[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Pages 4567-4571]
[From the U.S. Government Publishing Office, www.gpo.gov]



      SMALL BUSINESS AND FARM ENERGY EMERGENCY RELIEF ACT OF 2001

  Mr. McCONNELL. I ask unanimous consent the Senate now proceed to the 
consideration of Calendar No. 21, S. 295.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 295) to provide emergency relief to small 
     businesses affected by significant increases in the prices of 
     heating oil, natural gas, propane, and kerosene, and for 
     other purposes.

  There being no objection, the Senate proceeded to consider the bill 
which had been reported from the Committee on Small Business, with an 
amendment to strike all after the enacting clause and inserting in lieu 
thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business and Farm 
     Energy Emergency Relief Act of 2001''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) a significant number of small businesses in the United 
     States, non-farm as well as agricultural producers, use 
     heating oil, natural gas, propane, kerosene, or electricity 
     to heat their facilities and for other purposes;
       (2) a significant number of small businesses in the United 
     States sell, distribute, market, or otherwise engage in 
     commerce directly related to heating oil, natural gas, 
     propane, and kerosene; and
       (3) sharp and significant increases in the price of heating 
     oil, natural gas, propane, or kerosene--
       (A) disproportionately harm small businesses 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 1983-1984, 1988-1989, 
     1996-1997, and 1999-2000; and
       (D) can be caused by a host of factors, including global or 
     regional supply difficulties, weather conditions, 
     insufficient inventories, refinery capacity, transportation, 
     and competitive structures in the markets, causes that are 
     often unforeseeable to those who own and operate small 
     businesses.

     SEC. 3. 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 (3) 
     the following:
       ``(4)(A) In this paragraph--
       ``(i) the term `heating fuel' means heating oil, natural 
     gas, propane, or kerosene; and
       ``(ii) the term `sharp and significant increase' shall have 
     the meaning given that term by the Administrator, in 
     consultation with the Secretary of Energy.
       ``(B) 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 sharp and 
     significant increase in the price of heating fuel or 
     electricity.
       ``(C) Any loan or guarantee extended pursuant to this 
     paragraph shall be made at the same interest rate as economic 
     injury loans under paragraph (2).
       ``(D) 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 applicant constitutes a major 
     source of employment in its surrounding area, as determined 
     by the Administration, in which case the Administration, in 
     its discretion, may waive the $1,500,000 limitation.
       ``(E) 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 pursuant to clause 
     (i), the Governor of a State in which a sharp and significant 
     increase in the price of heating fuel or electricity has 
     occurred may certify to the Administration that small 
     business concerns have suffered economic injury as a result 
     of such increase and are in need of financial assistance 
     which is not 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) 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 or electricity to a renewable or alternative 
     energy source, including agriculture and urban waste, 
     geothermal energy, solar energy, wind energy, and fuel 
     cells.''.
       (b) Conforming Amendments Relating to Heating Fuel and 
     Electricity.--Section 3(k) of the Small Business Act (15 
     U.S.C. 632(k)) is amended--
       (1) by inserting ``, sharp and significant increases in the 
     price of heating fuel or electricity'' after ``civil 
     disorders''; and
       (2) by inserting ``other'' before ``economic''.

     SEC. 4. 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 June 1, 2000, as the result of a sharp and significant 
     increase in energy costs or input costs from energy sources 
     occurring on or after June 1, 2000, 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 it 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.) made to meet the needs resulting from natural disasters 
     shall be available to carry out the amendments made by 
     subsection (a).

     SEC. 5. GUIDELINES.

       Not later than 30 days after the date of enactment of this 
     Act, the Administrator of the Small Business Administration 
     and the

[[Page 4568]]

     Secretary of Agriculture shall each issue such guidelines as 
     the Administrator and the Secretary, as applicable, 
     determines to be necessary to carry out this Act and the 
     amendments made by this Act.

     SEC. 6. REPORTS.

