Local Emergency Radio Service Preservation Act of 2004

Mr. Speaker, I yield myself such time as I may consume.

(Ms. VELAZQUEZ asked and was given permission to revise and extend her remarks.)

Mr. Speaker, first I would like to thank the chairman and the House leadership for their commitment and willingness to resolve this program in a bipartisan manner.

In today's jobless recovery, small businesses are more important than ever. That is because small businesses are this country's main economic driver. They are this country's main job creator, and they are this country's number one employer. They are the backbone of the American economy.

One big challenge for small businesses is access to capital. Studies have shown that too many entrepreneurs finance their great ideas with credit cards. And this puts them into debt even before they get their businesses off the ground.

That is exactly why the SBA loan programs are so critical. These programs fill a financing gap for small firms, making loans on great ideas that may not have been looked at twice or invested in it at all. In fact, last year, the SBA's 7(a) flagship loan program provided hundreds of thousands of small businesses with billions of dollars that was then pumped back into the U.S. economy.

Yet, for all the good the 7(a) program has done, it recently fell on tough times. The program was shut down at the end of last year and was later reopened but with severe restrictions in place. Just after the program hit these bad times, so did the small business owners that were trying to secure loans. Suddenly, their plans to hire employees, expand their operations or purchase new equipment were put on hold; and, as a result, job creation was put on hold for the American economy overall.

I am happy to say to all those small business owners out there who have suffered, we are going to make the 7(a) loan program whole again with the bill before us today. This program that has helped countless entrepreneurs turn their dreams of business ownership into reality is back, and hopefully it is here to stay.

In H.R. 4062, we ask lenders to shoulder greater responsibility for the program, but we are also giving them a new tool by raising the guarantee rate from $1 million to $1.5 million. In doing this, lenders will be able to guarantee more loans, more money will flow into the American economy, and small firms will be able to create more jobs.

This fix will support our small businesses that create good-paying jobs right here in the United States, unlike the large multinational corporations that move jobs overseas in search of cheap labor and lax environmental standards without even thinking twice.

Our solution will especially help small manufacturers who have been hard hit, like Elliot Moses, a small businessman from Sandy, Utah, who was left on the edge of financial ruin when the 7(a) program was closed. Now he and thousands of other manufacturers can get the loans they need to stay competitive, strengthen their operations here in the U.S. and hire more American workers.

With H.R. 4062, we pave the way to success for manufacturers and small businesses everywhere. With this bill, we make sure small businesses have access to capital. With this bill, we make sure small businesses can invest in their ventures, purchase new equipment, expand and create jobs. With this bill, we will be giving our economy the shot in the arm that it needs right now; and with this bill, we also give new hope to the 8.2 million unemployed Americans that something is being done to transform the current jobless environment into one of work and prosperity.

If my colleagues support our Nation's economy, if they support job creation, then I urge my colleagues to support H.R. 4062.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I do not have any other speakers

Mr. Speaker, I yield myself such time as I may consume.

By passing this bill, we will show small businesses just how important they are to the U.S. economy. We will show them that we want to make it easier for them to invest capital back into the businesses where it belongs; and, Mr. Speaker, I would like to take a moment to thank all the staff who worked hard on this solution.

I would like to thank from the administration, the staff, Jenny Mayne, Anthony Bedell and Charles Rowe. From the House leadership, I would like to thank KiKi Kless and Julie Sullivan. From the chairman's office, Barry Pineles, Matthew Szymanski and Phil Eskeland. From the Democratic Committee on Small Business staff, I would like to thank the staff director Michael Day, Adam Minehardt and Jordan Haas.

Mr. Speaker, I yield as much time as she may consume to the gentlewoman from California (Ms. Millender-McDonald).

Mr. Speaker, I yield myself such time as I may consume.

I urge the adoption of H.R. 4062 and call on the Senate to act quickly on this measure so that small businesses across the country can benefit.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4062) to provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958 through June 4, 2004, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on this legislation.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, this bill is a bipartisan work product between the gentlewoman from New York (Ms. Velazquez) and me and is a result of the commitment made on the House floor earlier this month to provide a fix to the problem in the main flagship guaranteed lending program of the Small Business Administration.

