111TH CONGRESS 

1ST SESSION H. R. 3743 

AN ACT 

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, 
2 

•HR 3743 EH

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Small Business Dis3 aster Readiness and Reform Act of 2009’’. 

4 SEC. 2. REVISED COLLATERAL REQUIREMENTS. 

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

6 is amended— 

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

8 [RESERVED].’’; and 

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

10 12068(a)(2) of the Small Business Disaster Re11 sponse and Loan Improvements Act of 2008 (sub12 title B of title XII of the Food, Conservation, and 

13 Energy Act of 2008; Public Law 110–246), by add14 ing at the end the following: 

15 ‘‘(2) REVISED COLLATERAL REQUIREMENTS.— 

16 In making a loan with respect to a business under 

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

18 loan is less than or equal to $250,000, the Adminis19 trator may not require the borrower to use the bor20 rower’s home as collateral.’’. 

21 SEC. 3. INCREASED LIMITS. 

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

23 636(b)) is amended— 

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

25 ‘‘$1,500,000’’ each place it appears and inserting 

26 ‘‘$3,000,000’’; and 
3 

•HR 3743 EH

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

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

3 SEC. 4. REVISED REPAYMENT TERMS. 

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

5 636(f)) is amended by adding at the end the following: 

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

7 loans under subsection (b), the Administrator— 

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

9 until the date that is 12 months after the date 

10 on which the final disbursement of approved 

11 amounts is made; and 

12 ‘‘(B) shall calculate the amount of repay13 ment based solely on the amounts disbursed.’’. 

14 SEC. 5. REVISED DISBURSEMENT PROCESS. 

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

16 636(f)), as amended by this Act, is further amended by 

17 adding at the end the following: 

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

19 making a loan under subsection (b), the Adminis20 trator shall disburse loan amounts in accordance 

21 with the following: 

22 ‘‘(A) If the total amount approved with re23 spect to such loan is less than or equal to 

24 $150,000— 
4 

•HR 3743 EH

1 ‘‘(i) the first disbursement with re2 spect to such loan shall consist of 40 per3 cent of the total loan amount, or a lesser 

4 percentage of the total loan amount if the 

5 Administrator and the borrower agree on 

6 such a lesser percentage; 

7 ‘‘(ii) the second disbursement shall 

8 consist of 50 percent of the loan amounts 

9 that remain after the first disbursement, 

10 and shall be made when the borrower has 

11 produced satisfactory receipts to dem12 onstrate the proper use of 50 percent of 

13 the first disbursement; and 

14 ‘‘(iii) the third disbursement shall 

15 consist of the loan amounts that remain 

16 after the preceding disbursements, and 

17 shall be made when the borrower has pro18 duced satisfactory receipts to demonstrate 

19 the proper use of the first disbursement 

20 and 50 percent of the second disburse21 ment. 

22 ‘‘(B) If the total amount approved with re23 spect to such loan is more than $150,000 but 

24 less than or equal to $500,000— 
5 

•HR 3743 EH

1 ‘‘(i) the first disbursement with re2 spect to such loan shall consist of 20 per3 cent of the total loan amount, or a lesser 

4 percentage of the total loan amount if the 

5 Administrator and the borrower agree on 

6 such a lesser percentage; 

7 ‘‘(ii) the second disbursement shall 

8 consist of 30 percent of the loan amounts 

9 that remain after the first disbursement, 

10 and shall be made when the borrower has 

11 produced satisfactory receipts to dem12 onstrate the proper use of 50 percent of 

13 the first disbursement; 

14 ‘‘(iii) the third disbursement shall 

15 consist of 25 percent of the loan amounts 

16 that remain after the first and second dis17 bursements, and shall be made when the 

18 borrower has produced satisfactory receipts 

19 to demonstrate the proper use of the first 

20 disbursement and 50 percent of the second 

21 disbursement; and 

22 ‘‘(iv) the fourth disbursement shall 

23 consist of the loan amounts that remain 

24 after the preceding disbursements, and 

25 shall be made when the borrower has pro-
6 

•HR 3743 EH

1 duced satisfactory receipts to demonstrate 

2 the proper use of the first and second dis3 bursements and 50 percent of the third 

4 disbursement. 

5 ‘‘(C) If the total amount approved with re6 spect to such loan is more than $500,000— 

7 ‘‘(i) the first disbursement with re8 spect to such loan shall consist of at least 

9 $100,000, or a lesser amount if the Ad10 ministrator and the borrower agree on 

11 such a lesser amount; and 

12 ‘‘(ii) the number of disbursements 

13 after the first, and the amount of each 

14 such disbursement, shall be in the discre15 tion of the Administrator, but the amount 

16 of each such disbursement shall be at least 

17 $100,000.’’. 

