Waiving points of order against the conference report to accompany the bill (H.R. 4818) making appropriations for foreign operations, export financing, and related programs for the fiscal year ending September 30, 2005, and for other purposes, and providing for consideration of the joint resolution (H.J. Res. 114) making further continuing appropriations for the fiscal year 2005, and for other purposes.

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.

Pursuant to House Resolution 866, I call up the conference report on the bill (H.R. 4818) making appropriations for foreign operations, export financing, and related programs for the fiscal year ending September 30, 2005, and for other purposes, and ask for its immediate consideration.

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

Mr. Speaker, the bill we bring to the floor today is a conference report on the omnibus appropriations bill which includes nine bills that were not concluded prior to the end of the fiscal year. The good news is that the House had passed every one of our bills but one. And the other good news is that this bill concludes the appropriations business for fiscal year 2005.

I compliment the Committee on Appropriations on both sides of the aisle. I compliment the Members of the House for having moved all of our bills expeditiously; but this will conclude our business, and now the 109th Congress can start fresh, with a new budget resolution, hopefully, and a new appropriations process.

The bill that we are discussing today has already been discussed in great detail during consideration of the rule. The bill itself has been available for more than 14 hours for Members to review, and there is a 10-page summary on all of the desks that is available so Members can look at the highlights of the bill.

Considering the fact that we had to include nine bills here, and some extraneous material, this is a pretty good bill. It is a clean bill. It is a lean bill. It is within the budget limitations set by the House and set by the President; and so I would just hope, Mr. Speaker, that we can conclude this work and move on to whatever is next.

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Highlights of the Final FY05 Spending Bills

The final spending package fully complies with the spending

targets agreed to by the Congress and the Administration,

totaling $821.9 billion in FY05 Discretionary spending. This

represents a freeze or zero percent growth in non-defense

discretionary. Total discretionary spending in the bill is

$388.4 billion. All additional spending is paid for by an

across the board cut of .80% in all non-defense and non-

homeland security spending, $300 million rescission in non-

war, non-emergency defense funds, $283 million from

limitations on expenditures from the Crime Victims Fund. All

figures listed below are subject to a .80% reduction. The

bill drops provisions relating to overtime regulations and

the Administration's competitive sourcing initiative.

``This is a lean and clean package that adheres to the

budgetary limits agreed to by the Congress and the President.

We have resisted many requests for additions to the package

that would have busted the budget by billions of dollars. The

bill also is free of controversial legislative riders. The

only provisions that were included had bipartisan, bicameral

support,'' said C.W. Bill Young, Chairman of the House

Appropriations Committee.

Agriculture

Bill Highlights: In total, the bill provides nearly $17

billion in total discretionary resources. This level

represents an increase of $393 million over the President's

request and nearly $123 million over the FY04 enacted level.

FY 04 Funding Level: $16.84 billion ($69.746 billion total

mandatory).

FY 05 President's Request: $16.57 billion ($66.370 billion

total mandatory).

FY 05 Bill: $16.96 billion ($66.294 billion total

mandatory).

Protecting Human Health and Safety:

Food Safety and Inspection Service is increased by $44

million over last year, for a total of $824 million, $15

million below the President's request.

Animal and Plant Health Inspection Service activities are

funded at $98 million above last year for a total of $820

million, and a decrease of $14 million below the President's

request. This includes an increase of $33 million for an

animal identification system.

Food and Drug Administration is funded at $1.462 billion,

$76 million above last year and $33 million below the

President's request. This includes the full amount requested

for the medical device program.

Bovine Spongiform Encephalopathy (BSE) detection and

prevention activities are increased $20 million, the same as

the President's budget request.

Fulfilling Commitments to Important Food and Nutrition

Programs:

Child Nutrition Programs (Mandatory) are funded at $11.8

billion, $365 million above last year and $406 million above

the President's request.

Special Supplemental Nutrition Program for Women, Infants,

and Children (WIC) is funded at $5.3 billion, $666 million

above last year and $190 million above the President's

request.

Food Stamp Program (Mandatory) is funded at $35.2 billion,

an increase of $4.2 billion above last year and $1.5 billion

above the President's request.

Food for Peace Program (PL 480) Title II is funded at a

program level of $1.18 billion, a decrease of $2.5 million

below the President's request and last year's level.

Commodity Supplemental Food Program (CSFP) is funded at

$108 million, an increase of $9 million above last year and

the President's request.

Supporting Farmers, Ranchers, and Rural America:

Farm Service Agency salaries and expenses are funded at

President's request of $1.008 billion, an increase of $25

million above last year, to continue delivery of farm

programs.

Agricultural Research Service is funded at $1.299 billion,

an increase of $153 million above last year's level and $133

million above the President's request. Funding of $122

million is included for construction of the National Centers

for Animal Health.

Conservation Operations activities are increased by $127

million over the President's request, bringing FY05 funding

to $837 million, and a decrease of $11 million below last

year.

Rural Community Advancement Program (RCAP) is funded at

$716 million, a decrease of $37 million below last year and

an increase of $174 million above the President's request.

Included in the increase is an additional $111 million for

rural water and waste grants above the President's request.

fy05 commerce justice state

Funding Levels:

FY05 Funding: $40.0 billion.

FY05 President's Request: $39.6 billion.

FY04 Funding: $37.6 billion.

Provides a total of $20.6 billion for the Department of

Justice, $975 million above FY04 and $804 million above the

President's request, including the following:

$5.22 billion for the Federal Bureau of Investigation, an

increase of $625 million above FY04 and $100 million above

the President's request. This funding provides enhanced

training, information technology, and staff (1,194 new

positions) to improve intelligence and counterterrorism

capabilities, while continuing to fight white-collar and

violent crime.

$1.65 billion for the Drug Enforcement Administration, an

increase of $69 million above FY04 and $8 million below the

President's request.

$758 million for the United States Marshals Service, an

increase of $32 million above FY04 and $14 million above the

request, to meet protection requirements of the Federal

judiciary and to enhance fugitive apprehension activities.

$890 million for the Bureau of Alcohol, Tobacco, Firearms

and Explosives, an increase of $63 million above FY04 and $21

million above the President's request.

Provides $3 billion for assistance to State and local law

enforcement for crime fighting initiatives, $906 million

above the President's request and $132 million below FY04

including:

$634 million for the Edward Byrne Justice Assistance Grants

program (as authorized by H.R. 3036); $384 million for

juvenile delinquency prevention and accountability programs,

$387 million for violence against women prevention and

prosecution programs, $110 million to eliminate DNA analysis

backlogs, $139 million for law enforcement technologies, and

$305 million to reimburse States for criminal alien detention

costs.

