[House Report 113-461]
[From the U.S. Government Publishing Office]


113th Congress  }                                          {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                          {    113-461

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



 
       SMALL BUSINESS DEVELOPMENT CENTERS IMPROVEMENT ACT OF 2014

                                _______
                                

  May 21, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Graves of Missouri, from the Committee on Small Business, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 4121]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 4121) to amend the Small Business Act to provide for 
improvements to small business development centers, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
   I. Amendment.......................................................2
  II. Purpose of the Bill and Summary.................................3
 III. Background and the Need for Legislation.........................4
  IV. Hearings........................................................5
   V. Committee Consideration.........................................6
  VI. Committee Votes.................................................6
 VII. Section-by-Section Analysis of H.R. 4121........................7
VIII. Congressional Budget Cost Estimate.............................10
  IX. Unfunded Mandates..............................................10
   X. New Budget Authority, Entitlement Authority, and Tax Expenditur11
  XI. Oversight Findings.............................................11
 XII. Statement of Constitutional Authority..........................11
XIII. Congressional Accountability Act...............................11
 XIV. Federal Advisory Committee Statement...........................11
  XV. Statement of No Earmarks.......................................11
 XVI. Statement of Duplication of Federal Programs...................11
XVII. Disclosure of Directed Rule Makings............................12
XVIII.Performance Goals and Objectives...............................12

 XIX. Changes in Existing Law Made by the Bill, as Reported..........12

                              I. Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Small Business Development Centers 
Improvement Act of 2014''.

SEC. 2. USE OF AUTHORIZED ENTREPRENEURIAL DEVELOPMENT PROGRAMS.

  The Small Business Act (15 U.S.C. 631 et seq.) is amended by adding 
at the end the following:

``SEC. 48. USE OF AUTHORIZED ENTREPRENEURIAL DEVELOPMENT PROGRAMS.

  ``(a) Expanded Support for Entrerpreneurs.--
          ``(1) In general.--Notwithstanding any other provision of 
        law, the Administrator shall only use the programs authorized 
        in sections 7(j), 7(m), 8(a), 8(b)(1), 21, 22, 29, and 32 of 
        this Act, and sections 358 and 389 of the Small Business 
        Investment Act to deliver entrepreneurial development services, 
        entrepreneurial education, business incubation services, growth 
        acceleration services, support for the development and 
        maintenance of clusters, or business training.
          ``(2) Exception.--This section shall not apply to services 
        provided to assist small business concerns owned by an Indian 
        tribe.
  ``(b) Annual Report.--Beginning on the first December 1 after the 
date of enactment of this subsection, the Administrator shall annually 
report to the Committee on Small Business of the House of 
Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate on all entrepreneurial development 
activities undertaken in the current fiscal year. This report shall 
include--
          ``(1) a description and operating details for each program 
        and activity;
          ``(2) operating circulars, manuals, and standard operating 
        procedures for each program and activity;
          ``(3) a description of the process used to award grants under 
        each program and activity;
          ``(4) a list of all awardees, contractors, and vendors 
        (including organization name and location) and the amount of 
        awards for the current fiscal year for each program and 
        activity;
          ``(5) the amount of funding obligated for the current fiscal 
        year for each program and activity; and
          ``(6) the names and titles for those individuals responsible 
        for each program and activity.''.

SEC. 3. MARKETING OF SERVICES.

  Section 21 of the Small Business Act (15 U.S.C. 648) is amended by 
adding at the end the following:
  ``(o) No Prohibition of Marketing of Services.--The Administrator 
shall not prohibit applicants receiving grants under this section from 
marketing and advertising their services to individuals and small 
businesses.''.

SEC. 4. CONFIDENTIALITY REQUIREMENTS.

  Section 21(a)(7)(A) of the Small Business Act (15 U.S.C. 
648(a)(7)(A)) is amended by inserting after ``under this section'' the 
following: ``to any State, local or Federal agency or third party''.

SEC. 5. DATA COLLECTION.

  (a) In General.--Section 21(a)(3)(A) of the Small Business Act (15 
U.S.C. 648(a)(3)(A)) is amended--
          (1) in clause (ii), by striking ``as provided in this section 
        and'' and inserting ``as provided in this section,''; and
          (2) by inserting before the period at the end the following: 
        ``, and (iv) governing data collection activities related to 
        applicants receiving grants under this section''.
  (b) Annual Report on Data Collection.--Section 21 of the Small 
Business Act (15 U.S.C. 648), as amended by section 3 of this Act, is 
further amended by adding at the end the following:
  ``(p) Annual Report on Data Collection.--The Administrator shall 
report annually to the Committee on Small Business of the House of 
Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate on data collection activities related to 
the Small Business Development Center program.''.

