Mr. Speaker, on November 20, 2004, the House took up consideration of and passed H.R. 4818, the Consolidated Appropriations Act for 2005. Division K of H.R. 4818 contains the Small Business…
Mr. Speaker, on November 20, 2004, the House took up consideration of and passed H.R. 4818, the Consolidated Appropriations Act for 2005. Division K of H.R. 4818 contains the Small Business Reauthorization and Manufacturing Assistance Act of 2004. Since the act was incorporated directly into the Consolidated Appropriations Act for 2005, no committee report accompanies the legislation. As chairman, I am submitting for insertion in the Record, the attached explanation of the Small Business Reauthorization and Manufacturing Assistance Act of 2004. I would expect the Administrator, in implementing the provisions of this act, to accord the enclosed explanation the same weight in defining congressional intent that the Administrator would give to a report after a mark-up prior to floor action or the language in a conference report. This expectation is particularly apt in this circumstance because the provisions were negotiated and agreed to in cooperation with my counterpart in the United States Senate.
Joint Explanatory Statement of Division K of H.R. 4818 Filed by
Chairman Manzullo
Section 101. Express loans
Section 7(a)(25)(B) authorizes the Administrator to create
pilot loan programs. In exercising that authority, the
Administrator created an ``Express Loan Pilot Program.'' The
program authorizes lenders to use their own forms in
submitting requests to the Administrator for the issuance of
guarantees. Two significant restrictions are imposed by the
``Express Loan Pilot Program:'' the guarantee cannot exceed
50 percent of the loan and the maximum loan amount is
$250,000.
Section 101 codifies, with a few significant differences,
the provisions of Pub. L. No. 108-217, which addressed the
Express Loan Program. The two most significant changes are
the permanent authorization of the Express Loan Program by
creating a new paragraph (31) in Sec. 7(a) of the Small
Business Act and the statutory increase in the size of such
loans to $350,000.
Section 101 defines an ``express loan'' as any lender
authorized by the Administrator to participate in the Express
Loan Program. Congress expects that the Administrator will
establish by rule the standards needed to qualify as an
Express Lender.
Section 101 defines an ``express loan'' as one in which the
lender utilizes, to the maximum extent practicable, its own
analyses of credit and forms. Congress fully expects that the
conditions under which express loans are made will not vary
significantly from those conditions that currently exist
under the ``Express Loan Pilot Program.'' Nevertheless,
Congress understands that the Administrator may wish to
revise the standards and operating procedures associated with
``express loans.'' Nothing in the statutory language should
be interpreted as prohibiting the Administrator from imposing
these additional requirements that are otherwise consistent
with the statutory language.
Section 101 codifies the existing concept of the
Administrator's ``Express Loan Pilot Program.'' In other
words, the ``Express Loan Program'' is one in which lenders
utilize their own forms and get a guarantee of no more than
50 percent.
Section 101 restricts the program, including the increased
loan amount of $350,000, to those lenders designated as
express lenders by the Administrator. Designation as an
express lender does not limit the lender to making express
loans if the lender has been authorized to make other types
of loans pursuant to Sec. 7(a) of the Small Business Act.
Although a lender may only seek status as an express lender,
this section was included to ensure that the Administrator
not limit the ability of an express lender to seek other
lending authority from the Administrator. Nor is the
Administrator permitted to change its standards for
designating an express lender in a manner that only
authorizes the lender to make express loans. To the extent
that the lending institution wishes to offer a full range of
loan products authorized by Sec. 7(a) and is otherwise
qualified to do so, the Administrator shall not restrict that
ability on the lender's status as an express lender.
Section 101 prohibits the Administrator from revoking the
designation of any lender as an express lender that was so
designated at the time of enactment. This prohibition does
not apply if the Administrator finds the express lender to
have violated laws or regulations or the Administrator
modifies the requirements for designation in a way that the
express lender cannot meet those standards. Congress does
not expect that the Administrator will impose new
requirements for express lenders that prohibit them from
making loans under other loan programs authorized by the
Small Business Act for which they have approval from the
Administrator.
Congress, at the request of the Small Business
Administration, determined that it was appropriate to expand
the size of ``express loans'' to $350,000. Any change in the
size of an express loan now will require action by Congress.
Congress is concerned that the Administrator will take
regulatory actions that unduly favor express lending over
other types of lending authorized by Sec. 7(a) of the Small
Business Act. As such, Congress incorporated a provision
prohibiting the Administrator from taking any action that
would have the effect of requiring a lender to make an
express loan rather than a conventional loan pursuant to
Sec. 7(a). Any significant policy change in the operation of
the lending programs authorized by Sec. 7(a) of the Small
Business Act requires notification to the House and Senate
Small Business Committees. Furthermore, the statutory
language on notification goes beyond that which is required
pursuant to Sec. 7(a)(24) of the Small Business Act.
Section 102. Loan guarantee fees
Section 103 increases the loan guarantee amount to a
maximum of $1.5 million. Given the fact that borrowers are
getting an additional increment in loan guarantees, the
sponsors determined that it would be appropriate to require
an additional 0.25 percent fee for the amount of guarantee in
excess of $1 million. Thus, on the amount of the guarantee
between $1 million and $1.5 million, the upfront fee
authorized pursuant to Sec. 7(a)(18) of the Small Business
Act increases from 3.5 percent to 3.75 percent but only for
that portion of the loan guarantee in excess of $1 million.
This is consistent with typical commercial lending practices
of charging fees that are commensurate with the lenders'
exposure to risk.
Section 102 also raises the fee collected by the
Administrator from banks of the unpaid balance of deferred
participation loans. To avoid situations such as those that
occurred at the end of calendar year 2003 in which the
Administrator was required to drastically reduce lending and
impose other restrictions on the program, Congress determined
that it would be appropriate for the Administrator to have
some discretion in setting the fee paid by lenders on the
unpaid balance. The total amount of the fee cannot in, any
year, exceed 0.55 percent of the unpaid balance. Congress
expects the Administrator to use this authority only when
needed to drive the cost, as that term is defined in the
Federal Credit Reform Act, of the loan program to zero, i.e.,
not need an appropriation. Any use of this discretion to
raise the fee beyond the current level of 0.5 percent should
trigger the notification provisions in Sec. 7(a)(24) of the
Small Business Act. As a further oversight tool, Congress
expects that the Administrator would satisfy any relevant
committee's request for information on the utilization of
this discretion.
