Mr. KERRY. Mr. President, let me say a few words about the Small Business Reauthorization Act of 2000 and the process to bring this legislation to the floor as part of the Fiscal Year 2001 Omnibus Appropriations bill. First, however, I would like to thank Senate Committee on Small Business Chairman KIT BOND, House Small Business Committee Chairman JIM TALENT, House Small Business Committee Ranking Member NYDIA VELÁZQUEZ, our staffs, Laura Ayoud with Senate Legislative Counsel and John Ratliff with the House Legislative Counsel's office for their efforts on reauthorizing programs vital to America's small businesses. We have all worked long and hard to get to this point.

The Small Business Reauthorization Act of 2000, H.R. 5667, as included in the Fiscal Year 2001 Omnibus Appropriations bill, contains a good portion of the conference report negotiated by the Senate and House Committees on Small Business. Despite the rough start, partisan wrangling over unrelated issues, broken deals and lengthy delays, I am pleased that we can at last pass this legislation so critical to our nation's small businesses. Unfortunately, it is our small businesses that have suffered the most in this climate of uncertainty, waiting, anticipating and hoping that the Congress would complete its work and pass this reauthorization package.

While I am pleased that we have reached an agreement that will ensure continuation of valuable Small Business Administration (SBA) programs, I am greatly concerned with the breakdown in the legislative process that has prevented what is normally a bi-partisan reauthorization bill from passing in a timely manner.

To briefly elaborate on this, when the original agreement between the Senate and the House was concluded, our bipartisan legislation was commandeered by the Republican leadership and provisions dealing with tax cuts, assisted suicide and medicare give-backs to HMOs were added without my knowledge or consent. The President threatened to veto such a package.

Additionally, a Wellstone provision agreed to during negotiations was removed. The Wellstone provision would have created a 3 year $9 million pilot project to build the capacity of community development venture capital firms through research, training and management assistance. Senator WELLSTONE had already agreed to make this program a three year pilot project and cut the funding down from $20 million over four years. But the provision was removed from the Conference Report without consulting either of us.

I am also disappointed that some provisions included in the Senate passed version of the Small Business Reauthorization Act, as well as in the Administration's budget request, were not included in the final version of this legislation. The original Senate version contained several provisions important to the Administration, Members of the Senate Small Business Committee and the Senate in general. In the spirit of compromise, the Senate agreed to drop several of these important provisions, with an understanding, in many cases, to revisit these issues in the 107th Congress.

Chairman BOND agreed to remove his provision regarding the ``Independent Office of Advocacy Act,'' which I cosponsored, and which passed the Senate as a separate bill. This Committee has heard on more than one occasion that providing separate funding for the Office of Advocacy is the best means to ensure its autonomy. I look forward to working with the Chairman on this issue in the next Congress. A provision requested by Senator TED STEVENS setting up a HUBZone pilot program in Alaska and a provision requested by Senator DIANNE FEINSTEIN to allow fruit and vegetable packing houses hit by the 1998 freeze to participate in the SBA's D isaster Loan program were removed as well. I have assured Senator FEINSTEIN that the Committee will look further into this matter in the next Congress in an effort to allow the SBA t o provide relief if it is warranted.

A provision requested by the Administration and strongly supported by Senator PAUL WELLSTONE and myself was also dropped. This provision would have created a Native American Small Business Development Center (SBDC) Network that would have worked together with the traditional SBDC Network, but would have been separately funded. I have received assurances from both Chairman BOND and the House Committee on Small Business that this issue will be addressed in the next Congress, along with concerns raised by Senator INOUYE about the participation of Native Hawaiian Organizations in the 8(a) program. The Senate and House Committees on Small Business are in agreement that this is an important issue for Native Americans, considered a disadvantaged group for the purposes of SBA p rograms, and one that needs greater focus.

