IB 

Union Calendar No. 47 

110TH CONGRESS 

1ST SESSION H. R. 1361 

[Report No. 110–82] 

To improve the disaster relief programs of the Small Business Administration, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 6, 2007 

Ms. VELA ́ZQUEZ (for herself, Mr. BAKER, Mr. JEFFERSON, Mr. TAYLOR, Mr. 

MELANCON, Mr. GONZALEZ, Mr. GRIJALVA, Mr. LIPINSKI, Ms. MOORE

of Wisconsin, Mr. BRALEY of Iowa, and Mr. JOHNSON of Georgia) introduced the following bill; which was referred to the Committee on Small 

Business 

MARCH 30, 2007 

Additional sponsors: Mr. JINDAL and Ms. MILLENDER-MCDONALD

MARCH 30, 2007 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on March 6, 2007] 

A BILL 

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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the ‘‘Re3 lief for Entrepreneurs: Coordination of Objectives and Val4 ues for Effective Recovery Act of 2007’’ or the ‘‘RECOVER 

5 Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—PLANNING 

Sec. 101. Comprehensive disaster response plan. 

Sec. 102. Annual disaster simulation exercise. 

Sec. 103. Disaster reserve corps. 

Sec. 104. Plans to secure additional office space. 

Sec. 105. Coordination of disaster assistance programs with FEMA. 

Sec. 106. Associate Administrator for Disaster Assistance. 

TITLE II—LENDING 

Sec. 201. Incidents of National Significance. 

Sec. 202. Information tracking and follow-up system. 

Sec. 203. Immediate Disaster Assistance program. 

Sec. 204. Increased deferment period. 

Sec. 205. Revised repayment terms. 

Sec. 206. Revised disbursement process. 

Sec. 207. Revised collateral requirements. 

Sec. 208. Enhanced lending authority for private lenders. 

Sec. 209. Disaster processing redundancy. 

Sec. 210. Grant program. 

Sec. 211. Waiver of prohibition on duplication of certain benefits. 

Sec. 212. Increase legislative limit. 

Sec. 213. Net earnings clauses prohibited. 

Sec. 214. Economic injury disaster loans to nonprofits. 

Sec. 215. Applicants that will constitute a major source of employment due to 

changed economic circumstances. 

Sec. 216. Preliminary application process for assistance for small business concerns with essential employees ordered to serve on active duty in 

the Armed Forces. 

Sec. 217. Economic injury disaster loans in cases of ice storms and blizzards. 

Sec. 218. Economic injury disaster loans for businesses affected by lack of snowfall. 

TITLE III—OVERSIGHT 

Sec. 301. Reports on disaster assistance. 


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1 TITLE I—PLANNING 

2 SEC. 101. COMPREHENSIVE DISASTER RESPONSE PLAN. 

3 The Small Business Act is amended by redesignating 

4 section 37 as section 99 and by inserting after section 36 

5 the following: 

6 ‘‘SEC. 37. COMPREHENSIVE DISASTER RESPONSE PLAN. 

7 ‘‘(a) PLAN REQUIRED.—The Administrator shall de8 velop, implement, and maintain a comprehensive written 

9 disaster response plan. The plan shall include the following: 

10 ‘‘(1) For each region of the Administration, a de11 scription of the disasters most likely to occur in that 

12 region. 

13 ‘‘(2) For each disaster described under para14 graph (1)— 

15 ‘‘(A) an assessment of the disaster; 

16 ‘‘(B) an assessment of the demand for Ad17 ministration assistance most likely to occur in 

18 response to the disaster; 

19 ‘‘(C) an assessment of the needs of the Ad20 ministration, with respect to such resources as 

21 information technology, telecommunications, 

22 human resources, and office space, to meet the 

23 demand referred to in subparagraph (B); and 

24 ‘‘(D) guidelines pursuant to which the Ad25 ministration will coordinate with other Federal 


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1 agencies and with State and local authorities to 

2 best respond to the demand referred to in sub3 paragraph (B) and to best use the resources re4 ferred to in that subparagraph. 

5 ‘‘(b) COMPLETION; REVISION.—The first plan required 

6 by subsection (a) shall be completed not later than 180 days 

7 after the date of the enactment of this section. Thereafter, 

8 the Administrator shall update the plan on an annual basis 

9 and following any incident of national significance (as de10 clared by the President or his designee). 

