[Congressional Record Volume 152, Number 133 (Wednesday, December 6, 2006)]
[Senate]
[Pages S11335-S11343]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Kerry, Ms. Landrieu, and Mr. 
        Vitter):
  S. 4097. A bill to improve the disaster loan program of the Small 
Business Administration, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today with Senators Kerry, Landrieu 
and Vitter to introduce The Small Business Disaster Response and Loan 
Improvements Act of 2006, a bill that would provide a comprehensive; 
package of reforms to improve the Small Business Administration's, SBA, 
disaster loan program.
  As you know, the entire gulf coast of the United States was ravaged 
in 2005 by Hurricanes Katrina and Rita. These natural disasters, 
unprecedented in scope and economic impact, presented a prime 
opportunity for the SBA to showcase its programs and resources for 
small businesses. Unfortunately, SBA's response was subpar at best, 
leaving some disaster victims waiting three months or more for disaster 
loans to be processed.
  As chair of the Senate Committee on Small Business and 
Entrepreneurship, I remain committed to doing everything in my power to 
provide small businesses and homeowners with the tools they need to 
recover from disasters. The SBA is and must be at the forefront of 
disaster relief efforts. We must ensure that victims of future 
disasters have access to the resources they need to restore their 
lives, their businesses, and their dreams.
  Many of the provisions in this bid have already passed unanimously 
through the Small Business Committee this year as part of the Small 
Business Reauthorization and Improvements Act of 2006 S. 3778, 
bipartisan legislation I authored that features sweeping reforms to 
help the SBA lead with the same dedication to excellence found in the 
entrepreneurs it serves. The committee unanimously approved this 
legislation and reported it to the full Senate, where it awaits 
consideration.
  This bill before the Senate today includes essential provisions that 
would better assist victims applying for SBA disaster loans. Among 
other items, this legislation would increase the maximum size of an SBA 
disaster loan from $1.5 million per loan to $5 million per loan and 
would make it possible for non-profit institutions to be eligible for 
disaster loans.
  Recognizing the increased demand disasters place on all small 
business lending programs, the legislation establishes a private 
disaster loan PDL program that allows for PDLs to be made to disaster 
victims by private banks, which would have to apply to the SBA for 
eligibility. A business would be eligible for a PDL if the county in 
which the business is located was

[[Page S11336]]

declared a disaster area anytime in the last 24 months. The business 
would not have to show a nexus between its need for a loan, and the 
disaster that occurred. It would be enough to be located in that 
county. The SBA would provide an 85 percent guarantee for the loans.
  In addition, our legislation would provide authorization for the SBA 
to enter into agreements with qualified private contractors to process 
disaster loans. It also would require the SBA to provide Congress with 
a report on how the disaster loan application process can be improved, 
including methods to expedite loan processing and verification for 
sources vital to rebuilding efforts.
  This legislation would also require the SBA to promulgate rules 
within 6 months that would create a new ``expedited disaster assistance 
business loan program.'' These short-term loans would have low interest 
rates similar to regular disaster loans. The program is intended to 
respond to major disasters, but at the discretion of the SBA 
Administrator, it can be implemented in the event of any disaster.
  I firmly believe the product before us is the best package to aid 
families, businesses, and communities through challenging times 
following disasters. We must not forget their pain, their 
determination, and their resolute refusal to walk away from the 
communities and small businesses they cherish.
  When a disaster strikes, the spirit, determination, and will of 
America's small businesses help to create the firm economic foundation, 
propelling our nation's economic growth forward. Therefore, we in turn 
must create an atmosphere favorable for small businesses and provide 
this assistance package to the SBA. We must allow our Nation's small 
businesses to do what they do best--create jobs.
  I urge my colleagues to support this bill. Too much is at stake for 
small businesses, and the economy as a whole, to allow this critical 
legislation to languish. Clearly, if we strive for anything less, we 
fail to support the backbone of our economy, our hope for new 
innovation, and the entrepreneurs reach for the American dream.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 4097

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Disaster Response and Loan Improvements Act of 
     2006''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                    TITLE I--PRIVATE DISASTER LOANS

Sec. 101. Private disaster loans.
Sec. 102. Technical and conforming amendments.

              TITLE II--DISASTER RELIEF AND RECONSTRUCTION

Sec. 201. Definition of disaster area.
Sec. 202. Disaster loans to nonprofits.
Sec. 203. Disaster loan amounts.
Sec. 204. Small business development center portability grants.
Sec. 205. Assistance to out-of-State businesses.
Sec. 206. Outreach programs.
Sec. 207. Small business bonding threshold.
Sec. 208. Contracting priority for local small businesses.
Sec. 209. Termination of program.
Sec. 210. Increasing collateral requirements.

                      TITLE III--DISASTER RESPONSE

Sec. 301. Definitions.
Sec. 302. Business expedited disaster assistance loan program.
Sec. 303. Catastrophic national disasters.
Sec. 304. Public awareness of disaster declaration and application 
              periods.
Sec. 305. Consistency between Administration regulations and standard 
              operating procedures.
Sec. 306. Processing disaster loans.
Sec. 307. Development and implementation of major disaster response 
              plan.
Sec. 308. Congressional oversight.

                      TITLE IV--ENERGY EMERGENCIES

Sec. 401. Findings.
Sec. 402. Small business energy emergency disaster loan program.
Sec. 403. Agricultural producer emergency loans.
Sec. 404. Guidelines and rulemaking.
Sec. 405. Reports.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``small business concern'' has the same 
     meaning as in section 3 of the Small Business Act (15 U.S.C. 
     632); and
       (3) the term ``small business concern owned and controlled 
     by socially and economically disadvantaged individuals'' has 
     the same meaning as in section 8 of the Small Business Act 
     (15 U.S.C. 637).

                    TITLE I--PRIVATE DISASTER LOANS

     SEC. 101. 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 (a) or (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 $3,000,000.
       ``(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 Small Business Disaster Response and Loan 
     Improvements Act of 2006, 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 Small Business Disaster Response 
     and Loan Improvements Act of 2006, 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.

[[Page S11337]]

     SEC. 102. 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)''.

              TITLE II--DISASTER RELIEF AND RECONSTRUCTION

     SEC. 201. DEFINITION OF DISASTER AREA.