Provisions regarding the Quadrennial Small Business Summit, the Small Business Advocacy Review Panel Technical Amendments Act, Development Company Debenture Interest Rates, Fraud and False Statements and Financial Institution Civil Penalties were also removed.

The final version of this legislation does include some of the provisions I requested regarding improvements to the Microloan program. The changes to the Microloan program stemmed from the President's Fiscal Year 2001 budget request and had broad support in the Senate, as well the support of several Members of the House Committee on Small Business. I have long been a firm believer in microloans and their power to help people gain economic independence while improving the communities in which they live. With a relatively small investment, the Microloan program helps turn ideas into small businesses adding up to sel-sufficiency for many families and big returns for the taxpayers.

Changes to the program, which resulted from a roundtable Committee meeting in the Senate and discussions with the Administration and users of the Microloan program, will be a great boon to the effectiveness and availability of Microloans. Specifically, provisions increasing the maximum loan amount from $25,000 to $35,000 and increasing the average loan size to $15,000 were included. However, changes to make the program more effective, such as increasing the number of intermediaries or authorizing reimbursement for peer-to-peer mentoring, were weakened or removed because the House did not have time to hold hearings and study them thoroughly.

I believe all of the changes in the Senate bill make sense, have broad bipartisan and bicameral support, and would go a long way toward providing increased access to capital, especially for minority entrepreneurs. I want to make it clear to my colleagues who support the Microloan program that I will continue my efforts to strengthen this program and will work with Chairman BOND and our House counterparts to make these remaining improvements in the next Congress. I also intend to revisit the Microloan funding issue before the end of the three-year reauthorization period if the level authorized is inadequate to meet program needs.

While I am disappointed that some of the Senate changes were not included in the final compromise, this legislation is crucial for our nation's small businesses. It reauthorizes all of the SBA's p rograms, setting the funding levels for the credit and business development programs, and making selected improvements. Without this legislation, the 504 loan program and the Small Business Innovation Research program would shut down; the venture capital debenture program would shut down; and funding to the states for their small business development centers would be in jeopardy.

The SBA's c ontribution is significant. In the past eight years, the SBA h as helped almost 375,000 small businesses get more than $80 billion in loans. That's double what small businesses had received in the preceding 40 years since the agency's creation. The SBA i s better run than ever before, with four straight years of clean financial audits; it has a quarter less staff, but guarantees twice as many loans; and its credit and finance programs are a bargain. For a relatively small investment, taxpayers are leveraging their money to help thousands of small businesses every year and fuel the economy.

Let me just give you one example. In the 7(a) program, taxpayers spend only $1.24 for every $100 loaned to small business owners. Well known successes like Winnebago and Ben & Jerry's are clear examples of the program's effectiveness.



Overall, I agree with the program levels in the three-year reauthorization bill. As I said during the Small Business Committee's hearing on SBA's b udget earlier in the year, I believe the program levels are realistic and appropriate based on the growing demand for the programs and the prosperity of the country. I also think they are adequate should the economy slow down and lenders have less cash to invest. Consistent with SBA's m ission, in good times or bad, we need to make sure that small businesses have access to credit and capital so that our economy benefits from the services, products and jobs they provide. As First Lady and Senator-elect HILLARY RODHAM CLINTON says, we don't want good ideas dying in the parking lot of banks. We also want a safety net when our states are hit hard by a natural disaster. There are many members of this Chamber, and their constituents, who know all too well the value of SBA d isaster loans after floods, fires and tornadoes.

Mr. President, I am extremely pleased that we included legislation to extend the Small Business Innovation Research (SBIR) program for 8 more years as part of this comprehensive SBA r eauthorization bill. While I am very sorry the process has taken this long, in no way should that imply that there is not strong support for the SBIR program, the Small Business Administration, or our nation's innovative small businesses.

