II 110th CONGRESS 1st Session S. 599 IN THE SENATE OF THE UNITED STATES February 14, 2007 Ms. Snowe (for herself, Ms. Landrieu, and Mr. Vitter) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To improve the disaster loan program of the Small Business Administration, and for other purposes.

1.

Short title

This Act may be cited as the Private Disaster Loans Act of 2007.

2.

Private disaster loans

(a)

In general

Section 7 of the Small Business Act (15 U.S.C. 636) is amended— (1)by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and (2)by inserting after subsection (b) the following: (c)

Private disaster loans

(1)

Definitions

In this subsection— (A)the term disaster area means a county, parish, or similar unit of general local government in which a disaster was declared under subsection (b); (B)the term eligible small business concern means a business concern that is— (i)a small business concern, as defined in this Act; or (ii)a small business concern, as defined in section 103 of the Small Business Investment Act of 1958; and (C)the term qualified private lender means any privately-owned bank or other lending institution that the Administrator determines meets the criteria established under paragraph (9). (2)

Authorization

The Administrator may guarantee timely payment of principal and interest, as scheduled on any loan issued by a qualified private lender to an eligible small business concern located in a disaster area. (3)

Use of loans

A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b). (4)

Online applications

(A)

Establishment

The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection. (B)

Other Federal assistance

The Administrator may coordinate with the head of any other appropriate Federal agency so that any application submitted through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief. (C)

Consultation

In establishing an online application process under this paragraph, the Administrator shall consult with appropriate persons from the public and private sectors, including private lenders. (5)

Maximum amounts

(A)

Guarantee percentage

The Administrator may guarantee not more than 85 percent of a loan under this subsection. (B)

Loan amounts

The maximum amount of a loan guaranteed under this subsection shall be $2,000,000. (6)

Loan term

The longest term of a loan for a loan guaranteed under this subsection shall be— (A)15 years for any loan that is issued without collateral; and (B)25 years for any loan that is issued with collateral. (7)

Fees

(A)

In general

The Administrator may not collect a guarantee fee under this subsection. (B)

Origination fee

The Administrator may pay a qualified private lender an origination fee for a loan guaranteed under this subsection in an amount agreed upon in advance between the qualified private lender and the Administrator. (8)

Documentation

A qualified private lender may use its own loan documentation for a loan guaranteed by the Administrator, to the extent authorized by the Administrator. The ability of a lender to use its own loan documentation for a loan offered under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (9). (9)

Implementation regulations

(A)

In general

Not later than 1 year after the date of enactment of the Private Disaster Loans Act of 2007, the Administrator shall issue final regulations establishing permanent criteria for qualified private lenders. (B)

Report to Congress

Not later than 6 months after the date of enactment of the Private Disaster Loans Act of 2007, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives. (10)

Authorization of appropriations

(A)

In general

Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration under subsection (b). (B)

Authority to reduce interest rates

Funds appropriated to the Administration to carry out this subsection, may be used by the Administrator, to the extent available, to reduce the applicable rate of interest for a loan guaranteed under this subsection by not more than 3 percentage points. . (b)

Effective date

The amendments made by this section shall apply to disasters declared under section 7(b)(2) of the Small Business Act (631 U.S.C. 636(b)(2)) before, on, or after the date of enactment of this Act.

3.

Technical and conforming amendments

The Small Business Act (15 U.S.C. 631 et seq.) is amended— (1)in section 4(c)— (A)in paragraph (1), by striking 7(c)(2) and inserting 7(d)(2); and (B)in paragraph (2)— (i)by striking 7(c)(2) and inserting 7(d)(2); and (ii)by striking 7(e),; and (2)in section 7(b), in the undesignated matter following paragraph (3)— (A)by striking That the provisions of paragraph (1) of subsection (c) and inserting That the provisions of paragraph (1) of subsection (d); and (B)by striking Notwithstanding the provisions of any other law the interest rate on the Administration's share of any loan made under subsection (b) except as provided in subsection (c), and inserting Notwithstanding any other provision of law, and except as provided in subsection (d), the interest rate on the Administration's share of any loan made under subsection (b).