09/11/08 Business Start-up Hurdles in Underserved Communities: Access to Venture Capital and Entrepreneurship Training Hearing
09/09/08 Opportunities and Challenges for Women Entrepreneurs on the 20th Anniversary of the Women's Business Ownership Act Roundtable
07/30/08 S.3362, A bill to reauthorize and improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs Markup
06/25/08 Examining Solutions to Cope with the Rise in Home Heating Oil Prices Hearing
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January 4, 2007
Kerry Statement on the Small Business Disaster Response and Loan Improvement Act of 2007
Mr. President, 16 months after Hurricane Katrina struck the Gulf Coast, small business owners in New Orleans and across Louisiana are still struggling to keep their doors open and their employees working. In those 16 months, I have worked with Senators Snowe, Landrieu, and Vitter to produce a comprehensive package to reform the SBA’s Disaster Assistance program. The SBA’s failed response in a time of unmatched need demonstrated to everyone that this program is broken and needs fixing.
Immediately after Hurricane Katrina hit, I introduced an amendment with Senator Landrieu to the fiscal year 2006 Commerce, Justice and Science appropriations bill to address the needs of Gulf Region small business and homeowners. The amendment was adapted with input from Chair Snowe, and a subsequent bipartisan amendment passed the Senate with a vote of 96-0. Although the entire Senate supported the amendment, it was stripped out of the bill in conference.
On September 30, 2005, I again worked with Chair Snowe and Senators Landrieu and Vitter to introduce a bipartisan proposal, the Small Business Hurricane Relief and Reconstruction Act of 2006 S. 1807. This proposal was opposed by the administration. In June, I introduced the Small Business Disaster Loan Reauthorization and Improvements Act of 2006, S. 3487 which once again attempted to comprehensively address the shortcomings of the SBA’s Disaster Assistance program. Again, the administration opposed this effort. In August, the Small Business Committee unanimously reported S. 3778, the Small Business Reauthorization and Improvements Act of 2006, which again put forward a bipartisan, comprehensive fix for this program. Finally, in December, just prior to the adjournment of the 109th Congress, yet another attempt was made at reaching a bipartisan consensus with the introduction of S. 4097, the Small Business Disaster Response and Loan Improvements Act of 2006. The administration maintained its opposition to the fixes proposed in this bill.
Now, on the first day of this new Congress, I am introducing the Small Business Disaster Response and Loan Improvements Act of 2007. Once again, this bill enjoys bipartisan support by the chair and the ranking minority member of the Small Business Committee, as well as by the Democratic and Republican Senators of Louisiana, whose constituents continue to wait for their Government to respond appropriately. I am introducing this bill on the first day of the 110th Congress because as the incoming chair of the Small Business Committee, improving the Disaster Assistance program at the SBA is among my top priorities.
This bill includes directives for the SBA to create a private disaster loan program, to allow for lenders to issue disaster loans. To ensure that these loans are borrower-friendly, we provide authorization for appropriations so that the agency can subsidize the interest rates. In addition, the administrator is authorized to enter into agreements with private contractors in order to expedite loan application processing for direct disaster loans.
The bill also includes language directing SBA to create an expedited disaster assistance loan program to provide businesses with short-term loans so that they may keep their doors open until they receive alternative forms of assistance. The days immediately following a disaster are crucial for business owners—statistics show that once they close their doors, they likely will not open them again. These short-term loans should help prevent those doors from closing.
A presidential declaration of Catastrophic National Disaster will allow the administrator to offer economic injury disaster loans to adversely affected business owners beyond the geographic reach of the disaster area. In the event of a large-scale disaster, businesses located far from the physical reach of the disaster can be affected by the magnitude of a localized destruction. We saw this when the terrorist attacks of September 11, 2001 affected businesses from coast to coast, and we saw it again with the 2005 Gulf Coast hurricanes. Should another catastrophic disaster strike, the President should have the authority to provide businesses across the country with access to the same low-interest economic injury loans available to businesses within the declared disaster area.
Non-profit entities working to provide services to victims should be rewarded and given access to the capital they require to continue their services. To this end, the administrator is authorized to make disaster loans to non-profit entities, including religious organizations.
Construction and rebuilding contracts being awarded are likely to be larger than the current $2 million threshold currently applied to the SBA Surety Bond Program, which helps small construction firms gain access to contracts. This bill increases the guarantee against loss for small business contracts up to $5 million and allows the administrator to increase that level to $10 million, if deemed necessary.
The bill also provides for Small Business Development Centers to offer business counseling in disaster areas, and to travel beyond traditional geographic boundaries to provide services during declared disasters. To encourage Small Business Development Centers located in disaster areas to keep their doors open, the maximum grant amount of $100,000 is waived.
So that Congress may remain better aware of the status of the administration’s disaster loan program, this bill directs the administration to report to the Committee on Small Business and Entrepreneurship of the Senate and to the Committee on Small Business of the House of Representatives regularly on the fiscal status of the disaster loan program as well as the need for supplemental funding. The administration is also directed to report on the number of Federal contracts awarded to small businesses, minority-owned small businesses, women-owned businesses, and local businesses during a disaster declaration.
Finally, gas prices continue to fluctuate, and fuel-dependent small businesses are struggling with the cost of energy. This bill provides relief to small business owners during times of above average energy price increases, authorizing energy disaster loans through the Small Business Administration and the United States Department of Agriculture to companies that are dependent on fuel.
In the 16 months since Katrina struck, I have visited New Orleans three times. I have met with the lifeblood of that city—its small business owners—the shop owners on Bourbon Street and on Magazine Street who make that city unique. The people of New Orleans are resilient, and they remain hopeful; they are keeping their businesses open despite tourism that has been slow to return and despite a government response that was painfully slow to arrive. Sixteen months is too long a time to wait to reform and improve a program that could have breathed relief into this city’s economy during a time of desperation. As this new Congress begins, I call on my colleagues to support this legislation, a bipartisan labor of more than a year’s worth of negotiations. The tools offered within this bill will go a long way toward heading off another Katrina-like response to any future catastrophic disaster.
Mr. President, I ask unanimous consent that the text of the bill be printed in the record.