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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 300 Introduced in Senate (IS)]

<DOC>

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Disaster Loan Accountability and 
Reform Act'' or the ``DLARA''.

SEC. 2. TABLE OF CONTENTS.

    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.
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.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the terms ``Administration'' and ``Administrator'' mean 
        the Small Business Administration and the Administrator 
        thereof, respectively; and
            (2) the term ``appropriate committees of Congress'' means 
        the Committee on Small Business and Entrepreneurship and the 
        Committee on Appropriations of the Senate and the Committee on 
        Small Business and the Committee on Appropriations of the House 
        of Representatives.

SEC. 4. MONTHLY DISASTER LOAN REPORTS.

    Section 12091(a) of the Small Business Disaster Response and Loan 
Improvements Act of 2008 (15 U.S.C. 636k(a)) is amended--
            (1) in paragraph (1), by striking ``during the applicable 
        period for a major disaster'';
            (2) in paragraph (2)--
                    (A) in subparagraph (E), by striking ``how long the 
                available funding for such loans will last'' and 
                inserting ``the date at which available funding for 
                such loans will reach 10 percent of the most recent 
                appropriation and the date at which the funds will be 
                depleted'';
                    (B) in subparagraph (H), by striking ``and'' at the 
                end;
                    (C) in subparagraph (I), by striking the period at 
                the end and inserting ``; and''; and
                    (D) by adding at the end the following:
                    ``(J) a summary detailing any changes to estimates 
                or assumptions on obligations and expenditures, 
                including data supporting these changes.''; and
            (3) by adding at the end the following:
            ``(3) Prohibition on official travel.--If the Administrator 
        does not submit a report required to be submitted under 
        paragraph (1) by the required date, no funds may be obligated 
        for official travel by the Administrator until the 
        Administrator submits the report.''.

SEC. 5. BUDGET REQUEST RELATING TO DISASTER LOANS.

    Section 1105 of title 31, United States Code, is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(39) separate statements of--
                    ``(A) the amount of appropriations requested for 
                the fiscal year for which the budget is submitted for 
                the cost of SBA disaster loans, the 10-year average of 
                the cost of SBA disaster loans, and an explanation for 
                any difference between the amount requested and the 10-
                year average cost; and
                    ``(B) the amount of appropriations requested for 
                the fiscal year for which the budget is submitted for 
                the cost of COVID-EIDL loans, the 10-year average of 
                the cost of COVID-EIDL loans, and an explanation for 
                any difference between the amount requested and the 10-
                year average cost.
            ``(40) separate statements of--
                    ``(A) the amount of appropriations requested for 
                the fiscal year for which the budget is submitted for 
                administrative costs relating to SBA disaster loans, 
                the 10-year average of such administrative costs, and 
                an explanation for any difference between the amount 
                requested and the 10-year average costs; and
                    ``(B) the amount of appropriations requested for 
                the fiscal year for which the budget is submitted for 
                administrative costs relating to COVID-EIDL loans, the 
                10-year average of such administrative costs, and an 
                explanation for any difference between the amount 
                requested and the 10-year average costs.''; and
            (2) by adding at the end the following:
    ``(j) In paragraphs (39) and (40) of subsection (a)--
            ``(1) the term `COVID-EIDL loan' means a direct loan under 
        section 7(b) of the Small Business Act (15 U.S.C. 636(b)) that 
        was authorized under section 1110 of the CARES Act (15 U.S.C. 
        9009); and
            ``(2) the term `SBA disaster loan' means a direct loan 
        authorized by section 7(b) of the Small Business Act (15 U.S.C. 
        636(b)), other than a loan that was authorized under section 
        1110 of the CARES Act (15 U.S.C. 9009).''.

