Small Business Reauthorization Act of 2006 - Amends the Small Business Act and the Small Business Investment Act of 1958 to reauthorize for FY2007-FY2010 various loan programs for small businesses guaranteed by the Small Business Administration (SBA), including: (1) general section 7(a) start-up and equity loans; (2) the small business development center (SBDC) program; (3) the disaster mitigation pilot project; (4) the microloan program; (5) the drug-free workplace program; (6) the women's business center program; (7) the HUBZone (heavily underutilized business zone) Program; (8) veterans programs; (9) the federal and state technology partnership program; (10) the new markets venture capital program; and (11) the pilot program for very small business concerns.
Certified Development Company Program Act - Requires certified development companies (CDCs) which elect not to apply for authority to foreclose and liquidate defaulted loans guaranteed by the SBA, or which the SBA Administrator determines to be ineligible for such authority, to contract with a qualified third party to perform such foreclosures and liquidation. Provides additional authorities for CDCs to aid small businesses, including additional equity, debt refinancing, and lowering of loan fees. Provides criteria under which state and local development companies may qualify as CDCs.
Small Business Lending Improvement Act - Authorizes the Administrator to establish a National Preferred Lenders Program. Increases maximum loan amounts for small businesses. Authorizes the Administrator to guarantee the payment of redemption price and prioritized payments on participating securities issued by small business investment companies providing equity capital to small businesses.
National Small Business Regulatory Assistance Act - Directs the Administrator to establish a program to provide regulatory compliance assistance to small businesses through SBDCs, the Association of Small Business Development Centers, and federal compliance partnership programs.
Vocational and Technical Entrepreneurship Development Act - Directs the Administrator to establish a program of grants to state SBDCs for the provision of technical assistance to secondary, vocational, or technical schools for the development and implementation of curricula designed to promote vocational and technical entrepreneurship.
Provides SBDC outreach, development, and small business enhancement assistance to Indian tribe members, Alaska Natives, and Native Hawaiians.
Second-Stage Small Business Development Act - Establishes a pilot program of grants for second-stage (high-growth) small businesses for the development of peer learning opportunities.
Establishes in the SBA the Associate Administrator for International Trade.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5352 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5352
To reauthorize programs to assist small business concerns, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 11, 2006
Mr. Manzullo introduced the following bill; which was referred to the
Committee on Small Business
_______________________________________________________________________
A BILL
To reauthorize programs to assist small business concerns, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small Business
Reauthorization Act of 2006''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--AUTHORIZATIONS
Sec. 101. Section 20 reauthorizations.
Sec. 102. Reauthorizations for certain Small Business Act programs.
Sec. 103. Reauthorizations for certain other programs.
TITLE II--FINANCE
Subtitle A--Certified Development Company Program
Sec. 201. Short title; definition.
Sec. 202. Development Company Loan Programs.
Sec. 203. Loan liquidations.
Sec. 204. Additional equity injections.
Sec. 205. Businesses in low-income areas.
Sec. 206. Combinations of certain goals.
Sec. 207. Maximum 504 and 7(a) loan eligibility.
Sec. 208. Refinancing.
Sec. 209. Fees.
Sec. 210. Technical correction.
Sec. 211. Small Business Investment Act definition.
Sec. 212. Repeal of sunset on reserve requirements for premier
certified lenders.
Sec. 213. Eligibility of development companies to be designated as
certified development companies and
authority to issue debentures; and
providing an area of operational authority,
funding restrictions, and ethical
requirements.
Sec. 214. Conforming amendments.
Sec. 215. Closing costs.
Sec. 216. Definition of rural.
Sec. 217. Regulations and effective date.
Subtitle B--Small Business Lending Improvement
Sec. 221. Short title.
Sec. 222. National preferred lenders program.
Sec. 223. Maximum loan amount.
Sec. 224. Alternative size standard.
Sec. 225. Timely payment of 7(a) secondary market fee.
Subtitle C--Small Business Investment
Sec. 241. Participating Security Small Business Investment Companies.
TITLE III--ENTREPRENEURSHIP
Subtitle A--National Small Business Regulatory Assistance
Sec. 301. Short title.
Sec. 302. Purpose.
Sec. 303. Definitions.
Sec. 304. Small business regulatory assistance program.
Sec. 305. Promulgation of regulations.
Subtitle B--Vocational and Technical Entrepreneurship Development
Sec. 311. Short title.
Sec. 312. Vocational and technical entrepreneurship development
program.
Subtitle C--Native American Small Business Development
Sec. 321. Findings and purposes.
Sec. 322. Small Business Development Center assistance to Indian tribe
members, Alaska Natives, and Native
Hawaiians.
Sec. 323. State consultation with tribal organizations.
Subtitle D--Second-Stage Small Business Development
Sec. 331. Short title.
Sec. 332. Purpose.
Sec. 333. Pilot program.
Sec. 334. Regulations.
Sec. 335. Definitions.
Sec. 336. Authorization of appropriations.
Subtitle E--Trade Provisions
Sec. 341. Establishment of Associate Administrator for International
Trade in Small Business Administration.
TITLE IV--MISCELLANEOUS
Sec. 401. Small business disaster loans.
Sec. 402. Disaster loans for incidents of national significance.
Sec. 403. Small Business Development Center Portability Grants.
Sec. 404. Assistance to out-of-state businesses.
Sec. 405. Elimination of unnecessary programs.
Sec. 406. Technical correction.
Sec. 407. Combating waste, fraud, and abuse.
Sec. 408. Relief available against Administrator.
Sec. 409. Economic injury disaster loans to nonprofits.
Sec. 410. Extension of co-sponsorship authority.
Sec. 411. Regulations on size standards of franchisees.
Sec. 412. District Directors prohibited from being involved in
selection of SBDC directors.
TITLE I--AUTHORIZATIONS
SEC. 101. SECTION 20 REAUTHORIZATIONS.
Section 20 of the Small Business Act (15 U.S.C. 647) is amended by
inserting after subsection (e) the following new subsections:
``(f) Fiscal Year 2007.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2007:
``(A) For the programs authorized by this Act, the
Administrator is authorized to make--
``(i) $80,000,000 in technical assistance
grants, as provided in section 7(m); and
``(ii) $110,000,000 in direct loans, as
provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $27,050,000,000 in
deferred participation loans and other financings. Of
such sum, the Administrator is authorized to make--
``(i) $18,000,000,000 in general business
loans, as provided in section 7(a);
``(ii) $8,500,000,000 in certified
development company financings, as provided in
section 7(a)(13) and as provided in section 504
of the Small Business Investment Act of 1958;
``(iii) $500,000,000 in loans, as provided
in section 7(a)(21); and
``(iv) $50,000,000 in loans, as provided in
section 7(m).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administrator is authorized to make--
``(i) $300,000,000 in purchases of
participating securities; and
``(ii) $4,000,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administrator is authorized to enter into
guarantees not to exceed $6,500,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) The Administrator is authorized to make
grants or enter into cooperative agreements for a total
amount of $7,000,000 for the Service Corps of Retired
Executives program authorized by section 8(b)(1).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administrator for fiscal year 2007 such sums as may
be necessary to carry out the provisions of this Act
not elsewhere provided for, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small
Business Investment Act of 1958, including salaries and
expenses of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2007--
``(i) no funds are authorized to be used as
loan capital for the loan program authorized by
section 7(a)(21) except by transfer from
another Federal department or agency to the
Administration, unless the program level
authorized for general business loans under
paragraph (1)(B)(i) is fully funded; and
``(ii) the Administration may not approve
loans on its own behalf or on behalf of any
other Federal department or agency, by contract
or otherwise, under terms and conditions other
than those specifically authorized under this
Act or the Small Business Investment Act of
1958, except that it may approve loans under
section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.
``(g) Fiscal Year 2008.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2008:
``(A) For the programs authorized by this Act, the
Administrator is authorized to make--
``(i) $80,000,000 in technical assistance
grants, as provided in section 7(m); and
``(ii) $110,000,000 in direct loans, as
provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $29,050,000,000 in
deferred participation loans and other financings. Of
such sum, the Administrator is authorized to make--
``(i) $19,000,000,000 in general business
loans, as provided in section 7(a);
``(ii) $9,500,000,000 in certified
development company financings, as provided in
section 7(a)(13) and as provided in section 504
of the Small Business Investment Act of 1958;
``(iii) $500,000,000 in loans, as provided
in section 7(a)(21); and
``(iv) $50,000,000 in loans, as provided in
section 7(m).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administrator is authorized to make--
``(i) $300,000,000 in purchases of
participating securities; and
``(ii) $4,000,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administrator is authorized to enter into
guarantees not to exceed $7,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) The Administrator is authorized to make
grants or enter into cooperative agreements for a total
amount of $8,000,000 for the Service Corps of Retired
Executives program authorized by section 8(b)(1).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administrator for fiscal year 2008 such sums as may
be necessary to carry out the provisions of this Act
not elsewhere provided for, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small
Business Investment Act of 1958, including salaries and
expenses of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2008--
``(i) no funds are authorized to be used as
loan capital for the loan program authorized by
section 7(a)(21) except by transfer from
another Federal department or agency to the
Administration, unless the program level
authorized for general business loans under
paragraph (1)(B)(i) is fully funded; and
``(ii) the Administrator may not approve
loans on its own behalf or on behalf of any
other Federal department or agency, by contract
or otherwise, under terms and conditions other
than those specifically authorized under this
Act or the Small Business Investment Act of
1958, except that it may approve loans under
section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.
``(h) Fiscal Year 2009.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2009:
``(A) For the programs authorized by this Act, the
Administrator is authorized to make--
``(i) $80,000,000 in technical assistance
grants, as provided in section 7(m); and
``(ii) $110,000,000 in direct loans, as
provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $31,050,000,000 in
deferred participation loans and other financings. Of
such sum, the Administrator is authorized to make--
``(i) $20,000,000,000 in general business
loans, as provided in section 7(a);
``(ii) $10,500,000,000 in certified
development company financings, as provided in
section 7(a)(13) and as provided in section 504
of the Small Business Investment Act of 1958;
``(iii) $500,000,000 in loans, as provided
in section 7(a)(21); and
``(iv) $50,000,000 in loans, as provided in
section 7(m).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administrator is authorized to make--
``(i) $300,000,000 in purchases of
participating securities; and
``(ii) $4,000,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administrator is authorized to enter into
guarantees not to exceed $7,500,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) The Administrator is authorized to make
grants or enter into cooperative agreements for a total
amount of $9,000,000 for the Service Corps of Retired
Executives program authorized by section 8(b)(1).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administrator for fiscal year 2009 such sums as may
be necessary to carry out the provisions of this Act
not elsewhere provided for, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small
Business Investment Act of 1958, including salaries and
expenses of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2009--
``(i) no funds are authorized to be used as
loan capital for the loan program authorized by
section 7(a)(21) except by transfer from
another Federal department or agency to the
Administration, unless the program level
authorized for general business loans under
paragraph (1)(B)(i) is fully funded; and
``(ii) the Administrator may not approve
loans on its own behalf or on behalf of any
other Federal department or agency, by contract
or otherwise, under terms and conditions other
than those specifically authorized under this
Act or the Small Business Investment Act of
1958, except that it may approve loans under
section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.
``(i) Fiscal Year 2010.--
``(1) Program levels.--The following program levels are
authorized for fiscal year 2010:
``(A) For the programs authorized by this Act, the
Administrator is authorized to make--
``(i) $80,000,000 in technical assistance
grants, as provided in section 7(m); and
``(ii) $110,000,000 in direct loans, as
provided in section 7(m).
``(B) For the programs authorized by this Act, the
Administrator is authorized to make $33,050,000,000 in
deferred participation loans and other financings. Of
such sum, the Administration is authorized to make--
``(i) $21,000,000,000 in general business
loans, as provided in section 7(a);
``(ii) $11,500,000,000 in certified
development company financings, as provided in
section 7(a)(13) and as provided in section 504
of the Small Business Investment Act of 1958;
``(iii) $500,000,000 in loans, as provided
in section 7(a)(21); and
``(iv) $50,000,000 in loans, as provided in
section 7(m).
``(C) For the programs authorized by title III of
the Small Business Investment Act of 1958, the
Administrator is authorized to make--
``(i) $300,000,000 in purchases of
participating securities; and
``(ii) $4,000,000,000 in guarantees of
debentures.
``(D) For the programs authorized by part B of
title IV of the Small Business Investment Act of 1958,
the Administrator is authorized to enter into
guarantees not to exceed $8,000,000,000, of which not
more than 50 percent may be in bonds approved pursuant
to section 411(a)(3) of that Act.
``(E) The Administrator is authorized to make
grants or enter into cooperative agreements for a total
amount of $10,000,000 for the Service Corps of Retired
Executives program authorized by section 8(b)(1).
