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SMALL BUSINESS ADMINISTRATION The budget provides $701 million in new budget authority for the Small Business Administration (SBA). When combined with anticipated carryover and decreased loan subsidy costs, this funding level allows SBA to continue to expand assistance to small businesses at a reduced cost to the Federal taxpayer. In 1998, SBA proposes to continue to increase its reliance on its private sector partners. Three initiatives will allow SBA to complete its transition from physically servicing and liquidating its $36 billion loan portfolio to overseeing its private sector partners. First, 7(a) General Business lenders will be required to service and liquidate all loans approved after FY 1997. Second, SBA will sell its $10 billion portfolio of defaulted guarantees and direct loans beginning in FY 1998. Third, SBA requests $18 million to improve its portfolio monitoring capabilities. These proposals will allow SBA to focus its limited resources on expanding assistance to small businesses while relying on its private sector partners for ‘‘backend’’ activities. The budget estimates that these proposals will lead to lower credit, administrative, and subsidy costs. The budget proposes growth in programs to expand access to capital, assist disadvantaged small businesses, and provide education and training. As part of SBA’s goal of stretching taxpayers’ dollars, the budget also assumes that (1) Small Business Development Companies will charge counseling fees to substitute for a reduction in federal grants and proposes that (2) disaster loan borrowers pay an interest rate equal to the rate on Treasury securities of comparable maturity. Federal Funds General and special funds: SALARIES AND EXPENSES For necessary expenses, not otherwise provided for, of the Small Business Administration as authorized by Public Law 103–403, including hire of passenger motor vehicles as authorized by 31 U.S.C. 1343 and 1344, and not to exceed $3,500 for official reception and representation expenses, ø$223,547,000, of which $1,000,000 shall only be available for obligation and expenditure for projects jointly developed, implemented and administered with the Minority Business Development Agency of the Department of Commerce¿ $246,100,000: Provided, That the Administrator is authorized to charge fees to cover the cost of publications developed by the Small Business Administration, and certain loan servicing activities: Provided further, That notwithstanding 31 U.S.C. 3302, revenues received from all such activities shall be credited to this account, to be available for carrying out these purposes without further appropriations: Provided further, That ø$75,500,000¿ $57,500,000 shall be available to fund grants for performance in fiscal year ø1997¿ 1998 or fiscal year ø1998¿ 1999 as authorized by section 21 of the Small Business Act, as amended. øIn addition, for expenses not otherwise provided for, of the Small Business Administration, $11,500,000, of which: $3,000,000 shall be available for a grant to continue the WVHTC Foundation outreach program to assist small business development; $7,000,000 shall be available for a grant to the Center for Rural Development in Somerset, Kentucky, for small business and rural technology development assistance; $1,000,000 shall be available for a grant to Indiana State University for the renovation and equipping of a training facility, to assist in creating small business and economic development opportunities; and $500,000 shall be available for a continuation grant to the Center for Entrepreneurial Opportunity in Greensburg, Pennsylvania, to provide for small business consulting and assistance.¿ (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.) Program and Financing (in millions of dollars) Identification code 73–0100–0–1–376 Obligations by program activity: Government Contracting and Minority Enterprise Development .................................................................. 00.02 Disaster assistance ....................................................... 00.03 Economic development .................................................. 00.04 Management and administration .................................. 00.05 Executive direction ......................................................... 00.06 General counsel ............................................................. 00.07 Congressional and legislative affairs ........................... 00.08 Hearings and appeals ................................................... 00.09 Communications and publications ................................ 00.11 Advocacy ........................................................................ 00.12 Field operations ............................................................. 00.13 Equal Employment Opportunity and civil rights compliance ....................................................................... 00.14 Regional and district offices ......................................... 00.15 Chief financial officer .................................................... 1996 actual 1997 est. 1998 est. 00.01 10.00 Total obligations ........................................................ Budgetary resources available for obligation: Unobligated balance available, start of year: Uninvested balance ................................................... 22.00 New budget authority (gross) ........................................ 22.22 Unobligated balance transferred from other accounts 22.30 Unobligated balance expiring ........................................ 21 112 117 83 2 5 1 1 3 5 3 21 126 132 75 1 5 1 1 2 5 4 32 123 127 77 1 5 1 1 2 5 5 2 123 10 2 123 9 2 126 10 488 507 517 21.40 23.90 23.95 24.40 Total budgetary resources available for obligation 488 508 517 New obligations ............................................................. –488 –507 –517 Unobligated balance available, end of year: Uninvested balance ................................................... ................... ................... ................... New budget authority (gross), detail: Current: 40.00 Appropriation ............................................................. Permanent: 68.00 Spending authority from offsetting collections: Offsetting collections (cash) ..................................... 70.00 4 ................... ................... 487 508 517 2 ................... ................... –5 ................... ................... Total new budget authority (gross) .......................... Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Appropriation ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 73.40 Adjustments in expired accounts .................................. 74.40 Unpaid obligations, end of year: Obligated balance: Appropriation ............................................................. 219 235 246 268 273 271 487 508 517 72.40 174 182 181 488 507 517 –477 –508 –514 –3 ................... ................... 182 181 184 86.90 86.93 86.97 Outlays (gross), detail: Outlays from new current authority .............................. Outlays from current balances ...................................... Outlays from new permanent authority ......................... 169 40 268 180 55 273 188 55 271 87.00 Total outlays (gross) ................................................. 477 508 514 Offsets: Against gross budget authority and outlays: Offsetting collections (cash) from: Federal sources: 88.00 Payments from business loan program account ............................................................ –97 88.00 Payments from disaster loan program account –164 88.00 Reprogramming of disaster loan subsidy ........ ................... 88.40 Non-Federal sources ............................................. –7 –95 –97 –127 –173 –50 ................... –1 –1 88.90 Total, offsetting collections (cash) .................. –268 –273 –271 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 219 209 235 235 246 243 987 988 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued General and special funds—Continued SALARIES AND EXPENSES—Continued Summary of Budget Authority and Outlays (in millions of dollars) 1996 actual 1997 est. Enacted/requested: Budget Authority ..................................................................... 219 235 Outlays .................................................................................... 209 235 Legislative proposal, subject to PAYGO: Budget Authority ..................................................................... .................... .................... Outlays .................................................................................... .................... .................... Total: Budget Authority ..................................................................... Outlays .................................................................................... 219 209 235 235 1998 est. 246 243 1 1 247 244 This appropriation funds salaries, other administrative expenses of the Small Business Administration (SBA), and business education and training programs. The SBA provides assistance to small businesses and to victims of natural disasters through these primary program areas: Economic Development.—The Associate Deputy Administrator (ADA) for this function exercises direction over the following SBA program offices: Financial Assistance; Surety Bond Guarantees; Investment; International Trade; Women’s Business Ownership; Small Business Development Centers; Veterans’ Affairs; Native-American Affairs; and Business Initiatives, which includes the Service Corps of Retired Executives. These offices are responsible for the administration of all SBA credit and business education training programs. In 1998, SBA plans to continue providing business management training and tools for the small business community through U.S. Export Assistance Centers, and Business Information Centers. In addition, through new programs such as LowDoc, FASTRAK, and the Export Working Capital Programs (EWCP), SBA has begun targeting financial assistance to segments of the population that have historically been under represented in SBA’s credit programs. The SBA’s efforts to reduce unnecessary paperwork and make the agency more customer-friendly have attracted new banks interested in establishing partnerships with SBA. Government Contracting and Minority Enterprise Development.—The Associate Deputy Administrator for this function exercises direction over the following SBA program offices: Government Contracting; Minority Enterprise Development; Technology; and Size Standards. These offices are responsible for effectively advocating for small businesses in the area of government contracting. Government contracting activities are aimed at ensuring that small businesses receive a fair share of Federal procurement awards. The Minority Enterprise Development programs provide assistance to socially and economically disadvantaged small business concerns, primarily in the areas of business development and Federal procurement. Through this office, SBA assists firms that are owned by disadvantaged persons to help them develop into viable competitive businesses in a reasonable period of time. Disaster Assistance.—The Associate Administrator for the Office of Disaster Assistance oversees the Disaster Loan Program which provides physical disaster loans to individuals and businesses of any size, and economic injury loans to small businesses unable to obtain credit elsewhere. In addition to Presidentially-declared disasters, the program provides loans when a declaration is made by the SBA Administrator. Program eligibility is based on financial criteria and interest rates are set according to statutory formulas. In recent years, the average interest rate on disaster loans has been about four percent. The budget proposes to reduce the cost of disaster loan subsidies by increasing the interest rate on disaster loans to the Treasury’s cost of borrowing. Advocacy.—The Chief Counsel for Advocacy is charged by law to be an independent voice for small business within the government, and to: (1) examine the role of small business in the economy and its contribution to competition; (2) evaluate financial markets and the credit needs of small business; (3) measure the costs of regulation on small business; and, (4) monitor agency compliance with the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Program Performance Small Business Development Centers (SBDCs).—The SBDCs provide long term counseling to small businesses at about 1,000 locations in 50 states. In FY 1996, nearly 600,000 customers were helped of which roughly 40 percent of the customers were women and 17 percent were minorities. Service Corps of Retired Executives (SCORE).—Using oneon-one counseling and workshops SCORE reaches about 270,000 business owners annually using approximately 13,000 counselors through approximately 400 chapters located across the country. Counseling costs to the Government are less than $3 per hour. For 1998, the budget proposes a funding level of $3.5 million for this program. Microloan Technical Assistance.