WASHINGTON – U.S. Senator Mary L. Landrieu, D-La., Chair of the U.S. Senate Committee on Small Business and Entrepreneurship today lauded Rep. Patrick Murphy, D-Fla., and members of the U.S. House of Representatives Small Business Committee, for introducing the Small Business Disaster Reform Act in the House of Representatives. The bill is the House companion to S. 415 that Sens. Landrieu and Thad Cochran, R-Miss. introduced in the Senate earlier this year.
The bill is designed to make U.S. Small Business Administration (SBA) disaster programs more responsive to the needs of small businesses impacted by disasters. The Senate bill is cosponsored by Sens. Kirsten Gillibrand, D-N.Y., Mark Pryor, D-Ark., Ben Cardin, D- Md., and Roger Wicker, R-Miss.
Rep. Murphy was joined by the following cosponsors: Reps. Mick Mulvaney, R-S.C., Judy Chu, D-Calif., Mike Coffman, R-Colo., Ted Deutch, D-Fla., Peter King, R-N.Y., Alan Nunnelee, R-Miss., Donald M. Payne, Jr., D-N.J., and Cedric Richmond, D-La.
The bill builds off of successful SBA disaster reforms that Sen. Landrieu enacted following Hurricanes Katrina and Rita of 2005 and the Deepwater Horizon disaster in 2010 that made significant improvements to the way the SBA responds to disasters.
“I applaud Rep. Patrick Murphy for introducing in the House the bipartisan disaster recovery bill that we filed in the Senate earlier this year,” said Sen. Landrieu. “Our legislation will not cost the taxpayers a dime and will help small businesses devastated by natural disasters recover quicker and more efficiently with less red-tape. Small businesses are the heart and soul of our communities, and we must support them after disasters. If they don't come back, no one will. The fact that we have gained bipartisan and bicameral support for this common-sense legislation reiterates the need for its swift passage in the House and Senate.”
"As a small businessman from Florida, I know firsthand the threats natural disasters pose to businesses owners. With small businesses serving as the backbone of our economy, we must ensure that the SBA is able to best assist them in the wake of disasters," said Rep. Murphy. "This bipartisan bill would do just that with zero cost by allowing small business owners to use assets other than their residences as collateral for small loans and by allowing neighboring SBDCs to help disaster-stricken areas. I hope that Congress will act swiftly to implement this common-sense solution."
The Small Business Disaster Recovery Act has already received endorsements from the following seventeen national, state and local organizations: Association of Small Business Development Centers; International Economic Development Council; National Emergency Managers Association; National Small Business Association; U.S. Conference of Mayors; Partnership for New York City; Greater New Orleans Inc.; St. Tammany Economic Development Foundation; Southwest Louisiana Economic Development Alliance; Northeast Louisiana Economic Partnership; Jacksonville Chamber; Bay Area Houston Economic Partnership; Charleston Chamber of Commerce; Mississippi Gulf Coast Chamber; Mobile Area Chamber of Commerce; New Orleans Chamber of Commerce; and Staten Island Chamber of Commerce.
The bill would clarify that, for SBA disaster business loans less than $200,000, the SBA cannot use a business owner’s primary residence as collateral if there are other suitable business assets available to use as collateral towards securing the loan. This addresses instances where business owners were being required to put up a $300,000 or $400,000 personal home as collateral for a $200,000 disaster loan even though they had sufficient business assets to secure the loan.
It also authorizes SBA to allow out-of-state small business development centers (SBDCs) to provide assistance in presidentially-declared disaster areas. This addresses an issue that occurred after Hurricane Katrina and Hurricane Sandy in 2012 where local SBDCs were severely impacted but out-of-state SBDCs were not allowed, because of geographic limitations, to assist as their local counterparts get back on their feet. The concept is similar to how private sector utility companies share linemen after major disasters.
Last December, Sen. Landrieu held a hearing to assess SBA’s response to Hurricane Sandy. Many issues were discussed, including the two that the bill addresses. More information can be found here.
S. 415 was also discussed at a Senate committee roundtable held on disaster recovery proposals on March 14, 2013. More information can be found here.