I 

110TH CONGRESS 

1ST SESSION H. R. 1361 

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 

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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Relief for Entrepreneurs: Coordination of Objectives and 

6 Values for Effective Recovery Act of 2007’’ or the ‘‘RE7 COVER Act’’. 

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

9 this Act is as follows: 


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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. 

TITLE III—OVERSIGHT 

Sec. 301. Reports on disaster assistance. 

1 TITLE I—PLANNING 

2 SEC. 101. COMPREHENSIVE DISASTER RESPONSE PLAN. 

3 The Small Business Act is amended by redesignating 

4 section 37 as 99 and by inserting after section 36 the fol5 lowing: 

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: 


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

2 description of the disasters most likely to occur in 

3 that region. 

4 ‘‘(2) For each disaster described under para5 graph (1)— 

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

7 ‘‘(B) an assessment of the demand for Ad8 ministration assistance most likely to occur in 

9 response to the disaster; 

10 ‘‘(C) an assessment of the needs of the Ad11 ministration, with respect to such resources as 

12 information technology, telecommunications, 

13 human resources, and office space, to meet the 

14 demand referred to in subparagraph (B); and 

15 ‘‘(D) guidelines pursuant to which the Ad16 ministration will coordinate with other Federal 

17 agencies and with State and local authorities to 

18 best respond to the demand referred to in sub19 paragraph (B) and to best use the resources re20 ferred to in that subparagraph. 

21 ‘‘(b) COMPLETION; REVISION.—The first plan re22 quired by subsection (a) shall be completed not later than 

23 180 days after the date of the enactment of this section. 

24 Thereafter, the Administrator shall update the plan on an 


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1 annual basis and following any incident of national signifi2 cance (as declared by the President or his designee). 

3 ‘‘(c) REPORT.—The Administrator shall include a re4 port on the plan whenever the Administrator submits the 

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

6 SEC. 102. ANNUAL DISASTER SIMULATION EXERCISE. 

7 The Small Business Act is amended by inserting after 

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

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

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

11 conduct a disaster simulation exercise at least once each 

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

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

14 disaster reserve corps and shall test, at maximum capac15 ity, all of the information technology and telecommuni16 cations systems of the Administration that are vital to the 

17 activities of the Administration during such a disaster. 

18 ‘‘(b) REPORT.—The Administrator shall include a re19 port on the disaster simulation exercise whenever the Ad20 ministration submits the report required by section 

21 47(a).’’. 

22 SEC. 103. DISASTER RESERVE CORPS. 

23 The Small Business Act is amended by inserting after 

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


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1 ‘‘SEC. 39. DISASTER RESERVE CORPS. 

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

3 maintain within the Administration a disaster reserve 

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

5 of the Administration related to disaster response. The 

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

7 whom— 

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

9 full-time officer or employee of the Administration; 

10 but 

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

12 response when the Administrator so requires. 

13 ‘‘(b) TRAINING.—The Administrator shall ensure 

14 that each individual in the corps receives training each 

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

16 To the maximum extent practicable, the function in which 

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

18 the function in which the individual was trained in prior 

19 years. 

20 ‘‘(c) GEOGRAPHIC DISTRIBUTION.—The Adminis21 trator shall ensure that not more than 30 percent of the 

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

23 Administration. 

24 ‘‘(d) REPORT.—The Administrator shall include a re25 port on the corps whenever the Administration submits 

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


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

2 The Small Business Act is amended by inserting after 

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

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

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

6 develop long-term plans to secure additional office space 

7 to accommodate an expanded workforce in times of dis8 aster. 

9 ‘‘(b) REPORT.—The Administrator shall include a re10 port on the plans whenever the Administration submits 

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

12 SEC. 105. COORDINATION OF DISASTER ASSISTANCE PRO13 GRAMS WITH FEMA. 

14 The Small Business Act is amended by inserting after 

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

16 ‘‘SEC. 41. COORDINATION OF DISASTER ASSISTANCE PRO17 GRAMS WITH FEMA. 

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

19 shall ensure that the disaster assistance programs of the 

20 Administration are coordinated, to the maximum extent 

21 practicable, with the disaster assistance programs of the 

22 Federal Emergency Management Agency. 

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

24 in consultation with the Director of the Federal Emer25 gency Management Agency, shall establish regulations to 

26 ensure that each application for disaster assistance is subVerDate Aug 31 2005 22:29 Mar 07, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1361.IH H1361

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1 mitted as quickly as practicable to the Administration or 

2 directed to the appropriate agency under the cir3 cumstances. 

