WASHINGTON – U.S. Senators Mary Landrieu (D-La.) and John Kerry (D-Mass.) today introduced the Gulf Coast Open for Business Act to respond to the needs of small businesses along the Gulf Coast, focus on the long-term recovery of the region and aid victims of future disasters.

According to the U.S. Chamber of Commerce, more than 125,000 small- and medium-sized businesses along the Gulf Coast were disrupted by Hurricanes Katrina and Rita. But, according to local chambers of commerce, as many as two-thirds of their members have not resumed business operations. Congress has passed appropriations bills to give much-needed assistance for residents and businesses devastated by Hurricanes Katrina, Rita and Wilma. Yet, seven months later small businesses are continuing to struggle to win federal rebuilding contracts, get technical assistance, and access the necessary capital to contribute to the economic growth of the area.

“Real recovery for the Gulf Coast starts with recovery for our small businesses,” Sen. Landrieu said. “Hurricanes Katrina and Rita were the most devastating storms in our nation’s recorded history and the mousetrap in place to handle past disasters is simply not sufficient. We need to build a better mousetrap.

“We are introducing this bill today to create new tools, bolster existing programs that work, and ensure accountability at all levels so we can help the people of the Gulf Coast reopen their small businesses which will in turn help all of us reopen our homes.”

“We’ve learned a lot of lessons from Hurricane Katrina, and one of them is that you can’t trust the Bush Administration to adequately respond to a disaster,” said Kerry, Ranking Member on the Committee on Small Business and Entrepreneurship. “Seven months later, small and local businesses are still waiting, wanting to boost the economy and get people back to work, but the Administration hasn’t held up their end of the bargain. This legislation says enough is enough. We’re holding the Bush Administration accountable. We’re laying out a real plan for getting the Gulf Coast open for business.”

The legislation calls for critical provisions to ensure oversight of the Small Business Administration’s (SBA) disaster loan program and contracting practices, authorizes the SBA to pay banks to process disaster loans, changes the Stafford Act to require local firms get preference for 10 percent of contracts, and requires the SBA to develop a disaster response plan by the start of the hurricane season (June 1). In addition, the bill includes some provisions from bipartisan legislation (S. 1807) championed by Sens. Landrieu, Kerry, and Olympia Snowe, R-Maine, last fall, including:

  • Authorizing $50 million in grants to states for Bridge loans to get immediate financial assistance to those devastated by a disaster;

  • Providing authority to SBA to back disaster loans for non-profits located or operating in the disaster area or helping evacuees;

  • Declaring disaster areas as Historically Underutilized Business Zones (HUBZones) giving small businesses in the disaster area preference for contracts;

  • Extending the deadline for applying for disaster loans and granting borrowers a one-year grace period after receiving a loan to begin repaying, including interest;

  • Increasing disaster mitigation loan amounts so borrowers can apply for 20 percent of the total assessed damage; and

  • Waiving the cap on grants to Small Business Development Centers.