[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[Extensions of Remarks]
[Pages 27316-27321]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 27316]]

CONFERENCE REPORT ON H.R. 4577, DEPARTMENTS OF LABOR, HEALTH AND HUMAN 
 SERVICES, AND EDUCATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2001

                                 ______
                                 

                          HON. JAMES M. TALENT

                              of missouri

                    in the house of representatives

                       Friday, December 15, 2000

  Mr. TALENT. Mr. Speaker, the following is a summary and explanation 
to accompany H.R. 5667, the Small Business Reauthorization Act of 2000. 
It is essentially the same document as that in the Conference Report to 
accompany H.R. 2614 (Rpt. 106-1004). Unfortunately, H.R. 2614 was never 
passed by the Senate. However, we were fortunate enough to achieve some 
compromise and many of the provisions of H.R. 2614 are included with 
H.R. 4577.
  The conferees met to discuss H.R. 2614 which had passed the House, 
and after Senate amendment, had been returned to the House. The House 
objected to the Senate amendment and the Senate then requested a 
conference. The original purpose of H.R. 2614 was solely to make 
corrections to the Small Business Administration's Certified 
Development Company loan program. The conferees agreed to include the 
provisions of several other bills (e.g. H.R. 2615, H.R. 2392, H.R. 
3843, H.R. 3845) affecting the Small Business Administration and its 
programs in order to facilitate the work of both Houses. The provisions 
of H.R. 5545 are essentially what is included in H.R. 5667 and certain 
other sections of the American Community Renewal Act provisions also 
included in this legislation.
  The summary of H.R. 5667 follows:

            TITLE I--SMALL BUSINESS INNOVATION AND RESEARCH

       The Small Business Innovation Research Program 
     Reauthorization Act of 2000 (H.R. 2392) was introduced on 
     June 30, 1999, and referred to the House Committees on Small 
     Business and Science. Both Committees held hearings and the 
     House Committee on Small Business reported H.R. 2392 on 
     September 23, 1999 (H. Rept. 106-329). In the interest of 
     moving the bill to the floor of the House of Representatives 
     promptly, the Committee on Science agreed not to exercise its 
     right to report the legislation, provided that the House 
     Committee on Small Business agreed to add the selected 
     portions of the Science Committee version of the legislation, 
     as Sections 8 through 11 of the House floor text of H.R. 
     2392. H.R. 2392 passed the House without further amendment on 
     September 27. The Science Committee provisions were explained 
     in floor statements by Congressmen Sensenbrenner, Morella, 
     and Mark Udall.
       On March 21, 2000, the Senate Committee marked up H.R. 2392 
     and on May 10, 2000, reported the bill (S. Rept. 106-289). 
     The Senate Committee struck several of the sections 
     originating from the House Committee on Science and added 
     sections not in the House-passed legislation, including a 
     requirement that Federal agencies with Small Business 
     Innovation Research (SBIR) programs report their methodology 
     for calculating their SBIR budgets to the Small Business 
     Administration (SBA) and a program to assist states in the 
     development of small high-technology businesses. Negotiations 
     then began among the leadership of the Senate and House 
     Committees on Small Businesses and the House Committee on 
     Science (hereinafter referred to as the three committees). 
     The resultant compromise text contains all major House and 
     Senate provisions, some of which have been amended to reflect 
     a compromise position. A section-by-section explanation of 
     the revised text follows. The purposes of this statement, the 
     bill passed by the House of Representatives is referred to as 
     the ``House version'' and the bill reported by the Senate 
     Committee on Small Business is referred to as the ``Senate 
     version.''
     Section 101. Short Title; Table of Contents
       The compromise text uses the Senate short title: ``Small 
     Business Innovation Research Program Reauthorization Act of 
     2000.'' The table of contents lists the sections in the 
     compromise text.
     Section 102. Findings
       The House and Senate versions of the findings are very 
     similar. The compromise text uses the House version of the 
     findings.
     Section 103. Extension of the SBIR Program
       The House version extends the SBIR program for seven years 
     through September 30, 2007. The Senate version extends the 
     program for ten years through September 30, 2010. The 
     compromise text extends the program for eight years through 
     September 30, 2008.
     Section 104. Annual Report
       The House version provides for the annual report on the 
     SBIR program prepared by the SBA to be sent to the Committee 
     on Science, as well as to the House and Senate Committees on 
     Small Business that currently receive it. The Senate version 
     did not include this section. The compromise text adopts the 
     House language.
     Section 105. Third Phase Assistance
       The compromise text of this technical amendment is 
     identical to both the House and Senate versions.
     Section 106. Report on Programs for Annual Performance Plan
       This section requires each agency that participates in the 
     SBIR program to submit to Congress a performance plan 
     consistent with the Government Performance and Results Act. 
     The House and Senate versions have the same intent. The 
     compromise text uses the House version.
     Section 107. Output and Outcome Data
       Both the House and Senate versions contain sections 
     enabling the collection and maintenance of information from 
     awardees as is necessary to assess the SBIR program. Both the 
     Senate and House versions require the SBA to maintain a 
     public database at SBA containing information on awardees 
     from all SBIR agencies. The Senate version adds paragraphs to 
     the public database section dealing with database 
     identification of businesses or subsidiaries established for 
     the commercial application of SBIR products or services and 
     the inclusion of information regarding mentors and mentoring 
     networks. The House version further requires the SBA to 
     establish and maintain a government database, which is exempt 
     from the Freedom of Information Act and is to be used solely 
     for program evaluation. Outside individuals must sign a non-
     disclosure agreement before gaining access to the database. 
     The compromise text contains each of these provisions, with 
     certain modifications and clarifications, which are addressed 
     below.
       With respect to the public database, the compromise text 
     makes clear that proprietary information, so identified by a 
     small business concern, will not be included in the public 
     database. With respect to the government database, the 
     compromise text clarifies that the inclusion of information 
     in the government database is not to be considered 
     publication for purposes of patent law. The compromise text 
     further permits the SBA to include in the government database 
     any information received in connection with an SBIR award the 
     SBA Administrator, in conjunction with the SBIR agency 
     program managers, consider to be relevant and appropriate or 
     that the Federal agency considers to be useful to SBIR 
     program evaluation.
       With respect to small business reporting for the government 
     database, the compromise text directs that when a small 
     business applies for a second phase award it is required to 
     update information in the government database. If an 
     applicant for a second phase award receives the award, it 
     shall update information in the database concerning the award 
     at the termination of the award period and will be requested 
     to voluntarily update the information annually for an 
     additional period of five years. This reporting procedure is 
     similar to current Department of Defense requirements for the 
     reporting of such information. When sales or additional 
     investment information is related to more than one second 
     phase award is involved, the compromise text permits a small 
     business to apportion the information among the awards in any 
     way it chooses, provided the apportionment is noted on all 
     awards so apportioned.
       The three committees understand that receiving complete 
     commercialization data on the SBIR program is difficult, 
     regardless of any reasonable time frame that could be 
     established for the reporting of such data. Commercialization 
     may occur many years following the receipt of a research 
     grant and research from an award, while not directly 
     resulting in a marketplace product, may set the groundwork 
     for additional research that leads to such a product. 
     Nevertheless, the three committees believe that the 
     government database will provide useful information for 
     program evaluation.
     Section 108. National Research Council Reports
       The House version requires the four largest SBIR program 
     agencies to enter into an agreement with the National 
     Research Council (NRC) to conduct a comprehensive study of 
     how the SBIR program has stimulated technological innovation 
     and used small businesses to meet Federal research and 
     development needs and to make
       The compromise text makes several changes to the House 
     text. The compromise text adds the National Science 
     Foundation to the agencies entering the agreement with the 
     NRC and requires the agencies to consult with the SBA in 
     entering such agreement. It also expands the House version, 
     which requires a review of the quality of SBIR research, to 
     require a comparison of the value of projects conducted under 
     SBIR with those funded by other Federal research and 
     development expenditures. The compromise text further 
     broadens the House version's review of the economic rate of 
     return of the SBIR

