SMALL BUSINESS ADMINISTRATION

Federal Funds

For necessary expenses, not otherwise provided for, of the Small Business Administration, including hire of passenger motor vehicles as authorized by sections 1343 and 1344 of title 31, United States Code, and not to exceed $3,500 for official reception and representation expenses, [$268,000,000, of which not less than $12,000,000 shall be available for examinations, reviews, and other lender oversight activities] $275,033,000: Provided, That the Administrator is authorized to charge fees to cover the cost of publications developed by the Small Business Administration, and certain loan program activities, including fees authorized by section 5(b) of the Small Business Act: Provided further, That, notwithstanding 31 U.S.C. 3302, revenues received from all such activities shall be credited to this account, to remain available until expended, for carrying out these purposes without further appropriations: Provided further, That the Small Business Administration may accept gifts in an amount not to exceed $4,000,000 and may co-sponsor activities, each in accordance with section 132(a) of division K of Public Law 108–447, during fiscal year [2016] 2017: Provided further, That $6,100,000 shall be available for the Loan Modernization and Accounting System, to be available until September 30, [2017: Provided further, That $3,000,000 shall be for the Federal and State Technology Partnership Program under section 34 of the Small Business Act (15 U.S.C. 657d)] 2018. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

This account funds the administrative expenses of SBA headquarters and field office operations. Appropriations for the administration of the disaster and business loan programs are transferred to and merged with this account. The 2017 Budget provides $6.1 million in funding for the continued modernization of the loan management accounting systems, which will improve oversight of SBA's more than $100 billion portfolio of loans and loan guarantees. Funding is also requested for core agency activities, including information technology investments and human capital development. The Budget also supports an SBA Digital Services team to assist with modernization of SBA's technology systems that support small businesses, including those supporting the Government Contracting programs.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of the Office of Inspector General in carrying out the provisions of the Inspector General Act of 1978, $19,900,000. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

The 2017 Budget proposes $19.9 million in new budget authority and $1 million transferred from the Disaster Loans Program account for a total of $20.9 million for the Office of Inspector General (OIG). This appropriation provides funds for agency-wide audit, investigative, and related functions to promote economy and efficiency in SBA operations and to prevent and detect waste, fraud, and abuse.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of the Office of Advocacy in carrying out the provisions of title II of Public Law 94–305 (15 U.S.C. 634a et seq.) and the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.), [$9,120,000] $9,320,000, to remain available until expended. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

The 2017 Budget proposes $9.320 million in new budget authority. This appropriation provides funds for operations of the Office of Advocacy to carry out its statutory duties, including those under the Regulatory Flexibility Act. Pursuant to the funding authorization in Section 1602 (c) of the Small Business Jobs Act, SBA is requesting that the funds remain available until expended. The Office of Advocacy's advice and small business research help the Federal Government take into account the concerns of small businesses when it develops policies and regulations. The Office's regional advocates support regulatory flexibility at the State level, work with the regional Regulatory Fairness Boards established by the Small Business Regulatory Enforcement Fairness Act, and promote the use of Advocacy research and data products in the curricula of universities and other schools in their respective regions.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of programs supporting entrepreneurial and small business development, [$231,100,000] $230,600,000, to remain available until September 30, [2017] 2018: Provided, That [$117,000,000] $115,000,000 shall be available to fund grants for performance in fiscal year [2016] 2017 or fiscal year [2017] 2018 as authorized by section 21 of the Small Business Act: Provided further, That [$25,000,000] $31,000,000 shall be for marketing, management, and technical assistance under section 7(m) of the Small Business Act (15 U.S.C. 636(m)(4)) by intermediaries that make microloans under the microloan program: Provided further, That [$18,000,000]$15,000,000 [shall be] is available for [grants to States to carry out export programs that assist small business concerns authorized under section 1207 of Public Law 111–240] the State Trade and Export Promotion Grant Program, unless the State Trade Expansion Program is enacted, in which event such amount shall be available for the State Trade Expansion Program. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

For 2017, this account supports SBA's core counseling, training and technical assistance programs, including Small Business Development Centers, SCORE, Women's Business Centers, Veterans' Business Outreach Centers, and Microloan technical assistance, as well as various entrepreneurial development initiatives. Some of the initiatives include Entrepreneurial Education, a program designed to train and develop small business owners who are poised for growth; the State Trade and Export Promotion (STEP) program, which helps small businesses tap global markets and expand exports; and Veterans Outreach programs like the Boots to Business program, which provides entrepreneurship training to America's veterans transitioning to civilian life. The Budget also supports other place-based initiatives, such as the Regional Innovation Clusters, Growth Accelerator and Hubzone initiatives, as well as other outreach and contracting activities.

