[Congressional Record Volume 143, Number 132 (Monday, September 29, 1997)]
[House]
[Pages H8070-H8081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS PROGRAMS REAUTHORIZATION AND AMENDMENTS ACT OF 1997
Mr. TALENT. Mr. Speaker, I move to suspend the rules and pass the
bill
[[Page H8071]]
(H.R. 2261) to reauthorize and amend the programs of the Small Business
Act and the Small Business Investment Act, and for other purposes, as
amended.
The Clerk read as follows:
H.R. 2261
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 Programs Reauthorization and Amendments Acts of
1997''.
(b) Table of Contents.--
Sec. 1. Short title; table of contents.
TITLE I--AUTHORIZATIONS
Sec. 101. Authorizations.
TITLE II--FINANCIAL PROGRAMS
Subtitle A--General Business Loans
Sec. 201. Securitization regulations.
Sec. 202. Background check of loan applicants.
Sec. 203. Report on increased lender approval, servicing, foreclosure,
liquidation, and litigation of 7(a) loans.
Sec. 204. Completion of planning for loan monitoring system.
Subtitle B--Certified Development Company Program
Sec. 221. Reauthorization of fees.
Sec. 222. PCLP participation
Sec. 223. PCLP eligibility.
Sec. 224. Loss reserves.
Sec. 225. Goals.
Sec. 226. Technical amendments.
Sec. 227. Promulgation of regulations.
Sec. 228. Technical amendment.
Sec. 229. Repeal.
Sec. 230. Loan servicing and liquidation.
Sec. 231. Use of proceeds.
Sec. 232. Lease of property.
Sec. 233. Seller financing.
Sec. 234. Preexisting conditions.
Subtitle C--Small Business Investment Company Program
Sec. 241. 5-year commitments.
Sec. 242. Program reform.
Sec. 243. Fees.
Sec. 244. Examination fees.
Subtitle D--Microloan Program
Sec. 251. Microloan program extension.
Sec. 252. Supplemental microloan grants
TITLE III--WOMEN'S BUSINESS ENTERPRISES
Sec. 301. Reports.
Sec. 302. Council duties.
Sec. 303. Council membership.
Sec. 304. Authorization of appropriations.
Sec. 305. Women's business centers.
Sec. 306. Office of Women's Business Ownership.
TITLE IV--COMPETITIVENESS PROGRAM
Sec. 401. Program term.
Sec. 402. Monitoring agency performance.
Sec. 403. Reports to Congress.
Sec. 404. Small business participation in dredging.
Sec. 405. Technical amendment.
TITLE V--MISCELLANEOUS PROVISIONS
Sec. 501. Small business development centers.
Sec. 502. Small business export promotion.
Sec. 503. Pilot preferred surety bond guarantee program extension.
Sec. 504. Very small business concerns.
Sec. 505. Extension of cosponsorship authority.
Sec. 506. Trade assistance program for small business concerns harmed
by NAFTA.
TITLE VI--SERVICE DISABLED VETERANS
Sec. 601. Purposes.
Sec. 602. Definitions.
Sec. 603. Report by Small Business Administration.
Sec. 604. Information collection.
Sec. 605. State of small business report.
Sec. 606. Loans to veterans.
Sec. 607. Entrepreneurial training, counseling, and management
assistance.
Sec. 608. Grants for eligible veterans outreach programs.
Sec. 609. Outreach for eligible veterans.
TITLE VII--SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM
Sec. 701. Amendments.
TITLE I--AUTHORIZATIONS
SEC. 101. AUTHORIZATIONS.
Section 20 of the Small Business Act (15 U.S.C. 631 note)
is amended by striking subsections (l) through (q) and
inserting the following:
``(l) The following program levels are authorized for
fiscal year 1998:
``(1) For the programs authorized by this Act, the
Administration is authorized to make--
``(A) $40,000,000 in technical assistance grants, as
provided in section 7(m); and
``(B) $60,000,000 in loans, as provided in section 7(m).
``(2) For the programs authorized by this Act, the
Administration is authorized to make $15,040,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(A) $11,000,000,000 in general business loans as provided
in section 7(a);
``(B) $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;
``(C) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(D) $40,000,000 in loans as provided in section 7(m).
``(3) For the programs authorized by title III of the Small
Business Investment Act of 1958, the Administration is
authorized to make--
``(A) $600,000,000 in purchases of participating
securities; and
``(B) $500,000,000 in guarantees of debentures.
``(4) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to section 411(a)(3) of that Act.
``(5) The Administration is authorized to make grants or
enter into cooperative agreements--
``(A) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $4,000,000; and
``(B) for activities of small business development centers
pursuant to section 21(c)(3)(G), $15,000,000, to remain
available until expended.
``(m)(1) 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.
``(2) Notwithstanding paragraph (1), for fiscal year 1998--
``(A) 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
``(B) 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.
``(n) The following program levels are authorized for
fiscal year 1999:
``(1) For the programs authorized by this Act, the
Administration is authorized to make--
``(A) $60,000,000 in technical assistance grants as
provided in section 7(m); and
``(B) $60,000,000 in loans, as provided in section 7(m).
``(2) For the programs authorized by this Act, the
Administration is authorized to make $16,540,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(A) $12,000,000,000 in general business loans as provided
in section 7(a);
``(B) $3,500,000,000 in financings as provided in section
7(a)(13) of this Act and section 504 of the Small Business
Investment Act of 1958;
``(C) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(D) $40,000,000 in loans as provided in section 7(m).
``(3) For the programs authorized by title III of the Small
Business Investment Act of 1958, the Administration is
authorized to make--
``(A) $700,000,000 in purchases of participating
securities; and
``(B) $650,000,000 in guarantees of debentures.
``(4) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to section 411(a)(3) of that Act.
``(5) The Administration is authorized to make grants or
enter cooperative agreements--
``(A) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $4,500,000; and
``(B) 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.
``(o)(1) 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.
``(2) Notwithstanding paragraph (1), for fiscal year 1999--
``(A) 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
``(B) the Administration may not approve loans on behalf of
the Administration or on behalf of any other department or
agency, by
[[Page H8072]]
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.
``(p) The following program levels are authorized for
fiscal year 2000:
``(1) For the programs authorized by this Act, the
Administration is authorized to make--
``(A) $75,000,000 in technical assistance grants as
provided in section 7(m); and
``(B) $60,000,000 in direct loans, as provided in section
7(m).
``(2) For the programs authorized by this Act, the
Administration is authorized to make $19,040,000,000 in
deferred participation loans and other financings. Of such
sum, the Administration is authorized to make--
``(A) $13,500,000,000 in general business loans as provided
in section 7(a);
``(B) $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;
``(C) $1,000,000,000 in loans as provided in section
7(a)(21); and
``(D) $40,000,000 in loans as provided in section 7(m).
``(3) For the programs authorized by title III of the Small
Business Investment Act of 1958, the Administration is
authorized to make--
``(A) $850,000,000 in purchases of participating
securities; and
``(B) $700,000,000 in guarantees of debentures.
``(4) For the programs authorized by part B of title IV of
the Small Business Investment Act of 1958, the Administration
is authorized to enter into guarantees not to exceed
$2,000,000,000, of which not more than $650,000,000 may be in
bonds approved pursuant to the provisions of section
411(a)(3) of that Act.
``(5) The Administration is authorized to make grants or
enter cooperative agreements--
``(A) for the Service Corps of Retired Executives program
authorized by section 8(b)(1), $5,000,000; and
``(B) 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.
``(q)(1) 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 provisions of
the Small Business Investment Act of 1958, including salaries
and expenses of the Administration.
``(2) Notwithstanding paragraph (1), for fiscal year 2000--
``(A) 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
``(B) 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 PROGRAMS
Subtitle A--General Business Loans
SEC. 201. SECURITIZATION REGULATIONS.
