[Congressional Record Volume 143, Number 118 (Tuesday, September 9, 1997)]
[Senate]
[Pages S8971-S8989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS REAUTHORIZATION ACT OF 1997
Mr. BOND. Mr. President, with sincere thanks to my colleague from
Washington, I ask unanimous consent that the Senate proceed to the
consideration of S. 1139.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 1139) to reauthorize the programs of the Small
Business Administration, and for other purposes.
The PRESIDING OFFICER. Is there objection to the immediate
consideration of the bill?
There being no objection, the Senate proceeded to consider the bill.
Amendment No. 1124
Mr. BOND. Mr. President, on behalf of myself and Senator Kerry, I
have an amendment at the desk, and I ask for its consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Mr. Missouri [Mr. Bond], for himself and
Mr. Kerry, proposes an amendment numbered 1124.
Mr. BOND. Mr. President, I ask unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is located in today's Record under
``Amendments Submitted.'')
Mr. BOND. Mr. President, I rise today in support of S. 1139, the
Small Business Reauthorization Act of 1997. This bill is the product of
the hard work of the members of the Committee on Small Business. In
particular, Senator John Kerry, the committee's ranking member, has
been extremely helpful and supportive in our joint efforts to produce
this legislation.
The Small Business Reauthorization Act of 1997 reauthorizes most of
the credit and noncredit programs at the Small Business Administration.
On June 26, 1997, the committee conducted a markup of this bill and
voted 18 to 0 to report the bill favorably to the full Senate.
In addition to reauthorizing the SBA programs that we are most
familiar with, S. 1139 addresses two significant issues: Federal
contract bundling and the HUBZone Program.
The bundling of Federal Government contracts requirements is a trend
that is increasing in the Federal procurement system. Small business
owners have testified before the Committee on Small Business about the
negative impact contract bundling is having on their ability to bid on
Government contracts. The manager's amendment to the bill includes an
amended version of the contract bundling section that was worked out in
close consultation with Senator Thompson and Senator Glenn, the
chairman and ranking member of the Committee on Governmental Affairs.
The manager's amendment clears up any misunderstanding over what is a
bundled contract. The legislation makes clear that a bundled contract
solicitation is one in which ``two or more procurement requirements for
goods or services previously provided or performed under separate
smaller contracts'' are consolidated into one larger, bundled contract.
This language covers contracts that were previously performed by a
small business and those that were suitable for award to small business
concerns.
The amended contract bundling section builds on the authority of the
Small Business Administration to challenge a Federal agency's decision
to consolidate or bundle two or more contracts into a large contract.
In 1989, Congress gave specific authority to SBA's procurement center
representatives to challenge a decision to bundle multiple contract
actions. Importantly, under the 1989 law, the SBA Administrator was
given the authority to appeal a decision to bundle contract actions
directly to a Cabinet Secretary or agency head if the SBA
representative and the contracting agency are not able to resolve their
differences. The manager's amendment to S. 1139 adds some additional
features and procedures, and today's legislation does not weaken or
displace the fundamental authority of SBA.
I thank both Senator Thompson and Senator Glenn and their staffs for
their cooperation in helping us to address certain issues within the
jurisdiction of the Governmental Affairs Committee relating to the
Federal procurement system and governmentwide acquisition policy. I
believe the contract bundling section included in the manager's
amendment will help our efforts to be fair to small businesses by
limiting contract bundling where it is unnecessary and unjustified.
S. 1139 also includes the full text of S. 208, the HUBZone Act of
1997, in the form in which it was approved by a unanimous 18 to 0
committee vote. This initiative is designed to stimulate economic
development in America's most disadvantaged urban and rural communities
and make welfare to work a reality.
The HUBZone provisions will make it easier for small businesses
located in and hiring employees from economically distressed regions
across the country to obtain Government contracts. The measure will
benefit entire communities by creating meaningful incentives for small
businesses to operate and provide employment within our Nation's most
disadvantaged inner-city neighborhoods and rural areas.
[[Page S8972]]
To be eligible for special Federal contract consideration, a business
must be small, must be located in a historically underutilized business
zone [HUBZone], and must hire not less than 35 percent of its work
force from a HUBZone. For these distressed areas, HUBZones would result
in the immediate infusion of sorely needed capital as more and more
businesses--both startups and existing enterprises--relocate into
HUBZone areas in order to improve their chances of receiving Federal
contract awards.
Importantly, the HUBZone Program will help accomplish an important
objective of welfare reform by providing jobs for individuals who want
to move from welfare to work in the very neighborhoods where many
public aid recipients currently live.
The Small Business Reauthorization Act of 1997 is the culmination of
hearings held by the Committee on Small Business beginning in early
l995, and continuing into June 1996, just prior to the committee
markup. The bill includes new authorization ceilings for the credit
programs, including the 7(a) Business Loan Program, the Small Business
Investment Company [SBIC] Program, and the 504 Certified Development
Company Program. In addition, the bill makes the Microloan Program
permanent, while extending the guaranteed loan pilot for 3 years.
S. 1139 will make important changes in the SBIC Program to permit
manageable program growth while strengthening SBA's oversight of the
program. The bill gives SBA the option to make 5 year leverage
commitments, which would conform the program to typical investment
strategy patterns. In addition, the bill permits SBA to use fees
collected from SBICs for licensing and examinations to offset the
agency's costs to perform these necessary functions.
The bill also sets fees to be paid by borrowers and lenders under the
504 Development Company Program. These fees are paid in lieu of
Congress appropriating public funds to compensate for the Government's
loss exposure as determined by the credit subsidy rate. S. 1139
provides that the fees paid by the borrowers will be reduced should the
credit subsidy rate decline.
The committee's report addresses some of the operational problems
confronting the popular 7(a) Guaranteed Business Loan Program. Since I
became chairman of the Committee on Small Business over 2\1/2\ years
ago, the credit subsidy rate, which determines the level of Government
loss exposure for loans guaranteed under this program, has fluctuated
widely. Information and calculations which determine the subsidy rate
are often not provided to Congress, the Congressional Budget Office
[CBO], or the public. SBA and the Office of Management and Budget must
do a more thorough and accurate job in determining subsidy rate
estimates. With this improved flow of documentation, CBO needs to
become much more engaged early in the process when SBA and OMB make
initial subsidy rate estimates in order that Congress can be assured
that the annual estimates submitted with each fiscal year's budget
request are accurate and reflect that best available data and
assumptions.
S. 1139 recognizes the growing contributions women-owned small
businesses are making in our economy. Testimony before the Committee on
Small Business has highlighted the importance of business loans and
venture capital to ensure the growth of women-owned businesses.
Additionally, testimony and evidence brought to the attention of the
committee also indicates the failure of the Federal Government to meet
the annual 5 percent goal for awarding prime contracts to women-owned
small businesses. In fact, over the past 2 fiscal years, the volume of
these contracts has decreased.
The Small Business Reauthorization Act of 1997 strengthens the role
of key Federal organizations that are supposed to help women business
owners: SBA's Office of Women's Business Ownership, the National
Women's Business Council, and the Interagency Committee on Women's
Business Enterprise.
The bill expands the list of Federal agencies and departments that
serve on the Interagency Committee, and each agency's designee to the
committee is required to report directly to the agency head on the
committee's activities.
The bill seeks to reinvigorate the role of the Women's Business
Council, which is designed to advise Congress and the executive branch,
by involving more closely the Senate and House of Representatives in
the activities of the council. The number of members on the council is
expanded to 14 members from 9 members, with attention placed on rural
as well as urban representation on the council.
Most significantly, the bill adopts the text of S. 888, the Women's
Business Centers Act of 1997, introduced by Senator Domenici and of
which I was a principal cosponsor, along with Senator Kerry. The bill
increases the program authorization level for creating new Women's
Business Centers to $8 million per year from $4 million per year. In
addition, it will permit grantees receiving funds under the program to
remain in the program for 5 years, an increase of two years over the
existing program. In adopting this program, the committee recognized
there are many states with Women's Business Center sites, and the
expanded program is designed to give SBA the flexibility to fund sites
in those states.
The bill recognizes the central role played by SBA's Office of
Women's Business Ownership in overseeing and coordinating Government
support for women-owned small businesses. In addition to overseeing the
expanded Women's Business Centers grant program, the OWBO and staff in
each district and branch office within SBA serve critical roles in
focusing on the problems confronted by women business owners.
The bill recognizes the expanding role of the Small Business
Development Center program by increasing its responsibilities to assist
small businesses to understand better how to deal with regulatory
questions and problems. In addition, the bill provides increases in the
base funding levels for SBDCs and sets a minimum floor for Federal
funding of $500,000 annually for each SBDC.
S. 1139 also extends other important SBA programs, such as SCORE,
which provides counseling opportunities for small businesses by retired
executives, the Small Business Technology Transfer [STTR] Program, the
Small Business Competitiveness Demonstration Program, the Preferred
Surety Bond Program, and SBA's cosponsorship authority.
Mr. President, this is an important bill for all our small businesses
in the United States, and I urge my colleagues' strong support for its
final passage.
Mr. KERRY. Mr. President, I rise in support of the passage of the
Small Business Reauthorization Act of 1997. With the passage of this
bill the Senate will show its support for the very important work of
the U.S. Small Business Administration. Each year SBA programs assist
more than 1 million American small businesses through direct loans,
loan guarantees, business counseling and training, and procurement
assistance. Following a series of hearings this spring, the Committee
on Small Business voted unanimously for the provisions contained in
this bill on earlier this summer. There is much in this bill that we
can all be proud of and happy to support. In addition to the continued
support of such SBA programs as the 504 Community Development Company
and 7(a) Guaranteed Business Loan Programs, the Committee has elevated
the SBA's Microloan Program from demonstration to permanent status and
introduced new provisions that will benefit small businesses: the
HUBZone Act and the Microloan Welfare-to-Work pilot project.
Title I includes the authorization levels for the various programs
being reauthorized in this bill. Title II addresses the Microloan,
Small Business Investment Company, and Certified Development Company
programs. Title III deals with a very important sector of small
businesses, women's business enterprises. Included in this section is a
provision increasing the authorization for women's business centers.
Title IV addresses the Small Business Competitiveness Demonstration
Program and a critical issue for small businesses: procurement
opportunities. Title V contains provisions supporting the Small
Business Technology Transfer (STTR) Program, Small Business Development
Centers, and the pilot preferred surety bond guarantee program.
Finally, Title VI creates a new
[[Page S8973]]
SBA program, the HUBZone Program that extends contracting opportunites
to small businesses located in the poorer areas of our country.
Mr. President, it is a fact that small business owners often are not
served by traditional lending services. SBA operates several programs
designed to fill this lending void and extend assistance to this
critical segment of the American economy. From the Microloan Program
which makes loans only in amounts of less than $25,000 to the 504
program where loan guarantees can be as high as $1,250,000, SBA
programs meet a critical need for our country's entrepreneurs.
Accordingly, I am pleased with the support the committee has shown by
authorizing adequate funding levels for most SBA programs. The 7(a),
504, Small Business Investment Company, Delta and SCORE programs were
all authorized at or above the administration's requests. All of these
programs are critical to the continued effectiveness of the Small
Business Administration and for the future of small business
development in our country.
The SBA's Microloan Program has been a tremendous success since its
inception in 1991. Since its authorization, this program has provided
technical assistance and made over 5,800 loans totaling over $60
million to small businesses in our country. The Microloan Program
authorizes intermediary lenders to provide loans under $25,000 to small
businesses and to provide the business owners with technical assistance
on how to run their business more effectively. There are 103 Microloan
intermediaries located in 46 of our 50 States, including 5 in my home
State of Massachusetts. Forty-three percent of microloans go to women-
owned businesses, 39 percent to minority-owned businesses, and 11
percent to veteran-owned businesses.
The results could not be more stunning. The Microloan Program has
been so successful that there has only been one default of a loan to an
intermediary in the years it has been in operation. Because of its
demonstrated success, the committee chose to elevate the Microloan
Program from demonstration status to a permanent part of the SBA
portfolio of programs and to authorize $28 million per year for each of
the next 3 years for the essential technical assistance grants. After
listening to the testimonies of witnesses on the importance of
technical assistance to microloan borrowers, it is clear that the
support of the direct loan portion of the program requires supporting
the technical assistance portion. The borrowers will not be able to
utilize the direct loans properly without first learning how to manage
their businesses. I am pleased that the Microloan Program is receiving
support from the committee and hope that we will continue to support
the important technical assistance component in the future.
Another section of this bill will assist many small businesses
nationwide. The Women's Business Center provision was originally
introduced by Senator Domenici and cosponsored by Chairman Bond and
myself along with all the Democratic members of the Small Business
Committee. Section 306 makes the Women's Business Center program
permanent, doubling the funding for the program to $8 million dollars
for each of the next 3 years, and extends eligibility for awardees from
3 to 5 years. Women-owned businesses comprise one-third of all American
companies, contribute more than $1.5 trillion dollars to the U.S.
economy and employ more people than Fortune 500 companies. The changes
made by this bill will better enable organizations, such as the Center
for Women & Enterprise, Inc., in Boston, to continue offering the
services that help women-owned businesses thrive.
This bill also reauthorizes the Small Business Technology Transfer
[STTR] Program for 6 more years. In July, I had the opportunity to
cohost with the Small Business Administration a conference on STTR in
Cambridge, MA, with representatives of my State's high-technology small
business companies. These businesspeople expressed their belief that
the STTR Program has been an unqualified success in meeting the goals
established for it by Congress 5 years ago: to ensure that the
federally funded research conducted in America's nonprofit institutions
is given an outlet through small businesses to be turned into
commercial products. That commercialization increases the American job
base, helps our economy, and allows American businesses to compete with
overseas rivals. I was proud to be the sponsor of the original
legislation reauthorizing the STTR Program for 6 more years and I'm
very happy that it has been included in this bill.
Many sections of the Small Business Reauthorization Act establish new
levels of flexibility for the SBA to administer their programs. For
example, investment restrictions on Small Business Investment Companies
[SBIC's] have been relaxed to allow greater investment in the SBICs by
commercial banks. SBIC's will also now be allowed to make quarterly
distributions to its investors. This may not sound important to many
people, but allowing quarterly distributions as opposed to yearly or
biyearly makes it easier for the SBIC's investors to meet their
quarterly tax requirements. Therefore, an investment in an SBIC is a
more attractive investment. Attracting more investment helps the SBIC
help more small businesses.
The committee has given SBA more authority in the selling of
debentures. Instead of requiring a sale every 3 months, SBA now must
sell only every 6 months but can hold sales earlier if adequate demand
exists. This change is also aimed at making the SBA's assets more
attractive to investors and therefore, at attracting more favorable
market prices. Microloan lenders are also given more flexible rules for
their loan loss reserves. After a Microloan lender has been in the
program for at least 5 years, they will be allowed to carry a loan loss
reserve equal to the greater of 10 percent or twice that lender's
historical loan loss rate. This provision frees up more resources for
many lenders to make more loans and provide a greater boost to the
economy. All of these changes have been undertaken in an effort to
allow the SBA to run in a more businesslike, market-responsive manner.
I am pleased to support these changes and look forward to the progress
that SBA will show in the coming years.
A new program authorized through this bill is the Welfare-to-Work
Microloan Pilot Program. I originally introduced this legislation to
build on the successes of the Microloan Program by providing additional
training and support for some of today's welfare recipients so that
they may be tomorrow's business owners. The bill authorizes $4, $5, and
$6 million over each of the next 3 fiscal years for this purpose. At a
hearing on the Microloan Program last month, members of the committee
heard testimony that demonstrated how it is possible for welfare
recipients to become successful entrepreneurs given the proper
technical assistance training. At that same hearing, Mr. John Else of
the Institute of Social and Economic Development in Iowa told the
committee about the remarkable success rate they have with their
Microloan clients. These clients, mostly welfare recipients and other
low-income people, had a 70-percent success rate which is an astounding
contrast to the high failure rate for startup businesses. So the
committee believes the goals of the Welfare-to-Work Pilot Program are
attainable. I believe it is time that we give welfare recipients across
the country the opportunity to succeed by expanding the mission and
scope of the Microloan Program.
Finally, I thank the chairman of the Senate Small Business Committee,
Senator Bond, for his efforts throughout the reauthorization process
that have resulted in a very productive and effective bill. His support
for SBA programs is demonstrated through his willingness to make sure
that the effectiveness of these programs continues by adequately
funding them. A provision included in the reauthorization bill which
was initiated by the chairman and which I cosponsored after the
chairman agreed to certain improvements, is the historically
underutilized business zone or HUBZone bill. Its stated purpose of
assisting companies in economically depressed areas is a worthy goal
that gained widespread support on the committee. Through HUBZones, more
contracting opportunities will be available in the poorest areas of our
country. This is definitely another strike against impoverished regions
and a further opportunity for American small businesses. I am pleased
that is was included in the committee bill.
