[Congressional Record Volume 147, Number 156 (Tuesday, November 13, 2001)]
[Senate]
[Page S11717]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 THE AMERICAN SMALL BUSINESS EMERGENCY RELIEF AND RECOVERY ACT OF 2001

  Mr. KERRY. Madam President, I want to submit for the Record a 
managers' substitute amendment to S. 1499, the American Small Business 
Emergency Relief and Recovery Act of 2001, which incorporates a number 
of improvements to the emergency relief provided by the bill as 
introduced. Senator Bond and I have been trying to bring this up before 
the full Senate, but, for almost one month since October 15, two 
senators have been blocking its consideration and passage.
  The Kerry-Bond bill is a fiscally responsible and measured response 
to help small businesses that are struggling because they were affected 
by the attacks on September 11 or because they can't get loans or 
venture capital from traditional private-sector lenders and investors 
who are pessimistic about the economy. This legislation makes loan 
capital and business counseling available to the small businesses in 
all of our States, and it does so by tailoring many of the Small 
Business Administration's, SBA, programs.
  Let me draw your attention to changes included in the managers' 
substitute amendment:
  One. For businesses located in a declared disaster area or at an 
airport, or for small businesses that were closed or suspended for 
related national security reasons by Federal mandate, they may use the 
disaster loan proceeds to refinance any existing business debt within 
the bill's loan caps. For one year after approval of such refinancing, 
principal payments on such refinancings will be deferred and the small 
business will be required to make interest only payments. Full payments 
will resume at the end of that year.
  Two. For emergency relief loans under section 7(a) of the Small 
Business Act, the guaranteed percentage was reduced from 95 percent to 
90 percent in response to the Administration's concerns that the 
government's risk was too high at 95 percent.
  Three. The size standard applicable for travel agencies with respect 
to disaster loans and emergency 7(a) loans under the managers' 
amendment is increased from $1 million to $2 million in average annual 
receipts.
  Four. The SBA Administrator's authority to waive or increase size 
standards and size regulations is applied to both disaster loans and 
emergency 7(a) guaranteed loans.
  Five. In order to encourage lenders to make the emergency and regular 
7(a) loans to small businesses adversely affected by the effects of the 
terrorist attacks of September 11, 200l, the managers' amendment 
reduces the on-going lenders' fee from one-half of 1 percent to one-
quarter of 1 percent.
  Six. The requirement of non-Federal match is waived for the Women's 
Business Centers program with respect to individualized assistance 
authorized under this Act.
  Seven. It requires the SBA to report to the pertinent House and 
Senate Committees periodically on its implementation of this 
legislation.
  Eight. The managers' amendment increases the authorization levels for 
the 7(a) and 504 programs by $2 billion each, and for the Small 
Business Investment Company participating securities and debentures 
programs by $700 million and $200 million, respectively, to accommodate 
increased demand anticipated in the wake of the terrorist attacks of 
September 11, 2001.
  Nine. In the loan term provisions for emergency 7(a) loans, a cap of 
$3 million was added for the ``gross amount of the loans.'' This 
clarifies that the other stated caps apply to the SBA-guaranteed 
portions of the loans.
  Ten. To make clear that Congress expects the SBA to implement these 
emergency relief provisions as quickly as possible, a section was added 
requiring SBA to issue interim final rules and implementing guidelines 
within 20 days of the date of enactment of this legislation.
  Eleven. Under the 7(a) stimulus loans, the managers' amendment 
reduces by half the upfront guarantee fee paid by the borrower, and it 
establishes a guarantee percentage of 85 percent on all such loans.
  Twelve. Under 504 stimulus loans, the managers' amendment reduces by 
half the annual guarantee fee paid by the borrower, currently .41 
percent, and retains the upfront bank fee of 50 basis points, .50 
percent.
  These are important changes that Senator Bond and I have worked out 
to make a good bill better. I am very pleased that the Chairman of the 
House Committee on Small Business, Congressman Don Manzullo, and 
Congressman Jim Moran introduced a bill identical to our managers' 
amendment on November 6 and appreciate their cooperation throughout 
this process.

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