Department of Commerce and Related Agencies receives $6.7

billion, $761 million above FY04 and $645 million above

President's request including:

$1.54 billion for the Patent and Trademark Office to reduce

the growing backlog and increase quality of patent

processing, $322 million above FY04 and $21 million above the

request.

$3.94 billion for the National Oceanic Atmospheric

Administration (NOAA), $239 million above FY04 and $567

million above the request, including $791 million for the

National Weather Service, the full request, to improve

forecasting.

$709 million for the National Institute of Standards and

Technology (NIST), including $109 million for the

Manufacturing Extension Partnership (MEP) program.

$755 million for the Census Bureau, including $146 million

for the American Community Survey (ACS).

Federal Judiciary: Provides $5.16 billion for the Federal

Judiciary, $315 million above FY04, to process increased

workload, including an all-time high number of criminal cases

and bankruptcy filings, and for supervision of an increasing

number of offenders by probation officers.

State Department and the Broadcasting Board of Governors

receives $8.8 billion, $704 million above FY04 (excluding

supplemental appropriations).

Includes $1.6 billion to continue worldwide security

improvements and replacement of vulnerable embassies.

Provides $4.2 billion for Diplomatic and Consular Programs

to fund the operating costs of the Department, which is $165

million above FY04, to respond to diplomatic requirements in

Haiti, Libya, and Afghanistan; strengthen visa adjudication

and border security, and increase public diplomacy activities

in the Arab and Muslim world.

Provides $1.67 billion for Contributions to International

Organizations and International Peacekeeping Activities to

fund anticipated assessments for the UN and other

international organizations.

Provides $600 million for International Broadcasting to

expand broadcasting to the broader Middle East.

Provides $60 million for the National Endowment for

Democracy, $20 million above the FY04 level.

Other Items of Interest:

Federal Communications Commission (FCC) Bill includes $281

million, $7 million above FY04.

Securities and Exchange Commission (SEC) Bill includes

total budget authority of $913 million, $102 million above

FY04 and the same as the request.

Legal Services Corporation (LSC) Bill includes total budget

authority of $335 million, the same as last year.

Small Business Administration (SBA) Bill provides $580

million for the SBA, and supports a record 7(a) business loan

program level to help America's small businesses access

capital.

fy 2005 energy and water development appropriations

Funding Levels: The Chairman's mark provides a total of

$28.0 billion in new discretionary spending authority for the

U.S. Army Corps of Engineers-Civil, the Department of

Interior including the Bureau of Reclamation, the Department

of Energy, and several Independent Agencies. This bill is

$734.5 million above fiscal year 2004 and $49.6 million above

the President's budget request.

Corps of Engineers: The conference report supports a

vigorous Civil Works program. The recommendation of $4.7

billion is $125 million over fiscal year 2004.

Bureau of Reclamation: The Chairman's mark provides funding

necessary to maintain, operate, and rehabilitate Bureau

projects throughout the western United States and protect the

considerable Federal investment in western water

infrastructure. Funding for the Bureau of Reclamation is $1

billion, $40 million over last year's level.

Department of Energy: The recommendation of $23 billion for

the Department of Energy is $145 million under the

President's request and $1 billion above fiscal year 2004.

The Committee funds the Yucca Mountain repository at last

year's level of $577 million and does not include the

proposed authorization language to reclassify the fees paid

into

the Nuclear Waste Fund or the radiation standard language.

The Power Marketing Administrations are funded at $210.5

million, the same as the President's request and $1.2 million

below last year. Reimbursable purchase power and wheeling

activities are maintained at the fiscal year 2004 levels.

The National Nuclear Security Administration (NNSA), which

includes the nuclear weapons program, defense nuclear

nonproliferation, naval reactors and the office of the

administrator, is funded at $8.8 billion, an increase of $156

million over last year. Funding of $6.5 billion is provided

for Weapons Activities; $1.42 billion for Defense Nuclear

Nonproliferation programs;

Foreign Operations

FY04 Enacted: $17.5 billion.

FY05 President's Request: $21.4 billion.

FY05 Bill: $19.8 billion.

Addressing the AIDS Pandemic: Provides a total of $2.3

billion in global assistance to combat HIV/AIDS, tuberculosis

and malaria, $99 million above the President's request and

$690 million more than FY04. Within this $2.3 billion, $858

million is provided for bilateral assistance through the

Child Survival and Health Programs Fund and $1.385 billion is

provided to the Global AIDS initiative. $600 million in

global assistance is anticipated in the Labor-HHS

appropriations bill, bringing total funding to $2.9 billion,

$99 million above the president's request and the highest

level in history.

An Innovative Approach to Foreign Assistance:

The bill provides record level funding the President's

signature foreign assistance initiative, the Millennium

Challenge Corporation. Total funding is $1.5 billion, $500

million above last year.

Supporting the Global War on Terror: The bill provides

significant increases in security assistance to our allies in

the global war on terrorism. It also increases resources for

our anti-narcotic programs abroad.

Provides $73 million increase for Foreign Military

Financing for Israel to assist in their security and counter-

terror efforts. Total funding is $2.2 billion, the same as

the President's request. Also fully funds the President's

$360 million request for economic assistance to Israel.

The bill provides an increase of $350 million, for a total

of $400 million to train and equip the new Afghan National

Army.

A new base program of $300 million for military assistance

for Pakistan as they assist us in hunting terrorists along

the Afghan border.

Fully funds the President's $1.3 billion request for

Foreign Military Financing for Egypt. Also fully funds the

President's $535 million request for economic assistance to

Egypt.

International Narcotics Control is funded at $329 million,

$89 million above last year and $30 million below the request

and fully funds the President's request for Mexico and

Afghanistan.

The Andean Counter drug Initiative is funded at $731

million, the same as the President's request.

Other Items of Interest:

Provides $403 million in humanitarian and refugee

assistance for Sudan. Including $93 million as an emergency

appropriation, $75 million of which is for logistical and

equipment support of the Africa Union Security Force. $95

million in humanitarian assistance was provided earlier this

year in the FY05 Defense appropriations bill.

Includes $800 million for refugee programs, $50 million

more than the President's request and $14 million more than

last year's level.

Provides $441 million for bilateral international family

planning programs, and $25 million for the UNFPA. Retains

current law on restrictions and prohibitions on assistance.

Peace Corps is funded at $320 million, $12 million above

FY04 and $81 million below the President's request.