[[Page S8974]]
Mr. President, our Nation's small businesses are the backbone of our
economy. By supporting the Small Business Reauthorization Act, my
colleagues have demonstrated their support for our Nation's small
businesses and their commitment to our future.
Mr. COVERDELL. Mr. President, as the Senate considers the Small
Business Reauthorization Act of 1997, S. 1139, I rise to express my
thanks to Senator Bond for his leadership on behalf of small business.
As many of us have stated in the Senate, small businesses today face
the daunting task each day of meeting their payrolls, providing a
quality work environment for their employees, and remaining
competitive. All the while, they strive to comply with a myriad of
regulations and struggle to satisfy the tax burden government imposes
upon them.
The Committee on Small Business held a hearing earlier this year
regarding women-owned business. The committee members heard testimony
that, in 1996, women-owned businesses employed 1 out of every 4
workers, totaling 18.5 million employees. Last year, these businesses
accounted for an estimated $2.3 trillion in sales. Increasingly, women
are becoming small business owners and according to the National
Foundation of Women Business Owners, the growth of these women-owned
small businesses outpaced overall business growth nearly 2 to 1. In
Georgia alone, there are 143,045 women-owned businesses, both full and
part-time. Women are a vital force in our economy, and we need to do
more to remove the obstacles that are in their way.
This leads me to think about Carolyn Stradley, a truly remarkable
Georgian from Marietta. She offered testimony before the Small Business
Committee where she described her experience as an entrepreneur. From
humble beginnings, she started and built her own paving business over
many significant obstacles. Unfortunately, chief among these obstacles
was, and continues to be, the Federal Government.
I believe support for women-owned small businesses is important. Such
entrepreneurship has provided a vital means for many to break the cycle
of poverty created and sustained by the welfare state. As we strive for
welfare reform, small businesses and entrepreneurship provide an
important avenue for many.
Mr. President, at this point in my statement, I would like to take
the opportunity also to thank Senator Bond for his cooperation and
sensitivity to the concerns of women-owned small businesses. This
legislation before us authorizes the National Women's Business Council
with the resources it needs to help women entrepreneurs. I was pleased
to have worked with my good friend and fellow Georgian, Senator Max
Cleland, in committee to ensure the Council received this critical
support.
Mr. President, I ask unanimous consent that a letter from Ms. Carolyn
Stradley be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
C&S Paving, Inc.,
Marietta, GA, July 29, 1997.
Hon. Paul Coverdell,
U.S. Senate, Russell Senate Office Building,
Washington, DC.
Dear Senator Coverdell: Thank you so much for your support
of the National Women's Business Council. I truly appreciate
your efforts.
As you know, women entrepreneurs rely on the Council to get
a ``seat at the table'' in the decision making process. The
Council has successfully raised the profile of women business
owners and taken our views to the Senate, House and
Administration. In addition, the Council has helped us build
an infrastructure to support women's entrepreneurship and the
growth of women owned enterprises. Until women business
owners are fully integrated into the process, the role of the
National Women's Business Council is critical to our growth
and survival.
As a result of your advocacy, the Council received an
increased budget authorization for fiscal year 1998. In
addition, the amendment offered by you and Senator Cleland
during the Small Business Committee mark-up of the Small
Business Reauthorization bill granted the Council a research
budget of $200,000. With these additional funds, the Council
can continue to be an effective voice for women entrepreneurs
within the federal government and engage in seriously needed
research on women business owners.
It has been a pleasure working with Morris Goff. We have
greatly appreciated his hard work and counsel throughout this
process. Once again, thank you for your leadership on this
issue. I knew we could count on you.
Sincerely,
Carolyn Stradley,
President.
Mr. COVERDELL. Mr. President, I also thank Chairman Bond for
including S. 925, the Women's Small Business Programs Act of 1997 that
I introduced earlier this year, in the Small Business Reauthorization
Act of 1997. My proposal will expand the pool of resources available to
women-owned small businesses and would allow women business development
centers to enter into contracts with other Federal agencies and
departments to provide specific assistance to small business concerns.
Far too often our Government serves as a roadblock to small business
men and women. Taxes are too high, regulations are too complex, the
costs of doing business are through the roof. It is time we did
something to help our Nation's working women.
Mr. CLELAND. Mr. President, I am proud to offer my support for the
Small Business Administration reauthorization. I am extremely proud to
be a part of the Small Business Committee and, I appreciate the work of
my chairman and the ranking member for their hard work and for working
together to resolve all of the outstanding differences on the details
of the bill. I also thank so many of the staff for their hard work.
Mr. President, there are several things I want to highlight in this
legislation. First, I want to offer my strong support for the Welfare-
to-Work Microloan Pilot Program. Many times, good men and women have
come to this floor in support of programs and opportunities that
aspired to do great things for those who needed it most. Some of those
initiatives have gone on to become great public endeavors. I am proud
to support such an endeavor, one that I believe will inspire and offer
hope to Americans that truly want to break the cycle of poverty and
build a business of their own. This program puts our money where our
mouths are. It provides upfront technical assistance for business
planning, loan application assistance, and development of sound
business skills for people who we can provide a ladder of opportunity
rather than just the same old welfare system. If we want to stand
strong behind the notion that public assistance should be a hand up,
not a hand out, we must pro-actively seek out ways to provide
meaningful job opportunities for welfare recipients. This program is a
step in the right direction.
This program targets traditionally under-served Americans and gives
them tools they can use to, not only take themselves off of the welfare
rolls, but provide job opportunities in areas of the country that are
desperate for job growth. This legislation has been tried and shown
great promise. With 2.8 million Americans moving off of welfare, the
potential for this program is obvious. It's the kind of investment that
can return much, much more than what we put in. Let me add just a few
more points. The average microloan to an individual is $10,800, not a
lot of money by Washington standards, but to the man or woman who just
wants an opportunity to change the direction of their life and that of
their loved ones, it may make all the difference in the world.
I also offer my support for the SBA's Small Business Technology
Transfer Pilot Program. This important program builds on past successes
of further advancing increased commercialization of federally funded
research projects.
Finally, Mr. President, I want to say how proud I am of the National
Women's Business Council and the work that they have done. I am honored
to have worked with Senator Coverdell and thank him for helping to
obtain funding for this important organization and the work that they
do on behalf of women. I further add that Anita Drummond on the
minority staff and Suey Howe on the majority side were particularly
helpful in this effort and should be commended for a job well done.
All in all, there are many provisions in this legislation that I am
proud to have had a part in crafting. I look forward to even more
success on a bipartisan basis from within the committee, from the SBA
and from the small business community in tackling the problems facing
small businesses. I look
[[Page S8975]]
forward to the work ahead. I thank my colleagues and I thank the chair.
Mr. DOMENICI. Mr. President, I submit for the Record a cost estimate
prepared on August 8, 1997 by the Congressional Budget Office for S.
1139, the Small Business Reauthorization Act of 1997, which was
reported on August 19, 1997. The report of the Committee on Small
Business states that the committee does not agree with the CBO estimate
and therefore the committee did not include the CBO estimate in its
report. The Congress and the Budget Committees must rely on independent
cost estimates from the Congressional Budget Office for reported
legislation. From time to time, I too have disagreed with CBO cost
estimates. I ask unanimous consent to print in the Record the official
CBO estimate for S. 1139.
There being no objection, the estimate was ordered to be printed in
the Record, as follows:
Congressional Budget Office Cost Estimate
Small Business Reauthorization Act of 1997
Summary: The bill would authorize appropriations for fiscal
years 1998 through 2000 for the Small Business Administration
(SBA) and would make a number of changes to SBA loan programs
and programs establishing preferences for government
contracting.
Assuming appropriation of the necessary amounts, CBO
estimates that enacting this legislation would result in new
discretionary spending of at least $4.4 billion over the
1998-2002 period. Of this total, $570 million is from amounts
specifically authorized in the bill for SBA programs--
primarily for administrative expenses. The remaining $3.8
billion would be primarily for the subsidy costs of SBA loan
programs.
The costs include $13 million over the 1998-2002 period for
other federal agencies to carry out existing federal
procurement programs reauthorized by the bill. Implementing
the HUBZone program that the bill would create would also
increase costs to other federal agencies. While we cannot
precisely estimate the impact of the new program at this
time, its costs could be at least several million dollars
annually.
CBO estimates that enacting the bill also would result in
an increase in direct spending of $1 million in fiscal year
1998 and $5 million over the 1998-2002 period. Because the
bill would affect direct spending, pay-as-you-go procedures
would apply.
The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform
Act (UMRA) of 1995 and would impose no costs on state, local,
or tribal governments.
Description of the bill's major provisions: Title I would
establish maximum levels for small business loans to be made
by the SBA in 1998, 1999, and 2000. It also would authorize
appropriations for the Service Corps of Retired Executives
(SCORE), technical assistance grants to microloan
recipients, and certain activities of the Small Business
Development Centers (SBDCs). Title I also would authorize
such sums as may be necessary for the disaster loan
program and for administrative expenses necessary to carry
out the Small Business Act and the Small Business
Investment Act.
Title II would establish a Welfare-to-Work Microloan Pilot
Program and would authorize the appropriation of $12 million
of the 1998-2000 period for the SBA to carry out the program.
The title also would convert the direct microloan program
from a demonstration program to a permanent program and would
extend the authorization for the microloan guarantee program
through fiscal year 2000. (The microloan program provides
technical assistance and loans ranging from $100 to $25,000
to very small businesses.) In addition, Title II would modify
several SBA guaranteed loan programs and would allow the SBA
to charge fees to certain borrowers.
Title III would authorize the appropriation of $1.2 million
over the 1998-2000 period for the operations of the
Interagency Committee on Women's Business Enterprise and the
National Women's Business Council. The title would require
the National Women's Business Council to conduct two studies
on federal procurement practices and would authorize the
appropriation of $200,000 to carry out the studies. In
addition, the title would authorize appropriations of $8
million per year for grants to Women's Business Centers.
Title IV would extend the authorization for the Small
Business Competitive Demonstration Program and the Small
Business Participation in Dredging Program through fiscal
year 2000. The title also would modify the Small Business
Procurement Opportunities Program to require federal agencies
to review their attainment of small business participation
goals and the effects of contract bundling on small
businesses.
Title V would extend the Small Business Technology Transfer
(STTR) Program through fiscal year 2003. Title V also would
authorize the appropriation of $2 million in each of fiscal
years 1998 through 2000 for the SBA to assist small
businesses in certain states in securing Small Business
Innovation Research and STTR awards. In addition, this title
would make numerous changes to the SBDC program and would
authorize the appropriation of $460 million over the 1998-
2002 period for the SBDC program.
Title VI would create a new program, to be administered by
the SBA, to provide federal contracting set-aside and
preferences to qualified small businesses located in
designated, economically distressed, urban and rural
communities, or HUBZones. The bill would establish goals for
awarding a percentage of all prime federal government
contracts (beginning at 1 percent in 1999 and increasing to 3
percent in 2003 and subsequent years) to eligible HUBZone
businesses. Title VI would authorize appropriations
totaling $15 million for fiscal years 1998 through 2000
for SBA to carry out this program.
Estimated cost to the Federal Government: The estimated
budgetary impact of implementing most of the bill's
provisions is shown in Table 1. Estimated additional outlays
total $4.4 billion over the 1998-2002 period. Nearly all of
that amount is for SBA spending that is subject to
appropriation. In addition, implementing the bill would
increase other federal agencies' contracting costs to comply
with the HUBZone provisions (Title VI), but CBO cannot
estimate those additional costs with precision at this time.
Basis of estimate: For the purposes of this estimate, CBO
assumes that the bill will be enacted by the end of fiscal
year 1997 and that both the authorized and additional
necessary amounts will be appropriated by the start of each
fiscal year. Outlay estimates are based on historical
spending rates for existing or similar programs.
Spending subject to appropriation
Most of the bill's budgetary effects would come from
reauthorizing existing SBA programs (primarily for the
subsidy costs of direct and guaranteed loans). The estimated
amounts would be subject to appropriation action.
Loan programs
The bill would permit the SBA to make direct loans totaling
$60 million in each of fiscal years 1998 through 2000. It
would permit the SBA to (1) guarantee business loans totaling
about $18 billion in 1998, $20 billion in 1999, and $23
billion in 2000, (2) make direct loans totaling $60 million
in each of fiscal years 1998 through 2000, and (3) make an
indefinite amount of disaster loans over the 1998-2000
period. Table 2 shows the loan levels authorized by the bill
for SBA's business and disaster loans as well as the
estimated subsidy cost and administrative expenses for those
loans.
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF THE SMALL BUSINESS REAUTHORIZATION ACT OF 1997
----------------------------------------------------------------------------------------------------------------
By fiscal years in millions of dollars--
-----------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION\1\
Spending Under Current Law:
Budget Authority\2\........... 873 0 0 0 0 0
Estimated Outlays............. 820 299 65 21 9 0
Proposed Changes:
Specified Authorization Level. 0 151 157 163 103 103
Estimated Authorization Level. 0 1,226 1,274 1,327 13 13
-----------------------------------------------------------------------------
Total Authorization Level... 0 1,377 1,431 1,490 116 116
Estimated Outlays................. 0 871 1,276 1,444 583 189
Spending Under The Bill:
Authorization Level\2\........ 873 1,377 1,431 1,490 116 116
Estimated Outlays............. 820 1,171 1,341 1,465 592 189
CHANGES IN DIRECT SPENDING
Estimated Budget Authority.... 0 1 1 1 1 1
Estimated Outlays................. 0 1 1 1 1 1
----------------------------------------------------------------------------------------------------------------
\1\ All but approximately $15 million of the estimated amounts are for projected spending by the SBA. In
addition to the amounts shown in the table, CBO expects that Title VI (HUBZone program) would impose
significant costs on agencies other than the SBA, but we cannot estimate those costs at this time.
\2\ The 1997 level is the amount appropriated for that year.
[[Page S8976]]
The costs of this legislation fall within budget functions
370 (housing and commerce credit) and 450 (community and
regional development).
TABLE 2.--SBA LOAN LEVELS, SUBSIDY COSTS, AND ADMINISTRATIVE COSTS
----------------------------------------------------------------------------------------------------------------
By fiscal years, in millions of dollars--
----------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
AUTHORIZED LOAN LEVELS
Guaranteed and Direct Business Loans........... 18,200 19,950 22,650 0 0
Disaster Loans................................. 1,543 1,543 1,543 0 0
LOAN SUBSIDY COSTS
Guaranteed and Direct Business Loans:
Estimated Authorization Level.............. 350 380 421 0 0
Estimated Outlays.......................... 225 348 390 133 8
Disaster Loans:
Estiamted Authorization Level.............. 459 459 459 0 0
Estimated Outlays.......................... 230 413 459 230 46
LOAN ADMINISTRATION COSTS
Guaranteed and Direct Business Loans:
Estimated Authorization Level.............. 94 97 100 0 0
Estimated Outlays.......................... 94 97 100 0 0
Disaster Loans:
Estimated Authorization Level.............. 164 169 174 0 0
Estimated Outlays.......................... 164 169 174 0 0
----------------------------------------------------------------------------------------------------------------
The Federal Credit Reform Act of 1990 requires
appropriation of the subsidy costs and administrative costs
for operating credit programs. (The subsidy cost is the
estimated long-term cost to the government of a direct loan
or loan guarantee, calculated on a net present value basis,
excluding administrative costs.) The bill does not provide an
explicit authorization for either the subsidy or
administrative costs for the guaranteed, direct, or disaster
loans.
Based on information from the SBA and on historical data
for these loan programs, CBO estimates that the subsidy costs
of guarantees for the authorized levels of business loans
would be $344 million in 1998, $374 million in 1999, and $415
million in 2000. We estimate that the subsidy costs of the
direct business loans would be $6 million for each of
fiscal years 1998 through 2000. Based on recent
administrative costs for the SBA's loan programs, CBO
estimates that the administrative costs for the business
loan programs would be about $94 million in fiscal year
1998, $97 million in fiscal year 1999, and $100 million in
fiscal year 2000.
The estimated subsidy rates for business loans and
guarantees range from 0.5 percent to 8.1 percent, but most
are at 2 percent or less and the average for this estimate is
1.9 percent. The estimated subsidy rate for disaster loans is
about 30 percent.
Assuming that demand for SBA's disaster loans over the next
three years will be at the average historical rate for the
past six years, CBO projects that the SBA would make disaster
loans totaling about $1.5 billion in each fiscal year over
the 1998-2000 period. CBO estimates that the subsidy costs of
these loans would be $459 million in each fiscal year and
that the administrative costs for the disaster loan program
would be about $164 million in 1998, $169 million in 1999,
and $174 million in 2000.
surety bonds
The bill would authorize the SBA to guarantee up to $2
billion in surety bonds for small businesses in each of the
fiscal years 1998, 1999, and 2000. Such guarantees are not
considered loan guarantees under the definition in the
Federal Credit Reform Act of 1990, and annual appropriations
are required only to cover the net cash losses to the program
within a given year. Based on information from the SBA, CBO
estimates that the authorized level of activity would result
in outlays of $4 million each year over the 1998-2000 period.
government contracting programs
The legislation would modify a number of government
contracting programs administered by the SBA that provide
set-asides or other incentives for small businesses competing
for government procurement contracts. The costs to the SBA to
administer these programs are generally small or
insignificant but the programs result in additional costs to
the Office of Federal Procurement Policy (OFPP) and various
federal agencies.
