II 114th CONGRESS 1st Session S. 1470 IN THE SENATE OF THE UNITED STATES May 31, 2015 Mr. Vitter introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To amend the Small Business Act to provide additional assistance to small business concerns for disaster recovery, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Recovery Improvements for Small Entities After Disaster Act of 2015 or the RISE After Disaster Act of 2015 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definitions. TITLE I—Improvements of disaster response and loans Sec. 101. Use of data sharing. Sec. 102. Additional awards to small business development centers, women's business centers, SCORE, and FAST recipients for disaster recovery. Sec. 103. Collateral requirements for disaster loans. Sec. 104. Assistance to out-of-State business concerns to aid in disaster recovery. Sec. 105. Fast-track SBIC applications. Sec. 106. FAST priorities. Sec. 107. Use of Federal surplus property in disaster areas. Sec. 108. Recovery opportunity loans. Sec. 109. Contractor malfeasance. Sec. 110. Local contracting preferences and incentives. TITLE II—Disaster planning and mitigation Sec. 201. Use of physical damage disaster loans. Sec. 202. Business recovery centers. TITLE III—Other provisions Sec. 301. Increased oversight of economic injury disaster loans. Sec. 302. Reduction of paperwork burden. Sec. 303. Report on web portal for disaster loan applicants. Sec. 304. Local disaster contracting fairness. 2. Definitions In this Act— (1) the term 7(b) loan program means assistance provided by the Administration under section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ); (2) the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; (3) the term covered supplemental appropriations means amounts made available to the Administration through supplemental appropriations for— (A) the cost of direct loans authorized under section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) for necessary expenses related to the consequences of a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); and (B) the direct administrative expenses of making and servicing those loans; (4) the term major disaster means a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); and (5) the term small business concern has the meaning given that term under section 3 of the Small Business Act ( 15 U.S.C. 632 ). I Improvements of disaster response and loans 101. Use of data sharing Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5155 ) is amended by adding at the end the following: (e) Use of data sharing (1) Definition In this subsection, the term agency has the meaning given the term in section 552a of title 5, United States Code. (2) Exemption from certain matching program requirements Any action taken by an agency to prevent, investigate, or recover duplicative Federal assistance under this section shall not be subject to subsections (e)(12), (o), (q), (r), and (u) of section 552a of title 5, United States Code. (3) Fraudulent acquisition of assistance An investigation conducted by an agency relating to the fraudulent acquisition of duplicative Federal assistance under this section shall not be subject to section 552a(p) of title 5, United States Code. . 102. Additional awards to small business development centers, women's business centers, SCORE, and FAST recipients for disaster recovery Section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) is amended by inserting before the undesignated matter following paragraph (9) the following: (10) Additional awards to small business development centers, women's business centers, SCORE, and FAST recipients for disaster recovery (A) In general The Administration may provide financial assistance to a small business development center, a women’s business center described in section 29, the Service Corps of Retired Executives, a entity, organization, or individual that receives an award or has in effect a cooperative agreement under section 34, or any proposed consortium of such individuals or entities to spur disaster recovery and growth of small business concerns located in an area for which the President has declared a major disaster. (B) Form of financial assistance Financial assistance provided under this paragraph shall be in the form of a grant, contract, or cooperative agreement. (C) No matching funds required Matching funds shall not be required for any grant, contract, or cooperative agreement under this paragraph. (D) Requirements A recipient of financial assistance under this paragraph shall provide counseling, training, and other related services, such as promoting long-term resiliency, to small business concerns and entrepreneurs impacted by a major disaster. (E) Performance (i) In general The Administrator, in cooperation with the recipients of financial assistance under this paragraph, shall establish metrics and goals for performance of grants, contracts, and cooperative agreements under this paragraph, which shall include recovery of sales, recovery of employment, reestablishment of business premises, and establishment of new small business concerns. (ii) Use of estimates The Administrator shall base the goals and metrics for performance established under clause (i), in part, on the estimates of disaster impact prepared by the Office of Disaster Assistance for purposes of estimating loan-making requirements. (F) Term (i) In general The term of any grant, contract, or cooperative agreement under this paragraph shall be for not more than 2 years. (ii) Extension The Administrator may make 1 extension of a grant, contract, or cooperative agreement under this paragraph for a period of not more than 1 year, upon a showing of good cause and need for the extension. (G) Exemption from other program requirements Financial assistance provided under this paragraph is in addition to, and wholly separate from, any other form of assistance provided by the Administrator under this Act. (H) Competitive basis The Administration shall award financial assistance under this paragraph on a competitive basis. . 