[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 918 Reported in Senate (RS)]

                                                       Calendar No. 166

106th CONGRESS

  1st Session

                                 S. 918

                          [Report No. 106-84]

_______________________________________________________________________

                                 A BILL

To authorize the Small Business Administration to provide financial and 
     business development assistance to military reservists' small 
                  businesses, and for other purposes.

_______________________________________________________________________

                             June 23, 1999

                       Reported with an amendment





                                                       Calendar No. 166
106th CONGRESS
  1st Session
                                 S. 918

                          [Report No. 106-84]

To authorize the Small Business Administration to provide financial and 
     business development assistance to military reservists' small 
                  businesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 29, 1999

   Mr. Kerry (for himself, Mr. Bond, Mr. Bingaman, Ms. Landrieu, Mr. 
 Harkin, Mr. Lieberman, Mr. Wellstone, Mr. Kohl, Mr. Burns, Mr. Robb, 
Mr. Edwards, Mr. Levin, Mr. Graham, Ms. Snowe, Mr. Akaka, Mrs. Murray, 
 Mr. Cleland, Mr. Kennedy, Mr. Jeffords, Ms. Collins, Mr. Abraham, Mr. 
    Leahy, Mr. Baucus, Mr. Kerrey, Mr. Grassley, Mr. Moynihan, Mrs. 
    Lincoln, Mr. Bayh, Mr. Chafee, Mr. Lautenberg, Mr. Cochran, Mr. 
    Daschle, Mr. Gorton, Mr. Helms, Mr. Santorum, Mr. Thurmond, Mr. 
  Hollings, Mr. Breaux, Mr. DeWine, Mr. Rockefeller, Mr. Inhofe, Mr. 
 Gregg, Mr. Dodd, Ms. Mikulski, Mr. Sarbanes, Mr. Smith of Oregon, Mr. 
     Bennett, Mr. Enzi, Mr. Torricelli, Mr. Hatch, and Mr. Inouye) 
introduced the following bill; which was read twice and referred to the 
                      Committee on Small Business

                             June 23, 1999

                Reported by Mr. Bond, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
To authorize the Small Business Administration to provide financial and 
     business development assistance to military reservists' small 
                  businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Military Reservists Small 
Business Relief Act of 1999''.</DELETED>

<DELETED>SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY 
              RESERVISTS.</DELETED>

<DELETED>    Section 7 of the Small Business Act (15 U.S.C. 636) is 
amended by adding at the end the following:</DELETED>
<DELETED>    ``(n) Repayment Deferred for Active Duty Reservists.--
</DELETED>
        <DELETED>    ``(1) Definitions.--In this subsection:</DELETED>
                <DELETED>    ``(A) Eligible reservist.--The term 
                `eligible reservist' means a member of a reserve 
                component of the Armed Forces ordered to active duty 
                during a period of military conflict.</DELETED>
                <DELETED>    ``(B) Owner, manager, or key employee.--An 
                owner, manager, or key employee described in this 
                subparagraph is an individual who--</DELETED>
                        <DELETED>    ``(i) has not less than a 20 
                        percent ownership interest in the small 
                        business concern described in subparagraph 
                        (D)(ii);</DELETED>
                        <DELETED>    ``(ii) is a manager responsible 
                        for the day-to-day operations of such small 
                        business concern; or</DELETED>
                        <DELETED>    ``(iii) is a key employee (as 
                        defined by the Administration) of such small 
                        business concern.</DELETED>
                <DELETED>    ``(C) Period of military conflict.--The 
                term `period of military conflict' means--</DELETED>
                        <DELETED>    ``(i) a period of war declared by 
                        Congress;</DELETED>
                        <DELETED>    ``(ii) a period of national 
                        emergency declared by Congress or by the 
                        President; or</DELETED>
                        <DELETED>    ``(iii) a period of a contingency 
                        operation, as defined in section 101(a) of 
                        title 10, United States Code.</DELETED>
                <DELETED>    ``(D) Qualified borrower.--The term 
                `qualified borrower' means--</DELETED>
                        <DELETED>    ``(i) an individual who is an 
                        eligible reservist and who, received a direct 
                        loan under subsection (a) or (b) before being 
                        ordered to active duty; or</DELETED>
                        <DELETED>    ``(ii) a small business concern 
                        that received a direct loan under subsection 
                        (a) or (b) before an eligible reservist, who is 
                        an owner, manager, or key employee described in 
                        subparagraph (B), was ordered to active 
                        duty.</DELETED>
        <DELETED>    ``(2) Deferral of direct loans.--</DELETED>
                <DELETED>    ``(A) In general.--The Administration 
                shall, upon written request, defer repayment of 
                principal and interest due on a direct loan made under 
                subsection (a) or (b), if such loan was incurred by a 
                qualified borrower.</DELETED>
                <DELETED>    ``(B) Period of deferral.--The period of 
                deferral for repayment under this paragraph shall begin 
                on the date on which the eligible reservist is ordered 
                to active duty and shall terminate on the date that is 
                180 days after the date such eligible reservist is 
                discharged or released from active duty.</DELETED>
                <DELETED>    ``(C) Interest rate reduction during 
                deferral.--Notwithstanding any other provision of law, 
                during the period of deferral described in subparagraph 
                (B), the Administration may, in its discretion, reduce 
                the interest rate on any loan qualifying for a deferral 
                under this paragraph.</DELETED>
        <DELETED>    ``(3) Deferral of loan guarantees and other 
        financings.--The Administration shall--</DELETED>
                <DELETED>    ``(A) encourage intermediaries 
                participating in the program under subsection (m) to 
                defer repayment of a loan made with proceeds made 
                available under that subsection, if such loan was 
                incurred by a small business concern that is eligible 
                to apply for assistance under subsection (b)(3); 
                and</DELETED>
                <DELETED>    ``(B) not later than 30 days after the 
                date of enactment of this subsection, establish 
                guidelines to--</DELETED>
                        <DELETED>    ``(i) encourage lenders and other 
                        intermediaries to defer repayment of, or 
                        provide other relief relating to, loan 
                        guarantees under subsection (a) and financings 
                        under section 504 of the Small Business 
                        Investment Act of 1958 that were incurred by 
                        small business concerns that are eligible to 
                        apply for assistance under subsection (b)(3), 
                        and loan guarantees provided under subsection 
                        (m) if the intermediary provides relief to a 
                        small business concern under this paragraph; 
                        and</DELETED>
                        <DELETED>    ``(ii) implement a program to 
                        provide for the deferral of repayment or other 
                        relief to any intermediary providing relief to 
                        a small business borrower under this 
                        paragraph.''.</DELETED>

