110TH CONGRESS 

1ST SESSION H. R. 1361

AN ACT

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 

3 ‘‘Relief for Entrepreneurs: Coordination of Objectives and 

4 Values for Effective Recovery Act of 2007’’ or the ‘‘RE5 COVER 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. Hurricane Assistance Replacement Grant program. 

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. Report regarding lack of snow fall. 

Sec. 219. Gulf Coast Disaster Loan Refinancing program. 

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 fol10 lowing: 

11 ‘‘(1) For each region of the Administration, a 

12 description of the disasters most likely to occur in 

13 that region. 

14 ‘‘(2) For each disaster described under para15 graph (1)—

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

17 ‘‘(B) an assessment of the demand for Ad18 ministration assistance most likely to occur in 

19 response to the disaster; 

20 ‘‘(C) an assessment of the needs of the Ad21 ministration, with respect to such resources as 

22 information technology, telecommunications, 

23 human resources, and office space, to meet the 

24 demand referred to in subparagraph (B); and 
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1 ‘‘(D) guidelines pursuant to which the Ad2 ministration will coordinate with other Federal 

3 agencies and with State and local authorities to 

4 best respond to the demand referred to in sub5 paragraph (B) and to best use the resources re6 ferred to in that subparagraph. 

7 ‘‘(b) COMPLETION; REVISION.—The first plan re8 quired by subsection (a) shall be completed not later than 

9 180 days after the date of the enactment of this section. 

10 Thereafter, the Administrator shall update the plan on an 

11 annual basis and following any incident of national signifi12 cance (as declared by the President or his designee). 

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

14 shall carry out subsections (a) and (b) through an indi15 vidual with substantial knowledge in the field of disaster 

16 readiness and emergency response. 

17 ‘‘(d) REPORT.—The Administrator shall include a re18 port on the plan whenever the Administrator submits the 

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

20 SEC. 102. ANNUAL DISASTER SIMULATION EXERCISE. 

21 The Small Business Act is amended by inserting after 

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

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

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

25 conduct a disaster simulation exercise at least once each 
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1 fiscal year. The exercise shall include the participation of, 

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

3 disaster reserve corps and shall test, at maximum capac4 ity, all of the information technology and telecommuni5 cations systems of the Administration that are vital to the 

6 activities of the Administration during such a disaster. 

7 ‘‘(b) REPORT.—The Administrator shall include a re8 port on the disaster simulation exercise whenever the Ad9 ministration submits the report required by section 

10 47(a).’’. 

11 SEC. 103. DISASTER RESERVE CORPS. 

12 The Small Business Act is amended by inserting after 

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

14 ‘‘SEC. 39. DISASTER RESERVE CORPS. 

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

16 maintain within the Administration a disaster reserve 

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

18 of the Administration related to disaster response. The 

19 corps shall consist of at least 1,000 individuals, each of 

20 whom—

21 ‘‘(1) does not ordinarily have the duties of a 

22 full-time officer or employee of the Administration; 

23 but 

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

25 response when the Administrator so requires. 
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1 ‘‘(b) TRAINING.—The Administrator shall ensure 

2 that each individual in the corps receives training each 

3 year in one or more functions relating to disaster response. 

4 To the maximum extent practicable, the function in which 

5 an individual is trained in one year shall be different from 

6 the function in which the individual was trained in prior 

7 years. 

8 ‘‘(c) GEOGRAPHIC DISTRIBUTION.—The Adminis9 trator shall ensure that not more than 30 percent of the 

10 individuals in the corps reside in any one region of the 

11 Administration. 

12 ‘‘(d) REPORT.—The Administrator shall include a re13 port on the corps whenever the Administration submits 

14 the report required by section 47(a).’’. 

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

16 The Small Business Act is amended by inserting after 

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

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

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

20 develop long-term plans to secure additional office space 

21 to accommodate an expanded workforce in times of dis22 aster. 

