[House Report 110-193]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-193

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



 
          SBA ENTREPRENEURIAL DEVELOPMENT PROGRAMS ACT OF 2007

                                _______
                                

 June 15, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Velazquez, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2359]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Small Business, to whom was referred the 
bill (H.R. 2359) to reauthorize programs to assist small 
business concerns, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose of the Bill and Summary.................................2
  II. Background and Need for Legislation.............................2
 III. Hearings........................................................5
  IV. Committee Consideration.........................................5
   V. Committee Votes.................................................5
  VI. Section-by-Section Analysis of H.R. 2359........................5
 VII. Congressional Budget Office Cost Estimate.......................9
VIII. Committee Estimate of Costs....................................11
  IX. Oversight Findings.............................................11
   X. Statement of Constitutional Authority..........................11
  XI. Compliance With Public Law 104-4...............................11
 XII. Congressional Accountability Act...............................11
XIII. Federal Advisory Committee Statement...........................11
 XIV. Statement of No Earmarks.......................................12
  XV. Performance Goals and Objectives...............................12
 XVI. Changes in Existing Law Made by the Bill, as Reported..........12

                         I. Purpose and Summary

    The SBA Entrepreneurial Development Programs Act of 2007, 
H.R. 2359, amends key sections of the Small Business Act to 
assist small business owners gain the technical expertise 
associated with starting and running a successful business. 
Providing entrepreneurial development (ED) assistance is one of 
SBA's main agency-wide objectives and the most critical for 
those Americans seeking to start a new enterprise, requiring 
direction with their need for start-up capital, business plans, 
and other basic management skills.\1\ Over time, new conditions 
in local and national economies have altered both the types of 
opportunities available to entrepreneurs as well as their needs 
when competing in the marketplace. Entrepreneurs increasingly 
represent a broader cross section of the population and operate 
in a different economic environment from their predecessors. 
H.R. 2359 ensures that SBA entrepreneurial development programs 
reflect the current composition of small business owners and 
have the flexibility to address new needs and conditions. The 
legislation is expected to increase entrepreneurs' access to a 
comprehensive set of counseling and training tools necessary 
for operating within the challenges of the modern economy and 
therefore contribute towards leveling the playing field for all 
businesses.
---------------------------------------------------------------------------
    \1\ PL 85-536, Section 2(a).
---------------------------------------------------------------------------
    The bill enhances entrepreneurial development services at 
the agency in three main areas: operational changes, additional 
mandates, and the representation of entrepreneurial composition 
in program providers. Title I establishes provisions to 
maintain high levels of service through SBA administered Small 
Business Development Centers (SBDCs), which are outreach 
centers providing entrepreneurial development assistance across 
the country. Title II expands the role of SBDCs to assist 
entrepreneurs operating in the new economic environment, adding 
to their enumerated functions under the Small Business Act. 
Title III addresses SBA's SCORE program, which utilizes an 
expansive network of volunteers, most of whom are former 
executives, to provide vital business assistance to 
entrepreneurs. The program is modified to reflect the growing 
numbers of entrepreneurs from socially and economically 
disadvantaged backgrounds by requiring administrators to 
recruit and maintain a higher representation of volunteers with 
diverse backgrounds.
    The Committee does not expect that these changes will 
ensure the survival of all small business endeavors. However, 
as technical assistance resources become more convenient, 
affordable, and appropriate to the current environment, the 
bill increases the capacity for entrepreneurs to develop 
sustainable enterprises.

                II. Background and Need for Legislation


            SBA GENERAL ENTREPRENEURIAL DEVELOPMENT PROGRAMS

    Since SBA's inception in 1953, the agency has increasingly 
committed its resources to providing entrepreneurial 
development assistance. The agency complements its programs 
that increase access to affordable capital for self employment 
activities by assisting entrepreneurs develop business plans 
and strategies to operate successful enterprises.
    The SBDC program is the cornerstone of the SBA's 
entrepreneurial program. Congress established the program in 
1980 to foster economic development by providing management, 
technical, and research assistance to current and prospective 
small business owners. It has assisted to millions of 
entrepreneurs across the United States. This program has been 
extremely efficient in using allocated federal funds to provide 
necessary technical training and mentoring.
    SBA administers a significant portion of their ED services 
through this program. The agency distributes funds for the 
operation of the program to each state through a lead 
organization that sponsors the SBDC and manages the program. 
The lead organization coordinates program services offered to 
small businesses through a network of subcenters and satellite 
locations in each state. Subcenters are located at colleges, 
universities, community colleges, vocational schools, chambers 
of commerce, and economic development corporations. This 
structure ensures that services are coordinated within the 
state, based upon availability of resources and needs. State 
coordination has also supported economic development strategies 
to support the growth of regional industries.
    The centers offer one-stop assistance by providing a wide 
variety of information and guidance in central and easily 
accessible branch locations. There are now 63 lead SBDCs--with 
a network of more than 1100 service locations. The program is a 
cooperative effort of the private sector, the educational 
community and federal, state, and local governments. It 
enhances economic development by serving as the backbone in 
many communities and helping thousands of interested 
entrepreneurs get started.
    Another component of the SBA's ED resources is the Service 
Corps of Retired Executives (SCORE) program. Established in 
1964, the SCORE program utilizes an expansive network of 
volunteers, most of whom are former executives, to provide 
vital business assistance to entrepreneurs. These recruits 
provide business mentorship through counseling and online 
assistance to help entrepreneurs who are in the early phases of 
initiating or expanding their enterprises. SCORE services are 
administered through chapters across the country. They 
administer services independently from the SBA, which has 
minimal oversight over how they serve clients and recruit 
volunteers in each area.
    Most of the ED programs were designed many years ago and 
therefore reflect the existing needs and governing approaches 
of the time. These programs were designed to serve a 
particularly segment of the entrepreneurial force through 
customized assistance. They were designed to help their clients 
by addressing a comprehensive range of issues that are 
typically faced by entrepreneurs starting or expanding a small 
business.

