[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[House]
[Pages H10486-H10504]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SMALL BUSINESS REAUTHORIZATION ACT OF 1997

  Mr. TALENT. Mr. Speaker, I move to suspend the rules and concur in 
the Senate amendment to the House amendment to the Senate bill, S. 
1139, to reauthorize the programs of the Small Business Administration, 
and for other purposes.
  The Clerk read as follows:

       Senate amendment to House amendment:
       In lieu of the matter proposed to be inserted by the House 
     amendment to the text of the bill, insert:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Reauthorization Act of 1997''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective date.

                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorizations.

                     TITLE II--FINANCIAL ASSISTANCE

                     Subtitle A--Microloan Program

Sec. 201. Microloan program.
Sec. 202. Welfare-to-work microloan initiative.

         Subtitle B--Small Business Investment Company Program

Sec. 211. 5-year commitments for SBICs at option of Administrator.
Sec. 212. Underserved areas.
Sec. 213. Private capital.
Sec. 214. Fees.
Sec. 215. Small business investment company program reform.
Sec. 216. Examination fees.

           Subtitle C--Certified Development Company Program

Sec. 221. Loans for plant acquisition, construction, conversion, and 
              expansion.
Sec. 222. Development company debentures.
Sec. 223. Premier certified lenders program.

                  Subtitle D--Miscellaneous Provisions

Sec. 231. Background check of loan applicants.
Sec. 232. Report on increased lender approval, servicing, foreclosure, 
              liquidation, and litigation of section 7(a) loans.
Sec. 233. Completion of planning for loan monitoring system.

                TITLE III--WOMEN'S BUSINESS ENTERPRISES

Sec. 301. Interagency committee participation.
Sec. 302. Reports.
Sec. 303. Council duties.
Sec. 304. Council membership.
Sec. 305. Authorization of appropriations.
Sec. 306. National Women's Business Council procurement project.
Sec. 307. Studies and other research.
Sec. 308. Women's business centers.

    TITLE IV--COMPETITIVENESS PROGRAM AND PROCUREMENT OPPORTUNITIES

           Subtitle A--Small Business Competitiveness Program

Sec. 401. Program term.
Sec. 402. Monitoring agency performance.
Sec. 403. Reports to Congress.
Sec. 404. Small business participation in dredging.
Sec. 405. Technical amendments.

      Subtitle B--Small Business Procurement Opportunities Program

Sec. 411. Contract bundling.
Sec. 412. Definition of contract bundling.
Sec. 413. Assessing proposed contract bundling.
Sec. 414. Reporting of bundled contract opportunities.
Sec. 415. Evaluating subcontract participation in awarding contracts.
Sec. 416. Improved notice of subcontracting opportunities.
Sec. 417. Deadlines for issuance of regulations.

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Small Business Technology Transfer program.
Sec. 502. Small Business Development Centers.
Sec. 503. Pilot preferred surety bond guarantee program extension.
Sec. 504. Extension of cosponsorship authority.
Sec. 505. Asset sales.
Sec. 506. Small business export promotion.
Sec. 507. Defense Loan and Technical Assistance program.
Sec. 508. Very small business concerns.
Sec. 509. Trade assistance program for small business concerns 
              adversely affected by NAFTA.

                       TITLE VI--HUBZONE PROGRAM

Sec. 601. Short title.
Sec. 602. Historically underutilized business zones.
Sec. 603. Technical and conforming amendments to the Small Business 
              Act.
Sec. 604. Other technical and conforming amendments.
Sec. 605. Regulations.
Sec. 606. Report.
Sec. 607. Authorization of appropriations.

                  TITLE VII--SERVICE DISABLED VETERANS

Sec. 701. Purposes.
Sec. 702. Definitions.
Sec. 703. Report by Small Business Administration.
Sec. 704. Information collection.
Sec. 705. State of small business report.
Sec. 706. Loans to veterans.
Sec. 707. Entrepreneurial training, counseling, and management 
              assistance.
Sec. 708. Grants for eligible veterans' outreach programs.
Sec. 709. Outreach for eligible veterans.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the term ``Administration'' means the Small Business 
     Administration;
       (2) the term ``Administrator'' means the Administrator of 
     the Small Business Administration;
       (3) the term ``Committees'' means the Committees on Small 
     Business of the House of Representatives and the Senate; and
       (4) the term ``small business concern'' has the meaning 
     given the term in section 3 of the Small Business Act (15 
     U.S.C. 632).

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on October 1, 1997.
                        TITLE I--AUTHORIZATIONS

     SEC. 101. AUTHORIZATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended by striking subsections (c) through (q) and 
     inserting the following:
       ``(c) Fiscal Year 1998.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 1998:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $40,000,000 in technical assistance grants, as 
     provided in section 7(m); and
       ``(ii) $60,000,000 in direct loans, as provided in section 
     7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $16,040,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--

[[Page H10487]]

       ``(i) $12,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(ii) $3,000,000,000 in financings as provided in section 
     7(a)(13) of this Act and section 504 of the Small Business 
     Investment Act of 1958;
       ``(iii) $1,000,000,000 in loans as provided in section 
     7(a)(21); and
       ``(iv) $40,000,000 in loans as provided in section 7(m).
       ``(C) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(i) $700,000,000 in purchases of participating 
     securities; and
       ``(ii) $600,000,000 in guarantees of debentures.
       ``(D) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000, of which not more than $650,000,000 may be in 
     bonds approved pursuant to section 411(a)(3) of that Act.
       ``(E) The Administration is authorized to make grants or 
     enter into cooperative agreements--
       ``(i) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $4,000,000; and
       ``(ii) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), $15,000,000, to remain 
     available until expended.
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 1998 such sums as may be 
     necessary to carry out this Act, including administrative 
     expenses and necessary loan capital for disaster loans 
     pursuant to section 7(b), and to carry out the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding subparagraph (A), for fiscal year 
     1998--
       ``(i) no funds are authorized to be provided to carry out 
     the loan program authorized by section 7(a)(21) except by 
     transfer from another Federal department or agency to the 
     Administration, unless the program level authorized for 
     general business loans under paragraph (1)(B)(i) is fully 
     funded; and
       ``(ii) the Administration may not approve loans on behalf 
     of the Administration or on behalf of any other department or 
     agency, by contract or otherwise, under terms and conditions 
     other than those specifically authorized under this Act or 
     the Small Business Investment Act of 1958, except that it may 
     approve loans under section 7(a)(21) of this Act in gross 
     amounts of not more than $1,250,000.
       ``(d) Fiscal Year 1999.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 1999:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $40,000,000 in technical assistance grants as 
     provided in section 7(m); and
       ``(ii) $60,000,000 in direct loans, as provided in section 
     7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $17,540,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(i) $13,000,000,000 in general business loans as provided 
     in section 7(a);
       ``(ii) $3,500,000,000 in financings as provided in section 
     7(a)(13) of this Act and section 504 of the Small Business 
     Investment Act of 1958;
       ``(iii) $1,000,000,000 in loans as provided in section 
     7(a)(21); and
       ``(iv) $40,000,000 in loans as provided in section 7(m).
       ``(C) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(i) $800,000,000 in purchases of participating 
     securities; and
       ``(ii) $700,000,000 in guarantees of debentures.
       ``(D) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000, of which not more than $650,000,000 may be in 
     bonds approved pursuant to section 411(a)(3) of that Act.
       ``(E) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(i) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $4,500,000; and
       ``(ii) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $15,000,000, 
     to remain available until expended.
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 1999 such sums as may be 
     necessary to carry out this Act, including administrative 
     expenses and necessary loan capital for disaster loans 
     pursuant to section 7(b), and to carry out the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding subparagraph (A), for fiscal year 
     1999--
       ``(i) no funds are authorized to be provided to carry out 
     the loan program authorized by section 7(a)(21) except by 
     transfer from another Federal department or agency to the 
     Administration, unless the program level authorized for 
     general business loans under paragraph (1)(B)(i) is fully 
     funded; and
       ``(ii) the Administration may not approve loans on behalf 
     of the Administration or on behalf of any other department or 
     agency, by contract or otherwise, under terms and conditions 
     other than those specifically authorized under this Act or 
     the Small Business Investment Act of 1958, except that it may 
     approve loans under section 7(a)(21) of this Act in gross 
     amounts of not more than $1,250,000.
       ``(e) Fiscal Year 2000.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 2000:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $40,000,000 in technical assistance grants as 
     provided in section 7(m); and
       ``(ii) $60,000,000 in direct loans, as provided in section 
     7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $20,040,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(i) $14,500,000,000 in general business loans as provided 
     in section 7(a);
       ``(ii) $4,500,000,000 in financings as provided in section 
     7(a)(13) of this Act and section 504 of the Small Business 
     Investment Act of 1958;
       ``(iii) $1,000,000,000 in loans as provided in section 
     7(a)(21); and
       ``(iv) $40,000,000 in loans as provided in section 7(m).
       ``(C) For the programs authorized by title III of the Small 
     Business Investment Act of 1958, the Administration is 
     authorized to make--
       ``(i) $900,000,000 in purchases of participating 
     securities; and
       ``(ii) $800,000,000 in guarantees of debentures.
       ``(D) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $2,000,000,000, of which not more than $650,000,000 may be in 
     bonds approved pursuant to section 411(a)(3) of that Act.
       ``(E) The Administration is authorized to make grants or 
     enter cooperative agreements--
       ``(i) for the Service Corps of Retired Executives program 
     authorized by section 8(b)(1), $5,000,000; and
       ``(ii) for activities of small business development centers 
     pursuant to section 21(c)(3)(G), not to exceed $15,000,000, 
     to remain available until expended.
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 2000 such sums as may be 
     necessary to carry out this Act, including administrative 
     expenses and necessary loan capital for disaster loans 
     pursuant to section 7(b), and to carry out the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding subparagraph (A), for fiscal year 
     2000--
       ``(i) no funds are authorized to be provided to carry out 
     the loan program authorized by section 7(a)(21) except by 
     transfer from another Federal department or agency to the 
     Administration, unless the program level authorized for 
     general business loans under paragraph (1)(B)(i) is fully 
     funded; and
       ``(ii) the Administration may not approve loans on behalf 
     of the Administration or on behalf of any other department or 
     agency, by contract or otherwise, under terms and conditions 
     other than those specifically authorized under this Act or 
     the Small Business Investment Act of 1958, except that it may 
     approve loans under section 7(a)(21) of this Act in gross 
     amounts of not more than $1,250,000.''.
                     TITLE II--FINANCIAL ASSISTANCE
                     Subtitle A--Microloan Program

     SEC. 201. MICROLOAN PROGRAM.

       (a) Loan Limits.--Section 7(m)(3)(C) of the Small Business 
     Act (15 U.S.C. 636(m)(3)(C)) is amended by striking 
     ``$2,500,000'' and inserting ``$3,500,000''.
       (b) Loan Loss Reserve Fund.--Section 7(m)(3)(D) of the 
     Small Business Act (15 U.S.C. 636(m)(3)(D)) is amended by 
     striking clauses (i) and (ii), and inserting the following:
       ``(i) during the initial 5 years of the intermediary's 
     participation in the program under this subsection, at a 
     level equal to not more than 15 percent of the outstanding 
     balance of the notes receivable owed to the intermediary; and
       ``(ii) in each year of participation thereafter, at a level 
     equal to not more than the greater of--

       ``(I) 2 times an amount reflecting the total losses of the 
     intermediary as a result of participation in the program 
     under this subsection, as determined by the Administrator on 
     a case-by-case basis; or
       ``(II) 10 percent of the outstanding balance of the notes 
     receivable owed to the intermediary.''.

       (c) Authorization of Appropriations.--Section 7(m) of the 
     Small Business Act (15 U.S.C. 636(m)) is amended--
       (1) in the subsection heading, by striking 
     ``Demonstration'';
       (2) by striking ``Demonstration'' each place that term 
     appears;
       (3) by striking ``demonstration'' each place that term 
     appears; and
       (4) in paragraph (12), by striking ``during fiscal years 
     1995 through 1997'' and inserting ``during fiscal years 1998 
     through 2000''.
       (d) Technical Assistance Grants.--Section 7(m) of the Small 
     Business Act (15 U.S.C. 636(m)) is amended--
       (1) in paragraph (4)(E)--
       (A) by striking ``Each intermediary'' and inserting the 
     following:
       ``(i) In general.--Each intermediary'';
       (B) by striking ``15'' and inserting ``25''; and
       (C) by adding at the end the following:
        ``(ii) Technical assistance.--An intermediary may expend 
     not more than 25 percent of the funds received under 
     paragraph (1)(B)(ii) to enter into third party contracts for 
     the provision of technical assistance.''; and
       (2) in paragraph (5)(A)--
       (A) by striking ``in each of the 5 years of the 
     demonstration program established under this subsection,''; 
     and
       (B) by striking ``for terms of up to 5 years'' and 
     inserting ``annually''.

     SEC. 202. WELFARE-TO-WORK MICROLOAN INITIATIVE.

       (a) Initiative.--Section 7(m) of the Small Business Act (15 
     U.S.C. 636(m)) is amended--

[[Page H10488]]

       (1) in paragraph (1)(A)--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(iv) to establish a welfare-to-work microloan initiative, 
     which shall be administered by the Administration, in order 
     to test the feasibility of supplementing the technical 
     assistance grants provided under clauses (ii) and (iii) of 
     subparagraph (B) to individuals who are receiving assistance 
     under the State program funded under part A of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.), or under any 
     comparable State funded means tested program of assistance 
     for low-income individuals, in order to adequately assist 
     those individuals in--
       ``(I) establishing small businesses; and
       ``(II) eliminating their dependence on that assistance.'';
       (2) in paragraph (4), by adding at the end the following:
       ``(F) Supplemental grant.--
       ``(i) In general.--The Administration may accept any funds 
     transferred to the Administration from other departments or 
     agencies of the Federal Government to make grants in 
     accordance with this subparagraph and section 202(b) of the 
     Small Business Reauthorization Act of 1997 to participating 
     intermediaries and technical assistance providers under 
     paragraph (5), for use in accordance with clause (iii) to 
     provide additional technical assistance and related services 
     to recipients of assistance under a State program described 
     in paragraph (1)(A)(iv) at the time they initially apply for 
     assistance under this subparagraph.
       ``(ii) Eligible recipients; grant amounts.--In making 
     grants under this subparagraph, the Administration may 
     select, from among participating intermediaries and technical 
     assistance providers described in clause (i), not more than 
     20 grantees in fiscal year 1998, not more than 25 grantees in 
     fiscal year 1999, and not more than 30 grantees in fiscal 
     year 2000, each of whom may receive a grant under this 
     subparagraph in an amount not to exceed $200,000 per year.
       ``(iii) Use of grant amounts.--Grants under this 
     subparagraph--

       ``(I) are in addition to other grants provided under this 
     subsection and shall not require the contribution of matching 
     amounts as a condition of eligibility; and
       ``(II) may be used by a grantee--

       ``(aa) to pay or reimburse a portion of child care and 
     transportation costs of recipients of assistance described in 
     clause (i), to the extent such costs are not otherwise paid 
     by State block grants under the Child Care Development Block 
     Grant Act of 1990 (42 U.S.C. 9858 et seq.) or under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.); 
     and
       ``(bb) for marketing, management, and technical assistance 
     to recipients of assistance described in clause (i).
       ``(iv) Memorandum of understanding.--Prior to accepting any 
     transfer of funds under clause (i) from a department or 
     agency of the Federal Government, the Administration shall 
     enter into a Memorandum of Understanding with the department 
     or agency, which shall--

       ``(I) specify the terms and conditions of the grants under 
     this subparagraph; and
       ``(II) provide for appropriate monitoring of expenditures 
     by each grantee under this subparagraph and each recipient of 
     assistance described in clause (i) who receives assistance 
     from a grantee under this subparagraph, in order to ensure 
     compliance with this subparagraph by those grantees and 
     recipients of assistance.'';

       (3) in paragraph (6), by adding at the end the following:
       ``(E) Establishment of child care or transportation 
     businesses.--In addition to other eligible small businesses 
     concerns, borrowers under any program under this subsection 
     may include individuals who will use the loan proceeds to 
     establish for-profit or nonprofit child care establishments 
     or businesses providing for-profit transportation 
     services.'';
       (4) in paragraph (9)--
       (A) by striking the paragraph designation and paragraph 
     heading and inserting the following:
       ``(9) Grants for management, marketing, technical 
     assistance, and related services.--''; and
       (B) by adding at the end the following:
       ``(C) Welfare-to-work microloan initiative.--Of amounts 
     made available to carry out the welfare-to-work microloan 
     initiative under paragraph (1)(A)(iv) in any fiscal year, the 
     Administration may use not more than 5 percent to provide 
     technical assistance, either directly or through contractors, 
     to welfare-to-work microloan initiative grantees, to ensure 
     that, as grantees, they have the knowledge, skills, and 
     understanding of microlending and welfare-to-work transition, 
     and other related issues, to operate a successful welfare-to-
     work microloan initiative.''; and
       (5) by adding at the end the following:
       ``(13) Evaluation of welfare-to-work microloan 
     initiative.--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 paragraph 
     (4)(F).''.
       (b) Transfer of Funds.--
       (1) In general.--No funds are authorized to be appropriated 
     or otherwise provided to carry out the grant program under 
     section 7(m)(4)(F) of the Small Business Act (15 U.S.C. 
     636(m)(4)(F)) (as added by this section), except by transfer 
     from another department or agency of the Federal Government 
     to the Administration in accordance with this subsection.
       (2) Limitation on amounts.--The total amount transferred to 
     the Administration from other departments and agencies of the 
     Federal Government to carry out the grant program under 
     section 7(m)(4)(F) of the Small Business Act (15 U.S.C. 
     636(m)(4)(F)) (as added by this section) shall not exceed--
       (A) $3,000,000 for fiscal year 1998;
       (B) $4,000,000 for fiscal year 1999; and
       (C) $5,000,000 for fiscal year 2000.
         Subtitle B--Small Business Investment Company Program

     SEC. 211. 5-YEAR COMMITMENTS FOR SBICS AT OPTION OF 
                   ADMINISTRATOR.

