[Congressional Record Volume 140, Number 139 (Thursday, September 29, 1994)]
[Senate]
[Page S]
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[Congressional Record: September 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HATFIELD:
  S. 2473. A bill to provide for the reconstitution of outstanding 
repayment obligations of the Administrator of the Bonneville Power 
Administration for the appropriated capital investments in the Federal 
Columbia River Power System; to the Committee on Energy and Natural 
Resources.


   the bonneville power adminsitration appropriations refinancing act

 Mr. HATFIELD. Mr. President, on behalf of the administration, 
I am introducing legislation entitled the ``Bonneville Power 
Administration Appropriations Refinancing Act.'' The bill was 
transmitted officially to the Senate on September 15, 1994, and is 
similar to S. 2332, legislation that Senator Murray and I introduced on 
July 28,1994.
  Although insufficient time remains in this session for the Senate to 
consider the proposal, I am pleased that the administration has 
endorsed the refinancing of the BPA's appropriated debt, and believe 
that this support is crucial for the enactment of a refinancing bill 
during the next session of Congress. I look forward to working with the 
administration and my Senate and House colleagues on this important 
legislation in the 104th Congress.
  Mr. President, I ask unanimous consent that the bill, a section-by-
section analysis, and the letter of transmittal from the Secretary of 
Energy to the President of the Senate be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2473

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

     SEC. 1. SHORT TITLE.

       This Act may be cited as the ``Bonneville Power 
     Administration Appropriations Refinancing Act.''

     SEC. 2. DEFINITIONS.

       For the purposes of this Act--
       (1) ``Administrator'' means the Administrator of the 
     Bonneville Power Administration;
       (2) ``capital investment'' means a capitalized cost funded 
     by Federal appropriations that--
       (A) is for a project, facility, or separable unit or 
     feature of a project or facility;
       (B) is a cost for which the Administrator is required by 
     law to establish rates to repay to the U.S. Treasury through 
     the sale of electric power, transmission, or other services;
       (C) excludes a Federal irrigation investment; and
       (D) excludes an investment financed by the current revenues 
     of the Administrator or by bonds issued and sold, or 
     authorized to be issued and sold, by the Administrator under 
     section 13 of the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838(k));
       (3) ``new capital investment'' means a capital investment 
     for a project, facility, or separable unit or feature of a 
     project or facility, placed in service after September 30, 
     1995.
       (4) ``old capital investment'' means a capital investment 
     whose capitalized cost--
       (A) was incurred, but not repaid, before October 1, 1995, 
     and
       (B) was for a project, facility, or separable unit or 
     feature of a project or facility, placed in service before 
     October 1, 1995;
       (5) ``repayment date'' means the end of the period within 
     which the Administrator's rates are to assure the repayment 
     of the principal amount of a capital investment; and
       (6) ``Treasury rate'' means:
       (A) for an old capital investment, a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields, during the month preceding October 
     1, 1995, on outstanding interest-bearing obligations of the 
     United States with periods to maturity comparable to the 
     period between October 1, 1995, and the repayment date for 
     the old capital investment; and
       (B) for a new capital investment, a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields, during the month preceding the 
     beginning of the fiscal year in which the related project, 
     facility, or separable unit or feature is placed in service, 
     on outstanding interest-bearing obligations of the United 
     States with periods to maturity comparable to the period 
     between the beginning of the fiscal year and the repayment 
     date for the new capital investment.

     SEC. 3. NEW PRINCIPAL AMOUNTS.

       (a) Effective October 1, 1995, an old capital investment 
     has a new principal amount that is the sum of--
       (1) the present value of the old payment amounts for the 
     old capital investment, calculated using a discount rate 
     equal to the Treasury rate for the old capital investment; 
     and
       (2) an amount equal to $100,000,000 multiplied by a 
     fraction whose numerator is the principal amount of the old 
     payment amounts for the old capital investment and whose 
     denominator is the sum of the principal amounts of the old 
     payment amounts for all old capital investments.
       (b) With the approval of the Secretary of the Treasury 
     based solely on consistency with this Act, the Administrator 
     shall determine the new principal amounts under section 3 and 
     the assignment of interest rates to the new principal amounts 
     under section 4.
       (c) For the purposes of this section, ``old payment 
     amounts'' means, for an old capital investment, the annual 
     interest and principal that the Administrator would have paid 
     to the U.S. Treasury from October 1, 1995, if this Act were 
     not enacted, assuming that--
       (1) the principal were repaid--
       (A) on the repayment date the Administrator assigned before 
     October 1, 1993, to the old capital investment, or
       (B) with respect to an old capital investment for which the 
     Administrator has not assigned a repayment date before 
     October 1, 1993, on a repayment date the Administrator shall 
     assign to the old capital investment in accordance with 
     paragraph 10(d)(1) of the version of Department of Energy 
     Order RA 6120.2 in effect on October 1, 1993; and
       (2) interest were paid--
       (A) at the interest rate the Administrator assigned before 
     October 1, 1993, to the old capital investment, or
       (B) with respect to an old capital investment for which the 
     Administrator has not assigned an interest rate before 
     October 1, 1993, at a rate determined by the Secretary of the 
     Treasury, taking into consideration prevailing market yields, 
     during the month preceding the beginning of the fiscal year 
     in which the related project, facility, or separable unit or 
     feature is placed in service, on outstanding interest-bearing 
     obligations of the United States with periods to maturity 
     comparable to the period between the beginning of the fiscal 
     year and the repayment date for the old capital investment.

     SEC. 4. INTEREST RATE FOR NEW PRINCIPAL AMOUNTS.

       As of October 1, 1995, the unpaid balance on the new 
     principal amount established for an old capital investment 
     under section 3 bears interest annually at the Treasury rate 
     for the old capital investment until the earlier of the date 
     that the new principal amount is repaid or the repayment date 
     for the new principal amount.

     SEC. 5. REPAYMENT DATES.

       As of October 1, 1995, the repayment date for the new 
     principal amount established for an old capital investment 
     under section 3 is no earlier than the repayment date for the 
     old capital investment assumed in section 3(c)(1).

     SEC. 6. PREPAYMENT LIMITATIONS.

       During the period October 1, 1995, through September 30, 
     2000, the total new principal amounts of old capital 
     investments, as established under section 3, that the 
     Administrator may pay before their respective repayment dates 
     shall not exceed $100,000,000.

     SEC. 7. INTEREST RATES FOR NEW CAPITAL INVESTMENTS DURING 
                   CONSTRUCTION.

       (a) The principal amount of a new capital investment 
     includes interest in each fiscal year of construction of the 
     related project, facility, or separable unit or feature at a 
     rate equal to the one-year rate for the fiscal year on the 
     sum of--
       (1) construction expenditures that were made from the date 
     construction commenced through the end of the fiscal year, 
     and
       (2) accrued interest during construction.
       (b) The Administrator is not required to pay, during 
     construction of the project, facility, or separable unit or 
     feature, the interest calculated, accrued, and capitalized 
     under subsection (a).
       (c) For the purposes of this section, ``one-year rate'' for 
     a fiscal year means a rate determined by the Secretary of the 
     Treasury, taking into consideration prevailing market yields, 
     during the month preceding the beginning of the fiscal year, 
     on outstanding interest-bearing obligations of the United 
     States with periods to maturity of approximately one year.

     SEC. 8. INTEREST RATES FOR NEW CAPITAL INVESTMENTS.

       The unpaid balance on the principal amount of a new capital 
     investment bears interest at the Treasury rate for the new 
     capital investment from the date the related project, 
     facility, or separable unit or feature is placed in service 
     until the earlier of the date the new capital investment is 
     repaid or the repayment date for the new capital investment.

     SEC. 9. APPROPRIATED AMOUNTS.

       (a) Notwithstanding any other law and without fiscal year 
     limitation, there are appropriated to the Administrator 
     $15.25 million in fiscal year 1996, $15.86 million in fiscal 
     year 1997, $16.49 million is fiscal year 1998, $17.15 million 
     in fiscal year 1999, $17.84 million in fiscal year 2000, and 
     $4.10 million in each succeeding fiscal year so long as the 
     administrator makes annual payments to the Tribes under the 
     settlement agreement.
       (b) For the purposes of this section--
       (1) ``settlement agreement'' means that settlement 
     agreement between the United States of America and the 
     Confederated Tribes of the Colville Reservation signed by the 
     Tribes on April 16, 1994, and by the United States of America 
     on April 21, 1994, which settlement agreement resolves claims 
     of the Tribes in Docket 181-D of the Indian Claims 
     Commission, which docket has been transferred to the United 
     States Court of Federal Claims; and
       (2) ``Tribes'' means the Confederated Tribes of the 
     Colville Reservation, a federally-recognized Indian Tribe.

     SEC. 10. CONTRACT PROVISIONS.

       In each contract of the Administrator that provides for the 
     Administrator to sell electric power, transmission, or 
     related services, and that is in effect after September 30, 
     1995, the Administrator shall offer to include, or as the 
     case may be, shall offer to amend to include, provisions 
     specifying that after September 30, 1995--
       (1) the Administrator shall establish rates and charges on 
     the basis that--
       (A) the principal amount of an old capital investment shall 
     be no greater than the new principal amount established under 
     section 3 of this Act;
       (B) the interest rate applicable to the unpaid balance of 
     the new principal amount of an old capital investment shall 
     be no greater than the interest rate established under 
     section 4 of this Act;
       (C) any payment of principal of an old capital investment 
     shall reduce the outstanding principal balance of the old 
     capital investment in the amount of the payment at the time 
     the payment is tendered; and,
       (D) any payment of interest on the unpaid balance of the 
     new principal amount of an old capital investment shall be a 
     credit against the appropriate interest account in the amount 
     of the payment at the time the payment is tendered;
       (2) apart from charges necessary to repay the new principal 
     amount of an old capital investment as established under 
     section 3 of this Act and to pay the interest on the 
     principal amount under section 4 of this Act, no amount may 
     be charged for return to the U.S. Treasury as repayment for 
     or return on an old capital investment, whether by way of 
     rate, rent, lease payment, assessment, user charge, or any 
     other fee;
       (3) amounts provided under section 1304 of title 31 United 
     States Code, shall be available to pay, and shall be the sole 
     source for payment of, a judgment against or settlement by 
     the Administrator or the United States on a claim for a 
     breach of the contract provisions required by this Act; and
       (4) the contract provisions specified in the Act do not--
       (A) preclude the Administrator from recovering, through 
     rates or other means, any tax that is generally imposed on 
     electric utilities in the United States, or
       (B) affect the Administrator's authority under applicable 
     law, including section 7(g) of the Pacific Northwest Electric 
     Power Planning and Conservation Act (16 U.S.C. 839e(g)), to--
       (i) allocate costs and benefits, including but not limited 
     to fish and wildlife costs, to rates or resources, or
       (ii) design rates.

     SEC. 11. SAVINGS PROVISIONS.

       (a) This Act does not affect the obligation of the 
     Administrator to repay the principal associated with each 
     capital investment, and to pay interest on the principal, 
     only from the ``Administrator's net proceeds,'' as defined in 
     section 13 of the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838k(b)).
       (b) Except as provided in section 6 of this Act, this Act 
     does not affect the authority of the Administrator to pay all 
     or a portion of the principal amount associated with a 
     capital investment before the repayment date for the 
     principal amount.
                                  ____


    Bonneville Power Administration Appropriations Refinancing Act--
                      Section-By-Section Analysis


                              introduction

       The Bonneville Power Administration (BPA) markets electric 
     power produced by federal hydroelectric projects in the 
     Pacific Northwest and provides electric power transmission 
     services over certain federally-owned transmission 
     facilities. Among other obligations, BPA establishes rates to 
     repay to the U.S. Treasury the federal taxpayers' investments 
     in these hydroelectric projects and transmission facilities 
     made primarily through annual and no-year appropriations. 
     Since the early 1980's, subsidy criticisms have been directed 
     at the relatively low interest rates applicable to many of 
     these Federal Columbia River Power System (FCRPS) 
     investments. The purpose of this legislation is to resolve 
     permanently the subsidy criticisms in a way that benefits the 
     taxpayer while minimizing the impact on BPA's power and 
     transmission rates.
       The legislation accomplishes this purpose by resetting the 
     principal of BPA's outstanding repayment obligations at an 
     amount that is $100 million greater than the present value of 
     the principal and interest BPA would have paid in the absence 
     of this Act on the outstanding appropriated investments in 
     the FCRPS. The interest rates applicable to the reset 
     principal amounts are based on the U.S. Treasury's borrowing 
     costs in effect at the time the principal is reset. The 
     resetting of the repayment obligations is effective October 
     1, 1995, coincident with the beginning of BPA's next rate 
     period.
       While the Act increases BPA's repayment obligations, and 
     consequently will increase the rates BPA charges its 
     ratepayers, it also provides assurance to BPA ratepayers that 
     the Government will not further increase these obligations in 
     the future. By eliminating the exposure to such increases, 
     the legislation substantially improves the ability of BPA to 
     maintain its customer base, and to make future payments to 
     the U.S. Treasury on time and in full. Since the Act will 
     cause both BPA's rates and its cash transfers to the U.S. 
     Treasury to increase, it will aid in reducing the Federal 
     budget deficit by an estimated $45 million over the current 
     budget window.


                         section 1. short title

       This section sets the short title of this Act as the 
     ``Bonneville Power Administration Appropriations Refinancing 
     Act.''


                         section 2. definitions

       This section contains definitions that apply to this Act.
       Paragraph (1) is self-explanatory.
       Paragraph (2) clarifies the repayment obligations to be 
     affected under this Act by defining ``capital investment'' to 
     mean a capitalized cost funded by a Federal appropriation for 
     a project, facility, or separable unit or feature of a 
     project or facility, provided that the investment is one for 
     which the Administrator of the Bonneville Power 
     Administration (Administrator or BPA) is required by law to 
     establish rates to repay to the U.S. Treasury. The definition 
     excludes Federal irrigation investments required by law to be 
     repaid by the Administrator through the sale of electric 
     power, transmission or other services, and, investments 
     financed either by BPA current revenues or by bonds issued 
     and sold, or authorized to be issued and sold, under section 
     13 of the Federal Columbia River Transmission System Act.
       Paragraph (3) defines new capital investments as those 
     capital investments that are placed in service after 
     September 30, 1995.
       Paragraph (4) defines those capital investments whose 
     principle amounts are reset by this Act. ``Old capital 
     investments'' are capital investments whose capitalized costs 
     were incurred but not repaid before October 1, 1995, provided 
     that the related project, facility, or separable unit or 
     feature was placed in service before October 1, 1995. Thus, 
     the capital investments whose principal amounts are reset by 
     this Act do not include capital investments placed in service 
     after September 30, 1995. The term ``capital investments'' is 
     defined in section 2(2).
       Paragraph (5) defines ``repayment date'' as the end of the 
     period that the Administrator is to establish rates to repay 
     the principal amount of a capital investment.
       Paragraph (6) defines the term ``Treasury rate.'' The term 
     Treasury rate is used to establish both the discount rates 
     for determining the present value of the old capital 
     investments (section 3(a)) and the interest rates that will 
     apply to the new principal amounts of the old capital 
     investments (section 4). The term Treasury rate is also used 
     under section 8 in determining the interest rates that apply 
     to new capital investments, as the term is defined.
       In the case of each old capital investment, Treasury rate 
     means a rate determined by the Secretary of the Treasury, 
     taking into consideration prevailing market yields, during 
     the month preceding October 1, 1995, on outstanding interest-
     bearing obligations of the United States with periods to 
     maturity comparable to the period between October 1, 1995, 
     and the repayment date for the old capital investment. Thus, 
     the interest rates and discount rates for old capital 
     investments reflect the Treasury yield curve proximate to 
     October 1, 1995. Likewise, in the case of each new capital 
     investment, the Treasury rate means a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields during the month preceding the 
     beginning of the fiscal year in which the related facilities 
     are placed in service, on outstanding interest-bearing 
     obligations of the United States with periods to maturity 
     comparable to the period between the beginning of the fiscal 
     year in which the related facilities are placed in service 
     and the repayment date for the new capital investment. Thus, 
     the interest rates for new capital investments reflect the 
     Treasury yield curve proximate to beginning of the fiscal 
     year in which the facilities the new capital investment 
     concerns are placed in service.
       The term Treasury rate is not to be confused with other 
     interest rates that this Act directs the Secretary of the 
     Treasury to determine, specifically, the short-term (one-
     year) interest rates to be used in calculating interest 
     during construction of new capital investments (section 7) 
     and the interest rates for determining the interest that 
     would have been paid in the absence of this Act on old 
     capital investments that are placed in service after the 
     date of this Act but prior to October 1, 1995 (section 
     3(b)(2)). These latter interest rates reflect rate 
     methodologies very similar to those specified by the term 
     Treasury rate, but apply to different features of this 
     Act.
       It is expected that the Secretary of the Treasury will use 
     an interest rate formulation that the Secretary uses to 
     determine rates for federal lending and borrowing programs 
     generally.


                    section 3. new principal amounts

       Section 3 establishes new principal amounts of the old 
     capital investments, which the Administrator is obligated by 
     law to establish rates to repay. These investments were made 
     by Federal taxpayers primarily through annual appropriations 
     and include investments financed by appropriations to the 
     U.S. Army Corps of Engineers, the U.S. Bureau of Reclamation, 
     and to BPA prior to implementation of the Federal Columbia 
     River Transmission System Act. In general, the new principal 
     amount associated with each such investment is determined 
     (regardless of whether the obligation is for the transmission 
     or generation function of the FCRPS) by (a) calculating the 
     present value of the stream of principal and interest 
     payments on the investment that the Administrator would have 
     paid to the U.S. Treasury absent this Act and (b) adding to 
     the principal of each investment a pro rata portion of $100 
     million. The new principal amount is established on a one-
     time-only basis. Although the new principal amounts become 
     effective on October 1, 1995, the actual calculation of the 
     reset principal will not occur until after October 1, 1995, 
     because the discount rate will not be determined, and BPA'S 
     final audited financial statements will not become available, 
     until later in that fiscal year.
       As prescribed by the term ``old capital investments,'' the 
     new principal amount is not set for appropriations-financed 
     FCRPS investments the related facilities of which are placed 
     in service in or after fiscal year 1996, for Federal 
     irrigation investments required by law to be recovered by the 
     Administrator from the sale of electric power, transmission 
     or other services, or for investments financed by BPA current 
     revenues or by bonds issued or sold, or authorized to be 
     issued and sold, under section 13 of the Federal Columbia 
     River Transmission System Act.
       The discount rate used to determine the present value is 
     the Treasury rate for the old capital investment and is 
     identical to the interest rate that applies to the new 
     principal amounts of the old capital investments. Thus, the 
     Secretary of the Treasury is responsible for determining the 
     interest rate and the discount rate assigned to each old 
     capital investment.
       The discount period for a principal amount begins on the 
     date that the principal amount associated with an old capital 
     investment is reset (October 1, 1995) and ends, for purposes 
     of making the present value calculation, on the repayment 
     dates provided in this section. The repayment dates for 
     purposes of making the present value calculation are already 
     assigned to almost all of the old capital investments. For 
     old capital investments that will be placed in service after 
     October 1, 1993, but before October 1, 1995, no such dates 
     have been assigned. The Administrator will establish the 
     dates for these latter investments in accordance with U.S. 
     Department of Energy Order RA 6120.2--``Power Marketing 
     Administration Financial Reporting,'' as in effect at the 
     beginning of fiscal year 1994. These ideas are captured in 
     the definition of the term ``old payment amounts.''
       The interest portion of the old payment amounts is 
     determined on the basis that the principal amount would bear 
     interest annually until repaid at interest rates assigned by 
     the Administrator. For almost all old capital investments, 
     these interest rates were assigned to the capital investments 
     prior to the effective date of this Act. (For old capital 
     investments that are placed in service after September 30, 
     1993, the interest rates to be used in determining the old 
     payment amounts will be a rate determined by the Secretary of 
     the Treasury proximate to the beginning of the fiscal year in 
     which the related project or facility, or the separable unit 
     or feature of a project or facility, was placed in service. 
     Section 3(c)(2)(B) provides the manner in which these 
     interest rates are established.) Thus, for purposes of 
     determining the present value of a given interest payment on 
     a capital investment, the discount period for the payment is 
     between October 1, 1995, and the date the interest payment 
     would have been made.
       The pro rata allocation of $100,000,000 is based on the 
     ratio that the nominal principal amount of the old capital 
     investment bears to the sum of the nominal principal amounts 
     of all old capital investments. This added amount fulfills a 
     key financial objective of the Act to provide the U.S. 
     Treasury and Federal taxpayers with a $100,000,000 increase 
     in the present value of BPA's principal and interest payments 
     with respect to the old capital investments. Since the 
     $100,000,000 is a nominal amount that bears interest at a 
     rate equal to the discount rate, the present value of the 
     stream of payments is necessarily increased by $100,000,000.
       Paragraph (b) of section 3 provides that with the approval 
     of the Secretary of the Treasury based solely on consistency 
     with this Act, the Administrator shall determine the new 
     principal amounts under section 3 and the assignment of 
     interest rates to the new principal amounts under section 4. 
     The Administrator will calculate the new principal amount of 
     each old capital investment in accord with section 3 on the 
     basis of (i) the outstanding principal amount, the interest 
     rate and the repayment date of the related old capital 
     investment, (ii) the discount rate provided by the Secretary 
     of the Treasury, and (iii) for purposes of calculating the 
     pro rata share of $100 million in each new principal amount 
     under section 3(a)(2), the total principal amount of all old 
     capital investments. The Administrator will provide this data 
     to the Secretary of the Treasury so that the Secretary can 
     approve that the calculation of each new principal amount is 
     consistent with this section and that the assignment of the 
     interest rate to each new principal amount is consistent with 
     section 4.
       The approval by the Secretary of the Treasury will be 
     completed as soon as practicable after the data on the new 
     principal amounts and the interest rates are provided by the 
     Administrator. It is expected that the approval by the 
     Secretary will not require substantial time.


          section 4. interest rates for new principal amounts

       Section 4 provides that the unpaid balance of the new 
     principal amount of each old capital investment shall bear 
     interest at the Treasury rate for the old capital investment, 
     as determined by the Secretary of the Treasury under section 
     2(6)(A). The unpaid balance of each new principal amount 
     shall bear interest at that rate until the earlier of the 
     date the principal is repaid or the repayment date for the 
     investment.


                       section 5. repayment dates

       Section 5, in conjunction with the term ``repayment date'' 
     as that term is defined in section 2(5), provides that the 
     end of the repayment period for each new principal amount for 
     an old capital investment shall be no earlier than the 
     repayment date used in making the present value calculations 
     in section 3. Under existing law, the Administrator is 
     obligated to establish rates to repay capital investments 
     within a reasonable number of years. Section 5 confirms that 
     the Administrator retains this obligation notwithstanding the 
     enactment of this Act.


                   section 6. prepayment limitations

       Section 6 places a cap on the Administrator's authority to 
     prepay the new principal amounts of old capital investments. 
     During the period October 1, 1995 through September 30, 2000, 
     the Administrator may pay the new principal amounts of old 
     capital investments before their respective repayment dates 
     provided that the total of the prepayments during the period 
     does not exceed $100,000,000.


     section 7. interest rates for new capital investments during 
                              construction

       Section 7 establishes in statute a key element of the 
     repayment practices relating to new capital investments. 
     Section 7 provides the interest rates for determining the 
     interest during construction of these facilities. For each 
     fiscal year of construction, the Secretary of the Treasury 
     determines a short-term interest rate upon which that fiscal 
     year's interest during construction is based. The short-term 
     interest rate for a given fiscal year applies to the sum of 
     (a) the cumulative construction expenditures made from the 
     start of construction through the end of the subject fiscal 
     year, and (b) interest during construction that has accrued 
     prior to the end of the subject fiscal year. The short-term 
     rate for the subject fiscal year is set by the Secretary of 
     the Treasury taking into consideration the prevailing market 
     yields on outstanding obligations of the United States with 
     periods to maturity of approximately one year. These ideas 
     are included in the definition of the term ``one-year rate.''
       This method of calculating interest during construction 
     equates to common construction financing practice. In this 
     practice, construction is funded by rolling, short-term debt 
     which, upon completion of construction, is finally rolled 
     over into long-term debt that spans the expected useful life 
     of the facility constructed. Accordingly, section 7 provides 
     that amounts for interest during construction shall be 
     included in the principal amount of a new capital investment. 
     Thus, the Administrator's obligation with respect to the 
     payment of this interest arises when construction is 
     complete, at which point the interest during construction is 
     included in the principal amount of the capital investment.


         section 8. interest rates for new capital investments

       Section 8 establishes in statue an important component of 
     BPA's repayment practice, that is, the methodology for 
     determining the interest rates for new capital investments. 
     Heretofore, administrative policies and practice established 
     the interest rates applicable to capital investments as a 
     long-term Treasury interest rate in effect at the time 
     construction commenced on the related facilities. By 
     contrast, section 8 provides that the interest rate assigned 
     to capital investments made in a project, facility, or 
     separable unit or feature of a project or facility, provided 
     it is placed in service after September 30, 1995, is a rate 
     that more accurately reflects the repayment period for the 
     capital investment and interest rates at the time the related 
     facility is placed in service. The interest rate applicable 
     to these capital investments is the Treasury rate, as defined 
     in section 2(6)(B). Each of these investments would bear 
     interest at the rate so assigned until the earlier of the 
     date it is repaid or the end of its repayment period.


                    section 9. appropriated amounts

       Pursuant to the settlement agreement with the Tribes, the 
     Administrator will become obligated to pay amounts to the 
     Tribes so long as Grand Coulee Dam produces electric power. 
     Section 9 appropriates certain amounts to the Administrator. 
     (The definitions of Tribes and Settlement Agreements are 
     found in paragraph (b) of section 9). In effect, the 
     appropriations partially offset the Bonneville rate impacts 
     of the annual payments by the Administrator to the Tribes 
     under the settlement agreement. Thus, the taxpayers, through 
     the appropriated amounts under section 9 and amounts that are 
     to be paid from the judgment fund to the Tribes under the 
     settlement agreement, and Bonneville's ratepayers, through 
     the Administrator's obligation to pay annual amounts under 
     the settlement agreement, each bear an equitable share of the 
     costs of the settlement.
       Although the amounts appropriated to the Administrator in 
     section 9 are made in connection with the settlement 
     agreement, the Administrator may obligate against these 
     amounts for any authorized purpose of the Administrator. In 
     addition, these amounts are made available without fiscal 
     year limitation, meaning that the amounts remain available to 
     the Administrator until expended. In this manner the amounts 
     appropriated under section 9 are the equivalent of other 
     amounts available in the Bonneville fund and constitute an 
     ``appropriation by Congress for the fund'' within the meaning 
     of section 11(a)(3) of the Federal Columbia River 
     Transmission System Act (16 U.S.C.S. 838i(a)(3).


                    section 10. contract provisions

       Section 10 is intended to capture in contract the purpose 
     of this legislation to permanently resolve issues relating to 
     the repayment obligations of BPA's customers associated with 
     an old capital investment. With regard to such investments, 
     paragraph (1) of section 10 requires that the Administrator 
     offer to include in power and transmission contracts terms 
     that prevent the Administrator from recovering and 
     returning to the U.S. Treasury any return of the capital 
     investments other that the interest payments or principal 
     repayments authorize by this Act. Paragraph (1) of section 
     10 also provides assurance to ratepayers that outstanding 
     principal and interest associated with each old capital 
     investment, the principal of which is reset in this 
     legislation, shall be credited in the amount of any 
     payment in satisfaction thereof at the time the payment is 
     tendered. This provision assures that payments of 
     principal and interest will in fact satisfy principal and 
     interest payable on these capital investments.
       Whereas paragraph (1) of section 10 limits the return to 
     the U.S. Treasury of the Federal investments in the 
     designated projects and facilities, together with interest 
     thereon, paragraph (2) of section 10 requires the 
     Administrator to offer to include in contracts terms that 
     prevent the Administrator from recovering and returning to 
     the U.S. Treasury any additional return on those old capital 
     investments. Thus, the Administrator may not impose a charge, 
     rent or other fee for such investments, either while they are 
     being repaid or after they have been repaid. Paragraph (2) of 
     section 10 also contractually fixes the interest obligation 
     on the new principal obligation at the amount determined 
     pursuant to section 4 of this Act.
       Paragraph (3) of section 10 is intended to assure BPA 
     ratepayers that the contract provisions described in 
     paragraphs (1) and (2) of section 10 are not indirectly 
     circumvented by requiring BPA ratepayers to bear through BPA 
     rates the cost of a judgment or settlement for breach of the 
     contract provisions. The subsection also confirms that the 
     judgment fund shall be available to pay, and shall be the 
     sole source for payment of, a judgment against or settlement 
     by the Administrator or the United States on a claim for a 
     violation of the contract provisions required by section 10. 
     Section 1304 of title 31, United States Code, is a 
     continuing, indefinite appropriation to pay judgments 
     rendered against the United States, provided that payment of 
     the judgment is ``not otherwise provided for.'' Paragraph 3 
     of section 10 of this Act assures both that the Bonneville 
     fund, described in section 838 of title 16, United States 
     Code, shall not be available to pay a judgment or settlement 
     for breach by the United States of the contract provisions 
     required by section 10 of this Act, and that no 
     appropriation, other than the judgment fund, is available to 
     pay such a judgment.
       Paragraph (4)(A) of section 10 establishes that the 
     contract protections required by section 10 of this Act do 
     not extend to Bonneville's recovering a tax that is generally 
     applicable to electric utilities, whether the recovery by 
     Bonneville is made through its rates or by other means.
       Paragraph (4)(B) of section 10 makes clear that the 
     contract terms described above are in no way intended to 
     alter the Administrator's current rate design discretion or 
     ratemaking authority to recover other costs or allocate costs 
     and benefits. This Act, including the contract provisions 
     under section 10, does not preclude the Administrator from 
     recovering any other costs such as general overhead, 
     operations and maintenance, fish and wildlife, conservation, 
     risk mitigation, modifications, additions, improvements, and 
     replacements to facilities, and other costs properly 
     allocable to a rate or resource.