               EMERGING ENTREPRENEURIAL DEVELOPMENT NEEDS

    The entrepreneurs of today are dramatically different than 
those even from a decade ago, which has created a new set of 
needs for their success. One of the most notable changes in the 
entrepreneurial sector is the new composition of small business 
owners. Socially-economically disadvantaged and women owned 
firms are a rapidly expanding, successful sector in the US 
economy. The number of women owned firms has grown at nearly 
double the rate of all firms. Entrepreneurs from socially and 
economically disadvantaged sectors currently own over four 
million, or nearly one quarter of all US firms. Women 
entrepreneurs from socially-economically disadvantaged 
backgrounds have increased at twice the rate of their 
counterparts and six times the rate of all US firms.
    Small businesses of today also face unprecedented economic 
conditions which have made it more difficult for firms of this 
size to survive. Production has become more expensive for most 
small businesses, as the price for nearly all inputs have 
skyrocketed. The top concern currently facing entrepreneurs is 
the cost of energy, particular gasoline, which is currently 
topping $3/gallon. Rising energy prices greatly affect 
entrepreneurs, impeding their growth, limiting their ability to 
hire new employees, and stifling innovation. These prices have 
risen along with many other operational inputs, such as health 
care. Consequently, due to small businesses' limited profit 
margins as production costs are driven up, they become less 
competitive with their counterparts.
    As the domestic market has become increasingly challenging 
for small businesses, the US economy has almost completely 
integrated with the world's markets. This has resulted in 
depressed prices for most goods/services as countries across 
the globe compete by lowering production costs. Given 
entrepreneurial operations' smaller economies of scale, they 
are at a severe disadvantage in a system of open borders. 
Therefore, businesses of today must constantly innovate their 
products and processes to stay at the cutting edge in order to 
compete successfully in domestic and global markets.
    The regulatory burden has also increased for small 
businesses. Local, national, and international rules have 
significantly grown over the last several decades and they have 
been increasingly designed with a higher degree of complexity. 
Consequently, large businesses are at an advantage complying 
with regulations given their extra resources available to 
acquire information and process regulatory requirements, while 
small businesses utilize a higher proportion of their 
expenditures complying with the rules. Consequently, businesses 
today require affordable access to information and counseling 
to address the new regulatory structure.
    The Gulf Coast hurricanes in August of 2005 demonstrated 
that small businesses today are not only highly susceptible to 
major disruptions due to disasters but that they also need 
immediate assistance if they are to recover. Most of the 
businesses in the region impacted by the storm required capital 
and counseling assistance to address a range of needs from the 
physical redevelopment of property to retaining a workforce. 
The lack of assistance from most levels of government, 
including the SBA, indicates that there is a need to 
significantly alter disaster recovery programs.
    As the needs of entrepreneurs change in response to new 
conditions in the marketplace, it is critical that the ED 
programs are modernized. As H.R. 2359 creates additional 
resources and program goals, it will ensure that the emerging 
needs of entrepreneurs are addressed. Further, as it updates 
existing programs, the legislation builds on the expertise and 
experiences gained through the implementation of ED programs at 
the agency.

                             III. Hearings

    On May 16, 2007, the Committee on Small Business held a 
hearing on the entrepreneurial development needs of small 
business owners. The hearing focused on the challenges they 
face in today's economy and on recommendations for improvements 
to SBA's entrepreneurial development programs. In addition, a 
significant portion of the Committee's previous hearings on the 
President's annual budget proposals have centered on the 
importance of the agency's entrepreneurial development 
programs. The hearings have looked at the sufficiency of the 
SBA's personnel and budget requests to address the technical 
assistance needs of small businesses. Finally, the Committee 
has held numerous hearings each year on general 
entrepreneurship development issues, to examine obstacles and 
identify solutions for small business owners with diverse 
socio-economic as well as geographic backgrounds attempting to 
build sustainable enterprises.

                      IV. Committee Consideration

    The Committee on Small Business met in open session on May 
23, 2007 to consider H.R. 2359.

                           V. Committee Votes

    The Committee on Small Business ordered H.R. 2359 reported 
to the House, as amended by an amendment in the nature of 
substitute, by a voice vote at 10:45 a.m.

VI. Section-by-Section Analysis of the Entrepreneurial Development Bill


Section 1. Short title; table of contents

    This section includes a short title and the table of 
contents.

                                TITLE I

Section 101. Small Business Development Centers operational changes

    Provisions in the Small Business Act are restructured so 
that the statute conforms to the current operation of the Small 
Business Development Center (SBDC) program. The Small Business 
Administration (SBA) is required to provide grants only to 
universities with academic accreditations. The Committee 
intends to strengthen eligibility criteria for SBDC grantees by 
requiring new award recipients to be institutions of higher 
education that are fully accredited.
    Grant recipients are authorized as equal partners in the 
contract negotiation process. The Committee is intending to 
ensure that SBDC grant recipients have the capacity to 
meaningfully participate in the negotiations to determine the 
programs/services they will provide as well as the finalized 
contract agreement with the agency. SBA interference is 
prohibited in the hiring practices of the SBDC grant recipient 
host. This section intends to clarify that the agency does not 
have veto authority over the grant recipient's hiring 
practices. However, the hiring process must be based upon fair, 
openly competitive and non-discriminatory hiring practices.
    The agency is restricted from utilizing program resources 
for administration expenses to examine center operations. The 
Committee intends that the SBDC Program Office and the SBA 
should budget for administrative costs through the agency's 
annual fiscal proposals.
    Privacy protection requirements are expanded to apply to 
the content of SBDC consultation sessions. Client 
confidentiality protections established in the 2004 SBA 
Reauthorization Act are strengthened to also cover the context 
of the consulting engagement.
    SBDCs are defined in this section and the Committee intends 
to make clear in the statute the distinction between Lead and 
Sub-Centers, given their different legal meanings. Lead centers 
are limited to one per state to decrease competition. This 
provision specifies that there must be a single SBDC grantee in 
each state, grandfathering the grantees in California and 
Texas, until they propose to consolidate.
    Exemptions are allowed in the event of a federally-
designated natural or human-caused disaster to the cap on non-
matching portability grants. The Committee intends this 
provision will prevent the historically lengthy and 
disconnected process for grant proposals responding to one 
disaster, such as the occurrence in the Gulf Coast.
    SBDCs are required to compile and report aggregate data on 
high-speed Internet access. The Committee expects the SBDC to 
report the data, on a quarterly basis to the Administrator of 
the SBA sorted by the nine-digit ZIP code of the small 
business. The SBA will publish the data quarterly on its Web 
site.

