Disaster-Recovery Legislation Gaining Momentum
U.S. Sens. John Kerry (D-Mass.), Olympia Snowe (R-Maine), Mary Landrieu (D-La.), David Vitter (R-La.), and Bill Nelson (D-Fla.) praised the Senate's unanimous passage Aug. 3 of a loan bill that will improve assistance to business owners and homeowners after disasters. The legislation passed as the two-year anniversary of Hurricanes Katrina, Rita, and Wilma approached.
"We've passed this critical disaster aid legislation, recognizing that there are Gulf Coast residents who are still seeking to recover nearly two years later," said Kerry, chairman of the Committee on Small Business and Entrepreneurship. "We made these changes to help future disaster victims--whether from floods or fire in my home state of Massachusetts or the Katrina disasters of tomorrow. I thank all of my colleagues for working together in a bipartisan way to address concerns and move this important bill."
The Small Business Disaster Response and Loan Improvements Act (S. 163):
- Establishes a Private Disaster Loan program to be used in the aftermath of catastrophic disasters, allowing banks to make loans directly to victims with an 85 percent government guarantee;
- Creates a new expedited disaster assistance business loan program to provide short-term relief to businesses damaged or destroyed in catastrophic disasters while they await other federal assistance or insurance payments;
- Creates a new presidential declaration of "Catastrophic National Disaster," which will allow the Small Business Administration (SBA) to issue nationwide economic injury disaster loans to small businesses affected by a large-scale disaster;
- Provides key tools for processing disaster loan applications more quickly, such as working with qualified private contractors to process the loans and requiring the SBA to report to Congress on how the application process can be improved; and
- Increases the maximum size of a disaster loan from $1.5 million to $2 million and allows nonprofit groups to be eligible for disaster loans.
"This legislation provides vital resources to the SBA to enable it to respond effectively and swiftly to future disasters," said Snowe. "The SBA's slow response to Hurricane Katrina makes plain the need for the SBA to be provided with additional disaster-response tools. A product of compromise, this bill is forward-looking, and I urge Congress to move ahead quickly with final passage."