Military Reserves Small Business Relief Act

SECTION 1. SHORT TITLE.

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

SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RESERVES.

    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 Reserves.--
            ``(1) Deferral of direct loans.--
                    ``(A) In general.--The Administration shall, upon 
                written request, defer repayment of principal and 
                interest due during the period of deferral described in 
                subparagraph (B) on any 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 reserve is ordered to active 
                duty during a period of military conflict and shall 
                terminate on the later of--
                            ``(i) the date that is 180 days after the 
                        date such eligible reserve is discharged or 
                        released from active duty; and
                            ``(ii) the date that is 180 days after the 
                        date of enactment of this subsection.
                    ``(C) No accrual of interest during deferral.--
                During the period of deferral described in subparagraph 
                (B), no interest shall accrue on any deferred loan.
            ``(2) Applicability.--This subsection shall apply with 
        respect to any period of military conflict beginning on or 
        after August 1, 1990.
            ``(3) Definitions.--In this subsection:
                    ``(A) 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 an order to remain on active duty, 
                during a period of military conflict.
                    ``(B) Owner, manager, or key employee.--The term 
                `owner, manager, or key employee' means an individual 
                who--
                            ``(i) has not less than a 20 percent 
                        ownership interest in a 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 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, under 
                        section 688, 12301(a), 12302, 12304, or 12306 
                        of title 10, United States Code.
                    ``(D) 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 active duty, or being ordered to 
                        remain on active duty, during a period of 
                        military conflict; 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, was called or ordered to active 
duty, or was ordered to remain on active duty, during a period of 
military conflict.''.

SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RESERVES' 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) 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 a call or 
        order to active military duty, or an order to remain on active 
        duty, of an owner, manager, or key employee of such small 
        business concern during a period of military conflict.
            ``(B) 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.
            ``(C) 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 
        $500,000, except that the Administration may waive the $500,000 
        limitation if the Administration determines that the applicant 
        for the loan constitutes a major source of employment in its 
        surrounding area, and such area is not larger than the 
        surrounding county.
            ``(D) For purposes of assistance under this paragraph, no 
        declaration of a disaster area shall be required.
            ``(E) This paragraph shall apply with respect to any period 
        of military conflict beginning on or after August 1, 1990.
            ``(F) 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 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 interest 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)(3).''.
    (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 60 days after the date of enactment of this Act, the 
Small Business Administration shall issue such regulations as may be 
necessary to carry out the amendments made by sections 2 and 3.

Summary: Military Reserves Small Business Relief Act - Amends the Small Business Act to require the Small Business Administration (SBA), upon written request, to defer repayment of principal and interest due on a direct general business or disaster loan made to a member of the reserves ordered to active duty during a period of military conflict, as long as such reservist: (1) received the loan before being ordered to such duty. And (2) is the owner, manager, or key employee of a small business for which the loan was made. Extends such deferral period until the later of 180 days after: (1) such reservist is discharged or released from active duty. Or (2) the date of enactment of this Act. Applies such assistance to periods of military conflict occurring on or after August 1, 1990. 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 the owner, manager, or key employee of such business being ordered to active duty during a period of military conflict. Provides a loan limitation. Applies such assistance to periods of military conflict occurring on or after August 1, 1990.