[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 300 Reported in Senate (RS)]
<DOC>
Calendar No. 22
119th CONGRESS
1st Session
S. 300
To improve accountability in the disaster loan program of the Small
Business Administration, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 29, 2025
Mr. Budd (for himself, Ms. Ernst, Mr. Scott of South Carolina, Mr.
Tillis, Mr. Husted, Mr. Justice, Mr. Young, Mr. Risch, and Mrs.
Shaheen) introduced the following bill; which was read twice and
referred to the Committee on Small Business and Entrepreneurship
March 4, 2025
Reported by Ms. Ernst, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To improve accountability in the disaster loan program of the Small
Business Administration, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Disaster Loan
Accountability and Reform Act'' or the ``DLARA''.</DELETED>
<DELETED>SEC. 2. TABLE OF CONTENTS.</DELETED>
<DELETED> The table of contents for this Act is as
follows:</DELETED>
<DELETED>Sec. 1. Short title.
<DELETED>Sec. 2. Table of contents.
<DELETED>Sec. 3. Definitions.
<DELETED>Sec. 4. Monthly disaster loan reports.
<DELETED>Sec. 5. Budget request relating to disaster loans.
<DELETED>Sec. 6. Limitations on loan forgiveness.
<DELETED>Sec. 7. Limits on disaster loans.
<DELETED>Sec. 8. Prohibition regarding SBA rules relating to disaster
loans.
<DELETED>Sec. 9. GAO report on disaster loan changes.
<DELETED>Sec. 10. SBA Inspector General review.
<DELETED>Sec. 11. Budget and forecasting report regarding the cost of
direct disaster loans.
<DELETED>SEC. 3. DEFINITIONS.</DELETED>
<DELETED> In this Act--</DELETED>
<DELETED> (1) the terms ``Administration'' and
``Administrator'' mean the Small Business Administration and
the Administrator thereof, respectively; and</DELETED>
<DELETED> (2) the term ``appropriate committees of
Congress'' means the Committee on Small Business and
Entrepreneurship and the Committee on Appropriations of the
Senate and the Committee on Small Business and the Committee on
Appropriations of the House of Representatives.</DELETED>
<DELETED>SEC. 4. MONTHLY DISASTER LOAN REPORTS.</DELETED>
<DELETED> Section 12091(a) of the Small Business Disaster Response
and Loan Improvements Act of 2008 (15 U.S.C. 636k(a)) is amended--
</DELETED>
<DELETED> (1) in paragraph (1), by striking ``during the
applicable period for a major disaster'';</DELETED>
<DELETED> (2) in paragraph (2)--</DELETED>
<DELETED> (A) in subparagraph (E), by striking ``how
long the available funding for such loans will last''
and inserting ``the date at which available funding for
such loans will reach 10 percent of the most recent
appropriation and the date at which the funds will be
depleted'';</DELETED>
<DELETED> (B) in subparagraph (H), by striking
``and'' at the end;</DELETED>
<DELETED> (C) in subparagraph (I), by striking the
period at the end and inserting ``; and'';
and</DELETED>
<DELETED> (D) by adding at the end the
following:</DELETED>
<DELETED> ``(J) a summary detailing any changes to
estimates or assumptions on obligations and
expenditures, including data supporting these
changes.''; and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>
<DELETED> ``(3) Prohibition on official travel.--If the
Administrator does not submit a report required to be submitted
under paragraph (1) by the required date, no funds may be
obligated for official travel by the Administrator until the
Administrator submits the report.''.</DELETED>
<DELETED>SEC. 5. BUDGET REQUEST RELATING TO DISASTER LOANS.</DELETED>
<DELETED> Section 1105 of title 31, United States Code, is amended--
</DELETED>
<DELETED> (1) in subsection (a), by adding at the end the
following:</DELETED>
<DELETED> ``(39) separate statements of--</DELETED>
<DELETED> ``(A) the amount of appropriations
requested for the fiscal year for which the budget is
submitted for the cost of SBA disaster loans, the 10-
year average of the cost of SBA disaster loans, and an
explanation for any difference between the amount
requested and the 10-year average cost; and</DELETED>
<DELETED> ``(B) the amount of appropriations
requested for the fiscal year for which the budget is
submitted for the cost of COVID-EIDL loans, the 10-year
average of the cost of COVID-EIDL loans, and an
explanation for any difference between the amount
requested and the 10-year average cost.</DELETED>
<DELETED> ``(40) separate statements of--</DELETED>
<DELETED> ``(A) the amount of appropriations
requested for the fiscal year for which the budget is
submitted for administrative costs relating to SBA
disaster loans, the 10-year average of such
administrative costs, and an explanation for any
difference between the amount requested and the 10-year
average costs; and</DELETED>
<DELETED> ``(B) the amount of appropriations
requested for the fiscal year for which the budget is
submitted for administrative costs relating to COVID-
EIDL loans, the 10-year average of such administrative
costs, and an explanation for any difference between
the amount requested and the 10-year average costs.'';
and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(j) In paragraphs (39) and (40) of subsection (a)--
</DELETED>
<DELETED> ``(1) the term `COVID-EIDL loan' means a direct
loan under section 7(b) of the Small Business Act (15 U.S.C.
