I

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. VELA ́ZQUEZ, 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.

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) OWNER, MANAGER, OR KEY EM13 PLOYEE.—An owner, manager, or key employee

14 described in this subparagraph is an individual

15 who—

16 ‘‘(i) has not less than a 20 percent

17 ownership interest in the small business

18 concern described in subparagraph (D)(ii);

19 ‘‘(ii) is a manager responsible for the

20 day-to-day operations of such small busi21 ness concern; or

22 ‘‘(iii) is a key employee (as defined by

23 the Administration) of such small business

24 concern.

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

26 The term ‘period of military conflict’ means—
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1 ‘‘(i) a period of war declared by Con2 gress;

3 ‘‘(ii) a period of national emergency

4 declared by Congress or by the President;

5 or

6 ‘‘(iii) a period of a contingency oper7 ation, as defined in section 101(a) of title

8 10, United States Code.

9 ‘‘(D) QUALIFIED BORROWER.—The term

10 ‘qualified borrower’ means—

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

12 reservist and who received a direct loan

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

14 ordered to active duty; or

15 ‘‘(ii) a small business concern that re16 ceived a direct loan under subsection (a) or

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

18 owner, manager, or key employee described

19 in subparagraph (B), was ordered to active

20 duty.

21 ‘‘(2) DEFERRAL OF DIRECT LOANS.—

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

23 shall, upon written request, defer repayment of

24 principal and interest due on a direct loan made
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1 under subsection (a) or (b), if such loan was in2 curred by a qualified borrower.

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

4 of deferral for repayment under this paragraph

5 shall begin on the date on which the eligible re6 servist is ordered to active duty and shall termi7 nate on the date that is 180 days after the date

8 such eligible reservist is discharged or released

9 from active duty.

10 ‘‘(C) INTEREST RATE REDUCTION DURING

11 DEFERRAL.—Notwithstanding any other provi12 sion of law, during the period of deferral de13 scribed in subparagraph (B), the Administra14 tion may, in its discretion, reduce the interest

15 rate on any loan qualifying for a deferral under

16 this paragraph.

17 ‘‘(3) DEFERRAL OF LOAN GUARANTEES AND

18 OTHER FINANCINGS.—The Administration shall—

19 ‘‘(A) encourage intermediaries partici20 pating in the program under subsection (m) to

21 defer repayment of a loan made with proceeds

22 made available under that subsection, if such

23 loan was incurred by a small business concern

24 that is eligible to apply for assistance under

25 subsection (b)(3); and
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1 ‘‘(B) not later than 30 days after the date

2 of enactment of this subsection, establish guide3 lines to—

4 ‘‘(i) encourage lenders and other

5 intermediaries to defer repayment of, or

6 provide other relief relating to, loan guar7 antees under subsection (a) and financings

8 under section 504 of the Small Business

9 Investment Act of 1958 that were incurred

10 by small business concerns that are eligible

11 to apply for assistance under subsection

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

13 subsection (m) if the intermediary provides

14 relief to a small business concern under

15 this paragraph; and

16 ‘‘(ii) implement a program to provide

17 for the deferral of repayment or other re18 lief to any intermediary providing relief to

19 a small business borrower under this para20 graph.’’.

21 SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RE22 SERVISTS’ SMALL BUSINESSES.

23 (a) IN GENERAL.—Section 7(b) of the Small Busi24 ness Act (15 U.S.C. 636(b)) is amended by inserting after
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1 the undesignated paragraph that begins with ‘‘Provided,

2 That no loan’’, the following:

3 ‘‘(3)(A) In this paragraph—

4 ‘‘(i) the term ‘economic injury’ means an

5 economic harm to a business concern that re6 sults in the inability of the business concern—

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

8 mature;

9 ‘‘(II) to pay its ordinary and nec10 essary operating expenses; or

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

12 a product or service ordinarily marketed,

13 produced, or provided by the business con14 cern;

15 ‘‘(ii) the term ‘owner, manager, or key em16 ployee’ means an individual who—

17 ‘‘(I) has not less than a 20 percent

18 ownership in the small business concern;

19 ‘‘(II) is a manager responsible for the

20 day-to-day operations of such small busi21 ness concern; or

22 ‘‘(III) is a key employee (as defined

23 by the Administration) of such small busi24 ness concern; and
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1 ‘‘(iii) the term ‘period of military conflict’

2 has the meaning given the term in subsection

3 (n)(1).

4 ‘‘(B) The Administration may make such dis5 aster loans (either directly or in cooperation with

6 banks or other lending institutions through agree7 ments to participate on an immediate or deferred

8 basis) to assist a small business concern (including

9 a small business concern engaged in the lease or

10 rental of real or personal property) that has suffered

11 or that is likely to suffer economic injury as the re12 sult of the owner, manager, or key employee of such

13 small business concern being ordered to active mili14 tary duty during a period of military conflict.

15 ‘‘(C) A small business concern described in sub16 paragraph (B) shall be eligible to apply for assist17 ance under this paragraph during the period begin18 ning on the date on which the owner, manager, or

19 key employee is ordered to active duty and ending

20 on the date that is 180 days after the date on which

21 such owner, manager, or key employee is discharged

22 or released from active duty.

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

24 to this paragraph shall be made at an annual inter25 est rate of 4 percent, without regard to the ability
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1 of the small business concern to secure credit else2 where.

3 ‘‘(E) No loan may be made under this para4 graph, either directly or in cooperation with banks

5 or other lending institutions through agreements to

6 participate on an immediate or deferred basis, if the

7 total amount outstanding and committed to the bor8 rower under this subsection would exceed

9 $1,500,000, unless such applicant constitutes a

10 major source of employment in its surrounding area,

11 as determined by the Administration, in which case

12 the Administration, in its discretion, may waive the

13 $1,500,000 limitation.

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

15 paragraph, no declaration of a disaster area shall be

16 required.’’.

17 (b) CONFORMING AMENDMENTS.—Section 4(c) of

18 the Small Business Act (15 U.S.C. 633(c)) is amended—

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

20 and

21 (2) in paragraph (2), by striking ‘‘7(b)(4),

22 7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8),’’.
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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 on or after March 24, 1999.

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