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Small Business Workforce Pipeline Act of 2023

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Congressional materials
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Crpt 118Hrpt97
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Crpt 118Hrpt97

Summary

House of Representatives Report 118–97 of the 118th Congress, 1st Session, submitted June 5, 2023 by Mr. Williams of Texas from the Committee on Small Business to accompany H.R. 1541, the Small Business Workforce Pipeline Act of 2023. The committee reports the bill favorably without amendment and recommends that it pass. The report states the bill would amend section 21 of the Small Business Act so that Small Business Development Centers assist small businesses with apprenticeship, work-based learning, pre-apprenticeship and job training programs, including by disseminating Department of Labor information. It recounts an April 26, 2023 subcommittee hearing and the May 23, 2023 markup, and includes a Congressional Budget Office cost estimate of $40 million over the 2023–2028 period. The report closes with the changes in existing law made by the bill.

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“Small Business Workforce Pipeline Act of 2023.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crpt-118hrpt97/, SHA-256 99829b0a8a2b162fcdb69ff1dc0261c043040ef0c940177ed5eb8750e3b08562.

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                                                                                  118TH CONGRESS                                                                                            REPORT
                                                                                                 " HOUSE OF REPRESENTATIVES                                                        !
                                                                                     1st Session                                                                                            118–97




                                                                                       SMALL BUSINESS WORKFORCE PIPELINE ACT OF 2023



                                                                                       JUNE 5, 2023.—Committed to the Committee of the Whole House on the State of
                                                                                                         the Union and ordered to be printed




                                                                                       Mr. WILLIAMS of Texas, from the Committee on Small Business,
                                                                                                         submitted the following


                                                                                                                                  R E P O R T
                                                                                                                              [To accompany H.R. 1541]

                                                                                                    [Including cost estimate of the Congressional Budget Office]

                                                                                    The Committee on Small Business, to whom was referred the bill
                                                                                  (H.R. 1541) to amend the Small Business Act to include require-
                                                                                  ments relating to apprenticeship program assistance for small busi-
                                                                                  ness development centers, and for other purposes, having consid-
                                                                                  ered the same, reports favorably thereon without amendment and
                                                                                  recommends that the bill do pass.
                                                                                                                                         CONTENTS
                                                                                                                                                                                                             Page
                                                                                       I. Purpose and Bill Summary ........................................................................                    2
                                                                                      II. Need for Legislation ....................................................................................            2
                                                                                     III. Hearings .......................................................................................................     2
                                                                                     IV. Committee Consideration ...........................................................................                   3
                                                                                      V. Committee Votes .........................................................................................             3
                                                                                     VI. Section-by-Section of H.R. 1541 .................................................................                     6
                                                                                    VII. Congressional Budget Office Cost Estimate .............................................                               6
                                                                                   VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures                                                     7
                                                                                     IX. Oversight Findings & Recommendations ..................................................                               7
                                                                                      X. Performance Goals and Objectives ............................................................                         7
                                                                                     XI. Statement of Duplication of Federal Programs ........................................                                 7
                                                                                    XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
                                                                                            Benefits .....................................................................................................     8
                                                                                   XIII. Federal Mandates Statement .....................................................................                      8
                                                                                    XIV. Federal Advisory Committee Statement ...................................................                              8
                                                                                     XV. Applicability to Legislative Branch ...........................................................                       8
                                                                                    XVI. Statement of Constitutional Authority ......................................................                          8
                                                                                   XVII. Changes in Existing Law, Made by the Bill, as Reported .......................                                        8




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                                                                                                               I. PURPOSE AND BILL SUMMARY
                                                                                     The purpose of H.R. 1541 the ‘‘Small Business Workforce Pipe-
                                                                                  line Act of 2023’’, is to add to the services provided by Small Busi-
                                                                                  ness Development Centers (SBDCs) support for small businesses
                                                                                  that are struggling to find workers. This support includes dissemi-
                                                                                  nating information from the Department of Labor regarding Ap-
                                                                                  prenticeships, Work-Based Learning Opportunities, Pre-Apprentice-
                                                                                  ships, and Job Training Programs.
                                                                                                                 II. NEED FOR LEGISLATION
                                                                                     H.R. 1541 was introduced by Representative Jason Crow (D–CO),
                                                                                  Representative Marcus Molinaro (R–NY), Representative Shri
                                                                                  Thanedar (D–MI), and Representative Maria Elvira Salazar (R–FL)
                                                                                  on March 10, 2023.
                                                                                     The economic impact of the COVID–19 pandemic resulted in a
                                                                                  labor shortage that is still being felt by small business owners. Ac-
                                                                                  cording to the U.S. Bureau of Labor Statistics, of the top 20 occupa-
                                                                                  tions projected to see the biggest change in employment over the
                                                                                  next 10 years, the majority are in careers that require training be-
                                                                                  yond high school but less than a four-year degree. While many
                                                                                  businesses may have no trouble attracting applicants, it is often
                                                                                  difficult for them to find qualified applicants with the skills they
                                                                                  are seeking. Many businesses are turning to direct investments in
                                                                                  their own workforce as a benefit of employment.
                                                                                     Apprenticeships are among the most successful form of workforce
                                                                                  development. They often include paid, on-the-job training alongside
                                                                                  classroom education that provides well-rounded experience to work-
                                                                                  ers and equips them with skills that can be used in multiple career
                                                                                  paths. This earn-while-you-learn model of workforce development
                                                                                  could be a more accessible way of educating workers that may not
                                                                                  have the resources to engage with traditional education. These pro-
                                                                                  grams often last several years and provide accessible training and
                                                                                  education to workers through stackable credentials, academic cred-
                                                                                  it, and mentorship opportunities. According to the Department of
                                                                                  Labor (DOL), 93 percent of apprentices who complete their appren-
                                                                                  ticeships retain employment with an average starting salary of
                                                                                  $77,000 a year. Traditionally, apprenticeships have only been de-
                                                                                  veloped in the skilled trades, and they have not been prevalent in
                                                                                  other industries. Since apprenticeships require a long-term invest-
                                                                                  ment in workers, small firms have seen this as a costly and risky
                                                                                  endeavor. However, as many small businesses recognize the bene-
                                                                                  fits of directly investing in their workforce through apprenticeships,
                                                                                  they are becoming a desirable course of action for employers who
                                                                                  are having trouble hiring qualified employees. Alongside registered
                                                                                  apprenticeships, other work-based learning opportunities have be-
                                                                                  come popular methods of job training, allowing individuals to gain
                                                                                  skills by doing, through things like internships and job shadowing.
                                                                                  With small businesses struggling to find qualified workers, work-
                                                                                  based learning opportunities can help ease the shortage.
                                                                                                                           III. HEARINGS
                                                                                    On April 26, 2023, in the 118th Congress, the House Committee




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                                                                                  on Small Business Subcommittee on Innovation, Entrepreneurship,
                                                                                  and Workforce Development held a hearing titled ‘‘Help Wanted:




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                                                                                  Exploring How Alternative Paths to Student Debt Can Help to
                                                                                  Strengthen Small Businesses’’ examining the issues covered in H.R.
                                                                                  1541. Witnesses responded to questions elaborating that a lack of
                                                                                  employment has been perpetuated by the narrative that attending
                                                                                  college is requisite for financial success.
                                                                                                               IV. COMMITTEE CONSIDERATION
                                                                                    The Committee on Small Business met in open session, with a
                                                                                  quorum being present, on May 23, 2023 and ordered H.R. 1541 re-
                                                                                  ported favorably to the House of Representatives. During the mark-
                                                                                  up no amendments were offered.
                                                                                                                     V. COMMITTEE VOTES
                                                                                     Clause 3(b) of rule XIII of the Rules of the House of Representa-
                                                                                  tives requires the Committee to list the recorded votes on the mo-
                                                                                  tion to report legislation and amendments thereto. The Committee
                                                                                  voted to favorably report H.R. 1541 to the House of Representatives
                                                                                  at 2:44 p.m.




