I 

111TH CONGRESS 

1ST SESSION H. R. 3743 

To amend the Small Business Act to improve the disaster relief programs 

of the Small Business Administration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 7, 2009 

Mr. GRIFFITH introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To amend the Small Business Act to improve the disaster 

relief programs of the Small Business Administration, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Dis5 aster Readiness and Reform Act of 2009’’. 

6 SEC. 2. REVISED COLLATERAL REQUIREMENTS. 

7 Section 7 of the Small Business Act (15 U.S.C. 636) 

8 is amended— 

9 (1) by striking ‘‘(e) [RESERVED].’’ and ‘‘(f) 

10 [RESERVED].’’; and 


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1 (2) in subsection (f), as added by section 

2 12068(a)(2) of the Small Business Disaster Re3 sponse and Loan Improvements Act of 2008 (sub4 title B of title XII of the Food, Conservation, and 

5 Energy Act of 2008; Public Law 110–246), by add6 ing at the end the following: 

7 ‘‘(2) REVISED COLLATERAL REQUIREMENTS.— 

8 In making a loan with respect to a business under 

9 subsection (b), if the total approved amount of such 

10 loan is less than or equal to $250,000, the Adminis11 trator may not require the borrower to use the bor12 rower’s home as collateral.’’. 

13 SEC. 3. INCREASED LIMITS. 

14 Section 7(b) of the Small Business Act (15 U.S.C. 

15 636(b)) is amended— 

16 (1) in paragraph (3)(E) by striking 

17 ‘‘$1,500,000’’ each place it appears and inserting 

18 ‘‘$3,000,000’’; and 

19 (2) in paragraph (8)(A) by striking 

20 ‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 

21 SEC. 4. REVISED REPAYMENT TERMS. 

22 Section 7(f) of the Small Business Act (15 U.S.C. 

23 636(f)) is amended by adding at the end the following: 

24 ‘‘(3) REVISED REPAYMENT TERMS.—In making 

25 loans under subsection (b), the Administrator— 


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1 ‘‘(A) may not require repayment to begin 

2 until the date that is 12 months after the date 

3 on which the final disbursement of approved 

4 amounts is made; and 

5 ‘‘(B) shall calculate the amount of repay6 ment based solely on the amounts disbursed.’’. 

7 SEC. 5. REVISED DISBURSEMENT PROCESS. 

8 Section 7(f) of the Small Business Act (15 U.S.C. 

9 636(f)), as amended by this Act, is further amended by 

10 adding at the end the following: 

11 ‘‘(4) REVISED DISBURSEMENT PROCESS.—In 

12 making a loan under subsection (b), the Adminis13 trator shall disburse loan amounts in accordance 

14 with the following: 

15 ‘‘(A) If the total amount approved with re16 spect to such loan is less than or equal to 

17 $150,000— 

18 ‘‘(i) the first disbursement with re19 spect to such loan shall consist of 40 per20 cent of the total loan amount, or a lesser 

21 percentage of the total loan amount if the 

22 Administrator and the borrower agree on 

23 such a lesser percentage; 

24 ‘‘(ii) the second disbursement shall 

25 consist of 50 percent of the loan amounts 


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1 that remain after the first disbursement, 

2 and shall be made when the borrower has 

3 produced satisfactory receipts to dem4 onstrate the proper use of 50 percent of 

5 the first disbursement; and 

6 ‘‘(iii) the third disbursement shall 

7 consist of the loan amounts that remain 

8 after the preceding disbursements, and 

9 shall be made when the borrower has pro10 duced satisfactory receipts to demonstrate 

11 the proper use of the first disbursement 

12 and 50 percent of the second disburse13 ment. 

14 ‘‘(B) If the total amount approved with re15 spect to such loan is more than $150,000 but 

16 less than or equal to $500,000— 

17 ‘‘(i) the first disbursement with re18 spect to such loan shall consist of 20 per19 cent of the total loan amount, or a lesser 

20 percentage of the total loan amount if the 

21 Administrator and the borrower agree on 

22 such a lesser percentage; 

23 ‘‘(ii) the second disbursement shall 

24 consist of 30 percent of the loan amounts 

25 that remain after the first disbursement, 


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1 and shall be made when the borrower has 

2 produced satisfactory receipts to dem3 onstrate the proper use of 50 percent of 

4 the first disbursement; 

5 ‘‘(iii) the third disbursement shall 

6 consist of 25 percent of the loan amounts 

7 that remain after the first and second dis8 bursements, and shall be made when the 

9 borrower has produced satisfactory receipts 

10 to demonstrate the proper use of the first 

11 disbursement and 50 percent of the second 

12 disbursement; and 

13 ‘‘(iv) the fourth disbursement shall 

14 consist of the loan amounts that remain 

15 after the preceding disbursements, and 

16 shall be made when the borrower has pro17 duced satisfactory receipts to demonstrate 

18 the proper use of the first and second dis19 bursements and 50 percent of the third 

20 disbursement. 