[[Page 27317]]

     program to require an evaluation of the economic benefits of 
     the SBIR program, including economic rate of return, and a 
     comparison of the economic benefits of the SBIR program with 
     that of other Federal research and development expenditures. 
     The compromise text allows the NRC to choose an appropriate 
     time-frame for such analysis that results in a fair 
     comparison.
       The three committees believe that a comprehensive report on 
     the SBIR program and its relation to other Federal research 
     expenditures will be useful in program oversight and will 
     provide Congress with an understanding of the effects of 
     extramural Federal research and development funding provided 
     to large and small businesses and universities. The three 
     committees understand, however, that measuring the direct 
     benefits of the nation's economy from the SBIR program and 
     other Federal research expenditures may be difficult to 
     calculate and may not provide a complete portrayal of the 
     benefits achieved by the SBIR program. Accordingly, the 
     legislation requires the NRC also to review the non-economic 
     benefits of the SBIR program, which may include, among other 
     matters, the increase in scientific knowledge that has 
     resulted from the program. The paragraph in the compromise 
     text calling for recommendations remains the same as the 
     House version, except that the bill now asks the NRC to make 
     recommendations, should there by any.
       While the study is to be carried out within National 
     Research Council study guidelines and procedures, the 
     compromise text requires the NRC to take the steps necessary 
     to ensure the individuals from the small business community 
     with expertise in the SBIR program are well-represented in 
     the panel established for performing the study and among the 
     peer reviewers of the study. The NRC is to consult with and 
     consider the views of the SBA's Office of Technology and the 
     SBA's Office of Advocacy and to conduct the study in an open 
     manner that makes sure that the views and experiences of 
     small businesses involved in the program are carefully 
     considered in the design and execution of the study. 
     Extension of the SBIR program for eight years rather than the 
     five being contemplated when the House study provision was 
     initially written has necessitated some adjustments in the 
     study. The report is now required three years rather than 
     four years after the date of enactment of the Act and the NRC 
     is to update the report within six years of enactment. The 
     update is intended to bring current, any information from the 
     study relevant to the reauthorization of the SBIR program. It 
     is not intended to be a second full-fledged study. In 
     addition, semiannual progress reports by NRC to the three 
     committees are required.
     Section 109. Federal Agency Expenditures for the SBIR Program
       The Senate version requires each Federal agency with an 
     SBIR program to provide the SBA with a report describing its 
     methodology for calculating its extramural budget for 
     purposes of SBIR program set-aside and requires the 
     Administrator of the SBA to include an analysis of the 
     methodology from each agency in its annual report to the 
     Congress. The House version has no similar provision. The 
     compromise text follows the Senate text except that it 
     specifies that each agency, rather than the agency's 
     comptroller, shall submit the agency's report to the 
     Administrator. The three committees intend that each agency's 
     methodology include an itemization of each research program 
     that is excluded from the calculation of its extramural 
     budget for SBIR purposes as well as a brief explanation of 
     why the agency feels each excluded program meets a particular 
     exemption.
     Section 110. Policy Directive Modifications
       The House version includes policy directive modifications 
     in Section 9 and the requirement of a second phase commercial 
     plan in Section 10. The Senate version include policy 
     directive modifications in Section 6. The Senate version and 
     now the compromise text require the Administrator to make 
     modifications to SBA's policy directives 120 days after the 
     date of enactment rather than the 30 days contained in the 
     House version. The compromise text drops the House policy 
     directive dealing with awards exceeding statutory dollar 
     amounts and time limits because this flexibility is already 
     being provided administratively. Addressed below is a 
     description of the policy directive modifications contained 
     in the compromise text that were not included in both the 
     Senate version and the House version.
       Section 10 of the House version requires the SBA to modify 
     its policy directives to require that small businesses 
     provide a commercial plan with each application for a second-
     phase award. The Senate version does not contain a similar 
     provision. The compromise text requires the SBA to modify its 
     policy directives to require that a small businesses provide 
     a ``succinct commercialization plan for each second phase 
     award moving towards commercialization.'' The three 
     committees acknowledge that commercialization is a current 
     element of the SBIR program. The statutory definition of 
     SBIR, which is not amended by H.R. 2392, includes ``a second 
     phase, to further develop proposals which meet particular 
     program needs, in which awards shall be made based on the 
     scientific and technical merit and feasibility of the 
     proposals, as evidenced by the first phase, considering among 
     other things the proposal's commercial potential...'', and 
     lists evidence of commercial potential as the small 
     business's commercialization record, private sector funding 
     commitments, SBIR Phase III commitments, and the presence of 
     other indicators of the commercial potential. The three 
     committees do not intend that the addition of a 
     commercialization plan either increase or decrease the 
     emphasis an agency places on the commercialization when 
     reviewing second-phase proposals. Rather, the 
     commercialization plan will give SBIR agencies a means of 
     determining the seriousness with which individual applicants 
     approach commercialization.
       The commercialization plan, while concise, should show that 
     the business has thought through both the steps it must take 
     to prepare for the fruits of the SBIR award to enter the 
     commercial marketplace or government procurement and the 
     steps to build business expertise as needed during the SBIR 
     second phase time period. The three committees intend that 
     agencies take into consideration the stage of development of 
     the product or process in deciding whether an appropriate 
     commercialization plan has been submitted. In those instances 
     when at the time of the SBIR Phase II proposal, the grantee 
     cannot identify either a product or process with the 
     potential eventually to enter either the commercial or the 
     government marketplace, no commercialization plan is 
     required.
       The compromise text also adds new provisions that were not 
     contained in either the Senate version or the House version. 
     Current law (Section 9(j)(3)(C) of the Small Business Act) 
     require that the Administrator put in place procedures to 
     ensure, to the extent practicable, that an agency which 
     intends to pursue research, development or production of a 
     technology developed by a small business concern under an 
     SBIR program enter into follow-on, non-SBIR funding 
     agreements with the small business concern for such research, 
     development, or production.
       The three committees are concerned that agencies sometimes 
     provide these follow-on activities to large companies who are 
     in incumbent positions or through contract bundling without 
     written justification or without the statutorily required 
     documentation of the impracticability of using the small 
     business for the work. So that the SBA and the Congress can 
     track the extent of this problem, the compromise text 
     requires agencies to record and report each such occurrence 
     and to describe in writing why it is impractical to provide 
     the research project to the original SBIR company. 
     Additionally, the compromise text directs the SBA to develop 
     policy directives to implement the new subsection (v), 
     Simplified Reporting Requirements. This subsection requires 
     that the directives regarding collection of data be designed 
     to minimize the burden on small businesses; to permit the 
     updating the database by electronic means; and to use 
     standardized procedures for the collection and reporting of 
     data.
       Section 103(a)(2) of P.L. 102-564, which reauthorized the 
     SBIR program in 1992, added language to the description of a 
     third phase award which made it clear that the third phase is 
     intended to be a logical conclusion of research projects 
     selected through competitive procedures in phases one and 
     two. The Report to the House Committee on Small Business (H. 
     Rept. 102-554, Pt. I) provide that the purpose of that 
     clarification was to indicate the Committee's intent that an 
     agency which wishes to fund an SBIR project in phase three 
     (with non-SBIR monies) or enter into a follow-on procurement 
     contract with an SBIR company, need not conduct another 
     competition in order to satisfy the Federal Competition in 
     Contracting Act (CICA). Rather, by phase three the project 
     has survived two competitions and thus has already satisfied 
     the requirements of CICA, set forth in section 2302(2)(E) of 
     that Act, as they apply to the SBIR program. As there has 
     been confusion among SBIR agencies regarding the intent of 
     this change, the three committees reemphasize the intent 
     initially set forth in H. Rept. 102-554, Pt. 1, including the 
     clarification that follow-on phase III procurement contracts 
     with an SBIR company may include procurement of products, 
     services, research, or any combination intended for use by 
     the Federal government.
     Section 111. Federal and State Technology Partnership Program
       This section establishes the FAST program from the Senate 
     version, which is a competitive matching grant program to 
     encourage states to assist in the development of high-
     technology businesses. The House version does not contain a 
     similar provision. The most significant changes from the 
     Senate version in the compromise text are an extension of the 
     maximum duration of awards from three years to five and the 
     lowering of the matching requirement for funds assisting 
     businesses in low income areas to 50 cents per federal 
     dollar, as advocated by Ranking Member Velazquez of the House 
     Small Business Committee. The compromise text combines the 
     definitions found in the Senate version of this section and 
     the mentoring networks section.