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                                                                                                         VI. SECTION-BY-SECTION OF H.R. 1541
                                                                                  Sec 1. Short title
                                                                                    This section designates the bill as the ‘‘Small Business Workforce
                                                                                  Pipeline Act of 2023’’.
                                                                                  Sec 2. Small Business Development Center Apprenticeship Program
                                                                                      Assistance
                                                                                    This subsection amends section 21(c)(3) of the Small Business
                                                                                  Act, 15 U.S.C. § 648(c)(1), to add a requirement that allows SBDCs
                                                                                  to provide information and assistance to small businesses on how
                                                                                  to establish and improve apprenticeship programs (as defined in
                                                                                  the National Apprenticeship Act), work-based learning programs
                                                                                  (as defined by the Carl D. Perkins Technical Education Act), pre-
                                                                                  apprenticeship programs, and job training programs, including by
                                                                                  disseminating relevant information from DOL and other relevant
                                                                                  federal agencies.
                                                                                              VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
                                                                                    Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
                                                                                  resentatives, the Committee adopts as its as its own the cost esti-
                                                                                  mate prepared by the Director of the Congressional Budget Office
                                                                                  pursuant to section 402 of the Congressional Budget Act of 1974.




                                                                                    H.R. 1541 would require Small Business Development Centers
                                                                                  (SBDC) to help small businesses establish and improve work-based
                                                                                  learning opportunities, pre-apprenticeship and apprenticeship pro-
                                                                                  grams, and job training programs. Under current law, the SBDC
                                                                                  program, administered by the Small Business Administration
                                                                                  (SBA), awards grants to centers that counsel and train current and
                                                                                  prospective small-business owners. In 2023, the Congress appro-
                                                                                  priated $140 million for the SBDC program.
                                                                                    Using information from the SBA, CBO expects that the SBA
                                                                                  would award grants to lead SBDCs to support an additional 62




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                                                                                  counselors annually (at a cost of $170,000 per employee) to manage
                                                                                  work-based learning opportunities at each lead center. Based on




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                                                                                  historical spending patterns, and accounting for anticipated infla-
                                                                                  tion, CBO estimates that implementing H.R. 1541 would cost $40
                                                                                  million over the 2023–2028 period, assuming appropriation of the
                                                                                  estimated amounts.
                                                                                     The costs of the legislation, detailed in Table 1, fall within budg-
                                                                                  et function 370 (commerce and housing credit).
                                                                                    TABLE 1.—ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 1541
                                                                                                                                                                                                 By fiscal year, millions of dollars—

                                                                                                                                                                                                                                                2023–
                                                                                                                                                                               2023       2024        2025      2026       2027         2028     2028

                                                                                  Estimated Authorization ...........................................................                 *      11           11        11         11          12      56
                                                                                  Estimated Outlays ....................................................................              *       1            7        10         11          11      40
                                                                                       * = between zero and $500,000.

                                                                                    The CBO staff contact for this estimate is David Hughes. The es-
                                                                                  timate was reviewed by Theresa Gullo, Director of Budget Anal-
                                                                                  ysis.
                                                                                                                           PHILLIP L. SWAGEL,
                                                                                                             Director, Congressional Budget Office.
                                                                                              VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
                                                                                                             AND TAX EXPENDITURES

                                                                                     Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
                                                                                  of Representatives and section 308(a)(I) of the Congressional Budg-
                                                                                  et Act of 1974, the Committee provides the following opinion and
                                                                                  estimate with respect to new budget authority, entitlement author-
                                                                                  ity, and tax expenditures. The Committee does not believe that
                                                                                  there will be any additional costs attributable to this legislation.
                                                                                                            IX. OVERSIGHT FINDINGS & RECOMMENDATIONS
                                                                                    In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
                                                                                  of rule X of the Rules of the House of Representatives, the over-
                                                                                  sight findings and recommendations of the Committee on Small
                                                                                  Business with respect to the subject matter contained in the H.R.
                                                                                  1541 are incorporated into the descriptive portions of this report.
                                                                                                                    X. PERFORMANCE GOALS AND OBJECTIVES
                                                                                    With respect to the requirements of clause 3(c)(1) of rule XIII of
                                                                                  the Rules of the House of Representatives, the performance goals
                                                                                  and objectives of H.R. 1541 are to direct SBDCs to disseminate in-
                                                                                  formation from the Department of Labor regarding Apprentice-
                                                                                  ships, Work-Based Learning Opportunities, Pre-Apprenticeships,
                                                                                  and Job Training Programs.
                                                                                                 XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
                                                                                    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
                                                                                  of Representatives, no provision of H.R. 1541 is known to be dupli-
                                                                                  cative of another Federal program, including any program that was
                                                                                  included in a report to Congress pursuant to section 21 of Public




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                                                                                  Law 111–139 or the most recent Catalog of Federal Domestic As-
                                                                                  sistance.




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                                                                                        XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
                                                                                                        LIMITED TARIFF BENEFITS
                                                                                    With respect to clause 9 of rule XXI of the Rules of the House
                                                                                  of Representatives, the Committee finds that the bill does not con-
                                                                                  tain any congressional earmarks, limited tax benefits, or limited
                                                                                  tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
                                                                                  the Rules of the House of Representatives.
                                                                                                          XIII. FEDERAL MANDATES STATEMENT
                                                                                    The Committee adopts as its own the estimate of Federal man-
                                                                                  dates prepared by the Director of the Congressional Budget Office
                                                                                  pursuant to section 423 of the Unfunded Mandates Reform Act.
                                                                                                    XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
                                                                                    No advisory committees within the meaning of section 5(b) of the
                                                                                  Federal Advisory Committee Act were created by this legislation.
                                                                                                      XV. APPLICABILITY TO LEGISLATIVE BRANCH
                                                                                    The Committee finds that the legislation does not relate to the
                                                                                  terms and conditions of employment or access to public services or
                                                                                  accommodations within the meaning of section 102(b)(3) of the Con-
                                                                                  gressional Accountability Act.
                                                                                                    XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
                                                                                     Pursuant to clause 7 of rule XII of the Rules of the House, the
                                                                                  Committee finds that the authority for this legislation in Art. I, § 8,
                                                                                  cl.1 of the Constitution of the United States.
                                                                                  XVII. CHANGES IN EXISTING LAW, MADE BY THE BILL, AS REPORTED
                                                                                    In compliance with clause 3(e) of rule XIII of the Rules of the
                                                                                  House of Representatives, changes in existing law made by the bill,
                                                                                  as reported, are shown as follows (existing law proposed to be omit-
                                                                                  ted is enclosed in black brackets, new matter is printed in italics,
                                                                                  and existing law in which no change is proposed is shown in
                                                                                  roman):
                                                                                                                  SMALL BUSINESS ACT
                                                                                          *        *         *      *         *        *        *
                                                                                     SEC. 21. (a)(1) The Administration is authorized to make grants
                                                                                  (including contracts and cooperative agreements) to any State gov-
                                                                                  ernment or any agency thereof, any regional entity, any State-char-
                                                                                  tered development, credit or finance corporation, any women’s busi-
                                                                                  ness center operating pursuant to section 29, any public or private
                                                                                  institution of higher education, including but not limited to any
                                                                                  land-grant college or university, any college or school of business,
                                                                                  engineering, commerce, or agriculture, community college or junior
                                                                                  college, or to any entity formed by two or more of the above entities
                                                                                  (herein referred to as ‘‘applicants’’) to assist in establishing small
                                                                                  business development centers and to any such labor for: small busi-
                                                                                  ness oriented employment or natural resources development pro-




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                                                                                  grams; studies, research, and counseling concerning the managing,
                                                                                  financing, and operation of small business enterprises, manage-