21 ‘‘(C) If the total amount approved with re22 spect to such loan is more than $500,000— 

23 ‘‘(i) the first disbursement with re24 spect to such loan shall consist of at least 

25 $100,000, or a lesser amount if the AdVerDate Nov 24 2008 02:26 Oct 08, 2009 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3743.IH H3743

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1 ministrator and the borrower agree on 

2 such a lesser amount; and 

3 ‘‘(ii) the number of disbursements 

4 after the first, and the amount of each 

5 such disbursement, shall be in the discre6 tion of the Administrator, but the amount 

7 of each such disbursement shall be at least 

8 $100,000.’’. 

9 SEC. 6. GRANT PROGRAM. 

10 Section 7(b) of the Small Business Act (15 U.S.C. 

11 636(b)), as amended by this Act, is further amended by 

12 inserting after paragraph (9) the following: 

13 ‘‘(10) GRANTS TO DISASTER-AFFECTED SMALL

14 BUSINESSES.— 

15 ‘‘(A) IN GENERAL.—If the Administrator 

16 declares eligibility for additional disaster assist17 ance under paragraph (9), the Administrator 

18 may make a grant, in an amount not exceeding 

19 $100,000, to a small business concern that— 

20 ‘‘(i) is located in an area affected by 

21 the applicable major disaster; 

22 ‘‘(ii) submits to the Administrator a 

23 certification by the owner of the concern 

24 that such owner intends to reestablish the 


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1 concern in the same county in which the 

2 concern was originally located; 

3 ‘‘(iii) has applied for, and was rejected 

4 for, a conventional disaster assistance loan 

5 under this subsection; and 

6 ‘‘(iv) was in existence for at least 2 

7 years before the date on which the applica8 ble disaster declaration was made. 

9 ‘‘(B) PRIORITY.—In making grants under 

10 this paragraph, the Administrator shall give 

11 priority to a small business concern that the 

12 Administrator determines is economically viable 

13 but unable to meet short-term financial obliga14 tions. 

15 ‘‘(C) AUTHORIZATION OF APPROPRIA16 TIONS.—There are authorized to be appro17 priated to the Administrator such sums as may 

18 be necessary to carry out this paragraph.’’. 

19 SEC. 7. REGIONAL DISASTER WORKING GROUPS. 

20 Section 40 of the Small Business Act (15 U.S.C. 

21 657l) is amended— 

22 (1) in subsection (a), in the matter preceding 

23 paragraph (1), by striking ‘‘or’’ and inserting ‘‘and’’; 

24 (2) by redesignating subsection (d) as sub25 section (e); and 


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1 (3) by inserting after subsection (c) the fol2 lowing: 

3 ‘‘(d) REGIONAL DISASTER WORKING GROUPS.—In 

4 carrying out subsection (a), the Administrator, acting 

5 through the regional administrators of the regional offices 

6 of the Administration, shall develop a disaster prepared7 ness and response plan for each region of the Administra8 tion. Each such plan shall be developed in cooperation 

9 with Federal, State, and local emergency response authori10 ties and representatives of businesses located in the region 

11 to which such plan applies. Each such plan shall identify 

12 and include a plan relating to the 3 disasters, natural or 

13 manmade, most likely to occur in the region to which such 

14 plan applies.’’. 

15 SEC. 8. OUTREACH GRANTS FOR LOAN APPLICANT ASSIST16 ANCE. 

17 Section 7(b) of the Small Business Act (15 U.S.C. 

18 636(b)), as amended by this Act, is further amended by 

19 inserting after paragraph (10) the following: 

20 ‘‘(11) OUTREACH GRANTS FOR LOAN APPLI21 CANT ASSISTANCE.— 

22 ‘‘(A) IN GENERAL.—From amounts made 

23 available for administrative expenses relating to 

24 activities under this subsection, the AdminisVerDate Nov 24 2008 02:26 Oct 08, 2009 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3743.IH H3743

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1 trator is authorized to make grants to the fol2 lowing: 

3 ‘‘(i) A women’s business center in an 

4 area affected by a disaster. 

5 ‘‘(ii) A small business development 

6 center in an area affected by a disaster. 

7 ‘‘(iii) A Veteran Business Outreach 

8 Center in an area affected by a disaster. 

9 ‘‘(iv) A chamber of commerce in an 

10 area affected by a disaster. 

11 ‘‘(B) USE OF GRANT.—An entity specified 

12 under subparagraph (A) shall use a grant re13 ceived under this paragraph to provide applica14 tion preparation assistance to applicants for a 

15 loan under this subsection.’’. 

Æ 


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