[Congressional Record Volume 140, Number 143 (Wednesday, October 5, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  THE SMALL BUSINESS ADMINISTRATION REAUTHORIZATION--CONFERENCE REPORT

  Mr. FORD. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of the conference report 
accompanying S. 2060, the Small Business Administration 
reauthorization; that the conference report be agreed to, the motion to 
reconsider be laid on the table, and any statements relating thereto be 
placed in the Record at the appropriate place as if read.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FORD. Mr. President, I submit a report of the committee of 
conference on S. 2060 and ask for its immediate consideration.
  The PRESIDING OFFICER. The report will be stated.
  The legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendments of the House to the bill (S. 
     2060) to amend the Small Business Act and the Small Business 
     Investment Act of 1958, and for other purposes having met, 
     after full and free conference, have agreed to recommend and 
     do recommend to their respective Houses this report, signed 
     by all of the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of October 3, 1994.
  Mr. BUMPERS. Mr. President, S. 2060 is the first SBA reauthorization 
to be considered by Congress since President Clinton took office. It is 
a dramatic departure from the hold-the-line, do-as-little-as-necessary 
policy of the previous two administrations. President Clinton's fiscal 
year 1995 budget and legislation contain significant increases in SBA 
loan programs aimed at economic development and meeting the credit 
needs of small firms in a changing economy. This bill is major economic 
legislation which is badly needed and which can and will help further 
the Nation's recovery.
  This conference report responds to the President's requests to the 
greatest extent possible in a time of fiscal constraints and sends a 
strong economic message. The small business sector has been and will 
remain the major resource of new jobs in the American economy. 
Paradoxically, small businesses face more difficulty than ever in 
obtaining the capital required for business start-ups, expansion, and 
operating capital.
  In business loans, loan guarantees, and bond guarantees, S. 2060 as 
reported by the Small Business Committee authorizes about $16 billion 
in financial assistance to small businesses in 1995, over $18 billion 
in fiscal year 1996, and almost $23 billion in 1997. The role of the 
Small Business Administration is more vital than ever before in 
sustaining and expanding the economic recovery now underway.
  The conference report also contains a bill (S. 737) which was 
introduced by Senator Hatfield, and others, and a similar 
administration-requested bill (S. 2061) which ease prepayment penalties 
imposed on borrowers of high interest-bearing loans under the section 
503 program. The committee has included a substitute for those bills as 
title V of the conference report.
  The conference report authorizes SBA loan programs and certain 
business development programs. Included are section 7(a) loan 
guarantees, section 502 and 504 development company loans, microloans, 
small business investment company [SBIC] debentures, specialized SBIC 
preferred stock and debentures, and SBIC participating securities. Also 
included is a ``such sums as may be necessary'' authorization for SBA 
business and homeowner businesses in communities which have been 
affected by natural disasters.
  Funding for SBA programs with the exception of disaster loans are 
detailed in a table, which I ask be printed at the conclusion of my 
statement.
  This conference report is the product of many months of work by 
Senate and House committee staff and by Members on both sides. I thank 
all those who have participated, and particularly our ranking minority 
member, Senator Pressler, for all their work and support. I urge all 
Senators to support this report and send this bill to the President.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

