[House Report 105-246]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-246
_______________________________________________________________________


 
   SMALL BUSINESS PROGRAMS REAUTHORIZATION AND AMENDMENTS ACT OF 1997

                                _______
                                

 September 8, 1997.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Talent, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2261]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Small Business, to whom was referred the 
bill (H.R. 2261) to reauthorize and amend the programs of the 
Small Business Act and the Small Business Investment Act, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Small Business 
Programs Reauthorization and Amendments Acts of 1997''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.

                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorizations.

                      TITLE II--FINANCIAL PROGRAMS

                   Subtitle A--General Business Loans

Sec. 201. Securitization regulations.
Sec. 202. Background check of loan applicants.
Sec. 203. Report on increased lender approval, servicing, foreclosure, 
liquidation, and litigation of 7(a) loans.
Sec. 204. Completion of planning for loan monitoring system.

           Subtitle B--Certified Development Company Program

Sec. 221. Reauthorization of fees.
Sec. 222. PCLP participation.
Sec. 223. PCLP eligibility.
Sec. 224. Loss reserves.
Sec. 225. Goals.
Sec. 226. Technical amendments.
Sec. 227. Promulgation of regulations.
Sec. 228. Technical amendment.
Sec. 229. Repeal.
Sec. 230. Loan servicing and liquidation.
Sec. 231. Use of proceeds.
Sec. 232. Lease of property.
Sec. 233. Seller financing.
Sec. 234. Preexisting conditions.

         Subtitle C--Small Business Investment Company Program

Sec. 241. 5-year commitments.
Sec. 242. Program reform.
Sec. 243. Fees.
Sec. 244. Examination fees.

                     Subtitle D--Microloan Program

Sec. 251. Microloan program extension.
Sec. 252. Supplemental microloan grants.

                TITLE III--WOMEN'S BUSINESS ENTERPRISES

Sec. 301. Reports.
Sec. 302. Council duties.
Sec. 303. Council membership.
Sec. 304. Authorization of appropriations.
Sec. 305. Women's business centers.
Sec. 306. Office of Women's Business Ownership.

                   TITLE IV--COMPETITIVENESS PROGRAM

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

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Small business development centers.
Sec. 502. Small business export promotion.
Sec. 503. Pilot preferred surety bond guarantee program extension.
Sec. 504. Very small business concerns.
Sec. 505. Extension of cosponsorship authority.
Sec. 506. Trade assistance program for small business concerns harmed 
by NAFTA.

                        TITLE I--AUTHORIZATIONS

SEC. 101. AUTHORIZATIONS.

  Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended 
by striking subsections (l) through (q) and inserting the following:
  ``(l) The following program levels are authorized for fiscal year 
1998:
          ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  ``(A) $40,000,000 in technical assistance grants, as 
                provided in section 7(m); and
                  ``(B) $60,000,000 in loans, as provided in section 
                7(m).
          ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $15,040,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                  ``(A) $11,000,000,000 in general business loans as 
                provided in section 7(a);
                  ``(B) $3,000,000,000 in financings as provided in 
                section 7(a)(13) of this Act and section 504 of the 
                Small Business Investment Act of 1958;
                  ``(C) $1,000,000,000 in loans as provided in section 
                7(a)(21); and
                  ``(D) $40,000,000 in loans as provided in section 
                7(m).
          ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                  ``(A) $600,000,000 in purchases of participating 
                securities; and
                  ``(B) $500,000,000 in guarantees of debentures.
          ``(4) For the programs authorized by part B of title IV of 
        the Small Business Investment Act of 1958, the Administration 
        is authorized to enter into guarantees not to exceed 
        $2,000,000,000, of which not more than $650,000,000 may be in 
        bonds approved pursuant to section 411(a)(3) of that Act.
          ``(5) The Administration is authorized to make grants or 
        enter into cooperative agreements--
                  ``(A) for the Service Corps of Retired Executives 
                program authorized by section 8(b)(1), $4,000,000; and
                  ``(B) for activities of small business development 
                centers pursuant to section 21(c)(3)(G), $15,000,000, 
                to remain available until expended.
  ``(m)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1998 such sums as may be necessary to 
carry out this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the Small Business Investment Act of 1958, including salaries and 
expenses of the Administration.
  ``(2) Notwithstanding paragraph (1), for fiscal year 1998--
          ``(A) no funds are authorized to be provided to carry out the 
        loan program authorized by section 7(a)(21) except by transfer 
        from another Federal department or agency to the 
        Administration, unless the program level authorized for general 
        business loans under subsection (l)(2)(A) is fully funded; and
          ``(B) the Administration may not approve loans on behalf of 
        the Administration or on behalf of any other department or 
        agency, by contract or otherwise, under terms and conditions 
        other than those specifically authorized under this Act or the 
        Small Business Investment Act of 1958, except that it may 
        approve loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
  ``(n) The following program levels are authorized for fiscal year 
1999:
          ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  ``(A) $60,000,000 in technical assistance grants as 
                provided in section 7(m); and
                  ``(B) $60,000,000 in loans, as provided in section 
                7(m).
          ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $16,540,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                  ``(A) $12,000,000,000 in general business loans as 
                provided in section 7(a);
                  ``(B) $3,500,000,000 in financings as provided in 
                section 7(a)(13) of this Act and section 504 of the 
                Small Business Investment Act of 1958;
                  ``(C) $1,000,000,000 in loans as provided in section 
                7(a)(21); and
                  ``(D) $40,000,000 in loans as provided in section 
                7(m).
          ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                  ``(A) $700,000,000 in purchases of participating 
                securities; and
                  ``(B) $650,000,000 in guarantees of debentures.
          ``(4) For the programs authorized by part B of title IV of 
        the Small Business Investment Act of 1958, the Administration 
        is authorized to enter into guarantees not to exceed 
        $2,000,000,000, of which not more than $650,000,000 may be in 
        bonds approved pursuant to section 411(a)(3) of that Act.
          ``(5) The Administration is authorized to make grants or 
        enter cooperative agreements--
                  ``(A) for the Service Corps of Retired Executives 
                program authorized by section 8(b)(1), $4,500,000; and
                  ``(B) for activities of small business development 
                centers pursuant to section 21(c)(3)(G), not to exceed 
                $15,000,000, to remain available until expended.
  ``(o)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1999 such sums as may be necessary to 
carry out this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the Small Business Investment Act of 1958, including salaries and 
expenses of the Administration.
  ``(2) Notwithstanding paragraph (1), for fiscal year 1999--
          ``(A) no funds are authorized to be provided to carry out the 
        loan program authorized by section 7(a)(21) except by transfer 
        from another Federal department or agency to the 
        Administration, unless the program level authorized for general 
        business loans under subsection (n)(2)(A) is fully funded; and
          ``(B) the Administration may not approve loans on behalf of 
        the Administration or on behalf of any other department or 
        agency, by contract or otherwise, under terms and conditions 
        other than those specifically authorized under this Act or the 
        Small Business Investment Act of 1958, except that it may 
        approve loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
  ``(p) The following program levels are authorized for fiscal year 
2000:
          ``(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  ``(A) $75,000,000 in technical assistance grants as 
                provided in section 7(m); and
                  ``(B) $60,000,000 in direct loans, as provided in 
                section 7(m).
          ``(2) For the programs authorized by this Act, the 
        Administration is authorized to make $19,040,000,000 in 
        deferred participation loans and other financings. Of such sum, 
        the Administration is authorized to make--
                  ``(A) $13,500,000,000 in general business loans as 
                provided in section 7(a);
                  ``(B) $4,500,000,000 in financings as provided in 
                section 7(a)(13) of this Act and section 504 of the 
                Small Business Investment Act of 1958;
                  ``(C) $1,000,000,000 in loans as provided in section 
                7(a)(21); and
                  ``(D) $40,000,000 in loans as provided in section 
                7(m).
          ``(3) For the programs authorized by title III of the Small 
        Business Investment Act of 1958, the Administration is 
        authorized to make--
                  ``(A) $850,000,000 in purchases of participating 
                securities; and
                  ``(B) $700,000,000 in guarantees of debentures.
          ``(4) For the programs authorized by part B of title IV of 
        the Small Business Investment Act of 1958, the Administration 
        is authorized to enter into guarantees not to exceed 
        $2,000,000,000, of which not more than $650,000,000 may be in 
        bonds approved pursuant to the provisions of section 411(a)(3) 
        of that Act.
          ``(5) The Administration is authorized to make grants or 
        enter cooperative agreements--
                  ``(A) for the Service Corps of Retired Executives 
                program authorized by section 8(b)(1), $5,000,000; and
                  ``(B) for activities of small business development 
                centers pursuant to section 21(c)(3)(G), not to exceed 
                $15,000,000, to remain available until expended.
  ``(q)(1) There are authorized to be appropriated to the 
Administration for fiscal year 2000 such sums as may be necessary to 
carry out this Act, including administrative expenses and necessary 
loan capital for disaster loans pursuant to section 7(b), and to carry 
out the provisions of the Small Business Investment Act of 1958, 
including salaries and expenses of the Administration.
  ``(2) Notwithstanding paragraph (1), for fiscal year 2000--
          ``(A) no funds are authorized to be provided to carry out the 
        loan program authorized by section 7(a)(21) except by transfer 
        from another Federal department or agency to the 
        Administration, unless the program level authorized for general 
        business loans under subsection (p)(2)(A) is fully funded; and
          ``(B) the Administration may not approve loans on behalf of 
        the Administration or on behalf of any other department or 
        agency, by contract or otherwise, under terms and conditions 
        other than those specifically authorized under this Act or the 
        Small Business Investment Act of 1958, except that it may 
        approve loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.''.

                      TITLE II--FINANCIAL PROGRAMS

                   Subtitle A--General Business Loans

SEC. 201. SECURITIZATION REGULATIONS.

  The Administrator shall promulgate final regulations permitting bank 
and non-bank lenders to sell or securitize the non-guaranteed portion 
of loans made under section 7(a) of the Small Business Act (15 U.S.C. 
636(a)). Such regulations shall be issued within 90 days of the date of 
enactment of this Act, and shall allow securitizations to proceed as 
regularly as is possible within the bounds of prudent and sound 
financial management practice.

SEC. 202. BACKGROUND CHECK OF LOAN APPLICANTS.

  Section 7(a)(1) of the Small Business Act (15 U.S.C. 636(a)(1)) is 
amended by striking ``(1)'' and inserting the following:
          ``(1)(A) Credit elsewhere.--'', and by adding the following 
        new paragraph at the end:
          ``(B) Background checks.--Prior to the approval of any loan 
        made pursuant to this subsection, or section 503 of the Small 
        Business Investment Act, the Administrator shall verify the 
        applicant's criminal background, or lack thereof, through the 
        best available means, including, if possible, use of the 
        National Crime Information Center computer system at the 
        Federal Bureau of Investigation.''.

SEC. 203. REPORT ON INCREASED LENDER APPROVAL, SERVICING, FORECLOSURE, 
                    LIQUIDATION, AND LITIGATION OF 7(A) LOANS.

  (a) Within six months of the date of enactment of this act the 
Administrator shall report on action taken and planned for future 
reliance on private sector lender resources to originate, approve, 
close, service, liquidate, foreclose, and litigate loans made under 
Section 7(a) of the Small Business Act. The report should address 
administrative and other steps necessary to achieve these results, 
including--
          (1) streamlining the process for approving lenders and 
        standardizing requirements;
          (2) establishing uniform reporting requirements using on-line 
        automated capabilities to the maximum extent feasible;
          (3) reducing paperwork through automation, simplified forms 
        or incorporation of lender's forms;
          (4) providing uniform standards for approval, closing, 
        servicing, foreclosure, and liquidation;
          (5) promulgating new regulations or amending existing ones;
          (6) establishing a timetable for implementing the plan for 
        reliance on private sector lenders;
          (7) implementing organizational changes at SBA; and
          (8) estimating the annual savings that would occur as a 
        result of implementation.
  (b) In preparing the report the Administrator shall seek the views 
and consult with, among others, 7(a) borrowers and lenders, small 
businesses who are potential program participants, financial 
institutions who are potential program lenders, and representative 
industry associations, such as the U. S. Chamber of Commerce, the 
American Bankers Association, the National Association of Government 
Guaranteed Lenders and the Independent Bankers Association of America.

SEC. 204. COMPLETION OF PLANNING FOR LOAN MONITORING SYSTEM.

  (a) The Administrator shall perform and complete the planning needed 
to serve as the basis for funding the development and implementation of 
computerized loan monitoring system, including -
          (1) fully defining the system requirement using on-line, 
        automated capabilities to the extent feasible;
          (2) identifying all data inputs and outputs necessary for 
        timely report generation;
          (3) benchmark loan monitoring business processes and systems 
        against comparable industry processes and, if appropriate, 
        simplify or redefine work processes based on these benchmarks;
          (4) determine data quality standards and control systems for 
        ensuring information accuracy;
          (5) identify an acquisition strategy and work increments to 
        completion;
          (6) analyze the benefits and costs of alternatives and use to 
        demonstrate the advantage of the final project;
          (7) ensure that the proposed information system is consistent 
        with the agency's information architecture; and
          (8) estimate the cost to system completion, identifying the 
        essential cost element.
  (b) Six months from the date of enactment of this Act, the 
Administrator shall report to the House and Senate Committees on Small 
Business pursuant to the requirements of subsection (a), and shall also 
submit a copy of the report to the General Accounting Office, which 
shall evaluate the report for compliance with subsection (a) and shall 
submit such evaluation to both Committees no later than 28 days after 
receipt of the report from the Small Business Administration. None of 
the funds provided for the purchase of the loan monitoring system may 
be expended until the requirements of this section have been satisfied.

           Subtitle B--Certified Development Company Program

SEC. 221. REAUTHORIZATION OF FEES.

  Section 503 of the Small Business Investment Act of 1958 (15 U.S.C. 
697) is amended--
          (1) by striking subsection (b)(7)(A) and inserting the 
        following:
                  ``(A) assesses and collects a fee, which shall be 
                payable by the borrower, in an amount equal to 0.9375 
                percent per year of the outstanding balance of the 
                loan; and'';
          (2) by striking from subsection (d)(2) ``equal to 50 basis 
        points'' and inserting ``equal to not more than 50 basis 
        points,'';
          (3) by adding the following at the end of subsection (d)(2): 
        ``The amount of the fee authorized herein shall be established 
        annually by the Administration in the minimal amount necessary 
        to reduce the cost (as that term is defined in section 502 of 
        the Federal Credit Reform Act of 1990) to the Administration of 
        purchasing and guaranteeing debentures under this Act to 
        zero.''; and
          (4) by striking from subsection (f) ``1997'' and inserting 
        ``2000''.

SEC. 222. PCLP PARTICIPATION.

  Section 508(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(a)) is amended by striking ``not more than 15''.

SEC. 223. PCLP ELIGIBILITY.

  Section 508(b)(2) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(b)(2)) is amended by striking paragraphs (A) and (B) and 
inserting:
                  ``(A) is an active certified development company in 
                good standing and has been an active participant in the 
                accredited lenders program during the entire 12-month 
                period preceding the date on which the company submits 
                an application under paragraph (1), except that the 
                Administration may waive this requirement if the 
                company is qualified to participate in the accredited 
                lenders program;
                  ``(B) has a history (i) of submitting to the 
                Administration adequately analyzed debenture guarantee 
                application packages and (ii) of properly closing 
                section 504 loans and servicing its loan portfolio; 
                and''.

SEC. 224. LOSS RESERVES.

  Section 508(c) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(c)) is amended to read as follows:
  ``(c) Loss Reserve.--
          ``(1) Establishment.--A company designated as a premier 
        certified lender shall establish a loss reserve for financing 
        approved pursuant to this section.
          ``(2) Amount.--The amount of the loss reserve shall be equal 
        to 10 percent of the amount of the company's exposure as 
        determined under subsection (b)(2)(C).
          ``(3) Assets.--The loss reserve shall be comprised of any 
        combination of the following types of assets:
                  ``(A) segregated funds on deposit in an account or 
                accounts with a federally insured depository 
                institution or institutions selected by the company, 
                subject to a collateral assignment in favor of, and in 
                a format acceptable to, the Administration; or
                  ``(B) irrevocable letter or letters of credit, with a 
                collateral assignment in favor of, and a commercially 
                reasonable format acceptable to, the Administration.
          ``(4) Contributions.--The company shall make contributions to 
        the loss reserve, either cash or letters of credit as provided 
        above, in the following amounts and at the following intervals:
                  ``(A) 50 percent when a debenture is closed;
                  ``(B) 25 percent additional not later than 1 year 
                after a debenture is closed; and
                  ``(C) 25 percent additional not later than 2 years 
                after a debenture is closed.
          ``(5) Replenishment.--If a loss has been sustained by the 
        Administration, any portion of the loss reserve, and other 
        funds provided by the premier company as necessary, may be used 
        to reimburse the Administration for the company's 10 percent 
        share of the loss as provided in subsection (b)(2)(C). If the 
        company utilizes the reserve, within 30 days it shall replace 
        an equivalent amount of funds.
          ``(6) Disbursements.--The Administration shall allow the 
        certified development company to withdraw from the loss reserve 
        amounts attributable to any debenture which has been repaid.''.

SEC. 225. GOALS.

  Section 508 of the Small Business Investment Act of 1958 (15 U.S.C. 
697e) is amended by inserting the following after subsection (d) and by 
redesignating subsections (e) to (i) as (f) to (j):
  ``(e) Program Goals.--Certified development companies participating 
in this program shall establish a goal of processing 50 percent of 
their loan applications for section 504 assistance pursuant to the 
premier certified lender program authorized in this section.''.

SEC. 226. TECHNICAL AMENDMENTS.

  Section 508(g) of the Small Business Investment Act of 1958 (15 
U.S.C. 697(g)) is amended--
          (1) in subsection (g), as redesignated herein, is amended by 
        striking ``State or local'' and inserting ``certified'';
          (2) in subsection (h), as redesignated herein--
                  (A) by striking ``EFFECT OF SUSPENSION OR 
                DESIGNATION'' and inserting ``EFFECT OF SUSPENSION OR 
                REVOCATION''; and
                  (B) by striking ``under subsection (f)'' and 
                inserting ``under subsection (g)''.

SEC. 227. PROMULGATION OF REGULATIONS.

  Section 508(i) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(i)), as redesignated herein, is amended to read as follows:
  ``(i) Regulations.--Not later than 90 days after the date of 
enactment of this section, the Administration shall promulgate 
regulations to carry out this section. Not later than 120 days after 
the date of enactment, the Administration shall issue program 
guidelines and implement the changes made herein.''.

SEC. 228. TECHNICAL AMENDMENT.

  Section 508(j) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(j)), as redesignated herein, is amended by striking ``other 
lenders'' and inserting ``other lenders, specifically comparing default 
rates and recovery rates on liquidations''.

SEC. 229. REPEAL.

  Section 217(b) of Public Law 103-403 (108 Stat. 4185) is repealed.

SEC. 230. LOAN SERVICING AND LIQUIDATION.

  Section 508(d)(1) of the Small Business Investment Act of 1958 (15 
U.S.C. 697e(d)) is amended by striking ``to approve loans'' and 
inserting ``to approve, authorize, close, service, foreclose, litigate, 
and liquidate loans''.

SEC. 231. USE OF PROCEEDS.

  Section 502(1) of the Small Business Investment Act of 1958 (15 
U.S.C. 696(1)) is amended to read as follows:
          ``(1) The proceeds of any such loan shall be used solely by 
        such borrower or borrowers to assist an identifiable small-
        business or businesses and for a sound business purpose 
        approved by the Administration.''.

SEC. 232. LEASE OF PROPERTY.

  Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696) is amended by adding the following new subsection:
          ``(5) Not to exceed 25 percent of any project may be 
        permanently leased by the assisted small business: Provided,  
        That the assisted small business shall be required to occupy 
        and use not less than 55 percent of the space in the project 
        after the execution of any leases authorized in this 
        section.''.

SEC. 233. SELLER FINANCING AND COLLATERALIZATION.

  Section 502(3) of the Small Business Investment Act of 1958 (15 
U.S.C. 696(3)) is amended by inserting the following new subparagraphs:
                  ``(D) Seller financing.--Seller provided financing 
                may be used to meet the requirements of--
                          ``(i) paragraph (B), if the seller 
                        subordinates his interest in the property to 
                        the debenture guaranteed by the Administration; 
                        and
                          ``(ii) not to exceed 50 percent of the 
                        amounts required by paragraph (C).
                  ``(E) Collateralization.--The collateral provided by 
                the small business concern generally shall include a 
                subordinate lien position on the property being 
                financed under this title, and is only one of the 
                factors to be evaluated in the credit determination. 
                Additional collateral shall be required only if the 
                Administration determines, on a case by case basis, 
                that additional security is necessary to protect the 
                interest of the Government.''.

SEC. 234. PREEXISTING CONDITIONS.

  Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696) is amended by adding the following new paragraph:
          ``(6) Any loan authorized under this section shall not be 
        denied or delayed for approval by the Administration due to 
        concerns over preexisting environmental conditions: Provided, 
        That the development company provides the Administration a 
        letter issued by the appropriate State or Federal environmental 
        protection agency specifically stating that the environmental 
        agency will not institute any legal proceedings against the 
        borrower or, in the event of a default, the development company 
        or the Administration based on the preexisting environmental 
        conditions: Provided further, That the borrower shall agree to 
        provide environmental agencies access to the property for any 
        reasonable and necessary remediation efforts or inspections.''.

         Subtitle C--Small Business Investment Company Program

SEC. 241. 5-YEAR COMMITMENTS.

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

SEC. 242. PROGRAM REFORM.

  (a) Tax Distributions.--Section 303(g)(8) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(g)(8)) is amended in the first 
sentence--
          (1) by inserting ``, for each calendar quarter or once 
        annually, as the company may elect,'' after ``the company 
        may''; and
          (2) by inserting ``for the preceding quarter or year'' before 
        the period.
  (b) Leverage Fee.--Section 303(i) of the Small Business Investment 
Act of 1958 (15 U.S.C. 683(i)) is amended by striking ``, payable 
upon'' and all that follows before the period and inserting the 
following: ``in the following manner: 1 percent upon the date on which 
the Administration enters into any commitment for such leverage with 
the licensee, and the balance of 2 percent (or 3 percent in which case 
in which no commitment has been entered into by the Administration) on 
the date on which the leverage is drawn by the licensee''.
  (c) Periodic Issuance of Guarantees and Trust Certificates.--Section 
320 of the Small Business Investment Act of 1958 (15 U.S.C. 687m) is 
amended by striking ``three months'' and inserting ``6 months''.
  (d) Indexing for Leverage.--Section 303 of the Small Business 
Investment Act of 1958 (15 U.S.C. 683) is amended--
          (1) in subsection (b)--
                  (A) in paragraph (2), by adding at the end the 
                following:
                  ``(D)(i) The dollar amounts in subparagraphs (A), 
                (B), and (C) shall be adjusted annually to reflect 
                increases in the Consumer Price Index established by 
                the Bureau of Labor Statistics of the Department of 
                Labor.
                  ``(ii) The initial adjustments made under this 
                subparagraph after the date of enactment of the Small 
                Business Reauthorization Act of 1997 shall reflect only 
                increases from March 31, 1993.''; and
                  (B) by striking paragraph (4) and inserting the 
                following:
          ``(4) Maximum aggregate amount of leverage.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), the aggregate amount of outstanding leverage 
                issued to any company or companies that are commonly 
                controlled (as determined by the Administrator) may not 
                exceed $90,000,000, as adjusted annually for increases 
                in the Consumer Price Index.
                  ``(B) Exceptions.--The Administrator may, on a case-
                by-case basis--
                          ``(i) approve an amount of leverage that 
                        exceeds the amount described in subparagraph 
                        (A) for companies under common control; and
                          ``(ii) impose such additional terms and 
                        conditions as the Administrator determines to 
                        be appropriate to minimize the risk of loss to 
                        the Administration in the event of default.
                  ``(C) Applicability of other provisions.--Any 
                leverage that is issued to a company or companies 
                commonly controlled in an amount that exceeds 
                $90,000,000, whether as a result of an increase in the 
                Consumer Price Index or a decision of the 
                Administrator, is subject to subsection (d).''; and
          (2) by striking subsection (d) and inserting the following:
  ``(d) Required Certifications.--
          ``(1) In general.--The Administrator shall require each 
        licensee, as a condition of approval of an application for 
        leverage, to certify in writing--
                  ``(A) for licensees with leverage less than or equal 
                to $90,000,000, that not less than 20 percent of the 
                licensee's aggregate dollar amount of financings will 
                be provided to smaller enterprises; and
                  ``(B) for licensees with leverage in excess of 
                $90,000,000, that, in addition to satisfying the 
                requirements of subparagraph (A), 100 percent of the 
                licensee's aggregate dollar amount of financings made 
                in whole or in part with leverage in excess of 
                $90,000,000 will be provided to smaller enterprises as 
                defined in section 103(12).
          ``(2) Multiple licensees.--Multiple licensees under common 
        control (as determined by the Administrator) shall be 
        considered to be a single licensee for purposes of determining 
        both the applicability of and compliance with the investment 
        percentage requirements of this subsection.''.

