[Congressional Record Volume 161, Number 108 (Monday, July 13, 2015)]
[House]
[Pages H5096-H5099]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SUPERSTORM SANDY RELIEF AND DISASTER LOAN PROGRAM IMPROVEMENT ACT OF
2015
Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 208) to require the Administrator of the Small Business
Administration to establish a program to make loans to certain
businesses, homeowners, and renters affected by Superstorm Sandy, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 208
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 ``Superstorm Sandy Relief and
Disaster Loan Program Improvement Act of 2015''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) In 2012, Superstorm Sandy caused substantial physical
and economic damage to the United States, and New York in
particular.
(2) For businesses and homeowners, the primary means of
obtaining long-term Federal financial assistance in the wake
of disasters such as Superstorm Sandy is through the Small
Business Administration's Disaster Loan Program.
(3) With regard to the Small Business Administration's
operation of the Disaster Loan Program after Superstorm
Sandy, the Government Accountability Office found that the
Administration did not meet its timeliness goals for
processing business loan applications.
(4) According to the Government Accountability Office, the
Small Business Administration stated that it was challenged
by an unexpectedly high volume of loan applications that it
received early in its response to Superstorm Sandy.
(5) As a result, many businesses and homeowners affected by
Superstorm Sandy were unable to apply for financing from the
Small Business Administration.
SEC. 3. REVISED DISASTER DEADLINE.
Section 7(d) of the Small Business Act (15 U.S.C. 636(d))
is amended by adding at the end the following:
``(8) Disaster loans for superstorm sandy.--
``(A) In general.--Notwithstanding any other provision of
law, and subject to the same requirements and procedures that
are used to make loans pursuant to subsection (b), a small
business concern, homeowner, or renter that was located
within an area and during the time
[[Page H5097]]
period with respect to which a major disaster was declared by
the President under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170)
by reason of Superstorm Sandy may apply to the
Administrator--
``(i) for a loan to repair, rehabilitate, or replace
property damaged or destroyed by reason of Superstorm Sandy;
or
``(ii) if such a small business concern has suffered
substantial economic injury by reason of Superstorm Sandy,
for a loan to assist such a small business concern.
``(B) Timing.--The Administrator shall select loan
recipients and make available loans for a period of not less
than 1 year after the date on which the Administrator carries
out this authority.''.
SEC. 4. USE OF PHYSICAL DAMAGE DISASTER LOANS TO CONSTRUCT
SAFE ROOMS.
Section 7(b)(1)(A) of the Small Business Act (15 U.S.C.
636(b)(1)(A)) is amended by striking ``mitigating measures''
and all that follows through ``modifying structures'' and
inserting the following: ``mitigating measures, including--
``(i) construction of retaining walls and sea walls;
``(ii) grading and contouring land; and
``(iii) relocating utilities and modifying structures,
including construction of a safe room or similar storm
shelter designed to protect property and occupants from
tornadoes or other natural disasters''.
SEC. 5. COLLATERAL REQUIREMENTS FOR SMALL BUSINESS CONCERNS.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is amended by inserting after paragraph (9) the following:
``(10) Collateral requirements for small businesses.--In
the case of a loan made pursuant to this subsection in an
amount not greater than $250,000, the Administrator may not
require a borrower to pledge his or her primary residence as
collateral if--
``(A) other collateral exists, including assets related to
the operation of a business; and
``(B) such an option does not delay the Administrator's
processing of disaster applications for a disaster.''.
SEC. 6. REDUCING DELAYS ON CLOSING AND DISBURSEMENT OF LOANS.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is further amended by inserting after paragraph (10) (as
added by section 5) the following:
``(11) Reducing closing and disbursement delays.--The
Administrator shall provide a clear and concise notification
on all application materials for loans made under this
subsection and on relevant websites notifying an applicant
that the applicant may submit all documentation necessary for
the approval of the loan at the time of application and that
failure to submit all documentation could delay the approval
and disbursement of the loan.''.
SEC. 7. INCREASING TRANSPARENCY IN LOAN APPROVALS.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is further amended by inserting after paragraph (11) (as
added by section 6) the following:
``(12) Increasing transparency in loan approvals.--The
Administrator shall establish and implement clear, written
policies and procedures for analyzing the ability of a loan
applicant to repay a loan made under this subsection.''.
SEC. 8. SAFEGUARDING TAXPAYERS' INTERESTS.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is further amended by inserting after paragraph (12) (as
added by section 7) the following:
``(13) Ensuring accountability in loan approvals.--The
Administrator shall establish requirements for the approval
of economic injury disaster loan assistance made available
pursuant to paragraph (2), which shall include the review of
applicant eligibility and shall require that all supporting
documentation is submitted prior to loan approval. The
Administrator shall require that personnel involved in the
approval of such loans be trained on such procedures.''.
