[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3487 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3487

To amend the Small Business Act to reauthorize and improve the disaster 
                 loan program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 8, 2006

 Mr. Kerry (for himself and Mr. Pryor) introduced the following bill; 
 which was read twice and referred to the Committee on Small Business 
                          and Entrepreneurship

_______________________________________________________________________

                                 A BILL


 
To amend the Small Business Act to reauthorize and improve the disaster 
                 loan program, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Disaster Loan 
Reauthorization and Improvements Act of 2006''.

SEC. 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) the plan of the Federal Government for response and 
        recovery with respect to large scale disasters does not meet 
        the needs of homeowners and small business concerns;
            (4) on February 1, 2006, more than 5 months after Hurricane 
        Katrina struck the Gulf Coast, 48 percent of disaster loan 
        applications remained unprocessed, meaning that of the nearly 
        370,000 disaster loan applications received by the 
        Administration, nearly 178,000 remained unprocessed;
            (5) as of May 23, 2006, only 35 percent of total disaster 
        loan applications received by the Administration had been 
        approved;
            (6) the Administration lacks the tools to respond 
        immediately and effectively to the needs of victims in the 
        aftermath of a large scale disaster, such as the terrorist 
        attacks of September 11, 2001, or the 2005 Gulf Coast 
        hurricanes;
            (7) during a major disaster, the Administration should 
        utilize private lenders to assist in processing loans, so that 
        a back log of this magnitude will not prevent disaster victims 
        from accessing capital;
            (8) during 2004 and 2005, in the aftermath of Hurricane 
        Charlie, Hurricane Francis, Hurricane Ivan, Hurricane Jeanne, 
        Hurricane Dennis, and Hurricane Wilma, the State of Florida 
        distributed $49,304,902 in bridge loans to small business 
        concerns, helping to save an estimated 32,560 jobs statewide;
            (9) there needs to exist a Federal standard for providing 
        bridge loans to disaster victims, to provide access to capital 
        while they wait for other types of assistance;
            (10) there is a demonstrated need for counseling in the 
        small business community that is not being met by the 
        Administration; and
            (11) there is a need for greater coordination between 
        responding agencies during disasters so that Federal Government 
        can put the needs of victims first.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the terms ``Administration'' and ``Administrator'' mean 
        the Small Business Administration and the Administrator 
        thereof, respectively;
            (2) the term ``applicable declared disaster'' means the 
        declared disaster for the disaster area in which the person 
        seeking assistance under section 11(c) is located;
            (3) the term ``catastrophic national disaster'' means a 
        catastrophic national disaster declared under paragraph (4) of 
        section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
        added by this Act;
            (4) the term ``declared disaster'' means a major disaster 
        or a catastrophic national disaster;
            (5) the term ``disaster area'' means--
                    (A) in the case of a major disaster, the area for 
                which such disaster was declared, during the period of 
                such declaration; and
                    (B) in the case of a catastrophic national 
                disaster, the United States, during the period of such 
                declaration;
            (6) the term ``disaster assistance'' means assistance under 
        the disaster loan program of the Administration and section 
        321(a) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1961(a));
            (7) the term ``disaster loan program of the 
        Administration'' means the assistance under section 7(b) of the 
        Small Business Act (15 U.S.C. 636(b));
            (8) the term ``disaster update period'' means the period 
        beginning on the date on which the President declares a major 
        disaster or a catastrophic national disaster and ending on the 
        date on which such declaration terminates;
            (9) the term ``major disaster'' has the same meaning as in 
        section 102 of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (42 U.S.C. 5122);
            (10) the term ``small business concern'' has the same 
        meaning as in section 3 of the Small Business Act (15 U.S.C. 
        632); and
            (11) the term ``small business development center'' means a 
        small business development center established under section 21 
        of the Small Business Act (15 U.S.C. 648).

SEC. 4. DISASTER LOAN PROGRAMS REAUTHORIZATION.

    (a) General Authority.--Section 20 of the Small Business Act (15 
U.S.C. note) is amended by inserting after subsection (e) the 
following:
    ``(f) Additional Authorizations for Fiscal Years 2007 Through 
2009.--There are authorized to be appropriated to the Administration 
for each of fiscal years 2007 through 2009, such sums as may be 
necessary to carry out the provisions of this Act not elsewhere 
provided for, including administrative expenses and necessary loan 
capital for disaster loans pursuant to section 7(b), and to carry out 
the Small Business Investment Act of 1958, including salaries and 
expenses of the Administration.''
    (b) Disaster Mitigation Program.--
            (1) In general.--Section 20(c) of the Small Business Act 
        (15 U.S.C. note) is amended by adding at the end the following:
            ``(3) $15,000,000 for fiscal year 2007.
            ``(4) $15,000,000 for fiscal year 2008.
            ``(5) $15,000,000 for fiscal year 2009.''.
            (2) Increase of loan amounts.--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''.
            (3) Predisaster mitigation.--Section 7(b)(1)(C) of the 
        Small Business Act (15 U.S.C. 636(b)(1)(C)) is amended by 
        striking ``fiscal years 2000 through 2004'' and inserting 
        ``fiscal years 2007 through 2009''.