                                                CONFERENCE AGREEMENT--SBA REAUTHORIZATION FUNDING LEVELS                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Proposed fiscal year                Proposed fiscal year                Proposed fiscal year              
                                                      1995           Conference           1996           Conference           1997           Conference 
                   Program                   ----------------------   agreement  ----------------------   agreement  ----------------------   agreement 
                                               Senate      House                    Senate     House                    Senate     House                
--------------------------------------------------------------------------------------------------------------------------------------------------------
7(A) guarantees (billions)..................      $9        $7.815         $9.15     $10        $10.93        $10.5      $12        $14.2         $13.1 
Defense conversion (7)(A)(21)) (billions)...       2.0       1.5            2          2.5        0             2.5        3.5        0             3   
Microloans direct (millions)................     110       130            120        175        185           180        250        250           250   
Microloan-TA (millions).....................      45         0             45         65          0            65         98          0            98   
Micro guarantee pilot (millions)............      15        20             20         20         30            30         20         40            40   
Handicapped direct loans (millions).........       0        12             10          0         13            11          0         14            12   
504/502 development cos. (billions).........       2.3       2.2            2.25       2.8        2.5           2.65       3.5        3             3.25
SBIC debentures (millions)..................     230       200            200        250        210           210        310        220           220   
SBIC participating (millions)...............     500       400            400        750        650           650          1.25     900           900   
MESBIC stock (SSBIC) (millions).............      33        23             23         39         24            24         45         25            25   
MESBIC guaranty (SSBIC) (millions)..........      55        44             44         70         46            46         75         48            48   
Surety bond (billions)......................       1.8       1.8            1.8        2          1.8           1.9        2.2        1.8           2   
SCORE (millions)............................       3.5       3.5            3.5        3.75       3.67          3.7        4          3.86          3.9 
SBI (millions)..............................       3         3              3          3.25       3.15          3.2        3.5        3.31          3.4 
SBDCs regular (millions)....................      70        70             70         77.5       77.5          77.5       85         85            85   
SBDCs defense conversion (millions).........      25         0              5         25          0            10         25          0            15   
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Mr. PRESSLER. Mr. President, I rise as ranking member of the Small 
Business Committee in strong support of the conference report 
accompanying S. 2060, the Small Business Administration Reauthorization 
and Amendments Act of 1994--legislation to reauthorize the Small 
Business Administration [SBA] and its programs for the next 3 years.
  This conference report is the result of many months of hard work by 
the Small Business Committees of both the Senate and the House. It has 
been a pleasure to work with Senator Bumpers, chairman of the Senate 
committee, and Chairman LaFalce and ranking member Meyers of the House 
Small Business Committee. I also want to commend all the dedicated 
staff, on both sides of the aisle, who worked so hard to get us where 
we are today. This legislation represents a bipartisan effort. It is a 
good bill for this Nation's small business men and women. It not only 
provides authorization levels for SBA's programs for fiscal years 1995 
through 1997, it fine tunes many existing programs and creates a few 
new ones.
  Mr. President, S. 2060 marks the culmination of a series of oversight 
hearings we conducted in our committee over the past 2 years. During 
that process, our committee has explored in considerable detail the 
workings and problems of SBA's increasingly popular 7(a) business loan 
guaranty and section 504 development company programs, the agency's 
often overtaxed Disaster Assistance Loan Program and the still young 
but growing Microloan Demonstration Program. The committee also 
conducted oversight hearings on SBA's business development programs, 
including the Small Business Development Center [SBDC], Service Corps 
of Retired Individuals [SCORE], and Small Business Institutes [SBI] 
programs. We also explored the effectiveness of SBA programs targeted 
toward minority small business owners. Each of these hearings pointed 
out areas in which programs were working very well and areas in need of 
improvement. Of course, many witnesses urged the committee to increase 
funding levels for the particular program they supported.
  I believe the committee responded with an excellent bill. Budget 
constraints prevented us from providing the levels of program 
authorization requested by the administration and witnesses. However, 
the bill takes an extremely responsible approach--expanding programs in 
a prudent manner and putting taxpayer dollars where they will get the 
most bang for the buck. I am proud to say we also have developed some 
very innovative approaches to solving what in some cases were some very 
old and difficult problems. For instance, the conference agreement 
allows borrowers under the SBA 503 program--borrowers who for years 
have been locked into loans with unreasonably high interest rates--the 
chance to refinance these loans. It also will expand and improve the 
Microloan Program so many more of this Nation's smallest and most 
disadvantaged businesses can obtain badly needed credit. Regarding the 
Microloan Program, I am particularly proud of the steps taken by this 
legislation to expand opportunities for what is often one of this 
country's poorest minority populations--American Indians.
  Mr. President, I would now like to take a moment to outline some of 
the more important features of this conference report.