       (a) Small Business.--Not later than 18 months after the 
     date of final publication by the Administrator of the Small 
     Business Administration of the guidelines issued under 
     section 5, the Administrator shall submit to the Committee on 
     Small Business of the Senate and the Committee on Small 
     Business of the House of Representatives, a report on the 
     effectiveness of the program established under section 
     7(b)(4) of the Small Business Act, as added by this Act, 
     including--
       (1) the number of small businesses that applied to 
     participate in the program and the number of those that 
     received loans under the program;
       (2) the dollar value of those loans;
       (3) the States in which the small business concerns that 
     participated in the program are located;
       (4) the type of heating fuel or energy that caused the 
     sharp and significant increase in the cost for the 
     participating small business concerns; and
       (5) recommendations for improvements to the program, if 
     any.
       (b) Agriculture.--Not later than 18 months after the date 
     of final publication by the Secretary of Agriculture of the 
     guidelines issued under section 5, the Secretary shall submit 
     to the Committees on Small Business and Agriculture, 
     Nutrition, and Forestry of the Senate and the Committees on 
     Small Business and Agriculture of the House of 
     Representatives, a report on the effectiveness of loans made 
     available as a result of the amendments made by section 4, 
     together with recommendations for improvements to the loans, 
     if any.

     SEC. 7. EFFECTIVE DATE.

       (a) Small Business.--The amendments made by this Act shall 
     apply during the 2-year period beginning on the date of final 
     publication of guidelines under section 5 by the 
     Administrator, with respect to assistance under section 
     7(b)(4) of the Small Business Act (15 U.S.C. 636(b)), as 
     added by this Act, to economic injury suffered or likely to 
     be suffered as the result of--
       (1) sharp and significant increases in the price of heating 
     fuel occurring on or after November 1, 2000; or
       (2) sharp and significant increases in the price of 
     electricity occurring on or after June 1, 2000.
       (b) Agriculture.--The amendments made by section 4 shall 
     apply during the 2-year period beginning on the date of final 
     publication of guidelines under section 5 by the Secretary of 
     Agriculture.


                           Amendment No. 147

  Mr. McCONNELL. Senator Enzi has an amendment at the desk and I ask 
for its consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Kentucky [Mr. McConnell], for Mr. Enzi, 
     proposes an amendment numbered 147.

  Mr. McCONNELL. I ask unanimous consent to dispense with the reading 
of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To include cogeneration as an alternative energy source)

       On page 10, line 2, insert ``cogeneration,'' before ``solar 
     energy''.

  Mr. McCONNELL. Mr. President, I ask unanimous consent the amendment 
be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 147) was agreed to.
  Mr. McCONNELL. I ask unanimous consent the committee substitute, as 
amended, be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, on February 28, 2001, the Committee on Small 
Business considered and voted unanimously, 18-0, to report the ``Small 
Business and Farm Energy Emergency Relief Act of 2001'' (S. 295) to the 
full Senate. This legislation is designed to assist small businesses 
and farms to recover from economic injuries resulting from sharp and 
significant increases in the price of heating oil, natural gas, 
propane, kerosene, or electricity. S. 295 would permit the Small 
Business Administration (SBA) to expand its Economic Injury Disaster 
Loan Program and the Department of Agriculture to expand its Emergency 
Loan Program so that small businesses and farms could apply for 
economic injury loans when they are suffering from the significant 
increases in energy prices.
  At the time the Committee on Small Business filed the report on S. 
295 with the Senate, the Congressional Budget Office (CBO) had not 
completed its cost estimate on the legislation. Under rule 
XXVI(11)(A)(1) of the Standing Rules of the Senate, the Committee is 
required to provide an estimate of the cost of the legislation. The CBO 
cost estimate dated March 21, 2001, provides the cost estimate for S. 
295.
  Therefore, Mr. President, I ask unanimous consent that the CBO cost 
estimate on S. 295 be considered part of the official record of the 
bill and the report with the transmittal letter dated March 21, 2001, 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, March 21, 2001.
     Hon. Christopher S. Bond,
     Chairman, Committee on Small Business,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 295, the Small 
     Business and Farm Energy Emergency Relief Act of 2001.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Rachel 
     Milberg.
           Sincerely,
                                                 Barry B. Anderson
                                   (For Dan L. Crippen, Director).
       Enclosure.