The Administrator shall promulgate final regulations
permitting bank and non-bank lenders to sell or securitize
the non-guaranteed portion of loans made under section 7(a)
of the Small Business Act (15 U.S.C. 636(a)). Such
regulations shall be issued within 90 days of the date of
enactment of this Act, and shall allow securitizations to
proceed as regularly as is possible within the bounds of
prudent and sound financial management practice.
SEC. 202. BACKGROUND CHECK OF LOAN APPLICANTS.
Section 7(a)(1) of the Small Business Act (15 U.S.C.
636(a)(1)) is amended by striking ``(1)'' and inserting the
following:
``(1)(A) Credit elsewhere.--'', and by adding the following
new paragraph at the end:
``(B) Background checks.--Prior to the approval of any loan
made pursuant to this subsection, or section 503 of the Small
Business Investment Act, the Administrator shall verify the
applicant's criminal background, or lack thereof, through the
best available means, including, if possible, use of the
National Crime Information Center computer system at the
Federal Bureau of Investigation.''.
SEC. 203. REPORT ON INCREASED LENDER APPROVAL, SERVICING,
FORECLOSURE, LIQUIDATION, AND LITIGATION OF
7(A) LOANS.
(a) Within six months of the date of enactment of this act
the Administrator shall report on action taken and planned
for future reliance on private sector lender resources to
originate, approve, close, service, liquidate, foreclose, and
litigate loans made under Section 7(a) of the Small Business
Act. The report should address administrative and other steps
necessary to achieve these results, including--
(1) streamlining the process for approving lenders and
standardizing requirements;
(2) establishing uniform reporting requirements using on-
line automated capabilities to the maximum extent feasible;
(3) reducing paperwork through automation, simplified forms
or incorporation of lender's forms;
(4) providing uniform standards for approval, closing,
servicing, foreclosure, and liquidation;
(5) promulgating new regulations or amending existing ones;
(6) establishing a timetable for implementing the plan for
reliance on private sector lenders;
(7) implementing organizational changes at SBA; and
(8) estimating the annual savings that would occur as a
result of implementation.
(b) In preparing the report the Administrator shall seek
the views and consult with, among others, 7(a) borrowers and
lenders, small businesses who are potential program
participants, financial institutions who are potential
program lenders, and representative industry associations,
such as the U. S. Chamber of Commerce, the American Bankers
Association, the National Association of Government
Guaranteed Lenders and the Independent Bankers Association of
America.
SEC. 204. COMPLETION OF PLANNING FOR LOAN MONITORING SYSTEM.
(a) The Administrator shall perform and complete the
planning needed to serve as the basis for funding the
development and implementation of computerized loan
monitoring system, including--
(1) fully defining the system requirement using on-line,
automated capabilities to the extent feasible;
(2) identifying all data inputs and outputs necessary for
timely report generation;
(3) benchmark loan monitoring business processes and
systems against comparable industry processes and, if
appropriate, simplify or redefine work processes based on
these benchmarks;
(4) determine data quality standards and control systems
for ensuring information accuracy;
(5) identify an acquisition strategy and work increments to
completion;
(6) analyze the benefits and costs of alternatives and use
to demonstrate the advantage of the final project;
(7) ensure that the proposed information system is
consistent with the agency's information architecture; and
(8) estimate the cost to system completion, identifying the
essential cost element.
(b) Six months from the date of enactment of this Act, the
Administrator shall report to the House and Senate Committees
on Small Business pursuant to the requirements of subsection
(a), and shall also submit a copy of the report to the
General Accounting Office, which shall evaluate the report
for compliance with subsection (a) and shall submit such
evaluation to both Committees no later than 28 days after
receipt of the report from the Small Business Administration.
None of the funds provided for the purchase of the loan
monitoring system may be expended until the requirements of
this section have been satisfied.
Subtitle B--Certified Development Company Program
SEC. 221. REAUTHORIZATION OF FEES.
Section 503 of the Small Business Investment Act of 1958
(15 U.S.C. 697) is amended--
(1) by striking subsection (b)(7)(A) and inserting the
following:
``(A) assesses and collects a fee, which shall be payable
by the borrower, in an amount equal to 0.9375 percent per
year of the outstanding balance of the loan; and'';
(2) by striking from subsection (d)(2) ``equal to 50 basis
points'' and inserting ``equal to not more than 50 basis
points,'';
(3) by adding the following at the end of subsection
(d)(2): ``The amount of the fee authorized herein shall be
established annually by the Administration in the minimal
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
(4) by striking from subsection (f) ``1997'' and inserting
``2000''.
SEC. 222. PCLP PARTICIPATION.
Section 508(a) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(a)) is amended by striking ``not more than
15''.
SEC. 223. PCLP ELIGIBILITY.
Section 508(b)(2) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(b)(2)) is amended by striking paragraphs
(A) and (B) and inserting:
``(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 (i) of submitting to the Administration
adequately analyzed debenture guarantee application packages
and (ii) of properly closing section 504 loans and servicing
its loan portfolio; and''.
SEC. 224. LOSS RESERVES.
Section 508(c) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(c)) is amended to read as follows:
[[Page H8073]]
``(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
equal to 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.''.
SEC. 225. GOALS.
Section 508 of the Small Business Investment Act of 1958
(15 U.S.C. 697e) is amended by inserting the following after
subsection (d) and by redesignating subsections (e) to (i) as
(f) to (j):
``(e) Program Goals.--Certified development companies
participating in this program shall establish a goal of
processing 50 percent of their loan applications for section
504 assistance pursuant to the premier certified lender
program authorized in this section.''.
SEC. 226. TECHNICAL AMENDMENTS.
Section 508(g) of the Small Business Investment Act of 1958
(15 U.S.C. 697(g)) is amended--
(1) in subsection (g), as redesignated herein, is amended
by striking ``State or local'' and inserting ``certified'';
(2) in subsection (h), as redesignated herein--
(A) by striking ``EFFECT OF SUSPENSION OR DESIGNATION'' and
inserting ``EFFECT OF SUSPENSION OR REVOCATION''; and
(B) by striking ``under subsection (f)'' and inserting
``under subsection (g)''.
SEC. 227. PROMULGATION OF REGULATIONS.
Section 508(i) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(i)), as redesignated herein, is amended to
read as follows:
``(i) Regulations.--Not later than 90 days after the date
of enactment of this section, the Administration shall
promulgate regulations to carry out this section. Not later
than 120 days after the date of enactment, the Administration
shall issue program guidelines and implement the changes made
herein.''.
SEC. 228. TECHNICAL AMENDMENT.
Section 508(j) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(j)), as redesignated herein, is amended by
striking ``other lenders'' and inserting ``other lenders,
specifically comparing default rates and recovery rates on
liquidations''.
SEC. 229. REPEAL.
Section 217(b) of Public Law 103-403 (108 Stat. 4185) is
repealed.
SEC. 230. LOAN SERVICING AND LIQUIDATION.
Section 508(d)(1) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(d)) is amended by striking ``to approve
loans'' and inserting ``to approve, authorize, close,
service, foreclose, litigate, and liquidate loans''.
SEC. 231. USE OF PROCEEDS.
Section 502(1) of the Small Business Investment Act of 1958
(15 U.S.C. 696(1)) is amended to read as follows:
``(1) The proceeds of any such loan shall be used solely by
such borrower or borrowers to assist an identifiable small-
business or businesses and for a sound business purpose
approved by the Administration.''.
SEC. 232. LEASE OF PROPERTY.
Section 502 of the Small Business Investment Act of 1958
(15 U.S.C. 696) is amended by adding the following new
subsection:
``(5) Not to exceed 25 percent of any project may be
permanently leased by the assisted small business: Provided,
That the assisted small business shall be required to occupy
and use not less than 55 percent of the space in the project
after the execution of any leases authorized in this
section.''.
