HR 3073 IH

107th CONGRESS

1st Session

H. R. 3073

To provide assistance to small business concerns adversely impacted by the terrorist attacks perpetrated against the United States on September 11, 2001, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

October 10, 2001

Mr. MANZULLO (for himself, Mr. MORAN of Virginia, Mr. NADLER, Mr. FERGUSON, Mr. MEEKS of New York, Mr. WEINER, Mr. GRUCCI, and Mr. JOHNSON of Illinois) introduced the following bill; which was referred to the Committee on Small Business

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A BILL

To provide assistance to small business concerns adversely impacted by the terrorist attacks perpetrated against the United States on September 11, 2001, and for other purposes.

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 `American Small Business Emergency Relief and Recovery Act of 2001'.

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS- Congress finds that--

(1) the Nation's 25,000,000 small businesses employ more than 58 percent of the private workforce, and create 75 percent of all new jobs;

(2) as a result of the terrorist attacks on September 11, 2001, many small businesses nationwide were adversely affected--

(A) directly because--

(i) they are located in or near the World Trade Center or the Pentagon, or in a disaster area declared by the President or the Administrator;

(ii) they were closed or their business was suspended for National security purposes at the mandate of the Federal Government; or

(iii) they are located in an airport that has been closed; and

(B) indirectly because--

(i) they supplied or provided services to businesses that were located in or near the World Trade Center or the Pentagon;

(ii) they are a supplier, service provider, or complementary industry to any affected industry, in particular, the financial, hospitality, and travel industries; or

(iii) they are integral to or dependent upon the business of a closed or suspended business or business sector; and

(3) small business owners adversely impacted by the terrorist attacks are finding it difficult or impossible--

(A) to make loan payments on existing debts;

(B) to pay their employees;

(C) to pay their vendors;

(D) to purchase materials, supplies, or inventory;

(E) to pay their rent, mortgage, or other operating expenses; and

(F) to secure financing for their businesses.

(b) PURPOSE- The purpose of this Act is to strengthen the loan and investment programs of the Small Business Administration, in order to help small businesses to meet their existing obligations, finance their businesses, and maintain and create jobs, and thereby provide stability to the National economy.

SEC. 3. DISASTER LOANS AFTER TERRORIST ATTACKS.

(a) IN GENERAL- Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended by inserting immediately after paragraph (3) the following:

`(4) DISASTER LOANS AFTER TERRORIST ATTACKS OF SEPTEMBER 11, 2001-

`(A) LOAN AUTHORITY- In addition to any other loan authorized by this section, 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 a small business concern that has been directly affected and suffered, or that is likely to suffer, substantial economic injury as the direct result of the terrorist attacks perpetrated against the United States on September 11, 2001, including due to the closure or suspension of its business for National security purposes at the mandate of the Federal Government.

`(B) DEFERMENT OF LOAN PAYMENTS-

`(i) IN GENERAL- Notwithstanding any other provision of law, payments of principal and interest on a loan made under this paragraph or paragraph (1) as a result of the terrorist attacks perpetrated against the United States on September 11, 2001, shall be deferred, and no interest shall accrue with respect to such loan, during the 2-year period following the date of issuance of such loan.

`(ii) RESUMPTION OF PAYMENTS- At the end of the 2-year period described in clause (i), the payment of periodic installments of principal and interest shall be required with respect to such loan, in the same manner and subject to the same terms and conditions as would otherwise be applicable to any other loan made under this subsection.

`(C) REFINANCING EXISTING LOANS-

`(i) IN GENERAL- Any loan made under this subsection that was outstanding as to principal or interest on September 11, 2001, may be refinanced by a small business concern that is also eligible to receive a loan under this paragraph, and the refinanced amount shall be considered to be part of the new loan for purposes of this clause.

`(ii) NO EFFECT ON ELIGIBILITY- A refinancing under this subparagraph by a small business concern shall be in addition to any other loan eligibility for that small business concern under this Act.

`(D) TERMS- A loan under this paragraph shall be made at the same interest rate as economic injury loans under paragraph (2).

`(E) NO DISASTER DECLARATION REQUIRED- For purposes of assistance under this paragraph, no declaration of a disaster area is required for those small business concerns directly affected by the terrorist attacks perpetrated against the United States on September 11, 2001.