The SBIR program is of vital importance to the high-technology sector throughout the country. For the past decade, growth in the high-technology field has been a major source of the resurgence of the American economy we now enjoy. While many Americans know of the success of Microsoft, Oracle, and many of the dot.com companies, few realize that it is America's small businesses, working in industries like software, hardware, medical research, aerospace technologies, and bio-technology, that are helping to fuel this resurgence--and that it is the SBIR program that makes much of this possible. By setting aside Federal research and development dollars specifically for small high-tech businesses, the SBIR program is making important contributions to our economy.

These companies have helped launch the space shuttle; conducted research on Hepatitis C; and made B-2 Bomber missions safer and more effective.

Since the start of the SBIR program in 1983, more than 17,600 firms have received over $9.8 billion in SBIR funding agreements. In 1999 alone, nearly $1.1 billion was awarded to small high-tech firms through the SBIR program, assisting more than 4,500 firms.

The SBIR program has been, and remains, an excellent example of how government and small business can work together to advance the cause of both science and our economy. Access to risk capital is vital to the growth of small high technology companies, which accounted for more then 40 percent of all jobs in the high technology sector of our economy in 1998. The SBIR program gives these companies access to Federal research and development money and encourages those who do the research to commercialize their results. Because research is crucial to ensuring that our nation is the leader in knowledge-based industries, which will generate the largest job growth in the next century, the SBIR program is a good investment for the future.

I am proud of the many SBIR successes that have come from my state of Massachusetts. Companies like Advanced Magnetics of Cambridge, Massachusetts, illustrate that success. Advanced Magnetics used SBIR funding to develop a drug making it easier for hospitals to find tumors in patients. The development of this drug increased company sales and allowed Advanced Magnetics to hire additional employees. This is exactly the kind of economic growth we need in this nation, because jobs in the high-technology field pay well and raise everyone's standard of living. That is why I am such a strong supporter and proponent of the SBIR program and fully support its reauthorization.

This legislation also includes my legislation establishing a New Markets Venture Capital program at SBA. This small business legislation is designed to promote economic development, business investment, productive wealth and stable jobs in ``new markets,'' low- and moderate-income communities where there is little to no sustainable economic activity but many overlooked business opportunities. The venture capital program is modeled after the Small Business Administration's successful Small Business Investment Company program. The SBIC program has been so successful that it has generated more than $19 billion in investments in more than 13,000 businesses since 1992.

With the passage of the ``New Markets'' legislation, low- and moderate-income areas will have increased opportunities to join the economic boom in America and this targeted venture capital will make a powerful difference in places like the inner-city areas of Boston's Roxbury or New York's East Harlem, and rural areas like Kentucky's Appalachia or the Mississippi's Delta region.

This legislation also contains H.R. 2614, which reauthorizes SBA's 5 04 loan program, which passed the Senate on June 14, 2000. The bill and our improvements make common-sense changes to this critical economic development tool. These changes will greatly increase the opportunity for small business owners to build a facility, buy more equipment, or acquire a new building. In turn, small business owners will be able to expand their companies and hire new workers, ultimately resulting in an improved local economy.

Since 1980, over 25,000 businesses have received more than $20 billion in fixed-asset financing through the 504 program. In my home state of Massachusetts, over the last decade small businesses have received $318 million in 504 loans that created more than 10,000 jobs. The stories behind those numbers say a lot about how SBA's 5 04 loans help business owners and communities. For instance, in Fall River, Massachusetts, owners Patricia Ladino and Russell Young developed a custom packing plant for scallops and shrimp that has grown from ten to 30 employees in just two short years and is in the process of another expansion that will add as many as 25 new jobs.

Under this reauthorization bill, the maximum debenture size for Section 504 loans has been increased from $750,000 to $1 million. For loans that meet special public policy goals, the maximum debenture size has been increased from $1 million to $1.3 million. It has been a decade since we increased the maximum guarantee amount. If we were to change it to keep pace with inflation, the maximum guarantee would be approximately $1.25 million instead of $1 million. By not implementing such a sharp increase, we are striking a balance between rising costs and increasing the government's exposure.