``(2) Additional authorizations.--
``(A) There are authorized to be appropriated to
the Administrator for fiscal year 2010 such sums as may
be necessary to carry out the provisions of this Act
not elsewhere provided for, including administrative
expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small
Business Investment Act of 1958, including salaries and
expenses of the Administration.
``(B) Notwithstanding any other provision of this
paragraph, for fiscal year 2010--
``(i) no funds are authorized to be used as
loan capital for the loan program authorized by
section 7(a)(21) except by transfer from
another Federal department or agency to the
Administration, unless the program level
authorized for general business loans under
paragraph (1)(B)(i) is fully funded; and
``(ii) the Administrator may not approve
loans on its own behalf or on behalf of any
other Federal department or agency, by contract
or otherwise, under terms and conditions other
than those specifically authorized under this
Act or the Small Business Investment Act of
1958, except that it may approve loans under
section 7(a)(21) of this Act in gross amounts
of not more than $2,000,000.''.
SEC. 102. REAUTHORIZATIONS FOR CERTAIN SMALL BUSINESS ACT PROGRAMS.
(a) Small Business Development Center Program.--Section 21 of the
Small Business Act (15 U.S.C. 648) is amended in subsection
(a)(4)(C)(vii)--
(1) in subclause (I) by striking ``and'' at the end;
(2) in subclause (II) by striking the period at the end;
and
(3) by adding at the end the following:
``(III) $135,000,000 for fiscal
year 2007; and
``(IV) $114,000,000 for each of
fiscal years 2008 through 2010.''.
(b) Disaster Mitigation Pilot Program.--
(1) In general.--Section 7 of the Small Business Act (15
U.S.C. 636) is amended in subsection (b)(1)(C) by striking
``2000 through 2004'' and inserting ``2007 through 2010''.
(2) Authorization levels.--Section 20 of the Small Business
Act (15 U.S.C. 631 note) is amended in subsection (c) by
striking the colon and all that follows through the period at
the end and inserting ``: $15,000,000 for each of fiscal years
2007 through 2010.''.
(c) Microloan Program Supplemental Grants.--Section 7 of the Small
Business Act (15 U.S.C. 636) is amended in subsection (m)(4)(F)(ii) by
striking ``not more than 20'' and all that follows through the period
at the end and inserting ``not more than 30 grantees in each of fiscal
years 2007 through 2010, each of whom may receive a grant under this
subparagraph in an amount not to exceed $150,000 per year.''.
(d) Microloan Program Deferred Participation Loan Pilot.--Section 7
of the Small Business Act (15 U.S.C. 636) is amended in subsection
(m)(12) by striking ``1998 through 2000'' and inserting ``2007 through
2010''.
(e) Business Grants and Cooperative Agreements.--Section 8 of the
Small Business Act (15 U.S.C. 637) is amended in subsection (n)(3) by
striking ``2006'' and inserting ``2010''.
(f) Paul D. Coverdell Drug-Free Workplace Program.--Section 27 of
the Small Business Act (15 U.S.C. 654) is amended in subsection (g), in
each of paragraphs (1), (2), and (3), by striking ``2006'' and
inserting ``2010''.
(g) Women's Business Center Program.--Section 29 of the Small
Business Act (15 U.S.C. 656) is amended--
(1) in subsection (k)(1) by striking subparagraphs (A)
through (D) and inserting the following:
``(A) $16,500,000 for fiscal year 2007;
``(B) $16,750,000 for fiscal year 2008;
``(C) $17,000,000 fiscal year 2009; and
``(D) $17,250,000 for fiscal year 2010.'';
(2) in subsection (k)(2)(B) by striking ``oversight'' and
all that follows through the period at the end and inserting
``oversight: 1.4 percent for each of fiscal years 2007 through
2010.''; and
(3) in subsection (k)(4)(A) by striking clauses (i) through
(iv) and inserting the following:
``(i) For fiscal year 2007, 48 percent.
``(ii) For fiscal year 2008, 42 percent.
``(iii) For fiscal year 2009, 36 percent.
``(iv) For fiscal year 2010, 30 percent.''.
(h) Hubzone Program.--Section 31 of the Small Business Act (15
U.S.C. 657a) is amended in subsection (d) by striking ``2006'' and
inserting ``2010''.
(i) Veterans Programs.--Section 32 of the Small Business Act (15
U.S.C. 657b) is amended in subsection (c) by striking ``to carry out
this section'' and all that follows through the period at the end and
inserting ``to carry out this section $2,000,000 for each of fiscal
years 2006 through 2010.''.
(j) National Veterans Business Development Corporation.--Section 33
of the Small Business Act (15 U.S.C. 657c) is amended--
(1) in subsection (k)(1), by striking subparagraphs (A)
through (D) and inserting the following:
``(A) $1,500,000 for fiscal year 2007;
``(B) $1,000,000 for fiscal year 2008; and
``(C) $500,000 for fiscal year 2009.''; and
(2) in subsection (k)(2)(B) by striking ``fiscal year 2003
or 2004'' and inserting ``any fiscal year after 2002''.
(k) Federal and State Technology Partnership (FAST) Program.--
Section 34 of the Small Business Act (15 U.S.C. 657d) is amended--
(1) in subsection (h)(1) by striking ``2001 through 2005''
and inserting ``2007 through 2010''; and
(2) in subsection (i) by striking ``September 30, 2005''
and inserting ``September 30, 2010''.
SEC. 103. REAUTHORIZATIONS FOR CERTAIN OTHER PROGRAMS.
(a) New Markets Venture Capital Program.--Section 368 of the Small
Business Investment Act of 1958 (15 U.S.C. 689q) is amended in
subsection (a) by striking ``2001 through 2006'' and inserting ``2007
through 2010''.
(b) Pilot Program for Very Small Business Concerns.--Section 304 of
the Small Business Administration Reauthorization and Amendments Act of
1994 (15 U.S.C. 644 note) is amended in subsection (i) by striking
``2003'' and inserting ``2010''.
TITLE II--FINANCE
Subtitle A--Certified Development Company Program
SEC. 201. SHORT TITLE; DEFINITION.
(a) Short Title.--This subtitle may be cited as the ``Certified
Development Company Program Act''.
(b) Definition.--In this subtitle, the term ``Administrator'' means
the Administrator of the Small Business Administration.
SEC. 202. DEVELOPMENT COMPANY LOAN PROGRAMS.
Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695
et seq.) is amended by inserting before section 501 the following:
``SEC. 500. PROGRAM TITLE.
``The programs authorized by this title shall be known as the
`Certified Development Company Program'.''.
SEC. 203. LOAN LIQUIDATIONS.
Section 510 of the Small Business Investment Act of 1958 (15 U.S.C.
697g) is amended--
(1) by redesignating subsection (e) as subsection (g); and
(2) by inserting after subsection (d) the following:
``(e) Participation.--
``(1) In general.--Any certified development company which
elects not to apply for authority to foreclose and liquidate
defaulted loans under this section, or which the Administrator
determines to be ineligible for such authority, shall contract
with a qualified third party to perform foreclosure and
liquidation of defaulted loans in its portfolio. The contract
shall be contingent upon approval by the Administrator with
respect to the qualifications of the contractor and the terms
and conditions of liquidation activities.
``(2) Commencement.--The provisions of this subsection
shall not require any certified development company to
liquidate defaulted loans until the Administrator has adopted
and implemented a program to compensate and reimburse certified
development companies, as provided under subsection (f).
``(f) Compensation and Reimbursement.--
``(1) Reimbursement of expenses.--
``(A) In general.--The Administrator shall
reimburse each certified development company for all
expenses paid by such company as part of the
foreclosure and liquidation activities, if the
expenses--
``(i) were specifically approved in advance
by the Administrator, in which case the
reimbursement shall be made within 30 days
after reimbursement is requested;
``(ii) were derived from a contract
described in subsection (e)(1) that was
approved in advance by the Administrator under
subsection (e)(1), in which case the
reimbursement shall be made within 30 days
after reimbursement is requested; or
``(iii) were incurred by the certified
development company on an emergency basis and
the expenses were reasonable and appropriate,
in which case the reimbursement shall be made
within 30 days after the expenses are
determined to be reasonable and appropriate.
``(B) Determination.--A determination whether
expenses are reasonable and appropriate shall be made
by the Administrator within 30 days after reimbursement
is requested for those expenses.
``(2) Compensation for results.--The Administrator shall
develop a schedule to compensate and provide an incentive to
certified development companies that foreclose and liquidate
defaulted loans. The schedule shall be based on a percentage of
the net amount recovered, but shall not exceed a maximum
amount. The schedule shall not apply to any foreclosure which
is conducted pursuant to a contract between a certified
development company and a qualified third party to perform the
foreclosure and liquidation.''.
SEC. 204. ADDITIONAL EQUITY INJECTIONS.
Section 502(3)(B)(ii) of the Small Business Investment Act of 1958
(15 U.S.C. 696(3)(B)(ii)) is amended to read as follows:
``(ii) Funding from institutions.--If a
small business concern--
``(I) provides the minimum
contribution required under
subparagraph (C), not less than 50
percent of the cost of the project
shall be provided by institutions
described in subclauses (I), (II), and
(III) of clause (i); and
``(II) provides more than the
minimum contribution required under
subparagraph (C), any excess
contribution may be used to reduce the
amount required from the institutions
described in subclauses (I), (II), and
(III) of clause (i), except that the
amount from such institutions may not
be reduced to an amount that is less
than the amount of the loan made by the
Administrator.''.
SEC. 205. BUSINESSES IN LOW-INCOME AREAS.
Section 501(d)(3)(A) of the Small Business Investment Act of 1958
(15 U.S.C. 695(d)(3)(A)) is amended by inserting after ``business
district revitalization,'' the following: ``or expansion of businesses
in low-income communities as described in section 45D(e) of the
Internal Revenue Code of 1986, or implementing regulations issued
thereunder,''.
SEC. 206. COMBINATIONS OF CERTAIN GOALS.
Section 501(e) of the Small Business Investment Act of 1958 (15
U.S.C. 695(e)) is amended by adding at the end the following:
``(7) A small business concern that is unconditionally
owned by more than 1 individual, or a corporation, the stock of
which is owned by more than 1 individual, shall be deemed to
have achieved a public policy goal required under subsection
(d)(3) if a combined ownership share of not less than 51
percent is held by individuals who are in 1 of the groups
described in subparagraph (C) or (E) of subsection (d)(3).''.
SEC. 207. MAXIMUM 504 AND 7(A) LOAN ELIGIBILITY.
Section 502(2) of the Small Business Investment Act of 1958 (15
U.S.C. 696(2)) is amended by adding at the end the following:
``(C) Combination financing.--Notwithstanding any
other provision of law, financing under this title may
be provided to a borrower in the maximum amount
provided in this subsection, and a loan guarantee under
section 7(a) of the Small Business Act may be provided
to the same borrower in the maximum amount provided in
section 7(a)(3)(A) of such Act, to the extent that the
borrower otherwise qualifies for such assistance.''.
SEC. 208. REFINANCING.
Section 502 of the Small Business Investment Act of 1958 (15 U.S.C.
696) is amended by adding at the end the following:
``(7) Permissible debt refinancing.--
``(A) In general.--Any financing approved under
this title may include a limited amount of debt
refinancing.
``(B) Expansions.--If the project involves
expansion of a small business concern which has
existing indebtedness collateralized by fixed assets,
any amount of existing indebtedness that does not
exceed one-half of the project cost of the expansion
may be refinanced and added to the expansion cost,
providing that--
``(i) the proceeds of the indebtedness were
used to acquire land, including a building
situated thereon, to construct a building
thereon, or to purchase equipment;
``(ii) the borrower has been current on all
payments due on the existing debt for at least
the preceding year;
``(iii) the financing under section 504
will provide better terms or rate of interest
than exists on the debt at the time of
refinancing; and
``(iv) the existing indebtedness was not
financed under the Small Business Act or this
Act.''.
SEC. 209. FEES.
(a) In General.--Section 503(d) of the Small Business Investment
Act of l958 (15 U.S.C. 697(d)) is amended--
(1) by striking paragraph (2);
(2) by redesignating paragraph (3) as paragraph (2); and
(3) in paragraph (2), as so redesignated, by striking
``0.125 percent'' and inserting ``0.155 percent''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect and apply to loans under section 503(d) of the Small
Business Investment Act of l958 (15 U.S.C. 697(d)) approved on or after
30 days after the date of enactment of this Act.
(c) Recomputation.--Notwithstanding any other provision of law, the
Administrator shall recalculate the amount of the fee paid by the
borrower under section 503(b)(7) of the Small Business Investment Act
of 1958 in order that the cost of making guarantees under Title V of
the Small Business Investment Act of 1958 remains at zero for each
fiscal year after the effective date of the amendments to the Small
Business Investment Act of 1958 made by this Act.
