Appendix - Small Business Administration

[Appendix]
[Detailed Budget Estimates by Agency]
[Small Business Administration]
[From the U.S. Government Printing Office, www.gpo.gov]

[[Page 1079]]

SMALL BUSINESS ADMINISTRATION

The budget requests $1,062 million in new budget authority for the
Small Business Administration (SBA). This funding request represents a
very strategic investment of the Federal budget dollar. Therefore, we
characterized the theme of our 2001 budget as ``Managing for Results.''
The Administration's spending plans for 2000 and 2001 have been
developed in conjunction with the Government Performance and Results Act
(GPRA) and provide better service and more assistance to small
businesses as we enter the 21st century.

SBA has identified two broad goals: helping small businesses
succeed and modernization. The first goal reflects an emphasis on
increasing assistance and access to individuals and firms in new market
areas and involves providing a wide range of services and programs
including capital, credit, technical assistance, training, education,
and procurement assistance. The second goal emphasizes improvements in
the delivery of services to customers by upgrading the systems that
support programs, by investing in training to enhance skill levels of
employees, and by improving the overall operation of the Agency.

This budget includes a comprehensive new markets agenda to better
serve small businesses in these areas including: an expanded new markets
venture capital program of $150 million in debentures with $30 million
in related technical assistance; $15 million for PRIME technical
assistance; an expanded microloan loan program of $60 million with $45
million in related technical assistance; $6.6 million for an expanded
BusinessLINC mentor-protege program; and $3 million to establish
reservation-based Native American Small Business Development Centers.

Federal Funds

General and special funds:

Salaries and Expenses

For necessary expenses, not otherwise provided for, of the Small
Business Administration as authorized by Public Law 105-135, including
hire of passenger motor vehicles as authorized by 31 U.S.C. 1343 and
1344, and not to exceed $3,500 for official reception and representation
expenses, [$282,300,000] $163,000,000: Provided, That the Administrator
is authorized to charge fees to cover the cost of publications developed
by the Small Business Administration, and certain loan servicing
activities: Provided further, That, notwithstanding 31 U.S.C. 3302,
revenues received from all such activities shall be credited to this
account, to be available for carrying out these purposes without further
appropriations[: Provided further, That $84,500,000 shall be available
to fund grants for performance in fiscal year 2000 or fiscal year 2001
as authorized by section 21 of the Small Business Act, as amended.]
[In addition, for the costs of programs related to the New Markets
Venture Capitol program, $10,500,000, of which $1,500,000 shall be for
BusinessLINC, and of which $9,000,000 shall be for technical assistance:
Provided, That the funds appropriated under this paragraph shall not be
available for obligation until the New Markets Venture Capitol program
is authorized by subsequent legislation.] In addition, to reimburse the
Small Business Administration for qualified expenses of delinquent non-
tax debt collection, to be derived from increased agency collections of
delinquent debt, 5 percent of such collections but not to exceed
$3,000,000. (Departments of Commerce, Justice, and State, the Judiciary,
and Related Agencies Appropriations Act, 2000, as enacted by section
1000(a)(1) of the Consolidated Appropriations Act, 2000 (P.L. 106-113).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Government contracting and
minority enterprise development. 26 30 20
00.02 Disaster assistance............... 116 118 124
00.04 Management and administration..... 74 71 96
00.05 Executive direction............... 11 12 10
00.06 General counsel................... 7 7 7
00.07 Congressional and legislative
affairs......................... 1 1 1
00.08 Hearings and appeals.............. 1 1 1
00.09 Communications and publications... 3 3 3
00.11 Advocacy.......................... 5 6 5
00.12 Field operations.................. 2 2 1
00.13 Equal employment opportunity and
civil rights compliance......... 2 2 2
00.14 Regional and district offices..... 134 137 142
00.15 Chief financial officer........... 11 11 7
00.16 Capital Access.................... 43 59 28
00.17 Entrepreneurial development....... 137 134 6
00.18 Small disadvantaged businesses.... 8 12
--------- --------- ----------
10.00 Total new obligations........... 581 606 453
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 17 3
22.00 New budget authority (gross)...... 568 601 453
22.10 Resources available from
recoveries of prior year
obligations..................... 3 2
22.21 Unobligated balance transferred to
other accounts..................
22.22 Unobligated balance transferred
from other accounts.............
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 588 606 453
23.95 Total new obligations............. -581 -606 -453
23.98 Unobligated balance expiring or
withdrawn....................... -4
24.40 Unobligated balance available, end
of year......................... 3
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 288 323 163
40.76 Reduction pursuant to P.L. 106-
113........................... -3
42.00 Transferred from other accounts. 5
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 293 320 163
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 275 281 290
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 568 601 453
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 182 217 224
73.10 Total new obligations............. 581 606 453
73.20 Total outlays (gross)............. -538 -585 -521
73.40 Adjustments in expired accounts
(net)........................... -5 -12
73.45 Adjustments in unexpired accounts. -3 -2
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 217 224 156
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 436 457 380
86.93 Outlays from discretionary
balances........................ 102 128 141
--------- --------- ----------
87.00 Total outlays (gross)........... 538 585 521
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Federal sources:
88.00 Payments from business loan
program account........... -114 -129 -133
88.00 Payments from disaster loan
program account........... -147 -136 -154
88.00 Federal sources............. -11 -13
88.40 Non-Federal sources........... -3 -3 -3
--------- --------- ----------

[[Page 1080]]

88.90 Total, offsetting
collections (cash)........ -275 -281 -290
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 293 320 163
90.00 Outlays........................... 263 304 231
---------------------------------------------------------------------------

The Administration proposes to separate the Salaries and Expenses
account into the following two accounts: (1) Salaries and Expenses--
includes compensation and benefits, technological investments, supplies,
contracts, and the general administrative costs of operating SBA's
various programs, etc; (2) Non-Credit Business Assistance Programs--
includes a variety of programs in Entrepreneurial Development,
Government Contracting and Minority and Enterprise Development, and
Capital Access, as well as the offices of Advocacy and the National
Ombudsman. The following components of the Salaries and Expenses Account
are detailed below.

Executive Direction.--Executive Direction includes the Office of the
Administrator, Equal Employment Opportunity and Civil Rights Compliance
(EEO&CRC), Congressional and Legislative Affairs (CLA), Hearings and
Appeals (HA), General Counsel, Field Operations, Communications and
Public Liaison (CPL), and the Office of the Chief Financial Officer
(CFO). The Office of the Administrator provides general management to
the SBA organization. The Office of EEO & CRC ensures SBA and its
programs comply with all applicable equal opportunity laws and
regulations. The Office of CLA provides agency wide support and
coordination for all congressional activities. The Office of HA decides
size, Small Disadvantaged Business, FOIA and other administrative
appeals and processes SBREFA complaints for the Agency. The Office of
the General Counsel provides agency wide legal support and advice. The
Office of Field Operations oversees and provides management and
operational support to SBA's regional and district offices. SBA's field
offices are an important delivery mechanism of SBA services to small
businesses. The Office of CPL coordinates SBA's marketing, public
outreach, and public information programs. The Office of the CFO
administers SBA's budget and financial management activities, including
financial systems, subsidy rates, financial reporting, and internal
control activities. SBA also has a Policy unit that directs and
coordinates the Agency's planning and oversight of management processes
under the Government Performance and Results Act (GPRA).

Management and Administration.--The Associate Deputy Administrator
for Management and Administration (ADA) directs the Office of the Chief
Information Officer (OCIO), Office of Administration (OA), and Office of
Human Resources (OHR). The OCIO has lead responsibility for SBA's
systems modernization initiatives and its Y2K resolution. The Office of
Administration administers SBA's space management, printing, and
procurement and grants management programs. The Office of Human
Resources administers SBA's workforce planning and management efforts,
including workforce training programs.

Program Performance

Management and Administration:

Workforce Transition.--In order to effectively transition SBA's
workforce to the new roles and responsibilities facing the Agency today
and into the 21st Century, we request $4 million (included in the
operating expenses) to support increased training and to transition our
staff to a more customer-focused and community-based structure.

SBA Modernization.--The funding request of $13 million (included in
the operating expenses) provides the next annual installment of $8
million toward this multi-year systems effort, plus $5 million toward
the disaster loan systems project. This systems modernization project
will result in more modern and efficient delivery of SBA's programs and
services and increases efficiencies. The upgrading and/or replacement of
our financial management systems for loan programs and budgeting
transactions will have a positive impact on our internal risk
management, planning, control processes, financial reporting and
compliance with law in areas such as systems security, standard general
ledger, etc. Also, we anticipate that the deployment of a paperless
disaster home loan application process may result in as much as $20-$25
million annually in reduced administrative expenses, making this extra
systems investment very cost effective. We have in place a five-year
plan to modernize all of our major systems and processes. Significant
progress was made on Phase I (Loan Monitoring and Oversight) in 1998 and
1999. We anticipate hardware acquisition and software development in
2000 and 2001, leading to full modernization implementation in 2002-
2003.

Other Information Technology Investments.--The budget includes $7.0
million (in the operating expenses) to contract for on-going computer
upgrades, maintenance, and acquisition of the latest operating system.
SBA's technology infrastructure is two generations behind current
standards and may not be supported in the near future. This investment
will improve our extensive interaction with the public and external
resource partners and will support our systems modernization efforts,
which require increased computer capability.

Administrative Operating Expenses.--For 2001, the funding request
for general and administrative operating expenses is $328.5 million
($163 from the Salaries and Expenses account, $132.5 million from the
Business Loans program account, and $30 million from the Disaster Loan
Program account, and $3 million in fees). This funding level maintains
the current workforce. The increased funds in 2001 will allow us to
maintain a current services level of operations, provide an employee pay
raise in January of 2001, and cover anticipated inflationary increases
in areas such as telephones and rents.

Performance Goals

Program and Policy Goals under the GPRA.--Small business success
remains a primary policy of this Administration. The SBA's mission is to
maintain and strengthen the nation's economy by aiding, counseling,
assisting, and protecting the interests of small businesses and by
helping families and businesses recover from disasters. The following
three program and policy goals form the basis of the programs for which
we are requesting funding: (1) help small businesses succeed,
particularly in new market segments, through fair and equitable access
to capital, government contracts, business development, and policy
representation and advocacy support; (2) modernize the SBA through a
trained and motivated workforce, expanded use of electronic tools,
upgraded information systems, and improved lender oversight; and (3)
help families and businesses recover from natural disasters through
access to needed capital and credit.

