II 109th CONGRESS 2d Session S. 2482 IN THE SENATE OF THE UNITED STATES March 30, 2006 Ms. Landrieu (for herself and Mr. Kerry) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To authorize funding for State-administered bridge loan programs, to increase the access of small businesses to export assistance center services in areas in which the President declared a major disaster as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, to authorize additional disaster loans, to require reporting regarding the administration of the disaster loan programs, and for other purposes.

1.

Short title

This Act may be cited as the Gulf Coast Open for Business Act of 2006.

2.

Findings

Congress finds that— (1)43 percent of businesses that close following a natural disaster never reopen; (2)an additional 29 percent of businesses close down permanently within 2 years of a natural disaster; (3)Hurricane Katrina struck the Gulf Coast of the United States on August 29, 2005, negatively impacting small business concerns and disrupting commerce in the States of Louisiana, Mississippi, and Alabama; (4)Hurricane Rita struck the Gulf Coast of the United States on September 24, 2005, negatively impacting small business concerns and disrupting commerce in the States of Texas and Louisiana; (5)Hurricane Wilma struck the Gulf Coast of the United States on October 24, 2005, negatively impacting small business concerns and disrupting commerce in the State of Florida; (6)according to the United States Chamber of Commerce, more than 125,000 small and medium-sized businesses in the Gulf Coast were disrupted by Hurricane Katrina or Hurricane Rita and, as of March 2006, local chambers of commerce reported that as many as 2/3 of their members had not resumed business operations; (7)as of March 29, 2006, 7 months will have passed since Hurricane Katrina impacted the Gulf Coast, yet despite that passage of time, small business concerns in the affected States are still in need of assistance; (8)due to a slow initial Federal response and the widespread devastation in the affected States, businesses impacted by Hurricane Katrina are in dire need of increased access to capital, access to State and Federal recovery contracts, and technical assistance to recover and prosper; and (9)without the full recovery and prosperity of affected businesses, the Gulf Coast, and the rest of the United States, will be negatively impacted.

3.

Definitions

In this Act— (1)the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; (2)the term disaster loan program means the disaster loan program authorized under section 7 of the Small Business Act (15 U.S.C. 636); (3)the term Disaster Area means an area in which the President has declared a major disaster in response to Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005; (4)the term major disaster has the meaning given the term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122); (5)the term relevant area means an area in which the President has declared a major disaster, during the period in which such declaration is in effect; (6)the term small business concern has the meaning given the term in section 3 of the Small Business Act (15 U.S.C. 632); and (7)the term 2006 Atlantic hurricane season means the period beginning on June 1, 2006, and ending on November 30, 2006.

4.

State Bridge Loan Programs

(a)

In general

There is authorized to be appropriated to the Secretary of Commerce $50,000,000 for the Economic Development Administration of the Department of Commerce to make grants to the appropriate State government agencies in Louisiana, Alabama, Mississippi, Texas, and Florida, to carry out this section. (b)

Disbursement of funds

The Department of Commerce shall disburse the funds authorized under subsection (a) in the most expeditious manner possible to the designated States, based on— (1)the number of businesses directly damaged or disrupted by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, in the State; (2)the number of residents displaced from the State by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005; (3)the number of jobs lost or disrupted by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, in the State; (4)the extent of economic disruption by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, in the State; and (5)the number of evacuees from any other State due to Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, to whom the designated State is providing assistance. (c)

Use of funds

(1)

In general

Grants awarded to a State under subsection (a) shall be used by the State to provide bridge loans, which may be made to any person located in a Disaster Area who was negatively impacted by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, to assist such person in covering costs until the person is able to obtain loans through Administration assistance programs or other sources. (2)

Reimbursement

A State may use a grant awarded under subsection (a) as reimbursement for any State funds used to provide bridge loans to any person located in a Disaster Area who was negatively impacted by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, before the date on which the funds authorized under subsection (a) are disbursed. (3)

Criteria

Notwithstanding any other provision of law, in making bridge loans under paragraph (1), the State may use such criteria as the State determines appropriate, and shall not be required to apply eligibility criteria for programs administered by the Federal Government, including the Department of Commerce. (4)

Terms

Any loan made by a State under paragraph (1) may initially be a noncollateralized, low-interest loan. (5)

Administrative expenses

The Department of Commerce may use not more than $1,000,000 of the funds authorized under subsection (a) to administer the provision of grants to the designated States under this subsection.