Total funding of the Agency for International Development

(USAID) is $4.2 billion, $221 million above the request and

$254 million less than FY04.

The U.S. contribution to the multilateral development banks

are funded at a level of $1.2 billion, $264 million less than

the request and $154 million less than last year.

The Global Environment Facility (GEF) is funded at $108

million, $13 million below the President's request and $31

million below last year.

Mr. Speaker, I yield for the purpose of a unanimous consent request to the gentleman from New York (Mr. Walsh).

(Mr. WALSH asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Burton) for the purpose of a colloquy.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I would be happy to do that.

Mr. Speaker, if the gentleman would yield, I thank the gentleman for his inquiry, and I can assure the gentleman from Indiana that this bill contains no provision that would impede the right of families with vaccine-injured children from having their day in court.

Mr. Speaker, if the gentleman will continue to yield, again, I appreciate the gentleman from Indiana's personal and deeply felt concerns, and I can assure him that nothing in the bill before the House alters, changes or reforms the structure, rules, procedures, or operation of the National Vaccine Injury Compensation Fund.

Mr. Speaker, I yield such time as he may consume to the gentleman from Virginia (Mr. Wolf).

(Mr. WOLF asked and was given permission to revise and extend his remarks.)

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

Mr. Speaker, I yield 1 minute to the gentleman from Missouri (Mr. Blunt), the distinguished majority whip.

Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Thomas) for the purpose of a colloquy.

Mr. Speaker, the gentleman is correct. The Committee on Appropriations needs access to IRS field facilities to do our oversight work. That work does not require the Committee on Appropriations to review individual tax returns under section 6103, but it does require access to the facilities.

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Kirk), for the purpose of a colloquy.

Yes, Mr. Speaker, this language was to have been included in the conference report and inadvertently was not. But the gentleman is correct.

Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. DeLay), the very distinguished majority leader.

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

First I would like to make this announcement, that following the vote on this omnibus appropriations bill, there will be a vote on a continuing resolution. The CR that we are operating under today expires at midnight tonight. So in order for us to have time to move this bill from the House to the Senate and go through the enrolling process and get it transmitted to the President's office and give the President time to review it and OMB time to

review it, we thought we should do a CR just to make sure that there were no difficulties. We will take that CR up right after we pass this.

As my colleagues have heard, because of term limits on the Republican side of the House, this chairman will be term-limited at the end of this Congress and will not be chairing the Full Appropriations Committee. But I wanted to say as I depart this post that it has been a real honor to serve in this capacity. It has been a tremendous challenge. There have been days when I almost wished I was back in the minority. But nevertheless it has been a good work.

The gentleman from Wisconsin has been the ranking member during the 6 years that I have chaired the committee. He and I have had some very strong differences, but we have also had some very strong agreements. Regardless of whether we agreed or disagreed, whether we were happy or unhappy with the situation, we were able to conduct the business of the House, I think, with respect for the institution.

I yield to the gentleman from Wisconsin.

I appreciate the gentleman's comments. I want him to know, I am not going anywhere. I plan to be back with all our appropriations bills as we proceed.

I would like to call attention to all of the members of the Appropriations Committee on both sides because this is a working committee. I know that in some cases the committee is really admired and respected and appreciated. In other cases we are probably sort of hated on occasion, but nevertheless we have the responsibility of adopting legislation that is must-pass legislation. Without the appropriations bills, the government does not function. The committee has worked really well, and I am proud of the committee. I am proud of the members. I am proud of the staff. We have great staff. I want to call particular attention to, and there are too many to refer to everybody by name today, but the front office staff, the main staff headed by the clerk of the committee, Jim Dyer, and his very, very able assistants, John Blazey, and Therese McAuliffe and Dale Oak, and I do not know of anybody who knows more about the numbers in these bills than Dale Oak, and John Scofield and Doug Gregory who is the man who I rely on considerably to make sure that I am in touch with everything that is happening to the best of our ability. We have a really great staff and they work together very well.

The gentleman from Wisconsin has a very great staff on the minority side. We do our very best to make sure that we do not have any surprises for them, and they have been very good about not having any surprises for us. We are open and honest with each other and that is, I think, important to the type of work that we are responsible to do.

I appreciate the gentleman's comments. I wanted to make particular mention of the staff for the Energy and Water subcommittee. I think everybody understood that Energy and Water was not going to be in this bill, that there were great difficulties in Energy and Water, and so it was going to be on a long-term CR.

Senator Stevens and I were determined that that was not going to happen, and we worked really hard with the House, both sides of the House, both sides of the Senate. We were finally able to get agreement to include the energy and water in this package. So this bill includes everything. That is why it is so big. It is nine bills. That is why the stack is so high.

But the Subcommittee on Energy and Water Development staff only had 2 days to prepare this legislation and to write it and to read it and to get it fit into the bill. And these 2 days they went 48 hours without a break, without sleep, with an occasional snack and something to drink. But they really worked hard because they were only given 2 days to get their work done.

As we conclude the business of the Congress, as we conclude the appropriations business, I wish that I was able under the House rules to say what a great honor it is to work with the chairman of the Appropriation Committee in the Senate. Senator Stevens, while he is a tough negotiator and he takes really good care of Alaska, he is a good, honest guy, and he is good to work with, and I appreciate him very much.

And Senator Byrd, it is an experience to work with Senator Byrd as the ranking member. He is such a distinguished gentleman and is very knowledgeable about what it is that we do here.

So as we close the session and close this bill, I want to wish everybody a very safe and happy return to their homes and Thanksgiving, Christmas, Hanukkah, New Year's, and whatever other celebrations that we might have between now and the time we come back together. And I would like everyone, as they recognize all of these holidays and they remember and they enjoy their family times together, to think about our troops. Think about our Americans who are deployed overseas in harm's way and their families and just give them a little extra prayer for their safety and a successful completion of their mission.

Mr. Speaker, God bless everybody in this institution.

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

Announcement by the Speaker pro tempore

Mr. Speaker, I yield myself 3\1/2\ minutes.

Mr. Speaker, I will reserve my comments on the contents of this bill for a later point in the proceedings; but right now, I would simply like to say two things.

First of all, I want to express my great admiration and appreciation for the gentleman from Texas (Mr. Frost) who handled the rule on this bill. It was the last time he will do so in this House. Martin Frost has provided his district, his State, the country, and this institution with a superb record of public service. I honor him for it. They could not beat him on the square, so they had to rig the reelection lines; but he has served his district with great dignity, with great ability. His mentor, when he first came here, Dick Bolling, would be very proud of him; and I know we are all proud of him.