                        title i--authorizations

  Title I of the conference agreement establishes the SBA's 
authorization levels for fiscal years 1995, 1996, and 1997. These 
levels reflect a realistic view of what these programs can probably 
receive in appropriations in the coming years. The conference agreement 
will allow these important programs to continue to serve America's 
small business men and women. In some cases, the agreement even expands 
the levels of service. The funding levels provided will allow SBS's 
highly effective business loan programs to continue stimulating small 
business growth. The section 7(a) business loan guaranty program--SBA's 
flagship assistance program--is expanded substantially. Under this 
program, the agency guarantees business loans made by commercial 
lenders to small businesses in the largest of cities and the smallest 
of towns. Recent years have witnessed an explosion in demand for this 
program. Much of the increased demand is the result of the credit 
crunch faced by many small entrepreneurs. With an SBA guarantee of 70 
to 90 percent of the loan amount, banks and other lenders are willing 
to provide longer term financing than otherwise would be available. 
Lenders also will lend larger amounts at lower interest rates than the 
market and regulatory environment would allow without SBA's 
participation.
  The 504 Development Company loan program also has been strained to 
the limit over the past several years. Under this program, SBA 
guarantees 10- and 20-year debentures issued by a certified development 
company. The proceeds of the debentures are lent with similar terms to 
small firms for plant acquisition, construction, conversion, expansion 
or the purchase of equipment. The SBA portion of the loan may fund not 
more than 40 percent of the project with the balance coming from the 
borrower and commercial sources. This program represents a remarkable 
example of how the Government can leverage taxpayer dollars to 
effectively create business expansion and large numbers of new jobs. 
The subsidy rate for the 504 program currently is set at roughly one-
half of 1 percent. This means for every half cent Congress provides, $1 
is lent to small business.
  Mr. President, the word ``efficient'' seldom seems to attach itself 
appropriately to the phrase ``government program.'' However, in the 504 
program we have one of the most cost-effective economic development 
tools available to any State or local economy. Because of its great 
success, demand for the program has increased dramatically and the 
administration and development company industry sought extremely 
ambitious authorization levels for the program. This legislation 
responds with substantial increases in authorized levels for this 
proven program.
  Title I of the conference agreement also provides authorized levels 
for the Small Business Investment Company [SBIC] debentures, the 
Specialized SBIC preferred stock and debentures and the SBIC 
participating securities programs. The conferees accepted funding 
levels for these programs as provided in the House amendment to S. 
2060. I understand these numbers may be disappointing to some in both 
the small business community and the venture capital industry. However, 
I would provide two caveats. First, the authorized levels for these 
programs are higher than those under current law and reflect the view 
that the SBA's venture capital program--although it has a troubled 
history--has an important role to play in financing small business 
development. However, given the yet untested nature of the SBIC 
participating securities program, the conferees felt the most prudent 
course was not to expand the program too rapidly. For example, the 
administration's request would have almost tripled the funding for SBIC 
participating securities in fiscal year 1997.
  My second caveat is that, quite frankly, the levels contained in this 
report more accurately reflect what the programs actually can expect in 
terms of appropriations. In other words, I was concerned the numbers in 
the administration's request would send an unwarranted signal to 
capital markets regarding actual future funding levels for these 
programs. At the same time, I understand the importance of venture 
capital. I also know the new SBIC participating security program is 
attracting many more well-financed applications than anticipated. 
Therefore, I will support efforts to revisit this issue as more 
information--such as the study required by section 216 of the 
conference agreement--becomes available.
  Title I of the conference report also provides needed increases in 
funding levels for the Microloan, Surety Bond, Service Corps of Retired 
Executives [SCORE], Small Business Institute [SBI] and Small Business 
Development Center [SBDC] programs. Also included in the conference 
agreement is an authorization of appropriations for SBA business and 
homeowner disaster loans. These are direct loans made to individuals 
and businesses in communities damaged by natural disasters.


