I

106TH CONGRESS

1ST SESSION S. 918

IN THE HOUSE OF REPRESENTATIVES

JULY 29, 1999

Referred to the Committee on Small Business

AN ACT

To authorize the Small Business Administration to provide

financial and business development assistance to military

reservists’ small businesses, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Military Reservists

5 Small Business Relief Act of 1999’’.
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1 SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RESERV2 ISTS.

3 Section 7 of the Small Business Act (15 U.S.C. 636)

4 is amended by adding at the end the following:

5 ‘‘(n) REPAYMENT DEFERRED FOR ACTIVE DUTY RE6 SERVISTS.—

7 ‘‘(1) DEFINITIONS.—In this subsection:

8 ‘‘(A) ELIGIBLE RESERVIST.—The term ‘el9 igible reservist’ means a member of a reserve

10 component of the Armed Forces ordered to ac11 tive duty during a period of military conflict.

12 ‘‘(B) ESSENTIAL EMPLOYEE.—The term

13 ‘essential employee’ means an individual who is

14 employed by a small business concern and

15 whose managerial or technical expertise is crit16 ical to the successful day-to-day operations of

17 that small business concern.

18 ‘‘(C) PERIOD OF MILITARY CONFLICT.—

19 The term ‘period of military conflict’ means—

20 ‘‘(i) a period of war declared by Con21 gress;

22 ‘‘(ii) a period of national emergency

23 declared by Congress or by the President;

24 or
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1 ‘‘(iii) a period of a contingency oper2 ation, as defined in section 101(a) of title

3 10, United States Code.

4 ‘‘(D) QUALIFIED BORROWER.—The term

5 ‘qualified borrower’ means—

6 ‘‘(i) an individual who is an eligible

7 reservist and who received a direct loan

8 under subsection (a) or (b) before being

9 ordered to active duty; or

10 ‘‘(ii) a small business concern that re11 ceived a direct loan under subsection (a) or

12 (b) before an eligible reservist, who is an

13 essential employee, was ordered to active

14 duty.

15 ‘‘(2) DEFERRAL OF DIRECT LOANS.—

16 ‘‘(A) IN GENERAL.—The Administration

17 shall, upon written request, defer repayment of

18 principal and interest due on a direct loan made

19 under subsection (a) or (b), if such loan was in20 curred by a qualified borrower.

21 ‘‘(B) PERIOD OF DEFERRAL.—The period

22 of deferral for repayment under this paragraph

23 shall begin on the date on which the eligible re24 servist is ordered to active duty and shall termi25 nate on the date that is 180 days after the date
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1 such eligible reservist is discharged or released

2 from active duty.

3 ‘‘(C) INTEREST RATE REDUCTION DURING

4 DEFERRAL.—Notwithstanding any other provi5 sion of law, during the period of deferral de6 scribed in subparagraph (B), the Administra7 tion may, in its discretion, reduce the interest

8 rate on any loan qualifying for a deferral under

9 this paragraph.

10 ‘‘(3) DEFERRAL OF LOAN GUARANTEES AND

11 OTHER FINANCINGS.—The Administration shall—

12 ‘‘(A) encourage intermediaries partici13 pating in the program under subsection (m) to

14 defer repayment of a loan made with proceeds

15 made available under that subsection, if such

16 loan was incurred by a small business concern

17 that is eligible to apply for assistance under

18 subsection (b)(3); and

19 ‘‘(B) not later than 30 days after the date

20 of enactment of this subsection, establish guide21 lines to—

22 ‘‘(i) encourage lenders and other

23 intermediaries to defer repayment of, or

24 provide other relief relating to, loan guar25 antees under subsection (a) and financings
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1 under section 504 of the Small Business

2 Investment Act of 1958 that were incurred

3 by small business concerns that are eligible

4 to apply for assistance under subsection

5 (b)(3), and loan guarantees provided under

6 subsection (m) if the intermediary provides

7 relief to a small business concern under

8 this paragraph; and

9 ‘‘(ii) implement a program to provide

10 for the deferral of repayment or other re11 lief to any intermediary providing relief to

12 a small business borrower under this para13 graph.’’.