I also would like to say with respect to the gentleman from Florida (Mr. Young), the chairman of the committee, the budget resolutions usually come to this floor, they are vague, they have large generic numbers; but after they are passed, then the appropriations legislation has to translate those resolutions into reality and into specifics. At that point, we get many Members who have voted for those budget resolutions then writing us letter after letter after letter on the committee demanding that we increase funding for this program or that program or another. They do it for LIHEAP. They do it for NIH. They do it for health programs, for agriculture. The gentleman from Florida (Chairman Young) has the job of cutting through that hypocrisy; and he has tried to do so many, many times.

Bill Young to me epitomizes what the American dream is all about. Bill Young grew up in hardscrabble circumstances in Pennsylvania. He rose from serious poverty. He became the first Republican to serve in that State senate in Florida. He was the only Republican serving the first year he went there, and he has thrived and prospered; and now he is completing his service as the chairman of the Committee on Appropriations.

I simply want to say, representing the minority, that Bill has recognized that when you are a chairman of a committee, you have a different responsibility than you do when you are an individual Member of this House. You have separate and sometimes conflicting obligations to your country, to the Congress itself, to your committee, to your district, to your State and to your party, in that order.

The gentleman from Florida has always tried to exercise those responsibilities. He has done it with charm and grace and fairness, and I would simply say that the fact that he will no longer be chairman of the committee after this year is a greater loss to the House itself than it is to him, and I think we all owe him a round of applause for his stewardship.

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

Mr. Speaker, I ask unanimous consent to revise and extend my remarks later in the proceedings and to include immediately after my remarks charts and other extraneous material.

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer), the distinguished minority whip.

Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. George Miller).

(Mr. GEORGE MILLER of California asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1 minute to the gentlewoman from California (Ms. Pelosi), the minority leader, who has some scathing remarks she wants to utter about the chairman of the committee.

Mr. Speaker, I yield for purposes of a unanimous-consent request to the gentleman from Minnesota (Mr. Oberstar).

(Mr. OBERSTAR asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself 14 minutes.

Mr. Speaker, this is a sad bill. There are countless good reasons to vote against it. In fact, this bill is a poster child for institutional failure. That is true for several reasons. First of all, because the nine appropriation bills which are wrapped into this early Thanksgiving turkey should have been dealt with by the House months ago.

Secondly, it is totally inadequate to meet the Nation's needs in education, health care, and the environment. It falls so far short from meeting our investment obligations for the future that it could only be brought to the floor by the majority party after the election.

Third, there are things that have been added in this omnibus bill which have never been voted on by anybody. Some of them are reasonable; some of them certainly are not. An example, Republicans chose to take this opportunity to slip a number of anti-environmental provisions into this bill which I will list in full in my extended remarks.

Fourth, the Republicans have taken out several provisions that were supported by the majority of this body and should have been retained. I will again expand more fully on them in my extended remarks, but those provisions include eliminating the contracting-out provision, the bipartisan Chabot-Andrews amendment prohibiting road building in the Tongass National Forest, provisions to ease the economic embargo on Cuba, the Sanders cash-balance pension plan amendment, the MILC reauthorization bill which the President twice claimed to favor, and they also stripped out the language which would have protected 6 million workers from being chiseled on their overtime rights.

Another troubling feature of this bill is that it misleads people into thinking that funding for the programs in this bill is more generous than it actually is because it applies an across-the-board cut to the accounts in this bill, but it does not show the impact of those cuts on individual programs.

I have often quoted my friend Archie the cockroach and I am moved to do so once more in commenting on this action by the committee. Archie said once that ``man always fails because he is not honest enough to succeed. There are not enough men continuously on the square with themselves and with other men. The system of government does not matter so much; the thing that matters is what men do with any kind of system they happen to have.''

The problem we have today is there are all kinds of papers floating around this floor that profess to describe what is the funding provided for each of the programs provided in this bill, but they significantly overstate the amount of money in those accounts because the effect of the across-the-board cut is not counted.

I would also say that this bill is not here in a lame duck session because of any delaying action by the minority party. The record shows that the minority party has procedurally cooperated with the majority to bring all these bills to the floor. Of the 12 appropriation bills brought to the floor before the election, eight were expedited by unanimous consent agreements from the minority; four of the bills not considered under unanimous consent agreement were completed in a single day while the Labor-Health-Education bill took only two days.

Despite that procedural cooperation, even though they control both Houses of Congress and the White House, Republicans could not enact these bills. Why? Well, it was not because the majority party could not compromise with the minority; it was because the majority party could not compromise with itself. Why was that? Because rank-and-file members of the majority party, especially in the Senate, did not want to act on these bills with inadequate funding for education, health, science and environmental protection until they were safely past the election.

This bill shows some examples. This bill slashes funding for the EPA by $335 million. The biggest cut, $259 million, comes from the Clean Water State Revolving Fund, even though surveys have shown that we will confront a $388 billion investment deficit in that program alone over the next 20 years.

This Congress just finished doubling the NIH budget over the past 5 years, but NIH in the long run is heavily dependent upon basic initial research done by agencies like the National Science Foundation. Congress is on record supporting the need to double NSF funding, and yet the bill cuts funding for the NSF by $107 million below last year. This is the most Luddite provision in the bill.

Support for housing and community development block grant funding is so pitiful I cannot even talk about it. One of the most reckless actions is a $332 million cut to the FAA after the bill's across-the- board cut is taken into account. FAA will lose staff, including safety inspectors and air traffic controllers, and forgo needed safety technology improvements, all at a time when clogged and overcrowded airways make the skies dangerous.

But perhaps the most serious neglect of our responsibilities is reflected in what this bill does on education. Unbelievably, it cuts the President's request for title I education funding, the prime mover of education reform, by $607 million, almost 50 percent. It falls $482 million below the President's request for special education. It cuts funding for after-school programs by $25 million below the request and below last year's level, denying 1.3 million kids the educational opportunities they were promised in No Child Left Behind.

Flu vaccine. This Congress has still managed once again to cut the President's request for flu vaccine, by a small amount admittedly, but it is still $800,000 below the President's request.

On low-income heating assistance, despite the fact that the increased costs are expected to be 28 percent for home heating oil this year, this bill provides only half that increase in funding. That means a real reduction in assistance provided to the most vulnerable people in our society.

