[Senate Report 111-341]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 633
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-341

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



 
 SMALL BUSINESS EXPORT ENHANCEMENT AND INTERNATIONAL TRADE ACT OF 2009

                                _______
                                

               September 29, 2010.--Ordered to be printed

                                _______
                                

        Ms. Landrieu, from the Committee on Small Business and 
               Entrepreneurship, submitted the following

                              R E P O R T

                         [To accompany S. 2862]

    The Committee on Small Business and Entrepreneurship, to 
which was referred the bill (S. 2862) to improve the Office of 
International Trade and for other purposes, having considered 
the same, reports favorably thereon and recommends that the 
bill pass.

                            I. INTRODUCTION

    The Small Business Export Enhancement and International 
Trade Act of 2009 (S. 2862) was introduced by the Committee's 
Ranking Member, Senator Olympia J. Snowe, for herself and the 
Chair, Senator Mary L. Landrieu, on December 9, 2009.
    The bill elevates the U.S. Small Business Administration's 
(SBA) Office of International Trade (OIT) and updates the 
Agency's international trade and export promotion programs 
administered through the office. Additionally, the bill 
authorizes one new pilot program and seeks to improve 
coordination between the SBA and other federal agencies 
involved in promoting export opportunities for small business.
    During markup of the bill, the Committee approved the 
legislation by a roll call vote of 18-0.

                  II. PURPOSE AND NEED FOR LEGISLATION

    The purpose of the Small Business Export Enhancement and 
International Trade Act is to improve and modernize the SBA's 
international trade and export assistance programs. These 
programs, administered through OIT, assist small businesses 
seeking to export their goods and services by providing them 
with vital international trade financing assistance and 
business counseling services. Through these programs, the SBA 
reaches several thousand small businesses annually.
    The Committee is concerned that the SBA is not reaching 
enough small businesses through these programs, nor is the 
Agency doing enough to provide small businesses with the 
resources and tools they need to become successful exporters. 
For example, in FY 2009, the SBA funded more than 1,393 loan 
guarantees to small exporters and counseled 5,100 small 
businesses on export-related activities.\1\ While the SBA's 
programs enabled these 6,493 small exporters to post more than 
$1.6 billion in export sales in FY 2009, SBA-supported export 
sales accounted for less than 1 percent of the total export 
volume produced by all U.S. small businesses during that fiscal 
year. Furthermore, the 6,493 small businesses assisted by the 
SBA in FY 2009 represented fewer than 3 percent of all 
identified small U.S. exporters.\2\
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    \1\United States Small Business Administration, Fiscal Year 2011 
Congressional Budget Justification, pg. 48.
    \2\United States Department of Commerce, Exporter Database, Small 
and Medium-Sized Exporting Companies: Statistical Overview 2007. 
---------------------------------------------------------------------------
    Overall, U.S. small businesses represent 97 percent of all 
identified U.S. exporting companies. These 259,381 small 
businesses account for 30.2 percent, or about $312 billion, of 
our nation's annual export volume.\3\ According to the U.S. 
Department of Treasury, approximately 57 million American 
workers are employed by firms that engage in international 
trade, representing about 40 percent of the private sector 
workforce.\4\
---------------------------------------------------------------------------
    \3\United States Department of Commerce, Exporter Database, Small 
and Medium-Sized Exporting Companies: Statistical Overview 2007. 
    \4\United States Senate Committee on Commerce, Science and 
Transportation, Subcommittee on Competitiveness, Innovation, and Export 
Promotion. Hearing: ``A World of Opportunity: Promoting Export Success 
for Small and Medium-Sized Businesses.'' Congressional Testimony of Ms. 
Liz Reilly, U.S. Chamber of Commerce, October 6, 2009, pg. 1.
---------------------------------------------------------------------------
    While these statistics are impressive, they do not 
accurately portray the small business exporting landscape. For 
example, while small businesses make up a majority of U.S. 
exporting companies, of our nation's nearly 29 million small 
businesses, less than 1 percent currently exports their goods 
and services. The Committee believes that more needs to be done 
to encourage small businesses to export and, specifically, to 
increase the number of small businesses that do not currently 
sell to foreign customers.
    The Committee also believes in the vigorous promotion of 
those small businesses that currently export by helping them 
expand to additional foreign markets and increase the value of 
their exports. Overall, U.S. export volume has grown from 
$500.7 billion in 1996 to $1.287 trillion in 2008, an increase 
of nearly 100 percent.\5\ Unfortunately, small businesses have 
not benefited from this tremendous growth in export volume. 
While the number of small exporters more than doubled during 
this same time period, their share of the total known value of 
exports has fallen from 31.1 to 30.2 percent.\6\
---------------------------------------------------------------------------
    \5\United States Department of Commerce, Profile of U.S. Exporting 
Companies, 2007-2008. Released April 13, 2010, pg. 1.
    \6\United States Department of Commerce, Exporter Database, 
Overview: SME Exporters by State 2007. 
---------------------------------------------------------------------------
    This suggests that small businesses, particularly those 
that are already involved in exporting, have not fully taken 
advantage of their global export potential. According to data 
from the U.S. Department of Commerce, this is indeed the case. 
At present, 59 percent of all small exporters posted sales to 
only one foreign market. This figure stands in stark contrast 
to large exporters (defined as exporting companies with more 
than 500 employees), 55 percent of who recorded export sales to 
five or more foreign markets in 2008.\7\ The ability of large 
exporters to reach multiple markets is what allows them to 
account for 60 percent of our nation's export volume annually, 
despite representing less than 3 percent of all identified U.S. 
exporters.\8\ With 95 percent of the world's population living 
outside of the United States, small exporters stand to benefit 
immensely by exporting to numerous foreign markets.\9\
---------------------------------------------------------------------------
    \7\United States Department of Commerce, Small & Medium-Sized 
Exporting Companies: Statistical Overview, 2008. 
    \8\United States Department of Commerce, Exporter Database, Small 
and Medium-Sized Exporting Companies: Statistical Overview, 2008. 
    \9\United States Department of Commerce, International Trade 
Administration, Benefits of Exporting--Why Consider Exporting?, 
, 2009.
---------------------------------------------------------------------------
    The Committee believes that encouraging more small 
businesses to export will not only help these businesses 
increase their customer base and create new jobs, it will also 
have tremendous economic benefits for our economy. Jobs created 
or supported by exporting pay, on average, 13 to 18 percent 
more than domestically created jobs and thus help to reduce the 
trade deficit.\10\ Further, there is substantive evidence to 
suggest that every dollar invested in government-sponsored 
export promotion programs results in a considerable return on 
investment. A recent World Bank study estimated that every 
dollar invested in export promotion brings back an average 40-
fold increase in exports. According to the study, the U.S. 
currently spends one-sixth of the international average on 
export promotion, suggesting that the U.S. would stand to 
benefit exponentially from even a minimal change in 
expenditures supporting export promotion.\11\
---------------------------------------------------------------------------
    \10\Office of the United States Trade Representative, Executive 
Office of the President, Benefits of Trade, , 2009.
    \11\The World Bank, Development Economics Research Group, Export 
Promotion Agencies: What Works and What Doesn't, Lerderman, Olarreaga, 
Payton, ed. 2008.
---------------------------------------------------------------------------
    Additionally, investing in small exporters could help to 
lead the country out of its current recession. A recent study 
by the U.S. Census Bureau found that small businesses, 
especially very small firms with fewer than 20 employees, 
create jobs faster than their larger counterparts following a 
recession.\12\ Presently, more than 83 percent of all U.S. 
exporting firms have fewer than 20 employees, suggesting that 
small exporters are uniquely positioned to help lead us out of 
our current economic recession by creating new and higher 
paying jobs.
---------------------------------------------------------------------------
    \12\United States Small Business Administration, Office of 
Advocacy, Small Business Economy Report to the President, 2009 Edition, 
p. 10.
---------------------------------------------------------------------------
    Finally, with more than 20 federal agencies involved in 
export promotion, many small businesses do not know where to 
start when seeking assistance to export their goods and 
services. To help fill this void, the Committee believes that 
as the primary federal agency responsible for assisting U.S. 
small businesses, the SBA should take a more proactive role in 
export promotion. However, for the SBA to successfully do so, 
the Committee believes that the following changes to SBA 
programs are needed: Elevation of OIT; the establishment of an 
Associate Administrator position to head OIT; updates to SBA 
trade finance programs; expansion of the export finance 
specialist program; improvements to coordination processes and 
efforts undertaken with other federal agencies; improvements to 
internal performance and oversight metrics; and, the creation 
of new outreach and assistance initiatives to help existing 
small exporters and small businesses with export potential. The 
Small Business Export Enhancement and International Trade Act 
of 2009 makes these changes to ensure that the SBA is a more 
robust and practical resource for existing and potential small 
exporters.