[[Page 27318]]


     Section 112. Mentoring Networks
       The Senate version sets forth criteria for mentoring 
     networks that organizations are encouraged to establish with 
     matching funds from the FAST program and creates a database 
     of small businesses willing to act as mentors. The compromise 
     text, except for relocating the program definitions to 
     Section 111, is the same as the Senate text. The House 
     version did not contain a similar provision.
     Section 113. Simplified Reporting Requirements
       This section is not in either the House or the Senate 
     versions. It requires the SBA Administrator to work with SBIR 
     program agencies on standardizing SBIR reporting requirements 
     with the ultimate goal of making the SBA's SBIR database more 
     user friendly. This provision requires the SBA to consider 
     the needs of each agency when establishing and maintaining 
     the database. Additionally, it requires the SBA to take 
     measures to reduce the administrative burden on SBIR program 
     participants whenever possible including, for example, 
     permitting updating by electronic means.
     Section 114. Rural Outreach Program Extension
       This provision, which was not in either the House or the 
     Senate versions, extends the life and authorization for 
     appropriations for the Rural Outreach Program of the Small 
     Business Administration for four additional years through 
     fiscal year 2005. It is the intent of the three committees 
     that this program be evaluated on the same schedule and in 
     the same manner as the FAST program. Among other things, the 
     evaluation should examine the extent to which the programs 
     complement or duplicate each other. The evaluation should 
     also include recommendations for improvements to the program, 
     if any.