SEC. 210. TECHNICAL CORRECTION.
Section 501(e)(2) of the Small Business Investment Act of 1958 (15
U.S.C. 695(e)(2)) is amended by striking ``outstanding''.
SEC. 211. SMALL BUSINESS INVESTMENT ACT DEFINITION.
Section 103 of the Small Business Investment Act of 1958 (15 U.S.C.
662) is amended by striking paragraph (6) and inserting the following:
``(6) the term `certified development company' means an
entity that--
``(A) the Administrator has certified meets the
criteria of section 506; or
``(B) as of January 1, 1987, was providing loans
under this title and was a for-profit enterprise, and
otherwise meets the criteria of section 506;''.
SEC. 212. REPEAL OF SUNSET ON RESERVE REQUIREMENTS FOR PREMIER
CERTIFIED LENDERS.
Section 508(c)(6)(B) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(c)(6)(B)) is amended--
(1) in the heading, by striking ``Temporary reduction'' and
inserting ``Reduction''; and
(2) by striking ``Notwithstanding subparagraph (A), during
the 2-year period beginning on the date that is 90 days after
the date of enactment of this subparagraph, the'' and inserting
``The''.
SEC. 213. ELIGIBILITY OF DEVELOPMENT COMPANIES TO BE DESIGNATED AS
CERTIFIED DEVELOPMENT COMPANIES AND AUTHORITY TO ISSUE
DEBENTURES; AND PROVIDING AN AREA OF OPERATIONAL
AUTHORITY, FUNDING RESTRICTIONS, AND ETHICAL
REQUIREMENTS.
(a) In General.--Section 506 of the Small Business Investment Act
of 1958 (15 U.S.C. 697c) is amended--
(1) in the heading, by striking ``Restrictions on
development company assistance'' and inserting ``Certified
development companies''; and
(2) by amending such section to read as follows:
``(a) Authority to Issue Debentures.--A certified development
company (as defined in section 103(6)) may issue debentures under this
title.
``(b) Criteria to Be Treated as Certified Development Company.--
``(1) In general.--The Administrator shall establish
procedures under which an entity, incorporated under State law
with the authority to promote and assist the growth and
development of small business concerns in the areas in which it
is authorized to operate by the Administrator, may apply to be
treated as a certified development company. Upon application of
such an entity, the Administrator shall determine whether the
entity meets each of the criteria specified in paragraph (2).
If the Administrator determines that the entity does meet each
of the criteria, the Administrator shall so certify, and the
entity shall thereby be treated as a certified development
company as provided by section 103(6)(A).
``(2) Specific criteria.--The criteria referred to in
paragraph (1) are as follows:
``(A) Size.--The entity is a small concern (as
defined by the Administrator) with fewer than 500
employees and is not under the control of an entity
that is not a small business concern (as defined by the
Administrator). Any company that was certified by the
Administrator on or before the date of enactment of the
Small Business Reauthorization Act of 2006 shall
continue to be treated as a certified development
company without regard to any affiliation that existed
on such date.
``(B) Purpose.--The entity has as a primary purpose
to benefit the community by fostering economic
development to create and preserve jobs and stimulate
private investment.
``(C) Primary function.--The entity has as a
primary function to accomplish that primary purpose by
providing long term financing to small business
concerns under the Certified Development Company
Program. The entity may also provide or support other
local economic development activities to assist the
community.
``(D) Nonprofit status.--The entity is nonprofit.
``(E) Good standing.--The entity--
``(i) is in good standing in the State in
which it is incorporated and in every other
State in which it conducts business; and
``(ii) is in compliance with all laws,
including taxation requirements, in the State
in which it is incorporated and in every other
State in which it conducts business.
``(F) Membership.--The entity has--
``(i) not fewer than 25 members (or
stockholders, if the company is a for-profit
entity), none of whom own or control more than
10 percent of the voting membership (or stock,
for those companies that are for-profit
entities), and each of whom--
``(I) have knowledge of the
economic development needs of the small
businesses served by the company; and
``(II) is a resident of the State
in which the company is incorporated or
otherwise has sufficient contacts with
the State in which the company
operates; and
``(ii) at least 1 member, who is not in a
position to control the entity, from each of
the following:
``(I) Government organizations that
are responsible for economic
development.
``(II) Financial institutions that
provide commercial long term fixed
asset financing.
``(III) Community organizations
that are dedicated to economic
development.
``(IV) Businesses.
``(G) Board of directors.--
``(i) In general.--The entity has a board
of directors.
``(ii) Members of board.--Each director
is--
``(I) a member of the entity; and
``(II) elected a director by the
members of the entity (or for those
companies which are for-profit by the
stockholders according to the bylaws of
those companies).
``(iii) Representation of organizations and
institutions.--
``(I) In general.--The entity has
at least 1 director, who is not in a
position to control the entity, from at
least 3 of the categories described in
subparagraph (F)(ii).
``(II) Maximum percentage.--For
each category described in subparagraph
(F)(ii), not more than 50 percent of
the directors are from that category.
``(iv) Meetings.--The board of directors
meets on a regular basis to make policy
decisions for the entity.
``(H) Professional management and staff.--The
entity has full-time professional management, including
a chief executive officer to manage daily operations,
and a professional staff that is qualified to market
the Certified Development Company Program and handle
all aspects of loan approval and servicing, including
liquidation, as described in section 510, which work
for the entity--
``(i) as employees;
``(ii) as contractors, through contracting
with an entity with which the development
company is affiliated if such entity is--
``(I) a local nonprofit service
corporation;
``(II) a for-profit corporation,
but only if the contracting was in
effect, and the entity was certified by
the Administrator, on or before
December 31, 2005;
``(III) a nonprofit affiliate of a
local nonprofit service corporation;
``(IV) an entity wholly or
partially operated by a government
agency; or
``(V) another entity approved by
the Administrator, so long as the other
entity also supports local economic
development; or
``(iii) if the entity is in a rural area,
as contractors, through contracting with
another certified development company that is
located in the State in which the entity is
located or in a State contiguous to that State.
``(I) Independent management and operation.--The
entity employs directly the chief executive officer,
and is managed and operated to pursue the primary
purpose referred to in subparagraph (B), and--
``(i) is independent; or
``(ii) is an affiliate of another local
nonprofit service corporation, so long as the
board of directors of the entity has at least 1
director not on the board of directors of the
service corporation, and the board of the
directors of the service corporation has at
least 1 director not on the board of directors
of the entity.
``(3) Definition.--In this subsection, the term `local
nonprofit service corporation' means a local nonprofit service
corporation (other than a certified development company), a
purpose of which is to support economic development in the area
in which the entity operates.
``(c) Use of Excess Funds.--
``(1) In general.--Any funds generated by a certified
development company from making loans under section 503 or 504
that remain unexpended after payment of staff, operating, and
overhead expenses shall be retained by the certified
development company as a reserve for--
``(A) future operations;
``(B) expanding the area in which the certified
development company operates through the methods
authorized by this title; or
``(C) investment in other community or local
economic development activity in the State or
associated local economic area from which such funds
were generated.
``(2) Definition.--For purposes of this subsection, the
term `local economic area' means an area that is part of a
local trading area that is in a State other than the State of
incorporation of a certified development company but which is
contiguous to a part of the company's State of incorporation.
``(d) Ethical Requirements.--
``(1) In general.--A certified development company and the
officers, employees, and other staff of the company shall at
all times act ethically and avoid activities which constitute a
conflict of interest or appear to constitute a conflict of
interest.
``(2) Prohibited conflict in project loans.--
``(A) In general.--A certified development company
may not--
``(i) recommend or approve a guarantee of a
debenture by the Administrator under the
Certified Development Company Program that is
collateralized by a second lien position on the
property being constructed or acquired; and
``(ii) provide, or be affiliated with a
corporation or other entity which provides,
financing collateralized by a first lien on the
same property.
``(B) Exception.--A certified development company
that was participating as a first mortgage lender,
either directly or through an affiliate, for the
Certified Development Company Program in either of
fiscal years 2004 or 2005 may continue to do so.
``(3) Other economic development activities.--It shall not
be a conflict of interest for a certified development company
to operate multiple programs to assist small business concerns
as part of carrying out its economic development purpose.
``(4) Acceptance of funding subject to restrictions.--
``(A) In general.--A certified development company
may not accept funding that is subject to a restriction
described in subparagraph (B) from a source (including
a source that is a department or agency of the Federal
Government) unless the source also provides all of the
financial assistance to be delivered by the certified
development company under this title and the
restriction is limited solely to the financial
assistance so provided.
``(B) Restrictions covered.--A restriction referred
to in subparagraph (A) is--
``(i) a condition, priority, or restriction
upon the types of small businesses to which the
certified development company may deliver
financial assistance under this title; or
``(ii) a condition or requirement, directly
or indirectly, upon the small business to which
financial assistance is to be delivered under
this title.
``(e) Multistate Operations.--
``(1) Authorization.--Notwithstanding any other provision
of law, the Administrator shall permit a certified development
company to make loans in any State that is contiguous to the
State of incorporation of that certified development company,
only if such company--
``(A) is--
``(i) an accredited lender under section
507; or
``(ii) a premier certified lender under
section 508;
``(B) meets or exceeds performance standards
established by the Administrator;
``(C) has a membership that contains not fewer than
25 members from each State in which the company makes
loans and meets the requirements of paragraph (6)(B)
for membership in each State;
``(D) has a board of directors that contains not
fewer than 1 member from each State in which the
company makes loans;
``(E) has not fewer than 1 loan committee--
``(i) that considers loan applications from
small businesses in States other than the State
of incorporation of the certified development
company;
``(ii) that has at least one member with
commercial lending experience; and
``(iii) that does not have any staff of the
certified development company serving on the
loan committee; and
``(F) submits to the Administrator, in writing--
``(i) a notice of the intention of the
company to make loans in multiple States;
``(ii) the names of the States in which the
company intends to make loans;
``(iii) a detailed statement of how the
company will comply with this paragraph,
including a list of the members described in
subparagraph (C).
``(2) Review.--The Administrator shall verify whether a
certified development company satisfies the requirements of
paragraph (1) on an expedited basis and, not later than 30 days
after the date on which the Administrator receives the
statement described in paragraph (1)(E)(iii), the Administrator
shall determine whether such company satisfies such criteria
and provide notice to such company.
``(3) Loan committee operation.--
``(A) Approval required.--Any loan made by a
certified development company in a State other than its
State of incorporation shall be approved by a loan
committee established pursuant to subsection (e)(1)(E)
of this section. No such loan shall be approved if the
loan committee does not have at least one member from
the State in which the loan is made and such member
participates in the review of the loan.
``(B) Ratification by board.--Any loan made in a
State other than the State of incorporation must be
ratified by the Board of Directors of the certified
development company.
``(4) Aggregate accounting.--A company described in
paragraph (1) may maintain an aggregate accounting of all
revenue and expenses of the company for purposes of this title.
``(5) Local job creation requirements.--
``(A) In general.--Any certified development
company making loans in multiple States shall satisfy
any applicable job creation or retention requirements
separately for each such State. Such a company shall
not count jobs created or retained in 1 State towards
any applicable job creation or retention requirement in
another State.
``(B) Transition period.--The requirement of
subparagraph (A) does not apply during the 2-year
period beginning with the date on which the
Administrator authorizes multi-State operations.
``(6) Control of multiple companies.--
``(A) In general.--No one either directly or
indirectly may exercise a position of control on more
than one certified development company.
``(B) Close relatives.--No close relative of an
individual who holds a position of control in a
certified development company may hold a position of
control on a certified development company other than
the company on which the individual serves.
``(C) Definitions.--In this paragraph--
``(i) the term `close relative' means a
spouse, parent, child, or sibling, or the
spouse of a parent, child, or sibling; and
``(ii) the term `position of control' means
a certified development company's officer,
member of the board of directors, manager,
chief executive officer, agent involved in the
loan process, key employee or similar
management position, or, if the certified
development company is a for-profit entity, a
holder of 20 percent or more of the value of
the certified development company's stock.
``(7) Contiguous states.--For the purposes of this
subsection, the States of Alaska and Hawaii and the territories
of American Samoa and Guam shall be deemed to be contiguous to
California, Oregon, and Washington.
``(8) Local economic area operation.--A certified
development company that is operating or applies for authority
to operate in a local economic area (as defined in subsection
(c)(2)) shall not be deemed to be conducting a multistate
operation and shall not be subject to the eligibility criteria
or operating requirements in this subsection.''.
(b) Temporary Grandfather Clause.--An entity that, as of December
31, 2005, was certified by the Administrator for purposes of title V of
the Small Business Investment Act of 1958 shall continue to be treated
as a certified development company for purposes of that Act until the
1-year period beginning with the date of the enactment of this Act
expires.
SEC. 214. CONFORMING AMENDMENTS.