       Section 20(a)(2) of the Small Business Act (15 U.S.C. 631 
     note) is amended in the last sentence by striking ``the 
     following fiscal year'' and inserting ``any 1 or more of the 
     4 subsequent fiscal years''.

     SEC. 212. UNDERSERVED AREAS.

       Section 301(c)(4)(B) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 681(c)(4)(B)) is amended to read as 
     follows:
       ``(B) Leverage.--An applicant licensed pursuant to the 
     exception provided in this paragraph shall not be eligible to 
     receive leverage as a licensee until the applicant satisfies 
     the requirements of section 302(a), unless the applicant--
       ``(i) files an application for a license not later than 180 
     days after the date of enactment of the Small Business 
     Reauthorization Act of 1997;
       ``(ii) is located in a State that is not served by a 
     licensee; and
       ``(iii) agrees to be limited to 1 tier of leverage 
     available under section 302(b), until the applicant meets the 
     requirements of section 302(a).''.

     SEC. 213. PRIVATE CAPITAL.

       Section 103(9)(B)(iii) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 662(9)(B)(iii)) is amended--
       (1) by redesignating subclauses (I) and (II) as subclauses 
     (II) and (III), respectively; and
       (2) by inserting before subclause (II) (as redesignated) 
     the following:

       ``(I) funds obtained from the business revenues (excluding 
     any governmental appropriation) of any federally chartered or 
     government-sponsored corporation established prior to October 
     1, 1987;''.

     SEC. 214. FEES.

       Section 301 of the Small Business Investment Act of 1958 
     (15 U.S.C. 681) is amended by adding at the end the 
     following:
       ``(e) Fees.--
       ``(1) In general.--The Administration may prescribe fees to 
     be paid by each applicant for a license to operate as a small 
     business investment company under this Act.
       ``(2) Use of amounts.--Fees collected under this 
     subsection--
       ``(A) shall be deposited in the account for salaries and 
     expenses of the Administration; and
       ``(B) are authorized to be appropriated solely to cover the 
     costs of licensing examinations.''.

     SEC. 215. SMALL BUSINESS INVESTMENT COMPANY PROGRAM REFORM.

       (a) Bank Investments.--Section 302(b) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 682(b)) is amended by 
     striking ``1956,'' and all that follows before the period and 
     inserting the following: ``1956, any national bank, or any 
     member bank of the Federal Reserve System or nonmember 
     insured bank to the extent permitted under applicable State 
     law, may invest in any 1 or more small business investment 
     companies, or in any entity established to invest solely in 
     small business investment companies, except that in no event 
     shall the total amount of such investments of any such bank 
     exceed 5 percent of the capital and surplus of the bank''.
       (b) Indexing for Leverage.--Section 303 of the Small 
     Business Investment Act of 1958 (15 U.S.C. 683) is amended--
       (1) in subsection (b)--
       (A) in paragraph (2), by adding at the end the following:
       ``(D)(i) The dollar amounts in subparagraphs (A), (B), and 
     (C) shall be adjusted annually to reflect increases in the 
     Consumer Price Index established by the Bureau of Labor 
     Statistics of the Department of Labor.
       ``(ii) The initial adjustments made under this subparagraph 
     after the date of enactment of the Small Business 
     Reauthorization Act of 1997 shall reflect only increases from 
     March 31, 1993.''; and
       (B) by striking paragraph (4) and inserting the following:
       ``(4) Maximum aggregate amount of leverage.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the aggregate amount of outstanding leverage issued to any 
     company or companies that are commonly controlled (as 
     determined by the Administrator) may not exceed $90,000,000, 
     as adjusted annually for increases in the Consumer Price 
     Index.
       ``(B) Exceptions.--The Administrator may, on a case-by-case 
     basis--
       ``(i) approve an amount of leverage that exceeds the amount 
     described in subparagraph (A) for companies under common 
     control; and
       ``(ii) impose such additional terms and conditions as the 
     Administrator determines to be appropriate to minimize the 
     risk of loss to the Administration in the event of default.
       ``(C) Applicability of other provisions.--Any leverage that 
     is issued to a company or companies commonly controlled in an 
     amount that exceeds $90,000,000, whether as a result of an 
     increase in the Consumer Price Index or a decision of the 
     Administrator, is subject to subsection (d).''; and
       (2) by striking subsection (d) and inserting the following:
       ``(d) Required Certifications.--
       ``(1) In general.--The Administrator shall require each 
     licensee, as a condition of approval of an application for 
     leverage, to certify in writing--
       ``(A) for licensees with leverage less than or equal to 
     $90,000,000, that not less than 20 percent of the licensee's 
     aggregate dollar amount of

[[Page H10489]]

     financings will be provided to smaller enterprises; and
       ``(B) for licensees with leverage in excess of $90,000,000, 
     that, in addition to satisfying the requirements of 
     subparagraph (A), 100 percent of the licensee's aggregate 
     dollar amount of financings made in whole or in part with 
     leverage in excess of $90,000,000 will be provided to smaller 
     enterprises (as defined in section 103(12)).
       ``(2) Multiple licensees.--Multiple licensees under common 
     control (as determined by the Administrator) shall be 
     considered to be a single licensee for purposes of 
     determining both the applicability of and compliance with the 
     investment percentage requirements of this subsection.''.
       (c) Tax Distributions.--Section 303(g)(8) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 683(g)(8)) is 
     amended by adding at the end the following: ``A company may 
     also elect to make a distribution under this paragraph at the 
     end of any calendar quarter based on a quarterly estimate of 
     the maximum tax liability. If a company makes 1 or more 
     quarterly distributions for a calendar year, and the 
     aggregate amount of those distributions exceeds the maximum 
     amount that the company could have distributed based on a 
     single annual computation, any subsequent distribution by the 
     company under this paragraph shall be reduced by an amount 
     equal to the excess amount distributed.''.
       (d) Leverage Fee.--Section 303(i) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 683(i)) is amended by 
     striking ``, payable upon'' and all that follows before the 
     period and inserting the following: ``in the following 
     manner: 1 percent upon the date on which the Administration 
     enters into any commitment for such leverage with the 
     licensee, and the balance of 2 percent (or 3 percent if no 
     commitment has been entered into by the Administration) on 
     the date on which the leverage is drawn by the licensee''.
       (e) Periodic Issuance of Guarantees and Trust 
     Certificates.--Section 320 of the Small Business Investment 
     Act of 1958 (15 U.S.C. 687m) is amended by striking ``three 
     months'' and inserting ``6 months''.

     SEC. 216. 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 C--Certified Development Company Program

     SEC. 221. LOANS FOR PLANT ACQUISITION, CONSTRUCTION, 
                   CONVERSION, AND EXPANSION.

       Section 502 of the Small Business Investment Act of 1958 
     (15 U.S.C. 696) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Use of proceeds.--The proceeds of any such loan shall 
     be used solely by the borrower to assist 1 or more 
     identifiable small business concerns and for a sound business 
     purpose approved by the Administration.'';
       (2) in paragraph (3), by adding at the end the following:
       ``(D) Seller financing.--Seller-provided financing may be 
     used to meet the requirements of subparagraph (B), if the 
     seller subordinates the interest of the seller in the 
     property to the debenture guaranteed by the Administration.
       ``(E) Collateralization.--The collateral provided by the 
     small business concern shall generally include a subordinate 
     lien position on the property being financed under this 
     title, and is only 1 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.''; and
       (3) by adding at the end the following:
       ``(5) Limitation on leasing.--In addition to any portion of 
     the project permitted to be leased under paragraph (4), not 
     to exceed 20 percent of the project may be leased by the 
     assisted small business to 1 or more other tenants, if the 
     assisted small business occupies permanently and uses not 
     less than a total of 60 percent of the space in the project 
     after the execution of any leases authorized under this 
     section.''.

     SEC. 222. DEVELOPMENT COMPANY DEBENTURES.

       Section 503 of the Small Business Investment Act of 1958 
     (15 U.S.C. 697) is amended--
       (1) in subsection (b)(7), by striking subparagraph (A) and 
     inserting the following:
       ``(A) assesses and collects a fee, which shall be payable 
     by the borrower, in an amount established annually by the 
     Administration, which amount shall not exceed the lesser of--
       ``(i) 0.9375 percent per year of the outstanding balance of 
     the loan; and
       ``(ii) the minimum amount necessary to reduce the cost (as 
     defined in section 502 of the Federal Credit Reform Act of 
     1990) to the Administration of purchasing and guaranteeing 
     debentures under this Act to zero; and''; and
       (2) in subsection (f), by striking ``1997'' and inserting 
     ``2000''.

     SEC. 223. PREMIER CERTIFIED LENDERS PROGRAM.

       (a) In General.--Section 508 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697e) is amended--
       (1) in subsection (a), by striking ``not more than 15'';
       (2) in subsection (b)--
       (A) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``if such company'';
       (ii) by striking subparagraphs (A) and (B) and inserting 
     the following:
       ``(A) if the company 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) if the company has a history of--
       ``(i) submitting to the Administration adequately analyzed 
     debenture guarantee application packages; and
       ``(ii) of properly closing section 504 loans and servicing 
     its loan portfolio;'';
       (iii) in subparagraph (C)--

       (I) by inserting ``if the company'' after ``(C)''; and
       (II) by striking the period at the end and inserting ``; 
     and''; and

       (iv) by adding at the end the following:
       ``(D) the Administrator determines, with respect to the 
     company, that the loss reserve established in accordance with 
     subsection (c)(2) is sufficient for the company to meet its 
     obligations to protect the Federal Government from risk of 
     loss.''; and
       (B) by adding at the end the following:
       ``(3) Applicability of criteria after designation.--The 
     Administrator may revoke the designation of a certified 
     development company as a premier certified lender under this 
     section at any time, if the Administrator determines that the 
     certified development company does not meet any requirement 
     described in subparagraphs (A) through (D) of paragraph 
     (2).'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Loss Reserve.--
       ``(1) Establishment.--A company designated as a premier 
     certified lender shall establish a loss reserve for financing 
     approved pursuant to this section.
       ``(2) Amount.--The amount of each loss reserve established 
     under paragraph (1) shall be 10 percent of the amount of the 
     company's exposure, as determined under subsection (b)(2)(C).
       ``(3) Assets.--Each loss reserve established under 
     paragraph (1) shall be comprised of--
       ``(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;
       ``(B) irrevocable letter or letters of credit, with a 
     collateral assignment in favor of, and a commercially 
     reasonable format acceptable to, the Administration; or
       ``(C) any combination of the assets described in 
     subparagraphs (A) and (B).
       ``(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.
       ``(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 premier 
     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 that has been 
     repaid.'';
       (4) in subsection (d)(1), by striking ``to approve loans'' 
     and inserting ``to approve, authorize, close, service, 
     foreclose, litigate (except that the Administration may 
     monitor the conduct of any such litigation to which a premier 
     certified lender is a party), and liquidate loans'';
       (5) in subsection (f), by striking ``State or local'' and 
     inserting ``certified'';
       (6) in subsection (g), by striking the subsection heading 
     and inserting the following:
       ``(g) Effect of Suspension or Revocation.--'';
       (7) by striking subsection (h) and inserting the following:
       ``(h) Program Goals.--Each certified development company 
     participating in the program under this section shall 
     establish a goal of processing a minimum of not less than 50 
     percent of the loan applications for assistance under section 
     504 pursuant to the program authorized under this section.''; 
     and
       (8) in subsection (i), by striking ``other lenders'' and 
     inserting ``other lenders, specifically comparing default 
     rates and recovery rates on liquidations''.
       (b) Regulations.--The Administrator shall--
       (1) not later than 150 days after the date of enactment of 
     this Act, promulgate regulations to carry out the amendments 
     made by subsection (a); and
       (2) not later than 180 days after the date of enactment of 
     this Act, issue program guidelines and fully implement the 
     amendments made by subsection (a).
       (c) Program Extension.--Section 217(b) of the Small 
     Business Reauthorization and Amendments Act of 1994 (15 
     U.S.C. 697e note) is amended by striking ``October 1, 1997'' 
     and inserting ``October 1, 2000''.
                  Subtitle D--Miscellaneous Provisions

     SEC. 231. BACKGROUND CHECK OF LOAN APPLICANTS.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended--
       (1) by striking ``(a) The Administration'' and inserting 
     the following:

[[Page H10490]]

       ``(a) Loans to Small Business Concerns; Allowable Purposes; 
     Qualified Business; Restrictions and Limitations.--The 
     Administration''; and
       (2) in paragraph (1)--
       (A) by striking ``(1) No financial'' and inserting the 
     following:
       ``(1) In general.--
       ``(A) Credit elsewhere.--No financial''; and
       (B) by adding at the end the following:
       ``(B) Background checks.--Prior to the approval of any loan 
     made pursuant to this subsection, or section 503 of the Small 
     Business Investment Act of 1958, the Administrator may 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. 232. REPORT ON INCREASED LENDER APPROVAL, SERVICING, 
                   FORECLOSURE, LIQUIDATION, AND LITIGATION OF 
                   SECTION 7(A) LOANS.

       (a) In General.--
       (1) Submission.--Not later than 6 months after the date of 
     enactment of this Act, the Administrator shall submit to the 
     Committees a 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.
       (2) Contents.--The report under this subsection shall 
     address administrative and other steps necessary to achieve 
     the results described in paragraph (1), including--
       (A) streamlining the process for approving lenders and 
     standardizing requirements;
       (B) establishing uniform reporting requirements using on-
     line automated capabilities to the maximum extent feasible;
       (C) reducing paperwork through automation, simplified 
     forms, or incorporation of lender's forms;
       (D) providing uniform standards for approval, closing, 
     servicing, foreclosure, and liquidation;
       (E) promulgating new regulations or amending existing ones;
       (F) establishing a timetable for implementing the plan for 
     reliance on private sector lenders;
       (G) implementing organizational changes at SBA; and
       (H) estimating the annual savings that would occur as a 
     result of implementation.
       (b) Consultation.--In preparing the report under subsection 
     (a), the Administrator shall consult with, among others--
       (1) borrowers and lenders under section 7(a) of the Small 
     Business Act;
       (2) small businesses that are potential program 
     participants under section 7(a) of the Small Business Act;
       (3) financial institutions that are potential program 
     lenders under section 7(a) of the Small Business Act; and
       (4) representative industry associations.

     SEC. 233. COMPLETION OF PLANNING FOR LOAN MONITORING SYSTEM.

       (a) In General.--The Administrator shall perform and 
     complete the planning needed to serve as the basis for 
     funding the development and implementation of the 
     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) Report.--
       (1) In general.--On the date that is 6 months after the 
     date of enactment of this Act, the Administrator shall submit 
     a report on the progress of the Administrator in carrying out 
     subsection (a) to--
       (A) the Committees; and
       (B) the Comptroller General of the United States.
       (2) Evaluation.--Not later than 28 days after receipt of 
     the report under paragraph (1)(B), the Comptroller General of 
     the United States shall--
       (A) prepare a written evaluation of the report for 
     compliance with subsection (a); and
       (B) submit the evaluation to the Committees.
       (3) Limitation.--None of the funds provided for the 
     purchase of the loan monitoring system may be obligated or 
     expended until 45 days after the date on which the Committees 
     and the Comptroller General of the United States receive the 
     report under paragraph (1).
                TITLE III--WOMEN'S BUSINESS ENTERPRISES

     SEC. 301. INTERAGENCY COMMITTEE PARTICIPATION.

       Section 403 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note) is amended--
       (1) in subsection (a)(2)(A)--
       (A) by striking ``and Amendments Act of 1994'' and 
     inserting ``Act of 1997''; and
       (B) by inserting before the final period ``, and who shall 
     report directly to the head of the agency on the status of 
     the activities of the Interagency Committee'';
       (2) in subsection (a)(2)(B), by inserting before the final 
     period the following: ``and shall report directly to the 
     Administrator on the status of the activities on the 
     Interagency Committee and shall serve as the Interagency 
     Committee Liaison to the National Women's Business Council 
     established under section 405''; and
       (3) in subsection (b), by striking ``and Amendments Act of 
     1994'' and inserting ``Act of 1997''.

     SEC. 302. REPORTS.

       Section 404 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note) is amended--
       (1) by inserting ``, through the Small Business 
     Administration,'' after ``transmit'';
       (2) by striking paragraph (1) and redesignating paragraphs 
     (2) through (4) as paragraphs (1) through (3), respectively; 
     and
       (3) in paragraph (1), as redesignated, by inserting before 
     the semicolon the following: ``, including a verbatim report 
     on the status of progress of the Interagency Committee in 
     meeting its responsibilities and duties under section 
     402(a)''.

     SEC. 303. COUNCIL DUTIES.

       Section 406 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note) is amended--
       (1) in subsection (c), by inserting after ``Administrator'' 
     the following: ``(through the Assistant Administrator of the 
     Office of Women's Business Ownership)''; and
       (2) in subsection (d)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(6) not later than 90 days after the last day of each 
     fiscal year, 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, a 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) Form of Transmittal.--The information included in 
     each report under subsection (d) that is described in 
     subparagraphs (A) through (C) of subsection (d)(6), shall be 
     reported verbatim, together with any separate additional, 
     concurring, or dissenting views of the Administrator.''.

     SEC. 304. COUNCIL MEMBERSHIP.