                title ii--financial assistance programs

  Mr. President, title II of the conference agreement makes changes to 
the financial assistance programs of the SBA. It extends and improves 
the Microloan program, enhances export assistance and international 
trade programs, creates new Accredited Lender and Premier Certified 
Lender programs within the 504 program and enhances the SBIC and 
Specialized SBIC programs.
  The legislation makes important changes to the Microloan 
Demonstration Program. First it extends the program until October 1, 
1997. This is 1 year less than provided for in the Senate version of 
the bill. However, it is consistent with other loan program 
authorizations contained in the agreement. Conferees also agreed to 
expand the program by authorizing SBA to fund up to 200 programs 
beginning in fiscal year 1995. The agreement also developed a new state 
funding formula that should allow both the largest and smallest states 
to receive a more equitable share of Microloan program funding. In 
addition, the conference agreement directs the SBA to select microloan 
intermediaries in a manner that will ensure microloans are available 
both in urban and rural areas. The agreement further provides that the 
agency should strive to make microloans available throughout each State 
and to small businesses in all industries. One problem with the current 
program is that parts of some States are not served. The conference 
agreement seeks to correct that flaw.

  The agreement also appropriately addresses an administration request 
to convert the Microloan Program from a direct to a guaranteed loan 
program. This legislation creates a pilot Microloan Guarantee Program 
directing part of the resources of larger demonstration program into 
the pilot. I agree with this approach. In my view, the SBA failed to 
provide a compelling need to suddenly route all loans to intermediaries 
through private lenders on a guaranteed basis. Given the Microloan 
Program's demonstration status, such a dramatic shift would be unwise 
at this time. The limited pilot guarantee program provides an excellent 
compromise.
  Mr. President, I also am pleased the conferees accepted a modified 
version of an amendment I offered during the Senate committee's 
consideration of S. 2060. Under existing law, each loan made by the SBA 
to a Microloan intermediary is accompanied by a 25-percent grant to be 
used to provide technical assistance to those microenterprises 
borrowing from the intermediary. This grant is subject to a 25-percent 
non-Federal matching requirement. Additional technical assistance grant 
money equal to 5 percent of an intermediary's total outstanding balance 
of loans is available to those intermediaries maintaining a loan 
portfolio average of not more than $7,500. This additional grant is not 
subject to the matching requirement.
  My amendment provided the extra 5 percent technical assistance grant 
to any intermediary making 25 percent of its loans to businesses owned 
by members of federally recognized American Indian tribes. These 
intermediaries would have been treated just as those maintaining an 
average loan portfolio of not more than $7,500. My amendment provided 
additional incentives for intermediaries making 50 percent or more of 
their loans to businesses owned by members of federally recognized 
American Indian tribes. These intermediaries would have received the 
full 30 percent maximum technical assistance grant allowed. However, 
none of the grant was subject to the matching requirement.
  This amendment resulted directly from a field hearing I chaired just 
over 1 year ago on the Pine Ridge Indian Reservation in South Dakota. 
During that hearing--the first ever of the Senate Small Business 
Committee on an Indian reservation--witnesses testified as to the 
extreme scarcity of credit for businesses owned by American Indians. 
Many witnesses also explained how technical guidance and training were 
a critical part of effective small business assistance in their 
communities. Several individuals also provided examples of how small 
businesses developed through microlending programs already in existence 
effectively created jobs and economic opportunities on all too often 
economically depressed American Indian reservations because 
microbusiness development is a concept well suited to the American 
Indian culture.

