[Congressional Record Volume 152, Number 92 (Friday, July 14, 2006)]
[Senate]
[Pages S7556-S7560]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU (for herself, Mr. Kerry, Mr. Bayh, and Mr. 
        Pryor):
  S. 3664. A bill to amend the Small Business Act to improve assistance 
after a major disaster, to authorize emergency bridge loans, bridge 
loan guarantees, and recovery grants, and for other purposes; to the 
Committee on Small Business and Entrepreneurship.
  Ms. LANDRIEU. Mr. President, as we all know, there was a tremendous 
amount of criticism of the Federal Government's response to Hurricanes 
Katrina and Rita last year. Things are better now and the region is 
slowly recovering. But we are in the second month of another hurricane 
season and we must be sure that if we have another disaster, the 
Federal Government's response will be better this time around. Disaster 
response agencies have to be better organized, more efficient, and more 
responsive in order to avoid the problems, the delays, mismanagement, 
and the seeming incompetence that occurred last year.
  Today, I am introducing legislation to improve the disaster response 
of one agency that had a great deal of problems last year, the Small 
Business Administration, SBA. While it did improve during the course of 
the months after the storm, it became clear to me that SBA needs 
additional tools for future disasters. SBA approached Katrina and the 
massive floods after the storm, using the same tools that it uses for 
much smaller, much less damaging disasters. I do not blame all of the 
people who work at this agency for the problems we saw in the gulf. 
They found themselves in a system that was insufficient to address this 
disaster.
  My legislation, the Small Business Disaster Recovery Assistance 
Improvements Act of 2006, offers new tools to

[[Page S7557]]

enhance SBA's disaster assistance programs. In every disaster, the SBA 
Disaster Loan program is a lifeline for businesses and homeowners who 
want to rebuild their lives after a catastrophe. When Katrina hit, our 
businesses and homeowners had to wait months for loan approvals. I do 
not know how many businesses we lost because help did not come in time. 
Because of the scale of this disaster, what these businesses needed was 
immediate, short-term bridge loans to hold them over until SBA was 
ready to process the tens of thousands of loan applications it 
received.
  That is why this legislation provides the SBA Administrator with the 
ability to make emergency bridge loans of up to $150,000 to affected 
small businesses in a declared disaster area. These bridge loans will 
allow businesses to make payroll, begin making repairs, and address 
other immediate needs while they are awaiting insurance payouts or 
regular SBA disaster loans. However, I realize that every disaster is 
different and could range from a disaster on the scale of Hurricane 
Katrina or 9/11, to an ice storm or drought. My legislation gives the 
SBA additional options and flexibility in the kinds of relief they can 
offer a community. When a tornado destroys 20 businesses in a small 
town in the Midwest, SBA can get the regular disaster program up and 
running fairly quickly. You may not need bridge loans in this instance. 
But if you know that SBA's resources would be overwhelmed by a storm--
just as they were initially with Katrina--bridge loans would be very 
helpful.
  My legislation also would expedite disaster loans for those 
businesses in a disaster area that have a good, solid track record with 
the SBA or can provide vital recovery efforts. We had many businesses 
in the gulf coast that had paid off previous SBA loans, were major 
sources of employment in their communities, but had to wait months 
for decisions on their disaster loan applications. I do not want to get 
rid of the SBA's current practice of reviewing applications on a first-
come-first-served basis, but there should be some mechanism in place 
for major disasters to get expedited loans out the door to specific 
businesses that has a positive record with SBA or those that could 
serve a vital role in the recovery efforts. Expedited loans would jump-
start impacted economies, get vital capital out to businesses, and 
retain essential jobs following future disasters.