18 SEC. 6. GRANT PROGRAM. 

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

20 636(b)), as amended by this Act, is further amended by 

21 inserting after paragraph (9) the following: 

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

23 BUSINESSES.— 

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

25 declares eligibility for additional disaster assist-
7 

•HR 3743 EH

1 ance under paragraph (9), the Administrator 

2 may make a grant, in an amount not exceeding 

3 $100,000, to a small business concern that— 

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

5 the applicable major disaster; 

6 ‘‘(ii) submits to the Administrator a 

7 certification by the owner of the concern 

8 that such owner intends to reestablish the 

9 concern in the same county in which the 

10 concern was originally located; 

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

12 for, a conventional disaster assistance loan 

13 under this subsection; and 

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

15 years before the date on which the applica16 ble disaster declaration was made. 

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

18 this paragraph, the Administrator shall give 

19 priority to a small business concern that the 

20 Administrator determines is economically viable 

21 but unable to meet short-term financial obliga22 tions. 

23 ‘‘(C) PROGRAM LEVEL AND AUTHORIZA24 TION OF APPROPRIATIONS.— 
8 

•HR 3743 EH

1 ‘‘(i) PROGRAM LEVEL.—The Adminis2 trator is authorized to make $100,000,000 

3 in grants under this paragraph for each of 

4 fiscal years 2010 and 2011. 

5 ‘‘(ii) AUTHORIZATION OF APPROPRIA6 TIONS.—There are authorized to be appro7 priated to the Administrator such sums as 

8 may be necessary to carry out this para9 graph.’’. 

10 SEC. 7. REGIONAL DISASTER WORKING GROUPS. 

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

12 657l) is amended— 

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

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

15 (2) by redesignating subsection (d) as sub16 section (e); and 

17 (3) by inserting after subsection (c) the fol18 lowing: 

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

20 carrying out the responsibilities pertaining to loan making 

21 activities under subsection (a), the Administrator, acting 

22 through the regional administrators of the regional offices 

23 of the Administration, shall develop a disaster prepared24 ness and response plan for each region of the Administra25 tion. Each such plan shall be developed in cooperation 
9 

•HR 3743 EH

1 with Federal, State, and local emergency response authori2 ties and representatives of businesses located in the region 

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

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

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

6 plan applies.’’. 

7 SEC. 8. OUTREACH GRANTS FOR LOAN APPLICANT ASSIST8 ANCE. 

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

10 636(b)), as amended by this Act, is further amended by 

11 inserting after paragraph (10) the following: 

12 ‘‘(11) OUTREACH GRANTS FOR LOAN APPLI13 CANT ASSISTANCE.— 

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

15 available for administrative expenses relating to 

16 activities under this subsection, the Adminis17 trator is authorized to make grants to the fol18 lowing: 

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

20 area affected by a disaster. 

21 ‘‘(ii) A small business development 

22 center in an area affected by a disaster. 

23 ‘‘(iii) A Veteran Business Outreach 

24 Center in an area affected by a disaster. 
10 

•HR 3743 EH

1 ‘‘(iv) A chamber of commerce in an 

2 area affected by a disaster. 

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

4 under subparagraph (A) shall use a grant re5 ceived under this paragraph to provide applica6 tion preparation assistance to applicants for a 

7 loan under this subsection. 

8 ‘‘(C) PROGRAM LEVEL.—The Adminis9 trator is authorized to make $50,000,000 in 

10 grants under this paragraph for each of fiscal 

11 years 2010 and 2011.’’. 

12 SEC. 9. HOMEOWNERS IMPACTED BY TOXIC DRYWALL. 

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

14 636(b)), as amended by this Act, is further amended by 

15 inserting after paragraph (11) the following: 

16 ‘‘(12) HOMEOWNERS IMPACTED BY TOXIC

17 DRYWALL.—The Administrator may make a loan 

18 under this subsection to any homeowner if the pri19 mary residence of such homeowner has been ad20 versely impacted by the installation of toxic drywall 

21 manufactured in China. A loan under this paragraph 

22 may be used only for the repair or replacement of 

23 such toxic drywall.’’. 
11 

•HR 3743 EH

1 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 20 of the Small Business Act (15 U.S.C. 631 

3 note) is amended by inserting after subsection (e) the fol4 lowing: 

5 ‘‘(f) FISCAL YEARS 2010 AND 2011 WITH RESPECT

6 TO SECTION 7(b).—There is authorized to be appropriated 

7 such sums as may be necessary for administrative ex8 penses and loans under section 7(b).’’. 

9 SEC. 11. REGULATIONS. 

10 Except as otherwise provided in this Act or in amend11 ments made by this Act, after an opportunity for notice 

12 and comment, but not later than 180 days after the date 

13 of the enactment of this Act, the Administrator shall issue 

14 regulations to carry out this Act and the amendments 

15 made by this Act. 

Passed the House of Representatives November 6, 

2009. 

Attest: 

Clerk. 
111TH CONGRESS 

1ST SESSION H. R. 3743 

AN ACT 

To amend the Small Business Act to improve the 

Administration, and for other purposes. disaster relief programs of the Small Business