[Congressional Record Volume 149, Number 134 (Friday, September 26, 2003)]
[Senate]
[Pages S12060-S12095]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SMALL BUSINESS ADMINISTRATION 50TH ANNIVERSARY REAUTHORIZATION ACT OF 
                                  2003

  Mr. FRIST. I ask unanimous consent that the Senate proceed to the 
immediate consideration of Calendar 248, S. 1375.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 1375) to provide for the reauthorization of 
     programs administered by the Small Business Administration, 
     and for other purposes.

  There being no objection, the Senate proceeded to consider the 
bill which had been reported from the Committee on Small Business and 
Entrepreneurship, with amendments, as follows:

       [Strike the parts shown in black brackets and insert the 
     part shown in italic.]

                                S. 1375

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Administration 50th Anniversary Reauthorization Act 
     of 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

                      TITLE I--GENERAL PROVISIONS

               Subtitle A--Administration Accountability

Sec. 101. Document retention and investigations.
Sec. 102. Management of the Small Business Administration.

                       Subtitle B--Authorizations

Sec. 111. Program authorization levels.
Sec. 112. Additional reauthorizations.

                     TITLE II--FINANCIAL ASSISTANCE

                Subtitle A--7(a) Loan Guarantee Program

Sec. 201. National Preferred Lenders Pilot Program.
Sec. 202. Extension of program participation fees.
Sec. 203. Loans sold in secondary market.
Sec. 204. Clarification of eligibility for veterans.
Sec. 205. Enhancement of low documentation loan program.
Sec. 206. Increased loan amounts for exporters.

                     Subtitle B--Microloan Program

Sec. 211. Microloan program improvements.

                      Subtitle C--Lender Oversight

Sec. 221. Examination and review fees.
Sec. 222. Enforcement authority for Small Business Lending Companies 
              and non-federally regulated SBA lenders.
Sec. 223. Definitions for Small Business Lending Companies and non-
              federally regulated SBA lenders.

              Subtitle D--Disaster Assistance Loan Program

Sec. 231. Conforming amendment for disaster assistance loan program.
Sec. 232. Disaster relief for small business concerns damaged by 
              drought.
Sec. 233. Disaster mitigation pilot program.

                      Subtitle E--504 Loan Program

Sec. 241. Extension of user fees.
Sec. 242. Amortized loan loss reserve fund.
Sec. 243. Alternative loss reserve for certain premier certified 
              lenders.
Sec. 244. Debenture size.
Sec. 245. Job creation or retention standards.
Sec. 246. Simplified applications.
Sec. 247. Child care lending pilot program.
Sec. 248. Definition of rural area.

                    Subtitle F--Surety Bond Program

Sec. 251. Clarification of maximum surety bond guarantee.
Sec. 252. Authorization of Preferred Surety Bond Guarantee Program.

                       Subtitle G--Miscellaneous

Sec. 261. Coordination of SBA loans.
Sec. 262. Leasing options for 7(a) and 504 borrowers.
Sec. 263. Calculation of financing limitation for small business 
              investment companies.
Sec. 264. Establishing alternative size standard.
Sec. 265. Pilot program for guarantees on pools of non-SBA loans.

                Subtitle H--New Markets Venture Capital

Sec. 271. Time frame for raising private capital.
Sec. 272. Definition of low-income geographic area.

         Subtitle I--Small Business Investment Company Program

Sec. 281. Investment of excess funds.
Sec. 282. Maximum prioritized payment rate.
Sec. 283. Improved distribution requirements.

     Subtitle J--Small Business Intermediary Lending Pilot Program

Sec. 291. Short title.
Sec. 292. Findings.
Sec. 293. Small Business Intermediary Lending Pilot Program.

            TITLE III--ENTREPRENEURIAL DEVELOPMENT PROGRAMS

           Subtitle A--Office of Entrepreneurial Development

Sec. 301. Service Corps of Retired Executives.
Sec. 302. Small Business Development Center Program.
Sec. 303. PRIME reauthorization and transfer to the Small Business Act.

         Subtitle B--Women's Small Business Ownership Programs

Sec. 311. Office of Women's Business Ownership.
Sec. 312. Women's Business Center Program.
Sec. 313. National Women's Business Council.
Sec. 314. Interagency Committee on Women's Business Enterprise.
Sec. 315. Preserving the independence of the National Women's Business 
              Council.

             Subtitle C--Office of Native American Affairs

Sec. 321. Short title.
Sec. 322. Native American Small Business Development Program.
Sec. 323. Pilot programs.

          Subtitle D--Office of Veterans Business Development

Sec. 331. Advisory Committee on Veterans Business Affairs.
Sec. 332. Outreach grants for veterans.
Sec. 333. Authorization of appropriations.

           TITLE IV--SMALL BUSINESS PROCUREMENT OPPORTUNITIES

Sec. 401. Contract consolidation.

[[Page S12061]]

Sec. 402. Agency accountability.
Sec. 403. Small business participation in prime contracting.
Sec. 404. Small business participation in subcontracting.
Sec. 405. Evaluating subcontract participation in awarding contracts.
Sec. 406. Direct payments to subcontractors.
Sec. 407. Women-owned small business industry study.
Sec. 408. [A]HUBZone authorizations.
Sec. 409. Definition of [HUBzone] HUBZone; treatment of certain former 
              military installation lands as [HUBzones] HUBZones.
Sec. 410. Definition of [HUBzone] HUBZone small business concern.
Sec. 411. Acquisition regulations.

                         TITLE V--MISCELLANEOUS

Sec. 501. Minority Small Business and Capital Ownership Development 
              Program.
Sec. 502. Extension of [program] authority for technology assistance 
              programs.
Sec. 503. [R]BusinessLINC report to Congress.

     SEC. 2. EFFECTIVE DATE.

       (a) In General.--This Act and the amendments made by this 
     Act shall take effect on October 1, 2003.
       (b) Rulemaking Authority.--
       (1) Proposed regulations.--Except as otherwise specifically 
     provided in this Act, not later than 180 days after the date 
     of enactment of this Act, the Administrator of the Small 
     Business Administration (referred to in this Act as the 
     ``Administrator'' and the ``Administration'', respectively) 
     shall publish proposed regulations to carry out the 
     provisions of this Act and the amendments made by this Act.
       (2) Final regulations.--Except as otherwise specifically 
     provided in this Act, not later than 300 days after the date 
     of enactment of this Act, the Administrator shall issue final 
     regulations to carry out the provisions of this Act and the 
     amendments made by this Act.

                      TITLE I--GENERAL PROVISIONS

               Subtitle A--Administration Accountability

     SEC. 101. DOCUMENT RETENTION AND INVESTIGATIONS.

       Section 10(e) of the Small Business Act (15 U.S.C. 639(e)) 
     is amended by striking the matter preceding paragraph (2) and 
     inserting the following:
       ``(e) Document Retention; Investigations.--
       ``(1) Document retention.--The [Administration] 
     Administrator and the Inspector General of the Administration 
     shall--
       ``(A) retain all documents and records, including 
     correspondence, records of inquiry, memoranda (including 
     those relating to all investigations conducted by or for the 
     Administration), reports, studies, analyses, contracts, 
     agreements, opinions, computer entries, e-mail messages, 
     forms, manuals, briefing materials, press releases, and 
     books for a period of not less than 2 years from the date 
     such documents are created;
       ``(B) keep the items described in subparagraph (A) 
     available at all times for inspection and examination by the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives, or their duly authorized representatives; 
     and
       ``(C) upon the written request of the Committee on Small 
     Business and Entrepreneurship of the Senate or the Committee 
     on Small Business of the House of Representatives pursuant to 
     subparagraph (B), the Administrator or the Inspector General, 
     as applicable, shall make such documents or records available 
     to the requesting committee or its duly authorized 
     representative within 5 business days of the request, and if 
     a document or record cannot be made available within such 
     timeframe, the Administrator or the Inspector General, as 
     applicable, shall provide the requesting committee with a 
     written explanation stating the reason that each document or 
     record requested has not been provided and a date certain for 
     its production.''.

     SEC. 102. MANAGEMENT OF THE SMALL BUSINESS ADMINISTRATION.

       Section 4 of the Small Business Act (15 U.S.C. 633) is 
     amended--
       (1) by striking ``Sec. 4.'' and inserting the following:

     ``SEC. 4. MANAGEMENT OF THE SMALL BUSINESS ADMINISTRATION.'';

       (2) in subsection (a), by striking ``(a)'' and inserting 
     the following:
       ``(a) Establishment.--'';
       (3) in subsection (b)--
       (A) by striking ``(b)(1)'' and inserting the following:
       ``(b) Authority of Administrator.--
       ``(1) In general.--
       ``(A) Appointment.--'';
       (B) in paragraph (1)--
       (i) by striking ``The Administrator shall not engage'' and 
     inserting the following:
       ``(B) Sole employment.--The Administrator shall not 
     engage'';
       (ii) by striking ``In carrying out'' and inserting the 
     following:
       ``(C) Nondiscrimination; special consideration for 
     veterans.--In carrying out''; and
       (iii) by striking ``The President'' and inserting the 
     following:
       ``(D) Appointment of deputy administrator; associate 
     administrators.--The President''; and
       (C) in paragraph (2), by striking ``the Administrator 
     also'' and inserting ``Responsibilities of Administrator.--
     The Administrator''; and
       (4) by adding at the end the following:
       ``(g) Office of Lender Oversight.--The Director of the 
     Office of Lender Oversight shall--
       ``(1) formulate, execute, and promote policies and 
     procedures of the Administration that provide adequate and 
     effective oversight and review of lenders participating in, 
     or applying to participate in, the loan and loan guaranty 
     programs for small business concerns under this Act and the 
     Small Business Investment Act of 1958 (15 U.S.C. 661 et 
     seq.); and
       ``(2) report directly to the Chief Operating Officer of the 
     Administration.''.

                       Subtitle B--Authorizations

     SEC. 111. PROGRAM AUTHORIZATION LEVELS.

       Section 20 of the Small Business Act (15 U.S.C. 631 note) 
     is amended--
       (1) in subsection (a)(1), by striking ``certification'' 
     each place that term appears and inserting ``accreditation'';
       (2) by striking subsections (c) through (h) and inserting 
     the following:
       ``(c) Disaster Mitigation Pilot Program.--The following 
     program levels are authorized for loans under section 
     7(b)(1)(C):
       ``(1) $15,000,000 for fiscal year 2003.
       ``(2) $15,000,000 for fiscal year 2004.
       ``(3) $15,000,000 for fiscal year 2005.
       ``(4) $15,000,000 for fiscal year 2006.'';
       (3) by redesignating subsection (i) as subsection (d); and
       (4) by adding at the end the following:
       ``(e) Fiscal Year 2004.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 2004:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $70,000,000 in technical assistance grants, as 
     provided in section 7(m); and
       ``(ii) $100,000,000 in direct loans, as provided in section 
     7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $21,550,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(i) $16,000,000,000 in general business loans, as 
     provided in section 7(a);
       ``(ii) $5,000,000,000 in certified development company 
     financings, as provided in section 7(a)(13) of this Act and 
     section 504 of the Small Business Investment Act of 1958;
       ``(iii) $500,000,000 in loans, as provided in section 
     7(a)(21); and
       ``(iv) $50,000,000 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) $4,000,000,000 in purchases of participating 
     securities; and
       ``(ii) $3,000,000,000 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 
     $6,000,000,000, of which not more than 50 percent 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 for a total amount of 
     $7,000,000 for the Service Corps of Retired Executives 
     program authorized by section 8(b)(1).
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 2004 such sums as may be 
     necessary to carry out the provisions of this Act not 
     elsewhere provided for, including administrative expenses and 
     necessary loan capital for disaster loans pursuant to section 
     7(b), and to carry out title IV of the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding any other provision of this 
     paragraph, for fiscal year 2004--
       ``(i) no funds are authorized to be used as loan capital 
     for 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 its own 
     behalf or on behalf of any other Federal 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 $2,000,000.
       ``(f) Fiscal Year 2005.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 2005:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $75,000,000 in technical assistance grants, as 
     provided in section 7(m); and
       ``(ii) $105,000,000 in direct loans, as provided in 7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $22,300,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(i) $16,500,000,000 in general business loans, as 
     provided in section 7(a);
       ``(ii) $5,250,000,000 in certified development company 
     financings, as provided in section

[[Page S12062]]

     7(a)(13) of this Act and section 504 of the Small Business 
     Investment Act of 1958;
       ``(iii) $500,000,000 in loans, as provided in section 
     7(a)(21); and
       ``(iv) $50,000,000 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) $4,250,000,000 in purchases of participating 
     securities; and
       ``(ii) $3,250,000,000 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 
     $6,000,000,000, of which not more than 50 percent 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 for a total amount of 
     $7,000,000 for the Service Corps of Retired Executives 
     program authorized by section 8(b)(1).
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 2005 such sums as may be 
     necessary to carry out the provisions of this Act not 
     elsewhere provided for, including administrative expenses and 
     necessary loan capital for disaster loans pursuant to section 
     7(b), and to carry out title IV of the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding any other provision of this 
     paragraph, for fiscal year 2005--
       ``(i) no funds are authorized to be used as loan capital 
     for 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 its own 
     behalf or on behalf of any other Federal 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 $2,000,000.
       ``(g) Fiscal Year 2006.--
       ``(1) Program levels.--The following program levels are 
     authorized for fiscal year 2006:
       ``(A) For the programs authorized by this Act, the 
     Administration is authorized to make--
       ``(i) $80,000,000 in technical assistance grants, as 
     provided in section 7(m); and
       ``(ii) $110,000,000 in direct loans, as provided in 7(m).
       ``(B) For the programs authorized by this Act, the 
     Administration is authorized to make $23,050,000,000 in 
     deferred participation loans and other financings. Of such 
     sum, the Administration is authorized to make--
       ``(i) $17,000,000,000 in general business loans, as 
     provided in section 7(a);
       ``(ii) $5,500,000,000 in certified development company 
     financings, as provided in section 7(a)(13) of this Act and 
     section 504 of the Small Business Investment Act of 1958;
       ``(iii) $500,000,000 in loans, as provided in section 
     7(a)(21); and
       ``(iv) $50,000,000 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) $4,500,000,000 in purchases of participating 
     securities; and
       ``(ii) $3,500,000,000 in guarantees of debentures.
       ``(D) For the programs authorized by part B of title IV of 
     the Small Business Investment Act of 1958, the Administration 
     is authorized to enter into guarantees not to exceed 
     $6,000,000,000, of which not more than 50 percent 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 for a total amount of 
     $7,000,000 for the Service Corps of Retired Executives 
     program authorized by section 8(b)(1).
       ``(2) Additional authorizations.--
       ``(A) There are authorized to be appropriated to the 
     Administration for fiscal year 2006 such sums as may be 
     necessary to carry out the provisions of this Act not 
     elsewhere provided for, including administrative expenses and 
     necessary loan capital for disaster loans pursuant to section 
     7(b), and to carry out title IV of the Small Business 
     Investment Act of 1958, including salaries and expenses of 
     the Administration.
       ``(B) Notwithstanding any other provision of this 
     paragraph, for fiscal year 2006--
       ``(i) no funds are authorized to be used as loan capital 
     for 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 its own 
     behalf or on behalf of any other Federal 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 $2,000,000.''.

     SEC. 112. ADDITIONAL REAUTHORIZATIONS.

       (a) Drug-Free Workplace Program Assistance.--Section 
     21(c)(3)(T) of the Small Business Act (15 U.S.C. 
     648(c)(3)(T)) is amended by striking ``October 1, 2003'' and 
     inserting ``October 1, 2006''.
       (b) Paul D. Coverdell Drug-Free Workplace Program.--Section 
     27(g)(1) of the Small Business Act (15 U.S.C. 654(g)(1)) is 
     amended by striking ``2001 through 2003'' and inserting 
     ``2004 through 2006''.
       (c) Small Business Development Centers.--Section 
     21(a)(4)(C) of the Small Business Act (15 U.S.C. 
     648(a)(4)(C)) is amended--
       (1) by amending clause (vii) to read as follows:
       ``(vii) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this 
     subparagraph--
       ``(I) $125,000,000 for fiscal year 2004;
       ``(II) $130,000,000 for fiscal year 2005; and
       ``(III) $135,000,000 for fiscal year 2006.'';
       (2) by redesignating clause (viii) as clause (ix); and
       (3) by inserting after clause (vii) the following:
       ``(viii) Limitation.--From the funds appropriated pursuant 
     to clause (vii), the Administration shall reserve not less 
     than $1,000,000 in each fiscal year to develop portable 
     assistance for startup and sustainability non-matching grant 
     programs to be conducted by eligible small business 
     development centers in communities that are economically 
     challenged as a result of a business or government facility 
     downsizing or closing, which has resulted in the loss of jobs 
     or small business instability. A non-matching grant under 
     this clause shall not exceed $100,000, and shall be used for 
     small business development center personnel expenses and 
     related small business programs and services.''.

                     TITLE II--FINANCIAL ASSISTANCE

                Subtitle A--7(a) Loan Guarantee Program

     SEC. 201. NATIONAL PREFERRED LENDERS PILOT PROGRAM.

       Section 7(a)(2) of the Small Business Act (15 U.S.C. 
     636(a)(2)(C)) is amended by adding at the end the following:
       ``(E) National preferred lenders pilot program.--
       ``(i) Establishment.--There is established the National 
     Preferred Lenders Pilot Program, a 3-year pilot program in 
     which a participant in the Preferred Lenders Program may 
     operate as a preferred lender in any State if such lender 
     meets the criteria established by the Administration.
       ``(ii) Eligibility criteria.--For purposes of clause (i), 
     criteria established by the Administration shall include--

       ``(I) demonstrated proficiency in the Preferred Lenders 
     Program for not less than 3 years;
       ``(II) annual loan approvals of a minimum number of 7(a) 
     Preferred Lenders Program loans, excluding SBA Express loans, 
     as determined by the Administration;
       ``(III) operation by the lender in not less than 5 States 
     or 10 Small Business Administration districts;
       ``(IV) satisfactory centralized approval, loan servicing, 
     and loan liquidation functions and processes; and
       ``(V) consideration of any comments and recommendations 
     that may be received from any District Director or Regional 
     Administrator relating to the performance of the applicant.

       ``(iii) Terms and conditions.--Applicants shall be approved 
     under the following terms and conditions:

       ``(I) Term.--Each participant approved under this 
     subparagraph shall be eligible to make loans for up to 1 year 
     under the program established under this subparagraph.
       ``(II) Renewal.--At the expiration of the term described in 
     subclause (I), the authority of a participant to make loans 
     under this subparagraph may be renewed based on a review of 
     performance during the initial term.
       ``(III) Effect of failure.--Failure to meet the criteria 
     under this subparagraph shall not effect the eligibility of a 
     participant to continue as a preferred lender in States or 
     districts in which it is in good standing.''.

     SEC. 202. EXTENSION OF PROGRAM PARTICIPATION FEES.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended--
       (1) in paragraph (12) by striking ``(b)'' and inserting the 
     following:
       ``(B)'';
       (2) in paragraph (18)--
       (A) in subparagraph (A)--
       (i) in clause (i), by striking ``2 percent'' and inserting 
     ``1 percent''; and
       (ii) in clause (ii), by striking ``3 percent'' and 
     inserting ``2.5 percent''; and
       (B) by striking subparagraph (C); and
       (3) in paragraph (23)(A), by striking ``0.5 percent'' and 
     all that follows through ``equal to''.

     SEC. 203. LOANS SOLD IN SECONDARY MARKET.

       Section 5(g) of the Small Business Act (15 U.S.C. 634(g)) 
     is amended by adding at the end the following:
       ``(6) Trust certificates issued pursuant to this subsection 
     may be comprised of a pool of loans, guaranteed by the 
     Administration, with varying interest rates. The interest 
     rate paid by such certificates shall be equal to the weighted 
     average of the interest rates of the loans in the pool. The 
     Administration shall prescribe the maximum amount of 
     variation in the loan characteristics in order to enhance the 
     marketability of the pool.''.

[[Page S12063]]

     SEC. 204. CLARIFICATION OF ELIGIBILITY FOR VETERANS.

       Section 7(a)(8) of the Small Business Act (15 U.S.C. 
     636(a)(8)) is amended to read as follows:
       ``(8) The Administration may make loans under this 
     subsection to--
       ``(A) small business concerns owned and controlled by 
     veterans (as defined in section 101(2) of title 38, United 
     States Code);
       ``(B) small business concerns owned and controlled by 
     disabled veterans (as defined in section 4211(3) of title 38, 
     United States Code); and
       ``(C) small business concerns owned and controlled by 
     members of Reserve components of the Armed Forces (as defined 
     in section 101(c)(6) of title 10, United States Code).''.

     SEC. 205. ENHANCEMENT OF LOW DOCUMENTATION LOAN PROGRAM.

       Section 7(a)(25)(C) of the Small Business Act (15 U.S.C. 
     636(a)(25)(C)) is amended by striking ``$100,000'' and 
     inserting ``$250,000''.

     SEC. 206. INCREASED LOAN AMOUNTS FOR EXPORTERS.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (A), by inserting before the semicolon 
     at the end the following: ``and paragraph (14)''; and
       (B) in subparagraph (B), by striking ``$1,250,000'' and 
     inserting ``$1,300,000''; and
       (2) in paragraph (14), by adding at the end the following:
       ``(D) The total amount of financings under this paragraph 
     that are outstanding and committed (by participation or 
     otherwise) to the borrower from the business loan and 
     investment fund established under this Act may not exceed 
     $1,300,000 and the gross loan amount under this paragraph may 
     not exceed $2,600,000.''.

                     Subtitle B--Microloan Program

     SEC. 211. MICROLOAN PROGRAM IMPROVEMENTS.

       (a) Intermediary Eligibility Requirements.--Section 7(m)(2) 
     of the Small Business Act (15 U.S.C. 636(m)(2)) is amended--
       (1) in subparagraph (A), by striking ``in paragraph (10); 
     and'' and inserting ``of the term `intermediary' under 
     paragraph (11);''; and
       (2) in subparagraph (B)--
       (A) by striking ``(B) has at least'' and inserting the 
     following:
       ``(B) has--
       ``(i) at least''; and
       (B) by striking the period at the end and inserting the 
     following: ``; or
       ``(ii) a full-time employee who has not less than 3 years 
     experience making microloans to startup, newly established, 
     or growing small business concerns; and
       ``(C) has at least 1 year experience providing, as an 
     integral part of its microloan program, intensive marketing, 
     management, and technical assistance to its borrowers.''.
       (b) Conforming Change in Average Smaller Loan Size.--
     Section 7(m)(3)(F)(iii) of the Small Business Act (15 U.S.C. 
     636(m)(3)(F)(iii)) is amended by striking ``$7,500'' and 
     inserting ``$10,000''.
       (c) Limitation on Third Party Technical Assistance.--
     Section 7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 
     636(m)(4)(E)(ii)) is amended--
       (1) by striking ``Technical assistance'' and inserting 
     ``Third party technical assistance''; and
       (2) by striking ``25 percent'' and inserting ``30 
     percent''.
       (d) Loan Terms.--Section 7(m)(1)(B)(i) of the Small 
     Business Act (15 U.S.C. 636(m)(1)(B)(i)) is amended by 
     striking ``short-term''.
       (e) Report on Transferred Amounts.--Section 7(m)(9)(B) of 
     the Small Business Act (15 U.S.C. 636(m)(9)(B)) is amended--
       (1) by striking ``The Administration'' and inserting the 
     following:
       ``(i) In general.--The Administration'';
       (2) by striking the period after ``financing''; and
       (3) by adding at the end the following:
       ``(ii) Report.--The Administration shall report, in its 
     annual budget request and performance plan to Congress, on 
     the performance by the Administration of the requirements of 
     clause (i).''.
       (f) Accurate Subsidy Model.--Section 7(m) of the Small 
     Business Act (15 U.S.C. 636(m)) is amended by adding at the 
     end the following:
       ``(14) Improved subsidy model.--The Administrator shall 
     develop a subsidy model for the microloan program under this 
     subsection, to be used in the fiscal year 2005 budget, that 
     is more accurate than the subsidy model in effect on the day 
     before the date of enactment of this paragraph.''.
       (g) Increased Flexibility for Providing Technical 
     Assistance to Potential Borrowers.--Section 7(m)(4)(E)(i) of 
     the Small Business Act (15 U.S.C. 636(m)(4)(E)(i) is amended 
     by striking ``25 percent'' and inserting ``30 percent''.

                      Subtitle C--Lender Oversight

     SEC. 221. EXAMINATION AND REVIEW FEES.

       Section 5(b) of the Small Business Act (15 U.S.C. 634(b)) 
     is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``(b) In the performance'' and inserting the following:
       ``(b) Authority of Administrator.--In the performance'';
       (2) in paragraph (12), by striking ``and'' at the end;
       (3) in paragraph (13), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(14) require lenders participating in the program 
     authorized by section 7(a), including Small Business Lending 
     Companies, to pay reasonable examination and review fees, 
     which shall be--
       ``(A) deposited in the account for salaries and expenses of 
     the Administration; and
       ``(B) made available only for the costs of examinations, 
     reviews, and other lender oversight activities concerning 
     lenders participating in the program authorized by section 
     7(a).''.

     SEC. 222. ENFORCEMENT AUTHORITY FOR SMALL BUSINESS LENDING 
                   COMPANIES AND NON-FEDERALLY REGULATED SBA 
                   LENDERS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 36 as section 37; and
       (2) by inserting after section 35 the following new 
     section:


 ``Sec. 36. ENFORCEMENT AUTHORITY FOR SMALL BUSINESS LENDING COMPANIES 
                AND NON-FEDERALLY REGULATED SBA LENDERS

       ``(a) Defined Term.--In this section the term `management 
     official' means an officer, director, general partner, 
     manager, employee, agent, or other participant in the 
     management or conduct of the affairs of a Small Business 
     Lending Company or non-federally regulated SBA lender under 
     section 7(a).
       ``(b) Authorization.--
       ``(1) Small business lending companies.--The Administration 
     is authorized to--
       ``(A) supervise the safety and soundness of Small Business 
     Lending Companies;
       ``(B) set capital standards for, regulate, examine, and 
     enforce laws relating to Small Business Lending Companies; 
     and
       ``(C) prescribe regulations governing the operations, 
     oversight, and enforcement of Small Business Lending 
     Companies, in accordance with the purposes of this Act.
       ``(2) Non-federally regulated sba lenders.--The 
     Administration is authorized to--
       ``(A) supervise the safety and soundness of non-federally 
     regulated SBA lenders;
       ``(B) regulate, examine, and enforce laws relating to 
     lending by non-federally regulated SBA lenders under section 
     7(a); and
       ``(C) prescribe regulations governing the operations, 
     oversight, and enforcement of non-federally regulated SBA 
     lenders, in accordance with the purposes of this Act.
       ``(c) Capital Directives.--The Administration may--
       ``(1) deem the failure of a Small Business Lending Company 
     to maintain capital at or above the minimum capital level 
     established by the Administration as an unsafe and unsound 
     practice; and
       ``(2) in addition to, or in lieu of, any other action 
     authorized by law, issue a directive to a Small Business 
     Lending Company that fails to return or maintain capital at 
     or above its required level, as established by the 
     Administration.
       ``(d) Forfeiture of Authority for Noncompliance.--
       ``(1) In general.--Subject to the provisions of subsection 
     (g), if any Small Business Lending Company violates any of 
     the provisions of this Act, or any related regulation, such 
     company shall forfeit all of the rights, privileges, and 
     franchises under this Act.
       ``(2) Adjudication.--A company under paragraph (1) shall 
     not forfeit its rights, privileges, and franchises under this 
     Act, unless a court of the United States, with jurisdiction 
     over the judicial district in which the principal place of 
     business of such company is located, determines, in a suit 
     brought by, or on behalf of, the Administrator, that such 
     company violated this Act, or regulations promulgated 
     pursuant to this Act.
       ``(e) Revocation or Suspension of Authority.--
       ``(1) In general.--Subject to the provisions of subsection 
     (g), the Administration may revoke or suspend the authority 
     of a participating lender to make, service, or liquidate 
     business loans under section 7(a) if the participating 
     lender--
       ``(A) knowingly makes false statements in any written 
     statement required under this Act or any regulation issued 
     under this Act;
       ``(B) fails to state, in any written statement required 
     under this Act or any regulation issued under this Act, a 
     material fact necessary in order to make the statement not 
     misleading in the light of the circumstances under which the 
     statement was made;
       ``(C) willfully or repeatedly violates--
       ``(i) any provision of this Act;
       ``(ii) any rule or regulation issued under this Act; or
       ``(iii) any condition imposed by the Administration with 
     any application, request, or agreement; or
       ``(D) violates any cease and desist order issued by the 
     Administration under this section.
       ``(2) Length of suspension.--The suspension under paragraph 
     (1) shall remain in full force and effect until the 
     Administration issues a written notice of termination.
       ``(3) Notification.--If the lending authority of a lender 
     is revoked under paragraph (1), the lender shall send 
     notification, not later than 30 days after such revocation, 
     to all existing borrowers that such authority has been 
     revoked and that a new servicer has been appointed to service 
     their loans. If the lender fails to provide such notification 
     before the deadline, the aAdministration shall provide such 
     notification to borrowers.

[[Page S12064]]

       ``(4) Delegation.--The Administration may delegate the 
     authority to suspend a participating lender's authority to 
     make loans under section 7(a), but shall not delegate the 
     authority to revoke a participating lender's authority to 
     make such loans.
       ``(f) Cease and Desist Orders.--If a participating lender 
     or management official has violated, or is about to violate 
     any provision of this Act, or any related regulation, the 
     Administration, subject to the provisions of subsection (g), 
     may--
       ``(1) order the participating lender or management official 
     to--
       ``(A) cease and desist from such violation; and
       ``(B) take, or refrain from, such action as the 
     Administration deems necessary to ensure compliance with the 
     Act and related regulations; and
       ``(2) suspend the authority of such participating lender 
     pending full compliance with all orders issued under 
     paragraph (1).
       ``(g) Process for Revocation or Suspension of Authority or 
     Cease and Desist Orders.--
       ``(1) Notice.--Before revoking or suspending the authority 
     of a participating lender pursuant to subsection (e) or 
     issuing a cease and desist order pursuant to subsection (f), 
     the Administration shall--
       ``(A) provide notice to the participating lender that such 
     action is contemplated; and
       ``(B) provide the participating lender with an opportunity 
     to show cause why such action should not be taken.
       ``(2) Contents.--A notice under paragraph (1) shall 
     contain--
       ``(A) a statement of the matters of fact and law asserted 
     by the Administration;
       ``(B) a description of the legal authority and jurisdiction 
     under which a hearing is to be held; and
       ``(C) the time and place of the hearing that will be held 
     before the Administration.
       ``(3) Hearing.--
       ``(A) In general.--A hearing under this subsection shall 
     take place before the Office of Hearings and Appeals of the 
     Administration.
       ``(B) Subpoena.--The Administration may require by 
     subpoena--
       ``(i) the attendance and testimony of witnesses; and
       ``(ii) the production of all books, papers, e-mails, faxes, 
     and documents relating to the hearing under this paragraph.
       ``(C) Enforcement of subpoena.--If a party disobeys a 
     subpoena issued under subparagraph (B), the Administration, 
     or any party to a proceeding before the Administration, may 
     invoke the aid of any court of the United States to require--
       ``(i) the attendance and testimony of witnesses; and
       ``(ii) the production of books, papers, e-mails, faxes, and 
     documents.
       ``(D) Witness fees.--Witnesses summoned before the 
     Administration shall be paid, by the party at whose instance 
     they were called, the same fees and mileage that are paid 
     witnesses in the courts of the United States.
       ``(4) Issuance of order.--
       ``(A) In general.--If the Administration, after a hearing, 
     or a waiver thereof, determines on the record that an order 
     revoking or suspending the authority of a participating 
     lender under section 7(a) or a cease and desist order should 
     be issued, the Administration shall promptly issue such order 
     to the participating lender and any other person involved.
       ``(B) Contents.--The order issued under subparagraph (A) 
     shall contain--
       ``(i) a statement of the findings of the Administration;
       ``(ii) the reasons therefore; and
       ``(iii) the effective date of the order.
       ``(C) Effective date.--
       ``(i) Cease and desist order.--A cease and desist order 
     issued under this paragraph shall become effective on the 
     date specified therein.
       ``(ii) Revocation or suspension.--An order revoking or 
     suspending the authority of a participating lender under 
     section 7(a) shall be final and conclusive 30 days after the 
     date of issuance of such order unless the participating 
     lender files an appeal under paragraph (5).
       ``(5) Appeal.--
       ``(A) Appeal by right.--Not later than 30 days after an 
     order is issued under paragraph (4), a participating lender 
     may appeal such order by filing a petition requesting that 
     the Administration's order be set aside or modified with the 
     clerk of the United States district court for the judicial 
     district in which such participating lender has its principal 
     place of business.
       ``(B) Leave of court.--After the expiration of the period 
     described in subparagraph (A), a participating lender may 
     file a petition of appeal only by leave of court and upon a 
     showing of reasonable grounds for failure to timely file such 
     petition.
       ``(C) Delivery of petition.--Upon receiving a petition 
     under this paragraph, the clerk of the court shall 
     immediately deliver a copy of the petition to the 
     Administration, which shall certify and file in the court a 
     transcript of the record upon which the order complained of 
     was entered.
       ``(D) Amendment of petition.--If the Administration amends 
     or sets aside its order, in whole or in part, before the 
     record is filed under subparagraph (C), the petitioner may 
     amend the petition within such time as the court may 
     determine, on notice to the Administration.
       ``(E) Effect of petition.--The filing of a petition for 
     review shall not affect the operation of the order of the 
     Administration, but the district court may restrain or 
     suspend, in whole or in part, the operation of the order 
     pending the final hearing and determination of the petition.
       ``(F) Authority of court.--
       ``(i) In general.--Except as provided under clause (ii), 
     the district court may affirm, modify, or set aside any order 
     of the Administration issued under this subsection.
       ``(ii) Limitation.--The district court shall not consider 
     an objection to an order of the Administration unless such 
     objection was presented to the Administration or there were 
     reasonable grounds for failure to do so.
       ``(G) Additional evidence.--
       ``(i) In general.--If the district court determines that 
     the just and proper disposition of the case requires the 
     taking of additional evidence, the court may take additional 
     evidence and findings of fact, or may order the 
     Administration to reopen the hearing for the taking of such 
     evidence, in such manner and upon such terms and conditions 
     as the court determines to be proper.
       ``(ii) Modification of findings.--The Administration may 
     modify its findings as to the facts, or make new findings, by 
     reason of the additional evidence so taken, and it shall file 
     its modified or new findings and the amendments, if any, of 
     its order, with the record of such additional evidence.
       ``(6) Enforcement of order.--
       ``(A) In general.--If any participating lender or other 
     person against which an order is issued under this section 
     fails to obey the order, the Administration may file an 
     application with the United States district court within the 
     judicial district where the participating lender has its 
     principal place of business, for the enforcement of the order 
     by filing a transcript of the record upon which the disobeyed 
     order was entered.
       ``(B) Notice.--Upon the receipt of the application filed 
     under subparagraph (A), the court shall notify the 
     participating lender or other person of such enforcement 
     action.
       ``(C) Procedure.--The evidence to be considered, the 
     procedure to be followed, and the jurisdiction of the court 
     shall be the same as is provided in paragraph (5) for 
     applications to set aside or modify orders.
       ``(h) Removal or Suspension of Management Officials.--
       ``(1) Removal of management officials.--
       ``(A) Notice of removal.--The Administrator may serve upon 
     any management official a written notice of its intention to 
     remove that management official if, in the opinion of the 
     Administrator such management official--
       ``(i) has willfully and knowingly committed any substantial 
     violation of--

       ``(I) this Act;
       ``(II) any regulation issued under this Act;
       ``(III) a cease-and-desist order which has become final; or
       ``(IV) any agreement by the management official or the 
     participating lender; or

       ``(ii) has willfully and knowingly committed or engaged in 
     any act, omission, or practice which constitutes a 
     substantial breach of a fiduciary duty of that person as a 
     management official if the violation or breach of fiduciary 
     duty involves personal dishonesty on the part of such 
     management official.
       ``(B) Contents of notice.--A notice provided under 
     subparagraph (A) shall contain--
       ``(i) a statement of the facts constituting the grounds for 
     the removal of the management official; and
       ``(ii) the time and place at which a hearing will be held 
     to determine if the management official should be removed 
     from office.
       ``(C) Hearings.--
       ``(i) Timing.--A hearing described in subparagraph (B) 
     shall take place not earlier than 30 days nor later than 60 
     days after the date on which notice is provided under 
     subparagraph (A), unless an earlier or later date is set by 
     the Administrator at the request of--

       ``(I) the management official, for good cause shown; or
       ``(II) the Attorney General of the United States.

