Nov. 19, 2003
Temporary Extensions of the Programs Under the Small Business Act and the Small Business Investment Act of 1958
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 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.