Finally, Congress determined that the Administrator also be
given the authority to lower fees charged to borrowers and
lenders if the subsidy cost becomes negative, i.e., the fees
will actually take in more money to the government than it
costs to operate the Sec. 7(a) loan program. Congress adopted
an approach that the Administrator should it undertake a fee
reduction first consider reducing the fees set forth in
clauses (i)-(iii) of subsection 7(a)(1 8)(A) and then reduce
fees on lenders. As a further restriction on the discretion
of the Small Business Administration, the fees that were
charged to borrowers on the date of enactment of this
conference report may not be raised. Congress adopted this
language to ensure that any fee increases to borrowers
beyond the statutory limits requires the action of
Congress.
Section 103. Increase in guarantee amount and, institution of
associated fee
Access to capital is vital to the growth of small
businesses. Particularly for manufacturers and high
technology research and development businesses, typical
amounts of capital available under the existing loan limits
authorized by Sec. 7(a) of the Small Business Act often are
inadequate. Given the importance of capital to grow small
businesses, Congress determined that it would be appropriate
to permanently increase the amount of the loan guarantee from
$1 million to $1.5 million. No additional changes were made
in the overall statutory cap of a gross $2 million loan.
Thus, the Administrator will be able to guarantee up to $1.5
million of a $2 million loan rather than the current limit of
$1 million. Congress expects that this will increase the
number of lenders willing to make loans to small
manufacturers who face significant global competition.
Section 104. Debenture size
Congress raised all of the loan limitations for qualified
state and local development companies (``CDCs'') because they
had not been raised in many years and the long-term financing
needs of small businesses were not being met by loans that
did not exceed the thresholds for loans made pursuant to
Sec. 7(a) of the Small Business Act. Raising the loan
limitations has two effects. First, it signifies the
recognition that Title V of the Small Business Investment Act
and Sec. 7(a) of the Small Business Act has very different
purposes in mind. Second, an increase in the threshold allows
more effective economic development projects to be funded by
CDCs.
Congress believes that the increases to $1,500,000 for
regular projects, $2,000,000 for public policy goal projects,
and $4,000,000 for small manufacturers will provide
significant new financial inputs to small businesses in
general and to small manufacturers in particular.
While all small businesses whose primary industrial
classification is in North American Industrial Classification
sectors 31, 32, and 33 (the sectors for manufacturing), not
all small business concerns in those sectors are considered
small manufacturers. Congress adopted a requirement that
small manufacturers should be limited to those small business
concerns that have all of their production facilities are
located in the United States. Congress does not intend that
small business concerns that have manufacturing facilities
situated outside of the United States should be denied
assistance under programs operated by the Small Business
Administration. However, special benefits should be afforded
to those manufacturers whose production facilities are
located in the United States. Finally, the definition in
Sec. 106 is identical to the definition in this section
thereby avoiding any potential interpretive concerns about
what the legislature meant when it used the same term in
different sections of legislation.
Section 105. Job requirements
The Administrator has promulgated regulations, pursuant to
Sec. 501 of the Small Business Investment Act mandating that
a loan made by a CDC must create or save one job for each
$35,000 in guarantee. This standard has not been revised
since it was adopted in 1990. The standard clearly does not
reflect inflation or the dramatic increases in productivity
that has led to higher wages for all employees. Congress
determined that the standard should be revised to take
account of the changes in the economy during the past 14
years. Therefore, 105 statutorily raises the job creation
standard to one job for every $50,000 in guarantees.
Manufacturing requires greater capital investment than
other businesses. Such investment may lead to higher
productivity for small manufacturers and therefore fewer jobs
created per investment. Congress does not want to prejudice
the ability of CDCs to fund projects that would assist small
manufacturers. Section 106 establishes a standard that
authorizes CDC loans to small manufacturers if the project
creates one job for each $100,000 of guarantee.
CDCs do not need to meet job creation standards for
individual loans if the loan is used to further one of the
public policy objectives in Sec. 501(d). Section 105 modifies
that requirement slightly by exempting a particular project
from the job creation standards if the project was meeting a
public policy objective and if the CDC's overall loan
portfolio creates one job for $50,000 in guarantees.
Since the basic premise of loans made pursuant to Title V
of the Small Business Investment Act is to encourage economic
development, Congress concluded that it made sense to
establish a different standard for job creation in
economically-depressed areas or places with unusually high
wage requirements. Congress believes that CDCs should be
provided more leeway in creating jobs in economically-
depressed areas and Alaska and Hawaii. As a result, CDC loans
in these areas only need to meet a more lenient job creation
standard of one job per $75,000 of guarantee in certain
areas.
Given the importance of small manufacturing to economic
development, Congress excluded loans to small manufacturers
from the calculations needed to determine whether a CDC's
loan portfolio meets the overall job creation standard of one
job per $50,000 of guarantee or the $75,000 standard for
high-wage and economically depressed areas. Congress intends
that the public policy goals set forth in Sec. 501 should be
accomplished without reference to job creation for small
manufacturers. Section 105 also authorizes the Administrator
to waive any of the standards when appropriate. Congress
expects that the Administrator will promulgate regulations
specifying when the job creation standards will be waived.
Two restrictions are imposed on the Administrator's
discretion. First, the Administrator may not waive the
requirements concerning small manufacturers. Second, the
Administrator may not mandate a job creation standard with a
number lower than that set forth in Sec. 105 but does have
the liberty to set a higher dollar guarantee per job
standard. These restrictions ensure that the Administrator
does not undermine the ability of CDCs to lend to small
manufacturers.
Section 106. Report regarding national database of small
manufacturers
Institutions of higher education can play a vital role in
reviving small manufacturers. Universities must purchase
large amounts of standard manufactured products (often on an
annual basis--such as furniture for dormitory rooms). They
also often purchase very sophisticated tools and laboratory
equipment that small manufacturers may produce. Congress
believes that some mechanism should be in place so that
institutions of higher education can identify suppliers from
the universe of small manufacturers. While not an ideal
system, a database similar to PRO-NET represents a useful
model for making institutions of higher education aware of
the capabilities of small manufacturers. PRO-NET is a
database operated by the federal government in which the
capabilities of numerous small businesses are outlined.
Contracting officers use PRO-NET to find small businesses
capable of providing goods and services. Section 106
requires the Administrator and the Association of Small
Business Development Centers to study the
viability of creating a PRO-NET-like database that all
institutions of higher education can use to identify small
manufacturers (the definition is identical to the
definition in Sec. Sec. 104-05) capable of providing their
procurement needs. The bill also requires a report to
Congress on the viability and cost to establish such a
database.
