I 

110TH CONGRESS 

1ST SESSION H. R. 1044 

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

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 14, 2007 

Mr. BAKER (for himself, Mr. MELANCON, Mr. BOUSTANY, Mr. ALEXANDER, 

Mr. JEFFERSON, Mr. MCCRERY, and Mr. JINDAL) introduced the following bill; which was referred to the Committee on Small Business 

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 ‘‘Small Business Dis5 aster Response and Loan Improvements 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 


hmoore on PROD1PC68 with HMBILLS
2 

•HR 1044 IH

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. 


hmoore on PROD1PC68 with HMBILLS
3 

•HR 1044 IH

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 (a) or 

4 (b). 

5 ‘‘(4) ONLINE APPLICATIONS.— 

6 ‘‘(A) ESTABLISHMENT.—The Adminis7 trator may establish, directly or through an 

8 agreement with another entity, an online appli9 cation process for loans guaranteed under this 

10 subsection. 

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

12 Administrator may coordinate with the head of 

13 any other appropriate Federal agency so that 

14 any application submitted through an online ap15 plication process established under this para16 graph may be considered for any other Federal 

17 assistance program for disaster relief. 

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

19 online application process under this paragraph, 

20 the Administrator shall consult with appro21 priate persons from the public and private sec22 tors, including private lenders. 

23 ‘‘(5) MAXIMUM AMOUNTS.— 


hmoore on PROD1PC68 with HMBILLS
4 

•HR 1044 IH

1 ‘‘(A) GUARANTEE PERCENTAGE.—The Ad2 ministrator may guarantee not more than 85 

3 percent of a loan under this subsection. 

4 ‘‘(B) LOAN AMOUNTS.—The maximum 

5 amount of a loan guaranteed under this sub6 section shall be $2,000,000. 

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

8 for a loan guaranteed under this subsection shall 

9 be— 

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

11 without collateral; and 

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

13 with collateral. 

14 ‘‘(7) FEES.— 

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

16 may not collect a guarantee fee under this sub17 section. 

18 ‘‘(B) ORIGINATION FEE.—The Adminis19 trator may pay a qualified private lender an 

20 origination fee for a loan guaranteed under this 

21 subsection in an amount agreed upon in ad22 vance between the qualified private lender and 

23 the Administrator. 

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

25 lender may use its own loan documentation for a 


hmoore on PROD1PC68 with HMBILLS
5 

•HR 1044 IH

1 loan guaranteed by the Administrator, to the extent 

2 authorized by the Administrator. The ability of a 

3 lender to use its own loan documentation for a loan 

4 offered under this subsection shall not be considered 

5 part of the criteria for becoming a qualified private 

6 lender under the regulations promulgated under 

7 paragraph (9). 

8 ‘‘(9) IMPLEMENTATION REGULATIONS.— 

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

10 after the date of enactment of the Small Busi11 ness Disaster Response and Loan Improve12 ments Act of 2007, the Administrator shall 

13 issue final regulations establishing permanent 

14 criteria for qualified private lenders. 

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

16 than 6 months after the date of enactment of 

17 the Small Business Disaster Response and 

18 Loan Improvements Act of 2007, the Adminis19 trator shall submit a report on the progress of 

20 the regulations required by subparagraph (A) to 

21 the Committee on Small Business and Entre22 preneurship of the Senate and the Committee 

23 on Small Business of the House of Representa24 tives. 

25 ‘‘(10) AUTHORIZATION OF APPROPRIATIONS.— 


hmoore on PROD1PC68 with HMBILLS
6 

•HR 1044 IH

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

2 carry out this subsection shall be made avail3 able from amounts appropriated to the Admin4 istration under subsection (b). 

5 ‘‘(B) AUTHORITY TO REDUCE INTEREST

6 RATES.—Funds appropriated to the Adminis7 tration to carry out this subsection may be used 

8 by the Administrator, to the extent available, to 

9 reduce the applicable rate of interest for a loan 

10 guaranteed under this subsection by not more 

11 than 3 percentage points.’’. 

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

13 this section shall apply to disasters declared under section 

14 7(b)(2) of the Small Business Act (631 U.S.C. 636(b)(2)) 

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

16 SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS. 

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

18 amended— 

19 (1) in section 4(c)— 

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

21 and inserting ‘‘7(d)(2)’’; and 

22 (B) in paragraph (2)— 

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

24 ‘‘7(d)(2)’’; and 

25 (ii) by striking ‘‘7(e),’’; and 


hmoore on PROD1PC68 with HMBILLS
7 

•HR 1044 IH

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

2 following paragraph (3)— 

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

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

5 ‘‘That the provisions of paragraph (1) of sub6 section (d)’’; and 

7 (B) by striking ‘‘Notwithstanding the pro8 visions of any other law the interest rate on the 

9 Administration’s share of any loan made under 

10 subsection (b) except as provided in subsection 

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

12 provision of law, and except as provided in sub13 section (d), the interest rate on the Administra14 tion’s share of any loan made under subsection 

15 (b)’’. 

Æ 


hmoore on PROD1PC68 with HMBILLS