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. 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. 216. Definition of rural.
Sec. 217. Regulations and effective date.
Subtitle B--Small Business Lending Improvement
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. 304. Small business regulatory assistance program.
Sec. 305. Promulgation of regulations.
Subtitle B--Vocational and Technical Entrepreneurship Development
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. 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:
`(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.
`(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.
`(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.
`(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:
`(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.
`(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--
`(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--
`(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--
`(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--
`(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-
`(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.
`(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.
`(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).
`(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.
`(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.
`(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) 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.
(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.
(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
(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--
(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--
(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';
(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;'.
END