(a) Title Heading.--The title heading for title V of the Small
Business Investment Act of 1958 is amended by striking ``State and
Local Development Companies'' and inserting ``Certified Development
Companies''.
(b) Section 501.--Section 501 of such Act is amended--
(1) in the section heading by striking ``state development
companies'' and inserting ``certified development companies'';
(2) in subsection (b) by striking ``State development
companies'' and inserting ``certified development companies'';
and
(3) in subsection (c) by striking ``State development
company'' both places such term appears and inserting
``certified development company''.
(c) Section 502.--Section 502 of such Act is amended in the first
sentence by striking ``State and local development companies'' and
inserting ``certified development companies''.
(d) Section 503.--Section 503 of such Act is amended--
(1) in subsection (a)(1), by striking ``qualified State or
local development company'' and inserting ``certified
development company''; and
(2) by striking subsection (e) and inserting the following:
``(e) Section 7(a) Loans.--The Administrator shall not prevent or
in any manner impede a certified development company from providing
assistance to a business with respect to preparing applications for
loans under section 7(a) of the Small Business Act, or for servicing
such loans so long as the fee that the certified development company
charges the business for providing that assistance or servicing is no
more than reasonable. Nothing in this provision shall authorize a
certified development company to issue loans pursuant to section 7(a)
of the Small Business Act.''.
(e) Section 505.--Section 505 of such Act is amended in subsection
(a) by striking ``State or local development companies'' and inserting
``certified development companies''.
(f) Section 507.--Section 507 of such Act is amended--
(1) in subsection (a) by striking ``State and local
development companies'' and inserting ``certified development
companies'';
(2) in subsection (b) by striking ``qualified State or
local development company'' and inserting ``certified
development company'';
(3) in subsection (c) by striking ``qualified State or
local development company'' and inserting ``certified
development company'';
(4) in subsection (d)(1) by striking ``qualified State or
local development company'' and inserting ``certified
development company''; and
(5) by striking subsection (e).
(g) Section 509.--Section 509 of such Act is amended in subsection
(e)(1)(A) by striking ``qualified State or local development company''
and inserting ``certified development company''.
(h) Section 510.--Section 510 of such Act is amended--
(1) in subsection (a) by striking ``qualified State or
local development company (as defined in section 503(e))'' and
inserting ``certified development company'';
(2) in subsection (b)(1) by striking ``qualified State or
local development company'' and inserting ``certified
development company'';
(3) in subsection (b)(1)(B)(i)(II) by striking ``qualified
State and local development companies'' and inserting
``certified development companies'';
(4) in subsection (c)(1) in the matter preceding
subparagraph (A) by striking ``qualified State or local
development company'' and inserting ``certified development
company'';
(5) in subsection (c)(1)(B)(i)(II) by striking ``qualified
State or local development company'' both places such term
appears and inserting ``certified development company'';
(6) in subsection (c)(2)(A)(i), by striking ``qualified
State or local development company'' and inserting ``certified
development company'';
(7) in subsection (c)(2)(A)(iii), by striking ``qualified
State or local development company'' and inserting ``certified
development company'';
(8) in subsection (c)(2)(B)(i), by striking ``qualified
State or local development company'' and inserting ``certified
development company'';
(9) in subsection (c)(2)(C)(i), by striking ``qualified
State or local development company'' and inserting ``certified
development company'';
(10) in subsection (c)(2)(D), by striking ``qualified State
or local development company'' and inserting ``certified
development company'';
(11) in subsection (c)(3), by striking ``qualified State or
local development company'' and inserting ``certified
development company'';
(12) in subsection (d), by striking ``qualified State or
local development company'' and inserting ``certified
development company'';
(13) in subsection (e)(1), by striking ``qualified State
and local development companies'' and inserting ``certified
development companies'';
(14) in subsection (e)(2)(A), by striking ``qualified State
or local development company'' and inserting ``certified
development company''; and
(15) in subsection (e)(2)(B), by striking ``qualified State
or local development company'' and inserting ``certified
development company''.
SEC. 215. CLOSING COSTS.
Section 503(b) of the Small Business Investment Act of 1958 (15
U.S.C. 697(b)) is amended by striking paragraph (4) and inserting the
following:
``(4) the aggregate amount of such debenture does not
exceed the amount of the loans to be made from the proceeds of
such debenture plus, at the election of the borrower, other
amounts attributable to the administrative and closing costs of
such loans, except for the attorney fees of the borrower;''.
SEC. 216. DEFINITION OF RURAL.
Section 501 of the Small Business Investment Act of 1958 (15 U.S.C.
695) is amended by adding at the end the following:
``(f) As used in this title, the terms `rural' and `rural area'
have the meaning given such terms in section 343(a)(13) of the
Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(13)).''.
SEC. 217. REGULATIONS AND EFFECTIVE DATE.
(a) In General.--The Administrator shall, after notice and comment,
publish rules to implement this subtitle and the amendments made by
this subtitle in final form.
(b) Consequence of Delay.--If the Administrator has not complied
with subsection (a) as of the date that is 180 days after the enactment
of this Act, any entity, then, from that date until the date on which
the Administrator has complied with subsection (a), any entity that
applies to be treated as a certified development company shall be
treated as a certified development company.
Subtitle B--Small Business Lending Improvement
SEC. 221. SHORT TITLE.
This subtitle may be cited as the ``Small Business Lending
Improvement Act''.
SEC. 222. NATIONAL PREFERRED LENDERS PROGRAM.
Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is
amended by adding at the end the following:
``(E) National preferred lenders program.--The
Administrator shall establish a National Preferred
Lenders Program by regulation or procedural notice. Any
preferred lender authorized by the Administrator to
operate as a preferred lender on a national basis prior
to the date of the enactment of the Small Business
Reauthorization Act of 2006 shall continue that status
to the extent that the lender continues to meet the
qualifications for preferred lender status under this
section. ''.
SEC. 223. MAXIMUM LOAN AMOUNT.
Section 7(a)(3) of the Small Business Act (15 U.S.C. 636(a)(3)(A))
is amended--
(1) in subparagraph (A), by striking ``$1,500,000 (or if
the gross loan amount would exceed $2,000,000)'' and inserting
``$2,250,000 (or if the gross loan amount would exceed
$3,000,000)''; and
(2) in subparagraph (B), by striking ``$1,750,000, of which
not more than $1,250,000'' and inserting ``$2,500,000, of which
not more than $2,000,000''.
SEC. 224. ALTERNATIVE SIZE STANDARD.
Section 3(a)(3) of the Small Business Act (15 U.S.C. 632(a)(3)) is
amended--
(1) by striking ``When establishing'' and inserting the
following:
``Establishment of size standards.--
``(A) In general.--When establishing''; and
(2) by adding at the end the following:
``(B) Alternative size standard.--
``(i) In general.--Not later than 180 days after
the date of enactment of this subparagraph, the
Administrator shall establish an alternative size
standard under paragraph (2), that shall be applicable
to loan applicants under section 7(a) or under title V
of the Small Business Investment Act of 1958 (15 U.S.C.
695 et seq.).
``(ii) Criteria.--The alternative size standard
established under clause (i) shall utilize the maximum
net worth and maximum net income of the prospective
borrower as an alternative to the use of industry
standards.
``(iii) Affiliation.--In developing the size
standard, the Administrator shall not take into account
any affiliation between the prospective borrower and
any other entity if the prospective borrower has no
legal recourse to an affiliate to repay the loan made
pursuant to section 7(a).
``(iv) Interim rule.--Until the Administrator
establishes an alternative size standard under clause
(i), the Administrator shall use the alternative size
standard in section 121.301(b) of title 13, Code of
Federal Regulations, for loan applicants under section
7(a) or under title V of the Small Business Investment
Act of 1958 (15 U.S.C. 695 et seq.).''.
SEC. 225. TIMELY PAYMENT OF 7(A) SECONDARY MARKET FEE.
Section 5(g)(2) of the Small Business Act is amended--
(1) by inserting ``(A)'' before ``The Administration''; and
(2) by adding at the end the following:
``(B)(i) With respect to the Administration's guaranty of the
timely payment of the principal and interest on trust certificates
issued under this subsection on or after October 1, 2007, the
Administration may assess, collect, and retain a fee in the amount and
frequency, as established annually by the Administration, as necessary
to reduce to zero the cost (as defined in section 502 of the Federal
Credit Reform Act of 1990) to the Administration of making this
guaranty. The Administration may contract with an agent to carry out,
on behalf of the Administration, the assessment and collection of such
fee.
``(ii) The fee specified in clause (i) shall be--
``(I) payable by the holders of such trust certificates;
and
``(II) deducted from the amounts otherwise payable to the
holders of such trust certificates, until the fee is paid in
full.
``(iii) The fee specified in clause (i) shall not be charged to any
borrower whose loan is represented in the secondary market by a trust
certificate authorized under subparagraph (A).''.
Subtitle C--Small Business Investment
SEC. 241. PARTICIPATING SECURITY SMALL BUSINESS INVESTMENT COMPANIES.
Part A of title III of the Small Business Investment Act of 1958
(15 U.S.C. 681 et seq.) is amended by adding at the end the following:
``SEC. 321. PARTICIPATING SECURITY SMALL BUSINESS INVESTMENT COMPANIES.
``(a) Application.--This section applies to companies licensed to
use participating securities pursuant to this title after September 30,
2004. Except as provided in this section, all other provisions of this
title apply to companies licensed to use participating securities after
September 30, 2004.
``(b) Authority to Guarantee.--
``(1) In general.--
``(A) In order to encourage small business
investment companies to provide equity capital to small
businesses, the Administrator is authorized to
guarantee the payment of the redemption price and
prioritized payments on participating securities issued
by such companies which are licensed pursuant to
section 301(c) of this Act, and a trust or a pool
acting on behalf of the Administrator is authorized to
purchase such securities.
``(B) Participating securities guaranteed under
this section may not exceed 100 percent of the
regulatory capital of the company as defined by the
Administrator.
``(2) Terms and conditions of the guarantee.--Such
guarantees and purchases shall be made on such terms and
conditions as the Administrator shall establish by regulation.
``(c) Restrictions on Participating Securities.--In addition to any
limitations imposed by the Administrator that are not inconsistent with
this section, participating securities guaranteed under this section
shall be subject to the following restrictions and limitations:
``(1) Obligations of with respect to participating
securities and prioritized payments.--
``(A) In general.--Participating securities shall
be redeemed not later than 10 years after their date of
issuance for an amount equal to 100 percent of the
original issue price plus the amount of any accrued
prioritized payment.
``(B) Obligation to make prioritized payments and
redeem participating securities.--
``(i) In general.--A company licensed under
this section shall be obligated to pay accrued
and unpaid prioritized payments and redeem its
participating securities irrespective of the
profitability of the company.
``(ii) Limitation on in-kind
distributions.--A company may not make any in-
kind distributions unless all accrued
prioritized payments and leverage outstanding
as of the date of distribution have been paid
in full by cash payment by the company.
``(2) Prioritized payments.--
``(A) In general.--Prioritized payments on
participating securities shall be preferred and
cumulative and payable out of any gross receipts of the
issuing company.
``(B) Interest rate of priority payments.--
Prioritized payments shall accrue at a rate determined
by the Secretary of the Treasury taking into
consideration the current average market yield on
outstanding marketable obligations of the United States
with remaining periods to maturity comparable to the
average maturities on such securities, adjusted to the
nearest one-eighth of 1 percent, plus an additional
charge, in an amount established annually by the
Administrator, as necessary to reduce to zero the cost
(as defined in section 502 of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661a)) to the Administrator of
purchasing and guaranteeing participating securities
under this section, which amount may not exceed 1.5
percent per year, and which shall be paid to and
retained by the Administrator.
``(C) Payment of accrued prioritized payments.--Any
accrued but unpaid prioritized payments shall be due
and payable on the seventh anniversary of the date of
issuance of the participating security to which they
apply. Prioritized payments accruing after the seventh
anniversary shall be paid semiannually thereafter until
the participating security to which they apply has been
redeemed.
``(3) Seniority of participating security.--In the event of
liquidation of the company, participating securities and
accrued but unpaid prioritized payments shall be senior in
priority for all purposes to all other equity interests in the
issuing company, whenever created.
``(4) Investment in equity capital.--Any company issuing a
participating security under this section shall commit to
invest or shall invest an amount equal to the outstanding face
value of such security solely in equity capital.
``(5) Limitations on outside debt.--The only debt other
than leverage obtained in accordance with this title which any
company issuing a participating security under this section may
have outstanding shall be temporary debt in amounts limited to
not more than 50 percent of private capital.
``(d) Distributions by Licensee.--
``(1) Order and types of distributions.--
``(A) Payment of prioritized payments.--Accrued but
unpaid prioritized payments shall be paid whenever a
company has gross receipts on payment dates prescribed
by the Administrator. If not previously paid in full,
accrued but unpaid prioritized payments shall be paid
upon the seventh anniversary of the issuance of the
participating security to which they apply and
semiannually thereafter until the participating
security is redeemed in full.