               congressional budget office cost estimate

     S. 295--Small Business and Farm Energy Emergency Relief Act 
         of 2001
       Summary: S. 295 would expand certain loan programs 
     administered by the Small Business Administration (SBA) and 
     the U.S. Department of Agriculture (USDA). Under current law, 
     SBA provides loans to small businesses that suffer the 
     effects of a natural disaster, and USDA provides similar 
     loans to family farms. S. 295 would expand these two programs 
     to authorize loans to small businesses and family farms to 
     recover from economic injuries resulting from sharp and 
     significant increases in the price of electricity, heating 
     oil, natural gas, propane, or kerosene. The bill would 
     authorize SBA and USDA to provide loans for this purpose for 
     two years.
       CBO estimates that implementing S. 295 would cost $51 
     million over the 2002-2006 period, subject to appropriation 
     of the necessary amounts. CBO estimates that enacting S. 295 
     would not affect direct spending or receipts; therefore, pay-
     as-you-go procedures would not apply. S. 295 contains no 
     intergovernmental or private-sector mandates as defined in 
     the Unfunded Mandates Reform Act (UMRA) and would not affect 
     the budgets of state, local, or tribal governments.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of S. 295 is shown in the following table. 
     The costs of this legislation fall within budget functions 
     450 (community and regional development) and 350 
     (agriculture).

------------------------------------------------------------------------
                                By fiscal year, in millions of dollars--
                               -----------------------------------------
                                 2001   2002   2003   2004   2005   2006
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION
 
Baseline Spending Under
 Current Law:
  Estimated Authorization         190    197    201    207    212    219
   Level \1\..................
  Estimated Outlays...........    220    210    200    206    211    218
Proposed Changes:
  Estimated Authorization           0     24     24      1      1      1
   Level......................
  Estimated Outlays...........      0      6     27     13      4      1
Spending Under S. 295:
  Estimated Authorization         190    221    225    208    213    220
   Level......................
  Estimated Outlays...........    220    216    227    219    215    219
------------------------------------------------------------------------
\1\ The 2001 level is the amount appropriated for that year for SBA's
  Disaster Loan Program and the USDA's Emergency Loan Program. The
  amounts shown for 2002 through 2006 are CBO levels that reflect annual
  increases for anticipated inflation.

       Basis of estimate: For this estimate, CBO assumes that S. 
     295 will be enacted near the end of fiscal year 2001, and 
     that SBA and USDA would begin offering these kinds of loans 
     in the first quarter of fiscal year 2002. In addition to the 
     administrative costs of providing more loans, the cost of 
     implementing S. 295 would depend on two factors: (1) the 
     amount of money that the government would lend to small 
     businesses and family farms--the program level, and (2) the 
     riskiness of the loans provided--the subsidy rate.
     Program level
       In 2000, SBA provided over 28,000 disaster loans to 
     homeowners and small businesses. Of this total, about 4,000 
     loans were to small businesses to recover from physical 
     damages caused by natural disasters, and about 1,000 of those 
     loans were to cover the cost of economic injuries suffered by 
     small businesses due to disasters. S. 295 would authorize an 
     indefinite number of additional loans to cover economic 
     injuries related to the prices of certain fuels. Based on 
     information from the SBA, CBO estimates that expanding the 
     SBA program to cover economic injuries to small businesses 
     that are caused by high energy prices would greatly increase 
     the number of SBA loans. We estimate the agency would make an 
     additional 10,000 new loans

[[Page 4569]]