       ``(ii) Consent.--If the management official fails to 
     appear, in person or by a duly authorized representative, at 
     a hearing under this paragraph, that management official 
     shall be deemed to have consented to the issuance of an order 
     of removal under subparagraph (A).
       ``(D) Issuance of order of removal.--
       ``(i) In general.--The Administrator may issue an order of 
     removal from office if--

       ``(I) consent is deemed under subparagraph (C)(ii); or
       ``(II) the Administrator finds, upon the record of the 
     hearing described in this subsection, that any of the grounds 
     specified in the notice of removal has been established.

       ``(ii) Effectiveness.--An order under clause (i) shall--

       ``(I) become effective on the expiration of the date which 
     is 30 days after the date that notice is provided to the 
     participating lender and the management official concerned 
     (except in the case of an order issued upon consent as 
     described in [clause] subparagraph (C)(ii), which shall 
     become effective at the time specified in such order); and
       ``(II) remain effective and enforceable, except to the 
     extent it is stayed, modified, terminated, or set aside by 
     action of the Administrator or a reviewing court, in 
     accordance with this section.

       ``(2) Authority to suspend or prohibit participation.--

[[Page S12065]]

       ``(A) In general.--The Administrator may--
       ``(i) if necessary to protect the Small Business Lending 
     Company or interests of the Administration, suspend from 
     office any management official described in paragraph (1), or 
     temporarily prohibit such official from further participating 
     in the management or conduct of the affairs of the Small 
     Business Lending Company; and
       ``(ii) if necessary to protect the interests of the 
     Administration, suspend from office any management official 
     described in paragraph (1) or prohibit from further 
     participation a non-federally regulated SBA lender or any 
     management official described in paragraph (1) in any 
     activities related to the making, servicing, review, 
     approval, or liquidation of any loan made under section 7(a).
       ``(B) Effectiveness.--A suspension or prohibition under 
     subparagraph (A)--
       ``(i) shall become effective upon service of notice under 
     paragraph (1); and
       ``(ii) unless stayed by a court in proceedings under 
     subparagraph (C), shall remain in effect--

       ``(I) pending the completion of the administrative 
     proceedings pursuant to a notice under paragraph (1); and
       ``(II) until the Administrator dismisses the charges 
     specified in the notice, or, if an order of removal or 
     prohibition is issued against the management official, until 
     the effective date of any such order.

       ``(C) Judicial review.--Not later than 10 days after any 
     management official has been suspended from office or 
     prohibited from participation in the management or conduct of 
     the affairs of a participating lender, the management 
     official may apply for a stay of the suspension or 
     prohibition, pending the completion of the administrative 
     proceedings under this subsection, to--
       ``(i) the United States district court for the judicial 
     district in which the home office of the participating lender 
     is located; or
       ``(ii) the United States District Court for the District of 
     Columbia.
       ``(3) Authority to suspend on criminal charges.--
       ``(A) In general.--If a management official is charged, in 
     any information, indictment, or complaint authorized by a 
     United States attorney or a State prosecutor, with the 
     commission of a felony involving dishonesty or breach of 
     trust, or has been convicted of any felony, the Administrator 
     may suspend that management official from office or prohibit 
     that management official from further participation in the 
     management or conduct of the affairs of the participating 
     lender.
       ``(B) Effectiveness.--A suspension or prohibition under 
     paragraph (A) shall remain in effect until the subject 
     information, indictment, or complaint is finally disposed of, 
     or until terminated by the Administrator.
       ``(C) Authority upon conviction.--
       ``(i) In general.--If a judgment of conviction with respect 
     to an offense described in paragraph (A) is entered against a 
     management official and is no longer subject to appellate 
     review, the Administrator may issue an order removing that 
     management official from office.
       ``(ii) Notice.--A copy of the order issued under clause (i) 
     shall be delivered to the management official and the 
     participating lender for which such official was employed.
       ``(iii) Effective date.--The order of removal under clause 
     (i) shall take effect upon the delivery of a copy of the 
     order to the participating lender.
       ``(D) Authority upon dismissal or other disposition.--A 
     finding of not guilty or other disposition of charges 
     described in subparagraph (A) shall not preclude the 
     Administrator from initiating proceedings to suspend or 
     remove the management official from office, or to temporarily 
     prohibit the management official from participation in the 
     management or conduct of the affairs of any participating 
     lender.
       ``(4) Procedural provisions; judicial review.--
       ``(A) Hearing venue.--Any hearing under this subsection 
     shall be--
       ``(i) held in the Federal judicial district or in the 
     territory in which the principal office of the participating 
     lender is located, unless the party afforded the hearing 
     consents to another place; and
       ``(ii) conducted in accordance with the provisions of 
     chapter 5 of title 5, United States Code.
       ``(B) Issuance of orders.--After a hearing under this 
     subsection, and not later than 90 days after the 
     Administrator has notified the parties that the case has been 
     submitted for final decision, the Administrator shall--
       ``(i) render a decision in the matter, which shall include 
     findings of fact upon which its decision is predicated; and
       ``(ii) issue and serve upon each party to the proceeding an 
     order or orders consistent with the provisions of this 
     section.
       ``(C) Authority to modify orders.--The Administrator may 
     modify, terminate, or set aside any order issued under this 
     section--
       ``(i) at any time, upon such notice, and in such manner as 
     the Administrator may prescribe, until a petition for review 
     is timely filed with a United States district court, in 
     accordance with subparagraph (D)(ii) and a record of the 
     proceeding has been filed in accordance with subparagraph 
     (D)(iii); and
       ``(ii) after the filing of the record under subparagraph 
     (D)(iii), with permission of the court.
       ``(D) Judicial review.--
       ``(i) In general.--Judicial review of an order issued under 
     this section shall be limited to the provisions of this 
     subsection.
       ``(ii) Petition for judicial review.--Any party to a 
     hearing under this section may obtain a review of any order 
     issued pursuant to subparagraph (B) (other than an order 
     issued with the consent of the management official concerned 
     or an order issued under subsection (d)), by filing, not 
     later than 30 days after the date of service of such order, 
     in the United States district court for the judicial district 
     in which the principal office of the licensee is located or 
     in the United States District Court for the District of 
     Columbia, a written petition requested that the order be 
     modified, terminated, or set aside.
       ``(iii) Notice to administration.--The clerk of the court 
     receiving a petition under [subparagraph] clause (ii) shall 
     transmit a copy of the petition to the Administrator, who 
     shall submit to the court the record of the proceeding, in 
     accordance with section 2112 of title 28, United States Code.
       ``(iv) Jurisdiction.--

       ``(I) Exclusive.--Upon the filing of the record under 
     clause (iii), the district court described in clause (ii) 
     shall have exclusive jurisdiction to affirm, modify, 
     terminate, or set aside, in whole or in part, the order of 
     the Administrator, except as provided under paragraph 
     (2)(B)(ii)(II).
       ``(II) Review.--The review of any proceeding under 
     subclause (I) shall be in accordance with chapter 7 of title 
     5, United States Code.

       ``(v) Judicial review not a stay.--The commencement of 
     proceedings for judicial review under this paragraph shall 
     not, unless specifically ordered by the district court, 
     operate as a stay of any order issued by the Administrator 
     under this section.
       ``(i) Injunctions.--
       ``(1) Application.--If, in the judgment of the 
     Administrator, a participating lender or any other person has 
     engaged, or is about to engage, in any acts or practices 
     which violate any provision of this Act, any rule or 
     regulation under this Act, or any order issued under this 
     Act, the Administrator may apply to the proper district 
     court of the United States, or a United States court of 
     any place subject to the jurisdiction of the United 
     States, for an order to--
       ``(A) enjoin such acts or practices; or
       ``(B) enforce compliance with such provision, rule, 
     regulation, or order.
       ``(2) Jurisdiction.--A court under paragraph (1) shall have 
     jurisdiction over any action under paragraph (1).
       ``(3) Issuance.--Upon a showing by the Administrator that a 
     participating lender or other person has engaged, or is about 
     to engage, in any act or practice described in paragraph (1), 
     the court shall issue, without bond--
       ``(A) a permanent or temporary injunction;
       ``(B) a restraining order; or
       ``(C) any other appropriate order.
       ``(j) Appointment of Receivers.--In any injunction 
     proceeding under subsection (i), the district court may--
       ``(1) seize the assets of 1 or more Small Business Lending 
     Companies; and
       ``(2) appoint the Administration, or another receiver, to 
     hold or administer the assets seized under paragraph (1) 
     under the direction of the court.
       ``(k) Possession of Assets.--
       ``(1) Small business lending companies.--If a Small 
     Business Lending Company is insolvent, out of compliance with 
     capital requirements under this section, or otherwise 
     operating in an unsafe or unsound condition, the 
     Administration may take possession of--
       ``(A) the portfolio of loans guaranteed by the 
     Administration and sell such loans to a third party through a 
     receiver appointed under subsection (j)(2); and
       ``(B) servicing activities of loans that are guaranteed by 
     the Administration and sell such servicing rights to a third 
     party through a receiver appointed under subsection (j)(2).
       ``(2) Non-federally regulated sba lenders.--If a non-
     federally regulated SBA lender is insolvent or otherwise 
     operating in an unsafe and unsound condition, the 
     Administration may take possession of--
       ``(A) the portfolio of loans guaranteed by the 
     Administration and sell such loans to a third party; and
       ``(B) servicing activities of loans that are guaranteed by 
     the Administration and sell such servicing rights to a third 
     party.
       ``(l) Penalties and Forfeitures.--
       ``(1) In general.--Except as provided under paragraph (3), 
     a Small Business Lending Company or a non-federally regulated 
     SBA lender that violates any regulation or written directive 
     issued by the Administrator regarding the filing of any 
     regular or special report shall pay to the United States a 
     civil penalty of not more than $5,000 for every day after the 
     due date in which the lender fails to file such report, 
     unless such failure is due to reasonable cause and not 
     willful neglect.
       ``(2) Recovery of civil penalty.--The civil penalty 
     provided for in this section shall accrue to the United 
     States and may be recovered in a civil action brought by the 
     Administration.
       ``(3) Exemption.--The Administrator may, by regulation, 
     order, or upon the application of an interested party, at any 
     time before a report is due under paragraph (1) and after 
     notice and opportunity for hearing, exempt, in whole or in 
     part, any Small Business Lending Company from the provisions 
     of paragraph (1), upon such terms and conditions and for such 
     period of time as the Administrator determines to be 
     appropriate, if the Administrator finds that such action is 
     consistent with the public interest or the protection of the 
     Administration.

[[Page S12066]]

       ``(4) Alternative requirements.--If an exemption is granted 
     under paragraph (3), the Administrator may, for the purposes 
     of this section, make any alternative requirements 
     appropriate to the situation.''.

     SEC. 223. DEFINITIONS FOR SMALL BUSINESS LENDING COMPANIES 
                   AND NON-FEDERALLY REGULATED SBA LENDERS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended--
       (1) in subsection (l), by striking ``Act--
       ``(1) the term'' and inserting ``Act, the term''; and
       (2) by adding at the end the following:
       ``(r) Small Business Lending Company.--In this Act, the 
     term `Small Business Lending Company' means a non-depository 
     financial institution that is licensed, supervised, examined, 
     and regulated by the Administration to only make loans under 
     section 7.
       ``(s) Non-Federally Regulated SBA Lender.--In this Act, the 
     term `non-federally regulated SBA lender' means a financial 
     institution, other than a Small Business Lending Company, 
     that makes loans under section 7 and is not regulated by--
       ``(1) the Farm Credit Administration;
       ``(2) the Federal Financial Institution Examination 
     Council;
       ``(3) the Board of Governors of the Federal Reserve System;
       ``(4) the Office of the Comptroller of the Currency;
       ``(5) the Federal Deposit Insurance Corporation;
       ``(6) the Office of Thrift Supervision; or
       ``(7) the National Credit Union Administration.''.

              Subtitle D--Disaster Assistance Loan Program

     SEC. 231. CONFORMING AMENDMENT FOR DISASTER ASSISTANCE LOAN 
                   PROGRAM.

       Section 7(c)(6) of the Small Business Act (15 U.S.C. 
     636(c)(6)) is amended--
       (1) by striking ``$500,000'' each place it appears and 
     inserting ``$1,500,000''; and
       (2) by inserting ``commencing on or after April 1, 1993,'' 
     before ``unless an applicant''.

     SEC. 232. DISASTER RELIEF FOR SMALL BUSINESS CONCERNS DAMAGED 
                   BY DROUGHT.

       (a) Drought Disaster Authority.--
       (1) Definition of disaster.--Section 3(k) of the Small 
     Business Act (15 U.S.C. 632(k)) is amended--
       (A) by inserting ``(1)'' after ``(k)''; and
       (B) by adding at the end the following:
       ``(2) For purposes of section 7(b)(2), the term `disaster' 
     includes--
       ``(A) drought; and
       ``(B) below average water levels in the Great Lakes, or on 
     any body of water in the United States that supports commerce 
     by small business concerns.''.
       (2) Drought disaster relief authority.--Section 7(b)(2) of 
     the Small Business Act (15 U.S.C. 636(b)(2)) is amended--
       (A) by inserting ``(including drought), with respect to 
     both farm-related and nonfarm-related small business 
     concerns,'' before ``if the Administration''; and
       (B) in subparagraph (B), by striking ``the Consolidated 
     Farmers Home Administration Act of 1961 (7 U.S.C. 1961)'' and 
     inserting the following: ``section 321 of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1961), in which 
     case, assistance under this paragraph may be provided to 
     farm-related and nonfarm-related small business concerns, 
     subject to the other applicable requirements of this 
     paragraph''.
       (b) Limitation on Loans.--From funds otherwise appropriated 
     pursuant to section 20 for loans under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b)), not more than 
     $9,000,000 may be used during fiscal year 2004 to provide 
     drought disaster loans to nonfarm-related small business 
     concerns.
       (c) Prompt Response to Disaster Requests.--Section 
     7(b)(2)(D) of the Small Business Act (15 U.S.C. 636(b)(2)(D)) 
     is amended by striking ``Upon receipt of such certification, 
     the Administration may'' and inserting ``Not later than 30 
     days after the date of receipt of such certification by a 
     Governor of a State, the Administration shall respond in 
     writing to that Governor on its determination and the reasons 
     therefore, and may''.
       (d) Rulemaking.--Not later than 45 days after the date of 
     enactment of this section, the Administrator shall promulgate 
     final rules to carry out this section and the amendments made 
     by this section.

     SEC. 233. DISASTER MITIGATION PILOT PROGRAM.

       Section 7(b)(1)(C) of the Small Business Act (15 U.S.C. 
     636(b)(1)(C)) is amended by striking ``2000 through 2004'' 
     and inserting ``2003 through 2006''.

                      Subtitle E--504 Loan Program

     SEC. 241. EXTENSION OF USER FEES.

       Section 503(f) of the Small Business Investment Act of 1958 
     (15 U.S.C. 697(f)) is amended by striking ``October 1, 2003'' 
     and inserting ``October 1, 2006''.

     SEC. 242. AMORTIZED LOAN LOSS RESERVE FUND.

       Paragraph (6) of section 508(c) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697e(c)) is amended--
       (1) by striking ``The Administration'' and inserting the 
     following:
       ``(A) In general.--The Administration''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) Temporary reduction based on outstanding balance.--
     Notwithstanding subparagraph (A), the Administration shall 
     allow the certified development company to withdraw from the 
     loss reserve such amounts as are in excess of 1 percent of 
     the aggregate outstanding balances of debentures to which 
     such loss reserve relates. The preceding sentence shall not 
     apply with respect to any debenture before 100 percent of the 
     contribution described in paragraph (4) with respect to such 
     debenture has been made.''.

     SEC. 243. ALTERNATIVE LOSS RESERVE FOR CERTAIN PREMIER 
                   CERTIFIED LENDERS.

       (a) In General.--Subsection (c) of section 508 of the Small 
     Business Investment Act of 1958 (15 U.S.C. 697e) is amended 
     by adding at the end the following:
       ``(7) Alternative loss reserve.--
       ``(A) Election.--With respect to any eligible calendar 
     quarter, any qualified high loss reserve PCL may elect to 
     have the requirements of this paragraph apply in lieu of the 
     requirements of paragraphs (2) and (4) for such quarter.
       ``(B) Contributions.--
       ``(i) Ordinary rules inapplicable.--Except as provided 
     under clause (ii) and paragraph (5), a qualified high loss 
     reserve PCL that makes the election described in subparagraph 
     (A) with respect to a calendar quarter shall not be required 
     to make contributions to its loss reserve during such 
     quarter.
       ``(ii) Based on loss.--A qualified high loss reserve PCL 
     that makes the election described in subparagraph (A) with 
     respect to any calendar quarter shall, before the last day of 
     such quarter, make such contributions to its loss reserve as 
     are necessary to ensure that the amount of the loss reserve 
     of the PCL is--

       ``(I) not less than $100,000; and
       ``(II) sufficient, as determined by a qualified independent 
     auditor, for the PCL to meet its obligations to protect the 
     Federal Government from risk of loss.

       ``(iii) Certification.--Before the end of any calendar 
     quarter for which an election is in effect under 
     subparagraph (A), the head of the PCL shall submit to the 
     Administrator a certification that the loss reserve of the 
     PCL is sufficient to meet such PCL's obligation to protect 
     the Federal Government from risk of loss. Such 
     certification shall be in such form and submitted in such 
     manner as the Administrator may require and shall be 
     signed by the head of such PCL and the auditor making the 
     determination under clause (ii)(II).
       ``(C) Disbursements.--
       ``(i) Ordinary rule inapplicable.--Paragraph (6) shall not 
     apply with respect to any qualified high loss reserve PCL for 
     any calendar quarter for which an election is in effect under 
     subparagraph (A).
       ``(ii) Excess funds.--At the end of each calendar quarter 
     for which an election is in effect under subparagraph (A), 
     the Administration shall allow the qualified high loss 
     reserve PCL to withdraw from its loss reserve the excess of--

       ``(I) the amount of the loss reserve, over
       ``(II) the greater of $100,000 or the amount which is 
     determined under subparagraph (B)(ii) to be sufficient to 
     meet the PCL's obligation to protect the Federal Government 
     from risk of loss.

       ``(D) Recontribution.--If the requirements of this 
     paragraph apply to a qualified high loss reserve PCL for any 
     calendar quarter and cease to apply to such PCL for any 
     subsequent calendar quarter, such PCL shall make a 
     contribution to its loss reserve in such amount as the 
     Administrator may determine provided that such amount does 
     not exceed the amount which would result in the total amount 
     in the loss reserve being equal to the amount which would 
     have been in such loss reserve had this paragraph never 
     applied to such PCL. The Administrator may require that such 
     payment be made as a single payment or as a series of 
     payments.
       ``(E) Risk management.--If a qualified high loss reserve 
     PCL fails to meet the requirement of subparagraph (F)(iii) 
     during any period for which an election is in effect under 
     subparagraph (A) and such failure continues for 180 days, the 
     requirements of paragraphs (2), (4), and (6) shall apply to 
     such PCL as of the end of such 180-day period and such PCL 
     shall make the contribution to its loss reserve described in 
     subparagraph (D). The Administrator may waive the 
     requirements of this subparagraph.
       ``(F) Qualified high loss reserve pcl.--The term `qualified 
     high loss reserve PCL' means, with respect to any calendar 
     year, any premier certified lender designated by the 
     Administrator as a qualified high loss reserve PCL for such 
     year. The Administrator shall not designate a company under 
     the preceding sentence unless the Administrator determines 
     that--
       ``(i) the amount of the loss reserve of the company is not 
     less than $100,000;
       ``(ii) the company has established and is utilizing an 
     appropriate and effective process for analyzing the risk of 
     loss associated with its portfolio of PCLP loans and for 
     grading each PCLP loan made by the company on the basis of 
     the risk of loss associated with such loan; and
       ``(iii) the company meets or exceeds 4 or more of the 
     specified risk management benchmarks as of the most recent 
     assessment by the Administration or the Administration has 
     issued a waiver with respect to the requirement of this 
     clause.
       ``(G) Specified risk management benchmarks.--For purposes 
     of this paragraph, the term `specified risk management 
     benchmarks' means the following rates, as determined by the 
     Administrator:
       ``(i) Currency rate.

[[Page S12067]]

       ``(ii) Delinquency rate.
       ``(iii) Default rate.
       ``(iv) Liquidation rate.
       ``(v) Loss rate.
       ``(H) Qualified independent auditor.--For purposes of this 
     paragraph, the term `qualified independent auditor' means any 
     licensed auditor who--
       ``(i) is compensated by the qualified high loss reserve 
     PCL;
       ``(ii) is independent of such PCL; and
       ``(iii) has been approved by the Administrator during the 
     preceding year.
       ``(I) PCLP loan.--For purposes of this paragraph, the term 
     `PCLP loan' means any loan guaranteed under this section.
       ``(J) Eligible calendar quarter.--For purposes of this 
     paragraph, the term `eligible calendar quarter' means--
       ``(i) the first calendar quarter that begins after the end 
     of the 90-day period beginning with the date of the enactment 
     of this paragraph; and
       ``(ii) the [7] 11 succeeding calendar quarters.
       ``(K) Calendar quarter.--For purposes of this paragraph, 
     the term `calendar quarter' means--
       ``(i) the period which begins on January 1 and ends on 
     March 31 of each year;
       ``(ii) the period which begins on April 1 and ends on June 
     30 of each year;
       ``(iii) the period which begins on July 1 and ends on 
     September 30 of each year; and
       ``(iv) the period which begins on October 1 and ends on 
     December 31 of each year.
       ``(L) Regulations.--Not later than 45 days after the date 
     of the enactment of this paragraph, the Administrator shall 
     publish in the Federal Register and transmit to Congress 
     regulations to carry out this paragraph. Such regulations 
     shall include provisions relating to--
       ``(i) the approval of auditors under subparagraph (H); and
       ``(ii) the designation of qualified high loss reserve PCLs 
     under subparagraph (F), including the determination of 
     whether a process for analyzing risk of loss is appropriate 
     and effective for purposes of subparagraph (F)(ii).''.
       (b) Increased Reimbursement for Losses Related to 
     Debentures Issued During Election Period.--Subparagraph (C) 
     of section 508(b)(2) of the Small Business Investment Act of 
     1958 (15 U.S.C. 697e(b)(2)) is amended by inserting ``(15 
     percent in the case of any such loss attributable to a 
     debenture issued by the company during any period for which 
     an election is in effect under subsection (c)(7) for such 
     company)'' before ``; and''.
       (c) Conforming Amendments.--
       (1) Subparagraph (D) of section 508(b)(2) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 697e(b)(2)) is 
     amended by striking ``subsection (c)(2)'' and inserting 
     ``subsection (c)''.
       (2) Paragraph (5) of section 508(c) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697e(c)) is amended by 
     striking ``10 percent''.
       (d) Study and Report.--
       (1) In general.--The Administrator shall enter into a 
     contract with a Federal agency experienced in community 
     development lending and financial regulation or with a member 
     of the Federal Financial Institutions Examinations Council to 
     study and prepare a report regarding--
       (A) the extent to which statutory requirements have caused 
     over capitalization in the loss reserves maintained by 
     certified development companies participating in the Premier 
     Certified Lenders Program established under section 508 of 
     the Small Business Investment Act of 1958 (15 U.S.C. 697e); 
     and
       (B) alternatives for establishing and maintaining loss 
     reserves that are sufficient to protect the Federal 
     Government from the risk of loss associated with loans 
     guaranteed under such Program.
       (2) Transmission of report.--The report described in 
     paragraph (1) shall be transmitted to the Committee on Small 
     Business of the House of Representatives and the Committee on 
     Small Business and Entrepreneurship of the Senate not later 
     than 180 days after the date of the enactment of this Act.
       (3) Limitation.--The amount of the contract described in 
     paragraph (1) shall not exceed $75,000.

     SEC. 244. DEBENTURE SIZE.

       Section 502(2) of the Small Business Investment Act of 1958 
     (15 U.S.C. 696) is amended to read as follows:
       [(1) by striking ``The Administration may,'' and inserting 
     the following:
       ``(a) In General.--The Administration may,'';
       (2) by striking ``: Provided, however, That the foregoing 
     powers'' and inserting the following:
       ``(b) Conditions.--The authority under subsection (a)''; 
     and
       (3) in subsection (b) (as designated by paragraph (2)), by 
     amending paragraph (2) to read as follows:]
       ``(2) Maximum amount.--Loans made by the Administration 
     under this section shall be limited to--
       ``(A) $1,500,000 for each small business concern if the 
     loan proceeds will not be directed toward a goal or project 
     described in subparagraph (B) or (C);
       ``(B) $2,000,000 for each small business concern if the 
     loan proceeds will be directed toward 1 or more of the public 
     policy goals described under section 501(d)(3); and
       [``(C) $2,000,000 for each small business concern if the 
     loan proceeds will be directed toward manufacturing 
     projects.''.]
       ``(C) $4,000,000 for each small business concern if the 
     loan proceeds will be directed toward manufacturing 
     projects.''.

     SEC. 245. JOB CREATION OR RETENTION STANDARDS.

       Section 501 of the Small Business Investment Act of 1958 
     (15 U.S.C. 695) is amended by striking the undesignated 
     paragraph at the end and inserting the following:
       ``(e) Job Creation or Retention.--
       [``(1) In general.--A project being funded by the debenture 
     is deemed to satisfy the job creation or retention 
     requirement under subsection (d)(1) if the project creates or 
     retains 1 job opportunity for every $50,000 guaranteed by the 
     Administration.]
       ``(1) In general.--A project being funded by the debenture 
     is deemed to satisfy the job creation or retention 
     requirement under subsection (d)(1) if the project creates or 
     retains--
       ``(A) 1 job opportunity for every $50,000 guaranteed by the 
     Administration; or
       ``(B) in the case of a manufacturing project, 1 job 
     opportunity for every $100,000 guaranteed by the 
     Administration.
       ``(2) Temporary job creation waiver.--
       ``(A) In general.--If a development company fails to meet 
     the job creation and retention requirements under this 
     section, the company may apply for a temporary waiver from 
     the Administration. Not later than 30 days after the request 
     for such waiver, the Administration shall respond to the 
     request and may temporarily waive the requirement if the 
     development company shows reasonable cause for its failure to 
     meet the job creation and retention requirements under 
     this section and demonstrates how it intends to attain 
     such requirements in the future.
       ``(B) Aggregation of goals and objectives.--If a project 
     meets the economic development objectives or public policy 
     goals under paragraphs (2) and (3) of subsection (d), the 
     project does not need to meet the individual job creation or 
     retention requirements for that particular project if the 
     outstanding portfolio of the development company meets or 
     exceeds the job creation or retention criteria under 
     subsection (d)(1).''.

     SEC. 246. SIMPLIFIED APPLICATIONS.

       (a) Loans of $400,000 or Less.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall develop a 
     shorter, more concise, and simplified application form for 
     loan guarantees involving not more than $400,000 authorized 
     under section 504 of the Small Business Investment Act of 
     1958 (15 U.S.C. 697a).
       (2) Availability to certified development companies.--The 
     form developed under paragraph (1) shall be made available to 
     certified development companies not later than 180 days after 
     the date of enactment of this Act.
       (b) All Other Loans.--
       (1) In general.--Not later than 270 days after the date of 
     enactment of this Act, the Administrator shall develop a 
     shorter, more concise, and simplified application form for 
     all loan guarantees authorized under section 504 of the Small 
     Business Investment Act of 1958 (15 U.S.C. 697a), including 
     those described in subsection (a).
       (2) Availability to certified development companies.--The 
     form developed under paragraph (1) shall be made available to 
     certified development companies not later than 270 days after 
     the date of enactment of this Act.

     SEC. 247. CHILD CARE LENDING PILOT PROGRAM.

       (a) Loans Authorized.--Section 502 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``The Administration'' and inserting the 
     following:
       ``(a) Authorization.--The Administration'';
       (B) by striking ``and such loans'' and inserting ``. Such 
     loans'';
       (C) by striking ``: Provided, however, That the foregoing 
     powers shall be subject to the following restrictions and 
     limitations:'' and inserting a period; and
       (D) by adding at the end the following:
       ``(b) Restrictions and Limitations.--The authority under 
     subsection (a) shall be subject to the following restrictions 
     and limitations:''; and
       (2) in paragraph (1)--
       (A) by inserting after ``Use of pro- 
     ceeds.--'' the following:
       ``(A) In general.--''; and
       (B) by adding at the end the following:
       ``(B) Loans to small, nonprofit child care businesses.--
       ``(i) In general.--Notwithstanding subsection (a)(1), the 
     proceeds of any loan described in subsection (a) may be used 
     by the certified development company to assist small, 
     nonprofit child care businesses, provided that--

       ``(I) the loan will be used for a sound business purpose 
     that has been approved by the Administration;
       ``(II) each such business receiving financial assistance 
     meets all of the same eligibility requirements applicable to 
     for-profit businesses under this title, except for status as 
     a for-profit business;
       ``(III) 1 or more individuals has personally guaranteed the 
     loan;
       ``(IV) the small, non-profit child care business has clear 
     and singular title to the collateral for the loan; and
       ``(V) the small, non-profit child care business has 
     sufficient cash flow from its operations to meet its 
     obligations on the loan

[[Page S12068]]

     and its normal and reasonable operating expenses.

       ``(ii) Limitation on volume.--Not more than 7 percent of 
     the total number of loans guaranteed in any fiscal year under 
     this title may be awarded under the pilot program.
       ``(iii) Defined term.--For purposes of this subparagraph, 
     the term `small, non-profit child care business' means an 
     establishment that--

       ``(I) is organized in accordance with section 501(c)(3) of 
     the Internal Revenue Code of 1986;
       ``(II) is primarily engaged in providing child care for 
     infants, toddlers, pre-school, or pre-kindergarten children 
     (or any combination thereof), may provide care for older 
     children when they are not in school, and may offer pre-
     kindergarten educational programs;
       ``(III) including its affiliates, has tangible net worth 
     that does not exceed $7,000,000, and has average net income 
     (excluding any carryover losses) for the preceding 2 
     completed fiscal years that does not exceed $2,500,000; and
       ``(IV) is licensed as a child care provider by the District 
     of Columbia, the insular area, or the State in which it is 
     located.''.
       ``(iv) Sunset provision.--This subparagraph shall remain in 
     effect until September 30, 2006, and shall apply to all loans 
     authorized under this subparagraph that are applied for, 
     approved, or disbursed during the period beginning on the 
     date of enactment of the Small Business Administration 50th 
     Anniversary Reauthorization Act of 2003 and ending on 
     September 30, 2006.''.
       (b) Reports.--
       (1) Small business administration.--
       (A) In general.--Not later than 6 months after the date of 
     enactment of this Act, and every 6 months thereafter until 
     September 30, 2006, the Administrator shall submit a report 
     on the implementation of the program under subsection (a) 
     to--
       (i) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (ii) the Committee on Small Business of the House of 
     Representatives.
       (B) Contents.--The report under subparagraph (A) shall 
     contain--
       (i) the date on which the program is implemented;
       (ii) the date on which the rules are issued pursuant to 
     subsection (c); and
       (iii) the number and dollar amount of loans under the 
     program applied for, approved, and disbursed during the 
     previous 6 months--

       ``(I) with respect to nonprofit child care business; and
       ``(II) with respect to for profit child care business.