23 ‘‘(b) REPORT.—The Administrator shall include a re24 port on the plans whenever the Administration submits 

25 the report required by section 47(a).’’. 
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1 SEC. 105. COORDINATION OF DISASTER ASSISTANCE PRO2 GRAMS WITH FEMA. 

3 The Small Business Act is amended by inserting after 

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

5 ‘‘SEC. 41. COORDINATION OF DISASTER ASSISTANCE PRO6 GRAMS WITH FEMA. 

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

8 shall ensure that the disaster assistance programs of the 

9 Administration are coordinated, to the maximum extent 

10 practicable, with the disaster assistance programs of the 

11 Federal Emergency Management Agency. 

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

13 in consultation with the Director of the Federal Emer14 gency Management Agency, shall establish regulations to 

15 ensure that each application for disaster assistance is sub16 mitted as quickly as practicable to the Administration or 

17 directed to the appropriate agency under the cir18 cumstances. 

19 ‘‘(c) COMPLETION; REVISION.—The initial regula20 tions shall be completed not later than 270 days after the 

21 date of the enactment of this section. Thereafter, the regu22 lations shall be revised on an annual basis. 

23 ‘‘(d) REPORT.—The Administrator shall include a re24 port on the regulations whenever the Administration sub25 mits the report required by section 47(a).’’. 
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1 SEC. 106. ASSOCIATE ADMINISTRATOR FOR DISASTER AS2 SISTANCE. 

3 The Small Business Act is amended by inserting after 

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

5 ‘‘SEC. 42. ASSOCIATE ADMINISTRATOR FOR DISASTER AS6 SISTANCE. 

7 ‘‘(a) IN GENERAL.—There is established in the Ad8 ministration an Associate Administrator for Disaster As9 sistance, appointed by the President by and with the ad10 vice and consent of the Senate, from among individuals 

11 who have—

12 ‘‘(1) proven management ability; and 

13 ‘‘(2) substantial knowledge in the field of dis14 aster readiness and emergency response. 

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

16 ‘‘(1) APPOINTMENT.—There is established in 

17 the Administration a Director for Disaster Planning, 

18 appointed by the Administrator from among the per19 sonnel of the Administration. 

20 ‘‘(2) DUTIES.—Subject to the authority, direc21 tion, and control of the Associate Administrator for 

22 Disaster Assistance, the Director shall—

23 ‘‘(A) develop and implement the Adminis24 tration’s plans for responding to disasters; and 

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

26 exercises with respect to disasters. 
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1 ‘‘(3) COORDINATION.—In carrying out the du2 ties under paragraph (2), the Director shall coordi3 nate with—

4 ‘‘(A) the Associate Administrator for the 

5 Office of Disaster Assistance of the Administra6 tion; 

7 ‘‘(B) the Director of the Federal Emer8 gency Management Agency; and 

9 ‘‘(C) other Federal, State, and local dis10 aster planning offices, as necessary. 

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

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

13 the Administration a Director for Disaster Lending, 

14 appointed 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 direct all as19 pects of the disaster lending program under section 

20 7(b). 

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

22 that the Associate Administrator for Disaster Assistance, 

23 the Director of Disaster Planning, and the Director of 

24 Disaster Lending have adequate resources to carry out the 

25 duties 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 OR4 GANIZATIONS.—Section 7(b)(2) of the Small Business Act 

5 (15 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 

2 of an incident of national significance (as declared 

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

4 by 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 de8 struction referred to in paragraph (1). The total 

9 amount shall be calculated without regard for any 

10 costs for which the small business concern is reim11 bursed under any insurance policy or otherwise.’’. 