  During conference deliberations, I was persuaded communities in other 
areas of the country, such as Appalachia and the Delta, also suffer 
from extreme poverty and could benefit from a similar program. 
Therefore, the conferees agreed, in section 208 of the conference 
report, to create a 3-year pilot program identical in structure to my 
amendment, but with more broadly based eligibility. The additional 
technical assistance grants now will be provided to any intermediary 
making the prescribed percentages of loans to small business concerns 
located in or owned by one or more residents of an economically 
distressed area. The agreement defines ``economically distressed area'' 
as a county or equivalent division of local government in the State in 
which the small business concern is located, in which, according to the 
most recent data available from the Census Bureau, 40 percent or more 
of the individuals live at or below the poverty level. Thus, the 
provision will work as I had envisioned, but on an expanded basis and 
will assist other economically distressed communities. Section 208 fits 
extremely well with section 202 of the conference agreement that will 
allow American Indian tribal entities to act as intermediaries under 
the Microloan Program. I fully support this change and believe the two 
sections will work in tandem to provide important resources to American 
Indian entrepreneurs.
  Title II of the conference agreement also makes dramatic changes to 
the 504 program. First, it creates an Accredited Lenders Program [ALP] 
for qualified State and local development companies. This change to the 
program was modeled after the Certified Lender Program within the 7(a) 
program. Under the ALP, certified development companies that meet 
certain criteria will be accredited and will receive expedited 
processing and servicing from the SBA. Both the Senate bill and the 
House amendment contained this provision. The agreement also creates a 
3-year pilot Premier Certified Lenders Program [PCLP], similar to the 
Preferred Lender Program under 7(a). Under PCLP, certified development 
companies that meet even more stringent criteria will receive a 
delegation of authority from SBA to issue guarantees on behalf of the 
administration. In exchange, a premier certified lender will be 
required to reimburse SBA a percentage of any loss sustained by the 
agency due to guarantees issued under the delegated authority. These 
lenders also will be required to create loss reserves to cover their 
contingent exposure. The PCLP concept was part of the House amendment, 
but not contained in the Senate bill. Thus, the conferees agreed to 
create the program on a pilot basis and allow a maximum of 15 
development companies to participate.
  Mr. President, it is my hope these changes to the 504 program will 
help alleviate the excessive backlog of loan applications awaiting 
approval at the SBA. However, as development companies are not 
commercial lenders, their expertise in determining the credit 
worthiness of borrowers may prove inadequate in some cases. Therefore, 
I will be looking closely at the reports required for both programs 
under the conference agreement. I am certain the committees will need 
to revisit these issues in the future.


             title iii--size standards and bond guarantees

  This title of the conference agreement extends the pilot Preferred 
Surety Bond Guarantee Program until September 30, 1995. Conferees felt 
the 1-year extension was warranted to provide the time necessary to 
review the performance of the program in light of matters outlined in 
the Senate report accompanying S. 2060.
  The conferees also agreed to a provision designed to promote access 
to Federal contracting opportunities requiring manufacturing for small 
business concerns participating in Manufacturing Application and 
Education Centers [MAEC's]. The SBA is directed to work with the 
Commerce Department and other Federal agencies to identify contracting 
opportunities for manufactured products, especially subsystems or 
components currently obtained from foreign sources. It is the intent of 
conferees that the SBA will use the authority provided under this 
title, together with its existing programs, to support the adoption and 
deployment of advanced manufacturing technologies and practices by 
small business concerns participating in MAECs.
  Finally, I am pleased this title establishes a pilot program to 
expand the participation of very small business concerns in Federal 
contracting opportunities.


