[Congressional Record (Bound Edition), Volume 155 (2009), Part 17]
[House]
[Pages 22407-22409]
[From the U.S. Government Publishing Office, www.gpo.gov]




                SMALL BUSINESS ADMINISTRATION EXTENSION

  Ms. VELAZQUEZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3614) to provide for an additional temporary extension of 
programs under the Small Business Act and the Small Business Investment 
Act of 1958, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3614

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

     SECTION 1. ADDITIONAL TEMPORARY EXTENSION OF AUTHORIZATION OF 
                   PROGRAMS UNDER THE SMALL BUSINESS ACT AND THE 
                   SMALL BUSINESS INVESTMENT ACT OF 1958.

       (a) In General.--Section 1 of the Act entitled ``An Act to 
     extend temporarily certain authorities of the Small Business 
     Administration'', approved October 10, 2006 (Public Law 109-
     316; 120 Stat. 1742), as most recently amended by section 1 
     of Public Law 111-43 (123 Stat. 1965), is amended by striking 
     ``September 30, 2009'' each place it appears and inserting 
     ``October 31, 2009''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on September 29, 2009.

     SEC. 2. BUSINESS STABILIZATION PROGRAM.

       Section 506(c) of title V of division A of the American 
     Recovery and Reinvestment Act of 2009 (Public Law 111-5) is 
     amended by striking ``but shall not include'' and all that 
     follows through ``enactment of this Act''.

     SEC. 3. NEW MARKETS VENTURE CAPITAL COMPANY INVESTMENT 
                   LIMITATIONS.

       Section 355 of the Small Business Investment Act of 1958 
     (15 U.S.C. 689d) is amended by adding at the end the 
     following:
       ``(e) Investment Limitations.--A New Markets Venture 
     Capital company that is receiving a grant under section 358 
     may not issue debentures guaranteed by the Administrator for 
     any 1 company in an aggregate amount that is more than 10 
     percent of the sum of--
       ``(1) the private capital of the New Markets Venture 
     Capital company; and
       ``(2) the total amount of leverage projected by the New 
     Markets Venture Capital company in the business plan of the 
     New Markets Venture Capital company in effect on the date on 
     which the Administrator granted final approval to operate as 
     a New Markets Venture Capital company under section 
     354(e).''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New York (Ms. Velazquez) and the gentleman from Missouri (Mr. Graves) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from New York.


                             General Leave

  Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume. The legislation before us will keep a number of vital programs 
at the Small Business Administration functioning. This will give us 
time to complete our work with the Senate and fully reauthorize these 
measures, which are critical for our Nation's entrepreneurs.
  All of us recognize the importance of small businesses to our 
recovery. Since January, this Congress has taken several steps to help 
small firms. Entrepreneurs will see $30 billion in new contracting 
opportunities from the Recovery Act.

                              {time}  1045

  The Recovery Act is expected to yield $21 billion in new lending and 
investment for small firms. Since the Recovery Act passed, the SBA has 
approved $7.3 billion in recovery loans and supported almost $10 
billion in small business lending. This extension will not only keep 
important programs at the SBA running; it will also make some important 
changes to improve access to capital for small firms.
  The America's Recovery Capital program in the Recovery Act provides

[[Page 22408]]