—The Microloan Program helps support the Administration’s initiative to put those on welfare to work by providing opportunities to start up small businesses using SBA-guaranteed microloans. Microloan Technical Assistance grants ensure that microloan borrowers are provided the necessary education and training needed for them to succeed. The budget provides $16.5 million in Microloan grants. Outreach Initiatives.—The SBA is actively involved in fostering the development of entrepreneurial skills and economic development opportunities involving veterans, women and businesses engaged in international trade. The budget proposes a 1998 funding level of approximately $1 million to support veterans, women, and international trade outreach initiatives. Women’s Demonstration Program.—Through this program the SBA makes awards to private entities to deliver entrepreneurial training programs for women business owners or those interested in starting a business. In 1996, 54 demonstration sites, or business centers, were operating in 28 states and Washington, DC. Each offers financial, management, marketing and technical assistance to current and potential women business owners. This budget proposes $4 million for this program in 1998 to establish 10 to 12 new sites, and to continue two initiatives begun in 1996: the Women’s Business Intranet (which links all of the demonstration sites) and a virtual demonstration site on the Internet, which will allow women nationwide to have access to these services. Business Information Centers (BIC).—These centers offer self-help hardware, software and reference materials, and onsite counseling provided by SCORE volunteers. Individuals who are in business or are interested in starting a business will find many resources specifically targeted at helping businesses grow or find new market niches. For 1998, the budget proposes $500 thousand for this program. Native American Affairs.—This program supports the economic development needs of reservation communities. In 1996, over 400 loans were made to Native Americans under the agency’s 7(a) program, amounting to more than $66 million in loans. The agency also opened 15 new Tribal Business Information Centers (TBICs) to deliver business education and training on reservations. Business Assistance Publications.—The SBA provides publications on a self-funding basis and distributes an estimated 300,000 items to the public each year. One Stop Capital Shops (OSCS).—One Stop Capital Shops are located in Empowerment Zone, Enterprise Community, and Rural Economic Area Partnership communities. The objectives of these programs are to stimulate and sustain eco- SMALL BUSINESS ADMINISTRATION nomic development in these economically distressed and underserved areas. The OSCS is a delivery mechanism for existing SBA programs that emphasize the use of public/private relationships. The SBA serves as a catalyst by offering its business development and capital resources together in one location with other federal, state, local, and private sector resources in order to leverage and complement those resources and provide better customer service. Based on the performance of the 15 shops, the SBA plans to expand the number in 1998. Other Services.—The SBA co-sponsors a variety of special activities with the for-profit, not-for-profit, and public sectors. Many co-sponsored events cost customers between $35 and $100, with comparable commercially-sponsored training costing $300 to $800. Among the most visible public/private cosponsorships undertaken is SBA Online, SBA’s electronic bulletin board for small businesses. The SBA Online system has been principally underwritten by Sprint, which has paid the cost of all toll-free connections to the system. Between October, 1992, and January, 1996, more than one and a half million connections to SBA Online were logged, and more than 120,000 individuals used the system on a regular basis. Performance Measures Program and Policy Goals under the GPRA.—President Clinton has made small business formation and growth an essential part of his national economic plan. He has asked the Small Business Administration to focus on five program and policy goals as part of the plan: (1) improve small businesses’ access to capital; (2) reduce the regulatory and paperwork burden on small firms; (3) offer quality business education, information, and training; (4) serve as the President’s eyes and ears, reporting back to him on the needs of small business, and function as an ‘‘advocate’’ for small businesses; and, (5) help disaster victims to rebuild so they can contribute again to the Nation’s economy. SBA Strategic Plan.—It is the mission of the SBA to serve America’s small businesses in the most cost effective manner possible to help preserve free competition, to contribute to strengthening the Nation’s economy, and to assist disasterravaged communities recover from their losses. Performance Indicators.—In the long run, the Agency’s performance goal is true economic development and the capacity to assess how SBA assistance contributes to helping small businesses succeed. A variety of credit and non-credit business output and outcome measures are included in the SBA strategic and annual performance plan to measure progress in the following areas: businesses created, maintained, and/or expanded; jobs created, and revenues generated; cost effective access to quality training, counseling and information; private capital leveraged more effectively; improved customer satisfaction; reduced paperwork, more understandable regulations, and increased compliance; increased use of resource partners and more flexible lending; small businesses receiving an increased share of Federal procurement and research; efficient delivery of disaster service and a greater satisfaction level; and, delivery of SBA programs that ‘‘work better and cost less.’’ 1998 Proposals For agency operating expenses, the budget proposes to continue SBA’s efforts to increase administrative efficiencies and enhance the delivery of its programs. Although the agency’s programs have grown substantially in recent years, SBA’s administrative budget has been able to decline gradually as efficiencies have been realized. Total employment at the agency, excluding disaster-funded positions which fluctuate with the incidence of natural disaster activity, has been reduced by more than 22 percent since the end of 1992. 989 Federal Funds—Continued Portfolio monitoring.—Over the past four years, SBA has aggressively increased access to capital, reduced staffing, and delegated authority to its private sector partners. In order to support these trends and to maintain a quality portfolio, the budget requests $18 million for improving portfolio monitoring. This initiative, which is a key part of the 1998 7(a) General Business Loan Guaranty Program proposal, will allow SBA to: recruit expertise in lender oversight; develop the necessary in-house systems for lender monitoring; contract with a financial advisor on asset disposition; and establish performance standards for SBA lenders similar to those developed by other financial institutions such as Fannie Mae. The ADA for Economic Development will re-engineer portfolio management, incorporate the best practices of the other financial institutions with lender oversight, and develop lender performance goals. The Chief Information Officer will direct the design of a corporte database that provides timely information on portfolio performance, and the Chief Financial Officer will guide the collection of financial information, analysis and the reporting needed to support this enhanced oversight capability. SBDC counseling fees.—The budget requests $57.5 million for the SBDC program, $16 million below the 1997 level. The Administrator assumes that SBDCs will charge fees for counseling services to offset this reduction in Federal support. Disadvantaged business development.—The budget includes additional resources that will enable SBA to assume increased responsibilities pursuant to the U.S. Department of Justice’s Affirmative Action Review. The budget provides $1.9 million to re-engineer business processes and improve SBA’s ability to provide support for Small Disadvantaged Businesses. The budget also proposes to increase the 7(j) program to $9.2 million in order to provide increased management and technical assistance and training for the development of firms owned by socially- and economically-disadvantaged individuals. Assistance to these 8(a) program participants will be tailored to the developmental needs of individual firms. The existing 7(j) Executive Education Program will be expanded to four additional sites to reach a geographically wider audience of new entrepreneurs. PASS database.—The 1998 budget includes $1.2 million for the Procurement Automated Source System (PASS). PASS is the cornerstone of SBA’s system for posting the profiles of small businesses interested in procurement opportunities with the federal government or its large, prime contractors. The system also will accept data required to support the certification process as recommended by the Department of Justice’s Affirmative Action Review and will be an important component of new efforts to ensure compliance with federal acquisition regulations. Object Classification (in millions of dollars) Identification code 73–0100–0–1–376 11.1 11.3 11.5 11.9 12.1 21.0 22.0 23.1 23.3 24.0 25.2 26.0 31.0 41.0 92.0 92.0 Personnel compensation: Full-time permanent .................................................. Other than full-time permanent ............................... Other personnel compensation .................................. Total personnel compensation .............................. Civilian personnel benefits ............................................ Travel and transportation of persons ............................ Transportation of things ................................................ Rental payments to GSA ................................................ Communications, utilities, and miscellaneous charges Printing and reproduction .............................................. Other services ................................................................ Supplies and materials ................................................. Equipment ...................................................................... Grants, subsidies, and contributions ............................ Undistributed: Undistributed (disaster loan making) ....................... Undistributed (disaster loan servicing) .................... 1996 actual 144 7 4 1997 est. 148 7 4 1998 est. 152 7 4 155 159 163 39 40 41 5 5 5 1 ................... ................... 26 25 27 12 12 13 2 1 1 35 31 54 2 1 1 3 1 1 96 106 88 93 19 104 22 102 21 990 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued General and special funds—Continued 22.22 Unobligated balance transferred from other accounts ................... SALARIES 23.90 23.95 24.40 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Uninvested balance ................................................... AND EXPENSES—Continued Object Classification (in millions of dollars)—Continued 1996 actual Identification code 73–0100–0–1–376 99.9 Total obligations ........................................................ 1997 est. 488 11 –10 1 ................... 11 –11 11 –11 1 ................... ................... 1998 est. 507 517 Personnel Summary 40.00 New budget authority (gross), detail: Appropriation .................................................................. Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Appropriation ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.40 Unpaid obligations, end of year: Obligated balance: Appropriation ............................................................. 9 9 11 1 10 –10 1 11 –10 1 11 –11 1 1 1 72.40 1996 actual Identification code 73–0100–0–1–376 Total compensable workyears: 1001 Full-time equivalent employment .................................. 1005 Full-time equivalent of overtime and holiday hours 1997 est. 4,640 300 1998 est. 4,450 290 4,522 300 Note.—The personnel summary includes regular (non-disaster) full-time equivalents (FTEs) of 3,023, 2,985, and 3,047 in 1996, 1997, and 1998, respectively. SALARIES AND Outlays (gross), detail: Outlays from new current authority .............................. Outlays from current balances ...................................... 8 2 8 2 10 1 87.00 Total outlays (gross) ................................................. 10 10 11 89.00 90.00 EXPENSES 86.90 86.93 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 9 10 9 10 11 11 (Legislative proposal, subject to PAYGO) Program and Financing (in millions of dollars) 1996 actual Identification code 73–0100–4–1–376 1997 est. 1998 est. 00.03 Obligations by program activity: Economic development .................................................. ................... ................... 1 10.00 Total obligations (object class 25.2) ........................ ................... ................... 1 22.00 23.95 Budgetary resources available for obligation: New budget authority (gross) ........................................ ................... ................... New obligations ............................................................. ................... ................... 