CONGRESSWOMAN ELISE STEFANIK
On Tuesday, December 18, 2012, the House is scheduled to consider H.R. 6504, the Small Business Investment Company Modernization Act, under a suspension of the rules requiring a two-thirds majority vote for passage. The bill was introduced by Rep. Steve Chabot (R-OH) on September 21, 2012, and referred to the Committee on Small Business.
H.R. 6504 would amend the Small Business Investment Act of 1958 to increase from $225 million to $350 million the maximum amount of outstanding leverage to be made available by the Small Business Administration (SBA) to two or more commonly controlled small business investment companies not under capital impairment.
According to the Committee on Small Business, the current authorization level for the Small Business Investment Company (SBIC) program is $3.5 billion dollars, i.e., the SBA is entitled to ensure that leverage of up to $3.5 billion is made available to SBICs. The bill would not affect the overall authorization level.
There was no Congressional Budget Office (CBO) cost estimate for this legislation. However, according to the Committee on Small Business, the SBIC program operates under a zero subsidy as the term subsidy is used in the Federal Credit Reform Act. The cost of the program is covered by fees paid by SBICs and profits on investment to ensure that the SBA’s leverage is paid back by the SBIC. As a result, the modification will have no cost.