Let there be no doubt that if Democrats were running this place, this bill would look far different. In June, we had a vote on a bill that detailed our Democratic priorities, H. Res. 685. If that bill were before us today, we would be providing an additional $3 billion for homeland security, police, fire and emergency services, an additional $5.7 billion to strengthen education, an additional $2.3 billion to fully fund veterans health care and improve housing for military families and an additional $1.3 billion to improve health care by expanding community health centers, rural health clinics, mental and child health programs.

If today we were voting on the Democratic priority package rather than this bill, we would be providing $1.5 billion more for title I, serving an additional 500,000 low-income children so that they can meet the high standards of No Child Left Behind; we would be providing $1.2 billion more to serve the special education needs of 6.9 million children with disabilities; and we would be providing $2.2 billion more for Pell grants, increasing the maximum Pell grant to $4,500.

Based on the debate yesterday on the debt ceiling and on the majority leader's comments just a few moments ago, I know that some people on the other side of the aisle would claim that the Democrats' proposals to increase these investments in education, health, science and the environment would add to the deficit, but that is simply not the case.

If the Democrats' priority plan were before us tonight, this legislation would actually reduce the deficit by $5 billion because our priorities package would limit the jumbo-sized tax cuts for persons making over $1 million a year to the same amount provided to

other less fortunate Americans. It would redirect $14 billion of the money saved to crucial additional investments and would use the other $5 billion for deficit reduction. This bill would be at the same time more fiscally responsible and more humane than the bill brought before us tonight.

So Democrats have demonstrated what our priorities are. We have done everything we possibly can to improve the warped priorities of the majority budget, but the majority has rejected and defeated those efforts. At this point, we are at the end of the calendar, and we are out of options. We need to move on. At this point our choice is simply to continue to vote ``no'' as a protest for the misshapen priorities in the bill or to grudgingly vote ``yes'' because this bill is $4 billion closer to meeting our responsibilities than Congress would be if we turned this bill down and we had to live with a continuing resolution.

So, Mr. Speaker, I will reluctantly vote for this bill, but I will certainly not be leading the cheers because this body should have been able to do much better. I know the chairman of the committee and the various subcommittee chairmen have by and large done their best with what resources have been made available to them. That limitation has been imposed upon them by their own party leadership and by the White House. This bill could have been made much more humane and much more socially responsible by a relatively small adjustment.

$14 billion more for our top domestic priorities as we have in the Democratic priority package is a lot of money, but it pales in comparison to the $280 billion that this Congress passed out in tax cuts this year alone with so much of it aimed at high-end taxpayers. For only 5 percent of that amount that was provided in tax actions this year, so much of which has gone to the most privileged and well-off among us, we could have made responsible investments in the future and had bipartisan agreements in support of these bills long before the election.

One more point. In response to the majority leader's reshaping of history, to put it kindly, let me state what the facts are with respect to the national debt. The last President to balance a budget was Bill Clinton. The last President to balance a budget over his full term of office was President Truman. The last time I looked, they were both Democrats. The facts are also these: since 1946 at the end of World War II, under Democratic and Republican administrations alike and under a Democratic Congress for all of those years, from 1946 to 1979, the Nation's debt as a percentage of our total national income declined from 126 percent to 25 percent. In other words, we cut it by more than 75 percent. Then President Reagan came to power and he doubled that to 50 percent. Bill Clinton came to power and again brought that debt down.

In contrast to just a few years ago when Bill Clinton left office, in large part because of the actions of this Congress and this President, economists today are predicting deficits as far as the eye can see. That is why Democrats sought to improve investments in this bill, not in a free-lunch way, but by engaging on our own pay-as-you-go proposition in order to see to it that even as we increased crucial investments in the economy, we still were trying to keep some money available for deficit reduction. If the majority party were doing that, this bill would be a lot more palatable today.

Mr. Speaker, I will, as I said, reluctantly vote for this bill, but this bill is no great product. As the press finds out more and more about what the impact is on various programs, I think the Congress is going to wish that we spent considerably more time dealing with this in a rational manner.

Some examples of how the Omnibus would be different if Democratic priorities were being voted on today rather than the Republican majority's plan:

----------------------------------------------------------------------------------------------------------------

Issue H. Res 685--Democratic priorities FY 2005 Republican omnibus ---------------------------------------------------------------------------------------------------------------- Health care for veterans......... +$1.3 billion over the Republican -$235.1 million below the House

budget resolution to fully fund Republican budget resolution.

veterans' medical care at levels

advocated on a bipartisan basis by

the House Veterans' Affairs

Committee. Investments in education......... +$5.7 billion over the President's -$779 million below the President's

request. request. Title I.......................... +$1.5 billion over the President's -$607 million below the President's

request to support reading and math request.

instruction for 500,000 additional

low-income children. Child Care and After-School +$300 million over the President's $25 million below the President's Learning. request to double the number of request and last year's level.

children receiving quality after-

school care in five years. Special Education................ +$1.2 billion over the President's -$482 million below the President's

request to meet the promise the House request.

Republicans themselves made on

special education funding. Pell Grants...................... +$2.2 billion over the President's -$468 million below the President's

request to increase the maximum Pell request, freezing the maximum Pell

Grant by $450 to $4,500 for more than Grant at $4,050.

5 million low-income students. The

average public 4-year college tuition

has increased $1,400 (36 percent)

since 2001. ----------------------------------------------------------------------------------------------------------------

Public health ---------------------------------------------------------------------------------------------------------------- Infectious diseases and +$100 million over the President's Provides only $9 million over the immunizations. request to protect the public against President's request.

infectious diseases (like SARS, West

Nile Virus, tuberculosis, and AIDS)

and for child and adult immunization. ----------------------------------------------------------------------------------------------------------------

Health care and medical research ---------------------------------------------------------------------------------------------------------------- Core health ``safety net'' +$400 million over the President's -$32 million below the President's programs. request for community health centers, request, including -$103 million for

rural health clinics, mental and community health centers and -$12

child health programs. million for mental health programs. NIH research..................... +$500 million over the President's $170 less than the President's

request for health research in areas request.

such as liver cancer, SARS, breast

cancer, Parkinson's disease, and

Alzheimer's disease. National nursing shortfall....... +$35 million over the President's Provides only $4 million over the

request for the ``Nurse Reinvestment President's request.

Act'' authorization. Dental care...................... +$50 million over the President's No funding included.

request for dental services in rural

and other underserved areas. ----------------------------------------------------------------------------------------------------------------

Clean water standards and environmental protection ---------------------------------------------------------------------------------------------------------------- Land protection and preservation. +$325 million over the President's -$62 million below the President's

request for conservation programs request.

covered by the bipartisan commitment

reached in 2001. Water infrastructure............. +$500 million over the President's -$259 million below the FY 2004

request for the Clean Water State levels.