SBA's Strategic Plan.--SBA's five-year strategic plan developed in
1998 includes the specific goals and strategies to be employed in 1998-
2003 to accomplish this mission. This plan is updated annually based on
current actual performance against measurable goals, the impact of
actual appropriations, and their impact on Agency goals and objectives
for future years. Monthly reviews are completed to determine actual

[[Page 1081]]

performance against goals; recommendations are made on the review
process for any unfavorable variances.

Object Classification (in millions of dollars)

Personnel compensation:

11.1 Full-time permanent............. 167 169 169
11.3 Other than full-time permanent.. 10 11 10
11.5 Other personnel compensation.... 5 5 5
--------- --------- ----------
11.9 Total personnel compensation.. 182 185 184
12.1 Civilian personnel benefits....... 42 42 43
21.0 Travel and transportation of
persons......................... 6 5 5
23.1 Rental payments to GSA............ 28 29 29
23.3 Communications, utilities, and
miscellaneous charges........... 9 10 10
24.0 Printing and reproduction......... 1
25.2 Other services.................... 46 45 56
26.0 Supplies and materials............ 1 1
31.0 Equipment......................... 2 1 1
41.0 Grants, subsidies, and
contributions................... 143 160
Undistributed:

92.0 Undistributed (disaster loan
making)....................... 86 87 90
92.0 Undistributed (disaster loan
servicing).................... 28 29 34
92.0 Undistributed (SDB)............. 8 12
--------- --------- ----------
99.9 Total new obligations........... 581 606 453
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 73-0100-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 4,567 4,509 4,288
---------------------------------------------------------------------------
Note.--The personnel summary includes regular (non-disaster) full-
time equivalents (FTEs) of 2,979, 3,242, and 3,279 in 1998, 1999, and
2000 respectively.

Non-credit Business Assistance Programs

For non-credit programs authorized under the Small Business Act, as
amended, $256,050,000, of which $89,500,000 shall be for grants for
performance in fiscal year 2001 or fiscal year 2002: Provided, That (1)
$85,000,000 shall be for grants for the purposes authorized by section
21 of such Act, (2) $3,000,000 to establish a reservation-based Native
American Small Business Development Center network, including
subcenters, to serve Native Americans on a national basis subject to
section 21 of such Act but without the necessity for matching funds, and
(3) $1,500,000 to support the Tribal Business Information Centers:
Provided further, That any balances of FY2000 funds appropriated for
these non-credit programs under the heading, ``Salaries and Expenses'',
may be transferred to this heading, to be available to carry out these
programs and to be available for the time period originally provided.

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Non-Credit Business Assistance
Programs (Gross)................ 256
09.02 Reimbursable program.............. 9
--------- --------- ----------
10.00 Total new obligations........... 265
----------------------------------------------------------------------------

Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 265
23.95 Total new obligations............. -265
24.40 Unobligated balance available, end
of year.........................
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 256
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 9
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 265
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 265
73.20 Total outlays (gross)............. -150
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 115
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 150
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -9
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 256
90.00 Outlays........................... 141
---------------------------------------------------------------------------

This appropriation funds the non-credit business assistance programs
administered by SBA, including Small Business Development Centers
(SBDCs), Women's Business Centers, HUBZone Empowerment Contracting,
Electronic Commerce, New Markets Technical Assistance, and PRIME. The
administrative funding for most of these programs is provided in the
Salaries and Expenses account. The following program areas are
responsible for the direction of the non-credit business assistance
programs:

Entrepreneurial Development.--The Associate Deputy Administrator
(ADA) for this function directs the following SBA programs: Women's
Business Ownership; Small Business Development Centers; Veteran's
Affairs; Office of Native American Affairs; and Business Initiatives,
which includes the Service Corps of Retired Executives. These programs
provide outreach and technical assistance to small business communities,
especially women, Veterans, and minorities. Through special initiatives
such as the One Stop Capital Shops, Distance Learning, Welfare to Work
and Entrepreneurship for Adults with Disabilities, SBA will increase its
access to entrepreneurs, particularly in ''new markets.''

Government Contracting and Minority Enterprise Development.--The
Associate Deputy Administrator for this function directs the following
SBA programs: Government Contracting; Section 8(a) Business Development;
Technology; HUBZone Empowerment Contracting; and Size Standards. These
offices are responsible for effectively advocating for small businesses
in the area of government contracting and Federal research and
development. Government contracting activities are aimed at ensuring
that small businesses receive a fair share of Federal procurement
awards. The Section 8(a) Business Development program provides
assistance to socially and economically disadvantaged small business
concerns, primarily in the areas of business development and Federal
procurement. Through this office, SBA assists firms that are owned by
disadvantaged persons to help them develop into viable competitive
businesses in a reasonable period of time. This office also administers
the government-wide Small Disadvantaged Business (SDB) program,
certifying firms as SDB to facilitate their active participation in
Federal procurement. The HUBZone Empowerment Contracting program
promotes economic development, community empowerment, and job growth in
underutilized urban and rural communities.

Capital Access.--The Associate Deputy Administrator (ADA) for this
function directs the following SBA programs: Financial Assistance;
Surety Bond Guarantees; Investment; and International Trade. These
offices are responsible for the administration of all SBA credit and
international trade and lending programs. The capital and credit
programs administered through these offices and delivered in SBA's field
offices provide small businesses access to the financing needs they have
to start and grow their businesses, especially those businesses and
individuals located in new market areas. SBA offers many lending
programs, such as 7(a) and SBIC, and tools, such as LowDoc and SBA
Express to enhance small business access to these programs.

[[Page 1082]]

Program Performance

Entrepreneurial Development:

Small Business Development Centers (SBDCs).--The SBDCs provide long
term counseling to small businesses at about 1,000 locations in 50
states and Puerto Rico, Guam, and the District of Columbia. In 1999,
more than 595,000 customers were served, of which 42 percent were women
and 23 percent were minorities. For 2001, the budget process proposes
federal funding of $85 million.

Native American Small Business Development Centers (NASBDs).--The
budget proposes $3 million to establish a reservation-based Native
American Small Business Development Center network to serve Native
American entrepreneurs.

Women's Business Centers.--Through this program, the SBA awards
grants to nonprofit organizations to deliver entrepreneurial training
programs to women business owners or those interested in starting
businesses. In 1999, 59 funded and 22 graduated women's business centers
were operating in 47 states, the District of Columbia, Puerto Rico, and
the Virgin Islands. Each offers financial, management, marketing and
technical assistance to current and potential women business owners. In
2000, with the $9 million appropriation we will fund approximately 12
recompeted centers, approximately 6-8 new centers, and the continuation
of funding for 45 centers. With the 2001 funding request of $12 million,
we will expand coverage in all 50 states. We propose that in 2001, there
will be 46 centers with current funding cycles, 12 centers with ongoing
second funding cycles, 13 additional recompeted centers, and
approximately 15 new centers. In addition, we will continue two
initiatives begun in 1996: OWBOZone, an intranet that links all of the
Women's Business Centers; and the Online Women's Business Center on the
Internet, which allows women nationwide to have access to the same
services offered by the centers.

One Stop Capital Shops (OSCS).--OSCSs are located in Empowerment
Zones and Enterprise Communities. This program's objective is to
stimulate and sustain economic revitalization in distressed areas. An
OSCS is a partnership between SBA and a local community designed to
offer small business assistance under one roof from an easy to access,
retail location. Each is unique, is located in a distressed area, and
targets new urban and rural markets. For 2001, we propose funding of
$10.0 million for the OSCS program to support the existing network of
One-Stop locations and to open new OSCS centers in the new Empowerment
Zones.

Native American Outreach Through Tribal Business Information Centers
(TBICs).--With $1.5 million SBA will provide reservation and non-
reservation-based entrepreneurs access to state-of-the-art computer
hardware and software, one-on-one business counseling services, and
business development workshops. The facilitators of these centers have
received extensive technical training in SBA's lending, business
development and entrepreneurial development programs. In 1999, these
centers served approximately 3,926 clients, provided 4,757 hours of
business counseling, held approximately 200 workshops, assisted in the
completion of approximately 192 business plans and 123 loan packages,
and were instrumental in the startup of approximately 171 new
businesses.

Veteran's Outreach.--The budget proposes $4 million in 2001 to
implement the Veteran's Entrepreneurship and Small Business Development
Act of 1999. With this funding, SBA will be able to assist the
authorized corporation in its operation and provide enhanced training
and technical assistance to America's veterans.

Service Corps of Retired Executives (SCORE).--For 2001, the budget
proposes a funding level of $5.0 million for this program. The
additional funding will provide upgrades to the SCORE computer network.
Using one-on-one counseling and workshops, SCORE reaches approximately
383,000 business owners annually using approximately 12,500 counselors
through 389 chapters located across the country. Counseling costs to the
Government are less than $3 per hour.

Business Information Centers (BIC).--These centers offer self-help
hardware, software and reference materials, and on-site counseling
provided by SCORE volunteers. Individuals who are in business or are
interested in starting a business will find many resources specifically
targeted at helping businesses grow or find new market niches. For 2001,
the budget includes $700 thousand to support these locations.

Government Contracting and Minority Enterprise Development:

Section 8(a) Business Development.--SBA administers a number of
programs and initiatives to support the business development and
contracting goals of socially and economically disadvantaged businesses.
These include the Section 8(a) program and the Section 7(j) technical
assistance programs. The Section 8(a) program certifies firms for
participation in sole-source federal contracts and access to targeted
business development, executive development, and technical assistance
through the Section 7(j) program. For 2001, the budget proposes $5
million in Section 7(j) technical assistance funding to support the
expanding executive development and business assistance needs of these
entrepreneurs.

Small Disadvantaged Business (SDB) Certification and Eligibility.--
Since 1998, SBA was designated as the lead agency in the certification
of SDB firms. This certification process enables firms to receive
federal contract preferences. Funding for this program is provided
through reimbursements from the 20 largest Federal procuring agencies.
The program's funding level for 2001 is proposed to be $9 million.