  We had a lot of small business owners in the gulf coast who did not 
qualify for SBA disaster loans, or may not have had enough insurance to 
cover their losses. These people usually have to expend their personal 
finances or seek out small grants from non-profits to keep going. My 
legislation authorizes a small business disaster grant program to 
provide small grants of up to $25,000 to businesses that are not able 
to get access to get other assistance. These grants will only go to 
business owners that certify their intent to reopen in the disaster 
area and pursue technical assistance to continue their operations.
  Following Katrina, it is clear that disaster loan amounts need to be 
updated to reflect current business needs and the average cost of 
housing today. The bill raises the cap on SBA disaster loans for 
businesses from $1.5 million to $2.25 million; the cap on SBA personal 
property loans from $40,000 to $50,000; and the cap on real property 
homeowner loans from $200,000 to $250,000.
  This bill also makes an important modification to the collateral 
requirements for disaster loans. The SBA cannot disburse more than 
$10,000 for an approved loan without showing collateral. This is to 
limit the loss to the SBA in the event that a loan defaults. However, 
this disbursement amount has not been increased since 1998 and these 
days, $10,000 is not enough to get a business up and running.
  I was surprised to learn that the SBA did not have a full-time 
disaster planner on board before Katrina, nor did it have a 
comprehensive disaster response plan in place. While SBA is not a 
first-responder disaster agency like FEMA, they do hit the ground 
within days of a disaster strike. As the only Federal nonagricultural 
disaster lender, SBA should have an analytical, proactive plan in place 
to respond to disasters.
  I pushed to get language in the recent hurricane supplemental 
appropriations bill to require SBA to develop a disaster plan and 
report to Congress on its contents by July 15, 2006. I look forward to 
this report. But writing a plan and making it work are two different 
things. SBA needs a full-time staff in place to ensure that this plan 
is implemented properly. My legislation directs the SBA to hire a full-
time disaster planner to maintain this disaster response plan and to 
assist the SBA with its overall disaster preparedness, including 
coordination with other disaster response agencies like FEMA.
  As we reflect next month on the 1-year anniversary of the worst 
natural disaster to hit our nation, now is the time for action--not 
words or empty promises. I want to be able to go back to my 
constituents and reassure them that if, God forbid, another natural 
disaster should hit my state or another part of the country, that the 
Small Business Administration is better prepared and more responsive to 
the needs of those impacted.
  The Small Business Disaster Recovery Assistance Improvements Act will 
provide essential tools to make the SBA more proactive, flexible, and 
most important, more efficient during future disasters. In the coming 
weeks, I look forward to working with both Chairwoman Snowe and Ranking 
Member Kerry on the Senate Small Business Committee to ensure that the 
SBA has everything it needs to meet these goals.
  Mr. President, I am pleased to be joined on this legislation by the 
ranking member of the Small Business Committee, Senator Kerry, as well 
as my colleagues from the Small Business Committee, Senators Pryor and 
Bayh. We urge our other colleagues to support this important 
legislation.
  I thank the Chair and ask unanimous consent that a copy of the bill 
be printed in the Record, along with the accompanying materials.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3664

       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 
     Recovery Assistance 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) businesses affected by a natural disaster require, 
     within the first 60 days following the disaster, immediate 
     access to capital and technical assistance to fully recover 
     and prosper;
       (4) in the aftermath of Hurricanes Katrina and Rita of 
     2005, due to initial Administration response issues, as well 
     as extensive destruction in the region and wide distribution 
     of affected business owners around the country--
       (A) Administration loan approvals took longer than 3 
     months, on average, for homeowner disaster loans, and longer 
     than 2 months, on average, for business disaster loans; and
       (B) closings on disaster loans added an additional month to 
     the process;
       (5) the Administration requires new tools and authority to 
     be more effective in responding to major disasters and to be 
     responsive to the needs of affected small business concerns 
     and homeowners;
       (6) for major disasters, State-administered bridge loan 
     programs can serve as an effective means of providing 
     immediate capital, to allow businesses to make repairs, make 
     payroll, and continue operations, as demonstrated by the fact 
     that--
       (A) following the 2004 hurricanes in Florida, the Florida 
     State Bridge Loan Program was a successful program in 
     providing immediate capital to struggling businesses, 
     providing 1,679 small business concerns with $35,400,000 in 
     bridge loans;
       (B) following the 2005 impacts of Hurricanes Katrina and 
     Rita on the Louisiana Gulf Coast, the Louisiana Bridge Loan 
     Program was a successful program in providing immediate 
     capital to struggling businesses, providing 407 small 
     business concerns with $9,750,000 in bridge loans;
       (C) following the 2005 impact of Hurricane Katrina on the 
     Mississippi Gulf Coast, the Mississippi Bridge Loan Program 
     was a successful program in providing immediate capital to 
     struggling businesses, providing 464 small business concerns 
     with $11,233,850 in bridge loans; and
       (D) following the 2005 impact of Hurricane Wilma on the 
     Florida Gulf Coast, the Florida State Bridge Loan Program was 
     a successful program in providing immediate capital to 
     struggling businesses, providing 593 small business concerns 
     with $12,900,000 in bridge loans;

