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Public Statements

Statements On Introduced Bills And Joint Resolutions

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Date:
Location: Washington, DC


STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - March 01, 2007)

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By Ms. LANDRIEU (for herself, Ms. SNOWE, Mr. KERRY, and Mr. COLEMAN):

S. 738. A bill to amend the Small Business Act to improve the Office of International Trade, and for other purposes; to the Committee on Small Business and Entrepreneurship.

Ms. LANDRIEU. Mr. President, as I come to the floor today to speak, there are countless small businesses in the Gulf Coast, right this moment, that are open for business. The fact that they are open at all is a testament to the hard work and resolve of their owners, along with the focus and commitment of community leaders, state and local officials, as well as Congress and the White House. This is because, as you know, the Gulf Coast was devastated in 2005 by two of the most powerful storms to ever hit the United States in recorded history--Hurricanes Katrina and Rita.

I strongly believe that we cannot rebuild the Gulf Coast without our small businesses. Small businesses not only create jobs and pay taxes--they provide the innovation and energy that drives our economy. In fact, before Katrina and Rita hit, there were more than 95,000 small businesses in Louisiana, employing about 850,000 people--more than half of my State's workforce. About 39,000 of these businesses have yet to resume normal operations so I intend to do everything I can in the coming months to get them back up and running.

That is why today I am introducing legislation to first help small businesses in the Gulf recover, as well as to provide assistance to businesses in other parts of the country. In particular, this legislation is focused on promoting exports by U.S. small businesses. Small businesses are important players in international trade, which is reflected in the fact that small businesses represent that 96 percent of all exporters of goods and services. In Louisiana, we have about 2,000 declared exporters. However, there are many more businesses in my State who conduct Internet sales overseas, as well as those who focus operations on domestic sales but have some international buyers as well. These businesses are exporters but in many cases they do not even realize it!

Given the importance of these exporters to my state and to the rest of the country, I would like to improve their competitive edge in the international market and give them every resource they need to succeed. Certainly my first priority is to provide additional assistance to affected Gulf Coast small businesses. As they continue to recover, one of the main issues being faced by our small business is accessing capital. Our exporters are no different. They need help accessing export financing to cover export-related costs such as purchasing equipment, purchasing inventory, or financing production costs. This legislation would help strengthen the SBA International Finance Specialist program to help these small businesses access export financing.

Today I am introducing the Small Business International Trade Enhancements Act of 2007 to give all small businesses the opportunity to expand their operations into international markets. I am pleased to have Senator KERRY, the Chair of the Senate Small Business Committee, as well as Senator SNOWE, the Ranking Member, and my colleague Senator COLEMAN, as cosponsors.

As I mentioned we have 2,000 exporters in Louisiana. However, there are many other businesses who are exporters, but they do not even realize it. They may have overseas Internet sales, or they focus operations on domestic sales, but have some international buyers as well. In fact, the Small Business Administration has stated that over 96 percent of all exporters of goods and services are small businesses.

Given the importance of these exporters to my State and to the rest of the Gulf Coast, I would like to improve their competitive edge in the international market and give them every resource they need to succeed. As they continue to recover, one of the main issues being faced by our small business is accessing capital. Our exporters are no different. They need help accessing export financing to cover export-related costs such as purchasing equipment, purchasing inventory, or financing production costs.

To assist these businesses, fifteen SBA Finance Specialists operate out of 100 U.S. Export Assistance Centers administered by the Department of Commerce around the country. That is a record staffing low for this program, down from a peak of 22 Finance Specialists in 2000. To ensure that all smaller exporters nationwide will continue to have access to export financing, this bill establishes a floor of 18 International Finance Specialists. I believe this will send a signal to our exporters that, despite current budget deficits, we are committed to our exporters and want to provide them with the necessary resources to compete internationally.

I realize that the need for export financing is not just limited to the Gulf Coast. There are small businesses nationwide that are looking to find markets overseas. One tool that they can use is the SBA's International Trade Loan (ITL) program. International Trade Loans can help exporters develop and expand overseas markets; upgrade equipment or facilities; and assist exporters that are being hurt by import competition. Exporters can borrow up to $2 million, with $1,750,000 guaranteed by SBA.

However, as currently structured these loans are not user-friendly to lenders or borrowers and, as a result, are underutilized. Let me explain what I mean. First, the $250,000 difference between the loan cap and the guarantee requires borrowers to take out a second SBA loan to take full advantage of the $2 million guarantee. ITLs can only be used to acquire fixed assets and not working capital, a common need for exporters. Furthermore, ITLs do not have the same collateral or refinancing requirements as SBA 7(a) loans. Because of these issues, lenders do not use these loans.

This legislation will also reduce the paperwork by increasing the maximum loan guarantee to $2,750,000 and the loan cap to $3,670,000 to bring it more in line with the 7(a) program. The bill also creates a more flexible ITL by setting out that working capital is an eligible use for loan proceeds, in addition to making the ITL consistent with regular 7(a) loans by allowing the same collateral and refinancing terms as with 7(a).

The SBA International Trade and Export Loans are valuable tools for exporters but they are useless if there is no one to assist borrowers with identifying which loans are right for them. Local lending institutions that specialize in export financing can help but at a cost over less than $2 million per year, the current group of Finance Specialists has obtained bank financing for more than $10 billion in U.S. exports since 1999. The $10 billion in export sales financed by these specialists helped to create over 140,000 new, high-paying U.S. jobs.

