II
119THCONGRESS
1
STSESSION 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
JANUARY29, 2025
Mr. B
UDD(for himself, Ms. ERNST, Mr. SCOTTof South Carolina, and Mr.
T
ILLIS) introduced the following bill; which was read twice and referred
to the Committee on Small Business and Entrepreneurship
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 Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Disaster Loan Ac-4
countability and Reform Act’’ or the ‘‘DLARA’’. 5
SEC. 2. TABLE OF CONTENTS. 6
The table of contents for this Act is as follows: 7
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 loan forgiveness.
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 2
•S 300 IS
Sec. 7. Limits on disaster loans.
Sec. 8. Prohibition regarding SBA rules relating to disaster loans.
Sec. 9. GAO report on disaster loan changes.
Sec. 10. SBA Inspector General review.
Sec. 11. Budget and forecasting report regarding the cost of direct disaster
loans.
SEC. 3. DEFINITIONS.
1
In this Act— 2
(1) the terms ‘‘Administration’’ and ‘‘Adminis-3
trator’’ mean the Small Business Administration 4
and the Administrator thereof, respectively; and 5
(2) the term ‘‘appropriate committees of Con-6
gress’’ means the Committee on Small Business and 7
Entrepreneurship and the Committee on Appropria-8
tions of the Senate and the Committee on Small 9
Business and the Committee on Appropriations of 10
the House of Representatives. 11
SEC. 4. MONTHLY DISASTER LOAN REPORTS. 12
Section 12091(a) of the Small Business Disaster Re-13
sponse and Loan Improvements Act of 2008 (15 U.S.C. 14
636k(a)) is amended— 15
(1) in paragraph (1), by striking ‘‘during the 16
applicable period for a major disaster’’; 17
(2) in paragraph (2)— 18
(A) in subparagraph (E), by striking ‘‘how 19
long the available funding for such loans will 20
last’’ and inserting ‘‘the date at which available 21
funding for such loans will reach 10 percent of 22
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 3
•S 300 IS
the most recent appropriation and the date at 1
which the funds will be depleted’’; 2
(B) in subparagraph (H), by striking 3
‘‘and’’ at the end; 4
(C) in subparagraph (I), by striking the 5
period at the end and inserting ‘‘; and’’; and 6
(D) by adding at the end the following: 7
‘‘(J) a summary detailing any changes to 8
estimates or assumptions on obligations and ex-9
penditures, including data supporting these 10
changes.’’; and 11
(3) by adding at the end the following: 12
‘‘(3) P
ROHIBITION ON OFFICIAL TRAVEL .—If 13
the Administrator does not submit a report required 14
to be submitted under paragraph (1) by the required 15
date, no funds may be obligated for official travel by 16
the Administrator until the Administrator submits 17
the report.’’. 18
SEC. 5. BUDGET REQUEST RELATING TO DISASTER LOANS. 19
Section 1105 of title 31, United States Code, is 20
amended— 21
(1) in subsection (a), by adding at the end the 22
following: 23
‘‘(39) separate statements of— 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 4
•S 300 IS
‘‘(A) the amount of appropriations re-1
quested for the fiscal year for which the budget 2
is submitted for the cost of SBA disaster loans, 3
the 10-year average of the cost of SBA disaster 4
loans, and an explanation for any difference be-5
tween the amount requested and the 10-year 6
average cost; and 7
‘‘(B) the amount of appropriations re-8
quested for the fiscal year for which the budget 9
is submitted for the cost of COVID-EIDL 10
loans, the 10-year average of the cost of 11
COVID-EIDL loans, and an explanation for 12
any difference between the amount requested 13
and the 10-year average cost. 14
‘‘(40) separate statements of— 15
‘‘(A) the amount of appropriations re-16
quested for the fiscal year for which the budget 17
is submitted for administrative costs relating to 18
SBA disaster loans, the 10-year average of such 19
administrative costs, and an explanation for any 20
difference between the amount requested and 21
the 10-year average costs; and 22
‘‘(B) the amount of appropriations re-23
quested for the fiscal year for which the budget 24
is submitted for administrative costs relating to 25
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 5
•S 300 IS
COVID-EIDL loans, the 10-year average of 1
such administrative costs, and an explanation 2
for any difference between the amount re-3
quested and the 10-year average costs.’’; and 4
(2) by adding at the end the following: 5
‘‘(j) In paragraphs (39) and (40) of subsection (a)— 6
‘‘(1) the term ‘COVID-EIDL loan’ means a di-7
rect loan under section 7(b) of the Small Business 8
Act (15 U.S.C. 636(b)) that was authorized under 9
section 1110 of the CARES Act (15 U.S.C. 9009); 10
and 11
‘‘(2) the term ‘SBA disaster loan’ means a di-12
rect loan authorized by section 7(b) of the Small 13
Business Act (15 U.S.C. 636(b)), other than a loan 14
that was authorized under section 1110 of the 15
CARES Act (15 U.S.C. 9009).’’. 16