Revolving Fund. ----------------------------------------------------------------------------------------------------------------

Basic services in rural communities ---------------------------------------------------------------------------------------------------------------- Community assistance for refugees +$50 million over the President's Provides only $11 million over the

request for States and local President's request.

communities to offset the cost of the

dramatic influx of refugees

anticipated as result of the

Administration's commitment to permit

resumption of refugee flow to pre-

September 11 levels. ----------------------------------------------------------------------------------------------------------------

The best that can be said about this bill is that if it passes, it will provide $4 billion more than a Continuing Resolution.

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

Mr. Speaker, will the gentleman yield?

I would simply like to say that I have enjoyed very much the relationship between both of us. But I have enjoyed nothing in that relationship more than in the days after 9/11 when the gentleman and I worked so closely with each other, visiting all of the security agencies in town to discover what they needed. We worked arm in arm providing $40 billion when it was needed and seeing to it in the process that congressional prerogatives were protected. It was a great bipartisan experience. I wish that we had been allowed to continue that on many more fields of endeavor.

I intend at some point to insert in the Record the names of all of the staff, including associate staff, but I just want the House to appreciate the fact that many members of that staff have been working on this bill for 2 and 3 days without sleep. I do not think the public or the Members understand that, but their dedication to this place is phenomenal.

House Committee on Appropriations Staff Listing--(September 20, 2004)

Front Office--H-218 Capitol--52771

Jim Dyer, Dale Oak, John Blazey, Therese McAuliffe, Di

Kane, Sandy Farrow, John Howard, Jane Porter, Theo Powell.

Communications--H-218 Capitol--65828

John Scofield.

Editor--B-301A Rayburn--52851

Larry Boarman, Cathy Edwards.

Computer--B-305 Rayburn--52718

Vernon Hammett, Tim Buck, Carrie Campbell, Jay Sivulich,

Linda Muir.

Surveys & Investigations--283 Ford--53881

Rob Pearre, Mike Welsh.

Agriculture--2362-A Rayburn--52638

Martin Delgado, Maureen Holohan, Leslie Barrack, Joanne

Perdue, (Detailees: Tom O'Brien, Mike Gregoire).

Commerce-Justice-State--H-309 Capitol--53351

Mike Ringler, Christine Kojac, John Martens, Anne Marie

Goldsmith, (Detailee: Jonathan Miettallo).

Defense--H-149 Capitol--52847

Kevin Roper, Betsy Phillips, Doug Gregory, Alicia Jones,

Paul Juola, Steve Nixon, Leslie Albright, Greg Lankler, Paul

Terry, Sarah Young, Kris Mallard, Kevin Jones, Sherry Young,

Callie Michael.

District of Columbia--H-147 Capitol--67500

Joel Kaplan, Clelia Alvarado.

Energy & Water Dev--2362-B Rayburn--53421

Kevin Cook, Dennis Kern, Scott Burnison, Tracey LaTurner,

(Detailee: Timothy Winchell).

Foreign Operations--HB-26 Capitol--52041

John Shank, Alice Hogans, Rob Blair, Rodney Bent, Lori

Maes.

Homeland Security--B-307 Rayburn--55834

Michelle Mrdeza, Stephanie Gupta, Jeff Ashford, Tom

McLemore, Terry Tyborowski, Kelly Wade, (Detailees: Ben

Nicholson, Brian Dunlop).

Interior--B-308 Rayburn--53081

Debbie Weatherly, Loretta Beaumont, Chris Topik, Greg

Knadle, Andria Oliver, (Detailee: Darren Benjamin).

Labor-HHS-Ed--2358 Rayburn--53508

Craig Higgins, Susan Firth, Meg Thompson, Sue Quantus,

Francine Salvador, Nicole Kunko, (Detailee: Timothy

Monteleone).

Legislative--H-147 Capitol--67252

Liz Dawson, Chuck Turner, (Detailee: Kathy Rohan).

Military Const--B-300 Rayburn--53047

Carol Murphy, Walter Hearne, Mary Arnold, (Detailee: Eric

Elsmo).

Transportation--2358 Rayburn--52141

Rich Efford, Dena Baron, Cheryle Tucker, Leigha Shaw,

(Detailee: Kristen Jones).

VA-HUD--H-143 Capitol--53241

Tim Peterson, Jennifer Miller, Doug Disrud, Tad Gallion,

Tammy Hughes.

Minority--1016 Longworth--53481

Rob Nabors, Mark Murray/Foreign Ops, Cheryl Smith/Labor,

Education, David Reich/HHS, Soc. Sec., William Stone, Tom

Forhan/Legis/Mil Con, Mike Stephens/Interior/EPA, NSF, Martha

Foley/Agric/DC, Michelle Burkett/VA-HUD-NASA, Beverly Pheto/

Homeland, Christina Hamilton, Linda Pagelsen/Justice-

Judiciary, David Pomerantz/Commerce-State, Mike Malone/Trans-

Treas, David Morrison/Defense, David Helfert/Press, Dixon

Butler/Energy & Water, Bob Bonner/CIS, FLETC/Postal, MARAC,

SLSDC, Paul Carver, Lesley Turner, Chris Fitzgerald, Mandy

Swann, Heather Wilson, Beth Houser, (Detailees: Bill Gnacek/

Laura Hogshead/Amy Lazor).

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 866 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Frost), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

(Mr. PUTNAM asked and was given permission to revise and extend his remarks.)

Mr. Speaker, it is a beautiful Saturday morning all across America and people are waking up and taking their morning coffee, reading the paper, getting the kids off to soccer practice, and slipping into the woods to do a little hunting.

As I say, on this glorious Saturday morning, people are going about their lives and doing the things that they do, enjoying time with their family and their business, and they are undoubtedly thinking to themselves, as they find out that Congress is in session on a Saturday, that it is about time those guys did some work.

It is an important issue indeed that finds us here doing the people's business this weekend as we wrap up a very productive 108th Congress. The omnibus package that is here before us today, this rule, H. Res. 866, provides for consideration of H.R. 4818, making appropriations for foreign operations, export financing, and related programs for the fiscal year ending September 30, 2005.

Mr. Speaker, this rule waives all points of order against the conference report and against its consideration. Section 2 of the resolution provides for consideration of H.J. Res. 114 under a closed rule and provides for one hour of debate in the House, equally divided and controlled by the chairman and

ranking minority member of the Committee on Appropriations. All points of order against consideration of the joint resolution are waived. Finally, the rule provides for one motion to recommit H.J. Res. 114.