1 –1 42.00 New budget authority (gross), detail: Transferred from other accounts ................................... ................... ................... 1 73.10 73.20 Change in unpaid obligations: New obligations ............................................................. ................... ................... Total outlays (gross) ...................................................... ................... ................... 1 –1 86.90 Outlays (gross), detail: Outlays from new current authority .............................. ................... ................... 1 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ ................... ................... Outlays ........................................................................... ................... ................... 1 1 In 1998, the budget proposes that fees collected for SBIC examination and licensing be collected by the Salaries and Expenses Account to fund the costs of contracting out for SBIC examination and licensing. OFFICE OF This appropriation provides funds for agency-wide audit, investigative, and inspection/evaluative functions to identify and recommend corrections of management or program deficiencies which may create conditions for fraud, waste, or abuse. The audit function provides internal audit, external audit, and inspection/evaluation oversight activities. Internal audits assess the general management and efficiency of SBA program operations. External audits review all program participants and their compliance with SBA regulations and procedural requirements. Inspection/evaluations address specific requirements of program management and effectiveness. The investigative function detects and investigates allegations of illegal and improper activities involving agency personnel, programs, and operations. The 1998 budget requests $10.6 million to support an increase in staff required for critical oversight of SBA’s burgeoning business loan portfolio, the disaster assistance program, and other programs. The OIG oversight efforts and investigative activities: (1) enhance the SBA’s efficiency and effectiveness; (2) serve to deter fraud and abuse in agency programs; and (3) consistently demonstrated a high rate of return on invested funds. Object Classification (in millions of dollars) For necessary expenses of the Office of Inspector General in carrying out the provisions of the Inspector General Act of 1978, as amended (5 U.S.C. App. 1–11, as amended by Public Law 100–504), ø$9,000,000¿ $10,600,000. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.) 7 1 2 8 2 1 8 2 1 99.9 Total obligations ........................................................ 10 11 11 Personnel Summary 1001 00.01 00.02 00.03 00.04 10.00 Obligations by program activity: Management and counsel ............................................. Audit ............................................................................... Investigations ................................................................. Disaster .......................................................................... 2 3 4 1 Total obligations ........................................................ 10 Budgetary resources available for obligation: Unobligated balance available, start of year: Uninvested balance ................................................... 22.00 New budget authority (gross) ........................................ 2 9 1998 est. Personnel compensation: Full-time permanent ............. Civilian personnel benefits ............................................ Undistributed ................................................................. Identification code 73–0200–0–1–376 Program and Financing (in millions of dollars) 1996 actual 1997 est. 11.1 12.1 92.0 INSPECTOR GENERAL Identification code 73–0200–0–1–376 1996 actual Identification code 73–0200–0–1–376 1997 est. 1998 est. 2 3 4 2 11 2 3 5 1 11 21.40 1 ................... 9 11 Total compensable workyears: Full-time equivalent employment ............................................................... 1996 actual 109 1997 est. 110 1998 est. 112 Public enterprise funds: SURETY BOND GUARANTEES REVOLVING FUND For additional capital for the ‘‘Surety Bond Guarantees Revolving Fund’’, authorized by the Small Business Investment Act, as amended, ø$3,730,000¿ $3,500,000, to remain available without fiscal year limitation as authorized by 15 U.S.C. 631 note. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.) SMALL BUSINESS ADMINISTRATION 991 Federal Funds—Continued Program and Financing (in millions of dollars) 1996 actual Identification code 73–4156–0–3–376 1997 est. 3100 3300 1998 est. NET POSITION: Appropriated capital ................................ Cumulative results of operations ............ 319 –315 321 –320 326 –317 326 –317 Obligations by program activity: Total obligations (object class 42.0) ............................ 3999 Total net position ................................ 4 1 9 9 16 16 16 4999 Total liabilities and net position ............ 42 42 45 45 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance ...................................................................... 22.00 New budget authority (gross) ........................................ 2 16 1 22 6 21 Credit accounts: 18 –16 23 –16 27 –16 1 6 11 10.00 21.90 23.90 23.95 24.90 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Fund balance ...................................................................... New budget authority (gross), detail: Current: 40.00 Appropriation ............................................................. Permanent: 68.00 Spending authority from offsetting collections: Offsetting collections (cash) ..................................... 3 4 4 13 17 17 70.00 Total new budget authority (gross) .......................... 16 21 21 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Fund balance ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.90 Unpaid obligations, end of year: Obligated balance: Fund balance ............................................................. 40 16 –15 41 16 –18 39 16 –18 41 39 37 72.90 86.90 86.93 86.97 86.98 87.00 Outlays (gross), detail: Outlays from new current authority .............................. 2 1 1 Outlays from current balances ...................................... ................... ................... ................... Outlays from new permanent authority ......................... 13 17 17 Outlays from permanent balances ................................ ................... ................... ................... Total outlays (gross) ................................................. Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. 15 18 18 BUSINESS LOANS PROGRAM ACCOUNT For øthe cost of direct loans, $1,691,000, and for¿ the cost of guaranteed loans, ø$182,017,000¿ $173,235,000, as authorized by 15 U.S.C. 631 note, of which ø$2,317,000, to be available until expended, shall be for the Microloan Guarantee Program, and of which $40,510,000¿ $20,233,000 for the Small Business Investment Company Debentures Program and the Small Business Investment Company Participating Securities Program shall remain available until September 30, ø1998¿ 1999: 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 during fiscal year ø1997¿ 1998, commitments to guarantee loans under section 503 of the Small Business Investment Act of 1958, as amended, shall not exceed øthe amount of financings authorized under section 20(n)(2)(B) of the Small Business Act, as amended¿ $2,300,000,000, and direct loan obligations and commitments to guarantee loans under section 7(m) of the Small Business Act of 1953, as amended, shall not exceed $44,086,000. In addition, for administrative expenses to carry out the direct and guaranteed loan programs, $94,000,000, which may be transferred to and merged with the appropriations for Salaries and Expenses. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.) Unavailable Collections (in millions of dollars) Identification code 73–1154–0–1–376 1996 actual 1997 est. Balance, start of year: Balance, start of year .................................................... ................... ................... Receipts: 02.01 Business loan program downward reestimate of subsidy ............................................................................ ................... 188 01.99 –13 Net budget authority and outlays: 89.00 Budget authority ............................................................ 90.00 Outlays ........................................................................... –17 3 2 –17 5 1 4 1 04.00 07.99 Total: Balances and collections .................................... ................... Total balance, end of year ............................................ ................... 188 188 1998 est. 188 50 238 238 Program and Financing (in millions of dollars) Under this program, the Small Business Administration guarantees a portion of the losses sustained by a surety company as a result of the issuance of a bid, payment, and/ or performance bond to a small business concern. In 1998, the budget proposes a program level anticipated to accommodate expected demand from the preferred surety bond program authorized in P.L. 100–590. The SBA will continue to rely on both preferred and prior approval sureties to deliver this program, with SBA oversight. 00.01 00.02 00.07 00.08 00.09 00.10 Obligations by program activity: Direct loan subsidy ........................................................ Guaranteed loan subsidy ............................................... Reestimate of loan guarantee subsidy ......................... Interest on reestimates of loan guarantee subsidy Administrative expenses ................................................ Microloan grants (in S&E) ............................................. 1 117 245 29 93 4 2 2 226 180 183 ................... 15 ................... 94 94 1 3 Statement of Operations (in millions of dollars) 10.00 Total obligations ........................................................ 489 521 Identification code 73–4156–0–3–376 1995 actual 1996 actual 1997 est. 1998 est. 0101 0102 Revenue ................................................... Expense .................................................... 20 –18 16 –16 22 –16 21 –16 0109 Net loss ................................................... 2 .................. 6 5 Balance Sheet (in millions of dollars) Identification code 73–4156–0–3–376 1995 actual 1996 actual 1997 est. 1998 est. ASSETS: 1101 Federal assets: Fund balances with Treasury ............................................... 1206 Non-Federal assets: Receivables, net ..... 40 2 43 .................. 43 2 43 2 1999 Identification code 73–1154–0–1–376 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance ...................................................................... 22.00 New budget authority (gross) ........................................ 22.21 Unobligated balance transferred to other accounts 22.30 Unobligated balance expiring ........................................ 1996 actual 1997 est. 1998 est. 279 21.90 23.90 23.95 24.90 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Fund balance ...................................................................... 41 77 33 527 478 267 –2 ................... ................... –1 ................... –23 565 –489 77 555 –521 277 –279 33 ................... 42 43 45 45 38 41 36 38 41 36 36 279 274 199 ................... 527 478 267 36 2999 253 70.00 Total assets ........................................ LIABILITIES: 2201 Non-Federal liabilities: Accounts payable New budget authority (gross), detail: Current: 40.00 Appropriation ............................................................. Permanent: 60.05 Appropriation (indefinite) .......................................... Total liabilities .................................... Total new budget authority (gross) .......................... 267 992 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued 2340 2340 Credit accounts—Continued BUSINESS LOANS PROGRAM ACCOUNT—Continued 2349 Program and Financing (in millions of dollars)—Continued Identification code 73–1154–0–1–376 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Appropriation ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.40 Unpaid obligations, end of year: Obligated balance: Appropriation ............................................................. 1996 actual 1997 est. 1998 est. 72.40 129 489 –522 96 521 –458 160 279 –272 96 160 165 86.90 86.93 86.97 Outlays (gross), detail: Outlays from new current authority .............................. Outlays from current balances ...................................... Outlays from new permanent authority ......................... 119 129 274 176 168 83 104 199 ................... 87.00 Total outlays (gross) ................................................. 522 458 272 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 527 522 478 458 267 272 Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars) Identification code 73–1154–0–1–376 1996 actual 1997 est. 1998 est. Direct loan levels supportable by subsidy budget authority: 1150 Micro loans .................................................................... 