To amend the Small Business Act to establish an energy emergency disaster loan program.

SECTION 1. SMALL BUSINESS AND AGRICULTURAL PRODUCER ENERGY EMERGENCY 
              DISASTER LOAN PROGRAM.

    (a) Small Business Producer Energy Emergency Disaster Loan 
Program.--Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended by adding at the end the following new paragraph:
            ``(4) Energy emergency disaster loans.--
                    ``(A) Authority.--The Administrator may make or 
                guarantee a loan to a small business concern that the 
                Administrator determines has suffered or is likely to 
                suffer substantial economic injury as a result of a 
                significant increase in the price of heating oil, 
                natural gas, gasoline, transportation fuel, propane, or 
                kerosene.
                    ``(B) Interest rates.--Any loan or guarantee 
                extended pursuant to this paragraph shall be made at 
                the same interest rate as an economic injury loan made 
                or guaranteed under paragraph (2).
                    ``(C) Limitation.--
                            ``(i) In general.--No loan may be made or 
                        guaranteed under this paragraph if the total 
                        amount outstanding and committed to the 
                        borrower under this subsection would exceed 
                        $1,500,000.
                            ``(ii) Exception.--The Administrator may 
                        waive the limitation under clause (i) for a 
                        borrower if the Administrator determines that 
                        the borrower constitutes a major source of 
                        employment in its surrounding area.
                    ``(D) Declarations of disaster.--No assistance 
                shall be available under this paragraph unless--
                            ``(i) the President or the Administrator 
                        has made a declaration of a disaster area by 
                        reason of a significant increase in the price 
                        of heating oil, natural gas, gasoline, 
                        transportation fuel, propane, or kerosene; or
                            ``(ii) the Governor of a State in which a 
                        significant increase in the price of heating 
                        oil, natural gas, gasoline, transportation 
                        fuel, propane, or kerosene has occurred 
                        certifies to the Administrator that small 
                        business concerns have suffered economic injury 
                        as a result of such increase and are in need of 
                        financial assistance that is not otherwise 
                        available on reasonable terms in that State.
                    ``(E) Conversion to renewable or alternative energy 
                sources.--Notwithstanding any other provision of law, a 
                small business concern receiving a loan under this 
                paragraph may use the loan to convert from the use of 
                heating oil, natural gas, gasoline, propane, or 
                kerosene to a renewable or alternative energy source, 
                including agricultural and municipal solid waste, 
                geothermal energy, cogeneration, solar energy, wind 
                energy, or fuel cells.
                    ``(F) Definitions.--In this paragraph, the 
                following definitions apply:
                            ``(i) The term `base price index' means the 
                        moving average of the closing unit price on the 
                        New York Mercantile Exchange for heating oil, 
                        natural gas, gasoline, transportation fuel, or 
                        propane for the 10 days, in each of the most 
                        recent 2 preceding years, which correspond to 
                        the trading days described in clause (ii).
                            ``(ii) The term `current price index' means 
                        the moving average of the closing unit price on 
                        the New York Mercantile Exchange, for the 10 
                        most recent trading days, for contracts to 
                        purchase heating oil, natural gas, gasoline, 
                        transportation fuel, or propane during the 
                        subsequent calendar month, commonly known as 
                        the `front month'.
                            ``(iii) The term `significant increase' 
                        means--
                                    ``(I) with respect to the price of 
                                heating oil, natural gas, gasoline, 
                                transportation fuel, or propane, an 
                                increase of the current price index 
                                over the base price index by not less 
                                than 40 percent; and
                                    ``(II) with respect to the price of 
                                kerosene, any increase which the 
                                Administrator, in consultation with the 
                                Secretary of Energy, determines to be 
                                significant.''.
    (b) Effective Date.--The amendment made by this Act shall apply 
with respect to economic injury suffered on or after the date of the 
enactment of this Act.

Summary: Amends the Small Business Act to authorize the Administrator of the Small Business Administration (SBA) to make or guarantee a loan to a small business that has suffered, or is likely to suffer, substantial economic injury as a result of a significant increase in the price of heating oil, natural gas, gasoline, transportation fuel, propane, or kerosene. Prohibits such a loan or guarantee if the total amount outstanding and committed to the borrower would exceed $1.5 million (with an exception).

Prohibits any such assistance unless there has been a declaration of a disaster in the area or the governor of the state involved has certified that small businesses have suffered economic injury as a result of the price increases.

Allows a small business to use assistance funds to convert to a renewable or alternative energy source.