To amend the Small Business Act to improve the disaster relief programs of the Small Business Administration, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Disaster Readiness 
and Reform Act of 2009''.

SEC. 2. REVISED COLLATERAL REQUIREMENTS.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended--
            (1) by striking ``(e) [RESERVED].'' and ``(f) 
        [RESERVED].''; and
            (2) in subsection (f), as added by section 12068(a)(2) of 
        the Small Business Disaster Response and Loan Improvements Act 
        of 2008 (subtitle B of title XII of the Food, Conservation, and 
        Energy Act of 2008; Public Law 110-246), by adding at the end 
        the following:
            ``(2) Revised collateral requirements.--In making a loan 
        with respect to a business under subsection (b), if the total 
        approved amount of such loan is less than or equal to $250,000, 
        the Administrator may not require the borrower to use the 
        borrower's home as collateral.''.

SEC. 3. INCREASED LIMITS.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended--
            (1) in paragraph (3)(E) by striking ``$1,500,000'' each 
        place it appears and inserting ``$3,000,000''; and
            (2) in paragraph (8)(A) by striking ``$2,000,000'' and 
        inserting ``$3,000,000''.

SEC. 4. REVISED REPAYMENT TERMS.

    Section 7(f) of the Small Business Act (15 U.S.C. 636(f)) is 
amended by adding at the end the following:
            ``(3) Revised repayment terms.--In making loans under 
        subsection (b), the Administrator--
                    ``(A) may not require repayment to begin until the 
                date that is 12 months after the date on which the 
                final disbursement of approved amounts is made; and
                    ``(B) shall calculate the amount of repayment based 
                solely on the amounts disbursed.''.

SEC. 5. REVISED DISBURSEMENT PROCESS.

    Section 7(f) of the Small Business Act (15 U.S.C. 636(f)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(4) Revised disbursement process.--In making a loan under 
        subsection (b), the Administrator shall disburse loan amounts 
        in accordance with the following:
                    ``(A) If the total amount approved with respect to 
                such loan is less than or equal to $150,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of 40 percent of the 
                        total loan amount, or a lesser percentage of 
                        the total loan amount if the Administrator and 
                        the borrower agree on such a lesser percentage;
                            ``(ii) the second disbursement shall 
                        consist of 50 percent of the loan amounts that 
                        remain after the first disbursement, and shall 
                        be made when the borrower has produced 
                        satisfactory receipts to demonstrate the proper 
                        use of 50 percent of the first disbursement; 
                        and
                            ``(iii) the third disbursement shall 
                        consist of the loan amounts that remain after 
                        the preceding disbursements, and shall be made 
                        when the borrower has produced satisfactory 
                        receipts to demonstrate the proper use of the 
                        first disbursement and 50 percent of the second 
                        disbursement.
                    ``(B) If the total amount approved with respect to 
                such loan is more than $150,000 but less than or equal 
                to $500,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of 20 percent of the 
                        total loan amount, or a lesser percentage of 
                        the total loan amount if the Administrator and 
                        the borrower agree on such a lesser percentage;
                            ``(ii) the second disbursement shall 
                        consist of 30 percent of the loan amounts that 
                        remain after the first disbursement, and shall 
                        be made when the borrower has produced 
                        satisfactory receipts to demonstrate the proper 
                        use of 50 percent of the first disbursement;
                            ``(iii) the third disbursement shall 
                        consist of 25 percent of the loan amounts that 
                        remain after the first and second 
                        disbursements, and shall be made when the 
                        borrower has produced satisfactory receipts to 
                        demonstrate the proper use of the first 
                        disbursement and 50 percent of the second 
                        disbursement; and
                            ``(iv) the fourth disbursement shall 
                        consist of the loan amounts that remain after 
                        the preceding disbursements, and shall be made 
                        when the borrower has produced satisfactory 
                        receipts to demonstrate the proper use of the 
                        first and second disbursements and 50 percent 
                        of the third disbursement.
                    ``(C) If the total amount approved with respect to 
                such loan is more than $500,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of at least 
                        $100,000, or a lesser amount if the 
                        Administrator and the borrower 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 discretion of the 
                        Administrator, but the amount of each such 
                        disbursement shall be at least $100,000.''.

SEC. 6. GRANT PROGRAM.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(9) the following:
            ``(10) Grants to disaster-affected small businesses.--
                    ``(A) In general.--If the Administrator declares 
                eligibility for additional disaster assistance under 
                paragraph (9), the Administrator may make a grant, in 
                an amount not exceeding $100,000, to a small business 
                concern that--
                            ``(i) is located in an area affected by the 
                        applicable major disaster;
                            ``(ii) submits to the Administrator a 
                        certification by the owner of the concern that 
                        such owner intends to reestablish the concern 
                        in the same county in which the concern was 
                        originally located;
                            ``(iii) has applied for, and was rejected 
                        for, a conventional disaster assistance loan 
                        under this subsection; and
                            ``(iv) was in existence for at least 2 
                        years before the date on which the applicable 
                        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 obligations.
                    ``(C) Program level and authorization of 
                appropriations.--
                            ``(i) Program level.--The Administrator is 
                        authorized to make $100,000,000 in grants under 
                        this paragraph for each of fiscal years 2010 
                        and 2011.
                            ``(ii) Authorization of appropriations.--
                        There are authorized to be appropriated to the 
                        Administrator such sums as may be necessary to 
                        carry out this paragraph.''.