       (2) General accounting office.--
       (A) In general.--Not later than March 31, 2006, the 
     Comptroller General of the United States shall submit a 
     report on the child care small business loans authorized by 
     section 502(b)(1)(B) of the Small Business Investment Act of 
     1958, as added by this Act, to--
       (i) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (ii) the Committee on Small Business of the House of 
     Representatives.
       (B) Contents.--The report under subparagraph (A) shall 
     contain information gathered during the first 2 years of the 
     loan program, including--
       (i) an evaluation of the timeliness of the implementation 
     of the loan program;
       (ii) a description of the effectiveness and ease with which 
     certified development companies, lenders, and small 
     businesses have participated in the loan program;
       (iii) a description and assessment of how the loan program 
     was marketed;
       (iv) by location (State, insular area, and District of 
     Columbia) and in total, the number of child care small 
     businesses, categorized by status as a for-profit or non-
     profit business, that--

       (I) applied for loans under the program (and whether it was 
     a new or expanding child care provider);
       (II) were approved for loans under the program; and
       (III) received loan disbursements under the program (and 
     whether they are a new or expanding child care provider); and

       (v) with respect to the businesses described under clause 
     (iv)(III)--

       (I) the number of such businesses in each State, insular 
     area, and District of Columbia, as of the year of enactment 
     of this Act;
       (II) the total amount loaned to such businesses under the 
     program;
       (III) the total number of loans to such businesses under 
     the program;
       (IV) the average loan amount and term;
       (V) the currency rate, delinquencies, defaults, and losses 
     of the loans;
       (VI) the number and percent of children served who receive 
     subsidized assistance; and
       (VII) the number and percent of children served who are low 
     income.

       (C) Access to information.--
       (i) In general.--The Administration shall collect and 
     maintain such information as may be necessary to carry out 
     this paragraph from certified development centers and child 
     care providers, and such centers and providers shall comply 
     with a request for information from the Administration for 
     that purpose.
       (ii) Provision of information to gao.--The Administration 
     shall provide information collected under this subparagraph 
     to the Comptroller General of the United States for purposes 
     of the report required by this paragraph.
       (c) Rulemaking Authority.--Not later than 120 days after 
     the date of enactment of this Act, the Administrator shall 
     issue final rules to carry out the loan program authorized by 
     section 502(b)(1)(B) of the Small Business Investment Act of 
     1958, as added by this Act.

     SEC. 248. DEFINITION OF RURAL AREA.

       Section 501 of the Small Business Investment Act of 1958 
     (15 U.S.C. 695) is amended by adding at the end the 
     following:
       ``(f) Definition of Rural Area.--For purposes of this 
     title, the term `rural area' means any area other than--
       ``(1) a city or town with a population of not less than 
     50,000 inhabitants; or
       ``(2) the urbanized area adjacent to a city or town under 
     subparagraph (A).''.

                    Subtitle F--Surety Bond Program

     SEC. 251. CLARIFICATION OF MAXIMUM SURETY BOND GUARANTEE.

       (a) In General.--Section 411(a)(1) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended by 
     striking ``contract up to'' and inserting ``total work order 
     or contract amount at the time of bond execution that does 
     not exceed''.

     SEC. 252. AUTHORIZATION OF PREFERRED SURETY BOND GUARANTEE 
                   PROGRAM.

       Section 411(a) of the Small Business Investment Act of 1958 
     (15 U.S.C. 694b(a)) is amended by adding at the end the 
     following: ``This paragraph shall remain in effect through 
     September 30, 2006.''.

                       Subtitle G--Miscellaneous

     SEC. 261. COORDINATION OF SBA LOANS.

       Section 7(a)(3) of the Small Business Act (15 U.S.C. 
     636(a)(3)) is amended--
       (1) by inserting ``Total amount of 
     loans.--'' before ``No loan''; and
       (2) by amending subparagraph (A) to read as follows:
       ``(A) if the total amount outstanding and committed (by 
     participation or otherwise) to the borrower under section 
     7(a) would exceed $1,000,000 (or if the gross loan amount 
     would exceed $2,000,000), except as provided in subparagraph 
     (B), plus an amount not to exceed the maximum amount of a 
     development company financing under title V of the Small 
     Business Investment Act of 1958 (15 U.S.C. 695 et seq.), and 
     the Administration shall report to Congress in its annual 
     budget request and performance plan on the number of small 
     business concerns that have financings under both section 
     7(a) and under title V of the Small Business Investment Act 
     of 1958, and the total amount and general performance of such 
     financings.;''.

     SEC. 262. LEASING OPTIONS FOR 7(A) AND 504 BORROWERS.

       (a) 7(a) Loans.--Section 7(a)(28) of the Small Business Act 
     (15 U.S.C. 636(a)(28)) is amended to read as follows:
       ``(28) Leasing.--In addition to such other lease 
     arrangements as may be authorized by the Administration, a 
     borrower under this section may lease, permanently or for a 
     short term, to 1 or more tenants, not more than 40 percent of 
     any property purchased or constructed as part of a project 
     financed under this section if the borrower permanently 
     occupies and uses not less than 60 percent of the total 
     business space of the property.''.
       (b) 504 Loans.--Subsection (b)(5) of section 502 of the 
     Small Business Investment Act of 1958 (15 U.S.C. 696), as 
     redesignated by this Act, is amended to read as follows:
       ``(5) Leasing.--In addition to such other lease 
     arrangements as may be authorized by the Administration, a 
     borrower under this title may lease, permanently or for a 
     short term, to 1 or more tenants, not more than 40 percent of 
     any property purchased or constructed as part of a project 
     financed under this title if the borrower permanently 
     occupies and uses not less than 60 percent of the total 
     business space of the property.''.

     SEC. 263. CALCULATION OF FINANCING LIMITATION FOR SMALL 
                   BUSINESS INVESTMENT COMPANIES.

       Section 306 of the Small Business Investment Act of 1958 
     (15 U.S.C. 686) is amended by inserting after subsection (a) 
     the following:
       ``(b) In calculating the 20 percent limitation under 
     subsection (a) or any guarantee required of a small business 
     investment company by the Administration, only 50 percent of 
     the value of any loans issued under either section 7(a) of 
     the Small Business Act or title V of this Act, which are 
     received by the enterprise in which the small business 
     investment company has issued commitments, shall be taken 
     into consideration, but for any 1 such enterprise, a small 
     business investment company may not simultaneously take 
     advantage of this discounted calculation for loans under both 
     section 7(a) of the Small Business Act (15 U.S.C. 636(a)) and 
     title V of this Act.''.

     SEC. 264. ESTABLISHING ALTERNATIVE SIZE STANDARD.

       Section 3(a)(3) of the Small Business Act (15 U.S.C. 
     632(a)(3) is amended--
       (1) by striking ``When establishing'' and inserting the 
     following: ``Establishment of Size Standards.--
       ``([1]A) In general.--When establishing''; and
       (2) by adding at the end the following:
       ``([2]B) Alternative size standard.--The Administrator 
     shall establish an alternative size standard pursuant to 
     paragraph (2), which--
       ``([A]i) shall be applicable to loan applicants under 
     section 7(a) of this Act or title V of the Small Business 
     Investment Act of 1958 (15 U.S.C. 695 et seq.); and
       ``([B]ii) shall utilize the maximum net worth and maximum 
     net income of the pro-

[[Page S12069]]

     spective borrower as an alternative to the use of industry 
     standards.''.

     SEC. 265. PILOT PROGRAM FOR GUARANTEES ON POOLS OF NON-SBA 
                   LOANS.

       Title IV of the Small Business Investment Act of 1958 (15 
     U.S.C. 692 et seq.) is amended by adding at the end the 
     following:

                ``Part C--Credit Enhancement Guarantees

       ``Sec. 420. (a) The Administration is authorized, upon such 
     terms and conditions as it may prescribe, in order to 
     encourage lenders to increase the availability of small 
     business financing by improving such lenders' access to 
     reasonable sources of funding, to provide a credit 
     enhancement guarantee, or commitment to guarantee, of the 
     timely payment of a portion of the principal and interest on 
     securities issued and managed by not less than 2 and not more 
     than 5 qualified entities authorized and approved by the 
     Administration.
       ``(b)(1) The Administration may provide its credit 
     enhancement guarantees in respect of securities that 
     represent interests in, or other obligations issued by, a 
     trust, pool, or other entity whose assets (other than the 
     Administration's credit enhancement guarantee and credit 
     enhancements provided by other parties) consist of loans 
     made to small business concerns.
       ``(2) All loans under paragraph (1) shall be originated, 
     purchased, or assembled and managed consistent with 
     requirements prescribed by the Administration in connection 
     with this credit enhancement guarantee program.
       ``(3) The Administration shall prescribe requirements to be 
     observed by the issuers and managers of the securities 
     covered by credit enhancement guarantees to ensure the safety 
     and soundness of the credit enhancement guarantee program.
       ``(4) The Administration may authorize affiliates of 
     lenders designated as Preferred Lenders (as defined in the 
     Small Business Act) to become issuers and managers of 
     securities covered by credit enhancement guarantees if not 
     more than 50 percent of the voting and economic ownership 
     interests of any such issuer or manager are owned, directly 
     or indirectly, by any single Preferred Lender or any person 
     directly or indirectly controlling such Preferred Lender.
       ``(c) The full faith and credit of the United States is 
     pledged to the payment of all amounts the Administration may 
     be required to pay as a result of credit enhancement 
     guarantees under this section.
       ``(d)(1) The Administration may issue an amount of credit 
     enhancement guarantees in any fiscal year not exceeding the 
     amount of the business loan and development company debenture 
     guarantee authority available to the Administration for such 
     year under this Act and the Small Business Act.
       ``(2) The Administration shall set the percentage and 
     priority of each credit enhancement guarantee on issued 
     securities so that the amount of the Administration's 
     anticipated net loss (if any) as a result of such guarantee 
     is fully reserved in a credit subsidy account funded in whole 
     or in part by fees collected by the Administration.
       ``(3) The Administration shall charge and collect a fee 
     from the issuer based on the Administration's guaranteed 
     amount of issued securities, but the amount of such fee may 
     not exceed the estimated credit subsidy cost of the 
     Administration's credit enhancement guarantee.
       ``(e) Reporting and Analysis.--
       ``(1) Reporting.--During the development and implementation 
     of the pilot program, the Administrator shall provide a 
     report on the status of the pilot program under this section 
     to Congress in each annual budget request and performance 
     plan.
       ``(2) Analysis and report.--Not later than December 30, 
     2005, the Comptroller General shall--
       ``(A) conduct an analysis of the pilot program under this 
     section; and
       ``(B) submit a report to Congress that contains a summary 
     of the analysis conducted under subparagraph (A) and a 
     description of any effects, not attributable to other causes, 
     of the pilot program on the lending programs under section 
     7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V 
     of this Act.
       ``(3) Implementation.--
       ``(A) Report.--After completing operational guidelines to 
     carry out the pilot program under this section, the 
     Administration shall submit a report, which describes the 
     method in which the pilot program will be implemented, to--
       ``(i) the Committee on Small Business and Entrepreneurship 
     of the Senate; and
       ``(ii) the Committee on Small Business of the House of 
     Representatives.
       ``(B) Timing.--The Administration shall not implement the 
     pilot program under this section until the date that is 50 
     days after the report has been submitted under subparagraph 
     (A).
       ``(f) Sunset Provision.--This section shall remain in 
     effect until September 30, 2006.''.

                Subtitle H--New Markets Venture Capital

     SEC. 271. TIME FRAME FOR RAISING PRIVATE CAPITAL.

       Section 354(d) of the Small Business Investment Act of 1958 
     (15 U.S.C. 689c(d)) is amended--
       (1) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively; and
       (2) by striking ``The Administrator shall'' and all that 
     follows through ``following requirements:'' and inserting the 
     following:
       ``(1) In general.--The Administrator shall give each 
     conditionally approved company 2 years to satisfy the 
     requirements under this subsection. If a conditionally 
     approved company meets these requirements before the end of 
     such 2-year period, the Administrator shall proceed to final 
     approval according to the [following] requirement[:] under 
     subsection (e).''.

     SEC. 272. DEFINITION OF LOW-INCOME GEOGRAPHIC AREA.

       Section 351(3)(A)(ii)[(II)](I) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 689(3)(A)(ii)[(II)](I)) is 
     amended by striking ``[household income] 50 percent or more'' 
     and all that follows and inserting ``[family] the median 
     household income for such tract does not exceed 80 percent of 
     the greater of the statewide median [family] household income 
     or metropolitan area median [family] household income.''.

         Subtitle I--Small Business Investment Company Program

     SEC. 281. INVESTMENT OF EXCESS FUNDS.

       Section 308(b) of the Small Business Investment Act of 1958 
     (15 U.S.C. 687(b)) is amended by striking the last sentence 
     and inserting the following: ``Such companies with 
     outstanding financings are authorized to invest funds not 
     reasonably needed for their operations in--
       ``(1) direct obligations of, or obligations guaranteed as 
     to principal and interest by, the United States;
       ``(2) in [savings account or] certificates of deposit 
     maturing within 1 year [that are issued] after issuance by 
     any institution, whose accounts are [F]federally insured, or 
     in savings accounts of such institution; or
       ``(3) in such other investment securities, mutual funds, or 
     instruments that solely consist of, invest in, or are 
     supported by the instruments described in paragraphs (1) and 
     (2).''.

     SEC. 282. MAXIMUM PRIORITIZED PAYMENT RATE.

       Section 303(g) of the Small Business Investment Act of 1958 
     (15 U.S.C. 683(g)) is amended--
       (1) in the matter preceding paragraph (1),
       [(A)] by striking ``In order'' and inserting ``Guarantees 
     of Participating Securities.--In order''; and
       [(B) by striking ``For purposes of this section,'' and all 
     that follows through ``the extent of earnings.''; and]
       (2) in paragraph (2), by striking ``1.38 percent'' and 
     inserting ``1.7 percent''.

     SEC. 283. IMPROVED DISTRIBUTION REQUIREMENTS.

       Section 303(g)(9) of the Small Business Investment Act of 
     1958 (15 U.S.C. 683(g)(9)) is amended to read as follows:
       ``(9) After making any distribution pursuant to paragraph 
     (8), a company with participating securities outstanding may 
     distribute the balance of income to its investors if--
       ``(A) there are no accumulated and unpaid prioritized 
     payments;
       ``(B) any amounts received by the Administration under this 
     paragraph and paragraph (8) are first applied as prepayment 
     of the principal amount of the outstanding participating 
     securities or debentures of the company at the time of such 
     distribution and then applied to the profit participation 
     under paragraph (11); and
       ``(C) any distributions under this paragraph are made to 
     private investors and to the Administration in the ratio of 
     private capital to leverage as of the date immediately 
     preceding the distribution until the outstanding 
     participating securities or debentures of the company have 
     been paid in full, after which any remaining distributions 
     under this paragraph are made to private investors and to the 
     Administration in the ratio provided for the distribution of 
     profits under paragraph (11).''.

     Subtitle J--Small Business Intermediary Lending Pilot Program

     SEC. 291. SHORT TITLE.

       This subtitle may be cited as the ``Small Business 
     Intermediary Lending Pilot Program Act of 2003''.

     SEC. 292. FINDINGS.

       Congress finds the following:
       (1) Small and emerging businesses, particularly startups 
     and businesses that lack sufficient or conventional 
     collateral, continue to face barriers accessing mid-sized 
     loans in amounts between $35,000 and $200,000, with 
     affordable terms and conditions.
       (2) Consolidation in the banking industry has resulted in a 
     decrease in the number of small, locally controlled banks 
     with not more than $100,000,000 in assets and has changed the 
     method by which banks make small business credit decisions 
     with--
       (A) credit scoring techniques replacing relationship-based 
     lending, which often works to the disadvantage of small or 
     startup businesses that do not conform with a bank's 
     standardized credit formulas; and
       (B) less flexible terms and conditions, which are often 
     necessary for small and emerging businesses.
       (3) In the environment described in paragraphs (1) and (2), 
     non-profit intermediary lenders, including community 
     development corporations, providing financial resources that 
     serve to supplement the small business lending and 
     investments of a bank by--
       (A) providing riskier, up front, or subordinated capital;
       (B) offering flexible terms and underwriting procedures; 
     and
       (C) providing technical assistance to businesses in order 
     to reduce the transaction costs and risk exposure of banks.
       (4) Several Federal programs, including the Microloan 
     Program under section 7(m) of the

[[Page S12070]]

     Small Business Act (15 U.S.C. 636(m)) and the Intermediary 
     Relending Program of the Department of Agriculture, have 
     demonstrated the effectiveness of working through non-profit 
     intermediaries to address the needs of small business 
     concerns that are unable to access capital through 
     conventional sources.
       (5) More than 1,000 non-profit intermediary lenders in the 
     United States are--
       (A) successfully providing financial and technical 
     assistance to small and emerging businesses;
       (B) working with banks and other lenders to leverage 
     additional capital for their business borrowers; and
       (C) creating employment opportunities for low income 
     individuals through their lending and business development 
     activities.

     SEC. 293. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.

       (a) In General.--Section 7(l) of the Small Business Act (15 
     U.S.C. 636(l)) is amended to read as follows:
       ``(l) Small Business Intermediary Lending Program.--
       ``(1) Definitions.--For purposes of this subsection--
       ``(A) the term `intermediary' means an entity that seeks to 
     borrow, or has borrowed, funds from the Administration to 
     make mid-size loans to small business concerns under this 
     subsection that is a private, nonprofit entity, including--
       ``(i) a private, nonprofit community development 
     corporation;
       ``(ii) a consortium of private, nonprofit organizations or 
     nonprofit community development corporations;
       ``(iii) a quasi-governmental economic development entity 
     (such as a planning and development district), other than a 
     State, county, or municipal government; and
       ``(v) an agency of or nonprofit entity established by a 
     Native American Tribal Government; and
       ``(B) the term `mid-size loan' means a fixed rate loan of 
     not less than $35,000 and not more than $200,000, made by an 
     intermediary to a startup, newly established, or growing 
     small business concern.
       ``(2) Establishment.--There is established a 3-year small 
     business intermediary lending pilot program (referred to in 
     this section as the ``Program''), under which the 
     Administration may make direct loans to eligible 
     intermediaries, for the purpose of making fixed interest rate 
     mid-size loans to startup, newly established, and growing 
     small business concerns.
       ``(3) Purposes.--The purposes of the small business 
     intermediary lender pilot program are--
       ``(A) to assist small business concerns in those areas 
     suffering from a lack of credit due to poor economic 
     conditions;
       ``(B) to create employment opportunities for low-income 
     individuals;
       ``(C) to establish a mid-size loan program to be 
     administered by the Small Business Administration to make 
     loans to eligible intermediaries to enable such 
     intermediaries to provide small-scale loans, particularly 
     loans in amounts averaging not more than $150,000, to 
     startup, newly established, or growing small business 
     concerns for working capital or the acquisition of materials, 
     supplies, or equipment;
       ``(D) to test the effectiveness of non-profit 
     intermediaries--
       ``(i) as a delivery system for a mid-size loan program; and
       ``(ii) in addressing the credit needs of small businesses 
     and leveraging other sources of credit; and
       ``(E) to determine the advisability and feasibility of 
     implementing a mid-size loan program nationwide.
       ``(4) Eligibility for participation.--An intermediary shall 
     be eligible to receive loans if the intermediary has at least 
     1 year of experience making loans to startup, newly 
     established, or growing small business concerns.
       ``(5) Loans to intermediaries.--
       ``(A) Application.--Each intermediary desiring a loan under 
     this subsection shall submit an application to the 
     Administration, which describes--
       ``(i) the type of small business concerns to be assisted;
       ``(ii) the size and range of loans to be made;
       ``(iii) the geographic area to be served and its economic, 
     poverty, and unemployment characteristics;
       ``(iv) the status of small business concerns in the area to 
     be served and an analysis of the availability of credit; and
       ``(v) the qualifications of the applicant to carry out the 
     purpose of this subsection.
       ``(B) Loan limits.--Notwithstanding subsection (a)(3), no 
     loan may be made under this subsection if the total amount 
     outstanding and committed to an intermediary from the 
     business loan and investment fund established by this Act 
     would, as a result of such loan, exceed $1,000,000 during the 
     participation of the intermediary in the Program.
       ``(C) Loan duration.--Loans made by the Administration 
     under this subsection shall be for a maximum term of 20 
     years.
       ``(D) Applicable interest rates.--Loans made by the 
     Administration to an intermediary under the Program shall 
     bear an annual interest rate equal to 1.00 percent.
       ``(E) Fees; collateral.--The Administration may not charge 
     any fees or require collateral with respect to any loan made 
     to an intermediary under this subsection.
       ``(F) Leverage.--Any loan to a small business concern shall 
     not exceed 75 percent of the total cost of the project, with 
     the remaining funds being leveraged from other sources, 
     including--
       ``(i) banks or credit unions;
       ``(ii) community development financial institutions; and
       ``(iii) other sources with funds available to the 
     intermediary lender.
       ``(G) Delayed payments.--The Administration shall not 
     require the repayment of principal or interest on a loan made 
     to an intermediary under this section during the first 2 
     years of the loan.
       ``(6) Program funding for mid-size loans.--
       ``(A) Number of participants.--Under the Program, the 
     Administration may provide loans, on a competitive basis, to 
     not more than 20 intermediaries.
       ``(B) Equitable distribution of intermediaries.--The 
     Administration shall select and provide funding under the 
     Program to such intermediaries as will ensure geographic 
     diversity and representation of urban and rural communities.
       ``(7) Report to congress.--
       ``(A) Initial report.--Not later than 30 months after the 
     date of enactment of the Small Business Administration 50th 
     Anniversary Reauthorization Act of 2003, the Administration 
     shall submit a report containing an evaluation of the 
     effectiveness of the Program to--
       ``(i) the Committee on Small Business and Entrepreneurship 
     of the Senate; and
       ``(ii) the Committee on Small Business of the House of 
     Representatives.
       ``(B) Annual report.--Not later than 12 months after the 
     date of enactment of the Small Business Administration 50th 
     Anniversary Reauthorization Act of 2003, and each year 
     thereafter, the Administration shall submit an annual report 
     containing an evaluation of the effectiveness of the Program 
     to the Committees described in subparagraph (A).
       ``(C) Contents.--The reports submitted under subparagraphs 
     (A) and (B) shall include--
       ``(i) the numbers and locations of the intermediaries 
     receiving funds to provide mid-size loans;
       ``(ii) the amounts of each loan to an intermediary;
       ``(iii) the numbers and amounts of mid-size loans made by 
     intermediaries to small business concerns;
       ``(iv) the repayment history of each intermediary;
       ``(v) a description of the loan portfolio of each 
     intermediary, including the extent to which it provides mid-
     size loans to small business concerns in rural and 
     economically depressed areas;
       ``(vi) an estimate of the number of low-income individuals 
     who have been employed as a direct result of the Program; and
       ``(vii) any recommendations for legislative changes that 
     would improve the operation of the Program.''.
       (b) Rulemaking Authority.--Not later than 180 days after 
     the date of enactment of this Act, the Administrator shall 
     issue regulations to carry out the amendment made by 
     subsection (a).
       (c) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     such sums as may be necessary for each of the fiscal years 
     2004 through 2006 to provide $20,000,000 in loans under 
     section 7(l) of the Small Business Act, as amended by 
     subsection (a).
       (2) Availability.--Any amounts appropriated pursuant to 
     paragraph (1) shall remain available until expended.

            TITLE III--ENTREPRENEURIAL DEVELOPMENT PROGRAMS

           Subtitle A--Office of Entrepreneurial Development

     SEC. 301. SERVICE CORPS OF RETIRED EXECUTIVES.

       (a) In General.--Section 8(b)(1)(B) of the Small Business 
     Act (15 U.S.C. 637(b)(1)(B)) is amended--
       (1) by striking ``this Act; and to'', and inserting ``this 
     Act. To'';
       (2) by striking ``may maintain at its headquarters'' and 
     all that follows through ``That any'' and inserting ``shall 
     maintain at its headquarters and pay the salaries, benefits, 
     and expenses of a volunteer and professional staff to manage 
     and oversee the program. Any''; and
       (3) by striking the period at the end and inserting the 
     following: ``and the management of the contributions 
     received.''.
       (b) Regulations.--The Administration shall, not later than 
     180 days after the date of enactment of this Act, promulgate 
     regulations to carry out the amendments made by subsection 
     (a).
       (c) 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, 108 Stat. 4190) is amended by striking ``September 30, 
     2003'' and inserting ``September 30, 2006''.

     SEC. 302. SMALL BUSINESS DEVELOPMENT CENTER PROGRAM.

       (a) Term Change.--Section 21(k) of the Small Business Act 
     (15 U.S.C. 648(k)) is amended--
       (1) by striking ``Certification'' each place it appears and 
     inserting ``Accreditation''; and
       (2) by striking ``certification'' each place it appears and 
     inserting ``accreditation''.
       (b) Privacy Requirements.--Section 21(a) of the Small 
     Business Act is amended by adding at the end the following:
       ``(7) Privacy requirements.--
       ``(A) In general.--A small business development center, 
     consortium of small business development centers, or 
     contractor or agent of a small business development center 
     may not disclose the name, address, or telephone number of 
     any individual or small business concern receiving assistance 
     under this section without the consent of such individual or 
     small business concern, unless--
       ``(i) the Administrator is ordered to make such a 
     disclosure by a court in any civil or criminal enforcement 
     action initiated by a Federal or State agency; or

[[Page S12071]]

       ``(ii) the Administrator considers such a disclosure to be 
     necessary for the purpose of conducting a financial audit of 
     a small business development center, but a disclosure under 
     this clause shall be limited to the information necessary for 
     such audit.
       ``(B) Administration use of information.--This section 
     shall not--
       ``(i) restrict Administration access to program activity 
     data; or
       ``(ii) prevent the Administration from using client 
     information (other than the information described in 
     subparagraph (A)) to conduct client surveys.
       ``(C) Regulations.--The Administrator shall issue 
     regulations to establish standards for requiring disclosures 
     during a financial audit under subparagraph (A)(ii).''.
       (c) Conforming Amendment.--Section 20(a)(1) of the Small 
     Business Act (15 U.S.C. 631 note) is amended by striking 
     ``certification'' each place it appears and inserting 
     ``accreditation''.

     SEC. 303. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL 
                   BUSINESS ACT.

       (a) Program Reauthorization.--Subtitle C of title I of the 
     Riegle Community Development and Regulatory Improvement Act 
     of 1994 (15 U.S.C. 6901 note) is amended to read as follows:

     ``SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Administration.--The term `Administration' means the 
     Small Business Administration.
       ``(2) Administrator.--The term `Administrator' means the 
     Administrator of the Small Business Administration.
       ``(3) Capacity building services.--The term `capacity 
     building services' means services provided to an organization 
     that is, or that is in the process of becoming, a 
     microenterprise development organization or program, for the 
     purpose of enhancing its ability to provide training and 
     services to disadvantaged entrepreneurs.
       ``(4) Collaborative.--The term `collaborative' means 2 or 
     more nonprofit entities that agree to act jointly as a 
     qualified organization under this section.
       ``(5) Disadvantaged entrepreneur.--The term `disadvantaged 
     entrepreneur' means a microentrepreneur that--
       ``(A) is a low-income person;
       ``(B) is a very low-income person; or
       ``(C) lacks adequate access to capital or other resources 
     essential for business success, or is economically 
     disadvantaged, as determined by the Administrator.
       ``(6) Indian tribe.--The term `Indian tribe' has the same 
     meaning as in section 4(a) of the Indian Self-Determination 
     and Education Assistance Act.
       ``(7) Intermediary.--The term `intermediary' means a 
     private, nonprofit entity that seeks to serve microenterprise 
     development organizations and programs, as authorized under 
     subsection (d).
       ``(8) Low-income person.--The term `low-income person' 
     means having an income, adjusted for family size, of not more 
     than--
       ``(A) for metropolitan areas, 80 percent of the area median 
     income; and
       ``(B) for nonmetropolitan areas, the greater of--
       ``(i) 80 percent of the area median income; or
       ``(ii) 80 percent of the statewide nonmetropolitan area 
     median income.
       ``(9) Microentrepreneur.--The term `microentrepreneur' 
     means the owner or developer of a microenterprise.
       ``(10) Microenterprise.--The term `microenterprise' means a 
     sole proprietorship, partnership, or corporation that--
       ``(A) has fewer than 5 employees; and
       ``(B) generally lacks access to conventional loans, equity, 
     or other banking services.
       ``(11) Microenterprise development organization or 
     program.--The term `microenterprise development organization 
     or program' means a nonprofit entity, or a program 
     administered by such an entity, including community 
     development corporations or other nonprofit development 
     organizations and social service organizations, that provides 
     services to disadvantaged entrepreneurs.
       ``(12) Training and technical assistance.--The term 
     `training and technical assistance' means services and 
     support provided to disadvantaged entrepreneurs, such as 
     assistance for the purpose of enhancing business planning, 
     marketing, management, financial management skills, and 
     assistance for the purpose of accessing financial services.
       ``(13) Very low-income person.--The term `very low-income 
     person' means having an income, adjusted for family size, of 
     not more than 150 percent of the poverty line (as defined in 
     section 673(2) of the Community Services Block Grant Act (42 
     U.S.C. 9902(2)), including any revision required by that 
     section).
       ``(b) Establishment of Program.--The Administrator shall 
     establish a microenterprise technical assistance and capacity 
     building grant program to provide assistance from the 
     Administration in the form of grants to qualified 
     organizations in accordance with this section.
       ``(c) Uses of Assistance.--A qualified organization shall 
     use grants made under this section--
       ``(1) to provide training and technical assistance to 
     disadvantaged entrepreneurs;
       ``(2) to provide training and capacity building services to 
     microenterprise development organizations and programs and 
     groups of such organizations to assist such organizations and 
     programs in developing microenterprise training and services;
       ``(3) to aid in researching and developing the best 
     practices in the field of microenterprise and technical 
     assistance programs for disadvantaged entrepreneurs; and
       ``(4) for such other activities as the Administrator 
     determines are consistent with the purposes of this section.
       ``(d) Qualified Organizations.--For purposes of eligibility 
     for assistance under this section, a qualified organization 
     shall be--
       ``(1) a nonprofit microenterprise development organization 
     or program (or a group or collaborative thereof) that has a 
     demonstrated record of delivering microenterprise services to 
     disadvantaged entrepreneurs;
       ``(2) an intermediary;
       ``(3) a microenterprise development organization or program 
     that is accountable to a local community, working in 
     conjunction with a State or local government or Indian tribe; 
     or
       ``(4) an Indian tribe acting on its own, if the Indian 
     tribe can certify that no private organization or program 
     referred to in this subsection exists within its 
     jurisdiction.
       ``(e) Allocation of Assistance; Subgrants.--
       ``(1) Allocation of assistance.--
       ``(A) In general.--The Administrator shall allocate 
     assistance from the Administration under this section to 
     ensure that--
       ``(i) activities described in subsection (c)(1) are funded 
     using not less than 75 percent of amounts made available for 
     such assistance; and
       ``(ii) activities described in subsection (c)(2) are funded 
     using not less than 15 percent of amounts made available for 
     such assistance.
       ``(B) Limit on individual assistance.--No single person may 
     receive more than 10 percent of the total funds appropriated 
     under this section in a single fiscal year.
       ``(2) Targeted assistance.--The Administrator shall ensure 
     that not less than 50 percent of the grants made under this 
     section are used to benefit very low-income persons, 
     including those residing on Indian reservations.
       ``(3) Subgrants authorized.--
       ``(A) In general.--A qualified organization receiving 
     assistance under this section may provide grants using that 
     assistance to qualified small and emerging microenterprise 
     organizations and programs, subject to such rules and 
     regulations as the Administrator determines to be 
     appropriate.
       ``(B) Limit on administrative expenses.--Not more than 7.5 
     percent of assistance received by a qualified organization 
     under this section may be used for administrative expenses in 
     connection with the making of subgrants under subparagraph 
     (A).
       ``(4) Diversity.--In making grants under this section, the 
     Administrator shall ensure that grant recipients include both 
     large and small microenterprise organizations, serving urban, 
     rural, and Indian tribal communities serving diverse 
     populations.
       ``(5) Prohibition on preferential consideration of certain 
     sba program participants.--In making grants under this 
     section, the Administrator shall ensure that any application 
     made by a qualified organization that is a participant in the 
     program established under section 7(m) of the Small Business 
     Act does not receive preferential consideration over 
     applications from other qualified organizations that are not 
     participants in such program.
       ``(f) Matching Requirements.--
       ``(1) In general.--Financial assistance under this section 
     shall be matched with funds from sources other than the 
     Federal Government on the basis of not less than 50 percent 
     of each dollar provided by the Administration.
       ``(2) Sources of matching funds.--Fees, grants, gifts, 
     funds from loan sources, and in-kind resources of a grant 
     recipient from public or private sources may be used to 
     comply with the matching requirement in paragraph (1).
       ``(3) Exception.--
       ``(A) In general.--In the case of an applicant for 
     assistance under this section with severe constraints on 
     available sources of matching funds, the Administrator may 
     reduce or eliminate the matching requirements of paragraph 
     (1).
       ``(B) Limitation.--Not more than 10 percent of the total 
     funds made available from the Administration in any fiscal 
     year to carry out this section may be excepted from the 
     matching requirements of paragraph (1), as authorized by 
     subparagraph (A) of this paragraph.
       ``(g) Applications for Assistance.--An application for 
     assistance under this section shall be submitted in such form 
     and in accordance with such procedures as the Administrator 
     shall establish.
       ``(h) Recordkeeping and Reporting.--
       ``(1) In general.--Each organization that receives 
     assistance from the Administration in accordance with this 
     section shall--
       ``(A) submit to the Administration not less than once in 
     every 18-month period, financial statements audited by an 
     independent certified public accountant;
       ``(B) submit an annual report to the Administration on its 
     activities; and
       ``(C) keep such records as may be necessary to disclose the 
     manner in which any assistance under this section is used.
       ``(2) Access.--The Administration shall have access upon 
     request, for the purposes of determining compliance with this 
     section, to any records of any organization that receives 
     assistance from the Administration in accordance with this 
     section.
       ``(3) Data collection.--Each organization that receives 
     assistance from the Administration in accordance with this 
     section shall collect information relating to, as 
     applicable--
       ``(A) the number of individuals counseled or trained;
       ``(B) the number of hours of counseling provided;
       ``(C) the number of startup small business concerns formed;
       ``(D) the number of small business concerns expanded;
       ``(E) the number of low-income individuals counseled or 
     trained; and

[[Page S12072]]

       ``(F) the number of very low-income individuals counseled 
     or trained.
       ``(i) Authorization.--There are authorized to be 
     appropriated to the Administrator, to carry out the 
     provisions of this section, to remain available until 
     expended--
       ``(1) $15,000,000 for fiscal year 2004;
       ``(2) $15,000,000 for fiscal year 2005; and
       ``(3) $15,000,000 for fiscal year 2006.''.
       (b) Transfer Provisions.--
       (1) Small business act amendments.--The Small Business Act 
     (15 U.S.C. 631 et seq.) is amended by redesignating section 
     37, as added by this Act, as section 38.
       (2) Transfer.--Section 37 of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (15 U.S.C. 
     6901 note), as so designated by subsection (a) of this 
     section, is transferred to, and inserted after, section 36 of 
     the Small Business Act, as added by this Act.
       (c) References.--All references in Federal law to the 
     ``Program for Investment in Microentrepreneurs Act of 1999'' 
     or the ``PRIME Act'' shall be deemed to be references to 
     section 37 of the Small Business Act, as added by this 
     section.
       (d) Rule of Construction.--Nothing in this section or the 
     amendments made by this section shall affect any grant or 
     assistance provided under the Program for Investment in 
     Microentrepreneurs Act of 1999, before the date of enactment 
     of this Act, and any such grant or assistance shall be 
     subject to the Program for Investment in Microentrepreneurs 
     Act of 1999, as in effect on the day before the date of 
     enactment of this Act.