SEC. 5. CATASTROPHIC NATIONAL DISASTERS.

    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) Catastrophic national disasters.--
                    ``(A) Definition.--In this paragraph the term 
                `catastrophic national disaster' means a disaster, 
                natural or other, that the President determines has 
                caused significant adverse physical or economic 
                conditions outside of the geographic reach of the 
                disaster.
                    ``(B) Authorization.--The Administrator may make 
                such loans under this paragraph (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 small business concerns located anywhere 
                in the United States that are economically adversely 
                impacted as a result of a catastrophic national 
                disaster.
                    ``(C) Loan terms.--A loan under this paragraph 
                shall be made on the same terms as a loan under 
                paragraph (2).''.

SEC. 6. PUBLIC AWARENESS OF DISASTER DECLARATION AND APPLICATION 
              PERIODS.

    (a) In General.--Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)) is amended by inserting immediately after paragraph (4), as 
added by this Act, the following:
            ``(5) Coordination with fema.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, for any disaster (including a 
                catastrophic national disaster) declared under this 
                subsection or 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)), 
                the Administrator, in consultation with the Director of 
                the Federal Emergency Management Agency, shall ensure, 
                to the maximum extent practicable, that all application 
                periods for disaster relief under this Act and the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act begin on the same date and end on the 
                same date.
                    ``(B) Deadline extensions.--Notwithstanding any 
                other provision of law--
                            ``(i) not later than 7 days before the 
                        closing date of an application period for 
                        disaster relief under this Act for any disaster 
                        (including a catastrophic national disaster) 
                        declared under this subsection, the 
                        Administrator, in consultation with the 
                        Director of the Federal Emergency Management 
                        Agency, shall determine whether to extend such 
                        application period; and
                            ``(ii) not later than 7 days before the 
                        closing date of an application period for 
                        disaster relief under the Robert T. Stafford 
                        Disaster Relief and Emergency Assistance Act 
                        for any 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)) for which the President has 
                        declared a catastrophic national disaster under 
                        paragraph (4), the Director of the Federal 
                        Emergency Management Agency, in consultation 
                        with the Administrator, shall determine whether 
                        to extend such application period.
            ``(6) Public awareness of disasters.--If a disaster 
        (including a catastrophic national disaster) is declared under 
        this subsection, the Administrator shall make every effort to 
        communicate through radio, television, print, and web-based 
        outlets, all relevant information needed by disaster loan 
        applicants, including--
                    ``(A) the date of such declaration;
                    ``(B) cities and towns within the area of such 
                declaration;
                    ``(C) loan application deadlines related to such 
                disaster;
                    ``(D) all relevant contact information for victim 
                services available through the Administration 
                (including links to small business development center 
                websites);
                    ``(E) links to relevant State disaster assistance 
                websites; and
                    ``(F) information on eligibility criteria for 
                Federal Emergency Management Agency disaster assistance 
                applications, as well as for Administration loan 
                programs, including where such applications can be 
                found.''.
    (b) Coordination of Agencies and Outreach.--Not later than 90 days 
after the date of enactment of this Act, the Administrator and the 
Director of the Federal Emergency Management Agency shall enter into an 
agreement that ensures adequate lodging and transportation for 
employees of the Administration, contract employees, and volunteers 
during a major disaster, if such staff are needed to assist businesses, 
homeowners, or renters in recovery.
    (c) Marketing and Outreach.--Not later than 90 days after the date 
of enactment of this Act, the Administrator shall create a marketing 
and outreach plan that--
            (1) encourages a proactive approach to the disaster relief 
        efforts of the Administration;
            (2) distinguishes between disaster services provided by the 
        Administration and disaster services provided by the Federal 
        Emergency Management Agency, including contact information, 
        application information, and timelines for submitting 
        applications, the review of applications, and the disbursement 
        of funds;
            (3) describes the different disaster loan programs of the 
        Administration, including how they are made available and what 
        eligibility requirements exist for each loan program;
            (4) provides for regional marketing, focusing on disasters 
        occurring in each region before the date of enactment of this 
        Act, and likely scenarios for disasters in each such region; 
        and
            (5) ensures that the marketing plan is made available at 
        small business development centers and on the website of the 
        Administration.