9 24 19 1159 Total direct loan levels ............................................. Direct loan subsidy (in percent): 1320 Micro loans .................................................................... 9 24 19 15.69 8.86 10.28 1329 15.69 8.86 10.28 1 2 2 Total subsidy budget authority ................................. Direct loan subsidy outlays: 1340 Micro loans .................................................................... 1 2 2 2 2 2 1349 Total subsidy outlays ................................................ 2 2 2 Guaranteed loan levels supportable by subsidy budget authority: 2150 General business—7(a) ................................................ 2150 General business—7(a) DELTA ..................................... 2150 Section 504 .................................................................... 2150 Section 504 DELTA ......................................................... 2150 SBIC debentures ............................................................ 2150 SBIC participating securities ......................................... 2150 Micro loan guarantees ................................................... 7,328 23 2,443 10 109 238 2 7,815 48 2,650 50 300 410 19 6,595 88 2,300 139 376 456 25 10,153 11,292 9,979 1.06 3.15 0.00 0.57 15.46 9.00 11.95 2.54 4.57 0.00 1.01 3.19 3.29 8.21 2.32 3.25 0.00 0.72 2.30 2.54 8.12 Weighted average subsidy rate ................................. Direct loan subsidy budget authority: 1330 Micro loans .................................................................... 1339 2159 Total loan guarantee levels ...................................... Guaranteed loan subsidy (in percent): 2320 General business—7(a) ................................................ 2320 General business—7(a) DELTA ..................................... 2320 Section 504 .................................................................... 2320 Section 504 DELTA ......................................................... 2320 SBIC debentures ............................................................ 2320 SBIC participating securities ......................................... 2320 Micro loan guarantees ................................................... 2329 Weighted average subsidy rate ................................. 1.15 2.12 1.51 Guaranteed loan subsidy budget authority: 2330 General business—7(a) ................................................ 78 199 153 2330 General business—7(a) DELTA ..................................... 1 2 3 2330 Section 504 .................................................................... ................... ................... ................... 2330 Section 504 DELTA ......................................................... ................... 1 1 2330 SBIC debentures ............................................................ 17 10 9 2330 SBIC participating securities ......................................... 21 14 12 2330 Micro loan guarantees ................................................... ................... 2 2 2339 Total subsidy budget authority ................................. 117 228 180 Guaranteed loan subsidy outlays: 2340 General business—7(a) ................................................ 103 135 149 2340 General business—7(a) DELTA ..................................... ................... 1 2 2340 Section 504 .................................................................... 5 1 ................... 2340 Section 504 DELTA ......................................................... ................... ................... 1 2340 SBIC debentures ............................................................ 17 10 9 SBIC participating securities ......................................... 21 Micro loan guarantees ................................................... ................... Total subsidy outlays ................................................ 146 14 1 12 2 162 175 As required by the Federal Credit Reform Act of 1990, this account records, for this program, 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 this program. The subsidy amounts are estimated on a present value basis; the administrative expenses are estimated on a cash basis. Budget authority is not requested for the section 504 and microloan programs in 1998. Instead, an appropriated loan level that currently reflects expected needs is requested. General Business Assistance.—The Small Business Administration guarantees loans under its section 7(a) General Business Loan program to small businesses that are unable to obtain private financing. These loans must be of such value or so secured as to reasonably assure repayment. No loan may be made unless the financial assistance is not otherwise available on reasonable terms. Under the guarantee plan, the SBA agrees to purchase the guaranteed portion of the loan only upon default. Investment Company Assistance.—A primary function of small business investment companies is to provide a source of equity capital or long-term loans to new or expanding small businesses. The Small Business Investment Act, as amended, authorizes the SBA to guarantee the timely payment of all principal and interest, as scheduled, on debentures issued by such companies. In addition, since 1994, the SBA has guaranteed the performance of participating securities issued by these companies. Development Company Assistance.—Under the Small Business Investment Act, the SBA makes loans through State and local development companies to small businesses. Through these programs, the SBA promotes economic development and job creation and maintenance by stimulating the flow of long-term financing to small business concerns for projects involving fixed assets. These projects are designed to create or retain a meaningful number of jobs in the communities affected, with a special emphasis on distressed areas. Approximately 243,500 jobs were created or maintained through the $2.4 billion in loans guaranteed under the Development Company programs in 1996. Program Performance Program performance and policy goals.—SBA has the following program performance and policy objectives to support its first GPRA goal of Improving Access to Capital: (1) focus lending on ‘‘traditionally under-served’’ small businesses; (2) offer specialized financing, such as venture capital, export financing, and bonding opportunities; (3) improve methods of providing credit assistance through electronic lending, less documentation, centralized functions, and one-stop capital access points; (4) reduce costs by maintaining high quality portfolio through an improved liquidation process; and, (5) effectively implement a loan asset sales program. Performance Indicators.—During the past three years SBA has focused on quantitative, measureable lending goals for underserved segments of the small business market in each district, e.g., minorities, women, and small exporters. The SBA began this process in 1994 when it established internal performance agreements that contained two-year lending goals. Using goal monitoring, the agency is able to track, on a regular basis, the status of each district office’s progress in meeting these goals. Appropriate finance program effectiveness assessment involves the consideration of a number of indicators. First, effec- SMALL BUSINESS ADMINISTRATION 993 Federal Funds—Continued tiveness can be assessed by loan-making activity levels—the number and dollar amount of loans guaranteed by SBA. Second, effectiveness can be measured by the health of the loan portfolio—its currency and default figures, and the agency’s ultimate record on loan recovery. Beyond these very tangible indicators of success are the more difficult-to-measure indicators. These include such things as the economic benefits that accrue to the small business, its employees, and the community in which it is located. The number and dollar volume of loans made under the section 7(a) loan program has increased dramatically in recent years. In 1991, SBA made or guaranteed approximately 9,000 loans totaling about $4 billion. In 1996, those figures had risen to approximately 46,000 loans totaling about $7.3 billion. The section 504 program has also shown impressive growth. In 1991, the SBA provided about 1,400 financings totaling nearly $400 million. By 1996, those figures had increased to about 6,900 financings for $2.4 billion. Performance measures to be used in 1998 to assess progress in achieving the above goals follow. Outputs • Financial viability: higher percentages of business skill in business after five years, and higher percentage of borrowers who fully repay loans. • Numbers of businesses created, expanded and/or maintained. • Jobs created and revenue generated. Object Classification (in millions of dollars) Identification code 73–1154–0–1–376 1996 actual 1997 est. 1998 est. 25.2 41.0 Other services ................................................................ Grants, subsidies, and contributions ............................ 97 392 95 426 97 182 99.9 Total obligations ........................................................ 489 521 279 Outcomes • Number and dollar value of guaranteed loans. • Percentages of loans going to underserved markets. • Client access to SBA services (customer satisfaction). • Percentage of loans taken that are current. • More flexible credit delivery instruments developed. Loan asset sales: As part of SBA’s transition from loan servicing to lender oversight, the budget proposes the sale of all direct and defaulted business loans in FYs 1998 and 1999. (SBA disaster loans will be sold over a three-year period.) These sales will allow SBA to focus its limited resources on expanding access to capital rather than servicing and liquidating a growing portfolio. The budget estimates that SBA’s business loan assets will be sold at a net gain to the Government. Microloan Program: The Agency proposes to continue the Microloan direct and guarantee loan programs in 1998, using carryover funding remaining from 1997. Section 7(a): Reflecting an improvement of the 7(a) loan portfolio and implementation of SBA’s Liquidation Improvement Project, the baseline (current services) 7(a) subsidy rate declines from 2.54 percent to 2.32 percent. The budget proposes to reduce this rate to 1.80 percent through a threepart policy initiative. First, lenders will be required to service and liquidate all loans approved after 1997. This initiative builds on SBA’s record of success in working with lenders under the LowDoc, Preferred Lender, and Fastrack programs, which are now serviced and liquidated by 7(a) lenders. This initiative will also allow SBA to focus its resources on expanding access to capital and portfolio monitoring, rather than physically servicing and liquidating defaulted loans. Second, SBA will establish a deferred purchase policy for all new loans, requiring lenders to liquidate all business chattel prior to SBA’s default claim payment, reducing the Government’s present value default costs. Third, SBA will invest $18 million in portfolio monitoring improvements. This funding will be used to recruit expertise in lender oversight, establish financial performance goals for private sector partners, create a database for tracking lender and portfolio performance, and develop a management information system to provide timely and accurate information to agency management. In combination, these three proposals will lower the 7(a) subsidy rate from 2.32 percent to 1.80 percent, reducing the subsidy budget authority needed to fund the requested $8.5 billion loan level by $44.2 million. This reduction reflects the estimated improvement in defaults and an increase in recoveries resulting from improved monitoring of servicing and more efficient liquidation performed by SBA lenders. The lower rate also reflects the present value savings resulting from the deferred purchase. Section 504: The 1998 subsidy rate reflects improved 504 loan performance. However, this improvement is more than offset by reductions in the estimate of recoveries on defaulted loans. Therefore, to maintain the baseline subsidy rate at zero, the budget increases the pass-through fee to the 1997 authorized level of .9375%. BUSINESS LOAN PROGRAM ACCOUNT (Legislative proposal, not subject to PAYGO) Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars) Identification code 73–1154–2–1–376 1996 actual 1997 est. 1998 est. Guaranteed loan levels supportable by subsidy budget authority: 2150 General business—7(a) ................................................ ................... ................... Guaranteed loan subsidy (in percent): 2320 General business—7(a) ................................................ ................... ................... 1,905 –0.52 BUSINESS DIRECT LOAN FINANCING ACCOUNT Program and Financing (in millions of dollars) Identification code 73–4148–0–3–376 1996 actual 1997 est. 1998 est. 00.01 00.02 Obligations by program activity: Direct loans .................................................................... Interest on Treasury borrowing ...................................... 9 7 24 8 39 10 10.00 Total obligations ........................................................ 