[House Report 106-784]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-784

======================================================================



 
                        BusinessLINC ACT OF 2000

                                _______
                                

 July 25, 2000.--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. 4464]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Small Business, to whom was referred the 
bill (H.R. 4464) to amend the Small Business Act to authorize 
the Administrator of the Small Business Administration to make 
grants and to enter into cooperative agreements to encourage 
the expansion of business-to-business relationships and the 
provision of certain information, 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.

  This Act may be cited as the ``BusinessLINC Act of 2000''.

SEC. 2. AUTHORIZATION.

  Section 8 of the Small Business Act (15 U.S.C. 637) is amended by 
adding at the end the following:
  ``(m) BusinessLINC Grants and Cooperative Agreements.--
          ``(1) In general.--In accordance with this subsection, the 
        Administrator may make grants to and enter into cooperative 
        agreements with any coalition of private entities, public 
        entities, or any combination of private and public entities--
                  ``(A) to expand business-to-business relationships 
                between large and small businesses; and
                  ``(B) to provide businesses, directly or indirectly, 
                with online information and a database of companies 
                that are interested in mentor-protege programs or 
                community-based, state-wide, or local business 
                development programs.
          ``(2) Matching requirement.--Subject to subparagraph (B), the 
        Administrator may make a grant to a coalition under paragraph 
        (1) only if the coalition provides for activities described in 
        paragraph (1)(A) or (1)(B) an amount, either in kind or in 
        cash, equal to the grant amount.
          ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $6,600,000, to 
        remain available until expended, for each of fiscal years 2001 
        through 2003.''.

                                Purpose

    The purpose of H.R. 4464, BusinessLINC, is to promote 
business growth in inner cities and economically distressed 
rural areas by matching large and small firms into business-to-
business partnering and mentoring relationships. H.R. 4464 will 
accomplish this by providing seed funding to third party 
entities such as local Chambers of Commerce to promote such 
relationships. In addition to seed funding, such entities will 
also receive funds for technical assistance programs to small 
businesses to supplement the mentor-protege relationships 
established as a result of BusinessLINC.
    BusinessLINC will help small businesses by providing online 
information and a database of companies that are interested in 
mentor-protege programs.
    Grants may be made to a coalition/combination of private 
and public entities only if the coalition/combination provides 
an amount, either in kind or in cash, equal to the grant amount 
for the purposes above.

                          Need for Legislation

    Despite the unprecedented economic prosperity we are 
experiencing in this country, there are several areas of the 
country that have still not achieved parity. These areas are 
primarily inner cities, rural areas, and Native American 
communities. BusinessLINC will enable business opportunities 
for small businesses who would otherwise have no access to 
outside larger markets. While these small businesses have 
strong potential, they are located in communities where 
corporate America would not necessarily look. BusinessLINC will 
break that barrier. When the BusinessLINC model has been 
applied in the past, small businesses have seen growth as much 
as 45 percent. With this assistance, the local community will 
be charting its own path to recovery. The ``LINC'' in 
BusinessLINC stands for ``Learning, Information, Networking, 
and Collaboration.''

                            Committee Action

    The Committee on Small Business held no separate hearings 
on H.R. 4464. However, during the Committee's hearing on the 
Reauthorization of the Small Business Administration programs 
and the Agency's Fiscal Year 2001 Budget Request held at 10:00 
a.m. on March 1, 2000, SBA Administrator Alvarez outlined the 
Agency's position on BusinessLINC. At the time of the 
testimony, BusinessLINC had been linked with the New Markets 
Initiative (NMI) and, although the SBA was appropriated $1.5 
million for BusinessLINC in FY 2000, they were unable to spend 
the money as NMI had not yet passed. So, essentially, the money 
appropriated for BusinessLINC was, at that time, not 
authorized.
    The Administrator's written statement included reference to 
SBA's request for $6.6 million for the BusinessLINC Program. 
Administrator Alvarez went on to discuss, in her written 
statement, the purpose of BusinessLINC which she stated 
``encourages large businesses to work with small business 
owners as technical advisors and mentors--especially in 
America's rural areas and inner cities.'' Finally, the written 
statement of the Administrator stated that ``$1.25 million for 
reservation-based BusinessLINC'' would be made available to 
``tap into the entrepreneurial drive within the Native American 
community.''
    The Administrator stated that BusinessLINC would involve 
funding to ``not-for-profit'' or other economic development 
organizations, such as Chambers of Commerce, to facilitate 
mentoring between large and small businesses. The SBA had been 
working with the National Chamber of Commerce to create mentor 
networking that would effectively ``mediate and create'' 
mentor-protege relationships between large and small 
businesses, with the sole focus being on small businesses 
located in inner cities and rural areas.