short-term capital for businesses. To date, the ARC loan program has 
helped 1,600 firms stay afloat with interest-free loans.
  Currently, ARC loans cannot be used to pay down existing government-
guaranteed debts. By letting businesses use ARC loans for that purpose, 
this bill will open the program to even more firms, regardless of their 
previous financing decisions. This will open up $360 million in lending 
capital to help stressed small businesses that have 7(a) loans. Through 
the ARC program, these firms will receive nearly $6,000 per month, 
allowing them to redirect their cash flow into sustaining their 
operations. The American Bankers Association and the Independent 
Community Bankers of America strongly support this provision.
  As SBA implements this change, it should also revisit other areas 
where it can improve the program. A top priority for small businesses 
is always reducing their paperwork burden.
  Mr. Speaker, this is the paperwork required to apply for an ARC loan, 
and it doesn't even include the documentation that a borrower must 
submit as part of their application. Clearly, applying for these loans 
is complex. The SBA should streamline its application and approval 
processes. Businesses that apply for these loans do so because they 
need a lifeline, now. The SBA should make the process fast and simple.
  Another challenge at the agency is the projected default rates for 
the program, which directly affects the availability of capital. 
Unfortunately, the SBA assumed that businesses receiving ARC loans will 
default more than businesses impacted by Hurricane Katrina. That 
calculation doesn't make sense, and it has limited the loans' 
availability. By developing a subsidy model that better reflects 
reality, the SBA could ensure more funding goes to businesses instead 
of being held in reserve to cover defaults that probably won't happen.
  Going forward, we need to ensure that the recovery reaches everybody, 
especially low-income communities. Obviously, these areas have been hit 
the hardest by the recession, but they also hold the highest potential 
for economic growth. An important program for accomplishing that goal 
is the New Market Venture Capital program. This program targets capital 
to the smallest businesses in economically depressed areas. However, 
until now the program limited the amount of capital an entrepreneur can 
obtain through New Market companies. This bill simplifies the limits so 
that more capital will flow to disadvantaged businesses. Helping these 
businesses promotes hope and opportunity in low-income areas and 
further fosters economic recovery.
  Right now access to capital remains the biggest challenge facing 
small firms. Making these minor adjustments to the ARC program and the 
New Market initiative will improve access to capital for small 
businesses when they need it most.
  In coming weeks, the committee will continue working to update the 
SBA's programs. In the meantime, this legislation extends these 
initiatives and makes two critical changes to help small businesses. I 
urge my colleagues to vote ``yes.''
  Mr. Speaker, I reserve the balance of my time.
  Mr. GRAVES. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in support of the chairwoman's request to 
suspend the rules and pass H.R. 3614.
  The bill is very simple. It extends the authorization of all programs 
authorized by the Small Business Act, the Small Business Investment 
Act, and any program operated by the Small Business Administration for 
which Congress has already appropriated the funds. The bill also makes 
a minor change to America's Recovery Capital, or ARC, loan program. 
This extension will last until October 31, 2009.
  This extension is necessary because authorization for various 
programs operated by the SBA ceases on September 30, 2009. The 
committee has worked in a bipartisan fashion over the past two 
Congresses and reported out a number of bills to address programs 
operated by the SBA. Despite the efforts of the House, the extension 
passed earlier this year by both bodies of Congress is going to expire 
before the legislative process can run its course.
  The work needed to help America's entrepreneurs revitalize the 
economy simply cannot be accomplished within the timeframe outlined in 
the current legislation. Without enactment of this extension, a number 
of vital programs that the SBA operates will cease to function. Given 
the importance that small businesses play and will continue to play in 
the revitalization of the American economy, we cannot allow the SBA 
authorization to run out.
  This legislation also makes a minor change to the ARC loan program. 
When the ARC loan program was instituted, the Congressional Budget 
Office indicated that it would create a PAYGO issue should the ARC 
loans be available to businesses to pay down debt on a 7(a) loan. 
Accordingly, we stipulated that ARC loans could not be used in this 
manner. Recently, the CBO stated that allowing such an instance would 
not create these budgetary concerns and that it would be allowable for 
businesses to pay down debt on a 7(a) loan with ARC funds. This is a 
minor change that will enable small businesses with both an ARC loan 
and a 7(a) loan to use the funding they qualify for in a manner that 
suits them best, and I applaud this change and urge its adoption.
  Enactment of this legislation will enable the House and Senate to 
continue to work in a diligent manner to address necessary changes to 
SBA programs. I urge all my colleagues to suspend the rules and pass 
H.R. 3614.
  Mr. Speaker, I yield such time as she may consume to the gentlewoman 
from Florida (Ms. Ginny Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. I thank the gentleman for yielding.
  Mr. Speaker, I rise today in support of this bill, although I think 
it's critically important that we are honest about what this Congress 
is doing for small businesses, or perhaps it would be better to say not 
doing.
  We can't survive when the economy is good without small businesses, 
and we sure as heck cannot recover without small businesses when the 
economy is bad. Yet despite programs Congress has authorized and 
extended, I hear every day from small businesses in and around my 
district that banks, even banks they've dealt with for many years, are 
now refusing to lend and continuing to refuse to lend.
  I was extremely frustrated when the $700 billion bank bailout did not 
free up bank funds for small businesses, and Americans were angrier 
still to find out that only 1 percent of the $800 billion stimulus bill 
that the President signed was directed towards small businesses. But 
that actually pales in comparison to the frustration felt when we hear 
that the little bit of stimulus money that did go to SBA isn't flowing 
through to small businesses.
  To put this into perspective, 4 months ago the SBA began a program to 
assist auto dealers in obtaining floor-plan financing for their 
inventories. An SBA official estimated that 4,000 loans would be 
guaranteed by the government by October 1. As of the second week in 
September, only three, t-h-r-e-e, three, had been guaranteed and not a 
single one of those had closed.
  Worse yet, Mr. Speaker, if we proceed with the proposed health care 
legislation in the House, 42 percent of small business income will face 
higher tax rates. This Congress and the Obama administration must 
address the fact that, as we have seen with the President's housing 
programs, even very strong incentives have not led to increased 
lending. Patting ourselves on the back for extending programs that 
don't work may feel good for a while, but it's not going to help the 
small business owners in any Member of Congress's district meet 
payroll.
  Whether it's regulatory capital requirements or dealing with red tape 
to get the guarantees, the banks are not lending. That needs fixing 
immediately.
  Instead of spending time recognizing the importance of wild horse 
adoption or congratulating sports teams, Congress needs to dig in and 
do the serious,