SEC. 233. SELLER FINANCING AND COLLATERALIZATION.
Section 502(3) of the Small Business Investment Act of 1958
(15 U.S.C. 696(3)) is amended by inserting the following new
subparagraphs:
``(D) Seller financing.--Seller provided financing may be
used to meet the requirements of--
``(i) paragraph (B), if the seller subordinates his
interest in the property to the debenture guaranteed by the
Administration; and
``(ii) not to exceed 50 percent of the amounts required by
paragraph (C).
``(E) Collateralization.--The collateral provided by the
small business concern generally shall include a subordinate
lien position on the property being financed under this
title, and is only one of the factors to be evaluated in the
credit determination. Additional collateral shall be required
only if the Administration determines, on a case by case
basis, that additional security is necessary to protect the
interest of the Government.''.
SEC. 234. PREEXISTING CONDITIONS.
Section 502 of the Small Business Investment Act of 1958
(15 U.S.C. 696) is amended by adding the following new
paragraph:
``(6) Any loan authorized under this section shall not be
denied or delayed for approval by the Administration due to
concerns over preexisting environmental conditions: Provided,
That the development company provides the Administration a
letter issued by the appropriate State or Federal
environmental protection agency specifically stating that the
environmental agency will not institute any legal proceedings
against the borrower or, in the event of a default, the
development company or the Administration based on the
preexisting environmental conditions: Provided further, That
the borrower shall agree to provide environmental agencies
access to the property for any reasonable and necessary
remediation efforts or inspections.''.
Subtitle C--Small Business Investment Company Program
SEC. 241. 5-YEAR COMMITMENTS.
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 one or more of
the 4 subsequent fiscal years''.
SEC. 242. PROGRAM REFORM.
(a) Tax Distributions.--Section 303(g)(8) of the Small
Business Investment Act of 1958 (15 U.S.C. 683(g)(8)) is
amended in the first sentence--
(1) by inserting ``, for each calendar quarter or once
annually, as the company may elect,'' after ``the company
may''; and
(2) by inserting ``for the preceding quarter or year''
before the period.
(b) 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 in which
case in which no commitment has been entered into by the
Administration) on the date on which the leverage is drawn
by the licensee''.
(c) 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''.
(d) 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--
[[Page H8074]]
``(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.''.
SEC. 243. FEES.
Section 301 of the Small Business Investment Act of 1958
(15 U.S.C. 681) is amended by adding the following:
``(d) 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. 244. 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 are authorized to be
appropriated solely to cover the costs of examinations and
other program oversight activities.''.
Subtitle D--Microloan Program
SEC. 251. MICROLOAN PROGRAM EXTENSION.
(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''.
SEC. 252. SUPPLEMENTAL MICROLOAN GRANTS.
Section 7(m)(4) of the Small Business Act (15 USC 636
(m)(4)) is amended by adding the following:
``(F)(i) The Administration may accept and disburse funds
received from another Federal department or agency to provide
additional assistance to individuals who are receiving
assistance under the State program funded under part A of
title IV of the Social Security Act (42 USC 601 et seq.), or
under any comparable State-funded means-tested program of
assistance for low-income individuals.
``(ii) Grant proceeds are in addition to other grants
provided by this subsection and shall not require the
contribution of matching amounts to be eligible. The grants
may be used to pay or reimburse a portion of child care and
transportation costs of individuals described in clause (i)
and for marketing, management and technical assistance.
``(iii) Prior to accepting and distributing any such
grants, the Administration shall enter a Memorandum of
Understanding with the department or agency specifying the
terms and conditions of the grants and providing appropriate
monitoring of expenditures by the intermediary and ultimate
grant recipient to insure compliance with the purpose of the
grant.
``(iv) 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 any monies distributed pursuant to the provisions
of this paragraph.
``(v) No funds are authorized to be provided to carry out
the grant program authorized by this paragraph (F) except by
transfer from another Federal department or agency to the
Administration.''.
TITLE III--WOMEN'S BUSINESS ENTERPRISES
SEC. 301. 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. 302. 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 ``; and''; 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. 303. 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
``4'';
(E) in paragraph (2)--
(i) by striking ``2'' and inserting ``4''; and
(ii) by striking ``and'' at the end;
(F) in paragraph (3)--
(i) by striking ``5'' and inserting ``6''; and
(ii) by striking ``national''.
SEC. 304. 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 ``$600,000, of
which $200,000 shall be for grants for research of women's
procurement or finance issues.''.
SEC. 305. 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) Definition.--For the purposes of this section the
term `small business concern owned and controlled by women',
either startup or existing, includes any small business
concern--
``(1) that is not less than 51 percent owned by one or more
women; and
``(2) the management and daily business operations of which
are controlled by one or more women.
``(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
[[Page H8075]]
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 and second years, 1 non-Federal dollar
for each 2 Federal dollars.
``(B) In the third year, 1 non-Federal dollar for each
Federal dollar.
``(C) In the fourth and fifth years, 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.
``(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 of which for
fiscal year 1998 not more than 10 percent may be used for
administrative expenses related to the program. Amounts
appropriated pursuant to this subsection for fiscal year 1999
and later 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 small business
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. 306. 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:
``(j) Assistant Administrator for the Office of Women's
Business Ownership.--
``(1) Establishment.--There is established the position of
Assistant Administrator for the Office of Women's Business
Ownership (hereafter in this section referred to as the
`Assistant Administrator') who shall serve without regard to
the provisions of title 5, United States Code, governing
appointments in the competitive service.
``(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;
``(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) serving as the vice chairperson of the Interagency
Committee on Women's Business Enterprise;
``(ix) serving as liaison for the National Women's Business
Council; and
``(x) 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.
``(k) 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).
``(l) 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.''.
TITLE IV--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 ``, and terminate on September 30,
1997''.
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. SMALL BUSINESS PARTICIPATION IN DREDGING.
Section 722(a) of the Small Business Competitiveness
Demonstration Program Act of
[[Page H8076]]
1988 (15 U.S.C. 644 note) is amended by striking ``and
terminating on September 30, 1997''.
SEC. 404. TECHNICAL AMENDMENT.
Section 717 of the Small Business Competitiveness
Demonstration Program Act of 1988 (15 U.S.C. 644 note) is
amended--
(1) by striking ``standard industrial classification code''
each time it appears and inserting in lieu thereof ``North
American Industrial Classification Code''; and
(2) by striking ``standard industrial classification
codes'' each time it appears and inserting in lieu thereof
``North American Industrial Classification Codes''.
TITLE V--MISCELLANEOUS PROVISIONS
SEC. 501. 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), by inserting ``any women's business
center operating pursuant to section 29,'' after ``credit or
finance corporation,'';
(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) Maximum amount.--Except as provided in clause (ii),
and subject to subclause (II) of this clause, the amount of a
grant received by a State under this section shall not exceed
greater of--
``(aa) $500,000; and
``(bb) the State's pro rata share of a national program,
based upon the population of the State as compared to the
total population of the United States.
``(II) Exception.--Subject to the availability of amounts
made available in advance in an appropriations Act to carry
out this section for any fiscal year in excess of amounts so
provided for fiscal year 1997, the amount of a grant received
by a State under this section shall not exceed the greater of
$500,000, and the sum of--
``(aa) the State's pro rata share of a national program,
based upon the population of the State as compared to the
total population of the United States; and
``(bb) and $300,000 in fiscal year 1998, $400,000 in fiscal
year 1999, and $500,000 in each fiscal year thereafter.'';
and
(B) in clause (iii), by striking ``(iii)'' and all that
follows through ``1997.'' and inserting the following:
``(iii) National program.--The national program under this
section shall be--
``(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 the Administration to develop and
provide informational tools for use in working with
individuals on pre-business startup planning, existing
business expansion, business plans, financial packages,
credit applications, contract proposals, and export planning;
and
``(iii) 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 left;
(C) in subparagraph (C), by inserting ``and the
Administration'' after ``Center'';
(D) in subparagraph (Q), by striking ``and'' at the end;
(E) in subparagraph (R), by striking the period at the end
and inserting ``; and''; and
(2) in paragraph (5)--
(A) by moving the margin 2 ems to the left;
(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 is
not renewed or extended, award of the succeeding contract
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. 502. 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 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 of fiscal years 1998 and 1999.