SEC. 6. MATCHMAKING AND OTHER EVENTS.

  Section 21(a)(3)(C) of the Small Business Act (15 U.S.C. 
648(a)(3)(C)) is amended to read as follows:
          ``(C) Such participation in private partnerships and 
        cosponsorships with the Administration shall not limit Small 
        Business Development Centers from collecting fees or other 
        income related to the operation of such partnerships and 
        cosponsorships.''.

SEC. 7. EQUITY FOR SBDCS.

  Section 21(a)(4)(C)(v)(I) of the Small Business Act (15 U.S.C. 
648(a)(4)(C)(v)(I)) is amended--
          (1) in item (aa), by striking ``; and'' and inserting a 
        period; and
          (2) by striking item (bb).

SEC. 8. AWARD OF GRANTS TO SBDCS.

  Section 21 of the Small Business Act (15 U.S.C. 648), as amended by 
sections 3 and 5 of this Act, is further amended by adding at the end 
the following:
  ``(q) Limitation on Award of Grants.--Except for not-for-profit 
institutions of higher education, notwithstanding any provision of law, 
the Administrator shall not award grants (including contracts and 
cooperative agreements) under this section to any entity other than 
those that received grants (including contracts and cooperative 
agreements) under this section prior to September 30, 2014, and that 
seek to renew such grants (including contracts and cooperative 
agreements) after such date.''.

SEC. 9. DISASTER REFORMS.

  Section 21(b)(3) of the Small Business Act (15 U.S.C. 648(b)(3)) is 
amended--
          (1) by striking ``(3) At the discretion'' and inserting the 
        following:
          ``(3) Assistance to out-of-state small businesses.--
                  ``(A) In general.--At the discretion''; and
          (2) by adding at the end the following:
                  ``(B) Disaster recovery assistance.--
                          ``(i) In general.--At the discretion of the 
                        Administrator, the Administrator may authorize 
                        a small business development center to provide 
                        assistance, as described in subsection (c), to 
                        a small business concern located outside of the 
                        State, without regard to geographic proximity, 
                        if the small business concern is located in an 
                        area for which the President has declared a 
                        major disaster under section 401 of the Robert 
                        T. Stafford Disaster Relief and Emergency 
                        Assistance Act (42 U.S.C. 5170), during the 
                        period of the declaration.
                          ``(ii) Continuity of services.--A small 
                        business development center that provides 
                        counselors to an area described in clause (i) 
                        shall, to the maximum extent practicable, 
                        ensure continuity of services in any State in 
                        which the small business development center 
                        otherwise provides services.
                          ``(iii) Access to disaster recovery 
                        facilities.--For purposes of this subparagraph, 
                        the Administrator shall, to the maximum extent 
                        practicable, permit the personnel of a small 
                        business development center to use any site or 
                        facility designated by the Administrator for 
                        use to provide disaster recovery assistance.''.

SEC. 10. INCLUSIONS OF ENTREPRENEURSHIP TRAINING FOR UNEMPLOYED 
                    INDIVIDUALS.

  Section 21(c)(3)(A) of the Small Business Act (15 U.S.C. 
648(c)(3)(A)) is amended--
          (1) in clause (iii), by striking ``and'' at the end;
          (2) in clause (iv), by inserting ``and'' at the end; and
          (3) by adding at the end the following:
                  ``(v) educating unemployed individuals on 
                entrepreneurship and working with such individuals to 
                start new businesses;''.