12 (c) APPLICABILITY FOR FISCAL YEAR 2006 TO HUR13 RICANES KATRINA, RITA, AND WILMA.—

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

15 Administrator—

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 

21 area; 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 hurricane25 affected area, for damage or destruction by rea-
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1 son of Hurricane Katrina, Hurricane Rita, or 

2 Hurricane Wilma. 

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

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

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

6 Florida, Mississippi, Louisiana, or Texas, that has 

7 been designated by the Administrator of the Small 

8 Business Administration as a disaster area by rea9 son of Hurricane Katrina, Hurricane Rita, or Hurri10 cane Wilma under disaster declaration 10176, 

11 10177, 10178, 10179, 10180, 10181, 10203, 10204, 

12 10205, 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 

22 of the Administration and applicants for disaster assist23 ance. The system shall ensure that whenever an applicant 

24 for disaster assistance communicates with such personnel 
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1 on a matter relating to the application, the following infor2 mation 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 

7 communication. 

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 

11 communications from the Administration at all critical 

12 stages 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 

17 whether to approve or deny the loan. 

18 ‘‘(3) When the primary contact person man19 aging 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 Dis-
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1 aster Assistance program, under which the Administration 

2 participates on a deferred (guaranteed) basis in 85 per3 cent of the balance of the financing outstanding at the 

4 time of disbursement of the loan if such balance is less 

5 than or equal to $25,000 for businesses affected by a dis6 aster. 

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

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

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

10 under section 7(b). 

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

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

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

14 before using the proceeds for any other purpose. 

15 ‘‘(d) APPROVAL OR DISAPPROVAL.—The Adminis16 trator shall ensure that each applicant for a loan under 

17 the program receives a decision approving or disapproving 

18 of the application within 36 hours after the Administra19 tion receives the application.’’. 

20 SEC. 204. INCREASED DEFERMENT PERIOD. 

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

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

23 section 201(b)) the following: 

24 ‘‘(f) ADDITIONAL REQUIREMENTS FOR 7(b) 

25 LOANS.—
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1 ‘‘(1) INCREASED DEFERMENT AUTHORIZED.—

2 ‘‘(A) IN GENERAL.—In making loans 

3 under section 7(b), the Administrator may pro4 vide, to the person receiving the loan, an option 

5 to defer repayment on the loan. 

6 ‘‘(B) PERIOD.—A deferment under sub7 paragraph (A) may not exceed 4 years.’’. 

8 SEC. 205. REVISED REPAYMENT TERMS. 

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

10 is amended in subsection (f) by adding after paragraph 

11 (1) (as added by section 204) the following: 

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

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

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

15 made until 12 months after the date on which 

16 the final disbursement of approved amounts is 

17 made; and 

18 ‘‘(B) shall calculate the amount of repay19 ment based solely on the amounts disbursed.’’. 

20 SEC. 206. REVISED DISBURSEMENT PROCESS. 

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

22 is amended in subsection (f) by adding after paragraph 

23 (2) (as added by section 205) the following: 
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1 ‘‘(3) REVISED DISBURSEMENT PROCESS.—In 

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

3 shall disburse the loan amounts in stages as follows: 

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

5 amount approved is less than or equal to 

6 $150,000—

7 ‘‘(i) the first disbursement shall con8 sist of 40 percent of the total loan amount, 

9 or a lesser percentage of the total loan 

10 amount if the Administrator and the bor11 rower agree on such a lesser percentage; 

12 ‘‘(ii) the second disbursement shall 

13 consist of 50 percent of the amounts that 

14 remain after the first disbursement, and 

15 shall be made when the borrower has pro16 duced satisfactory receipts to demonstrate 

17 the proper use of the first half of the first 

18 disbursement; and 

19 ‘‘(iii) the third disbursement shall 

20 consist of the amounts that remain after 

21 the preceding disbursements, and shall be 

22 made when the borrower has produced sat23 isfactory receipts to demonstrate the prop24 er use of the first disbursement and the 

25 first half of the second disbursement. 
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1 ‘‘(B) LOANS FROM $150,000 TO $500,000.—

2 If the total amount approved is more than 

3 $150,000 but less than or equal to $500,000—

4 ‘‘(i) the first disbursement shall con5 sist of 20 percent of the total loan amount, 