This legislation would not only restore the overall 7(a) program to full strength, but also expand its outreach to help more small businesses grow and create more jobs.

Earlier this year, a funding shortfall unfortunately required the SBA to temporarily suspend the program for a week, reduce the maximum loan size to $750,000, and prohibit combination or piggyback loans.

In this compromise, the annual lender ongoing fee on 7(a) loans would increase from 0.25 percent to 0.36 percent. The lender would also pay a 0.70 percent up-front fee for combination or piggyback loans. For loans under $150,000, the lender would no longer be allowed to retain the 0.25 percent ongoing fee. Instead, this bill, under the provisions in it, the SBA will keep that fee.

H.R. 4062 raises the 7(a) guaranteed limit from $1 million to $1.5 million with an additional risk premium fee of 0.25 percent imposed on the borrower over and above the 3.5 percent fee they currently pay on loan amounts over $1 million.

Finally, H.R. 4062 allows lenders the option to make loans up to $2 million under the SBA Express program, which has a 50 percent guarantee rate; but banks can use their own paperwork. Currently lenders can only make loans up to $250,000 under the SBA Express program. I want to make it clear, however, that I intend that this provision must be truly optional on the part of the lenders. The SBA should not do anything in its internal policies or procedures that tilts this rule in favor of SBA Express at the expense of the rest of the 7(a) lending program.

All together, these provisions will provide an additional $3 billion in lending to small businesses for the rest of fiscal year 2004 to reach a total of 7(a) program level of $12.55 billion without requiring any additional appropriations or reprogramming funds from other key areas within the SBA.

When this bill is passed by Congress and signed into law, SBA assures me it will provide enough lending authority for the SBA to remove the current loan cap of $750,000 and also allow combination or piggyback loans.

By increasing the 7(a) programs lending authority, SBA estimates that through their lending partners they will be able to offer 30,000 additional guaranteed loans, which could create or retain as many as a half million jobs by the end of September.

In addition to fixing the 7(a) program, the bill authorizes the SBA to charge fees under the 504 Certified Development Company program and the Small Business Investment Company program until the end of the fiscal year or September 30, 2004. Both these programs operate solely on the basis of user fees and do not require an annual appropriation. Currently, the authority to charge these fees expires on May 21.

Finally, the general extension of SBA programs not covered by an appropriation such as the surety bond program, SBA's cosponsorship authority, and several very small procurement assistance programs, will move from the current deadline of April 2 to June 4 of 2004.

This bipartisan bill has the support of both the minority and majority sides of the Committee on Small Business. It has the support of the administration. And finally, it represents the consensus position of those who use the 7(a) program, both borrowers and lenders.

I urge my colleagues to support H.R. 4062.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I have no further speakers. I would ask the gentlewoman if she has any further speakers

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I would like to thank the chairman and the ranking member for their leadership. They have fought long and hard to make sure that they heard the cry of small businesses.

Small businesses have been crying throughout this country, saying that they needed the 7(a) loan programs so that they can do business; and we all recognize that small businesses are the engine that creates the jobs in this country. So to the gentleman from Illinois (Chairman Manzullo) and the gentlewoman from New York (Ranking

Member Velazquez), I thank them so much for bringing this to the floor and all of the staff members who have worked so hard.

Mr. Speaker, this critical measure will help reopen the Small Business Administration's core lending vehicle which is the 7(a) loan program, and it will provide funding for the agency through June 4. While we grapple with the budget, we recognize that there are shortcomings in terms of it, but at least it will begin to address those applications that have come to us from those small businesses that critically need the financing through the 7(a) loan program.

This bill also makes a number of important changes to the program, including lifting the $750,000 cap on loans and gets the program running at an adequate level. It removes the regulatory restriction, also known as the ``piggybacking,'' on SBA loans being part of larger financing packages.

This bill also creates a new financing tool by increasing the size of the loan guarantee to $1.5 million, which provides more options for lenders providing these loans.