SEC. 243. FEES.

  Section 301 of the Small Business Investment Act of 1958 (15 U.S.C. 
681) is amended by adding the following:
  ``(d) Fees.--
          ``(1) In general.--The Administration may prescribe fees to 
        be paid by each applicant for a license to operate as a small 
        business investment company under this Act.
          ``(2) Use of amounts.--Amounts collected pursuant to this 
        subsection shall be--
                  ``(A) deposited in the account for salaries and 
                expenses of the Administration; and
                  ``(B) available without further appropriation solely 
                to cover contracting and other administrative costs 
                related to licensing.''.

SEC. 244. EXAMINATION FEES.

  Section 310(b) of the Small Business Investment Act of 1958 (15 
U.S.C. 687b(b)) is amended by inserting after the first sentence the 
following: ``Fees collected under this subsection shall be deposited in 
the account for salaries and expenses of the Administration, and shall 
be available without further appropriation solely to cover the costs of 
examinations and other program oversight activities.''.

                     Subtitle D--Microloan Program

SEC. 251. MICROLOAN PROGRAM EXTENSION.

  (a) Loan Limits.--Section 7(m)(3)(C) of the Small Business Act (15 
U.S.C. 636(m)(3)(C)) is amended by striking ``$2,500,000'' and 
inserting ``$3,500,000''.
  (b) Loan Loss Reserve Fund.--Section 7(m)(3)(D) of the Small Business 
Act (15 U.S.C. 636(m)(3)(D)) is amended by striking clauses (i) and 
(ii), and inserting the following:
                          ``(i) during the initial 5 years of the 
                        intermediary's participation in the program 
                        under this subsection, at a level equal to not 
                        more than 15 percent of the outstanding balance 
                        of the notes receivable owed to the 
                        intermediary; and
                          ``(ii) in each year of participation 
                        thereafter, at a level equal to not more than 
                        the greater of--
                                  ``(I) 2 times an amount reflecting 
                                the total losses of the intermediary as 
                                a result of participation in the 
                                program under this subsection, as 
                                determined by the Administrator on a 
                                case-by-case basis; or
                                  ``(II) 10 percent of the outstanding 
                                balance of the notes receivable owed to 
                                the intermediary.''.
  (c) Authorization of Appropriations.--Section 7(m) of the Small 
Business Act (15 U.S.C. 636(m)) is amended--
          (1) in the subsection heading, by striking ``Demonstration'';
          (2) by striking ``Demonstration'' each place that term 
        appears;
          (3) by striking ``demonstration'' each place that term 
        appears; and
          (4) in paragraph (12), by striking ``during fiscal years 1995 
        through 1997'' and inserting ``during fiscal years 1998 through 
        2000''.

SEC. 252. SUPPLEMENTAL MICROLOAN GRANTS.

  Section 7(m)(4) of the Small Business Act (15 USC 636 (m)(4)) is 
amended by adding the following:
                  ``(F)(i) The Administration may accept and disburse 
                funds received from another Federal department or 
                agency to provide additional assistance to individuals 
                who are receiving assistance under the State program 
                funded under part A of title IV of the Social Security 
                Act (42 USC 601 et seq.), or under any comparable 
                State-funded means-tested program of assistance for 
                low-income individuals.
                  ``(ii) Grant proceeds are in addition to other grants 
                provided by this subsection and shall not require the 
                contribution of matching amounts to be eligible. The 
                grants may be used to pay or reimburse a portion of 
                child care and transportation costs of individuals 
                described in clause (i) and for marketing, management 
                and technical assistance.
                  ``(iii) Prior to accepting and distributing any such 
                grants, the Administration shall enter a Memorandum of 
                Understanding with the department or agency specifying 
                the terms and conditions of the grants and providing 
                appropriate monitoring of expenditures by the 
                intermediary and ultimate grant recipient to insure 
                compliance with the purpose of the grant.
                  ``(iv) On January 31, 1999, and annually thereafter, 
                the Administration shall submit to the Committees on 
                Small Business of the House of Representatives and the 
                Senate a report on any monies distributed pursuant to 
                the provisions of this paragraph.
                  ``(v) No funds are authorized to be provided to carry 
                out the grant program authorized by this paragraph (F) 
                except by transfer from another Federal department or 
                agency to the Administration.''.

                TITLE III--WOMEN'S BUSINESS ENTERPRISES

SEC. 301. REPORTS.

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

SEC. 302. COUNCIL DUTIES.

  Section 406 of the Women's Business Ownership Act of 1988 (15 U.S.C. 
631 note) is amended--
          (1) in subsection (c), by inserting after ``Administrator'' 
        the following: ``(through the Assistant Administrator for the 
        Office of Women's Business Ownership)''; and
          (2) in subsection (d)--
                  (A) in paragraph (4), by striking ``and'' at the end;
                  (B) in paragraph (5), by striking the period at the 
                end and inserting ``; and''; and
                  (C) by adding at the end the following:
          ``(6) submit to the President and to the Committee on Small 
        Business of the Senate and the Committee on Small Business of 
        the House of Representatives, an annual report containing--
                  ``(A) a detailed description of the activities of the 
                council, including a status report on the Council's 
                progress toward meeting its duties outlined in 
                subsections (a) and (d) of section 406;
                  ``(B) the findings, conclusions, and recommendations 
                of the Council; and
                  ``(C) the Council's recommendations for such 
                legislation and administrative actions as the Council 
                considers appropriate to promote the development of 
                small business concerns owned and controlled by women.
  ``(e) Submission of Reports.--The annual report required by 
subsection (d) shall be submitted not later than 90 days after the end 
of each fiscal year.''.

SEC. 303. COUNCIL MEMBERSHIP.

  Section 407 of the Women's Business Ownership Act of 1988 (15 U.S.C. 
631 note) is amended--
          (1) in subsection (a), by striking ``and Amendments Act of 
        1994'' and inserting ``Act of 1997'';
          (2) in subsection (b)--
                  (A) by striking ``and Amendments Act of 1994'' and 
                inserting ``Act of 1997'';
                  (B) by inserting after ``the Administrator shall'' 
                the following: ``, after receiving the recommendations 
                of the Chair and the Ranking Member of the Minority of 
                the Committees on Small Business of the House of 
                Representatives and the Senate,'';
                  (C) by striking ``9'' and inserting ``14'';
                  (D) in paragraph (1), by striking ``2'' and inserting 
                ``4'';
                  (E) in paragraph (2)--
                          (i) by striking ``2'' and inserting ``4''; 
                        and
                          (ii) by striking ``and'' at the end;
                  (F) in paragraph (3)--
                          (i) by striking ``5'' and inserting ``6''; 
                        and
                          (ii) by striking ``national''.

SEC. 304. AUTHORIZATION OF APPROPRIATIONS.

  Section 409 of the Women's Business Ownership Act of 1988 (15 U.S.C. 
631 note) is amended--
          (1) by striking ``1995 through 1997'' and inserting ``1998 
        through 2000''; and
          (2) by striking ``$350,000'' and inserting ``$600,000, of 
        which $200,000 shall be for grants for research of women's 
        procurement or finance issues.''.

SEC. 305. WOMEN'S BUSINESS CENTERS.

  (a) In General.--Section 29 of the Small Business Act (15 U.S.C. 656) 
is amended to read as follows:

``SEC. 29. WOMEN'S BUSINESS CENTERS.

  ``(a) Definition.--For the purposes of this section the term `small 
business concern owned and controlled by women', either startup or 
existing, includes any small business concern--
          ``(1) that is not less than 51 percent owned by one or more 
        women; and
          ``(2) the management and daily business operations of which 
        are controlled by one or more women.
  ``(b) Authority.--The Administration may provide financial assistance 
to private organizations to conduct 5-year projects for the benefit of 
small business concerns owned and controlled by women. The projects 
shall provide--
          ``(1) financial assistance, including training and counseling 
        in how to apply for and secure business credit and investment 
        capital, preparing and presenting financial statements, and 
        managing cash flow and other financial operations of a business 
        concern;
          ``(2) management assistance, including training and 
        counseling in how to plan, organize, staff, direct, and control 
        each major activity and function of a small business concern; 
        and
          ``(3) marketing assistance, including training and counseling 
        in identifying and segmenting domestic and international market 
        opportunities, preparing and executing marketing plans, 
        developing pricing strategies, locating contract opportunities, 
        negotiating contracts, and utilizing varying public relations 
        and advertising techniques.
  ``(c) Conditions of Participation.--
          ``(1) Non-federal contributions.--As a condition of receiving 
        financial assistance authorized by this section, the recipient 
        organization shall agree to obtain, after its application has 
        been approved and notice of award has been issued, cash 
        contributions from non-Federal sources as follows:
                  ``(A) In the first and second years, 1 non-Federal 
                dollar for each 2 Federal dollars.
                  ``(B) In the third year, 1 non-Federal dollar for 
                each Federal dollar.
                  ``(C) In the fourth and fifth years, 2 non-Federal 
                dollars for each Federal dollar.
          ``(2) Form of non-federal contributions.--Not more than one-
        half of the non-Federal sector matching assistance may be in 
        the form of in-kind contributionswhich are budget line items 
only, including but not limited to office equipment and office space.
          ``(3) Form of federal contributions.--The financial 
        assistance authorized pursuant to this section may be made by 
        grant, contract, or cooperative agreement and may contain such 
        provision, as necessary, to provide for payments in lump sum or 
        installments, and in advance or by way of reimbursement. The 
        Administration may disburse up to 25 percent of each year's 
        Federal share awarded to a recipient organization after notice 
        of the award has been issued and before the non-Federal sector 
        matching funds are obtained.
          ``(4) Failure to obtain private funding.--If any recipient of 
        assistance fails to obtain the required non-Federal 
        contribution during any project, it shall not be eligible 
        thereafter for advance disbursements pursuant to paragraph (3) 
        during the remainder of that project, or for any other project 
        for which it is or may be funded by the Administration, and 
        prior to approving assistance to such organization for any 
        other projects, the Administration shall specifically determine 
        whether the Administration believes that the recipient will be 
        able to obtain the requisite non-Federal funding and enter a 
        written finding setting forth the reasons for making such 
        determination.
  ``(d) Contract Authority.--A women's business center may enter into a 
contract with a Federal department or agency to provide specific 
assistance to women and other underserved small business concerns. 
Performance of such contract should not hinder the women's business 
centers in carrying out the terms of the grant received by the women's 
business centers from the Administration.
  ``(e) Submission of 5-Year Plan.--Each applicant organization 
initially shall submit a 5-year plan to the Administration on proposed 
fundraising and training activities, and a recipient organization may 
receive financial assistance under this program for a maximum of 5 
years per women's business center.
  ``(f) Criteria.--The Administration shall evaluate and rank 
applicants in accordance with predetermined selection criteria that 
shall be stated in terms of relative importance. Such criteria and 
their relative importance shall be made publicly available and stated 
in each solicitation for applications made by the Administration. The 
criteria shall include--
          ``(1) the experience of the applicant in conducting programs 
        or ongoing efforts designed to impart or upgrade the business 
        skills of women business owners or potential owners;
          ``(2) the present ability of the applicant to commence a 
        project within a minimum amount of time;
          ``(3) the ability of the applicant to provide training and 
        services to a representative number of women who are both 
        socially and economically disadvantaged; and
          ``(4) the location for the women's business center site 
        proposed by the applicant.
  ``(g) Office of Women's Business Ownership.--There is established 
within the Administration an Office of Women's Business Ownership, 
which shall be responsible for the administration of the 
Administration's programs for the development of women's business 
enterprises (as that term is defined in section 408 of the Women's 
Business Ownership Act of 1988). The Office of Women's Business 
Ownership shall be administered by an Assistant Administrator, who 
shall be appointed by the Administrator.
  ``(h) Report.--The Administrator shall prepare and submit an annual 
report to the Committees on Small Business of the House of 
Representatives and the Senate on the effectiveness of all projects 
conducted under the authority of this section. Such report shall 
provide information concerning--
          ``(1) the number of individuals receiving assistance;
          ``(2) the number of startup business concerns formed;
          ``(3) the gross receipts of assisted concerns;
          ``(4) increases or decreases in profits of assisted concerns; 
        and
          ``(5) the employment increases or decreases of assisted 
        concerns.
  ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated $8,000,000 per year to carry out the projects authorized 
by this section of which for fiscal year 1998 not more than 10 percent 
may be used for administrative expenses related to the program. Amounts 
appropriated pursuant to this subsection for fiscal year 1999 and later 
are to be used exclusively for grant awards and not for costs incurred 
by the Administration for the management and administration of the 
program. Notwithstanding any other provision of law, the Administration 
may use such expedited acquisition methods as it deems appropriate, 
through the Assistant Administrator of the Office of Women's Business 
Ownership, to achieve the purposes of this section, except that the 
Administration shall ensure that all small business sources are 
provided a reasonable opportunity to submit proposals.''.
  (b) Applicability.--Any organization conducting a 3-year project 
under section 29 of the Small Business Act (15 U.S.C. 656) on the day 
before the date of enactment of this Act, may extend the term of that 
project to a total term of 5 years and receive financial assistance in 
accordance with section 29(c) of the Small Business Act (as amended by 
this title) subject to procedures established by the Administrator in 
coordination with the Office of Women's Business Ownership established 
under section 29 of the Small Business Act (15 U.S.C. 656) (as amended 
by this title).

SEC. 306. OFFICE OF WOMEN'S BUSINESS OWNERSHIP.

  Section 29 of the Small Business Act (15 U.S.C. 656) is amended by 
adding at the end the following:
  ``(j) Assistant Administrator for the Office of Women's Business 
Ownership.--
          ``(1) Establishment.--There is established the position of 
        Assistant Administrator for the Office of Women's Business 
        Ownership (hereafter in this section referred to as the 
        `Assistant Administrator') who shall serve without regard to 
        the provisions of title 5, United States Code, governing 
        appointments in the competitive service.
          ``(2) Responsibilities and duties.--
                  ``(A) Responsibilities.--The responsibilities of the 
                Assistant Administrator shall be to administer the 
                programs and services of the Office of Women's Business 
                Ownership established to assist women entrepreneurs in 
                the areas of--
                          ``(i) starting and operating a small 
                        business;
                          ``(ii) development of management and 
                        technical skills;
                          ``(iii) seeking Federal procurement 
                        opportunities; and
                          ``(iv) increasing the opportunity for access 
                        to capital.
                  ``(B) Duties.--Duties of the position of the 
                Assistant Administrator shall include--
                          ``(i) administering and managing the Women's 
                        Business Centers program;
                          ``(ii) recommending the annual administrative 
                        and program budgets for the Office of Women's 
                        Business Ownership (including the budget for 
                        the Women's Business Centers);
                          ``(iii) establishing appropriate funding 
                        levels therefore;
                          ``(iv) reviewing the annual budgets submitted 
                        by each applicant for the Women's Business 
                        Center program;
                          ``(v) selecting applicants to participate in 
                        this program;
                          ``(vi) implementing this section;
                          ``(vii) maintaining a clearinghouse to 
                        provide for the dissemination and exchange of 
                        information between Women's Business Centers;
                          ``(viii) serving as the vice chairperson of 
                        the Interagency Committee on Women's Business 
                        Enterprise;
                          ``(ix) serving as liaison for the National 
                        Women's Business Council; and
                          ``(x) advising the Administrator on 
                        appointments to the Women's Business Council.
          ``(3) Consultation requirements.--In carrying out the 
        responsibilities and duties described in this subsection, the 
        Assistant Administrator shall confer with and seek the advice 
        of the Administration officials in areas served by the Women's 
        Business Centers.
  ``(k) Program Examination.--
          ``(1) In general.--Not later than 180 days after the date of 
        enactment of this subsection, the Administration shall develop 
        and implement an annual programmatic and financial examination 
        of each Women's Business Center established pursuant to this 
        section.
          ``(2) Extension of contracts.--In extending or renewing a 
        contract with a Women's Business Center, the Administration 
        shall consider the results of the examination conducted 
        pursuant to paragraph (1).
  ``(l) Contract Authority.--The authority of the Administration to 
enter into contracts shall be in effect for each fiscal year only to 
the extent and in the amounts as are provided in advance in 
appropriations Acts. After the Administration has entered a contract, 
either as a grant or a cooperative agreement, with any applicant under 
this section, it shall not suspend, terminate, or fail to renew or 
extend any such contract unless the Administration provides the 
applicant with written notificationsetting forth the reasons therefore 
and affording the applicant an opportunity for a hearing, appeal, or 
other administrative proceeding under chapter 5 of title 5, United 
States Code.''.

                   TITLE IV--COMPETITIVENESS PROGRAM

SEC. 401. PROGRAM TERM.

  Section 711(c) of the Small Business Competitiveness Demonstration 
Program Act of 1988 (15 U.S.C. 644 note) is amended by striking ``, and 
terminate on September 30, 1997''.

SEC. 402. MONITORING AGENCY PERFORMANCE.

  Section 712(d)(1) of the Small Business Competitiveness Demonstration 
Program Act of 1988 (15 U.S.C. 644 note) is amended to read as follows:
          ``(1) Participating agencies shall monitor the attainment of 
        their small business participation goals on an annual basis. An 
        annual review by each participating agency shall be completed 
        not later than January 31 of each year, based on the data for 
        the preceding fiscal year, from October 1 through September 
        30.''.

SEC. 403. SMALL BUSINESS PARTICIPATION IN DREDGING.

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

SEC. 404. TECHNICAL AMENDMENT.

  Section 717 of the Small Business Competitiveness Demonstration 
Program Act of 1988 (15 U.S.C. 644 note) is amended--
          (1) by striking ``standard industrial classification code'' 
        each time it appears and inserting in lieu thereof ``North 
        American Industrial Classification Code''; and
          (2) by striking ``standard industrial classification codes'' 
        each time it appears and inserting in lieu thereof ``North 
        American Industrial Classification Codes''.

                   TITLE V--MISCELLANEOUS PROVISIONS

SEC. 501. SMALL BUSINESS DEVELOPMENT CENTERS.

  (a) In General.--Section 21(a) of the Small Business Act (15 U.S.C. 
648(a)) is amended--
          (1) in paragraph (1), by inserting ``any women's business 
        center operating pursuant to section 29,'' after ``credit or 
        finance corporation,'';
          (2) in paragraph (3)--
                  (A) by striking ``, but with'' and all that follows 
                through ``parties.'' and inserting the following: ``for 
                the delivery of programs and services to the Small 
                Business community. Such programs and services shall be 
                jointly developed, negotiated, and agreed upon, with 
                full participation of both parties, pursuant to an 
                executed cooperative agreement between the Small 
                Business Development Center applicant and the 
                Administration.''; and
                  (B) by adding at the end the following:
          ``(C) On an annual basis, the Small Business Development 
        Center shall review and coordinate public and private 
        partnerships and cosponsorships with the Administration for the 
        purpose of more efficiently leveraging available resources on a 
        National and a State basis.'';
          (3) in paragraph (4)(C)--
                  (A) by striking clause (i) and inserting the 
                following:
                  ``(i) In general.--
                          ``(I) Maximum amount.--Except as provided in 
                        clause (ii), and subject to subclause (II) of 
                        this clause, the amount of a grant received by 
                        a State under this section shall not exceed the 
                        greater of--
                                  ``(aa) $500,000; and
                                  ``(bb) the State's pro rata share of 
                                a national program, based upon the 
                                population of the State as compared to 
                                the total population of the United 
                                States.
                          ``(II) Exception.--Subject to the 
                        availability of amounts made available in 
                        advance in an appropriations Act to carry out 
                        this section for any fiscal year in excess of 
                        amounts so provided for fiscal year 1997, the 
                        amount of a grant received by a State under 
                        this section shall not exceed the greater of 
                        $500,000, and the sum of--
                                  ``(aa) the State's pro rata share of 
                                a national program, based upon the 
                                population of the State as compared to 
                                the total population of the United 
                                States; and
                                  ``(bb) and $300,000 in fiscal year 
                                1998, $400,000 in fiscal year 1999, and 
                                $500,000 in each fiscal year 
                                thereafter.''; and
                  (B) in clause (iii), by striking ``(iii)'' and all 
                that follows through ``1997.'' and inserting the 
                following:
                  ``(iii) National program.--The national program under 
                this section shall be--
                          ``(I) $85,000,000 for fiscal year 1998;
                          ``(II) $90,000,000 for fiscal year 1999; and
                          ``(III) $95,000,000 for fiscal year 2000 and 
                        each fiscal year thereafter.''; and
          (4) in paragraph (6)--
                  (A) in subparagraph (A), by striking ``and'' at the 
                end;
                  (B) in subparagraph (B), by striking the comma at the 
                end and inserting ``; and''; and
                  (C) inserting after subparagraph (B) the following:
                  ``(C) with outreach, development, and enhancement of 
                minority-owned small business startups or expansions, 
                veteran-owned small business startups or expansions, 
                and women-owned small business startups or expansions, 
                in communities impacted by base closings or military or 
                corporate downsizing, or in rural or underserved 
                communities;''.
  (b) SBDC Services.--Section 21(c) of the Small Business Act (15 
U.S.C. 648(c)) is amended--
          (1) in paragraph (3)--
                  (A) in subparagraph (A), by striking ``businesses;'' 
                and inserting ``businesses, including--
                  ``(i) working with individuals to increase awareness 
                of basic credit practices and credit requirements;
                  ``(ii) working with the Administration to develop and 
                provide informational tools for use in working with 
                individuals on pre-business startup planning, existing 
                business expansion, business plans, financial packages, 
                credit applications, contract proposals, and export 
                planning; and
                  ``(iii) working with individuals referred by the 
                local offices of the Administration and Administration 
                participating lenders;'';
                  (B) in each of subparagraphs (B), (C), (D), (E), (F), 
                (G), (M), (N), (O), (Q), and (R) by moving each margin 
                two ems to the left;
                  (C) in subparagraph (C), by inserting ``and the 
                Administration'' after ``Center'';
                  (D) in subparagraph (Q), by striking ``and'' at the 
                end;
                  (E) in subparagraph (R), by striking the period at 
                the end and inserting ``; and''; and
          (2) in paragraph (5)--
                  (A) by moving the margin 2 ems to the left;
                  (B) by striking ``paragraph (a)(1)'' and inserting 
                ``subsection (a)(1)'';
                  (C) by striking ``which ever'' and inserting 
                ``whichever''; and
                  (D) by striking ``last,,'' and inserting ``last,'';
          (3) by redesignating paragraphs (4) through (7) as paragraphs 
        (5) through (8), respectively; and
          (4) in paragraph (3), in the undesignated material following 
        subparagraph (S) (as added by this subsection), by striking ``A 
        small'' and inserting the following:
  ``(4) A small''.
  (c) Competitive Awards.--Section 21(l) of the Small Business Act (15 
U.S.C. 648(l)) is amended by adding at the end the following: ``If any 
contract under this section is not renewed or extended, award of the 
succeeding contract shall be made on a competitive basis.''.
  (d) Prohibition on Certain Fees.--Section 21 of the Small Business 
Act (15 U.S.C. 648) is amended by adding at the end the following:
  ``(m) Prohibition on Certain Fees.--A small business development 
center shall not impose or otherwise collect a fee or other 
compensation in connection with the provision of counseling services 
under this section.''.

