[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1538 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 1538
To amend the Small Business Act to provide for contracting preferences
and other benefits for emerging business enterprises, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 10, 2023
Mr. Carson (for himself, Mr. Thompson of Mississippi, Mr. Espaillat,
Mr. Garcia of Illinois, Ms. Sanchez, Ms. Garcia of Texas, Mr. Case, and
Mr. Landsman) introduced the following bill; which was referred to the
Committee on Small Business
_______________________________________________________________________
A BILL
To amend the Small Business Act to provide for contracting preferences
and other benefits for emerging business enterprises, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Emerging Business Encouragement Act
of 2023''.
SEC. 2. EMERGING BUSINESS ENTERPRISES.
(a) Designation.--Section 3 of the Small Business Act (15 U.S.C.
632) is amended by adding at the end the following:
``(gg) Emerging Business Enterprise.--
``(1) In general.--In this Act, the term `emerging business
enterprise' means a concern designated by the Administrator in
accordance with this section.
``(2) Criteria for designation.--Not later than 90 days
after the date of enactment of this subsection, the
Administrator shall establish criteria for designation of a
small business concern as an emerging business enterprise which
shall include the following:
``(A) Number of employees.--That the highest number
of employees of the concern during the year preceding
the date of application is less than the larger of--
``(i) 10 percent of the number of employees
that a small business concern within that
industry category may employ, if that small
business concern is so classified by reason of
a size standard under subsection (a) pertaining
to the number of employees of the concern; or
``(ii) 25 employees.
``(B) Age of business.--That the small business
concern has been in operation for less than 5 years on
the date of application.
``(C) Salary requirements.--That the small business
concern does not, in the Administrator's determination,
pay to an individual who owns any part of the concern
or who is in a management position a salary greater
than 200 percent of the mean annual salary for an
individual in the Managers of Companies and Enterprises
sector (as assigned a North American Industry
Classification System code beginning with 55) or the
equivalent from the most recent employment and wage
estimates developed by the Secretary of Labor.
``(3) Deadline.--The Administrator shall complete review of
an application for designation as an emerging business
enterprise and either issue or deny such designation not later
than one year of receipt of such application.
``(4) Termination of designation.--A designation as an
emerging business enterprise shall terminate on the date on
which the concern is no longer in compliance with the criteria
under paragraph (2), except that--
``(A) with respect to the requirement in paragraph
(2)(A), such designation shall terminate only if the
concern employs 50 percent or more employees than the
number of employees that a small business concern
within that industry category may employ; and
``(B) with respect to the requirement in paragraph
(2)(C), such designation shall terminate only if the
concern exceeds such requirement and employs not more
than 10 percent of the number of employees that a small
business concern within that industry category may
employ, if that small business concern is so classified
by reason of a size standard under subsection (a)
pertaining to the number of employees of the concern.
``(5) Public notification.--The Administrator shall take
appropriate action to publicize the establishment of the
procedures for designations under this paragraph, including by
conducting outreach to eligible small business concerns.
``(6) Contractor training.--The Administrator shall provide
training on Federal procurement specifically for emerging
business enterprises on an Internet website of the
Administrator, which shall be available to the public at no
charge.''.
(b) Contracting Preference.--Section 15(g)(2) of the Small Business
Act (15 U.S.C. 644(g)(2)) is amended by adding at the end the
following:
``(G) Emerging business enterprises.--
``(i) In general.--The head of each Federal
agency shall, after consultation with the
Administrator, establish goals for
participation by emerging business enterprises
in not less than 3 percent of all prime
contracts and subcontracts of such agency for
each fiscal year.
``(ii) Requirements.--The head of a Federal
agency--
``(I) shall make consistent efforts
to annually expand participation by
emerging business enterprises from each
industry category in contracts of the
agency; and
``(II) shall, subject to clause
(iii), award a contract to an emerging
business enterprise if the head of a
Federal agency determines the agency
will not meet the goals established
under this subparagraph for a fiscal
year.
``(iii) Preference.--The preference
described in clause (ii)(II) shall take
priority over any preference for procurement
from the procurement list established pursuant
to section 8503 of title 41, United States
Code, or the Federal Prison Industries catalog
described under section 4124(d) of title 18,
United States Code.