       Section 407 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note) is amended--
       (1) in subsection (a), by striking ``and Amendments Act of 
     1994'' and inserting ``Act of 1997'';
       (2) in subsection (b)--
       (A) by striking ``and Amendments Act of 1994'' and 
     inserting ``Act of 1997'';
       (B) by inserting after ``the Administrator shall'' the 
     following: ``, after receiving the recommendations of the 
     Chairman and the Ranking Member 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), by striking ``2'' and inserting 
     ``4''; and
       (F) in paragraph (3)--
       (i) by striking ``5'' and inserting ``6'';
       (ii) by striking ``national''; and
       (iii) by inserting ``, including representatives of women's 
     business center sites'' before the period at the end;
       (3) in subsection (c), by inserting ``(including both urban 
     and rural areas)'' after ``geographic'';
       (4) by striking subsection (d) and inserting the following:
       ``(d) Terms.--Each member of the Council shall be appointed 
     for a term of 3 years, except that, of the initial members 
     appointed to the Council--
       ``(1) 2 members appointed under subsection (b)(1) shall be 
     appointed for a term of 1 year;
       ``(2) 2 members appointed under subsection (b)(2) shall be 
     appointed for a term of 1 year; and
       ``(3) each member appointed under subsection (b)(3) shall 
     be appointed for a term of 2 years.''; and
       (5) by striking subsection (f) and inserting the following:
       ``(f) Vacancies.--
       ``(1) In general.--A vacancy on the Council shall be filled 
     not later than 30 days after the date on which the vacancy 
     occurs, in the manner in which the original appointment was 
     made, and shall be subject to any conditions that applied to 
     the original appointment.
       ``(2) Unexpired term.--An individual chosen to fill a 
     vacancy shall be appointed for the unexpired term of the 
     member replaced.''.

     SEC. 305. AUTHORIZATION OF APPROPRIATIONS.

       Section 409 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note) is amended to read as follows:

     ``SEC. 411. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There is authorized to be appropriated 
     to carry out this title $600,000, for each of fiscal years 
     1998 through 2000, of which $200,000 shall be available in 
     each fiscal year to carry out sections 409 and 410.
       ``(b) Budget Review.--No amount made available under this 
     section for any fiscal year may be obligated or expended by 
     the Council before the date on which the Council reviews and 
     approves the operating budget of the Council to carry out the 
     responsibilities of the Council for that fiscal year.''.

[[Page H10491]]

     SEC. 306. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT 
                   PROJECT.

       The Women's Business Ownership Act of 1988 (15 U.S.C. 631 
     note) is amended by inserting after section 408 the 
     following:

     ``SEC. 409. NATIONAL WOMEN'S BUSINESS COUNCIL PROCUREMENT 
                   PROJECT.

       ``(a) Federal Procurement Study.--
       ``(1) In general.--During the first fiscal year for which 
     amounts are made available to carry out this section, the 
     Council shall conduct a study on the award of Federal prime 
     contracts and subcontracts to women-owned businesses, which 
     study shall include--
       ``(A) an analysis of data collected by Federal agencies on 
     contract awards to women-owned businesses;
       ``(B) a determination of the degree to which individual 
     Federal agencies are in compliance with the 5 percent women-
     owned business procurement goal established by section 
     15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1));
       ``(C) a determination of the types and amounts of Federal 
     contracts characteristically awarded to women-owned 
     businesses; and
       ``(D) other relevant information relating to participation 
     of women-owned businesses in Federal procurement.
       ``(2) Submission of results.--Not later than 12 months 
     after initiating the study under paragraph (1), the Council 
     shall submit to the Committees on Small Business of the House 
     of Representatives and the Senate, and to the President, the 
     results of the study conducted under paragraph (1).
       ``(b) Best Practices Report.--Not later than 18 months 
     after initiating the study under subsection (a)(1), the 
     Council shall submit to the Committees on Small Business of 
     the House of Representatives and the Senate, and to the 
     President, a report, which shall include--
       ``(1) an analysis of the most successful practices in 
     attracting women-owned businesses as prime contractors and 
     subcontractors by--
       ``(A) Federal agencies (as supported by findings from the 
     study required under subsection (a)(1)) in Federal 
     procurement awards; and
       ``(B) the private sector; and
       ``(2) recommendations for policy changes in Federal 
     procurement practices, including an increase in the Federal 
     procurement goal for women-owned businesses, in order to 
     maximize the number of women-owned businesses performing 
     Federal contracts.
       ``(c) Contract Authority.--In conducting any study or other 
     research under this section, the Council may contract with 1 
     or more public or private entities.''.

     SEC. 307. STUDIES AND OTHER RESEARCH.

       The Women's Business Ownership Act of 1988 (15 U.S.C. 631 
     note) is amended by inserting after section 409 (as added by 
     section 306 of this title) the following:

     ``SEC. 410. STUDIES AND OTHER RESEARCH.

       ``(a) In General.--To the extent that it does not delay 
     submission of the report under section 409(b), the Council 
     may also conduct such studies and other research relating to 
     the award of Federal prime contracts and subcontracts to 
     women-owned businesses, or to issues relating to access to 
     credit and investment capital by women entrepreneurs, as the 
     Council determines to be appropriate.
       ``(b) Contract Authority.--In conducting any study or other 
     research under this section, the Council may contract with 1 
     or more public or private entities.''.

     SEC. 308. 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 CENTER PROGRAM.

       ``(a) Definitions.--In this section--
       ``(1) the term `Assistant Administrator' means the 
     Assistant Administrator of the Office of Women's Business 
     Ownership established under subsection (g);
       ``(2) the term `small business concern owned and controlled 
     by women', either startup or existing, includes any small 
     business concern--
       ``(A) that is not less than 51 percent owned by 1 or more 
     women; and
       ``(B) the management and daily business operations of which 
     are controlled by 1 or more women; and
       ``(3) the term `women's business center site' means the 
     location of--
       ``(A) a women's business center; or
       ``(B) 1 or more women's business centers, established in 
     conjunction with another women's business center in another 
     location within a State or region--
       ``(i) that reach a distinct population that would otherwise 
     not be served;
       ``(ii) whose services are targeted to women; and
       ``(iii) whose scope, function, and activities are similar 
     to those of the primary women's business center or centers in 
     conjunction with which it was established.
       ``(b) Authority.--The Administration may provide financial 
     assistance to private organizations to conduct 5-year 
     projects for the benefit of small business concerns owned and 
     controlled by women. The projects shall provide--
       ``(1) financial assistance, including training and 
     counseling in how to apply for and secure business credit and 
     investment capital, preparing and presenting financial 
     statements, and managing cash flow and other financial 
     operations of a business concern;
       ``(2) management assistance, including training and 
     counseling in how to plan, organize, staff, direct, and 
     control each major activity and function of a small business 
     concern; and
       ``(3) marketing assistance, including training and 
     counseling in identifying and segmenting domestic and 
     international market opportunities, preparing and executing 
     marketing plans, developing pricing strategies, locating 
     contract opportunities, negotiating contracts, and utilizing 
     varying public relations and advertising techniques.
       ``(c) Conditions of Participation.--
       ``(1) Non-federal contributions.--As a condition of 
     receiving financial assistance authorized by this section, 
     the recipient organization shall agree to obtain, after its 
     application has been approved and notice of award has been 
     issued, cash contributions from non-Federal sources as 
     follows:
       ``(A) in the first and second years, 1 non-Federal dollar 
     for each 2 Federal dollars;
       ``(B) in the third and fourth years, 1 non-Federal dollar 
     for each Federal dollar; and
       ``(C) in the fifth year, 2 non-Federal dollars for each 
     Federal dollar.
       ``(2) Form of non-federal contributions.--Not more than 
     one-half of the non-Federal sector matching assistance may be 
     in the form of in-kind contributions that are budget line 
     items only, including 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 non-federal funding.--If any 
     recipient of assistance fails to obtain the required non-
     Federal contribution during any project, it shall not be 
     eligible thereafter for advance disbursements pursuant to 
     paragraph (3) during the remainder of that project, or for 
     any other project for which it is or may be funded by the 
     Administration, and prior to approving assistance to such 
     organization for any other projects, the Administration shall 
     specifically determine whether the Administration believes 
     that the recipient will be able to obtain the requisite non-
     Federal funding and enter a written finding setting forth the 
     reasons for making such determination.
       ``(d) Contract Authority.--A women's business center may 
     enter into a contract with a Federal department or agency to 
     provide specific assistance to women and other underserved 
     small business concerns. Performance of such contract should 
     not hinder the women's business centers in carrying out the 
     terms of the grant received by the women's business centers 
     from the Administration.
       ``(e) Submission of 5-Year Plan.--Each applicant 
     organization initially shall submit a 5-year plan to the 
     Administration on proposed fundraising and training 
     activities, and a recipient organization may receive 
     financial assistance under this program for a maximum of 5 
     years per women's business center site.
       ``(f) Criteria.--The Administration shall evaluate and rank 
     applicants in accordance with predetermined selection 
     criteria that shall be stated in terms of relative 
     importance. Such criteria and their relative importance shall 
     be made publicly available and stated in each solicitation 
     for applications made by the Administration. The criteria 
     shall include--
       ``(1) the experience of the applicant in conducting 
     programs or ongoing efforts designed to impart or upgrade the 
     business skills of women business owners or potential owners;
       ``(2) the present ability of the applicant to commence a 
     project within a minimum amount of time;
       ``(3) the ability of the applicant to provide training and 
     services to a representative number of women who are both 
     socially and economically disadvantaged; and
       ``(4) the location for the women's business center site 
     proposed by the applicant.
       ``(g) Office of Women's Business Ownership.--
       ``(1) Establishment.--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 defined in section 408 of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. 631 note)). 
     The Office of Women's Business Ownership shall be 
     administered by an Assistant Administrator, who shall be 
     appointed by the Administrator.
       ``(2) Assistant administrator of the office of women's 
     business ownership.--
       ``(A) Qualification.--The position of Assistant 
     Administrator shall be a Senior Executive Service position 
     under section 3132(a)(2) of title 5, United States Code. The 
     Assistant Administrator shall serve as a noncareer appointee 
     (as defined in section 3132(a)(7) of that title).
       ``(B) Responsibilities and duties.--
       ``(i) 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.

       ``(ii) Duties.--The Assistant Administrator shall--

       ``(I) administer and manage the Women's Business Center 
     program;
       ``(II) recommend the annual administrative and program 
     budgets for the Office of Women's Business Ownership 
     (including the budget for the Women's Business Center 
     program);
       ``(III) establish appropriate funding levels therefore;
       ``(IV) review the annual budgets submitted by each 
     applicant for the Women's Business Center program;

[[Page H10492]]

       ``(V) select applicants to participate in the program under 
     this section;
       ``(VI) implement this section;
       ``(VII) maintain a clearinghouse to provide for the 
     dissemination and exchange of information between women's 
     business centers;
       ``(VIII) serve as the vice chairperson of the Interagency 
     Committee on Women's Business Enterprise;
       ``(IX) serve as liaison for the National Women's Business 
     Council; and
       ``(X) advise the Administrator on appointments to the 
     Women's Business Council.

       ``(C) Consultation requirements.--In carrying out the 
     responsibilities and duties described in this paragraph, the 
     Assistant Administrator shall confer with and seek the advice 
     of the Administration officials in areas served by the 
     women's business centers.
       ``(h) Program Examination.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of the Small Business Reauthorization Act of 
     1997, the Administrator 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 Administrator 
     shall consider the results of the examination conducted under 
     paragraph (1).
       ``(i) Contract Authority.--The authority of the 
     Administrator 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 
     Administrator has entered into 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 Administrator provides 
     the applicant with written notification setting forth the 
     reasons therefore and affords the applicant an opportunity 
     for a hearing, appeal, or other administrative proceeding 
     under chapter 5 of title 5, United States Code.
       ``(j) 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.
       ``(k) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     $8,000,000 for each fiscal year to carry out the projects 
     authorized under this section, of which, for fiscal year 
     1998, not more than 5 percent may be used for administrative 
     expenses related to the program under this section.
       ``(2) Use of amounts.--Amounts made available under this 
     subsection for fiscal year 1999, and each fiscal year 
     thereafter, may only be used for grant awards and may not be 
     used for costs incurred by the Administration in connection 
     with the management and administration of the program under 
     this section.
       ``(3) Expedited acquisition.--Notwithstanding any other 
     provision of law, the Administrator, acting through the 
     Assistant Administrator, may use such expedited acquisition 
     methods as the Administrator determines to be appropriate to 
     carry out this section, except that the Administrator shall 
     ensure that all small business sources are provided a 
     reasonable opportunity to submit proposals.''.
       (b) Applicability.--
       (1) In general.--Subject to paragraph (2), any organization 
     conducting a 3-year project under section 29 of the Small 
     Business Act (15 U.S.C. 656) (as in effect on the day before 
     the effective date of this Act) on September 30, 1997, may 
     request an extension of the term of that project to a total 
     term of 5 years. If such an extension is made, the 
     organization shall receive financial assistance in accordance 
     with section 29(c) of the Small Business Act (as amended by 
     this section) subject to procedures established by the 
     Administrator, in coordination with the Assistant 
     Administrator of 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 section).
       (2) Terms of assistance for certain organizations.--Any 
     organization operating in the third year of a 3-year project 
     under section 29 of the Small Business Act (15 U.S.C. 656) 
     (as in effect on the day before the effective date of this 
     Act) on September 30, 1997, may request an extension of the 
     term of that project to a total term of 5 years. If such an 
     extension is made, during the fourth and fifth years of the 
     project, the organization shall receive financial assistance 
     in accordance with section 29(c)(1)(C) of the Small Business 
     Act (as amended by this section) subject to procedures 
     established by the Administrator, in coordination with the 
     Assistant Administrator of 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 section).
    TITLE IV--COMPETITIVENESS PROGRAM AND PROCUREMENT OPPORTUNITIES
           Subtitle A--Small Business Competitiveness Program

     SEC. 401. PROGRAM TERM.

       Section 711(c) of the Small Business Competitiveness 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended by striking ``, 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. REPORTS TO CONGRESS.

       Section 716(a) of the Small Business Competitiveness 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended--
       (1) by striking ``1996'' and inserting ``2000'';
       (2) by striking ``for Federal Procurement Policy'' and 
     inserting ``of the Small Business Administration''; and
       (3) by striking ``Government Operations'' and inserting 
     ``Government Reform and Oversight''.

     SEC. 404. SMALL BUSINESS PARTICIPATION IN DREDGING.

       Section 722(a) of the Small Business Competitiveness 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended by striking ``and terminating on September 30, 
     1997''.

     SEC. 405. TECHNICAL AMENDMENTS.

       Section 717 of the Small Business Competitiveness 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended--
       (1) by inserting ``or North American Industrial 
     Classification Code'' after ``standard industrial 
     classification code'' each place it appears; and
       (2) by inserting ``or North American Industrial 
     Classification Codes'' after ``standard industrial 
     classification codes'' each place it appears.
      Subtitle B--Small Business Procurement Opportunities Program

     SEC. 411. CONTRACT BUNDLING.

       Section 2 of the Small Business Act (15 U.S.C. 631) is 
     amended by adding at the end the following:
       ``(j) Contract Bundling.--In complying with the statement 
     of congressional policy expressed in subsection (a), relating 
     to fostering the participation of small business concerns in 
     the contracting opportunities of the Government, each Federal 
     agency, to the maximum extent practicable, shall--
       ``(1) comply with congressional intent to foster the 
     participation of small business concerns as prime 
     contractors, subcontractors, and suppliers;
       ``(2) structure its contracting requirements to facilitate 
     competition by and among small business concerns, taking all 
     reasonable steps to eliminate obstacles to their 
     participation; and
       ``(3) avoid unnecessary and unjustified bundling of 
     contract requirements that precludes small business 
     participation in procurements as prime contractors.''.

     SEC. 412. DEFINITION OF CONTRACT BUNDLING.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by adding at the end the following:
       ``(o) Definitions of Bundling of Contract Requirements and 
     Related Terms.--In this Act:
       ``(1) Bundled contract.--The term `bundled contract' means 
     a contract that is entered into to meet requirements that are 
     consolidated in a bundling of contract requirements.
       ``(2) Bundling of contract requirements.--The term 
     `bundling of contract requirements' means consolidating 2 or 
     more procurement requirements for goods or services 
     previously provided or performed under separate smaller 
     contracts into a solicitation of offers for a single contract 
     that is likely to be unsuitable for award to a small-business 
     concern due to--
       ``(A) the diversity, size, or specialized nature of the 
     elements of the performance specified;
       ``(B) the aggregate dollar value of the anticipated award;
       ``(C) the geographical dispersion of the contract 
     performance sites; or
       ``(D) any combination of the factors described in 
     subparagraphs (A), (B), and (C).
       ``(3) Separate smaller contract.--The term `separate 
     smaller contract', with respect to a bundling of contract 
     requirements, means a contract that has been performed by 1 
     or more small business concerns or was suitable for award to 
     1 or more small business concerns.''.

     SEC. 413. ASSESSING PROPOSED CONTRACT BUNDLING.

       (a) In General.--Section 15 of the Small Business Act (15 
     U.S.C. 644) is amended by inserting after subsection (d) the 
     following:
       ``(e) Procurement Strategies; Contract Bundling.--
       ``(1) In general.--To the maximum extent practicable, 
     procurement strategies used by the various agencies having 
     contracting authority shall facilitate the maximum 
     participation of small business concerns as prime 
     contractors, subcontractors, and suppliers.
       ``(2) Market research.--
       ``(A) In general.--Before proceeding with an acquisition 
     strategy that could lead to a contract containing 
     consolidated procurement requirements, the head of an agency 
     shall conduct market research to determine whether 
     consolidation of the requirements is necessary and justified.
       ``(B) Factors.--For purposes of subparagraph (A), 
     consolidation of the requirements may be determined as being 
     necessary and justified if, as compared to the benefits that 
     would be derived from contracting to meet those requirements 
     if not consolidated, the Federal Government would derive from 
     the consolidation measurably substantial benefits, including 
     any combination of benefits that, in combination, are 
     measurably substantial. Benefits described in the preceding 
     sentence may include the following:
       ``(i) Cost savings.
       ``(ii) Quality improvements.

