119-hr4238

[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) .
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