[[Page S7558]]

       (7) in the aftermath of Hurricane Katrina of 2005 and 
     Hurricane Rita of 2005, small business development centers 
     had difficulties entering and utilizing disaster recovery 
     centers of the Administration, resulting in delays of 
     technical assistance service to affected businesses; and
       (8) there is a need for greater cooperation between the 
     Federal Government and State governments on bridge loans 
     programs to respond to major disasters.

     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 ``approved State Bridge Loan Program'' means a 
     State Bridge Loan Program approved under section 5(b);
       (3) the term ``major disaster'' has the meaning given the 
     term in section 102 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5122);
       (4) the term ``small business concern'' has the meaning 
     given the term in section 3 of the Small Business Act; and
       (5) the term ``State'' means any State of the United 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Northern Mariana Islands, the Virgin Islands, Guam, 
     American Samoa, and any territory or possession of the United 
     States.

     SEC. 4. EMERGENCY BRIDGE LOANS AND GRANTS AFTER MAJOR 
                   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) Emergency bridge loans and business recovery grants 
     after major disasters.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `disaster area' means an area for which a 
     major disaster was declared, during the period of such 
     declaration; and
       ``(ii) the term `major disaster' has the meaning given the 
     term in section 102 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5122).
       ``(B) Bridge loans.--
       ``(i) Definition.--In this subparagraph, the term 
     `qualified small business concern' means a small business 
     concern--

       ``(I) located in a disaster area; and
       ``(II) that is directly adversely affected by the major 
     disaster for which such disaster area was declared.

       ``(ii) Loan authority.--The Administrator shall make such 
     loans under this subparagraph (either directly (including 
     through a district office of the Administration located in a 
     disaster area) 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 qualified small business concern, to provide 
     assistance until such small business concern is able to 
     obtain funding through insurance claims, other Federal 
     assistance programs, or other sources, based on such criteria 
     as the Administrator may set by rule, regulation, or order.
       ``(iii) Loan terms.--

       ``(I) Prepayment.--A loan under this subparagraph may have 
     no prepayment penalty.
       ``(II) Interest.--For not more than 6 months after the date 
     on which a loan is made under this subparagraph, the interest 
     rate on such a loan may be the same as for a loan under 
     paragraph (2).
       ``(III) Transfer.--A loan under this subparagraph may 
     include as a term that such loan may be transferred to a 
     local bank or other financial institution in a disaster area.
       ``(IV) Technical assistance.--The borrower for a loan under 
     this subparagraph shall certify the intent of such borrower 
     to participate in technical assistance consultation (either 
     with a local small business development center or other 
     technical assistance group approved by the Administrator) 
     before the borrower may utilize funds received under the 
     loan.

       ``(iv) Use of funds.--A loan under this subparagraph may be 
     used for--

       ``(I) paying salaries, bills, and other existing financial 
     obligations;
       ``(II) making minor repairs;
       ``(III) purchasing inventory; or
       ``(IV) paying other costs.

