110TH CONGRESS 
1ST SESSION H. R. 1361
AN ACT 
To improve the disaster relief programs of the Small 
Business Administration, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Relief for Entrepreneurs: Coordination of Objectives and 
Values for Effective Recovery Act of 2007’’ or the ‘‘RE-
COVER Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
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 con-
cerns 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.
TITLE I—PLANNING 
SEC. 101. COMPREHENSIVE DISASTER RESPONSE PLAN. 
The Small Business Act is amended by redesignating 
section 37 as section 99 and by inserting after section 36 
the following: 
‘‘SEC. 37. COMPREHENSIVE DISASTER RESPONSE PLAN. 
‘‘(a) PLAN REQUIRED.—The Administrator shall de-
velop, implement, and maintain a comprehensive written 
disaster response plan. The plan shall include the fol-
lowing: 
‘‘(1) For each region of the Administration, a 
description of the disasters most likely to occur in 
that region. 
‘‘(2) For each disaster described under para-
graph (1)—
‘‘(A) an assessment of the disaster; 
‘‘(B) an assessment of the demand for Ad-
ministration assistance most likely to occur in 
response to the disaster; 
‘‘(C) an assessment of the needs of the Ad-
ministration, with respect to such resources as 
information 
technology, 
telecommunications, 
human resources, and office space, to meet the 
demand referred to in subparagraph (B); and
‘‘(D) guidelines pursuant to which the Ad-
ministration will coordinate with other Federal 
agencies and with State and local authorities to 
best respond to the demand referred to in sub-
paragraph (B) and to best use the resources re-
ferred to in that subparagraph. 
‘‘(b) COMPLETION; REVISION.—The first plan re-
quired by subsection (a) shall be completed not later than 
180 days after the date of the enactment of this section. 
Thereafter, the Administrator shall update the plan on an 
annual basis and following any incident of national signifi-
cance (as declared by the President or his designee). 
‘‘(c) KNOWLEDGE REQUIRED.—The Administrator 
shall carry out subsections (a) and (b) through an indi-
vidual with substantial knowledge in the field of disaster 
readiness and emergency response. 
‘‘(d) REPORT.—The Administrator shall include a re-
port on the plan whenever the Administrator submits the 
report required by section 47(a).’’. 
SEC. 102. ANNUAL DISASTER SIMULATION EXERCISE. 
The Small Business Act is amended by inserting after 
section 37 (as added by section 101) the following: 
‘‘SEC. 38. ANNUAL DISASTER SIMULATION EXERCISE. 
‘‘(a) EXERCISE REQUIRED.—The Administrator shall 
conduct a disaster simulation exercise at least once each
fiscal year. The exercise shall include the participation of, 
at a minimum, not less than half of the individuals in the 
disaster reserve corps and shall test, at maximum capac-
ity, all of the information technology and telecommuni-
cations systems of the Administration that are vital to the 
activities of the Administration during such a disaster. 
‘‘(b) REPORT.—The Administrator shall include a re-
port on the disaster simulation exercise whenever the Ad-
ministration submits the report required by section 
47(a).’’. 
SEC. 103. DISASTER RESERVE CORPS. 
The Small Business Act is amended by inserting after 
section 38 (as added by section 102) the following: 
‘‘SEC. 39. DISASTER RESERVE CORPS. 
‘‘(a) CORPS REQUIRED.—The Administrator shall 
maintain within the Administration a disaster reserve 
corps, the purpose of which is to perform the functions 
of the Administration related to disaster response. The 
corps shall consist of at least 1,000 individuals, each of 
whom—
‘‘(1) does not ordinarily have the duties of a 
full-time officer or employee of the Administration; 
but 
‘‘(2) is able to assume duties related to disaster 
response when the Administrator so requires.
‘‘(b) TRAINING.—The Administrator shall ensure 
that each individual in the corps receives training each 
year in one or more functions relating to disaster response. 
To the maximum extent practicable, the function in which 
an individual is trained in one year shall be different from 
the function in which the individual was trained in prior 
years. 
‘‘(c) GEOGRAPHIC DISTRIBUTION.—The Adminis-
trator shall ensure that not more than 30 percent of the 
individuals in the corps reside in any one region of the 
Administration. 
‘‘(d) REPORT.—The Administrator shall include a re-
port on the corps whenever the Administration submits 
the report required by section 47(a).’’. 
SEC. 104. PLANS TO SECURE ADDITIONAL OFFICE SPACE. 
The Small Business Act is amended by inserting after 
section 39 (as added by section 103) the following: 
‘‘SEC. 40. PLANS TO SECURE ADDITIONAL OFFICE SPACE. 
‘‘(a) PLANS REQUIRED.—The Administrator shall 
develop long-term plans to secure additional office space 
to accommodate an expanded workforce in times of dis-
aster. 
