[Congressional Record Volume 157, Number 42 (Monday, March 28, 2011)]
[Senate]
[Pages S1896-S1898]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU (for herself, Mr. Wicker, and Mr. Cochran):
  S. 653. A bill to allow the Administrator of the Small Business 
Administration to create or save jobs by providing interest relief on 
certain outstanding disaster loans relating to damage caused by the 
2005 Gulf Coast hurricanes or the 2008 Gulf Coast hurricanes; 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; Hurricanes 
Gustav and Ike of 2008; and the Deepwater Horizon disaster of 2010. 
Almost 6 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. The region 
is also still reeling from the oil spill and subsequent Federal 
deepwater drilling moratorium. 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 needs 
this type of assistance. Small Business Administrator Karen Mills and I 
toured the Bergerons' business back in June 2009. 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 that June, the Bergerons were down to 2 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.
  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. And two years ago now, 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 in 
2009.
  The Bergerons' story is one I have heard from countless businesses. 
Coupled with their recovery from the 2005 and 2008 hurricanes, and more 
recently, the Deepwater Horizon oil spill and Federal deepwater 
drilling moratorium, 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, they are the businesses communities 
need the most because they serve as anchors. If residents see the 
Bergerons' 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 2011. This 
legislation would provide targeted assistance to as many as 11,000 
businesses in Louisiana, Mississippi, Alabama, 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 three years, helping to create or 
save up to 40,000 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 bill also 
includes a priority for applications from businesses suffering 
substantial economic harm from the Deepwater Horizon oil spill last 
year. The program would end on March 31, 2012.
  The Southeast Hurricanes Small Business Disaster Relief Act also 
includes provisions to help reduce the program's impact on the Federal 
deficit. First, the bill eliminates a duplicative program at the SBA. 
This program, the Gulf Coast Disaster Loan Refinancing Program, was 
created as part of the 2008 Farm Bill. Although it was created almost 
three years ago, the program has not received any appropriations nor 
has the SBA utilized the authority to refinance any disaster loans. It 
is my understanding this is because the program just re-amortizes the 
same debt of borrowers. Furthermore, any refinancing must not exceed 
the original loan amount and differ from the original terms of the 
loan. As a result, this program is not attractive to borrowers, lenders 
or the SBA. Our bill eliminates this program and creates one that will 
work better for all stakeholders. Next, the bill allows SBA the 
authority to get reimbursed by the party responsible for the Deepwater 
Horizon oil spill for any interest relief provided to businesses 
impacted by that disaster. This ensures that the taxpayers will be 
reimbursed for interest relief related to the Deepwater Horizon oil 
spill. I also note that this is

[[Page S1897]]

consistent with the claims process provided for in the Oil Pollution 
Act of 1990.
  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 
three 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 three 
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 alone in 
Louisiana. Katrina was also the costliest natural 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 Bergeron's 
story, these businesses have suffered from not one disaster, but three: 
Hurricane Katrina/Rita in 2005, Hurricane Gustav/Ike in 2008, and the 
Deepwater Horizon disaster. I believe the special program implemented 
following Hurricane Betsy in 1965 would today greatly benefit 
businesses in these four states hardest hit by Katrina, Rita, Gustav, 
Ike, and the Deepwater Horizon. 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 sixth 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 11,000 Main Street business owners and their 
estimated 40,000 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. 653

       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 2011''.

     SEC. 2. SOUTHEAST HURRICANES SMALL BUSINESS DISASTER RELIEF 
                   PROGRAM.

       (a) In General.--Section 12086 of the Food, Conservation, 
     and Energy Act of 2008 (Public Law 110-234; 122 Stat. 1422) 
     is amended to read as follows:

     ``SEC. 12086. SOUTHEAST HURRICANES SMALL BUSINESS DISASTER 
                   RELIEF PROGRAM.

       ``(a) Definitions.--In this section--
       ``(1) the term `covered area' means an area in the State of 
     Louisiana, the State of Mississippi, the State of Alabama, or 
     the State of Texas for which the President declared a major 
     disaster relating to Hurricane Katrina of 2005, Hurricane 
     Rita of 2005, Hurricane Gustav of 2008, or Hurricane Ike of 
     2008;
       ``(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 covered area;
       ``(3) the term `Deepwater Horizon oil spill' means the 
     blowout and explosion of the mobile offshore drilling unit 
     Deepwater Horizon that occurred on April 20, 2010, and 
     resulting hydrocarbon releases into the environment; and
       ``(4) the term `program' means the Southeast Hurricanes 
     Small Business Disaster Relief Program established under 
     subsection (b).
       ``(b) 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.
       ``(c) Priority of Applications.--The Administrator shall, 
     to the extent practicable, give priority to an application 
     for a waiver

[[Page S1898]]

     of payment of interest under the program by a small business 
     concern--
       ``(1) with not more than 50 employees;
       ``(2) that demonstrates substantial economic injury as a 
     result of the Deepwater Horizon oil spill; or
       ``(3) that resumed business operations--
       ``(A) during the period beginning on September 1, 2005 and 
     ending on October 1, 2006 in a covered area relating to 
     Hurricane Katrina of 2005 or Hurricane Rita of 2005; or
       ``(B) during the period beginning on September 1, 2008 and 
     ending on January 1, 2009 in a covered area relating to 
     Hurricane Gustav of 2008 or Hurricane Ike of 2008.
       ``(d) Reimbursement by Responsible Party.--The 
     Administrator may present a claim to the responsible party 
     (as defined in section 1001 of the Oil Pollution Act of 1990 
     (33 U.S.C. 2701)) for costs and expenses described in section 
     1012(a)(5) of the Oil Pollution Act of 1990 (33 U.S.C. 
     2712(a)(5)) relating to a waiver of interest under this 
     section for a business suffering a substantial economic 
     injury as a result of the Deepwater Horizon oil spill in 
     accordance with section 1013 of the Oil Pollution Act of 1990 
     (33 U.S.C. 2713).
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Administrator such sums 
     as may be necessary to carry out the program.
       ``(f) Termination of Program.--The Administrator may not 
     approve an application under the program after March 31, 
     2012.''.
       (b) Savings Clause.--A loan refinanced under section 12086 
     of the Food, Conservation, and Energy Act of 2008 (Public Law 
     110-234; 122 Stat. 1422) before the date of enactment of this 
     Act shall remain in full force and effect under the terms, 
     and for the duration, of the loan (including any option to 
     defer repayment).
       (c) Technical and Conforming Amendment.--The table of 
     contents in section 1(b) of the Food, Conservation, and 
     Energy Act of 2008 (Public Law 110-234; 122 Stat. 933) is 
     amended by striking the item relating to section 12086 and 
     inserting the following:

``Sec. 12086. Southeast Hurricanes Small Business Disaster Relief 
              Program.''.
                                 ______