[Congressional Record Volume 153, Number 35 (Thursday, March 1, 2007)]
[Senate]
[Pages S2503-S2505]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU (for herself, Ms. Snowe, Mr. Kerry, and Mr. 
        Coleman):
  S. 738. A bill to amend the Small Business Act to improve the Office 
of International Trade, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
  Ms. LANDRIEU. Mr. President, as I come to the floor today to speak, 
there are countless small businesses in the Gulf Coast, right this 
moment, that are open for business. The fact that they are open at all 
is a testament to the hard work and resolve of their owners, along with 
the focus and commitment of community leaders, state and local 
officials, as well as Congress and the White House. This is because, as 
you know, the Gulf Coast was devastated in 2005 by two of the most 
powerful storms to ever hit the United States in recorded history--
Hurricanes Katrina and Rita.
  I strongly believe that we cannot rebuild the Gulf Coast without our 
small businesses. Small businesses not only create jobs and pay taxes--
they provide the innovation and energy that drives our economy. In 
fact, before Katrina and Rita hit, there were more than 95,000 small 
businesses in Louisiana, employing about 850,000 people--more than half 
of my State's workforce. About 39,000 of these businesses have yet to 
resume normal operations so I intend to do everything I can in the 
coming months to get them back up and running.
  That is why today I am introducing legislation to first help small 
businesses in the Gulf recover, as well as to provide assistance to 
businesses in other parts of the country. In particular, this 
legislation is focused on promoting exports by U.S. small businesses. 
Small businesses are important players in international trade, which is 
reflected in the fact that small businesses represent that 96 percent 
of all exporters of goods and services. In Louisiana, we have about 
2,000 declared exporters. However, there are many more businesses in my 
State who conduct Internet sales overseas, as well as those who focus 
operations on domestic sales but have some international buyers as 
well. These businesses are exporters but in many cases they do not even 
realize it!
  Given the importance of these exporters to my state and to the rest 
of the country, I would like to improve their competitive edge in the 
international market and give them every resource they need to succeed. 
Certainly my first priority is to provide additional assistance to 
affected Gulf Coast small businesses. As they continue to recover, one 
of the main issues being faced by our small business is accessing 
capital. Our exporters are no different. They need help accessing 
export financing to cover export-related costs such as purchasing 
equipment, purchasing inventory, or financing production costs. This 
legislation would help strengthen the SBA International Finance 
Specialist program to help these small businesses access export 
financing.
  Today I am introducing the Small Business International Trade 
Enhancements Act of 2007 to give all small businesses the opportunity 
to expand their operations into international markets. I am pleased to 
have Senator Kerry, the Chair of the Senate Small Business Committee, 
as well as Senator Snowe, the Ranking Member, and my colleague Senator 
Coleman, as cosponsors.
  As I mentioned we have 2,000 exporters in Louisiana. However, there 
are many other businesses who are exporters, but they do not even 
realize it. They may have overseas Internet sales, or they focus 
operations on domestic sales, but have some international buyers as 
well. In fact, the Small Business Administration has stated that over 
96 percent of all exporters of goods and services are small businesses.
  Given the importance of these exporters to my State and to the rest 
of the Gulf Coast, I would like to improve their competitive edge in 
the international market and give them every resource they need to 
succeed. As they continue to recover, one of the main issues being 
faced by our small business is accessing capital. Our exporters are no 
different. They need help accessing export financing to cover export-
related costs such as purchasing equipment, purchasing inventory, or 
financing production costs.
  To assist these businesses, fifteen SBA Finance Specialists operate 
out of 100 U.S. Export Assistance Centers administered by the 
Department of Commerce around the country. That is a record staffing 
low for this program, down from a peak of 22 Finance Specialists in 
2000. To ensure that all smaller exporters nationwide will continue to 
have access to export financing, this bill establishes a floor of 18 
International Finance Specialists. I believe this will send a signal to 
our exporters that, despite current budget