       ``(v) Maximum amount.--Notwithstanding any other provision 
     of law, the Administrator may make a loan under this 
     subparagraph of not more than $150,000 to a qualified small 
     business concern.
       ``(vi) Deferred payment.--

       ``(I) In general.--The Administrator, or a bank or other 
     lending institution, may defer payments of principal and 
     interest on a loan under this subparagraph for not more than 
     180 days after the date on which the loan is made.
       ``(II) Capitalization of interest.--If payments are 
     deferred under subclause (I), any interest accrued during the 
     period for which such payments are deferred shall be 
     capitalized.

       ``(vii) Notice to borrowers.--In making any loan under this 
     subparagraph--

       ``(I) the borrower shall be made aware that such loans are 
     for those directly adversely affected by the major disaster; 
     and
       ``(II) if such loans are made in cooperation with a bank or 
     other lending institution, the lender shall document for the 
     Administrator how the borrower was directly adversely 
     affected by the major disaster.

       ``(viii) Reports.--

       ``(I) Inspector general.--For any major disaster, not later 
     than 6 months after the date on which such disaster is 
     declared, and every 6 months thereafter until the date that 
     is 18 months after the date on which such disaster is 
     declared, the Inspector General of the Administration 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 regarding loans 
     described in clause (vii)(II), including verification that 
     the program is being administered appropriately and that such 
     loans are being used for purposes authorized by this 
     subparagraph.
       ``(II) GAO.--Not later than 12 months after the date on 
     which a final report for a major disaster is submitted by the 
     Inspector General under subclause (I), the Comptroller 
     General of the United States shall conduct a review of the 
     loan program authorized under this subparagraph and 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 containing the 
     findings of the review and any recommendations.

       ``(C) Business recovery grants.--
       ``(i) Definition.--In this subparagraph, the term `eligible 
     small business concern' means a small business concern--

       ``(I) directly adversely affected by a major disaster;
       ``(II) that has been declined for other assistance under 
     this subsection and from private lending institutions and 
     State-provided bridge loans;
       ``(III) that certifies that it intends--

       ``(aa) to reopen in the disaster area for which the major 
     disaster described in subclause (I) was declared; and
       ``(bb) to participate in technical assistance consultation 
     (either with a local small business development center or 
     other technical assistance group approved by the 
     Administrator).
       ``(ii) Authorization.--The Administrator shall make such 
     grants under this subparagraph as the Administrator 
     determines appropriate to an eligible small business concern, 
     to assist such small business concern in recovery from a 
     major disaster.
       ``(iii) Maximum amount.--The Administrator may make a grant 
     in an amount not more than $25,000 under this subparagraph.
       ``(iv) Documentation of technical assistance.--An eligible 
     small business concern receiving a grant under this 
     subparagraph shall submit to the Administrator documentation 
     indicating that such small business concern received 
     technical assistance support through a small business 
     development center or other technical assistance provider 
     determined appropriate by the Administrator.
       ``(D) Authorization of appropriations.--There are 
     authorized to be appropriated to the Administration such sums 
     as are necessary to carry out this paragraph.''.

     SEC. 5. STATE BRIDGE LOAN GUARANTEE.

       (a) Authorization.--After issuing guidelines under 
     subsection (c), the Administrator may guarantee loans made 
     under an approved State Bridge Loan Program.
       (b) Approval.--
       (1) Application.--A State desiring approval of a State 
     Bridge Loan Program shall submit an application to the 
     Administrator at such time, in such manner, and accompanied 
     by such information as the Administrator may require.
       (2) Criteria.--The Administrator may approve an application 
     submitted under paragraph (1) based on such criteria as the 
     Administrator may establish under this section.
       (c) Guidelines.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Administrator shall issue to the 
     appropriate economic development officials in each State, the 
     Committee on Small Business and Entrepreneurship of the 
     Senate, and the Committee on Small Business of the House of 
     Representatives, guidelines regarding approved State Bridge 
     Loan Programs.
       (2) Contents.--The guidelines issued under paragraph (1) 
     shall--
       (A) identify appropriate uses of funds under an approved 
     State Bridge loan Program;
       (B) set terms and conditions for loans under an approved 
     State Bridge loan Program;
       (C) address whether--
       (i) an approved State Bridge Loan Program may charge 
     administrative fees; and
       (ii) loans under an approved State Bridge Loan Program 
     shall be disbursed through local banks and other financial 
     institutions; and
       (D) establish the percentage of a loan the Administrator 
     will guarantee under an approved State Bridge Loan Program.