                      II. Purpose and Bill Summary

    The purpose of H.R. 4121, the ``Small Business Development 
Centers Improvement Act of 2014,'' is to amend the Small 
Business Act (the Act)\1\ to improve the small business 
development centers (SBDCs) program and ensure SBDCs continue 
successful delivery of entrepreneurial development services to 
small businesses. SBDCs represent a key component of the Small 
Business Administration's (SBA) counseling and training 
programs for small businesses. In order to continue these 
services, H.R. 4121 makes a variety of improvements, such as 
allowing SBDCs to market their private programs; strengthening 
confidentiality provisions; allowing SBDCs to maintain services 
in disaster stricken areas; and ensuring limited funds are not 
diverted to SBA administrative expenses.
---------------------------------------------------------------------------
    \1\Originally, title II of the Act of July 30, 1953, c. 282, 67 
Stat. 232 was designated as the Small Business Act of 1953. A plethora 
of amendments in subsequent Congresses led to a rewrite in 1958. Pub. 
L. No. 85-536, Sec. 1, 72 Stat. 384 (1958). The Act is codified at 15 
U.S.C. Sec. Sec. 631-657s.
---------------------------------------------------------------------------
    Further, the legislation creates a new section of the Act 
to strengthen delivery and implementation of small business 
entrepreneurial development programs. It does this by requiring 
that the Administrator of the SBA (Administrator) utilize pre-
existing resource partners\2\ to deliver agency-sponsored 
initiatives. Additionally, this section strengthens 
congressional oversight of entrepreneurial development (ED) 
programs by requiring better data collection as well as an 
annual report by SBA to the committees of jurisdiction on the 
ED activities occurring during the year.
---------------------------------------------------------------------------
    \2\In this case, resource partners refers to the non-federal 
partners that provide training authorized by the Small Business Act and 
funded, in part, by federal appropriations. These include SBDCs, 
Women's Business Centers, Veteran's Business Outreach Centers, and 
SCORE.
---------------------------------------------------------------------------

                       III. Need for Legislation

    The United States has consistently recognized the need to 
encourage entrepreneurship as a means to combat unemployment 
and promote economic development. Therefore, the SBA's mission, 
as evinced in the Small Business Act, 15 U.S.C. Sec. Sec. 631-
57p, is to ``aid, counsel, assist, and protect, insofar as is 
possible, the interests of small business concerns. . .'' Id. 
at 631(a). In carrying out its mission to provide small 
businesses with assistance, the SBA oversees a number of 
programs that offer counseling to potential entrepreneurs and 
extant small business owners. The SBA itself, does not 
generally carry out this training; in most circumstances, the 
agency enters into a cooperative agreement with another 
organization to offer such services. The cooperators are termed 
as resource partners by the SBA and are required to obtain a 
significant portion of their operating budgets from non-federal 
sources (be they private donors or state funds).
    The largest such program is that set out in Sec. 21 of the 
Act, 15 U.S.C. Sec. 648. The program is denominated as the SBDC 
Program because the resource partners, SBDC grantees, operate 
service centers where small business owners and potential 
entrepreneurs can receive free counseling. Typically, the 
grantee is an institution of higher education (but not always) 
and the grantee agrees to offer these services throughout a 
state or through a portion of the state.\3\ Since its 
inception, the SBDC program has been extremely successful in 
training and counseling small firms. For example, in fiscal 
year (FY) 2013, SBDCs trained over 330,000 clients and 
counseled over 201,000 clients. Further, in FY 2013 SBDCs 
assisted small business clients in obtaining $4.5 billion in 
financing.
---------------------------------------------------------------------------
    \3\The grantee agrees to provide services throughout a state. For 
reasons not relevant to H.R. 4121, two states--California and Texas--do 
not have statewide grantees.
---------------------------------------------------------------------------
    While the SBDC program clearly has been successful, the 
program has not received a comprehensive modernization in 
several years. The Committee also has learned of certain 
operational difficulties imposed on SBDC grantees by SBA that 
hinder their ability to offer their services to small business 
owners. The Committee determined that these operational issues 
need legislative rectification. The majority of these are minor 
corrections, such as statutorily prescribing that SBDCs may 
market their services, collect fees at partnership events, and 
eliminating the Administrator's ability to reimburse the SBA 
for administrative expenses associated with the SBDC program. 
In this case, as federal funding becomes scarcer, updating the 
Act to ensure SBDCs receive all funding allocated in the budget 
and are able obtain matching funds through self-promotion of 
the benefits of their program and fostering a fruitful 
relationship with local community partners is necessary.
    The SBA has three other resource partners focused on 
entrepreneurial training. Although their missions and scope of 
service territories also vary, the Women's Business Centers 
(WBCs) and Veteran Business Outreach Centers (VBOCs) operate in 
a fashion akin to that of the SBDCs. The other major 
entrepreneurial outreach program, SCORE, operates somewhat 
differently. Although SCORE also offers free advice (from 
volunteer active and retired business executives), SCORE is 
provided almost all of its funds from those appropriated by 
Congress. The SBA also is required to provide offices and other 
ancillary services to SCORE at no charge to SCORE or their 
clients.
    A number of problems have come to the Committee's attention 
concerning the operation of these ED programs.\4\ Most 
significantly, SBA, rather than fully funding their resource 
partners, diverts available funds to the creation of their own 
initiatives. For example, in SBA's most recent budget request, 
while the overall agency budget request for specifically 
authorized ED programs remains static, SBA requested a total of 
$39 million for SBA-created initiatives an--increase of $12 
million from what was requested and appropriated in FY 2014. 
These initiatives often duplicate the efforts of the resource 
partners but do not have sound plans of operation or have 
appropriate measurable metrics to measure the initiatives 
success. Despite assurances from SBA that the agencies own 
initiatives do not divert funds from proven entrepreneurial 
outreach efforts, the Committee believes that the agency's 
discretion must be circumscribed to ensure that its 
longstanding resource partners can fulfill their mission. 
Therefore, this legislation adds a new section to the Act which 
requires SBA to deliver these initiatives through the resource 
partners. This is necessary to reduce duplicative, fragmented, 
and overlapping programs which have not been authorized by 
Congress and to ensure that established programs, such as 
SBDCs, are engaged in delivering the initiatives.
---------------------------------------------------------------------------
    \4\These concerns are clearly demonstrated and laid out in more 
detail by the Views and Estimates of the Committee on Small Business 
transmitted to Committee on the Budget for FY2012, FY2013, and FY 2014.
---------------------------------------------------------------------------