Object Classification (in millions of dollars)

Employment Summary

Program and Financing (in millions of dollars)

SBA is authorized to issue bond guarantees to surety companies for construction, service, and supply contracts or work orders, and to reimburse these sureties up to 90 percent of the losses sustained if the contractor defaults. SBA's guarantees provide an incentive for sureties to issue bonds to small contractors who could not otherwise secure them and compete in the contracting industry. It is estimated that there are sufficient funds in reserve to cover the cost of claim defaults in 2017. Therefore, no new appropriated funds are requested in the Budget.

For the cost of direct loans, [$3,338,172] $4,338,000, to remain available until expended: Provided, That such costs, including the cost of modifying such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided further, That subject to section 502 of the Congressional Budget Act of 1974, during fiscal year [2016] 2017 commitments to guarantee loans under section 503 of the Small Business Investment Act of 1958 shall not exceed $7,500,000,000: Provided further, That during fiscal year [2016] 2017 commitments for general business loans authorized under section 7(a) of the Small Business Act shall not exceed [$26,500,000,000] $27,000,000,000 for a combination of amortizing term loans and the aggregated maximum line of credit provided by revolving loans: Provided further, That during fiscal year [2016] 2017 commitments for loans authorized under subparagraph (C) of section 502(7) of The Small Business Investment Act of 1958 (15 U.S.C. 696(7)) shall not exceed $7,500,000,000: Provided further, That during fiscal year [2016] 2017 commitments to guarantee loans for debentures under section 303(b) of the Small Business Investment Act of 1958 shall not exceed $4,000,000,000: Provided further, That during fiscal year [2016] 2017, guarantees of trust certificates authorized by section 5(g) of the Small Business Act shall not exceed a principal amount of $12,000,000,000. In addition, for administrative expenses to carry out the direct and guaranteed loan programs, [$152,725,828] $152,726,000, which may be transferred to and merged with the appropriations for Salaries and Expenses. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

Summary of Budget Authority and Outlays (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records the subsidy costs associated with the direct loans obligated and loan guarantees committed in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year), as well as administrative expenses of the business loan program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis.

For 2017, the Budget proposes $157.1 million in new budget authority for the Business Loans Program account. This includes $152.7 million in administrative expenses funding and $4.3 million in credit subsidy for the direct Microloan Program. This subsidy supports a $44.4 million program level for direct Microloans. The majority of SBA's loan guarantee programs, such as the 7(a), 504, 504 Debt Refinancing and SBIC programs, will operate with no subsidy requirements in 2017. The Budget also proposes a $55 million cancellation of prior year unobligated balances appropriated for business loan subsidy for the 504 CDC program that is now zero subsidy.

The Budget supports a program level of $27.0 billion in Section 7(a) loan guarantees that provide general business credit assistance. To address unanticipated spikes in lending, Section 521 of the SBA general provisions proposes administrative flexibility to increase the 7(a) program level by 15 percent if the program demand were to exhaust the appropriated limit, with notification to the Appropriations and Small Business committees. The 2017 Budget continues to waive upfront fees on all 7(a) loans of $150,000 or less to spur lending in this market. The Budget also continues to waive upfront fees on SBA Express loans to veterans between $150,000 and $350,000 and a 50 percent waiver of upfront fees on all non-SBA Express loans to veterans between $150,000 and $500,000. In addition, the Secondary Market Guarantee (SMG) Program allows SBA's fiscal agent to the guaranteed portion of 7(a) loans and sells the securities to investors. This mechanism provides liquidity to lenders participating in the 7(a) loan program. For 2017, the Budget proposes a program level of $12 billion in such securities.

The guaranteed loan program authorized by Section 503 of the Small Business Investment Act of 1958 is for long-term, fixed-rate financing; the requested guaranteed loan program level is $7.5 billion in 2017. The guaranteed loan program authorized by Section 502 of the Small Business Investment Act of 1958 is for refinancing existing commercial mortgage and equipment debt. The requested program level for those guaranteed loans is $7.5 billion in 2017. The Small Business Investment Company (SBIC) program provides credit to support venture capital investments at a program level of $4 billion.