Mr. Speaker, this legislation represents a tremendous amount of work on the part of our appropriators, working in conjunction with the authorizing committees on a bipartisan, bicameral basis. It is important to note, Mr. Speaker, that this omnibus represents the work of nine different subcommittees on appropriations. There are nine different bills combined in there, but it is not because of the work of the House that that is the case. The House has passed all but one of those bills, and, unfortunately we find ourselves here at the end of the 108th Congress passing them en blanc as a result of issues not related to the House, as the chairman of the Committee on Appropriations, the gentleman from Florida (Mr. Young), and the ranking member of that committee, the gentleman from Wisconsin (Mr. Obey), have done a tremendous job of making sure that the House appropriation train runs on time.

This legislation includes funding for the majority of our agencies and departments, along with very important infrastructure appropriations and needs. It is vital that we pass this to ensure the smooth and continued operation of the Federal Government. The final spending package fully complies with the spending targets agreed to by the Congress and the administration, totaling $821.9 billion in fiscal year 2005 discretionary spending.

Mr. Speaker, it is important to note and to reinforce the fact that this fully complies with the spending targets laid out by this Congress and represents a freeze, or zero percent growth, in nondefense discretionary spending. Total discretionary spending in this bill is $388.4 billion. All additional spending is paid for by an across-the- board cut of 0.83 percent in all nondefense and nonhomeland security spending, a $300 million recession in nonwar, nonemergency defense funds, and $283 million from limitations on expenditures from the Crime Victims Fund.

Mr. Speaker, discretionary funding in the fiscal year 2001 budget, the last budget of the last administration, was 15 percent. Fifteen percent. Mr. Speaker, for the past 4 years, we have been able to hold the line on discretionary spending. This year's freeze demonstrates this Congress' commitment to fiscal responsibility during a time when our men and women in uniform are in harm's way.

In our restraint, however, we continue to make provisions for those who rely on America's promises. The bill provides a record level of resources for veterans health, including a total of over $30 billion for the Veterans Health Administration; $19.5 billion for medical services; $4.7 billion for medical administration; $3.7 billion for medical facilities; and $385 million for medical research. In addition, the bill does not contain additional fees or surcharges for America's veterans.

The bill also provides a significant boost in the manpower and resources of the Federal Bureau of Investigation. The bill includes over $5 billion for the FBI, an increase of over $625 million above last year, and $100 million above the President's request. This funding provides enhanced training, information technology, and staff to the tune of over 1,100 new positions for the FBI to improve intelligence and counterterrorism capabilities, while continuing to fight white collar and violent crime.

The package we consider today prioritizes our Nation's needs in a fiscally responsible manner, and I urge my colleagues to support both the rule and the underlying bill.

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

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Diaz-Balart).

Mr. Speaker, I yield 3 minutes to the gentleman from Indiana (Mr. Burton).

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

Mr. Speaker, I certainly share the gentleman's concern about the situation that people up north find themselves in. It is a situation, to be honest, that is somewhat unfamiliar to me, having been raised in Florida and never having seen snow until I was 30. But I understand the plight. I am proud of the work that the appropriators have done, undoubtedly from the Northeast and around the country, who share the gentleman's concern at funding LIHEAP at $2.2 billion, an increase of $84 million over last year. They are certainly doing everything they can to make sure that the winters in Boston are a little bit less cold and a little bit less dark.

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

Mr. Speaker, I yield 5 minutes to the gentleman from Florida (Mr. Weldon), a distinguished physician.

Mr. Speaker, I am delighted to yield 4 minutes to the gentleman from Ohio (Mr. Regula), the distinguished chairman of the subcommittee who has played a key role in putting this bill together.

(Mr. REGULA asked and was given permission to revise and extend his remarks.)

Mr. Speaker, it is an honor to yield 1 minute to the distinguished gentleman from San Diego, California (Mr. Cunningham), a decorated war hero and outspoken supporter of all men and women in uniform.

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

I am delighted to see that the work of the appropriators has been so well received as it relates to transportation needs and defense needs and continuing our support for international issues and the fight against AIDS and malaria and tuberculosis, the investments that they have made in basic medical research. I am glad to see that their work is so highly regarded that the focus of the opposition is limited to a single issue.

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

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

The gentleman has presented two rhetorical questions, and I will respond to one. It is a pleasure to be here with the distinguished gentleman from Washington, a man who represents a very technologically savvy constituency and a very environmentally concerned constituency. And that tremendous pile of paper was available on the Web last night at 12:15 that would have taken advantage of the skills that are out there as well as saving a few trees.

This is an important work. And I might also ask how long it took for the gentleman to read cover to cover all of the nine bills that had already passed this House in due time?

Mr. Speaker, I yield 1 minute to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. Speaker, I yield 2 minutes to the gentleman from Tennessee (Mr. Wamp), who also serves on the Committee on Appropriations and has worked very hard toward this final product.

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

I would just point out that this bill is within budget and that the House has done its work in hearing and passing the individual spending bills, and whatever inadequacies there may be in this process would not be a result of this half of the legislative branch.

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

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Smith), the distinguished chairman of the Committee on Veterans' Affairs.

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

Mr. Speaker, I certainly tip my hat to the distinguished ranking member of the Committee on Rules. The gentleman has served on that committee for 26 years, and I certainly wish him and his family all the best.

Mr. Speaker, it is a pleasure to bring the debate on this rule over this critically important continuation of the Federal Government to a close. I want to thank our great Floridan, the gentleman from Florida (Mr. Young), for what he and his staff, his great committee, have done in meeting the needs and prioritizing the needs of this Nation.

As a Nation and as a State, we are indebted to the gentleman from Florida (Mr. Young) for the leadership and service he has provided. As a Congress, we are indebted to him for the patience and honor and dignity and demeanor that he has brought to these ever-so-difficult times. No one can understand the burdens that are placed on the chairman, and he has always handled them so well.

As we debate the issues contained within this omnibus and what it means for this Nation going into the Thanksgiving week, it is important that we keep in mind as we celebrate that uniquely American holiday that the safety and comfort that is provided for us by the men and women who are funded by this bill and the infrastructure that takes us to be with family and friends is provided by investments made in this bill. And as we give thanks to the Almighty for our family and our friends and for the blessings, it is important to take the opportunity to give thanks for the blessings of just being an American and the liberty and freedom that that means and the people who provide it for us who are in uniform, who are in law enforcement and who benefit greatly by the priorities in this bill.

Amendment Offered by Mr. Putnam

Mr. Speaker, I offer an amendment.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the amendment and on the resolution.