Section 107. International trade
All Sec. 7(a) loans can be used to refinance existing debt
except for international trade loans. Congress determined
that the restriction did not make sense especially since
businesses harmed by unfair international competition will be
more competitive if their debt service payments are lower.
Therefore, Congress authorized businesses otherwise eligible
for an international trade loan to use it for refinancing of
debt but only to the extent that the Administrator determines
the applicant's existing debt is not structured with
reasonable terms and conditions. Congress expects that the
Administrator examine the interest rate being charged
relative to the interest rates generally available for
similar businesses to determine whether the terms and
conditions are not reasonable.
To obtain an international trade loan, the applicant must
demonstrate that the business either is engaged in or
adversely affected by international trade. To avoid the
necessity of having to prove adverse effects if other
government agencies already reached that conclusion in the
same industry as the borrower, Congress mandated that the
Administrator must accept as conclusive proof of injury a
finding by the Secretary of Commerce issued pursuant to
chapter 3 of Title II of the Trade Act of 1974 or any
determination by the International Trade Commission. If an
applicant is in an industry for which the Commission or the
Secretary has made an injury finding, Congress concluded that
it would be pointless to require the small businesses so
suffering to go through the additional expense of presenting
new evidence to the Administrator of injury.
Congress intends that the utilization of the findings by
the Secretary or the Commission is not a limiting factor if a
small business can present other evidence of injury. For
example, the Commission or Secretary may not find that an
industry was injured or that no claims were made to either
agency. Nothing in Sec. 107 prevents a small business from
presenting of evidence of specific injury to his or her
business. The Administrator then would be required to rule on
the adequacy of the proof, and if sufficient evidence was
found of injury, make a loan under Sec. 7(a)(16).
Section 107 also provides for an increase in the size of
international trade loans. Given the nature of international
trade, Congress typically has mandated that loan caps be
$250,000 higher than those for conventional Sec. 7(a) loans.
This section maintains that practice and increased the cap
for international trade loans based on the increase in the
guarantee fees for conventional loans.
Section 121. Program authorization levels
This section amends Sec. 20 of the Small Business Act and
provides for authorization of appropriations. Congress
selected authorization levels with sufficient room to allow
for expected growth and expansion of programs authorized by
the Small Business Act and Small Business Investment Act.
Congress also determined that an authorization of
appropriations not elsewhere provided should apply to all of
the Small Business Investment Act.
Finally, Congress concluded that the existing standing
authorization of appropriations only for carrying out title
IV of the Small Business Investment Act was illogical.
Section 121 amends Sec. 20 to provide for an authorization of
appropriations not elsewhere provided for carrying out both
the Small Business Act and all titles of the Small Business
Investment Act.
Section 122. Addition reauthorizations
The Small Business Development Center (SBDC) program's
authorization levels are set forth in Sec. 21 of the Small
Business Act. Congress provided modest authorization
increases for the SBDCs to take account of necessary growth
in providing services to entrepreneurs. In addition, Congress
also extended the authority of SBDCs to provide drug-free
workplace counseling. This authority would have lapsed
without the change. The extension of authority will give the
SBDC grantees sufficient time to coordinate their actions
with the grantees under the revised drug-free workplace
program.
Given the SBDCs expertise in providing assistance to
entrepreneurs, Congress established a program authorizing
grants to SBDCs that are willing to offer advice in
communities that are economically challenged due to business
or government facility down-sizing or closing. Congress
expects that this assistance will first be offered to
communities suffering from plant closings, then to
communities suffering from government office closings, and
finally to base realignments. To the extent that other bases
are closed in future years, Congress expects that legislation
concerning such closures will provide additional assistance
to the surrounding communities and that assistance provided
under Sec. 122 should be utilized in other areas that do not
receive the directed assistance associated with base
closures.
Section 123. Paul D. Coverdell Drug-Free Workplace Program
authorization provisions
Congress recognizes that small businesses need drug free
workplaces. Drug-free workers boost productivity and reduce
the costs of health care coverage and absenteeism. As a
result, Congress reauthorized the program for two years at
the five million dollar level. In addition, to ensure that
funding is maximized to eligible intermediaries that
specialize in providing drug-free workplace assistance to
small businesses, Congress adopted a limitation on the amount
of funds that can be awarded to SBDCs for carrying out the
purposes of the Paul D. Coverdell Program. Furthermore,
Congress, again in an effort to maximize limited dollars,
restricts the use of funds for administrative purposes to
five percent of the total made available to grantees. Nothing
in this limitation restricts the drug-free workplace advice
that SBDC grantees are authorized to provide in their normal
course of operations.
Section 124. Grant provisions
Congress recognized that improvements in coordination
between the activities of drug-free workplace eligible
intermediaries and SBDCs might improve delivery of services
to small businesses. As a result, Congress established a
grant program within the Paul D. Coverdell Drug-Free
Workplace Program to promote cooperation between eligible
intermediaries and SBDC grantees. Congress expects that the
Administrator award the two-year grants to those applicants
that best demonstrate the capacity to deliver advice in a
coordinated manner between SBDCs and eligible intermediaries.
Section 125. Drug-free communities coalitions as eligible
intermediaries
Congress recognizes that there are numerous entities that
receive grants under chapter 2 of the National Narcotics
Leadership Act of 1988 but are not currently authorized to
participate as eligible intermediaries under the Paul D.
Coverdell Drug-Free Workplace Program. This section makes
these National Narcotics Leadership Act grantees, which could
provide valuable insight into establishing drug-free
workplaces, eligible to receive awards under the Paul D.
Coverdell Drug-Free Workplace Program. Inclusion of new
additional parties should not be interpreted as directing the
Administrator to favor them over others that apply for grants
under the Paul D. Coverdell Drug-Free Workplace Program.
Section 126. Promotion of effective practices of eligible
intermediaries
To ensure that the Paul D. Coverdell Drug-Free Workplace
Program operates optimally, Congress mandates that the
Administrator provide best practices to eligible
intermediaries. The Administrator should use all of its
available outreach resources, including SBDCs, Women Business
Centers, and district offices to ensure that eligible
intermediaries are kept apprised of best practices.
