[Congressional Record Volume 156, Number 17 (Thursday, February 4, 2010)]
[Senate]
[Pages S485-S486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU:
  S. 2986. A bill to authorize the Administrator of the Small Business 
Administration to waive interest for certain loans relating to damage 
caused by Hurricane Katrina, Hurricane Rita, Hurricane Gustav, or 
Hurricane Ike; to the Committee on Small Business and Entrepreneurship.
  Ms. LANDRIEU. Mr. President, I come to the floor today to speak on an 
issue that is of great importance to my home State of Louisiana: 
disaster recovery from Hurricanes Katrina and Rita of 2005 and 
Hurricanes Gustav and Ike of 2008. Almost 5 years after these first two 
devastating storms, our eyes are still fixed on our shores during 
hurricane season as our communities and businesses in the hardest-hit 
areas continue to rebuild. As chair of the Senate Committee on Small 
Business and Entrepreneurship, I remain focused on their ongoing 
recovery efforts and am here today to introduce a bill that I believe 
will help these struggling small businesses become successful once 
again and hire new workers.
  Charles R. ``Ray'' Bergeron and his wife's Fleur de Lis Car Care 
Center in New Orleans, Louisiana, is one of the businesses that need 
this type of assistance. Small Business Administrator Karen Mills and I 
toured the Bergerons' business back in June. Pre-Katrina, Fleur de Lis, 
which opened in 1988, had nine employees. After Hurricane Katrina hit, 
Mr. and Mrs. Bergeron found themselves having to take out two loans, 
one for their house and another for their small business. As of our 
visit in June, the Bergerons were down to two employees, not including 
themselves, and their business was back at about 40 percent of pre-
Katrina sales, due in large measure to the population not returning. 
Their neighborhood is mostly empty homes, which Mr. Bergeron attributes 
in part to high flood insurance premiums, high property taxes and high 
homeowner's insurance.
  As of June when I met with them, the Bergerons had a $225,000 SBA 
disaster loan with a standard 30-year term, which Mr. Bergeron says he 
will not pay off until he is 101 years old. But just yesterday, Mrs. 
Bergeron contacted my office requesting SBA assistance with their loan 
repayment after work to repair the flood-damaged roads surrounding 
their gas station had cut access to their business for even their most 
loyal customers. Since the project began, Fleur de Lis' sales have been 
cut almost in half. This latest challenge comes on the heels of the 
economic downturn, which caused the station to lay off two employees 
earlier last year.
  The Bergeron's story is one I have heard from countless businesses. 
Coupled with their recovery from the 2005 and 2008 hurricanes, and more 
recently, the economic downturn, these businesses--the ones that took 
the initiative to quickly reopen after the storms--are today struggling 
with one challenge after another. Yet these ``pioneer'' businesses are 
the ones rebuilding communities need the most because they serve as 
anchors. If residents see the Bergeron's gas station, or their favorite 
restaurant, open, they are more likely to come back to rebuild their 
homes.
  To help ongoing recovery efforts in the Gulf Coast, and to give these 
struggling businesses immediate assistance, I am introducing today the 
Southeast Hurricanes Small Business Disaster Relief Act of 2010. I 
thank my colleague Representative Charlie Melancon for introducing the 
House companion bill. Our legislation would provide targeted assistance 
to as many as 22,000 businesses in Louisiana, Mississippi, and Texas. 
What these particular businesses have in common is that they received 
SBA disaster loans following the 2005 or 2008 hurricanes. While they 
have made payments on these loans, I have heard from countless 
businesses in my State that they could expand operations if they had 
additional cash flow. This legislation would inject immediate capital 
into these hardest-hit businesses by giving SBA the authority to waive 