``(B) Tax distributions.--
``(i) In general.--If a company is
operating as a limited partnership or as a
subchapter S corporation or an equivalent pass-
through entity for tax purposes and if there
are no accumulated and unpaid prioritized
payments, the company may make annual
distributions to the partners, shareholders, or
members in amounts not greater than each
partner's, shareholder's, or member's maximum
tax liability attributable to the operations of
the company; provided, however, that such
distributions shall not be permitted in any
period in which distributions characterized as
either return of capital or profit are
sufficient to pay the liability calculated in
accordance with this paragraph.
``(ii) Interim tax distributions.--A
company may also elect to make a distribution
under this paragraph at any time during any
calendar quarter based on an estimate of the
maximum tax liability. If a company makes one
or more interim distributions for a calendar
year, and the aggregate amount of those
distributions exceeds the maximum amount that
the company could have distributed based on a
single annual computation, any subsequent
distribution by the company under this
paragraph shall be reduced by an amount equal
to the excess amount distributed.
``(C) Payment of outstanding leverage and return of
capital.--After making any distributions pursuant to
subparagraphs (A) and (B), whenever a company with
participating securities outstanding has gross receipts
it shall return capital to its investors, specifically
including the Administrator. Any distributions made
under this subparagraph shall be made to private
investors and to the Administrator in the ratio of
private capital to leverage as of the date of the
distribution until leverage outstanding as of the date
of distribution has been redeemed in full.
``(D) Distribution of profits.--After making
distributions pursuant to subparagraphs (A), (B), and
(C), a company shall distribute any profits in excess
reserves for reasonably anticipated expenses and other
liabilities for the following 12 months to its
investors and to the Administrator in accordance with
the following:
``(i) To the Administrator, 50 percent of
the leverage percent reduced by the weighted
average of all prioritized payment rates paid
by the company with respect to participating
securities issued by the company to the date of
distribution.
``(ii) The balance to the company's private
investors in accordance with the company's
controlling documents.
``(iii) A company operating under this
section shall be entitled to subtract from any
calculation of profit management expenses not
more than 2.5 percent of the combined capital
of the company plus an additional $125,000 if
the combined capital of the company is less
than $20,000,000.
``(E) In-kind profit distributions.--
``(i) A licensee may elect to may make all
or part of distribution under subparagraph (C),
including any distribution to the
Administrator, as an in-kind distribution only
to the extent that such securities are publicly
traded and marketable.
``(ii) In-kind distributions to the
Administrator shall be deposited with a trustee
designated by the Administrator that has
substantial expertise and experience in the
sale of thinly traded securities. Designation
of the trustee must occur not later than 180
days after the effective date of this section.
``(iii) If the Administrator receives in-
kind distributions and upon sale of such
securities realizes less than the value of such
securities at the date of the distribution, the
Administrator shall not be permitted to seek
from the licensee the difference between the
value of such securities on the date of the in-
kind distribution and the value on the date of
sale by the Administrator.
``(iv) If the Administrator receives in-
kind distributions and upon sale of such
securities realizes more than the value of such
securities at the date of distribution, the
Administrator shall be entitled to retain the
difference between the value of such securities
on the date of the in-kind distribution and the
value on the date of sale by the Administrator.
Any excess value received by the Administrator
shall not reduce any liability of the company
with respect to prioritized payments or
redemption of participating securities.
``(e) Leverage Fees.--
``(1) In general.--The Administrator shall collect a fee of
three percent of the face amount of any leverage granted to a
licensee pursuant to this section.
``(2) Timing of fee payment.--
``(A) One-third of such fee is payable upon the
date at which the Administrator and licensee enter into
a commitment for such leverage.
``(B) Two-thirds of such fee is payable upon the
date such leverage is drawn.
``(C) If there is no commitment between the
Administrator and the licensee under subparagraph (A),
all of such fee is due on the date on which the
leverage is drawn by the licensee.
``(f) Calculation of Subsidy Rate.--All fees, interest, and profits
received and retained by the Administrator under this section shall be
included in the calculations made by the Director of the Office of
Management and Budget to offset the cost (as that term is defined in
section 502 of the Federal Credit Reform Act of 1990) to the
Administrator of purchasing and guaranteeing debentures and
participating securities under this Act.
``(g) Definitions.--In this section:
``(1) The term `participating security' means a
participating debt security issued to the Administrator that
obligates the issuing company to pay prioritized payments and
principal when due and a percentage of the profits, if any, of
the company to the Administrator as provided in this section.
``(2) The term `prioritized payments' means interest
payable on such participating securities in accordance with
this section.
``(3) The term `gross receipts' means any cash received by
a small business investment company, including investment
proceeds (both return of capital and profit), interest,
dividends, and fees, other than capital contributed by a
partner, the proceeds of the issuance of participating
securities, and other money (if any) borrowed by the small
business investment company.
``(4) The term `equity capital' means common or preferred
stock or a similar instrument, including subordinated debt with
equity features which is not amortized and which provides for
interest payments from appropriate sources, as determined by
the Administrator.
``(5) The term `combined capital' means the aggregate
amount of private capital, outstanding leverage, and
commitments of the Administrator held by the company.
``(6) The term `management expenses' includes salaries,
office expenses, travel, business development, office and
equipment rental, bookkeeping and the development,
investigation and monitoring of investments, but does not
include the cost of services provided by specialized outside
consultants, outside lawyers, and outside auditors, who perform
services not generally expected of a venture capital company,
nor does such term include the cost of services provided by any
affiliate of the company that are not part of the normal
process of making and monitoring venture capital investments.
``(7) The term `leverage percent' means the percent
calculated by dividing the aggregate amount of participating
security leverage previously drawn by the company (including
leverage previously repaid) by that same amount plus the
aggregate amount of capital previously contributed to the
company by its private investors (including capital previously
returned to those investors).
``(8) The term `maximum tax liability' means the amount of
income allocated to each partner, shareholder, or member
(including an allocation to the Administration as if it were a
taxpayer) for Federal income tax purposes in the income tax
return filed or to be filed by the company with respect to the
fiscal year of the company immediately preceding such
distribution, multiplied by the highest combined marginal
Federal and State income tax rates for corporations or
individuals, whichever is higher, on each type of income
included in such return.
``(9) The term `State income tax' means the income tax of
the State where the company's principal place of business is
located.''.
TITLE III--ENTREPRENEURSHIP
Subtitle A--National Small Business Regulatory Assistance
SEC. 301. SHORT TITLE.
This subtitle may be cited as the ``National Small Business
Regulatory Assistance Act''.
SEC. 302. PURPOSE.
The purpose of this subtitle is to establish a program to--
(1) provide confidential assistance to small business
concerns;
(2) provide small business concerns with the information
necessary to improve their rate of compliance with Federal and
State regulations;
(3) create a partnership among Federal agencies to increase
outreach efforts to small business concerns with respect to
regulatory compliance;
(4) provide a mechanism for unbiased feedback to Federal
agencies on the regulatory environment for small business
concerns; and
(5) utilize the service delivery network of Small Business
Development Centers to improve access of small business
concerns to programs to assist them with regulatory compliance.
SEC. 303. DEFINITIONS.
In this subtitle, the definitions set forth in section 37(a) of the
Small Business Act (as added by section 304 of this subtitle) shall
apply.
SEC. 304. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM.
The Small Business Act (15 U.S.C. 637 et seq.) is amended--
(1) by redesignating section 37 as section 99; and
(2) by inserting after section 36 the following new
section:
``SEC. 37. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM.
``(a) Definitions.--In this section, the following definitions
apply:
``(1) Association.--The term `Association' means the
association recognized by the Administrator of the Small
Business Administration under section 21(a)(3)(A).
``(2) Participating small business development center.--The
term `participating Small Business Development Center' means a
Small Business Development Center participating in the program.
``(3) Program.--The term `program' means the regulatory
assistance program established under this section.
``(4) Regulatory compliance assistance.--The term
`regulatory compliance assistance' means assistance provided by
a Small Business Development Center to a small business concern
to enable the concern to comply with Federal regulatory
requirements.
``(5) Small business development center.--The term `Small
Business Development Center' means a Small Business Development
Center described in section 21.
``(6) State.--The term `State' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, and American Samoa.
``(b) Authority.--In accordance with this section, the
Administrator shall establish a program to provide regulatory
compliance assistance to small business concerns through selected Small
Business Development Centers, the Association of Small Business
Development Centers, and Federal compliance partnership programs.
``(c) Small Business Development Centers.--
``(1) In general.--In carrying out the program, the
Administrator shall enter into arrangements with selected Small
Business Development Centers under which such Centers shall
provide--
``(A) access to information and resources,
including current Federal and State nonpunitive
compliance and technical assistance programs similar to
those established under section 507 of the Clean Air
Act (42 U.S.C. 7661f);
``(B) training and educational activities;
``(C) confidential, free-of-charge, one-on-one, in-
depth counseling to the owners and operators of small
business concerns regarding compliance with Federal and
State regulations, as long as such counseling is not
considered to be the practice of law in a State in
which a Small Business Development Center is located or
in which such counseling is conducted;
``(D) technical assistance;
``(E) referrals to experts and other providers of
compliance assistance who meet such standards for
educational, technical, and professional competency as
are established by the Administrator; and
``(F) access to the Internet and training on
Internet use, including the use of the Internet website
established by the Administrator under subsection
(d)(1)(C).
``(2) Reports.--
``(A) In general.--Each selected Small Business
Development Center shall transmit to the Administrator
a quarterly report that includes--
``(i) a summary of the regulatory
compliance assistance provided by the center
under the program; and
``(ii) any data and information obtained by
the center from a Federal agency regarding
regulatory compliance that the agency intends
to be disseminated to small business concerns.
``(B) Electronic form.--Each report required under
subparagraph (A) shall be transmitted in electronic
form.
``(C) Interim reports.--A participating Small
Business Development Center may transmit to the
Administrator such interim reports as the Center
considers appropriate.
``(d) Data Repository and Clearinghouse.--
``(1) In general.--In carrying out the program, the
Administrator shall--
``(A) act as the repository of and clearinghouse
for data and information submitted by Small Business
Development Centers;
``(B) submit to the President, the Committee on
Small Business and Entrepreneurship of the Senate, and
the Committee on Small Business of the House of
Representatives an annual report that includes--
``(i) a description of the types of
assistance provided by participating Small
Business Development Centers under the program;
``(ii) data regarding the number of small
business concerns that contacted participating
Small Business Development Centers regarding
assistance under the program;
``(iii) data regarding the number of small
business concerns assisted by participating
Small Business Development Centers under the
program;
``(iv) data and information regarding
outreach activities conducted by participating
Small Business Development Centers under the
program, including any activities conducted in
partnership with Federal agencies;
``(v) data and information regarding each
case known to the Administrator in which one or
more Small Business Development Centers offered
conflicting advice or information regarding
compliance with a Federal or State regulation
to one or more small business concerns; and
``(vi) any recommendations for improvements
in the regulation of small business concerns;
``(C) establish an Internet website that--
``(i) provides access to Federal, State,
academic, and industry association Internet
websites containing industry-specific
regulatory compliance information that the
Administrator deems potentially useful to small
businesses attempting to comply with Federal
regulations; and
``(ii) arranges such Internet websites in
industry-specific categories.
``(e) Eligibility.--
``(1) In general.--A Small Business Development Center
shall be eligible to receive assistance under the program only
if the center is certified under section 21(k)(2).
``(2) Waiver.--With respect to a Small Business Development
Center seeking assistance under the program, the administrator
may waive the certification requirement set forth in paragraph
(1) if the Administrator determines that the center is making a
good faith effort to obtain such certification.
``(3) Effective date.--The restriction described in
paragraph (1) shall not apply to any Small Business Development
Center before October 1, 2005.
``(f) Selection of Participating State Programs.--
``(1) Establishment of program.--In consultation with the
Association and giving substantial weight to the Association's
recommendations, the Administrator shall select the Small
Business Development Center programs of 2 States from each of
the following groups of States to participate in the program:
``(A) Group 1: Maine, Massachusetts, New Hampshire,
Connecticut, Vermont, and Rhode Island.
``(B) Group 2: New York, New Jersey, Puerto Rico,
and the Virgin Islands.
``(C) Group 3: Pennsylvania, Maryland, West
Virginia, Virginia, the District of Columbia, and
Delaware.
``(D) Group 4: Georgia, Alabama, North Carolina,
South Carolina, Mississippi, Florida, Kentucky, and
Tennessee.
``(E) Group 5: Illinois, Ohio, Michigan, Indiana,
Wisconsin, and Minnesota.
``(F) Group 6: Texas, New Mexico, Arkansas,
Oklahoma, and Louisiana.