[[Page 22409]]

urgent work that the people of America expect. That, Mr. Speaker, is 
our job.
  Ms. VELAZQUEZ. Mr. Speaker, I reserve the balance of my time.
  Mr. GRAVES. Mr. Speaker, again, this is a very simple 
reauthorization.
  I have no further requests for time, and I yield back the balance of 
my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, if our economy is going to recover, then America's 
entrepreneurs will need to lead the way. Many of the SBA's programs, 
which will help small businesses with specialized training or access to 
capital, need to be updated. That is why the House has passed bills to 
update the SBA's various programs and why they were approved with 
bipartisan support.
  However, while we continue working with our Senate colleagues to 
finish these bills, we also need to give the SBA the authority to 
continue functioning.
  The legislation before us will extend the SBA programs until the end 
of October. This provides the appropriate amount of time to continue 
our legislative work while keeping key services at the SBA up and 
running. Equally important, this bill makes two small, yet significant, 
changes to the ARC loan program and the New Markets Venture Capital 
program. These changes will further help small businesses access 
capital when they need it most.
  This is a good bill for small businesses. I urge my colleagues to 
vote ``yes.''
  Mr. WU. Mr. Speaker, I rise in support of H.R. 3614.
  Small businesses grow our economy through innovation, and the SBIR 
and STTR programs help companies develop cutting edge technologies for 
the government and for the private sector. However, the SBIR and STTR 
programs expire at the end of this month. H.R. 3614 temporarily extends 
the authorization of these programs while we work to finalize 
reauthorization efforts.
  The House and Senate both passed legislation earlier this year to 
reauthorize these programs. We have been working to find common ground 
on areas we disagree on, and while we still have yet to reach a final 
agreement--we all have the same goal: to reauthorize important programs 
that drive small business.
  As we work to get our economy back on track, small, high tech 
companies will play an important role creating good paying jobs. It is 
important that SBIR and STTR continue to provide critical funds for 
research at small businesses. It is also important that these programs 
reflect the innovation economy of 2009. I look forward to continue 
working with the House Small Business Committee and the Senate to 
reauthorize this program.
  I urge my colleagues to support this bill.
  Ms. VELAZQUEZ. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from New York (Ms. Velazquez) that the House suspend the 
rules and pass the bill, H.R. 3614.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. VELAZQUEZ. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________