Small Business Disaster Response and Loan Improvements Act of 2006

Mr. President, I rise today to introduce the Pediatric Medical Device Safety and Improvement Act of 2006. I want to begin by thanking Senator Mike DeWine for joining me in introducing this legislation and for his leadership on children's health. He has been my partner over the years as we fought to make drugs safer and more widely available for children. I believe the legislation we are introducing today will achieve a similar goal for pediatric medical devices. I would also like to especially thank the Elizabeth Glaser Pediatric AIDS Foundation, the American Academy of Pediatrics, the American Thoracic Society and the National Organization for Rare Disorders for their expertise in helping craft this legislation as well as their tireless support for making medical devices safer for use in children.

This legislation provides a comprehensive approach to ensuring that children are not left behind as cutting-edge research and revolutionary technologies for medical devices advance. Like drugs, where for too long children were treated like small adults and could just be given reduced doses of adult products, many essential medical devices used extensively by pediatricians are not designed or sized for children. In fact, the development of new medical devices suitable for children's smaller and growing bodies can lag 5 or 10 years behind those for adults.

While children and adults suffer from many of the same diseases and conditions, their device needs can vary considerably due to differences in size, rates of growth, critical development periods, anatomy, physiological differences such as breathing and heart rate, and physical activity levels. To date, because the pediatric market is so small and pediatric diseases relatively rare, there has been little incentive for device manufacturers to focus their attention on children. The result has been that pediatric providers must resort to ``jerry-rigging'' or fashioning make-shift device solutions for pediatric use. When that is not an option, providers may be forced to use more invasive treatment or less effective therapies.

For example, at present, left ventricular assist devices, LVADs, do not exist in the U.S. for children less than 5 years old. An LVAD is a mechanical pump that helps a heart that is too weak to pump blood through the body.

So infants and children under 5 years of age who have critical failure of their left or right ventricles have to be supported through extracorporeal membrane oxygenation, ECMO. An ECMO consists of a pump, an artificial lung, a blood warmer and an arterial filter, which is installed by inserting tubes into large veins or arteries located in the right side of the neck or the groin. While ECMOs can help children for short periods of time, they are problematic. They can cause dangerous clots and the blood thinners that prevent these clots may lead to internal bleeding. In addition, children must remain bedridden while using the device.

For young children needing to be on a ventilator to assist their breathing, the lack of non-invasive ventilators with masks that suitably fit babies has led to respiratory treatments that are inadequate or invasive treatment options such as placing a tube in the baby's throat.

Children needing prosthetic heart valves face a disproportionately high failure rate. Because of the biochemistry of children's growing bodies, prosthetic heart valves implanted in children calcify and deteriorate much faster than in adults. Typically, children with a heart valve implant who survive to adulthood will need four or five operations. Additionally, devices currently available for children must be better able to expand and grow as the child grows.

Over the past 2 years, several efforts have been launched to better identify barriers to the development of pediatric devices and to generate solutions for improving children's access to needed medical devices.

Beginning in June 2004, the American Academy of Pediatrics, the Elizabeth Glaser Pediatric AIDS Foundation, the National Organization for Rare Disorders, NORD, the National Association of Children's Hospitals, and the Advanced Medical Technology Association, AdvaMed, hosted a series of stakeholders meetings that yielded recommendations for improving the availability of pediatric devices. In October 2004, in response to a directive in the Medical Devices Technical Corrections Act of 2004, the Food and Drug Administration, FDA, released a report that identified numerous barriers to the development and approval of devices for children. And in July 2005, the Institute of Medicine, IOM, issued a report on the adequacy of postmarket surveillance of pediatric medical devices, as mandated by the Medical Device User Fee and Modernization Act of 2002. The IOM found significant flaws in safety monitoring and recommended expanding the FDA's ability to require postmarket studies of certain products and improving public access to information about postmarket pediatric studies.

Our legislation seeks to address the equally important issues of pediatric medical device safety and availability. To begin with, the bill creates a mechanism to allow the FDA to track the number and types of medical devices approved specifically for children or for conditions that occur in children. It also allows the FDA to use adult data to support a determination of reasonable assurance of effectiveness in pediatric populations and to extrapolate data between pediatric subpopulations.