Congress also believes that the performance of eligible
intermediaries should be assessed and measured. Such
evaluations will be useful to Congress when it considers what
changes, if any, need to make the program even more
effective. This section establishes the procedures for
collecting data needed to evaluate the efficacy of the
program.
Section 127. Report to Congress
This section requires the Administrator to use the data
collected under Sec. 126 and report to Congress on the
efficacy of the program and dissemination of drug-free
workplace information. Congress expects the relevant
committees to examine the report and make necessary
legislative changes as a result to ensure optimal operation
of the Paul D. Coverdell Drug-Free Workplace Program.
Section 131. Lender examination and review
Current practice authorizes SBIC licensees to pay for
examination and reviews conducted by the Administrator.
Congress determined that the same principles should apply to
lenders authorized to make government-guaranteed loans under
Sec. 7(a). This section grants the Administration the
authority to charge for examinations and reviews. The section
also requires that the fees be directed to lender oversight
activities including the payment of salaries and expenses of
Administration personnel involved in such functions. This
authority does not imply that the fees may be directed to the
reimbursement of other functions of the Administration.
Section 132. Gifts and co-sponsorship of events
Gifts and co-sponsorships play a useful role in the Small
Business Administration's performance of its outreach
function to small businesses. Congress determined that even
broader language than is currently permitted was necessary to
ensure the Administration's continued ability to obtain gifts
and seek co-sponsorships. In particular, Congress recognized
that in many instances the Administration does not receive
gifts but rather contributions are made by a co-sponsoring
entity to an Administration event, such as small business
forum. In other instances, the SBA uses gifts to pay for
promotional materials, such as cards that are handed out in
district offices to promote an event. This section clarifies
and broadens the existing authority of the Small Business
Administration to obtain gifts and co-sponsorships in order
to expand the agency's outreach. To ensure appropriate
clarity, Congress added the term ``recognition events''
which would include Small Business Week and sponsorship of
dinners during that period. The section also requires the
Administration to recognize the co-sponsors of such events
but only to the extent of their contributions. No
endorsements of the co-sponsors products or services are
permitted.
In order to ensure that conflicts of interest do not arise
in the solicitation or acceptance
of gifts, Congress requires the General Counsel to determine
whether a conflict of interest exists. If a determination
that a conflict of interest exists, the General Counsel is
empowered to prohibit the solicitation or acceptance.
Finally, the language clarifies that the Administrator may
delegate the approval of co-sponsorships to the Deputy
Administrator, Associate Administrators, and Assistant
Administrators. No personnel located in district or regional
offices are permitted to approve co-sponsorships. Congress
adopted this restriction to ensure close cooperation with the
General Counsel of the Administration.
Congress also requires that the Inspector General audit the
use of such gifts and co-sponsorships. This avoids potential
abuses of the program through independent oversight of an
official whose investigations cannot be impeded by the
Administrator or Administration personnel. Congress wanted
additional assurances (beyond the Inspector General audit)
that the Small Business Administration achieved a proper
balance between this new expanded authority and
accountability. As a result, a sunset date of 2006 was added
in order to properly monitor this new authority before
considering making this language permanent in the Small
Business Act.
Section 141. Service Corps of Retired Executives
Currently, the Administrator has the discretion whether to
permit the Service Corps of Retired Executives (SCORE) to
maintain offices at the headquarters of the Administration
and pay employees of SCORE. Congress determined that the
vitality of SCORE should not be subject to whims of the
Administrator and therefore require that the Administrator
maintain SCORE's offices at the Administration's headquarters
and continue to pay for the salaries of SCORE personnel.
Congress notes that this will not require any increased
appropriation since these services and expenses are currently
included in the Small Business Administration's budget.
Section 142. Small Business Development Center Program
Congress remains concerned that SBDCs were and may continue
to be revealing the name of businesses that seek their advice
to Administration employees for functions unrelated to the
financial auditing or client surveys needed to oversee the
operations of the SBDC grantees. Congress believes that such
behavior is intolerable. This section prohibits the
disclosure of client information (including the name,
address, telephone and facsimile numbers, and e-mail address)
of any concern or individual receiving assistance from a SBDC
grantee or its subcontractors (who operate service centers
that business owners can utilize to obtain advice) unless the
Administrator is ordered to make such disclosure pursuant to
a court order or civil or criminal enforcement action
commenced by a federal or state agency. Congress expects that
SBDC grantees will only respond to formal agency requests,
such as civil investigative demands, and subpoenas.
Congress also recognizes that the Administrator has
significant management responsibilities to ensure that
federal taxpayer dollars are wisely used by grantees and are
in compliance with the law, regulations, and the cooperative
agreements signed by SBDC grantees. Congress authorizes the
SBDC grantees to provide client names for the purposes of
financial audits conducted by the Administrator or
Inspector General and for client surveys to ensure that
the SBDC grantees are satisfying certain aspects of their
grant agreements. Congress recognizes that client surveys
may be misused and impose restrictions on their use. Until
regulations are in place to ensure that SBDC grantee
client's privacy is protected to the maximum extent
practicable given the management oversight responsibility
of the Administrator, Congress requires client surveys to
be approved by the Inspector General and any approval
incorporated into the semi-annual report made to Congress.
This section also makes a technical change in wording of
the SBDC program. It renames the certification program as an
accreditation program. The change was made because
institutions are accredited not certified. Since the program
determines the quality of SBDCs, it makes sense to have them
accredited not certified. An identical change is made in
20(a)(1)(D)-(E).
Section 143. Advisory Committee on Veterans Business Affairs
Congress has determined that the federal government must
provide better assistance and support to veterans in their
efforts to form and expand small businesses. In 1999, as part
of this effort, Congress established an Advisory Committee on
Veterans Business Affairs. Its responsibilities included
providing advice to Congress and the Small Business
Administration on policy initiatives that would promote
entrepreneurship by veterans. The responsibilities of this
advisory board were to be taken over by the National Veterans
Business Development Corporation on October 1, 2004. Congress
determined that the Advisory Committee's role was
sufficiently beneficial that it should not be subsumed within
the National Veterans Business Development Corporation. As a
result, Congress authorized an extension of the Advisory
Committee as a separate entity to continue its functions
through September 30, 2006.
Section 144. Outreach grants for veterans
The Administration is authorized to provide outreach grants
to help disabled veterans start and expand small businesses.
Congress determined that the outreach grants should not be
limited to disabled veterans. This section extends the
authority to provide outreach programs to veterans and
reservists.