                       CONSIDERATION OF H.R. 4464

    At 10:20 a.m. on May 25, 2000, the Committee on Small 
Business met to consider H.R. 4464. Following a brief opening 
statement by the Chairman, the Ranking Democrat, and Mr. Davis, 
the author of the bill and Ranking Democrat on the Empowerment 
Subcommittee, H.R. 4454 was declared open for amendment.
    Mr. Davis offered an amendment in the nature of a 
substitute to H.R. 4454 which was accepted by unanimous voice 
vote. Chairman Talent then moved the bill be reported, and at 
10:30 a.m., by unanimous voice vote, a quorum being present, 
the Committee passed H.R. 4464, as amended, and ordered it 
reported.

                      Section-by-Section Analysis


Section 1. Short Title

    Designates the bill as the ``BusinessLINC Act of 2000.''

Section 2. Authorization

    This Section amends the Small Business Act by adding a new 
paragraph (m), ``BusinessLINC grants and cooperative 
agreements.''
    Paragraph (1) allows the Administrator to make grants or 
enter into cooperative agreements with any coalition/
combination of private and/or public entities to (a) promote 
business-to-business relationships between large and small 
businesses and (b) to provide online information and a database 
of companies that are interested in mentor-protege programs.
    It is the opinion of the Committee that private and/or 
public entities eligible for grants should be limited to 
Chambers of Commerce and other not-for-profit business 
organizations. The Committee also intends that grant money be 
provided to large businesses. Further, if a grant is made to a 
combination of entities, one entity must be designated as the 
lead grantee.
    It is further the opinion of the Committee that promotion 
of business-to-business relationships between large and small 
businesses referenced in paragraph (a) above should include the 
facilitation of such relationships as mentor-protege, prime/
subcontractor, and teaming.
    The Committee intends that an element to be considered by 
the Administrator when evaluating a grant proposal, shall be 
the training of small businesses or ``proteges.'' An additional 
evaluation element intended by the Committee shall be 
measurable goals to be achieved through the businss-to-business 
partnerships.
    The Committee further intends that the online database 
referenced in paragraph (b) above, should make use of the SBA's 
current PRO-Net database to the greatest extent practicable. 
The Committee is concerned that online privacy issues should 
also be addressed by the SBA in the implementation of the 
databases. Further, it is the Committee's opinion that the 
databases should be vigilantly maintained by the SBA to ensure 
that only firms eligible to be mentors should be included in 
the mentor database, and only those firms eligible to serve as 
intermediaries should be included in the intermediary database.
    Paragraph (2) specifies that the Administrator may make 
grants as long as the coalition/combination of public and/or 
private entities provides an amount, either in kind or in cash, 
equal to the grant amount for the purposes delineated in 
paragraph (1) above.
    The Committee is well aware that it may be difficult for 
some entities to raise their entire match during the 
application stage. Those entities that are unable to raise the 
required match, but have submitted to the Administrator a 
reasonable plan to meet the requirement, may be granted a 
conditional approval from the Administrator and be allowed to 
draw one dollar of federal matching funds for every dollar of 
private funds raised. This conditional approval shall be made 
with the expectation that the required funding commitments will 
be obtained within two years of the conditional approval.
    The Committee believes that it is important to give 
entities the flexibility to obtain the required private 
operational assistance funds, however, from a safety and 
soundness standpoint, federal funds should not be placed at 
greater risk than private capital. Paragraph (3) specifies the 
authorization for the program for fiscal years 2001 and 2003. 
This amount shall be $6,600,000 for each of the three fiscal 
years.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 7(d) of rule XIII of the Rules of the 
House of Representatives the Committee includes the following 
cost estimate supplied by the Congressional Budget Office 
pursuant to section 403 of the Budget Act of 1974 in lieu of a 
committee cost estimate. The Congressional Budget Office 
estimate is included in this report pursuant to clause 
2(l)(3)(C) of rule XI.

