J. I. H. memo to Robert L. Ehrlich, Jr., October 16, 2000

Memo To: From: Date: Subject: RLE JIH 10/26/2000 Tax/BBA fix bill Bill passed 237-174. H.R. 261 4-The Certified Development Company Program Improvements Act of 2000 (Conference Report) H.R. 2614 reauthorizes the Small Business Innovation Research Program (SBIR), which assists small businesses in obtaining federal research and development funding. Specifically, the bill amends the Small Business Act to (1) extend the SBIR until September 30, 2007; (2) require an annual SBIR report to be submitted to the Science Committee; (3) require the administrator of the Small Business Administration to revise certain SBIR policy directives concerning funding awards; and (4) direct each federal agency that maintains a Small Business Technology Transfer Program to include in its annual performance plan a section on its SBIR. This measure also amends the general business loan program at the Small Business Administration, commonly known as the 7(a) loan program. It increases the maximum guarantee amount of a 7(a) loan to $1 million from the current limit of $750,000 in order to keep pace with inflation. The guarantee amount was last increased in 1988. Moreover, it institutes a cap prohibiting loans with a gross amount in excess of $2 million. Also includes three changes designed to encourage the making of smaller loans. The guarantee rate will be expanded to 85 percent from loans under $ 1 00,000 to loans under $ 1 50,000. Likewise, the two percent guarantee fee will now apply to loans up to $150,000, which represents a significant savings for these small borrowers. H.R. 2614 amends the Small Business Investment Act to make changes in the Certified Development Company (CDC) loan program at the Small Business Administration (SBA), commonly known as the 504 loan program. It will increase the maximum amount of a 504 loan, and its underlying debenture, to $1 million from the current limit of $750,000 in order to keep pace with inflation. The maximum amount for loans with specific public policy purposes (low-income, rural, and minority