[Congressional Record Volume 169, Number 129 (Wednesday, July 26, 2023)]
[Senate]
[Pages S3687-S3695]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 1068. Mr. CARDIN submitted an amendment intended to be proposed by 
him to the bill S. 2226, to authorize appropriations for fiscal year 
2024 for military activities of the Department of Defense, for military 
construction, and for defense activities of the Department of Energy, 
to prescribe military personnel strengths for such fiscal year, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

                   DIVISION I--SMALL BUSINESS MATTERS

     SEC. 11001. DEFINITIONS.

       In this division:
       (1) Administration.--The term ``Administration'' means the 
     Small Business Administration.
       (2) Administrator.--The term ``Administrator'' means the 
     Administrator of the Administration.
       (3) Small business concern.--The term ``small business 
     concern'' has the meaning given the term in section 3 of the 
     Small Business Act (15 U.S.C. 632).

TITLE LXIX--COMMUNITY ADVANTAGE LOAN PROGRAM AND SMALL BUSINESS LENDING 
                               COMPANIES

        Subtitle A--Community Advantage Loan Program Act of 2023

     SEC. 11101. SHORT TITLE.

       This subtitle may be cited as the ``Community Advantage 
     Loan Program Act of 2023''.

     SEC. 11102. COMMUNITY ADVANTAGE LOAN PROGRAM.

       (a) In General.--Section 7(a) of the Small Business Act (15 
     U.S.C. 636(a)) is amended by adding at the end the following:
       ``(38) Community advantage loan program.--
       ``(A) Purposes.--The purposes of the Community Advantage 
     Loan Program are--
       ``(i) to create a mission-oriented loan guarantee program;
       ``(ii) to increase lending to small business concerns in 
     underserved and rural markets, including to new businesses;
       ``(iii) to ensure that the program under this subsection 
     expands inclusion and more broadly meets congressional intent 
     to reach borrowers who are unable to get credit elsewhere on 
     reasonable terms and conditions;
       ``(iv) to help underserved small business concerns become 
     bankable by utilizing the small dollar financing and business 
     support experience of mission-oriented lenders;
       ``(v) to allow certain mission-oriented lenders, primarily 
     financial intermediaries focused on economic development in 
     underserved markets, access to guarantees for loans under 
     this subsection (referred to in this paragraph as `7(a) 
     loans') and provide management and technical assistance to 
     small business concerns as needed; and
       ``(vi) to assist covered institutions with providing 
     business support services and technical assistance to small 
     business concerns, when needed.
       ``(B) Definitions.--In this paragraph:
       ``(i) Community advantage network partner.--The term 
     `Community Advantage Network Partner'--

       ``(I) means a nonprofit, mission-oriented organization that 
     acts as a Referral Agent to covered institutions in order to 
     expand the reach of the program to small business concerns in 
     underserved markets; and
       ``(II) does not include a covered institution making loans 
     under the program.

       ``(ii) Covered institution.--The term `covered institution' 
     means an entity that--

       ``(I) is--

       ``(aa) a development company, as defined in section 103 of 
     the Small Business Investment Act of 1958 (15 U.S.C. 662), 
     participating in the 504 Loan Guaranty program established 
     under title V of that Act (15 U.S.C. 695 et seq.);
       ``(bb) a nonprofit intermediary, as defined in subsection 
     (m)(11), participating in the microloan program under 
     subsection (m);
       ``(cc) a non-Federally regulated entity certified as a 
     community development financial institution by the Community 
     Development Financial Institutions Fund established under 
     section 104(a) of the Community Development Banking and 
     Financial Institutions Act of 1994 (12 U.S.C. 4703(a)); or
       ``(dd) an eligible intermediary, as defined in subsection 
     (l)(1), participating in the small business intermediary 
     lending program established under subsection (l)(2); and

       ``(II) has approved and disbursed 10 similarly sized loans 
     in the preceding 24-month period and is servicing not less 
     than 10 similarly sized loans to small business concerns in 
     the portfolio of the entity.

       ``(iii) Existing business.--The term `existing business' 
     means a small business concern that has been in existence for 
     not less than 2 years on the date on which a loan is made to 
     the small business concern under the program.
       ``(iv) New business.--The term `new business' means a small 
     business concern that has been in existence for not more than 
     2 years on the date on which a loan is made to the small 
     business concern under the program.
       ``(v) Program.--The term `program' means the Community 
     Advantage Loan Program established under subparagraph (C).
       ``(vi) Referral agent.--The term `Referral Agent' has the 
     meaning given the term in section 103.1(f) of title 13, Code 
     of Federal Regulations, or any successor regulation.
       ``(vii) Rural area.--The term `rural area' means any county 
     that the Bureau of the Census has defined as mostly rural or 
     completely rural in the most recent decennial census.
       ``(viii) Small business concern in an underserved market.--
     The term `small business concern in an underserved market' 
     means a small business concern--

       ``(I) that is located in--

       ``(aa) a low- to moderate-income community;
       ``(bb) a HUBZone, as that term is defined in section 31(b);
       ``(cc) a rural area;
       ``(dd) a community that has been designated as an 
     empowerment zone or enterprise community under section 1391 
     of the Internal Revenue Code of 1986;
       ``(ee) a community that has been designated as a qualified 
     opportunity zone under section 1400Z-1 of the Internal 
     Revenue Code of 1986; or
       ``(ff) a community that has been designated as a promise 
     zone by the Secretary of Housing and Urban Development;

       ``(II) for which more than 50 percent of the employees 
     reside in a low- or moderate-income community;
       ``(III) that is a new business; or
       ``(IV) that is owned and controlled by veterans or spouses 
     of veterans.

       ``(C) Establishment.--There is established a Community 
     Advantage Loan Program under which the Administration may 
     guarantee loans closed by covered institutions under this 
     subsection, with an emphasis on loans made to small business 
     concerns in underserved markets.
       ``(D) Program levels.--In fiscal year 2024 and each fiscal 
     year thereafter, not more than 10 percent of the number of 
     loans guaranteed under this subsection may be guaranteed 
     under the program.
       ``(E) Grandfathering of existing lenders.--Any covered 
     institution that was licensed by the Administrator as a 
     Community Advantage small business lending company, or that 
     participated in the Community Advantage Pilot Program of the 
     Administration, during the period beginning on May 1, 2023, 
     and ending on September 30, 2023, and was in good standing 
     during that period, as determined by the Administration--
       ``(i) shall be designated as participants in the program;
       ``(ii) shall not be required to submit an application to 
     participate in the program; and
       ``(iii) for the purpose of determining the loan loss 
     reserve amount of the covered institution, shall have 
     participation in the Community Advantage Pilot Program 
     included in the calculation under subparagraph (J).
       ``(F) Requirement to make loans to underserved markets.--
     Not less than 60 percent of loans closed by a covered 
     institution

[[Page S3688]]

     under the program shall consist of loans made to small 
     business concerns in underserved markets.
       ``(G) Maximum loan amount; collateral.--
       ``(i) Maximum loan amount.--

       ``(I) In general.--Except as provided in subclause (II), 
     the maximum loan amount for a loan guaranteed under the 
     program is $350,000.
       ``(II) Experienced lenders.--

       ``(aa) In general.--The Administrator may approve not more 
     than 8 covered institutions (referred to in this subclause as 
     the `experienced lenders'), each of which has not less than 5 
     years of experience making loans under the Community 
     Advantage Pilot Program of the Administration or the program 
     established under this paragraph, to be eligible to make 
     loans under this subclause.
       ``(bb) Maximum loan amount.--Subject to item (dd), an 
     experienced lender may make a loan guaranteed under the 
     program in an amount that is not more than $750,000.
       ``(cc) Participation by the administration.--With respect 
     to an agreement to participate in a loan made under this 
     subclause on a deferred basis, the participation by the 
     Administration shall be--
       ``(AA) 75 percent of the balance of the financing 
     outstanding at the time of the disbursement of the loan, if 
     that balance is more than $350,000;
       ``(BB) as described in clause (i) of paragraph (2)(G), if 
     the balance of the financing outstanding at the time of the 
     disbursement of the loan is as described in that clause; or
       ``(CC) as described in clause (ii) of paragraph (2)(G), if 
     the balance of the financing outstanding at the time of the 
     disbursement of the loan is as described in that clause.
       ``(dd) Requirements to make loans in certain amounts.--Not 
     less than 60 percent of loans closed by each experienced 
     lender under the program shall consist of loans in an amount 
     that is not more than $350,000.
       ``(ii) Collateral.--

       ``(I) In general.--A covered institution shall not be 
     required to take collateral with respect to a loan guaranteed 
     under the program if the amount of that loan is not more than 
     $50,000.
       ``(II) Policies and procedures of covered institution.--In 
     determining the amount of collateral required with respect to 
     a loan guaranteed under the program, a covered institution 
     may use the collateral policies and procedures of the covered 
     institution with respect to similarly sized commercial loans 
     closed by the covered institution that are not guaranteed by 
     the Administration.

       ``(H) Interest rates.--The maximum allowable interest rate 
     prescribed by the Administration on any financing made on a 
     deferred basis pursuant to the program shall not exceed the 
     maximum allowable interest rate under sections 120.213 and 
     120.214 of title 13, Code of Federal Regulations, or any 
     successor regulations.
       ``(I) Refinancing of community advantage program loans.--A 
     loan guaranteed under the program or guaranteed under the 
     Community Advantage Pilot Program of the Administration may 
     be refinanced into another 7(a) loan made by a lender that 
     does not participate in the program.
       ``(J) Loan loss reserve requirements.--
       ``(i) Loan loss reserve account for covered institutions.--
     A covered institution--

       ``(I) with not more than 5 years of participation in the 
     program shall maintain a loan loss reserve account with an 
     amount equal to 5 percent of the outstanding amount of the 
     unguaranteed portion of the loan portfolio of the covered 
     institution under the program; and
       ``(II) with more than 5 years of participation in the 
     program shall maintain a loan loss reserve account with an 
     amount equal to the average repurchase rate of the covered 
     institution over the preceding 36-month period, except that 
     such amount shall not be less than 3 percent of the 
     outstanding amount of the unguaranteed portion of the loan 
     portfolio of the covered institution under the program.