11 ‘‘(c) KNOWLEDGE REQUIRED.—The Administrator 

12 shall carry out subsections (a) and (b) through an indi13 vidual with substantial knowledge in the field of disaster 

14 readiness and emergency response. 

15 ‘‘(d) REPORT.—The Administrator shall include a re16 port on the plan whenever the Administrator submits the 

17 report required by section 47(a).’’. 

18 SEC. 102. ANNUAL DISASTER SIMULATION EXERCISE. 

19 The Small Business Act is amended by inserting after 

20 section 37 (as added by section 101) the following: 

21 ‘‘SEC. 38. ANNUAL DISASTER SIMULATION EXERCISE. 

22 ‘‘(a) EXERCISE REQUIRED.—The Administrator shall 

23 conduct a disaster simulation exercise at least once each 

24 fiscal year. The exercise shall include the participation of, 

25 at a minimum, not less than half of the individuals in the 


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1 disaster reserve corps and shall test, at maximum capacity, 

2 all of the information technology and telecommunications 

3 systems of the Administration that are vital to the activities 

4 of the Administration during such a disaster. 

5 ‘‘(b) REPORT.—The Administrator shall include a re6 port on the disaster simulation exercise whenever the Ad7 ministration submits the report required by section 47(a).’’. 

8 SEC. 103. DISASTER RESERVE CORPS. 

9 The Small Business Act is amended by inserting after 

10 section 38 (as added by section 102) the following: 

11 ‘‘SEC. 39. DISASTER RESERVE CORPS. 

12 ‘‘(a) CORPS REQUIRED.—The Administrator shall 

13 maintain within the Administration a disaster reserve 

14 corps, the purpose of which is to perform the functions of 

15 the Administration related to disaster response. The corps 

16 shall consist of at least 1,000 individuals, each of whom— 

17 ‘‘(1) does not ordinarily have the duties of a full18 time officer or employee of the Administration; but 

19 ‘‘(2) is able to assume duties related to disaster 

20 response when the Administrator so requires. 

21 ‘‘(b) TRAINING.—The Administrator shall ensure that 

22 each individual in the corps receives training each year in 

23 one or more functions relating to disaster response. To the 

24 maximum extent practicable, the function in which an in25 dividual is trained in one year shall be different from the 


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1 function in which the individual was trained in prior 

2 years. 

3 ‘‘(c) GEOGRAPHIC DISTRIBUTION.—The Administrator 

4 shall ensure that not more than 30 percent of the individ5 uals in the corps reside in any one region of the Adminis6 tration. 

7 ‘‘(d) REPORT.—The Administrator shall include a re8 port on the corps whenever the Administration submits the 

9 report required by section 47(a).’’. 

10 SEC. 104. PLANS TO SECURE ADDITIONAL OFFICE SPACE. 

11 The Small Business Act is amended by inserting after 

12 section 39 (as added by section 103) the following: 

13 ‘‘SEC. 40. PLANS TO SECURE ADDITIONAL OFFICE SPACE. 

14 ‘‘(a) PLANS REQUIRED.—The Administrator shall de15 velop long-term plans to secure additional office space to 

16 accommodate an expanded workforce in times of disaster. 

17 ‘‘(b) REPORT.—The Administrator shall include a re18 port on the plans whenever the Administration submits the 

19 report required by section 47(a).’’. 

20 SEC. 105. COORDINATION OF DISASTER ASSISTANCE PRO21 GRAMS WITH FEMA. 

22 The Small Business Act is amended by inserting after 

23 section 40 (as added by section 104) the following: 


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1 ‘‘SEC. 41. COORDINATION OF DISASTER ASSISTANCE PRO2 GRAMS WITH FEMA. 

3 ‘‘(a) COORDINATION REQUIRED.—The Administrator 

4 shall ensure that the disaster assistance programs of the Ad5 ministration are coordinated, to the maximum extent prac6 ticable, with the disaster assistance programs of the Federal 

7 Emergency Management Agency. 

8 ‘‘(b) REGULATIONS REQUIRED.—The Administrator, 

9 in consultation with the Director of the Federal Emergency 

10 Management Agency, shall establish regulations to ensure 

11 that each application for disaster assistance is submitted 

12 as quickly as practicable to the Administration or directed 

13 to the appropriate agency under the circumstances. 

14 ‘‘(c) COMPLETION; REVISION.—The initial regulations 

15 shall be completed not later than 270 days after the date 

16 of the enactment of this section. Thereafter, the regulations 

17 shall be revised on an annual basis. 

