I

106TH CONGRESS

1ST SESSION H. R. 1981

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

MAY 27, 1999

Mr. BILIRAKIS 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 Reserves

5 Small Business Relief Act’’.

6 SEC. 2. REPAYMENT DEFERRAL FOR ACTIVE DUTY RE7 SERVES.

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

9 is amended by adding at the end the following:
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1 ‘‘(n) REPAYMENT DEFERRED FOR ACTIVE DUTY RE2 SERVES.—

3 ‘‘(1) DEFERRAL OF DIRECT LOANS.—

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

5 shall, upon written request, defer repayment of

6 principal and interest due during the period of

7 deferral described in subparagraph (B) on any

8 direct loan made under subsection (a) or (b), if

9 such loan was incurred by a qualified borrower.

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

11 of deferral for repayment under this paragraph

12 shall begin on the date on which the eligible re13 serve is ordered to active duty during a period

14 of military conflict and shall terminate on the

15 later of—

16 ‘‘(i) the date that is 180 days after

17 the date such eligible reserve is discharged

18 or released from active duty; and

19 ‘‘(ii) the date that is 180 days after

20 the date of enactment of this subsection.

21 ‘‘(C) NO ACCRUAL OF INTEREST DURING

22 DEFERRAL.—During the period of deferral de23 scribed in subparagraph (B), no interest shall

24 accrue on any deferred loan.
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1 ‘‘(2) APPLICABILITY.—This subsection shall

2 apply with respect to any period of military conflict

3 beginning on or after August 1, 1990.

4 ‘‘(3) DEFINITIONS.—In this subsection:

5 ‘‘(A) ELIGIBLE RESERVE.—The term ‘eli6 gible reserve’ means a member of a reserve

7 component of the Armed Forces serving pursu8 ant to a call or order to active duty, or an order

9 to remain on active duty, during a period of

10 military conflict.

11 ‘‘(B) OWNER, MANAGER, OR KEY EM12 PLOYEE.—The term ‘owner, manager, or key

13 employee’ means an individual who—

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

15 ownership interest in a small business con16 cern described in subparagraph (D)(ii);

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

18 day-to-day operations of such small busi19 ness concern; or

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

21 the Administration) of such small business

22 concern.

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

24 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 for which members of

7 reserve components of the Armed Forces

8 are serving on active duty in the Armed

9 Forces under a call or order to active duty,

10 under section 688, 12301(a), 12302,

11 12304, or 12306 of title 10, United States

12 Code.

13 ‘‘(D) QUALIFIED BORROWER.—The term

14 ‘qualified borrower’ means—

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

16 reserve and who received a direct loan

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

18 called or ordered to active duty, or being

19 ordered to remain on active duty, during a

20 period of military conflict; or

21 ‘‘(ii) a small business concern that re22 ceived a direct loan under subsection (a) or

23 (b) before an eligible reserve, who is an

24 owner, manager, or key employee, was

25 called or ordered to active duty, or was or-
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1 dered to remain on active duty, during a

2 period of military conflict.’’.

3 SEC. 3. DISASTER LOAN ASSISTANCE FOR MILITARY RE4 SERVES’ SMALL BUSINESSES.

5 (a) IN GENERAL.—Section 7(b) of the Small Busi6 ness Act (15 U.S.C. 636(b)) is amended by inserting after

7 the undesignated paragraph that begins with ‘‘Provided,

8 That no loan’’, the following:

9 ‘‘(3)(A) The Administration may make such

10 disaster loans (either directly or in cooperation with

11 banks or other lending institutions through agree12 ments to participate on an immediate or deferred

13 basis) to assist a small business concern (including

14 a small business concern engaged in the lease or

15 rental of real or personal property) that has suffered

16 or that is likely to suffer economic injury as the re17 sult of a call or order to active military duty, or an

18 order to remain on active duty, of an owner, man19 ager, or key employee of such small business concern

20 during a period of military conflict.

21 ‘‘(B) Any loan or guarantee extended pursuant

22 to this paragraph shall be made at an annual inter23 est rate of 4 percent, without regard to the ability

24 of the small business concern to secure credit else25 where.
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1 ‘‘(C) No loan may be made under this para2 graph, either directly or in cooperation with banks

3 or other lending institutions through agreements to

4 participate on an immediate or deferred basis, if the

5 total amount outstanding and committed to the bor6 rower under this subsection would exceed $500,000,

7 except that the Administration may waive the

8 $500,000 limitation if the Administration deter9 mines that the applicant for the loan constitutes a

10 major source of employment in its surrounding area,

11 and such area is not larger than the surrounding

12 county.

13 ‘‘(D) For purposes of assistance under this

14 paragraph, no declaration of a disaster area shall be

15 required.

16 ‘‘(E) This paragraph shall apply with respect to

17 any period of military conflict beginning on or after

18 August 1, 1990.

19 ‘‘(F) In this paragraph—

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

21 economic harm to a business concern that re22 sults in the inability of the business concern to

23 market, produce, or provide a product or service

24 ordinarily marketed, produced, or provided by

25 the business concern;
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1 ‘‘(ii) the term ‘owner, manager, or key em2 ployee’ means an individual who—

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

4 ownership interest in the small business

5 concern;

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

7 day-to-day operations of such small busi8 ness concern; or

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

10 by the Administration) of such small busi11 ness concern; and

12 ‘‘(iii) the term ‘period of military conflict’

13 has the meaning given the term in subsection

14 (n)(3).’’.

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

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

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

18 and

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

20 7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8),’’.

21 SEC. 4. REGULATIONS.

22 Not later than 60 days after the date of enactment

23 of this Act, the Small Business Administration shall issue
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1 such regulations as may be necessary to carry out the

2 amendments made by sections 2 and 3.

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