[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S11991-S11992]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SANTORUM:

  S. 2177. A bill to authorize the Small Business Administration to 
provide financial and business development assistance to military 
reservists' small businesses, and for other purposes; to the Committee 
on Small Business.


           THE MILITARY RESERVISTS SMALL BUSINESS RELIEF ACT

 Mr. SANTORUM. Mr. President, I ask unanimous consent that the 
text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2177

       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 ``Military Reservists Small 
     Business Relief Act''.

     SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RESERVISTS.

       Section 7 of the Small Business Act (15 U.S.C. 636) is 
     amended by adding at the end the following new subsection:
       ``(n) Repayment Deferred for Active Duty Reservists.--
       ``(1) In general.--The Administration shall, upon written 
     request, defer repayment of a direct loan made pursuant to 
     subsection (a) or (b), if such loan was incurred by a 
     qualified borrower.
       ``(2) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Qualified borrower.--The term `qualified borrower' 
     means--
       ``(i) an individual who is an eligible Reserve and who 
     received a direct loan under subsection (a) or (b) before 
     being called or ordered to, or retained on, active duty as 
     described in subparagraph (B); or
       ``(ii) a small business concern that received a direct loan 
     under subsection (a) or (b) before an eligible Reserve, who 
     is an owner, manager, or key employee described in 
     subparagraph (C), was called or ordered to, or retained on, 
     active duty as described in subparagraph (B).
       ``(B) Eligible reserve.--The term `eligible Reserve' means 
     a member of a reserve component of the Armed Forces serving 
     pursuant to a call or order to active duty, or retention on 
     active duty, during a period of military conflict.
       ``(C) Owner, manager, or key employee.--An eligible Reserve 
     is an owner, manager, or key employee described in this 
     subparagraph if the eligible Reserve is an individual who--
       ``(i) has not less than a 20 percent ownership interest in 
     the small business concern described in subparagraph (A)(ii);
       ``(ii) is a manager responsible for the day-to-day 
     operations of such small business concern; or
       ``(iii) is a key employee (as defined by the 
     Administration) of such small business concern.
       ``(D) Period of military conflict.--The term `period of 
     military conflict' means--
       ``(i) a period of war declared by the Congress;
       ``(ii) a period of national emergency declared by the 
     Congress or by the President; or
       ``(iii) a period for which members of reserve components of 
     the Armed Forces are serving on active duty in the Armed 
     Forces under a call or order to active duty, or retention on 
     active duty, under section 688, 12301(a), 12302, 12304, or 
     12306 of title 10, United States Code.
       ``(3) Period of deferral.--The period of deferral for 
     repayment under this subsection shall begin on the date on 
     which the eligible Reserve is ordered to active duty during 
     any period of military conflict and shall terminate on the 
     later of--
       ``(A) 180 days after the date on which such eligible 
     Reserve is discharged or released from that active duty; and
       ``(B) 180 days after the date of enactment of this 
     subsection.''.
       ``(4) No accrual of interest during deferral.--During the 
     period of deferral described in paragraph (3), repayment of 
     principal and interest on the deferred loan shall not be 
     required and no interest shall accrue on such loan.''.

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

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting after the undesignated 
     paragraph that begins ``Provided, That no loan'', the 
     following new paragraph:
       ``(3)(A) The Administration may make such disaster loans 
     (either directly or in cooperation with banks or other 
     lending institutions through agreements to participate on an 
     immediate or deferred basis) to assist a small business 
     concern (including a small business concern engaged in the 
     lease or rental of real or personal property) that has 
     suffered or is likely to suffer economic injury as the result 
     of the owner, manager, or key employee of such small business 
     concern being ordered to active duty during a period of 
     military conflict.
       ``(B) Any loan or guarantee under this paragraph shall be 
     made at an annual interest rate of not more than 4 percent, 
     without regard to the ability of the small business concern 
     to secure credit elsewhere.
       ``(C) No loan shall 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 $500,000, except that the Administration may waive the 
     $500,000 limitation if the Administration determines that the 
     applicant constitutes a major source of employment in an area 
     not larger than a county that is suffering a disaster.
       ``(D) For purposes of assistance under this paragraph, no 
     declaration of a disaster area shall be required.
       ``(E) For purposes of this paragraph--
       ``(i) the term `period of military conflict' means--
       ``(I) a period of war declared by the Congress;
       ``(II) a period of national emergency declared by the 
     Congress or by the President; or
       ``(III) a period for which members of reserve components of 
     the Armed Forces are serving on active duty in the Armed 
     Forces under a call or order to active duty, or retention on 
     active duty, under section 688, 12301(a), 12302, 12304, or 
     12306 of title 10, United States Code;
       ``(ii) the term `economic injury' includes the inability of 
     a small business concern to

[[Page S11992]]

     market or produce a product or to provide a service 
     ordinarily provided by the small business concern; and
       ``(iii) the term `owner, manager, or key employee' means an 
     individual who--
       ``(I) has not less than a 20 percent ownership in the small 
     business concern;
       ``(II) is a manager responsible for the day-to-day 
     operations of such small business concern; or
       ``(III) is a key employee (as defined by the 
     Administration) of such small business concern.''.
       (b) Conforming Amendments.--Section 4(c) of the Small 
     Business Act (15 U.S.C. 633(c)) is amended--
       (1) in paragraph (1), by striking ``7(b)(4),''; and
       (2) in paragraph (2), by striking ``7(b)(4), 7(b)(5), 
     7(b)(6), 7(b)(7), 7(b)(8),''.

     SEC. 4. REGULATIONS.

       Not later than 30 days after the date of enactment of this 
     Act, the Small Business Administration may issue such 
     regulations as may be necessary to carry out the amendments 
     made by sections 2 and 3.

     SEC. 5. APPLICABILITY AND EFFECTIVE DATES.

       (a) Applicability.--This Act and the amendments made by 
     this Act shall not apply to any member of a reserve component 
     of the Armed Forces serving pursuant to a call or order to 
     active duty, or retention on active duty, during a period of 
     military conflict, who is eligible to participate in the 
     Ready Reserve Mobilization Income Insurance Program 
     established under section 512 of the National Defense 
     Authorization Act for Fiscal Year 1996.
       (b) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this Act shall take effect on the date of 
     enactment of this Act.
       (2) Exceptions.--
       (A) Loan repayment deferral.--The amendment made by section 
     2 shall apply with respect to any eligible Reserve called or 
     ordered to, or retained on, active duty as the result of a 
     period of military conflict occurring on or after August 1, 
     1990.
       (B) Disaster loans.--The amendments made by section 3 shall 
     apply to economic injury suffered or likely to be suffered as 
     the result of a period of military conflict occurring on or 
     after August 1, 1990.
       (c) Definitions.--For purposes of this section--
       (1) the term ``economic injury'' has the same meaning as in 
     section 7(b)(3)(E) of the Small Business Act, as added by 
     section 3 of this Act;
       (2) the term ``eligible Reserve'' has the same meaning as 
     in section 7(n)(2) of the Small Business Act, as added by 
     section 2 of this Act; and
       (3) the term ``period of military conflict'' has the same 
     meaning as in section 7(n)(2) of the Small Business Act, as 
     added by section 2 of this Act.
                                 ______