[House Report 106-784]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-784
======================================================================
BusinessLINC ACT OF 2000
_______
July 25, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Talent, from the Committee on Small Business, submitted the
following
R E P O R T
[To accompany H.R. 4464]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 4464) to amend the Small Business Act to authorize
the Administrator of the Small Business Administration to make
grants and to enter into cooperative agreements to encourage
the expansion of business-to-business relationships and the
provision of certain information, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``BusinessLINC Act of 2000''.
SEC. 2. AUTHORIZATION.
Section 8 of the Small Business Act (15 U.S.C. 637) is amended by
adding at the end the following:
``(m) BusinessLINC Grants and Cooperative Agreements.--
``(1) In general.--In accordance with this subsection, the
Administrator may make grants to and enter into cooperative
agreements with any coalition of private entities, public
entities, or any combination of private and public entities--
``(A) to expand business-to-business relationships
between large and small businesses; and
``(B) to provide businesses, directly or indirectly,
with online information and a database of companies
that are interested in mentor-protege programs or
community-based, state-wide, or local business
development programs.
``(2) Matching requirement.--Subject to subparagraph (B), the
Administrator may make a grant to a coalition under paragraph
(1) only if the coalition provides for activities described in
paragraph (1)(A) or (1)(B) an amount, either in kind or in
cash, equal to the grant amount.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $6,600,000, to
remain available until expended, for each of fiscal years 2001
through 2003.''.
Purpose
The purpose of H.R. 4464, BusinessLINC, is to promote
business growth in inner cities and economically distressed
rural areas by matching large and small firms into business-to-
business partnering and mentoring relationships. H.R. 4464 will
accomplish this by providing seed funding to third party
entities such as local Chambers of Commerce to promote such
relationships. In addition to seed funding, such entities will
also receive funds for technical assistance programs to small
businesses to supplement the mentor-protege relationships
established as a result of BusinessLINC.
BusinessLINC will help small businesses by providing online
information and a database of companies that are interested in
mentor-protege programs.
Grants may be made to a coalition/combination of private
and public entities only if the coalition/combination provides
an amount, either in kind or in cash, equal to the grant amount
for the purposes above.
Need for Legislation
Despite the unprecedented economic prosperity we are
experiencing in this country, there are several areas of the
country that have still not achieved parity. These areas are
primarily inner cities, rural areas, and Native American
communities. BusinessLINC will enable business opportunities
for small businesses who would otherwise have no access to
outside larger markets. While these small businesses have
strong potential, they are located in communities where
corporate America would not necessarily look. BusinessLINC will
break that barrier. When the BusinessLINC model has been
applied in the past, small businesses have seen growth as much
as 45 percent. With this assistance, the local community will
be charting its own path to recovery. The ``LINC'' in
BusinessLINC stands for ``Learning, Information, Networking,
and Collaboration.''
Committee Action
The Committee on Small Business held no separate hearings
on H.R. 4464. However, during the Committee's hearing on the
Reauthorization of the Small Business Administration programs
and the Agency's Fiscal Year 2001 Budget Request held at 10:00
a.m. on March 1, 2000, SBA Administrator Alvarez outlined the
Agency's position on BusinessLINC. At the time of the
testimony, BusinessLINC had been linked with the New Markets
Initiative (NMI) and, although the SBA was appropriated $1.5
million for BusinessLINC in FY 2000, they were unable to spend
the money as NMI had not yet passed. So, essentially, the money
appropriated for BusinessLINC was, at that time, not
authorized.
The Administrator's written statement included reference to
SBA's request for $6.6 million for the BusinessLINC Program.
Administrator Alvarez went on to discuss, in her written
statement, the purpose of BusinessLINC which she stated
``encourages large businesses to work with small business
owners as technical advisors and mentors--especially in
America's rural areas and inner cities.'' Finally, the written
statement of the Administrator stated that ``$1.25 million for
reservation-based BusinessLINC'' would be made available to
``tap into the entrepreneurial drive within the Native American
community.''