                      III. HISTORY OF LEGISLATION

    S. 2862 draws its provisions from two separate bills 
introduced by the Committee Chair and Ranking Member on June 8, 
2009: S. 1196, the Small Business International Trade 
Enhancements Act of 2009, introduced by Chair Landrieu and 
cosponsored by Senator Jeanne Shaheen, and S. 1208, the Small 
Business Export Opportunity Development Act of 2009, introduced 
by Ranking Member Snowe.
    S. 1196, building upon legislation introduced and passed by 
the Committee in previous Congresses, sought to elevate OIT, 
establish an Associate Administrator position to head the 
office, improve the SBA's international trade financing 
programs, increase staff, improve inter-agency coordination, 
and establish new goals to ensure the success of the office. 
Also expanding upon legislation from previous Congresses, S. 
1208 sought to establish an Office of Export Development and 
Promotion within the SBA, led by an Associate Administrator for 
Export Development and Promotion. The purpose of the office was 
to undertake specified activities, such as financing and 
counseling, to facilitate the development and promotion of 
small business goods and services abroad. S. 2862, introduced 
by Ranking Member Snowe and cosponsored by Chair Landrieu, 
Senators Shaheen, Bayh and Cardin, combines provisions from 
both S. 1196 and S. 1208, and builds upon the Committee's 
bipartisan work from the current and previous Congresses as 
described below.
    During the 110th Congress, Senator Landrieu introduced S. 
738, the Small Business International Trade Enhancements Act of 
2007, cosponsored by Ranking Member Snowe, then Chairman Kerry, 
and Senators Coleman and Pryor. Containing many provisions 
similar to those included in bills introduced this Congress (S. 
2862, S. 1196, and S. 1208, S. 738), S. 738 included 
improvements to the operations and structure of the SBA's 
Office of International Trade, changes to SBA's trade and 
export financing programs, increased staffing levels, and 
improved coordination between the SBA and other Agencies 
involved in export promotion.
    Provisions from S. 738 were ultimately included in three of 
the Committee's reauthorization bills during the 110th 
Congress: S. 1256, the Small Business Lending Reauthorization 
and Improvements Act of 2007; S. 1671, the Entrepreneurial 
Development Reauthorization Act of 2007; and S. 2920, the SBA 
Reauthorization and Improvements Act of 2008. S. 1256 was 
reported favorably out of Committee by a unanimous vote of 19-0 
on May 16, 2007, and S. 1671 was reported out of Committee 
unanimously by a vote of 19-0 on June 26, 2007. However, 
neither S. 1256 nor S. 1671 made it out of the Senate before 
the adjournment of the 110th Congress. An attempt to move these 
bills by combining them into a comprehensive and bipartisan 
reauthorization bill, S. 2920, also did not advance through the 
Senate before the adjournment of the 110th Congress.
    In the 109th Congress, Senator Landrieu, along with then 
Ranking Member Kerry and Senators Bayh and Pryor, introduced S. 
3663, the Small Business International Trade Enhancement Act of 
2006. A number of the provisions from S. 2862, S. 1196, and S. 
738 originated in S. 3663. Many of these provisions were also 
included in the Committee's comprehensive reauthorization bill, 
S. 3778, the Small Business Reauthorization and Improvements 
Act of 2006, introduced by then Chair Snowe. Despite passing 
out of Committee by a vote of 18-0 on August 2, 2006, S. 3778 
was not considered by the full Senate before the close of the 
109th Congress.
    Additionally, during the 109th Congress, Senator Landrieu 
introduced S. 2482, the Gulf Coast Open for Business Act of 
2006, which contained provisions requiring the SBA to hire a 
full-time international finance specialist to carry out export 
promotion efforts in Louisiana, Mississippi, Alabama, and 
Arkansas during recovery efforts resulting from Hurricanes 
Katrina and Rita. This legislation was cosponsored by then 
Ranking Member Kerry and Senator Bayh. Finally, during the 
109th Congress, Senator Landrieu introduced S. 1765, the 
Louisiana Katrina Reconstruction Act, which was cosponsored by 
Senator Vitter. Section 530 of this legislation created a new 
grant program at the Department of Commerce to assist 
businesses impacted by the 2005 hurricanes with export-related 
opportunities.
    In the 108th Congress, then Chair Snowe introduced S. 2821, 
the Small Business Reauthorization and Manufacturing Assistance 
Act of 2004. S. 2821 served to amend the Small Business Act 
through the modification of international trade loan program 
provisions. Cosponsored by Senators Bond and Roberts, 
provisions included financing for acquisition, construction, 
renovation, modernization, improvement, or expansion of 
facilities or equipment to be used in the United States in the 
production of goods and services involved in international 
trade as well as the refinancing of existing indebtedness to 
ensure reasonable terms and conditions.
    Additionally, during the 108th Congress, then Chair Snowe 
introduced S. 1977, the Small Manufacturers Assistance, 
Recovery, and Trade Act, cosponsored by Senators Voinovich, 
Collins, and Cochran, to established an Assistant United States 
Trade Representative (AUSTR) for Small Business. This 
legislation also contained provisions to include small business 
manufacturing within the SBA loan and international trade 
programs. Finally, Chair Snowe introduced S. 2193, the Small 
Business Loan Revitalization Act, requiring any small 
businesses that received SBA export working capital financing 
previous to January 1, 2004 and requesting a financing renewal, 
have their request approved regardless of the size of such 
financing, if the small business was otherwise eligible.