                              IV. Hearings

    In the 113th Congress, issues related to SBDCs and 
oversight of ED programs were addressed at full committee 
hearings. One hearing, entitled ``Entrepreneurial Assistance: 
Examining Inefficiencies and Duplication Across Federal 
Programs'' on March 20, 2013, specifically examined 
ineffectiveness, inefficiency, and pleonasms in the SBA 
entrepreneurial assistance programs. On April 18, 2013, the 
full committee held a hearing entitled ``The Budget Outlook for 
the Small Business Administration'' at which members, on a 
bipartisan basis, raised concerns with the then Administrator 
about the impact that these new initiatives would have on 
existing resource partners.

                       V. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on March 5, 2014, and ordered H.R. 4121 
reported, as amended, to the House by a voice vote at 4:21 pm. 
During the markup, two amendments were offered, and both were 
adopted. Disposition of the amendments is addressed below and 
is based on the order amendments were filed with the Clerk of 
the Committee and not necessarily in the order that they were 
considered at the markup.
    Amendment Number One filed by Mr. Murphy (D-FL) amends 
Sec. 21(b)(3) of the Small Business Act to allow SBDCs to 
provide assistance in the event of a major disaster outside 
their immediate geographic area to ensure a continuity of 
services. Amendment Number One was adopted by a voice vote at 
4:15 pm.
    Amendment Number Two filed by Mr. Payne (D-NJ) amends 
Sec. 21(c)(3) of the Small Business Act to provide that SBDCs 
also work with unemployed individuals in one-on-one counseling 
sessions. Amendment Number Two was adopted by a voice vote at 
4:20 pm.

                          VI. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report the legislation and amendments 
thereto. No recorded votes were taken in consideration of H.R. 
4121.

                         Amendment to H.R. 4121

                    Offered by Mr. Murphy of Florida

  Add, at the end of the bill, the following:

SEC. 9. DISASTER REFORMS.

  Section 21(b)(3) of the Small Business Act (15 U.S.C. 648(b)(3)) is 
amended--
          (1) by striking ``(3) At the discretion'' and inserting the 
        following:
          ``(3) Assistance to out-of-state small businesses.--
                  ``(A) In general.--At the discretion''; and
          (2) by adding at the end the following:
                  ``(B) Disaster recovery assistance.--
                          ``(i) In general.--At the discretion of the 
                        Administrator, the Administrator may authorize 
                        a small business development center to provide 
                        assistance, as described in subsection (c), to 
                        a small business concern located outside of the 
                        State, without regard to geographic proximity, 
                        if the small business concern is located in an 
                        area for which the President has declared a 
                        major disaster under section 401 of the Robert 
                        T. Stafford Disaster Relief and Emergency 
                        Assistance Act (42 U.S.C. 5170), during the 
                        period of the declaration.
                          ``(ii) Continuity of services.--A small 
                        business development center that provides 
                        counselors to an area described in clause (i) 
                        shall, to the maximum extent practicable, 
                        ensure continuity of services in any State in 
                        which the small business development center 
                        otherwise provides services.
                          ``(iii) Access to disaster recovery 
                        facilities.--For purposes of this subparagraph, 
                        the Administrator shall, to the maximum extent 
                        practicable, permit the personnel of a small 
                        business development center to use any site or 
                        facility designated by the Administrator for 
                        use to provide disaster recovery assistance.''.
                               __________