Section 145. Authorization of appropriations
To express Congress' concern about adequate efforts to
assist veterans, Congress determined that the Small Business
Administration's Office of Veterans Affairs should have a
separate authorization. This section provides for that
separate authorization for fiscal years 2005 and 2006.
Section 146. National Veterans Business Development
Corporation
A ruling by the Department of Justice concluded that the
National Veterans Business Development Corporation was a
federal agency for all purposes and thus subject to, among
other things, federal administrative, personnel, and
procurement laws. Congress, when it created the corporation,
never intended that it would be considered a federal agency.
The legislation mandated sufficient fundraising by the
corporation that would eliminate the need for federal
funding. While that fundraising continues, Congress
determined that its original intent concerning the status of
the corporation should be honored. This section makes it
clear that the corporation is to be considered and treated as
a private entity and not an agency or instrumentality of
the federal government.
Section 147. Small Business Manufacturing Task Force
Manufacturing jobs in the United States have declined since
their historic peak in 1979 and that loss has accelerated in
recent years. Small business manufacturers constitute over 98
percent of our nation's manufacturing enterprises. It is
impossible to overstate the role of small manufacturers
within the overall manufacturing industry and our nation's
economy. The House and Senate Small Business Committees have
placed a high priority on trying to resuscitate the small
business industrial base because economic security in the
United States cannot occur in a purely post-industrial
economy.
Section 147 establishes a Small Business Manufacturing Task
Force within the Small Business Administration, charged with
ensuring that the Administration is properly addressing the
particular needs of small manufacturers. Specifically, the
Small Business Manufacturing Task Force will: (a) evaluate
and identify whether existing programs and services are
sufficient to serve small manufacturers' needs, or whether
additional programs or services are necessary; (b) actively
promote the SBA's programs and services that serve small
manufacturers; and (c) identify and study the unique
conditions of small manufacturers, and develop and propose
policy initiatives to support and assist them. This section
also instructs the Small Business Manufacturing Task Force to
submit a report of its findings and recommendations to the
President and the Senate and House Small Business Committees
not later than 12 months after the effective date of the bill
and annually thereafter. In carrying out their obligations
under this section, Congress expects that the Task Force will
consult with other agencies that have manufacturing
responsibilities, such as the Department of Commerce.
Section 151. Streamlining and revision of HUBZone eligibility
requirements
The Historically Underutilized Business Zone (HUBZone)
program was designed to direct portions of federal
contracting dollars into areas of the country that in the
past have been out of the economic mainstream. HUBZone areas,
which include qualified census tracts, poor rural counties,
and Indian reservations, often are out-of-the-way places that
the stream of commerce passes by, and thus tend to be in low
or moderate income areas also characterized by comparatively
high unemployment. These areas can also include certain rural
communities and tend generally to be low-traffic areas that
do not have a reliable customer base to support business
development. As a result, businesses have been reluctant to
move into these areas and expend the necessary funds to
develop the infrastructure for creation of jobs. It simply
has not been profitable, without a customer base, to keep
those businesses operating.
The HUBZone program seeks to overcome these problems by
providing the means for Federal procurement activities to
become customers for small businesses that locate in
HUBZones. While a small business works to grow, expand its
payroll, and establish a solid base of commercial or other
customers, federal business opportunities can be of vital
importance. Federal prime and subcontracts can become an
important source of revenue for a HUBZone small business, and
prime contracts in particular can help stabilize revenues,
establish valuable past performance record, and maintain
future profitability.
In past years, the HUBZone program has encountered issues
relating to the statutory requirement that a HUBZone firm be
entirely owned and controlled by individual U.S. citizens.
This requirement means that all HUBZone applicants need to
be owned by human beings directly and not human beings
organized as business entities. However, many small
business owners and small business investors prefer to
take advantage of
various corporate forms in order to limit the personal
liability for themselves and their families. Exceptions
for Alaska Native Corporations, Indian tribal governments,
and community development corporations were added by the
Small Business Act reauthorization legislation in 2000.
Even with those changes, the presence of a corporate
entity or a limited liability company with an ownership
stake in a small business would have automatically
disqualified an otherwise eligible firm from participation
in the HUBZone program. Small agricultural cooperatives,
which already maintain presence in rural HUBZones, would
have faced similar restrictions. These rules unnecessarily
impede the flow of capital to the very areas that need it
the most and create compliance conflicts with other small
business procurement programs.
Section 151 addresses this problem through streamlining and
revision of the eligibility requirements for HUBZone small
businesses to include small businesses that are 51 percent
owned by United States citizens, as well as to include small
businesses which are small agricultural cooperatives or are
owned and controlled by small agricultural cooperatives.
In addition, HUBZone firms owned by the Indian tribes have
been facing peculiar challenges due to statutory requirements
that they must hire a certain percentage of its workforce
performing a federal contract or subcontract from Indian
reservations or adjacent areas. These requirements, while
motivated by the desire to spur economic development of the
tribes, over time had the unintended consequence of putting
tribally-owned firms at a disadvantage in comparison with all
other HUBZone concerns by imposing a geographic restriction
on the kinds of contracts that tribally-owned HUBZone firms
could perform. Geographic restrictions also impeded business
synergies between tribally-owned HUBZone firms and Alaskan
Native Corporations. To remedy this disparity, Section 151 is
providing tribally-owned HUBZone concerns the option of
qualifying for the program based on locating in, and hiring
workers from, either Indian reservations or any other
HUBZones on the same terms as available to other HUBZone
firms. Congress notes that the Indian tribes, as owners of
the HUBZone firms, will be receiving expanded economic
benefits from new contracting opportunities.
Section 152. Expansion of qualified areas
Congress observes that the HUBZone area qualifications are
also in need of improvement. Paradoxically, economically
distressed rural communities in states with high
unemployment--among the neediest of needy areas--currently do
not qualify for the HUBZone program because rural areas
currently must qualify in relation to the statewide
unemployment average. As an example, in calendar year 2003,
Alaska had a statewide unemployment rate of 8.0 percent. To
qualify as a HUBZone area, it was necessary for an Alaskan
rural community to have an 11.2 percent unemployment rate.
But, in 25 of the 50 states, a rural community could have
qualified as a HUBZone with an unemployment range of 7.8
percent or less.