                      IV. HEARINGS AND ROUNDTABLES

    On June 30, 2009, the Committee held a field hearing 
titled, ``Keeping America Competitive: Federal Programs that 
Promote Small Business Exporting.'' SBA Administrator Karen G. 
Mills, United States Trade Representative (USTR) Ronald Kirk, 
U.S. Export-Import Bank (Ex-Im Bank) Chairman and President 
Fred Hochberg, and Acting Deputy Assistant Secretary for 
Domestic Operations of the International Trade Administration 
(ITA) Patricia Sefcik, all testified on the first hearing 
panel. Representatives from the World Trade Center of New 
Orleans (WTCNO), the Ark-LA-Tex Export & Technology Center, the 
Louisiana District Export Council (LA-DEC), and the Southern 
United States Trade Association (SUSTA) testified on the second 
panel.
    The purpose of the hearing was to raise awareness of export 
promotion programs and opportunities available through the 
Federal government, as well as to explore the challenges faced 
by small exporters. Two themes emerged from witness testimony: 
first, many small exporters are unaware of the programs and 
resources available to them through the Federal government; and 
second, that many of these programs, particularly those offered 
by the SBA, are in need of modernization and overall 
improvement to reflect the high cost of doing business 
internationally. The Committee has attempted to address those 
two issues in S. 2862.
    On June 11, 2009, the Committee held a roundtable titled, 
``Investing in Small Business.'' The purpose of the roundtable 
was to discuss the state of the SBA's Entrepreneurial 
Development programs. Trade issues were addressed in a portion 
of the roundtable and representatives from the SBA, Small 
Business Exporters Association (SBEA), U.S. Chamber of 
Commerce, and the Branch Banking and Trust Company (BB&T Bank) 
participated in the roundtable. Specific topics discussed 
during the roundtable included the elevation of OIT, staffing 
levels of SBA export finance specialists assigned to U.S. 
Export Assistance Centers (USEACs) operated by the Department 
of Commerce, improvements to the Agency's export and trade 
finance programs, as well as a discussion of a proposed small 
business export promotion grant program designed to remove 
trade barriers for small businesses who wish to export.
    During the 110th Congress under the Chairmanship of Senator 
Kerry, on May 2, 2007, the Committee held a roundtable titled, 
``SBA Reauthorization: Small Business Loan Programs.'' The 
purpose of this hearing was to discuss proposals to improve and 
reauthorize the SBA's lending programs, including the Agency's 
international trade loan programs. An array of stakeholders 
participated in the roundtable, including representatives of 
the SBEA and National Black Chamber of Commerce. Both groups 
expressed their support for increasing the maximum amount of 
financing available through the Agency's international trade 
programs.
    SBEA also expressed their support for the trade loan 
provisions modifying the SBA's International Trade Loan program 
(ITL) included in S. 1256, the Small Business Lending 
Reauthorization and Improvements Act of 2007, that increased 
the maximum amount of financing available, adjusted the 
guarantee amount of loans made through the program, and 
established improved collateral and refinancing requirements 
for the program. These provisions originated in S. 3663, the 
Small Business International Trade Enhancement Act of 2006 
introduced by Senator Landrieu in the 109th Congress, and were 
also included in S. 738, the Small Business International Trade 
Enhancements Act of 2007, introduced by Senator Landrieu during 
the 110th Congress.
    On February 28, 2007, the Committee held a hearing titled, 
``The President's Fiscal Year 2008 Budget Request for the Small 
Business Administration.'' The purpose of this hearing was to 
review the President's FY 2008 budget request for the SBA. 
During the hearing and in follow-up questions for the record 
posed by Senator Landrieu, staffing levels of the Agency's 
international trade programs were addressed. Specifically, the 
SBA's failure to fully staff export finance specialist 
vacancies at USEACs located in high export volume areas, such 
as Louisiana, New York, and other states that had been without 
a specialist since 2003, were addressed.

                         V. DESCRIPTION OF BILL


Section 1--Short title

Section 2--Definitions

Section 3--Office of International Trade

    Section 3 of the bill seeks to update and improve OIT. OIT 
was established by the Small Business Export Expansion Act of 
1980 (P.L. 96-481) and was later modified by provisions in the 
Small Business International Trade and Competitiveness Act of 
1988 (P.L. 100-418). In the late 1990's, OIT was folded into 
the SBA's Office of Capital Access (OCA) where it has remained 
since that time. Although the Agency has made internal 
improvements to the office, the statutes authorizing and 
dictating the responsibilities of the office have not been 
significantly updated since 1988.
    The Committee is concerned that since being folded into 
OCA, OIT has not received adequate attention or resources to 
fulfill its mission. In an effort to raise its profile within 
the Agency, this bill elevates OIT by removing it from within 
OCA, thus creating a new office headed by an Associate 
Administrator for International Trade who would be directly 
accountable to the SBA Administrator. The bill also clarifies 
that the primary focus and mission of the office should be to 
increase the number of small businesses that export, as well as 
to increase the volume of exports by small businesses.

