§ 636. — Additional powers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC636]
TITLE 15--COMMERCE AND TRADE
CHAPTER 14A--AID TO SMALL BUSINESS
Sec. 636. Additional powers
(a) Loans to small business concerns; allowable purposes; qualified
business; restrictions and limitations
The Administration is empowered to the extent and in such amounts as
provided in advance in appropriation Acts to make loans for plant
acquisition, construction, conversion, or expansion, including the
acquisition of land, material, supplies, equipment, and working capital,
and to make loans to any qualified small business concern, including
those owned by qualified Indian tribes, for purposes of this chapter.
Such financings may be made either directly or in cooperation with banks
or other financial institutions through agreements to participate on an
immediate or deferred (guaranteed) basis. These powers shall be subject,
however, to the following restrictions, limitations, and provisions:
(1) In general.--
(A) Credit elsewhere.--No financial assistance shall be
extended pursuant to this subsection if the applicant can obtain
credit elsewhere. No immediate participation may be purchased
unless it is shown that a deferred participation is not
available; and no direct financing may be made unless it is
shown that a participation is not available.
(B) Background checks.--Prior to the approval of any loan
made pursuant to this subsection, or section 503 of the Small
Business Investment Act of 1958 [15 U.S.C. 697], the
Administrator may verify the applicant's criminal background, or
lack thereof, through the best available means, including, if
possible, use of the National Crime Information Center computer
system at the Federal Bureau of Investigation.
(2) Level of participation in guaranteed loans.--
(A) In general.--Except as provided in subparagraph (B), in
an agreement to participate in a loan on a deferred basis under
this subsection (including a loan made under the Preferred
Lenders Program), such participation by the Administration shall
be equal to--
(i) 75 percent of the balance of the financing
outstanding at the time of disbursement of the loan, if such
balance exceeds $150,000; or
(ii) 85 percent of the balance of the financing
outstanding at the time of disbursement of the loan, if such
balance is less than or equal to $150,000.
(B) Reduced participation upon request.--
(i) In general.--The guarantee percentage specified by
subparagraph (A) for any loan under this subsection may be
reduced upon the request of the participating lender.
(ii) Prohibition.--The Administration shall not use the
guarantee percentage requested by a participating lender
under clause (i) as a criterion for establishing priorities
in approving loan guarantee requests under this subsection.
(C) Interest rate under preferred lenders program.--
(i) In general.--The maximum interest rate for a loan
guaranteed under the Preferred Lenders Program shall not
exceed the maximum interest rate, as determined by the
Administration, applicable to other loans guaranteed under
this subsection.
(ii) Preferred lenders program defined.--For purposes of
this subparagraph, the term ``Preferred Lenders Program''
means any program established by the Administrator, as
authorized under the proviso in section 634(b)(7) of this
title, under which a written agreement between the lender
and the Administration delegates to the lender--
(I) complete authority to make and close loans with
a guarantee from the Administration without obtaining
the prior specific approval of the Administration; and
(II) complete authority to service and liquidate
such loans without obtaining the prior specific approval
of the Administration for routine servicing and
liquidation activities, but shall not take any actions
creating an actual or apparent conflict of interest.
(D) Participation under export working capital program.--
Notwithstanding subparagraph (A), in an agreement to participate
in a loan on a deferred basis under the Export Working Capital
Program established pursuant to paragraph (14)(A), such
participation by the Administration shall not exceed 90 percent.
(3) No loan shall be made under this subsection--
(A) if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the business
loan and investment fund established by this chapter would
exceed $1,000,000 (or if the gross loan amount would exceed
$2,000,000), except as provided in subparagraph (B);
(B) if the total amount outstanding and committed (on a
deferred basis) solely for the purposes provided in paragraph
(16) to the borrower from the business loan and investment fund
established by this chapter would exceed $1,250,000, of which
not more than $750,000 may be used for working capital,
supplies, or financings under paragraph (14) for export
purposes; and
(C) if effected either directly or in cooperation with banks
or other lending institutions through agreements to participate
on an immediate basis if the amount would exceed $350,000.
(4) Interest rates and prepayment charges.--
(A) Interest rates.--Notwithstanding the provisions of the
constitution of any State or the laws of any State limiting the
rate or amount of interest which may be charged, taken,
received, or reserved, the maximum legal rate of interest on any
financing made on a deferred basis pursuant to this subsection
shall not exceed a rate prescribed by the Administration, and
the rate of interest for the Administration's share of any
direct or immediate participation loan shall not exceed the
current average market yield on outstanding marketable
obligations of the United States with remaining periods to
maturity comparable to the average maturities of such loans and
adjusted to the nearest one-eighth of 1 per centum, and an
additional amount as determined by the Administration, but not
to exceed 1 per centum per annum: Provided, That for those loans
to assist any public or private organization for the handicapped
or to assist any handicapped individual as provided in paragraph
(10) of this subsection, the interest rate shall be 3 per centum
per annum.
(B) Payment of accrued interest.--
(i) In general.--Any bank or other lending institution
making a claim for payment on the guaranteed portion of a
loan made under this subsection shall be paid the accrued
interest due on the loan from the earliest date of default
to the date of payment of the claim at a rate not to exceed
the rate of interest on the loan on the date of default,
minus one percent.
(ii) Loans sold on secondary market.--If a loan
described in clause (i) is sold on the secondary market, the
amount of interest paid to a bank or other lending
institution described in that clause from the earliest date
of default to the date of payment of the claim shall be no
more than the agreed upon rate, minus one percent.
(iii) Applicability.--Clauses (i) and (ii) shall not
apply to loans made on or after October 1, 2000.
(C) Prepayment charges
(i) In general.--A borrower who prepays any loan
guaranteed under this subsection shall remit to the
Administration a subsidy recoupment fee calculated in
accordance with clause (ii) if--
(I) the loan is for a term of not less than 15
years;
(II) the prepayment is voluntary;
(III) the amount of prepayment in any calendar year
is more than 25 percent of the outstanding balance of
the loan; and
(IV) the prepayment is made within the first 3 years
after disbursement of the loan proceeds.
(ii) Subsidy recoupment fee.--The subsidy recoupment fee
charged under clause (i) shall be--
(I) 5 percent of the amount of prepayment, if the
borrower prepays during the first year after
disbursement;
(II) 3 percent of the amount of prepayment, if the
borrower prepays during the second year after
disbursement; and
(III) 1 percent of the amount of prepayment, if the
borrower prepays during the third year after
disbursement.
(5) No such loans including renewals and extensions thereof may
be made for a period or periods exceeding twenty-five years, except
that such portion of a loan made for the purpose of acquiring real
property or constructing, converting, or expanding facilities may
have a maturity of twenty-five years plus such additional period as
is estimated may be required to complete such construction,
conversion, or expansion.
(6) All loans made under this subsection shall be of such sound
value or so secured as reasonably to assure repayment: Provided,
however, That--
(A) for loans to assist any public or private organization
or to assist any handicapped individual as provided in paragraph
(10) of this subsection any reasonable doubt shall be resolved
in favor of the applicant;
(B) recognizing that greater risk may be associated with
loans for energy measures as provided in paragraph (12) of this
subsection, factors in determining ``sound value'' shall
include, but not be limited to, quality of the product or
service; technical qualifications of the applicant or his
employees; sales projections; and the financial status of the
business concern: Provided further, That such status need not be
as sound as that required for general loans under this
subsection; and \1\
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\1\ So in original. The ``; and'' probably should be a period.
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(C) Repealed. Pub. L. 97-35, title XIX, Sec. 1910, Aug. 13,
1981, 95 Stat. 778.
On that portion of the loan used to refinance existing indebtedness
held by a bank or other lending institution, the Administration
shall limit the amount of deferred participation to 80 per centum of
the amount of the loan at the time of disbursement: Provided
further, That any authority conferred by this subparagraph on the
Administration shall be exercised solely by the Administration and
shall not be delegated to other than Administration personnel.
(7) The Administration may defer payments on the principal of
such loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful establishment and
operation of such concern.
(8) The Administration may make loans under this subsection to
small business concerns owned and controlled by disabled veterans
(as defined in section 4211(3) of title 38).
(9) The Administration may provide loans under this subsection
to finance residential or commercial construction or rehabilitation
for sale: Provided, however, That such loans shall not be used
primarily for the acquisition of land.
(10) The Administration may provide guaranteed loans under this
subsection to assist any public or private organization for the
handicapped or to assist any handicapped individual, including
service-disabled veterans, in establishing, acquiring, or operating
a small business concern.
(11) The Administration may provide loans under this subsection
to any small business concern, or to any qualified person seeking to
establish such a concern when it determines that such loan will
further the policies established in section 631(c) \2\ of this
title, with particular emphasis on the preservation or establishment
of small business concerns located in urban or rural areas with high
proportions of unemployed or low-income individuals or owned by low-
income individuals.
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\2\ See References in Text note below.
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(12)(A) The Administration may provide loans under this
subsection to assist any small business concern, including start up,
to enable such concern to design architecturally or engineer,
manufacture, distribute, market, install, or service energy
measures: Provided, however, That such loan proceeds shall not be
used primarily for research and development.
(b) \3\ The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or
installation of pollution control facilities for the purposes set
forth in section 404 of the Small Business Investment Act of 1958
[15 U.S.C. 694-1]. Notwithstanding the limitation expressed in
paragraph (3) of this subsection, a loan made under this paragraph
may not result in a total amount outstanding and committed to a
borrower from the business loan and investment fund of more than
$1,000,000.
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\3\ So in original. Probably should be ``(B)''.
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(13) The Administration may provide financings under this
subsection to State and local development companies for the purposes
of, and subject to the restrictions in, title V of the Small
Business Investment Act of 1958 [15 U.S.C. 695 et seq.].
(14)(A) The Administration may provide extensions of credit,
standby letters of credit, revolving lines of credit for export
purposes, and other financing to enable small business concerns,
including small business export trading companies and small business
export management companies, to develop foreign markets. A bank or
participating lending institution may establish the rate of interest
on such financings as may be legal and reasonable.
(B) When considering loan or guarantee applications, the
Administration shall give weight to export-related benefits,
including opening new markets for United States goods and services
abroad and encouraging the involvement of small businesses,
including agricultural concerns, in the export market.
(C) The Administration shall aggressively market its export
financing program to small businesses.
(15)(A) The Administration may guarantee loans under this
subsection to qualified employee trusts with respect to a small
business concern for the purpose of purchasing stock of the concern
under a plan approved by the Administrator which, when carried out,
results in the qualified employee trust owning at least 51 per
centum of the stock of the concern.
(B) The plan requiring the Administrator's approval under
subparagraph (A) shall be submitted to the Administration by the
trustee of such trust with its application for the guarantee. Such
plan shall include an agreement with the Administrator which is
binding on such trust and on the small business concern and which
provides that--
(i) not later than the date the loan guaranteed under
subparagraph (A) is repaid (or as soon thereafter as is
consistent with the requirements of section 401(a) of title 26),
at least 51 per centum of the total stock of such concern shall
be allocated to the accounts of at least 51 per centum of the
employees of such concern who are entitled to share in such
allocation,
(ii) there will be periodic reviews of the role in the
management of such concern of employees to whose accounts stock
is allocated, and
(iii) there will be adequate management to assure management
expertise and continuity.
(C) In determining whether to guarantee any loan under this
paragraph, the individual business experience or personal assets of
employee-owners shall not be used as criteria, except inasmuch as
certain employee-owners may assume managerial responsibilities, in
which case business experience may be considered.
(D) For purposes of this paragraph, a corporation which is
controlled by any other person shall be treated as a small business
concern if such corporation would, after the plan described in
subparagraph (B) is carried out, be treated as a small business
concern.
(E) The Administration shall compile a separate list of
applications for assistance under this paragraph, indicating which
applications were accepted and which were denied, and shall report
periodically to the Congress on the status of employee-owned firms
assisted by the Administration.
(16)(A) The Administration may guarantee loans under this
paragraph to assist any eligible small business concern in an
industry engaged in or adversely affected by international trade in
the financing of the acquisition, construction, renovation,
modernization, improvement or expansion of productive facilities or
equipment to be used in the United States in the production of goods
and services involved in international trade, if the Administration
determines that the appropriate upgrading of plant and equipment
will allow the concern to improve its competitive position. Each
such loan shall be secured by a first lien position or first
mortgage on the property or equipment financed by the loan.
(B) A small business concern shall be considered to be engaged
in or adversely affected by international trade for purposes of this
provision if such concern is, as determined by the Administration in
accordance with regulations that it shall develop--
(i) in a position to significantly expand existing export
markets or develop new export markets; or
(ii) adversely affected by import competition in that it
is--
(I) confronting increased direct competition with
foreign firms in the relevant market; and
(II) can demonstrate injury attributable to such
competition.
(17) The Administration shall authorize lending institutions and
other entities in addition to banks to make loans authorized under
this subsection.
(18) Guarantee fees.--
(A) In general.--With respect to each loan guaranteed under
this subsection (other than a loan that is repayable in 1 year
or less), the Administration shall collect a guarantee fee,
which shall be payable by the participating lender, and may be
charged to the borrower, as follows:
(i) A guarantee fee equal to 2 percent of the deferred
participation share of a total loan amount that is not more
than $150,000.
(ii) A guarantee fee equal to 3 percent of the deferred
participation share of a total loan amount that is more than
$150,000, but not more than $700,000.
(iii) A guarantee fee equal to 3.5 percent of the
deferred participation share of a total loan amount that is
more than $700,000.
(B) Retention of certain fees.--Lenders participating in the
programs established under this subsection may retain not more
than 25 percent of a fee collected under subparagraph (A)(i).
(C) Two-year reduction in fees.--With respect to loans
approved during the 2-year period beginning on October 1, 2002,
the guarantee fee under subparagraph (A) shall be as follows:
(i) A guarantee fee equal to 1 percent of the deferred
participation share of a total loan amount that is not more
than $150,000.
(ii) A guarantee fee equal to 2.5 percent of the
deferred participation share of a total loan amount that is
more than $150,000, but not more than $700,000.
(iii) A guarantee fee equal to 3.5 percent of the
deferred participation share of a total loan amount that is
more than $700,000.
(19)(A) In addition to the Preferred Lenders Program authorized
by the proviso in section 634(b)(7) of this title, the
Administration is authorized to establish a Certified Lenders
Program for lenders who establish their knowledge of Administration
laws and regulations concerning the guaranteed loan program and
their proficiency in program requirements. The designation of a
lender as a certified lender shall be suspended or revoked at any
time that the Administration determines that the lender is not
adhering to its rules and regulations or that the loss experience of
the lender is excessive as compared to other lenders, but such
suspension or revocation shall not affect any outstanding guarantee.
(B) In order to encourage all lending institutions and other
entities making loans authorized under this subsection to provide
loans of $50,000 or less in guarantees to eligible small business
loan applicants, the Administration shall develop and allow
participating lenders to solely utilize a uniform and simplified
loan form for such loans.
(C) Authority to liquidate loans.--
(i) In general.--The Administrator may permit lenders
participating in the Certified Lenders Program to liquidate
loans made with a guarantee from the Administration pursuant to
a liquidation plan approved by the Administrator.
(ii) Automatic approval.--If the Administrator does not
approve or deny a request for approval of a liquidation plan
within 10 business days of the date on which the request is made
(or with respect to any routine liquidation activity under such
a plan, within 5 business days) such request shall be deemed to
be approved.
(20)(A) The Administration is empowered to make loans either
directly or in cooperation with banks or other financial
institutions through agreements to participate on an immediate or
deferred (guaranteed) basis to small business concerns eligible for
assistance under subsection (j)(10) of this section and section
637(a) of this title. Such assistance may be provided only if the
Administration determines that--
(i) the type and amount of such assistance requested by such
concern is not otherwise available on reasonable terms from
other sources;
(ii) with such assistance such concern has a reasonable
prospect for operating soundly and profitably within a
reasonable period of time;
(iii) the proceeds of such assistance will be used within a
reasonable time for plant construction, conversion, or
expansion, including the acquisition of equipment, facilities,
machinery, supplies, or material or to supply such concern with
working capital to be used in the manufacture of articles,
equipment, supplies, or material for defense or civilian
production or as may be necessary to insure a well-balanced
national economy; and
(iv) such assistance is of such sound value as reasonably to
assure that the terms under which it is provided will not be
breached by the small business concern.
(B)(i) No loan shall be made under this paragraph if the total
amount outstanding and committed (by participation or otherwise) to
the borrower would exceed $750,000.
(ii) Subject to the provisions of clause (i), in agreements to
participate in loans on a deferred (guaranteed) basis, participation
by the Administration shall be not less than 85 per centum of the
balance of the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a deferred
(guaranteed) basis shall be legal and reasonable.
(iv) Financings made pursuant to this paragraph shall be subject
to the following limitations:
(I) No immediate participation may be purchased unless it is
shown that a deferred participation is not available.
(II) No direct financing may be made unless it is shown that
a participation is unavailable.
(C) A direct loan or the Administration's share of an immediate
participation loan made pursuant to this paragraph shall be any
secured debt instrument--
(i) that is subordinated by its terms to all other
borrowings of the issuer;
(ii) the rate of interest on which shall not exceed the
current average market yield on outstanding marketable
obligations of the United States with remaining periods to
maturity comparable to the average maturities of such loan and
adjusted to the nearest one-eighth of 1 per centum;
(iii) the term of which is not more than twenty-five years;
and
(iv) the principal on which is amortized at such rate as may
be deemed appropriate by the Administration, and the interest on
which is payable not less often than annually.
(21)(A) The Administration may make loans on a guaranteed basis
under the authority of this subsection--
(i) to a small business concern that has been (or can
reasonably be expected to be) detrimentally affected by--
(I) the closure (or substantial reduction) of a
Department of Defense installation; or
(II) the termination (or substantial reduction) of a
Department of Defense program on which such small business
was a prime contractor or subcontractor (or supplier) at any
tier; or
(ii) to a qualified individual or a veteran seeking to
establish (or acquire) and operate a small business concern.
(B) Recognizing that greater risk may be associated with a loan
to a small business concern described in subparagraph (A)(i), any
reasonable doubts concerning the firm's proposed business plan for
transition to nondefense-related markets shall be resolved in favor
of the loan applicant when making any determination regarding the
sound value of the proposed loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in such
amounts as provided in advance in appropriation Acts for the
purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual is--
(i) a member of the Armed Forces of the United States,
honorably discharged from active duty involuntarily or pursuant
to a program providing bonuses or other inducements to encourage
voluntary separation or early retirement;
(ii) a civilian employee of the Department of Defense
involuntarily separated from Federal service or retired pursuant
to a program offering inducements to encourage early retirement;
or
(iii) an employee of a prime contractor, subcontractor, or
supplier at any tier of a Department of Defense program whose
employment is involuntarily terminated (or voluntarily
terminated pursuant to a program offering inducements to
encourage voluntary separation or early retirement) due to the
termination (or substantial reduction) of a Department of
Defense program.
(E) Job creation and community benefit.--In providing assistance
under this paragraph, the Administration shall develop procedures to
ensure, to the maximum extent practicable, that such assistance is
used for projects that--
(i) have the greatest potential for--
(I) creating new jobs for individuals whose employment
is involuntarily terminated due to reductions in Federal
defense expenditures; or
(II) preventing the loss of jobs by employees of small
business concerns described in subparagraph (A)(i); and
(ii) have substantial potential for stimulating new economic
activity in communities most affected by reductions in Federal
defense expenditures.
(22) The Administration is authorized to permit participating
lenders to impose and collect a reasonable penalty fee on late
payments of loans guaranteed under this subsection in an amount not
to exceed 5 percent of the monthly loan payment per month plus
interest.
(23) Annual fee.--
(A) In general.--With respect to each loan guaranteed under
this subsection, the Administration shall, in accordance with
such terms and procedures as the Administration shall establish
by regulation, assess and collect an annual fee in an amount
equal to 0.5 percent of the outstanding balance of the deferred
participation share of the loan. With respect to loans approved
during the 2-year period beginning on October 1, 2002, the
annual fee assessed and collected under the preceding sentence
shall be in an amount equal to 0.25 percent of the outstanding
balance of the deferred participation share of the loan.
(B) Payer.--The annual fee assessed under subparagraph (A)
shall be payable by the participating lender and shall not be
charged to the borrower.
(24) Notification requirement.--The Administration shall notify
the Committees on Small Business of the Senate and the House of
Representatives not later than 15 days before making any significant
policy or administrative change affecting the operation of the loan
program under this subsection.
(25) Limitation on conducting pilot projects.--
(A) In general.--Not more than 10 percent of the total
number of loans guaranteed in any fiscal year under this
subsection may be awarded as part of a pilot program which is
commenced by the Administrator on or after October 1, 1996.
(B) ``Pilot program'' defined.--In this paragraph, the term
`pilot program' means any lending program initiative, project,
innovation, or other activity not specifically authorized by
law.
(C) Low documentation loan program.--The Administrator may
carry out the low documentation loan program for loans of
$100,000 or less only through lenders with significant
experience in making small business loans. Not later than 90
days after September 30, 1996, the Administrator shall
promulgate regulations defining the experience necessary for
participation as a lender in the low documentation loan program.
(26) Calculation of subsidy rate.--All fees, interest, and
profits received and retained by the Administration under this
subsection 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 661a of title 2) to the
Administration of purchasing and guaranteeing loans under this
chapter.
(27) Repealed. Pub. L. 106-8, Sec. 3(c), Apr. 2, 1999, 113 Stat.
16.
(28) Leasing.--In addition to such other lease arrangements as
may be authorized by the Administration, a borrower may permanently
lease to one or more tenants not more than 20 percent of any
property constructed with the proceeds of a loan guaranteed under
this subsection, if the borrower permanently occupies and uses not
less than 60 percent of the total business space in the property.
(29) Real estate appraisals.--With respect to a loan under this
subsection that is secured by commercial real property, an appraisal
of such property by a State licensed or certified appraiser--
(A) shall be required by the Administration in connection
with any such loan for more than $250,000; or
(B) may be required by the Administration or the lender in
connection with any such loan for $250,000 or less, if such
appraisal is necessary for appropriate evaluation of
creditworthiness.
(30) Ownership requirements.--Ownership requirements to
determine the eligibility of a small business concern that applies
for assistance under any credit program under this chapter shall be
determined without regard to any ownership interest of a spouse
arising solely from the application of the community property laws
of a State for purposes of determining marital interests.
(b) Disaster loans; authorization, scope, terms and conditions, etc.
Except as to agricultural enterprises as defined in section
647(b)(1) of this title, the,\4\ Administration also is empowered to the
extent and in such amounts as provided in advance in appropriation
Acts--
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\4\ So in original. The comma probably should not appear.
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(1)(A) to make such loans (either directly or in cooperation
with banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis) as the
Administration may determine to be necessary or appropriate to
repair, rehabilitate or replace property, real or personal, damaged
or destroyed by or as a result of natural or other disasters:
Provided, That such damage or destruction is not compensated for by
insurance or otherwise: And provided further, That the
Administration may increase the amount of the loan by up to an
additional 20 per centum if it determines such increase to be
necessary or appropriate in order to protect the damaged or
destroyed property from possible future disasters by taking
mitigating measures, including, but not limited to, construction of
retaining walls and sea walls, grading and contouring land,
relocating utilities and modifying structures;
(B) to refinance any mortgage or other lien against a totally
destroyed or substantially damaged home or business concern:
Provided, That no loan or guarantee shall be extended unless the
Administration finds that (i) the applicant is not able to obtain
credit elsewhere; (ii) such property is to be repaired,
rehabilitated, or replaced; (iii) the amount refinanced shall not
exceed the amount of physical loss sustained; and (iv) such amounts
shall be reduced to the extent such mortgage or lien is satisfied by
insurance or otherwise; and
(C) during fiscal years 2000 through 2004, to establish a
predisaster mitigation program to make such loans (either directly
or in cooperation with banks or other lending institutions through
agreements to participate on an immediate or deferred (guaranteed)
basis), as the Administrator may determine to be necessary or
appropriate, to enable small businesses to use mitigation techniques
in support of a formal mitigation program established by the Federal
Emergency Management Agency, except that no loan or guarantee may be
extended to a small business under this subparagraph unless the
Administration finds that the small business is otherwise unable to
obtain credit for the purposes described in this subparagraph;
(2) to make such loans (either directly or in cooperation with
banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis) as the
Administration may determined to be necessary or appropriate to any
small business concern or small agricultural cooperative located in
an area affected by a disaster, if the Administration determines
that the concern or the cooperative has suffered a substantial
economic injury as a result of such disaster and if such disaster
constitutes--
(A) a major disaster, as determined by the President under
the Disaster Relief and Emergency Assistance Act [42 U.S.C. 5121
et seq.]; or
(B) a natural disaster, as determined by the Secretary of
Agriculture pursuant to the Consolidated Farm and Rural
Development Act (7 U.S.C. 1961); or
(C) a disaster, as determined by the Administrator of the
Small Business Administration; or
(D) if no disaster declaration has been issued pursuant to
subparagraph (A), (B), or (C), the Governor of a State in which
a disaster has occurred may certify to the Small Business
Administration that small business concerns or small
agricultural cooperatives (1) have suffered economic injury as a
result of such disaster, and (2) are in need of financial
assistance which is not available on reasonable terms in the
disaster stricken area. Upon receipt of such certification, the
Administration may then make such loans as would have been
available under this paragraph if a disaster declaration had
been issued.
Provided, That no loan or guarantee shall be extended pursuant to
this paragraph (2) unless the Administration finds that the
applicant is not able to obtain credit elsewhere.
(3)(A) In this paragraph--
(i) the term ``essential employee'' means an individual who
is employed by a small business concern and whose managerial or
technical expertise is critical to the successful day-to-day
operations of that small business concern;
(ii) the term ``period of military conflict'' has the
meaning given the term in subsection (n)(1) of this section; and
(iii) the term ``substantial economic injury'' means an
economic harm to a business concern that results in the
inability of the business concern--
(I) to meet its obligations as they mature;
(II) to pay its ordinary and necessary operating
expenses; or
(III) to market, produce, or provide a product or
service ordinarily marketed, produced, or provided by the
business concern.
(B) The Administration may make such disaster loans (either
directly or in cooperation with banks or other lending institutions
through agreements to participate on an immediate or deferred basis)
to assist a small business concern that has suffered or that is
likely to suffer substantial economic injury as the result of an
essential employee of such small business concern being ordered to
active military duty during a period of military conflict.
(C) A small business concern described in subparagraph (B) shall
be eligible to apply for assistance under this paragraph during the
period beginning on the date on which the essential employee is
ordered to active duty and ending on the date that is 90 days after
the date on which such essential employee is discharged or released
from active duty.
(D) Any loan or guarantee extended pursuant to this paragraph
shall be made at the same interest rate as economic injury loans
under paragraph (2).
(E) No loan may be made under this paragraph, either directly or
in cooperation with banks or other lending institutions through
agreements to participate on an immediate or deferred basis, if the
total amount outstanding and committed to the borrower under this
subsection would exceed $1,500,000, unless such applicant
constitutes a major source of employment in its surrounding area, as
determined by the Administration, in which case the Administration,
in its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph, no
declaration of a disaster area shall be required.
No loan under this subsection, including renewals and extensions
thereof, may be made for a period or periods exceeding thirty years:
Provided, That the Administrator may consent to a suspension in the
payment of principal and interest charges on, and to an extension in the
maturity of, the Federal share of any loan under this subsection for a
period not to exceed five years, if (A) the borrower under such loan is
a homeowner or a small business concern, (B) the loan was made to enable
(i) such homeowner to repair or replace his home, or (ii) such concern
to repair or replace plant or equipment which was damaged or destroyed
as the result of a disaster meeting the requirements of clause (A) or
(B) of paragraph (2) of this subsection, and (C) the Administrator
determines such action is necessary to avoid severe financial hardship:
Provided further, That the provisions of paragraph (1) of subsection (c)
of this section shall not be applicable to any such loan having a
maturity in excess of twenty years. Notwithstanding the provisions of
any other law, the interest rate on the Administration's share of any
loan made under this subsection, except as provided in subsection (c) of
this section, shall not exceed the average annual interest rate on all
interest-bearing obligations of the United States then forming a part of
the public debt as computed at the end of the fiscal year next preceding
the date of the loan and adjusted to the nearest one-eighth of 1 per
centum plus one-quarter of 1 per centum: Provided, however, That the
interest rate for loans made under paragraphs (1) and (2) hereof shall
not exceed the rate of interest which is in effect at the time of the
occurrence of the disaster. In agreements to participate in loans on a
deferred basis under this subsection, such participation by the
Administration shall not be in excess of 90 per centum of the balance of
the loan outstanding at the time of disbursement. Notwithstanding any
other provision of law, the interest rate on the Administration's share
of any loan made pursuant to paragraph (1) of this subsection to repair
or replace a primary residence and/or replace or repair damaged or
destroyed personal property, less the amount of compensation by
insurance or otherwise, with respect to a disaster occurring on or after
July 1, 1976, and prior to October 1, 1978, shall be: 1 per centum on
the amount of such loan not exceeding $10,000, and 3 per centum on the
amount of such loan over $10,000 but not exceeding $40,000. The interest
rate on the Administration's share of the first $250,000 of all other
loans made pursuant to paragraph (1) of this subsection, with respect to
a disaster occurring on or after July 1, 1976, and prior to October 1,
1978, shall be 3 per centum. All repayments of principal on the
Administration's share of any loan made under the above provisions shall
first be applied to reduce the principal sum of such loan which bears
interest at the lower rates provided in this paragraph. The principal
amount of any loan made pursuant to paragraph (1) in connection with a
disaster which occurs on or after April 1, 1977, but prior to January 1,
1978, may be increased by such amount, but not more than $2,000, as the
Administration determines to be reasonable in light of the amount and
nature of loss, damage, or injury sustained in order to finance the
installation of insulation in the property which was lost, damaged, or
injured, if the uninsured, damaged portion of the property is 10 per
centum or more of the market value of the property at the time of the
disaster. Not later than June 1, 1978, the Administration shall prepare
and transmit to the Select Committee on Small Business of the Senate,
the Committee on Small Business of the House of Representatives, and the
Committees of the Senate and House of Representatives having
jurisdiction over measures relating to energy conservation, a report on
its activities under this paragraph, including therein an evaluation of
the effect of such activities on encouraging the installation of
insulation in property which is repaired or replaced after a disaster
which is subject to this paragraph, and its recommendations with respect
to the continuation, modification, or termination of such activities.