Small Business Competitive Demonstration Program. The bill
would reauthorize the Small Business Competitive
Demonstration Program through fiscal year 2000. This program
requires 10 federal agencies to establish contracting goals
for small businesses in certain industries. CBO estimates
that extending this program would cost each of the 10
participating agencies and the SBA less than $100,000 a year
to report and compile the required data, assuming
appropriation of the necessary amounts. Hence, we estimate a
total annual cost of about $1 million for each year that the
program is extended.
Small Business Participation in Dredging Program. Based on
information from the Army Corps of Engineers, CBO estimates
that extending the Small Business Participation in Dredging
Program would cost less than $500,000 annually over the 1998-
2000 period.
STTR Progam. The bill would extend this program's
expiration date from 1998 through 2000. The STTR program
requires federal agencies with annual appropriations for
extramural research of more than $1 billion to set aside a
specified percentage of their extramural research budget for
cooperative research between small businesses and a federal
laboratory or nonprofit research center. The costs of the
STTR program to the participating agencies consist primarily
of personnel, overhead, printing, and mailing expenses. Based
on information from the affected agencies, CBO estimates that
the costs of administering the awards would be about $1
million a year over the 1998-2000 period, assuming
appropriation of the necessary amounts.
Small Business Procurement Opportunities Program. The bill
would require federal agencies to follow certain procedures
when bundling procurement contracts. Based on information
from the OFPP, the SBA, and several other federal agencies,
CBO estimates that the government would incur costs of about
$2.5 million in fiscal year 1998 and $1.5 million a year in
1999 and 2000 to follow the procedures established by the
bill. The costs to the federal government would be slightly
higher in fiscal year 1998 because each federal agency would
incur expenses to modify its reporting systems in order to
track information on contract building.
HUBzone Program. The contracting goals and requirements
that would be established by Title VI would apply to
specified federal agencies, which make over 90 percent of all
federal contract obligations (as of 1996). Assuming the
federal agencies would attempt to meet the government-wide
contracting goals establishing in the bill, and assuming
appropriation of the amounts necessary to meet the increase
in costs, implementing the HUBZone program would
significantly increase discretionary spending. Such costs
could total tens of millions of dollars each year, but CBO
cannot estimate such costs precisely. The additional costs
would stem from both additional administrative
responsibilities for the SBA and other federal agencies, and
increased use of sole-source contracting.
Based on information from the SBA, we estimate that
implementing the HUBZone program would cost the SBA $6
million in fiscal year 1998 and $12 million in each
subsequent year, assuming appropriation of the necessary
amounts. Thus, implementing the HUBZone program would result
in new discretionary spending by the SBA of $54 million over
the 1998-2002 period. Of this amount, $15 million is
specifically authorized in the bill for SBA to implement the
program. In addition to the authorized amounts, CBO estimates
that SBA would require another $39 million over the 1998-2002
period to carry out the HUBZone program.
The other federal agencies affected by Title VI would have
additional administrative costs for reviewing contracts,
reprogramming computer systems, and reporting to the SBA.
However, CBO cannot estimate how much those new
responsibilities may increase spending because we do not have
sufficient data to project how many contracts would be
awarded under the HUBZone program or what administrative
resources would be required to carry out the program.
The HUBZone program would raise the government-wide goal
for awarding contracts to small businesses from 20 percent to
23 percent of all prime federal contracts, which would likely
increase the incidence of sole-source contracting. Federal
contract obligations total almost $200 billion a year, of
which about 19 percent is provided through sole-source
contracts. Although CBO cannot project a specific increase in
sole-source contracting, any increase resulting from the
HUBZone program would result in new federal costs because the
lack of competition often results in a higher price for the
product or service. While we cannot estimate precise costs
for the likely increase in sole-source contracting under the
HUBZone program, such costs could total at least several
million dollars annually.
Other programs
The bill would provide specific authorizations of
appropriations for SBDCs, SCORE,
[[Page S8977]]
the Welfare-to-Work Microloan Program, and various women's
business programs. CBO estimates that these programs would
result in spending by the SBA of $555 million over the next
five years.
In addition, the bill would authorize such sums as may be
necessary to cover the SBA's costs of carrying out the Small
Business Act and the Small Business Investment Company Act.
CBO estimates that the general administrative costs to carry
out these acts would be $149 million in fiscal year 1998,
$154 million in fiscal year 1999, and $158 million in fiscal
year 2000, assuming appropriation of the necessary amounts.
(The estimate of general administrative costs excludes the
program-specific administrative expenses for business and
disaster loans.)
Direct spending
The bill would authorize the SBA to spend without further
authorization the Small Business Investment Company (SBIC)
examination fees currently collected by the agency but not
available for spending unless authorized in advance in an
appropriation act. Based on information from the SBA, CBO
estimates that the agency would collect and spend about $1
million annually in examination fees.
Pay-as-you-go considerations: Section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985 sets up pay-
as-you-go procedures for legislation affecting direct
spending or receipts through 2007. CBO estimates that
enacting the bill would increase direct spending by $1
million a year because SBA would be able to spend SBIC
examination fees without appropriation action.
Estimated impact on State, local, and tribal governments:
The bill contains no intergovernmental mandates as defined in
UMRA, and would not impose any costs on State, local, or
tribal governments. The bill would, however, authorize
additional grant funds for State and local governments. It
would authorize $2 million annually (for fiscal years 1998
through 2000) to create a pilot program that would provide
grants to eligible states to assist small businesses located
in the state. The bill would also authorize an increase in
funding of $5 million in fiscal year 1999 and $10 million
thereafter for the Small Business Development Center Program.
The program provides grants to state and local governments,
public and private institutions of higher education, and
state-chartered development corporations to establish and
operate small business development centers.
Estimated impact on the private sector: This bill would
impose no new private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Rachel Forward and
Lisa Daley. Impact on State, Local, and Tribal Governments:
Marc Nicole.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Mr. BOND. Mr. President, I ask unanimous consent that the amendment
be agreed to.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 1124) was agreed to.
Ms. SNOWE. Mr. President, I rise today to support a critically
important piece of legislation affecting small businesses across our
Nation--S. 1139, the Small Business Reauthorization Act of 1997. I
would like to begin by thanking Chairman Bond and ranking member Kerry
for their leadership and perseverance on this bill. We would not be
here today considering S. 1139 if it were not for their dedication to
the small business community.
As a Senator from Maine, a State whose future economic well-being is
dependent on small business enterprise, I am extremely supportive of
the role the Small Business Administration [SBA] plays in promoting
small business development and growth. The Small Business Committee, of
which I am a member, held five hearings this past year on SBA's
finance, noncredit, and Microloan programs. As a direct result of
testimony given during those hearings by small businesses, the SBA and
various industry organizations, the committee drafted a comprehensive
bill that reauthorizes and improves upon even the most successful of
SBA's programs.
I am particularly pleased that the committee accepted an amendment
that I offered regarding the Small Business Development Center [SBDC]
Program. The SBDC Program is a public-private partnership that
leverages Federal dollars with State, local, university, and private
resources to provide one-stop management and technical assistance to
small businesses.
My amendment increases the SBDC minimum Federal contribution so that
no State will receive less than $500,000. This will ensure that small
State SBDC's will continue to be able to provide quality business
management assistance, which is essential to the future successes of
America's small businesses. If entrepreneurs are not sufficiently
prepared with the financial, managerial, and technical knowledge needed
to own and operate a business, then our Nation's future businesses have
failed before they have been given the opportunity to succeed.
One of the many reasons I support the SBDC program is because it
serves as a successful example of what can be achieved when the private
sector, the educational community and Federal, State and local
governments work together. In fact, the SBDC program generates more in
tax revenues that it costs to run the program itself. For example, in
my home State of Maine, $6.15 in new Federal, State and local tax
revenues is generated for every $1.00 invested in our state's SBDC.
Nationally, the return is $4.53.
While my amendment provides only a modest funding increase at the
Federal level, the additional resources provided to a small State like
Maine will have a disproportionately large and positive impact on
Maine's economy. And I thank Chairman Bond for including my amendment
in the Small Business Reauthorization Act.
I would also like to thank Chairman Bond for his leadership on S.
208, the HUBZone Act of 1997, because the revitalization and community
development of economically distressed regions with significant
unemployment is a critical challenge confronting this Congress. It is
essential that we discover ways to stimulate business and residential
activity within these economically and socially distressed communities,
which is why I believe that it is so important that the HUBZone Act was
incorporated into the Small Business Reauthorization Act.
The HUBZone Act will provide Federal contracting opportunities to
small businesses located in historically impoverished urban and rural
areas known as HUBZones. This bill will create a new class of small
businesses that employ at least 35 percent of its workforce from a
HUBZone eligible for Federal Government contract preferences. The
purpose of the bill is to create incentives for small businesses to
locate and operate in our country's most economically disadvantaged
inner-cities and rural counties. At the same time, these businesses
will foster job creation and community development in these
economically underutilized areas.
In Maine, Washington County with an extremely high unemployment rate
of 12.5 percent--7.6 percent above the national average--will qualify
as a HUBZone. Qualified small businesses located in this county will
not only receive Federal contracting set-asides but also will play a
vital role in revitalizing this distressed area by encouraging job
creation.
Additionally, because of an amendment Senator Enzi and I offered,
both Aroostook and Somerset Counties with a 10.4 percent and 9 percent
unemployment, respectively, will qualify as rural HUBZones. The Enzi-
Snowe amendment establishes that economically distressed regions with
extremely high unemployment rates will quality as HUBZones and receive
much-needed relief. We must take action to stimulate business activity
within these areas that face high unemployment rates and I believe that
the HUBZone Act of 1997 does just this.
The Small Business Reauthorization Act also includes another
important piece of legislation, the Welfare-to-Work Microloan Pilot
Program Act of 1997, of which I am an original cosponsor. This
innovative pilot program will provide grants to community-based
organizations, known as Microloan intermediaries, to help welfare
recipients start their own small businesses. These intermediaries will
provide technical assistance to potential small entrepreneurs who are
on public assistance.
This program is unique because it will provide up-front business
assistance before a participant receives a loan. The future
entrepreneur will learn basic business skills--how to develop a
business plan, start a business and apply for small loans.
In addition to this technical assistance, program participants will
receive assistance with the high cost of child care and transportation,
both of which are directly related to program participation. If a
mother is unable to afford to put her child in day care or if she does
not have the money to get to the
[[Page S8978]]
training sessions, she simply will not go.
The combination of business training and child care and
transportation assistance will assure greater success for the
participants receiving public assistance. This approach has been
successfully piloted in several state programs. Iowa, for example, has
a success rate of 70 percent in contrast to a national small business
failure rate average of 80 percent. I believe that these programs are
successful because they target the true cause of the high failure rate
of small businesses--lack of business education.
Small businesses are playing an increasingly important role in
America's future prosperity, and they should play a vital role in any
effort to revitalize our urban and rural communities and to solve the
long-term problem of getting individuals off, and keeping them off,
public assistance. This is exactly why I am a cosponsor of the HUBZone
Act and an original cosponsor of the Welfare-to-Work Microloan Pilot
Program. And, that is why I strongly support the Small Business
Reauthorization Act of 1997 and encourage my distinguished colleagues
to join me in supporting this critically important bill.
Mr. WELLSTONE. Mr. President, I am extremely pleased that we are
passing this bill to reauthorize Small Business Administration
programs. I commend Senators Bond and Kerry, the chairman and ranking
member of the Small Business Committee, respectively, for their work.
It is an excellent bill, providing adequate loan-guaranty authorization
levels for SBA's two principle credit programs--the 7(a) and the 504
programs. The bill also expands and makes permanent the microloan
demonstration program, which is extremely important. All three programs
are popular and successful in Minnesota. Our committee held a number of
hearings this year to prepare for this reauthorization bill, and as
usual we have worked in a productive, bipartisan way.
Our committee passed a very good bill, highlights of which I will
mention momentarily. I would first like to note, however, two items
which I am grateful could be included in the managers' amendment. The
first is a provision clarifying SBA's policy regarding collateral in
the 504 Program.
The 504 Program is an excellent program. It operates through
collaboration between certified development companies (CDCs), private
lenders and small business borrowers. 504 loans are for larger projects
than SBA's 7(a) guaranteed loans. They generally are for property,
plant and equipment purchases. It is the only SBA program with job-
creation and economic development as its explicit primary objective. I
am proud to point out that Minnesota CDCs made 359 loans worth $122
million last year, tops in the nation for the third or fourth year in a
row.
I appreciate steps that were taken by SBA officials in a recent
policy guidance on this matter of collateral. That policy guidance
assures certified development companies that collateral is only one
factor evaluated in the credit determination of a small business in the
program. Furthermore, the guidance establishes that collateral in
addition to a subordinate lien position on the property being financed
will be required only on a case-by-case basis as determined by the
Administrator.
The provision now included in this bill relating to collateral simply
codifies that SBA policy guidance in statute. I thank the bill's
managers for including the provision at my request in their amendment.
As I mentioned to my colleagues on the committee during our markup of
the bill, it is occasionally necessary for Small Business Committee to
save SBA from itself when it comes to policy proposals concerning its
loan programs. Not too many years ago, SBA wanted to eliminate all
subsidy and appropriation for the 7(a) program. We on the committee and
in Congress were right in preventing them from doing so.
Subsidy rate questions in the 504 Program remain somewhat unresolved.
The simple fact is that demand for the 504 program has been down
significantly this year. It is down even after we discount for the
burst of activity last September, just before new fees went into
effect, putting many deals that normally would have been done this year
into last year's volume. I am pleased to say that the program's subsidy
rate, which a witness from Minnesota told our committee earlier this
year is ``out of whack,'' is now finally being seriously examined by
the Administration despite the existence for some time of evidence that
it has been based on methodology or calculations that keep the subsidy
rate too high. That matters because it appears that the new fees which
we have had to impose on borrowers and lenders, required by the high
subsidy rate, suppressed demand for the program, exactly as both the
Chairman and I said we feared might happen.
That is the main reason for the amendment, which would keep
collateral for 504 deals valued at market value. That is rather than at
liquidation value, as had at one point been suggested by some within
the Administration. The amendment does not change current SBA policy.
Rather, it prevents a suggested change, which in my view would
certainly have led to a further weakening of the 504 loan guaranty
program.
Here is the issue. Under current SBA policy, in a project valued at
$1 million, 90 percent of the value of a 504 project can be financed by
a CDC and a bank together in the form of loans. The remaining 10
percent is required to be provided as equity by the assisted small
business. Loan collateral is limited ``generally to the assets being
financed.'' This allows the program to offer attractive, 90-percent
loan-to-value financing. It seems like a good deal, and it is, for
borrowers and lenders.
But it's also a good deal for taxpayers because this program creates
jobs with no appropriation. That's why I want to keep that policy
working the way it is. If we had allowed the Administration to change
that policy, by switching to a ``liquidation value'' approach for
collateral, as had been suggested by some within the Administration,
then assisted small business people could have been required to provide
up to $300,000 of their own equity as collateral, on top of the
$100,000 equity already required. When demand for this program already
is being suppressed by high fees brought on by high subsidy rates--
whether justified or not--this new blow to the program could have
seriously harmed it. The National Association of Development Companies,
which represents CDC's around the country, told some of us it felt the
program could have been ``destroyed.'' So I am pleased we could address
this concern in the bill.
The second provision I would like to mention immediately is a matter
upon which I am pleased to have collaborated with Senator Abraham. The
managers also have included this provision in their amendment. It will
allow microloan intermediaries to use up to 25 percent of the grants
provided to them by SBA for the provision of technical assistance to
provide such technical assistance to prospective borrowers--that is,
not only small enterprises which are already borrowers, but to
prospective borrowers, as well. I appreciate the inclusion of this
provision, which allows needed flexibility on the part of microloan
intermediaries. Minnesota has four microlending intermediaries, and
staff from those organizations have told me how important it is that
they be allowed sometimes to counsel and assist potential entrepreneurs
prior to the time they are ready to become an actual borrower. In fact
the very purpose of the technical assistance during this period is to
allow the businessperson to reach the point in his or her business
where credit is needed and he or she might become a borrower in the
program.
The bill reauthorizes most SBA programs for an additional 3 years.
The loan guaranty authorization levels are adequate in my judgment. In
the case of both the 7(a) and 504 program, they exceed industry
requests. The loan authorization level for the microloan program meets
the Administration's request, although I had hoped to achieve a higher
level for technical assistance grant funding. As I mentioned before,
the microloan program nonetheless is expanded and made permanent in
this bill, steps which are justified by the program's very beneficial
performance. As an original cosponsor of the legislation which first
created the program, I am proud that Minnesotans who utilize it are
among the nation's leaders. The very small firms which receive very
[[Page S8979]]
small loans through the microloan program often have a big impact in
their communities.