``(G) Group 7: Missouri, Iowa, Nebraska, and
Kansas.
``(H) Group 8: Colorado, Wyoming, North Dakota,
South Dakota, Montana, and Utah.
``(I) Group 9: California, Guam, Hawaii, Nevada,
and Arizona.
``(J) Group 10: Washington, Alaska, Idaho, and
Oregon.
``(2) Deadline for initial selections.--The Administrator
shall make selections under paragraph (1) not later than 60
days after promulgation of regulations under section 305 of the
National Small Business Regulatory Assistance Act.
``(3) Additional selections.--Not earlier than the date 3
years after the date of the enactment of this paragraph, the
Administrator may select Small Business Development Center
programs of States in addition to those selected under
paragraph (1). The Administrator shall consider the effect on
the programs selected under paragraph (1) before selecting
additional programs under this paragraph.
``(4) Coordination to avoid duplication with other
programs.--In selecting programs under this subsection, the
Administrator shall give a preference to Small Business
Development Center programs that have a plan for consulting
with Federal and State agencies to ensure that any assistance
provided under this section is not duplicated by an existing
Federal or State program.
``(g) Matching Not Required.--Subparagraphs (A) and (B) of section
21(a)(4) shall not apply to assistance made available under the
program.
``(h) Distribution of Grants.--
``(1) In general.--Except as provided in paragraph (2),
each State program selected to receive a grant under subsection
(f) in a fiscal year shall be eligible to receive a grant in an
amount not to exceed the product obtained by multiplying--
``(A) the amount made available for grants under
this section for the fiscal year; and
``(B) the ratio that the population of the State
bears to the population of all the States with programs
selected to receive grants under subsection (f) for the
fiscal year.
``(2) Minimum amount.--The minimum amount that a State
program selected to receive a grant under subsection (f) shall
be eligible to receive under this section for any fiscal year
shall be $200,000. The Administrator shall reduce the amount
described in paragraph (1) as appropriate to carry out the
purposes of this paragraph and subsection (i)(2).
``(i) Evaluation and Report.--Not later than 3 years after the
establishment of the program, the Comptroller General of the United
States shall conduct an evaluation of the program and shall transmit to
the Administrator, the Committee on Small Business and Entrepreneurship
of the Senate, and the Committee on Small Business of the House of
Representatives a report containing the results of the evaluation along
with any recommendations as to whether the program, with or without
modification, should be extended to include the participation of all
Small Business Development Centers.
``(j) Authorization of Appropriations.--
``(1) In general.--Subject to paragraph (2), there is
authorized to be appropriated to carry out this section
$5,000,000 for fiscal year 2008 and each subsequent fiscal
year.
``(2) Amounts authorized only if section 21 fully funded.--
No funds are authorized to be appropriated to carry out this
section for a fiscal year unless the program level authorized
to be appropriated to carry out section 21 is fully funded for
that fiscal year.
``(3) Limitation on use of other funds.--The Administrator
shall carry out the program only with amounts appropriated in
advance specifically to carry out this section.''.
SEC. 305. PROMULGATION OF REGULATIONS.
After providing notice and an opportunity for comment and after
consulting with the Association (but not later than 180 days after the
date of the enactment of this Act), the Administrator shall promulgate
final regulations to carry out this subtitle, including regulations
that establish--
(1) priorities for the types of assistance to be provided
under the program;
(2) standards relating to educational, technical, and
support services to be provided by participating Small Business
Development Centers;
(3) standards relating to any national service delivery and
support function to be provided by the Association under the
program;
(4) standards relating to any work plan that the
Administrator may require a participating Small Business
Development Center to develop; and
(5) standards relating to the educational, technical, and
professional competency of any expert or other assistance
provider to whom a small business concern may be referred for
compliance assistance under the program.
Subtitle B--Vocational and Technical Entrepreneurship Development
SEC. 311. SHORT TITLE.
This subtitle may be cited as the ``Vocational and Technical
Entrepreneurship Development Act''.
SEC. 312. VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT
PROGRAM.
(a) In General.--The Small Business Act (15 U.S.C. 631 et seq.) is
amended by inserting after section 37 (as added by section 304) the
following new section:
``SEC. 38. VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT
PROGRAM.
``(a) Definitions.--In this section, the following definitions
apply:
``(1) Association.--The term `Association' means the
association of small business development centers recognized
under section 21(a)(3)(A).
``(2) Program.--The term `program' means the program
established under subsection (b).
``(3) Small business development center.--The term `small
business development center' means a small business development
center described in section 21.
``(4) State small business development center.--The term
`State small business development center' means a small
business development center from each State selected by the
Administrator, in consultation with the Association and giving
substantial weight to the Association's recommendations, to
carry out the program on a statewide basis in such State.
``(b) Establishment.--In accordance with this section, the
Administrator shall establish a program under which the Administrator
shall make grants to State small business development centers to enable
such centers to provide, on a statewide basis, technical assistance to
secondary schools, postsecondary vocational schools, or technical
schools, for the development and implementation of curricula designed
to promote vocational and technical entrepreneurship.
``(c) Grant Amount.--
``(1) Minimum grant.--Each grant awarded by the
Administrator under the program shall be in an amount not less
than $200,000.
``(2) No matching requirement.--The Administrator shall not
require, as a condition of receiving a grant under this
section, that the applicant provide a matching amount, either
in cash or as in-kind contributions.
``(d) Application.--Each State small business development center
seeking a grant under the program shall submit to the Administrator an
application in such form as the Administrator may require. The
application shall include information regarding the applicant's goals
and objectives for the educational programs to be assisted.
``(e) Report to Administrator.--As a condition of each grant
awarded under the program, the Administrator shall require the
recipient to transmit to the Administrator, not later than 18 months
after the date of receipt of the grant, a report describing how the
grant funds were used.
``(f) Cooperative Agreements and Contracts.--The Administrator may
enter into a cooperative agreement or contract with any State small
business development center receiving a grant under this section to
provide additional assistance that furthers the purposes of this
section.
``(g) Evaluation of Program.--Not later than March 31, 2010, the
Administrator shall transmit to Congress a report containing an
evaluation of the program.
``(h) Clearinghouse.--The Association shall act as a clearinghouse
of information and expertise regarding vocational and technical
entrepreneurship education programs. In each fiscal year in which
grants are made under the program, the Administrator shall provide
additional assistance to the Association to carry out the functions
described in this subsection.
``(i) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $7,000,000 for each of fiscal
years 2008 through 2010. Such sums shall remain available until
expended.
``(j) Funding Limitations.--
``(1) Nonapplicability of certain limitations.--Subject to
paragraph (2), amounts made available under this section are in
addition to any amounts available under section 21(a)(4).
``(2) Amounts authorized only if section 21 fully funded.--
No funds are authorized to be appropriated to carry out this
section for a fiscal year unless the program level authorized
to be appropriated to carry out section 21 is fully funded for
that fiscal year.
``(3) Limitation on use of funds.--The Administrator shall
carry out this section using only amounts appropriated in
advance specifically for the purpose of carrying out this
section.''.
Subtitle C--Native American Small Business Development
SEC. 321. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds the following:
(1) Approximately 60 percent of Indian tribe members and
Alaska Natives live on or adjacent to Indian lands, which
suffer from an average unemployment rate of 45 percent.
(2) Indian tribe members and Alaska Natives own more than
197,000 businesses and generate more than $34,000,000,000 in
revenues. The service industry accounted for 17 percent of
these businesses (of which 40 percent were engaged in business
and personal services) and 15.1 percent of their total
receipts. The next largest was the construction industry (13.9
percent and 15.7 percent, respectively). The third largest was
the retail trade industry (7.5 percent and 13.4 percent,
respectively).
(3) The number of businesses owned by Indian tribe members
and Alaska Natives grew by 84 percent from 1992 to 1997, and
their gross receipts grew by 179 percent in that period. This
is compared to all businesses which grew by 7 percent, and
their total gross receipts grew by 40 percent, in that period.
(4) The Small Business Development Center program is cost
effective. Clients receiving long-term counseling under the
program in 1998 generated additional tax revenues of
$468,000,000, roughly 6 times the cost of the program to the
Federal Government.
(5) Using the existing infrastructure of the Small Business
Development Center program, small businesses owned by Indian
tribe members, Alaska Natives, and Native Hawaiians receiving
services under the program will have a higher survival rate
than the average small business not receiving such services.
(6) Business counseling and technical assistance is
critical on Indian lands where similar services are scarce and
expensive.
(7) Increased assistance through counseling under the Small
Business Development Center program has been shown to reduce
the default rate associated with lending programs of the Small
Business Administration.
(b) Purposes.--The purposes of this subtitle are as follows:
(1) To stimulate economies on Indian lands.
(2) To foster economic development on Indian lands.
(3) To assist in the creation of new small businesses owned
by Indian tribe members, Alaska Natives, and Native Hawaiians
and expand existing ones.
(4) To provide management, technical, and research
assistance to small businesses owned by Indian tribe members,
Alaska Natives, and Native Hawaiians.
(5) To seek the advice of local Tribal Councils on where
small business development assistance is most needed.
(6) To ensure that Indian tribe members, Alaska Natives,
and Native Hawaiians have full access to existing business
counseling and technical assistance available through the Small
Business Development Center program.
SEC. 322. SMALL BUSINESS DEVELOPMENT CENTER ASSISTANCE TO INDIAN TRIBE
MEMBERS, ALASKA NATIVES, AND NATIVE HAWAIIANS.
(a) In General.--Section 21(a) of the Small Business Act (15 U.S.C.
648(a)) is amended by adding at the end the following:
``(8) Additional grant to assist indian tribe members,
alaska natives, and native hawaiians.--
``(A) In general.--Any applicant in an eligible
State that is funded by the Administration as a Small
Business Development Center may apply for an additional
grant to be used solely to provide services described
in subsection (c)(3) to assist with outreach,
development, and enhancement on Indian lands of small
business startups and expansions owned by Indian tribe
members, Alaska Natives, and Native Hawaiians.
``(B) Eligible states.--For purposes of
subparagraph (A), an eligible State is a State that has
a combined population of Indian tribe members, Alaska
Natives, and Native Hawaiians that comprises at least 1
percent of the State's total population, as shown by
the latest available census.
``(C) Grant applications.--An applicant for a grant
under subparagraph (A) shall submit to the
Administration an application that is in such form as
the Administration may require. The application shall
include information regarding the applicant's goals and
objectives for the services to be provided using the
grant, including--
``(i) the capability of the applicant to
provide training and services to a
representative number of Indian tribe members,
Alaska Natives, and Native Hawaiians;
``(ii) the location of the Small Business
Development Center site proposed by the
applicant;
``(iii) the required amount of grant
funding needed by the applicant to implement
the program; and
``(iv) the extent to which the applicant
has consulted with local Tribal Councils.
``(D) Applicability of grant requirements.--An
applicant for a grant under subparagraph (A) shall
comply with all of the requirements of this section,
except that the matching funds requirements under
paragraph (4)(A) shall not apply.
``(E) Maximum amount of grants.--No applicant may
receive more than $300,000 in grants under this
paragraph for one fiscal year.
``(F) Regulations.--After providing notice and an
opportunity for comment and after consulting with the
Association recognized by the Administration pursuant
to paragraph (3)(A) (but not later than 180 days after
the date of enactment of this paragraph), the
Administration shall issue final regulations to carry
out this paragraph, including regulations that
establish--
``(i) standards relating to educational,
technical, and support services to be provided
by Small Business Development Centers receiving
assistance under this paragraph; and
``(ii) standards relating to any work plan
that the Administration may require a Small
Business Development Center receiving
assistance under this paragraph to develop.
``(G) Definitions.--In this section, the following
definitions apply:
``(i) Indian lands.--The term `Indian
lands' has the meaning given the term `Indian
country' in section 1151 of title 18, United
States Code, the meaning given the term `Indian
reservation' in section 151.2 of title 25, Code
of Federal Regulations (as in effect on the
date of enactment of this paragraph), and the
meaning given the term `reservation' in section
4 of the Indian Child Welfare Act of 1978 (25
U.S.C. 1903).
``(ii) Indian tribe.--The term `Indian
tribe' means any band, nation, or organized
group or community of Indians located in the
contiguous United States, and the Metlakatla
Indian Community, whose members are recognized
as eligible for the services provided to
Indians by the Secretary of the Interior
because of their status as Indians.
``(iii) Indian tribe member.--The term
`Indian tribe member' means a member of an
Indian tribe (other than a Alaska Native).
``(iv) Alaska native.--The term `Alaska
Native' has the meaning given the term `Native'
in section 3(b) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602(b)).
``(v) Native hawaiian.--The term `Native
Hawaiian' means any individual who is--
``(I) a citizen of the United
States; and
``(II) a descendant of the
aboriginal people, who prior to 1778,
occupied and exercised sovereignty in
the area that now constitutes the State
of Hawaii.
