loans, S. 2060 authorizes $2 billion in fiscal 
year 1995; $2.5 billion in fiscal year 1996 and $3.5 billion in fiscal 
year 1997. These are in addition to regular 7(a) program levels of $9 
billion in fiscal year 1995; $10 billion in fiscal year 1996; and $12 
billion in 1997. While these are substantial increases, they are 
supported by the administration and by program experience in the last 3 
years.
  Several factors have contributed to the growth of the 7(a) program in 
the decade of the 1990's. These include increased regulatory pressure 
on banks following the savings and loan collapse and ensuing reform 
legislation, an interest rate environment which made purchase of 
government securities more profitable for banks than small business 
lending, and perhaps increased paperwork burdens for banks. All of 
these trends discouraged small business loans. As a result, 
unprecedented numbers of borrowers have turned to the SBA 7(a) program, 
and the section 504 Development Company Program for financing which the 
private market was unable to provide.

  Congress responded to increased demand for 7(a) loans in 1992 with an 
emergency supplemental appropriation which, unhappily, added to the 
deficit. In 1993, escalating demand caused the program to shut down for 
several weeks before Congress again responded, but this time with a 
reprogramming of unexpended Federal funds from other programs. This 
action did not add to the deficit, but this course could not be relied 
on for future funding for the 7(a) program. Congress also responded in 
1993 with legislation which reformed the 7(a) program and substantially 
reduced the cost of loans. Public Law 103-81 reduced the guaranteed 
percentages of some loans by SBA and imposed a fee of 40 basis points 
of 7(a) loans sold to investors in the secondary market. This 
legislation reduced the subsidy cost of the program as calculated under 
the Credit Reform Act from 5.45 percent to 2.15 percent, thereby more 
than doubling the program levels which would be available from a fixed 
amount of appropriated funds. This reform was sought by the Clinton 
administration and generally supported by the lending community as the 
responsible course of action in a time of limited federal resources and 
obvious need for small business financing.
  Growth of the 7(a) and 504 program has contributed to the economic 
recovery in many areas of the country and has prevented the credit 
crunch from causing even more pain in regions which have yet to fully 
benefit from the recovery. The program levels in this legislation 
represent a strong commitment by Congress to furthering and broadening 
the economic recovery by ensuring that adequate and affordable 
financing is available to the most vibrant sector of the economy, small 
business.


                             direct lending

  The committee amendment does not authorize SBA direct loan programs 
which have existed in the past, with the exception of the Microloan 
Program, the Specialized SBIC Preferred Stock Program, and the Disaster 
Loan Program, previously noted. This course is consistent with an 
amendment I offered earlier this year to the Senate Appropriations bill 
for SBA. That amendment moved funding from direct loans to raise fiscal 
year 1995 program levels for the sec. 504 and SBIC participating 
security programs. Appropriations for direct loans have so diminished 
over the last several years that they can hardly be called national 
programs. Often, the meager funds appropriated for direct loans have 
given business owners false hope that a direct loan could be obtained 
from SBA when, in fact, insufficient funds were available.
  The committee concluded that the limited resources could more 
effectively be used to support loan guaranty programs which have lower 
subsidy costs under credit reform. Moreover, the Microloan Program is 
being expanded so that borrowers who might have been served under the 
direct loan programs should be able to seek financing from a microloan 
intermediary. Microloan borrowers receive training and technical 
assistance which is not available to direct loan borrowers.


