Donald Manzullo

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, today, I wish to recognize the outstanding dedication and leadership of Melanie Sabelhaus for her efforts and accomplishments in supporting small business nationwide. Melanie became the Deputy Administrator of the Small Business Administration in April of 2002, and has since helped to lead the agency to greater efficiency and effectiveness while drawing attention to women-owned businesses. She is leaving her position this month to pursue opportunities in the private sector. After 15 years at IBM, Melanie Sabelhaus learned firsthand some of the challenges that face entrepreneurs when she started a property rental and management company in 1986. Melanie's entrepreneurial drive and business savvy grew her small business into a $10 million dollar a year enterprise. This woman is a success story. When Melanie arrived at the SBA, she pledged to help create more opportunities for small business owners and entrepreneurs using her extensive business knowledge. She fulfilled her promise to an extent I could not have imagined. She, along with Administrator Hector Barreto and the rest of the agency, followed the President's Management agenda. SBA has made solid progress on most areas of the President's Management agenda. Melanie was responsible for the successful implementation of the Execution Scorecard, which introduced ways to measure and rank district offices and SBA programs. The SBA also introduced the Business Matchmaking program while Melanie was in office, which has already resulted in 25,000 one-on-one meetings between small business owners and Federal agencies or large companies in the private sector. As a woman entrepreneur herself, Melanie has given particular attention and support to women in small businesses. When she arrived at the agency in 2002, there were only 11,285 7(a) and 504 loans granted to women entrepreneurs for the entire year. In the past year, the number of loans to women has increased to over 18,000 for the two main loan programs at the agency. She is the leading advocate for women in business in this country, and has been a tremendous role model for women everywhere. Melanie Sabelhaus has been the recipient of numerous philanthropy, business and government leadership awards, including 2002 Outstanding Volunteer Fundraiser of the Year Award for Maryland, awarded by the Association of Fundraising Professionals; the Artemis Award from the European-American Women's Conference; the Distinguished Women's Award from the Girl Scouts of Central Maryland; the Superstar Award from the Alzheimer's Association of Central Maryland, Maryland's Top 100 Women from The Daily Record; and the Outstanding Business Achievement Award from Ohio University. I am sure that wherever Melanie Sabelhaus goes after her departure this month, she will make a similarly lasting mark there as she has at the SBA. Although I am sorry to see her go, my wife, Freda, and I wish her the best of luck in all of her future endeavors.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, last month, I had the honor and privilege of attending the annual Memorial Day Vietnam Wall observance, in which one of my constituents and friends, the late Army PFC John Harold Berg of Rockford, Illinois, was honored for his service to our country. John was gravely injured in Vietnam, but he passed up his 100 percent disability status when he returned because he wanted to help others. Despite a host of serious medical issues, John served as a veterans representative for 25 years at the Illinois Department of Employment Security before he died in 2003 from cancer caused by shrapnel lodged in his brain from his Vietnam injury. On Memorial Day, I sat with John's widow, Lynn, and several of John's friends as his name was one of just four this year officially added to the Vietnam Wall. It was a remarkable day for a remarkable man. I have attached a newspaper article written by Judy Emerson of the Rockford Register Star that describes John's contributions and his character perfectly: Adding Soldiers to the Wall One hundred years from now, someone will read the name ``John H. Berg'' cut into black granite on The Wall in Washington, D.C., and they will assume he died in Vietnam in the spring of 1968. Berg was fatally wounded April 7, 1968, in combat near Khe Sahn, but it took him 37\1/2\ years to die. When he did, on Oct. 10, 2003, it was in his rural Rockford home surrounded by family. But the Vietnam War took his life, just as surely as if he had died that spring day long ago as he lay in the dirt with blood streaming from the hole in his skull. Medics postponed his death that day. Military doctors patched him up as well as they could and sent him home to Rockford with a plate covering the hole in his skull and shrapnel still embedded in his brain. He dragged his left leg, and his left hand was useless. He slurred his words. Back in Rockford, he couldn't find a job. A talented musician, he was bitterly disappointed that he couldn't play piano, organ, violin and guitar, as he once did. But he went to college. He re-learned how to play his instruments with only his right hand and arm. He sought the company of other Vietnam veterans who understood the struggle. He found a job that gave him purpose. For 25 years, he was a veterans representative at the Illinois Department of Employment Security. Over the years, he helped thousands of veterans find jobs and get benefits to which they were entitled. Many were disabled, as he was. In 2002, doctors found the tumor growing under the plate in Berg's head. His widow, Lynn Berg, said doctors found shrapnel when they tried to carve away the tumor and buy her husband a little more time. Even fighting the relentless growth of a malignant tumor, Berg continued to work. He lived longer than anybody expected. When he died, his buddies at VietNow, which he'd helped to start, began the process to have his name added to The Wall, the Vietnam Memorial in Washington. The Department of Defense concluded that Berg's fatal wound was incurred in Vietnam in 1968 and that he qualified to have his name listed on the memorial. And so, Berg's name was carved on The Wall earlier this month. A small diamond after the name signifies a confirmed combat death. His name was placed as close as possible to those of other soldiers who suffered their fatal injuries on the same day. The thinking is that they should be together. His father, 86-year-old Harold John Berg, said that the memorial was waiting for his son, despite the 37\1/2\- year reprieve from death. ``We saw the wall once,'' the elder Berg said. ``And now we go the rest of the way. He's on it.'' John H. Berg of Rockford was fatally wounded in Vietnam April 7, 1968. He died Oct. 10, 2003. What he did in between is the story. Talented boy Harold Berg was a machinist and inspector who retired from Camcar years ago. His health is poor but his memory and spirits are good. His wife, 80-year-old Vergene, has Alzheimer's disease. They spend their days in side-by-side hospital beds in the Cherry Valley home of their daughter Hilary Belcher, who cares for them. Her husband, Nick, and 9- year-old daughter, Chenoa, help. Young John Berg wanted to be a musician. His mother was a long-time organist for their church, and her firstborn son also played the organ, as well as piano, violin and guitar. A 1965 graduate of East High School, John took some classes at Rock Valley College until he was drafted in the summer of 1967. ``We tried to talk him into going into the Air Force, but he thought he'd get this over with in two years,'' his dad said. By January 1968, 20-year-old John was in Vietnam. His early letters home to his parents, three younger sisters and a brother revealed a diminishing innocence as reality and the futility of the mission sank in. ``I only hope this year goes fast and I come back in one piece,'' he wrote two weeks before his injury. His wife, Lynn, said John could remember what happened during the firefight on April 7, 1968, up until he was wounded. He was feeding an ammunition belt into a machine gun being fired by another soldier when he turned to dive for cover from incoming mortar. It's still unclear whether he was shot in the head or hit by shrapnel or both. He was unconscious or semiconscious for weeks. The Western Union telegram arrived early one weekday morning as Harold Berg was getting ready for work. ``Deep regret . . . very seriously ill list . . . penetrating fragment wound to the head.'' Vergene couldn't stop crying. Hilary Belcher, who's 15 years younger than John, doesn't remember too much about the time, except that her parents were distraught. The telegrams kept coming with updates on her brother's condition, and after John was transferred to a hospital in Denver, Colo., the family drove out there to see him. ``I remember walking down a long hallway and doorway after doorway, there were all these men with holes in their heads, just like John,'' Belcher said. ``We took him out for a while. You could hardly understand him when he talked.'' Months later, when he came home, she said, ``I ran out to him saying `John's home! John's home!' He screamed. He thought I was going to knock him down. ``I used to run to him and he'd throw me up in the air.'' There was plenty of trauma to go around. ``Those first eight years, he was very angry,'' Belcher said. ``When you get a head injury, it changes your whole personality.'' John was bitter that he couldn't play his instruments. His disability was obvious, and nobody would hire him. ``It took him years to find a job. He even applied to a gas station to pump gas, but they told him, `You only have one hand, ' '' Belcher said. He decided to go back to Rock Valley College. There, he met Reuben Johnson, dean of community services and the producer and founder of Starlight Theatre. Johnson helped Berg learn to play the piano, organ, guitar and violin with one hand. It was a turning point, as was the job Berg landed in July 1977 as a veterans representative at the Illinois Department of Employment Security. He was good at it, said Jack Snyder, who also is a disabled Vietnam veteran. The two men worked together at the department for close to 25 years. ``I've never seen a person give so much heart and caring to his job as John did,'' Snyder said. ``We had guys coming in who were basically homeless. He would take them home until they got on their feet. ``I've seen him cry at his desk over some of these situations, over the misuse and abuse the military has given some of these people.'' Berg often referred clients to the Winnebago County Veterans Assistance office in Memorial Hall. Herbert L. Crenshaw, also a Vietnam veteran, works there. He and Berg worked together to get help for thousands of vets over the years, he said. ``He worked with this office to get veterans back on their feet, to get jobs, get assistance,'' Crenshaw said. ``He had walked in their shoes. He had the same difficulties and disabilities they had.'' Berg, like many of his clients, had a full disability designation from the Department of Veterans Affairs. ``He could have sat home and drawn a disability,'' Crenshaw said. ``He chose to work.'' Berg had a network that he could use to get practical assistance for veterans and offer them moral support. He helped found VietNow, a support group for Vietnam veterans that started in Rockford and then became a national organization. It still thrives. Nick Parnello, one of the original VietNow members and now president of the Vietnam Veterans Honor Society, said John was ``the only guy that always showed up'' at the early meetings. ``Some of the guys felt that we should give up because there were so few of us back then,'' Parnello said. ``But if John could show up in his disabled condition, it was an inspiration to all of us. ``Everybody he came in contact with was changed because of his commitment to them.'' Marriage and family In November 1991, Berg met Lynn Walquist of Rockford. Her daughter and son-in-law, who knew Berg through mutual acquaintances in the veterans circle, fixed them up. ``I've got four kids--two in college--and all these animals,'' recalled Lynn, who's always had a cat and at least one dog. ``What's wrong with him?'' The kids always had rock music blaring when Berg came to pick her up for a date. ``He said, `Do you ever listen to classical music?' '' she said, she didn't. He taught her to love it as he did. Lynn's scrapbook holds tickets from concerts they attended at the Lyric Opera in Chicago and elsewhere. By then, Berg could make music on the piano and other instruments with one hand. He sang with the Rock Valley Chorale and with a Mendelssohn Club group. They fell in love and were married April 25, 1992. ``It was the best day of our lives,'' Lynn Berg said. ``He told me: `I'll never say no to you,' and he kept his promise.'' Over the years they attended VietNow conventions and events. She became active as an ``associate,'' which is what veterans'' spouses are called in the group. ``He always said that he felt very fortunate. He was only in Vietnam for three months,'' Lynn Berg said. ``The others who had been there longer were the ones who came back with so many problems.'' His friends became her friends. Her children and grandchildren were his. He's smiling in every picture his wife has in her numerous photo albums. But it would be a mistake to say Berg's transformation from an angry young man to a person with purpose and a zest for living was easy, said his sister, Hilary Belcher. ``He had to grow into a new personality and lifestyle and everything,'' Belcher said. ``He was gung-ho when he went into the service, and then he lost it and he got angry. ``But he got through it, and his gung ho came back.'' Retired U.S. Army Col. Fremont Piercefield knew Berg well from their mutual work in various organizations, including the VFW, Disabled American Veterans and the Winnebago County Veterans Association. ``He was the gentlest, kindest man,'' the colonel said. ``He was there when you expected him and when you needed him.'' He was the same way on the home front, his wife said. He took care of the house and the cars and the lawn, but he also taught her how to do those things. She needs to know them now that he's gone. He would see a need and answer it before other people noticed, she said. For instance, he was concerned that one of her daughters was in danger walking from the library back to her dorm at Northern Illinois University after using a computer late at night. He bought her a computer for her room. There were health issues over the years. Berg took medication to deal with headaches and seizures that came with the head injury. He learned to compensate for the partial paralysis of his left side and minimized the limp. He never regained use of his left hand. It looked just as it did when he was 20 years old, his wife and sister said, as if it had been frozen in time the day he was injured. The end of something In May of 2002, Berg began having excruciating, debilitating headaches and more frequent seizures, his wife said. Brain scans showed bright spots of shrapnel but the brain tumor was not detected for a couple of months. He had surgery, but the tumor was malignant, and doctors indicated it was just a matter of time. Lynn Berg remembers one doctor predicting John had about nine months. He exceeded that by about seven months. VietNow treasurer and good friend Darrell Gilgan visited Berg as he was recuperating from the surgery in a Beloit nursing home. Berg's radio was missing one day and Gilgan asked him about it. ``He gave it to the guy in the next bed, a B-17 pilot during World War II,'' Gilgan said. ``He was like that.'' Berg continued to work as much as he could, but the tumor was growing again and the pain was awful, his wife said. During his last months, she cared for him at their home, with help from the Northern Illinois Hospice Association. He died Oct. 10, 2003. A few months later, Gilgan began the paperwork necessary to have Berg considered for addition to the Vietnam Memorial. The key element in Berg's favor was that the Department of Veterans Affairs had determined that his death was a result of the combat injury in 1968. Gilgan sent a letter to U.S. Rep. Don Manzullo, R-Egan, who sent it through the proper military channels. ``I had known John for years,'' said Manzullo, who will sit with Berg's family at a Memorial Day ceremony Monday at The Wall. ``Here is a guy who could have given up, but he refused to accept the fact that people told him he was 100 percent disabled. ``He went to work to serve as a witness and an example to people who are severely disabled.'' Some friends and family have traveled from the Rockford area to join Lynn Berg at the ceremony, which will include a special remembrance for her husband and three other veterans whose names have been added on The Wall. John Berg's parents are not well enough to go. His dad wishes he could, though. ``It's an end to something, I guess,'' Harold Berg said. ``He just got an extension on his death.'' That sad morning when the telegram came so many years ago and the day his son died all those years later occupy the same place of grief in his heart. ``We hoped the day would never come,'' his dad said, ``but then we found out he wasn't going to make it, after all.''