       In this title, the term ``disaster area'' means an area 
     affected by a natural or other disaster, as determined for 
     purposes of paragraph (1) or (2) of section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)), during the period of such 
     declaration.

     SEC. 202. DISASTER LOANS TO NONPROFITS.

       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) Loans to nonprofits.--In addition to any other loan 
     authorized by this subsection, the Administrator 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) as the Administrator 
     determines appropriate to a nonprofit organization located or 
     operating in an area affected by a natural or other disaster, 
     as determined under paragraph (1) or (2), or providing 
     services to persons who have evacuated from any such area.''.

     SEC. 203. DISASTER LOAN AMOUNTS.

       (a) Increased Loan Caps.--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 title, the 
     following:
       ``(5) Increased loan caps.--
       ``(A) Aggregate loan amounts.--Except as provided in clause 
     (ii), and notwithstanding any other provision of law, the 
     aggregate loan amount outstanding and committed to a borrower 
     under this subsection may not exceed $5,000,000.
       ``(B) Waiver authority.--The Administrator may, at the 
     discretion of the Administrator, waive the aggregate loan 
     amount established under clause (i).''.
       (b) Disaster Mitigation.--
       (1) In general.--Section 7(b)(1)(A) of the Small Business 
     Act (15 U.S.C. 636(b)(1)(A)) is amended by inserting ``of the 
     aggregate costs of such damage or destruction (whether or not 
     compensated for by insurance or otherwise)'' after ``20 per 
     centum''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to a loan or guarantee made after 
     the date of enactment of this Act.
       (c) Technical Amendments.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``the, Administration'' and inserting ``the Administration'';
       (2) in paragraph (2)(A), by striking ``Disaster Relief and 
     Emergency Assistance Act'' and inserting ``Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
     et seq.)''; and
       (3) in the undesignated matter at the end--
       (A) by striking ``, (2), and (4)'' and inserting ``and 
     (2)''; and
       (B) by striking ``, (2), or (4)'' and inserting ``(2)''.

     SEC. 204. SMALL BUSINESS DEVELOPMENT CENTER PORTABILITY 
                   GRANTS.

       Section 21(a)(4)(C)(viii) of the Small Business Act (15 
     U.S.C. 648(a)(4)(C)(viii)) is amended--
       (1) in the first sentence, by striking ``as a result of a 
     business or government facility down sizing or closing, which 
     has resulted in the loss of jobs or small business 
     instability'' and inserting ``due to events that have 
     resulted or will result in, business or government facility 
     downsizing or closing''; and
       (2) by adding at the end ``At the discretion of the 
     Administrator, the Administrator may make an award greater 
     than $100,000 to a recipient to accommodate extraordinary 
     occurrences having a catastrophic impact on the small 
     business concerns in a community.''.

     SEC. 205. ASSISTANCE TO OUT-OF-STATE BUSINESSES.

       Section 21(b)(3) of the Small Business Act (15 U.S.C. 
     648(b)(3)) is amended--
       (1) by striking ``At the discretion'' and inserting the 
     following: ``Small business development centers.--
       ``(A) In general.--At the discretion''; and
       (2) by adding at the end the following:
       ``(B) During disasters.--
       ``(i) In general.--At the discretion of the Administrator, 
     the Administrator may authorize a small business development 
     center to provide such assistance to small business concerns 
     located outside of the State, without regard to geographic 
     proximity, if the small business concerns are located in a 
     disaster area declared under section 7(b)(2)(A).
       ``(ii) Continuity of services.--A small business 
     development center that provides counselors to an area 
     described in clause (i) shall, to the maximum extent 
     practicable, ensure continuity of services in any State in 
     which such small business development center otherwise 
     provides services.
       ``(iii) Access to disaster recovery facilities.--For 
     purposes of providing disaster recovery assistance under this 
     subparagraph, the Administrator shall, to the maximum extent 
     practicable, permit small business development center 
     personnel to use any site or facility designated by the 
     Administrator for use to provide disaster recovery 
     assistance.''.

     SEC. 206. OUTREACH PROGRAMS.

       (a) In General.--Not later than 30 days after the date of 
     the declaration of a disaster area, the Administrator may 
     establish a contracting outreach and technical assistance 
     program for small business concerns which have had a primary 
     place of business in, or other significant presence in, such 
     disaster area.
       (b) Administrator Action.--The Administrator may fulfill 
     the requirement of subsection (a) by acting through--
       (1) the Administration;
       (2) the Federal agency small business officials designated 
     under section 15(k)(1) of the Small Business Act (15 U.S.C. 
     644(k)(1)); or
       (3) any Federal, State, or local government entity, higher 
     education institution, procurement technical assistance 
     center, or private nonprofit organization that the 
     Administrator may determine appropriate, upon conclusion of a 
     memorandum of understanding or assistance agreement, as 
     appropriate, with the Administrator.

     SEC. 207. SMALL BUSINESS BONDING THRESHOLD.

       (a) In General.--Except as provided in subsection (b), and 
     notwithstanding any other provision of law, for any 
     procurement related to 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, upon such terms and conditions as the 
     Administrator may prescribe, guarantee and enter into 
     commitments to guarantee any surety against loss resulting 
     from a breach of the terms of a bid bond, payment bond, 
     performance bond, or bonds ancillary thereto, by a principal 
     on any total work order or contract amount at the time of 
     bond execution that does not exceed $5,000,000.
       (b) Increase of Amount.--Upon request of the head of any 
     Federal agency other than the Administration involved in 
     reconstruction efforts in response to a major disaster, the 
     Administrator may guarantee and enter into a commitment to 
     guarantee any security against loss under subsection (a) on 
     any total work order or contract amount at the time of bond 
     execution that does not exceed $10,000,000.

     SEC. 208. CONTRACTING PRIORITY FOR LOCAL SMALL BUSINESSES.