The market for pediatric medical devices simply isn't what it is for adults. Therefore, many device manufacturers have been reluctant to make devices for children. Our bill creates an incentive for companies by modifying the existing humanitarian device exemption, HDE, provision to allow manufacturers to profit from devices that are specifically designed to meet a pediatric need.

To prevent abuse, our bill reverts to current law which allows no profit on sales of devices that exceed the number estimated to be needed for the approved condition. This provision is modeled after the existing Orphan Products Division designation process. Under no circumstances can there be a profit on sales if the device is used to treat or diagnose diseases or conditions affecting more than 4,000 individuals in the U.S. per year which is the same as under current law. Already approved adult HDEs upon date of enactment are eligible for the HDE profit modification but only if they are meet the conditions of the bill. The lifting of the profit restriction for new pediatric HDEs sunsets in 2012 and FDA is required to issue a report on its impact within 5 years.

In order to encourage pediatric medical device research, our bill requires the National Institutes of Health, NIH, to designate a point of contact at the agency to help innovators and physicians access funding for pediatric medical device development. It also requires the NIH, the FDA, and the Agency for Healthcare Research and Quality, AHRQ, to submit a plan for pediatric medical device research that identifies gaps in such research and proposes a research agenda for addressing them. In identifying the gaps, the plan can include a survey of pediatric medical providers regarding unmet pediatric medical device needs.

To better foster innovation in the private sector, our bill establishes demonstration grants for non-profit consortia to promote pediatric device development, including matchmaking between inventors and manufacturers and federal resources. These demonstration grants which are authorized for $6 million annually require that the federal government mentor and help manage pediatric device projects through the development process, including product identification, prototype design, device development and marketing. Under the bill, grantees must coordinate with the NIH's pediatric devices point of contact to identify research issues that require further study and with the FDA to help facilitate approval of pediatric indications.

Finally, in its 2005 report on pediatric medical device safety, the IOM found serious flaws in the postmarket safety surveillance of these devices. Our legislation allows FDA to require postmarket studies as a condition of clearance for certain categories of devices. This includes ``a class II or class III device the failure of which would be reasonably likely to have serious adverse health consequences or is intended to be (1) implanted in the human body for more than one year, or (2) a life sustaining or life supporting device used outside a device user facility.''

The legislation also gives the FDA the ability to require studies longer than 3 years with respect to a device that is to have significant use in pediatric populations if such studies would be necessary to address longer term pediatric questions, such as the impact on growth and development. And, it establishes a publicly accessible database of postmarket study commitments that involve questions about device use in pediatric populations.

The legislation we are introducing today has been many years in the making. In addition to the lead republican bill sponsor, Senator DeWine, and the public health organizations I mentioned earlier, I would like to thank the Advanced Medical Technology Association and its member company Johnson & Johnson, for their contributions to this legislation. The bill we are introducing today reflects many of the comments and suggestions they provided through the development of this legislation. Several device manufacturers including Respironics, Seleon, Breas Medical AB, and Stryker have submitted letters of support for this legislation and I ask unanimous consent that their letters as well as the letters of all organizations supporting this bill be entered in the record following my remarks.

I look forward to working with patient groups, physicians, industry and my colleagues--including the chairman and ranking member of the Health, Education, Labor and Pensions Committee, Senators Enzi and Kennedy--to move this legislation next year when the committee considers medical device legislation. I urge my colleagues to support this legislation and I am hopeful that it will become law as soon as possible.

I ask unanimous consent that the letters and the text of the bill be printed in the Record.

Mr. President, I rise today to introduce--with my cosponsor Senator Boxer--a historic bill that will end 18 years of litigation between the Natural Resources Defense Council, the Friant Water Authority, and the U.S. Department of the Interior. The legislation will enact a settlement that accomplishes the restoration of California's second longest river, the San Joaquin, while maintaining a stable water supply for the farmers who have made the Valley bloom and have supplied low-cost agricultural products to Americans from coast to coast.

The alternative to a consensus resolution to this long-running western water battle basis is to continue the fight. To my knowledge, every farmer and every environmentalist who has considered the possibility of continued litigation believes that an outcome imposed by a judge is likely to be worse for everyone on all counts: more costly, riskier for the farmers, and less beneficial for the environment.

