[Congressional Record Volume 151, Number 9 (Wednesday, February 2, 2005)]
[Senate]
[Pages S902-S904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Mr. Reed, Mr. Dodd, Mr. Bingaman, Mr. 
        Kohl, Mr. Jeffords, Ms. Cantwell, Mr. Johnson, Mr. Pryor, Mr. 
        Leahy, Mr. Levin, Mr. Schumer, Mr. Lieberman, Mrs. Clinton, Mr. 
        Harkin, Mr. Kennedy, Mr. Bayh, and Mr. Obama):
  S. 269. A bill to provide emergency relief to small business concerns 
affected by a significant increase in the price of heating oil, natural 
gas, propane, or kerosene, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
  Mr. KERRY. Mr. President, tonight the President will deliver his 
fifth State of the Union address. It is expected that he will, in that 
address, talk about his plan to expand the ownership of businesses, as 
he did in his Inaugural Address. As a long-time member of the Senate 
Committee on Small Business & Entrepreneurship, I hope that the 
administration will also tend to the needs of small businesses that 
already exist, in particular those struggling to make ends meet with 
the record high cost of heating fuels. It could be done very easily by 
making those small businesses eligible to apply for low-cost disaster 
loans through the Small Business Administration's Economic Injury 
Disaster Loan Program. And by making small farms and agricultural 
businesses eligible for loans through a similar loan program at the 
Department of Agriculture.
  There has been a bipartisan push for this assistance in Congress 
twice in the past few years, most recently in November during the 
consideration of the mega funding bill, the FY2005 Omnibus 
Appropriations Conference Report. It makes no sense that out of 3,000 
pages of legislation and almost $400 billion in spending, the White 
House and the Republican leadership, opposing members in their own 
party, refused to help the little guy. While it would have been most 
helpful to these businesses--from small heating oil dealers to small 
manufacturers--to enact the legislation in November when the prices 
were at an all-time high, we can still be helpful now.
  In that spirit, together with Senator Reed and 17 of my colleagues, I 
am re-introducing the Small Business and Farm Energy Emergency Relief 
Act. I thank Senators Reed, Dodd, Bingaman, Kohl, Jeffords, Cantwell, 
Johnson, Pryor, Leahy, Levin, Schumer, Lieberman, Clinton, Harkin, 
Kennedy, Bayh and Obama. In the past, this assistance has been 
supported by many Republicans, and I hope they will again cosponsor the 
legislation. I have reached out to them in hopes that they will once 
again work in a bipartisan way to help our small businesses. I know the 
heating oil issue is important to Senator Snowe, my colleague and 
chairman of the Committee on Small Business & Entrepreneurship, and I 
look forward to working with her. I am hopeful that she will cosponsor 
this bill and agree to take action on it in Committee as soon as 
possible.
  We have built a very clear record over the years on how this 
legislation would work and why it is needed. Let me take a few minutes 
to summarize those conclusions. The Small Business and Farm Energy 
Emergency Relief Act of 2005 would provide emergency relief, through 
affordable, low-interest SBA and USDA Disaster loans, to small 
businesses adversely affected by, or likely to be adversely affected 
by, significant increases in the prices of four heating fuels--heating 
oil, propane, kerosene, and natural gas. This would be helpful, because 
for those businesses in danger of or already suffering from significant 
economic injury caused by crippling increases in the costs of heating 
fuel, they need access to capital to mitigate or avoid serious losses. 
However, commercial lenders typically won't make loans to these small 
businesses because they often don't have the increased cash flow to 
demonstrate the ability to repay the loan.
  Economic injury disaster loans give affected small businesses 
necessary working capital until normal operations resume, or until they 
can restructure or change the business to address the market changes. 
These are direct loans, made through the SBA, with interest rates of 4 
percent or less. The SBA tailors the repayment of each economic injury 
disaster loan to each borrower's financial capability, enabling them to 
avoid the robbing Peter to pay Paul syndrome, as they juggle bills.
  In practical terms, SBA considers economic injury to be when a small 
business is unable, or likely to be unable, to meet its obligations as 
they mature or to pay its ordinary and necessary operating expenses. To 
be eligible to apply for an economic injury loan,
  you must be a small business that has been the victim of some kind of 
disaster,
  you must have used all reasonably available funds,
  and you must be unable to obtain credit elsewhere.
  Under this program, the disaster must be declared by the President, 
the SBA Administrator, or a governor at the discretion of the 
Administrator. Small businesses will have nine months to apply from 
October 1, 2004 or, for future disasters, from the day a disaster is 
declared.
  This bill differs from the legislation we put forward in 2001 in that 
it uses a different trigger to define a disaster. For this legislation, 
Senator Reed worked closely with the Department of Energy to identify 
what would be considered extreme price jumps in the heating fuels of 
heating oil, natural gas, and propane. Therefore, the assistance under 
this bill would become available when the price jumps 40 percent, when 
compared to the same period for the two previous years, when absorbing 
the cost becomes nearly impossible.
  Mr. President, I again ask that my colleagues get behind this bill 
and make it law as soon as possible. I ask unanimous consent that a 
copy of a bipartisan letter of support, a copy of the cosponsors from 
the 107th Congress, and a copy of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                November 16, 2004.
     Hon. Ted Stevens,
     Chairman, Committee on Appropriations, U.S. Senate, 
         Washington, DC.
     Hon. Judd Gregg,
     Chairman, Appropriations Subcommittee on Commerce, Justice, 
         State, and the Judiciary, U.S. Senate, Washington, DC.
     Hon. Robert C. Byrd,
     Ranking Member, Committee on Appropriations, U.S. Senate, 
         Washington, DC.
     Hon. Fritz F. Hollings,
     Ranking Member, Appropriations Subcommittee on Commerce, 
         Justice, State, and the Judiciary, U.S. Senate, 
         Washington, DC.
       Dear Senators Stevens, Byrd, Gregg and Hollings: We are 
     writing to request you include a provision in the fiscal year 
     2005 Omnibus Appropriations Conference Report to make heating 
     oil distributors and other small businesses harmed by 
     substantial increases in energy prices eligible for Small 
     Business Administration (SBA) disaster loans. Many small 
     businesses are being adversely affected by the substantial 
     increases in the prices of heating oil, propane, kerosene and 
     natural gas. The recent volatile and substantial increases in 
     the cost of these fuels is placing a tremendous burden on the 
     financial resources of small businesses, which typically have 
     small cash flows and narrow operating margins.
       Heating oil and propane distributors, in particular, are 
     being impacted. Heating oil and propane distributors purchase 
     oil through wholesalers. Typically, the distributor has 10 
     days to pay for the oil. The money is pulled directly from a 
     line of credit either at a bank or with the wholesaler. Given 
     the high cost of heating oil, distributors' purchasing power 
     is much lower this year compared to previous years. In 
     addition, the distributors often do not receive payments from 
     customers until 30 days or more after delivery; therefore, 
     their financial resources for purchasing oil for customers 
     and running their business are limited. Heating oil and 
     propane dealers need to borrow money on a short-term basis to 
     maintain economic viability. Commercial lenders