The bill will allow SBA programs to continue to be among the most
popular and effective business programs operated by the federal
government. I know they are popular and well used in Minnesota, where I
am also proud to point out that we have one of the finest SBA district
offices in the country, if not the finest. The bill also addresses a
concern which many small businesses across the country have brought to
our attention. That is the issue of Federal Government bundling of
procurement contracts. The bill takes steps to help ensure that small
firms can compete for Federal contracts, and that the Government's use
of bundling is strictly warranted when it occurs.
Mr. President, I hope the House of Representatives also will act soon
on their version of the bill, and I look forward to voting for passage
of a conference report so the bill can be sent to the President. Thank
you.
Mr. BOND. Mr. President, I ask unanimous consent that the bill be
considered read a third time and passed, as amended; that the motion to
reconsider be laid upon the table; and that any statements relating to
the bill appear at the appropriate place in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (S. 1139), as amended, was read the third time and passed,
as follows:
S. 1139
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Business Reauthorization Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Effective date.
TITLE I--AUTHORIZATIONS
Sec. 101. Authorizations.
TITLE II--FINANCIAL ASSISTANCE
Subtitle A--Microloan Program
Sec. 201. Microloan program.
Sec. 202. Welfare-to-work microloan pilot program.
Subtitle B--Small Business Investment Company Program
Sec. 211. 5-year commitments for SBICs at option of Administrator.
Sec. 212. Fees.
Sec. 213. Small business investment company program reform.
Sec. 214. Examination fees.
Subtitle C--Certified Development Company Program
Sec. 221. Loans for plant acquisition, construction, conversion, and
expansion.
Sec. 222. Development company debentures.
Sec. 223. Premier certified lenders program.
TITLE III--WOMEN'S BUSINESS ENTERPRISES
Sec. 301. Interagency committee participation.
Sec. 302. Reports.
Sec. 303. Council duties.
Sec. 304. Council membership.
Sec. 305. Authorization of appropriations.
Sec. 306. Women's business centers.
Sec. 307. Office of women's business ownership.
Sec. 308. National Women's Business Council procurement project.
TITLE IV--COMPETITIVENESS PROGRAM AND PROCUREMENT OPPORTUNITIES
Subtitle A--Small Business Competitiveness Program
Sec. 401. Program term.
Sec. 402. Monitoring agency performance.
Sec. 403. Reports to Congress.
Sec. 404. Small business participation in dredging.
Subtitle B--Small Business Procurement Opportunities Program
Sec. 411. Contract bundling.
Sec. 412. Definition of contract bundling.
Sec. 413. Assessing proposed contract bundling.
Sec. 414. Reporting of bundled contract opportunities.
Sec. 415. Evaluating subcontract participation in awarding contracts.
Sec. 416. Improved notice of subcontracting opportunities.
Sec. 417. Deadlines for issuance of regulations.
TITLE V--MISCELLANEOUS PROVISIONS
Sec. 501. Small business technology transfer program.
Sec. 502. Small business development centers.
Sec. 503. Pilot preferred surety bond guarantee program extension.
Sec. 504. Extension of cosponsorship authority.
Sec. 505. Asset sales.
Sec. 506. Small business export promotion.
Sec. 507. Defense Loan and Technical Assistance program.
TITLE VI--HUBZONE PROGRAM
Sec. 601. Short title.
Sec. 602. Historically underutilized business zones.
Sec. 603. Technical and conforming amendments to the Small Business
Act.
Sec. 604. Other technical and conforming amendments.
Sec. 605. Regulations.
Sec. 606. Report.
Sec. 607. Authorization of appropriations.
SEC. 2. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on October 1, 1997.
TITLE I--AUTHORIZATIONS
SEC. 101. AUTHORIZATIONS.
Section 20 of the Small Business Act (15 U.S.C. 631 note)
is amended by striking subsections (c) through (q) and
inserting the following:
``(c) Fiscal Year 1998.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 1998:
``(A) For the programs authorized by this Act, the
Administration is authorized to make--
``(i) $28,000,000 in technical assistance grants, as
provided in section 7(m); and
``(ii) $60,000,000 in loans, as provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administration is authorized to make $17,040,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(i) $13,000,000,000 in general business loans as provided
in section 7(a);
``(ii) $3,000,000,000 in financings as provided in section
7(a)(13) of this Act and section 504 of the Small Business
Investment Act of 1958;
``(iii) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(iv) $40,000,000 in loans as provided in section 7(m).
``(C) For the programs authorized by title III of the Small
Business Investment Act of 1958, the Administration is
authorized to make--
``(i) $600,000,000 in purchases of participating
securities; and
``(ii) $500,000,000 in guarantees of debentures.
``(D) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to section 411(a)(3) of that Act.
``(E) The Administration is authorized to make grants or
enter into cooperative agreements--
``(i) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $4,000,000; and
``(ii) for activities of small business development centers
pursuant to section 21(c)(3)(G), $15,000,000, to remain
available until expended.
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to the
Administration for fiscal year 1998 such sums as may be
necessary to carry out this Act, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small Business
Investment Act of 1958, including salaries and expenses of
the Administration.
``(B) Notwithstanding subparagraph (A), for fiscal year
1998--
``(i) no funds are authorized to be provided to carry out
the loan program authorized by section 7(a)(21) except by
transfer from another Federal department or agency to the
Administration, unless the program level authorized for
general business loans under subsection (l)(2)(A) is fully
funded; and
``(ii) the Administration may not approve loans on behalf
of the Administration or on behalf of any other department or
agency, by contract or otherwise, under terms and conditions
other than those specifically authorized under this Act or
the Small Business Investment Act of 1958, except that it may
approve loans under section 7(a)(21) of this Act in gross
amounts of not more than $1,250,000.
``(d) Fiscal Year 1999.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 1999:
``(A) For the programs authorized by this Act, the
Administration is authorized to make--
``(i) $28,000,000 in technical assistance grants as
provided in section 7(m); and
``(ii) $60,000,000 in loans, as provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administration is authorized to make $18,540,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(i) $14,000,000,000 in general business loans as provided
in section 7(a);
``(ii) $3,500,000,000 in financings as provided in section
7(a)(13) of this Act and section 504 of the Small Business
Investment Act of 1958;
``(iii) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(iv) $40,000,000 in loans as provided in section 7(m).
``(C) For the programs authorized by title III of the Small
Business Investment Act of
[[Page S8980]]
1958, the Administration is authorized to make--
``(i) $700,000,000 in purchases of participating
securities; and
``(ii) $650,000,000 in guarantees of debentures.
``(D) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to section 411(a)(3) of that Act.
``(E) The Administration is authorized to make grants or
enter cooperative agreements--
``(i) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $4,500,000; and
``(ii) for activities of small business development centers
pursuant to section 21(c)(3)(G), not to exceed $15,000,000,
to remain available until expended.
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to the
Administration for fiscal year 1999 such sums as may be
necessary to carry out this Act, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small Business
Investment Act of 1958, including salaries and expenses of
the Administration.
``(B) Notwithstanding subparagraph (A), for fiscal year
1999--
``(i) no funds are authorized to be provided to carry out
the loan program authorized by section 7(a)(21) except by
transfer from another Federal department or agency to the
Administration, unless the program level authorized for
general business loans under subsection (n)(2)(A) is fully
funded; and
``(ii) the Administration may not approve loans on behalf
of the Administration or on behalf of any other department or
agency, by contract or otherwise, under terms and conditions
other than those specifically authorized under this Act or
the Small Business Investment Act of 1958, except that it may
approve loans under section 7(a)(21) of this Act in gross
amounts of not more than $1,250,000.
``(e) Fiscal Year 2000.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2000:
``(A) For the programs authorized by this Act, the
Administration is authorized to make--
``(i) $28,000,000 in technical assistance grants as
provided in section 7(m); and
``(ii) $60,000,000 in direct loans, as provided in section
7(m).
``(B) For the programs authorized by this Act, the
Administration is authorized to make $21,040,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(i) $15,500,000,000 in general business loans as provided
in section 7(a);
``(ii) $4,500,000,000 in financings as provided in section
7(a)(13) of this Act and section 504 of the Small Business
Investment Act of 1958;
``(iii) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(iv) $40,000,000 in loans as provided in section 7(m).
``(C) For the programs authorized by title III of the Small
Business Investment Act of 1958, the Administration is
authorized to make--
``(i) $850,000,000 in purchases of participating
securities; and
``(ii) $700,000,000 in guarantees of debentures.
``(D) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to section 411(a)(3) of that Act.
``(E) The Administration is authorized to make grants or
enter cooperative agreements--
``(i) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $5,000,000; and
``(ii) for activities of small business development centers
pursuant to section 21(c)(3)(G), not to exceed $15,000,000,
to remain available until expended.
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to the
Administration for fiscal year 2000 such sums as may be
necessary to carry out this Act, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small Business
Investment Act of 1958, including salaries and expenses of
the Administration.
``(B) Notwithstanding subparagraph (A), for fiscal year
2000--
``(i) no funds are authorized to be provided to carry out
the loan program authorized by section 7(a)(21) except by
transfer from another Federal department or agency to the
Administration, unless the program level authorized for
general business loans under subsection (p)(2)(A) is fully
funded; and
``(ii) the Administration may not approve loans on behalf
of the Administration or on behalf of any other department or
agency, by contract or otherwise, under terms and conditions
other than those specifically authorized under this Act or
the Small Business Investment Act of 1958, except that it may
approve loans under section 7(a)(21) of this Act in gross
amounts of not more than $1,250,000.''.
TITLE II--FINANCIAL ASSISTANCE
Subtitle A--Microloan Program
SEC. 201. MICROLOAN PROGRAM.
(a) Loan Limits.--Section 7(m)(3)(C) of the Small Business
Act (15 U.S.C. 636(m)(3)(C)) is amended by striking
``$2,500,000'' and inserting ``$3,500,000''.
(b) Loan Loss Reserve Fund.--Section 7(m)(3)(D) of the
Small Business Act (15 U.S.C. 636(m)(3)(D)) is amended by
striking clauses (i) and (ii), and inserting the following:
``(i) during the initial 5 years of the intermediary's
participation in the program under this subsection, at a
level equal to not more than 15 percent of the outstanding
balance of the notes receivable owed to the intermediary; and
``(ii) in each year of participation thereafter, at a level
equal to not more than the greater of--
``(I) 2 times an amount reflecting the total losses of the
intermediary as a result of participation in the program
under this subsection, as determined by the Administrator on
a case-by-case basis; or
``(II) 10 percent of the outstanding balance of the notes
receivable owed to the intermediary.''.
(c) Authorization of Appropriations.--Section 7(m) of the
Small Business Act (15 U.S.C. 636(m)) is amended--
(1) in the subsection heading, by striking
``Demonstration'';
(2) by striking ``Demonstration'' each place that term
appears;
(3) by striking ``demonstration'' each place that term
appears; and
(4) in paragraph (12), by striking ``during fiscal years
1995 through 1997'' and inserting ``during fiscal years 1998
through 2000''.
(d) Technical Assistance Grants.--Section 7(m)(4)(E) of the
Small Business Act (15 U.S.C. 636(m)(4)(E)) is amended--
(1) by inserting ``(i)'' before ``Each intermediary'';
(2) by striking ``15'' and inserting ``25'';
(3) by adding at the end of the paragraph ``(ii) The
intermediary may expend up to 25 percent of the funds
received under paragraph (1)(B)(ii) to enter into third party
contracts for the provision of technical assistance''.
SEC. 202. WELFARE-TO-WORK MICROLOAN PILOT PROGRAM.
(a) Program Establishment.--Section 7(m) of the Small
Business Act (15 U.S.C. 636(m)) is amended--
(1) in paragraph (1)(A)--
(A) in clause (ii), by striking ``and'' at the end;
(B) in clause (iii), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(iv) to establish a welfare-to-work microloan pilot
program, which shall be administered by the Administration,
in order to--
``(I) test the feasibility of supplementing the technical
assistance grants provided under clauses (ii) and (iii) of
subparagraph (B) to individuals who are receiving assistance
under the State program funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et seq.), or under any
comparable State-funded means-tested program of assistance
for low-income individuals, in order to adequately assist
those individuals in--
``(aa) establishing small businesses; and
``(bb) eliminating their dependence on that assistance;
``(II) permit the grants described in subclause (I) to be
used to provide intensive management, marketing and technical
assistance as well as to pay or reimburse a portion of child
care and transportation costs of individuals described in
subclause (I) who become microborrowers;
``(III) eliminate barriers to microborrowers in
establishing child care businesses; and
``(IV) evaluate the effectiveness of assistance provided
under this clause in helping individuals described in
subclause (I) to eliminate their dependence on assistance
described in that subclause and become employed in their own
business;'';
(2) in paragraph (4), by adding at the end the following:
``(F) Supplemental grants.--
``(i) In general.--In addition to grants under
subparagraphs (A) and (C) and paragraph (5), the
Administration may select from participating intermediaries
and recipients of grants under paragraph (5), not more than
20 entities in fiscal year 1998, 25 entities in fiscal year
1999, and 30 entities in fiscal year 2000, each of whom may
receive annually a supplemental grant in an amount not to
exceed $200,000 for the purpose of providing additional
technical assistance and related services to borrowers who
are receiving assistance described in paragraph (1)(A)(iv)(I)
at the time they initially apply for assistance under the
program.
``(ii) Inapplicability of contribution requirements.--The
contribution requirements of subparagraphs (B) and (C)(i)(II)
do not apply to any grant made under this subparagraph.
``(iii) Child care and transportation costs.--Any grant
made under this subparagraph may be used to pay or reimburse
a portion of the costs of child care and transportation
incurred by a borrower under the welfare-to-work microloan
pilot program under paragraph (1)(A)(iv).'';
(3) in paragraph (6), by adding at the end the following:
``(E) Establishment of child care establishments.--In
addition to other eligible small business concerns, borrowers
under
[[Page S8981]]
any program under this subsection may include individuals who
will use the loan proceeds to establish for-profit or
nonprofit child care establishments.'';
(4) in paragraph (9)--
(A) by striking the paragraph designation and paragraph
heading and inserting the following:
``(9) Grants for management, marketing, technical
assistance, and related services.--''; and
(B) by adding at the end the following:
``(C) Welfare-to-work microloan pilot program.--Of amounts
made available to carry out the welfare-to-work microloan
pilot program under paragraph (1)(A)(iv) in any fiscal year,
the Administration may use not more than 5 percent to provide
technical assistance, either directly or through contractors,
to welfare-to-work microloan pilot program grantees, to
ensure that, as grantees, they have the knowledge, skills,
and understanding of microlending and welfare-to-work
transition, and other related issues, to operate a successful
welfare-to-work microloan pilot program.''; and
(5) by adding at the end the following:
``(13) Evaluation of welfare-to-work microloan pilot
program.--On January 31, 1999, and annually thereafter, the
Administration shall submit to the Committees on Small
Business of the House of Representatives and the Senate a
report on the welfare-to-work microloan pilot program
authorized under paragraph (1)(A)(iv), which report shall
include, with respect to the preceding fiscal year, an
analysis of the progress and effectiveness of the program
during that fiscal year, and data relating to--
``(A) the number and location of each grantee under the
program;
``(B) the amount of each grant;
``(C) the number of individuals who received assistance
under each grant, including separate data relating to--
``(i) the number of individuals who received training;
``(ii) the number of individuals who received
transportation assistance; and
``(iii) the number of individuals who received child care
assistance (including the number of children assisted);
``(D) the type and amount of loan and grant assistance
received by borrowers under the program;
``(E) the number of businesses that were started with
assistance provided under the program that are operational
and the number of jobs created by each business;
``(F) the number of individuals receiving training under
the program who, after receiving assistance under the
program--
``(i) are employed in their own businesses; and
``(ii) are not receiving public assistance for themselves
or their children;
``(G) whether and to what extent each grant was used to
defray the transportation and child care costs of borrowers;
and
``(H) any recommendations for legislative changes to
improve program operations.''.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the welfare-to-work microloan
pilot program under section 7(m)(1)(A)(iv) of the Small
Business Act (as added by this section)--
(1) $3,000,000 for fiscal year 1998;
(2) $4,000,000 for fiscal year 1999; and
(3) $5,000,000 for fiscal year 2000.
Subtitle B--Small Business Investment Company Program
SEC. 211. 5-YEAR COMMITMENTS FOR SBICS AT OPTION OF
ADMINISTRATOR.
Section 20(a)(2) of the Small Business Act (15 U.S.C. 631
note) is amended in the last sentence by striking ``the
following fiscal year'' and inserting ``any 1 or more of the
4 subsequent fiscal years''.
SEC. 212. FEES.