In the administration of the disaster loan program under paragraphs
(1), (2), and (4) of this subsection, in the case of property loss or
damage or injury resulting from a major disaster as determined by the
President or a disaster as determined by the Administrator which occurs
on or after January 1, 1971, and prior to July 1, 1973, the Small
Business Administration, to the extent such loss or damage or injury is
not compensated for by insurance or otherwise--
(A) may make any loan for repair, rehabilitation, or replacement
of property damaged or destroyed without regard to whether the
required financial assistance is otherwise available from private
sources;
(B) may, in the case of the total destruction or substantial
property damage of a home or business concern, refinance any
mortgage or other liens outstanding against the destroyed or damaged
property if such property is to be repaired, rehabilitated, or
replaced, except that (1) in the case of a business concern, the
amount refinanced shall not exceed the amount of the physical loss
sustained, and (2) in the case of a home, the amount of each monthly
payment of principal and interest on the loan after refinancing
under this clause shall not be less than the amount of each such
payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A) or a
mortgage or other lien refinanced under clause (B) in connection
with the destruction of, or substantial damage to, property owned
and used as a residence by an individual who by reason of
retirement, disability, or other similar circumstances relies for
support on survivor, disability, or retirement benefits under a
pension, insurance, or other programs, consent to the suspension of
the payments of the principal of that loan, mortgage, or lien during
the lifetime of that individual and his spouse for so long as the
Administration determines that making such payments would constitute
a substantial hardship;
(D) shall notwithstanding the provisions of any other law and
upon presentation by the applicant of proof of loss or damage or
injury and a bona fide estimate of cost of repair, rehabilitation,
or replacement, cancel the principal of any loan made to cover a
loss or damage or injury resulting from such disaster, except that--
(i) with respect to a loan made in connection with a
disaster occurring on or after January 1, 1971 but prior to
January 1, 1972, the total amount so canceled shall not exceed
$2,500, and the interest on the balance of the loan shall be at
a rate of 3 per centum per annum; and
(ii) with respect to a loan made in connection with a
disaster occurring on or after January 1, 1972 but prior to July
1, 1973, the total amount so canceled shall not exceed $5,000
and the interest on the balance of the loan shall be at a rate
of 1 percentum per annum.
(E) \5\ A State grant made on or prior to July 1, 1979, shall
not be considered compensation for the purpose of applying the
provisions of section 312(a) of the Disaster Relief and Emergency
Assistance Act [42 U.S.C. 5155(a)] to a disaster loan under
paragraph (1), (2), or (4) of this subsection.
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\5\ See 1980 Amendment note below.
With respect to any loan referred to in clause (D) which is outstanding
on August 16, 1972, the Administrator shall--
(i) make such change in the interest rate on the balance of such
loan as is required under that clause effective as of August 16,
1972; and
(ii) in applying the limitation set forth in that clause with
respect to the total amount of such loan which may be canceled,
consider as part of the amount so canceled any part of such loan
which was previously canceled pursuant to section 231 of the
Disaster Relief Act of 1970 [15 U.S.C. 636a].
Whoever wrongfully misapplies the proceeds of a loan obtained under
this subsection shall be civilly liable to the Administrator in an
amount equal to one-and-one half times the original principal amount of
the loan.
(c) Extension or renewal of loans; purchase of participations;
assumption of obligations; disaster loans; interest rates; loan
amounts
(1) The Administration may further extend the maturity of or
renew any loan made pursuant to this section, or any loan
transferred to the Administration pursuant to Reorganization Plan
Numbered 2 of 1954, or Reorganization Plan Numbered 1 of 1957, for
additional periods not to exceed ten years beyond the period stated
therein, if such extension or renewal will aid in the orderly
liquidation of such loan.
(2) During any period in which principal and interest charges
are suspended on the Federal share of any loan, as provided in
subsection (b) of this section, the Administrator shall, upon the
request of any person, firm, or corporation having a participation
in such loan, purchase such participation, or assume the obligation
of the borrower, for the balance of such period, to make principal
and interest payments on the non-Federal share of such loan:
Provided, That no such payments shall be made by the Administrator
in behalf of any borrower unless (i) the Administrator determines
that such action is necessary in order to avoid a default, and (ii)
the borrower agrees to make payments to the Administration in an
aggregate amount equal to the amount paid in its behalf by the
Administrator, in such manner and at such times (during or after the
term of the loan) as the Administrator shall determine having due
regard to the purposes sought to be achieved by this paragraph.
(3) With respect to a disaster occurring on or after October 1,
1978, and prior \6\ August 13, 1981, on the Administration's share
of loans made pursuant to paragraph (1) of subsection (b) of this
section--
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\6\ So in original. Probably should be ``prior to''.
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(A) if the loan proceeds are to repair or replace a primary
residence and/or repair or replace damaged or destroyed personal
property, the interest rate shall be 3 percent on the first
$55,000 of such loan;
(B) if the loan proceeds are to repair or replace property
damaged or destroyed and if the applicant is a business concern
which is unable to obtain sufficient credit elsewhere, the
interest rate shall be as determined by the Administration, but
not in excess of 5 percent per annum; and
(C) if the loan proceeds are to repair or replace property
damaged or destroyed and if the applicant is a business concern
which is able to obtain sufficient credit elsewhere, the
interest rate shall not exceed the current average market yield
on outstanding marketable obligations of the United States with
remaining periods to maturity comparable to the average
maturities of such loans and adjusted to the nearest one-eighth
of 1 percent, and an additional amount as determined by the
Administration, but not to exceed 1 percent: Provided, That
three years after such loan is fully disbursed and every two
years thereafter for the term of the loan, if the Administration
determines that the borrower is able to obtain a loan from non-
Federal sources at reasonable rates and terms for loans of
similar purposes and periods of time, the borrower shall, upon
request by the Administration, apply for and accept such a loan
in sufficient amount to repay the Administration: Provided
further, That no loan under subsection (b)(1) of this section
shall be made, either directly or in cooperation with banks or
other lending institutions through agreements to participate on
an immediate or deferred basis, if the total amount outstanding
and committed to the borrower under such subsection would exceed
$500,000 for each disaster, unless an applicant constitutes a
major source of employment in an area suffering a disaster, in
which case the Administration, in its discretion, may waive the
$500,000 limitation.
(4) Notwithstanding the provisions of any other law, the
interest rate on the Federal share of any loan made under subsection
(b) of this section shall be--
(A) in the case of a homeowner unable to secure credit
elsewhere, the rate prescribed by the Administration but not
more than one-half the 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 of such loans plus an additional charge of not to
exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one-eighth of 1 per
centum but not to exceed 8 per centum per annum;
(B) in the case of a homeowner able to secure credit
elsewhere, the rate prescribed by the Administration but not
more than the 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 of such loans plus an additional charge of not to
exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one-eighth of 1 per
centum;
(C) in the case of a business concern unable to obtain
credit elsewhere, not to exceed 8 per centum per annum;
(D) in the case of a business concern able to obtain credit
elsewhere, the rate prescribed by the Administration but not in
excess of the rate prevailing in private market for similar
loans and not more than the rate prescribed by the
Administration as the maximum interest rate for deferred
participation (guaranteed) loans under subsection (a) of this
section. Loans under this subparagraph shall be limited to a
maximum term of three years.
(5) Notwithstanding the provisions of any other law, the
interest rate on the Federal share of any loan made under subsection
(b)(1) and (b)(2) of this section on account of a disaster
commencing on or after October 1, 1982, shall be--
(A) in the case of a homeowner unable to secure credit
elsewhere, the rate prescribed by the Administration but not
more than one-half the 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 of such loan plus an additional charge of not to
exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 4 per centum per annum;
(B) in the case of a homeowner able to secure credit
elsewhere, the rate prescribed by the Administration but not
more than the 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 of such loans plus an additional charge of not to
exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 8 per centum per annum;
(C) in the case of a business or other concern, including
agricultural cooperatives, unable to obtain credit elsewhere,
not to exceed 4 per centum per annum;
(D) in the case of a business concern able to obtain credit
elsewhere, the rate prescribed by the Administration but not in
excess of the lowest of (i) the rate prevailing in the private
market for similar loans, (ii) the rate prescribed by the
Administration as the maximum interest rate for deferred
participation (guaranteed) loans under subsection (a) of this
section, or (iii) 8 per centum per annum. Loans under this
subparagraph shall be limited to a maximum term of three years.
(6) Notwithstanding the provisions of any other law, such loans,
subject to the reductions required by subparagraphs (A) and (B) of
subsection (b)(1) of this section, shall be in amounts equal to 100
per centum of loss. The interest rates for loans made under
subsection (b)(1) and (2) of this section, as determined pursuant to
paragraph (5), shall be the rate of interest which is in effect on
the date of the disaster commenced: Provided, That no loan under
subsection (b)(1) and (2) of this section shall be made, either
directly or in cooperation with banks or other lending institutions
through agreements to participate on an immediate or deferred
(guaranteed) basis, if the total amount outstanding and committed to
the borrower under subsection (b) of this section would exceed
$500,000 for each disaster unless an applicant constitutes a major
source of employment in an area suffering a disaster, in which case
the Administration, in its discretion, may waive the $500,000
limitation: Provided further, That the Administration, subject to
the reductions required by subparagraphs (A) and (B) of subsection
(b)(1) of this section, shall not reduce the amount of eligibility
for any homeowner on account of loss of real estate to less than
$100,000 for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than $20,000 for each
disaster, such sums being in addition to any eligible refinancing:
Provided further, That the Administration shall not require
collateral for loans of $10,000 or less which are made under
paragraph (1) of subsection (b) of this section. Employees of
concerns sharing a common business premises shall be aggregated in
determining ``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on April 18, 1984, and
which was made on account of a disaster commencing on or after October
1, 1982, the Administrator shall make such change in the interest rate
on the balance of such loan as is required herein effective as of April
18, 1984.
(7) The Administration shall not withhold disaster assistance
pursuant to this paragraph to nurseries who are victims of drought
disasters. As used in subsection (b)(2) of this section the term
``an area affected by a disaster'' includes any county, or county
contiguous thereto, determined to be a disaster by the President,
the Secretary of Agriculture or the Administrator of the Small
Business Administration.
(d) Funds for small business development centers under section 648 of
this title
The Administration shall not fund any Small Business Development
Center or any variation thereof, except as authorized in section 648 of
this title.
(e) [RESERVED]
(f) [RESERVED]
(g) Repealed. Pub. L. 97-35, title XIX, Sec. 1913(c), Aug. 13, 1981, 95
Stat. 780
(h) Loans to handicapped persons and organizations for handicapped
(1) The Administration also is empowered, where other financial
assistance is not available on reasonable terms, to make such loans
(either directly or in cooperation with Banks or other lending
institutions through agreements to participate on an immediate or
deferred basis) as the Administration may determine to be necessary or
appropriate--
(A) to assist any public or private organization--
(i) which is organized under the laws of the United States
or of any State, operated in the interest of handicapped
individuals, the net income of which does not inure in whole or
in part to the benefit of any shareholder or other individual;
(ii) which complies with any applicable occupational health
and safety standard prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities and in the
provision of services during any fiscal year in which it
receives financial assistance under this subsection, employs
handicapped individuals for not less than 75 per centum of the
man-hours required for the production or provision of the
commodities or services; or
(B) to assist any handicapped individual in establishing,
acquiring, or operating a small business concern.
(2) The Administration's share of any loan made under this
subsection shall not exceed $350,000, nor may any such loan be made if
the total amount outstanding and committed (by participation or
otherwise) to the borrower from the business loan and investment fund
established by section 633(c)(1)(B) of this title would exceed $350,000.
In agreements to participate in loans on a deferred basis under this
subsection, the Administration's participation may total 100 per centum
of the balance of the loan at the time of disbursement. The
Administration's share of any loan made under this subsection shall bear
interest at the rate of 3 per centum per annum. The maximum term of any
such loan, including extensions and renewals thereof, may not exceed
fifteen years. All loans made under this subsection shall be of such
sound value or so secured as reasonably to assure repayment: Provided,
however, That any reasonable doubt shall be resolved in favor of the
applicant.
(3) For purposes of this subsection, the term ``handicapped
individual'' means a person who has a physical, mental, or emotional
impairment, defect, ailment, disease, or disability of a permanent
nature which in any way limits the selection of any type of employment
for which the person would otherwise be qualified or qualifiable.
(i) Loans to small business concerns located in urban or rural areas
with high proportions of unemployed or low-income individuals,
or owned by low-income individuals
(1) The Administration also is empowered to make, participate (on an
immediate basis) in, or guarantee loans, repayable in not more than
fifteen years, to any small business concern, or to any qualified person
seeking to establish such a concern, when it determines that such loans
will further the policies established in section 631(b) \7\ of this
title, with particular emphasis on the preservation or establishment of
small business concerns located in urban or rural areas with high
proportions of unemployed or low-income individuals, or owned by low-
income individuals: Provided, however, That no such loans shall be made,
participated in, or guaranteed if the total of such Federal assistance
to a single borrower outstanding at any one time would exceed $100,000.
The Administration may defer payments on the principal of such loans for
a grace period and use such other methods as it deems necessary and
appropriate to assure the successful establishment and operation of such
concern. The Administration may, in its discretion, as a condition of
such financial assistance, require that the borrower take steps to
improve his management skills by participating in a management training
program approved by the Administration: Provided, however, That any
management training program so approved must be of sufficient scope and
duration to provide reasonable opportunity for the individuals served to
develop entrepreneurial and managerial self-sufficiency.
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\7\ See References in Text note below.
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(2) The Administration shall encourage, as far as possible, the
participation of the private business community in the program of
assistance to such concerns, and shall seek to stimulate new private
lending activities to such concerns through the use of the loan
guarantees, participations in loans, and pooling arrangements authorized
by this subsection.
(3) To insure an equitable distribution between urban and rural
areas for loans between $3,500 and $100,000 made under this subsection,
the Administration is authorized to use the agencies and agreements and
delegations developed under title III of the Economic Opportunity Act of
1964, as amended [42 U.S.C. 2841 et seq.], as it shall determine
necessary.
(4) The Administration shall provide for the continuing evaluation
of programs under this subsection, including full information on the
location, income characteristics, and types of businesses and
individuals assisted, and on new private lending activity stimulated,
and the results of such evaluation together with recommendations shall
be included in the report required by section 639(a) of this title.
(5) Loans made pursuant to this subsection (including immediate
participation in and guarantees of such loans) shall have such terms and
conditions as the Administration shall determine, subject to the
following limitations--
(A) there is reasonable assurance of repayment of the loan;
(B) the financial assistance is not otherwise available on
reasonable terms from private sources or other Federal, State, or
local programs;
(C) the amount of the loan, together with other funds available,
is adequate to assure completion of the project or achievement of
the purposes for which the loan is made;
(D) the loan bears interest at a rate not less than (i) a rate
determined by the Secretary of the Treasury, taking into
consideration the average market yield on outstanding Treasury
obligations of comparable maturity, plus (ii) such additional
charge, if any, toward covering other costs of the program as the
Administration may determine to be consistent with its purposes:
Provided, however, That the rate of interest charged on loans made
in redevelopment areas designated under the Public Works and
Economic Development Act of 1965 [42 U.S.C. 3121 et seq.] shall not
exceed the rate currently applicable to new loans made under section
201 of that Act [42 U.S.C. 3141]; and
(E) fees not in excess of amounts necessary to cover
administrative expenses and probable losses may be required on loan
guarantees.
(6) The Administration shall take such steps as may be necessary to
insure that, in any fiscal year, at least 50 per centum of the amounts
loaned or guaranteed pursuant to this subsection are allotted to small
business concerns located in urban areas identified by the
Administration as having high concentrations of unemployed or low-income
individuals or to small business concerns owned by low-income
individuals. The Administration shall define the meaning of low income
as it applies to owners of small business concerns eligible to be
assisted under this subsection.
(7) No financial assistance shall be extended pursuant to this
subsection where the Administration determines that the assistance will
be used in relocating establishments from one area to another if such
relocation would result in an increase in unemployment in the area of
original location.
(j) Financial assistance for projects providing technical or management
assistance; areas of high concentration of unemployment or low-
income; preferences; manner and method of payment; accessible
services; program evaluations; establishment of development
program; coordination of policies
(1) The Administration shall provide financial assistance to public
or private organizations to pay all or part of the cost of projects
designed to provide technical or management assistance to individuals or
enterprises eligible for assistance under subsection (i) of this
section, paragraph (10) of this subsection; and section 637(a) of this
title, with special attention to small businesses located in areas of
high concentration of unemployed or low-income individuals, to small
businesses eligible to receive contracts pursuant to section 637(a) of
this title.
(2) Financial assistance under this subsection may be provided for
projects, including, but not limited to--
(A) planning and research, including feasibility studies and
market research;
(B) the identification and development of new business
opportunities;
(C) the furnishing of centralized services with regard to public
services and Federal Government programs including programs
authorized under subsection (i) of this section; paragraph (10) of
this subsection, and section 637(a) of this title;
(D) the establishment and strengthening of business service
agencies, including trade associations and cooperatives; and
(E) the furnishing of business counseling, management training,
and legal and other related services, with special emphasis on the
development of management training programs using the resources of
the business community, including the development of management
training opportunities in existing business, and with emphasis in
all cases upon providing management training of sufficient scope and
duration to develop entrepreneurial and managerial self-sufficiency
on the part of the individuals served.
(3) The Administration shall encourage the placement of subcontracts
by businesses with small business concerns located in areas of high
concentration of unemployed or low-income individuals, with small
businesses owned by low-income individuals, and with small businesses
eligible to receive contracts pursuant to section 637(a) of this title.
The Administration may provide incentives and assistance to such
businesses that will aid in the training and upgrading of potential
subcontractors or other small business concerns eligible for assistance
under subsections (i) and (j) of this section, and section 637(a) of
this title.
(4) The Administration shall give preference to projects which
promote the ownership, participation in ownership, or management of
small businesses owned by low-income individuals and small businesses
eligible to receive contracts pursuant to section 637(a) of this title.
(5) The financial assistance authorized for projects under this
subsection includes assistance advanced by grant, agreement, or
contract.
(6) The Administration is authorized to make payments under grants
and contracts entered into under this subsection in lump sum or
installments, and in advance or by way of reimbursement, and in the case
of grants, with necessary adjustments on account of overpayments or
underpayments.
(7) To the extent feasible, services under this subsection shall be
provided in a location which is easily accessible to the individuals and
small business concerns served.
(8) Repealed. Pub. L. 101-574, title II, Sec. 242(2), Nov. 15, 1990,
104 Stat. 2827.
(9) The Administration shall take such steps as may be necessary and
appropriate, in coordination and cooperation with the heads of other
Federal departments and agencies, to insure that contracts,
subcontracts, and deposits made by the Federal Government or with
programs aided with Federal funds are placed in such way as to further
the purposes of subsections (i) and (j) of this section and section
637(a) of this title.
(10) There is established within the Administration a small business
and capital ownership development program (hereinafter referred to as
the ``Program'') which shall provide assistance exclusively for small
business concerns eligible to receive contracts pursuant to section
637(a) of this title. The program, and all other services and activities
authorized under this subsection and section 637(a) of this title, shall
be managed by the Associate Administrator for Minority Small Business
and Capital Ownership Development under the supervision of, and
responsible to, the Administrator.
(A) The Program shall--
(i) assist small business concerns participating in the
Program (either through public or private organizations) to
develop and maintain comprehensive business plans which set
forth the Program Participant's specific business targets,
objectives, and goals developed and maintained in conformity
with subparagraph (D).\8\
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\8\ So in original. The period probably should be a semicolon.
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(ii) provide for such other nonfinancial services as deemed
necessary for the establishment, preservation, and growth of
small business concerns participating in the Program, including
but not limited to (I) loan packaging, (II) financial
counseling, (III) accounting and bookkeeping assistance, (IV)
marketing assistance, and (V) management assistance;
(iii) assist small business concerns participating in the
Program to obtain equity and debt financing;
(iv) establish regular performance monitoring and reporting
systems for small business concerns participating in the Program
to assure compliance with their business plans;
(v) analyze and report the causes of success and failure of
small business concerns participating in the Program; and
(vi) provide assistance necessary to help small business
concerns participating in the Program to procure surety bonds,
with such assistance including, but not limited to, (I) the
preparation of application forms required to receive a surety
bond, (II) special management and technical assistance designed
to meet the specific needs of small business concerns
participating in the Program and which have received or are
applying to receive a surety bond, and (III) preparation of all
forms necessary to receive a surety bond guarantee from the
Administration pursuant to title IV, part B of the Small
Business Investment Act of 1958 [15 U.S.C. 694a et seq.].
(B) Small business concerns eligible to receive contracts
pursuant to section 637(a) of this title shall participate in the
Program.
(C)(i) A small business concern participating in any program or
activity conducted under the authority of this paragraph or eligible
for the award of contracts pursuant to section 637(a) of this title
on September 1, 1988, shall be permitted continued participation and
eligibility in such program or activity for a period of time which
is the greater of--
(I) 9 years less the number of years since the award of its
first contract pursuant to section 637(a) of this title; or
(II) its original fixed program participation term (plus any
extension thereof) assigned prior to November 15, 1988, plus
eighteen months.
(ii) Nothing contained in this subparagraph shall be deemed to
prevent the Administration from instituting a termination or
graduation pursuant to subparagraph (F) or (H) for issues unrelated
to the expiration of any time period limitation.
(D)(i) Promptly after certification under paragraph (11) a
Program Participant shall submit a business plan (hereinafter
referred to as the ``plan'') as described in clause (ii) of this
subparagraph for review by the Business Opportunity Specialist
assigned to assist such Program Participant. The plan may be a
revision of a preliminary business plan submitted by the Program
Participant or required by the Administration as a part of the
application for certification under this section and shall be
designed to result in the Program Participant eliminating the
conditions or circumstances upon which the Administration determined
eligibility pursuant to section 637(a)(6) of this title. Such plan,
and subsequent modifications submitted under clause (iii) of this
subparagraph, shall be approved by the business opportunity
specialist prior to the Program Participant being eligible for award
of a contract pursuant to section 637(a) of this title.
(ii) The plans submitted under this subparagraph shall include
the following:
(I) An analysis of market potential, competitive
environment, and other business analyses estimating the Program
Participant's prospects for profitable operations during the
term of program participation and after graduation.
(II) An analysis of the Program Participant's strengths and
weaknesses with particular attention to correcting any
financial, managerial, technical, or personnel conditions which
are likely to impede the small business concern from receiving
contracts other than those awarded under section 637(a) of this
title.
(III) Specific targets, objectives, and goals, for the
business development of the Program Participant during the next
and succeeding years utilizing the results of the analyses
conducted pursuant to subclauses (I) and (II).
(IV) A transition management plan outlining specific steps
to assure profitable business operations after graduation (to be
incorporated into the Program Participant's plan during the
first year of the transitional stage of Program participation).
(V) Estimates of contract awards pursuant to section 637(a)
of this title and from other sources, which the Program
Participant will require to meet the specific targets,
objectives, and goals for the years covered by its plan. The
estimates established shall be consistent with the provisions of
subparagraph (I) and section 637(a) of this title.
(iii) Each Program Participant shall annually review its
currently approved plan with its Business Opportunity Specialist and
modify such plan as may be appropriate. Any modified plan shall be
submitted to the Administration for approval. The currently approved
plan shall be considered valid until such time as a modified plan is
approved by the Business Opportunity Specialist. Annual reviews
pertaining to years in the transitional stage of program
participation shall require, as appropriate, a written verification
that such Program Participant has complied with the requirements of
subparagraph (I) relating to attaining business activity from
sources other than contracts awarded pursuant to section 637(a) of
this title.
(iv) Each Program Participant shall annually forecast its needs
for contract awards under section 637(a) of this title for the next
program year and the succeeding program year during the review of
its business plan, conducted pursuant to clause (iii). Such forecast
shall be known as the section 8(a) [15 U.S.C. 637(a)] contract
support level and shall be included in the Program Participant's
business plan. Such forecast shall include--
(I) the aggregate dollar value of contract support to be
sought on a noncompetitive basis under section 637(a) of this
title, reflecting compliance with the requirements of
subparagraph (I) relating to attaining business activity from
sources other than contracts awarded pursuant to section 637(a)
of this title,
(II) the types of contract opportunities being sought,
identified by Standard Industrial Classification (SIC) Code or
otherwise,
(III) an estimate of the dollar value of contract support to
be sought on a competitive basis, and
(IV) such other information as may be requested by the
Business Opportunity Specialist to provide effective business
development assistance to the Program Participant.
(E) A small business concern participating in the program
conducted under the authority of this paragraph and eligible for the
award of contracts pursuant to section 637(a) of this title shall be
denied all such assistance if such concern--
(i) voluntarily elects not to continue participation;
(ii) completes the period of Program participation as
prescribed by paragraph (15);
(iii) is terminated pursuant to a termination proceeding
conducted in accordance with section 637(a)(9) of this title; or
(iv) is graduated pursuant to a graduation proceeding
conducted in accordance with section 637(a)(9) of this title.
(F) For purposes of this section and section 637(a) of this
title, the term ``terminated'' and the term ``termination'' means
the total denial or suspension of assistance under this paragraph or
under section 637(a) of this title prior to the graduation of the
participating small business concern or prior to the expiration of
the maximum program participation term. An action for termination
shall be based upon good cause, including--
(i) the failure by such concern to maintain its eligibility
for Program participation;
(ii) the failure of the concern to engage in business
practices that will promote its competitiveness within a
reasonable period of time as evidenced by, among other
indicators, a pattern of unjustified delinquent performance or
terminations for default with respect to contracts awarded under
the authority of section 637(a) of this title;
(iii) a demonstrated pattern of failing to make required
submissions or responses to the Administration in a timely
manner;
(iv) the willful violation of any rule or regulation of the
Administration pertaining to material issues;
(v) the debarment of the concern or its disadvantaged owners
by any agency pursuant to subpart 9.4 of title 48, Code of
Federal Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged owner or an officer
of the concern for any offense indicating a lack of business
integrity including any conviction for embezzlement, theft,
forgery, bribery, falsification or violation of section 645 of
this title. For purposes of this clause, no termination action
shall be taken with respect to a disadvantaged owner solely
because of the conviction of an officer of the concern (who is
other than a disadvantaged owner) unless such owner conspired
with, abetted, or otherwise knowingly acquiesced in the activity
or omission that was the basis of such officer's conviction.
(G) The Director of the Division may initiate a termination
proceeding by recommending such action to the Associate
Administrator for Minority Small Business and Capital Ownership
Development. Whenever the Associate Administrator, or a designee of
such officer, determines such termination is appropriate, within 15
days after making such a determination the Program Participant shall
be provided a written notice of intent to terminate, specifying the
reasons for such action. No Program Participant shall be terminated
from the Program pursuant to subparagraph (F) without first being
afforded an opportunity for a hearing in accordance with section
637(a)(9) of this title.
(H) For the purposes of this subsection and section 637(a) of
this title the term ``graduated'' or ``graduation'' means that the
Program Participant is recognized as successfully completing the
program by substantially achieving the targets, objectives, and
goals contained in the concern's business plan thereby demonstrating
its ability to compete in the marketplace without assistance under
this section or section 637(a) of this title.
(I)(i) During the developmental stage of its participation in
the Program, a Program Participant shall take all reasonable efforts
within its control to attain the targets contained in its business
plan for contracts awarded other than pursuant to section 637(a) of
this title (hereinafter referred to as ``business activity
targets.''). Such efforts shall be made a part of the business plan
and shall be sufficient in scope and duration to satisfy the
Administration that the Program Participant will engage a reasonable
marketing strategy that will maximize its potential to achieve its
business activity targets.