[[Page S2504]]

deficits, we are committed to our exporters and want to provide them 
with the necessary resources to compete internationally.
  I realize that the need for export financing is not just limited to 
the Gulf Coast. There are small businesses nationwide that are looking 
to find markets overseas. One tool that they can use is the SBA's 
International Trade Loan (ITL) program. International Trade Loans can 
help exporters develop and expand overseas markets; upgrade equipment 
or facilities; and assist exporters that are being hurt by import 
competition. Exporters can borrow up to $2 million, with $1,750,000 
guaranteed by SBA.
  However, as currently structured these loans are not user-friendly to 
lenders or borrowers and, as a result, are underutilized. Let me 
explain what I mean. First, the $250,000 difference between the loan 
cap and the guarantee requires borrowers to take out a second SBA loan 
to take full advantage of the $2 million guarantee. ITLs can only be 
used to acquire fixed assets and not working capital, a common need for 
exporters. Furthermore, ITLs do not have the same collateral or 
refinancing requirements as SBA 7(a) loans. Because of these issues, 
lenders do not use these loans.
  This legislation will also reduce the paperwork by increasing the 
maximum loan guarantee to $2,750,000 and the loan cap to $3,670,000 to 
bring it more in line with the 7(a) program. The bill also creates a 
more flexible ITL by setting out that working capital is an eligible 
use for loan proceeds, in addition to making the ITL consistent with 
regular 7(a) loans by allowing the same collateral and refinancing 
terms as with 7(a).
  The SBA International Trade and Export Loans are valuable tools for 
exporters but they are useless if there is no one to assist borrowers 
with identifying which loans are right for them. Local lending 
institutions that specialize in export financing can help but at a cost 
over less than $2 million per year, the current group of Finance 
Specialists has obtained bank financing for more than $10 billion in 
U.S. exports since 1999. The $10 billion in export sales financed by 
these specialists helped to create over 140,000 new, high-paying U.S. 
jobs.
  The Small Business International Trade Enhancements Act of 2007 is an 
important first step, not just for exporters in the Gulf Coast, but 
also for small businesses nationwide who are looking to open markets 
overseas. I urge my colleagues to support this legislation since it 
will help our exporters in the Gulf Coast recover and also give small 
businesses nationwide more options when they are seeking export 
financing.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 738

       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 International 
     Trade Enhancements Act of 2007''.

     SEC. 2. SMALL BUSINESS ADMINISTRATION ASSOCIATE ADMINISTRATOR 
                   FOR INTERNATIONAL TRADE.

       (a) Establishment.--Section 22(a) of the Small Business Act 
     (15 U.S.C. 649(a)) is amended by adding at the end the 
     following: ``The head of the Office shall be the Associate 
     Administrator for International Trade, who shall be 
     responsible to the Administrator.''.
       (b) Authority for Additional Associate Administrator.--
     Section 4(b)(1) of the Small Business Act (15 U.S.C. 
     633(b)(1)) is amended--
       (1) in the fifth sentence, by striking ``five Associate 
     Administrators'' and inserting ``Associate Administrators''; 
     and
       (2) by adding at the end the following: ``One of the 
     Associate Administrators shall be the Associate Administrator 
     for International Trade, who shall be the head of the Office 
     of International Trade established under section 22.''.
       (c) Discharge of Administration International Trade 
     Responsibilities.--Section 22 of the Small Business Act (15 
     U.S.C. 649) is amended by adding at the end the following:
       ``(h) Discharge of Administration International Trade 
     Responsibilities.--The Administrator shall ensure that--
       ``(1) the responsibilities of the Administration regarding 
     international trade are carried out through the Associate 
     Administrator for International Trade;
       ``(2) the Associate Administrator for International Trade 
     has sufficient resources to carry out such responsibilities; 
     and
       ``(3) the Associate Administrator for International Trade 
     has direct supervision and control over the staff of the 
     Office of International Trade, and over any employee of the 
     Administration whose principal duty station is a United 
     States Export Assistance Center or any successor entity.''.
       (d) Role of Associate Administrator in Carrying Out 
     International Trade Policy.--Section 2(b)(1) of the Small 
     Business Act (15 U.S.C. 631(b)(1)) is amended in the matter 
     preceding subparagraph (A)--
       (1) by inserting ``the Administrator of'' before ``the 
     Small Business Administration''; and
       (2) by inserting ``through the Associate Administrator for 
     International Trade, and'' before ``in cooperation with''.
       (e) Technical Amendment.--Section 22(c)(5) of the Small 
     Business Act (15 U.S.C. 649(c)(5)) is amended by striking the 
     period at the end and inserting a semicolon.
       (f) Effective Date.--Not later than 90 days after the date 
     of enactment of this Act, the Administrator of the Small 
     Business Administration shall appoint an Associate 
     Administrator for International Trade under section 22 of the 
     Small Business Act (15 U.S.C. 649), as amended by this 
     section.