                    TITLE II--GENERAL BUSINESS LOANS

       The purpose of Title II is to amend the general business 
     loan program at the Small Business Administration, commonly 
     known as the 7(a) loan program. Title II of H.R. 2392 
     contains a variety of technical and substantive changes to 
     improve the program and correct problems brought to the 
     Committee's attention through the oversight process and 
     originally passed by the House as H.R. 2615.
       Title II will increase the maximum guarantee amount of a 
     7(a) loan to $1 million from the current limit of $750,000 in 
     order to keep pace with inflation. The guarantee amount was 
     last increased in 1988. It also institutes a cap prohibiting 
     loans with a gross amount in excess of $2 million.
       The bill will also remove a provision which reduced SBA's 
     liability for accrued interest on defaulted loans since the 
     provision's intended savings failed to materialize.
       Title II also includes three changes designed to encourage 
     the making of smaller loans. The guarantee rate will be 
     expanded to 85% from loans under $100,000 to loans under 
     $150,000. Likewise, the two percent guarantee fee will now 
     apply to loans up to $150,000, which represents a significant 
     savings for these small borrowers.
       Finally, for small loans, Title II of H.R. 2392 includes a 
     provision allowing lenders to retain one quarter of the 
     guarantee fee on loans under $150,000 as an incentive to make 
     these loans.
       The last part of Title II modifies an SBA regulatory 
     restriction which prohibit loans for passive investment. 
     Title II will permit the financing of projects where no more 
     than 20% of a business location will be rented out provided 
     the small business borrower in question occupies at least 60% 
     of the business space.
     Section 201. Short Title
     Section 202. Levels of Participation
       Increases the guarantee percentage on loans of $150,000 or 
     less to 85%. The current guarantee level of 80% extends only 
     to loans of $100,000 or less. This guarantee increase is one 
     of the changes proposed to encourage the availability of 
     smaller loans.
     Section 203. Loan Amounts
       This provision will increase the maximum guarantee amount 
     to $1 million. The maximum gross loan amount will be capped 
     at $2 million. The language would prohibit SBA from placing a 
     guarantee on any loan over $2 million regardless of the 
     guaranteed amount. Consequently, the largest loan available 
     would be a $2 million loan with a 50% guarantee.
       The largest loan available at the maximum guarantee of 75% 
     would be $1,333,333. The cap on loans over $2 million will 
     effectively remove a number of large loans that have been 
     made with only a minimal guarantee, loans which use up loan 
     authority at a disproportionate rate. In 1998, roughly thirty 
     loans over $2 million were made.
     Section 204. Interest on Defaulted Loans
       This will remove the provision that reduced SBA's liability 
     for accrued interest on defaulted loans. This provision was 
     added to the program in 1996 as a method of reducing the 
     subsidy cost of the program. It has come to the Committee's 
     attention that the expected savings have not materialized.
     Section 205. Prepayment of Loans
       This provision will reduce the incentive for early 
     prepayment of 7(a) loans. It will assess a fee to the 
     borrower for early prepayment of any loan with a term in 
     excess of 15 years. Early prepayment will be defined as any 
     prepayment within the first three years after disbursement. 
     The prepayment fee will be determined by the date of the 
     prepayment--5% in the first year, 3% in the second year, 1% 
     in the third year. The fee will be based on ``excess 
     prepayment'' which is defined as prepayment of more than 25% 
     of the outstanding loan amount. In the event of an excess 
     prepayment the fee would be assessed on the entire 
     outstanding loan amount.
     Section 206. Guarantee Fees
       This section changes the guarantee fee for loans of 
     $150,000 or less to 2%. Currently, the guarantee fee of 2% is 
     only for loans under $100,000. Loans over $100,000 currently 
     have a guarantee fee of 3%. The section also provides for an 
     incentive for lenders to make smaller loans (under $150,000) 
     by allowing them to retain \1/4\ of the guarantee fee.
     Section 207. Lease Terms
       Under existing 7(a) rules, loan proceeds may not be used 
     for investment purposes. This includes purchase or 
     construction of property to be leased to others. Currently, 
     7(a) loans may be used to construct property which will be 
     used solely by the borrower.
       In 1997, Congress modified this rule for the 504 program to 
     allow for projects where a small portion of a property might 
     be rented out permanently, but the borrower's main focus was 
     the construction of a permanent location. This provision 
     would allow the same authority for 7(a) loans. Borrowers 
     would be allowed to lease up to 20% of a property in which 
     they will occupy at least 60% of the business space.

               TITLE III--CERTIFIED DEVELOPMENT COMPANIES

       The purpose of Title III of H.R. 2392 is to amend the Small 
     Business Investment Act to make changes in the Certified 
     Development Company (CDC) loan program at the Small Business 
     Administration (SBA), commonly known as the 504 loan program. 
     Title III is the substance of H.R. 2614 which passed the 
     House earlier this Congress and contains a variety of 
     technical and substantive changes to improve the program and 
     correct problems brought to the Committee's attention through 
     the oversight process.
       Title III will increase the maximum amount of a 504 loan, 
     and its underlying debenture, to $1 million from the current 
     limit of $750,000 in order to keep pace with inflation. The 
     maximum amount for loans with specific public policy purposes 
     (low-income, rural, and minority owned businesses) is 
     increased to $1,300,000. The loan amount was last increased 
     in 1988. Title III will also reauthorize the fees which 
     support the 504 program.
       Title III will also add women-owned businesses as a 
     specific public policy goal for the 504 program. Title III 
     will make permanent two pilot programs begun by SBA in 1997 
     in response to a Congressional mandate. The first pilot 
     program, the Liquidation Pilot Program, enables certain 
     qualified Certified Development Companies to liquidate their 
     own loans rather enduring the usual process of SBA controlled 
     liquidation. The second, the Premier Certified Lenders 
     Program, enables experienced CDCs to use streamlined 
     procedures for loan making and liquidation.
     Section 301. Short Title
     Section 302. Women-Owned Businesses
       Women-owned businesses are added to the list of concerns 
     eligible for the higher debentures available for public 
     policy purposes. Current policy goals include lending to low-
     income and rural areas, and loans to businesses owned by 
     minorities.
     Section 303. Maximum Debenture Size
       Maximum loan/debenture size is increased from $750,000 to 
     $1,000,000 for regular debentures. Public policy loan/
     debentures are increased from $1,000,000 to $1,300,000 for 
     public policy debentures. This increase is commensurate with 
     inflation since the current debenture levels were 
     established.
     Section 304. Fees
       Currently, the 504 program levies fees on the borrower, 
     CDC, and the participating bank. The bank pays a one-time fee 
     whereas the borrower and CDC pay a percentage of the 
     outstanding balance annually in order to provide operational 
     funding for the 504 program. Currently these fees sunset on 
     October 1, 2000. This legislation would continue the fees 
     through October 1, 2003.
     Section 305. Premier Certified Lenders Program
       The Premier Certified Lenders Program (PCLP) is granted 
     permanent status. The current demonstration program 
     terminates at the end of FY 2000.
     Section 306. Sale of Certain Defaulted Loans
       SBA is required to give any certified lender with 
     contingent liability 90 days notice prior to including a 
     defaulted loan in a bulk sale of loans. No loan may be sold 
     without permitting prospective purchasers to examine SBA 
     records on the loan.
     Section 307. Loan Liquidation
       Section 510 is added to the Small Business Investment Act 
     of 1958 in order to create a program permitting CDCs to 
     handle the liquidation of defaulted loans. This program 
     replaces the pilot program authorized by PL 105-135, the 
     Small Business Reauthorization Act of 1997. A permanent 
     program would permit OMB to score savings achieved by the

[[Page 27319]]

     program when computing the subsidy rate for the 504 program.
       In order to participate in the liquidation program, a CDC 
     must have made at least 10 loans per year for the past three 
     years and have at least one employee with 2 years of 
     liquidation experience or be a member of the Accredited 
     Lenders Program with at least one employee with 2 years of 
     liquidation experience. Both groups are required to receive 
     training. PCLP participants and current participants in the 
     pilot program automatically qualify.
       CDCs have the authority to litigate as necessary to 
     foreclose and liquidate, but SBA could assume control of the 
     litigation if the outcome might adversely affect SBA's 
     management of the program or if SBA has additional legal 
     remedies not available to the CDC.
       All Section 510 participants are required to submit a 
     liquidation plan to SBA for approval, and SBA has 15 days to 
     approve, deny, or express concern with the plan. Further SBA 
     approval of routine liquidation activities is not required.
       CDCs are able to purchase indebtedness with SBA approval, 
     and SBA is required to respond to such a request within 15 
     days. Likewise, CDCs are required to seek SBA approval of any 
     workout plan, and SBA must respond to that request within 15 
     days. With SBA approval, a CDC may compromise indebtedness. 
     Such approval must be granted, denied, or explained within 15 
     days of receipt by SBA.