SEC. 7. COORDINATION OF USDA AND ADMINISTRATION DISASTER LOAN PROGRAMS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Comptroller General of the United States shall conduct 
a study and submit a report to the appropriate committees of Congress 
regarding whether, and if so which, industries have difficulty 
obtaining disaster assistance from the Administration or the Department 
of Agriculture.
    (b) Contents.--The report submitted under subsection (a) shall--
            (1) consider relevant disasters declared under section 7(b) 
        of the Small Business Act and relevant disasters declared under 
        section 321 of the Consolidated Farm and Rural Development Act;
            (2) evaluate the provisions of law referred to in paragraph 
        (1) and the regulations promulgated thereunder, as well as the 
        division of responsibilities and any memoranda of understanding 
        between the Department of Agriculture and the Administration, 
        to ensure consistency in providing disaster assistance;
            (3) determine whether there are industries that are not 
        covered under section 7(b) of the Small Business Act or section 
        321 of the Consolidated Farm and Rural Development Act; and
            (4) make recommendations, if any, regarding how the needs 
        of industries can be better met during a disaster described in 
        paragraph (1).
    (c) Definition.--As used in this section, the term ``appropriate 
committees of Congress'' means--
            (1) the Committee on Agriculture, Nutrition, and Forestry 
        and the Committee on Small Business and Entrepreneurship of the 
        Senate; and
            (2) the Committee on Agriculture and the Committee on Small 
        Business of the House of Representatives.

SEC. 8. CONSISTENCY BETWEEN ADMINISTRATION REGULATIONS AND STANDARD 
              OPERATING PROCEDURES.

    The Administrator shall, promptly following the date of enactment 
of this Act, revise the standard operating procedures of the 
Administration so that such procedures are consistent with 
Administration regulations for administering the disaster loan program 
of the Administration.

SEC. 9. STUDY AND REPORT ON FEMA REVIEW PROCESS FOR REFERRALS DURING 
              DISASTER ASSISTANCE APPLICATION PROCESS.

    (a) Study.--The Comptroller General of the United States shall 
evaluate the disaster assistance application and referral processes of 
the Federal Emergency Management Agency and their impact on the 
disaster loan assistance process at the Administration.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General shall submit a report to the 
Committee on Small Business and Entrepreneurship and the Committee on 
Homeland Security and Governmental Affairs of the Senate, and the 
Committee on Small Business and the Committee on Homeland Security of 
the House of Representatives on its findings under subsection (a), 
together with recommendations on the effectiveness and efficiency of 
the Federal Emergency Management Agency disaster assistance application 
process in directing eligible applicants to the Administration, and any 
recommendations for legislative action.

SEC. 10. DEVELOPMENT AND IMPLEMENTATION OF MAJOR DISASTER RESPONSE 
              PLAN.

    (a) In General.--Not later than January 31, 2007, the Administrator 
shall, by rule, amend the 2006 Atlantic hurricane season disaster 
response plan of the Administration to apply to major disasters and 
catastrophic national disasters, consistent with this Act and the 
amendments made by this Act.
    (b) Inclusions.--In carrying out this section, the Administrator 
shall develop and execute, not later than May 31, 2007, simulation 
exercises to demonstrate the effectiveness of the amended Hurricane 
Response Plan.

SEC. 11. OTHER LOAN ASSISTANCE.