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                                                                                  ment and technical assistance regarding small business participa-
                                                                                  tion in international markets, export promotion and technology
                                                                                  transfer; delivery or distribution of such services and information;
                                                                                  providing access to business analysts who can refer small business
                                                                                  concerns to available experts; and, to the extent practicable, pro-
                                                                                  viding assistance in furtherance of the Small Business Develop-
                                                                                  ment Center Cyber Strategy developed under section 1841(a) of the
                                                                                  National Defense Authorization Act for Fiscal Year 2017: Provided,
                                                                                  That after December 31, 1990, the Administration shall not make
                                                                                  a grant to any applicant other than an institution of higher edu-
                                                                                  cation or a women’s business center operating pursuant to section
                                                                                  29 as a Small Business Development Center unless the applicant
                                                                                  was receiving a grant (including a contract or cooperative agree-
                                                                                  ment) on such date. The previous sentence shall not apply to an
                                                                                  applicant that has its principal office located in the Commonwealth
                                                                                  of the Northern Mariana Islands. The Administration shall require
                                                                                  any applicant for a small business development center grant with
                                                                                  performance commencing on or after January 1, 1992 to have its
                                                                                  own budget and to primarily utilize institutions of higher education
                                                                                  and women’s business centers operating pursuant to section 29 to
                                                                                  provide services to the small business community. The term of such
                                                                                  grants shall be made on a calendar year basis or to coincide with
                                                                                  the Federal fiscal year.
                                                                                         (2) COOPERATION TO PROVIDE INTERNATIONAL TRADE SERV-
                                                                                       ICES.—
                                                                                              (A) INFORMATION AND SERVICES.—The small business de-
                                                                                            velopment centers shall work in close cooperation with the
                                                                                            Administration’s regional and local offices, the Department
                                                                                            of Commerce, appropriate Federal, State and local agen-
                                                                                            cies (including State trade agencies), and the small busi-
                                                                                            ness community to serve as an active information dissemi-
                                                                                            nation and service delivery mechanism for existing trade
                                                                                            promotion, trade finance, trade adjustment, trade remedy
                                                                                            and trade data collection programs of particular utility for
                                                                                            small businesses.
                                                                                              (B) COOPERATION WITH STATE TRADE AGENCIES AND EX-
                                                                                            PORT ASSISTANCE CENTERS.—A small business development
                                                                                            center that counsels a small business concern on issues re-
                                                                                            lating to international trade shall—
                                                                                                   (i) consult with State trade agencies and Export As-
                                                                                                 sistance Centers to provide appropriate services to the
                                                                                                 small business concern; and
                                                                                                   (ii) as necessary, refer the small business concern to
                                                                                                 a State trade agency or an Export Assistance Center
                                                                                                 for further counseling or assistance.
                                                                                              (C) DEFINITION.—In this paragraph, the term ‘‘Export
                                                                                            Assistance Center’’ has the same meaning as in section 22.
                                                                                     (3) The Small Business Development Center Program shall be
                                                                                  under the general management and oversight of the Administra-
                                                                                  tion for the delivery of programs and services to the small business
                                                                                  community. Such programs and services shall be jointly developed,
                                                                                  negotiated, and agreed upon, with full participation of both parties,




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                                                                                  pursuant to an executed cooperative agreement between the Small
                                                                                  Business Development Center applicant and the Administration.




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                                                                                     (A) Small business development centers are authorized to form
                                                                                  an association to pursue matters of common concern. If more than
                                                                                  a majority of the small business development centers which are op-
                                                                                  erating pursuant to agreements with the Administration are mem-
                                                                                  bers of such an association, the Administration is authorized and
                                                                                  directed to recognize the existence and activities of such an associa-
                                                                                  tion and to consult with it and develop documents (i) announcing
                                                                                  the annual scope of activities pursuant to this section, (ii) request-
                                                                                  ing proposals to deliver assistance as provided in this section and
                                                                                  (iii) governing the general operations and administration of the
                                                                                  Small Business Development Center Program, specifically includ-
                                                                                  ing the development of regulations and a uniform negotiated coop-
                                                                                  erative agreement for use on an annual basis when entering into
                                                                                  individual negotiated agreements with small business development
                                                                                  centers.
                                                                                     (B) Provisions governing audits, cost principles and administra-
                                                                                  tive requirements for Federal grants, contracts and cooperative
                                                                                  agreements which are included in uniform requirements of Office
                                                                                  of Management and Budget (OMB) Circulars shall be incorporated
                                                                                  by reference and shall not be set forth in summary or other form
                                                                                  in regulations.
                                                                                           (C) Whereas On an annual basis, the Small Business Devel-
                                                                                        opment Center shall review and coordinate public and private
                                                                                        partnerships and cosponsorships with the Administration for
                                                                                        the purpose of more efficiently leveraging available resources
                                                                                        on a National and a State basis.
                                                                                     (4) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.—
                                                                                           (A) IN GENERAL.—The Administration shall require as a con-
                                                                                        dition of any grant (or amendment or modification thereof)
                                                                                        made to an applicant under this section, that a matching
                                                                                        amount (excluding any fees collected from recipients of such
                                                                                        assistance) equal to the amount of such grant be provided from
                                                                                        sources other than the Federal Government, to be comprised of
                                                                                        not less than 50 percent cash and not more than 50 percent
                                                                                        of indirect costs and in-kind contributions.
                                                                                           (B) RESTRICTION.—The matching amount described in sub-
                                                                                        paragraph (A) shall not include any indirect costs or in-kind
                                                                                        contributions derived from any Federal program.
                                                                                           (C) FUNDING FORMULA.—
                                                                                                (i) IN GENERAL.—Subject to clause (iii), the amount of a
                                                                                             formula grant received by a State under this subparagraph
                                                                                             shall be equal to an amount determined in accordance
                                                                                             with the following formula:
                                                                                                     (I) The annual amount made available under section
                                                                                                   20(a) for the Small Business Development Center Pro-
                                                                                                   gram, less any reductions made for expenses author-
                                                                                                   ized by clause (v) of this subparagraph, shall be di-
                                                                                                   vided on a pro rata basis, based on the percentage of
                                                                                                   the population of each State, as compared to the popu-
                                                                                                   lation of the United States.
                                                                                                     (II) If the pro rata amount calculated under sub-
                                                                                                   clause (I) for any State is less than the minimum




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                                                                                                   funding level under clause (iii), the Administration
                                                                                                   shall determine the aggregate amount necessary to




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                                                                                                     achieve that minimum funding level for each such
                                                                                                     State.
                                                                                                        (III) The aggregate amount calculated under sub-
                                                                                                     clause (II) shall be deducted from the amount cal-
                                                                                                     culated under subclause (I) for States eligible to re-
                                                                                                     ceive more than the minimum funding level. The de-
                                                                                                     ductions shall be made on a pro rata basis, based on
                                                                                                     the population of each such State, as compared to the
                                                                                                     total population of all such States.
                                                                                                        (IV) The aggregate amount deducted under sub-
                                                                                                     clause (III) shall be added to the grants of those States
                                                                                                     that are not eligible to receive more than the min-
                                                                                                     imum funding level in order to achieve the minimum
                                                                                                     funding level for each such State, except that the eligi-
                                                                                                     ble amount of a grant to any State shall not be re-
                                                                                                     duced to an amount below the minimum funding level.
                                                                                                  (ii) GRANT DETERMINATION.—The amount of a grant that
                                                                                               a State is eligible to apply for under this subparagraph
                                                                                               shall be the amount determined under clause (i), subject to
                                                                                               any modifications required under clause (iii), and shall be
                                                                                               based on the amount available for the fiscal year in which
                                                                                               performance of the grant commences, but not including
                                                                                               amounts distributed in accordance with clause (iv). The
                                                                                               amount of a grant received by a State under any provision
                                                                                               of this subparagraph shall not exceed the amount of
                                                                                               matching funds from sources other than the Federal Gov-
                                                                                               ernment, as required under subparagraph (A).
                                                                                                  (iii) MINIMUM FUNDING LEVEL.—The amount of the min-
                                                                                               imum funding level for each State shall be determined for
                                                                                               each fiscal year based on the amount made available for
                                                                                               that fiscal year to carry out this section, as follows:
                                                                                                        (I) If the amount made available is not less than
                                                                                                     $81,500,000 and not more than $90,000,000, the min-
                                                                                                     imum funding level shall be $500,000.
                                                                                                        (II) If the amount made available is less than
                                                                                                     $81,500,000, the minimum funding level shall be the
                                                                                                     remainder of $500,000 minus a percentage of $500,000
                                                                                                     equal to the percentage amount by which the amount
                                                                                                     made available is less than $81,500,000.
                                                                                                        (III) If the amount made available is more than
                                                                                                     $90,000,000, the minimum funding level shall be the
                                                                                                     sum of $500,000 plus a percentage of $500,000 equal
                                                                                                     to the percentage amount by which the amount made
                                                                                                     available exceeds $90,000,000.
                                                                                                  (iv) DISTRIBUTIONS.—Subject to clause (iii), if any State
                                                                                               does not apply for, or use, its full funding eligibility for a
                                                                                               fiscal year, the Administration shall distribute the remain-
                                                                                               ing funds as follows:
                                                                                                        (I) If the grant to any State is less than the amount
                                                                                                     received by that State in fiscal year 2000, the Admin-
                                                                                                     istration shall distribute such remaining funds, on a
                                                                                                     pro rata basis, based on the percentage of shortage of
                                                                                                     each such State, as compared to the total amount of




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                                                                                                     such remaining funds available, to the extent nec-
                                                                                                     essary in order to increase the amount of the grant to