             TITLE IV--SMALL BUSINESS INVESTMENT COMPANIES

       The purpose of Title IV is to amend the Small Business 
     Investment Act (the Act) to make changes in the Small 
     Business Investment Company (SBIC) program at the SBA. Title 
     IV contains the language from H.R. 3845 which passed the 
     House earlier this Congress and contains four technical 
     changes to improve the program and correct problems brought 
     to the Committee's attention through the oversight process.
       H.R. 3845 modifies the definition of control for SBIC 
     investment in small businesses, eliminating a cumbersome five 
     prong test and setting a clear statutory standard. H.R. 3845 
     will also modify the definition of long term investment under 
     the Act, changing it from five years to one year, in order to 
     harmonize that definition with accepted business practice and 
     the tax and banking laws. Third, the bill allows the 
     Administration to adjust the subsidy fee for the SBIC program 
     to maintain the subsidy rate of the program at zero. Finally, 
     the bill makes a change to the distribution language in the 
     Act, allowing SBICs more flexibility in making distributions 
     to their investors and will simplify the accounting and tax 
     procedures at SBICs.
     Section 401. Short Title
     Section 402. Definitions
       (a) Small Business Concern.--Inserts the following language 
     in section 103(5)(A)(i) of the Small Business Investment 
     Act--``regardless of the allocation of control during the 
     investment period under any investment agreement between the 
     business concern and the entity making the investment''. This 
     phrase clarifies that a venture capital investment agreement 
     from an SBIC may cause a change in control of a small 
     business, but that such a change will not affect the 
     eligibility of the small business concern. The Committee does 
     not intend that SBICs become holding companies hence the 
     language references the period of the investment agreement. 
     Further, the Committee retains the authority for SBA 
     examinations to inquire into ``illegal control'' by SBICs, 
     though the committee expects such control to be that 
     exercised outside an investment agreement.
       (b) Long term.--Inserts the following paragraph in section 
     103 of the Small Business Investment Act,
       ``(17) the term long term, when used in connection with 
     equity capital or loan funds invested in any small business 
     concern or smaller enterprise, means any period of time not 
     less than 1 year.'' The language changes the definition of a 
     long term investment to harmonize it with the tax and banking 
     laws.
     Section 403. Investment in SBICs
       This provision allows federal savings associations to 
     invest in SBICs.
     Section 404. Subsidy Fees
       This provision amends sections 303(b) and 303(b)(2) of the 
     Small Business Investment Act to allow the Administration to 
     adjust the fee assessed on debentures and participating 
     securities up to a maximum of one percent. The fee will be 
     adjusted to keep the subsidy cost of the programs at zero or 
     as close as possible to zero.
     Section 405. Distributions
       This section amends section 303(g)(8) of the Small Business 
     Investment Act in order to allow SBICs to make distributions 
     at any time during a calendar quarter based on the maximum 
     estimated tax liability.
     Section 406. Conforming Amendment

          TITLE V--REAUTHORIZATION OF SMALL BUSINESS PROGRAMS

       The purpose of Title V is to reauthorize the programs and 
     operations of the SBA. Title V contains the language from 
     H.R. 3843 which contained the authorization levels for SBA 
     for fiscal year 2001, 2002, and 2003. It contains no 
     technical or substantive changes to any of the programs. The 
     SBA provides a variety of services for small business--
     financial assistance, technical assistance, and disaster 
     assistance.

                          Financial Assistance

       The SBA provides approximately $11 billion in financing to 
     small business annually. This financing is made available 
     through a variety of programs.
       SBA's largest financial program is the Section 7(a) general 
     business loan program. The 7(a) program offers loans to small 
     businesses through local lending institutions. These loans 
     are provided with an SBA guarantee of up to 80 percent and 
     are limited to a maximum of $750,000. The 7(a) program has a 
     subsidy rate of 1.16% for fiscal year 2000 and an 
     appropriation of $107 million, permitting $9.8 billion in 
     lending.
       The Section 504 loan program provides construction, 
     renovation and capital investment financing to small 
     businesses through CDCs. These CDCs are SBA licensed, local 
     business development organizations which provide loans of up 
     to $750,000 for small businesses, in cooperation with local 
     banks. CDCs provide 40% of the financing package, while the 
     bank provides 50%, and the small business provides a 10% down 
     payment. CDC funding is obtained through issuance of an SBA 
     guaranteed debenture. The 504 program currently operates at 
     no cost to the taxpayer but does require authorization.
       The microloan program provides small loans of up to $25,000 
     to borrowers in low-income areas. In fiscal year 1999 the 
     program provided $29 million in loans. In addition, the 
     program has a technical assistance aspect that provides 
     managerial and business expertise to microloan borrowers. 
     Microloans are made by intermediary organizations that 
     specialize in local business development. The program has a 
     subsidy rate of 8.54%.
       The Small Business Investment Company (SBIC) program 
     provides over $1.5 billion in long term and venture capital 
     financing for small businesses annually. SBICs are venture 
     capital firms that leverage private investment dollars with 
     SBA guaranteed debentures or participating securities. The 
     SBIC debenture program currently operates at a zero subsidy 
     rate and requires no taxpayer subsidy. The participating 
     securities program has a 1.8% subsidy rate.