    (a) Authority for Qualified Private Contractors to Process Disaster 
Loans.--Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended by inserting immediately after paragraph (6), as added by this 
Act, the following:
            ``(7) Authority for qualified private contractors to 
        process disaster loans.--The Administrator may enter into an 
        agreement with a qualified private contractor, as determined by 
        the Administrator, to process loans under this subsection in 
        the event of a major disaster (as defined in section 102 of the 
        Robert T. Stafford Disaster Relief and Emergency Assistance Act 
        (42 U.S.C. 5122)) or a catastrophic national disaster declared 
        under paragraph (4), under which the Administrator shall pay 
        the contractor a fee for each loan processed.''.
    (b) State Bridge Loan Program.--
            (1) Authorization.--Notwithstanding any other provision of 
        law, a State may use funds made available under title I of the 
        Housing and Community Development Act of 1974 (42 U.S.C. 5301 
        et seq.) to make bridge grants and loans to any person located 
        in a disaster area in such State who was negatively impacted by 
        the applicable declared disaster, to assist such person in 
        covering costs until the person is able to obtain loans through 
        Administration assistance programs or other sources.
            (2) Use of funds.--
                    (A) In general.--Funds designated under paragraph 
                (1) shall be used by a State to provide bridge grants 
                and loans, which may be made to any person located in a 
                disaster area in such State who was negatively impacted 
                by the applicable declared disaster
                    (B) Reimbursement.--A State may use the funds 
                authorized under paragraph (1) as reimbursement for any 
                State funds used to provide bridge grants or loans to 
                any person located in a disaster area in such State who 
                was negatively impacted by the applicable declared 
                disaster, before the date on which the funds authorized 
                under paragraph (1) are made available.
                    (C) Criteria.--Notwithstanding any other provision 
                of law, in making bridge grants and 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.
                    (D) Terms.--For any loan made by a State under 
                subparagraph (A)--
                            (i) such a loan may initially be a 
                        noncollateralized, low-interest loan;
                            (ii) payments and interest on such a loan 
                        may be deferred for at least 1 year after the 
                        date on which the loan is made;
                            (iii) the balance remaining on such a loan 
                        5 years after the date on which the loan is 
                        made may be forgiven entirely by the State, if 
                        the borrower has continued to operate during 
                        that 5-year period in a disaster area in such 
                        State; and
                            (iv) such a loan may be forgiven by the 
                        State, under such terms as it may set, if the 
                        borrower cannot repay such loan.
    (c) Loans to Nonprofits.--Section 7(b) of the Small Business Act 
(15 U.S.C. 636(b)) is amended by inserting immediately after paragraph 
(7), as added by this Act, the following:
            ``(8) Disaster loans to nonprofits.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `applicable date' means the 
                        day before the date on which a major disaster 
                        or a catastrophic national disaster occurred, 
                        as the case may be;
                            ``(ii) the term `disaster area' means--
                                    ``(I) in the case of a major 
                                disaster, the area for which such 
                                disaster was declared; and
                                    ``(II) in the case of a 
                                catastrophic national disaster under 
                                paragraph (4), the United States; and
                            ``(iii) the term `major disaster' has the 
                        same meaning as in section 102 of the Robert T. 
                        Stafford Disaster Relief and Emergency 
                        Assistance Act (42 U.S.C. 5122).
                    ``(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--
                            ``(i) was--
                                    ``(I) located in a disaster area on 
                                the applicable date for such disaster 
                                area; and
                                    ``(II) negatively impacted by the 
                                major disaster or the catastrophic 
                                national disaster declared under 
                                paragraph (4), as the case may be; or
                            ``(ii) is providing services to persons who 
                        were negatively impacted by a major disaster or 
                        a catastrophic national disaster declared under 
                        paragraph (4).''.
    (d) Increased Loan Caps.--Section 7(b) of the Small Business Act 
(15 U.S.C. 636(b)) is amended by inserting immediately after paragraph 
(8), as added by this Act, the following:
            ``(9) Loan caps.--
                    ``(A) Aggregate loan amounts.--Notwithstanding any 
                other provision of law, and except as provided in 
                subparagraph (B), the aggregate loan amount outstanding 
                and committed to a borrower under this subsection made 
                as a result of a major disaster (as defined in section 
                102 of the Robert T. Stafford Disaster Relief and 
                Emergency Assistance Act (42 U.S.C. 5122)) or a 
                catastrophic national disaster declared under paragraph 
                (4) may not exceed $10,000,000.
                    ``(B) Waiver authority.--The Administrator may, at 
                the discretion of the Administrator, waive the 
                aggregate loan amount established under subparagraph 
                (A).''.
    (e) Coordination of Efforts Between the Administrator and the 
Internal Revenue Service to Expedite Loan Processing.--The 
Administrator and the Commissioner of Internal Revenue shall, to the 
maximum extent practicable, ensure that all relevant and allowable tax 
records for loan approval are shared with loan processors in an 
expedited manner, upon request by the Administrator.
    (f) Use of Predisaster Credit Score.--Section 7(b) of the Small 
Business Act (15 U.S.C. 636(b)) is amended by inserting immediately 
after paragraph (9), as added by this Act, the following:
            ``(10) Credit score.--Notwithstanding any other provision 
        of law, in making a loan under this subsection, the 
        Administrator shall assess the risk of default by the applicant 
        based on the credit score of the applicant on the day before 
        the date on which the disaster for which the applicant is 
        seeking assistance was declared.''.
    (g) Report on Loan Approval Rate.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Administrator shall submit a report 
        to the Committee on Small Business and Entrepreneurship of the 
        Senate and the Committee on Small Business of the House of 
        Representatives detailing how the Administration can improve 
        the processing of applications under the disaster loan program 
        of the Administration.
            (2) Contents.--The report submitted under paragraph (1) 
        shall include--
                    (A) recommendations, if any, regarding--
                            (i) staffing levels during a major 
                        disaster; and
                            (ii) how to improve the process for 
                        processing, approving, and disbursing loans 
                        under the disaster loan program of the 
                        Administration, to ensure that the maximum 
                        assistance is provided to victims in a timely 
                        manner; and
                    (B) the plans of the Administrator for implementing 
                any recommendation made under subparagraph (A).
    (h) Supplemental Emergency Loans After Disasters.--
            (1) In general.--Section 7(a) of the Small Business Act (15 