SEC. 9. DISASTER PERFORMANCE MEASURES.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is further amended by inserting after paragraph (13) (as
added by section 8) the following:
``(14) Reporting on disaster performance measures.--The
Administrator shall report the average processing time for
all other disaster loan applications, including disaggregated
data on disaster loan applications that were declined by the
Administration's automated disaster processing system and
applications in which the Administrator performed loss
verification. For each disaster described in paragraph (2),
the Administrator shall report such average processing times
on its website and to the Committee on Small Business of the
House of Representatives and the Committee on Small Business
and Entrepreneurship of the Senate.''.
SEC. 10. DISASTER PLAN IMPROVEMENTS.
The Administrator of the Small Business Administration
shall revise the comprehensive written disaster response plan
required in section 40 of the Small Business Act (15 U.S.C.
657l), or any successor thereto, to incorporate the
Administration's response to a situation in which an extreme
volume of applications are received during the period of time
immediately after a disaster, which shall include a plan to
ensure that sufficient human and technological resources are
made available and a plan to prevent delays in loan
processing.
SEC. 11. REPORT TO CONGRESS ON IMPLEMENTATION OF CERTAIN
PROGRAMS.
(a) Initial Report.--The Administrator of the Small
Business Administration shall report to Congress not later
than 30 days after the date of enactment of this Act on the
implementation and status of the private disaster loan
program established in section 7(c) of the Small Business Act
(15 U.S.C. 636(c)), the Immediate Disaster Assistance program
established in section 42 of such Act (15 U.S.C. 657n), and
the expedited disaster assistance business loan program
established in section 12085 of the Small Business Disaster
Response and Loan Improvements Act of 2008 (15 U.S.C. 636j).
(b) Required Consultation With Depository Institutions and
Credit Unions.--The Administrator shall require the Associate
Administrator for the Office of Disaster Assistance to
consult with depository institutions (as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813)) and
credit unions regarding their potential participation in any
of the programs described in subsection (a).
(c) Report on Consultation.--Not later than 6 months after
date of enactment of this Act, the Administrator shall report
to Congress on the consultation required under subsection
(b).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their remarks and include
extraneous materials.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
A natural disaster exposes us to the worst of nature. Yet, in some
powerful way, it brings out the best in people. Communities ban
together. Neighbors help neighbors, and volunteers donate their time
and energy all in an effort to rebuild.
In the last decade, America has faced some of its worst natural
disasters, with Hurricane Katrina in 2005 and, more recently, Hurricane
Sandy in 2012.
In the aftermath of any disaster, it is imperative that the Federal
Government programs operate as efficiently and effectively as possible
so that victims are able to rebuild and return to their normal lives as
soon as possible.
Following Hurricane Sandy, there have been startling reports
regarding the Small Business Administration's inability to properly
administer the disaster loan program. The SBA was unwilling to
implement and utilize preexisting statutory authority that would have
assisted the agency in its response to Sandy.
{time} 1615
Mr. Speaker, despite our living in the Internet era with smartphones,
email, and apps, the SBA was shocked and surprised at the volume of
electronic disaster assistance applications it received, and the
systems were overwhelmed and unable to process applications. In a poor
pun, the SBA's disaster loan program was a disaster itself for the
victims of Hurricane Sandy.
The legislation before us, H.R. 208, is a corrective to those who
suffered twice--first, by a disaster and, second, by the SBA's
inability to effectively provide disaster assistance.
As Congress did with those who suffered from Hurricanes Katrina,
Rita, and Wilma, this legislation would allow those in the areas
affected by Sandy to apply for disaster assistance, irrespective of the
artificial and nonbinding deadlines imposed by the SBA.
Further, given the struggles that the SBA had in responding to
Hurricane Sandy, H.R. 208 makes practical changes to the disaster loan
program to help ensure that victims of future disasters do not suffer
as those who felt the brunt of Sandy did.
For example, H.R. 208 requires the SBA to update their disaster plan
to account for a disaster with extreme application volumes and allows
those affected by disasters to use SBA disaster loans to build safe
rooms as a mitigating measure against future similar disasters.
Mr. Speaker, this legislation also makes smart changes to create
parity among disaster victims by requiring the SBA to establish credit
standards so that similarly situated borrowers are treated in an
identical manner following a disaster.