SEC. 502. SMALL BUSINESS EXPORT PROMOTION.

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

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

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

SEC. 504. VERY SMALL BUSINESS CONCERNS.

  Section 304(i) of Public Law 103-403 (15 U.S.C. 644 note) is amended 
by striking ``1998'' and inserting ``2000''.

SEC. 505. EXTENSION OF COSPONSORSHIP AUTHORITY.

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

SEC. 506. TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS CONCERNS HARMED 
                    BY NAFTA.

  The Small Business Administration shall coordinate assistance 
programs currently administered by the Administration to counsel small 
business concerns harmed by the North American Free Trade Agreement to 
aid such concerns in reorienting their business purpose.

                                Purpose

    The primary purpose of H.R. 2261 is to reauthorize the 
Small Business Administration (SBA) and the programs of the 
Small Business Act and the Small Business Investment Act 
through fiscal year 2000. The Committee regularly authorizes 
these programs for a three year period with the last 
reauthorization occurring in 1994 during the 103d Congress. The 
programs include the financial programs of the Small Business 
Administration: the 7(a) general business loan guarantee [7(a)] 
program, the Section 504 Certified Development Company [504] 
program, the Microloan program and the Small Business 
Investment Company [SBIC] program.
    In addition, the bill will reauthorize the technical 
assistance and procurement programs of the SBA--the Service 
Corps of Retired Executives [SCORE], the Women's Business 
Center program, the Small Business Development Center [SBDC] 
program, the Competitiveness Program, and others.
    The bill also changes and improves the various programs, 
specifically modifying the Section 504 Preferred Certified 
Lender Program [PCLP], the Small Business Investment Company 
program, the Women's Business Center program, and the Small 
Business Development Center program.

                          Need for Legislation

    The programs of the Small Business Administration annually 
provide over thirteen billion dollars of financial assistance 
to over 100,000 small businesses all across the United States. 
These programs remedy shortfalls in access to credit and 
capital for small business that are an unfortunate part of the 
national economy. By providing financial assistance for amounts 
as small as $500 to as much as $1,250,000 the SBA and its 
private sector partners--bank and non-bank lenders, surety bond 
insurers, certified development companies, microlenders, and 
small business investment companies--provide a vital impetus to 
the small business sector of the economy. These billions of 
dollars in assistance are provided at a total cost of $850 
million for programs and salaries and expenses. The SBA also 
provides millions of dollars in vital disaster assistance to 
small businesses and homeowners every year.
    H.R. 2261 reflects the Committee's dedication to and 
support for these programs and the belief that they are not 
only necessary but also constantly in need of refinement and 
improvement as the economy shifts and changes. The bill 
includes not only the basic reauthorization language necessary 
to continue regular operations but also changes to the 
underlying program structures.
    The bill includes significant improvements in the Preferred 
Certified Lender Program of the Section 504 Certified 
Development Company Program. These changes serve to help 
implement the Administration's budget goals of increased 
reliance on its private sector lending partners. The Committee 
seeks to both enable the Certified Development companies to 
take additional responsibility for servicing, liquidation and 
litigation of defaulted loans, and to improve the recovery for 
this program.
    Committee hearings (discussed below) revealed that 
recoveries were, in fact, the largest single factor in the 
increased subsidy cost of the 504 program. The Committee 
continues to be concerned over the subsidy estimates for the 
7(a) and 504 programs and makes these changes in the 504 
program in order to encourage private sector participation in 
the liquidation process.
    H.R. 2261 also continues the Committee's work on improving 
the Small Business Investment Company program. Last year this 
program underwent significant changes, and this year the 
Committee seeks to build on those improvements by providing 
SBICs with increased flexibility and some responsiveness in 
order to better allow the SBICs to interact in the marketplace 
and thereby reduce risks of loss.
    The bill also reauthorizes and improves the Microloan 
program. Begun in 1991 this program has served the smallest and 
often least noticed section of the small business community. 
The Committee has recognized the efficacy of this program and 
changed it from demonstration to permanent program status.
    In addition to financial assistance the SBA also provides 
technical and managerial advice and assistance to tens of 
thousands of small businesses every year through the Small 
Business Development Centers, the Women's Business Centers, and 
the Service Corps of Retired Executives. The Committee 
reauthorizes these programs in H.R. 2261 and makes some 
valuable improvements to both the Women's Business Center and 
Small Business Development Center programs.
    Responding to concerns raised by Members of Congress the 
Committee has acted to modify the funding levels for the SBDC 
program. This action corrects a flaw that had put smaller 
states at a distinct disadvantage, preventing them from 
receiving a reasonable level of funding support. The Committee 
has also approved language restricting the charging of fees by 
SBDCs.
    The Committee recognizes and supports the valuable 
assistance the SBDC program provides to small businesses 
throughout the country. In order to assure the future success 
of the program, the committee requests that the Administrator 
provide the Committee with a report on the strengths and 
weaknesses of the program and the delivery of service to the 
small business community. Also, the Committee requests the 
Administrator's recommendations on how to make the program as 
efficient and effective as possible.
    While not addressed in H.R. 2261, the Committee expresses 
its misgivings about SBA's recent reallocation of program 
positions from the SBDC program to other programs and its 
failure to hire examiners to oversee SBDCs, as mandated by law, 
thereby straining the SBA's ability to effectively administer 
this program (including selection of organizations for SBDC 
status). For example, P.L. 104-208 requires the SBA to develop 
and implement a ``biennial programmatic and financial 
examination of each small business center * * *'', and P.L. 
102-140 appropriated funds for six examiners in FY 1992, yet 
none were hired, and there are only two examiners today.
    It is ironic and regrettable that this program, the SBA's 
largest non-credit program which counseled 237,000 small 
businesses in FY 1996, has lost a large percentage of its few 
staff positions within SBA. Without adequate staff, there is 
little assurance that the program is well managed and that 
federal dollars are being spent appropriately.
    The Women's Business Center program has also been changed 
to build on its already considerable success. The Committee has 
moved to improve the funding mechanism for the program and 
provide more specific support and oversight from the SBA.

                            Committee Action

                  Hearing on SBA's 1998 budget request

    On March 6, 1997 the Committee convened a hearing to 
discuss the Small Business Administration's proposed budget for 
1998. Administrator Alvarez for the SBA and supported the 
program requests and requested additional funds for the 
modernization of SBA financial systems. In addition, the 
Administrator pressed for the imposition of fees on small 
businesses seeking counseling from SBDCs. The Administration 
proposal for SBDC fees and the request for an increase in 
interest rates for disaster victims were met with some 
skepticism by the Committee. Several Members questioned the 
Administration's simultaneous request for an increase in staff 
and cuts in the Disaster Loan and SBDC programs. The Chairman 
expressed particular concern that the SBA and the Office of 
Management and Budget (OMB) were reducing the 1998 subsidy cost 
of the 7(a) program based on a computer system that would not 
be purchased until late 1998 at the earliest.
    The Committee then heard from a panel of witnesses 
representing the SBDCs, SBICs, the 504 program and the 7(a) 
program. Mr. James King, testifying on behalf of the SBDCs, 
expressed grave concerns over the Administration proposal to 
force SBDCs to charge fees. Mr. King testified that the reduced 
federal share would result in a reduced match from the 
respective states. Even though the SBA proposed increasing the 
match, Mr. King testified that the states would still be unable 
to find sufficient additional support make up the difference.
    Mr. Keith Fox testified on behalf of the National 
Association of Small Business Investment Companies. Mr. Fox's 
testimony centered on a request for the Committee's support for 
full funding of the Administration's requested program. It is 
an axiom in the venture capital industry that reliability is an 
essential part of making the deal. Mr. Fox believed that, 
absent a signal of steady support, the SBIC program would 
suffer from a lack of investor confidence.
    Mr. Mark Barbash testified next on behalf of the National 
Association of Development Companies. Mr. Barbash's testimony 
disagreed with the Administration's request for 504 funding and 
asked for a moderately higher authorization. His main focus was 
the improvement of the PCLP program. Mr. Barbash commented on 
the continuing problem of the subsidy rate calculations and 
expressed his belief that the program needed the flexibility 
and freedom represented by PCLP. Mr. Barbash testified that 
many certified development companies have the skills and 
capability to handle their own portfolios and deserve the 
ability to do so much as the Preferred Lenders do in the 7(a) 
program.
    The final witness was Mr. Richard Wise, representing the 
National Association of Government Guaranteed Lenders. Mr. Wise 
testified that the SBA's request for the 7(a) program was too 
low and NAGGL recommended a $10 billion program level for 1998. 
He also stated that the SBA proposal regarding liquidation of 
business chattels was unrealistic.
    This procedure would have a serious adverse effect on 
lenders because regulatory bodies would require the lenders to 
provide reserves for non-performing loans during the 
liquidation period. This would drive smaller, local lenders 
away from 7(a). In addition, the policy change would negatively 
affect the accounting for lenders selling the guaranteed 
portions of loans on the secondary market.
    During questioning the Committee learned that the SBA had 
not yet resolved regulatory problems with other agencies 
regarding the liquidation proposal. It was also found that the 
SBA and OMB had not given any credit towards the 504 subsidy 
rate based on the anticipated purchase of the computer 
monitoring system. The Administration's budget did reduce the 
subsidy rate for the 7(a) program provided the upgrades 
occurred, but not the 504 program subsidy rate. The Committee 
questioned why, if the system would be used for both programs, 
it would not affect both programs.
    The hearing revealed that there were still many unresolved 
issues surrounding the SBA's proposed budget. The Committee was 
particularly concerned that there appeared to be little effort 
by the SBA to resolve inconsistencies in the credit subsidy 
issue and the Committee noted that the Administration's 
estimates of demand for financial assistance seemed far removed 
from those of its private sector partners.
    The Committee also became increasingly worried over the 
possibility of a shortfall on the 7(a) program. As a result, 
Chairman Talent requested the General Accounting Office to 
examine the credit subsidy model used by the SBA and its data. 
This request was made in preparation for a hearing to be held 
in July. Shortly after this request, on April 15, the SBA 
informed the Committee that it would in fact be unable to fund 
the 7(a) program for the entire year absent administrative 
action. This action took the form of a cap limiting loan size 
to $500,000.
    Approximately six weeks later the General Accounting Office 
informed the Chairman that it had uncovered an error in the 
calculation of the subsidy rate for 7(a) program resulting in 
an underestimation of resources by some 2.5 billion dollars. As 
a result the cap on the program was lifted and the program was 
restored to normal operations.

             Hearing on the credit subsidy rate calculation

    On July 16, 1997 the Committee convened a hearing to 
discuss the calculation of the subsidy rate and to obtain an 
understanding of the methodology employed by the Office of 
Management and Budget (OMB) and the SBA. Testifying at the 
hearing were Ms. Judy England-Joseph of the General Accounting 
Office; the Honorable Aida Alvarez, Administrator of the SBA; 
Mr. Edward DeSeve, Acting Deputy Director of the OMB; and Mr. 
John Winchester of Merrill Lynch Securities.
    Testimony focused on the basic assumptions used to in the 
credit subsidy model. The Committee heard testimony from the 
GAO and OMB describing the subsidy model as a sophisticated 
calculator. As such the model itself is an adequate device. 
This testimony was supported by Mr. Winchester's testimony. 
However, it was abundantly clear that while the subsidy model 
itself was adequate its accuracy as a predictive tool was 
entirely dependent upon the accuracy and validity of the data 
that is fed into the model. To describe the situation 
succinctly: ``garbage in equals garbage out''.
    This reached the heart of the issue in this hearing. The 
Committee learned that SBA and OMB faced a number of serious 
problems surrounding the security and accuracy of the data 
entered into the model. The 2.5 billion dollar error occurred 
entirely because the accuracy of the model was undermined by 
staff errors. The Chairman pointed out that the SBA's own 
consultants (Walker & Co.) had cited serious internal control 
problems including ``undocumented and unsupported critical 
assumptions''. Rep. Boyd expressed his concern over the SBA's 
use of sampling as opposed to hard data.
    In addition, the hearing focused on a lack of familiarity 
with the various programs on the parts of both the SBA and OMB 
financial analysts. (Note: The staff at the OMB responsible for 
SBA programs has turned over several times in the past three 
years. Also the SBA's financial offices have suffered from 
numerous departures and internally initiated cutbacks.)
    In sum, the Committee found that SBA continued to have 
insufficient control over its data and remained uncertain as to 
the accuracy of its inputs. As for the OMB, the Committee 
believes that turnover has resulted in an OMB staff too willing 
to maintain certain existing assumptions without considering 
the changing practices at SBA and its lending partners, while 
at the same time too ready to make severe changes to other 
assumptions, particularly prepayment rates. The Committee will 
continue to work with SBA and the OMB on this issue, but 
believes strongly that the first best step is to move along the 
path outlined in the administration's budget and place more 
responsibility in the hands of SBA's private sector partners.

                        SBA's financial programs

    On the following day July 17, 1997 the Committee convened a 
hearing to consider testimony regarding the SBA's 504, 7(a) and 
SBIC finance programs. Witnesses were: Ms. Paula Klepper of 
Mid-Atlantic Business Finance representing the National 
Association of Development Companies (504 lenders); Mr. Walter 
Dick representing the National Association of Small Business 
Investment Companies; Mr. Anthony Wilkinson representing the 
National Association of Government Guaranteed Lenders (7(a) 
lenders); and Administrator Aida Alvarez of the SBA.
    Ms. Klepper testified concerning the need for a 
reauthorization of the 504 program, improvements in the 
Preferred Certified Lender Program and the pilot loan 
liquidation project. She stated that there was a real need for 
the experienced certified development companies to be able to 
use their own resources to improve program performance.
    Mr. Dick expressed the SBIC industry's support for 
reauthorization and stressed that while the cost of the SBIC 
program has steadily declined over the past several years its 
assistance continues to grow. Mr. Dick also stressed the need 
for certain programmatic changes, particularly the ability of 
SBIC to spread out their funding commitments over a five year 
period in order to more accurately mesh with the average 
venture firm's investment plan.
    Mr. Wilkinson testified primarily regarding the 7(a) 
lending industry's concerns over the subsidy rate calculations. 
He was accompanied by Mr. Mike Hearne, a former member of the 
SBA's Chief Financial Officer's staff, now a consultant. Mr. 
Wilkinson's testimony raised a number of issues based on the 
previous day's hearing. Mr. Wilkinson and Mr. Hearne questioned 
a number of obvious inconsistencies in the Office of Management 
and Budget's treatment of program performance at the SBA. 
Specifically they questioned:
          Why does OMB refuse to follow the Congressional 
        Budget Office suggestion of weighting the performance 
        of recent higher volume years more than earlier years?
          Why does the prospective upgrade of SBA systems 
        receive credit in the subsidy model while actual 
        performance improvements do not?
          Why does SBA assume 50 million dollars in income from 
        defaulted loan assets to be sold from SBA's portfolio 
        to the private sector yet credits no improvement to 
        assets that will be turned over to private sector 
        partners immediately?
          Why does SBA and OMB insist on a 13 year historical 
        average when at the same time the prepayments they 
        forecast show that the average life of a loan is nearer 
        to ten years?
          Why has the 7(a) program received no credit for a 
        default rate that has dropped to below ten percent in 
        the past five years?
          Why if the OMB did not adjust the subsidy rate when 
        the loan cap was imposed (since it would reduce fee 
        income) because they believed they had received as much 
        fee income as predicted in the model would they not 
        adjust the subsidy rate when the loan cap was lifted 
        (when excess fee income would be coming in)?
    Mr. Wilkinson and Mr. Hearne also both urged that the 
lending community and the SBA and OMB work together to arrive 
at stable and understandable subsidy rate calculations, and 
complimented Administrator Alvarez for her offer of such a 
working group at the previous hearing. Mr. Hearne also stated 
that working on the subsidy rate was doubly necessary for the 
504 program. It was his belief that the default rate projected 
for the 504 program (16%) was grossly exaggerated, as there had 
not been a year with that high a level of defaults since the 
program's inception.
    Finally, Administrator Alvarez testified in support of the 
reauthorization bill and spoke at length about her concerns 
over the allocation of the SBA's lending resources. She also 
addressed efforts to implement background check procedures, 
though expressed concern over the processing delays inherent in 
any such efforts.
    This hearing solidified the Committee's resolve to move 
forward with legislation reauthorizing the SBA and its 
programs. It also provided the Committee with the information 
it felt necessary to support the changes to the various 
programs, particularly the 504 program. The Committee believes 
it is vital to access the resources of the certified 
development companies in order to preserve the integrity of 
this program. The Committee is also fully confident that the 
certified development companies will be able to improve 
recovery efforts and provide long term improvements to the 
subsidy rate.
    Unfortunately, due to the constraints of the Credit Reform 
Act and jurisdictional issues the Committee cannot act to 
remedy what it feels are obvious shortfalls in SBA and OMB's 
handling of the subsidy model. However, the Committee trusts 
that SBA will live up to its commitments to work with its 
lending partners to achieve a stable subsidy rate. The 
Committee believes that, absent such a working relationship, 
there is little need for all the technological improvements 
requested.

                       Consideration of H.R. 2261

    On July 30, 1997 the Committee met to mark up and report 
out H.R. 2261. The first action in committee was an en bloc 
amendment offered by Chairman Talent and Mr. LaFalce. The 
amendment made a number of technical and substantive changes 
that were agreed to on a bipartisan basis. The amendment was 
adopted by a voice vote.
    The Committee then briefly discussed the lack of language 
reauthorizing the Small Business Technology Transfer Program 
(STTR). Mr. Poshard expressed regret that the language was not 
included due to a sudden and unexpected jurisdictional conflict 
with the Committee on Science. Mr. Bartlett, as well, expressed 
his concern over the missing language. Chairman Talent then 
expressed his hope that the Committee on Science would be able 
to have a hearing and work out legislation with the Committee 
on Small Business in early September.
    The Committee then considered an amendment by Mr. Davis 
regarding the 7(a) and 504 programs. Mr. Davis' amendment 
proposed allocating a 20 percent of all loans to neighborhoods 
with median incomes below $33,152. Chairman Talent expressed 
his opposition to the amendment as drafted, stating that while 
he shared Mr. Davis' concern over access to capital in low 
income areas, he could not support an amendment that mandated a 
percentage or quota to certain areas. Mr. LaFalce, while 
supporting the objective of increasing lending to small 
businesses in lower-income areas, expressed concern over the 
feasibility of the amendment. Mr. Souder then spoke and 
suggested that the language regarding any allocation set a 
floor rather than a fixed percentage.
    Mr. Pascrell then addressed his belief that the issue of 
lending in depressed areas was one of serious concern and 
mentioned his personal concern over recent declines in lending 
urban areas, particularly in New Jersey. Mr. Hinojosa then 
suggested a change to the amendment substituting ``empowerment 
zones'' for the median income language.
    Mr. Jackson then spoke in favor of the amendment though he 
expressed concerns over Mr. Hinojosa's suggested language. Ms. 
Millender-McDonald echoed Mr. Jackson's sentiments. Ms. 
Velazquez then questioned whether the amendment, as originally 
drafted, was being discussed or the substitute suggested by Mr. 
Souder. The Chairman explained that Mr. Souder's suggestion had 
not been adopted and asked Mr. Davis if he wished to adopt the 
change. Mr. Davis requested unanimous consent and the change 
was accepted. Mr. Davis then thanked the Committee for its 
discussions and suggestions and expressed his own interest in 
addressing these issues in more depth before proceeding 
further. Mr. Davis then asked for consent to withdraw his 
amendment. Chairman Talent approved Mr. Davis' request and 
expressed his desire to hold a hearing addressing Mr. Davis' 
concerns, which was seconded by Mr. LaFalce.
    The Committee then discussed Section 202 of H.R. 2261 
requiring SBA to perform background checks on loan applicants. 
Mr. Jackson expressed his concern that the procedure may have 
potential for misuse at an administrative level. In addition, 
he questioned the need for such a check, as this is rarely the 
practice in other areas of finance. Mr. LaFalce then expressed 
his concern that the language was too specific as to the method 
for such checks (the original language referred solely to the 
FBI's National Crime Information Computer). Mr. LaFalce 
suggested language requiring the Administration to use the best 
means available and the amendment was accepted by voice vote.
    The Committee then considered two amendments from Mr. 
Jackson. The first amendment proposed striking the Small 
Business Competitiveness Demonstration Program. Mr. Jackson 
stated that the SBA had recommended eliminating the program. 
Mr. Jackson then withdrew that amendment and proposed an 
amendment that would only extend the program for one year. 
Chairman Talent expressed his opposition to Mr. Jackson's 
amendments citing both the elimination of the small purchase 
protection that would accompany one and the strong support of 
the relevant small business groups which expressed their strong 
desire that the program become permanent. Mr. Weygand also 
expressed his opposition to Mr. Jackson's amendment and 
supported the Chairman's position. Mr. LaFalce then stated 
that, while he had no strong feelings on the issue, he felt the 
existing language provided the Committee with a better position 
for conference. Mr. Jackson then withdrew his amendment.
    Ms. Velazquez offered an amendment directing the SBA to 
coordinate its programs to offer assistance to small businesses 
adversely affected by the North American Free Trade Agreement. 
The amendment was accepted by unanimous voice vote.
    Mr. LaFalce offered an amendment extending the SBA's 
authority to cosponsor certain events and programs with private 
entities through fiscal year 2000. The amendment was adopted by 
a unanimous voice vote.
    Mr. Sununu offered an amendment incorporating the language 
of H.R. 96. This language would have extended the counseling 
capacities of the Small Business Development Centers (SBDC), to 
enable them to provide greater assistance to small businesses 
in coping and complying with federal regulations. The amendment 
also contained a funding mechanism, directing that a small 
percentage of each regulatory agency's budget be allocated to 
support the SBDCs' efforts.
    Mr. LaFalce expressed strong objection to the amendment for 
a number of reasons. Mr. LaFalce believed the bill would 
attract referrals to several other committees having 
jurisdiction over the regulatory agencies and their budgets. He 
also stated the Administration would strongly oppose the 
amendment. Mr. Bartlett, Ms. Kelly, Ms. McCarthy and Mr. Flake 
expressed support for the intent of the amendment but also 
expressed concern over sequential referrals. Mr. Sununu then 
withdrew his amendment.
    The bill H.R. 2261, as amended, was then offered for final 
passage. A sufficient quorum being present the bill was passed 
by voice vote and ordered reported.

            Section by Section Analysis and Committee Views

    Section 1. This section provides the title of H.R. 2261, 
and a table of contents.

                                TITLE I

Sec. 101. Authorizations

    This section provides authorization levels for the Small 
Business Administration and its programs through fiscal year 
2000 as detailed on the chart below. The Committee has not 
followed SBA recommendations. In several instances, most 
notably the 7(a) program, the SBA seriously underestimates 
demand for assistance. After consultation with the Committee on 
Appropriations and SBA's private sector partners, the Committee 
sets authorization levels it believes strike a balance among 
anticipated demand, fiscal restraint, and reasonable program 
growth.