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                                                                                                     the amount received by that State in fiscal year 2000,
                                                                                                     or until such funds are exhausted, whichever first oc-
                                                                                                     curs.
                                                                                                        (II) If any funds remain after the application of sub-
                                                                                                     clause (I), the remaining amount may be distributed
                                                                                                     as supplemental grants to any State, as the Adminis-
                                                                                                     tration determines, in its discretion, to be appropriate,
                                                                                                     after consultation with the association referred to in
                                                                                                     subsection (a)(3)(A).
                                                                                                  (v) USE OF AMOUNTS.—
                                                                                                        (I) IN GENERAL.—Of the amounts made available in
                                                                                                     any fiscal year to carry out this section—
                                                                                                             (aa) not more than $500,000 may be used by the
                                                                                                           Administration to pay expenses enumerated in
                                                                                                           subparagraphs (B) through (D) of section 20(a)(1);
                                                                                                           and
                                                                                                             (bb) not more than $500,000 may be used by the
                                                                                                           Administration to pay the examination expenses
                                                                                                           enumerated in section 20(a)(1)(E).
                                                                                                        (II) LIMITATION.—No funds described in subclause
                                                                                                     (I) may be used for examination expenses under sec-
                                                                                                     tion 20(a)(1)(E) if the usage would reduce the amount
                                                                                                     of grants made available under clause (i)(I) of this sub-
                                                                                                     paragraph to less than $85,000,000 (after excluding
                                                                                                     any amounts provided in appropriations Acts, or ac-
                                                                                                     companying report language, for specific institutions
                                                                                                     or for purposes other than the general small business
                                                                                                     development center program) or would further reduce
                                                                                                     the amount of such grants below such amount.
                                                                                                  (vi) EXCLUSIONS.—Grants provided to a State by the Ad-
                                                                                               ministration or another Federal agency to carry out sub-
                                                                                               section (a)(6) or (c)(3)(G), or for supplemental grants set
                                                                                               forth in clause (iv)(II) of this subparagraph, shall not be
                                                                                               included in the calculation of maximum funding for a
                                                                                               State under clause (ii) of this subparagraph.
                                                                                                  (vii) AUTHORIZATION OF APPROPRIATIONS.—There are au-
                                                                                               thorized to be appropriated to carry out this subpara-
                                                                                               graph—
                                                                                                        (I) $130,000,000 for fiscal year 2005; and
                                                                                                        (II) $135,000,000 for fiscal year 2006.
                                                                                                  (viii) LIMITATION.—From the funds appropriated pursu-
                                                                                               ant to clause (vii), the Administration shall reserve not
                                                                                               less than $1,000,000 in each fiscal year to develop portable
                                                                                               assistance for startup and sustainability non-matching
                                                                                               grant programs to be conducted by eligible small business
                                                                                               development centers in communities that are economically
                                                                                               challenged as a result of a business or government facility
                                                                                               down sizing or closing, which has resulted in the loss of
                                                                                               jobs or small business instability. A non-matching grant
                                                                                               under this clause shall not exceed $100,000, and shall be
                                                                                               used for small business development center personnel ex-
                                                                                               penses and related small business programs and services.
                                                                                                  (ix) STATE DEFINED.—In this subparagraph, the term




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                                                                                               ‘‘State’’ means each of the several States, the District of
                                                                                               Columbia, the Commonwealth of Puerto Rico, the Virgin




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                                                                                               Islands, Guam, American Samoa, and the Commonwealth
                                                                                               of the Northern Mariana Islands.
                                                                                    (5) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT
                                                                                  CENTERS.—
                                                                                        (A) IN GENERAL.—Subject to the conditions set forth in sub-
                                                                                         paragraph (B), a small business development center may enter
                                                                                         into a contract with a Federal department or agency to provide
                                                                                         specific assistance to small business concerns.
                                                                                            (B) CONTRACT PREREQUISITES.—Before bidding on a contract
                                                                                         described in subparagraph (A), a small business development
                                                                                         center shall receive approval from the Associate Administrator
                                                                                         of the small business development center program of the sub-
                                                                                         ject and general scope of the contract. Each approval under
                                                                                         subparagraph (A) shall be based upon a determination that the
                                                                                         contract will provide assistance to small business concerns and
                                                                                         that performance of the contract will not hinder the small busi-
                                                                                         ness development center in carrying out the terms of the grant
                                                                                         received by the small business development center from the
                                                                                         Administration.
                                                                                            (C) EXEMPTION FROM MATCHING REQUIREMENT.—A contract
                                                                                         under this paragraph shall not be subject to the matching
                                                                                         funds or eligibility requirements of paragraph (4).
                                                                                            (D) ADDITIONAL PROVISION.—Notwithstanding any other pro-
                                                                                         vision of law, a contract for assistance under this paragraph
                                                                                         shall not be applied to any Federal department or agency’s
                                                                                         small business, woman-owned business, or socially and eco-
                                                                                         nomically disadvantaged business contracting goal under sec-
                                                                                         tion 15(g).
                                                                                            (6) Any applicant which is funded by the Administration as
                                                                                         a Small Business Development Center may apply for an addi-
                                                                                         tional grant to be used solely to assist—
                                                                                                 (A) with the development and enhancement of exports by
                                                                                              small business concerns;
                                                                                                 (B) in technology transfer; and
                                                                                                 (C) with outreach, development, and enhancement of mi-
                                                                                              nority-owned small business startups or expansions,
                                                                                              HUBZone small business concerns, veteran-owned small
                                                                                              business startups or expansions, and women-owned small
                                                                                              business startups or expansions, in communities impacted
                                                                                              by base closings or military or corporate downsizing, or in
                                                                                              rural or underserved communities;
                                                                                         as provided under subparagraphs (B) through (G) of subsection
                                                                                         (c)(3). Applicants for such additional grants shall comply with
                                                                                         all of the provisions of this section, including providing match-
                                                                                         ing funds, except that funding under this paragraph shall be
                                                                                         effective for any fiscal year to the extent provided in advance
                                                                                         in appropriations Acts and shall be in addition to the dollar
                                                                                         program limitations specified in paragraphs (4) and (5). No re-
                                                                                         cipient of funds under this paragraph shall receive a grant
                                                                                         which would exceed its pro rata share of a $15,000,000 pro-
                                                                                         gram based upon the populations to be served by the Small
                                                                                         Business Development Center as compared to the total popu-
                                                                                         lation of the United States. The minimum amount of eligibility




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                                                                                         for any State shall be $100,000.
                                                                                            (7) PRIVACY REQUIREMENTS.—




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                                                                                                 (A) IN GENERAL.—A small business development center,
                                                                                              consortium of small business development centers, or con-
                                                                                              tractor or agent of a small business development center
                                                                                              may not disclose the name, address, or telephone number
                                                                                              of any individual or small business concern receiving as-
                                                                                              sistance under this section without the consent of such in-
                                                                                              dividual or small business concern, unless—
                                                                                                      (i) the Administrator is ordered to make such a dis-
                                                                                                   closure by a court in any civil or criminal enforcement
                                                                                                   action initiated by a Federal or State agency; or
                                                                                                      (ii) the Administrator considers such a disclosure to
                                                                                                   be necessary for the purpose of conducting a financial
                                                                                                   audit of a small business development center, but a
                                                                                                   disclosure under this clause shall be limited to the in-
                                                                                                   formation necessary for such audit.
                                                                                                 (B) ADMINISTRATOR USE OF INFORMATION.—This section
                                                                                              shall not—
                                                                                                      (i) restrict Administrator access to program activity
                                                                                                   data; or
                                                                                                      (ii) prevent the Administrator from using client in-
                                                                                                   formation to conduct client surveys.
                                                                                                 (C) REGULATIONS.—
                                                                                                      (i) IN GENERAL.—The Administrator shall issue reg-
                                                                                                   ulations to establish standards—
                                                                                                            (I) for disclosures with respect to financial au-
                                                                                                         dits under subparagraph (A)(ii); and
                                                                                                            (II) for client surveys under subparagraph
                                                                                                         (B)(ii), including standards for oversight of such
                                                                                                         surveys and for dissemination and use of client in-
                                                                                                         formation.
                                                                                                      (ii) MAXIMUM PRIVACY PROTECTION.—Regulations
                                                                                                   under this subparagraph, shall, to the extent prac-
                                                                                                   ticable, provide for the maximum amount of privacy
                                                                                                   protection.
                                                                                                      (iii) INSPECTOR GENERAL.—Until the effective date of
                                                                                                   regulations under this subparagraph, any client sur-
                                                                                                   vey and the use of such information shall be approved
                                                                                                   by the Inspector General who shall include such ap-
                                                                                                   proval in his semi-annual report.
                                                                                            (8) CYBERSECURITY ASSISTANCE.—
                                                                                                 (A) IN GENERAL.—The Department of Homeland Secu-
                                                                                              rity, and any other Federal department or agency in co-
                                                                                              ordination with the Department of Homeland Security,
                                                                                              may leverage small business development centers to pro-
                                                                                              vide assistance to small business concerns by dissemi-
                                                                                              nating information relating to cybersecurity risks and
                                                                                              other homeland security matters to help small business
                                                                                              concerns in developing or enhancing cybersecurity infra-
                                                                                              structure, awareness of cyber threat indicators, and cyber
                                                                                              training programs for employees.
                                                                                                 (B) DEFINITIONS.—In this paragraph, the terms ‘‘cyberse-
                                                                                              curity risk’’ and ‘‘cyber threat indicator’’ have the mean-




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                                                                                              ings given such terms, respectively, under section 2200 of
                                                                                              the Homeland Security Act of 2002.