4 ‘‘(c) COMPLETION; REVISION.—The initial regula5 tions shall be completed not later than 270 days after the 

6 date of the enactment of this section. Thereafter, the regu7 lations shall be revised on an annual basis. 

8 ‘‘(d) REPORT.—The Administrator shall include a re9 port on the regulations whenever the Administration sub10 mits the report required by section 47(a).’’. 

11 SEC. 106. ASSOCIATE ADMINISTRATOR FOR DISASTER AS12 SISTANCE. 

13 The Small Business Act is amended by inserting after 

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

15 ‘‘SEC. 42. ASSOCIATE ADMINISTRATOR FOR DISASTER AS16 SISTANCE. 

17 ‘‘(a) IN GENERAL.—There is established in the Ad18 ministration an Associate Administrator for Disaster As19 sistance, appointed by the President by and with the ad20 vice and consent of the Senate, from among individuals 

21 who have— 

22 ‘‘(1) proven management ability; and 

23 ‘‘(2) substantial knowledge in the field of dis24 aster readiness and emergency response. 

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


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

2 the Administration a Director for Disaster Planning, 

3 appointed by the Administrator. 

4 ‘‘(2) DUTIES.—Subject to the authority, direc5 tion, and control of the Associate Administrator for 

6 Disaster Assistance, the Director shall— 

7 ‘‘(A) develop and implement the Adminis8 tration’s plans for responding to disasters; and 

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

10 exercises with respect to disasters. 

11 ‘‘(3) COORDINATION.—In carrying out the du12 ties under paragraph (2), the Director shall coordi13 nate with— 

14 ‘‘(A) the Associate Administrator for the 

15 Office of Disaster Assistance of the Administra16 tion; 

17 ‘‘(B) the Director of the Federal Emer18 gency Management Agency; and 

19 ‘‘(C) other Federal, State, and local dis20 aster planning offices, as necessary. 

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

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

23 the Administration a Director for Disaster Lending, 

24 appointed by the Administrator. 


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1 ‘‘(2) DUTIES.—Subject to the authority, direc2 tion, and control of the Associate Administrator for 

3 Disaster Assistance, the Director shall direct all as4 pects of the disaster lending program under section 

5 7(b). 

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

7 that the Associate Administrator for Disaster Assistance, 

8 the Director of Disaster Planning, and the Director of 

9 Disaster Lending have adequate resources to carry out the 

10 duties under this section.’’. 

11 TITLE II—LENDING 

12 SEC. 201. INCIDENTS OF NATIONAL SIGNIFICANCE. 

13 (a) DISASTER LOANS TO PRIVATE NONPROFIT OR14 GANIZATIONS.—Section 7(b)(2) of the Small Business Act 

15 (15 U.S.C. 636(b)(2)) is amended— 

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

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

18 (2) by inserting after subparagraph (D) the fol19 lowing: 

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

21 as declared by the President or his designee, in 

22 which case assistance under this paragraph may 

23 be provided, subject to the other applicable re24 quirements of this paragraph, to a private non25 profit organization (as that term is defined in 


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1 section 29(a)(2)) that is located in an area af2 fected by the incident of national significance.’’. 

3 (b) MITIGATION LOANS TO SMALL BUSINESS CON4 CERNS.—Section 7 of the Small Business Act (15 U.S.C. 

5 636) is amended by inserting after subsection (d) the fol6 lowing: 

7 ‘‘(e) DISASTER MITIGATION LOANS.— 

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

9 make or guarantee a mitigation loan to a small busi10 ness concern that receives a loan under section 

11 7(b)(1)(A) for the damage or destruction, by reason 

12 of an incident of national significance (as declared 

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

14 by the small business concern. 

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

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

17 the total amount of the cost of the damage or de18 struction referred to in paragraph (1). The total 

19 amount shall be calculated without regard for any 

20 costs for which the small business concern is reim21 bursed under any insurance policy or otherwise.’’. 

22 (c) APPLICABILITY FOR FISCAL YEAR 2006 TO HUR23 RICANES KATRINA, RITA, AND WILMA.— 

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

25 Administrator— 


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

2 7 of the Small Business Act (as added by sub3 section (b) of this section) with respect to a pri4 vate nonprofit organization that was located, as 

5 of August 28, 2005, in a hurricane-affected 

6 area; and 

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

8 respect to a small business concern that was lo9 cated, as of August 28, 2005, in a hurricane10 affected area, for damage or destruction by rea11 son of Hurricane Katrina, Hurricane Rita, or 

12 Hurricane Wilma. 

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

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

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

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

17 been designated by the Administrator of the Small 

18 Business Administration as a disaster area by rea19 son of Hurricane Katrina, Hurricane Rita, or Hurri20 cane Wilma under disaster declaration 10176, 

21 10177, 10178, 10179, 10180, 10181, 10203, 10204, 

22 10205, 10206, 10222, or 10223. 