``(vi) Tribal organization.--The term
`tribal organization' has the meaning given
that term in section 4(l) of the Indian Self-
Determination and Education Assistance Act (25
U.S.C. 450b(l)).
``(H) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
paragraph $7,000,000 for each of fiscal years 2008
through 2010.
``(I) Funding limitations.--
``(i) Nonapplicability of certain
limitations.--Subject to clause (ii), funding
under this paragraph shall be in addition to
the dollar program limitations specified in
paragraph (4).
``(ii) Amounts authorized only if rest of
section 21 fully funded.--No funds are
authorized to be appropriated to carry out this
paragraph for a fiscal year unless the program
level authorized to be appropriated to carry
out the other activities under this section is
fully funded for that fiscal year.
``(iii) Limitation on use of funds.--The
Administration may carry out this paragraph
only with amounts appropriated in advance
specifically to carry out this paragraph.''.
SEC. 323. STATE CONSULTATION WITH TRIBAL ORGANIZATIONS.
Section 21(c) of the Small Business Act (15 U.S.C. 648(c)) is
amended by adding at the end the following:
``(9) Advice of local tribal organizations.--A Small
Business Development Center receiving a grant under this
section shall request the advice of tribal organization on how
best to provide assistance to Indian tribe members, Alaska
Natives, and Native Hawaiians and where to locate satellite
centers to provide such assistance.''.
Subtitle D--Second-Stage Small Business Development
SEC. 331. SHORT TITLE.
This subtitle may be cited as the ``Second-Stage Small Business
Development Act''.
SEC. 332. PURPOSE.
The purpose of this subtitle is to establish a four-year pilot
program to--
(1) identify second-stage small business concerns that have
the capacity for significant business growth and job creation;
(2) facilitate business growth and job creation by second-
stage small business concerns through the development of peer
learning opportunities; and
(3) utilize the network of small business development
centers to expand access to peer learning opportunities for
second-stage small business concerns.
SEC. 333. PILOT PROGRAM.
(a) Establishment.--The Administrator shall establish and carry out
a pilot program (referred to in this subtitle as the ``pilot program'')
to make grants to eligible entities for the development of peer
learning opportunities for second-stage small business concerns in
accordance with this subtitle.
(b) Selection of Grant Recipients.--
(1) In general.--From the eligible entities located in the
States in each of the 10 regions under paragraph (3), the
Administrator shall select 2 eligible entities to receive
grants.
(2) Eligible entities.--In this subtitle, the term
``eligible entity'' means an entity that--
(A) is eligible to receive funding under section 21
of the Small Business Act (15 U.S.C. 648); and
(B) submits to the Secretary an application that
includes--
(i) a plan to--
(I) offer peer learning
opportunities to second-stage small
business concerns; and
(II) transition to providing such
opportunities using non-governmental
funding; and
(ii) any other information and assurances
that the Secretary may require.
(3) Criteria for selection.--The Administrator shall
evaluate the plans submitted by the eligible entities under
paragraph (2) and select eligible entities to receive grants on
the basis of the merit of such plans.
(4) Regions described.--The regions referred to in
paragraph (1) are as follows:
(A) Region 1.--Maine, Massachusetts, New Hampshire,
Connecticut, Vermont, and Rhode Island.
(B) Region 2.--New York, New Jersey, Puerto Rico,
and the Virgin Islands.
(C) Region 3.--Pennsylvania, Maryland, West
Virginia, Virginia, the District of Columbia, and
Delaware.
(D) Region 4.--Georgia, Alabama, North Carolina,
South Carolina, Mississippi, Florida, Kentucky, and
Tennessee.
(E) Region 5.--Illinois, Ohio, Michigan, Indiana,
Wisconsin, and Minnesota.
(F) Region 6.--Texas, New Mexico, Arkansas,
Oklahoma, and Louisiana.
(G) Region 7.--Missouri, Iowa, Nebraska, and
Kansas.
(H) Region 8.--Colorado, Wyoming, North Dakota,
South Dakota, Montana, and Utah.
(I) Region 9.--California, Guam, Hawaii, Nevada,
Arizona, and American Samoa.
(J) Region 10.--Washington, Alaska, Idaho, and
Oregon.
(5) Consultation.--If small business development centers
have formed an association to pursue matters of common concern
as authorized under section 21(a)(3)(A) of the Small Business
Act (15 U.S.C. 648(a)(3)(A)), the Administrator shall consult
with such association and give substantial weight to the
recommendations of such association in selecting the grant
recipients.
(6) Deadline for initial selections.--The Administrator
shall make selections under paragraph (1) not later than 60
days after the promulgation of regulations under section 334.
(c) Use of Funds.--An eligible entity that receives a grant under
the pilot program shall use the grant to--
(1) identify second-stage small business concerns in the
service delivery areas of the eligible entity; and
(2) establish and conduct peer learning opportunities for
such second-stage small business concerns.
(d) Amount of Grant.--
(1) In general.--Except as provided in paragraph (2), a
grant under the pilot program shall be in an amount that does
not exceed the product obtained by multiplying--
(A) the amount made available for grants under the
pilot program for the fiscal year for which the grant
is made; and
(B) the ratio that the population of the State in
which the eligible entity is located bears to the
aggregate population the States in which eligible
entities receiving grants for that fiscal year are
located.
(2) Minimum amount of grant.--A grant under the pilot
program shall be in an amount not less than $50,000.
(e) Matching Requirement.--As a condition of a grant under the
pilot program, the Administrator shall require that a matching amount
be provided from sources other than the Federal Government that--
(1) is equal to the amount of the grant, or in the case of
an eligible entity that is a community college, historically
Black college, Hispanic-serving institution, or other minority
institution, is equal to 50 percent of the amount of the grant;
(2) is not less than 50 percent cash;
(3) is not more than 50 percent comprised of indirect costs
and in-kind contributions; and
(4) does not include any indirect cost or in-kind
contribution derived from any Federal program.
(f) Quarterly Report to Administrator.--
(1) In general.--Each eligible entity that receives a grant
under the pilot program shall submit to the Administrator a
quarterly report that includes--
(A) a summary of the peer learning opportunities
established by the eligible entity using grant funds;
(B) the number of second-stage small business
concerns assisted using grant funds; and
(C) in the case of an eligible entity that receives
a grant for a second fiscal year or any subsequent
fiscal year--
(i) any measurable economic impact data
resulting from the peer learning opportunities
established using grant funds; and
(ii) the number of peer learning
opportunities established by the eligible
entity that have transitioned from operating
using Government funds to operating without
using Government funds.
(2) Form of report.--The report required under paragraph
(1) shall be transmitted in electronic form.
(g) Data Repository and Clearinghouse.--In carrying out the pilot
program, the Administrator shall act as the repository of and
clearinghouse for data and information submitted by the eligible
entities.
(h) Annual Report on Pilot Program.--Not later than November 1 of
each year, the Administrator shall submit to the President and to
Congress, a report evaluating the success of the pilot program during
the preceding fiscal year, which shall include the following:
(1) A description of the types of peer learning
opportunities provided with grant funds.
(2) The number of second-stage small business concerns
assisted with grant funds.
(3) For fiscal year 2009 and each subsequent fiscal year of
the pilot program--
(A) data regarding the economic impact of the peer
learning opportunities provided with grant funds; and
(B) the number of peer learning opportunities
established by grant recipients that have transitioned
from operating using Government funds to operating
without using Government funds.
(i) Privacy Requirement.--The privacy requirements that apply under
subparagraphs (A) and (B) of section 21(a)(7) of the Small Business Act
to financial assistance under section 21 of that Act also apply to
financial assistance under this section.
(j) Evaluation and Report.--Not later than 3 years after the
establishment of the pilot program, the Comptroller General of the
United States shall--
(1) conduct an evaluation of the pilot program; and
(2) transmit to Congress and the Administrator a report
containing the results of such evaluation along with any
recommendations as to whether the pilot program, with or
without modification, should be extended to include the
participation of all small business development centers.
(k) Termination.--The pilot program shall terminate on September
30, 2011.
SEC. 334. REGULATIONS.
After providing notice and an opportunity for comment and after
consulting with the association described in section 333(b)(5) (if any
such association has been formed), the Administrator shall promulgate
final regulations to carry out this subtitle, including regulations
that establish--
(1) standards relating to the establishment and conduct of
peer learning opportunities to be provided by grant recipients,
including the number of individuals that may participate in a
peer group that is part of a peer learning opportunity;
(2) standards relating to the educational, technical, and
professional competency of any facilitator who delivers peer
learning opportunities under the pilot program; and
(3) requirements for transitioning peer learning
opportunities funded under the pilot program to non-
governmental funding.
SEC. 335. DEFINITIONS.
In this subtitle:
(1) The term ``Administrator'' means the Administrator of
the Small Business Administration.
(2) The term ``peer learning opportunities'' means formally
organized peer groups of owners, presidents and chief executive
officers in non-competing second-stage business concerns,
meeting regularly with a professionally trained facilitator.
(3) The term ``second-stage small business concern'' means
a small business concern that--
(A) has experienced high growth demonstrated by--
(i) an average annual revenue or employee
growth rate of at least 15 percent during the
preceding 3 years; or
(ii) any 3 of--
(I) owning proprietary intellectual
property;
(II) addressing an underserved or
growing market;
(III) having a sustainable
competitive advantage;
(IV) exporting goods or services
outside of its community; and
(V) having a product or service
that is scalable to a large market; and
(B) does not exceed the size standard for the North
American Industrial Classification System code of such
concern, as established pursuant to section 3(a) of the
Small Business Act (15 U.S.C. 632(a)).
(4) The term ``small business concern'' has the meaning
given that term under section 3 of the Small Business Act (15
U.S.C. 632).
(5) The term ``State'' means each of the several States,
the District of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, and American Samoa.
(6) The term ``community college'' has the meaning given
that term in section 3301(3) of the Higher Education Act of
1965 (20 U.S.C. 7011(3)).
(7) The term ``historically Black college'' means a part B
institution, as defined in section 322(2) of the Higher
Education Act of 1965 (20 U.S.C. 1061(2)).
(8) The term ``Hispanic-serving institution'' has the
meaning given that term in section 502(a)(5) of the Higher
Education Act of 1965 (20 U.S.C. 1101a(a)(5)).
(9) The term ``minority institution'' has the meaning given
that term in section 365(3) of the Higher Education Act of 1965
(20 U.S.C. 1067k(3)).
SEC. 336. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Subject to subsection (b), there is authorized to
be appropriated to carry out this subtitle $1,500,000 for each of
fiscal years 2008 through 2011.
(b) Amounts Authorized Only if Section 21 Fully Funded.--No funds
are authorized to be appropriated to carry out this section for a
fiscal year unless the program level authorized to be appropriated to
carry out section 21 is fully funded for that fiscal year.
(c) Limitation on Use of Other Funds.--The Administrator shall
carry out this subtitle using only amounts appropriated in advance
specifically for the purpose of carrying out this subtitle.
Subtitle E--Trade Provisions
SEC. 341. ESTABLISHMENT OF ASSOCIATE ADMINISTRATOR FOR INTERNATIONAL
TRADE IN SMALL BUSINESS ADMINISTRATION.
(a) Establishment.--Section 22(a) of the Small Business Act (15
U.S.C. 649(a)) is amended by adding at the end the following: ``The
head of the Office shall be the Associate Administrator for
International Trade, who shall be responsible to the Administrator.''.
(b) Authority for Additional Associate Administrator.--Section
4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) is amended--
(1) in the fifth sentence, by striking ``five Associate
Administrators'' and inserting ``Associate Administrators'';
and
(2) by adding at the end the following: ``One of the
Associate Administrators shall be the Associate Administrator
for International Trade, who shall be the head of the Office of
International Trade established under section 22.''.
(c) Discharge of Administration International Trade
Responsibilities.--Section 22 of the Small Business Act, as amended by
subsection (a), is further amended by adding at the end the following
new subsection:
``(h) The Administrator shall ensure that--
``(1) the responsibilities of the Administration regarding
international trade are carried out through the Associate
Administrator for International Trade;
``(2) the Associate Administrator for International Trade
has sufficient resources to carry out such responsibilities;
and
``(3) the Associate Administrator for International Trade
has direct supervision and control over the staff of the Office
of International Trade, and over any employee of the
Administration whose principal duty station is a United States
Export Assistance Center or any successor entity.''.
(d) Role of Associate Administrator in Carrying Out International
Trade Policy.--Section 2(b)(1) of such Act (15 U.S.C. 631(b)(1)) is
amended in the matter preceding subparagraph (A)--
(1) by inserting ``the Administrator of'' before ``the
Small Business Administration''; and
(2) by inserting ``through the Associate Administrator for
International Trade'' before ``in cooperation with''.