16 32 49 22.00 23.95 Budgetary resources available for obligation: New financing authority (gross) .................................... New obligations ............................................................. 15 –16 30 –32 50 –49 13 24 41 32 –1 –29 19 –3 –10 46 1 –38 Spending authority from offsetting collections (total) ................................................................ 2 6 9 Total new financing authority (gross) ...................... 15 30 50 Change in unpaid obligations: Unpaid obligations, start of year: 72.90 Obligated balance: Fund balance ............................. 72.95 Receivables from program account .......................... 54 5 44 4 11 1 59 16 –28 48 32 –68 12 49 –41 74.90 74.95 Total unpaid obligations, start of year ................ New obligations ............................................................. Total financing disbursements (gross) ......................... Unpaid obligations, end of year: Obligated balance: Fund balance ............................. Receivables from program account .......................... 44 4 11 1 17 2 74.99 87.00 Total unpaid obligations, end of year .................. Total financing disbursements (gross) ......................... 48 28 12 68 19 41 New financing authority (gross), detail: Authority to borrow (indefinite) ..................................... Spending authority from offsetting collections: 68.00 Offsetting collections (cash) ..................................... 68.10 Change in receivables from program account ......... 68.47 Portion applied to debt reduction ............................. 67.15 68.90 70.00 72.99 73.10 73.20 994 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued Credit accounts—Continued BUSINESS GUARANTEED LOAN FINANCING ACCOUNT BUSINESS DIRECT LOAN FINANCING ACCOUNT—Continued Program and Financing (in millions of dollars) Program and Financing (in millions of dollars)—Continued 1996 actual Identification code 73–4148–0–3–376 Identification code 73–4149–0–3–376 1997 est. 1998 est. 00.01 00.02 00.03 00.04 Offsets: Against gross financing authority and financing disbursements: Offsetting collections (cash) from: 88.00 Federal sources: Payments from program account ................................................................. –12 –2 Non-Federal sources: 88.40 Repayments of principal, net ........................... –14 –8 88.40 Interest received on loans ................................ –6 –9 88.40 Proceeds from loan asset sale ........................ ................... ................... –11 –8 –23 Total, offsetting collections (cash) .................. Change in receivables from program accounts ............ –32 1 –19 3 –46 –1 23.90 23.95 24.90 89.00 90.00 Net financing authority and financing disbursements: Financing authority ........................................................ Financing disbursements ............................................... –16 –4 14 49 3 –5 1997 est. 1998 est. Obligations by program activity: Default claims ............................................................... 399 552 701 Payment of downward reestimate to receipt account 16 188 ................... Payment to liquidation account .................................... ................... ................... 188 Negative subsidy from loan asset sales ....................... ................... ................... 50 21.90 88.90 88.95 1996 actual 10.00 Status of Direct Loans (in millions of dollars) 1996 actual Identification code 73–4148–0–3–376 1997 est. Total obligations ........................................................ 415 740 939 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance ...................................................................... 22.00 New financing authority (gross) .................................... 1,076 716 1,376 826 1,461 1,017 1,792 –415 2,202 –740 2,478 –939 1,376 1,461 1,539 755 826 –39 ................... 1,037 –20 Spending authority from offsetting collections (total) ................................................................ 716 826 1,017 Total new financing authority (gross) ...................... 716 826 1,017 125 415 –455 86 740 –741 86 939 –959 86 455 86 741 66 959 –4 1998 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 9 24 19 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Fund balance ...................................................................... New financing authority (gross), detail: Spending authority from offsetting collections: 68.00 Offsetting collections (cash) ..................................... 68.10 Change in receivables from program account ......... 68.90 70.00 Change in unpaid obligations: Unpaid obligations, start of year: Receivables from program account ....................................................... 73.10 New obligations ............................................................. 73.20 Total financing disbursements (gross) ......................... 74.95 Unpaid obligations, end of year: Receivables from program account ....................................................... 87.00 Total financing disbursements (gross) ......................... 72.95 1150 Total direct loan obligations ..................................... 9 24 19 1210 1231 1251 1264 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. Write-offs for default: Other adjustments, net ............. 167 12 –14 –4 161 12 –14 –4 155 13 –28 –8 1290 Outstanding, end of year .......................................... 161 155 132 As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the Government resulting from direct loans obligated in 1992 and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the budget totals. 88.90 88.95 Balance Sheet (in millions of dollars) Identification code 73–4148–0–3–376 ASSETS: Investments in US securities: 1106 Federal assets: Receivables, net ........ Net value of assets related to post– 1991 direct loans receivable: 1401 Direct loans receivable, gross ............ 1405 Allowance for subsidy cost (–) ........... 1995 actual 1996 actual Offsets: Against gross financing authority and financing disbursements: Offsetting collections (cash) from: Federal sources: 88.00 Payments from program account ..................... –205 –225 –179 88.00 Payment from program account—Reestimates –274 –199 ................... 88.25 Interest on uninvested funds ............................... –36 –65 –65 Non-Federal sources: 88.40 Fees .................................................................. –153 –169 –183 88.40 Proceeds from loan asset sales ....................... ................... ................... –386 88.40 Recoveries ......................................................... –87 –168 –224 1997 est. 1998 est. 89.00 90.00 3 302 310 Total, offsetting collections (cash) .................. Change in receivables from program accounts ............ –755 –826 39 ................... –1,037 20 Net financing authority and financing disbursements: Financing authority ........................................................ ................... ................... ................... Financing disbursements ............................................... –299 –85 –78 319 Status of Guaranteed Loans (in millions of dollars) 126 –8 120 –53 123 –54 127 –56 118 67 69 71 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 121 369 379 390 118 369 379 390 2999 118 369 379 390 3 .................. .................. .................. 1499 Net present value of assets related to direct loans ........................... 1999 Total liabilities .................................... NET POSITION: 3100 Appropriated capital ................................ Identification code 73–4149–0–3–376 Total net position ................................ 3 .................. .................. Total liabilities and net position ............ 121 369 379 390 Total guaranteed loan commitments ........................ 2210 2231 2251 2261 Cumulative balance of guaranteed loans outstanding: Outstanding, start of year ............................................. Disbursements of new guaranteed loans ...................... Repayments and prepayments ...................................... Adjustments: Terminations for default that result in loans receivable ........................................................ .................. 4999 1997 est. 1998 est. Position with respect to appropriations act limitation on commitments: 2111 Limitation on guaranteed loans made by private lenders .............................................................................. ................... ................... ................... 2131 Guaranteed loan commitments exempt from limitation 10,154 10,641 11,887 2150 3999 1996 actual 2290 Outstanding, end of year .......................................... 10,154 10,641 11,887 20,907 6,773 –2,651 24,630 6,955 –2,723 28,452 7,143 –2,796 –399 –410 –421 24,630 28,452 32,378 SMALL BUSINESS ADMINISTRATION 2299 Memorandum: Guaranteed amount of guaranteed loans outstanding, end of year ................................................................ 23.95 20,193 23,282 Addendum: Cumulative balance of defaulted guaranteed loans that result in loans receivable: 2310 Outstanding, start of year ........................................ 393 628 2331 Disbursements for guaranteed loan claims ............. 399 410 2351 Repayments of loans receivable ............................... –62 –63 2361 Write-offs of loans receivable ................................... –102 –105 2364 Other adjustments, net ............................................. ................... ................... 2390 Outstanding, end of year ...................................... 995 Federal Funds—Continued 628 870 –525 –500 –398 24.90 24.90 New obligations ............................................................. Unobligated balance available, end of year: Fund balance: Committed ............................................................. Uncommitted ......................................................... 1 337 1 347 1 518 24.99 Total unobligated balance, end of year .................... 338 348 519 68.00 New budget authority (gross), detail: Spending authority from offsetting collections (gross): Offsetting collections (cash) ..................................... 566 551 610 327 525 –463 389 500 –450 439 398 –348 389 439 488 463 450 348 26,455 870 421 –65 –107 –512 607 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Fund balance ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.90 Unpaid obligations, end of year: Obligated balance: Fund balance ............................................................. 72.90 As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the Government resulting from loan guarantees committed in 1992 and beyond (including modifications of loan guarantees that resulted from commitments in any year). The amounts in this account are a means of financing and are not included in the budget totals. Balance Sheet (in millions of dollars) Identification code 73–4149–0–3–376 ASSETS: Federal assets: 1101 Fund balances with Treasury ............. Investments in US securities: 1106 Receivables, net ............................. Net value of assets related to post– 1991 acquired defaulted guaranteed loans receivable: 1501 Defaulted guaranteed loans receivable, gross ...................................... 1502 Interest receivable .............................. 1505 Allowance for subsidy cost (–) ........... 1995 actual 1996 actual 1997 est. 1998 est. 1,258 1,257 1,291 1,326 55 164 168 173 527 23 –331 628 45 –331 870 46 –340 607 47 –349 86.97 Offsets: Against gross budget authority and outlays: Offsetting collections (cash) from: 88.00 Federal sources ..................................................... ................... ................... –188 Non-Federal sources: Loan repayments: 88.40 Financing programs ..................................... –175 –171 –153 88.40 Investment programs ................................... –38 –37 –28 88.40 SBIC obligations .......................................... –6 –5 ................... 88.40 Section 503 development obligations ......... –27 –27 –26 Interest income: 88.40 Financing programs ..................................... –123 –120 –117 88.40 Investment programs ................................... –50 –48 –23 88.40 Other income ................................................ –137 –133 –65 88.40 Section 503 Prepayments ............................ –10 –10 –10 88.90 1599 Net present value of assets related to defaulted guaranteed loans 219 342 576 1,532 1,763 2,035 1,804 1,451 1,763 2,035 1,451 1,763 2,035 1,804 81 .................. .................. .................. –566 –551 –610 1,804 2999 Total, offsetting collections (cash) .................. 305 Total assets ........................................ LIABILITIES: 2204 Non-Federal liabilities: Liabilities for loan guarantees .................................. Outlays (gross), detail: Outlays from new permanent authority ......................... 1999 Total liabilities .................................... NET POSITION: 3100 Appropriated capital ................................ 3999 Total net position ................................ 81 .................. .................. .................. 