103. Collateral requirements for disaster loans (a) In general Section 7(d)(6) of the Small Business Act ( 15 U.S.C. 636(d)(6) ) is amended in the third proviso— (1) by striking $14,000 and inserting $25,000 ; and (2) by striking major disaster and inserting disaster . (b) Sunset Effective on the date that is 3 years after the date of enactment of this Act, section 7(d)(6) of the Small Business Act ( 15 U.S.C. 636(d)(6) ) is amended in the third proviso— (1) by striking $25,000 and inserting $14,000 ; and (2) by inserting major before disaster . (c) Report Not later than 180 days before the date on which the amendments made by subsection (b) are to take effect, the Administrator shall submit to Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the effects of the amendments made by subsection (a), which shall include— (1) an assessment of the impact and benefits resulting from the amendments; and (2) a recommendation as to whether the amendments should be made permanent. 104. Assistance to out-of-State business concerns to aid in disaster recovery (a) In general Section 21(b)(3) of the Small Business Act ( 15 U.S.C. 648(b)(3) ) is amended— (1) by striking (3) At the discretion and inserting the following: (3) Assistance to out-of-state small business concerns (A) In general At the discretion ; and (2) by adding at the end the following: (B) Disaster recovery assistance (i) In general At the discretion of the Administrator, the Administrator may authorize a small business development center to provide advice, information, and assistance, as described in subsection (c), to a small business concern located outside of the State, without regard to geographic proximity to the small business development center, if the small business concern is located in an area for which the President has declared a major disaster. (ii) Term (I) In general A small business development center may provide advice, information, and assistance to a small business concern under clause (i) for a period of not more than 2 years after the date on which the President declared a major disaster for the area in which the small business concern is located. (II) Extension The Administrator may, at the discretion of the Administrator, extend the period described in subclause (I). (iii) Continuity of services A small business development center that provides counselors to an area described in clause (i) shall, to the maximum extent practicable, ensure continuity of services in any State in which the small business development center otherwise provides services. (iv) Access to disaster recovery facilities For purposes of this subparagraph, the Administrator shall, to the maximum extent practicable, permit the personnel of a small business development center to use any site or facility designated by the Administrator for use to provide disaster recovery assistance. . (b) Sense of Congress It is the sense of Congress that, subject to the availability of funds, the Administrator should, to the extent practicable, ensure that a small business development center is appropriately reimbursed for any legitimate expenses incurred in carrying out activities under section 21(b)(3)(B) of the Small Business Act, as added by subsection (a). 105. Fast-track SBIC applications Section 301(c)(2) of the Small Business Investment Act of 1958 ( 15 U.S.C. 681(c)(2) ) is amended by adding at the end the following: (C) Priority for applicants located in disaster areas (i) Definition In this subparagraph, the term disaster area means the area for which the President has declared a major disaster (as defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5122 )), during the period of the declaration. (ii) Priority The Administrator shall give priority to an application for a license to operate as a small business investment company that is from an applicant located in a disaster area. . 106. FAST priorities (a) Definitions Section 34(a) of the Small Business Act ( 15 U.S.C. 657d(a) ) is amended— (1) by redesignating paragraphs (3) through (9) as (4) through (10), respectively; and (2) by inserting after paragraph (2) the following: (3) Catastrophic disaster The term catastrophic disaster means a catastrophic disaster, as determined by the Administrator. . (b) Priority Section 34(c)(2) of the Small Business Act ( 15 U.S.C. 657d(c)(2) ) is amended— (1) in subparagraph (A), by striking and at the end; (2) in subparagraph (B)(vi)(III), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following: (C) shall give special consideration to an applicant that is located in an area affected by a catastrophic disaster. . (c) Additional assistance Section 34(c) of the Small Business Act ( 15 U.S.C. 657d(c) ) is amended by adding at the end the following: (5) Additional assistance for catastrophic disasters Upon application by an applicant that receives an award or has in effect a cooperative agreement under this section and that is located in an area affected by a catastrophic disaster, the Administrator may provide additional assistance to the applicant. . 107. Use of Federal surplus property in disaster areas Section 7(j)(13)(F) of the Small Business Act ( 15 U.S.C. 636(j)(13)(F) ) is amended— (1) by inserting (i) after (F) ; and (2) by adding at the end the following: (ii) (I) In this clause— (aa) the term covered period means the 2-year period beginning on the date on which the President declared the applicable major disaster; and (bb) the term disaster area means the area for which the President has declared a major disaster, during the covered period. (II) The Administrator may transfer technology or surplus property under clause (i) on a priority basis to a small business concern located in a disaster area if— (aa) the small business concern meets the requirements for such a transfer, without regard to whether the small business concern is a Program Participant; and (bb) for a small business concern that is a Program Participant, on and after the date on which the President declared the applicable major disaster, the small business concern has not received property under this subparagraph on the basis of the status of the small business concern as a Program Participant. (III) For any transfer of property under this clause to a small business concern, the terms and conditions shall be the same as a transfer to a Program Participant, except that the small business concern shall agree not to sell or transfer the property to any party other than the Federal Government during the covered period. (IV) A small business concern that receives a transfer of property under this clause may not receive a transfer of property under clause (i) during the covered period. (V) If a small business concern sells or transfers property in violation of the agreement described in subclause (III), the Administrator may initiate proceedings to prohibit the small business concern from receiving a transfer of property under this clause or clause (i), in addition to any other remedy available to the Administrator. . 