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March 14, 2000
(House)


H.R. 3845 - Small Business Investment Corrections Act of 2000
(Talent (R) Missouri and Velazquez (D) New York)

The Administration does not oppose House passage of H.R. 3845, but will seek a Senate amendment to strike the fee portion of the bill. The Small Business Administration (SBA) should have maximum flexibility to both increase and decrease the fee as needed. Constraining SBA's ability to raise fees above 1 percent, when combined with a zero subsidy requirement, would necessitate appropriations if fee income is insufficient to cover program costs. Consistent with the FY 2001 Budget, the Administration will seek legislation to reduce the fee on the debenture program for fiscal year 2001 from 1% to .88% to achieve a zero-subsidy rate for that fiscal year.

In addition, while the changing nature of investment requirements for small businesses may warrant changes to the definitions of a small business and of a long-term investment, the Administration would prefer that there be a fuller discussion of these issues before such changes are enacted into law.

Finally, the bill will have a pay-as-you-go impact if it does not explicitly limit the application of any revised fees to future guarantees. The Administration hopes to work with the Congress to resolve all of these issues before final passage of this bill.