                          Technical Assistance

       The SBA provides technical and managerial assistance to 
     small businesses through four primary programs--Small 
     Business Development Centers (SBDCs), the Service Corps of 
     Retired Executives (SCORE), the 7(j) technical assistance 
     program, and the Women's Business Center program.
       SBDCs are located primarily at colleges and universities 
     and provide assistance through 51 center sites and 
     approximately 970 satellite offices. Through a formula of 
     matching grants and donations SBDCs offer small businesses 
     guidance on marketing, financing, start-up, and other areas. 
     The program currently receives $84 million in appropriations.
       SCORE provides small business assistance on-site through 
     the volunteer efforts of its members. SCORE volunteers are 
     retired business men and women who offer their expertise to 
     small businesses. SCORE volunteers are reimbursed for their 
     travel expenses and SCORE receives funding as well for a 
     website and offices in Washington, DC.
       The 7(j) program provides financing for technical 
     assistance to the minority contracting community primarily 
     through courses and direct assistance from management 
     consultants. In addition, the program provides assistance for 
     participants to attend business administration classes 
     offered through several colleges and universities.
       The Women's Business Center program provides five year 
     grants matched by non-federal funds to private sector 
     organizations to establish business training centers for 
     women. Depending on the needs of the community, centers teach 
     women the principles of finance, management and marketing as 
     well as specialized topics such government contracting or 
     starting home-based businesses. There are currently 81 
     centers in 47 states in rural, urban and suburban locations.

                          Disaster Assistance

       The Small Business Administration also provides disaster 
     loan assistance to homeowners and small businesses 
     nationwide. This program is a key component of the overall 
     Federal recovery effort for communities struck by natural 
     disasters. This assistance is authorized by section 7(b) of 
     the Small Business Act which provides authority for reduced 
     interest rate loans. Currently the interest rates fluctuate 
     according to the statutory formula--a lower rate, not to 
     exceed four percent is offered to applicants with no credit 
     available elsewhere, while a rate of a maximum of eight 
     percent is available for other borrowers.
     Section 501. Short Title
     Section 502. Reauthorization of Small Business Programs
       This section provides the authorized appropriation levels 
     for the following programs: Section 7(a) general business 
     loans, Section 504 Certified Development Company loans,

[[Page 27320]]

     direct microloans, guaranteed microloans, microloan technical 
     assistance, Defense Transition (DELTA) loans, Small Business 
     Investment Company debentures, Small Business Investment 
     Company participating securities, Surety Bonds guarantees, 
     SCORE, disaster loans, and salaries and expenses.
       The following are the authorizations levels for the 
     financial programs:

                        [In millions of dollars]
------------------------------------------------------------------------
                                              2001      2002      2003
------------------------------------------------------------------------
7(a)......................................    14,500    15,000    16,000
504.......................................     4,000     4,500     5,000
Microloan.................................        60        80       100
Microloan TA..............................        45        60        70
Microloan gty.............................        50        50        50
SBIC debentures...........................     1,500     2,500     3,000
SBIC part. Securities.....................     2,500     3,500     4,000
Surety bonds..............................     4,000     5,000     6,000
------------------------------------------------------------------------

       This Title also authorizes the Service Corps of Retired 
     Executives (SCORE). SCORE will be authorized at 5, 6, and 7 
     million dollars for fiscal years 2001, 2002, and 2003, 
     respectively.
       Title V also contains provisions authorizing funding for 
     salaries and expenses at the Small Business Administration. 
     These authorizations are established as ``such sums as may be 
     necessary''.
     Section 503. Additional Reauthorizations
       This section reauthorizes five programs:
       (a) SBDC funding--Increases the authorization from 
     $95,000,000 to $125,000,000.
       (b) Drug Free Workplace--Extends authorization through 
     fiscal year 2003 at $5,000,000 per year.
       (c) HUBZones--Authorizes appropriations of $10,000,000 per 
     year through fiscal year 2003.
       (d) National Women's Business Council--Increases 
     authorizations to $1,000,000 per year and extends 
     authorization through fiscal year 2003.
       (e) Very Small Business Concerns--Extends authorization 
     through September 30, 2003.
       (f) SDB Certification--Extends authorization through 
     September 30, 2003.

                       TITLE VI--HUBZONE PROGRAM

       The HUBZone program aims to direct portions of Federal 
     contracting dollars into areas of the country that in the 
     past have been out of the economic mainstream. HUBZone areas, 
     which include qualified census tracts, poor rural counties, 
     and Indian reservations, often are relatively out-of-the-way 
     places that the stream of commerce passes by, and thus tend 
     to be in low or moderate income areas. These areas can also 
     include certain rural communities and tend, generally, to be 
     low-traffic areas that do not have a reliable customer base 
     to support business development. As a result, business has 
     been reluctant to
       The HUBZone Act seeks to overcome this problem by making it 
     possible for the Federal government to become a customer for 
     small businesses that locate in HUBZones. While a small 
     business works to establish its regular customer base, a 
     Federal contract can help it stabilize its revenues and 
     remain profitable. This gives small business a chance to get 
     a foothold and provides jobs to these areas. New business and 
     new jobs mean new life and hope for these communities.
       Since the HUBZone Act was adopted in the Small Business 
     Reauthorization Act of 1997, the Small Business 
     Administration has been implementing the program. On March 
     22, 1999, SBA began accepting applications from interested 
     firms. Experience to date has revealed several difficulties 
     with implementation, which the Senate Committee has sought to 
     rectify in this legislation. The House receded to provisions 
     put forth by the Senate to rectify problems in the HUBZone 
     program.