18 ‘‘(d) REPORT.—The Administrator shall include a re19 port on the regulations whenever the Administration sub20 mits the report required by section 47(a).’’. 

21 SEC. 106. ASSOCIATE ADMINISTRATOR FOR DISASTER AS22 SISTANCE. 

23 The Small Business Act is amended by inserting after 

24 section 41 (as added by section 105) the following: 


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1 ‘‘SEC. 42. ASSOCIATE ADMINISTRATOR FOR DISASTER AS2 SISTANCE. 

3 ‘‘(a) IN GENERAL.—There is established in the Admin4 istration an Associate Administrator for Disaster Assist5 ance, appointed by the President by and with the advice 

6 and consent of the Senate, from among individuals who 

7 have— 

8 ‘‘(1) proven management ability; and 

9 ‘‘(2) substantial knowledge in the field of disaster 

10 readiness and emergency response. 

11 ‘‘(b) DIRECTOR OF DISASTER PLANNING.— 

12 ‘‘(1) APPOINTMENT.—There is established in the 

13 Administration a Director for Disaster Planning, ap14 pointed by the Administrator from among the per15 sonnel of the Administration. 

16 ‘‘(2) DUTIES.—Subject to the authority, direc17 tion, and control of the Associate Administrator for 

18 Disaster Assistance, the Director shall— 

19 ‘‘(A) develop and implement the Adminis20 tration’s plans for responding to disasters; and 

21 ‘‘(B) direct the Administration’s training 

22 exercises with respect to disasters. 

23 ‘‘(3) COORDINATION.—In carrying out the duties 

24 under paragraph (2), the Director shall coordinate 

25 with— 


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1 ‘‘(A) the Associate Administrator for the Of2 fice of Disaster Assistance of the Administration; 

3 ‘‘(B) the Director of the Federal Emergency 

4 Management Agency; and 

5 ‘‘(C) other Federal, State, and local disaster 

6 planning offices, as necessary. 

7 ‘‘(c) DIRECTOR OF DISASTER LENDING.— 

8 ‘‘(1) APPOINTMENT.—There is established in the 

9 Administration a Director for Disaster Lending, ap10 pointed by the Administrator from among the per11 sonnel of the Administration. 

12 ‘‘(2) DUTIES.—Subject to the authority, direc13 tion, and control of the Associate Administrator for 

14 Disaster Assistance, the Director shall direct all as15 pects of the disaster lending program under section 

16 7(b). 

17 ‘‘(d) RESOURCES.—The Administrator shall ensure 

18 that the Associate Administrator for Disaster Assistance, 

19 the Director of Disaster Planning, and the Director of Dis20 aster Lending have adequate resources to carry out the du21 ties under this section.’’. 


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1 TITLE II—LENDING 

2 SEC. 201. INCIDENTS OF NATIONAL SIGNIFICANCE. 

3 (a) DISASTER LOANS TO PRIVATE NONPROFIT ORGA4 NIZATIONS.—Section 7(b)(2) of the Small Business Act (15 

5 U.S.C. 636(b)(2)) is amended— 

6 (1) in subparagraph (D) by striking the period 

7 at the end and inserting ‘‘; or’’; and 

8 (2) by inserting after subparagraph (D) the fol9 lowing: 

10 ‘‘(E) an incident of national significance, 

11 as declared by the President or his designee, in 

12 which case assistance under this paragraph may 

13 be provided, subject to the other applicable re14 quirements of this paragraph, to a private non15 profit organization (as that term is defined in 

16 section 29(a)(2)) that is located in an area af17 fected by the incident of national significance.’’. 

18 (b) MITIGATION LOANS TO SMALL BUSINESS CON19 CERNS.—Section 7 of the Small Business Act (15 U.S.C. 

20 636) is amended by inserting after subsection (d) the fol21 lowing: 

22 ‘‘(e) DISASTER MITIGATION LOANS.— 

23 ‘‘(1) AUTHORITY.—The Administrator may 

24 make or guarantee a mitigation loan to a small busi25 ness concern that receives a loan under section 


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1 7(b)(1)(A) for the damage or destruction, by reason of 

2 an incident of national significance (as declared by 

3 the President or his designee), of property owned by 

4 the small business concern. 

5 ‘‘(2) AMOUNT OF LOAN.—The amount of a loan 

6 under paragraph (1) shall not exceed 20 percent of 

7 the total amount of the cost of the damage or destruc8 tion referred to in paragraph (1). The total amount 

9 shall be calculated without regard for any costs for 

10 which the small business concern is reimbursed under 

11 any insurance policy or otherwise.’’. 