up to $15,000 of interest payments over 3 years, helping to create or 
save up to 81,000 jobs.
  Under this program, SBA is required to give priority to applications 
from businesses with 50 employees or less and businesses that re-opened 
between September 2005 and October 2006 for the 2005 storms or 
September and December 2008 for the 2008 hurricanes. This ensures that 
SBA first helps true small businesses and those ``pioneer'' businesses 
that were the first to re-open after the disaster. The program would 
end on December 31, 2010.
  This program makes a difference because for some businesses, 
depending on the loan term and loan amount, their total principal/
interest payments could run as high as $1,000 per month. For example, 
for a $114,000 disaster loan with a 4 percent interest rate and a 25-
year term, a business could be paying as much as $400 in monthly 
interest. In one year, this adds up to $4,800 and almost $14,500 in 3 
years. While this is not a lot of money for Wall Street banks or 
Fortune 500 companies, $15,000 makes a major impact for a gas station 
with two employees, like Fleur de Lis, or a neighborhood restaurant 
with 10 employees. These businesses have seen their bottom lines shrink 
as others on Wall Street received extravagant bonuses. I, for one, 
believe it is time to help these Main Street businesses, as they are 
the backbone of our communities.
  My legislation also follows legislation approved by a previous 
Congress. The prior bill came after Hurricane Betsy devastated Florida, 
Louisiana and Mississippi in September 1965. According to Red Cross 
reports at the time, between 800,000 and 1 million people were 
adversely impacted by the hurricane. Before this storm, the only 
previous disaster of that magnitude was the 1937 Ohio-Mississippi River 
floods, which forced more than a million people from their homes. In 
total, Betsy destroyed more than 1,500 homes, damaged more than 
150,000, and damaged more than 2,000 trailers. Hurricane Betsy also 
destroyed 1,400 farm buildings and 2,600 small businesses. At the time, 
the Senate Committee on Public Works noted in Committee Report 89-917 
that, ``The overwhelming magnitude of the vicious storm, surprising 
even to experienced disaster workers, was more apparent every day as 
storm victims continued to register for long-term recovery help in 
rebuilding their lives and homes.''
  As part of the review to provide Hurricane Betsy victims appropriate 
assistance, including a field hearing in Louisiana, Congress determined 
that the massive scale of this disaster required targeted, disaster-
specific programs. In particular, Congress approved the Southeast 
Hurricane Disaster Relief Act of 1965, Public Law 89-339. This bill 
authorized various business, homeowner, and agricultural disaster 
assistance, including loans and temporary rental assistance. In its 
committee report on the legislation, which is referenced above, the 
Senate Committee on Public Works wrote, ``This bill contains what the 
committee believes is needed and necessary to give further aid to the 
disaster-stricken areas . . .  including special measures to help these 
States in the reconstruction and rehabilitation of devastated areas.'' 
Among other provisions, Section 3 of the bill authorized SBA to waive 
interest--for loans above $500--due on the loan over a period of 3 
years, but not to exceed $1,800 in interest. The bill was signed into 
law in November 1965 and Congress later approved $35 million to 
implement provisions in the Act.
  Just as with Hurricane Betsy in 1965, in 2005, Mississippi and 
Louisiana again saw a catastrophic disaster hit their businesses, 
farms, and homes. Everyone now knows the impact Hurricanes Katrina and 
Rita had on the New Orleans area and the southeast part of our State. 
Images from the devastation following these storms, and the 
subsequent Federal levee breaks, were transmitted across the country 
and around the world. Katrina ended up being the deadliest natural 
disaster in United States history, with 1,800 people killed--1,500 in 
Louisiana alone. Katrina was also the costliest natural

