15 U.S.C. 640.

Defense production pools.

Transfer of small-business functions.

15 U.S.C. 641.

(2) investigations undertaken by the Administration, including external and internal audits and security and investigation reports.65

SEC. 11. (a) The President is authorized to consult with representatives of small-business concerns with a view to encouraging the making by such persons with the approval of the President of voluntary agreements and programs to further the objectives of this Act.

(b) No act or omission to act pursuant to this Act which occurs while this Act is in effect, if requested by the President pursuant to a voluntary agreement or program approved under subsection (a) of this section and found by the President to be in the public interest as contributing to the national defense, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any modification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the Federal Register unless publication thereof would, in the opinion of the President, endanger the national security.

(c) The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chairman of the Federal Trade Commission not less than ten days before making any request or finding thereunder, and (3) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.66

(d) Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subsequent act, or omission to act, by reason of such finding or request.

SEC. 12. The President may transfer to the Administration any functions, powers, and duties of any department or agency which relate primarily to small-business problems. In connection with any such transfer, the President may provide for appropriate transfers of records, property, necessary personnel, and unexpended bal

65 Section 13 of PL 93-386, the Small Business Amendments of 1974, approved August 23, 1974 (88 Stat. 742), provides that "The General Accounting Office is directed to conduct a full-scale audit of the Small Business Administration, including all field offices. This audit shall be submitted to the House and Senate not later than six months from the date of enactment of this Act."

The President delegated this authority to the SBA Administrator by Executive Order 10493, dated October 14, 1953. (18 F.R. 6583; 3 CFR, 1949-1953 Comp., p. 974).

Listing of attorneys.

agents and

15 U.S.C. 642.

ances of appropriations and other funds available to the department or agency from which the transfer is made. SEC. 13. No loan shall be made or equipment, facilities, or services furnished by the Administration under this Act to any business enterprise unless the owners, partners, or officers of such business enterprise (1) certify to the Administration the names of any attorneys, agents, or other persons engaged by or on behalf of such business enterprise for the purpose of expediting applications made to the Administration for assistance of any sort, and the fees paid or to be paid to any such persons; (2) execute an agreement binding any such business enterprise for a period of two years after any assistance is rendered by the Administration to such business enterprise, to refrain from employing, tendering any office Employment or employment to, or retaining for professional services, any person, who, on the date such assistance or any part thereof was rendered, or within one year prior thereto, shall have served as an officer, attorney, agent, or employee of the Administration occupying a position or engaging in activities which the Administration shall have determined involve discretion with respect to the granting of assistance under this Act; and (3) furnish the names of lending institutions to which such business enterprise has applied for loans together with dates, amounts, terms, and proof of refusal.

SEC. 14. To the fullest extent the Administration deems practicable, it shall make a fair charge for the use of Government-owned property and make and let contracts on a basis that will result in a recovery of the direct costs incurred by the Administration.

SEC. 15. (a) To effectuate the purposes of this Act, small business concerns within the meaning of this Act shall receive any award or contract or any part thereof, and be awarded any contract for the sale of Government property, as to which it is determined by the Administration and the contracting procurement or disposal agency (1) to be in the interest of maintaining or mobilizing the Nation's full productive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services. for the Government are placed with small-business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Government property be made to small-business concerns; but nothing contained in this Act shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Government or any agency thereof. These determinations may be made for individual awards or contracts or for classes of awards or contracts. Whenever the Administration and

agreement.

Charges for owned property

Government

15 U.S.C. 643.

Joint-determifor awarding selling property 15 U.Š.C. 644.

nation program

contracts or

Division of contracts.

Procurement assistance for

nizations.

the contracting procurement agency fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Administrator.

(b) With respect to any work to be performed the amount of which would exceed the maximum amount of any contract for which a surety may be guaranteed against loss under section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694(b)), the contracting procurement agency shall, to the extent practicable, place contracts so as to allow more than one small business concern to perform such work.67

(c) During fiscal year 1978, public and private organonprofit organizations and individuals eligible for assistance under section 7(h) of this Act shall be eligible to participate in such contracts or any part thereof in an aggregate amount not to exceed $100,000,000: Provided, however, That the Administration, not later than March 1, 1979, shall prepare and transmit to the Select Committee on Small Business of the Senate and the Committee on Small Business of the House of Representatives, a report on the impact of contracts awarded to such organizations and individuals on small business.68

Contract awards, priority.