                   sec. 504 development company loans

  Under the 504 program, SBA guarantees a 10- or 20-year debenture 
issued by a Certified Development Company [CDC], the proceeds of which 
fund a loan to a small firm for plant acquisition, construction, 
conversion, expansion or equipment. The SBA portion of the loan covers 
not more than 40 percent of the project, with a conventional lender 
providing 50 percent financing and the borrower providing the remaining 
10 percent as equity.
  The program is attractive to banks because SBA and the CDC agree to 
take a secondary position on all of the collateral, so the back is 
effectively overcollateralized. The borrower gets a long-term, fixed-
rate loan with an interest rate comparable to the government's cost of 
money for a similar term.
  The committee has worked to meet the ambitious funding levels 
proposed by the administration for the 504 program because it provides 
a cost-effective economic development tool. With a subsidy cost of 
barely more than one-half of one percent and a strong job creation 
requirement, the 504 program has boosted economic growth in the 
communities where it has been utilized.
  Congress recently approved and the President signed legislation 
increasing the fiscal year 1994 authorization level for sec. 504 from 
$1.2 billion to $1.5 billion. The committee amendment raises the fiscal 
year 1995 program level to $2.3 billion, with further increases to $2.8 
billion in fiscal year 1996, and $3.5 billion in fiscal year 1997. The 
program levels for fiscal year 1996 and 1997 are less than sought by 
the administration but more than provided by the House. For a program 
which was funded at $500 million in 1992, these are large increases, 
but they are warranted both by need for long-term, fixed-rate, 
financing which the market does not provide and by the modest cost of 
the program.


              sbic debentures and participating securities

  Program levels for SBIC debentures in the committee amendment are 
somewhat less than those set by the House because limited resources 
should be focused primarily to the new participating security program 
which was enacted in 1992 but which remains untried. Debenture 
financing, however, remains an important financing mechanism for some 
SBIC's and their clients whose business plans do not fit with the 
participating program.
  The administration has sought extremely ambitious increases for the 
participating security program. The House bill provides $500 million of 
the $550 million request for 1995. In the outyears, the House bill 
authorizes $750 million in 1997 compared with the request of $1.1 
billion. In 1998, the House bill provides $1.125 billion of the 
administration's $1.7 billion request. The Senate bill agrees with the 
House for all 3 years.

  The committee concluded that the administration's proposed levels for 
participating securities are not prudent in light of nonexistent 
experience with this new but promising program. Moreover, the 
appropriations environment makes increases of the magnitude sought by 
the administration extremely unlikely. With a subsidy cost of almost 16 
percent for the debenture program and approximately 9 percent for the 
participating security program, SBIC financing remains among the most 
expensive of all SBA loan programs. At the same time, I am hopeful that 
the new participating security will reinvigorate venture capital 
financing for small business and perhaps produce economic successes 
comparable to the SBIC program's past economic marvels which include 
Apple Computer, Intel, Federal Express, Cray Research, Compaq and 
others.


                     Business Development Programs

  The committee amendment gives statutory authorization for three 
important business development programs: the Service Corps of Retired 
Executives [SCORE], Small Business Institutes [SBI], and a special 
authority for assistance to firms affected by defense budget reductions 
through Small Business Development Centers [SBDC's]. SCORE and SBI both 
leverage private sector resources on a volunteer basis to provide 
valuable management counseling to small business owners. SCORE uses the 
talents of retired business people to counsel small business owners, 
while SBI works through faculty and graduate business-school students.
  The authorized levels of $3.5 million for SCORE in fiscal year 1995, 
and $3 million for SBI, with modest inflation adjustments in the 
outyears, are more than matched in value by the time contributed by 
volunteers.
  The committee adopted an amendment by Senator Levin which authorizes 
SBA, as part of its management assistance duties, to counsel small 
businesses and entrepreneurs of the benefits and risks of franchising. 
Franchising is an important and growing facet of our economy and can be 
an opportunity for people who want to be their own boss and who are 
willing to work hard. However, there are risks associated with 
franchising. This amendment aims to avoid problems before they happen 
by educating prospective franchisees.