               title iv--business development assistance

  I am very pleased with the changes made in the SBDC funding formula 
contained in title IV of the conference agreement. Conferees agreed to 
increase each State's base level of funding to $125,000 in fiscal year 
1995 and to $200,000 thereafter. While conferees also agreed to 
eliminate the minimum level or floor all SBDC programs receive under 
current law, the new formula will guarantee those States currently at 
the floor will see their Federal share increase. This increase is 
absolutely vital to rural, Western States--like my home State of South 
Dakota--that have a large geographic area and thus suffer from 
disproportionately large travel and programming expenses.
  The SCORE and SBI programs also fall under SBA's business development 
assistance program function. The conference agreement authorizes both 
programs for 3 years. These important resources provide grassroots 
counseling to small businesses for an extraordinarily nominal Federal 
expenditure. The SCORE Program teams experienced small business men and 
women and their wealth of experience with fledgling entrepreneurs who 
sometimes have little more than an idea and a great deal of enthusiasm.
  During the Senate Small Business Committee hearing covering the SCORE 
Program, I raised concerns over the manner in which funds for the 
program are apportioned among local chapters. My concerns remain. I am 
not convinced reliable standards exist to guide the national SCORE 
office in its decisionmaking process in this regard. Indeed, I 
considered amending the Senate bill to ensure equitable distribution of 
SCORE funding. However, Chairman Bumpers and I have agreed to pursue 
this concern in an official request for a General Accounting Office 
[GAO] study of the program and its funding formula. It is our intention 
that GAO's findings will be available before next year's appropriation 
cycle begins. I will consider legislative options once the results of 
that study are released.
  SBI's provided an incredible service to America's small business 
community while creating an invaluable learning experience for business 
students in our colleges and universities. This program, together with 
State colleges and universities, provides teams of business students 
and faculty members to work one-on-one with existing businesses. 
Although the administration did not request funding for the SBI 
Program, I am extremely pleased the conferees acted to reauthorize it. 
SBIs are especially important to small businesses with limited access 
to SBDCs. Like SCORE, they provide their services in an extremely cost 
effective manner. Almost as a byproduct, the program provides our next 
generation of entrepreneurs with excellent hands-on experience in the 
working of an actual business.
  Mr. President, title IV of the conference agreement also creates an 
Office of Women's Business Ownership within the SBA. The agreement also 
establishes an Interagency Committee on Women's Business Enterprise 
(Committee) and restructures the National Women's Business Council 
(Council). Committee membership will include high ranking policymaking 
officials from a variety of Federal agencies and offices. The council 
will consist of owners of small businesses and representatives of 
national women's business organizations. The committee and council will 
meet both separately and jointly as they work to fulfill their 
missions.
  The committee is charged with the promotion of women's business 
ownership in the public sector, women-owned businesses' access to 
credit and capital, and assistance with data collection on women-owned 
businesses. It is to make annual reports to Congress outlining its 
activities and recommendations concerning women's business ownership.
  The council is responsible for reviewing, promoting and coordinating 
women-owned businesses' access to credit and capital and their 
development and growth in both the public and private sectors. The 
council also is charged with helping in data collection on women-owned 
businesses. It is intended the council will function as a truly 
independent, objective and nonpartisan source of advice and policy 
recommendations for the committee, Congress, and the President.
  The work of both the committee and the council is vitally important 
if the Federal Government is to address adequately the needs and 
special concerns of this rapidly growing segment of the small business 
community. However, previous efforts in this regard have proven less 
than completely successful. I believe it is critical the Senate and 
House Small Business Committees continue to monitor the progress of the 
committee and the council to ensure their important missions are 
carried out efficiently and effectively. I also very much look forward 
to receiving their views and recommendations.


          title v--relief from debenture prepayment penalties

  Mr. President, one of the most important provisions in the entire 
conference report is title V. This section of the legislation provides 
an excellent resolution to a longstanding and extremely unfair 
situation. It provides needed relief to borrowers under the Certified 
Development Company Section 503 Program, and certain borrowers under 
the SBIC and Specialized SBIC Programs. All of these borrowers are 
suffering from excessively high interest rates and extraordinarily 
burdensome prepayment penalties that prevent them from getting out from 
under. Presently some 3,500 borrowers under the 503 program and 200 
participants in the SBIC and Specialized SBIC Programs are locked into 
SBA-backed loans with interest rates reflecting the Government's cost 
of money 10 or more years ago. Thus, rates on these loans can run 12 to 
15 percent and higher.
  Unfortunately, these borrowers are unable to refinance because of 
extremely onerous prepayment penalties of which many borrowers say they 
were either unaware of or mislead about at the time they took out the 
loan. Another unfortunate reality is the Federal Government simply is 
unable to absorb the cost--by some estimates well over $100 million--of 
totally relieving these borrowers of their obligations. The good news 
is that for fiscal year 1995 we secured an appropriation of $30 million 
to address the problem. It then became the small business committees' 
challenge to develop a formula to distribute the $30 million in as 
equitable a manner as possible. I am convinced the conference agreement 
achieves this objective. Borrowers wishing to refinance still will be 
required to pay a reduced prepayment penalty. However, the agreement at 
least makes refinancing a possibility for many who simply find it 
impossible under current law. Given the realities of the Federal 
budgetary situation, this represents an extremely fair remedy.