       ``(ii) Additional loan loss reserve amount for selling 
     loans on the secondary market.--In addition to the amount 
     required in the loan loss reserve account under clause (i), a 
     covered institution that sells a program loan on the 
     secondary market shall be required to maintain the following 
     additional amounts in the loan loss reserve account:

       ``(I) For a covered institution with less than 5 years of 
     experience selling program loans on the secondary market, an 
     amount equal to 3 percent of the guaranteed portion of each 
     program loan sold on the secondary market.
       ``(II) For a covered institution with more than 5 years of 
     experience selling program loans on the secondary market, an 
     amount equal to the average repurchase rate for loans sold by 
     the covered institution on the secondary market over the 
     preceding 36 months, except that such amount shall be not 
     less than 2 percent of the guaranteed portion of each program 
     loan sold into the secondary market.

       ``(iii) Recalculation.--On October 1 of each year, the 
     Administrator shall recalculate the loan loss reserve 
     required under clauses (i) and (ii).
       ``(K) Training.--The Administration--
       ``(i) shall provide accessible upfront and ongoing training 
     for covered institutions making loans under the program to 
     support program compliance and improve the interface between 
     the covered institutions and the Administration, which shall 
     include--

       ``(I) guidance for following the regulations of the 
     Administration; and
       ``(II) guidance specific to mission-oriented lending that 
     is intended to help lenders effectively reach and support 
     small business concerns in underserved markets, including 
     management and technical assistance delivery;

       ``(ii) may enter into a contract to provide the training 
     described in clause (i) with an organization--

       ``(I) with expertise in lending under this subsection; and
       ``(II) primarily specializing in--

       ``(aa) mission-oriented lending; and
       ``(bb) lending to small business concerns in underserved 
     markets; and
       ``(iii) shall provide training for the employees and 
     contractors of the Administration that regularly engage with 
     covered institutions or borrowers under the program.
       ``(L) Community advantage outreach and education.--The 
     Administrator--
       ``(i) shall develop and implement a program to promote to, 
     conduct outreach to, and educate prospective covered 
     institutions about the program; and
       ``(ii) may enter into a contract with 1 or more nonprofit 
     organizations experienced in working with and training 
     mission-oriented lenders to provide the promotion, outreach, 
     and education described in clause (i).
       ``(M) Community advantage network partner participation.--
       ``(i) In general.--A covered institution that uses a 
     Community Advantage Network Partner shall abide by policies 
     and procedures of the Administration concerning the use of 
     Referral Agent fees permitted by the Administration and 
     disclosure of those fees.
       ``(ii) Payment of fees.--Notwithstanding any other 
     provision of law, all fees described in clause (i) shall be 
     paid by the covered institution to the Community Advantage 
     Network Partner upon disbursement of the applicable program 
     loan.
       ``(N) Delegated authority.--A covered institution is not 
     eligible to receive delegated authority from the 
     Administration under the program until the covered 
     institution has satisfied the following applicable 
     requirements:
       ``(i) For a covered institution actively participating in 
     the Community Advantage Pilot Program of the Administration, 
     as of the day before the date of enactment of this 
     paragraph--

       ``(I) the covered institution has approved and fully 
     disbursed not fewer than 10 loans under that Pilot Program; 
     and
       ``(II) the Administration has evaluated the ability of the 
     covered institution to fulfill program requirements.

       ``(ii) For any covered institution not described in clause 
     (i)--

       ``(I) the covered institution has approved and fully 
     disbursed not fewer than 20 loans under the program; and
       ``(II) the Administration has evaluated the ability of the 
     covered institution to fulfill program requirements.

       ``(O) Reporting.--
       ``(i) Weekly reports.--

       ``(I) In general.--The Administration shall report on the 
     website of the Administration, as part of the weekly reports 
     on lending approvals under this subsection--

       ``(aa) on and after the date of enactment of this 
     paragraph, the number and dollar amount of loans guaranteed 
     under the Community Advantage Pilot Program of the 
     Administration; and
       ``(bb) on and after the date on which the Administration 
     begins to approve loans under the program, the number and 
     dollar amount of loans guaranteed under the program.

       ``(II) Separate accounting.--The number and dollar amount 
     of loans reported in a weekly report under subclause (I) for 
     loans guaranteed under the Community Advantage Pilot Program 
     of the Administration and under the program shall include a 
     breakdown by the demographic information of the owners of the 
     small business concerns, by whether the small business 
     concern is a new business or an existing business, and by 
     whether the small business concern is located in an urban or 
     rural area, and broken down by--

       ``(aa) loans of not more than $50,000;
       ``(bb) loans of more than $50,000 and not more than 
     $150,000;
       ``(cc) loans of more than $150,000 and not more than 
     $250,000;
       ``(dd) loans of more than $250,000 and not more than 
     $350,000; and
       ``(ee) loans of more than $350,000 and not more than 
     $750,000.
       ``(ii) Annual reports.--

       ``(I) In general.--For each fiscal year in which the 
     program is in effect, the Administration shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives, and make publicly available on the internet, 
     information about loans provided under the program and under 
     the Community Advantage Pilot Program of the Administration.
       ``(II) Contents.--Each report submitted and made publicly 
     available under subclause (I) shall include--

       ``(aa) the number and dollar amounts of loans provided to 
     small business concerns under the program, including a 
     breakdown by--
       ``(AA) the demographic information of the owners of the 
     small business concern;
       ``(BB) whether the small business concern is located in an 
     urban or rural area; and
       ``(CC) whether the small business concern is an existing 
     business or a new business, as

[[Page S3689]]

     provided in the weekly reports on lending approvals under 
     this subsection;
       ``(bb) the proportion of loans described in item (aa) 
     compared to--
       ``(AA) other 7(a) loans of any amount;
       ``(BB) other 7(a) loans of similar amounts;
       ``(CC) express loans provided under paragraph (31) of 
     similar amounts; and
       ``(DD) other 7(a) loans of similar amounts provided to 
     small business concerns in underserved markets;
       ``(cc) the number and dollar amounts of loans provided to 
     small business concerns under each category described in 
     subitems (AA), (BB), and (CC) of item (aa), which shall be 
     broken down by--
       ``(AA) loans of not more than $50,000;
       ``(BB) loans of more than $50,000 and not more than 
     $150,000;
       ``(CC) loans of more than $150,000 and not more than 
     $250,000;
       ``(DD) loans of more than $250,000 and not more than 
     $350,000; and
       ``(EE) loans of more than $350,000 and not more than 
     $750,000;
       ``(dd) the number and dollar amounts of loans provided to 
     small business concerns under the program by State, and the 
     jobs created or retained within each State; and
       ``(ee) a list of covered institutions participating in the 
     program and the Community Advantage Pilot Program of the 
     Administration, including--
       ``(AA) the name, location, and contact information, such as 
     the website and telephone number, of each covered 
     institution; and
       ``(BB) a breakdown by the number and dollar amount of the 
     loans approved for small business concerns.

       ``(III) Timing.--An annual report required under this 
     clause shall--

       ``(aa) be submitted and made publicly available not later 
     than December 1 of each year; and
       ``(bb) cover the lending activity for the fiscal year that 
     ended on September 30 of that same year.
       ``(P) GAO report.--Not later than 5 years after the date of 
     enactment of this paragraph, the Comptroller General of the 
     United States shall submit to the Administrator, the 
     Committee on Small Business and Entrepreneurship of the 
     Senate, and the Committee on Small Business of the House of 
     Representatives a report--
       ``(i) assessing--

       ``(I) the extent to which the program fulfills the 
     requirements of this paragraph; and
       ``(II) the performance of covered institutions 
     participating in the program; and

       ``(ii) providing recommendations on the administration of 
     the program and the findings under subclauses (I) and (II) of 
     clause (i).
       ``(Q) Regulations.--
       ``(i) In general.--Not later than 180 days after the date 
     of enactment of this paragraph, the Administrator shall 
     promulgate regulations governing the program, including 
     metrics for lender performance, metrics of success and 
     benchmarks of the program, and criteria for appropriate 
     management and technical assistance.
       ``(ii) Updates.--The Administrator shall consult the report 
     submitted under subparagraph (P) and, not later than 180 days 
     after the date on which the Comptroller General of the United 
     States submits the report, promulgate any necessary changes 
     to existing regulations of the Administration based on the 
     recommendations contained in the report.''.
       (b) Participation.--Section 7(a)(2) of the Small Business 
     Act (15 U.S.C. 636(a)(2)) is amended--
       (1) in subparagraph (A), in the matter preceding clause 
     (i), by striking ``and (F)'' and inserting ``(F), and (G)''; 
     and
       (2) by adding at the end the following:
       ``(G) Participation in the community advantage loan 
     program.--Subject to subparagraph (G)(i)(II)(cc) of paragraph 
     (38), in an agreement to participate in a loan on a deferred 
     basis under that paragraph, the participation by the 
     Administration shall be--
       ``(i) 80 percent of the balance of the financing 
     outstanding at the time of the disbursement of the loan, if 
     that balance is more than $150,000 and not more than 
     $350,000; or
       ``(ii) 90 percent of the balance of the financing 
     outstanding at the time of the disbursement of the loan, if 
     that balance is not more than $150,000.''.

        Subtitle B--Modernizing SBA's Loan Programs Act of 2023

     SEC. 11111. SHORT TITLE.

       This subtitle may be cited as the ``Modernizing SBA's 
     Business Loan Programs Act of 2023''.