SEC. 6. LIMITATIONS ON LOAN FORGIVENESS.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended by 
adding at the end the following:
    ``(o) Limitations on Loan Forgiveness.--
            ``(1) In general.--The Administrator may not--
                    ``(A) forgive any loan under this section unless 
                Congress has authorized such forgiveness; or
                    ``(B) compromise on, suspend, or end collections on 
                a debt owed to the Administration pursuant to paragraph 
                (2) or (3) of section 3711(a) of title 31, United 
                States Code.
            ``(2) Referral of debt.--If the Administrator seeks to 
        discharge a debt and the discharge of such debt is limited 
        under paragraph (1), the Administrator shall refer such debt to 
        the Department of the Treasury for collection action, including 
        a final determination regarding whether to suspend, end, or 
        continue collection of the debt.''.

SEC. 7. LIMITS ON DISASTER LOANS.

    (a) Low Funding.--Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)) is amended--
            (1) by redesignating the second paragraph designated as 
        paragraph (16), relating to statute of limitations, as added by 
        the COVID-19 EIDL Fraud Statute of Limitations Act of 2022 
        (Public Law 117-165; 136 Stat. 1363), as paragraph (18); and
            (2) by inserting after paragraph (16), relating to disaster 
        declarations in rural areas, as added by the Disaster 
        Assistance for Rural Communities Act (Public Law 117-249; 136 
        Stat. 2350), the following:
            ``(17) Requirements when funding is low.--
                    ``(A) In general.--Not later than 24 hours after 
                the unobligated balance of amounts available for the 
                cost of direct loans authorized by this subsection is 
                less than 10 percent of the most recent appropriation 
                for such costs, the Administrator shall notify the 
                Committee on Appropriations and the Committee on Small 
                Business and Entrepreneurship of the Senate and the 
                Committee on Appropriations and the Committee on Small 
                Business of the House of Representatives.
                    ``(B) Limitation on obligating funds.--During the 
                period beginning on the first business day occurring on 
                or after the date by which the Administrator is 
                required to notify Congress under subparagraph (A) and 
                ending on the date on which additional amounts are 
                appropriated for such costs, the Administrator may not 
                obligate funds for a direct loan authorized under this 
                subsection in an amount that is more than the amount of 
                such a loan for which collateral is required.''.
    (b) Repeal of Authority To Increase Amount of Loans for Which 
Collateral Is Not Required.--Section 7(d)(6) of the Small Business Act 
is amended by striking ``(or such higher amount as the Administrator 
determines appropriate in the event of a major disaster)''.

SEC. 8. PROHIBITION REGARDING SBA RULES RELATING TO DISASTER LOANS.

    (a) Definitions.--In this section:
            (1) Cost.--The term ``cost'' has the meaning given the term 
        in section 502 of the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661a).
            (2) Rule.--The term ``rule'' has the meaning given the term 
        in section 551 of title 5, United States Code.
    (b) Prohibition.--Notwithstanding any other provision of law or 
regulation, beginning on the date of enactment of this Act, the 
Administrator of the Small Business Administration may not issue any 
rule that will result in any increased cost to the program carried out 
under section 7(b) of the Small Business Act (15 U.S.C. 636(b)).

SEC. 9. GAO REPORT ON DISASTER LOAN CHANGES.

    (a) Definition.--In this section, the term ``covered final rule'' 
means--
            (1) the final rule entitled ``Disaster Assistance Loan 
        Program Changes to Maximum Loan Amounts and Miscellaneous 
        Updates'' (88 Fed. Reg. 39335 (June 16, 2023); RIN 3245-AH91); 
        or
            (2) the final rule entitled ``Disaster Assistance Loan 
        Program Changes to Unsecured Loan Amounts and Credit Elsewhere 
        Criteria'' (89 Fed. Reg. 59826 (July 24, 2024); RIN 3245-AI08).
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
the Committee on Small Business and Entrepreneurship and the Committee 
on Appropriations of the Senate and the Committee on Small Business and 
the Committee on Appropriations of the House of Representatives a 
report on--
            (1) the cost (as defined in section 502 of the Federal 
        Credit Reform Act of 1990 (2 U.S.C. 661a)) of the increase in 
        the home loan lending limits for, the extension of the 
        deferment period for, the expansion of mitigation options for, 
        the modifications to the criteria for determining whether 
        applicants can obtain credit elsewhere with respect to, the 
        changes to collateral requirements for, and other changes to 
        the terms and conditions of loans under section 7(b)(1) of the 
        Small Business Act (15 U.S.C. 636(b)(1)) made by the covered 
        final rules; and
            (2) the effect on the subsidy for such loans of the changes 
        contained in the covered final rules.