       Section 15(d) of the Small Business Act (15 U.S.C. 644(d)) 
     is amended--
       (1) by striking ``(d) For purposes'' and inserting the 
     following:
       ``(d) Contracting Priorities.--
       ``(1) In general.--For purposes''; and
       (2) by adding at the end the following:
       ``(2) Disaster contracting priority in general.--The 
     Administrator shall designate any disaster area as an area of 
     concentrated unemployment or underemployment, or a labor 
     surplus area for purposes of paragraph (1).
       ``(3) Local small businesses.--
       ``(A) In general.--The head of each executive agency shall 
     give priority in the awarding of contracts and the placement 
     of subcontracts for disaster relief to local small business 
     concerns by using, as appropriate--
       ``(i) preferential factors in evaluations of contract bids 
     and proposals;
       ``(ii) competitions restricted to local small business 
     concerns, where there is a reasonable expectation of 
     receiving competitive, reasonably priced bids or proposals 
     from not fewer than 2 local small business concerns;
       ``(iii) requirements of preference for local small business 
     concerns in subcontracting plans; and
       ``(iv) assessments of liquidated damages and other 
     contractual penalties, including contract termination.
       ``(B) Other disaster assistance.--Priority shall be given 
     to local small business concerns in the awarding of contracts 
     and the placement of subcontracts for disaster relief in any 
     Federal procurement and any procurement by a State or local 
     government made with Federal disaster assistance funds.
       ``(4) Definitions.--In this subsection--
       ``(A) the term `declared disaster' means a disaster, as 
     designated by the Administrator;
       ``(B) the term `disaster area' means any State or area 
     affected by a declared disaster, as determined by the 
     Administrator;
       ``(C) the term `executive agency' has the same meaning as 
     in section 105 of title 5, United States Code; and
       ``(D) the term `local small business concern' means a small 
     business concern that--
       ``(i) on the date immediately preceding the date on which a 
     declared disaster occurred--

       ``(I) had a principal office in the disaster area for such 
     declared disaster; and
       ``(II) employed a majority of the workforce of such small 
     business concern in the disaster area for such declared 
     disaster; and

       ``(ii) is capable of performing a substantial proportion of 
     any contract or subcontract

[[Page S11338]]

     for disaster relief within the disaster area for such 
     declared disaster, as determined by the Administrator.''.

     SEC. 209. TERMINATION OF PROGRAM.

       Section 711(c) of the Small Business Competitive 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended by inserting after ``January 1, 1989'' the following: 
     ``, and shall terminate on the date of enactment of the Small 
     Business Disaster Response and Loan Improvements Act of 
     2006''.

     SEC. 210. INCREASING COLLATERAL REQUIREMENTS.

       Section 7(d)(6) of the Small Business Act (15 U.S.C. 636), 
     as so designated by section 101, is amended by striking 
     ``$10,000 or less'' and inserting ``$14,000 or less (or such 
     higher amount as the Administrator determines appropriate in 
     the event of a catastrophic national disaster declared under 
     subsection (b)(6))''.

                      TITLE III--DISASTER RESPONSE

     SEC. 301. DEFINITIONS.

       In this title--
       (1) the term ``catastrophic national disaster'' has the 
     meaning given the term in section 7(b)(6) of the Small 
     Business Act (15 U.S.C. 636(b)), as added by this Act;
       (2) the term ``declared disaster'' means a major disaster 
     or a catastrophic national disaster;
       (3) the term ``disaster loan program of the 
     Administration'' means assistance under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b));
       (4) the term ``disaster update period'' means the period 
     beginning on the date on which the President declares a major 
     disaster or a catastrophic national disaster and ending on 
     the date on which such declaration terminates;
       (5) 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
       (6) 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. 302. BUSINESS EXPEDITED DISASTER ASSISTANCE LOAN 
                   PROGRAM.

       (a) Definitions.--In this section--
       (1) the term ``immediate disaster assistance'' means 
     assistance provided during the period beginning on the date 
     on which a disaster declaration is made and ending on the 
     date that an impacted small business concern is able to 
     secure funding through insurance claims, Federal assistance 
     programs, or other sources; and
       (2) the term ``program'' means the expedited disaster 
     assistance business loan program established under subsection 
     (b); and
       (b) Creation of Program.--The Administrator shall take such 
     administrative action as is necessary to establish and 
     implement an expedited disaster assistance business loan 
     program to provide small business concerns with immediate 
     disaster assistance under section 7(b) of the Small Business 
     Act (15 U.S.C. 636(b)).
       (c) Consultation Required.--In establishing the program, 
     the Administrator shall consult with--
       (1) appropriate personnel of the Administration (including 
     District Office personnel of the Administration);
       (2) appropriate technical assistance providers (including 
     small business development centers);
       (3) appropriate lenders and credit unions;
       (4) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (5) the Committee on Small Business of the House of 
     Representatives.
       (d) Rules.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall promulgate 
     rules establishing and implementing the program in accordance 
     with this section. Such rules shall apply as provided for in 
     this section, beginning 90 days after their issuance in final 
     form.
       (2) Contents.--The rules promulgated under paragraph (1) 
     shall--
       (A) identify whether appropriate uses of funds under the 
     program may include--
       (i) paying employees;
       (ii) paying bills and other financial obligations;
       (iii) making repairs;
       (iv) purchasing inventory;
       (v) restarting or operating a small business concern in the 
     community in which it was conducting operations prior to the 
     declared disaster, or to a neighboring area, county, or 
     parish in the disaster area; or
       (vi) covering additional costs until the small business 
     concern is able to obtain funding through insurance claims, 
     Federal assistance programs, or other sources; and
       (B) set the terms and conditions of any loan made under the 
     program, subject to paragraph (3).
       (3) Terms and conditions.--A loan made by the 
     Administration under this section--
       (A) shall be a short-term loan, not to exceed 180 days, 
     except that the Administrator may extend such term as the 
     Administrator determines necessary or appropriate on a case-
     by-case basis;
       (B) shall have an interest rate not to exceed 1 percentage 
     point above the prime rate of interest that a private lender 
     may charge;
       (C) shall have no prepayment penalty;
       (D) may be refinanced as part of any subsequent disaster 
     assistance provided under section 7(b) of the Small Business 
     Act; and
       (E) shall be subject to such additional terms as the 
     Administrator determines necessary or appropriate.
       (e) Report to Congress.--Not later than 5 months after the 
     date of enactment of this Act, the Administrator shall report 
     to the Committee on Small Business and Entrepreneurship of 
     the Senate and the Committee on Small Business of the House 
     of Representatives on the progress of the Administrator in 
     establishing the program.
       (f) Authorization.--There are authorized to be appropriated 
     to the Administrator such sums as are necessary to carry out 
     this section.