Mr. MANZULLO

Mr. MANZULLO. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, this Velazquez amendment is an effort to kill the Small Business Comp Demonstration program. The issue is more appropriately settled in the authorizing committee and not on an appropriations bill. First of all, the Comp Demonstration program does not cost the taxpayers one dime. There is no money appropriated for it. The Small Business Competitive Demonstration program began in 1988 with three purposes: first, to help emerging small businesses; second, to expand the participation of small businesses and industries that were traditionally dominated by large businesses; and, third, to test the competitiveness of small businesses in industries in which small businesses are well represented. The Comp Demo program was renewed in 1992, made permanent in 1997, and slightly expanded in 2004 as a part of larger bills that passed by wide margins or unanimous consent. Prior to the adoption of the Comp Demonstration program, small businesses were relegated to industries dominated by small businesses. Federal agencies could say they met their overall small business goals while not doing much to provide more contracts to small businesses in more higher-end, higher-paying industries. The Comp Demo program ended this practice all while showing that small businesses are still competitive in the industries where they have been historically well represented. These industries include construction, garbage collection, architectural engineering, surveying and mapping, non nuclear shipbuilding and ship repair, landscaping, and pest control. The Comp Demo program requires that small businesses receive a ``fair proportion'' of government contracts in each industry rather than just a few. The principles upon which the program were established are still valid. Emerging small businesses still need help. Small businesses need to participate in industries in which they have traditionally not had a chance to obtain a Federal contract. I would urge my colleagues to vote ``no'' on the Velazquez amendment.

Mr. MANZULLO

Mr. MANZULLO. Mr. Chairman, in looking at the figures for the gentlewoman from Illinois' (Ms. Bean) district, my colleague, for fiscal year 2004, there were 193 loans, that is 7(a) loans, totaling $31 million. So far, to date, in fiscal year 2005, 7 months, there are 177 loans at $26 million. That is almost there. At this rate, the number of loans in 2005 will greatly exceed the number of loans in 2004, showing that when the subsidy was cut and the taxpayers saved $79 million, more loans were given in the gentlewoman from Illinois' (Ms. Bean) district than when the subsidy was in effect.

Mr. MANZULLO. Mr. Chairman, I would note that as to the gentleman from Ohio's (Mr. LaTourette) district, in all of 2004, he had 185 7(a) loans totaling about $30,400,000. For 2005, year to date, it is 319 loans totaling nearly $29 million in loans. So it just amazes me that the gentleman from Ohio would say that we need to spend $79 million worth of taxpayers' money. Last year, I led the fight to add in $79 million for the 7(a) program. I was under the assumption that it was absolutely necessary to have the Federal Government subsidize small business people who wanted to get a loan. And I took a look at this, and I said what kind of a message does this send? There is no legal or constitutional right to have loans subsidized by the taxpayers of this country for people to get involved in businesses. And, in fact, that sends the wrong messages. People getting involved in business should realize that it is a free enterprise system that works. And what we did last year was something epochal; 7(a) loan program last year for the first time did not depend upon a government handout. Small business people do not need government handouts to start businesses. My dad was in the grocery store business. He was in the restaurant business. He would have never thought about applying for a loan that was subsidized by taxpayers. And so what happened last year, the subsidy was taken away. Taxpayers saved $80 million that was spent in areas, other areas, as important as it is. And the problem that I have is whenever you have the government subsidy, then the program is subject to shut down. That is what happened 2 years ago when the SBA 7(a) program in December ran out of money. The 7(a) program shut down. Small business people could not plan. The lenders had no idea what was going on and chaos broke loose in the 7(a) industry. We do not need the 7(a) subsidy. As the chairman of the Small Business Committee, I have spoken to people all over the country thanking me saying, you know, we are paying a little bit more for our loan, but we realize that by the small business people paying a little bit more for their loan and the amount up front gets rolled over to the eventual length of the term of the loan, that makes not only more money available, but it makes the program predictable. So I would encourage my colleagues to vote ``no'' on the Velazquez amendment. Vote ``no'' to spending $80 million in taxpayers' funds.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I rise to honor and thank a public servant who dedicated a large part of her life to public service and in particular to helping small businesses. Lorraine ``Rainnie'' Deane began her Federal career in 1977, serving as a staffer for the Committee on the Budget in the United States Senate and then later as a staffer for the Senate Committee on Small Business from 1981 to 1989. In 1989, ``Rainnie'' joined the Small Business Administration (SBA) and began working with the Office of Congressional and Legislative Affairs. Ms. Deane retired just recently on May 31, 2005, after 28 years of distinguished service. She has always been an outstanding help to us here in the Congress, and especially to my staff and their predecessors on the Committee on Small Business. Prior to entering Federal service, ``Rainnie'' worked for the private sector in the late 1960's to the late 1970's. In the mid to late 1960's, ``Rainnie'' was self-employed as a model in the metropolitan DC area. As a take-off on Britain's Twiggy, ``Rainnie'' was named ``The Face of '68'' and articles appeared in the London Financial Times and the Washington Post. She also appeared on network TV doing fashion shows. She was a true entrepreneur in her own right. In addition to her work for small business ``Rainnie,'' a breast cancer survivor, has been very active in raising funds for cancer research. ``Rainnie's Dream Team'' of over 50 friends and colleagues just participated in the June 3, 2005 Susan G. Komen Race for the Cure in Washington, DC, the most recent of her teams supporting this noble cause. In conclusion, Mr. Speaker, I would like to reiterate my congratulations and gratitude to ``Rainnie'' for her excellent service to the Federal government, small business, and society. I wish her a happy and well-deserved retirement.

Mr. MANZULLO

Mr. MANZULLO. Mr. Chairman, I thank Mr. Hunter, Chairman of the House Armed Services Committee, for including my amendment in the en bloc package. It is the intent of Congress and in the interest of national security that we maintain a strong and healthy industrial base if we are to remain the strongest nation on Earth. Even the founder of modern-day capitalism and free trade, Adam Smith, recognized the need for a nation to be able to depend upon its own industrial and agricultural base and not rely on foreign sources for its defense needs. We cannot maintain our role as global leader on a pure services-based economy. This amendment strengthens the Buy American Act, BAA, by restoring the original intent that more than 50 percent of the components in end products purchased by the Department of Defense shall be mined, produced, or manufactured inside the United States. The Buy American Act originally passed Congress during the Great Depression. The intent of Congress was that to qualify under the Buy American Act, a company had to have substantially all of a product made, grown, or mined in the United States. However, regulations implementing the Buy American Act have subsequently redefined ``substantially all'' to mean simply greater than 50 percent. Yet even that regulation has been weakened even further over the years. The Pentagon has used the ``public interest'' exception to waive the Buy American Act to treat the purchase of some foreign goods as if they were made in America. The original intent of the Buy American Act has been undermined by procurement memoranda of understanding, MOU, and other agreements with various foreign countries that permit the substitution of foreign components for components mined, produced, or manufactured inside the United States. These are not treaties or trade agreements approved by Congress--these were Executive Branch agreements not subject to review by Congress. Thus, the Buy American laws are basically worthless. There are so many holes in the law that it means nothing when a company says they comply with the Buy American Act. The exception--and it's a big one--is that the domestic content requirement doesn't have to be met if the items are procured from certain designated countries. The Pentagon has MOUs with 21 developed countries that waive the Buy American Act because the Defense Department has determined that, for these countries, complying with the BAA is ``inconsistent with the public interest.'' Basically, a company getting an award from the Pentagon can claim compliance with the Buy American Act without having to actually make anything here, as long as the components come from one of the 21 countries. Too often, agencies claim they need the best for the least, implying that Americans can't make the best or compete on price and quality. But ``best value'' is the standard, which means price shouldn't be the reigning factor. The best value for Americans is to have a strong industrial base and we can't do that if DOD forces U.S. companies to compete on price with foreign companies that are owned, subsidized, or controlled by their governments. It is important to remember that this amendment does not increase the share of the Buy American content, but simply codifies the content percentage of what is in existing regulation.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, today I stand in this great Chamber of democracy to adopt a Cuban political prisoner, Mr. Hector Fernando Maseda Gutierrez. Mr. Gutierrez was arrested on March 18, 2003 during a regime crackdown on dissidents, sentenced to 20 years in prison for associating himself with the Florida International University, participating in Radio Marti programs, writing articles for foreign magazines and possessing a typewriter, fax machine, and books in his home. I urge Fidel Castro to release him immediately. The Cuban authorities are refusing to give Mr. Gutierrez the medicine he needs for a skin ailment and several allergies. He is 62 years old, and therefore his health problems are of great concern to his family. Faced with crude living conditions and the possibility of merciless consequences to his family, Mr. Gutierrez is determined not to back down from his conviction for a free Cuba. Let me finish by saying that I am grateful that my distinguished colleague, the gentlewoman from Florida (Ms. Ros-Lehtinen), promoted this idea of adopting Cuban political prisoners.

Mr. MANZULLO

Mr. MANZULLO. Madam Chairman, I yield 1 minute to the gentleman from Michigan (Mr. Stupak).

Mr. MANZULLO. Madam Chairman, I yield myself such time as I may consume. My amendment strengthens the Buy American Act and restores the original intent that more than 50 percent of the components in end products purchased by the Department of Homeland Security shall be mined, produced, or manufactured inside the U.S. The Buy American Act originally passed Congress during the Great Depression. The intent of Congress was that to qualify under the Buy American Act, a company had to have substantially all of a product made, grown, or mined in the U.S. However, regulations implementing the Buy American Act have subsequently redefined ``substantially all'' to mean simply greater than 50 percent. Yet even that regulation has been weakened even further over the years. The Pentagon has used the public interest exception to waive the Buy American Act to treat the purchase of some foreign goods as if they were made in America. The original intent of the Buy American Act has been undermined by procurement memoranda of understanding among the U.S. and various foreign countries that permit the substitution of foreign components for components mined, produced, or manufactured inside the United States. These are not treaties or trade agreements approved by Congress. These were executive branch agreements not subject to review by Congress. Thus, the Buy American laws are basically worthless. There are so many holes in that law that it means nothing when a company says they comply with the Buy American Act. The exception, and it is a big one, is that the domestic content requirement does not have to be met if the items are procured from certain designated foreign countries. The Pentagon has memoranda of understanding with 21 developed countries that waive the Buy American Act because the Defense Department has determined that for these countries complying with the Buy American Act is ``inconsistent with the public interest.'' Basically, a company getting an award from the Pentagon can claim compliance with the Buy American Act without having to actually make anything in the United States as long as the components come from one of those 21 countries. Because the Department of Homeland Security has a very similar mission to the Department of Defense, protecting the territory of the U.S. from every possible enemy attack, we should not allow the DHS to waive the Buy American Act like the Pentagon has done without an affirmative vote by Congress. The intent of Congress is to maintain the vibrant industrial base so that we may remain the strongest Nation on Earth. Even the founder of modern-day capitalism and free trade, Adam Smith, recognized the need for a nation to be able to depend upon its own industrial and agricultural base and not rely on foreign sources for its defense needs. We cannot maintain our role as global leader on a pure services- based economy. It is also important to remember that this amendment does not increase the share of the Buy American Act. It simply codifies the content percentage of what is an existing regulation. Madam Chairman, I urge adoption of this amendment. Madam Chairman, I reserve the balance of my time.

Mr. MANZULLO. Madam Chairman, I yield myself such time as I may consume. The gentleman from Virginia (Mr. Tom Davis) argues that the best technology is outside the United States. The whole purpose of this amendment is to try to do something about the 3 million manufacturing jobs we have lost in the past several years. This simply says whenever anybody agrees to abide by the Buy American Act, at least buy 50 percent of the content from America. The existing Buy American Act says they have to buy zero. Congress passed a law that says buy everything from America. The Department of Defense and other agencies say that only means 50 percent. Now there is a memorandum of understanding from the White House that says, by the way, if they buy from the 21 countries, they do not even need to meet the 50 percent. This is very simple. It says if we want to keep technology in the United States, then buy the technology that is here. If a particular item has to be purchased and it is not made in the United States, then the Buy American Act simply does not apply. This is a commonsense amendment. I am going to be offering it to every single authorization bill that I can, and I would urge Members to vote ``aye'' on this.