     SEC. 11112. FINDINGS.

       Congress finds that--
       (1) in 1982, the Administration placed a moratorium on 
     licensing new small business lending companies because the 
     Administration lacked the resources to effectively service 
     and supervise additional small business lending companies;
       (2) according to the Office of the Inspector General of the 
     Administration, the reduction in staff in the Office of 
     Credit Risk Management of the Administration from 42 full-
     time employees to 29 full-time employees could affect the 
     fiscal year 2023 goals of the Administration for oversight 
     reviews;
       (3) the Administration has finalized a rulemaking to lift 
     the moratorium on the licensing new small business lending 
     companies and establish a new Community Advantage small 
     business lending company license, and there is no cap on the 
     number of small business lending companies licenses that 
     could be issued by the Administration;
       (4) the increased costs and fees for an existing Community 
     Advantage lender in the Community Advantage Pilot Program of 
     the Administration to obtain and maintain a Community 
     Advantage small business lending company license could be 
     cost prohibitive for a majority of current Community 
     Advantage lenders to transition to a Community Advantage 
     small business lending company;
       (5) on May 1, 2023, the Administration announced that the 
     Community Advantage Pilot Program would sunset on September 
     30, 2023, and the authority of a Community Advantage lender 
     to make loans under section 7(a) of the Small Business Act 
     (15 U.S.C. 636(a)) under the pilot program will terminate;
       (6) the Administration does not have adequate resources to 
     issue either more than 3 new small business lending company 
     licenses or new Community Advantage small business lending 
     company licenses, as the Office of Credit Risk Management 
     does not have the capacity to assume additional oversight 
     responsibilities; and
       (7) in order to increase small dollar lending in 
     underserved areas, the Community Advantage Pilot Program 
     should be made permanent, giving lenders certainty to 
     continue to make loans under section 7(a) of the Small 
     Business Act (15 U.S.C. 636(a)).

     SEC. 11113. LENDING CRITERIA.

       (a) 7(a) Loans.--Section 7(a)(1) of the Small Business Act 
     (15 U.S.C. 636(a)(1)) is amended by adding at the end the 
     following:
       ``(D) Underwriting requirements.--
       ``(i) In general.--With respect to a loan guaranteed under 
     this subsection--

       ``(I) the applicant (including an operating company) shall 
     be creditworthy;
       ``(II) the loan must be so sound as to reasonably assure 
     repayment; and
       ``(III) subject to the approval of the Administrator, the 
     Director of the Office of Credit Risk Management may require 
     additional criteria.

       ``(ii) Lending criteria for loans of $350,000 or more.--
     With respect to a loan guaranteed under this section that is 
     not less than $350,000, the Administration and lenders shall, 
     as applicable, consider the following:

       ``(I) Credit history of the applicant (and the operating 
     company, if applicable), and the associates and guarantors of 
     the applicant.
       ``(II) Experience and depth of management.
       ``(III) Strength of the business.
       ``(IV) Past earnings, projected cash flow, and future 
     prospects.
       ``(V) Ability to repay the loan with earnings from the 
     business of the applicant.
       ``(VI) Sufficient invested equity to operate on a sound 
     financial basis.
       ``(VII) Potential for long-term success.
       ``(VIII) Nature and value of collateral (although 
     inadequate collateral may not be the sole reason for denial 
     of a loan application).
       ``(IX) The effect any affiliate of the applicant may have 
     on the ultimate repayment ability of the applicant.

       ``(iii) Lending criteria for loans of less than $350,000.--
     With respect to a loan guaranteed under this section that is 
     less than $350,000--

       ``(I) lenders shall use appropriate and generally 
     acceptable commercial credit analysis processes and 
     procedures consistent with those used for similarly-sized 
     commercial loans that are not guaranteed by the 
     Administration;
       ``(II) the Administration and lenders may use a business 
     credit scoring model; and
       ``(III) the Administration and lenders shall, as 
     applicable, consider--

       ``(aa) the credit score or credit history of the applicant 
     (and the operating company, if applicable), and the 
     associates and guarantors of the applicant;
       ``(bb) the earnings or cash flow of the applicant;
       ``(cc) any equity or collateral of the applicant; and
       ``(dd) the effect any affiliates of the applicant may have 
     on the ultimate repayment ability of the applicant.''.
       (b) 504/CDC Loans.--Section 502 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696) is amended by adding 
     at the end the following:
       ``(8) Underwriting requirements.--
       ``(A) In general.--With respect to a loan made under this 
     section--
       ``(i) the applicant (including an operating company) shall 
     be creditworthy; and
       ``(ii) the loan must be so sound as to reasonably assure 
     repayment.
       ``(B) Lending criteria.--With respect to a loan made under 
     this section--
       ``(i) lenders and certified development companies shall use 
     appropriate and generally acceptable commercial credit 
     analysis processes and procedures consistent with those used 
     for similarly-sized commercial loans that are not guaranteed 
     by the Administration;
       ``(ii) the Administration, lenders, and certified 
     development companies may use a business credit scoring 
     model; and
       ``(iii) the Administration, lenders, and certified 
     development companies shall, as applicable, consider--

       ``(I) the credit score or credit history of the applicant 
     (and the operating company, if applicable), and the 
     associates and guarantors of the applicant;
       ``(II) the earnings or cash flow of the applicant; and
       ``(III) any equity or collateral of the applicant.''.

[[Page S3690]]

  


     SEC. 11114. AFFILIATION AND FRANCHISE DIRECTORY.

       (a) Affiliation Principles.--
       (1) Business loans.--Section 7(a)(1) of the Small Business 
     Act (15 U.S.C. 636(a)(1)), as amended by this subtitle, is 
     amended by adding at the end the following:
       ``(E) Affiliation principles.--Affiliation under any of the 
     circumstances described below is sufficient to establish 
     affiliation for applicants for a loan guaranteed under this 
     subsection:
       ``(i) Affiliation based on ownership.--

       ``(I) In general.--For determining affiliation based on 
     equity ownership, a concern is an affiliate of an individual, 
     concern, or entity that owns or has the power to control more 
     than 50 percent of the voting equity of the concern.
       ``(II) Other officers.--If no individual, concern, or 
     entity is found to control a concern under subclause (I), the 
     Administrator shall deem the board of directors, president, 
     or chief executive officer (or other officers, managing 
     members, or partners who control the management of the 
     concern) to be in control of the concern.
       ``(III) Minority shareholder.--The Administrator shall deem 
     a minority shareholder of a concern to be in control of the 
     concern if that individual or entity has the ability, under 
     the charter, by-laws, or shareholder agreement of the 
     concern, to prevent a quorum or otherwise block action by the 
     board of directors or shareholders of the concern.

       ``(ii) Affiliation arising under stock options, convertible 
     securities, and agreements to merge.--

       ``(I) In general.--In determining the size of a concern, 
     the Administrator shall--

       ``(aa) consider stock options, convertible securities, and 
     agreements to merge (including agreements in principle) to 
     have a present effect on the power to control a concern; and
       ``(bb) treat options, convertible securities, and 
     agreements described in item (aa) as though the rights 
     granted have been exercised.

       ``(II) Agreements to open or continue negotiations.--An 
     agreement to open or continue negotiations towards the 
     possibility of a merger or a sale of stock at some later date 
     is not considered an `agreement in principle' and is not 
     given present effect.
       ``(III) Conditions precedent.--Stock options, convertible 
     securities, and agreements that are subject to conditions 
     precedent that are incapable of fulfillment, speculative, 
     conjectural, or unenforceable under State or Federal law, or 
     where the probability of the transaction (or exercise of the 
     rights) occurring is shown to be extremely remote, are not 
     given present effect.
       ``(IV) Termination of control.--

       ``(aa) In general.--An individual, concern, or other entity 
     that controls 1 or more other concerns cannot use stock 
     options, convertible securities, or agreements to appear to 
     terminate such control before actually doing so.
       ``(bb) Divesting.--The Administrator shall not give present 
     effect to the ability of an individual, concern, or other 
     entity to divest all or part of their ownership interest in a 
     concern in order to avoid a finding of affiliation.
       ``(iii) Affiliation based on management.--Affiliation 
     arises where--

       ``(I) the chief executive officer or president of the 
     applicant concern (or other officers, managing members, or 
     partners who control the management of the concern) also 
     controls the management of 1 or more other concerns;
       ``(II) a single individual, concern, or entity that 
     controls the board of directors or management of 1 concern 
     also controls the board of directors or management of 1 of 
     more other concerns; or
       ``(III) a single individual, concern, or entity controls 
     the management of the applicant concern through a management 
     agreement.

       ``(iv) Affiliation based on identity of interest.--

       ``(I) Definition.--In this clause, the term `close 
     relative' means--

       ``(aa) a spouse, parent, child, or sibling; and
       ``(bb) the spouse of any individual described in item (aa).

       ``(II) Close relatives.--Affiliation arises when there is 
     an identity of interest between close relatives with 
     identical or substantially identical business or economic 
     interests, such as where the close relatives operate concerns 
     in the same or similar industry in the same geographic area.
       ``(III) Aggregated interests.--If the Administrator 
     determines that interests described in subclause (II) should 
     be aggregated, an individual or firm may rebut that 
     determination with evidence showing that the interests deemed 
     to be affiliated are in fact separate.

       ``(v) Affiliation based on franchise and license 
     agreements.--

       ``(I) In general.--The restraints imposed on a franchisee 
     or licensee by its franchise or license agreement generally 
     shall not be considered in determining whether the franchisor 
     or licensor is affiliated with an applicant franchisee or 
     licensee, if the applicant franchisee or licensee has the 
     right to profit from its efforts and bears the risk of loss 
     commensurate with ownership.
       ``(II) Nature of agreement.--For purposes of subclause (I), 
     the Administrator shall only consider the franchise or 
     license agreements of the applicant concern.