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. VERY SMALL BUSINESS CONCERNS.
Section 304(i) of Public Law 103-403 (15 U.S.C. 644 note)
is amended by striking ``1998'' and inserting ``2000''.
SEC. 505. 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. 506. TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS
CONCERNS HARMED BY NAFTA.
The Small Business Administration shall coordinate
assistance programs currently administered by the
Administration to counsel small business concerns harmed by
the North American Free Trade Agreement to aid such concerns
in reorienting their business purpose.
TITLE VI--SERVICE DISABLED VETERANS
SEC. 601. PURPOSES.
The purposes of this title are--
(1) to foster enhanced entrepreneurship among eligible
veterans by providing increased opportunities;
(2) to vigorously promote the legitimate interests of small
business concerns owned and controlled by eligible veterans;
and
(3) to ensure that those concerns receive fair
consideration in purchases made by the Federal Government.
SEC. 602. DEFINITIONS.
For purposes of this title, the following definitions
apply:
(1) Administration.--The term ``Administration'' means the
Small Business Administration.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(3) Eligible veteran.--The term ``eligible veteran'' means
a disabled veteran, as defined in section 4211(3) of title
38, United States Code.
(4) Small business concern owned and controlled by eligible
veterans.--The term ``small business concern owned and
controlled by eligible veterans'' means a small business
concern (as defined in section 3 of the Small Business Act)--
(A) which is at least 51 percent owned by 1 or more
eligible veteran, or in the case of a publicly owned
business, at least 51 percent of the stock of which is owned
by 1 or more eligible veteran; and
(B) whose management and daily business operations are
controlled by eligible veterans.
SEC. 603. REPORT BY SMALL BUSINESS ADMINISTRATION.
(a) Study and Report.--Not later than 6 months after the
date of the enactment of this Act, the Administrator shall
conduct a comprehensive study and issue a final report to the
Committees on Small Business of the House of Representatives
and the Senate containing findings and recommendations of the
Administrator on--
(1) the needs of small business concerns owned and
controlled by eligible veterans;
(2) the availability and utilization of Administration
programs by small business concerns owned and controlled by
eligible veterans;
(3) the percentage, and dollar value, of Federal contracts
awarded to small business concerns owned and controlled by
eligible veterans in the preceding 5 fiscal years; and
[[Page H8077]]
(4) methods to improve Administration and other programs to
serve the needs of small business concerns owned and
controlled by eligible veterans.
The report also shall include recommendations to Congress
concerning the need for legislation and recommendations to
the Office of Management and Budget, relevant offices within
the Administration, and the Department of Veterans Affairs.
(b) Conduct of Study.--In carrying out subsection (a), the
Administrator--
(1) may conduct surveys of small business concerns owned
and controlled by eligible veterans and service disabled
veterans, including those who have sought financial
assistance or other services from the Administration;
(2) shall consult with the appropriate committees of
Congress, relevant groups and organizations in the non-profit
sector, and Federal or State government agencies; and
(3) shall have access to any information within other
Federal agencies which pertains to such veterans and their
small businesses, unless such access is specifically
prohibited by law.
SEC. 604. INFORMATION COLLECTION.
After the date of issuance of the report required by
section 603, the Secretary of Veterans Affairs shall, in
consultation with the Assistant Secretary for Veterans'
Employment and Training and the Administrator, engage in
efforts each fiscal year to identify small business concerns
owned and controlled by eligible veterans in the United
States. The Secretary shall inform each small business
concern identified under this section that information on
Federal procurement is available from the Administrator.
SEC. 605. STATE OF SMALL BUSINESS REPORT.
Section 303(b) of the Small Business Economic Policy Act of
1980 (15 U.S.C. 631b(b)) is amended by striking ``and female-
owned businesses'' and inserting ``, female-owned, and
veteran-owned businesses''.
SEC. 606. LOANS TO VETERANS.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a))
is amended by inserting after paragraph (7) the following:
``(8) The Administration is empowered to make loans under
this subsection to small business concerns owned and
controlled by disabled veterans. For purposes of this
paragraph, the term `disabled veteran' shall have the meaning
such term has in section 4211(3) of title 38, United States
Code.''.
SEC. 607. ENTREPRENEURIAL TRAINING, COUNSELING, AND
MANAGEMENT ASSISTANCE.
The Administrator shall take such actions as may be
necessary to ensure that small business concerns owned and
controlled by eligible veterans have access to programs
established under the Small Business Act which provide
entrepreneurial training, business development assistance,
counseling, and management assistance to small business
concerns. Such programs include the Small Business
Development Center, Small Business Institute, Service Corps
of Retired Executives (SCORE), and Active Corps of Executives
(ACE) programs.
SEC. 608. GRANTS FOR ELIGIBLE VETERANS OUTREACH PROGRAMS.
Section 8(b) of the Small Business Act (15 U.S.C. 637(b))
is amended--
(1) by striking ``and'' at the end of paragraph (15);
(2) by striking the period at the end of the first
paragraph (16) and inserting ``; and'';
(3) by striking the second paragraph (16); and
(4) by adding at the end the following new paragraph:
``(17) to make grants to, and enter into contracts and
cooperative agreements with, educational institutions,
private businesses, veterans' nonprofit community-based
organizations, and Federal, State, and local departments and
agencies for the establishment and implementation of outreach
programs for disabled veterans, as defined in section 4211(3)
of title 38, United States Code.''.
SEC. 609. OUTREACH FOR ELIGIBLE VETERANS.
The Administrator, the Secretary of Veterans Affairs, and
the Assistant Secretary of Labor for Veterans' Employment and
Training shall develop and implement a program of
comprehensive outreach to assist eligible veterans. Such
outreach shall include business training and management
assistance, employment and relocation counseling, and
dissemination of information on veterans benefits and
veterans entitlements.
TITLE VII--SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM.
SEC. 701. AMENDMENTS.
Section 9 of the Small Business Act (15 U.S.C. 638) is
amended--
(1) in subsection (b)(7), by inserting ``, and the
Committee on Science'' after ``of the Senate'';
(2) in subsection (e)(4)(A) by striking ``(ii)'';
(3) in subsection (e)(6)(B), by inserting ``agency'' after
``to meet particular'';
(4) in subsection (n)(1)(C), by striking ``and 1997'' and
inserting in lieu thereof ``through 2000'';
(5) in subsection (o)--
(A) by redesignating paragraphs (8) through (11) as
paragraphs (10) through (13), respectively; and
(B) by inserting after paragraph (7) the following new
paragraphs:
``(8) include, as part of its annual performance plan as
required by section 1115(a) and (b) of title 31, United
States Code, a section on its STTR program, and shall submit
such section to the Committee on Small Business of the
Senate, and the Committee on Science and the Committee on
Small Business of the House of Representatives;
``(9) collect such data from awardees as is necessary to
assess STTR program outputs and outcomes;''; and
(6) by adding at the end the following new subsections:
``(s) Outreach Program.--Within 90 days after the date of
the enactment of this subsection, the Administrator shall
develop and begin implementation of an outreach program to
encourage increased participation in the STTR program of
small business concerns, universities, and other research
institutions located in States in which the total number of
STTR awards for the previous 2 fiscal years is less than 20.