12 (c) APPLICABILITY FOR FISCAL YEAR 2006 TO HURRI13 CANES KATRINA, RITA, AND WILMA.— 

14 (1) IN GENERAL.—For fiscal year 2006, the Ad15 ministrator— 

16 (A) may carry out subsection (e) of section 

17 7 of the Small Business Act (as added by sub18 section (b) of this section) with respect to a pri19 vate nonprofit organization that was located, as 

20 of August 28, 2005, in a hurricane-affected area; 

21 and 

22 (B) may carry out such subsection (e) with 

23 respect to a small business concern that was lo24 cated, as of August 28, 2005, in a hurricane-af25 fected area, for damage or destruction by reason 


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1 of Hurricane Katrina, Hurricane Rita, or Hur2 ricane Wilma. 

3 (2) HURRICANE-AFFECTED AREA DEFINED.—In 

4 this section, the term ‘‘hurricane-affected area’’ means 

5 a county or parish in the State of Alabama, Florida, 

6 Mississippi, Louisiana, or Texas, that has been des7 ignated by the Administrator of the Small Business 

8 Administration as a disaster area by reason of Hur9 ricane Katrina, Hurricane Rita, or Hurricane 

10 Wilma under disaster declaration 10176, 10177, 

11 10178, 10179, 10180, 10181, 10203, 10204, 10205, 

12 10206, 10222, or 10223. 

13 SEC. 202. INFORMATION TRACKING AND FOLLOW-UP SYS14 TEM. 

15 The Small Business Act is amended by inserting after 

16 section 42 (as added by section 106) the following: 

17 ‘‘SEC. 43. INFORMATION TRACKING AND FOLLOW-UP SYS18 TEM FOR DISASTER ASSISTANCE. 

19 ‘‘(a) SYSTEM REQUIRED.—The Administrator shall 

20 develop, implement, and maintain a centralized informa21 tion system to track communications between personnel of 

22 the Administration and applicants for disaster assistance. 

23 The system shall ensure that whenever an applicant for dis24 aster assistance communicates with such personnel on a 


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1 matter relating to the application, the following informa2 tion is recorded: 

3 ‘‘(1) The method of communication. 

4 ‘‘(2) The date of communication. 

5 ‘‘(3) The identity of the personnel. 

6 ‘‘(4) A summary of the subject matter of the com7 munication. 

8 ‘‘(b) FOLLOW-UP REQUIRED.—The Administrator 

9 shall ensure that an applicant for disaster assistance re10 ceives, by telephone, mail, or electronic mail, follow-up com11 munications from the Administration at all critical stages 

12 of the application process, including the following: 

13 ‘‘(1) When the Administration determines that 

14 additional information or documentation is required 

15 to process the application. 

16 ‘‘(2) When the Administration determines wheth17 er to approve or deny the loan. 

18 ‘‘(3) When the primary contact person managing 

19 the loan application has changed.’’. 

20 SEC. 203. IMMEDIATE DISASTER ASSISTANCE PROGRAM. 

21 The Small Business Act is amended by inserting after 

22 section 43 (as added by section 202) the following: 

23 ‘‘SEC. 44. IMMEDIATE DISASTER ASSISTANCE PROGRAM. 

24 ‘‘(a) PROGRAM REQUIRED.—The Administrator shall 

25 carry out a program, to be known as the Immediate DisVerDate Aug 31 2005 03:11 Mar 31, 2007 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6203 E:\BILLS\H1361.RH H1361

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1 aster Assistance program, under which the Administration 

2 participates on a deferred (guaranteed) basis in 85 percent 

3 of the balance of the financing outstanding at the time of 

4 disbursement of the loan if such balance is less than or equal 

5 to $25,000 for businesses affected by a disaster. 

6 ‘‘(b) ELIGIBILITY REQUIREMENT.—To receive a loan 

7 guaranteed under subsection (a), the applicant must also 

8 apply for, and meet basic eligibility standards for, a loan 

9 under section 7(b). 

10 ‘‘(c) USE OF PROCEEDS.—A person who receives a 

11 loan under section 7(b) must use the proceeds of that loan 

12 to repay all loans guaranteed under subsection (a), if any, 

13 before using the proceeds for any other purpose. 