Because the settlement provides a framework that all interests can accept, this legislation has the strong support of the Bush administration, the Schwarzenegger administration, the environmental and fishing communities and numerous California farmers and water districts, including all 22 Friant water districts that have been part of the litigation.

In announcing the signing of this San Joaquin River settlement in September, the Assistant Secretary of the Interior praised it as a ``monumental agreement.'' And when the Federal court then approved the settlement in late October, Secretary of the Interior Dirk Kempthorne further praised settlement for launching ``one of the largest environmental restoration projects in California's history.'' The Secretary further observed that ``This Settlement closes a long chapter of conflict and uncertainty in California's San Joaquin Valley . . . and open[s] a new chapter of environmental restoration and water supply certainty for the farmers and their communities.''

I share the Secretary's strong support for this balanced and historic agreement, and it is my honor to join with Senator Boxer and a bipartisan group of California House Members in introducing legislation to approve and authorize this settlement before we end the 109th Congress.

The legislation indicates how the settlement agreement forged by the parties is going to be implemented. It involves the Departments of the Interior and Commerce, and essentially gives the Secretary of the Interior the additional authority to:

take the actions to restore the San Joaquin River;

reintroduce the California Central Valley Spring Run Chinook

Salmon;

minimize water supply impacts on Friant water districts; and

avoid reductions in water supply for third-party water

contractors.

One of the major benefits of this settlement is the restoration of a long-lost salmon fishery. The return of one of California's most important salmon runs will create significant benefits for local communities in the San Joaquin Valley, helping to restore a beleaguered fishing industry while improving recreation and quality of life.

The legislation provides for improvements to the San Joaquin River channel to allow salmon restoration to begin in 2014. Beginning in that year, the river would see an annual flow regime mandated by the settlement, with pulses of additional water in the spring and greater flows available in wetter years. There is flexibility to add or subtract up to 10 percent from the annual flows, as the best science dictates.

A visitor to the revitalized river channel in a decade will find an entirely different place providing recreation and relaxation for residents of small towns like Mendota, and a refuge for residents of larger cities like Fresno.

The legislation I am introducing today includes provisions to benefit the farmers of the San Joaquin Valley as well as the salmon: In wet years, Friant contractors can purchase surplus flows at $10 per acre- foot for use in dry years, far less than the approximately $35 per acre-foot that they would otherwise pay for this water. The Secretary of the Interior is authorized to recirculate new restoration flows from the Delta via the California aqueduct and the Cross-Valley Canal to provide additional supply for Friant.

Today's legislation also includes substantial protections for other water districts in California that were not party to the original settlement negotiations. These other water contractors will be able to avoid all but the smallest water impacts as a result of the settlement, except on a voluntary basis.

In addition, the restoration of flows for over 150 miles below Friant Dam, and reconnecting the upper river to the critical San Joaquin- Sacramento Delta, will be a welcome change for the more than 22 million Californians who rely on that crucial source for their drinking water.

Finally, restoring the San Joaquin as a living salmon river may ultimately help struggling fishing communities on California's north coast--and even into southern Oregon. The restoration of the San Joaquin and the government's commitment to reintroduce and rebuild historic salmon populations provide a rare bright spot for these communities.

In addition to congratulating the parties for making a settlement that will enable the long-sought restoration of the San Joaquin River, I am mindful of and remain committed to progress in implementing and funding the December 19, 2000, Trinity River restoration

record of decision and the Hoopa Valley Tribe's comanagement of the decision's important goal of restoring the fishery resources that the United States holds in trust for the tribe.

Support of this agreement is almost as far reaching as its benefits. This historic agreement would not have been possible without the participation of a remarkably broad group of agencies, stakeholders and legislators, reaching far beyond the settling parties. The Department of the Interior, the State of California, the Friant Water Users Authority, the Natural Resources Defense Council on behalf of 13 other environmental organizations and countless other stakeholders came together and spent countless hours with legislators in Washington to ensure that we found a solution that the large majority of those affected could support.