     SEC. 303. CATASTROPHIC NATIONAL 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) Catastrophic national disasters.--
       ``(A) Definition.--In this paragraph the term `catastrophic 
     national disaster' means a disaster, natural or other, that 
     the President determines has caused significant adverse 
     economic conditions outside of the geographic reach of the 
     disaster.
       ``(B) Authorization.--The Administrator may make such loans 
     under this paragraph (either directly 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 small business 
     concerns located anywhere in the United States that are 
     economically adversely impacted as a result of a catastrophic 
     national disaster.
       ``(C) Loan terms.--A loan under this paragraph shall be 
     made on the same terms as a loan under paragraph (2).''.

     SEC. 304. PUBLIC AWARENESS OF DISASTER DECLARATION AND 
                   APPLICATION PERIODS.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (6), as added by this Act, the following:
       ``(7) Coordination with fema.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, for any disaster (including a catastrophic national 
     disaster) declared under this subsection or 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, in consultation with the 
     Director of the Federal Emergency Management Agency, shall 
     ensure, to the maximum extent practicable, that all 
     application periods for disaster relief under this Act and 
     the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5121 et seq.) begin on the same 
     date and end on the same date.
       ``(B) Deadline extensions.--Notwithstanding any other 
     provision of law--
       ``(i) not later than 10 days before the closing date of an 
     application period for disaster relief under this Act for any 
     disaster (including a catastrophic national disaster) 
     declared under this subsection, the Administrator, in 
     consultation with the Director of the Federal Emergency 
     Management Agency, shall notify the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives as to 
     whether the Administrator intends to extend such application 
     period; and
       ``(ii) not later than 10 days before the closing date of an 
     application period for disaster relief under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act for any 
     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)) for which the President has declared a 
     catastrophic national disaster under paragraph (6), the 
     Director of the Federal Emergency Management Agency, in 
     consultation with the Administrator, shall notify the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives as to whether the Director intends to extend 
     such application period.
       ``(8) Public awareness of disasters.--If a disaster 
     (including a catastrophic national disaster) is declared 
     under this subsection, the Administrator shall make every 
     effort to communicate through radio, television, print, and 
     web-based outlets, all relevant information needed by 
     disaster loan applicants, including--
       ``(A) the date of such declaration;
       ``(B) cities and towns within the area of such declaration;
       ``(C) loan application deadlines related to such disaster;
       ``(D) all relevant contact information for victim services 
     available through the Administration (including links to 
     small business development center websites);
       ``(E) links to relevant Federal and State disaster 
     assistance websites;
       ``(F) information on eligibility criteria for Federal 
     Emergency Management Agency disaster assistance applications, 
     as well as for Administration loan programs, including where 
     such applications can be found; and
       ``(G) application materials that clearly state the function 
     of the Administration as the Federal source of disaster loans 
     for homeowners and renters.''.
       (b) Coordination of Agencies and Outreach.--Not later than 
     90 days after the date of enactment of this Act, the 
     Administrator and the Director of the Federal Emergency

[[Page S11339]]

     Management Agency shall enter into a memorandum of 
     understanding that ensures, to the maximum extent 
     practicable, adequate lodging and transportation for 
     employees of the Administration, contract employees, and 
     volunteers during a major disaster, if such staff are needed 
     to assist businesses, homeowners, or renters in recovery.
       (c) Marketing and Outreach.--Not later than 90 days after 
     the date of enactment of this Act, the Administrator shall 
     create a marketing and outreach plan that--
       (1) encourages a proactive approach to the disaster relief 
     efforts of the Administration;
       (2) distinguishes between disaster services provided by the 
     Administration and disaster services provided by the Federal 
     Emergency Management Agency, including contact information, 
     application information, and timelines for submitting 
     applications, the review of applications, and the 
     disbursement of funds;
       (3) describes the different disaster loan programs of the 
     Administration, including how they are made available and 
     what eligibility requirements exist for each loan program;
       (4) provides for regional marketing, focusing on disasters 
     occurring in each region before the date of enactment of this 
     Act, and likely scenarios for disasters in each such region; 
     and
       (5) ensures that the marketing plan is made available at 
     small business development centers and on the website of the 
     Administration.

     SEC. 305. CONSISTENCY BETWEEN ADMINISTRATION REGULATIONS AND 
                   STANDARD OPERATING PROCEDURES.

       (a) In General.--The Administrator shall, promptly 
     following the date of enactment of this Act, conduct a study 
     of whether the standard operating procedures of the 
     Administration for loans offered under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b)) are consistent with the 
     regulations of the Administration for administering the 
     disaster loan program.
       (b) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Administration shall submit to 
     Congress a report containing all findings and recommendations 
     of the study conducted under subsection (a).

     SEC. 306. PROCESSING DISASTER LOANS.

