[Congressional Record (Bound Edition), Volume 149 (2003), Part 21]
[Senate]
[Pages 29689-29691]
[From the U.S. Government Publishing Office, www.gpo.gov]




 TEMPORARY EXTENSIONS OF THE PROGRAMS UNDER THE SMALL BUSINESS ACT AND 
               THE SMALL BUSINESS INVESTMENT ACT OF 1958

  Mr. FRIST. Mr. President, I ask unanimous consent that the Senate now 
proceed to the consideration of S. 1895, introduced earlier today by 
Senator Snowe.
  The PRESIDING OFFICER. The clerk will state the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 1895) a bill to temporarily extend the programs 
     under the Small Business Act and the Small Business 
     Investment Act of 1958 through March 15, 2004, and for other 
     purposes.

  There being no objection, the Senate proceeded to consider the bill.
  Ms. SNOWE. Mr. President, I rise today to support passage of the 
Small Business Administration Continuation Act of 2003. This bill 
provides a short-term extension of the Small Business Administration 
and all of its programs. In particular, it ensures the continuation of 
the SBA's 504 loan program, Small Business Investment Company program, 
and other activities currently conducted by the SBA, which must be 
extended before Congress adjourns this year. I am pleased to be joined 
by Senator Kerry, the ranking member of the Committee on Small Business 
and Entrepreneurship, in supporting this bill.
  On September 26, 2003, the Senate unanimously approved the Small 
Business Administration 50th Anniversary Reauthorization Act of 2003, 
S. 1375, which I introduced as the chair of the Committee on Small 
Business. That bill provides for the 3-year reauthorization of the SBA 
and its small business programs, including the 504 loan program and the 
SBIC program.

[[Page 29690]]