                                                       PROGRAM LEVELS FOR SBA REAUTHORIZATION BILL                                                      
                                                     [b=billions of dollars, m=millions of dollars]                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  SBA 3 Year authorization          Industry request            Reauthorization bill    
                                              FY 97     FY 98              request           -----------------------------------------------------------
                  Program                    Current   Budget  ------------------------------                                                           
                                              level    request    1998      1999      2000      1998      1999      2000      1998      1999      2000  
--------------------------------------------------------------------------------------------------------------------------------------------------------
7(a)......................................   $10.3b     $8.5b      $10b      $11b      $13b      $10b      $12b    $13.5b      $11b      $12b    $13.5b 
504.......................................    2.65b      2.3b        3b      3.5b      4.5b      2.3b      3.3b      3.8b        3b      3.5b      4.5b 
SBIC:                                                                                                                                                   
    Debentures............................     300m      375m      450m      550m      650m      500m      600m      700m      500m      650m      700m 
    Participating Securities..............     410m      456m      600m      700m      850m      900m      900m      900m      600m      700m      850m 
Microloan:                                                                                                                                              
    Technical Assistance..................      13m     16.5m       42m     65.8m     86.7m       N/A       N/A       N/A       40m       60m       75m 
    Direct Loans..........................      24m       19m       60m       60m       60m       N/A       N/A       N/A       60m       60m       60m 
    Guaranteed Loans......................      19m       25m       40m       40m       40m       N/A       N/A       N/A       40m       40m       40m 
Delta.....................................      48m       88m        1m        1m        1m       N/A       N/A       N/A        1b        1b        1b 
Surety Bond Guarantee:                                                                                                                                  
    General Program.......................     1.8b      1.7b     1.35b     1.35b     1.35b       N/A       N/A       N/A      2.0b      2.0b      2.0b 
    Preferred Program.....................  ........  ........     650m      650m      650m       N/A       N/A       N/A      650m      650m      650m 
SCORE.....................................     3.3m      3.5m      3.9m      4.2m      4.5m       N/A       N/A       N/A        4m      4.5m        5m 
SBDC Base Closure Assistance..............       2m   ........      15m       15m       15m       N/A       N/A       N/A       15m       15m       15m 
Women's Business Centers..................       4m        4m        4m        4m        4m       N/A       N/A       N/A        8m        8m        8m 
--------------------------------------------------------------------------------------------------------------------------------------------------------

                      TITLE II--FINANCIAL PROGRAMS

         Subtitle A--General Business Loans (The 7(a) Program)

Sec. 201. Securitization

    This provision requires the Administrator of the SBA to 
promulgate regulations concerning the sale or securitization of 
the non-guaranteed portion of 7(a) loans. The process is 
currently being conducted under an interim final rule. In the 
104th Congress the Committee passed legislation directing SBA 
to draft a final regulation regarding this practice. This 
section requires the SBA to issue that final regulation no 
later than 90 days after the date of enactment of the bill.
    It is the intent of this section to have the SBA move 
forward in establishing parity between the bank and non-bank 
lenders. There is some concern that the proposed final rule 
takes a step backwards. While the section does not prescribe 
the contents of the final regulation the Committee believes the 
regulation should allow for alternative forms of risk retention 
that would permit current securitization practice to remain 
available. These practices have been accepted by the market and 
the SBA under prior regulations and it is the Committee's 
desire that these methods, along with others, remain available 
to any lender as long as they comport with prudent management 
policy.

Sec. 202. Background checks

    In August of 1996 the Inspector General of the SBA 
delivered a report to SBA management discussing the possibility 
that persons with criminal backgrounds were falsely certifying 
their backgrounds on SBA loan applications. The report found 
that approximately 12% of the defaulted loans studied were made 
to persons who lied about their criminal backgrounds. The 
Committee has learned that the SBA's response to the Inspector 
General's report has been negligible.
    Prior to 1987, background checks had been a regular 
procedure for SBA loans. However, in 1987 the Federal Bureau of 
Investigation required that fingerprints be supplied with all 
background checks. SBA management at the time found that 
requiring fingerprinting would be overly intrusive and 
therefore canceled the background check requirement.
    Consequently, this section requires the SBA to conduct 
background ``name'' checks on all prospective 7(a) and 504 
borrowers using the best available means possible, including 
the Federal Bureau of Investigation's National Crime 
Information Center (NCIC) computer system if it is available. 
While the Committee does not believe that the presence of a 
criminal record is an absolute bar to participation in the 
program, it does has grave concerns that persons convicted of 
fraud, embezzlement and similar crimes may have access to SBA 
loans. The Committee notes that the NCIC refuses to do 
``administrative'' checks citing, the restrictions in their 
charter. The Committee hopes that some similar or more 
effective means may be found to overcome this obstacle.

Section 203. Report on increased lender approval, servicing, 
        foreclosure, liquidation and litigation of 7(a) loans

    This section requires the SBA to report to the Committee 
regarding its efforts to turn over as much of the day to day 
financial functions of the loan programs to its private sector 
lending partners. This has become a major part of the 
Administration's budget submission since the passage of 
legislation requiring such actions in the 104th Congress. The 
Committee intends to hold the SBA to its promise of becoming a 
streamlined 21st century financial institution, and requires 
this report to monitor the SBA's progress towards that goal.

Section 204. Completion of planning for loan monitoring system

    The SBA requested 18 million dollars in its 1998 budget 
submission for installation of a computerized financial 
tracking and loan monitoring system. While the Committee is 
pleased that the Administration wishes to upgrade its currently 
inadequate and inaccurate system, there is nevertheless grave 
concern over the SBA's ability to spend this money wisely. This 
concern is only heightened by the fact that the Office of 
Management and Budget has estimated a substantial reduction in 
the FY 1998 subsidy rate based on this purchase. Putting aside 
the question of how the purchase of system which could not 
reasonably be implemented prior to the middle of the fiscal 
year could operate to lower the FY 1998 subsidy rate, the SBA 
has an unfortunate history with the purchase of computer 
equipment and recent General Accounting Office findings have 
done nothing to dispel the concerns.
    As a result, this section requires the SBA to submit a 
detailed report to the Committee and the General Accounting 
Office prior to the purchase of any new system. In this way, 
the Committee hopes, with the General Accounting Office's 
assistance, to provide SBA with some guidance and advice on 
this purchase.

           Subtitle B--Certified Development Company Program

    The Section 504 Certified Development company program is 
targeted primarily at business expansion and capital equipment 
enhancement. It is unique among loan programs due to its 
specific job creation requirement. Unfortunately, the 504 
program has been subjected to an amazing 1200% percent increase 
in its credit subsidy rate. This forced the Committee to 
approve legislation, passed in the 104th Congress, imposing 
significant fees on the borrowers and lenders participating in 
the program.
    The Committee continues to have grave concerns over SBA 
management of this program. The jump in subsidy cost is almost 
entirely due to the inability of the SBA to adequately pursue 
liquidations and by an incredibly poor record keeping system. 
The Committee remains perplexed by the SBA's inability to 
manage a portfolio of defaulted loans that numbers 
approximately 750 loans over a 12 year period.
    Recent GAO and Committee investigation into SBA management 
of this program and its credit subsidy cost demonstrate 
continuing problems. The Committee has learned that the Office 
of Management and Budget will be reopening the calculation of 
the subsidy rate of the 504 program in order to correct for 
improper crediting of payments. With these lapses in mind, the 
Committee has moved in this subtitle to shift more 
responsibility to the Certified Development Company partners.
    In particular, the Committee makes significant changes to 
the Premier Certified Lenders Program (PCLP). The Committee is 
particularly grateful for the efforts of the Ranking Minority 
Member, Mr. LaFalce for his assistance (This subtitle 
substantially mirrors the bill H.R. 1734 introduced by Mr. 
LaFalce this session). SBA continues to object to these 
changes, citing concern over the costs to the program. The 
Committee appreciates these concerns but believes that the SBA 
is too ready to assume the worst from the their private sector 
partners.

Sec. 221. Reauthorization of fees

    This section extends the fees which reduce the 504 program 
subsidy rate to zero. The fees were put in place in 1996 and 
are set to expire in September. The bill expressly limits the 
fees charged to the amount necessary to keep the subsidy rate 
at zero. The Committee hopes that the SBA will keep it informed 
of the changes anticipated to the subsidy rate (due to the 
incorrect crediting of payments) and expects SBA to act 
promptly to reduce the fees when the subsidy rate drops.

Sec. 222. PCLP participation

    This expands PCLP program participation beyond the original 
limit of fifteen Certified Development Companies (CDCs). The 
Committee believes that it is in the best interest of the 504 
program to hold out PCLP participation as a goal for as many 
CDCs as possible. The Committee also believes that allowing 
more PLCP participants will significantly aid the SBA by 
reducing the demands on agency personnel.

Sec. 223. PCLP eligibility

    This section modifies eligibility for the program by 
requiring that CDC applicants demonstrate their proficiency in 
closing and servicing loans over at least the past two years 
and responds to concerns that PCLP participants may not have 
requisite skills for managing their portfolios.

Sec. 224. Loss reserves

    This section establishes the required loss reserves for the 
PCLP program participants. CDCs in the program will need a loss 
reserve of 10% of their loan exposure. The loss reserve may be 
in the form of either an irrevocable letter of credit or 
deposits in a federally insured financial institution. The 
section also requires the CDC to replenish its loan loss 
reserves within 30 days of any disbursements.

Sec. 225. Goals

    This section defines the goal of the PCLP program as having 
all participating CDCs process at least half of their loans 
under the program. This goal is intended as a target only. CDCs 
should use prudent judgment in determining which applicants are 
appropriate for processing under the streamlined PCLP 
procedures, and should not allow this judgment to be affected 
by the goal.

Sec. 226. Technical amendments

Sec. 227. Promulgation of regulations

    This section requires the SBA to promulgate new regulations 
within 90 days and to implement the provisions of this bill 
within 120 days.

Sec. 228. Technical amendment

Sec. 229. Repeal

Sec. 230. Loan servicing and liquidation

    This section modifies the PCLP program to allow 
participating CDCs to foreclose and liquidate defaulted loans. 
The Committee finds that there is no reason for PCLP CDCs to be 
more limited in their ability to handle portfolio functions 
than their counterparts in the 7(a) program's Preferred Lender 
Program. The SBA has continued to object to the ability of CDCs 
to litigate defaulted loans claiming that CDCs are neither 
sufficiently experienced nor actual parties-in-interest in 
litigation. The Committee finds both of the assertions 
groundless. A PCLP CDC with its loan loss reserve at stake is 
certainly a party-in-interest in such litigation. Furthermore, 
SBA has a demonstrably poor record of handling such actions 
themselves, and are in fact, many times required to go through 
the United States Attorney's office in order to press 
litigation. This has resulted in serious delays which have only 
a negative effect on recoveries. Undoubtedly, the SBA believes 
it is saving money because their legal costs are not reflected 
in the loss rate, but the Committee finds that such savings are 
illusory at best.

Sec. 231. Use of proceeds

    This section clarifies that loan proceeds are to be used by 
borrowers solely to assist a specific small business.

Sec. 232. Lease of property

    Under current law a borrower cannot buy or build a property 
unless the borrower plans to use all of the property. This is a 
reflection of SBA policy against the use of loan proceeds for 
passive real estate investments. However, it ignores a growing 
trend in the partial lease of a property for an unrelated 
purpose, i.e. a Taco Bell Express at a gas station. This 
section would allow borrowers to lease out not more than 25% of 
a site, in order to take advantage of this practice. The 
Committee does not believe that this will result in a rash of 
loans designed solely to expand property based leasing. The 
existence of the job creation and other requirements will 
adequately prevent such misuse while granting borrowers greater 
flexibility.

Sec. 233. Seller financing and collateralization

    Previous legislation is being interpreted to preclude 
sellers of property from providing financing of the 15-20% down 
payment required from the borrower/purchaser. Seller financing 
would provide the same safety to the SBA funding and should not 
be denied to 504 borrowers as a financing option. This section 
permits seller financing to provide the requisite down payment 
provided it is subordinated to the SBA's interest in the 
property.
    The collateralization language in this provision states 
that SBA shall require collateral beyond the property being 
financed only on a case-by-case basis, if necessary to protect 
the taxpayer's interest. This language merely reinforces 
existing SBA practice, as laid out in its standard operating 
procedures.

Sec. 234. Preexisting conditions

    This provision establishes a procedure conforming with the 
EPA's ``brownfields'' agenda. If a prospective borrower obtains 
a letter from a State or federal environmental agency stating 
that neither the borrower nor the CDC lender (and SBA) will be 
held liable for any preexisting environmental conditions on the 
subject property, then the SBA can no longer delay loan 
approval due to environmental concerns. This provision also 
requires the borrower to cooperate with all inspection and 
remediation efforts. The Committee takes this action in 
response to concerns expressed by borrowers and lenders who 
have been adversely affected by the current lack of a 
consistent SBA policy.

         Subtitle C--Small Business Investment Company Program

    This subtitle makes several minor changes to the SBIC 
program designed to provide SBICs with greater flexibility and 
better access to financial markets. In addition the bill 
contains provisions to improve operations at the Investment 
Division of the SBA.

Sec. 241. 5-year commitments

    This section gives the Administrator the option of making 
five year leverage commitments to SBICs. This will allow SBA to 
provide leverage to SBICs based on their investment patterns, 
which normally allow for all investments to be made in the 
first five years of the SBIC's life cycle. This will both 
provide greater flexibility for the SBICs and reduce paperwork 
and related management efforts at the SBA.

Sec. 242. Program reforms

            (a) Tax distributions
    This provision permits SBICs to make quarterly 
distributions to its investors to meet the investor's tax 
obligations. Most SBICs are formed as partnerships and this 
change will cover situations where investors need to make 
quarterly tax payments to the federal government.
            (b) Leverage fee
    SBICs currently pay a three percent fee on the leverage 
they receive from the SBA. This section requires that one 
percent be paid at the time the SBA makes a commitment for this 
leverage and the remaining two percent is paid on the date when 
the leverage is drawn by the SBIC.
            (c) Issuance of guarantees and trust certificates
    This section provides that the SBA will pool and sell 
debentures to investors every six months, a change from the 
current practice of every three months. This will allow for 
larger pools, which should generate greater investor interest 
and lower interest rates for the program.
            (d) Indexing for leverage
    This section allows individual SBICs or multiple SBICs 
under common control to exceed the $90 million cap on leverage 
if they agree to invest all leverage obtained above the cap in 
smaller small businesses (defined as less than $2 million in 
revenue and less than $6 million in net worth). The cap will be 
automatically adjusted upwards annually for inflation. The 
Committee finds that, as the program has matured, some 
expansion for larger, older SBICs is needed. However, the 
Committee does not wish to encourage unlimited growth above the 
current cap, hence the requirement for investment in smaller 
businesses, which is consistent with the program's original 
intent.

Sec. 243. Fees

    This section permits the SBA to collect fees from SBIC 
applicants to offset expenses incurred in performing licensing 
functions. This will enable the Investment Division to defray 
its expenses and cover costs.

Sec. 244. Examination fees

    Similar to the previous section this section permits SBA to 
collect fees from SBICs and use the proceeds to offset the cost 
of examinations.

                     Subtitle D--Microloan Program

    This subtitle reauthorizes the microloan program, which is 
focused on lending in amounts below $25,000. This program, 
combined with technical assistance and business counseling 
grants, is designed to aid the smallest of businesses, in 
particular start-ups and home-based businesses.

Sec. 251. Microloan program extension

    This section has four purposes:
          (a) Raises the loan limit for microloan 
        intermediaries from $2.5 million to $3.5 million;
          (b) Changes the loan loss reserve requirements for 
        microloan intermediaries to fifteen (15) percent of 
        their outstanding balance for the first five years. 
        After that, the reserve will be either twice the 
        intermediary's losses or ten (10) percent of their 
        outstanding balance, whichever is greater;
          (c) Converts the direct microloan program from a 
        demonstration program to a permanent program; and
          (d) Extends the guaranteed program three years.
    The Committee notes that the SBA has barely begun 
implementation of the guaranteed microloan program and 
expresses its clear displeasure at the lackluster effort seen 
thus far. This program has the potential to provide the same 
services as the direct program, at a lower cost to the 
taxpayers.

Sec. 252. Supplemental microloan grants

    This section authorizes the Small Business Administration 
and its microlending partners to provide supplemental technical 
assistance in the form of transportation or child care 
assistance. This assistance may only be provided through funds 
made available from agencies and will be subject to a 
memorandum of understanding established between the SBA and the 
agency providing the funds. The Committee believes that 
existing microloan technical assistance resources are too 
scarce to spread out further and believes funds for this effort 
can be found at other agencies.
    The Committee also notes a concern expressed by Mr. 
Baldacci and Mr. Flake regarding the availability of 
transportation in economically depressed communities. In many 
rural areas and economically isolated inner city neighborhoods 
the lack of transportation is a major obstacle to people 
looking for work. The Committee encourages the SBA, and its 
microlending partners, to consider funding of for-profit and 
cooperative transportation businesses which will provide links 
between these communities and job opportunities. Such 
initiatives would not only encourage the development of new 
microbusinesses but also address a critical barrier faced by 
persons seeking better jobs or coming off of public 
assistance--lack of adequate transportation.

                TITLE III--WOMEN'S BUSINESS ENTERPRISES

    This title continues the Committee's efforts to expand upon 
and assist the contribution women entrepreneurs make to the 
national economy. The Women's Business Centers are the central 
part of the SBA's efforts to provide technical assistance, 
business education and support for women in business. This 
title extends and expands that program and strengthens the 
Office of Women's Business Ownership at the SBA.

Sec. 301. Reports

    This section requires that the Interagency Committee's 
annual report be transmitted through the SBA. This clarifies 
the changes made by the Committee in 1994 that linked the 
council specifically to the SBA. The section also requires the 
report to contain information on the Interagency Committee's 
efforts to meet its statutory duties.

Sec. 302. Council duties

    This section removes an inconsistency by requiring the 
Council to submit its reports through the Assistant 
Administrator for Women's Business Ownership. It also adds 
reporting requirements for the Council to the President and the 
Congress.

Sec. 303. Council membership

    Created by the Women's Business Ownership Act of 1988, the 
Council serves as an advisory body to the Interagency Committee 
and the Congress to provide input from the private sector. This 
section expands the Council membership to 14 from 9 and revises 
the membership by increasing entrepreneurs from 2 to 4 and 
women's business organization members from 5 to 6.

Sec. 304. Authorization of appropriations

    This section extends the authorization for the Women's 
Business Council through 2000 and increases the Council 
authorization level to $600,000. The Committee has increased 
the authorization to provide for the ability of the Council to 
contract out for studies and other services.

Sec. 305. Women's business centers

    This section increases the authorization of appropriations 
for Women's Business Centers to $8,000,000 per year for three 
years. It also contains a prohibition on the use of these funds 
for other purposes. Recently, an increasing amount of current 
funds has been diverted to administrative expenses of the SBA, 
rather than going to directly assist Women's Business Centers 
and women entrepreneurs. The Committee restricts the use of 
such funds for administrative purposes to 10% of the authorized 
amount for 1998 and prohibits the practice thereafter.
    The Committee also changes the funding structure for 
women's business centers in this section. Grantees receiving 
funds under this program will now be eligible for five years of 
funding rather than the current three and current grantees may 
apply for fourth and fifth year funding. The funding formula 
has been changed as follows:
          One non-federal dollar for each two federal dollars 
        for years one and two rather than just the first year;
          One non-federal dollar for each federal dollar in 
        year three rather than in year two; and
          Two non-federal dollars for each federal dollar in 
        years four and five rather than year three which had 
        been the last year.
    This change provides increased funding for the centers and 
a less difficult transition from mostly federal to mostly non-
federal funding.

Sec. 306. Office of Women's Business Ownership

    This section establishes the position of Assistant 
Administrator for Women's Business Ownership and lays out the 
duties and responsibilities of that position. These duties 
include administering the Women's Business Center program; 
establishing budget priorities and estimating funding needs; 
selecting participants for the Women's Business Center program; 
auditing grantees and; serving as vice-chair of the Women's 
Business Council.
    The Office of Women's Business Ownership was established by 
Executive Order in 1979 and made a permanent office in the SBA 
Reauthorization Act of 1994. The Committee feels it is 
necessary to establish the position of Assistant Administrator 
for Women's Business Ownership in order to reinforce our 
commitment and the SBA's commitment to these important 
programs.

                   TITLE IV--COMPETITIVENESS PROGRAM

    Established by Title VII of Public Law 100-656, the 
``Business Opportunity Development Reform Act of 1988'', the 
Small Business Competitiveness Demonstration Program was 
designed to show that small business could effectively compete 
without set-asides in certain designated industry groups. The 
four designated industry groups are: construction (other than 
dredging), architectural and engineering services; refuse 
systems and waste hauling; and non-nuclear ship repair. Under 
the program, contracts in these four groups are awarded under 
full and open competition, as long as small business 
participation is at least forty percent. To protect small 
business the use of set-asides would be reimposed if the levels 
dropped below forty percent.
    At the same time the participating federal agencies were 
directed to refocus their efforts to increase small business 
participation in other areas of government contracting known as 
Targeted Industry Groups. The program has been successful as 
contract awards in the four designated industry groups remain 
at their previous high levels. There has been some reduction 
over the past four years, but the Committee believes this is 
due less to the suspension of set-asides and more to the 
prevalence of anti-competitive procurement practices by the 
agencies. Most notable is the practice of contract bundling, 
which the Office of Federal Procurement Policy freely admits 
has significantly reduced the procurement opportunities 
available to small businesses.
    The Committee is also less than pleased with the efforts 
made to assist small businesses in the Targeted Industry 
Groups. Though the SBA believes that the Competitiveness 
Program should be ended its position is based on faulty logic. 
They believe that set-asides can improve the lot of small 
businesses, but if the opportunities are diminished no amount 
of set-asides can have an impact. Additionally, the Committee 
notes that SBA would have a far better case if the use of set-
asides had produced better results within the targeted groups. 
Consequently, the Committee feels justified in making this 
program permanent and expresses its desire for the SBA to 
redouble its efforts to fight contract bundling in the 
designated groups and to enforce set-asides in the targeted 
groups with more vigor than it has recently shown.

Sec. 401. Program term

    The Small Business Competitiveness program was established 
as a pilot program designed to showcase small business 
competitiveness without the use of set-asides. The program 
allows contracts to be issued in four designated industry 
groups (construction, non-nuclear ship repair, waste hauling, 
and architecture/engineering) without small business set-asides 
as long as the small business participation in those areas is 
at least 40%. This figure was chosen as twice the amount of the 
small goal established by statute for government procurement. 
This section makes the Competitiveness program permanent.

Sec. 402. Monitoring agency performance

    This section changes the reporting requirement from 
quarterly to annually, in order to reduce the burden on the 
agencies. The Committee also believes that the response on an 
annual basis will be more coherent if conducting in this 
fashion.

Sec. 403. Reports to Congress

    This provision makes the reporting requirements permanent 
and changes reporting responsibility from the Office of Federal 
Procurement Policy to the SBA.

Sec. 404. Small business participation in dredging

    Along with the Small Business Competitiveness Program the 
Congress created a similar program for the dredging industry. 
This program set gradually increasing goals for small business 
participation and procedures to increase small business 
contract opportunities. This is valuable to small business 
since dredging is a purely federal market dominated by a few 
large companies. In addition, studies conducted at the time of 
the original implementation pointed to the higher costs created 
by the prevalence of set-asides. Therefore, this section makes 
the small business dredging participation program permanent.