Mr. MANZULLO. Madam Chairman, I offer an amendment.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, a country that manipulates its currency for the purposes of gaining an advantage in foreign markets violates many of the basic rules of the international monetary system established after World War II. However, despite repeated evidence that numerous countries are not letting market forces determine the value of their currency, our nation's laws set an extremely high threshold for us to take any effective action against other nations that intervene heavily in currency markets. The main purpose of the Fair Currency Practices Act of 2005 is to give our government agencies the tools they need to effectively combat illegal foreign government intervention in the global currency markets, particularly those efforts that are specifically designed to boost their local economy at the expense of the workers of the United States. The Fair Currency Practices Act of 2005 has three key provisions. The first would alter the criteria by which the Treasury Department is required to enter into negotiations with foreign countries that it labels as currency manipulators. The second would further clarify the working definition of manipulation under the Exchange Rates and International Economic Policy Coordination Act of 1998. Finally, the Fair Currency Practices Act of 2005 would instruct the U.S. Treasury Department to undertake an extensive examination of China's trade surplus, with particular attention paid to China's suspect trade data, and report on its findings. Current law requires that Treasury regularly make a determination of whether countries are manipulating the rate of exchange between their currency and the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining an unfair competitive advantage in international trade. If The Secretary of Treasury considers that such manipulation is occurring with respect to countries that (1) have material global current account surpluses and (2) have significant bilateral trade surpluses with the United States, the Secretary is required to take action to initiate negotiations with such foreign countries on an expedited basis. The Fair Currency Practices Act of 2005 amends the 1988 Omnibus Trade Act by eliminating the necessity that a country has both a significant bilateral trade surplus with the United States and a material global current account surplus, before the Secretary of the Treasury is required to enter into negotiations with the offending country to end its unfair practices. The change requires such negotiations if there is either a significant bilateral trade surplus with the United States or a material global current account surplus. Under current law, even if manipulation is found, Treasury is not required to act unless the offending country has both a significant bilateral trade surplus with the U.S. and a material global current account surplus. Treasury repeatedly fails to make a determination that certain countries, most notably China, are manipulating their currency. The 1988 Trade Act unfortunately does not specifically define ``manipulating.'' The Fair Currency Practices Act of 2005 clarifies that a country engaged in ``protracted large-scale intervention in one direction in the exchange market'' is manipulating its currency. However, the Fair Currency Practices Act of 2005 does not preclude the Secretary of Treasury from finding a country to be manipulating its rate of exchange based on any other factor or combination of factors. Finally, the bill addresses a problem with the way Treasury determines China's global current account and trade balances. Currently, the U.S. Treasury Department and the International Monetary Fund (IMF) use official Chinese statistics, which differ markedly from the aggregate statistics of its trading partners. This results in an inaccurate depiction of China's true surplus, which is presumably much larger than reported by China. The Fair Currency Practices Act of 2005 requires that Treasury undertake an examination of China's trade surplus and report to the Congress on why China's reported trade surpluses differ from those reported by its trading partner countries. Mr. Speaker, all nations, most particularly China, must let the free markets determine the value of their currency, not use government resources to artificially depress the value of a nation's currency to boost their economic growth. This scheme costs U.S. manufacturers billions of dollars in lost exports and decreased market share in the U.S. each year while putting American workers on the unemployment lines. We all know the specific problems in dealing with China--in 2004, the U.S. trade deficit with China reached a record level of $162 billion, the highest with any country in U.S. history. Yet, while China's economy has certainly grown and strengthened in recent years, China's currency has been tightly pegged to the U.S. dollar ever since 1994. Most economists believe that China's currency is overvalued at between 15 to 40 percent, making U.S. goods much more expensive in China and Chinese goods in the U.S. much more attractive to buy (at the expense of similarly-made U.S. products), contributing to as much as 25 percent of our bilateral trade deficit. China is long due for a correction in its currency value to reflect its global economic prowess. Americans stand ready to compete with anyone in the world. But the competition must be fair. The Fair Currency Practices Act of 2005 will give our government the tools necessary to hold all nations of the world accountable for currency manipulation (not just China) and level the playing field for our workers.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, in today's times, we often find that the principle values and activities of the United States are under attack. Too few defenses are offered against such attacks, even if they question the very fundamentals of how we live and work. It is therefore helpful and encouraging to see when someone takes this responsibility seriously. Here are some thoughts of Professor Michael R. Czinkota of Georgetown University who professes his belief on how to advance the cause of freedom. On Freedom and International Marketing (By Michael R. Czinkota) The Issue of Freedom You may ask what freedom has to do with international marketing. Freedom is about options. If there is no alternative, there is no freedom. A true alternative provides the opportunity to make a decision, to exercise virtue. In the blaze of the klieg lights, it is easy to make the ``right'' decision. That's not an exercise in virtue, because real alternatives are effectively removed. The true selection among alternatives takes place in the darkness of night when nobody is looking. The focus and aim of international marketing is on crossing borders. The goal is to provide more than one choice for customers, letting them pick from a selection of options in order to maximize their satisfaction. International marketing does so in all comers of the globe, the glamorous ones as well as in the small and remote ones where the efforts are not seen by others. By operating both in the limelight and also well outside of it, international marketing offers the freedom to exercise virtue both to the seller and the buyer-- be it in decisions of supplying or purchasing, pricing or selecting. Another key dimension of freedom is not to confine, allowing people to go outside of the box. As a concept, freedom knows no international boundaries. But national borders usually are the box where business and government find their limits. Such borders are a mere point of transition for international marketing. The discipline thrives on understanding of how to successfully cross national borders, on coping with the differences once the crossing is done, and on profitably reconciling any conflicts. International marketing contains the freedom of almost unlimited growth potential. Activities confined to domestic borders may well run into limits of expansion. International market opportunities relax these limits quickly. Instead of restrictions, the international marketing paradigm encourages the stripping away of restraints; instead of limitations, there is the encounter of opportunity. Freedom also means not being forced to do something one does not want to do (Hayek, 1971). There are economic migration pressures that force people to move from their rural homes into urban areas or from their developing countries into industrialized ones. Industrialized nations, in turn, speak about immigration pressure. For both sides, little if any freedom is involved here. Most individuals who do the moving would much rather stay home but cannot afford to do so due to economic exigencies. The recipient countries might not want to welcome the migrants but do so in response to political and humanitarian pressures. International marketing may have been part of what triggered some of these migrations, but it also can be instrumental in stemming the tide. It can provide the economic opportunity for individuals at home so that they need not migrate. Thus, it lets individuals become productive contributors to the global economy free from pressures to shift locations. When the long-standing rivalry between socialism and market orientation was resolved, market forces and the recognition of demand and supply directly affected human rights and the extent of freedom. With all humility and gratefulness we can conclude: Markets were right! In country after country, market forces have demonstrated typically greater efficiency and effectiveness in their ability to satisfy the needs of people. International marketing has been instrumental in stimulating these newly emerging market forces. In spite of complaints about the slowness of change, the insufficiency of wealth redistribution, and the inequities inherent in societal upheavals, a large majority of participants in market-oriented changes are now better off than they were before. Without the transition provided by international marketing, these changes would not have come about that swiftly. The Cost of Freedom One keeps healing about the large segment of the world population that is poor and therefore supposedly excluded from any international marketing efforts; the World Bank's former president called them the 3 billion $2-a-day poor (Wolfensohn, 2001). By contrast, international marketers see them as an attractive $6 billion-a-day opportunity for valuable exchanges! What's more is that international marketing provides the opportunity to acquire resources without the deployment of force. Why fight if you can trade? Countries that have been historic enemies such as France, England and Germany are now all united in their close collaboration through international marketing. (Farmer, 1987) The field is, therefore, at the very least contributing to freedom from war while providing additional choices for consumption. But the cost of freedom is rising. Terms like free trade or free choice are misleading since they all come with a price, which international marketers pay in terms of preparing their shipments, scrutinizing their customers, and conforming to government regulations. We all are paying a higher price due to global terrorism. As freedom suffers, so does international marketing. In most instances, terrorism is not an outgrowth of choice but rather the lack of it. Terrorists may succeed in reducing the freedom of others but not in increasing their own. Who is typically most affected by terrorist acts? Attacks aimed at businesses, such as the infamous bombings of U.S. franchises abroad, do not bring big corporations to their knees. The local participants, the local employees, the local investors, and the local customers are affected most. Who can protect themselves against such attacks and who can afford to protect targets? Only the more wealthy countries and companies can. They have the choice of where to place their funds, with whom to trade, and whether to hold the enemy at bay through a security bubble created by changing business forn1ats via exporting or franchising. The poor players do not have choices. The local firms, the nations with economies in development, and the poor customers continue to be exposed to further acts of terrorism with very limited indigenous ability to influence events. But international marketing can enable the disenfranchised to develop alternatives. Multinational firms can invest in the world's poorest markets and increase their own revenue while reducing poverty. With support from shareholders and the benefit of good governance, international marketers can, and should, continue in their role as social change agents. The discipline has value maximization at its heart. If it is worthwhile to fulfill the needs of large segments of people, even at low margins, then it will be done. International marketers after all have as their key desire the creation of new customers and suppliers and they are delighted when, in fulfillment of their aims, they can bring about freedom from extremes of hunger, sickness, and intolerance. Value and Freedom In a global setting, freedom can take on many dimensions. Privileges and obligations that are near and dear to some may well be cheap and easily disposed of by others. The views of one society may differ from views held in other regions of the world. Such differences then account for misunderstandings, surprises, and long-term conflicts. There are two value dimensions at work here, both of them highly relevant to international marketing. One may be circumscribed as the freedom and values of a market economy. To make them work governmental, managerial, and corporate virtue, vision, and veracity are required. Unless the world can believe in what institutions and their leaders say and do, it will be difficult to forge a global commitment between those doing the marketing and the ones being marketed to. It is therefore of vital interest to the proponents of freedom and international marketing to ensure that corruption, bribery, lack of transparency, and poor governance are exposed for their negative effects in any setting or society. The main remedy will be the collaboration of the global policy community in agreeing on what constitutes transgressions and swift punishment of the culprits involved, so that market forces can work free from distortion. A second and even more crucial issue is the value system we use in making choices. Some years ago, the Mars Climate Orbiter mission failed spectacularly as a result of the use of different values by the mission navigation teams. One team was using metric units and the other used the English system of measurement. This mistake caused the orbiter to get too close to the atmosphere, where it was destroyed (``NASA's Metric Confusion,'' 1999). There are major differences among what people value around the world. Contrasts include togetherness next to individuality, cooperation next to competition, modesty next to assertiveness, and self-effacement next to self- actualization. Often, global differences in value systems keep us apart and result in spectacularly destructive differences. How we value a life, for example, can be crucial in terms of how we treat individuals. What value we place on family, work, leisure time, or progress has a substantial effect on how we see and evaluate each other. Cultural studies tell us that there are major differences between and even within nations. International marketing, through its linkages via goods, services, ideas, and communications, can achieve important assimilations of value systems. On the consumer side, new products offer international appeal and encourage similar activities around the world: many of us wear denim, dance the same dances, and eat pizza and sushi (Marquardt & Reynolds, 1994). It has been claimed that local product offerings help define people and provide identity and that it is the local idiosyncrasies that make people beautiful (Johansson, 2004). Some even offer the persistence of the specific breakfast habits of the English and the French as evidence of local immutability in the face of globalization (de Mooij, 1998). Yet, we should remember that values are learned, not genetically implanted. As life's experiences grow more international and more similar, so do values. Therefore, every time international marketing forges a new linkage in thinking, new progress is made in shaping a greater global commonality in values. It may well be that international marketing's ability to align global values which makes it easier for countries, companies, and individuals to build bridges between them, may eventually become the field's greatest gift to the world. A joined occurrence How do freedom and international marketing match with today's discontent so forcefully expressed by the disgruntlement of the anti-globalists? Many claim that never before in history has there been so much evidence about such strong opposition to globalization and to Americans as harbingers of international marketing. Perhaps those making such claims are sadly mistaken. In looking at other ``globalizers'' in world history, such as the Vikings, the Mongols, the Tatars, and the Romans, there probably was both intellectual and physical opposition (or do we really believe that everybody enjoyed Genghis Khan?). But protest was never allowed to become very vocal, or to engage in repeated, large demonstrations or widespread pamphleteering. Due to rather harsh policies of dealing with the opposition, very few records of such resistance are available today. Consequently, comparisons with past events are difficult to make and are likely to be highly inaccurate. Today's news is good. The nations, institutions and individuals around the world are increasingly accepting freedom as the key foundation of the good life. We are discovering that international marketing, both as a discipline and as an activity is very closely interwoven with freedom--some even call it essential. It is the freedom Thomas Aquinas saw as the means to human excellence and happiness (Weigel, 2001) which international marketing helps us reach. In reciprocal causality, freedom causes and facilitates international marketing, while international marketing is a key support of the cause of freedom. A productive symbiosis at work!

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I recently presented a joint statement with Senator Snowe regarding small business contracting and would like to submit it for the Record. Section 6022 of H.R. 1268, as adopted in the Conference Report, H. Rep. 109-72, contains certain provisions concerning small business contracting at the Department of Energy. These provisions were inserted as a substitute for Section 6023 of the Senate version of H.R. 1268. Section 6023, among other things sought to amend the Small Business Act to authorize counting of small business subcontracts at the Department of Energy's large prime contractors for purposes of reporting small business prime contracting results. Because the substitute language was not adopted by Congress through regular legislative proceedings in the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business but was adopted anew during the House-Senate conference, the committees of jurisdiction take this opportunity to provide guidance generally provided through their reports to Senators and Representatives prior to their vote on the Conference Report, and to affected Federal agencies prior to their implementation of the Conference Report if adopted. In subsections 6022 (a) and (b), the language chosen to replace Section 6023 in the Conference Report directs the Department of Energy and the Small Business Administration to enter into a Memorandum of Understanding for reporting small business prime contracts and subcontracts at the Department of Energy. This replacement language does not change the Small Business Act's clear distinction between prime contracts and subcontracts, does not amend the statutory small business prime contracting goal requirements which are binding on the Department of Energy, and does not obviate Congressional and regulatory policies against contract bundling. This language does not repeal the President's Executive Order 13360 directing the Department of Energy to comply with its separate statutory prime contracting and subcontracting goals for awards to small businesses owned by service-disabled veterans. Any interpretation to the contrary would be unreasonable and contrary to Congressional intent. In subsection 6022(c), the replacement language mandates a study of changes to management prime contracts at the Department of Energy to encourage small business prime contracting opportunities. The object of the study is to examine the feasibility of establishing a procurement agency relationship between the management prime contractors and the Department of Energy in accordance with the requirements of Federal procurement laws, Federal procurement regulations, the ``Federal norm'' of government contracting as recognized by the Comptroller General, and applicable judicial precedent such as U.S. West Communications, Inc. v. United States, 940 F.2d 622 (Fed. Cir. 1991). Finally, in subsection 6022(d), the replacement language imposes certain requirements upon the Department of Energy concerning break-outs of services from large prime contracts for awards to small businesses. First, the Secretary of Energy is required to consider whether services performed have been previously provided by a small business concern. This requirement is for acquisition planning purposes only, and shall not be construed as imposing a restriction of any kind on the ability of the Department of Energy to break out its large prime contracts for award to small businesses. Congress recognizes that most of work currently contracted by the Department of Energy to its large prime contractors has never been historically performed by small businesses. However, this does not waive the application of the Small Business Act, the President's Executive Order 13360, or the President's initiative against contract bundling to the Department of Energy. Second, the Secretary of Energy is required to consider whether small business concerns are capable of performing under the contracts which are broken out for award. This requirement is simply a restatement of current statutory and regulatory requirements on contractor responsibility. Subsection (d)(2) direct the Secretary of Energy is required to--impose certain subcontracting requirements. As the text plainly indicates, this provision applies solely to small, business prime contracts which were formerly small business subcontracts for services.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I rise today to offer legislation that would amend the Harmonized Tariff Schedule of the United States and clarify the article description relating to certain monochrome glass envelopes. These components are incorporated into monochrome cathode ray tubes used in computer monitors, terminals, medical imaging monitors, and avionic displays. A company in the 16th Congressional District of Illinois, which I am proud to represent, manufactures these monochrome cathode ray tubes. There are no remaining manufacturers of monochrome glass envelopes in the United States; and therefore, no rationale of retaining the current 5.2 percent duty on these components. The small manufacturer who needs this component in their final product is unnecessarily harmed by the import duty. U.S. manufacturers are struggling to survive, and we must end policies that make it more difficult for our manufacturers to compete and succeed in the international market. Once again, I anticipate no adverse impact on any domestic producer or industry should this legislation be enacted. I know the permanent removal of this duty would be beneficial to some good, hard working people in Loves Park, Illinois. I urge my colleagues to support inclusion of this legislation into the Miscellaneous Tariff Correction bill to be moved later this year.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I yield back the balance of my time.

