Disadvantaged Business Disaster Eligibility Act

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 1468, the Disadvantaged Business Disaster Eligibility Act. This legislation, as the chairwoman indicated, would simply extend for 18 months the period of time that 8(a) Small Business Development Program participants who enrolled in the program prior to August 29 of 2005 could stay in the program by 18 months if they had their businesses primarily located in the area devastated by Hurricane Katrina.

The 8(a) Small Business Development Program, administered by the Small Business Administration, provides a useful mechanism for aspiring entrepreneurs and existing small business owners who, for social or economic reasons, may not have the same opportunities other small business owners have had and face challenging barriers to their success.

Entrepreneurs who participate in the 8(a) program undergo an extensive 9-year process, where they obtain specialized business training, counseling, marketing assistance, and high-level executive development. They also receive additional help in the form of low- interest loans, access to government surplus office equipment, and bonding assistance.

The Small Business Development Program provides many of the tools needed for any small business to succeed. Most significantly, the program assists these entrepreneurs in obtaining Federal Government contracts as a base from which to grow their businesses. Given the devastation to the gulf coast region by Hurricane Katrina, access to Federal Government contracts constitutes an important component of the region's rebirth, and I think we all agree that we all want to see the rebirth in that area occur.

Tragically, as every American remembers, the late summer of 2005 proved to be one of the most catastrophic in American history. The 9.7 million Americans residing on the gulf coast of Alabama, Louisiana, and Mississippi were victims of an unprecedented natural disaster, which, unfortunately, has become a nightmare that is etched in all our memories and a daily challenge for those who lived through it.

The storms of 2005 drowned 80 percent of New Orleans in seawater, killed in excess of 1,600 people, destroyed more than 200,000 gulf coast homes, and displaced more than 1 million of our fellow Americans. Starting a new business is challenging under normal circumstances. Only two-thirds of them make it through their first 2 years. And needless to say, the devastation along the gulf coast compounds this difficulty exponentially.

This legislation provides some additional time for those businesses facing the 9-year participation deadline provided for in the 8(a) program to get back on their feet. Nothing in the Small Business Act currently allows for an extension of participation as a result of extraordinary circumstances such as those created by Hurricane Katrina.

For business owners that may not have had access to their businesses or their customers for months, the rigidity of the Small Business Act seems unduly harsh. An additional 18 months of assistance to firms who face an uphill battle before the storms hit who are now hanging on by a thread after the storms have passed is truly the least that we can do.

Today I encourage my colleagues to support this necessary legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

I thank the gentlewoman for yielding, and I am pleased to sponsor H.R. 1468, the Disadvantaged Business Disaster Eligibility Act. I would like to thank Chairwoman Velazquez as well as Ranking Member Chabot for their leadership in committee on this important bill. I would also like to thank the other members of the committee for voting in a bipartisan spirit to bring this measure to the floor in an expeditious manner.

This bill provides that if a small business affected by Hurricane Katrina that participates in any section 8(a) business development program, the eligibility period for its participation in such program is extended by 18 months.

The 8(a) program was designed as a 9-year business development program geared toward small businesses owned by citizens who are socially and economically disadvantaged. This program is of benefit to emerging African American, Hispanic, Asian American, and nonminority women-owned firms included in the program's coverage. Once the eligibility for the 9-year program has run out, the small business participating in the program is ineligible to re-enter it. When Hurricane Katrina ripped through New Orleans on August 29, 2005, it left 80,000 businesses damaged or destroyed, 97 percent of which were small businesses. A significant percentage were participating in the 8(a) program and were forced to shut down for an extended period of time, losing time in the program

through a series of events far beyond their control. It is only right and fair that we extend the period of eligibility so that the affected disadvantaged businesses are allowed to grow and flourish and enjoy the full 9 years of the program.

Nineteen months since Katrina struck, most of our 8(a) firms across the gulf coast are still struggling to return.

This bill is about equity and fairness at a time when the road to recovery has been anything but fair for disadvantaged firms in the region. For example, in the time just following the storm, 90 percent of the $2 billion in initial contracts were awarded to companies based outside of the three primary affected States and to large concerns. Minority businesses received just 1.5 percent of the first $1.6 billion spent there. Women-owned businesses received even less. This was the outcome in spite of laws such as the Stafford Act, which require contracting officials to prioritize awards to local businesses and to reach a goal of 5 percent of contracts to minority-owned businesses.

The continued recovery from Katrina is made up of many interconnected issues, and we cannot fully recover without addressing all of them. Helping small businesses, as this and other bills such as the RECOVER Act do, restores jobs that our citizens can return home to and puts our businesses back on track. It broadens the tax base of our region and helps with our recovery.

I look forward to continuing to work on the Small Business Committee with Ms. Velazquez and Mr. Chabot to address the needs of small businesses in the gulf region.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1468) to ensure that, for each small business participating in the 8(a) business development program that was affected by Hurricane Katrina of 2005, the period in which it can participate is extended by 18 months, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, Hurricane Katrina forced evacuation of individuals and business owners who are only recently recovering and rebuilding. Clearly, through no fault of their own, these firms have been disrupted.

A number of these businesses are participants in the SBA's 8(a) program, the primary way that minority entrepreneurs enter the Federal marketplace. 8(a) is a business development initiative, and that is what the companies in the gulf region need right now.

Because of the magnitude of the disaster, these companies need additional time in the 8(a) program. This will counterbalance the period of inoperability these firms experienced due to Hurricane Katrina. And I commend my colleague Mr. Jefferson from Louisiana for offering this solution.

As currently structured, the program allows businesses to participate for a limited length of time. They are given 9 years and 9 years only. Even if the companies fail, they can never reapply and get back in.

In this way 8(a) is different than any other SBA procurement initiative, which allow companies to be certified for increments of 3 years. As long as they meet the eligibility criteria, they can continue being recertified without end.

It is because of this limitation that the 8(a) program is simply not structured to respond to companies that have been victimized by disasters.

This bill is targeted and narrow. It applies only to 8(a) program participants in Alabama, Mississippi, or Louisiana that were impacted by this disaster. At most, this represents barely 4 percent of all 8(a) participants. Eighteen months is not a significant amount of time, but it could play a major role in ensuring that these businesses are able to participate in the rebuilding of their home States.

I urge support of this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Louisiana (Mr. Jefferson).

Mr. Speaker, I would like to thank the gentleman from Ohio (Mr. Chabot) for his support and cooperation in helping expedite this legislation.

Mr. Speaker, I yield back the balance of my time.