                         Amendment to H.R. 4121

                   Offered by Mr. Payne of New Jersey

  Add, at the end of the bill, the following:

SEC. 9. INCLUSIONS OF ENTREPRENEURSHIP TRAINING FOR UNEMPLOYED 
                    INDIVIDUALS.

  Section 21(c)(3) of the Small Business Act (15 U.S.C. (c)(3)) is 
amended--
          (1) in clause (iii), by striking ``and'' at the end;
          (2) in clause (iv), by inserting ``and'' at the end; and
          (3) by adding at the end the following:
                          ``(v) educating unemployed individuals on 
                        entrepreneurship and working with such 
                        individuals to start new businesses;''.
                               __________

        VII. Section-by-Section Analysis of H.R. 4121 as Amended


Section 1. Short title

    This section provides that the bill may be cited as the 
``Small Business Development Centers Improvement Act of 2014.''

Section 2. Use of authorized entrepreneurial development programs

    This section amends the Act (15 U.S.C. Sec. Sec. 631-57s) 
by creating a new section 48 of the Act.
            Subsection (a)--Expanded support for entrepreneurs
    Currently, the Administrator is creating and separately 
funding initiatives developed by the agency. Subsection (a) 
changes this practice to prohibit the Administrator from 
utilizing unauthorized programs to deliver ED services and 
provides that all SBA-created initiatives must be delivered 
through those authorized programs specifically cross-referenced 
in this subsection. As resource partners are the only entities 
with specific statutory authority to deliver ED support through 
the SBA, this promotes operational efficiencies, benefitting 
both small businesses and the taxpayer. Further, given the 
abundance of ED programs across federal agencies as identified 
by GAO duplication reports, the statutory restriction in new 
Sec. 48 will help reduce overlapping and duplicative efforts 
without harming the ability of small businesses to obtain the 
necessary counseling and training they require. The only 
exception to this overall prohibition, in subsection (a)(2)(A) 
relates to assistance offered to small business concerns owned 
by an Indian tribe.
            Subsection (b)--Annual report
    Given that SBA-led initiatives are created under the SBA's 
general authority to offer assistance to small businesses, 
these programs do not contain the appropriate performance 
metrics or operating standards that would result had Congress 
specifically provided for their establishment. This subsection 
makes an effort to fill that gap in part by requiring the SBA 
to issue a report to Congress delineating all ED activities 
during the current fiscal year. This subsection proscribes 
items which must be included within the report including: a 
description and operating details for each program and 
activity; operating circulars, manuals, and standard operating 
procedures for each program and activity; a list of all 
awardees, contractors, and vendors (including organization name 
and location) and the amounts of awards for the current fiscal 
year for each program and activity; the amount of funding 
obligated for the current fiscal year for each program and 
activity; and the names and titles for those individuals 
responsible for each program and activity. The data required in 
the report will help ensure that the Committees of jurisdiction 
have necessary information to ascertain whether taxpayers 
dollars are being spent wisely.

Section 3. Marketing of services

    The Act is currently silent on the question of whether 
SBDCs can market and advertise their products and services. 
This section amends Sec. 21 of the Act by adding a new 
subsection (o), which ensures the SBDCs are able to market and 
advertise their products and services. Greater awareness of the 
services available through the SBDCs will allow more small 
businesses to receive entrepreneurial assistance without 
imposing any more financial burdens on SBDCs, the SBA, or the 
taxpayer.