         Subtitle B--Women's Small Business Ownership Programs

     SEC. 311. OFFICE OF WOMEN'S BUSINESS OWNERSHIP.

       Section 29(g) of the Small Business Act (15 U.S.C. 656(g)) 
     is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (B)(i), by striking ``in the areas'' 
     and all that follows through the end of subclause (I), and 
     inserting the following: ``to address issues concerning 
     operations, manufacturing, technology, finance, retail and 
     product sales, international trade, and other disciplines 
     required for--

       ``(I) starting, operating, and growing a small business 
     concern;''; and

       (B) in subparagraph (C), by inserting ``, the National 
     Women's Business Council, and any association of women's 
     business centers, as defined in subsection (a)'' before the 
     period at the end; and
       (2) by adding at the end the following:
       ``(3) Programs and services for women-owned small 
     businesses.--The Assistant Administrator, in consultation 
     with the National Women's Business Council, the Interagency 
     Committee on Women's Business Enterprise, and 1 or more 
     associations of women's business centers, shall develop 
     programs and services for women-owned businesses (as defined 
     in section 408 of the Women's Business Ownership Act of 1988 
     (15 U.S.C. 631 note)) in business areas, which may include--
       ``(A) manufacturing;
       ``(B) technology;
       ``(C) professional services;
       ``(D) retail and product sales;
       ``(E) travel and tourism;
       ``(F) international trade; and
       ``(G) Federal Government contract business development.
       ``(4) Training.--The Administration shall provide annual 
     programmatic and financial oversight training for women's 
     business ownership representatives and district office 
     technical representatives of the Administration to enable 
     these representatives to carry out their responsibilities 
     under this section.
       ``(5) Grant program improvement.--The Administration shall 
     improve the women's business center grant proposal process 
     and the programmatic and financial oversight process by--
       ``(A) providing notice to the public of each women's 
     business center grant announcement for an initial and renewal 
     grant, not later than 6 months before awarding such grant;
       ``(B) providing notice to grant applicants and recipients 
     of program evaluation criteria, not later than 12 months 
     before any such evaluation;
       ``(C) reducing paperwork and reporting requirements for 
     grant applicants and recipients;
       ``(D) standardizing the oversight and review process of the 
     Administration; and
       ``(E) providing to each women's business center, not later 
     than 30 days after the completion of a site visit at that 
     center, a copy of site visit reports and evaluation reports 
     prepared by district office technical representatives or 
     Administration officials.''.

     SEC. 312. WOMEN'S BUSINESS CENTER PROGRAM.

       (a) Women's Business Center Grants Program.--Section 29 of 
     the Small Business Act (15 U.S.C. 656) is amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (2), (3), and (4), as 
     paragraphs (3), (4), and (5), respectively; and
       (B) by inserting after paragraph (1) the following:
       ``(2) the term `association of women's business centers' 
     means an organization that represents not less than 30 
     percent of the women's business centers that are 
     participating in a program under this section and whose 
     primary purpose is to represent women's business centers;''; 
     and
       (2) by striking subsections (b) through (f) and inserting 
     the following:
       ``(b) Grants Authorized.--
       ``(1) In general.--The Administration may award initial and 
     renewal grants of not more than $150,000 per year, which 
     shall be known as `women's business center grants', to 
     private nonprofit organizations to conduct projects for the 
     benefit of small business concerns owned and controlled by 
     women. At the end of the initial 4-year grant period, and 
     every 3 years thereafter, the grant recipient may apply to 
     renew the grant in accordance with this subsection and 
     subsection (e)(2). In the event that the Administration has 
     insufficient funds to provide grants of $150,000, for each 
     eligible women's business center, available funds shall be 
     allocated evenly to eligible centers, unless any center 
     requests a lower amount than the allocable amount.
       ``(2) Cooperative agreement authority.--
       ``(A) In general.--The Administration may enter into 
     Federal cooperative agreements with grant recipients under 
     this subsection to perform the services described under 
     paragraph (3) only to the extent and in the amount provided 
     by appropriated funds.
       ``(B) Termination.--
       ``(i) In general.--If any grant recipient under this 
     subsection does not fulfill its grant obligations, after 
     advanced notification, during the period of the grant, the 
     Administration may terminate the grant.
       ``(ii) Exception.--Notwithstanding a grant recipient's 
     violation of a grant obligation under this section, the 
     Administration may continue to fund the grant if the grant 
     recipient is making a good faith effort to comply with such 
     obligation.
       ``(3) Use of funds.--Grants awarded under paragraph (1) may 
     be used to provide training and counseling in the areas of--
       ``(A) pre-business, business startup, and business 
     operations;
       ``(B) financial planning assistance;
       ``(C) procurement assistance;
       ``(D) management assistance; and
       ``(E) marketing assistance.
       ``(4) Matching requirement.--
       ``(A) Women's business center grants.--As a condition of 
     receiving financial assistance under this section, the grant 
     recipient 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:
       ``(i) In the first and second years, 1 non-Federal dollar 
     for each 2 Federal dollars provided under the 4-year grant.
       ``(ii) In the third and fourth years, 1 non-Federal dollar 
     for each Federal dollar provided under the 4-year grant.
       ``(iii) In each renewal period, 1 non-Federal dollar for 
     each Federal dollar provided under the 3-year grant.
       ``(B) Form of non-federal contributions.--Not more than \1/
     2\ 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.
       ``(C) Failure to obtain non-federal funding.--
       ``(i) Advance disbursements.--If any grant recipient fails 
     to obtain the required non-Federal contribution during any 
     project year, it shall not be eligible for advance 
     disbursements pursuant to subparagraph (D) during the 
     remainder of that project year.
       ``(ii) Ability to obtain non-federal funding.--Before 
     approving assistance to a grant recipient that has failed to 
     obtain the required non-Federal contribution for any other 
     projects under this Act, the Administration shall require the 
     grant recipient to certify that it will be able to obtain the 
     requisite non-Federal funding and enter a written finding 
     setting forth the reasons for making such determination.
       ``(D) Form of federal contributions.--The financial 
     assistance authorized pursuant to this section may be made by 
     grant 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 grant recipient after 
     notice of the award has been issued and before the non-
     Federal sector matching funds are obtained.
       ``(5) Application for an initial grant.--Each organization 
     desiring an initial grant under this subsection, shall submit 
     to the Administration an application that contains--
       ``(A) a certification that the applicant--
       ``(i) is a private nonprofit organization;
       ``(ii) has designated an executive director or program 
     manager, who may be compensated from grant funds or other 
     sources, to manage the center; and
       ``(iii) as a condition of receiving a grant under this 
     subsection, agrees--

       ``(I) to receive a site visit as part of the final 
     selection process;
       ``(II) to undergo an annual programmatic and financial 
     examination; and
       ``(III) to the maximum extent practicable, to remedy any 
     problems identified pursuant to the site visit or examination 
     under subclauses (I) and (II);

       ``(B) information demonstrating that the applicant has the 
     ability and resources to meet the needs of the market to be 
     served by the women's business center site for which an 
     initial grant is sought, including the ability to comply with 
     the matching requirement under paragraph (4);
       ``(C) information relating to assistance to be provided by 
     the women's business center site for which an initial grant 
     is sought in the area in which the site is located;
       ``(D) information demonstrating the effective experience of 
     the applicant in--

[[Page S12073]]

       ``(i) conducting financial, management, and marketing 
     assistance programs, as described under paragraph (3), which 
     are designed to teach or upgrade the business skills of women 
     who are business owners or potential business owners;
       ``(ii) providing training and services to a representative 
     number of women who are both socially and economically 
     disadvantaged; and
       ``(iii) using resource partners of the Administration and 
     other entities, such as universities;
       ``(E) a 4-year plan that projects the ability of the 
     women's business center site for which an initial grant is 
     sought--
       ``(i) to serve women business owners or potential owners in 
     the future by improving training and counseling activities; 
     and
       ``(ii) to provide training and services to a representative 
     number of women who are both socially and economically 
     disadvantaged; and
       ``(F) any additional information that the Administration 
     may reasonably require.
       ``(6) Review and approval of applications for an initial 
     grant.--
       ``(A) In general.--The Administration shall--
       ``(i) review each application submitted under paragraph (5) 
     based on the information provided in such paragraph and the 
     criteria set forth under subparagraph (B); and
       ``(ii) as part of the final selection process, conduct a 
     site visit at each women's business center for which an 
     initial grant is sought.
       ``(B) Selection criteria.--
       ``(i) In general.--The Administration shall evaluate 
     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.
       ``(ii) Required criteria.--The selection criteria for an 
     initial grant under clause (i) shall include--

       ``(I) the experience of the applicant in conducting 
     programs or ongoing efforts designed to teach or upgrade the 
     business skills of women business owners or potential owners;
       ``(II) the ability of the applicant to commence a project 
     within a minimum amount of time;
       ``(III) the ability of the applicant to provide training 
     and services to a representative number of women who are both 
     socially and economically disadvantaged; and
       ``(IV) the location for the women's business center site 
     proposed by the applicant.

       ``(C) Record retention.--The Administration shall maintain 
     a copy of each application submitted under this paragraph for 
     not less than 7 years.
       ``(7) Application for a renewal grant.--Each organization 
     desiring a renewal grant under this subsection, shall submit 
     to the Administration, not later than 3 months before the 
     expiration of an existing grant under this subsection, an 
     application that contains--
       ``(A) a certification that the applicant--
       ``(i) is a private nonprofit organization;
       ``(ii) has designated an executive director or program 
     manager to manage the center; and
       ``(iii) as a condition of receiving a grant under this 
     subsection, agrees--

       ``(I) to receive a site visit as part of the final 
     selection process;
       ``(II) to submit, for the preceding 2 years, annual 
     programmatic and financial examination reports or certified 
     copies of the applicant's compliance supplemental audits 
     under OMB Circular A-133; and
       ``(III) to the maximum extent practicable, to remedy any 
     problems identified pursuant to the site visit or examination 
     under subclauses (I) and (II);

       ``(B) information demonstrating that the applicant has the 
     ability and resources to meet the needs of the market to be 
     served by the women's business center site for which a 
     renewal grant is sought, including the ability to comply with 
     the matching requirement under paragraph (4);
       ``(C) information relating to assistance to be provided by 
     the women's business center site for which a renewal grant is 
     sought in the area in which the site is located;
       ``(D) information demonstrating the utilization of resource 
     partners of the Administration and other entities;
       ``(E) a 3-year plan that projects the ability of the 
     women's business center site for which a renewal grant is 
     sought--
       ``(i) to serve women business owners or potential owners in 
     the future by improving training and counseling activities; 
     and
       ``(ii) to provide training and services to a representative 
     number of women who are both socially and economically 
     disadvantaged; and
       ``(F) any additional information that the Administration 
     may reasonably require.
       ``(8) Review and approval of applications for a renewal 
     grant.--
       ``(A) In general.--The Administration shall--
       ``(i) review each application submitted under paragraph (7) 
     based on the information provided in such paragraph and 
     the criteria set forth under subparagraph (B); and
       ``(ii) as part of the final selection process, conduct a 
     site visit at each women's business center for which a 
     renewal grant is sought.
       ``(B) Selection criteria.--The Administration shall 
     evaluate 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.
       ``(C) Conditions for continued funding.--In determining 
     whether to renew a grant or cooperative agreement with a 
     women's business center, the Administration--
       ``(i) shall consider the results of the most recent 
     evaluation of the center, and, to a lesser extent, previous 
     evaluations; and
       ``(ii) may withhold such renewal, if the Administration 
     determines that the center has failed to provide the 
     information required to be provided under this subsection, or 
     the information provided by the center is inadequate.
       ``(D) Continuing grant and cooperative agreement 
     authority.--
       ``(i) In general.--The authority of the Administrator to 
     enter into grants or cooperative agreements under this 
     subsection shall be in effect for each fiscal year only to 
     the extent and in the amounts as are provided in advance in 
     appropriations Acts.
       ``(ii) Renewal.--After the Administrator has entered into a 
     grant or cooperative agreement with any women's business 
     center under this subsection, it shall not suspend, 
     terminate, or fail to renew or extend any such grant or 
     cooperative agreement unless the Administrator provides the 
     center with written notification setting forth the reasons 
     therefore and affords the center an opportunity for a 
     hearing, appeal, or other administrative proceeding under 
     chapter 5 of title 5, United States Code.
       ``(E) Record retention.--The Administration shall maintain 
     a copy of each application submitted under this paragraph for 
     not less than 7 years.
       ``(9) Data collection.--Consistent with the annual report 
     to Congress under subsection (g), each women's business 
     center site that is awarded an initial or renewal grant shall 
     collect information relating to--
       ``(A) the number of individuals counseled or trained;
       ``(B) the number of hours of counseling provided;
       ``(C) the number of workshops conducted;
       ``(D) the number of startup small business concerns formed; 
     and
       ``(E) the number of jobs created or maintained at assisted 
     small business concerns.
       ``(10) Privacy requirements.--
       ``(A) In general.--A women's business center may not 
     disclose the name, address, or telephone number of any 
     individual or small business concern receiving assistance 
     under this section without the consent of such individual or 
     small business concern unless--
       ``(i) the Administrator is ordered to make such a 
     disclosure by a court in any civil or criminal enforcement 
     action initiated by a Federal or State agency; or
       ``(ii) the Administrator considers such a disclosure to be 
     necessary for the purpose of conducting a financial audit of 
     a small business development center, but a disclosure under 
     this clause shall be limited to the information necessary for 
     such audit.
       ``(B) Administration use of information.--This section 
     shall not--
       ``(i) restrict Administration access to program activity 
     data; or
       ``(ii) prevent the Administration from using client 
     information (other than the information described in 
     subparagraph (A)) to conduct client surveys.
       ``(C) Regulations.--The Administrator shall issue 
     regulations to establish standards for requiring disclosures 
     during a financial audit under subparagraph (A)(ii).
       ``(11) Transition rules.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, a grant or cooperative agreement that was awarded as an 
     eligible sustainability grant, from amounts appropriated for 
     fiscal year 2003, to operate a women's business center, shall 
     remain in full force and effect under the terms, and for the 
     duration, of such agreement, subject to the grant limitation 
     in paragraph (1).
       ``(B) Extension.--If the sustainability grant under 
     subparagraph (A) is scheduled to expire not later than June 
     30, 2005, a 1-year extension shall be granted without any 
     interruption of funding, subject to the grant limitation in 
     paragraph (1).
       ``(C) Effect on certain existing projects and renewal 
     authority.--A project being conducted by a women's business 
     center under this subsection on the day before the date of 
     enactment of the Small Business Administration 50th 
     Anniversary Reauthorization Act of 2003--
       ``(i) as a 5-year project, shall remain in full force and 
     effect under the terms and for the duration of that 
     agreement; and
       ``(ii) shall be eligible to apply for a 3-year renewal 
     grant funded at a level equal to not more than $150,000 per 
     year.
       ``(c) Associations of Women's Business Centers.--
       ``(1) Recognition.--The Administration shall recognize the 
     existence and activities of any association of women's 
     business centers established to address matters of common 
     concern.
       ``(2) Consultation.--The Administration shall consult with 
     each association of women's business centers (as defined in 
     subsection (a)) to develop--
       ``(A) a training program for the staff of the women's 
     business centers and the Administration; and
       ``(B) recommendations to improve the policies and 
     procedures for governing the general operations and 
     administration of the Women's Business Center Program, 
     including

[[Page S12074]]

     grant program improvements under subsection (g)(5).''.
       (b) Conforming Amendments.--Section 29 of the Small 
     Business Act (15 U.S.C. 656) is amended--
       (1) by redesignating subsections (g), (h), (i), (j), and 
     (k) as subsections (d), (e), (f), (g), and (h), respectively;
       (2) in subsection (e)(2), as redesignated by paragraph (1) 
     of this subsection, by striking ``to award a contract (as a 
     sustainability grant) under subsection (l) or'';
       (3) in subsection (g)(1), as redesignated by paragraph (1) 
     of this subsection, by striking ``The Administration'' and 
     inserting ``Not later than November 1st of each year, the 
     Administration'';
       (4) in subsection (h), as redesignated by paragraph (1) of 
     this subsection--
       (A) by amending paragraph (1) to read as follows:
       ``(1) In general.--There are authorized to be appropriated 
     to carry out the provisions of this section, to remain 
     available until expended--
       ``(A) $15,000,000 for fiscal year 2004, of which $500,000 
     may be used to provide supplemental sustainability grants to 
     women's business centers, except that no such center may 
     receive more than a total of $125,000 in grant funding for 
     the grant period beginning on July 1, 2003 and ending on June 
     30, 2004;
       ``(B) $16,000,000 for fiscal year 2005; and
       ``(C) $17,500,000 for fiscal year 2006.'';
       (B) by amending paragraph (2) to read as follows:
       ``(2) Use of amounts.--Amounts made available under this 
     subsection 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.''; and
       (C) by striking paragraph (4); and
       (5) by striking subsection (l).

     SEC. 313. NATIONAL WOMEN'S BUSINESS COUNCIL.

       (a) Cosponsorship Authority.--Section 406 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. [631 note]7106) is 
     amended by adding at the end the following:
       ``(f) Cosponsorship Authority.--The Council is authorized 
     to enter into agreements as cosponsors with public and 
     private entities, in the same manner as is provided in 
     section 8(b)(1)(A) of the Small Business Act (15 U.S.C. 
     637(b)(1)(A)), to carry out its duties under this section.''.
       (b) Membership.--Section 407(f) of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. [631 note]7107(f)) is 
     amended by adding at the end the following:
       ``(3) Representation of member organizations.--
     Notwithstanding subsection (b), a national women's business 
     organization or small business that is represented on the 
     Council may, in consultation with the chairperson of the 
     Council, replace its representative member on the Council at 
     any time during the service term to which that member was 
     appointed.''.
       (c) Establishment of Committees.--[The]Title IV of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. [631 
     note]7101 et seq.) is amended by inserting after section 
     [407]410, the following new section:

     ``SEC. [408]411. COMMITTEES.

       ``(a) Establishment.--There are established within the 
     Council--
       ``(1) the Committee on Manufacturing, Technology, and 
     Professional Services;
       ``(2) the Committee on Travel, Tourism, Product and Retail 
     Sales, and International Trade; and
       ``(3) the Committee on Federal Procurement and Contracting.
       ``(b) Duties.--The Committees established under subsection 
     (a) shall perform such duties as the chairperson shall 
     direct.''.
       (d) Clearinghouse for Historical Documents.--Section 409 of 
     the Women's Business Ownership Act of 1988 (15 U.S.C. 631 
     note7109) is amended by adding at the end the following:
       ``(c) Clearinghouse for Historical Documents.--The Council 
     shall serve as a clearinghouse for information on small 
     businesses owned and controlled by women, including research 
     conducted by other organizations and individuals relating to 
     ownership by women of small businesses in the United 
     States.''.
       (e) Authorization of Appropriations.--Section 410(a) of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. [631 
     note]7110(a)) is amended by striking ``2001 through 2003, of 
     which $550,000'' and inserting ``2004 through 2006, of which 
     at least 30 percent''.

     SEC. 314. INTERAGENCY COMMITTEE ON WOMEN'S BUSINESS 
                   ENTERPRISE.

       (a) Chairperson.--Section 403(b) of the Women's Business 
     Ownership Act of 1988 (15 U.S.C. [631 note]7103(b)) is 
     amended--
       (1) by striking ``Not later'' and inserting the following:
       ``(1) In general.--Not later''; and
       (2) by adding at the end the following:
       ``(2) Vacancy.--In the event that a chairperson is not 
     appointed under paragraph (1), the Deputy Administrator of 
     the Small Business Administration shall serve as acting 
     chairperson of the Interagency Committee until a chairperson 
     is appointed under paragraph (1).''.
       (b) Policy Advisory Group.--Section 401 of the Women's 
     Business Ownership Act of 1988 (15 U.S.C. [631 note]7101) is 
     amended--
       (1) by striking ``There'' and inserting the following:
       ``(a) In General.--There''; and
       (2) by adding at the end the following:
       ``(b) Policy Advisory Group.--
       ``(1) Establishment.--There is established a Policy 
     Advisory Group to assist the chairperson in developing 
     policies and programs under this Act.
       ``(2) Membership.--The Policy Advisory Group shall be 
     composed of 7 policy making officials, of whom--
       ``(A) 1 shall be a representative of the Small Business 
     Administration;
       ``(B) 1 shall be a representative of the Department of 
     Commerce;
       ``(C) 1 shall be a representative of the Department of 
     Labor;
       ``(D) 1 shall be a representative of the Department of 
     Defense;
       ``(E) 1 shall be a representative of the Department of the 
     Treasury; and
       ``(F) 2 shall be representatives of the National Women's 
     Business Council.''.
       (c) Establishment of Subcommittees.--Section 401 of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. [631 
     note]7101), as amended by subsection (b), is further amended 
     by adding at the end the following:
       ``(c) Subcommittees.--
       ``(1) Establishment.--There are established--
       ``(A) the Subcommittee on Manufacturing, Technology, and 
     Professional Services;
       ``(B) the Subcommittee on Travel, Tourism, Product and 
     Retail Sales, and International Trade; and
       ``(C) the Subcommittee on Federal Procurement and 
     Contracting.
       ``(2) Duties.--The Subcommittees established under 
     paragraph (1) shall perform such duties as the chairperson 
     shall direct.
       ``(3) Meetings.--The Interagency Committee shall meet not 
     less frequently than 3 times each year to--
       ``(A) plan activities for the new fiscal year;
       ``(B) track year-to-date agency contracting goals; and
       ``(C) evaluate the progress during the fiscal year and 
     prepare an annual report.''.

     SEC. 315. PRESERVING THE INDEPENDENCE OF THE NATIONAL WOMEN'S 
                   BUSINESS COUNCIL.

       (a) Short Title.--This section may be cited as the 
     ``National Women's Business Council Independence Preservation 
     Act of 2003''.
       (b) Findings.--Congress finds the following:
       (1) The National Women's Business Council provides an 
     independent source of advice and policy recommendations 
     regarding women's business development and the needs of women 
     entrepreneurs in the United States to--
       (A) the President;
       (B) Congress;
       (C) the Interagency Committee on Women's Business 
     Enterprise; and
       (D) the Administrator of the Small Business Administration.
       (2) The members of the National Women's Business Council 
     are small business owners, representatives of business 
     organizations, and representatives of women's business 
     centers.
       (3) The chair and ranking member of the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives make 
     recommendations to the Administrator to fill 8 of the 
     positions on the National Women's Business Council. Four of 
     the positions are reserved for small business owners who are 
     affiliated with the political party of the President and 4 of 
     the positions are reserved for small business owners who are 
     not affiliated with the political party of the President. 
     This method of appointment ensures that the National Women's 
     Business Council will provide Congress with nonpartisan, 
     balanced, and independent advice.
       (4) In order to maintain the independence of the National 
     Women's Business Council and to ensure that the Council 
     continues to provide Congress with advice on a nonpartisan 
     basis, it is essential that the Council maintain the 
     bipartisan balance established under section 407 of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. 7107).
       (c) Maintenance of Partisan Balance.--Section 407(f) of the 
     Women's Business Ownership Act of 1988 (15 U.S.C. 7107(f)) is 
     amended--
       (1) by striking ``A vacancy'' and inserting the following:
       ``(1) In general.--A vacancy''; and
       (2) by adding at the end the following:
       ``(2) Partisan balance.--When filling vacancies under 
     paragraph (1), the Administrator shall, to the extent 
     practicable, ensure that there are an equal number of members 
     on the Council from each of the 2 major political parties.
       ``(3) Accountability.--If a vacancy is not filled within 
     the 30-day period required under paragraph (1) or if there 
     exists an imbalance of party-affiliated members on the 
     Council for a period exceeding 30 days, the Administrator 
     shall submit a report, not later than 10 days after the 
     respective 30-day deadline, to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives, 
     that explains why the respective deadline was not met and 
     provides an estimated date on which any vacancies will be 
     filled.''.

             Subtitle C--Office of Native American Affairs

     SEC. 321. SHORT TITLE.

       This subtitle may be cited as the ``Native American Small 
     Business Development Act''.

     SEC. 322. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT PROGRAM.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 36 as section 37; and
       (2) by inserting after section 35 the following:

     ``SEC. 36. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT 
                   PROGRAM.

       ``(a) Definitions.--In this section--

[[Page S12075]]

       ``(1) the term `Alaska Native' has the same meaning as the 
     term `Native' in section 3(b) of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1602(b));
       ``(2) the term `Alaska Native corporation' has the same 
     meaning as the term `Native Corporation' in section 3(m) of 
     the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m));
       ``(3) the term `Assistant Administrator' means the 
     Assistant Administrator of the Office of Native American 
     Affairs established under subsection (b);
       ``(4) the terms `center' and `Native American business 
     center' mean a center established under subsection (c);
       ``(5) the term `Native American business development 
     center' means an entity providing business development 
     assistance to federally recognized tribes and Native 
     Americans under a grant from the Minority Business 
     Development Agency of the Department of Commerce;
       ``(6) the term `Native American small business concern' 
     means a small business concern that is owned and controlled 
     by--
       ``(A) a member of an Indian tribe or tribal government;
       ``(B) an Alaska Native or Alaska Native corporation; or
       ``(C) a Native Hawaiian or Native Hawaiian organization;
       ``(7) the term `Native Hawaiian' has the same meaning as in 
     section 625 of the Older Americans Act of 1965 (42 U.S.C. 
     3057k);
       ``(8) the term `Native Hawaiian organization' has the same 
     meaning as in section 8(a)(15) of this Act;
       ``(9) the term `tribal college' has the same meaning as the 
     term `tribally controlled college or university' has in 
     section 2(a)(4) of the Tribally Controlled Community College 
     Assistance Act of 1978 (25 U.S.C. 1801(a)(4));
       ``(10) the term `tribal government' has the same meaning as 
     the term `Indian tribe' has in section 7501(a)(9) of title 
     31, United States Code; and
       ``(11) the term `tribal lands' means all lands within the 
     exterior boundaries of any Indian reservation.
       ``(b) Office of Native American Affairs.--
       ``(1) Establishment.--There is established within the 
     Administration the Office of Native American Affairs, which, 
     under the direction of the Assistant Administrator, shall 
     implement the Administration's programs for the development 
     of business enterprises by Native Americans.
       ``(2) Purpose.--The purpose of the Office of Native 
     American Affairs is to assist Native American entrepreneurs 
     to--
       ``(A) start, operate, and grow small business concerns;
       ``(B) develop management and technical skills;
       ``(C) seek Federal procurement opportunities;
       ``(D) increase employment opportunities for Native 
     Americans through the start and expansion of small business 
     concerns; and
       ``(E) increase the access of Native Americans to capital 
     markets.
       ``(3) Assistant administrator.--
       ``(A) Appointment.--The Administrator shall appoint a 
     qualified individual to serve as Assistant Administrator of 
     the Office of Native American Affairs in accordance with this 
     paragraph.
       ``(B) Qualifications.--The Assistant Administrator 
     appointed under subparagraph (A) shall have--
       ``(i) knowledge of the Native American culture; and
       ``(ii) experience providing culturally tailored small 
     business development assistance to Native Americans.
       ``(C) Employment status.--The Assistant Administrator shall 
     be a Senior Executive Service position under section 
     3132(a)(2) of title 5, United States Code, and shall serve as 
     a noncareer appointee, as defined in section 3132(a)(7) of 
     title 5, United States Code.
       ``(D) Responsibilities and duties.--The Assistant 
     Administrator shall--
       ``(i) administer and manage the Native American Small 
     Business Development program established under this section;
       ``(ii) recommend the annual administrative and program 
     budgets for the Office of Native American Affairs;
       ``(iii) consult with Native American business centers in 
     carrying out the program established under this section;
       ``(iv) recommend appropriate funding levels;
       ``(v) review the annual budgets submitted by each applicant 
     for the Native American Small Business Development program;
       ``(vi) select applicants to participate in the program 
     under this section;
       ``(vii) implement this section; and
       ``(viii) maintain a clearinghouse to provide for the 
     dissemination and exchange of information between Native 
     American business centers.
       ``(E) Consultation requirements.--In carrying out the 
     responsibilities and duties described in this paragraph, the 
     Assistant Administrator shall confer with and seek the advice 
     of--
       ``(i) Administration officials working in areas served by 
     Native American business centers and Native American business 
     development centers;
       ``(ii) the Bureau of Indian Affairs of the Department of 
     the Interior;
       ``(iii) tribal governments;
       ``(iv) tribal colleges;
       ``(v) Alaska Native corporations; and
       ``(vi) Native Hawaiian organizations.
       ``(c) Native American Small Business Development Program.--
       ``(1) Authorization.--
       ``(A) In general.--The Administration, through the Office 
     of Native American Affairs, shall provide financial 
     assistance to tribal governments, tribal colleges, Native 
     Hawaiian organizations, and Alaska Native corporations to 
     create Native American business centers in accordance with 
     this section.
       ``(B) Use of funds.--The financial and resource assistance 
     provided under this subsection shall be used to overcome 
     obstacles impeding the creation, development, and expansion 
     of small business concerns, in accordance with this section, 
     by--
       ``(i) reservation-based American Indians;
       ``(ii) Alaska Natives; and
       ``(iii) Native Hawaiians.
       ``(2) 5-year projects.--
       ``(A) In general.--Each Native American business center 
     that receives assistance under paragraph (1)(A) shall conduct 
     5-year projects that offer culturally tailored business 
     development assistance in the form of--
       ``(i) financial education, including training and 
     counseling in--

       ``(I) applying for and securing business credit and 
     investment capital;
       ``(II) preparing and presenting financial statements; and
       ``(III) managing cash flow and other financial operations 
     of a business concern;

       ``(ii) management education, including training and 
     counseling in planning, organizing, staffing, directing, and 
     controlling each major activity and function of a small 
     business concern; and
       ``(iii) marketing education, including training and 
     counseling in--

       ``(I) identifying and segmenting domestic and international 
     market opportunities;
       ``(II) preparing and executing marketing plans;
       ``(III) developing pricing strategies;
       ``(IV) locating contract opportunities;
       ``(V) negotiating contracts; and
       ``(VI) utilizing varying public relations and advertising 
     techniques.

       ``(B) Business development assistance recipients.--The 
     business development assistance under subparagraph (A) shall 
     be offered to prospective and current owners of small 
     business concerns that are owned by--
       ``(i) American Indians or tribal governments, and located 
     on or near tribal lands;
       ``(ii) Alaska Natives or Alaska Native corporations; or
       ``(iii) Native Hawaiians or Native Hawaiian organizations.
       ``(3) Form of federal financial assistance.--
       ``(A) Documentation.--
       ``(i) In general.--The financial assistance to Native 
     American business centers authorized under this subsection 
     may be made by grant, contract, or cooperative agreement.
       ``(ii) Exception.--Financial assistance under this 
     subsection to Alaska Native corporations or Native Hawaiian 
     organizations may only be made by grant.
       ``(B) Payments.--
       ``(i) Timing.--Payments made under this subsection may be 
     disbursed in an annual lump sum or in periodic installments, 
     at the request of the recipient.
       ``(ii) Advance.--The Administration may disburse not more 
     than 25 percent of the annual amount of Federal financial 
     assistance awarded to a Native American small business center 
     after notice of the award has been issued.
       ``(iii) No matching requirement.--The Administration shall 
     not require a grant recipient to match grant funding received 
     under this subsection with non-Federal resources as a 
     condition of receiving the grant.
       ``(4) Contract and cooperative agreement authority.--A 
     Native American business center may enter into a contract or 
     cooperative agreement with a Federal department or agency 
     to provide specific assistance to Native American and 
     other under-served small business concerns located on or 
     near tribal lands, to the extent that such contract or 
     cooperative agreement is consistent with the terms of any 
     assistance received by the Native American business center 
     from the Administration.
       ``(5) Application process.--
       ``(A) Submission of a 5-year plan.--Each applicant for 
     assistance under paragraph (1) shall submit a 5-year plan to 
     the Administration on proposed assistance and training 
     activities.
       ``(B) Criteria.--
       ``(i) In general.--The Administration shall evaluate and 
     rank applicants in accordance with predetermined selection 
     criteria that shall be stated in terms of relative 
     importance.
       ``(ii) Public notice.--The criteria required by this 
     paragraph and their relative importance shall be made 
     publicly available, within a reasonable time, and stated in 
     each solicitation for applications made by the 
     Administration.
       ``(iii) Considerations.--The criteria required by this 
     paragraph shall include--

       ``(I) the experience of the applicant in conducting 
     programs or ongoing efforts designed to impart or upgrade the 
     business skills of current or potential owners of Native 
     American small business concerns;
       ``(II) the ability of the applicant to commence a project 
     within a minimum amount of time;
       ``(III) the ability of the applicant to provide quality 
     training and services to a significant number of Native 
     Americans;

[[Page S12076]]

       ``(IV) previous assistance from the Small Business 
     Administration to provide services in Native American 
     communities; and
       ``(V) the proposed location for the Native American 
     business center site, with priority given based on the 
     proximity of the center to the population being served and to 
     achieve a broad geographic dispersion of the centers.