Last month, California voters showed their support by approving Propositions 84 and 1E that will help pay for the settlement by committing at least $100 million and likely $200 million or more toward the restoration costs. Indeed, this legislation includes a diverse mix of approximately $200 million in direct Water User payments, new State payments, $240 million in dedicated Friant Central Valley Project capital repayments, and future Federal appropriations limited to $250 million. This mix of funding sources is intended to ensure that the river restoration program will be sustainable over time and truly a joint effort of Federal, State and local agencies.

I would like to emphasize that the Federal funding in the bill is for implementation of both the restoration goal to reestablish a salmon fishery in the river, and the water management goal to avoid or minimize water supply losses supplied by Friant Water Districts. It is important to recognize that these efforts are of equal importance.

At the end of the day, I believe that this agreement is something that we can all feel very proud of, and I urge my colleagues in the Senate to move quickly to approve this legislation and provide the administration the authorization it needs to fully carry out its legal obligations and the extensive restoration opportunities under the settlement.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today with my colleagues--Senator Lincoln from Arkansas, Senator Charles Grassley from Iowa, and Senator Max Baucus from Montana--to introduce the Endangered Species Recovery Act or ESRA. Nearly a year ago, Senator Lincoln and I introduced the Collaboration for the Recovery of the Endangered Species Act, or CRESA, an earlier bill to amend the Endangered Species Act or ESA. This new bill, which does not amend the current ESA, builds on ideas set forth in CRESA. It creates new policies that finance the recovery of endangered species by private landowners. ESRA makes it simpler for landowners to get involved in conservation and reduces the conflict often emanating from the ESA. It will be an important codification of much-needed incentives to help recover endangered species.

Over 80 percent of endangered species live on private property. Under the current law, however, there are too few incentives and too many obstacles for

private landowners to participate in conservation agreements to help recover species under the ESA. ESRA, like the voluntary farm bill conservation programs that inspired its creation, will make it more attractive for private landowners to contribute to the recovery of species under the ESA.

This bill resulted from effective and inclusive collaboration among key stakeholders most affected by the implementation of the ESA. Landowner interests include farmers, ranchers, and those from the natural resource-using communities. For example, some current supporters of ESRA who contributed invaluable advice are the American Farm Bureau, the National Cattlemen's Beef Association, and the Society of American Foresters. This could not rightly be called a collaborative project without the vital and necessary input received from the Defenders of Wildlife, Environmental Defense and the National Wildlife Federation--key environmental groups that made significant contributions. And they further understand that landowners must be treated as allies to ensure success in the long-run for the conservation of habitat and species. Finally, while the genesis of this bill has many roots, a passionate catalyst was James Cummins of Mississippi Fish and Wildlife Foundation, whose passion for the outdoors provided inspiration to move these ideas forward.

This collaborative expertise worked together to craft the ESRA, which provides new tax incentives for private landowners who voluntarily contribute to the recovery of endangered species. The tax credits will reimburse landowners for property rights affected by agreements that include conservation easements and costs incurred by species management plans. For landowners who limit their property rights through conservation easements, there will be 100 percent compensation of all costs. That percentage declines to 75 percent for 30-year easements and 50 percent for cost-share agreements not encumbered by an easement.

It is worth noting that this is the same formula that works successfully for farm bill programs such as the Wetlands Reserve Program. Private property owners are appropriately rewarded for crucial ecological services that they provide with their property. The public benefits from those actions which ensure biodiversity; instead of placing the financial burdens on the landowner, we ought to find appropriate ways to compensate them. While the primary returns from this investment are protection and recovery of endangered species, the public will also undoubtedly gain additional benefits such as aesthetically pleasing open space, combating invasive species and enhanced water quality.

The legislation provides a list of options that give landowners a choice, and this is a crucial element for the success of this proposal. For some landowners, a conservation easement will be the most attractive option. Easements are flexible tools that can be tailored to each landowner and species' interests. An easement restricts certain activities, but it still works well with traditional rural activities such as ranching and farming. For agreements without easements, there is flexibility to do what is necessary for the concerned species without the need to sacrifice property rights into perpetuity.