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1 SEC. 202. INFORMATION TRACKING AND FOLLOW-UP SYS2 TEM. 

3 The Small Business Act is amended by inserting after 

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

5 ‘‘SEC. 43. INFORMATION TRACKING AND FOLLOW-UP SYS6 TEM FOR DISASTER ASSISTANCE. 

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

8 develop, implement, and maintain a centralized informa9 tion system to track communications between personnel 

10 of the Administration and applicants for disaster assist11 ance. The system shall ensure that whenever an applicant 

12 for disaster assistance communicates with such personnel 

13 on a matter relating to the application, the following infor14 mation is recorded: 

15 ‘‘(1) The method of communication. 

16 ‘‘(2) The date of communication. 

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

18 ‘‘(4) A summary of the subject matter of the 

19 communication. 

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

21 shall ensure that an applicant for disaster assistance re22 ceives, by telephone, mail, or electronic mail, follow-up 

23 communications from the Administration at all critical 

24 stages of the application process, including the following: 


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1 ‘‘(1) When the Administration determines that 

2 additional information or documentation is required 

3 to process the application. 

4 ‘‘(2) When the Administration determines 

5 whether to approve or deny the loan. 

6 ‘‘(3) When the primary contact person man7 aging the loan application has changed.’’. 

8 SEC. 203. IMMEDIATE DISASTER ASSISTANCE PROGRAM. 

9 The Small Business Act is amended by inserting after 

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

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

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

13 carry out a program, to be known as the Immediate Dis14 aster Assistance program, under which the Administration 

15 participates on a deferred (guaranteed) basis in 85 per16 cent of the balance of the financing outstanding at the 

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

18 than or equal to $25,000 for businesses affected by a dis19 aster. 

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

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

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

23 under section 7(b). 

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

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


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

2 before using the proceeds for any other purpose. 

3 ‘‘(d) APPROVAL OR DISAPPROVAL.—The Adminis4 trator shall ensure that each applicant for a loan under 

5 the program receives a decision approving or disapproving 

6 of the application within 36 hours after the Administra7 tion receives the application.’’. 

8 SEC. 204. INCREASED DEFERMENT PERIOD. 

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

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

11 section 201(b)) the following: 

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

13 LOANS.— 

14 ‘‘(1) INCREASED DEFERMENT AUTHORIZED.— 

15 ‘‘(A) IN GENERAL.—In making loans 

16 under section 7(b), the Administrator may pro17 vide, to the person receiving the loan, an option 

18 to defer repayment on the loan. 

19 ‘‘(B) PERIOD.—A deferment under sub20 paragraph (A) may not exceed 4 years.’’. 

21 SEC. 205. REVISED REPAYMENT TERMS. 

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

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

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


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

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

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

4 made until 12 months after the date on which 

5 the final disbursement of approved amounts is 

6 made; and 

7 ‘‘(B) shall calculate the amount of repay8 ment based solely on the amounts disbursed.’’. 

9 SEC. 206. REVISED DISBURSEMENT PROCESS. 

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

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

12 (2) (as added by section 205) the following: 

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

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

15 shall disburse the loan amounts in stages as follows: 

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

17 amount approved is less than or equal to 

18 $150,000— 

19 ‘‘(i) the first disbursement shall con20 sist of 40 percent of the total loan amount, 

21 or a lesser percentage of the total loan 

22 amount if the Administrator and the bor23 rower agree on such a lesser percentage; 

24 ‘‘(ii) the second disbursement shall 

25 consist of 50 percent of the amounts that 


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1 remain after the first disbursement, and 

2 shall be made when the borrower has pro3 duced satisfactory receipts to demonstrate 

4 the proper use of the first half of the first 

5 disbursement; and 

6 ‘‘(iii) the third disbursement shall 

7 consist of the amounts that remain after 

8 the preceding disbursements, and shall be 

9 made when the borrower has produced sat10 isfactory receipts to demonstrate the prop11 er use of the first disbursement and the 

12 first half of the second disbursement. 