        U.S.C. 636(a)) is amended by adding at the end the following:
            ``(32) Supplemental emergency loans after disasters.--
                    ``(A) Loan authority.--In addition to any other 
                loan authorized by this subsection, the Administrator 
                shall 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, 
                located anywhere in the United States, that is directly 
                adversely affected by a catastrophic national disaster 
                declared under subsection (b)(4), based on such 
                criteria as the Administrator may set by rule, 
                regulation, or order, subject to subparagraph (B).
                    ``(B) Oversight protections.--In making any loan 
                under subparagraph (A)--
                            ``(i) the borrower shall be made aware that 
                        such loans are for those directly adversely 
                        affected by a catastrophic national disaster; 
                        and
                            ``(ii) if such loans are made in 
                        cooperation with a bank or other lending 
                        institution--
                                    ``(I) lenders shall document for 
                                the Administrator how the borrower was 
                                directly adversely affected by the 
                                catastrophic national disaster; and
                                    ``(II) not later than 6 months 
                                after the date of enactment of this 
                                paragraph, and every 6 months 
                                thereafter, the Inspector General of 
                                the Administration shall make a report 
                                regarding such loans to the Committee 
                                on Small Business and Entrepreneurship 
                                of the Senate and the Committee on 
                                Small Business of the House of 
                                Representatives, including verification 
                                that the program is being administered 
                                appropriately and that such loans are 
                                being used for purposes authorized by 
                                this paragraph.
                    ``(C) Fees.--Notwithstanding any other provision of 
                law, the Administrator shall, in lieu of the fee 
                established under paragraph (23)(A), collect an annual 
                fee of 0.25 percent of the outstanding balance of a 
                loan made under this paragraph.
                    ``(D) Evaluation of lenders.--The Office of Lender 
                Oversight of the Administration shall evaluate the 
                portfolio of loans for a lender under this paragraph 
                separately from the rest of the loans made under this 
                subsection by such lender.
            ``(33) Guarantee fees.--Notwithstanding any other provision 
        of law, the guarantee fee under paragraph (18)(A) for a 
        guarantee under this subsection of a loan made because of a 
        catastrophic national disaster declared under subsection 
        (b)(4), shall be as follows:
                    ``(A) A guarantee fee equal to 1 percent of the 
                deferred participation share of a total loan amount 
                that is not more than $150,000.
                    ``(B) A guarantee fee equal to 2.5 percent of the 
                deferred participation share of a total loan amount 
                that is more than $150,000, but not more than $700,000.
                    ``(C) A guarantee fee equal to 3.5 percent of the 
                deferred participation share of a total loan amount 
                that is more than $700,000.''.
            (2) Separate treatment for supplemental emergency loans.--
        Only for purposes of the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661 et seq.), loans made or approved under section 
        7(a)(32) of the Small Business Act, as added by this 
        subsection, shall be treated as a separate program of the Small 
        Business Administration.
            (3) Authorization of appropriations.--
                    (A) In general.--There are authorized to be 
                appropriated to the Administration for each of fiscal 
                years 2007 through 2009, such sums as may be necessary 
                to carry out section 7(a)(32) of the Small Business 
                Act, as added by this subsection, including 
                administrative expenses and necessary loan capital.
                    (B) Offset cost.--Assistance under section 7(a)(32) 
                of the Small Business Act, as added by this subsection, 
                shall be available only to the extent that funds are 
                made available in advance in appropriations Acts to 
                offset the cost (as such term is defined in section 502 
                of the Federal Credit Reform Act of 1990 (2 U.S.C. 
                661a)) of providing such assistance.
    (i) Development Company Debentures.--
            (1) Authority.--Section 503 of the Small Business 
        Investment Act of 1958 (15 U.S.C. 697) is amended by adding at 
        the end the following:
    ``(j) Debentures After a Catastrophic National Disaster.--
            ``(1) Authority.--
                    ``(A) In general.--In addition to any other 
                guarantee authorized by this section, the Administrator 
                may guarantee the timely payment of all principal and 
                interest, as scheduled on any debenture issued to a 
                qualified borrower.
                    ``(B) Terms.--The Administrator shall establish a 
                fee for a guarantee issued under subparagraph (A) that 
                is lower than that for other guarantees under this 
                section.
            ``(2) Existing guarantees.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Administrator may temporarily 
                defer payments of principal and interest on a guarantee 
                made under this section before the date on which a 
                catastrophic national disaster was declared to a 
                qualified borrower directly adversely affected by such 
                catastrophic national disaster, in any case in which 
                the payments are owed to the Administration.
                    ``(B) Payments to other parties.--Notwithstanding 
                any other provision of law, the Administrator may 
                temporarily make payments of principal and interest on 
                a loan made under this section before the date on which 
                a catastrophic national disaster was declared to a 
                qualified borrower directly adversely affected by such 
                catastrophic national disaster, in any case in which 
                the payments are owed to a person other than the 
                Administration.
                    ``(C) Termination of authority.--The authority to 
                defer, or make, payments under this paragraph for a 
                catastrophic national disaster shall terminate 1 year 
                after the date on which such catastrophic national 
                disaster was declared.
            ``(3) Definitions.--In this subsection, the following 
        definitions shall apply:
                    ``(A) Catastrophic national disaster.--The term 
                `catastrophic national disaster' means a catastrophic 
                national disaster declared under section 7(b)(4) of the 
                Small Business Act.
                    ``(B) Qualified borrower.--The term `qualified 
                borrower' means a small business concern located 
                anywhere in the United States that has been directly 
                adversely affected by a catastrophic national disaster, 
                based on such criteria as the Administrator may set by 
                rule, regulation, or order.''.
            (2) Separate treatment.--Only for purposes of the Federal 
        Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), debentures 
        guaranteed under section 503(j) of the Small Business 
        Investment Act of 1958, as added by this subsection, shall be 
        treated as a separate program of the Small Business 
        Administration.
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as may be necessary to carry out 
        section 503(j) of the Small Business Investment Act of 1958, as 
        added by this subsection.