HUBZones.--The budget proposes $5 million for this program.
Legislation passed in 1998 created a national program to support
economic development and job growth in ``historically underutilized
zones''. SBA certifies small firms in HUBZone areas that hire residents
of such areas as eligible for federal contract preferences.

Pro-Net.--The budget proposes $750 thousand for 2001 for this
program. The Procurement Marketing Network (PRO-Net) program helps
ensure that small businesses can be competitive in a changing
procurement environment. By providing an interface with other electronic
procurement applications such as the Electronic Posting System and the
Commerce Business Daily, the more than 188,000 small businesses that are
currently registered will be aware of procurement opportunities.

Electronic Commerce.--With the $5 million proposed in the budget,
SBA will work with the Departments of Commerce and Agriculture to
implement an education, training, and outreach program to ensure small
businesses remain competitive by participating in electronic commerce.

BusinessLINC.--With the $6.6 million proposed in the budget, SBA
will assist in the support of BusinessLINC, an initiative to link large
businesses with small businesses in order to expand their access to
markets, enhance management development, obtain technical assistance and
leverage core strategies; promote best practices; and help grow small
businesses in distressed urban, Native American, and isolated
communities.

Small Business Innovation and Research (SBIR) Program Awards.--The
budget proposes $14 million to implement a three-year new matching grant
pilot program to support Phase III commercialization of the technology
developed under SBIR grants. Federal contributions would match con

[[Page 1083]]

tributions from non-Federal sources in a 1:2 ratio, to an average award
of $250,000. SBA would award approximately 56 grants each year. In
addition, $1 million is proposed to develop multi-agency SBIR
solicitation topics, solicite white papers and hold workshops for small
businesses

Capital Access:

U.S. Export Assistance Centers.--The 2001 budget includes a request
for $3.5 million to continue these services. As nearly 97 percent of
U.S. export firms are small businesses, they account for 31 percent of
the total U.S. export sales. The SBA is a partner with the Department of
Commerce and the Export-Import Bank in the U.S. Export Assistance Center
(USEAC) Program. Through a network of 19 USEACs located across the
nation, SBA delivers financial and technical assistance and business
development counseling to small businesses that sell their products
globally.

Microloan Technical Assistance.--The 2001 budget requests $45
million for this program, which is needed to support the current
portfolio of microloans and the anticipated lending to be done in 2000
and 2001. The Microloan Program technical assistance component helps
small businesses gain access to private sector financing and assists
SBA's Microloan program through grants to microloan intermediaries for
on-going management advice and counseling to microborrowers. The program
also supports the Administration's initiative to help individuals
receiving welfare assistance move to work by providing opportunities to
start up small businesses. Currently, there are 128 intermediaries and
19 non-lending technical assistance intermediaries versus a statutory
limit of 200. We are proposing changes in the legislation that will
provide flexibility in lending and technical assistance, which will
result in greater access to capital. We anticipate that the Microloan
program will play a major role in the new markets initiative.

PRIME.--The budget proposes funding this program at the authorized
level of $15 million. The PRIME program provides grants to non-profit
organizations for: 1) training and technical assistance for low/very
low-income entrepreneurs, 2) training and capacity building services to
the non-profit providers, and 3) research and development in best
practices for low income entrepreneurs.

New Markets Venture Capital Technical Assistance.--In support of the
President's New Markets initiative, SBA is proposing legislation that
authorizes $150 million in venture capital ($150 million in face value
and approximately $100 million in cash value) for small businesses in
distressed rural and urban Areas. These are the areas that are
underserved by traditional financial institutions. SBA proposes to
provide business development, managerial and technical assistance
support through New Market Venture Capital companies. The 2001 budget
includes $30 million to provide the necessary level of technical
assistance supporting the $150 million program level.

Other Programs and Initiatives.--In addition to the above, SBA
proposes to fund the Women's Council for 2001 at $1 million and the
Survey of Women Owned Businesses as part of the Census for $1 million.
This account also includes $1.5 million for the Office of Advocacy and
$500,000 for the Office of the National Ombudsman. The Office of
Advocacy is the principal voice for small business within the
government. The Office of the National Ombudsman facilitates the
examination of ideas, interests, and concerns of small business to
create a fair regulatory environment.

Object Classification (in millions of dollars)

Direct obligations:

11.1 Personnel compensation: Full-
time permanent................ 12
12.1 Civilian personnel benefits..... 4
92.0 Undistributed................... 240
--------- --------- ----------
99.0 Subtotal, direct obligations.. 256
99.0 Reimbursable obligations.......... 9
--------- --------- ----------
99.9 Total new obligations........... 265
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 73-1155-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 190
---------------------------------------------------------------------------

Office of Inspector General

For necessary expenses of the Office of Inspector General in
carrying out the provisions of the Inspector General Act of 1978, as
amended (5 U.S.C. App.), [$11,000,000] $14,315,000. (Departments of
Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 2000, as enacted by section 1000(a)(1) of the
Consolidated Appropriations Act, 2000 (P.L. 106-113).)

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 General Office.................... 1 1 2
00.02 Audit............................. 4 4 5
00.03 Investigations.................... 5 5 6
00.04 Management / Legal Counsel /
Inspection and Evaluation....... 1 1 1
--------- --------- ----------
10.00 Total new obligations........... 11 11 14
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 1
22.00 New budget authority (gross)...... 11 11 14
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 11 12 14
23.95 Total new obligations............. -11 -11 -14
23.98 Unobligated balance expiring or
withdrawn....................... -1
24.40 Unobligated balance available, end
of year......................... 1
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 11 11 14
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash)..............
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 11 11 14
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 1 1
73.10 Total new obligations............. 11 11 14
73.20 Total outlays (gross)............. -11 -11 -14
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 10 10 13
86.93 Outlays from discretionary
balances........................ 1 1
--------- --------- ----------
87.00 Total outlays (gross)........... 11 11 14
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources.........
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 11 11 14
90.00 Outlays........................... 10 11 14
---------------------------------------------------------------------------

The budget proposes $14.3 million for the Office of the Inspector
General for 2001. The increased funding will enable the OIG to support
an expanded monitoring role of the Agency's Government Performance and
Results Act in reviewing the Agency's programs, performance measures,
and regulations to conserve resources and increase program efficiency
and effectiveness.

[[Page 1084]]

This appropriation provides funds for agency-wide audit,
investigative, and inspection/evaluation functions to promote economy
and efficiency in agency operations and to prevent and detect fraud,
waste, and abuse. The audit function provides internal and external
audits and other oversight activities. Internal audits assess the
general management and efficiency of SBA program operations. External
audits review program participants and their compliance with SBA
regulations and procedural requirements. Inspections/evaluations address
specific issues related to program management and effectiveness. The
investigative function detects and investigates allegations of illegal
and improper activities involving agency personnel and program
participants.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-0200-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 9 9 11
12.1 Civilian personnel benefits....... 2 2 3
--------- --------- ----------
99.9 Total new obligations........... 11 11 14
---------------------------------------------------------------------------

Personnel Summary

----------------------------------------------------------------------------
Identification code 73-0200-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
1001 Total compensable workyears: Full-
time equivalent employment...... 109 117 142
---------------------------------------------------------------------------

Public enterprise funds:

Surety Bond Guarantees Revolving Fund

Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4156-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------

Obligations by program activity:
09.01 Reimbursable obligations.......... 8 5 5
--------- --------- ----------
10.00 Total new obligations........... 8 5 5
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 4 4 3
22.00 New budget authority (gross)...... 7 4 4
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 11 8 7
23.95 Total new obligations............. -8 -5 -5
24.40 Unobligated balance available, end
of year......................... 4 3 3
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 3
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 4 4 4
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 7 4 4
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 38 37 37
73.10 Total new obligations............. 8 5 5
73.20 Total outlays (gross)............. -8 -5 -5
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 37 37 37
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 7 4 4
86.93 Outlays from discretionary
balances........................ 1 1
--------- --------- ----------
87.00 Total outlays (gross)........... 8 5 5
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.40 Offsetting collections (cash)
from: Non-Federal sources..... -4 -4 -4
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 3
90.00 Outlays........................... 5 1 1
---------------------------------------------------------------------------

The SBA is authorized to issue bond guarantees to surety companies
for construction, service, and supply contracts that do not exceed
$1,250,000 and to reimburse these sureties up to 90 percent of the
losses sustained if the contractor defaults. Under the Preferred Surety
Bond (PSP) Program, participating sureties are authorized to issue,
monitor, and service bonds without SBA's prior approval. Guarantees for
this program are limited to 70 percent. Currently, there are 15
participating sureties in the program. SBA's guarantees provide the
incentive necessary for sureties to issue bonds to small contractors who
could not otherwise compete in the contracting industry.

In 2001, the budget proposes a $1.7 billion program level that is
anticipated to be sufficient to accommodate demand from prior-approval
and preferred sureties. This program does not require a subsidy
appropriation.