Sec. 405. Technical amendment

                   TITLE V--MISCELLANEOUS PROVISIONS

Sec. 501. Small business development centers

    Small Business Development Centers operate over 900 centers 
and satellites in all fifty states. This section makes several 
changes to this very successful program. It allows Women's 
Business Centers to compete for SBDC contracts, providing a 
bridge between the two programs without subsuming one within 
the other. The section also changes the funding formula for the 
SBDC program to provide a higher basic level of funding. This 
change will result in a fairer allocation to SBDC's from 
smaller states such as Vermont and Alaska. To accompany this 
allocation, the Committee increases the anticipated program 
size for 1999 and 2000 to $90 and $95 million, respectively.
    The section also clarifies the duties and responsibilities 
of SBDCs in training and counseling small businesses and 
prohibits charging fees for counseling. The Committee acts in 
order to clear up a long-standing dispute regarding the nature 
of the program. Although SBA requested that SBDCs charge fees, 
the Committee disagrees with this practice. Charging fees would 
place the assistance of SBDCs out of the reach of many 
fledgling small businesses, and simultaneously place SBDCs in 
direct competition with small companies providing a higher 
level of similar services, as consultants. The Committee 
believes that the current arrangement provides entrepreneurs 
with a much needed first step in seeking advice and counseling 
for building their small businesses.

Sec. 502. Small business export promotion

    This section adds a new paragraph to the small business 
development center program to encourage the development and 
expansion of an international trade data network. This network 
will provide information on international trade opportunities 
for small businesses. Funding is authorized to the extent 
appropriated and will not come from appropriated for SBDC 
grants. The Committee hopes to foster efforts to engage the 
small business community in international trade and provide 
them an outlet for international trade information through an 
already existing nationwide network, the SBDCs.

Sec. 503. Pilot preferred surety bond guarantee program extension.

    This section extends the Preferred Surety Bond program 
through the year 2000.

Sec. 504. Very small business program extension

    This section extends the Very Small Business procurement 
program through the year 2000. Although not scheduled to expire 
until 1998, the Committee felt it prudent to extend the 
authorization at this juncture, particularly since the program 
has only just been implemented.

Sec. 505. Extension of Cosponsorship Authority

    This section extends the SBA's ability to work with the 
assistance and cosponsorship of private entities on various 
projects. Notable examples are the joint work between SBA and 
Nationsbank on the Business Information Centers.

Sec. 506. Trade assistance program for small business concerns harmed 
        by NAFTA

    This section directs SBA to coordinate it programs and 
offer specific assistance to small businesses that may have 
been adversely affected by the North American Free Trade 
Agreement.

            Additional Committee views on Veteran's programs

    While the Committee has made changes and improvements to 
various assistance programs in H.R. 2261, particularly the SBDC 
and Womens' Business Center programs we have not taken 
legislative action concerning the SBA's efforts to assist our 
Nation's veterans. This should not be construed as approval of 
the SBA's efforts. In fact, the Committee is increasingly 
concerned that the Office of Veterans' Affairs and the SBA as a 
whole may be their responsibility to those who have served 
their country honorably.
    Given these concerns the Committee requests that the 
Administrator provide the Committee with a report concerning 
the SBA programs targeted at assisting veterans. The Committee 
would hope to receive the report by February 1998 and obtain 
the answers to the following questions:
          What were the total amounts allocated to outreach for 
        veterans for each year since 1992?
          What funding level has been allocated for counseling 
        and training for veterans at small business development 
        centers since 1992?
          How many veterans have received counseling and 
        training from since 1992?
          What quantity and dollar value of surety bonds were 
        extended to veterans with SBA guarantees since 1992?
          How much of each of the above amounts where 
        applicable went to administrative support and overhead?
          A number of studies indicate that while most veterans 
        wishing to own their own businesses possess sufficient 
        knowledge of their chosen field, many lack fundamental 
        business skills. How many business counseling workshops 
        has SBA conducted for veterans each year since 1992?
          How many does it plan to hold in 1997 and 1998?
          The Veterans Entrepreneurial Training program (VET) 
        is designed to provide up to 12 months of comprehensive 
        workshop instruction. How many veterans received 
        training through this program each year over the past 
        five years?
          What funding level has the VET program received each 
        year over the same period?
          The Transition Assistance Program (TAP) is meant to 
        provide business guidance for soon to be discharged 
        military personnel. What has this program's funding 
        level been over the past five years?
          The Federal Procurement Opportunities program, 
        according to SBA literature, is meant to provide 
        business opportunities for veteran-owned businesses to 
        sell products and services to the federal government. 
        What funding has this program received over the past 
        five years?
          The Defense Loan and Technical Assistance (DELTA) 
        program provides financial and technical assistance to 
        defense dependent small businesses adversely affected 
        by reductions in defense spending. How many loans and 
        how much technical assistance has this program provided 
        to veterans?
          The Veterans' Prequalification Loan pilot program is 
        meant to provide assistance for veterans in obtaining 
        access to credit. How many loans have been made through 
        this pilot and for what dollar amount?

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 5, 1997.
Hon. James M. Talent,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2261, the Small 
Business Programs Reauthorization and Amendments Acts of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Rachel 
Forward and Lisa Daley (for federal costs), and Marc Nicole 
(for the state and local impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 2261--Small Business Programs Reauthorization and Amendments Acts 
        of 1997

    Summary: H.R. 2261 would authorize appropriations for 
fiscal years 1998 through 2000 for the Small Business 
Administration (SBA) and would make a number of changes to SBA 
loan and small business development programs. Assuming 
appropriation of the necessary amounts, CBO estimates that 
enacting this legislation would result in new discretionary 
spending of about $4.3 billion over the 1998-2002 period. Of 
this total, $630 million is from amounts specifically 
authorized in the bill for SBA programs--primarily for 
administrative expenses. The remaining $3.7 billion would be 
primarily for the subsidy costs of SBA loan programs.
    CBO estimates that enacting H.R. 2261 also would result in 
an increase in direct spending of $1 million in fiscal year 
1998 and $5 million over the 1998-2002 period. Because the bill 
would affect direct spending, pay-as-you-go procedures would 
apply.
    The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA) of 1995 and would not impose any costs on state, local, 
or tribal governments.
    Description of the bill's major provisions: Title I would 
establish maximum levels for small business loans to be made by 
the SBA in 1998, 1999, and 2000. It also would authorize 
appropriations for the Service Corps of Retired Executives 
(SCORE), technical assistance grants to microloan recipients, 
and certain activities of the Small Business Development 
Centers (SBDCs). Title I also would authorize such sums as may 
be necessary for the disaster loan program and for 
administrative expenses necessary to carry out the Small 
Business Act and the Small Business Investment Act.
    Title II would modify several SBA guaranteed loan programs 
and would also the SBA to charge fees to certain borrowers. 
Title II also would require the SBA to conduct criminal 
background checks for each loan applicant. In addition, this 
title would convert the direct microloan program from a 
demonstration program to a permanent program and would extend 
the authorization for the microloan guarantee program through 
fiscal year 2000. (The microloan program provides technical 
assistance and loans ranging from $100 to $25,000 to very small 
businesses.)
    Title III would authorize the appropriation of $1.8 million 
over the 1998-2002 period for the operations of the National 
Women's Business Council and for grants for research in 
procurement or finance issues related to women's ownership of 
business. This title also would authorize the appropriation of 
$8 million per year for grants to Women's Business Centers.
    Title IV would convert both the Small Business Competitive 
Demonstration Program and the Small Business Participation in 
Dredging Program from pilot programs to permanent ones.
    Title V would make numerous changes to the SBDC program and 
would authorize the appropriation of $460 million over the 
1998-2002 period for that program. This title also would 
authorize the appropriation of $1.5 million in each of fiscal 
year 1998 and 1999 for SBDCs to provide export promotion 
services to small businesses.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of implementing H.R. 2261 is shown in Table 1. 
Assuming the appropriation of the necessary amounts, additional 
outlays would total $4.3 billion over the 1998-2002 period. 
Nearly all of that amount is for SBA spending that is subject 
to appropriation. The costs of this legislation fall within 
budget functions 370 (commerce and housing credit) and 450 
(community and regional development).
    Basis of estimate: For the purposes of this estimate, CBO 
assumes that H.R. 2261 will be enacted by the end of fiscal 
year 1997 and that both the amounts specifically authorized and 
those estimated to be necessary will be appropriated by the 
start of each fiscal year. Outlay estimates are based on 
historical spending rates for existing or similar programs.

                               TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2261                               
----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal years in millions of dollars--   
                                                                 -----------------------------------------------
                                                                   1997    1998    1999    2000    2001    2002 
----------------------------------------------------------------------------------------------------------------
                                      SPENDING SUBJECT TO APPROPRIATION \1\                                     
                                                                                                                
Spending Under Current Law:                                                                                     
    Budget Authority \2\........................................     873       0       0       0       0       0
    Estimated Outlays...........................................     820     299      65      21       9       0
Proposed Changes:                                                                                               
    Specified Authorization Level...............................       0     154     180     199     103     103
    Estimated Authorization Level...............................       0   1,182   1,224   1,278       1       1
                                                                 -----------------------------------------------
      Total Authorization Level.................................       0   1,336   1,404   1,477     104     104
    Estimated Outlays...........................................       0     844   1,242   1,424     575     179
Spending Under The Bill:                                                                                        
    Authorization Level \2\.....................................     873   1,336   1,404   1,477     104     104
    Estimated Outlays...........................................     820   1,143   1,307   1,445     584     179
                                                                                                                
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated Budget Authority......................................       0       1       1       1       1       1
Estimated Outlays...............................................       0       1       1       1       1       1
----------------------------------------------------------------------------------------------------------------
\1\ All but approximately $2 million of the estimated amounts are for projected spending by the SBA.            
\2\ The 1997 level is the amount appropriated for that year.                                                    

Spending subject to appropriation

    Most of the bill's budgetary effects would come from 
reauthorizing existing SBA programs (primarily for the subsidy 
costs of direct and guaranteed loans). The estimated amounts 
would be subject to appropriation action.
    Loan Programs. H.R. 2261 would permit the SBA to (1) 
guarantee business loans totaling about $16 billion in 1998, 
$18 billion in 1999, and $21 billion in 2000, (2) make direct 
loans totaling $60 million in each of fiscal years 1998 through 
2000, and (3) make an indefinite amount of disaster loans over 
the 1998-2000 period. Table 2 shows the loan levels authorized 
or estimated to be authorized by the bill for SBA's business 
and disaster loans as well as the estimated subsidy cost and 
administrative expenses for those loans.
    The Federal Credit Reform Act of 1990 requires 
appropriation of the subsidy costs and administrative costs for 
operating credit programs. (The subsidy cost is the estimated 
long-term cost to the government of a direct loan or loan 
guarantee, calculated on a net present value basis, excluding 
administrative costs.) H.R. 2261 does not provide an explicit 
authorization for either the subsidy or administrative costs 
for the guaranteed, direct, or disaster loans.
    Based on information from the SBA and on historical data 
for these loan programs, CBO estimates that the subsidy costs 
of guarantees for the authorized levels of business loans would 
be $304 million in 1998, $334 million in 1999, and $375 million 
in 2000. We estimate that the subsidy costs of the direct 
business loans would be $6 million for each of fiscal years 
1998 through 2000. The estimated subsidy rates for business 
loans and guarantees range from 0.5 percent to 8.1 percent, but 
most are at 2 percent or less and the average for this estimate 
is 1.9 percent. The estimated subsidy rate for disaster loans 
is about 30 percent.
    Based on recent administrative costs for the SBA's loan 
programs, CBO estimates that the administrative costs for the 
business loan programs would be about $95 million in fiscal 
year 1998, $97 million in fiscal year 1999, and $100 million in 
fiscal year 2000. Included in the estimate of administrative 
expenses are $1 million in fiscal year 1998 and $500,000 in 
each of fiscal years 1999 and 2000 to over SBA's costs to 
conduct a criminal background check for each loan applicant. 
The background checks would cost the SBA slightly more in 
fiscal year 1998 because the agency would need to purchase the 
computer necessary to conduct the queries.

                       TABLE 2.--SBA LOAN LEVELS, SUBSIDY COSTS, AND ADMINISTRATIVE COSTS                       
----------------------------------------------------------------------------------------------------------------
                                                                      By fiscal years, in millions of dollars-- 
                                                                    --------------------------------------------
                                                                       1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                             AUTHORIZED LOAN LEVELS                                             
                                                                                                                
Guaranteed and Direct Business Loan................................   16,200   17,950   20,650        0        0
Disaster Loans.....................................................    1,543    1,543    1,543        0        0
                                                                                                                
                                               LOAN SUBSIDY COSTS                                               
                                                                                                                
Guaranteed and Direct Business Loans:                                                                           
    Estimated Authorization Level..................................      310      340      381        0        0
    Estimated Outlays..............................................      199      311      352      120        7
Disaster Loans:                                                                                                 
    Estimated Authorization Level..................................      459      459      459        0        0
    Estimated Outlays..............................................      230      413      459      230       46
                                                                                                                
                                            LOAN ADMINISTRATION COSTS                                           
                                                                                                                
Guaranteed and Direct Business Loans:                                                                           
    Estimated Authorization Level..................................       95       97      100        0        0
    Estimated Outlays..............................................       95       97      100        0        0
Disaster Loans:                                                                                                 
    Estimated Authorization Level..................................      164      169      174        0        0
    Estimated Outlays..............................................      164      169      174        0        0
----------------------------------------------------------------------------------------------------------------

    Assuming that demand for SBA's disaster loans over the next 
three years will be at the average historical rate for the past 
six years, CBO projects that the SBA would make disaster loans 
totaling about $1.5 billion in each fiscal year over the 1998-
2000 period. CBO estimates that the subsidy costs of these 
loans would be $459 million per year and that the 
administrative costs for the disaster loan program would be 
$164 million in 1998, $169 million in 1999, and $174 million in 
2000.
    Surety Bonds. H.R. 2261 would authorize the SBA to 
guarantee up to $2 billion in surety bonds for small businesses 
in each of the fiscal years 1998, 1999, and 2000. Such 
guarantees are not considered loan guarantees under the 
definition in the Federal Credit Reform Act of 1990, and annual 
appropriations are required only to cover the net cash losses 
to the program within a given year. Based on information from 
the SBA, CBO estimates that the authorized level of activity 
would result in outlays of $4 million each year over the 1998-
2000 period.
    Other Programs. H.R. 2261 would provide specific 
authorizations of appropriations for SBDCs, SCORE, technical 
assistance grants to microloan recipients, and various women's 
business programs. CBO estimates that these programs would 
result in spending by the SBA of $627 million over the next 
five years.
    H.R. 2261 also would reauthorize the Small Business 
Competitive Demonstration Program and the Small Business 
Participation in Dredging Program. Both programs require 
federal agencies to establish contracting goals for small 
businesses in certain industries. CBO estimates that extending 
the Small Business Competitive Demonstration Program would cost 
the 10 participating agencies and the SBA about $1 million a 
year to report and compile the required data, assuming 
appropriation of the necessary amounts. Based on information 
from the Army Corps of Engineers, CBO estimates that extending 
the Small Business Participation in Dredging Program would cost 
less than $500,000 annually over the 1998-2000 period.
    In addition, the bill would authorize such sums as may be 
necessary to cover the SBA's costs of carrying out the Small 
Business Act and the Small Business Investment Company Act. CBO 
estimates that the general administrative costs to carry out 
these acts would be $149 million in fiscal year 1998, $154 
million in fiscal year 1999, and $158 million in fiscal year 
2000, assuming appropriation of the necessary amounts. (The 
estimate of general administrative costs excludes the program-
specific administrative expenses for business and disaster 
loans.)

Direct spending

    The bill would authorize the SBA to spend without further 
authorization the Small Business Investment Company (SBIC) 
examination fees currently collected by the agency but not 
available for spending unless authorized in advance in an 
appropriation act. Based on information from the SBA, CBO 
estimates that the agency would collect and spend about $1 
million annually in examination fees.
    Pay-as-you-go considerations: Section 252 of the Balanced 
Budget and Emergency Deficit Control Act of 1985 sets up pay-
as-you-go procedures for legislation affecting direct spending 
or receipts. CBO estimates that enacting the bill would 
increase direct spending by $1 million a year because SBA would 
be able to spend SBIC examination fees without appropriation 
action.
    Estimated impact on State, local, and tribal governments: 
H.R. 2261 contains no intergovernmental mandates as defined in 
UMRA, and would not impose any costs on state, local, or tribal 
governments. The bill would authorize an increase of $5 million 
in fiscal year 1999 and $10 million annually thereafter for the 
Small Business Development Center Program. The program is 
currently authorized at $85 million in fiscal year 1998. The 
program provides grants to state and local governments, public 
and private institutions of higher education, and state-
chartered development corporations to establish and operate 
small business development centers.
    Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in UMRA.
    Previous CBO estimate: On August 8, 1997, CBO prepared an 
estimate for S. 1139, the Small Business Reauthorization Act of 
1997, as ordered reported by the Senate Committee on Small 
Business on June 16, 1997. CBO estimated that S. 1139 would 
result in new discretionary spending totaling at least $4.4 
billion over the 1998-2002 period, assuming appropriation of 
the necessary amounts. In comparison, CBO estimates that 
implementing H.R. 2261 would result in new discretionary 
spending of about $4.3 billion over the 1998-2002 period.

                       Unfunded Mandates Estimate

    Pursuant to the provisions of P.L. 104-4 (109 Stat. 48, et 
seq.), the Unfunded Mandates Reform Act of 1995, the Committee 
estimates that H.R. 2261 will not impose unfunded mandates as 
defined in that Act.

                 Statement of Constitutional Authority

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, Clauses 1, 3, and 18 
of the Constitution of the United States.

                           Oversight Findings

    In accordance with clause 2(l)(3)(D) of rule XI of the 
Rules of the House of Representatives, the Committee on Small 
Business states that no oversight findings or recommendations 
have been made by the Committee on Government Reform and 
Oversight with respect to the subject matter contained in H.R. 
2261.
    In accordance with clause (2)(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the oversight findings 
and recommendations of the Committee on Small Business with 
respect to the subject matter contained in H.R. 2261 are 
incorporated into the descriptive portions of this report.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                           SMALL BUSINESS ACT