Section 4--Duties of the Office of International Trade

    Section 4 of the bill seeks to update the duties and 
responsibilities of the office. Currently, the Small Business 
Act requires that the SBA, ``assist in developing a 
distribution network for existing trade promotion, finance, 
trade adjustment, trade remedy assistance and data collection 
programs.'' This concept originated with P.L. 100-418.
    As the primary Federal agency responsible for assisting 
U.S. small businesses, the Committee believes that the SBA 
should take a more active role in maintaining a distribution 
network in coordination with other federal agencies involved in 
promoting export opportunities for small businesses. 
Specifically, this network should incorporate the Department of 
Commerce, the USTR, Ex-Im Bank, and the Overseas Private 
Investment Corporation (OPIC). This network should also be 
extended to include all SBA resource partners that provide 
business counseling or technical assistance services, including 
regional and district offices of the Administration, Small 
Business Development Centers (SBDC), Women's Business Centers 
(WBC), the Service Corps of Retired Executives (SCORE), and 
USEACs operated by the Department of Commerce. OIT is also 
required to provide information on exporting trends, market-
specific growth, industry trends and international prospects 
for exports, and to aggressively market and promote export 
assistance and trade programs available to small businesses.
    Current statute dictates that the SBA is required to 
maintain a full-time export development specialist in every 
Agency regional office, responsible for overseeing and 
performing export development in each region. To complement 
this, current statute also requires that the SBA designate one 
individual in each district office to be accountable for export 
development on a more localized basis. The Committee is 
concerned that the SBA has not properly staffed these positions 
in recent years, and it is unclear how the Agency has 
compensated for any resulting vacancies. To provide a more 
complete network of trade and export assistance services, this 
bill directs the SBA to ensure that these positions are fully 
staffed and requires that the names and contact information of 
SBA personnel assigned to these positions or designated with 
these responsibilities, are published on the Agency's Web site.
    The bill also establishes new training requirements for OIT 
personnel. Specifically, the bill directs the SBA to establish 
annual training programs for employees that focus on the 
current needs of small businesses. Additionally, the bill 
requires the SBA to lead and conduct annual training programs 
for exporters and lenders in conjunction with representatives 
from other federal agencies involved in export promotion, 
including Commerce, Ex-Im Bank, and OPIC, as well as SBA 
resource partners and staff assigned to USEACs.
    To complement the SBA's export finance specialist program 
and other SBA export development staff, S. 2862 seeks to assist 
the Agency in improving its outreach mechanisms to small 
exporters by requiring employees of each state SBDC network to 
become certified in providing export assistance. Specifically, 
the bill requires that either 5 employees or 10 percent of the 
total number of employees in a state network (or whichever is 
lesser, as appropriate) become certified in providing export 
assistance under criteria developed by the Administrator. 
Networks of WBCs are also eligible to participate in the 
program, but are not required to have a certain number of 
employees certified. Additionally, this section allows the 
Administrator, subject to appropriations, to reimburse 
participating SBDCs and WBCs for all costs related to the 
certification process as developed by the Agency.
    To ensure that the OIT is achieving the mission and goals 
set forth by S. 2862, this section of the bill establishes a 
variety of new performance metrics and reporting requirements. 
Specifically, the Committee believes that the SBA needs to 
establish a better system to collect data and information 
related to how they serve small exporters. Accordingly, the 
bill directs the SBA to track, in coordination with other 
federal agencies and departments represented on the Trade 
Promotion Coordinating Committee (TPCC): The number of small 
businesses that are new to exporting; the number of small 
business that have previously received assistance from other 
federal export promotion resources; the number of small 
businesses referred to or from other federal export promotion 
resources; the export revenues of those small businesses 
assisted by the SBA; and the number of small businesses 
referred to various SBA resource partners for assistance.
    According to a recent report by the SBA's Office of 
Advocacy, small exporters often face a variety of barriers to 
trade including exchange rate risk, strong global competition, 
a variety of regulatory and legal frameworks, and intellectual 
property concerns. While the removal of trade barriers is 
crucial to the opening of previously untapped markets and 
encouraging more small businesses to become involved in 
international trade, many firms still do not feel it is worth 
the risk to export. The same study also found that small 
exporters, who produce 13 times more patents per employee than 
large patenting firms, are less likely to seek copyright 
protection making them vulnerable to piracy or intellectual 
property theft.
    Consequently, this bill directs the Administrator to carry 
out a comprehensive program to provide technical assistance, 
counseling services, and reference materials to assist in the 
resolution of international trade disputes, or to address 
unfair international trade practices. As part of the program, 
the bill directs SBA District Offices to provide information on 
services that assist small businesses with the resolution of 
international trade disputes and also to provide them with 
referrals to other existing providers or programs. This bill 
also requires the SBA to establish relationships with providers 
of legal services and, working in conjunction with the United 
States Patent and Trademark Office (PTO) and the Register of 
Copyrights, to establish counseling services and materials for 
small business concerns regarding intellectual property 
protection in other countries.
    This section of the bill also requires the SBA to develop 
joint performance measures for District Offices and USEACs. 
Specifically, the SBA is required to develop metrics to track 
the number of loans made under each of the Agency's 
international trade financing programs, including the 
International Trade Loan program (ITL), the Export Working 
Capital program (EWCP), the Preferred Lenders Program (PLP), 
and the Export Express Loan Program, at each District Office 
and USEAC.
    Finally, in addition to establishing annual reporting 
requirements for OIT, the bill requires the SBA to report back 
to its Congressional authorizing committees within 60 days of 
enactment regarding any official travel undertaken by employees 
of the office, dating back to FY 2004. The Committee believes 
that employees of the office, particularly export finance 
specialists assigned to USEACs, should continue to perform 
outreach and travel within their assigned areas. However, as an 
Agency with a primarily domestic focus, the Committee believes 
that international travel undertaken by employees of the office 
should be limited and that more emphasis should be placed on 
domestic outreach.

Section 5--Export assistance centers

    The SBA currently employs 18 export finance specialists who 
provide small or medium-sized businesses with technical 
assistance and business counseling services. Working in 
conjunction with Commerce, the specialists are posted in USEACs 
located throughout the country. In FY09, at a minimal cost to 
the taxpayer, these specialists helped to facilitate 1,498 SBA 
export finance loans worth approximately $582,783,928, creating 
or saving approximately 17,660 jobs. However, it is important 
to note that the SBA's trade finance programs were not immune 
to the global credit crisis and these programs experienced a 
nearly 53-percent decrease in the volume of loans made. Due to 
a thawing credit market, it is likely that changes made to the 
SBA's trade and export financing programs by this bill, coupled 
with an increase in the number of specialists, will lead to a 
substantial increase in the volume of loans and subsequently, 
the creation of more jobs in FY2010 and beyond.
    The Committee is concerned that SBA has not devoted 
sufficient resources to the USEAC program. As recently as 2003, 
the SBA employed 22 specialists. Currently, the SBA maintains 
only 18 specialists and, in 2007, the program experienced a 
record staffing low of 16 specialists. These vacancies force 
the current staff of specialists to cover more extensive 
territory often with limited travel budgets, thus negatively 
impacting the export potential of small businesses in high 
export markets. Despite repeated requests by the Committee to 
increase the number of specialists, the SBA has only recently 
begun to re-staff these long vacant positions.
    To address concerns about this program, the Committee has 
included provisions in the bill establishing a base staff of 22 
specialists. This will ensure that the SBA maintains an export 
assistance network encompassing several of the highest 
exporting areas of the country. The bill also requires that the 
SBA assign no fewer than three specialists to USEACs in each of 
the SBA's 10 regions, bringing the total number of specialists 
to at least 30 within two years of the enactment of the 
legislation, providing more complete coverage of the country. 
In an effort to ensure that staffing levels are maintained, the 
bill also requires the SBA to designate an individual within 
the Office to oversee all activities conducted by SBA employees 
assigned to USEACs. To better leverage other existing federal 
resources designed to assist small businesses, the bill 
requires the SBA, Commerce, Ex-Im Bank, and OPIC to develop 
shared annual goals for USEACs.
    Finally, to help the SBA identify current gaps in coverage 
due to the lack of specialists and guide future assignments, 
the bill requires the SBA to conduct a study of the 
availability of export finance specialists in both high and low 
export volume areas. This will ensure that future assignments 
are made to those areas most in need of federal export 
assistance resources. The study also requires the SBA to take 
into account the number of small exporters, the percentage of 
small businesses that are exporters, and growth in the number 
of small exporters in recent years when putting together their 
recommendations. The Administrator is required to submit a 
report to Congress on the results of the study, as well as 
recommendations regarding future assignments of export finance 
specialists.