                   title vi--miscellaneous amendments

  The final title of the conference agreement makes several 
improvements and technical corrections to a variety of SBA programs. 
Two important changes concern eligibility for SBA financial assistance. 
Under this agreement, individuals known by SBA to be illegal aliens 
will not be eligible for SBA assistance. In addition, anyone wishing to 
borrow from SBA now must certify they are not in substantial violation 
of any court order or agreement requiring the payment of child support. 
Individuals will be subject to the criminal and civil penalties 
contained in both the Small Business Act and the False Statements Act 
for false representations made to the agency in the course of a loan 
application or other application for assistance.
  Mr. President, I also want to touch briefly on a provision not 
contained in the conference report, nor in either the Senate or House 
bills. Why raise something not in the conference agreement? Simply to 
emphasize that both committees rejected the idea and that this Senator 
will continue to fight the proposals should it surface again. I am 
speaking of the administration's proposal to charge a $15 per hour fee 
for SBDC counseling services. As I said in committee and when S.2060 
was before this body, SBDCs provide valuable counseling services to 
established and fledgling entrepreneurs. In some areas of the country, 
the fee may not have been unreasonable. However, I can tell you with 
certainty that in rural States and small cities such a requirement 
would be tantamount to shutting off the service. It simply would close 
the door of opportunity for many potential or new entrepreneurs with 
limited resources. I am extremely pleased the committees and the 
conferees rejected this proposal.

  The last provision I wish to discuss involves another amendment I 
offered during Senate committee consideration of S.2060. This 
amendment, adopted unanimously in committee and retained by the 
conferees, prohibits the SBA from providing assistance to businesses 
engaged in the production and distribution of obscene products and 
services. This provision, section 611 of the conference report, was 
drafted in response to the recent repeal of SBA's opinion molder rule. 
With the repeal of the rule, businesses such as newspapers, movie 
theaters, radio stations and bookstores now are eligible for SBA 
assistance.
  However, this also means businesses involved in the production and 
distribution of obscene products and services also could seek SBA 
support. This section makes clear the SBA is not authorized to provide 
any assistance to those engaged in any class of obscene business as 
defined by the U.S. Supreme Court--and thus not entitled to first 
amendment protection. The section is intended to cover the narrow range 
of adult theme businesses, including adult book stores, adult theaters, 
adult film and video producers, and adult film and video distributors. 
It is not meant to apply to businesses such as convenience stores 
carrying adult materials that do not fall within the Supreme Court's 
definition of obscenity.
  Mr. President, this concludes my overview of the conference agreement 
accompanying S.2060. Let me again offer my wholehearted support for 
this legislation. I also want to again thank Chairman Bumpers for his 
excellent leadership and willingness to work together in a bipartisan 
fashion.
  As ranking member of the Senate Small Business Committee over the 
last 2 years, I have been privileged to play a role in an organization 
that has one main goal--to improve the opportunities for new and 
existing small businesses. With over one-fifth of the entire U.S. 
Senate represented on the committee, I have found the going is not 
always easy. Even when you share a common goal, individuals--especially 
U.S. Senators--often have very strong and very different opinions about 
how best to achieve the objective. However, Mr. President, I have 
enjoyed every minute of it. It is now my hope that as we conclude the 
business of the 103d Congress, we will enact this legislation and give 
our country's No. 1 job creating force and source of innovation--small 
business--new opportunities to succeed, expand, create jobs and 
increase the prosperity of our great nation.
  So the conference report was agreed to.

                          ____________________