                     section 11. savings provisions

       Subsection (a) of this section assures that the principal 
     and interest payments by the Administrator as established in 
     this Act shall be paid only from the Administrator's net 
     proceeds.
       Subsection (b) confirms that the Administrator may repay 
     all or a portion of the principal associated with a capital 
     investment before the end of its repayment period, except as 
     limited by section 6 of this Act.
                                  ____



                                      The Secretary of Energy,

                               Washington, DC, September 15, 1994.
     Hon. Al Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Enclosed is proposed legislation 
     entitled the ``Bonneville Power Administration Appropriations 
     Refinancing Act.''
       Since the early 1980's, criticism has been directed at the 
     relatively low interest rates outstanding on many of the 
     Federal Columbia River Power System investments funded by 
     Federal appropriations and the flexible method used by the 
     Bonneville Power Administration to schedule principal 
     payments on its Federal obligations. This legislation 
     addresses long-standing subsidy criticisms in a way that 
     benefits the taxpayer while minimizing the impact on 
     Bonneville's power and transmission rates.
       Last fall, as part of the President's National Performance 
     Review initiative, the Administration proposed legislation 
     that called for Bonneville to buy out its outstanding, low 
     interest repayment obligations on appropriations with debt 
     that Bonneville would issue in the open market. Although the 
     proposed legislation would have increased the present value 
     of Bonneville's debt service payments to the U.S. Treasury, 
     it was scored as adding to the Federal deficit because 
     Bonneville would have incurred issuance costs and a higher 
     rate of interest than if the buy-out were financed through 
     the U.S. Treasury. That legislation also raised concerns that 
     Bonneville open-market access could conflict with the 
     Treasury's overall debt management plans.
       Since last fall, Bonneville has collaborated with its 
     customers and with other agencies in the Executive Branch to 
     develop revised legislation that avoids the issues raised by 
     Bonneville open-market access. The enclosed legislation calls 
     for Bonneville's outstanding repayment obligations on 
     appropriations to be reconstituted by re-setting outstanding 
     principal at the present value of the principal and annual 
     interest that Bonneville would pay to the U.S. Treasury, plus 
     $100 million. Interest rates on the new principal would be 
     reassigned at current Treasury interest rates. The bill also 
     restricts prepayments of reconstituted obligations to $100 
     million in the period from October 1, 1995 through September 
     30, 2000. Other repayment terms and conditions would remain 
     unaffected.
       Benefits to the Government of this legislation are that it 
     provides a minimum $100 million increase in the present value 
     of Bonneville's debt service payments to the U.S. Treasury. 
     This increase represents agreement between ratepayers and the 
     Government to resolve the subsidy criticisms for outstanding 
     appropriation repayment obligations. It would reduce the 
     Federal deficit by an estimated $45 million because 
     Bonneville cash transfers to Treasury and rates will 
     increase. Bonneville's customers recognize that recurring 
     subsidy criticisms must be addressed once and for all because 
     of the risk they pose to Bonneville's financial stability and 
     rate competitiveness. The legislation includes assurances to 
     ratepayers that the Government will not maintain its customer 
     base, improve its competitive position, and strengthen its 
     ability to meet future payments to the U.S. Treasury on time 
     and in full.
       The legislation also proposes that certain appropriations 
     be provided to Bonneville in connection with payments 
     Bonneville would make under a proposed litigation settlement. 
     The United States and the Confederated Tribes of the Colville 
     Reservation propose to settle the Tribes' claims that they 
     are entitled to a share of the power production revenues of 
     Grand Coulee Dam. The settlement would have the Tribes 
     dismiss the claims in return for a one-time cash payment of 
     $53 million payable from the Judgment Fund (authorized in 
     section 1304 of title 31, United States Code), and annual 
     payments from Bonneville through the revenue-generating life 
     of Grand Coulee Dam. The annual payments from Bonneville 
     would begin at approximately $15 million in FY 1996, and 
     escalate under provisions in the settlement. Bonneville would 
     receive appropriations equal to 100 percent of the annual 
     payments in each of fiscal years 1996 through 2000. In fiscal 
     years thereafter, Bonneville would receive an appropriation 
     equal to approximately $4 million per year. These 
     appropriations, together with the one-time Judgment Fund 
     payment, represent an equitable allocation of the cost of the 
     settlement between Bonneville ratepayers and Federal 
     taxpayers.
       The Administration recently submitted Colville Settlement 
     legislation that contains repayment credit provisions rather 
     than the appropriation that is in the legislation being 
     forwarded here. The appropriations in section 9 of the 
     enclosed Bonneville Power Administration Appropriations 
     Refinancing legislation supersede those in the 
     administration's Colville Settlement legislative proposal. 
     The Administration is open to the concept of merging these 
     two proposals in the legislative process. By the same token, 
     because the same results associated with implementing the 
     settlement agreement are achieved with respect to the Tribes, 
     the Treasury, and the rate payers, we are comfortable with 
     proceeding with the Colville debt repayment concept at this 
     time and then enacting the Bonneville Power Administration 
     Appropriations Refinancing Act subsequently.
       The Omnibus Budget Reconciliation Act of 1990 requires that 
     all revenue and direct spending legislation meet a pay-as-
     you-go requirement through fiscal year 1998. That is, no 
     revenue and direct spending bill should result in an increase 
     in the deficit, and if it does, it will trigger a sequester 
     if it is not fully offset. The provisions of this legislation 
     taken together would decrease net Federal outlays by 
     approximately $45 million over fiscal year 1996 through 
     fiscal year 1998.
       The Office of Management and Budget advises that the 
     enactment of this legislative proposal would be in accord 
     with the program of the President.
           Sincerely,

                                         Hazel R. O'Leary.

                                 ______

      By Mr. CAMPBELL (for himself, Mr. Craig, Mr. Kempthorne, Mr. 
        Leahy, and Mr. Burns):
  S. 2474. A bill to amend the Intermodal Surface Transportation 
Efficiency Act of 1991 to improve the national recreational trails 
funding program, and for other purposes; to the Committee on 
Environment and Public Works.


 the national recreational trails funding program amendment act of 1994

  Mr. CAMPBELL. Madam President, I rise today to introduce a bill that 
will correct a problem in getting funding to maintain and expand our 
Nation's Trail System.
  Trails are the historic backbone of our transportation system in this 
country. Trails guided settlers to the West. Trails helped bring 
commerce and supplies to those settlers. Today, trails still provide 
transportation, but also provide exercise and relaxation. Our trail 
system is suffering due to a lack of money. In 1991, Congress promised 
millions of dollars to the States for trails. Unfortunately, the States 
have not seen this funding due to a technical glitch.
  In 1991, Congress passed the Intermodal Surface Transportation 
Efficiency Act. Included in ISTEA was the National Recreational Trails 
Trust Fund Act, which returns to each State a portion of the sales tax 
on gasoline purchased by all motorized trail users. The moneys were to 
be used to construct and maintain a State's motorized and nonmotorized 
trails.
  Trails funding seems to be on a downward spiral. Although $30 million 
was authorized for trails under ISTEA, only $7.3 million was 
appropriated in fiscal year 1993. In fiscal year 1994, the matter 
became more technical. While ISTEA established a Trails Trust Fund, no 
administrative mechanism was established to distribute the funds; 
therefore, no budget States of my colleagues. I have a letter from the 
Governor of Colorado that was sent to Secretary Pena explaining his 
concern about the lack of trails funding that I unanimous consent ask 
to be included in the Record.

  As mentioned, funding for the National Recreational Trails Trust Fund 
is generated by the Federal motor fuels tax. A recent report released 
by the U.S. Treasury Department showed that $63 million in Federal gas 
taxes were collected in fiscal year 1992 from motorcyclists. 
Collections in fiscal year 1993 totaled $64 million.
  The philosophy of user pay/user benefit has been a tenet of tax 
policy. Under the act, these funds should be returned to State trails 
programs. However, of the $127 million collected in those 2 years, the 
National Recreational Trust Fund has received only $7.5 million. This 
$119.5 million shortfall is unjust.
  The $7.5 million allocated in fiscal year 1993 was used for badly 
needed trial maintenance and repair. A national advisory board has been 
working with State advisory boards to improve trail conditions for both 
motorized and nonmotorized trail users. But this program has been cut 
short by the unexpected stoppage of Federal appropriations.
  Madam President, our trails need every cent of available Highway 
Trust Fund money intended for this purpose. My bill would provide $6 
million for the National Recreational Trails Trust Fund. This money 
comes from projects in the National Highway System bill that are no 
longer needed, or projects that will not use all of their allocation 
has been made for the appropriation of funds. This apparently caused 
the authorizing and appropriating committees to argue whether funding 
could be provided for this program--leading to a deletion of trails 
funding in fiscal year 1994. To make matters worse, trails funding was 
not included in the President's fiscal year 1995 budget request.
  My State of Colorado received a grant for $122,022 in 1993. Motorized 
and nonmotorized projects each received 30 percent of the money, and 40 
percent went to combined or multiple-use trail projects.
  Communities have used these grants as seed money to encourage the 
building of trails. Municipalities, businesses, volunteers, and civic 
groups have donated time and money to build these trails. This is truly 
an endeavor in which the government and the public can work together to 
achieve positive results.
  While many use and appreciate trails, many may not realize how they 
came about and realize their need for financing. According to a student 
research project conducted at the University of Northern Colorado, 
every dollar spent on a multiuse trail--hike, bike, equestrian, et 
cetera--returns $28 to the community. The results included such 
indirect returns as environmental benefits and better community health.
  It is unfortunate that such a worthy program, which is authorized 
under ISTEA, has had so many complications in receiving its deserved 
funding. This has caused a severe lack of money for important trail 
projects in my State, and in the appropriated funds.
  I hope that my colleagues will talk to trail users in their States 
and join me in cosponsoring this necessary legislation.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            State of Colorado,

                                                 November 9, 1993.
     Federico Pena,
     Secretary of Transportation,
     Washington, DC.
       Dear Federico: I am writing to express my disappointment 
     that the National Recreational Trails Fund, administered by 
     your department, will likely have its funding cut for fiscal 
     year 1994. The start-up funding available during fiscal year 
     1993 provided Colorado with $122,000, nearly doubling the 
     resources we had available for important new trail projects 
     across the state. I am writing to urge your immediate help in 
     continuing this small but productive flow of funds.
       In recent years, the state has consistently received 
     requests for more than $2 million from local governments for 
     trail construction and maintenance. As a state, we have made 
     a bold, long-term commitment through Great Outdoors Colorado. 
     In addition, we applaud the commitment of the Clinton 
     Administration in proposing funding for the trails program, 
     using a federal gas tax paid on off-highway recreational 
     activities.
       The National Recreation Trails Fund is a program with a 
     real Colorado connection, and one which has been championed 
     in Congress by Colorado Senator Ben Nighthorse Campbell. It 
     is my understanding that the decision to delete funding was 
     made at the staff level during the recent transportation 
     appropriation bill conference, based on a technical question 
     raised by the House, and without consideration of the strong 
     support for the substance of the program.
       The trails program has been a positive catalyst for 
     progress on trails in Colorado in just one year. I would 
     appreciate your consideration of this effective program.
           Sincerely,
                                                        Roy Romer,
                                                         Governor.
                                 ______

      By Mr. CHAFEE:
  S. 2476. A bill to amend the Internal Revenue Code of 1986 to 
encourage individuals to save through individual retirement accounts, 
and for other purposes; to the Committee on Finance.


               the ira equity and enhancement act of 1994

  Mr. CHAFEE. Mr. President, I am pleased to come to the floor this 
afternoon to introduce legislation to give much-needed help to working 
families. My bill will expand individual retirement accounts, and give 
them added flexibility to help alleviate some of the financial worries 
facing families today.
  My legislation has two components to it. First, it eliminates an 
inequity in current law that works to the disadvantage of single-earner 
families. Under current law, families where both spouses work can 
contribute up to $4,000 to an IRA. However, families with only one 
working spouse is limited to $2,250--$2,000 for the wage earner and a 
mere $250 for the nonworking spouse. This stricter limit makes it very 
difficult for these families to accumulate adequate funds for their 
retirement. This situation is made all the more worse because the non 
working spouse has no other access to a retirement plan and is not 
earning Social Security credits. This problem was highlighted earlier 
this year by Senators Hutchison and Mikulski when they introduced 
legislation correcting this problem. Like their bill, my proposal 
eliminates this inequity and allows all eligible families to contribute 
the maximum $4,000 to an IRA.
  My legislation also makes individual retirement accounts more 
attractive by increasing their flexibility. This bill eliminates the 
10-percent penalty for early withdrawals from an IRA if the money is 
used to purchase a first home, to meet tuition needs, to pay medical or 
long-term care expenses, or to carry a family through periods of 
prolonged unemployment.
  Today, families are reluctant to take advantage of IRA's because they 
fear that some unforseen expense will arise that will require them to 
dip into their savings. Under current law, if a family member is faced 
with a medical or long term care expense, or is without a job for a 
substantial period of time, the Federal Government exacts a 10-percent 
penalty for using funds in an IRA to meet this need. This penalty is 
imposed above and beyond the normal income tax that is due. My bill 
eliminates that penalty in these situations.
  In addition to meeting emergency medical needs, the bill allows IRA's 
to be used--without penalty--for the purchase of a first home or to 
further the education of a member of the family. Owning a home and 
educating their children are two of the most important goals of Rhode 
Island families. They also represent the two greatest financial 
challenges facing families today. By making IRA's accessible for these 
purposes, we can make it a little easier for families to meet these 
goals.
  In summary, the legislation makes IRA's fairer by eliminating the 
bias against nonworking spouses. It also makes IRA's a more attractive 
savings vehicle by allowing access to these funds to meet pressing 
financial needs that may arise before retirement.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Questions and Answers on Senator Chafee's IRA Equity and Enhancement 
                                  Act

       1. Won't this bill encourage families to use their 
     retirement savings for purposes other than retirement?
       The bill allows IRA funds to be used to buy a first home, 
     to meet tuition expenses, to pay medical or long-term care 
     expenses, or to make ends meet during a period of prolonged 
     unemployment. Each of these situations represents a genuine 
     financial concern facing families today. The federal 
     government should do what it can to assist families in 
     meeting these challenges rather than create obstacles.
       2. Why increase the maximum contribution for non-working 
     spouses?
       This provision is designed to level the playing field for 
     all families. Families that decide to have one spouse stay at 
     home to raise their children should not be penalized by 
     making it harder for them to save for retirement.
       3. Who qualifies as a ``first-time homebuyer?''
       A first-time homebuyer is anyone who has not had an 
     ownership interest in a principal residence for three years 
     prior to acquiring the home.
       4. Can a person take advantage of the penalty-free 
     distribution to purchase a home for someone other than him or 
     herself?
       Yes. Penalty-free distributions can be made for the 
     individual's spouse, children or grandchildren, so long as 
     the person who will reside in the home qualifies as a first-
     time homebuyer.
       5. What institutions qualify for the component of the bill 
     relating to higher education expenses?
       Most public and nonprofit universities and colleges and 
     certain vocational schools will qualify.
       6. What education expenses can penalty-free distributions 
     be made for?
       Distributions can be made for tuition, fees, books, 
     supplies and equipment required as part of the enrollment or 
     attendance at these schools.
       7. Are the qualified education expenses limited to the 
     owner of the IRA?
       No. Distributions used to pay the education expenses of the 
     IRA owner and his or her spouse, child, or grandchild are 
     eligible for the favorable tax treatment.
       8. What expenses qualify as long-term care?
       These expenses include necessary diagnostic, preventive, 
     therapeutic, rehabilitative, and maintenance services 
     required by an individual to perform normal living activities 
     such as eating, dressing, and bathing.
       9. Who qualifies as needing long-term care under this 
     proposal?
       Someone who is certified by a licensed health care 
     practitioner as being unable to perform at least three normal 
     activities of daily living (eating, transferring, toileting, 
     dressing, and bathing).
       10. How long does one need to be unemployed before being 
     able to use their IRA funds without penalty?
       Anyone who has received unemployment compensation for 
     twelve consecutive weeks under any Federal or State 
     unemployment compensation law can get penalty-free access to 
     their IRA money.
                                 ______

      By Mr. GREGG:
  S. 2477. A bill to amend the Internal Revenue Code of 1986 to 
preserve family-held forest lands, and for other purposes; to the 
Committee on Finance.


                   Family Forest and Preservation Act

 Mr. GREGG. Mr. President, I introduce the Family Forestland 
Preservation Act of 1994. This bill amends several key tax provisions 
in order to help landowners keep their lands in long-term private 
forest ownership and management. Without these changes, many landowners 
will continue to be forced to sell or change the use of their land.
  This bill derives from 4 years of work by the Northern Forest Lands 
Council [NFLC]. The NFLC was created in 1990, to seek ways for Maine, 
New Hampshire, Vermont, and New York to maintain the ``traditional 
patterns of land ownership and use'' in the forest that covers this 
Nation's northeast. The northern forest is a 26 million acre stretch of 
land, home to 1 million residents, and within a 2-hour drive of 70 
million people. Nearly 85 percent of the forest is privately owned. 
However, times have changed and social and economic forces have begun 
to affect the traditional patterns of land use with more and more land 
being marketed for development.
  This bill will help maintain traditional patterns, and thus preserve 
the forest, by adjusting several estate tax provisions. This bill would 
allow heirs to make postmortem donations of conservation easements on 
undeveloped estate land and allow the valuation of undeveloped land at 
current use value for estate tax purposes if the owner or heir agrees 
to maintain the land in its current use for a period of 25 years. This 
bill would also establish a partial inflation adjustment for timber 
sales by allowing a tax credit not to exceed 50 percent.
  This will encourage landowners to maintain their timberland for long-
term stewardship that is both economically and environmentally 
desirable. Also, the bill would eliminate the requirement that 
landowners generally must work 100 hours per year in forest management 
on their forest properties to be allowed to deduct normal management 
expenses from timber activities against nonpassive income. Currently 
landowners are required to capitalize these losses until timber is 
harvested. This legislation, though prompted by the NFLC's work, will 
not benefit only the four States that makeup the northern forest. It 
will benefit all States with forest land and all who enjoy the multiple 
uses of forest land. I urge my colleagues to support this bill, that 
will not only protect the historic current use patterns, but allow the 
rustic beauty of our forests to be enjoyed by all.
                                 ______

      By Mr. KERRY (for himself, Mr. Bumpers, Mr. Pressler, Mr. Nunn, 
        Mr. Chafee, Mr. Inouye, Mr. Burns, Mr. Lautenberg, Ms. Moseley-
        Braun, Mr. Campbell, Mr. Wellstone, Mr. Wofford, and Mr. Kohl):
  S. 2478. A bill to amend the Small Business Act to enhance the 
business development opportunities of small business concerns owned and 
controlled by socially and economically disadvantaged individuals, and 
for other purposes; to the Committee on Small Business.


            THE BUSINESS DEVELOPMENT OPPORTUNITY ACT OF 1994

 Mr. KERRY. Mr. President, today, I am joined by Senators 
Pressler, Bumpers, Nunn, and others in introducing the Business 
Development Opportunity Act of 1994. This bill will reform the Small 
Business Administration's [SBA] Minority Small Business and Capital 
Ownership Development Program commonly referred to as the 8(a) program. 
It will transform what is now an overly bureaucratic set-aside program 
into a true business development program. The reformed program provides 
program participants improved and intensified managerial training, 
access to equity, reduction of bureaucratic redtape, and opportunities 
for program graduates. Further, it will increase safeguards against 
abuse.
  SBA Administrator Erskine Bowles has made a strong start in 
addressing the persistent problems of the program through the Minority 
Enterprise Development program [MED]. I believe this bill we are 
introducing today can be an important part of the development of the 
MED program. I hope that together our efforts will help develop a 
strong and vibrant minority small business community in every part of 
the Nation. I look forward to working with the SBA on these matters.
  Minority business development should not be viewed as only part of 
our social agenda but also as an essential national economic 
imperative. A growing minority enterprise community is needed for the 
well-being of our Nation. America must be able to field its complete 
team if we are to succeed in the fierce global competition of the 21st 
century.
  Small business is an important vehicle for historically disadvantaged 
minority groups to foster economic development for themselves and their 
communities. However, these groups have not had the access to equity 
necessary to develop a strong small business foundation. They have not 
had the access to information on how to develop small businesses. 
Furthermore, minority-owned small businesses have historically been 
underrepresented as contractors in the Federal procurement process.
  I seek to fashion a more effective minority enterprise development 
program. One that will contribute to the long-term viability of 
participating firms after graduation and one that provides a full array 
of business development assistance.
  The new program must be capable of helping more firms at different 
states of development, including start-up firms. As reflected in 
repeated General Accounting Office [GAO] reviews since 1980, the 
current program has provided too little assistance for the vast 
majority of the firms participating. We tried to address those problems 
in the 1988 legislation through requirements for transition management 
planning and business mix targets that gradually diminished the firm's 
dependence on 8(a) contracts, but they have not yet been fully 
implemented.
  Our bill addresses this issue by improving and focusing SBA's 
Management Assistance program. This will add core business development 
skills, such as marketing and proposal development to 8(a) certified 
businesses only.
  It will improve access to capital for program graduates by allowing 
them to sell a noncontrolling equity share of their business without 
losing the right to continue performance of contracts won while 
affiliated with the program. The bill will implement the Surety Bond 
Waiver Test program, which has granted waivers of surety bond 
requirements to qualified companies for some Government contracts. 
Also, it authorizes a test program to permit 8(a) program graduates to 
recompete for one Government contract that it had won while in the 
program as long as 25 percent of the contract is subcontracted to a 
current 8(a) participant.
  There have been charges by the SBA inspector general office that some 
of the 8(a) certified small businesses are actually ``fronts'' for 
nonminority businesses which would otherwise not qualify for these 
programs.
  Our bill will deter ``front'' companies from the various small 
disadvantaged business programs by improving SBA's administration of a 
Governmentwide protest system in which other participants can challenge 
a firm's eligibility. It gives the SBA access to more information on 
potential program abusers. It also encourages the use of available 
administrative as well as criminal remedies for those individuals or 
firms found to be engaged in misrepresentation.
  The program has developed a maze of regulations and paperwork that 
keep many from even applying for certification. Applications are 
reviewed not only at the regional SBA offices but at the central SBA 
offices. By not allowing businesses to deal directly with agencies but 
only through the SBA the program adds a needless extra level of 
bureaucracy. Once a contract is signed, too many cumbersome reports are 
needed, draining valuable time and resources away from where they are 
needed the most.
  This legislation will streamline and simplify the 8(a) programs 
certification and contracting process. It develops a onestop 
application process to expedite the application process. It accelerates 
the contract award process by allowing Federal agencies to award 
contracts directly to 8(a) certified businesses. It will streamline and 
simplify the process by which a company and the SBA determine whether 
companies fit into the appropriate size classifications for specific 
contracts.
  Not enough has been done to allow agencies to reach the minority set-
aside goals.
  Our bill will expand the tools available for agencies to meet set-
aside goals in addition to the 8(a) program. It extends the Department 
of Defense section 1207 program which provides tools for agencies to 
help them meet their goals for contracting with small disadvantaged 
businesses to all agencies can use a more streamlined and more 
competitive program.
  I believe that the Business Development Opportunity Act of 1994 will 
help minority owned small businesses grow and prosper through training, 
assistance, financing, a reduction in paperwork, and safeguard against 
fraud. I hope my colleagues will support this important legislation.
  I ask unanimous consent that the text of the bill and a summary of 
its provisions appear in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2478

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Business Development 
     Opportunity Act of 1994''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

    TITLE I--AMENDMENTS TO THE MINORITY SMALL BUSINESS AND CAPITAL 
                     OWNERSHIP DEVELOPMENT PROGRAM

        Part A--Program Organization and Participation Standards

Sec. 101. Minority Enterprise Development Program.
Sec. 102. Consolidation of eligibility review function.
Sec. 103. Clarification of various eligibility criteria.
Sec. 104. Clarification of certain additional eligibility criteria 
              imposed by regulation.
Sec. 105. Enhancing due process in eligibility determinations.
Sec. 106. Improving geographic distribution of program participants.

                Part B--Business Development Assistance

Sec. 111. Developmental assistance authorized for program participants.
Sec. 112. Expanding the eligible uses for loans under existing loan 
              programs for program participants.
Sec. 113. Test program for the use of surety bond waivers.
Sec. 114. Targeting section 7(j) business management assistance to 
              program participants.
Sec. 115. Other enhancements to the section 7(j) management assistance 
              program.
Sec. 116. Developmental teaming.

        Part C--Improving Access to Equity for Program Graduates

Sec. 121. Continued contract performance.
Sec. 122. Continued program participation.

             Part D--Contract Award and Eligibility Matters

Sec. 131. Contract award procedures.
Sec. 132. Timely determination of eligibility for contract award.
Sec. 133. Competition requirements.
Sec. 134. Standard industrial classification codes.
Sec. 135. Use of contract support levels.
Sec. 136. Business mix requirements.
Sec. 137. Encouraging self-marketing.
Sec. 138. Bundling of contractor capabilities.

                  Part E--Tribally Owned Corporations

Sec. 141. Management and control of business operations.
Sec. 142. Joint ventures.
Sec. 143. Rule of construction regarding the Buy Indian Act.

                Part F--Contract Administration Matters

Sec. 151. Accelerated payment.
Sec. 152. Expedited resolution of contract administration matters.
Sec. 153. Availability of alternative dispute resolution.

                     Part G--Program Administration

Sec. 161. Simplification of annual report to Congress.
Sec. 162. Reduction in reporting by program participants.

   TITLE II--CONTRACTING PROGRAM FOR CERTAIN SMALL BUSINESS CONCERNS

                   Part A--Civilian Agencies Program

Sec. 201. Procurement procedures.
Sec. 202. Implementation through the Federal Acquisition Regulation.
Sec. 203. Sunset.

          Part B--Eligibility Determinations Regarding Status

Sec. 211. Improved status protest system.
Sec. 212. Conforming amendment.

           TITLE III--EXPANDING SUBCONTRACTING OPPORTUNITIES

Sec. 301. Evaluating subcontract participation in awarding contracts.
Sec. 302. Subcontracting goals for certain small business concerns.
Sec. 303. Small business participation goals.
Sec. 304. Improved notice of subcontracting opportunities.

               TITLE IV--REPEALS AND TECHNICAL AMENDMENTS

                            Part A--Repeals

Sec. 401. Loan program superseded by section 7(a) loan program.
Sec. 402. Superseded loan program relating to energy.
Sec. 403. Employee training program of limited scope.
Sec. 404. Expired provision.
Sec. 405. Expired direction to the Administration.

                      Part B--Technical Amendments

Sec. 411. Technical amendments.

                          TITLE V--DEFINITIONS

Sec. 501. Historically underutilized businesses.
Sec. 502. Emerging small business concern.

       TITLE VI--REGULATORY IMPLEMENTA- TION AND EFFECTIVE DATES

           Part A--Assuring Timely Regulatory Implementation

Sec. 601. Deadlines for issuance of regulations.
Sec. 602. Regulatory implementation of prior legislation.

                        Part B--Effective Dates

Sec. 611. Effective dates.
    TITLE I--AMENDMENTS TO THE MINORITY SMALL BUSINESS AND CAPITAL 
                     OWNERSHIP DEVELOPMENT PROGRAM

        PART A--PROGRAM ORGANIZATION AND PARTICIPATION STANDARDS

     SEC. 101. MINORITY ENTERPRISE DEVELOPMENT PROGRAM.