`(F) SIZE STANDARD ADJUSTMENTS-

`(i) FOR DECLARED DISASTER AREAS- Notwithstanding any other provision of law, for purposes of providing assistance under this paragraph to businesses located in areas of New York, Virginia, and the contiguous areas designated by the President or the Administrator as a disaster area following the September 11, 2001, terrorist attacks against the United States, a business shall be considered to be a `small business concern' if it meets otherwise applicable size regulations promulgated by the Administration, and, with respect to the applicable size standard it is--

`(I) a restaurant having not more than $8,000,000 in annual revenues;

`(II) a law firm having not more than $8,000,000 in annual revenues;

`(III) a certified public accounting business having not more than $8,000,000 in annual revenues;

`(IV) a performing arts business having not more than $8,000,000 in annual revenues;

`(V) a warehousing or storage business having not more than $25,000,000 in annual revenues;

`(VI) a contracting business having not more than $15,000,000 in annual revenues;

`(VII) a food manufacturing business having not more than 1,000 employees; or

`(VIII) an apparel manufacturing business having not more than 1,000 employees.

`(ii) AUTHORITY TO INCREASE OR WAIVE SIZE STANDARDS AND SIZE REGULATIONS- For purposes of providing assistance under this paragraph, at the discretion of the Administrator, the Administrator may increase or waive otherwise applicable size standards or size regulations with respect to businesses that are located in areas of New York, Virginia, or the contiguous areas designated by the President or the Administrator as a disaster area following the September 11, 2001, terrorist attacks against the United States.

`(iii) EXEMPTION FROM ADMINISTRATIVE PROCEDURES- The provisions of chapter 8 and subchapter II of chapter 5, of title 5, United States Code, shall not apply to any increase or waiver by the Administrator under clause (ii).

`(G) DEFINITION OF SUBSTANTIAL ECONOMIC INJURY- In this paragraph, the term `substantial economic injury' means an economic harm to a small business concern that results in the inability of the small business concern--

`(i) to meet its obligations on an ongoing basis;

`(ii) to pay its ordinary and necessary operating expenses; or

`(iii) to market, produce, or provide a product or service ordinarily marketed, produced, or provided by the small business concern.

`(5) INCREASED LOAN CAPS-

`(A) AGGREGATE LOAN AMOUNTS- Except as provided in subparagraph (B), and in addition to amounts otherwise authorized by this Act, the loan amount outstanding and committed to a borrower may not exceed--

`(i) with respect to a small business concern located in the areas of New York, Virginia, or the contiguous areas designated by the President or the Administrator as a disaster area following the September 11, 2001, terrorist attacks perpetrated against the United States--

`(I) $6,000,000 in total obligations under paragraph (1); and

`(II) $6,000,000 in total obligations under paragraph (4); and

`(ii) with respect to a small business concern that is not located in an area described in clause (i) and that is eligible for assistance under paragraph (4), $5,000,000 in total obligations under paragraph (4).

`(B) WAIVER AUTHORITY- The Administrator may, at the discretion of the Administrator, waive the aggregate loan amounts established under subparagraph (A).

`(6) EXTENDED APPLICATION PERIOD- Notwithstanding any other provision of law, the Administrator shall accept applications for assistance under paragraphs (1) and (4) until September 10, 2002, with respect to small business concerns adversely affected by the terrorist attacks perpetrated against the United States on September 11, 2001.

`(7) LIMITATION ON SALES OF LOANS- No loan made under paragraph (1) or (4) made with respect to adverse impact as a result of the terrorist attacks of September 11, 2001, shall be sold until 4 years after the date of the loan disbursement.

`(8) DEFINITION- For purposes of this subsection--

`(A) a small business concern is directly affected by the terrorist attacks perpetrated against the United States on September 11, 2001, if it--

`(i) is located in or near the World Trade Center or the Pentagon, or in a disaster area declared by the President or the Administrator related to those terrorist attacks;

`(ii) was closed or its business was suspended for National security purposes at the mandate of the Federal Government; or

`(iii) is located in an airport that has been closed; and

`(B) a small business concern is indirectly affected by the terrorist attacks perpetrated against the United States on September 11, 2001, if it--

`(i) supplied or provided services to small businesses that were located in or near the World Trade Center or the Pentagon, or in a disaster area declared by the President or the Administrator related to those terrorist attacks;

`(ii) is a supplier, service provider, or complementary industry to any affected industry, in particular, the financial, hospitality, and travel industries; or

`(iii) it is integral to or dependent upon the business of a closed or suspended business or business sector.'.