(e) Conforming Amendments.--Section 22 of the Small Business Act
(15 U.S.C. 649), as amended by subsections (a) and (c) is further
amended--
(1) in subsection (b)--
(A) in the matter preceding paragraph (1), by
striking ``The Office'' and inserting ``The Associate
Administrator''; and
(B) in paragraph (3), by striking ``the director of
the Office'' and inserting ``the Associate
Administrator'';
(2) in subsection (c) in the matter preceding paragraph
(1), by striking ``The Office'' and inserting ``The Associate
Administrator'';
(3) in subsection (d), by striking ``Office'' both places
it appears and inserting ``Associate Administrator'';
(4) in subsection (e), in the matter preceding paragraph
(1), by striking ``The Office'' and inserting ``The Associate
Administrator''; and
(5) in subsections (f) and (g), by striking ``The Office''
and inserting ``The Associate Administrator''.
(f) Technical Amendment.--Section 22 of the Small Business Act (15
U.S.C. 649), as amended by subsections (a), (c), and (e), is further
amended by striking the period at the end of subsection (c)(5) and
inserting a semicolon.
(g) Effective Date.--The Administrator shall appoint an Associate
Administrator for International Trade pursuant to sections 4 and 22 of
the Small Business Act (15 U.S.C. 648) (as amended by this section) not
later than 90 days after the date of the enactment of this Act.
TITLE IV--MISCELLANEOUS
SEC. 401. SMALL BUSINESS DISASTER LOANS.
(a) Increase in Certain Economic Injury Disaster Loan Amounts.--
Section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) is
amended--
(1) by redesignating subparagraphs (A), (B), (C), and (D)
as clauses (i), (ii), (iii), and (v), respectively;
(2) by striking ``(2) to make sure loans'' and inserting
the following: ``(2)(A) to make such loans'';
(3) by striking ``or'' at the end of each of clauses (i),
(ii), and (iii), as redesignated by paragraph (1);
(4) by inserting after clause (iii) the following new
clause (iv):
``(iv) an incident of national significance as
declared by the Secretary of Homeland Security that is
an actual or potential high-impact event that requires
a coordinated and effective response by an appropriate
combination of Federal, State, local, tribal,
nongovernmental, or private-sector entities in order to
save lives and minimize damage and provide the basis
for long-term community recovery and mitigation
activities.'';
(5) by adding at the end the following new subparagraphs:
``(B) In the case of an incident of national significance
described in subparagraph (A)(iv), a loan or guarantee under
this paragraph may be made to a small business concern or small
agricultural cooperative located inside or outside the declared
disaster area, if the small business concern or small
agricultural cooperative suffered substantial economic injury
as a direct result of the incident of national significance.
``(C) The aggregate amount of the following shall not
exceed $10,000,000:
``(i) Any loan or guarantee made to a small
business concern or small agricultural cooperative
pursuant to a determination of substantial economic
injury as a result of an incident of national
significance described in subparagraph (A)(iv).
``(ii) Any loan or guarantee made to such small
business concern or small agricultural cooperative
under paragraph (1)(D).''; and
(6) by striking ``: Provided That no loan'' and all that
follows and inserting the following new subparagraph:
``(D) No loan or guarantee shall be made to a small
business concern or small agricultural cooperative under this
paragraph pursuant to a determination of substantial economic
injury as a result of a disaster described in subparagraph (A)
if the Administrator finds such concern or cooperative is able
to obtain credit elsewhere.''.
(b) Technical Amendments.--Section 7(b) of such Act is further
amended--
(1) by striking ``the, Administration'' and inserting ``the
Administration''; and
(2) in paragraph (2)(A)(i), as redesignated by subsection
(a), by striking ``Disaster Relief and Emergency Assistance
Act'' and inserting ``Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.)''.
(c) Effective Date.--The amendments made by subsections (a) and (b)
shall apply with respect to a loan or guarantee made on or after the
date of the enactment of this Act.
SEC. 402. DISASTER LOANS FOR INCIDENTS OF NATIONAL SIGNIFICANCE.
(a) Disaster Loans for Private Nonprofit Organizations.--The
Administrator of the Small Business Administration may make or
guarantee an economic injury disaster loan under section 7(b)(2) of the
Small Business Act (15 U.S.C. 636(b)(2)) to a private nonprofit
organization (as that term is defined in section 29(a)(2) of such Act
(15 U.S.C. 656(a)(2))) that is located in an area affected by an
incident of national significance (as declared by the Secretary of
Homeland Security).
(b) Disaster Mitigation Loans for Small Businesses.--
(1) Authority.--The Administrator of the Small Business
Administration may make or guarantee a mitigation loan to a
small business concern (as defined in section 3 of the Small
Business Act (15 U.S.C. 632)) that receives a loan under
section 7(b)(1)(A) of that Act (15 U.S.C. 636(b)(1)(A)) for the
damage or destruction, by reason of an incident of national
significance (as declared by the Secretary of Homeland
Security), of property owned by the small business concern.
(2) Amount of loan.--The amount of a loan under paragraph
(1) shall not exceed 20 percent of the total amount of the cost
of the damage or destruction referred to in paragraph (1). The
total amount shall be calculated without regard for any costs
for which the small business concern is reimbursed under any
insurance policy or otherwise.
(c) Applicability for Fiscal Year 2006 to Hurricanes Katrina and
Rita.--
(1) In general.--For fiscal year 2006, the Administrator--
(A) may carry out subsection (a) with respect to a
private nonprofit organization that was located, as of
August 28, 2005, in a hurricane-affected area; and
(B) may carry out subsection (b) with respect to a
small business concern that was located, as of August
28, 2005, in a hurricane-affected area, for damage or
destruction by reason of Hurricane Katrina or Hurricane
Rita.
(2) Hurricane-affected area defined.--The term ``hurricane-
affected area'' means a county or parish in the State of
Alabama, Mississippi, Louisiana, or Texas, that has been
designated by the Administrator of the Small Business
Administration as a disaster area by reason of Hurricane
Katrina or Hurricane Rita under disaster declaration 10176,
10177, 10178, 10179, 10180, 10181, 10203, 10204, 10205, or
10206.
SEC. 403. SMALL BUSINESS DEVELOPMENT CENTER PORTABILITY GRANTS.
Section 21 of the Small Business Act (15 U.S.C.648) is amended in
subsection (a)(4)(C)(viii)--
(1) by striking ``as a result of a business or government
facility down sizing or closing, which has resulted in the loss
of jobs or small business instability'' and inserting ``as a
result of events that have resulted, or will result, in
business or government facility downsizing or closing''; and
(2) by adding at the end the following: ``At the discretion
of the Administrator, awards in excess of the $100,000 limit
imposed by the preceding sentence may be made to recipients to
accommodate extraordinary occurrences having catastrophic
impact on the communities' small businesses.''.
SEC. 404. ASSISTANCE TO OUT-OF-STATE BUSINESSES.
Section 21 of the Small Business Act (15 U.S.C. 648(b)(3)) is
amended in subsection (b)(3) by adding at the end the following: ``The
Administrator may also, in the Administrator's discretion, authorize a
small business development center to provide such assistance to small
businesses located outside the State without regard to geographic
proximity where the small businesses are located in a disaster area
declared under section 7(b)(2)(A).''
SEC. 405. ELIMINATION OF UNNECESSARY PROGRAMS.
The following provisions of the Small Business Act are repealed:
(1) Subsection (h) and (i) of section 7 (15 U.S.C. 636).
(2) Section 24 (15 U.S.C. 651).
(3) Section 25 (15 U.S.C. 652).
SEC. 406. TECHNICAL CORRECTION.
Section 3 of the Small Business Act (15 U.S.C. 632) is amended in
subsection (p)(4)(D)(iv) by striking ``base closures of redevelopment''
and inserting ``base closures or redevelopment''.
SEC. 407. COMBATING WASTE, FRAUD, AND ABUSE.
(a) In General.--Section 16 of the Small Business Act (15 U.S.C.
645) is amended--
(1) in subsection (a)--
(A) by inserting after ``false'' the following:
``or knowingly causes another to make a false
statement'';
(B) by inserting after ``this Act'' the following:
``or the Small Business Investment Act of 1958''; and
(C) by striking ``$5,000'' and inserting
``$250,000'';
(2) in subsection (b)--
(A) by inserting after ``being'' the following:
``an officer, agent, or employee of the Administration
or''; and
(B) by striking ``$10,000'' and inserting
``$250,000'';
(3) in subsection (c), by striking ``the Administration,''
and all that follows through the period at the end and
inserting ``the Administration, or any property mortgaged or
pledged as security for any promissory note, or other evidence
of indebtedness, which has been given in order to obtain a loan
under this Act or the Small Business Investment Act of 1958,
shall be fined not more than $250,000 or imprisoned not more
than five years, or both; but if the value of such property
does not exceed $5,000, he shall be fined not more than $10,000
or imprisoned not more than one year, or both.''; and
(4) in subsection (d)(2)(C), by inserting after ``(or any
successor regulation)'' the following: ``, or as specified in
part 145 of title 13, Code of Federal Regulations (or any
successor regulation),''.
(b) Authority of Administration to Require Identification of
Referral Agents and Packagers.--Section 5 of the Small Business Act (15
U.S.C. 634) is amended in subsection (b)--
(1) in paragraph (13) by striking ``and'' at the end;
(2) in paragraph (14) by striking the period at the end and
inserting ``; and''; and
(3) by adding after paragraph (14) the following:
``(15) require an individual who is a referral agent or
packager (as those terms are defined by the Administrator) who
provides assistance to a small business concern that applies
for a loan under section 7 of this Act, or a loan made under
the authority of title V of the Small Business Investment Act
of 1958, to provide to the Administrator the individual's name,
date of birth, and Social Security number.''.
SEC. 408. RELIEF AVAILABLE AGAINST ADMINISTRATOR.
Section 5 of the Small Business Act (15 U.S.C. 634) is amended in
subsection (b)(1) by striking ``but no attachment'' and all that
follows through the semicolon at the end.
SEC. 409. ECONOMIC INJURY DISASTER LOANS TO NONPROFITS.
(a) In General.--Section 7 of the Small Business Act (15 U.S.C.
636) is amended in subsection (b)(2)--
(1) in the matter preceding subparagraph (A)--
(A) by inserting after ``small business concern''
the following: ``, private nonprofit organization,'';
and
(B) by inserting after ``the concern'' the
following: ``, organization,''; and
(2) in subparagraph (D) by inserting after ``small business
concerns'' the following: ``, private nonprofit
organizations,''.
(b) Conforming Amendment.--Such section is further amended in
subsection (c)(5)(C) by inserting after ``business'' the following: ``,
organization,''.
SEC. 410. EXTENSION OF CO-SPONSORSHIP AUTHORITY.
Section 132 of the Small Business Reauthorization and Manufacturing
Assistance Act of 2004 (division K of Public Law 108-447; 118 Stat.
3453; 15 U.S.C. 633 note) is amended in subsection (c) by striking
``2006'' and inserting ``2010''.
SEC. 411. REGULATIONS ON SIZE STANDARDS OF FRANCHISEES.
(a) Promulgation.--Not later than 180 days after the date of the
enactment of this Act, the Administrator of the Small Business
Administration shall repeal section 121.103(i) of title 13, Code of
Federal Regulations (as in effect on the date of the enactment of this
Act), and promulgate a new regulation, after opportunity for notice and
comment, taking into account whether the franchisee or licensee--
(1) retains the majority of its profits but not less than
51 percent;
(2) bears the burdens of its losses;
(3) shares no common ownership or management personnel with
the franchisor or licensor;
(4) maintains daily control of its operations including
determining who its customers will be; and
(5) is subject to excessive restrictions on the sale of its
business given the interest of the franchisor or licensor in
protecting the goodwill of its trademarks, tradenames, or
service marks.
(b) Failure to Promulgate New Standard.--If the Administrator fails
to comply with subsection (a), any franchisee or licensee shall be
treated as small for purposes of the Small Business Act until the
Administrator has issued a final regulation as required under
subsection (a).
SEC. 412. DISTRICT DIRECTORS PROHIBITED FROM BEING INVOLVED IN
SELECTION OF SBDC DIRECTORS.
Section 21(c)(2) of the Small Business Act (15 U.S.C. 648(c)(2)) is
amended by amending subparagraph (A) to read as follows:
``(A) a full-time staff, including a full-time
director who--
``(i) shall have the authority to make
expenditures under the center's budget and
shall manage the program activities; and
``(ii) shall be selected only by the
recipient of the grant funds allocated pursuant
to subsection (a) of this section and approved
by the Associate Administrator of the Office of
Small Business Development Centers, through a
process under which employees in district and
regional offices of the Administration,
including District Directors and Regional
Administrators, may provide advice to the
Associate Administrator but shall have no
authority to select, approve, or disapprove of
any person as full-time director;''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Small Business.
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