     each year--about a one-third increase over the present number 
     of loans. Based on information from USDA, CBO estimates that 
     expanding the USDA program to cover energy-related costs 
     would add another 5,000 loans per year.
       Under current law, SBA loans to cover the cost of economic 
     injuries average about $5,000 per borrower, and we assume 
     that loans provided under S. 295 would be the same size. The 
     actual number of loans provided under the bill should be 
     either higher or lower than CBO's estimate. Similarly, the 
     average loan size could be either higher or lower than we 
     assume. But if there are fewer loans under the bill than we 
     estimate, it is likely that the average loan size would be 
     greater than $5,000 because many borrowers are likely to rely 
     on such loans to invest in physical assets that could help 
     cover the cost of energy bills.
       In total, CBO estimates that SBA would provide about $50 
     million in new loans in both 2002 and 2003, and USDA would 
     provide another $25 million in loans in each of these years. 
     These estimates are uncertain, and they are based on SBA's 
     anticipated demand for energy-related loans. The actual 
     number and value of loans made under the bill would depend on 
     the guidelines that SBA and USDA develop. These guidelines 
     would specify the qualification requirements for small 
     businesses applying for a loan, how the borrowed money could 
     be used, and the exact terms of the loans.
     Subsidy rate
       The Federal Credit Reform Act requires an upfront 
     appropriation for the subsidy costs of credit programs. The 
     subsidy cost of this proposed program would be the estimated 
     long term cost to the government of these loans, calculated 
     on a net present value basis, excluding administrative costs.
       Under current law, the SBA program has an estimated subsidy 
     rate of about 17 percent. This rate includes loans to 
     homeowners to cover the cost of physical damages caused by 
     natural disasters, loans to business owners to cover the cost 
     of such physical damages, and loans to business owners to 
     cover the cost of economic injuries caused by natural 
     disasters. Those loans to small businesses have an estimated 
     subsidy rate of 20 percent. Of these three types of loans, 
     the economic injury loans involve the greatest amount of 
     risk. In addition, because business owners generally can 
     foresee higher energy prices better than natural disasters, 
     CBO expects that loans provided under S. 295 would entail 
     more risk than loans currently provided by SBA. CBO estimates 
     that loans provided by SBA to cover economic injuries related 
     to energy prices would involve a subsidy rate of about 20 
     percent.
       The USDA loan program currently has an estimated subsidy 
     rate of 25 percent, and CBO estimates that the loans provided 
     by USDA to cover economic injuries related to energy prices 
     would not affect this subsidy rate.
     Administrative costs
       Based on information from SBA, CBO estimates that the cost 
     of providing these loans over the authorized two-year period 
     would equal about 10 percent of the program level. CBO 
     estimates that it would cost an additional $1 million each 
     year to administer the existing loans after the two-year 
     authorization period ends, or a total of $11 million over the 
     2002-2006 period, subject to the availability of appropriated 
     funds.
       Pay-as-you-go considerations: None.
       Intergovernmental and private-sector impact: S. 295 
     contains no intergovernmental or private-sector mandates as 
     defined in UMRA and would not affect the budgets of state, 
     local, or tribal governments.
       Estimate prepared by: Federal Costs: Rachel Milberg. Impact 
     on State, Local, and Tribal Governments: Shelley Finlayson. 
     Impact on the Private Sector: Lauren Marks.
       Estimate approved by: Peter H. Fontaine, Deputy Assistant 
     Director for Budget Analysis.