[[Page H10493]]

       ``(iii) Reduction in acquisition cycle times.
       ``(iv) Better terms and conditions.
       ``(v) Any other benefits.
       ``(C) Reduction of costs not determinative.--The reduction 
     of administrative or personnel costs alone shall not be a 
     justification for bundling of contract requirements unless 
     the cost savings are expected to be substantial in relation 
     to the dollar value of the procurement requirements to be 
     consolidated.
       ``(3) Strategy specifications.--If the head of a 
     contracting agency determines that a proposed procurement 
     strategy for a procurement involves a substantial bundling of 
     contract requirements, the proposed procurement strategy 
     shall--
       ``(A) identify specifically the benefits anticipated to be 
     derived from the bundling of contract requirements;
       ``(B) set forth an assessment of the specific impediments 
     to participation by small business concerns as prime 
     contractors that result from the bundling of contract 
     requirements and specify actions designed to maximize small 
     business participation as subcontractors (including 
     suppliers) at various tiers under the contract or contracts 
     that are awarded to meet the requirements; and
       ``(C) include a specific determination that the anticipated 
     benefits of the proposed bundled contract justify its use.
       ``(4) Contract teaming.--In the case of a solicitation of 
     offers for a bundled contract that is issued by the head of 
     an agency, a small-business concern may submit an offer that 
     provides for use of a particular team of subcontractors for 
     the performance of the contract. The head of the agency shall 
     evaluate the offer in the same manner as other offers, with 
     due consideration to the capabilities of all of the proposed 
     subcontractors. If a small business concern teams under this 
     paragraph, it shall not affect its status as a small business 
     concern for any other purpose.''.
       (b) Administration Review.--Section 15(a) of the Small 
     Business Act (15 U.S.C. 644(a)) is amended in the third 
     sentence--
       (1) by inserting ``or the solicitation involves an 
     unnecessary or unjustified bundling of contract requirements, 
     as determined by the Administration,'' after ``discrete 
     construction projects,'';
       (2) by striking ``or (4)'' and inserting ``(4)''; and
       (3) by inserting before the period at the end of the 
     sentence the following: ``, or (5) why the agency has 
     determined that the bundled contract (as defined in section 
     3(o)) is necessary and justified''.
       (c) Responsibilities of Agency Small Business Advocates.--
     Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is 
     amended--
       (1) by redesignating paragraphs (5) through (9) as 
     paragraphs (6) through (10), respectively; and
       (2) by inserting after paragraph (4) the following:
       ``(5) identify proposed solicitations that involve 
     significant bundling of contract requirements, and work with 
     the agency acquisition officials and the Administration to 
     revise the procurement strategies for such proposed 
     solicitations where appropriate to increase the probability 
     of participation by small businesses as prime contractors, or 
     to facilitate small business participation as subcontractors 
     and suppliers, if a solicitation for a bundled contract is to 
     be issued;''.

     SEC. 414. REPORTING OF BUNDLED CONTRACT OPPORTUNITIES.

       (a) Data Collection Required.--The Federal Procurement Data 
     System described in section 6(d)(4)(A) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)) shall 
     be modified to collect data regarding bundling of contract 
     requirements when the contracting officer anticipates that 
     the resulting contract price, including all options, is 
     expected to exceed $5,000,000. The data shall reflect a 
     determination made by the contracting officer regarding 
     whether a particular solicitation constitutes a contract 
     bundling.
       (b) Definitions.--In this section, the term ``bundling of 
     contract requirements'' has the meaning given that term in 
     section 3(o) of the Small Business Act (15 U.S.C. 632(o)) (as 
     added by section 412 of this subtitle).

     SEC. 415. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING 
                   CONTRACTS.

       Section 8(d)(4) of the Small Business Act (15 U.S.C. 
     637(d)(4)) is amended by adding at the end the following:
       ``(G) The following factors shall be designated by the 
     Federal agency as significant factors for purposes of 
     evaluating offers for a bundled contract where the head of 
     the agency determines that the contract offers a significant 
     opportunity for subcontracting:
       ``(i) A factor that is based on the rate provided under the 
     subcontracting plan for small business participation in the 
     performance of the contract.
       ``(ii) For the evaluation of past performance of an 
     offeror, a factor that is based on the extent to which the 
     offeror attained applicable goals for small business 
     participation in the performance of contracts.''.

     SEC. 416. IMPROVED NOTICE OF SUBCONTRACTING OPPORTUNITIES.

       (a) Use of the Commerce Business Daily Authorized.--Section 
     8 of the Small Business Act (15 U.S.C. 637) is amended by 
     adding at the end the following:
       ``(k) Notices of Subcontracting Opportunities.--
       ``(1) In general.--Notices of subcontracting opportunities 
     may be submitted for publication in the Commerce Business 
     Daily by--
       ``(A) a business concern awarded a contract by an executive 
     agency subject to subsection (e)(1)(C); and
       ``(B) a business concern that is a subcontractor or 
     supplier (at any tier) to such contractor having a 
     subcontracting opportunity in excess of $10,000.
       ``(2) Content of notice.--The notice of a subcontracting 
     opportunity shall include--
       ``(A) a description of the business opportunity that is 
     comparable to the description specified in paragraphs (1), 
     (2), (3), and (4) of subsection (f); and
       ``(B) the due date for receipt of offers.''.
       (b) Regulations Required.--The Federal Acquisition 
     Regulation shall be amended to provide uniform implementation 
     of the amendments made by this section.
       (c) Conforming Amendment.--Section 8(e)(1)(C) of the Small 
     Business Act (15 U.S.C. 637(e)(1)(C)) is amended by striking 
     ``$25,000'' each place that term appears and inserting 
     ``$100,000''.

     SEC. 417. DEADLINES FOR ISSUANCE OF REGULATIONS.

       (a) Proposed Regulations.--Proposed amendments to the 
     Federal Acquisition Regulation or proposed Small Business 
     Administration regulations under this subtitle and the 
     amendments made by this subtitle shall be published not later 
     than 120 days after the date of enactment of this Act for the 
     purpose of obtaining public comment pursuant to section 22 of 
     the Office of Federal Procurement Policy Act (41 U.S.C. 
     418b), or chapter 5 of title 5, United States Code, as 
     appropriate. The public shall be afforded not less than 60 
     days to submit comments.
       (b) Final Regulations.--Final regulations shall be 
     published not later than 270 days after the date of enactment 
     of this Act. The effective date for such final regulations 
     shall be not less than 30 days after the date of publication.
                   TITLE V--MISCELLANEOUS PROVISIONS

     SEC. 501. SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM.

       (a) Required Expenditures.--Section 9(n) of the Small 
     Business Act (15 U.S.C. 638(n)) is amended by striking 
     paragraph (1) and inserting the following:
       ``(1) Required expenditure amounts.--With respect to fiscal 
     years 1998, 1999, 2000, and 2001, each Federal agency that 
     has an extramural budget for research, or research and 
     development, in excess of $1,000,000,000 for that fiscal 
     year, is authorized to expend with small business concerns 
     not less than 0.15 percent of that extramural budget 
     specifically in connection with STTR programs that meet the 
     requirements of this section and any policy directives and 
     regulations issued under this section.''.
       (b) Reports and Outreach.--
       (1) In general.--Section 9 of the Small Business Act (15 
     U.S.C. 638) is amended--
       (A) in subsection (o)--
       (i) by redesignating paragraphs (8) through (11) as 
     paragraphs (10) through (13), respectively; and
       (ii) by inserting after paragraph (7) the following:
       ``(8) include, as part of its annual performance plan as 
     required by subsections (a) and (b) of section 1115 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;'';
       (B) in subsection (e)(4)(A), by striking ``(ii)''; and
       (C) by adding at the end the following:
       ``(s) Outreach.--
       ``(1) Definition of eligible state.--In this subsection, 
     the term `eligible State' means a State--
       ``(A) if the total value of contracts awarded to the State 
     during fiscal year 1995 under this section was less than 
     $5,000,000; and
       ``(B) that certifies to the Administration described in 
     paragraph (2) that the State will, upon receipt of assistance 
     under this subsection, provide matching funds from non-
     Federal sources in an amount that is not less than 50 percent 
     of the amount provided under this subsection.
       ``(2) Program authority.--Of amounts made available to 
     carry out this section for fiscal year 1998, 1999, 2000, or 
     2001 the Administrator may expend with eligible States not 
     more than $2,000,000 in each such fiscal year in order to 
     increase the participation of small business concerns located 
     in those States in the programs under this section.
       ``(3) Amount of assistance.--The amount of assistance 
     provided to an eligible State under this subsection in any 
     fiscal year--
       ``(A) shall be equal to twice the total amount of matching 
     funds from non-Federal sources provided by the State; and
       ``(B) shall not exceed $100,000.
       ``(4) Use of assistance.--Assistance provided to an 
     eligible State under this subsection shall be used by the 
     State, in consultation with State and local departments and 
     agencies, for programs and activities to increase the 
     participation of small business concerns located in the State 
     in the programs under this section, including--
       ``(A) the establishment of quantifiable performance goals, 
     including goals relating to--
       ``(i) the number of program awards under this section made 
     to small business concerns in the State; and
       ``(ii) the total amount of Federal research and development 
     contracts awarded to small business concerns in the State;
       ``(B) the provision of competition outreach support to 
     small business concerns in the State that are involved in 
     research and development; and
       ``(C) the development and dissemination of educational and 
     promotional information relating to the programs under this 
     section to small business concerns in the State.

[[Page H10494]]

       ``(t) Inclusion in Strategic Plans.--Program information 
     relating to the SBIR and STTR programs shall be included by 
     each Federal agency in any update or revision required of the 
     Federal agency under section 306(b) of title 5, United States 
     Code.''.
       (2) Repeal.--Effective October 1, 2001, section 9(s) of the 
     Small Business Act (as added by paragraph (1) of this 
     subsection) is repealed.

     SEC. 502. SMALL BUSINESS DEVELOPMENT CENTERS.

       (a) In General.--Section 21(a) of the Small Business Act 
     (15 U.S.C. 648(a)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``any women's business center operating 
     pursuant to section 29,'' after ``credit or finance 
     corporation,'';
       (B) by inserting ``or a women's business center operating 
     pursuant to section 29'' after ``other than an institution of 
     higher education''; and
       (C) by inserting ``and women's business centers operating 
     pursuant to section 29'' after ``utilize institutions of 
     higher education'';
       (2) in paragraph (3)--
       (A) by striking ``, but with'' and all that follows through 
     ``parties.'' and inserting the following: ``for the delivery 
     of programs and services to the small business community. 
     Such programs and services shall be jointly developed, 
     negotiated, and agreed upon, with full participation of both 
     parties, pursuant to an executed cooperative agreement 
     between the Small Business Development Center applicant and 
     the Administration.''; and
       (B) by adding at the end the following:
       ``(C) On an annual basis, the Small Business Development 
     Center shall review and coordinate public and private 
     partnerships and cosponsorships with the Administration for 
     the purpose of more efficiently leveraging available 
     resources on a National and a State basis.'';
       (3) in paragraph (4)(C)--
       (A) by striking clause (i) and inserting the following:
       ``(i) In general.--
       ``(I) Grant amount.--Subject to subclauses (II) and (III), 
     the amount of a grant received by a State under this section 
     shall be equal to the greater of $500,000, or the sum of--

       ``(aa) the State's pro rata share of the national program, 
     based upon the population of the State as compared to the 
     total population of the United States; and
       ``(bb) $300,000 in fiscal year 1998, $400,000 in fiscal 
     year 1999, and $500,000 in each fiscal year thereafter.

       ``(II) Pro rata reductions.--If the amount made available 
     to carry out this section for any fiscal year is insufficient 
     to carry out subclause (I)(bb), the Administration shall make 
     pro rata reductions in the amounts otherwise payable to 
     States under subclause (I)(bb).
       ``(III) Matching requirement.--The amount of a grant 
     received by a State under this section shall not exceed the 
     amount of matching funds from sources other than the Federal 
     Government provided by the State under subparagraph (A).''; 
     and
       (B) in clause (iii), by striking ``(iii)'' and all that 
     follows through ``1997.'' and inserting the following:
       ``(iii) National program.--There are authorized to be 
     appropriated to carry out the national program under this 
     section--
       ``(I) $85,000,000 for fiscal year 1998;
       ``(II) $90,000,000 for fiscal year 1999; and
       ``(III) $95,000,000 for fiscal year 2000 and each fiscal 
     year thereafter.''; and
       (4) in paragraph (6)--
       (A) in subparagraph (A), by striking ``and'' at the end;
       (B) in subparagraph (B), by striking the comma at the end 
     and inserting ``; and''; and
       (C) inserting after subparagraph (B) the following:
       ``(C) with outreach, development, and enhancement of 
     minority-owned small business startups or expansions, HUBZone 
     small business concerns, veteran-owned small business 
     startups or expansions, and women-owned small business 
     startups or expansions, in communities impacted by base 
     closings or military or corporate downsizing, or in rural or 
     underserved communities;''.
       (b) SBDC Services.--Section 21(c) of the Small Business Act 
     (15 U.S.C. 648(c)) is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (A), by striking ``businesses;'' and 
     inserting ``businesses, including--
       ``(i) working with individuals to increase awareness of 
     basic credit practices and credit requirements;
       ``(ii) working with individuals to development business 
     plans, financial packages, credit applications, and contract 
     proposals;
       ``(iii) working with the Administration to develop and 
     provide informational tools for use in working with 
     individuals on pre-business startup planning, existing 
     business expansion, and export planning; and
       ``(iv) working with individuals referred by the local 
     offices of the Administration and Administration 
     participating lenders;'';
       (B) in each of subparagraphs (B), (C), (D), (E), (F), (G), 
     (M), (N), (O), (Q), and (R) by moving each margin 2 ems to 
     the left; and
       (C) in subparagraph (C), by inserting ``and the 
     Administration'' after ``Center'';
       (2) in paragraph (5)--
       (A) by moving the margin 2 ems to the right;
       (B) by striking ``paragraph (a)(1)'' and inserting 
     ``subsection (a)(1)'';
       (C) by striking ``which ever'' and inserting ``whichever''; 
     and
       (D) by striking ``last,,'' and inserting ``last,'';
       (3) by redesignating paragraphs (4) through (7) as 
     paragraphs (5) through (8), respectively; and
       (4) in paragraph (3), in the undesignated material 
     following subparagraph (R), 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 or cooperative agreement 
     under this section with an entity that is covered by this 
     section is not renewed or extended, any award of a successor 
     contract or cooperative agreement under this section to 
     another entity shall be made on a competitive basis.''.
       (d) Prohibition on Certain Fees.--Section 21 of the Small 
     Business Act (15 U.S.C. 648) is amended by adding at the end 
     the following:
       ``(m) Prohibition on Certain Fees.--A small business 
     development center shall not impose or otherwise collect a 
     fee or other compensation in connection with the provision of 
     counseling services under this section.''.

     SEC. 503. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM 
                   EXTENSION.

       Section 207 of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (15 U.S.C. 694b 
     note) is amended by striking ``September 30, 1997'' and 
     inserting ``September 30, 2000''.

     SEC. 504. EXTENSION OF COSPONSORSHIP AUTHORITY.

       Section 401(a)(2) of the Small Business Administration 
     Reauthorization and Amendments Act of 1994 (15 U.S.C. 637 
     note) is amended by striking ``September 30, 1997'' and 
     inserting ``September 30, 2000''.

     SEC. 505. ASSET SALES.

       In connection with the Administration's implementation of a 
     program to sell to the private sector loans and other assets 
     held by the Administration, the Administration shall provide 
     to the Committees a copy of the draft and final plans 
     describing the sale and the anticipated benefits resulting 
     from such sale.

     SEC. 506. SMALL BUSINESS EXPORT PROMOTION.

       (a) In General.--Section 21(c)(3) of the Small Business Act 
     (15 U.S.C. 648(c)(3)) is amended--
       (1) in subparagraph (Q), by striking ``and'' at the end;
       (2) in subparagraph (R), by striking the period at the end 
     and inserting ``; and''; and
       (3) by inserting after subparagraph (R) the following:
       ``(S) providing small business owners with access to a wide 
     variety of export-related information by establishing on-line 
     computer linkages between small business development centers 
     and an international trade data information network with ties 
     to the Export Assistance Center program.''.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out section 21(c)(3)(S) of the 
     Small Business Act (15 U.S.C. 648(c)(3)(S)), as added by this 
     section, $1,500,000 for each fiscal years 1998 and 1999.

     SEC. 507. DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM.