SEC. 6. LIMITATIONS ON LOAN FORGIVENESS. 17
Section 7 of the Small Business Act (15 U.S.C. 636) 18
is amended by adding at the end the following: 19
‘‘(o) L
IMITATIONS ONLOANFORGIVENESS.— 20
‘‘(1) I
N GENERAL.—The Administrator may 21
not— 22
‘‘(A) forgive any loan under this section 23
unless Congress has authorized such forgive-24
ness; or 25
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 6
•S 300 IS
‘‘(B) compromise on, suspend, or end col-1
lections on a debt owed to the Administration 2
pursuant to paragraph (2) or (3) of section 3
3711(a) of title 31, United States Code. 4
‘‘(2) R
EFERRAL OF DEBT .—If the Adminis-5
trator seeks to discharge a debt and the discharge 6
of such debt is limited under paragraph (1), the Ad-7
ministrator shall refer such debt to the Department 8
of the Treasury for collection action, including a 9
final determination regarding whether to suspend, 10
end, or continue collection of the debt.’’. 11
SEC. 7. LIMITS ON DISASTER LOANS. 12
(a) L
OWFUNDING.—Section 7(b) of the Small Busi-13
ness Act (15 U.S.C. 636(b)) is amended— 14
(1) by redesignating the second paragraph des-15
ignated as paragraph (16), relating to statute of lim-16
itations, as added by the COVID–19 EIDL Fraud 17
Statute of Limitations Act of 2022 (Public Law 18
117–165; 136 Stat. 1363), as paragraph (18); and 19
(2) by inserting after paragraph (16), relating 20
to disaster declarations in rural areas, as added by 21
the Disaster Assistance for Rural Communities Act 22
(Public Law 117–249; 136 Stat. 2350), the fol-23
lowing: 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 7
•S 300 IS
‘‘(17) REQUIREMENTS WHEN FUNDING IS 1
LOW.— 2
‘‘(A) I
N GENERAL.—Not later than 24 3
hours after the unobligated balance of amounts 4
available for the cost of direct loans authorized 5
by this subsection is less than 10 percent of the 6
most recent appropriation for such costs, the 7
Administrator shall notify the Committee on 8
Appropriations and the Committee on Small 9
Business and Entrepreneurship of the Senate 10
and the Committee on Appropriations and the 11
Committee on Small Business of the House of 12
Representatives. 13
‘‘(B) L
IMITATION ON OBLIGATING 14
FUNDS.—During the period beginning on the 15
first business day occurring on or after the date 16
by which the Administrator is required to notify 17
Congress under subparagraph (A) and ending 18
on the date on which additional amounts are 19
appropriated for such costs, the Administrator 20
may not obligate funds for a direct loan author-21
ized under this subsection in an amount that is 22
more than the amount of such a loan for which 23
collateral is required.’’. 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 8
•S 300 IS
(b) REPEAL OFAUTHORITYTOINCREASEAMOUNT 1
OFLOANS FOR WHICHCOLLATERAL ISNOTRE-2
QUIRED.—Section 7(d)(6) of the Small Business Act is 3
amended by striking ‘‘(or such higher amount as the Ad-4
ministrator determines appropriate in the event of a major 5
disaster)’’. 6
SEC. 8. PROHIBITION REGARDING SBA RULES RELATING 7
TO DISASTER LOANS. 8
(a) D
EFINITIONS.—In this section: 9
(1) C
OST.—The term ‘‘cost’’ has the meaning 10
given the term in section 502 of the Federal Credit 11
Reform Act of 1990 (2 U.S.C. 661a). 12
(2) R
ULE.—The term ‘‘rule’’ has the meaning 13
given the term in section 551 of title 5, United 14
States Code. 15
(b) P
ROHIBITION.—Notwithstanding any other provi-16
sion of law or regulation, beginning on the date of enact-17
ment of this Act, the Administrator of the Small Business 18
Administration may not issue any rule that will result in 19
any increased cost to the program carried out under sec-20
tion 7(b) of the Small Business Act (15 U.S.C. 636(b)). 21
SEC. 9. GAO REPORT ON DISASTER LOAN CHANGES. 22
(a) D
EFINITION.—In this section, the term ‘‘covered 23
final rule’’ means— 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 9
•S 300 IS
(1) the final rule entitled ‘‘Disaster Assistance 1
Loan Program Changes to Maximum Loan Amounts 2
and Miscellaneous Updates’’ (88 Fed. Reg. 39335 3
(June 16, 2023); RIN 3245–AH91); or 4
(2) the final rule entitled ‘‘Disaster Assistance 5
Loan Program Changes to Unsecured Loan 6
Amounts and Credit Elsewhere Criteria’’ (89 Fed. 7
Reg. 59826 (July 24, 2024); RIN 3245–AI08). 8
(b) R
EPORT.—Not later than 1 year after the date 9
of enactment of this Act, the Comptroller General of the 10
United States shall submit to the Committee on Small 11
Business and Entrepreneurship and the Committee on Ap-12
propriations of the Senate and the Committee on Small 13
Business and the Committee on Appropriations of the 14
House of Representatives a report on— 15
(1) the cost (as defined in section 502 of the 16
Federal Credit Reform Act of 1990 (2 U.S.C. 17
661a)) of the increase in the home loan lending lim-18
its for, the extension of the deferment period for, the 19
expansion of mitigation options for, the modifica-20