[[Page S903]]

     typically will not make loans to these small businesses 
     because they usually do not have the increased cash flows to 
     demonstrate the ability to repay the loan. Without sufficient 
     credit, these small businesses will struggle to purchase the 
     heating fuels they need to supply residential customers, 
     businesses and public facilities, such as schools. These 
     loans would provide affected small businesses with the 
     working capital needed until normal operations resume or 
     until they can restructure to address the market changes.
       SBA's disaster loans are appropriate sources of funding to 
     address this problem. The hurricanes that caused significant 
     damage to the Gulf Coast along with the current instability 
     in Iraq, Nigeria and Russia caused a surge in the price of 
     oil and important refined products, especially heating fuels. 
     The conditions restricting these small businesses' access to 
     capital are beyond their control and SBA loans can fill this 
     gap when the private sector does not meet the credit needs of 
     small businesses.
       A similar provision passed the Small Business Committee and 
     Senate with broad bipartisan support during the 10th Congress 
     when these small businesses faced a substantial increase in 
     energy prices. In addition, there is precedence for this 
     proposal, as a similar provision was enacted in the 104th 
     Congress to help commercial fisheries failures.
       Thank you for your consideration. Please find enclosed 
     suggested draft language for the proposal. If your staff has 
     questions about the proposal or the impacts of the current 
     energy price increases on small businesses, please ask them 
     to contact Kris Sarri at 224-0606.
           Sincerely,
       Jack Reed,
       John F. Kerry,
       Arlen Specter,
       Christopher J. Dodd,
       Edward M. Kennedy,
       James M. Jeffords,
       Evan Bayh,
       Susan M. Collins,
       Jeff Bingaman,
       Patrick J. Leahy,
       Lincoln D. Chafee,
       Frank Lautenberg,
       Joseph I. Lieberman,
       Charles E. Schumer,
       Paul S. Sarbanes,
       Hillary Rodham Clinton,
       Barbara A. Mikulski.
                                  ____