Section 301 of the Small Business Investment Act of 1958
(15 U.S.C. 681) is amended by adding the following:
``(e) Fees.--
``(1) In general.--The Administration may prescribe fees to
be paid by each applicant for a license to operate as a small
business investment company under this Act.
``(2) Use of amounts.--Amounts collected pursuant to this
subsection shall be--
``(A) deposited in the account for salaries and expenses of
the Administration; and
``(B) available without further appropriation solely to
cover contracting and other administrative costs related to
licensing.''.
SEC. 213. SMALL BUSINESS INVESTMENT COMPANY PROGRAM REFORM.
(a) Bank Investments.--Section 302(b) of the Small Business
Investment Act of 1958 (15 U.S.C. 682(b)) is amended by
striking ``1956,'' and all that follows before the period and
inserting the following: ``1956, any national bank, or any
member bank of the Federal Reserve System or nonmember
insured bank to the extent permitted under applicable State
law, may invest in any 1 or more small business investment
companies, or in any entity established to invest solely in
small business investment companies, except that in no event
shall the total amount of such investments of any such bank
exceed 5 percent of the capital and surplus of the bank''.
(b) Indexing for Leverage.--Section 303 of the Small
Business Investment Act of 1958 (15 U.S.C. 683) is amended--
(1) in subsection (b)--
(A) in paragraph (2), by adding at the end the following:
``(D)(i) The dollar amounts in subparagraphs (A), (B), and
(C) shall be adjusted annually to reflect increases in the
Consumer Price Index established by the Bureau of Labor
Statistics of the Department of Labor.
``(ii) The initial adjustments made under this subparagraph
after the date of enactment of the Small Business
Reauthorization Act of 1997 shall reflect only increases from
March 31, 1993.''; and
(B) by striking paragraph (4) and inserting the following:
``(4) Maximum aggregate amount of leverage.--
``(A) In general.--Except as provided in subparagraph (B),
the aggregate amount of outstanding leverage issued to any
company or companies that are commonly controlled (as
determined by the Administrator) may not exceed $90,000,000,
as adjusted annually for increases in the Consumer Price
Index.
``(B) Exceptions.--The Administrator may, on a case-by-case
basis--
``(i) approve an amount of leverage that exceeds the amount
described in subparagraph (A) for companies under common
control; and
``(ii) impose such additional terms and conditions as the
Administrator determines to be appropriate to minimize the
risk of loss to the Administration in the event of default.
``(C) Applicability of other provisions.--Any leverage that
is issued to a company or companies commonly controlled in an
amount that exceeds $90,000,000, whether as a result of an
increase in the Consumer Price Index or a decision of the
Administrator, is subject to subsection (d).''; and
(2) by striking subsection (d) and inserting the following:
``(d) Required Certifications.--
``(1) In general.--The Administrator shall require each
licensee, as a condition of approval of an application for
leverage, to certify in writing--
``(A) for licensees with leverage less than or equal to
$90,000,000, that not less than 20 percent of the licensee's
aggregate dollar amount of financings will be provided to
smaller enterprises; and
``(B) for licensees with leverage in excess of $90,000,000,
that, in addition to satisfying the requirements of
subparagraph (A), 100 percent of the licensee's aggregate
dollar amount of financings made in whole or in part with
leverage in excess of $90,000,000 will be provided to smaller
enterprises as defined in section 103(12).
``(2) Multiple licensees.--Multiple licensees under common
control (as determined by the Administrator) shall be
considered to be a single licensee for purposes of
determining both the applicability of and compliance with the
investment percentage requirements of this subsection.''.
(c) Tax Distributions.--Section 303(g)(8) of the Small
Business Investment Act of 1958 (15 U.S.C. 683(g)(8)) is
amended by adding at the end the following: ``A company may
also elect to make a distribution under this paragraph at the
end of any calendar quarter based on a quarterly estimate of
the maximum tax liability. If a company makes 1 or more
quarterly distributions for a calendar year, and the
aggregate amount of those distributions exceeds the maximum
amount that the company could have distributed based on a
single annual computation, any subsequent distribution by the
company under this paragraph shall be reduced by an amount
equal to the excess amount distributed.''.
(d) Leverage Fee.--Section 303(i) of the Small Business
Investment Act of 1958 (15 U.S.C. 683(i)) is amended by
striking ``, payable upon'' and all that follows before the
period and inserting the following: ``in the following
manner: 1 percent upon the date on which the Administration
enters into any commitment for such leverage with the
licensee, and the balance of 2 percent (or 3 percent if no
commitment has been entered into by the Administration) on
the date on which the leverage is drawn by the licensee''.
(e) Periodic Issuance of Guarantees and Trust
Certificates.--Section 320 of the Small Business Investment
Act of 1958 (15 U.S.C. 687m) is amended by striking ``three
months'' and inserting ``6 months''.
SEC. 214. EXAMINATION FEES.
Section 310(b) of the Small Business Investment Act of 1958
(15 U.S.C. 687b(b)) is amended by inserting after the first
sentence the following: ``Fees collected under this
subsection shall be deposited in the account for salaries and
expenses of the Administration, and shall be available
without further appropriation solely to cover the costs of
examinations and other program oversight activities.''.
Subtitle C--Certified Development Company Program
SEC. 221. LOANS FOR PLANT ACQUISITION, CONSTRUCTION,
CONVERSION, AND EXPANSION.
Section 502 of the Small Business Investment Act of 1958
(15 U.S.C. 696) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) The proceeds of any such loan shall be used solely by
the borrower to assist 1 or more identifiable small business
concerns and for a sound business purpose approved by the
Administration.'';
(2) in paragraph (3), by adding at the end the following:
``(D) Seller financing.--Seller-provided financing may be
used to meet the requirements of subparagraph (B), if the
seller subordinates the interest of the seller in the
property to the debenture guaranteed by the Administration.
[[Page S8982]]
``(E) Collateral requirements.--Adequacy of collateral
provided by the small business shall be one factor evaluated
in the credit determination. Collateral provided by the small
business concern generally will include a subordinate lien
position on the property being financed, and additional
collateral may be required in a case-by-case basis, as
determined by the Administration.''; and
(3) by adding at the end the following:
``(5) Except as provided in paragraph (4), not to exceed 25
percent of the project may be leased by the assisted small
business, if--
``(A) the assisted small business is required to occupy
permanently and use not less than 75 percent of the space in
the project after the execution of any leases authorized in
this paragraph; and
``(B) each tenant is engaged a business that enhances the
operations of the assisted small business.''.
SEC. 222. DEVELOPMENT COMPANY DEBENTURES.
Section 503 of the Small Business Investment Act of 1958
(15 U.S.C. 697) is amended--
(1) in subsection (b)(7), by striking subparagraph (A) and
inserting the following:
``(A) assesses and collects a fee, which shall be payable
by the borrower, in an amount established annually by the
Administration, which amount shall not exceed the lesser of--
``(i) 0.9375 percent per year of the outstanding balance of
the loan; and
``(ii) the minimum amount necessary to reduce the cost (as
that term is defined in section 502 of the Federal Credit
Reform Act of 1990) to the Administration of purchasing and
guaranteeing debentures under this Act to zero; and''; and
(2) in subsection (f), by striking ``1997'' and inserting
``2000''.
SEC. 223. PREMIER CERTIFIED LENDERS PROGRAM.
(a) In General.--Section 508 of the Small Business
Investment Act of 1958 (15 U.S.C. 697e) is amended--
(1) in subsection (a), by striking ``not more than 15'';
(2) in subsection (b)(2), by striking subparagraphs (A) and
(B) and inserting the following:
``(A) is an active certified development company in good
standing and has been an active participant in the accredited
lenders program during the entire 12-month period preceding
the date on which the company submits an application under
paragraph (1), except that the Administration may waive this
requirement if the company is qualified to participate in the
accredited lenders program;
``(B) has a history of--
``(i) submitting to the Administration adequately analyzed
debenture guarantee application packages; and
``(ii) of properly closing section 504 loans and servicing
its loan portfolio; and'';
(3) by striking subsection (c) and inserting the following:
``(c) Loss Reserve.--
``(1) Establishment.--A company designated as a premier
certified lender shall establish a loss reserve for financing
approved pursuant to this section.
``(2) Amount.--The amount of the loss reserve shall be
based upon the greater of--
``(A) the historic loss rate on debentures issued by such
company; or
``(B) 10 percent of the amount of the company's exposure as
determined under subsection (b)(2)(C).
``(3) Assets.--The loss reserve shall be comprised of any
combination of the following types of assets:
``(A) segregated funds on deposit in an account or accounts
with a federally insured depository institution or
institutions selected by the company, subject to a collateral
assignment in favor of, and in a format acceptable to, the
Administration; or
``(B) irrevocable letter or letters of credit, with a
collateral assignment in favor of, and a commercially
reasonable format acceptable to, the Administration.
``(4) Contributions.--The company shall make contributions
to the loss reserve, either cash or letters of credit as
provided above, in the following amounts and at the following
intervals:
``(A) 50 percent when a debenture is closed;
``(B) 25 percent additional not later than 1 year after a
debenture is closed; and
``(C) 25 percent additional not later than 2 years after a
debenture is closed.
``(5) Replenishment.--If a loss has been sustained by the
Administration, any portion of the loss reserve, and other
funds provided by the premier company as necessary, may be
used to reimburse the Administration for the company's 10
percent share of the loss as provided in subsection
(b)(2)(C). If the company utilizes the reserve, within 30
days it shall replace an equivalent amount of funds.
``(6) Disbursements.--The Administration shall allow the
certified development company to withdraw from the loss
reserve amounts attributable to any debenture which has been
repaid.'';
(4) in subsection (f), by striking ``State or local'' and
inserting ``certified'';
(5) in subsection (g), by striking the subsection heading
and inserting the following:
``(g) Effect of Suspension or Revocation.--'';
(6) by striking subsection (h) and inserting the following:
``(h) Program Goals.--Each certified development company
participating in the program under this section shall
establish a goal of processing a minimum of not less than 50
percent of the loan applications for assistance under section
504 pursuant to the program authorized under this section.'';
and
(7) in subsection (i), by striking ``other lenders'' and
inserting ``other lenders, specifically comparing default
rates and recovery rates on liquidations''.
(b) Regulations.--The Administrator of the Small Business
Administration shall--
(1) not later than 120 days after the date of enactment of
this Act, promulgate regulations to carry out the amendments
made by subsection (a); and
(2) not later than 150 days after the date of enactment of
this Act, issue program guidelines and fully implement the
amendments made by subsection (a).
(c) Program Extension.--Section 217(b) of the Small
Business Reauthorization and Amendments Act of 1994 (15
U.S.C. 697e note) is amended by striking ``October 1, 1997''
and inserting ``October 1, 2000''.
TITLE III--WOMEN'S BUSINESS ENTERPRISES
SEC. 301. INTERAGENCY COMMITTEE PARTICIPATION.
Section 403 of the Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended--
(1) in subsection (a)(1), by adding at the end the
following:
``(K) The Department of Education.
``(L) The Environmental Protection Agency.
``(M) The Department of Energy.
``(N) The Administrator of the Office of Procurement
Policy.
``(O) The National Aeronautics and Space Administration.'';
(2) in subsection (a)(2)(A)--
(A) by striking ``and Amendments Act of 1994'' and
inserting ``Act of 1997''; and
(B) by inserting before the final period ``, and who shall
report directly to the head of the agency on the status of
the activities of the Interagency Committee'';
(3) in subsection (a)(2)(B), by inserting before the final
period the following: ``and shall report directly to the
Administrator on the status of the activities on the
Interagency Committee and shall serve as the Interagency
Committee Liaison to the National Women's Business Council
established under section 405''; and
(4) in subsection (b), by striking ``and Amendments Act of
1994'' and inserting ``Act of 1997''.
SEC. 302. REPORTS.
Section 404 of the Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended--
(1) by inserting ``, through the Small Business
Administration,'' after ``transmit'';
(2) by striking paragraph (1) and redesignating paragraphs
(2) through (4) as paragraphs (1) through (3), respectively;
and
(3) in paragraph (1), as redesignated, by inserting before
the semicolon the following: ``, including a status report on
the progress of the Interagency Committee in meeting its
responsibilities and duties under section 402(a)''.
SEC. 303. COUNCIL DUTIES.
Section 406 of the Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended--
(1) in subsection (c), by inserting after ``Administrator''
the following: ``(through the Assistant Administrator for the
Office of Women's Business Ownership)''; and
(2) in subsection (d)--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(6) submit to the President and to the Committee on Small
Business of the Senate and the Committee on Small Business of
the House of Representatives, an annual report containing--
``(A) a detailed description of the activities of the
council, including a status report on the Council's progress
toward meeting its duties outlined in subsections (a) and (d)
of section 406;
``(B) the findings, conclusions, and recommendations of the
Council; and
``(C) the Council's recommendations for such legislation
and administrative actions as the Council considers
appropriate to promote the development of small business
concerns owned and controlled by women.
``(e) Submission of Reports.--The annual report required by
subsection (d) shall be submitted not later than 90 days
after the end of each fiscal year.''.
SEC. 304. COUNCIL MEMBERSHIP.
Section 407 of the Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended--
(1) in subsection (a), by striking ``and Amendments Act of
1994'' and inserting ``Act of 1997'';
(2) in subsection (b)--
(A) by striking ``and Amendments Act of 1994'' and
inserting ``Act of 1997'';
(B) by inserting after ``the Administrator shall'' the
following: ``, after receiving the recommendations of the
Chair and the Ranking Member of the Minority of the
Committees on Small Business of the House of Representatives
and the Senate, '';
(C) by striking ``9'' and inserting ``14'';
(D) in paragraph (1), by striking ``2'' and inserting
``3'';
(E) in paragraph (2)--
(i) by striking ``2'' and inserting ``3''; and
(ii) by striking ``and'' at the end;
[[Page S8983]]
(F) in paragraph (3)--
(i) by striking ``5'' and inserting ``6'';
(ii) by striking ``national''; and
(iii) by striking the period at the end and inserting the
following: ``, including representatives of Women's Business
Center sites; and''; and
(G) by adding at the end the following:
``(4) 2 shall be representatives of businesses or
educational institutions having an interest in women's
entrepreneurship.''; and
(3) in subsection (c), by inserting ``(including both urban
and rural areas)'' after ``geographic''.
SEC. 305. AUTHORIZATION OF APPROPRIATIONS.
Section 409 of the Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended--
(1) by striking ``1995 through 1997'' and inserting ``1998
through 2000''; and
(2) by striking ``$350,000'' and inserting ``$400,000''.
SEC. 306. WOMEN'S BUSINESS CENTERS.
(a) In General.--Section 29 of the Small Business Act (15
U.S.C. 656) is amended to read as follows:
``SEC. 29. WOMEN'S BUSINESS CENTERS.
``(a) Definitions.--In this section--
``(1) the term `small business concern owned and controlled
by women', either startup or existing, includes any small
business concern--
``(A) that is not less than 51 percent owned by 1 or more
women; and
``(B) the management and daily business operations of which
are controlled by 1 or more women; and
``(2) the term `women's business center site' means the
location of--
``(A) a women's business center; or
``(B) 1 or more women's business centers, established in
conjunction with another women's business center in another
location within a State or region--
``(i) that reach a distinct population that would otherwise
not be served;
``(ii) whose services are targeted to women; and
``(iii) whose scope, function, and activities are similar
to those of the primary women's business center or centers in
conjunction with which it was established.
``(b) Authority.--The Administration may provide financial
assistance to private organizations to conduct 5-year
projects for the benefit of small business concerns owned and
controlled by women. The projects shall provide--
``(1) financial assistance, including training and
counseling in how to apply for and secure business credit and
investment capital, preparing and presenting financial
statements, and managing cash flow and other financial
operations of a business concern;
``(2) management assistance, including training and
counseling in how to plan, organize, staff, direct, and
control each major activity and function of a small business
concern; and
``(3) marketing assistance, including training and
counseling in identifying and segmenting domestic and
international market opportunities, preparing and executing
marketing plans, developing pricing strategies, locating
contract opportunities, negotiating contracts, and utilizing
varying public relations and advertising techniques.
``(c) Conditions of Participation.--
``(1) Non-federal contributions.--As a condition of
receiving financial assistance authorized by this section,
the recipient organization shall agree to obtain, after its
application has been approved and notice of award has been
issued, cash contributions from non-Federal sources as
follows:
``(A) in the first, second, and third years, 1 non-Federal
dollar for each 2 Federal dollars;
``(B) in the fourth year, 1 non-Federal dollar for each
Federal dollar; and
``(C) in the fifth year, 2 non-Federal dollars for each
Federal dollar.
``(2) Form of non-federal contributions.--Not more than
one-half of the non-Federal sector matching assistance may be
in the form of in-kind contributions which are budget line
items only, including but not limited to office equipment and
office space.