The Administrator stated that BusinessLINC would involve
funding to ``not-for-profit'' or other economic development
organizations, such as Chambers of Commerce, to facilitate
mentoring between large and small businesses. The SBA had been
working with the National Chamber of Commerce to create mentor
networking that would effectively ``mediate and create''
mentor-protege relationships between large and small
businesses, with the sole focus being on small businesses
located in inner cities and rural areas.
CONSIDERATION OF H.R. 4464
At 10:20 a.m. on May 25, 2000, the Committee on Small
Business met to consider H.R. 4464. Following a brief opening
statement by the Chairman, the Ranking Democrat, and Mr. Davis,
the author of the bill and Ranking Democrat on the Empowerment
Subcommittee, H.R. 4454 was declared open for amendment.
Mr. Davis offered an amendment in the nature of a
substitute to H.R. 4454 which was accepted by unanimous voice
vote. Chairman Talent then moved the bill be reported, and at
10:30 a.m., by unanimous voice vote, a quorum being present,
the Committee passed H.R. 4464, as amended, and ordered it
reported.
Section-by-Section Analysis
Section 1. Short Title
Designates the bill as the ``BusinessLINC Act of 2000.''
Section 2. Authorization
This Section amends the Small Business Act by adding a new
paragraph (m), ``BusinessLINC grants and cooperative
agreements.''
Paragraph (1) allows the Administrator to make grants or
enter into cooperative agreements with any coalition/
combination of private and/or public entities to (a) promote
business-to-business relationships between large and small
businesses and (b) to provide online information and a database
of companies that are interested in mentor-protege programs.
It is the opinion of the Committee that private and/or
public entities eligible for grants should be limited to
Chambers of Commerce and other not-for-profit business
organizations. The Committee also intends that grant money be
provided to large businesses. Further, if a grant is made to a
combination of entities, one entity must be designated as the
lead grantee.
It is further the opinion of the Committee that promotion
of business-to-business relationships between large and small
businesses referenced in paragraph (a) above should include the
facilitation of such relationships as mentor-protege, prime/
subcontractor, and teaming.
The Committee intends that an element to be considered by
the Administrator when evaluating a grant proposal, shall be
the training of small businesses or ``proteges.'' An additional
evaluation element intended by the Committee shall be
measurable goals to be achieved through the businss-to-business
partnerships.
The Committee further intends that the online database
referenced in paragraph (b) above, should make use of the SBA's
current PRO-Net database to the greatest extent practicable.
The Committee is concerned that online privacy issues should
also be addressed by the SBA in the implementation of the
databases. Further, it is the Committee's opinion that the
databases should be vigilantly maintained by the SBA to ensure
that only firms eligible to be mentors should be included in
the mentor database, and only those firms eligible to serve as
intermediaries should be included in the intermediary database.
Paragraph (2) specifies that the Administrator may make
grants as long as the coalition/combination of public and/or
private entities provides an amount, either in kind or in cash,
equal to the grant amount for the purposes delineated in
paragraph (1) above.
The Committee is well aware that it may be difficult for
some entities to raise their entire match during the
application stage. Those entities that are unable to raise the
required match, but have submitted to the Administrator a
reasonable plan to meet the requirement, may be granted a
conditional approval from the Administrator and be allowed to
draw one dollar of federal matching funds for every dollar of
private funds raised. This conditional approval shall be made
with the expectation that the required funding commitments will
be obtained within two years of the conditional approval.
The Committee believes that it is important to give
entities the flexibility to obtain the required private
operational assistance funds, however, from a safety and
soundness standpoint, federal funds should not be placed at
greater risk than private capital. Paragraph (3) specifies the
authorization for the program for fiscal years 2001 and 2003.
This amount shall be $6,600,000 for each of the three fiscal
years.
Congressional Budget Office Cost Estimate
Pursuant to clause 7(d) of rule XIII of the Rules of the
House of Representatives the Committee includes the following
cost estimate supplied by the Congressional Budget Office
pursuant to section 403 of the Budget Act of 1974 in lieu of a
committee cost estimate. The Congressional Budget Office
estimate is included in this report pursuant to clause
2(l)(3)(C) of rule XI.