Mr. MANZULLO. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on this resolution.

Mr. MANZULLO. Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 130) recognizing the contributions of environmental systems and the technicians who install and maintain them, the quality of life of all Americans and supporting the goals and ideals of National Indoor Comfort Week, as amended.

Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume. This resolution recognizes the contributions of indoor environmental systems, commonly known as heating and air conditioning, and the technicians who install and maintain these systems. On a day like today where the temperature is expected to go above 80 degrees, I am particularly grateful for air conditioning that makes it easier to do our jobs each day. Heating and air conditioning provide a high quality of life for all Americans. This resolution simply supports the goals and ideals of National Indoor Comfort Week, which is taking place this week and sponsored by the Air Conditioning Contractors Association. The Air Conditioning Contractors of America are comprised mainly of small businesses. In fact, over 98 percent of HVAC contractors are small businesses. This is an industry that many of us take for granted, until we call upon them for service. They are responsible for ensuring that in the winter our heating systems work and in the summer our air conditioner hums along without interruption. And it is because of air conditioning that many parts of our great Nation, particularly in the South and West, have grown into booming areas, creating new jobs and enhancing our economy. There are very few people left in our country who can remember what it was like without refrigeration. Now refrigeration takes away most of the concerns we used to have about how our food is preserved. Refrigeration also protects vital medicines from contamination and helps us conquer diseases that have plagued mankind for generations. Children and seniors have cleaner, safer air to breathe. The filtration systems in many HVAC units in our homes, office buildings and factories help purify the air that we breathe, helping to lower the effect of airborne diseases. For all these reasons and more, I urge all of my colleagues to support passage of this resolution and salute the small business men and women who work in the HVAC industry. Mr. Speaker, I reserve the balance of my time.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I rise in strong support of H.R. 8, the Death Tax Repeal Permanency Act of 2005. As Chairman of the Small Business Committee, I've heard horror story after horror story from small business owners who worry about the future of their small business because their heirs will not be able to pay the death tax and also continue the business. Why should they spend countless thousands of dollars for life insurance premiums, attorney and accountant fees just to plan to pay the death tax? Those monies are better invested in their small businesses. Raising the cap is just a band-aid that postpones the inevitable decision to abolish the death tax once and for all. Permanent repeal of the death tax will protect millions of small and family-owned businesses from the return of this devastating tax. I have seen the effects of the death tax firsthand in my district. Before I came to Congress in 1992, I practiced law in a rural county in northern Illinois. I was there at the estate sale when the mom and her kids had to sell off half the family farm because they couldn't afford to pay the death tax after dad died. All they wanted to do was continue on with their lives, work the farm, and put food on the table. But in their most vulnerable time, after they had lost their dad and husband, after they had spent their lives paying taxes, the government came to them and said, ``We want more!'' And their American Dream was crushed. Despite serious estate planning efforts, 70 percent of small and family-owned businesses do not survive through the second generation and 87 percent do not make it through the third generation. In fact, 9 out of every 10 successors whose family business failed within three years of the owner's death said death taxes played a major role in their company's demise. The death tax is one of the most archaic and destructive taxes to small businesses in our tax code. The death tax discourages savings and investment, reduces wages and job creation, and is a leading cause of dissolution for thousands of small businesses. This is an immoral tax. It's time to once and for all permanently do away with the death tax that confiscates the hard work and savings of the most productive and important part of the U.S. economy, our small businesses.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, pursuant to Clause 2a of House Rule XI, I submit our attached Rules for the 109th Congress into the Congressional Record for publication. Rules and Procedures of the Committee on Small Business 1. general provisions The Rules of the House of Representatives, and in particular the committee rules enumerated in rule XI, are the rules of the Committee on Small Business to the extent applicable and by this reference are incorporated. Each subcommittee of the Committee on Small Business (hereinafter referred to as the ``committee'') is a part of the committee and is subject to the authority and direction of the committee, and to its rules to the extent applicable. 2. referral of bills by chairman Unless retained for consideration by the full committee, all legislation and other matters referred to the committee shall be referred by the Chairman to the subcommittee of appropriate jurisdiction within 2 weeks. Where the subject matter of the referral involves the jurisdiction of more than one subcommittee or does not fall within any previously assigned jurisdictions, the Chairman shall refer the matter, as he may deem advisable. 3. date of meeting The regular meeting date of the committee shall be the second Thursday of every month when the House is in session. A regular meeting of the committee may be dispensed with if, in the judgment of the Chairman, there is no need for the meeting. Additional meetings may be called by the Chairman as he may deem necessary or at the request of a majority of the members of the committee in accordance with clause 2(c) of rule XI of the House. At least 3 days notice of such an additional meeting shall be given unless the Chairman determines that there is good cause to call the meeting on less notice. The determination of the business to be considered at each meeting shall be made by the Chairman subject to clause 2(c) of rule XI of the House. A regularly scheduled meeting need not be held if there is no business to be considered or, upon at least 3 days notice, it may be set for a different date. 4. announcement of hearings Unless the Chairman, with the concurrence of the ranking minority member, or the committee by majority vote, determines that there is good cause to begin a hearing at an earlier date, public announcement shall be made of the date, place and subject matter of any hearing to be conducted by the committee at least 1 week before the commencement of that hearing. After announcement of a hearing, the committee shall make available as soon as practicable to all Members of the Committee a tentative witness list and to the extent practicable a memorandum explaining the subject matter of the hearing (including relevant legislative reports and other necessary material). In addition, the Chairman shall make available as soon as practicable to the Members of the Committee any official reports from departments and agencies on the subject matter as they are received. 5. meetings and hearings open to the public (A) Meetings Each meeting of the committee or its subcommittees for the transaction of business, including the markup of legislation, shall be open to the public, including to radio, television and still photography coverage, except as provided by clause 4 of rule XI of the House, except when the committee or subcommittee, in open session and with a majority present, determines by record vote that all or part of the remainder of the meeting on that day shall be closed to the public because disclosure of matters to be considered would endanger national security, would compromise sensitive law enforcement information, or would tend to defame, degrade or incriminate any person or otherwise would violate any law or rule of the House; Provided, however, that no person other than members of the committee, and such congressional staff and such executive branch representatives as they may authorize, shall be present in any business meeting or markup session which has been closed to the public. (B) Hearings Each hearing conducted by the committee or its subcommittees shall be open to the public, including radio, television and still photography coverage, except when the committee or subcommittee, in open session and with a majority present, determines by record vote that all or part of the remainder of the hearing on that day shall be closed to the public because disclosure of testimony, evidence or other matters to be considered would endanger the national security, would compromise sensitive law enforcement information, or would violate any law or rule of the House; Provided, however, that the committee or subcommittee may by the same procedure vote to close one subsequent day of hearings. Notwithstanding the requirements of the preceding sentence, a majority of those present, there being in attendance the requisite number required under the rules of the committee to be present for the purpose of taking testimony, (i) may vote to close the hearing for the sole purpose of discussing whether testimony or evidence to be received would endanger the national security, would compromise sensitive law enforcement information, or violate clause 2(k)(5) of rule XI of the House; or (ii) may vote to close the hearing, as provided in clause 2(k)(5) of rule XI of the House. No member of the House may be excluded from non- participatory attendance at any hearing of the committee or any subcommittee, unless the House of Representatives shall by majority vote authorize the committee or subcommittee, for purposes of a particular series of hearings on a particular article of legislation or on a particular subject of investigation, to close its hearing to members by the same procedures designated for closing hearings to the public. 6. witnesses (A) Statement of witnesses Each witness who is to appear before the committee or subcommittee shall file with the committee at least two business days before the day of his or her appearance, 100 copies of his or her written statement of proposed testimony. At least one copy of the statement of each witness shall be furnished directly to the ranking minority member. In addition, all witnesses shall be required to submit with their testimony a resume or other statement describing their education, employment, professional affiliations and other background information pertinent to their testimony unless waived by the Chairman. Each witness shall also submit to the committee a copy of his or her final prepared statement in an electronic format no later than the day of the hearing unless waived by the Chairman. The committee will provide public access to its printed materials, including the proposed testimony of witnesses, in electronic form. (B) Interrogation of witnesses Whenever any hearing is conducted by the committee or any subcommittee upon any measure or matter, the minority party members on the committee shall be entitled, upon request to the Chairman by a majority of those minority members, to call one witness selected by the minority to testify with respect to that measure or matter. The witness requested by the minority shall furnish at least one copy of his or her statement and any supplementary materials directly to the Chairman within two business days before the day of his or her appearance unless waived by the Chairman. Except when the committee adopts a motion pursuant to subdivisions (B) and (C) of clause 2(j)(2) of rule XI of the rules of the House, committee members may question witnesses only when they have been recognized by the Chairman for that purpose, and only for a 5-minute period until all members present have had an opportunity to question a witness. The 5- minute period for questioning a witness by any one member can be extended only with the unanimous consent of all members present. The Chairman, followed by the ranking minority member and all other members alternating between the majority and minority, shall initiate the questioning of witnesses in both the full and subcommittee hearings. In recognizing members to question witnesses, the Chairman may take into consideration the ratio of majority and minority members present in such a manner as not to disadvantage the Members of either party. The Chairman, in consultation with the ranking minority member, may decrease the 5-minute time period in order to accommodate the needs of all the Members present and the schedule of the witnesses. 7. subpoenas A subpoena may be authorized and issued by the Chairman of the committee in the conduct of any investigation or series of investigations or activities to require the attendance and testimony of such witness and the production of such books, records, correspondence, memoranda, papers and documents, as he deems necessary. The ranking minority member shall be promptly notified of the issuance of such a subpoena. Such a subpoena may be authorized and issued by the chairman of a subcommittee with the approval of a majority of the members of the subcommittee and the approval of the Chairman of the committee. 8. quorum No measure or recommendation shall be reported unless a majority of the committee was actually present. For purposes of taking testimony or receiving evidence, two members shall constitute a quorum. For all other purposes, one-third of the members (or 11 Members) shall constitute a quorum. 9. amendments during mark-up Any amendment offered to any pending legislation before the committee must be made available in written form when requested by any member of the committee. If such amendment is not available in written form when requested, the Chairman shall allow an appropriate period for the provision thereof. 10. proxies No vote by any member of the committee or any of its subcommittees with respect to any measure or matter may be cast by proxy. 11. postponement of proceedings The Chairman in consultation with the Ranking Minority Member may postpone further proceedings when a record vote is ordered on the question of approving any measure or matter or adopting an amendment. The Chairman may resume proceedings on a postponed request at any time. In exercising postponement authority, the Chairman shall take all reasonable steps necessary to notify members on the resumption of proceedings on any postponed recorded vote. When proceedings resume on a postponed question, notwithstanding any intervening order for the previous question, an underlying proposition shall remain subject to further debate or amendment to the same extent as when the question was postponed. 12. number and jurisdiction of subcommittees There will be four subcommittees as follows: Workforce, Empowerment and Government Programs (seven Republicans and six Democrats). Regulatory Reform and Oversight (seven Republicans and six Democrats). Rural Enterprises, Agriculture and Technology (six Republicans and five Democrats). Tax, Finance and Exports (eight Republicans and seven Democrats). During the 109th Congress, the Chairman and ranking minority member shall be ex officio members of all subcommittees, without vote, and the full committee shall have the authority to conduct oversight of all areas of the committee's jurisdiction. In addition to conducting oversight in the area of their respective jurisdiction, each subcommittee shall have the following jurisdiction: workforce, empowerment and government programs Oversight and investigative authority over problems faced by small businesses in attracting and retaining a high quality workforce, including but not limited to wages and benefits such as health care. Promotion of business growth and opportunities in economically depressed areas. Oversight and investigative authority over regulations and other government policies that impact small businesses located in high risk communities. Opportunities for minority, women, veteran and disabled- owned small businesses, including the SBA's 8(a) program. General oversight of programs targeted toward urban relief. Small Business Act, Small Business Investment Act, and related legislation. Federal Government programs that are designed to assist small business generally. Participation of small business in Federal procurement and Government contracts. regulatory reform and oversight Oversight and investigative authority over the regulatory and paperwork policies of all Federal departments and agencies. Regulatory Flexibility Act. Paperwork Reduction Act. Competition policy generally. Oversight and investigative authority generally, including novel issues of special concern to small business. rural enterprises, agriculture and technology Promotion of business growth and opportunities in rural areas. Oversight and investigative authority over agricultural issues that impact small businesses. General oversight of programs targeted toward farm relief. Oversight and investigative authority for small business technology issues. tax, finance and exports Tax policy and its impact on small business. Access to capital and finance issues generally. Export opportunities and oversight over Federal trade policy and promotion programs. 13. committee staff (A) Majority staff The employees of the committee, except those assigned to the minority as provided below, shall be appointed and assigned, and may be removed by the Chairman. The Chairman shall fix their remuneration, and they shall be under the general supervision and direction of the Chairman. (B) Minority staff The employees of the committee assigned to the minority shall be appointed and assigned, and their remuneration determined, as the ranking minority member of the committee shall determine. (C) Subcommittee staff The Chairman and ranking minority member of the full committee shall endeavor to ensure that sufficient staff is made available to each subcommittee to carry out its responsibilities under the rules ofthe committee. 14. powers and duties of subcommittees Each subcommittee is authorized to meet, hold hearings, receive evidence, and report to the full committee on all matters referred to it. Subcommittee chairmen shall set meeting and hearing dates after consultation with the Chairman of the full committee. Meetings and hearings of subcommittees shall not be scheduled to occur simultaneously with meetings or hearings of the full committee. 15. subcommittee reports (A) Investigative hearings The report of any subcommittee on a matter which was the topic of a study or investigation shall include a statement concerning the subject of the study or investigation, the findings and conclusions, and recommendations for corrective action, if any, together with such other material as the subcommittee deems appropriate. Such proposed reports shall first be approved by a majority of the subcommittee members. After such approval has been secured, the proposed report shall be sent to each member of the full committee for his or her supplemental, minority, or additional views. Any such views shall be in writing and signed by the member and filed with the clerk of the full committee within 5 calendar days (excluding Saturdays, Sundays, and legal holidays) from the date of the transmittal of the proposed report to the members. Transmittal of the proposed report to members shall be by hand delivery to the members' offices. After the expiration of such 5 calendar days, the report may be filed as a House report. (B) End of Congress Each subcommittee shall submit to the full committee, not later than November 15 of each even-numbered year, a report on the activities of the subcommittee during the Congress. 16. records The committee shall keep a complete record of all actions, which shall include a record of the votes on any question on which a record vote is demanded. The result of each subcommittee record vote, together with a description of the matter voted upon, shall promptly be made available to the full committee. A record of such votes shall be made available for inspection by the public at reasonable times in the offices of the committee. The committee shall keep a complete record of all committee and subcommittee activity which, in the case of any meeting or hearing transcript, shall include a substantially verbatim account of remarks actually made during the proceedings, subject only to technical, grammatical, and typographical corrections authorized by the person making the remarks involved. The records of the committee at the National Archives and Records Administration shall be made available in accordance with rule VII of the Rules ofthe House. The Chairman of the full committee shall notify the ranking minority member of the full committee of any decision, pursuant to clause 3(b)(3) or clause 4(b) of rule VII of the House, to withhold a record otherwise available, and the matter shall be presented to the committee for a determination of the written request of any member of the committee. 17. access to classified or sensitive information Access to classified or sensitive information supplied to the committee and attendance at closed sessions of the committee or its subcommittees shall be limited to members and necessary committee staff and stenographic reporters who have appropriate security clearance when the Chairman determines that such access or attendance is essential to the functioning of the committee. The procedures to be followed in granting access to those hearings, records, data, charts, and files of the committee which involve classified information or information deemed to be sensitive shall be as follows: (a) Only Members of the House of Representatives and specifically designated committee staff of the Committee on Small Business may have access to such information. (b) Members who desire to read materials that are in the possession of the committee should notify the clerk of the committee. (c) The clerk will maintain an accurate access log, which identifies the circumstances surrounding access to the information, without revealing the material examined. (d) If the material desired to be reviewed is material which the committee or subcommittee deems to be sensitive enough to require special handling, before receiving access to such information, individuals will be required to sign an access information sheet acknowledging such access and that the individual has read and understands the procedures under which access is being granted. (e) Material provided for review under this rule shall not be removed from a specified room within the committee offices. (f) Individuals reviewing materials under this rule shall make certain that the materials are returned to the proper custodian. (g) No reproductions or recordings may be made of any portion of such materials. (h) The contents of such information shall not be divulged to any person in any way, form, shape, or manner, and shall not be discussed with any person who has not received the information in an authorized manner. (i) When not being examined in the manner described herein, such information will be kept in secure safes or locked file cabinets in the committee offices. (j) These procedures only address access to information the committee or a subcommittee deems to be sensitive enough to require special treatment. (k) If a member of the House of Representatives believes that certain sensitive information should not be restricted as to dissemination or use, the member may petition the committee or subcommittee to so rule. With respect to information and materials provided to the committee by the executive branch, the classification of information and materials as determined by the executive branch shall prevail unless affirmatively changed by the committee or the subcommittee involved, after consultation with the appropriate executive agencies. (l) Other materials in the possession of the committee are to be handled in accordance with the normal practices and traditions of the committee. 