SEC. 7. REGIONAL DISASTER WORKING GROUPS.

    Section 40 of the Small Business Act (15 U.S.C. 657l) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``or'' and inserting ``and'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Regional Disaster Working Groups.--In carrying out the 
responsibilities pertaining to loan making activities under subsection 
(a), the Administrator, acting through the regional administrators of 
the regional offices of the Administration, shall develop a disaster 
preparedness and response plan for each region of the Administration. 
Each such plan shall be developed in cooperation with Federal, State, 
and local emergency response authorities and representatives of 
businesses located in the region to which such plan applies. Each such 
plan shall identify and include a plan relating to the 3 disasters, 
natural or manmade, most likely to occur in the region to which such 
plan applies.''.

SEC. 8. OUTREACH GRANTS FOR LOAN APPLICANT ASSISTANCE.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(10) the following:
            ``(11) Outreach grants for loan applicant assistance.--
                    ``(A) In general.--From amounts made available for 
                administrative expenses relating to activities under 
                this subsection, the Administrator is authorized to 
                make grants to the following:
                            ``(i) A women's business center in an area 
                        affected by a disaster.
                            ``(ii) A small business development center 
                        in an area affected by a disaster.
                            ``(iii) A Veteran Business Outreach Center 
                        in an area affected by a disaster.
                            ``(iv) A chamber of commerce in an area 
                        affected by a disaster.
                    ``(B) Use of grant.--An entity specified under 
                subparagraph (A) shall use a grant received under this 
                paragraph to provide application preparation assistance 
                to applicants for a loan under this subsection.
                    ``(C) Program level.--The Administrator is 
                authorized to make $50,000,000 in grants under this 
                paragraph for each of fiscal years 2010 and 2011.''.

SEC. 9. HOMEOWNERS IMPACTED BY TOXIC DRYWALL.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(11) the following:
            ``(12) Homeowners impacted by toxic drywall.--The 
        Administrator may make a loan under this subsection to any 
        homeowner if the primary residence of such homeowner has been 
        adversely impacted by the installation of toxic drywall 
        manufactured in China. A loan under this paragraph may be used 
        only for the repair or replacement of such toxic drywall.''.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended by inserting after subsection (e) the following:
    ``(f) Fiscal Years 2010 and 2011 With Respect to Section 7(b).--
There is authorized to be appropriated such sums as may be necessary 
for administrative expenses and loans under section 7(b).''.

SEC. 11. REGULATIONS.

    Except as otherwise provided in this Act or in amendments made by 
this Act, after an opportunity for notice and comment, but not later 
than 180 days after the date of the enactment of this Act, the 
Administrator shall issue regulations to carry out this Act and the 
amendments made by this Act.

            Passed the House of Representatives November 6, 2009.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.

Summary: Small Business Disaster Readiness and Reform Act of 2009 - (Sec. 2) Amends the Small Business Act to prohibit the Administrator of the Small Business Administration (SBA), in making a small business disaster loan of $250,000 or less, from requiring a borrower to use the borrower's home as collateral.

(Sec. 3) Increases the SBA disaster loan limit to $3 million. Prohibits the Administrator from requiring repayment on such loans until 12 months after final disbursement of the approved loan amount.

(Sec. 5) Provides specific disbursement directions for each of the following categories of loans: (1) $150,000 or less; (2) more than $150,000 up to $500,000; and (3) more than $500,000.

(Sec. 6) Authorizes the Administrator to make a disaster assistance grant of up to $100,000 to a small business that: (1) is located in an area affected by a major disaster; (2) certifies its intention to reestablish the business in the same county as originally located; (3) has applied and was rejected for a conventional disaster assistance loan; and (4) was in existence for at least two years before the disaster declaration. Provides a grant priority for small businesses determined to be economically viable but unable to meet short-term financial obligations. Authorizes grants of $100 million for each of FY2010-FY2011 and authorizes appropriations for such grants.

(Sec. 7) Directs the Administrator to develop a disaster preparedness and response plan for each SBA region. Requires each plan to identify the three disasters, natural or manmade, most likely to occur in such region.

(Sec. 8) Authorizes the Administrator to make outreach grants for loan application assistance to the following in areas affected by a disaster: (1) a women's business center; (2) a small business development center; (3) a veterans business outreach center; and (4) a chamber of commerce. Authorizes grants for each of FY2010-FY2011.

(Sec. 9) Authorizes the Administrator to make a loan to any homeowner whose primary residence has been adversely impacted by the installation of toxic drywall manufactured in China. Allows the loan to be used only for the repair or replacement of such drywall.

(Sec. 10) Authorizes appropriations for FY2010-FY2011 for administrative expenses and small business disaster assistance loans.