(ii) During the transitional stage of the Program a Program
Participant shall be subject to regulations regarding business
activity targets that are promulgated by the Administration pursuant
to clause (iii);
(iii) The regulations referred to in clause (ii) shall:
(I) establish business activity targets applicable to
Program Participants during the fifth year and each succeeding
year of Program Participation; such targets, for such period of
time, shall reflect a reasonably consistent increase in
contracts awarded other than pursuant to section 637(a) of this
title, expressed as a percentage of total sales; when
promulgating business activity targets the Administration may
establish modified targets for Program Participants that have
participated in the Program for a period of longer than four
years on June 1, 1989;
(II) require a Program Participant to attain its business
activity targets;
(III) provide that, before the receipt of any contract to be
awarded pursuant to section 637(a) of this title, the Program
Participant (if it is in the transitional stage) must certify
that it has complied with the regulations promulgated pursuant
to subclause (II), or that it is in compliance with such
remedial measures as may have been ordered pursuant to
regulations issued under subclause (V);
(IV) require the Administration to review each Program
Participant's performance regarding attainment of business
activity targets during periodic reviews of such Participant's
business plan; and
(V) authorize the Administration to take appropriate
remedial measures with respect to a Program Participant that has
failed to attain a required business activity target for the
purpose of reducing such Participant's dependence on contracts
awarded pursuant to section 637(a) of this title; such remedial
actions may include, but are not limited to assisting the
Program Participant to expand the dollar volume of its
competitive business activity or limiting the dollar volume of
contracts awarded to the Program Participant pursuant to section
637(a) of this title; except for actions that would constitute a
termination, remedial measures taken pursuant to this subclause
shall not be reviewable pursuant to section 637(a)(9) of this
title.
(J)(i) The Administration shall conduct an evaluation of a
Program Participant's eligibility for continued participation in the
Program whenever it receives specific and credible information
alleging that such Program Participant no longer meets the
requirements for Program eligibility. Upon making a finding that a
Program Participant is no longer eligible, the Administration shall
initiate a termination proceeding in accordance with subparagraph
(F). A Program Participant's eligibility for award of any contract
under the authority of section 637(a) of this title may be suspended
pursuant to subpart 9.4 of title 48, Code of Federal Regulations (or
any successor regulation).
(ii)(I) Except as authorized by subclauses (II) or (III), no
award shall be made pursuant to section 637(a) of this title to a
concern other than a small business concern.
(II) In determining the size of a small business concern owned
by a socially and economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), each firm's size shall
be independently determined without regard to its affiliation with
the tribe, any entity of the tribal government, or any other
business enterprise owned by the tribe, unless the Administrator
determines that one or more such tribally owned business concerns
have obtained, or are likely to obtain, a substantial unfair
competitive advantage within an industry category.
(III) Any joint venture established under the authority of
section 602(b) of Public Law 100-656, the ``Business Opportunity
Development Reform Act of 1988'', shall be eligible for award of a
contract pursuant to section 637(a) of this title.
(11)(A) The Associate Administrator for Minority Small Business and
Capital Ownership Development shall be responsible for coordinating and
formulating policies relating to Federal assistance to small business
concerns eligible for assistance under subsection (i) of this section
and small business concerns eligible to receive contracts pursuant to
section 637(a) of this title.
(B)(i) Except as provided in clause (iii), no individual who was
determined pursuant to section 637(a) of this title to be socially and
economically disadvantaged before August 15, 1989, shall be permitted to
assert such disadvantage with respect to any other concern making
application for certification after August 15, 1989.
(ii) Except as provided in clause (iii), any individual upon whom
eligibility is based pursuant to section 637(a)(4) of this title shall
be permitted to assert such eligibility for only one small business
concern.
(iii) A socially and economically disadvantaged Indian tribe may own
more than one small business concern eligible for assistance pursuant to
paragraph (10) and section 637(a) of this title if--
(I) the Indian tribe does not own another firm in the same
industry which has been determined to be eligible to receive
contracts under this program, and
(II) the individuals responsible for the management and daily
operations of the concern do not manage more than two Program
Participants.
(C) No concern, previously eligible for the award of contracts
pursuant to section 637(a) of this title, shall be subsequently
recertified for program participation if its prior participation in the
program was concluded for any of the reasons described in paragraph
(10)(E).
(D) A concern eligible for the award of contracts pursuant to this
subsection shall remain eligible for such contracts if there is a
transfer of ownership and control (as defined pursuant to section
637(a)(4) of this title) to individuals who are determined to be
socially and economically disadvantaged pursuant to section 637(a) of
this title. In the event of such a transfer, the concern, if not
terminated or graduated, shall be eligible for a period of continued
participation in the program not to exceed the time limitations
prescribed in paragraph (15).
(E) There is established a Division of Program Certification and
Eligibility (hereinafter referred to in this paragraph as the
``Division'') that shall be made part of the Office of Minority Small
Business and Capital Ownership Development. The Division shall be headed
by a Director who shall report directly to the Associate Administrator
for Minority Small Business and Capital Ownership Development. The
Division shall establish field offices within such regional offices of
the Administration as may be necessary to perform efficiently its
functions and responsibilities.
(F) Subject to the provisions of section 637(a)(9) of this title,
the functions and responsibility of the Division are to--
(i) receive, review and evaluate applications for certification
pursuant to paragraphs (4), (5), (6) and (7) of section 637(a) of
this title;
(ii) advise each program applicant within 15 days after the
receipt of an application as to whether such application is complete
and suitable for evaluation and, if not, what matters must be
rectified;
(iii) render recommendations on such applications to the
Associate Administrator for Minority Small Business and Capital
Ownership Development;
(iv) review and evaluate financial statements and other
submissions from concerns participating in the program established
by paragraph (10) to ascertain continued eligibility to receive
subcontracts pursuant to section 637(a) of this title;
(v) make a request for the initiation of termination or
graduation proceedings, as appropriate, to the Associate
Administrator for Minority Small Business and Capital Ownership
Development;
(vi) make recommendations to the Associate Administrator for
Minority Small Business and Capital Ownership Development concerning
protests from applicants that have been denied program admission;
(vii) decide protests regarding the status of a concern as a
disadvantaged concern for purposes of any program or activity
conducted under the authority of subsection (d) of section 637 of
this title, or any other provision of Federal law that references
such subsection for a definition of program eligibility; and
(viii) implement such policy directives as may be issued by the
Associate Administrator for Minority Small Business and Capital
Ownership Development pursuant to subparagraph (I) regarding, among
other things, the geographic distribution of concerns to be admitted
to the program and the industrial make-up of such concerns.
(G) An applicant shall not be denied admission into the program
established by paragraph (10) due solely to a determination by the
Division that specific contract opportunities are unavailable to assist
in the development of such concern unless--
(i) the Government has not previously procured and is unlikely
to procure the types of products or services offered by the concern;
or
(ii) the purchases of such products or services by the Federal
Government will not be in quantities sufficient to support the
developmental needs of the applicant and other Program Participants
providing the same or similar items or services.
(H) Not later than 90 days after receipt of a completed application
for Program certification, the Associate Administrator for Minority
Small Business and Capital Ownership Development shall certify a small
business concern as a Program Participant or shall deny such
application.
(I) Thirty days before the conclusion of each fiscal year, the
Director of the Division shall review all concerns that have been
admitted into the Program during the preceding 12-month period. The
review shall ascertain the number of entrants, their geographic
distribution and industrial classification. The Director shall also
estimate the expected growth of the Program during the next fiscal year
and the number of additional Business Opportunity Specialists, if any,
that will be needed to meet the anticipated demand for the Program. The
findings and conclusions of the Director shall be reported to the
Associate Administrator for Minority Small Business and Capital
Ownership Development by September 30 of each year. Based on such report
and such additional data as may be relevant, the Associate Administrator
shall, by October 31 of each year, issue policy and program directives
applicable to such fiscal year that--
(i) establish priorities for the solicitation of program
applications from underrepresented regions and industry categories;
(ii) assign staffing levels and allocate other program resources
as necessary to meet program needs; and
(iii) establish priorities in the processing and admission of
new Program Participants as may be necessary to achieve an equitable
geographic distribution of concerns and a distribution of concerns
across all industry categories in proportions needed to increase
significantly contract awards to small business concerns owned and
controlled by socially and economically disadvantaged individuals.
When considering such increase the Administration shall give due
consideration to those industrial categories where Federal purchases
have been substantial but where the participation rate of such
concerns has been limited.
(12)(A) The Administration shall segment the Capital Ownership
Development Program into two stages: a developmental stage; and a
transitional stage.
(B) The developmental stage of program participation shall be
designed to assist the concern in its effort to overcome its economic
disadvantage by providing such assistance as may be necessary and
appropriate to access its markets and to strengthen its financial and
managerial skills.
(C) The transitional stage of program participation shall be
designed to overcome, insofar as practicable, the remaining elements of
economic disadvantage and to prepare such concern for graduation from
the program.
(13) A Program Participant, if otherwise eligible, shall be
qualified to receive the following assistance during the stages of
program participation specified in paragraph 12: \9\
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\9\ So in original. Probably should be paragraph ``(12):''.
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(A) Contract support pursuant to section 637(a) of this title.
(B) Financial assistance pursuant to subsection (a)(20) of this
section.
(C) A maximum of two exemptions from the requirements of section
35(a) \10\ of title 41, which exemptions shall apply only to
contracts awarded pursuant to section 637(a) of this title and shall
only be used to allow for contingent agreements by a small business
concern to acquire the machinery, equipment, facilities, or labor
needed to perform such contracts. No exemption shall be made
pursuant to this subparagraph if the contract to which it pertains
has an anticipated value in excess of $10,000,000. This subparagraph
shall cease to be effective on October 1, 1992.
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\10\ See References in Text note below.
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(D) A maximum of five exemptions from the requirements of
sections 3131 and 3133 of title 40, which exemptions shall apply
only to contracts awarded pursuant to section 637(a) of this title,
except that, such exemptions may be granted under this subparagraph
only if--
(i) the Administration finds that such concern is unable to
obtain the requisite bond or bonds from a surety and that no
surety is willing to issue a bond subject to the guarantee
provision of title IV of the Small Business Investment Act of
1958 (15 U.S.C. 692 et seq.);
(ii) the Administration and the agency providing the
contracting opportunity have provided for the protection of
persons furnishing materials or labor to the Program Participant
by arranging for the direct disbursement of funds due to such
persons by the procuring agency or through any bank the deposits
of which are insured by the Federal Deposit Insurance
Corporation; and
(iii) the contract to which it pertains does not exceed
$3,000,000 in amount. This subparagraph shall cease to be
effective on October 1, 1994.
(E) Financial assistance whereby the Administration may purchase
in whole or in part, and on behalf of such concerns, skills training
or upgrading for employees or potential employees of such concerns.
Such assistance may be made without regard to section 647(a) of this
title. Assistance may be made by direct payment to the training
provider or by reimbursing the Program Participant or the
Participant's employee, if such reimbursement is found to be
reasonable and appropriate. For purposes of this subparagraph the
term ``training provider'' shall mean an institution of higher
education, a community or vocational college, or an institution
eligible to provide skills training or upgrading under title I of
the Workforce Investment Act of 1998 [29 U.S.C. 2801 et seq.]. The
Administration shall, in consultation with the Secretary of Labor,
promulgate rules and regulations to implement this subparagraph that
establish acceptable training and upgrading performance standards
and provide for such monitoring or audit requirements as may be
necessary to ensure the integrity of the training effort. No
financial assistance shall be granted under the subparagraph unless
the Administrator determines that--
(i) such concern has documented that it has first explored
the use of existing cost-free or cost-subsidized training
programs offered by public and private sector agencies working
with programs of employment and training and economic
development;
(ii) no more than five employees or potential employees of
such concern are recipients of any benefits under this
subparagraph at any one time;
(iii) no more than $2,500 shall be made available for any
one employee or potential employee;
(iv) the length of training or upgrading financed by this
subparagraph shall be no less than one month nor more than six
months;
(v) such concern has given adequate assurance it will employ
the trainee or upgraded employee for at least six months after
the training or upgrading financed by this subparagraph has been
completed and each trainee or upgraded employee has provided a
similar assurance to remain within the employ of such concern
for such period; if such concern, trainee, or upgraded employee
breaches this agreement, the Administration shall be entitled to
and shall make diligent efforts to obtain from the violating
party the repayment of all funds expended on behalf of the
violating party, such repayment shall be made to the
Administration together with such interest and costs of
collection as may be reasonable; the violating party shall be
barred from receiving any further assistance under this
subparagraph;
(vi) the training to be financed may take place either at
such concern's facilities or at those of the training provider;
and
(vii) such concern will maintain such records as the
Administration deems appropriate to ensure that the provisions
of this paragraph and any other applicable law have not been
violated.
(F) The transfer of technology or surplus property owned by the
United States to such a concern. Activities designed to effect such
transfer shall be developed in cooperation with the heads of Federal
agencies and shall include the transfer by grant, license, or sale
of such technology or property to such a concern. Such property may
be transferred to Program Participants on a priority basis.
Technology or property transferred under this subparagraph shall be
used by the concern during the normal conduct of its business
operation and shall not be sold or transferred to any other party
(other than the Government) during such concern's term of
participation in the Program and for one year thereafter.
(G) Training assistance whereby the Administration shall conduct
training sessions to assist individuals and enterprises eligible to
receive contracts under section 637(a) of this title in the
development of business principles and strategies to enhance their
ability to successfully compete for contracts in the marketplace.
(H) Joint ventures, leader-follower arrangements, and teaming
agreements between the Program Participant and other Program
Participants and other business concerns with respect to contracting
opportunities for the research, development, full-scale engineering
or production of major systems. Such activities shall be undertaken
on the basis of programs developed by the agency responsible for the
procurement of the major system, with the assistance of the
Administration.
(I) Transitional management business planning training and
technical assistance.
(J) Program Participants in the developmental stage of Program
participation shall be eligible for the assistance provided by
subparagraphs (A), (B), (C), (D), (E), (F), and (G).
(14) Program Participants in the transitional stage of Program
participation shall be eligible for the assistance provided by
subparagraphs (A), (B), (F), (G), (H), and (I) of paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small
business concern may receive developmental assistance under the Program
and contracts under section 637(a) of this title for a total period of
not longer than nine years, measured from the date of its certification
under the authority of such section, of which--
(A) no more than four years may be spent in the developmental
stage of Program Participation; and
(B) no more than five years may be spent in the transitional
stage of Program Participation.
(16)(A) The Administrator shall develop and implement a process for
the systematic collection of data on the operations of the Program
established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator shall
submit a report to the Congress on the Program that shall include the
following:
(i) The average personal net worth of individuals who own and
control concerns that were initially certified for participation in
the Program during the immediately preceding fiscal year. The
Administrator shall also indicate the dollar distribution of net
worths, at $50,000 increments, of all such individuals found to be
socially and economically disadvantaged. For the first report
required pursuant to this paragraph the Administrator shall also
provide the data specified in the preceding sentence for all
eligible individuals in the Program as of November 15, 1988.
(ii) A description and estimate of the benefits and costs that
have accrued to the economy and the Government in the immediately
preceding fiscal year due to the operations of those business
concerns that were performing contracts awarded pursuant to section
637(a) of this title.
(iii) A compilation and evaluation of those business concerns
that have exited the Program during the immediately preceding three
fiscal years. Such compilation and evaluation shall detail the
number of concerns actively engaged in business operations, those
that have ceased or substantially curtailed such operations,
including the reasons for such actions, and those concerns that have
been acquired by other firms or organizations owned and controlled
by other than socially and economically disadvantaged individuals.
For those businesses that have continued operations after they
exited from the Program, the Administrator shall also separately
detail the benefits and costs that have accrued to the economy
during the immediately preceding fiscal year due to the operations
of such concerns.
(iv) A listing of all participants in the Program during the
preceding fiscal year identifying, by State and by Region, for each
firm: the name of the concern, the race or ethnicity, and gender of
the disadvantaged owners, the dollar value of all contracts received
in the preceding year, the dollar amount of advance payments
received by each concern pursuant to contracts awarded under section
637(a) of this title, and a description including (if appropriate)
an estimate of the dollar value of all benefits received pursuant to
paragraphs (13) and (14) and subsection (a)(20) of this section
during such year.
(v) The total dollar value of contracts and options awarded
during the preceding fiscal year pursuant to section 637(a) of this
title and such amount expressed as a percentage of total sales of
(I) all firms participating in the Program during such year; and
(II) of firms in each of the nine years of program participation.
(vi) A description of such additional resources or program
authorities as may be required to provide the types of services
needed over the next two-year period to service the expected
portfolio of firms certified pursuant to section 637(a) of this
title.
(vii) The total dollar value of contracts and options awarded
pursuant to section 637(a) of this title, at such dollar increments
as the Administrator deems appropriate, for each four digit standard
industrial classification code under which such contracts and
options were classified.
(C) The first report required by subparagraph (B) shall pertain to
fiscal year 1990.
(k) Functions relating to loans and financial assistance for projects
providing technical or management assistance to individuals or
enterprises eligible for assistance as small business concerns
located in urban or rural areas with high proportions of
unemployed or low-income individuals, or owned by low-income
individuals
In carrying out its functions under subsections (i) and (j) of this
section and section 637(a) of this title, the Administration is
authorized--
(1) to utilize, with their consent, the services and facilities
of Federal agencies without reimbursement, and, with the consent of
any State or political subdivision of a State, accept and utilize
the services and facilities of such State or subdivision without
reimbursement;
(2) to accept, in the name of the Administration, and employ or
dispose of in furtherance of the purposes of this chapter, any money
or property, real, personal, or mixed, tangible, or intangible,
received by gift, devise, bequest, or otherwise;
(3) to accept voluntary and uncompensated services,
notwithstanding the provisions of section 1342 of title 31; and
(4) to employ experts and consultants or organizations thereof
as authorized by section 3109 of title 5, except that no individual
may be employed under the authority of this subsection for more than
one hundred days in any fiscal year; to compensate individuals so
employed at rates not in excess of the daily equivalent of the
highest rate payable under section 5332 of title 5, including
traveltime; and to allow them, while away from their homes or
regular places of business, travel expenses (including per diem in
lieu of subsistence) as authorized by section 5703 of title 5 for
persons in the Government service employed intermittently, while so
employed: Provided, however, That contracts for such employment may
be renewed annually.
(l) [RESERVED]
(m) Microloan Program
(1)(A) Purposes
The purposes of the Microloan Program are--
(i) to assist women, low-income, veteran (within the meaning
of such term under section 632(q) of this title), and minority
entrepreneurs and business owners and other such individuals
possessing the capability to operate successful business
concerns;
(ii) to assist small business concerns in those areas
suffering from a lack of credit due to economic downturns;
(iii) to establish a microloan program to be administered by
the Small Business Administration--
(I) to make loans to eligible intermediaries to enable
such intermediaries to provide small-scale loans,
particularly loans in amounts averaging not more than
$10,000, to startup, newly established, or growing small
business concerns for working capital or the acquisition of
materials, supplies, or equipment;
(II) to make grants to eligible intermediaries that,
together with non-Federal matching funds, will enable such
intermediaries to provide intensive marketing, management,
and technical assistance to microloan borrowers;
(III) to make grants to eligible nonprofit entities
that, together with non-Federal matching funds, will enable
such entities to provide intensive marketing, management,
and technical assistance to assist low-income entrepreneurs
and other low-income individuals obtain private sector
financing for their businesses, with or without loan
guarantees; and
(IV) to report to the Committees on Small Business of
the Senate and the House of Representatives on the
effectiveness of the microloan program and the advisability
and feasibility of implementing such a program nationwide;
and
(iv) to establish a welfare-to-work microloan initiative,
which shall be administered by the Administration, in order to
test the feasibility of supplementing the technical assistance
grants provided under clauses (ii) and (iii) of subparagraph (B)
to individuals who are receiving assistance under the State
program funded under part A of title IV of the Social Security
Act (42 U.S.C. 601 et seq.), or under any comparable State
funded means tested program of assistance for low-income
individuals, in order to adequately assist those individuals
in--
(I) establishing small businesses; and
(II) eliminating their dependence on that assistance.
(B) Establishment
There is established a microloan program, under which the
Administration may--
(i) make direct loans to eligible intermediaries, as
provided under paragraph (3), for the purpose of making short-
term, fixed interest rate microloans to startup, newly
established, and growing small business concerns under paragraph
(6);
(ii) in conjunction with such loans and subject to the
requirements of paragraph (4), make grants to such
intermediaries for the purpose of providing intensive marketing,
management, and technical assistance to small business concerns
that are borrowers under this subsection; and
(iii) subject to the requirements of paragraph (5), make
grants to nonprofit entities for the purpose of providing
marketing, management, and technical assistance to low-income
individuals seeking to start or enlarge their own businesses, if
such assistance includes working with the grant recipient to
secure loans in amounts not to exceed $35,000 from private
sector lending institutions, with or without a loan guarantee
from the nonprofit entity.
(2) Eligibility for participation
An intermediary shall be eligible to receive loans and grants
under subparagraphs (B)(i) and (B)(ii) of paragraph (1) if it--
(A) meets the definition in paragraph (10); and
(B) has at least 1 year of experience making microloans to
startup, newly established, or growing small business concerns
and providing, as an integral part of its microloan program,
intensive marketing, management, and technical assistance to its
borrowers.
(3) Loans to intermediaries
(A) Intermediary applications
(i) In general
As part of its application for a loan, each intermediary
shall submit a description to the Administration of--
(I) the type of businesses to be assisted;
(II) the size and range of loans to be made;
(III) the geographic area to be served and its
economic, poverty, and unemployment characteristics;
(IV) the status of small business concerns in the
area to be served and an analysis of their credit and
technical assistance needs;
(V) any marketing, management, and technical
assistance to be provided in connection with a loan made
under this subsection;
(VI) the local economic credit markets, including
the costs associated with obtaining credit locally;
(VII) the qualifications of the applicant to carry
out the purpose of this subsection; and
(VIII) any plan to involve other technical
assistance providers (such as counselors from the
Service Corps of Retired Executives or small business
development centers) or private sector lenders in
assisting selected business concerns.
(ii) Selection of intermediaries
In selecting intermediaries to participate in the
program established under this subsection, the
Administration shall give priority to those applicants that
provide loans in amounts averaging not more than $10,000.
(B) Intermediary contribution
As a condition of any loan made to an intermediary under
subparagraph (B)(i) of paragraph (1), the Administration shall
require the intermediary to contribute not less than 15 percent
of the loan amount in cash from non-Federal sources.
(C) Loan limits
Notwithstanding subsection (a)(3) of this section, no loan
shall be made under this subsection if the total amount
outstanding and committed to one intermediary (excluding
outstanding grants) from the business loan and investment fund
established by this chapter would, as a result of such loan,
exceed $750,000 in the first year of such intermediary's
participation in the program, and $3,500,000 in the remaining
years of the intermediary's participation in the program.
(D)(i) In general
The Administrator shall, by regulation, require each
intermediary to establish a loan loss reserve fund, and to
maintain such reserve fund until all obligations owed to the
Administration under this subsection are repaid.
(ii) Level of loan loss reserve fund
(I) In general
Subject to subclause (III), the Administrator shall
require the loan loss reserve fund of an intermediary to be
maintained at a level equal to 15 percent of the outstanding
balance of the notes receivable owed to the intermediary.
(II) Review of loan loss reserve
After the initial 5 years of an intermediary's
participation in the program authorized by this subsection,
the Administrator shall, at the request of the intermediary,
conduct a review of the annual loss rate of the
intermediary. Any intermediary in operation under this
subsection prior to October 1, 1994, that requests a
reduction in its loan loss reserve shall be reviewed based
on the most recent 5-year period preceding the request.
(III) Reduction of loan loss reserve
Subject to the requirements of clause IV, the
Administrator may reduce the annual loan loss reserve
requirement of an intermediary to reflect the actual average
loan loss rate for the intermediary during the preceding 5-
year period, except that in no case shall the loan loss
reserve be reduced to less than 10 percent of the
outstanding balance of the notes receivable owed to the
intermediary.
(IV) Requirements
The Administrator may reduce the annual loan loss
reserve requirement of an intermediary only if the
intermediary demonstrates to the satisfaction of the
Administrator that--
(aa) the average annual loss rate for the
intermediary during the preceding 5-year period is less
than 15 percent; and
(bb) that no other factors exist that may impair the
ability of the intermediary to repay all obligations
owed to the Administration under this subsection.
(E) Unavailability of comparable credit
An intermediary may make a loan under this subsection of
more than $20,000 to a small business concern only if such small
business concern demonstrates that it is unable to obtain credit
elsewhere at comparable interest rates and that it has good
prospects for success. In no case shall an intermediary make a
loan under this subsection of more than $35,000, or have
outstanding or committed to any 1 borrower more than $35,000.
(F) Loan duration; interest rates
(i) Loan duration
Loans made by the Administration under this subsection
shall be for a term of 10 years.
(ii) Applicable interest rates
Except as provided in clause (iii), loans made by the
Administration under this subsection to an intermediary
shall bear an interest rate equal to 1.25 percentage points
below the rate determined by the Secretary of the Treasury
for obligations of the United States with a period of
maturity of 5 years, adjusted to the nearest one-eighth of 1
percent.
(iii) Rates applicable to certain small loans
Loans made by the Administration to an intermediary that
makes loans to small business concerns and entrepreneurs
averaging not more than $7,500, shall bear an interest rate
that is 2 percentage points below the rate determined by the
Secretary of the Treasury for obligations of the United
States with a period of maturity of 5 years, adjusted to the
nearest one-eighth of 1 percent.
(iv) Rates applicable to multiple sites or offices
The interest rate prescribed in clause (ii) or (iii)
shall apply to each separate loan-making site or office of 1
intermediary only if such site or office meets the
requirements of that clause.
(v) Rate basis
The applicable rate of interest under this paragraph
shall--
(I) be applied retroactively for the first year of
an intermediary's participation in the program, based
upon the actual lending practices of the intermediary as
determined by the Administration prior to the end of
such year; and
(II) be based in the second and subsequent years of
an intermediary's participation in the program, upon the
actual lending practices of the intermediary during the
term of the intermediary's participation in the program.
(vii) \11\ Covered intermediaries
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\11\ So in original. Probably should be ``(vi)''.
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The interest rates prescribed in this subparagraph shall
apply to all loans made to intermediaries under this
subsection on or after October 28, 1991.
(G) Delayed payments
The Administration shall not require repayment of interest
or principal of a loan made to an intermediary under this
subsection during the first year of the loan.
(H) Fees; collateral
Except as provided in subparagraphs (B) and (D), the
Administration shall not charge any fees or require collateral
other than an assignment of the notes receivable of the
microloans with respect to any loan made to an intermediary
under this subsection.
(4) Marketing, management and technical assistance grants to
intermediaries
Grants made in accordance with subparagraph (B)(ii) of paragraph
(1) shall be subject to the following requirements:
(A) Grant amounts
Except as otherwise provided in subparagraph (C) and subject
to subparagraph (B), each intermediary that receives a loan
under subparagraph (B)(i) of paragraph (1) shall be eligible to
receive a grant to provide marketing, management, and technical
assistance to small business concerns that are borrowers under
this subsection. Except as provided in subparagraph (C), each
intermediary meeting the requirements of subparagraph (B) may
receive a grant of not more than 25 percent of the total
outstanding balance of loans made to it under this subsection.
(B) Contribution
As a condition of any grant made under subparagraph (A), the
Administration shall require the intermediary to contribute an
amount equal to 25 percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to cash or other
direct funding, the contribution may include indirect costs or
in-kind contributions paid for under non-Federal programs.
(C) Additional technical assistance grants for making certain
loans
(i) In general
Each intermediary that has a portfolio of loans made
under this subsection that averages not more than $10,000
during the period of the intermediary's participation in the
program shall be eligible to receive a grant equal to 5
percent of the total outstanding balance of loans made to
the intermediary under this subsection, in addition to
grants made under subparagraph (A).
(ii) Purposes
A grant awarded under clause (i) may be used to provide
marketing, management, and technical assistance to small
business concerns that are borrowers under this subsection.
(iii) Contribution exception
The contribution requirements in subparagraph (B) do not
apply to grants made under this subparagraph.
(D) Eligibility for multiple sites or offices
The eligibility for a grant described in subparagraph
(A),\12\ or (C) shall be determined separately for each loan-
making site or office of 1 intermediary.
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\12\ So in original. The comma probably should not appear.
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(E) Assistance to certain small business concerns
(i) In general
Each intermediary may expend an amount not to exceed 25
percent of the grant funds received under paragraph
(1)(B)(ii) to provide information and technical assistance
to small business concerns that are prospective borrowers
under this subsection.
(ii) Technical assistance
An intermediary may expend not more than 25 percent of
the funds received under paragraph (1)(B)(ii) to enter into
third party contracts for the provision of technical
assistance.
(F) Supplemental grant
(i) In general
The Administration may accept any funds transferred to
the Administration from other departments or agencies of the
Federal Government to make grants in accordance with this
subparagraph and section 202(b) of the Small Business
Reauthorization Act of 1997 to participating intermediaries
and technical assistance providers under paragraph (5), for
use in accordance with clause (iii) to provide additional
technical assistance and related services to recipients of
assistance under a State program described in paragraph
(1)(A)(iv) at the time they initially apply for assistance
under this subparagraph.