     SEC. 3. OFFICE OF INTERNATIONAL TRADE.

       Section 22 of the Small Business Act (15 U.S.C. 649) is 
     amended--
       (1) by striking ``SEC. 22. (a) There'' and inserting the 
     following:

     ``SEC. 22. OFFICE OF INTERNATIONAL TRADE.

       ``(a) Establishment.--There''.
       (2) in subsection (a), by inserting ``(referred to in this 
     section as the `Office'),'' after ``Trade'';
       (3) in subsection (b)--
       (A) by striking ``The Office'' and inserting the following:
       ``(b) Trade Distribution Network.--The Office, including 
     United States Export Assistance Centers (referred to as `one-
     stop shops' in section 2301(b)(8) of the Omnibus Trade and 
     Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)) and as 
     `export centers' in this section)''; and
       (B) by amending paragraph (1) to read as follows:
       ``(1) assist in maintaining a distribution network using 
     regional and local offices of the Administration, the small 
     business development center network, the women's business 
     center network, and export centers for--
       ``(A) trade promotion;
       ``(B) trade finance;
       ``(C) trade adjustment;
       ``(D) trade remedy assistance; and
       ``(E) trade data collection.'';
       (4) in subsection (c)--
       (A) by redesignating paragraphs (1) through (8) as 
     paragraphs (2) through (9), respectively;
       (B) by inserting before paragraph (2), as so redesignated, 
     the following:
       ``(1) establish annual goals for the Office relating to--
       ``(A) enhancing the exporting capability of small business 
     concerns and small manufacturers;
       ``(B) facilitating technology transfers;
       ``(C) enhancing programs and services to assist small 
     business concerns and small manufacturers to compete 
     effectively and efficiently against foreign entities;
       ``(D) increasing the access to capital by small business 
     concerns;
       ``(E) disseminating information concerning Federal, State, 
     and private programs and initiatives; and
       ``(F) ensuring that the interests of small business 
     concerns are adequately represented in trade negotiations;'';
       (C) in paragraph (2), as so redesignated, by striking 
     ``mechanism for'' and all that follows through ``(D)'' and 
     inserting the following: ``mechanism for--
       ``(A) identifying subsectors of the small business 
     community with strong export potential;
       ``(B) identifying areas of demand in foreign markets;
       ``(C) prescreening foreign buyers for commercial and credit 
     purposes; and
       ``(D)''; and
       (D) in paragraph (9), as so redesignated--
       (i) in the matter preceding subparagraph (A)--

       (I) by striking ``full-time export development specialists 
     to each Administration regional office and assigning''; and
       (II) by striking ``office. Such specialists'' and inserting 
     ``office and providing each Administration regional office 
     with a full-time export development specialist, who'';

       (ii) in subparagraph (D), by striking ``and'' at the end;
       (iii) in subparagraph (E), by striking the period at the 
     end and inserting a semicolon; and
       (iv) by adding at the end the following:
       ``(F) participate jointly with employees of the Office in 
     an annual training program that focuses on current small 
     business needs for exporting; and
       ``(G) jointly develop and conduct training programs for 
     exporters and lenders in cooperation with the United States 
     Export Assistance Centers, the Department of Commerce, small 
     business development centers, and other relevant Federal 
     agencies.'';
       (5) in subsection (d)--
       (A) by inserting ``Export Financing Programs.--'' after 
     ``(d)'';

[[Page S2505]]