18. OTHER PROCEDURES The Chairman of the full committee may establish such other procedures and take such actions as may be necessary to carry out the foregoing rules or to facilitate the effective operation of the committee. The committee may not be committed to any expense whatever without the prior approval of the Chairman of the full committee. 19. amendments to committee rules The rules of the committee may be modified, amended or repealed by a majority of the members, at a meeting specifically called for such purpose, but only if written notice of the proposed change has been provided to each such member at least 3 days before the time of the meeting.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, today I wish to recognize the outstanding dedication and leadership of Leonard (Nick) Hall for his efforts in administrating federal tax law. He has served for over 30 years in the Internal Revenue Service, IRS. He also served his country in the Army and worked for a time with the United States Department of Defense. Nick is retiring after over 35 years of federal service and I want to thank him for his contributions to Illinois and our country. Nick is a dedicated and proud member of the IRS executive staff. Nick has served as an Area Director for Small Business/Self-Employed Division, Taxpayer Education and Communications, TEC, in Chicago, IL. As the Chairman of the Small Business Committee, I work closely with TEC, which is a small business focused function of the IRS. It closely works with small business organizations and industry leaders to educate and ensure IRS products and services fit the needs of small business/ self-employed taxpayers. He leads about 100 employees responsible for taxpayer education and communications programs in 13 states, including Illinois. His employees deliver federal tax information to over hundreds of state and industry organizations and millions of people. He has been a leader in reducing taxpayer burden and ensuring fair tax law administration. He was very involved in the most recent comprehensive reorganization and modernization of the IRS in nearly half a century. In 2004, Nick received a TEC Director's award for his efforts to taxpayer burden reduction, taxpayer outreach and compliance assistance. This award was to recognize his participation at the Small Business Regulatory Enforcement Fairness Act hearings. In 2000, Nick received a Commissioner's Award for his contributions as an executive team leader, serving under the Deputy Commissioner for Modernization. This award is considered the highest honor an IRS Commissioner can bestow to an employee. The Commissioner cited Nick's extensive experience in IRS operations as extremely invaluable to modernization initiatives. Nick is a resident of Illinois after spending many years living in many or various cities in the United States. His wife, Mona, is a native of Illinois and also a 25 year employee of the IRS. They plan to continue to reside in Illinois upon Nick's retirement from the IRS on February 25, 2005. My wife, Freda, and I wish Nick and his family a happy future, and I wish to thank him for all of his dedications, commitment, and hard work.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, on November 20, 2004, the House took up consideration of and passed H.R. 4818, the Consolidated Appropriations Act for 2005. Division K of H.R. 4818 contains the Small Business Reauthorization and Manufacturing Assistance Act of 2004. Since the act was incorporated directly into the Consolidated Appropriations Act for 2005, no committee report accompanies the legislation. As chairman, I am submitting for insertion in the Record, the attached explanation of the Small Business Reauthorization and Manufacturing Assistance Act of 2004. I would expect the Administrator, in implementing the provisions of this act, to accord the enclosed explanation the same weight in defining congressional intent that the Administrator would give to a report after a mark-up prior to floor action or the language in a conference report. This expectation is particularly apt in this circumstance because the provisions were negotiated and agreed to in cooperation with my counterpart in the United States Senate. Joint Explanatory Statement of Division K of H.R. 4818 Filed by Chairman Manzullo Section 101. Express loans Section 7(a)(25)(B) authorizes the Administrator to create pilot loan programs. In exercising that authority, the Administrator created an ``Express Loan Pilot Program.'' The program authorizes lenders to use their own forms in submitting requests to the Administrator for the issuance of guarantees. Two significant restrictions are imposed by the ``Express Loan Pilot Program:'' the guarantee cannot exceed 50 percent of the loan and the maximum loan amount is $250,000. Section 101 codifies, with a few significant differences, the provisions of Pub. L. No. 108-217, which addressed the Express Loan Program. The two most significant changes are the permanent authorization of the Express Loan Program by creating a new paragraph (31) in Sec. 7(a) of the Small Business Act and the statutory increase in the size of such loans to $350,000. Section 101 defines an ``express loan'' as any lender authorized by the Administrator to participate in the Express Loan Program. Congress expects that the Administrator will establish by rule the standards needed to qualify as an Express Lender. Section 101 defines an ``express loan'' as one in which the lender utilizes, to the maximum extent practicable, its own analyses of credit and forms. Congress fully expects that the conditions under which express loans are made will not vary significantly from those conditions that currently exist under the ``Express Loan Pilot Program.'' Nevertheless, Congress understands that the Administrator may wish to revise the standards and operating procedures associated with ``express loans.'' Nothing in the statutory language should be interpreted as prohibiting the Administrator from imposing these additional requirements that are otherwise consistent with the statutory language. Section 101 codifies the existing concept of the Administrator's ``Express Loan Pilot Program.'' In other words, the ``Express Loan Program'' is one in which lenders utilize their own forms and get a guarantee of no more than 50 percent. Section 101 restricts the program, including the increased loan amount of $350,000, to those lenders designated as express lenders by the Administrator. Designation as an express lender does not limit the lender to making express loans if the lender has been authorized to make other types of loans pursuant to Sec. 7(a) of the Small Business Act. Although a lender may only seek status as an express lender, this section was included to ensure that the Administrator not limit the ability of an express lender to seek other lending authority from the Administrator. Nor is the Administrator permitted to change its standards for designating an express lender in a manner that only authorizes the lender to make express loans. To the extent that the lending institution wishes to offer a full range of loan products authorized by Sec. 7(a) and is otherwise qualified to do so, the Administrator shall not restrict that ability on the lender's status as an express lender. Section 101 prohibits the Administrator from revoking the designation of any lender as an express lender that was so designated at the time of enactment. This prohibition does not apply if the Administrator finds the express lender to have violated laws or regulations or the Administrator modifies the requirements for designation in a way that the express lender cannot meet those standards. Congress does not expect that the Administrator will impose new requirements for express lenders that prohibit them from making loans under other loan programs authorized by the Small Business Act for which they have approval from the Administrator. Congress, at the request of the Small Business Administration, determined that it was appropriate to expand the size of ``express loans'' to $350,000. Any change in the size of an express loan now will require action by Congress. Congress is concerned that the Administrator will take regulatory actions that unduly favor express lending over other types of lending authorized by Sec. 7(a) of the Small Business Act. As such, Congress incorporated a provision prohibiting the Administrator from taking any action that would have the effect of requiring a lender to make an express loan rather than a conventional loan pursuant to Sec. 7(a). Any significant policy change in the operation of the lending programs authorized by Sec. 7(a) of the Small Business Act requires notification to the House and Senate Small Business Committees. Furthermore, the statutory language on notification goes beyond that which is required pursuant to Sec. 7(a)(24) of the Small Business Act. Section 102. Loan guarantee fees Section 103 increases the loan guarantee amount to a maximum of $1.5 million. Given the fact that borrowers are getting an additional increment in loan guarantees, the sponsors determined that it would be appropriate to require an additional 0.25 percent fee for the amount of guarantee in excess of $1 million. Thus, on the amount of the guarantee between $1 million and $1.5 million, the upfront fee authorized pursuant to Sec. 7(a)(18) of the Small Business Act increases from 3.5 percent to 3.75 percent but only for that portion of the loan guarantee in excess of $1 million. This is consistent with typical commercial lending practices of charging fees that are commensurate with the lenders' exposure to risk. Section 102 also raises the fee collected by the Administrator from banks of the unpaid balance of deferred participation loans. To avoid situations such as those that occurred at the end of calendar year 2003 in which the Administrator was required to drastically reduce lending and impose other restrictions on the program, Congress determined that it would be appropriate for the Administrator to have some discretion in setting the fee paid by lenders on the unpaid balance. The total amount of the fee cannot in, any year, exceed 0.55 percent of the unpaid balance. Congress expects the Administrator to use this authority only when needed to drive the cost, as that term is defined in the Federal Credit Reform Act, of the loan program to zero, i.e., not need an appropriation. Any use of this discretion to raise the fee beyond the current level of 0.5 percent should trigger the notification provisions in Sec. 7(a)(24) of the Small Business Act. As a further oversight tool, Congress expects that the Administrator would satisfy any relevant committee's request for information on the utilization of this discretion. Finally, Congress determined that the Administrator also be given the authority to lower fees charged to borrowers and lenders if the subsidy cost becomes negative, i.e., the fees will actually take in more money to the government than it costs to operate the Sec. 7(a) loan program. Congress adopted an approach that the Administrator should it undertake a fee reduction first consider reducing the fees set forth in clauses (i)-(iii) of subsection 7(a)(1 8)(A) and then reduce fees on lenders. As a further restriction on the discretion of the Small Business Administration, the fees that were charged to borrowers on the date of enactment of this conference report may not be raised. Congress adopted this language to ensure that any fee increases to borrowers beyond the statutory limits requires the action of Congress. Section 103. Increase in guarantee amount and, institution of associated fee Access to capital is vital to the growth of small businesses. Particularly for manufacturers and high technology research and development businesses, typical amounts of capital available under the existing loan limits authorized by Sec. 7(a) of the Small Business Act often are inadequate. Given the importance of capital to grow small businesses, Congress determined that it would be appropriate to permanently increase the amount of the loan guarantee from $1 million to $1.5 million. No additional changes were made in the overall statutory cap of a gross $2 million loan. Thus, the Administrator will be able to guarantee up to $1.5 million of a $2 million loan rather than the current limit of $1 million. Congress expects that this will increase the number of lenders willing to make loans to small manufacturers who face significant global competition. Section 104. Debenture size Congress raised all of the loan limitations for qualified state and local development companies (``CDCs'') because they had not been raised in many years and the long-term financing needs of small businesses were not being met by loans that did not exceed the thresholds for loans made pursuant to Sec. 7(a) of the Small Business Act. Raising the loan limitations has two effects. First, it signifies the recognition that Title V of the Small Business Investment Act and Sec. 7(a) of the Small Business Act has very different purposes in mind. Second, an increase in the threshold allows more effective economic development projects to be funded by CDCs. Congress believes that the increases to $1,500,000 for regular projects, $2,000,000 for public policy goal projects, and $4,000,000 for small manufacturers will provide significant new financial inputs to small businesses in general and to small manufacturers in particular. While all small businesses whose primary industrial classification is in North American Industrial Classification sectors 31, 32, and 33 (the sectors for manufacturing), not all small business concerns in those sectors are considered small manufacturers. Congress adopted a requirement that small manufacturers should be limited to those small business concerns that have all of their production facilities are located in the United States. Congress does not intend that small business concerns that have manufacturing facilities situated outside of the United States should be denied assistance under programs operated by the Small Business Administration. However, special benefits should be afforded to those manufacturers whose production facilities are located in the United States. Finally, the definition in Sec. 106 is identical to the definition in this section thereby avoiding any potential interpretive concerns about what the legislature meant when it used the same term in different sections of legislation. Section 105. Job requirements The Administrator has promulgated regulations, pursuant to Sec. 501 of the Small Business Investment Act mandating that a loan made by a CDC must create or save one job for each $35,000 in guarantee. This standard has not been revised since it was adopted in 1990. The standard clearly does not reflect inflation or the dramatic increases in productivity that has led to higher wages for all employees. Congress determined that the standard should be revised to take account of the changes in the economy during the past 14 years. Therefore, 105 statutorily raises the job creation standard to one job for every $50,000 in guarantees. Manufacturing requires greater capital investment than other businesses. Such investment may lead to higher productivity for small manufacturers and therefore fewer jobs created per investment. Congress does not want to prejudice the ability of CDCs to fund projects that would assist small manufacturers. Section 106 establishes a standard that authorizes CDC loans to small manufacturers if the project creates one job for each $100,000 of guarantee. CDCs do not need to meet job creation standards for individual loans if the loan is used to further one of the public policy objectives in Sec. 501(d). Section 105 modifies that requirement slightly by exempting a particular project from the job creation standards if the project was meeting a public policy objective and if the CDC's overall loan portfolio creates one job for $50,000 in guarantees. Since the basic premise of loans made pursuant to Title V of the Small Business Investment Act is to encourage economic development, Congress concluded that it made sense to establish a different standard for job creation in economically-depressed areas or places with unusually high wage requirements. Congress believes that CDCs should be provided more leeway in creating jobs in economically- depressed areas and Alaska and Hawaii. As a result, CDC loans in these areas only need to meet a more lenient job creation standard of one job per $75,000 of guarantee in certain areas. Given the importance of small manufacturing to economic development, Congress excluded loans to small manufacturers from the calculations needed to determine whether a CDC's loan portfolio meets the overall job creation standard of one job per $50,000 of guarantee or the $75,000 standard for high-wage and economically depressed areas. Congress intends that the public policy goals set forth in Sec. 501 should be accomplished without reference to job creation for small manufacturers. Section 105 also authorizes the Administrator to waive any of the standards when appropriate. Congress expects that the Administrator will promulgate regulations specifying when the job creation standards will be waived. Two restrictions are imposed on the Administrator's discretion. First, the Administrator may not waive the requirements concerning small manufacturers. Second, the Administrator may not mandate a job creation standard with a number lower than that set forth in Sec. 105 but does have the liberty to set a higher dollar guarantee per job standard. These restrictions ensure that the Administrator does not undermine the ability of CDCs to lend to small manufacturers. Section 106. Report regarding national database of small manufacturers Institutions of higher education can play a vital role in reviving small manufacturers. Universities must purchase large amounts of standard manufactured products (often on an annual basis--such as furniture for dormitory rooms). They also often purchase very sophisticated tools and laboratory equipment that small manufacturers may produce. Congress believes that some mechanism should be in place so that institutions of higher education can identify suppliers from the universe of small manufacturers. While not an ideal system, a database similar to PRO-NET represents a useful model for making institutions of higher education aware of the capabilities of small manufacturers. PRO-NET is a database operated by the federal government in which the capabilities of numerous small businesses are outlined. Contracting officers use PRO-NET to find small businesses capable of providing goods and services. Section 106 requires the Administrator and the Association of Small Business Development Centers to study the viability of creating a PRO-NET-like database that all institutions of higher education can use to identify small manufacturers (the definition is identical to the definition in Sec. Sec. 104-05) capable of providing their procurement needs. The bill also requires a report to Congress on the viability and cost to establish such a database. Section 107. International trade All Sec. 7(a) loans can be used to refinance existing debt except for international trade loans. Congress determined that the restriction did not make sense especially since businesses harmed by unfair international competition will be more competitive if their debt service payments are lower. Therefore, Congress authorized businesses otherwise eligible for an international trade loan to use it for refinancing of debt but only to the extent that the Administrator determines the applicant's existing debt is not structured with reasonable terms and conditions. Congress expects that the Administrator examine the interest rate being charged relative to the interest rates generally available for similar businesses to determine whether the terms and conditions are not reasonable. To obtain an international trade loan, the applicant must demonstrate that the business either is engaged in or adversely affected by international trade. To avoid the necessity of having to prove adverse effects if other government agencies already reached that conclusion in the same industry as the borrower, Congress mandated that the Administrator must accept as conclusive proof of injury a finding by the Secretary of Commerce issued pursuant to chapter 3 of Title II of the Trade Act of 1974 or any determination by the International Trade Commission. If an applicant is in an industry for which the Commission or the Secretary has made an injury finding, Congress concluded that it would be pointless to require the small businesses so suffering to go through the additional expense of presenting new evidence to the Administrator of injury. Congress intends that the utilization of the findings by the Secretary or the Commission is not a limiting factor if a small business can present other evidence of injury. For example, the Commission or Secretary may not find that an industry was injured or that no claims were made to either agency. Nothing in Sec. 107 prevents a small business from presenting of evidence of specific injury to his or her business. The Administrator then would be required to rule on the adequacy of the proof, and if sufficient evidence was found of injury, make a loan under Sec. 7(a)(16). Section 107 also provides for an increase in the size of international trade loans. Given the nature of international trade, Congress typically has mandated that loan caps be $250,000 higher than those for conventional Sec. 7(a) loans. This section maintains that practice