II 

110TH CONGRESS 

1ST SESSION S. 599 

To improve the disaster loan program of the Small Business Administration, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 14, 2007 

Ms. SNOWE (for herself, Ms. LANDRIEU, and Mr. VITTER) introduced the following bill; which was read twice and referred to the Committee on Small 

Business and Entrepreneurship 

A BILL 

To improve 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 ‘‘Private Disaster Loans 

5 Act of 2007’’. 

6 SEC. 2. PRIVATE DISASTER LOANS. 

7 (a) IN GENERAL.—Section 7 of the Small Business 

8 Act (15 U.S.C. 636) is amended— 

9 (1) by redesignating subsections (c) and (d) as 

10 subsections (d) and (e), respectively; and 


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1 (2) by inserting after subsection (b) the fol2 lowing: 

3 ‘‘(c) PRIVATE DISASTER LOANS.— 

4 ‘‘(1) DEFINITIONS.—In this subsection— 

5 ‘‘(A) the term ‘disaster area’ means a 

6 county, parish, or similar unit of general local 

7 government in which a disaster was declared 

8 under subsection (b); 

9 ‘‘(B) the term ‘eligible small business con10 cern’ means a business concern that is— 

11 ‘‘(i) a small business concern, as de12 fined in this Act; or 

13 ‘‘(ii) a small business concern, as de14 fined in section 103 of the Small Business 

15 Investment Act of 1958; and 

16 ‘‘(C) the term ‘qualified private lender’ 

17 means any privately-owned bank or other lend18 ing institution that the Administrator deter19 mines meets the criteria established under para20 graph (9). 

21 ‘‘(2) AUTHORIZATION.—The Administrator may 

22 guarantee timely payment of principal and interest, 

23 as scheduled on any loan issued by a qualified pri24 vate lender to an eligible small business concern lo25 cated in a disaster area. 


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1 ‘‘(3) USE OF LOANS.—A loan guaranteed by 

2 the Administrator under this subsection may be used 

3 for any purpose authorized under subsection (b). 

4 ‘‘(4) ONLINE APPLICATIONS.— 

5 ‘‘(A) ESTABLISHMENT.—The Adminis6 trator may establish, directly or through an 

7 agreement with another entity, an online appli8 cation process for loans guaranteed under this 

9 subsection. 

10 ‘‘(B) OTHER FEDERAL ASSISTANCE.—The 

11 Administrator may coordinate with the head of 

12 any other appropriate Federal agency so that 

13 any application submitted through an online ap14 plication process established under this para15 graph may be considered for any other Federal 

16 assistance program for disaster relief. 

17 ‘‘(C) CONSULTATION.—In establishing an 

18 online application process under this paragraph, 

19 the Administrator shall consult with appro20 priate persons from the public and private sec21 tors, including private lenders. 

22 ‘‘(5) MAXIMUM AMOUNTS.— 

23 ‘‘(A) GUARANTEE PERCENTAGE.—The Ad24 ministrator may guarantee not more than 85 

25 percent of a loan under this subsection. 


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1 ‘‘(B) LOAN AMOUNTS.—The maximum 

2 amount of a loan guaranteed under this sub3 section shall be $2,000,000. 

4 ‘‘(6) LOAN TERM.—The longest term of a loan 

5 for a loan guaranteed under this subsection shall 

6 be— 

7 ‘‘(A) 15 years for any loan that is issued 

8 without collateral; and 

9 ‘‘(B) 25 years for any loan that is issued 

10 with collateral. 

11 ‘‘(7) FEES.— 

12 ‘‘(A) IN GENERAL.—The Administrator 

13 may not collect a guarantee fee under this sub14 section. 

15 ‘‘(B) ORIGINATION FEE.—The Adminis16 trator may pay a qualified private lender an 

17 origination fee for a loan guaranteed under this 

18 subsection in an amount agreed upon in ad19 vance between the qualified private lender and 

20 the Administrator. 

21 ‘‘(8) DOCUMENTATION.—A qualified private 

22 lender may use its own loan documentation for a 

23 loan guaranteed by the Administrator, to the extent 

24 authorized by the Administrator. The ability of a 

25 lender to use its own loan documentation for a loan 


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1 offered under this subsection shall not be considered 

2 part of the criteria for becoming a qualified private 

3 lender under the regulations promulgated under 

4 paragraph (9). 

5 ‘‘(9) IMPLEMENTATION REGULATIONS.— 

6 ‘‘(A) IN GENERAL.—Not later than 1 year 

7 after the date of enactment of the Private Dis8 aster Loans Act of 2007, the Administrator 

9 shall issue final regulations establishing perma10 nent criteria for qualified private lenders. 

11 ‘‘(B) REPORT TO CONGRESS.—Not later 

12 than 6 months after the date of enactment of 

13 the Private Disaster Loans Act of 2007, the 

14 Administrator shall submit a report on the 

15 progress of the regulations required by subpara16 graph (A) to the Committee on Small Business 

17 and Entrepreneurship of the Senate and the 

18 Committee on Small Business of the House of 

19 Representatives. 

20 ‘‘(10) AUTHORIZATION OF APPROPRIATIONS.— 

21 ‘‘(A) IN GENERAL.—Amounts necessary to 

22 carry out this subsection shall be made avail23 able from amounts appropriated to the Admin24 istration under subsection (b). 


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1 ‘‘(B) AUTHORITY TO REDUCE INTEREST

2 RATES.—Funds appropriated to the Adminis3 tration to carry out this subsection, may be 

4 used by the Administrator, to the extent avail5 able, to reduce the applicable rate of interest 

6 for a loan guaranteed under this subsection by 

7 not more than 3 percentage points.’’. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to disasters declared under section 

10 7(b)(2) of the Small Business Act (631 U.S.C. 636(b)(2)) 

11 before, on, or after the date of enactment of this Act. 

12 SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS. 

13 The Small Business Act (15 U.S.C. 631 et seq.) is 

14 amended— 

15 (1) in section 4(c)— 

16 (A) in paragraph (1), by striking ‘‘7(c)(2)’’ 

17 and inserting ‘‘7(d)(2)’’; and 

18 (B) in paragraph (2)— 

19 (i) by striking ‘‘7(c)(2)’’ and inserting 

20 ‘‘7(d)(2)’’; and 

21 (ii) by striking ‘‘7(e),’’; and 

22 (2) in section 7(b), in the undesignated matter 

23 following paragraph (3)— 

24 (A) by striking ‘‘That the provisions of 

25 paragraph (1) of subsection (c)’’ and inserting 


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1 ‘‘That the provisions of paragraph (1) of sub2 section (d)’’; and 

3 (B) by striking ‘‘Notwithstanding the pro4 visions of any other law the interest rate on the 

5 Administration’s share of any loan made under 

6 subsection (b) except as provided in subsection 

7 (c),’’ and inserting ‘‘Notwithstanding any other 

8 provision of law, and except as provided in sub9 section (d), the interest rate on the Administra10 tion’s share of any loan made under subsection 

11 (b)’’. 

Æ 


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