       ``(vi) Determining the concern's size.--In determining the 
     size of a concern, the Administrator counts the receipts, 
     employees, or the alternate size standard (if applicable) of 
     the concern whose size is at issue and all of the domestic 
     and foreign affiliates of the concern, regardless of whether 
     the affiliates are organized for profit.
       ``(vii) Exceptions to affiliation.--The exceptions to 
     affiliation described in section 121.103(b) of title 13, Code 
     of Federal Regulations, or any successor regulation, shall 
     apply.''.
       (2) 504/CDC loans.--Section 502 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696), as amended by this 
     subtitle, is amended by adding at the end the following:
       ``(9) Affiliation principles.--Affiliation under any of the 
     circumstances described below is sufficient to establish 
     affiliation for applicants for a loan under this section:
       ``(A) Affiliation based on ownership.--
       ``(i) Ownership of another business.--When the applicant 
     owns more than 50 percent of another business, the applicant 
     and the other business are affiliated.
       ``(ii) Ownership by other businesses.--

       ``(I) In general.--When a business owns more than 50 
     percent of an applicant, the business that owns the applicant 
     is affiliated with the applicant.
       ``(II) Other business owned by owner of applicant.--If a 
     business entity owner that owns more than 50 percent of an 
     applicant also owns more than 50 percent of another business 
     that operates in the same 3-digit North American Industry 
     Classification System subsector as the applicant, then the 
     business entity owner, the other business, and the applicant 
     are all affiliated.

       ``(iii) Ownership by individuals.--When an individual owns 
     more than 50 percent of the applicant and the individual also 
     owns more than 50 percent of another business entity that 
     operates in the same 3-digit North American Industry 
     Classification System subsector as the applicant, the 
     applicant and the individual owner's other business entity 
     are affiliated.
       ``(iv) Less than 50 percent.--When an applicant does not 
     have an owner that owns more than 50 percent of the 
     applicant, if an owner of 20 percent or more of the applicant 
     also owns more than 50 percent of another business entity 
     that operates in the same 3-digit North American Industry 
     Classification System subsector as the applicant, the 
     applicant and the owner's other business entity are 
     affiliated.
       ``(v) Spouse and minor children.--Ownership interests of 
     spouses and minor children shall be combined when determining 
     amount of ownership interest.
       ``(vi) Percentage of ownership.--When determining the 
     percentage of ownership that an individual owns in a 
     business, the Administrator shall consider the pro rata 
     ownership of entities.
       ``(B) Affiliation arising under stock options, convertible 
     securities, and agreements to merge.--
       ``(i) In general.--The Administrator shall--

       ``(I) consider stock options, convertible securities, and 
     agreements to merge (including agreements in principle) to 
     have a present effect on the ownership of an entity; and
       ``(II) treat options, convertible securities, and 
     agreements described in subclause (I) as though the rights 
     granted have been exercised.

       ``(ii) Agreements to open or continue negotiations.--An 
     agreement to open or continue negotiations towards the 
     possibility of a merger or a sale of stock at some later date 
     is not considered an `agreement in principle' and is not 
     given present effect.
       ``(iii) Conditions precedent.--Stock options, convertible 
     securities, and agreements that are subject to conditions 
     precedent that are incapable of fulfillment, speculative, 
     conjectural, or unenforceable under State or Federal law, or 
     where the probability of the transaction (or exercise of the 
     rights) occurring is shown to be extremely remote, are not 
     given present effect.
       ``(iv) Ability to divest.--The Administrator shall not give 
     present effect to individuals', concerns', or other entities' 
     ability to divest all or part of their ownership interest to 
     avoid a finding of affiliation.
       ``(C) Determining the concern's size.--In determining the 
     size of a concern, the Administrator counts the receipts, 
     employees, or the alternate size standard (if applicable) of 
     the concern whose size is at issue and all of the domestic 
     and foreign affiliates of the concern, regardless of whether 
     the affiliates are organized for profit.
       ``(D) Exceptions to affiliation.--The exceptions to 
     affiliation described in section 121.103(b) of title 13, Code 
     of Federal Regulations, or any successor regulation, shall 
     apply.''.
       (b) Franchise Directory.--Not later than 30 days after the 
     date of enactment of this Act, the Administration shall 
     publish and maintain on the website of the Administration a 
     Franchise Directory, which shall contain a list that lenders 
     and certified development companies may use in evaluating 
     whether a franchise is eligible for financing from the 
     Administration.

     SEC. 11115. LOAN AUTHORIZATION.

       (a) 7(a) Loans.--Section 7(a)(1) of the Small Business Act 
     (15 U.S.C. 636(a)(1)), as amended by this subtitle, is 
     amended by adding at the end the following:
       ``(F) Loan authorization.--
       ``(i) In general.--With respect to a loan made or 
     guaranteed under this subsection, the Administration shall 
     issue a written

[[Page S3691]]

     agreement providing the terms and conditions under which the 
     Administration will make or guarantee the loan.
       ``(ii) Not a contract.--A written agreement issued under 
     clause (i) is not a contract to make a loan.''.
       (b) 504/CDC Loans.--Section 502 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696), as amended by this 
     subtitle, is amended by adding at the end the following:
       ``(10) Loan authorization.--
       ``(A) In general.--With respect to a loan made under this 
     section, the Administration shall issue a written agreement 
     providing the terms and conditions under which the 
     Administration will make the loan.
       ``(B) Not a contract.--A written agreement issued under 
     subparagraph (A) is not a contract to make a loan.''.

     SEC. 11116. OVERSIGHT OF SMALL BUSINESS LENDING COMPANIES.

       (a) Definition.--Section 3(r) of the Small Business Act (15 
     U.S.C. 632(r)) is amended, in the matter preceding paragraph 
     (1), by striking ``As used in section 23 of this Act'' and 
     inserting ``In this Act''.
       (b) Capital Requirements; Maximum Number.--Section 7(a)(1) 
     of the Small Business Act (15 U.S.C. 636(a)(1)), as amended 
     by this subtitle, is amended by adding at the end the 
     following:
       ``(G) Additional provisions relating to small business 
     lending companies.--
       ``(i) Maximum number.--

       ``(I) In general.--Not more than 17 small business lending 
     companies may be authorized to make loans under this 
     subsection at any time.
       ``(II) Existing small business lending companies.--

       ``(aa) In general.--Except as provided in subclause (III), 
     each of the 14 small business lending companies authorized to 
     make loans under this subsection as of June 1, 2023 shall 
     retain such authorization on and after the date of enactment 
     of this subparagraph.
       ``(bb) Loss of authorization.--With respect to a lender 
     that, as of the date of enactment of this subparagraph, is 
     authorized as a Community Advantage small business lending 
     company, that lender shall, beginning on that date of 
     enactment--
       ``(AA) no longer have that authorization; and
       ``(BB) be designated as a lender under the Community 
     Advantage Loan Program established under paragraph (38).

       ``(III) Transfer or sale.--The Administrator shall have the 
     discretion to authorize the transfer or sale of a license of 
     a small business lending company to make loans under this 
     subsection to another small business lending company.
       ``(IV) Limitation of delegated authority.--

       ``(aa) In general.--Notwithstanding paragraph (31), any 
     small business lending company that the Administration 
     authorizes after June 1, 2023 to make loans under this 
     subsection shall be ineligible for delegated authority from 
     the Administration to process, close, service, and liquidate 
     certain loans made under this subsection for the 5-year 
     period beginning on the date on which the Administration 
     authorizes the small business lending company to make loans 
     under this subsection.
       ``(bb) Existing sblcs.--Item (aa) shall not apply with 
     respect to each of the 14 small business lending companies 
     authorized to make loans under this subsection as of June 1, 
     2023.
       ``(ii) Minimum capital requirements.--

       ``(I) In general.--Except as provided in subclauses (II) 
     and (III), to be authorized to make loans under this 
     subsection, a small business lending company shall comply 
     with the minimum capital requirements in effect on January 3, 
     2021.
       ``(II) Approved on or after january 4, 2021.--Any small 
     business lending company authorized by the Administration to 
     make loans under this subsection on or after January 4, 2021, 
     including in the event of a change of ownership or control, 
     shall maintain, at a minimum, the greater of--

       ``(aa) unencumbered paid-in capital and paid-in surplus of 
     not less than $5,000,000; or
       ``(bb) an amount equal to 10 percent of the aggregate of 
     its share of all outstanding loans.

       ``(III) Requirements on and after january 4, 2024.--On and 
     after January 4, 2024, each small business lending company 
     that makes or acquires a loan under this subsection shall 
     maintain, at a minimum, the greater of--

       ``(aa) unencumbered paid-in capital and paid-in surplus of 
     not less than $5,000,000; or
       ``(bb) an amount equal to 10 percent of the aggregate of 
     its share of all outstanding loans.
       ``(iii) Criteria for licensing small business lending 
     companies.--The Administrator shall use uniform terms for the 
     licensing of business concerns as small business lending 
     companies and the participation of those companies in the 
     programs under this subsection.''.
       (c) Annual Stress Testing and Reviews.--Section 23(d) of 
     the Small Business Act (15 U.S.C. 650(d)) is amended--
       (1) in paragraph (1), by inserting ``In general.--'' after 
     ``(1)'';
       (2) in paragraph (2), by inserting ``Hearing.--'' after 
     ``(2)'';
       (3) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively;
       (4) by inserting after paragraph (2) the following:
       ``(3) Special supervisory authorities related to small 
     business lending companies.--
       ``(A) Review and revocation of authority.--
       ``(i) In general.--The Director of the Office of Credit 
     Risk Management (in this paragraph referred to as the 
     `Director')--

       ``(I) may review and revoke the authority of a small 
     business lending company to make, service, or liquidate 
     business loans under section 7(a) for performance, excessive 
     losses, or predatory lending;
       ``(II) shall review and may revoke the authority of a small 
     business lending company to make, service, or liquidate 
     business loans under section 7(a) if--

       ``(aa) the early default rate for the small business 
     lending company exceeds the average default rate for all 
     small business lending companies participating in the loan 
     program under section 7(a);
       ``(bb) the small business lending company fails to comply 
     with the requirements under subparagraph (B); or
       ``(cc) the Director finds in an audit conducted under 
     subparagraph (C)(ii) that the small business lending company 
     is not in compliance with 1 or more of the requirements 
     described in subparagraph (C); and

       ``(III) shall revoke the authority of a small business 
     lending company to make, service, or liquidate business loans 
     under section 7(a) if the Director has determined the small 
     business lending company has failed to comply with the 
     requirements in subclause (II) or (III) of subparagraph 
     (B)(ii) for 2 or more years in a row.