       (a) Authority for Qualified Private Contractors to Process 
     Disaster Loans.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (8), as added by this Act, the following:
       ``(9) Authority for qualified private contractors.--
       ``(A) Disaster loan processing.--The Administrator may 
     enter into an agreement with a qualified private contractor, 
     as determined by the Administrator, to process loans under 
     this subsection in the event of a major disaster (as defined 
     in section 102 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5122)) or a catastrophic 
     national disaster declared under paragraph (6), under which 
     the Administrator shall pay the contractor a fee for each 
     loan processed.
       ``(B) 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 
     subsection in the event of a major disaster (as defined in 
     section 102 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5122)) or a catastrophic 
     national disaster declared under paragraph (6), 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.''.
       (b) Coordination of Efforts Between the Administrator and 
     the Internal Revenue Service To Expedite Loan Processing.--
     The Administrator and the Commissioner of Internal Revenue 
     shall, to the maximum extent practicable, ensure that all 
     relevant and allowable tax records for loan approval are 
     shared with loan processors in an expedited manner, upon 
     request by the Administrator.
       (c) Report on Loan Approval Rate.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Administrator 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 detailing how the 
     Administration can improve the processing of applications 
     under the disaster loan program of the Administration.
       (2) Contents.--The report submitted under paragraph (1) 
     shall include--
       (A) recommendations, if any, regarding--
       (i) staffing levels during a major disaster;
       (ii) how to improve the process for processing, approving, 
     and disbursing loans under the disaster loan program of the 
     Administration, to ensure that the maximum assistance is 
     provided to victims in a timely manner;
       (iii) the viability of using alternative methods for 
     assessing the ability of an applicant to repay a loan, 
     including the credit score of the applicant on the day before 
     the date on which the disaster for which the applicant is 
     seeking assistance was declared;
       (iv) methods, if any, for the Administration to expedite 
     loss verification and loan processing of disaster loans 
     during a major disaster for businesses affected by, and 
     located in the area for which the President declared, the 
     major disaster that are a major source of employment in the 
     area or are vital to recovery efforts in the region 
     (including providing debris removal services, manufactured 
     housing, or building materials);
       (v) legislative changes, if any, needed to implement 
     findings from the Administration's Accelerated Disaster 
     Response Initiative; and
       (vi) a description of how the Administration plans to 
     integrate and coordinate the response to a major disaster 
     with the technical assistance programs of the Administration; 
     and
       (B) the plans of the Administrator for implementing any 
     recommendation made under subparagraph (A).

     SEC. 307. DEVELOPMENT AND IMPLEMENTATION OF MAJOR DISASTER 
                   RESPONSE PLAN.

       (a) In General.--Not later than March 15, 2007, the 
     Administrator shall--
       (1) by rule, amend the 2006 Atlantic hurricane season 
     disaster response plan of the Administration (in this section 
     referred to as the ``disaster response plan'') to apply to 
     major disasters and catastrophic national disasters, 
     consistent with this Act and the amendments made by this Act; 
     and
       (2) 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 detailing the 
     amendments to the disaster response plan.
       (b) Contents.--The amended report required under subsection 
     (a)(2) shall include--
       (1) any updates or modifications made to the disaster 
     response plan since the report regarding the disaster 
     response plan submitted on July 14, 2006;
       (2) a description of how the Administrator plans to utilize 
     and integrate District Office personnel of the Administration 
     in the response to a major disaster, including information on 
     the utilization of personnel for loan processing and loan 
     disbursement;
       (3) a description of the disaster scalability model of the 
     Administration and on what basis or function the plan is 
     scaled;
       (4) a description of how the agency-wide Disaster Oversight 
     Council is structured, which offices comprise its membership, 
     and whether the Associate Deputy Administrator for 
     Entrepreneurial Development of the Administration is a 
     member;
       (5) a description of how the Administrator plans to 
     coordinate the disaster efforts of the Administration with 
     State and local government officials, including 
     recommendations on how to better incorporate State 
     initiatives or programs, such as State-administered bridge 
     loan programs, into the disaster response of the 
     Administration;
       (6) recommendations, if any, on how the Administrator can 
     better coordinate its disaster response operations with the 
     operations of other Federal, State, and local entities;
       (7) any surge plan for the system in effect on or after 
     August 29, 2005 (including surge plans for loss verification, 
     loan processing, mailroom, customer service or call center 
     operations, and a continuity of operations plan);
       (8) the number of full-time equivalent employees and job 
     descriptions for the planning and disaster response staff of 
     the Administration;
       (9) the in-service and preservice training procedures for 
     disaster response staff of the Administration;
       (10) information on the logistical support plans of the 
     Administration (including equipment and staffing needs, and 
     detailed information on how such plans will be scalable 
     depending on the size and scope of the major disaster;
       (11) a description of the findings and recommendations of 
     the Administrator, if any, based on a review of the response 
     of the Administration to Hurricane Katrina of 2005, Hurricane 
     Rita of 2005, and Hurricane Wilma of 2005; and
       (12) a plan for how the Administrator, in cooperation with 
     the Director of the Federal Emergency Management Agency, will 
     coordinate the provision of accommodations and necessary 
     resources for disaster assistance personnel to effectively 
     perform their responsibilities in the aftermath of a major 
     disaster.
       (c) Exercises.--Not later than May 31, 2007, the 
     Administrator shall develop and execute simulation exercises 
     to demonstrate the effectiveness of the amended disaster 
     response plan required under this section.

     SEC. 308. CONGRESSIONAL OVERSIGHT.

       (a) Monthly Accounting Report to Congress.--
       (1) Definition.--In this subsection 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.
       (2) Reporting requirements.--Not later than the fifth 
     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.

[[Page S11340]]