          * * * * * * *
  Sec. 7. (a) * * *
          [(1)] (1)(A) Credit elsewhere.--
          (B) Background checks.--Prior to the approval of any 
        loan made pursuant to this subsection, or section 503 
        of the Small Business Investment Act, the Administrator 
        shall verify the applicant's criminal background, or 
        lack thereof, through the best available means, 
        including, if possible, use of the National Crime 
        Information Center computer system at the Federal 
        Bureau of Investigation. No financial assistance shall 
        be extended pursuant to this subsection if the 
        applicant can obtain credit elsewhere. No immediate 
        participation may be purchased unless it is shown that 
        a deferred participation is not available; and no 
        direct financing may be made unless it is shown that a 
        participation is not available.
          * * * * * * *
  (m) Microloan [Demonstration] Program.--
          (1)(A) Purposes.--The purposes of the Microloan 
        [Demonstration] Program are--
                  (i) to assist women, low-income, and minority 
                entrepreneurs and business owners and other 
                individuals possessing the capability to 
                operate successful business concerns;
                  (ii) to assist small business concerns in 
                those areas suffering from a lack of credit due 
                to economic downturns; and
                  (iii) to establish a microloan 
                [demonstration] program to be administered by 
                the Small Business Administration--
                          (I) * * *
          * * * * * * *
          (B) Establishment.--There is established a microloan 
        [demonstration] program, under which the Administration 
        may--
                  (i) * * *
          * * * * * * *
          (3) Loans to intermediaries.--
                  (A) * * *
          * * * * * * *
                  (C) Loan limits.--Notwithstanding subsection 
                (a)(3), no loan shall be made under this 
                subsection if the total amount outstanding and 
                committed to one intermediary (excluding 
                outstanding grants) from the business loan and 
                investment fund established by this Act would, 
                as a result of such loan, exceed $750,000 in 
                the first year of such intermediary's 
                participation in the program, and [$2,500,000] 
                $3,500,000 in the remaining years of the 
                intermediary's participation in the 
                [demonstration] program.
                  (D) Loan loss reserve fund.--The 
                Administration shall, by regulation, require 
                each intermediary to establish a loan loss 
                reserve fund, and to maintain such reserve fund 
                until all obligations owed to the 
                Administration under this subsection are 
                repaid. The Administration shall require the 
                loan loss reserve fund to be maintained--
                          [(i) in the first year of the 
                        intermediary's participation in the 
                        demonstration program, at a level equal 
                        to not more than 15 percent of the 
                        outstanding balance of the notes 
                        receivable owed to the intermediary; 
                        and
                          [(ii) in each year of participation 
                        thereafter, at a level reflecting the 
                        intermediary's total losses as a result 
                        of participation in the demonstration 
                        program, as determined by the 
                        Administration on a case-by-case basis, 
                        but in no case shall the required level 
                        exceed 15 percent of the outstanding 
                        balance of the notes receivable owed to 
                        the intermediary under the program.]
                          (i) during the initial 5 years of the 
                        intermediary's participation in the 
                        program under this subsection, at a 
                        level equal to not more than 15 percent 
                        of the outstanding balance of the notes 
                        receivable owed to the intermediary; 
                        and
                          (ii) in each year of participation 
                        thereafter, at a level equal to not 
                        more than the greater of--
                                  (I) 2 times an amount 
                                reflecting the total losses of 
                                the intermediary as a result of 
                                participation in the program 
                                under this subsection, as 
                                determined by the Administrator 
                                on a case-by-case basis; or
                                  (II) 10 percent of the 
                                outstanding balance of the 
                                notes receivable owed to the 
                                intermediary.
          * * * * * * *
          (4) Marketing, management and technical assistance 
        grants to intermediaries.--Grants made in accordance 
        with subparagraph (B)(ii) of paragraph (1) shall be 
        subject to the following requirements:
                  (A) * * *
          * * * * * * *
                  (F)(i) The Administration may accept and 
                disburse funds received from another Federal 
                department or agency to provide additional 
                assistance to individuals who are receiving 
                assistance under the State program funded under 
                part A of title IV of the Social Security Act 
                (42 USC 601et seq.), or under any comparable 
State-funded means-tested program of assistance for low-income 
individuals.
                  (ii) Grant proceeds are in addition to other 
                grants provided by this subsection and shall 
                not require the contribution of matching 
                amounts to be eligible. The grants may be used 
                to pay or reimburse a portion of child care and 
                transportation costs of individuals described 
                in clause (i) and for marketing, management and 
                technical assistance.
                  (iii) Prior to accepting and distributing any 
                such grants, the Administration shall enter a 
                Memorandum of Understanding with the department 
                or agency specifying the terms and conditions 
                of the grants and providing appropriate 
                monitoring of expenditures by the intermediary 
                and ultimate grant recipient to insure 
                compliance with the purpose of the grant.
                  (iv) On January 31, 1999, and annually 
                thereafter, the Administration shall submit to 
                the Committees on Small Business of the House 
                of Representatives and the Senate a report on 
                any monies distributed pursuant to the 
                provisions of this paragraph.
                  (v) No funds are authorized to be provided to 
                carry out the grant program authorized by this 
                paragraph (F) except by transfer from another 
                Federal department or agency to the 
                Administration.
          * * * * * * *
          (12) Deferred participation loan pilot.--In lieu of 
        making direct loans to intermediaries as authorized in 
        paragraph (1)(B), [during fiscal years 1995 through 
        1997] during fiscal years 1998 through 2000, the 
        Administration may, on a pilot program basis, 
        participate on a deferred basis of not less than 90 
        percent and not more than 100 percent on loans made to 
        intermediaries by a for-profit or nonprofit entity or 
        by alliances of such entities, subject to the following 
        conditions:
                  (A) * * *
          * * * * * * *
  Sec. 20. (a)(1) * * *
  (2) Notwithstanding any other provision of law, the 
Administration shall enter into commitments for direct loans 
and to guarantee loans, debentures, payment of rentals, or 
other amounts due under qualified contracts and other types of 
financial assistance and enter into commitments to purchase 
debentures and preferred securities and to guarantee sureties 
against loss pursuant to programs under this Act and the Small 
Business Investment Act of 1958, in the full amounts provided 
by law subject only to (A) the availability of qualified 
applications, and (B) limitations contained in appropriations 
Acts. Nothing in this paragraph authorizes the Administration 
to reduce or limit its authority to enter into such 
commitments. Subject to approval in appropriations Acts, 
amounts authorized for preferred securities, debentures or 
participating securities under title III of the Small Business 
Investment Act of 1958 may be obligated in one fiscal year and 
disbursed or guaranteed in [the following fiscal year] any one 
or more of the 4 subsequent fiscal years.
          * * * * * * *
  [(l) The following program levels are authorized for fiscal 
year 1995:
          [(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  [(A) $45,000,000 in technical assistance 
                grants as provided in section 7(m); and
                  [(B) $130,000,000 in direct and immediate 
                participation loans, and of such sum, the 
                Administration is authorized to make--
                          [(i) not more than $10,000,000 in 
                        loans, as provided in section 7(a)(10); 
                        and
                          [(ii) not more than $120,000,000 in 
                        loans, as provided in section 7(m).
          [(2) For the programs authorized by this Act, the 
        Administration is authorized to make $13,420,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  [(A) $9,150,000,000 in general business loans 
                as provided in section 7(a);
                  [(B) $2,250,000,000 in financings as provided 
                in section 7(a)(13) and section 504 of the 
                Small Business Investment Act of 1958;
                  [(C) $2,000,000,000 in loans as provided in 
                section 7(a)(21); and
                  [(D) $20,000,000 in loans as provided in 
                section 7(m).
          [(3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  [(A) $23,000,000 in purchases of preferred 
                securities;
                  [(B) $244,000,000 in guarantees of 
                debentures, of which $44,000,000 is authorized 
                in guarantees of debentures from companies 
                operating pursuant to section 301(d) of such 
                Act; and
                  [(C) $400,000,000 in guarantees of 
                participating securities.
          [(4) For the programs authorized by part B of title 
        IV of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $1,800,000,000, of which not more than 
        $600,000,000 may be in bonds approved pursuant to the 
        provisions of section 411(a)(3) of such Act.
          [(5) The Administration is authorized to make grants 
        or enter into cooperative agreements--
                  [(A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $3,500,000;
                  [(B) for the Small Business Institute program 
                authorized by section 8(b)(1), $3,000,000; and
                  [(C) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), $5,000,000, to remain available 
                until expended.
  [(m)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1995 such sums as may be 
necessary to carry out the provisions of this Act, including 
administrative expenses and necessary loan capital for disaster 
loans pursuant to section 7(b), and to carry out the provisions 
of the Small Business Investment Act of 1958, including 
salaries and expenses of the Administration.
  [(2) Notwithstanding paragraph (1), for fiscal year 1995--
          [(A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (l)(2)(A) is fully funded; and
          [(B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditions other than those specifically 
        authorized under this Act or the Small Business 
        Investment Act of 1958, except that it may approve 
        loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
  [(n) The following program levels are authorized for fiscal 
year 1996:
          [(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  [(A) $65,000,000 in technical assistance 
                grants as provided in section 7(m); and
                  [(B) $191,000,000 in direct and immediate 
                participation loans, and of such sum, the 
                Administration is authorized to make--
                          [(i) $11,000,000 in loans, as 
                        provided in section 7(a)(10); and
                          [(ii) $180,000,000 in loans, as 
                        provided in section 7(m).
          [(2) For the programs authorized by this Act, the 
        Administration is authorized to make $15,680,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  [(A) $10,500,000,000 in general business 
                loans as provided in section 7(a);
                  [(B) $2,650,000,000 in financings as provided 
                in section 7(a)(13) and section 504 of the 
                Small Business Investment Act of 1958;
                  [(C) $2,500,000,000 in loans as provided in 
                section 7(a)(21); and
                  [(D) $30,000,000 in loans as provided in 
                section 7(m).
          [(3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  [(A) $24,000,000 in purchases of preferred 
                securities;
                  [(B) $256,000,000 in guarantees of 
                debentures, of which $46,000,000 is authorized 
                in guarantees of debentures from companies 
                operating pursuant to section 301(d) of such 
                Act; and
                  [(C) $650,000,000 in guarantees of 
                participating securities.
          [(4) For the programs authorized by part B of title 
        IV of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $1,900,000,000, of which not more than 
        $625,000,000 may be in bonds approved pursuant to the 
        provisions of section 411(a)(3) of such Act.
          [(5) The Administration is authorized to make grants 
        or enter cooperative agreements--
                  [(A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $3,700,000;
                  [(B) for the Small Business Institute program 
                authorized by section 8(b)(1), $3,200,000; and
                  [(C) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), not to exceed $10,000,000, to 
                remain available until expended.
  [(o)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1996 such sums as may be 
necessary to carry out the provisions of this Act, including 
administrative expenses and necessary loan capital for disaster 
loans pursuant to section 7(b), and to carry out the provisions 
of the Small Business Investment Act of 1958, including 
salaries and expenses of the Administration.
  [(2) Notwithstanding paragraph (1), for fiscal year 1996--
          [(A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (n)(2)(A) is fully funded; and
          [(B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditions other than those specifically 
        authorized under this Act or the Small Business 
        Investment Act of 1958, except that it may approve 
        loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
  [(p) The following program levels are authorized for fiscal 
year 1997:
          [(1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  [(A) $98,000,000 in technical assistance 
                grants as provided in section 7(m); and
                  [(B) $262,000,000 in direct and immediate 
                participation loans, and of such sum, the 
                Administration is authorized to make--
                          [(i) $12,000,000 in loans, as 
                        provided in section 7(a)(10); and
                          [(ii) $250,000,000 in loans, as 
                        provided in section 7(m).
          [(2) For the programs authorized by this Act, the 
        Administration is authorized to make $19,390,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  [(A) $13,100,000,000 in general business 
                loans as provided in section 7(a);
                  [(B) $3,250,000,000 in financings as provided 
                in section 7(a)(13) and section 504 of the 
                Small Business Investment Act of 1958;
                  [(C) $3,000,000,000 in loans as provided in 
                section 7(a)(21); and
                  [(D) $40,000,000 in loans as provided in 
                section 7(m).
          [(3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  [(A) $25,000,000 in purchases of preferred 
                securities;
                  [(B) $300,000,000 in guarantees of 
                debentures; and
                  [(C) $900,000,000 in guarantees of 
                participating securities.
          [(4) For the programs authorized by part B of title 
        IV of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $2,000,000,000, of which not more than 
        $650,000,000 may be in bonds approved pursuant to the 
        provisions of section 411(a)(3) of such Act.
          [(5) The Administration is authorized to make grants 
        or enter cooperative agreements--
                  [(A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $3,900,000;
                  [(B) for the Small Business Institute program 
                authorized by section 8(b)(1), $3,400,000; and
                  [(C) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), not to exceed $15,000,000, to 
                remain available until expended.
  [(q)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1997 such sums as may be 
necessary to carry out the provisions of this Act, including 
administrative expenses and necessary loan capital for disaster 
loans pursuant to section 7(b), and to carry out the provisions 
of the Small Business Investment Act of 1958, including 
salaries and expenses of the Administration.
  [(2) Notwithstanding paragraph (1), for fiscal year 1997--
          [(A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (p)(2)(A) is fully funded; and
          [(B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditions other than those specifically 
        authorized under this Act or the Small Business 
        Investment Act of 1958, except that it may approve 
        loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.]
  (l) The following program levels are authorized for fiscal 
year 1998:
          (1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  (A) $40,000,000 in technical assistance 
                grants, as provided in section 7(m); and
                  (B) $60,000,000 in loans, as provided in 
                section 7(m).
          (2) For the programs authorized by this Act, the 
        Administration is authorized to make $15,040,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  (A) $11,000,000,000 in general business loans 
                as provided in section 7(a);
                  (B) $3,000,000,000 in financings as provided 
                in section 7(a)(13) of this Act and section 504 
                of the Small Business Investment Act of 1958;
                  (C) $1,000,000,000 in loans as provided in 
                section 7(a)(21); and
                  (D) $40,000,000 in loans as provided in 
                section 7(m).
          (3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  (A) $600,000,000 in purchases of 
                participating securities; and
                  (B) $500,000,000 in guarantees of debentures.
          (4) For the programs authorized by part B of title IV 
        of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $2,000,000,000, of which not more than 
        $650,000,000 may be in bonds approved pursuant to 
        section 411(a)(3) of that Act.
          (5) The Administration is authorized to make grants 
        or enter into cooperative agreements--
                  (A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $4,000,000; and
                  (B) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), $15,000,000, to remain available 
                until expended.
  (m)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1998 such sums as may be 
necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the Small Business Investment 
Act of 1958, including salaries and expenses of the 
Administration.
  (2) Notwithstanding paragraph (1), for fiscal year 1998--
          (A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (l)(2)(A) is fully funded; and
          (B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditions other than those specifically 
        authorized under this Act or the Small Business 
        Investment Act of 1958, except that it may approve 
        loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
  (n) The following program levels are authorized for fiscal 
year 1999:
          (1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  (A) $60,000,000 in technical assistance 
                grants as provided in section 7(m); and
                  (B) $60,000,000 in loans, as provided in 
                section 7(m).
          (2) For the programs authorized by this Act, the 
        Administration is authorized to make $16,540,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  (A) $12,000,000,000 in general business loans 
                as provided in section 7(a);
                  (B) $3,500,000,000 in financings as provided 
                in section 7(a)(13) of this Act and section 504 
                of the Small Business Investment Act of 1958;
                  (C) $1,000,000,000 in loans as provided in 
                section 7(a)(21); and
                  (D) $40,000,000 in loans as provided in 
                section 7(m).
          (3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  (A) $700,000,000 in purchases of 
                participating securities; and
                  (B) $650,000,000 in guarantees of debentures.
          (4) For the programs authorized by part B of title IV 
        of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $2,000,000,000, of which not more than 
        $650,000,000 may be in bonds approved pursuant to 
        section 411(a)(3) of that Act.
          (5) The Administration is authorized to make grants 
        or enter cooperative agreements--
                  (A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $4,500,000; and
                  (B) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), not to exceed $15,000,000, to 
                remain available until expended.
  (o)(1) There are authorized to be appropriated to the 
Administration for fiscal year 1999 such sums as may be 
necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the Small Business Investment 
Act of 1958, including salaries and expenses of the 
Administration.
  (2) Notwithstanding paragraph (1), for fiscal year 1999--
          (A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (n)(2)(A) is fully funded; and
          (B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditionsother than those specifically 
authorized under this Act or the Small Business Investment Act of 1958, 
except that it may approve loans under section 7(a)(21) of this Act in 
gross amounts of not more than $1,250,000.
  (p) The following program levels are authorized for fiscal 
year 2000:
          (1) For the programs authorized by this Act, the 
        Administration is authorized to make--
                  (A) $75,000,000 in technical assistance 
                grants as provided in section 7(m); and
                  (B) $60,000,000 in direct loans, as provided 
                in section 7(m).
          (2) For the programs authorized by this Act, the 
        Administration is authorized to make $19,040,000,000 in 
        deferred participation loans and other financings. Of 
        such sum, the Administration is authorized to make--
                  (A) $13,500,000,000 in general business loans 
                as provided in section 7(a);
                  (B) $4,500,000,000 in financings as provided 
                in section 7(a)(13) of this Act and section 504 
                of the Small Business Investment Act of 1958;
                  (C) $1,000,000,000 in loans as provided in 
                section 7(a)(21); and
                  (D) $40,000,000 in loans as provided in 
                section 7(m).
          (3) For the programs authorized by title III of the 
        Small Business Investment Act of 1958, the 
        Administration is authorized to make--
                  (A) $850,000,000 in purchases of 
                participating securities; and
                  (B) $700,000,000 in guarantees of debentures.
          (4) For the programs authorized by part B of title IV 
        of the Small Business Investment Act of 1958, the 
        Administration is authorized to enter into guarantees 
        not to exceed $2,000,000,000, of which not more than 
        $650,000,000 may be in bonds approved pursuant to the 
        provisions of section 411(a)(3) of that Act.
          (5) The Administration is authorized to make grants 
        or enter cooperative agreements--
                  (A) for the Service Corps of Retired 
                Executives program authorized by section 
                8(b)(1), $5,000,000; and
                  (B) for activities of small business 
                development centers pursuant to section 
                21(c)(3)(G), not to exceed $15,000,000, to 
                remain available until expended.
  (q)(1) There are authorized to be appropriated to the 
Administration for fiscal year 2000 such sums as may be 
necessary to carry out this Act, including administrative 
expenses and necessary loan capital for disaster loans pursuant 
to section 7(b), and to carry out the provisions of the Small 
Business Investment Act of 1958, including salaries and 
expenses of the Administration.
  (2) Notwithstanding paragraph (1), for fiscal year 2000--
          (A) no funds are authorized to be provided to carry 
        out the loan program authorized by section 7(a)(21) 
        except by transfer from another Federal department or 
        agency to the Administration, unless the program level 
        authorized for general business loans under subsection 
        (p)(2)(A) is fully funded; and
          (B) the Administration may not approve loans on 
        behalf of the Administration or on behalf of any other 
        department or agency, by contract or otherwise, under 
        terms and conditions other than those specifically 
        authorized under this Act or the Small Business 
        Investment Act of 1958, except that it may approve 
        loans under section 7(a)(21) of this Act in gross 
        amounts of not more than $1,250,000.
          * * * * * * *
  Sec. 21. (a)(1) The Administration is authorized to make 
grants (including contracts and cooperative agreements) to any 
State government or any agency thereof, any regional entity, 
any State-chartered development, credit or finance corporation, 
any women's business center operating pursuant to section 29, 
any public or private institution of higher education, 
including but not limited to any land-grant college or 
university, any college or school of business, engineering, 
commerce, or agriculture, community college or junior college, 
or to any entity formed by two or more of the above entities 
(herein referred to as ``applicants'') to assist in 
establishing small business development centers and to any such 
labor for: small business oriented employment or natural 
resources development programs; studies, research, and 
counseling concerning the managing, financing, and operation of 
small business enterprises, management and technical assistance 
regarding small business participation in international 
markets, export promotion and technology transfer; delivery or 
distribution of such services and information; and providing 
access to business analysts who can refer small business 
concerns to available experts: Provided, That after December 
31, 1990, the Administration shall not make a grant to any 
applicant other than an institution of higher education as a 
Small Business Development Center unless the applicant was 
receiving a grant (including a contract or cooperative 
agreement) on such date. The Administration shall require any 
applicant for a small business development center grant with 
performance commencing on or after January 1, 1992 to have its 
own budget and to primarily utilize institutions of higher 
education to provide services to the small business community. 
The term of such grants shall be made on a calendar year basis 
or to coincide with the Federal fiscal year.
          * * * * * * *
  (3) The Small Business Development Center Program shall be 
under the general management and oversight of the 
Administration[, but with recognition that a partnership exists 
under this section between the Administration and the applicant 
for the delivery of assistance to the small business community. 
Service shall be provided pursuant to a negotiated cooperative 
agreement with full participation of both parties.] for the 
delivery of programs and services to the Small Business 
community. Such programs and services shall be jointly 
developed, negotiated, and agreed upon, with full participation 
of both parties, pursuant to an executed cooperative agreement 
between the Small Business Development Center applicant and the 
Administration.
          (A) * * *
          * * * * * * *
          (C) On an annual basis, the Small Business 
        Development Center shall review and coordinate public 
        and private partnerships and cosponsorships with the 
        Administration for the purpose of more efficiently 
        leveraging available resources on a National and a 
        State basis.
  (4) Small business development center program level.--
          (A) * * *
          * * * * * * *
          (C) National program.--
                  [(i) In general.--Except as provided in 
                clause (ii), no State receiving funds under 
                this section shall receive a grant that 
                exceeds--
                          [(I) for fiscal year 1995, the sum of 
                        such State's pro rata share of a 
                        national program based upon the 
                        population of the State as compared to 
                        the total population in the United 
                        States, and $125,000; or
                          [(II) in each succeeding fiscal year, 
                        the sum of such State's pro rata share 
                        of a national program based upon the 
                        population of the State as compared to 
                        the total population in the United 
                        States, and $200,000.]
                  (i) In general.--
                          (I) Maximum amount.--Except as 
                        provided in clause (ii), and subject to 
                        subclause (II) of this clause, the 
                        amount of a grant received by a State 
                        under this section shall not exceed 
                        greater of--
                                  (aa) $500,000; and
                                  (bb) the State's pro rata 
                                share of a national program, 
                                based upon the population of 
                                the State as compared to the 
                                total population of the United 
                                States.
                          (II) Exception.--Subject to the 
                        availability of amounts made available 
                        in advance in an appropriations Act to 
                        carry out this section for any fiscal 
                        year in excess of amounts so provided 
                        for fiscal year 1997, the amount of a 
                        grant received by a State under this 
                        section shall not exceed the greater of 
                        $500,000, and the sum of--
                                  (aa) the State's pro rata 
                                share of a national program, 
                                based upon the population of 
                                the State as compared to the 
                                total population of the United 
                                States; and
                                  (bb) and $300,000 in fiscal 
                                year 1998, $400,000 in fiscal 
                                year 1999, and $500,000 in each 
                                fiscal year thereafter.
          * * * * * * *
          (6) Any applicant which is funded by the 
        Administration as a Small Business Development Center 
        may apply for an additional grant to be used solely to 
        assist--
                  (A) with the development and enhancement of 
                exports by small business concerns; [and]
                  (B) in technology transfer[,]; and
                  (C) with outreach, development, and 
                enhancement of minority-owned small business 
                startups or expansions, veteran-owned small 
                business startups or expansions, andwomen-owned 
small business startups or expansions, in communities impacted by base 
closings or military or corporate downsizing, or in rural or 
underserved communities;
        as provided under subparagraphs (B) through (G) of 
        subsection (c)(3). Applicants for such additional 
        grants shall comply with all of the provisions of this 
        section, including providing matching funds, except 
        that funding under this paragraph shall be effective 
        for any fiscal year to the extent provided in advance 
        in appropriations Acts and shall be in addition to the 
        dollar program limitations specified in paragraphs (4) 
        and (5). No recipient of funds under this paragraph 
        shall receive a grant which would exceed its pro rata 
        share of a $15,000,000 program based upon the 
        populations to be served by the Small Business 
        Development Center as compared to the total population 
        of the United States. The minimum amount of eligibility 
        for any State shall be $100,000.
          * * * * * * *
  (c)(1) * * *
          * * * * * * *
  (3) Services provided by a small business development center 
shall include, but shall not be limited to---
          (A) furnishing one-to-one individual counseling to 
        small [businesses;] businesses, including--
                  (i) working with individuals to increase 
                awareness of basic credit practices and credit 
                requirements;
                  (ii) working with the Administration to 
                develop and provide informational tools for use 
                in working with individuals on pre-business 
                startup planning, existing business expansion, 
                business plans, financial packages, credit 
                applications, contract proposals, and export 
                planning; and
                  (iii) working with individuals referred by 
                the local offices of the Administration and 
                Administration participating lenders;
          (B) assisting in technology transfer, research and 
        development, including applied research, and coupling 
        from existing sources to small businesses, including--
                  (i) working to increase the access of small 
                businesses to the capabilities of automated 
                flexible manufacturing systems;
                  (ii) working through existing networks and 
                developing new networks for technology transfer 
                that encourage partnership between the small 
                business and academic communities to help 
                commercialize university-based research and 
                development and introduce university-based 
                engineers and scientists to their counterparts 
                in small technology-based firms; and
                  (iii) exploring the viability of developing 
                shared production facilities, under appropriate 
                circumstances;
          (C) in cooperation with the Department of Commerce 
        and other relevant Federal agencies, actively assisting 
        small businesses in exporting by identifying and 
        developing potential export markets, facilitating 
        export transactions, developing linkages between United 
        States small business firms and prescreened foreign 
        buyers, assisting small businesses to participate in 
        international trade shows, assisting small businesses 
        in obtaining export financing, and facilitating the 
        development or reorientation of marketing and 
        production strategies; where appropriate, the Small 
        Business Development Center and the Administration may 
        work in cooperation with the State to establish a State 
        international trade center for these purposes;
          (D) developing a program in conjunction with the 
        Export-Import Bank and local and regional 
        Administration offices that will enable Small Business 
        Development Centers to serve as an information network 
        and to assist small business applicants for Export-
        Import Bank financing programs, and otherwise identify 
        and help to make available export financing programs to 
        small businesses;
          (E) working closely with the small business 
        community, small business consultants, State agencies, 
        universities and other appropriate groups to make 
        translation services more readily available to small 
        business firms doing business, or attempting to develop 
        business, in foreign markets;
          (F) in providing assistance under this subsection, 
        applicants shall cooperate with the Department of 
        Commerce and other relevant Federal agencies to 
        increase access to available export market information 
        systems, including the CIMS system;
          (G) assisting small businesses to develop and 
        implement strategic business plans to timely and 
        effectively respond to the planned closure (or 
        reduction) of a Department of Defense facility within 
        the community, or actual or projected reductions in 
        such firms' business base due to the actual or 
        projected termination (or reduction) of a Department of 
        Defense program or a contract in support of such 
        program--
                  (i) by developing broad economic assessments 
                of the adverse impacts of--
                          (I) the closure (or reduction) of the 
                        Department of Defense facility on the 
                        small business concerns providing goods 
                        or services to such facility or to the 
                        military and civilian personnel 
                        currently stationed or working at such 
                        facility; and
                          (II) the termination (or reduction) 
                        of a Department of Defense program (or 
                        contracts under such program) on the 
                        small business concerns participating 
                        in such program as a prime contractor, 
                        subcontractor or supplier at any tier;
                  (ii) by developing, in conjunction with 
                appropriate Federal, State, and local 
                governmental entities and other private sector 
                organizations, the parameters of a transition 
                adjustment program adaptable to the needs of 
                individual small business concerns;
                  (iii) by conducting appropriate programs to 
                inform the affected small business community 
                regarding the anticipated adverse impacts 
                identified under clause (i) and the economic 
                adjustment assistance available to such firms; 
                and
                  (iv) by assisting small business concerns to 
                develop and implement an individualized 
                transition business plan.
          * * * * * * *
          (M) in cooperation with the Department of Commerce, 
        the Administration and other relevant Federal agencies, 
        actively assisting rural small businesses in exporting 
        by identifying and developing potential export markets 
        for rural small businesses, facilitating export 
        transactions for rural small businesses, developing 
        linkages between United States' rural small businesses 
        and prescreened foreign buyers, assisting rural small 
        businesses to participate in international trade shows, 
        assisting rural small businesses in obtaining export 
        financing and developing marketing and production 
        strategies;
          (N) assisting rural small businesses--
                  (i) in developing marketing and production 
                strategies that will enable them to better 
                compete in the domestic market--
                  (ii) by providing technical assistance needed 
                by rural small businesses;
                  (iii) by making available managerial 
                assistance to rural small business concerns; 
                and
                  (iv) by providing information and assistance 
                in obtaining financing for business startups 
                and expansion;
          (O) in conjunction with the United States Travel and 
        Tourism Administration, assist rural small business in 
        developing the tourism potential of rural communities 
        by--
                  (i) identifying the cultural, historic, 
                recreational, and scenic resources of such 
                communities;
                  (ii) providing assistance to small businesses 
                in developing tourism marketing and promotion 
                plans relating to tourism in rural areas; and
                  (iii) assisting small business concerns to 
                obtain capital for starting or expanding 
                businesses primarily serving tourists;
          * * * * * * *
          (Q) providing information to small business concerns 
        regarding compliance with regulatory requirements; 
        [and]
          (R) developing informational publications, 
        establishing resource centers of reference materials, 
        and distributing compliance guides published under 
        section 312(a) of the Small Business Regulatory 
        Enforcement Fairness Act of 1996[.]; and
          (S) providing small business owners with access to a 
        wide variety of export-related information by 
        establishing on-line computer linkages between small 
        business development centers and an international trade 
        data information network with ties to the Export 
        Assistance Center program.
[A small]
  (4) A small business development center shall continue to 
upgrade and modify its services, as needed, in order to meet 
the changing and evolving needs of the small business 
community.
  [(4)] (5) In addition to the methods prescribed in section 
21(c)(2), a small business development center shall utilize and 
compensate as one of its resources qualified small business 
vendors, including but not limited to, private management 
consultants, private consulting engineers and private testing 
laboratories, to provide services as described in this 
subsection to small businesses on behalf of such small business 
development center.
  [(5)] (6) In any State (A) in which the Administration has 
not made a grant pursuant to paragraph (1) of subsection (a), 
or (B) in which no application for a grant has been made by a 
Small Business Development Center pursuant to paragraph (6) of 
such subsection within 60 days after the effective date of any 
grant under [paragraph] subsection (a)(1) to such center or the 
date the Administration notifies the grantee funded under 
subsection (a)(1) that funds are available for grant 
applications pursuant to subsection (a)(6), [which ever] 
whichever date occurs [last,,] last, the Administration may 
make grants to a non-profit entity in that State to carry out 
the activities specified in paragraph (6) of subsection (a). 
Any such applicants shall comply with the matching funds 
requirement of paragraph (4) of subsection (a). Such grants 
shall be effective for any fiscal year only to the extent 
provided in advance in appropriations Acts, and each State 
shall be limited to the pro rata share provisions of paragraph 
(6) of subsection (a).
    [(6)] (7) In performing the services identified in 
paragraph (3), the Small Business Development Centers shall 
work in close cooperation with the Administration's regional 
and local offices, the local small business community, and 
appropriate State and local agencies.
    [(7)] (8) The Associate Administrator for Small Business 
Development Centers, in consultation with the Small Business 
Development Centers, shall develop and implement an information 
sharing system. Subject to amounts approved in advance in 
appropriations Acts, the Administration may make grants or 
enter cooperative agreements with one or more centers to carry 
out the provisions of this paragraph. Said grants or 
cooperative agreements shall be awarded for periods of no more 
than five years duration. The matching funds provisions of 
subsection (a) shall not be applicable to grants or cooperative 
agreements under this paragraph. The system shall--
          (A) * * *
          * * * * * * *
    (l) Contract Authority.--The authority to enter into 
contracts shall be in effect for each fiscal year only to the 
extent and in the amounts as are provided in advance in 
appropriations Acts. After the administration has entered a 
contract, either as a grant or a cooperative agreement, with 
any applicant under this section, it shall not suspend, 
terminate, or fail to renew or extend any such contract unless 
the Administration provides the applicant with written 
notification setting forth the reasons therefore and affording 
the applicant an opportunity for a hearing, appeal, or other 
administrative proceeding under the provisions of chapter 5 of 
title 5, United States Code. If any contract under this section 
is not renewed or extended, award of the succeeding contract 
shall be made on a competitive basis.
  (m) Prohibition on Certain Fees.--A small business 
development center shall not impose or otherwise collect a fee 
or other compensationin connection with the provision of 
counseling services under this section.
          * * * * * * *
  [Sec. 29. (a) The Administration may provide financial 
assistance to private organizations to conduct 3-year 
demonstration projects for the benefit of small business 
concerns owned and controlled by women. The projects shall 
provide--
          [(1) financial assistance, including training and 
        counseling in how to apply for and secure business 
        credit and investment capital, preparing and presenting 
        financial statements, and managing cash flow and other 
        financial operations of a business concern;
          [(2) management assistance, including training and 
        counseling in how to plan, organize, staff, direct, and 
        control each major activity and function of a small 
        business concern; and
          [(3) marketing assistance, including training and 
        counseling in identifying and segmenting domestic and 
        international market opportunities, preparing and 
        executing marketing plans, developing pricing 
        strategies, locating contract opportunities, 
        negotiating contracts, and utilizing varying public 
        relations and advertising techniques.
  [(b)(1) As a condition of receiving financial assistance 
authorized by this section, the recipient organization shall 
agree to obtain, after its application has been approved and 
notice of award has been issued, cash contributions from non-
Federal sources as follows:
          [(A) If the project first receives its Federal 
        financial assistance prior to fiscal year 1993, an 
        annual amount that is not less than the amount of the 
        Federal financial assistance provided each year.
          [(B) If the project first receives Federal financial 
        assistance in fiscal year 1993, or thereafter, annual 
        amounts equal to--
                  [(i) in the first year, 1 non-Federal dollar 
                for each 2 Federal dollars;
                  [(ii) in the second year, 1 non-Federal 
                dollar for each Federal dollar; and
                  [(iii) in the third and final year, 2 non-
                Federal dollars for each Federal dollar.
  [(2) Up to one-half of the non-Federal matching assistance 
may be in the form of in-kind contributions which are budget 
line items only, including but not limited to office equipment 
and office space.
  [(3) The financial assistance authorized pursuant to this 
section may be made by grant, contract, or cooperative 
agreement and may contain such provision, as necessary, to 
provide for payments in lump sum or installments, and in 
advance or by way of reimbursement. The Administration may 
disburse up to 25 percent of each year's Federal share awarded 
to a recipient organization after notice of the award has been 
issued and before the non-Federal matching funds are obtained.
  [(4) If any recipient of assistance under this section fails 
to obtain the required non-Federal contribution during any year 
of any project, it shall not be eligible thereafter for advance 
disbursements under paragraph (3) during the remainder of that 
project, or for any other project for which it is or may be 
funded. In addition, prior to approving assistance to such 
organization for any other projects, the Administration shall 
specifically determine whether the Administration believes that 
the recipient will be able to obtain the requisite non-Federal 
funding and enter a written finding setting forth the reasons 
for making such determination.
  [(c) Each applicant for assistance under this section 
initially shall submit a 3-year plan on proposed fundraising 
and training activities, and may receive financial assistance 
under this section for a maximum of 3 years per site. The 
Administration shall evaluate and rank applicants in accordance 
with predetermined selection criteria that shall be stated in 
terms of relative importance. Such criteria and their relative 
importance shall be made publicly available and stated in each 
solicitation for applications made by the Administration. The 
criteria shall include--
          [(1) the experience of the applicant in conducting 
        programs or on-going efforts designed to impart or 
        upgrade the business skills of women business owners or 
        potential owners;
          [(2) the present ability of the applicant to commence 
        a demonstration project within a minimum amount of 
        time; and
          [(3) the ability of the applicant to provide training 
        and services to a representative number of women who 
        are both socially and economically disadvantaged.
  [(d) For purposes of this section, the term ``small business 
concern'' means a small business concern, either start-up or 
existing, owned and controlled by women, and--
          [(1) which is at least 51 percent owned by 1 or more 
        women; and
          [(2) the management and daily business operations of 
        which are controlled by 1 or more women.
  [(e) There are authorized to be appropriated $4,000,000 for 
each fiscal year to carry out the demonstration projects 
authorized by this section. Notwithstanding any other provision 
of law, the Administration may use such expedited acquisition 
methods as it deems appropriate to achieve the purposes of this 
section, except that it shall ensure that all eligible sources 
are provided a reasonable opportunity to submit proposals.
  [(f) The Administration shall prepare and transmit an annual 
report, beginning February 1, 1992, to the Committees on Small 
Business of the Senate and House of Representatives on the 
effectiveness of all demonstration projects conducted under the 
authority of this section. Such report shall provide 
information concerning--
          [(1) the number of individuals receiving assistance;
          [(2) the number of start-up business concerns formed;
          [(3) the gross receipts of assisted concerns;
          [(4) increases or decreases in profits of assisted 
        concerns; and
          [(5) the employment increases or decreases of 
        assisted concerns.
  [(g) The Administration shall not provide financial 
assistance under this section to any new project after October 
1, 1997, except that it may fund projects which commenced prior 
thereto.
  [(h) Office of Women's Business Ownership.--There is hereby 
established within the Administration an Office of Women's 
Business Ownership, which shall be responsible for the 
administration of the Administration's programs for the 
development of women's business enterprises, as such term is 
defined in section 408 of the Women's Business Ownership Act of 
1988. The Office of Women's Business Ownership shall be 
administered by an Assistant Administrator, who shall be 
appointed by the Administrator.]