H.R. 4464--A bill to amend the Small Business Act to authorize the 
        Administrator of the Small Business Administration to make 
        grants and to enter into cooperative agreements to encourage 
        the expansion of business-to-business relationships and the 
        provision of certain information

    Summary: H.R. 4464 would reauthorize the BusinessLINC 
(learning, information, networking, and collaboration) program, 
through which the Small Business Administration (SBA) makes 
grants and enters into cooperative agreements to expand 
relationships between large and small businesses. The bill 
would authorize the SBA to make grants to coalitions of private 
and public entities, provided that such entities match the 
grant with an equal amount of cash or in-kind contributions. 
Finally, the bill would authorize the appropriation of $6.6 
million for each of fiscal years 2001, 2002, and 2003 for 
BusinessLINC grants.
    Based on the historical spending patterns of this program 
and other programs administered by the SBA, CBO estimates that 
implementing H.R. 4464 would cost about $19 million over the 
2001-2005 period. H.R. 4464 would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures would not apply.
    H.R. 4464 contains no private-sector or intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs to state and local governments would be the result of 
complying with new grant conditions and would be voluntary.
    Estimated Cost to the Federal Government: For the purpose 
of this estimate, CBO assumes that H.R. 4464 will be enacted 
during fiscal year 2000, and that amounts authorized in the 
bill will be provided each year. The estimated budgetary impact 
on H.R. 4464 is shown in the following table. The costs of this 
legislation fall within budget function 370 (commerce and 
housing credit).

------------------------------------------------------------------------
                                By fiscal year, in millions of dollars--
                               -----------------------------------------
                                 2000   2001   2002   2003   2004   2005
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION

BusinessLINC Spending Under
 Current Law:
    Budget Authority \1\......      2      0      0      0      0      0
    Estimated Outlays.........      1      1      0      0      0      0
Proposed Changes:
    Authorization Level.......      0      7      7      7      0      0
    Estimated Outlays.........      0      3      6      6      3      1
BusinessLINC Spending Under
 H.R. 4464:
    Authorization Level \1\...      2      7      7      7      0      0
    Estimated Outlays.........      1      4      6      6      3      1
------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year.

    Pay-as-You-Go Considerations: None.
    Intergovernmental and Private-Sector Impact: H.R. 4464 
contains no intergovernmental mandates as defined in UMRA. The 
bill would authorize the Administrator of the SBA to make 
grants and enter into cooperative agreements with any coalition 
of entities, including public entries, that further certain 
goals of the BusinessLINC program and provide 100 percent 
matching funds. Participation in the program is voluntary, and 
thus any costs incurred by participating state and local 
governments would be voluntary.
    Estimate Prepared by: Federal Costs, Mark Hadley; Impact on 
State, Local, and Tribal Governments, Shelley Finlayson; Impact 
on the Private Sector, Patrice Gordon.
    Estimate Approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                           Oversight Findings

    In accordance with clause 4(c)(2) of rule X of the Rules of 
the House of Representatives, the Committee states that no 
oversight findings or recommendations have been made by the 
Committee on Government Reform with respect to the subject 
matter contained in H.R. 4454. In accordance with clause 
(2)(b)(1) of rule X 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. 4454 are incorporated into the 
descriptive portions of this report.

                 Statement of Constitutional Authority

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, section 8, clause 18, of the 
Constitution of the United States.

                    Congressional Accountability Act

    The Committee finds that H.R. 4454 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act (P.L. 104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                  SECTION 8 OF THE SMALL BUSINESS ACT

  Sec. 8. (a) * * *

           *       *       *       *       *       *       *

  (m) BusinessLINC Grants and Cooperative Agreements.--
          (1) In general.--In accordance with this subsection, 
        the Administrator may make grants to and enter into 
        cooperative agreements with any coalition of private 
        entities, public entities, or any combination of 
        private and public entities--
                  (A) to expand business-to-business 
                relationships between large and small 
                businesses; and
                  (B) to provide businesses, directly or 
                indirectly, with online information and a 
                database of companies that are interested in 
                mentor-protege programs or community-based, 
                state-wide, or local business development 
                programs.
          (2) Matching requirement.--Subject to subparagraph 
        (B), the Administrator may make a grant to a coalition 
        under paragraph (1) only if the coalition provides for 
        activities described in paragraph (1)(A) or (1)(B) an 
        amount, either in kind or in cash, equal to the grant 
        amount.
          (3) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $6,600,000, to remain available until 
        expended, for each of fiscal years 2001 through 2003.

                                
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