       (a) DELTA Program Authorized.--
       (1) In general.--The Administrator may administer the 
     Defense Loan and Technical Assistance program in accordance 
     with the authority and requirements of this section.
       (2) Expiration of authority.--The authority of the 
     Administrator to carry out the DELTA program under paragraph 
     (1) shall terminate when the funds referred to in subsection 
     (g)(1) have been expended.
       (3) DELTA program defined.--In this section, the terms 
     ``Defense Loan and Technical Assistance program'' and ``DELTA 
     program'' mean the Defense Loan and Technical Assistance 
     program that has been established by a memorandum of 
     understanding entered into by the Administrator and the 
     Secretary of Defense on June 26, 1995.
       (b) Assistance.--
       (1) Authority.--Under the DELTA program, the Administrator 
     may assist small business concerns that are economically 
     dependent on defense expenditures to acquire dual-use 
     capabilities.
       (2) Forms of assistance.--Forms of assistance authorized 
     under paragraph (1) are as follows:
       (A) Loan guarantees.--Loan guarantees under the terms and 
     conditions specified under this section and other applicable 
     law.
       (B) Nonfinancial assistance.--Other forms of assistance 
     that are not financial.
       (c) Administration of Program.--In the administration of 
     the DELTA program under this section, the Administrator 
     shall--
       (1) process applications for DELTA program loan guarantees;
       (2) guarantee repayment of the resulting loans in 
     accordance with this section; and
       (3) take such other actions as are necessary to administer 
     the program.
       (d) Selection and Eligibility Requirements for DELTA Loan 
     Guarantees.--
       (1) In general.--The selection criteria and eligibility 
     requirements set forth in this subsection shall be applied in 
     the selection of small business concerns to receive loan 
     guarantees under the DELTA program.
       (2) Selection criteria.--The criteria used for the 
     selection of a small business concern to receive a loan 
     guarantee under this section are as follows:
       (A) The selection criteria established under the memorandum 
     of understanding referred to in subsection (a)(3).
       (B) The extent to which the loans to be guaranteed would 
     support the retention of defense workers whose employment 
     would otherwise be permanently or temporarily terminated as a 
     result of reductions in expenditures by the United States for 
     defense, the termination or cancellation of a defense 
     contract, the failure to proceed with an approved major 
     weapon system, the merger or consolidation of the operations 
     of a defense contractor, or the closure or realignment of a 
     military installation.
       (C) The extent to which the loans to be guaranteed would 
     stimulate job creation and new

[[Page H10495]]

     economic activities in communities most adversely affected by 
     reductions in expenditures by the United States for defense, 
     the termination or cancellation of a defense contract, the 
     failure to proceed with an approved major weapon system, the 
     merger or consolidation of the operations of a defense 
     contractor, or the closure or realignment of a military 
     installation.
       (D) The extent to which the loans to be guaranteed would be 
     used to acquire (or permit the use of other funds to acquire) 
     capital equipment to modernize or expand the facilities of 
     the borrower to enable the borrower to remain in the national 
     technology and industrial base available to the Department of 
     Defense.
       (3) Eligibility requirements.--To be eligible for a loan 
     guarantee under the DELTA program, a borrower must 
     demonstrate to the satisfaction of the Administrator that, 
     during any 1 of the 5 preceding operating years of the 
     borrower, not less than 25 percent of the value of the 
     borrower's sales were derived from--
       (A) contracts with the Department of Defense or the 
     defense-related activities of the Department of Energy; or
       (B) subcontracts in support of defense-related prime 
     contracts.
       (e) Maximum Amount of Loan Principal.--With respect to each 
     borrower, the maximum amount of loan principal for which the 
     Administrator may provide a guarantee under this section 
     during a fiscal year may not exceed $1,250,000.
       (f) Loan Guaranty Rate.--The maximum allowable guarantee 
     percentage for loans guaranteed under this section may not 
     exceed 80 percent.
       (g) Funding.--
       (1) In general.--The funds that have been made available 
     for loan guarantees under the DELTA program and have been 
     transferred from the Department of Defense to the Small 
     Business Administration before the date of the enactment of 
     this Act shall be used for carrying out the DELTA program 
     under this section.
       (2) Continued availability of existing funds.--The funds 
     made available under the second proviso under the heading 
     ``Research, Development, Test and Evaluation, Defense-Wide'' 
     in Public Law 103-335 (108 Stat. 2613) shall be available 
     until expended--
       (A) to cover the costs (as defined in section 502(5) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) of loan 
     guarantees issued under this section; and
       (B) to cover the reasonable costs of the administration of 
     the loan guarantees.

     SEC. 508. VERY SMALL BUSINESS CONCERNS.

       Section 304(i) of the Small Business Administration 
     Reauthorization and Amendments Act of 1994 (15 U.S.C. 644 
     note) is amended by striking ``September 30, 1998'' and 
     inserting ``September 30, 2000''.

     SEC. 509. TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS 
                   CONCERNS ADVERSELY AFFECTED BY NAFTA.

       The Administrator shall coordinate Federal assistance in 
     order to provide counseling to small business concerns 
     adversely affected by the North American Free Trade 
     Agreement.
                       TITLE VI--HUBZONE PROGRAM

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``HUBZone Act of 1997''.

     SEC. 602. HISTORICALLY UNDERUTILIZED BUSINESS ZONES.

       (a) Definitions.--Section 3 of the Small Business Act (15 
     U.S.C. 632) (as amended by section 412 of this Act) is 
     amended by adding at the end the following:
       ``(p) Definitions Relating to HUBZones.--In this Act:
       ``(1) Historically underutilized business zone.--The term 
     `historically underutilized business zone' means any area 
     located within 1 or more--
       ``(A) qualified census tracts;
       ``(B) qualified nonmetropolitan counties; or
       ``(C) lands within the external boundaries of an Indian 
     reservation.
       ``(2) HUBZone.--The term `HUBZone' means a historically 
     underutilized business zone.
       ``(3) HUBZone small business concern.--The term `HUBZone 
     small business concern' means a small business concern--
       ``(A) that is owned and controlled by 1 or more persons, 
     each of whom is a United States citizen; and
       ``(B) the principal office of which is located in a 
     HUBZone; or
       ``(4) Qualified areas.--
       ``(A) Qualified census tract.--The term `qualified census 
     tract' has the meaning given that term in section 
     42(d)(5)(C)(ii)(I) of the Internal Revenue Code of 1986.
       ``(B) Qualified nonmetropolitan county.--The term 
     `qualified nonmetropolitan county' means any county--
       ``(i) that, based on the most recent data available from 
     the Bureau of the Census of the Department of Commerce--

       ``(I) is not located in a metropolitan statistical area (as 
     defined in section 143(k)(2)(B) of the Internal Revenue Code 
     of 1986); and
       ``(II) in which the median household income is less than 80 
     percent of the nonmetropolitan State median household income; 
     or

       ``(ii) that, based on the most recent data available from 
     the Secretary of Labor, has an unemployment rate that is not 
     less than 140 percent of the statewide average unemployment 
     rate for the State in which the county is located.
       ``(5) Qualified hubzone small business concern.--
       ``(A) In general.--A HUBZone small business concern is 
     `qualified', if--
       ``(i) the small business concern has certified in writing 
     to the Administrator (or the Administrator otherwise 
     determines, based on information submitted to the 
     Administrator by the small business concern, or based on 
     certification procedures, which shall be established by the 
     Administration by regulation) that--

       ``(I) it is a HUBZone small business concern;
       ``(II) not less than 35 percent of the employees of the 
     small business concern reside in a HUBZone, and the small 
     business concern will attempt to maintain this employment 
     percentage during the performance of any contract awarded to 
     the small business concern on the basis of a preference 
     provided under section 31(b); and
       ``(III) with respect to any subcontract entered into by the 
     small business concern pursuant to a contract awarded to the 
     small business concern under section 31, the small business 
     concern will ensure that--

       ``(aa) in the case of a contract for services (except 
     construction), not less than 50 percent of the cost of 
     contract performance incurred for personnel will be expended 
     for its employees or for employees of other HUBZone small 
     business concerns; and
       ``(bb) in the case of a contract for procurement of 
     supplies (other than procurement from a regular dealer in 
     such supplies), not less than 50 percent of the cost of 
     manufacturing the supplies (not including the cost of 
     materials) will be incurred in connection with the 
     performance of the contract in a HUBZone by 1 or more HUBZone 
     small business concerns; and
       ``(ii) no certification made or information provided by the 
     small business concern under clause (i) has been, in 
     accordance with the procedures established under section 
     31(c)(1)--

       ``(I) successfully challenged by an interested party; or
       ``(II) otherwise determined by the Administrator to be 
     materially false.

       ``(B) Change in percentages.--The Administrator may utilize 
     a percentage other than the percentage specified in under 
     item (aa) or (bb) of subparagraph (A)(i)(III), if the 
     Administrator determines that such action is necessary to 
     reflect conventional industry practices among small business 
     concerns that are below the numerical size standard for 
     businesses in that industry category.
       ``(C) Construction and other contracts.--The Administrator 
     shall promulgate final regulations imposing requirements that 
     are similar to those specified in subclauses (IV) and (V) of 
     subparagraph (A)(i) on contracts for general and specialty 
     construction, and on contracts for any other industry 
     category that would not otherwise be subject to those 
     requirements. The percentage applicable to any such 
     requirement shall be determined in accordance with 
     subparagraph (B).
       ``(D) List of qualified small business concerns.--The 
     Administrator shall establish and maintain a list of 
     qualified HUBZone small business concerns, which list shall, 
     to the extent practicable--
       ``(i) include the name, address, and type of business with 
     respect to each such small business concern;
       ``(ii) be updated by the Administrator not less than 
     annually; and
       ``(iii) be provided upon request to any Federal agency or 
     other entity.''.
       (b) Federal Contracting.--
       (1) In general.--The Small Business Act (15 U.S.C. 631 et 
     seq.) is amended--
       (A) by redesignating section 31 as section 32; and
       (B) by inserting after section 30 the following:

     ``SEC. 31. HUBZONE PROGRAM.

       ``(a) In General.--There is established within the 
     Administration a program to be carried out by the 
     Administrator to provide for Federal contracting assistance 
     to qualified HUBZone small business concerns in accordance 
     with this section.
       ``(b) Eligible Contracts.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `contracting officer' has the meaning given 
     that term in section 27(f)(5) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 423(f)(5)); and
       ``(B) the term `full and open competition' has the meaning 
     given that term in section 4 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 403).
       ``(2) Authority of contracting officer.--Notwithstanding 
     any other provision of law--
       ``(A) a contracting officer may award sole source contracts 
     under this section to any qualified HUBZone small business 
     concern, if--
       ``(i) the qualified HUBZone small business concern is 
     determined to be a responsible contractor with respect to 
     performance of such contract opportunity, and the contracting 
     officer does not have a reasonable expectation that 2 or more 
     qualified HUBZone small business concerns will submit offers 
     for the contracting opportunity;
       ``(ii) the anticipated award price of the contract 
     (including options) will not exceed--

       ``(I) $5,000,000, in the case of a contract opportunity 
     assigned a standard industrial classification code for 
     manufacturing; or
       ``(II) $3,000,000, in the case of all other contract 
     opportunities; and

       ``(iii) in the estimation of the contracting officer, the 
     contract award can be made at a fair and reasonable price;
       ``(B) a contract opportunity shall be awarded pursuant to 
     this section on the basis of competition restricted to 
     qualified HUBZone small business concerns if the contracting 
     officer has a reasonable expectation that not less than 2 
     qualified HUBZone small business concerns will submit offers 
     and that the award can be made at a fair market price; and
       ``(C) not later than 5 days from the date the 
     Administration is notified of a procurement officer's 
     decision not to award a contract opportunity under this 
     section to a qualified HUBZone small business concern, the 
     Administrator may notify the contracting officer of the 
     intent to appeal the contracting officer's decision, and 
     within 15 days of such date the Administrator may file a 
     written request for reconsideration of the contracting 
     officer's decision

[[Page H10496]]

     with the Secretary of the department or agency head.
       ``(3) Price evaluation preference in full and open 
     competitions.--In any case in which a contract is to be 
     awarded on the basis of full and open competition, the price 
     offered by a qualified HUBZone small business concern shall 
     be deemed as being lower than the price offered by another 
     offeror (other than another small business concern), if the 
     price offered by the qualified HUBZone small business concern 
     is not more than 10 percent higher than the price offered by 
     the otherwise lowest, responsive, and responsible offeror.
       ``(4) Relationship to other contracting preferences.--A 
     procurement may not be made from a source on the basis of a 
     preference provided in paragraph (2) or (3), if the 
     procurement would otherwise be made from a different source 
     under section 4124 or 4125 of title 18, United States Code, 
     or the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).
       ``(c) Enforcement; Penalties.--
       ``(1) Verification of eligibility.--In carrying out this 
     section, the Administrator shall establish procedures 
     relating to--
       ``(A) the filing, investigation, and disposition by the 
     Administration of any challenge to the eligibility of a small 
     business concern to receive assistance under this section 
     (including a challenge, filed by an interested party, 
     relating to the veracity of a certification made or 
     information provided to the Administration by a small 
     business concern under section 3(p)(5)); and
       ``(B) verification by the Administrator of the accuracy of 
     any certification made or information provided to the 
     Administration by a small business concern under section 
     3(p)(5).
       ``(2) Examinations.--The procedures established under 
     paragraph (1) may provide for program examinations (including 
     random program examinations) by the Administrator of any 
     small business concern making a certification or providing 
     information to the Administrator under section 3(p)(5).
       ``(3) Provision of data.--Upon the request of the 
     Administrator, the Secretary of Labor, the Secretary of 
     Housing and Urban Development, and the Secretary of the 
     Interior (or the Assistant Secretary for Indian Affairs), 
     shall promptly provide to the Administrator such information 
     as the Administrator determines to be necessary to carry out 
     this subsection.
       ``(4) Penalties.--In addition to the penalties described in 
     section 16(d), any small business concern that is determined 
     by the Administrator to have misrepresented the status of 
     that concern as a `HUBZone small business concern' for 
     purposes of this section, shall be subject to--
       ``(A) section 1001 of title 18, United States Code; and
       ``(B) sections 3729 through 3733 of title 31, United States 
     Code.''.
       (2) Initial limited applicability.--During the period 
     beginning on the date of enactment of this Act and ending on 
     September 30, 2000, section 31 of the Small Business Act (as 
     added by paragraph (1) of this subsection) shall apply only 
     to procurements by--
       (A) the Department of Defense;
       (B) the Department of Agriculture;
       (C) the Department of Health and Human Services;
       (D) the Department of Transportation;
       (E) the Department of Energy;
       (F) the Department of Housing and Urban Development;
       (G) the Environmental Protection Agency;
       (H) the National Aeronautics and Space Administration;
       (I) the General Services Administration; and
       (J) the Department of Veterans Affairs.

     SEC. 603. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL 
                   BUSINESS ACT.

       (a) Performance of Contracts.--Section 8(d) of the Small 
     Business Act (15 U.S.C. 637(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``,, small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals'' and inserting ``, qualified 
     HUBZone small business concerns, small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals''; and
       (B) in the second sentence, by inserting ``qualified 
     HUBZone small business concerns,'' after ``small business 
     concerns,'';
       (2) in paragraph (3)--
       (A) by inserting ``qualified HUBZone small business 
     concerns,'' after ``small business concerns,'' each place 
     that term appears; and
       (B) by adding at the end the following:
       ``(F) In this contract, the term `qualified HUBZone small 
     business concern' has the meaning given that term in section 
     3(p) of the Small Business Act.'';
       (3) in paragraph (4)(E), by striking ``small business 
     concerns and'' and inserting ``small business concerns, 
     qualified HUBZone small business concerns, and'';
       (4) in paragraph (6), by inserting ``qualified HUBZone 
     small business concerns,'' after ``small business concerns,'' 
     each place that term appears; and
       (5) in paragraph (10), by inserting ``qualified HUBZone 
     small business concerns,'' after ``small business 
     concerns,''.
       (b) Awards of Contracts.--Section 15 of the Small Business 
     Act (15 U.S.C. 644) is amended--
       (1) in subsection (g)(1)--
       (A) by inserting ``qualified HUBZone small business 
     concerns,'' after ``small business concerns,'' each place 
     that term appears;
       (B) in the second sentence, by striking ``20 percent'' and 
     inserting ``23 percent''; and
       (C) by inserting after the second sentence the following: 
     ``The Governmentwide goal for participation by qualified 
     HUBZone small business concerns shall be established at not 
     less than 1 percent of the total value of all prime contract 
     awards for fiscal year 1999, not less than 1.5 percent of the 
     total value of all prime contract awards for fiscal year 
     2000, not less than 2 percent of the total value of all prime 
     contract awards for fiscal year 2001, not less than 2.5 
     percent of the total value of all prime contract awards for 
     fiscal year 2002, and not less than 3 percent of the total 
     value of all prime contract awards for fiscal year 2003 and 
     each fiscal year thereafter.'';
       (2) in subsection (g)(2)--
       (A) in the first sentence, by striking ``,, by small 
     business concerns owned and controlled by socially and 
     economically disadvantaged individuals'' and inserting ``, by 
     qualified HUBZone small business concerns, by small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals'';
       (B) in the second sentence, by inserting ``qualified 
     HUBZone small business concerns,'' after ``small business 
     concerns,''; and
       (C) in the fourth sentence, by striking ``by small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals and participation by small business 
     concerns owned and controlled by women'' and inserting ``by 
     qualified HUBZone small business concerns, by small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals, and by small business concerns 
     owned and controlled by women''; and
       (3) in subsection (h), by inserting ``qualified HUBZone 
     small business concerns,'' after ``small business concerns,'' 
     each place that term appears.
       (c) Offenses and Penalties.--Section 16 of the Small 
     Business Act (15 U.S.C. 645) is amended--
       (1) in subsection (d)(1)--
       (A) by inserting ``, a `qualified HUBZone small business 
     concern','' after `` `small business concern',''; and
       (B) in subparagraph (A), by striking ``section 9 or 15'' 
     and inserting ``section 9, 15, or 31''; and
       (2) in subsection (e), by inserting ``, a `HUBZone small 
     business concern','' after `` `small business concern',''.