       (a) Program Established.--Section 7(j)(10) of the Small 
     Business Act (15 U.S.C. 636(j)(10)) is amended--
       (1) by striking the subsection designation and the first 2 
     sentences and inserting the following:
       ``(10) Minority enterprise development program.--
       ``(A) Establishment.--There is established within the 
     Administration a Minority Enterprise Development Program 
     (hereafter in this paragraph referred to as the `Program'), 
     which shall be administered by an Associate Administrator in 
     accordance with this paragraph and section 8(a).'';
       (2) by striking subparagraph (B);
       (3) by striking ``(A) The Program shall--'' and inserting 
     the following:
       ``(B) Program Goals.--The Program shall--''; and
       (4) in subparagraph (C)(i), by striking ``participating in 
     any program or activity conducted under the authority of this 
     paragraph or''.
       (b) Program Phases.--Section 7(j)(12) of the Small Business 
     Act (15 U.S.C. 636(j)(12)) is amended to read as follows:
       ``(12) Segmenting of minority enterprise development 
     program.--
       ``(A) In general.--In addition to such other segments as 
     the Administrator deems appropriate, the Minority Enterprise 
     Development Program established in paragraph (10) shall 
     consist of the following 3 phases:
       ``(i) The Business Creation Phase.
       ``(ii) The Business Development Phase.
       ``(iii) The Business Development (Preferential Contracting) 
     Phase.
       ``(B) Eligibility for preferential contracting.--Only a 
     firm participating in the Business Development (Preferential 
     Contracting) Phase shall be eligible for award of Federal 
     contracts pursuant to section 8(a) (and shall be referred to 
     as a `Program Participant' for the purposes of this section 
     and section 8(a)).
       ``(C) Participation by firms.--Except as provided in 
     section 10(c), a firm may participate in the Business 
     Development (Preferential Contracting) Phase described in 
     subparagraph (A)(iii) for a total period of not more than 9 
     years, which period shall be divided into the following 2 
     stages:
       ``(i) A developmental stage (of not more than the first 5 
     years).
       ``(ii) A transitional stage.''.
       (c) Conforming Amendments.--The Small Business Act (15 
     U.S.C. 601 et seq.) is amended--
       (1) by striking ``Minority Small Business and Capital 
     Ownership Development'' each place it appears and inserting 
     ``Minority Enterprise Development'';
       (2) by striking ``Capital Ownership Development'' each 
     place it appears and inserting ``Minority Enterprise 
     Development'';
       (3) by striking ``capital ownership development'' each 
     place it appears and inserting ``minority enterprise 
     development'';
       (4) by striking ``Business Opportunity Specialist'' each 
     place it appears and inserting ``Business Development 
     Specialist''; and
       (5) by striking section 7(j)(15) and inserting the 
     following:
       ``(15) [Reserved].''.

     SEC. 102. CONSOLIDATION OF ELIGIBILITY REVIEW FUNCTION.

       Section 7(j)(11)(E) of the Small Business Act (15 U.S.C. 
     636(j)(11)(E)) is amended by striking the third sentence.

     SEC. 103. CLARIFICATION OF VARIOUS ELIGIBILITY CRITERIA.

       (a) Tribally Owned Corporations.--Sections 7(j) and 8(a) of 
     the Small Business Act (15 U.S.C. 636(j), 637(a)) are each 
     amended by striking ``an economically disadvantaged Indian 
     tribe'' each place it appears and inserting ``an Indian 
     tribe''.
       (b) Native Hawaiian Organizations.--Section 8(a)(4)(A) of 
     the Small Business Act (15 U.S.C. 637(a)(4)(A)) is amended by 
     striking ``an economically disadvantaged Native Hawaiian 
     organization'' each place it appears and inserting ``a Native 
     Hawaiian organization''.
       (c) Presumption of Economic Disadvantage.--Section 
     8(a)(6)(A) of the Small Business Act (15 U.S.C. 637(a)(6)(A)) 
     is amended by striking the last sentence.

     SEC. 104. CLARIFICATION OF CERTAIN ADDITIONAL ELIGIBILITY 
                   CRITERIA IMPOSED BY REGULATION.

       Section 7(j)(11)(G) of the Small Business Act (15 U.S.C. 
     636(j)(11)(G)) is amended to read as follows:
       ``(G) An applicant shall not be denied admission into the 
     Minority Enterprise Development Program established in 
     paragraph (10) based solely on a determination by the 
     Division that--
       ``(i) specific contract opportunities are unavailable to 
     assist in the development of such concern, unless--
       ``(I) the Government has not previously procured and is 
     unlikely to procure the types of products or services offered 
     by the concern; and
       ``(II) the purchases of such products or services by the 
     Federal Government will not be in quantities sufficient to 
     support the developmental needs of the applicant and other 
     Program Participants providing the same or similar items or 
     services;
       ``(ii) the prospective Program Participant firm has not 
     been in operation for a period of time specified by the 
     Administration prior to making application to the Program, if 
     the prospective Program Participant firm can demonstrate 
     that--
       ``(I) the individual or individuals upon whom eligibility 
     is to be based have substantial and demonstrated business 
     management experience;
       ``(II) the prospective Program Participant has demonstrated 
     technical expertise necessary to carry out its business plan 
     with a substantial likelihood of success;
       ``(III) the prospective Program Participant has, or can 
     demonstrate its ability to timely obtain, adequate capital to 
     carry out its business plan;
       ``(IV) the prospective Program Participant can demonstrate 
     the competitive award and performance (either ongoing or 
     completed) of contracts from governmental or nongovernmental 
     sources in the primary industry category reflected in its 
     business plan; and
       ``(V) the prospective Program Participant has, or can 
     demonstrate its ability to timely obtain, the personnel, 
     facilities, equipment, and any other requirements needed to 
     perform contracts of the type likely to be awarded to the 
     firm pursuant to section 8(a);
       ``(iii) the individual or individuals upon whom eligibility 
     is to be based have not been working full time at managing 
     the prospective Program Participant firm for a period 
     specified by the Administration prior to making application 
     to the Program;
       ``(iv) the prospective Program Participant is a tribally 
     owned corporation whose chief executive officer (or chief 
     operating officer) is other than a Native American, if the 
     governing body of the Indian tribe certifies to the 
     Administration that it was unable to hire a qualified Native 
     American after conducting a national recruitment for such 
     individual; or
       ``(v) the prospective Program Participant lacks reasonable 
     prospects for future success despite access to one or more of 
     the types of developmental assistance provided for in 
     paragraph (13), unless such determination is supported by 
     specific findings.''.

     SEC. 105. ENHANCING DUE PROCESS IN ELIGIBILITY 
                   DETERMINATIONS.

       Section 7(j)(11)(H) of the Small Business Act (15 U.S.C. 
     636(j)(11)(H)) is amended--
       (1) by striking ``(H)'' and inserting ``(H)(i)''; and
       (2) by adding at the end the following new clauses:
       ``(ii) The Associate Administrator for Minority Enterprise 
     Development shall--
       ``(I) notify an applicant, in writing, of the denial of an 
     application under clause (i), stating the specific 
     determinations supported by specific findings in support of 
     the denial; and
       ``(II) provide the applicant an opportunity to respond (or 
     to modify the business organization of the applicant in 
     response) to matters raised in the notice of denial and to 
     seek a reconsideration of the application.
       ``(iii) If the application is denied upon reconsideration 
     pursuant to clause (ii) and the denial is based upon 
     determinations or findings not previously cited as a basis 
     for the initial denial of the application, the Associate 
     Administrator for Minority Enterprise Development shall 
     provide the applicant an opportunity to respond to the 
     determinations or findings not previously raised, or to 
     modify the business organization of the applicant in response 
     to such determinations or findings.''.

     SEC. 106. IMPROVING GEOGRAPHIC DISTRIBUTION OF PROGRAM 
                   PARTICIPANTS.

       (a) Action Plan Required.--The Administrator of the Small 
     Business Administration shall develop an action plan for 
     improving participation in the Minority Enterprise 
     Development Program established by section 101 by firms 
     across the Nation.
       (b) Contents of the Action Plan.--In addition to such other 
     matters as the Administrator deems appropriate, the action 
     plan developed under subsection (a) shall address--
       (1) an outreach program directed at small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals eligible for program participation 
     in those States with historically low rates of participation 
     in the Minority Enterprise Development Program (and its 
     predecessor program, the Minority Small Business and Capital 
     Ownership Development Program); and
       (2) improved implementation of section 8(a)(16)(B) of the 
     Small Business Act (relating to geographic distribution of 
     contracts awarded noncompetitively pursuant to section 
     8(a)(1) of such Act).
       (c) Public Participation.--In carrying out this section, 
     the Administrator shall seek public comment on the proposals 
     to be included in the action plan.
       (d) Submission.--Not later than June 30, 1995, the action 
     plan developed under subsection (a) shall be submitted to the 
     Committees on Small Business of the Senate and House of 
     Representatives.

                PART B--BUSINESS DEVELOPMENT ASSISTANCE

     SEC. 111. DEVELOPMENTAL ASSISTANCE AUTHORIZED FOR PROGRAM 
                   PARTICIPANTS.

       Section 7(j) of the Small Business Act (15 U.S.C. 636(j)) 
     is amended--
       (1) in paragraph (13), in the matter preceding subparagraph 
     (A), by striking ``the stages of program participation 
     specified in paragraph 12'' and inserting ``its Program 
     participation''; and
       (2) by striking paragraph (14) and inserting the following:
       ``(14) [Reserved].''.

     SEC. 112. EXPANDING THE ELIGIBLE USES FOR LOANS UNDER 
                   EXISTING LOAN PROGRAMS FOR PROGRAM 
                   PARTICIPANTS.

       Section 7(a)(20)(A)(iii) of the Small Business Act (15 
     U.S.C. 636(a)(20)(A)(iii)) is amended by striking ``to be 
     used'' and all that follows before the semicolon.

     SEC. 113. TEST PROGRAM FOR THE USE OF SURETY BOND WAIVERS.

       Section 7(j)(13)(D) of the Small Business Act (15 U.S.C. 
     636(j)(13)(D)) is amended--
       (1) by striking clauses (i) through (iii);
       (2) by striking ``A maximum'' and inserting ``(i) A 
     maximum'';
       (3) by striking ``, except that, such exemptions may be 
     granted under this subparagraph only if--'' and inserting a 
     period; and
       (4) by adding at the end the following new clauses:
       ``(ii) The agency with contracting authority may, upon the 
     request of the Program Participant, grant an exemption 
     pursuant to clause (i), if--
       ``(I) the Program Participant provides certification, in 
     the form prescribed by the Administration, that the firm was 
     unable to obtain the requisite bonding from corporate surety 
     bonding firms even with a guarantee issued by the 
     Administration pursuant to title IV of the Small Business 
     Investment Act of 1958;
       ``(II) the Program Participant has provided for the 
     protection of persons furnishing materials or labor under the 
     contract by arranging for--

       ``(aa) the direct disbursement of funds owed to such 
     persons by the procuring agency or through an escrow account 
     provided by any bank the deposits of which are insured by the 
     United States Government; or
       ``(bb) irrevocable letters of credit (or other alternatives 
     to surety bonding acceptable to the procuring agency); and

       ``(III) the award value of the contract for which the 
     exemption is being sought does not exceed $1,000,000.
       ``(iii) The authority to grant an exemption under clause 
     (ii) shall cease to be effective on September 30, 1997.''.

     SEC. 114. TARGETING SECTION 7(j) BUSINESS MANAGEMENT 
                   ASSISTANCE TO PROGRAM PARTICIPANTS.

       Section 7(j)(1) of the Small Business Act (15 U.S.C. 
     636(j)(1)) is amended by striking ``individuals or 
     enterprises eligible for assistance under sections 7(i), 
     7(j)(10), and 8(a) of this Act'' and inserting ``participants 
     in the Minority Enterprise Development Program established in 
     paragraph (10)''.

     SEC. 115. OTHER ENHANCEMENTS TO THE SECTION 7(j) MANAGEMENT 
                   ASSISTANCE PROGRAM.

       (a) Focus on Business Management Assistance.--Section 
     7(j)(2)(E) of the Small Business Act (15 U.S.C. 636(j)(2)(E)) 
     is amended to read as follows:
       ``(E) the furnishing of business development services and 
     related professional services, especially accounting and 
     legal services, with special emphasis on marketing, bid and 
     proposal preparation, financial management, strategic 
     business planning, and transition management planning for 
     participants in the Minority Enterprise Development Program, 
     that will foster the continued business development of the 
     Program Participants after program graduation.''.
       (b) Two-Year Authorization.--Section 7(j)(5) of the Small 
     Business Act (15 U.S.C. 636(j)(5)) is amended to read as 
     follows:
       ``(5)(A) Financial assistance authorized in paragraph (1) 
     may be provided through grants, cooperative agreements, or 
     contracts.
       ``(B) Funds appropriated to carry out paragraph (1) shall 
     remain available for obligation by the Administration during 
     the fiscal year succeeding the fiscal year for which the 
     funds were appropriated.
       ``(C) Recipients of financial assistance awarded pursuant 
     to paragraph (1) may expend such funds prior to the 
     expiration date of the grant, cooperative agreement, or 
     contract under which the funds were awarded.''.
       (c) Eligibility for Certain Educational Institutions.--
     Section 7(j) of the Small Business Act (15 U.S.C. 636(j)) is 
     amended--
       (1) in paragraph (2)--
       (A) by redesignating subparagraphs (A) through (E) as 
     subparagraphs (B) through (F), respectively; and
       (B) by inserting before subparagraph (B), as redesignated, 
     the following new subparagraph:
       ``(A) business executive education programs conducted by 
     institutions of graduate business education for owners or 
     managers of small business concerns owned and controlled by 
     socially and economically disadvantaged individuals (as 
     defined in section 8(d)(3)(C));''; and
       (2) by striking paragraph (4) and inserting the following:
       ``(4) In making awards pursuant to paragraph (1) to 
     institutions of graduate business education eligible under 
     paragraph (2)(A), the Administration shall give preference to 
     institutions that have previously provided such programs, 
     with the greatest preference being accorded to institutions 
     that have provided such programs for a period of not less 
     than 10 consecutive years.''.

     SEC. 116. DEVELOPMENTAL TEAMING.

       (a) Program Established.--There is established a 
     Developmental Teaming Program (hereafter in this section 
     referred to as the ``Program'') within the Minority 
     Enterprise Development Program established under section 101.
       (b) Purpose.--The purpose of the Program shall be to foster 
     the business development and long-term business success of 
     firms participating in the Minority Enterprise Development 
     Program by encouraging the formation of teaming arrangements 
     and long-term strategic business alliances between such firms 
     and firms that have graduated from the Minority Enterprise 
     Development Program (and its predecessor program, the 
     Minority Small Business and Capital Ownership Development 
     Program).
       (c) Program Participants.--
       (1) Assistance recipients.--Small business concerns owned 
     and controlled by socially and economically disadvantaged 
     individuals that are participants in the Business Development 
     (Preferential Contracting) Phase of the Minority Enterprise 
     Development Program shall be eligible to participate in the 
     Program (and shall be referred to as ``Program Participants'' 
     for purposes of this section).
       (2) Assistance providers.--A small business concern owned 
     and controlled by socially and economically disadvantaged 
     individuals that is a graduate (or a current Program 
     Participant in the Transitional Stage) of the Business 
     Development (Preferential Contracting Phase) of the Minority 
     Enterprise Development Program (and its predecessor program, 
     the Minority Small Business and Capital Ownership Development 
     Program) shall be eligible to participate in the Program and 
     to furnish developmental assistance to Program Participants 
     through a developmental teaming agreement, approved pursuant 
     to subsection (d). (For purposes of this section, firms 
     having, or seeking to establish, a developmental teaming 
     agreement shall be referred to as ``Developmental Teaming 
     Partners'').
       (d) Teaming Agreements.--
       (1) Assistance authorized.--A Developmental Teaming Partner 
     may provide to a Program Participant one or more of the 
     following forms of developmental assistance and training:
       (A) General business management (including financial 
     management, organizational management and personnel 
     management).
       (B) Business development, marketing, and proposal 
     preparation.
       (C) Process engineering (including production, inventory 
     control, and quality assurance).
       (D) Award of subcontracts on a noncompetitive basis.
       (E) Technology transfer.
       (F) Financial assistance (including loans, loan guarantees, 
     surety bonding, advance payments, and accelerated progress 
     payments).
       (G) Such other forms of assistance designed to foster the 
     development of the Program Participant, contained in a 
     developmental teaming agreement approved pursuant to 
     paragraph (3).
       (2) Content of agreements.--In addition to such other 
     matters as the parties may deem appropriate, each 
     developmental teaming agreement shall include the matters 
     described in subsection (e).
       (3) Approval required.--Each developmental teaming 
     agreement shall be approved by the Administration before--
       (A) the furnishing of any type of developmental assistance 
     to a Program Participant pursuant to such agreement; or
       (B) the Developmental Teaming Partner becomes eligible for 
     any of the incentives authorized by subsection (f).
       (4) Action by the administration.--Each proposed 
     developmental teaming agreement shall be reviewed and 
     approved (or denied approval) not later than 45 days after 
     the receipt of such agreement by the Administration. A denial 
     of approval shall state specific reasons for the denial and 
     shall afford the applicant an opportunity for 
     reconsideration. Every reasonable effort shall be made by the 
     Administration to act upon matters relating to the 
     administration of an approved developmental teaming agreement 
     not later than 30 days after the receipt of such agreement by 
     the Administration.
       (e) Content of the Agreement.--
       (1) Forms of assistance.--Each developmental teaming 
     agreement shall specify forms of business development 
     assistance to be furnished by the Developmental Teaming 
     Partner and indicate how these forms of assistance are 
     designed to advance the approved business plan of the Program 
     Participant.
       (2) Measures of success.--Each developmental teaming 
     agreement shall include specific milestones or benchmarks 
     which will permit objective measurement of whether the 
     agreement has advanced the business development of the 
     Program Participant.
       (3) Duration of agreement.--Each developmental teaming 
     agreement between a Program Participant and a Developmental 
     Assistance Provider may be for a term not to exceed 3 years, 
     with the option of the parties to renew the agreement upon 
     its expiration for an additional term of not to exceed 2 
     years.
       (4) Termination of agreement.--The developmental teaming 
     agreement shall include provisions regarding the termination 
     of the agreement that meet the standards of subsection (h).
       (f) Participation as Subcontractor.--A Developmental 
     Teaming Partner may be awarded a subcontract under a contract 
     awarded pursuant to section 8(a)(1) of the Small Business 
     Act, without regard to the subcontracting limitations of 
     section 8(a)(14) of such Act, if--
       (1) the contract was awarded to a Program Participant with 
     which such firm has an approved developmental teaming 
     agreement; and
       (2) the subcontract award was approved as part of the 
     developmental teaming agreement (or subsequently approved by 
     the Administration).
       (g) Affiliation or Control.--For the purposes of the Small 
     Business Act, no determination of affiliation or control 
     (either direct or indirect) shall be found on the basis that 
     a Program Participant is being furnished (or has entered into 
     agreement to be furnished) developmental assistance pursuant 
     to a developmental teaming agreement, approved pursuant to 
     subsection (d).
       (h) Termination of Agreements.--
       (1) By a program participant.--A Program Participant may 
     voluntarily terminate a developmental teaming agreement after 
     giving not less than 30 days advance notice to its 
     Developmental Teaming Partner.
       (2) By a developmental assistance provider.--
       (A) Withdrawal from program.--A Developmental Teaming 
     Partner may terminate its developmental teaming agreement 
     with a Program Participant by withdrawing from the Program 
     after giving not less than 30 days advance notice to the 
     Administration and to each of the Program Participants for 
     which the firm was a Developmental Teaming Partner.
       (B) Terminating an agreement for cause.--
       (i) In general.--A Developmental Teaming Partner may 
     terminate its developmental teaming agreement with a Program 
     Participant for cause in accordance with the procedures in 
     clause (ii).
       (ii) Notice.--In terminating an agreement under clause (i), 
     the following procedures shall apply:

       (I) In general.--The Program Participant shall be furnished 
     a written notice of the proposed termination under clause 
     (i), not less than 30 days prior to the effective date of 
     such proposed termination, that states the specific reasons 
     for the proposed termination.
       (II) Response.--The Program Participant shall have not more 
     than 30 days to respond to such notice of proposed 
     termination, rebutting any findings believed to be erroneous 
     and offering a remedial program.
       (III) Final action.--After giving the Program Participant's 
     response prompt consideration, the Developmental Teaming 
     Partner shall either withdraw the notice of proposed 
     termination or issue a notice of termination.

       (iii) Nonreviewability.--The decision of the Developmental 
     Teaming Partner regarding a termination for cause, conforming 
     to the procedures of clause (ii), shall be final and shall 
     not be subject to review by the Administration.
       (3) By the small business administration.--
       (A) In general.--The Administration may terminate the 
     participation of a Developmental Teaming Partner or a Program 
     Participant for cause in accordance with subparagraph (B).
       (B) Procedures.--In terminating an agreement under 
     subparagraph (A), the following procedures shall apply:
       (i) Notice.--The firm proposed for termination from the 
     Program shall be furnished a written notice of the proposed 
     termination, not less than 30 days prior to the effective 
     date of such proposed termination, that states the specific 
     reasons for the proposed termination.
       (ii) Response.--The notice of proposed termination shall 
     provide 30 days for the firm proposed for termination to 
     respond to such notice.
       (iii) Final action.--After giving prompt consideration to 
     the response of the firm proposed for termination, the 
     Administration shall either withdraw the notice of proposed 
     termination or issue a notice of termination.
       (C) Reviewability.--A decision by the Administration to 
     terminate for cause the participation of a firm in the 
     Program shall be final, but may be appealed pursuant to 
     section 8(a)(9) of the Small Business Act.
       (i) Duration of the Program.--
       (1) In general.--Business concerns eligible to participate 
     in the Program may enter into developmental teaming 
     agreements during the period commencing on the effective date 
     of the regulations required by subsection (j) and ending on 
     September 30, 1997.
       (2) Termination.--The Program shall terminate on September 
     30, 2002.
       (j) Regulations.--The Administrator of the Small Business 
     Administration shall prescribe regulations to carry out the 
     Developmental Teaming Program. Proposed regulations shall be 
     published not later than 90 days after the date of enactment 
     of this Act. Final regulations shall be promulgated not later 
     than 180 days after the date of enactment of this Act.
       (k) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Small business concerns.--The term ``small business 
     concern'' means a business concern that meets the 
     requirements of section 3(a) of the Small Business Act and 
     the regulations promulgated pursuant to such section.
       (2) Small business concern owned and controlled by socially 
     and economically disadvantaged individuals.--The term ``small 
     business concern owned and controlled by socially and 
     economically disadvantaged individuals'' has the same meaning 
     as in section 8(d)(3)(C) of the Small Business Act.
       (3) Minority enterprise development program.--The term 
     ``Minority Enterprise Development Program'' means the program 
     authorized by section 7(j)(10)(A) of the Small Business Act 
     (as amended by section 101).
       (4) Graduated.--The term ``graduated'' has the same meaning 
     as in section 7(j)(10)(H) of the Small Business Act.

        PART C--IMPROVING ACCESS TO EQUITY FOR PROGRAM GRADUATES

     SEC. 121. CONTINUED CONTRACT PERFORMANCE.

       Section 8(a)(21) of the Small Business Act (15 U.S.C. 
     637(a)(21) is amended--
       (1) in subparagraph (B), by striking ``The Administrator 
     may, on a nondelegable basis, waive the requirements of 
     subparagraph (A) only if 1 of the following conditions 
     exist:'' and inserting ``The requirements of subparagraph (A) 
     may be waived, under any of the following circumstances:''; 
     and
       (2) by striking subparagraph (C) and inserting the 
     following:
       ``(C)(i) Except as provided in clause (ii), a request for a 
     waiver pursuant to subparagraph (B) shall be submitted prior 
     to the actual relinquishment of ownership or control.
       ``(ii) Under the circumstances described in subparagraph 
     (B)(iii), the waiver request shall be made as soon as 
     practicable after the incapacity or death occurs.''.

     SEC. 122. CONTINUED PROGRAM PARTICIPATION.

       Section 7(j)(11)(D) of the Small Business Act (15 U.S.C. 
     636(j)(11)(D)) is amended to read as follows:
       ``(D)(i) A Program Participant shall remain eligible for 
     participation in the Program after a transfer of an ownership 
     interest in the firm if ownership and control (as required by 
     section 8(a)(4)) is--
       ``(I) retained by the socially and economically 
     disadvantaged individuals upon whom Program eligibility is 
     based; or
       ``(II) acquired by a small business concern owned and 
     controlled by socially and economically disadvantaged 
     individuals who have graduated from the Program or otherwise 
     exited the Program through a means other than a termination 
     proceeding.
       ``(ii) A Program Participant shall remain eligible for 
     participation in the Program after transfer of ownership and 
     control (as required by section 8(a)(4)) to individuals who 
     are determined to be socially and economically disadvantaged 
     pursuant to section 8(a). Unless graduated or terminated, the 
     Program Participant shall be eligible for a period of 
     continued Program Participation not to exceed the period 
     described in paragraph (15).
       ``(iii) A Program Participant that is a tribally owned 
     corporation may remain eligible for participation in the 
     Program with other than a Native American as the firm's chief 
     executive officer (or chief operating officer), if the 
     governing body of the Indian tribe certifies to the 
     Administration that it was unable to hire a qualified Native 
     American after conducting a national recruitment for such an 
     individual.''.

             PART D--CONTRACT AWARD AND ELIGIBILITY MATTERS

     SEC. 131. CONTRACT AWARD PROCEDURES.

       Section 8(a)(1) of the Small Business Act (15 U.S.C. 
     637(a)(1)) is amended--
       (1) by striking subparagraphs (A), (B), and (C); and
       (2) by striking ``(a)(1)'' and inserting the following:
       ``(a)(1)(A) The Administration shall ensure that contracts 
     sufficient to satisfy the contract support levels identified 
     by participants in the Minority Enterprise Development 
     Program established in section 7(j)(10) are designated by the 
     various Federal agencies for award pursuant to this 
     subsection.
       ``(B) Except as provided in subparagraph (D), the award of 
     contracts under this section shall be made on a 
     noncompetitive basis by the agency offering the contracting 
     opportunity to the Program Participant selected for the 
     award, and determined to be responsible by such agency. The 
     award shall be made at a fair market price.
       ``(C)(i) The Administration shall determine the eligibility 
     of the Program Participant to receive the award in accordance 
     with the eligibility criteria listed in paragraph (16).
       ``(ii) With respect to an individual contracting 
     opportunity, the Administration may provide, upon a request 
     by the Program Participant, assistance with respect to--
       ``(I) the negotiation of the terms and conditions of the 
     award; and
       ``(II) the resolution of controversies arising from the 
     performance of the contract prior to such contract 
     performance controversies becoming formal contract disputes 
     within the meaning of the Contract Disputes Act of 1978;
       ``(iii) In the event of an adverse decision by an agency 
     regarding a contracting opportunity, the Administrator may--
       ``(I) not later than 5 days after receiving notice of such 
     adverse decision, file a notice of intent to appeal with the 
     head of the agency; and
       ``(II) not later than 15 days after receiving such notice, 
     file an appeal with the head of the agency, requesting 
     reconsideration of the adverse decision.
       ``(iv) Upon receipt of the notice of intent to file an 
     appeal under clause (iii)(I), further action regarding award 
     of the contract shall be suspended, unless the head of the 
     agency makes a written determination, supported by specific 
     findings, that urgent and compelling circumstances that 
     significantly affect the interests of the United States will 
     not permit reconsideration of the adverse decision.
       ``(v) If the head of the agency sustains the adverse 
     decision upon reconsideration, the decision by the head of 
     the agency shall be in writing and shall be supported by 
     specific findings.
       ``(vi) An adverse decision regarding the responsibility of 
     a Program Participant shall be decided pursuant to subsection 
     (b)(7).
       ``(vii) For the purposes of this subparagraph, an adverse 
     decision includes a decision by the contracting officer 
     responsible for the contracting opportunity--
       ``(I) failing to respond to a request from the 
     Administration to make a specific contracting opportunity 
     available for award pursuant to this subsection;
       ``(II) declining to make available for award under this 
     subsection a contracting opportunity (or class of contracting 
     opportunities) or failing to support such a determination 
     with specific findings;
       ``(III) finding a Program Participant to be ineligible for 
     award of a contracting opportunity on the basis of a 
     determination of nonresponsibility; or
       ``(IV) failing to reach agreement with the Program 
     Participant with respect to the terms and conditions of a 
     contract selected for award under this subsection.''.

     SEC. 132. TIMELY DETERMINATION OF ELIGIBILITY FOR CONTRACT 
                   AWARD.