Statement of Operations (in millions of dollars)

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4156-0-3-376 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 42 41 39 42
1206 Non-Federal assets: Receivables,
net.............................
------------ -------------- ------------ -------------
1999 Total assets.................... 42 41 39 42
LIABILITIES:
2201 Non-Federal liabilities: Accounts
payable......................... 38 37 35 36
------------ -------------- ------------ -------------
2999 Total liabilities............... 38 37 35 36
NET POSITION:
3100 Appropriated capital.............. 329 332 333 332
3300 Cumulative results of operations.. -325 -326 -328 -326
------------ -------------- ------------ -------------
3999 Total net position.............. 4 6 5 6
------------ -------------- ------------ -------------
4999 Total liabilities and net position 42 43 40 42
-----------------------------------------------------------------------------------------------

Credit accounts:

Business Loans Program Account

For the cost of direct loans, $5,370,000, to be available until
expended; and for the cost of guaranteed loans, [$137,800,000]
$194,360,000, as authorized by 15 U.S.C. 631 note or subsequently
authorized for the New Markets Venture Capital program, of which
$45,000,000 shall remain available until September 30, [2001] 2002:
Provided, [That of the total provided, $6,000,000 shall be available
only for the cost of guaranteed loans under the New Markets Venture
Capitol program and shall become available for obligation only upon
authorization of such program by the enactment of subsequent legislation
in fiscal year 2000: Provided further,] That such costs, including the
cost of modifying such loans, shall be as defined in section 502 of the
Congressional Budget Act of 1974, as amended: Provided further, That
during fiscal year [2000] 2001, commitments to guarantee loans under
section 503 of the Small Business Investment Act of 1958, as amended,
shall not exceed [the amount of financings authorized under section
20(e)(1)(B)(ii) of the Small Business Act, as amended: Provided further,
That during fiscal year 2000, commitments for general business loans
authorized under section 7(a) of the Small Business Act, as amended,
shall not exceed $10,000,000,000 without prior notification of the
Committees on Appropriations of the House of Representatives and Senate
in accordance with section 605 of this Act] $3,750,000,000: Provided
further, That during fiscal year [2000] 2001, commitments to guarantee
loans under section

[[Page 1085]]

303(b) of the Small Business Investment Act of 1958, as amended, shall
not exceed [the amount of guarantees of debentures authorized under
section 20(e)(1)(C)(ii) of the Small Business Act, as amended]
$500,000,000.
In addition, for administrative expenses to carry out the direct and
guaranteed loan programs, [$129,000,000] $132,525,000, which may be
transferred to and merged with the appropriations for Salaries and
Expenses. (Departments of Commerce, Justice, and State, the Judiciary,
and Related Agencies Appropriations Act, 2000, as enacted by section
1000(a)(1) of the Consolidated Appropriations Act, 2000 (P.L. 106-113).)

(rescission)

[Of the unobligated balances available under this heading,
$13,100,000 are rescinded.] (Departments of Commerce, Justice, and
State, the Judiciary, and Related Agencies Appropriations Act, 2000, as
enacted by section 1000(a)(1) of the Consolidated Appropriations Act,
2000 (P.L. 106-113).)

General Fund Credit Receipt Accounts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1154-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
0101 Business loan program, downward
reestimates of subsidies........ 695 301
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loan subsidy............... 2 3 5
00.02 Guaranteed loan subsidy........... 216 146 194
00.07 Reestimate of loan guarantee
subsidy......................... 28 3
00.08 Interest on reestimates of loan
guarantee subsidy............... 7 2
00.09 Administrative expenses........... 114 129 133
--------- --------- ----------
10.00 Total new obligations........... 367 283 332
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 104 76 53
22.00 New budget authority (gross)...... 311 259 332
22.10 Resources available from
recoveries of prior year
obligations..................... 36
22.22 Transferred from other accounts... 7
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 458 335 385
23.95 Total new obligations............. -367 -283 -332
23.98 Unobligated balance expiring or
withdrawn....................... -15
24.40 Unobligated balance available, end
of year......................... 76 53 53
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 224 267 332
40.36 Unobligated balance rescinded... -13
42.00 Transferred from other accounts. 1
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 225 254 332
Mandatory:

60.05 Appropriation (indefinite)...... 35 5
Discretionary:

68.00 Spending authority from
offsetting collections:
Offsetting collections (cash). 51
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 311 259 332
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 136 109 110
73.10 Total new obligations............. 367 283 332
73.20 Total outlays (gross)............. -358 -282 -314
73.45 Adjustments in unexpired accounts. -36
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 109 110 128
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 192 160 209
86.93 Outlays from discretionary
balances........................ 131 117 105
86.97 Outlays from new mandatory
authority....................... 35 5
--------- --------- ----------
87.00 Total outlays (gross)........... 358 282 314
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

88.00 Offsetting collections (cash)
from: Federal sources......... -51
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 260 259 332
90.00 Outlays........................... 307 282 314
---------------------------------------------------------------------------

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1154-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Direct loan levels supportable by subsidy
budget authority:
1150 Micro loans....................... 23 60
--------- --------- ----------
1159 Total direct loan levels........ 23 60
Direct loan subsidy (in percent):
1320 Micro loans....................... 9.54 8.54 8.95
--------- --------- ----------
1329 Weighted average subsidy rate... 9.54 8.54 8.95
Direct loan subsidy budget authority:
1330 Micro loans....................... 2 5
--------- --------- ----------
1339 Total subsidy budget authority.. 2 5
Direct loan subsidy outlays:
1340 Micro loans....................... 1 2 3
--------- --------- ----------
1349 Total subsidy outlays........... 1 2 3
----------------------------------------------------------------------------

Guaranteed loan levels supportable by subsidy
budget authority:
2150 Microloan guarantees.............. 1 16
2150 General business--7(a)............ 9,471 9,827 11,500
2150 General business--7(a) DELTA...... 37 50 50
2150 Section 504....................... 1,979 3,500 3,750
2150 Section 504 DELTA................. 3 5 5
2150 SBIC debentures................... 352 800 500
2150 SBIC participating securities..... 1,015 1,350 2,000
2150 New Market Venture Capital........ 40 150
2150 Y2K............................... 4
--------- --------- ----------
2159 Total loan guarantee levels..... 12,862 15,588 17,955
Guaranteed loan subsidy (in percent):
2320 Microloan guarantees.............. 7.97 8.32 8.37
2320 General business--7(a)............ 1.39 1.16 1.24
2320 General business--7(a) DELTA...... 2.08 1.83 1.92
2320 Section 504....................... 0.00 0.00 0.00
2320 Section 504 DELTA................. 1.29 1.13 0.89
2320 SBIC debentures................... 1.38 0.00 0.78
2320 SBIC participating securities..... 2.19 1.80 1.31
2320 New Market Venture Capital........ 0.00 15.00 14.44
2320 Y2K............................... 4.04 4.07 4.04
--------- --------- ----------
2329 Weighted average subsidy rate... 1.11 1.20 1.08
Guaranteed loan subsidy budget authority:
2330 Microloan guarantees..............
2330 General business--7(a)............ 159 108 143
2330 General business--7(a) DELTA......
2330 Section 504....................... 34 5
2330 Section 504 DELTA.................
2330 SBIC Debentures................... 6 4
2330 SBIC participating securities..... 22 24 26
2330 New Market Venture Capital........ 6 21
2330 Y2K............................... 1
--------- --------- ----------
2339 Total subsidy budget authority.. 222 143 194
Guaranteed loan subsidy outlays:
2340 Micorloan guarantees.............. 1 1
2340 General business--7(a)............ 136 113 130
2340 General business--7(a) DELTA...... 1 2 2
2340 Section 504....................... 26 5
2340 Section 504 DELTA.................
2340 SBIC debentures................... 5 4
2340 SBIC participating securities..... 22 24 24
2340 New Market Venture Capital........ 5 18
2340 Y2K............................... 1 1
--------- --------- ----------
2349 Total subsidy outlays........... 192 151 178
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 94 129 133
3580 Outlays from balances.............
3590 Outlays from new authority........ 114 129 133
---------------------------------------------------------------------------

[[Page 1086]]

As required by the Federal Credit Reform Act of 1990, as amended,
this account records, for this program, the subsidy costs associated
with the direct loans obligated and loan guarantees committed in 1992
and beyond (including modifications of direct loans or loan guarantees
that resulted from obligations or commitments in any year), as well as
administrative expenses of this program. The subsidy amounts are
estimated on a present value basis; the administrative expenses are
estimated on a cash basis. For 2001, the allocation of funding for
administrative expenses has been adjusted based on a completed cost
allocation study undertaken to allow SBA to more accurately reflect the
portion of SBA's Salaries and Expenses operating budget that supports
these programs.

Section 7(a) Program.--The Section 7(a) program is SBA's largest
credit assistance program to serve the financial needs of small
businesses. Under this program, SBA developed the SBA LowDoc and SBA
Express programs aimed at increasing small business access to credit,
especially in ``new markets''. SBA has experienced record levels of
demand for these loans with approvals increasing $1 billion from 1998 to
1999. A similar increase is expected in 2000. Therefore, we request a
program level of $11.5 billion in 2001 to continue to meet the needs of
small businesses to start and grow their businesses. In addition, to
encourage more small loans and to reduce the cost of loans to small
businesses, we propose a simplification of the current fee and guaranty
structure.

Small Business Investment Companies (SBIC).--This program provides
the debt and equity capital needed by small businesses to start and
grow. The Small Business Investment Act, as amended, authorizes the SBA
to guarantee the timely payment of all principal and interest, as
scheduled, on debentures issued by such companies. In addition, the SBA
may guarantee the performance of participating securities issued by
these companies. A program level of $2.0 billion in participating
securities and $500 million in debentures is requested.

New Markets Venture Capital.--During 2000, SBA will begin to
administer the newly created ``New Markets Venture Capital Program'':
This program would require investment groups to have a minimum of $5
million of investment capital and $1.5 million of technical assistance
funding available over 5 years to participate in the program. For 2001,
a total of $150 million of leverage in face value (approximately $100
million in cash) will be available to fund New Market Venture Capital
organizations. There would also be a significant technical assistance
component, which would be in the form of a grant equal to 30 percent of
the amount of investment capital disbursed over 5 years also on a
matching basis.

Low and Moderate Income (LMI) Initiative.--Using SBA's SBIC
debenture program, SBA will encourage SBIC investments in businesses
located in inner cities and rural areas, or who draw at least 35 percent
of their employees from those areas by refining program regulations for
participating SBICs. The LMI initiative differs from New Market Venture
Capital (NMVC) initiative in the investment criteria and the size of the
loan. Loans made under LMI meet the same criteria as SBIC investments,
but are made to smaller enterprises. Also, NMVC loans are smaller than
LMI.

Microloans.--For 2001, SBA proposes to expand the Microloan direct
program to $60 million from $30 million in 2000. In addition, we are
proposing legislative changes that will provide flexibility in the
lending and technical assistance, which will result in greater access to
capital. The Microloan program will be a key component of Agency's
pursuit of its new markets initiative. At present, small business
capital needs of less than $25,000 are met through SBA's microloan
direct and guarantee programs. We propose to raise that limit to $35,000
in 2001. SBA loans money to financial intermediaries which in turn make
loans to these businesses to start and grow. A key component of this
program is SBA's provision of technical assistance grants to
microlending intermediaries, enabling firms to obtain the necessary
managerial and business development assistance in order to be
successful.