Section 4. Confidentiality requirements

    The SBA's current operational guidelines for the SBDC 
program require that SBDCs collect certain information on the 
businesses they counsel. This information is the basis for some 
of the performance metrics the agency uses to determine the 
effectiveness of the SBDCs in fulfilling their mission. Some of 
the information collected for this purpose, while relevant and 
necessary for the SBA and SBDCs, is sensitive information that 
small businesses wish to have treated as confidential. The 
Committee has become aware of instances in which the SBA is 
sharing this information with third parties. This sensitive 
information--such as the name of business--is not necessary to 
develop performance metrics. However, its forced disclosure 
could dissuade businesses from seeking assistance through the 
SBDCs, thereby undermining the intent of Congress when it 
created the SBDCs. Therefore, this section amends 
Sec. 21(a)(7)(A) of the Act to prohibit the SBA from 
distributing and sharing SBDC client information with other 
parties. This reinforces the Committee's longstanding efforts 
to ensure the confidentiality of information that small 
businesses provide to SBDCs.

Section 5. Data collection

    In order for the SBA to provide Congress with information 
to properly evaluate ED programs, SBA has been revising forms, 
such as the EDMIS form, to gather better performance data. 
During this process, there have been concerns that some of the 
required information would force SBDCs to capture and report 
data that small businesses are reluctant to share. In cases 
where this information is of little value to the government, 
these requirements place an unnecessary burden on the SBDCs and 
will dissuade small businesses from seeking SBDC assistance.
    To correct this problem, H.R. 4121 amends Sec. 21(a)(3)(A) 
of the Act to require the Administrator to consult with the 
Association of Small Business Development Centers on the 
creation of documents governing data collection activities 
related to SBDCs. Section 21 is further amended by adding a new 
subsection (p) which requires the Administrator to provide an 
annual report on data collection activities related to the SBDC 
program to the appropriate Congressional committees.

Section 6. Matchmaking and other events

    In order to obtain funding, SBDC grantees must match funds 
provided by the federal government with non-federal sources, 
such as private donations or state funds. Therefore, SBDCs 
often work alongside other community partners, such as a local 
chamber of commerce, to host events as a partnership or a co-
sponsor. In these instances, a participation fee may be charged 
to businesses by the partnership or cosponsoring party. 
However, under current law SBDCs are not allowed to collect the 
necessary fee. Therefore, this section amends Sec. 21(a)(3)(C) 
of the Act to permit SBDCs to collect fees or other income 
related to the operation of partnerships or cosponsorships. 
This authorization does not alter the no-cost counseling 
provided by SBDCs to individual small businesses.

Section 7. Equity for SBDCs

    Under current law, up to $500,000 of authorized funding to 
SBDCs could be utilized by the Administrator to pay for 
examination expenses associated with reviewing SBDCs. No other 
ED program has an allocation of funds to reimburse the SBA for 
the agency's administrative expenses. This section eliminates 
the award of $500,000 of SBDC grant monies to reimburse the SBA 
for program administration. The Committee believes that the SBA 
has sufficient resources in its salaries and expense account to 
cover the cost of administering the SBDC program.

Section 8. Award of grants to SBDCs

    A majority of SBDC grantees are partnered with higher 
education institutions which bolster SBDCs ability to obtain 
private matching funding as required under law. This section 
adds a new subsection (q) to Sec. 21 of the Act by prohibiting 
entities other than institutions of higher education from 
becoming grantees under Sec. 21.
    An exception is provided for current SBDC grantees who are 
not institutions of higher education. These institutions may 
continue to renew their status as a grantee until they no 
longer wish to do so or the SBA determines that these 
grandfathered grantees are incapable of providing such 
services.

Section 9. Disaster reforms

    Currently, when a President declares an area a major 
disaster, SBDCs located outside that geographic area are 
prohibited from assisting small firms in the disaster area. 
This section amends Sec. 21(b)(3) of the Act to allow the 
Administrator to authorize SBDCs to provide assistance outside 
their immediate geographic area in the event of a major 
disaster as declared by the President to ensure a continuity of 
services to small firms.

Section 10. Inclusions of entrepreneurship training for unemployed 
        individuals

    This section amends Sec. 21(c)(3)(A) of the Act to provide 
that SBDCs also work with unemployed individuals in one-on-one 
counseling sessions to encourage entrepreneurship. As SBDCs 
already provide no-cost training to all individuals regardless 
of employment status, the Committee believes that this 
provision will highlight the potential for entrepreneurship 
among the unemployed.

                VIII. Congressional Budget Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 8, 2014.
Hon. Sam Graves,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4121, the Small 
Business Development Centers Improvement Act of 2014.
    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.