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                                                                                    (b)(1) Financial assistance shall not be made available to any ap-
                                                                                  plicant if approving such assistance would be inconsistent with a
                                                                                  plan for the area involved which has been adopted by an agency
                                                                                  recognized by the State government as authorized to do so and ap-
                                                                                  proved by the Administration in accordance with the standards and
                                                                                  requirements established pursuant to this section.
                                                                                    (2) An applicant may apply to participate in the program by sub-
                                                                                  mitting to the Administration for approval a plan naming those au-
                                                                                  thorized in subsection (a) to participate in the program, the geo-
                                                                                  graphic area to be served, the services that it would provide, the
                                                                                  method for delivering services, a budget, and any other information
                                                                                  and assurances the Administration may require to insure that the
                                                                                  applicant will carry out the activities eligible for assistance. The
                                                                                  Administration is authorized to approve, conditionally approve or
                                                                                  reject a plan or combination of plans submitted. In all cases, the
                                                                                  Administration shall review plans for conformity with the plan sub-
                                                                                  mitted pursuant to paragraph (1) of this subsection, and with a
                                                                                  view toward providing small business with the most comprehensive
                                                                                  and coordinated assistance in the State or part thereof to be
                                                                                  served.
                                                                                         (3) ASSISTANCE TO OUT-OF-STATE SMALL BUSINESS CON-
                                                                                       CERNS.—
                                                                                              (A) IN GENERAL.—At the discretion of the Administra-
                                                                                           tion, the Administration is authorized to permit a small
                                                                                           business development center to provide advice, information
                                                                                           and assistance, as described in subsection (c), to small
                                                                                           businesses located outside the State, but only to the extent
                                                                                           such businesses are located within close geographical prox-
                                                                                           imity to the small business development center, as deter-
                                                                                           mined by the Administration.
                                                                                              (B) DISASTER RECOVERY ASSISTANCE.—
                                                                                                   (i) IN GENERAL.—At the discretion of the Adminis-
                                                                                                trator, the Administrator may authorize a small busi-
                                                                                                ness development center to provide advice, informa-
                                                                                                tion, and assistance, as described in subsection (c), to
                                                                                                a small business concern located outside of the State,
                                                                                                without regard to geographic proximity to the small
                                                                                                business development center, if the small business
                                                                                                concern is located in an area for which the President
                                                                                                has declared a major disaster.
                                                                                                   (ii) TERM.—
                                                                                                         (I) IN GENERAL.—A small business development
                                                                                                      center may provide advice, information, and as-
                                                                                                      sistance to a small business concern under clause
                                                                                                      (i) for a period of not more than 2 years after the
                                                                                                      date on which the President declared a major dis-
                                                                                                      aster for the area in which the small business con-
                                                                                                      cern is located.
                                                                                                         (II) EXTENSION.—The Administrator may, at the
                                                                                                      discretion of the Administrator, extend the period
                                                                                                      described in subclause (I).
                                                                                                   (iii) CONTINUITY OF SERVICES.—A small business de-
                                                                                                velopment center that provides counselors to an area




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                                                                                                described in clause (i) shall, to the maximum extent
                                                                                                practicable, ensure continuity of services in any State




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                                                                                                                                      16

                                                                                                 in which the small business development center other-
                                                                                                 wise provides services.
                                                                                                   (iv) ACCESS TO DISASTER RECOVERY FACILITIES.—For
                                                                                                 purposes of this subparagraph, the Administrator
                                                                                                 shall, to the maximum extent practicable, permit the
                                                                                                 personnel of a small business development center to
                                                                                                 use any site or facility designated by the Adminis-
                                                                                                 trator for use to provide disaster recovery assistance.
                                                                                     (c)(1) Applicants receiving grants under this section shall assist
                                                                                  small businesses in solving problems concerning operations, manu-
                                                                                  facturing, engineering, technology exchange and development, per-
                                                                                  sonnel administration, marketing, sales, merchandising, finance,
                                                                                  accounting, business strategy development, and other disciplines
                                                                                  required for small business growth and expansion, innovation, in-
                                                                                  creased productivity, and management improvement, and for de-
                                                                                  creasing industry economic concentrations. Applicants receiving
                                                                                  grants under this section may also assist small businesses by pro-
                                                                                  viding, where appropriate, education on the requirements applica-
                                                                                  ble to small businesses under the regulations issued under section
                                                                                  38 of the Arms Export Control Act (22 U.S.C. 2778) and on compli-
                                                                                  ance with those requirements.
                                                                                     (2) A small business development center shall provide services as
                                                                                  close as possible to small businesses by providing extension serv-
                                                                                  ices and utilizing satellite locations when necessary. The facilities
                                                                                  and staff of each Small Business Development Center shall be lo-
                                                                                  cated in such places as to provide maximum accessibility and bene-
                                                                                  fits to the small businesses which the center is intended to serve.
                                                                                  To the extent possible, it also shall make full use of other Federal
                                                                                  and State government programs that are concerned with aiding
                                                                                  small business. A small business development center shall have—
                                                                                          (A) a full-time staff, including a full-time director who shall
                                                                                        have the authority to make expenditures under the center’s
                                                                                        budget and who shall manage the program activities;
                                                                                          (B) access to business analysts to counsel, assist, and inform
                                                                                        small business clients;
                                                                                          (C) access to technology transfer agent to provide state or art
                                                                                        technology to small businesses through coupling with national
                                                                                        and regional technology data sources;
                                                                                          (D) access to information specialists to assist in providing in-
                                                                                        formation searches and referrals to small business;
                                                                                          (E) access to part-time professional specialists to conduct re-
                                                                                        search or to provide counseling assistance whenever the need
                                                                                        arises;
                                                                                          (F) access to laboratory and adaptive engineering facilities;
                                                                                        and
                                                                                          (G) access to cybersecurity specialists to counsel, assist, and
                                                                                        inform small business concern clients, in furtherance of the
                                                                                        Small Business Development Center Cyber Strategy developed
                                                                                        under section 1841(a) of the National Defense Authorization
                                                                                        Act for Fiscal Year 2017.
                                                                                     (3) Services provided by a small business development center
                                                                                  shall include, but shall not be limited to—




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                                                                                          (A) furnishing one-to-one individual counseling to small busi-
                                                                                        nesses, including—