636(b)) that was authorized under section 1110 of the CARES Act
(15 U.S.C. 9009); and</DELETED>
<DELETED> ``(2) the term `SBA disaster loan' means a direct
loan authorized by section 7(b) of the Small Business Act (15
U.S.C. 636(b)), other than a loan that was authorized under
section 1110 of the CARES Act (15 U.S.C. 9009).''.</DELETED>
<DELETED>SEC. 6. LIMITATIONS ON LOAN FORGIVENESS.</DELETED>
<DELETED> Section 7 of the Small Business Act (15 U.S.C. 636) is
amended by adding at the end the following:</DELETED>
<DELETED> ``(o) Limitations on Loan Forgiveness.--</DELETED>
<DELETED> ``(1) In general.--The Administrator may not--
</DELETED>
<DELETED> ``(A) forgive any loan under this section
unless Congress has authorized such forgiveness;
or</DELETED>
<DELETED> ``(B) compromise on, suspend, or end
collections on a debt owed to the Administration
pursuant to paragraph (2) or (3) of section 3711(a) of
title 31, United States Code.</DELETED>
<DELETED> ``(2) Referral of debt.--If the Administrator
seeks to discharge a debt and the discharge of such debt is
limited under paragraph (1), the Administrator shall refer such
debt to the Department of the Treasury for collection action,
including a final determination regarding whether to suspend,
end, or continue collection of the debt.''.</DELETED>
<DELETED>SEC. 7. LIMITS ON DISASTER LOANS.</DELETED>
<DELETED> (a) Low Funding.--Section 7(b) of the Small Business Act
(15 U.S.C. 636(b)) is amended--</DELETED>
<DELETED> (1) by redesignating the second paragraph
designated as paragraph (16), relating to statute of
limitations, as added by the COVID-19 EIDL Fraud Statute of
Limitations Act of 2022 (Public Law 117-165; 136 Stat. 1363),
as paragraph (18); and</DELETED>
<DELETED> (2) by inserting after paragraph (16), relating to
disaster declarations in rural areas, as added by the Disaster
Assistance for Rural Communities Act (Public Law 117-249; 136
Stat. 2350), the following:</DELETED>
<DELETED> ``(17) Requirements when funding is low.--
</DELETED>
<DELETED> ``(A) In general.--Not later than 24 hours
after the unobligated balance of amounts available for
the cost of direct loans authorized by this subsection
is less than 10 percent of the most recent
appropriation for such costs, the Administrator shall
notify the Committee on Appropriations and the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Appropriations and the
Committee on Small Business of the House of
Representatives.</DELETED>
<DELETED> ``(B) Limitation on obligating funds.--
During the period beginning on the first business day
occurring on or after the date by which the
Administrator is required to notify Congress under
subparagraph (A) and ending on the date on which
additional amounts are appropriated for such costs, the
Administrator may not obligate funds for a direct loan
authorized under this subsection in an amount that is
more than the amount of such a loan for which
collateral is required.''.</DELETED>
<DELETED> (b) Repeal of Authority To Increase Amount of Loans for
Which Collateral Is Not Required.--Section 7(d)(6) of the Small
Business Act is amended by striking ``(or such higher amount as the
Administrator determines appropriate in the event of a major
disaster)''.</DELETED>
<DELETED>SEC. 8. PROHIBITION REGARDING SBA RULES RELATING TO DISASTER
LOANS.</DELETED>
<DELETED> (a) Definitions.--In this section:</DELETED>
<DELETED> (1) Cost.--The term ``cost'' has the meaning given
the term in section 502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a).</DELETED>
<DELETED> (2) Rule.--The term ``rule'' has the meaning given
the term in section 551 of title 5, United States
Code.</DELETED>
<DELETED> (b) Prohibition.--Notwithstanding any other provision of
law or regulation, beginning on the date of enactment of this Act, the
Administrator of the Small Business Administration may not issue any
rule that will result in any increased cost to the program carried out
under section 7(b) of the Small Business Act (15 U.S.C.
