‘‘(B) LOANS FROM $150,000 TO $500,000.—
If the total amount approved is more than 
$150,000 but less than or equal to $500,000—
‘‘(i) the first disbursement shall con-
sist of 20 percent of the total loan amount, 
or a lesser percentage if the Administrator 
and the borrower agree on such a lesser 
percentage; 
‘‘(ii) the second disbursement shall 
consist of 30 percent of the total loan 
amount remaining after the first disburse-
ment, and shall be made when the bor-
rower has produced satisfactory receipts to 
demonstrate the proper use of the first 
half of the first disbursement; 
‘‘(iii) the third disbursement shall 
consist of 25 percent of the total loan 
amount remaining after the first and sec-
ond disbursements, and shall be made 
when the borrower has produced satisfac-
tory receipts to demonstrate the proper use 
of the first disbursement and the first half 
of the second disbursement; and 
‘‘(iv) the fourth disbursement shall 
consist of the amounts that remain after
the preceding disbursements, and shall be 
made when the borrower has produced sat-
isfactory receipts to demonstrate the prop-
er use of the first and second disburse-
ments and the first half of the third dis-
bursement. 
‘‘(C) LOANS GREATER THAN $500,000.—If 
the total amount approved is more than 
$500,000—
‘‘(i) the first disbursement shall con-
sist of at least $100,000, or a lesser 
amount if the Administrator and the bor-
rower agree on such a lesser amount; and 
‘‘(ii) the number of disbursements 
after the first, and the amount of each 
such disbursement, shall be in the discre-
tion of the Administrator, but the amount 
of each such disbursement shall be not less 
than $100,000.’’. 
SEC. 207. REVISED COLLATERAL REQUIREMENTS. 
Section 7 of the Small Business Act is amended in 
subsection (f) by adding after paragraph (3) (as added 
by section 206) the following: 
‘‘(4) REVISED COLLATERAL REQUIREMENTS.—
In making a business loan under section 7(b), the
total approved amount of which is less than or equal 
to $100,000, the Administrator shall not require the 
borrower to use the borrower’s home as collateral.’’. 
SEC. 208. ENHANCED LENDING AUTHORITY FOR PRIVATE 
LENDERS. 
The Small Business Act is amended by inserting after 
section 44 (as added by section 203) the following: 
‘‘SEC. 45. ENHANCED LENDING AUTHORITY FOR PRIVATE 
LENDERS. 
‘‘(a) PROGRAM AUTHORIZED.—The Administrator 
may, and during a period specified in subsection (b) shall, 
carry out a program under which the Administrator per-
mits banks and other financial institutions to process, ap-
prove, close, and service disaster loans under section 7(b) 
for a fee not to exceed 2 percent of the total loan amount. 
‘‘(b) PERIODS DURING WHICH PROGRAM IS RE-
QUIRED.—The program under subsection (a) is required 
to be carried out during the following periods: 
‘‘(1) Any period of an incident of national sig-
nificance (as declared by the President or his des-
ignee). 
‘‘(2) Any period during which the average time 
for the Administration to approve disaster loans in 
response to any single disaster is 30 days or more.
‘‘(c) EXCLUSION OF LENDERS.—If the number or 
rate of defaults on loans processed, approved, and closed 
by a lender under the program under subsection (a) are 
inordinate, as determined by the Administrator, the Ad-
ministrator may do any one or more of the following: 
‘‘(1) Exclude the lender from participating in 
the program under subsection (a). 
‘‘(2) Exclude the lender from participating in 
the Preferred Lenders Program under section 
7(a)(2)(C)(ii). 
‘‘(d) FACTOR IN PREFERRED LENDERS PROGRAM.—
In determining whether a lender is to be certified or recer-
tified to participate in the Preferred Lenders Program 
under section 7(a)(2)(C)(ii), the Administrator may con-
sider as a factor the following: 
‘‘(1) The loans processed, approved, and closed 
by the lender under the program under subsection 
(a). 
‘‘(2) The participation or non-participation of 
the lender in the program under subsection (a).’’. 
SEC. 209. DISASTER PROCESSING REDUNDANCY. 