and increased the cap for international trade loans based on the increase in the guarantee fees for conventional loans. Section 121. Program authorization levels This section amends Sec. 20 of the Small Business Act and provides for authorization of appropriations. Congress selected authorization levels with sufficient room to allow for expected growth and expansion of programs authorized by the Small Business Act and Small Business Investment Act. Congress also determined that an authorization of appropriations not elsewhere provided should apply to all of the Small Business Investment Act. Finally, Congress concluded that the existing standing authorization of appropriations only for carrying out title IV of the Small Business Investment Act was illogical. Section 121 amends Sec. 20 to provide for an authorization of appropriations not elsewhere provided for carrying out both the Small Business Act and all titles of the Small Business Investment Act. Section 122. Addition reauthorizations The Small Business Development Center (SBDC) program's authorization levels are set forth in Sec. 21 of the Small Business Act. Congress provided modest authorization increases for the SBDCs to take account of necessary growth in providing services to entrepreneurs. In addition, Congress also extended the authority of SBDCs to provide drug-free workplace counseling. This authority would have lapsed without the change. The extension of authority will give the SBDC grantees sufficient time to coordinate their actions with the grantees under the revised drug-free workplace program. Given the SBDCs expertise in providing assistance to entrepreneurs, Congress established a program authorizing grants to SBDCs that are willing to offer advice in communities that are economically challenged due to business or government facility down-sizing or closing. Congress expects that this assistance will first be offered to communities suffering from plant closings, then to communities suffering from government office closings, and finally to base realignments. To the extent that other bases are closed in future years, Congress expects that legislation concerning such closures will provide additional assistance to the surrounding communities and that assistance provided under Sec. 122 should be utilized in other areas that do not receive the directed assistance associated with base closures. Section 123. Paul D. Coverdell Drug-Free Workplace Program authorization provisions Congress recognizes that small businesses need drug free workplaces. Drug-free workers boost productivity and reduce the costs of health care coverage and absenteeism. As a result, Congress reauthorized the program for two years at the five million dollar level. In addition, to ensure that funding is maximized to eligible intermediaries that specialize in providing drug-free workplace assistance to small businesses, Congress adopted a limitation on the amount of funds that can be awarded to SBDCs for carrying out the purposes of the Paul D. Coverdell Program. Furthermore, Congress, again in an effort to maximize limited dollars, restricts the use of funds for administrative purposes to five percent of the total made available to grantees. Nothing in this limitation restricts the drug-free workplace advice that SBDC grantees are authorized to provide in their normal course of operations. Section 124. Grant provisions Congress recognized that improvements in coordination between the activities of drug-free workplace eligible intermediaries and SBDCs might improve delivery of services to small businesses. As a result, Congress established a grant program within the Paul D. Coverdell Drug-Free Workplace Program to promote cooperation between eligible intermediaries and SBDC grantees. Congress expects that the Administrator award the two-year grants to those applicants that best demonstrate the capacity to deliver advice in a coordinated manner between SBDCs and eligible intermediaries. Section 125. Drug-free communities coalitions as eligible intermediaries Congress recognizes that there are numerous entities that receive grants under chapter 2 of the National Narcotics Leadership Act of 1988 but are not currently authorized to participate as eligible intermediaries under the Paul D. Coverdell Drug-Free Workplace Program. This section makes these National Narcotics Leadership Act grantees, which could provide valuable insight into establishing drug-free workplaces, eligible to receive awards under the Paul D. Coverdell Drug-Free Workplace Program. Inclusion of new additional parties should not be interpreted as directing the Administrator to favor them over others that apply for grants under the Paul D. Coverdell Drug-Free Workplace Program. Section 126. Promotion of effective practices of eligible intermediaries To ensure that the Paul D. Coverdell Drug-Free Workplace Program operates optimally, Congress mandates that the Administrator provide best practices to eligible intermediaries. The Administrator should use all of its available outreach resources, including SBDCs, Women Business Centers, and district offices to ensure that eligible intermediaries are kept apprised of best practices. Congress also believes that the performance of eligible intermediaries should be assessed and measured. Such evaluations will be useful to Congress when it considers what changes, if any, need to make the program even more effective. This section establishes the procedures for collecting data needed to evaluate the efficacy of the program. Section 127. Report to Congress This section requires the Administrator to use the data collected under Sec. 126 and report to Congress on the efficacy of the program and dissemination of drug-free workplace information. Congress expects the relevant committees to examine the report and make necessary legislative changes as a result to ensure optimal operation of the Paul D. Coverdell Drug-Free Workplace Program. Section 131. Lender examination and review Current practice authorizes SBIC licensees to pay for examination and reviews conducted by the Administrator. Congress determined that the same principles should apply to lenders authorized to make government-guaranteed loans under Sec. 7(a). This section grants the Administration the authority to charge for examinations and reviews. The section also requires that the fees be directed to lender oversight activities including the payment of salaries and expenses of Administration personnel involved in such functions. This authority does not imply that the fees may be directed to the reimbursement of other functions of the Administration. Section 132. Gifts and co-sponsorship of events Gifts and co-sponsorships play a useful role in the Small Business Administration's performance of its outreach function to small businesses. Congress determined that even broader language than is currently permitted was necessary to ensure the Administration's continued ability to obtain gifts and seek co-sponsorships. In particular, Congress recognized that in many instances the Administration does not receive gifts but rather contributions are made by a co-sponsoring entity to an Administration event, such as small business forum. In other instances, the SBA uses gifts to pay for promotional materials, such as cards that are handed out in district offices to promote an event. This section clarifies and broadens the existing authority of the Small Business Administration to obtain gifts and co-sponsorships in order to expand the agency's outreach. To ensure appropriate clarity, Congress added the term ``recognition events'' which would include Small Business Week and sponsorship of dinners during that period. The section also requires the Administration to recognize the co-sponsors of such events but only to the extent of their contributions. No endorsements of the co-sponsors products or services are permitted. In order to ensure that conflicts of interest do not arise in the solicitation or acceptance of gifts, Congress requires the General Counsel to determine whether a conflict of interest exists. If a determination that a conflict of interest exists, the General Counsel is empowered to prohibit the solicitation or acceptance. Finally, the language clarifies that the Administrator may delegate the approval of co-sponsorships to the Deputy Administrator, Associate Administrators, and Assistant Administrators. No personnel located in district or regional offices are permitted to approve co-sponsorships. Congress adopted this restriction to ensure close cooperation with the General Counsel of the Administration. Congress also requires that the Inspector General audit the use of such gifts and co-sponsorships. This avoids potential abuses of the program through independent oversight of an official whose investigations cannot be impeded by the Administrator or Administration personnel. Congress wanted additional assurances (beyond the Inspector General audit) that the Small Business Administration achieved a proper balance between this new expanded authority and accountability. As a result, a sunset date of 2006 was added in order to properly monitor this new authority before considering making this language permanent in the Small Business Act. Section 141. Service Corps of Retired Executives Currently, the Administrator has the discretion whether to permit the Service Corps of Retired Executives (SCORE) to maintain offices at the headquarters of the Administration and pay employees of SCORE. Congress determined that the vitality of SCORE should not be subject to whims of the Administrator and therefore require that the Administrator maintain SCORE's offices at the Administration's headquarters and continue to pay for the salaries of SCORE personnel. Congress notes that this will not require any increased appropriation since these services and expenses are currently included in the Small Business Administration's budget. Section 142. Small Business Development Center Program Congress remains concerned that SBDCs were and may continue to be revealing the name of businesses that seek their advice to Administration employees for functions unrelated to the financial auditing or client surveys needed to oversee the operations of the SBDC grantees. Congress believes that such behavior is intolerable. This section prohibits the disclosure of client information (including the name, address, telephone and facsimile numbers, and e-mail address) of any concern or individual receiving assistance from a SBDC grantee or its subcontractors (who operate service centers that business owners can utilize to obtain advice) unless the Administrator is ordered to make such disclosure pursuant to a court order or civil or criminal enforcement action commenced by a federal or state agency. Congress expects that SBDC grantees will only respond to formal agency requests, such as civil investigative demands, and subpoenas. Congress also recognizes that the Administrator has significant management responsibilities to ensure that federal taxpayer dollars are wisely used by grantees and are in compliance with the law, regulations, and the cooperative agreements signed by SBDC grantees. Congress authorizes the SBDC grantees to provide client names for the purposes of financial audits conducted by the Administrator or Inspector General and for client surveys to ensure that the SBDC grantees are satisfying certain aspects of their grant agreements. Congress recognizes that client surveys may be misused and impose restrictions on their use. Until regulations are in place to ensure that SBDC grantee client's privacy is protected to the maximum extent practicable given the management oversight responsibility of the Administrator, Congress requires client surveys to be approved by the Inspector General and any approval incorporated into the semi-annual report made to Congress. This section also makes a technical change in wording of the SBDC program. It renames the certification program as an accreditation program. The change was made because institutions are accredited not certified. Since the program determines the quality of SBDCs, it makes sense to have them accredited not certified. An identical change is made in 20(a)(1)(D)-(E). Section 143. Advisory Committee on Veterans Business Affairs Congress has determined that the federal government must provide better assistance and support to veterans in their efforts to form and expand small businesses. In 1999, as part of this effort, Congress established an Advisory Committee on Veterans Business Affairs. Its responsibilities included providing advice to Congress and the Small Business Administration on policy initiatives that would promote entrepreneurship by veterans. The responsibilities of this advisory board were to be taken over by the National Veterans Business Development Corporation on October 1, 2004. Congress determined that the Advisory Committee's role was sufficiently beneficial that it should not be subsumed within the National Veterans Business Development Corporation. As a result, Congress authorized an extension of the Advisory Committee as a separate entity to continue its functions through September 30, 2006. Section 144. Outreach grants for veterans The Administration is authorized to provide outreach grants to help disabled veterans start and expand small businesses. Congress determined that the outreach grants should not be limited to disabled veterans. This section extends the authority to provide outreach programs to veterans and reservists. Section 145. Authorization of appropriations To express Congress' concern about adequate efforts to assist veterans, Congress determined that the Small Business Administration's Office of Veterans Affairs should have a separate authorization. This section provides for that separate authorization for fiscal years 2005 and 2006. Section 146. National Veterans Business Development Corporation A ruling by the Department of Justice concluded that the National Veterans Business Development Corporation was a federal agency for all purposes and thus subject to, among other things, federal administrative, personnel, and procurement laws. Congress, when it created the corporation, never intended that it would be considered a federal agency. The legislation mandated sufficient fundraising by the corporation that would eliminate the need for federal funding. While that fundraising continues, Congress determined that its original intent concerning the status of the corporation should be honored. This section makes it clear that the corporation is to be considered and treated as a private entity and not an agency or instrumentality of the federal government. Section 147. Small Business Manufacturing Task Force Manufacturing jobs in the United States have declined since their historic peak in 1979 and that loss has accelerated in recent years. Small business manufacturers constitute over 98 percent of our nation's manufacturing enterprises. It is impossible to overstate the role of small manufacturers within the overall manufacturing industry and our nation's economy. The House and Senate Small Business Committees have placed a high priority on trying to resuscitate the small business industrial base because economic security in the United States cannot occur in a purely post-industrial economy. Section 147 establishes a Small Business Manufacturing Task Force within the Small Business Administration, charged with ensuring that the Administration is properly addressing the particular needs of small manufacturers. Specifically, the Small Business Manufacturing Task Force will: (a) evaluate and identify whether existing programs and services are sufficient to serve small manufacturers' needs, or whether additional programs or services are necessary; (b) actively promote the SBA's programs and services that serve small manufacturers; and (c) identify and study the unique conditions of small manufacturers, and develop and propose policy initiatives to support and assist them. This section also instructs the Small Business Manufacturing Task Force to submit a report of its findings and recommendations to the President and the Senate and House Small Business Committees not later than 12 months after the effective date of the bill and annually thereafter. In carrying out their obligations under this section, Congress expects that the Task Force will consult with other agencies that have manufacturing responsibilities, such as the Department of Commerce. Section 151. Streamlining and revision of HUBZone eligibility requirements The Historically Underutilized Business Zone (HUBZone) program was designed to direct portions of federal contracting dollars into areas of the country that in the past have been out of the economic mainstream. HUBZone areas, which include qualified census tracts, poor rural counties, and Indian reservations, often are out-of-the-way places that the stream of commerce passes by, and thus tend to be in low or moderate income areas also characterized by comparatively high unemployment. These areas can also include certain rural communities and tend generally to be low-traffic areas that do not have a reliable customer base to support business development. As a result, businesses have been reluctant to move into these areas and expend the necessary funds to develop the infrastructure for creation of jobs. It simply has not been profitable, without a customer base, to keep those businesses operating. The HUBZone program seeks to overcome these problems by providing the means for Federal procurement activities to become customers for small businesses that locate in HUBZones. While a small business works to grow, expand its payroll, and establish a solid base of commercial or other customers, federal business opportunities can be of vital importance. Federal prime and subcontracts can become an important source of revenue for a HUBZone small business, and prime contracts in particular can help stabilize revenues, establish valuable past performance record, and maintain future profitability. In past years, the HUBZone program has encountered issues relating to the statutory requirement that a HUBZone firm be entirely owned and controlled by individual U.S. citizens. This requirement means that all HUBZone applicants need to be owned by human beings directly and not human beings organized as business entities. However, many small business owners and small business investors prefer to take advantage of various corporate forms in order to limit the personal liability for themselves and their families. Exceptions for Alaska Native Corporations, Indian tribal governments, and community development corporations were added by the Small Business Act reauthorization legislation in 2000. Even with those changes, the presence of a corporate entity or a limited liability company with an ownership stake in a small business would have automatically disqualified an otherwise eligible firm from participation in the HUBZone program. Small agricultural cooperatives, which already maintain presence in rural HUBZones, would have faced similar restrictions. These rules unnecessarily impede the flow of capital to the very areas that need it the most and create compliance conflicts with other small business procurement programs. Section 151 addresses this problem through streamlining and revision of the eligibility requirements for HUBZone small businesses to include small businesses that are 51 percent owned by United States citizens, as well as to include small businesses which are small agricultural cooperatives or are owned and controlled by small agricultural cooperatives. In addition, HUBZone firms owned by the Indian tribes have been facing peculiar challenges due to statutory requirements that they must hire a certain percentage of its workforce performing a federal contract or subcontract from Indian reservations or adjacent areas. These requirements, while motivated by the desire to spur economic development of the tribes, over time had the unintended consequence of putting tribally-owned firms at a disadvantage in comparison with all other HUBZone concerns by imposing a geographic restriction on the kinds of contracts that tribally-owned HUBZone firms could perform. Geographic restrictions also impeded business synergies between tribally-owned HUBZone firms and Alaskan Native Corporations. To remedy this disparity, Section 151 is providing tribally-owned HUBZone concerns the option of qualifying for the program based on locating in, and hiring workers from, either Indian reservations or any other HUBZones on the same terms as available to other HUBZone firms. Congress notes that the Indian tribes, as owners of the HUBZone firms, will be receiving expanded economic benefits from new contracting opportunities. Section 152. Expansion of qualified areas Congress observes that the HUBZone area qualifications are also in need of improvement. Paradoxically, economically distressed rural communities in states with high unemployment--among the neediest of needy areas--currently do not qualify for the HUBZone program because rural areas currently must qualify in relation to the statewide unemployment average. As an example, in calendar year 2003, Alaska had a statewide unemployment rate of 8.0 percent. To qualify as a HUBZone area, it was necessary for an Alaskan rural community to have an 11.2 percent unemployment rate. But, in 25 of the 50 states, a rural community could have qualified as a HUBZone with an unemployment range of 7.8 percent or less. Section 152 addresses this problem by modifying the definition of a ``qualified nonmetropolitan county'' to provide the option of comparing the unemployment statistic for that area to the statewide average or to the national average. The new statutory HUBZone definition should give the Small Business Administration flexibility to address both national and state-wide unemployment disparities without hurting the states that have comparatively low unemployment overall, but with pockets of serious unemployment. Congress recognizes the drastic economic ramifications of military base closures and that the HUBZone program can uniquely harness the strength and the creativity of the private sector by providing incentive for small businesses to relocate to areas suffering such ramifications. According to congressional research, more than 300 military bases closed or realigned between 1988 and 2003 and more than 50 percent of these bases were located outside of a designated HUBZone. Therefore, Congress intends that, upon the later of the enactment of this act or the date of final closure, existing as well as future military base closure areas be designated as HUBZones for a period of five years in order to reinvigorate the productive capacity of such areas and leverage existing local customers and a skilled workforce. Congress believes that new businesses and new jobs created through the HUBZone small firms mean new life for areas affected by base closure. Additionally, Congress notes the existence of numerous complaints that the current