6 or a lesser percentage if the Administrator 

7 and the borrower agree on such a lesser 

8 percentage; 

9 ‘‘(ii) the second disbursement shall 

10 consist of 30 percent of the total loan 

11 amount remaining after the first disburse12 ment, and shall be made when the bor13 rower has produced satisfactory receipts to 

14 demonstrate the proper use of the first 

15 half of the first disbursement; 

16 ‘‘(iii) the third disbursement shall 

17 consist of 25 percent of the total loan 

18 amount remaining after the first and sec19 ond disbursements, and shall be made 

20 when the borrower has produced satisfac21 tory receipts to demonstrate the proper use 

22 of the first disbursement and the first half 

23 of the second disbursement; and 

24 ‘‘(iv) the fourth disbursement shall 

25 consist of the amounts that remain after 
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1 the preceding disbursements, and shall be 

2 made when the borrower has produced sat3 isfactory receipts to demonstrate the prop4 er use of the first and second disburse5 ments and the first half of the third dis6 bursement. 

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

8 the total amount approved is more than 

9 $500,000—

10 ‘‘(i) the first disbursement shall con11 sist of at least $100,000, or a lesser 

12 amount if the Administrator and the bor13 rower agree on such a lesser amount; and 

14 ‘‘(ii) the number of disbursements 

15 after the first, and the amount of each 

16 such disbursement, shall be in the discre17 tion of the Administrator, but the amount 

18 of each such disbursement shall be not less 

19 than $100,000.’’. 

20 SEC. 207. REVISED COLLATERAL REQUIREMENTS. 

21 Section 7 of the Small Business Act is amended in 

22 subsection (f) by adding after paragraph (3) (as added 

23 by section 206) the following: 

24 ‘‘(4) REVISED COLLATERAL REQUIREMENTS.—

25 In making a business loan under section 7(b), the 
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1 total approved amount of which is less than or equal 

2 to $100,000, the Administrator shall not require the 

3 borrower to use the borrower’s home as collateral.’’. 

4 SEC. 208. ENHANCED LENDING AUTHORITY FOR PRIVATE 

5 LENDERS. 

6 The Small Business Act is amended by inserting after 

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

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

9 LENDERS. 

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

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

12 carry out a program under which the Administrator per13 mits banks and other financial institutions to process, ap14 prove, close, and service disaster loans under section 7(b) 

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

16 ‘‘(b) PERIODS DURING WHICH PROGRAM IS RE17 QUIRED.—The program under subsection (a) is required 

18 to be carried out during the following periods: 

19 ‘‘(1) Any period of an incident of national sig20 nificance (as declared by the President or his des21 ignee). 

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

23 for the Administration to approve disaster loans in 

24 response to any single disaster is 30 days or more. 
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1 ‘‘(c) EXCLUSION OF LENDERS.—If the number or 

2 rate of defaults on loans processed, approved, and closed 

3 by a lender under the program under subsection (a) are 

4 inordinate, as determined by the Administrator, the Ad5 ministrator may do any one or more of the following: 

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

7 the program under subsection (a). 

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

9 the Preferred Lenders Program under section 

10 7(a)(2)(C)(ii). 

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

12 In determining whether a lender is to be certified or recer13 tified to participate in the Preferred Lenders Program 

14 under section 7(a)(2)(C)(ii), the Administrator may con15 sider as a factor the following: 

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

17 by the lender under the program under subsection 

18 (a). 

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

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

21 SEC. 209. DISASTER PROCESSING REDUNDANCY. 

22 The Small Business Act is amended by inserting after 

23 section 45 (as added by section 208) the following: 
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1 ‘‘SEC. 46. DISASTER PROCESSING REDUNDANCY. 

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

3 that the Administration has in place a facility for disaster 

4 loan processing that, whenever the Administration’s pri5 mary facility for disaster loan processing becomes unavail6 able, is able to take over all disaster loan processing from 

7 that primary facility within 2 days. 

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

9 are authorized to be appropriated to carry out this section 

10 such sums as may be necessary.’’. 