4999 Total liabilities and net position ............ 1,532 1,763 2,035 1,804 BUSINESS LOAN FUND LIQUIDATING ACCOUNT Program and Financing (in millions of dollars) 89.00 90.00 Status of Direct Loans (in millions of dollars) Identification code 73–4154–0–3–376 1996 actual 1997 est. 1996 actual 1997 est. BUSINESS LOAN FUND, DIRECT LOANS Cumulative balance of direct loans outstanding: 1210 Outstanding, start of year ............................................. 1,675 1,352 1232 Disbursements: Purchase of loans assets from the public ......................................................................... 152 117 1251 Repayments: Repayments and prepayments ................. –214 –208 1262 Adjustments: Discount on loan asset sales to the public or discounted ................................................. ................... ................... 1263 Write-offs for default: Direct loans ............................... –261 –211 1290 Identification code 73–4154–0–3–376 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... –104 –101 –262 Outstanding, end of year .......................................... 1,352 1,050 1998 est. 1,050 90 –101 –439 –82 518 1998 est. Obligations by program activity: Capital expenses: 00.02 Defaults on guarantee loans— ................................ 00.05 Other expenses .......................................................... 335 106 327 103 318 50 00.91 01.01 Total capital expenses .......................................... Operating expenses: Interest expense to Treasury ........ 441 84 430 70 368 30 SMALL BUSINESS INVESTMENT COMPANY, DIRECT LOANS Cumulative balance of direct loans outstanding: 1210 Outstanding, start of year ............................................. 6 ................... ................... Repayments: 1251 Repayments and prepayments .................................. –6 ................... ................... 1252 Proceeds from loan asset sales to the public or discounted ............................................................. ................... ................... ................... 10.00 Total obligations ........................................................ 525 500 398 1290 SECTION 503 DEVELOPMENT COMPANY, DIRECT LOANS Cumulative balance of direct loans outstanding: 1210 Outstanding, start of year ............................................. Repayments: 1251 Repayments and prepayments .................................. 1252 Proceeds from loan asset sales to the public or discounted ............................................................. 1290 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance: 21.90 Committed ............................................................. 21.90 Uncommitted ......................................................... 1 339 1 337 1 347 21.99 22.00 22.60 Total unobligated balance, start of year ............. New budget authority (gross) ........................................ Redemption of debt ....................................................... 340 566 –43 338 551 –42 348 610 –41 23.90 Total budgetary resources available for obligation 863 847 917 Outstanding, end of year .......................................... ................... ................... ................... Outstanding, end of year .......................................... 356 319 281 –22 –23 –20 –15 –15 –13 319 281 248 996 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued Credit accounts—Continued 2201 2204 BUSINESS LOAN FUND LIQUIDATING ACCOUNT—Continued Status of Guaranteed Loans (in millions of dollars) 1996 actual Identification code 73–4154–0–3–376 2207 2207 1997 est. Non-Federal liabilities: Accounts payable ................................ Liabilities for loan guarantees ........... Other: Unearned revenue (advances) ........ Other Liabilities .............................. 11 200 15 71 15 72 15 73 37 .................. .................. 165 .................. 168 .................. 169 1998 est. 2999 BUSINESS LOAN FUND, LOAN GUARANTEES Cumulative balance of guaranteed loans outstanding: 2210 Outstanding, start of year ............................................. 2231 Disbursements of new guaranteed loans ...................... 2251 Repayments and prepayments ...................................... Adjustments: 2261 Terminations for default that result in loans receivable ....................................................................... 2264 Other adjustments, net ............................................. 2290 Outstanding, end of year .......................................... Memorandum: 2299 Guaranteed amount of guaranteed loans outstanding, end of year ................................................................ 7,675 1 –1,078 6,383 1 –896 –135 –12 –91 –10 6,383 5,341 4,491 2,210 2,337 2,353 2,297 Total liabilities and net position ............ 2,210 2,337 2,353 2,297 5,341 1 –750 –201 –14 Total liabilities .................................... 4999 Object Classification (in millions of dollars) Identification code 73–4154–0–3–376 5,495 4,598 430 70 500 368 30 398 Total obligations ........................................................ 525 500 398 BUSINESS LOAN FUND LIQUIDATING ACCOUNT 1,255 135 1,390 91 2390 1,255 1,390 1,481 (Legislative proposal, subject to PAYGO) As required by the Federal Credit Reform Act of 1990, this account records, for this program, all cash flows to and from the Government resulting from direct loans obligated and loan guarantees committed prior to 1992. This account is shown on a cash basis. All new activity in this program in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year) is recorded in corresponding program and financing accounts. Program and Financing (in millions of dollars) Identification code 73–4154–4–3–376 1995 actual 1996 actual Revenue ................................................... Expense .................................................... 170 –185 189 149 210 165 234 184 0109 Net loss ................................................... –15 338 375 418 1997 est. 1998 est. Balance Sheet (in millions of dollars) 1699 1901 1999 Value of assets related to direct loans .......................................... Other Federal assets: Other assets ........ Total assets ........................................ LIABILITIES: Federal liabilities: 2101 Accounts payable ................................ 2102 Interest payable .................................. Debt: 2103 Debt to the FFB .............................. 2103 SBIC and development company participation certificates ........... 1997 est. 1998 est. Budgetary resources available for obligation: Unobligated balance available, start of year: Uncommitted ........................................................................ ................... ................... ................... 23.95 New obligations ............................................................. ................... ................... ................... 24.90 Unobligated balance available, end of year: Uncommitted ........................................................................ ................... ................... –1 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... ................... ................... ................... DISASTER LOANS PROGRAM ACCOUNT 0101 0102 ASSETS: Federal assets: 1101 Fund balances with Treasury ............. Investments in US securities: 1104 Agency securities, par .................... 1107 Advances and prepayments ........... Non-Federal assets: 1206 Receivables, net .................................. 1207 Advances and prepayments ................ Net value of assets related to pre–1992 direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1996 actual 21.90 Statement of Operations (in millions of dollars) Identification code 73–4154–0–3–376 1998 est. 441 84 525 3,866 1,054 201 Identification code 73–4154–0–3–376 1997 est. Investments and loans .................................................. Interest and dividends ................................................... Subtotal, reimbursable obligations ............................... 99.9 Addendum: Cumulative balance of defaulted guaranteed loans that result in loans receivable: 2310 Outstanding, start of year ........................................ 2331 Disbursements for guaranteed loan claims ............. Outstanding, end of year ...................................... 1996 actual 33.0 43.0 99.0 1995 actual 1996 actual 1997 est. 1998 est. 666 727 794 866 120 12 160 9 214 7 286 5 485 7 816 7 780 7 745 7 øFor the cost of direct loans authorized by section 7(b) of the Small Business Act, as amended, $105,432,000, 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.¿ øIn addition, for¿ For administrative expenses to carry out the direct loan program, ø$86,500,000, including not to exceed $500,000 for the Office of Inspector General of the Small Business Administration for audits and reviews of disaster loans and the disaster loan program¿ $173,200,000, øand said sums¿ which may be transferred to and merged with appropriations for Salaries and Expenses øand Office of Inspector General¿. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.) Program and Financing (in millions of dollars) Identification code 73–1152–0–1–453 1996 actual 1997 est. 1998 est. 00.01 00.09 2,036 1,671 1,331 766 –1,215 –1,114 –787 –401 821 99 557 61 544 37 365 23 2,210 2,337 2,383 Obligations by program activity: Direct loan subsidy ........................................................ Administrative expenses ................................................ 243 164 150 177 90 173 10.00 Total obligations ........................................................ 407 327 263 Budgetary resources available for obligation: Unobligated balance available, start of year: Uninvested balance ................................................... 22.00 New budget authority (gross) ........................................ 22.10 Resources available from recoveries of prior year obligations ....................................................................... 92 331 83 327 83 173 67 ................... 35 2,297 1,445 156 1,667 94 1,670 96 1,610 96 361 318 325 7 7 7 23.90 23.95 24.40 327 .................. 21.40 40.00 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Uninvested balance ................................................... New budget authority (gross), detail: Appropriation .................................................................. 490 –407 410 –327 291 –263 83 83 28 331 327 173 SMALL BUSINESS ADMINISTRATION Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Appropriation ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 73.45 Adjustments in unexpired accounts .............................. 74.40 Unpaid obligations, end of year: Obligated balance: Appropriation ............................................................. Federal Funds—Continued 72.40 251 157 407 327 –434 –311 –67 ................... 173 263 –263 –35 157 173 138 86.90 86.93 Outlays (gross), detail: Outlays from new current authority .............................. Outlays from current balances ...................................... 228 206 232 79 133 130 87.00 Total outlays (gross) ................................................. 434 311 263 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 331 434 327 311 173 263 Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars) Identification code 73–1152–0–1–453 1996 actual 1997 est. 1998 est. Direct loan levels supportable by subsidy budget authority: 1150 Direct Disaster Loans .................................................... 867 747 785 1159 867 747 785 0.00 0.00 0.00 28.08 20.02 11.44 243 150 90 Total subsidy budget authority ................................. Direct loan subsidy outlays: 1340 Disaster subsidy outlays ................................................ 243 150 134 90 1349 Total subsidy outlays ................................................ 270 134 90 3510 3590 Administrative expense data: Budget authority ............................................................ Outlays from new authority ........................................... 164 164 177 177 173 173 During 1996 alone, SBA approved nearly 38,000 disaster loans for an amount of almost $1 billion. Program Performance and Policy Goals.—The SBA program performance and policy goals are: 1) provide disaster assistance to victims in the most effective and cost efficient manner; 2) deliver an effective program that achieves its public policy objectives; 3) provide customer-focused assistance that satisfactorily accommodates the needs of all disaster victims; 4) simplify and streamline the loan-making process by re-engineering forms, procedures and processes; and, 5) effectively implement the proposed asset sales program. Performance Indicators.—A true assessment of program effectivess is a long-term process, and there is much to learn about the true extent that the disaster loan program contributes to effective recovery. In the short term, SBA is committed to providing cost-effective delivery and high satisfaction levels to the customers who use its services. In the long run, the agency’s goal is to facilitate true economic recovery and assess how the program’s business recovery assistance contributes to the rebuilding of a local or regional economy. Performance measures to be used in 1998 to assess progress in achieving the above goals follow. 