``(3) Form of federal contributions.--The financial
assistance authorized pursuant to this section may be made by
grant, contract, or cooperative agreement and may contain
such provision, as necessary, to provide for payments in lump
sum or installments, and in advance or by way of
reimbursement. The Administration may disburse up to 25
percent of each year's Federal share awarded to a recipient
organization after notice of the award has been issued and
before the non-Federal sector matching funds are obtained.
``(4) Failure to obtain private funding.--If any recipient
of assistance fails to obtain the required non-Federal
contribution during any project, it shall not be eligible
thereafter for advance disbursements pursuant to paragraph
(3) during the remainder of that project, or for any other
project for which it is or may be funded by the
Administration, and prior to approving assistance to such
organization for any other projects, the Administration shall
specifically determine whether the Administration believes
that the recipient will be able to obtain the requisite non-
Federal funding and enter a written finding setting forth the
reasons for making such determination.
``(d) Contract Authority.--A women's business center may
enter into a contract with a Federal department or agency to
provide specific assistance to women and other underserved
small business concerns. Performance of such contract should
not hinder the women's business centers in carrying out the
terms of the grant received by the women's business centers
from the Administration.
``(e) Submission of 5-Year Plan.--Each applicant
organization initially shall submit a 5-year plan to the
Administration on proposed fundraising and training
activities, and a recipient organization may receive
financial assistance under this program for a maximum of 5
years per women's business center site.
``(f) Criteria.--The Administration shall evaluate and rank
applicants in accordance with predetermined selection
criteria that shall be stated in terms of relative
importance. Such criteria and their relative importance shall
be made publicly available and stated in each solicitation
for applications made by the Administration. The criteria
shall include--
``(1) the experience of the applicant in conducting
programs or ongoing efforts designed to impart or upgrade the
business skills of women business owners or potential owners;
``(2) the present ability of the applicant to commence a
project within a minimum amount of time;
``(3) the ability of the applicant to provide training and
services to a representative number of women who are both
socially and economically disadvantaged; and
``(4) the location for the women's business center site
proposed by the applicant.
``(g) Office of Women's Business Ownership.--There is
established within the Administration an Office of Women's
Business Ownership, which shall be responsible for the
administration of the Administration's programs for the
development of women's business enterprises (as that term is
defined in section 408 of the Women's Business Ownership Act
of 1988). The Office of Women's Business Ownership shall be
administered by an Assistant Administrator, who shall be
appointed by the Administrator.
``(h) Report.--The Administrator shall prepare and submit
an annual report to the Committees on Small Business of the
House of Representatives and the Senate on the effectiveness
of all projects conducted under the authority of this
section. Such report shall provide information concerning--
``(1) the number of individuals receiving assistance;
``(2) the number of startup business concerns formed;
``(3) the gross receipts of assisted concerns;
``(4) increases or decreases in profits of assisted
concerns; and
``(5) the employment increases or decreases of assisted
concerns.
``(i) Authorization of Appropriations.--There are
authorized to be appropriated $8,000,000 per year to carry
out the projects authorized by this section. Amounts
appropriated pursuant to this subsection are to be used
exclusively for grant awards and not for costs incurred by
the Administration for the management and administration of
the program. Notwithstanding any other provision of law, the
Administration may use such expedited acquisition methods as
it deems appropriate, through the Assistant Administrator of
the Office of Women's Business Ownership, to achieve the
purposes of this section, except that the Administration
shall ensure that all eligible sources are provided a
reasonable opportunity to submit proposals.''.
(b) Applicability.--Any organization conducting a 3-year
project under section 29 of the Small Business Act (15 U.S.C.
656) on the day before the date of enactment of this Act, may
extend the term of that project to a total term of 5 years
and receive financial assistance in accordance with section
29(c) of the Small Business Act (as amended by this title)
subject to procedures established by the Administrator in
coordination with the Office of Women's Business Ownership
established under section 29 of the Small Business Act (15
U.S.C. 656) (as amended by this title).
SEC. 307. OFFICE OF WOMEN'S BUSINESS OWNERSHIP.
Section 29 of the Small Business Act (15 U.S.C. 656) is
amended by adding at the end the following:
``(i) Assistant Administrator for the Office of Women's
Business Ownership.--
``(1) Qualification.--The Assistant Administrator for the
Office of Women's Business Ownership (hereafter in this
section referred to as the `Assistant Administrator') shall
serve without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service, and without regard to chapter 51 and subchapter III
of chapter 53 of title 5, United States Code, relating to
classification and General Schedule pay rates, but at a rate
of pay not to exceed the maximum of pay payable for a
position at GS-17 of the General Schedule.
``(2) Responsibilities and duties.--
``(A) Responsibilities.--The responsibilities of the
Assistant Administrator shall be to administer the programs
and services of the Office of Women's Business Ownership
established to assist women entrepreneurs in the areas of--
``(i) starting and operating a small business;
``(ii) development of management and technical skills;
``(iii) seeking Federal procurement opportunities; and
``(iv) increasing the opportunity for access to capital.
``(B) Duties.--Duties of the position of the Assistant
Administrator shall include--
``(i) administering and managing the Women's Business
Centers program;
[[Page S8984]]
``(ii) recommending the annual administrative and program
budgets for the Office of Women's Business Ownership
(including the budget for the Women's Business Centers);
``(iii) establishing appropriate funding levels therefore;
``(iv) reviewing the annual budgets submitted by each
applicant for the Women's Business Center program;
``(v) selecting applicants to participate in this program;
``(vi) implementing this section;
``(vii) maintaining a clearinghouse to provide for the
dissemination and exchange of information between Women's
Business Centers;
``(viii) conducting program examinations of recipients of
grants under this section;
``(ix) serving as the vice chairperson of the Interagency
Committee on Women's Business Enterprise;
``(x) serving as liaison for the National Women's Business
Council; and
``(xi) advising the Administrator on appointments to the
Women's Business Council.
``(3) Consultation requirements.--In carrying out the
responsibilities and duties described in this subsection, the
Assistant Administrator shall confer with and seek the advice
of the Administration officials in areas served by the
Women's Business Centers.
``(j) Program Examination.--
``(1) In general.--Not later than 180 days after the date
of enactment of this subsection, the Administration shall
develop and implement an annual programmatic and financial
examination of each Women's Business Center established
pursuant to this section.
``(2) Extension of contracts.--In extending or renewing a
contract with a Women's Business Center, the Administration
shall consider the results of the examination conducted
pursuant to paragraph (1).
``(k) Contract Authority.--The authority of the
Administration to enter into contracts shall be in effect for
each fiscal year only to the extent and in the amounts as are
provided in advance in appropriations Acts. After the
Administration has entered a contract, either as a grant or a
cooperative agreement, with any applicant under this section,
it shall not suspend, terminate, or fail to renew or extend
any such contract unless the Administration provides the
applicant with written notification setting forth the reasons
therefore and affording the applicant an opportunity for a
hearing, appeal, or other administrative proceeding under
chapter 5 of title 5, United States Code.''.
SEC. 308. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT
PROJECT.
(a) In General.--The Women's Business Ownership Act of 1988
(15 U.S.C. 631 note) is amended by adding at the end the
following:
``SEC. 410. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT
PROJECT.
``(a) Procurement Project.--
``(1) Federal procurement study.--
``(A) In general.--The Council shall conduct a study on the
award of Federal prime contracts and subcontracts to women-
owned businesses, which study shall include--
``(i) an analysis of data collected by Federal agencies on
contract awards to women-owned businesses;
``(ii) a determination of the degree to which individual
Federal agencies are in compliance with the 5 percent women-
owned business procurement goal established by section
15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1));
``(iii) a determination of the types and amounts of Federal
contracts characteristically awarded to women-owned
businesses; and
``(iv) other relevant information relating to participation
of women-owned businesses in Federal procurement.
``(B) Submission of results.--Not later than October 1,
1999, the Council shall submit to the Committees on Small
Business of the House of Representatives and the Senate, and
to the President, the results of the study conducted under
subparagraph (A).
``(2) Best practices report.--Not later than March 1, 2000,
the Council shall submit to the Committees on Small Business
of the House of Representatives and the Senate, and to the
President, a report, which shall include--
``(A) an analysis of the most successful practices in
attracting women-owned businesses as prime contractors and
subcontractors by--
``(i) Federal agencies (as supported by findings from the
study required under subsection (a)(1)) in Federal
procurement awards; and
``(ii) the private sector; and
``(B) recommendations for policy changes in Federal
procurement practices, including an increase in the Federal
procurement goal for women-owned businesses, in order to
maximize the number of women-owned businesses performing
Federal contracts.
``(b) Contracting Authority.--In carrying out this section,
the Council may contract with 1 or more public or private
entities.
``(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, not to exceed
$200,000, to remain available until expended through fiscal
year 2000.''.
TITLE IV--COMPETITIVENESS PROGRAM AND PROCUREMENT OPPORTUNITIES
Subtitle A--Small Business Competitiveness Program
SEC. 401. PROGRAM TERM.
Section 711(c) of the Small Business Competitiveness
Demonstration Program Act of 1988 (15 U.S.C. 644 note) is
amended by striking ``1997'' and inserting ``2000''.
SEC. 402. MONITORING AGENCY PERFORMANCE.
Section 712(d)(1) of the Small Business Competitiveness
Demonstration Program Act of 1988 (15 U.S.C. 644 note) is
amended to read as follows:
``(1) Participating agencies shall monitor the attainment
of their small business participation goals on an annual
basis. An annual review by each participating agency shall be
completed not later than January 31 of each year, based on
the data for the preceding fiscal year, from October 1
through September 30.''.
SEC. 403. REPORTS TO CONGRESS.
Section 716(a) of the Small Business Competitiveness
Demonstration Program Act of 1988 (15 U.S.C. 644 note) is
amended--
(1) by striking ``1996'' and inserting ``2000'';
(2) by striking ``for Federal Procurement Policy'' and
inserting ``of the Small Business Administration''; and
(3) by striking ``Government Operations'' and inserting
``Government Reform and Oversight''.
SEC. 404. SMALL BUSINESS PARTICIPATION IN DREDGING.
Section 722(a) of the Small Business Competitiveness
Demonstration Program Act of 1988 (15 U.S.C. 644 note) is
amended by striking ``1996'' and inserting ``2000''.
Subtitle B--Small Business Procurement Opportunities Program
SEC. 411. CONTRACT BUNDLING.
Section 2 of the Small Business Act (15 U.S.C. 631) is
amended by adding at the end the following:
``(j) In complying with the statement of congressional
policy expressed in subsection (a), relating to fostering the
participation of small business concerns in the contracting
opportunities of the Government, each Federal agency, to the
maximum extent practicable, shall--
``(1) comply with congressional intent to foster the
participation of small business concerns as prime
contractors, subcontractors, and suppliers;
``(2) structure its contracting requirements to facilitate
competition by and among small business concerns, taking all
reasonable steps to eliminate obstacles to their
participation; and
``(3) avoid unnecessary and unjustified bundling of
contract requirements that precludes small business
participation in procurements as prime contractors.''.
SEC. 412. DEFINITION OF CONTRACT BUNDLING.
Section 3 of the Small Business Act (15 U.S.C. 632) is
amended by adding at the end the following:
``(o) Definitions of Bundling of Contract Requirements and
Related Terms.--In this Act--
``(1) The term `bundling of contract requirements' means
consolidating two or more procurement requirements for goods
or services previously provided or performed under separate
smaller contracts into a solicitation of offers for a single
contract that is likely to be unsuitable for award to a
small-business concern due to--
``(A) the diversity, size, or specialized nature of the
elements of the performance specified;
``(B) the aggregate dollar value of the anticipated award;
``(C) the geographical dispersion of the contract
performance sites; or
``(D) any combination of the factors described in
subparagraphs (A), (B), and (C).
``(2) The term `separate smaller contract', with respect to
a bundling of contract requirements, means a contract that
has been performed by one or more small business concerns or
was suitable for award to one or more small business
concerns.
``(3) The term `bundled contract' means a contract that is
entered into to meet requirements that are consolidated in a
bundling of contract requirements.''.
SEC. 413. ASSESSING PROPOSED CONTRACT BUNDLING.
(a) In General.--Section 15 of the Small Business Act (15
U.S.C. 644) is amended by inserting after subsection (d) the
following new subsection (e):
``(e) Procurement Strategies; Contract Bundling.--
``(1) In general.--To the maximum extent practicable,
procurement strategies used by the various agencies having
contracting authority shall facilitate the maximum
participation of small business concerns as prime
contractors, subcontractors, and suppliers.
``(2) Market research.--
``(A) In general.--Before proceeding with an acquisition
strategy that could lead to a contract containing
consolidated procurement requirements, the head of an agency
shall conduct market research to determine whether
consolidation of the requirements is necessary and justified.
``(B) Factors.--For purposes of subparagraph (A),
consolidation of the requirements may be determined as being
necessary and justified if, as compared to the benefits that
would be derived from contracting to meet those requirements
if not consolidated, the Federal Government would derive from
the consolidation measurably substantial benefits, including
any combination of benefits that, in combination, are
measurably substantial. Benefits described in the preceding
sentence may include the following:
``(i) Cost savings.
[[Page S8985]]
``(ii) Quality improvements.
``(iii) Reduction in acquisition cycle times.
``(iv) Better terms and conditions.
``(v) Any other benefits.
``(C) Reduction of costs not determinative.--The reduction
of administrative or personnel costs alone shall not be a
justification for bundling of contract requirements unless
the cost savings are expected to be substantial in relation
to the dollar value of the procurement requirements to be
consolidated.
``(3) Strategy specifications.--If the head of a
contracting agency determines that a proposed procurement
strategy for a procurement involves a substantial bundling of
contract requirements, the proposed procurement strategy
shall--
``(A) identify specifically the benefits anticipated to be
derived from the bundling of contract requirements;
``(B) set forth an assessment of the specific impediments
to participation by small business concerns as prime
contractors that result from the bundling of contract
requirements and specify actions designed to maximize small
business participation as subcontractors (including
suppliers) at various tiers under the contract or contracts
that are awarded to meet the requirements; and
``(C) include a specific determination that the anticipated
benefits of the proposed bundled contract justify its use.
``(4) Contract teaming.--In the case of a solicitation of
offers for a bundled contract that is issued by the head of
an agency, a small-business concern may submit an offer that
provides for use of a particular team of subcontractors for
the performance of the contract. The head of the agency shall
evaluate the offer in the same manner as other offers, with
due consideration to the capabilities of all of the proposed
subcontractors. When a small business concern teams under
this paragraph, it shall not affect its status as a small
business concern for any other purpose.''.
(b) Administration Review.--The third sentence of
subsection (a) of such section is amended--
(1) by inserting after ``discrete construction projects,''
the following: ``or the solicitation involves an unnecessary
or unjustified bundling of contract requirements, as
determined by the Administration,'';
(2) by striking out ``or (4)'' and inserting in lieu
thereof ``(4)''; and
(3) by inserting before the period at the end the
following: ``, or (5) why the agency has determined that the
bundled contract (as defined in section 3(o)) is necessary
and justified''.
(c) Responsibilities of Agency Small Business Advocates.--
Subsection (k) of such section is amended--
(1) by redesignating paragraphs (5) through (9) as
paragraphs (6) through (10), respectively; and
(2) by inserting after paragraph (4) the following:
``(5) identify proposed solicitations that involve
significant bundling of contract requirements, and work with
the agency acquisition officials and the Administration to
revise the procurement strategies for such proposed
solicitations where appropriate to increase the probability
of participation by small businesses as prime contractors, or
to facilitate small business participation as subcontractors
and suppliers, if a solicitation for a bundled contract is to
be issued;''.
SEC. 414. REPORTING OF BUNDLED CONTRACT OPPORTUNITIES.
(a) Data Collection Required.--The Federal Procurement Data
System described in section 6(d)(4)(A) of the Office of
Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)) shall
be modified to collect data regarding bundling of contract
requirements when the contracting officer anticipates that
the resulting contract price, including all options, is
expected to exceed $5,000,000. The data shall reflect a
determination made by the contracting officer regarding
whether a particular solicitation constitutes a contract
bundling.
(b) Definitions.--In this section, the term ``bundling of
contract requirements'' has the meaning given that term in
section 3(o) of the Small Business Act (15 U.S.C. 632(o)) (as
added by section 412 of this title).
SEC. 415. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING
CONTRACTS.
Section 8(d)(4) of the Small Business Act (15 U.S.C.
637(d)(4)) is amended by adding at the end the following:
``(G) The following factors shall be designated by the
Federal agency as significant factors for purposes of
evaluating offers for a bundled contract where the head of
the agency determines that the contract offers a significant
opportunity for subcontracting:
``(i) A factor that is based on the rate provided under the
subcontracting plan for small business participation in the
performance of the contract.
``(ii) For the evaluation of past performance of an
offeror, a factor that is based on the extent to which the
offeror attained applicable goals for small business
participation in the performance of contracts.''.
SEC. 416. 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:
``(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 such contractor having a
subcontracting opportunity in excess of $10,000.
``(2) Content 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 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 that term appears and inserting
``$100,000''.