SEC. 12. REMOVING BARRIERS TO BONDING FOR SMALL BUSINESSES.

    (a) Requisitions.--Notwithstanding any other provision of law, for 
any procurement related to a declared disaster 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 located in a disaster area 
        providing guarantees related to contracts for disaster relief, 
        recovery, or reconstruction related to the aftermath of a 
        declared disaster 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 2-year period beginning on 
        the date on which the declared disaster was declared.
            (2) Preferred program.--For any contract for relief, 
        recovery, or reconstruction related to the aftermath of a 
        declared disaster, 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 submit a report to the Committee on Small 
        Business and Entrepreneurship of the Senate and the Committee 
        on Small Business of the House of Representatives on the 
        availability of bonds to small business concerns performing 
        contracts for disaster relief, recovery, or reconstruction 
        related to the aftermath of a declared disaster.
    (c) Small Business Bonding Threshold.--Notwithstanding any other 
provision of law, for all procurements related to a declared disaster, 
the Administrator may, upon such terms and conditions as it may 
prescribe, guarantee and enter into commitments to guarantee any surety 
against loss resulting from a breach of the terms of a bid bond, 
payment bond, performance bond, or bonds ancillary thereto, by a 
principal on any total work order or contract amount at the time of 
bond execution that does not exceed $5,000,000, except that the 
Administrator may increase such amount to $10,000,000, at the 
discretion of the Administrator.

SEC. 13. USE OF LOCAL FIRMS AND INDIVIDUALS.

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

``SEC. 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 or any other provision of 
law.''.
    (b) 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).''.

SEC. 14. 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) Disasters.--The Administrator shall waive the maximum 
        amount of $100,000 for a grant under subparagraph (C)(viii) to 
        a small business development center to provide assistance to 
        small business concerns adversely affected by a major disaster 
        (as defined in section 102 of the Robert T. Stafford Disaster 
        Relief and Emergency Assistance Act (42 U.S.C. 5122)) or a 
        catastrophic national disaster declared under section 
        7(b)(4).''.

SEC. 15. WAIVER OF GEOGRAPHIC RESTRICTIONS ON SBDC COUNSELORS.

    Section 21(b) of the Small Business Act (15 U.S.C. 648(b)) is 
amended by adding at the end the following:
    ``(4) Waiver of Geographic Restrictions on SBDC Counselors.--
            ``(A) In general.--The Administrator 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 declared a major disaster (as defined in 
        section 102 of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (42 U.S.C. 5122)), during the period 
        of such declaration.
            ``(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.
            ``(C) Access to disaster recovery facilities.--For purposes 
        of providing recovery assistance under this paragraph, the 
        Administrator shall permit small business development center 
        personnel to use any site or facility designated by the 
        Administration for use for such purpose.''.

SEC. 16. CONGRESSIONAL OVERSIGHT.

    (a) 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 of the Administration 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.
    (b) Daily Disaster Updates to Congress for Presidentially Declared 
Disasters.--
            (1) In general.--Each day during a disaster update period, 
        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 of the Administration 
        for the area in which the President declared a major disaster 
        or a catastrophic national disaster, as the case may be.
            (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.
    (c) Report on Need for Supplemental Funds.--Not later than 3 months 
before the date on which the Administrator estimates funding will no 
longer be available for the disaster loan program of the Administration 
in any fiscal year, the Administrator shall submit a report to the 
Committee on Small Business and Entrepreneurship of the Senate and to 
the Committee on Small Business of the House of Representatives 
regarding the need for supplemental funds for such loan program, 
including the amount needed to sustain such loan program at current 
funding rates through the end of the fiscal year in which the 
Administrator submits such report.
    (d) Report on Contracting.--
            (1) In general.--Not later than 6 months after the date on 
        which a declared disaster is declared, and every 6 months 
        thereafter until the date that is 18 months after the date on 
        which the declared disaster was declared, the Administrator 
        shall submit a report to the Committee on Small Business and 
        Entrepreneurship of the Senate and to the Committee on Small 
        Business of the House of Representatives regarding Federal 
        contracts awarded as a result of the declared disaster.
            (2) Contents .--Each report submitted under paragraph (1) 
        shall include--
                    (A) the total number of contracts awarded as a 
                result of the declared disaster;
                    (B) the total number of contracts awarded to small 
                business concerns as a result of the declared disaster;
                    (C) the total number of contracts awarded to women 
                and minority-owned businesses as a result of the 
                declared disaster; and
                    (D) the total number of contracts awarded to local 
                businesses as a result of the declared disaster.

SEC. 17. GRANT ASSISTANCE FOR MILITARY RESERVISTS' SMALL BUSINESS 
              CONCERNS.