       ``(ii) Reporting requirement.--If the Director revokes the 
     authority of a small business lending company to make, 
     service, or liquidate business loans under section 7(a), the 
     Director shall report the revocation, along with details and 
     information describing why that decision was made, to the 
     Office of the Inspector General of the Administration.
       ``(B) Annual stress tests.--
       ``(i) In general.--Each small business lending company 
     shall--

       ``(I) conduct an annual stress test of the portfolio of the 
     small business lending company under section 7(a) in 
     accordance with the requirements under clause (ii); and
       ``(II) report to the Director the findings of each annual 
     stress test conducted under subclause (I).

       ``(ii) Requirements.--Each stress test conducted under 
     clause (i) shall comply with the following requirements:

       ``(I) The small business lending company shall use 
     financial data as of December 31 of the calendar year prior 
     to the reporting year.
       ``(II) The small business lending company shall use the 
     scenarios provided by the Director, which shall reflect a 
     minimum of 2 sets of economic and financial conditions, 
     including baseline and severely adverse scenarios that 
     incorporate consideration of interest rate risk. The Director 
     shall provide a description of the scenarios required to be 
     used by each small business lending company not later than 
     February 15 of the reporting year.
       ``(III) The board of directors and senior management of 
     each small business lending company shall consider the 
     results of the stress tests conducted under this subsection 
     in the normal course of business, including capital planning, 
     assessment of capital adequacy, and risk management practices 
     of the small business lending company.

       ``(C) Compliance with bank secrecy act and anti-money 
     laundering requirements.--
       ``(i) Definition.--In this subparagraph, the term `Bank 
     Secrecy Act' means--

       ``(I) section 21 of the Federal Deposit Insurance Act (12 
     U.S.C. 1829b);
       ``(II) chapter 2 of title I of Public Law 91-508 (12 U.S.C. 
     1951 et seq.); and
       ``(III) subchapter II of chapter 53 of title 31, United 
     States Code.

       ``(ii) Annual reviews.--The Director--

       ``(I) shall conduct annual reviews to ensure that small 
     business lending companies are in compliance with the 
     requirements contained in the regulations issued under clause 
     (iii); and
       ``(II) in conducting a review under subclause (I), may not 
     rely on self-certification by a small business lending 
     company that the small business lending company is in 
     compliance with those requirements.

       ``(iii) Regulations.--Not later than 1 year after the date 
     of enactment of the Modernizing SBA's Business Loan Programs 
     Act of 2023, the Administrator shall, in consultation with 
     other appropriate Federal agencies, issue regulations to 
     provide a framework to ensure that small business lending 
     companies are in compliance with the requirements under the 
     Bank Secrecy Act, including Know Your Customer and anti-money 
     laundering requirements, and any applicable consumer 
     protection laws, including the Truth in Lending Act (15 
     U.S.C. 1601 et seq.), the Equal Credit Opportunity Act (15 
     U.S.C. 1691 et seq.), and the Gramm-Leach-Bliley Act (Public 
     Law 106-102; 113 Stat. 1338).'';
       (5) in paragraph (4), as so redesignated, by inserting 
     ``Notification.--'' after ``(4)''; and
       (6) in paragraph (5), as so redesignated, by inserting 
     ``Delegation.--'' after ``(5)''.

     SEC. 11117. OFFICE OF CREDIT RISK MANAGEMENT.

       Section 47 of the Small Business Act (15 U.S.C. 657t) is 
     amended--
       (1) in subsection (c)--
       (A) in paragraph (1), by inserting before the period at the 
     end the following: ``with a

[[Page S3692]]

     demonstrated career in or outstanding qualifications or 
     expertise related to finance and financial risk management. 
     The Director shall report directly to the Administrator''; 
     and
       (B) by adding at the end the following:
       ``(3) Compensation.--The Administrator shall fix the 
     compensation of the Director--
       ``(A) as necessary to carry out the duties of the Office; 
     and
       ``(B) in an amount that is not less than the highest rate 
     of basic pay for the Senior Executive Service under section 
     5382(b) of title 5, United States Code.''; and
       (2) in subsection (h)(2)--
       (A) in subparagraph (I), by striking ``and'' at the end;
       (B) in subparagraph (J), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(K) the number of 7(a) lenders that had an early default 
     rate of more than 3 percent; and
       ``(L) an analysis of the median and average credit scores 
     of borrowers relating to early default rates, purchase rates, 
     and charge offs.''.

     SEC. 11118. DENIED LOAN OR LOAN MODIFICATION REQUEST.

       (a) 7(a) Loans.--Section 7(a)(1) of the Small Business Act 
     (15 U.S.C. 636(a)(1)), as amended by this subtitle, is 
     amended by adding at the end the following:
       ``(H) Denied loan or loan modification request.--
       ``(i) Role of administrator.--The Administrator may not 
     intervene or make a final decision with respect to a request 
     for reconsideration of a denied loan or loan modification 
     request made by an applicant or recipient of a loan under 
     this subsection.
       ``(ii) Final decision.--Only the Director of the Office of 
     Financial Assistance may make a final decision with respect 
     to a request for reconsideration of a denied loan or loan 
     modification request made by an applicant or recipient of a 
     loan under this subsection.''.
       (b) 504/CDC Loans.--Section 502 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696), as amended by this 
     subtitle, is amended by adding at the end the following:
       ``(11) Denied loan or loan modification request.--
       ``(A) Role of administrator.--The Administrator may not 
     intervene or make a final decision with respect to a request 
     for reconsideration of a denied loan or loan modification 
     request made by an applicant or recipient of a loan under 
     this section.
       ``(B) Final decision.--Only the Director of the Office of 
     Financial Assistance may make a final decision with respect 
     to a request for reconsideration of a denied loan or loan 
     modification request made by an applicant or recipient of a 
     loan under this section.''.

     SEC. 11119. DIRECT LENDING.

       Section 7(a)(1) of the Small Business Act (15 U.S.C. 
     636(a)(1)), as amended by this subtitle, is amended by adding 
     at the end the following:
       ``(I) Notification required before direct lending.--Not 
     later than 60 days before the Administration implements any 
     policy or pilot program that would allow the Administration 
     to directly make a loan under this subsection, the 
     Administrator shall submit a notification to Congress for 
     review.''.

     SEC. 11120. RESTRICTION ON REFINANCING DEBT.

       Section 7(a)(1) of the Small Business Act (15 U.S.C. 
     636(a)(1)), as amended by this subtitle, is amended by adding 
     at the end the following:
       ``(J) Restriction on refinancing debt.--
       ``(i) Definition.--In this subparagraph, the term 
     `delegated authority' means status granted by the 
     Administration to a lender to allow the lender to process, 
     close, service, and liquidate certain loans made under this 
     subsection without prior review by the Administration.
       ``(ii) Restriction.--A lender shall be prohibited from 
     using any delegated authority under this subsection to 
     refinance any debt held by the lender, including any loan 
     made under this subsection.''.

     SEC. 11121. GAO STUDY.

       Not later than 2 years after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     conduct a study and submit to the Administrator, the 
     Committee on Small Business and Entrepreneurship of the 
     Senate, and the Committee on Small Business of the House of 
     Representatives a report that includes--
       (1) an analysis of the use of alternative credit models for 
     loans made under section 7(a) of the Small Business Act (15 
     U.S.C. 636(a)) in an amount of less than $350,000, 
     including--
       (A) an analysis of whether appropriate guardrails are in 
     place to prevent fraud, waste, and abuse and provide 
     protections for the borrower;
       (B) an evaluation of the effectiveness of those credit 
     models in reducing barriers to access to capital to 
     underserved and rural communities; and
       (C) recommendations as to whether improvements can be made 
     by Administration in its use of alternative credit models to 
     prevent waste, fraud, and abuse and to improve access to 
     capital to underserved and rural communities;
       (2) an audit of the operations, staffing, and resources of 
     the Office of Credit Risk Management of the Administration, 
     including the efforts of the Office to implement the new 
     oversight provisions under the amendments made by this title; 
     and
       (3) a survey of the practices of lenders under section 7(a) 
     of the Small Business Act (15 U.S.C. 636(a)) relating to the 
     use of criminal history when determining whether to approve a 
     loan under that section or a similarly sized commercial loan 
     that is not guaranteed by the Administration.

        TITLE LXX--VETERAN ENTREPRENEURSHIP TRAINING ACT OF 2023

     SEC. 11201. SHORT TITLE.

       This title may be cited as the ``Veteran Entrepreneurship 
     Training Act of 2023''.

     SEC. 11202. BOOTS TO BUSINESS PROGRAM.