tions to the criteria for determining whether appli-21
cants can obtain credit elsewhere with respect to, the 22
changes to collateral requirements for, and other 23
changes to the terms and conditions of loans under 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 10
•S 300 IS
section 7(b)(1) of the Small Business Act (15 U.S.C. 1
636(b)(1)) made by the covered final rules; and 2
(2) the effect on the subsidy for such loans of 3
the changes contained in the covered final rules. 4
SEC. 10. SBA INSPECTOR GENERAL REVIEW. 5
(a) D
EFINITIONS.—In this section— 6
(1) the term ‘‘covered amounts’’ means 7
amounts made available for the cost of direct loans 8
authorized by section 7(b) of the Small Business Act 9
(15 U.S.C. 636(b)); and 10
(2) the term ‘‘Inspector General’’ means the In-11
spector General of the Administration. 12
(b) R
EVIEW.— 13
(1) I
N GENERAL.—The Inspector General shall 14
conduct a review of the circumstances surrounding 15
the funding shortfall with respect to covered 16
amounts, as described in— 17
(A) the letter from President Joseph R. 18
Biden, Jr. entitled ‘‘Letter to Congress on Dis-19
aster Needs’’, dated October 4, 2024; and 20
(B) the letter from the Administrator sub-21
mitted to the Chair and Ranking Members of 22
the Committees on Appropriations of the Sen-23
ate and the House of Representatives, dated 24
October 10, 2024. 25
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 11
•S 300 IS
(2) CONTENTS.—The review required under 1
paragraph (1) shall include the following with re-2
spect to the funding shortfall described in that para-3
graph: 4
(A) The identification of any reporting or 5
notification requirements in statute that the 6
Administration failed to provide to Congress 7
with respect to the funding shortfall. 8
(B) The reason for any obligation or ex-9
penditure of covered amounts for a purpose 10
that significantly diverged from the purpose for 11
which the covered amounts were made available. 12
(C) An analysis of the accuracy of projec-13
tions and estimates relevant to the divergences 14
described in subparagraph (B). 15
(D) The identification and description of 16
any internal controls in place to manage cov-17
ered amounts. 18
(E) An analysis of the impact that any re-19
organization of the Administration, including 20
the transfer of administrative authority for the 21
program carried out under section 7(b) of the 22
Small Business Act (15 U.S.C. 636(b)) to the 23
Office of Capital Access of the Administration, 24
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 12
•S 300 IS
may have had with respect to the funding 1
shortfall. 2
(F) The identification of actions that the 3
Administration can take to— 4
(i) improve the accuracy of informa-5
tion submitted by the President under sec-6
tion 1105(a) of title 31, United States 7
Code, with respect to the Administration; 8
(ii) prevent any future funding short-9
fall with respect to any account of the Ad-10
ministration; and 11
(iii) improve the report submitted to 12
the appropriate committees of Congress 13
under section 12091(a) of the Small Busi-14
ness Disaster Response and Loan Improve-15
ments Act of 2008 (15 U.S.C. 636k(a)). 16
(G) Any other matter determined relevant 17
by the Inspector General. 18
(c) R
EPORT.—Not later than 180 days after the date 19
of enactment of this Act, the Inspector General shall sub-20
mit to the appropriate committees of Congress a report 21
that contains the findings of the review carried out under 22
subsection (b). 23
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB 13
•S 300 IS
SEC. 11. BUDGET AND FORECASTING REPORT REGARDING 1
THE COST OF DIRECT DISASTER LOANS. 2
(a) B
UDGETFORMULATION AND FORECASTING.— 3
Not later than 30 days after the date of enactment of this 4
Act, the Administrator shall submit to the appropriate 5
committees of Congress a report detailing corrections the 6
Administration will make to improve forecasting, data 7
quality, and budget assumptions relating to budget sub-8
missions relating to amounts made available for the cost 9
of direct loans authorized by section 7(b) of the Small 10
Business Act (15 U.S.C. 636(b)). 11
(b) U
PDATES.—Not later than 90 days after the date 12
of enactment of this Act, and every 90 days thereafter 13
until the date that is 90 days after the date on which all 14
the corrections described in subsection (a) have been im-15
plemented, the Administrator shall submit to the appro-16
priate committees of Congress a report— 17
(1) detailing the actions the Administration has 18
taken to implement the corrections described in sub-19
section (a); and 20
(2) explaining how each action detailed under 21
paragraph (1) is directly related to implementing 1 22
or more corrections described in subsection (a). 23
Æ
VerDate Sep 11 2014 22:19 Jan 30, 2025 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6301 E:\BILLS\S300.IS S300
kjohnson on DSK7ZCZBW3PROD with $$_JOB