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

14 If the total amount approved is more than 

15 $150,000 but less than or equal to $500,000— 

16 ‘‘(i) the first disbursement shall con17 sist of 20 percent of the total loan amount, 

18 or a lesser percentage if the Administrator 

19 and the borrower agree on such a lesser 

20 percentage; 

21 ‘‘(ii) the second disbursement shall 

22 consist of 30 percent of the total loan 

23 amount remaining after the first disburse24 ment, and shall be made when the bor25 rower has produced satisfactory receipts to 


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1 demonstrate the proper use of the first 

2 half of the first disbursement; 

3 ‘‘(iii) the third disbursement shall 

4 consist of 25 percent of the total loan 

5 amount remaining after the first and sec6 ond disbursements, and shall be made 

7 when the borrower has produced satisfac8 tory receipts to demonstrate the proper use 

9 of the first disbursement and the first half 

10 of the second disbursement; and 

11 ‘‘(iv) the fourth disbursement shall 

12 consist of the amounts that remain after 

13 the preceding disbursements, and shall be 

14 made when the borrower has produced sat15 isfactory receipts to demonstrate the prop16 er use of the first and second disburse17 ments and the first half of the third dis18 bursement. 

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

20 the total amount approved is more than 

21 $500,000— 

22 ‘‘(i) the first disbursement shall con23 sist of at least $100,000, or a lesser 

24 amount if the Administrator and the bor25 rower agree on such a lesser amount; and 


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1 ‘‘(ii) the number of disbursements 

2 after the first, and the amount of each 

3 such disbursement, shall be in the discre4 tion of the Administrator, but the amount 

5 of each such disbursement shall be not less 

6 than $100,000.’’. 

7 SEC. 207. REVISED COLLATERAL REQUIREMENTS. 

8 Section 7 of the Small Business Act is amended in 

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

10 by section 206) the following: 

11 ‘‘(4) REVISED COLLATERAL REQUIREMENTS.— 

12 In making a business loan under section 7(b), the 

13 total approved amount of which is less than or equal 

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

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

16 SEC. 208. ENHANCED LENDING AUTHORITY FOR PRIVATE 

17 LENDERS. 

18 The Small Business Act is amended by inserting after 

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

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

21 LENDERS. 

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

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

24 carry out a program under which the Administrator per25 mits banks and other financial institutions to process, apVerDate Aug 31 2005 22:29 Mar 07, 2007 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H1361.IH H1361

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1 prove, close, and service disaster loans under section 7(b) 

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

3 ‘‘(b) PERIODS DURING WHICH PROGRAM IS RE4 QUIRED.—The program under subsection (a) is required 

5 to be carried out during the following periods: 

6 ‘‘(1) Any period of an incident of national sig7 nificance (as declared by the President or his des8 ignee). 

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

10 for the Administration to approve disaster loans in 

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

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

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

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

15 inordinate, as determined by the Administrator, the Ad16 ministrator may do any one or more of the following: 

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

18 the program under subsection (a). 

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

20 the Preferred Lenders Program under section 

21 7(a)(2)(C)(ii). 

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

23 In determining whether a lender is to be certified or recer24 tified to participate in the Preferred Lenders Program 


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1 under section 7(a)(2)(C)(ii), the Administrator may con2 sider as a factor the following: 

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

4 by the lender under the program under subsection 

5 (a). 

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

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

8 SEC. 209. DISASTER PROCESSING REDUNDANCY. 

9 The Small Business Act is amended by inserting after 

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

11 ‘‘SEC. 46. DISASTER PROCESSING REDUNDANCY. 

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

13 that the Administration has in place a facility for disaster 

14 loan processing that, whenever the Administration’s pri15 mary facility for disaster loan processing becomes unavail16 able, is able to take over all disaster loan processing from 

17 that primary facility within 2 days. 

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

19 are authorized to be appropriated to carry out this section 

20 such sums as may be necessary.’’. 

21 SEC. 210. GRANT PROGRAM. 

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

23 636(b)) is amended by inserting immediately after para24 graph (3) the following: 


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

2 BUSINESSES.— 

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

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

5 business concern that— 

6 ‘‘(i) was located in a designated dis7 aster area affected by disaster declaration 

8 10176, 10177, 10178, 10179, 10180, 

9 10181, 10203, 10204, 10205, 10206, 

10 10222, or 10233; 

11 ‘‘(ii) submits to the Administrator a 

12 certification by the owner of the concern of 

13 intent to reestablish the concern in the 

14 same county or parish in which the busi15 ness was originally located, or in a county 

16 or parish contiguous thereto; 

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

18 for, a conventional disaster assistance loan 

19 under section 7(b); and 

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

21 years before the date on which the applica22 ble disaster declaration was made. 

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

24 this paragraph, the Administrator shall give 

25 priority to a small business concern that the 


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1 Administrator determines is economically viable 

2 but unable to meet short-term financial obliga3 tions. 