Program Performance

Program performance and policy goals.--SBA has the following program
performance and policy objectives to support its first GPRA goal of
increasing small business opportunities to succeed: (1) emphasizing
lending to ``new markets'' small businesses; (2) offering specialized
financing, such as venture capital, export financing, and bonding
opportunities; (3) improving methods of providing credit assistance
through an expanded range of lending partners, electronic transmission
of data, and high volume lending technologies; (4) reducing costs by
maintaining a high quality portfolio through innovative oversight
procedures and an improved liquidation process; and, (5) effectively
implementing a loan asset sales program.

Performance Indicators.--Appropriate finance program effectiveness
assessment involves the consideration of a number of indicators. First,
effectiveness can be assessed by loan-making activity levels, the number
and dollar amount of loans guaranteed by SBA. Second, effectiveness can
be measured by the health of the loan portfolio, its currency and
default figures, and the agency's ultimate record on loan recovery.
Beyond these very tangible indicators of success are the more difficult-
to-measure indicators. These include such things as the economic
benefits that accrue to the small business, its employees, and the
community in which it is located.

During the past three years SBA has focused on quantitative,
measureable lending goals with particular emphasis on underserved
segments of the small business market in each of SBA's districts, e.g.,
minorities, women, and small exporters. The SBA began this process in
1994 when it established internal performance agreements that contained
two-year lending goals. Using goal monitoring, the agency is able to
track, on a regular basis, the status of each district office's progress
in meeting these goals.

The number and dollar volume of loans made under the Section 7(a)
loan program has increased dramatically in recent years. In 1992, SBA
made or guaranteed approximately 24,000 loans totaling about $5.9
billion. In 1999, the SBA approved over 43,000 loans totaling $10.1
billion. For 2001, we are requesting $142.6 million in budget authority
to support a program level of $11.5 billion. The section 504 program has
also shown impressive growth. In 1992, the SBA provided about 2,000
financings totaling nearly $560 million. By 1999, those figures had
increased to 4,700 financing for $1.8 billion.

Section 7(a).--The performance of the 7(a) loan program continues to
improve. However, the Treasury discount rate increased this year causing
a slight increase in the loan subsidy rate to 1.24 percent.

Section 504.--The performance of this program continues to improve.
As a result, the fee to borrowers will again be reduced in 2001 from the
2000 level of .60 percent to .472 percent.

Loan asset sales.--SBA conducted its first asset sale during August,
1999, which was highly successful bringing $95 million in additional
revenues to the government above what would have been realized if SBA
was to hold the loans and service them. The sale included direct and
purchased 7(a) and 504 loans. It was especially important to SBA to
establish a foothold in the financial market from which to conduct
future asset sales of the remaining $9 billion loan portfolio. Future
sales will include disaster home and business loans. Two sales are
planned for 2000. SBA is requesting authoriza

[[Page 1087]]

tion to take advantage of ``gainsharing`'' provisions extended to
federal agencies. These sales also greatly impact SBA in its workforce
transition efforts. The Business Loan program's administrative expenses
includes $1.525 million to cover the cost of the program financial
advisor for the asset sales program.

Microloan Program.--The performance of the microloan program
continues to improve. However, the Treasury discount rate increased this
year, causing a slight increase in the loan subsidy rate to 8.95
percent.

Small Business Investment Companies (SBICs).--For the participating
securities program, the subsidy rate will be lowered to 1.31 percent
from 1.8 percent in 2000. For the debentures program, the subsidy rate
will be 0.78 percent due to technical adjustments.

As the engine for continued economic growth, small business success
remains a primary policy concern of the Clinton Administration. Small
firms represent a significant portion of the Nation's productive
capacity, produce constant innovations, offer opportunities for the
under-served, and create jobs. Although it is difficult to attribute a
causal relationship between SBA assistance and economic growth, factors
that may contribute to continued economic growth include: increased
numbers and growth of small businesses, increased jobs, increased
revenues, and taxes paid.

SBA measures job creation and increased sales from Census/SBA
longitudinal databases, client or trade association reporting,
contracted surveys/evaluations, and derivative statistics. Using an
updated Census/SBA database on firms, SBA will be able to measure more
effectively job creation and growth by firm size. For instance, between
1990 and 1995, this database indicated that 76.5 percent of new jobs
came from small firms with less than 500 employees, and about 49 percent
came from firms with less than 20 employees. Startups provided about a
third of the new jobs.

For the 503/504 program, the calculation for jobs created/retained
every year is based on the dollar amount of debentures sold and job
data. A ratio of one job per $12,855 debenture sold has been calculated.
For the SBIC program, surveys conducted by the National Venture Capital
Association and the Investment Advisory Council estimate that each
$32,500 invested results in one job. For the microloan program, a
database maintained on jobs created/maintained by microloan recipients
reflects that the overall performance since the inception of the program
is 1.6 jobs created or retained per average $10,000 loan.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1154-0-1-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
25.2 Other services.................... 114 129 133
41.0 Grants, subsidies, and
contributions................... 253 154 199
--------- --------- ----------
99.9 Total new obligations........... 367 283 332
---------------------------------------------------------------------------

Business Direct Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loans...................... 15 30 60
00.02 Interest on Treasury borrowing.... 26 24 14
Other expenses:

00.03 Other expenses.................. 30
--------- --------- ----------
00.91 Direct Program by Activities--
Subtotal (1 level)............ 71 54 74
08.01 Negative subsidy from loan asset
sales........................... 1
08.02 Payment of downward reestimate to
receipt account................. 2
08.06 Payment to liquidating account to
purchase loan assets(73-4154)... 15
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 2 15 1
--------- --------- ----------
10.00 Total new obligations........... 73 69 75
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 271 311
22.00 New financing authority (gross)... 127 93 116
22.10 Resources available from
recoveries of prior year
obligations..................... 1
22.40 Capital transfer to general fund.. -297 -5
22.60 Portion applied to repay debt..... -15 -36 -36
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 384 71 75
23.95 Total new obligations............. -73 -69 -75
24.40 Unobligated balance available, end
of year......................... 311
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 37 54
Spending authority from offsetting
collections:

Discretionary:
68.00 Offsetting collections (cash). 73 79 61
68.10 Change in receivables from
program account............. 17 14 1
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total discretionary)..... 90 93 62
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 127 93 116
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

72.40 Obligated balance, start of year 38 26 28
72.95 Receivables from program account 2 19 33
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 40 45 61
73.10 Total new obligations............. 73 69 75
73.20 Total financing disbursements
(gross)......................... -68 -55 -75
73.45 Adjustments in unexpired accounts. -1
Unpaid obligations, end of year:

74.40 Obligated balance, end of year.. 26 28 27
74.95 Receivables from program account 19 33 34
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 45 61 61
87.00 Total financing disbursements
(gross)......................... 68 55 75
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
88.00 Federal sources: Payments from
program account............. -1 -2 -3
Non-Federal sources:
88.40 Repayments of principal, net -15 -10 -19
88.40 Interest received on loans.. -18 -16 -22
88.40 Gross proceeds from loan
asset sales............... -34 -51
88.40 Other income................ -5 -17
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -73 -79 -61
Against gross budget authority only:

88.95 Change in receivables from
program accounts.............. -17 -14 -1
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 37 54
90.00 Financing disbursements........... -5 -24 14
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4148-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 15 30 60
--------- --------- ----------
1150 Total direct loan obligations... 15 30 60
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 99 93 109
1231 Disbursements: Direct loan
disbursements................... 15 30 60
1251 Repayments: Repayments and
prepayments..................... -16 -8 -8
1263 Write-offs for default: Direct
loans........................... -5 -6 -7
--------- --------- ----------
1290 Outstanding, end of year........ 93 109 154
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this non-budgetary account records all cash flows

[[Page 1088]]

to and from the Government resulting from direct loans obligated in 1992
and beyond (including modifications of direct loans that resulted from
obligations in any year). The amounts in this account are a means of
financing and are not included in the budget totals.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4148-0-3-376 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:

1106 Federal assets: Receivables, net 328 355 362 367
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 99 83 81 84
1405 Allowance for subsidy cost (-).. -6 -46 -56 -56
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 93 37 25 27
1504 Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:
Foreclosed property............. 9
------------ -------------- ------------ -------------
1999 Total assets.................... 421 401 387 395
LIABILITIES:
Federal liabilities:

2101 Accounts payable................ 24 26 28
2104 Resources payable to Treasury... 421 377 361 367
------------ -------------- ------------ -------------
2999 Total liabilities............... 421 401 387 395
NET POSITION:
3100 Appropriated capital..............
------------ -------------- ------------ -------------
3999 Total net position..............
------------ -------------- ------------ -------------
4999 Total liabilities and net position 421 401 387 395
-----------------------------------------------------------------------------------------------

Business Guaranteed Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Default claims.................... 501 511 532
00.05 Other Expenses.................... 37 13 40
--------- --------- ----------
00.91 Direct Program by Activities--
Subtotal (1 level)............ 538 524 572
08.02 Payment of downward reestimate to
receipt account................. 310 239
08.04 Payment of interest on downward
reestimate to receipt account... 515 47
08.06 Payment to liqudating account to
purchase loan assets(73-4154)... 220 150
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 825 506 150
--------- --------- ----------
10.00 Total new obligations........... 1,363 1,030 722
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 1,367 815 663
22.00 New financing authority (gross)... 811 878 645
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 2,178 1,693 1,308
23.95 Total new obligations............. -1,363 -1,030 -722
24.40 Unobligated balance available, end
of year......................... 815 663 586
----------------------------------------------------------------------------

New financing authority (gross), detail:
Discretionary:

68.00 Spending authority from
offsetting collections
(gross): Offsetting
collections (cash)............ 811 878 645
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year -157 7 437
73.10 Total new obligations............. 1,363 1,030 722
73.20 Total financing disbursements
(gross)......................... -1,198 -600 -575
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 7 437 584
87.00 Total financing disbursements
(gross)......................... 1,198 600 575
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Federal sources:
88.00 Payments from program
account................... -192 -151 -179
88.00 Upward restimate............ -28 -3
88.00 Interest on reestimate...... -7 -2
88.25 Interest on uninvested funds.. -22 -65 -45
Non-Federal sources:
88.40 Fees........................ -105 -154 -92
88.40 Proceeds from loan asset
sales..................... -34 -439 -300
88.40 other....................... -423 -64 -29
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -811 -878 -645
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority...............
90.00 Financing disbursements........... 387 -278 -70
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4149-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders......... 13,500 16,500 18,213
2112 Uncommitted loan guarantee
limitation...................... -2,050 -247
2131 Guaranteed loan commitments exempt
from limitation................. 1,202 1,507 1,571
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 12,652 17,760 19,784
----------------------------------------------------------------------------

Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 33,695 36,767 40,917
2231 Disbursements of new guaranteed
loans........................... 10,785 7,534 7,738
2251 Repayments and prepayments........ -7,036 -2,741 -2,821
Adjustments:

2261 Terminations for default that
result in loans receivable.... -630 -643 -656
2264 Other adjustments, net.......... -47
--------- --------- ----------
2290 Outstanding, end of year........ 36,767 40,917 45,178
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 29,266 33,058 36,495
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 834 753 738
2331 Disbursements for guaranteed
loan claims................... 630 643 656
2351 Repayments of loans receivable.. -137 -82 -50
2361 Write-offs of loans receivable.. -285 -164 -65
2364 Other adjustments, net.......... -289 -412 -300
--------- --------- ----------
2390 Outstanding, end of year...... 753 738 979
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this non-budgetary account records all cash flows to and from the
Government resulting from loan guarantees committed in 1992 and beyond
(including modifications of loan guarantees that resulted from
commitments in any year). The amounts in this account are a means of
financing and are not included in the budget totals.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4149-0-3-376 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:

1101 Fund balances with Treasury..... 1,209 822 838 855
Investments in US securities:
1106 Receivables, net.............. 221 66 176 176
Net value of assets related to
post-1991 acquired defaulted
guaranteed loans receivable:

1501 Defaulted guaranteed loans
receivable, gross............. 834 753 738 979
1502 Interest receivable............. 38 17 37 41
1505 Allowance for subsidy cost (-).. -215 -78 -78
------------ -------------- ------------ -------------

[[Page 1089]]

1599 Net present value of assets
related to defaulted
guaranteed loans............ 657 770 697 942
1901 Other Federal assets: Other assets 245 128 238 238
------------ -------------- ------------ -------------
1999 Total assets.................... 2,332 1,786 1,949 2,211
LIABILITIES:
2204 Non-Federal liabilities:
Liabilities for loan guarantees. 2,332 1,786 1,949 2,211
------------ -------------- ------------ -------------
2999 Total liabilities............... 2,332 1,786 1,949 2,211
NET POSITION:
3100 Appropriated capital..............
------------ -------------- ------------ -------------
3999 Total net position..............
------------ -------------- ------------ -------------
4999 Total liabilities and net position 2,332 1,786 1,949 2,211
-----------------------------------------------------------------------------------------------

Business Loan Fund Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Interest Expense to Treasury...... 51 30 10
00.03 Msc. program expenses............. -35 115 77
00.05 Guaranteed loan default claims.... 10 40 41
--------- --------- ----------
10.00 Total new obligations........... 26 185 128
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 273 240
22.00 New budget authority (gross)...... 313 421 419
22.21 Unobligated balance transferred to
other accounts.................. -7
22.40 Capital transfer to general fund.. -273 -446 -262
22.60 Portion applied to repay debt..... -40 -30 -29
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 266 185 128
23.95 Total new obligations............. -26 -185 -128
24.40 Unobligated balance available, end
of year......................... 240
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

69.00 Offsetting collections (cash)... 313 421 419
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 513 539 577
73.10 Total new obligations............. 26 185 128
73.20 Total outlays (gross)............. -147 -159
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 539 577 546
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 147 159
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Loan repayments:
Non-Federal sources:

88.40 Financing programs-
principal............... -97 -70 -75
88.40 Investment programs-
principal............... -16 -10 -10
88.40 Interest Income-Business.. -73 -30 -50
88.40 Interest income-Investment -10 -8 -5
88.40 Net changes in Receivables
from the Public Business 42 -5 -25
88.40 Net changes in Receivables
from the public-
Investment.............. 16 10 -7
88.40 Sale of acquired
collateral-business..... -17 -15 -16
88.40 Principal collections on
judgements, notes,and
other receivables-
Business................ -48 -10 -10
88.40 Principal collections on
judgements and other
receivables-Investment.. -15 -13 -15
88.40 Recoveries................ 21 -1 -30
88.40 collection on FFB loans... -40 -30 -22
88.40 Other Income-both Business
and Investment.......... -15 -4 -4
88.40 Net asset sale proceeds... -61
88.40 Asset sale proceeds....... -235 -150
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -313 -421 -419
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -313 -274 -260
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4154-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Business Loan Fund, Direct
Loans
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 757 555 451
1232 Disbursements: Purchase of loans
assets from the public.......... 34 32 22
1251 Repayments: Repayments and
prepayments..................... -129 -22 -6
1262 Adjustments: Discount on loan
asset sales to the public or
discounted...................... -86 -94 -100
1263 Write-offs for default: Direct
loans........................... -21 -20 -3
--------- --------- ----------
1290 Outstanding, end of year........ 555 451 364
----------------------------------------------------------------------------

Small Business Investment
Company, Direct Loans
Section 503 Development
Company, Direct Loans
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 233 193 170
Repayments:

1251 Repayments and prepayments...... -22 -13 -11
1252 Proceeds from loan asset sales
to the public or discounted... -18 -10 -9
--------- --------- ----------
1290 Outstanding, end of year........ 193 170 150
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

2261 Terminations for default that
result in loans receivable.... -69 -41 -28
2264 Other adjustments, net.......... -7 -7 -6
--------- --------- ----------
2290 Outstanding, end of year........ 2,652 2,073 1,641
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 2,321 1,956 1,630
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 1,466 1,378 1,210
2331 Disbursements for guaranteed
loan claims................... 69 41 28
2361 Write-offs of loans receivable.. -35 -9 -6
2364 Other adjustments, net.......... -122 -200 -300
--------- --------- ----------
2390 Outstanding, end of year...... 1,378 1,210 932
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this account records, for this program, all cash flows to and from the
Government resulting from direct loans obligated and loan guarantees
committed prior to 1992. This account is shown on a cash basis. All new
activity in this program in 1992 and beyond (including modifications of
direct loans or loan guarantees that resulted from obligations or
commitments in any year) is recorded in corresponding program and
financing accounts.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4154-0-3-376 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 102 151 107 75
0102 Expense........................... -99 -73 -68 -64
------------ -------------- ------------ -------------
0105 Net income or loss (-)............ 3 78 39 11
-----------------------------------------------------------------------------------------------

[[Page 1090]]

Balance Sheet (in millions of dollars)

1101 Fund balances with Treasury..... 787 779 466 466
Investments in US securities:
1104 Agency securities, par........ 283 245 186 186
1107 Advances and prepayments...... 6 6 5 4
Non-Federal assets:

1206 Receivables, net................ 480 214 269 214
1207 Advances and prepayments........ 8 8 7 7
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 990 748 621 514
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -626 -303 -207 -136
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 364 445 414 378
1901 Other Federal assets: Other assets 29 21 19 17
------------ -------------- ------------ -------------
1999 Total assets.................... 1,957 1,718 1,366 1,272
LIABILITIES:
Federal liabilities:

2101 Accounts payable................ 1,325 1,123 930 878
2102 Interest payable................ 69 57 96 96
2103 Debt to the FFB................. 233 193 156 123
Non-Federal liabilities:

2201 Accounts payable................ 14 13 15 15
2204 Liabilities for loan guarantees. 31 18 73 73
2207 Other Liabilities............... 285 313 105 102
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,957 1,717 1,375 1,287
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,957 1,717 1,375 1,287
-----------------------------------------------------------------------------------------------

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4154-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
42.0 Insurance claims and indemnities.. -25 155 118
43.0 Interest and dividends............ 51 30 10
--------- --------- ----------
99.9 Total new obligations........... 26 185 128
---------------------------------------------------------------------------

Disaster Loans Program Account

For the cost of direct loans authorized by section 7(b) of the Small
Business Act, as amended, [$140,400,000] $142,100,000 to remain
available until expended: Provided, That such costs, including the cost
of modifying such loans, shall be as defined in section 502 of the
Congressional Budget Act of 1974, as amended.
In addition, for administrative expenses to carry out the direct
loan program, [$136,000,000] $154,000,000, which may be transferred to
and merged with appropriations for Salaries and Expenses[, of which
$500,000 is for the Office of Inspector General of the Small Business
Administration for audits and reviews of disaster loans and the disaster
loan program and shall be transferred to and merged with appropriations
for the Office of Inspector General: Provided, That any amount in excess
of $20,000,000 to be transferred to and merged with appropriations for
Salaries and Expenses for indirect administrative expenses shall be
treated as a reprogramming of funds under section 605 of this Act and
shall not be available for obligation or expenditure except in
compliance with the procedures set forth in that section]. (Departments
of Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 2000, as enacted by section 1000(a)(1) of the
Consolidated Appropriations Act, 2000 (P.L. 106-113).)

