DLARA

[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>