Section 152 addresses this problem by modifying the
definition of a ``qualified nonmetropolitan county'' to
provide the option of comparing the unemployment statistic
for that area to the statewide average or to the national
average. The new statutory HUBZone definition should give the
Small Business Administration flexibility to address both
national and state-wide unemployment disparities without
hurting the states that have comparatively low
unemployment overall, but with pockets of serious
unemployment.
Congress recognizes the drastic economic ramifications of
military base closures and that the HUBZone program can
uniquely harness the strength and the creativity of the
private sector by providing incentive for small businesses to
relocate to areas suffering such ramifications. According to
congressional research, more than 300 military bases closed
or realigned between 1988 and 2003 and more than 50 percent
of these bases were located outside of a designated HUBZone.
Therefore, Congress intends that, upon the later of the
enactment of this act or the date of final closure, existing
as well as future military base closure areas be designated
as HUBZones for a period of five years in order to
reinvigorate the productive capacity of such areas and
leverage existing local customers and a skilled workforce.
Congress believes that new businesses and new jobs created
through the HUBZone small firms mean new life for areas
affected by base closure.
Additionally, Congress notes the existence of numerous
complaints that the current definition of HUBZone qualified
areas based on census income data, in conjunction with the
definition of HUBZone qualified redesignated areas, fail to
provide adequate time to recoup a return on investment. These
concerns appear justified. Congress observes that the HUBZone
program is relatively young, and the federal government is
not even close to meeting its statutory prime contracting
goal of 3 percent. Because the HUBZone program was enacted
into law in 1997, the initial HUBZone areas were designated
on the basis of the 1990 Census. However, the federal
government conducted another census in 2000. As a result,
many areas were redesignated after only 3 years of the
program's existence. The statute currently grandfathers the
redesignated areas into the program for 3 years.
Congress notes that, at the time of the last redesignation,
the small business community received comparatively few
benefits from the HUBZone program despite the substantial
workforce recruitment, compliance, and business development
efforts that must be expended by each of the HUBZone firms.
These small businesses, which made business decisions to
pursue the HUBZone strategy by locating in a HUBZone,
adjusting their ownership structure, and recruiting HUBZone
residents are in danger of being penalized for the federal
government's slow initial implementation of the HUBZone
program. Further, anecdotal evidence indicates that it may
take a long time for a new firm to secure a federal contract,
and that multiple-order contracts commonly envision task
orders over a number of years. In these circumstances, a 3-
year grandfather clause would appear not to provide
sufficient time for a small business to generate a return on
the HUBZone investment. By comparison, companies under the
8(a) program can maintain such a designation for 9 years, and
a general small business designation can be maintained
indefinitely. Therefore, Congress imposes a moratorium on
HUBZone area redesignations by providing for an extension of
the redesignation period until the conclusion of the 2010
Census. No certified HUBZone firm shall be decertified as a
result of either the redesignation process based on the 2000
Census data or any revised unemployment data subsequent to
December 21, 2000, the date of passage of enactment of the
HUBZone in the Native America Act. It is the intent of
Congress to have the Small Business Administration reinstate
any HUBZone firm previously decertified based on these two
criteria.
Congress also finds that, concurrently with the moratorium,
a study on the effectiveness of the HUBZone area definitions,
including the redesignation period, must be conducted by the
Office of Advocacy of the United States Small Business
Administration. The Office of Advocacy is chosen to conduct
this study for its particular expertise in small business
procurement, rural small business development, and general
small business matters. Congress directs the Office of
Advocacy to examine the impact and effectiveness of the
HUBZone definitions on small business development and jobs
creation, and expect that the Office of Advocacy will
periodically consult with congressional small business
committees on matters concerning this study. Findings and
recommendations of the study must be reported to
congressional small business committees by May 1, 2008.
Section 153. Price evaluation preference
With regards to the application of existing HUBZone price
preferences to international food aid procurements conducted
by the United States Department of Agriculture (USDA),
Congress concludes that the preferences as they currently
stand are hindering the goals of U.S. foreign humanitarian
food assistance programs. This view is supported by extensive
consideration of market data from the Kansas City auction
office of the USDA Farm Service Agency, the structure of
auction tenders and other auction processes, as well as data
supplied by the industry. It appears that there is a risk of
various unintended and undesirable consequences to applying
the current HUBZone mandate to international food aid
acquisitions. In particular, it appears that, in the context
of food aid tender auctions, the claimed job gains fostered
by the current price preference are offset by job losses in
other communities, the non-HUBZone small businesses
attempting to compete may experience undue harm, and the
competitive supplier base may atrophy. In turn, this may
undermine USDA's capacity to secure adequate foodstuffs for
malnourished persons and increase the costs to the food aid
programs without realizing adequate jobs creation and
business development benefits.
The HUBZone price preference alternative adopted in this
act (a 5 percent price evaluation preference on 20 percent of
the contract) would alleviate these potentially damaging
effects on the U.S. food aid system. Congress believes that
this approach would preserve the HUBZone program's goal of
providing HUBZone-eligible companies with a meaningful
opportunity to compete while ensuring that the USDA has an
adequate capacity of supply from which to draw to deliver
emergency food aid in catastrophic situations. This approach
would also eliminate the current HUBZone program's
application problem which directly penalizes non-HUBZone
small businesses due to the nature of the food aid auctions.
The potential for job losses in other communities would be
limited. Importantly, this approach also reflects the
cornerstone of America's efforts to provide food assistance
to the world's neediest people through competitive markets.
According to President Dwight D. Eisenhower and
congressional architects of the Small Business Act, an
overarching purpose of small business procurement programs is
to assure a vibrant, competitive supplier base for the
federal government. Price preferences are employed to further
this purpose, and should be structured accordingly. Congress
notes that, in general, price preferences have been a
valuable tool for encouraging a more robust supplier base.
Nevertheless, Congress believes that, in these very special
circumstances, it is important to encourage competition by
keeping multiple vendors actively bidding in our food
assistance programs to secure the lowest cost procurement
and emergency supply chains in
the case of humanitarian crisis. This approach builds on
the current small business 10 percent set-aside by an
additional 20 percent allocation of every tender to small
businesses and HUBZone applicants. It guarantees full and
open competition, including competition pursuant to the
Small Business Act, in food aid procurement tenders to
assure that U.S. food aid programs do not suffer
consequences inconsistent with the intent of the price
preference program. The approach in this legislation
safeguards the dual interests of a vibrant small business
presence in federal procurements and robust food aid
programs.
