II 

119TH CONGRESS 

1ST SESSION S. 300 

To improve accountability in the disaster loan program of the Small Business 

Administration, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 29, 2025 

Mr. BUDD (for himself, Ms. ERNST, Mr. SCOTT of South Carolina, and Mr. 

TILLIS) introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To improve accountability in the disaster loan program 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 ‘‘Disaster Loan Ac5 countability and Reform Act’’ or the ‘‘DLARA’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Definitions. 

Sec. 4. Monthly disaster loan reports. 

Sec. 5. Budget request relating to disaster loans. 

Sec. 6. Limitations on loan forgiveness. 


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Sec. 7. Limits on disaster loans. 

Sec. 8. Prohibition regarding SBA rules relating to disaster loans. 

Sec. 9. GAO report on disaster loan changes. 

Sec. 10. SBA Inspector General review. 

Sec. 11. Budget and forecasting report regarding the cost of direct disaster 

loans. 

1 SEC. 3. DEFINITIONS. 

2 In this Act— 

3 (1) the terms ‘‘Administration’’ and ‘‘Adminis4 trator’’ mean the Small Business Administration 

5 and the Administrator thereof, respectively; and 

6 (2) the term ‘‘appropriate committees of Con7 gress’’ means the Committee on Small Business and 

8 Entrepreneurship and the Committee on Appropria9 tions of the Senate and the Committee on Small 

10 Business and the Committee on Appropriations of 

11 the House of Representatives. 

12 SEC. 4. MONTHLY DISASTER LOAN REPORTS. 

13 Section 12091(a) of the Small Business Disaster Re14 sponse and Loan Improvements Act of 2008 (15 U.S.C. 

15 636k(a)) is amended— 

16 (1) in paragraph (1), by striking ‘‘during the 

17 applicable period for a major disaster’’; 

18 (2) in paragraph (2)— 

19 (A) in subparagraph (E), by striking ‘‘how 

20 long the available funding for such loans will 

21 last’’ and inserting ‘‘the date at which available 

22 funding for such loans will reach 10 percent of 


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1 the most recent appropriation and the date at 

2 which the funds will be depleted’’; 

3 (B) in subparagraph (H), by striking 

4 ‘‘and’’ at the end; 

5 (C) in subparagraph (I), by striking the 

6 period at the end and inserting ‘‘; and’’; and 

7 (D) by adding at the end the following: 

8 ‘‘(J) a summary detailing any changes to 

9 estimates or assumptions on obligations and ex10 penditures, including data supporting these 

11 changes.’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(3) PROHIBITION ON OFFICIAL TRAVEL.—If 

14 the Administrator does not submit a report required 

15 to be submitted under paragraph (1) by the required 

16 date, no funds may be obligated for official travel by 

17 the Administrator until the Administrator submits 

18 the report.’’. 

19 SEC. 5. BUDGET REQUEST RELATING TO DISASTER LOANS. 

20 Section 1105 of title 31, United States Code, is 

21 amended— 

22 (1) in subsection (a), by adding at the end the 

23 following: 

24 ‘‘(39) separate statements of— 


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1 ‘‘(A) the amount of appropriations re2 quested for the fiscal year for which the budget 

3 is submitted for the cost of SBA disaster loans, 

4 the 10-year average of the cost of SBA disaster 

5 loans, and an explanation for any difference be6 tween the amount requested and the 10-year 

7 average cost; and 

8 ‘‘(B) the amount of appropriations re9 quested for the fiscal year for which the budget 

10 is submitted for the cost of COVID-EIDL 

11 loans, the 10-year average of the cost of 

12 COVID-EIDL loans, and an explanation for 

13 any difference between the amount requested 

14 and the 10-year average cost. 

15 ‘‘(40) separate statements of— 

16 ‘‘(A) the amount of appropriations re17 quested for the fiscal year for which the budget 

18 is submitted for administrative costs relating to 

19 SBA disaster loans, the 10-year average of such 

20 administrative costs, and an explanation for any 

21 difference between the amount requested and 

22 the 10-year average costs; and 

23 ‘‘(B) the amount of appropriations re24 quested for the fiscal year for which the budget 

25 is submitted for administrative costs relating to 


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1 COVID-EIDL loans, the 10-year average of 

2 such administrative costs, and an explanation 

3 for any difference between the amount re4 quested and the 10-year average costs.’’; and 

5 (2) by adding at the end the following: 

6 ‘‘(j) In paragraphs (39) and (40) of subsection (a)— 

7 ‘‘(1) the term ‘COVID-EIDL loan’ means a di8 rect loan under section 7(b) of the Small Business 

9 Act (15 U.S.C. 636(b)) that was authorized under 

10 section 1110 of the CARES Act (15 U.S.C. 9009); 

11 and 

12 ‘‘(2) the term ‘SBA disaster loan’ means a di13 rect loan authorized by section 7(b) of the Small 

14 Business Act (15 U.S.C. 636(b)), other than a loan 

15 that was authorized under section 1110 of the 

16 CARES Act (15 U.S.C. 9009).’’. 

17 SEC. 6. LIMITATIONS ON LOAN FORGIVENESS. 

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

19 is amended by adding at the end the following: 

20 ‘‘(o) LIMITATIONS ON LOAN FORGIVENESS.— 

21 ‘‘(1) IN GENERAL.—The Administrator may 

22 not— 

23 ‘‘(A) forgive any loan under this section 

24 unless Congress has authorized such forgive25 ness; or 


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1 ‘‘(B) compromise on, suspend, or end col2 lections on a debt owed to the Administration 

3 pursuant to paragraph (2) or (3) of section 

4 3711(a) of title 31, United States Code. 