108. Recovery opportunity loans Section 7(a)(31) of the Small Business Act ( 15 U.S.C. 636(a)(31) ) is amended— (1) in subparagraph (A)— (A) by redesignating clauses (i), (ii), and (iii) as clauses (ii), (iii), and (iv), respectively; and (B) by inserting before clause (ii), as so redesignated, the following: (i) The term disaster area means the area for which the President has declared a major disaster, during the 5-year period beginning on the date of the declaration. ; (2) by adding at the end the following: (G) Recovery opportunity loans (i) In general The Administrator may guarantee an express loan to a small business concern located in a disaster area in accordance with this subparagraph. (ii) Maximums For a loan guaranteed under clause (i)— (I) the maximum loan amount is $150,000; and (II) the guarantee rate shall be not more than 85 percent. (iii) Overall cap A loan guaranteed under clause (i) shall not be counted in determining the amount of loans made to a borrower for purposes of subparagraph (D). (iv) Existing debt A loan guaranteed under clause (i) may be used to refinance existing debt arising from the applicable major disaster, subject to section 120.201 of title 13, Code of Federal Regulations, or any successor thereto. (v) Operations A small business concern receiving a loan guaranteed under clause (i) shall certify that the small business concern was in operation on the date on which the applicable major disaster occurred as a condition of receiving the loan. (vi) Repayment ability A loan guaranteed under clause (i) may only be made to a small business concern that demonstrates, to the satisfaction of the Administrator, sufficient capacity to repay the loan. (vii) Timing of payment of guarantees (I) In general Not later than 90 days after the date on which the Administrator receives notice of a default on a loan guaranteed under clause (i), the Administrator shall determine whether to pay the guaranteed portion of the loan. (II) Recapture Unless there is a fraud relating to a loan guaranteed under clause (i), on and after the date that is 6 months after the date on which the Administrator determines to pay the guaranteed portion of the loan, the Administrator may not attempt to recapture the paid guarantee. . 109. Contractor malfeasance Section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) is amended by inserting before the undesignated matter following paragraph (10), as added by section 102 of this Act, the following: (11) Supplemental assistance for contractor malfeasance (A) In general If a contractor or other person engages in malfeasance in connection with repairs to, rehabilitation of, or replacement of real or personal property relating to which a loan was made under this subsection and the malfeasance results in substantial economic damage to the recipient of the loan or substantial risks to health or safety, upon receiving documentation of the substantial economic damage or the substantial risk to health and safety from an independent loss verifier, and subject to subparagraph (B), the Administrator may increase the amount of the loan under this subsection, as necessary for the cost of repairs, rehabilitation, or replacement needed to address the cause of the economic damage or health or safety risk. (B) Requirements The Administrator may only increase the amount of a loan under subparagraph (A) upon receiving an appropriate certification from the borrower and person performing the mitigation attesting to the reasonableness of the mitigation costs and an assignment of any proceeds received from the person engaging in the malfeasance. The assignment of proceeds recovered from the person engaging in the malfeasance shall be equal to the amount of the loan under this section. Any mitigation activities shall be subject to audit and independent verification of completeness and cost reasonableness. . 110. Local contracting preferences and incentives Section 15 of the Small Business Act ( 15 U.S.C. 644 ) is amended by inserting after subsection (e) the following: (f) Contracting preference for small business concerns in a major disaster area (1) Definition In this subsection, the term disaster area means the area for which the President has declared a major disaster, during the period of the declaration. (2) Contracting preference An agency shall provide a contracting preference for a small business concern located in a disaster area if the small business concern will perform the work required under the contract in the disaster area. (3) Credit for meeting contracting goals If an agency awards a contract to a small business concern under the circumstances described in paragraph (2), the value of the contract shall be doubled for purposes of determining compliance with the goals for procurement contracts under subsection (g)(1)(A). . II Disaster planning and mitigation 201. Use of physical damage disaster loans Section 7(b)(1)(A) of the Small Business Act ( 15 U.S.C. 636(b)(1)(A) ) is amended in the second proviso— (1) by striking the Administration may increase and inserting the Administration may, subject to section 18(a), increase ; and (2) by striking and modifying structures and inserting , and modifying structures (including construction of a safe room or similar storm shelter designed to protect property and occupants from tornadoes or other natural disasters) . 