Military Reservists Small Business Relief Act

Summary: Military Reservists Small Business Relief Act - Amends the Small Business Act to direct the Administrator of the Small Business Administration (SBA), upon request, to defer repayment of a direct loan made to:  (1) an individual who is a reservist who received such loan before being called or ordered to, or retained on, active duty; or (2) a small business that received such loan before a reservist who is an owner, manager, or key employee of such small business was so called, ordered, or retained.  Extends the loan deferral period from the date the individual is so called, ordered, or retained until the later of 180 days after:  (1) such individual is released; or (2) the enactment of this Act, with no accrual of interest during such period. 
Authorizes the SBA to make disaster loans to assist a small business that has suffered or is likely to suffer economic injury as the result of its owner, manager, or key employee being ordered to active duty during a period of military conflict.  Limits to $500,000 the amount outstanding and committed on each loan.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Reservists Small Business 
Relief Act''.

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 new subsection:
    ``(n) Repayment Deferred for Active Duty Reservists.--
            ``(1) In general.--The Administration shall, upon written 
        request, defer repayment of a direct loan made pursuant to 
        subsection (a) or (b), if such loan was incurred by a qualified 
        borrower.
            ``(2) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Qualified borrower.--The term `qualified 
                borrower' means--
                            ``(i) an individual who is an eligible 
                        Reserve and who received a direct loan under 
                        subsection (a) or (b) before being called or 
                        ordered to, or retained on, active duty as 
                        described in subparagraph (B); or
                            ``(ii) a small business concern that 
                        received a direct loan under subsection (a) or 
                        (b) before an eligible Reserve, who is an 
                        owner, manager, or key employee described in 
                        subparagraph (C), was called or ordered to, or 
                        retained on, active duty as described in 
                        subparagraph (B).
                    ``(B) Eligible reserve.--The term `eligible 
                Reserve' means a member of a reserve component of the 
                Armed Forces serving pursuant to a call or order to 
                active duty, or retention on active duty, during a 
                period of military conflict.
                    ``(C) Owner, manager, or key employee.--An eligible 
                Reserve is an owner, manager, or key employee described 
                in this subparagraph if the eligible Reserve is an 
                individual who--
                            ``(i) has not less than a 20 percent 
                        ownership interest in the small business 
                        concern described in subparagraph (A)(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.
                    ``(D) Period of military conflict.--The term 
                `period of military conflict' means--
                            ``(i) a period of war declared by the 
                        Congress;
                            ``(ii) a period of national emergency 
                        declared by the Congress or by the President; 
                        or
                            ``(iii) a period for which members of 
                        reserve components of the Armed Forces are 
                        serving on active duty in the Armed Forces 
                        under a call or order to active duty, or 
                        retention on active duty, under section 688, 
                        12301(a), 12302, 12304, or 12306 of title 10, 
                        United States Code.
            ``(3) Period of deferral.--The period of deferral for 
        repayment under this subsection shall begin on the date on 
        which the eligible Reserve is ordered to active duty during any 
        period of military conflict and shall terminate on the later 
        of--
                    ``(A) 180 days after the date on which such 
                eligible Reserve is discharged or released from that 
                active duty; and
                    ``(B) 180 days after the date of enactment of this 
                subsection.''.
            ``(4) No accrual of interest during deferral.--During the 
        period of deferral described in paragraph (3), repayment of 
        principal and interest on the deferred loan shall not be 
        required and no interest shall accrue on such loan.''.

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 ``Provided, That no loan'', the following new paragraph:
            ``(3)(A) 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 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 duty during a period of military conflict.
            ``(B) Any loan or guarantee under this paragraph shall be 
        made at an annual interest rate of not more than 4 percent, 
        without regard to the ability of the small business concern to 
        secure credit elsewhere.
            ``(C) No loan shall 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 
        $500,000, except that the Administration may waive the $500,000 
        limitation if the Administration determines that the applicant 
        constitutes a major source of employment in an area not larger 
        than a county that is suffering a disaster.
            ``(D) For purposes of assistance under this paragraph, no 
        declaration of a disaster area shall be required.
            ``(E) For purposes of this paragraph--
                    ``(i) the term `period of military conflict' 
                means--
                            ``(I) a period of war declared by the 
                        Congress;
                            ``(II) a period of national emergency 
                        declared by the Congress or by the President; 
                        or
                            ``(III) a period for which members of 
                        reserve components of the Armed Forces are 
                        serving on active duty in the Armed Forces 
                        under a call or order to active duty, or 
                        retention on active duty, under section 688, 
                        12301(a), 12302, 12304, or 12306 of title 10, 
                        United States Code;
                    ``(ii) the term `economic injury' includes the 
                inability of a small business concern to market or 
                produce a product or to provide a service ordinarily 
                provided by the small business concern; and
                    ``(iii) 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.''.
    (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. REGULATIONS.

    Not later than 30 days after the date of enactment of this Act, the 
Small Business Administration may issue such regulations as may be 
necessary to carry out the amendments made by sections 2 and 3.

SEC. 5. APPLICABILITY AND EFFECTIVE DATES.

    (a) Applicability.--This Act and the amendments made by this Act 
shall not apply to any member of a reserve component of the Armed 
Forces serving pursuant to a call or order to active duty, or retention 
on active duty, during a period of military conflict, who is eligible 
to participate in the Ready Reserve Mobilization Income Insurance 
Program established under section 512 of the National Defense 
Authorization Act for Fiscal Year 1996.
    (b) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this Act shall take effect on the date of 
        enactment of this Act.
            (2) Exceptions.--
                    (A) Loan repayment deferral.--The amendment made by 
                section 2 shall apply with respect to any eligible 
                Reserve called or ordered to, or retained on, active 
                duty as the result of a period of military conflict 
                occurring on or after August 1, 1990.
                    (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 August 1, 1990.
    (c) Definitions.--For purposes of this section--
            (1) the term ``economic injury'' has the same meaning as in 
        section 7(b)(3)(E) of the Small Business Act, as added by 
        section 3 of this Act;
            (2) the term ``eligible Reserve'' has the same meaning as 
        in section 7(n)(2) of the Small Business Act, as added by 
        section 2 of this Act; and
            (3) the term ``period of military conflict'' has the same 
        meaning as in section 7(n)(2) of the Small Business Act, as 
        added by section 2 of this Act.