5.

Trade outreach at gulf coast United States export assistance centers

(a)

Increase in small business international trade staff

The Administrator shall hire 1 full-time international finance specialist for the Office of International Trade of the Administration. (b)

Location and service area

The international finance specialist hired under subsection (a)— (1)may be located in the New Orleans, Louisiana United States Export Assistance Center or in the Jackson, Mississippi United States Export Assistance Center; and (2)shall— (A)help to carry out the export promotion efforts described in section 22 of the Small Business Act (15 U.S.C. 649); and (B)provide such services in the States of Louisiana, Mississippi, Alabama, and Arkansas. (c)

Authorization of appropriations

(1)

In general

There are authorized to be appropriated to the Administration to carry out this section— (A)$105,475 for each of fiscal years 2006 through 2011; and (B)such sums as are necessary for each fiscal year thereafter. (2)

Availability of funds

Amounts made available under this subsection shall remain available until expended.

6.

Small business development centers

(a)

Waiver of maximum amount

Section 21(a)(4) of the Small Business Act (15 U.S.C. 648(a)(4)) is amended by adding at the end the following: (D)

Fiscal years 2005 and 2006

For fiscal years 2005 and 2006, the Administrator has the authority to waive the maximum amount of $100,000 for grants under subparagraph (C)(viii), and such grants shall be made available for small business development centers assisting small business concerns adversely affected by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005. . (b)

Assistance after hurricane katrina, hurricane rita, and hurricane wilma

Section 21(b) of the Small Business Act (15 U.S.C. 648(b)) is amended by adding at the end the following: (4)

Assistance after hurricane katrina, hurricane rita, and hurricane wilma

(A)

In general

The Administration shall authorize any small business development center, regardless of location, to provide advice, information, and assistance, as described in subsection (c), to a small business concern located in an area in which the President has designated as a major disaster (as that term is defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)) as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, Hurricane Wilma of 2005. (B)

Continuity of services

A small business development center that provides counselors to an area described in subparagraph (A) shall, to the maximum extent practicable, ensure continuity of services in the State it currently serves. .

7.

Disaster loans after Hurricane Katrina, Hurricane Rita, and Hurricane Wilma

(a)

In a disaster area

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended by inserting immediately after paragraph (3) the following: (4)

Authority for lenders to process disaster loans

The Administrator may enter into an agreement with a qualified lender, as determined by the Administrator, to process loans under this section, under which the Administrator shall pay the lender a fee for each loan processed. (5)

Authority for the administrator to contract with lenders for loan loss verification services

The Administrator may enter into an agreement with a qualified lender or loss verification professional, as determined by the Administrator, to verify losses for loans under this section, under which the Administrator shall pay the lender or verification professional a fee for each loan for which such lender or verification professional verifies losses. (6)

Disaster loans after Hurricane Katrina, Hurricane Rita, and Hurricane Wilma in a disaster area

(A)

Definitions

In this paragraph— (i)the term Disaster Area means an area in which the President has declared a major disaster in response to Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005; and (ii)the term qualified borrower means a person to whom the Administrator made a loan under this section because of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005. (B)

Loans to nonprofits

In addition to any other loan authorized by this subsection, the Administrator may make such loans under this subsection (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administrator determines appropriate to a nonprofit organization, including a religious organization, that was located in a Disaster Area on August 29, 2005, and was negatively impacted or is providing services to persons who were negatively impacted by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005. (C)

Deferment of disaster loan payments

(i)