The tax credits provide essential funding that is necessary to respect private property rights. Wildlife should be an asset rather than a liability; which is how it has sometimes been viewed under the ESA. With wildlife becoming valuable to a landowner, those who may been reluctant to participate in recovery efforts in the past will be more likely to contribute with these incentives. When people want to take part in the process and do not fear it, the likelihood of conflict and litigation is reduced. For years, this type of conflict has proven costly not only in dollars to individuals and the government, but also in terms of relationships between people who share the land and natural resources. With a new trust and new model for finding conservation solutions, we can do more and better conservation work.

Provisions have been made to accommodate landowners whose taxes may be less than the tax credit provides. Partnerships in the agreements will allow any party to an agreement to receive a credit as long as they pay or incur costs as a result of the agreement. This language will allow creative collaboration among governments, landowners, taxpayers and environmentalists, further increasing the number of people involved in finding new solutions for conservation.

Furthermore, this bill also expands tax deductions for any landowner who takes part in the recovery plans approved under the ESA, and allows landowners to exclude from taxable income certain federal payments under conservation costshare programs. This will allow both individuals and businesses to deduct the cost of recovery work without bureaucratic obstacles.

This bill not only sets forth the financing for private landowners, but it also makes it easier to implement the agreements. Landowners will receive technical assistance to implement the agreements. Also, to remove some legal disincentives to recover species, liability protection may be provided to protect the landowners from penalties under the ESA. This removes the fear of trying to help species; currently, more species usually just means more liability for a landowner.

As a result of these incentives, I expect to see a phenomenal increase in the number of success stories. These stories will sound familiar to those creative collaborators working on the ground now where we have learned that the types of tools provided in this bill can work if consistently offered.

The Endangered Species Recovery Act is very exciting to those of us who value protecting our natural resources. It provides collaborative, creative ways to balance resource conservation with economic uses of our natural resources and preserving rural ways of life. I look forward to working with my colleagues in the Senate and House to move ahead with this legislation which will allow better, more effective conservation work for future generations.

I am deeply grateful to my colleagues from Arkansas, Iowa and Montana for their essential expertise and support to create ESRA. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, as we all know, there was a tremendous amount of criticism of the Federal Government's response to Hurricanes Katrina and Rita last year. Things are better now and the region is slowly recovering. But having just finished the 2006 Hurricane season, and with the 2007 season a few months away, we must be sure that if we have another disaster, the Federal Government's response will be better this time around. Disaster response agencies have to be better organized, more efficient, and more responsive in order to avoid the problems, the delays, mismanagement, and the seeming incompetence that occurred last year.

Today, I am proud to be an original cosponsor of legislation to improve the disaster response of one agency that had a great deal of problems last year, the Small Business Administration, SBA. This bill, the Small Business Disaster Response and Loan Improvements Act, makes major improvements to the SBA's disaster response and provides them with essential tools to ensure that they are more efficient and better prepared for future disasters--big and small. I should also note that this bill is a result of intensive bipartisan work over the past few months. As such, it is reflective of the priorities from Senators Snowe and Kerry, respectively chair and ranking member of the Senate Small Business Committee, as well as Senator Landrieu. For my part, I have heard loud and clear from our impacted businesses that SBA reforms should be implemented as soon as possible. That is why in September, I sent a letter to the new SBA Administrator Steve Preston, expressing concerns on the lack of progress on SBA Disaster reforms, which were included in S. 3778, the fiscal year 2007 SBA reauthorization bill reported out of the Senate Small Business Committee. In this letter, I requested his cooperation, along with our committee, to pass this important legislation before Congress adjourns at the end of the year. The introduction of this bill today, shows the progress that the committee made since September on this issue. I hope that this spirit of bipartisanship continues well into the 110th Congress and that I can continue to work with my colleagues on the Senate Small Business Committee to reform SBA.

This legislation offers new tools to enhance SBA's disaster assistance programs. In every disaster, the SBA disaster loan program is a lifeline for businesses and homeowners who want to rebuild their lives after a catastrophe. When Katrina hit, our businesses and homeowners had to wait months for loan approvals. I do not know how many businesses we lost because help did not come in time. Because of the scale of this disaster, what these businesses needed was immediate, short-term assistance to hold them over until SBA was ready to process the tens of thousands of loan applications it received.