    (a) Authorization of Grants.--Section 7(b)(3)(B) of the Small 
Business Act (15 U.S.C. 636(b)(3)(B)) is amended by inserting ``or 
grants'' after ``or deferred basis)''.
    (b) Grant Specifications.--Section 7(b)(3) of the Small Business 
Act (15 U.S.C. 636(b)(3)) is amended by inserting after subparagraph 
(F) the following:
                    ``(G) Grants made under subparagraph (B)--
                            ``(i) may be awarded in addition to any 
                        loan made under subparagraph (B);
                            ``(ii) shall not exceed $25,000; and
                            ``(iii) shall be made only to a small 
                        business concern--
                                    ``(I) that provides a business plan 
                                demonstrating viability for not less 
                                than 3 future years;
                                    ``(II) with 10 or fewer employees;
                                    ``(III) that has not received 
                                another grant under subparagraph (B) in 
                                the previous 2 years.''.
    (c) Authorization of Appropriations.--Section 20(e)(2) of the Small 
Business Act (15 U.S.C. 631 note) is amended by inserting after 
subparagraph (B) the following:
                    ``(C) Grant assistance for military reservists' 
                small businesses.--There are authorized to be 
                appropriated for grants under section 7(b)(3)(B)--
                            ``(i) $5,000,000 for the first fiscal year 
                        beginning after the date of enactment of this 
                        subparagraph; and
                            ``(ii) $5,000,000 for each of the 2 fiscal 
                        years following the fiscal year described in 
                        clause (i).''.

SEC. 18. ENERGY EMERGENCY RELIEF.