       Section 32 of the Small Business Act (15 U.S.C. 657b) is 
     amended by adding at the end the following:
       ``(h) Boots to Business Program.--
       ``(1) Covered individual defined.--In this subsection, the 
     term `covered individual' means--
       ``(A) a member of the Armed Forces, including the National 
     Guard or Reserves;
       ``(B) an individual who is participating in the Transition 
     Assistance Program established under section 1144 of title 
     10, United States Code;
       ``(C) an individual who--
       ``(i) served on active duty in any branch of the Armed 
     Forces, including the National Guard or Reserves; and
       ``(ii) was discharged or released from such service under 
     conditions other than dishonorable; and
       ``(D) a spouse or dependent of an individual described in 
     subparagraph (A), (B), or (C).
       ``(2) Establishment.--During the period beginning on the 
     date of enactment of this subsection and ending on September 
     30, 2028, the Administrator shall carry out a program to be 
     known as the `Boots to Business Program' to provide 
     entrepreneurship training to covered individuals.
       ``(3) Goals.--The goals of the Boots to Business Program 
     are to--
       ``(A) provide assistance and in-depth training to covered 
     individuals interested in business ownership; and
       ``(B) provide covered individuals with the tools, skills, 
     and knowledge necessary to identify a business opportunity, 
     draft a business plan, identify sources of capital, connect 
     with local resources for small business concerns, and start 
     up a small business concern.
       ``(4) Program components.--
       ``(A) In general.--The Boots to Business Program may 
     include--
       ``(i) an in-person and virtual, as applicable, presentation 
     providing exposure to the considerations involved in self-
     employment and ownership of a small business concern;
       ``(ii) an online, self-study course focused on the basic 
     skills of entrepreneurship, the language of business, and the 
     considerations involved in self-employment and ownership of a 
     small business concern;
       ``(iii) an in-person and virtual, as applicable, classroom 
     instruction component providing an introduction to the 
     foundations of self employment and ownership of a small 
     business concern; and
       ``(iv) in-depth training delivered through online 
     instruction, including an online course that leads to the 
     creation of a business plan.
       ``(B) Travel costs.--
       ``(i) In general.--Subject to the other provisions of this 
     subparagraph, of the total amount of grant funding that a 
     Veteran Business Outreach Center participating in the Boots 
     to Business Program receives from the Administration, the 
     center may not expend more than 35 percent of that funding on 
     costs relating to international travel with respect to the 
     Boots to Business Program.
       ``(ii) Costs not included in cap.--Costs relating to the 
     salaries of, or stipends for, instructors under the Boots to 
     Business Program shall not be included for the purposes of 
     the limitation under clause (i).
       ``(iii) Petition.--

       ``(I) In general.--A Veteran Business Outreach Center may 
     petition the Administrator for the center to expend 
     additional funds beyond the limitation under clause (i) for 
     the purposes described in that clause.
       ``(II) Notification requirement.--If the Administrator 
     grants any petition submitted under subclause (I), the 
     Administrator shall submit to the Committee on Small Business 
     and Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a notification 
     regarding that decision by the Administrator.

       ``(C) Collaboration.--The Administrator may--
       ``(i) collaborate with public and private entities to 
     develop course curricula for the Boots to Business Program;
       ``(ii) modify program components in coordination with 
     entities participating in a Warriors in Transition program, 
     as defined in section 738(e) of the National Defense 
     Authorization Act for Fiscal Year 2013 (10 U.S.C. 1071 note); 
     and
       ``(iii) consult with Directors of Veteran Business Outreach 
     Centers regarding the necessity of instructor international 
     travel and the feasibility of incorporating virtual classroom 
     components.
       ``(D) Use of resource partners and district offices.--
       ``(i) In general.--The Administrator shall--

       ``(I) ensure that Veteran Business Outreach Centers 
     regularly participate, on a nationwide basis, in the Boots to 
     Business Program; and
       ``(II) to the maximum extent practicable, use district 
     offices of the Administration and

[[Page S3693]]

     a variety of other resource partners and entities in 
     administering the Boots to Business Program.

       ``(ii) Grant authority.--In carrying out clause (i), the 
     Administrator may make grants to Veteran Business Outreach 
     Centers, other resource partners, or other entities to carry 
     out components of the Boots to Business Program.
       ``(E) Availability to department of defense and the 
     department of labor.--The Administrator shall make available 
     to the Secretary of Defense and the Secretary of Labor 
     information regarding the Boots to Business Program, 
     including all course materials and outreach materials related 
     to the Boots to Business Program, for inclusion on the 
     websites of the Department of Defense and the Department of 
     Labor relating to the Transition Assistance Program, in the 
     Transition Assistance Program manual, and in other relevant 
     materials available for distribution from the Secretary of 
     Defense and the Secretary of Labor.
       ``(F) Availability to department of veterans affairs.--In 
     consultation with the Secretary of Veterans Affairs, the 
     Administrator shall make available for distribution and 
     display on the website of the Department of Veterans Affairs 
     and at local facilities of the Department of Veterans Affairs 
     outreach materials regarding the Boots to Business Program, 
     which shall, at a minimum--
       ``(i) describe the Boots to Business Program and the 
     services provided; and
       ``(ii) include eligibility requirements for participating 
     in the Boots to Business Program.
       ``(G) Availability to other participating agencies.--The 
     Administrator shall ensure information regarding the Boots to 
     Business program, including all course materials and outreach 
     materials related to the Boots to Business Program, is made 
     available to other participating agencies in the Transition 
     Assistance Program and upon request of other agencies.
       ``(5) Competitive bidding procedures.--The Administration 
     shall use relevant competitive bidding procedures with 
     respect to any contract or cooperative agreement executed by 
     the Administration under the Boots to Business Program.
       ``(6) Publication of notice of funding opportunity.--Not 
     later than 30 days before the deadline for submitting 
     applications for any funding opportunity under the Boots to 
     Business Program, the Administration shall publish a notice 
     of the funding opportunity.
       ``(7) Report.--Not later than 180 days after the date of 
     enactment of this subsection, and not less frequently than 
     annually thereafter, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives a report on the performance and effectiveness 
     of the Boots to Business Program, which--
       ``(A) may be included as part of another report submitted 
     to such committees by the Administrator related to the Office 
     of Veterans Business Development; and
       ``(B) shall summarize available information relating to--
       ``(i) grants awarded under paragraph (4)(D);
       ``(ii) the total cost of the Boots to Business Program;
       ``(iii) the amount of program funds used for domestic and 
     international travel expenses;
       ``(iv) each domestic location and international location 
     traveled to for Boots to Business program instruction;
       ``(v) the number of program participants using each 
     component of the Boots to Business Program;
       ``(vi) the completion rates for each component of the Boots 
     to Business Program; and
       ``(vii) to the extent possible--

       ``(I) the demographics of program participants, to include 
     gender, age, race, ethnicity, and relationship to the Armed 
     Forces;
       ``(II) the number of program participants that connect with 
     a district office of the Administration, a Veteran Business 
     Outreach Center, or another resource partner of the 
     Administration;
       ``(III) the number of program participants that start a 
     small business concern;
       ``(IV) the results of the Boots to Business and Boots to 
     Business Reboot course quality surveys conducted by the 
     Office of Veterans Business Development before and after 
     attending each of those courses, including a summary of any 
     comments received from program participants;
       ``(V) the results of the Boots to Business Program outcome 
     surveys conducted by the Office of Veterans Business 
     Development, including a summary of any comments received 
     from program participants; and
       ``(VI) the results of other germane participant 
     satisfaction surveys;

       ``(C) an evaluation of the overall effectiveness of the 
     Boots to Business Program based on each geographic region 
     covered by the Administration during the most recent fiscal 
     year;
       ``(D) an assessment of additional performance outcome 
     measures for the Boots to Business Program, as identified by 
     the Administrator;
       ``(E) any recommendations of the Administrator for 
     improvement of the Boots to Business Program, which may 
     include expansion of the types of individuals who are covered 
     individuals;
       ``(F) an explanation of how the Boots to Business Program 
     has been integrated with other transition programs and 
     related resources of the Administration and other Federal 
     agencies; and
       ``(G) any additional information the Administrator 
     determines necessary.''.

          TITLE LXXI--SMALL BUSINESS CHILD CARE INVESTMENT ACT

     SEC. 11301. SHORT TITLE.

       This title may be cited as the ``Small Business Child Care 
     Investment Act''.

     SEC. 11302. SMALL BUSINESS LOANS FOR NONPROFIT CHILD CARE 
                   PROVIDERS.

       (a) In General.--Section 3(a) of the Small Business Act (15 
     U.S.C. 632(a)) is amended by adding at the end the following:
       ``(10) Nonprofit child care providers.--
       ``(A) Definition.--In this paragraph, the term `covered 
     nonprofit child care provider' means an organization--
       ``(i) that--

       ``(I) is in compliance with licensing requirements for 
     child care providers of the State in which the organization 
     is located;
       ``(II) is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 and exempt from tax under section 501(a) 
     of such Code;
       ``(III) is primarily engaged in providing child care for 
     children from birth to compulsory school age; and
       ``(IV) is in compliance with the size standards established 
     under this subsection for business concerns in the applicable 
     industry;

       ``(ii) for which each employee and regular volunteer 
     complies with the criminal background check requirements 
     under section 658H(b) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858f(b));
       ``(iii) that may--

       ``(I) provide care for school-age children outside of 
     school hours or outside of the school year; or
       ``(II) offer preschool or prekindergarten educational 
     programs; and

       ``(iv) subject to any exemption under Federal law 
     applicable to the organization, that certifies to the 
     Administrator that the organization will not discriminate in 
     any business practice, including providing services to the 
     public, on the basis of race, color, religion, sex, sexual 
     orientation, marital status, age, disability, or national 
     origin.
       ``(B) Eligibility for certain loan programs.--
       ``(i) In general.--Notwithstanding any other provision of 
     this subsection, a covered nonprofit child care provider 
     shall be deemed to be a small business concern for purposes 
     of loans under section 7(a) of this Act or financing under 
     title V of the Small Business Investment Act of 1958 (15 
     U.S.C. 695 et seq.).
       ``(ii) Loan guarantee.--A covered nonprofit child care 
     center provider--

       ``(I) shall obtain a guarantee of timely payment of the 
     loan or financing from another person or entity to be 
     eligible for a loan or financing of more than $500,000 under 
     the authority under clause (i); and
       ``(II) shall not be required to obtain a guarantee of 
     timely payment of the loan or financing to be eligible for a 
     loan or financing that is not more than $500,000 under the 
     authority under clause (i).