                                TITLE II

    Each section in this title contains language directing the 
agency on how to fund the new grant initiatives discussed 
below. The Committee expects SBDC's core program funding to 
remain separate from appropriations for the new grant 
initiatives established in H.R. 2359. Further, it is expected 
that the SBDC core program be funded at least at its current 
authorization level.
    Full funding is critical to ensure service providers have 
the capacity to fulfill the program's mandate, especially as 
demand for entrepreneurial development assistance has 
increased. However, it is the Committee's judgment that this 
program has been inadequately funded for several years. Despite 
the success of the SBDC program, the FY 2008 budget submitted 
by the administration provides funding $87 million, roughly $37 
million below their authorized level. The effect of this cut, 
on top of the effects of inflation over the past six years, 
means that many centers across the United States will have lost 
up to twenty percent of funding since 2001.
    By creating additional authorizations for the grant 
initiatives, the legislation is intended to facilitate the 
development of specialized services for interested and eligible 
centers. However, the grants have not been designed to 
substitute for the comprehensive set of services that SBDCs are 
required to provide in their core program.
    To ensure that centers have adequate resources to continue 
providing mandated services, the Committee obtained 
confirmation from the Small Business Administration that the 
agency expected the new grant initiatives to be allocated 
separately from core program funding. In a letter dated May 18, 
2007, C. Edward Rowe, III, SBA Assistant Administrator of 
Congressional and Legislative Affairs responded to the House 
Small Business Committee Chairwoman's request for the agency's 
interpretation of the funding distribution in the provision 
with the following: ``. . . this proposed language would 
maintain the main SBDC Program baseline funding separate from 
that of any other enacted SBDC related grant initiative 
programs. Any other enacted SBDC related grant initiative 
programs would require other funding sources.''

Section 201. Capital access initiative

    Permits SBDCs to help entrepreneurs gain access to an 
expanded set of capital options and achieve the best outcomes 
in raising capital for their individual circumstances. SBDCs 
will also assist entrepreneurs in processing loan applications 
and obtaining private equity investment. The Committee expects 
the SBDCs to utilize these grants to assist small businesses in 
at least four areas: capital education, assessment of company 
potential, preparedness to request capital, and submission.

Section 202. Disaster recovery program

    Expands disaster recovery role for SBDCs to help them meet 
small businesses needs. SBDCs will assist entrepreneurs in the 
event of a natural disaster by serving as first responders in 
local communities. SBDCs will aid small firms in the 
preparation of disaster applications and coordinate the federal 
response for small business disaster victims. The Committee 
expects that SBDCs will also leverage the extensive state and 
local community contacts and provide immediate access to added 
local and state-based resources. Further, part of the grant 
awards can be used by SBDCs to prepare small businesses to 
protect their enterprises from devastation to natural and 
human-made disasters.

Section 203. Innovation and competitiveness services initiative

    SBDCs have the capability to provide training and 
facilitate the qualification of other centers to become for 
technical accreditation designations. This initiative enables 
SBDCs to become ``Technology Centers,'' develop best practices 
for the use and creation of advanced products, and market these 
technologies to manufacturers. The Committee expects grants to 
also be used to support the development of regional technology 
industries through centers' engagement of significant local 
assets and resources; development of a locally based but common 
themed marketing program; and aggressive outreach focusing upon 
business advisement and training.

Section 204. Mature entrepreneur assistance program

    Targets services to retiring baby boomers seeking self-
employment opportunities and to those transitioning out of 
their businesses. SBDCs develop classes and consulting 
processes for mature business owners interested in business 
transition services. The Committee expects grants to be used by 
SBDCs to help retiring business owners develop transition 
plans, to identify acquisition opportunities, and to assist in 
securing self employment for retiring Americans.

Section 205. Small business sustainability initiative

    To meet small businesses' new need for sustainability as 
the supply of affordable energy decreases, SBDCs will help 
small businesses become sustainable through energy efficiency, 
green building, environmental performance, and clean technology 
entrepreneurial assistance. SBDCs grants can also be used to 
evaluate the cost benefits of efficiency measures, to secure 
financing to achieve energy efficiency, and to empower 
management to implement energy efficiency projects.

Section 206. Affordable health insurance initiative

    Resources are directed to help small business owners facing 
escalating costs for their employees. SBDCs will assist 
entrepreneurs with identifying and securing affordable health 
insurance for their business and employees. As many states have 
started tackling the issue of small business health care 
coverage, these grantees will also work with state officials to 
inform small firms about these options. Grants may also be used 
by centers to work with insurers to try and secure discount 
rates for the small companies that elect to use that insurance.

Section 207. National regulatory assistance initiative

    Establishes an initiative to help small businesses comply 
with local, federal, and international regulations. Eligible 
SBDCs will collect information on regulations that impact small 
businesses and on existing resources available to help 
entrepreneurs comply. The Committee expects that grantees 
provide confidential assistance and may contact relevant agency 
to determine requirements.

Section 208. Report

    The agency is required to evaluate the performance of these 
initiatives 18 months following the enactment of the 
legislation. The Committee expects the report to include 
information on lessons learned from the implementation of the 
new initiatives as well as an evaluation of their performance 
meeting agency objectives.

                               TITLE III

Section 301. Repeal of Active Corporation of Executives

    The Small Business Act is updated by deleting inclusion of 
the ``Active Corps of Executives'' (ACE) program in the SCORE 
statute, due to the defunct nature of this entity since 1995.

Section 302. Expansion of volunteer representation

    SCORE administrators are required to actively recruit and 
maintain volunteer mentors in order to increasingly reflect 
socially- and economically-disadvantaged sectors of the 
population, while reporting on the status of this effort to the 
SBA every year.
    The Committee expects SCORE administrators to include in 
the annual reports the total socially-economically 
disadvantaged volunteers as a proportion of the demographic 
composition of each community as well as the length of time 
each volunteer has provided service to the program. It is also 
expected that SBA provides a copy of the annual report to the 
Committee.

Section 303. Benchmark reports

    SCORE administrators are required to establish benchmarks 
reviewed by the SBA regarding service delivery, such as the 
success of assisted entrepreneurs. Administrators are also 
required to submit annual reports to the agency on the 
organization's performance meeting these objectives.
    Program administrators should include in the report data on 
the geographic distribution of businesses assisted as well as 
gaps in services according to location. Other benchmarks should 
include coordination efforts with public-private entities and 
details on fundraising ventures, including all grants awarded. 
It is also expected that SBA provides a copy of the annual 
report to the Committee.