``(t) Inclusion in Strategic Plans.--Program information
relating to the SBIR and STTR programs shall be included by
Federal agencies in any updates and revisions required under
section 306(b) of title 5, United States Code.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri [Mr. Talent] and the gentleman from New York [Mr. LaFalce]
each will control 20 minutes.
The Chair recognizes the gentleman from Missouri [Mr. Talent].
Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume.
The primary purpose of H.R. 2261 is to reauthorize the Small Business
Administration and the programs which that agency manages by authority
granted under the Small Business Act and the Small Business Investment
Act through fiscal year 2000.
The committee regularly authorizes these programs for a 3-year
period, with the last reauthorization occurring in 1994 during the 103d
Congress. Programs include the financial programs of the SBA: the 7(a)
general business loan guarantee, Section 504 Certified Development
Company program, and other programs.
The programs of the SBA, Mr. Speaker, annually provide assistance to
over 100,000 small businesses all across the United States. These
financial programs remedy shortfalls in access to credit and capital
for small businesses that are in need because of unfortunate
imperfections in the national economy.
By assuring financial assistance for amounts as small as $500 to as
much as $1,250,000, the SBA and its private sector partners, bank and
non-bank lenders, surety bond insurers, et cetera, provide a vital
impetus to the small business sector. The SBA also provides hundreds of
millions of dollars in vital disaster assistance to small businesses
and homeowners every year.
H.R. 2261 reflects the committee's dedication to and support for
these programs and the belief that they are not only necessary but also
constantly in need of refinement and improvement as the economy shifts
and changes. The bill includes not only the basic reauthorization
language necessary to continue regular operations but also changes to
the underlying program structures.
The bill includes significant improvements in the Preferred Certified
Lender Program of the Section 504 Certified Development Company
Program. These changes serve to help implement the committee's goals of
increased reliance on private sector lending partners. The committee
seeks to both enable the CDC's to take additional responsibility for
servicing, liquidation and litigation of defaulted loans, and to
improve the recoveries for this program.
H.R. 2261 also continues the committee's work on improving the Small
Business Investment Company Program. Last year this program underwent
significant changes, and this year the committee seeks to build on
those improvements by providing SBIC's with increased flexibility and
some responsiveness in order to better allow the SBIC's to interact in
the marketplace and thereby reduce risks of loss.
The measure before us has two additional components that were added
to this legislation since our committee reported it. These additional
elements have been added as a result of bipartisan efforts and, in
fact, have involved the collective work of multiple committees. Title
VI of H.R. 2261, as amended, contains a number of provisions which are
designed to assist the Federal Government in better serving service
disabled veterans and small businesses owned by service disabled
veterans. These measures are the product of bipartisan efforts by
myself and
[[Page H8078]]
the gentleman from New York [Mr. LaFalce], the committee's ranking
member, working together with the chairman of the Committee on Rules
and the chairman of the Committee on Veterans' Affairs.
Title VII of this legislation is also the product of a bipartisan and
multicommittee effort between the Committee on Small Business and the
Committee on Science. Title VII contains H.R. 2429, as reported by the
Committee on Science, which is a 3-year reauthorization of the Pilot
Small Business Technology Transfer Program. Building upon the
established model of the Small Business Innovation Research Program,
the STTR program provides the statutory basis for structured
collaborations between small technology entrepreneurs and nonprofit
research institutions, such as universities or federally funded
Research and Development Centers, to foster commercialization of the
results of federally sponsored research.
Mr. Speaker, I urge my colleagues to support small business, the
engine of our economy, by voting for this needed legislation.
Mr. Speaker I reserve the balance of my time.
Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
(Mr. LaFalce asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Mr. Speaker, I rise in strong support of H.R. 2261. I
concur fully in the remarks of the gentleman from Missouri [Mr.
Talent], the distinguished chairman of the Committee on Small Business.
Mr. Speaker, I do not think it is necessary to reiterate the contents
of this bill. Suffice it to say it is an important bill. The bill is a
product of tremendous cooperation between the gentleman from Missouri
[Mr. Talent] and myself, between his staff and my staff, and amongst
the various committees that were involved, too, the Committee on Rules,
the Subcommittee on Technology, et cetera.
The gentleman from Missouri [Mr. Talent] has shown excellence as
chairman of the Committee on Small Business. He will do nothing but
grow in that position and become even more excellent, but I hope he
will yield that position unwillingly at the end of 1998.
Mr. Speaker, I rise in strong support of H.R. 2261. The bill, which
was marked up by the Small Business Committee in late July, received
broad bipartisan support and was unanimously adopted by the Small
Business Committee. It reauthorizes and makes improvements to a number
of excellent SBA programs that have always had, and today do have broad
bipartisan support in this House.
The small business community has long been a key source of economic
activity and a spur to job creation. But access to capital has been a
recurrent problem. The programs of the SBA annually provide over $13
billion of financial assistance to over 100,000 small businesses,
remedying shortfalls in access to credit and capital for small
business.
By providing financial assistance for amounts as small as $500 to as
much as $1,250,000, the SBA and its private sector partners--bank and
non-bank lenders, surety bond insurers, certified development
companies, microlenders, and small business investment companies--play
a vital role for small businesses in this economy. The SBA is
particularly successful because it relies mostly on private capital to
provide financing to small businesses. In addition, the SBA has become
more responsive to the needs of small businesses by creating loan
programs geared to their special needs, including the LowDoc Program
with reduced paperwork for smaller borrowers, the Export Working
Capital Program for small business exporters, and the Microloan
Program. Also, the SBA also provides millions of dollars in vital
disaster assistance to small businesses and homeowners every year.
In addition, the SBA also provides counseling to small business
owners. In fiscal year 1997, the agency has provided counseling and
training to over 1 million of its small business clients through
resource partners such as the Service Corps of Retired Executives
[SCORE] and Small Business Development Centers [SBDC's].
These billions of dollars in assistance are provided at a total cost
of $850 million for programs and salaries and expenses.
The bill reauthorizes the Small Business Administration's programs
for 3 years, fiscal year 1998 through fiscal year 2000, and also makes
significant improvements to them. The programs include the section 7(a)
general business loan guarantee, the section 504 Certified Development
Company [CDC], the Microloan, the Small Business Investment Company
[SBIC], SBDC, and SCORE Programs. I would like to describe some of the
bill's more important provisions.
Title I of the bill sets forth the authorization levels for the
various SBA programs. For example, in fiscal year 1998, funding is
provided to allow for $10 billion in guaranteed loans, with an increase
to $11 billion in fiscal year 1999, and $13 billion in fiscal year
2000. Likewise the section 504 [CDC] program is authorized at $3
billion in fiscal year 1998, an increase of 340 million over current
year levels, $3.5 billion in fiscal year 1991, and $4.5 billion in the
year 2000. The bill authorizes increases in the Micro-loan Program,
from increased technical assistance to more funds for guaranteed and
direct loans.
Title II improves various financial assistance programs to make them
more sound, by increasing funding from the private sector and
effectively liquidating those loans which do fail.
In particular, title II makes significant improvements in the section
504 [CDC] program. It expands the program to qualify more Certified
Development Companies [CDC's]; establishes loan loss reserves to
preferred lender participants; authorizes participating CDC's to
foreclose on, liquidate, and litigate on defaulted loans, which should
free up SBA resources and substantially improve recovery rates for
those loans which do fail; allows sellers of property to provide
financing of up to 50 percent, as long as the seller is subordinate to
the SBA's interest in the property; and prevents SBA from delaying loan
approval due to environmental concerns, if a prospective borrower
obtains a letter of nonliability from the EPA or a State environmental
agency concerning any hazardous conditions and otherwise cooperates in
remediation efforts.
Title II also makes several minor changes and reforms to the SBIC
program. The bill would provide SBICs with greater flexibility and
better access to financial markets and would improve the operations of
SBA's investment division.