       ``(6) Program examination.--
       ``(A) In general.--Each Native American business center 
     established pursuant to this subsection shall annually 
     provide the Administration with an itemized cost breakdown of 
     actual expenditures incurred during the preceding year.
       ``(B) Administration action.--Based on information received 
     under subparagraph (A), the Administration shall--
       ``(i) develop and implement an annual programmatic and 
     financial examination of each Native American business center 
     assisted pursuant to this subsection; and
       ``(ii) analyze the results of each examination conducted 
     under clause (i) to determine the programmatic and financial 
     viability of each Native American business center.
       ``(C) Conditions for continued funding.--In determining 
     whether to renew a grant, contract, or cooperative agreement 
     with a Native American business center, the Administration--
       ``(i) shall consider the results of the most recent 
     examination of the center under subparagraph (B), and, to a 
     lesser extent, previous examinations; and
       ``(ii) may withhold such renewal, if the Administration 
     determines that--

       ``(I) the center has failed to provide adequate information 
     required to be provided under subparagraph (A), or the 
     information provided by the center is inadequate; or
       ``(II) the center has failed to provide adequate 
     information required to be provided by the center for 
     purposes of the report of the Administration under 
     subparagraph (E).

       ``(D) Continuing contract and cooperative agreement 
     authority.--
       ``(i) In general.--The authority of the Administrator to 
     enter into contracts or cooperative agreements in accordance 
     with this subsection shall be in effect for each fiscal year 
     only to the extent and in the amounts as are provided in 
     advance in appropriations Acts.
       ``(ii) Renewal.--After the Administrator has entered into a 
     contract or cooperative agreement with any Native American 
     business center under this subsection, it shall not suspend, 
     terminate, or fail to renew or extend any such contract or 
     cooperative agreement unless the Administrator provides the 
     center with written notification setting forth the reasons 
     therefore and affords the center an opportunity for a 
     hearing, appeal, or other administrative proceeding under 
     chapter 5 of title 5, United States Code.
       ``(E) Management report.--
       ``(i) In general.--The Administration shall prepare and 
     submit to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives an annual report on 
     the effectiveness of all projects conducted by Native 
     American business centers under this subsection and any pilot 
     programs administered by the Office of Native American 
     Affairs.
       ``(ii) Contents.--Each report submitted under clause (i) 
     shall include, with respect to each Native American business 
     center receiving financial assistance under this subsection--

       ``(I) the number of individuals receiving assistance from 
     the Native American business center;
       ``(II) the number of startup business concerns created;
       ``(III) the number of existing businesses seeking to expand 
     employment;
       ``(IV) jobs created or maintained, on an annual basis, by 
     Native American small business concerns assisted by the 
     center since receiving funding under this Act;
       ``(V) to the maximum extent practicable, the capital 
     investment and loan financing utilized by emerging and 
     expanding businesses that were assisted by a Native American 
     business center; and

       ``(VI) the most recent examination, as required under 
     subparagraph (B), and the subsequent determination made by 
     the Administration under that subparagraph.

       ``(7) Annual report.--Each entity receiving financial 
     assistance under this subsection shall annually report to the 
     Administration on the services provided with such financial 
     assistance, including--
       ``(A) the number of individuals assisted, categorized by 
     ethnicity;
       ``(B) the number of hours spent providing counseling and 
     training for those individuals;
       ``(C) the number of startup small business concerns created 
     or maintained;
       ``(D) the gross receipts of assisted small business 
     concerns;
       ``(E) the number of jobs created or maintained at assisted 
     small business concerns; and
       ``(F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       ``(8) Record retention.--
       ``(A) Applications.--The Administration shall maintain a 
     copy of each application submitted under this subsection for 
     not less than 7 years.
       ``(B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (6)(A) 
     indefinitely.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated $5,000,000 for each of the 
     fiscal years 2004 through 2008, to carry out the Native 
     American Small Business Development Program, authorized under 
     subsection (c).''.

     SEC. 323. PILOT PROGRAMS.

       (a) Definitions.--In this section, the following 
     definitions shall apply:
       (1) Incorporation by reference.--The terms defined in 
     section 36(a) of the Small Business Act (as added by this 
     Act) have the same meanings as in that section 36(a) when 
     used in this section.
       (2) Joint project.--The term ``joint project'' means the 
     combined resources and expertise of 2 or more distinct 
     entities at a physical location dedicated to assisting the 
     Native American community.
       (b) Native American Development Grant Pilot Program.--
       (1) Authorization.--
       (A) In general.--There is established a 4-year pilot 
     program under which the Administration is authorized to award 
     Native American development grants to provide culturally 
     tailored business development training and related services 
     to Native Americans and Native American small business 
     concerns.
       (B) Eligible organizations.--The grants authorized under 
     subparagraph (A) may be awarded to--
       (i) any small business development center; or
       (ii) any private, nonprofit organization that--

       (I) has members of an Indian tribe comprising a majority of 
     its board of directors;
       (II) is a Native Hawaiian organization; or
       (III) is an Alaska Native corporation.

       (C) Amounts.--The Administration shall not award a grant 
     under this subsection in an amount which exceeds $100,000 for 
     each year of the project.
       (D) Grant duration.--Each grant under this subsection shall 
     be awarded for not less than a 2-year period and not more 
     than a 4-year period.
       (2) Conditions for participation.--Each entity desiring a 
     grant under this subsection shall submit an application to 
     the Administration that contains--
       (A) a certification that the applicant--
       (i) is a small business development center or a private, 
     nonprofit organization under paragraph (1)(B)(i);
       (ii) employs an executive director or program manager to 
     manage the facility; and
       (iii) agrees--

       (I) to a site visit as part of the final selection process;
       (II) to an annual programmatic and financial examination; 
     and
       (III) to the maximum extent practicable, to remedy any 
     problems identified pursuant to that site visit or 
     examination;
       (B) information demonstrating that the applicant has the 
     ability and resources to meet the needs, including cultural 
     needs, of the Native Americans to be served by the grant;
       (C) information relating to proposed assistance that the 
     grant will provide, including--
       (i) the number of individuals to be assisted; and
       (ii) the number of hours of counseling, training, and 
     workshops to be provided;
       (D) information demonstrating the effective experience of 
     the applicant in--
       (i) conducting financial, management, and marketing 
     assistance programs designed to impart or upgrade the 
     business skills of current or prospective Native American 
     business owners;
       (ii) providing training and services to a representative 
     number of Native Americans;
       (iii) using resource partners of the Administration and 
     other entities, including universities, tribal governments, 
     or tribal colleges; and
       (iv) the prudent management of finances and staffing;
       (E) the location where the applicant will provide training 
     and services to Native Americans; and
       (F) a multiyear plan, corresponding to the length of the 
     grant, that describes--
       (i) the number of Native Americans and Native American 
     small business concerns to be served by the grant;
       (ii) in the continental United States, the number of Native 
     Americans to be served by the grant; and
       (iii) the training and services to be provided to a 
     representative number of Native Americans.
       (3) Review of applications.--The Administration shall--
       (A) evaluate and rank applicants under paragraph (2) in 
     accordance with predetermined selection criteria that is 
     stated in terms of relative importance;
       (B) include such criteria in each solicitation under this 
     subsection and make such information available to the public; 
     and
       (C) approve or disapprove each completed application 
     submitted under this subsection not more than 60 days after 
     submission.
       (4) Annual report.--Each recipient of a Native American 
     development grant under this subsection shall annually report 
     to the Administration on the impact of the grant funding, 
     including--
       (A) the number of individuals assisted, categorized by 
     ethnicity;
       (B) the number of hours spent providing counseling and 
     training for those individuals;
       (C) the number of startup small business concerns created 
     or maintained with assistance from a Native American business 
     center;

[[Page S12077]]

       (D) the gross receipts of assisted small business concerns;
       (E) the number of jobs created or maintained at assisted 
     small business concerns; and
       (F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       (5) Record retention.--
       (A) Applications.--The Administration shall maintain a copy 
     of each application submitted under this subsection for not 
     less than 7 years.
       (B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (4) 
     indefinitely.
       (c) American Indian Tribal Assistance Center Grant Pilot 
     Program.--
       (1) Authorization.--
       (A) In general.--There is established a 4-year pilot 
     program, under which the Administration shall award not less 
     than 3 American Indian Tribal Assistance Center grants to 
     establish joint projects to provide culturally tailored 
     business development assistance to prospective and current 
     owners of small business concerns located on or near tribal 
     lands.
       (B) Eligible organizations.--
       (i) Class 1.--Not fewer than 1 grant shall be awarded to a 
     joint project performed by a Native American business center, 
     a Native American business development center, and a small 
     business development center.
       (ii) Class 2.--Not fewer than 2 grants shall be awarded to 
     joint projects performed by a Native American business center 
     and a Native American business development center.
       (C) Amounts.--The Administration shall not award a grant 
     under this subsection in an amount which exceeds $200,000 for 
     each year of the project.
       (D) Grant duration.--Each grant under this subsection shall 
     be awarded for a 3-year period.
       (2) Conditions for participation.--Each entity desiring a 
     grant under this subsection shall submit to the 
     Administration a joint application that contains--
       (A) a certification that each participant of the joint 
     application--
       (i) is either a Native American business center, a Native 
     American business development center, or a small business 
     development center;
       (ii) employs an executive director or program manager to 
     manage the center; and
       (iii) as a condition of receiving the American Indian 
     Tribal Assistance Center grant, agrees--

       (I) to an annual programmatic and financial examination; 
     and
       (II) to the maximum extent practicable, to remedy any 
     problems identified pursuant to that examination;

       (B) information demonstrating an historic commitment to 
     providing assistance to Native Americans--
       (i) residing on or near tribal lands; or
       (ii) operating a small business concern on or near tribal 
     lands;
       (C) information demonstrating that each participant of the 
     joint application has the ability and resources to meet the 
     needs, including the cultural needs of the Native Americans 
     to be served by the grant;
       (D) information relating to proposed assistance that the 
     grant will provide, including--
       (i) the number of individuals to be assisted; and
       (ii) the number of hours of counseling, training, and 
     workshops to be provided;
       (E) information demonstrating the effective experience of 
     each participant of the joint application in--
       (i) conducting financial, management, and marketing 
     assistance programs, as described above, designed to impart 
     or upgrade the business skills of current or prospective 
     Native American business owners; and
       (ii) the prudent management of finances and staffing; and
       (F) a plan for the length of the grant, that describes--
       (i) the number of Native Americans and Native American 
     small business concerns to be served by the grant; and
       (ii) the training and services to be provided.
       (3) Review of applications.--The Administration shall--
       (A) evaluate and rank applicants under paragraph (2) in 
     accordance with predetermined selection criteria that is 
     stated in terms of relative importance;
       (B) include such criteria in each solicitation under this 
     subsection and make such information available to the public; 
     and
       (C) approve or disapprove each application submitted under 
     this subsection not more than 60 days after submission.
       (4) Annual report.--Each recipient of an American Indian 
     tribal assistance center grant under this subsection shall 
     annually report to the Administration on the impact of the 
     grant funding received during the reporting year, and the 
     cumulative impact of the grant funding received since the 
     initiation of the grant, including--
       (A) the number of individuals assisted, categorized by 
     ethnicity;
       (B) the number of hours of counseling and training provided 
     and workshops conducted;
       (C) the number of startup business concerns created or 
     maintained with assistance from a Native American business 
     center;
       (D) the gross receipts of assisted small business concerns;
       (E) the number of jobs created or maintained at assisted 
     small business concerns; and
       (F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       (5) Record retention.--
       (A) Applications.--The Administration shall maintain a copy 
     of each application submitted under this subsection for not 
     less than 7 years.
       (B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (4) 
     indefinitely.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) $1,000,000 for each of the fiscal years 2004 through 
     2007, to carry out the Native American Development Grant 
     Pilot Program, authorized under subsection (b); and
       (2) $1,000,000 for each of the fiscal years 2004 through 
     2007, to carry out the American Indian Tribal Assistance 
     Center Grant Pilot Program, authorized under subsection (c).

          Subtitle D--Office of Veterans Business Development

     SEC. 331. ADVISORY COMMITTEE ON VETERANS BUSINESS AFFAIRS.

       (a) Retention of Duties.--Section 33(h) of the Small 
     Business Act (15 U.S.C. 657c(h)) is amended by striking 
     ``October 1, 2004'' and inserting ``October 1, 2006''.
       (b) Extension of Authority.--Section 203(h) of the Veterans 
     Entrepreneurship and Small Business Development Act of 1999 
     (15 U.S.C. 657b note) is amended by striking ``September 30, 
     2004'' and inserting ``September 30, 2006''.

     SEC. 332. OUTREACH GRANTS FOR VETERANS.

       Section 8(b)(17) of the Small Business Act (15 U.S.C. 
     637(b)(17)) is amended by inserting before the period at the 
     end the following: ``, veterans, and members of a reserve 
     component of the Armed Forces''.

     SEC. 333. AUTHORIZATION OF APPROPRIATIONS.

       Section 32 of the Small Business Act (15 U.S.C. 657b) is 
     amended by adding at the end the following:
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated for carrying out the provisions 
     of this section--
       ``(1) $1,000,000 for fiscal year 2004;
       ``(2) $1,500,000 for fiscal year 2005; and
       ``(3) $2,000,000 for fiscal year 2006.''.

           TITLE IV--SMALL BUSINESS PROCUREMENT OPPORTUNITIES

     SEC. 401. CONTRACT CONSOLIDATION.

       (a) Definitions.--Section 3(o) of the Small Business Act 
     (15 U.S.C. 632(o)) is amended to read as follows:
       ``(o) Definitions Relating to Consolidation of Contract 
     Requirements.--In this Act--
       ``(1) the terms `consolidation of contract requirements' 
     and `consolidation', with respect to contract requirements of 
     a military department, Defense Agency, Department of Defense 
     Field Activity, or any other Federal department or agency 
     having contracting authority mean a use of a solicitation to 
     obtain offers for a single contract or a multiple award 
     contract to satisfy 2 or more requirements of that 
     department, agency, or activity for goods or services that--
       ``(A) have previously been provided to or performed for 
     that department, agency, or activity under 2 or more separate 
     contracts that are smaller in cost than the total cost of the 
     contract for which the offers are solicited; or
       ``(B) are of a type capable of being provided or performed 
     by a small business concern for that department, agency, or 
     activity under 2 or more separate contracts that are smaller 
     in cost than the total cost of the contract for which the 
     offers are solicited;
       ``(2) the term `multiple award contract' means--
       ``(A) a contract that is entered into by the Administrator 
     of General Services under the multiple award schedule program 
     referred to in section 2302(2)(C) of title 10, United States 
     Code;
       ``(B) a multiple award task order contract or delivery 
     order contract that is entered into under the authority of 
     sections 2304a through 2304d of title 10, United States Code, 
     or sections 303H through 303K of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 253h through 
     253k); and
       ``(C) any other indeterminate delivery, indeterminate 
     quantity contract that is entered into by the head of a 
     Federal agency with 2 or more sources pursuant to the same 
     solicitation; and
       ``(3) the term `senior procurement executive' means--
       ``(A) with respect to a military department, the official 
     designated under section 16(3) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 414(3)) as the senior 
     procurement executive for the military department;
       ``(B) with respect to a Defense Agency or a Department of 
     Defense Field Activity, the official so designated for the 
     Department of Defense; and
       ``(C) with respect to a Federal department or agency other 
     than those referred to in subparagraphs (A) and (B), the 
     official so designated by that department or agency.''.
       (b) Procurement Strategies.--Section 15(e) of the Small 
     Business Act (15 U.S.C. 644(e)) is amended--
       (1) in paragraph (2)--
       (A) by striking ``.--
       ``(A) In general''; and
       (B) by striking subparagraphs (B) and (C); and
       (2) by striking paragraph (3) and inserting the following:

[[Page S12078]]

       ``(3) Limitation on use of acquisition strategies involving 
     consolidation.--
       ``(A) Certain defense contract requirements.--An official 
     of a military department, defense agency, or Department of 
     Defense Field Activity shall not execute an acquisition 
     strategy that includes a consolidation of contract 
     requirements of the military department, agency, or activity 
     with a total value in excess of $5,000,000, unless the senior 
     procurement executive first--
       ``(i) conducts market research;
       ``(ii) identifies any alternative contracting approaches 
     that would involve a lesser degree of consolidation of 
     contract requirements; and
       ``(iii) determines that the consolidation is necessary and 
     justified.
       ``(B) Certain civilian agency contract requirements.--The 
     head of a Federal agency not described in subparagraph (A) 
     that has contracting authority shall not execute an 
     acquisition strategy that includes a consolidation of 
     contract requirements of the agency with a total value in 
     excess of $2,000,000, unless the senior procurement executive 
     of the agency first--
       ``(i) conducts market research;
       ``(ii) identifies any alternative contracting approaches 
     that would involve a lesser degree of consolidation of 
     contract requirements; and
       ``(iii) determines that the consolidation is necessary and 
     justified.
       ``(C) Additional requirements for higher value consolidated 
     contracts.--In addition to meeting the requirements under 
     subparagraph (A) or (B), a procurement strategy by a civilian 
     agency that includes a consolidated contract valued at more 
     than $5,000,000, or by a defense agency that includes a 
     consolidated contract valued at more than $7,000,000 shall 
     include--
       ``(i) an assessment of the specific impediments to 
     participation by small business concerns as prime contractors 
     that will result from the consolidation;
       ``(ii) actions designed to maximize small business 
     participation as prime contractors, including provisions that 
     encourage small business teaming for the consolidated 
     requirement;
       ``(iii) actions designed to maximize small business 
     participation as subcontractors (including suppliers) at any 
     tier under the contract or contracts that may be awarded to 
     meet the requirements; and
       ``(iv) the identification of the alternative strategies 
     that would reduce or minimize the scope of the consolidation 
     and the rationale for not choosing those alternatives.
       ``(D) Necessary and justified.--A senior procurement 
     executive may determine that an acquisition strategy 
     involving a consolidation of contract requirements is 
     necessary and justified for purposes of subparagraph (A), 
     (B), or (C), if the benefits of the acquisition strategy 
     substantially exceed the benefits of each of the possible 
     alternative contracting approaches identified under clause 
     (ii) of any of those subparagraphs, as applicable. However, 
     savings in administrative or personnel costs alone do not 
     constitute, for such purpose, a sufficient justification for 
     a consolidation of contract requirements in a procurement, 
     unless the total amount of the cost savings is expected to be 
     substantial in relation to the total cost of the procurement.
       ``(E) Benefits.--Benefits considered for purposes of this 
     paragraph may include cost and, regardless of whether 
     quantifiable in dollar amounts--
       ``(i) quality;
       ``(ii) acquisition cycle;
       ``(iii) terms and conditions; and
       ``(iv) any other benefit directly related to national 
     security or homeland defense.''.
       (c) Report Requirements.--Section 15(p)(4)(B) of the Small 
     Business Act (15 U.S.C. 644(p)(4)(B)) is amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting the following: ``; and''; and
       (3) by adding at the end the following:
       ``(iii) a description of best practices for maximizing 
     small business prime and subcontracting opportunities.''.
       (d) Procurement Center Representatives.--Section 15(l) of 
     the Small Business Act (15 U.S.C. 644(l)) is amended--
       (1) by striking ``(l)(1)'' and inserting ``(2)'';
       (2) by redesignating paragraphs (2) through (7) as 
     paragraphs (3) through (8), respectively;
       (3) by inserting before paragraph (2), as so redesignated, 
     the following:
       ``(l)(1) The Administration shall assign not fewer than 1 
     procurement center representative at each major procurement 
     center, in addition to no less than 1 for each State.'';
       (4) in paragraph (2), as redesignated, by striking ``to the 
     representative referred to in subsection (k)(6)'' and 
     inserting ``to the traditional procurement center 
     representative and the commercial market representative, with 
     each such position filled by a different individual, and each 
     such representative having separate and distinct duties and 
     responsibilities.''; and
       (5) by striking ``paragraph (2)'' each place that term 
     appears and inserting ``paragraph (3)''.
       (e) Additional to Technical Advisers.--Section 15(k)[(8)] 
     of the Small Business Act (15 U.S.C. 644(k)[(8)]) is 
     amended--
       (1) in paragraph (5), by striking ``bundled contract'' and 
     inserting ``consolidated contract''; and
       (2) in paragraph (8), by striking ``representative--'' and 
     inserting ``representative at each major procurement center 
     under subsection (l)(1)--''.
       (f) Conforming Amendments.--Section 15(p) of the Small 
     Business Act (15 U.S.C. 644(p)) is amended--
       (1) in the subsection heading, by striking ``Bundled 
     Contracts'' and inserting ``Consolidated Contracts'';
       (2) in paragraph (1), in the paragraph heading, by striking 
     ``Bundled contract'' and inserting ``Consolidated contract'';
       (3) in paragraph (4), in the paragraph heading, by striking 
     ``contract bundling'' and inserting ``contract 
     consolidation'';
       (4) by striking ``bundled contracts'' each place that term 
     appears and inserting ``consolidated contracts'';
       (5) by striking ``bundled contract'' each place that term 
     appears and inserting ``consolidated contract'';
       (6) by striking ``bundling of contract requirements'' each 
     place that term appears and inserting ``consolidation of 
     contract requirements'';
       (7) in paragraph (4)(B)(ii), by striking ``previously 
     bundled'' and inserting ``previously consolidated'';
       (8) in paragraph (4)(B)(ii)(I), by striking ``were 
     bundled'' and inserting ``were consolidated'';
       (9) in paragraph (4)(B)(ii)(II)(bb), by striking ``bundling 
     the contract requirements'' and inserting ``the consolidation 
     of contract requirements''; and
       (10) in paragraph (4)(B)(ii)(II)(cc), by striking ``bundled 
     status'' and inserting ``consolidated status''.
       (g) GAO Study and Report.--
       (1) Feasibility study required.--The Comptroller General of 
     the United States shall conduct a study of the feasibility of 
     setting thresholds, based on industry category, for 
     permitting the consolidation of contract requirements to 
     proceed without being subject to the additional benefit 
     analyses required by the amendments made by this section.
       (2) Considerations.--The study conducted under paragraph 
     (1) shall include consideration of thresholds based on--
       (A) the dollar value of the overall prime contract at issue 
     (including the average dollar value of a prime contract in 
     each industry category);
       (B) the portion of such prime contract amounts that could 
     potentially include small business participation as 
     subcontractors;
       (C) the availability of small business concerns in each 
     industry that have the capabilities and resources to fulfill 
     prime contract requirements; and
       (D) such other criteria that the Comptroller determines 
     relevant.
       (3) Report.--Not later than June 30, 2004, the Comptroller 
     General shall submit a report to Congress and the 
     Administration on the results of the study conducted under 
     this subsection, together with any recommendations with 
     legislative or regulatory action.

     SEC. 402. AGENCY ACCOUNTABILITY.

       (a) Agency Responsibilities.--Section 15(g)(2) of the Small 
     Business Act (15 U.S.C. 644(g)(2)) is amended--
       (1) by inserting ``(A)'' after ``(2)'';
       (2) by striking ``shall, after consultation'' and inserting 
     the following: ``shall--
       ``(i) after consultation'';
       (3) by striking ``agency. Goals established'' and inserting 
     the following: ``agency;
       ``(ii) identify a percentage of the procurement budget of 
     the agency to be awarded to small business concerns, in 
     consultation with the Office of Small and Disadvantaged 
     Business Utilization of the agency, which information shall 
     be included in the strategic plan required under section 306 
     of title 5, United States Code, and the annual budget 
     submission to Congress by that agency, and, upon request, in 
     any testimony provided by that agency before the Congress in 
     connection with the budget process; and
       ``(iii) report, as part of its annual performance plan, 
     required under section 1115 of title 31, United States Code, 
     the extent to which the agency achieved the goals referred to 
     in clause (ii), and appropriate justification for any failure 
     to do so.
       ``(B) Goals established'';
       (4) by striking ``Whenever'' and inserting the following:
       ``(C) Whenever'';
       (5) by striking ``For the purpose of'' and inserting the 
     following:
       ``(D) For the purpose of'';
       (6) in the last sentence--
       (A) by striking ``(A) contracts'' and inserting ``(i) 
     contracts''; and
       (B) by striking ``(B) contracts'' and inserting ``(ii) 
     contracts''; and
       (7) by adding at the end the following:
       ``(E)(i) Each procurement employee described in clause 
     (iii)--
       [``(I) shall have as an annual performance evaluation 
     factor, where appropriate, the success of that procurement 
     employee in small business utilization, in accordance with 
     the goals established under this subsection; and]
       [``(II)](I) shall communicate to their subordinates the 
     importance of achieving small business goals.; and
       ``(II) shall have as an annual performance evaluation 
     factor, where appropriate, the success of that procurement 
     employee in small business utilization, in accordance with 
     the goals established under this subsection. 
       ``(ii) An appropriate percentage of any performance-related 
     bonus awarded to a procurement employee described in clause 
     (iii) shall be withheld, where appropriate, for failure to 
     achieve the goals established under this subsection.

[[Page S12079]]

       ``(iii) A procurement employee described in this clause is 
     a senior procurement executive, senior program manager, or 
     small and disadvantaged business utilization manager of a 
     Federal agency having contracting authority.''.
       (b) Small and Disadvantaged Business Utilization.--Section 
     15(k)(3) of the Small Business Act (15 U.S.C. 644(k)(3)) is 
     amended to read as follows:
       ``(3) be responsible only to, and report directly to, the 
     head of such agency, except that the Director of Small and 
     Disadvantaged Business Utilization for the Department of 
     Defense shall be responsible only to, and report directly to, 
     the Undersecretary of Defense for Acquisition, Technology, 
     and Logistics,''.
       (c) Reports on Small Business Utilization.--Section 10(d) 
     of the Small Business Act (15 U.S.C. 639(d)) is amended--
       (1) by inserting ``and each agency that is a member of the 
     President's Management Council (or any successor thereto)'' 
     after ``Department of Defense'' the first place that term 
     appears; and
       (2) by inserting ``or that agency'' after ``Department of 
     Defense'' the second place that term appears.
       (d) Technical Correction.--
       (1) In general.--Section 502(b) of the Veterans 
     Entrepreneurship and Small Business Development Act of 1999 
     (Public Law 106-50, 113 Stat. 248) is amended by striking 
     ``Section 15'' and inserting ``Section 15(g)(2)''.
       (2) Effect.--The amendment made by paragraph (1) shall be 
     deemed to have the same effective date as section 502(b) of 
     the Veterans Entrepreneurship and Small Business Development 
     Act of 1999.

     SEC. 403. SMALL BUSINESS PARTICIPATION IN PRIME CONTRACTING.

       (a) Participation in Multiple Award Contracts.--Section 
     15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended 
     by adding at the end the following:
       ``(3) The governmentwide goal for participation by small 
     business concerns in any multiple award contract shall be 
     established at not less than 23 percent of the total dollar 
     value of all awards under that contract.''.
       (b) Reserved Contracts.--Section 15(j) of the Small 
     Business Act (15 U.S.C. 644(j)) is amended--
       (1) in paragraph (1), by inserting ``, including any order 
     of 1 or more Federal Supply Schedule items,'' after ``goods 
     and services''; and
       (2) by adding at the end the following:
       ``(4) Any adjustment to the simplified acquisition 
     threshold (as defined in section 4(11) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403(11))), shall be 
     immediately matched by an identical adjustment to the small 
     business reserve for purposes of this subsection.''.

     SEC. 404. SMALL BUSINESS PARTICIPATION IN SUBCONTRACTING.

       (a) Certifications Required.--Section 8(d)(6) of the Small 
     Business Act (15 U.S.C. 637(d)(6)) is amended--
       (1) in subparagraph (E), by striking ``and'' at the end;
       (2) in subparagraph (F), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(G) the name and signature of the individual that is the 
     president, chief executive officer, or head of the entity, 
     certifying that subcontracting data provided are accurate and 
     complete; and
       ``(H) certification that the offeror or bidder will acquire 
     articles, equipment, supplies, services, or materials, or 
     obtain the performance of construction work from small 
     business concerns in the amount and quality used in preparing 
     the bid or proposal, unless such small business concerns are 
     no longer in business or can no longer meet the quality, 
     quantity, or delivery date.''.
       (b) Penalties for False Certifications.--Section 16(f) of 
     the Small Business Act (14 U.S.C. 645(f)) is amended by 
     inserting ``or 8(d)(6)(G))'' before ``of this Act''.

     SEC. 405. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING 
                   CONTRACTS.

       (a) Significant Factors.--Section 8(d)(4)(G) of the Small 
     Business Act (15 U.S.C. 637(d)(4)(G)) is amended by striking 
     ``a bundled'' and inserting ``any''.
       (b) Evaluation Reports.--Section 8(d)(10) of the Small 
     Business Act (15 U.S.C. 637(d)(10)) is amended--
       (1) by striking ``is authorized to'' and inserting 
     ``shall'';
       (2) in subparagraph (B), by striking ``and'' at the end;
       (3) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(D) report the results of each evaluation under 
     subparagraph (C) to the appropriate contracting officers.''.
       (c) Centralized Database; Payments Pending Reports.--
     Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is 
     amended--
       (1) by redesignating paragraph (11) as paragraph (13); and
       (2) by inserting after paragraph (10) the following:
       ``(11) Centralized database.--The results of an evaluation 
     under paragraph (10)(C) shall be included in a national 
     centralized governmentwide database.
       ``(12) Payments pending reports.--Each Federal agency 
     having contracting authority shall ensure that the terms of 
     each contract for goods and services includes a provision 
     allowing the contracting officer of an agency to withhold an 
     appropriate amount of payment with respect to a contract 
     (depending on the size of the contract) until the date of 
     receipt of complete, accurate, and timely subcontracting 
     reports in accordance with paragraph (6)(G).''.
       (d) Referral of Material Breach to Inspectors General.--
     Section 8(d)(8) of the Small Business Act (15 U.S.C. 
     637(d)(8)) is amended by adding at the end the following: ``A 
     material breach described in this paragraph shall be referred 
     for investigation to the Inspector General (or the 
     equivalent) of the affected agency.''.

     SEC. 406. DIRECT PAYMENTS TO SUBCONTRACTORS.

       (a) In General.--Section 8(d) of the Small Business Act (15 
     U.S.C. 637(d)), as amended by section 405, is further amended 
     by adding at the end the following:
       ``(14) Timely payment to small business subcontractors.--
       ``(A) In general.--Subject to subparagraph (B), the failure 
     of a civilian agency prime contractor, as defined in 
     subparagraph (D), to make a timely payment, as determined by 
     the contract with the subcontractor, to a subcontractor that 
     is a small business concern shall be a material breach of the 
     contract with the Federal agency.
       ``(B) Consideration of performance.--Before making a 
     determination under subparagraph (A), the contracting officer 
     shall consider all reasonable issues regarding the 
     performance, or lack of performance, of the subcontractor.
       ``(C) Withholding of payments.--Not later than 30 days 
     after the date on which a material breach under subparagraph 
     (A) is determined by the contracting officer, the Federal 
     agency may withhold any amounts due and owing the 
     subcontractor from payments due to the prime contractor and 
     pay such amounts directly to the subcontractor.
       ``(D) Defined term.--As used in this paragraph, the term 
     `civilian agency prime contractor' means a prime contractor 
     that offers any combination of services or manufactured goods 
     to Federal agencies other than the Department of Defense or 
     agencies with responsibility for homeland security or 
     national security.''.
       (b) Sunset.--The amendment made by this section shall 
     remain in effect during the period beginning on the date of 
     enactment of this Act and ending on September 30, 2006.

     SEC. 407. WOMEN-OWNED SMALL BUSINESS INDUSTRY STUDY.

       Section 8(m)(4) of the Small Business Act (15 U.S.C. 
     637(m)(4)) is amended to read as follows:
       ``(4) GAO identification of industries.--
       ``(A) Study.--The Comptroller General of the United States 
     shall conduct a study to identify industries in which small 
     business concerns owned and controlled by women are 
     underrepresented with respect to Federal procurement 
     contracting.
       ``(B) Report to congress.--Not later than December 31, 
     2003, the Comptroller General shall submit a report to 
     Congress on the results of the study conducted under 
     subparagraph (A), together with any recommendations for 
     legislative action.
       ``(C) Assistance from other agencies.--The Comptroller 
     General may request of any Federal agency, and such agency 
     shall provide, such information as the Comptroller General 
     determines necessary in carrying out this paragraph, to the 
     extent otherwise permitted by law.''.

     SEC. 408. HUBZONE AUTHORIZATIONS.

       Section 31(d) of the Small Business Act (15 U.S.C. 657a(d)) 
     is amended--
       (1) by striking ``2001'' and inserting ``2004''; and
       (2) by striking ``2003'' and inserting ``2006''.

     SEC. 409. DEFINITION OF HUBZONE; TREATMENT OF CERTAIN FORMER 
                   MILITARY INSTALLATION LANDS AS HUBZONES.

       (a) Base Closure Areas.--Section 3(p)(1) of the Small 
     Business Act (15 U.S.C. 632(p)(1)) is amended--
       (1) in subparagraph (C), by striking ``or'' at the end;
       (2) in subparagraph (D), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(E) base closure areas.''.
       (b) Definition.--Section 3(p)(4) of the Small Business Act 
     (15 U.S.C. 632(p)(4)) is amended by adding at the end the 
     following:
       ``(D) Base closure area.--The term `base closure area' 
     means lands within the external boundaries of a military 
     installation that were closed through a privatization process 
     under the authority of--
       ``(i) the Defense Base Closure and Realignment Act of 1990 
     (part A of title XXIX of Division B of Public Law 101-510; 10 
     U.S.C. 2687 note);
       ``(ii) title II of the Defense Authorization Amendments and 
     Base Closure and Realignment Act (Public Law 100-526; 10 
     U.S.C. 2687 note);
       ``(iii) section 2687 of title 10, United States Code; or
       ``(iv) any other provision of law authorizing or directing 
     the Secretary of Defense or the Secretary of a military 
     department to dispose of real property at the military 
     installation for purposes relating to base closures of 
     redevelopment, while retaining the authority to enter into a 
     leaseback of all or a portion of the property for military 
     use.''.

     SEC. 410. DEFINITION OF HUBZONE SMALL BUSINESS CONCERN.