11 SEC. 210. GRANT PROGRAM. 

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

13 636(b)) is amended by inserting immediately after para14 graph (3) the following: 

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

16 BUSINESSES.—

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

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

19 business concern that—

20 ‘‘(i) was located in a designated dis21 aster area affected by disaster declaration 

22 10176, 10177, 10178, 10179, 10180, 

23 10181, 10203, 10204, 10205, 10206, 

24 10222, or 10233, and was located in a 

25 county or parish that, as a result of Hurri26 canes Katrina, Rita, or Wilma of 2005, ex-
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1 perienced a loss of at least 100 housing 

2 units, experienced a loss of at least 1 per3 cent of available housing stock, and re4 quired Federal infrastructure assistance of 

5 a least $200,000; 

6 ‘‘(ii) submits to the Administrator a 

7 certification by the owner of the concern of 

8 intent to reestablish the concern in the 

9 same county or parish in which the busi10 ness was originally located, or in any other 

11 county or parish described in clause (i); 

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

13 for, a conventional disaster assistance loan 

14 under section 7(b); and 

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

16 years before the date on which the applica17 ble disaster declaration was made. 

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

19 this paragraph, the Administrator shall give 

20 priority to a small business concern that the 

21 Administrator determines is economically viable 

22 but unable to meet short-term financial obliga23 tions. 

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

25 term ‘disaster-affected area’ means an area that 
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1 has been designated by the Administrator as a 

2 disaster area. 

3 ‘‘(D) AUTHORIZATION OF APPROPRIA4 TIONS.—There are authorized to be appro5 priated for grants under this paragraph such 

6 funds as may be necessary.’’. 

7 SEC. 211. HURRICANE ASSISTANCE REPLACEMENT GRANT 

8 PROGRAM. 

9 (a) PROGRAM ESTABLISHED.—The Administrator 

10 may carry out a program under which the Administrator 

11 may, in the Administrator’s discretion, make grants to in12 dividuals who—

13 (1) are victims of a disaster under disaster dec14 laration 10176, 10177, 10178, 10179, 10180, 

15 10181, 10203, 10204, 10205, 10206, 10222, or 

16 10223; and 

17 (2) receive (whether before, on, or after the 

18 date of the enactment of this Act) 7(b) disaster as19 sistance because of that disaster. 

20 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated such sums as may be 

22 necessary to carry out this section. 

23 (c) ELIGIBILITY.—An individual is eligible to receive 

24 a grant under this section only if the individual—
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1 (1) receives benefits (other than the 7(b) dis2 aster assistance) because of the disaster; and 

3 (2) is required to remit those benefits to the 

4 Small Business Administration because of a duplica5 tion of benefits. 

6 (d) AMOUNT.—The amount of a grant under this sec7 tion to an individual shall not exceed the amount of the 

8 benefits required to be remitted by the individual, as de9 scribed in subsection (c). 

10 (e) TIME.—The Administrator shall ensure that, to 

11 the maximum extent practicable, a grant made under this 

12 section is made—

13 (1) concurrent with the Administration’s receipt 

14 of the remittance, if the remittance is made after the 

15 date of the enactment of this Act; and 

16 (2) as soon as possible after the Administra17 tion’s receipt of the remittance, in all other cases. 

18 (f) TREATMENT OF GRANTS.—Grants made under 

19 this section shall not be considered a duplication of bene20 fits by the Administrator. 

21 (g) DEFINITIONS.—In this section: 

22 (1) The term ‘‘Administrator’’ means the Ad23 ministrator of the Small Business Administration. 

24 (2) The term ‘‘7(b) disaster assistance’’ means 

25 assistance under paragraph (1) or (2) of section 
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1 7(b)(2) of the Small Business Act (15 U.S.C. 

2 636(b)). 

3 SEC. 212. INCREASE LEGISLATIVE LIMIT. 

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

5 U.S.C. 636(b)(3)(E)) is amended by striking 

6 ‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’ both places 

7 such term appears. 