  Mr. KERRY. Mr. President, today we are considering S. 295, the Small 
Business Energy Emergency Relief Act of 2001. I have waited weeks to 
bring this bill before the Senate, and so I am very pleased that we are 
voting on this bill today.
  I introduced this bill to address the significant price increases of 
heating fuels and electricity and the adverse impact those prices are 
having on our more than 24 million small businesses, small farmers 
included, and the self-employed. The support for this bill reflects how 
much small businesses in our States from Massachusetts on the east 
coast to California on the west coast--are feeling the sting of high 
heating and electricity bills.
  I thank my colleagues who are cosponsors. Senators Lieberman, Snowe, 
Bingaman, Landrieu, Johnson, Domenici, Levin, Wellstone, Jeffords, 
Harkin, Schumer, Clinton, Kohl, Edwards, Leahy, Baucus, Collins, Dodd, 
Bob Smith, Chafee, Bayh, Kennedy, Inouye, Daschle, Bond, Jack Reed, 
Corzine, Torricelli, Akaka, Cantwell, Murray, Cleland, Enzi, and 
Specter. I also thank Congressman Tom Udall of New Mexico for 
introducing the companion bill to this legislation, H.R. 1010, on March 
13th.
  As so many of my colleagues know, in addition to electricity, many 
small businesses are dependent upon heating oil, propane, kerosene or 
natural gas. They are dependent either because they sell or distribute 
the product, because they use it to heat their facilities, or because 
they use it as part of their business. The significant and unforseen 
rise in the price of these fuels over the past two years, compounded by 
cold snaps and slowed economic conditions this winter, threatens their 
economic viability.
  According to the Department of Energy, the cost of heating oil 
nationally climbed 72 percent from February 1999 to February 2000, the 
cost of natural gas climbed 27 percent from September 1999 to September 
2000 and 59 percent over the past year, and the cost of propane climbed 
54 percent from January 2000 to January 2001.
  As I said when I introduced this bill on February 8, the financial 
falter or failure of small businesses has the potential to extend far 
beyond the businesses themselves, and we must do what we can to 
mitigate any damage. Jobs alone give us enough reason to get involved 
and minimize the number of small business disruptions or failures 
because they provide more than 50 percent of private-sector jobs.
  My bill, the Small Business Energy Emergency Relief Act of 2001, 
would provide emergency relief, through affordable, low-interest Small 
Business Administration Economic Injury Disaster Loans, EIDLs, and 
loans through the Department of Agriculture's Emergency Loan program, 
to small businesses and small farms that have suffered direct economic 
injury, or are likely to suffer direct economic injury, from the 
significant increases in the prices of four heating fuels heating oil, 
propane, kerosene, and natural gas or electricity.
  Initially, this legislation covered four heating fuels, addressing 
the needs of both urban and rural small businesses. However, I listened 
to and worked closely with colleagues on both sides of the aisle to 
address their concerns. Consequently, we made the following changes, 
some of which I completely support and consider real improvements to 
the bill and good public policy, and some of which I don't entirely 
agree with but have accepted in the spirit of compromise. Let me go 
through the changes. I have already mentioned some of them in 
describing the basic legislation.
  I incorporated a proposal by Senators Boxer and Feinstein to include 
electric energy in the scope of the bill. I agree with this. There are 
more and more small businesses around the country being hurt by the 
spike in electricity prices, and I think they too should have access to 
affordable loans to help them through these difficult times.
  I incorporated a proposal by Senators Kohl and Harkin to extend 
similar disaster loan assistance for these purposes to small farms and 
small agricultural producers through the Department of Agriculture's 
Emergency Loan program. I agree with this, and I am glad we found a way 
to help small farms.
  I incorporated a proposal by Senator Levin to allow the loan proceeds 
from the SBA disaster loans to be used for small businesses to convert 
their systems from using heating fuels to using renewable or 
alternative energy sources. This assistance was also supposed to be 
available to small farms and small agribusinesses through the USDA's 
emergency loans, but members of the Agricultural Committee objected. 
It's unfortunate that this assistance won't be available to small farms 
because I think we should encourage all industries to use renewable 
energy.
  I incorporated a proposal by Senator Enzi to expand Senator Levin's 
amendment by including ``co-generation'' in the list of renewable or 
alternative energy sources. The addition of ``co-generation'' is to 
allow small businesses to invest in co-generation capacity to enhance 
efficiency and, as a result, reduce fuel consumption, save money and 
reduce pollution. I have some concerns

[[Page 4570]]