     SEC. 6. AUTHORITY TO MAKE EXPEDITED 7(A) DISASTER LOANS TO 
                   SMALL BUSINESS CONCERNS.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended by adding at the end the following:
       ``(32) Expedited loans.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `disaster area' means an area for which a 
     major disaster was declared, during the period of such 
     declaration;
       ``(ii) the term `major disaster' has the meaning given the 
     term in section 102 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5122); and
       ``(iii) the term `essential small business concern in good 
     standing' means a small

[[Page S7559]]

     business concern that the Administrator, in consultation with 
     appropriate officials in district offices of the 
     Administration determines has the ability to repay the 
     subject loan, and--

       ``(I) is in good standing and has a history of compliance 
     with the terms of a program of the Administration (including 
     having repaid, or being in the process of repaying, a loan 
     under a program of the Administration, as required under the 
     terms of such loan); or
       ``(II) has a bona fide reason for receiving an expedited 
     loan under this paragraph (including being a major source of 
     employment in a disaster area or essential to economic 
     recovery of the area, such as by supplying building 
     materials, housing, or debris removal services).

       ``(B) Loan authorization.--Notwithstanding any other 
     provision of law, the Administrator may make a loan under 
     this subsection to an essential small business concern in 
     good standing under expedited procedures, including expedited 
     loss verification, loan processing, and approval.
       ``(C) Authorization of appropriations.--There are 
     authorized to be appropriated to the Administrator, such sums 
     as are necessary to carry out this paragraph.''.

     SEC. 7. MAXIMUM LOAN AMOUNTS.

       (a) In General.--Section 7(a)(3)(A) of the Small Business 
     Act is amended by striking ``$1,500,000 (or if the gross loan 
     amount would exceed $2,000,000'' and inserting ``$2,250,000 
     (or if the gross loan amount would exceed $3,000,000''.
       (b) Disaster Loans.--Section 7(c)(6) of the Small Business 
     Act (15 U.S.C. 636(c)(6)) is amended--
       (1) by striking ``$500,000'' each place such term appears 
     and inserting ``$2,250,000'';
       (2) by striking ``$100,000'' and inserting ``$250,000''; 
     and
       (3) by striking ``$20,000'' and inserting ``$50,000''.
       (c) Conforming Amendment.--Chapter I of the Emergency 
     Supplemental Appropriations for Relief From the Major, 
     Widespread Flooding in the Midwest Act of 1993 (Public Law 
     103-75; 107 Stat. 740) is amended by striking ``: Provided 
     further, That notwithstanding any other provision of law, the 
     $500,000 limitation on the amounts outstanding and committed 
     to a borrower provided in paragraph 7(c)(6) of the Small 
     Business Act shall be increased to $1,500,000 for disasters 
     commencing on or after April 1, 1993''.

     SEC. 8. INCREASING COLLATERAL REQUIREMENTS.

       Section 7(c)(6) of the Small Business Act (15 U.S.C. 
     636(c)(6)) is amended by striking ``$10,000'' and inserting 
     ``$20,000''.

     SEC. 9. CATASTROPHIC REGIONAL OR NATIONAL DISASTERS.