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                                                                                                 (i) working with individuals to increase awareness of
                                                                                              basic credit practices and credit requirements;
                                                                                                 (ii) working with individuals to develop business plans,
                                                                                              financial packages, credit applications, and contract pro-
                                                                                              posals;
                                                                                                 (iii) working with the Administration to develop and pro-
                                                                                              vide informational tools for use in working with individ-
                                                                                              uals on pre-business startup planning, existing business
                                                                                              expansion, and export planning; and
                                                                                                 (iv) working with individuals referred by the local offices
                                                                                              of the Administration and Administration participating
                                                                                              lenders;
                                                                                            (B) assisting in technology transfer, research and develop-
                                                                                         ment, including applied research, and coupling from existing
                                                                                         sources to small businesses, including—
                                                                                                 (i) working to increase the access of small businesses to
                                                                                              the capabilities of automated flexible manufacturing sys-
                                                                                              tems;
                                                                                                 (ii) working through existing networks and developing
                                                                                              new networks for technology transfer that encourage part-
                                                                                              nership between the small business and academic commu-
                                                                                              nities to help commercialize university-based research and
                                                                                              development and introduce university-based engineers and
                                                                                              scientists to their counterparts in small technology-based
                                                                                              firms; and
                                                                                                 (iii) exploring the viability of developing shared produc-
                                                                                              tion facilities, under appropriate circumstances;
                                                                                            (C) in cooperation with the Department of Commerce and
                                                                                         other relevant Federal agencies, actively assisting small busi-
                                                                                         nesses in exporting by identifying and developing potential ex-
                                                                                         port markets, facilitating export transactions, developing link-
                                                                                         ages between United States small business firms and
                                                                                         prescreened foreign buyers, assisting small businesses to par-
                                                                                         ticipate in international trade shows, assisting small busi-
                                                                                         nesses in obtaining export financing, and facilitating the devel-
                                                                                         opment or reorientation of marketing and production strate-
                                                                                         gies; where appropriate, the Small Business Development Cen-
                                                                                         ter and the Administration may work in cooperation with the
                                                                                         State to establish a State international trade center for these
                                                                                         purposes;
                                                                                            (D) developing a program in conjunction with the Export-Im-
                                                                                         port Bank and local and regional Administration offices that
                                                                                         will enable Small Business Development Centers to serve as
                                                                                         an information network and to assist small business applicants
                                                                                         for Export-Import Bank financing programs, and otherwise
                                                                                         identify and help to make available export financing programs
                                                                                         to small businesses;
                                                                                            (E) working closely with the small business community,
                                                                                         small business consultants, State agencies, universities and
                                                                                         other appropriate groups to make translation services more
                                                                                         readily available to small business firms doing business, or at-
                                                                                         tempting to develop business, in foreign markets;




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                                                                                            (F) in providing assistance under this subsection, applicants
                                                                                         shall cooperate with the Department of Commerce and other




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                                                                                         relevant Federal agencies to increase access to available export
                                                                                         market information systems, including the CIMS system;
                                                                                           (G) assisting small businesses to develop and implement
                                                                                         strategic business plans to timely and effectively respond to
                                                                                         the planned closure (or reduction) of a Department of Defense
                                                                                         facility within the community, or actual or projected reductions
                                                                                         in such firms’ business base due to the actual or projected ter-
                                                                                         mination (or reduction) of a Department of Defense program or
                                                                                         a contract in support of such program—
                                                                                                 (i) by developing broad economic assessments of the ad-
                                                                                              verse impacts of—
                                                                                                       (I) the closure (or reduction) of the Department of
                                                                                                    Defense facility on the small business concerns pro-
                                                                                                    viding goods or services to such facility or to the mili-
                                                                                                    tary and civilian personnel currently stationed or
                                                                                                    working at such facility; and
                                                                                                       (II) the termination (or reduction) of a Department
                                                                                                    of Defense program (or contracts under such program)
                                                                                                    on the small business concerns participating in such
                                                                                                    program as a prime contractor, subcontractor or sup-
                                                                                                    plier at any tier;
                                                                                                 (ii) by developing, in conjunction with appropriate Fed-
                                                                                              eral, State, and local governmental entities and other pri-
                                                                                              vate sector organizations, the parameters of a transition
                                                                                              adjustment program adaptable to the needs of individual
                                                                                              small business concerns;
                                                                                                 (iii) by conducting appropriate programs to inform the
                                                                                              affected small business community regarding the antici-
                                                                                              pated adverse impacts identified under clause (i) and the
                                                                                              economic adjustment assistance available to such firms;
                                                                                              and
                                                                                                 (iv) by assisting small business concerns to develop and
                                                                                              implement an individualized transition business plan.
                                                                                           (H) maintaining current information concerning Federal,
                                                                                         State, and local regulations that affect small businesses and
                                                                                         counsel small businesses on methods of compliance. Counseling
                                                                                         and technology development shall be provided when necessary
                                                                                         to help small businesses find solutions for complying with envi-
                                                                                         ronmental, energy, health, safety, and other Federal, State,
                                                                                         and local regulations;
                                                                                           (I) coordinating and conducting research into technical and
                                                                                         general small business problems for which there are no ready
                                                                                         solutions;
                                                                                           (J) providing and maintaining a comprehensive library that
                                                                                         contains current information and statistical data needed by
                                                                                         small businesses;
                                                                                           (K) maintaining a working relationship and open commu-
                                                                                         nications with the financial and investment communities, legal
                                                                                         associations, local and regional private consultants, and local
                                                                                         and regional small business groups and associations in order
                                                                                         to help address the various needs of the small business com-
                                                                                         munity;




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                                                                                           (L) conducting in-depth surveys for local small business
                                                                                         groups in order to develop general information regarding the




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                                                                                         local economy and general small businesses strengths and
                                                                                         weaknesses in the locality;
                                                                                            (M) in cooperation with the Department of Commerce, the
                                                                                         Administration and other relevant Federal agencies, actively
                                                                                         assisting rural small businesses in exporting by identifying
                                                                                         and developing potential export markets for rural small busi-
                                                                                         nesses, facilitating export transactions for rural small busi-
                                                                                         nesses, developing linkages between United States’ rural small
                                                                                         businesses and prescreened foreign buyers, assisting rural
                                                                                         small businesses to participate in international trade shows,
                                                                                         assisting rural small businesses in obtaining export financing
                                                                                         and developing marketing and production strategies;
                                                                                            (N) assisting rural small businesses—
                                                                                                 (i) in developing marketing and production strategies
                                                                                              that will enable them to better compete in the domestic
                                                                                              market—
                                                                                                 (ii) by providing technical assistance needed by rural
                                                                                              small businesses;
                                                                                                 (iii) by making available managerial assistance to rural
                                                                                              small business concerns; and
                                                                                                 (iv) by providing information and assistance in obtaining
                                                                                              financing for business startups and expansion;
                                                                                            (O) in conjunction with the United States Travel and Tour-
                                                                                         ism Administration, assist rural small business in developing
                                                                                         the tourism potential of rural communities by—
                                                                                                 (i) identifying the cultural, historic, recreational, and
                                                                                              scenic resources of such communities;
                                                                                                 (ii) providing assistance to small businesses in devel-
                                                                                              oping tourism marketing and promotion plans relating to
                                                                                              tourism in rural areas; and
                                                                                                 (iii) assisting small business concerns to obtain capital
                                                                                              for starting or expanding businesses primarily serving
                                                                                              tourists;
                                                                                            (P) maintaining lists of local and regional private consultants
                                                                                         to whom small business can be referred;
                                                                                            (Q) providing information to small business concerns regard-
                                                                                         ing compliance with regulatory requirements;
                                                                                            (R) developing informational publications, establishing re-
                                                                                         source centers of reference materials, and distributing compli-
                                                                                         ance guides published under section 312(a) of the Small Busi-
                                                                                         ness Regulatory Enforcement Fairness Act of 1996;
                                                                                            (S) providing small business owners with access to a wide
                                                                                         variety of export-related information by establishing on-line
                                                                                         computer linkages between small business development cen-
                                                                                         ters and an international trade data information network with
                                                                                         ties to the Export Assistance Center program;
                                                                                            (T) providing information and assistance to small business
                                                                                         concerns with respect to establishing drug-free workplace pro-
                                                                                         grams on or before October 1, 2006; øand¿
                                                                                            (U) encouraging and assisting the provision of succession
                                                                                         planning to small business concerns with a focus on
                                                                                         transitioning to cooperatives, as defined in section 7(a)(35), and
                                                                                         qualified employee trusts (collectively referred to in this sub-




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                                                                                         paragraph as ‘‘employee-owned business concerns’’), including
                                                                                         by—