(ii) Eligible recipients; grant amounts
In making grants under this subparagraph, the
Administration may select, from among participating
intermediaries and technical assistance providers described
in clause (i), not more than 20 grantees in fiscal year
1998, not more than 25 grantees in fiscal year 1999, and not
more than 30 grantees in fiscal year 2000, each of whom may
receive a grant under this subparagraph in an amount not to
exceed $200,000 per year.
(iii) Use of grant amounts
Grants under this subparagraph--
(I) are in addition to other grants provided under
this subsection and shall not require the contribution
of matching amounts as a condition of eligibility; and
(II) may be used by a grantee--
(aa) to pay or reimburse a portion of child care
and transportation costs of recipients of assistance
described in clause (i), to the extent such costs
are not otherwise paid by State block grants under
the Child Care Development Block Grant Act of 1990
(42 U.S.C. 9858 et seq.) or under part A of title IV
of the Social Security Act (42 U.S.C. 601 et seq.);
and
(bb) for marketing, management, and technical
assistance to recipients of assistance described in
clause (i).
(iv) Memorandum of Understanding
Prior to accepting any transfer of funds under clause
(i) from a department or agency of the Federal Government,
the Administration shall enter into a Memorandum of
Understanding with the department or agency, which shall--
(I) specify the terms and conditions of the grants
under this subparagraph; and
(II) provide for appropriate monitoring of
expenditures by each grantee under this subparagraph and
each recipient of assistance described in clause (i) who
receives assistance from a grantee under this
subparagraph, in order to ensure compliance with this
subparagraph by those grantees and recipients of
assistance.
(5) Private sector borrowing technical assistance grants
Grants made in accordance with subparagraph (B)(iii) of
paragraph (1) shall be subject to the following requirements:
(A) Grant amounts
Subject to the requirements of subparagraph (B), the
Administration may make not more than 55 grants annually, each
in amounts not to exceed $200,000 for the purposes specified in
subparagraph (B)(iii) of paragraph (1).
(B) Contribution
As a condition of any grant made under subparagraph (A), the
Administration shall require the grant recipient to contribute
an amount equal to 20 percent of the amount of the grant,
obtained solely from non-Federal sources. In addition to cash or
other direct funding, the contribution may include indirect
costs or in-kind contributions paid for under non-Federal
programs.
(6) Loans to small business concerns from eligible
intermediaries
(A) In general
An eligible intermediary shall make short-term, fixed rate
loans to startup, newly established, and growing small business
concerns from the funds made available to it under subparagraph
(B)(i) of paragraph (1) for working capital and the acquisition
of materials, supplies, furniture, fixtures, and equipment.
(B) Portfolio requirement
To the extent practicable, each intermediary that operates a
microloan program under this subsection shall maintain a
microloan portfolio with an average loan size of not more than
$15,000.
(C) Interest limit
Notwithstanding any provision of the laws of any State or
the constitution of any State pertaining to the rate or amount
of interest that may be charged, taken, received, or reserved on
a loan, the maximum rate of interest to be charged on a
microloan funded under this subsection shall not exceed the rate
of interest applicable to a loan made to an intermediary by the
Administration--
(i) in the case of a loan of more than $7,500 made by
the intermediary to a small business concern or entrepreneur
by more than 7.75 percentage points; and
(ii) in the case of a loan of not more than $7,500 made
by the intermediary to a small business concern or
entrepreneur by more than 8.5 percentage points.
(D) Review restriction
The Administration shall not review individual microloans
made by intermediaries prior to approval.
(E) Establishment of child care or transportation businesses
In addition to other eligible small businesses concerns,
borrowers under any program under this subsection may include
individuals who will use the loan proceeds to establish for-
profit or nonprofit child care establishments or businesses
providing for-profit transportation services.
(7) Program funding for microloans
(A) Number of participants
Under the program authorized by this subsection, the
Administration may fund, on a competitive basis, not more than
300 intermediaries.
(B) Allocation
(i) Minimum allocation
Subject to the availability of appropriations, of the
total amount of new loan funds made available for award
under this subsection in each fiscal year, the
Administration shall make available for award in each State
(including the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, and
American Samoa) an amount equal to the sum of--
(I) the lesser of--
(aa) $800,000; or
(bb) \1/55\ of the total amount of new loan
funds made available for award under this subsection
for that fiscal year; and
(II) any additional amount, as determined by the
Administration.
(ii) Redistribution
If, at the beginning of the third quarter of a fiscal
year, the Administration determines that any portion of the
amount made available to carry out this subsection is
unlikely to be made available under clause (i) during that
fiscal year, the Administration may make that portion
available for award in any one or more States (including the
District of Columbia, the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, and American Samoa)
without regard to clause (i).
(8) Equitable distribution of intermediaries
In approving microloan program applicants and providing funding
to intermediaries under this subsection, the Administration shall
select and provide funding to such intermediaries as will ensure
appropriate availability of loans for small businesses in all
industries located throughout each State, particularly those located
in urban and in rural areas.
(9) Grants for management, marketing, technical assistance,
and related services
(A) In general
The Administration may procure technical assistance for
intermediaries participating in the Microloan Program to ensure
that such intermediaries have the knowledge, skills, and
understanding of microlending practices necessary to operate
successful microloan programs.
(B) Assistance amount
The Administration shall transfer 7 percent of its annual
appropriation for loans and loan guarantees under this
subsection to the Administration's Salaries and Expense Account
for the specific purpose of providing 1 or more technical
assistance grants to experienced microlending organizations and
national and regional nonprofit organizations that have
demonstrated experience in providing training support for
microenterprise development and financing.\13\ to achieve the
purpose set forth in subparagraph (A).
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\13\ So in original. The period probably should not appear.
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(C) Welfare-to-work microloan initiative
Of amounts made available to carry out the welfare-to-work
microloan initiative under paragraph (1)(A)(iv) in any fiscal
year, the Administration may use not more than 5 percent to
provide technical assistance, either directly or through
contractors, to welfare-to-work microloan initiative grantees,
to ensure that, as grantees, they have the knowledge, skills,
and understanding of microlending and welfare-to-work
transition, and other related issues, to operate a successful
welfare-to-work microloan initiative.
(10) Report to Congress
On November 1, 1995, the Administration shall submit to the
Committees on Small Business of the Senate and the House of
Representatives a report, including the Administration's evaluation
of the effectiveness of the first 3\1/2\ years of the microloan
program and the following:
(A) the numbers and locations of the intermediaries funded
to conduct microloan programs;
(B) the amounts of each loan and each grant to
intermediaries;
(C) a description of the matching contributions of each
intermediary;
(D) the numbers and amounts of microloans made by the
intermediaries to small business concern borrowers;
(E) the repayment history of each intermediary;
(F) a description of the loan portfolio of each intermediary
including the extent to which it provides microloans to small
business concerns in rural areas; and
(G) any recommendations for legislative changes that would
improve program operations.
(11) Definitions
For purposes of this subsection--
(A) the term ``intermediary'' means--
(i) a private, nonprofit entity;
(ii) a private, nonprofit community development
corporation;
(iii) a consortium of private, nonprofit organizations
or nonprofit community development corporations;
(iv) a quasi-governmental economic development entity
(such as a planning and development district), other than a
State, county, municipal government, or any agency thereof,
if--
(I) no application is received from an eligible
nonprofit organization; or
(II) the Administration determines that the needs of
a region or geographic area are not adequately served by
an existing, eligible nonprofit organization that has
submitted an application; or
(v) an agency of or nonprofit entity established by a
Native American Tribal Government,
that seeks to borrow or has borrowed funds from the
Administration to make microloans to small business concerns
under this subsection;
(B) the term ``microloan'' means a short-term, fixed rate
loan of not more than $35,000, made by an intermediary to a
startup, newly established, or growing small business concern;
(C) the term ``rural area'' means any political subdivision
or unincorporated area--
(i) in a nonmetropolitan county (as defined by the
Secretary of Agriculture) or its equivalent thereof; or
(ii) in a metropolitan county or its equivalent that has
a resident population of less than 20,000 if the Small
Business Administration has determined such political
subdivision or area to be rural.
(12) Deferred participation loan pilot
In lieu of making direct loans to intermediaries as authorized
in paragraph (1)(B), during fiscal years 1998 through 2000, the
Administration may, on a pilot program basis, participate on a
deferred basis of not less than 90 percent and not more than 100
percent on loans made to intermediaries by a for-profit or nonprofit
entity or by alliances of such entities, subject to the following
conditions:
(A) Number of loans
In carrying out this paragraph, the Administration shall not
participate in providing financing on a deferred basis to more
than 10 intermediaries in urban areas or more than 10
intermediaries in rural areas.
(B) Term of loans
The term of each loan shall be 10 years. During the first
year of the loan, the intermediary shall not be required to
repay any interest or principal. During the second through fifth
years of the loan, the intermediary shall be required to pay
interest only. During the sixth through tenth years of the loan,
the intermediary shall be required to make interest payments and
fully amortize the principal.
(C) Interest rate
The interest rate on each loan shall be the rate specified
by paragraph (3)(F) for direct loans.
(13) Evaluation of welfare-to-work microloan initiative
On January 31, 1999, and annually thereafter, the Administration
shall submit to the Committees on Small Business of the House of
Representatives and the Senate a report on any monies distributed
pursuant to paragraph (4)(F).
(n) Repayment deferred for active duty reservists
(1) Definitions
In this subsection:
(A) Eligible reservist
The term ``eligible reservist'' means a member of a reserve
component of the Armed Forces ordered to active duty during a
period of military conflict.
(B) Essential employee
The term ``essential employee'' means an individual who is
employed by a small business concern and whose managerial or
technical expertise is critical to the successful day-to-day
operations of that small business concern.
(C) Period of military conflict
The term ``period of military conflict'' means--
(i) a period of war declared by the Congress;
(ii) a period of national emergency declared by the
Congress or by the President; or
(iii) a period of a contingency operation, as defined in
section 101(a) of title 10.
(D) Qualified borrower
The term ``qualified borrower'' means--
(i) an individual who is an eligible reservist and who
received a direct loan under subsection (a) or (b) of this
section before being ordered to active duty; or
(ii) a small business concern that received a direct
loan under subsection (a) or (b) of this section before an
eligible reservist, who is an essential employee, was
ordered to active duty.
(2) Deferral of direct loans
(A) In general
The Administration shall, upon written request, defer
repayment of principal and interest due on a direct loan made
under subsection (a) or (b) of this section, if such loan was
incurred by a qualified borrower.
(B) Period of deferral
The period of deferral for repayment under this paragraph
shall begin on the date on which the eligible reservist is
ordered to active duty and shall terminate on the date that is
180 days after the date such eligible reservist is discharged or
released from active duty.
(C) Interest rate reduction during deferral
Notwithstanding any other provision of law, during the
period of deferral described in subparagraph (B), the
Administration may, in its discretion, reduce the interest rate
on any loan qualifying for a deferral under this paragraph.
(3) Deferral of loan guarantees and other financings
The Administration shall--
(A) encourage intermediaries participating in the program
under subsection (m) of this section to defer repayment of a
loan made with proceeds made available under that subsection, if
such loan was incurred by a small business concern that is
eligible to apply for assistance under subsection (b)(3) of this
section; and
(B) not later than 30 days after August 17, 1999, establish
guidelines to--
(i) encourage lenders and other intermediaries to defer
repayment of, or provide other relief relating to, loan
guarantees under subsection (a) of this section and
financings under section 697a of this title that were
incurred by small business concerns that are eligible to
apply for assistance under subsection (b)(3) of this
section, and loan guarantees provided under subsection (m)
of this section if the intermediary provides relief to a
small business concern under this paragraph; and
(ii) implement a program to provide for the deferral of
repayment or other relief to any intermediary providing
relief to a small business borrower under this paragraph.
(Pub. L. 85-536, Sec. 2[7], July 18, 1958, 72 Stat. 387; Pub. L. 85-699,
title VI, Sec. 602(c), Aug. 21, 1958, 72 Stat. 698; Pub. L. 86-367,
Sec. 2, Sept. 22, 1959, 73 Stat. 647; Pub. L. 87-70, title III,
Sec. 305[a], June 30, 1961, 75 Stat. 167; Pub. L. 87-305, Sec. 9, Sept.
26, 1961, 75 Stat. 668; Pub. L. 88-264, Sec. 1, Feb. 5, 1964, 78 Stat.
7; Pub. L. 88-560, title III, Sec. 319, Sept. 2, 1964, 78 Stat. 794;
Pub. L. 89-59, Sec. 1(a), (b), June 30, 1965, 79 Stat. 206; Pub. L. 89-
409, Sec. 3(a), May 2, 1966, 80 Stat. 133; Pub. L. 89-769, Sec. 7(b),
Nov. 6, 1966, 80 Stat. 1319; Pub. L. 90-104, title I, Secs. 103, 104,
Oct. 11, 1967, 81 Stat. 268; Pub. L. 90-448, title XI, Sec. 1106(a),
Aug. 1, 1968, 82 Stat. 567; Pub. L. 90-495, Sec. 31, Aug. 23, 1968, 82
Stat. 835; Pub. L. 91-173, title V, Sec. 504(a), (b), Dec. 30, 1969, 83
Stat. 802; Pub. L. 91-596, Sec. 28(a), (b), Dec. 29, 1970, 84 Stat.
1618; Pub. L. 91-597, Sec. 25(a), (b), Dec. 29, 1970, 84 Stat. 1633,
1634; Pub. L. 92-385, Secs. 1(a), 2(a), Aug. 16, 1972, 86 Stat. 554,
555; Pub. L. 92-500, Sec. 8(a), Oct. 18, 1972, 86 Stat. 898; Pub. L. 92-
595, Sec. 3(b), Oct. 27, 1972, 86 Stat. 1316; Pub. L. 93-237,
Secs. 2(a), (b), 3(a), 5, 6, Jan. 2, 1974, 87 Stat. 1023, 1024; Pub. L.
93-386, Secs. 2(a)(4), 3(2), 8, 9, 12, Aug. 23, 1974, 88 Stat. 742, 746,
748, 749; Pub. L. 94-305, title I, Secs. 108(b), 109, 111, 112(c), (d),
114, June 4, 1976, 90 Stat. 666, 667; Pub. L. 95-89, title I,
Sec. 101(d), (e), title III, Secs. 301, 302, title IV, Secs. 402-405,
Aug. 4, 1977, 91 Stat. 553, 558-560; Pub. L. 95-315, Secs. 2, 3, July 4,
1978, 92 Stat. 377, 378; Pub. L. 95-507, title II, Secs. 204, 205, 231,
Oct. 24, 1978, 92 Stat. 1764, 1766, 1772; Pub. L. 95-510, Sec. 104, Oct.
24, 1978, 92 Stat. 1782; Pub. L. 96-38, title I, Sec. 101(a), (b), July
25, 1979, 93 Stat. 118; Pub. L. 96-302, title I, Secs. 119(a), (b), 122-
124, title II, Sec. 203, title V, Sec. 505, July 2, 1980, 94 Stat. 840,
841, 843, 848, 852; Pub. L. 96-481, title I, Secs. 104, 106(a), 107,
112, Oct. 21, 1980, 94 Stat. 2322, 2323; Pub. L. 97-35, title XIX,
Secs. 1902, 1910-1912, 1913(a), (c), 1914, Aug. 13, 1981, 95 Stat. 767,
778-780; Pub. L. 98-270, title III, Secs. 301, 304, 308, 309, 311, Apr.
18, 1984, 98 Stat. 159-161; Pub. L. 98-395, Sec. 5, Aug. 21, 1984, 98
Stat. 1368; Pub. L. 99-272, title XVIII, Secs. 18006(a)(1), (2), 18007,
18013, Apr. 7, 1986, 100 Stat. 366, 370; Pub. L. 99-514, Sec. 2, Oct.
22, 1986, 100 Stat. 2095; Pub. L. 100-418, title VIII, Secs. 8005,
8007(a), Aug. 23, 1988, 102 Stat. 1557, 1559; Pub. L. 100-533, title
III, Sec. 302(a), Oct. 25, 1988, 102 Stat. 2693; Pub. L. 100-590, title
I, Secs. 102(a), 103, 111(c), 119(a), 120-122, Nov. 3, 1988, 102 Stat.
2992, 2995, 2999, 3000; Pub. L. 100-656, title II, Secs. 201(a), 202,
203, 205, 206, 208, title III, Secs. 301-303(a), title IV, Sec. 408,
title V, Sec. 505(h), Nov. 15, 1988, 102 Stat. 3856, 3858, 3859, 3861,
3862, 3865-3868, 3877, 3887; Pub. L. 100-707, title I, Sec. 109(f), Nov.
23, 1988, 102 Stat. 4708; Pub. L. 101-37, Secs. 4-6(a), 7(a), 8-10(b),
June 15, 1989, 103 Stat. 70-73; Pub. L. 101-162, title V, (1), (2), Nov.
21, 1989, 103 Stat. 1024, 1025; Pub. L. 101-574, title II, Secs. 202,
204(a), 206, 242, 245, title III, Sec. 307, Nov. 15, 1990, 104 Stat.
2818-2820, 2827, 2830; Pub. L. 102-140, title VI, Sec. 609(b), (h), Oct.
28, 1991, 105 Stat. 825, 827; Pub. L. 102-191, Sec. 4, Dec. 5, 1991, 105
Stat. 1591; Pub. L. 102-366, title I, Secs. 104, 113(a), title II,
Sec. 211, Sept. 4, 1992, 106 Stat. 988, 989, 997; Pub. L. 102-564, title
III, Sec. 307(b), (c), Oct. 28, 1992, 106 Stat. 4263, 4264; Pub. L. 103-
81, Secs. 4, 5(a), 8, Aug. 13, 1993, 107 Stat. 781, 782; Pub. L. 103-
403, title II, Secs. 201, 202, 204-208(b), 209-211, title VI, Secs. 603-
605(a), Oct. 22, 1994, 108 Stat. 4180-4183, 4202, 4203; Pub. L. 104-36,
Secs. 2-4(a), 5, Oct. 12, 1995, 109 Stat. 295-297; Pub. L. 104-208, div.
D, title I, Secs. 103(a)-(d), (f), 105, 107, 111, Sept. 30, 1996, 110
Stat. 3009-726, 3009-727, 3009-731 to 3009-733; Pub. L. 105-135, title
II, Secs. 201, 202(a), 231, title VII, Sec. 706, Dec. 2, 1997, 111 Stat.
2597, 2598, 2606, 2637; Pub. L. 105-277, div. A, Sec. 101(f) [title
VIII, Sec. 405(d)(10), (f)(9)], Oct. 21, 1998, 112 Stat. 2681-337, 2681-
420, 2681-430; Pub. L. 106-8, Sec. 3(a), (c), Apr. 2, 1999, 113 Stat.
13, 16; Pub. L. 106-22, Secs. 2, 3, Apr. 27, 1999, 113 Stat. 36, 37;
Pub. L. 106-24, Sec. 1(a), Apr. 27, 1999, 113 Stat. 39; Pub. L. 106-50,
title IV, Secs. 401(b), 402(a), (b), 403, 404, Aug. 17, 1999, 113 Stat.
244-246; Pub. L. 106-554, Sec. 1(a)(9) [title II, Secs. 202-208(a), 210,
title VIII, Sec. 802(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-681 to
2763A-684, 2763A-702; Pub. L. 107-100, Sec. 6(a), Dec. 21, 2001, 115
Stat. 970.)
References in Text
Subsections (b) and (c) of section 631 of this title, referred to in
subsecs. (a)(11) and (i)(1), were redesignated subsections (c) and (d),
respectively, and a new subsection (b) was added by Pub. L. 100-418,
title VIII, Sec. 8002, Aug. 23, 1988, 102 Stat. 1553.
The Small Business Investment Act of 1958, referred to in subsecs.
(a)(13) and (j)(10)(A)(vi), (13)(D)(i), is Pub. L. 85-699, Aug. 21,
1958, 72 Stat. 689, as amended. Title IV, part B of title IV, and title
V of the Act are classified generally to subchapter IV-A (Sec. 692 et
seq.), part B (Sec. 694a et seq.) of subchapter IV-A, and subchapter V
(Sec. 695 et seq.), respectively, of chapter 14B of this title. For
complete classification of this Act to the Code, see Short Title note
set out under section 661 of this title and Tables.
The Disaster Relief and Emergency Assistance Act, referred to in
subsec. (b)(2)(A), is Pub. L. 93-288, May 22, 1974, 88 Stat. 143, as
amended, known as the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, which is classified principally to chapter 68 (Sec. 5121
et seq.) of Title 42, The Public Health and Welfare. For complete
classification of this Act to the Code, see Short Title note set out
under section 5121 of Title 42 and Tables.
The Consolidated Farm and Rural Development Act (7 U.S.C. 1961),
referred to in subsec. (b)(2)(B), was in the original the ``Consolidated
Farmers Home Administration Act of 1961 (7 U.S.C. 1961)'', Pub. L. 87-
128, title III, Aug. 8, 1961, 75 Stat. 307, which was redesignated the
Consolidated Farm and Rural Development Act by Pub. L. 92-419, Sec. 101,
Aug. 30, 1972, 86 Stat. 657. The Consolidated Farm and Rural Development
Act is classified principally to chapter 50 (Sec. 1921 et seq.) of Title
7, Agriculture. For complete classification of this Act to the Code, see
Short Title note set out under section 1921 of Title 7 and Tables.
Paragraph (4) of this subsection, referred to in second undesignated
par. following par. (2) of subsec. (b), was repealed by Pub. L. 97-35.
Section 231 of the Disaster Relief Act of 1970 [15 U.S.C. 636a],
referred to in penultimate par. of subsec. (b), was repealed by Pub. L.
97-35, title XIX, Sec. 1917, Aug. 13, 1981, 95 Stat. 781.
Reorganization Plan Numbered 2 of 1954, referred to in subsec.
(c)(1), is set out in the Appendix to Title 5, Government Organization
and Employees.
Reorganization Plan Numbered 1 of 1957, referred to in subsec.
(c)(1), is set out in the Appendix to Title 5.
The Economic Opportunity Act of 1964, referred to in subsec. (i)(3),
is Pub. L. 88-452, Aug. 20, 1964, 78 Stat. 508, as amended. Title III of
the Act was classified generally to subchapter III (Sec. 2841 et seq.)
of chapter 34 of Title 42, The Public Health and Welfare, prior to its
repeal by Pub. L. 97-35, title VI, Sec. 683(a), Aug. 13, 1981, 95 Stat.
519. For complete classification of this Act to the Code, see Tables.
The Public Works and Economic Development Act of 1965, referred to
in subsec. (i)(5)(D), is Pub. L. 89-136, Aug. 26, 1965, 79 Stat. 552, as
amended, which is classified generally to chapter 38 (Sec. 3121 et seq.)
of Title 42. For complete classification of this Act to the Code, see
Short Title note set out under section 3121 of Title 42 and Tables.
Section 602(b) of Public Law 100-656, the ``Business Opportunity
Development Reform Act of 1988'', referred to in subsec.
(j)(10)(J)(ii)(III), is set out as a note under section 637 of this
title.
Section 35(a) of title 41, referred to in subsec. (j)(13)(C), was
struck out and former section 35(b) of title 41 redesignated section
35(a) by Pub. L. 103-355, title VII, Sec. 7201(1), Oct. 13, 1994, 108
Stat. 3378.
The Workforce Investment Act of 1998, referred to in subsec.
(j)(13)(E), is Pub. L. 105-220, Aug. 7, 1998, 112 Stat. 936, as amended.
Title I of the Act is classified principally to chapter 30 (Sec. 2801 et
seq.) of Title 29, Labor. For complete classification of this Act to the
Code, see Short Title note set out under section 9201 of Title 20,
Education, and Tables.
The Social Security Act, referred to in subsec. (m)(1)(A)(iv),
(4)(F)(iii)(II)(aa), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as
amended. Part A of title IV of the Act is classified generally to part A
(Sec. 601 et seq.) of subchapter IV of chapter 7 of Title 42, The Public
Health and Welfare. For complete classification of this Act to the Code,
see section 1305 of Title 42 and Tables.
Section 202(b) of the Small Business Reauthorization Act of 1997,
referred to in subsec. (m)(4)(F)(i), is section 202(b) of Pub. L. 105-
135, which is set out as a note below.
The Child Care and Development Block Grant Act of 1990, referred to
in subsec. (m)(4)(F)(iii)(II)(aa), is subchapter C (Secs. 658A-658R) of
chapter 8 of subtitle A of title VI of Pub. L. 97-35, as added by Pub.
L. 101-508, title V, Sec. 5082(2), Nov. 5, 1990, 104 Stat. 1388-236, as
amended, which is classified generally to subchapter II-B (Sec. 9858 et
seq.) of chapter 105 of Title 42, The Public Health and Welfare. For
complete classification of this Act to the Code, see Short Title note
set out under section 9801 of Title 42 and Tables.
Codification
September 30, 1996, referred to in subsec. (a)(25)(C), was in the
original ``the date of enactment of this subsection'' which was
translated as meaning the date of enactment of Pub. L. 104-208, which
enacted par. (25) of subsec. (a), to reflect the probable intent of
Congress.
In subsec. (c)(3), ``August 13, 1981'' substituted for ``the
effective date of this Act'', such words having been inserted in place
of ``to October 1, 1983'' by section 1914 of Pub. L. 97-35. ``This Act''
probably meant the Small Business Budget Reconciliation and Loan
Consolidation/Improvement Act of 1981 (title XIX of Pub. L. 97-35)
rather than the Small Business Act (Pub. L. 85-536). See Effective Date
of 1981 Amendment note set out under section 631 of this title.
In subsec. (j)(11)(B)(i), as enacted by the amendments made by Pub.
L. 101-37, ``August 15, 1989'' substituted for ``the effective date of
this subparagraph'' and ``such effective date''. Section 32 of Pub. L.
101-37 provided that the amendments made by Pub. L. 101-37 shall apply
as if included in Pub. L. 100-656. Section 803(b)(1)(A) of Pub. L. 101-
656 provided that the amendment made by section 201(a) thereof to
subsec. (j)(11) shall take effect on June 1, 1989. Section 31 of Pub. L.
101-37 amended section 803(b) of Pub. L. 101-656 to make such amendments
effective on August 15, 1989, in place of June 1, 1989. See 1988 and
1989 Effective Date of Amendment notes below.
``Sections 3131 and 3133 of title 40'' substituted in subsec.
(j)(13)(D) for ``the Act entitled `An Act requiring contracts for the
construction, alteration and repair of any public building or public
work of the United States to be accompanied by a performance bond
protecting the United States and by an additional bond for the
protection of persons furnishing material and labor for the
construction, alteration, or repair of said public buildings or public
works', approved August 24, 1935 (49 Stat. 793)'' on authority of Pub.
L. 107-217, Sec. 5(c), Aug. 21, 2002, 116 Stat. 1303, the first section
of which enacted Title 40, Public Buildings, Property, and Works.
In subsec. (k)(3), ``section 1342 of title 31'' substituted for
``section 3679(b) of the Revised Statutes (31 U.S.C. 665(b))'' on
authority of Pub. L. 97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067,
the first section of which enacted Title 31, Money and Finance.
Section 3109 of title 5, referred to in subsec. (k)(4), substituted
for ``section 15 of the Administrative Expenses Act of 1946 (5 U.S.C.
55a)'' on authority of Pub. L. 89-554, Sec. 7(b), Sept. 6, 1966, 80
Stat. 631, the first section of which enacted Title 5, Government
Organization and Employees.
Section 5703 of title 5, referred to in subsec. (k)(4), substituted
for ``section 5 of such Act (5 U.S.C. 73b-2)'' on authority of section
7(b) of Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 631, section 1 of which
enacted Title 5.
Prior Provisions
Provisions similar to those comprising subsec. (e) of this section
were contained in section 2(a) and (b) of Pub. L. 87-550, July 25, 1962,
76 Stat. 221 (formerly classified to section 637a(a) and (b) of this
title) prior to repeal thereof by section 3(b) of Pub. L. 89-409.
Prior similar provisions were contained in section 207 of act July
30, 1953, ch. 282, title II, 67 Stat. 235, as amended by acts Aug. 9,
1955, ch. 628, Secs. 2, 5, 69 Stat. 547; Feb. 2, 1956, ch. 29, Secs. 2,
3, 70 Stat. 10; Pub. L. 85-335, Feb. 22, 1958, 72 Stat. 27, which was
previously classified to this section. See Codification note set out
under section 631 of this title.
Amendments
2001--Subsec. (a)(18)(C). Pub. L. 107-100, Sec. 6(a)(1), added
subpar. (C).
Subsec. (a)(23)(A). Pub. L. 107-100, Sec. 6(a)(2), inserted at end
``With respect to loans approved during the 2-year period beginning on
October 1, 2002, the annual fee assessed and collected under the
preceding sentence shall be in an amount equal to 0.25 percent of the
outstanding balance of the deferred participation share of the loan.''
2000--Subsec. (a)(2)(A)(i). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 202(1)], substituted ``$150,000'' for ``$100,000''.
Subsec. (a)(2)(A)(ii). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 202(2)], substituted ``85 percent'' for ``80 percent'' and
``$150,000'' for ``$100,000''.