       Section 7(b)(2) of the Small Business Act (15 U.S.C. 
     636(b)(2)) is amended--
       (1) by redesignating subparagraphs (A), (B), (C), and (D) 
     as clauses (i), (ii), (iii), and (v), respectively;
       (2) by striking ``(2) to make such loans'' and inserting 
     ``(2)(A) to make such loans'';
       (3) in subparagraph (A), as so designated by this section--
       (A) by striking ``or'' at the end of each of clauses (i), 
     (ii), and (iii), as so redesignated by paragraph (1) of this 
     section;
       (B) by inserting after clause (iii), as so redesignated by 
     paragraph (1) of this section, the following:
       ``(iv) a catastrophic regional or national disaster, as 
     declared by the Secretary of Homeland Security, that is an 
     actual or potential high-impact event that requires a 
     coordinated and effective response by an appropriate 
     combination of Federal, State, local, tribal, 
     nongovernmental, or private-sector entities in order to save 
     lives and minimize damage and provide the basis for long-term 
     community recovery and mitigation activities; or''; and
       (C) in clause (v), as so redesignated by paragraph (1) of 
     this section, by striking ``subparagraph (A), (B), or (C)'' 
     and inserting ``clause (i), (ii), (iii), or (iv)''; and
       (4) by adding at the end the following:
       ``(B) Notwithstanding subsection (c)(6), in the case of a 
     catastrophic regional or national disaster declared under 
     subparagraph (A)(iv) of this paragraph, the Administrator may 
     increase the maximum amount that may be outstanding and 
     committed to borrower under this paragraph to $10,000,000.''.

     SEC. 10. FULL-TIME DISASTER PLANNING STAFF.

       (a) Increase in Small Business Administration Full-Time 
     Disaster Planning Staff.--The Administrator shall hire a 
     full-time disaster planning specialist in the Office of 
     Disaster Assistance of the Administration.
       (b) Responsibilities.--The disaster planning specialist 
     hired under subsection (a) shall be responsible for--
       (1) creating and maintaining the comprehensive disaster 
     response plan of the Administration;
       (2) ensuring in-service and pre-service training procedures 
     for the disaster response staff of the Administration;
       (3) coordinating Administration training exercises, 
     including mock disaster responses, with other Federal 
     agencies; and
       (4) other responsibilities, as determined by the 
     Administrator.
       (c) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the Administration such sums as are necessary to carry out 
     this section.
       (2) Availability of funds.--Amounts made available under 
     this section shall remain available until expended.

     SEC. 11. ADDITIONAL AUTHORITY FOR DISTRICT OFFICES OF THE 
                   ADMINISTRATION.

       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) Use of district offices.--In the event of a 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 may authorize a 
     district office of the Administration to process loans under 
     paragraph (1) or (2).''.

     SEC. 12. ECONOMIC INJURY DISASTER LOANS TO NONPROFITS.

       (a) In General.--Section 7(b)(2)(A) of the Small Business 
     Act, as redesignated by this Act, is amended--
       (1) in the matter preceding clause (i)--
       (A) by inserting after ``small business concern'' the 
     following: ``, private nonprofit organization,''; and
       (B) by inserting after ``the concern'' the following: ``, 
     organization,''; and
       (2) in clause (v), by inserting after ``small business 
     concerns'' the following: ``, private nonprofit 
     organizations,''.
       (b) Conforming Amendment.--Section 7(c) of the Small 
     Business Act (15 U.S.C. 636(c)) is amended in paragraph 
     (5)(C), by inserting ``, organization,'' after ``business''.

     SEC. 13. SMALL BUSINESS DEVELOPMENT CENTER PORTABILITY 
                   GRANTS.

       Section 21(a)(4) of the Small Business Act (15 U.S.C. 
     648(a)(4), as amended by this Act, is amended by adding at 
     the end the following:
       ``(E) Waiver of maximum amount.--In the event of a 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 may waive the 
     maximum amount of $100,000 for grants under subparagraph 
     (C)(viii), and such grants shall be made available for small 
     business development centers assisting small business 
     concerns adversely affected by such major disaster.''.

     SEC. 14. DISASTER LOAN PROGRAM MONTHLY ACCOUNTING REPORT.