       (3) Contents.--Each report under paragraph (2) shall 
     include--
       (A) 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 
     paragraph (2);
       (B) 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 
     paragraph (2);
       (C) 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 paragraph (2);
       (D) 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;
       (E) an estimate of how long the available funding for such 
     loans will last, based on the spending rate;
       (F) 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 paragraph (2);
       (G) 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 
     paragraph (2);
       (H) 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
       (I) an estimate of how long the available funding for 
     salaries and expenses will last, based on the spending rate.
       (b) Daily Disaster Updates to Congress for Presidentially 
     Declared Disasters.--
       (1) In general.--Each day during a disaster update period, 
     excluding Federal holidays and weekends, the Administration 
     shall provide to the Committee on Small Business and 
     Entrepreneurship of the Senate and to the Committee on Small 
     Business of the House of Representatives a report on the 
     operation of the disaster loan program of the Administration 
     for the area in which the President declared a major disaster 
     or a catastrophic national disaster, as the case may be.
       (2) Contents.--Each report under paragraph (1) shall 
     include--
       (A) the number of Administration staff performing loan 
     processing, field inspection, and other duties for the 
     declared disaster, and the allocations of such staff in the 
     disaster field offices, disaster recovery centers, workshops, 
     and other Administration offices nationwide;
       (B) the daily number of applications received from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (C) the daily number of applications pending application 
     entry from applicants in the relevant area, as well as a 
     breakdown of such figures by State;
       (D) the daily number of applications withdrawn by 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (E) the daily number of applications summarily declined by 
     the Administration from applicants in the relevant area, as 
     well as a breakdown of such figures by State;
       (F) the daily number of applications declined by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (G) the daily number of applications in process from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (H) the daily number of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (I) the daily dollar amount of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (J) the daily amount of loans dispersed, both partially and 
     fully, by the Administration to applicants in the relevant 
     area, as well as a breakdown of such figures by State;
       (K) the daily dollar amount of loans dispersed, both 
     partially and fully, from the relevant area, as well as a 
     breakdown of such figures by State;
       (L) the number of applications approved, including dollar 
     amount approved, as well as applications partially and fully 
     dispersed, including dollar amounts, since the last report 
     under paragraph (1); and
       (M) the declaration date, physical damage closing date, 
     economic injury closing date, and number of counties included 
     in the declaration of a major disaster.
       (c) Notice of the Need for Supplemental Funds.--On the same 
     date that the Administrator notifies any committee of the 
     Senate or the House of Representatives that supplemental 
     funding is necessary for the disaster loan program of the 
     Administration in any fiscal year, the Administrator shall 
     notify in writing the Committee on Small Business and 
     Entrepreneurship of the Senate and to the Committee on Small 
     Business of the House of Representatives regarding the need 
     for supplemental funds for such loan program.
       (d) Report on Contracting.--
       (1) In general.--Not later than 6 months after the date on 
     which the President declares a declared disaster, and every 6 
     months thereafter until the date that is 18 months after the 
     date on which the declared disaster was declared, the 
     Administrator shall submit a report to the Committee on Small 
     Business and Entrepreneurship of the Senate and to the 
     Committee on Small Business of the House of Representatives 
     regarding Federal contracts awarded as a result of the 
     declared disaster.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include--
       (A) the total number of contracts awarded as a result of 
     the declared disaster;
       (B) the total number of contracts awarded to small business 
     concerns as a result of the declared disaster;
       (C) the total number of contracts awarded to women and 
     minority-owned businesses as a result of the declared 
     disaster; and
       (D) the total number of contracts awarded to local 
     businesses as a result of the declared disaster.

                      TITLE IV--ENERGY EMERGENCIES

     SEC. 401. FINDINGS.

       Congress finds that--
       (1) a significant number of small business concerns in the 
     United States, nonfarm 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 business concerns 
     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 to 1984, 1988 to 
     1989, 1996 to 1997, 1999 to 2000, 2000 to 2001, and 2004 to 
     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 
     business concerns.

     SEC. 402. 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 (9), 
     as added by this Act, the following:
       ``(10) Energy emergencies.--
       ``(A) Definitions.--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) Authorization.--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 occurring on or after 
     October 1, 2004.
       ``(C) Interest rate.--Any loan or guarantee extended under 
     this paragraph shall be made at the same interest rate as 
     economic injury loans under paragraph (2).
       ``(D) Maximum amount.--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 Administrator, in which case the 
     Administrator, in the discretion of the Administrator, may 
     waive the $1,500,000 limitation.
       ``(E) Declarations.--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 under 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

[[Page S11341]]

     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) Use of funds.--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''.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Administrator under 
     section 404.

     SEC. 403. 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 (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 energy 
     emergencies.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Secretary of 
     Agriculture under section 404.

     SEC. 404. GUIDELINES AND RULEMAKING.

       (a) Guidelines.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator 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 title and the amendments made 
     by this title.
       (b) Rulemaking.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator, 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)(10)(A)(iv)(II) of 
     the Small Business Act, as added by this Act.

     SEC. 405. REPORTS.

       (a) Small Business Administration.--Not later than 12 
     months after the date on which the Administrator issues 
     guidelines under section 404, and annually thereafter until 
     the date that is 12 months after the end of the effective 
     period of section 7(b)(10) of the Small Business Act, as 
     added by this Act, 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)(10) 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)(10), if any.
       (b) Department of Agriculture.--Not later than 12 months 
     after the date on which the Secretary of Agriculture issues 
     guidelines under section 404, and annually thereafter until 
     the date that is 12 months after the end of the effective 
     period of the amendments made to section 321(a) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1961(a)) by this title, the Secretary shall submit to the 
     Committee on Small Business and Entrepreneurship and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate and the Committee on Small Business and the Committee 
     on Agriculture of the House of Representatives, a report 
     that--
       (1) describes the effectiveness of the assistance made 
     available under section 321(a) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1961(a)); and
       (2) contains recommendations for ways to improve the 
     assistance provided under such section 321(a), if any.

  Mr. KERRY. Mr. President, in the 15 months since Hurricane Katrina 
decimated gulf coast communities, Senators Snowe, Landrieu, Vitter, and 
I have worked to produce a comprehensive package to reform the SBA's 
disaster loan program. The SBA's failed response in a time of unmatched 
need demonstrated to everyone that this program is broken and needs 
fixing.
  Immediately after Hurricane Katrina hit, I introduced an amendment 
with Senator Landrieu to the fiscal year 2006 Commerce, Justice and 
Science appropriations bill to address the needs of gulf region small 
business and homeowners. The amendment was adapted with input from 
Chair Snowe, and a subsequent bipartisan amendment passed the Senate 
with a vote of 96 to 0. Although the entire Senate supported the 
amendment, it was stripped out of the bill conference.
  On September 30, 2005, I again worked with Chair Snowe and Senators 
Landrieu and Vitter to introduce the Small Business Hurricane Relief 
and Reconstruction Act of 2006, S. 1807. Although this bill presented a 
bipartisan, comprehensive approach to hurricane relief, it stalled in 
the face of the Administration's opposition. In June, I introduced the 
Small Business Disaster Loan Reauthorization and Improvements Act of 
2006, S. 3487, which once again attempted to comprehensively address 
the shortcomings of this program. Finally, in August, and with 
continued opposition from the administration, the, committee 
unanimously reported S. 3778, the Small Business Reauthorization and 
Improvements Act of 2006, which again put forward a bipartisan, 
comprehensive fix for this program.
  Many of the provisions included in the bill we are introducing today 
were included in one or more of these previous proposals. The bill 
includes directives for the SBA to create a private disaster loan 
program, to allow for lenders to issue disaster loans. To ensure that 
these loans are borrower friendly, we provide authorization for 
appropriations so that the agency can subsidize the interest rates. In 
addition, the administrator is authorized to enter into agreements with 
private contractors in order to expedite loan application processing 
for direct disaster loans.
  The bill also includes language directing SBA to create an expedited 
disaster assistance loan program to provide businesses with short-term 
loans so that they may keep their doors open until they receive 
alternative forms of assistance. The days immediately following a 
disaster are crucial for business owners--statistics show that once 
they close their doors, they likely will not open them again. These 
short-term loans should help prevent those doors from closing.
  A Presidential declaration of catastrophic national disaster will 
allow the administrator to offer economic injury disaster loans to 
adversely affected business owners beyond the geographic reach of the 
disaster area.
  Nonprofit entities working to provide services to victims should be 
rewarded and given access to the capital they require to continue their 
services. To this end, the administrator is authorized to make disaster 
loans to nonprofit entities, including religious organizations.
  Construction and rebuilding contracts being awarded are likely to be 
larger than the current $2 million threshold currently applied to the 
SBA Surety Bond Program which helps small construction firms gain 
access to contracts. This bill increases the guarantee against loss for 
small business contracts up to $5 million and allows the administrator 
to increase that level to $10 million, if deemed necessary.
  The bill also provides for small business development centers to 
offer business counseling in disaster areas and to travel beyond 
traditional geographic

