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1 S. 862, Rebuilding Small Businesses after Disasters Act 1 (May 1, 2019)

handle is hein.congrec/resmbus0001 and id is 1 raw text is: ICongressional Budget Office Cost Estimate May 1,2019 By Fiscal Year, Miions of Dollars 2019 2 -19=2O24 2019o2O29 Direct Spending (Outlays) 0 0 0 Revenues Deficit Effect 0 0 0 0 0 0 Under its disaster loan program, the Small Business Administration (SBA) does not require collateral for loans of $25,000 or less. For home or business loans provided in response to certain disasters, that threshold will revert to $14,000 on November 25, 2019. S. 862 would make the $25,000 threshold permanent. Using information from the SBA, CBO expects that implementing S. 862 could slightly increase the volume of loans made under the program in each year after enactment. However, under current SBA regulations, the agency typically does not decline an application if the borrower lacks the specified collateral. CBO therefore estimates that enacting S. 862 would have an insignificant effect on the estimated subsidy cost of disaster loans.1 Such spending would be subject to the availability of appropriated funds because the disaster loan program is considered a discretionary credit program under the Federal Credit Reform Act of 1990. In 2019, the Congress provided a subsidy appropriation of $10 million for the disaster loan program. The CBO staff contact for this estimate is David Hughes. The estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 1. The subsidy cost is the estimated long-term cost to the government, calculated on a net-present-value basis. Present value is a single number that expresses a flow of current and future income (or payments) in terms of an equivalent lump sum received (or paid) at a specific time. The value depends on the rate of interest (called the discount rate) used to translate future cash flows into current dollars. See also CBO's Cost Estimates Explained, www.cbo.gov/publication /54437; How CBO Prepares Cost Estimates, www.cbo.gov/publication/53519; and Glossary, www.cbo.govipublication/42904.

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