14 ‘‘(d) APPROVAL OR DISAPPROVAL.—The Adminis15 trator shall ensure that each applicant for a loan under 

16 the program receives a decision approving or disapproving 

17 of the application within 36 hours after the Administration 

18 receives the application.’’. 

19 SEC. 204. INCREASED DEFERMENT PERIOD. 

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

21 is amended by inserting after subsection (e) (as added by 

22 section 201(b)) the following: 

23 ‘‘(f) ADDITIONAL REQUIREMENTS FOR 7(b) LOANS.— 

24 ‘‘(1) INCREASED DEFERMENT AUTHORIZED.— 


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1 ‘‘(A) IN GENERAL.—In making loans under 

2 section 7(b), the Administrator may provide, to 

3 the person receiving the loan, an option to defer 

4 repayment on the loan. 

5 ‘‘(B) PERIOD.—A deferment under subpara6 graph (A) may not exceed 4 years.’’. 

7 SEC. 205. REVISED REPAYMENT TERMS. 

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

9 is amended in subsection (f) by adding after paragraph (1) 

10 (as added by section 204) the following: 

11 ‘‘(2) REVISED REPAYMENT TERMS.—In making 

12 loans under section 7(b), the Administrator— 

13 ‘‘(A) shall not require repayment to be 

14 made until 12 months after the date on which 

15 the final disbursement of approved amounts is 

16 made; and 

17 ‘‘(B) shall calculate the amount of repay18 ment based solely on the amounts disbursed.’’. 

19 SEC. 206. REVISED DISBURSEMENT PROCESS. 

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

21 is amended in subsection (f) by adding after paragraph (2) 

22 (as added by section 205) the following: 

23 ‘‘(3) REVISED DISBURSEMENT PROCESS.—In 

24 making loans under section 7(b), the Administrator 

25 shall disburse the loan amounts in stages as follows: 


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1 ‘‘(A) LOANS UP TO $150,000.—If the total 

2 amount approved is less than or equal to 

3 $150,000— 

4 ‘‘(i) the first disbursement shall consist 

5 of 40 percent of the total loan amount, or 

6 a lesser percentage of the total loan amount 

7 if the Administrator and the borrower agree 

8 on such a lesser percentage; 

9 ‘‘(ii) the second disbursement shall con10 sist of 50 percent of the amounts that re11 main after the first disbursement, and shall 

12 be made when the borrower has produced 

13 satisfactory receipts to demonstrate the 

14 proper use of the first half of the first dis15 bursement; and 

16 ‘‘(iii) the third disbursement shall con17 sist of the amounts that remain after the 

18 preceding disbursements, and shall be made 

19 when the borrower has produced satisfactory 

20 receipts to demonstrate the proper use of the 

21 first disbursement and the first half of the 

22 second disbursement. 

23 ‘‘(B) LOANS FROM $150,000 TO $500,000.—If 

24 the total amount approved is more than 

25 $150,000 but less than or equal to $500,000— 


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1 ‘‘(i) the first disbursement shall consist 

2 of 20 percent of the total loan amount, or 

3 a lesser percentage if the Administrator and 

4 the borrower agree on such a lesser percent5 age; 

6 ‘‘(ii) the second disbursement shall con7 sist of 30 percent of the total loan amount 

8 remaining after the first disbursement, and 

9 shall be made when the borrower has pro10 duced satisfactory receipts to demonstrate 

11 the proper use of the first half of the first 

12 disbursement; 

13 ‘‘(iii) the third disbursement shall con14 sist of 25 percent of the total loan amount 

15 remaining after the first and second dis16 bursements, and shall be made when the 

17 borrower has produced satisfactory receipts 

18 to demonstrate the proper use of the first 

19 disbursement and the first half of the second 

20 disbursement; and 

21 ‘‘(iv) the fourth disbursement shall con22 sist of the amounts that remain after the 

23 preceding disbursements, and shall be made 

24 when the borrower has produced satisfactory 

25 receipts to demonstrate the proper use of the 


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1 first and second disbursements and the first 

2 half of the third disbursement. 

3 ‘‘(C) LOANS GREATER THAN $500,000.—If the 

4 total amount approved is more than $500,000— 

5 ‘‘(i) the first disbursement shall consist 

6 of at least $100,000, or a lesser amount if 

7 the Administrator and the borrower agree 

8 on such a lesser amount; and 

9 ‘‘(ii) the number of disbursements after 

10 the first, and the amount of each such dis11 bursement, shall be in the discretion of the 

12 Administrator, but the amount of each such 

13 disbursement shall be not less than 

14 $100,000.’’. 