             VII. Congressional Budget Office Cost Estimate

                                                     June 15, 2007.
Hon. Nydia M. Velazquez, Chairwoman,
Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2359, the SBA 
Entrepreneurial Development Programs Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them.
    The CBO staff contact is Susan Willie.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 2359--SBA Entrepreneurial Development Programs Act of 2007

    Summary: H.R. 2359 would authorize the Small Business 
Administration (SBA) to award grants to Small Business 
Development Centers (SBDCs) to expand the scope of assistance 
and services provided to owners of small businesses. Further, 
the bill would require SBA to increase the proportion of 
participants in the Service Corps of Retired Executives (SCORE) 
who are from socially or economically disadvantaged 
backgrounds. Finally, the bill would amend provisions of 
current law that affect the operation of SBDCs. Assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing H.R. 2359 would cost $8 million in 2008 and $321 
million over the 2008-2012 period. Enacting the bill would not 
affect direct spending or revenues.
    H.R. 2359 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would benefit state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2359 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--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Additional Grants:
    Estimated Authorization          101     105     106     110     112
     Level......................
    Estimated Outlays...........       5      36      78      91     103
Additional Administrative Costs:
    Estimated Authorization            4       1       1       1       1
     Level......................
    Estimated Outlays...........       3       2       1       1       1
Total Changes:
    Estimated Authorization          105     106     107     111     113
     Level......................
    Estimated Outlays...........       8      38      79      92     104
------------------------------------------------------------------------

    Basis of estimate: H.R. 2359 would authorize SBA to award a 
number of grants to SBDCs to expand the range of services 
provided to owners of small businesses. CBO estimates that 
implementing the new grant provisions in H.R. 2359 would cost 
about $5 million in 2008 and $313 million over the 2008-2012 
period, assuming appropriation of the necessary amounts. There 
are 63 SBDCs that would be eligible to apply for the new 
grants; CBO assumes that approximately 90 percent would be 
awarded grants as allowed under the bill. Accordingly, the 
costs over the 2008-2012 period break down as follows:
           $53 million for grants up to $300,000 each 
        to develop programs to educate and assist small 
        business owners or potential owners in obtaining 
        private capital;
           $9 million for grants that would allow SBDCs 
        to provide support in the event of a disaster;
           $89 million for grants up to $500,000 each 
        to target assistance and services to increase the 
        competitiveness of small manufacturers;
           $62 million for grants up to $350,000 each 
        to carry out a program to encourage older individuals 
        to consider becoming business owners and provide 
        assistance should they choose to do so;
          $52 million for grants up to $300,000 each to 
        promote investment in energy-efficient equipment and 
        technology;
          $36 million for grants to assist small 
        business owners to identify and purchase affordable 
        health insurance for their employees; and
          $12 million for grants to assist small 
        business owners in complying with federal regulations.
    In addition, the bill would require SBA to create a 
repository for information describing regulatory compliance 
activities undertaken by SBDCs that receive regulatory 
compliance grants. SBA also would be required to establish a 
Web site that provides access to compliance information that 
pertains to specific industries. Based on information from SBA, 
CBO estimates that developing and maintaining such a Web site 
would cost about $3 million over the 2008-2012 period.
    Based on information from SBA, we assume that the agency 
would require an additional 12 full-time equivalent positions 
to award the grants and track performance, at a cost of about 
$1 million per year over the 2008-2012 period.
    Other provisions of the bill would amend the nature of the 
relationship between SBA and SBDCs and any association that may 
represent them. For example, the bill would limit SBA's 
involvement in hiring SBDC staff and require mutual agreement 
between SBA and SBDCs on programs that would be offered. The 
bill also would change the makeup of mentors participating in 
the SCORE program by increasing the number of participants from 
socially and economically disadvantaged backgrounds. CBO 
estimates that implementing those provisions would not have a 
significant effect on spending subject to appropriation.
    Intergovernmental and private-sector impact: H.R. 2359 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. By authorizing grants to SBDCs, the bill would 
benefit state, local, and tribal governments. Any costs those 
entities incur would result from complying with conditions of 
federal assistance.
    Estimate prepared by: Federal costs: Susan Willie. Impact 
on state, local, and tribal governments: Elizabeth Cove. Impact 
on the private sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   VIII. Committee Estimate of Costs

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2359. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

                         IX. Oversight Findings

    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. 2359 are incorporated 
into the descriptive portions of this report.

                X. 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.

                  XI. Compliance With Public Law 104-4

    H.R. 2359 contains no unfunded mandates.

                 XII. Congressional Accountability Act

    H.R. 2359 does not relate to the terms and conditions of 
employment or access to public services or accommodations with 
the meaning of section 102(b)(3) of P.L. 104-1.

               XIII. Federal Advisory Committee Statement

    H.R. 2359 does not establish or authorize the establishment 
of any new advisory committees.

                     XIV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 2359 does not 
contain any congressional earmarks, limited tax benefits, or 
limited tariff benefits as defined in clause 9(d), 9(e), or 
9(f) of rule XXI.

                  XV. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    H.R. 2359 includes a number of provisions designed to 
update and to improve the Small Business Administration's 
entrepreneurial development assistance programs.

       XVI. 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 (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. 8. (a) * * *
  (b) It shall also be the duty of the Administration and it is 
hereby empowered, whenever it determines such action is 
necessary--
          (1)(A) * * *
          (B) To establish, conduct, and publicize, and to 
        recruit, select, and train volunteers for (and to enter 
        into contracts, grants, or cooperative agreements 
        therefor), volunteer programs, including a Service 
        Corps of Retired Executives (SCORE) [and an Active 
        Corps of Executive (ACE)] for the purposes of section 
        8(b)(1)(A) of this Act. To facilitate the 
        implementation of such volunteer programs the 
        Administration shall maintain at its headquarters and 
        pay the salaries, benefits, and expenses of a volunteer 
        and professional staff to manage and oversee the 
        program. Any such payments made pursuant to this 
        subparagraph shall be effective only to such extent or 
        in such amounts as are provided in advance in 
        appropriation Acts. Notwithstanding any other provision 
        of law, SCORE may solicit cash and in-kind 
        contributions from the private sector to be used to 
        carry out its functions under this Act, and may use 
        payments made by the Administration pursuant to this 
        subparagraph for such solicitation and the management 
        of the contributions received.