5 ‘‘(2) REFERRAL OF DEBT.—If the Adminis6 trator seeks to discharge a debt and the discharge 

7 of such debt is limited under paragraph (1), the Ad8 ministrator shall refer such debt to the Department 

9 of the Treasury for collection action, including a 

10 final determination regarding whether to suspend, 

11 end, or continue collection of the debt.’’. 

12 SEC. 7. LIMITS ON DISASTER LOANS. 

13 (a) LOW FUNDING.—Section 7(b) of the Small Busi14 ness Act (15 U.S.C. 636(b)) is amended— 

15 (1) by redesignating the second paragraph des16 ignated as paragraph (16), relating to statute of lim17 itations, as added by the COVID–19 EIDL Fraud 

18 Statute of Limitations Act of 2022 (Public Law 

19 117–165; 136 Stat. 1363), as paragraph (18); and 

20 (2) by inserting after paragraph (16), relating 

21 to disaster declarations in rural areas, as added by 

22 the Disaster Assistance for Rural Communities Act 

23 (Public Law 117–249; 136 Stat. 2350), the fol24 lowing: 


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1 ‘‘(17) REQUIREMENTS WHEN FUNDING IS

2 LOW.— 

3 ‘‘(A) IN GENERAL.—Not later than 24 

4 hours after the unobligated balance of amounts 

5 available for the cost of direct loans authorized 

6 by this subsection is less than 10 percent of the 

7 most recent appropriation for such costs, the 

8 Administrator shall notify the Committee on 

9 Appropriations and the Committee on Small 

10 Business and Entrepreneurship of the Senate 

11 and the Committee on Appropriations and the 

12 Committee on Small Business of the House of 

13 Representatives. 

14 ‘‘(B) LIMITATION ON OBLIGATING

15 FUNDS.—During the period beginning on the 

16 first business day occurring on or after the date 

17 by which the Administrator is required to notify 

18 Congress under subparagraph (A) and ending 

19 on the date on which additional amounts are 

20 appropriated for such costs, the Administrator 

21 may not obligate funds for a direct loan author22 ized under this subsection in an amount that is 

23 more than the amount of such a loan for which 

24 collateral is required.’’. 


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1 (b) REPEAL OF AUTHORITY TO INCREASE AMOUNT

2 OF LOANS FOR WHICH COLLATERAL IS NOT RE3 QUIRED.—Section 7(d)(6) of the Small Business Act is 

4 amended by striking ‘‘(or such higher amount as the Ad5 ministrator determines appropriate in the event of a major 

6 disaster)’’. 

7 SEC. 8. PROHIBITION REGARDING SBA RULES RELATING 

8 TO DISASTER LOANS. 

9 (a) DEFINITIONS.—In this section: 

10 (1) COST.—The term ‘‘cost’’ has the meaning 

11 given the term in section 502 of the Federal Credit 

12 Reform Act of 1990 (2 U.S.C. 661a). 

13 (2) RULE.—The term ‘‘rule’’ has the meaning 

14 given the term in section 551 of title 5, United 

15 States Code. 

16 (b) PROHIBITION.—Notwithstanding any other provi17 sion of law or regulation, beginning on the date of enact18 ment of this Act, the Administrator of the Small Business 

19 Administration may not issue any rule that will result in 

20 any increased cost to the program carried out under sec21 tion 7(b) of the Small Business Act (15 U.S.C. 636(b)). 

22 SEC. 9. GAO REPORT ON DISASTER LOAN CHANGES. 

23 (a) DEFINITION.—In this section, the term ‘‘covered 

24 final rule’’ means— 


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1 (1) the final rule entitled ‘‘Disaster Assistance 

2 Loan Program Changes to Maximum Loan Amounts 

3 and Miscellaneous Updates’’ (88 Fed. Reg. 39335 

4 (June 16, 2023); RIN 3245–AH91); or 

5 (2) the final rule entitled ‘‘Disaster Assistance 

6 Loan Program Changes to Unsecured Loan 

7 Amounts and Credit Elsewhere Criteria’’ (89 Fed. 

8 Reg. 59826 (July 24, 2024); RIN 3245–AI08). 

9 (b) REPORT.—Not later than 1 year after the date 

10 of enactment of this Act, the Comptroller General of the 

11 United States shall submit to the Committee on Small 

12 Business and Entrepreneurship and the Committee on Ap13 propriations of the Senate and the Committee on Small 

14 Business and the Committee on Appropriations of the 

15 House of Representatives a report on— 

16 (1) the cost (as defined in section 502 of the 

17 Federal Credit Reform Act of 1990 (2 U.S.C. 

18 661a)) of the increase in the home loan lending lim19 its for, the extension of the deferment period for, the 

20 expansion of mitigation options for, the modifica21 tions to the criteria for determining whether appli22 cants can obtain credit elsewhere with respect to, the 

23 changes to collateral requirements for, and other 

24 changes to the terms and conditions of loans under 


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1 section 7(b)(1) of the Small Business Act (15 U.S.C. 