       (a) Definition.--In this section, the term ``applicable 
     period'' means the period beginning on the date on which the 
     President declares a major disaster and ending on the date 
     that is 30 days after the later of the closing date for 
     applications for physical disaster loans for such disaster 
     and the closing date for applications for economic injury 
     disaster loans for such disaster.
       (b) Report to Congress.--Not later than the 5th business 
     day of each month during the applicable period for a major 
     disaster, the Administrator shall provide to the Committee on 
     Small Business and Entrepreneurship and the Committee on 
     Appropriations of the Senate and to the Committee on Small 
     Business and the Committee on Appropriations of the House of 
     Representatives a report on the operation of the disaster 
     loan program authorized under section 7 of the Small Business 
     Act (15 U.S.C. 636) for such disaster during the preceding 
     month.
       (c) Content of Reports.--Each report under subsection (b) 
     shall include--
       (1) 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 
     subsection (b);
       (2) 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 
     subsection (b);
       (3) 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 subsection (b);
       (4) 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;
       (5) an estimate of how long the available funding for such 
     loans will last, based on the spending rate;
       (6) 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 subsection (b);
       (7) the amount of funding spent over the month for 
     administrative costs, and the percent by which such spending 
     has increased or decreased since the previous report under 
     subsection (b);
       (8) the amount of funding available for salaries and 
     expenses combined, and the percent by which such funding has 
     increased or decreased, noting the source of any additional 
     funding; and
       (9) an estimate of how long the available funding for 
     salaries and expenses will last, based on the spending rate.

     SEC. 15. DISASTER LOANS AFTER MAJOR DISASTERS.

       Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) 
     is amended by inserting immediately after paragraph (5), as 
     added by this Act, the following:
       ``(6) Authority for lenders to process disaster loans.--The 
     Administrator may enter into an agreement with a qualified 
     lender, as determined by the Administrator, to process loans 
     under this section, under which the Administrator shall pay 
     the lender a fee for each loan processed.

[[Page S7560]]

       ``(7) Authority for the administrator to contract with 
     lenders for loan loss verification services.--The 
     Administrator may enter into an agreement with a qualified 
     lender or loss verification professional, as determined by 
     the Administrator, to verify losses for loans under this 
     section, under which the Administrator shall pay the lender 
     or verification professional a fee for each loan for which 
     such lender or verification professional verifies losses.''.

     SEC. 16. 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.''.

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Small Business Disaster Recovery Assistance Improvements Act of 2006