In general

Notwithstanding any other provision of law, payments of principal and interest on a loan to a qualified borrower made before August 24, 2007, shall be deferred, and no interest shall accrue with respect to such loan, during the time period described in clause (ii). (ii)

Time period

The time period for purposes of clause (i) shall be 1 year from the later of the date of enactment of this paragraph or the date on which funds are distributed under a loan described in clause (i), but may be extended to 2 years from such date, at the discretion of the Administrator. (iii)

Resumption of payments

At the end of the time period described in clause (ii), the payment of periodic installments of principal and interest shall be required with respect to such loan, in the same manner and subject to the same terms and conditions as would otherwise be applicable to any other loan made under this subsection. (D)

Extended application period

Notwithstanding any other provision of law, the Administrator shall accept applications for assistance under this subsection as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 until 1 year after the date on which the President declared a major disaster, as that term is defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122), as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, as the case may be. (E)

Prohibition on sale of disaster loans

No loan under this subsection made as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 may be sold. . (b)

Nationwide disaster loans

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as amended by this Act, is amended by inserting immediately after paragraph (6) the following: (7)

Nationwide loans after Hurricane Katrina, Hurricane Rita, and Hurricane Wilma

In addition to any other loan authorized by this subsection, the Administrator may make such loans under this subsection (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administrator determines appropriate to a small business concern, small agricultural cooperative, small nursery, or small producer cooperative located anywhere in the United States that demonstrates a direct adverse economic impact caused by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, based on such criteria as the Administrator may set by rule, regulation, or order. . (c)

Disaster mitigation

(1)

In general

Section 7(b)(1)(A) of the Small Business Act (15 U.S.C. 636(b)(1)(A)) is amended by inserting of the aggregate costs of such damage or destruction (whether or not compensated for by insurance or otherwise) after 20 per centum. (2)

Effective date

(A)

In general

Except as provided in subparagraph (B), the amendment made by paragraph (1) shall apply with respect to a loan or guarantee made after the date of enactment of this Act. (B)

Loans in a Disaster Area

For any loan or guarantee to a person located in a Disaster Area, the amendment made by paragraph (1), shall apply with respect to a loan or guarantee under which funds are disbursed on or after the date on which the President declared a major disaster as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, as the case may be. (d)

Monthly accounting report to congress

(1)

In general

On the first Monday of each month, the Administrator shall provide to the Committee on Small Business and Entrepreneurship of the Senate and to the Committee on Small Business of the House of Representatives a report on the disaster loan program for the preceding month. (2)

Contents

Each report under paragraph (1) shall include— (A)the daily average lending volume, in number of loans and dollars, and the percent by which each category has increased or decreased since the previous report under paragraph (1); (B)the weekly average lending volume, in number of loans and dollars, and the percent by which each category has increased or decreased since the previous report under paragraph (1); (C)the amount of funding spent over the month for loans, both in appropriations and program level, and the percent by which each category has increased or decreased since the previous report under paragraph (1); (D)the amount of funding available for loans, both in appropriations and program level, and the percent by which each category has increased or decreased, noting the source of any additional funding; (E)an estimate of how long the available funding for such loans will last, based on the spending rate; (F)the amount of funding spent over the month for staff, along with the number of staff, and the percent by which each category has increased or decreased since the previous report under paragraph (1); (G)the amount of funding spent over the month for administrative costs, and the percent by which spending has increased or decreased since the previous report under paragraph (1); (H)the amount of funding available for salaries and expenses combined, and the percent by which funding has increased or decreased, noting the source of any additional funding; and (I)an estimate of how long the available funding for salaries and expenses will last, based on the spending rate. (e)

Daily disaster updates to congress for presidentially declared disasters

(1)

In general

During the period beginning on the date on which the President declares a major disaster and ending on the date on which such declaration terminates, on each day, excluding Federal holidays and weekends, the Administrator shall provide to the Committee on Small Business and Entrepreneurship of the Senate and to the Committee on Small Business of the House of Representatives a report on the operation of the disaster loan program for the area in which the President declared such major disaster. (2)