           *       *       *       *       *       *       *

          (H) The Service Corps of Retired Executives (SCORE) 
        established under subparagraph (B) shall carry out a 
        plan to increase the proportion of mentors who are from 
        socially or economically disadvantaged backgrounds. 
        SCORE shall, on an annual basis, report to the 
        Administrator on the implementation of this 
        subparagraph.
          (I) The Service Corps of Retired Executives (SCORE) 
        established under subparagraph (B) shall, in 
        consultation with the Administrator, establish 
        benchmarks for use in evaluating the performance of its 
        activities and the performance of its volunteers. The 
        benchmarks shall include benchmarks relating to the 
        demographic characteristics and the geographic 
        characteristics of persons assisted by SCORE, 
        benchmarks relating to the hours spent mentoring by 
        volunteers, and benchmarks relating to the performance 
        of the persons assisted by SCORE. SCORE shall, on an 
        annual basis, report to the Administrator on the extent 
        to which the benchmarks established under this 
        subparagraph are being attained.

           *       *       *       *       *       *       *

  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 accredited institution of higher 
education or a women's business center operating pursuant to 
section 29 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 accredited 
institutions of higher education and women's business centers 
operating pursuant to section 29 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. As used in this paragraph, the term ``accredited 
institution of higher education'' means an institution that is 
accredited as described in section 101(a)(5) of the Higher 
Education Act of 1965 (20 U.S.C. 1001(a)(5)).

           *       *       *       *       *       *       *

  (3) The Small Business Development Center Program shall be 
under the general management and oversight of the 
Administration for the delivery of programs and services to the 
small business community. Such programs and services shall be 
jointly developed, negotiated, and mutually 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) Small business development centers are authorized 
        to form an association to pursue matters of common 
        concern. If more than a majority of the small business 
        development centers which are operating pursuant to 
        agreements with the Administration are members of such 
        an association, the Administration is authorized and 
        directed to recognize the existence and activities of 
        such an association and to consult with it and develop 
        documents (i) announcing the annual scope of activities 
        pursuant to this section, (ii) requesting proposals to 
        deliver assistance as provided in this section and 
        (iii) governing the general operations and 
        administration of the Small Business Development Center 
        Program, specifically including the development of 
        regulations and a uniform negotiated mutually agreed to 
        cooperative agreement for use on an annual basis when 
        entering into individual negotiated agreements with 
        small business development centers.

           *       *       *       *       *       *       *

  (4) Small Business Development Center Program Level.--
          (A)  * * *

           *       *       *       *       *       *       *

          (C) Funding formula.--
                  (i)  * * *

           *       *       *       *       *       *       *

                  (v) Use of amounts.--
                          [(I) In general.--Of the amounts made 
                        available in any fiscal year to carry 
                        out this section--
                                  [(aa) not more than $500,000 
                                may be used by the 
                                Administration to pay expenses 
                                enumerated in subparagraphs (B) 
                                through (D) of section 
                                20(a)(1); and
                                  [(bb) not more than $500,000 
                                may be used by the 
                                Administration to pay the 
                                examination expenses enumerated 
                                in section 20(a)(1)(E).]
                          (I) In general.--Of the amounts made 
                        available in any fiscal year to carry 
                        out this section, not more than 
                        $500,000 may be used by the 
                        Administration to pay expenses 
                        enumerated in subparagraphs (B) through 
                        (D) of section 20(a)(1).

           *       *       *       *       *       *       *

                  (viii) Limitation.--From the funds 
                appropriated pursuant to clause (vii), the 
                Administration shall reserve not less than 
                $1,000,000 in each fiscal year to develop 
                portable assistance for startup and 
                sustainability non-matching grant programs to 
                be conducted by eligible small business 
                development centers in communities that are 
                economically challenged as a result of a 
                business or government facility down sizing or 
                closing, which has resulted in the loss of jobs 
                or small business instability. A non-matching 
                grant under this clause shall not exceed 
                $100,000, and shall be used for small business 
                development center personnel expenses and 
                related small business programs and services. 
                However, in the event of a disaster, the dollar 
                limitation in the preceding sentence does not 
                apply.

           *       *       *       *       *       *       *

  (7) Privacy requirements.--
          (A) In general.--A small business development center, 
        consortium of small business development centers, or 
        contractor or agent of a small business development 
        center may not disclose the name, address, or telephone 
        number of any individual or small business concern 
        receiving assistance under this section, or the content 
        of any consultation with such an individual or small 
        business concern, without the consent of such 
        individual or small business concern, unless--
                  (i)  * * *
  (8) Definition.--For the purposes of this section, a Small 
Business Development Center is--
          (A) the entity selected by the Administrator to 
        receive funds pursuant to the funding formula set forth 
        in paragraph (4); or
          (B) the site at which the services specified by this 
        section are delivered.
  (b)(1)  * * *

           *       *       *       *       *       *       *

  (4) Limitation on distribution to Small Business Development 
Centers.--
          (A) In general.--Except as provided in this 
        paragraph, the Administrator shall not distribute funds 
        to a Small Business Development Center if the State in 
        which the Small Business Development Center is located 
        is served by more than one Small Business Development 
        Center. For purposes of this limitation, the term Small 
        Business Development Center shall have the meaning set 
        forth in subsection (a)(8).
          (B) Unavailability exception.--The Administrator may 
        distribute funds to two Small Business Development 
        Centers, as that term is defined in subsection 
        (a)(8)(A), if no applicant has applied to serve the 
        entire State. Except as provided in subparagraph (C), 
        the Administrator is prohibited from distributing funds 
        to more than two Small Business Development Centers.
          (C) Grandfather clause.--The limitations in this 
        paragraph shall not apply for any State in which more 
        than one Small Business Development Center received 
        funding prior to January 1, 2007.
  (c)(1)  * * *
  (2) A small business development center shall provide 
services as close as possible to small businesses by providing 
extension services and utilizing satellite locations when 
necessary. The facilities and staff of each Small Business 
Development Center shall be located in such places as to 
provide maximum accessibility and benefits to the small 
businesses which the center is intended to serve. To the extent 
possible, it also shall make full use of other Federal and 
State government programs that are concerned with aiding small 
business. A small business development center shall have--
          (A) a full-time staff, the hiring of which is carried 
        out by the center without interference from, and 
        without influence by, any officer or employee of the 
        Administration,, including a full-time director who 
        shall have the authority to make expenditures under the 
        center's budget and who shall manage the program 
        activities;

           *       *       *       *       *       *       *

          (9) Reporting of broadband service purchases.--
                  (A) In general.--Pursuant to policies adopted 
                by the Administrator, Small Business 
                Development Centers shall report information to 
                the Administrator by nine-digit zip code--
                          (i) whether the individual seeking 
                        counseling purchases broadband service 
                        at the address reported to the Small 
                        Business Development Center;
                          (ii) if the reported address is 
                        different than the business address, 
                        whether broadband service is purchased 
                        at the business address; and
                          (iii) if broadband service is not 
                        purchased at the addresses set forth in 
                        clauses (i) and (ii).
                  (B) Reporting.--The Administrator shall 
                aggregate data by nine-digit zip code reporting 
                such information to the Federal Communications 
                Commission and the National Telecommunication 
                and Information Administration.