       (a) In General.--Section 8(a)(16) of the Small Business Act 
     (15 U.S.C. 637(a)(16)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (E);
       (2) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Upon receiving notification that a Federal agency 
     intends to consider a Program Participant for award of a 
     contract pursuant to this subsection (on a competitive or 
     noncompetitive basis), the Administration shall promptly 
     notify the agency regarding the eligibility of the Program 
     Participant for award of the contract, and shall identify all 
     matters that could reasonably be expected to render the 
     Program Participant ineligible at the time of the contract 
     award.''; and
       (3) by inserting after subparagraph (A) (as added by 
     paragraph (2)) the following new subparagraphs:
       ``(B) A Program Participant may be found to be ineligible 
     for award of the contract pursuant to this subsection, if--
       ``(i) the award of the contract would result in the Program 
     Participant failing to attain its business activity targets 
     established pursuant to section 7(j)(10)(I); or
       ``(ii) the Program Participant has failed to make the 
     submissions required under paragraph (6)(B).
       ``(C) A small business concern owned and controlled by 
     socially and economically disadvantaged individuals that has 
     completed its Program Participation term pursuant to section 
     7(j)(15) shall be eligible for award if--
       ``(i) in the case of a contract to be competitively 
     awarded, the prospective contract recipient was a Program 
     Participant eligible for award of the contract on the date 
     specified for receipt of offers, and such firm had timely 
     submitted an offer (including price); or
       ``(ii) in the case of a contract to be noncompetitively 
     awarded, the prospective contract recipient was a Program 
     Participant eligible for award of the contract on the date 
     specified by the agency contracting officer for the 
     submission of an offer (including price).
       ``(D) If the Administration determines that a Program 
     Participant is ineligible for consideration for award of a 
     contract under subparagraph (B) or (C), the determination 
     shall be supported by specific findings. The determination 
     (and supporting findings) shall be furnished to the Program 
     Participant and to the contracting officer for the agency 
     providing the contracting opportunity.''.
       (b) Conforming Amendments.--Section 8(a) of the Small 
     Business Act (15 U.S.C. 637(a)) is amended--
       (1) in paragraph (3)--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) [Reserved].''; and
       (B) by striking subparagraph (D) and inserting the 
     following:
       ``(D) Subsequent to the award of a contract under this 
     subsection, if requested by the recipient of the contract, 
     the Administration shall not publicly disclose the agency's 
     estimate of the fair market price.'';
       (2) in paragraph (7), by striking subparagraph (A) and 
     inserting the following:
       ``(A) [Reserved].'';
       (3) in paragraph (12)(A), by striking ``eligible to receive 
     subcontracts'' and inserting ``eligible for contract 
     awards''; and
       (4) in paragraph (9)(B)--
       (A) in clause (iii), by striking ``and'';
       (B) by redesignating clause (iv) as clause (v); and
       (C) by inserting after clause (iii) the following new 
     clause:
       ``(iv) a determination of ineligibility for award of 
     contract pursuant to paragraph (16)(B); and''.

     SEC. 133. COMPETITION REQUIREMENTS.

       (a) Indefinite Quantity and Delivery Contracts.--Section 
     8(a)(1)(D) of the Small Business Act (15 U.S.C. 637(a)(1)(D)) 
     is amended--
       (1) by redesignating clause (ii) as clause (iv); and
       (2) by inserting after clause (i) the following new clause:
       ``(ii) Whenever a requirements-type contract (including a 
     task order contract, indefinite quantity contract, or 
     indefinite delivery contract) is to be awarded, the 
     thresholds for competition required under clause (i)(II) 
     shall be calculated on the basis of the estimated total value 
     of the contract.''.
       (b) Authorization for Additional Noncompetitive Contract 
     Awards.--Section 8(a)(1)(D) of the Small Business Act (15 
     U.S.C. 637(a)(1)(D)) is amended by inserting after clause 
     (ii) (as added by subsection (a)) the following new clause:
       ``(iii) The Associate Administrator for Minority Enterprise 
     Development, on a nondelegable basis, may authorize the 
     noncompetitive award of contracts in excess of the amounts 
     specified in clause (i)(II) to a Program Participant, if--
       ``(I) such Program Participant is an emerging small 
     business concern;
       ``(II) the award of such contracts would contribute 
     substantially to the development of the Program Participant 
     in accordance with its business plan, including attainment of 
     the business activity targets established pursuant to section 
     7(j)(10)(I), by the time such firm enters the transitional 
     stage;
       ``(III) the award value of the contract does not exceed 
     twice the amounts specified in clause (i)(II); and
       ``(IV) the aggregate dollar value of awards pursuant to 
     this clause does not exceed $20,000,000.''.

     SEC. 134. STANDARD INDUSTRIAL CLASSIFICATION CODES.

       (a) Approval of Codes.--As part of the process of 
     developing and maintaining a business plan pursuant to 
     section 7(j)(10)(D) of the Small Business Act, a Program 
     Participant may designate its capabilities to perform 
     contracting opportunities under one or more standard 
     industrial classification codes.
       (b) Determinations by Procuring Agency Regarding Applicable 
     Standard Industrial Classification Code.--The standard 
     industrial classification code assigned to a contracting 
     opportunity by the responsible contracting officer shall 
     apply, unless modified by the contracting officer after 
     considering additional information furnished by the 
     Administration or from other sources.
       (c) Effect of Responsibility Determinations.--The 
     Administration shall be bound by a determination of 
     responsibility by the agency contracting officer with respect 
     to a Program Participant being considered for award of a 
     contract pursuant to section 8(a) of the Small Business Act.
       (d) Conforming Amendment.--Section 8(a)(7) of the Small 
     Business Act (15 U.S.C. 637(a)(7)) (as amended by section 
     132(b)(2)) is amended to read as follows:
       ``(7) [Reserved].''.

     SEC. 135. USE OF CONTRACT SUPPORT LEVELS.

       Section 7(j)(10)(D) of the Small Business Act (15 U.S.C. 
     636(j)(10)(D)) is amended by adding at the end the following 
     new clause:
       ``(v) The forecasts of overall business activity contained 
     in the business plan of a Program Participant or the estimate 
     contained in the section 8(a) contract support level of such 
     firm shall not be used by the Administration to make a 
     determination that such firm is ineligible for the award of a 
     contract to be awarded pursuant to section 8(a).''.

     SEC. 136. BUSINESS MIX REQUIREMENTS.

       Section 7(j)(10) of the Small Business Act (15 U.S.C. 
     636(j)(10)) is amended--
       (1) in subparagraph (D)--
       (A) in clause (iii), by striking ``contracts awarded'' and 
     inserting ``contracts awarded noncompetitively''; and
       (B) in clause (iv)(I), by striking ``contracts awarded'' 
     and inserting ``contracts awarded noncompetitively''; and
       (2) in subparagraph (I)--
       (A) in clause (i)--
       (i) by striking ``for contracts awarded other than pursuant 
     to section 8(a)'' and inserting ``through contracts other 
     than contracts awarded noncompetitively pursuant to section 
     8(a)''; and
       (ii) by striking ``will engage a'' and inserting ``will 
     engage in a'';
       (B) in clause (iii)--
       (i) by redesignating subclauses (II) through (V) as 
     subclauses (III) through (VI), respectively;
       (ii) by striking subclause (I) and inserting the following:
       ``(I) establish business activity targets applicable to 
     Program Participants during each year of Program 
     participation, which reflect a consistent increase in new 
     contracts awarded other than pursuant to section 8(a), so 
     that not more than 20 percent of the dollar value of the 
     Program Participant's business base (as a percentage of total 
     sales) at the beginning of the ninth year of Program 
     participation is derived from contracts awarded pursuant to 
     section 8(a);
       ``(II) provide that the business activity targets 
     established pursuant to subclause (I) reflect that not more 
     than 50 percent of the dollar value of the new contracts 
     awarded during the fifth and succeeding years of Program 
     Participation be awarded pursuant to section 8(a) on a 
     noncompetitive basis;'';
       (iii) by striking subclause (IV), as redesignated, and 
     inserting the following:
       ``(IV) require that a Program Participant in the 
     transitional stage of Program participation certify 
     compliance with its business activity targets (or with any 
     program of remedial measures that may have been imposed 
     pursuant to subclause (VI) for failing to attain such 
     targets) to eligible for award of a contract pursuant to 
     section 8(a);'';
       (iv) in subclause (V), as redesignated, by striking ``and'' 
     at the end;
       (v) by striking subclause (VI), as redesignated, and 
     inserting the following:
       ``(VI) authorize the Administration to require a Program 
     Participant that has failed to attain a business activity 
     target to undertake a program of remedial measures designed 
     to assist the firm to reduce its dependence on contracts 
     awarded pursuant to section 8(a); and''; and
       (vi) by adding at the end the following new subclause:
       ``(VII) authorize the Administration to limit the dollar 
     volume of contracts awarded to the Program Participant 
     pursuant to section 8(a), especially those awarded 
     noncompetitively, if the firm has not made substantial 
     progress toward attaining its business activity targets.''; 
     and
       (C) by adding at the end the following new clause:
       ``(iv) Actions by the Administration relating to enforcing 
     compliance with business activity targets shall not be 
     reviewable pursuant to section 8(a)(19), unless such action 
     is a termination from further Program participation.''.

     SEC. 137. ENCOURAGING SELF-MARKETING.

       (a) Elimination of Regulatory Limitations.--In accordance 
     with the schedule for the issuance of revised regulations 
     contained in section 601(a), the Administration shall 
     promulgate such regulations as may be necessary to eliminate 
     regulatory limitations on self-marketing by Program 
     Participants, including limitations relating to so-called 
     ``National Buys'' and ``Local Buys''.
       (b) Conforming Amendment.--Section 8(a)(11) of the Small 
     Business Act (15 U.S.C. 637(a)(11)) is amended to read as 
     follows:
       ``(11) [Reserved].''.

     SEC. 138. BUNDLING OF CONTRACTOR CAPABILITIES.

       (a) In General.--Section 8(a)(14) of the Small Business Act 
     (15 U.S.C. 637(a)(14)) is amended to read as follows:
       ``(14)(A) Except as provided in subparagraph (B), a 
     contract shall not be awarded pursuant to this subsection 
     unless the small business concern complies with the 
     requirements of section 15(o).
       ``(B)(i) Whenever the Administration determines that a 
     proposed contract opportunity represents a bundling of 
     contract requirements as defined by section 3(n), a Program 
     Participant may propose a team of subcontractors meeting the 
     requirements of clause (ii) without regard to the 
     requirements of section 15(o) or regulations of the 
     Administration regarding findings of affiliation or control, 
     either direct or indirect.
       ``(ii) The subcontracting team proposed by a Program 
     Participant may include--
       ``(I) other Program Participants;
       ``(II) other small business concerns;
       ``(III) business concerns other than small business 
     concerns, whose aggregate participation may not represent 
     more than 25 percent of the anticipated total value of the 
     contract; and
       ``(IV) historically black colleges and universities and 
     other minority institutions.''.
       (b) Definition.--Section 3 of the Small Business Act (15 
     U.S.C. 632) is amended by adding at the end the following new 
     subsection:
       ``(n) Contract Bundling.--For purposes of contracting 
     opportunities subject to sections 8(a) and 15, the terms 
     `contract bundling' and `bundling of contract requirements' 
     mean the practice of consolidating two or more procurement 
     requirements of the type that were previously solicited and 
     awarded as separate smaller contracts into a single large 
     contract solicitation likely to be unsuitable for award to a 
     small business concern due to--
       ``(1) the diversity and size of the elements of performance 
     specified;
       ``(2) the aggregate dollar value of the anticipated award;
       ``(3) the geographical dispersion of the contract 
     performance sites; or
       ``(4) any combination of the factors described in 
     paragraphs (1), (2), and (3).''.
       (c) Conforming Amendment.--Section 15(a) of the Small 
     Business Act (15 U.S.C. 644(a)) is amended by striking ``If a 
     proposed procurement'' and all that follows through ``prime 
     contract participation unlikely,'' and inserting the 
     following: ``If a proposed procurement represents a bundling 
     of contract requirements, as defined in section 3(n),''.

                  PART E--TRIBALLY OWNED CORPORATIONS

     SEC. 141. MANAGEMENT AND CONTROL OF BUSINESS OPERATIONS.

       Section 8(a)(4)(B)(ii) of the Small Business Act (15 U.S.C. 
     637(a)(4)(B)(ii)) is amended to read as follows:
       ``(ii) in the case of a tribally owned corporation, an 
     individual designated by the Indian tribe (or the board of 
     directors of a wholly owned entity of such tribe), who shall 
     be a Native American if such individual is available; or''.

     SEC. 142. JOINT VENTURES.

       (a) In General.--Section 8(a)(15) of the Small Business Act 
     (15 U.S.C. 637(a)(15)) is amended to read as follows:
       ``(15)(A) Except as provided in subparagraph (B), a 
     contract may be awarded pursuant to this subsection to a 
     joint venture owned and controlled by a Program Participant, 
     notwithstanding the size status of such joint venture, if the 
     Program Participant--
       ``(i) is owned and controlled by an Indian tribe;
       ``(ii) owns at least 51 percent of the joint venture;
       ``(iii) is located and performs most of its activities on 
     the reservation of such Indian tribe; and
       ``(iv) employs members of such tribe for at least 50 
     percent of the work force of such joint venture.
       ``(B) A contract may not be awarded to a joint venture 
     pursuant to subparagraph (A) if an Indian tribe owns and 
     controls one or more Program Participants who are currently 
     joint venturers on more than 5 contracts awarded pursuant to 
     subparagraph (A).''.
       (b) Definitions.--
       (1) Indian tribe.--Section 3 of the Small Business Act (15 
     U.S.C. 632) (as amended by section 139(b)) is amended by 
     adding at the end the following new subsection:
       ``(o) Indian Tribe.--For purposes of this Act, the term 
     `Indian tribe' means an Indian tribe, band, nation, or other 
     organized group or community of Indians, including any Alaska 
     Native village or regional or village corporation (as defined 
     in section 3 of the Alaska Native Claims Settlement Act 
     that--
       ``(1) is recognized as eligible for the special programs 
     and services provided by the United States to Indians because 
     of their status as Indians; or
       ``(2) is recognized as such by the State in which such 
     tribe, band, nation, group, or community resides.''.
       (2) Native hawaiian organization.--Section 3 of the Small 
     Business Act (15 U.S.C. 632) (as amended by paragraph (1)) is 
     amended by adding at the end the following new subsection:
       ``(p) Native Hawaiian Organization.--For purposes of this 
     Act, the term `Native Hawaiian organization' means a 
     community service organization serving Native Hawaiians in 
     the State of Hawaii that is--
       ``(1) a not-for-profit organization chartered by the State 
     of Hawaii;
       ``(2) controlled by Native Hawaiians; and
       ``(3) engaged in business activities that will principally 
     benefit such Native Hawaiians.''.
       (3) Conforming amendment.--Section 8(a)(13) of the Small 
     Business Act (15 U.S.C. 637(a)(13)) is amended to read as 
     follows:
       ``(13) [Reserved].''.

     SEC. 143. RULE OF CONSTRUCTION REGARDING THE BUY INDIAN ACT.

       A contract awarded pursuant to section 8(a) of the Small 
     Business Act to a small business concern owned and controlled 
     by members of an Indian tribe (or a wholly owned business 
     entity of such tribe) shall be considered to be in compliance 
     with section 23 of the Act of June 25, 1910 (25 U.S.C. 47).

                PART F--CONTRACT ADMINISTRATION MATTERS

     SEC. 151. ACCELERATED PAYMENT.

       Section 8(a)(1) of the Small Business Act (15 U.S.C. 
     637(a)(1)) is amended by adding at the end the following new 
     subparagraph:
       ``(E)(i) Any contract awarded pursuant to subparagraph (B) 
     to a Program Participant in the developmental stage of the 
     Program shall include a payment term requiring payment of any 
     invoice, progress payment request, or other authorized 
     request for payment, not later than 20 days after receipt of 
     a proper invoice or other form of payment request.''.

     SEC. 152. EXPEDITED RESOLUTION OF CONTRACT ADMINISTRATION 
                   MATTERS.

       Section 8(a)(1)(E) of the Small Business Act (15 U.S.C. 
     637(a)(1)(E)) (as added by section 151) is amended by adding 
     at the end the following new clause:
       ``(ii)(I) A Federal agency awarding a contract under this 
     subsection shall make every reasonable effort to respond in 
     writing to any written request made to a contracting officer 
     with respect to a matter relating to the administration of 
     such contract, not later than 15 days such request.
       ``(II) If the contracting officer is unable to reply before 
     the expiration of the 15-day period described in subclause 
     (I), the contracting officer shall transmit to the contractor 
     within such period a written notification of a specific date 
     by which the contracting officer expects to respond.
       ``(III) The provisions of this subparagraph do not apply to 
     a request for a contracting officer's decision under the 
     Contract Disputes Act of 1978 nor create any new rights 
     pursuant to such Act.''.

     SEC. 153. AVAILABILITY OF ALTERNATIVE DISPUTE RESOLUTION.

       Section 8(a)(1)(E) of the Small Business Act (15 U.S.C. 
     637(a)(1)(E)) (as amended by sections 151 and 152) is amended 
     by adding at the end the following new clause:
       ``(iii)(I) Except as provided in subclause (II), an agency 
     awarding a contract pursuant to subparagraph (B) shall make 
     available, upon the request of a Program Participant, an 
     alternative means of dispute resolution pursuant to 
     subchapter IV of chapter 5, of title 5, United States Code.
       ``(II) In carrying out this clause, the agency need not 
     provide an alternative dispute resolution procedure if the 
     agency makes a written determination, supported by specific 
     findings, citing one or more of the conditions in section 
     572(b) of title 5, United States Code, or such other specific 
     reasons, that alternative dispute resolution procedures are 
     inappropriate for the resolution of the dispute for which 
     such procedures were sought under the contract.''.

                     PART G--PROGRAM ADMINISTRATION

     SEC. 161. SIMPLIFICATION OF ANNUAL REPORT TO CONGRESS.

       Section 7(j)(16)(B)(v) of the Small Business Act (15 U.S.C. 
     636(j)(16)(B)(v)) is amended to read as follows:
       ``(v) The total dollar value of receipts received during 
     the most recently completed program year from contracts 
     awarded pursuant to section 8(a), and such amount expressed 
     as a percentage of the total sales of--
       ``(I) all firms participating in the Program during the 
     preceding fiscal year; and
       ``(II) firms in each of the 9 years of Program 
     participation.''.

     SEC. 162. REDUCTION IN REPORTING BY PROGRAM PARTICIPANTS.

       Section 8(a)(20)(A) of the Small Business Act (15 U.S.C. 
     637(a)(20)(A)) is amended by striking ``semiannually report'' 
     and inserting ``report, not less often than annually,''.
   TITLE II--CONTRACTING PROGRAM FOR CERTAIN SMALL BUSINESS CONCERNS

                   PART A--CIVILIAN AGENCIES PROGRAM

     SEC. 201. PROCUREMENT PROCEDURES.

       Section 8(c) of the Small Business Act (15 U.S.C. 637(c)) 
     is amended to read as follows:
       ``(c) Procurement Procedures.--
       ``(1) In general.--For the purpose of attaining an agency's 
     goal for the participation of small business concerns owned 
     and controlled by socially and economically disadvantaged 
     individuals pursuant to section 15(g)(1), the head of a 
     participating executive agency may enter into contracts 
     using--
       ``(A) less than full and open competition, by restricting 
     the competition for such awards to small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals as defined in subsection (d)(3)(C); 
     and
       ``(B) a price evaluation preference, of not to exceed 10 
     percent, when evaluating an offer received from such a small 
     business concern as the result of an unrestricted 
     solicitation.
       ``(2) Definition.--For the purposes of this subsection, the 
     term `participating executive agency' means a Federal agency, 
     as defined in section 3(b), in the executive branch of the 
     Federal Government, other than the Department of Defense.''.

     SEC. 202. IMPLEMENTATION THROUGH THE FEDERAL ACQUISITION 
                   REGULATION.

       (a) In General.--The Federal Acquisition Regulation shall 
     be amended to provide uniform implementation by each 
     executive agency choosing to participate in the program 
     authorized in section 8(c) of the Small Business Act (as 
     amended by section 201).
       (b) Matters To Be Addressed.--The provisions of the Federal 
     Acquisition Regulation prescribed pursuant to subsection (a) 
     shall include--
       (1) conditions for the use of advance payments;
       (2) provisions for contract payment terms that provide 
     for--
       (A) accelerated payment for work performed during the 
     period for contract performance; and
       (B) full payment for work performed;
       (3) guidance on how contracting officers may use, in 
     solicitations for various classes of products or services, a 
     price evaluation preference pursuant to section 8(c)(1)(B) of 
     the Small Business Act (as amended by section 201) to provide 
     a reasonable advantage to small business concerns owned and 
     controlled by socially and economically disadvantaged 
     individuals without effectively eliminating any participation 
     of other small business concerns; and
       (4)(A) procedures for a person to request the head of a 
     Federal agency to determine whether the use of competitions 
     restricted to small business concerns owned and controlled by 
     socially and economically disadvantaged individuals at a 
     contracting activity of such agency has caused a particular 
     industry category to bear a disproportionate share of the 
     contracts awarded to attain the goal established for that 
     contracting activity; and
       (B) guidance for limiting the use of such restricted 
     competitions in the case of any contracting activity and 
     class of contracts determined in accordance with such 
     procedures to have caused a particular industry category to 
     bear a disproportionate share of the contracts awarded to 
     attain the goal established for that contracting activity.

     SEC. 203. SUNSET.

       The amendments made by section 201 shall cease to be 
     effective on October 1, 2000.

          PART B--ELIGIBILITY DETERMINATIONS REGARDING STATUS

     SEC. 211. IMPROVED STATUS PROTEST SYSTEM.

       Section 7(j)(10)(J) of the Small Business Act (15 U.S.C. 
     636(j)(10)(J)) is amended by striking clause (ii) and 
     inserting the following new clauses:
       ``(ii) A protest may be brought regarding a self-
     certification by a business concern regarding its status as a 
     small business concern owned and controlled by socially and 
     economically disadvantaged individuals by--
       ``(I) another person with a direct economic interest in the 
     award of the contract or subcontract under which such 
     business has allegedly made the false certification regarding 
     its status as a small business concern owned and controlled 
     by socially and economically disadvantaged individuals;
       ``(II) a prime contractor receiving specific and credible 
     information that an actual or prospective subcontractor or 
     supplier has falsely certified its status as a small business 
     concern owned and controlled by socially and economically 
     disadvantaged individuals;
       ``(III) a contracting officer receiving a self-
     certification regarding an actual or prospective contractor's 
     status, which such officer reasonably believes to be false; 
     or
       ``(IV) the Associate Deputy Administrator for Minority 
     Enterprise Development and Government Contracting of the 
     Small Business Administration (or any successor position).
       ``(iii) The Office of Hearings and Appeals shall hear 
     appeals regarding the status of a concern as a small business 
     concern owned and controlled by socially and economically 
     disadvantaged individuals for purposes of any program or 
     activity conducted under section 8(d) or any other Federal 
     law that refers to such section for a definition of program 
     eligibility.
       ``(iv) A decision issued pursuant to clause (iii) shall--
       ``(I) be made available to all parties to the proceeding;
       ``(II) be published in full text; and
       ``(III) include findings of fact and conclusions of law, 
     with specific reasons supporting such findings and 
     conclusions, on each material issue of fact and law of 
     decisional significance regarding the disposition of the 
     protest.
       ``(v) A decision issued pursuant to clause (iii) shall be 
     considered a final agency action, and shall be subject to 
     judicial review under section 553 of title 5, United States 
     Code.
       ``(vi) If a firm engages in a pattern of misrepresentations 
     regarding the status of the firm in violation of section 
     16(d)(1), the Administration or the aggrieved executive 
     agency shall initiate an action to impose an appropriate 
     penalty under section 16(d)(2).''.

     SEC. 212. CONFORMING AMENDMENT.

       Section 7(j)(11)(F) of the Small Business Act (15 U.S.C. 
     636(j)(11)(F)) is amended by--
       (1) striking clause (vii); and
       (2) redesignating clause (viii) as clause (vii).
           TITLE III--EXPANDING SUBCONTRACTING OPPORTUNITIES

     SEC. 301. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING 
                   CONTRACTS.

       Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
     is amended--
       (1) in paragraph (4), by striking subparagraphs (A) through 
     (D) and inserting the following:
       ``(4)(A) Each solicitation for the award of a contract (or 
     subcontract) with an anticipated value of $1,000,000, in the 
     case of a contract for construction (including repair, 
     alteration, or demolition of existing construction) or 
     $500,000, in the case of a contract for all other types of 
     services or supplies, that can reasonably be expected to 
     offer opportunities for subcontracting, shall--
       ``(i) in the case of a Federal contract to be competitively 
     awarded, include solicitation provisions described in 
     subparagraph (B);
       ``(ii) in the case of a Federal contract to be 
     noncompetitively awarded, require submission and acceptance 
     of a subcontracting plan pursuant to subparagraph (C); and
       ``(iii) in the case of a subcontract award, require 
     submission and acceptance of a subcontracting plan pursuant 
     to subparagraph (D).
       ``(B) With respect to subcontract participation by small 
     business concerns and small business concerns owned and 
     controlled by socially and economically disadvantaged 
     individuals, the solicitation shall--
       ``(i) specify minimum percentages for subcontract 
     participation for an offer to be considered responsive 
     whenever practicable;
       ``(ii) assign a weight of not less than the numerical 
     equivalent of 5 percent of the total of all evaluation 
     factors to a contract award evaluation factor that recognizes 
     incrementally higher subcontract participation rates in 
     excess of the minimum percentages;
       ``(iii) require the successful offeror to submit a 
     subcontracting plan that incorporates the information 
     described in paragraph (6); and
       ``(iv) assign a significant weight in any evaluation of 
     past performance by the offerors in attaining subcontract 
     participation goals.
       ``(C)(i) Each small business concern apparent successful 
     offeror shall negotiate--
       ``(I) a goal for the participation of small business 
     concerns and for the participation of small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals; and
       ``(II) a plan for the attainment of the goals that 
     incorporates the information prescribed in paragraph (6).
       ``(ii) The goals and plan shall reflect the maximum 
     practicable opportunity for participation of small business 
     concerns in the performance of the contract, considering the 
     matters described in subparagraph (F)(iii). If, within the 
     time limits prescribed in the Federal acquisition 
     regulations, the apparent successful offeror fails to 
     negotiate such a subcontracting plan, such offeror shall be 
     ineligible for contract award.
       ``(D) An apparent subcontract awardee shall negotiate with 
     the prime contractor (or higher-tier subcontractor) a goal 
     for the participation of small business concerns and for the 
     participation of small business concerns owned and controlled 
     by socially and economically disadvantaged individuals, and a 
     plan for the attainment of those goals which incorporates the 
     information prescribed in paragraph (6). Such goals and plan 
     shall reflect the maximum practicable opportunity for 
     participation of such small business concerns in the 
     performance of the contract, considering the matters 
     described in subparagraph (F)(iii).'';
       (2) by striking paragraph (5) and inserting the following:
       ``(5) [Reserved].''; and
       (3) in paragraph (6)--
       (A) by redesignating subparagraphs (B) through (F) as 
     subparagraphs (C) through (G), respectively; and
       (B) by inserting the following new subparagraph (B):
       ``(B)(i) a listing of the small business subcontractors 
     (including suppliers) who have actual or contingent awards 
     for participation in the performance of the contract, 
     identifying the work to be performed and the anticipated 
     award value of the subcontracts; and
       ``(ii) assurances that the of small business subcontractors 
     described in clause (i) will be regularly revised to identify 
     firms that have been removed from or substituted for 
     previously listed firms, and annotated to reflect the reasons 
     for any removal or substitution;''.

     SEC. 302. SUBCONTRACTING GOALS FOR CERTAIN SMALL BUSINESS 
                   CONCERNS.

       Section 8(d)(7) of the Small Business Act (15 U.S.C. 
     637(d)(7)) is amended to read as follows:
       ``(7)(A) Except as provided in subparagraph (B), paragraphs 
     (4), (5), and (6) shall not apply to offerors who are small 
     business concerns.
       ``(B) A small business concern owned and controlled by 
     socially and economically disadvantaged individuals shall be 
     required to negotiate a subcontracting plan for the use of 
     emerging small business concerns owned and controlled by 
     socially and economically disadvantaged individuals, if--
       ``(i) the prime contract was awarded pursuant to--
       ``(I) subsection (a) or (c) of section 8;
       ``(II) section 2323 of title 10, United States Code; or
       ``(III) any law that authorizes the award of a Federal 
     contract as the result of a competition restricted to small 
     business concerns owned and controlled by socially and 
     economically disadvantaged individuals as defined in section 
     8(d)(3)(C);
       ``(ii) the anticipated total value of the contract exceeds 
     $20,000,000; and
       ``(iii) subcontracting opportunities are expected.''.

     SEC. 303. SMALL BUSINESS PARTICIPATION GOALS.

       Section 15(g)(1) of the Small Business Act (15 U.S.C. 
     644(g)(1)) is amended by striking ``20 percent'' and 
     inserting ``25 percent''.