Subsec. (a)(3)(A). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 203], substituted ``$1,000,000 (or if the gross loan amount would
exceed $2,000,000),'' for ``$750,000,''.
Subsec. (a)(4). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 205(1)], inserted heading and struck out former heading ``Interest
rates and fees.--''.
Subsec. (a)(4)(B)(iii). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 204], added cl. (iii).
Subsec. (a)(4)(C). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 205(2)], added subpar. (C).
Subsec. (a)(18). Pub. L. 106-554, Sec. 1(a)(9) [title II, Sec. 206],
amended heading and text of par. (18) generally, substituting present
provisions for provisions which had authorized guarantee fee in an
amount equal to sum of 3 percent of amount of deferred participation
share of loan that was less than or equal to $250,000, if deferred
participation share of loan exceeded $250,000, plus 3.5 percent of
difference between $500,000 or total deferred participation share of
loan, whichever was less, and $250,000, plus, if deferred participation
share of loan exceeded $500,000, 3.875 percent of difference between
total deferred participation share of loan and $500,000, and set forth
provisions relating to exception for certain loans.
Subsec. (a)(28). Pub. L. 106-554, Sec. 1(a)(9) [title II, Sec. 207],
added par. (28).
Subsec. (a)(29). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 208(a)], added par. (29).
Subsec. (a)(30). Pub. L. 106-554, Sec. 1(a)(9) [title VIII,
Sec. 802(a)], added par. (30).
Subsec. (m)(1)(A)(iii)(I). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(2)], substituted ``$10,000'' for ``$7,500''.
Subsec. (m)(1)(B)(iii). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(1)], substituted ``$35,000'' for ``$25,000''.
Subsec. (m)(3)(A)(ii). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(2)], substituted ``$10,000'' for ``$7,500''.
Subsec. (m)(3)(E). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(1), (3)], substituted ``$20,000'' for ``$15,000'' and
``$35,000'' for ``$25,000'' in two places.
Subsec. (m)(4)(C)(i). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(2)], which directed the amendment of subsec.
(m)(4)(C)(i)(II) by substituting ``$10,000'' for ``$7,500'', was
executed by making the substitution in subsec. (m)(4)(C)(i) to reflect
the probable intent of Congress and the termination of the temporary
amendment by Pub. L. 103-403, Sec. 208(a)(2), (c). See 1994 Amendment
note and Effective and Termination Dates of 1994 Amendment note below.
Subsec. (m)(5)(A). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(4)], substituted ``55 grants'' for ``25 grants'' and
``$200,000'' for ``$125,000''.
Subsec. (m)(6)(B). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(5)], substituted ``$15,000'' for ``$10,000''.
Subsec. (m)(7)(A). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(a)(6)], added subpar. (A) and struck out heading and text of
former subpar. (A). Text read as follows: ``During the program
authorized by this subsection, the Administration may fund, on a
competitive basis, not more than 200 microloan programs.''
Subsec. (m)(11)(B). Pub. L. 106-554, Sec. 1(a)(9) [title II,
Sec. 210(b)], substituted ``$35,000'' for ``$25,000''.
1999--Subsec. (a)(10). Pub. L. 106-50, Sec. 401(b), inserted
``guaranteed'' after ``provide'' and ``, including service-disabled
veterans,'' after ``handicapped individual''.
Subsec. (a)(21)(A)(ii). Pub. L. 106-50, Sec. 404, inserted ``or a
veteran'' after ``qualified individual''.
Subsec. (a)(27). Pub. L. 106-8, Sec. 3(a), (c), temporarily added
par. (27) relating to Year 2000 computer problem program. See Effective
and Termination Dates of 1999 Amendments note below.
Subsec. (b)(1)(C). Pub. L. 106-24, Sec. 1(a), added subpar. (C).
Subsec. (b)(3). Pub. L. 106-50, Sec. 402(b), added par. (3).
Subsec. (m)(1)(A)(i). Pub. L. 106-50, Sec. 403, inserted ``veteran
(within the meaning of such term under section 632(q) of this title),''
after ``low-income,''.
Subsec. (m)(3)(D). Pub. L. 106-22, Sec. 3, struck out subpar. (D)
heading and amended text generally. Prior to amendment, text read as
follows: ``The Administration shall, by regulation, require each
intermediary to establish a loan loss reserve fund, and to maintain such
reserve fund until all obligations owed to the Administration under this
subsection are repaid. The Administration shall require the loan loss
reserve fund to be maintained--
``(i) during the initial 5 years of the intermediary's
participation in the program under this subsection, at a level equal
to not more than 15 percent of the outstanding balance of the notes
receivable owed to the intermediary; and
``(ii) in each year of participation thereafter, at a level
equal to not more than the greater of--
``(I) 2 times an amount reflecting the total losses of the
intermediary as a result of participation in the program under
this subsection, as determined by the Administrator on a case-
by-case basis; or
``(II) 10 percent of the outstanding balance of the notes
receivable owed to the intermediary.''
Subsec. (m)(7)(B). Pub. L. 106-22, Sec. 2(1), added subpar. (B) and
struck out heading and text of former subpar. (B). Text read as follows:
``During any fiscal year, a State shall not receive new loan funds from
the Administration that exceed 125 percent of the State's pro rata share
of the microloan program authorization during such fiscal year, such
share to be based on the population of the State, as compared to the
total population of the United States. If, however, at the beginning of
the fourth quarter of a fiscal year the Administration determines that a
portion of appropriated microloan funds are unlikely to be awarded
during that year, the Administration may make additional funds available
to a State in excess of 125 percent of the pro rata share of that
State.''
Subsec. (m)(8). Pub. L. 106-22, Sec. 2(2), inserted ``and providing
funding to intermediaries'' after ``program applicants'' and ``and
provide funding to'' after ``shall select''.
Subsec. (n). Pub. L. 106-50, Sec. 402(a), added subsec. (n).
1998--Subsec. (j)(13)(E). Pub. L. 105-277, Sec. 101(f) [title VIII,
Sec. 405(f)(9)], struck out ``the Job Training Partnership Act or''
before ``title I of the Workforce'' in introductory provisions.
Pub. L. 105-277, Sec. 101(f) [title VIII, Sec. 405(d)(10)],
substituted ``the Job Training Partnership Act or title I of the
Workforce Investment Act of 1998'' for ``the Job Training Partnership
Act (29 U.S.C. 1501 et seq.)''.
1997--Subsec. (a). Pub. L. 105-135, Sec. 231(1), inserted heading.
Subsec. (a)(1). Pub. L. 105-135, Sec. 231(2), inserted heading,
designated existing provisions as subpar. (A) and inserted heading, and
added subpar. (B).
Subsec. (a)(8). Pub. L. 105-135, Sec. 706, added par. (8).
Subsec. (m). Pub. L. 105-135, Sec. 201(c), struck out
``Demonstration'' and ``demonstration'' wherever appearing in heading
and text.
Subsec. (m)(1)(A)(iv). Pub. L. 105-135, Sec. 202(a)(1), added cl.
(iv).
Subsec. (m)(3)(C). Pub. L. 105-135, Sec. 201(a), substituted
``$3,500,000'' for ``$2,500,000''.
Subsec. (m)(3)(D)(i), (ii). Pub. L. 105-135, Sec. 201(b), added cls.
(i) and (ii) and struck out former cls. (i) and (ii) which read as
follows:
``(i) in the first year of the intermediary's participation in the
demonstration program, at a level equal to not more than 15 percent of
the outstanding balance of the notes receivable owed to the
intermediary; and
``(ii) in each year of participation thereafter, at a level
reflecting the intermediary's total losses as a result of participation
in the demonstration program, as determined by the Administration on a
case-by-case basis, but in no case shall the required level exceed 15
percent of the outstanding balance of the notes receivable owed to the
intermediary under the program.''
Subsec. (m)(4)(E). Pub. L. 105-135, Sec. 201(d)(1), designated
existing provisions as cl. (i), inserted heading, substituted ``25
percent'' for ``15 percent'', and added cl. (ii).
Subsec. (m)(4)(F). Pub. L. 105-135, Sec. 202(a)(2), added subpar.
(F).
Subsec. (m)(5)(A). Pub. L. 105-135, Sec. 201(d)(2), struck out ``in
each of the 5 years of the demonstration program established under this
subsection,'' after ``requirements of subparagraph (B),'' and
substituted ``annually'' for ``for terms of up to 5 years''.
Subsec. (m)(6)(E). Pub. L. 105-135, Sec. 202(a)(3), added subpar.
(E).
Subsec. (m)(9). Pub. L. 105-135, Sec. 202(a)(4)(A), substituted
``Grants for management, marketing, technical assistance, and related
services'' for ``Technical assistance for intermediaries'' in heading.
Subsec. (m)(9)(C). Pub. L. 105-135, Sec. 202(a)(4)(B), added subpar.
(C).
Subsec. (m)(12). Pub. L. 105-135, Sec. 201(c)(4), substituted ``1998
through 2000'' for ``1995 through 1997''.
Subsec. (m)(13). Pub. L. 105-135, Sec. 202(a)(5), added par. (13).
1996--Subsec. (a)(2)(C)(ii)(II). Pub. L. 104-208, Sec. 103(a),
amended subcl. (II) generally. Prior to amendment, subcl. (II) read as
follows: ``authority to service and liquidate such loans.''
Subsec. (a)(2)(D). Pub. L. 104-208, Sec. 111, added subpar. (D).
Subsec. (a)(4). Pub. L. 104-208, Sec. 103(f), inserted par. (4)
heading, designated existing text as subpar. (A) and inserted heading,
and added subpar. (B).
Subsec. (a)(19)(C). Pub. L. 104-208, Sec. 103(b), added subpar. (C).
Subsec. (a)(25). Pub. L. 104-208, Sec. 103(c), added par. (25).
Subsec. (a)(26). Pub. L. 104-208, Sec. 103(d), added par. (26).
Subsec. (d). Pub. L. 104-208, Sec. 107(a), struck out ``(1)'' before
``The Administration'' and struck out par. (2) which read as follows:
``The Administration is authorized to hold seminars throughout the
Nation to make potential applicants aware of the opportunities available
under this subsection and related government energy programs, and to
make grants to qualified organizations to provide training seminars for
small business concerns regarding practical and easily implemented
methods for design, manufacture, installation, and servicing of
equipment and for providing services listed in paragraph (1) of this
subsection, except that recipients of loans made pursuant to this
subsection shall not subsequently be eligible for such grants.''
Subsec. (e). Pub. L. 104-208, Sec. 107(b), amended subsec. (e)
generally, substituting ``(e) [RESERVED]'' for prior provisions of
subsec. (e) which read as follows: ``The Administration also is
empowered to make loans (either directly or in cooperation with banks or
other lenders through agreements to participate on an immediate or
deferred basis) to assist any firm to adjust to changed economic
conditions resulting from increased competition from imported articles,
but only if (1) an adjustment proposal of such firm has been certified
by the Secretary of Commerce pursuant to the Trade Expansion Act of
1962, (2) the Secretary has referred such proposal to the Administration
under that Act and the loan would provide part or all of the financial
assistance necessary to carry out such proposal, and (3) the Secretary's
certification is in force at the time the Administration makes the loan.
With respect to loans made under this subsection the Administration
shall apply the provisions of sections 314, 315, 316, 318, 319, and 320
of the Trade Expansion Act of 1962 as though such loans had been made
under section 314 of that Act.''
Subsec. (f). Pub. L. 104-208, Sec. 107(c), amended subsec. (f)
generally, substituting ``(f) [RESERVED]'' for prior provisions of
subsec. (f) which read as follows: ``In the administration of the
disaster loan program under subsection (b)(1) of this section, in the
case of property loss or damage as a result of a disaster which is a
`major disaster' as defined in section 102(2) of the Disaster Relief and
Emergency Assistance Act, the Small Business Administration, to the
extent such loss or damage is not compensated for by insurance or
otherwise, may lend to a privately owned college or university without
regard to whether the required financial assistance is otherwise
available from private sources, and may waive interest payments and
defer principal payments on such a loan for the first three years of the
term of the loan.''
Subsec. (l). Pub. L. 104-208, Sec. 107(c), amended subsec. (l)
generally, substituting ``(l) [RESERVED]'' for prior provisions of
subsec. (l) which consisted of 9 pars. authorizing loans to small
business concerns for solar energy and energy conservation measures.
Subsec. (m)(7)(B). Pub. L. 104-208, Sec. 105, inserted at end ``If,
however, at the beginning of the fourth quarter of a fiscal year the
Administration determines that a portion of appropriated microloan funds
are unlikely to be awarded during that year, the Administration may make
additional funds available to a State in excess of 125 percent of the
pro rata share of that State.''
1995--Subsec. (a)(2). Pub. L. 104-36, Sec. 2, amended par. (2)
generally. Prior to amendment, par. (2) related to percentage levels in
loan participation agreements.
Subsec. (a)(18). Pub. L. 104-36, Sec. 3(a), amended par. (18)
generally. Prior to amendment, par. (18) read as follows: ``The
Administration shall collect a guarantee fee equal to two percent of the
amount of the deferred participation share of any loan under this
subsection other than a loan repayable in one year or less. The fee
shall be payable by the participating lending institution and may be
charged to the borrower.''
Subsec. (a)(19)(B). Pub. L. 104-36, Sec. 3(b)(1), substituted
``shall develop'' for ``shall (i) develop'' and struck out at end ``,
and (ii) allow such lenders to retain one-half of the fee collected
pursuant to subsection (a)(18) of this section on such loans. A
participating lender may not retain any fee pursuant to this paragraph
if the amount committed and outstanding to the applicant would exceed
$50,000 unless the amount in excess of $50,000 is an amount not approved
under the provisions of this paragraph''.
Subsec. (a)(19)(C). Pub. L. 104-36, Sec. 3(b)(2), struck out subpar.
(C) which read as follows: ``In order to encourage lending institutions
and other entities making loans authorized under this subsection to
provide loans to small business loan applicants located in rural areas,
such lenders shall be permitted to retain one-half of the fee collected
pursuant to paragraph (18) on loans of less than $75,000. A
participating lender may not retain any fee pursuant to this
subparagraph if the amount committed and outstanding to the applicant
would exceed $75,000 unless the amount in excess of $75,000 is an amount
not approved under the provisions of this subparagraph. This
subparagraph shall cease to be effective on October 1, 1995.''
Subsec. (a)(23). Pub. L. 104-36, Sec. 4(a), added par. (23).
Subsec. (a)(24). Pub. L. 104-36, Sec. 5, added par. (24).
1994--Subsec. (a)(2)(B)(iv). Pub. L. 103-403, Sec. 211, amended cl.
(iv) generally. Prior to amendment, cl. (iv) read as follows: ``not less
than 85 percent of the financing outstanding at the time of disbursement
if such financing is a loan under paragraph (16).''
Subsec. (a)(3)(B). Pub. L. 103-403, Sec. 210, amended subpar. (B)
generally. Prior to amendment, subpar. (B) read as follows: ``if the
total amount outstanding and committed (on a deferred basis) solely for
the purposes provided in paragraph (16) to the borrower from the
business loan and investment fund established by this chapter would
exceed $1,000,000, such amount to be in addition to any financing solely
for working capital, supplies, or revolving lines of credit for export
purposes up to a maximum of $250,000; and''.
Subsec. (a)(14)(A). Pub. L. 103-403, Sec. 209, amended subpar. (A)
generally. Prior to amendment, subpar. (A) read as follows: ``The
Administration under this subsection may provide extensions and
revolving lines of credit for export purposes and financing to enable
small business concerns, including small business export trading
companies and small business export management companies, to develop
foreign markets. No such extension or revolving line of credit may be
made for a period or periods exceeding 3 years. A bank or participating
lending institution may establish the rate of interest on extensions and
revolving lines of credit as may be legal and reasonable.''
Subsec. (a)(21)(A). Pub. L. 103-403, Sec. 605(a), inserted ``on a
guaranteed basis'' before ``under the authority''.
Subsec. (a)(21)(E). Pub. L. 103-403, Sec. 603, added subpar. (E).
Subsec. (m)(3)(C). Pub. L. 103-403, Sec. 206, substituted
``$2,500,000'' for ``$1,250,000''.
Subsec. (m)(4)(B). Pub. L. 103-403, Sec. 208(a)(1), (c), temporarily
inserted ``except for a grant made to an intermediary that provides not
less than 50 percent of its loans to small business concerns located in
or owned by one or more residents of an economically distressed area,''
after ``under subparagraph (A),''. See Effective and Termination Dates
of 1994 Amendment note below.
Subsec. (m)(4)(C)(i). Pub. L. 103-403, Sec. 208(a)(2), (c),
temporarily added cl. (i) which read as follows: ``In addition to grants
made under subparagraph (A), each intermediary shall be eligible to
receive a grant equal to 5 percent of the total outstanding balance of
loans made to the intermediary under this subsection if--
``(I) the intermediary provides not less than 25 percent of its
loans to small business concerns located in or owned by one or more
residents of an economically distressed area; or
``(II) the intermediary has a portfolio of loans made under this
subsection that averages not more than $7,500 during the period of
the intermediary's participation in the program.''
See Effective and Termination Dates of 1994 Amendment note below.
Subsec. (m)(4)(E). Pub. L. 103-403, Sec. 207, added subpar. (E).
Subsec. (m)(7). Pub. L. 103-403, Sec. 204, amended par. (7)
generally, substituting present provisions for former provisions
relating to program funding, which provided for: in subpar. (A), first
year programs; in subpar. (B), expanded programs; and in subpar. (C),
State limitations.
Subsec. (m)(8). Pub. L. 103-403, Sec. 205, amended heading and text
of par. (8) generally. Prior to amendment, text read as follows: ``In
funding microloan programs, the Administration shall ensure that at
least one-half of the programs funded under this subsection will provide
microloans to small business concerns located in rural areas.''
Subsec. (m)(9)(B). Pub. L. 103-403, Sec. 604, inserted ``and loan
guarantees'' after ``for loans'' and ``and national and regional
nonprofit organizations that have demonstrated experience in providing
training support for microenterprise development and financing.'' after
``experienced microlending organizations''.
Subsec. (m)(11)(A)(v). Pub. L. 103-403, Sec. 202, added cl. (v).
Subsec. (m)(11)(D). Pub. L. 103-403, Sec. 208(b), (c), temporarily
added subpar. (D) which read as follows: ``the term `economically
distressed area', as used in paragraph (4), means a county or equivalent
division of local government of a State in which the small business
concern is located, in which, according to the most recent data
available from the Bureau of the Census, Department of Commerce, not
less than 40 percent of residents have an annual income that is at or
below the poverty level.''. See Effective and Termination Dates of 1994
Amendment note below.
Subsec. (m)(12). Pub. L. 103-403, Sec. 201, added par. (12).
1993--Subsec. (a)(2). Pub. L. 103-81, Sec. 5(a)(2)-(4), in
concluding provisions, substituted ``less than the above specified
percentums'' for ``less than 85 percent under subparagraph (B)'' and
``not less than 70 percent, unless a lesser percent is required by
clause (B)(ii) or upon the'' for ``not less than 80 percent, except
upon'' and inserted after third sentence ``The maximum interest rate for
a loan guaranteed under the Preferred Lenders Program shall not exceed
the maximum interest rate, as determined by the Administration, which is
made applicable to other loan guarantees under subsection (a) of this
section.''
Subsec. (a)(2)(B). Pub. L. 103-81, Sec. 5(a)(1), struck out ``and''
at end of cl. (i), added cls. (ii) and (iii), and redesignated former
cl. (ii) as (iv).
Subsec. (a)(22). Pub. L. 103-81, Sec. 4, added par. (22).
Subsec. (m)(1)(B)(iii). Pub. L. 103-81, Sec. 8(1), substituted
``$25,000'' for ``$15,000''.
Subsec. (m)(5)(A). Pub. L. 103-81, Sec. 8(2), substituted ``25
grants for terms of up to 5 years'' for ``6 grants''.
Subsec. (m)(9)(B). Pub. L. 103-81, Sec. 8(3), substituted ``7
percent'' for ``3 percent''.
1992--Subsec. (a)(4). Pub. L. 102-366, Sec. 104, substituted
``Notwithstanding the provisions of the constitution of any State or the
laws of any State limiting the rate or amount of interest which may be
charged, taken, received, or reserved, the maximum legal rate of
interest on any financing made on a deferred basis pursuant to this
subsection'' for ``The rate of interest on financings made on a deferred
basis shall be legal and reasonable but''.
Subsec. (a)(21). Pub. L. 102-366, Sec. 211, added par. (21).
Subsec. (m)(1)(A)(i). Pub. L. 102-366, Sec. 113(a)(1)(A), amended
cl. (i) generally, substituting ``and business owners and other such
individuals'' for ``, business owners, and other individuals''.
Subsec. (m)(1)(A)(iii)(I). Pub. L. 102-366, Sec. 113(a)(1)(B),
inserted ``, particularly loans in amounts averaging not more than
$7,500,'' after ``small-scale loans''.
Subsec. (m)(3)(A). Pub. L. 102-366, Sec. 113(a)(2), designated
existing provisions as cl. (i) and inserted heading, redesignated cls.
(i) to (viii) as subcls. (I) to (VIII), respectively, substituted
``economic, poverty, and unemployment'' for ``economic and
unemployment'' in subcl. (III), amended subcl. (VIII) generally, and
added cl. (ii). Prior to amendment, subcl. (VIII) read as follows: ``any
plan to involve private sector lenders in assisting selected small
business concerns.''
Subsec. (m)(3)(F). Pub. L. 102-366, Sec. 113(a)(3), amended subpar.
(F) generally. Prior to amendment, subpar. (F) read as follows: ``Loans
made by the Administration under this subsection shall be for a term of
10 years and at an interest rate equal to the rate determined by the
Secretary of the Treasury for obligations of the United States with a
period of maturity of 5 years, adjusted to the nearest one-eighth of 1
percent.''
Subsec. (m)(4)(A). Pub. L. 102-366, Sec. 113(a)(4)(B), added subpar.
(A) and struck out former subpar. (A) which read as follows: ``Except as
otherwise provided in subparagraph (C) and subject to the requirements
of subparagraph (B), each intermediary that receives a loan under
subparagraph (B)(i) of paragraph (1) shall be eligible to receive a
grant to provide marketing, management, and technical assistance to
small business concerns that are borrowers under this subsection. In the
first and second years of an intermediary's program participation, each
intermediary meeting the requirement of subparagraph (B) may receive a
grant of not more than 20 percent of the total outstanding balance of
loans made to it under this subsection. In the third and subsequent
years of an intermediary's program participation, each intermediary
meeting the requirements of subparagraph (B) may receive a grant of not
more than 10 percent of the total outstanding balance of loans made to
it under this subsection.''
Pub. L. 102-366, Sec. 113(a)(4)(A), substituted ``Except as
otherwise provided in subparagraph (C) and subject to'' for ``Subject
to''.
Subsec. (m)(4)(B). Pub. L. 102-366, Sec. 113(a)(4)(C), substituted
``25 percent'' for ``one-half''.
Subsec. (m)(4)(C), (D). Pub. L. 102-366, Sec. 113(a)(4)(D), added
subpars. (C) and (D).
Subsec. (m)(5)(A). Pub. L. 102-366, Sec. 113(a)(5), substituted ``6
grants'' for ``2 grants''.
Subsec. (m)(6)(C). Pub. L. 102-366, Sec. 113(a)(6), amended subpar.
(C) generally. Prior to amendment, subpar. (C) read as follows:
``Notwithstanding any provision of the laws of any State or the
constitution of any State pertaining to the rate or amount of interest
that may be charged, taken, received or reserved on a loan, the maximum
rate of interest to be charged on a microloan funded under this
subsection shall be not more than 4 percentage points above the prime
lending rate, as identified by the Administration and published in the
Federal Register on a quarterly basis.''
Subsec. (m)(7)(A). Pub. L. 102-564, Sec. 307(b)(1), inserted at end:
``If, at the end of fiscal year 1992, the Administration has funded less
than 50 microloan programs under this subparagraph, the Administration
may, in fiscal year 1993, fund a number of additional microloan programs
equal to the difference between 50 and the number of microloan programs
actually funded in fiscal year 1992.''
Pub. L. 102-366, Sec. 113(a)(7)(A), substituted ``60 microloan
programs'' for ``35 microloan programs''.
Subsec. (m)(7)(B). Pub. L. 102-564, Sec. 307(b)(2), substituted ``In
addition to any microloan programs authorized to be funded in fiscal
year 1993 in accordance with subparagraph (A), in the second'' for ``In
the second''.
Pub. L. 102-366, Sec. 113(a)(7)(B), substituted ``50 additional''
for ``25 additional''.
Subsec. (m)(7)(C)(i). Pub. L. 102-366, Sec. 113(a)(7)(C), amended
cl. (i) generally. Prior to amendment, cl. (i) read as follows: ``be
awarded more than 2 microloan programs in any year of the demonstration
program;''.
Subsec. (m)(7)(C)(ii), (iii). Pub. L. 102-366, Sec. 113(a)(7)(D),
(E), substituted ``$1,500,000'' for ``$1,000,000'' in cl. (ii) and
``$2,500,000'' for ``$1,500,000'' in cl. (iii).
Subsec. (m)(9), (10). Pub. L. 102-366, Sec. 113(a)(8), (9), added
par. (9) and redesignated former par. (9) as (10). Former par. (10)
redesignated (11).
Subsec. (m)(11). Pub. L. 102-564, Sec. 307(c), inserted ``private,''
before ``nonprofit'' in subpar. (A)(ii).
Pub. L. 102-366, Sec. 113(a)(8), (10), redesignated par. (10) as
(11) and amended subpar. (A) generally. Prior to amendment, subpar. (A)
read as follows: ``the term `intermediary' means a private, nonprofit
entity or a nonprofit community development corporation that seeks to
borrow or has borrowed funds from the Small Business Administration to
make microloans to small business concerns under this subsection;''.
1991--Subsec. (a)(18). Pub. L. 102-140, Sec. 609(b), struck out ``or
a loan under paragraph (13)'' after ``one year or less''.
Subsec. (a)(19)(B). Pub. L. 102-191 struck out ``during fiscal years
1989, 1990, and 1991,'' after ``small business loan applicants,''.
Subsec. (m). Pub. L. 102-140, Sec. 609(h), added subsec. (m).
1990--Subsec. (a)(14)(A). Pub. L. 101-574, Sec. 202, struck out
``pre-export'' before ``financing'' and substituted ``3 years'' for ``18
months''.
Subsec. (a)(16)(A). Pub. L. 101-574, Sec. 245, struck out at end
``The lender shall agree to sell the loan in the secondary market as
authorized in sections 634(f) and 634(g) of this title within 180 days
of the date of disbursement.''
Subsec. (a)(19)(C). Pub. L. 101-574, Sec. 307, added subpar. (C).
Subsec. (j)(3)(A). Pub. L. 101-574, Sec. 242(1), struck out subpar.
(A), which was previously struck out by Pub. L. 100-656, Sec. 505(h).
See 1988 Amendment note below.
Subsec. (j)(3)(B). Pub. L. 101-574, Sec. 242(1), struck out subpar.
(B) which read as follows: ``The General Accounting Office shall
evaluate the activities taken by the Administration to achieve the
purpose of this paragraph and evaluate the success of these activities
in achieving the purposes of this paragraph. The General Accounting
Office shall report to the Congress by January 1, 1981, and at any time
thereafter at the discretion of the Comptroller General, on the findings
of this evaluation and shall make recommendations on actions needed to
improve the Administration's performance pursuant to this paragraph.''
Subsec. (j)(8). Pub. L. 101-574, Sec. 242(2), struck out par. (8)
which read as follows: ``The General Accounting Office shall provide for
an independent and continuing evaluation of programs under subsections
(i) and (j) of this section and section 637(a) of this title, including
full information on, and analysis of, the character and impact of
managerial assistance provided, the location, income characteristics,
and extent to which private resources and skills have been involved in
these programs. Such evaluation together with any recommendations deemed
advisable by the Comptroller General shall be reported to the Congress
by January 1, 1981, and at any time thereafter at the discretion of the
Comptroller General.''
Subsec. (j)(10)(J)(ii). Pub. L. 101-574, Sec. 204(a), amended cl.
(ii) generally. Prior to amendment, cl. (ii) read as follows: ``Except
as provided under section 602 of the Business Opportunity Development
Reform Act of 1988, no award shall be made pursuant to section 637(a) of
this title to other than a small business concern.''
Subsec. (j)(13)(D)(iii). Pub. L. 101-574, Sec. 206, substituted
``October 1, 1994'' for ``October 1, 1992''.
1989--Subsec. (a)(2). Pub. L. 101-162, title V, (1), amended par.