     SEC. 604. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Title 10, United States Code.--Section 2323 of title 
     10, United States Code, is amended--
       (1) in subsection (a)(1)(A), by inserting before the 
     semicolon the following: ``, and qualified HUBZone small 
     business concerns (as defined in section 3(p) of the Small 
     Business Act)''; and
       (2) in subsection (f)(1), by inserting ``or as a qualified 
     HUBZone small business concern (as defined in section 3(p) of 
     the Small Business Act)'' after ``(as described in subsection 
     (a))''.
       (b) Federal Home Loan Bank Act.--Section 21A(b)(13) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is 
     amended--
       (1) by striking ``concerns and small'' and inserting 
     ``concerns, small''; and
       (2) by inserting ``, and qualified HUBZone small business 
     concerns (as defined in section 3(p) of the Small Business 
     Act)'' after ``disadvantaged individuals''.
       (c) Small Business Economic Policy Act of 1980.--Section 
     303(e) of the Small Business Economic Policy Act of 1980 (15 
     U.S.C. 631b(e)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) qualified HUBZone small business concern (as defined 
     in section 3(p) of the Small Business Act).''.
       (d) Small Business Investment Act of 1958.--Section 
     411(c)(3)(B) of the Small Business Investment Act of 1958 (15 
     U.S.C. 694b(c)(3)(B)) is amended by inserting before the 
     semicolon the following: ``, or to a qualified HUBZone small 
     business concern (as defined in section 3(p) of the Small 
     Business Act)''.
       (e) Title 31, United States Code.--
       (1) Contracts for collection services.--Section 3718(b) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)(B), by inserting ``and law firms that 
     are qualified HUBZone small business concerns (as defined in 
     section 3(p) of the Small Business Act)'' after 
     ``disadvantaged individuals''; and
       (B) in paragraph (3)--
       (i) in the first sentence, by inserting before the period 
     ``and law firms that are qualified HUBZone small business 
     concerns'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) the term `qualified HUBZone small business concern' 
     has the meaning given that term in section 3(p) of the Small 
     Business Act.''.
       (2) Payments to local governments.--Section 6701(f) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) qualified HUBZone small business concerns.''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) the term `qualified HUBZone small business concern' 
     has the meaning given that term in section 3(p) of the Small 
     Business Act (15 U.S.C. 632(o)).''.
       (3) Regulations.--Section 7505(c) of title 31, United 
     States Code, is amended by striking

[[Page H10497]]

     ``small business concerns and'' and inserting ``small 
     business concerns, qualified HUBZone small business concerns, 
     and''.
       (f) Office of Federal Procurement Policy Act.--
       (1) Enumeration of included functions.--Section 6(d) of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 405(d)) 
     is amended--
       (A) in paragraph (11), by inserting ``qualified HUBZone 
     small business concerns (as defined in section 3(p) of the 
     Small Business Act),'' after ``small businesses,''; and
       (B) in paragraph (12), by inserting ``qualified HUBZone 
     small business concerns (as defined in section 3(p) of the 
     Small Business Act (15 U.S.C. 632(o)),'' after ``small 
     businesses,''.
       (2) Procurement data.--Section 502 of the Women's Business 
     Ownership Act of 1988 (41 U.S.C. 417a) is amended--
       (A) in subsection (a)--
       (i) in the first sentence, by inserting ``the number of 
     qualified HUBZone small business concerns,'' after 
     ``Procurement Policy''; and
       (ii) by inserting a comma after ``women''; and
       (B) in subsection (b), by inserting after ``section 204 of 
     this Act'' the following: ``, and the term `qualified HUBZone 
     small business concern' has the meaning given that term in 
     section 3(p) of the Small Business Act (15 U.S.C. 632(o)).''.
       (g) Energy Policy Act of 1992.--Section 3021 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13556) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``or'';
       (B) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(4) qualified HUBZone small business concerns.''; and
       (2) in subsection (b), by adding at the end the following:
       ``(3) The term `qualified HUBZone small business concern' 
     has the meaning given that term in section 3(p) of the Small 
     Business Act (15 U.S.C. 632(o)).''.
       (h) Title 49, United States Code.--
       (1) Project grant application approval conditioned on 
     assurances about airport operation.--Section 47107(e) of 
     title 49, United States Code, is amended--
       (A) in paragraph (1), by inserting before the period ``or 
     qualified HUBZone small business concerns (as defined in 
     section 3(p) of the Small Business Act)'';
       (B) in paragraph (4)(B), by inserting before the period 
     ``or as a qualified HUBZone small business concern (as 
     defined in section 3(p) of the Small Business Act)''; and
       (C) in paragraph (6), by inserting ``or a qualified HUBZone 
     small business concern (as defined in section 3(p) of the 
     Small Business Act)'' after ``disadvantaged individual''.
       (2) Minority and disadvantaged business participation.--
     Section 47113 of title 49, United States Code, is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking the period at the end and 
     inserting a semicolon;
       (ii) in paragraph (2), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(3) the term `qualified HUBZone small business concern' 
     has the meaning given that term in section 3(p) of the Small 
     Business Act (15 U.S.C. 632(o)).''; and
       (B) in subsection (b), by inserting before the period ``or 
     qualified HUBZone small business concerns''.

     SEC. 605. REGULATIONS.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall publish in the 
     Federal Register such final regulations as may be necessary 
     to carry out this title and the amendments made by this 
     title.
       (b) Federal Acquisition Regulation.--Not later than 180 
     days after the date on which final regulations are published 
     under subsection (a), the Federal Acquisition Regulatory 
     Council shall amend the Federal Acquisition Regulation in 
     order to ensure consistency between the Federal Acquisition 
     Regulation, this title and the amendments made by this title, 
     and the final regulations published under subsection (a).

     SEC. 606. REPORT.

       Not later than March 1, 2002, the Administrator shall 
     submit to the Committees a report on the implementation of 
     the HUBZone program established under section 31 of the Small 
     Business Act (as added by section 602(b) of this title) and 
     the degree to which the HUBZone program has resulted in 
     increased employment opportunities and an increased level of 
     investment in HUBZones (as defined in section 3(p) of the 
     Small Business Act (15 U.S.C. 632(p)), as added by section 
     602(a) of this title).

     SEC. 607. AUTHORIZATION OF APPROPRIATIONS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     (as amended by section 101 of this Act) is amended--
       (1) in subsection (c), by adding at the end the following:
       ``(3) HUBZone program.--There are authorized to be 
     appropriated to the Administration to carry out the program 
     under section 31, $5,000,000 for fiscal year 1998.'';
       (2) in subsection (d), by adding at the end the following:
       ``(3) HUBZone program.--There are authorized to be 
     appropriated to the Administration to carry out the program 
     under section 31, $5,000,000 for fiscal year 1999.''; and
       (3) in subsection (e), by adding at the end the following:
       ``(3) HUBZone program.--There are authorized to be 
     appropriated to the Administration to carry out the program 
     under section 31, $5,000,000 for fiscal year 2000.''.
                  TITLE VII--SERVICE DISABLED VETERANS

     SEC. 701. 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. 702. DEFINITIONS.

       In this title:
       (1) Eligible veteran.--The term ``eligible veteran'' means 
     a disabled veteran (as defined in section 4211(3) of title 
     38, United States Code).
       (2) 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) that is at least 51 percent owned by 1 or more eligible 
     veterans, 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 veterans; and
       (B) whose management and daily business operations are 
     controlled by eligible veterans.

      SEC. 703. REPORT BY SMALL BUSINESS ADMINISTRATION.

       (a) Study and Report.--
       (1) In general.--Not later than 9 months after the date of 
     enactment of this Act, the Administrator shall conduct a 
     comprehensive study and submit to the Committees a final 
     report containing findings and recommendations of the 
     Administrator on--
       (A) the needs of small business concerns owned and 
     controlled by eligible veterans;
       (B) the availability and utilization of Administration 
     programs by small business concerns owned and controlled by 
     eligible veterans;
       (C) 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
       (D) methods to improve Administration and other agency 
     programs to serve the needs of small business concerns owned 
     and controlled by eligible veterans.
       (2) Contents.--The report under paragraph (1) 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 nonprofit 
     sector, and Federal or State government agencies; and
       (3) shall have access to any information within other 
     Federal agencies that pertains to such veterans and their 
     small businesses, unless such access is specifically 
     prohibited by law.

      SEC. 704. INFORMATION COLLECTION.

       After the date of issuance of the report required by 
     section 703(a), 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. 705. 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. 706. 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 may make loans under this 
     subsection to small business concerns owned and controlled by 
     disabled veterans (as defined in section 4211(3) of title 38, 
     United States Code).''.

      SEC. 707. 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 that provide 
     entrepreneurial training, business development assistance, 
     counseling, and management assistance to small business 
     concerns, including, among others, the Small Business 
     Development Center program and the Service Corps of Retired 
     Executives (SCORE) program.

      SEC. 708. GRANTS FOR ELIGIBLE VETERANS' OUTREACH PROGRAMS.

       Section 8(b) of the Small Business Act (15 U.S.C. 637(b)) 
     is amended--
       (1) in paragraph (15), by striking ``and'' at the end;
       (2) in the first paragraph designated as paragraph (16), by 
     striking the period at the end and inserting ``; and''; and
       (3) by striking the second paragraph designated as 
     paragraph (16) and inserting the following:
       ``(17) to make grants to, and enter into contracts and 
     cooperative agreements with, educational institutions, 
     private businesses, veterans' nonprofit community-based 
     organizations,

[[Page H10498]]

     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. 709. 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, which 
     program shall include business training and management 
     assistance, employment and relocation counseling, and 
     dissemination of information on veterans' benefits and 
     veterans' entitlements.

  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.
  Mr. Speaker, the primary purpose of this legislation is to 
reauthorize the Small Business Administration and the programs which 
that agency oversees pursuant to the Small Business Act and the Small 
Business Investment Act. This reauthorization covers fiscal years 1998, 
1999 and 2000. Except for a couple of new provisions added by the other 
body, this legislation is identical to H.R. 2261, which this House 
passed under suspension of the rules by a vote of 397 to 17 just 6 
weeks ago.
  We regularly reauthorize the bulk of the programs contained in this 
legislation for 3-year periods. The programs contained in this 
legislation include the financial programs of the SBA, the 7(a) general 
business loan guarantee program, the section 504 Certified Development 
Company program, the Microloan program, and the Small Business 
Investment Company program.
  This legislation also changes and improves various programs, 
specifically modifying the section 504 Preferred Certified Lender 
Program, the SBIC program, the Women's Business Center program and the 
SBDC program. The SBA also provides hundreds of millions of dollars in 
vital disaster assistance to small businesses and homeowners every 
year, and this legislation reauthorizes that assistance.
  Title VII of the measure before us is the result of the collective 
work of multiple committees and individual Members. It 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 provisions are the 
products of bipartisan efforts by myself and the gentleman from New 
York [Mr. LaFalce], our committee's ranking member, working together 
with the chairman of the Committee on Rules and the chairman of the 
Committee on Veterans' Affairs.
  Section 501 of this legislation is also the product of a bipartisan 
and multi-committee effort both here and in the Senate. It contains 
most of the features of H.R. 2429, as reported by the Committee on 
Science, and is a 4-year reauthorization of the pilot Small Business 
Technology Transfer Program.
  As I said earlier, Mr. Speaker, the legislation before us today has 
some additional components that were added since we passed it here in 
the House in late September. These additional elements have been added 
as a result of collaborative and bipartisan efforts between the House 
and the Senate and, in fact, have involved the collective work of 
multiple committees from both Houses working in conjunction with 
representatives of the administration.
  Title VI of this legislation establishes the HUBZone program, which 
will provide incentives to businesses that locate in and employ 
residents from economically distressed areas, thereby targeting inner 
cities and rural communities that have low household incomes, high 
unemployment and whose communities have suffered from a lack of 
investment.
  Subtitle (b) of title IV of this legislation is another component 
which was added to this legislation by the Senate and addresses the 
important small business procurement issue of contract bundling. This 
provision is the result of lengthy negotiations, involving several 
Senate and House committees and the administration.
  Finally, section 507 of this legislation addresses the Defense Loan 
and Technical Assistance Program, or DELTA program, and is of great 
importance to numerous small businesses located in areas that have been 
adversely impacted as a result of the closing of military 
installations.
  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 and include extraneous material.)
  Mr. LaFALCE. Mr. Speaker, I rise in support of S. 1139, the Small 
Business Reauthorization Act of 1997.
  Mr. Speaker, this legislation includes the requisite authorization 
for programs administered by the Small Business Administration for 
fiscal year 1998 and the two ensuing years. It also includes important 
program changes for a number of the SBA programs.
  Specifically, it includes proposals for women's business development, 
which I advocated in separate legislation, such as making the women's 
business development a permanent program and increasing it to 5 years 
in lieu of the existing 3-year program.
  It also enhances the operation of the 504 program, also known as the 
certified development company or CDC program, which I authored in 1980. 
It makes needed improvements to allow implementation of the premier 
lenders program, which allows SBA to delegate loan making, servicing 
and liquidation functions to the best CDC's. Without this delegation of 
authority, which results in large reductions in SBA employee time 
demands, this program would grind to a halt, as would the 7(a) program 
without its similar delegation of authority, for SBA simply does not 
have sufficient personnel to make and service loans today. We depend on 
participating lenders to serve this function under SBA guidelines and 
oversight.
  But I would be remiss in my responsibilities as the ranking Democrat 
on the Committee on Small Business if I did not point out that this 
bill is not without concern. At Senate insistence, it includes a new 
program to assist economically distressed areas by channeling Federal 
contracting to them. Under this laudable concept, the distressed areas, 
called HUBZones, would receive major amounts of Federal contract 
dollars if the small business contractors unemployment base includes 35 
percent of its workforce from these HUBZones. Further, it would 
increase the small business contracting goal from 20 to 23 percent, a 
provision I strongly favor.
  I am very pleased to note that we were able to secure a major, major 
change from the version originally passed by the other body. The 
earlier version would have permitted contracts to be taken from an 
existing program which assists minorities and women, the 8(a) program.

                              {time}  1630

  We were successful in insisting that that provision be dropped 
totally. The Senate insisted on all the other provisions in the HUBZone 
title with very little change. I resisted that, too, until specifically 
prevailed upon by the Small Business Administration.
  Inclusion of this HUBZone concept as a permanent program without the 
customary trial provisions and other safeguards caused a number of 
Members of Congress to raise strong concerns, particularly because of 
the possibility of adverse impact on the 8(a) contracting program. Now, 
this is the most important program operated by the Federal Government 
to facilitate the growth and development of minority small businesses. 
Any proposals which might place this program in jeopardy naturally 
cause concern to those Members who place a high priority on the 
development of minority small business.
  We tried very hard to get a deletion of the entire HUBZone proposal 
even after they had deleted every single reference to 8(a). The HUBZone 
proposal is still maintained in the bill, but fortunately it confers 
considerable discretion on the Administrator of the SBA who will 
implement. After extensive discussions with Administrator Aida Alvarez, 
she sent me a very forceful letter explaining the administration's 
support for the reauthorization bill now under consideration and 
pledging that SBA will not permit the implementation of the HUBZone's 
program to negatively affect the 8(a) program. I

[[Page H10499]]

will include Miss Alvarez' strong letter of support for the 
authorization bill in the Record for any Member who is interested.
  The letter referred to is as follows:


                           U.S. Small Business Administration,

                               Washington, D.C., November 8, 1997.
     Hon. John J. LaFalce,
                                    U.S. House of Representatives,
     Washington, D.C.
       Dear Representative LaFalce: The Administration supports 
     realization of the programs of the Small Business 
     Administration and supports House passage of S. 1139. The 
     bill reauthorizes small business loans which assist tens of 
     thousands of small businesses each year and contribute to the 
     vitality of economy. This bill recognizes the importance of 
     women and service disabled veteran entrepreneurs. And, it 
     makes permanent SBA's Microloan Program which helps those 
     entrepreneurs who need very small amounts of credit. We need 
     this legislation to ensure that we can continue to properly 
     serve our small business customers.
       Some Members have raised concerns about the HUBZones 
     provisions in the authorization bill. Please note that unlike 
     earlier versions of the reauthorization bill, the new version 
     of the bill before the House has removed the harmful 
     provisions that would have affected the current preference 
     for 8(a) in the Defense Federal Acquisition Regulations 
     (DFAR), and my ability to appeal contracting actions that 
     might affect 8(a).
       I can assure you that SBA will not permit the 
     implementation of the HUBZones program to negatively affect 
     the 8(a) program. As you know, I am a strong supporter of the 
     8(a) program.
       Moreover, the bill will increase the federal procurement 
     goal for small business from 20 to 23 percent--increasing 
     opportunities for all small businesses including 8(a). With 
     this overall increase in federal contracting dollars for 
     small businesses there will be room for an increase in 8(a) 
     contracts and I intend to pursue increases in 8(a) contracts 
     aggressively.
       In the SBA's strategic plan I have committed to increasing 
     overall procurement for small disadvantaged businesses from 
     5.5 percent to 7 percent of all federal procurement by the 
     year 2000. Enactment of HUBZones will not affect these goals.
       It is my intention to increase 8(a) procurement as a 
     percentage of total federal procurement. Presently, 3.2 
     percent of all federal procurement dollars go to the 8(a) 
     program. Recently proposed rule changes will allow increased 
     flexibility in small business teaming and joint ventures, and 
     create a new mentor-protege program. I also intend to 
     increase 8(a) contracts through a more aggressive goaling 
     posture with other federal agencies and through the full 
     implementation of the new on-line PRO-Net procurement 
     system. Enactment of HUBZones will not affect these 
     strategies.
       The bill allows federal contractors to utilize a sole 
     source contracting vehicle to access HUBZones companies. 
     However, we do not believe that this provision will 
     necessarily affect 8(a) firms. In fact, federal contracting 
     officers may be more likely to shift competitive contracting 
     dollars to HUBZones because of the relative ease in a sole 
     source vehicle rather than to shift these contracts from 
     8(a), where the ease of procurement is already in place. In 
     fact, 8(a) firms are exactly the kinds of firms that would 
     most likely take advantage of the new HUBZones sole source 
     authority--especially after they have left the 8(a) program. 
     However, I can assure the Members of the Small Business 
     Committee that we will take whatever steps are necessary in 
     the rulemaking process to ensure that the new sole source 
     provisions for HUBZones do not negatively affect 8(a). And, I 
     will closely monitor the sole source authority when used for 
     HUBZones. Should it be determined that there is a negative 
     effect on 8(a), I will use my authority to appeal contracts 
     to protect 8(a) firms.
       I share your concern that SBA may not have sufficient 
     resources to implement the HUBZones over the next several 
     years. While the final appropriations bill has not yet been 
     enacted, we anticipate that the appropriations bill will 
     include enough resources to write the regulations and 
     implement the program in the first year. As presently 
     proposed, the SBA does not have adequate resources for full 
     implementation of the HUBZones program. I will not increase 
     our risks nor sacrifice the effectiveness of SBA's other 
     programs by shifting resources from these programs to 
     HUBZones. We will evaluate future resource needs after we 
     have analyzed the full on-going costs of the program and 
     provide the Congress with an estimate of these needs in our 
     budget submission.
       I will keep the Small Business Committees informed of any 
     issues that may arise during the rulemaking process and 
     provide the Committees with quarterly reports until the 
     program is fully implemented. We will also continue to 
     consult closely with the 8(a) business community during this 
     period. After implementation, I will monitor federal 
     procurement contracting patterns and the use of the sole 
     source provisions for HUBZones. I will report to the Small 
     Business Committees on a semi-annual basis about trends in 
     federal procurement activity for small businesses and on the 
     use of sole source contracts. As we monitor HUBZones 
     implementation, SBA will also pursue regulatory changes 
     within the Administration to further protect 8(a) if 
     necessary. You also have my firm commitment that I will seek 
     legislative changes if we identify any adverse impact on the 
     8(a) program as a result of this monitoring.
       Finally, because the bill retains my appeal authority on 
     behalf of 8(a), I will continue to intervene in the future, 
     if there are any specific instances of a federal agency 
     trying to move a contract from the 8(a) program to HUBZones.
       Thank you for your consideration.
           Sincerely,
                                                     Aida Alvarez,
                                                    Administrator.

