Bill would also provide assistance to families impacted by Chinese-made
drywall
WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ -- United States Senate Committee
on Small Business and Entrepreneurship Chair Mary L. Landrieu, D-La., today
introduced "The Small Business Administration Disaster Recovery and Reform Act
of 2009" (S. 2731), a bill to reform the disaster recovery programs run by the
Small Business Administration (SBA).
"This legislation will have an immediate impact on recovering businesses in
the Gulf Coast and on families across the country impacted by Chinese-made
drywall," Senator Landrieu said. "Along with this recovery assistance, the
bill makes commonsense disaster reforms to ensure the SBA's effectiveness
after future disasters."
Following Hurricanes Katrina and Rita, impacted businesses -- including
"pioneer businesses" that were the first to open after the storms -- struggled
to secure assistance from the SBA, their insurance companies, or other
sources. These pioneer businesses served as second responders by quickly
reopening their doors following the disaster, helping to spur both commercial
and residential recovery. These local gas stations, grocery stores, or
restaurants serve as key indicators for homeowners looking to return, but are
often in need of immediate, short-term capital to reopen, purchase inventory
or pay employees.
To provide targeted SBA assistance for these pioneer businesses, Senator
Landrieu created a short-term $150,000 expedited loan program in the 2008 Farm
Bill to serve as bridge assistance while these businesses wait for SBA loans
or insurance proceeds. S. 2731 improves the Pioneer Business Recovery Program
by increasing loan limits from $150,000 to $250,000 and allowing the SBA to
activate the program as needed for both major and catastrophic disasters. This
would ensure that the SBA can address the needs of these pioneer businesses
and spur immediate recovery in local neighborhoods.
"Every disaster is different and could range from a disaster on the scale of
Hurricane Katrina or September 11th, to an ice storm or drought. The
modification in my bill would allow the SBA additional options and flexibility
in the kinds of relief they can offer a community," Senator Landrieu said. "We
must ensure that the SBA has the tools necessary to help our second responders
-- these pioneer business owners who reopen the local hardware store or gas
station immediately following a disaster."
The bill also provides assistance to help homeowners affected by toxic
Chinese-made drywall. In July, Senators Landrieu, Bill Nelson, Mark Warner and
Jim Webb sent a letter to the SBA requesting a review of their authority to
provide assistance to homeowners with defective drywall. Last week, the SBA
responded that under the current law the agency did not have the authority to
provide assistance for this type of disaster. S. 2731 would authorize the SBA
to provide homeowner assistance for the repair or replacement of defective
drywall in areas declared a disaster by a Governor.
"Many families in Louisiana and across the country are seeing their dream
homes turn into nightmares," Senator Landrieu said. "Toxic fumes causing
severe health problems are making these homes virtually unlivable. While I
believe that the primary financial burden of replacing the defective drywall
should be borne by the manufacturers of the product, there is a role that the
Federal government should play in helping the impacted families. This
legislation allows the SBA to provide immediate aid to homeowners by helping
them replace this defective product from their homes."
The bill also includes:
-- 8(a) Extension: This provision would extend, for 2 years, eligibility
for Gulf Coast businesses impacted by Katrina or Rita to participate
in
the SBA 8(a) program.
-- State Bridge Loan Guarantee Program: This section would authorize SBA
to
guarantee approved state bridge loan programs following a major
disaster. This would enhance existing Federal-State partnerships on
bridge loans and allow states to provide more assistance following a
disaster.
-- Coordination Between the SBA and the U.S. Department of Agriculture
(USDA) Disaster Programs: This provision requires the SBA to report
within 120 days on gaps in small business assistance between the USDA
and the SBA disaster programs. The SBA, in consultation with the USDA,
must report on any legislative changes needed to improve these
programs.
-- Increase the SBA Loan Limits: This section increases the SBA disaster
home loans from $40,000 to $80,000 for personal property and from
$200,000 to $400,000 for repair or replacement of a primary residence.
It also increases SBA disaster business loans from $2 million to $4
million.
A section-by-section review of Senator Landrieu's bill can be viewed by
clicking here.
To view a copy of the letter sent to the SBA, please click here.
To view a copy of the SBA's response, please click here.
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship
Vicki Ekstrom, +1-202-224-9431, Victoria_Ekstrom@sbc.senate.gov or Richard
Carbo, +1-202-224-3655, Richard_Carbo@sbc.senate.gov both of the Office of the
U.S. Senate Committee on Small Business & Entrepreneurship