(d) 69 For purposes of this section priority shall be given to the awarding of contracts and the placement of subcontracts to concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus. areas. Notwithstanding any other provision of law, total labor surplus area set-asides pursuant to Defense Manpower Policy Number 4 (32A C.F.R. Chapter 1) or any successor policy shall be authorized if the Secretary or his designee specifically determines that there is a reasonable expectation that offers will be obtained from a sufficient number of eligible concerns so that awards will be made at reasonable prices. As soon as practicable and to the extent possible, in determining labor surplus areas, consideration shall be given to those persons who would be available for employment were suitable employment available. Until such definition reflects such number, the present criteria of such policy shall govern.

(e) In carrying out labor surplus area and small business set-aside programs, departments, agencies, and instrumentalities of the executive branch shall award

67 Added by section 502 of PL 95-89, August 4, 1977.

68 Added by section 502 of PL 95-89, August 4, 1977.

69 Added by section 502 of PL 95-89, August 4, 1977, section 15 (d) encourages the placement of contracts and subcontracts into the labor surplus area program. Where determinations are made that sufficient competition exists. Government contracting agencies may designate total set-asides of labor surplus area contracts. First priority of the awarding of Government contracts is given to small businesses that are eligible for labor surplus area contracts. Second priority is given to total set-asides for small businesses. Third priority is given to partial set-asides for small businesses. Fourth priority is given to total labor surplus area set-asides for large and small firms.

contracts, and encourage the placement of subcontracts for procurement to the following in the manner and in the order stated:

(1) Concerns which are located in labor surplus areas, and which are also small business concerns, on the basis of a total set-aside.

(2) Concerns which are small business concerns on the basis of a total set-aside.

(3) Concerns which are small business concerns, on the basis of a partial set-aside.

(4) Concerns which are located in labor surplus areas on the basis of a total set-aside.

(f) The provisions of subsections (d) and (e) shall cease to be effective subsequent to September 30, 1979, unless renewed prior to such date.

Penalty for statements. 15 U.S.C.

SEC. 16. (a) Whoever makes any statement knowing it false to be false, or whoever willfully overvalues any security, ... 645. for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security there for, or for the purpose of influencing in any way the action of the Administration, or for the purpose of obtaining money, property, or anything of value, under this Act, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.

Penalty for

(b) Whoever, being connected in any capacity with wrongful the Administration, (I) embezzles, abstracts, purloins, or conduct. willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise entrusted to it, or (2) with intent to defraud the Administration or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Administration, makes any false entry in any book, report, or statement of or to the Administration, or, without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage. judgment, or decree thereof, or (3) with intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the Administration, or (4) gives any unauthorized information concerning any future action or plan of the Administration which might affect the value of securities, or, having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company or corporation receiving loans or other assistance from the Administration, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.

89-695-77- -4

Penalty for misappropriation of

(c) Whoever, with intent to defraud, knowingly conSBA collateral. ceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or pledged to, or held by, the Administration, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.70

SBA collateral.

Subordination of SEC. 17. Any interest held by the Administration in 15 U.S.C. 646. property, as security for a loan, shall be subordinate to any lien on such property for taxes due on the property to a State, or political subdivision thereof, in any case where such lien would, under applicable State law, be superior to such interest if such interest were held by any party other than the United States.

Avoidance of duplication.

SEC. 18. The Administration shall not duplicate the 15 U.S.C. 647. work or activity of any other department or agency of the Federal Government, except to those enterprises engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries, and nothing contained in this Act shall be construed to authorize any such duplication unless such work or activity is expressly provided for in this Act. If loan applications are being refused or loans denied by such other department or agency responsible for such work or activity due to administrative withholding from obligation or withholding from apportionment, or due to administratively declared moratorium, then, for purposes of this section, no duplication shall be deemed to have occurred.71

Separability. 15 U.S.C. 648.

Authorization for appropria

649.

SEC. 19. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

SEC. 20. (a) There are hereby authorized to be approtions. 15 U.S.C. priated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act other than those for which appropriations are specifically authorized.

(b) The following program levels are authorized for fiscal year 1978:

(1) For the programs authorized by section 7(a) of this Act, the Administration is authorized to make $400,000,000 in direct loans, $15,000,000 in immediate participation loans, and $3,000,000,000 in deferred participation loans.

(2) For the programs authorized by section 7(h) of this Act, the Administration is authorized to

70 Section 16 (c) added by section 2 of PL 88-264, approved February 5, 1964. (78 Stat. 8).

Last sentence added by section 5 of PL 93-386, the Small Business Amendments of 1974, approved August 23, 1974. (88 Stat. 742). Section 112(e) of PL 94-305, approved June 4, 1976 (90 Stat. 663), added the "except" clause in the first sentence of this section.