             Bill Summary and Status for the 107th Congress

       Title: A bill to provide emergency relief to small 
     businesses affected by significant increases in the prices of 
     heating oil, natural gas, propane, and kerosene, and for 
     other purposes.
       Sponsor: Sen Kerry, John F. [D-MA] (introduced 2/8/2001); 
     Cosponsors: 34.
       Committees: Senate Small Business and Entrepreneurship; 
     House Small Business; House Agriculture.
       Senate Reports: 107-4.
       Latest Major Action: 5/1712001--Referred to House 
     subcommittee. Status: Referred to the Subcommittee on 
     Conservation, Credit, Rural Development and Research.


                        COSPONSORS, ALPHABETICAL

     Sen Akaka, Daniel K. [D-HI]
     Sen Bayh, Evan [D-IN]
     Sen Bond, Christopher S. [R-MO]
     Sen Chafee, Lincoln D. [R-RI]
     Sen Clinton, Hillary Rodham [D-NY]
     Sen Corzine, Jon [D-NJ]
     Sen Dodd, Christopher J. [D-CT]
     Sen Edwards, John [D-NC]
     Sen Harkin, Tom [D-IA]
     Sen Jeffords, James M. [R-VT]
     Sen Kennedy, Edward M. [D-MA]
     Sen Landrieu, Mary [D-LA]
     Sen Levin, Carl [D-MI]
     Sen Murray, Patty [D-WA]
     Sen Schumer, Charles E. [D-NY]
     Sen Snowe, Olympia J. [R-ME]
     Sen Torricelli, Robert G. [D-NJ]
     Sen Baucus, Max [D-MT]
     Sen Bingaman, Jeff [D-NM]
     Sen Cantwell, Maria [D-WA]
     Sen Cleland, Max [D-GA]
     Sen Collins, Susan M. [R-ME]
     Sen Daschle, Thomas A. [D-SD]
     Sen Domenici, Pete V. [R-NM]
     Sen Enzi, Michael B. [R-WY]
     Sen Inouye, Daniel K. [D-HI]
     Sen Johnson, Tim [D-SD]
     Sen Kohl, Herb [D-WI]
     Sen Leahy, Patrick J. [D-VT]
     Sen Lieberman, Joseph I. [D-CT]
     Sen Reed, John F. [D-RI]
     Sen Smith, Bob [R-NH]
     Sen Specter, Arlen [R-PA]
     Sen Wellstone, Paul D. [D-MN]

                                 S. 269

       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 and Farm 
     Energy Emergency Relief Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) a significant number of small businesses in the United 
     States, non-farm as well as agricultural producers, use 
     heating oil, natural gas, propane, or kerosene to heat their 
     facilities and for other purposes;
       (2) a significant number of small business concerns in the 
     United States sell, distribute, market, or otherwise engage 
     in commerce directly related to heating oil, natural gas, 
     propane, and kerosene; and
       (3) significant increases in the price of heating oil, 
     natural gas, propane, or kerosene--
       (A) disproportionately harm small businesses dependent on 
     those fuels or that use, sell, or distribute those fuels in 
     the ordinary course of their business, and can cause them 
     substantial economic injury;
       (B) can negatively affect the national economy and regional 
     economies;
       (C) have occurred in the winters of 1983-1984, 1988-1989, 
     1996-1997, 1999-2000, 2000-2001, and 2004-2005; and
       (D) can be caused by a host of factors, including 
     international conflicts, global or regional supply 
     difficulties, weather conditions, insufficient inventories, 
     refinery capacity, transportation, and competitive structures 
     in the markets, causes that are often unforeseeable to, and 
     beyond the control of, those who own and operate small 
     businesses.