[[Page S11342]]

boundaries to provide services during declared disasters. To encourage 
small business development centers located in disaster areas to keep 
their doors open, the maximum grant amount is waived.
  So that Congress may remain better aware of the status of the 
administration's disaster loan program, this bill directs the 
administration to report to the Committee on Small Business and 
Entrepreneurship of the Senate and to the Committee on Small Business 
of the House of Representatives regularly on the fiscal status of the 
disaster loan program as well as the need for supplemental funding. The 
administration is also directed to report on the number of Federal 
contracts awarded to small businesses, minority-owned small businesses, 
women-owned businesses, and local businesses during a disaster 
declaration.
  Finally, gas prices continue to fluctuate, and fuel-dependent small 
businesses are struggling with the cost of energy. This bill provides 
relief to small business owners during times of above average energy 
price increases, authorizing energy disaster loans through the Small 
Business Administration and the Department of Agriculture to companies 
that depend on fuel.
  Residents of the gulf coast continue to rebuild from last year's 
hurricane season. By all accounts, Administrator Preston has 
implemented policies that are helping gulf coast victims get back on 
their feet. However, the SBA needs the tools offered in this bill in 
order to comprehensively address the needs of business owners following 
a large-scale disaster. As the 109th Congress prepares to adjourn, it 
is unconscionable that we have not yet put in place the reforms needed 
for this program to function effectively. I urge my colleagues in the 
final days of this session to support this legislation, so that God 
forbid another region has to deal with a disaster the size and scope of 
the 2005 gulf coast hurricanes, the SBA will be fully able to provide 
the assistance that homeowners and business owners require.
  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 having just finished the 2006 Hurricane season, 
and with the 2007 season a few months away, 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 proud to be an original cosponsor of legislation to 
improve the disaster response of one agency that had a great deal of 
problems last year, the Small Business Administration, SBA. This bill, 
the Small Business Disaster Response and Loan Improvements Act, makes 
major improvements to the SBA's disaster response and provides them 
with essential tools to ensure that they are more efficient and better 
prepared for future disasters--big and small. I should also note that 
this bill is a result of intensive bipartisan work over the past few 
months. As such, it is reflective of the priorities from Senators Snowe 
and Kerry, respectively chair and ranking member of the Senate Small 
Business Committee, as well as Senator Landrieu. For my part, I have 
heard loud and clear from our impacted businesses that SBA reforms 
should be implemented as soon as possible. That is why in September, I 
sent a letter to the new SBA Administrator Steve Preston, expressing 
concerns on the lack of progress on SBA Disaster reforms, which were 
included in S. 3778, the fiscal year 2007 SBA reauthorization bill 
reported out of the Senate Small Business Committee. In this letter, I 
requested his cooperation, along with our committee, to pass this 
important legislation before Congress adjourns at the end of the year. 
The introduction of this bill today, shows the progress that the 
committee made since September on this issue. I hope that this spirit 
of bipartisanship continues well into the 110th Congress and that I can 
continue to work with my colleagues on the Senate Small Business 
Committee to reform SBA.
  This legislation offers new tools to 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 assistance 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 set up an expedited disaster assistance business loan 
program to make short-term, low-interest loans to keep them afloat. 
These 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 911, to an ice storm or drought. This 
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 short-
term 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--
these expedited business loans would be very helpful.

  This legislation also would direct SBA to study ways to 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 SBA 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.
  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. That is 
why this bill increases this collateral requirement to $14,000 and 
gives the Administrator the ability to increase that amount, in the 
event of another large-scale disaster. I believe this is a reasonable 
and fiscally responsible increase, and at the same time gives the 
Administrator flexibility for future disasters which will inevitably 
occur.
  As you may know, pushed to get language in the last hurricane 
supplemental appropriations bill in June 2006 to require SBA to develop 
a disaster plan and report to Congress on its contents by July 15, 
2006. SBA provided this status report in July, and I am pleased that, 
since then, SBA has been working on a comprehensive disaster response 
plan. That said, I believe that with the 2007 Atlantic hurricane season 
fast approaching, and other disasters possible before then, the SBA 
should be looking at additional ways to improve upon this plan. This 
legislation requires SBA to report to Congress, by March 15, 2007, on 
the current status of its response plan and to provide us with a 
snapshot of where they were with Katrina and where they are now. The 
report also requests SBA feedback on suggested improvements. These 
improvements include better incorporating State disaster assistance 
efforts into SBA's response, as well as better coordination with 
Federal response agencies like FEMA.