8 SEC. 213. NET EARNINGS CLAUSES PROHIBITED. 

9 Section 7 of the Small Business Act is amended in 

10 subsection (f) by adding after paragraph (4) (as added 

11 by section 207) the following: 

12 ‘‘(5) NET EARNINGS CLAUSES PROHIBITED.—

13 In making loans under section 7(b), the Adminis14 trator shall not require the borrower to pay any non15 amortized amount for the first 5 years after repay16 ment begins.’’. 

17 SEC. 214. ECONOMIC INJURY DISASTER LOANS TO NON18 PROFITS. 

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

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

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

22 (A) by inserting after ‘‘small business con23 cern’’ the following: ‘‘, private nonprofit organi24 zation,’’; and 
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1 (B) by inserting after ‘‘the concern’’ the 

2 following: ‘‘, organization,’’; and 

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

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

5 nonprofit organizations,’’. 

6 (b) CONFORMING AMENDMENT.—Such section is fur7 ther amended in subsection (c)(5)(C) by inserting after 

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

9 SEC. 215. APPLICANTS THAT WILL CONSTITUTE A MAJOR 

10 SOURCE OF EMPLOYMENT DUE TO CHANGED 

11 ECONOMIC CIRCUMSTANCES. 

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

13 U.S.C. 636(b)(3)(E)) is amended by inserting after ‘‘con14 stitutes’’ the following: ‘‘, or will due to changed economic 

15 circumstances constitute,’’. 

16 SEC. 216. PRELIMINARY APPLICATION PROCESS FOR AS17 SISTANCE FOR SMALL BUSINESS CONCERNS 

18 WITH ESSENTIAL EMPLOYEES ORDERED TO 

19 SERVE ON ACTIVE DUTY IN THE ARMED 

20 FORCES. 

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

22 636(b)(3)) is amended—

23 (1) in subparagraph (C)—

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

25 year’’; and 
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1 (B) by adding at the end the following: 

2 ‘‘The Administrator may, when appropriate (as 

3 determined by the Administrator), waive the 

4 ending date specified in the preceding sentence 

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

6 (2) by adding at the end the following new sub7 paragraph: 

8 ‘‘(G) The Administrator shall establish a proc9 ess under which a small business concern described 

10 in subparagraph (B) may file a preliminary applica11 tion for assistance under this paragraph, accom12 panied by supporting documentation, before the date 

13 on which the essential employee is ordered to active 

14 duty. The Administrator may not actively consider 

15 such an application or provide assistance to the 

16 small business concern based on such an application 

17 until the date on which the essential employee is or18 dered to active duty.’’. 

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

20 ICE STORMS AND BLIZZARDS. 

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

22 632(k)(2)) is amended—

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

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

25 at the end and inserting ‘‘; and’’; and 
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1 (3) by adding at the end the following: 

2 ‘‘(C) ice storms and blizzards.’’. 

3 SEC. 218. REPORT REGARDING LACK OF SNOW FALL. 

4 Not later that 6 months after the date of enactment 

5 of this Act, the Administrator of the Small Business Ad6 ministration shall conduct a study of, and submit a report 

7 to the Committee on Small Business of the House of Rep8 resentatives and the Committee on Small Business and 

9 Entrepreneurship of the Senate that describes—

10 (1) the ability of the Administrator to provide 

11 loans under section 7(b)(2) of the Small Business 

12 Act (15 U.S.C. 636(b)(2)) to small business con13 cerns that depend on high snow fall amounts and 

14 sustain economic injury (as described under that 

15 section) due to a lack of snow fall; 

16 (2) the criteria the Administrator would use to 

17 determine whether to provide a loan under section 

18 7(b)(2) of the Small Business Act (15 U.S.C. 