       ``(C) Limitation on basis for ineligibility.--The 
     Administrator may not determine that a covered nonprofit 
     child care center provider is not eligible for a loan or 
     financing described in subparagraph (B)(i) on the basis that 
     the proceeds of the loan or financing will be used for a 
     religious activity protected under the First Amendment to the 
     Constitution of the United States, as interpreted by the 
     courts of the United States.''.
       (b) Reporting.--
       (1) Definition.--In this subsection, the term ``covered 
     nonprofit child care provider'' has the meaning given the 
     term in paragraph (10) of section 3(a) of the Small Business 
     Act (15 U.S.C. 632(a)), as added by subsection (a).
       (2) Requirement.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter, the 
     Administrator shall submit to Congress a report that 
     contains--
       (A) for the year covered by the report--
       (i) the number of loans made under section 7(a) of the 
     Small Business Act (15 U.S.C. 636(a)) and the number of 
     financings provided under title V of the Small Business 
     Investment Act of 1958 (15 U.S.C. 695 et seq.) to covered 
     nonprofit child care providers; and
       (ii) the amount of such loans made and the amount of such 
     financings provided to covered nonprofit child care 
     providers; and
       (B) any other information determined relevant by the 
     Administrator.

    TITLE LXXII--SUPPORTING SMALL BUSINESS AND CAREER AND TECHNICAL 
                         EDUCATION ACT OF 2023

     SEC. 11401. SHORT TITLE.

       This title may be cited as the ``Supporting Small Business 
     and Career and Technical Education Act of 2023''.

     SEC. 11402. INCLUSION OF CAREER AND TECHNICAL EDUCATION.

       (a) Definition.--Section 3 of the Small Business Act (15 
     U.S.C. 632) is amended by adding at the end the following:
       ``(gg) Career and Technical Education.--The term `career 
     and technical education' has the meaning given the term in 
     section 3 of the Carl D. Perkins Career and Technical 
     Education Act of 2006 (20 U.S.C. 2302).''.
       (b) Small Business Development Centers.--Section 21(c)(3) 
     of the Small Business Act (15 U.S.C. 648(c)(3)) is amended--
       (1) in subparagraph (T), by striking ``and'' at the end;
       (2) in clause (v) of the first subparagraph (U) (relating 
     to succession planning), by striking the period at the end 
     and inserting a semicolon;
       (3) by redesignating the second subparagraph (U) (relating 
     to training on domestic

[[Page S3694]]

     and international intellectual property protections) as 
     subparagraph (V);
       (4) in subparagraph (V)(ii)(II), as so redesignated, by 
     striking the period at the end and inserting a semicolon; and
       (5) by adding at the end the following:
       ``(W) assisting small business concerns in hiring graduates 
     from career and technical education programs or programs of 
     study; and
       ``(X) assisting graduates of career and technical education 
     programs or programs of study in starting up a small business 
     concern.''.
       (c) Women's Business Centers.--Section 29(b) of the Small 
     Business Act (15 U.S.C. 656(b)) is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(4) assistance for small business concerns to hire 
     graduates from career and technical education programs or 
     programs of study; and
       ``(5) assistance for graduates of career and technical 
     education programs or programs of study to start up a small 
     business concern.''.

   TITLE LXXIII--SMALL BUSINESS DISASTER DAMAGE FAIRNESS ACT OF 2023

     SEC. 11501. SHORT TITLE.

       This title may be cited as the ``Small Business Disaster 
     Damage Fairness Act of 2023''.

     SEC. 11502. COLLATERAL REQUIREMENTS FOR DISASTER LOANS.

       Section 7(d)(6) of the Small Business Act (15 U.S.C. 
     636(d)(6)) is amended, in the third proviso--
       (1) by striking ``$14,000'' and inserting ``$25,000''; and
       (2) by striking ``major disaster'' and inserting 
     ``disaster''.

     SEC. 11503. GAO REPORT ON DEFAULT RATES.

       Not later than 3 years after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     submit to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report on the 
     performance, including the default rate, of loans made under 
     section 7(b)(1) of the Small Business Act (15 U.S.C. 
     636(b)(1)), and the impact of the amendments to collateral 
     amounts made under section 11502 on the performance of those 
     loans, during the period--
       (1) beginning on September 30, 2020; and
       (2) ending on the date on that is 2 years after the date of 
     enactment of this Act.

  TITLE LXXIV--NATIVE AMERICAN ENTREPRENEURIAL AND OPPORTUNITY ACT OF 
                                  2023

     SEC. 11601. SHORT TITLE.

       This title may be cited as the ``Native American 
     Entrepreneurial and Opportunity Act of 2023''.

     SEC. 11602. OFFICE OF NATIVE AMERICAN AFFAIRS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 49 (15 U.S.C. 631 note) as 
     section 50; and
       (2) by inserting after section 48 (15 U.S.C. 657u) the 
     following:

     ``SEC. 49. OFFICE OF NATIVE AMERICAN AFFAIRS.

       ``(a) Definitions.--In this section:
       ``(1) Associate administrator.--The term `Associate 
     Administrator' means the Associate Administrator for Native 
     American Affairs appointed under subsection (c).
       ``(2) Indian tribe.--The term `Indian Tribe' has the 
     meaning given the term `Indian tribe' in section 8(a)(13).
       ``(3) Native hawaiian organization.--The term `Native 
     Hawaiian Organization' has the meaning given the term in 
     section 8(a)(15).
       ``(4) Office.--The term `Office' means the Office of Native 
     American Affairs described in this section.
       ``(b) Establishment.--
       ``(1) In general.--There is established within the 
     Administration the Office of Native American Affairs, which 
     shall be responsible for establishing a working relationship 
     with Indian Tribes and Native Hawaiian Organizations by 
     targeting programs of the Administration relating to 
     entrepreneurial development, contracting, and capital access 
     to revitalize Native businesses and economic development in 
     Indian country.
       ``(2) Connection with other programs.--To the extent 
     reasonable, the Office shall connect Indian Tribes and Native 
     Hawaiian Organizations to programs administered by other 
     Federal agencies related to the interests described in 
     paragraph (1).
       ``(3) Alternative work sites.--
       ``(A) In general.--The Office may establish alternative 
     work sites within such regional offices of the Administration 
     as may be necessary, with initial focus on those parts of 
     Indian Country most economically disadvantaged, to perform 
     efficiently the functions and responsibilities of the Office.
       ``(B) Prohibition.--The alternative work sites established 
     under subparagraph (A) shall not be field offices of the 
     Administration.
       ``(c) Associate Administrator.--The Office shall be headed 
     by an Associate Administrator for Native American Affairs, 
     who shall--
       ``(1) be appointed by and report to the Administrator;
       ``(2) have knowledge of Native American cultures and 
     experience providing culturally tailored small business 
     development assistance to Native Americans;
       ``(3) carry out the program to provide assistance to Indian 
     Tribes and Native Hawaiian Organizations and small business 
     concerns owned and controlled by individuals who are members 
     of those groups;
       ``(4) administer and manage Native American outreach 
     expansion;
       ``(5) enhance assistance to Native Americans by formulating 
     and promoting policies, programs, and assistance that better 
     address their entrepreneurial, capital access, business 
     development, and contracting needs, and collaborate with 
     other Associate Administrators and intergovernmental leaders 
     with similar missions across Federal agencies on the 
     development of policies and plans to implement new programs 
     of the Administration, while supplementing existing Federal 
     programs to holistically serve those needs;
       ``(6) provide grants, contracts, cooperative agreements, or 
     other financial assistance to Indian Tribes and Native 
     Hawaiian Organizations, or to private nonprofit organizations 
     governed by members of those entities, that have the 
     experience and capability to--
       ``(A) deploy training, counseling, workshops, educational 
     outreach, and supplier events; and
       ``(B) access the entrepreneurial, capital, and contracting 
     programs of the Administration;
       ``(7) assist the Administrator in conducting, or conduct, 
     Tribal consultation to solicit input and facilitate 
     discussion of potential modifications to programs and 
     procedures of the Administration; and
       ``(8) recommend annual budgets for the Office.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Office such sums as may be 
     necessary for each of fiscal years 2024 through 2028 to carry 
     out this section.''.

              TITLE LXXV--SUPPORTING COMMUNITY LENDERS ACT

     SEC. 11701. SHORT TITLE.

       This title may be cited as the ``Supporting Community 
     Lenders Act''.

     SEC. 11702. COORDINATOR FOR COMMUNITY FINANCIAL INSTITUTIONS.