‘‘(b) REPORT.—The Administrator shall include a re-
port on the plans whenever the Administration submits 
the report required by section 47(a).’’.
SEC. 105. COORDINATION OF DISASTER ASSISTANCE PRO-
GRAMS WITH FEMA. 
The Small Business Act is amended by inserting after 
section 40 (as added by section 104) the following: 
‘‘SEC. 41. COORDINATION OF DISASTER ASSISTANCE PRO-
GRAMS WITH FEMA. 
‘‘(a) COORDINATION REQUIRED.—The Administrator 
shall ensure that the disaster assistance programs of the 
Administration are coordinated, to the maximum extent 
practicable, with the disaster assistance programs of the 
Federal Emergency Management Agency. 
‘‘(b) REGULATIONS REQUIRED.—The Administrator, 
in consultation with the Director of the Federal Emer-
gency Management Agency, shall establish regulations to 
ensure that each application for disaster assistance is sub-
mitted as quickly as practicable to the Administration or 
directed to the appropriate agency under the cir-
cumstances. 
‘‘(c) COMPLETION; REVISION.—The initial regula-
tions shall be completed not later than 270 days after the 
date of the enactment of this section. Thereafter, the regu-
lations shall be revised on an annual basis. 
‘‘(d) REPORT.—The Administrator shall include a re-
port on the regulations whenever the Administration sub-
mits the report required by section 47(a).’’.
SEC. 106. ASSOCIATE ADMINISTRATOR FOR DISASTER AS-
SISTANCE. 
The Small Business Act is amended by inserting after 
section 41 (as added by section 105) the following: 
‘‘SEC. 42. ASSOCIATE ADMINISTRATOR FOR DISASTER AS-
SISTANCE. 
‘‘(a) IN GENERAL.—There is established in the Ad-
ministration an Associate Administrator for Disaster As-
sistance, appointed by the President by and with the ad-
vice and consent of the Senate, from among individuals 
who have—
‘‘(1) proven management ability; and 
‘‘(2) substantial knowledge in the field of dis-
aster readiness and emergency response. 
‘‘(b) DIRECTOR OF DISASTER PLANNING.—
‘‘(1) APPOINTMENT.—There is established in 
the Administration a Director for Disaster Planning, 
appointed by the Administrator from among the per-
sonnel of the Administration. 
‘‘(2) DUTIES.—Subject to the authority, direc-
tion, and control of the Associate Administrator for 
Disaster Assistance, the Director shall—
‘‘(A) develop and implement the Adminis-
tration’s plans for responding to disasters; and 
‘‘(B) direct the Administration’s training 
exercises with respect to disasters.
‘‘(3) COORDINATION.—In carrying out the du-
ties under paragraph (2), the Director shall coordi-
nate with—
‘‘(A) the Associate Administrator for the 
Office of Disaster Assistance of the Administra-
tion; 
‘‘(B) the Director of the Federal Emer-
gency Management Agency; and 
‘‘(C) other Federal, State, and local dis-
aster planning offices, as necessary. 
‘‘(c) DIRECTOR OF DISASTER LENDING.—
‘‘(1) APPOINTMENT.—There is established in 
the Administration a Director for Disaster Lending, 
appointed by the Administrator from among the per-
sonnel of the Administration. 
‘‘(2) DUTIES.—Subject to the authority, direc-
tion, and control of the Associate Administrator for 
Disaster Assistance, the Director shall direct all as-
pects of the disaster lending program under section 
7(b). 
‘‘(d) RESOURCES.—The Administrator shall ensure 
that the Associate Administrator for Disaster Assistance, 
the Director of Disaster Planning, and the Director of 
Disaster Lending have adequate resources to carry out the 
duties under this section.’’.
TITLE II—LENDING 
SEC. 201. INCIDENTS OF NATIONAL SIGNIFICANCE. 
(a) DISASTER LOANS TO PRIVATE NONPROFIT OR-
GANIZATIONS.—Section 7(b)(2) of the Small Business Act 
(15 U.S.C. 636(b)(2)) is amended—
(1) in subparagraph (D) by striking the period 
at the end and inserting ‘‘; or’’; and 
(2) by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) an incident of national significance, 
as declared by the President or his designee, in 
which case assistance under this paragraph may 
be provided, subject to the other applicable re-
quirements of this paragraph, to a private non-
profit organization (as that term is defined in 
section 29(a)(2)) that is located in an area af-
fected by the incident of national significance.’’. 
(b) MITIGATION LOANS TO SMALL BUSINESS CON-
CERNS.—Section 7 of the Small Business Act (15 U.S.C. 
636) is amended by inserting after subsection (d) the fol-
lowing: 
‘‘(e) DISASTER MITIGATION LOANS.—
‘‘(1) AUTHORITY.—The Administrator may 
make or guarantee a mitigation loan to a small busi-
ness concern that receives a loan under section
7(b)(1)(A) for the damage or destruction, by reason 
of an incident of national significance (as declared 
by the President or his designee), of property owned 
by the small business concern. 