The Small Business Act is amended by inserting after 
section 45 (as added by section 208) the following:
‘‘SEC. 46. DISASTER PROCESSING REDUNDANCY. 
‘‘(a) IN GENERAL.—The Administrator shall ensure 
that the Administration has in place a facility for disaster 
loan processing that, whenever the Administration’s pri-
mary facility for disaster loan processing becomes unavail-
able, is able to take over all disaster loan processing from 
that primary facility within 2 days. 
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary.’’. 
SEC. 210. GRANT PROGRAM. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)) is amended by inserting immediately after para-
graph (3) the following: 
‘‘(4) GRANTS TO DISASTER-AFFECTED SMALL 
BUSINESSES.—
‘‘(A) IN
GENERAL.—The Administrator 
may make a grant of up to $100,000 to a small 
business concern that—
‘‘(i) was located in a designated dis-
aster area affected by disaster declaration 
10176, 10177, 10178, 10179, 10180, 
10181, 10203, 10204, 10205, 10206, 
10222, or 10233, and was located in a 
county or parish that, as a result of Hurri-
canes Katrina, Rita, or Wilma of 2005, ex-
perienced a loss of at least 100 housing 
units, experienced a loss of at least 1 per-
cent of available housing stock, and re-
quired Federal infrastructure assistance of 
a least $200,000; 
‘‘(ii) submits to the Administrator a 
certification by the owner of the concern of 
intent to reestablish the concern in the 
same county or parish in which the busi-
ness was originally located, or in any other 
county or parish described in clause (i); 
‘‘(iii) has applied for, and was rejected 
for, a conventional disaster assistance loan 
under section 7(b); and 
‘‘(iv) was in existence for at least 2 
years before the date on which the applica-
ble disaster declaration was made. 
‘‘(B) PRIORITY.—In making grants under 
this paragraph, the Administrator shall give 
priority to a small business concern that the 
Administrator determines is economically viable 
but unable to meet short-term financial obliga-
tions. 
‘‘(C) DEFINITION.—In this paragraph, the 
term ‘disaster-affected area’ means an area that
has been designated by the Administrator as a 
disaster area. 
‘‘(D) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated for grants under this paragraph such 
funds as may be necessary.’’. 
SEC. 211. HURRICANE ASSISTANCE REPLACEMENT GRANT 
PROGRAM. 
(a) PROGRAM ESTABLISHED.—The Administrator 
may carry out a program under which the Administrator 
may, in the Administrator’s discretion, make grants to in-
dividuals who—
(1) are victims of a disaster under disaster dec-
laration 10176, 10177, 10178, 10179, 10180, 
10181, 10203, 10204, 10205, 10206, 10222, or 
10223; and 
(2) receive (whether before, on, or after the 
date of the enactment of this Act) 7(b) disaster as-
sistance because of that disaster. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as may be 
necessary to carry out this section. 
(c) ELIGIBILITY.—An individual is eligible to receive 
a grant under this section only if the individual—
(1) receives benefits (other than the 7(b) dis-
aster assistance) because of the disaster; and 
(2) is required to remit those benefits to the 
Small Business Administration because of a duplica-
tion of benefits. 
(d) AMOUNT.—The amount of a grant under this sec-
tion to an individual shall not exceed the amount of the 
benefits required to be remitted by the individual, as de-
scribed in subsection (c). 
(e) TIME.—The Administrator shall ensure that, to 
the maximum extent practicable, a grant made under this 
section is made—
(1) concurrent with the Administration’s receipt 
of the remittance, if the remittance is made after the 
date of the enactment of this Act; and 
(2) as soon as possible after the Administra-
tion’s receipt of the remittance, in all other cases. 
(f) TREATMENT OF GRANTS.—Grants made under 
this section shall not be considered a duplication of bene-
fits by the Administrator. 
(g) DEFINITIONS.—In this section: 
(1) The term ‘‘Administrator’’ means the Ad-
ministrator of the Small Business Administration. 
(2) The term ‘‘7(b) disaster assistance’’ means 
assistance under paragraph (1) or (2) of section
7(b)(2) of the Small Business Act (15 U.S.C. 
636(b)). 