     SEC. 304. IMPROVED NOTICE OF SUBCONTRACTING OPPORTUNITIES.

       (a) Use of the Commerce Business Daily Authorized.--Section 
     8 of the Small Business Act (15 U.S.C. 637) is amended by 
     adding at the end the following new subsection:
       ``(k) Notices of Subcontracting Opportunities.--
       ``(1) In general.--Notices of subcontracting opportunities 
     may be submitted for publication in the Commerce Business 
     Daily by--
       ``(A) a business concern awarded a contract by an executive 
     agency subject to subsection (e)(1)(C); and
       ``(B) a business concern which is a subcontractor or 
     supplier (at any tier) to a contractor required to have a 
     subcontracting plan pursuant to subsection (d) having a 
     subcontracting opportunity in excess of $100,000.
       ``(2) Contents of notice.--The notice of a subcontracting 
     opportunity shall include--
       ``(A) a description of the business opportunity that is 
     comparable to the description specified in paragraphs (1), 
     (2), (3), and (4) of subsection (f); and
       ``(B) the due date for the receipt of offers.''.
       (b) Regulations Required.--The Federal Acquisition 
     Regulation shall be amended to provide uniform implementation 
     of the amendments made by this section.
       (c) Conforming Amendment.--Section 8(e)(1)(C) of the Small 
     Business Act (15 U.S.C. 637(e)(1)(C)) is amended by striking 
     ``$25,000'' each place it appears and inserting ``$100,000''.
               TITLE IV--REPEALS AND TECHNICAL AMENDMENTS

                            PART A--REPEALS

     SEC. 401. LOAN PROGRAM SUPERSEDED BY SECTION 7(a) LOAN 
                   PROGRAM.

       (a) In General.--Section 7(i) of the Small Business Act (15 
     U.S.C. 636(i)) is amended to read as follows:
       ``(i) [Reserved].''.
       (b) Conforming Amendments.--The Small Business Act (15 
     U.S.C. 601 et seq.) is amended--
       (1) in section 2(d)(1), by striking ``sections 7(i) and 
     7(j)'' and inserting ``section 7(j)'';
       (2) in section 4(c)(2), by striking ``7(i),'';
       (3) in section 5(e)(3), by striking ``sections 7(a)(4)(C) 
     and 7(i)(1)'' and inserting ``section 7(a)(4)(C)'';
       (4) in section 7(j), by striking ``sections 7(i), 7(j)(10), 
     and 8(a)'' each place it appears and inserting ``paragraph 
     (10) and section 8(a)''; and
       (5) in section 7(k), by striking ``sections 7(i), 7(j)(10), 
     and 8(a)'' and inserting ``subsection (j)(10) and section 
     8(a)''.

     SEC. 402. SUPERSEDED LOAN PROGRAM RELATING TO ENERGY.

       (a) In General.--Section 7(l) of the Small Business Act (15 
     U.S.C. 636(l)) is amended to read as follows:
       ``(l) [Reserved].''.
       (b) Conforming Amendments.--Section 4(c)(2) of the Small 
     Business Act (15 U.S.C. 601 et seq.) is amended by striking 
     ``7(l),''.

     SEC. 403. EMPLOYEE TRAINING PROGRAM OF LIMITED SCOPE.

       Section 15(j)(13)(E) of the Small Business Act (15 U.S.C. 
     644(j)(13)(E)) is amended to read as follows:
       ``(E) [Reserved].''.

     SEC. 404. EXPIRED PROVISION.

       Section 8(a)(2) of the Small Business Act (15 U.S.C. 
     637(a)(2)) is amended to read as follows:
       ``(2) [Reserved].''.

     SEC. 405. EXPIRED DIRECTION TO THE ADMINISTRATION.

       Section 303(f) of the Business Opportunity Development 
     Reform Act of 1988 (15 U.S.C. 637 note) is repealed.

                      PART B--TECHNICAL AMENDMENTS

     SEC. 411. TECHNICAL AMENDMENTS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) in section 8(d)(10)(C) (15 U.S.C. 637(d)(10)(C)), by 
     striking ``in the case contractors'' and inserting ``in the 
     case of contractors'';
       (2) in section 10--
       (A) in subsection (a), by striking ``the Senate Select 
     Committee on Small Business''; and
       (B) in subsection (b), by striking ``to the Senate Select 
     Committee on Small Business, and to the Committee on Small 
     Business of the House of Representatives'' and inserting ``to 
     the Committees on Small Business of the Senate and House of 
     Representatives''; and
       (3) in section 15(g)(1)--
       (A) in the first sentence, by striking ``The President'' 
     and inserting ``(A) The President'';
       (B) by striking the second and third sentences and 
     inserting the following:
       ``(B) The Governmentwide goals established pursuant to 
     subparagraph (A) shall be--
       ``(i) for small business concerns, 20 percent of the total 
     prime contracts for the fiscal year; and
       ``(ii) for small business concerns owned and controlled by 
     socially and economically disadvantaged individuals, 8 
     percent of the total value of all prime contracts and 
     subcontracts for the fiscal year.'';
       (C) in the fourth sentence, by striking ``Notwithstanding 
     the Government-wide goal'' and inserting the following:
       ``(C) Notwithstanding the Governmentwide goal''; and
       (D) in the fifth sentence, by striking ``The 
     Administration'' and inserting the following:
       ``(D) The Administration''.
                          TITLE V--DEFINITIONS

     SEC. 501. HISTORICALLY UNDERUTILIZED BUSINESSES.

       (a) Definition.--Section 8(a)(4)(A) of the Small Business 
     Act (15 U.S.C. 637(a)(4)(A)) is amended by striking 
     ``socially and economically disadvantaged small business 
     concern'' and inserting ``historically underutilized 
     business''.
       (b) Technical Amendment.--Section 9(j)(2)(F) of the Small 
     Business Act (15 U.S.C. 638(j)(2)(F)) is amended by striking 
     ``socially and economically disadvantaged small business 
     concerns, as defined in section 8(a)(A)'' and inserting 
     ``small business concerns owned and controlled by socially 
     and economically disadvantaged individuals''.

     SEC. 502. EMERGING SMALL BUSINESS CONCERN.

       (a) In General.--Section 3 of the Small Business Act (15 
     U.S.C. 631) is amended by adding at the end the following new 
     subsection:
       ``(q) Emerging Small Business Concern.--For purposes of 
     sections 8 and 15, the term `emerging small business concern' 
     means a small business concern the size of which is less than 
     or equal to 25 percent of the numerical size standard for--
       ``(1) in the case of a contracting opportunity being 
     awarded by the Government, the standard industrial 
     classification code assigned by a contracting officer; or
       ``(2) in all other cases, the standard industrial 
     classification that encompasses the principal line of 
     business of the business concern.''.
       (b) Delayed Applicability to the Small Business 
     Competitiveness Demonstration Program.--For the purposes of 
     the Small Business Competitiveness Demonstration Program, the 
     amendment made by subsection (a) shall not supersede the 
     definition of ``emerging small business concern'' provided in 
     section 718(b) of the Small Business Competitiveness 
     Demonstration Program Act of 1988.
        TITLE VI--REGULATORY IMPLEMENTATION AND EFFECTIVE DATES

           PART A--ASSURING TIMELY REGULATORY IMPLEMENTATION

     SEC. 601. DEADLINES FOR ISSUANCE OF REGULATIONS.

       (a) Proposed Regulations.--Proposed amendments to the 
     Federal Acquisition Regulation or proposed Small Business 
     Administration regulations shall be published not later than 
     120 days after the date of enactment of this Act for the 
     purpose of obtaining public comment pursuant to either 
     section 22 of the Office of Federal Procurement Policy Act or 
     chapter 5 of title 5, United States Code, as appropriate. The 
     public shall be afforded not less than 60 days to submit 
     comments.
       (b) Final Regulations.--Final regulations shall be 
     published and become effective not later than 270 days after 
     the date of enactment of this Act.

     SEC. 602. REGULATORY IMPLEMENTATION OF PRIOR LEGISLATION.

       (a) Proposed Regulations.--Proposed amendments to the 
     Federal Acquisition Regulation or the Small Business 
     Administration regulations pertaining to the statutory 
     provisions listed in subsection (c) shall be published not 
     later than 30 days after the date of enactment of this Act 
     for the purpose of obtaining public comment pursuant to 
     either section 22 of the Office of Federal Procurement Policy 
     Act or chapter 5 of title 5, United States Code, as 
     appropriate. The public shall be afforded not less than 60 
     days to submit comments.
       (b) Final Regulations.--Final regulations implementing the 
     amendments made by this Act shall be published and shall take 
     effect not later than 120 days after the date of enactment of 
     this Act.
       (c) Delayed Regulations.--
       (1) Section 203 of the Small Business Administration 
     Reauthorization and Amendments Act of 1990 (15 U.S.C. 637 
     note; 104 Stat. 2818).
       (2) Section 221 of the Small Business Credit and Business 
     Opportunity Enhancement Act of 1992 (15 U.S.C. 636 note; 106 
     Stat. 999).
       (3) Section 222 of the Small Business Credit and Business 
     Opportunity Enhancement Act of 1992 (15 U.S.C. 632 note; 106 
     Stat. 999).

                        PART B--EFFECTIVE DATES

     SEC. 611. EFFECTIVE DATES.

       (a) Effective Date of Act.--Except as provided in 
     subsection (b), this Act shall take effect on the date of the 
     enactment of this Act.
       (b) Amendments Requiring Implementing Regulations.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this Act which require the issuance of 
     regulations shall take effect on the date on which final 
     implementing regulations are prescribed in accordance with 
     section 601.
       (2) Exceptions.--The amendments made by sections 101, 102, 
     111, 112, 114, 115, 122, 133, 134, 135, 136, 138, 141, 142, 
     143, 161, 162, and 211 shall take effect on the date of 
     enactment of this Act.
                                  ____


      Summary of the Business Development Opportunity Act of 1994

       The ``Business Development Opportunity Act of 1994'', being 
     sponsored by Senator John Kerry of Massachusetts, is aimed at 
     fostering the growth of small businesses owned and controlled 
     by socially and economically disadvantaged individuals, 
     commonly referred to as small disadvantaged businesses 
     (SDBs).
       The bill would--
       establish a Minority Enterprise Development (MED) Program, 
     a new three-phase program to replace the Small Business 
     Administration's (SBA's) existing Minority Small Business and 
     Capital Ownership Development Program (commonly referred to 
     as the 8(a) Program from that section of the Small Business 
     Act which provides special contracting authority), 
     implementing SBA's MED Program proposal of June 1994--
       providing tailored business development assistance, for the 
     complete range of firms from new ``start-ups'' to on-going 
     businesses, to improve substantially their prospects for 
     long-term success after graduation;
       providing coordinated business development assistance by 
     applying the resources of all available SBA programs as well 
     as those other Federal agencies and SBA's private sector 
     resource partners;
       reducing the costly paperwork burdens on Program 
     Participants by eliminating ``non-value added'' oversight and 
     monitoring;
       eliminating the second-guessing of business decisions made 
     by Program Participants and by contracting officers at 
     Federal agencies offering contracting opportunities to 
     Program Participants;
       correcting provisions of Public Law 100-656, the ``Business 
     Opportunity Development Reform Act of 1988'', which have led 
     to implementation contrary to Congressional intent; and
       implementing recommendations of the September 1992 Final 
     Report of the Commission on Minority Business Development;
       advance the attainment of the existing Government-wide goal 
     for the participation of SDBs in Federal contracting 
     opportunities as prime contractors as well as subcontractors 
     and suppliers, by--
       extending to the civilian agencies of the Federal 
     Government the procurement tools available to DOD since 1988 
     (under the Section 1207 Program, which was reauthorized in 
     1992 through September 30, 2000);
       harnessing the intense competition for the award of major 
     contracts to foster increased SDB subcontract participation 
     by making the use of SDBs as subcontractors and suppliers a 
     very important consideration in the solicitation and award 
     process for prime contracts; and
       improving access to information about subcontracting 
     opportunities.
       Some specific changes that the ``Business Development 
     Opportunity Act of 1994'' would make to the SBA's MED 
     Program, include:


                           Program Admission

       eliminating the duplicative regional review of applications 
     to help expedite the chronically slow Program application 
     process;
       forcing full implementation of the statutory waiver enacted 
     in 1990 to SBA's rule that a Program applicant must be in 
     business for two years prior to making application (Two-Year 
     Rule);
       requiring that an applicant denied admission into the 
     Program be furnished specific reasons and be given an 
     opportunity to respond;
       requiring SBA to develop an action plan to improve the 
     geographic distribution of firms participating in the Program 
     and the award of 8(a) contracts;


                Improved Business Development Assistance

       establishing a pilot Developmental Teaming Program to 
     encourage Program graduates to enter into SBA-approved 
     mentoring relationships with current Program Participants to 
     furnish them practical business development training and to 
     team with them as subcontractors on 8(a) contracts;
       focusing the 7(j) Management Assistance Program on core 
     business development skills, such as marketing and proposal 
     development, and making it available exclusively to Program 
     Participants;


            Improving Access to Equity for Program Graduates

       encouraging SBA to use the waiver authority enacted in 1988 
     allowing a Program graduate to sell a non-controlling equity 
     share of the firm without losing the right to continue 
     performance of contracts won while in the Program;
       providing a Program Participant a right to sell an equity 
     interest in the firm so long as 51% ownership and control are 
     maintained;


                 Contract Award and Eligibility Matters

       accelerating the 8(a) contract award process by allowing 
     the Federal agency offering a 8(a) contract opportunity to 
     make award directly to the Program Participant (but requires 
     SBA to assist a Program Participant requesting help during 
     contract negotiations or contract performance);
       eliminating the requirement to obtain advance approval from 
     SBA regarding SIC codes used by a Program Participant;
       prohibiting a Program Participant's forecast of its 
     anticipated 8(a) contract awards (contract support level) 
     from being used as a bar to the award of an 8(a) contract won 
     competitively or through self-marketing;
       strengthening business-mix provisions of P.L. 100-656 to 
     encourage Program Participants to steadily diminish their 
     dependence on 8(a) contracts as the firms approach Program 
     graduation;
       correcting a provision of P.L. 100-656 which did not permit 
     a Program Participant to count competitively won 8(a) 
     contracts towards attaining its competitive business-mix 
     requirements;
       authorizing a Program Participant to ``bundle'' the 
     capabilities of a team of subcontractors so as to more 
     effectively compete for the large, complex, and diverse 
     ``bundled'' contract opportunities that are becoming more 
     common, by allowing SBA to waive certain limitations, 
     including level of subcontracting;


                  contract administration improvements

       requiring expedited Government payment of invoices and 
     progress payment requests under 8(a) contracts;
       requiring expedited Government responses to questions 
     arising during the performance of 8(a) contracts;
       making available Alternative Disputes Resolution (ADR) 
     techniques for disputes and claims arising under 8(a) 
     contracts; and


                reducing reporting and paperwork burdens

       reducing reporting burdens on Program Participants.
       Other provisions of the ``Business Development Opportunity 
     Act of 1994'' are aimed at--


                     maintaining program integrity

       deterring ``front'' companies from self-certifying as SDBs 
     by improving SBA's administration of the Government-wide 
     ``status'' protest system and encouraging the use of 
     available administrative as well as criminal remedies for 
     those individuals or firms found to be engaged in a pattern 
     of misrepresentation;


   increasing the Federal Contract Participation of Small Businesses 
                               Generally

       making the evaluation of subcontract participation in the 
     awarding of major prime contracts, apply to subcontracting 
     with all small business concerns; and
       increasing the Government-wide goal for participation of 
     small business concerns generally in Federal contracting, 
     from 20% to 25%.
                                  ____


Section-by-Section Analysis of the Business Development Opportunity Act 
                                of 1994

       Sec. 1. Short Title.
       This section establishes the bill's citation as the 
     ``Business Development Opportunity Act of 1994''.
       Sec. 2. Table of Contents.
       This section sets forth the headings of the bill's various 
     sections in the form of a Table of Contents.


    title i--amendments to the minority small business and capital 
                     ownership development program

        Part A--Program Organization and Participation Standards

       Sec. 101. Modification of Program Title.
       This section would change the name of the program from the 
     Minority Small Business and Capital Ownership Development 
     (MSB/COD) Program to the new title of the ``Minority 
     Enterprise Development'' (MED) Program, as recommended by the 
     Small Business Administration. In adopting a new program 
     title that more aptly and succinctly describes the Program's 
     actual objectives, it is expected to facilitate the renewed 
     effort to successfully implement a coordinated business 
     development program and to encourage the common use of a term 
     other than the ``8(a) Program'', which suffers from almost 
     universally negative perceptions within the general public 
     emphasizing the unregulated use of non-competitive or ``sole-
     source'' contracting and other abuses. Adoption of the new 
     program name, the MED Program, is designed to send a clear 
     message that this legislation, as well as SBA's 
     ``reinvention'' initiatives, are determined to reshape the 
     program into one that will provide effective business 
     development assistance to Program Participants, which 
     will provide a firm foundation for long-term business 
     success after Program graduation, enhancing their 
     prospects for success at least to the level of small 
     business concerns that are owned and controlled by 
     individuals who are other than socially and economically 
     disadvantaged individuals.
       Sec. 102. Consolidation of Eligibility Review Function.
       This section would eliminate the review of Program 
     applications at the regional level, one of the three levels 
     of review through which a Program application must presently 
     pass. GAO has found that the eligibility review conducted at 
     the Regional Office level is essentially repeated when the 
     application reaches the SBA Central Office. Under the 
     provisions of the amendment, the substantive evaluation of 
     Program applications would be made only once at a single 
     centralization location either located at (or reporting to) 
     the SBA Central Office by personnel focused on Program 
     applications. The amendment would leave unchanged: (a) 
     convenient access to advice concerning the Program, including 
     the application process at the local SBA District Office; and 
     (b) the District Office's responsibility to initially review 
     a Program application for completeness and suitability for 
     eligibility review within 15 days of submission.
       Sec. 103. Clarification of Various Eligibility Criteria.
       Subsection (a) eliminates the paperwork burdens associated 
     with an Indian Tribe having to furnish data to prove its 
     status as ``economically disadvantaged'' so that a tribally-
     owned business may be admitted to the Program. No business 
     concern of a tribal Government has been declined admission to 
     the Program for failure to be economically disadvantaged. 
     This recommendation was included among the legislative 
     recommendations contained in SBA's FY 1992 report to the 
     Congress on MSB/COD Program.
       Subsection (b) makes a series of necessary conforming 
     amendments.
       Sec. 104. Clarification of Certain Additional Eligibility 
     Criteria Imposed by Regulation.
       This section makes a series of amendments to the Small 
     Business Act to address several limitations on Program 
     eligibility imposed by SBA exclusively through regulations.
       First, SBA regulations currently require that a prospective 
     Program Participant must be in business for two years in 
     order to be eligible to make a Program application. Section 
     203 of Public Law 101-574, the ``Small Business 
     Administration Reauthorization and Amendments Act of 1990'', 
     specified criteria for the waiver of the so-called ``Two-Year 
     Rule''. This rule essentially excluded the participation of 
     ``start-up'' firms, despite the ability of the new firm to 
     demonstrate substantial likelihood of future success based 
     upon the firm having (or being able to obtain) necessary 
     financial and other resources as well as the management and 
     technical capabilities of its owners and key employees 
     derived from substantial experience working for others. 
     Although over three years have passed since the effective 
     date of the statute, no action has been taken to incorporate 
     the statutorily required waiver into the Program's published 
     regulations. Without modifications to published regulations, 
     prospective Program Participants continue to believe a rigid 
     Two-Year Rule still applies. This section incorporates the 
     waiver standards into the Small Business Act.
       Second, SBA regulations require that the socially and 
     economically disadvantaged individual upon whom eligibility 
     is based must be working full-time at managing the firm 
     seeking Program admission. This requirement is another 
     obstacle to the admission of a ``start-up'' firm. Some 
     prospective Program Participants retain employment with 
     another concern to maintain a steady family income while 
     awaiting access to the Program's various forms of 
     developmental assistance.
       Third, SBA regulations require a tribally-owned corporation 
     to employ a Native American as chief executive officer (CEO) 
     to manage the firm's day-to-day operations in order to obtain 
     (and maintain) Program eligibility. Many tribal governments 
     have experienced difficulty in identifying Native American 
     CEOs. Under current regulations, a tribally-owned 
     corporation's continued eligibility is jeopardized if the 
     tribal government is unable to maintain a Native American 
     CEO. This provision would permit the tribal government to use 
     someone other than a Native American CEO, if it certifies 
     to SBA that it is unable to hire a qualified Native 
     American CEO after conducting a national recruitment.
       Fourth, under current regulations, SBA may deny admission 
     to the Program on the basis of a general finding that the 
     prospective Program Participant lacks ``a likelihood of 
     future success''. This section would require SBA to provide 
     specific findings if an applicant firm is denied admission on 
     this basis. A subsequent conforming amendment of the bill 
     would repeal the statutory provision that SBA identifies as 
     the statutory basis for this wholly subjective criteria for 
     Program admission.
       Finally, the provision maintains the current limitation on 
     SBA's ability to deny admission to a prospective Program 
     Participant if the type of goods or services being offered by 
     the firm are not purchased in sufficient quantities by the 
     Federal Government. The existing statutory limitation was 
     based on an amendment offered by Senator John Kerry to the 
     legislation which became Public Law 100-656, the ``Business 
     Opportunity Development Reform Act of 1988''.
       Sec. 105. Enhancing Due Process in Eligibility 
     Determinations.
       This section would require SBA to support a denial of an 
     application for Program admission with specific 
     determinations supported by specific findings and to provide 
     an opportunity for a Program applicant to respond (or to make 
     appropriate modifications to its application or business 
     organization to address valid concerns). It would also 
     require that if SBA declined the application on 
     reconsideration, it would have to give the applicant an 
     opportunity to respond to any grounds not previously raised 
     by SBA. Currently under SBA's Program regulations, an 
     applicant is entitled to only one reconsideration. After 
     being declined on reconsideration, the regulations require 
     the prospective Program Participant to wait a year before 
     again being eligible to submit a Program application. SBA's 
     internal SOPs (Standard Operating Procedures), however, do 
     not preclude basing an adverse decision on reconsideration on 
     matters not previously raised, effectively denying the 
     applicant any opportunity to respond (or take corrective 
     action).
       Sec. 106. Improving Geographic Distribution of Program 
     Participants.
       This section would require SBA to develop an action plan 
     for improving participation in the MED Program by firms 
     across the Nation. The section specifies that the required 
     action plan would have to address two persistent concerns 
     about the existing MSB/COD Program the concentration of 
     Program Participants and contracts awarded under the 
     authority of section 8(a) in certain geographic areas. First, 
     the action plan would have to specify an outreach program 
     focused on reaching eligible small business concerns in 
     States with historically low rates of Program participation. 
     Second, the action plan would have to make recommendations 
     for improved implementation of section 8(a)(16)(B) of the 
     Small Business Act, added in 1988 by P.L. 100-656. This 
     current provision of the Small Business Act express the 
     Congressional objective of improving the equitable 
     distribution of 8(a) contracts awarded on a noncompetitive 
     basis.
       It is recognized that effecting such equitable distribution 
     of contracts is made more complicated by three factors. 
     First, the geographic concentration of Program Participants 
     in certain States or regions. Second, the natural tendency of 
     more developed and aggressive Program Participants to locate 
     within cities or regions in which their Federal customers' 
     principal buying activities are centralized. And third, the 
     emphasis on self-marketing by Program Participants as a skill 
     development objective, which was an objective of the 1988 
     legislation, is re-emphasized buy other provisions of this 
     bill, and is increasingly becoming the almost exclusive 
     method by which new Federal contracting opportunities are 
     identified for award pursuant to section 8(a). Nevertheless, 
     more aggressive implementation of section 8(a)(12 of the 
     small business and better use of agency procurement forecasts 
     required by provision of existing law may be fruitful areas 
     for consideration by SBA in formulating its action plan. 
     Similarly, the implementation of electronic contracting and 
     mandate use of commercial products mandated by the ``Federal 
     Acquisition Streamlining Act of 1994'' should also be 
     considered in formulating the action plan.

                Part B--Business Development Assistance

       Sec. 111. Developmental Assistance Authorized for Program 
     Participants.
       This section would make all Program Participants eligible 
     for the full range of developmental assistance authorized 
     under the Program. Under amendments made by Public Law 100-
     656, some forms of developmental assistance are not available 
     to firms in the so-called Transitional Stage of Program 
     participation, i.e., the last five years of the nine-year 
     Program participation term. More than four years of 
     experience under the 1988 reform legislation has demonstrated 
     that such a limitation only denied Program Participants to 
     beneficial business development assistance without 
     substantially advancing the Congressional objective of 
     encouraging the Program Participant's preparation for 
     graduation.
       Sec. 112. Expanding the Eligible Uses for Loans Under 
     Existing Loan Program for Program Participants.
       This section would expand the eligible uses for the 
     proceeds of loans currently authorized for Program 
     participants. Under the proposed amendment loan proceeds 
     could be used for working capital by Program Participants 
     providing services. Currently, the loan program is targeted 
     to Program Participants in manufacturing with the focus on 
     the capitalization of facilities or production equipment. 
     This recommendation was included among the legislative 
     recommendations contained in SBA's FY 1992 report to the 
     Congress on MSB/COD Program.
       The statutory authority for loans to Program Participants 
     adopted as Section 302 of P.L. 100-656 (which added a new 
     Section 7(a)(20) to the Small Business Act (15 U.S.C. 
     636(a)(20)) is sufficiently flexible to permit the SBA to 
     implement two elements of its proposed MED Program aimed at 
     expanding access to capital for Program Participants. First, 
     the statute would permit loans to be made at the higher 
     guarantee rates being contemplated for Program participants, 
     since the only statutory limitation is that guarantee rate 
     cannot be less than 85%. Second, the authorizing statute 
     would impose no obstacle regarding the SBA's proposal 
     regarding the pre-authorization of a Program Participant for 
     a loan. Such a pre-authorization process holds great promise 
     as a means to substantially expedite the current process by 
     which a Program Participant seeks to obtain a loan from a 
     participating bank.
       Sec. 113. Test Program for the Use of Surety Bond Waivers.
       This section would extend until September 30, 1997, the 
     test program for the use of surety bond waivers authorized by 
     Section 7(j)(13)(D) of the Small Business Act, which was 
     authorized in Public Law 100-656, the ``Business Opportunity 
     Development Reform Act of 1988'' and subsequently extended 
     through October 1, 1994 by Section 206 of Public Law 101-574, 
     the ``Small Business Administration Reauthorization and 
     Amendments Act of 1990''. It would also amend Section 
     7(j)(13)(D) to facilitate future implementation of the surety 
     bond waiver authority by the various procuring agencies and 
     by SBA.
       Sec. 114. Targeting Section 7(j) Management Assistance to 
     Program Participants.
       This section would target the management assistance program 
     authorized by Section 7(j)(1) of the Small Business Act to 
     Program Participants. Such targeting is likely to 
     substantially increase the impact of the limited resources 
     allocated to the 7(j) Management Assistance Program, slightly 
     more than $8 million for FY 1994.
       The management assistance needs of other small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals, who are currently eligible for 
     7(j) management assistance, would be met through increased 
     emphasis on the needs of such firms by the national network 
     of Small Business Development Centers (SBDCs) supported by 
     SBA and by improved coordination with the national network of 
     Minority Business Development Centers operated by the 
     Minority Business Development Administration (MBDA) at the 
     Department of Commerce.
       Sec. 115. Other Enhancements to Section 7(j) Management 
     Assistance Program.
       This section would further amend the Section 7(j) 
     Management Assistance Program to authorize funds appropriated 
     to the program to remain available for obligation during the 
     year in which they are appropriated and during the succeeding 
     fiscal year. This amendment fulfills a suggestion previously 
     made by the SBA in October, 1993.
       This subsection would also accord a preference in the award 
     of financial assistance pursuant to the Section 7(j) 
     Management Assistance Program to certain university-sponsored 
     programs for the training of minority entrepreneurs, such as 
     the resident course at the Amos Tuck School of Business at 
     Dartmouth University. SBA's proposed MED Program contains a 
     similar element regarding executive development among its 
     proposals for enhanced Managerial Training and Assistance for 
     Program Participants.
       Sec. 116. Developmental Teaming.
       This section would establish a pilot Developmental Teaming 
     Program with the SBA's Minority Enterprise Development (MED) 
     Program. The purpose of the Developmental Teaming Program is 
     to encourage the formation of mentoring relationships, 
     contract teaming arrangements and strategic business 
     alliances between current MED Program Participants and more 
     developed minority business enterprises, principally 
     graduates of the MED Program (and its predecessor program, 
     the Minority Small Business and Capital Ownership Development 
     (MSB/COD) Program).
       Subsection (c) established the basic qualifications for a 
     firm to be an assistance recipient or an assistance provider 
     under the Developmental Teaming Program. Assistance 
     providers, to be called ``Developmental Teaming Partners'' 
     may either be graduates of the MED Program (or the MSB/COD 
     Program) or current Program Participants nearing graduation 
     who are found by SBA to be unusually well-developed and fully 
     capable of providing business development assistance.
       Subsection (d) recites the array of developmental 
     assistance that may be furnished under the Developmental 
     Teaming Program. The provision provides ample flexibility for 
     the parties to a proposed Developmental Teaming Agreement to 
     tailor a program to their unique and mutual needs, since it 
     specifically authorizes ``such other forms of assistance * * 
     * contained in a developmental teaming agreement''.
       Subsection (d) also makes explicit that each Developmental 
     Teaming Agreement must receive prior approval by SBA, before 
     being implemented by the parties. It is intended that SBA 
     shall require specification of the developmental assistance 
     to be furnished in sufficient detail to permit monitoring, 
     while being mindful of the flexibility that must be available 
     in a bilateral business development mentoring relationship. 
     Similarly, it is intended that SBA exercise approval 
     regarding the percentage of a contract performance undertaken 
     by each of the parties under a specific contract awarded to 
     the Program Participant pursuant any program that accords a 
     preferential status to the Program Participant as a small 
     business concern owned and controlled by socially and 
     economically disadvantaged individuals.
       Subsection (e) specifies the minimum elements of a 
     Developmental Teaming Agreement, including its duration. An 
     agreement may have an initial term of three years, with an 
     option for an additional two years. Such a potential for a 
     five-year Developmental Teaming relationship mirrors the 
     five-year duration (one base year and four one-year option 
     years) that has become prevalent in Federal contracting (and 
     was given explicit statutory recognition in the ``Federal 
     Acquisition Streamlining Act of 1994'').
       Subsection (f) provides an incentive to the Developmental 
     Teaming Partner to enter into a developmental mentoring 
     relationship and furnish assistance by permitting the award 
     of subcontracts under 8(a) contracts by the Program 
     Participant to its Developmental Teaming Partner in amounts 
     that would otherwise be prohibited by section 8(a)(14) of the 
     Small Business Act (which requires performance of 50% of the 
     work by the prime contractor).
       Subsection (g) provides protection for the participants of 
     an approved Developmental Teaming Agreement from a finding by 
     the SBA that the parties to the agreement are affiliates or 
     that one party is controlling (either directly or indirectly) 
     the business activities of the other. Activities outside the 
     scope of the approved agreement are not shielded by this 
     provision.
       Subsection (h) specifies procedures for termination of 
     Program participation by firms receiving assistance under the 
     Program and those providing assistance. The provisions are 
     designed to assure ``due process'' protections to recipients 
     of Developmental Teaming assistance. The provision also 
     specifies the procedures relating to SBA powers to terminate 
     Development Teaming Agreements (as well as the appeal rights 
     accorded to the private sector parties).
       Subsection (i) specifies the duration of the pilot program. 
     Developmental Teaming Agreements approved by SBA from the 
     effective date of the Program's implementing regulations 
     through September 30, 1997. Performance of approved 
     Developmental Teaming Agreements may continue through the 
     Program's termination date, September 30, 2002.
       Subsection (j) specifies a timetable for the issuance of 
     proposed and final regulations for the implementation of the 
     Program.
       Subsection (k) contains definitions of terms by cross-
     references to existing definitions in the Small Business Act.