  The reauthorization bill will continue the SBA's role in assisting 
American small business to thrive and grow, through the agency's 
lending, entrepreneurial development, and government contracting 
programs and services. Most importantly, it will enable the agency to 
help small businesses continue creating new jobs for our economy. 
According to the SBA, for the years covered by the reauthorization 
bill, an estimated 3.34 million jobs will be created or retained as a 
result of the reauthorization programs.
  While the Small Business Administration 50th Anniversary 
Reauthorization Act provides for the continuation of these programs, 
the other body has been delayed in its consideration of legislation to 
reauthorize the agency. The SBA's programs that rely on appropriations 
will be continued once the Commerce, Justice, State and the Judiciary 
appropriations legislation for Fiscal Year 2004 is enacted. However, 
several of the SBA's programs and activities, like the 504 loan and 
SBIC programs, do not rely on appropriations. As a result, they are in 
jeopardy of shutting down without the bill before us today, and that's 
a result America's small businesses simply cannot afford.
  I am confident that we can enact legislation to reauthorize the SBA 
once the other body has completed work on its version of the bill. In 
the interim, we must ensure that the SBA can continue to offer the 
entire range of its programs to our nation's small businesses, which 
are the driving force behind our current economic recovery. With small 
businesses comprising 99.7 percent of all businesses in the United 
States, employing 57 percent of the total private-sector workforce, and 
accounting for approximately 40 percent of the Gross Domestic Product, 
they deserve nothing less!
  The 504 loan program, one of the agency's flagship lending programs, 
allows small businesses to obtain long-term, fixed-rate financing to 
purchase land, buildings, or equipment. In the past four fiscal years, 
the SBA has provided guarantees for more than 20,000 loans through the 
504 Loan Program, for a total of approximately $8.6 billion, and these 
loans have allowed small businesses to create or retain more than 
445,000 jobs.
  The SBIC Program utilizes private venture capital, with matching 
Federal funds, to provide financing to small businesses, many of which 
have found it difficult to obtain financing from traditional venture 
capital firms, both because of the businesses' small size and because 
of difficult economic trends. Since the start of Fiscal Year 1999, 
small business investment companies supported by the SBA have made more 
than 15,800 investments in small businesses, with a total value of 
$16.9 billion. This critical long-term or ``patient'' capital for small 
businesses has led to the creation and retention of approximately 
481,000 jobs during this period.
  Both of these programs are critical to our efforts to provide 
necessary capital to small businesses so that those businesses can 
provide the jobs and the growth to improve the Nation's economy. In 
addition, both of these programs rely on fees charged to the program 
participants, rather than on Federal appropriations, to fund their 
operation. Because neither program requires any Federal funds, the SBA 
needs legislative authorization to collect the fees that operate the 
programs and ensure that they function at a zero subsidy rate. 
Currently, the authorization for these fees has been temporarily 
extended under the present continuing resolution.
  With the close of the First Session of the 108th Congress rapidly 
approaching, we must act now to ensure that the SBA and its programs 
are continued. The bill before us achieves that goal by extending the 
authorization for the agency and its programs through March 15, 2004. 
That will provide ample time for the other body to pass its 
legislation, for us to reconcile the differences, and for the president 
to sign a long-term reauthorization bill for the SBA.
  This legislation is absolutely necessary for America's small 
businesses. I urge my colleagues to support this bill and thereby 
ensure that the SBA, and in particular the 504 loan and SBIC programs, 
will continue to serve small businesses and enable small businesses to 
obtain the financing they need, as they contribute so greatly to the 
revitalization of our national economy.
  In summary, the Small Business Administration Continuation Act of 
2003 is a straight extension of the authorization for the Small 
Business Administration, SBA, and its programs at their FY 2003 levels 
through March 15, 2003. Currently, the SBA and its programs are 
operating under the provisions of the Continuing Resolution. The bill 
also increases the fee authorization for the Small Business Investment 
Company, SBIC, program so that it can continue operating at a zero 
subsidy rate for 2004. The SBIC fee level was increased in the last 
Continuing Resolution and that increase is merely continued in this 
bill to avoid statutory interpretation problems.
  While the Senate has passed a 3-year reauthorization of the SBA, S. 
1375, the House has not completed work on its reauthorization bill. In 
order to provide time for the House to act and the bills to be 
reconciled, this bill extends the SBA's authorization on a short-term 
basis so the agency can continue providing its critical lending, 
entrepreneurial development, and government contracting programs to the 
Nation's small businesses.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)
 Mr. KERRY. Mr. President, today, as the ranking Democrat of 
the Committee on Small Business and Entrepreneurship, I join the 
committee's chair, Senator Olympia Snowe, in introducing a bill to 
extend for 4 months--through March 15, 2004--the authority to operate 
the Small Business Administration's programs. It is our hope that it 
can be expeditiously considered by the Senate.
  Enacting this bill before Congress adjourns for the holidays is 
critical in order to continue making accessible to small businesses the 
many needed resources, from long-term loans to technical and 
contracting assistance, of the SBA. Among those that would be in 
jeopardy of closing are the agency's loans for growing businesses 
through what's more commonly referred to as the 504 loan program, 
certain established Women's Business Centers, the contracting program 
to assist minority-owned small businesses, the program to provide 
surety bonds to small contractors through so-called ``preferred 
sureties'' and one of the agency's venture capital programs.
  The agency's 504 program is more important than ever to our small 
businesses and the economy. The need could not be clearer, with demand 
for loans up 25 percent in both the number of loans made and the total 
dollar amount in loans made. As the year came to a close, these loans 
pumped more than $3 billion into our local economies through thousands 
of small businesses. Remarkably, making these loans available to small 
businesses costs the taxpayers nothing because the borrowers, lenders 
and certified development companies cover costs of the program through 
fees. While it requires no appropriations to guarantee these loans, 
continuation of the program depends upon the ability of the lenders to 
charge fees, which must be specifically permitted by Congress. This 
program is extremely successful and should absolutely continue. I 
believe I speak for many when I say that the Congress wants the lending 
community to continue devoting resources to 504 loans, keeping this 
affordable financing available to small businesses. We fully intend to 
provide authorization for 3 years when the SBA's comprehensive 
reauthorization bill is enacted in early 2004.
  I feel just as strongly about the importance of continuing the SBA's 
venture capital programs. Specifically, we need to make clear that the 
amount of fees that can be charged to participating securities venture 
capital firms is increased from 1.38 percent to 1.46 percent. Venture 
capital has been very scarce over the past few years, and this program 
has been responsible for more than 50 percent of the number of deals