                Title II--Financial Assistance Programs

                    Microloan Demonstration Program

  At the March 17 oversight hearing and in its budget submission, the 
administration enthusiastically endorsed the Mircoloan Demonstration 
Program and called for its expansion. The administration also proposed 
a pilot program to test the idea of SBA guaranteeing loans to microloan 
intermediaries.
  The committee strongly supports the Microloan Program and has 
included a statement of policy in S. 2060 clarifying that the program 
should be accessible to eligible small businesses regardless of their 
industry or geographic location. Some areas of the country are served 
by intermediaries which provide microloans only to certain types of 
businesses such as manufacturing. In those cases, SBA should permit 
more than one intermediary to serve the given area.
  Other areas are not served by any intermediary. To help remedy this 
situation, the committee included a provision to permit certain native-
American tribal organizations to become intermediaries. Previously, 
such entities were ineligible to participate in the program because 
they did not meet the statutory definition of intermediaries. SBA 
should actively seek and train potential intermediaries to 
serve areas where microloans are currently unavailable.
  As also requested, the committee has authorized a 3-year guaranteed 
loan pilot program under which the SBA may guarantee between 90 and 100 
percent of loans to 20 intermediaries from for-profit or non-profit 
lenders, or groups of such lenders. Ten intermediaries will be located 
in urban areas and 10 in rural areas. The loans will be for 10 years 
with no interest or principal due during the first year. Only interest 
will be payable during the second through fifth years and both interest 
and principal will be due during the final 5 years of the term. SBA may 
use appropriated funds to support these guarantees, including a buy-
down of interest rates from lenders.
  The committee has increased the authorized number of Microloan 
Demonstration Programs from 110 to 150 in fiscal year 1995 and to 200 
in subsequent fiscal years. We increased the maximum amount an 
intermediary may borrow from SBA from $1.25 million to $2 million, 
eliminated the cap on the number of programs per State and, to conform 
with these two changes, increased the cap on the total loans a State 
may receive under the Microloan Program from $2.5 million to $10 
million.


                     export assistance loan program

  The administration requested three provisions intended to harmonize 
SBA's Export Loan Program with the Export-Import Bank's Export Loan 
Program. These provisions will enable SBA to work together with the 
Export-Import Bank and the Department of Commerce on jointly operated 
Export Assistance Centers. These centers will function as one-stop 
shops for businesses to obtain export counseling and financing, 
regardless of the size of the business.
  The included provisions allow SBA to guarantee a variety of forms of 
credit, including standby letters of credit and revolving lines of 
credit for small businesses, small business export trading companies, 
and small business export management companies. SBA may guarantee 
between 85 and 90 percent on such credit. The maximum amount of an 
export loan under SBA's program is increased to $1.25 million, and the 
limit for working capital, supplies, or other export purposes has been 
increased to $750,000.


           504 development company accredited lenders program

  The committee has included provisions to establish an Accredited 
Lenders Program [ALP] for certain section 504 development companies. 
This Program is based on a bill introduced by Senator Wellstone on June 
23, 1994, S. 2235, the Small Business Accredited Lenders and Packagers 
Act. Senator Wellstone, as chairman of the Subcommittee on Rural 
Economy and Family Farming, held a hearing on July 21, 1993, on the 
Federal role in rural economic development. Testimony indicated a need 
for expedited processing of section 504 loans in rural areas.
  As part of the Accredited Lenders Program, the administration is 
directed to develop a procedure for expedited processing on loan 
applications or servicing actions submitted by qualified development 
companies.


   small business investment company and specialized small business 
                      investment company programs