SEC. 29. WOMEN'S BUSINESS CENTERS.

  (a) Definition.--For the purposes of this section the term 
``small business concern owned and controlled by women'', 
either startup or existing, includes any small business 
concern--
          (1) that is not less than 51 percent owned by one or 
        more women; and
          (2) the management and daily business operations of 
        which are controlled by one or more women.
  (b) Authority.--The Administration may provide financial 
assistance to private organizations to conduct 5-year projects 
for the benefit of small business concerns owned and controlled 
by women. The projects shall provide--
          (1) financial assistance, including training and 
        counseling in how to apply for and secure business 
        credit and investment capital, preparing and presenting 
        financial statements, and managing cash flow and other 
        financial operations of a business concern;
          (2) management assistance, including training and 
        counseling in how to plan, organize, staff, direct, and 
        control each major activity and function of a small 
        business concern; and
          (3) marketing assistance, including training and 
        counseling in identifying and segmenting domestic and 
        international market opportunities, preparing and 
        executing marketing plans, developing pricing 
        strategies, locating contract opportunities, 
        negotiating contracts, and utilizing varying public 
        relations and advertising techniques.
  (c) Conditions of Participation.--
          (1) Non-federal contributions.--As a condition of 
        receiving financial assistance authorized by this 
        section, the recipient organization shall agree to 
        obtain, after its application has been approved and 
        notice of award has been issued, cash contributions 
        from non-Federal sources as follows:
                  (A) In the first and second years, 1 non-
                Federal dollar for each 2 Federal dollars.
                  (B) In the third year, 1 non-Federal dollar 
                for each Federal dollar.
                  (C) In the fourth and fifth years, 2 non-
                Federal dollars for each Federal dollar.
          (2) Form of non-federal contributions.--Not more than 
        one-half of the non-Federal sector matching assistance 
        may be in the form of in-kind contributions which are 
        budget line items only, including but not limited to 
        office equipment and office space.
          (3) Form of federal contributions.--The financial 
        assistance authorized pursuant to this section may be 
        made by grant, contract, or cooperative agreement and 
        may contain such provision, as necessary, to provide 
        for payments in lump sum or installments, and in 
        advance or by way of reimbursement. The Administration 
        may disburse up to 25 percent of each year's Federal 
        share awarded to a recipient organization after notice 
        of the award has been issued and before the non-Federal 
        sector matching funds are obtained.
          (4) Failure to obtain private funding.--If any 
        recipient of assistance fails to obtain the required 
        non-Federal contribution during any project, it shall 
        not be eligible thereafter for advance disbursements 
        pursuant to paragraph (3) during the remainder of that 
        project, or for any other project for which it is or 
        may be funded by the Administration, and prior to 
        approving assistance to such organization for any other 
        projects, the Administration shall specifically 
        determine whether the Administration believes that the 
        recipient will be able to obtain the requisite non-
        Federal funding and enter a written finding setting 
        forth the reasons for making such determination.
  (d) Contract Authority.--A women's business center may enter 
into a contract with a Federal department or agency to provide 
specific assistance to women and other underserved small 
business concerns. Performance of such contract should not 
hinder the women's business centers in carrying out the terms 
of the grant received by the women's business centers from the 
Administration.
  (e) Submission of 5-Year Plan.--Each applicant organization 
initially shall submit a 5-year plan to the Administration on 
proposed fundraising and training activities, and a recipient 
organization may receive financial assistance under this 
program for a maximum of 5 years per women's business center.
  (f) Criteria.--The Administration shall evaluate and rank 
applicants in accordance with predetermined selection criteria 
that shall be stated in terms of relative importance. Such 
criteria and their relative importance shall be made publicly 
available and stated in each solicitation for applications made 
by the Administration. The criteria shall include--
          (1) the experience of the applicant in conducting 
        programs or ongoing efforts designed to impart or 
        upgrade the business skills of women business owners or 
        potential owners;
          (2) the present ability of the applicant to commence 
        a project within a minimum amount of time;
          (3) the ability of the applicant to provide training 
        and services to a representative number of women who 
        are both socially and economically disadvantaged; and
          (4) the location for the women's business center site 
        proposed by the applicant.
  (g) Office of Women's Business Ownership.--There is 
established within the Administration an Office of Women's 
Business Ownership, which shall be responsible for the 
administration of the Administration's programs for the 
development of women's business enterprises (as that term is 
defined in section 408 of the Women's Business Ownership Act of 
1988). The Office of Women's Business Ownership shall be 
administered by an Assistant Administrator, who shall be 
appointed by the Administrator.
  (h) Report.--The Administrator shall prepare and submit an 
annual report to the Committees on Small Business of the House 
ofRepresentatives and the Senate on the effectiveness of all 
projects conducted under the authority of this section. Such report 
shall provide information concerning--
          (1) the number of individuals receiving assistance;
          (2) the number of startup business concerns formed;
          (3) the gross receipts of assisted concerns;
          (4) increases or decreases in profits of assisted 
        concerns; and
          (5) the employment increases or decreases of assisted 
        concerns.
  (i) Authorization of Appropriations.--There are authorized to 
be appropriated $8,000,000 per year to carry out the projects 
authorized by this section of which for fiscal year 1998 not 
more than 10 percent may be used for administrative expenses 
related to the program. Amounts appropriated pursuant to this 
subsection for fiscal year 1999 and later are to be used 
exclusively for grant awards and not for costs incurred by the 
Administration for the management and administration of the 
program. Notwithstanding any other provision of law, the 
Administration may use such expedited acquisition methods as it 
deems appropriate, through the Assistant Administrator of the 
Office of Women's Business Ownership, to achieve the purposes 
of this section, except that the Administration shall ensure 
that all small business sources are provided a reasonable 
opportunity to submit proposals.
  (j) Assistant Administrator for the Office of Women's 
Business Ownership.--
          (1) Establishment.--There is established the position 
        of Assistant Administrator for the Office of Women's 
        Business Ownership (hereafter in this section referred 
        to as the ``Assistant Administrator'') who shall serve 
        without regard to the provisions of title 5, United 
        States Code, governing appointments in the competitive 
        service.
          (2) Responsibilities and duties.--
                  (A) Responsibilities.--The responsibilities 
                of the Assistant Administrator shall be to 
                administer the programs and services of the 
                Office of Women's Business Ownership 
                established to assist women entrepreneurs in 
                the areas of--
                          (i) starting and operating a small 
                        business;
                          (ii) development of management and 
                        technical skills;
                          (iii) seeking Federal procurement 
                        opportunities; and
                          (iv) increasing the opportunity for 
                        access to capital.
                  (B) Duties.--Duties of the position of the 
                Assistant Administrator shall include--
                          (i) administering and managing the 
                        Women's Business Centers program;
                          (ii) recommending the annual 
                        administrative and program budgets for 
                        the Office of Women's Business 
                        Ownership (including the budget for the 
                        Women's Business Centers);
                          (iii) establishing appropriate 
                        funding levels therefore;
                          (iv) reviewing the annual budgets 
                        submitted by each applicant for the 
                        Women's Business Center program;
                          (v) selecting applicants to 
                        participate in this program;
                          (vi) implementing this section;
                          (vii) maintaining a clearinghouse to 
                        provide for the dissemination and 
                        exchange of information between Women's 
                        Business Centers;
                          (viii) serving as the vice 
                        chairperson of the Interagency 
                        Committee on Women's Business 
                        Enterprise;
                          (ix) serving as liaison for the 
                        National Women's Business Council; and
                          (x) advising the Administrator on 
                        appointments to the Women's Business 
                        Council.
          (3) Consultation requirements.--In carrying out the 
        responsibilities and duties described in this 
        subsection, the Assistant Administrator shall confer 
        with and seek the advice of the Administration 
        officials in areas served by the Women's Business 
        Centers.
  (k) Program Examination.--
          (1) In general.--Not later than 180 days after the 
        date of enactment of this subsection, the 
        Administration shall develop and implement an annual 
        programmatic and financial examination of each Women's 
        Business Center established pursuant to this section.
          (2) Extension of contracts.--In extending or renewing 
        a contract with a Women's Business Center, the 
        Administration shall consider the results of the 
        examination conducted pursuant to paragraph (1).
  (l) Contract Authority.--The authority of the Administration 
to enter into contracts shall be in effect for each fiscal year 
only to the extent and in the amounts as are provided in 
advance in appropriations Acts. After the Administration has 
entered a contract, either as a grant or a cooperative 
agreement, with any applicant under this section, it shall not 
suspend, terminate, or fail to renew or extend any such 
contract unless the Administration provides the applicant with 
written notification setting forth the reasons therefore and 
affording the applicant an opportunity for a hearing, appeal, 
or other administrative proceeding under chapter 5 of title 5, 
United States Code.
          * * * * * * *
                              ----------                              


                 SMALL BUSINESS INVESTMENT ACT OF 1958

          * * * * * * *

             TITLE III--SMALL BUSINESS INVESTMENT COMPANIES

          organization of small business investment companies

  Sec. 301. (a) * * *
          * * * * * * *
  (d) Fees.--
          (1) In general.--The Administration may prescribe 
        fees to be paid by each applicant for a license to 
        operate as a small business investment company under 
        this Act.
          (2) Use of amounts.--Amounts collected pursuant to 
        this subsection shall be--
                  (A) deposited in the account for salaries and 
                expenses of the Administration; and
                  (B) available without further appropriation 
                solely to cover contracting and other 
                administrative costs related to licensing.
          * * * * * * *

                            borrowing power

  Sec. 303. (a) * * *
  (b) To encourage the formation and growth of small business 
investment companies the Administration is authorized when 
authorized in appropriation Acts, to purchase, or to guarantee 
the timely payment of all principal and interest as scheduled 
on, debentures or participating securities issued by such 
companies. Such purchases or guarantees may be made by the 
Administration on such terms and conditions as it deems 
appropriate, pursuant to regulations issued by the 
Administration. The full faith and credit of the United States 
is pledged to the payment of all amounts which may be required 
to be paid under any guarantee under this subsection. 
Debentures purchased or guaranteed by the Administration under 
this subsection shall be subordinate to any other debenture 
bonds, promissory notes, or other debts and obligations of such 
companies, unless the Administration in its exercise of 
reasonable investment prudence and in considering the financial 
soundness of such company determines otherwise. Such debentures 
may be issued for a term of not to exceed fifteen years and 
shall bear interest at a rate not less than a rate determined 
by the Secretary of the Treasury taking into consideration the 
current average market yield on outstanding marketable 
obligations of the United States with remaining periods to 
maturity comparable to the average maturities on such 
debentures, adjusted to the nearest one-eighth of 1 per centum, 
plus an additional charge of 1 percent per annum which shall be 
paid to and retained by the Administration. The debentures or 
participating securities shall also contain such other terms as 
the Administration may fix, and shall be subject to the 
following restrictions and limitations:
          (1) * * *
          (2) After March 31, 1993, the maximum amount of 
        outstanding leverage made available to a company 
        licensed under section 301(c) of this Act shall be 
        determined by the amount of such company's private 
        capital--
                  (A) * * *
          * * * * * * *
                  (D)(i) The dollar amounts in subparagraphs 
                (A), (B), and (C) shall be adjusted annually to 
                reflect increases in the Consumer Price Index 
                established by the Bureau of Labor Statistics 
                of the Department of Labor.
                  (ii) The initial adjustments made under this 
                subparagraph after the date of enactment of the 
                Small Business Reauthorization Act of 1997 
                shall reflect only increases from March 31, 
                1993.
          * * * * * * *
          [(4) In no event shall the aggregate amount of 
        outstanding leverage of any such company or companies 
        which are commonly controlled as determined by the 
        Administration exceed $90,000,000, unless the 
        Administration determines on a case by case basis to 
        permit a higher amount for companies under common 
        control and imposes such additional terms and 
        conditions as it determines appropriate to minimize the 
        risk of loss to the Administration in the event of 
        default.]
          (4) Maximum aggregate amount of leverage.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the aggregate amount of 
                outstanding leverage issued to any company or 
                companies that are commonly controlled (as 
                determined by the Administrator) may not exceed 
                $90,000,000, as adjusted annually for increases 
                in the Consumer Price Index.
                  (B) Exceptions.--The Administrator may, on a 
                case-by-case basis--
                          (i) approve an amount of leverage 
                        that exceeds the amount described in 
                        subparagraph (A) for companies under 
                        common control; and
                          (ii) impose such additional terms and 
                        conditions as the Administrator 
                        determines to be appropriate to 
                        minimize the risk of loss to the 
                        Administration in the event of default.
                  (C) Applicability of other provisions.--Any 
                leverage that is issued to a company or 
                companies commonly controlled in an amount that 
                exceeds $90,000,000, whether as a result of an 
                increase in the Consumer Price Index or a 
                decision of the Administrator, is subject to 
                subsection (d).
          * * * * * * *
  [(d) Requirement To Finance Smaller Enterprises.--The 
Administrator shall require each licensee, as a condition of 
approval of an application for leverage, to certify in writing 
that not less than 20 percent of the aggregate dollar amount of 
the financings of the licensee will be provided to smaller 
enterprises.]
  (d) Required Certifications.--
          (1) In general.--The Administrator shall require each 
        licensee, as a condition of approval of an application 
        for leverage, to certify in writing--
                  (A) for licensees with leverage less than or 
                equal to $90,000,000, that not less than 20 
                percent of the licensee's aggregate dollar 
                amount of financings will be provided to 
                smaller enterprises; and
                  (B) for licensees with leveragein excess of 
$90,000,000, that, in addition to satisfying the requirements of 
subparagraph (A), 100 percent of the licensee's aggregate dollar amount 
of financings made in whole or in part with leverage in excess of 
$90,000,000 will be provided to smaller enterprises as defined in 
section 103(12).
          (2) Multiple licensees.--Multiple licensees under 
        common control (as determined by the Administrator) 
        shall be considered to be a single licensee for 
        purposes of determining both the applicability of and 
        compliance with the investment percentage requirements 
        of this subsection.
          * * * * * * *
  (g) In order to encourage small business investment companies 
to provide equity capital to small businesses, the 
Administration is authorized to guarantee the payment of the 
redemption price and prioritized payments on participating 
securities issued by such companies which are licensed pursuant 
to section 301(c) of this Act, and a trust or a pool acting on 
behalf of the Administration is authorized to purchase such 
securities. Such guarantees and purchases shall be made on such 
terms and conditions as the Administration shall establish by 
regulation. For purposes of this section, (A) the term 
``participating securities'' includes preferred stock, a 
preferred limited partnership interest or a similar instrument, 
including debentures under the terms of which interest is 
payable only to the extent of earnings and (B) the term 
``prioritized payments'' includes dividends on stock, interest 
on qualifying debentures, or priority returns on preferred 
limited partnership interests which are paid only to the extent 
of earnings. Participating securities guaranteed under this 
subsection shall be subject to the following restrictions and 
limitations, in addition to such other restrictions and 
limitations as the Administration may determine:
          (1) * * *
          * * * * * * *
          (8) Notwithstanding paragraph (9), if a company is 
        operating as a limited partnership or as a subchapter s 
        corporation or an equivalent pass-through entity for 
        tax purposes and if there are no accumulated and unpaid 
        prioritized payments, the company may, for each 
        calendar quarter or once annually, as the company may 
        elect, make annual distributions to the partners, 
        shareholders, or members in amounts not greater than 
        each partner's, shareholder's, or member's maximum tax 
        liability. For purposes of this paragraph, the term 
        ``maximum tax liability'' means the amount of income 
        allocated to each partner, shareholder, or member 
        (including an allocation to the Administration as if it 
        were a taxpayer) for Federal income tax purposes in the 
        income tax return filed or to be filed by the company 
        with respect to the fiscal year of the company 
        immediately preceding such distribution, multiplied by 
        the highest combined marginal Federal and State income 
        tax rates for corporations or individuals, whichever is 
        higher, on each type of income included in such return. 
        For purposes of this paragraph, the term ``State income 
        tax'' means the income tax of the State where the 
        company's principal place of business is located for 
        the preceding quarter or year.
          * * * * * * *
  (i) Leverage Fee.--With respect to leverage granted by the 
Administration to a licensee, the Administration shall collect 
from the licensee a nonrefundable fee in an amount equal to 3 
percent of the face amount of leverage granted to the 
licensee[, payable upon the earlier of the date of entry into 
any commitment for such leverage or the date on which the 
leverage is drawn by the licensee] in the following manner: 1 
percent upon the date on which the Administration enters into 
any commitment for such leverage with the licensee, and the 
balance of 2 percent (or 3 percent in which case in which no 
commitment has been entered into by the Administration) on the 
date on which the leverage is drawn by the licensee.
          * * * * * * *

                    examinations and investigations

  Sec. 310. (a) * * *
  (b) Each small business investment company shall be subject 
to examinations made by direction of the Investment Division of 
the Administration, which may be conducted with the assistance 
of a private sector entity that has both the qualifications to 
conduct and expertise in conducting such examinations, and the 
cost of such examinations, including the compensation of the 
examiners, may in the discretion of the Administration be 
assessed against the company examined and when so assessed 
shall be paid by such company. Fees collected under this 
subsection shall be deposited in the account for salaries and 
expenses of the Administration, and shall be available without 
further appropriation solely to cover the costs of examinations 
and other program oversight activities. Every such company 
shall make such reports to the Administration at such times and 
in such form as the Administration may require; except that the 
Administration is authorized to exempt from making such reports 
any such company which is registered under the Investment 
Company Act of 1940 to the extent necessary to avoid 
duplication in reporting requirements.
          * * * * * * *

         periodic issuance of guarantees and trust certificates

  Sec. 320. The Administration shall issue guarantees under 
section 303 and trust certificates under section 319 at 
periodic intervals of not less than every [three months] 6 
months and shall do so at such shorter intervals as its deems 
appropriate, taking into consideration the amount and number of 
such guarantees or trust certificates.
          * * * * * * *