General Fund Credit Receipt Accounts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1152-0-1-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
0101 Disaster loan program, downward
reestimates of subsidies........ 10
---------------------------------------------------------------------------

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loan subsidy............... 170 231 152
00.03 Subsidy for Modification of Direct
Loans...........................
00.05 Upward reestimate of direct loan
subsidy......................... 246
00.06 Interest on reestimates of direct
loan subsidy.................... 91
00.09 Administrative expense............ 146 136 154
--------- --------- ----------
10.00 Total new obligations........... 653 367 306
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 81 81
22.00 New budget authority (gross)...... 635 276 296
22.10 Resources available from
recoveries of prior year
obligations..................... 19 10 10
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 735 367 306
23.95 Total new obligations............. -653 -367 -306
24.40 Unobligated balance available, end
of year......................... 81
----------------------------------------------------------------------------

New budget authority (gross), detail:
Discretionary:

40.00 Appropriation................... 293 276 296
42.00 Transferred from USDA........... 5
--------- --------- ----------
43.00 Appropriation (total
discretionary).............. 298 276 296
Mandatory:

60.05 Appropriation (indefinite)...... 337
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 635 276 296
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 59 41 82
73.10 Total new obligations............. 653 367 306
73.20 Total outlays (gross)............. -653 -316 -310
73.45 Adjustments in unexpired accounts. -19 -10 -10
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 41 82 66
----------------------------------------------------------------------------

Outlays (gross), detail:
86.90 Outlays from new discretionary
authority....................... 202 213 228
86.93 Outlays from discretionary
balances........................ 114 104 82
86.97 Outlays from new mandatory
authority....................... 337
--------- --------- ----------
87.00 Total outlays (gross)........... 653 316 310
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 635 276 296
90.00 Outlays........................... 653 316 310
---------------------------------------------------------------------------

Summary of Budget Authority and Outlays

(in millions of dollars)

1999 actual 2000 est. 2001 est.
Enacted/requested:
Budget Authority.................. 635 276 296
Outlays........................... 653 317 310
Supplemental proposal:
Budget Authority.................. 50
Outlays...........................
------------------------------------
Total:
Budget Authority.................. 635 326 296
Outlays........................... 653 317 310
====================================

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1152-0-1-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Direct loan levels supportable by subsidy
budget authority:
1150 Direct Disaster Loans............. 762 1,041 871
--------- --------- ----------
1159 Total direct loan levels........ 762 1,041 871
Direct loan subsidy (in percent):
1320 Subsidy rate...................... 13.10 22.20 17.46
--------- --------- ----------
1329 Weighted average subsidy rate... 13.10 22.20 17.46
Direct loan subsidy budget authority:
1330 Disaster subsidy budget authority. 100 140 142
--------- --------- ----------
1339 Total subsidy budget authority.. 100 140 142

[[Page 1091]]

Direct loan subsidy outlays:
1340 Disaster subsidy outlays.......... 507 180 156
--------- --------- ----------
1349 Total subsidy outlays........... 507 180 156
----------------------------------------------------------------------------

Administrative expense data:
3510 Budget authority.................. 146 136 154
3580 Outlays from balances.............
3590 Outlays from new authority........ 146 136 154
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this account records, for loans made pursuant to section 7(b) of the
Small Business Act, as amended, the subsidy costs associated with the
direct loans obligated in 1992 and beyond (including modifications of
direct loans or loan guarantees that resulted from obligations or
commitments in any year), as well as administrative expenses of this
program. The subsidy amounts are estimated on a present value basis; the
administrative expenses are estimated on a cash basis.

Disaster loans made pursuant to Section 7(b) of the Small Business
Act are the primary form of Federal assistance for non-farm, private
sector disaster losses. For this reason, the program is the only form of
SBA assistance not limited to small businesses. Through this program,
SBA helps homeowners, renters, businesses of all sizes, and non-profit
organizations pay for the cost of rebuilding. Pursuant to the Small
Business Act, the government subsidizes borrowers who have incurred
uninsured losses or economic injury as the result of a natural disaster.
These loans are also a critical source of economic stimulation in
disaster-ravaged communities, helping to spur employment and stabilize
the local tax base. Eligibility is based on financial criteria. The
disaster loan programs include: physical disaster loans to individuals;
physical disaster loans to businesses of any size; pre-disaster
mitigation loans for small businesses; and economic injury loans to
small businesses without credit available elsewhere (including the
military reservist economic injury loan program).

2001 Budget Authority.--For 2001, SBA requests funding to support
the 5-year average loan volume, excluding the Northridge disaster event,
or $871 million in loans, within the discretionary spending budget caps.

This request also includes funding for the disaster administrative
expenses within the discretionary spending budget caps. The amount
requested for loan subsidy is $142 million. The amount requested for
direct disaster loan making is $90 million, or 10 percent of the program
level. The amount requested for direct disaster loan servicing is $34
million, reflecting the increased cost of salaries and minor
inflationary increases. The transfer to Salaries and Expenses for
indirect expenses supporting this program is estimated at $30 million.

Program Performance

Over the 45-year history of the program, SBA has helped more than
1.4 million disaster victims by providing more than $26.7 billion in
disaster assistance. Over 90 percent has been to borrowers that
otherwise would not have been able to rebuild. During 1999 alone, SBA
approved over 36,000 disaster loans, exceeding $936 million to
homeowners, renters, and businesses.

Program Performance and Policy Goals.--The SBA program performance
and policy goals are to: 1) provide disaster assistance to victims in
the most effective and cost efficient manner; 2) deliver an effective
program that achieves its public policy objectives; 3) provide customer-
focused assistance that satisfactorily accommodates the needs of all
disaster victims; 4) simplify and streamline the loan-making process by
re-engineering forms, procedures and processes; and, 5) effectively
implement the proposed asset sales program.

SBA will coordinate with FEMA and other Federal, state and local
officials as appropriate to ensure that SBA's field presence is
established in the disaster area within 3 days of a disaster for 98
percent of declared events. SBA will recruit, employ and train
sufficient staff to increase the number of disaster loan applications
processed within 21 days of receipt from 65 percent in 1999 to 70
percent in 2001. In cooperation with SBA's regional/district offices,
the Agency will meet with local bankers to emphasize bridge lending to
businesses.

As part of our efforts to enhance the efficiency of disaster
assistance, SBA has developed a standardized loan officer training
curriculum, conducts quality reviews in each Disaster Area Office, began
the process of automating the disaster loan making process, and reviewed
the current processes for required policy, organizational, and
procedural changes. SBA and FEMA will continue efforts to develop a
joint loss inspection process.

Based on efforts to improve commercial and home loan servicing, a
number of goals have been set, subject to the availability of staff. To
ameliorate commercial loan servicing, SBA intends to improve the
currency rate to 96 percent on all SBA serviced loans, increase loan
receipts to 16 percent on all SBA serviced loans, review 100 percent of
all delinquent accounts each week, and reduce turn around times on all
servicing actions to 2 days. For disaster home servicing, SBA intends to
improve the currency rate to 95 percent, reduce the delinquency rate to
2 percent, increase loan receipts to 16.2 percent, and review 100
percent of all delinquent accounts each week. To improve loan
liquidation, SBA will increase the number of cases closed each month to
360 and increase average collections on loans in liquidation by 20
percent.

In addition, as mentioned above under systems modernization, the
disaster program is developing a paperless home loan application and
other delivery improvements that should substantially increase
efficiencies and lower costs over time.

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-1152-0-1-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
25.2 Other services.................... 146 136 154
41.0 Grants, subsidies, and
contributions................... 507 231 152
--------- --------- ----------
99.9 Total new obligations........... 653 367 306
---------------------------------------------------------------------------

Disaster Direct Loan Financing Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct loans...................... 762 630 813
00.02 Interest on Treasury borrowing.... 579 388 388
--------- --------- ----------
00.91 Direct Program by Activities--
Subtotal (1 level)............ 1,341 1,018 1,201
08.02 Payment of downward reestimate to
receipt account................. 10
08.04 Payment of interest on downward
reestimates to receipt account.. 1
08.06 Payment to liquidating account to
purchase loan assets (73 4153).. 226 96
--------- --------- ----------
08.91 Direct Program by Activities--
Subtotal (1 level)............ 11 226 96
--------- --------- ----------
10.00 Total new obligations........... 1,352 1,244 1,297
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 3,956 5,124 4,169
22.00 New financing authority (gross)... 3,182 2,071 2,159
22.60 Portion applied to repay debt..... -662 -1,782 -2,888
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 6,476 5,413 3,440
23.95 Total new obligations............. -1,352 -1,244 -1,297
24.40 Unobligated balance available, end
of year......................... 5,124 4,169 2,143
----------------------------------------------------------------------------

New financing authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 936 811 717

[[Page 1092]]

Spending authority from offsetting
collections:

Discretionary:
68.00 Offsetting collections (cash). 2,244 1,297 1,442
68.10 Change in receivables from
program account............. 2 -37
--------- --------- ----------
68.90 Spending authority from
offsetting collections
(total discretionary)..... 2,246 1,260 1,442
--------- --------- ----------
70.00 Total new financing authority
(gross)....................... 3,182 2,071 2,159
----------------------------------------------------------------------------

Change in unpaid obligations:
Unpaid obligations, start of year:

72.40 Obligated balance, start of year 990 328 20
72.95 Receivables from program account 39 41 4
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 1,029 369 24
73.10 Total new obligations............. 1,352 1,244 1,297
73.20 Total financing disbursements
(gross)......................... -2,012 -1,589 -1,208
Unpaid obligations, end of year:

74.40 Obligated balance, end of year.. 328 20 109
74.95 Receivables from program account 41 4 4
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 369 24 113
87.00 Total financing disbursements
(gross)......................... 2,012 1,589 1,208
----------------------------------------------------------------------------

Offsets:
Against gross financing authority and
financing disbursements:

Offsetting collections (cash)
from:
Federal sources:
88.00 Payments from program
account................... -170 -270 -127
88.00 Payments from program
account--reestimates...... -337
Non-Federal sources:
88.40 Repayments of principal, net -566 -368 -385
88.40 Collection of misc.
receivables............... -962 -9
88.40 Interest received on loans.. -209 -424 -407
88.40 Proceeds from loan sales.... -226 -523
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -2,244 -1,297 -1,442
Against gross budget authority only:

88.95 Change in receivables from
program accounts.............. -2 37
----------------------------------------------------------------------------

Net financing authority and financing
disbursements:
89.00 Financing authority............... 936 811 717
90.00 Financing disbursements........... -232 292 -234
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4150-0-3-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 814 221 951
--------- --------- ----------
1150 Total direct loan obligations... 814 221 951
----------------------------------------------------------------------------

Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 5,605 5,658 5,827
Disbursements:

1231 Direct loan disbursements....... 755 510 902
1233 Purchase of loans assets from a
liquidating account........... 140 290
Repayments:

1251 Repayments and prepayments...... -566 -368 -385
1252 Proceeds from loan asset sales
to the public or discounted... -424
1262 Adjustments: Discount on loan
asset sales to the public or
discounted...................... -1,644
1264 Write-offs for default: Other
adjustments, net................ -136 -113 -114
--------- --------- ----------
1290 Outstanding, end of year........ 5,658 5,827 4,452
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this non-budgetary account records all cash flows to and from the
Government resulting from direct loans obligated in 1992 and beyond
(including modifications of direct loans that resulted from obligations
in any year). The amounts in this account are a means of financing and
are not included in the budget totals.