       Section 7 of the Small Business Act (15 U.S.C. 636) is 
     amended by adding at the end the following:
       ``(o) Coordinator for Community Financial Institutions.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `Associate Administrator' means the 
     Associate Administrator of the Office of Capital Access of 
     the Administration;
       ``(B) the term `community financial institution' has the 
     meaning given the term in paragraph (36); and
       ``(C) the term `Coordinator' means the Coordinator for 
     Community Financial Institutions.
       ``(2) Establishment.--There is established within the 
     Office of Capital Access of the Administration the position 
     of Coordinator for Community Financial Institutions, the 
     occupant of which shall be responsible for the planning, 
     coordination, implementation, evaluation, and improvement of 
     the efforts of the Administrator to enhance the performance 
     of community financial institutions and support access to 
     capital for small business concerns.
       ``(3) Coordinator.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of the Supporting Community Lenders Act, the 
     Administrator shall designate an individual to serve as 
     Coordinator, who shall--
       ``(i) report to the Associate Administrator; and
       ``(ii) have knowledge of community financial institutions 
     and experience providing access to capital to small business 
     concerns in underserved communities.
       ``(B) Duties.--The Coordinator shall--
       ``(i) create and implement strategies and programs that 
     support the activities, development, and growth of community 
     financial institutions;
       ``(ii) administer and manage outreach, technical support, 
     and training programs to existing, and potential, community 
     financial institutions;
       ``(iii) establish partnerships within the Administration 
     and with relevant Federal agencies, including the Department 
     of the Treasury, the Federal Deposit Insurance Corporation, 
     the Department of Agriculture, and the Minority Business 
     Development Agency, to advance the goal of supporting the 
     economic success of small business concerns through community 
     financial institutions;
       ``(iv) review the effectiveness and impact of community 
     financial institutions;
       ``(v) when appropriate, advocate on behalf of community 
     financial institutions within the Administration, and to 
     outside organizations, including other relevant Federal 
     agencies;
       ``(vi) hold public meetings with relevant stakeholders not 
     less frequently than once every 6 months beginning 1 year 
     after the date of enactment of the Supporting Community 
     Lenders Act; and
       ``(vii) not later than 3 years after the date of enactment 
     of the Supporting Community Lenders Act, and not less 
     frequently than once every 3 years thereafter, submit to 
     Congress a report on the major activities of the Coordinator, 
     recommendations for congressional action based on the 
     expertise of the Coordinator, and potential for growth within 
     the areas in which the Coordinator operates.
       ``(C) Consultation.--In carrying out the duties under this 
     paragraph, the Coordinator shall consult with--

[[Page S3695]]

       ``(i) district offices of the Administration; and
       ``(ii) other relevant Federal agencies, including the 
     Department of the Treasury, the Federal Deposit Insurance 
     Corporation, and the Minority Business Development Agency.''.

     SEC. 11703. OFFICE OF ADVOCACY EMPLOYEE ELIGIBILITY FOR 
                   FAMILY AND MEDICAL LEAVE.

       The Chief Counsel for Advocacy of the Administration shall 
     immediately notify the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives if, at any point, an 
     employee, including a contracted employee, of the Office of 
     Advocacy who has been employed at the Office of Advocacy for 
     more than 1 year is not eligible for paid leave under 
     subchapter V of chapter 63 of title 5, United States Code.

            TITLE LXXVI--SBIC ADVISORY COMMITTEE ACT OF 2023

     SEC. 11801. SHORT TITLE.

       This title may be cited as the ``SBIC Advisory Committee 
     Act of 2023''.

     SEC. 11802. SBIC ADVISORY COMMITTEE.

       (a) Definitions.--In this section--
       (1) the term ``Advisory Committee'' means the SBIC Advisory 
     Committee established under subsection (b);
       (2) the term ``covered Members'' means the Chair and 
     Ranking Member of--
       (A) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (B) the Committee on Small Business of the House of 
     Representatives;
       (3) the terms ``licensee'', ``small business investment 
     company'', and ``underlicensed State'' have the meanings 
     given those terms in section 103 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 662);
       (4) the term ``low-income community'' has the meaning given 
     the term in section 45D(e) of the Internal Revenue Code of 
     1986;
       (5) the term ``rural area'' has the meaning given the term 
     by the Bureau of the Census;
       (6) the terms ``small business concern owned and controlled 
     by veterans'' and ``small business concern owned and 
     controlled by women'' have the meanings given those terms in 
     section 3 of the Small Business Act (15 U.S.C. 632);
       (7) the term ``socially or economically disadvantaged 
     individual'' means a socially disadvantaged individual or 
     economically disadvantaged individual, as described in 
     paragraphs (5) and (6)(A), respectively, of section 8(a) of 
     the Small Business Act (15 U.S.C. 637(a));
       (8) the term ``underfinanced State'' means a State that has 
     below median financing, as determined by the Administrator; 
     and
       (9) the term ``underserved community'' means--
       (A) a HUBZone, as defined in section 31(b) of the Small 
     Business Act (15 U.S.C. 657a(b));
       (B) a community that has been designated as an empowerment 
     zone or an enterprise community under section 1391 of the 
     Internal Revenue Code of 1986;
       (C) a community that has been designated as a promise zone 
     by the Secretary of Housing and Urban Development; or
       (D) a community that has been designated as a qualified 
     opportunity zone under section 1400Z-1 of the Internal 
     Revenue Code of 1986.
       (b) Establishment.--The Administrator shall establish an 
     SBIC Advisory Committee to convene outside experts to advise 
     on the small business investment program under title III of 
     the Small Business Investment Act of 1958 (15 U.S.C. 681 et 
     seq.).
       (c) Composition.--
       (1) Membership.--The Advisory Committee shall be composed 
     of 16 members appointed by the Administrator as follows:
       (A) The Associate Administrator of the Office of Investment 
     and Innovation of the Administration, or another designee of 
     the Associate Administrator, as determined by the 
     Administrator.
       (B) 7 members with competence regarding, interest in, or 
     knowledge of the small business investment program under 
     title III of the Small Business Investment Act of 1958 (15 
     U.S.C. 681 et seq.), of whom--
       (i) not fewer than 3 shall have a demonstrated record of 
     expertise in investing in--

       (I) low-income communities;
       (II) communities that have been designated as qualified 
     opportunity zones under section 1400Z-1 of the Internal 
     Revenue Code of 1986;
       (III) businesses primarily engaged in research and 
     development;
       (IV) manufacturers;
       (V) businesses primarily owned or controlled by individuals 
     in underserved communities before receiving capital from the 
     licensee;
       (VI) rural areas; or
       (VII) underfinanced States; and

       (ii) not less than 1 shall be a representative from a trade 
     association for the small business investment program under 
     title III of the Small Business Investment Act of 1958 (15 
     U.S.C. 681 et seq.).
       (C) 8 members appointed by the Administrator as follows:
       (i) 2 members shall be selected from among the individuals 
     in the list submitted by the Chair of the Committee on Small 
     Business and Entrepreneurship of the Senate under paragraph 
     (2).
       (ii) 2 members shall be selected from among the individuals 
     in the list submitted by the Ranking Member of the Committee 
     on Small Business and Entrepreneurship of the Senate under 
     paragraph (2).
       (iii) 2 members shall be selected from among the 
     individuals in the list submitted by the Chair of the 
     Committee on Small Business of the House of Representatives 
     under paragraph (2).
       (iv) 2 members shall be selected from among the individuals 
     in the list submitted by the Ranking Member of the Committee 
     on Small Business of the House of Representatives under 
     paragraph (2).
       (2) Recommendations.--Not later than 30 days after the date 
     of enactment of this Act, each of the covered Members shall 
     provide to the Administrator a list of 3 candidates for 
     membership on the Advisory Committee, who shall be 
     individuals who have no conflict of interest in the small 
     business investment program under title III of the Small 
     Business Investment Act of 1958 (15 U.S.C. 681 et seq.) and 
     hold a high-ranking position or senior leadership role in--
       (A) a relevant industry trade association;
       (B) the investment industry with expertise in pensions, 
     endowments, and other non-banking institutions;
       (C) academia with expertise in the investment industry; or
       (D) a nonprofit institution, including a nonprofit 
     institution that serves any of the entities described in 
     subclauses (I) through (VII) of paragraph (1)(B)(i).
       (3) Private sector members.--Not fewer than 2 and not more 
     than 4 of the members of the Advisory Committee shall be 
     investors in the private sector who--
       (A) invest in small business concerns; and
       (B) as of the date of appointment, do not participate in 
     the small business investment program under title III of the 
     Small Business Investment Act of 1958 (15 U.S.C. 681 et 
     seq.).
       (4) Chairperson.--The Chairperson of the Advisory Committee 
     shall be the member of the Advisory Committee appointed under 
     paragraph (1)(A).
       (5) Period of appointment.--Members of the Advisory 
     Committee shall be appointed for the life of the Advisory 
     Committee.
       (6) Vacancies.--Any vacancy in the Advisory Committee shall 
     be filled in the same manner as the original appointment.
       (d) Deadline for Appointment.--Not later than 60 days after 
     the date on which the covered Members provide the lists to 
     the Administrator under subsection (c)(2), the Administrator 
     shall--
       (1) appoint the members of the Advisory Committee; and
       (2) submit to Congress a list of the members so appointed.
       (e) Duties.--The Advisory Committee shall provide advice 
     and recommendations to the Administrator concerning--
       (1) policy and program development and other matters of 
     significance concerning activities under the Small Business 
     Act (15 U.S.C. 631 et seq.) and the Small Business Investment 
     Act of 1958 (15 U.S.C. 661 et seq.), including diversifying 
     management teams or companies;
       (2) incentives for small business investment companies to--
       (A) invest and locate in underlicensed States and 
     underfinanced States; and
       (B) invest in small business concerns, including small 
     business concerns owned and controlled by socially or 
     economically disadvantaged individuals, small business 
     concerns owned and controlled by veterans, and small business 
     concerns owned and controlled by women;
       (3) metrics of success, and benchmarks for success, with 
     respect to the goals described in this section; and
       (4) the impact of the small business investment program 
     under title III of the Small Business Investment Act of 1958 
     (15 U.S.C. 681 et seq.) on the private investment market, 
     including whether investments under the program compete with 
     the private sector.
       (f) Report.--Not later than 18 months after the date on 
     which the Administrator establishes the Advisory Committee 
     under subsection (b), the Advisory Committee shall submit to 
     the Administrator, the Committee on Small Business and 
     Entrepreneurship of the Senate, and the Committee on Small 
     Business of the House of Representatives a report that 
     includes the recommendations of the Advisory Committee 
     described in subsection (e).
       (g) Termination.--The Advisory Committee shall terminate on 
     the date on which the Advisory Committee submits the report 
     required under subsection (f).
                                 ______