about the addition of ``co-generation.'' First, it changes the scope of 
the Levin amendment by adding an efficiency technology to a list of 
what are largely renewable energy technologies. Second, ``co-
generation'' is a broad term that can include different fuels, 
different technologies, and result in varying levels of efficiency 
gains. Because the bill does not establish specific performance 
standards for efficiency gains resulting from co-generation, I will 
watch closely over the coming two years to learn who participates and 
what kind of efficiency gains result, and to consider changes to the 
provision. It is my expectation that the program will only assist 
projects that will reduce energy consumption and pollution below 
business-as-usual levels. Third, while the bill is absolutely clear on 
this point, I want to reiterate that nothing in the bill exempts small 
businesses that participate in this program from compliance with all 
local, state and Federal permitting requirements, and public health and 
environmental standards. Senator Enzi hopes that this language will 
help facilities add co-generation capacity, increase efficiency, save 
fuel, save money and reduce pollution, and I can support that goal. I 
want to thank my friend from Wyoming for working with me on his 
amendment, recognizing my concerns and finding acceptable language.
  I also incorporated a proposal by Senator Bond to sunset the program 
after two years, and a study of the program's usage to help Congress 
assess the merits of reauthorization. I preferred to establish a 
permanent program because, based on past experiences, I firmly believe 
our energy problems will persist for more than two years and the 
assistance should be available to small businesses when they really 
need it rather than waiting for Congress to act again. However, Senator 
Bond and I try very hard to work in a bi-partisan fashion, so I have 
agreed to the two-year sunset date with every intention of 
reauthorizing this program if it proves successful in helping small 
businesses. I would like to add that I expect the SBA, when it reports 
to our Committee on the program, to include as much information as 
possible about loans approved for small businesses to convert their 
energy systems to use co-generation or urban waste. The purpose of 
Senator Levin's proposal was to encourage less pollution and less 
fossil fuel consumption, not more, which I fully support, and I plan to 
monitor any relevant projects.
  Lastly, I would like to comment on the Congressional Budget Office's 
cost estimate of this bill, which will be published today. While I 
understand that CBO uses very conservative assumptions in its estimates 
in general, I question its cost estimate of this particular bill. I do 
agree with CBO that this program is genuinely needed and that small 
businesses in many parts of the country will apply for these loans. 
However, I question the assumption that the number of economic injury 
loans SBA makes will jump from the current level of 1,000 per year to 
10,000 per year. If they do, it will only reinforce the need for this 
assistance, and not be an argument for opposing this program, but the 
projection seems on the high side.
  And I disagree with CBO's assertion that ``many borrowers are likely 
to rely on such loans to invest in physical assets that could help 
cover the cost of energy bills.'' The legislation does allow small 
businesses to use the proceeds of SBA economic injury disaster loans 
for converting their systems to alternative or renewable energy 
sources, but they are not eligible for a loan unless they have also 
suffered significant economic injury due to the significant increase in 
energy prices and can't meet their financial obligations. While the 
loan proceeds may be used for such purposes if they convert to 
renewable or alternative energy systems, I believe the primary use of 
the loan proceeds will be to provide small businesses with working 
capital to meet their increased financial obligations. CBO's 
assumption, which I believe to be misguided, drives up the cost 
estimate of this program.
  I thank my colleagues for their input and cooperation. I believe it 
made the Small Business and Farm Energy Relief Emergency Act a better 
bill for those who need the assistance. This legislation will help 
those who have nowhere else to turn. We've got the tools at the SBA and 
USDA to assist them, and I believe it's more than justified, if not 
obligatory, to use disaster loan programs to help these small 
businesses. Further, by providing assistance in the form of loans which 
are repaid to the Treasury, we help reduce the Federal emergency and 
disaster costs, compared to other forms of disaster assistance, such as 
grants.
  I urge my colleagues to support this legislation. SBA's programs make 
recovery affordable for small business owners, and with the right 
support, can help mitigate the cost of significant economic disruption 
in your states caused when affected small businesses falter or fail, 
leading to job lay-offs and unstable tax bases. I also ask our friends 
in the House to act quickly and to support this legislation. Again, I 
thank Congressman Tom Udall for his leadership on this issue in the 
House, and I thank his colleagues Congresswoman Sue Kelly, 
Congresswoman Grace Napolitano, and Congressman Mark Udall for their 
early support of this legislation.
  Mr. McCONNELL. I ask unanimous consent the bill be read the third 
time and passed, the motion to reconsider be laid upon the table, and 
any statements relating to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 295), as amended, was read the third time and passed, as 
follows:

                                 S. 295

         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 and Farm 
     Energy Emergency Relief Act of 2001''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) a significant number of small businesses in the United 
     States, non-farm as well as agricultural producers, use 
     heating oil, natural gas, propane, kerosene, or electricity 
     to heat their facilities and for other purposes;
       (2) a significant number of small businesses in the United 
     States sell, distribute, market, or otherwise engage in 
     commerce directly related to heating oil, natural gas, 
     propane, and kerosene; and
       (3) sharp and significant increases in the price of heating 
     oil, natural gas, propane, or kerosene--
       (A) disproportionately harm small businesses 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 1983-1984, 1988-1989, 
     1996-1997, and 1999-2000; and
       (D) can be caused by a host of factors, including global or 
     regional supply difficulties, weather conditions, 
     insufficient inventories, refinery capacity, transportation, 
     and competitive structures in the markets, causes that are 
     often unforeseeable to those who own and operate small 
     businesses.