That is why this legislation provides the SBA Administrator with the ability to set up an expedited disaster assistance business loan program to make short-term, low-interest loans to keep them afloat. These loans will allow businesses to make payroll, begin making repairs, and address other immediate needs while they are awaiting insurance payouts or regular SBA disaster loans. However, I realize that every disaster is different and could range from a disaster on the scale of Hurricane Katrina or 911, to an ice storm or drought. This legislation gives the SBA additional options and flexibility in the kinds of relief they can offer a community. When a tornado destroys 20 businesses in a small town in the Midwest, SBA can get the regular disaster program up and running fairly quickly. You may not need short- term loans in this instance. But if you know that SBA's resources would be overwhelmed by a storm--just as they were initially with Katrina-- these expedited business loans would be very helpful.

This legislation also would direct SBA to study ways to expedite disaster loans for those businesses in a disaster area that have a good, solid track record with the SBA or can provide vital recovery efforts. We had many businesses in the gulf coast that had paid off previous SBA loans, were major sources of employment in their communities, but had to wait months for decisions on their SBA disaster loan applications. I do not want to get rid of the SBA's current practice of reviewing applications on a first-come- first-served basis, but there should be some mechanism in place for major disasters to get expedited loans out the door to specific businesses that has a positive record with SBA or those that could serve a vital role in the recovery efforts. Expedited loans would jump- start impacted economies, get vital capital out to businesses, and retain essential jobs following future disasters.

This bill also makes an important modification to the collateral requirements for disaster loans. The SBA cannot disburse more than $10,000 for an approved loan without showing collateral. This is to limit the loss to the SBA in the event that a loan defaults. However, this disbursement amount has not been increased since 1998, and these days, $10,000 is not enough to get a business up and running. That is why this bill increases this collateral requirement to $14,000 and gives the Administrator the ability to increase that amount, in the event of another large-scale disaster. I believe this is a reasonable and fiscally responsible increase, and at the same time gives the Administrator flexibility for future disasters which will inevitably occur.

As you may know, pushed to get language in the last hurricane supplemental appropriations bill in June 2006 to require SBA to develop a disaster plan and report to Congress on its contents by July 15, 2006. SBA provided this status report in July, and I am pleased that, since then, SBA has been working on a comprehensive disaster response plan. That said, I believe that with the 2007 Atlantic hurricane season fast approaching, and other disasters possible before then, the SBA should be looking at additional ways to improve upon this plan. This legislation requires SBA to report to Congress, by March 15, 2007, on the current status of its response plan and to provide us with a snapshot of where they were with Katrina and where they are now. The report also requests SBA feedback on suggested improvements. These improvements include better incorporating State disaster assistance efforts into SBA's response, as well as better coordination with Federal response agencies like FEMA.

The Small Business Disaster Response and Loan Improvements Act will provide essential tools to make the SBA more proactive, flexible, and most important, more efficient during future disasters. Again, I look forward to working with both Senator Snowe and Senator Kerry during the 110th Congress to ensure that the SBA has everything it needs to meet these goals.

I thank the Chair and ask that my entire statement appear in the Record. I also ask unanimous consent that a copy of my September 27, 2006, letter to SBA be printed in the Record at the conclusion of my statement.

Mr. President, as we all know, there was a tremendous amount of criticism of the Federal Government's response to Hurricanes Katrina and Rita last year. Things are better now and the region is slowly recovering. But having just finished the 2006 Hurricane season, and with the 2007 season a few months away, we must be sure that if we have another disaster, the Federal Government's response will be better this time around. Disaster response agencies have to be better organized, more efficient, and more responsive in order to avoid the problems, the delays, mismanagement, and the seeming incompetence that occurred last year.

Today, I am proud to be an original cosponsor of legislation to improve the disaster response of one agency that had a great deal of problems last year, the Small Business Administration, SBA. This bill, the Small Business Disaster Response and Loan Improvements Act, makes major improvements to the SBA's disaster response and provides them with essential tools to ensure that they are more efficient and better prepared for future disasters--big and small. I should also note that this bill is a result of intensive bipartisan work over the past few months. As such, it is reflective of the priorities from Senators Snowe and Kerry, respectively chair and ranking member of the Senate Small Business Committee, as well as Senator Landrieu. For my part, I have heard loud and clear from our impacted businesses that SBA reforms should be implemented as soon as possible. That is why in September, I sent a letter to the new SBA Administrator Steve Preston, expressing concerns on the lack of progress on SBA Disaster reforms, which were included in S. 3778, the fiscal year 2007 SBA reauthorization bill reported out of the Senate Small Business Committee. In this letter, I requested his cooperation, along with our committee, to pass this important legislation before Congress adjourns at the end of the year. The introduction of this bill today, shows the progress that the committee made since September on this issue. I hope that this spirit of bipartisanship continues well into the 110th Congress and that I can continue to work with my colleagues on the Senate Small Business Committee to reform SBA.