  In April 1994, the General Accounting Office [GAO] issued a report 
entitled ``Small Business Administration: Inadequate Documentation of 
Eligibility of Businesses Receiving SSBIC Financing,'' which was 
requested by Congressman LaFalce, chairman of the House Small Business 
Committee. GAO noted that 37 percent of all specialized small business 
investment companies [SSBIC's] had poor records or no records 
concerning the eligibility of their borrowers for financial assistance 
under the program.
  The committee amendment includes a requirement that small businesses 
seeking financial assistance from SBIC's and SSBIC's certify to SBA 
that they meet the eligibility requirements of the program. S. 2060 
also requires an SBIC or SSBIC to certify to SBA that it has reviewed 
the application for assistance and that there is no documentary or 
other indication that the applicant does not meet the program 
requirements.
  With respect to the SBIC participating security program, I am 
concerned with the number of high-dollar applications the 
administration has received and with the lack of a policy with respect 
to funding applications for participating securities submitted by 
smaller SBIC's. The Committee included a provision which requires half 
of each year's appropriations for participating securities to be 
reserved for smaller SBIC's, those with private capital of less than 
$20 million. Since proportions are not always obtainable or desirable, 
the bill permits the administrator to use more than 50 percent of the 
annual appropriations for participating securities for larger SBIC's 
if, during the last quarter of the fiscal year, there is a lack of 
qualified applicants among smaller SBIC's.


                   title iii--surety bond guarantees

                preferred surety bond guarantee program

  Section 302 of the committee substitute extends the pilot Preferred 
Surety Bond Guarantee Program for 1 year, until September 30, 1995.
  The Preferred Surety Bond Guarantee [SBG] Program was authorized on a 
test basis by title II of Public Law 100-590, the Small Business 
Administration Reauthorization and Amendments Act of 1988. The 
Preferred SBG Program is aimed at encouraging the participation of the 
large, so-called standard surety firms in the SBA Surety Bond Guarantee 
Program. Under the pilot program, a surety firm approved for 
participation is permitted to use its own bond underwriting, 
administration, and claims procedures without obtaining SBA's approval 
for the application of the SBA guarantee on a case-by-case basis. In 
exchange, the preferred surety's guarantee is limited to 70 percent 
rather than the 80 or 90 percent SBA guarantees available in the so-
called SBA Prior-Approval SBG Program. One main objective of the pilot 
Preferred SBG Program is to expand access to surety bonding for small 
business concerns owned and controlled by socially and economically 
disadvantaged businesses often referred to as SDB's.
  Regulatory implementation of the pilot Preferred SBG Program was 
slower than anticipated. To provide an adequate test period, the 
program's expiration date was previously extended from September 30, 
1992, to September 30, 1994, by section 216 of Public Law 101-574, the 
Small Business Administration Reauthorization and Amendments Act of 
1990.
  The preferred surety program permits SBA to delegate to a surety 
carrier the authority to issue, monitor, and service surety bonds 
subject to the administration's guarantee without prior approval. 
Although less than 20 percent of SBA's surety bond guarantees are 
issued under this program, it is an efficient method. S. 2060 extends 
this authority for 1 year until September 30, 1995, in order to afford 
the Committee additional time to conduct thorough oversight hearings on 
the pilot program.


            manufacturing applications and education centers

  The committee has included a provision that directs the SBA to 
promote the award of contracts to manufacturing application and 
education centers. These centers are entities which have the capacity 
to assist small businesses in a shared-use production environment and 
which offer technology demonstration, technology education, technology 
application support, and technology advancement support services. The 
administration is to promote such awards by working with the Department 
of Commerce and other agencies to identify components and subsystems 
that are both critical and currently being provided by foreign sources.
  In addition, S. 2060 further supports small businesses participating 
in the centers by authorizing an exception to the requirement that 50 
percent of the work on a contract be performed by the business to whom 
the contract is awarded. The exception applies to any manufacturing 
contract performed by a small business in conjunction with a 
manufacturing application and education center.


               title iv--business development assistance

                        cosponsorship authority

  Since 1984, SBA has had authority to cosponsor business development 
activities with non-profit and for-profit entities. After some initial 
difficulties with for-profit cosponsorship, Congress imposed certain 
restrictions on the Agency's use of such cosponsorships. SBA must 
ensure that it receives appropriate recognition and publicity, that the 
cosponsorship does not constitute or imply an SBA endorsement of the 
cosponsor's product or service, and that SBA avoids unnecessary 
promotion of products or services.
  Since the enactment of these requirements, cosponsorships with for-
profit entities have enabled SBA to leverage its resources to reach a 
larger population of small businesses. The current authority is 
extended in S. 2060 to September 30, 1997.


