[Congressional Record (Bound Edition), Volume 147 (2001), Part 15]
[Extensions of Remarks]
[Pages 21806-21807]
[From the U.S. Government Publishing Office, www.gpo.gov]



   AMERICAN SMALL BUSINESS EMERGENCY RELIEF AND RECOVERY ACT OF 2001

                                 ______
                                 

                        HON. DONALD A. MANZULLO

                              of illinois

                    in the house of representatives

                       Tuesday, November 6, 2001

  Mr. MANZULLO. Mr. Speaker, I am pleased to join with my good friends, 
Representatives Jim Moran and Jerrold Nadler in introducing the 
American Small Business Emergency Relief and Recovery Act of 2001. The 
purpose of this emergency legislation is to help small businesses meet 
their payments on existing debts, finance their businesses, and 
maintain jobs in the aftermath of the terrorist attacks on September 11 
by strengthening and expanding access to the Small Business 
Administration's (SBA) loan and management counseling programs.
  To help turn the economy around, this bill includes changes to two of 
SBA's main nondisaster lending programs in order to encourage borrowing 
and lending for new and growing small businesses that may otherwise be 
reluctant to start or expand their businesses in the post-September 11 
economy. This bill also includes provisions to aid our small business 
federal contractors facing increased costs such as when they have found 
it difficult to access federal facilities to work on existing contracts 
due to security constraints. Finally, this bill increase authorization 
levels for SBA's various technical assistance programs to insure that 
adequate individualized help is available to small businesses coping 
with the aftermath of the terrorist attacks.
  This bill includes changes that will be included in the manager's 
amendment in the nature of a substitute to the Senate counterpart of 
this legislation, introduced by the chairman and ranking member of the 
Senate Small Business and Entrepreneurship Committee, Senators John 
Kerry and Christopher ``Kit'' Bond (S. 1499). Most of the changes 
contained in the manager's amendment in the nature of a substitute to 
the original S. 1499 are technical in nature mainly to accommodate 
concerns raised by the Congressional Budget Office, the SBA, and the 
Office of Legislative Counsel. These changes have been developed 
jointly between the Senate and House Small Business Committees, and are 
identical, word for word.
  After two hearings and listening to dozens of small business owners 
across the Nation, small businesses in need of help fall into three 
categories for the purposes of this Act: (1) those suffering from 
direct, physical damage, (2) those suffering from indirect damage, and 
(3) those in need of general economic stimulus. This legislation is not 
the only source of help for our nation's small businesses. It is meant 
to complement--not supplant--the efforts undertaken by other 
congressional committees and the executive branch to revitalize our 
economy.
  For those small businesses still suffering from direct damage as a 
result of the terrorist attacks on September 11, this legislation first 
modifies the SBA's disaster loan program to deal with concerns raised 
by small businesses, particularly from the downtown Manhattan area. For 
small businesses located in the areas of New York, Virginia, or 
contiguous areas declared disaster areas, the bill increases loan 
amounts from $1.5 million to $6 million for both economic injury 
disaster loans and physical disaster business loans. It also increases 
the aggregate amount that a small business may borrow through the SBA 
from $1.5 million to $12 million. The bill increases the size standards 
for certain industries, in terms of number of employees or gross annual 
receipts and gives the SBA Administrator the authority to waive or 
increase a size standard through an expedited process. It also

[[Page 21807]]

defers the payments and forgives the interest on these loans for 2 
years.
  Second, for those small businesses suffering indirect damage, this 
legislation modifies the 7(a) or General Business guarantee loan 
program of the SBA. These are small businesses not physically damaged 
or destroyed or in the vicinity of such businesses, but affected 
because they are a supplier, service provider or complementary industry 
to any affected industry, especially the financial, hospitality, travel 
and tourism industries, or are dependent upon the business of a closed 
or suspended business or sector. These businesses would be eligible for 
7(a) Guaranteed Business Loans, under more unfavorable terms, including 
a reduced interest rate, elimination of the upfront borrower fee, a 
reduction of the lender's annual guarantee fee by half, and an increase 
in the government's guarantee percentage to 90 percent. This temporary 
change to the 7(a) program would sunset one year after enactment.
  In the third category of assistance, this bill contains a general 
economic stimulus for those small businesses in need of capital and 
investment financing, procurement assistance, or management counseling 
in the economic aftermath of September 11. There are incentives for 
small businesses and lenders to use the 7(a) program, the 504 Certified 
Development Company guarantee loan program, which is used for plant 
construction and expansion and equipment acquisition, and the Small 
Business Investment Company (SBIC) program.
  As an economic stimulus, the bill reduces by half the upfront 7(a) 
guarantee fee paid by the borrower; reduces the lender's annual 
guarantee fee from 0.5 to 0.25 percent for the life of the loan; 
establishes a government guarantee percentage of 85 percent on all such 
loans (regardless of size); and gives the SBA Administrator the 
authority to waive or increase a size standard. In addition, the bill 
eliminates the upfront 504 loan program guarantee fee of 0.5 percent 
paid by the borrower and reduces by half the borrower's annual 
guarantee fee for the life of the loan. These changes to the 7(a) and 
the 504 program would expire one year after enactment. The bill also 
raises the authorized program level of the SBIC program, the SBA's 
venture capital initiative, by $900 million to meet anticipated demand 
as other private sector sources for venture capital dry up.
  The legislation also establishes an expedited procedure whereby 
federal small business contractors can apply for an equitable 
adjustment to their contracts if costs have been incurred due to 
security or other measures resulting from the September 11 terrorist 
attacks. An adversely affected small business owner would first apply 
to the contracting officer for monetary relief. The contracting officer 
would work with the agency's Office of Small and Disadvantaged Business 
Utilization and the SBA to determine the amount of any monetary 
adjustment. A decision is required within 30 days. The provision 
establishes a $100 million fund at the SBA to pay for these contract 
adjustments. The program would sunset, permitting small businesses 11 
months after enactment to apply for the adjustment.
  The bill also authorizes additional funds for various SBA management 
assistance programs to help small business successfully utilize the 
temporary changes to the SBA loan guarantee programs as outlined above. 
It increases funding for Small Business Development Centers (SBDCs) by 
$25 million, of which $2.5 million will be available for businesses in 
New York's disaster area and $1.5 million for businesses in Virginia's 
disaster area. The funds would be used to provide free individualized 
assistance for small businesses adversely affected by the terrorist 
attacks. No matching state funds would be required.
  The bill increase funding for the Women's Business Centers Program by 
$2 million and also waives the non-Federal matching requirement. 
Funding for Microloan Technical Assistance is also increased by $5 
million for similar purposes. Lastly, the legislation increases funding 
for the Service Corps of Retired Executives (SCORE) by $2 million to 
provide free advice from experienced businesspersons to struggling 
small business owners dealing with the aftermath of the events of 
September 11.
  Finally, the SBA's Office of Advocacy is authorized in this bill to 
expend $500,000 to study and report on small businesses adversely 
impacted by the attacks of September 11, and measure the effect of this 
legislation on small businesses.
  This bipartisan bicameral legislation is endorsed and strongly 
supported by small business groups, including the U.S. Chamber of 
Commerce, National Small Business United, the Small Business 
Legislative Council, the National Association of Government Guaranteed 
Lenders (NAGGL), the National Association of Development Companies 
(NADCO), the Association of Women's Business Centers, the National 
Community Reinvestment Coalition, and the National Limousine 
Association.
  Mr. Speaker, I invite my colleagues to join me in passing this 
emergency legislation so that we can get assistance to needy small 
business owners as soon as possible.

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