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4150-0-3-453 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:

Investments in US securities:
Receivables, net:
1106 Program account............. 39 41 4 4
1106 Interest/Accounts
Receivables............... 5,247 5,761 5,953 5,550
Net value of assets related to
post-1991 direct loans
receivable:

1401 Direct loans receivable, gross.. 5,605 5,658 5,687 3,756
1405 Allowance for subsidy cost (-).. -973 -1,439 -1,254 -1,254
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 4,632 4,219 4,433 2,502
------------ -------------- ------------ -------------
1999 Total assets.................... 9,918 10,021 10,390 8,056
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 9,918 10,021 10,390 8,056
------------ -------------- ------------ -------------
2999 Total liabilities............... 9,918 10,021 10,390 8,056
NET POSITION:
3100 Appropriated capital..............
------------ -------------- ------------ -------------
3999 Total net position..............
------------ -------------- ------------ -------------
4999 Total liabilities and net position 9,918 10,021 10,390 8,056
-----------------------------------------------------------------------------------------------

Disaster Loan Fund Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
01.01 Interest expense to Treasury...... 51 51 17
01.03 Other expenses.................... 4 10 10
--------- --------- ----------
10.00 Total new obligations........... 55 61 27
----------------------------------------------------------------------------

Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year................... 196 15
22.00 New budget authority from
offsetting collections (gross).. 70 130 29
22.40 Capital transfer to general fund.. -196 -84 -2
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 70 61 27
23.95 Total new obligations............. -55 -61 -27
24.40 Unobligated balance available, end
of year......................... 15
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

69.00 Offsetting collections (cash)... 229 296 103
69.47 Portion applied to repay debt... -159 -166 -74
--------- --------- ----------
69.90 Spending authority from
offsetting collections
(total mandatory)........... 70 130 29
----------------------------------------------------------------------------

Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance, start of year 60 52 52
73.10 Total new obligations............. 55 61 27
73.20 Total outlays (gross)............. -63 -61 -27
74.40 Unpaid obligations, end of year:
Obligated balance, end of year.. 52 52 52
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 59 61 27
86.98 Outlays from mandatory balances... 4
--------- --------- ----------
87.00 Total outlays (gross)........... 63 61 27
----------------------------------------------------------------------------

Offsets:
Against gross budget authority and outlays:

Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Asset Sale Proceeds (73-
4150)..................... -226 -96

[[Page 1093]]

88.40 Loan repayments............. -166 -50 -5
88.40 Interest income............. -52 -10 -1
88.40 Other income................ -11 -10 -1
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -229 -296 -103
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. -159 -166 -74
90.00 Outlays........................... -165 -235 -76
---------------------------------------------------------------------------

Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4153-0-3-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 1,254 1,067 487
Repayments:

1251 Repayments and prepayments...... -166 -50 -5
1252 Proceeds from loan asset sales
to the public or discounted... -104 -96
1262 Adjustments: Discount on loan
asset sales to the public or
discounted...................... -416 -386
1263 Write-offs for default: Direct
loans........................... -21 -10
--------- --------- ----------
1290 Outstanding, end of year........ 1,067 487
---------------------------------------------------------------------------

As required by the Federal Credit Reform Act of 1990, as amended,
this account records, for this program, all cash flows to and from the
Government resulting from direct loans obligated prior to 1992. This
account is shown on a cash basis. All new activity in this program in
1992 and beyond (including modifications of direct loans or loan
guarantees that resulted from obligations or commitments in any year) is
recorded in corresponding program and financing accounts.

Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4153-0-3-453 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 64 52 42 5
0102 Expense........................... -93 -53 -43 -16
------------ -------------- ------------ -------------
0105 Net income or loss (-)............ -29 -1 -1 -11
-----------------------------------------------------------------------------------------------

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4153-0-3-453 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 256 226 200 133
1206 Non-Federal assets: Receivables,
net............................. 64 59 51 5
Net value of assets related to
pre-1992 direct loans
receivable and acquired
defaulted guaranteed loans
receivable:

1601 Direct loans, gross............. 1,254 1,067 487
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -114 -46 -30
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 1,140 1,021 457
Other Federal assets:

1801 Cash and other monetary assets..
1803 Property, plant and equipment,
net........................... 1
------------ -------------- ------------ -------------
1999 Total assets.................... 1,461 1,306 708 138
LIABILITIES:
2102 Federal liabilities: Interest
payable......................... 59 52 31 20
2201 Non-Federal liabilities: Accounts
payable......................... 1,402 1,254 990 586
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,461 1,306 1,021 606
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,461 1,306 1,021 606
-----------------------------------------------------------------------------------------------

Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4153-0-3-453 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
25.2 Other services.................... 4 10 10
43.0 Interest and dividends............ 51 51 17
--------- --------- ----------
99.9 Total new obligations........... 55 61 27
---------------------------------------------------------------------------

Pollution Control Equipment Fund Liquidating Account

Program and Financing (in millions of dollars)

Obligations by program activity:
00.01 Direct program.................... 3 3 1
--------- --------- ----------
10.00 Total new obligations........... 3 3 1
----------------------------------------------------------------------------

Budgetary resources available for obligation:
Unobligated balance available, start of year:

21.40 Unobligated balance available,
start of year................. 12 9 8
21.40 Unobligated balance available,
start of year................. 2 -9 -8
--------- --------- ----------
21.99 Total unobligated balance, start
of year....................... 14
22.00 New budget authority (gross)...... 4 3 1
22.40 Capital transfer to general fund.. -14 -2
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 4 1 1
23.95 Total new obligations............. -3 -3 -1
Unobligated balance available, end of year:

24.40 Unobligated balance available,
end of year................... 9 8 8
24.40 Unobligated balance available,
end of year................... -9 -8 -8
--------- --------- ----------
24.99 Total unobligated balance, end
of year.......................
----------------------------------------------------------------------------

New budget authority (gross), detail:
Mandatory:

67.15 Authority to borrow (indefinite) 4 3 1
----------------------------------------------------------------------------

Change in unpaid obligations:
73.10 Total new obligations............. 3 3 1
73.20 Total outlays (gross)............. -3 -3 -1
----------------------------------------------------------------------------

Outlays (gross), detail:
86.97 Outlays from new mandatory
authority....................... 2 3 1
86.98 Outlays from mandatory balances... 1
--------- --------- ----------
87.00 Total outlays (gross)........... 3 3 1
----------------------------------------------------------------------------

Net budget authority and outlays:
89.00 Budget authority.................. 4 3 1
90.00 Outlays........................... 2 3 1
---------------------------------------------------------------------------

Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 73-4147-0-3-376 1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 57 46 35
Adjustments:

2261 Terminations for default that
result in loans receivable....
2263 Terminations for default that
result in claim payments...... -11 -11 -11
--------- --------- ----------
2290 Outstanding, end of year........ 46 35 24
----------------------------------------------------------------------------

Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 46 35 24
----------------------------------------------------------------------------

Addendum:
Cumulative balance of defaulted guaranteed
loans that result in loans receivable:

2310 Outstanding, start of year...... 45 47 46
2331 Disbursements for guaranteed
loan claims................... 3
2351 Repayments of loans receivable.. -1 -1 -1
--------- --------- ----------
2390 Outstanding, end of year...... 47 46 45
---------------------------------------------------------------------------

Public Law 94-305 established this fund to alleviate the adverse
impact of pollution regulations on small businesses. As a result of the
elimination of tax exempt financing associated with the Pollution
Control Guaranteed program, no new activity is anticipated for this
program.

During 1992, the Small Business Administration started the process
of redeeming a large number of outstanding bonds on which it has taken
over loan payments. Most of these targeted bonds are ten years old and
voluntary redemption is now viable under the bond documents. Redemption
of these

[[Page 1094]]

obligations would preclude the SBA from paying excessive interest over
the next ten years.

Statement of Operations (in millions of dollars)

Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code 73-4147-0-3-376 1998 actual 1999 actual 2000 est. 2001 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 14 2 11 11
1206 Non-Federal assets: Receivables,
net............................. 9 9 9 9
1701 Net value of assets related to
pre-1992 direct loans receivable
and acquired defaulted
guaranteed loans receivable:
Defaulted guaranteed loans,
gross........................... 6 8 6 6
------------ -------------- ------------ -------------
1999 Total assets.................... 29 19 26 26
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 22 -29 21 21
2201 Non-Federal liabilities: Accounts
payable.........................
------------ -------------- ------------ -------------
2999 Total liabilities............... 22 -29 21 21
NET POSITION:
3100 Appropriated capital..............
3300 Cumulative results of operations.. 7 48 5 5
------------ -------------- ------------ -------------
3999 Total net position.............. 7 48 5 5
------------ -------------- ------------ -------------
4999 Total liabilities and net position 29 19 26 26
-----------------------------------------------------------------------------------------------

Administrative Provision--Small Business Administration

Not to exceed 5 percent of any appropriation made available for the
current fiscal year for the Small Business Administration in this Act
may be transferred between such appropriations, but no such
appropriation shall be increased by more than 10 percent by any such
transfers: Provided, That any transfer pursuant to this paragraph shall
be treated as a reprogramming of funds under section 605 of this Act and
shall not be available for obligation or expenditure except in
compliance with the procedures set forth in that section. (Departments
of Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 2000, as enacted by section 1000(a)(1) of the
Consolidated Appropriations Act, 2000 (P.L. 106-113).)

General Fund Receipt Accounts

(in millions of dollars)

----------------------------------------------------------------------------
1999 actual 2000 est. 2001 est.
----------------------------------------------------------------------------
Offsetting receipts from the public:
73-272130 Disaster loan program,
downward reestimates of subsidies... 10
73-272230 Business loan program,
Downward resstimates of subsidies... 695 301
--------- --------- ----------
General Fund Offsetting receipts from
the public............................. 705 301
---------------------------------------------------------------------------