The Small Business International Trade Enhancements Act of 2007 is an important first step, not just for exporters in the Gulf Coast, but also for small businesses nationwide who are looking to open markets overseas. I urge my colleagues to support this legislation since it will help our exporters in the Gulf Coast recover and also give small businesses nationwide more options when they are seeking export financing.

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

There being no objection, the bill was ordered to be printed in the Record

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By Ms. LANDRIEU:

S. 745. A bill to provide for increased export assistance staff in areas in which the President declared a major disaster as a result of Hurricane Katrina of 2005 and Hurricane Rita of 2005; to the Committee on Small Business and Entrepreneurship.

Ms. LANDRIEU. Mr. President, as I come to the floor today to speak, there are countless small businesses in the Gulf Coast, right this moment, that are open for business. The fact that they are open at all is a testament to the hard work and resolve of their owners, along with the focus and commitment of community leaders, state and local officials, as well as Congress and the White House. This is because, as you know, the Gulf Coast was devastated in 2005 by two of the most powerful storms to ever hit the United States in recorded history--Hurricanes Katrina and Rita.

I strongly believe that we cannot rebuild the Gulf Coast without our small businesses. Small businesses not only create jobs and pay taxes--they provide the innovation and energy that drives our economy. In fact, before Katrina and Rita hit, there were more than 95,000 small businesses in Louisiana, employing about 850,000 people--more than half of my State's workforce. About 39,000 of these businesses have yet to resume normal operations so I intend to do everything I can in the coming months to get them back up and running.

That is why today I am introducing legislation to help provide the necessary staff to help our small businesses in the Gulf recover from the devastating storms of 2005. In particular, this legislation is focused on promoting exports by small businesses Louisiana, Mississippi, and Alabama. Small businesses are important players in international trade, which is reflected in the fact that small businesses represent that 96 percent of all exporters of goods and services In Louisiana, we have about 2,000 declared exporters. However, there are many more businesses in my state who conduct Internet sales overseas, as well as those who focus operations on domestic sales but have some international buyers as well. These businesses are exporters but in many cases they do not even realize it!

Given the importance of these exporters to my State and to the rest of the country, I would like to improve their competitive edge in the international market and give them every resource they need to succeed. As our businesses continue to recover, one of the main issues being faced by our small businesses is accessing capital. They need help accessing export financing to cover export-related costs such as purchasing equipment, purchasing inventory, or financing production costs.

To assist businesses with obtaining export financing, fifteen SBA Finance Specialists operate out of 100 U.S. Export Assistance Centers administered by the Department of Commerce around the country. However, despite the increased need for export financing in the Gulf Coast, there is currently no International Finance Specialist located in any of the hardest hit States of Mississippi, Alabama and Louisiana. Instead there is one specialist in Texas with responsibility for Texas, Oklahoma, Arkansas and Louisiana and one specialist in Georgia responsible for Georgia, Alabama, Kentucky, Tennessee, and Mississippi. Due to the extensive territories they cover and limited travel budgets of the staff, these specialists must divide their time and cannot focus on the needs of Gulf Coast small businesses.

With this in mind, this legislation would provide an SBA International Finance Specialist to the New Orleans U.S. Export Assistance Center with responsibility for Louisiana, Alabama, and Mississippi. I believe this is a commonsense approach, since this position in New Orleans has remained vacant since 2003 due to retirement and

budget issues. So this is not a new position or a new hire, it is simply filling a position that has sat open for far too long.

The Gulf Coast Export Recovery Act of 2007 would also address Commerce staffing issues for our New Orleans U.S. Export Assistance Center. In this office, there is currently four full-time export assistance staff, along with one Foreign Service Officer. This office has had two staffers leave the office since Katrina and I am concerned that when this Foreign Service Officer leaves this fall, that there will be no replacement. This understaffed office is struggling to keep up with the increasing demands from businesses for technical assistance on finding overseas markets for local products, particularly businesses near Baton Rouge and the River parishes. Staff in New Orleans cover south Louisiana as well as the coastal counties in Mississippi. With such a wide area to cover, and so few staff, they are doing a great job in providing services but obviously need additional help to fully service our local businesses. The Small Business International Trade Enhancements Act of 2007 would provide one additional full-time staffer to this office to assist our businesses in the parishes of East Baton Rouge, West Baton Rouge, Iberville, Pointe Coupee, St. Martin, St. Landry and Iberia. Many of our businesses from the New Orleans area are relocating to these parishes so we need adequate staff to keep up with increasing export needs in the area.

In closing, I should note that both of these provisions were included in the Commerce, Justice, Science Appropriations bill that was reported out of committee last Fall. Unfortunately, since that bill was not enacted, these provisions did not become law and our small business exporters have waited an additional 7 months for increased export assistance resources. I do not want them to have to wait another 7 months for this vital assistance. We are only asking for two full-time staffers for an office, but these two staffers would make a world of difference for the businesses, as well as for the understaffed office down there. I believe both the Department of Commerce and the Small Business Administration are supportive of these staffing increases so I look forward to working with them in the coming months to address these staffing needs in New Orleans. I urge my colleagues to support this legislation since it will help our exporters in the Gulf Coast fully recover and will help the country as a whole by increasing exports from the Gulf Coast states.

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

There being no objection, the text of the bill was ordered to be printed in the Record

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