definition of HUBZone qualified areas based on census income data, in conjunction with the definition of HUBZone qualified redesignated areas, fail to provide adequate time to recoup a return on investment. These concerns appear justified. Congress observes that the HUBZone program is relatively young, and the federal government is not even close to meeting its statutory prime contracting goal of 3 percent. Because the HUBZone program was enacted into law in 1997, the initial HUBZone areas were designated on the basis of the 1990 Census. However, the federal government conducted another census in 2000. As a result, many areas were redesignated after only 3 years of the program's existence. The statute currently grandfathers the redesignated areas into the program for 3 years. Congress notes that, at the time of the last redesignation, the small business community received comparatively few benefits from the HUBZone program despite the substantial workforce recruitment, compliance, and business development efforts that must be expended by each of the HUBZone firms. These small businesses, which made business decisions to pursue the HUBZone strategy by locating in a HUBZone, adjusting their ownership structure, and recruiting HUBZone residents are in danger of being penalized for the federal government's slow initial implementation of the HUBZone program. Further, anecdotal evidence indicates that it may take a long time for a new firm to secure a federal contract, and that multiple-order contracts commonly envision task orders over a number of years. In these circumstances, a 3- year grandfather clause would appear not to provide sufficient time for a small business to generate a return on the HUBZone investment. By comparison, companies under the 8(a) program can maintain such a designation for 9 years, and a general small business designation can be maintained indefinitely. Therefore, Congress imposes a moratorium on HUBZone area redesignations by providing for an extension of the redesignation period until the conclusion of the 2010 Census. No certified HUBZone firm shall be decertified as a result of either the redesignation process based on the 2000 Census data or any revised unemployment data subsequent to December 21, 2000, the date of passage of enactment of the HUBZone in the Native America Act. It is the intent of Congress to have the Small Business Administration reinstate any HUBZone firm previously decertified based on these two criteria. Congress also finds that, concurrently with the moratorium, a study on the effectiveness of the HUBZone area definitions, including the redesignation period, must be conducted by the Office of Advocacy of the United States Small Business Administration. The Office of Advocacy is chosen to conduct this study for its particular expertise in small business procurement, rural small business development, and general small business matters. Congress directs the Office of Advocacy to examine the impact and effectiveness of the HUBZone definitions on small business development and jobs creation, and expect that the Office of Advocacy will periodically consult with congressional small business committees on matters concerning this study. Findings and recommendations of the study must be reported to congressional small business committees by May 1, 2008. Section 153. Price evaluation preference With regards to the application of existing HUBZone price preferences to international food aid procurements conducted by the United States Department of Agriculture (USDA), Congress concludes that the preferences as they currently stand are hindering the goals of U.S. foreign humanitarian food assistance programs. This view is supported by extensive consideration of market data from the Kansas City auction office of the USDA Farm Service Agency, the structure of auction tenders and other auction processes, as well as data supplied by the industry. It appears that there is a risk of various unintended and undesirable consequences to applying the current HUBZone mandate to international food aid acquisitions. In particular, it appears that, in the context of food aid tender auctions, the claimed job gains fostered by the current price preference are offset by job losses in other communities, the non-HUBZone small businesses attempting to compete may experience undue harm, and the competitive supplier base may atrophy. In turn, this may undermine USDA's capacity to secure adequate foodstuffs for malnourished persons and increase the costs to the food aid programs without realizing adequate jobs creation and business development benefits. The HUBZone price preference alternative adopted in this act (a 5 percent price evaluation preference on 20 percent of the contract) would alleviate these potentially damaging effects on the U.S. food aid system. Congress believes that this approach would preserve the HUBZone program's goal of providing HUBZone-eligible companies with a meaningful opportunity to compete while ensuring that the USDA has an adequate capacity of supply from which to draw to deliver emergency food aid in catastrophic situations. This approach would also eliminate the current HUBZone program's application problem which directly penalizes non-HUBZone small businesses due to the nature of the food aid auctions. The potential for job losses in other communities would be limited. Importantly, this approach also reflects the cornerstone of America's efforts to provide food assistance to the world's neediest people through competitive markets. According to President Dwight D. Eisenhower and congressional architects of the Small Business Act, an overarching purpose of small business procurement programs is to assure a vibrant, competitive supplier base for the federal government. Price preferences are employed to further this purpose, and should be structured accordingly. Congress notes that, in general, price preferences have been a valuable tool for encouraging a more robust supplier base. Nevertheless, Congress believes that, in these very special circumstances, it is important to encourage competition by keeping multiple vendors actively bidding in our food assistance programs to secure the lowest cost procurement and emergency supply chains in the case of humanitarian crisis. This approach builds on the current small business 10 percent set-aside by an additional 20 percent allocation of every tender to small businesses and HUBZone applicants. It guarantees full and open competition, including competition pursuant to the Small Business Act, in food aid procurement tenders to assure that U.S. food aid programs do not suffer consequences inconsistent with the intent of the price preference program. The approach in this legislation safeguards the dual interests of a vibrant small business presence in federal procurements and robust food aid programs. Section 154. HUBZone authorizations Congress notes that the federal government has failed to meet its statutory HUBZone contracting goals every single year these goals have been in effect. Continuous, dedicated authorization of the HUBZone program is essential to continue the effort to bring economic opportunities to the HUBZone areas. Therefore, Congress extends the current authorization of appropriations of $10,000,000 for the SBA's HUBZone program through Fiscal Year 2006. Section 155. Participation in federally funded projects Section 155 removes the burdensome paperwork requirements for additional certification by firms seeking to perform any State, or political subdivision projects that utilize federal dollars if they are currently certified, or otherwise meet the applicable qualification requirements, for participation in any program under Sec. 8(a) of the Small Business Act. This change will: (1) provide federally certified Sec. 8(a) small businesses with access to all State and local projects funded in whole or in part by the federal government; (2) eliminate the burden of requiring Sec. 8(a) small businesses to get certifications from the State or local government or both in addition to their federal certification under Sec. 8(a); and, (3) decrease certification costs and eliminate time delays associated with the burden of receiving additional state or local government certifications for businesses authorized to participate in program established by Sec. 8(a) of the Small Business Act. Section 161. Supervisory enforcement authority for small business lending companies This section creates a new Sec. 23 of the Small Business Act. It gives the Administrator specific enforcement and supervisory authority over Small Business Lending Companies (SBLCs) and Non-Federally Regulated SBA Lenders as those terms are defined in Sec. 162 of this conference report. The vast majority of lenders authorized to make loans pursuant to the Small Business Act have their lending and other activities overseen and regulated by federal financial regulators, including loans and corporate transactions related to their general lending practices. The Administrator makes no effort at regulating lending institutions except for their authority to make Sec. 7(a) loans. In contradistinction, there are a few institutions that are authorized to make loans pursuant to Sec. 7(a) of the Small Business Act that are not typical lending institutions. SBLCs (except for two which are wholly-owned by national banks) are subsidiaries of industrial corporations and thus not subject to any regulation by financial regulators, other than certain filings made with the Securities and Exchange Commission. Non-federally regulated SBA lenders have some state oversight but the extent varies according to state law. The only authority that the Administrator has with respect to these lenders is the ability to prohibit them from making loans pursuant to Sec. 7(a). The Administrator has no authority to take other regulatory action, similar to that available to banking regulators, to protect the public and the federal treasury. Congress concurs with the Administrator's request that greater authority is needed to regulate SBLCs and Non-Federally Regulated SBA Lenders. The basic approach adopted by Congress enables the Administrator to supervise the soundness and safety of institutions authorized to make loans pursuant to Sec. 7(a) but are not otherwise subject to the strict oversight imposed by federal financial regulators. Congress concurs with the Administrator's request that specific enforcement and supervisory authority are needed. These authorities include the power to: issue cease and desist orders, impose civil money penalties, mandate capital standards, and remove officers and directors who are acting in an unsafe and unsound manner. The power and authority tracks closely the powers granted to the Administrator with respect to regulation of SBICs and their officers and employees. In some cases, Congress differentiated regulatory powers applicable to SBLCs and those applicable to Non-Federally Regulated Lenders. Nothing in this section grants the Administrator the authority to be extended to overall corporate management of the parent that owns a SBLC. Congress provides for the Administrator to issue capital directives mandating maintenance of certain capital standards, including the requirement to increase its level of capital. The section also authorizes the Administrator to issue cease and desist orders by the SBLC or Non-Federally Regulated Lender. To ensure that the capital directive is used sparingly and only in appropriate circumstances, the Administrator is required to promulgate regulations on capital directives and may only delegate the authority to the Associate Administrator for Capital Access. The Administrator also is empowered to suspend or remove officials that have management responsibility for the entity's lending pursuant to Sec. 7(a) of the Small Business Act. No authority, explicit or implied, is authorized to remove or suspend officials that do not have management responsibilities with respect to Sec. 7(a) lending. Thus, Congress expects that the Administrator take action not to suspend the Chief Executive Officer of General Electric Corporation but only its SBLC subsidiary. Prior to the issuance of any order under this section except for a capital directive, the Administrator is required to provide any target of the order a hearing pursuant to Sec. Sec. 554, 556, and 557 of the Administrative Procedure Act. The section delegates the responsibility of conducting the hearing to administrative law judges but the final responsibility on determining whether an order should issue rests with the Administrator based on the record developed at the adjudication. The approach is similar to that used by independent federal regulatory agencies such as the Federal Communications Commission or Federal Trade Commission. Those agencies use administrative law judges to conduct hearings and the commissioners use that record as the basis for their legal and policy determination. This bifurcation of the hearing from the decisionmaker ensures that the hearing will be fair and provide an opportunity for the target of an order to make the best possible case before an impartial fact- gathering tribunal. The Administrator is authorized to issue orders prior to a hearing if extraordinary circumstances exist and the order is needed to protect the financial or legal position of the United States. The Administrator only should use the power to issue orders without a hearing only under those circumstances in which an agency issues a rule without notice and comment, i.e., a truly exigent circumstance, see, e.g., NRDC v. Evans, 316 F.3d 904, 912 (9th Cir. 2002); Utilities Solid Waste Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001) (good cause to forgo notice and comment applies only in emergency circumstances), or when a federal court would issue an ex parte temporary restraining order (but in order to preserve and protect the federal government rather than the status quo). Cf. Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974) (noting that ex parte restraining orders necessary evil to protect status quo). The section then provides that the procedures for holding a hearing, including the notice requirement, be commenced within 2 days after the issuance of the order. Congress believes that this comports with the fundamental fairness exhibited by federal courts when issuing an ex parte temporary restraining order. Congress' approach defines final agency action for purposes of a challenge to the issuance of an order by the Administrator and authorizes that a challenge may be commenced in federal court within 20 days after issuance of a final order. For purposes of fundamental fairness to individuals, Congress also believes that interim relief in federal court is appropriate for a stay of an order issued prior to hearing until the hearing itself is completed. Both of these provisions were added out of an abundance of caution. Although Congress believes that federal court jurisdiction challenging the Administrator's action may constitute a ``federal question'' pursuant to Sec. 1331 of the Title 28, United States Code, Congress determined that explicit authority to challenge the Administrator's orders in federal court removes any question that this decision has been remitted solely to the discretion of the agency and is not subject to review under Heckler v. Chaney, 470 U.S. 821 (1985). This section authorizes a court to appoint a receiver for the entities subject to regulation pursuant to this section. The receiver is entitled to take possession of assets of the SBLC or Non-Federally Regulated SBA Lender. Congress intends this authority to extend only to the SBLC or Non-Federally Regulated Lender's portfolio of loans or other instruments guaranteed by the Administrator including any debentures, participating debt, or securities issued pursuant to the Small Business Investment Act. Congress believes that suspension, revocation, or cease and desist is an extraordinary remedy. Each requires an extremely high burden of proof related to willful misconduct that may present a difficult case for the Administrator to prove. Therefore, the bill also provides the Administrator with the authority to seek court-imposed civil penalties for the failure to file reports required by the Administrator. Such penalties shall issue when the failure to file is willful and not due to neglect. The failure to file required reports for more than two reporting periods is, in the opinion of Congress, sufficient, but not the only evidence of willful neglect. Congress expects the Administrator to promulgate regulations outlining the factors that determine willful neglect for the purposes of civil penalties (as an aid to the entities regulated pursuant to Sec. 23). These regulations also must contain standards for exempting SBLCs and Non- Federally Regulated Lenders from the civil penalty provisions as well as the procedures used for determining whether the institution qualifies. Section 162. Definitions relating to small business lending companies Almost all of the lenders authorized by the Administrator to issue guaranteed loans pursuant to Sec. 7(a) are lending institutions regulated by a federal financial regulator. However, there are a few institutions that make guaranteed loans that are not subject to federal financial regulatory oversight or regulation by a state banking authority. The Administrator classifies these institutions generically as ``small business lending companies.'' However, that universe actually consists of two separate entities--small business lending companies (not financial institutions) and financial institutions not subject to any agency authorized to review the safety and soundness of depositary institutions. Since Sec. 161 adds a new Sec. 23 granting the Administrator power to regulate these entities, Sec. 162 adds two new subsections to the definitions in the Small Business Act defining small business lending companies and non-federally regulated SBA lenders. Section 201. Amendment to definition of equity capital with respect to issuers of participating securities Congress determined that changes were needed in the definition of equity capital with respect to any company that issues participating securities. Such companies, participating securities SBICs, commit to invest an amount equal to the outstanding face value of participating securities solely in equity capital. Equity capital refers to common or preferred stock or a similar instrument, including subordinated debt with equity features. Equity capital issued by participating securities SBICs previously provided for interest payments to be made to the Administration contingent upon--and limited to--the extent of earnings on equity capital. However, since the inception of the Participating Security SBIC program, the majority of SBICs have not realized sufficient profits with which to meet their financial obligations to the federal government. This has resulted in serious financial loss for the federal government. In order to mitigate these losses, the definition of equity capital has changed so that participating security SBICs do not have to realize profits on their investments in order to make payments to the Administration. If a participating security SBIC is experiencing overall losses on their investments but has other sources of funds such as invested excess funds, royalty payments, licensing fees and the like, Congress intends that these funds may be used to meet their obligations to the Administration. Section 202. Investment of excess funds This section provides SBICs with additional flexibility for handling funds prior to investments in small businesses by allowing SBICs to invest such funds in additional types of securities. Currently, SBICs holding cash, prior to investing in a small business, are only permitted to invest directly in obligations of the United States, obligations guaranteed by the United States, or in certificates of deposit maturing within one year or savings accounts that are in institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation. This section modifies the current restriction by permitting SBICs to invest in securities, mutual funds, or instruments, which themselves invest solely in the obligations that are currently permitted. For instance, Congress expects that SBICs will be able to invest in mutual funds that, in turn, invest in the government-backed obligations already authorized for investment in SBICs. Congress believes that this modification will provide SBICs with greater flexibility and a wider range of short-term investment options. Section 203. Surety Bond Amendments Section 203(a) clarifies that the current $2 million limit on surety bonds applies to the bond guarantee and not the contract size. Congress adopted this clarification to prohibit contracting officers from determining that small businesses would not qualify for an Administration-backed surety bond for a contract worth less than $2 million even though it was part of a bundle of contracts that exceeded $2 million. For example, a small business might be denied a surety bond if the small business had a contract for $1.5 million, but that contract was part of a $12 million bundle of contracts that had been awarded simultaneously. Section 203(b) requires that an audit of each participating surety shall occur every three years instead of annually. This reduction in the frequency of audits will save participating sureties time and money and allow them to allocate these resources to more productive uses. In addition, this will enable the Administrator to focus on more critical elements since the sureties already provide reports on a periodic basis that would identify problems during the interregnum between audits. Currently certain sureties designated by the Administrator may issue, monitor, and service surety bonds issued pursuant to Title IV of the Small Business Investment Act. This authority ceased to be operative on September 30, 2003 (but has been extended for short periods of time on a temporary basis). Congress determined that the authority for this program should be made permanent. Section 203(b) makes that change by repealing 207 of the Small Business Reauthorization and Amendment Act of 1988. Section 204. Effective Date of Certain Fees Loans made pursuant to Title V of the Small Business Investment Act do not require any appropriation. Fees charged to borrowers and CDCs absorb the costs associated with the issuance of such loans. When the zero-subsidy for the program was instituted, Congress made the fee authority temporary to see whether the program could survive without an appropriation. The program has succeeded admirably and Congress does not expect that an appropriation to fund loans made by CDCs will be made for the foreseeable future. As a result, Congress determined it was pointless to continue, as temporary, the Administrator's authority to charge fees for loans made pursuant to Title V of the Small Business Investment Act. Section 204 grants the Administrator permanent authority to charge fees.