‘‘(2) AMOUNT OF LOAN.—The amount of a loan 
under paragraph (1) shall not exceed 20 percent of 
the total amount of the cost of the damage or de-
struction referred to in paragraph (1). The total 
amount shall be calculated without regard for any 
costs for which the small business concern is reim-
bursed under any insurance policy or otherwise.’’. 
(c) APPLICABILITY FOR FISCAL YEAR 2006 TO HUR-
RICANES KATRINA, RITA, AND WILMA.—
(1) IN GENERAL.—For fiscal year 2006, the 
Administrator—
(A) may carry out subsection (e) of section 
7 of the Small Business Act (as added by sub-
section (b) of this section) with respect to a pri-
vate nonprofit organization that was located, as 
of August 28, 2005, in a hurricane-affected 
area; and 
(B) may carry out such subsection (e) with 
respect to a small business concern that was lo-
cated, as of August 28, 2005, in a hurricane-
affected area, for damage or destruction by rea-
son of Hurricane Katrina, Hurricane Rita, or 
Hurricane Wilma. 
(2) HURRICANE-AFFECTED AREA DEFINED.—In 
this section, the term ‘‘hurricane-affected area’’ 
means a county or parish in the State of Alabama, 
Florida, Mississippi, Louisiana, or Texas, that has 
been designated by the Administrator of the Small 
Business Administration as a disaster area by rea-
son of Hurricane Katrina, Hurricane Rita, or Hurri-
cane Wilma under disaster declaration 10176, 
10177, 10178, 10179, 10180, 10181, 10203, 10204, 
10205, 10206, 10222, or 10223. 
SEC. 202. INFORMATION TRACKING AND FOLLOW-UP SYS-
TEM. 
The Small Business Act is amended by inserting after 
section 42 (as added by section 106) the following: 
‘‘SEC. 43. INFORMATION TRACKING AND FOLLOW-UP SYS-
TEM FOR DISASTER ASSISTANCE. 
‘‘(a) SYSTEM REQUIRED.—The Administrator shall 
develop, implement, and maintain a centralized informa-
tion system to track communications between personnel 
of the Administration and applicants for disaster assist-
ance. The system shall ensure that whenever an applicant 
for disaster assistance communicates with such personnel
on a matter relating to the application, the following infor-
mation is recorded: 
‘‘(1) The method of communication. 
‘‘(2) The date of communication. 
‘‘(3) The identity of the personnel. 
‘‘(4) A summary of the subject matter of the 
communication. 
‘‘(b) FOLLOW-UP REQUIRED.—The Administrator 
shall ensure that an applicant for disaster assistance re-
ceives, by telephone, mail, or electronic mail, follow-up 
communications from the Administration at all critical 
stages of the application process, including the following: 
‘‘(1) When the Administration determines that 
additional information or documentation is required 
to process the application. 
‘‘(2) When the Administration determines 
whether to approve or deny the loan. 
‘‘(3) When the primary contact person man-
aging the loan application has changed.’’. 
SEC. 203. IMMEDIATE DISASTER ASSISTANCE PROGRAM. 
The Small Business Act is amended by inserting after 
section 43 (as added by section 202) the following: 
‘‘SEC. 44. IMMEDIATE DISASTER ASSISTANCE PROGRAM. 
‘‘(a) PROGRAM REQUIRED.—The Administrator shall 
carry out a program, to be known as the Immediate Dis-
aster Assistance program, under which the Administration 
participates on a deferred (guaranteed) basis in 85 per-
cent of the balance of the financing outstanding at the 
time of disbursement of the loan if such balance is less 
than or equal to $25,000 for businesses affected by a dis-
aster. 
‘‘(b) ELIGIBILITY REQUIREMENT.—To receive a loan 
guaranteed under subsection (a), the applicant must also 
apply for, and meet basic eligibility standards for, a loan 
under section 7(b). 
‘‘(c) USE OF PROCEEDS.—A person who receives a 
loan under section 7(b) must use the proceeds of that loan 
to repay all loans guaranteed under subsection (a), if any, 
before using the proceeds for any other purpose. 
‘‘(d) APPROVAL
OR DISAPPROVAL.—The Adminis-
trator shall ensure that each applicant for a loan under 
the program receives a decision approving or disapproving 
of the application within 36 hours after the Administra-
tion receives the application.’’. 
SEC. 204. INCREASED DEFERMENT PERIOD. 
Section 7 of the Small Business Act (15 U.S.C. 636) 
is amended by inserting after subsection (e) (as added by 
section 201(b)) the following: 
‘‘(f) 
ADDITIONAL
REQUIREMENTS
FOR
7(b) 
LOANS.—