Finally, title II permanently authorizes the Microloan Program,
changing it from a demonstration program, and extends the guaranteed
Microloan Program by 3 years. This program provides loans of amounts
below $25,000 and is designed to provide technical assistance, business
counseling grants, and financial assistance to very small businesses,
in particular startups and home-based businesses. The Microloan Program
has made over 5,000 loans totaling over $60 million to small businesses
since 1991.
In addition, the bill authorizes the SBA and its microlending
partners to provide supplemental technical assistance in the form of
transportation and child care assistance, to be paid from funds made
available by other agencies. The House report on this bill reflected a
concern expressed by two Democratic members, Messrs. Baldacci and
Flake, regarding the availability of transportation in economically
depressed areas and the obstacles it poses to people looking for work.
The committee encourages funding of for-profit and cooperative
transportation businesses to provide links between these communities
and job opportunities.
Title III of the bill expands on SBA's programs for Women's Business
Enterprises, including Women Business Centers, the SBA's Office of
Women's Business Ownership, and the Women's Business Council, an
effective advocacy organization. I am especially pleased that this bill
continues strong support for women's business efforts, including
expanding the women's business center program, which provides seed
funding for business training centers across the country and is one of
the most successful programs which SBA operates. The bill establishes a
funding formula for grantees receiving funds under this program,
increasing the time to 5 years, but requiring an increasing number of
non-Federal dollars for each Federal dollar, 2 non-Federal dollars for
each Federal dollar in funding during years four and five, for example.
Title V contains miscellaneous provisions. For example, section 502
encourages SBA to develop and expand an international trade data
network. This title also extends the Preferred Surety Bond Program
through fiscal year 2000. And, section 506 directs SBA to coordinate
its programs and offer specific assistance to small businesses that may
have been adversely affected by NAFTA.
Chairman Talent has included in the bill a manager's amendment, which
includes, first, a technical amendment; second, provisions to require
SBA to conduct a study on the small business needs of disabled veterans
and to expand SBA outreach to such veterans; and third, a
reauthorization for the Small Business Technology Transfer [STTR]
Program. After negotiations with the Science Committee, Chairman Talent
and I agreed to a simple bill which reauthorizes the STTR program for 3
years. The bill, reported out by the Science Committee, does not in any
way change the STTR program.
In summary, the bill will allow continuation of these current SBA
programs, some of the
[[Page H8079]]
most effective business programs operated by the U.S. Government, and
makes changes to improve their effectiveness for small businesses,
while protecting the government's interest. I strongly urge an
affirmative vote for H.R. 2261 today, so that we could go to conference
before the financial assistance and other SBA programs expire on
September 30. Finally, I want to thank Chairman Talent and his staff
for their cooperation in the process of coming up with this excellent
bill.
Mr. Speaker, I reserve the balance of my time.
Mr. TALENT. Mr. Speaker, I thank the gentleman for his kind comments,
and I yield 2 minutes to the gentleman from Florida [Mr. Miller].
Mr. MILLER of Florida. Mr. Speaker, as a former small businessman
before entering Congress, I certainly recognize the importance of small
business. My community in Florida, in Sarasota, is totally dependent on
small business. And certainly the Small Business Administration does a
lot of very fine things and should continue.
{time} 1315
I have some concerns, this being brought up under suspension, for a
rather significant increase in money, and maybe I need to have
explained to me a little bit more, because the total amount of money
authorized is a significant increase over what is currently being
appropriated, and I recognize this still has to go through the
appropriation process, and as a member of the Committee on
Appropriations, though not the subcommittee for small business, I will
be able to follow this.
But under the 1997 bill, appropriation bill, we have an authorization
or outlays of $820 million, and it is going to increase next year to
$1.3 billion. So it is a rather significant increase that concerns me,
that we are doing this under suspension, where we have no opportunity
to offer amendments and question it. While there are many good
programs, there have been concerns about set-aside issues also under
the Small Business Administration.
So, I, or I think the gentleman from California [Mr. Condit], may be
asking for a recorded vote because of concerns of bringing this under
this particular suspension.
Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume,
and I appreciate the gentleman's comments.
Let me just say that if we take the reauthorization levels over the
next 3 years, the authorization is not going up, it is going down. The
bill does not mention or refer to any of the set-aside programs in the
Small Business Administration, and that was done deliberately as a
result of agreement between the gentleman and myself. In fact, this is
one of the few major bills dealing with any of the agencies which does
not mention any of the set-aside programs.
For example, we have voted on appropriations bills that have come out
of the Committee on Appropriations, in which the gentleman serves, most
of which have some kind of set-aside programs. We are debating right
now the Commerce, State, and Justice appropriations bill which funds
the Small Business Administration, including the 8(a) program which is
a set-aside program, and that might be a good opportunity, if the
gentleman wants to raise the point, to raise that whole issue. We have
not done it here.
This is a bill which reauthorizes a number of important programs,
including the disaster relief program. Members need to understand that
if we do not pass this bill, that program will run out at the end of
the fiscal year unless it is extended by a CR.
We are moving toward privatization of a number of these lending
programs and greater efficiency in these programs. The gentleman knows
that the appropriations for the SBA is going down, and I would expect
that it would continue to go down under this authorization, and that is
certainly my intention.
As for bringing up on suspension, we are getting near the end of the
year. The bill came out unanimously from committee. It does an awful
lot of good things, and up until the last few days nobody had raised
any issues. I would maintain that the issue regarding set-asides is
extraneous to this bill, although, of course, Members are entitled to
conclude what they want.
So I hope the Members will support this, and I understand the issue
regarding set-asides is a very important one. I feel strongly about it
myself, but it is truly extraneous to this bill, and I would suggest
that Members look for other vehicles if they do want to raise the
issue.
Mr. LaFALCE. Mr. Speaker, I yield 5 minutes to the gentleman from
Texas [Mr. Bentsen].
(Mr. BENTSEN asked and was given permission to revise and extend his
remarks.)
Mr. BENTSEN. Mr. Speaker, I thank the gentleman for yielding this
time to me, and there is an issue within this bill that I wanted to
discuss, if I could, with both the chairman and the ranking member as
it relates to the unsecuritized portion of 7(a) loans.
I am a former, I served on this committee in the last Congress, I do
not serve on the committee in this Congress, and in the last Congress
when we were working on this bill, the issue of certain SBA rules as it
related to the unsecuritized portion of 7(a) loans came up.
I have a great deal of concern with the SBA and the direction that
they are headed on this. I appreciate the fact that the bill, as I
understand it, either asked or requires the SBA to address this issue
within 90 days of enactment, and, if I could, during my time I would
like to discuss this with both the chairman and the ranking member.
Mr. TALENT. Mr. Speaker, will the gentleman yield?
Mr. BENTSEN. I yield to the gentleman from Missouri.
Mr. TALENT. I would be happy to discuss this with the gentleman. This
is the securitization the gentleman has been talking about?
Mr. BENTSEN. The gentleman is correct.
Mr. TALENT. Mr. Speaker, I appreciate the gentleman's good work on
this.
The agency has had this issue, as the gentleman knows, since the bill
we passed last year. I am hopeful that the agency can come up with a
set of regulations that do advance the ability of both bank and nonbank
lenders to securitize these on the secondary market as much as is
consistent, of course, with sound lending practices, and I recognize
the gentleman's background on that, and I am very pleased that he is
working to midwife some acceptable compromise in that area.
Mr. BENTSEN. Also, reclaiming my time, I have been in some meetings
with the SBA about this. I agree that we need to ensure that there are
prudent lending standards that ensure the safety and soundness as it
relates to the tax back guarantee of the 7(a) loans and how that
relates to the unsecuritized portion.
I do have some concerns with what SBA has been proposing that may, in
fact, go overboard and, in fact, may have additional motives beyond
safety and soundness, which is what I think primarily the concern of
the committee and House ought to be.
Mr. LaFALCE. Mr. Speaker, will the gentleman yield?