               small business development center program

  The Small Business Development Center [SBDC] Program is a public-
private partnership administered by the SBA which provides counseling, 
training, and other business development assistance to small businesses 
at over 900 sites nationwide. The Federal contribution is fully matched 
by State governments and other SBDC participants. The administration 
intends to make even greater use of the SBDC program than in previous 
years, and other Federal agencies are considering using the SBDC 
network to provide information and other services to small businesses. 
Demand for the program has outstripped its abilities based on current 
funding.
  Since both Houses have passed fiscal year 1995 appropriations bills 
which contain SBDC funding, the committee has included provisions to 
increase the authorized national program for SBDCs beginning in fiscal 
year 1996. The program level will increase to $77.5 million in fiscal 
year 1996, and in fiscal year 1997 and later years, the authorized 
level will be $85 million.
  In addition, beginning in fiscal year 1996, the funding floor will be 
raised from $200,000 to $300,000. Eleven States--Delaware, North 
Dakota, South Dakota, Wyoming, Montana, Vermont, Rhode Island, Idaho, 
Alaska, the Virgin Islands and the District of Columbia--are currently 
funded at the $200,000 floor. Together with matching funding 
requirements, the changes will provide those States with a minimum of 
$600,000 to operate their SBDC networks. Both the increase in the 
national program and in the funding floor will only take place if 
adequate appropriations are made available. If not, the current funding 
formula will remain applicable.
  The committee has also included a provision that permits an SBDC to 
contract with another Federal department or agency to provide small 
business services, if the contract is approved in advance by the 
associate administrator for SBDCs. The 50 percent matching funds 
requirement is not applicable to such contracts.


                women's business demonstration projects

  S. 2060 extends the authority for the women's business training 
demonstration projects for 3 years until September 30, 1997. This 
program was designed to permit private organizations to provide 
financial assistance, management assistance, and marketing assistance 
to women entrepreneurs. The women's demonstration projects were created 
by the Women's Business Ownership Act of 1988.


                national commission on women in business

  The committee unanimously adopted an amendment offered by Senator 
Moseley-Braun on behalf of herself and Senator Lautenberg which creates 
a National Commission on Women in Business. The amendment was 
cosponsored by Senators Bumpers, Harkin, Wofford, and Kohl. The 
Commission will replace the National Women's Business Council which 
will expire shortly. The commission is in lieu of a 32-member 
interagency committee created in the House bill. The existing council, 
created by the Women's Business Development Act of 1988, was a nine-
member board charged with strengthening opportunities for women 
businessowners. The committee chose creation of the new commission over 
an extension of the council or the more cumbersome structure chosen by 
the House because we believe the public-private structure of the 
commission is preferable to a large committee of Federal bureaucrats in 
addressing the issues facing women in business. The commission's duties 
are streamlined to increase the group's focus and effectiveness.
  The commission will be composed of 14 members selected equally from 
both the public and private sectors. The commission's investigative and 
reporting responsibilities include the following: First, access to 
credit and capital, second, data collection on women-owned businesses, 
third, encouragement of women's participation in the White House 
Conference on Small Business, fourth, advancement of female executives, 
and fifth, development and growth of women-owned businesses.
  The private sector members shall include three female small 
businessowners and four representatives of national women's business 
organizations. Terms of service for commission members is 1 year, but a 
member may serve for two consecutive terms.
  Public sector members will include representatives from the 
Departments of Treasury, Labor, and Commerce, the General Services 
Administration, the Federal Reserve Board, and also the Administrator 
of the SBA and the Assistant Administrator of the SBA Office of Women's 
Business Ownership.
  The commission's chairperson will be one of the women businessowners 
who shall be selected by the President. The vice-chairperson will be 
the Assistant Administrator of the SBA's Office of Women's Business 
Ownership.


          title v--relief from debenture prepayment penalties

  Title V of the committee amendment provides relief from onerous 
prepayment penalties now imposed on borrowers under the former section 
503 development company program. The 503 program provided long-term, 
fixed-rate financing to small firms for plant acquisition, 
construction, conversion or expansion, and equipment. The program 
differed from the current 504 program chiefly in that development 
company debentures--which finance individual loans--were sold to the 
Federal Financing Bank with SBA's endorsement.