        Part C--Improving Access to Equity for Program Graduates

       Sec. 121. Continued Contract Performance.
       This section seeks to encourage the SBA to make use of the 
     statutory waiver authority related to the performance of a 
     contract awarded pursuant to section 8(a) when the socially 
     and economically disadvantaged owners of the firm awarded the 
     contract relinquish ownership or control of the firm. Under 
     current law, an 8(a) contract would have to be terminated, if 
     the socially and economically disadvantaged individuals upon 
     whom Program eligibility were established relinquished (or 
     entered into an agreement to relinquish) ownership or concern 
     that was awarded the 8(a) contract, unless a waiver was 
     granted by the SBA Administrator. While the statute specifies 
     a broad array of circumstances under which such a waiver can 
     be granted, the waiver authority was restricted to the SBA 
     Administrator, ``on a nondelegable basis''. Experience has 
     indicated that this nondelegability has unexpectedly resulted 
     in making the waiver authority unavailable in practical 
     terms. The proposed amendment would permit the delegation of 
     the waiver authority. It is expected that this legislative 
     change, when coupled with the less control-oriented 
     management style under SBA's new MED Program, should strike 
     the balance sought by the 1988 legislation. ``Selling'' of 
     8(a) contracts will be deterred, while not placing 
     unreasonable burdens on the transfer of ownership or control 
     under legitimate circumstances.
       Sec. 122. Continued Program Participation.
       This section amends Section 7(j)(11)(D) of the Small 
     Business Act to clarify the right of a Program Participant to 
     transfer a non-controlling ownership interest in the firm to 
     another small business concern owned and controlled by 
     socially and economically disadvantaged individuals. The 
     proposed amendment would revoke an existing regulatory 
     prohibition on the transfer of more than a 10 percent 
     ownership interest to a small business concern owned and 
     controlled by socially and economically disadvantaged 
     individuals if that firm is a graduate of the MSB/COD 
     Program. We should be encouraging rather than discouraging 
     capital investment in less developed Program Participants by 
     Program graduates.

             Part D--Contract Award and Eligibility Matters

       Sec. 131. Contract Award Procedures.
       This section would permit the direct award of contracts 
     under the authority of Section 8(a) by the agency having the 
     contracting opportunity. Currently, Section 8(a) contains the 
     legal fiction that the contracting agency awards a prime 
     contract to SBA, which then subcontracts to a Program 
     Participant. This provision adopts a recommendation 
     contained in the Final Report of the Commission on 
     Minority Business Development, established by Section 505 
     of the ``Business Opportunity Development Reform Act of 
     1988'', P.L. 100-656. A similar recommendation was 
     included in the September 1993 Report of the Vice 
     President's National Performance Review, and has been 
     endorsed by the Administration as part of its comments on 
     S. 1587, the ``Federal Acquisition Streamling Act of 
     1994''.
       The amendment would permit a Program Participant to request 
     the SBA's assistance with respect to the contract 
     negotiations with the agency making the contract award and 
     with respect to the resolution of contract administration 
     matters arising during performance of the 8(a) contract. The 
     amendment also retains SBA's current authority to appeal a 
     broad array of ``adverse decisions'' relating to making a 
     contracting opportunity available for award pursuant to 
     Section 8(a) and the award of a contract to a Program 
     Participant.
       Sec. 132. Timely Determination of Award Eligibility for 
     Contract Award.
       This section would require the SBA to promptly inform a 
     contracting activity regarding the eligibility of a Program 
     Participant for award of a contract under section 8(a). 
     Similarly, it would require SBA to establish the eligibility 
     for award of competing Program Participants at the closing 
     date for receipt of offers. Currently, the conduct 8(a) 
     competitions are being impeded by ineligibility 
     determinations being made at the close of the competitive 
     process with regard to the Program Participant selected for 
     award by the contracting agency.
       Section 131 makes explicit that the procuring agency is 
     responsible for determining whether the Program Participant 
     is capable of performing the contract (a ``responsibility 
     determination'' in the jargon of Federal procurement). A 
     determination of ``non-responsibility'' by the agency's 
     contracting officer is subject to an independent review of 
     the firms capabilities to perform the contract by the SBA 
     under the Certificate of Competency Program, in the same 
     manner as a ``non-responsibility'' determination regarding 
     finding regarding any small business concern. In addition to 
     a responsibility determination made by the agency contracting 
     officer, this section recites the existing statutory criteria 
     under which a Program Participant can be found to be 
     ineligible for award by SBA.
       Sec. 133. Competition Requirements.
       Subsection (a) establishes the standard for determining 
     whether various forms of requirements-type contractors (often 
     referred to as ID/IQ (indefinite delivery/indefinite 
     quantity) contracts to be awarded pursuant to section 8(a) 
     should be awarded as a result of a competition among eligible 
     Program Participants or on a sole-source basis. Current law 
     requires a competition among Program Participants if the 
     anticipated value of the contract (including options) is 
     expected to exceed $5 million in the case of a contract 
     requiring manufacturing and $3 million in the case of a 
     contract to furnish any other product or service (including 
     construction).
       Under existing SBA MSB/COD Program regulations, the 
     decision on whether the contracting opportunity should be 
     subject to competition is to be based upon the dollar value 
     of task orders or delivery orders guaranteed under the 
     contract. Such ``guaranteed minimums'' commonly reflect but a 
     very small percentage of the aggregate value of all task 
     order or delivery orders actually placed under an ID/IQ 
     contract. This regulatory exception to competition has 
     apparently resulted in a large number of 8(a) contracting 
     opportunities to be offered as ID/IQ contracts, with 
     guaranteed minimums below the threshold for competition, 
     irrespective of the estimated total value of the contract (in 
     terms of both requested and approved levels of authorization 
     and appropriation).
       Audits of ID/IQ contracting in support of the MSB/COD 
     Program have reached the conclusion that the SBA Program 
     regulations and the widespread use of ID/IQ contracts with 
     low guaranteed minimums have largely frustrated the 
     Congressional objective of having larger dollar value 
     contracts awarded after competitions among Program 
     Participants. In a particularly critical audit report (DOD IG 
     Audit Report No. 93024) issued in November, 1992, the DOD 
     Inspector General recommended to SBA that its Program 
     regulations be modified to make explicit that the 
     threshold for competition on ID/IQ contracts be determined 
     on the basis of the estimated total value of the contract. 
     The DOD IG notes that this is the standard used in the 
     Government-wide Federal Acquisition Regulation (FAR) to 
     find a broad array of regulatory requirements applicable 
     to ID/IQ contracts. Although agreeing to change its 
     Program regulations, SBA has yet to propose a modification 
     after nearly 18-months.
       The same DOD IG audit report also found that Program 
     Participants under non-competitively awarded ID/IQ contracts 
     relating to computer services and equipment were essentially 
     acting as brokers, merely furnishing computer equipment to 
     the DOD buying activity on a sole-source basis through an 
     8(a) contract award. By having the equipment purchases made 
     under an 8(a) contract, the DOD buying activities were able 
     to use the 8(a) contract to avoid the justifications and 
     approvals that would otherwise be statutorily required for 
     such a sole source purchase.
       Subsection (b) would permit the Associate Administrator for 
     the MSB/COD Program, on a nondelegable basis, to authorize 
     non-competitive 8(a) contract awards in excess of the 
     thresholds for competition under limited circumstances. 
     Essentially, up to $15 million in non-competitive awards 
     could be authorized for a Program Participant in the 
     Developmental Stage (first five years) of its nine-year 
     Program Participation Term and if the firm has not exceeded 
     25 percent of the size standard for its principal line of 
     business as reflected in its most recent business plan.
       Sec. 134. Policies Regarding SIC Codes.
       This section would modify the processes by which Standard 
     Industrial Classification (SIC) Codes are utilized by a 
     Program Participant in describing the firm's business 
     activities and by an agency contracting officer in describing 
     the item or service being procured under a specific contract 
     solicitation.
       The system of SIC Codes, maintained by the Office of 
     Management and Budget, provides broad descriptions of classes 
     of business activity in manufacturing and services, which are 
     intended to permit various agencies of Government to capture 
     consistent data for economic and other purposes. The SBA 
     assigns a numerical size standard (number of employees or 
     average gross receipts over a three year period) to each of 
     these SIC Codes, which is the principal method for 
     determining whether a business concern is to be recognized as 
     a ``small business''. Program Participants use these SIC 
     codes to describe the types of business activity in which the 
     firm is engaged (and in which it intends to become engaged if 
     its business plan is successfully implemented). With respect 
     to Government contracting, an agency contracting officer 
     assigns an SIC code to describe the principal product or 
     service being sought by the Government through a contract 
     solicitation. Because of the linkage to the SBA size 
     standards, the contracting officer's designation of the 
     appropriate SIC Code to describe the contracting opportunity 
     can be determinative of whether a particular firm will be 
     recognized as a ``small business concern'' and be permitted 
     to participate, if the competition is to be restricted to 
     small businesses, or to be awarded pursuant to section 8(a) 
     (as well as other statutorily authorized preferential 
     procurement techniques for small business concerns owned and 
     controlled by socially and economically disadvantaged 
     individuals).
       Subsection (a) would make explicit the right of a Program 
     Participant to designate the SIC codes applicable to the 
     firm's current and planned business activities as reflected 
     in its business plan (or any modifications to such plan), 
     without obtaining specific prior-approval from the SBA, which 
     is currently required by Program regulations. Program 
     Participants complain that delays attendant to such prior-
     approval requirements have impeded the ability of some firms 
     to be considered eligible for award of an 8(a) contract, even 
     though the contracting officer was prepared to determine that 
     the firm was capable of performing the contract. At the same 
     time, given the preferential nature of the 8(a) contracting 
     process, it is not wholly uncommon for a Program Participant 
     to declare its capability to furnish particular types of 
     products or services after a specific contracting opportunity 
     has been made available. The provision contemplates the 
     issuance of revised Program regulations that would accord 
     substantially more freedom for a Program Participant to chart 
     its own business destiny, but still require an orderly 
     process of adopting SIC codes that is linked to the firm's 
     announced vision of its intended patterns of growth and 
     development as reflected in its business plan.
       Subsection (b) would make explicit the right of a 
     contracting officer to assign an SIC Code to a contracting 
     opportunity to be awarded pursuant to section 8(a) in the 
     same manner such officer assigns an SIC code to other 
     contracting opportunities. Current Program regulations 
     reserve to SBA final approval of the SIC code of a 
     contracting opportunity to be awarded under section 8(a), 
     apparently as an additional check upon the potential for 
     abuse. The proposed change is in keeping with the overall 
     theme of the bill in placing principal responsibility for the 
     award of contracts pursuant to section 8(a) in the hands of 
     the contracting agencies.
       It should be noted, however, that subsection (a) is not 
     intended to impair SBA's existing authority to protest, under 
     existing regulations, the appropriateness of the SIC code 
     assigned by a contracting officer to a specific contracting 
     opportunity. This authority, if vigorously used by the SBA 
     when circumstances appear to warrant, should provide adequate 
     opportunity to check the real potential for abuse in the 
     assignment of SIC codes.
       Subsection (c) would make explicit the right of a 
     contracting officer to make the determination that a 
     prospective contractor is capable of performing the proposed 
     contract (a determination of ``responsibility'' in the jargon 
     of Government contracting) to be awarded pursuant to section 
     8(a) in the same manner such officer assigns an SIC code to 
     other contracting opportunities. Current Program regulations 
     reserve to SBA the right to make the final determination of 
     responsibility regarding the award of a contract pursuant to 
     section 8(a), apparently as an additional protection for 
     Program Participants. The proposed change is in keeping with 
     the bill's theme of placing principal responsibility for the 
     award of contract pursuant to section 8(a) in the hands of 
     the contracting agencies.
       It should be noted, however, that subsection (c) does not 
     impair the protections accorded through the SBA Certificate 
     of Competency (COC) Program under the authority of Section 
     8(b)(7) of the Small Business Act. If a contracting officer 
     makes a ``nonresponsibility'' determination regarding a 
     Program Participant with respect to a potential 8(a) contract 
     award, the Program Participant is entitled to an independent 
     review by SBA of the contracting officer's non-responsibility 
     determination under the COC Program in the same manner as any 
     small business.
       Sec. 135. Use of Contract Support Levels.
       This section would prohibit SBA from determining a Program 
     Participant to be ineligible for the award of pursuant to 
     section 8(a) because the award would cause the firm to exceed 
     its so-called 8(a) contract support level.
       Under the 1988 amendments to the MSB/COD Program, a Program 
     Participant is required to forecast the volume of business 
     activity the firm will be seeking through 8(a) contract 
     awards (competitive as well as non-competitive) as part of 
     the firm's annual business planning process. It was intended 
     that such forecasts would provide the SBA with an additional 
     tool with which to urge the various procuring agencies to 
     make available additional contracting opportunities for award 
     pursuant to section 8(a). In implementing this statutory 
     provision, SBA made the 8(a) contract support level 
     forecasted by each Program Participant into a ceiling on the 
     dollar volume of 8(a) contract awards the firm would be 
     permitted to receive.
       This restrictive interpretation of the statutory provision 
     has led to several adverse consequences. First, some Program 
     Participants have been denied award of 8(a) contracts, even 
     if the contract was to be awarded as the result of the firm's 
     having won an 8(a) contract competition. Second, recognizing 
     the 8(a) contract support level forecast was being 
     implemented as a ``ceiling'' rather than a ``floor'', Program 
     Participants began to offer unrealistically inflated 
     forecasts to avoid even the possibility of losing a future 
     8(a) contract award. This has diminished the utility of the 
     forecasts to be an effective marketing tool for the SBA in 
     its dealings with the various procuring agencies.
       Sec. 136. Business Mix Requirements.
       This section would amend section 7(j)(10) of the Small 
     Business Act to permit contracts awarded as a result of 
     competitions among Program Participants to be counted as 
     competitive for the purpose of attaining the firm's 
     ``business mix'' goals.
       The ``Business Opportunity Development Reform Act of 1988'' 
     established ``business mix'' targets aimed at gradually 
     reducing the dependence of Program Participants on the award 
     of contracting opportunities awarded pursuant to Section 
     8(a), especially those awarded on a non-competitive basis. 
     Gradually reducing the firm's dependence on 8(a) contract 
     awards during the nine years of its Program participation 
     term would substantially increase the prospect for success 
     after graduation.
       Experience with the Act since 1988 strongly suggested that 
     8(a) contract awards won as the result of an 8(a) contract 
     competition should have been creditable as ``competitive'' in 
     attaining the firm's business mix targets. With competitive 
     8(a) awards unavailable for meeting a Program Participants 
     ``business mix'' targets, firms in the later stages of their 
     Program Participant term were being deterred from competing 
     for 8(a) awards, since they lacked sufficient dollar volume 
     of other competitive awards which were creditable to the 
     attainment of the ``business mix'' targets.
       The amendment would again make consistent the Congressional 
     intent to distinguish between competitive and non-competitive 
     awards, and to encourage Program Participants to participate 
     in increasingly less restrictive forms of contract 
     competition, so as to prepare them most effectively for 
     ``full and open competition'' for government contracts and 
     the unrestricted competitions of the commercial marketplace.
       Sec. 137. Encouraging Self-Marketing.
       Subsection (a) of this section would direct the SBA to 
     modify its regulations for the MSB/COD Program to eliminate 
     the restrictions on ``self-marketing'' to the various agency 
     buying activities by Program Participants through its 
     restrictions on so-called ``National Buys'' and ``Local 
     Buys''.
       Under Program regulations a ``Local Buy'' is a product or 
     service purchased to meet the specific needs of one user on 
     one location. A ``National Buy'' is a product or service 
     purchased by a centralized procuring activity to support the 
     needs of one or more users at two of more locations.
       Subsection (b) repeals the requirement that construction 
     contracts be awarded to firms in the county or state in which 
     the work is to be performed.
       Inadvertently left unaddressed in 1988, this provision 
     conflicts with both the intent of the Public Law 100-656 and 
     the practical business realities of the modern construction 
     market. First, Public Law 100-656 sought to ease the myth 
     that Program Participants could expect to be ``given'' 
     contracts by SBA. It sought to erase that myth by making 
     explicit the responsibility of Program Participants to engage 
     in self-marketing. The provision to be repealed places an 
     entirely artificial impediment on self-marketing that is also 
     contrary to the business realities of modern construction 
     contracting. Prospectively successful small construction 
     firms must be able to develop the capabilities to undertake 
     projects outside of their immediate geographic location.
       Further, the implementation of this provision often 
     prevents Program Participants from self-marketing in their 
     natural markets simply because those markets happened to be 
     located across a state line. For example, a firm in southern 
     New Jersey being able to self-market work in the Philadelphia 
     area. Or conversely, a Program Participant in southeastern 
     Pennsylvania can currently be prohibited from self-market 
     business opportunities in southern New Jersey, simply because 
     of a state boundary that does not constitute an 
     unsurmountable obstacle to business activities outside the 
     Program. Further, reports from Program Participants strongly 
     suggested that the statutory provision was not being 
     uniformly applied by various SBA regional and district 
     offices, or in some instances within the same district or 
     regional office.
       Sec. 138. Building of Contractor Capabilities.
       Subsection (a) of this section would permit a Program 
     Participant to assemble a subcontract team capable of 
     competing for a so-called ``bundled'' contract opportunity by 
     authorizing the waiver of existing requirements relating to 
     permissible amounts of subcontracting and the inclusion of 
     other than small business concerns. Such authority is seen as 
     a more flexible alternative to the formation of joint 
     ventures.
       Currently, a Program Participant may propose for SBA 
     approval a joint venture, provided that the Program 
     Participant holds a 51% interest in the joint venture and 
     exercises control of the joint venture's day-to-day business 
     operations. Since a joint venture is a separate legal entity, 
     both the Program Participant and its joint venture partners 
     must incur legal costs relating to defining the proposed 
     joint venture, so that they may be reviewed and approved by 
     SBA. And subsequently, incur additional costs relating to the 
     actual formation of the approved joint venture for the 
     purpose of competing for one or more contracting 
     opportunities. Success in winning such contracts, while 
     enhanced by the combined capabilities of the joint venture 
     partners, is not guaranteed.
       By facilitating the formation of more tailored and targeted 
     prime contractor-subcontractor teams, the proposed new 
     authority will provide the same opportunity to pool 
     resources, while the unnecessary cost of creating a new legal 
     entity. As with the information of a joint venture, the 
     proposed prime contractor-subcontractor team would be subject 
     to approval by SBA, if the Program Participant prime 
     contractor was anticipated to be performing less than 50% of 
     the work (as is currently required by statute if the 
     completing is restricted) or the proposed subcontracting with 
     a large firm would otherwise result in a finding of 
     affiliation with, or control by, the large firm 
     subcontractor. Under the proposed provision a large firm 
     (technically, a firm that is ``other than a small business 
     concern'') would be permitted to be a major subcontractor (up 
     to 25% of the total value of the contract).
       Subsection (b) provides a definition of ``contract 
     bundling''.
       Subsection (c) makes a necessary conforming amendment to 
     the Small Business Act which inserts a cross-reference to the 
     new definition.

                  Part D--Tribally-Owned Corporations

       Sec. 141. Management and Control of Business Operations.
       This section would permit the day-to-day business 
     operations of a tribally-owned corporation to be managed by 
     other than a Native American with the necessary skills and 
     experience to serve as the tribal corporation's chief 
     executive officer (CEO). The use of such a non-Native 
     American CEO would be subject to approval by SBA.
       Under current law, the CEO of a tribal corporation must be 
     a Native American if the tribal corporation is to be eligible 
     for Program admission or to maintain Program eligibility. 
     Some tribal corporations have had their continued Program 
     eligibility jeopardized when their current Native American 
     CEO chose to depart and they were unable to identify a 
     qualified replacement, even after a national recruitment. 
     While steadily increasing in number, due to opportunities 
     offered by the growing number of tribal corporations, the 
     cadre of Native Americans CEOs remains relatively small. This 
     provision would avoid penalizing legitimate tribal 
     corporations, with their potential to bring desperately 
     needed employment to reservations, from participating in the 
     Program simply because they were unable to identify a 
     qualified Native American CEO.
       Since this provision would permit the day-to-day business 
     management of the tribal corporation to be exercised by other 
     than a socially disadvantaged individual, it is expected that 
     SBA's implementing regulations would require the tribal 
     government to demonstrate that it had conducted a national 
     recruitment to locate a qualified Native American CEO before 
     approving the use of a non-Native American CEO. Similarly, it 
     is expected that the tribal government would conduct such a 
     national recruitment to identify a Native American CEO each 
     time a vacancy arises.
       Sec. 142. Joint Venture Authority.
       Subsection (a) of this Section codifies and makes permanent 
     the current authority for tribal corporation Program 
     Participants to enter into joint ventures under certain 
     specified circumstances. This joint venture authority was 
     initially granted on a three-year pilot basis by Section 
     602(b) of Public Law 100-656, the ``Business Opportunity 
     Development Reform Act of 1988''. The joint venture authority 
     was extended for an additional three years (through September 
     30, 1994) and expanded to apply concurrently to five 
     contracts rather than two by Section 205 of Public Law 101-
     574, the ``Small Business Administration Reauthorization and 
     Amendments Act of 1990''.
       Experience during the pilot phase suggests that the 
     authority has worked as intended. These joint venture 
     relationships have permitted the tribal corporations to 
     undertake larger contracts, bring more employment 
     opportunities to the reservations, and have provided informal 
     opportunities for developmental mentoring between the tribal 
     corporation and its large joint venture partner.
       Subsection (b) would move to Section 3 of the Small 
     Business Act definitions of ``Indian tribe'' and ``Native 
     Hawaiian organization'', which are currently found in Section 
     8 of the Act. The definitions are being transferred without 
     substantive change.
       Sec. 143. Rule of Construction Regarding the ``Buy Indian 
     Act''
       This section establishes a statutory rule of construction 
     that seeks to avoid any conflict between the eligibility 
     requirements for award of a contract pursuant to Section 8(a) 
     of the Small Business Act and for award of a contract 
     pursuant to the so-called ``Buy Indian Act''.

                Part F--Contract Administration Matters

       Sec. 151. Accelerated Payment.
       This section would require that any contract awarded 
     pursuant to Section 8(a) to a Program Participant in the 
     Development Stage (first four years of its nine-year Program 
     Participation Term) must provide for payment within 20 days 
     for any proper payment request for work performed. Since cash 
     flow is the life blood of any business concern, accelerating 
     cash flow for such smaller, new entrants to the Program 
     represents an exceedingly valuable form of developmental 
     assistance.
       Essentially, the provision is directing the inclusion in 
     8(a) contracts of a specific payment term in the same manner 
     that the Prompt Payment Act (Chapter 39 of title 31, United 
     States Code) specifies accelerated payment terms for 
     enumerated classes of products or services. Other than 
     specifying a payment term to be inserted in certain contracts 
     awarded pursuant to section 8(a), the provision does not 
     alter the requirements imposed on contractors or the 
     protections accorded to the Government (and contractors) by 
     the Prompt Payment Act.
       Sec. 152. Expedited Resolution of Contract Administration 
     Matters.
       Subsection (a) of this section would amend the Small 
     Business Act to require a contracting officer to provide a 
     substantive response in writing to a inquiry from a Program 
     Participant awarded a contract pursuant to Section 8(a) 
     within 15 days of receiving a written inquiry concerning a 
     matter relating to the administration of the contract. If the 
     contracting officer is unable to respond within the 15-day 
     period, such officer shall provide a written response within 
     such 15-day period specifying a date certain by which the 
     Program Participant may expect a substantive response to its 
     inquiry.
       Subsection (b) of the Section set forth a rule of 
     construction making explicit that the amendment to Section 
     8(a) of the Small Business Act shall not be considered to 
     have created any new rights under the Contract Disputes Act 
     of 1978 (41 U.S.C. 601 et seq.).
       Sec. 153. Availability of Alternative Disputes Resolution.
       This section would amend Section 8(a) of the Small Business 
     Act to require the contracting officer responsible for the 
     administration of an 8(a) contract to make available 
     alternative disputes resolution (ADR) processes authorized 
     by Section 6(e) of the Contract Disputes Act of 1978 (41 
     U.S.C. 603(e)) upon the request of the Program 
     Participant, unless certain conditions were met.
       The contracting officer would not have to provide ADR 
     procedures if the contracting officer determined that the use 
     of ADR techniques was inappropriate to the contract dispute 
     at issue. The contracting officer's determination would have 
     to cite one or more of the statutorily enumerated conditions 
     (5 U.S.C. 572(b)) making ADR inappropriate or some other 
     specific reason directly related to the contract dispute at 
     issue. The contracting officer would be required to support 
     such a determination with specific findings.
       ADR techniques have been demonstrated to expedite 
     resolution of contract disputes and to be substantially less 
     costly than disputes pursued before the boards of contract 
     appeals or through the courts. Making available such 
     accelerated and less costly disputes resolution techniques is 
     another obvious means by which the Government can assist 
     Program Participants.

                     Part G--Program Administration

       Sec. 161. Simplification of Annual Report to Congress.
       This section would amend Section 7(j)(16) of the Small 
     Business Act relating to the content of the report pertaining 
     to the MSB/COD Program which SBA is required to submit 
     annually to the Congress. It would modify the reporting 
     requirement regarding the dependency of Program Participants 
     on contracts awarded pursuant to the authority of Section 
     8(a).
       Sec. 162. Reduction in Reporting by Program Participants.
       This section reduces from a semiannual basis to an annual 
     basis the report which a Program Participant must submit to 
     SBA relating to the firm's use of agents to obtain Federal 
     contracts.