       Section 3(p) of the Small Business Act (15 U.S.C. 632(p)) 
     is amended--
       (1) by redesignating paragraphs (4) through (7) as 
     paragraphs (5) through (8), respectively; and

[[Page S12080]]

       (2) by inserting after paragraph (3) the following:
       ``(4) Rule of construction relating to ownership.--For 
     purposes of paragraph (3)(A), the term `person' includes any 
     small business investment company, specialized small business 
     investment company, New Markets Venture Capital company (as 
     those terms are defined in sections 103 and 351, 
     respectively, of the Small Business Investment Act of 1958 
     (15 U.S.C. 662, 689), or other similar investment company, as 
     determined by the Administrator, if any such company 
     comprises not more than 15 percent of the ownership of the 
     subject small business concern.''.

     SEC. 411. ACQUISITION REGULATIONS.

       Not later than 180 days after the date of enactment of this 
     Act, the [G]governmentwide procurement regulations issued 
     under sections 6(a) and 25(c) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 405(a) and 421(c)) and the 
     procurement regulations described in section 25(c)(2) of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 
     421(c)(2)) that are issued by the Department of Defense shall 
     be amended as necessary to carry out this title and the 
     amendments made by this title.

                         TITLE V--MISCELLANEOUS

     SEC. 501. MINORITY SMALL BUSINESS AND CAPITAL OWNERSHIP 
                   DEVELOPMENT PROGRAM.

       (a) Name Change.--Sections 4(b), 7(j), and 8(a) of the 
     Small Business Act (15 U.S.C. 633(b), 636(j), and 637(a)) are 
     amended by striking ``Minority Small Business and Capital 
     Ownership Development'' each place it appears and inserting 
     ``Business Development''.
       (b) Conforming Amendments.--The Small Business Act (15 
     U.S.C. 631 et seq.) is amended--
       (1) in section 2(d)(2)(B)(ii), by striking ``small business 
     and capital ownership development program'' and inserting 
     ``small business development program'';
       (2) in section 7(j)(10), by striking ``small business and 
     capital ownership development program'' and inserting ``small 
     business development program'';
       (3) in section 7(j)(12)(A), by striking ``Capital Ownership 
     Development Program'' and inserting ``Business Development 
     Program''; and
       (4) in section 8(a)(21)(B)(v)(I), by striking ``Capital 
     Ownership Development Program'' and inserting ``Business 
     Development Program.
       (c) Annual Report.--Section 8(a)(20)(A) of the Small 
     Business Act (15 U.S.C. 637(a)(20)(A)) is amended by striking 
     ``semiannually report to their assigned Business Opportunity 
     Specialist'' and inserting ``annually submit, to their 
     assigned Business Opportunity Specialist, a report, which 
     shall include''.

     SEC. 502. EXTENSION OF [PROGRAM] AUTHORITY FOR TECHNOLOGY 
                   ASSISTANCE PROGRAM.

       (a) Rural Outreach.--Section 9(s)(2) of the Small Business 
     Act (15 U.S.C. 638(s)(2)) is amended by striking ``2005'' and 
     inserting ``2006''.
       (b) FAST Program.--Section 34 of the Small Business Act (15 
     U.S.C. 657d) is amended--
       (1) in subsection (h), by striking ``2005'' each place it 
     appears and inserting ``2006''; and
       (2) by striking ``September 30, 2005'' and inserting 
     ``September 30, 2006''.

     SEC. 503. BUSINESSLINC REPORT TO CONGRESS.

       Section 8(n) of the Small Business Act (15 U.S.C. 637(n)) 
     is amended by adding at the end the following:
       ``(4) Annual report.--
       ``(A) In general.--The Associate Administrator of Business 
     Development shall collect data on the BusinessLINC program 
     and submit an annual report by April 30 of each year on the 
     effectiveness of the program to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall include--
       ``(i) the number of programs administered in each State;
       ``(ii) the corresponding grant awards and the date of each 
     award;
       ``(iii) the dollar amount of the contracts in effect in 
     each State as a result of the BusinessLINC program; and
       ``(iv) the number of teaming arrangements or partnerships 
     created as a result of the BusinessLINC program.''.

  Ms. SNOWE. Mr. President, I rise today to seek unanimous consent for 
the passage of the Small Business Administration 50th Anniversary 
Reauthorization Act of 2003, S. 1375, a bill to reauthorize the U.S. 
Small Business Administration, SBA and its programs for the next 3 
years, together with a managers' amendment.
  As the chair of the Committee on Small Business and Entrepreneurship, 
I am pleased to report that this legislation passed the Committee on 
July 10, 2003, by a unanimous vote. It is the product of significant 
contributions by the members of my committee, and I am grateful for the 
efforts of the committee's ranking member, Senator Kerry, to make this 
a truly bipartisan bill.
  The challenge for today's SBA is enormous. Each year, there are 3 to 
4 million new business start-ups--1 in 25 adult Americans is taking 
steps to start a business. And, small businesses account for 
approximately two-thirds of the net new jobs in our country.
  We began the reauthorization process this year with a series of 
hearings, roundtables, and discussions to develop a bill that would 
improve the SBA programs that provide counseling and training for 
entrepreneurs--and to improve the SBA's financial assistance and 
Government procurement programs that enable small businesses to prosper 
and expand. While the particulars of this bill are extensive, let me 
highlight a few of its key areas.
  In terms of financing programs for small businesses, I have focused 
extensively on improving the credit and venture capital resources that 
the SBA provides for small businesses. These programs are the 
centerpiece of the SBA's efforts to help entrepreneurs get started and 
assist small businesses to prosper. In fact, in just the past 3 years 
alone, the SBA's lending programs made it possible for small businesses 
to create or retain more than 1.3 million jobs.
  Nevertheless, access to capital continues to rank as a primary 
concern for small business owners. So, we are proposing to continue the 
growth of the financing programs through reasonable increases in the 
authorization levels of the 7(a), 504 and Microloan programs. The bill 
also increases the amount that small businesses can borrow subject to 
the SBA's guarantee, so that the SBA's loan sizes realistically reflect 
what it costs to start and operate a small business in today's economy. 
Moreover, the bill addresses access to capital by helping SBA's lending 
partners--for instance, through the new National Preferred Lenders 
Pilot Program.
  In the area of entrepreneurial development, we set out to ensure that 
the SBA's programs continue to provide the products and services 
essential to small businesses. Recognizing the tremendous 
accomplishments by women entrepreneurs, I have included the Women's 
Small Business Improvement Act of 2003, which I introduced earlier this 
year, to integrate and better leverage the spectrum of women's business 
programs that the SBA provides for women entrepreneurs.
  A cornerstone of these improvements involves making the Women's 
Business Center Program a permanent program that will offer 
opportunities for the creation of new centers and renewal grants for 
existing centers on a competitive basis. By replacing the pilot 
Sustainability Program, which expires at the end of the current fiscal 
year, with a fair and balanced grant program, the bill will correct the 
funding constraints that have plagued the program in 2003.
  In addition, the SBA's entrepreneurial development partners--the 
Small Business Development Centers and the Service Corps of Retired 
Executives--continue to provide quality training and free counseling 
through almost 2,000 locations. As a result, in addition to minor 
technical changes in these programs, the bill reauthorizes these 
critical programs for the next three years.
  Finally, one of the most serious problems facing small businesses is 
their inability to participate fully in Federal contracts, on either a 
prime or subcontract basis. In the last 10 years, contract bundling has 
forced more than 50 percent of small businesses out of the Federal 
marketplace. The bill addresses the practice of Federal contract 
bundling by changing the definition of ``contract bundling'' to limit 
its use so that small businesses have better access to Federal 
contracts and a fair opportunity to compete for them.
  Furthermore, the bill implements the Procurement Program for Women-
owned Small Business Concerns, which will give contracting officers the 
tools necessary to help women-owned small businesses compete in the 
Federal marketplace more effectively. The bill also contains 
improvements to the HUBZone program, including the designation of a 
closed military base as a HUBZone for 5 years to reduce the serious 
consequences that military base closings pose for our local 
communities.
  With this bill, I am offering a managers' amendment, which is co-
sponsored by Senator Kerry, to address several issues that have risen 
since the

[[Page S12081]]

committee's markup of the bill. In working with several of my 
colleagues, on and off of the Small Business Committee, I believe the 
changes encompassed in this amendment address certain concerns and 
strengthen particular aspects of the bill so that it provides the 
greatest benefit to small businesses and entrepreneurs in this country. 
Let me highlight several of these changes.
  First, the amendment removes section 265, which would have authorized 
the SBA to develop and implement an innovative 3-year pilot program in 
which the SBA would provide a partial guarantee on pools of securitized 
small business loans that are not otherwise guaranteed by the SBA.
  When the President's Fiscal Year 2004 budget request was transmitted 
to the Congress this past February, it stated that the SBA was 
exploring a possible new approach to expand the opportunities of small 
businesses to access capital markets by facilitating the securitization 
of conventional small business loans that were not already guaranteed 
by the SBA. Increasing access to capital is a high priority of small 
businesses, and has been one of the Committee's priorities throughout 
its history. We are always seeking innovative ways to increase access 
to capital for small businesses, while at the same time measuring the 
cost and risk of loss that the Federal Government must incur to 
facilitate such financing. Accordingly, I recognized the potential 
benefits of this proposal for small businesses across the Nation.

  At our roundtable on April 30, 2003, the committee examined the loan-
pooling proposal in greater detail. The SBA reported that it had been 
exploring this type of program for some time, and thought the idea had 
considerable merit. The agency, however, was uncertain if it had the 
authority to develop and implement such a program, absent legislative 
authorization. After the roundtable, we consulted with the SBA and with 
participants in the small business financing industry to determine the 
program's appropriate elements.
  In addition to the support the SBA expressed for the proposal in its 
budget request, at the committee's roundtable, and in subsequent 
discussions with committee staff, the SBA took other steps to help make 
the proposal a success. For example, the agency entered into a contract 
with Dun & Bradstreet and with Fair, Isaacs, Co., to create a credit-
scoring model for small businesses, similar to individual consumer 
credit scores, to help small businesses gauge their credit quality. The 
scoring model will assist the pooling proposal by providing uniformity 
of pricing, thus reducing a primary obstacle to the securitization of 
non-SBA small business loans. The SBA also helped build support for the 
proposal by publicizing the need to take the foundational steps to 
build a secondary market for small business loans, rather than later 
trying to create such a market in one step when economic pressures 
called for an immediate response.
  The SBA is not alone in its support for a program to securitize small 
business loans. The Board of Governors of the Federal Reserve System, 
in its September 2002 Report to the Congress on the Availability of 
Credit to Small Businesses, stated that the securitization of small 
business loans could ``substantially influence the availability of 
credit'' to small businesses. The Federal Reserve noted that one 
primary benefit of a secondary market would be that small business 
borrowers could enjoy lower financing costs. In addition to the Federal 
Reserve report, other studies have shown that small businesses could 
benefit from an efficient secondary market for small business loans.
  The Federal Reserve report noted that a primary obstacle to a wide-
spread secondary market for small business loans was the lack of 
standardized information to evaluate small business loans for re-sale. 
As noted, the SBA has exercised foresight by securing the contract with 
Dun & Bradstreet and Fair, Isaacs to attack this problem. With the 
information provided by this new credit-scoring model, the 
securitization of non-SBA small business loans will be far more 
feasible.
  The committee has received support for the pilot program from 
representatives of thousands of small businesses that believe the 
program could improve access to capital, and could improve the terms of 
loans received, for many small businesses, particularly those without 
significant real estate property to use as collateral. Significant 
support for the program has been expressed particularly by small 
businesses that are owned by minorities or by women. For these small 
businesses, which often have less real estate collateral, on average, 
than other small businesses, the pilot program holds great potential 
for creating capital resources to meet their financing needs.
  Financial firms currently involved in the pooling and securitization 
of SBA 7(a) and 504 loans have also expressed their support for the 
program, and have stated their belief that it will increase small 
businesses' access to effective capital.
  With this input from the SBA, small businesses, and financial firms 
in hand, and having considered many studies regarding small business 
credit and the effectiveness of secondary markets, we included Section 
265 in S. 1375, which was approved unanimously by the committee. 
Section 265 authorized, but did not require, the SBA to develop the 
pilot program if the SBA determined that it could be practically 
implemented.
  The rationale for this proposal is to increase effective liquidity 
for small businesses by improving the quality and amount of loans 
available to them. The pooling structure is based on similar 
arrangements for home mortgages, credit card loans, and car loans, 
which have active secondary markets. This program would allow lenders, 
including community banks, to benefit from the increased liquidity of 
small business loans and to utilize capital that is otherwise locked 
into existing loans, and therefore provide better terms on loans to 
small businesses, as well as to make more small business loans.
  This proposal, as embodied in Section 265, is not a departure from 
the SBA's current practice of guaranteeing loans and regulating the 
securitization of those loans. The SBA already regulates the 
securitization of both guaranteed portions of loans provided to small 
businesses and non-guaranteed portions of the same loans. These loans 
are made both by Federally-regulated lenders and by lenders that are 
not Federally regulated. In Fiscal Year 2002, the SBA regulated the 
securitization of $3.4 billion in Government-guaranteed small business 
loans made under Section 7(a) of the Small Business Act. When the 
guaranteed portions of the 7(a) loans are securitized separately from 
the non-guaranteed portions, the SBA is guaranteeing 100 percent of the 
loan pools.
  The new proposal presents a much more measured SBA involvement than 
is involved with the SBA's current financing programs. Under the pilot 
program, financial firms approved by the SBA would pool loans not 
individually guaranteed by the SBA. These pooling entities would then 
issue securities offering returns based upon the returns from the loans 
in the pool. The securities would be rated by a rating agency and sold 
to investors.
  The pooling entity would also offer a partial ``first-loss'' 
guarantee to investors on the securities' returns. If the loans had 
insufficient returns to pay the expected returns on the securities, the 
pooling entity's guarantee would be the first guarantee called into 
performance to pay investors. The SBA would issue partial, not 
complete, ``second loss'' guarantees on the return from the securities, 
but not on individual loans within the pool. The agency's guarantees 
would thus be available only after the first-loss guarantees offered by 
the pool issuers are exhausted. In addition, the SBA will only need to 
provide guarantees at a much lower percentage level than is currently 
the case for the SBA's guarantees on individual loans. Finally, and 
perhaps most importantly, the cost of the SBA guarantees will be fully 
funded by fees paid by the loan poolers, so no Federal appropriations 
will be necessary.
  The proposed program also requires three separate types of reports. 
The SBA must provide to the committee and to the Committee on Small 
Business of the House of Representatives a report detailing the pooling 
program before it is implemented, and wait 50 days after submitting the 
report before implementing the program. In addition, the SBA must file 
with the Congress, in the SBA's Budget Request and

[[Page S12082]]

Performance Plan, an annual report about the program's performance. 
Finally, the GAO is required to study the program, if implemented, and 
report on the program's performance, including any effects the program 
may have on the 504 or 7(a) programs, before calendar year 2006.
  Working with Senator Pryor and with other colleagues, both on and off 
the committee, we endeavored to provide greater specificity in the 
instructions the provision gives the SBA regarding the pilot program, 
so as to ensure that the pooling proposal provides the greatest benefit 
to small businesses in need of capital while limiting risk to the 
Federal Government. I believe those modifications would have greatly 
improved the pilot program and increased its potential to provide 
increased access to capital on terms that are beneficial to small 
businesses.
  Access to credit for small businesses is often a challenge, and the 
committee has consistently believed that encouraging more lending to 
small businesses that have a likelihood to succeed, grow, and create 
new jobs is a sound national policy. The pilot program takes advantage 
of the successful example of the prior securizations of SBA small 
business loans, and of changes in the investment community, to 
facilitate lending in the small business community for years to come.
  However, while I continue to recognize the merits of this measure and 
believe that it should be included in this bill, the administration has 
now taken a contrary position. In the interest of expediting the 
passage of S. 1375 before the SBA's current authorizing legislation 
expires, I am reluctantly removing this provision to focus on those 
elements of the bill that must be enacted.
  While I am disappointed to have to remove this section, it is clear 
that this bill must move forward as quickly as possible. I want to be 
clear, however, that I continue to appreciate the benefits of this 
pilot program, and will introduce this provision as a separate bill in 
the near future. With the support this proposal already has, I am 
confident we can implement this innovative program, and I look forward 
to the benefits it can provide for small businesses as we try to assist 
small businesses to prosper, create more jobs, and pull the economy out 
of its current doldrums.
  The amendment also modifies the provisions of the bill relating to 
the New Markets Venture Capital Program and the definition of ``low-
income geographic area,'' in which New Markets Venture Capital 
companies are to invest most of their funds. In order to coordinate the 
definition of ``low-income geographic area'' used in the SBA's New 
Markets Venture Capital Program and that used for the New Markets Tax 
Credit under the tax code, the managers' amendment specifies that the 
Small Business Act's definition will be based on median family income, 
rather than median household income as under current law.
  This change will eliminate confusion that has resulted from the use 
of different definitions for two related programs. More importantly, by 
significantly broadening the definition of those areas in which 
investment is permitted under the New Markets Venture Capital program, 
this change will increase the flexibility that New Markets Venture 
Capital companies have in choosing small businesses in which to invest. 
As a result, we should see stronger New Markets Venture Capital 
companies and more small businesses being served through this venture 
capital program.
  The third part of the managers' amendment modifies several provisions 
in the bill relating to government contracting opportunities for small 
businesses. In 1994, Congress enacted the Federal Acquisition 
Streamlining Act, FASA, to streamline Federal procurement processes. 
FASA included an amendment to the Small Business Act that created an 
exclusive reservation for small businesses consisting of contracts 
valued at more than $2,500 but not more than $100,000. And, while it 
had the chance to classify purchases under multiple-award schedule 
contracts, including Federal Supply Schedule, within this reserve at 
that time, the Congress expressly excluded these sales from small 
business set-aside rules. Accordingly, rules on small business set-
asides do not apply to Federal Supply Schedule purchases, and, instead, 
contracting officers are required to give a ``preference'' to small 
businesses.
  Although reports now indicate that the level of small business 
participation on schedule contracts is growing and is relatively higher 
than the share small businesses receive on non-schedule contracts, 
small businesses continue to report to the committee that they invest 
time and money to negotiate a schedule contract successfully with the 
General Services Administration or an executive agent managing a 
Government-wide Acquisition Contract, and then they never receive the 
benefit of an order placed against that contract. Small businesses 
further report that the Government relies on a limited and preferred 
list of larger firms to meet its requirements for goods and services.
  Small businesses deserve to have a fair opportunity to compete for 
those orders. The Small Business Administration 50th Anniversary 
Reauthorization Act would protect small businesses and ensure that they 
continue to have access to, and the opportunity to compete for, 
multiple-award and schedule purchases. Specifically, the bill restricts 
competition of schedule orders valued between $2,500 and $100,000 for 
small businesses.
  I know that some of my colleagues believe that by setting aside 
schedule orders under $100,000, thousands of small firms that supply 
and sell through contracts held by large firms may significantly be 
harmed. They also question the need for action if small businesses are 
successfully competing for and winning schedule orders each day. 
Finally, they assert that scheduled contracts are a faster, easier, 
more flexible way for agencies to meet their needs and any change that 
reduces that ease should be challenged.
  In my view, if small businesses enjoy a majority share of schedule 
contracts--which they do--should not their participation in these 
contracts reflect their representation on the supply schedule? 
Currently, small businesses represent more than 70 percent of the 
companies listed on the Federal Supply Schedule, yet these small 
businesses are receiving just under 30 percent of the awards under the 
schedule.
  The intent of multiple-award contacting was not to have a majority of 
orders awarded on a sole-source basis. Rather, it was designed to be a 
streamlined acquisition process to achieve competition without 
increasing the government's risk. Including small business helps to 
ensure the Federal Government is getting the best products and services 
at the best prices.
  Nevertheless, in order to ensure the timely passage of this important 
reauthorization legislation, I have agreed to modify the bill's 
provision that would have allowed small business set-asides of awards 
on multiple-award contracts, to require, instead, that contracting 
officers review the offers of at least two small businesses when 
completing orders on multiple-award contacts. While I had hoped to 
provide stronger provisions for small businesses seeking to contract 
with the Federal Government, I believe this compromise will still lead 
to greater procurement opportunities for small enterprises.
  This modification anticipates that a contracting officer will give 
serious consideration to small businesses seeking to provide goods and 
services to the Federal Government. As an example, when placing orders 
for supplies with contractors on the General Services Administration's 
Federal Supply Schedule, contracting officers should consider the 
information available on the GSA Advantage on-line shopping service or 
other catalogs and price lists of at least two small business multiple-
award-schedule contractors that provide the supplies that are being 
purchased.
  Placing orders for services, however, may be more complex at times. 
In these instances, contracting officers purchasing from Government-
wide acquisition contacts, multi-agency contracts, or the Federal 
Supply Schedule should include at least two small businesses when they 
solicit offers. These actions will ensure that small business multiple-
award contractors have a fair opportunity to be considered for orders.
  To ensure the necessary steps are taken to establish clear guidance 
and that agencies follow these established procedures to implement this 
compromise, my committee will closely

[[Page S12083]]

monitor competition and small business participation on multiple-award 
contracts. Specifically, the amendment mandates the U.S. General 
Accounting Office, GAO, to report bi-annually to the Committees on 
Small Business on the number of actions and dollars awarded to small 
business under multiple-award contracts and help to achieve the level 
of competition in Federal contracting that Congress envisioned. In 
addition, the existing provisions in the bill require the GAO to 
conduct periodic reviews of small business participation in multiple-
award contracts, which will help Congress to ensure these provisions 
are implemented appropriately.
  Responding to additional concerns raised by my colleagues, the 
managers' amendment withdraws language that references the authority of 
agencies to withhold a portion of a performance-related bonus awarded 
to procurement officials for failure to achieve small business goals.
  The committee believes measures that hold agency officials 
accountable for their performance will drive results. Therefore, 
language in the bill, as reported, would have held agency procurement 
officials accountable for small business goals. It directed agencies to 
include in the annual performance evaluation for agency procurement 
officials a factor that measures the success of that official in small 
business utilization.
  It further required agencies to factor the performance of procurement 
officials in achieving these small business goals into any monetary 
rewards under consideration. In order to avoid delaying the entire bill 
for this provision, I have reluctantly agreed to withdraw this latter 
provision. Nevertheless, my committee will continue to monitor the 
extent to which agencies are meeting their small business goals and 
look for every opportunity to hold failing agencies accountable to our 
small business constituency.
  With respect to subcontracting opportunities, once a contract that 
contains a small business subcontracting plan has been awarded by a 
Federal agency, the prime contractor is required to submit reports 
periodically to the Government that include information on the prime 
contractor's achievement of its subcontracting goals and the dollars 
awarded to small business subcontractors. While the U.S. General 
Accounting Office indicates that most contractors that the GAO reviewed 
make good faith efforts to comply with their subcontracting plans, 
small businesses report to my committee that not only do prime 
contractors fail to comply with subcontracting plans, but they also 
fail to submit complete and accurate subcontracting reports. Therefore, 
this managers' amendment contains a technical correction to clarify 
that the company president or the head of the entity must certify that 
data contained in subcontracting compliance evaluation reports provided 
to the government is accurate and complete.
  In addition, under current language in the bill, a contracting 
officer must first consider ``all reasonable issues regarding the 
subcontractor's performance, or lack of performance, before making a 
determination that the prime contractor failed in its responsibility to 
timely pay a small business subcontractor.'' Some of my colleagues, 
however, have raised concerns that this language limits the contracting 
officer's discretion to issues regarding only the performance of the 
subcontractor, and that other issues that might legitimately cause non-
payment, such as disputes over off-sets, could not be considered. That 
was never the intent of the bill reported by the committee.
  In light of these concerns, the managers' amendment modifies the 
language to ensure that a contracting officer can consider ``all 
reasonable issues regarding the circumstances surrounding the failure 
to make timely payment to a small business subcontractor'' before 
making a determination to make a direct payment to the subcontractor 
under a pilot program to test direct payments to small business 
contractors.
  The committee also recognizes the economic ramifications that 
military base closures can have on our local communities and economies. 
We believe the SBA's Historically Underutilized Business Zone, HUBZone, 
program can harness the strength and the creativity of the small 
business sector by providing these firms with incentives to relocate to 
areas suffering from the effects of a military base closure. Therefore, 
we included language in the bill to designate base closure areas as 
HUBZones, and the managers' amendment clarifies that such designation 
will apply to military bases closed after the date of enactment for a 
period of 5 years in order to attract small businesses to areas 
affected by base closure where there are customers and a skilled 
workforce. The committee believes that new business and new jobs 
created through HUBZone small businesses means new life for areas 
affected by base closure.
  Lastly, our colleague from New Mexico, Senator Bingaman, has 
requested an adjustment to the Program for Investment in 
Microentrepreneurs, PRIME, which the bill reauthorizes for 3 years. To 
accommodate this request, the managers' amendment authorizes $2 million 
under the PRIME program to be spent to provide grants to intermediaries 
to assist disadvantaged Native American entrepreneurs. This 
modification enhances the bill's provisions that encourage Native 
American-owned businesses and new Native American entrepreneurs.
  Mr. President, I will close by noting that this is one of the most 
expansive SBA reauthorization bills in the 50-year history of the 
agency. The SBA estimates that reauthorizing the agency will result in 
3.3 million jobs over the next 5 years, with the SBA and its programs 
predicted to support over 1 million jobs over that same period through 
prime contracts and subcontracts.
  This bill is based on the deliberative, methodical, and systematic 
approach that this committee has taken to review the spectrum of SBA 
programs, building on those that are working and fixing those that are 
not. How can we do anything less for the economic engine of our 
economy--small business--which holds the greatest hope for this 
country's recovery from the current economic doldrums?
  I urge my colleagues to support this important legislation.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)

 Mr. KERRY. Mr. President, today, as ranking democrat on the 
Committee on Small Business and Entrepreneurship, I join the 
committee's chair, Senator Olympia Snowe, in bringing to the floor for 
final Senate consideration, a 3-year reauthorization bill for the Small 
Business Administration's programs.
  These programs help small businesses with access to capital, business 
advice and training and Federal procurement opportunities. But before I 
speak more specifically about the provisions of the bill, I would like 
to thank Chair Snowe for working hand-in-hand with me on this, my third 
reauthorization of the Small Business Administration since becoming 
ranking member in 1997. Having worked close on two previous 
reauthorizations, and as a member of the Small Business and 
Entrepreneurship Committee for over 18 years, I can tell you that the 
SBA reauthorization process takes diligence and a strong attention to 
detail. I want to commend Senator Snowe for taking the initiative to 
draft legislation that makes such important and necessary changes to 
the SBA during this reauthorization process and for showing great 
leadership in her first 9 months as chair of the Committee on Small 
Business and Entrepreneurship.
  Our bill will strengthen the SBA and dramatically improve the 
agency's ability to deliver services to small businesses in every 
State. It is based on a sound committee record. In addition to holding 
two hearings and three roundtables to specifically address the SBA's 
programs and related reauthorization issues, our committee met and 
spoke with numerous constituents, program directors and small business 
advocates. It is through this correspondence, research and input that 
our committee has been able to prepare a comprehensive piece of 
legislation that should serve the Small Business Administration and the 
entire small-business community well past even the next reauthorization 
period.
  Over the past 3 years, as chairman and ranking member of this 
committee, I have seen this administration

[[Page S12084]]

reduce Government funding and transfer that money to the wealthy with 
tax cut after tax cut, resulting in a significant loss of revenue for 
essential initiatives aimed at fostering small businesses and the job 
creation and economic activity they bring about. While many of like to 
note that small businesses are the engine of economic growth and should 
be bolstered by our Government, this administration has given small 
businesses more words than action.
  The need for small business programs--for access to capital, for 
training and counseling, for assistance in gaining access to the 
Federal marketplace--runs counter cyclically to the economy. When the 
economy is slumping, as it now is, small businesses and entrepreneurs 
need the SBA even more. Our committee has heard from the small-business 
community that demand for training and assistance and access to capital 
is up, yet this administration has proposed freezing funding for 
virtually all SBA programs for 6 years. Their proposal includes no 
adjustment for inflation or demand, despite the SBA's own numbers that 
show demand is up for its programs. The SBA's largest lending programs 
would have run out of money this year had the SBA not taken the drastic 
step of capping the size of loans. Both the problem of 
imminent shutdown and the SBA's solution of a cap would have been bad 
for struggling small businesses. But for additional funding of more 
than $3 billion made available by Congress, the SBA's solution would 
have disrupted many small businesses' access to otherwise unattainable 
capital. Again, the problem and its solution could have been avoided 
had the administration properly funded this important program.

  It is in carrying out our legislative and oversight responsibilities 
that Chair Snowe and I raised a number of concerns regarding the SBA's 
reauthorization proposal and the overall management and direction of 
many of the agency's programs through hearings and roundtables and in 
letters and phone calls to the administration. And after hearing from 
the community and working with small business experts in the field, 
Senator Snowe and I came to the conclusion that many of the proposals 
put forth by the Small Business Administration would not help the 
agency's programs, but rather would ultimately hinder them.
  This administration and small businesses across this Nation will 
find, however, that our prescription for small businesses in a flailing 
economy is quite different. Our reauthorization legislation embraces 
the initiatives that have worked for years, redirects those that have 
struggled, and sets the SBA and our small business sector up for 
continued success.
  Although banks have plenty of cash to lend, many small businesses 
still have a problem getting access to credit. Either the terms are 
unreasonable, or they can not get a loan at all. For the past few years 
as the economy has fizzled, the Federal Reserve has reported that banks 
have cut back on lending to small businesses, making it harder and more 
expensive to get loans. And who has been there to pick up the slack? 
The Small Business Administration and its lending partners.
  Lending is up 37 percent in the SBA's largest lending program for 
working capital. Lending is up 22 percent in the SBA's loan program for 
small businesses that are growing and need money to buy equipment and 
buildings. Lending is up in the SBA's microloan program, which serves 
those with the least access to capital through the private sector. And 
the SBA's venture capital programs play a significant role in this 
country's investment in our fastest-growing small businesses, 
accounting for more than 50 percent of all U.S. venture investments. 
Last year these loans and investments pumped about $20 billion into the 
economy, leveraged millions more from the private sector, fed the local 
tax base as the Federal Government cut back, and created or retained 
more than 400,000 jobs.
  As the committee reviewed the SBA's programs for reauthorization, 
these facts figured largely into establishing the program levels. I 
thank our chair, Senator Snowe, for working with me to set the levels 
for the SBA's lending and venture capital programs at increasing levels 
for the next 3 years. I am particularly pleased with the increased 
funding levels for the microloan program.
  I disagree with the administration's proposals over the past few 
years to cut back its investment in microloans and training assistance 
to micro-entrepreneurs. And I disagree with the administration's 
contention that these borrowers are being served through the 7(a) loan 
program. The small borrower in the microloan program is different than 
the small borrower being served through the 7(a) loan program. Both 
lending vehicles are important, but they are different, and one is not 
a substitute for the other.
  And who are these borrowers being served through the microloan 
program? Thirty percent are African American. Eleven percent are 
Hispanic. Thirty-seven percent are women. And anywhere from 30 to 40 
percent go to small businesses in rural areas. Banks turn 
these borrowers away, and yet the administration proposed cutting the 
microloan program by 36 percent in its most recent budget--fiscal year 
2004. The SBA needs to fully fund these programs and put more resources 
into the office that manages the program. Four people are not enough to 
manage 1,400 loans and 180 grants.

  Not only is the program level for microloans troublesome, but also 
the level for the agency's largest small business lending program, the 
7(a) program. In the report that accompanies S. 1375, the committee 
notes that our duty as members of this committee, as well as that of 
the SBA itself, is not simply to maintain these programs but to monitor 
the demand and adjust the programs accordingly to meet the needs of 
small businesses. According to SBA's testimony before the committee on 
April 30, 2003, the agency estimates demand only by looking backwards--
what has happened in the past year. However, there are other important 
factors to consider: changes in loan volume, trends in the economy, and 
initiatives and program changes that will affect loan volume. For 
example, the agency often enters into memoranda of understanding with 
trade and ethnic associations in order to help their members who own 
small businesses, and recently the SBA opened its lending programs to 
all credit unions, which number 10,000. Both of these changes are 
intended to raise awareness of the SBA's services, which ultimately 
will affect demand. In a press release from the SBA regarding credit 
unions, the agency stated that delivery of SBA loans through credit 
unions, ``Represents a possible increase of nearly 30 percent in the 
overall number of institutions where entrepreneurs can seek capital for 
their businesses.'' That possibility, if it becomes a reality, will 
almost certainly increase demand for 7(a) loans. Therefore, it should 
be factored into the SBA's estimate of programs demand for fiscal year 
2004 and beyond, and aligned in its annual appropriations requests and 
legislative proposals.
  Aside from setting the level for each small business financial 
assistance program, our SBA reauthorization makes important program 
changes and starts some important, new initiatives. In the SBA's 
microloan program, we have adopted many of the provisions we passed 
last year as part of S. 174, which Senator Snowe and I introduced and 
the committee and the full Senate voted to pass by unanimous consent. I 
thank the Association for Enterprise Opportunity, AEO, as well as the 
participants of the reauthorization roundtable on April 30, 2003--Mary 
Mathews of Minnesota's Northeast Entrepreneur Fund, Zach Gast of AEO in 
Washington, D.C., Alan Corbet of Missouri's Go Connection, and Blake 
Brown of Maine's Coastal Enterprises--for representing the microloan 
industry so convincingly and educating the committee on the 
inextricable correlation between technical assistance, lending and 
successful businesses that can repay their loans. I thank them for 
illustrating so vividly how they serve borrowers that would not 
otherwise have access to capital--because their loans are not 
profitable enough to appeal to traditional lenders, and because the 
efficiencies of credit scoring work against these small borrowers, even 
those with repayment ability. The SBA's microloans represent their only 
credit option to help them achieve economic independence and become 
bankable in the future.
  Picking up where we left off last year, and even the year before when 
we

[[Page S12085]]

made important changes to the microloan program, S. 1375 will make it 
possible for lenders to offer small business ``short-term'' loans. This 
will benefit small businesses, the lenders and the SBA because it will 
eliminate repeated paperwork and administrative oversight from those 
small businesses, such as carpenters, who need revolving loans to 
finance the jobs as they come in, rather than taking multiple little 
fixed-term loans. Rather than tying eligibility to the expertise of the 
entity, we have made it possible for new entities to qualify as the SBA 
microlending intermediaries if they have staff with this unique lending 
and technical assistance expertise. We have made a conforming change 
regarding the average smaller size of microloans, increasing it from 
$7,500 to $10,000, to make it consistent with similar changes enacted 
in December 2000.