I am pleased to say that this legislation also includes a provision assisting women-owned businesses, which I first introduced in 1998 as part of S. 2448, the Small Business Loan Enhancement Act. This provision adds women-owned businesses to the current list of businesses eligible for the larger public policy loans. As the role of women-owned businesses in our economy continues to increase, we would be remiss if we did not encourage their growth and success by adding them to this list.

Mr. President, the 504 loan program gets results. It expands the opportunities of small businesses, creates jobs and improves communities. It is crucial that it be reauthorized, I am pleased this legislation has been included in this package.

Small Business Development Centers (SBDC) are also reauthorized under this legislation. SBDCs serve tens of thousands of small business owners and prospective owners every year. This bill takes a giant step to retool the formula that determines how much funding each state receives. This is an important program for all of our states and we want no confusion about its funding. Without this change, some states would have suffered sharp decreases in funding, disproportionate to their needs. I appreciate and am glad that the SBA a nd the Association of Small Business Development Centers worked with me to develop an acceptable formula so that small businesses continue to be adequately served. As I said previously, I plan to revisit the Native American SBDC Network issue next Congress.

This legislation also reauthorized the National Women's Business Council. For such a tiny office, with minimal funding and staff, it has managed to make a significant contribution to our understanding of the impact of women-owned businesses in our economy. It has also done pioneer work in raising awareness of business practices that work against women-owned business, such as some in the area of Federal procurement. Recently, the Council completed two studies that documented the world of Federal procurement and its impact on women-owned businesses.

According to the National Foundation for Women Business Owners, over the past decade, the number of women-owned businesses in this country has grown by 103 percent to an estimated 9.1 million firms. These firms generate almost $3.6 trillion in sales annually and employ more than 27.5 million workers. With the impact of women-owned businesses on our economy increasing at an unprecedented rate, Congress relies on the National Women's Business Council to serve as its eyes and ears as it anticipates the needs of this burgeoning entrepreneurial sector. Since it was established in 1988, the bipartisan Council has provided important unbiased advice and counsel to Congress.

This Act recognizes the Council's work and re-authorizes it for three years, from FY 2001 to 2003. It also increases the annual appropriation from $600,000 to $1 million, which will allow the council to support new and ongoing research, and produce and distribute reports and recommendations prepared by the Council.

The Historically Underutilized Business Zone, or ``HUBZone'' program, which passed this Committee in 1997, has tremendous potential to create economic prosperity and development in those areas of our Nation that have not seen great rewards, even in this time of unprecedented economic health and stability. This program is similar to my New Markets legislation in that it creates an incentive to hire from, and perform work in, areas of this country that need assistance the most. This bill would authorize the HUBZone program at $10 million for the next 3 years, which is $5 million above the Administration's request.

Additionally, this legislation includes very important provisions to allow those groups which were inadvertently missed when this legislation was crafted--namely Indian tribal governments and Alaska Native Corporations--to participate in the program. I appreciate the willingness of the Committee on Indian Affairs to work with our Committee to create increased HUBZone opportunities for Native Americans.

As I stated, the HUBZone section does not contain any provision addressing the interaction of the HUBZone and 8(a) minority contracting programs. I believe that the 8(a) program is an important and necessary tool to help minority small businesses receive access to government contracts. The Chairman and I agree that there is a need to enhance the participation of both 8(a) and HUBZone companies in Federal procurement. It is my intention that the Senate Committee on Small Business consider the issue of enhancing small business procurement in the next Congress.

This legislation also includes a provision relating to SBA's c osponsorship authority. This authority allows SBA a nd its programs to cosponsor events and activities with private sector entities, thus leveraging the Agency's limited resources. The legislation extends this authority for three additional years.

Mr. President, let me conclude by reminding my colleagues that all of our states benefit from the success and abundance of small businesses. This legislation makes their jobs a little easier. I ask my colleagues for their support of this important legislation.