(2) generally. Prior to amendment, par. (2) read as follows: ``In
agreements to participate in loans on a deferred basis under this
subsection, such participation by the Administration, except as provided
in paragraph (6), shall be:
``(A) not less than 90 per centum of the balance of the
financing outstanding at the time of disbursement if such financing
does not exceed $155,000; and
``(B) subject to the limitation in paragraph (3)--
``(i) not less than 70 per centum nor more than 85 per
centum of the financing outstanding at the time of disbursement
if such financing exceeds $155,000 but is less than $714,285,
``(ii) less than 70 per centum of the financing outstanding
at the time of disbursement if such financing exceeds $714,285;
``(iii) not less than 85 per centum of the financing
outstanding at the time of disbursement if such financing is a
loan under paragraph (16) and is less than $1,176,470; and
``(iv) less than 85 per centum of the financing outstanding
at the time of disbursement if such financing is a loan under
paragraph (16) and exceeds $1,176,470;
Provided, That the Administration shall not use the per centum of
guarantee requested as a criterion to establish priorities in approving
guarantee requests nor shall the Administration reduce the per centum
guaranteed to less than 85 per centum pursuant to subparagraph (B) other
than by a determination made on each application: Provided, further,
That the Administration may reduce its participation below the per
centums stated in this paragraph if the lender requests the reduction
under the preferred lenders program or any successor thereto, but any
such reduction shall not exceed five points. As used in this sentence
the term `preferred lenders program' means a program under which,
pursuant to a written agreement between the lender and the
Administration, the lender has been delegated (1) complete authority to
make and close loans with a guarantee from the Administration without
obtaining the prior specific approval of the Administration, and (2)
authority to service and liquidate such loans.''
Subsec. (a)(19). Pub. L. 101-162, title V, (2), amended par. (19)
generally. Prior to amendment, par. (19) read as follows: ``During
fiscal years 1989, 1990, and 1991, in addition to the preferred lenders
program authorized by the proviso in section 634(b)(7) of this title,
the Administration is authorized to establish a certified loan program
for lenders who establish their knowledge of Administration laws and
regulations concerning the loan guarantees program and their proficiency
in program requirements. In order to encourage certified lenders and
preferred lenders to provide loans of $50,000 or less in guarantees to
eligible small business loan applicants, the Administration (A) shall
develop and shall allow participating lenders in the certified loan
program and in the preferred loan program to solely utilize a uniform
and simplified loan form for such loans and (B) shall allow such lenders
to retain one-half of the fee collected pursuant to subsection (a)(16)
of this section on such loans: Provided, That a participating lender may
not retain any fee pursuant to this paragraph if the amount committed
and outstanding to the applicant would exceed $50,000 unless such excess
amount was not approved under the provisions of this paragraph. The
designation of a lender as a certified lender shall be suspended or
revoked at any time that the Administration determines that the lender
is not adhering to its rules and regulations or if the Administration
determines that the loss experience of the lender is excessive as
compared to other lenders: Provided further, That any suspension or
revocation of the designation shall not affect any outstanding
guarantee: And, provided further, That the Administration may not reduce
the per centum of guarantee as a criterion of eligibility for
participation in this program, except as otherwise provided by law.''
Subsec. (a)(20)(C)(iv). Pub. L. 101-37, Sec. 9, inserted ``is''
before ``amortized''.
Subsec. (j)(10)(A)(i). Pub. L. 101-37, Sec. 5(a), substituted
``which set forth'' for ``which sets forth''.
Subsec. (j)(10)(D)(i). Pub. L. 101-37, Sec. 5(b)(1), substituted
``Business Opportunity Specialist'' for ``business opportunity
specialist''.
Subsec. (j)(10)(D)(ii)(II). Pub. L. 101-37, Sec. 5(b)(2),
substituted ``the small business concern'' for ``small business
concerns''.
Subsec. (j)(10)(D)(iii). Pub. L. 101-37, Sec. 5(b)(3), inserted
``relating to attaining business activity from sources other than
contracts awarded pursuant to section 637(a) of this title'' after
``subparagraph (I)''.
Subsec. (j)(10)(D)(iv). Pub. L. 101-37, Sec. 5(b)(4), substituted
``contract awards'' for ``contact awards''.
Subsec. (j)(10)(D)(iv)(I). Pub. L. 101-37, Sec. 5(b)(5), inserted
``relating to attaining business activity from sources other than
contracts awarded pursuant to section 637(a) of this title'' after
``subparagraph (I)''.
Subsec. (j)(10)(E)(ii). Pub. L. 101-37, Sec. 7(a)(1), substituted
``completes the period of Program participation as prescribed by
paragraph (15)'' for ``participates in the Program for a period in
excess of the time limits prescribed by paragraph (15)''.
Subsec. (j)(10)(F). Pub. L. 101-37, Sec. 7(a)(2), struck out subpar.
(F) appearing first, which read as follows: ``For the purposes of this
subsection and section 637(a) of this title, the terms `terminated' or
`termination' shall mean the total denial''.
Pub. L. 101-37, Sec. 7(a)(3), in subpar. (F) appearing second,
inserted first sentence and struck out former first sentence which read
as follows: ``For the purposes of this chapter, this subsection and
section 637(a) of this title, the terms `terminated' or `termination'
shall mean the total denial or suspension of assistance provided
pursuant to this paragraph or section 637(a) of this title prior to the
graduation of the participating small business concern pursuant to
subparagraph (H) or the expiration of the maximum program participation
in terms prescribed by paragraph (15).''
Subsec. (j)(10)(I). Pub. L. 101-37, Sec. 10(b), designated as
subpar. (I) the undesignated subpar. which followed subpar. (H).
Pub. L. 101-37, Sec. 10(a), made technical correction to directory
language of Pub. L. 100-656, Sec. 303(a), see 1988 Amendment note below.
Subsec. (j)(10)(J)(i). Pub. L. 101-37, Sec. 6(a), substituted
``suspended'' for ``suspended or terminated''.
Subsec. (j)(11)(B). Pub. L. 101-37, Sec. 4(1), added subpar. (B) and
struck out former subpar. (B) which read as follows: ``Except as
provided in section 602(d) of the Business Opportunity Development
Reform Act of 1988, any individual upon whom eligibility is based
pursuant to section 637(a)(4) of this title, shall be permitted to
assert such eligibility for only one small business concern.
Notwithstanding the provisions of the preceding sentence, no individual
who was determined pursuant to section 637(a) of this title to be
socially and economically disadvantaged before June 1, 1989, shall be
permitted to assert such disadvantage with respect to any other concern
making application for certification after June 1, 1989.''
Subsec. (j)(11)(E). Pub. L. 101-37, Sec. 4(2), (3), substituted
``Office of Minority Small Business'' for ``Office of the Associate
Administrator for Minority Small Business'' and ``the Associate
Administrator for Minority Small Business and Capital Ownership
Development'' for ``such Associate Administrator''.
Subsec. (j)(11)(F)(v). Pub. L. 101-37, Sec. 4(4), substituted ``to
the Associate Administrator'' for ``with the Associate Administrator''.
Subsec. (j)(11)(F)(vi). Pub. L. 101-37, Sec. 4(5), added cl. (vi)
and struck out former cl. (vi) which read as follows: ``decide protests
from applicants that have been denied program admission;''.
Subsec. (j)(11)(F)(viii). Pub. L. 101-37, Sec. 4(6), substituted
``subparagraph (I)'' for ``subparagraph (H)''.
Subsec. (j)(11)(G)(ii). Pub. L. 101-37, Sec. 4(7), substituted
``Participants'' for ``participants''.
Subsec. (j)(11)(H), (I). Pub. L. 101-37, Sec. 4(9), added subpar.
(H) and redesignated former subpar. (H) as (I).
Subsec. (j)(12)(A). Pub. L. 101-37, Sec. 8(a)(1), substituted
``developmental'' for ``development''.
Subsec. (j)(12)(B). Pub. L. 101-37, Sec. 8(a)(2), inserted ``in its
effort'' after ``to assist the concern''.
Subsec. (j)(13)(E). Pub. L. 101-37, Sec. 8(b), inserted second
sentence and struck out former second sentence which read as follows:
``Such financial assistance may be made without regard to section 647(a)
of this title, shall be made by way of reimbursement to the training
provider, and shall have such adjustments as may be necessary to provide
for overpayments or underpayments.''
1988--Subsec. (a)(2). Pub. L. 100-590, Sec. 103, inserted ``, but
any such reduction shall not exceed five points'' after ``any successor
thereto'' in second proviso.
Subsec. (a)(2)(B)(iii), (iv). Pub. L. 100-418, Sec. 8007(a)(1),
added cls. (iii) and (iv).
Subsec. (a)(3). Pub. L. 100-418, Sec. 8007(a)(2), amended par. (3)
generally. Prior to amendment, par. (3) read as follows: ``No loan under
this subsection shall be made if the total amount outstanding and
committed (by participation or otherwise) to the borrower from the
business loan and investment fund established by this chapter would
exceed $500,000: Provided, That no such loan made or effected either
directly or in cooperation with banks or other lending institutions
through agreements to participate on an immediate basis shall exceed
$350,000.''
Subsec. (a)(12). Pub. L. 100-590, Sec. 111(c), designated existing
provisions as subpar. (A) and added subpar. (b)[(B)].
Subsec. (a)(14). Pub. L. 100-418, Sec. 8005, amended par. (14)
generally. Prior to amendment, par. (14) read as follows: ``The
Administration under this subsection may provide extensions and
revolving lines of credit for export purposes to enable small business
concerns to develop foreign markets and for preexport financing:
Provided, however, That no such extension or revolving line of credit
may be made for a period or periods exceeding eighteen months. A bank or
participating lending institution may establish the rate of interest on
extensions and revolving lines of credit as may be legal and
reasonable.''
Subsec. (a)(16) to (18). Pub. L. 100-418, Sec. 8007(a)(3), (4),
added pars. (16) and (17) and redesignated former par. (16) as (18).
Subsec. (a)(19). Pub. L. 100-533 and Pub. L. 100-590, Sec. 102(a),
made identical amendments adding par. (19).
Subsec. (a)(20). Pub. L. 100-656, Sec. 302, added par. (20).
Subsec. (b)(1)(A). Pub. L. 100-590, Secs. 119(a), 121, substituted
``natural or other disasters'' for ``floods, riots or civil disorders,
or other catastrophes'' and inserted proviso that Administration may
increase loan up to additional 20 per centum to protect damaged or
destroyed property from possible future disasters.
Subsec. (b)(2)(A). Pub. L. 100-707, Sec. 109(f)(1), substituted
``the Disaster Relief and Emergency Assistance Act'' for ``the Act
entitled `An Act to authorize Federal assistance to States and local
governments in major disasters, and for other purposes', approved
September 30, 1950, as amended (42 U.S.C. 1855-1855g)''.
Subsec. (b)(E). Pub. L. 100-707, Sec. 109(f)(2), substituted
``section 312(a) of the Disaster Relief and Emergency Assistance Act''
for ``subsection (b) of section 315 of Public Law 93-288 (42 U.S.C.
5155)''.
Subsec. (c)(5)(C). Pub. L. 100-590, Sec. 120(b), substituted
``business or other concern, including agricultural cooperatives,'' for
``business concern''.
Subsec. (c)(6). Pub. L. 100-590, Sec. 122, substituted
``refinancing: Provided further, That the Administration shall not
require collateral for loans of $10,000 or less which are made under
paragraph (1) of subsection (b) of this section''. for ``refinancing''.
Subsec. (c)(7). Pub. L. 100-590, Sec. 120(a), added par. (7).
Subsec. (f). Pub. L. 100-707, Sec. 109(f)(3), substituted ``section
102(2) of the Disaster Relief and Emergency Assistance Act'' for
``section 2(a) of the Act of September 30, 1950 (42 U.S.C. 1855a(a))''.
Subsec. (j)(3)(A). Pub. L. 100-656, Sec. 505(h), struck out subpar.
(A) which read as follows: ``An advisory committee composed of five
high-level officers from five United States businesses and five
representatives of minority small businesses shall be created to
facilitate the achievement of the purposes of this paragraph. The
members of the advisory committee shall be appointed by the President.
The chairman of the advisory committee, who shall be designated by the
President shall report annually to the President and to the Congress on
the activities of the advisory committee.''
Subsec. (j)(10)(A)(i). Pub. L. 100-656, Sec. 205(a), amended cl. (i)
generally. Prior to amendment, cl. (i) read as follows: ``assist small
business concerns participating in the Program to develop comprehensive
business plans with specific business targets, objectives, and goals for
correcting the impairment of such concern's ability to compete, as
determined for such concern pursuant to section 637(a)(6) of this title,
within a fixed period of time as mutually agreed upon by the applicant
and the Administrator prior to acceptance in such program: Provided,
That not less than one year prior to the expiration of such period, and
upon the request of such concern, the Administration shall review such
period and may extend such period as necessary and appropriate: Provided
further, That no determination made under this paragraph shall be
considered a denial of total participation for the purposes of section
637(a)(9) of this title;''.
Subsec. (j)(10)(C). Pub. L. 100-656, Sec. 205(b)(1), (2),
redesignated subpar. (D) as (C) and struck out former subpar. (C) which
read as follows: ``No small business concern shall receive a contract
pursuant to section 637(a) of this title unless--
``(i) the business plan required pursuant to paragraph
(10)(A)(i) is approved by the Administration; and
``(ii) the program is able to provide such concern with, but not
limited to, such management, technical and financial services as may
be necessary to achieve the targets, objectives, and goals of such
business.''
Subsec. (j)(10)(D). Pub. L. 100-656, Sec. 205(b)(2), (3), added
subpar. (D). Former subpar. (D) redesignated (C).
Pub. L. 100-656, Sec. 203, added subpar. (D).
Subsec. (j)(10)(E) to (H). Pub. L. 100-656, Sec. 208, added subpars.
(E) to (H).
Subsec. (j)(10)[(I)]. Pub. L. 100-656, Sec. 303(a), as amended by
Pub. L. 101-37, Sec. 10(a), added new subpar. without subpar.
designation, but which probably was intended to be subpar. (I). See 1989
Amendment note above.
Subsec. (j)(10)(J). Pub. L. 100-656, Sec. 206, added subpar. (J).
Subsec. (j)(11). Pub. L. 100-656, Sec. 201(a), designated existing
provisions as subpar. (A) and added subpars. (B) to (H).
Subsec. (j)(12). Pub. L. 100-656, Sec. 301(a), added par. (12).
Subsec. (j)(13). Pub. L. 100-656, Sec. 301(b), added par. (13).
Subsec. (j)(14). Pub. L. 100-656, Sec. 301(c), added par. (14).
Subsec. (j)(15). Pub. L. 100-656, Sec. 202, added par. (15).
Subsec. (j)(16). Pub. L. 100-656, Sec. 408, added par. (16).
1986--Subsec. (a)(2). Pub. L. 99-272, Sec. 18013, in subpar. (A)
substituted ``$155,000'' for ``$100,000'', in subpar. (B)(i) substituted
``$155,000'' for ``$100,000'' and ``85'' for ``90'', in proviso
following subpar. (B) substituted ``85'' for ``90'', and inserted a
second proviso relating to reduction by the Administration of its
participation below the per centum stated in this paragraph and defining
``preferred lenders program''.
Subsec. (a)(15)(B)(i). Pub. L. 99-514 substituted ``Internal Revenue
Code of 1986'' for ``Internal Revenue Code of 1954'', which for purposes
of codification was translated as ``title 26'' thus requiring no change
in text.
Subsec. (a)(16). Pub. L. 99-272, Sec. 18007, added par. (16).
Subsec. (b). Pub. L. 99-272, Sec. 18006(a)(1), in provision
preceding par. (1) substituted ``Except as to agricultural enterprises
as defined in section 647(b)(1) of this title, the,'' for ``The'',
struck out par. (3) which authorized loans, each one not to exceed
$500,000, to any small business concern to effect continuation of,
additions to, alterations in, or reestablishment in the same or a new
location of its plant, facilities, or methods or operation caused by
direct action of the Federal Government or as a consequence of Federal
Government action provided that the applicant was unable to obtain
credit elsewhere, and struck out par. (4) which authorized disaster
loans, each one not to exceed $100,000, to any small business concern
located in an area of economic dislocation that was the result of the
drastic fluctuation in the value of the currency of a country contiguous
to the United States and adjustments in the regulation of its monetary
system if such concern was unable to obtain credit elsewhere.
Subsec. (c)(4). Pub. L. 99-272, Sec. 18006(a)(2), struck out
provision following subpar. (D) which provided that loans, subject to
reductions under subpars. (A) and (B) of par. (1), be in amounts equal
to 100 percent of loss if the applicant was a homeowner and 85 percent
if the applicant was a business or otherwise, the interest rate for
loans under pars. (1) and (2) be the rate of interest in effect on the
date the disaster commenced, and the Administrator, in his discretion,
waive the $500,000 limitation on the total amount outstanding and
committed to the borrower under this subsection if the applicant
constituted a major source of employment in an area suffering a
disaster.
1984--Subsec. (b)(2). Pub. L. 98-270, Sec. 311(1), (3), substituted
in provisions preceding subpar. (A) ``small business concern or small
agricultural cooperative'' for ``small business concern'' and ``the
concern or the cooperative'' for ``the concern''.
Subsec. (b)(2)(D). Pub. L. 98-270, Sec. 311(2), substituted ``small
business concerns or small agricultural cooperatives'' for ``small
business concerns''.
Subsec. (b)(3). Pub. L. 98-270, Sec. 308, inserted ``continuation
of,'' after ``in effecting'' and inserted provision directing that, for
purposes of this paragraph, the impact of the 1983 Payment-in-Kind Land
Diversion program, or any successor Payment-in-Kind program with a
similar impact on the small business community, be deemed to be a
consequence of Federal Government action.
Subsec. (b)(4). Pub. L. 98-270, Sec. 304(2), added par. (4).
Subsec. (c). Pub. L. 98-270, Sec. 301, added undesignated par.
following par. (6).
Subsec. (c)(5). Pub. L. 98-270, Sec. 301, added par. (5).
Subsec. (c)(6). Pub. L. 98-270, Sec. 301, added par. (6).
Pub. L. 98-270, Sec. 309, inserted provision directing that
employees of concerns sharing common business premises be aggregated in
determining ``major source of employment'' status for nonprofit
applicants owning such premises.
Subsec. (d)(1). Pub. L. 98-395 substituted provisions stating that
the Administration shall not fund any Small Business Development Center
except as authorized for former provisions which prohibited such funding
only after October 1, 1980.
1981--Subsec. (a). Pub. L. 97-35, Sec. 1902, substituted provisions
empowering the Administration to the extent and in such amounts as
provided in advance in appropriation acts, for plant acquisition,
construction, conversion, or expansion, including the acquisition of
land, material, supplies, equipment, and working capital, and to make
loans to qualified small business concerns including those owned by
qualified Indian tribes, for purposes of this chapter, and that
financing may be made either directly or in cooperation with banks or
other financial institutions through agreements to participate on an
immediate or deferred basis for provisions empowering the Administration
to make loans to enable small business concerns and such concerns wholly
owned by Indian tribes to finance plant construction, conversion, or
expansion, including the acquisition of land, or to finance residential
or commercial construction or rehabilitation, for sale, with a proviso
that such loans shall not be used primarily for the acquisition of land,
or to finance the acquisition of equipment, facilities, machinery,
supplies, or materials, or to supply such concerns with working capital
to be used in the manufacture of articles, equipment, supplies, or
materials for war, defense, or civilian production or as may be
necessary to insure a well-balanced national economy, and that such
loans may be made or effected either directly or in cooperation with
banks or other lending institutions through agreements to participate on
an immediate or deferred basis.
Subsec. (a)(6)(C). Pub. L. 97-35, Sec. 1910, repealed subpar. (C)
which read as follows: ``the Administration shall not decline to
participate in a loan on a deferred basis under this subsection solely
because such loan will be used to refinance all or any part of the
existing indebtedness of a small business concern, unless the
Administration determines that--
``(i) the holder of such existing indebtedness is in a position
likely to sustain a loss if such refinancing is not provided, and
``(ii) if the Administration provides such refinancing through
an agreement to participate on a deferred basis, it will be in a
position likely to sustain part or all of any loss which would have
otherwise been sustained by the holder of the original indebtedness:
Provided further, That the Administration may decline to approve
such refinancing if it determines that the loan will not benefit the
small business concern.''
Subsec. (a)(8). Pub. L. 97-35, Sec. 1910, repealed par. (8) which
read as follows: ``(8)(A) Any loan made under the authority of this
subsection by the Administration in cooperation with a bank or other
lending institution through an agreement to participate on a deferred
basis, may, upon the concurrence of the Administration, borrower and
such bank or institution, have the term of such loan extended or such
loan refinanced with an extension of its term: Provided, That the
aggregate term of such extended or refinanced loan does not exceed the
term permitted pursuant to paragraph (5): And provided further, That
such extended loans, or refinancings shall be repaid in equal
installments of principal and interest.
``(B) An additional service fee not exceeding 1 per centum of the
outstanding amount of the principal may be paid by the borrower to the
lender in consideration for such lender extending the term or
refinancing of such borrower's indebtedness if such extension or
refinancing results in the term of such indebtedness exceeding ten
years.
``(C) The authority provided in this paragraph shall not be
construed to otherwise limit the authority of the Administration to set
terms and conditions of the loan.''
Subsec. (b)(1). Pub. L. 97-35, Sec. 1911, revised provisions to
specifically authorize loans only to repair, rehabilitate, or replace
property, real or personal, damaged or destroyed, and is not compensated
for by insurance or otherwise, and to refinance any mortgage or other
lien against a totally destroyed or substantially damaged home or
business concern upon finding that the applicant is not able to obtain
credit elsewhere, that such property is to be repaired, rehabilitated,
or replaced, that the amount refinanced shall not exceed the loss, and
that the amount shall be reduced to the extent such mortgage or lien is
satisfied by insurance or otherwise.
Subsec. (b)(2). Pub. L. 97-35, Sec. 1911, revised provisions to
continue to authorize loans to business concerns which the
Administration determines to have suffered substantial economic injury
as a result of a physical disaster as declared under certain pertinent
triggering legislation.
Subsec. (b)(3) to (9). Pub. L. 97-35, Sec. 1913(a), designated
existing provisions of par. (5) as (3) with minor changes, and struck
out pars. (3), (4), and (6) to (9) relating to non-physical disaster
loans.
Subsec. (c)(3). Pub. L. 97-35, Sec. 1914, substituted ``effective
date of this Act'' for ``to October 1, 1983''.
Subsec. (c)(4). Pub. L. 97-35, Sec. 1912, added par. (4).
Subsec. (g). Pub. L. 97-35, Sec. 1913(c), repealed subsec. (g) which
related to loans to small business concerns for water pollution control
facilities.
1980--Subsec. (a). Pub. L. 96-481, Sec. 112, inserted provisions
preceding par. (1) empowering the Administration to the extent and in
such amounts as are provided in appropriation acts to make or effect
either directly or in cooperation with banks or other lending
institutions through agreements to participate on an immediate or
deferred basis extensions and revolving lines of credit for export
purposes to enable small business concerns to develop foreign markets
and for preexport financing, with proviso limiting the extension of
credit or revolving line of credit to a period of eighteen months.
Subsec. (a)(8). Pub. L. 96-302, Sec. 505, added par. (8).
Subsec. (b). Pub. L. 96-302, Sec. 124, which directed that cl. (E),
respecting duplication of disaster benefits, be added at end of subsec.
(b), was executed by inserting cl. (E) following cl. (D) in next to last
par. of subsec. (b) as the probable intent of Congress.
Subsec. (b)(4). Pub. L. 96-302, Sec. 123, substituted ``other
causes'' for ``undetermined causes'' and made the small business concern
ineligible for loan assistance when the concern intentionally
adulterates its product in attempting to establish eligibility under the
loan assistance program.
Subsec. (b)(8). Pub. L. 96-302, Sec. 122, authorized loans to assist
small business concern affected by a shortage of coal or other energy-
producing resource caused by a strike, boycott, or embargo, unless the
strike, boycott, or embargo is directly against the small business
concern.
Subsec. (c)(3). Pub. L. 96-302, Sec. 119(a), (b), added subpar. (C)
and extended disaster loans to disasters occurring prior to Oct. 1,
1983, instead of Oct. 1, 1982.
Subsec. (d)(1). Pub. L. 96-302, Sec. 203, substituted provisions
respecting: funding of small business development centers under section
648 of this title on and after Oct. 1, 1980; operation of such centers
funded prior to Oct. 1, 1979; and prescribing $300,000 limitation for
fiscal year 1980, for such centers funded in fiscal year 1979, for
provisions respecting grants for studies research, and counseling
concerning the managing, financing, and operation of small-business
enterprises; study and research recommendation; and conditions, now
covered in section 648(a) of this title.
Subsec. (j)(10). Pub. L. 96-481, Sec. 104, in opening paragraph
substituted provision that the program and all other services and
activities authorized under this subsection and section 637(a) of this
title shall be managed by the Associate Administrator for Minority Small
Business and Capital Ownership Development under the Supervision of, and
responsible to the Administrator, for provision that the management of
the program shall be vested in the Associate Administrator for Minority
Small Business and Capital Ownership Development who shall also manage
all other services and activities authorized under this subsection and
section 637(a) of this title.
Subsec. (j)(10)(A)(i). Pub. L. 96-481, Sec. 106(a), substituted
``targets, objectives, and goals for correcting the impairment of such
concern's ability to compete, as determined for such concern pursuant to
section 637(a)(6) of this title, within a fixed period of time as
mutually agreed upon by the applicant and the Administrator prior to
acceptance in such program: Provided, That not less than one year prior
to the expiration of such period, and upon the request of such concern,
the Administration shall review such period and may extend such period
as necessary and appropriate; Provided further, That no determination
made under this paragraph shall be considered a denial of participation
for the purposes of section 637(a)(9) of this title'' for ``targets,
objectives and goals''.
Subsec. (j)(10)(C). Pub. L. 96-481, Sec. 107, in the conditions
required to receive a contract by a small business concern, substituted
provisions that the business plan be approved by the Administration and
that the program be able to provide the concern with management,
technical and financial services necessary to achieve the targets,
objectives and goals of such business, for provision that the program be
able to provide the concern with management, technical and financial
services as may be necessary to promote the competitive viability of the
concern within a reasonable period of time.
1979--Subsec. (b) following par. (9). Pub. L. 96-38 inserted ``,
except as provided in subsection (c) of this section,'' after ``the
interest rate on the Administration's share of any loan made under this
subsection'' in first unnumbered paragraph.
Subsec. (c)(3). Pub. L. 96-38 added par. (3).
1978--Subsec. (a). Pub. L. 95-507, Sec. 231, inserted provision
including small-business concerns totally owned and controlled by Indian
tribes within the scope of this section.
Subsec. (d). Pub. L. 95-315, Sec. 3, designated existing provisions
as par. (1) and added par. (2).
Subsec. (j). Pub. L. 95-507, Sec. 204, included individuals and
enterprises eligible for assistance under par. (10) of this subsection
and section 637(a) of this title among those eligible for assistance
under this section, provided for the establishment of the small business
and capital ownership development program, and provided for the
coordination of certain Federal policies under this section by the
Associate Administrator for Minority Small Business and Capital
Ownership Development.
Subsec. (k). Pub. L. 95-507, Sec. 205, inserted reference to section
637(a).
Subsec. (k)(4). Pub. L. 95-510 substituted ``the daily equivalent of
the highest rate payable under section 5332 of title 5'' for ``$100 per
diem''.
Subsec. (l). Pub. L. 95-315, Sec. 2, added subsec. (l).
1977--Subsec. (a). Pub. L. 95-89, Sec. 301, authorized loans to
finance residential or commercial construction or rehabilitation for
sale, subject to restriction that such loans be not used primarily for
the acquisition of land.
Subsec. (a)(8). Pub. L. 95-89, Sec. 101(d), repealed par. (8) which
required the Administrator to make direct loans under subsec. (a) in an
aggregate amount of not less than $400,000,000 during fiscal year ending
June 30, 1975.
Subsec. (b). Pub. L. 95-89, Sec. 405, inserted following par. (9)
provisions respecting interest rate on loans to repair or replace
primary residence and/or replace or repair damaged or destroyed personal
property, including installation of insulation in connection with any
disaster occurring on or after April 1, 1977, and transmission of a
report to congressional committees respecting the activities under the
provisions and the encouragement of such insulation installations.
Subsec. (b)(2)(C) to (E). Pub. L. 95-89, Sec. 403, added subpars.
(C) to (E).
Subsec. (b)(3). Pub. L. 95-89, Sec. 402, substituted ``program or
project constructed by or with funds provided in whole or in part by the
Federal Government or by a program or project by a State or local
government or public service entity, providing such government or public
service entity has the authority to exercise the right of eminent domain
on such program or project'' for ``federally aided urban renewal program
or a highway project or any other construction constructed by or with
funds provided in whole or in part by the Federal Government''.
Subsec. (b)(5). Pub. L. 95-89, Sec. 302, inserted ``heretofore or
hereafter enacted'' after ``any Federal law''.
Subsec. (b)(9). Pub. L. 95-89, Sec. 404, added par. (9).
Subsec. (g)(4). Pub. L. 95-89, Sec. 101(e), repealed par. (4) which
authorized appropriation of not to exceed $800,000,000 to the disaster
fund solely for purpose of carrying out subsec. (g) loans to small
business concerns for water pollution control facilities.
1976--Subsec. (a)(1). Pub. L. 94-305, Sec. 112(c), inserted
reference to non-Federal sources.
