[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4238 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4238
To improve accountability in the disaster loan program of the Small
Business Administration, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 27, 2025
Mr. Moore of North Carolina (for himself, Mr. Davis of North Carolina,
Mr. Edwards, Ms. King-Hinds, Mr. Gimenez, Mr. Murphy, Mr. Donalds, Mr.
Fry, Mr. Ciscomani, Mr. Rouzer, and Mr. Wilson of South Carolina)
introduced the following bill; which was referred to the Committee on
Small Business, and in addition to the Committee on the Budget, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
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,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Disaster Loan Accountability and
Reform Act'' or the ``DLARA''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
Sec. 4. Monthly disaster loan reports.
Sec. 5. Budget request relating to disaster loans.
Sec. 6. Limitations on disaster loans.
Sec. 7. GAO report on SBA disaster loan account.
Sec. 8. GAO report on disaster loan changes.
Sec. 9. SBA Inspector General review.
Sec. 10. Budget and forecasting report regarding the cost of direct
disaster loans.
SEC. 3. DEFINITIONS.
In this Act--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively;
(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; and
(3) 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).
SEC. 4. MONTHLY DISASTER LOAN REPORTS.
Section 12091(a) of the Small Business Disaster Response and Loan
Improvements Act of 2008 (15 U.S.C. 636k(a)) is amended--
(1) in paragraph (1)--
(A) by striking ``during the applicable period for
a major disaster''; and
(B) by striking ``for that major disaster'';
(2) in paragraph (2)--
(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'';
(B) in subparagraph (H), by striking ``and'' at the
end;
(C) in subparagraph (I), by striking the period at
the end and inserting ``; and''; and
(D) by adding at the end the following:
``(J) a summary detailing any changes to estimates
or assumptions on obligations and expenditures,
including data supporting these changes.''; and
(3) by adding at the end the following:
``(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.''.
SEC. 5. BUDGET REQUEST RELATING TO DISASTER LOANS.
Section 1105 of title 31, United States Code, is amended--
(1) in subsection (a), by adding at the end the following:
``(39) separate statements of--
``(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
``(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.
``(40) separate statements of--
``(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
``(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
(2) by adding at the end the following:
``(j) In paragraphs (39) and (40) of subsection (a)--
``(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
``(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).''.
SEC. 6. LIMITATIONS ON DISASTER LOANS.
(a) Low Funding.--Section 7(b) of the Small Business Act (15 U.S.C.
636(b)) is amended--
(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
(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:
``(17) Requirements when funding is low.--
``(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 10-year average annual cost
provided in the most recent Presidential budget request
required under section 1105(a)(39)(A) of title 31,
United States Code, or, if unavailable, the 10-year
average annual cost for the immediately preceding 10-
year period of SBA disaster loans (as defined in
section 1105(j) of such title), 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.
``(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
limit the obligation of funds for a direct loan
authorized under this subsection to the amount of such
a loan for which collateral is required.
``(C) Authority to limit obligation of funds.--In
carrying out the authority to enact a limitation under
(B), the Administrator shall apply that limitation with
respect to amounts obligated for all direct loans
authorized under this subsection during the period
described in subparagraph (B).
``(D) Requirement to disburse within 14 days.--If
the Administrator exercises the authority under (B),
the Administrator shall, not later than 14 days after
the date on which additional amounts are appropriated
under subparagraph (B), obligate and disburse on a
regular schedule any remaining amount outstanding on a
direct loan authorized under this subsection.''.
(b) Sunset.--Effective on the date that is 4 years after the date
of enactment of this Act, section 7(b) of the Small Business Act (15
U.S.C. 636(b)) is amended--
(1) by striking paragraph (17); and
(2) by redesignating paragraph (18) as paragraph (17).
(c) Report.--Not later than 1 year after the date of enactment of
this Act, in the event that the Administrator exercises the authority
described in paragraph (17)(B) of section 7(b) of the Small Business
Act (15 U.S.C. 636(b)), as added by subsection (a), the Comptroller
General of the United States shall submit to the appropriate committees
of Congress a report assessing the actual and potential impact of the
amendments made by subsection (a) during the period covered by the
report.
SEC. 7. GAO REPORT ON SBA DISASTER LOAN ACCOUNT.
(a) Report.--Not later than 180 days after the date of enactment of
this Act, the Comptroller General of the United States shall submit to
the Administrator and the appropriate committees of Congress a report
on--
(1) the average weekly rate at which the Administration
obligates the unobligated balance of amounts available for the
cost of SBA disaster loans;
(2) the average amount, during the periods beginning on
October 1, 2015, and ending on July 31, 2023, and beginning on
July 31, 2023, and ending on the date of enactment of this Act,
respectively, disbursed to a borrower each week, during the
initial 12-week period in which a borrower receives amounts
from an SBA disaster loan, beginning the day after the borrower
accepts their loan, separated by home SBA disaster loan
borrowers, business SBA disaster loan borrowers, and economic
injury disaster loan borrowers; and
(3) the average amount of fully disbursed SBA disaster
loans, originated during the period beginning on July 31, 2023,
and ending on the date of enactment of this Act, with separate
averages for SBA disaster loans delineated by home, business,
and economic injury disaster loans.
(b) Response.--Not later than 90 days after the date on which the
Comptroller General of the United States submits the report under
subsection (a), the Administrator shall submit to the appropriate
committees of Congress a response to the report, including an
implementation plan for any recommendations in the report.
SEC. 8. GAO REPORT ON DISASTER LOAN CHANGES.
(a) Definition.--In this section, the term ``covered final rule''
means--
(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
(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).
(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 appropriate committees of Congress a report on--
(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
(2) the effect on the subsidy for such loans of the changes
contained in the covered final rules.
SEC. 9. SBA INSPECTOR GENERAL REVIEW.
(a) Definitions.--In this section--
(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
(2) the term ``Inspector General'' means the Inspector
General of the Administration.
(b) Review.--
(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--
(A) the letter from President Joseph R. Biden, Jr.
entitled ``Letter to Congress on Disaster Needs'',
dated October 4, 2024; and
(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.
(2) Contents.--The review required under paragraph (1)
shall include the following with respect to the funding
shortfall described in that paragraph:
(A) The identification of any report or
notification required by statute that the
Administration failed to provide to Congress with
respect to the funding shortfall.
(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.
(C) An analysis of the accuracy of projections and
estimates relevant to the divergences described in
subparagraph (B).
(D) The identification and description of any
internal controls in place to manage covered amounts.
(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.
(F) The identification of actions that the
Administration can take to--
(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;
(ii) prevent any future funding shortfall
with respect to any account of the
Administration; and
(iii) improve the reports 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)).
(G) Any other matter determined relevant by the
Inspector General.
(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).
SEC. 10. BUDGET AND FORECASTING REPORT REGARDING THE COST OF DIRECT
DISASTER LOANS.
(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 SBA disaster loans.
(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 report--
(1) detailing the actions the Administration has taken to
implement the corrections described in subsection (a); and
(2) explaining how each action detailed under paragraph (1)
is directly related to implementing 1 or more corrections
described in subsection (a).
<all>