Scale-Up Manufacturing Investment Company (SUMIC) Legislative Proposal.—The Budget proposes authorization of $1.25 billion in mandatory subsidy budget authority for the SUMIC lending program, which would support innovative manufacturing technologies by financing their scale-up from prototypes to commercial-scale facilities in the United States. The SUMIC is designed to generate $10 billion in investment activity over five years, using $5 billion in Federal funds and a matching amount of private funds, to bridge the financing gap for small advanced manufacturing startups. A placeholder subsidy rate of 25% has been assumed for purposes of this request, but actual subsidy costs associated with each application for a Federal contribution to a fund would be determined on a fund-by-fund basis using actual fund financial information. There are no subsidy outlays assumed in 2017. If authorized, outlays are anticipated to begin in 2018 and continue through 2021.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

Balance Sheet (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

Balance Sheet (in millions of dollars)

Object Classification (in millions of dollars)

For administrative expenses to carry out the direct loan program authorized by section 7(b) of the Small Business Act, [$186,858,000] $185,977,000, to be available until expended, of which $1,000,000 is for the Office of Inspector General of the Small Business Administration for audits and reviews of disaster loans and the disaster loan programs and shall be transferred to and merged with the appropriations for the Office of Inspector General; of which [$176,858,000] $175,977,000 is for direct administrative expenses of loan making and servicing to carry out the direct loan program, which may be transferred to and merged with the appropriations for Salaries and Expenses; and of which $9,000,000 is for indirect administrative expenses for the direct loan program, which may be transferred to and merged with the appropriations for Salaries and Expenses: Provided, That, of the funds provided herein, $158,829,000 shall be for major disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(2)); $151,179,000 is for direct administrative expenses of loan making and servicing to carry out the direct loan program; and $7,650,000 is for indirect administrative expenses for the direct loan program: Provided further, That the amount for major disasters under this heading is designated by Congress as being for disaster relief pursuant to section 251(b)(2)(D) of the Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99–177), as amended. (Financial Services and General Government Appropriations Act, 2016.)

Program and Financing (in millions of dollars)

Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars)

As required by the Federal Credit Reform Act of 1990, as amended, this account records, for loans made pursuant to Section 7(b) of the Small Business Act, as amended, the subsidy costs associated with the direct loans obligated in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year), as well as administrative expenses of this program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis.

Disaster loans made pursuant to Section 7(b) of the Small Business Act provide Federal assistance for non-farm, private sector disaster losses. Through the disaster assistance program, SBA helps homeowners, renters, businesses of all sizes, and non-profit organizations pay for the cost of replacing, rebuilding or repairing property damaged by disasters. The program is the only form of SBA financial assistance not limited to small businesses. The program provides subsidized loans of up to 30 years to borrowers who have incurred uninsured physical losses or economic injury as the result of a disaster.

In 2017, the Budget supports $1.1 billion in loans, the ten-year normalized average for such loans. The Budget does not request new credit subsidy budget authority, as SBA has sufficient unobligated balances to support estimated 2017 loan approvals. However, the Budget does request $158.8 million in new budget authority for administrative expenses related to major disasters (pursuant to a determination under section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act) and $27.1 million for administrative expenses related to non-major disasters. The funding for major disasters will be designated as being for disaster relief under the cap adjustment in section 251(b)(2)(D) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

Balance Sheet (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Guaranteed Loans (in millions of dollars)

Program and Financing (in millions of dollars)

Status of Direct Loans (in millions of dollars)

Balance Sheet (in millions of dollars)

(in millions of dollars)

(including cancellation and transfer of funds)

(1) subclause (I)(bb) and subclause (II) of clause (iv) of such subparagraph (C) shall not be in effect;

(2) unless, upon application by a development company and after determining that the refinance loan is needed for good cause, the Administrator of the Small Business Administration waives this paragraph, a development company shall limit its financings under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) so that, during any fiscal year, new financings under such subparagraph (C) shall not exceed 50 percent of the dollars loaned under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) during the previous fiscal year; and

(3) clause (iv)(I)(aa) of such subparagraph (C) shall be applied by substituting "job creation and retention" for "job creation".

(b) Section 303(b)(2)(B) of the Small Business Investment Act of 1958 (15 U.S.C. 683(b)(2)(B)) is amended by striking "$225,000,000" and inserting "$350,000,000".]

(a) in paragraph (4)—

(1) by striking subparagraph (E); and

(2) by redesignating subparagraph (F) as subparagraph (E); and

(b) in paragraph (7), by striking subparagraph (B).

(a) Section 21(a)(7)(A) of the Small Business Act (15 U.S.C. 648(a)(7)(A)) is amended by—

(1) striking the word "or" at the end of clause (i);

(2) striking the period at the end of clause (ii) and insert "; or"; and

(3) adding the following new clause (iii): "(iii) the Administrator considers such a disclosure to be necessary for the purpose of conducting a program evaluation.".

(b) Section 29(n)(1) of the Small Business Act (15 U.S.C. 656(n)(1)) is amended by—

(1) striking the word "or" at the end of subparagraph (A);

(2) striking the period at the end of subparagraph (B) and insert "; or"; and

(3) adding the following new subparagraph (C): "(C) the Administrator considers such a disclosure to be necessary for the purpose of conducting a program evaluation.".