<DELETED>SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RESERVISTS' 
              SMALL BUSINESSES.</DELETED>

<DELETED>    (a) In General.--Section 7(b) of the Small Business Act 
(15 U.S.C. 636(b)) is amended by inserting after the undesignated 
paragraph that begins with ``Provided, That no loan'', the 
following:</DELETED>
        <DELETED>    ``(3)(A) In this paragraph--</DELETED>
                <DELETED>    ``(i) the term `economic injury' means an 
                economic harm to a business concern that results in the 
                inability of the business concern--</DELETED>
                        <DELETED>    ``(I) to meet its obligations as 
                        they mature;</DELETED>
                        <DELETED>    ``(II) to pay its ordinary and 
                        necessary operating expenses; or</DELETED>
                        <DELETED>    ``(III) to market, produce, or 
                        provide a product or service ordinarily 
                        marketed, produced, or provided by the business 
                        concern;</DELETED>
                <DELETED>    ``(ii) the term `owner, manager, or key 
                employee' means an individual who--</DELETED>
                        <DELETED>    ``(I) has not less than a 20 
                        percent ownership in the small business 
                        concern;</DELETED>
                        <DELETED>    ``(II) is a manager responsible 
                        for the day-to-day operations of such small 
                        business concern; or</DELETED>
                        <DELETED>    ``(III) is a key employee (as 
                        defined by the Administration) of such small 
                        business concern; and</DELETED>
                <DELETED>    ``(iii) the term `period of military 
                conflict' has the meaning given the term in subsection 
                (n)(1).</DELETED>
        <DELETED>    ``(B) The Administration may make such disaster 
        loans (either directly or in cooperation with banks or other 
        lending institutions through agreements to participate on an 
        immediate or deferred basis) to assist a small business concern 
        (including a small business concern engaged in the lease or 
        rental of real or personal property) that has suffered or that 
        is likely to suffer economic injury as the result of the owner, 
        manager, or key employee of such small business concern being 
        ordered to active military duty during a period of military 
        conflict.</DELETED>
        <DELETED>    ``(C) A small business concern described in 
        subparagraph (B) shall be eligible to apply for assistance 
        under this paragraph during the period beginning on the date on 
        which the owner, manager, or key employee is ordered to active 
        duty and ending on the date that is 180 days after the date on 
        which such owner, manager, or key employee is discharged or 
        released from active duty.</DELETED>
        <DELETED>    ``(D) Any loan or guarantee extended pursuant to 
        this paragraph shall be made at an annual interest rate of 4 
        percent, without regard to the ability of the small business 
        concern to secure credit elsewhere.</DELETED>
        <DELETED>    ``(E) No loan may be made under this paragraph, 
        either directly or in cooperation with banks or other lending 
        institutions through agreements to participate on an immediate 
        or deferred basis, if the total amount outstanding and 
        committed to the borrower under this subsection would exceed 
        $1,500,000, unless such applicant constitutes a major source of 
        employment in its surrounding area, as determined by the 
        Administration, in which case the Administration, in its 
        discretion, may waive the $1,500,000 limitation.</DELETED>
        <DELETED>    ``(F) For purposes of assistance under this 
        paragraph, no declaration of a disaster area shall be 
        required.''.</DELETED>
<DELETED>    (b) Conforming Amendments.--Section 4(c) of the Small 
Business Act (15 U.S.C. 633(c)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (1), by striking ``7(b)(4),''; 
        and</DELETED>
        <DELETED>    (2) in paragraph (2), by striking ``7(b)(4), 
        7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8),''.</DELETED>

