Statement of Administration Policy: H.R. 4793 - Small Business Reauthorization and Amendments Act of 1990

(House Rules)
(LaFalce (D) New York and 42 others)

If H.R. 4793 is presented to the President containing Title II in its current form, the Secretary of the Treasury will recommend a veto. The Administration also opposes enactment of H.R. 4793 because it contains unrealistically high authorization levels and unnecessarily costly programs and requirements.

Title II of H.R. 4793 would permit certain SBA borrowers to prepay their borrowings from the Federal Financing Bank at substantially reduced premiums, and to finance up to $150 million per year of such prepayments with new loans fully guaranteed by the Government. The effect of Title II would be to allow a borrower to change the borrowing terms to which it had agreed when it is favorable to the borrower — and therefore unfavorable to the Bank and American taxpayers — to do so.

H.R. 4793 should be amended to authorize FY 1991 program levels consistent with the President's Budget. Specifically, the Administration recommends program levels of $5 million for 8(a) direct loans (with no authorization for other forms of direct loans); $3. 83 billion for guaranteed loans; and $1. 5 billion for surety bond guarantees. The FY 1991 authorization levels in H.R. 4793 exceed these amounts by $96 million, $440 million, and $300 million, respectively. H.R. 4793 also contains authorization levels for these programs for FYs 1992-94 at levels increasingly greater than those for FY 1991. The Administration recommends that these FY 1992-94 authorizations be deleted.

For the Small Business Development Center (SBDC) program, the Administration recommends authorization levels of $30 million for FY 1991 and $15 million for FY 1992. The Administration recommends deletion of section 103, which would extend the SBDC program beyond FY 1992. This program has attracted substantial funding from non-Federal sources and should be permitted to become independent of Federal funding at the end of FY 1992.

H.R. 4793 should also be amended to delete:

— section 104, which would involve the Small Business Administration (SBA) in reforestation activities more

— section 108, which would require that the Deputy SBA Administrator, currently appointed by the SBA Administrator, be appointed by the President;

— sections 109 and 118, which would impose unnecessary delays on the Federal procurement process; and

— Title III, which contains several costly and unnecessary mandates regarding small businesses in rural areas.