2 636(b)(1)) made by the covered final rules; and 

3 (2) the effect on the subsidy for such loans of 

4 the changes contained in the covered final rules. 

5 SEC. 10. SBA INSPECTOR GENERAL REVIEW. 

6 (a) DEFINITIONS.—In this section— 

7 (1) the term ‘‘covered amounts’’ means 

8 amounts made available for the cost of direct loans 

9 authorized by section 7(b) of the Small Business Act 

10 (15 U.S.C. 636(b)); and 

11 (2) the term ‘‘Inspector General’’ means the In12 spector General of the Administration. 

13 (b) REVIEW.— 

14 (1) IN GENERAL.—The Inspector General shall 

15 conduct a review of the circumstances surrounding 

16 the funding shortfall with respect to covered 

17 amounts, as described in— 

18 (A) the letter from President Joseph R. 

19 Biden, Jr. entitled ‘‘Letter to Congress on Dis20 aster Needs’’, dated October 4, 2024; and 

21 (B) the letter from the Administrator sub22 mitted to the Chair and Ranking Members of 

23 the Committees on Appropriations of the Sen24 ate and the House of Representatives, dated 

25 October 10, 2024. 


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1 (2) CONTENTS.—The review required under 

2 paragraph (1) shall include the following with re3 spect to the funding shortfall described in that para4 graph: 

5 (A) The identification of any reporting or 

6 notification requirements in statute that the 

7 Administration failed to provide to Congress 

8 with respect to the funding shortfall. 

9 (B) The reason for any obligation or ex10 penditure of covered amounts for a purpose 

11 that significantly diverged from the purpose for 

12 which the covered amounts were made available. 

13 (C) An analysis of the accuracy of projec14 tions and estimates relevant to the divergences 

15 described in subparagraph (B). 

16 (D) The identification and description of 

17 any internal controls in place to manage cov18 ered amounts. 

19 (E) An analysis of the impact that any re20 organization of the Administration, including 

21 the transfer of administrative authority for the 

22 program carried out under section 7(b) of the 

23 Small Business Act (15 U.S.C. 636(b)) to the 

24 Office of Capital Access of the Administration, 


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1 may have had with respect to the funding 

2 shortfall. 

3 (F) The identification of actions that the 

4 Administration can take to— 

5 (i) improve the accuracy of informa6 tion submitted by the President under sec7 tion 1105(a) of title 31, United States 

8 Code, with respect to the Administration; 

9 (ii) prevent any future funding short10 fall with respect to any account of the Ad11 ministration; and 

12 (iii) improve the report submitted to 

13 the appropriate committees of Congress 

14 under section 12091(a) of the Small Busi15 ness Disaster Response and Loan Improve16 ments Act of 2008 (15 U.S.C. 636k(a)). 

17 (G) Any other matter determined relevant 

18 by the Inspector General. 

19 (c) REPORT.—Not later than 180 days after the date 

20 of enactment of this Act, the Inspector General shall sub21 mit to the appropriate committees of Congress a report 

22 that contains the findings of the review carried out under 

23 subsection (b). 


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1 SEC. 11. BUDGET AND FORECASTING REPORT REGARDING 

2 THE COST OF DIRECT DISASTER LOANS. 

3 (a) BUDGET FORMULATION AND FORECASTING.— 

4 Not later than 30 days after the date of enactment of this 

5 Act, the Administrator shall submit to the appropriate 

6 committees of Congress a report detailing corrections the 

7 Administration will make to improve forecasting, data 

8 quality, and budget assumptions relating to budget sub9 missions relating to amounts made available for the cost 

10 of direct loans authorized by section 7(b) of the Small 

11 Business Act (15 U.S.C. 636(b)). 

12 (b) UPDATES.—Not later than 90 days after the date 

13 of enactment of this Act, and every 90 days thereafter 

14 until the date that is 90 days after the date on which all 

15 the corrections described in subsection (a) have been im16 plemented, the Administrator shall submit to the appro17 priate committees of Congress a report— 

18 (1) detailing the actions the Administration has 

19 taken to implement the corrections described in sub20 section (a); and 

21 (2) explaining how each action detailed under 

22 paragraph (1) is directly related to implementing 1 

23 or more corrections described in subsection (a). 

Æ 


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