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

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

6 has been designated by the Administrator as a 

7 disaster area. 

8 ‘‘(D) AUTHORIZATION OF APPROPRIA9 TIONS.—There are authorized to be appro10 priated for grants under this paragraph such 

11 funds as may be necessary.’’. 

12 SEC. 211. WAIVER OF PROHIBITION ON DUPLICATION OF 

13 CERTAIN BENEFITS. 

14 (a) IN GENERAL.—Section 7(b) of the Small Busi15 ness Act (15 U.S.C. 636(b)) is amended by inserting im16 mediately after paragraph (4) (as added by section 210) 

17 the following: 

18 ‘‘(5) WAIVER OF PROHIBITION ON DUPLICATION

19 OF CERTAIN BENEFITS.—For any major disaster (as 

20 that term is defined in section 102 of the Robert T. 

21 Stafford Disaster Relief and Emergency Assistance 

22 Act (42 U.S.C. 5122)), in providing assistance 

23 under paragraph (1) or (2), the Administrator may 

24 waive, in whole or in part, the prohibition on the du25 plication of benefits, including whether damage or 


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1 destruction has been compensated for by, credit is 

2 available from, activities are reimbursable through, 

3 or funds have been made available from any other 

4 source.’’. 

5 (b) APPLICABILITY AND RETROACTIVITY FOR VIC6 TIMS OF HURRICANES KATRINA, RITA, AND WILMA.—The 

7 amendment made by this section shall apply to any assist8 ance under section 7(b) of the Small Business Act (15 

9 U.S.C. 636(b)) provided on or after August 29, 2005. 

10 SEC. 212. INCREASE LEGISLATIVE LIMIT. 

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

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

13 ‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’ both places 

14 such term appears. 

15 SEC. 213. NET EARNINGS CLAUSES PROHIBITED. 

16 Section 7 of the Small Business Act is amended in 

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

18 by section 207) the following: 

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

20 In making loans under section 7(b), the Adminis21 trator shall not require the borrower to pay any non22 amortized amount for the first 5 years after repay23 ment begins.’’. 


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•HR 1361 IH

1 SEC. 214. ECONOMIC INJURY DISASTER LOANS TO NON2 PROFITS. 

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

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

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

6 (A) by inserting after ‘‘small business con7 cern’’ the following: ‘‘, private nonprofit organi8 zation,’’; and 

9 (B) by inserting after ‘‘the concern’’ the 

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

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

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

13 nonprofit organizations,’’. 

14 (b) CONFORMING AMENDMENT.—Such section is fur15 ther amended in subsection (c)(5)(C) by inserting after 

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

17 SEC. 215. APPLICANTS THAT WILL CONSTITUTE A MAJOR 

18 SOURCE OF EMPLOYMENT DUE TO CHANGED 

19 ECONOMIC CIRCUMSTANCES. 

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

21 U.S.C. 636(b)(3)(E)) is amended by inserting after ‘‘con22 stitutes’’ the following: ‘‘, or will due to changed economic 

23 circumstances constitute,’’. 


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•HR 1361 IH

1 TITLE III—OVERSIGHT 

2 SEC. 301. REPORTS ON DISASTER ASSISTANCE. 

3 The Small Business Act is amended by inserting after 

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

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

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

7 45 days after the end of a fiscal year, the Administrator 

8 shall submit to the Committee on Small Business of the 

9 Senate and the Committee on Small Business of the 

10 House of Representatives a report on the disaster assist11 ance operations of the Administration for that fiscal year. 

12 The report shall— 

13 ‘‘(1) specify the number of Administration per14 sonnel involved in such operations; 

15 ‘‘(2) describe any material changes to those op16 erations, such as changes to technologies used or to 

17 personnel responsibilities; 

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

19 Administration in responding to disasters during 

20 that fiscal year, including a description of the num21 ber and amounts of loans made for damage and for 

22 economic injury; and 

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

24 for preparing to respond to disasters during the next 

25 fiscal year. 


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•HR 1361 IH

1 ‘‘(b) INCIDENTS OF NATIONAL SIGNIFICANCE.—Dur2 ing the period of an incident of national significance (as 

3 declared by the President or his designee), the Adminis4 trator shall, on a monthly basis, submit to the committees 

5 specified in subsection (a) a report on the disaster assist6 ance operations of the Administration with respect to that 

7 incident of national significance. The report shall speci8 fy— 

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

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

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

12 approve or disapprove an application; 

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

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

15 of loan proceeds; and 

16 ‘‘(6) the amount of disaster loan proceeds dis17 bursed.’’. 

Æ 


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