     SEC. 3. SMALL BUSINESS ENERGY EMERGENCY DISASTER LOAN 
                   PROGRAM.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting after paragraph (3) 
     the following:
       ``(4)(A) In 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, 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, or propane during the 
     subsequent calendar month, commonly known as the `front 
     month';
       ``(iii) the term `heating fuel' means heating oil, natural 
     gas, propane, or kerosene; and
       ``(iv) the term `significant increase' means--
       ``(I) with respect to the price of heating oil, natural 
     gas, 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) The Administration 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 that has suffered or that is likely to suffer 
     substantial economic injury as the result of a significant 
     increase in the price of heating fuel.
       ``(C) 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) 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 Administration, in which case the Administration, in 
     its discretion, may waive the $1,500,000 limitation.
       ``(E) 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 fuel 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 Administration may make such loans as 
     would have been available under this paragraph if a disaster 
     declaration had been issued.
       ``(F) 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 fuel to a renewable or alternative energy source, 
     including agriculture and urban waste, geothermal energy, 
     cogeneration, solar energy, wind energy, or fuel cells.''.
       (b) Conforming Amendments Relating to Heating Fuel.--
     Section 3(k) of the Small Business Act (15 U.S.C. 632(k)) is 
     amended--
       (1) by inserting ``, significant increase in the price of 
     heating fuel'' after ``civil disorders''; and
       (2) by inserting ``other'' before ``economic''.

     SEC. 4. AGRICULTURAL PRODUCER EMERGENCY LOANS.

       (a) In General.--Section 321(a) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 1961(a)) is amended--
       (1) in the first sentence--
       (A) by striking ``operations have'' and inserting 
     ``operations (i) have''; and
       (B) 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

[[Page S904]]

     (II) have suffered or are likely to suffer substantial 
     economic injury on or after October 1, 2004, as the result of 
     a significant increase in energy costs or input costs from 
     energy sources occurring on or after October 1, 2004, in 
     connection with an energy emergency declared by the President 
     or the Secretary'';
       (2) 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
       (3) in the fourth sentence--
       (A) by inserting ``or energy emergency'' after ``natural 
     disaster'' each place that term appears; and
       (B) by inserting ``or declaration'' after ``emergency 
     designation''.
       (b) 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 
     subsection (a) to meet the needs resulting from natural 
     disasters .

     SEC. 5. GUIDELINES AND RULEMAKING.

       (a) Guidelines.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration and the Secretary of Agriculture 
     shall each issue such guidelines as the Administrator or the 
     Secretary, as applicable, determines to be necessary to carry 
     out this Act and the amendments made by this Act.
       (b) Rulemaking.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration, 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)(4)(A)(iv)(II) of the 
     Small Business Act (15 U.S.C. 636(b)(4)(A)(iv)(II)).

     SEC. 6. REPORTS.

       (a) Small Business Administration.--Not later than 12 
     months after the date on which the Administrator of the Small 
     Business Administration issues guidelines under section 5, 
     and annually thereafter, 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 section 7(b)(4) of the Small 
     Business Act, as added by this Act, including--
       (1) the number of small business concerns that applied for 
     a loan under such section and the number of those that 
     received such loans;
       (2) the dollar value of those loans;
       (3) the States in which the small business concerns that 
     received such loans are located;
       (4) the type of heating fuel or energy that caused the 
     significant increase in the cost for the participating small 
     business concerns; and
       (5) recommendations for ways to improve the assistance 
     provided under such section 7(b)(4), if any.
       (b) Department of Agriculture.--Not later than 12 months 
     after the date on which the Secretary of Agriculture issues 
     guidelines under section 5, and annually thereafter, the 
     Secretary shall submit to the Committee on Small Business and 
     Agriculture, Nutrition, and Forestry of the Senate and the 
     Committee on Small Business and Agriculture of the House of 
     Representatives, a report that--
       (1) describes the effectiveness of the assistance made 
     available under section 7(b)(4) of the Small Business Act (15 
     U.S.C. 636(b)(4)); and
       (2) contains recommendations for ways to improve the 
     assistance provided under such section 7(b)(4), if any.

     SEC. 7. EFFECTIVE DATE.

       (a) Small Business.--The amendments made by this Act shall 
     apply during the 4-year period beginning on the date on which 
     guidelines are published by the Administrator of the Small 
     Business Administration under section 5, with respect to 
     assistance under section 7(b)(4) of the Small Business Act, 
     as added by this Act, to economic injury suffered or likely 
     to be suffered as the result of a significant increase in the 
     price of heating fuel occurring on or after October 1, 2004; 
     or
       (b) Agriculture.--The amendments made by section 4 shall 
     apply during the 4-year period beginning on the date on which 
     guidelines are published by the Secretary of Agriculture 
     under section 5.
                                 ______