[[Page S486]]

disaster in U.S. history, with more than $81.2 billion reported in 
damage.

  In Louisiana, we had 18,000 businesses catastrophically destroyed and 
81,000 businesses economically impacted. I believe that, across the 
entire Gulf Coast, some estimates ran as high as 125,000 businesses 
impacted by Katrina and Rita. Many of these businesses, for various 
reasons, have not returned or re-opened. By mid-2007, Orleans Parish 
was still down 2,000 employers, or 23 percent of its pre-Katrina 
business level. Nearby St. Bernard Parish--which had up to 80 percent 
of its homes damaged--had the largest percentage decline of 48 percent 
fewer businesses open, according to Louisiana State University and the 
Louisiana Recovery Authority. These disasters were followed by the 2008 
hurricanes that hit the same areas in Texas and Louisiana. With this in 
mind, on September 25, 2009, I chaired a committee field hearing in 
Galveston, Texas. At this hearing, we received a progress report from 
Federal, State and local officials on the recovery from Hurricane Ike 
in 2008. We also heard from individual business owners in Galveston who 
were still struggling a year on from the hurricane.
  These Galveston business owners, the Bergeron's Fleur de Lis gas 
station, and many other ``pioneer'' businesses did choose to re-open 
and are now struggling to stay alive. As is clear from the Bergerons' 
story, these businesses have suffered from not one disaster, but three: 
Hurricane Katrina/Rita in 2005, Hurricane Gustav/Ike in 2008, and the 
economic downturn. My home State of Louisiana was slow to feel the 
brunt of the credit crunch and economic meltdown, but last year we 
began to see the drying up of investments and the shrinking of 
consumers' pocketbooks. I believe the special program implemented 
following Hurricane Betsy in 1965 would today greatly benefit 
businesses in these three states hardest hit by Katrina, Rita, Gustav 
and Ike. Given the urgent needs of many of these impacted businesses, I 
will be reaching out to my colleagues in Texas, Louisiana, and 
Mississippi to hopefully gain their support for quick passage of this 
assistance. While I recognize that these are the hardest hit states, I 
am also interested to hear from my other Gulf Coast colleagues on 
whether this program would benefit their impacted businesses as well.
  In closing, I would like to note that Congress has been generous in 
providing essential recovery funds following the 2005 and 2008 storms. 
However, as we approach the fifth anniversary of the 2005 disasters, we 
must now ensure that impacted businesses can make it past this 
anniversary--preventing thousands more workers from being unemployed or 
additional defaults on SBA disaster loans. One important way that this 
Congress can ensure that these workers remain employed and that these 
businesses survive, and even grow, would be to relieve some of the 
interest on these SBA disaster loans. For this reason, I urge my Senate 
colleagues to support this commonsense legislation which would make a 
difference for up to 22,000 Main Street business owners and their 
estimated 81,000 employees in the Gulf Coast.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2986

       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 ``Southeast Hurricanes Small 
     Business Disaster Relief Act of 2010''.

     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 ``covered disaster loan'' means a loan--
       (A) made under section 7(b) of the Small Business Act (15 
     U.S.C. 636(b));
       (B) for damage or injury caused by Hurricane Katrina of 
     2005, Hurricane Rita of 2005, Hurricane Gustav of 2008, or 
     Hurricane Ike of 2008; and
       (C) made to a business located in a declared disaster area;
       (3) the term ``declared disaster area'' means an area in 
     the State of Louisiana, the State of Mississippi, or the 
     State of Texas for which the President declared a major 
     disaster under section 401 of the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act (42 U.S.C. 5170) relating 
     to Hurricane Katrina of 2005, Hurricane Rita of 2005, 
     Hurricane Gustav of 2008, or Hurricane Ike of 2008;
       (4) the term ``program'' means the Southeast Hurricanes 
     Small Business Disaster Relief Program established under 
     section 3; and
       (5) the term ``small business concern'' has the meaning 
     given that term under section 3(a) of the Small Business Act 
     (15 U.S.C. 632(a)).

     SEC. 3. SOUTHEAST HURRICANES SMALL BUSINESS DISASTER RELIEF 
                   PROGRAM.

       (a) Program Established.--Subject to the availability of 
     appropriations, the Administrator shall establish a Southeast 
     Hurricanes Small Business Disaster Relief Program, under 
     which the Administrator may waive payment of interest by a 
     business on a covered disaster loan--
       (1) for not more than 3 years; and
       (2) in a total amount of not more than $15,000.
       (b) Priority of Applications.--The Administrator shall, to 
     the extent practicable, give priority to an application for a 
     waiver of interest under the program by a small business 
     concern--
       (1) with not more than 50 employees; or
       (2) that resumed business operations in--
       (A) a declared disaster area relating to Hurricane Katrina 
     of 2005 or Hurricane Rita of 2005, during the period 
     beginning on September 1, 2005, and ending on October 1, 
     2006; or
       (B) a declared disaster area relating to Hurricane Gustav 
     of 2008 or Hurricane Ike of 2008, during the period beginning 
     on September 1, 2008, and ending on January 1, 2009.
       (c) Termination of Program.--The Administrator may not 
     approve an application under the program after December 31, 
     2010.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the 
     Administrator such sums as may be necessary to carry out this 
     Act.
                                 ______