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H.R. 4238 — what changed

Disaster Loan Accountability and Reform Act

From Introduced in House to Reported in House. 2 sections amended and 1 removed between Introduced in House and Reported in House.

Sec. 6 Limitations on disaster loans

added Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended—

(a)
removed Low funding— Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended—
(1)
renumbered was (2)(3) 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)
renumbered was (2)(4) 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:

added “(17) Requirements when funding is low—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.”

removed “(17) Requirements when funding is low

removed “(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.

removed “(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.

removed “(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).

removed “(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)
removed 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)
removed by striking paragraph (17); and
(2)
removed by redesignating paragraph (18) as paragraph (17).
(c)
removed 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. 9 Budget and forecasting report regarding the cost of direct disaster loans

(a)
changed Definitions—Budget formulation and forecasting— In Not later than 30 days after the date of enactment of this section—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)
added 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)
removed 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)
removed the term Inspector General means the Inspector General of the Administration.
(b)
removed Review—
(1)
removed 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)
removed the letter from President Joseph R. Biden, Jr. entitled “Letter to Congress on Disaster Needs”, dated October 4, 2024; and
(B)
removed 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.
(1)
changed Contents— The review required under paragraph (1) shall include detailing the following with respect actions the Administration has taken to implement the funding shortfall corrections described in that paragraph:subsection (a); and
(2)
added explaining how each action detailed under paragraph (1) is directly related to implementing 1 or more corrections described in subsection (a).
(A)
removed 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)
removed 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)
removed An analysis of the accuracy of projections and estimates relevant to the divergences described in subparagraph (B).
(D)
removed The identification and description of any internal controls in place to manage covered amounts.
(E)
removed 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)
removed The identification of actions that the Administration can take to—
(i)
removed 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)
removed prevent any future funding shortfall with respect to any account of the Administration; and
(iii)
removed 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)
removed Any other matter determined relevant by the Inspector General.
(c)
removed 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

removed
(a)
removed 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)
removed 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)
removed detailing the actions the Administration has taken to implement the corrections described in subsection (a); and
(2)
removed explaining how each action detailed under paragraph (1) is directly related to implementing 1 or more corrections described in subsection (a).