Finally, Mr. Speaker, this bill extends the 504 loan program and the SBIC program through the end of this year.

We cannot thank the ranking member and the chair enough for the hard work that they have done, because these are important loan programs for small businesses.

As the ranking member on the Subcommittee on Tax, Finance, and Exports, I have long understood the critical role this program plays in keeping our Nation's economy vibrant and strong. These loans are the only source of affordable, long-term financing for many of our Nation's small businesses, and loans spur economic development in underserved areas.

In addition, the 7(a) loan program can be used for long-term working capital, including accounts payable, just allowing small businesses to do business.

Mr. Speaker, I urge all of my colleagues to pass this very important piece of legislation, H.R. 4062.

Mr. Speaker, I rise today in strong support of H.R. 4062, which will temporarily resolve the funding shortage for the Small Business Administration's 7(a) Loan Guarantee Program and ease the resulting financial burden that has been placed on small businesses. H.R. 4062 is the product of bi-partisan collaboration, and I commend Chairman Manzullo and Ranking Member Velazquez for working together to create a sound public policy response to this crisis for small businesses. I also thank the House Leadership on both sides of the aisle for responding promptly and positively.

The 7(a) Loan Guarantee Program is the Small Business Administration's flagship financing program, which accounts for 30 percent of all small business long-term loans in this country.

On February 11th of this year, the Small Business Committee held a hearing on the Administration's proposed Fiscal Year 2005 Budget for the Small Business Administration. At that hearing, small business owners from a diverse array of geographical areas and engaged in a variety of different industries testified that the financial crisis at the SBA 7(a) Loan Guarantee Program caused them undue hardship. Most indicated that the failure to access 7(a) Loans on more reasonable terms would preclude their respective companies from gaining access to the capital necessary to ensure survival. In the case of one small business owner who testified about his company's proposed project, the mayor of the city in which the company's site would be built accompanied him to Washington. The mayor spelled out exactly what was at stake for his economically distressed community; the opportunity to revive the local economy and provide new jobs, or the prospect of further decay and desperation.

H.R. 4062 lifts temporary caps on 7(a) loans that were instituted in order to respond to its financial crisis. It will again allow for 7(a) loans to be included in larger financial packages, and provide working capital for export activities of small businesses. This is a step in the right direction, and I hope that Congress will follow the model of H.R. 4062 in addressing the long-term health of a 7(a) program that is so important to small businesses, which are incubators of economic and job growth in our communities.

I urge my colleagues to support H.R. 4062.

Mr. Speaker, I rise in support of American small businesses and the 7(a) loan program.

President Bush has stood by while a record 2.9 million private sector jobs disappeared. The overall unemployment rate has stalled at 5.6 percent. It would be even higher if it included 1.7 million Americans who are no longer searching for employment.

As a former small business owner, I know the benefits they provide to our economy. Small businesses generate three-fourths of all new jobs. They represent 99 percent of all employers and create more than half of our GDP. If we want our economy to grow, we need to support small businesses.

But that's not what the Administration has done. At every step they have cut programs and decreased funds. The Administration's FY2005 budget devastates small businesses. 22 programs will be terminated and 14 will see their budgets cut.

The microloan program, which provides small businesses with loans of up to $35,000, will be terminated, while the Manufacturing Extension Program, which helps small manufacturers solve business problems, has been cut by $66 million over the last two years. The 7(a) loan program has been repeatedly cut and dismantled. They've done everything they could think of in order to kill it. They reorganized it. They closed it down. They capped the loans.

If the 7(a) program is shut down or the amount of loans is capped, then small businesses will suffer. They will not have access to affordable capital. And they will be forced to lay off workers and shut their doors. It is so important for small business to have affordable access to capital. That is why I commend the Democrats on the Small Business Committee for working so hard to save the 7(a) loan program.

But the Administration still doesn't get it. They continually cut the programs and the funds that support our small businesses. To stop our Nation's march towards a jobless recovery, our small businesses must be taken care of. Unless the Administration recognizes the problems that face American small businesses, the unemployment rate will rise and our economy will not recover.