110th CONGRESS
1st Session
S. 599
To improve the disaster loan program of the Small Business Administration,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
February 14, 2007
Ms. SNOWE (for herself, Ms. LANDRIEU, and Mr. VITTER) introduced the following
bill; which was read twice and referred to the Committee on Small Business
and Entrepreneurship
A BILL
To improve the disaster loan program of the Small Business Administration,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Private Disaster Loans Act of 2007'.
SEC. 2. PRIVATE DISASTER LOANS.
(a) In General- Section 7 of the Small Business Act (15 U.S.C. 636) is amended--
(1) by redesignating subsections (c) and (d) as subsections (d) and (e),
respectively; and
(2) by inserting after subsection (b) the following:
`(c) Private Disaster Loans-
`(1) DEFINITIONS- In this subsection--
`(A) the term `disaster area' means a county, parish, or similar unit
of general local government in which a disaster was declared under subsection
(b);
`(B) the term `eligible small business concern' means a business concern
that is--
`(i) a small business concern, as defined in this Act; or
`(ii) a small business concern, as defined in section 103 of the Small
Business Investment Act of 1958; and
`(C) the term `qualified private lender' means any privately-owned bank
or other lending institution that the Administrator determines meets
the criteria established under paragraph (9).
`(2) AUTHORIZATION- The Administrator may guarantee timely payment of
principal and interest, as scheduled on any loan issued by a qualified
private lender to an eligible small business concern located in a disaster
area.
`(3) USE OF LOANS- A loan guaranteed by the Administrator under this subsection
may be used for any purpose authorized under subsection (b).
`(4) ONLINE APPLICATIONS-
`(A) ESTABLISHMENT- The Administrator may establish, directly or through
an agreement with another entity, an online application process for
loans guaranteed under this subsection.
`(B) OTHER FEDERAL ASSISTANCE- The Administrator may coordinate with
the head of any other appropriate Federal agency so that any application
submitted through an online application process established under this
paragraph may be considered for any other Federal assistance program
for disaster relief.
`(C) CONSULTATION- In establishing an online application process under
this paragraph, the Administrator shall consult with appropriate persons
from the public and private sectors, including private lenders.
`(A) GUARANTEE PERCENTAGE- The Administrator may guarantee not more
than 85 percent of a loan under this subsection.
`(B) LOAN AMOUNTS- The maximum amount of a loan guaranteed under this
subsection shall be $2,000,000.
`(6) LOAN TERM- The longest term of a loan for a loan guaranteed under
this subsection shall be--
`(A) 15 years for any loan that is issued without collateral; and
`(B) 25 years for any loan that is issued with collateral.
`(A) IN GENERAL- The Administrator may not collect a guarantee fee under
this subsection.
`(B) ORIGINATION FEE- The Administrator may pay a qualified private
lender an origination fee for a loan guaranteed under this subsection
in an amount agreed upon in advance between the qualified private lender
and the Administrator.
`(8) DOCUMENTATION- A qualified private lender may use its own loan documentation
for a loan guaranteed by the Administrator, to the extent authorized by
the Administrator. The ability of a lender to use its own loan documentation
for a loan offered under this subsection shall not be considered part
of the criteria for becoming a qualified private lender under the regulations
promulgated under paragraph (9).
`(9) IMPLEMENTATION REGULATIONS-
`(A) IN GENERAL- Not later than 1 year after the date of enactment of
the Private Disaster Loans Act of 2007, the Administrator shall issue
final regulations establishing permanent criteria for qualified private
lenders.
`(B) REPORT TO CONGRESS- Not later than 6 months after the date of enactment
of the Private Disaster Loans Act of 2007, the Administrator shall submit
a report on the progress of the regulations required by subparagraph
(A) to the Committee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of Representatives.
`(10) AUTHORIZATION OF APPROPRIATIONS-
`(A) IN GENERAL- Amounts necessary to carry out this subsection shall
be made available from amounts appropriated to the Administration under
subsection (b).
`(B) AUTHORITY TO REDUCE INTEREST RATES- Funds appropriated to the Administration
to carry out this subsection, may be used by the Administrator, to the
extent available, to reduce the applicable rate of interest for a loan
guaranteed under this subsection by not more than 3 percentage points.'.
(b) Effective Date- The amendments made by this section shall apply to disasters
declared under section 7(b)(2) of the Small Business Act (631 U.S.C. 636(b)(2))
before, on, or after the date of enactment of this Act.
SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.
The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(A) in paragraph (1), by striking `7(c)(2)' and inserting `7(d)(2)';
and
(i) by striking `7(c)(2)' and inserting `7(d)(2)'; and
(ii) by striking `7(e),'; and
(2) in section 7(b), in the undesignated matter following paragraph (3)--
(A) by striking `That the provisions of paragraph (1) of subsection
(c)' and inserting `That the provisions of paragraph (1) of subsection
(d)'; and
(B) by striking `Notwithstanding the provisions of any other law the
interest rate on the Administration's share of any loan made under subsection
(b) except as provided in subsection (c),' and inserting `Notwithstanding
any other provision of law, and except as provided in subsection (d),
the interest rate on the Administration's share of any loan made under
subsection (b)'.
END