       (B) by redesignating paragraphs (1) through (5) as clauses 
     (i) through (v), respectively, and adjusting the margins 
     accordingly;
       (C) by striking ``The Office shall work in cooperation'' 
     and inserting the following:
       ``(1) In general.--The Office shall work in cooperation''; 
     and
       (D) by striking ``To accomplish this goal, the Office shall 
     work'' and inserting the following:
       ``(2) Trade financial specialist.--To accomplish the goal 
     established under paragraph (1), the Office shall--
       ``(A) designate at least 1 individual within the 
     Administration as a trade financial specialist to oversee 
     international loan programs and assist Administration 
     employees with trade finance issues; and
       ``(B) work'';
       (6) in subsection (e), by inserting ``Trade Remedies.--'' 
     after ``(e)'';
       (7) by amending subsection (f) to read as follows:
       ``(f) Reporting Requirement.--The Office shall submit an 
     annual report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives that contains--
       ``(1) a description of the progress of the Office in 
     implementing the requirements of this section;
       ``(2) the destinations of travel by Office staff and 
     benefits to the Administration and to small business concerns 
     therefrom; and
       ``(3) a description of the participation by the Office in 
     trade negotiations.'';
       (8) in subsection (g), by inserting  ``Studies.--'' after 
     ``(g)''; and
       (9) by adding at the end the following:
       ``(i) Export Assistance Centers.--
       ``(1) In general.--During the period beginning on October 
     1, 2006, and ending on September 30, 2009, the Administrator 
     shall ensure that the number of full-time equivalent 
     employees of the Office assigned to the one-stop shops 
     referred to in section 2301(b) of the Omnibus Trade and 
     Competitiveness Act of 1988 (15 U.S.C. 4721 (b)) is not less 
     than the number of such employees so assigned on January 1, 
     2003.
       ``(2) Priority of placement.--Priority shall be given, to 
     the maximum extent practicable, to placing employees of the 
     Administration at any Export Assistance Center that--
       ``(A) had an Administration employee assigned to such 
     Center before January 2003; and
       ``(B) has not had an Administration employee assigned to 
     such Center during the period beginning January 2003, and 
     ending on the date of enactment of this subsection, either 
     through retirement or reassignment.
       ``(3) Needs of exporters.--The Administrator shall, to the 
     maximum extent practicable, strategically assign 
     Administration employees to Export Assistance Centers, based 
     on the needs of exporters.
       ``(4) Goals.--The Office shall work with the Department of 
     Commerce and the Export-Import Bank to establish shared 
     annual goals for the Export Centers.
       ``(5) Oversight.--The Office shall designate an individual 
     within the Administration to oversee all activities conducted 
     by Administration employees assigned to Export Centers.''.

     SEC. 4. INTERNATIONAL TRADE LOANS.

       (a) In General.--Section 7(a)(3)(B) of the Small Business 
     Act (15 U.S.C. 636(a)(3)(B)) is amended by striking 
     ``$1,750,000, of which not more than $1,250,000'' and 
     inserting ``$2,750,000 (or if the gross loan amount would 
     exceed $3,670,000), of which not more than $2,000,000''.
       (b) Working Capital.--Section 7(a)(16)(A) of the Small 
     Business Act (15 U.S.C. 636(a)(16)(A)) is amended--
       (1) in the matter preceding clause (i), by striking ``in--
     '' and inserting ``--'';
       (2) in clause (i)--
       (A) by inserting ``in'' after ``(i)''; and
       (B) by striking ``or'' at the end;
       (3) in clause (ii)--
       (A) by inserting ``in'' after ``(ii)''; and
       (B) by striking the period and inserting ``; or''; and
       (4) by adding at the end the following:
       ``(iii) by providing working capital.''.
       (c) Collateral.--Section 7(a)(16)(B) of the Small Business 
     Act (15 U.S.C. 636(a)(16)(B)) is amended--
       (1) by striking ``Each loan'' and inserting the following:
       ``(i) In general.--Except as provided in clause (ii), each 
     loan''; and
       (2) by adding at the end the following:
       ``(ii) Exception.--A loan under this paragraph may be 
     secured by a second lien position on the property or 
     equipment financed by the loan or on other assets of the 
     small business concern, if the Administrator determines such 
     lien provides adequate assurance of the payment of such 
     loan.''.
       (d) Refinancing.--Section 7(a)(16)(A)(ii) of the Small 
     Business Act (15 U.S.C. 636(a)(16)(A)(ii)), as amended by 
     this section, is amended by inserting ``, including any debt 
     that qualifies for refinancing under any other provision of 
     this subsection'' before the semicolon.
                                 ______