  Since 1986, these same debentures have been sold in the private 
capital markets with SBA's guaranty. When the Treasury was the sole 
purchaser of 503 debentures, the Government was able to dictate terms 
to the borrowers which have proved burdensome and unfair in light of 
changes in interest rates since the early 1980's.
  Presently, some 3,500 section 503 borrowers nationally are saddled 
with SBA-backed loans with interest rates reflecting the Government's 
cost of money more than a decade ago. Many 503 loans carry interest 
rates from 12-15 percent and higher, and borrowers are unable to 
refinance at today's lower rates because of the prepayment penalties 
contained in the debentures. Borrowers have been hampered in growth and 
job creation by these onerous interest rates. Some borrowers testified 
that they were unaware of the prepayment issue when they entered into 
the loan. Others said that they were actually misled by either 
development company officials or by SBA employees on the issue when the 
loan was made. Senator Hatfield characterized the Government's policy 
toward these borrowers as ``loansharking.''
  The prepayment penalty problem has festered for many years, and this 
is not the first congressional effort to resolve the problem. In 1988, 
Congress passed S. 437, a bill introduced by Senator Metzenbaum which 
would have modified the prepayment penalty and would have benefited 
both borrowers and the Treasury. That bill was scored by the CBO, under 
rules then in effect, as reducing the deficit by about $50 million in 
the ensuing fiscal year. President Reagan pocket vetoed this bill 
following the adjournment of Congress. Subsequent changes in scoring 
rules under the 1990 Credit Reform Act prevented loan prepayments from 
being considered as revenues, and this scoring change seriously delayed 
resolution of the issue.
  Last year, Senator Hatfield took up the cause of the section 503 
borrowers and introduced S. 737. Our committee held a hearing on the 
Hatfield bill on May 17, 1994, at which SBA representatives and several 
503 borrowers testified. Additionally, the Clinton administration 
endorsed prepayment relief for these borrowers, and the President's 
fiscal year 1995 budget proposal contains $30 million in funding.
  Unfortunately, the administration proposal falls short of meaningful 
relief to all borrowers. The administration would substitute the 
current 504 prepayment penalty for the 503 loans.
  This change would allow any borrower who had repaid his loan for more 
than half of its term to face no penalty at all. However, the 
administration proposal of only $30 million in appropriated funds would 
assist a much smaller group of borrowers than the plan included in S. 
2060.
  The committee concluded that the Hatfield bill, which was estimated 
by CBO to cost $167 million, was too expensive, and the administration 
bill and budget request of $30 million was too meager. The House bill, 
on the other hand, allows a very small amount of help in the form of an 
interest rate buy-down for all borrowers. Relief, under the House bill, 
would be limited by the amount of appropriated funds available, which 
seems certain to be $30 million in fiscal year 1995, and probably zero 
thereafter.
  Complete relief for a very few and meager relief for all borrowers 
were equally unacceptable, so the committee adopted a third course of 
action which supplements appropriated funds with the proceeds of new, 
reduced prepayment penalties.
  I believe that any solution to this problem must include fairness to 
the taxpayers and the Treasury as well as the distressed and aggrieved 
borrowers. The committee amendment compromises these competing 
interests. While no borrower will get off scot-free, as some would 
under the administration's proposal, virtually all borrowers should be 
able to refinance at today's rates upon the payment of a modest 
penalty.
  The committee amendment provides borrowers the right to prepay 503 
loans upon the payment of a substitute penalty set forth in the 
following schedule: First, with respect to a 10-year term loan, 9.5 
percent; second, with respect to a 15-year term loan, 9.5 percent; 
third, with respect to a 20-year term loan, 10.5 percent; and fourth, 
with respect to a 25-year term loan, 11.5 percent.
  These penalties are based on the outstanding principal balance of the 
loan and accrued interest at the time of prepayment and are estimated 
to cover approximately half of the cost of these refinancings to the 
Federal Financing Bank. The remainder of the cost will be covered by 
SBA appropriated funds contained in the President's fiscal year 1995 
budget and in the House and Senate fiscal year 1995 appropriations 
bills for the Departments of Commerce, Justice, State and Related 
Agencies. The committee estimates, based on data from SBA, that the sum 
of these two amounts will allow at least 75 percent of all affected 
borrowers to prepay, which should include virtually all borrowers 
likely to choose prepayment.
  The committee amendment makes clear that all costs of refinancing may 
be included in a new section 504 loan, including the penalty here 
enacted. A borrower may, however, choose any other sources of financing 
available to him.