Section 154. HUBZone authorizations
Congress notes that the federal government has failed to
meet its statutory HUBZone contracting goals every single
year these goals have been in effect. Continuous, dedicated
authorization of the HUBZone program is essential to continue
the effort to bring economic opportunities to the HUBZone
areas. Therefore, Congress extends the current authorization
of appropriations of $10,000,000 for the SBA's HUBZone
program through Fiscal Year 2006.
Section 155. Participation in federally funded projects
Section 155 removes the burdensome paperwork requirements
for additional certification by firms seeking to perform any
State, or political subdivision projects that utilize federal
dollars if they are currently certified, or otherwise meet
the applicable qualification requirements, for participation
in any program under Sec. 8(a) of the Small Business Act.
This change will: (1) provide federally certified Sec. 8(a)
small businesses with access to all State and local projects
funded in whole or in part by the federal government; (2)
eliminate the burden of requiring Sec. 8(a) small businesses
to get certifications from the State or local government or
both in addition to their federal certification under
Sec. 8(a); and, (3) decrease certification costs and
eliminate time delays associated with the burden of receiving
additional state or local government certifications for
businesses authorized to participate in program established
by Sec. 8(a) of the Small Business Act.
Section 161. Supervisory enforcement authority for small
business lending companies
This section creates a new Sec. 23 of the Small Business
Act. It gives the Administrator specific enforcement and
supervisory authority over Small Business Lending Companies
(SBLCs) and Non-Federally Regulated SBA Lenders as those
terms are defined in Sec. 162 of this conference report. The
vast majority of lenders authorized to make loans pursuant to
the Small Business Act have their lending and other
activities overseen and regulated by federal financial
regulators, including loans and corporate transactions
related to their general lending practices. The Administrator
makes no effort at regulating lending institutions except for
their authority to make Sec. 7(a) loans.
In contradistinction, there are a few institutions that are
authorized to make loans pursuant to Sec. 7(a) of the Small
Business Act that are not typical lending institutions. SBLCs
(except for two which are wholly-owned by national banks) are
subsidiaries of industrial corporations and thus not subject
to any regulation by financial regulators, other than certain
filings made with the Securities and Exchange
Commission. Non-federally regulated SBA lenders have some
state oversight but the extent varies according to state
law. The only authority that the Administrator has with
respect to these lenders is the ability to prohibit them
from making loans pursuant to Sec. 7(a). The Administrator
has no authority to take other regulatory action, similar
to that available to banking regulators, to protect the
public and the federal treasury. Congress concurs with the
Administrator's request that greater authority is needed
to regulate SBLCs and Non-Federally Regulated SBA Lenders.
The basic approach adopted by Congress enables the
Administrator to supervise the soundness and safety of
institutions authorized to make loans pursuant to Sec. 7(a)
but are not otherwise subject to the strict oversight imposed
by federal financial regulators. Congress concurs with the
Administrator's request that specific enforcement and
supervisory authority are needed. These authorities include
the power to: issue cease and desist orders, impose civil
money penalties, mandate capital standards, and remove
officers and directors who are acting in an unsafe and
unsound manner. The power and authority tracks closely the
powers granted to the Administrator with respect to
regulation of SBICs and their officers and employees. In some
cases, Congress differentiated regulatory powers applicable
to SBLCs and those applicable to Non-Federally Regulated
Lenders. Nothing in this section grants the Administrator the
authority to be extended to overall corporate management of
the parent that owns a SBLC.
Congress provides for the Administrator to issue capital
directives mandating maintenance of certain capital
standards, including the requirement to increase its level of
capital. The section also authorizes the Administrator to
issue cease and desist orders by the SBLC or Non-Federally
Regulated Lender. To ensure that the capital directive is
used sparingly and only in appropriate circumstances, the
Administrator is required to promulgate regulations on
capital directives and may only delegate the authority to the
Associate Administrator for Capital Access.
The Administrator also is empowered to suspend or remove
officials that have management responsibility for the
entity's lending pursuant to Sec. 7(a) of the Small Business
Act. No authority, explicit or implied, is authorized to
remove or suspend officials that do not have management
responsibilities with respect to Sec. 7(a) lending. Thus,
Congress expects that the Administrator take action not to
suspend the Chief Executive Officer of General Electric
Corporation but only its SBLC subsidiary.
Prior to the issuance of any order under this section
except for a capital directive, the Administrator is required
to provide any target of the order a hearing pursuant to
Sec. Sec. 554, 556, and 557 of the Administrative Procedure
Act. The section delegates the responsibility of conducting
the hearing to administrative law judges but the final
responsibility on determining whether an order should issue
rests with the Administrator based on the record developed at
the adjudication. The approach is similar to that used by
independent federal regulatory agencies such as the Federal
Communications Commission or Federal Trade Commission. Those
agencies use administrative law judges to conduct hearings
and the commissioners use that record as the basis for their
legal and policy determination. This bifurcation of the
hearing from the decisionmaker ensures that the hearing will
be fair and provide an opportunity for the target of an order
to make the best possible case before an impartial fact-
gathering tribunal.
The Administrator is authorized to issue orders prior to a
hearing if extraordinary circumstances exist and the order is
needed to protect the financial or legal position of the
United States. The Administrator only should use the power to
issue orders without a hearing only under those circumstances
in which an agency issues a rule without notice and comment,
i.e., a truly exigent circumstance, see, e.g., NRDC v. Evans,
316 F.3d 904, 912 (9th Cir. 2002); Utilities Solid Waste
Group v. EPA, 236 F.3d 749, 754 (D.C. Cir. 2001) (good cause
to forgo notice and comment applies only in emergency
circumstances), or when a federal court would issue an ex
parte temporary restraining order (but in order to preserve
and protect the federal government rather than the status
quo). Cf. Granny Goose Foods, Inc. v. Brotherhood of
Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974)
(noting that ex parte restraining orders necessary evil to
protect status quo). The section then provides that the
procedures for holding a hearing, including the notice
requirement, be commenced within 2 days after the issuance of
the order. Congress believes that this comports with the
fundamental fairness exhibited by federal courts when issuing
an ex parte temporary restraining order.