H.R. 4121--Small Business Development Centers Improvement Act of 2014

    H.R. 4121 would direct the Small Business Administration 
(SBA) to develop procedures to govern the collection of data 
about Small Business Development Centers (SBDCs) that receive 
grants from the SBA. The bill also would require the SBA to 
prepare two new reports, one describing the agency's efforts to 
promote entrepreneurship and another providing information 
about the SBA's efforts to collect data from SBDCs. Finally, 
the bill would amend rules affecting SBDCs by, for instance, 
allowing SBDCs to market their services.
    Based on information from the SBA, CBO estimates that 
implementing H.R. 4121 would cost about $1 million per year 
over the 2015-2019 period, assuming appropriation of the 
necessary amounts, for additional data collection and 
monitoring activities. Enacting H.R. 4121 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    H.R. 4121 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                         IX. Unfunded Mandates

    H.R. 4121 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act, Pub. 
L. No. 104-4, and would impose no costs on state, local or 
tribal governments.

  X. New Budget Authority, Entitlement Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of Rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority and tax expenditures.
    The Committee does not adopt as its own the estimate of new 
budget authority contained in the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to 402 of 
the Congressional Budget Act of 1974. While the Congressional 
Budget Office estimates a cost of $1 million over 5 years to 
implement H.R. 4121, the Committee does not believe that this 
legislation will require any additional budget authority or 
expenditures. As the bill authorizes no new funding and simply 
directs how current appropriations should be spent, the 
Committee believes that no additional funds should not be 
necessary to implement this legislation.

                         XI. Oversight Findings

    In accordance with clause (2)(b)(1) of rule X of the Rules 
of the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 4121 are incorporated into the descriptive 
portions of this report.

               XII. Statement of Constitutional Authority

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

                 XIII. Congressional Accountability Act

    H.R. 4121 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of 102(b)(3) of Pub. L. No. 104-1.

             XIV. Federal Advisory Committee Act Statement

    H.R. 4121 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App. 2.

                      XV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 4121 does not 
contain any congressional earmarks, limited tax benefits or 
limited tariff benefits as defined in subsections (d), (e) or 
(f) of clause 9 of rule XXI of the rules of the House.

           XVI. Statement of Duplication of Federal Programs

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House, H.R. 4121 seeks to reduce duplicative federal programs 
for entrepreneurial development as identified in various GAO 
reports. Further, the findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 4121 are incorporated into the descriptive 
portions of this report and will help eliminate duplication of 
federal assistance to small businesses.

               XVII. Disclosure of Directed Rule Makings

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House, H.R. 4121 does not direct any rulemaking.

                XVIII. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
    H.R. 4121 includes a number of provisions designed to 
improve Small Business Developments Centers as authorized in 
the Small Business Act, increase transparency in 
entrepreneurial development programs, and promote the work of 
small businesses.

       XIX. 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. 21. (a)(1) * * *

           *       *       *       *       *       *       *

  (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 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] as provided in 
this section, (iii) governing the general operations and 
administration of the Small Business Development Center 
Program, specifically including the development of regulations 
and a uniform negotiated cooperative agreement for use on an 
annual basis when entering into individual negotiated 
agreements with small business development centers, and (iv) 
governing data collection activities related to applicants 
receiving grants under this section.

           *       *       *       *       *       *       *

          [(C) Whereas On an annual basis, the Small Business 
        Development Center shall review and coordinate public 
        and private partnerships and cosponsorships with the 
        Administration for the purpose of more efficiently 
        leveraging available resources on a National and a 
        State basis.]
          (C) Such participation in private partnerships and 
        cosponsorships with the Administration shall not limit 
        Small Business Development Centers from collecting fees 
        or other income related to the operation of such 
        partnerships and cosponsorships.
  (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).]

