Short title

This Act may be cited as the

Small Business Disaster Readiness and Reform Act of 2009

Revised collateral requirements

Section 7 of the Small Business Act (15 U.S.C. 636) is amended— (1)by striking (e) [RESERVED]. and (f) [RESERVED].; and (2)in subsection (f), as added by section 12068(a)(2) of the Small Business Disaster Response and Loan Improvements Act of 2008 (subtitle B of title XII of the Food, Conservation, and Energy Act of 2008; Public Law 110–246), by adding at the end the following:

(2)

Revised collateral requirements

In making a loan with respect to a business under subsection (b), if the total approved amount of such loan is less than or equal to $250,000, the Administrator may not require the borrower to use the borrower’s home as collateral.

Increased limits

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended— (1)in paragraph (3)(E) by striking $1,500,000 each place it appears and inserting $3,000,000; and (2)in paragraph (8)(A) by striking $2,000,000 and inserting $3,000,000.

Revised repayment terms

Section 7(f) of the Small Business Act (15 U.S.C. 636(f)) is amended by adding at the end the following:

(3)

Revised repayment terms

In making loans under subsection (b), the Administrator— (A)may not require repayment to begin until the date that is 12 months after the date on which the final disbursement of approved amounts is made; and (B)shall calculate the amount of repayment based solely on the amounts disbursed.

Revised disbursement process

Section 7(f) of the Small Business Act (15 U.S.C. 636(f)), as amended by this Act, is further amended by adding at the end the following:

(4)

Revised disbursement process

In making a loan under subsection (b), the Administrator shall disburse loan amounts in accordance with the following: (A)If the total amount approved with respect to such loan is less than or equal to $150,000— (i)the first disbursement with respect to such loan shall consist of 40 percent of the total loan amount, or a lesser percentage of the total loan amount if the Administrator and the borrower agree on such a lesser percentage; (ii)the second disbursement shall consist of 50 percent of the loan amounts that remain after the first disbursement, and shall be made when the borrower has produced satisfactory receipts to demonstrate the proper use of 50 percent of the first disbursement; and (iii)the third disbursement shall consist of the loan amounts that remain after the preceding disbursements, and shall be made when the borrower has produced satisfactory receipts to demonstrate the proper use of the first disbursement and 50 percent of the second disbursement. (B)If the total amount approved with respect to such loan is more than $150,000 but less than or equal to $500,000— (i)the first disbursement with respect to such loan shall consist of 20 percent of the total loan amount, or a lesser percentage of the total loan amount if the Administrator and the borrower agree on such a lesser percentage; (ii)the second disbursement shall consist of 30 percent of the loan amounts that remain after the first disbursement, and shall be made when the borrower has produced satisfactory receipts to demonstrate the proper use of 50 percent of the first disbursement; (iii)the third disbursement shall consist of 25 percent of the loan amounts that remain after the first and second disbursements, and shall be made when the borrower has produced satisfactory receipts to demonstrate the proper use of the first disbursement and 50 percent of the second disbursement; and (iv)the fourth disbursement shall consist of the loan amounts that remain after the preceding disbursements, and shall be made when the borrower has produced satisfactory receipts to demonstrate the proper use of the first and second disbursements and 50 percent of the third disbursement. (C)If the total amount approved with respect to such loan is more than $500,000— (i)the first disbursement with respect to such loan shall consist of at least $100,000, or a lesser amount if the Administrator and the borrower agree on such a lesser amount; and (ii)the number of disbursements after the first, and the amount of each such disbursement, shall be in the discretion of the Administrator, but the amount of each such disbursement shall be at least $100,000.

Grant program

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as amended by this Act, is further amended by inserting after paragraph (9) the following:

(10)

Grants to disaster-affected small businesses

(A)

In general

If the Administrator declares eligibility for additional disaster assistance under paragraph (9), the Administrator may make a grant, in an amount not exceeding $100,000, to a small business concern that— (i)is located in an area affected by the applicable major disaster; (ii)submits to the Administrator a certification by the owner of the concern that such owner intends to reestablish the concern in the same county in which the concern was originally located; (iii)has applied for, and was rejected for, a conventional disaster assistance loan under this subsection; and (iv)was in existence for at least 2 years before the date on which the applicable disaster declaration was made. (B)

Priority

In making grants under this paragraph, the Administrator shall give priority to a small business concern that the Administrator determines is economically viable but unable to meet short-term financial obligations. (C)

Program level and authorization of appropriations

(i)

Program level

The Administrator is authorized to make $100,000,000 in grants under this paragraph for each of fiscal years 2010 and 2011. (ii)

Authorization of appropriations

There are authorized to be appropriated to the Administrator such sums as may be necessary to carry out this paragraph.

Regional disaster working groups

Section 40 of the Small Business Act (15 U.S.C. 657l) is amended— (1)in subsection (a), in the matter preceding paragraph (1), by striking or and inserting and; (2)by redesignating subsection (d) as subsection (e); and (3)by inserting after subsection (c) the following:

(d)

Regional disaster working groups

In carrying out the responsibilities pertaining to loan making activities under subsection (a), the Administrator, acting through the regional administrators of the regional offices of the Administration, shall develop a disaster preparedness and response plan for each region of the Administration. Each such plan shall be developed in cooperation with Federal, State, and local emergency response authorities and representatives of businesses located in the region to which such plan applies. Each such plan shall identify and include a plan relating to the 3 disasters, natural or manmade, most likely to occur in the region to which such plan applies.

Outreach grants for loan applicant assistance

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as amended by this Act, is further amended by inserting after paragraph (10) the following:

(11)

Outreach grants for loan applicant assistance

(A)

In general

From amounts made available for administrative expenses relating to activities under this subsection, the Administrator is authorized to make grants to the following: (i)A women’s business center in an area affected by a disaster. (ii)A small business development center in an area affected by a disaster. (iii)A Veteran Business Outreach Center in an area affected by a disaster. (iv)A chamber of commerce in an area affected by a disaster. (B)

Use of grant

An entity specified under subparagraph (A) shall use a grant received under this paragraph to provide application preparation assistance to applicants for a loan under this subsection. (C)

Program level

The Administrator is authorized to make $50,000,000 in grants under this paragraph for each of fiscal years 2010 and 2011.

Homeowners impacted by toxic drywall

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as amended by this Act, is further amended by inserting after paragraph (11) the following:

(12)

Homeowners impacted by toxic drywall

The Administrator may make a loan under this subsection to any homeowner if the primary residence of such homeowner has been adversely impacted by the installation of toxic drywall manufactured in China. A loan under this paragraph may be used only for the repair or replacement of such toxic drywall.

10.

Authorization of appropriations

Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended by inserting after subsection (e) the following:

(f)

Fiscal years 2010 and 2011 with respect to section 7(b)

There is authorized to be appropriated such sums as may be necessary for administrative expenses and loans under section 7(b).

11.

Regulations

Except as otherwise provided in this Act or in amendments made by this Act, after an opportunity for notice and comment, but not later than 180 days after the date of the enactment of this Act, the Administrator shall issue regulations to carry out this Act and the amendments made by this Act.