(b) CLERICAL AMENDMENTS- Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended in the undesignated matter at the end--

(1) by striking `, (2), and (4)' and inserting `and (2)'; and

(2) by striking `, (2), or (4)' and inserting `(2)'.

SEC. 4. EMERGENCY RELIEF LOAN PROGRAM.

Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:

`(31) TEMPORARY LOAN AUTHORITY FOLLOWING TERRORIST ATTACKS-

`(A) IN GENERAL- During the 1-year period beginning on the date of enactment of this

paragraph, the Administration may make loans under this subsection to a small business concern that has suffered, or that is likely to suffer, adverse impact.

`(B) LOAN TERMS- With respect to a loan under this paragraph--

`(i) for purposes of paragraph (2)(A), participation by the Administration shall be equal to 90 percent of the balance of the financing outstanding at the time of disbursement of the loan;

`(ii) no fee may be required or charged under paragraph (18);

`(iii) the applicable rate of interest shall not exceed a rate that is one percentage point above the prime lending rate;

`(iv) no such loan shall be made if the total amount outstanding and committed (by participation or otherwise) to the borrower under this paragraph--

`(I) would exceed $1,000,000; or

`(II) at the discretion of the Administrator, and upon notice to the Congress, would exceed $2,000,000, as necessary to provide relief in high-cost areas that have suffered adverse impact; and

`(v) upon request of the borrower, repayment of principal due on a loan made under this paragraph may be deferred during the 1-year period beginning on the date of issuance of the loan.

`(C) APPLICABILITY- The loan terms described in subparagraph (B) shall apply to a loan under this paragraph notwithstanding any other provision of this subsection, and except as specifically provided in this paragraph, a loan under this paragraph shall otherwise be subject to the same terms and conditions as any other loan under this subsection.

`(D) DEFINITION- For purposes of this paragraph, the term `adverse impact' means an economic harm to or disruption of the business operations of a small business concern as a direct or indirect result of the terrorist attacks perpetrated against the United States on September 11, 2001.'.

SEC. 5. BUSINESS LOAN AND INVESTMENT ASSISTANCE FOLLOWING TERRORIST ATTACKS.

(a) One-Year Suspension of Section 7(a) FEES- Section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)) is amended by adding at the end the following:

`(C) ONE-YEAR WAIVER OF FEES FOLLOWING TERRORIST ATTACKS- For loans approved on or after the date of enactment of the American Small Business Emergency Relief and Recovery Act of 2001, no fee may be collected or charged under this paragraph, and no fee shall accrue with respect to a borrower, during the 1-year period beginning on that date of enactment.'.

(b) ONE-YEAR INCREASE IN PARTICIPATION LEVELS- Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended--

(1) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraphs (B) and (E)'; and

(2) by adding at the end the following:

`(E) TEMPORARY PARTICIPATION LEVELS FOLLOWING TERRORIST ATTACKS- For loans approved on or after the date of enactment of the American Small Business Emergency Relief and Recovery Act of 2001, during the 1-year period beginning on that date of enactment--

`(i) the guarantee percentage specified by subparagraph (A)(i) shall be increased to 85 percent; and

`(ii) the guarantee percentage specified by subparagraph (A)(ii) shall be increased to 90 percent.'.

(c) One-Year Suspension of Section 504 Fees- Section 503 of the Small Business Investment Act of 1958 (15 U.S.C. 697) is amended--

(1) in subsection (b)(7)(A), by striking `which amount shall' and inserting `which amount shall not be assessed or collected with respect to financings made on or after the date of enactment of the American Small Business Emergency Relief and Recovery Act of 2001, and no amount shall accrue, during the 1-year period beginning on that date of enactment, and which amount shall otherwise'; and

(2) in subsection (d)(2), by adding at the end the following: `No fee may be assessed or collected under this paragraph with respect to financings made on or after the date of enactment of the American Small Business Emergency Relief and Recovery Act of 2001, and no fee shall accrue, during the 1-year period beginning on that date of enactment.'.