               Subtitle A--HUBZones in Native America Act

       Sections 601-04 attempt to resolve problems associated with 
     the operation of HUBZones in regions subject to control of 
     Native Americans and Alaska Native corporations.
       One such problem was an unintended consequence of wording 
     in the 1997 legislation that inadvertently excluded Indian 
     Tribal enterprises and Alaska Native corporations from 
     participation. The definition of ``HUBZone small business 
     concern'' specified that eligible small businesses must be 
     100% owned and controlled by U.S. citizens. This provision 
     sought to insure that HUBZone benefits, financed by the 
     American taxpayer, should be available only for U.S. 
     beneficiaries.
       However, since citizens are ``born or naturalized'' under 
     the Fourteenth Amendment, ownership by citizens implies 
     ownership by individual flesh-and-blood human beings. 
     Corporate owners and Tribal government owners are not ``born 
     or naturalized'' in the usual meanings of those terms. Thus, 
     the Small Business Administration found that it had no 
     authority to certify small businesses owned wholly or partly 
     by Alaska Native Corporations and Tribal governments.
       Since Native American communities were always intended to 
     benefit from HUBZone opportunities, the Committee has 
     included language to make such firms eligible. On many 
     reservations, particularly the isolated ones, the only 
     investment resources available are the Tribal governments. 
     Excluding those governments from investing in their own 
     reservations means, in practical terms, excluding those 
     reservations from the HUBZone program entirely. Similarly, 
     Alaska Native Corporations have corporate resources that are 
     necessary to make real investments in rural Alaska and to 
     provide jobs to Alaska Natives who currently have no hope of 
     getting them.
       The Senate Committee was guided by three broad principles 
     in crafting this legislation. First, no firm should be made 
     eligible solely by virtue of who it is. For example, Alaska 
     Native Corporations will not be eligible solely because they 
     are Alaska Native Corporations. Instead, Alaska Native 
     Corporations and Indian Tribal enterprises should be eligible 
     only if they agree to advance the goals of the HUBZone 
     program--job creation and economic development in the areas 
     that need it most.
       Second, the Senate Committee sought to make the HUBZone 
     program conform to existing Native American policy. The 
     Committee is aware of controversy over whether to change 
     Alaska Native policy so that Alaska Natives exercise 
     governmental jurisdiction over their lands, just like Tribes 
     in the Lower 48 States do on both their reservations and 
     trust lands. The Alaska Native Claims Settlement Act (ANCSA) 
     of 1971 deliberately refrained from creating Alaska Native 
     jurisdictions in Alaska, and this Committee's legislation is 
     intended to conform to existing practice in ANCSA.
       The third principle underlying this bill is that Alaska 
     Natives and Indian Tribes should participate on as even a 
     playing field as possible. Exact equivalence is not possible 
     because the Federal relationship with Alaska Natives differs 
     significantly from the relationship with Indian Tribes, and 
     also because Alaska is a very different State from the Lower 
     48. However, ANCSA provided that Alaska Natives should be 
     eligible to participate in Federal Indian programs ``on the 
     same basis as other Native Americans.''

                  Subtitle B--Other HUBZone Provisions

       Subtitle B contains several technical changes to clarify 
     interpretive issues concerning the original HUBZone Act, as 
     well as new language to correct an unforeseen situation 
     regarding procurement of commodities. Subtitle B makes a 
     further amendment to the categories of eligible HUBZone 
     firms, to include the HUBZone program as one of the tools 
     Community Development Corporations can use in rebuilding 
     their communities and neighborhoods.
     Section 611. Definitions
       Subtitle B includes a technical correction to the 
     definition of ``qualified census tract.'' It also makes two 
     major substantive changes to the definition of ``qualified 
     nonmetropolitan county.''
       First, the definition is clarified to ensure that 
     nonmetropolitan counties in the HUBZone program are those 
     that were considered to be such as of the time of the last 
     decennial (10 year) census. The HUBZone program relies on 
     census tracts selected in metropolitan areas based on the 
     last census, so that a metropolitan county--in order to have 
     such census tracts--must have been considered metropolitan at 
     that time. A nonmetropolitan county may be eligible as a 
     HUBZone based on income data collected during the census or 
     on unemployment data produced annually by the Bureau of Labor 
     Statistics.
       During the ten-year period between each census, some 
     counties become so integrated into the commercial activities 
     of a metropolitan area that they are moved from the 
     nonmetropolitan category to the metropolitan category. Such 
     counties would become ineligible for HUBZone participation. 
     They would not have been metropolitan counties at the time of 
     the last census, so no qualified census tracts would have 
     been selected there. They would also no longer be 
     nonmetropolitan counties, so the income and unemployment 
     tests available to such counties would no longer apply. Thus, 
     counties that change from nonmetropolitan to metropolitan, in 
     the period between each census, would become ineligible until 
     the next census is taken. Subtitle B corrects this problem by 
     freezing, for HUBZone purposes, the categories of 
     metropolitan and nonmetropolitan counties as they stood at 
     the time of the last census.
     Section 612. Eligible Contracts
       In 1999, the Senate Committee became aware of potential 
     implementation problems in HUBZone procurements of certain 
     commodities, particularly food-aid commodities purchased by 
     the Department of Agriculture (USDA), that could lead to 
     unintended and anti-competitive results. Because bids for 
     commodities generally tend to fall within a narrow range of 
     prices, the 10% price evaluation preference that currently 
     exists could be overwhelmingly decisive. In such purchases, a 
     handful of HUBZone firms could secure significant portions of 
     these markets. This, in turn, could prompt other vendors to 
     abandon these markets, thus reducing USDA's vendor base and 
     reducing competition. These are results that would be 
     contrary to the goals set forth in 2 of the Small Business 
     Act.
       To prevent irreparable harm to USDA's vendor base until the 
     matter could be addressed more comprehensively in this 
     legislation, Senator Bond sponsored a proviso in the Fiscal 
     2000 Agriculture Appropriations

[[Page 27321]]

     Act. As adopted in the conference report, 751 of that Act 
     limited the price evaluation preference to 5% for up to half 
     of the total dollar value of each commodity in a particular 
     tender (solicitation). It also prohibited contract awards to 
     a HUBZone firm that would be of such magnitude as to require 
     the firm to subcontract to purchase the commodity being 
     procured, since such a scenario would imply allow these firms 
     to purchase commodities from subcontractors and in turn sell 
     them to the Government at inflated prices.
       Section 612 seeks to address this issue on a more permanent 
     basis. The Senate and House Small Business Committees are 
     aware that USDA relies upon a complex computer program to 
     evaluate commodities bids, and thus Section 612 seeks to set 
     a long-term policy that will not require frequent and 
     expensive changes to this software. Although the legislation 
     reduces the level of HUBZone program incentives that 
     otherwise would be available under the HUBZone Act, Section 
     612 still seeks to ensure substantial awards to HUBZone 
     concerns, while protecting existing incentives available to 
     other types of small business concerns. The House and Senate 
     Small Business Committees intend that these incentives help 
     commodities procurements contribute their fair share toward 
     achieving the Government-wide goal of 23% of prime contract 
     dollars to small business concerns, but
     Section 613. HUBZone Redesignated Areas
       The second major change to the definition of ``qualified 
     nonmetropolitan county'' is the addition of a grandfathering 
     clause. Because the Bureau of Labor Statistics (BLS) issues 
     new county-level unemployment data annually, nonmetropolitan 
     counties may shift into and out of eligibility on a yearly 
     basis. The Committee believes that this type of movement is 
     too fluid for a program that should be stable in its first 
     few years. Companies will be confused about the merits of the 
     program if firms lose and gain eligibility from year to year. 
     A company will not want to invest in such a county only to 
     have it suddenly become ineligible, due to new BLS data, 
     before the company has even had the opportunity to recoup its 
     investment by participating in the HUBZone program.
       Section 613 seeks to stabilize this situation by looking at 
     the unemployment picture over a three-year period for 
     nonmetropolitan counties. It also provides that companies in 
     such a county will have a one year period to pursue HUBZone 
     opportunities and wrap up its activities under the program, 
     after such a county becomes ineligible due to new BLS data. A 
     similar one year period is provided for changes that may 
     result due to enactment of this legislation.
     Section 614. Community Development
       For reasons similar to the problems preventing HUBZone 
     program participation by Indian Tribal enterprises and Alaska 
     Native Corporations, small businesses owned by Community 
     Development Corporations were also inadvertently made 
     ineligible by the original HUBZone Act. The Conference Report 
     has included a provision to correct this problem. As with 
     Tribal enterprises and Alaska Native Corporations, addressed 
     in Subtitle A of this Title, Community Development 
     Corporations are not made automatically eligible. These firms 
     must agree to advance the job-creation goals of the HUBZone 
     program. Specifically, as other businesses must do, these 
     enterprises must maintain their principal office in a HUBZone 
     and employ 35% of their workforce from one or more HUBZones.
     Section 615. Reference Corrections