     SEC. 3. 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 (3) 
     the following:
       ``(4)(A) In this paragraph--
       ``(i) the term `heating fuel' means heating oil, natural 
     gas, propane, or kerosene; and
       ``(ii) the term `sharp and significant increase' shall have 
     the meaning given that term by the Administrator, in 
     consultation with the Secretary of Energy.
       ``(B) 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 sharp and 
     significant increase in the price of heating fuel or 
     electricity.
       ``(C) Any loan or guarantee extended pursuant to this 
     paragraph shall be made at the same interest rate as economic 
     injury loans under paragraph (2).
       ``(D) 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 applicant constitutes a major 
     source of employment in its surrounding area, as determined 
     by the Administration, in which case the Administration, in 
     its discretion, may waive the $1,500,000 limitation.

[[Page 4571]]

       ``(E) 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 pursuant to clause 
     (i), the Governor of a State in which a sharp and significant 
     increase in the price of heating fuel or electricity has 
     occurred may certify to the Administration that small 
     business concerns have suffered economic injury as a result 
     of such increase and are in need of financial assistance 
     which is not 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) 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 or electricity to a renewable or alternative 
     energy source, including agriculture and urban waste, 
     geothermal energy, cogeneration, solar energy, wind energy, 
     and fuel cells.''.
       (b) Conforming Amendments Relating to Heating Fuel and 
     Electricity.--Section 3(k) of the Small Business Act (15 
     U.S.C. 632(k)) is amended--
       (1) by inserting ``, sharp and significant increases in the 
     price of heating fuel or electricity'' after ``civil 
     disorders''; and
       (2) by inserting ``other'' before ``economic''.

     SEC. 4. 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 June 1, 2000, as the result of a sharp and significant 
     increase in energy costs or input costs from energy sources 
     occurring on or after June 1, 2000, 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 it 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.) made to meet the needs resulting from natural disasters 
     shall be available to carry out the amendments made by 
     subsection (a).

     SEC. 5. GUIDELINES.

       Not later than 30 days after the date of enactment of this 
     Act, the Administrator of the Small Business Administration 
     and the Secretary of Agriculture shall each issue such 
     guidelines as the Administrator and the Secretary, as 
     applicable, determines to be necessary to carry out this Act 
     and the amendments made by this Act.

     SEC. 6. REPORTS.

       (a) Small Business.--Not later than 18 months after the 
     date of final publication by the Administrator of the Small 
     Business Administration of the guidelines issued under 
     section 5, the Administrator shall submit to the Committee on 
     Small Business of the Senate and the Committee on Small 
     Business of the House of Representatives, a report on the 
     effectiveness of the program established under section 
     7(b)(4) of the Small Business Act, as added by this Act, 
     including--
       (1) the number of small businesses that applied to 
     participate in the program and the number of those that 
     received loans under the program;
       (2) the dollar value of those loans;
       (3) the States in which the small business concerns that 
     participated in the program are located;
       (4) the type of heating fuel or energy that caused the 
     sharp and significant increase in the cost for the 
     participating small business concerns; and
       (5) recommendations for improvements to the program, if 
     any.
       (b) Agriculture.--Not later than 18 months after the date 
     of final publication by the Secretary of Agriculture of the 
     guidelines issued under section 5, the Secretary shall submit 
     to the Committees on Small Business and Agriculture, 
     Nutrition, and Forestry of the Senate and the Committees on 
     Small Business and Agriculture of the House of 
     Representatives, a report on the effectiveness of loans made 
     available as a result of the amendments made by section 4, 
     together with recommendations for improvements to the loans, 
     if any.

     SEC. 7. EFFECTIVE DATE.

       (a) Small Business.--The amendments made by this Act shall 
     apply during the 2-year period beginning on the date of final 
     publication of guidelines under section 5 by the 
     Administrator, with respect to assistance under section 
     7(b)(4) of the Small Business Act (15 U.S.C. 636(b)), as 
     added by this Act, to economic injury suffered or likely to 
     be suffered as the result of--
       (1) sharp and significant increases in the price of heating 
     fuel occurring on or after November 1, 2000; or
       (2) sharp and significant increases in the price of 
     electricity occurring on or after June 1, 2000.
       (b) Agriculture.--The amendments made by section 4 shall 
     apply during the 2-year period beginning on the date of final 
     publication of guidelines under section 5 by the Secretary of 
     Agriculture.

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