           *       *       *       *       *       *       *

  (n) Capital Access Initiative.--
          (1) In general.--A lead Small Business Development 
        Center may apply for an additional grant to carry out a 
        capital access initiative program.
          (2) Elements of program.--Under a program under 
        paragraph (1), the Center shall--
                  (A) provide capital education by creating a 
                model template to assist individuals in 
                preparing for a broad range of capital 
                offerings;
                  (B) assess company potential by conducting 
                company assessments, which shall include, at a 
                minimum, risk analysis and mapping of best 
                capital opportunities;
                  (C) prepare individuals to request capital by 
                advising on the various aspects of such a 
                request, including the business plan, the 
                financials, the projections, the presentation, 
                and the approach;
                  (D) provide education on the rules of access 
                engagement, organizations involved and 
                available, and approaches that maximize 
                successful requests; and
                  (E) deliver ongoing assistance once capital 
                is secured.
          (3) Support.--In carrying out this subsection, the 
        Administrator shall obtain support from national 
        associations and from organizations such as regional 
        development groups and ``angel'' groups founded by 
        Small Business Development Centers.
          (4) Minimum amount.--Each grant under this subsection 
        shall be for at least $100,000.
          (5) Maximum amount.--No applicant may receive more 
        than $300,000 in grants under this subsection in a 
        fiscal year.
          (6) Funding.--Subject to amounts approved in advance 
        in appropriations Acts and separate from amounts 
        approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out this subsection.
  (o) Disaster Recovery Program.--
          (1) In general.--A lead Small Business Development 
        Center may apply for an additional grant to carry out a 
        disaster recovery program.
          (2) Elements of program.--Under a program under 
        paragraph (1), the Center shall--
                  (A) serve, in partnership with the 
                Administration's disaster center response 
                teams, as a locally based resource for first 
                responders by--
                          (i) rotating personnel into a 
                        disaster area for immediate response on 
                        the ground, processing applications, 
                        developing an evaluating recovery 
                        business models, and distributing 
                        accurate information; and
                          (ii) providing continued interaction, 
                        over time, with businesses that are 
                        recovering from a disaster;
                  (B) participate in ongoing national disaster 
                training;
                  (C) develop specific State-level disaster 
                response plans; and
                  (D) form a network with other Centers to 
                serve as a platform for sharing disaster 
                expertise, training, and human resources.
          (3) Minimum amount.--Each grant under this subsection 
        shall be for at least $50,000.
          (4) Funding.--Subject to amounts approved in advance 
        in appropriations Acts and separate from amounts 
        approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out this subsection.
  (p) Innovation and Competitiveness Services to Manufacturers 
Initiative.--
          (1) In general.--A lead Small Business Development 
        Center may apply for an additional grant to carry out 
        an innovation and competitiveness services to 
        manufacturers initiative program.
          (2) Elements of program.--Under a program under 
        paragraph (1), the Center shall--
                  (A) participate in national training 
                institutes to provide training to all programs 
                of the Center to assist those programs to 
                qualify for technology accreditation 
                designation;
                  (B) develop, disseminate, and regularly 
                update best practices ``toolkits'' that include 
                best practices for resources, training 
                programs, consultative approaches, and support 
                services.
                  (C) recruit and engage significant local 
                assets and resources (such as colleges, 
                universities, economic development 
                organizations, and trade associations) in each 
                State;
                  (D) launch nationally a locally based but 
                common themed marketing program, targeted at 
                small manufacturers;
                  (E) undertake aggressive outreach to increase 
                the levels of innovation and competitiveness, 
                focusing on business advisement and training 
                for manufacturers;
                  (F) provide ongoing professional development 
                to personnel of the Center and of other 
                resource partners; and
                  (G) develop and report performance, using 
                common evaluation metrics and outcome 
                measurements.
          (3) Minimum amount.--Each grant under this subsection 
        shall be for at least $150,000.
          (4) Maximum amount.--A grant under this subsection 
        may not exceed $500,000.
          (5) Funding.--Subject to amounts approved in advance 
        in appropriations Acts and separate from amounts 
        approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out this subsection.
  (q) Mature Entrepreneurs Assistance Program.--
          (1) In general.--A lead Small Business Development 
        Center may apply for an additional grant to carry out a 
        mature entrepreneurs assistance program.
          (2) Elements of program.--Under a program under 
        paragraph (1), the Center shall--
                  (A) provide advisors and training resources 
                to assist business owners in recognizing and 
                developing transition plans, including by--
                          (i) providing training and 
                        educational screening processes on the 
                        potential benefits and hazards of self-
                        employment; and
                          (ii) developing courses, consulting 
                        processes, and highly targeted resource 
                        materials, and deploying them 
                        throughout the Small Business 
                        Development Center network;
                  (B) link business owners with additional 
                resource service providers to prepare 
                businesses for transition, including by 
                increasing partnership opportunities, 
                particularly with the Service Corps of Retired 
                Executives (SCORE);
                  (C) identify business opportunities for those 
                interested in acquiring businesses;
                  (D) help individuals identify and acquire 
                financing for acquisition; and
                  (E) provide continuing support once 
                transition has occurred.
          (3) Minimum amount.--Each grant under this subsection 
        shall be for at least $175,000.
          (4) Maximum amount.--A grant under this subsection 
        may not exceed $350,000.
          (5) Funding.--Subject to amounts approved in advance 
        in appropriations Acts and separate from amounts 
        approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out this subsection.
  (r) Small Business Sustainability Initiative.--
          (1) In general.--A lead Small Business Development 
        Center may apply for an additional grant to carry out a 
        small business sustainability initiative program.
          (2) Elements of program.--Under a program under 
        paragraph (1), the Center shall--
                  (A) provide necessary support to smaller and 
                medium-sized businesses to--
                          (i) evaluate energy efficiency and 
                        green building opportunities;
                          (ii) understand the cost benefits of 
                        energy efficiency and green building 
                        opportunities;
                          (iii) secure financing to achieve 
                        energy efficiency or to construct green 
                        buildings; and
                          (iv) empower management to implement 
                        energy efficiency projects;
                  (B) assist entrepreneurs with clean 
                technology development and technology 
                commercialization through----
                          (i) technology assessment;
                          (ii) intellectual property;
                          (iii) Small Business Innovation 
                        Research submissions;
                          (iv) strategic alliances;
                          (v) business model development; and
                          (vi) preparation for investors; and
                  (C) help small business improve environmental 
                performance by shifting to less hazardous 
                materials and reducing waste and emissions at 
                the source, including by providing assistance 
                for businesses to adapt the materials they use, 
                the processes they operate, and the products 
                and services they produce.
          (3) Minimum amount.--Each grant under this subsection 
        shall be for at least $150,000.
          (4) Maximum amount.--A grant under this subsection 
        may not exceed $300,000.
          (5) Funding.--Subject to amounts approved in advance 
        in appropriations Acts and separate from amounts 
        approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out this subsection.