      TITLE VII--NATIONAL WOMEN'S BUSINESS COUNCIL REAUTHORIZATION

       Title VII reauthorizes the National Women's Business 
     Council for three years, from FY 2001 to 2003, and to 
     increase the annual appropriation from $600,000 to $1 
     million. The increase in funding will allow the Council to: 
     support new and ongoing research; produce and distribute 
     reports and recommendations prepared by the Council; and 
     create an infrastructure to assist states in developing 
     women's business advisory councils, coordinate summits and 
     establish an interstate communication network.
       The increase will also be used to assist Federal agencies 
     meet the procurement goal for women-owned businesses 
     established by Congress in 1994 under section 15(g) of the 
     Small Business Act. By law, Federal agencies must strive to 
     award women-owned small businesses at least 5 percent of the 
     total amount of Federal prime contract dollars. The House and 
     Senate Small Business Committees feel strongly that Federal 
     agencies should meet the five-percent goal, and it supports 
     the Council's plan to expand its efforts to increase the 
     percentage of prime contracts that go to women-owned 
     businesses. Based on current data, women are not receiving 
     awards proportionate to their presence in the economy. For 
     example, women-owned businesses make up 38 percent of all 
     small businesses, yet women-owned businesses received only 
     2.42 percent of the $189 billion in Federal prime contracts 
     in FY 1999.
       According to the National Foundation for Women Business 
     Owners, over the past decade the number of women-owned 
     businesses in this country has grown by 103 percent to an 
     estimated 9.1 million firms. They generate almost $3.6 
     trillion in sales annually and employ more than 27.5 million 
     workers. With the impact of women-owned businesses on our 
     economy increasing at an unprecedented rate, Congress relies 
     on the Council to serve as its eyes and ears as it 
     anticipates the needs of this burgeoning entrepreneurial 
     sector. Since it was established in 1988, the Council, which 
     is bi-partisan, has provided important unbiased advice and 
     counsel to Congress.
       Title VII allows the Council to continue to perform its 
     duties at the level it has done so far, as well as expand its 
     activities to support initiatives that are creating the 
     infrastructure for women's entrepreneurship at the state and 
     local level.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

       Title VIII contains several miscellaneous authorizations 
     and programs.
     Section 801. Loan Application Processing
       This section requires a study of the time required for SBA 
     to process loan applications.
     Section 802. Application of Eligibility Requirements
       This section clarifies that women-owned business, socially 
     and economically disadvantaged business, and veteran owned 
     business status is to be determined without regard for the 
     possible application of state community property laws. 
     Certain SBA offices have been denying loan applications based 
     upon the possibility that qualified individuals may divorce 
     resulting in joint ownership of the small business.
     Section 803. Subcontracting Preference for Veterans
       This clarifies that the language included in subcontracting 
     plans for small business concerns owned and controlled by 
     veterans and used for the purpose of data collection also 
     includes small business concerns owned and controlled by 
     service disabled veterans.
     Section 804. Business Development Center Funding
       This section reforms the formula for funding Small Business 
     Development Centers.
     Section 805. Surety Bonds
       Reauthorizes the Surety Bond financing program.
     Section 806. Size Standards
       Clarifies the treatment of size standards under the North 
     American Industry Classification system established by NAFTA. 
     Also increases agricultural size standards to $750,000 in 
     gross annual receipts.
     Section 807. Native Hawaiian Organizations under Section 8(a)
       Clarifies the standards for participation of Native 
     Hawaiian Organizations in the 8(a) contracting program.
     Section 808. National Veterans Business Development 
         Corporation Correction
       Extends and corrects the authorization language for the 
     NVBDC to correct for a missed appropriation cycle.
     Section 809. Private Sector Resources for SCORE
       Permits the SCORE program to solicit and expends funds 
     donated by private sector organizations.
     Section 810. Data Collection
       This provision requires the SBA to develop a database of 
     bundled contracts. The Administrator is then required to 
     assess whether contracts whose terms have expired but will be 
     recompeted as part of bundled contracts have achieved the 
     savings or improvements in quality that the procuring agency 
     anticipated when it initially consolidated the contract 
     requirements. This analysis also will be used by the 
     Administrator in determining the number of small businesses 
     that have been displaced as prime contractors as a result of 
     contract bundling. The provision requires the Administrator 
     to report annually to the House and Senate Small Business 
     Committees on the cost savings from contract bundling and the 
     number of small businesses displaced as prime contractors. 
     The Administrator is required to use the definition of 
     bundled contract set forth in section 3(o) of the Small 
     Business Act to build the database and report to Congress.
       The annual report of the Administrator of the Small 
     Business Administration must contain data on the number of 
     small businesses displaced as prime contractors, the number 
     of contracts bundled by agencies, the total dollar value of 
     the bundled contracts, the justification for each bundled 
     contract, the total cost savings realized by the bundled 
     contracts, the Small Business Administration's estimates of 
     whether those total cost savings or other benefits will 
     continue to be achieved under bundled contracts, the total 
     dollar value of contracts previously awarded to small 
     business prime contractors, the total dollar value of 
     contracts awarded by the prime to small business 
     subcontractors, the effect of bundling on the ability of 
     small businesses to complete as prime contractors, and the 
     effect on the industry including the reduction in the number 
     of small businesses in the particular industrial 
     classification.
     Section 811. Procurement Program for Women-owned Small 
         Business Concerns
       Gives Federal agencies the authority to restrict 
     competition for any contract for the


     procurement of goods or services by the Federal government to 
     small businesses owned and controlled by women who are 
     economically disadvantaged.

     

                          ____________________