This legislation offers new tools to enhance SBA's disaster assistance programs. In every disaster, the SBA disaster loan program is a lifeline for businesses and homeowners who want to rebuild their lives after a catastrophe. When Katrina hit, our businesses and homeowners had to wait months for loan approvals. I do not know how many businesses we lost because help did not come in time. Because of the scale of this disaster, what these businesses needed was immediate, short-term assistance to hold them over until SBA was ready to process the tens of thousands of loan applications it received.

That is why this legislation provides the SBA Administrator with the ability to set up an expedited disaster assistance business loan program to make short-term, low-interest loans to keep them afloat. These loans will allow businesses to make payroll, begin making repairs, and address other immediate needs while they are awaiting insurance payouts or regular SBA disaster loans. However, I realize that every disaster is different and could range from a disaster on the scale of Hurricane Katrina or 911, to an ice storm or drought. This legislation gives the SBA additional options and flexibility in the kinds of relief they can offer a community. When a tornado destroys 20 businesses in a small town in the Midwest, SBA can get the regular disaster program up and running fairly quickly. You may not need short- term loans in this instance. But if you know that SBA's resources would be overwhelmed by a storm--just as they were initially with Katrina-- these expedited business loans would be very helpful.

This legislation also would direct SBA to study ways to expedite disaster loans for those businesses in a disaster area that have a good, solid track record with the SBA or can provide vital recovery efforts. We had many businesses in the gulf coast that had paid off previous SBA loans, were major sources of employment in their communities, but had to wait months for decisions on their SBA disaster loan applications. I do not want to get rid of the SBA's current practice of reviewing applications on a first-come- first-served basis, but there should be some mechanism in place for major disasters to get expedited loans out the door to specific businesses that has a positive record with SBA or those that could serve a vital role in the recovery efforts. Expedited loans would jump- start impacted economies, get vital capital out to businesses, and retain essential jobs following future disasters.

This bill also makes an important modification to the collateral requirements for disaster loans. The SBA cannot disburse more than $10,000 for an approved loan without showing collateral. This is to limit the loss to the SBA in the event that a loan defaults. However, this disbursement amount has not been increased since 1998, and these days, $10,000 is not enough to get a business up and running. That is why this bill increases this collateral requirement to $14,000 and gives the Administrator the ability to increase that amount, in the event of another large-scale disaster. I believe this is a reasonable and fiscally responsible increase, and at the same time gives the Administrator flexibility for future disasters which will inevitably occur.

As you may know, pushed to get language in the last hurricane supplemental appropriations bill in June 2006 to require SBA to develop a disaster plan and report to Congress on its contents by July 15, 2006. SBA provided this status report in July, and I am pleased that, since then, SBA has been working on a comprehensive disaster response plan. That said, I believe that with the 2007 Atlantic hurricane season fast approaching, and other disasters possible before then, the SBA should be looking at additional ways to improve upon this plan. This legislation requires SBA to report to Congress, by March 15, 2007, on the current status of its response plan and to provide us with a snapshot of where they were with Katrina and where they are now. The report also requests SBA feedback on suggested improvements. These improvements include better incorporating State disaster assistance efforts into SBA's response, as well as better coordination with Federal response agencies like FEMA.

The Small Business Disaster Response and Loan Improvements Act will provide essential tools to make the SBA more proactive, flexible, and most important, more efficient during future disasters. Again, I look forward to working with both Senator Snowe and Senator Kerry during the 110th Congress to ensure that the SBA has everything it needs to meet these goals.

I thank the Chair and ask that my entire statement appear in the Record. I also ask unanimous consent that a copy of my September 27, 2006, letter to SBA be printed in the Record at the conclusion of my statement.