           *       *       *       *       *       *       *

          (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 to any 
                State, local or Federal agency or third party 
                without the consent of such individual or small 
                business concern, unless--
                          (i) * * *

           *       *       *       *       *       *       *

  (b)(1) * * *

           *       *       *       *       *       *       *

          [(3) At the discretion]
          (3) Assistance to out-of-state small businesses._
                  (A) In general._At the discretion of the 
                Administration, the Administration is 
                authorized to permit a small business 
                development center to provide advice, 
                information and assistance, as described in 
                subsection (c), to small businesses located 
                outside the State, but only to the extent such 
                businesses are located within close 
                geographical proximity to the small business 
                development center, as determined by the 
                Administration.
                  (B) Disaster recovery assistance.--
                          (i) In general.--At the discretion of 
                        the Administrator, the Administrator 
                        may authorize a small business 
                        development center to provide 
                        assistance, as described in subsection 
                        (c), to a small business concern 
                        located outside of the State, without 
                        regard to geographic proximity, if the 
                        small business concern is located in an 
                        area for which the President has 
                        declared a major disaster under section 
                        401 of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 
                        U.S.C. 5170), during the period of the 
                        declaration.
                          (ii) Continuity of services.--A small 
                        business development center that 
                        provides counselors to an area 
                        described in clause (i) shall, to the 
                        maximum extent practicable, ensure 
                        continuity of services in any State in 
                        which the small business development 
                        center otherwise provides services.
                          (iii) Access to disaster recovery 
                        facilities.--For purposes of this 
                        subparagraph, the Administrator shall, 
                        to the maximum extent practicable, 
                        permit the personnel of a small 
                        business development center to use any 
                        site or facility designated by the 
                        Administrator for use to provide 
                        disaster recovery assistance.
  (c)(1) * * *

           *       *       *       *       *       *       *

  (3) Services provided by a small business development center 
shall include, but shall not be limited to--
          (A) furnishing one-to-one individual counseling to 
        small businesses, including--
                  (i) * * *

           *       *       *       *       *       *       *

                  (iii) working with the Administration to 
                develop and provide informational tools for use 
                in working with individuals on pre-business 
                startup planning, existing business expansion, 
                and export planning; [and]
                  (iv) working with individuals referred by the 
                local offices of the Administration and 
                Administration participating lenders; and
                  (v) educating unemployed individuals on 
                entrepreneurship and working with such 
                individuals to start new businesses;

           *       *       *       *       *       *       *

  (o) No Prohibition of Marketing of Services.--The 
Administrator shall not prohibit applicants receiving grants 
under this section from marketing and advertising their 
services to individuals and small businesses.
  (p) Annual Report on Data Collection.--The Administrator 
shall report annually to the Committee on Small Business of the 
House of Representatives and the Committee on Small Business 
and Entrepreneurship of the Senate on data collection 
activities related to the Small Business Development Center 
program.
  (q) Limitation on Award of Grants.--Except for not-for-profit 
institutions of higher education, notwithstanding any provision 
of law, the Administrator shall not award grants (including 
contracts and cooperative agreements) under this section to any 
entity other than those that received grants (including 
contracts and cooperative agreements) under this section prior 
to September 30, 2014, and that seek to renew such grants 
(including contracts and cooperative agreements) after such 
date.

           *       *       *       *       *       *       *


SEC. 48. USE OF AUTHORIZED ENTREPRENEURIAL DEVELOPMENT PROGRAMS.

  (a) Expanded Support for Entrerpreneurs.--
          (1) In general.--Notwithstanding any other provision 
        of law, the Administrator shall only use the programs 
        authorized in sections 7(j), 7(m), 8(a), 8(b)(1), 21, 
        22, 29, and 32 of this Act, and sections 358 and 389 of 
        the Small Business Investment Act to deliver 
        entrepreneurial development services, entrepreneurial 
        education, business incubation services, growth 
        acceleration services, support for the development and 
        maintenance of clusters, or business training.
          (2) Exception.--This section shall not apply to 
        services provided to assist small business concerns 
        owned by an Indian tribe.
  (b) Annual Report.--Beginning on the first December 1 after 
the date of enactment of this subsection, the Administrator 
shall annually report to the Committee on Small Business of the 
House of Representatives and the Committee on Small Business 
and Entrepreneurship of the Senate on all entrepreneurial 
development activities undertaken in the current fiscal year. 
This report shall include--
          (1) a description and operating details for each 
        program and activity;
          (2) operating circulars, manuals, and standard 
        operating procedures for each program and activity;
          (3) a description of the process used to award grants 
        under each program and activity;
          (4) a list of all awardees, contractors, and vendors 
        (including organization name and location) and the 
        amount of awards for the current fiscal year for each 
        program and activity;
          (5) the amount of funding obligated for the current 
        fiscal year for each program and activity; and
          (6) the names and titles for those individuals 
        responsible for each program and activity.

                                  
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