90 270 997 Total direct loan levels ............................................. Direct loan subsidy (in percent): 1320 Disaster subsidy rate ..................................................... 1329 Weighted average subsidy rate ................................. Direct loan subsidy budget authority: 1330 Disaster subsidy budget authority ................................ 1339 Outputs Intermediate Outcomes Loan decision within 7 to 20 days— number, percent. Initial disbursement ordered 4 days after receipt of loan closing documents—number, percent. Loans approved—number, dollar amount. Increased funds available at time of need Improved customer satisfaction due to simplified and less burdensome processes Reduced costs to Government 1998 Proposals As required by the Federal Credit Reform Act of 1990, 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 are the primary form of Federal assistance for non-farm, private sector disaster losses. For this reason, the program is the only form of SBA assistance not limited to small businesses. Through this program, SBA helps homeowners, renters, businesses of all sizes, and non-profit organizations pay for the cost of rebuilding. Pursuant to the Small Business Act, the government subsidizes borrowers who have incurred uninsured losses or economic injury as the result of a natural disaster. These loans are also a critical source of economic stimulation in disaster-ravaged communities, helping to spur employment and stabilize the local tax base. Eligibility is based on financial criteria. There are three loan programs: physical disaster loans to individuals, physical disaster loans to businesses of any size, and economic injury loans to small businesses without credit available elsewhere. Program Performance Over the 41 year history of the program, SBA has helped over 1.3 million disaster victims by providing more than $24.1 billion in disaster assistance. Over 90 percent has been to borrowers that otherwise would not have been able to rebuild. Under current law, interest rates fluctuate according to statutory formulas: a lower rate, not to exceed four percent, is available to applicants without credit available elsewhere; a higher rate, not to exceed eight percent, is charged to borrowers who have credit available elsewhere. To reduce the subsidy in this program, the budget proposes to increase the interest rate for borrowers without credit available elsewhere to the cost to the U.S. Treasury for securities of comparable maturity. For borrowers with access to credit elsewhere, the interest rate would be pegged above the Treasury rate. This change would reduce the subsidy from 23.46 percent to 11.44 percent, enabling more loans to be made with the same amount of budget authority. Baseline loan levels would increase from $383 million to $785 million, a difference of $402 million. In the schedules below, the effects of the legislative proposal should not be added to the regular budget schedules. Historically, SBA has approved approximately $785 million in loans for disaster relief annually, excluding the effect of the 1994 Northridge Earthquake. No appropriation of loan subsidy budget authority is requested for the Disaster Loans Program Account for 1998. The 1998 loan program will be fully funded from anticipated carryforward balances provided the recommended revisions to the disaster loan interest rates are enacted. This budget requests $5.8 billion in contingent funding for FY 1998, the 1991–1997 average emergency spending under the BEA. This fund will be available to this and other accounts as the need arises. Please see the Emergency Requirements for Natural Disasters account in the Funds Appropriated to the President Chapter for more detailed information. The requested amount for future years will be based on average emergency funding under the BEA. The base programs will have access to the proposed contingency fund once all available appropriations in the affected account/accounts have been obligated, and a Presidential decision has been made to make additional funds available. The fund is meant to be flexible enough to respond to a variety of disasters and thus does not reserve or dedicate specific 998 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued Credit accounts—Continued DISASTER LOANS PROGRAM ACCOUNT—Continued amounts within the total for the eligible programs. The flexibility of the fund is essential to meet the full range of disaster funding requirements. Object Classification (in millions of dollars) Identification code 73–1152–0–1–453 41.0 99.0 99.9 Direct obligations: Grants, subsidies, and contributions ........................................................................... Reimbursable obligations: Subtotal, reimbursable obligations ....................................................................... Total obligations ........................................................ 1996 actual 1997 est. 1998 est. 243 150 177 173 407 327 263 –100 –154 –484 88.90 88.95 Total, offsetting collections (cash) .................. Change in receivables from program accounts ............ –807 86 –760 47 –828 29 89.00 90.00 Net financing authority and financing disbursements: Financing authority ........................................................ Financing disbursements ............................................... 442 259 430 659 546 594 –90 90 164 Offsets: Against gross financing authority and financing disbursements: Offsetting collections (cash) from: 88.00 Payments from program account ......................... –243 –150 Non-Federal sources: 88.40 Repayments of principal, net ........................... ................... ................... 88.40 Repayments of principal, net ........................... –88 –120 88.40 Interest received on loans ................................ –476 –490 Status of Direct Loans (in millions of dollars) DISASTER LOANS PROGRAM ACCOUNT Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in millions of dollars) Identification code 73–1152–2–1–453 1996 actual 1997 est. 1998 est. Direct loan levels supportable by subsidy budget authority: 1150 Direct Disaster Loans .................................................... ................... ................... 402 1159 402 Total direct loan levels ............................................. ................... ................... DISASTER DIRECT LOAN FINANCING ACCOUNT 1996 actual 1997 est. Obligations by program activity: 00.01 Direct loans .................................................................... 867 747 00.02 Interest on Treasury borrowing ...................................... 296 396 00.03 Purchase of loans from liquidating .............................. ................... ................... 1998 est. 785 459 100 10.00 Total obligations ........................................................ 1,163 1,143 1,344 22.00 23.95 Budgetary resources available for obligation: New financing authority (gross) .................................... New obligations ............................................................. 1,163 –1,163 1,143 –1,143 1150 New financing authority (gross), detail: Authority to borrow (indefinite) ..................................... 1,311 1,436 Spending authority from offsetting collections: Offsetting collections (cash): 68.00 Offsetting collections (cash) ................................ 807 760 68.00 Proceeds from loan asset sales (cash) ................ ................... ................... 68.10 Change in receivables from program account ......... –86 –47 68.47 Portion applied to debt reduction (–) ....................... –869 –1,006 Total direct loan obligations ..................................... 728 100 –29 –1,097 –148 –293 –298 70.00 Total new financing authority (gross) ...................... 1,163 1,143 785 Outstanding, end of year .......................................... 7,227 7,391 7,285 As required by the Federal Credit Reform Act of 1990, this non-budgetary account records all cash flows to and from the Government resulting from direct loans obligated in 1992 and beyond (including modifications of direct loans that resulted from obligations in any year). The amounts in this account are a means of financing and are not included in the budget totals. Balance Sheet (in millions of dollars) 1995 actual 1996 actual 466 227 232 93 6,748 –414 7,227 –248 7,389 –308 7,278 –142 6,334 6,979 7,081 7,136 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 6,800 7,206 7,313 7,229 6,334 6,979 7,170 7,135 2999 6,334 6,979 7,170 7,135 ASSETS: Investments in US securities: 1106 Federal assets: Program account ....... Net value of assets related to post– 1991 direct loans receivable: 1401 Direct loans receivable, gross ............ 1405 Allowance for subsidy cost (–) ........... 1,345 1499 Net present value of assets related to direct loans ........................... 1999 1,870 207 2,053 121 1,824 74 2,077 1,163 –1,066 2,174 1,143 –1,419 1,898 1,344 –1,422 74.95 Total unpaid obligations, start of year ................ New obligations ............................................................. Total financing disbursements (gross) ......................... Unpaid obligations, end of year: Obligated balance: Fund balance: Unpaid obligations ...................................................................... Receivables from program account .......................... 2,053 121 1,824 74 1,775 45 74.99 87.00 Total unpaid obligations, end of year .................. Total financing disbursements (gross) ......................... 2,174 1,066 1,898 1,419 1,820 1,422 74.90 747 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. 6,748 7,227 7,391 Disbursements: Direct loan disbursements ................... 946 874 638 Repayments: 1251 Repayments and prepayments .................................. –408 –610 –638 1252 Proceeds from loan asset sales to the public or discounted ............................................................. ................... ................... ................... 1264 Write-offs for default: Other adjustments, net ............. –59 –100 –106 Identification code 73–4150–0–3–453 Spending authority from offsetting collections (total) ................................................................ 72.99 73.10 73.20 867 1997 est. 1998 est. 1,643 68.90 Change in unpaid obligations: Unpaid obligations, start of year: 72.90 Obligated balance: Fund balance: Unpaid obligations ...................................................................... 72.95 Receivables from program account .......................... 1998 est. 1210 1231 1,345 –1,344 67.15 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 867 747 785 1290 Program and Financing (in millions of dollars) Identification code 73–4150–0–3–453 1996 actual Identification code 73–4150–0–3–453 (Legislative proposal, not subject to PAYGO) Total liabilities .................................... NET POSITION: 3100 Appropriated capital ................................ 466 227 143 94 3999 Total net position ................................ 466 227 143 94 4999 Total liabilities and net position ............ 6,800 7,206 7,313 7,229 SMALL BUSINESS ADMINISTRATION 999 Federal Funds—Continued DISASTER LOANS DIRECT LOAN FINANCING ACCOUNT 21.90 Uncommitted ......................................................... 207 175 144 (Legislative proposal, not subject to PAYGO) 21.99 22.00 22.40 Total unobligated balance, start of year ............. New budget authority (gross) ........................................ Capital transfer to general fund ................................... 211 307 –249 177 269 –218 148 345 –215 23.90 23.95 269 –91 228 –80 278 –71 24.90 24.90 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Fund balance: Committed ............................................................. Uncommitted ......................................................... 2 175 4 144 2 205 24.99 Total unobligated balance, end of year .................... 177 148 207 68.00 New budget authority (gross), detail: Spending authority from offsetting collections (gross): Offsetting collections (cash) ..................................... 307 269 345 Program and Financing (in millions of dollars) Identification code 73–4150–2–3–453 1996 actual 1997 est. 1998 est. 00.01 00.02 Obligations by program activity: Direct loans .................................................................... ................... ................... Interest payment to Treasury ......................................... ................... ................... 402 1 10.00 Total obligations ........................................................ ................... ................... 403 Budgetary resources available for obligation: 22.00 New financing authority (gross) .................................... ................... ................... 23.95 New obligations ............................................................. ................... ................... New financing authority (gross), detail: Authority to borrow (indefinite) ..................................... ................... ................... Spending authority from offsetting collections: 68.00 Offsetting collections (cash) ..................................... ................... ................... 