636(b)).</DELETED>
<DELETED>SEC. 9. GAO REPORT ON DISASTER LOAN CHANGES.</DELETED>
<DELETED> (a) Definition.--In this section, the term ``covered final
rule'' means--</DELETED>
<DELETED> (1) the final rule entitled ``Disaster Assistance
Loan Program Changes to Maximum Loan Amounts and Miscellaneous
Updates'' (88 Fed. Reg. 39335 (June 16, 2023); RIN 3245-AH91);
or</DELETED>
<DELETED> (2) the final rule entitled ``Disaster Assistance
Loan Program Changes to Unsecured Loan Amounts and Credit
Elsewhere Criteria'' (89 Fed. Reg. 59826 (July 24, 2024); RIN
3245-AI08).</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on Small Business and Entrepreneurship
and the Committee on Appropriations of the Senate and the Committee on
Small Business and the Committee on Appropriations of the House of
Representatives a report on--</DELETED>
<DELETED> (1) the cost (as defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of the
increase in the home loan lending limits for, the extension of
the deferment period for, the expansion of mitigation options
for, the modifications to the criteria for determining whether
applicants can obtain credit elsewhere with respect to, the
changes to collateral requirements for, and other changes to
the terms and conditions of loans under section 7(b)(1) of the
Small Business Act (15 U.S.C. 636(b)(1)) made by the covered
final rules; and</DELETED>
<DELETED> (2) the effect on the subsidy for such loans of
the changes contained in the covered final rules.</DELETED>
<DELETED>SEC. 10. SBA INSPECTOR GENERAL REVIEW.</DELETED>
<DELETED> (a) Definitions.--In this section--</DELETED>
<DELETED> (1) the term ``covered amounts'' means amounts
made available for the cost of direct loans authorized by
section 7(b) of the Small Business Act (15 U.S.C. 636(b));
and</DELETED>
<DELETED> (2) the term ``Inspector General'' means the
Inspector General of the Administration.</DELETED>
<DELETED> (b) Review.--</DELETED>
<DELETED> (1) In general.--The Inspector General shall
conduct a review of the circumstances surrounding the funding
shortfall with respect to covered amounts, as described in--
</DELETED>
<DELETED> (A) the letter from President Joseph R.
Biden, Jr. entitled ``Letter to Congress on Disaster
Needs'', dated October 4, 2024; and</DELETED>
<DELETED> (B) the letter from the Administrator
submitted to the Chair and Ranking Members of the
Committees on Appropriations of the Senate and the
House of Representatives, dated October 10,
2024.</DELETED>
<DELETED> (2) Contents.--The review required under paragraph
(1) shall include the following with respect to the funding
shortfall described in that paragraph:</DELETED>
<DELETED> (A) The identification of any reporting or
notification requirements in statute that the
Administration failed to provide to Congress with
respect to the funding shortfall.</DELETED>
<DELETED> (B) The reason for any obligation or
expenditure of covered amounts for a purpose that
significantly diverged from the purpose for which the
covered amounts were made available.</DELETED>
<DELETED> (C) An analysis of the accuracy of
projections and estimates relevant to the divergences
described in subparagraph (B).</DELETED>
<DELETED> (D) The identification and description of
any internal controls in place to manage covered
amounts.</DELETED>
<DELETED> (E) An analysis of the impact that any
reorganization of the Administration, including the
transfer of administrative authority for the program
carried out under section 7(b) of the Small Business
Act (15 U.S.C. 636(b)) to the Office of Capital Access
of the Administration, may have had with respect to the
funding shortfall.</DELETED>
<DELETED> (F) The identification of actions that the
Administration can take to--</DELETED>
<DELETED> (i) improve the accuracy of
information submitted by the President under
section 1105(a) of title 31, United States
Code, with respect to the
Administration;</DELETED>
<DELETED> (ii) prevent any future funding
shortfall with respect to any account of the
Administration; and</DELETED>
<DELETED> (iii) improve the report submitted
to the appropriate committees of Congress under
section 12091(a) of the Small Business Disaster
Response and Loan Improvements Act of 2008 (15
U.S.C. 636k(a)).</DELETED>
<DELETED> (G) Any other matter determined relevant
by the Inspector General.</DELETED>
<DELETED> (c) Report.--Not later than 180 days after the date of
enactment of this Act, the Inspector General shall submit to the
appropriate committees of Congress a report that contains the findings
of the review carried out under subsection (b).</DELETED>
<DELETED>SEC. 11. BUDGET AND FORECASTING REPORT REGARDING THE COST OF
DIRECT DISASTER LOANS.</DELETED>
<DELETED> (a) Budget Formulation and Forecasting.--Not later than 30
days after the date of enactment of this Act, the Administrator shall
submit to the appropriate committees of Congress a report detailing
corrections the Administration will make to improve forecasting, data
quality, and budget assumptions relating to budget submissions relating
to amounts made available for the cost of direct loans authorized by
section 7(b) of the Small Business Act (15 U.S.C. 636(b)).</DELETED>
<DELETED> (b) Updates.--Not later than 90 days after the date of
enactment of this Act, and every 90 days thereafter until the date that
is 90 days after the date on which all the corrections described in
subsection (a) have been implemented, the Administrator shall submit to
the appropriate committees of Congress a r