Contents

Each report under paragraph (1) shall include— (A)the allocations of loan processing, loss verification, and additional field staff at Administration offices nationwide, as well as the allocations of such staff at the various disaster field offices, disaster recovery centers, and workshops in each State in the relevant area; (B)the daily number of applications received from applicants in the relevant area, as well as a breakdown of such figures by State; (C)the daily number of applications pending application entry from applicants in the relevant area, as well as a breakdown of such figures by State; (D)the daily number of applications withdrawn by applicants in the relevant area, as well as a breakdown of such figures by State; (E)the daily number of applications summarily declined by the Administrator from applicants in the relevant area, as well as a breakdown of such figures by State; (F)the daily number of applications declined by the Administrator from applicants in the relevant area, as well as a breakdown of such figures by State; (G)the daily number of applications in process from applicants in the relevant area, as well as a breakdown of such figures by State; (H)the daily number of applications approved by the Administrator from applicants in the relevant area, as well as a breakdown of such figures by State; (I)the daily dollar amount of applications approved by the Administrator from applicants in the relevant area, as well as a breakdown of such figures by State; (J)the daily amount of loans dispersed, both partially and fully, by the Administrator to applicants in the relevant area, as well as a breakdown of such figures by State; (K)the daily dollar amount of loans dispersed, both partially and fully, from the Disaster Area, as well as a breakdown of such figures by State; (L)the number of applications approved, including dollar amount approved, as well as applications partially and fully dispersed, including dollar amounts, since the last report under paragraph (1); and (M)the declaration date, physical damage closing date, economic injury closing date, and number of counties included in the declaration of a major disaster. (f)

Technical amendments

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended— (1)in the matter preceding paragraph (1), by striking the, Administration and inserting the Administration; (2)in paragraph (2)(A), by striking Disaster Relief and Emergency Assistance Act and inserting Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); and (3)in the undesignated matter at the end— (A)by striking , (2), and (4) and inserting and (2); and (B)by striking , (2), or (4) and inserting (2).

8.

HUBZones

(a)

In general

Section 3(p)(1) of the Small Business Act (15 U.S.C. 632(p)(1)) is amended— (1)in subparagraph (D), by striking or at the end; (2)in subparagraph (E), by striking the period at the end and inserting ; or; and (3)by adding at the end the following: (F)an area in which the President has declared a major disaster, as that term is defined in 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122), in response to Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 . (b)

Termination

(1)

In general

The amendments made by subsection (a) are repealed effective on the date that is 5 years after the date of enactment of this Act. (2)

Report

Not later than the date described in paragraph (1), the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report— (A)describing the impact of designating as a HUBZone any area that the President declared a major disaster as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005; (B)assessing the efficacy of the designation described in subparagraph (A) in creating a positive economic impact in the area described in subparagraph (A); and (C)making recommendations, if any, regarding the extension of the designation described in subparagraph (A).

9.

Small business participation

(a)

In general

It is the policy of the United States that small business concerns with headquarters in the region affected by Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, or employing a significant number of individuals from that region, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency for activities related to relief, recovery, or reconstruction as a result of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005. (b)

Goals

To facilitate the maximum practicable utilization of small business concerns in the federally funded projects described in subsection (a), the Administrator and the head of any Federal agency making procurements related to relief, recovery, or reconstruction in the region described in subsection (a) shall set a goal, effective not later than 90 days after the date of enactment of this Act, to award not less than 30 percent of amounts expended for prime contracts and not less than 40 percent of amounts expended for subcontracts on procurements by such agency related to the aftermath of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 to small business concerns described in subsection (a). (c)

Report

Not later than 7 days after the date of enactment of this Act, and every 7 days thereafter, the Administrator shall compile data using the Federal Procurement Data System and provide to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report of the utilization of small business concerns and amount of contracts awarded to small business concerns for disaster relief, recovery, and reconstruction related to the aftermath of Hurricane Katrina of 2005, Hurricane Rita of 2005, and Hurricane Wilma of 2005.