SEC. 417. DEADLINES FOR ISSUANCE OF REGULATIONS.
(a) Proposed Regulations.--Proposed amendments to the
Federal Acquisition Regulation or proposed Small Business
Administration regulations under this subtitle and the
amendments made by this subtitle 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 section 22 of
the Office of Federal Procurement Policy Act (41 U.S.C.
418b), 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 not later than 270 days after the date of enactment
of this Act. The effective date for such final regulations
shall be not less than 30 days after the date of publication.
TITLE V--MISCELLANEOUS PROVISIONS
SEC. 501. SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM.
(a) Required Expenditures.--Section 9(n) of the Small
Business Act (15 U.S.C. 638(n)) is amended by striking
paragraph (1) and inserting the following:
``(1) Required expenditure amounts.--With respect to fiscal
years 1998, 1999, 2000, 2001, 2002, or 2003, each Federal
agency that has an extramural budget for research, or
research and development, in excess of $1,000,000,000 for
that fiscal year, is authorized to expend with small business
concerns not less than 0.15 percent of that extramural budget
specifically in connection with STTR programs that meet the
requirements of this section and any policy directives and
regulations issued under this section.''.
(b) Pilot Program.--
(1) In general.--Section 9 of the Small Business Act (15
U.S.C. 638) is amended by adding at the end the following:
``(s) Pilot Program.--
``(1) Definition of eligible state.--In this subsection,
the term `eligible State' means a State--
``(A) if the total value of contracts awarded to the State
during fiscal year 1995 under this section was less than
$5,000,000; and
``(B) that certifies to the Federal agency described in
paragraph (2) that the State will, upon receipt of assistance
under this subsection, provide matching funds from non-
Federal sources in an amount that is not less than 50 percent
of the amount provided under this subsection.
``(2) Program authority.--Of amounts made available to
carry out this section for fiscal year 1998, 1999, or 2000,
the Administrator may expend with eligible States not more
than $2,000,000 in each such fiscal year in order to increase
the participation of small business concerns located in those
States in the programs under this section.
``(3) Amount of assistance.--The amount of assistance
provided to an eligible State under this subsection in any
fiscal year--
``(A) shall be equal to twice the total amount of matching
funds from non-Federal sources provided by the State; and
``(B) shall not exceed $100,000.
``(4) Use of assistance.--Assistance provided to an
eligible State under this subsection shall be used by the
State, in consultation with State and local departments and
agencies, for programs and activities to increase the
participation of small business concerns located in the State
in the programs under this section, including--
``(A) the establishment of quantifiable performance goals,
including goals relating to--
``(i) the number of program awards under this section made
to small business concerns in the State; and
``(ii) the total amount of Federal research and development
contracts awarded to small business concerns in the State;
``(B) the provision of competition outreach support to
small business concerns in the State that are involved in
research and development; and
``(C) the development and dissemination of educational and
promotional information relating to the programs under this
section to small business concerns in the State.''.
(2) Repeal.--Effective October 1, 2000, section 9(s) of the
Small Business Act (as added by paragraph (1) of this
subsection) is repealed.
SEC. 502. SMALL BUSINESS DEVELOPMENT CENTERS.
(a) In General.--Section 21(a) of the Small Business Act
(15 U.S.C. 648(a)) is amended--
(1) in paragraph (1)--
[[Page S8986]]
(A) by inserting ``any women's business center operating
pursuant to section 29,'' after ``credit or finance
corporation,'';
(B) by inserting ``or a women's business center operating
pursuant to section 29'' after ``other than an institution of
higher education''; and
(C) by inserting ``and women's business centers operating
pursuant to section 29'' after ``utilize institutions of
higher education'';
(2) in paragraph (3)--
(A) by striking ``, but with'' and all that follows through
``parties.'' and inserting the following: ``for the delivery
of programs and services to the Small Business community.
Such programs and services shall be jointly developed,
negotiated, and agreed upon, with full participation of both
parties, pursuant to an executed cooperative agreement
between the Small Business Development Center applicant and
the Administration.''; and
(B) by adding at the end the following:
``(C) On an annual basis, the Small Business Development
Center shall review and coordinate public and private
partnerships and cosponsorships with the Administration for
the purpose of more efficiently leveraging available
resources on a National and a State basis.'';
(3) in paragraph (4)(C)--
(A) by striking clause (i) and inserting the following:
``(i) In general.--
``(I) Grant amount.--Subject to subclause (II), the amount
of a grant received by a State under this section shall be
equal to the greater of $500,000, or the sum of--
``(aa) the State's pro rata share of the national program,
based upon the population of the State as compared to the
total population of the United States; and
``(bb) $300,000 in fiscal year 1998, $400,000 in fiscal
year 1999, and $500,000 in each fiscal year thereafter.
``(II) Pro rata reductions.--If the amount made available
to carry out this section for any fiscal year is insufficient
to carry out subclause (I), the Administration shall make pro
rata reductions in the amounts otherwise payable to States
under this clause.''; and
(B) in clause (iii), by striking ``(iii)'' and all that
follows through ``1997.'' and inserting the following:
``(iii) Authorization of appropriations.--There are
authorized to be appropriated to carry out the national
program under this section--
``(I) $85,000,000 for fiscal year 1998;
``(II) $90,000,000 for fiscal year 1999; and
``(III) $95,000,000 for fiscal year 2000 and each fiscal
year thereafter.''; and
(4) in paragraph (6)--
(A) in subparagraph (A), by striking ``and'' at the end;
(B) in subparagraph (B), by striking the comma at the end
and inserting ``; and''; and
(C) inserting after subparagraph (B) the following:
``(C) with outreach, development, and enhancement of
minority-owned small business startups or expansions,
veteran-owned small business startups or expansions, and
women-owned small business startups or expansions, in
communities impacted by base closings or military or
corporate downsizing, or in rural or underserved
communities;''.
(b) SBDC Services.--Section 21(c) of the Small Business Act
(15 U.S.C. 648(c)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (A), by striking ``businesses;'' and
inserting ``businesses, including--
``(i) working with individuals to increase awareness of
basic credit practices and credit requirements;
``(ii) working with individuals to development business
plans, financial packages, credit applications, and contract
proposals;
``(iii) working with the Administration to develop and
provide informational tools for use in working with
individuals on pre-business startup planning, existing
business expansion, and export planning; and
``(iv) working with individuals referred by the local
offices of the Administration and Administration
participating lenders;'';
(B) in each of subparagraphs (B), (C), (D), (E), (F), (G),
(M), (N), (O), (Q), and (R) by moving each margin two ems to
the right;
(C) in subparagraph (C), by inserting ``and the
Administration'' after ``Center'';
(D) by striking subparagraph (H), and inserting the
following:
``(H) working with the technical and environmental
compliance assistance programs established in each State
under section 507 of the Clean Air Act Amendments of 1970, or
State pollution prevention programs to notify small
businesses through outreach programs of regulations that
affect small businesses and making counseling, conferences,
and materials available on methods of compliance;'';
(E) in subparagraph (Q), by striking ``and'' at the end;
(F) in subparagraph (R), by striking the period at the end
and inserting ``; and''; and
(G) by inserting after subparagraph (R) the following:
``(S) providing counseling and technology development when
necessary to help small businesses find solutions for
complying with environmental, energy, health, safety, and
other Federal, State, and local regulation including
cooperating with the technical and environmental compliance
assistance programs established in each State under section
507 of the Clean Air Act Amendments of 1970 or State
pollution prevention programs in the provision of counseling
and technology development to help small businesses find
solutions for complying with environmental regulations.'';
(2) in paragraph (5)--
(A) by moving the margin 2 ems to the right;
(B) by striking ``paragraph (a)(1)'' and inserting
``subsection (a)(1)'';
(C) by striking ``which ever'' and inserting ``whichever'';
and
(D) by striking ``last,,'' and inserting ``last,'';
(3) by redesignating paragraphs (4) through (7) as
paragraphs (5) through (8), respectively; and
(4) in paragraph (3), in the undesignated material
following subparagraph (S) (as added by this subsection), by
striking ``A small'' and inserting the following:
``(4) A small''.
(c) Competitive Awards.--Section 21(l) of the Small
Business Act (15 U.S.C. 648(l)) is amended by adding at the
end the following: ``If any contract under this section with
an entity that is in compliance with this section is not
renewed or extended, any award of a contract under this
section to another entity shall be made on a competitive
basis.''.
(d) Prohibition on Certain Fees.--Section 21 of the Small
Business Act (15 U.S.C. 648) is amended by adding at the end
the following:
``(m) Prohibition on Certain Fees.--A small business
development center shall not impose or otherwise collect a
fee or other compensation in connection with the provision of
counseling services under this section.''.
SEC. 503. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM
EXTENSION.
Section 207 of the Small Business Administration
Reauthorization and Amendment Act of 1988 (15 U.S.C. 694b
note) is amended by striking ``September 30, 1997'' and
inserting ``September 30, 2000''.
SEC. 504. EXTENSION OF COSPONSORSHIP AUTHORITY.
Section 401(a)(2) of the Small Business Administration
Reauthorization and Amendments Act of 1994 (15 U.S.C. 637
note) is amended by striking ``September 30, 1997'' and
inserting ``September 30, 2000''.
SEC. 505. ASSET SALES.
In connection with the Administration's implementation of a
program to sell to the private sector loans and other assets
held by the Administration, the Administration shall provide
to the Committees on Small Business in the Senate and House
of Representatives a copy of the draft and final plans
describing the sale and the anticipated benefits resulting
from such sale.
SEC. 506. SMALL BUSINESS EXPORT PROMOTION.
(a) In General.--Section 21(c)(3) of the Small Business Act
(15 U.S.C. 648(c)(3)) is amended--
(1) in subparagraph (Q), by striking ``and'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(3) by inserting after subparagraph (R) the following:
``(S) providing small business owners with access to a wide
variety of export-related information by establishing on-line
computer linkages between small business development centers
and an international trade data information network with ties
to the Export Assistance Center program.''.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to carry out section 21(c)(3)(S) of the
Small Business Act (15 U.S.C. 648(c)(3)(S)), as added by this
section, $1,500,000 for each fiscal years 1998 and 1999.
SEC. 507. DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM.
(a) DELTA Program Authorized.--
(1) In general.--The Administrator of the Small Business
Administration may administer the Defense Loan and Technical
Assistance program in accordance with the authority and
requirements of this section.
(2) Expiration of authority.--The authority of the
Administrator to carry out the DELTA program under paragraph
(1) shall terminate when the funds referred to in subsection
(g)(1) have been expended.
(3) DELTA program defined.--In this section, the terms
``Defense Loan and Technical Assistance program'' and ``DELTA
program'' mean the Defense Loan and Technical Assistance
program that has been established by a memorandum of
understanding entered into by the Administrator and the
Secretary of Defense on June 26, 1995.
(b) Assistance.--
(1) Authority.--Under the DELTA program, the Administrator
may assist small business concerns that are economically
dependent on defense expenditures to acquire dual-use
capabilities.
(2) Forms of assistance.--Forms of assistance authorized
under paragraph (1) are as follows:
(A) Loan guarantees.--Loan guarantees under the terms and
conditions specified under this section and other applicable
law.
(B) Nonfinancial assistance.--Other forms of assistance
that are not financial.
(c) Administration of Program.--In the administration of
the DELTA program under this section, the Administrator
shall--
(1) process applications for DELTA program loan guarantees;
(2) guarantee repayment of the resulting loans in
accordance with this section; and
(3) take such other actions as are necessary to administer
the program.
(d) Selection and Eligibility Requirements for DELTA Loan
Guarantees.--
[[Page S8987]]
(1) In general.--The selection criteria and eligibility
requirements set forth in this subsection shall be applied in
the selection of small business concerns to receive loan
guarantees under the DELTA program.
(2) Selection criteria.--The criteria used for the
selection of a small business concern to receive a loan
guarantee under this section are as follows:
(A) The selection criteria established under the memorandum
of understanding referred to in subsection (a)(3).
(B) The extent to which the loans to be guaranteed would
support the retention of defense workers whose employment
would otherwise be permanently or temporarily terminated as a
result of reductions in expenditures by the United States for
defense, the termination or cancellation of a defense
contract, the failure to proceed with an approved major
weapon system, the merger or consolidation of the operations
of a defense contractor, or the closure or realignment of a
military installation.
(C) The extent to which the loans to be guaranteed would
stimulate job creation and new economic activities in
communities most adversely affected by reductions in
expenditures by the United States for defense, the
termination or cancellation of a defense contract, the
failure to proceed with an approved major weapon system, the
merger or consolidation of the operations of a defense
contractor, or the closure or realignment of a military
installation.
(D) The extent to which the loans to be guaranteed would be
used to acquire (or permit the use of other funds to acquire)
capital equipment to modernize or expand the facilities of
the borrower to enable the borrower to remain in the national
technology and industrial base available to the Department of
Defense.
(3) Eligibility requirements.--To be eligible for a loan
guarantee under the DELTA program, a borrower must
demonstrate to the satisfaction of the Administrator that,
during any 1 of the 5 preceding operating years of the
borrower, not less than 25 percent of the value of the
borrower's sales were derived from--
(A) contracts with the Department of Defense or the
defense-related activities of the Department of Energy; or
(B) subcontracts in support of defense-related prime
contracts.
(e) Maximum Amount of Loan Principal.--The maximum amount
of loan principal for which the Administrator may provide a
guarantee under this section during a fiscal year may not
exceed $1,250,000.
(f) Loan Guaranty Rate.--The maximum allowable guarantee
percentage for loans guaranteed under this section may not
exceed 80 percent.
(g) Funding.--
(1) In general.--The funds that have been made available
for loan guarantees under the DELTA program and have been
transferred from the Department of Defense to the Small
Business Administration before the date of the enactment of
this Act shall be used for carrying out the DELTA program
under this section.
(2) Continued availability of existing funds.--The funds
made available under the second proviso under the heading
``Research, Development, Test and Evaluation, Defense-Wide''
in Public Law 103-335 (108 Stat. 2613) shall be available
until expended--
(A) to cover the costs (as defined in section 502(5) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) of loan
guarantees issued under this section; and
(B) to cover the reasonable costs of the administration of
the loan guarantees.
TITLE VI--HUBZONE PROGRAM
SEC. 601. SHORT TITLE.
This title may be cited as the ``HUBZone Act of 1997''.
SEC. 602. HISTORICALLY UNDERUTILIZED BUSINESS ZONES.
(a) Definitions.--Section 3 of the Small Business Act (15
U.S.C. 632) (as amended by section 412 of this Act) is
amended by adding at the end the following:
``(p) Definitions Relating to HUBZones.--In this Act:
``(1) Historically underutilized business zone.--The term
`historically underutilized business zone' means any area
located within 1 or more--
``(A) qualified census tracts;
``(B) qualified nonmetropolitan counties; or
``(C) lands within the external boundaries of an Indian
reservation.
``(2) HUBZone.--The term `HUBZone' means a historically
underutilized business zone.
``(3) HUBZone small business concern.--The term `HUBZone
small business concern' means a small business concern--
``(A) that is owned and controlled by 1 or more persons,
each of whom is a United States citizen; and
``(B) the principal office of which is located in a
HUBZone; or
``(4) Qualified areas.--
``(A) Qualified census tract.--The term `qualified census
tract' has the meaning given that term in section
42(d)(5)(C)(i)(I) of the Internal Revenue Code of 1986.
``(B) Qualified nonmetropolitan county.--The term
`qualified nonmetropolitan county' means any county--
``(i) that, based on the most recent data available from
the Bureau of the Census of the Department of Commerce--
``(I) is not located in a metropolitan statistical area (as
that term is defined in section 143(k)(2)(B) of the Internal
Revenue Code of 1986); and
``(II) in which the median household income is less than 80
percent of the nonmetropolitan State median household income;
or
``(ii) that, based on the most recent data available from
the Secretary of Labor, has an unemployment rate that is not
less than 140 percent of the statewide average unemployment
rate for the State in which the county is located.
``(5) Qualified hubzone small business concern.--
``(A) In general.--A HUBZone small business concern is
`qualified', if--
``(i) the small business concern has certified in writing
to the Administrator (or the Administrator otherwise
determines, based on information submitted to the
Administrator by the small business concern, or based on
certification procedures, which shall be established by the
Administration by regulation) that--
``(I) it is a HUBZone small business concern;
``(II) not less than 35 percent of the employees of the
small business concern reside in a HUBZone, and the small
business concern will attempt to maintain this employment
percentage during the performance of any contract awarded to
the small business concern on the basis of a preference
provided under section 31(b); and
``(III) with respect to any subcontract entered into by the
small business concern pursuant to a contract awarded to the
small business concern under section 31, the small business
concern will ensure that--
``(aa) in the case of a contract for services (except
construction), not less than 50 percent of the cost of
contract performance incurred for personnel will be expended
for its employees or for employees of other HUBZone small
business concerns; and
``(bb) in the case of a contract for procurement of
supplies (other than procurement from a regular dealer in
such supplies), not less than 50 percent of the cost of
manufacturing the supplies (not including the cost of
materials) will be incurred in connection with the
performance of the contract in a HUBZone by 1 or more HUBZone
small business concerns; and
``(ii) no certification made or information provided by the
small business concern under clause (i) has been, in
accordance with the procedures established under section
31(c)(1)--
``(I) successfully challenged by an interested party; or
``(II) otherwise determined by the Administrator to be
materially false.
