Senate panel passes SBA reauthorization
Bill would strengthen federal authority to prosecute large corporations that illegally gain small business loans from the agency.
The Senate Small Business Committee gave unanimous approval Thursday to a three-year reauthorization of the Small Business Administration that includes a major overhaul of the agency's disaster loan efforts and other programs.
The 18-0 approval of the reauthorization measure extends the mandate of the agency through 2009 and contains a host of changes, recalculations of funding levels for existing programs and additions to the agency's programs, including the creation of an office of minority small business development with a $5 million annual budget.
Before approving the measure, Small Business Chairwoman Olympia Snowe, R-Maine, said the reauthorization comes at a "pivotal" time for the agency.
A new administrator for the program, Steven Preston, officially took over the reigns at the agency Wednesday, following months of criticism of the agency's handling of disaster relief programs in the wake of Hurricane Katrina's ravaging of the Gulf Coast.
In moves pushed by Sens. Mary Landrieu, D-La., and David Vitter, R-La., along with Snowe and Small Business ranking member John Kerry, D-Mass., and others, the legislation would authorize the SBA to make disaster loans to nonprofit institutions and would increase the maximum size of such loans from $1.5 million to $5 million per loan.
Under current regulations, only homeowners, individual renters and for-profit businesses are eligible for benefits from the program.
The bill also would give the agency the ability to back loans by private lenders to disaster victims at lower rates. SBA would be ordered to create a new bridge loan program giving states federal guarantees on loans related to disaster relief efforts.
The president would be given the authority to declare a new category of national disaster that would trigger the availability of disaster loans for economically damaged businesses outside of the geographically impacted area.
In an effort to address long-held concerns about fraud within the SBA's loan programs, the reauthorization would strengthen federal authority to prosecute large corporations that illegally gain small business loans from the agency.
The bill would increase the maximum size of loans under the Section 7(a) loan program from $2 million to $3 million.
To address energy costs, the legislation would establish a small business energy disaster loan program that would provide up to $1.5 million in loans to businesses adversely affected by significant increases in the price of heating fuel, as well as a related program to provide loan relief to small businesses in the face of increased gasoline prices.
In an effort to address technology firm needs, the bill also would double the Small Business Innovation Research Program, which provides loans to biotechnology and other firms whose work is the result of long-term investment.
While the panel's approval opens the door for floor action on the bill after the August recess, committee staffers indicated that a timetable for a floor vote is not yet known, as other Senate committees might want to take a look at portions of the measure over which they have jurisdiction.