        TITLE V--LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES

          * * * * * * *

  LOANS FOR PLANT ACQUISITION, CONSTRUCTION, CONVERSION, AND EXPANSION

  Sec. 502. The Administration may, in addition to its 
authority under section 501, make loans for plant acquisition, 
construction, conversion or expansion, including the 
acquisition of land, to State and local development companies, 
and such loans may be made or effected either directly or in 
cooperation with banks or other lending institutions through 
agreements to participate on an immediate or deferred basis: 
Provided, however, That the foregoing powers shall be subject 
to the following restrictions and limitations:
          [(1) The proceeds of any such loan shall be used 
        solely by such borrower to assist an identifiable 
        small-business concern and for a sound business purpose 
        approved by the Administration.]
          (1) The proceeds of any such loan shall be used 
        solely by such borrower or borrowers to assist an 
        identifiable small-business or businesses and for a 
        sound business purpose approved by the Administration.
          * * * * * * *
          (3) Criteria for assistance.--
                  (A) In general.--Any development company 
                assisted under this section or section 503 of 
                this title must meet the criteria established 
                by the Administration, including the extent of 
                participation to be required or amount of paid-
                in capital to be used in each instance as is 
                determined to be reasonable by the 
                Administration.
          * * * * * * *
                  (D) Seller financing.--Seller provided 
                financing may be used to meet the requirements 
                of--
                          (i) paragraph (B), if the seller 
                        subordinates his interest in the 
                        property to the debenture guaranteed by 
                        the Administration; and
                          (ii) not to exceed 50 percent of the 
                        amounts required by paragraph (C).
                  (E) Collateralization.--The collateral 
                provided by the small business concern 
                generally shall include a subordinate lien 
                position on the property being financed under 
                this title, and is only one of the factors to 
                be evaluated in the credit determination. 
                Additional collateral shall be required only if 
                the Administration determines, on a case by 
                case basis, that additional security is 
                necessary to protect the interest of the 
                Government.
          * * * * * * *
          (5) Not to exceed 25 percent of any project may be 
        permanently leased by the assisted small business: 
        Provided,  That the assisted small business shall be 
        required to occupy and use not less than 55 percent of 
        the space in the project after the execution of any 
        leases authorized in this section.
          (6) Any loan authorized under this section shall not 
        be denied or delayed for approval by the Administration 
        due to concerns over preexisting environmental 
        conditions: Provided, That the development company 
        provides the Administration a letter issued by the 
        appropriate State or Federal environmental protection 
        agency specifically stating that the environmental 
        agency will not institute any legal proceedings against 
        the borrower or, in the event of a default, the 
        development company or the Administration based on the 
        preexisting environmental conditions: Provided further, 
        That the borrower shall agree to provide environmental 
        agencies access to the property for any reasonable and 
        necessary remediation efforts or inspections.

                     DEVELOPMENT COMPANY DEBENTURES

  Sec. 503. (a)(1) * * *
          * * * * * * *
  (b) No guarantee may be made with respect to any debenture 
under subsection (a) unless--
          (1) * * *
          * * * * * * *
          (7) with respect to each loan made from the proceeds 
        of such debenture, the Administration--
                  [(A) assesses and collects a fee, which shall 
                be payable by the borrower, in an amount equal 
                to the lesser of--
                          [(i) 0.9375 percent per year of the 
                        outstanding balance of the loan; or
                          [(ii) such percentage per year of the 
                        outstanding balance of the loan as the 
                        Administrator may determine to be 
                        necessary to reduce the cost (as that 
                        term is defined in section 502 of the 
                        Federal Credit Reform Act of 1990) to 
                        the Administration of purchasing and 
                        guaranteeing debentures under this Act 
                        to an amount that, taking into 
                        consideration any available 
                        appropriated funds, would permit the 
                        Administration to purchase or guarantee 
                        $2,000,000,000 of debentures in fiscal 
                        year 1997; and]
                  (A) assesses and collects a fee, which shall 
                be payable by the borrower, in an amount equal 
                to 0.9375 percent per year of the outstanding 
                balance of the loan; and
          * * * * * * *
    (d) Charges for Administration Expenses.--
          (1) Level of charges.--The Administration may impose 
        an additional charge for administrative expenses with 
        respect to each debenture for which payment of 
        principal and interest is guaranteed under subsection 
        (a).
          (2) Participation fee.--The Administration shall 
        collect a one-time fee in an amount [equal to 50 basis 
        points] equal to not more than 50 basis points, on the 
        total participation in any project of any institution 
        described in subclause (I), (II), or (III) of section 
        502(3)(B)(i). Such fee shall be imposed only when the 
        participation of the institution will occupy a senior 
        credit position to that of the development company. All 
        proceeds of the fee shall be used to offset the cost 
        (as that term is defined in section 502 of the Credit 
        Reform Act of 1990) to the Administration of making 
        guarantees under subsection (a). The amount of the fee 
        authorized herein shall be established annually by 
theAdministration in the minimal amount necessary to reduce the cost 
(as that term is defined in section 502 of the Federal Credit Reform 
Act of 1990) to the Administration of purchasing and guaranteeing 
debentures under this Act to zero.
          * * * * * * *
    (f) Effective Date.--The fees authorized by subsections (b) 
and (c) shall apply to financings approved by the 
Administration on or after October 1, 1996, but shall not apply 
to financings approved by the Administration on or after 
October 1, [1997] 2000.
          * * * * * * *

SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM.

  (a) Establishment.--On a pilot program basis, the 
Administration may establish a Premier Certified Lenders 
Program for [not more than 15] certified development companies 
that meet the requirements of subsection (b).
  (b) Requirements.--
          (1) Application.--To be eligible to participate in 
        the Premier Certified Lenders Program established under 
        subsection (a), a certified development company shall 
        prepare and submit to the Administration an application 
        at such time, in such manner, and containing such 
        information as the Administration may require.
          (2) Designation.--The Administration may designate a 
        certified development company as a premier certified 
        lender if such company--
                  [(A) has been an active participant in the 
                accredited lenders program during the 12-month 
                period preceding the date on which the company 
                submits an application under paragraph (1), 
                except that, prior to January 1, 1996, the 
                Administration may waive this requirement if 
                the company is qualified to participate in the 
                accredited lenders program;
                  [(B) has a history of submitting to the 
                Administration adequately analyzed debenture 
                guarantee application packages; and]
                  (A) is an active certified development 
                company in good standing and has been an active 
                participant in the accredited lenders program 
                during the entire 12-month period preceding the 
                date on which the company submits an 
                application under paragraph (1), except that 
                the Administration may waive this requirement 
                if the company is qualified to participate in 
                the accredited lenders program;
                  (B) has a history (i) of submitting to the 
                Administration adequately analyzed debenture 
                guarantee application packages and (ii) of 
                properly closing section 504 loans and 
                servicing its loan portfolio; and
          * * * * * * *
  [(c) Loss Reserve.--
          [(1) Establishment.--A company designated as a 
        premier certified lender shall establish a loss reserve 
        for financings approved pursuant to this section.
          [(2) Amount.--The amount of the loss reserve shall be 
        based upon the greater of--
                  [(A) the historic loss rate on debentures 
                issued by such company; or
                  [(B) 10 percent of the amount of the 
                company's exposure as determined under 
                subsection (b)(2)(C).
          [(3) Assets.--The loss reserve shall be comprised of 
        segregated assets of the company which shall be 
        securitized in favor of the Administration.
          [(4) Contributions.--The company shall make 
        contributions to the loss reserve in the following 
        amounts and at the following intervals:
                  [(A) 50 percent when a debenture is closed.
                  [(B) 25 percent not later than 1 year after a 
                debenture is closed.
                  [(C) 25 percent not later than 2 years after 
                a debenture is closed.]
  (c) Loss Reserve.--
          (1) Establishment.--A company designated as a premier 
        certified lender shall establish a loss reserve for 
        financing approved pursuant to this section.
          (2) Amount.--The amount of the loss reserve shall be 
        equal to 10 percent of the amount of the company's 
        exposure as determined under subsection (b)(2)(C).
          (3) Assets.--The loss reserve shall be comprised of 
        any combination of the following types of assets:
                  (A) segregated funds on deposit in an account 
                or accounts with a federally insured depository 
                institution or institutions selected by the 
                company, subject to a collateral assignment in 
                favor of, and in a format acceptable to, the 
                Administration; or
                  (B) irrevocable letter or letters of credit, 
                with a collateral assignment in favor of, and a 
                commercially reasonable format acceptable to, 
                the Administration.
          (4) Contributions.--The company shall make 
        contributions to the loss reserve, either cash or 
        letters of credit as provided above, in the following 
        amounts and at the following intervals:
                  (A) 50 percent when a debenture is closed;
                  (B) 25 percent additional not later than 1 
                year after a debenture is closed; and
                  (C) 25 percent additional not later than 2 
                years after a debenture is closed.
          (5) Replenishment.--If a loss has been sustained by 
        the Administration, any portion of the loss reserve, 
        and other funds provided by the premier company as 
        necessary, may be used to reimburse the Administration 
        for the company's 10 percent share of the loss as 
        provided in subsection (b)(2)(C). If the company 
        utilizes the reserve, within 30 days it shall replace 
        an equivalent amount of funds.
          (6) Disbursements.--The Administration shall allow 
        the certified development company to withdraw from the 
        loss reserve amounts attributable to any debenture 
        which has been repaid.
  (d) Loan Approval Authority.--
          (1) In general.--Notwithstanding section 503(b)(6), 
        and subject to such terms and conditions as the 
        Administration may establish, the Administration may 
        permit a company designated as a premier certified 
        lender under this section [to approve loans] to 
        approve, authorize, close, service, foreclose, 
        litigate, and liquidate loans that are funded with the 
        proceeds of a debenture issued by such company and may 
        authorize the guarantee of such debenture.
          (2) Scope of review.--The approval of a loan by a 
        premier certified lender shall be subject to final 
        approval as to eligibility of any guarantee by the 
        Administration pursuant to section 503(a), but such 
        final approval shall not include review of decisions by 
        the lender involving creditworthiness, loan closing, or 
        compliance with legal requirements imposed by law or 
        regulation.
  (e) Program Goals.--Certified development companies 
participating in this program shall establish a goal of 
processing 50 percent of their loan applications for section 
504 assistance pursuant to the premier certified lender program 
authorized in this section.
  [(e)] (f) Review.--After the issuance and sale of debentures 
under this section, the Administration, at intervals not 
greater than 12 months, shall review the financings made by 
each premier certified lender. The review shall include the 
lender's credit decisions and general compliance with the 
eligibility requirements for each financing approved under the 
program authorized under this section. The Administration shall 
consider the findings of the review in carrying out its 
responsibilities under subsection (f), but such review shall 
not affect any outstanding debenture guarantee.
  [(f)] (g) Suspension or Revocation.--The designation of a 
[State or local] certified development company as a premier 
certified lender may be suspended or revoked if the 
Administration determines that the company--
          (1) * * *
          * * * * * * *
  [(g)] (h) [Effect of Suspension or Designation] Effect of 
Suspension or Revocation.--A suspension or revocation under 
subsection [(f)] (g) shall not affect any outstanding debenture 
guarantee.
  [(h) Regulations.--Not later than 180 days after the date of 
enactment of this section, the Administration shall promulgate 
regulations to carry out this section.]
  (i) Regulations.--Not later than 90 days after the date of 
enactment of this section, the Administration shall promulgate 
regulations to carry out this section. Not later than 120 days 
after the date of enactment, the Administration shall issue 
program guidelines and implement the changes made herein.
  [(i)] (j) Report.--Not later than 1 year after the date of 
enactment of this Act, and annually thereafter, the 
Administration shall report to the Committees on Small Business 
of the Senate and the House of Representatives on the 
implementation of this section. Each report shall include--
          (1) * * *
          * * * * * * *
          (3) a comparison of the loss rate for premier 
        certified lenders to the loss rate for accredited and 
        [other lenders] other lenders, specifically comparing 
        default rates and recovery rates on liquidations; and
          * * * * * * *
                              ----------                              


  SMALL BUSINESS ADMINISTRATION REAUTHORIZATION AND AMENDMENTS ACT OF 
                                  1994

          * * * * * * *

                TITLE II--FINANCIAL ASSISTANCE PROGRAMS

          * * * * * * *

SEC. 217. PREMIER CERTIFIED LENDERS PROGRAM.

  (a) * * *
  [(b) Repeal.--Effective on October 1, 1997, section 508 of 
the Small Business Investment Act of 1958, as added by 
subsection (a), is repealed.]

             TITLE III--SIZE STANDARDS AND BOND GUARANTEES

SEC. 304. PILOT PROGRAM FOR VERY SMALL BUSINESS CONCERNS.

          * * * * * * *
  (i) Program Term.--Implementation of the program shall begin 
not later than August 30, 1995. The program authorized by this 
section shall expire on September 30, [1998] 2000.
          * * * * * * *
                              ----------                              


                 WOMEN'S BUSINESS OWNERSHIP ACT OF 1988

          TITLE IV--DEVELOPMENT OF WOMEN'S BUSINESS ENTERPRISE

          * * * * * * *

SEC. 404. REPORTS FROM THE INTERAGENCY COMMITTEE.

  Not later than September 30, 1995, and annually thereafter, 
the Interagency Committee shall transmit, through the Small 
Business Administration, to the President and to the Committees 
on Small Business of the Senate and the House of 
Representatives, a report containing--
          [(1) any recommendations of the Council and any 
        comments of the Interagency Committee thereon;]
          [(2)] (1) a detailed description of the activities of 
        the Interagency Committee, including a status report on 
        the progress of the Interagency Committee in meeting 
        its responsibilities and duties under section 402(a);
          [(3)] (2) the findings and conclusions of the 
        Interagency Committee; and
          [(4)] (3) the Interagency Committee's recommendations 
        for such legislation and administrative actions as the 
        Interagency Committee considers appropriate to promote 
        the development of small business concerns owned and 
        controlled by women.
          * * * * * * *

SEC. 406. DUTIES OF THE COUNCIL.

  (a) * * *
          * * * * * * *
  (c) Recommendations.--The Council shall make annual 
recommendations for consideration by the Interagency Committee. 
The Council shall also provide reports and make such other 
recommendations as it deems appropriate to the Interagency 
Committee, to the President, to the Administrator (through the 
Assistant Administrator for the Office of Women's Business 
Ownership), and to the Committees on Small Business of the 
Senate and the House of Representatives.
  (d) Other Duties.--The Council shall--
          (1) * * *
          * * * * * * *
          (4) develop and promote new initiatives, policies, 
        programs, and plans designed to foster women's business 
        enterprise; [and]
          (5) advise and consult with the Interagency Committee 
        in the design of a comprehensive plan for a joint 
        public-private sector effort to facilitate growth and 
        development of women's business enterprise[.]; and
          (6) submit to the President and to the Committee on 
        Small Business of the Senate and the Committee on Small 
        Business of the House of Representatives, an annual 
        report containing--
                  (A) a detailed description of the activities 
                of the council, including a status report on 
                the Council's progress toward meeting its 
                duties outlined in subsections (a) and (d) of 
                section 406;
                  (B) the findings, conclusions, and 
                recommendations of the Council; and
                  (C) the Council's recommendations for such 
                legislation and administrative actions as the 
                Council considers appropriate to promote the 
                development of small business concerns owned 
                and controlled by women.
  (e) Submission of Reports.--The annual report required by 
subsection (d) shall be submitted not later than 90 days after 
the end of each fiscal year.
          * * * * * * *

SEC. 407. MEMBERSHIP OF THE COUNCIL.

  (a) Chairperson.--Not later than 45 days after the date of 
enactment of the Small Business Administration Reauthorization 
[and Amendments Act of 1994] Act of 1997, the President shall 
appoint an individual to serve as chairperson of the Council, 
in consultation with the Administrator. The chairperson of the 
Council shall be a prominent business woman who is qualified to 
head the Council by virtue of her education, training, and 
experience.
  (b) Other Members.--Not later than 60 days after the date of 
enactment of the Small Business Administration Reauthorization 
[and Amendments Act of 1994] Act of 1997, the Administrator 
shall, after receiving the recommendations of the Chair and the 
Ranking Member of the Minority of the Committees on Small 
Business of the House of Representatives and the Senate, 
appoint, in consultation with the Assistant Administrator of 
the Office of Women's Business Ownership and the chairperson of 
the Council appointed under subsection (a), [9] 14 members of 
the Council, of whom--
          (1) [2] 4 shall be--
                  (A) owners of small businesses, as such term 
                is defined in section 3 of the Small Business 
                Act; and
                  (B) members of the same political party as 
                the President;
          (2) [2] 4 shall--
                  (A) be owners of small businesses, as such 
                term is defined in section 3 of the Small 
                Business Act; and
                  (B) not be members of the same political 
                party as the President; [and]
          (3) [5] 6 shall be representatives of [national] 
        women's business organizations.
          * * * * * * *

SEC. 409. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for each of fiscal 
years [1995 through 1997] 1998 through 2000, to carry out this 
title, [$350,000] $600,000, of which $200,000 shall be for 
grants for research of women's procurement or finance issues.
          * * * * * * *
                              ----------                              

    SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM ACT OF 1988

    TITLE VII--SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM

                    PART A--SHORT TITLE AND FINDINGS

SEC. 701. SHORT TITLE.

  This title may be cited as the ``Small Business 
Competitiveness Demonstration Program Act of 1988''.
          * * * * * * *

                     PART B--DEMONSTRATION PROGRAM

SEC. 711. SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM.

  (a) * * *
          * * * * * * *
  (c) Program Term.--The Program shall commence on January 1, 
1989[, and terminate on September 30, 1997].
          * * * * * * *

SEC. 712. ENHANCED SMALL BUSINESS PARTICIPATION GOALS.

  (a) * * *
          * * * * * * *
  (d) Monitoring Agency Performance.--
          [(1) Participating agencies shall monitor the 
        attainment of their small business participation goals 
        on a quarterly basis. The initial review by each 
        participating agency shall be completed not later than 
        June 30, 1989, based on the data for the period January 
        1 through March 31, 1989. Thereafter, each review shall 
        be based on the aggregate of contract award data from 
        the 4 fiscal year quarters preceding the date of the 
        review for which data is available.]
          (1) Participating agencies shall monitor the 
        attainment of their small business participation goals 
        on an annual basis. An annual review by each 
        participating agency shall be completed not later than 
        January 31 of each year, based on the data for the 
        preceding fiscal year, from October 1 through September 
        30.
          * * * * * * *

SEC. 717. DESIGNATED INDUSTRY GROUPS.

  (a) In General.--For the purposes of participation in this 
Program, the designated industry groups are--
          (1) construction (excluding dredging);
          (2) refuse systems and related services;
          (3) architectural and engineering services (including 
        surveying and mapping); and
          (4) non-nuclear ship repair.
  (b) Construction.--Construction shall include contract awards 
assigned one of the [standard industrial classification codes] 
North American Industrial Classification Codes that comprise--
          (1) Major Group 15 (Building Construction--General 
        Contractors and Operative Builders);
          (2) Major Group 16 (Heavy Construction Other Than 
        Building Construction--Contractors) (excluding 
        dredging); and
          (3) Major Group 17 (Construction--Special Trade 
        Contractors).
  (c) Refuse.--Refuse systems and related services shall 
include contract awards assigned to [standard industrial 
classification code] North American Industrial Classification 
Code 4212 or 4953.
  (d) Architectural and Engineering.--Architectural and 
engineering services (including surveying and mapping) shall 
include contract awards assigned to [standard industrial 
classification code] North American Industrial Classification 
Code 7389 (if identified as pertaining to mapping services), 
8711, 8712, or 8713, and such contract was awarded under the 
qualification-based selection procedures required by title IX 
of the Federal Property and Administrative Services Act of 1949 
(40 U.S.C. 541 et seq.).
  (e) Alternative Data.--In the event that [standard industrial 
classification codes] North American Industrial Classification 
Codes are not assigned to individual contract awards reported 
to the Federal Procurement Data Center by January 1, 1989, the 
Program may be conducted on the basis of the product and 
service codes used to report data pertaining to such contract 
awards, related to the maximum practicable extent to the 
[standard industrial classification code] North American 
Industrial Classification Code for the service being provided 
by the contractor.
          * * * * * * *

         PART C--ALTERNATIVE PROGRAM FOR CLOTHING AND TEXTILES

          * * * * * * *

SEC. 722. EXPANDING SMALL BUSINESS PARTICIPATION IN DREDGING.

  (a) Establishment.--The Secretary of the Army (hereafter in 
this section referred to as the ``Secretary'') shall conduct a 
program to expand the participation of small business concerns 
and emerging small business concerns in contracting 
opportunities for dredging solicited on or after January 1, 
1989, commencing on October 1, 1989 [and terminating on 
September 30, 1997].
          * * * * * * *
                              ----------                              


 SECTION 207 OF THE SMALL BUSINESS ADMINISTRATION REAUTHORIZATION AND 
                         AMENDMENT ACT OF 1988

SEC. 207. SUNSET.

  The provisions contained in section 411(a)(3) of the Small 
Business Investment Act of 1958 (15 U.S.C. 694b(a)(3)) shall 
cease to be effective after September 30, [1997] 2000.
          * * * * * * *
                              ----------                              


 SECTION 401 OF THE SMALL BUSINESS ADMINISTRATION REAUTHORIZATION AND 
                         AMENDMENTS ACT OF 1994

SEC. 401. SUNSET ON COSPONSORED TRAINING.

  (a) In General.--
          (1) * * *
          (2) Effective date.--Paragraph (1) shall take effect 
        on September 30, [1997] 2000.
          * * * * * * *

                                
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