Section 6--International trade finance programs

    One issue consistently raised by small business owners 
testifying before the Committee is the inability to access 
adequate amounts of capital. This is especially true of small 
businesses involved in exporting due to the inherent risks of 
doing business internationally. Currently, several Agencies 
including the SBA, Ex-Im Bank and OPIC provide various 
financing solutions for small exporters. However, as the 
largest of these agencies and the primary Agency responsible 
for assisting U.S. small businesses, the Committee believes 
that the SBA should be a leading source of export financing for 
small businesses.
    SBA lending programs provide an estimated 40 percent of all 
long-term financing to our nation's entrepreneurs. However, 
many of the SBA lending programs, in particular their trade and 
export loan programs, have not been updated in some time. As a 
result, these programs no longer represent viable financing 
solutions for small businesses seeking trade or export 
financing. In FY 2009, the SBA funded only 1,498 loans to small 
exporters, reaching less than one half of one percent of our 
nation's approximately 259,381 small exporters. Although 
neither the SBA nor the export community were immune to the 
global credit crisis in FY 2009, the number of export loans 
made by the Agency in FY 2008 was 3,234, the largest number of 
trade and export loans made by the SBA in recent years. 
However, despite making a record number of loans in FY 2008, 
the SBA was only able to reach or assist just over one percent 
of our nation's small exporters.
    In testimony before the Committee, numerous small business 
owners and advocacy groups have verified that while the SBA 
could be an excellent resource for small exporters, their trade 
and export finance programs have two significant issues that 
prevent this. First, the programs do not offer a sufficient 
amount of financing. Currently, the SBA's trade finance 
programs offer exporters up to $2 million in loans, an amount 
that is no longer sufficient to finance international business 
transactions. Second, due to the inherent risk of conducting 
business internationally, low loan guarantees by the SBA leave 
lenders with little incentive to participate in or promote 
these programs to small businesses. S. 2862 attempts to address 
both of these issues by making key changes to the SBA's three 
trade and export loan programs.
    Since FY 2003, the International Trade Loan (ITL) program 
has experienced a 90-percent decline in its loan volume, from a 
high of 71 loans made in 2003 down to seven loans in 2009. In 
2007, this program experienced a record low of three loans 
made, representing a decrease of nearly 97 percent from 2003. 
In testimony before the Committee, small business owners and 
trade associations alike expressed their belief that this 
program no longer a viable financing option for small 
businesses seeking export financing.
    The provisions in the bill that address the ITL program 
seek to revitalize the program and create a more attractive and 
practical option for small businesses seeking trade and export 
financing, while providing lenders with further incentive to 
participate in the program. Current statute inadvertently has 
the maximum loan guaranty and maximum loan amount working at 
cross purposes and, as a result, small businesses no longer 
consider this program a viable source of export and trade 
financing.
    To correct these problems, the bill seeks to expand 
financing to small exporters by increasing the maximum amount 
of an ITL from $2 million to $5 million, which is consistent 
with other legislative changes that both the current 
Administration and the Committee have advocated for. 
Additionally, the bill establishes a maximum guarantee 
percentage of 90 percent for the ITL program. When the program 
was first established by Congress in 1980 by PL 96-487, it was 
Congressional intent that the SBA would establish a 90-percent 
guarantee for the program. However, the guarantee was never 
established in statute, and it is currently set at 75 percent. 
The Committee believes that a 90-percent guarantee for the 
program is needed to provide incentive for both borrowers and 
lenders to participate in this program, as well as to make the 
program consistent with Export Working Capital Program (EWCP).
    The bill also allows working capital--one of the most 
frequently needed types of capital for exporters--to be 
permitted as an eligible use of loan proceeds. Participants of 
the program would be able to use up to $4.5 million of the loan 
for that purpose. This bill also makes ITL's consistent with 
regular SBA 7(a) loans by allowing the same collateral and 
refinancing terms offered to borrowers through the 7(a) 
program.
    Much like the ITL program, the EWCP program has also 
experienced a significant decline in recent years. In FY 2009, 
142 loans were made through the program, representing a 31-
percent decrease from FY 2003. The Committee is also concerned 
about the EWCP Co-Guaranty program operating in conjunction 
with Ex-Im Bank. Since signing a memorandum of understanding 
with the Ex-Im Bank in 2006, the volume of this program has 
remained stagnant, with the SBA making a high of 14 loans per 
year. In FY 2009, only 10 loans were made through this program.
    As with the ITL program, this section seeks to improve the 
EWCP program by making it a more attractive and user friendly 
financing option for small businesses. To that end, the 
legislation increases the maximum amount of an EWCP loan from 
$2 million to $5 million. The legislation also allows any 
lender participating in Ex-Im Bank's Delegated Authority Lender 
Program to participate in the SBA's Preferred Lenders Program.
    Additionally, this section prohibits the Administrator from 
collecting a fee on a EWCP loan more than once a year and 
prevents the Administration from assessing a fee on capital 
that is not accessed by a small business. Currently, the SBA 
fee on the EWCP loan is assessed on a monthly basis for the 
loan amount draw down. Due to the inherent risk of export and 
trade finance loans, the current arrangement places a 
significant burden on borrowers and also creates problems for 
lenders administering the loan.
    This section of the legislation also updates and codifies 
the SBA's Export Express Loan Program. The Export Express Loan 
program enables small exporters to obtain SBA backed financing, 
loans, and lines of credit of up to $250,000. The SBA provides 
expedited eligibility review and provides a response in less 
than 24 hours enabling small exporters to obtain access to 
their funds faster. Currently, the maximum Export Express line 
of credit or loan amount is $250,000. Participating banks 
receive an 85-percent guarantee on loan amounts up to $150,000, 
and 75 percent on loan amounts between $150,000 and $250,000.
    Despite several years of declining loan volume for the 
program, in FY 2009 the Export Express Loan Program doubled in 
volume and was by far the most popular SBA trade loan program 
that fiscal year. Accordingly, this section of the bill 
establishes the Export Express Loan Program as a permanent SBA 
international trade finance program. The bill also raises the 
maximum amount of an Export Express loan from $250,000 to 
$500,000, and adjusts the guarantee percentage on a loan made 
through the program, increasing the guarantee from 85 percent 
to 90 percent for a loan of less than $350,000, and sets a 75-
percent guarantee for a loan of $350,000 to $500,000.
    Finally, in an effort to facilitate an awareness for the 
SBA's export and trade financing programs among the small 
business community, this legislation requires the SBA to 
publish an annual listing of banks or lending institutions that 
have participated in any of the SBA's export or trade finance 
programs in the previous fiscal year, including the ITL, EWCP, 
and Export Express loan programs. Currently, each SBA District 
Office publishes a list of lenders or lending institutions that 
participate in the Agency's major lending programs, such as the 
7(a) and 504 loan programs.
    However, the list does not specify lenders that participate 
in these specific programs and knowledge of the SBA's export 
and trade financing lies primarily with the 18 export finance 
specialists assigned to USEACs and 9 OIT staff members based in 
Washington, DC. As part of the SBA's efforts to better market 
and promote their trade financing programs and reach more small 
businesses with export potential, the Committee would like to 
see a renewed emphasis on making this and other information 
related to export opportunities for small businesses, readily 
available among District Office staff and also on the SBA's Web 
site.