SEC. 212. INCREASE LEGISLATIVE LIMIT. 
Section 7(b)(3)(E) of the Small Business Act (15 
U.S.C. 
636(b)(3)(E)) 
is 
amended 
by 
striking 
‘‘$1,500,000’’ and inserting ‘‘$3,000,000’’ both places 
such term appears. 
SEC. 213. NET EARNINGS CLAUSES PROHIBITED. 
Section 7 of the Small Business Act is amended in 
subsection (f) by adding after paragraph (4) (as added 
by section 207) the following: 
‘‘(5) NET EARNINGS CLAUSES PROHIBITED.—
In making loans under section 7(b), the Adminis-
trator shall not require the borrower to pay any non-
amortized amount for the first 5 years after repay-
ment begins.’’. 
SEC. 214. ECONOMIC INJURY DISASTER LOANS TO NON-
PROFITS. 
(a) IN GENERAL.—Section 7 of the Small Business 
Act (15 U.S.C. 636) is amended in subsection (b)(2)—
(1) in the matter preceding subparagraph (A)—
(A) by inserting after ‘‘small business con-
cern’’ the following: ‘‘, private nonprofit organi-
zation,’’; and
(B) by inserting after ‘‘the concern’’ the 
following: ‘‘, organization,’’; and 
(2) in subparagraph (D) by inserting after 
‘‘small business concerns’’ the following: ‘‘, private 
nonprofit organizations,’’. 
(b) CONFORMING AMENDMENT.—Such section is fur-
ther amended in subsection (c)(5)(C) by inserting after 
‘‘business’’ the following: ‘‘, organization,’’. 
SEC. 215. APPLICANTS THAT WILL CONSTITUTE A MAJOR 
SOURCE OF EMPLOYMENT DUE TO CHANGED 
ECONOMIC CIRCUMSTANCES. 
Section 7(b)(3)(E) of the Small Business Act (15 
U.S.C. 636(b)(3)(E)) is amended by inserting after ‘‘con-
stitutes’’ the following: ‘‘, or will due to changed economic 
circumstances constitute,’’. 
SEC. 216. PRELIMINARY APPLICATION PROCESS FOR AS-
SISTANCE FOR SMALL BUSINESS CONCERNS 
WITH ESSENTIAL EMPLOYEES ORDERED TO 
SERVE ON ACTIVE DUTY IN THE ARMED 
FORCES. 
Section 7(b)(3) of the Small Business Act (15 U.S.C. 
636(b)(3)) is amended—
(1) in subparagraph (C)—
(A) by striking ‘‘90 days’’ and inserting ‘‘1 
year’’; and
(B) by adding at the end the following: 
‘‘The Administrator may, when appropriate (as 
determined by the Administrator), waive the 
ending date specified in the preceding sentence 
and provide a later ending date.’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(G) The Administrator shall establish a proc-
ess under which a small business concern described 
in subparagraph (B) may file a preliminary applica-
tion for assistance under this paragraph, accom-
panied by supporting documentation, before the date 
on which the essential employee is ordered to active 
duty. The Administrator may not actively consider 
such an application or provide assistance to the 
small business concern based on such an application 
until the date on which the essential employee is or-
dered to active duty.’’. 
SEC. 217. ECONOMIC INJURY DISASTER LOANS IN CASES OF 
ICE STORMS AND BLIZZARDS. 
Section 3(k)(2) of the Small Business Act (15 U.S.C. 
632(k)(2)) is amended—
(1) in subparagraph (A) by striking ‘‘and’’; 
(2) in subparagraph (B) by striking the period 
at the end and inserting ‘‘; and’’; and
(3) by adding at the end the following: 
‘‘(C) ice storms and blizzards.’’. 
SEC. 218. REPORT REGARDING LACK OF SNOW FALL. 
Not later that 6 months after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
ministration shall conduct a study of, and submit a report 
to the Committee on Small Business of the House of Rep-
resentatives and the Committee on Small Business and 
Entrepreneurship of the Senate that describes—
(1) the ability of the Administrator to provide 
loans under section 7(b)(2) of the Small Business 
Act (15 U.S.C. 636(b)(2)) to small business con-
cerns that depend on high snow fall amounts and 
sustain economic injury (as described under that 
section) due to a lack of snow fall; 
(2) the criteria the Administrator would use to 
determine whether to provide a loan under section 
7(b)(2) of the Small Business Act (15 U.S.C. 