[[Page S11343]]

  The Small Business Disaster Response and Loan Improvements Act will 
provide essential tools to make the SBA more proactive, flexible, and 
most important, more efficient during future disasters. Again, I look 
forward to working with both Senator Snowe and Senator Kerry during the 
110th Congress to ensure that the SBA has everything it needs to meet 
these goals.
  I thank the Chair and ask that my entire statement appear in the 
Record. I also ask unanimous consent that a copy of my September 27, 
2006, letter to SBA be printed in the Record at the conclusion of my 
statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                      U.S. Senate,
                               Washington, DC, September 27, 2006.
     Hon. Steven C. Preston,
     Administrator, U.S. Small Business Administration,
     Washington, DC.
       Dear Administrator Preston: Let me take this opportunity to 
     again congratulate you on your confirmation as Administrator 
     of the U.S. Small Business Administration (SBA). Your 
     management experience and passion to serve will prove 
     extremely helpful to you in this challenging position.
       I write you today because, as member of the Senate 
     Committee on Small Business and Entrepreneurship, as well as 
     senator from a state hit hard by both Hurricanes Katrina and 
     Rita, I believe it is my duty to ensure that we implement 
     substantive changes to SBA's Disaster Assistance Program 
     during this session of Congress.
       The SBA's response to Katrina and Rita was too slow and 
     lacking in urgency--threatening the very survival of our 
     affected businesses. A year has passed since Hurricanes 
     Katrina and Rita, yet while Congress is currently acting on 
     extensive reforms for the Federal Emergency Management Agency 
     (FEMA), there has been only incremental changes to SBA's 
     Disaster Assistance Program. That is why I am pleased to 
     learn that you have recently created the Accelerated Disaster 
     Response Initiative to identify and help implement process 
     improvements to enable the SBA to respond more quickly in 
     assisting small businesses and homeowners in need of 
     assistance after a disaster. I applaud these efforts and your 
     leadership on this issue. But much more must be done to 
     address the systemic problems that led to delays and inaction 
     post-Katrina and Rita.
       For our part, the Senate is also attempting to address the 
     multiple problems that hampered SBA's ability to assist 
     impacted Gulf Coast small businesses and homeowners. Under 
     the leadership of the Chair and Ranking Member of the Senate 
     Committee on Small Business and Entrepreneurship, Senators 
     Snowe and Kerry, the committee voted unanimously to approve 
     S. 3778, the ``Small Business Reauthorization and 
     Improvements Act of 2006'' and sent it to the full Senate for 
     consideration. A copy of the bill is attached for your 
     convenience. This bipartisisan legislation re-authorizes SBA 
     programs, and also of great importance to me and my 
     constitutents, makes essential reforms to SBA's Disaster 
     Assistance Program. However, since S. 3778 was introduced on 
     August 2, 2006, almost nine weeks ago, it has been blocked 
     from consideration and the Committee is still waiting for 
     budget information so that it may file its report on the 
     bill. It is my understanding that the administration and SBA 
     has several concerns about this bill in its current form.
       I am very concerned at this apparent deadlock, a deadlock 
     which threatens our bipartisan efforts to implement 
     comprehensive SBA Diaster Assistance reforms before the end 
     of the year. In particular, I believe that there must be SBA 
     reforms in the following areas:
       Short-Term Assistance: Following Katrina and Rita small 
     businesses waited, on average, four to six months for 
     approvals and disbursements on SBA Disaster Loans, In order 
     to ensure the long-term survival of small businesses impacted 
     by a catastrophic disaster, SBA needs to be in the business 
     of short-term recovery--by providing either emergency bridge 
     loans or grants.
       Disaster Loan Process for Homeowners: While SBA's mission 
     is to ``aid, counsel, assist and protect, insofar as is 
     possible, the interests of small business concerns'' it also 
     has the added responsibility of helping affected homeowners 
     rebuild their housing post-disaster. Katrina and Rita 
     resulted in record numbers of SBA Disaster Loan applications, 
     from homeowners, which strained SBA's existing resources and 
     personnel. If the SBA must bear this responsibility, the 
     agency should improve the process as well as possibly seek 
     greater coordination and cooperation with the U.S. Department 
     of Housing and Urban Development on disaster housing 
     assistance.
       Expedited Disaster Loans to Businesses: The SBA currently 
     has no mechanism in place to expedite Disaster Loans to 
     impacted businesses that are either a major source of 
     employment or that can demonstrate a vital contribution to 
     recovery efforts in the area, such as businesses who 
     construct housing, provide building materials, or conduct 
     debris removal. The SBA needs the ability to fast-track loans 
     to these businesses, in order to jumpstart local economies 
     and recovery efforts.
       Economic Injury Disaster Loans: Although Katrina and Rita 
     directly affected businesses along the Gulf Coast, additional 
     businesses in the region, as well as the rest of the country, 
     were economically impacted by the storms. The SBA must have 
     the ability to provide nationwide, or perhaps regional, 
     economic injury disaster loans to businesses which can 
     demonstrate economic distress or disruption from a future 
     major disaster.
       Loss Verification and Loan Processing: Following the Gulf 
     Coast hurricanes, the SBA struggled for months to hire enough 
     staff to inspect losses and process loan applications. 
     Although SBA now has trained reserves to handle such surges 
     in demand, the SBA also needs the permanent authority to 
     enter into agreements with qualified private lenders and 
     credit unions to process Disaster Loans and provide loss 
     verification services.
       Administrator Preston, I was impressed by your expressed 
     willingness to be a bridge between Congress and the White 
     House. For the SBA truly bring its disaster capabilities to 
     the next level, I believe that it must work in concert with 
     the Congress. Together, we must remove layers of bureaucracy 
     and red tape, which, following Katrina and Rita, both 
     overwhelmed and frustrated dedicated SBA employees and those 
     affected by the hurricanes. We must also give the SBA new 
     tools to ensure that problems that occurred post-Katrina and 
     Rita never happen again.
       Last month we marked the 1-year anniversary of Hurricane 
     Katrina, and now mark the 1-year anniversary of hurricane 
     Rita. It is essential that we take action now to make 
     substantive reforms to the SBA Disaster Assistance Program. 
     We owe nothing less to our small businesses. I ask that you 
     continue working with my office on this important issue and 
     respond to our approach in writing no later than October 31, 
     2006. This will help us develop a proposal which can address 
     the concerns of the SBA as well as provide a better and more 
     responsive SBA Disaster Assistance Program for our small 
     businesses.
       Thank you in advance for your assistance with this request.
           Sincerely,
                                                 Mary L. Landrieu,
                                            United States Senator.
                                 ______