  Mr. Speaker, I reserve the balance of my time.
  Mr. TALENT. Mr. Speaker, I yield 2 minutes to the distinguished 
gentlewoman from New York [Mrs. Kelly].
  Mrs. KELLY. Mr. Speaker, I thank the gentleman from Missouri [Mr. 
Talent] for yielding me time.
  I rise today in strong support of S. 1139, the Small Business 
Programs Reauthorization and Amendments Act of 1997. This important 
legislation will reauthorize the lending programs of the SBA, allowing 
our Nation's small businesses to continue access to capital.
  We are all aware of the important role that small businesses play in 
maintaining the economic strength of the United States. They create the 
vast majority of new jobs, provide countless new technological 
innovations, and drive economic growth in our country, and 
unfortunately there is often insufficient capital available for 
entrepreneurs to use to start up new businesses or for current small 
business owners to expand existing ones. This is the void that the 
Small Business Administration's loan guarantee programs often fill. 
Without passage of this important legislation, this valuable service 
would be threatened. Our Nation's small businesses, and indeed our 
economy, would suffer as a result.
  The gentleman from Missouri [Mr. Talent] and the gentleman from New 
York [Mr. LaFalce] have worked very closely to put together a 
bipartisan bill that deserves the backing of every Member of this 
House. I urge my colleagues to support the small business community and 
support S. 1139.
  Mr. LaFALCE. Mr. Speaker, I yield 3\1/4\ minutes to the gentlewoman 
from New York [Ms. Velazquez].
  Ms. VELAZQUEZ. Mr. Speaker, today we will pass this Small Business 
Administration reauthorization bill which provides valuable resources 
to a number of vital programs. While I have worked hard in support of 
those programs, I rise today to address some elements of the bill that 
I believe require further discussion.
  The House Committee on Small Business, under the effective leadership 
of the gentleman from Missouri [Mr. Talent] and the ranking Democrat, 
the gentleman from New York [Mr. LaFalce], worked very hard to report 
out a bill that would have helped small business. Unfortunately we are 
not considering the product of our committee's work today. Instead we 
are considering a bill from the other body that creates a multibillion-
dollar, I repeat multibillion-dollar, contracting program.
  This proposal called HUBZones was never introduced in the House. This 
unstudied and untested program has not even had one hearing, not in the 
Committee on Small Business, the Committee on Banking and Financial 
Services, the Committee on Education and the Workforce, or the 
Committee on National Security, all of which would have jurisdiction 
over the HUB's provisions. Because of this failure to properly examine 
this program, I have my concerns about this proposal.
  This program raises many serious questions. How will HUBZones work? 
What kind of jobs will it create? What kind of small businesses will it 
benefit? How will we measure its effectiveness? How will it work with 
already established programs such as empowerment zones and enterprise 
community? The effect of this legislation will be felt by the entire 
small business community.
  As the ranking member of the Subcommittee on Empowerment of the 
Committee on Small Business, I have a responsibility to bring community 
and economic development to our disadvantaged areas. I represent one of 
the first districts in this country. I know the barriers that 
entrepreneurs from my district and others like it must overcome. SBA 
already addresses these needs through a variety of programs, which 
raises the question of why we need another program when funding is

[[Page H10500]]

so scare. If the SBA is forced to spread out its resources to implement 
HUBZones, it will jeopardize the operations of many successful small 
business assistance programs.
  Mr. Speaker, at this point I yield to the gentleman from New York 
[Mr. LaFalce], the ranking member, and the chairman of the committee, 
the gentleman from Missouri [Mr. Talent], to provide assurances that 
the 8(a) program will not be harmed by these new HUBZone proposals.
  Mr. LaFALCE. First of all, I want to praise the gentlewoman for the 
outstanding work she has done on the Committee on Small Business, 
particularly as the ranking Democrat on the Subcommittee on 
Empowerment, and for the work she has done in refining the perspective 
of the Small Business Administration on this.
  As the gentlewoman knows, the bill as originally passed by the Senate 
would have adversely impacted the 8(a) program as it would have changed 
existing law to reduce the authority of the SBA over placement of 
contracts within the program. That was stricken at our absolute 
insistence.
  I have also received a very strong letter in support of the bill from 
Administrator Alvarez. Her letter, which I have inserted in the Record, 
provides assurance that SBA will not permit the implementation of the 
HUBZones Program to negatively affect the 8(a) program based upon the 
continuation of current 8(a) authority unchanged and the 
administrator's assurances. I believe the HUBZone Program can and will 
be implemented in a manner that will not harm 8(a) and actually might 
help those firms and other minority firms.
  The SPEAKER pro tempore. The time of the gentlewoman from New York 
[Ms. Velazquez] has expired.
  Mr. TALENT. Mr. Speaker, I yield myself 30 seconds in which just to 
say that that is also my understanding, and I have said from the 
beginning, that I did not want this bill to effect the 8(a) program, 
and as far as I am concerned, it is out of this bill, it is not 
mentioned in this bill; and that the HUBZone bill is designed to 
provide a little bit of an additional boost to procurement to 
businesses that locate in these disadvantaged areas and hire these 
individuals.
  Mr. TALENT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania [Mr. English], a member of the committee.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, this legislation before the 
House today provides valuable support for a growing American economy. 
The programs that are reauthorized under Senate bill 1139 play a 
limited, but beneficial, role in promoting the most dynamic sector of 
the American economy, and that is small business.
  Mr. Speaker, recent experience with domestic job creation is 
consistent. Two-thirds of the new jobs created in America are created 
by small employers. Small business is a critical source of economic 
expansion across the country whether in inner cities, developing 
suburbs, or rural areas. The entrepreneurship of small employers is a 
critical source of economic opportunity and growth in communities 
throughout America. Today millions of small firms and risk-taking 
individuals are building the economy of the next century, the economy 
that our children will inherit and will provide their link to the 
American dream.
  The programs under the Small Business Administration that we are 
reauthorizing today will not by themselves create the American economy 
of the future; however by linking small businesses to sources of credit 
and technical assistance, the SBA has the potential to nurture 
entrepreneurship and promote more successful business starts and 
expansions.
  Mr. Speaker, I strongly support the enactment of this legislation. 
While this Congress continues to have an aggressive agenda of 
encouraging small business growth through regulatory reform and tax 
relief, this legislation guarantees the continuation of limited, 
targeted, programmatic support for small businesses by the Federal 
Government.
  As a member of the Committee on Small Business, I am acutely aware 
that the SBA still has a long way to go to realize its potential as a 
strong advocate and clearinghouse for the small business community. 
Nevertheless, it is important that we continue the agency's successful 
programs, such as the Small Business Development Centers in order to 
encourage job creation and job retention in the most dynamic and 
competitive sector of America's economy.
  Mr. LaFALCE. Mr. Speaker, I yield such time as he may consume to the 
distinguished gentleman from Virginia [Mr. Sisisky], the next most 
senior member on the Democratic side of the aisle of the Committee on 
Small Business.
  [Mr. SISISKY asked and was given permission to revise and extend his 
remarks.)
  Mr. SISISKY. Mr. Speaker, I rise in support of S. 1139.
  Mr. Speaker, I am pleased to be able to support this reauthorization 
bill.
  Along with other Members, I did have serious concerns about some of 
its provisions. But those concerns have now been addressed, at least to 
my satisfaction.
  The legislation we have before us may have some flaws, but overall it 
is a very good bill and I believe it must be passed.
  Many Members had legitimate concerns and strong feelings about the 
HUB Zones Program, in particular.
  The bill passed by the House a little over month ago contained 
absolutely no reference to HUB Zones. The Small Business Committee held 
no hearings on HUB Zones. We had no chance to examine this concept 
closely, let alone make improvements.
  The House had no role at all in the design of this program. This 
troubles me, and I don't think it's a very good way to legislate.
  But on the whole, this is a very good bill. It reauthorizes the SBA 
loan programs that are the life blood of many small businesses in this 
country.
  We know there is tremendous demand from small business for these 
programs.
  We know that this financing meets a need that would otherwise go 
unmet. And we know how important financing is to small businesses, who 
make such an enormous contribution to economic growth and to job 
creation in this country.
  For this reason alone, I think we have little choice but to pass this 
authorization bill.
  S. 1139 also reauthorizes other successful programs and makes a 
number of program improvements that cannot be put off any longer.
  I won't go into all the details, but there are several I'd like to 
single out. This bill makes permanent the Microloan Program, which 
assists the smallest of small businesses. It recognizes the importance 
of disabled veteran entrepreneurs.
  The provisions on contract bundling should help small businesses 
better compete for Federal procurement opportunities. And one of SBA's 
most successful programs--the Women's Business Centers--is expanded.
  I strongly urge my colleagues to vote for this bill. We need to work 
on both sides of the aisle--and with the administration--to see that it 
is implemented in a way that meets the needs of America's small 
business.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Maryland [Mr. Wynn].
  (Mr. WYNN asked and was given permission to revise and extend his 
remarks.)
  Mr. WYNN. Mr. Speaker, let me begin by thanking the chairman and the 
ranking member of the committee for their hard work on this bill and 
also for addressing the potential conflict with respect to the 8(a) 
program and the HUBZone program. I am assured based on their comments 
that the 8(a) program remains intact and is not threatened by this new 
program.
  I am very pleased to support S. 1139 because I think it is critical 
to the advancement of small business. Small business, as is often 
stated, is the engine for growth in this country. It generates over 50 
percent of the gross national product. It generates more than half of 
all new jobs. Small businesses also account for the employment of 
minorities and women and our young people. We need to promote the 
advancement of small business.
  I am particularly impressed with this bill because it contains 
language that restricts the practice of bundling. I had legislation on 
this issue because it arose out of the White House Conference on Small 
Business in which small businessmen said bundling, that is, the 
consolidation of Federal contracts, represents a threat to our 
survival. Right now eight major companies get more Federal Government 
business than all small businesses combined. The Federal Government 
does about $200 billion in contracting, so my colleagues can see this 
is a very important matter. This bill has language

[[Page H10501]]

which would restrict the practice of bundling, require Government 
agencies to justify the use of this type of consolidation.
  The bill has also other attractive features. I think it is very 
important that this bill continues the microlending program. Now, 
$50,000 or $100,000 or $25,000 might not seem like a lot, but to a 
small businessman just starting out, to an entrepreneur, that is very 
important. We need to continue this program. The bill does that.
  It also increases the goal for small business contracting from 20 
percent to 23 percent. That is not a tremendous amount, but it is a 
significant amount. That could result in additional $4 billion in 
Government contracts available to the small business community. This, 
too, is an important improvement in the bill.
  I believe the bill addresses our concerns about HUBZones, creates new 
programs and maintains important programs for our small business 
community. I urge its adoption.
  Mr. TALENT. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Maryland [Mrs. Morella].
  Mrs. MORELLA. Mr. Speaker, I thank the gentleman, the chairman of the 
Committee on Small Business, for yielding the time to me, and, Mr. 
Speaker, I rise in support of S. 1139, the Small Business 
Administration reauthorization.

                              {time}  1645

  Included in this bill is the majority of H.R. 2429, the Small 
Business Technology Transfer Program Reauthorization Act, which was 
reported out of the Committee on Science's Subcommittee on Technology 
as well as the full Committee on Science. My comments will focus on 
that aspect of the bill, although the bill in its totality is very 
meritorious.
  STTR is an important tech transfer program that has made over 800 
awards totaling over $115 million since its inception in 1994. Nearly 
$5 million of those have gone to Maryland small businesses, just as an 
example. The STTR program expired on September 30 of this year, and 
this bill will reauthorize STTR at its current set-aside level to 
fiscal year 2001.
  In addition, S. 1139 makes the following changes to the STTR program. 
First, the bill requires agencies participating in STTR to include STTR 
in their annual performance plans, as required by the Results Act. This 
provision will ensure that each agency defines its goals along with 
providing metrics to assist in evaluating those goals.
  In concert with the performance plan, the bill requires each agency 
participating in the STTR and SBIR programs to include those programs 
in their strategic plan updates also required under the Results Act.
  Second, S. 1139 contains an outreach program for States which receive 
less than $5 million in awards in fiscal year 1995. This outreach 
program is designed to increase participation among small businesses in 
States that have traditionally received few STTR and SBIR awards. It is 
not meant to mandate that States previously underrepresented by the 
programs receive an increase in the number of dollar value awards, but, 
instead, the provision should simply increase the number and quality of 
applications for STTR and SBIR.
  Third, S. 1139 requires agencies to collect data that will provide 
Congress with information on the STTR program to assist in the 
measurement of the program outputs and outcomes. Like the Results Act 
language, this provision should help ensure the program is performing 
in the most effective manner possible.
  I want to thank the gentleman from Wisconsin [Mr. Sensenbrenner]; the 
ranking member, the gentleman from California [Mr. Brown]; and the 
ranking member of my subcommittee, the Subcommittee on Technology, the 
gentleman from Tennessee [Mr. Gordon], for their support; and, indeed, 
my hearty commendation and thanks to the Committee on Small Business 
chairman, the gentleman from Missouri [Mr. Talent], and the ranking 
member, the gentleman from New York [Mr. LaFalce]; and the gentleman 
from Maryland [Mr. Bartlett], who serves on both committees.

                           U.S. Small Business Administration,

                                 Washington, DC, November 6, 1997.
     Hon. F. James Sensenbrenner,
     Chairman, Committee on Science, U.S. House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: Section 9(b)(7) of the Small Business 
     Act requires that the Administrator of the Small Business 
     Administration report to the House and Senate Small Business 
     Committees at least annually on the Small Business Innovation 
     Research (SBIR) and Small Business Technology Transfer (STTR) 
     programs of the Federal agencies. Because of your interest in 
     small business participation in the Nation's research and 
     development efforts, I am happy to send this report to the 
     House Committee on Science when I furnish it to the Committee 
     on Small Business.
       I appreciate your interest in small business research and 
     development and look forward to any comments you may have on 
     our report.
           Sincerely,
                                                     Aida Alvarez,
                                                    Administrator.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Illinois [Mr. Poshard].
  Mr. POSHARD. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise today to support this legislation to reauthorize 
programs of the Small Business Administration, but with some 
reluctance. While I firmly believe in the mission of the SBA, certain 
provisions in this bill are somewhat contentious.
  Funding for HUBZones is one such issue. While I certainly support the 
concept of spurring economic development in depressed urban and rural 
areas, I agree with the gentleman from New York [Mr. LaFalce] that it 
would be better to have a clearer idea about the ramifications of this 
multibillion-dollar contracting program before it is approved.
  However, I will support this package, because we should not hold up 
funding for other important activities of the SBA, and the gradual 
phase-in approach which was planned for HUBZone implementation should 
allow for sufficient monitoring of its effectiveness and impact on 
other SBA initiatives.
  The goal of the SBA is to help small business owners reach their 
potential by providing various resources, such as loans and training. 
This assistance is especially important to rural communities, such as 
those in my congressional district, that have seen severe economic 
downturns over the last decade. A failure to fund these activities 
could reverse many positive trends.
  Recent years have seen a dramatic increase in the success of women 
and minority-owned small businesses, and the SBA has had a significant 
role in this development. Failure to pass this bill would adversely 
affect the National Women's Business Council and would eliminate 
funding for 18 women's business centers, preventing thousands of women 
from getting necessary business training.
  The Small Business Technology Transfer Program, which directs Federal 
R&D money to researchers, inventors, and small business people to 
develop the best ideas at our universities and research centers, this 
successful program not only gives necessary help to small businesses 
but helps university personnel have a hand in further developing their 
ideas while remaining on campus. It also would not be reauthorized.
  The Preferred Surety Bond Program, which provides hundreds of 
millions of dollars in surety bonds to small construction companies, 
would also cease to operate.
  For these reasons and others, we must act now to ensure that the good 
work of the SBA is not impeded. I urge my colleagues to vote for this 
legislation.
  Mr. TALENT. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York [Mr. Forbes].
  (Mr. FORBES asked and was given permission to revise and extend his 
remarks.)
  Mr. FORBES. Mr. Speaker, I rise today in support of the Small 
Business Reauthorization Act of 1997 and to commend the gentleman from 
Missouri [Mr. Talent] and former chairman and now ranking member, the 
gentleman from New York [Mr. LaFalce], for their devotion to the small 
business community and this bill.
  This bill, obviously, is the underpinning on which many of the Small 
Business Administration programs are reauthorized. I would like the 
opportunity to talk at great length about many of the wonderful 
programs at SBA, but I will limit my remarks to