10.

Use of local firms and individuals

Section 307 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5150) is amended to read as follows:

307.

Use of local firms and individuals

In the expenditure of Federal funds for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities which may be carried out by contract or agreement with private organizations, firms, or individuals, preference shall be given, to the maximum extent practicable, to those organizations, firms, and individuals residing or doing business primarily in the area affected by such disaster or emergency. The Federal Government shall establish a goal to award not less than 10 percent of such contracts to firms within or in close proximity of the area in which the President has declared a major disaster during the term of such designation. This section shall not be considered to restrict the use of Department of Defense resources in the provision of major disaster assistance under this Act.

.

11.

Nondiscrimination in disaster assistance

Section 308(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5151(b)) is amended by adding at the end the following: The requirements of this subsection shall also apply to the awarding of contracts for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities and shall require governmental bodies to fully consider the utilization of expedited procurement tools for small business concerns, small business concerns owned and controlled by service-disabled veterans, and HUBZone small business concerns, as such terms are defined in section 3 of the Small Business Act (15 U.S.C. 632) and for small business concerns owned and controlled by socially and economically disadvantaged individuals, as such term is defined in section 8 of the Small Business Act (15 U.S.C. 637)..

12.

Removing barriers to bonding for small businesses

(a)

Requisitions

Notwithstanding any other provision of law, for any procurement related to Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 that has been set-aside for small business concerns, the Administrator shall negotiate with the head of the Federal agency making such procurement an agreement to permit contracting officers to submit requisitions on a biweekly basis. (b)

Sureties

(1)

In general

The Administrator shall waive any increase in guarantee fees for a surety providing guarantees related to contracts for disaster relief, recovery, or reconstruction related to the aftermath of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005 under the Surety Bond Guarantee Program under part B of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 694a et seq.) during the 5-year period beginning on the date of enactment of this Act. (2)

Preferred program

For any contract for relief, recovery, or reconstruction related to the aftermath of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005, the Administrator may permit a surety participating in the Preferred Surety Bond Guarantee Program under section 411(a)(3) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)(3)) to use rates approved by the insurance commissioner in the State in which such contract will be performed. (3)

Reporting

Not later than 180 days after the date of enactment of this Act and annually thereafter, the Administrator shall report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives on availability of bonds to small business concerns performing contracts for disaster relief, recovery, or reconstruction related to the aftermath of Hurricane Katrina of 2005, Hurricane Rita of 2005, or Hurricane Wilma of 2005.

13.

Hurricane response plan for the 2006 hurricane season

(a)

In general

Not later than May 31, 2006, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a 2006 Atlantic hurricane season disaster response plan. (b)

Contents

The disaster response plan required under subsection (a) shall include— (1)the plan of the Administrator for responding quickly and efficiently after the occurrence of a major disaster during the 2006 Atlantic hurricane season, including a plan on prepositioning disaster response resources and staff, such as loss verifiers and small business development center staff; (2)a description of how the Administrator plans to integrate and coordinate the response to a major disaster with the staff and resources of the Federal Emergency Management Agency, including details on where and when joint training simulations are planned during the 2006 Atlantic hurricane season; (3)a description of how the Administrator plans to integrate and coordinate the response to a major disaster with the technical assistance programs of the Administration, including the small business development centers; (4)the contingency plans of the Administration, if any, for handling increases in the volume of applications under the disaster loan program during the 2006 Atlantic hurricane season, including detailed plans for using local banks, credit unions, and businesses in an area in which the President declares a major disaster or the hiring of additional loan processing and loss verification staff; (5)figures and job descriptions regarding the full-time planning and full-time disaster response staff of the Administration; (6)the in-service and pre-service training procedures for disaster response staff of the Administration; (7)the standard operating procedures of the Administration for responding to hurricanes; and (8)a description of the findings and recommendations, if any, based on a review of the response of the Administration to Hurricane Katrina of 2005, Hurricane Rita of 2005, and Hurricane Wilma of 2005.