   Title II--Contracting Program for Certain Small Business Concerns

                   Part A--Civilian Agencies Program

       Sec. 201. Procurement Procedures Authorized.
       This section adds a new Section 8(c) to the Small Business 
     Act extending to the civilian agencies the special 
     procurement procedures currently available to the Department 
     of Defense under its so-called Section 1207 Program (Section 
     1207 of Public Law 99-661, the ``National Defense 
     Authorization Act for Fiscal Year 1987''), which established 
     a five percent goal for the participation of SDBs in Defense 
     contracting opportunities. Subsequently, Section 502 of 
     Public Law 100-656, the ``Business Opportunity Development 
     Reform Act of 1988'' established a Government-wide five 
     percent goal for SDB participation in Federal contracting 
     opportunities (as well as a 20 percent goal for the 
     participation of all types of small businesses), but did not 
     afford the civilian agencies the special procurement 
     procedures to attain their SDB goals.
       Section 801 of Public Law 102-484, the ``National Defense 
     Authorization Act for Fiscal Year 1994'' extended the Section 
     1207 Program through September 30, 2000 and codified it as 
     Section 2323 of Title 10, United States Code.
       Sec. 202. Implementation Through the Federal Acquisition 
     Regulation.
       Subsection (a) of this section requires uniform 
     implementation of the new statutory authority through the 
     Government-wide Federal Acquisition Regulation (FAR). While 
     the provision is not intended to impair the existing 
     regulations for the DOD Section 1207 Program found in the 
     DFARS (Defense Federal Acquisition Regulations Supplement) or 
     any DFARS supplement issued by a Military Service or a 
     Defense agency, DOD would not be precluded from using the FAR 
     coverage and reducing its DFARS coverage only to matters 
     not addressed in the FAR. Since the special procurement 
     authorities relating to the contract participation of SDBs 
     in contracting (and subcontracting) opportunities are 
     intended to mirror DOD practices, it is likely that any 
     need for special DFARS coverage would be relatively 
     minimal.
       Subsection (b) of this section describes specific matters 
     that are to be included in the regulations.
       Sec. 203. Sunset.
       This section establishes a sunset for the civilian agency 
     equivalent of DOD's Section 1207 Program. The termination 
     date is the same as that established for the DOD Program in 
     October 1992 by the FY 1993 DOD Authorization Act, September 
     30, 2000.

          Part B--Eligibility Determinations Regarding Status

       Sec. 211. Improved Status Protest System.
       This section amends Section 7(j)(10)(J) of the Small 
     Business Act for the purpose of revitalizing the SBA's system 
     for hearing and deciding protests regarding whether a firm 
     has improperly self-certified its status as a small business 
     concern owned and controlled by socially and economically 
     disadvantaged individuals.
       Currently, the authority to receive and decide status 
     protests is vested in the Division of Program Certification 
     and Eligibility within SBA's Office of Minority Small 
     Business and Capital Ownership Development, pursuant to 
     Section 7(J)(11)(F)(vii) of the Small Business Act. Under the 
     provisions implementing regulations, a finding that a 
     business concern is not a small business concern meeting the 
     standards of section 8(d) of the Small Business Act, that is, 
     a small business concern owned and controlled by socially and 
     economically disadvantaged individuals, only applies to the 
     procurement under which the status protest has been lodged. 
     Except for an obligation to inform the contracting officer 
     that such an adverse status protest decision has been issued, 
     the firm is permitted to self-certify its status as a 
     disadvantaged small business concern on a subsequent 
     contracting opportunity. Further, many questions were raised 
     about the substantial delays in the issuance of status 
     protest decisions by SBA. Finally, critics of the current 
     status protest system urge that it is further weakened by 
     SBA's unwillingness to initiate action (or to permit a 
     procuring agency to initiate action) to impose any of the 
     statutorily authorized administrative or judicial remedies 
     for multiple false certifications of status by the same firm. 
     Taken together, these weaknesses have tended to virtually 
     eliminate confidence regarding the utility of the status 
     protest system (or SBA's willingness to police the self-
     certification system) within both the contracting officer 
     community as well as the contractor community.
       Under the proposed amendments, protests regarding status 
     are transferred to SBA's Office of Hearings and Appeals. Some 
     additional personnel resources may be required by the Office 
     of Hearings and Appeals to assure that decisions on status 
     protests are promptly rendered. Such an effective protest 
     forum is essential if the integrity of the self-certification 
     process regarding SDB status under various preferential 
     contracting programs across Government is to be restored.
       Finally, the proposed amendments would make explicit that a 
     Federal agency (as well as the SBA) is authorized (and even 
     encouraged) to initiate appropriate proceedings to impose 
     statutorily authorized administrative or judicial remedies 
     with regard to a firm that has been found to have engaged in 
     a pattern of misrepresentations regarding its status as a 
     small business concern owned and controlled by socially and 
     economically disadvantaged individuals.
       Sec. 212. Conforming Amendment.
       This section would repeal the existing provision of Section 
     7(j)(11)(F) of the Small Business Act which currently 
     authorizes the Division of Program Certification and 
     Eligibility within SBA's Office of Minority Small Business 
     and Capital Ownership Development to hear and decide status 
     protests.


           TITLE III--Expanding Subcontracting Opportunities

       Sec. 301. Evaluating Subcontract Participation in Awarding 
     Contracts.
       This section amends Section 8(d) of the Small Business Act 
     to provide for the consideration of goals for the proposed 
     participation of small business concerns and small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals as subcontractors and suppliers as 
     part of the process of selecting among competing offerors for 
     the award of a prime contract in excess of $500,000 ($1 
     million in the case of construction).
       Under current law, an offeror having been selected for the 
     award of a prime contract in excess of the applicable 
     threshold is required to negotiate goals and submit a plan 
     for the use of such small businesses as subcontractors and 
     suppliers. Although actual award of the contract is 
     theoretically contingent upon the negotiation of goals and a 
     plan acceptable to the agency's contracting officer, 
     practical experience strongly suggests that the Government's 
     leverage to negotiate the most ambitious goals is 
     substantially diminished by the fact that the prospective 
     prime contractor has already been selected for contract 
     award. By making small business subcontract participation an 
     important factor in the award of the prime contract, it is 
     possible to harness the contract competition, which is 
     frequently quite intense, to substantially increase the 
     amount of small business subcontract participation.
       The amendment also includes other safeguards to assure that 
     a prime contract actually makes use of those subcontractors 
     which the firm has identified as subcontractors or suppliers 
     under the prime contract.
       Sec, 302. Subcontracting Goals for Certain Small Business 
     Concerns.
       This section amends Section 8(d)(7) of the Small Business 
     Act to require that a small business concern owned and 
     controlled by socially and economically disadvantaged 
     individuals having been awarded a contract with an 
     anticipated total value of $20 million or more through a 
     competition that was restricted to such small disadvantaged 
     businesses, shall be required to negotiate a goal and furnish 
     a plan for the participation of so-called emerging 
     disadvantaged small business concerns as subcontractors and 
     suppliers. Section 502 of the bill defines an emerging small 
     business concern as one which does not exceed 25 percent of 
     the SBA's numerical size standard for a small business 
     concern.
       Sec. 303. Small Business Participation Goals.
       This section amends Section 15(g) of the Small Business Act 
     increasing the goal for the participation of small business 
     concerns from 20 percent to 25 percent and from 5 percent to 
     8 percent for the participation of small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals.
       Under present law, an eight percent goals applies to the 
     contracting activities of several civilian agencies, 
     including NASA and EPA. Further the existing 5 percent goal 
     for SDB participation by the Department of Defense was 
     exceeded during FY 93, attaining [5.x percent], which the 
     Government-wide SDB participation rate was [x.x percent], 
     which substantially diminishes the efficacy of the current 
     Government-wide 5 percent participation goal, which was 
     adopted in 1988.


              TITLE IV--Repealers and Technical Amendments

                           Part A--Repealers

       Sec. 401. Loan Program Superseded by Section 7(a) Loan 
     Program.
       This section repeals Section 7(i) of the Small Business Act 
     which authorizes a guaranteed loan program that has been 
     superseded by the Section 7(a) Guaranteed Loan Program.
       Sec. 402. Superseded Loan Program Relating to Energy.
       This section repeals Section 7(l) of the Small Business Act 
     which authorizes a dormant loan program relating to 
     stimulating business activities in the improved utilization 
     of fossil fuels and advancing the use of non-fossil fuel 
     energy sources. The objectives of this specialized loan 
     program are now being met through the less restrictive, and 
     funded, Section 7(a) Guaranteed Loan Program.
       Sec. 403. Employee Training Program of Limited Scope.
       This section repeals Section 15(j)(13)(E) of the Small 
     Business Act which authorizes a program under which SBA may 
     provide financial assistance for the training of employees 
     (or perspective employees) of firms participating in the SBA 
     Minority Small Business and Capital Ownership Program. This 
     program has remained unfunded since it was authorized as part 
     of P.L. 100-656. the ``Business Opportunity Development 
     Reform Act of 1988''. Repeal of this provision is in keeping 
     with the Administration's effort to rationalize and to a 
     greater extent consolidate the worker training programs 
     scattered through various Departments and agencies of the 
     Federal Government
       Sec. 404. Expired Provision.
       This section would repeal Section 8(a)(2) of the Small 
     Business Act, which expired on September 30, 1988. The 
     subject matter of this provision was included in Section 
     7(j)(13)(D) by a provision of P.L. 100-656, the ``Business 
     Opportunity Development Reform Act of 1988''.

                      Part B--Technical Amendments

       Sec. 411. Technical Amendments.
       This section makes a series of technical corrections 
     throughout various provisions of the Small Business Act, 
     correcting grammatical errors and modernizing citations.


                          title v--definitions

       Sec. 501. Historically Underutilized Business.
       This section would substitute the term ``historically 
     underutilized business'' for the term ``socially and 
     economically disadvantaged small business concern''. It would 
     not alter the existing statutory requirements regarding who 
     is presumed to be socially disadvantaged or may demonstrate 
     their status as being economically disadvantaged. Similarly 
     unchanged are the current requirements that the firm must be 
     owned and its day-to-day business operations controlled by 
     individuals who are both socially and economically 
     disadvantaged.
       The adoption of the term ``historically underutilized 
     business'' to replace the term ``small disadvantaged 
     business'' (to describe a small business concern owned and 
     controlled by socially disadvantaged individuals) was one of 
     the recommendations of the Commission Minority Business 
     Development (established by Section 505 of Public Law 100-656 
     for the purpose of reviewing and assessing all Federal 
     programs intended to foster the development of minority-owned 
     businesses). The Commission's Final Report noted that the 
     currently prevalent term ``small disadvantaged business'' 
     (SDB) tends to have the effect of demeaning from the outset 
     the capabilities of the firm, which may be substantial, even 
     if the firm is owned and controlled by socially and 
     economically disadvantaged individuals.
       Sec. 502. Emerging Small Business Concern.
       Subsection (a) of this section establishes a new definition 
     of ``emerging small business concern''. An emerging small 
     business concern is one which has not yet achieved 25 percent 
     of the applicable SBA numerical sized as a small business 
     concern.
       Subsection (b) of this section makes explicit that the 
     existing definition of ``emerging small business concern'' 
     established by Section 718(b) of the Small Business 
     Competitiveness Demonstration Act of 1988, Title VII of 
     Public Law 100-656, remains unaffected. For the purpose of 
     the Small Business Competitiveness Demonstration Program, 
     an emerging small business concern shall continue to be a 
     small business concern that has not exceeded 50 percent of 
     the applicable SBA numerical size standard for determining 
     whether a business concern may claim to be a small 
     business concern.


        title vi--regulatory implementation and effective dates

               Part A--Assuring Regulatory Implementation

       Sec. 601. Deadlines for Issuance of Proposed and Final 
     Regulations.
       Subsection (a) of this section requires that proposed 
     regulations implementing the Business Development Opportunity 
     Act of 1994 be published within 120 days of enactment. It 
     further requires that the public be afforded at least 60 days 
     to provide comments on the proposed regulations.
       Subsection (b) establishes a statutory deadline for the 
     issuance of the final regulations implementing the Act. Final 
     regulations must be issued within 270 days from the date of 
     enactment.
       Sec. 602. Regulatory Implementation of Prior Legislation.
       This section establishes a statutory schedule for the 
     issuance of proposed and final regulations implementing 
     provisions previously enacted which have yet to be 
     implemented through published regulations. Subsection (c) 
     lists the provisions of law covered by this section. Some 
     have remained without implementing regulations for more than 
     three years.

                        Part B--Effective Dates

       Sec. 611. Effective Dates.
       This section establishes the effective dates for the 
     various provisions of the ``Business Opportunity Development 
     Act of 1994''.
 Ms. MOSELEY-BRAUN. Mr. President, at the outset, I want to 
thank Senator John Kerry for his leadership on behalf of small 
businesses that are owned and controlled by socially and economically 
disadvantaged individuals.
  I am proud to be an original cosponsor of this legislation and I am 
particularly pleased that some suggestions I made to Senator Kerry are 
included in this bill: Particularly developmental teaming agreements, 
and the improved notice of subcontracting opportunities.
  The purpose of the Developmental Teaming Program is to foster the 
business development and long-term business success of firms 
participating in the Minority Enterprise Development Program. 
Encouraging the formation of teaming arrangements and long-term 
strategic business alliances between such firms and firms that have 
graduated from the Minority Enterprise Development Program will help 
enhance these firm's overall business performance.
  Historically, firms owned by socially and economically disadvantaged 
individuals have had difficulty in the initial stages of business 
development, and these developmental teaming agreements will provide 
these start-up firms with the kind of assistance that will help them 
succeed. Specifically, developmental teaming agreements will provide 
critical assistance targeted to developmental 8(a) firms in those areas 
that are most important for sustained business growth. The graduating 
firm will provide business management, financial management, 
organizational management, and personnel management assistance along 
with marketing and proposal preparation skills, production inventory 
control, and quality assurance. The graduate firm can award 
subcontracts to their teaming firm and give financial assistance in the 
form of loans, loan guarantees, surety bonding, advance payments, and 
accelerated progress payments.
  The developmental teaming agreements must first be approved by the 
Small Business Administration, and would last 3 years with an option to 
renew the agreement for an additional 2 years.
  The provisions within this bill will also allow for the improved 
notice of subcontracting opportunities by requesting that all 
subcontracting opportunities and awards above $100,000 be published in 
the Commerce Business Daily. This will provide the information 
subcontractors need to submit proposals on contract opportunities that 
have not previously been made public.
  The objective of this amendment is to gain equal access to 
subcontracting opportunities. Firms need to be aware of subcontracting 
opportunities in order to pursue competitive contracts.
  In 1992, 50 firms or fewer than 2 percent of all 8(a) companies, 
received about $1.5 billion, or 40 percent of the nearly $4 billion in 
8(a) contracts awarded during that year. This legislation would assist 
8(a) firms in the self-marketing process by allowing them access to 
information.
  These provisions will assist 8(a) firms in becoming successful. The 
Small Business Administration's 8(a) Program needs real reform and I 
believe that the Business Development Opportunity Act will help the SBA 
assist 8(a) firms in becoming more successful.
  Although we will not move this legislation through Congress this 
year, I will work closely with Senator Kerry and the Small Business 
Committee to pass this bill in the next Congress.
  I would like to again thank Senator Kerry for including my provisions 
in this bill. Senator Kerry should be commended for his leadership on 
behalf of small businesses across the United States.
 Mr. PRESSLER. Mr. President, I rise today as an original 
cosponsor of the Business Development Opportunity Act of 1994. This 
legislation, introduced today by the Senator from Massachusetts, 
Senator Kerry, takes an important step forward in improving business 
and enterprise opportunities for socially and economically 
disadvantaged individuals.
  The bill marks the first significant legislative action on the Small 
Business Administration's [SBA] Minority Business Development/Capital 
Ownership Development [MBD/COD] Program since 1988. As my colleagues 
well know, to say the MBD/COD Program--also known as the 8(a) program--
has not received rave reviews over its lifetime is an extreme 
understatement. Though this program has proven beneficial for many 
disadvantaged firms, these successes have been overshadowed by stories 
of failure, waste, fraud, and abuse. In fact, SBA Administrator Erskine 
Bowles once referred to the 8(a) program as ``a mess.'' The Small 
Business Committee, of which I am the ranking member, recently held two 
hearings on the 8(a) program, both of which explored many of its 
problems.
  The first hearing, held on July 27, 1994, included the General 
Accounting Office [GAO], the SBA inspector general, and the Department 
of Defense inspector general. Witnesses presented the administration's 
views on the program. The second hearing, held on August 9, 1994, 
provided a forum to discuss the SBA's proposed Minority Enterprise 
Development [MED] Program and Senator Kerry's Business Opportunity Act. 
Both of these hearings were instrumental in developing the legislation 
we are introducing today. Through the testimony of witnesses, I was 
able to see more clearly the flaws within the current program. More 
importantly, committee members were able to identify solutions to those 
problems.
  I commend Senator Kerry for his able leadership in this area. I also 
want to thank my colleague for his cooperation in addressing several 
concerns I had with the bill. However, I should note my concern over 
the fact that many questions I submitted in writing to panelists at the 
oversight hearings remain unanswered. I believe these responses could 
play an important role in further developing this reform legislation. 
Upon receipt of those responses, I may consider further amendments to 
fine tune the bill. Failure to address comprehensively the 8(a) program 
flaws that allow waste, fraud, and abuse to continue would be a failure 
to legislate responsibly.
  A significant portion of changes I considered necessary already have 
been made. First, the initial version of the legislation did not 
address the widely acknowledged problem of disparity in award 
distribution. Of the inequitable distribution of awards among firms and 
areas of the country, GAO stated that despite past congressional action 
to correct this problem, ``the concentration of 8(a) contracts * * * is 
a long-standing condition that is continuing.'' GAO continued by noting 
that approximately 1 percent--50 of the 5,382 firms in the program as 
of 1994--received 33 percent of all 8(a) contract dollars. I believe 
the revised version of this bill takes an active approach toward 
correcting this inequity. Section 106 requires the SBA to develop an 
outreach plan aimed at increasing participation among different firms 
located across the Nation. With this provision, it is my hope the new 
Minority Enterprise Development [MED] Program will extend its helpful 
reach beyond beltway firms to those in States like South Dakota.
  Another area in which I expressed concern involves competition 
requirements for 8(a) participants. Again, this was an issue GAO 
identified in the July 27 hearing as a problem within the current 
program. According to GAO, the purpose of maintaining competitiveness 
thresholds and targets is ``to help develop [8(a)] firms and better 
prepare them to compete in the commercial marketplace.'' Exposing 8(a) 
participants to competition plays an extremely important role in 
preparing disadvantaged firms for success once they graduate and enter 
the free market. Unfortunately, the SBA has failed to implement an 
adequate competitive and sole-source mix requirement. In addition, it 
has failed to sufficiently monitor this important developmental tool.
  This bill highlights the importance of the competitive experience for 
8(a) firms. Through discussions with Senator Kerry, he and I developed 
a provision that would create more effective business mix targets 
within the program. Under the revised version of this bill, 
participants eventually would have to conduct no less than 80 percent 
of their total sales outside the 8(a) program. Another provision I 
worked to revise would limit the number of competitive awards that 
derive from 8(a) competitions to 50 percent. In its original form, this 
bill would have allowed 8(a) firms to graduate from the program without 
ever having competed for a contract with non 8(a) firms.

  Another concern I had was the proposed increase in the sole-source 
set-aside from 5 percent to 8 percent. Not only would such a change 
have increased dependence on sole-source contracts and eliminated the 
need for competitive bidding, it also would have placed more emphasis 
on the contracting portion of the MED Program, overshadowing its 
extremely important business development mission. This proposed 
increase also raised concerns over the ability of non 8(a) small 
business to have a fair opportunity to contract with the Federal 
Government. Thus, I am extremely pleased the current form of this bill 
retains the five percent goal.
  The final issue regarding competition requirements of concern to me 
would have allowed the SBA to make exceptions to the $3 million and $5 
million competitiveness thresholds. Though the history of fraud within 
this program leaves me somewhat reluctant to allow any exception, 
section 133 now allows the SBA to waive the competitiveness thresholds 
only under certain circumstances. This provision also would limit any 
such award to a value twice the threshold. By holding the Associate 
Administrator for Minority Enterprise Development accountable, this new 
provision should prevent abuse of such a waiver.
  The last issue I wish to discuss is section 116, establishing 
``Developmental Teaming'' agreements between MED participants and 
graduates. This would allow experienced businesses to pass their 
knowledge on to fledgling firms and developing firms to subcontract a 
portion of 8(a) awards to graduated firms. My hope is that developing 
firms will be able to capitalize on the experience of graduated firms 
and that such relationships will enhance SBA's business development 
assistance. I do have concerns, however. Though existing provisions 
limit participation, I hope this measure will not encourage graduated 
firms to remain dependent on 8(a) awards or developing firms to become 
``front companies.''
  Though this bill is not perfect, I believe it takes a responsible 
approach to making the SBA 8(a) Program more effective. It makes 
changes necessary to aid participants, agencies, and the administration 
alike. I remain committed to making this program more efficient and 
more effective through increased competition and stricter oversight. 
The language contained in this legislation represents months of hard 
work and consideration by members and staff alike.
  I again would like to thank my good friend, Senator Kerry, for his 
hard work and leadership on this issue. As I mentioned, I intend to 
consider additional improvements to this bill as necessary. In order to 
ensure quality policy, it is absolutely necessary to keep this 
legislation open to suggestions and ideas. I look forward to working 
with my colleague as this bill continues through the legislative 
process.
                                 ______

      By Mrs. MURRAY:
  S. 2479. A bill to promote the construction and operation of U.S. 
flag cruise vessels in the United States, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.


              United States cruise vessel development act

 Mrs. MURRAY. Mr. President, today I introduce S. 2479, a bill 
to promote the construction and operation of U.S. flag cruise vessels 
in the United States. This bill is almost identical to a provision that 
Representative Unsoeld successfully incorporated into the Coast Guard 
authorization bill which recently passed in the House. The bill would 
encourage the domestic construction of U.S. cruise ships and create 
more cruise ship activity in our ports. It would allow certain foreign-
built ships into the domestic trade provided that another cruise ship 
is built by the operator in a U.S. shipyard. In addition, the bill 
guarantees that the majority interest in these vessels will be in U.S. 
hands. The bill also gives these ships preference for permits to enter 
National Park Service marine sites.
  This bill is needed immediately to allow the U.S. ports in the 
Pacific Northwest to share in the lucrative and expanding cruise ship 
trade to Alaska. Although the vast majority of the passengers are U.S. 
citizens, Vancouver, Canada, has become the primary port of departure. 
Vancouver is the major economic beneficiary of this cruise ship trade. 
Vancouver saw 263 cruise ship sailings in 1993, which was estimated to 
add $120 million to the local economy in that year alone. All industry 
observers expect this trade to continue to expand for at least another 
decade.
  The bill would change the Passenger Service Act to promote American 
maritime jobs, American shipbuilding jobs and economic opportunities in 
American ports. As the facts stand now, aside from two ocean-going 
cruise ships deployed solely in the Hawaii inter-island trade, every 
major cruise ship is foreign-built and operated. This bill makes it 
clear that none of the vessels allowed under this provision could 
compete with the Hawaiian vessels.
  This bill is a modest attempt to create a domestic cruise ship 
industry and encourage ship building. Over time, I will seek additional 
ways to encourage this industry. Nevertheless, if only a few ships take 
advantage of this bill, its significance will be substantial. It has 
been estimated that 20 homeport calls can pump $7 million into a local 
economy, create 100 jobs, and generate $300,000 in local taxes.
  I urge my colleagues to support me in passing this bill.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2479

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``United States Cruise Vessel 
     Development Act of 1994''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to promote construction and 
     operation of United States flag cruise vessels in the United 
     States.

     SEC. 3. COASTWISE TRANSPORTATION OF PASSENGERS.

       Section 8 of the Act entitled ``An Act to abolish certain 
     fees for official services to American vessels, and to amend 
     the laws relating to shipping commissioners, seamen, and 
     owners of vessels, and for other purposes'', approved June 
     19, 1886 (24 Stat. 81, chapter 421; 46 App. U.S.C. 289), is 
     amended to read as follows:

     ``SEC. 8. COASTWISE TRANSPORTATION OF PASSENGERS.

       ``(a) In General.--Except as otherwise provided by law, a 
     vessel may transport passengers in coastwise trade only if--
       ``(1) the vessel is owned by a person that is--
       ``(A) an individual who is a citizen of the United States; 
     or
       ``(B) a corporation, partnership, or association that is a 
     citizen of the United States under section 2(a) of the 
     Shipping Act, 1916 (46 App. U.S.C. 802(a));
       ``(2) the vessel meets the requirements of section 27 of 
     the Merchant Marine Act, 1920 (46 App. U.S.C. 883); and
       ``(3) for a vessel that is at least 5 net tons, the vessel 
     is issued a certificate of documentation under chapter 121 of 
     title 46, United States Code, with a coastwise endorsement.
       ``(b) Exception for Vessel Under Demise Charter.--
       ``(1) In general.--Subsection (a)(1) does not apply to a 
     cruise vessel operating under a demise charter that--
       ``(A) has a term of at least 18 months; and
       ``(B) is to a person described in subsection (a)(1).
       ``(2) Extension of period for operation.--A cruise vessel 
     authorized to operate in coastwise trade under paragraph (1) 
     based on a demise charter described in paragraph (1) may 
     operate in that coastwise trade during a period following the 
     termination of the charter of not more than 6 months, if the 
     operation--
       ``(A) is approved by the Secretary; and
       ``(B) is in accordance with such terms as may be prescribed 
     by the Secretary for that approval.
       ``(c) Exception for Vessel To Be Reflagged.--
       ``(1) Exception.--Subsection (a)(2) and section 
     12106(a)(2)(A) of title 46, United States Code, do not apply 
     to a cruise vessel if--
       ``(A) the vessel--
       ``(i) is not documented under chapter 121 of title 46, 
     United States Code, on the date of enactment of the United 
     States Cruise Vessel Development Act of 1994; and
       ``(ii) is not less than 5 years old and not more than 15 
     years old on the first date that the vessel is documented 
     under that chapter after that date of enactment; and
       ``(B) the owner or charterer of the vessel has entered into 
     a contract for the construction in the United States of 
     another cruise vessel that has a total berth or stateroom 
     capacity that is at least 80 percent of the capacity of the 
     cruise vessel.
       ``(2) Termination of authority to operate.--Paragraph (1) 
     does not apply to a vessel after the date that is 18 months 
     after the date on which a certificate of documentation with a 
     coastwise endorsement is first issued for the vessel after 
     the date of enactment of the United States Cruise Vessel 
     Development Act of 1994 if, before the end of that 18-month 
     period, the keel of another vessel has not been laid, or 
     another vessel is not at a similar stage of construction, 
     under a contract required for the vessel under paragraph 
     (1)(B).
       ``(3) Extension of period before termination.--The 
     Secretary of Transportation may extend the 18-month period 
     under paragraph (2) for an additional period of not to exceed 
     6 months for good cause shown.
       ``(d) Limitation on Operations.--A person (including a 
     related person with respect to that person) who owns or 
     charters a cruise vessel operating in coastwise trade under 
     subsection (b) or (c) under a coastwise endorsement may not 
     operate any vessel between--
       ``(1) any 2 ports served by another cruise vessel that 
     transports passengers in coastwise trade under subsection (a) 
     on the date the Secretary issues the coastwise endorsement; 
     or
       ``(2) any of the islands of Hawaii.
       ``(e) Penalties.--
       ``(1) Civil penalty.--A person operating a vessel in 
     violation of this section is liable to the United States 
     Government for a civil penalty of $1,000 for each passenger 
     transported in violation of this section.
       ``(2) Forfeiture.--A vessel operated in knowing violation 
     of this section, and its equipment, are liable to seizure by 
     and forfeiture to the United States Government.
       ``(3) Disqualification from coastwise trade.--A person that 
     is required to enter into a construction contract under 
     subsection (c)(1)(B) with respect to a cruise vessel 
     (including any related person with respect to that person) 
     may not own or operate any vessel in coastwise trade after 
     the period applicable under subsection (c)(2) with respect to 
     the cruise vessel, if before the end of that period a keel is 
     not laid and a similar stage of construction is not reached 
     under such a contract.
       ``(f) Definitions.--In this section--
       ``(1) the term `coastwise trade' includes transportation of 
     a passenger between points in the United States, either 
     directly or by way of a foreign port;
       ``(2) the term `cruise vessel' means a vessel that--
       ``(A) is at least 10,000 gross tons (as measured under 
     chapter 143 of title 46, United States Code);
       ``(B) has berth or stateroom accommodations for at least 
     200 passengers; and
       ``(C) is not a ferry; and
       ``(3) the term `related person' means, with respect to a 
     person--
       ``(A) a holding company, subsidiary, affiliate, or 
     association of the person; and
       ``(B) an officer, director, or agent of the person or of an 
     entity referred to in subparagraph (A).''.