``(B) Change in percentages.--The Administrator may utilize
a percentage other than the percentage specified in under
subclause (IV) or (V) of subparagraph (A)(i), if the
Administrator determines that such action is necessary to
reflect conventional industry practices among small business
concerns that are below the numerical size standard for
businesses in that industry category.
``(C) Construction and other contracts.--The Administrator
shall promulgate final regulations imposing requirements that
are similar to those specified in subclauses (IV) and (V) of
subparagraph (A)(i) on contracts for general and specialty
construction, and on contracts for any other industry
category that would not otherwise be subject to those
requirements. The percentage applicable to any such
requirement shall be determined in accordance with
subparagraph (B).
``(D) List of qualified small business concerns.--The
Administrator shall establish and maintain a list of
qualified HUBZone small business concerns, which list shall,
to the extent practicable--
``(i) include the name, address, and type of business with
respect to each such small business concern;
``(ii) be updated by the Administrator not less than
annually; and
``(iii) be provided upon request to any Federal agency or
other entity.''.
(b) Federal Contracting.--
(1) In general.--The Small Business Act (15 U.S.C. 631 et
seq.) is amended--
(A) by redesignating section 31 as section 32; and
(B) by inserting after section 30 the following:
``SEC. 31. HUBZONE PROGRAM.
``(a) In General.--There is established within the
Administration a program to be carried out by the
Administrator to provide for Federal contracting assistance
to qualified HUBZone small business concerns in accordance
with this section.
``(b) Eligible Contracts.--
``(1) Definitions.--In this subsection--
``(A) the term `contracting officer' has the meaning given
that term in section 27(f)(5) of the Office of Federal
Procurement Policy Act (41 U.S.C. 423(f)(5)); and
``(B) the terms `executive agency' and `full and open
competition' have the meanings given such terms in section 4
of the Office of Federal Procurement Policy Act (41 U.S.C.
403).
``(2) Requirements.--Subject to paragraph (3), a contract
opportunity offered for award pursuant to this section shall
be awarded on the basis of competition restricted to
qualified HUBZone small business concerns, if there is a
reasonable expectation that not less than 2 qualified HUBZone
small business concerns will submit offers and that award can
be made at a fair market price.
[[Page S8988]]
``(3) Alternate authority.--Notwithstanding any other
provision of law, a contracting officer may award sole source
contracts under this section to any qualified HUBZone small
business concern, if--
``(A) the qualified HUBZone small business concern is
determined to be a responsible contractor with respect to
performance of such contract opportunity;
``(B) the anticipated award price of the contract
(including options) will not exceed--
``(i) $5,000,000, in the case of a contract opportunity
assigned a standard industrial classification code for
manufacturing; or
``(ii) $3,000,000, in the case of all other contract
opportunities; and
``(C) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
``(4) Price evaluation preference in full and open
competitions.--In any case in which a contract is to be
awarded on the basis of full and open competition, the price
offered by a small business concern shall be deemed as being
lower than the price offered by another offeror (other than
another small business concern), if the price offered by the
qualified HUBZone small business concern is not more than 10
percent higher than the price offered by the otherwise
lowest, responsive, and responsible offeror.
``(5) Relationship to other contracting preferences.--
``(A) Subordinate relationship.--A procurement may not be
made from a source on the basis of a preference provided in
paragraph (2), (3), or (4), if the procurement would
otherwise be made from a different source under section 4124
or 4125 of title 18, United States Code, or the Javits-
Wagner-O'Day Act.
``(B) Parity relationship.--The provisions of paragraphs
(2), (3), and (4) shall not limit the discretion of a
contracting officer to let any procurement contract to the
Administration under section 8(a). Notwithstanding section
8(a), the Administration may not appeal an adverse decision
of any contracting officer declining to let a procurement
contract to the Administration, if the procurement is made to
a qualified HUBZone small business concern on the basis of a
preference under paragraph (2), (3), or (4).
``(c) Enforcement; Penalties.--
``(1) Verification of eligibility.--In carrying out this
section, the Administrator shall establish procedures
relating to--
``(A) the filing, investigation, and disposition by the
Administration of any challenge to the eligibility of a small
business concern to receive assistance under this section
(including a challenge, filed by an interested party,
relating to the veracity of a certification made or
information provided to the Administration by a small
business concern under section 3(p)(5)); and
``(B) verification by the Administrator of the accuracy of
any certification made or information provided to the
Administration by a small business concern under section
3(p)(5).
``(2) Examinations.--The procedures established under
paragraph (1) may provide for program examinations (including
random program examinations) by the Administrator of any
small business concern making a certification or providing
information to the Administrator under section 3(p)(5).
``(3) Provision of data.--Upon the request of the
Administrator, the Secretary of Labor, the Secretary of
Housing and Urban Development, and the Secretary of the
Interior (or the Assistant Secretary for Indian Affairs),
shall promptly provide to the Administrator such information
as the Administrator determines to be necessary to carry out
this subsection.
``(4) Penalties.--In addition to the penalties described in
section 16(d), any small business concern that is determined
by the Administrator to have misrepresented the status of
that concern as a `HUBZone small business concern' for
purposes of this section, shall be subject to--
``(A) section 1001 of title 18, United States Code; and
``(B) sections 3729 through 3733 of title 31, United States
Code.''.
(2) Initial limited applicability.--During the period
beginning on the date of enactment of this Act and ending on
September 30, 2000, section 31 of the Small Business Act (as
added by paragraph (1) of this subsection) shall apply only
to procurements by--
(A) the Department of Defense;
(B) the Department of Agriculture;
(C) the Department of Health and Human Services;
(D) the Department of Transportation;
(E) the Department of Energy;
(F) the Department of Housing and Urban Development;
(G) the Environmental Protection Agency;
(H) the National Aeronautics and Space Administration;
(I) the General Services Administration; and
(J) the Department of Veterans Affairs.
SEC. 603. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL
BUSINESS ACT.
(a) Performance of Contracts.--Section 8(d) of the Small
Business Act (15 U.S.C. 637(d)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``,, small business
concerns owned and controlled by socially and economically
disadvantaged individuals'' and inserting ``, qualified
HUBZone small business concerns, small business concerns
owned and controlled by socially and economically
disadvantaged individuals''; and
(B) in the second sentence, by inserting ``qualified
HUBZone small business concerns,'' after ``small business
concerns,'';
(2) in paragraph (3)--
(A) by inserting ``qualified HUBZone small business
concerns,'' after ``small business concerns,'' each place
that term appears; and
(B) by adding at the end the following:
``(F) In this contract, the term `qualified HUBZone small
business concern' has the meaning given that term in section
3(p) of the Small Business Act.'';
(3) in paragraph (4)(E), by striking ``small business
concerns and'' and inserting ``small business concerns,
qualified HUBZone small business concerns, and'';
(4) in paragraph (6), by inserting ``qualified HUBZone
small business concerns,'' after ``small business concerns,''
each place that term appears; and
(5) in paragraph (10), by inserting ``qualified HUBZone
small business concerns,'' after ``small business
concerns,''.
(b) Awards of Contracts.--Section 15 of the Small Business
Act (15 U.S.C. 644) is amended--
(1) in subsection (g)(1)--
(A) by inserting ``qualified HUBZone small business
concerns,'' after ``small business concerns,'' each place
that term appears;
(B) in the second sentence, by striking ``20 percent'' and
inserting ``23 percent''; and
(C) by inserting after the second sentence the following:
``The Governmentwide goal for participation by qualified
HUBZone small business concerns shall be established at not
less than 1 percent of the total value of all prime contract
awards for fiscal year 1999, not less than 1.5 percent of the
total value of all prime contract awards for fiscal year
2000, not less than 2 percent of the total value of all prime
contract awards for fiscal year 2001, not less than 2.5
percent of the total value of all prime contract awards for
fiscal year 2002, and not less than 3 percent of the total
value of all prime contract awards for fiscal year 2003 and
each fiscal year thereafter.'';
(2) in subsection (g)(2)--
(A) in the first sentence, by striking ``,, by small
business concerns owned and controlled by socially and
economically disadvantaged individuals'' and inserting ``, by
qualified HUBZone small business concerns, by small business
concerns owned and controlled by socially and economically
disadvantaged individuals'';
(B) in the second sentence, by inserting ``qualified
HUBZone small business concerns,'' after ``small business
concerns,''; and
(C) in the fourth sentence, by striking ``by small business
concerns owned and controlled by socially and economically
disadvantaged individuals and participation by small business
concerns owned and controlled by women'' and inserting ``by
qualified HUBZone small business concerns, by small business
concerns owned and controlled by socially and economically
disadvantaged individuals, and by small business concerns
owned and controlled by women''; and
(3) in subsection (h), by inserting ``qualified HUBZone
small business concerns,'' after ``small business concerns,''
each place that term appears.
(c) Offenses and Penalties.--Section 16 of the Small
Business Act (15 U.S.C. 645) is amended--
(1) in subsection (d)(1)--
(A) by inserting ``, a `qualified HUBZone small business
concern','' after `` `small business concern',''; and
(B) in subparagraph (A), by striking ``section 9 or 15''
and inserting ``section 9, 15, or 31''; and
(2) in subsection (e), by inserting ``, a `HUBZone small
business concern','' after `` `small business concern',''.
SEC. 604. OTHER TECHNICAL AND CONFORMING AMENDMENTS.
(a) Title 10, United States Code.--Section 2323 of title
10, United States Code, is amended--
(1) in subsection (a)(1)(A), by inserting before the
semicolon the following: ``, and qualified HUBZone small
business concerns (as that term is defined in section 3(p) of
the Small Business Act)''; and
(2) in subsection (f)(1), by inserting ``or as a qualified
HUBZone small business concern (as that term is defined in
section 3(p) of the Small Business Act)'' after ``(as
described in subsection (a))''.
(b) Federal Home Loan Bank Act.--Section 21A(b)(13) of the
Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is
amended--
(1) by striking ``concerns and small'' and inserting
``concerns, small''; and
(2) by inserting ``, and qualified HUBZone small business
concerns (as that term is defined in section 3(p) of the
Small Business Act)'' after ``disadvantaged individuals''.
(c) Small Business Economic Policy Act of 1980.--Section
303(e) of the Small Business Economic Policy Act of 1980 (15
U.S.C. 631b(e)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(3) qualified HUBZone small business concern (as that
term is defined in section 3(p) of the Small Business
Act).''.
(d) Small Business Investment Act of 1958.--Section
411(c)(3)(B) of the Small Business Investment Act of 1958 (15
U.S.C. 694b(c)(3)(B)) is amended by inserting before
[[Page S8989]]
the semicolon the following: ``, or to a qualified HUBZone
small business concern, as that term is defined in section
3(p) of the Small Business Act''.
(e) Title 31, United States Code.--
(1) Contracts for collection services.--Section 3718(b) of
title 31, United States Code, is amended--
(A) in paragraph (1)(B), by inserting ``and law firms that
are qualified HUBZone small business concerns (as that term
is defined in section 3(p) of the Small Business Act)'' after
``disadvantaged individuals''; and
(B) in paragraph (3)--
(i) in the first sentence, by inserting before the period
``and law firms that are qualified HUBZone small business
concerns'';
(ii) in subparagraph (A), by striking ``and'' at the end;
(iii) in subparagraph (B), by striking the period at the
end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) the term `qualified HUBZone small business concern'
has the meaning given that term in section 3(p) of the Small
Business Act.''.
(2) Payments to local governments.--Section 6701(f) of
title 31, United States Code, is amended--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking ``and'' at the end;
(ii) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) qualified HUBZone small business concerns.''; and
(B) in paragraph (3)--
(i) in subparagraph (A), by striking ``and'' at the end;
(ii) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(C) the term `qualified HUBZone small business concern'
has the meaning given that term in section 3(p) of the Small
Business Act (15 U.S.C. 632(o)).''.
(3) Regulations.--Section 7505(c) of title 31, United
States Code, is amended by striking ``small business concerns
and'' and inserting ``small business concerns, qualified
HUBZone small business concerns, and''.
(f) Office of Federal Procurement Policy Act.--
(1) Enumeration of included functions.--Section 6(d) of the
Office of Federal Procurement Policy Act (41 U.S.C. 405(d))
is amended--
(A) in paragraph (11), by inserting ``qualified HUBZone
small business concerns (as that term is defined in section
3(p) of the Small Business Act),'' after ``small
businesses,''; and
(B) in paragraph (12), by inserting ``qualified HUBZone
small business concerns (as that term is defined in section
3(p) of the Small Business Act (15 U.S.C. 632(o)),'' after
``small businesses,''.
(2) Procurement data.--Section 502 of the Women's Business
Ownership Act of 1988 (41 U.S.C. 417a) is amended--
(A) in subsection (a)--
(i) in the first sentence, by inserting ``the number of
qualified HUBZone small business concerns,'' after
``Procurement Policy''; and
(ii) by inserting a comma after ``women''; and
(B) in subsection (b), by inserting after ``section 204 of
this Act'' the following: ``, and the term `qualified HUBZone
small business concern' has the meaning given that term in
section 3(p) of the Small Business Act (15 U.S.C. 632(o)).''.
(g) Energy Policy Act of 1992.--Section 3021 of the Energy
Policy Act of 1992 (42 U.S.C. 13556) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``or'';
(B) in paragraph (3), by striking the period and inserting
``; or''; and
(C) by adding at the end the following:
``(4) qualified HUBZone small business concerns.''; and
(2) in subsection (b), by adding at the end the following:
``(3) The term `qualified HUBZone small business concern'
has the meaning given that term in section 3(p) of the Small
Business Act (15 U.S.C. 632(o)).''.
(h) Title 49, United States Code.--
(1) Project grant application approval conditioned on
assurances about airport operation.--Section 47107(e) of
title 49, United States Code, is amended--
(A) in paragraph (1), by inserting before the period ``or
qualified HUBZone small business concerns (as that term is
defined in section 3(p) of the Small Business Act)'';
(B) in paragraph (4)(B), by inserting before the period
``or as a qualified HUBZone small business concern (as that
term is defined in section 3(p) of the Small Business Act)'';
and
(C) in paragraph (6), by inserting ``or a qualified HUBZone
small business concern (as that term is defined in section
3(p) of the Small Business Act)'' after ``disadvantaged
individual''.
(2) Minority and disadvantaged business participation.--
Section 47113 of title 49, United States Code, is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking the period at the end and
inserting a semicolon;
(ii) in paragraph (2), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(3) the term `qualified HUBZone small business concern'
has the meaning given that term in section 3(p) of the Small
Business Act (15 U.S.C. 632(o)).''; and
(B) in subsection (b), by inserting before the period ``or
qualified HUBZone small business concerns''.
SEC. 605. REGULATIONS.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Administrator of the Small
Business Administration shall publish in the Federal Register
such final regulations as may be necessary to carry out this
title and the amendments made by this title.
(b) Federal Acquisition Regulation.--Not later than 180
days after the date on which final regulations are published
under subsection (a), the Federal Acquisition Regulatory
Council shall amend the Federal Acquisition Regulation in
order to ensure consistency between the Federal Acquisition
Regulation, this title and the amendments made by this title,
and the final regulations published under subsection (a).
SEC. 606. REPORT.
Not later than March 1, 2000, the Administrator of the
Small Business Administration shall submit to the Committees
on Small Business of the House of Representatives and the
Senate a report on the implementation of the HUBZone program
established under section 31 of the Small Business Act (as
amended by this title) and the degree to which the HUBZone
program has resulted in increased employment opportunities
and an increased level of investment in HUBZones (as that
term is defined in section 3(p) of the Small Business Act, as
added by this title).
SEC. 607. AUTHORIZATION OF APPROPRIATIONS.
Section 20 of the Small Business Act (15 U.S.C. 631 note)
(as amended by section 101 of this Act) is amended--
(1) in subsection (c), by adding at the end the following:
``(3) HUBZone program.--There are authorized to be
appropriated to the Administration to carry out the program
under section 31, $5,000,000 for fiscal year 1998.'';
(2) in subsection (d), by adding at the end the following:
``(3) HUBZone program.--There are authorized to be
appropriated to the Administration to carry out the program
under section 31, $5,000,000 for fiscal year 1999.''; and
(3) in subsection (e), by adding at the end the following:
``(3) HUBZone program.--There are authorized to be
appropriated to the Administration to carry out the program
under section 31, $5,000,000 for fiscal year 2000.''.
Mr. BOND. I thank the Chair, and I express my gratitude to the
distinguished Senator from Washington. I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GORTON. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________