15 SEC. 207. REVISED COLLATERAL REQUIREMENTS. 

16 Section 7 of the Small Business Act is amended in sub17 section (f) by adding after paragraph (3) (as added by sec18 tion 206) the following: 

19 ‘‘(4) REVISED COLLATERAL REQUIREMENTS.—In 

20 making a business loan under section 7(b), the total 

21 approved amount of which is less than or equal to 

22 $100,000, the Administrator shall not require the bor23 rower to use the borrower’s home as collateral.’’. 


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1 SEC. 208. ENHANCED LENDING AUTHORITY FOR PRIVATE 

2 LENDERS. 

3 The Small Business Act is amended by inserting after 

4 section 44 (as added by section 203) the following: 

5 ‘‘SEC. 45. ENHANCED LENDING AUTHORITY FOR PRIVATE 

6 LENDERS. 

7 ‘‘(a) PROGRAM AUTHORIZED.—The Administrator 

8 may, and during a period specified in subsection (b) shall, 

9 carry out a program under which the Administrator per10 mits banks and other financial institutions to process, ap11 prove, close, and service disaster loans under section 7(b) 

12 for a fee not to exceed 2 percent of the total loan amount. 

13 ‘‘(b) PERIODS DURING WHICH PROGRAM IS RE14 QUIRED.—The program under subsection (a) is required to 

15 be carried out during the following periods: 

16 ‘‘(1) Any period of an incident of national sig17 nificance (as declared by the President or his des18 ignee). 

19 ‘‘(2) Any period during which the average time 

20 for the Administration to approve disaster loans in 

21 response to any single disaster is 30 days or more. 

22 ‘‘(c) EXCLUSION OF LENDERS.—If the number or rate 

23 of defaults on loans processed, approved, and closed by a 

24 lender under the program under subsection (a) are inordi25 nate, as determined by the Administrator, the Adminis26 trator may do any one or more of the following: 


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1 ‘‘(1) Exclude the lender from participating in 

2 the program under subsection (a). 

3 ‘‘(2) Exclude the lender from participating in 

4 the Preferred Lenders Program under section 

5 7(a)(2)(C)(ii). 

6 ‘‘(d) FACTOR IN PREFERRED LENDERS PROGRAM.— 

7 In determining whether a lender is to be certified or recer8 tified to participate in the Preferred Lenders Program 

9 under section 7(a)(2)(C)(ii), the Administrator may con10 sider as a factor the following: 

11 ‘‘(1) The loans processed, approved, and closed 

12 by the lender under the program under subsection (a). 

13 ‘‘(2) The participation or non-participation of 

14 the lender in the program under subsection (a).’’. 

15 SEC. 209. DISASTER PROCESSING REDUNDANCY. 

16 The Small Business Act is amended by inserting after 

17 section 45 (as added by section 208) the following: 

18 ‘‘SEC. 46. DISASTER PROCESSING REDUNDANCY. 

19 ‘‘(a) IN GENERAL.—The Administrator shall ensure 

20 that the Administration has in place a facility for disaster 

21 loan processing that, whenever the Administration’s pri22 mary facility for disaster loan processing becomes unavail23 able, is able to take over all disaster loan processing from 

24 that primary facility within 2 days. 


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1 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this section 

3 such sums as may be necessary.’’. 

4 SEC. 210. GRANT PROGRAM. 

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

6 636(b)) is amended by inserting immediately after para7 graph (3) the following: 

8 ‘‘(4) GRANTS TO DISASTER-AFFECTED SMALL

9 BUSINESSES.— 

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

11 may make a grant of up to $100,000 to a small 

12 business concern that— 

13 ‘‘(i) was located in a designated dis14 aster area affected by disaster declaration 

15 10176, 10177, 10178, 10179, 10180, 10181, 

16 10203, 10204, 10205, 10206, 10222, or 

17 10233, and was located in a county or par18 ish that, as a result of Hurricanes Katrina, 

19 Rita, or Wilma of 2005, experienced a loss 

20 of at least 100 housing units, experienced a 

21 loss of at least 1 percent of available hous22 ing stock, and required Federal infrastruc23 ture assistance of a least $200,000; 

24 ‘‘(ii) submits to the Administrator a 

25 certification by the owner of the concern of 


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1 intent to reestablish the concern in the same 

2 county or parish in which the business was 

3 originally located, or in any other county or 

4 parish described in clause (i); 

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

6 for, a conventional disaster assistance loan 

7 under section 7(b); and 

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

9 years before the date on which the applica10 ble disaster declaration was made. 