Section 7--State Trade and Export Promotion Program (STEP)

    While the SBA should be doing more to reach out to small 
businesses with export potential, the Committee realizes that 
presently, the Agency has limited resources for this purpose. 
Although the improvements made by S. 2862 will, in time, enable 
the SBA to perform more outreach to the small business 
community, the Committee believes the Agency should attempt to 
bridge this gap through programs operated in conjunction with 
existing trade and export promotion programs, particularly on 
the state level.
    In an effort to accomplish these goals, S. 2862 establishes 
a three-year State Trade and Export Promotion (STEP) pilot 
program to be administered by the SBA. Modeled after the SBA's 
Small Business Innovation Research (SBIR) Federal and State 
Technology (FAST) program, this program will allow the SBA to 
make grants to states with the goal of establishing or 
supplementing existing export promotion programs. Specifically, 
grants made through the program can be used by states to assist 
eligible small businesses in obtaining or using export related 
resources, removing trade barriers, participation in foreign 
trade missions, foreign market sales trips, subscriptions to 
Department of Commerce services, payment of Web site 
translation fees, design of international marketing media, 
trade show exhibitions, participation in training workshops, 
and other initiatives or other export related activities, as 
defined by the SBA.
    The Committee intends for the STEP program to be accessible 
to all states, but particularly those that have demonstrated 
success in promoting export opportunities for small businesses, 
as well as those states that have demonstrated success in 
promoting exports from small businesses in underserved 
populations. Accordingly, the STEP program gives priority to 
applications by states that: operate existing export promotion 
programs with a focus on small business; have demonstrated 
success in promoting exports for socially and economically 
disadvantaged small businesses, including small businesses 
owned or controlled by women and rural small businesses; a 
state that does not have one of the top 10 highest percentages 
of small exporters; or a state that promotes new-to-market 
export opportunities to the People's Republic of China.
    To protect taxpayer dollars and mitigate the SBA's risk, 
states participating in the program are required to provide 
matching funds. Grants are made on a competitive basis and 
states may only submit one application per fiscal year. For 
states with a high export volume, the federal share of the 
program cost is 65 percent. For states that do not have a high 
export volume, the federal share of the cost is 75 percent. The 
program also includes numerous performance metrics and 
oversight mechanisms, including annual reports to congressional 
authorizing Committees detailing the number and amount of 
grants made by the program during the preceding year, a list of 
the states receiving grants through the program, and the 
activities being performed with the grant by each state. 
Additionally, the SBA Inspector General is required to conduct 
a review of the program and report back to Congressional 
authorizing Committees on the program's effectiveness, 
management structure and oversight mechanisms.

Section 8--Rural export promotion

    The SBA's Office of Advocacy estimates that 20 percent, or 
about 5.5 million of our nation's 27.7 million small 
businesses, are located in rural areas. Small businesses 
located in or serving rural communities often faced high fixed 
costs when doing business due in large part to difficulties 
accessing basic resources such as technology, transportation, 
and other business services. As a result, many small businesses 
located in rural areas face significant obstacles when 
attempting to expand their customer base.
    The total number of small businesses located in rural areas 
that currently export their goods and services is unclear. 
However, according to the most recent data available, the known 
value of exports from non-metropolitan statistical areas (rural 
regions) equaled $79.7 billion, accounting for about 10 percent 
of total U.S. export volume. Despite high, fixed costs 
associated with operating a business located in a rural area, 
this data suggests that a significant number of businesses 
located in rural areas have not only surmounted these 
obstacles, but they have also overcome traditional barriers to 
trade. This also suggests many other small businesses located 
in rural areas have the potential to expand their businesses 
through exporting, if provided adequate access to resources and 
services to overcome traditional barriers to trade.
    The Committee believes that more should be done to assist 
small businesses located in rural areas, particularly those 
looking to expand their customer base through exporting. 
Accordingly, this section of the bill requires those agencies 
most closely involved with either export promotion or rural 
development for small business, including Department of 
Commerce, the Department of Agriculture (USDA) and the SBA, to 
report back to the Committee detailing any programs or services 
that promote exporting opportunities for rural small 
businesses. The report will include information regarding the 
level of coordination between these agencies, the effectiveness 
of existing rural export promotion programs, efforts to market 
existing international trade finance programs through lenders 
that serve rural small businesses or those that participate in 
USDA financing programs, and recommendations to improve the 
existing business counseling and financing programs for each 
Agency.

Section 9--International trade cooperation by small business 
        development centers

    In an effort to better leverage existing federal and local 
export assistance resources, this legislation requires SBDCs 
offering international trade and export counseling services to 
consult regularly with state trade promotion agencies and 
USEACs. Although the SBA has begun working to incorporate other 
existing federal and state-based export assistance resources 
into their resource partner network, there are, at most, 35-40 
international trade centers currently associated with the SBDC 
program. This section of the bill also requires SBDCs to refer 
small businesses to these resources when adequate counseling 
and technical assistance services are not available at a 
center.

Section 10--Small business trade policy

    In addition to improving coordination between federal 
agencies directly involved in export promotion for small 
business, the Committee is concerned that needs and opinions of 
small businesses are not being adequately addressed during the 
negotiation of trade agreements, particularly as it relates to 
trade barriers affecting small businesses. Accordingly, this 
bill directs USTR to notify the SBA Administrator 90 days prior 
to the start of negotiations on a trade deal, allowing the SBA 
time to gather information on the concerns, needs, and opinions 
of the small business community. To ensure that this 
information is taken into account and incorporated into 
negotiations and trade agreements, the SBA Administrator is 
required to submit recommendations to USTR no later than 30 
days before the negotiations.

                           VI. COMMITTEE VOTE

    In compliance with rule XXVI 7(b) of the Standing Rules of 
the Senate, the following vote was recorded on December 17, 
2009.
    A motion by the Chair to adopt the Small Business Export 
Enhancement and International Trade Act of 2009, to reauthorize 
the Small Business Administration's (SBA) international trade 
programs, was approved by an 18-0 recorded vote with the 
following Senators voting in the affirmative: Landrieu, Kerry, 
Levin, Harkin, Lieberman, Cantwell, Bayh, Pryor, Cardin, 
Shaheen, Hagan, Snowe, Bond, Vitter, Thune, Enzi, Isakson, and 
Risch. Senator Wicker: did not vote.