    (a) Small Business and Farm Energy Emergency Disaster Loan 
Program.--
            (1) Small business disaster loan authority.--Section 7(b) 
        of the Small Business Act (15 U.S.C. 636(b)) is amended by 
        inserting immediately after paragraph (10), as added by this 
        Act, the following:
            ``(11) Energy emergency relief.--
                    ``(A) Definitions.--For purposes of this 
                paragraph--
                            ``(i) the term `base price index' means the 
                        moving average of the closing unit price on the 
                        New York Mercantile Exchange for heating oil, 
                        natural gas, gasoline, or propane for the 10 
                        days, in each of the most recent 2 preceding 
                        years, which correspond to the trading days 
                        described in clause (ii);
                            ``(ii) the term `current price index' means 
                        the moving average of the closing unit price on 
                        the New York Mercantile Exchange, for the 10 
                        most recent trading days, for contracts to 
                        purchase heating oil, natural gas, gasoline, or 
                        propane during the subsequent calendar month, 
                        commonly known as the `front month'; and
                            ``(iii) the term `significant increase' 
                        means--
                                    ``(I) with respect to the price of 
                                heating oil, natural gas, gasoline, or 
                                propane, any time the current price 
                                index exceeds the base price index by 
                                not less than 40 percent; and
                                    ``(II) with respect to the price of 
                                kerosene, any increase which the 
                                Administrator, in consultation with the 
                                Secretary of Energy, determines to be 
                                significant.
                    ``(B) Loan authority.--
                            ``(i) In general.--The Administrator may 
                        make such 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 described in clause 
                        (ii).
                            ``(ii) Criteria.--A small business concern 
                        described in this clause is a small business 
                        concern that--
                                    ``(I) has suffered or that is 
                                likely to suffer substantial economic 
                                injury on or after August 24, 2005, as 
                                the result of a significant increase in 
                                the price of heating oil, natural gas, 
                                gasoline, propane, or kerosene 
                                occurring on or after August 24, 2005; 
                                and
                                    ``(II) if engaged in the heating 
                                oil business, sells not more than 
                                10,000,000 gallons of heating oil per 
                                year.
                    ``(C) Applicable interest rate.--Any loan or 
                guarantee extended pursuant to this paragraph shall be 
                made at the same interest rate as economic injury loans 
                under paragraph (2).
                    ``(D) Loan limitation.--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 borrower constitutes a major source of 
                employment in its surrounding area, as determined by 
                the Administrator, in which case the Administrator, in 
                its discretion, may waive the $1,500,000 limitation.
                    ``(E) Loan criteria.--For purposes of assistance 
                under this paragraph--
                            ``(i) a declaration of a disaster area 
                        based on conditions specified in this paragraph 
                        shall be required, and shall be made by the 
                        President or the Administrator; or
                            ``(ii) if no declaration has been made 
                        pursuant to clause (i), the Governor of a State 
                        in which a significant increase in the price of 
                        heating oil, natural gas, gasoline, propane, or 
                        kerosene has occurred may certify to the 
                        Administration that small business concerns 
                        have suffered economic injury as a result of 
                        such increase and are in need of financial 
                        assistance which is not otherwise available on 
                        reasonable terms in that State, and upon 
                        receipt of such certification, the 
                        Administrator may make such loans as would have 
                        been available under this paragraph if a 
                        disaster declaration had been issued.
                    ``(F) Permissible uses.--Notwithstanding any other 
                provision of law, loans made under this paragraph may 
                be used by a small business concern described in 
                subparagraph (B) to convert from the use of heating 
                oil, natural gas, gasoline, propane, or kerosene to a 
                renewable or alternative energy source, including 
                agriculture and urban waste, geothermal energy, 
                cogeneration, solar energy, wind energy, or fuel 
                cells.''.
            (2) Conforming amendments.--Section 3(k) of the Small 
        Business Act (15 U.S.C. 632(k)) is amended--
                    (A) by inserting ``, significant increase in the 
                price of heating oil, natural gas, gasoline, propane, 
                or kerosene'' after ``civil disorders''; and
                    (B) by inserting ``other'' before ``economic''.
            (3) Report.--Not later than 12 months after the date on 
        which the Administrator issues guidelines under subsection 
        (c)(1), and annually thereafter, until the date that is 12 
        months after the end of the effective period of section 
        7(b)(11) of the Small Business Act, as added by this 
        subsection, 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 on the effectiveness of the assistance made available 
        under that section 7(b)(11), including--
                    (A) the number of small business concerns that 
                applied for a loan under that section 7(b)(11) and the 
                number of those that received such loans;
                    (B) the dollar value of those loans;
                    (C) the States in which the small business concerns 
                that received such loans are located;
                    (D) the type of energy that caused the significant 
                increase in the cost for the participating small 
                business concerns; and
                    (E) recommendations for ways to improve the 
                assistance provided under that section 7(b)(11), if 
                any.
            (4) Effective date.--The amendments made by this subsection 
        shall apply during the 4-year period beginning on the earlier 
        of the date on which guidelines are published by the 
        Administrator under subsection (c)(1), or 30 days after the 
        date of enactment of this Act, with respect to assistance under 
        section 7(b)(11) of the Small Business Act, as added by this 
        subsection.
    (b) Farm Energy Emergency Relief.--
            (1) In general.--Section 321(a) of the Consolidated Farm 
        and Rural Development Act (7 U.S.C. 1961(a)) is amended--
                    (A) in the first sentence--
                            (i) by striking ``operations have'' and 
                        inserting ``operations (i) have''; and
                            (ii) by inserting before ``: Provided,'' 
                        the following: ``, or (ii)(I) are owned or 
                        operated by such an applicant that is also a 
                        small business concern (as defined in section 3 
                        of the Small Business Act (15 U.S.C. 632)), and 
                        (II) have suffered or are likely to suffer 
                        substantial economic injury on or after August 
                        24, 2005, as the result of a significant 
                        increase in energy costs or input costs from 
                        energy sources occurring on or after August 24, 
                        2005, in connection with an energy emergency 
                        declared by the President or the Secretary'';
                    (B) in the third sentence, by inserting before the 
                period at the end the following: ``or by an energy 
                emergency declared by the President or the Secretary''; 
                and
                    (C) in the fourth sentence--
                            (i) by inserting ``or energy emergency'' 
                        after ``natural disaster'' each place that term 
                        appears; and
                            (ii) by inserting ``or declaration'' after 
                        ``emergency designation''.
            (2) Funding.--Funds available on the date of enactment of 
        this Act for emergency loans under subtitle C of the 
        Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et 
        seq.) shall be available to carry out the amendments made by 
        paragraph (1) to meet the needs resulting from energy 
        emergencies.
            (3) Report.--Not later than 12 months after the date on 
        which the Secretary of Agriculture issues guidelines under 
        subsection (c)(1), and annually thereafter until the date that 
        is 12 months after the end of the effective period of the 
        amendments made to section 321(a) of the Consolidated Farm and 
        Rural Development Act (7 U.S.C. 1961(a)) by this subsection, 
        the Secretary shall submit to the Committee on Small Business 
        and Entrepreneurship and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate and to the Committee on 
        Small Business and the Committee on Agriculture of the House of 
        Representatives, a report that--
                    (A) describes the effectiveness of the assistance 
                made available under that section 321(a) ; and
                    (B) contains recommendations for ways to improve 
                the assistance provided under that section 321(a).
            (4) Effective date.--The amendments made by this subsection 
        shall apply during the 4-year period beginning on the earlier 
        of the date on which guidelines are published by the Secretary 
        of Agriculture under subsection (c)(1), or 30 days after the 
        date of enactment of this Act, with respect to assistance under 
        section 321(a) of the Consolidated Farm and Rural Development 
        Act (7 U.S.C. 1961(a)), as amended by this subsection.
    (c) Guidelines and Rulemaking.--
            (1) Guidelines.--Not later than 30 days after the date of 
        enactment of this Act, the Administrator and the Secretary of 
        Agriculture shall each issue guidelines to carry out 
        subsections (a) and (b), respectively, and the amendments made 
        thereby, which guidelines shall become effective on the date of 
        their issuance.
            (2) Rulemaking.--Not later than 30 days after the date of 
        enactment of this Act, the Administrator, after consultation 
        with the Secretary of Energy, shall promulgate regulations 
        specifying the method for determining a significant increase in 
        the price of kerosene under section 7(b)(11)(A)(iii)(II) of the 
        Small Business Act, as added by this Act.
                                 <all>