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

12 this paragraph, the Administrator shall give pri13 ority to a small business concern that the Ad14 ministrator determines is economically viable 

15 but unable to meet short-term financial obliga16 tions. 

17 ‘‘(C) DEFINITION.—In this paragraph, the 

18 term ‘disaster-affected area’ means an area that 

19 has been designated by the Administrator as a 

20 disaster area. 

21 ‘‘(D) AUTHORIZATION OF APPROPRIA22 TIONS.—There are authorized to be appropriated 

23 for grants under this paragraph such funds as 

24 may be necessary.’’. 


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1 SEC. 211. WAIVER OF PROHIBITION ON DUPLICATION OF 

2 CERTAIN BENEFITS. 

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

4 636(b)) is amended by inserting immediately after para5 graph (4) (as added by section 210) the following: 

6 ‘‘(5) WAIVER OF PROHIBITION ON DUPLICATION

7 OF CERTAIN BENEFITS.—For any disaster victim 

8 under disaster declaration 10176, 10177, 10178, 

9 10179, 10180, 10181, 10203, 10204, 10205, 10206, 

10 10222, or 10223, in providing assistance under para11 graph (1) or (2), the Administrator may waive, in 

12 whole or in part, the prohibition on the duplication 

13 of benefits, including whether damage or destruction 

14 has been compensated for by, credit is available from, 

15 activities are reimbursable through, or funds have 

16 been made available from any other source.’’. 

17 SEC. 212. INCREASE LEGISLATIVE LIMIT. 

18 Section 7(b)(3)(E) of the Small Business Act (15 

19 U.S.C. 636(b)(3)(E)) is amended by striking ‘‘$1,500,000’’ 

20 and inserting ‘‘$3,000,000’’ both places such term appears. 

21 SEC. 213. NET EARNINGS CLAUSES PROHIBITED. 

22 Section 7 of the Small Business Act is amended in sub23 section (f) by adding after paragraph (4) (as added by sec24 tion 207) the following: 

25 ‘‘(5) NET EARNINGS CLAUSES PROHIBITED.—In 

26 making loans under section 7(b), the Administrator 


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1 shall not require the borrower to pay any non-amor2 tized amount for the first 5 years after repayment be3 gins.’’. 

4 SEC. 214. ECONOMIC INJURY DISASTER LOANS TO NON5 PROFITS. 

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

7 (15 U.S.C. 636) is amended in subsection (b)(2)— 

8 (1) in the matter preceding subparagraph (A)— 

9 (A) by inserting after ‘‘small business con10 cern’’ the following: ‘‘, private nonprofit organi11 zation,’’; and 

12 (B) by inserting after ‘‘the concern’’ the fol13 lowing: ‘‘, organization,’’; and 

14 (2) in subparagraph (D) by inserting after 

15 ‘‘small business concerns’’ the following: ‘‘, private 

16 nonprofit organizations,’’. 

17 (b) CONFORMING AMENDMENT.—Such section is fur18 ther amended in subsection (c)(5)(C) by inserting after 

19 ‘‘business’’ the following: ‘‘, organization,’’. 

20 SEC. 215. APPLICANTS THAT WILL CONSTITUTE A MAJOR 

21 SOURCE OF EMPLOYMENT DUE TO CHANGED 

22 ECONOMIC CIRCUMSTANCES. 

23 Section 7(b)(3)(E) of the Small Business Act (15 

24 U.S.C. 636(b)(3)(E)) is amended by inserting after ‘‘conVerDate Aug 31 2005 03:11 Mar 31, 2007 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6203 E:\BILLS\H1361.RH H1361

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1 stitutes’’ the following: ‘‘, or will due to changed economic 

2 circumstances constitute,’’. 