Congress' approach defines final agency action for purposes
of a challenge to the issuance of an order by the
Administrator and authorizes that a challenge may be
commenced in federal court within 20 days after issuance of a
final order. For purposes of fundamental fairness to
individuals, Congress also believes that interim relief in
federal court is appropriate for a stay of an order issued
prior to hearing until the hearing itself is completed. Both
of these provisions were added out of an abundance of
caution. Although Congress believes that federal court
jurisdiction challenging the Administrator's action may
constitute a ``federal question'' pursuant to Sec. 1331 of
the Title 28, United States Code, Congress determined that
explicit authority to challenge the Administrator's orders in
federal court removes any question that this decision has
been remitted solely to the discretion of the agency and is
not subject to review under Heckler v. Chaney, 470 U.S. 821
(1985).
This section authorizes a court to appoint a receiver for
the entities subject to regulation pursuant to this section.
The receiver is entitled to take possession of assets of the
SBLC or Non-Federally Regulated SBA Lender. Congress intends
this authority to extend only to the SBLC or Non-Federally
Regulated Lender's portfolio of loans or other instruments
guaranteed by the Administrator including any debentures,
participating debt, or securities issued pursuant to the
Small Business Investment Act.
Congress believes that suspension, revocation, or cease and
desist is an extraordinary remedy. Each requires an extremely
high burden of proof related to willful misconduct that may
present a difficult case for the Administrator to prove.
Therefore, the bill also provides the Administrator with the
authority to seek court-imposed civil penalties for the
failure to file reports required by the Administrator. Such
penalties shall issue when the failure to file is willful and
not due to neglect. The failure to file required reports for
more than two reporting periods is, in the opinion of
Congress, sufficient, but not the only evidence of willful
neglect. Congress expects the Administrator to promulgate
regulations outlining the factors that determine willful
neglect for the purposes of civil penalties (as an aid to the
entities regulated pursuant to Sec. 23). These regulations
also must contain standards for exempting SBLCs and Non-
Federally Regulated Lenders from the civil penalty provisions
as well as the procedures used for determining whether the
institution qualifies.
Section 162. Definitions relating to small business lending
companies
Almost all of the lenders authorized by the Administrator
to issue guaranteed loans pursuant to Sec. 7(a) are lending
institutions regulated by a federal financial regulator.
However, there are a few institutions that make guaranteed
loans that are not subject to federal financial regulatory
oversight or regulation by a state banking authority. The
Administrator classifies these institutions generically as
``small business lending companies.'' However, that universe
actually consists of two separate entities--small business
lending companies (not financial institutions) and financial
institutions not subject to any agency authorized to review
the safety and soundness of depositary institutions. Since
Sec. 161 adds a new Sec. 23 granting the Administrator power
to regulate these entities, Sec. 162 adds two new subsections
to the definitions in the Small Business Act defining small
business lending companies and non-federally regulated SBA
lenders.
Section 201. Amendment to definition of equity capital with
respect to issuers of participating securities
Congress determined that changes were needed in the
definition of equity capital with respect to any company that
issues participating securities. Such companies,
participating securities SBICs, commit to invest an amount
equal to the outstanding face value of participating
securities solely in equity capital. Equity capital refers to
common or preferred stock or a similar instrument, including
subordinated debt with equity features. Equity capital issued
by participating securities SBICs previously provided for
interest payments to be made to the Administration contingent
upon--and limited to--the extent of earnings on equity
capital. However, since the inception of the Participating
Security SBIC program, the majority of SBICs have not
realized sufficient profits with which to meet their
financial obligations to the federal government. This has
resulted in serious financial loss for the federal
government. In order to mitigate these losses, the definition
of equity capital has changed so that participating security
SBICs do not have to realize profits on their investments in
order to make payments to the Administration. If a
participating security SBIC is experiencing overall losses on
their investments but has other sources of funds such as
invested excess funds, royalty payments, licensing fees and
the like, Congress intends that these funds may be used to
meet their obligations to the Administration.
Section 202. Investment of excess funds
This section provides SBICs with additional flexibility for
handling funds prior to investments in small businesses by
allowing SBICs to invest such funds in additional types of
securities. Currently, SBICs holding cash, prior to investing
in a small business, are only permitted to invest directly in
obligations of the United States, obligations guaranteed by
the United States, or in certificates of deposit maturing
within one year or savings accounts that are in institutions
insured by the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation. This section
modifies the current restriction by permitting SBICs to
invest in securities, mutual funds, or instruments, which
themselves invest solely in the obligations that are
currently permitted. For instance, Congress expects that
SBICs will be able to invest in mutual funds that, in turn,
invest in the government-backed obligations already
authorized for investment in SBICs. Congress believes that
this modification will provide SBICs with greater flexibility
and a wider range of short-term investment options.
Section 203. Surety Bond Amendments
Section 203(a) clarifies that the current $2 million limit
on surety bonds applies to the bond guarantee and not the
contract size. Congress adopted this clarification to
prohibit contracting officers from determining that small
businesses would not qualify for an Administration-backed
surety bond for a contract worth less than $2 million even
though it was part of a bundle of contracts that exceeded $2
million. For example, a small business might be denied a
surety bond if the small business had a contract for $1.5
million, but that contract was part of a $12 million bundle
of contracts that had been awarded simultaneously.
Section 203(b) requires that an audit of each participating
surety shall occur every three years instead of annually.
This reduction in the frequency of audits will save
participating sureties time and money and allow them to
allocate these resources to more productive uses. In
addition, this will enable the Administrator to focus on more
critical elements since the sureties already provide reports
on a periodic basis that would identify problems during the
interregnum between audits.
Currently certain sureties designated by the Administrator
may issue, monitor, and service surety bonds issued pursuant
to Title IV of the Small Business Investment Act. This
authority ceased to be operative on September 30, 2003 (but
has been extended for short periods of time on a temporary
basis). Congress determined that the authority for this
program should be made permanent. Section 203(b) makes that
change by repealing 207 of the Small Business Reauthorization
and Amendment Act of 1988.
Section 204. Effective Date of Certain Fees
Loans made pursuant to Title V of the Small Business
Investment Act do not require any appropriation. Fees charged
to borrowers and CDCs absorb the costs associated with the
issuance of such loans. When the zero-subsidy for the program
was instituted, Congress made the fee authority temporary to
see whether the program could survive without an
appropriation. The program has succeeded admirably and
Congress does not expect that an appropriation to fund loans
made by CDCs will be made for the foreseeable future. As a
result, Congress determined it was pointless to continue, as
temporary, the Administrator's authority to charge fees for
loans made pursuant to Title V of the Small Business
Investment Act. Section 204 grants the Administrator
permanent authority to charge fees.
