Mr. COCHRAN. Mr. President, I am pleased to join the Senator from Louisiana in introducing the Small Business Disaster Recovery Act. The purpose of this bill is to streamline certain burdensome procedures for small businesses that are affected by a Presidentially declared disaster. This bill would complement provisions adopted by this body and enacted into law earlier this year that the Senator from Louisiana and I sponsored to improve FEMA procedures. Like the bill we are introducing today, we derived these provisions from our States' experiences with Hurricane Katrina. They will not cost anything, but they will improve government services at times when they are most critical.
Through two budget-neutral provisions, this bill continues to improve the way we respond and recover from disasters using the lessons that we have learned from past disasters. Current practice dictates that small business owners can only use their homes as collateral for a post-disaster loan. The legislation's first provision clarifies that the collateral requirement for SBA disaster loans can include business assets of actual value other than a primary residence. This removes a key obstacle to small business owners who want to restart operations after a disaster but are unable or unwilling to use their homes when they could conceivably provide sufficient business assets as collateral for the loan.
The bill clearly states that these assets should be of equal or greater value to the amount of the loan and ensures that the Small Business Administration is responsive to the needs of small businesses seeking disaster loans less than the maximum allowable. I encourage the Small Business Administration to ensure that the asset requirements for collateral are established in a way that minimizes any potential waste, fraud, and abuse. This bill will maintain the traditional standards for appropriate collateral assets, which includes commercial real estate, machinery and equipment, business inventory, and furniture and fixtures.
The second provision included in this legislation addresses assistance provided by small business development centers, or SBDCs, to out-of-State businesses. It seeks to repeal processes that discourage SBDCs to work across State lines when doing so actually makes good sense. Sharing resources and knowledge across State lines is essential when disasters overwhelm local capacity or expertise. This legislation has the support of the Association of Small Business Development Centers and the International Economic Development Council because it encourages such information and resource sharing.
I am pleased to join the distinguished Senator from Louisiana in encouraging States and SBDC networks to formalize partnerships across State lines before disasters strike. We are both aware that any action or decision that takes place prior to a disaster is an action that does not waste time or resources during a time of crisis. The Emergency Management Assistance Compact system shows how well this can work.
I thank the Senator from Louisiana and her staff for working with me and my staff to make sure that this legislation addresses the need for SBDCs to be properly reimbursed for work when they appropriately respond to concerns in another state.
The reforms in this bill represent commonsense lessons that we have learned from our constituents after experiencing the effects of some of the most severe natural disasters in our Nation's history. I urge serious consideration of this legislation and invite other Senators to cosponsor this bill.