H.R. 1614 (106th): Military Reservists Small Business Relief Act of 1999

106th Congress, 1999–2000. Text as of Apr 28, 1999 (Introduced).

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HR 1614 IH

106th CONGRESS

1st Session

H. R. 1614

To authorize the Small Business Administration to provide financial and business development assistance to military reservists’ small businesses, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

April 28, 1999

Mr. PHELPS (for himself, Ms. VELAZQUEZ, Mr. TALENT, Mrs. CHRISTENSEN, Mr. GONZALEZ, Mr. EVANS, Mr. CONYERS, Mr. SHOWS, Mr. BRADY of Pennsylvania, Mr. SKELTON, Mr. GUTIERREZ, Mr. BAIRD, Mr. MOORE, Mrs. MCCARTHY of New York, Mrs. NAPOLITANO, Mrs. JONES of Ohio, Mr. FROST, Mr. PASCRELL, and Mr. HINOJOSA) introduced the following bill; which was referred to the Committee on Small Business


A BILL

To authorize the Small Business Administration to provide financial and business development assistance to military reservists’ small businesses, 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 ‘Military Reservists Small Business Relief Act of 1999’.

SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RESERVISTS.

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

    ‘(n) REPAYMENT DEFERRED FOR ACTIVE DUTY RESERVISTS-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) ELIGIBLE RESERVIST- The term ‘eligible reservist’ means a member of a reserve component of the Armed Forces ordered to active duty during a period of military conflict.

        ‘(B) OWNER, MANAGER, OR KEY EMPLOYEE- An owner, manager, or key employee described in this subparagraph is an individual who--

          ‘(i) has not less than a 20 percent ownership interest in the small business concern described in subparagraph (D)(ii);

          ‘(ii) is a manager responsible for the day-to-day operations of such small business concern; or

          ‘(iii) is a key employee (as defined by the Administration) of such small business concern.

        ‘(C) PERIOD OF MILITARY CONFLICT- The term ‘period of military conflict’ means--

          ‘(i) a period of war declared by Congress;

          ‘(ii) a period of national emergency declared by Congress or by the President; or

          ‘(iii) a period of a contingency operation, as defined in section 101(a) of title 10, United States Code.

        ‘(D) QUALIFIED BORROWER- The term ‘qualified borrower’ means--

          ‘(i) an individual who is an eligible reservist and who received a direct loan under subsection (a) or (b) before being ordered to active duty; or

          ‘(ii) a small business concern that received a direct loan under subsection (a) or (b) before an eligible reservist, who is an owner, manager, or key employee described in subparagraph (B), was ordered to active duty.

      ‘(2) DEFERRAL OF DIRECT LOANS-

        ‘(A) IN GENERAL- The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b), if such loan was incurred by a qualified borrower.

        ‘(B) PERIOD OF DEFERRAL- The period of deferral for repayment under this paragraph shall begin on the date on which the eligible reservist is ordered to active duty and shall terminate on the date that is 180 days after the date such eligible reservist is discharged or released from active duty.

        ‘(C) INTEREST RATE REDUCTION DURING DEFERRAL- Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on any loan qualifying for a deferral under this paragraph.

      ‘(3) DEFERRAL OF LOAN GUARANTEES AND OTHER FINANCINGS- The Administration shall--

        ‘(A) encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan made with proceeds made available under that subsection, if such loan was incurred by a small business concern that is eligible to apply for assistance under subsection (b)(3); and

        ‘(B) not later than 30 days after the date of enactment of this subsection, establish guidelines to--

          ‘(i) encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) and financings under section 504 of the Small Business Investment Act of 1958 that were incurred by small business concerns that are eligible to apply for assistance under subsection (b)(3), and loan guarantees provided under subsection (m) if the intermediary provides relief to a small business concern under this paragraph; and

          ‘(ii) implement a program to provide for the deferral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.’.

SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RESERVISTS’ SMALL BUSINESSES.

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

the undesignated paragraph that begins with ‘Provided, That no loan’, the following:

      ‘(3)(A) In this paragraph--

        ‘(i) the term ‘economic injury’ means an economic harm to a business concern that results in the inability of the business concern--

          ‘(I) to meet its obligations as they mature;

          ‘(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 business concern;

        ‘(ii) the term ‘owner, manager, or key employee’ means an individual who--

          ‘(I) has not less than a 20 percent ownership in the small business concern;

          ‘(II) is a manager responsible for the day-to-day operations of such small business concern; or

          ‘(III) is a key employee (as defined by the Administration) of such small business concern; and

        ‘(iii) the term ‘period of military conflict’ has the meaning given the term in subsection (n)(1).

      ‘(B) The Administration may make such disaster 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 (including a small business concern engaged in the lease or rental of real or personal property) that has suffered or that is likely to suffer economic injury as the result of the owner, manager, or key employee of such small business concern being ordered to active military duty during a period of military conflict.

      ‘(C) A small business concern described in subparagraph (B) shall be eligible to apply for assistance under this paragraph during the period beginning on the date on which the owner, manager, or key employee is ordered to active duty and ending on the date that is 180 days after the date on which such owner, manager, or key employee is discharged or released from active duty.

      ‘(D) Any loan or guarantee extended pursuant to this paragraph shall be made at an annual interest rate of 4 percent, without regard to the ability of the small business concern to secure credit elsewhere.

      ‘(E) 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.

      ‘(F) For purposes of assistance under this paragraph, no declaration of a disaster area shall be required.’.

    (b) CONFORMING AMENDMENTS- Section 4(c) of the Small Business Act (15 U.S.C. 633(c)) is amended--

      (1) in paragraph (1), by striking ‘7(b)(4),’; and

      (2) in paragraph (2), by striking ‘7(b)(4), 7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8),’.

SEC. 4. BUSINESS DEVELOPMENT AND MANAGEMENT ASSISTANCE FOR MILITARY RESERVISTS’ SMALL BUSINESSES.

    (a) IN GENERAL- Section 8 of the Small Business Act (15 U.S.C. 637) is amended by adding at the end the following:

    ‘(l) MANAGEMENT ASSISTANCE FOR SMALL BUSINESSES AFFECTED BY MILITARY OPERATIONS- The Administration shall utilize, as appropriate, its entrepreneurial development and management assistance programs, including programs involving State or private sector partners, to provide business counseling and training to any small business concern adversely affected by the deployment of units of the Armed Forces of the United States in support of a period of military conflict (as defined in section 7(n)(1)).

    (b) ENHANCED PUBLICITY DURING OPERATION ALLIED FORCE- For the duration of Operation Allied Force and for 120 days thereafter, the Administration shall enhance its publicity of the availability of assistance provided pursuant to the amendments made by this Act, including information regarding the appropriate local office at which affected small businesses may seek such assistance.

SEC. 5. GUIDELINES.

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

SEC. 6. EFFECTIVE DATES.

    (a) IN GENERAL- Except as provided in subsection (b), the amendments made by this Act shall take effect on the date of the enactment of this Act.

    (b) DISASTER LOANS- The amendments made by section 3 shall apply to economic injury suffered or likely to be suffered as the result of a period of military conflict occurring on or after March 24, 1999.