SEC. 21A. SMALL BUSINESS REGULATORY ASSISTANCE.

  (a) Definitions.--In this section, the following definitions 
apply:
          (1) Association.--The term ``Association'' means the 
        association recognized by the Administrator of the 
        Small Business Administration under section 
        21(a)(3)(A).
          (2) Participating small business development 
        center.--The term ``participating Small Business 
        Development Center'' means a Small Business Development 
        Center participating in the program.
          (3) Program.--The term ``program'' means the 
        regulatory assistance program established under this 
        section.
          (4) Regulatory compliance assistance.--The term 
        ``regulatory compliance assistance'' means assistance 
        provided by a Small Business Development Center to a 
        small business concern to enable the concern to comply 
        with Federal regulatory requirements.
          (5) Small business development center.--The term 
        ``Small Business Development Center'' means a lead 
        Small Business Development Center described in section 
        21.
          (6) State.--The term ``State'' means each of the 
        several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        and American Samoa.
  (b) Authority.--In accordance with this section, the 
Administrator shall establish a program to provide regulatory 
compliance assistance to small business concerns through 
selected Small Business Development Centers, the Association of 
Small Business Development Centers, and Federal compliance 
partnership programs.
  (c) Small Business Development Centers.--
          (1) In general.--In carrying out the program, the 
        Administrator shall enter into arrangements with 
        selected Small Business Development Centers under which 
        such Centers shall provide--
                  (A) access to information and resources, 
                including current Federal and State nonpunitive 
                compliance and technical assistance programs 
                similar to those established under section 507 
                of the Clean Air Act (42 U.S.C. 7661f);
                  (B) training and educational activities;
                  (C) confidential, free-of-charge, one-on-one, 
                in-depth counseling to the owners and operators 
                of small business concerns regarding compliance 
                with Federal and State regulations, as long as 
                such counseling is not considered to be the 
                practice of law in a State in which a Small 
                Business Development Center is located or in 
                which such counseling is conducted;
                  (D) technical assistance;
                  (E) referrals to experts and other providers 
                of compliance assistance who meet such 
                standards for educational, technical, and 
                professional competency as are established by 
                the Administrator; and
                  (F) access to the Internet and training on 
                Internet use, including the use of the Internet 
                website established by the Administrator under 
                subsection (d)(1)(C).
          (2) Reports.--
                  (A) In general.--Each selected Small Business 
                Development Center shall transmit to the 
                Administrator a quarterly report that 
                includes--
                          (i) a summary of the regulatory 
                        compliance assistance provided by the 
                        center under the program; and
                          (ii) any data and information 
                        obtained by the center from a Federal 
                        agency regarding regulatory compliance 
                        that the agency intends to be 
                        disseminated to small business 
                        concerns.
                  (B) Electronic form.--Each report required 
                under subparagraph (A) shall be transmitted in 
                electronic form.
                  (C) Interim reports.--A participating Small 
                Business Development Center may transmit to the 
                Administrator such interim reports as the 
                Center considers appropriate.
                  (D) Limitation on disclosure requirements.--
                The Administrator shall not require a Small 
                Business Development Center to disclose the 
                name or address of any small business concern 
                that received or is receiving assistance under 
                the program, except that the Administrator 
                shall require such a disclosure if ordered to 
                do so by a court in any civil or criminal 
                action.
  (d) Data Repository and Clearinghouse.--
          (1) In general.--In carrying out the program, the 
        Administrator shall--
                  (A) act as the repository of and 
                clearinghouse for data and information 
                submitted by Small Business Development 
                Centers;
                  (B) submit to the President, the Committee on 
                Small Business and Entrepreneurship of the 
                Senate, and the Committee on Small Business of 
                the House of Representatives an annual report 
                that includes--
                          (i) a description of the types of 
                        assistance provided by participating 
                        Small Business Development Centers 
                        under the program;
                          (ii) data regarding the number of 
                        small business concerns that contacted 
                        participating Small Business 
                        Development Centers regarding 
                        assistance under the program;
                          (iii) data regarding the number of 
                        small business concerns assisted by 
                        participating Small Business 
                        Development Centers under the program;
                          (iv) data and information regarding 
                        outreach activities conducted by 
                        participating Small Business 
                        Development Centers under the program, 
                        including any activities conducted in 
                        partnership with Federal agencies;
                          (v) data and information regarding 
                        each case known to the Administrator in 
                        which one or more Small Business 
                        Development Centers offered conflicting 
                        advice or information regarding 
                        compliance with a Federal or State 
                        regulation to one or more small 
                        business concerns;
                          (vi) any recommendations for 
                        improvements in the regulation of small 
                        business concerns; and
                          (vii) a list of regulations 
                        identified by the Administrator, after 
                        consultation with the Chief Counsel for 
                        Advocacy of the Administration, who 
                        shall review such list, and the Small 
                        Business and Agriculture Regulatory 
                        Enforcement Ombudsman, as being most 
                        burdensome to small business concerns, 
                        and recommendations to reduce or 
                        eliminate the burdens of such 
                        regulations; and
                  (C) establish an Internet website that--
                          (i) provides access to Federal, 
                        State, academic, and industry 
                        association Internet websites 
                        containing industry-specific regulatory 
                        compliance information that the 
                        Administrator deems potentially useful 
                        to small businesses attempting to 
                        comply with Federal regulations; and
                          (ii) arranges such Internet websites 
                        in industry-specific categories.
  (e) Review of Burdensome Regulations and Petition for Agency 
Review.--
          (1) Transmission of list of regulations to chief 