     SEC. 4. CONSTRUCTION STANDARDS.

       Section 3309 of title 46, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d)(1) A vessel described in paragraph (3) is deemed to 
     comply with parts B and C of this subtitle.
       ``(2) The Secretary shall issue a certificate of inspection 
     under subsection (a) to a vessel described in paragraph (3).
       ``(3) A vessel is described in this paragraph if--
       ``(A) the vessel meets the standards and conditions for the 
     issuance of a control verification certificate to a foreign 
     vessel embarking passengers in the United States;
       ``(B) a coastwise endorsement is issued for the vessel 
     under section 12106 of this title after the date of enactment 
     of the United States Cruise Vessel Development Act of 1994; 
     and
       ``(C) the vessel is authorized to engage in coastwise trade 
     by reason of subsection (c) of section 8 of the Act entitled 
     `An Act to abolish certain fees for official services to 
     American vessels, and to amend the laws relating to shipping 
     commissioners, seamen, and owners of vessels, and for other 
     purposes', approved June 19, 1886 (24 Stat. 81, chapter 421; 
     46 App. U.S.C. 289).''.

     SEC. 5. CITIZENSHIP FOR PURPOSES OF DOCUMENTATION.

       Section 2 of the Shipping Act, 1916 (46 App. U.S.C. 802), 
     is amended--
       (1) in subsection (a) by inserting ``other than primarily 
     in the transport of passengers,'' after ``the coastwise 
     trade''; and
       (2) by adding at the end the following new subsection:
       ``(e) For purposes of determining citizenship under 
     subsection (a) with respect to operation of a vessel 
     primarily in the transport of passengers in coastwise trade, 
     the controlling interest in a partnership or association that 
     owns the vessel shall not be deemed to be owned by citizens 
     of the United States unless a majority interest in the 
     partnership or association is owned by citizens of the United 
     States free from any trust or fiduciary obligation in favor 
     of any person that is not a citizen of the United States.''.

     SEC. 6. AMENDMENT TO TITLE XI OF THE MERCHANT MARINE ACT, 
                   1936.

       Section 1101(b) of the Merchant Marine Act, 1936 (46 App. 
     U.S.C. 1271(b)) is amended by striking ``passenger cargo'' 
     and inserting ``passenger, cargo,''.

     SEC. 7. PERMITS FOR VESSELS ENTERING UNITS OF NATIONAL PARK 
                   SYSTEM.

       (a) Priority.--Notwithstanding any other provision of law, 
     the Secretary of the Interior may not permit a person to 
     operate a vessel in any unit of the National Park System 
     except in accordance with the following priority:
       (1) First, any person that--
       (A) will operate a vessel that is documented under the laws 
     of, and the home port of which is located in, the United 
     States; or
       (B) holds rights to provide visitor services under section 
     1307(a) of the Alaska National Interest Lands Conservation 
     Act (16 U.S.C. 3197(a)).
       (2) Second, any person that will operate a vessel that--
       (A) is documented under the laws of a foreign country, and
       (B) on the date of the enactment of this Act is permitted 
     to be operated by the person in the unit.
       (3) Third, any person that will operate a vessel other than 
     a vessel described in paragraph (1) or (2).
       (b) Revocation of Permits for Foreign-Documented Vessels.--
     The Secretary of the Interior shall revoke or refuse to renew 
     permission granted by the Secretary for the operation of a 
     vessel documented under the laws of a foreign country in a 
     unit of the National Park System, if--
       (1) a person requests permission to operate a vessel 
     documented under the laws of the United States in that unit; 
     and
       (2) the permission may not be granted because of a limit on 
     the number of permits that may be issued for that operation.
       (c) Restrictions on Revocation of Permits.--The Secretary 
     of the Interior may not revoke or refuse to renew permission 
     under subsection (b) for any person holding rights to provide 
     visitor services under section 1307(a) of the Alaska National 
     Interest Lands Conservation Act (16 U.S.C. 3197(a)).
       (d) Return of Permits.--Any person whose permission to 
     provide visitors services in a unit of the National Park 
     System has been revoked or not renewed under subsection (b) 
     shall have the right of first refusal to a permit to provide 
     visitors services in that unit of the National Park System 
     that becomes available when the conditions described in 
     subsection (b) no longer apply. Such right shall be limited 
     to the number of permits which are revoked or not 
     renewed.
                                 ______

      By Mr. SIMPSON:
  S. 2480. A bill to amend the Immigration and Nationality Act to add 
previsions relating to the treatment of criminal aliens under the 
immigration laws of the United States, and for other purposes.


             CRIMINAL ALIENS AND VISA WAIVER EXTENSION ACT

  Mr. SIMPSON. Mr. President, I rise today to introduce a bill which 
addresses three issues: the expeditious deportation of criminal aliens, 
a 7-day extension of the visa waiver program, and provisions, which for 
the duration of this extension of the visa waiver program, would allow 
certain countries to participate.
  The expeditious deportation of criminal aliens provisions were 
unanimously passed by the Senate in the crime bill, but were stripped 
in conference. This bill would also expand the definition of 
``aggravated felony'' so that aliens convicted of serious crimes can be 
swiftly deported. It would allow the Attorney General to enter a 
deportation order against an alien convicted of a serious crime and 
thereby eliminate the current complex administrative deportation 
process. However, the convicted felon would still be entitled to due 
process through a more limited judicial review of the deportation 
order. It would allow a Federal judge to enter an order of deportation 
against an alien convicted of a serious crime at the time of the 
criminal sentencing. It would restrict certain defenses against 
deportation available to criminal aliens who have been sentenced to 5 
or more years. Current law only restricts these defenses after the 
alien has served 5 or more years. It would expand the use of the 
criminal aliens tracking center funded in this year's crime bill. The 
criminal alien tracking center assists Federal, State, and local law 
enforcement agencies in identifying criminal aliens.
  The bill also extends the current visa waiver program for 7 days. The 
visa waiver program allows tourists from countries whose nationals have 
a proven record of returning home when their visas expire to enter the 
United States without a visa. This vital program frees up the resources 
of U.S. consular offices abroad and facilitates travel to the United 
States for many law-abiding foreign tourists.
  The visa waiver program expires this Saturday. By extending this 
program for 7 days, Congress will be afforded the time necessary to 
pass the 2 year extension contained in another bill, H.R. 783, the 
Immigration and Nationality Technical Corrections Act of 1994.
  Finally, for the duration of this extension, the bill provides a 
probationary status for certain countries to participate in the visa 
waiver program. To qualify for the probationary status, a country must: 
First, have a good record of its nationals returning home when their 
visas expire--even though its record does not quite meet the present 
standards required in the current program; and second, show an 
improvement in its record during its probationary status.
  At present, Ireland is the only country which qualifies for this 
status, however, more may qualify in the future.
  It is not my intention to derail the important visa waiver program. 
And, I do not oppose the opportunity for countries to qualify for this 
new probationary status. Nevertheless, my top legislative priority, one 
which I have worked so very closely with--and have had the cooperation 
of the Attorney General--is the enactment of the criminal alien 
deportation provisions. I intend to diligently continue this effort.
  I urge my colleagues to support this bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2480

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

     SECTION 1. EXPANSION OF DEFINITION OF AGGRAVATED FELONY.

       (a) Expansion of Definition.--Section 101(a)(43) of the 
     Immigration and Nationality Act (8 U.S.C. 1101(a)(43)) is 
     amended to read as follows:
       ``(43) The term `aggravated felony' means--
       ``(A) murder;
       ``(B) illicit trafficking in a controlled substance (as 
     defined in section 102 of the Controlled Substances Act), 
     including a drug trafficking crime (as defined in section 
     924(c) of title 18, United States Code);
       ``(C) illicit trafficking in firearms or destructive 
     devices (as defined in section 921 of title 18, United States 
     Code) or in explosive materials (as defined in section 841(c) 
     of that title);
       ``(D) an offense described in section 1956 of title 18, 
     United States Code (relating to laundering of monetary 
     instruments) or section 1957 of that title (relating to 
     engaging in monetary transactions in property derived from 
     specific unlawful activity) if the amount of the funds 
     exceeded $100,000;
       ``(E) an offense described in--
       ``(i) section 842 (h) or (i) of title 18, United States 
     Code, or section 844 (d), (e), (f), (g), (h), or (i) of that 
     title (relating to explosive materials offenses);
       ``(ii) section 922(g) (1), (2), (3), (4), or (5), (j), (n), 
     (o), (p), or (r) or 924 (b) or (h) of title 18, United States 
     Code (relating to firearms offenses); or
       ``(iii) section 5861 of the Internal Revenue Code of 1986 
     (relating to firearms offenses);
       ``(F) a crime of violence (as defined in section 16 of 
     title 18, United States Code, but not including a purely 
     political offense) for which the term of imprisonment imposed 
     (regardless of any suspension of imprisonment) is at least 5 
     years;
       ``(G) a theft offense (including receipt of stolen 
     property) or burglary offense for which the term of 
     imprisonment imposed (regardless of any suspension of such 
     imprisonment) is at least 33 months;
       ``(H) an offense described in section 875, 876, 877, or 
     1202 of title 18, United States Code (relating to the demand 
     for or receipt of ransom);
       ``(I) an offense described in section 2251, 2251A, or 2252 
     of title 18, United States Code (relating to child 
     pornography);
       ``(J) an offense described in section 1962 of title 18, 
     United States Code (relating to racketeer influenced corrupt 
     organizations) for which a sentence of 5 years' imprisonment 
     or more may be imposed;
       ``(K) an offense that--
       ``(i) relates to the owning, controlling, managing, or 
     supervising of a prostitution business; or
       ``(ii) is described in section 1581, 1582, 1583, 1584, 
     1585, or 1588, of title 18, United States Code (relating to 
     peonage, slavery, and involuntary servitude);
       ``(L) an offense relating to perjury or subornation of 
     perjury if the offense involved causing or threatening to 
     cause physical injury to a person or damage to property;
       ``(M) an offense described in--
       ``(i) section 793 (relating to gathering or transmitting 
     national defense information), 798 (relating to disclosure of 
     classified information), 2153 (relating to sabotage) or 2381 
     or 2382 (relating to treason) of title 18, United States 
     Code; or
       ``(ii) section 601 of the National Security Act of 1947 (50 
     U.S.C. 421) (relating to protecting the identity of 
     undercover intelligence agents);
       ``(N) an offense that--
       ``(i) involves fraud or deceit in which the loss to the 
     victim or victims exceeds $200,000; or
       ``(ii) is described in section 7201 of the Internal Revenue 
     Code of 1986 (relating to tax evasion) in which the revenue 
     loss to the Government exceeds $200,000;
       ``(O) an offense described in section 274(a)(1) of title 
     18, United States Code (relating to alien smuggling) for the 
     purpose of commercial advantage;
       ``(P) an offense described in section 1546(a) of title 18, 
     United States Code (relating to document fraud) which 
     constitutes trafficking in the documents described in such 
     section;
       ``(Q) an offense relating to a failure to appear by a 
     defendant for service of sentence if the underlying offense 
     is punishable by imprisonment for a term of 15 years or more; 
     and
       ``(R) an attempt or conspiracy to commit an offense 
     described in this paragraph.
     The term applies to an offense described in this paragraph 
     whether in violation of Federal or State law and applies to 
     such an offense in violation of the law of a foreign country 
     for which the term of imprisonment was completed within the 
     previous 15 years.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to convictions entered on or after the date of 
     enactment of this Act.

     SEC. 2. DEPORTATION PROCEDURES FOR CERTAIN CRIMINAL ALIENS 
                   WHO ARE NOT PERMANENT RESIDENTS.

       (a) Elimination of Administrative Hearing for Certain 
     Criminal Aliens.--Section 242A of the Immigration and 
     Nationality Act (8 U.S.C. 1252a) is amended by adding at the 
     end the following new subsection:
       ``(f) Deportation of Aliens Who Are Not Permanent 
     Residents.--
       ``(1) Notwithstanding section 242, and subject to paragraph 
     (5), the Attorney General may issue a final order of 
     deportation against any alien described in paragraph (2) whom 
     the Attorney General determines to be deportable under 
     section 241(a)(2)(A)(iii) (relating to conviction of an 
     aggravated felony).
       ``(2) An alien is described in this paragraph if the 
     alien--
       ``(A) was not lawfully admitted for permanent residence at 
     the time that proceedings under this section commenced, or
       ``(B) had permanent resident status on a conditional basis 
     (as described in section 216 or 216A) at the time that 
     proceedings under this section commenced.
       ``(3) No alien described in this section shall be eligible 
     for any relief from deportation that the Attorney General may 
     grant in his discretion.
       ``(4) The Attorney General may not execute any order 
     described in paragraph (1) until 14 calendar days have passed 
     from the date that such order was issued, unless waived by 
     the alien, in order that the alien has an opportunity to 
     apply for judicial review under section 106.
       ``(5) Pending a determination of deportability under this 
     section, the Attorney General shall not release the alien. An 
     order of deportation entered pursuant to this section shall 
     be executed by the Attorney General in accordance with 
     section 243. Proceedings before the Attorney General under 
     this section shall be in accordance with such regulations as 
     the Attorney General shall prescribe and shall include 
     requirements that provide that--
       ``(A) the alien is given reasonable notice of the charges;
       ``(B) the alien has an opportunity to have assistance of 
     counsel at no expense to the government and in a manner that 
     does not unduly delay the proceedings;
       ``(C) the alien has a reasonable opportunity to inspect the 
     evidence and rebut the charges;
       ``(D) the determination of deportability is supported by 
     reasonable, substantial, and probative evidence; and
       ``(E) the final order of deportation is not adjudicated by 
     the same person who issued such order.''.
       (b) Limited Judicial Review.--Section 106 of the 
     Immigration and Nationality Act (8 U.S.C. 1105a) is amended--
       (1) in the first sentence of subsection (a), by inserting 
     ``or pursuant to section 242A'' after ``under section 
     242(b)'';
       (2) in subsection (a)(1) and subsection (a)(3), by 
     inserting ``(including an alien described in section 242A)'' 
     after ``aggravated felony''; and
       (3) by adding at the end the following new subsection:
       ``(d) Notwithstanding subsection (c), a petition for review 
     or for habeas corpus on behalf of an alien described in 
     section 242A(c) may only challenge whether the alien is in 
     fact an alien described in such section, and no court shall 
     have jurisdiction to review any other issue.''.
       (c) Technical Amendments.--Section 242A of the Immigration 
     and Nationality Act (8 U.S.C. 1252a) is amended--
       (1) in subsection (a)--
       (A) by striking ``(a) In General.--'' and inserting the 
     following:
       ``(b) Deportation of Permanent Resident Aliens.--
       ``(1) in general.--''; and
       (B) by inserting in the first sentence ``permanent 
     resident'' after ``correctional facilities for'';
       (2) in subsection (b)--
       (A) by striking ``(b) Implementation.--'' and inserting 
     ``(2) implementation.--''; and
       (B) by striking ``respect to an'' and inserting ``respect 
     to a permanent resident'';
       (3) by striking subsection (c);
       (4) in subsection (d)--
       (A) by striking ``(d) Expedited Proceedings.--(1)'' and 
     inserting ``(3) expedited proceedings.--(A)'';
       (B) by inserting ``permanent resident'' after ``in the case 
     of any''; and
       (C) by striking ``(2)'' and inserting ``(B)'';
       (5) in subsection (e)--
       (A) by striking ``(e) Review.--(1)'' and inserting ``(4) 
     review.--(A)'';
       (B) by striking the second sentence; and
       (C) by striking ``(2)'' and inserting ``(B)'';
       (6) by redesignating subsection (f), as added by subsection 
     (a) of this section, as subsection (c);
       (7) by inserting after the section heading the following 
     new subsection:
       ``(a) Presumption of Deportability.--An alien convicted of 
     an aggravated felony shall be deportable from the United 
     States.''; and
       (8) by amending the section heading to read as follows:


 ``EXPEDITED DEPORTATION OF ALIENS CONVICTED OF COMMITTING AGGRAVATED 
                              FELONIES''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to all aliens against whom deportation 
     proceedings are initiated after the date of enactment of this 
     Act.

     SEC. 3. JUDICIAL DEPORTATION.

       (a) Judicial Deportation.--Section 242A of the Immigration 
     and Nationality Act (8 U.S.C. 1252a) is amended by adding at 
     the end the following new subsection:
       ``(d) Judicial Deportation.--
       ``(1) Authority.--Notwithstanding any other provision of 
     this Act, a United States district court shall have 
     jurisdiction to enter a judicial order of deportation at the 
     time of sentencing against an alien whose criminal conviction 
     causes such alien to be deportable under section 
     241(a)(2)(A)(iii) (relating to conviction of an aggravated 
     felony), if such an order has been requested prior to 
     sentencing by the United States Attorney with the concurrence 
     of the Commissioner.
       ``(2) Procedure.--
       ``(A) The United States Attorney shall provide notice of 
     intent to request judicial deportation promptly after the 
     entry in the record of an adjudication of guilt or guilty 
     plea. Such notice shall be provided to the court, to the 
     Service, to the alien, and to the alien's counsel of record.
       ``(B) Notwithstanding section 242B, the United States 
     Attorney, with the concurrence of the Commissioner, shall 
     file at least 20 days prior to the date set for sentencing a 
     charge containing factual allegations regarding the alienage 
     of the defendant and satisfaction by the defendant of the 
     definition of aggravated felony.
       ``(C) If the court determines that the defendant has 
     presented substantial evidence to establish prima facie 
     eligibility for relief from deportation under section 212(c), 
     the Commissioner shall provide the court with a 
     recommendation and report regarding the alien's eligibility 
     for relief under such section. The court shall either grant 
     or deny the relief sought.
       ``(D)(i) The alien shall have a reasonable opportunity to 
     examine the evidence against him or her, to present evidence 
     on his or her own behalf, and to cross-examine witnesses 
     presented by the Government.
       ``(ii) The court, for the purposes of determining whether 
     to enter an order described in paragraph (1), shall only 
     consider evidence that would be admissible in proceedings 
     conducted pursuant to section 242(b).
       ``(iii) Nothing in this subsection shall limit the 
     information a court of the United States may receive or 
     consider for the purposes of imposing an appropriate 
     sentence.
       ``(iv) The court may order the alien deported if the 
     Attorney General demonstrates by clear and convincing 
     evidence that the alien is deportable under this Act.
       ``(3) Notice, appeal, and execution of judicial order of 
     deportation.--
       ``(A)(i) A judicial order of deportation or denial of such 
     order may be appealed by either party to the court of appeals 
     for the circuit in which the district court is located.
       ``(ii) Except as provided in clause (iii), such appeal 
     shall be considered consistent with the requirements 
     described in section 106.
       ``(iii) Upon execution by the defendant of a valid waiver 
     of the right to appeal the conviction on which the order of 
     deportation is based, the expiration of the period described 
     in section 106(a)(1), or the final dismissal of an appeal 
     from such conviction, the order of deportation shall become 
     final and shall be executed at the end of the prison term in 
     accordance with the terms of the order. If the conviction is 
     reversed on direct appeal, the order entered pursuant to this 
     section shall be void.
       ``(B) As soon as is practicable after entry of a judicial 
     order of deportation, the Commissioner shall provide the 
     defendant with written notice of the order or deportation, 
     which shall designate the defendant's country of choice for 
     deportation and any alternate country pursuant to section 
     243(a).
       ``(4) Denial of judicial order.--Denial of a request for a 
     judicial order of deportation shall not preclude the Attorney 
     General from initiating deportation proceedings pursuant to 
     section 242 upon the same ground of deportability or upon any 
     other ground of deportability provided under section 
     241(a).''.
       (b) Technical Amendment.--The ninth sentence of section 
     242(b) of the Immigration and Nationality Act (8 U.S.C. 
     1252(b)) is amended by striking ``The'' and inserting 
     ``Except as provided in section 242A(d), the''.
       (c) Rule of Construction.--Nothing in this section may be 
     construed to alter the privilege of being represented at no 
     expense to the Government set forth in section 292 of the 
     Immigration and Nationality Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to all aliens whose adjudication of guilt or 
     guilty plea is entered in the record after the date of 
     enactment of this Act.

     SEC. 4. RESTRICTING DEFENSES TO DEPORTATION FOR CERTAIN 
                   CRIMINAL ALIENS.

       (a) Defenses Based on Seven Years of Permanent Residence.--
     The last sentence of section 212(c) of the Immigration and 
     Nationality Act (8 U.S.C. 1182(c)) is amended by striking 
     ``has served for such felony or felonies'' and all that 
     follows through the period and inserting ``has been sentenced 
     for such felony or felonies to a term of imprisonment of at 
     least 5 years, if the time for appealing such conviction or 
     sentence has expired and the sentence has become final. For 
     purposes of this section, the term `sentence' does not 
     include a sentence the execution of which was suspended in 
     its entirety.''.
       (b) Defenses Based on Withholding of Deportation.--Section 
     243(h)(2) of the Immigration and Nationality Act (8 U.S.C. 
     1253(h)(2)) is amended--
       (1) by striking the final sentence and inserting the 
     following new subparagraph:
       ``(E) the alien has been convicted of an aggravated 
     felony.''; and
       (2) by striking ``or'' at the end of subparagraph (C) and 
     inserting ``or'' at the end of subparagraph (D).

     SEC. 5. MISCELLANEOUS AND TECHNICAL CHANGES.

       (a) Form of Deportation Hearings.--The second sentence of 
     section 242(b) of the Immigration and Nationality Act (8 
     U.S.C. 1252(b)) is amended by inserting before the period the 
     following: ``; except that nothing in this subsection shall 
     preclude the Attorney General from authorizing proceedings by 
     electronic or telephonic media, in the discretion of the 
     special inquiry officer, or, where waived or agreed to by the 
     parties, in the absence of the alien.''.
       (b) Construction of Expedited Deportation Requirements.--No 
     amendment made by this Act and nothing in section 242(i) of 
     the Immigration and Nationality Act (8 U.S.C. 1252(i)) shall 
     be construed to create any substantive or procedural right or 
     benefit that is legally enforceable by any party against the 
     United States or its agencies or officers or any other 
     person.

     SEC. 6. CRIMINAL ALIEN TRACKING CENTER.

       (a) Operation.--The Attorney General shall, under the 
     authority of section 242(a)(3)(A) of the Immigration and 
     Nationality Act (8 U.S.C. 1252(a)(3)(A)), operate a criminal 
     alien tracking center.
       (b) Purpose.--The criminal alien tracking center shall be 
     used to assist Federal, State, and local law enforcement 
     agencies in identifying and locating aliens who may be 
     subject to deportation by reason of their conviction of 
     aggravated felonies.

     SEC. 7. EXTENSION OF VISA WAIVER PILOT PROGRAM.

       Section 217(f) of the Immigration and Nationality Act (8 
     U.S.C. 1187(f)) is amended by striking ``ending'' and all 
     that follows through the period and inserting ``ending on 
     October 7, 1994''.

     SEC. 8. CREATION OF PROBATIONARY STATUS FOR PARTICIPANT 
                   COUNTRIES IN THE VISA WAIVER PROGRAM.

       Section 217 of the Immigration and Nationality Act (8 
     U.S.C. 1187) is amended--
       (1) in subsection (a)(2)(B) by inserting before the period 
     ``or is designated as a pilot program country with 
     probationary status under subsection (g)'';
       (2) by adding at the end the following new subsection:
       ``(g) Pilot Program Country With Probationary Status.--
       ``(1) In general.--The Attorney General and the Secretary 
     of State acting jointly may designate any country as a pilot 
     program country with probationary status if it meets the 
     requirements of paragraph (2).
       ``(2) Qualifications.--A country may not be designated as a 
     pilot program country with probationary status unless the 
     following requirements are met:
       ``(A) Nonimmigrant visa refusal rate for previous 2-year 
     period.--The average number of refusals of nonimmigrant 
     visitor visas for nationals of the country during the two 
     previous full fiscal years was less than 3.5 percent of the 
     total number of nonimmigrant visitor visas for nationals of 
     that country which were granted or refused during those 
     years.
       ``(B) Nonimmigrant visa refusal rate for previous year.--
     The number of refusals of nonimmigrant visitor visas for 
     nationals of the country during the previous full fiscal year 
     was less than 3 percent of the total number of nonimmigrant 
     visitor visas for nationals of that country which were 
     granted or refused during that year.
       ``(C) Low exclusions and violations rate for previous 
     year.--The sum of--
       ``(i) the total number of nationals of that country who 
     were excluded from admission or withdrew their application 
     for admission during the preceding fiscal year as a 
     nonimmigrant visitor, and
       ``(ii) the total number of nationals of that country who 
     were admitted as nonimmigrant visitors during the preceding 
     fiscal year and who violated the terms of such admission,
     was less than 1.5 percent of the total number of nationals of 
     that country who applied for admission as nonimmigrant 
     visitors during the preceding fiscal year.
       ``(D) Machine readable passport program.--The government of 
     the country certifies that it has or is in the process of 
     developing a program to issue machine-readable passports to 
     its citizens.
       ``(3) Continuing and subsequent qualifications for pilot 
     program countries with probationary status.--The designation 
     of a country as a pilot program country with probationary 
     status shall terminate if either of the following occurs:
       ``(A) The sum of--
       ``(i) the total number of nationals of that country who 
     were excluded from admission or withdrew their application 
     for admission during the preceding fiscal year as a 
     nonimmigrant visitor, and
       ``(ii) the total number of nationals of that country who 
     were admitted as visitors during the preceding fiscal year 
     and who violated the terms of such admission,
     is more than 2.0 percent of the total number of nationals of 
     that country who applied for admission as nonimmigrant 
     visitors during the preceding fiscal year.
       ``(B) The country is not designated as a pilot program 
     country under subsection (c) within 3 fiscal years of its 
     designation as a pilot program country with probationary 
     status under this subsection.''.
       ``(4) Designation of pilot program countries with 
     probationary status as pilot program countries.--In the case 
     of a country which was a pilot program country with 
     probationary status in the preceding fiscal year, a country 
     may be designated by the Attorney General and the Secretary 
     of State, acting jointly, as a pilot program country under 
     subsection (c) if--
       ``(A) the total of the number of nationals of that country 
     who were excluded from admission or withdrew their 
     application for admission during the preceding fiscal year as 
     a nonimmigrant visitor, and
       ``(B) the total number of nationals of that country who 
     were admitted as nonimmigrant visitors during the preceding 
     fiscal year and who violated the terms of such admission,
     was less than 2 percent of the total number of nationals of 
     that country who applied for admission as nonimmigrant 
     visitors during such preceding fiscal year.''; and
       (3) in subsection (c)(2) by striking ``A country'' and 
     inserting ``Except as provided in subsection (g)(4), a 
     country''.
                                 ______

      By Mr. REID (for himself, Mr. Biden, Mr. Bingaman, Mr. Bradley, 
        Mr. Bryan, Mr. D'Amato, Mr. Dorgan, Mr. Glenn, Mr. Hollings, 
        Mr. Levin, Mr. Pell, Mr. Riegle, Mr. Rockefeller, and Mr. 
        Sasser):
  S.J. Res. 225. A joint resolution to designate February 5, 1995, 
through February 11, 1995, and February 4, 1996, through February 10, 
1996, as ``National Burn Awareness Week''; to the Committee on the 
Judiciary.


                      NATIONAL BURN AWARENESS WEEK

 Mr. REID. Mr. President, I rise today to introduce a joint 
resolution designating the first week in February of both 1995 and 1996 
as National Burn Awareness Week.
  1995 will host the 10th Annual National Burn Awareness Week. The 
purpose is to bring national attention to the serious problem of 
injuries and deaths due to burns. It has been proven that over 75 
percent of all burn injuries and deaths could be prevented if the 
general public were made aware that they can make a difference.
  Ten years ago, a few dedicated individuals dreamed that there would 
be national awareness and recognition of the seriousness of the burn 
problem in the United States. They formed the Burn Awareness Coalition 
and developed a national task force and advisory board composed of 
members of the medical, fire fighting, and general burn prevention 
community. Over the years, they have produced materials used to educate 
the general public about the burn problem, expanded media connections, 
and reached millions of individuals. This has all been done with 
donations from concerned sponsors, with no Government funding.
  The Coalition has come a long way since the first National Burn 
Awareness Week. The response to date has been tremendous. Most of the 
burn centers, emergency rooms, fire fighters, and educators across the 
country are using National Burn Awareness Week materials throughout the 
year to educate the public and save lives.
  There have been many success stories. Senior citizen groups have used 
National Burn Awareness Week materials to force landlords to reduce the 
water temperature in hot water heaters. Children have learned how to 
escape burning homes through what they have learned from fire fighters 
and school teachers. Parents have been told by children to put 
batteries in smoke detectors. Burn centers and fire departments have 
given smoke detectors for birthday presents which have saved lives.
  This important program saves lives and reduces pain and suffering. I 
urge my colleagues to support this resolution which will recognize the 
great benefits of National Burn Awareness Week.

                          ____________________