19 636(b)(2)) to a small business concern that has been 

20 adversely affected by a lack of snow fall; 

21 (3) other Federal assistance (including loans) 

22 available to small business concerns that are ad23 versely affected by a lack of snow fall; and 

24 (4) the history relating to providing loans under 

25 section 7(b)(2) of the Small Business Act (15 U.S.C. 
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1 636(b)(2)) to small business concerns that have been 

2 adversely affected by a lack of snow fall. 

3 SEC. 219. GULF COAST DISASTER LOAN REFINANCING PRO4 GRAM. 

5 (a) IN GENERAL.—The Administrator of the Small 

6 Business Administration may carry out a program to refi7 nance Gulf Coast disaster loans. 

8 (b) TERMS.—The terms of a Gulf Coast disaster loan 

9 refinanced under the program shall be identical to the 

10 terms of the original loan, except that the Administrator 

11 may provide an option to defer repayment on the loan. 

12 Such a deferment may not exceed 4 years after the date 

13 on which the initial disbursement under the original loan 

14 was made. 

15 (c) AMOUNT.—The amount of a Gulf Coast disaster 

16 loan refinanced under the program shall not exceed the 

17 amount of the original loan. 

18 (d) DISCLOSURE OF ACCRUED INTEREST.—When19 ever the Administrator provides an option to defer repay20 ment under subsection (b), the Administrator shall dis21 close the accrued interest that must be paid under the op22 tion. 

23 (e) DEFINITION.—In this section, the term ‘‘Gulf 

24 Coast disaster loan’’ means a loan—
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1 (1) made under section 7(b) of the Small Busi2 ness Act; 

3 (2) in response to Hurricane Katrina, Hurri4 cane Rita, or Hurricane Wilma of 2005; and 

5 (3) for a small business located in a county or 

6 parish designated by the Administrator as a disaster 

7 area by reason of such Hurricane Katrina, Hurri8 cane Rita, or Hurricane Wilma under disaster dec9 laration 10176, 10177, 10178, 10179, 10180, 

10 10181, 10203, 10204, 10205, 10206, 10222, or 

11 10223. 

12 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated such sums as may be 

14 necessary to carry out this section. 

15 TITLE III—OVERSIGHT 

16 SEC. 301. REPORTS ON DISASTER ASSISTANCE. 

17 The Small Business Act is amended by inserting after 

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

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

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

21 45 days after the end of a fiscal year, the Administrator 

22 shall submit to the Committee on Small Business of the 

23 Senate and the Committee on Small Business of the 

24 House of Representatives a report on the disaster assist-
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1 ance operations of the Administration for that fiscal year. 

2 The report shall—

3 ‘‘(1) specify the number of Administration per4 sonnel involved in such operations; 

5 ‘‘(2) describe any material changes to those op6 erations, such as changes to technologies used or to 

7 personnel responsibilities; 

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

9 Administration in responding to disasters during 

10 that fiscal year, including a description of the num11 ber and amounts of loans made for damage and for 

12 economic injury; and 

13 ‘‘(4) describe the plans of the Administration 

14 for preparing to respond to disasters during the next 

15 fiscal year. 

16 ‘‘(b) INCIDENTS OF NATIONAL SIGNIFICANCE.—Dur17 ing the period of an incident of national significance (as 

18 declared by the President or his designee), the Adminis19 trator shall, on a monthly basis, submit to the committees 

20 specified in subsection (a) a report on the disaster assist21 ance operations of the Administration with respect to that 

22 incident of national significance. The report shall speci23 fy—

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

25 ‘‘(2) the number of applications received; 
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1 ‘‘(3) the average time for the Administration to 

2 approve or disapprove an application; 

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

4 ‘‘(5) the average time for initial disbursement 

5 of loan proceeds; and 

6 ‘‘(6) the amount of disaster loan proceeds dis7 bursed.’’. 

Passed the House of Representatives April 18, 2007. 

Attest:

Clerk. 

110TH CONGRESS 

1ST SESSION H. R. 1361

AN ACT

To improve the disaster relief programs of the 

purposes.Small Business Administration, and for other