September 23, 2013
|Message from NADCO's President & CEO|
Legislative Activities Update
As the federal Fiscal Year 2013 end approaches, we wanted to update you our legislative activities and where the program is with respect to the FY 2014 subsidy rate. As previously reported, both the House and Senate appropriations bills (neither of which has passed its respective body) contain FY 2014 subsidy relief.
More importantly, the House passed FY 2014 Continuing Resolution (CR), which contains language providing the needed subsidy relief thru December 15 (the term of the CR). SBA has confirmed this with Tom Cator. It is now up to the Senate to pass its version of the CR and for the two versions to be reconciled. We do not think this reconciliation will happen before October 1 and we do expect the government, barring some major last minute breakthrough, to shut down for an undetermined number of days beginning next week. If this happens, the Sacramento Loan Processing Center will shut down Oct. 1.
Whenever CR becomes law, it is expected to only last through mid-December. Congress will have to go through a similar process again then. Almost immediately after the CR issue is resolved, the Congress will vote on a debt limit increase. House passage of a debt limit increase that is acceptable to the Senate and White House is far from certain. A standoff could ensue. Frank Keane will talk about the consequences for the program of failure to pass a debt limit increase at NADCO's two upcoming regional meetings.
On debt refinancing, due to the hard work of a lot of people, NADCO has developed a fee proposal which would eliminate the 504 program subsidy and again allow the use of debt refinancing. Our proposal has been shared with SBA staff, who agree it eliminates the subsidy. SBA, in turn, has shared it with OMB and we are waiting for agency feedback on it.
Given the dysfunction of Congress, it is difficult to forecast the future of the debt refinancing proposal. We will make every attempt to have it included in whatever germane measure Congress may adopt.
As the prospect of one or more limited government shutdowns approaches, we are monitoring the situation closely and will keep you informed as details emerge. At this time, we do not expect the October debenture sale to be affected.
Thank you for your leadership and support of our industry.
President & CEO
National Association of Development Companies
September 13, 2013
The Senate Committee on Small Business & Entrepreneurship, led by Chairman Sen. Mary Landrieu (D-LA) and Ranking Member Sen. Jim Risch (R-MT), passed a measure reinstating the popular 504 Debt Refinance program that expired in September, 2012.
While a legislative vehicle for the provision’s advancement is sought, this bipartisan measure continues to gain support in the Senate and in the House of Representatives.