Subsec. (a)(4)(A). Pub. L. 94-305, Sec. 111, substituted ``$500,000:
Provided, That no such loan made or effected either directly or in
cooperation with banks or other lending institutions through agreements
to participate on an immediate basis shall exceed $350,000'' for
``$350,000''.
Subsec. (a)(4)(C). Pub. L. 94-305, Sec. 108(b), substituted
provision relating to a twenty year maturity period for any portion of
loan made for the purpose of acquiring real property or constructing
facilities for provision relating to a ten year maturity for portion of
loan made for purpose of constructing facilities.
Subsec. (b). Pub. L. 94-305, Sec. 114, in provisions following par.
(8), substituted provisions requiring interest rate on Administration's
share of any loan made under this subsection not to exceed the average
annual interest rate on all interest-bearing obligations of the United
States then forming a part of the public debt for provisions requiring
interest rate on Administration's share of any loan made under this
subsection not to exceed 3 per centum per annum except for loans made
under pars. (3), (5), (6), (7), or (8) in which the interest will not
exceed either 2\3/4\ per centum per annum or the average annual interest
rate of all interest-bearing obligations of the United States then
forming a part of the public debt.
Subsec. (b)(4). Pub. L. 94-305, Sec. 112(d), struck out proviso that
loans under subsec. (b)(4) of this section include loans to persons who
are engaged in business of raising livestock, and who suffer substantial
injury as a result of animal disease.
Subsec. (i)(1), (3). Pub. L. 94-305, Sec. 109, substituted
``$100,000'' for ``$50,000''.
1974--Subsec. (a)(4)(B). Pub. L. 93-386, Sec. 8, substituted
provisions for determining the rate of interest for the Administration's
share of any loan for provisions setting forth the rate of interest for
the Administration's share of any loan as not more than 5\1/2\ per
centum per annum.
Subsec. (a)(5)(B). Pub. L. 93-386, Sec. 8, substituted provisions
for determining the rate of interest for the Administration's share of
any loan for provisions setting forth the rate of interest for the
Administration's share of any loan as not less than 3 nor more than 5
per centum per annum.
Subsec. (a)(8). Pub. L. 93-386, Sec. 12, added par. (8).
Subsec. (b)(4). Pub. L. 93-237, Sec. 5, inserted proviso that loans
under this paragraph include loans to persons who are engaged in the
business of raising livestock and who suffer substantial economic injury
as a result of animal disease.
Subsec. (b)(5) to (7). Pub. L. 93-237, Secs. 2(a), (b), 6,
consolidated into a single par. (5) the authority of the Small Business
Administration contained in former par. (5) to make loans to small
business concerns to meet the requirements of the Federal Coal Mine
Health and Safety Act of 1969, the Egg Products Inspection Act, the
Wholesome Poultry Products Act, and the Wholesome Meat Act, and former
par. (6) to make loans to small business concerns to meet the
requirements of the Occupational Safety and Health Act of 1970, expanded
such authority to finance structural, operational, or other changes
required in order to meet standards imposed by Federal laws, or by State
laws enacted in conformity with Federal laws, redesignated former par.
(7) as par. (6), and added par. (7).
Subsec. (b)(8). Pub. L. 93-386, Sec. 9(a), added par. (8).
Subsec. (b). Pub. L. 93-386, Sec. 9(b), substituted ``paragraph (3),
(5), (6), (7), or (8)'' for ``paragraph (3), (5), (6), or (7)'' in first
par. following the numbered pars.
Subsecs. (g), (h). Pub. L. 93-237, Sec. 3(a), redesignated subsec.
(g), relating to loans to handicapped persons and organizations for
handicapped, as (h).
Subsec. (h)(2). Pub. L. 93-386, Sec. 3(2), inserted ``The
Administration's share of'' before ``any loan''.
Subsecs. (i) to (k). Pub. L. 93-386, Sec. 2(a)(4), added subsecs.
(i) to (k).
1972--Subsec. (b). Pub. L. 92-385 added par. (7), and in text
following the numbered paragraphs, inserted provisions relating to the
administration of the disaster loan program in relation to disasters
occurring between January 1, 1971, and July 1, 1973.
Subsec. (g). Pub. L. 92-595 added subsec. (g) relating to loans to
handicapped persons and organizations for handicapped.
Pub. L. 92-500 added subsec. (g) relating to loans to small business
concerns for water pollution control facilities.
1970--Subsec. (b). Pub. L. 91-597 added par. (5) relating to loans
for additions or alterations required under the Egg Products Inspection
Act, etc., and inserted reference to such par. (5).
Pub. L. 91-596 added par. (6) and inserted reference to par. (6)
after reference to par. (5).
1969--Subsec. (b). Pub. L. 91-173 added par. (5), and inserted
reference to par. (5) after reference to par. (3).
1968--Subsec. (b)(1). Pub. L. 90-448 empowered the Administration to
make loans because of riots or civil disorders.
Subsec. (b)(3). Pub. L. 90-495 added continuing in business at its
existing location, purchasing a business, and establishing a new
business to the list of purposes for which loans may be made, and
extended the causes of substantial economic injury of the concern
involved to include its location in, adjacent to, or near a federally
aided urban renewal program, highway project, or other construction
project using federal funds.
1967--Subsec. (a)(4). Pub. L. 90-104, Sec. 103, extended maturity
date for construction loans from ten to fifteen years.
Subsec. (f). Pub. L. 90-104, Sec. 104, redesignated subsec. (e),
added by Pub. L. 89-769, as (f).
1966--Subsec. (e). Pub. L. 89-409 added subsec. (e).
Pub. L. 89-769 added subsec. (e) which provided for assistance to
privately owned higher education in major disaster areas and repayment.
1965--Subsec. (b). Pub. L. 89-59, Sec. 1(a), increased the maturity
of disaster loans from twenty to thirty years, and authorized suspension
of principal and interest payments and extension of date of maturity for
five year period.
Subsec. (c). Pub. L. 89-59, Sec. 1(b), designated existing
provisions as par. (1) and added par. (2).
1964--Subsecs. (b)(2), (4). Pub. L. 88-264 extended provisions of
par. (2) to any small business affected by disasters other than drought
or excessive rainfall and added par. (4) for disaster loans to any such
business suffering economic injuries through natural or undetermined
causes.
Subsec. (b)(3). Pub. L. 88-560 provided that the purposes of a loan
under this paragraph may include the purchase or construction of other
premises whether or not the borrower owned the premises from which it
was displaced.
1961--Subsec. (b). Pub. L. 87-70 added par. (3), and inserted
provisions limiting the interest rate in the case of loans made pursuant
to par. (3) to not more than the higher of (A) 2\3/4\ per centum per
annum, or (B) the average annual interest rate on all interest-bearing
obligations forming a part of the public debt as computed at the end of
the fiscal year next preceding the date of the loan and adjusted to the
nearest one-eighth of 1 per centum, plus one-quarter of 1 per centum per
annum.
Subsec. (d). Pub. L. 87-305 empowered the Administration to make
grants to any corporation formed by two or more eligible entities
described in the text, authorized it to recommend to grant applicants
particular studies or research, eliminated the limitation of one grant
to a State, and conditioned grants to the procurement of additional
amounts from sources other than the Administration.
1959--Subsec. (d). Pub. L. 86-367 struck out provision for making
the grants from the fund established in the Treasury by section 602(b)
of the Small Business Investment Act of 1958.
1958--Subsec. (d). Pub. L. 85-699 added subsec. (d).
Effective Date of 2001 Amendment
Amendment by Pub. L. 107-100 effective Oct. 1, 2002, see section
6(e) of Pub. L. 107-100, set out in an Effective Date of 2001 Amendment;
Use of Funds note under section 697 of this title.
Effective and Termination Dates of 1999 Amendments
Pub. L. 106-50, title IV, Sec. 402(e), Aug. 17, 1999, 113 Stat. 246,
provided that:
``(1) In general.--Except as provided in paragraph (2), the
amendments made by this section [amending this section] shall take
effect on the date of the enactment of this section [Aug. 17, 1999].
``(2) Disaster loans.--The amendments made by subsection (b)
[amending this section] shall apply to economic injury suffered or
likely to be suffered as the result of a period of military conflict
occurring or ending on or after March 24, 1999.''
Pub. L. 106-8, Sec. 3(c), Apr. 2, 1999, 113 Stat. 16, provided that
effective Dec. 31, 2000, this section (amending this section and
enacting provisions set out as a note under this section) and the
amendments made by this section are repealed.
Effective Date of 1998 Amendment
Amendment by section 101(f) [title VIII, Sec. 405(d)(10)] of Pub. L.
105-277 effective Oct. 21, 1998, and amendment by section 101(f) [title
VIII, Sec. 405(f)(9)] of Pub. L. 105-277 effective July 1, 2000, see
section 101(f) [title VIII, Sec. 405(g)(1), (2)(B)] of Pub. L. 105-277,
set out as a note under section 3502 of Title 5, Government Organization
and Employees.
Effective Date of 1997 Amendment
Amendment by Pub. L. 105-135 effective on Oct. 1, 1997, see section
3 of Pub. L. 105-135, set out as a note under section 631 of this title.
Effective Date of 1996 Amendment
Amendment by Pub. L. 104-208 effective Oct. 1, 1996, see section 3
of Pub. L. 104-208, set out as a note under section 633 of this title.
Effective Date of 1995 Amendment
Amendment by Pub. L. 104-36 inapplicable to loans made or guaranteed
under Small Business Act or Small Business Investment Act of 1958 before
Oct. 12, 1995, unless such loans are refinanced, extended, restructured,
or renewed on or after Oct. 12, 1995, see section 8 of Pub. L. 104-36,
set out as a note under section 634 of this title.
Effective and Termination Dates of 1994 Amendment
Section 208(c) of Pub. L. 103-403 provided that: ``The amendments
made by this section [amending this section] shall remain in effect
during the period beginning on the date of enactment of this Act [Oct.
22, 1994] and ending on October 1, 1997.''
Effective Date of 1993 Amendment
Section 5(b) of Pub. L. 103-81 provided that: ``Notwithstanding any
other provision of law, the amendments made by subsection (a) [amending
this section] shall be effective September 1, 1993, but shall not be
applicable to loan guarantee applications received by the Administration
prior to August 21, 1993. In order to determine the percent of the loan
to be guaranteed pursuant to the amendments made by subsection (a), the
Administration shall aggregate the outstanding guaranteed principal of
multiple loan guarantees issued on behalf of the same borrower.''
Effective Date of 1992 Amendment
Section 113(b) of Pub. L. 102-366 provided that: ``The amendments
made by paragraphs (4) and (5) of subsection (a) [amending this section]
shall become effective on October 1, 1992.''
Effective Date of 1989 Amendment
Amendment by Pub. L. 101-37 applicable as if included in Pub. L.
100-656, see section 32 of Pub. L. 101-37, set out as a note under
section 631 of this title.
Effective Date of 1988 Amendments
Amendments by sections 202, 203, 206, 301(a), 408, and 505(h) of
Pub. L. 100-656 and subsec. (j)(13)(G) and (I) of this section as added
by section 301(b) of Pub. L. 100-656, effective Nov. 15, 1988, see
section 803(a) of Pub. L. 100-656, set out as a note under section 631
of this title.
Amendments by sections 201(a), 205, 208, 301(b), (c), and 303(a) of
Pub. L. 100-656 effective Aug. 15, 1989, see section 803(b)(1)(A), (B)
of Pub. L. 100-656, as amended, set out as a note under section 631 of
this title.
Amendment by section 302 of Pub. L. 100-656 effective June 1, 1989,
see section 803(b)(2) of Pub. L. 100-656, as amended, set out as a note
under section 631 of this title.
Subsection (j)(13)(E) of this section as added by section 301(b) of
Pub. L. 100-656 effective Oct. 1, 1989, see section 803(b)(4)(D) of Pub.
L. 100-656, as amended, set out as a note under section 631 of this
title.
Amendments by sections 119(a) and 120 to 122 of Pub. L. 100-590
effective for all loan applications resulting from disaster declarations
made on or after Aug. 1, 1988, or from disaster declarations whose
filing periods were open on Oct. 1, 1988, see section 137 of Pub. L.
100-590, set out as a note under section 631 of this title.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98-270 effective Oct. 1, 1983, see section 313
of Pub. L. 98-270, set out as a note under section 632 of this title.
Section 307 of Pub. L. 98-270 provided that: ``The amendments made
by sections 304 and 305 of this title [amending this section and
provisions set out as a note under section 631 of this title] shall
apply to economic dislocations certified by any State Governor to the
Small Business Administration after the date of enactment of this Act
[Apr. 18, 1984] providing such dislocation commenced since January 1,
1982.''
Amendment by section 311 of Pub. L. 98-270 applicable to loans
granted on the basis of any disaster with respect to which a declaration
has been issued after Sept. 1, 1982, under subsec. (b)(2)(A), (B), or
(C) of this section or with respect to which a certification has been
made after such date under subsec. (b)(2)(D) of this section, see
section 312 of Pub. L. 98-270, set out as a note under section 632 of
this title.
Effective Date of 1981 Amendment
Section 1910 of Pub. L. 97-35 provided that the repeal of subsec.
(a)(6)(C), (8) of this section is effective Oct. 1, 1985.
Amendment by section 1913 of Pub. L. 97-35 effective Oct. 1, 1981,
amendments by sections 1902, 1911, 1912, and 1914 of Pub. L. 97-35
effective Aug. 13, 1981, but shall not affect any financing made,
obligated, or committed under this chapter or chapter 14B of this title
prior to Aug. 13, 1981, see section 1918 of Pub. L. 97-35, set out as a
note under section 631 of this title.
Effective Date of 1980 Amendment
Amendment by Pub. L. 96-302 effective Oct. 1, 1980, see section 507
of Pub. L. 96-302, set out as a note under section 631 of this title.
Section 119(d) of Pub. L. 96-302 provided that: ``The amendments
made by this section to sections 7(c)(3)(C) [subsection (c)(3) of this
section] and 18 [section 647 of this title] of the Small Business Act
shall not apply to any disaster which commenced on or before the
effective date of this Act.''
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-510 effective Oct. 1, 1979, see section 105
of Pub. L. 95-510, set out as a note under section 634 of this title.
Effective Date of 1977 Amendment
Amendment by section 101(d), (e) of Pub. L. 95-89 effective Oct. 1,
1977, see section 106 of Pub. L. 95-89, set out as a note under section
633 of this title.
Effective Date of 1972 Amendment
Section 1(b) of Pub. L. 92-385 provided that: ``The last paragraph
of the amendment made by subsection (a) [amending this section] shall
apply only with respect to loans made on or after the date of enactment
of this Act [Aug. 16, 1972].''
Effective Date of 1970 Amendments
For effective date of amendment by Pub. L. 91-597 see section 29 of
Pub. L. 91-597, set out as a note under section 1031 of Title 21, Food
and Drugs.
Amendment by Pub. L. 91-596 effective 120 days after Dec. 29, 1970,
see section 34 of Pub. L. 91-596, set out as a note under section 651 of
Title 29, Labor.
Effective Date of 1968 Amendment
Amendment by Pub. L. 90-495 effective Aug. 23, 1968, see section 37
of Pub. L. 90-495, set out as a note under section 101 of Title 23,
Highways.
Effective Date of 1966 Amendment
Section 3(c) of Pub. L. 89-409 provided that: ``This section
[amending this section, repealing section 637a of this title, and
enacting provisions set out as a note under section 633 of this title]
shall take effect on July 1, 1966.''
Regulations
Pub. L. 106-50, title IV, Sec. 402(d), Aug. 17, 1999, 113 Stat. 246,
provided that: ``Not later than 30 days after the date of the enactment
of this section [Aug. 17, 1999], the Administrator of the Small Business
Administration shall issue such guidelines as the Administrator
determines to be necessary to carry out this section [amending this
section and enacting provisions set out as notes under this section] and
the amendments made by this section.''
Pub. L. 106-8, Sec. 3(b), Apr. 2, 1999, 113 Stat. 15, which provided
that not later than 30 days after Apr. 2, 1999, Administrator of the
Small Business Administration was to issue guidelines to carry out the
program under former subsec. (a)(27) of this section, was repealed by
Pub. L. 106-8, Sec. 3(c), Apr. 2, 1999, 113 Stat. 16, effective Dec. 31,
2000.
Section 114 of Pub. L. 102-366 provided that: ``Not later than 45
days after the date of enactment of this Act [Sept. 4, 1992], the Small
Business Administration shall promulgate interim final regulations to
implement the amendments made by this subtitle [subtitle B (Secs. 111-
115) of title I of Pub. L. 102-366, amending this section, enacting
provisions set out as notes below, and amending provisions set out as a
note under section 631 of this title].''
Section 609(i) of Pub. L. 102-140 provided that: ``Not later than 90
days after the date of the enactment of this Act [Oct. 28, 1991], the
Small Business Administration shall promulgate interim final regulations
to implement the microloan demonstration program.''
Section 801 of Pub. L. 100-656, as amended by Pub. L. 101-37,
Sec. 30, June 15, 1989, 103 Stat. 76, provided that: ``The Small
Business Administration shall--
``(1) within 60 days after the date of enactment of this Act
[Nov. 15, 1988] conduct meetings of present and potential
participants in the program established by section 7(j)(10) of the
Small Business Act [15 U.S.C. 636(j)(10)], as amended by this Act,
to ascertain and consider public comment on the nature and extent of
regulations needed to implement this Act [see Short Title of 1988
Amendment note set out under section 631 of this title];
``(2) within one hundred and twenty days after the date of
enactment of this Act, publish in the Federal Register proposed
rules and regulations implementing this Act; and
``(3) within 270 days after the date of enactment of this Act,
publish in the Federal Register final rules and regulations
implementing this Act.''
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions of law
requiring submittal to Congress of any annual, semiannual, or other
regular periodic report listed in House Document No. 103-7 (in which
reports required under subsections (a)(15)(E) and (j)(16)(B) of this
section are listed on page 191), see section 3003 of Pub. L. 104-66, as
amended, set out as a note under section 1113 of Title 31, Money and
Finance.
Transfer of Functions
For transfer of functions, personnel, assets, and liabilities of the
Federal Emergency Management Agency, including the functions of the
Director of the Federal Emergency Management Agency relating thereto, to
the Secretary of Homeland Security, and for treatment of related
references, see sections 313(1), 551(d), 552(d), and 557 of Title 6,
Domestic Security, and the Department of Homeland Security
Reorganization Plan of November 25, 2002, as modified, set out as a note
under section 542 of Title 6.
Budgetary Treatment of Loans and Financings
Pub. L. 107-100, Sec. 6(c), Dec. 21, 2001, 115 Stat. 971, provided
that: ``Assistance made available under any loan made or approved by the
Small Business Administration under section 7(a) of the Small Business
Act (15 U.S.C. 636(a)) or financings made under title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.), during the 2-
year period beginning on October 1, 2002, shall be treated as separate
programs of the Small Business Administration for purposes of the
Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.] only.''
Enhanced Publicity During Operation Allied Force
Pub. L. 106-50, title IV, Sec. 402(c), Aug. 17, 1999, 113 Stat. 246,
provided that: ``For the duration of Operation Allied Force and for 120
days thereafter, the Administration shall enhance its publicity of the
availability of assistance provided pursuant to the amendments made by
this section [amending this section], including information regarding
the appropriate local office at which affected small businesses may seek
such assistance.''
Evaluation of Predisaster Mitigation Pilot Program
Pub. L. 106-24, Sec. 1(c), Apr. 27, 1999, 113 Stat. 39, provided
that: ``On January 31, 2003, the Administrator of the Small Business
Administration shall submit to the Committees on Small Business of the
House of Representatives and the Senate a report on the effectiveness of
the pilot program authorized by section 7(b)(1)(C) of the Small Business
Act (15 U.S.C. 636(b)(1)(C)), as added by subsection (a) of this
section, which report shall include--
``(1) information relating to--
``(A) the areas served under the pilot program;
``(B) the number and dollar value of loans made under the
pilot program; and
``(C) the estimated savings to the Federal Government
resulting from the pilot program; and
``(2) such other information as the Administrator determines to
be appropriate for evaluating the pilot program.''
Congressional Findings Regarding Small Business Year 2000 Readiness
Pub. L. 106-8, Sec. 2, Apr. 2, 1999, 113 Stat. 13, provided that:
``Congress finds that--
``(1) the failure of many computer programs to recognize the
Year 2000 may have extreme negative financial consequences in the
Year 2000, and in subsequent years for both large and small
businesses;
``(2) small businesses are well behind larger businesses in
implementing corrective changes to their automated systems;
``(3) many small businesses do not have access to capital to fix
mission critical automated systems, which could result in severe
financial distress or failure for small businesses; and
``(4) the failure of a large number of small businesses due to
the Year 2000 computer problem would have a highly detrimental
effect on the economy in the Year 2000 and in subsequent years.''
Transfer of Funds
Section 202(b) of Pub. L. 105-135 provided that:
``(1) In general.--No funds are authorized to be appropriated or
otherwise provided to carry out the grant program under section
7(m)(4)(F) of the Small Business Act (15 U.S.C. 636(m)(4)(F)) (as added
by this section), except by transfer from another department or agency
of the Federal Government to the Administration in accordance with this
subsection.
``(2) Limitation on amounts.--The total amount transferred to the
Administration from other departments and agencies of the Federal
Government to carry out the grant program under section 7(m)(4)(F) of
the Small Business Act (15 U.S.C. 636(m)(4)(F)) (as added by this
section) shall not exceed--
``(A) $3,000,000 for fiscal year 1998;
``(B) $4,000,000 for fiscal year 1999; and
``(C) $5,000,000 for fiscal year 2000.''
Defense Loan and Technical Assistance Program
Section 507 of Pub. L. 105-135 provided that:
``(a) DELTA Program Authorized.--
``(1) In general.--The Administrator may administer the Defense
Loan and Technical Assistance program in accordance with the
authority and requirements of this section.
``(2) Expiration of authority.--The authority of the
Administrator to carry out the DELTA program under paragraph (1)
shall terminate when the funds referred to in subsection (g)(1) have
been expended.
``(3) DELTA program defined.--In this section, the terms
`Defense Loan and Technical Assistance program' and `DELTA program'
mean the Defense Loan and Technical Assistance program that has been
established by a memorandum of understanding entered into by the
Administrator and the Secretary of Defense on June 26, 1995.
``(b) Assistance.--
``(1) Authority.--Under the DELTA program, the Administrator may
assist small business concerns that are economically dependent on
defense expenditures to acquire dual-use capabilities.
``(2) Forms of assistance.--Forms of assistance authorized under
paragraph (1) are as follows:
``(A) Loan guarantees.--Loan guarantees under the terms and
conditions specified under this section and other applicable
law.
``(B) Nonfinancial assistance.--Other forms of assistance
that are not financial.
``(c) Administration of Program.--In the administration of the DELTA
program under this section, the Administrator shall--
``(1) process applications for DELTA program loan guarantees;
``(2) guarantee repayment of the resulting loans in accordance
with this section; and
``(3) take such other actions as are necessary to administer the
program.
``(d) Selection and Eligibility Requirements for DELTA Loan
Guarantees.--
``(1) In general.--The selection criteria and eligibility
requirements set forth in this subsection shall be applied in the
selection of small business concerns to receive loan guarantees
under the DELTA program.
``(2) Selection criteria.--The criteria used for the selection
of a small business concern to receive a loan guarantee under this
section are as follows:
``(A) The selection criteria established under the
memorandum of understanding referred to in subsection (a)(3).
``(B) The extent to which the loans to be guaranteed would
support the retention of defense workers whose employment would
otherwise be permanently or temporarily terminated as a result
of reductions in expenditures by the United States for defense,
the termination or cancellation of a defense contract, the
failure to proceed with an approved major weapon system, the
merger or consolidation of the operations of a defense
contractor, or the closure or realignment of a military
installation.
``(C) The extent to which the loans to be guaranteed would
stimulate job creation and new economic activities in
communities most adversely affected by reductions in
expenditures by the United States for defense, the termination
or cancellation of a defense contract, the failure to proceed
with an approved major weapon system, the merger or
consolidation of the operations of a defense contractor, or the
closure or realignment of a military installation.
``(D) The extent to which the loans to be guaranteed would
be used to acquire (or permit the use of other funds to acquire)
capital equipment to modernize or expand the facilities of the
borrower to enable the borrower to remain in the national
technology and industrial base available to the Department of
Defense.
``(3) Eligibility requirements.--To be eligible for a loan
guarantee under the DELTA program, a borrower must demonstrate to
the satisfaction of the Administrator that, during any 1 of the 5
preceding operating years of the borrower, not less than 25 percent
of the value of the borrower's sales were derived from--
``(A) contracts with the Department of Defense or the
defense-related activities of the Department of Energy; or
``(B) subcontracts in support of defense-related prime
contracts.
``(e) Maximum Amount of Loan Principal.--With respect to each
borrower, the maximum amount of loan principal for which the
Administrator may provide a guarantee under this section during a fiscal
year may not exceed $1,250,000.
``(f) Loan Guaranty Rate.--The maximum allowable guarantee
percentage for loans guaranteed under this section may not exceed 80
percent.
``(g) Funding.--
``(1) In general.--The funds that have been made available for
loan guarantees under the DELTA program and have been transferred
from the Department of Defense to the Small Business Administration
before the date of the enactment of this Act [Dec. 2, 1997] shall be
used for carrying out the DELTA program under this section.
``(2) Continued availability of existing funds.--The funds made
available under the second proviso under the heading `Research,
Development, Test and Evaluation, Defense-Wide' in Public Law 103-
335 (108 Stat. 2613) shall be available until expended--
``(A) to cover the costs (as defined in section 502(5) of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) of
loan guarantees issued under this section; and
``(B) to cover the reasonable costs of the administration of
the loan guarantees.''
Trade Assistance Program for Small Business Concerns Adversely Affected
by NAFTA
Section 509 of Pub. L. 105-135 provided that: ``The Administrator
shall coordinate Federal assistance in order to provide counseling to
small business concerns adversely affected by the North American Free
Trade Agreement.''
Private Sector Loan Servicing Demonstration Program
Section 104(a) of div. D of Pub. L. 104-208 provided that:
``(1) In general.--
``(A) Demonstration program required.--Notwithstanding any other
provision of law, the Administration shall conduct a demonstration
program, within the parameters described in paragraph (2), to
evaluate the comparative costs and benefits of having the
Administration's portfolio of disaster loans serviced under contract
rather than directly by employees of the Administration. All costs
of the demonstration program shall be paid from amounts made
available for the Salaries and Expenses Account of the
Administration.
``(B) Initiation date.--Not later than 90 days after the date of
enactment of this Act [Sept. 30, 1996], the Administration shall
issue a request for proposals for the program parameters described
in paragraph (2).
``(2) Demonstration program parameters.--
``(A) Loan sample.--The sample of loans for the demonstration
program shall be randomly drawn from the Administration's portfolio
of loans made pursuant to section 7(b) of the Small Business Act [15
U.S.C. 636(b)] and shall include a representative group of not less
than 30 percent of all loans for residential properties, including
30 percent of all loans made during the demonstration program after
the date of enactment of this Act, which loans shall be selected by
the Administration on the basis of geographic distribution and such
other factors as the Administration determines to be appropriate.
``(B) Contract and options.--The Administration shall solicit
and competitively award one or more contracts to service the loans
included in the sample of loans described in subparagraph (A) for a
term of not less than one year, with 3 one-year contract renewal
options, each of which shall be exercised by the Administration
unless the Administration terminates the contractor or contractors
for good cause.
``(3) Term of demonstration program.--The demonstration program
shall commence not later than October 1, 1997.
``(4) Reports.--
``(A) Interim reports.--Not later than 120 days before the
expiration of the initial 4-year contract performance period, the
Administrator shall submit to the Committees on Small Business of
the House of Representatives and the Senate an interim report on the
conduct of the demonstration program. The contractor shall be
afforded a reasonable opportunity to attach comments to each such
report.
``(B) Final report.--Not later than 120 days after the
termination of the demonstration program, the Administrator shall
submit to the Committees on Small Business of the House of
Representatives and the Senate a final report on the performance of
the demonstration program, together with the recommendations of the
Administrator for continuation, termination, or modification of the
demonstration program.''
Increase of Amounts for Disaster Loans
Pub. L. 103-75, Aug. 12, 1993, 107 Stat. 740, provided in part:
``That notwithstanding any other provision of law, the $500,000
limitation on the amounts outstanding and committed to a borrower
provided in paragraph 7(c)(6) of the Small Business Act [15 U.S.C.
636(c)(6)] shall be increased to $1,500,000 for disasters commencing on
or after April 1, 1993.''