SEC. 10. SBA INSPECTOR GENERAL REVIEW.

    (a) Definitions.--In this section--
            (1) the term ``covered amounts'' means amounts made 
        available for the cost of direct loans authorized by section 
        7(b) of the Small Business Act (15 U.S.C. 636(b)); and
            (2) the term ``Inspector General'' means the Inspector 
        General of the Administration.
    (b) Review.--
            (1) In general.--The Inspector General shall conduct a 
        review of the circumstances surrounding the funding shortfall 
        with respect to covered amounts, as described in--
                    (A) the letter from President Joseph R. Biden, Jr. 
                entitled ``Letter to Congress on Disaster Needs'', 
                dated October 4, 2024; and
                    (B) the letter from the Administrator submitted to 
                the Chair and Ranking Members of the Committees on 
                Appropriations of the Senate and the House of 
                Representatives, dated October 10, 2024.
            (2) Contents.--The review required under paragraph (1) 
        shall include the following with respect to the funding 
        shortfall described in that paragraph:
                    (A) The identification of any reporting or 
                notification requirements in statute that the 
                Administration failed to provide to Congress with 
                respect to the funding shortfall.
                    (B) The reason for any obligation or expenditure of 
                covered amounts for a purpose that significantly 
                diverged from the purpose for which the covered amounts 
                were made available.
                    (C) An analysis of the accuracy of projections and 
                estimates relevant to the divergences described in 
                subparagraph (B).
                    (D) The identification and description of any 
                internal controls in place to manage covered amounts.
                    (E) An analysis of the impact that any 
                reorganization of the Administration, including the 
                transfer of administrative authority for the program 
                carried out under section 7(b) of the Small Business 
                Act (15 U.S.C. 636(b)) to the Office of Capital Access 
                of the Administration, may have had with respect to the 
                funding shortfall.
                    (F) The identification of actions that the 
                Administration can take to--
                            (i) improve the accuracy of information 
                        submitted by the President under section 
                        1105(a) of title 31, United States Code, with 
                        respect to the Administration;
                            (ii) prevent any future funding shortfall 
                        with respect to any account of the 
                        Administration; and
                            (iii) improve the report submitted to the 
                        appropriate committees of Congress under 
                        section 12091(a) of the Small Business Disaster 
                        Response and Loan Improvements Act of 2008 (15 
                        U.S.C. 636k(a)).
                    (G) Any other matter determined relevant by the 
                Inspector General.
    (c) Report.--Not later than 180 days after the date of enactment of 
this Act, the Inspector General shall submit to the appropriate 
committees of Congress a report that contains the findings of the 
review carried out under subsection (b).

SEC. 11. BUDGET AND FORECASTING REPORT REGARDING THE COST OF DIRECT 
              DISASTER LOANS.

    (a) Budget Formulation and Forecasting.--Not later than 30 days 
after the date of enactment of this Act, the Administrator shall submit 
to the appropriate committees of Congress a report detailing 
corrections the Administration will make to improve forecasting, data 
quality, and budget assumptions relating to budget submissions relating 
to amounts made available for the cost of direct loans authorized by 
section 7(b) of the Small Business Act (15 U.S.C. 636(b)).
    (b) Updates.--Not later than 90 days after the date of enactment of 
this Act, and every 90 days thereafter until the date that is 90 days 
after the date on which all the corrections described in subsection (a) 
have been implemented, the Administrator shall submit to the 
appropriate committees of Congress a report--
            (1) detailing the actions the Administration has taken to 
        implement the corrections described in subsection (a); and
            (2) explaining how each action detailed under paragraph (1) 
        is directly related to implementing 1 or more corrections 
        described in subsection (a).
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