                           VII. COST ESTIMATE

    In compliance with rule XXVI 11(a)(1) of the Standing Rules 
of the Senate, the Committee estimates the cost of the 
legislation will be equal to the amounts discussed in the 
following letter from the Congressional Budget Office:
                                                  January 21, 2010.
Hon. Mary L. Landrieu,
Chair, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
    Dear Madam Chair: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2862, the Small 
Business Export Enhancement and International Trade Act of 
2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 2862--Small Business Export Enhancement and International Trade Act 
        of 2009

    Summary: S. 2862 would require the Small Business 
Administration's (SBA's) Office of International Trade (OIT) to 
develop policies and programs to increase the capacity of small 
businesses to engage in trade with foreign countries. The bill 
would authorize SBA to increase the number of trade finance 
specialists working in SBA's export assistance centers and 
establish a grant program that would provide funds to states to 
help small businesses expand into foreign markets. Finally, the 
bill would make several changes to the 7(a) loan program to 
ease the financial requirements for loan guarantees to small 
businesses engaged in international trade. Assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing S. 2862 would cost $69 million over the 2010-2015 
period. Enacting S. 2862 would not affect direct spending or 
revenues.
    S. 2862 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2862 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--
                                                      ----------------------------------------------------------
                                                        2010    2011    2012    2013    2014    2015   2010-2015
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Grants to States:
    Authorization Level..............................      15      15      15       0       0       0        45
    Estimated Outlays................................       6      20      15       3       1       0        45
Performance Tracking System:
    Estimate Authorization Level.....................       1       2       1       1       1       1         7
    Estimated Outlays................................       0       2       1       1       1       1         6
Additional Staff and Costs:
    Estimated Authorization Level....................       2       3       4       4       4       4        21
    Estimated Outlays................................       1       2       3       4       4       4        18
Total:
    Estimated Authorization Level....................      18      20      20       5       5       5        73
    Estimated Outlays................................       7      24      19       8       6       5        69
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
2862 will be enacted early in 2010, that appropriations will be 
provided in each fiscal year, and that spending will follow 
historical patterns. Based on information from SBA, CBO 
estimates that implementing S. 2862 would cost $69 million over 
the 2010-2015 period.

Grants to states

    S. 2862 would authorize the appropriation of $15 million in 
each of fiscal years 2010, 2011, and 2012 to establish a pilot 
program that would make grants to states to provide assistance 
to small businesses that are planning to expand into foreign 
markets. CBO estimates that implementing the pilot program 
would cost $45 million over the 2010-2015 period, assuming 
appropriation of the specified amounts.

Performance tracking system

    S. 2862 would require SBA to develop a system to track the 
volume of exports produced by small businesses as well as the 
OIT's performance toward goals related to increasing export 
growth. Based on information from SBA, CBO expects that the 
agency would test the tracking system using a pilot program in 
the first year and complete full development of the system two 
years after enactment of the bill. CBO estimates that 
developing and maintaining the system would cost $6 million 
over the 2010-2015 period, assuming appropriation of the 
necessary amounts.

Additional staff and costs

    S. 2862 would direct SBA to fill certain positions to 
support trade financing for small businesses that have been 
vacant since 2003. Further, SBA would be required to increase 
the number of export finance specialists working at its export 
assistance centers within two years of the bill's enactment. 
Based on information from SBA, CBO estimates that 10 additional 
staff positions (two to fill vacancies and eight authorized by 
the bill) would be required and would cost $9 million over the 
2010-2015 period.
    The bill also would require the OIT to develop strategies 
and programs to aid small businesses that are engaged in or 
affected by international trade. Based on information from SBA, 
CBO expects that an additional eight positions would be added 
to the OIT to develop programs that provide technical 
assistance and counseling in areas such as trade disputes and 
remedies as well as intellectual property protection. CBO 
estimates that the additional OIT staff would cost $7 million 
over the 2010-2015 period.
    The bill also would establish a program to certify certain 
employees to provide export assistance services to small 
businesses. The bill would authorize $350,000 per year for SBA 
to reimburse participating business centers for costs incurred 
for the certification program. Based on information from SBA, 
CBO estimates that implementing this provision would cost $2 
million over the 2010-2015 period, assuming appropriation of 
the necessary amounts.

SBA loans

    Finally, the bill would increase the guarantee amount and 
the maximum loan limit for 7(a) loans that would be used for 
international trade or foreign market development. Based on 
information from SBA, CBO expects that these changes to loan 
terms would not have a significant effect on the cost of the 
program because of the small number of international trade 
loans. CBO estimates that implementing these changes would not 
significantly affect discretionary spending.
    Intergovernmental and private-sector impact: S. 2862 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit state governments by 
establishing a grant program for states to help small 
businesses increase their exports. Any costs to state 
governments participating in the program would be incurred 
voluntarily.
    Estimate prepared by: Federal costs: Susan Willie; Impact 
on State, local, and Tribal Governments: Elizabeth Cove 
Delisle; Impact on the private sector: Sam Wice.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                 VIII. EVALUATION OF REGULATORY IMPACT

    In compliance with rule XXVI 11(b) of the Standing Rules of 
the Senate, it is the opinion of the Committee that no 
significant additional regulatory impact will be incurred in 
carrying out the provisions of this legislation. There will be 
no additional impact on the personal privacy of companies or 
individuals who utilize the services provided.

                    IX. SECTION-BY-SECTION ANALYSIS


                       Section-by-Section Summary


Section 1. Short title

Section 2. Definitions

Section 3. Office of International Trade

    Amends the Small Business Act to establish an Associate 
Administrator for International Trade responsible for 
administering and overseeing the SBA's international trade 
programs and export promotion efforts.