``(iv) Reports.--
``(I) Reports from agencies.--At
the conclusion of each fiscal year, the
head of each Federal agency shall
report to the Administrator on the
extent of participation by emerging
business enterprises in procurement
contracts of such agency. Such reports
shall contain appropriate
justifications for failure to meet the
goals established under this
subparagraph.
``(II) Reports to congress.--The
Administrator shall annually compile
and analyze the reports submitted by
agencies pursuant to subclause (I) and
shall submit to the President and the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the
House of Representatives the
compilation and analysis, which shall
include the following:
``(aa) The goals in effect
for each agency and the
agency's performance in
attaining such goals.
``(bb) An analysis of any
failure to achieve individual
agency goals and the actions
planned by such agency (that
have been approved by the
Administrator) to achieve the
goals in the succeeding fiscal
year.
``(cc) The total number and
dollar value of prime contracts
and subcontracts awarded to
emerging business enterprises
for each agency.
``(III) Annual presidential report
on the state of small business.--The
President shall include the information
required by subclause (II) in each
annual report to the Congress on the
state of small business prepared
pursuant to section 303(a) of the Small
Business Economic Policy Act of 1980
(15 U.S.C. 631b(a)).''.
(c) Fee Waivers.--Section 7(a) of the Small Business Act (15 U.S.C.
636(a)) is amended by adding at the end the following:
``(38) Fee waivers.--The Administrator may not collect an
origination fee or a guarantee fee described in paragraph (18)
in connection with a loan made under this subsection to an
emerging business enterprise, unless--
``(A) the President's budget for the upcoming
fiscal year, submitted to Congress pursuant to section
1105(a) of title 31, United States Code, includes a
cost for the program established under this paragraph
that is above zero; and
``(B) the Administrator determines carrying out
this paragraph will have no adverse effect on the
waivers provided under paragraph (31)(G) or (33)(E)(ii)
for a fiscal year.
``(39) Emerging business enterprises.--
``(A) Reports.--On the date that is 1 year after
the end of the first fiscal year for which a guaranteed
loan is made to an emerging business enterprise under
this subsection, and annually thereafter, each lender
making such a loan shall submit to the Administrator a
report with respect to the preceding fiscal year on the
total number and dollar amount of such loans made and
the number of waivers issued under paragraph (38).
``(B) Verification.--A lender shall verify with the
Administrator the status of a concern as an emerging
business enterprise before making a loan guaranteed
under this subsection to such emerging business
enterprise.
``(C) Penalty.--If a concern received a loan under
this subsection and fraudulently misrepresented the
status of the concern as an emerging business
enterprise, that concern shall--
``(i) repay the amount of the loan to the
lender (from which amount the lender shall
repay the amount of any guarantee paid on the
loan to the Administrator); and
``(ii) pay a fine to the Administrator in
an amount determined by the Administrator.''.
SEC. 3. RULEMAKING.
(a) In General.--Not later 1 year after the date of enactment of
this subsection and for each industry category for which the
Administrator of the Small Business Administration established a size
standard under section 3(a) of the Small Business Act (15 U.S.C.
632(a)), the Administrator shall issue a rule--
(1) establishing procedures for designating a small
business concern in each such industry category as an emerging
business enterprise that include the criteria under subsection
(gg)(3) of section 3 of the Small Business Act (15 U.S.C. 632),
as added by this Act, and a process for appealing designation
decisions of the Administrator;
(2) establishing procedures for certification by the
Administrator as an emerging business enterprise;
(3) requiring a small business concern to annually submit
documentation to the Administrator to establish eligibility for
designation as an emerging business enterprise; and
(4) establishing compliance requirements for emerging
business enterprises.
(b) Definitions.--In this section:
(1) Small business concern.--The term ``small business
concern'' has the meaning given under section 3 of the Small
Business Act (15 U.S.C. 632).
(2) Emerging business enterprise.--The term ``emerging
business enterprise'' has the meaning given under subsection
(gg) of section 3 of the Small Business Act (15 U.S.C. 632), as
added by this Act.
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