  Unlike the provisions we considered in 2000 and again last year with 
S. 174, this bill does not go as far to eliminate the restrictions on 
lenders contracting out the technical assistance or assistance before a 
loan is made. Instead, we raise from 25 percent to 30 percent the 
amount of TA funds an intermediary can contract with an outside expert 
and the amount of grants a lender can use to counsel prospective 
borrowers. The latter change does not go as far as I would like, but 
represents a compromise. Although there is a perception that pre-loan 
assistance means that TA money is used on microentrepreneurs who never 
get loans, in actuality the small-business owner in many cases needs 
help getting the loan more than assistance running the business after 
he or she gets the loan. Also, unlike the last two microloan bills, 
instead of including a provision authorizing the SBA to fund peer-to-
peer mentoring among microloan lenders and TA providers, the 
microlenders asked the committee to increase the oversight of an 
existing statutory provision that requires the SBA to contract out 7 
percent of its loan dollars for training of intermediaries.
  Now the SBA will have to report annually on this specific provision 
to highlight what they have done to comply with the law. Last, S. 1375 
requires the SBA to develop an improved subsidy rate model to determine 
the cost of microloans because the one they have used since the 
program's inception does not reflect the performance of the program. 
For example, last year, in Fiscal Year 2003, the administration's 
budget doubled the subsidy rate, which is the Government's cost of the 
program, from 6.78 percent to 13.05 percent, even though the program 
had not experienced any loss of Federal funds since the first loan was 
made in 1992. This broken method of calculating the cost of these loans 
is a waste of taxpayer money because Congress has to appropriate 
unnecessary funds to run the program.
  In the 7(a) loan program, the SBA's largest loan program, which 
provides loans to small businesses for working capital with long terms 
of up to 25 years, we made permanent the reduction in the fees 
borrowers and lenders pay. We are testing a proposal that allows the 
most proficient 7(a) lenders in good standing to lend in every State. 
Lenders have complained that applying for lending autonomy in each of 
the 70 district offices and branches is administratively burdensome, 
both for them and for the agency staff, and that some district offices 
have taken advantage of the power to approve or disapprove lenders when 
they apply for this special lending status.
  Let me be clear--while I want to avoid unnecessary paperwork and 
eliminate reported abuses, I do not want the lenders to take this as a 
signal to quit working with the district directors and district staff. 
It is important to have a local connection and for the SBA and the 
lenders to work together to maximize service to the small businesses. 
We need to maximize resources to reach not only as many small 
businesses as possible, but also those populations that most need 
access to affordable capital. It would be unreasonable to continue 
holding district directors accountable for lending goals in their areas 
without building in a mechanism to encourage interaction. There are 
concerns that allowing lenders to make loans on a nationwide basis and 
bypass the local SBA staff to work only with SBA staff in Washington, 
DC, could undermine the local infrastructure and the SBA's ability to 
meet the individual needs of local small businesses. For this purpose I 
have included a provision that directs the SBA to consider the 
recommendations and comments of any district directors and regional 
administrators when reviewing a lender for national lending authority.
  To increase the value of 7(a) loans sold in the secondary market, the 
committee has included a provision to allow the SBA to pool and sell 
the guaranteed portion of loans with varied rates. Currently, the SBA 
has the authority to only sell those loans with identical rates. 
Proponents argue that this will create efficiencies in the market and 
strengthen the program by bringing it into line with what the private 
sector has been doing for years.
  At Senator Snowe's request, in order to reach more under-served small 
businesses, we have enhanced the Low-Doc program, allowing lenders to 
use the simplified application from for loans up to $250,000 from 
$100,000, making it the same as the SBA Express program. We have also 
expanded the incentives for lenders to provide financing to export 
small businesses, and proposed letting 7(a) borrowers use a simplified 
size standard when determining if an applicant is a small business.
  To improve the 504 loan program, which makes long-term loans of up to 
20 years to small, growing businesses to buy equipment and buildings, 
we have raised the debenture size to keep peace with the rising cost of 
commercial real estate and equipment. We have raised the job 
requirement standard up from $35,000 to $50,000. This is reasonable 
given the increase in the Consumer Price Index since the last time the 
job requirement was changed in 1990. We have directed the SBA to 
simplify the application and documentation process of applying for and 
closing 504 loans, long a goal of this Committee and made a priority 
based on the compelling testimony of some of our witnesses during the 
reauthorization process. We have also created two alternatives for 504 
lenders to use when establishing a loan loss reserve to cover potential 
losses.
  I am particularly pleased that we have included S. 822, the Child 
Care Lending Pilot Act in the reauthorization bill. It allows small, 
non-profit childcare businesses access to 504 loans. I thank Senator 
Snowe and my colleagues for agreeing to try this for 3 years, similar 
to what we have done with the microloan program. And I thank the trade 
association of 504 lenders, the National Association of Certified 
Development Companies, and other 504 lenders for their endorsement of, 
and input on, the pilot.
  The more research I have done, the more I have come to realize how 
vitally important it is that we give non-profit day care providers the 
same opportunities as for-profits to expand their businesses. Non-
profit day care centers are often the only childcare suppliers 
available in needy areas, from the most urban to be most rural. I have 
taken note of states like Oregon, where 79 percent of day care 
providers are non-profit, Michigan, where that number jumps to 86 
percent, Iowa with 77 percent, my own State of Massachusetts with 90 
percent, Ohio with 62 percent, and the list goes on and on. I've 
learned that in State after State families are waiting for affordable 
day care; from more than 1,000 families on the waiting list in both 
Nevada and Maine to more than 30,000 on the list in Texas. These 
parents are waiting for quality day care they can afford, and making 
available affordable loans to all licensed child care providers may 
increase access to care and cut down those waiting lists.
  I understand there is concern about the precedent of the SBA lending 
to non-profits. Right now it is done in only limited circumstances--
microloans, physical disaster loans and economic injury disaster loans 
in the areas affected by the terrorist attacks of 9/11. And I agree it 
should not be expanded to all industries. However, this is a very 
unique industry whose critically important services in many States are 
delivered mostly through non-profits, and the only way to increase 
facilities to provide the child care is to reach both for-profit and 
non-profit child care providers. Further, non-profits are usually the 
providers that care for the neediest kids. I have added provisions to 
the pilot program to ensure that the underwriting

[[Page S12086]]

standards are just as tough, if not more so, as those applied to for-
profit centers. The loans must be personally guaranteed, the collateral 
must be owned outright by the child care provider, and it must be able 
to make its loan payments and cover normal operating expenses from the 
revenue generated from its clients. With these protections, the loans 
to non-profits should perform just as well as those made to for-
profits, and if there is a problem, the loans should be collateralized 
sufficiently to cover the losses.

  The bill defines a small, non-profit child care businesses as an 
entity organized as a 501(c)(3), but not just any organization. It must 
be a licensed child care provider; it must meet the size standard for a 
small business; and it must provide care to infants, toddlers and pre-
kindergarten and care to older children after school. This makes 
assistance available to eligible entities that offer Head Start 
services. At Senator Snowe's request, the pilot is limited to seven 
percent of the number of loans guaranteed by the 504 program overall, 
which is less than the 10 percent allowed for pilots under SBA's 7(a) 
guaranteed business loan program. I feel that the agreed upon cap 
should allow for sufficient lending under the pilot to adequately test 
whether lending to non-profit childcare providers is effective in 
increasing access to affordable childcare, and whether it protects the 
general 504 program, which is vital to the financing of small 
businesses in this country.
  Before I move on to discuss another important provision in the bill, 
I want to thank all the members of the Advisory Committee on Child Care 
and Small Business in Massachusetts who not only identified the need 
for this policy change but also developed many innovative ideas to 
coordinate Federal and State business services and child welfare 
services to expand the availability of quality, affordable child care 
and strengthen the businesses of child care of child care providers.
  The bill also includes a comprehensive study by the GAO to track and 
monitor the impact of this program both on child care industry and the 
504 program. Last, I want to remind my colleagues that the 504 program 
is funded entirely through fees and does not require appropriations. 
Further, when the Congressional Budget Office reviewed the 
reauthorization act and estimated its cost and the impact the 
provisions would have on the programs, CBO assessed no cost increase to 
the 504 program, its subsidy rate, or the agency by enacting the child 
care lending pilot provision.
  Also included in this bill is S. 318, the Small Business Drought 
Relief Act. This simply reinforces in legislation something that the 
SBA should already be doing. You see, the SBA doesn't treat all drought 
victims the same. The agency only helps those small businesses whose 
income is tied to farming and agriculture. However, farmers and 
ranchers are not the only small business owners whose livelihoods are 
at risk when drought hits their communities. The impact can be just as 
devastating to the owners of rafting businesses, marinas, and bait and 
tackle shops. Sadly, at present these small businesses cannot get help 
through the SBA's disaster loan program because of something taxpayers 
hate about government--bureaucracy.
  The SBA denies these businesses access to disaster loans because its 
lawyers say drought is not a sudden event and therefore it is not a 
disaster by definition. Despite numerous requests, written and verbal, 
for a copy of this legal opinion, the SBA delayed compliance for 6 
months. The delay jeopardized enactment of emergency legislation during 
the 107th Congress, leaving small business drought victims without 
assistance. Contrary to the agency's position that drought is not a 
disaster, as of July 16, 2002, the day this legislation was introduced 
last year, the SBA had drought disaster declarations in effect in 36 
States. That number had grown to 48 by the beginning of this year, 
demonstrating that the problem had gotten worse and even more small 
businesses were in need.

  As I have said time and again, the SBA already has the authority to 
help all small businesses hurt by drought in declared disaster areas, 
but the agency will not do it. For years the agency has been applying 
the law unfairly, helping some and not others, and it is out of 
compliance with the law. The Small Business Drought Relief Act of 2003 
would force the SBA to comply with existing law, restoring fairness to 
an unfair system, and would get help to small business drought victims 
that need it. I thank former Governor Jim Hodges of South Carolina, and 
his staffer Lane Hudson, for bringing this to the committee's 
attention. They served the needy small businesses of their State 
extremely well, and I am sorry that politics kept this common sense and 
much needed provision from being enacted. I thank the other 15 
Governors who fought for their constituents, too. And I thank Senator 
Bond for working with me on this when he was the ranking member of the 
Committee on Small Business & Entrepreneurship, and Senator Snowe and 
her staff for all their help and support. While we might have had a lot 
of rain recently in the northeast, there are areas like Lake Mead in 
Arizona and Nevada where it is so dry that the water level is down and 
small businesses are losing business and having to make expensive 
changes, such as extending docks to reach the water in order to stay in 
business.
  In this bill are also provisions to strengthen the SBA's venture 
capital programs--the Small Business Investment Company Debenture and 
Participating Securities programs, and the New Markets Venture Capital 
Program. We have balanced investment incentives with financial 
soundness issues and allowed small businesses to receive more SBIC 
financing than currently permissible if they also have a 504 or 7(a) 
loan. We have improved the arrangement for distributing payments from 
successful SBICs so that the SBA and the investors are treated more 
fairly and the taxpayer has more protection for realizing repayment on 
the investments. We have put in place conforming amendments to make the 
New Markets Venture Capital program work with the New Markets Tax 
Credit, as Congress intended. And we have clarified that New Markets 
Venture Capital companies have 2 years to raise their matching capital, 
as Congress intended. The committee has been troubled by the agency's 
interpretation of the NMVC statute, which SBA viewed as permitting the 
agency to choose how much time it could give conditionally approved 
NMVCs to raise the private-sector matching money. The SBA's chosen time 
frames were unreasonable and not what Congress intended.
  I very much regret that the managers' amendment that we are 
considering today does not include a change to the New Markets Venture 
Capital Program which would better align allowable investments with 
repayment obligations. Right now the repayment and profit participation 
schedules are out of sync. Experts argue that this situation could 
force NMVCs to liquidate promising small businesses in order to raise 
repayment money. It would be unfortunate if this were to occur, 
particularly for the employees of small businesses in these high-
unemployment areas who will be hard-pressed in this economy to find 
another job with sustainable wages and benefits. I do not have an SBA 
NMVC in my State, but there are about 20 States with NMVCs which would 
have benefited from this proposed change--Maine, New Hampshire, 
Vermont, Kentucky, Maryland, West Virginia, Ohio, Delaware, New Jersey, 
Pennsylvania, Arizona, and Washington, DC. I am sorry that we could not 
reach a compromise and I hope for the sake of existing NMVCs and the 
small businesses they assist that the experts are not right.
  I thank the many experts who have advised this committee over the 
years on developing and implementing the new markets venture capital 
program. My colleagues on the committee and I are grateful for their 
help. It is a great service to the taxpayers and businesses and the 
communities that will benefit from this innovative investment. In no 
particular order, I thank Dr. Julia Rubin who helped us when she was at 
Harvard, at Brown and now at Rutgers University. I thank Saunders 
Miller, now himself a small business owner of Peaq Funds in Manhattan, 
who was a principal developer of this program and may other venture 
capital initiatives for the many years he worked at the SBA. I thank 
Don Christensen, the former head of the SBA's investment

[[Page S12087]]

division, where he served this nation and president Clinton extremely 
well. And to the many developmental venture capitalists who routinely 
impart their expertise and wisdom to this committee, such as Elyse 
Cherry of the Boston Community Venture Fund and Ray Moncrief of 
Kentucky Highlands.
  Responding to findings by the General Accounting Office and the SBA's 
Office of Inspector General, this legislation includes many measures to 
strengthen the SBA's oversight of lenders. And we have reauthorized and 
clarified the law for surety bond guarantees to help small businesses 
get Government contracts.
  While no one would deny the importance that access to capital plays 
in the success of small businesses, as SBA Administrator Hector Barreto 
and past SBA administrators have acknowledged time and again, debt is 
not always the answer. In the SBA's FY 2004 budget request, there is 
reference to information from the Ewing Marion Kauffman Foundation and 
Dun & Bradstreet that indicates ``80 percent of new businesses 
discontinue operation within 5 years because of lack of `knowledge' of 
key business skills.'' Despite the recognized importance of such 
assistance, the SBA's funding request for fiscal year 2004 and its 
legislative proposal to implement that request would freeze funding 
levels for virtually all agency programs, without even accounting for 
inflation, for a 6-year period. If enacted, that would severely 
hamstring this nation's small businesses and their ability to 
effectively compete and prosper in the national economy. For this 
reason, Senator Snowe and I took a comprehensive approach to supporting 
and improving the SBA's entrepreneurial development programs, while 
rejecting proposals put forth that would undermine their success.
  Cuts to or inadequate funding of the SBA's entrepreneurial 
development programs are often attributed to vague and unfounded claims 
of duplication. Such claims mistake a common mission of training and 
counseling for duplication, ignoring the reality that small businesses 
vary greatly, are often at very different stages of development, and 
have many different needs. Just as it would be ineffective to only have 
one type of loan or venture capital financing structure for the 25 
million small businesses in this country, it would be futile to water 
down specialized management and training programs to impose a one-size-
fits-all approach.
  I want to commend Chair Snowe for giving women entrepreneurs such a 
prominent place in the reauthorization process. Rarely do women 
entrepreneurs get the recognition and attention they deserve for their 
contributions to our economy: Eighteen million Americans would be 
without jobs today if it were not for these entrepreneurs who had the 
courage and the vision to strike out on their own. During my tenure as 
a member, chair, and lead Democrat of the Senate Committee on Small 
Business and Entrepreneurship, I have worked to increase and improve 
the opportunities for enterprising entrepreneurial women in a variety 
of ways, leading to greater earning power, financial independence and 
asset accumulation--and I am glad that Senator Snowe is joining me in 
this endeavor.
  As Chair Snowe expressed when she introduced the Women's Small 
Business Programs Improvement Act--and when Senator Snowe and I passed 
the Women's Business Center's Preservation Act--protecting the 
extremely effective and well-established Women's Business Center 
network was a high priority in this reauthorization. For that reason, 
we make permanent the Women's Business Center Sustainability Pilot 
Program by creating 3-year ``renewal'' grants for those centers with 
sustainability grants and 4-year ``initial'' grants for new centers; 
increase the program's authorization levels; and direct the Office of 
Women's Business Ownership, OWBO, to make all Women's Business Center 
grants at $150K and to consult with the associations of Women's 
Business Centers when making improvements to the program. Other changes 
to the Women's Business Center Program include streamlining the data 
collection and the grant application and selection criteria, protecting 
the privacy of Women's Business Center, WBC, clients, and providing for 
a smooth transition from sustainability to the newly established WBC 
program.
  Our legislation will not only secure the future of the Women's 
Business Center Program, but it will connect all SBA-related women's 
initiatives with a unified mission, similar guidance and training. 
These changes were coupled with minor, yet significant, changes to the 
National Women's Business Council, NWBC, and the Interagency Committee 
on Women's Business Enterprise. Senator Snowe and I included provisions 
to give the NWBC cosponsorship authority, to allow more flexibility in 
the way the council uses funds, and to direct the council to serve as a 
clearinghouse for historical data. Each of these things will enable the 
council to become a better resource for the administration, Congress 
and the entire small-business community. Since its inception, the NWBC 
has provided Congress, the Small Business Administration, and the 
Interagency Committee on Women's Business Enterprise with independent 
advice and policy recommendations on issues facing women in business.
  In recognition of the council's importance to policy making and women 
in business, Senator Landrieu offered and the committee adopted an 
amendment identical to her National Women's Business Council 
Independence Preservation Act of 2003, which seeks to maintain the 
bipartisan balance on the NWBC. The structure of the NWBC helps to 
maintain its independence. It has 15 members. The chair is appointed by 
the President and must be a prominent business woman. Six members are 
representatives of women's business organizations, including 
representatives of women's business center sites, and the remaining 
eight are members appointed by the SBA administrator based upon 
recommendations of the chair and ranking members of the Senate Small 
Business and Entrepreneurship Committee and the House Small Business 
Committee. Of these eight ``party-affiliated'' members, four come from 
the same political party as the President and four members who are not 
from the President's party; all of them must be small business owners. 
The bipartisan balance in the NWBC's membership helps to ensure that 
any policy recommendations will reflect the needs of women in business 
and not the political agenda of one political party over another.
  Vacancies on the NWBC are supposed to be filled no later than 30 days 
after the position becomes open; however, in the past 2 years, the SBA 
has failed to meet this 30-day statutory deadline. The NWBC Chair was 
vacant from May 29, 2001, to May 21, 2002, a period of 11 months and 22 
days. Of the party-affiliated slots reserved for the President's party, 
one was vacant for 3 months, two were vacant for a period of 7 months; 
and one was vacant for 21 months. Two of the seats reserved for members 
who are not from the President's party were vacant for nearly 2 years, 
one seat was vacant for 7 months, and the fourth seat remains vacant. 
At one point during the past 2 years the NWBC had a severe partisan 
imbalance. There were three Republican members on the NWBC and no 
Democratic members. The committee is concerned that these vacancies 
undermine the effectiveness of the NWBC, and that the lack of 
bipartisan balance will subject any policy positions taken by the NWBC 
to criticism as being motivated by partisan interests.

  Senator Landrieu's amendment, which was approved unanimously by the 
committee, requires that vacancies in the party-affiliated slots will 
be filled to maintain a bipartisan balance on the NWBC. The provision 
also ensures accountability by requiring the administration to report 
to Congress on vacancies that remain unfilled for more than 30 days. 
The committee expects the report to cite the reasons for the vacancies, 
what is causing any delays in filling the positions, whether nominees 
were available for consideration, at what stage in the vetting process 
nominees are, whether there are any objections to the nominees and what 
those objections are, an estimate for when the vacancies will be 
filled, and any other relevant information relating to the vacancies.
  To bolster the representation of women business owners in the Federal 
Government, our bill re-establishes the Interagency Committee on 
Women's Business Enterprise, directs the Deputy Administrator of the 
SBA to serve

[[Page S12088]]

as acting chairperson of the Interagency Committee until a chairperson 
is appointed, establishes a Policy Advisory Group to assist the 
Committee's chairperson in developing policies and programs under this 
act and creates three subcommittees similar to those created under the 
National Women's Business Council.
  This bill also supports and protects the Small Business Development 
Center network, which has served millions of small-business owners 
since its inception more than 20 years ago. It should also be noted 
that in 2001, SBDCs helped small businesses create or retain over 
80,000 jobs, generate $3.9 billion in sales and obtain $2.7 billion in 
financing. For every dollar spent on an SBDC, $2.09 in tax revenue was 
returned to the Federal Government. Numbers aside, the nationwide 
network of SBDCs provides important counseling services to small-
business owners that are unable to afford private consulting, many of 
whom are women and minority clients. The SBDC program has grown to 
serve 1.25 million small-business owners and entrepreneurs each year, 
and there are nearly 1,000 centers serving every State in the Nation.
  While this bill rejects the potentially detrimental changes proposed 
by the SBA to the SBDC network, it does address concerns expressed by 
the centers and small businesses. Our bill increases authorization 
levels to keep up with increased demand and a provision to protect the 
privacy of the program's clients and a provision to help the SBDCs that 
have been adversely affected by poor economic conditions or government 
downsizing. Also included is a portability provision proposed by 
Senator Snowe to provide supplemental assistance to State SBDC networks 
that have been adversely affected by a military base or industrial site 
closure which has lead to a loss of jobs and severe economic harm. If 
implemented correctly, portability has the potential to help States, 
reeling in the aftermath of a sudden economic change, to provide the 
necessary small business assistance to quell the economic injury to a 
particular area.
  Also, included in the entrepreneurial development section of our bill 
is a provision to increase to $7 million annually the authorization 
level for the Service Corps of Retired Executives, SCORE, which has 
10,500 volunteers, and technical change to allow SCORE to keep its 
modest staff of 14 employees. For more than 38 years, SCORE has been 
one of the SBA's greatest and most efficient successes. In 2002, SCORE 
volunteers held over 300,000 counseling sessions and put in nearly 1.4 
million volunteer hours. To keep up with an our nonstop national 
economy, SCORE has dramatically advanced the outreach of its online 
services to reach clients 24 hours a day, seven days a week. Last year, 
for $5 million, SCORE volunteers provided small business owners an 
estimated $170.8 million worth of professional business advice. It is 
safe to say that in this down economy, SCORE is one investment that 
will be paying dividends for years to come.

  I thank Senator Snowe for working with me to include, as introduced, 
the Native American Small Business Development Act, which I 
reintroduced earlier this year together with Senator Johnson and 
Senator Smith to address the SBA's growing lack of commitment to the 
Native American community. According to a report released by the U.S. 
Census Bureau, the ``three year average poverty rate for American 
Indians and Alaska Natives from 1998-2000 was 25.9 percent; higher than 
for any other race groups.'' With an unemployment rate well above the 
national average and household income at just three-quarters of the 
national average, Native American communities need a commitment from 
the Federal Government that we will help them, particularly during 
these difficult economic times. To reaffirm this commitment, the 
Johnson-Kerry-Smith bill provides Native Americans the resources they 
need to take advantage of the opportunities of entrepreneurship.
  The Native American Small Business Development Act, as included in 
our reauthorization bill, will ensure that the SBA's programs to assist 
Native American communities cannot be dissolved by making the SBA's 
Office of Native American Affairs, ONAA, and its assistant 
administrator permanent. Our legislation would also create a statutory 
grant program, known as the Native American Development grant program, 
to assist Native Americans. It would also establish two pilot programs 
to try new means of assisting Native American communities and require 
Native American communities to be consulted regarding the future of the 
SBA programs designed to assist them. In short, this legislation will 
ensure that our Native American communities receive the adequate 
assistance they need to help start and grow small businesses.
  Senator Bingaman and I have worked closely to develop a provision for 
inclusion in a joint managers' amendment to the reported bill, which 
will expand the Program for Investment in Microentrepreneurs, PRIME, 
with a separate $2 million authorization to provide direct, in-depth 
technical assistance and counseling to disadvantaged Native American 
small business owners. The provision will complement the Native 
American Business Centers created in the Native American Small Business 
Development Act by following the PRIME model, which provides technical 
assistance through microenterprise entities that have extensive 
experience helping the least experienced entrepreneurs in low-income 
communities. The rationale for amending the PRIME Act, rather than 
creating a separate program, is that PRIME is currently operational and 
simply needs additional funding so it can better address the needs of 
the Native American entrepreneurial community. The provision follows 
the existing Small Business Administration's approach and terminology 
for implementing the PRIME Act to enhance the possibility of economic 
development through entrepreneurship in Native American communities. 
The Bingaman provision will strengthen the three-pronged approach the 
Senator Johnson and I designed in the Native American Small Business 
Development Act to find a solution to the longterm economic handicap 
existing in Native American communities nationwide. There are a number 
of microenterprise organizations in states across the country that are 
willing and prepared to take on the additional challenge of assisting 
disadvantaged Native American entrepreneurs, and there are a number of 
Native American communities that are eager to take a different path to 
economic development. However, there are currently a limited amount of 
funds to allow that to happen. I commend Senator Bingaman for his 
attention to this matter, for his continued support of my small 
business legislation, and for his foresight and vision for Native 
Americans in New Mexico and across the country. The Native American 
communities across our nation will be better off with the assistance 
that this provision makes possible. Were it not for the persistence of 
Senator Bingaman, this provision would not be part of SBA's tools to 
help Native American entrepreneurs. I also want to thank Senator Snowe 
for working with Senator Bingaman and me to include this provision in 
the managers' amendment.

  To address the growing business development needs of veterans, 
Senator Snowe and I reauthorized the Advisory Committee on Veterans 
Affairs, expanded veterans outreach grants from solely serving disabled 
veterans, to serving all veterans, reservists and service-disabled 
veterans. Further, we increase the funding for the Office of Veterans 
Business Development to enable that office to better deal with the 
demand by veterans for outreach and development services.
  Included in a joint Snowe-Kerry amendment, which was unanimously 
approved at the Committee markup, is a reauthorization of PRIME at $15 
million. SBA Administrator Hector Barreto has stated, ``The PRIME 
program was created to help the smallest of small businesses. These are 
entrepreneurs at the most basic stage of starting a business and who 
typically require the greatest amount of committed service and 
guidance. In order to succeed, they require training and technical 
assistance that must be accessible.''
  PRIME is a powerful investment that provides critical assistance to 
struggling, distressed communities. It's engineered to help low-income 
and very low-income families, defined as those at 150 percent of the 
poverty line or below. A very low-income family of

[[Page S12089]]

four earns about $23,000 a year. The International Labor Organizations 
estimates that the return on investment in microenterprise development 
through resources like PRIME ranges from $2.06 to $2.72 for every 
dollar invested. Microenterprise contributes to our national economy 
through public tax revenues, private income increases, and reduced 
dependence on public assistance, such as welfare. Small Business 
Development Centers define a ``client'' as someone who has received two 
hours of training. On average, however, PRIME organizations spend 10 
hours with low-income and very low-income entrepreneurs.
  Many often confuse PRIME assistance with the microloan technical 
assistance. Unlike the microloan program's technical assistance, which 
is directly tied to helping microentrepreneurs obtain access to capital 
through microlenders, the PRIME program is designed to help 
microentrepreneurs who may not be credit-worthy or don't need or want 
loans, but do need intensive technical assistance.
  Currently, there are fewer than 80 organizations with PRIME grants, 
yet the need for PRIME assistance is now greater than ever. While 
access to credit is vital for many microentrepreneurs, for low-income 
individuals, there is a severe gap between being credit-worthy and 
receiving the technical assistance needed to be successful in business. 
The PRIME program addresses this gap. for these reason, Senator Snowe 
and I reauthorized the program for three years. Our bill also moves 
PRIME's statutory language to the Small Business Act and includes a 
data collection provision.
  We continue to receive reports of the detrimental effects of the 
Administration's policy of reduced staffing and resources for essential 
programs aimed at allowing small businesses to thrive. Week after week, 
the Federal Times reports on the decline in contracts being allocated 
to small businesses, small businesses losing ground in the Federal 
marketplace, and most recently, on the awarding of more big contracts 
with less oversight from Federal agencies. With agencies awarding 
larger, more complex and more costly contracts with fewer staff 
performing oversight, this nation's small businesses and its tax payers 
are the ones shouldering the burden when small business goals continue 
to be unmet. In addition to helping small businesses obtain access to 
procurement opportunities, these goals are meant to help the government 
benefit from the cost-savings and innovations small business 
contractors can often provide.

  Significant improvements to the on-going problem of contact bundling, 
also called contract consolidation, are included in this bill. One 
provision included in this legislation that will make a significant 
impact on small businesses' ability to compete is the method we have 
adopted to address the ongoing problem of contract bundling. This 
language is a prime example of the effectiveness of bipartisanship, 
diligence and compromise. This approach incorporates language from an 
amendment to the Department of Defense reauthorization offered by 
Senator Collins and Senator Talent, language from my contract bundling 
bill, S. 633 and the President's initiative on contract bundling.
  The first provision creates a two-tiered threshold in order to 
prevent unnecessary contract consolidation. Civilian agencies will be 
required to meet specific standards if they attempt to consolidate 
contracts above $2 million and $5 million. The Department of Defense is 
required to meet similar requirements for contracts above $5 million 
and $7 million. The bill also further expands the definition of 
contract bundling to include contract consolidation, closing a loophole 
in the definition that has been widely used and detrimentally affecting 
small businesses.
  The second provision increases in the number of procurement center 
representatives, PCRs. These representatives advocate on behalf of 
small businesses in cases directly affecting contracting, such as the 
bundling or consolidation of contracts. Unfortunately, the number of 
PCRs has been reduced from over 200 at its peak in the late 1980s to 
the current level of just 47. In addition to reducing the number of 
traditional PCRs, the administration has also eliminated the Breakout 
PCRs, specially trained advocates that analyze highly technical large 
contracts and ``unbundle'' contracts and break out portions that are 
appropriate for small businesses. Their responsibilities have been 
rolled into that of traditional PCRs, even though the number of PCRs 
continued to decline. Often, the role of commercial marketing 
representatives, CMRs, was also incorporated into the responsibilities 
of traditional PCRs. CMRs are responsible for identifying opportunities 
and developing marketing strategies for small businesses to appeal to 
large prime contractors. The SBA's attempt to streamline their offices 
and replace trained individuals with electronic systems has resulted in 
the disenfranchisement of small businesses and hindered the SBA's 
ability to maintain a proper level of oversight over Federal 
contracting.
  In the bill, we have increased the number of procurement center 
representatives to ensure that every State and every major procurement 
center is allocated a PCR. Meanwhile, we have also ensured that these 
PCRs are not burdened with responsibilities that were previously the 
duties of breakout PCRs and commercial marketing representatives. These 
two improvements will dramatically increase the efficacy and efficiency 
of all three positions and allow proper review of the approximately 40 
percent of Federal contracts, nearly, $90 billion, that are currently 
not being reviewed by PCRs. This should increase small business's 
access to Federal contract opportunities.
  The bill would also create a reporting requirement for the 
BusinessLINC program, which has been showing promise in creating real 
teaming opportunities for small businesses in the private sector. 
Although the administration recommended elimination of the program, the 
reports this committee received regarding the overwhelming success of 
the existing nine programs made it clear that the SBA did not have 
sufficient information about BusinessLINC to make an informed decision 
on its effectiveness. The committee's bill would ensure that the SBA 
offers the proper level of oversight and would foster the continued 
success of the program. I would like to thank Senator Snowe for working 
with me to find a compromise to preserve this successful program.

  At the Committee's roundtable on non-credit programs and the hearing 
on contract bundling, the small business community reiterated the need 
for accountability for small business contracting at the agency level. 
I applaud Senator Snowe on her efforts to ensure that Federal agencies 
be held accountable for fully utilizing small businesses and to allow a 
greater amount of Congressional oversight of the implementation of 
agency procurement strategies. Provisions within this bill will ensure 
that the heads of Federal agencies identify a specific portion of their 
budget request that will be awarded to small businesses in their 
strategic plan and their annual budget submission to Congress. The bill 
also gives senior procurement executives and senior program managers 
additional authority to educate their staff regarding the importance of 
meeting the government-wide goals for small business utilization and 
allows for greater accountability in annual performance evaluations. I 
would like to thank the members of the Senate committee on Government 
Affairs for working with Senator Snowe and me on these provisions to 
ensure that agency officials have the authority, as well as the 
flexibility, to efficiently and effectively meet the goals we have 
placed before them.
  In addition to increasing opportunities for prime contracts, this 
bill addresses another serious problem: Small businesses have been 
severely hampered by dishonest practices by some businesses that have 
prime contracts with the Federal Government and have received 
preference over other prime contractors due to their superior small 
business subcontracting plans. Senator Snowe and I have worked closely 
to address the concerns of small businesses regarding delays in 
payment, false reporting and the use of ``bait and switch'' tactics by 
prime contractors.
  The bill holds prime contractors responsible for the validity of 
subcontracting data, requiring the CEO to certify to the accuracy of 
the subcontracting report under penalty of law. It also expands the 
penalties for falsifying data included in subcontracting reports to 
match the $500,000 or 10

[[Page S12090]]

years in prison for businesses that falsify their status as a small and 
disadvantaged business. If one intentionally falsifies data as a part 
of a subcontracting report to a Federal agency, he is defrauding the 
United States government and will be punished to the full extent of the 
law.
  During the committee's reauthorization roundtables, we heard numerous 
accounts of subcontractors receiving late payments or partial payments 
from their prime contractors. Small firms do not have the luxury of 
waiting for their payments when they have invested time and money to 
provide their products and services to the prime contractor. To address 
this concern, the bill directs the SBA to create a three-year pilot 
program, which tests the feasibility of direct payment to 
subcontractors from the Federal agencies that are receiving the 
contracts and or services.
  In 2000, Congress passed legislation to implement a limited 
competition, set-aside program for women-owned businesses, intended to 
assist agencies to increase contracting to these firms and help to meet 
the five percent government-wide goal. The original bill amended the 
Small Business Act in section 8(m)(4) to require the SBA Administrator 
to complete a study to identify industries in which women-owned 
businesses are under-represented and report to Congress. The original 
study has been completed, but has been delayed by a subsequent study of 
the original study's ``methodology,'' causing the program to be delayed 
indefinitely rather than be implemented in 2002, as it should have 
been. This bill expedites the implementation of the already overdue 
program by reassigning the responsibility of the study from the SBA to 
the GAO and giving the Comptroller a deadline of December 31, 2003, to 
report his findings to Congress.