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                                                                                              (i) providing training to individuals to promote the suc-
                                                                                           cessful management, governance, or operation of a busi-
                                                                                           ness purchased by those individuals in the formation of an
                                                                                           employee-owned business concern;
                                                                                              (ii) assisting employee-owned business concerns that
                                                                                           meet applicable size standards established under section
                                                                                           3(a) with education and technical assistance with respect
                                                                                           to financing and contracting programs administered by the
                                                                                           Administration;
                                                                                              (iii) coordinating with lenders on conducting outreach on
                                                                                           financing through programs administered by the Adminis-
                                                                                           tration that may be used to support the transition of own-
                                                                                           ership to employees;
                                                                                              (iv) supporting small business concerns in exploring or
                                                                                           assessing the possibility of transitioning to an employee-
                                                                                           owned business concern; and
                                                                                              (v) coordinating with the cooperative development cen-
                                                                                           ters of the Department of Agriculture, the land grant ex-
                                                                                           tension network, the Manufacturing Extension Partner-
                                                                                           ship, community development financial institutions, em-
                                                                                           ployee ownership associations and service providers, and
                                                                                           local, regional and national cooperative associationsø.¿;
                                                                                         ø(U)¿ (V) in conjunction with the United States Patent and
                                                                                      Trademark Office, providing training—
                                                                                              (i) to small business concerns relating to—
                                                                                                    (I) domestic and international intellectual property
                                                                                                 protections; and
                                                                                                    (II) how the protections described in subclause (I)
                                                                                                 should be considered in the business plans and growth
                                                                                                 strategies of the small business concerns; and
                                                                                              (ii) that may be delivered—
                                                                                                    (I) in person; or
                                                                                                    (II) through a websiteø.¿; and
                                                                                         (W) providing information and assistance to small business
                                                                                      concerns, including by disseminating relevant information from
                                                                                      the Department of Labor and other Federal agencies, on how to
                                                                                      establish and improve—
                                                                                              (i) work-based learning opportunities (as defined in sec-
                                                                                           tion 3 of the Carl D. Perkins Career and Technical Edu-
                                                                                           cation Act of 2006 (20 U.S.C. 2302));
                                                                                              (ii) apprenticeship programs registered under the Act of
                                                                                           August 16, 1937 (50 Stat. 664, chapter 663; commonly
                                                                                           known as the ‘‘National Apprenticeship Act’’; 29 U.S.C. 50
                                                                                           et seq.);
                                                                                              (iii) pre-apprenticeship programs; and
                                                                                              (iv) job training programs.
                                                                                    (4) A small business development center shall continue to up-
                                                                                  grade and modify its services, as needed, in order to meet the
                                                                                  changing and evolving needs of the small business community.
                                                                                    (5) In addition to the methods prescribed in section 21(c)(2), a
                                                                                  small business development center shall utilize and compensate as
                                                                                  one of its resources qualified small business vendors, including but




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                                                                                  not limited to, private management consultants, private consulting
                                                                                  engineers and private testing laboratories, to provide services as




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                                                                                  described in this subsection to small businesses on behalf of such
                                                                                  small business development center.
                                                                                     (6) In any State (A) in which the Administration has not made
                                                                                  a grant pursuant to paragraph (1) of subsection (a), or (B) in which
                                                                                  no application for a grant has been made by a Small Business De-
                                                                                  velopment Center pursuant to paragraph (6) of such subsection
                                                                                  within 60 days after the effective date of any grant under sub-
                                                                                  section (a)(1) to such center or the date the Administration notifies
                                                                                  the grantee funded under subsection (a)(1) that funds are available
                                                                                  for grant applications pursuant to subsection (a)(6), whichever date
                                                                                  occurs last, the Administration may make grants to a non-profit
                                                                                  entity in that State to carry out the activities specified in para-
                                                                                  graph (6) of subsection (a). Any such applicants shall comply with
                                                                                  the matching funds requirement of paragraph (4) of subsection (a).
                                                                                  Such grants shall be effective for any fiscal year only to the extent
                                                                                  provided in advance in appropriations Acts, and each State shall be
                                                                                  limited to the pro rata share provisions of paragraph (6) of sub-
                                                                                  section (a).
                                                                                          (7) In performing the services identified in paragraph (3), the
                                                                                        Small Business Development Centers shall work in close co-
                                                                                        operation with the Administration’s regional and local offices,
                                                                                        the local small business community, and appropriate State and
                                                                                        local agencies.
                                                                                          (8) The Associate Administrator for Small Business Develop-
                                                                                        ment Centers, in consultation with the Small Business Devel-
                                                                                        opment Centers, shall develop and implement an information
                                                                                        sharing system. Subject to amounts approved in advance in ap-
                                                                                        propriations Acts, the Administration may make grants or
                                                                                        enter cooperative agreements with one or more centers to carry
                                                                                        out the provisions of this paragraph. Said grants or cooperative
                                                                                        agreements shall be awarded for periods of no more than five
                                                                                        years duration. The matching funds provisions of subsection (a)
                                                                                        shall not be applicable to grants or cooperative agreements
                                                                                        under this paragraph. The system shall—
                                                                                               (A) allow Small Business Development Centers partici-
                                                                                             pating in the program to exchange information about their
                                                                                             programs; and
                                                                                               (B) provide information central to technology transfer.
                                                                                     (d) Where appropriate, the Small Business Development Centers
                                                                                  shall work in conjunction with the relevant State agency and the
                                                                                  Department of Commerce to develop a comprehensive plan for en-
                                                                                  hancing the export potential of small businesses located within the
                                                                                  State. This plan may involve the cofunding and staffing of a State
                                                                                  Office of International Trade within the State Small Business De-
                                                                                  velopment Center, using joint State and Federal funding, and any
                                                                                  other appropriate measures directed at improving the export per-
                                                                                  formance of small businesses within the State.
                                                                                     (e) Laboratories operated and funded by the Federal Government
                                                                                  are authorized and directed to cooperate with the Administration
                                                                                  in developing and establishing programs to support small business
                                                                                  development centers by making facilities and equipment available;
                                                                                  providing experiment station capabilities in adaptive engineering;
                                                                                  providing library and technical information processing capabilities;




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                                                                                  and providing professional staff for consulting. The Administration
                                                                                  is authorized to reimburse the laboratories for such services.




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                                                                                     (f) The National Science Foundation is authorized and directed
                                                                                  to cooperate with the Administration and with the Small Business
                                                                                  Development Centers in developing and establishing programs to
                                                                                  support the centers.
                                                                                     (g) NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AND RE-
                                                                                  GIONAL TECHNOLOGY TRANSFER CENTERS.—The National Aero-
                                                                                  nautics and Space Administration and regional technology transfer
                                                                                  centers supported by the National Aeronautics and Space Adminis-
                                                                                  tration are authorized and directed to cooperate with small busi-
                                                                                  ness development centers participating in the program.
                                                                                     (h) ASSOCIATE ADMINISTRATOR FOR SMALL BUSINESS DEVELOP-
                                                                                  MENT CENTERS.—
                                                                                           (1) APPOINTMENT AND COMPENSATION.—The Administrator
                                                                                        shall appoint an Associate Administrator for Small Business
                                                                                        Development Centers who shall report to an official who is not
                                                                                        more than one level below the Office of the Administrator and
                                                                                        who shall serve without regard to the provisions of title 5, gov-
                                                                                        erning appointments in the competitive service, and without
                                                                                        regard to chapter 51, and subchapter III of chapter 53 of such
                                                                                        title relating to classification and General Schedule pay rates,
                                                                                        but at a rate not less than the rate of GS–17 of the General
                                                                                        Schedule.
                                                                                           (2) DUTIES.—
                                                                                                (A) IN GENERAL.—The sole responsibility of the Associate
                                                                                             Administrator for Small Business Development Centers
                                                                                             shall be to administer the small business development cen-
                                                                                             ter program. Duties of the position shall include recom-
                                                                                             mending the annual program budget, reviewing the annual
                                                                                             budgets submitted by each applicant, establishing appro-
                                                                                             priate funding levels therefore, selecting applicants to par-
                                                                                             ticipate in this program, implementing the provisions of
                                                                                             this section, maintaining a clearinghouse to provide for the
                                                                                             dissemination and exchange of information between small
                                                                                             business development centers and conducting audits of re-
                                                                                             cipients of grants under this section.
                                                                                                (B) CONSULTATION REQUIREMENTS.—In carrying out the
                                                                                             duties described in this subsection, the Associate Adminis-
                                                                                             trator shall confer with and seek the advice of the Board
                                                                                             established by subsection (i) and Administration officials
                                                                                             in areas served by the small business development centers;
                                                                                             however, the Associate Administrator shall be responsible
                                                                                             for the management and administration of the program
                                                                                             and shall not be subject to the approval or concurrence of
                                                                                             such Administration officials.
                                                                                     (i)(1) There is established a National Small Business Develop-
                                                                                  ment Center Advisory Board (herein referred to as ‘‘Board’’) which
                                                                                  shall consist of nine members appointed from civilian life by the
                                                                                  Administrator and who shall be persons of outstanding qualifica-
                                                                                  tions known to be familiar and sympathetic with small business
                                                                                  needs and problems. No more than three members shall be from
                                                                                  universities or their affiliates and six shall be from small busi-
                                                                                  nesses or associations representing small businesses. At the time
                                                                                  of the appointment of the Board, the Administrator shall designate