[[Page 29691]]

made in this country. In spite of the industry's rough times, the 
committee is supportive of the Small Business Investment Company 
programs and wants to see more successes like Staples and Callaway golf 
lead the way in their industries and create jobs.
  Extending the Women's Business Center Sustainability pilot program--
which is made permanent in both the House and Senate SBA 
reauthorization bills--is tremendously important to the 86,000 women 
business owners across the Nation who use the entrepreneurial 
development assistance each year. Without the continuation of the 
agency's authority to operate pilot programs, it is possible that the 
Small Business Administration could misinterpret Congress's strong 
support for this pilot and discontinue funding 55 centers in over 40 
states, closing over half of the most experienced and active women's 
business centers. In 1999, when I authored the Women's Business Center 
Sustainability pilot program, it was my intention to continue the most 
productive and well-equipped women's business centers, knowing that 
demand for such services was rapidly growing. Today, with women-owned 
businesses opening at one-and-a-half times the rate of all privately 
held firms, the need for women's business centers is even greater. 
Until Congress makes permanent the Women's Business Center 
Sustainability Pilot program, as intended in already passed 
legislation, an extension of authority is vital--not only to the 
centers themselves, but to the women's business community and to the 18 
million workers employed by women-owned businesses around the country.
  We also need to ensure the continuation of the agency's contracting 
assistance. One type of assistance in particular is the Small and 
Disadvantaged Businesses, SDB, Certification program. It was created to 
assist small businesses through government contracting, access to 
capital, management and technical assistance, and export assistance. 
The program was originally implemented to help Federal agencies reach a 
5 percent goal of utilization of these essential businesses incurred to 
address discrimination and under-utilization of certain firms in 
Federal contracting.
  The positive implications of this program have grown beyond the 
expectations of even the authors of the original legislation. By 
supporting these socially and economically disadvantaged businesses, 
the Federal Government has helped these entrepreneurs revitalize 
neighborhoods, create jobs, and encourages real, measurable economic 
growth. The program has shown to be a resounding success, however, a 
great deal of work still needs to be done. Moreover, the Federal 
Government has failed to meet the 23 percent government-wide goal for 
small business utilization in Federal procurement. Agencies have 
continually failed to meet the goals for socially and economically 
disadvantaged, women owned businesses, service disabled veteran owned, 
and HUBZone firms, all of which contribute to the overall 23 percent 
goal. Part of the problem faced by small businesses participating in 
these programs and by those attempting to enforce small business 
utilization goals is the perception that these goals are intended to be 
a maximum set-aside for small firms. They are not. They are minimum 
thresholds. The continuation of the SDB program throughout the 
government will help Federal agencies continue to utilize these small 
businesses and continue to foster business development and in much 
needed sectors of the economy.
  I would like to make clear that this bill is not intended to 
interfere with any program, pilot program or authority that has a 
longer authorization, like the Small Business Innovation and Small 
Business Technology Transfer programs. If there are any doubts about 
our intentions, the bill is structured to keep all programs, pilots and 
initiatives operating that could have expired between September 30, 
2003, and March 15, 2003, and to keep them operating as on September 
30.
  I commend our committee, and the leadership of our chair, Senator 
Snowe, for deliberating and passing our comprehensive reauthorization 
bill in July and look forward to working with our colleagues in the 
House to pass a final bill in early 2004.
  Mr. FRIST. Mr. President, I ask unanimous consent that the bill be 
read the third time and passed, the motion to reconsider be laid upon 
the table, and that any statements relating to the measure be printed 
in the Record.
  The bill (S. 1895) was read the third time and passed, as follows:

                                S. 1895

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION OF PROGRAM AUTHORITY.

       (a) In General.--Any program, authority, or provision, 
     including any pilot program, authorized under the Small 
     Business Act (15 U.S.C. 631 et seq.) or the Small Business 
     Investment Act of 1958 (15 U.S.C. 661 et seq.) as of 
     September 30, 2003, that is scheduled to expire on or after 
     September 30, 2003 and before March 15, 2004, shall remain 
     authorized through March 15, 2004, under the same terms and 
     conditions in effect on September 30, 2003.
       (b) Exception.--Notwithstanding subsection (a), section 
     303(g)(2) of the Small Business Investment Act of 1958 (15 
     U.S.C. 683(g)(2)) is amended by striking ``1.38 percent'' and 
     inserting ``1.46 percent''.

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