  During this time of economic downturn, we must ensure that long-term 
strategies of reorganization and restructuring do not have immediate 
negative impacts on our communities. One example of this is the 
economic impact on surrounding areas when a military base is closed. 
The loss of contracts to small businesses, jobs and resources can 
cripple a community's economy. To reduce the impact on these regions, 
this bill utilizes a contracting program, called the HUBZone program, 
intended to target under-served areas and maintain the profitability of 
the firms located within these areas. This bill will allow military 
installations that are closed after passage of this legislation to 
receive HUBZone status. Senator Snowe and I have included a further 
provision within the managers' amendment of S. 1375, which would limit 
this special classification for 5 years after the closure of the base. 
The intent of the immediate qualification of these areas is to allow 
for a smoother transition of the base to commercial use by encouraging 
small businesses to relocate to those facilities, through Federal 
contracting opportunities, and employing the workers in that area. 
Additional options for assistance for these areas are available through 
the SBA if these areas do not receive continued economic stability 
following the expiration of the 5-year HUBZone status.
  I want to thank Chair Snowe and her able staff for all of their 
cooperation over the past several months. I would like to thank the 
members of the Senate Committees on Armed Services and Government 
Reform for working closely with me and my staff to ensure that this 
bill meets the needs of the Federal Government's diverse procurement 
offices as they work to ensure that the government receives the 
essential goods and services it requires. I also want to express my 
gratitude to all the members of the committee for their diligent 
efforts to improve this legislation and urge them and my other Senate 
colleagues to support the Small Business Administration 50th 
Anniversary Reauthorization Act of 2003.
  Mr. BOND. Mr. President, I rise today in recognition of S. 1375, the 
Small Business Administration 50th Anniversary Reauthorization Act of 
2003. This bill revitalizes existing SBA programs and brings to life 
new pilot programs, all of which promote the demands and growth of the 
small business community. I commend the chair, Senator Snowe, for 
passing this bill through the Small Business Committee with unanimous 
support.
  Upon final passage of this bill, we will take a giant step toward 
improving and refining the SBA and its programs. With the new 
provisions that enhance agency record-keeping and realign program 
operations under a more appropriate department, it is clear that agency 
accountability and oversight will be strengthened. In addition, small 
businesses will benefit from improvements in the leading programs, 
greater access to capital, new innovations in the entrepreneurial 
programs, expansion of procurement programs, and improved training and 
assistance provisions.
  According to the SBA's Office of Advocacy, small businesses represent 
more than 99.7 percent of all employers, employ more than half of all 
private sector employees, and generate 60 to 80 percent of net new jobs 
annually. Given these statistics and the difficult financial times we 
face in today's economy, I urge Congress to continue to nurture the 
needs of the small business community. We must show enthusiastic 
support for this bill, which I am confident will provide the SBA with 
greater tools to keep pace with the ever-changing global economy and to 
serve the small business community in a more effective and efficient 
manner. To act otherwise could jeopardize this Nation's much needed job 
growth and innovation.
  Before I yield the floor, I refer to an important small business 
program titled the Historically Underutilized Business Zone Contracting 
Program, or as it is commonly referred to, the HUBZone program. This 
small-business program was one of my personal priorities as former 
chairman of the Senate Small Business Committee. It was established in 
1997 with the intent to create jobs in severely economically distressed 
communities, both rural and urban. In addition, the HUBZone program 
provides a Federal contracting preference as an incentive for small 
businesses to locate in these low-income areas. The jobs created by the 
HUBZone program bring money to those blighted areas and create a demand 
for more goods and services, which leads to the creation of more small 
businesses and increased commerce in the area. Little by little, the 
community's economic base is reborn.
  Today, there are over 8,378 small businesses that are HUBZone 
certified, and the Government has procured approximately $1.7 billion 
in HUBZone contracting this year. The SBA reports that in FY 2001, each 
dollar spent on the program yielded a return of $288 in contract awards 
and as a result, the program helped to create 12,782 jobs in the United 
States, approximately 8,974 of which were located in distressed areas.
  Based on FY 2001 procurement statistics, HUBZone firms increased 
employment 33 percent to 50 percent as a result of contract awards. 
Nearly 50 percent of HUBZone firms increased capital expenditures as a 
result of receiving contracts in FY 2001. As our economy struggles 
during these difficult times, this vital program will continue to bring 
jobs to our Nation's inner cities, poor rural counties, and Indian 
reservations.
  I urge Congress to support the HUBZone program in its current form 
along with the new amendments provided in the Senate's version of the 
SBA Reauthorization Act of 2003. Any additional changes not supported 
by the full Senate Committee on Small Business could seriously 
undermine the original intent of the program.
  Thank you for the opportunity to speak today on behalf of the small 
business community. I encourage my colleagues to support Senator Snowe 
and S. 1375, the Small Business Administration 50th Anniversary 
Reauthorization Act of 2003.
  Mr. LEVIN. Mr. President, the Small Business Administration 50th 
Anniversary Reauthorization Act of 2003 reflects a bipartisan effort 
that passed the Senate Small Business and Entrepreneurship Committee 
unanimously. This bill reauthorizes many Small Business Administration, 
SBA, programs for 3 years as well as authorizes a number of pilot 
programs.
  The reauthorization bill is a great improvement over the President's 
proposal which would have frozen SBA programs at fiscal year 2003 
funding levels for 6 years. By reauthorizing the SBA over a shorter 3-
year period, as Congress has done traditionally, our

[[Page S12091]]

bill allows Congress to exercise closer oversight than would have been 
the case under a 6-year bill. Our bill is responsive to our Nation's 
small businesses and entrepreneurs, many of whom have no alternative 
credit source and allowing the SBA to make more loans to small 
entrepreneurs. These entrepreneurs provide the job creation and 
business expansion that can result from the small business loans.
  I am pleased the Senate SBA reauthorization bill contains an 
amendment I authored to establish the Small Business Intermediary 
Lending Pilot Program to address the needs of expanding small business. 
The pilot lending program is aimed at businesses that need loans that 
are larger than those available under the SBA microloan program but a 
variety of reasons--including lack of sufficient or conventional 
collateral--are unable to secure the credit they need at the terms they 
need through conventional lenders, even with the assistance of the 7(a) 
program.
  The pilot lending program is designed to work through local non-
profit lending intermediaries. This proposal authorizes the SBA to make 
1 percent, 20-year loans on a competitive basis to up to 20 non-profit 
lending intermediaries around the country. These loans would be used to 
capitalize a revolving loan fund through which the intermediary would 
make loans of between $35,000 and $200,000 to small businesses. Unlike 
the SBA microloan program there would be no technical assistance grant 
provided to the intermediary. All administrative costs or technical 
support provided to business borrowers would be covered by the interest 
rate spread between the lending intermediary's 1 percent loan from the 
SBA and the loans made to the business borrowers.
  While the SBA is committed to ensuring that 7(a) lenders make smaller 
loans, this pilot is designed to reach a sector of small businesses 
that 7(a) lenders cannot and will not reach due to the perceived higher 
risk of these businesses. Many of our States, including Michigan, Maine 
and Idaho, are fortunate to have a health network of community based, 
non-profit intermediary lenders that are experienced and successful in 
meeting the needs of these businesses. This pilot program will give 
them additional tools to help them create badly needed jobs among small 
businesses.
  Finally, I am pleased that the reauthorization bill contains the bill 
providing disaster relief for small businesses damaged by drought. This 
includes a provision I authored which would make eligible small 
businesses hurt by low water levels on the Great Lakes. I am also glad 
to see it includes the childcare lending pilot program to allow 
affordable and low interest SBA 504 loans for non-profit child care 
center. It is my hope that this program will spur the establishment and 
expansion of child care providers.
  Mr. ENZI. Mr. President, I rise today to speak in support of the 
Small Business Administration 50th Anniversary Reauthorization Act of 
2003. There are millions of good reasons why we need to pass this 
important bill today and they are reflected in the millions of small 
businesses around the country that benefit from the support the Small 
Business Administration provides small businesses in Wyoming and around 
the country. Although we do not have time for me to list those millions 
of reasons I can sum them up in just three words--jobs, jobs, jobs.
  It's an expression we have heard many, many times but it is the 
truth--small businesses really are the backbone of our economy. They 
provide careers for the established generation of workers who need jobs 
to raise their families and they provide jobs to the younger generation 
of workers--teens and young adults of my State and many others who are 
looking for employment to help them pay the expenses of school and help 
them learn the lessons of responsibility, commitment and teamwork.
  As a former small business owner myself, I have seen firsthand how a 
paycheck impacts lives and teaches invaluable life lessons and career 
skills. A job is more than a responsibility--it's a precious gift that 
can change your life and help you understand what it means to be a 
contributing member of society.
  In my home state of Wyoming, 96.5 percent of our businesses are small 
businesses and that translates into a lot of jobs and a lot of families 
with food on the table and a roof over their heads thanks to the SBA 
and the programs it provides the people of our country.
  That is why I was so pleased to be a part of the important work on 
the Small Business Administration 50th Anniversary Reauthorization Act 
of 2003. This is truly a historic occasion as we celebrate the SBA's 
successes of the past 50 years and set its course for the years to 
come.
  We've all heard the expression--give a man a fish and you will have 
fed him for today. Teach a man to fish and you will have provided him 
with the tools he will need to feed himself for the rest of his life.
  The SBA operates on a similar principle. It does not give a business 
funding for a day's operation. Instead, it provides the tools, training 
and support necessary to ensure that a business begins to operate on 
firm, solid footing and has a reasonable chance for success.
  Then, when the doors open up and the customers come in, the SBA 
continues to serve as a reference and a source of support to ensure 
that a small business has a place to turn to for advice, encouragement 
and help if things take an unexpected turn for the worse.
  Expect the unexpected--that's not just good advice--it's the focus of 
the SBA's updated disaster authority in this bill. This section is one 
of the changes we were able to make to help ensure that SBA remains 
responsive in the bad times--as well as the good. We were able to 
expand the definition of a disaster to include drought and below 
average water levels in bodies of water that support small businesses. 
That change was clearly needed because the impact of a drought or low 
water level on agriculture is clear to all of us.
  What might not be so clear is how these water problems also affect 
tourism and recreational businesses. It wasn't clear before, so these 
businesses often fell through the cracks of Federal assistance. With 
the passage of this bill, however, that crack will be filled in and 
small businesses will no longer suffer from these problems with no help 
or relief in sight.
  Native Americans will also benefit from this bill and find help for 
the terrible challenges poverty and unemployment impose on the Native 
American communities in my State and across the Nation. Promoting the 
creation and development of small businesses in these areas will bring 
much needed assistance to those Native Americans who need a chance to 
help themselves. I believe this approach will work because each tribe 
will actively support it to ensure the program is a success.
  These and many other changes to the SBA will ensure that it remains a 
beacon of support and hope for small businesses that are carefully 
navigating the rough and rocky shores of competition and the thousands 
of details that can slow or destroy a small business at any stage of 
its development.
  As I have already mentioned, our small businesses are the backbone of 
our economy. The Small Business Administration is the lifeblood of our 
small businesses. The support and encouragement of each helps make the 
other more efficient, more productive and more successful.
  Our small businesses and the Small Business Administration have a 
unique and important relationship. They need each other to grow and 
prosper and best of all--as they do--they help the Nation to do the 
same.
  Mr. PRYOR. Mr. President, today the Senate will consider a bill that 
is very important to small business owners and their employees. I am 
referring to S. 1375, the Small Business Administration 50th 
Anniversary Reauthorization Act. The purpose of this bill is to 
reauthorize the many needed initiatives at the SBA--from long-term 
loans and venture capital to help with accessing Government contracts--
that have helped create successful businesses that are now household 
names to many Americans. To name just a few, Callaway Golf, Ben & 
Jerry's, Winnebago, Apple Computer and FedEx. In Arkansas, last year, 
more than 305 businesses got loans through the SBA, and with them 
created jobs and contributed to the local tax base.
  We on the committee have worked hard to review the services available 
to small businesses through the SBA and its lending and counseling 
partners. As

[[Page S12092]]

a result, this bill builds upon what works right at the SBA and 
improves upon areas that need to be updated. The changes are sensible 
and fiscally responsible. We also included an innovative provision to 
address workforce issues.
  I offer my thanks and appreciation to Senator Snowe and Senator Kerry 
for giving me the opportunity to address my concerns regarding some of 
the provisions in the SBA reauthorization bill. One of my initial 
concerns was that we continued to actively support the SBA's 7(a) 
guaranteed business loan and 504 certified business development company 
loans programs.
  Access to capital is one of the most critical issues facing new and 
small businesses alike, particularly for minorities and entrepreneurs 
in inner-city and rural areas who lack sufficient collateral or credit 
to get loans from banks, even when they have a good idea and repayment 
ability. I believe, and am hopeful, that the SBA Reauthorization Act 
will go far in satisfying this demand for capital to those who have 
traditionally been shut out. Additionally, I have endeavored to ensure 
that the SBA 7(a) and 504 programs continue unharmed. I encourage the 
SBA to work with the small business community--the trade associations 
for 7(a) and 504 lenders and borrowers, the National Association of 
Government Guaranteed Lenders and the National Association of 
Development Companies, to ensure they are not harmed.
  Small businesses employ millions of people and provide the fuel for 
our Nation's economic growth. Although most economists aver that the 
recession has ended, employment figures continue to lag behind other 
economic data at a rate that continues to cause me great concern--21 
months of straight job losses means we should be using every tool we 
have to create jobs. With the assistance of Senator Snowe, the SBA 
Reauthorization Act should help to spur job creation and increase 
access to much needed capital for our Nation's small businesses.
  I ask my colleagues to support this bill because we need to enact 
this legislation before many of SBA's programs expire on September 30.
  Ms. LANDRIEU. Mr. President, before the Senate prepares to consider 
and pass S. 1375, the Small Business Administration 50th Anniversary 
Reauthorization Act of 2003, I would like to bring an important issue 
to the Senate's attention that I hope will be addressed in conference 
with the House. It relates to the HUBZone program, specifically the 
price preferences for food aid contracts. I would like to discuss this 
matter with my colleague, the Chair of the Small Business and 
Entrepreneurship Committee, so that we have a clear record of our 
position on the issue prior to final passage of the SBA Reauthorization 
legislation.
  Let me begin by first congratulating her for bringing this bill 
through Committee and to the Senate floor where it will pass 
unanimously. The Committee held informative and useful hearings and 
roundtable discussions to learn from small business owners and leaders 
about the value of the Small Business Administration's programs. We 
also heard from SBA Administrator Hector Barreto, about the Bush 
administration's reauthorization proposal for improving the agency's 
ability to respond to the many challenges facing small businesses and 
the increasing number of start-ups. In the end she put together an 
excellent bill that I supported when it passed the committee 
unanimously. I expect the Senate to do the same.
  Ms. SNOWE. I thank the Senator for her generous comments, and I 
appreciate her work on the Committee. She added an excellent amendment 
to the bill to ensure that the National Women's Business Council 
maintains a bipartisan balance. I thank her for supporting this bill.
  Ms. LANDRIEU. The issue I wanted to bring to your attention relates 
to HUBZone provisions in the House version of the SBA reauthorization. 
HUBZones are distressed urban and rural areas characterized by chronic 
high unemployment and/or low household income. Mr. President, there are 
152 HUBZone companies creating jobs and empowering communities 
throughout my State. Under the program, small businesses that locate in 
a HUBZone, and hire workers who live in the HUBZone, are eligible to 
receive price preferences in bidding on government contracts. These 
price preferences encourage small businesses to locate in our 
distressed communities and help offset the additional costs they face 
as a result of being out of the regular stream of commerce. Price 
preferences also help to even the playing field between HUBZone 
eligible and non-HUBZone firms in competing for contracts. I support 
the HUBZone program. It is providing an economic boost through job 
creation and capital investment to areas of poverty and unemployment 
that really need it.
  Ms. SNOWE. I am also a strong supporter of the HUBZone program. Today 
there are more than 8,300 HUBZone small businesses that helped to 
create more than 30,000 jobs in the last 2 years. In our 
reauthorization bill, the committee has made some minor changes to 
strengthen the program. One of these changes would ensure that 
communities affected by military base closures would receive temporary 
HUBZone eligibility, preventing a significant economic downturn. The 
bill also allows HUBZone companies to receive up to 15 percent 
investment from outside organizations, allowing them to raise capital, 
expand their business and create even more jobs.
  Ms. LANDRIEU. I am pleased that the Senate has decided to leave the 
HUBZone program intact with these limited, but sound modifications. An 
issue has been brought to my attention involving how the Department of 
Agriculture has interpreted legislation regarding the treatment of 
HUBZone price preferences for food aid purchases. The current system 
provides HUBZone firms with a price preference on the first 40 percent 
of a given tender of food aid. A tender is essentially a contract for 
aid that spells out how much of a particular commodity--corn, wheat, 
vegetable oil--would be provided under the contract. The remaining 60 
percent of the contract volume is not subject to the preference, so 
HUBZones companies compete with all other firms, large and small, in 
full and open competition for this portion of the contract.
  The Department of Agriculture has misinterpreted the statute and 
unfairly limited the participation of HUBZone firms to only 40 percent 
of any food aid contract. This effectively locked them out of 60 
percent of every tender contract offered. The Department has since 
corrected its interpretation and is allowing the program to perform as 
it was intended by Congress when these provisions were added to the 
HUBZone program in 2000.
  I am glad that the Department of Agriculture has changed its 
interpretation. Louisiana has 10 HUBZone firms that are exporters and 
may be able to participate in the food aid program and compete now that 
the proper interpretation is in effect. Officials with the Port of Lake 
Charles in Lake Charles, LA came to me and expressed their concern with 
the Department's initial interpretation because they operate in a 
HUBZone and want to attract more businesses to the port. This 
interpretation limited the amount of contracts HUBZone firms were 
eligible to bid on. The correct interpretation allows them to bring new 
businesses to the Lake Charles area and help them to reinvigorate an 
area that is working to regain its footing in the current economic 
climate and provide critical jobs for the families who live there.
  I know there are some who feel that under the current interpretation 
HUBZone firms may have an unfair advantage. I welcome the opportunity 
to work with the chair and the other members of the committee to 
investigate this further. Perhaps the committee could hold a hearing to 
learn more about this issue.
  Ms. SNOWE. I thank the Senator for bringing this to my attention. I 
am happy to work with the Senator on this issue. I thank the Senator 
from Louisiana for her support of this legislation.
  Mr. BAYH. Mr. President, today, the Senate will unanimously pass the 
Small Business Reauthorization Act. This is a critically important 
piece of legislation for the future of small business in America, and 
in turn, for our Nation's economy. Small businesses are the engines of 
economic growth, and they play a vital role in expanding our economy. 
This is something I believe in so strongly that for 2 weeks in August, 
I traveled across the State of

[[Page S12093]]

Indiana to meet with small business owners and to host a series of 
small business summits. The purpose of these summits was to link people 
looking to start or expand their small businesses with every available 
Federal resource that could help them fulfill their dream.
  During my visits in Indiana, I saw first hand the differences small 
businesses can make in their communities. John Roembke, of Ossian, IN, 
used a Small Business Administration loan to start his manufacturing 
and design company nearly 30 years ago. He began as the sole employee 
for his company, but today he employs more than 60 Hoosiers. Each 
Hoosier employed at Roembke Manufacturing represents a family that has 
greater job security and new economic opportunities thanks to John's 
success and help from the SBA.
  Our Nation's unemployment rate now stands at 6.1 percent, and in my 
State, there are pockets of even higher unemployment. What these areas 
need, and what our economy needs, is more job creation, and it is a 
well-known fact that three out of every four new jobs are created by 
our growing and innovative small businesses. Usually, the only hurdle 
standing between a company and its desire to expand and hire new 
workers is capital. Without it, our businesses starve because they 
cannot obtain space, equipment, tooling, and employees. With it, 
creative businesses can secure all of these assets, expand 
productivity, increase sales, add new jobs, and improve the quality of 
life in their communities.
  The legislation we pass today will build on this kind of success, by 
creating jobs, improving access to capital, and strengthening crucial 
disaster assistance programs. Through the efforts of Chairman Snowe, 
Ranking Member Kerry, and my other fellow members of the Small Business 
Committee, the Senate has taken an important step toward reauthorizing 
the Small Business Administration and its important small business 
assistance programs for the next three years.
  Today, I look forward to supporting this bill that reauthorizes the 
most effective capital access programs that exist today in our Federal 
government: the 504 and 7(a) loan guaranty programs. These two programs 
will provide more than $20 billion in both long and short term funding 
to America's small businesses each and every year of this 
reauthorization. In just the last three years, these SBA loan programs 
have created more than 500,000 new jobs nationwide. Over the past three 
years in Indiana, the 504 program alone has provided $125 million in 
capital to small businesses and created 5,000 new jobs. The employees 
who fill the new positions and the entrepreneurs who have expanded 
their businesses return millions of dollars in payroll, sales, income, 
and real estate taxes to the Federal, State, and local governments in 
every county and State each year. These programs also provide specific, 
critical support to businesses that are owned and operated by women, 
minorities, and veterans, groups that sometimes face greater difficulty 
in obtaining capital.
  Best of all, the 504 loan program provides all of these opportunities 
for economic growth at no cost to the taxpayer. The 504 program is 
subsidy-free, financed purely by user fees that borrowers pay to 
finance the risk inherent in the program. The cost to the taxpayers is 
zero.
  Even with these advantages, there are still greater needs for capital 
in Indiana, particularly in the manufacturing sector, which employs 
580,000 Hoosiers, a higher percentage of industrial workers than any 
other State. The manufacturing sector is in crisis. Since July 2000, 
manufacturing has lost 2.6 million jobs--the largest decline during the 
post-World War II era. Recent job losses in manufacturing jobs 
represents nearly 90 percent of total U.S. job losses. Manufacturing 
output has shown virtually no growth since December 2001.
  Manufacturing is, and will continue to be, critical to our country's 
overall economic growth, and for that reason, I want to help our small 
manufacturers that are struggling to compete with the low wages and 
high technology equipment used by our international competitors. In 
order to addresses this need, I offered an amendment during the mark-up 
of this bill that was graciously accepted by the Committee Chair. The 
provision directly address the needs of America's small manufacturers, 
providing them with the additional capital they need to stay 
competitive in both the United States and world markets.
  The provision would increase the 504 maximum loan guaranty for small 
manufacturers to $4 million and alter the job creation capital 
requirements for small manufacturers, allowing small manufacturers to 
create one new job for each $100,000 in 504 loan guarantees. As a 
result of this legislation, companies will be able to obtain new 
equipment, become more competitive and, most importantly, hire new 
workers. Indiana's Certified Development Companies estimate that the 
bill could create between 200 and 400 additional jobs each year.
  The change to the 504 loan program will allow our manufacturers to 
acquire more state-of-the-art equipment and technology to become more 
productive, and lower their operating costs. If small manufacturers are 
allowed to invest in state-of-the-art technology, and remain 
competitive with foreign competitors, this will put more hardworking 
Hoosiers back to work. Further, these jobs will provide higher wages 
and benefits than we see available in many communities today, thereby 
improving our quality of life.
  This legislation will provide the fuel that our manufacturers need to 
remain competitive in world market and to create jobs for workers at 
home. I commend the Senate for passing this bill and hope that the 
Senate and the House will reconcile their differences quickly so that 
this critical legislation can go to the President's desk for his 
signature.


                         on-demand air service

  Mr. WYDEN. Mr. President, I want to take a moment to highlight a 
particular issue that my staff has been talking to the Small Business 
Administration, SBA about. This relates to an Oregon company named 
SkyTaxi, which has an innovative and ambitious business plan for 
providing on-demand air service to small communities. As my colleague 
from Maine knows better than most, small and rural communities are 
often gravely underserved by commercial airlines. These are places 
where transportation links are a make-or-break issue for local economic 
opportunity. But, as a recent General Accounting Office report 
concluded last January, the trend is not positive. The current turmoil 
in the airline industry hits small communities hard, because those are 
the first places airlines trim or eliminate service when they are 
looking to cut costs. And most efforts to promote air service to small 
communities have met with limited long-term success.
  Ms. SNOWE. I agree with the Senator that attracting new air service 
and retaining current service to small communities is a critical 
economic issue. I am also familiar with the GAO report to which he 
refers, since Senator Wyden and I were two of the three Senate 
requesters of that report, together with our colleague on the Aviation 
Subcommittee, Senator Rockefeller.
  Mr. WYDEN. The Senator may recall, then, that the GAO report briefly 
discusses SkyTaxi as a potential alternative way to provide air service 
to small communities. The report observes that SkyTaxi offers a 
business model that is still relatively new, but that could help meet 
some of the needs of small communities.
  Ms. SNOWE. I share the Senator's view that it is critical to explore, 
support and promote alternative approaches for meeting the 
transportation needs of small and rural communities. This includes 
ensuring that Federal agencies take the appropriate action to provide 
financial assistance to small business franchisees interested in 
helping communities improve transportation services.
  Mr. WYDEN. SkyTaxi intends to operate through a franchise system, in 
which individual small businesses would purchase small aircraft and 
operate local SkyTaxi franchises. But purchasing an aircraft takes a 
substantial amount of capital, and many potential franchise owners--
such as laid-off commercial pilots who now wish to start their own 
businesses--find that financing for aviation-related businesses is 
currently very difficult to obtain. SkyTaxi therefore expects and hopes 
that potential franchise owners

[[Page S12094]]

would be able to turn to the SBA and its lending partners for small 
business loans, in order to get up and running.
  The problem now arises because, in order to satisfy FAA safety 
requirements and obtain FAA certification, SkyTaxi needs to retain 
certain authority over safety matters, including ensuring the 
competence of flight crew and the quality of aircraft maintenance.
  It has set up its franchise agreement accordingly. Unfortunately, the 
SBA has so far taken the position that, due to the authority vested in 
SkyTaxi in the franchise agreement, the SBA would view each of the 
individual franchise owners as ``affiliated'' with Sky-Tax and each 
other--and thus ineligible to apply for individual SBA guarantee loans.
  My staff has been in contact with the SBA about this, and I am 
hopeful that this eligibility problem can be solved. For example, it 
may be possible to work with FAA to clarify the limits of SkyTaxi's 
safety-related authority over franchisees, and to rework the franchise 
agreement to preserve SBA loan eligibility. But for that to happen, 
it's going to take a commitment from the SBA to work on a cooperative 
basis to try to find a solution. If the SBA will roll up its sleeves 
and work creatively with my office and with SkyTaxi, then I think the 
problem can be solved to everyone's satisfaction. And in the end, the 
real beneficiaries could be rural communities.
  Ms. SNOWE. As chair of the Small Business Committee, I am concerned 
by any interpretation of the Small Business Act that unnecessarily 
inhibits access to SBA programs and services by eligible small 
businesses. This interpretation not only affects the ability of small 
businesses to receive financial assistance under the 7(a) loan program 
but also to bid on Federal contracts set aside for small businesses. As 
the economy struggles to recover, it is critical that we get back to 
business--an investment in small business is an investment in jobs.
  As we work with our colleagues on the House Small Business Committee 
to reauthorize the SBA's programs and services, we will carefully 
consider provisions to address this issue and work with the SBA to find 
an agreeable solution.
  Mr. WYDEN. I thank the Senator for her assistance with this issue, 
and for her consistent and careful attention to small business issues 
and rural transportation issues alike.
  Mr. FRIST. I ask unanimous consent that the committee-reported 
amendments be agreed to, the managers' amendment at the desk be agreed 
to, the bill, as amended, be read a third time and passed, the motion 
to reconsider be laid upon the table, and any statements relating to 
the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendments were agreed to.
  The amendment (No. 1788) was agreed to, as follows:

  (Purpose: To make technical corrections to the bill, and for other 
                               purposes)

       On page 87, strike line 7 and all that follows through page 
     91, line 4.
       On page 91, strike line 23 and all that follows through 
     page 92, line 5, and insert the following:
       Section 351(3)(A)(ii) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 689(3)(A)(ii)) is amended--
       (1) in subclause (I), by striking ``50 percent or more'' 
     and all that follows and inserting ``the median family income 
     for such tract does not exceed 80 percent of the greater of 
     the statewide median family income or metropolitan area 
     median family income; or''; and
       (2) in subclause (II), by striking ``household income'' 
     each place it appears and inserting ``family income''.
       On pages 109 through 110, redesignate paragraphs (6) 
     through (13) as paragraphs (7) through (14), respectively.
       On page 109, between lines 2 and 3, insert the following:
       ``(6) Disadvantaged native american entrepreneur.--The term 
     `disadvantaged Native American entrepreneur' means a 
     disadvantaged entrepreneur who is also a member of an Indian 
     Tribe.''
       On page 111, line 21, strike ``and'' and all that follows 
     through ``(4)'' on line 22, and insert the following:
       ``(4) to provide training and technical assistance to 
     disadvantaged Native American entrepreneurs and prospective 
     entrepreneurs; and
       ``(5)''
       On page 117, strike lines 9 through 14 and insert the 
     following:
       ``(i) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the Administrator $15,000,000 for each of the fiscal years 
     2004 through 2006 to carry out the provisions of this 
     section, which shall remain available until expended.
       ``(2) Training for native american entrepreneurs.--In 
     addition to the amount authorized under subsection (i)(1), 
     there are authorized to be appropriated to the Administrator 
     $2,000,000 for each of the fiscal years 2004 through 2006 to 
     carry out the provisions of subsection (c)(4), which shall 
     remain available until expended.''
       On page 190, strike line 21 and all that follows through 
     ``(iii)'' on page 191, line 1, and insert the following:
       ``(ii)''.
       On page 192, strike line 11 and all that follows through 
     page 193, line 6, and insert the following:

     SEC. 403. SMALL BUSINESS PARTICIPATION IN PRIME CONTRACTING.

       (a) Reserved Contracts.--Section 15(j) of the Small 
     Business Act (15 U.S.C. 644(j)) is amended by adding at the 
     end the following:
       ``(4) Any adjustment to the simplified acquisition 
     threshold (as defined in section 4(11) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403(11))), shall be 
     immediately matched by an identical adjustment to the small 
     business reserve for purposes of this subsection.''.
       (b) Participation in Multiple Award Contracts.--Section 
     15(j) of the Small Business Act (15 U.S.C. 644(j)) is 
     amended--
       (1) in paragraph (2), by striking ``(2) In carrying out 
     paragraph (1)'' and inserting ``(3) In carrying out 
     paragraphs (1) and (2)'';
       (2) in paragraph (3), by striking ``(3) Nothing in 
     paragraph (1)'' and inserting ``(4) Nothing in this 
     subsection''; and
       (3) by adding after paragraph (1) the following:
       ``(2)(A) In the case of orders under multiple award 
     contracts, including Federal Supply Schedule contracts and 
     multi-agency contracts, that are subject to the small 
     business reserve, contracting officers shall consider not 
     less than 2 small business concerns if such small business 
     concerns can offer the items sought by the contracting 
     officer on competitive terms, with respect to price, quality, 
     and delivery schedule, with the goods or services available 
     in the market.
       ``(B) If only 1 small business concern can satisfy the 
     requirement, the contracting officer shall include such small 
     business concern in their evaluation.''.
       (c) Report Requirement.--
       (1) In general.--Not less than once every 180 days, the 
     Comptroller General shall submit a report on the level of 
     participation in multiple award contracts, including the 
     Federal Supply Schedule to--
       (A) the Small Business Administration;
       (B) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (C) the Committee on Small Business of the House of 
     Representatives.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall contain, for the 6-month reporting period--
       (A) the total number of multiple award contracts;
       (B) the total number of small business concerns that 
     received multiple award contracts;
       (C) the total number of orders;
       (D) the total value of orders;
       (E) the number of orders received by small business 
     concerns;
       (F) the value of orders received by small business 
     concerns;
       (G) the number of small business concerns that received 
     orders; and
       (H) such other information that the Comptroller General 
     considers relevant.
       On page 193, strike line 14 and all that follows through 
     page 194, line 7, and insert the following:
       (2) in subparagraph (F), by striking the period at the end 
     and inserting ``; and''; and
       ``(G) certification that the offeror or bidder will acquire 
     articles, equipment, supplies, services, or materials, or 
     obtain the performance of construction work from small 
     business concerns in the amount and quality used in preparing 
     the bid or proposal, unless such small business concerns are 
     no longer in business or can no longer meet the quality, 
     quantity, or delivery date.''.
       (b) Penalties for False Certifications.--Section 16(f) of 
     the Small Business Act (15 U.S.C. 645(f)) is amended by 
     striking ``of this Act'' and inserting ``or the reporting 
     requirements of section 8(d)(11)''.
       On page 195, strike lines 4 through 19 and insert the 
     following:
       (1) by redesignating paragraph (11) as paragraph (14); and
       (2) by inserting after paragraph (10) the following:
       ``(11) Certification.--A report submitted by the prime 
     contractor pursuant to paragraph (6)(E) to determine the 
     attainment of a subcontract utilization goal under any 
     subcontracting plan entered into with a Federal agency under 
     this subsection shall contain the name and signature of the 
     president or chief executive officer of the contractor, 
     certifying that the subcontracting data provided in the 
     report are accurate and complete.
       ``(12) Centralized database.--The results of an evaluation 
     under paragraph (10)(C) shall be included in a national 
     centralized governmentwide database.
       ``(13) Payments pending reports.--Each Federal agency 
     having contracting authority shall ensure that the terms of 
     each contract for goods and services includes a provision

[[Page S12095]]

     allowing the contracting officer of an agency to withhold an 
     appropriate amount of payment with respect to a contract 
     (depending on the size of the contract) until the date of 
     receipt of complete, accurate, and timely subcontracting 
     reports in accordance with paragraph (11).''.
       On page 196, lines 17 and 18, strike ``performance, or lack 
     of performance of the subcontractor.'' and insert 
     ``circumstances surrounding the failure to make the timely 
     payment described in subparagraph (A).''.
       On page 199, line 3, strike ``(b)'' and insert the 
     following:
       (b) HUBZone Status Timeline and Commencement.--
       (1) In general.--A base closure area shall be treated as a 
     HUBZone for a period of 5 years beginning on the date of 
     final closure. A military base that was closed before the 
     date of enactment of this Act shall not be considered a base 
     closure area for purposes of this section.
       (2) Effective date.--This section and the amendments made 
     by this section shall take effect on the date of enactment of 
     this Act.
       (c)
  The bill (S. 1375), as amended, was considered read the third time 
and passed, as follows:
  (The bill will be printed in a future edition of the Record.)

                          ____________________