<DELETED>SEC. 4. BUSINESS DEVELOPMENT AND MANAGEMENT ASSISTANCE FOR 
              MILITARY RESERVISTS' SMALL BUSINESSES.</DELETED>

<DELETED>    (a) In General.--Section 8 of the Small Business Act (15 
U.S.C. 637) is amended by adding at the end the following:</DELETED>
<DELETED>    ``(l) Management Assistance for Small Businesses Affected 
by Military Operations.--The Administration shall utilize, as 
appropriate, its entrepreneurial development and management assistance 
programs, including programs involving State or private sector 
partners, to provide business counseling and training to any small 
business concern adversely affected by the deployment of units of the 
Armed Forces of the United States in support of a period of military 
conflict (as defined in section 7(n)(1)).''.</DELETED>
<DELETED>    (b) Enhanced Publicity During Operation Allied Force.--For 
the duration of Operation Allied Force and for 120 days thereafter, the 
Administration shall enhance its publicity of the availability of 
assistance provided pursuant to the amendments made by this Act, 
including information regarding the appropriate local office at which 
affected small businesses may seek such assistance.</DELETED>

<DELETED>SEC. 5. GUIDELINES.</DELETED>

<DELETED>    Not later than 30 days after the date of enactment of this 
Act, the Administrator of the Small Business Administration shall issue 
such guidelines as the Administrator determines to be necessary to 
carry out this Act and the amendments made by this Act.</DELETED>

<DELETED>SEC. 6. EFFECTIVE DATES.</DELETED>

<DELETED>    (a) In General.--Except as provided in subsection (b), the 
amendments made by this Act shall take effect on the date of the 
enactment of this Act.</DELETED>
<DELETED>    (b) Disaster Loans.--The amendments made by section 3 
shall apply to economic injury suffered or likely to be suffered as the 
result of a period of military conflict occurring on or after March 24, 
1999.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Reservists Small Business 
Relief Act of 1999''.

SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RESERVISTS.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended by 
adding at the end the following:
    ``(n) Repayment Deferred for Active Duty Reservists.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Eligible reservist.--The term `eligible 
                reservist' means a member of a reserve component of the 
                Armed Forces ordered to active duty during a period of 
                military conflict.
                    ``(B) Essential employee.--The term `essential 
                employee' means an individual who is employed by a 
                small business concern and whose managerial or 
                technical expertise is critical to the successful day-
                to-day operations of that small business concern.
                    ``(C) Period of military conflict.--The term 
                `period of military conflict' means--
                            ``(i) a period of war declared by Congress;
                            ``(ii) a period of national emergency 
                        declared by Congress or by the President; or
                            ``(iii) a period of a contingency 
                        operation, as defined in section 101(a) of 
                        title 10, United States Code.
                    ``(D) Qualified borrower.--The term `qualified 
                borrower' means--
                            ``(i) an individual who is an eligible 
                        reservist and who received a direct loan under 
                        subsection (a) or (b) before being ordered to 
                        active duty; or
                            ``(ii) a small business concern that 
                        received a direct loan under subsection (a) or 
                        (b) before an eligible reservist, who is an 
                        essential employee, was ordered to active duty.
            ``(2) Deferral of direct loans.--
                    ``(A) In general.--The Administration shall, upon 
                written request, defer repayment of principal and 
                interest due on a direct loan made under subsection (a) 
                or (b), if such loan was incurred by a qualified 
                borrower.
                    ``(B) Period of deferral.--The period of deferral 
                for repayment under this paragraph shall begin on the 
                date on which the eligible reservist is ordered to 
                active duty and shall terminate on the date that is 180 
                days after the date such eligible reservist is 
                discharged or released from active duty.
                    ``(C) Interest rate reduction during deferral.--
                Notwithstanding any other provision of law, during the 
                period of deferral described in subparagraph (B), the 
                Administration may, in its discretion, reduce the 
                interest rate on any loan qualifying for a deferral 
                under this paragraph.
            ``(3) Deferral of loan guarantees and other financings.--
        The Administration shall--
                    ``(A) encourage intermediaries participating in the 
                program under subsection (m) to defer repayment of a 
                loan made with proceeds made available under that 
                subsection, if such loan was incurred by a small 
                business concern that is eligible to apply for 
                assistance under subsection (b)(3); and
                    ``(B) not later than 30 days after the date of 
                enactment of this subsection, establish guidelines to--
                            ``(i) encourage lenders and other 
                        intermediaries to defer repayment of, or 
                        provide other relief relating to, loan 
                        guarantees under subsection (a) and financings 
                        under section 504 of the Small Business 
                        Investment Act of 1958 that were incurred by 
                        small business concerns that are eligible to 
                        apply for assistance under subsection (b)(3), 
                        and loan guarantees provided under subsection 
                        (m) if the intermediary provides relief to a 
                        small business concern under this paragraph; 
                        and
                            ``(ii) implement a program to provide for 
                        the deferral of repayment or other relief to 
                        any intermediary providing relief to a small 
                        business borrower under this paragraph.''.

SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RESERVISTS' SMALL 
              BUSINESSES.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended by inserting after the undesignated paragraph that begins with 
``Provided, That no loan'', the following:
            ``(3)(A) In this paragraph--
                    ``(i) the term `essential employee' means an 
                individual who is employed by a small business concern 
                and whose managerial or technical expertise is critical 
                to the successful day-to-day operations of that small 
                business concern;
                    ``(ii) the term `period of military conflict' has 
                the meaning given the term in subsection (n)(1); and
                    ``(iii) the term `substantial economic injury' 
                means an economic harm to a business concern that 
results in the inability of the business concern--
                            ``(I) to meet its obligations as they 
                        mature;
                            ``(II) to pay its ordinary and necessary 
                        operating expenses; or
                            ``(III) to market, produce, or provide a 
                        product or service ordinarily marketed, 
                        produced, or provided by the business concern.
            ``(B) The Administration may make such disaster loans 
        (either directly or in cooperation with banks or other lending 
        institutions through agreements to participate on an immediate 
        or deferred basis) to assist a small business concern that has 
        suffered or that is likely to suffer substantial economic 
        injury as the result of an essential employee of such small 
        business concern being ordered to active military duty during a 
        period of military conflict.
            ``(C) A small business concern described in subparagraph 
        (B) shall be eligible to apply for assistance under this 
        paragraph during the period beginning on the date on which the 
        essential employee is ordered to active duty and ending on the 
        date that is 90 days after the date on which such essential 
        employee is discharged or released from active duty.
            ``(D) Any loan or guarantee extended pursuant to this 
        paragraph shall be made at the same interest rate as economic 
        injury loans under paragraph (2).
            ``(E) No loan may be made under this paragraph, either 
        directly or in cooperation with banks or other lending 
        institutions through agreements to participate on an immediate 
        or deferred basis, if the total amount outstanding and 
        committed to the borrower under this subsection would exceed 
        $1,500,000, unless such applicant constitutes a major source of 
        employment in its surrounding area, as determined by the 
        Administration, in which case the Administration, in its 
        discretion, may waive the $1,500,000 limitation.
            ``(F) For purposes of assistance under this paragraph, no 
        declaration of a disaster area shall be required.''.

SEC. 4. BUSINESS DEVELOPMENT AND MANAGEMENT ASSISTANCE FOR MILITARY 
              RESERVISTS' SMALL BUSINESSES.

    (a) In General.--Section 8 of the Small Business Act (15 U.S.C. 
637) is amended by adding at the end the following:
    ``(l) Management Assistance for Small Businesses Affected by 
Military Operations.--The Administration shall utilize, as appropriate, 
its entrepreneurial development and management assistance programs, 
including programs involving State or private sector partners, to 
provide business counseling and training to any small business concern 
adversely affected by the deployment of units of the Armed Forces of 
the United States in support of a period of military conflict (as 
defined in section 7(n)(1)).''.
    (b) Enhanced Publicity During Operation Allied Force.--For the 
duration of Operation Allied Force and for 120 days thereafter, the 
Administration shall enhance its publicity of the availability of 
assistance provided pursuant to the amendments made by this Act, 
including information regarding the appropriate local office at which 
affected small businesses may seek such assistance.

SEC. 5. GUIDELINES.

    Not later than 30 days after the date of enactment of this Act, the 
Administrator of the Small Business Administration shall issue such 
guidelines as the Administrator determines to be necessary to carry out 
this Act and the amendments made by this Act.

SEC. 6. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this Act shall take effect on the date of the 
enactment of this Act.
    (b) Disaster Loans.--The amendments made by section 3 shall apply 
to economic injury suffered or likely to be suffered as the result of a 
period of military conflict occurring or ending on or after March 24, 
1999.