202. Business recovery centers Section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) is amended by inserting before the undesignated matter following paragraph (11), as added by section 109 of this Act, the following: (12) Business recovery centers (A) In general The Administrator, acting through the district offices of the Administration, shall identify locations that may be used as recovery centers by the Administration in the event of a disaster declared under this subsection or a major disaster. (B) Requirements for identification Each district office of the Administration shall— (i) identify a location described in subparagraph (A) in each county, parish, or similar unit of general local government in the area served by the district office; and (ii) ensure that the locations identified under subparagraph (A) may be used as a recovery center without cost to the Government, to the extent practicable. . III Other provisions 301. Increased oversight of economic injury disaster loans (a) In general Section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) is amended by inserting before the undesignated matter following paragraph (12), as added by section 202 of this Act, the following: (13) Increased oversight of economic injury disaster loans The Administrator shall increase oversight of entities receiving loans under paragraph (2), including through— (A) scheduled site visits to ensure borrower eligibility and compliance with requirements established by the Administrator; and (B) reviews of the use of the loan proceeds by an entity described in paragraph (2) to ensure compliance with requirements established by the Administrator. . (b) Sense of Congress relating to using existing funds It is the sense of Congress that no additional Federal funds should be made available to carry out the amendments made by this section. 302. Reduction of paperwork burden (a) Sense of Congress It is the sense of Congress that the Administrator should— (1) reduce paperwork burdens pursuant to section 3501 of title 44, United States Code, on small business concerns applying for disaster assistance under section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ); and (2) ensure that the application for disaster assistance under section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) facilitates deterring and detecting potential incidents of waste, fraud, and abuse. (b) Reduction Section 7(b) of the Small Business Act ( 15 U.S.C. 636(b) ) is amended by inserting before the undesignated matter following paragraph (13), as added by section 301 of this Act, the following: (14) Paperwork reduction The Administrator shall take steps to reduce, to the maximum extent practicable, the paperwork associated with the application for a loan under this subsection. . 303. Report on web portal for disaster loan applicants Section 38 of the Small Business Act ( 15 U.S.C. 657j ) is amended by adding at the end the following: (c) Report on web portal for disaster loan application status (1) In general Not later than 90 days after the date of enactment of this subsection, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report relating to the creation of a web portal to the track the status of applications for disaster assistance under section 7(b). (2) Contents The report under paragraph (1) shall include— (A) information on the progress of the Administration in implementing the information system under subsection (a); (B) recommendations from the Administration relating to the creation of a web portal for applicants to check the status of an application for disaster assistance under section 7(b), including a review of best practices and web portal models from the private sector; (C) information on any related costs or staffing needed to implement such a web portal; (D) information on whether such a web portal can maintain high standards for data privacy and data security; (E) information on whether such a web portal will minimize redundancy among Administration disaster programs, improve management of the number of inquiries made by disaster applicants to employees located in the area affected by the disaster and to call centers, and reduce paperwork burdens on disaster victims; and (F) such additional information as is determined necessary by the Administrator. . 304. Local disaster contracting fairness (a) Definitions In this section— (1) the term executive agency has the meaning given that term in section 133 of title 41, United States Code; (2) the term local subcontractor means, with respect to a contract, a subcontractor who has a principal place of business or regularly conducts operations in the area in which work is to be performed under the contract by the subcontractor; and (3) the term natural disaster reconstruction efforts means reconstruction efforts undertaken in an area for which the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ). (b) Federal contracting requirements (1) In general The head of an executive agency may not enter into an agreement for debris removal or demolition services in connection with natural disaster reconstruction efforts unless the agreement specifies that— (A) all of the work under the contract will be performed by the prime contractor or 1 or more subcontractors at 1 tier under the contract; (B) any work performed under the contract by subcontractors will be performed by local subcontractors, except to the extent that local subcontractors are not available to perform such work; (C) the prime contractor will act as the project manager or construction manager for the contract; and (D) the prime contractor— (i) has primary responsibility for managing all work under the contract; and (ii) will be paid a certain percentage of the overall value of the contract as sole compensation for assuming the risk associated with such responsibility. (2) Preference for subcontractors affected by natural disasters In entering into an agreement for debris removal or demolition services in connection with natural disaster reconstruction efforts, the head of an executive agency shall give a preference in the source selection process to each offeror who certifies that any work that is to be performed under the contract by subcontractors will be performed by local subcontractors. (c) Applicability The requirements under subsection (b) shall apply to agreements entered into on or after the date of enactment of this Act.