[[Page H10502]]

the extension of the Defense Loan and Technical Assistance Program, 
which is commonly referred to as DELTA.
  An important program that dealt with the unfortunate loss of business 
for many defense-dependent businesses over the last decade, the DELTA 
program is an important undertaking. I appreciate that the committee 
has sought to reauthorize not only the DELTA program, but to expand it, 
so that the many small businesses that could benefit, because they have 
had at least 25 percent of their earnings in the last 5 years dependent 
on defense business, as they seek to make the transition from defense-
dependent businesses to other commercial applications, the DELTA 
program is instrumental in helping them make that kind of a transition.
  It is important to understand also that the Small Business 
Administration is one of the few agencies or departments in the 
Government that almost pays for itself, helping budding entrepreneurs 
and small businessmen and women, who are the underpinning of the 
American economy. This agency does a tremendous job, and I appreciate 
the committee's special attention to this DELTA program.
  As a former SBA regional administrator, I saw firsthand the important 
work that is undertaken by SBA. I appreciate the committee's work in 
making sure that this is a bipartisan bill, one that seeks to enhance 
the good work done by the Small Business Administration.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Illinois [Mr. Davis], an extremely valuable contributor 
to the Committee on Small Business and the formation of this bill.
  (Mr. DAVIS of Illinois asked and was given permission to revise and 
extend his remarks.)
  Mr. DAVIS of Illinois. Mr. Speaker, I rise in support of the 
reauthorization of the SBA bill, but I also want to commend and 
congratulate the gentleman from Missouri, Chairman Talent, and the 
gentleman from New York, Mr. LaFalce, the ranking member, for their 
exemplary leadership in bringing this legislation to the floor.
  I also want to acknowledge the strong presence of the gentlewoman 
from New York [Ms. Velazquez] in making sure that the 8(a) procurement 
program is protected at all costs.
  I also would extend my appreciation to Administrator Alvarez for her 
sensitivity and professionalism and hard work to make sure that areas 
of conflict were worked out.
  But I am most pleased because this legislation, in addition to all of 
those excellent programs that we have already heard about, the micro 
lending program, the 8(a) program, the 504 program, all of them are 
excellent. But in addition, we now have a new concept, something called 
HUBZones, which are designed to bring additional resources to hard-
pressed, severely depressed urban and rural communities throughout 
America, areas that, no matter what is said, none of the other programs 
has been able to do as much as there is that is needed to be done.
  So I am hoping that with this new addition, we will see additional 
improvements, additional resources. It is a great program, and I am 
very pleased to lend my support to it and ask that all Members vote in 
favor of it.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to one of the most 
distinguished freshmen members of the Committee on Small Business, the 
gentleman from Rhode Island [Mr. Weygand].
  (Mr. WEYGAND asked and was given permission to revise and extend his 
remarks.)
  Mr. WEYGAND. Mr. Speaker, I want to thank the gentleman from New 
York, our ranking member [Mr. LaFalce], for his generosity and our 
chairman for the great work the two of them have done. I think if 
anyone could look at our committee and what they do, they would see 
this great bipartisan effort that I think really does serve not only 
the Members very well, but also the people of the country.
  I am here to support Senate version 1139 because I think this is good 
for my State of Rhode Island, the small State of Rhode Island, but also 
good for other businesses throughout this country.
  This bill authorizes SBA and its programs which will provide access 
to capital and services that might not be available to many of the 
small businesses throughout this great country.
  I am a former small business owner, and I remember when I started my 
business in the basement of my house 15 years ago. I went down to the 
SBA because I knew I was a good landscape architect, I knew I could 
provide the services that were necessary, but I thought maybe I could 
extend my market area into maybe some Federal programs.
  So I went down there 15 years ago, and when I came back, they had 
piled me down with literature and propaganda that most small business 
owners cannot even take the time to read, and I immediately threw it in 
the basket. My first impression of the SBA was a very negative one.
  That is not so today. Today in Rhode Island, the SBA has done 
tremendous deeds to improve the small business climate of our State. 
Just over the last 3 years, they have more than doubled the number of 
loans in the 504 and the 7(a) program. Indeed, they have also done some 
things that we did not think were possible. Loans and assistance to 
minorities and to veterans and to women have more than doubled and 
tripled. Indeed, over one-third of all the loans given out in the State 
of Rhode Island are to these three groups.
  The impact of small business to Rhode Island's economy cannot be 
overstated. In our State, over 97 percent of all the businesses are 
small businesses. Along with the loan programs, though, SBA provides 
services to assist business owners in becoming or remaining successful.
  Once a loan has been given to a business, they make sure and follow 
through like caseworkers to be sure that businesses are fulfilling 
their obligation and doing well.
  I also want to raise some concern that my colleagues have raised 
already about the HUB program. The HUBZone program is very similar to 
what we in many States call enterprise zones.
  HUBZones and enterprise zones can have a very dark side. People can 
play shell games within enterprise zones, and in our State of Rhode 
Island they did just that. Businesses from outside of the enterprise 
zone moved in. They simply laid off other workers and hired them back 
and got the tax benefits and the contracts that were provided for 
people within the enterprise zone.
  My concern is that under this provision of HUBZone, that we may 
indeed have the same kind of problems that we in Rhode Island had. 
Continued oversight and vigilance about this HUBZone program is 
extremely necessary. I know all of my colleagues are looking to 
Administrator Alvarez to be sure that she does not diminish the 8(a) 
program and sacrifice moneys because of the HUB program. I support this 
legislation and ask my colleagues to do the same.
  Mr. Speaker, I rise in support of S. 1139, a bill to reauthorize 
small business programs. 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 to 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.
  In particular, there have been dramatic improvements in access to 
capital for women, minorities, and veterans in my district. 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. 
Nearly 35 percent of all approved SBA loans in Rhode Island, are going 
to these three groups.
  I must express some concern over one provision in this bill. The 
HUBZone provision included in this bill did not come before the House 
Small Business committee, and we did not have the opportunity to hold 
hearings or study the program and its potential impact on small 
businesses in our districts. I am concerned that there may be the 
unintended consequence of negatively impacting minority small 
businesses and 8(a) firms. It is my hope that we will be able to work 
with the SBA and small business groups to ensure that we continue to 
expand opportunities for minorities.

[[Page H10503]]

  I cannot overstate the importance 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.
  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, I am happy to yield 3 minutes to our last 
speaker on this side of the aisle, the gentleman from Montana [Mr. 
Hill], an outstanding member of the committee.
  Mr. HILL. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise today in strong support of Senate bill 1139, the 
Small Business Reauthorization Act of 1997, and I would like to first 
thank the gentleman from Missouri Chairman Talent and the gentleman 
from New York Ranking Member LaFalce, and especially the staff for 
their hard work in getting this important legislation to the floor and 
getting it passed. Without their tireless dedication and commitment to 
America's small businesses and the people who work in those small 
businesses, this vital authorization would not today be a reality.
  Mr. Speaker, small businesses fuel our Nation's economy, and the role 
of Congress is an appropriate role, should be to support and encourage 
entrepreneurship.

                              {time}  1700

  I believe that this bill achieves this objective. We must continue to 
promote our economic growth throughout States like mine, Montana, by 
helping make them more competitive within markets and outside the 
United States.
  I do want to point out two provisions in this bill that are extremely 
important to Montana. The first is the Small Business Technology 
Transfer program that earlier speakers talked about. I was especially 
pleased to see that my amendment was in the final bill. This provision 
will assist those 23 States that together receive fewer total SBA small 
business innovation research awards than the fifth-ranking State by 
itself. It will help our States receive more awards.
  States like Montana have large numbers of small research and 
development businesses, and many of these businesses lack the resources 
for competing for small business innovation research grants. With my 
amendment, the playing field will be leveled by giving assistance to 
these businesses in applying for these awards while establishing 
performance goals to them.
  Second is a provision in the Small Business Investment Company that 
addresses underserved areas like Montana. Montana is one of the few 
States that has never had a licensed Small Business Investment Company. 
With this provision, it will enable Montana to apply and hopefully 
qualify for this much-needed license. Approximately 98 percent of 
Montana's businesses are considered small businesses by definition. As 
a matter of fact, Mr. Speaker, 95 percent of the people in Montana work 
for a business that employs less than 50 employees. An SBAC license in 
the State of Montana will provide the necessary capital to fuel 
Montana's small business and small business growth.
  Mr. Speaker, I urge my colleagues to vote for this bill.
  Mr. Speaker, I rise today in strong support of S. 1139, the Small 
Business Reauthorization Act of 1997. I first would like to thank 
Chairman Talent, Ranking Member LaFalce and especially the staff, for 
their hard work in getting this very important legislation to the 
floor. Without their tireless dedication and commitment to America's 
small businesses, this vital authorization would not have become a 
reality.
  Mr. Speaker, small businesses fuel our Nation's economy. The role of 
Congress should be to support and encourage entrepreneurship. And I 
believe that this bill achieves this objective. We must continue to 
promote economic growth throughout States like Montana, making them 
competitive in markets within and outside the United States.
  I would like to point out two provisions in the bill that are 
extremely important to Montana. First is the Small Business Technology 
Transfer program. I was especially pleased to see that my amendment was 
in the final bill. This provision will assist those 23 States that 
together receive fewer total Small Business Innovation Research [SBIR] 
awards than the fifth ranking State by itself. States like Montana have 
large numbers of small Research and Development businesses, and many of 
these businesses lack the resources to compete for SBIR awards. With my 
amendment, the playing field will be leveled by giving assistance to 
these businesses in applying for the awards, while establishing 
performance goals.
  Second is a provision in the Small Business Investment Company [SBIC] 
that addresses underserved areas like Montana. Montana is one of the 
few States that have never had a licensed SBIC. With this provision, it 
will enable Montana to apply and hopefully qualify for this much needed 
license. Approximately 98 percent of Montana's businesses are 
considered small businesses by definition, and an SBIC in the State 
will provide the necessary capital to fuel Montana's small businesses.
  Mr. Speaker, I urge my colleagues to vote for the bill.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas [Mr. Bentsen], perhaps the House's most 
knowledgeable Member on questions of securitization.
  Mr. BENTSEN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, it is late in the session. We are talking about the SBA 
reauthorization. It is like the great American philosopher who said it 
is deja vu all over again, and now we are once again trying to get to 
the issue of what is going to happen with securitization.
  It was a year ago that the Committee on Small Business in both the 
House and the other body attempted to deal with this issue. We saw some 
language that was never passed, and now we have the Small Business 
Administration also trying to deal with this issue.
  This all began in part because of an attempt on the part of both 
committees to try and level the playing field between banks and 
nonbanks in the securitization of the unguaranteed portion of 7(a) 
loans, which I think all of us support and does create capital. But 
there have been attempts, I think, to rigidly try and define the 
structure of that securitization which could, in fact, reduce the 
amount of capital that is available. I would like to engage in a brief 
colloquy with the ranking member and the chairman, if I might.
  It is my understanding that the current bill we are considering today 
includes no language instructing SBA on how to define any credit test 
to securitization. My concern continues to be that the SBA may come up 
with a definition which is too rigid, on the one hand, which tries to 
have a one-size-fits-all for both banks and nonbanks, and confuses 
market concentration with creditworthiness, which is what I believe 
both the ranking member and the chairman's intent was when we looked at 
this issue in the last Congress.
  Mr. LaFALCE. Mr. Speaker, will the gentleman yield?
  Mr. BENTSEN. I yield to the gentleman from New York.
  Mr. LaFALCE. I concur with the remarks of the gentleman from Texas 
completely.
  Mr. TALENT. Mr. Speaker, will the gentleman yield?
  Mr. BENTSEN. I yield to the gentleman from Missouri.
  Mr. TALENT. Mr. Speaker, I do also, and certainly would hope that the 
agency will move toward as much securitization as financial soundness 
permits. That is what the committee has been working to accomplish.
  Mr. BENTSEN. Mr. Speaker, I thank the chairman and ranking member.
  I rise in support of the bill, and I appreciate the hard work that 
they have done.
  Mr. LaFALCE. Mr. Speaker, I yield 30 seconds to the gentlewoman from 
Texas [Ms. Jackson-Lee].

[[Page H10504]]

  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the ranking member and 
the chairman for the very strong support of small businesses.
  Let me say that I rise to support this authorization act because of 
the Microloan Program, the supporting of the National Women's Business 
Council Program, and as well the fact that we are not disturbing the 
8(a) programs that help create jobs in America. Let me compliment my 
own small business regional office and Mr. Wilson, and I hope that we 
will continue to stand on the side of small businesses.
  Mr. TALENT. Mr. Speaker, I would be happy to yield if the gentleman 
wants a little more time. I yield 1 minute to the gentleman from New 
York [Mr. LaFalce].
  Mr. LaFALCE. Mr. Speaker, I would like to take this time to thank the 
chairman of our committee, the gentleman from Missouri [Mr. Talent], 
for all of the kindnesses that he has shown me in his position. He has 
proven himself to be an excellent chairman, certainly one that has been 
a pleasure for me to work with. He has the ability to be both gentle, 
cooperative and firm all at the same time, and I am sure that he is 
going to go on to great things in life, not only in the House of 
Representatives, but perhaps even higher.
  I also want to extol our staff. My tremendous staff, both Tom Powers, 
Jeanne Roslanowick and others, but also the majority staff. They have 
tremendous expertise and dedication; they have worked together as one 
staff in order to produce the best possible bill, regardless of 
politics, regardless of partisanship. So it has been a pleasure for me 
to work with all of them on this reauthorization bill.
  Mr. TALENT. Mr. Speaker, in closing, I yield myself such time as I 
may consume.
  I want to echo the remarks of the gentleman from New York [Mr. 
LaFalce], except in reverse. It has been a great pleasure this year to 
work with him. We all know that the gentleman knows how to be firm; he 
also does know how to be, and has been consistently, cooperative, and I 
have been very grateful to him for that.
  Also, I want to recognize the great depth of his knowledge in this 
field. We are passing, I hope and believe today, yet another 
reauthorization bill, and it will reflect yet again his great influence 
and his great expertise in this area.
  I want to thank also the members on both sides of the committee. The 
House has heard many of them today, and I am proud to chair a committee 
with so many committed and dedicated individuals.
  Mr. Speaker, this legislation is the product of bipartisan and 
bicameral efforts to reauthorize the Small Business Administration 
through fiscal year 2000. It reflects the efforts of many individuals 
and committees and their staffs. I would like to thank the gentleman 
from Wisconsin [Mr. Sensenbrenner], the chairman of the Committee on 
Science; and the gentleman from California [Mr. Brown], his ranking 
member, for their work on H.R. 2429, which has in large part become 
section 501 of this legislation. I would also like to express my 
appreciation to their staff who worked on this.
  I would also like to thank the gentleman from Arizona [Mr. Stump], 
the chairman of the Committee on Veterans' Affairs, and the gentleman 
from New York [Mr. Solomon], the chairman of the Committee on Rules, 
along with their staffs, for their help in working on title VII of this 
legislation. As I have already said, I want to extend my thanks and 
appreciation to the gentleman from New York [Mr. LaFalce], the 
committee's ranking member, for his help in crafting this legislation.
  Finally, I would like to acknowledge the Committee on Small Business 
staff who worked on this bill: Emily Murphy, Mary McKenzie, Kiki Kless, 
Paul Denham, Charles ``Tee'' Rowe, and Harry Katrichis for the 
majority, and Jeanne Roslanowick, Steve McSpadden and Tom Powers for 
the minority.
  I urge my colleagues, in closing, to vote for this important piece of 
legislation.
  Mrs. MINK of Hawaii. Mr. Speaker, I rise today to express my concerns 
regarding S. 1139, the Small Business Authorization Act. I will vote 
for this bill because it is essential for the continuation of programs 
which assist small businesses in this country. However, I have serious 
concerns regarding a specific provision included by the Senate, which 
could impact the current 8(a) program for minority- and women-owned 
businesses.
  S. 1139 establishes a new program to increase access to Federal 
contracts for small businesses in economically distressed areas. While 
the goal of this new HUBZone program seems laudable enough, I have 
strong reservations regarding its potential impact on the existing and 
successful 8(a) program for minority- and women-owned businesses.
  It is no secret that many in the majority want to get rid of the 8(a) 
program and other forms of affirmative action. I fear that the 
establishment of these HUBZones is a backdoor attempt to weaken 8(a) 
and affirmative action.
  The 8(a) program is specifically targeted to assist businesses owned 
by minorities and women, which have historically had difficulty in 
obtaining contracts and subcontracts from the Federal Government. The 
new HUBZone program would be open to all small businesses within these 
zones, not just those which are disadvantaged in any way. And these 
businesses within the HUBZones will compete with the 8(a) businesses 
for the limited number of Federal contracts.
  Also of concern is that under this provision Federal agencies would 
be allowed to use sole-source contracts in HUBZones which cuts out the 
competitive nature of Federal contracting altogether, and further 
erodes opportunities for 8(a) businesses.
  The Senate has failed to provide enough funding for the 
administration of this new program. The Congressional Budget Office 
estimates that $12 million is needed annually to implement the HUBZone 
program. The bill provides only $1.2 million. This raises concerns 
regarding adequate oversight and evaluation of this new program. If we 
are to accurately assess whether this new program is affecting the 8(a) 
program we need to have the appropriate monitoring systems in place. 
The lack of funding causes concerns in this regard.
  Mr. Speaker, I have discussed these concerns with the Administrator 
of the Small Business Administration, who assured me that the 
Administration will closely monitor this new program and its impact on 
the 8(a) program. She also indicated that in administering the HUBZone 
program, they would take steps necessary to assure that 8(a) was not 
adversely impacted.
  Mr. Speaker, had this bill come up under regular order, and not under 
the expedited suspension procedures we would have had the opportunity 
to address many of our concerns through the amendment process. As we 
are in the last 2 days of the congressional session this year, I 
understand the need to utilize expedited procedures to assure that 
critical small business programs are funded.
  Therefore, I will support this bill. I note for the Record that I 
will watch closely the development of this program and monitor its 
impact on the 8(a) minority- and women-owned business program.
  Mr. TALENT. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time has expired.
  The question is on the motion offered by the gentleman from Missouri 
[Mr. Talent] that the House suspend the rules and concur in the Senate 
amendment to the House amendment to S. 1139.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate amendment to the House 
amendment was concurred in.
  A motion to reconsider was laid on the table.

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