(d) BUDGETARY TREATMENT OF LOANS AND FINANCINGS- Any assistance made available under any loan issued by the Small Business Administration under section 7(a)(31) or 7(b)(4) of the Small Business Act (15 U.S.C. 636(a)) or any financings made under title III or V of the Small Business Investment Act of 1958 (15 U.S.C. 697a), as a result of this Act and the amendments made by this Act during the 1-year period beginning on the date of enactment of this Act, shall be excluded from any calculation of the subsidy rate with respect to the programs of the Small Business Administration under those provisions for purposes of the Federal Credit Reform Act of 1990.

SEC. 6. APPROVAL PROCESS.

Notwithstanding any other provision of law, and in order to make assistance provided under this Act available to all eligible small business concerns, the Administrator of the Small Business Administration may adopt such approval processes as the Administrator determines to be appropriate for the provision of assistance under the amendments made by sections 4 and 5.

SEC. 7. ADDITIONAL SBIC AUTHORITY.

Section 303 of the Small Business Investment Act of 1958 (15 U.S.C. 683) is amended by adding at the end the following:

`(k) AUTHORITY AFTER TERRORIST ATTACKS OF SEPTEMBER 11, 2001- Small business investment companies may issue leverage under this title for the purpose of providing assistance to small business concerns adversely impacted, directly or indirectly, by the terrorist attacks perpetrated against the United States on September 11, 2001.'.

SEC. 8. STUDY AND REPORT ON EFFECTS ON SMALL BUSINESS CONCERNS.

(a) STUDY-

(1) IN GENERAL- The Office of Advocacy of the Small Business Administration shall conduct annual studies for a 5-year period on the impact of the terrorist attacks perpetrated against the United States on September 11, 2001, on small business concerns, and the effects of assistance provided under this Act on such small business concerns.

(2) CONTENTS- The study conducted under paragraph (1) shall include information regarding--

(A) bankruptcies and business failures that occurred as a result of the events of September 11, 2001, as compared to those that occurred in 1999 and 2000;

(B) the loss of jobs, revenue, and profits in small business concerns as a result of those events, as compared to those that occurred in 1999 and 2000;

(C) the impact of assistance provided under this Act to small business concerns adversely affected or adversely impacted by those attacks, including information regarding whether--

(i) small business concerns that received such assistance would have remained in business without such assistance;

(ii) jobs were saved due to such assistance;

(iii) small business concerns recovered economically from those events; and

(iv) small business concerns that remained in business had increases in employment and sales since receiving assistance.

(b) REPORT- The Office of Advocacy shall submit a report to Congress on the studies required by subsection (a)(1), specifically addressing the requirements of subsection (a)(2) in September of each of fiscal years 2002 through 2006.

(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $125,000 for each of fiscal years 2002 through 2006.

SEC. 9. INCREASED AUTHORIZATIONS OF APPROPRIATIONS.

Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended by adding at the end the following:

`(j) SPECIAL AUTHORIZATIONS OF APPROPRIATIONS FOLLOWING TERRORIST ATTACKS- In addition to any other amounts authorized by this Act for any fiscal year, there are authorized to be appropriated to the Administration, to remain available until expended--

`(1) for fiscal year 2002 and each fiscal year thereafter, such sums as may be necessary to carry out paragraph (4) of section 7(b), including necessary loan capital and funds for administrative expenses related to making and servicing loans pursuant to that paragraph;

`(2) for fiscal year 2002 and each fiscal year thereafter, such sums as may be necessary to carry out paragraphs (2)(E), (18)(C), and (31) of section 7(a), including any funds necessary to offset fees and amounts waived under those provisions, necessary loan capital, and funds for administrative expenses;

`(3) for fiscal year 2002, such sums as may be necessary to carry out the 1-year suspension of fees under subsections (b)(7)(A) and (d)(2) of section 503 of the Small Business Investment Act of 1958, in response to the acts of terrorism perpetrated against the United States on September 11, 2001, including any funds necessary to offset fees and amounts waived under those provisions and including funds for administrative expenses; and

`(4) for fiscal year 2002, for assistance authorized by section 303(k) of the Small Business Investment Act of 1958--

`(A) $700,000,000 in purchases of participating securities; and

`(B) $200,000,000 in guarantees of debentures.'.