636(b)(2)) to a small business concern that has been 
adversely affected by a lack of snow fall; 
(3) other Federal assistance (including loans) 
available to small business concerns that are ad-
versely affected by a lack of snow fall; and 
(4) the history relating to providing loans under 
section 7(b)(2) of the Small Business Act (15 U.S.C.
636(b)(2)) to small business concerns that have been 
adversely affected by a lack of snow fall. 
SEC. 219. GULF COAST DISASTER LOAN REFINANCING PRO-
GRAM. 
(a) IN GENERAL.—The Administrator of the Small 
Business Administration may carry out a program to refi-
nance Gulf Coast disaster loans. 
(b) TERMS.—The terms of a Gulf Coast disaster loan 
refinanced under the program shall be identical to the 
terms of the original loan, except that the Administrator 
may provide an option to defer repayment on the loan. 
Such a deferment may not exceed 4 years after the date 
on which the initial disbursement under the original loan 
was made. 
(c) AMOUNT.—The amount of a Gulf Coast disaster 
loan refinanced under the program shall not exceed the 
amount of the original loan. 
(d) DISCLOSURE OF ACCRUED INTEREST.—When-
ever the Administrator provides an option to defer repay-
ment under subsection (b), the Administrator shall dis-
close the accrued interest that must be paid under the op-
tion. 
(e) DEFINITION.—In this section, the term ‘‘Gulf 
Coast disaster loan’’ means a loan—
(1) made under section 7(b) of the Small Busi-
ness Act; 
(2) in response to Hurricane Katrina, Hurri-
cane Rita, or Hurricane Wilma of 2005; and 
(3) for a small business located in a county or 
parish designated by the Administrator as a disaster 
area by reason of such Hurricane Katrina, Hurri-
cane Rita, or Hurricane Wilma under disaster dec-
laration 10176, 10177, 10178, 10179, 10180, 
10181, 10203, 10204, 10205, 10206, 10222, or 
10223. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as may be 
necessary to carry out this section. 
TITLE III—OVERSIGHT 
SEC. 301. REPORTS ON DISASTER ASSISTANCE. 
The Small Business Act is amended by inserting after 
section 46 (as added by section 209) the following: 
‘‘SEC. 47. REPORTS ON DISASTER ASSISTANCE. 
‘‘(a) ANNUAL REPORT REQUIRED.—Not later than 
45 days after the end of a fiscal year, the Administrator 
shall submit to the Committee on Small Business of the 
Senate and the Committee on Small Business of the 
House of Representatives a report on the disaster assist-
ance operations of the Administration for that fiscal year. 
The report shall—
‘‘(1) specify the number of Administration per-
sonnel involved in such operations; 
‘‘(2) describe any material changes to those op-
erations, such as changes to technologies used or to 
personnel responsibilities; 
‘‘(3) describe and assess the effectiveness of the 
Administration in responding to disasters during 
that fiscal year, including a description of the num-
ber and amounts of loans made for damage and for 
economic injury; and 
‘‘(4) describe the plans of the Administration 
for preparing to respond to disasters during the next 
fiscal year. 
‘‘(b) INCIDENTS OF NATIONAL SIGNIFICANCE.—Dur-
ing the period of an incident of national significance (as 
declared by the President or his designee), the Adminis-
trator shall, on a monthly basis, submit to the committees 
specified in subsection (a) a report on the disaster assist-
ance operations of the Administration with respect to that 
incident of national significance. The report shall speci-
fy—
‘‘(1) the number of applications distributed; 
‘‘(2) the number of applications received;
‘‘(3) the average time for the Administration to 
approve or disapprove an application; 
‘‘(4) the amount of disaster loans approved; 
‘‘(5) the average time for initial disbursement 
of loan proceeds; and 
‘‘(6) the amount of disaster loan proceeds dis-
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 
Small Business Administration, and for other 
purposes.