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                                                                                  one-third of the members and at least one from each category
                                                                                  whose term shall end in two years from the date of appointment,




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                                                                                  a second third whose term shall end in three years from the date
                                                                                  of appointment, and the final third whose term shall end in four
                                                                                  years from the date of appointment. Succeeding Boards shall have
                                                                                  three-year terms, with one-third of the Board changing each year.
                                                                                     (2) The Board shall elect a Chairman and advise, counsel, and
                                                                                  confer with the Associate Administrator for Small Business Devel-
                                                                                  opment Centers in carrying out the duties described in this section.
                                                                                  The Board shall meet at least semiannually and at the call of the
                                                                                  Chairman of the Board. Each member of the Board shall be enti-
                                                                                  tled to be compensated at the rate not in excess of the per diem
                                                                                  equivalent of the highest rate of pay for individuals occupying the
                                                                                  position under GS–18 of the General Schedule for each day en-
                                                                                  gaged in activities of the Board and shall be entitled to be reim-
                                                                                  bursed for expenses as a member of the Board.
                                                                                     (j)(1) Each small business development center shall establish an
                                                                                  advisory board.
                                                                                     (2) Each small business development center advisory board shall
                                                                                  elect a chairman and advise, counsel, and confer with the director
                                                                                  of the small business development center on all policy matters per-
                                                                                  taining to the operation of the small business development center,
                                                                                  including who may be eligible to receive assistance from, and how
                                                                                  local and regional private consultants may participate with the
                                                                                  small business development center.
                                                                                     (k) PROGRAM EXAMINATION AND ACCREDITATION.—
                                                                                          (1) EXAMINATION.—Not later than 180 days after the date of
                                                                                        enactment of this subsection, the Administration shall develop
                                                                                        and implement a biennial programmatic and financial exam-
                                                                                        ination of each small business development center established
                                                                                        pursuant to this section.
                                                                                          (2) ACCREDITATION.—The Administration may provide finan-
                                                                                        cial support, by contract or otherwise, to the association au-
                                                                                        thorized by subsection (a)(3)(A) for the purpose of developing a
                                                                                        small business development center accreditation program.
                                                                                          (3) EXTENSION OR RENEWAL OF COOPERATIVE AGREEMENTS.—
                                                                                               (A) IN GENERAL.—In extending or renewing a cooperative
                                                                                             agreement of a small business development center, the Ad-
                                                                                             ministration shall consider the results of the examination
                                                                                             and accreditation program conducted pursuant to para-
                                                                                             graphs (1) and (2).
                                                                                               (B) ACCREDITATION REQUIREMENT.—After September 30,
                                                                                             2000, the Administration may not renew or extend any co-
                                                                                             operative agreement with a small business development
                                                                                             center unless the center has been approved under the ac-
                                                                                             creditation program conducted pursuant to this subsection,
                                                                                             except that the Associate Administrator for Small Business
                                                                                             Development Centers may waive such accreditation re-
                                                                                             quirement, in the discretion of the Associate Adminis-
                                                                                             trator, upon a showing that the center is making a good
                                                                                             faith effort to obtain accreditation.
                                                                                     (l) CONTRACT AUTHORITY.—The authority to enter into contracts
                                                                                  shall be in effect for each fiscal year only to the extent and in the
                                                                                  amounts as are provided in advance in appropriations Acts. After
                                                                                  the administration has entered a contract, either as a grant or a




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                                                                                  cooperative agreement, with any applicant under this section, it
                                                                                  shall not suspend, terminate, or fail to renew or extend any such




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                                                                                  contract unless the Administration provides the applicant with
                                                                                  written notification setting forth the reasons therefore and afford-
                                                                                  ing the applicant an opportunity for a hearing, appeal, or other ad-
                                                                                  ministrative proceeding under the provisions of chapter 5 of title 5,
                                                                                  United States Code. If any contract or cooperative agreement under
                                                                                  this section with an entity that is covered by this section is not re-
                                                                                  newed or extended, any award of a successor contract or coopera-
                                                                                  tive agreement under this section to another entity shall be made
                                                                                  on a competitive basis.
                                                                                     (m) PROHIBITION ON CERTAIN FEES.—A small business develop-
                                                                                  ment center shall not impose or otherwise collect a fee or other
                                                                                  compensation in connection with the provision of counseling serv-
                                                                                  ices under this section.
                                                                                     (n) VETERANS ASSISTANCE AND SERVICES PROGRAM.—
                                                                                           (1) IN GENERAL.—A small business development center may
                                                                                        apply for a grant under this subsection to carry out a veterans
                                                                                        assistance and services program.
                                                                                           (2) ELEMENTS OF PROGRAM.—Under a program carried out
                                                                                        with a grant under this subsection, a small business develop-
                                                                                        ment center shall—
                                                                                                (A) create a marketing campaign to promote awareness
                                                                                             and education of the services of the center that are avail-
                                                                                             able to veterans, and to target the campaign toward vet-
                                                                                             erans, service-disabled veterans, military units, Federal
                                                                                             agencies, and veterans organizations;
                                                                                                (B) use technology-assisted online counseling and dis-
                                                                                             tance learning technology to overcome the impediments to
                                                                                             entrepreneurship faced by veterans and members of the
                                                                                             Armed Forces; and
                                                                                                (C) increase coordination among organizations that as-
                                                                                             sist veterans, including by establishing virtual integration
                                                                                             of service providers and offerings for a one-stop point of
                                                                                             contact for veterans who are entrepreneurs or owners of
                                                                                             small business concerns.
                                                                                           (3) AMOUNT OF GRANTS.—A grant under this subsection shall
                                                                                        be for not less than $75,000 and not more than $250,000.
                                                                                           (4) FUNDING.—Subject to amounts approved in advance in
                                                                                        appropriations Acts, the Administration may make grants or
                                                                                        enter into cooperative agreements to carry out the provisions
                                                                                        of this subsection.
                                                                                     (o) CYBER STRATEGY TRAINING FOR SMALL BUSINESS DEVELOP-
                                                                                  MENT CENTERS.—
                                                                                           (1) DEFINITIONS.—In this subsection—
                                                                                                (A) the term ‘‘cyber strategy’’ means resources and tac-
                                                                                             tics to assist in planning for cybersecurity and defending
                                                                                             against cyber risks and attacks; and
                                                                                                (B) the term ‘‘lead small business development center’’
                                                                                             means a small business development center that receives
                                                                                             reimbursement from the Administrator under paragraph
                                                                                             (5).
                                                                                           (2) CERTIFICATION PROGRAM.—The Administrator shall estab-
                                                                                        lish a cyber counseling certification program, or designate 1 or




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                                                                                        more substantially similar governmental or private cybersecu-
                                                                                        rity certification programs, to certify the employees of lead




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                                                                                         small business development centers in providing cyber plan-
                                                                                         ning assistance to small business concerns.
                                                                                           (3) NUMBER OF CERTIFIED EMPLOYEES.—The Administrator
                                                                                         shall ensure that the number of employees of each lead small
                                                                                         business development center who are certified in providing
                                                                                         cyber planning assistance is not less than the lesser of—
                                                                                                (A) 5; or
                                                                                                (B) 10 percent of the total number of employees of the
                                                                                             lead small business development center.
                                                                                           (4) CYBER STRATEGY.—In carrying out paragraph (2), the Ad-
                                                                                         ministrator, to the extent practicable, shall consider any cyber
                                                                                         strategy methods included in the Small Business Development
                                                                                         Center Cyber Strategy developed under section 1841(a)(3)(B) of
                                                                                         the National Defense Authorization Act for Fiscal Year 2017
                                                                                         (Public Law 114–328; 130 Stat. 2662).
                                                                                           (5) REIMBURSEMENT FOR CERTIFICATION.—
                                                                                                (A) IN GENERAL.—Subject to the availability of appro-
                                                                                             priations, the Administrator may reimburse each lead
                                                                                             small business development center for costs relating to the
                                                                                             certification of 1 or more employees of the lead small busi-
                                                                                             ness center in providing cyber planning assistance under
                                                                                             a program established or designated under paragraph (2).
                                                                                                (B) LIMITATION.—The total amount reimbursed by the
                                                                                             Administrator under subparagraph (A) may not exceed
                                                                                             $350,000 in any fiscal year.
                                                                                              *           *            *              *            *          *           *

                                                                                                                                      Æ




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