Mr. MANZULLO

Mr. MANZULLO. Mr. Speaker, I rise today to pay tribute to Representative Philip M. Crane. Let me share with you remarks by Edwin J. Feulner, President of The Heritage Foundation that express his gratitude to a man who has given so much to Eighth District of Illinois and the House of Representatives. Phil Crane's Congressional colleagues will expand on his extraordinary 35-year record of legislative achievements. Others will speak of his unswerving commitment to sensible conservative economic policy based on the principles of limited government and federalism. Still others will discuss his contributions to developing sound American foreign and defense policy. For me, however, Phil Crane will be the Member of Congress who has--more than any other Member I've known in my forty years in Washington--fundamentally understood the power of ideas and the relationship of ideas to changes in the laws that govern the American people. Philip M. Crane is a man of ideas. His first book, published in March 1964, is entitled The Democrat's Dilemma. The book jacket notes the influence of extremist views and organizations on the Democratic Party. If this sounds familiar to every American who has been awake for the last several months, it's because Phil Crane's message is as timely today, for the 2004 election, as it was then, for the 1964 election. In the foreword to The Democrat's Dilemma, Jameson G. Campaigne, the then-editor of the Indianapolis Star, wrote, ``Revolutions are normally organized and engineered by small groups of men and women.'' Phil's book is an insightful account of how a small band of dedicated souls changed the world. While Phil recounts in fascinating detail the growing influence of the Fabian Socialists on the Democratic Party, even then--in 1964--Mr. Campaigne noted in his foreword that the Fabians were seeing ``their power threatened by a smaller, but equally aggressive and growing, group of conservatives.'' I first met Phil Crane in the summer of 1964 at an Intercollegiate Studies Institute summer school at Lake Forest College in Illinois. Phil was a graduate of Hillsdale College, an Army Veteran, and a bright young professor of history at Bradley University in Peoria, having recently received his Ph.D. from Indiana University where ``his academic record had never been excelled.'' Ever the teacher, for more than forty years, on America's college and university campuses, and in his committees, on the Floor of the House of Representatives, and before countless audiences around the Nation, a singular leader of that ``aggressive and growing group of conservatives'' has been Phil Crane. Looking back on the period since the Goldwater/Johnson election in 1964, the conclusion is inescapable that Phil Crane's intellectual and political leadership has been crucial to the rise of conservative ideas in this country, and that his dedication to our shared ideas of freedom and free enterprise, limited government, traditional values and a strong national defense has truly changed the world. From the day in December 1969, shortly after he won the special election to succeed Don Rumsfeld, in the old 12th District, when he asked me to be one of the first employees on his Congressional staff, I have witnessed Phil lead his colleagues in legislative battles. Some of them have been successful, even if forgotten, like eliminating the New Deal prohibition on the individual citizen's right to own gold. Others were successful in their own right, and led to much bigger things later on, like stopping President Nixon's so- called ``family assistance plan'', which led to the eventual overhaul of our whole federal welfare system. Still others were, shall we say, ``ahead of their time,'' like his efforts to prohibit federal operating subsidies for mass transit, and to repeal the private express statutes. But there was always one thing that his legislative initiatives, like his speeches, and his participation in floor debates had in common: they were always based on solid conservative principles. Phil Crane has always known that with a principled position and a determination to focus his efforts, he could make a difference. Building unlikely coalitions ranging across the political spectrum in a bipartisan way, Phil broke down barriers and created new alliances to expand the free society. His early leadership role in the founding of the Republican Study Committee as a voice for the majority viewpoint within the then minority and, for the last ten years, majority party, is recounted today in political science textbooks. Undergirding Phil's legislative achievements and his House procedural and structural reforms was his fundamental understanding that ideas have consequences. His understanding of the Founding Fathers and the system they so carefully designed resulted in the publication of his second book, which still should be a primer for conservatives interested in the basic principles of our system, The Sum of Good Government. Ahead of his time as a conservative idea leader, Phil wrote in that book, ``Once people are willing to admit the possibility of alternatives, the battle is more than half won and the time for refinements of a `conservative reform platform' will be at hand.'' Phil, your work has been critical in finding, endorsing, and fighting for the possibility of those conservative alternatives. Because of you, those conservative ideas are now the mainstream of the American political debate. And because of you, and your trail-blazing leadership, the future is bright for conservative ideas in America. As you retire, and as a self-appointed spokesman for all of those who have had the honor of serving on your staff over the last 35 years, we salute you, we always will admire you, and we look forward to continuing to work together with you to advance our ideas in the years ahead.