Congressional Findings of Microlending Expansion Act of 1992
Section 112 of Pub. L. 102-366 provided that: ``The Congress finds
that--
``(1) nationwide, there are many individuals who possess skills
that, with certain short-term assistance, could enable them to
become successfully self-employed;
``(2) many talented and skilled individuals who are employed in
low-wage occupations could, with sufficient opportunity, start their
own small business concerns, which could provide them with an
improved standard of living;
``(3) most such individuals have little or no savings, a
nonexistent or poor credit history, and no access to credit or
capital with which to start a business venture;
``(4) women, minorities, and individuals residing in areas of
high unemployment and high levels of poverty have particular
difficulty obtaining access to credit or capital;
``(5) providing such individuals with small-scale, short-term
financial assistance in the form of microloans, together with
intensive marketing, management, and technical assistance, could
enable them to start or maintain small businesses, to become self-
sufficient, and to raise their standard of living;
``(6) banking institutions are reluctant to provide such
assistance because of the administrative costs associated with
processing and servicing the loans and because they lack experience
in providing the type of marketing, management, and technical
assistance needed by such borrowers;
``(7) many organizations that have had successful experiences in
providing microloans and marketing, management, and technical
assistance to such borrowers exist throughout the Nation; and
``(8) loans from the Federal Government to intermediaries for
the purpose of relending to start-up, newly established and growing
small business concerns are an important catalyst to attract private
sector participation in microlending.''
Disadvantaged Small Business Status Decisions
Section 221 of Pub. L. 102-366 provided that:
``(a) Publication of Decisions.--A decision issued pursuant to
section 7(j)(11)(F)(vii) of the Small Business Act (15 U.S.C.
636(j)(11)(F)(vii)) shall--
``(1) be made available to the protestor, the protested party,
the contracting officer (if not the protestor), and all other
parties to the proceeding, and published in full text; and
``(2) include findings of fact and conclusions of law, with
specific reasons supporting such findings or conclusions, upon each
material issue of fact and law of decisional significance regarding
the disposition of the protest.
``(b) Precedential Value of Prior Decisions.--A decision issued
under section 7(j)(11)(F)(vii) of the Small Business Act that is issued
prior to the date of enactment of this Act [Sept. 4, 1992] shall not
have value as precedent in deciding any subsequent protest until such
time as the decision is published in full text.''
Reauthorization of Bond Waiver Test Program
Pub. L. 102-190, div. A, title VIII, Sec. 813(a)-(e), Dec. 5, 1991,
105 Stat. 1424, provided that:
``(a) Authority.--(1) In the award of construction contracts by the
Department of Defense to participants in the Minority Small Business and
Capital Ownership Development Program of the Small Business
Administration, the Secretary of Defense may exercise the authority to
grant surety bond exemptions to such participants provided by section
7(j)(13)(D) of the Small Business Act (15 U.S.C. 636(j)(13)(D)). In any
case in which the Secretary exercises such authority, the Secretary may
award a construction contract directly to a participant in such program,
without approval by or consultation with the Small Business
Administration.
``(2) In exercising the authority provided by paragraph (1), the
Secretary of Defense shall make every reasonable effort to award not
fewer than 30 contracts for construction projects (including repair and
alteration of existing facilities) during each fiscal year.
``(b) Delegation of Authority.--The Secretary of Defense shall
delegate to one or more Secretaries of a military department the
authority provided by subsection (a)(1).
``(c) No Right of Action Against the United States.--A dispute
between a contractor granted a surety bond exemption pursuant to section
7(j)(13)(D) of the Small Business Act and a subcontractor at any tier or
a supplier of such contractor relating to the amount or entitlement of a
payment due such subcontractor or supplier does not constitute a dispute
to which the United States is a party. The United States may not be
interpleaded in any judicial or administrative proceeding involving such
a dispute.
``(d) Regulations.--The Secretary of Defense shall prescribe final
regulations and procedures for exercising the authority provided in this
section not later than 270 days after the date of the enactment of this
Act [Dec. 5, 1991].
``(e) Program Duration.--The authority provided by this section
shall apply to contracts awarded before October 1, 1994.''
Emergency Direct Loans for Small Business Concerns Located in
Communities Adversely Affected by Troop Deployments During Persian Gulf
Conflict
Pub. L. 102-190, div. A, title X, Sec. 1087, Dec. 5, 1991, 105 Stat.
1483, authorized emergency direct loans to small business concerns
located in counties in which at least 5 small business concerns suffered
severe economic injury resulting from deployment, after July 31, 1990,
of troops in connection with Persian Gulf conflict, provided that loan
amounts could not exceed $50,000 to any small business concern, and
provided for source of loan funds, applications for loans, definitions,
regulations to implement loan program, and expiration of loan authority
at end of 270-day period beginning on date on which loan applications
were first accepted.
Termination of Microloan Demonstration Program
Section 609(j) of Pub. L. 102-140, as amended by Pub. L. 103-403,
title II, Sec. 203, Oct. 22, 1994, 108 Stat. 4181, provided that: ``The
demonstration program established by subsection (h) [amending this
section] shall terminate on October 1, 1997.''
References in Other Laws to GS-16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS-16, 17, or 18, or to
maximum rates of pay under the General Schedule, to be considered
references to rates payable under specified sections of Title 5,
Government Organization and Employees, see section 529 [title I,
Sec. 101(c)(1)] of Pub. L. 101-509, set out in a note under section 5376
of Title 5.
Test Program for Use of Bond Waiver Authority To Assist Certain Small
Disadvantaged Business Concerns
Pub. L. 101-189, div. A, title VIII, Sec. 833, Nov. 29, 1989, 103
Stat. 1509, which directed Secretary of Defense and Small Business
Administration to establish a program for fiscal years 1990 and 1991 to
test use of authority provided by subsec. (j)(13)(D) of this section,
and that under the test program, the Secretary of Defense was to make
every reasonable effort during each such fiscal year to award not less
than 30 contracts for construction projects (including repair and
alteration of existing facilities) to participants in Minority Small
Business and Capital Ownership Development Program of Small Business
Administration granted surety bond exemptions under such authority, was
repealed by Pub. L. 102-190, div. A, title VIII, Sec. 813(f), Dec. 5,
1991, 105 Stat. 1424.
Definition of Terms Used in Pub. L. 100-656
Section 2 of Pub. L. 100-656, as amended by Pub. L. 101-37, Sec. 3,
June 15, 1989, 103 Stat. 70, provided that: ``For the purposes of this
Act [see Short Title of 1988 Amendment note set out under section 631 of
this title]--
``(1) the term `Administration' means the Small Business
Administration;
``(2) the term `Administrator' means the Administrator of the
Small Business Administration, unless otherwise indicated;
``(3) the term `Business Opportunity Specialist' means the
Administration employee responsible for providing business
development assistance to Program Participants pursuant to sections
7(j) and 8(a) of the Small Business Act (15 U.S.C. 636(j), 637(a));
``(4) the term `disadvantaged owners' means those individuals
upon whom eligibility is based for participation in the Program and
the award of subcontracts pursuant to section 8(a) of the Small
Business Act (15 U.S.C. 637(a));
``(5) the term `minority owned businesses' means business
concerns that are at least 51 percent owned and controlled by one or
more individuals who belong to those groups described or identified
pursuant to section 2(e)(1)(C) of the Small Business Act (15 U.S.C.
631(e)(1)(C));
``(6) the term `Program' means the Minority Small Business and
Capital Ownership Development Program established by section
7(j)(10) of the Small Business Act (15 U.S.C. 636(j)(10)), unless
otherwise indicated;
``(7) the term `Program Participant' means a small business
concern participating in the Program; and
``(8) the term `Program Participation Term' means the fixed
period of time assigned to a Program Participant pursuant to section
7(j)(10)(A)(i) of the Small Business Act (15 U.S.C.
636(j)(10)(A)(i)) prior to the date of enactment of this Act [Nov.
15, 1988].''
Congressional Findings and Declaration of Purposes of Pub. L. 100-656
Section 101 of Pub. L. 100-656 provided that:
``(a) Findings.--The Congress finds that--
``(1) the Capital Ownership Development Program administered by
the Small Business Administration and the award of contracts
pursuant to section 8(a) of the Small Business Act [15 U.S.C.
637(a)] remain a primary tool for improving opportunities for small
business concerns owned and controlled by socially and economically
disadvantaged individuals in the Federal procurement process and
bringing such concerns into the nation's economic mainstream;
``(2) although some progress has resulted from the Program, it
has generally failed to meet its objectives, which remain as valid
now as when the Program was initiated;
``(3) too few concerns that have exited the Program have been
prepared to compete successfully in the open marketplace on
competitive procurements, and many concerns have developed an
unhealthy dependency on sole-source contracts by the time they are
required to leave the Program;
``(4) the application and certification process for admitting
new participants to the Program is inordinately lengthy and
burdensome;
``(5) the Administration has often not efficiently and equitably
administered and managed the Program in a manner that provided clear
lines of responsibility for implementing and monitoring many of the
administrative duties under the Program;
``(6) the Administration and some program participants have
given insufficient attention and support to the business development
goals of the Program and instead have focused almost entirely on the
size of contract awards or the number of firms certified to
participate in the Program;
``(7) many Federal procuring agencies have failed to identify
and offer the necessary amount of contract support in order to allow
for diversification and growth of disadvantaged businesses
participating in the Program;
``(8) contract support as well as business development expenses
have been misused both by the Administration and Program
participants and have not been equitably distributed pursuant to
objective criteria;
``(9) the widespread perception of undue political influence in
the operation and administration of the Program has significantly
contributed to the Program's poor image and has deterred utilization
of the Program by socially and economically disadvantaged concerns
and by Federal procuring agencies; and
``(10) it is imperative that increased competition and other
substantial reforms be accomplished in the Program in order to
promote the Congressionally mandated business development objectives
and purposes.
``(b) Purposes.--The purposes of this Act [see Short Title of 1988
Amendment note set out under section 631 of this title] therefore are
to--
``(1) affirm that the Capital Ownership Development Program and
the section 8(a) [15 U.S.C. 637(a)] authority shall be used
exclusively for business development purposes to help small
businesses owned and controlled by the socially and economically
disadvantaged to compete on an equal basis in the mainstream of the
American economy;
``(2) affirm that the measure of success of the Capital
Ownership Development Program, and the section 8(a) authority, shall
be the number of competitive firms that exit the Program without
being unreasonably reliant on section 8(a) contracts and that are
able to compete on an equal basis in the mainstream of the American
economy;
``(3) ensure that program benefits accrue to individuals who are
both socially and economically disadvantaged;
``(4) increase the number of small businesses owned and
controlled by such individuals from which the United States may
purchase products and services (including construction work); and
``(5) ensure integrity, competence, and efficiency in the
administration of business development services and the Federal
contracting opportunities made available to eligible small
businesses.''
Employee Training and Evaluation
Section 410 of Pub. L. 100-656, as amended by Pub. L. 101-37,
Sec. 18, June 15, 1989, 103 Stat. 74, provided that:
``(a) Training Requirements for Business Opportunity Specialists.--
(1) In each Small Business Administration field office responsible for
assisting one or more Program Participants there shall be a position
designated as a Business Opportunity Specialist. To the maximum extent
practicable the Administration shall assure that an adequate number of
Business Opportunity Specialists are assigned to each district office to
carry out the responsibilities of sections 7(j) and 8(a) of the Small
Business Act (15 U.S.C. 636(j), 637(a)) and to assist Program
Participants.
``(2) The Administration shall take such actions as may be
appropriate to ensure that any person employed as a Business Opportunity
Specialist receives adequate periodic training to assure such employee
is capable of assisting Program Participants to fully utilize the
Program and to meet the requirements of the Small Business Act [15
U.S.C. 631 et seq.], as amended by this Act.
``(b) Pilot Program.--(1) Within 180 days after the effective date
of this subsection [Nov. 15, 1988] the Administrator shall designate
three regions of the Administration to conduct a pilot program pursuant
to the provisions of this subsection. The designated regions shall
contain approximately 30 per centum of the total number of Program
Participants as of the time of designation.
``(2) A Business Opportunity Specialist employed in a Region
designated pursuant to paragraph (1), in addition to other assigned
duties and responsibilities, shall--
``(A) conduct contract negotiations on behalf of the
Administration for contracts awarded pursuant to section 8(a) of the
Small Business Act (15 U.S.C. 637(a)) when performance will be
rendered by one or more firms in such Specialist's assigned
portfolio;
``(B) facilitate and otherwise assist such firms in negotiating
for the receipt of contracts to be let pursuant to such section.
``(3) The Administration shall take such actions as may be
appropriate to train and qualify such Specialists to perform the
negotiations required pursuant to paragraph (2).
``(4) To the extent practicable, the Administrator shall ensure that
the performance appraisal system applicable to a Business Opportunity
Specialist employed in a region designated pursuant to paragraph (1)
affords substantial recognition to how well such Specialist's assigned
portfolio of concerns participating in the program established by
section 7(j)(10) of the Small Business Act (15 U.S.C. 636(j)(10)) are
achieving competitiveness and furthering the business development
purposes of the program.
``(5) The Administration shall establish personnel positions for
Business Opportunity Specialists employed in the regions designated
pursuant to paragraph (1) that are classified at a grade level of the
General Schedule that are sufficient, in the opinion of the
Administrator, to attract and retain highly qualified personnel.
``(c) Report and Pilot Program Termination.--(1) Within 120 days
after the termination of the pilot program conducted pursuant to
subsection (b), the Administration shall issue a report to the
Committees on Small Business of the Senate and of the House of
Representatives on the effectiveness of the pilot. Such report shall
contain such recommendations for administrative or legislative change as
may be appropriate.
``(2) The pilot program conducted pursuant to subsection (b) shall
be terminated three years after the date on which the Committees on
Small Business of the Senate and of the House of Representatives receive
written notification from the Administrator that the pilot is in full
operation in each of the three designated pilot regions.''
General Accounting Office Report
Section 504 of Pub. L. 100-656 directed Comptroller General of the
United States to conduct a review of operation of Minority Small
Business and Capital Ownership Development Program authorized by subsec.
(j)(10) of this section and contract assistance provided pursuant to
section 637(a)(15) of this title commencing within 180 days of Nov. 15,
1988, and concluding Sept. 30, 1991, such review to report on
implementation of provisions of Pub. L. 100-656 by Small Business
Administration and various executive departments and agencies providing
contracting opportunities to the Program, and directed Comptroller
General to prepare a report summarizing findings of review, make such
recommendations as may be appropriate, and transmit report to Committees
on Small Business of the Senate and House of Representatives by Feb. 1,
1992.
Commission on Minority Business Development
Pub. L. 100-656, title V, Sec. 505(a)-(g), Nov. 15, 1988, 102 Stat.
3883, as amended by Pub. L. 101-37, Sec. 20, June 15, 1989, 103 Stat.
74; Pub. L. 101-574, title II, Sec. 211, Nov. 15, 1990, 104 Stat. 2821;
Pub. L. 102-366, title II, Sec. 231(a), Sept. 4, 1992, 106 Stat. 1001;
Pub. L. 103-160, div. A, title IX, Sec. 904(f), Nov. 30, 1993, 107 Stat.
1729, established the Commission on Minority Business Development, set
out its duties, powers, membership, administration, and personnel, and
provided that it cease to exist within 90 days after the date that it
transmitted its final report to Congress and to the President or Sept.
30, 1992, whichever was later.
Limitations on Spending Authority
Section 802(f) of Pub. L. 100-656 provided that:
``(1) Any new credit authority or authority to enter into contracts
provided for in this Act [see Short Title of 1988 Amendment note set out
under section 631 of this title] is to be effective for any fiscal year
only to such extent or in such amounts as are provided in appropriation
Acts.
``(2) No funds are authorized to be appropriated in subsequent
appropriation Acts to the Administration for the purpose of making
grants of financial assistance under the so called `Business Development
Expense' program to any firm participating in the programs authorized by
section 7(j)(10) or section 8(a) of the Small Business Act (15 U.S.C.
636(j)(10) and 637(a)).''
Certified Loan Program; Expanded Participation; Reports to Congress
Section 102(b) of Pub. L. 100-590 provided that: ``The
Administration shall take appropriate steps to expand participation in
the certified loan program and shall report to the Small Business
Committees of the Senate and the House of Representatives on the amount
of loans approved and the amount of losses sustained under the
provisions of section 7(a)(19) of the Small Business Act [15 U.S.C.
636(a)(19)]. An interim report shall be submitted not later than one
year after date of enactment of this Act [Nov. 3, 1988] and a final
report shall be submitted not later than 18 months after the date of
enactment.''
Similar provisions were contained in Pub. L. 100-533, title III,
Sec. 302(b), Oct. 25, 1988, 102 Stat. 2693.
Pipeline Loans or Previous Disasters
Section 18006(b) of Pub. L. 99-272, as amended by Pub. L. 99-349,
title I, July 2, 1986, 100 Stat. 718, provided that: ``Notwithstanding
the amendments made by this section [amending sections 636 and 647 of
this title], sections 18002 [amending provisions set out as a note under
section 631 of this title] and 18016 [amending section 632 of this
title], or any other provision of law, the Small Business Administration
shall continue to accept, process, and approve loan applications under
paragraphs (1) through (4) of subsection [section] 7(b) of the Small
Business Act [15 U.S.C. 636(b)(1) to (4)] and shall obligate and
disburse loan funds on account of disasters which occurred prior to
October 1, 1985, and with respect to which a disaster declaration
application was submitted prior to October 1, 1985, even if any such
application is filed after the date of the enactment of this Act [Apr.
7, 1986].''
Determination of Natural Disaster by Secretary of Agriculture To Be
Deemed Disaster Declaration by Administrator of Small Business
Administration; Disasters Commencing Between January 1, 1983, and
September 30, 1983
Pub. L. 98-166, title I, Sec. 101, Nov. 28, 1983, 97 Stat. 1079,
provided in part that: ``beginning with disasters commencing between
January 1, 1983, through September 30, 1983, determination of a natural
disaster by the Secretary of Agriculture pursuant to 7 U.S.C. 1961 shall
be deemed a disaster declaration by the Administrator of the Small
Business Administration for purposes of determining eligibility for
assistance under section 7(b)(1) of the Small Business Act [subsec.
(b)(1) of this section] for agricultural enterprises as defined in
section 18(b) of the Small Business Act [15 U.S.C. 647(b)]: Provided,
That nothing in this paragraph is to preclude the applicability of
section 18(a) of the Small Business Act [15 U.S.C. 647(a)] with regard
to the duplication of benefits for disasters commencing between January
1, 1983, through September 30, 1983.''
Reports to Congress; Default Rate of Loans
Section 1907 of Pub. L. 97-35 required the Small Business
Administration to submit to Congress, not later than Feb. 28, 1984, and
1985, reports containing specific information on the aggregate number,
dollar value, and default rate of all loans with respect to 15 U.S.C.
636(a)(5), (6)(C), (8)(A).
Business Plans; Submittal by Concerns Eligible To Receive Contracts
Section 106(b) of Pub. L. 96-481 provided that: ``Notwithstanding
the provisions of subsection (a) of this section [amending subsec.
(j)(10)(A)(i) of this section], for concerns eligible to receive
contracts pursuant to section 8(a) of the Small Business Act [section
637(a) of this title] on the effective date of the amendment made by
this section [Oct. 21, 1980], each such concern shall submit to the
Small Business Administration within two months after the promulgation
of final regulations issued within one hundred and twenty days after the
enactment of this Act [Oct. 21, 1981] the business plan required under
section 7(j)(10)(A)(i) of the Small Business Act, as amended by
subsection (a) of this section [subsec. (j)(10)(A)(i) of this section]:
Provided however, That the period of time required under section
7(j)(10)(A)(i) of the Small Business Act, as amended by subsection (a)
of this section, shall be fixed as mutually agreed upon by the program
participant and the Small Business Administration prior to the awarding
or extending of contracts to such concern pursuant to section 8(a) of
the Small Business Act after June 1, 1981, but the period shall be fixed
in no case later than eighteen months after the effective date of this
Act: Provided further, That no determination made under this paragraph
shall be considered a denial of total participation for the purposes of
section 8(a)(9) of the Small Business Act.''
Small Business Employee Ownership; Congressional Findings and Purposes
Sections 502 and 503 of Pub. L. 96-302 provided that:
``Sec. 502. The Congress hereby finds and declares that--
``(1) employee ownership of firms provides a means for
preserving jobs and business activity;
``(2) employee ownership of firms provides a means for keeping a
small business small when it might otherwise be sold to a
conglomerate or other large enterprise;
``(3) employee ownership of firms provides a means for creating
a new small business from the sale of a subsidiary of a large
enterprise;
``(4) unemployment insurance programs, welfare payments, and job
creation programs are less desirable and more costly for both the
Government and program beneficiaries than loan guarantee programs to
maintain employment in firms that would otherwise be closed,
liquidated, or relocated; and
``(5) by guaranteeing loans to qualified employee trusts and
similar employee organizations, the Small Business Administration
can provide feasible and desirable methods for the transfer of all
or part of the ownership of a small business concern to its
employees.
``Sec. 503. (a) The purposes of this title [enacting sections 632(c)
and 636(a)(8) of this title and provisions set out as notes under
sections 631 and 636 of this title] are--
``(1) to provide that a qualified employee trust shall be
eligible for loan guarantees under section 7(a) of the Small
Business Act [subsec. (a) of this section] with respect to a small
business concern, regardless of the percentage of stock of the
concern held by the trust, and
``(2) to provide in section 505 of this Act [enacting subsec.
(a)(8) of this section] authority to address the specific case in
which the Small Business Administration guarantees loans under
section 7(a) of the Small Business Act [subsec. (a) of this section]
for purposes of providing funds to a qualified employee trust (and
other employee organizations which are treated as qualified employee
trusts) for the purchase, by at least 51 percent of the employees,
of at least 51 percent of the stock of business which is operated
for profit and which is--
``(A) a small business concern, or
``(B) a corporation which is controlled by another person
if, after the plan for the purchase of such corporation is
carried out, such corporation would be a small business concern.
``(b) Nothing in this title shall be construed to prohibit the Small
Business Administration from making loan guarantees under section 7(a)
of the Small Business Act [subsec. (a) of this section] to qualified
employee trusts which own less than 51 percent of the stock of a
continuing business.''
Termination of Advisory Committees
Advisory committees established after Jan. 5, 1973, to terminate not
later than the expiration of the 2-year period beginning on the date of
their establishment, unless, in the case of a committee established by
the President or an officer of the Federal Government, such committee is
renewed by appropriate action prior to the expiration of such 2-year
period, or in the case of a committee established by the Congress, its
duration is otherwise provided for by law. See section 14 of Pub. L. 92-
463, Oct. 6, 1972, 86 Stat. 776, set out in the Appendix to Title 5,
Government Organization and Employees.
Disaster Relief Authority; Study and Report on Consolidation
Section 101 of Pub. L. 94-305 provided that: ``The President shall
undertake a comprehensive review of all Federal disaster loan
authorities and shall make a report to the Congress, not later than
December 1, 1976, containing such recommendations and legislative
proposals, including possible consolidation of Federal disaster loan
authorities, as may be demonstrated to be necessary and appropriate to
assure the most effective and efficient delivery of disaster relief.
Such study shall give particular emphasis to alleviating any
extraordinary burden the management of Federal disaster loan programs
may impose on an agency.''
Disaster Loans; Special Provisions for Applications Received on or
Before March 19, 1981; Assistance to Hardship Applicants
Section 1916 of Pub. L. 97-35 provided that:
``(a) Notwithstanding section 5(b)(6) of the Small Business Act
[section 634(b)(6) of this title], or any other provision of law, any
business concern applicant for assistance made pursuant to paragraph
(1), (2), or (4) of subsection 7(b) of the Small Business Act [subsec.
(b)(1), (2), or (4) of this section] whose application was received but
not approved by the Small Business Administration on or before March 19,
1981, shall be offered loan assistance by the Small Business
Administration as provided in this section.
``(b) The Small Business Administration is specifically directed to
reconsider and act upon any such application and to make, remake,
obligate, reobligate, commit or recommit such financing as provided
herein.
``(c) If the applicant was a business concern able to obtain credit
elsewhere, the terms and conditions shall be those specified in section
7(b)(3) of the Small Business Act [subsec. (b)(3) of this section]; but
if the Administrator determines that imposition of these provisions
would impose a substantial hardship on the applicant, he may, in his
discretion on a case-by-case basis waive these provisions and provide
assistance in accord with rules and regulations in effect for the date
the disaster commenced for applicants able to secure credit elsewhere.
If the applicant was a business concern unable to obtain credit
elsewhere, or was an applicant under sections 7(b)(2) or 7(b)(4) of the
Small Business Act [subsec. (b)(2) or (4) of this section], the terms
and conditions shall be those in effect for such applicants on the date
such application was first received. As used herein, the term `credit
elsewhere' shall have the meaning prescribed by the Small Business Act
as amended herein [this chapter].''
Disaster Loans; Interest Rate; Cancellation of Loans
Section 9 of Pub. L. 93-24, Apr. 20, 1973, 87 Stat. 25, provided
that: ``Notwithstanding the provisions of any other law, any loan made
by the Small Business Administration in connection with any disaster
occurring on or after the date of enactment of this Act [Apr. 20, 1973]
under sections 7(b)(1), (2), or (4) of the Small Business Act (15 U.S.C.
636(b)(1), (2), or (4)) [subsec. (b)(1), (2), or (4) of this section]
shall bear interest at the rate determined under section 324 of the
Consolidated Farm and Rural Development Act, as amended by section 4 of
this Act [section 1964 of Title 7, Agriculture]. No portion of any such
loan shall be subject to cancellation under the provisions of any law.''
Interest Rates on Loans To Meet Regulatory Standards
Section 2(d) of Pub. L. 93-237 provided that: ``In no case shall the
interest rate charged for loans to meet regulatory standards be lower
than loans made in connection with physical disasters.''
Election of Benefits
Section 1(c) of Pub. L. 92-385 provided that: ``Any person who (1)
suffers any loss or damage as a result of a major disaster as determined
by the President which occurred prior to the date of enactment of this
Act [August 16, 1972], (2) is eligible for assistance under the
amendment made by subsection (a), and (3) is otherwise eligible for
benefits greater than those provided by the amendment made by subsection
(a), may elect to receive such greater benefits.''
Fund for Management Counseling
Section 602(a), (b) of Pub. L. 85-699 provided that:
``(a) Within sixty days after the enactment of this Act [Aug. 21,
1958], each Federal Reserve bank shall pay to the United States the
aggregate amount which the Secretary of the Treasury has heretofore paid
to such bank under the provisions of section 13b of the Federal Reserve
Act [12 U.S.C. 352a]; and such payment shall constitute a full discharge
of any obligation or liability of the Federal Reserve bank to the United
States or to the Secretary of the Treasury arising out of subsection (e)
of said section 13b [12 U.S.C. 352a(e)] or out of any agreement
thereunder.
``(b) The amounts repaid to the United States pursuant to subsection
(a) of this section shall be covered into a special fund in the Treasury
which shall be available for grants under section 7(d) of the Small
Business Act [subsec. (d) of this section]. Any remaining balance of
funds set aside in the Treasury for payments under section 13b of the
Federal Reserve Act [12 U.S.C. 352a] shall be covered into the Treasury
as miscellaneous receipts.''
Loans for Modifications of Mining Facilities and Equipment
Section 504(d) of Pub. L. 91-173 provided that: ``Loans may also be
made or guaranteed for the purposes set forth in section 7(b)(5) of the
Small Business Act, as amended [subsec. (b)(5) of this section],
pursuant to the provisions of section 202 of the Public Works and
Economic Development Act of 1965, as amended [42 U.S.C. 3142].''
Executive Order No. 12190
Ex. Ord. No. 12190, Feb. 1, 1980, 45 F.R. 7773, established the
Advisory Committee on Small and Minority Business Ownership to assist in
monitoring and encouraging the placement of subcontracts by the private
sector with eligible small businesses, to study and propose incentives
and assistance needed by the private sector to help in the training,
development, and upgrading of such businesses, to make periodic reports
and recommendations to the President, and to report annually to the
President and to the Congress on the activities of the Committee and
provided for termination of the Committee on Dec. 31, 1980.
Extension of Term of Advisory Committee on Small and Minority Business
Ownership
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Dec. 31, 1982, by Ex. Ord. No. 12258, Dec. 31,
1980, 46 F.R. 1251, set out as a note under section 14 of the Federal
Advisory Committee Act in the Appendix to Title 5, Government
Organization and Employees.
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Sept. 30, 1984, by Ex. Ord. No. 12399, Dec. 31,
1982, 48 F.R. 379, formerly set out as a note under section 14 of the
Federal Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Sept. 30, 1985, by Ex. Ord. No. 12489, Sept.
28, 1984, 49 F.R. 38927, formerly set out as a note under section 14 of
the Federal Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Sept. 30, 1987, by Ex. Ord. No. 12534, Sept.
30, 1985, 50 F.R. 40319, formerly set out as a note under section 14 of
the Federal Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Sept. 30, 1989, by Ex. Ord. No. 12610, Sept.
30, 1987, 52 F.R. 36901, formerly set out as a note under section 14 of
the Federal Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business
Ownership extended until Sept. 30, 1991, by Ex. Ord. No. 12692, Sept.
29, 1989, 54 F.R. 40627, formerly set out as a note under section 14 of
the Federal Advisory Committee Act in the Appendix to Title 5, which
extension was revoked by amendment of Ex. Ord. No. 12692, by Ex. Ord.
No. 12704, Feb. 26, 1990, 55 F.R. 6969.
Section Referred to in Other Sections
This section is referred to in sections 631, 632, 633, 634, 637,
639, 645, 650, 697, 6905 of this title; title 19 section 2344; title 33
section 701n; title 38 section 3452; title 42 sections 3142-1, 5172.