The previous question was ordered.

Mr. Speaker, I rise to speak in strong support of the Foreign Operations, Export Financing, and Related Programs Appropriations Act for fiscal year 2005, which is included as Division D of this consolidated appropriations legislation. This conference agreement provides important funding for programs designed to support the global war on terrorism, the battle against HIV/AIDS and other infectious diseases, and to support the national interests of the United States. It provides new funding of $93 million to help address the humanitarian disaster in Sudan, including $75 million to support an African Union security force to help end the violence that is plaguing the people of Darfur.

This portion of the conference report contains $19.7 billion in new discretionary budget authority for fiscal year 2005, excluding $93 million in emergency spending to meet the very real emergency in Darfur. This is still $1.6 billion below the President's request, but represents an increase of $318 million above the level passed by the House. The primary reason for the increase is a conference decision to fund the President's highest priority in this bill, the Millennium Challenge Corporation, at a level of $1.5 billion.

We had many challenges in dealing with the Senate bill and reaching a final agreement, but I think we were successful in crafting a bill that is balanced and promotes United States foreign policy objectives.

The Millennium Challenge Corporation will be an important innovation in the way we deliver foreign assistance. It will reinforce and reward efforts in developing countries to strive for poverty reduction by emphasizing a country's commitment to fighting corruption and investing in its people. It was our appropriation bill last year that incorporated the authorization creating the MCC. The President can continue to count on me as a strong supporter.

In addition, we provide important military assistance and counter narcotics funding for our allies in the global war on terrorism, including: an increase of $350 million, for a total of $400 million, to train and equip the new Afghan National Army; an increase of $90 million for law enforcement and counter narcotics programs in Afghanistan, to help reduce record opium harvests; a new base program of $300 million for military assistance for Pakistan to help us in hunting terrorists along the Afghan border; and an increase of $73 million, for a total of $2.22 billion, for our closest alley in the Middle East, the State of Israel.

The conference agreement includes full funding for these increases, both through new budget authority and, in the case of Pakistan, the use of $150 million in transfer authority.

In addition, the conference agreement includes $2.3 billion for combating HIV/AIDS and related diseases, an increase of $690 million over last year and $93 million over the President's request. Together with $624 million recommended by the Subcommittee on Labor/HHS, over $2.9 billion will be available for HIV/AIDS programs in fiscal year 2005.

The conference agreement includes a contribution of $338 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria. The figure for the Global Fund has gotten a lot of attention, and I want to set the record straight. The $338 million that the conference included in $238 million over the President's request. I hope everyone keeps in mind that in order to meet our budget target we had to cut $1.6 billion from the President's request for foreign assistance. Given such a challenge, I'm personally very satisfied that we are able to find bicameral, bipartisan support for such a significant contribution.

My colleagues should know that the U.S. contribution is limited by law to one-third of all contributions to the Global Fund. Because other countries, particularly some European countries, did not step up to the plate last year, $88 million of our money intended for the Global fund could not be spent. We've included bill language to direct those funds back to the Global Fund; otherwise they would not be available for that purpose. When the challenge of AIDS is so large, we must put every dollar to work.

Finally, the Fund has grown tremendously in its three years. It currently has over 200 grants under management for billions of dollars. The funding included in the conference agreement provides enough-- again, assuming

other countries contribute their share--to cover the ongoing and renewal costs of these grants.

The Fund needs to take the next several months to make sure it's strong enough to fulfill its mandate efficiently and transparently. The conference agreement includes guidance for steps the Fund should take, such as making sure funds are disbursed only on the basis of proven results.

This conference agreement also provides $950 million for other health activities aside from HIV/AIDS. This amounts to an increase of $130 million over the President's request and a $31 million increase over last year.

The conference agreement also provides $404 million in assistance for Sudan, including Darfur. I visited Darfur a few months ago with Mr. Jackson of Illinois, and we returned convinced that no long-term solution can be found for that troubled region without security. The African Union observers and protection mission in Darfur is a step in the right direction, and $75 million of this assistance is specifically intended to support and sustain that mission. Our bill is explicit in providing that no funds from these accounts can be made available for the government of Sudan in Khartoum until it acts in good faith to find a lasting peace in Darfur. The rest of the funding will remain available for humanitarian assistance for the people of Sudan.

We continue an emphasis in agreement on helping developing countries build their capacity to participate in the international trading system. The conference agreement provides $507 million for trade capacity building, the same amount as last year. It also includes $20 million specifically intended to help the countries of Central America develop the labor and environmental standards that will help facilitate implementation of the Central American Free Trade Agreement, which I hope Congress can make a reality in the coming session.

The conference agreement also responds to emerging needs, such as the provision of $85 million in assistance for Haiti. This legislation also funds the export finance agencies that help promote U.S. investment overseas and create jobs in the United States export sectors. It provides over $250 million for these agencies, including the Export- Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency, which is offset by $311 million in collections.

The narcotics industry has become a source of funding for terrorists, especially in countries like Colombia and Afghanistan. As part of the war on terror, the conference agreement fully funds the President's request for the Andean Counterdrug initiative at a level of $731 million, for anti-narcotics, interdiction, development programs, and rule of law and institution building programs in Colombia, Bolivia, Peru and Ecuador.

Under the general anti-narcotics account, the conference report fully funds anti-narcotics and law enforcement programs in Afghanistan at a level of $90 million, and in Mexico at a level of $40 million.

To support continuing United States leadership in the world for providing humanitarian responses to refugee crises, the conference agreement provides $800 million for refugee programs, $50 million more than the President's request.

To conclude, Mr. Speaker, I believe this balanced conference agreement provides important support for our most critical national security needs while substantially increasing funding to respond to the global HIV/AIDS pandemic. It also enhances our support for our overseas development assistance and humanitarian assistance activities. It meets the high priority needs of the President in these areas, and accommodates Congressional concerns as well. It is a conference agreement that I think all members of this body should support.

Before I yield, Mr. Speaker, I want provide special thanks to my full committee chairman, Bill Young of Florida, for his help and support to the Foreign Operations Subcommittee over the past 6 years. He is leaving as committee chairman, but remains a valued member of our committee, and I look forward to working with him closely in the future.

I also want to pay tribute to the ranking minority member of the full committee, Mr. Obey, and my ranking minority member, Nita Lowey. They both have been extremely helpful in this process, and I very much appreciate the House Foreign Operations bill, and in reaching a conference agreement. I also appreciate all the members of the Subcommittee who contributed so much to this final agreement.