Mr. BENTSEN. I yield to my colleague from New York, who is also aware
of this.
Mr. LaFALCE. Mr. Speaker, this is an issue that both the chairman and
I have discussed at considerable length, we have discussed with
representatives from the Small Business Administration, and I am
concerned that we do not have some more definitive position coming from
the SBA.
We had hoped in the last Congress that they would have promulgated
definitive regulations by this time. But in consultation with them, I
became concerned that they might be confusing their purposes, that they
instead of focusing exclusively on securitization issues, on
creditworthy issues and safety and soundness issues, et cetera, they
might be focusing additionally on the issue of concentration of
lending. And I think it is appropriate for them to focus on
concentration of lending and do something about it, if it is necessary,
but not within the context of securitization rules. They are totally
separate and distinct. They should deal with securitization issues and
promulgating securitization rules. They should deal with concentration
issues by promulgating concentration rules if need be.
Further, there is clearly a distinction between insured depository
institutions and nonbank lenders, and while we want rough parity, that
does not mean that we must have identity of
[[Page H8080]]
treatment; at least that is my judgment, and of course it is up to the
SBA to make their own independent judgment exclusively based upon their
perception of the public interest.
Mr. BENTSEN. Mr. Speaker, I thank the gentleman for his comment, and,
reclaiming my time, I will just close by saying that we need and the
SBA needs to understand that we are dealing with sophisticated markets
here which are fairly transparent and that I would hope that we would
continue to have as much efficiency as the chairman spoke about while
maintaining and preserving safety and soundness.
And I also would like to say for Members of the House that I
congratulate the chairman on this bill, I think, being his first major
bill, his first time as chairman, and of course the ranking member, and
I am in strong support of the legislation, and I appreciate the fact
that it does address this issue.
Mr. LaFALCE. Mr. Speaker, I have no further requests for time, and
therefore I yield back the balance of my time.
Mr. TALENT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I just want to say because I want to make sure I did not
misspeak before, when we authorize these lending programs in this
committee, the authorization level goes to the total amount of loans
that are authorized; in other words, the total loan volume.
We do expect that as a result of the kinds of changes that are being
instituted in the last few years and over at the agency the amount of
loan volume that we will be able to support with current or less
appropriations levels is going to go up. In other words, I anticipate
that we will continue to reduce appropriations for the lending programs
for this agency.
At the same time, I do expect that the loan volume is going to go up,
so I think we are going to see appropriations going down; it is going
down this year. This agency is more than going to do its part in terms
of meeting a balanced budget, but I would expect the overall loan
volumes, I hope that we can support with those appropriations, to go
up.
Mr. SENSENBRENNER. Mr. Speaker, last week in a bipartisan effort, the
Committee on Science favorably reported H.R. 2429, as amended, a bill
to reauthorize the Small Business Technology Transfer Program [STTR]
through fiscal year 2000. This week, the Committee on Science and the
Committee on Small Business, again working in a bipartisan fashion,
have agreed to incorporate H.R. 2429 into H.R. 2261, the Small Business
Programs Reauthorization and Amendments Acts of 1997.
I would like to thank the ranking member of the Science committee,
Mr. Brown, the Subcommittee on Technology chairwoman, Mrs. Morella, and
the ranking member of that subcommittee, Mr. Gordon, for their efforts
to reauthorize STTR. I would also like to thank the chairman of the
Committee on Small Business, Mr. Talent, for the great cooperation he
and all his staff have shown in working with the Science Committee to
reauthorize STTR.
STTR was started as a pilot program in 1994. STTR was enacted to
provide high technology, small businesses across the country an
opportunity to receive Federal R&D funding for ideas that were
originated in, and developed in cooperation with, nonprofit research
institutions such as universities. It is financed by a 0.15 percent
set-aside from the extramural R&D budgets of five agencies: the
Department of Defense, the Department of Energy, the National
Institutes of Health, the National Aeronautics and Space
Administration, and the National Science Foundation.
These ideas are developed under STTR in three phases. Phase I is a 1-
year grant of up to $100,000. It is primarily used to research the
viability of a technology. After phase I, a company may apply for phase
II funding. Phase II is a 2-year award, of up to $500,000. Phase II
award winners will further develop the technology--with the goal of
achieving phase III. Phase III is defined as commercialization of the
technology, including use of the technology by the Government. STTR
funds are not used for phase III.
H.R. 2429 will reauthorize STTR at its current set-aside of 0.15
percent through fiscal year 2000. The measure also makes some
significant improvements to the program.
H.R. 2429 requires the STTR participating agencies to include STTR in
their annual performance plans, as required by the Results Act. This
plan will result in each agency defining program goals and setting out
metrics to measure these goals. I believe that the plan will give
Congress a clearer picture of the effectiveness of the STTR Program. In
addition to the performance plan, H.R. 2429 requires each agency to
include programs under 15 U.S.C. 638 in their strategic plan updates,
again a requirement under the Results Act.
The STTR program has been criticized in some circles for the
disparity of awards among States. To address this concern, H.R. 2429
mandates the Small Business Administration to develop an outreach
program for small businesses and universities from States that have not
received 20 or more STTR or Small Business Innovation Research [SBIR]
awards in the previous 2 fiscal years. I do not favor mandating a set-
aside for these States, but I do believe that through this program we
will see an increase in the number of award applications, which should
serve to strengthen STTR.
Finally, H.R. 2429 assures that the Committee on Science will be
added to the list of committee's receiving the Small Business
Administration's annual report on the STTR and SBIR Programs.
I am pleased that H.R. 2429 will be incorporated in its totality into
H.R. 2261. It is also my understanding that the Committee on Science
will have an equal number of conferees as the Small Business Committee
on the STTR provision, when and if conference occurs with the Senate. I
look forward to working with the Small Business Committee in
representing the House position on the STTR Program.
Mr. WEYGAND. Mr. Speaker, I rise in support of H.R. 2261, the Small
Business Programs Reauthorization and Amendments Act of 1997. First, I
would like to thank Chairman Talent and Mr. LaFalce for their
leadership and for producing a bill that will undoubtedly benefit all
small businesses. This bill reauthorizes the Small Business
Administration and its programs which provide access to capital and
services that might not otherwise be available to small business
owners.
To highlight the SBA's importance, I would like too showcase what the
SBA is doing in my district, in Rhode Island. Over the past 4 years
there have been significant increases in the number of Small Business
Administration loans awarded. In fact the number of loans has more than
doubled. In 1993, there were 115 approved loans totaling $32.6 million,
in 1996, there were 292 loans totaling $53.3 million.
Importantly, in my district alone there have been dramatic
improvements in access to capital for women, minorities, and veterans.
In 1993, there were 8 loans to minorities, 17 to women, and 14 to
veterans. In 1996, we had 16 loans to minorities, 40 to women, and 46
to veterans. That is, nearly 35 percent of all approved SBA loans are
going to these three groups. By reauthorizing these programs we will
continue to provide the access to capital that those groups need
allowing us to expand opportunities to women, minorities, and veterans.
I cannot overstate the impact of small business on Rhode Island's
economy. Approximately 97 percent of all businesses in Rhode Island are
classified as small businesses. These companies employ thousands of
Rhode Islanders and provide the economic foundation of my State and our
country. Small businesses play a vital role in job creation and provide
endless opportunities for our citizens.
Along with the financial programs, the SBA provides services to
assist business owners in becoming or remaining successful. Once a
business has a loan we must make sure that the business stays healthy
and profitable enough to repay that loan. Services provided by programs
such as Small Business Development Centers, Service Corps of Retired
Entrepreneurs, Business Information Centers, Minority Enterprise
Development program, and Women's Business Enterprise program supply
information and counseling services to business owners. These services
are invaluable to the smallest businesses who do not have the budgets
to hire high-priced consultants.