14 SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RE15 SERVISTS’ SMALL BUSINESSES.

16 Section 7(b) of the Small Business Act (15 U.S.C.

17 636(b)) is amended by inserting after the undesignated

18 paragraph that begins with ‘‘Provided, That no loan’’, the

19 following:

20 ‘‘(3)(A) In this paragraph—

21 ‘‘(i) the term ‘essential employee’ means

22 an individual who is employed by a small busi23 ness concern and whose managerial or technical

24 expertise is critical to the successful day-to-day

25 operations of that small business concern;
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1 ‘‘(ii) the term ‘period of military conflict’

2 has the meaning given the term in subsection

3 (n)(1); and

4 ‘‘(iii) the term ‘substantial economic in5 jury’ means an economic harm to a business

6 concern that results in the inability of the busi7 ness concern—

8 ‘‘(I) to meet its obligations as they

9 mature;

10 ‘‘(II) to pay its ordinary and nec11 essary operating expenses; or

12 ‘‘(III) to market, produce, or provide

13 a product or service ordinarily marketed,

14 produced, or provided by the business con15 cern.

16 ‘‘(B) The Administration may make such dis17 aster loans (either directly or in cooperation with

18 banks or other lending institutions through agree19 ments to participate on an immediate or deferred

20 basis) to assist a small business concern that has

21 suffered or that is likely to suffer substantial eco22 nomic injury as the result of an essential employee

23 of such small business concern being ordered to ac24 tive military duty during a period of military con25 flict.
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1 ‘‘(C) A small business concern described in sub2 paragraph (B) shall be eligible to apply for assist3 ance under this paragraph during the period begin4 ning on the date on which the essential employee is

5 ordered to active duty and ending on the date that

6 is 90 days after the date on which such essential

7 employee is discharged or released from active duty.

8 ‘‘(D) Any loan or guarantee extended pursuant

9 to this paragraph shall be made at the same interest

10 rate as economic injury loans under paragraph (2).

11 ‘‘(E) No loan may be made under this para12 graph, either directly or in cooperation with banks

13 or other lending institutions through agreements to

14 participate on an immediate or deferred basis, if the

15 total amount outstanding and committed to the bor16 rower under this subsection would exceed

17 $1,500,000, unless such applicant constitutes a

18 major source of employment in its surrounding area,

19 as determined by the Administration, in which case

20 the Administration, in its discretion, may waive the

21 $1,500,000 limitation.

22 ‘‘(F) For purposes of assistance under this

23 paragraph, no declaration of a disaster area shall be

24 required.’’.
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1 SEC. 4. BUSINESS DEVELOPMENT AND MANAGEMENT AS2 SISTANCE FOR MILITARY RESERVISTS’

3 SMALL BUSINESSES.

4 (a) IN GENERAL.—Section 8 of the Small Business

5 Act (15 U.S.C. 637) is amended by adding at the end the

6 following:

7 ‘‘(l) MANAGEMENT ASSISTANCE FOR SMALL BUSI8 NESSES AFFECTED BY MILITARY OPERATIONS.—The Ad9 ministration shall utilize, as appropriate, its entrepre10 neurial development and management assistance pro11 grams, including programs involving State or private sec12 tor partners, to provide business counseling and training

13 to any small business concern adversely affected by the

14 deployment of units of the Armed Forces of the United

15 States in support of a period of military conflict (as de16 fined in section 7(n)(1)).’’.

17 (b) ENHANCED PUBLICITY DURING OPERATION AL18 LIED FORCE.—For the duration of Operation Allied Force

19 and for 120 days thereafter, the Administration shall en20 hance its publicity of the availability of assistance provided

21 pursuant to the amendments made by this Act, including

22 information regarding the appropriate local office at which

23 affected small businesses may seek such assistance.

24 SEC. 5. GUIDELINES.

25 Not later than 30 days after the date of enactment

26 of this Act, the Administrator of the Small Business Ad-
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1 ministration shall issue such guidelines as the Adminis2 trator determines to be necessary to carry out this Act

3 and the amendments made by this Act.

4 SEC. 6. EFFECTIVE DATES.

5 (a) IN GENERAL.—Except as provided in subsection

6 (b), the amendments made by this Act shall take effect

7 on the date of the enactment of this Act.

8 (b) DISASTER LOANS.—The amendments made by

9 section 3 shall apply to economic injury suffered or likely

10 to be suffered as the result of a period of military conflict

11 occurring or ending on or after March 24, 1999.

Passed the Senate July 27, 1999.

Attest: GARY SISCO,

Secretary.