       Bridge Loans and Grants: For future major disasters, the 
     bill provides the SBA Administrator the authority to make up 
     to $150,000 in emergency bridge loans or $25,000 in emergency 
     grants to affected small businesses in a declared disaster 
     area. The bridge loans and grants would allow businesses to 
     make payroll, begin making repairs, and address other 
     immediate needs while they are awaiting insurance payouts or 
     SBA disaster loans. As part of receiving these bridge loans 
     or grants, affected businesses would be required to seek 
     technical assistance.
       State Bridge Loan Guarantee: This bill requires that the 
     SBA Administrator issue guidelines on an SBA-approved State 
     bridge loan program for future disasters. Once the guidelines 
     are issued, states may then submit their bridge loan programs 
     for approval to receive SBA guarantee assistance on bridge 
     loans in the event of a disaster. The program rewards states 
     that are prepared well-before future disasters strike and 
     could be in place before the end of the current Hurricane 
     season.
       Expedited 7(a) Disaster Loans: Many affected businesses in 
     the Gulf Coast had repaid previous SBA loans yet despite 
     being in good standing with the SBA, were required to wait 
     months for disaster loan decisions. Other affected businesses 
     were major sources of employment in their areas or could 
     provide substantive assistance to recovery efforts but were 
     also made to wait months for SBA loans. This bill provides 
     expedited SBA disaster loans to businesses that are in good 
     standing with the SBA or those who can provide unique 
     assistance to recovery efforts. These expedited loans would 
     jump-start impacted economies, get vital capital to 
     businesses, and retain essential jobs following future 
     disasters.
       Increased Caps on Disaster Loans: The bill would raise the 
     cap on business Disaster Loans from $1.5 million to $2.25 
     million. It would also raise the cap on Personal Property 
     homeowner disaster loans from $40,000 to $50,000 and the cap 
     on Real Property homeowner disaster loans from $200,000 to 
     $250,000.
       Lender Assistance for Loss Verification/Loan Processing: 
     The bill gives the Administrator permanent authority to enter 
     into agreements with local banks and other lenders to help 
     address the SBA loss verification and loan processing backlog 
     for future disasters.
       Increased Collateral Requirements: Currently, the SBA 
     cannot disburse more than $10,000 on an approved loan before 
     requiring additional collateral. This is to limit the loss to 
     the SBA in the event that a loan defaults, but is an added 
     protection for the SBA because before loans are approved; the 
     SBA reviews the borrower's ability to repay the loan in 
     question. To help loan disbursement for future disasters, the 
     bill would increase this collateral requirement to $20,000 to 
     borrowers who have been approved for SBA disaster loans.
       Increased Disaster Loan Caps for Catastrophic Regional or 
     National Disaster: The bill provides that, for a disaster 
     designated by the Secretary of Homeland Security as a 
     catastrophic regional or national disaster, that SBA 
     Administrator may increase the maximum Disaster Loan amount 
     to $10 million.
       Additional Authority for SBA District Offices: Following 
     Hurricanes Katrina and Rita, the SBA struggled to handle 
     increased loan volume created by the disasters. Months after 
     Katrina first hit, the SBA authorized District Offices to 
     process disaster loans, which greatly reduced the existing 
     loan backlog in the span of a month. For major future 
     disasters, the bill authorizes the Administrator to allow 
     District Offices to process all business disaster loans.
       Small Business Development Center Assistance: The bill 
     addresses many problems experienced by Gulf Coast Small 
     Business Development Centers (SBDCs) following Hurricanes 
     Katrina and Rita. First, these SBDCs had to apply for 
     multiple portability grants and then had to wait months for 
     this funding. This bill allows the Administrator to waive the 
     $100,000 cap on SBDC portability grants following a disaster 
     which would allow SBA to quickly provide more funds to SBDCs, 
     rather than requiring them to apply for multiple portability 
     grants. The bill also allows other SBDCs to provide 
     assistance in declared disaster areas by allowing them to 
     travel beyond their traditional geographic boundaries. 
     Lastly, since many Gulf Coast SBDCs had trouble accessing 
     Federal Disaster Recovery Centers to provide business 
     counseling, which caused extended delays in business 
     counseling services, the bill directs the SBA Administrator 
     to permit SBDC staff into these recovery centers for future 
     disasters.
       Improved SBA Accountability: The bill directs the SBA, for 
     future major disasters, to provide a monthly report to 
     Congress on the disaster loan program (loan volume, loan 
     averages, funding available, etc.) to prevent the SBA 
     Disaster Loan program from running out of money.
       Loans to Non-Profits: Allows SBA to make loans to non-
     profits that are located or operating in a disaster area.
       Full-Time Disaster Planning Staff: The SBA had neither a 
     comprehensive disaster response plan nor full-time planning 
     staff in place for Hurricane Katrina. As a result, the SBA's 
     disaster response was plagued by mismanagement, delays, and a 
     lack of flexibility which left borrowers waiting between two 
     to four months for initial loss inspections and four to eight 
     months for decisions on their loan applications. As part of 
     the recent Hurricane Supplemental Appropriations bill, SBA 
     was tasked with drafting up a comprehensive disaster response 
     plan but they still do not have a full-time planner on board 
     to ensure that this plan is implemented or that it is updated 
     following future disasters. This bill directs the SBA to hire 
     a full-time disaster planner to maintain this disaster 
     response plan and to assist with SBA disaster preparedness 
     for future disasters.
                                 ______