        counsel for advocacy.--The Administrator shall transmit 
        to the Chief Counsel for Advocacy of the Administration 
        a copy of the list of regulations submitted under 
        subsection (d)(1)(B) as part of the annual report 
        required by that subsection.
          (2) Review of list of regulations.--The Chief Counsel 
        for Advocacy shall review the list of regulations 
        transmitted under paragraph (1) and identify any 
        regulation that--
                  (A) is eligible for review in accordance with 
                section 610 of title 5, United States Code;
                  (B) has a significant impact on a substantial 
                number of small business concerns that is 
                substantially different from the impact 
                indicated in the final regulatory flexibility 
                analysis for that regulation, as published with 
                the final regulation in the Federal Register; 
                or
                  (C) has a significant impact on a substantial 
                number of small business concerns and for which 
                no final regulatory flexibility analysis was 
                ever performed.
          (3) Notification and agency review.--With respect to 
        any regulation identified under paragraph (2) the Chief 
        Counsel for Advocacy shall--
                  (A) notify the appropriate Federal rulemaking 
                agency and the Office of Information and 
                Regulatory Affairs of the Office of Management 
                of the identification of such rule or 
                regulation; and
                  (B) request the review of such regulation--
                          (i) in accordance with section 610 of 
                        title 5, United States Code; or
                          (ii) for any impact it has on small 
                        business concerns.
          (4) Annual report.--The Chief Counsel for Advocacy 
        shall publish an annual report containing a list of any 
        regulation identified under paragraph (2) and the 
        disposition by the appropriate agency.
  (f) Eligibility.--
          (1) In general.--A Small Business Development Center 
        shall be eligible to receive assistance under the 
        program only if the center is certified under section 
        21(k)(2).
          (2) Waiver.--With respect to a Small Business 
        Development Center seeking assistance under the 
        program, the Administrator may waive the certification 
        requirement set forth in paragraph (1) if the 
        Administrator determines that the center is making a 
        good faith effort to obtain such certification.
  (g) Selection of Participating State Programs.--
          (1) Establishment of program.--In consultation with 
        the Association and giving substantial weight to the 
        Association's recommendations, the Administrator shall 
        select the Small Business Development Center programs 
        of 2 States from each of the following groups of States 
        to participate in the program:
                  (A) Group 1: Maine, Massachusetts, New 
                Hampshire, Connecticut, Vermont, and Rhode 
                Island.
                  (B) Group 2: New York, New Jersey, Puerto 
                Rico, and the Virgin Islands.
                  (C) Group 3: Pennsylvania, Maryland, West 
                Virginia, Virginia, the District of Columbia, 
                and Delaware.
                  (D) Group 4: Georgia, Alabama, North 
                Carolina, South Carolina, Mississippi, Florida, 
                Kentucky, and Tennessee.
                  (E) Group 5: Illinois, Ohio, Michigan, 
                Indiana, Wisconsin, and Minnesota.
                  (F) Group 6: Texas, New Mexico, Arkansas, 
                Oklahoma, and Louisiana.
                  (G) Group 7: Missouri, Iowa, Nebraska, and 
                Kansas.
                  (H) Group 8: Colorado, Wyoming, North Dakota, 
                South Dakota, Montana, and Utah.
                  (I) Group 9: California, Guam, Hawaii, 
                Nevada, and Arizona.
                  (J) Group 10: Washington, Alaska, Idaho, and 
                Oregon.
          (2) Deadline for initial selections.--The 
        Administrator shall make selections under paragraph (1) 
        not later than 60 days after promulgation of 
        regulations under subsection (k).
          (3) Additional selections.--Not earlier than the date 
        3 years after the date of the enactment of this 
        paragraph, the Administrator may select Small Business 
        Development Center programs of States in addition to 
        those selected under paragraph (1). The Administrator 
        shall consider the effect on the programs selected 
        under paragraph (1) before selecting additional 
        programs under this paragraph.
          (4) Coordination to avoid duplication with other 
        programs.--In selecting programs under this subsection, 
        the Administrator shall give a preference to Small 
        Business Development Center programs that have a plan 
        for consulting with Federal and State agencies to 
        ensure that any assistance provided under this section 
        is not duplicated by an existing Federal or State 
        program.
  (h) Matching Not Required.--Subparagraphs (A) and (B) of 
section 21(a)(4) shall not apply to assistance made available 
under the program.
  (i) Distribution of Grants.--
          (1) In general.--Except as provided in paragraph (2), 
        each State program selected to receive a grant under 
        subsection (g) in a fiscal year shall be eligible to 
        receive a grant in an amount not to exceed the product 
        obtained by multiplying--
                  (A) the amount made available for grants 
                under this section for the fiscal year; and
                  (B) the ratio that the population of the 
                State bears to the population of all the States 
                with programs selected to receive grants under 
                subsection (g) for the fiscal year.
          (2) Minimum amount.--The minimum amount that a State 
        program selected to receive a grant under subsection 
        (g) shall be eligible to receive under this section for 
        any fiscal year shall be $200,000. The Administrator 
        shall reduce the amount described in paragraph (1) as 
        appropriate to carry out the purposes of this paragraph 
        and subsection (j)(2).
  (j) Evaluation and Report.--Not later than 3 years after the 
establishment of the program, the Comptroller General of the 
United States shall conduct an evaluation of the program and 
shall transmit to the Administrator, the Committee on Small 
Business and Entrepreneurship of the Senate, and the Committee 
on Small Business of the House of Representatives a report 
containing the results of the evaluation along with any 
recommendations as to whether the program, with or without 
modification, should be extended to include the participation 
of all Small Business Development Centers.
  (k) Promulgation of Regulations.--After providing notice and 
an opportunity for comment and after consulting with the 
Association (but not later than 180 days after the date of the 
enactment of this section), the Administrator shall promulgate 
final regulations to carry out this section, including 
regulations that establish--
          (1) priorities for the types of assistance to be 
        provided under the program;
          (2) standards relating to educational, technical, and 
        support services to be provided by participating Small 
        Business Development Centers;
          (3) standards relating to any national service 
        delivery and support function to be provided by the 
        Association under the program;
          (4) standards relating to any work plan that the 
        Administrator may require a participating Small 
        Business Development Center to develop; and
          (5) standards relating to the educational, technical, 
        and professional competency of any expert or other 
        assistance provider to whom a small business concern 
        may be referred for compliance assistance under the 
        program.
  (l) Funding.--Subject to amounts approved in advance in 
appropriations Acts and separate from amounts approved to carry 
out section 21(a)(1), the Administrator may make grants or 
enter into cooperative agreements to carry out this section.

           *       *       *       *       *       *       *


                                  