H.R. 4464--A bill to amend the Small Business Act to authorize the
Administrator of the Small Business Administration to make
grants and to enter into cooperative agreements to encourage
the expansion of business-to-business relationships and the
provision of certain information
Summary: H.R. 4464 would reauthorize the BusinessLINC
(learning, information, networking, and collaboration) program,
through which the Small Business Administration (SBA) makes
grants and enters into cooperative agreements to expand
relationships between large and small businesses. The bill
would authorize the SBA to make grants to coalitions of private
and public entities, provided that such entities match the
grant with an equal amount of cash or in-kind contributions.
Finally, the bill would authorize the appropriation of $6.6
million for each of fiscal years 2001, 2002, and 2003 for
BusinessLINC grants.
Based on the historical spending patterns of this program
and other programs administered by the SBA, CBO estimates that
implementing H.R. 4464 would cost about $19 million over the
2001-2005 period. H.R. 4464 would not affect direct spending or
receipts; therefore, pay-as-you-go procedures would not apply.
H.R. 4464 contains no private-sector or intergovernmental
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Any costs to state and local governments would be the result of
complying with new grant conditions and would be voluntary.
Estimated Cost to the Federal Government: For the purpose
of this estimate, CBO assumes that H.R. 4464 will be enacted
during fiscal year 2000, and that amounts authorized in the
bill will be provided each year. The estimated budgetary impact
on H.R. 4464 is shown in the following table. The costs of this
legislation fall within budget function 370 (commerce and
housing credit).
------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------
2000 2001 2002 2003 2004 2005
------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
BusinessLINC Spending Under
Current Law:
Budget Authority \1\...... 2 0 0 0 0 0
Estimated Outlays......... 1 1 0 0 0 0
Proposed Changes:
Authorization Level....... 0 7 7 7 0 0
Estimated Outlays......... 0 3 6 6 3 1
BusinessLINC Spending Under
H.R. 4464:
Authorization Level \1\... 2 7 7 7 0 0
Estimated Outlays......... 1 4 6 6 3 1
------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year.
Pay-as-You-Go Considerations: None.
Intergovernmental and Private-Sector Impact: H.R. 4464
contains no intergovernmental mandates as defined in UMRA. The
bill would authorize the Administrator of the SBA to make
grants and enter into cooperative agreements with any coalition
of entities, including public entries, that further certain
goals of the BusinessLINC program and provide 100 percent
matching funds. Participation in the program is voluntary, and
thus any costs incurred by participating state and local
governments would be voluntary.
Estimate Prepared by: Federal Costs, Mark Hadley; Impact on
State, Local, and Tribal Governments, Shelley Finlayson; Impact
on the Private Sector, Patrice Gordon.
Estimate Approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
Oversight Findings
In accordance with clause 4(c)(2) of rule X of the Rules of
the House of Representatives, the Committee states that no
oversight findings or recommendations have been made by the
Committee on Government Reform with respect to the subject
matter contained in H.R. 4454. In accordance with clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the oversight findings and recommendations of
the Committee on Small Business with respect to the subject
matter contained in H.R. 4454 are incorporated into the
descriptive portions of this report.
Statement of Constitutional Authority
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, section 8, clause 18, of the
Constitution of the United States.
Congressional Accountability Act
The Committee finds that H.R. 4454 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 Congressional Accountability Act (P.L. 104-1).
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 (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SECTION 8 OF THE SMALL BUSINESS ACT
Sec. 8. (a) * * *
* * * * * * *
(m) BusinessLINC Grants and Cooperative Agreements.--
(1) In general.--In accordance with this subsection,
the Administrator may make grants to and enter into
cooperative agreements with any coalition of private
entities, public entities, or any combination of
private and public entities--
(A) to expand business-to-business
relationships between large and small
businesses; and
(B) to provide businesses, directly or
indirectly, with online information and a
database of companies that are interested in
mentor-protege programs or community-based,
state-wide, or local business development
programs.
(2) Matching requirement.--Subject to subparagraph
(B), the Administrator may make a grant to a coalition
under paragraph (1) only if the coalition provides for
activities described in paragraph (1)(A) or (1)(B) an
amount, either in kind or in cash, equal to the grant
amount.
(3) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $6,600,000, to remain available until
expended, for each of fiscal years 2001 through 2003.