                   title vi--miscellaneous amendments

  The committee amendments permits SBA to collect and retain certain 
user fees and loan action fees. The administration requested and the 
committee agreed to permit the agency the authority to impose fees for 
loan servicing actions such as loan extensions or other modification of 
the terms of a loan. Commercial lenders routinely charge substantial 
fees for such actions. SBA is permitted under the amendment to charge 
not more than $300 for loan actions. This figure represents a maximum 
which will be imposed only for the most costly loan actions.
  The amendment also permits SBA to collect and retain reasonable fees 
for publications produced by SBA. SBA has for many years produced and 
distributed pamphlets and the like on a variety of business issues. 
These range from general information on starting a business to 
specialized information on particular types of businesses such as day 
care centers. A number of valuable publications from years past are 
outdated, and SBA has not had resources sufficient to develop and 
publish new ones. The committee urges SBA to make publications 
available through its resource partners, including SCORE, SBDC's, and 
SBI's.
  The committee amendment does not include the administration proposal 
to authorize the SBA to collect fees for SBDC counseling.
  Section 607 of the committee amendment requires SBA to conduct a 
broad-ranging economic impact study for the 7(a) and 504 programs. This 
requirement parallels a similar requirement contained in the Senate 
report to accompany H.R. 4603, the appropriations measure for SBA for 
fiscal year 1995.
  Insofar as the 7(a) program is concerned, SBA should build on the 
results of the Price Waterhouse study released in 1991, and should 
conduct the most comprehensive assessment possible of the macroeconomic 
impact of these programs, including job creation and the impact on 
Federal and State revenues from business expansions. The study should 
also consider the default and loss rates and projections for both 
programs. The administration may use outside contractors to the extent 
necessary.
  The committee adopted an amendment offered by Senator Moseley-Braun 
on behalf of Senator Lautenberg which requires applicants for SBA 
financial assistance to certify in writing that he or she is not in 
violation of any court order, administrative order, or any other 
agreement requiring the applicant to pay child support. This amendment 
was cosponsored by Senators Bumpers, Kohl, Harkin, Mack, and Hutchison.
  Since 1975, Congress has made a concerted effort to combat the 
problem of parents who fail to honor their commitments to provide 
financial support for their children. Almost 20 years ago, the Child 
Support Enforcement program was enacted. Since that time and with every 
change to that program, the rate of collection has increased. This 
amendment will provide another tool against those parents who refuse to 
acknowledge or comply with their obligations to provide for their 
offspring. The cost of implementation of this requirement will be 
nominal.
  Mr. President, this bill has been cosponsored by Senators Pressler, 
Nunn, Levin, Harkin, Kerry, Lieberman, Wellstone, Heflin, Moseley-
Braun, and Chafee. It is good legislation which can only help the 
economy move forward and help to address the difficult challenges 
facing America's small business men and women. I urge all my colleagues 
to support S. 2060.

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