Section 4. Duties of the Office of International Trade

            Information distribution network
    Requires the Associate Administrator to maintain a 
distribution network in cooperation with other Federal 
agencies, utilizing SBA regional and district offices, SDBCs, 
WBCs, and other SBA resource partners to disseminate 
information regarding trade promotion, trade finance, trade 
adjustment, and trade assistance programs to small businesses. 
Requires OIT to establish annual goals related to the 
enhancement of export capabilities of small businesses and 
small manufacturers, enabling them to better compete against 
foreign entities. Finally, this section requires the office 
aggressively market and promote trade programs available 
through the SBA.
            Regional and district office staffing
    Requires the Associate Administrator to ensure that each 
SBA regional office is staffed by a full time export 
development specialist and also requires that one employee in 
each district office be designated as the primary contact for 
small business owners seeking information on the SBA's export 
and trade assistance programs.
            Training programs
    Establishes annual training programs for employees of OIT 
and also requires the Associate Administrator to develop 
training programs for exporters and lenders in conjunction with 
the Commerce and other relevant federal agencies.
            Export and trade counseling
    Requires the SBA to develop criteria to certify employees 
of each SBDC state network in export assistance counseling. 
WBCs are also eligible to participate in the program. The 
Administrator is required to reimburse SBDCs and WBCs for any 
fees associated with the certification process.
            Trade dispute assistance
    Directs the Associate Administrator to carry out a 
comprehensive program to provide technical assistance and 
reference materials to small businesses for the purpose of 
resolving trade disputes, or to address unfair international 
trade law practices.
            Oversight of export finance programs
    Directs the Associate Administrator to appoint at least one 
trade finance specialist within OIT to oversee the agency's 
export finance programs and to assist SBA employees with trade 
finance issues.
            Performance metrics and reporting requirements
    Directs the Associate Administrator, in coordination with 
TPCC member agencies and the SBDC network, to develop and 
establish a system for tracking exports by small businesses. 
This section also directs the Associate Administrator to 
develop performance measures to support and assist with 
development of export growth goals for the office.
    Finally, this section also establishes annual reporting 
metrics for OIT and requires the Administrator to submit a 
report to Congress within 60 days of enactment of the 
legislation, regarding the travel activities of the office 
during the last five years.

Section 5. Export assistance centers

            Export finance specialist staffing levels
    Directs the SBA Administrator to ensure that there are at 
least 22 SBA specialists assigned to USEACs by January 1, 2010. 
Additionally, this section requires that at least three export 
finance specialists are assigned to each SBA region within two 
years of enactment, bringing the total number to 30.
            Assignment of export finance specialists and annual goals
    Gives priority of placement in filling staff vacancies to 
those centers that have been without an export finance 
specialist since 2003, and requires that the Associate 
Administrator designate an individual within OIT to oversee the 
activities of export finance specialists assigned to USEACs. 
Additionally, the legislation directs the Associate 
Administrator to establish shared annual goals for the centers 
in cooperation with Commerce and Ex-Im Bank.
            Study on high and low volume export areas
    This section directs the SBA to conduct a bi-annual study 
analyzing gaps in coverage for export finance specialists 
assigned to USEACs located in high and low-volume export areas. 
The Administrator is required to submit a report to Congress on 
the results of the study, as well as recommendations regarding 
future assignments of specialists.

Section 6. International trade finance programs

            International trade loans (ITL)
    This section raises the maximum amount of an ITL from $2 
million to $5 million and increases the total outstanding 
amount of an ITL guaranteed by the SBA from $1.5 million to 
$4.5 million, reflecting a newly established 90-percent 
guarantee for the program. It allows working capital as an 
eligible use of ITLs, and increases the maximum amount 
available for export working capital, supplies, or financing. 
In addition, it allows ITLs to be secured by a second lien 
position on property or equipment financed by the loan, or on 
other assets of the small business.
            Export working capital loan program (EWCP)
    Increases the maximum amount of an EWCP from $2 million to 
$5 million, and allows any lender participating in the Ex-Im 
Bank's Delegated Authority Lender Program to participate in the 
SBA's Preferred Lenders Program. Additionally, this section 
prohibits the Administrator from collecting a fee on a EWCP 
loan more than once a year and prevents the Administration from 
assessing a fee on capital that is not accessed by a small 
business.
            Export express program
    Raises the maximum amount of an Export Express loan from 
$250,000 to $500,000. This section also adjusts the guarantee 
on a loan made through the program, increasing the guarantee 
from 85-percent to 90-percent for a loan that is less than 
$350,000, and establishes a 75-percent guarantee for a loan of 
$350,000 to $500,000.
            Annual listing of export finance lenders
    Requires the Administrator to publish an annual listing of 
banks or lending institutions that participated in any of the 
SBA's export or trade finance programs in the previous fiscal 
year, including the ITL, EWCP, and Export Express loan 
programs.

Section 7. State Trade and Export Promotion Grant Program (STEP)

            Establishment and eligibility
    Establishes a three-year trade and export promotion pilot 
program. Modeled after the SBA's SBIR-FAST program, the purpose 
of STEP is to make grants to states with the goal of increasing 
the number of small businesses that export, or to increase the 
value of the exports by small businesses. Grants can be used to 
assist eligible small businesses in obtaining or using export 
related resources or removing trade barriers, including 
participation in foreign trade missions, foreign market sales 
trips, subscriptions to Department of Commerce services, 
payment of website translation fees, the design of 
international marketing media, trade show exhibitions, 
participation in training workshops, and other initiatives as 
determined by the SBA.
    Priority is given to applicants from states that: operate 
export promotion programs with a focus on small business; have 
demonstrated success in promoting exports for socially and 
economically disadvantaged small businesses, small businesses 
owned or controlled by women and rural small businesses; do not 
have one of the top 10 highest percentages of small exporters; 
or a state that promotes new-to-market export opportunities to 
the People's Republic of China.
            Competitive requirements and federal share
    Grants are made on a competitive basis and states may only 
submit one application per fiscal year. The total amount of 
funding awarded to the 10 states with the highest percentage of 
small exporters cannot be more than 50-percent of funds 
appropriated in a fiscal year. The federal share of the costs 
is not more than 65-percent for a state with a high export 
volume, and not more than 75-percent for a state that does not 
have a high export volume.
            Reporting requirements
    Requires the Associate Administrator to submit a report to 
Congress that includes a description of the procedures for 
administering the program, as well as a management plan and a 
description of the merit based review process.
    This section also requires the Associate Administrator to 
submit an annual report to Congress outlining the number and 
dollar amount of grants made under the program during the 
preceding year, the activities being performed with the grant, 
and the effect of each grant on exports by eligible small 
businesses in states participating in the program. A review of 
the program by the SBA's Inspector General is also required.
            Authorization of appropriations
    The bill authorizes $15 million to be appropriated for each 
fiscal year, FY 2010-FY 2012, to carry out the program.

Section 8. Rural export promotion

    This section requires the Administrator, in coordination 
with the Secretary of Commerce and the Secretary of 
Agriculture, to submit a report to Congress detailing any 
programs offered by their respective agencies that promote 
export opportunities for rural small businesses. The report 
will detail the level of coordination between agencies involved 
administering these programs, and will provide recommendations 
regarding improvements to existing programs, or for the 
creation of new rural export promotion programs for small 
businesses.

Section 9. International trade cooperation by small business 
        development centers

    Requires that SBDCs offering international trade counseling 
services consult with state trade promotion agencies and 
USEACs. This provision also requires SBDCs to refer small 
businesses to these resources as appropriate.

Section 10. Small business trade policy

    Directs USTR to notify the SBA 90 days prior to the start 
of trade negotiations. This section also requires SBA to submit 
recommendations to the USTR no later than 30 days before the 
start of trade negotiations.

                                  
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