Washington, DC – The House Small Business Committee today passed two Small Business Administration (SBA) Lending/Contracting bills that included provisions of bills previously introduced by Congressman William J. Jefferson (D-La.).  This legislation would drastically help New Orleans small business owners acquire the financial help they’ve long been waiting for to reopen in the wake of Hurricane Katrina.

The Disadvantaged Business Disaster Eligibility Act (HR 1468), which was authored and introduced by Congressman Jefferson, amends the Small Business Act by extending businesses’ eligibility periods by 18 months if they were devastated in a catastrophic event- like Hurricane Katrina- and were taking part in any section 8(a) business development program.  Congressman Jefferson stated that it was only fair that Louisiana  8 (a) businesses not be penalized for forces beyond their control.  The legislation was approved unanimously by the Committee. 

The Relief for Entrepreneurs: Coordination of Objectives and Values for Effective Recovery (RECOVER) Act (HR 1361) would establish a centralized point of contact in the SBA for small business owners who needed emergency assistance after natural disasters, like Katrina- thus, eliminating confusion and weak “cross-agency” coordination

Congressman Jefferson has since the disaster of Hurricane Katrina expressed concern that the SBA does not have a comprehensive, centralized disaster program.  The RECOVER Act of 2007 addresses his often publicly stated concerns.  The Act requires the SBA to engage in comprehensive disaster planning and to report every thirty days on actions that the SBA is taking to maintain long term readiness.

One of the major provisions in HR 1361 is similar to another measure introduced by Congressman Jefferson in January, which was HR 565.  It addresses the conflict that exists between state grant programs-like the floundering Road Home program- and the SBA’s disaster program.  The bill would provide the Administrator of the SBA with the authority to exclude Road Home- or other grants- for the purposes of the SBA disaster loan program.  This would remove a major hurdle that many small business owners had not been able to cross when trying to receive financial aid.  Ultimately, the provision would help steer funds into the hands of the community, triggering a more rapid recovery.     

HR 1361 would provide the SBA with a wealth of financial aid tools, such as a bridge financing program to provide small businesses with immediate, small-dollar financing within 36 hours following a disaster.  It would also establish a lending program that would allow the SBA to draw on private lenders to process and disburse loans during large scale natural disasters. 

Finally, HR 1361 would create a limited grant program in SBA.  The grants would give the SBA the power to assist the most severely affected small businesses damaged by Hurricanes Katrina, Rita and Wilma.

“The passage of these bills through committee today is a well-deserved and overdue victory for small business owners in New Orleans.  This community of employers was basically neglected by the former Republican-led Congress.   80,000 New Orleans businesses were damaged or destroyed by Katrina… 97% of those were small businesses.   The legislation approved by this committee today is obviously critical to the city’s recovery”, Jefferson said.