68.47 Portion applied to debt reduction (–) ....................... ................... ................... 67.15 68.90 403 –403 403 17 –17 Spending authority from offsetting collections (total) ................................................................ ................... ................... ................... 70.00 Total new financing authority (gross) ...................... ................... ................... Change in unpaid obligations: New obligations ............................................................. ................... ................... Total financing disbursements (gross) ......................... ................... ................... Total financing disbursements (gross) ......................... ................... ................... 403 –403 403 93 79 159 91 80 71 –105 ................... ................... 79 159 230 403 73.10 73.20 87.00 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Fund balance ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.90 Unpaid obligations, end of year: Obligated balance: Fund balance ............................................................. 72.90 Offsets: Against gross financing authority and financing disbursements: Offsetting collections (cash) from: Non-Federal sources: 88.40 Repayments of principal, net ........................... ................... ................... –2 88.40 Interest received on loans ................................ ................... ................... –15 88.45 Offsetting governmental collections ..................... ................... ................... ................... 88.90 88.95 Total, offsetting collections (cash) .................. ................... ................... –17 Change in receivables from program accounts ............ ................... ................... ................... Net financing authority and financing disbursements: 89.00 Financing authority ........................................................ ................... ................... 90.00 Financing disbursements ............................................... ................... ................... 386 386 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... Outlays from permanent balances ................................ 91 ................... ................... 14 ................... ................... 87.00 Total outlays (gross) ................................................. 105 ................... ................... Offsets: Against gross budget authority and outlays: Offsetting collections (cash) from: Non-Federal sources: 88.40 Loan repayments .............................................. –213 –200 –186 88.40 Interest income ................................................. –80 –60 –52 88.40 Other income .................................................... –12 –9 –7 88.40 Recovery on Loan Cancellations ...................... –2 ................... ................... 88.40 Proceeds from loan asset sales ....................... ................... ................... –100 88.90 89.00 90.00 Total, offsetting collections (cash) .................. –307 –269 –345 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... –202 –269 –345 Status of Direct Loans (in millions of dollars) Identification code 73–4150–2–3–453 1996 actual 1997 est. Status of Direct Loans (in millions of dollars) 1998 est. 1996 actual Identification code 73–4153–0–3–453 Position with respect to appropriations act limitation on obligations: 1131 Direct loan obligations exempt from limitation ............ ................... ................... 403 1150 403 1290 1998 est. 1210 1231 ................... ................... ................... 403 ................... –17 ................... –16 1997 est. 1210 1231 1251 1264 1290 Total direct loan obligations ..................................... ................... ................... Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. Write-offs for default: Other adjustments, net ............. ................... ................... ................... ................... Outstanding, end of year .......................................... ................... ................... 1997 est. 1998 est. 01.01 01.03 Obligations by program activity: Interest expense to Treasury .......................................... Other expenses ............................................................... 78 13 70 10 63 8 10.00 Total obligations ........................................................ 91 80 71 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance: 21.90 Committed ............................................................. 1,676 1,416 1,096 As required by the Federal Credit Reform Act of 1990, this account records, for this program, all cash flows to and from the Government resulting from direct loans obligated prior to 1992. This account is shown on a cash basis. All new activity in this program in 1992 and beyond (including modifications of direct loans or loan guarantees that resulted from obligations or commitments in any year) is recorded in corresponding program and financing accounts. Program and Financing (in millions of dollars) 1996 actual Outstanding, end of year .......................................... 370 DISASTER LOAN FUND LIQUIDATING ACCOUNT Identification code 73–4153–0–3–453 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. 1,918 1,676 1,416 Disbursements: Direct loan disbursements ................... ................... ................... ................... Repayments: 1251 Repayments and prepayments .................................. –213 –220 –186 1252 Proceeds from loan asset sales to the public or discounted ............................................................. ................... ................... –100 1263 Write-offs for default: Direct loans ............................... –29 –40 –34 Statement of Operations (in millions of dollars) 2 4 1996 actual Revenue ................................................... Expense .................................................... 93 –102 93 –102 78 –83 103 –74 0109 4 1995 actual 0101 0102 Net income or loss (–) ............................ –9 –9 –5 29 Identification code 73–4153–0–3–453 1997 est. 1998 est. 1000 THE BUDGET FOR FISCAL YEAR 1998 Federal Funds—Continued Credit accounts—Continued Status of Guaranteed Loans (in millions of dollars) DISASTER LOAN FUND LIQUIDATING ACCOUNT—Continued Identification code 73–4153–0–3–453 ASSETS: Federal assets: Fund balances with Treasury ............................................... 1206 Non-Federal assets: Receivables, net ..... Net value of assets related to pre–1992 direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1995 actual 1996 actual 304 112 1997 est. 256 111 1998 est. 1101 1699 1801 1803 Value of assets related to direct loans .......................................... Other Federal assets: Cash and other monetary assets ....... Property, plant and equipment, net 1999 Total assets ........................................ LIABILITIES: Federal liabilities: 2102 Interest payable .................................. 2104 Resources payable to Treasury ........... 2201 Non-Federal liabilities: Accounts payable 1996 actual Identification code 73–4147–0–3–376 Balance Sheet (in millions of dollars) 269 78 255 69 Cumulative balance of guaranteed loans outstanding: 2210 Outstanding, start of year ............................................. 100 Adjustments: 2261 Terminations for default that result in loans receivable ....................................................................... ................... 2264 Other adjustments, net ............................................. –14 1997 est. 1998 est. 86 73 –1 –12 –1 –10 1,677 1,415 –129 –160 –135 1,764 1,548 1,255 961 1 6 .................. 5 1 .................. 1 .................. 2,187 1,920 1,603 78 .................. 1,842 70 .................. 1,533 63 .................. 1,322 73 62 Memorandum: Guaranteed amount of guaranteed loans outstanding, end of year ................................................................ 86 73 62 Addendum: Cumulative balance of defaulted guaranteed loans that result in loans receivable: 2310 Outstanding, start of year ........................................ 46 2331 Disbursements for guaranteed loan claims ............. 1 2351 Repayments of loans receivable ............................... ................... 47 1 –5 43 1 –6 2390 43 38 1,286 89 .................. 2,098 86 1,096 –154 Outstanding, end of year .......................................... 2299 1,918 2290 2999 Total liabilities .................................... 2,187 1,920 1,603 1,385 4999 Total liabilities and net position ............ 2,187 1,920 1,603 1,385 Object Classification (in millions of dollars) Identification code 73–4153–0–3–453 1996 actual 1997 est. 1998 est. 33.0 43.0 99.0 Investments and loans .................................................. Interest and dividends ................................................... Subtotal, reimbursable obligations ............................... 13 78 91 10 70 80 8 63 71 99.9 Total obligations ........................................................ 91 80 71 Program and Financing (in millions of dollars) Obligations by program activity: 10.00 Total obligations (object class 42.0) ............................ 1996 actual 1 1997 est. 1998 est. 3 3 Budgetary resources available for obligation: Unobligated balance available, start of year: Fund balance: 21.90 Committed ............................................................. 21.90 Uncommitted ......................................................... 11 3 14 –1 9 3 21.99 Total unobligated balance, start of year ............. 14 13 12 23.90 23.95 14 –1 13 –3 12 –3 24.90 24.90 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Fund balance: Committed ............................................................. Uncommitted ......................................................... 14 –1 9 3 Balance Sheet (in millions of dollars) Identification code 73–4147–0–3–376 Total unobligated balance, end of year .................... 13 12 1999 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 2201 Non-Federal liabilities: Accounts payable 1995 actual 1996 actual 1997 est. 1998 est. 14 9 13 9 12 10 10 9 6 6 7 8 29 28 29 27 15 .................. 28 .................. 26 .................. 27 .................. 15 28 26 27 .................. .................. 14 .................. .................. 1 .................. .................. 3 .................. .................. 2 7 3 24.99 47 Public Law 94–305 established this fund to alleviate the adverse impact of pollution regulations on small businesses. As a result of the elimination of tax exempt financing associated with the Pollution Control Guaranteed program, no new activity is anticipated for this program. During 1992, the Small Business Administration started the process of redeeming a large number of outstanding bonds on which it has taken over loan payments. Most of these targeted bonds are ten years old and voluntary redemption is now viable under the bond documents. Redemption of these obligations would preclude the SBA from paying excessive interest over the next ten years. ASSETS: 1101 Federal assets: Fund balances with Treasury ............................................... 1206 Non-Federal assets: Receivables, net ..... 1701 Net value of assets related to pre–1992 direct loans receivable and acquired defaulted guaranteed loans receivable: Defaulted guaranteed loans, gross ................................................... POLLUTION CONTROL EQUIPMENT FUND LIQUIDATING ACCOUNT Identification code 73–4147–0–3–376 Outstanding, end of year ...................................... 10 2999 Total liabilities .................................... NET POSITION: 3100 Appropriated capital ................................ 3300 Cumulative results of operations ............ 3600 Other ........................................................ 3999 Total net position ................................ 14 1 3 2 4999 Total liabilities and net position ............ 29 29 29 29 ADMINISTRATIVE PROVISIONS—SMALL BUSINESS ADMINISTRATION Change in unpaid obligations: 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 1 –1 3 –3 3 –3 86.98 Outlays (gross), detail: Outlays from permanent balances ................................ 1 3 3 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... ................... 3 3 SEC. 504. Not to exceed 5 percent of any appropriation made available for the current fiscal year for the Small Business Administration in this Act may be transferred between such appropriations, but no such appropriation shall be increased by more than 10 percent by any such transfers: Provided, That any transfer pursuant to this section shall be treated as a reprogramming of funds under section 605 of this Act and shall not be available for obligation or expenditure except in compliance with the procedures set forth in that section. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1997.)