Small businesses are the backbone of our economy. They account for 53
percent of the Nation's private workforce. Small businesses generate
more than 50 percent of the gross domestic product and are the primary
source growth across the country. We, as leaders, must do all we can to
foster and encourage the development and growth of small businesses and
this bill moves us in that direction. This bill will allow us to
continue to support existing small businesses and encourage the
development of new ones, both in Rhode Island and across the country. I
urge my colleagues to support it.
Mr. TALENT. Mr. Speaker, the primary purpose of H.R. 2261 is to
reauthorize the Small Business Administration [SBA] and the programs
which that agency manages by authority granted under the Small Business
Act and the Small Business Investment Act through fiscal year 2000. The
committee regularly authorizes these programs for a 3-year period, with
the last reauthorization occurring in 1994 during the 103d Congress.
The programs include the financial programs of the SBA: the 7(a)
general business loan guarantee program, the Section 504 Certified
Development
[[Page H8081]]
Company program, the Microloan program and the Small Business
Investment Company [SBIC] program.
In addition, the bill will reauthorize the technical assistance and
procurement programs of the SBA--the Service Core of Retired Executives
[SCORES], the Women's Business Center program, the Small Business
Development Center [SBDC] program, the Competitiveness Demonstration
program, and other.
This legislation also changes and improves various programs,
specifically modifying the Section 504 Preferred Certified Lender
Program [PCLP], the SBIC program, the Women's Business Center program,
and the SBDC program.
The programs of the Small Business Administration annually provide
over $14 billion of financial assistance to over 100,000 small
businesses all across the United States. These financial programs
remedy shortfalls in access to credit and capital for small businesses
that are in need because of unfortunate imperfections in our national
economy. By assuring financial assistance for amounts as small as $500
to as much as $1,250,000, the SBA and its private sector partners--bank
and non-bank lenders, surety bond insurers, certified development
companies, microlenders, and small business investment companies--
provide a vital impetus to the small business sector of the economy.
The SBA also provides hundreds of millions of dollars in vital disaster
assistance to small businesses and homeowners every year.
H.R. 2261 reflects the committee's dedication to and support for
these programs and the belief that they are not only necessary but also
constantly in need of refinement and improvement as the economy shifts
and changes. The bill includes not only the basic reauthorization
language necessary to continue regular operations but also changes to
the underlying program structures.
The bill includes significant improvements in the Preferred Certified
Lender Program of the Section 504 Certified Development Company
Program. These changes serve to help implement the committee's goals of
increased reliance on private sector lending partners. The committee
seeks to both enable the certified development companies to take
additional responsibility for servicing, liquidation, and litigation of
defaulted loans, and to improve the recoveries for this program.
Committee hearings revealed that recoveries are, in fact, the largest
single factor in the increased subsidy cost of the 504 program. The
committee continues to be concerned over the subsidy estimates for the
7(a) and 504 programs and makes these changes in the 504 program in
order to encourage private sector participation in the liquidation
process.
H.R. 2261 also continues the committee's work on improving the Small
Business Investment Company program. Last year this program underwent
significant changes, and this year the committee seeks to build on
those improvements by providing SBIC's with increased flexibility and
some responsiveness in order to better allow the SBIC's to interact in
the marketplace and thereby reduce risks of loss.
The bill also reauthorizes and improves the Microloan program. Begun
in 1991, this program has served the smallest and often least noticed
segment of the small business community. The committee has recognized
the efficacy of this program and changed it from demonstration to
permanent program status.
In addition to financial assistance, the SBA also provides technical
and managerial advice and assistance to hundreds of thousands of small
businesses every year through the small business development
centers, the women's business centers, and the Service Corps of Retired
Executives. The committee reauthorizes these programs in H.R. 2261 and
makes some valuable improvements to both the Women's Business Center
and Small Business Development Center programs.
The measure before us has two additional components that were added
to this legislation since our committee reported it. These additional
elements have been added as a result of bipartisan efforts; and, in
fact, have involved the collective work of multiple committees. Title
VI of H.R. 2261, as amended, contains a number of provisions which are
designed to assist the Federal Government in better serving service
disabled veterans and small businesses owned by service disabled
veterans. These measures are the product of bipartisan efforts by
myself and our committee's ranking member, working together with the
chairman of the Rules Committee and the chairman of the Committee on
Veterans' Affairs.
Title VII of this legislation is also the product of a bipartisan and
multicommittee effort between the Small Business Committee and the
Science Committee. Title VII contains H.R. 2429, as reported by the
Committee on Science, which is a 3-year reauthorization of the Pilot
Small Business Technology Transfer [STTR] program. Building upon the
established model of the Small Business Innovation Research [SBIR]
program, the STTR Program provides the statutory basis for structured
collaborations between small technology entrepreneurs and nonprofit
research institutions, such as universities or Federal-funded research
and development centers [FFRDC's], to foster commercialization of the
results of federally sponsored research.
Mr. Speaker, H.R. 2261 is the product of bipartisan efforts in our
committee to reauthorize the Small Business Administration through
fiscal year 2000. It also reflects the efforts of other individuals and
committees and their staffs. I would like to thank Mr. Sensenbrenner,
the chairman of the Committee on Science, and Mr. Brown, his ranking
member, for their work on H.R. 2429, which has become title VII of this
legislation. I would also like to express my appreciation to their
staff who worked on this. I would also like to thank Mr. Stump, the
chairman of the Veterans' Affairs Committee, and Mr. Solomon, the
chairman of the Rules Committee, along with their staffs, for their
help in working on title VI of this legislation. I would also like to
thank our committee's ranking member, Mr. LaFalce, for all of his help
in helping to craft this legislation and assisting in bringing it to
this floor. Finally, I would like to acknowledge the Small Business
Committee staff who worked on this legislation: Emily Murphy, Mary
McKenzie, Charles ``Tee'' Rowe, and Harry Katrichis for the majority,
and Jeanne Roslanowick, Steve McSpadden, and Tom Powers for the
minority.
I urge my colleagues to vote for this important legislation.
Mrs. MORELLA. Mr. Speaker, I am delighted that the bipartisan bill
H.R. 2429 will be included as an amendment to the small business
reauthorization bill. I would like to thank Chairman Sensenbrenner;
ranking member, Mr. Brown; the ranking member of the Subcommittee on
Technology, Mr. Gordon; Mr. Bartlett, as well as the other members from
the Committee on Small Business who have cosponsored H.R. 2429.
The STTR program expires on September 30th of this year. H.R. 2429
will reauthorize STTR at its current set-aside level through fiscal
year 2000. This will put STTR on the same timeline as its parent
program, the Small Business Innovation Research Program.
STTR fosters collaboration between small businesses and research
institutions to develop high-technology projects that can one day reach
the marketplace or be used by the Federal Government. Since its
inception, STTR has made nearly 800 awards totaling over $115 million.
Of those totals, 42 awards for $4.8 million have gone to Maryland small
businesses.
As Chairman Sensenbrenner has stated, H.R. 2429 addresses some
important concerns regarding the STTR Program, including establishing
goals for the program, and establishing an outreach program to increase
the participation of those states that have been under-represented in
the STTR Program.
STTR began in 1994. Very few ideas have even reached the phase II
level. Because of its infancy, it was difficult to determine whether
STTR was a success or not. I hope that--with the changes made by H.R.
2429--along with 3 more years of data, Congress will have a better idea
of the effectiveness and success of the program when its
reauthorization expires in the year 2000.
Mr. TALENT. I have no further speakers on this side, Mr. Speaker, and
so I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Missouri [Mr. Talent] that the House suspend the rules
and pass the bill, H.R. 2261, as amended.
The question was taken.
Mr. MILLER of Florida. Mr. Speaker, I object to the vote on the
ground that a quorum is not present and make the point of order that a
quorum is not present.
The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.
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