3 SEC. 216. PRELIMINARY APPLICATION PROCESS FOR AS4 SISTANCE FOR SMALL BUSINESS CONCERNS 

5 WITH ESSENTIAL EMPLOYEES ORDERED TO 

6 SERVE ON ACTIVE DUTY IN THE ARMED 

7 FORCES. 

8 Section 7(b)(3) of the Small Business Act (15 U.S.C. 

9 636(b)(3)) is amended— 

10 (1) in subparagraph (C)— 

11 (A) by striking ‘‘90 days’’ and inserting ‘‘1 

12 year’’; and 

13 (B) by adding at the end the following: 

14 ‘‘The Administrator may, when appropriate (as 

15 determined by the Administrator), waive the 

16 ending date specified in the preceding sentence 

17 and provide a later ending date.’’; and 

18 (2) by adding at the end the following new sub19 paragraph: 

20 ‘‘(G) The Administrator shall establish a process 

21 under which a small business concern described in 

22 subparagraph (B) may file a preliminary application 

23 for assistance under this paragraph, accompanied by 

24 supporting documentation, before the date on which 

25 the essential employee is ordered to active duty. The 


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1 Administrator may not actively consider such an ap2 plication or provide assistance to the small business 

3 concern based on such an application until the date 

4 on which the essential employee is ordered to active 

5 duty.’’. 

6 SEC. 217. ECONOMIC INJURY DISASTER LOANS IN CASES OF 

7 ICE STORMS AND BLIZZARDS. 

8 Section 3(k)(2) of the Small Business Act (15 U.S.C. 

9 632(k)(2)) is amended— 

10 (1) in subparagraph (A) by striking ‘‘and’’; 

11 (2) in subparagraph (B) by striking the period 

12 at the end and inserting ‘‘; and’’; and 

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

14 ‘‘(C) ice storms and blizzards.’’. 

15 SEC. 218. ECONOMIC INJURY DISASTER LOANS FOR BUSI16 NESSES AFFECTED BY LACK OF SNOWFALL. 

17 (a) IN GENERAL.—Section 3(k)(2) of the Small Busi18 ness Act (15 U.S.C. 632(k)(2)), as amended by section 217, 

19 is further amended— 

20 (1) in subparagraph (B) by striking ‘‘and’’ at 

21 the end; 

22 (2) in subparagraph (C) by striking the period 

23 at the end and inserting ‘‘; and’’; and 

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

25 ‘‘(D) lack of snowfall.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 7(b)(2) of the 

2 Small Business Act (15 U.S.C. 636(b)(2)) is amended in 

3 the matter preceding subparagraph (A) by inserting after 

4 ‘‘(including drought’’ the following: ‘‘or lack of snowfall’’. 

5 TITLE III—OVERSIGHT 

6 SEC. 301. REPORTS ON DISASTER ASSISTANCE. 

7 The Small Business Act is amended by inserting after 

8 section 46 (as added by section 209) the following: 

9 ‘‘SEC. 47. REPORTS ON DISASTER ASSISTANCE. 

10 ‘‘(a) ANNUAL REPORT REQUIRED.—Not later than 45 

11 days after the end of a fiscal year, the Administrator shall 

12 submit to the Committee on Small Business of the Senate 

13 and the Committee on Small Business of the House of Rep14 resentatives a report on the disaster assistance operations 

15 of the Administration for that fiscal year. The report 

16 shall— 

17 ‘‘(1) specify the number of Administration per18 sonnel involved in such operations; 

19 ‘‘(2) describe any material changes to those oper20 ations, such as changes to technologies used or to per21 sonnel responsibilities; 

22 ‘‘(3) describe and assess the effectiveness of the 

23 Administration in responding to disasters during that 

24 fiscal year, including a description of the number and 


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1 amounts of loans made for damage and for economic 

2 injury; and 

3 ‘‘(4) describe the plans of the Administration for 

4 preparing to respond to disasters during the next fis5 cal year. 

6 ‘‘(b) INCIDENTS OF NATIONAL SIGNIFICANCE.—During 

7 the period of an incident of national significance (as de8 clared by the President or his designee), the Administrator 

9 shall, on a monthly basis, submit to the committees specified 

10 in subsection (a) a report on the disaster assistance oper11 ations of the Administration with respect to that incident 

12 of national significance. The report shall specify— 

13 ‘‘(1) the number of applications distributed; 

14 ‘‘(2) the number of applications received; 

15 ‘‘(3) the average time for the Administration to 

16 approve or disapprove an application; 

17 ‘‘(4) the amount of disaster loans approved; 

18 ‘‘(5) the average time for initial disbursement of 

19 loan proceeds; and 

20 ‘‘(6) the amount of disaster loan proceeds dis21 bursed.’’. 


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Union Calendar No. 47 

110TH CONGRESS 

1ST SESSION H. R. 1361 

[Report No. 110

–82] 

A BILL 

To improve the disaster relief programs of the 

purposes. Small Business Administration, and for other 

MARCH 30, 2007 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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