These changes, among others, will ensure that the SBA is fully
capable of responding to the next catastrophic disaster. Unfortunately,
we all know there will be one or probably many.
[[Page H5098]]
I want to thank Ranking Member Velazquez, once again, for her
leadership on this issue and for working with me to develop a bill that
strives to ensure those affected by disasters can rebuild quickly.
Mr. Speaker, this bill has broad, bipartisan support. I urge my
colleagues to vote ``yes'' on H.R. 208, and I reserve the balance of my
time.
Ms. VELAZQUEZ. Mr. Speaker, when Hurricane Sandy made landfall in
2012, New York City was one of the hardest hit areas. Thousands of
homes suffered damage, infrastructure was disrupted, and our city's
small businesses were impacted physically and economically.
Mr. Speaker, 32,000 New Yorkers lost their jobs that November, losses
many economists attribute to the storm's economic impact. After
disasters like these, it is not uncommon for as many as 40 percent of
impacted small businesses to fail, depressing commerce and slowing the
overall community's recovery.
The Small Business Administration's disaster lending functions are
meant to provide quick credit to small firms and homeowners that have
been impacted by catastrophes. With entrepreneurs' and homeowners'
livelihoods at stake, it is vital that the SBA's disaster programs
operate effectively. That is why, in 2008, after Katrina, Congress
passed reforms meant to improve SBA's disaster response.
It became evident after Hurricane Sandy that there is still more work
to be done. The Government Accountability Office, the inspector
general, and reports from Small Business Committee Democrats have all
documented long delays in the processing and disbursement of loans.
Our committee found, for instance, that small businesses waited 46
days to get their application processed by SBA, a threefold increase
over previous Atlantic storms.
Mr. Speaker, H.R. 208 takes steps to address these shortcomings and
ensure those affected by Hurricane Sandy are treated fairly. To begin,
the bill would allow small businesses to apply again for loans. As SBA
was so unprepared for a disaster of this scale, it is important that
those impacted have another chance at securing assistance.
The bill would also correct a number of the shortcomings that have
held back the SBA's programs from functioning smoothly. Businesses will
no longer be prohibited from posting their assets as collateral. This
is important as, previously, many entrepreneurs have had to use
personal assets for loan collateral. By reducing closing and
disbursement delays, H.R. 208 would ensure funds flow more swiftly to
businesses after future catastrophes.
Lastly, the measure takes steps to require SBA to implement reforms
Congress passed following Katrina. The fact is the agency has been
woefully slow in making these changes, and this law will help hold it
accountable.
Mr. Speaker, our small businesses are counting on the SBA in times of
crises to provide badly needed help so they can recover quickly and
continue supporting our local economies. This legislation, which enjoys
bipartisan support, will help improve that process, and I urge my
colleagues to support it.
Mr. Speaker, when disasters strike, getting small businesses back on
their feet quickly can help local economies recover. For that to
happen, the SBA's disaster lending initiatives must work as intended,
providing American capital to firms that have suffered physical and
economic damage.
The legislation we are considering would allow businesses that
encountered delays to reapply for assistance and be made whole. It will
improve how the agency functions in the future, speeding help to small
businesses and homeowners when they are most in need.
Mr. Speaker, this is a bipartisan bill, and it will do much good for
entrepreneurs impacted by Sandy and for businesses impacted by future
disasters. I thank Chairman Chabot for his support on this legislation.
I encourage my colleagues to vote ``yes,'' and I yield back the
balance of my time.
Mr. CHABOT. Mr. Speaker, in closing, we never know when and where the
next disaster will strike, but, unfortunately, we do know that there
will be more disasters. Given this, we must ensure that the SBA is
truly prepared to help victims in the aftermath of those disasters.
Mr. Speaker, H.R. 208 rights the wrongs imposed by the SBA on those
who suffered from the effects of Sandy, but H.R. 208 does more than
just correct past mistakes; it imposes obligations on the SBA to ensure
that the agency learns from history and does not repeat those mistakes
so people in this country are actually helped next time and not harmed
by the agency.
Mr. Speaker, I yield back the balance of my time.
Mr. SMITH of New Jersey. Mr. Speaker, earlier today I was pleased to
support the Superstorm Sandy Relief and Disaster Loan Program
Improvement Act (H.R. 208). This legislation will provide assistance to
both homeowners and businesses that were utterly failed by the Small
Business Administration (SBA) in the aftermath of the Superstorm Sandy,
opening up assistance eligibility for an additional year and making
necessary changes to the Disaster Loan Program.
Last week, I had the privilege of testifying before the House Small
Business Committee regarding the hardships now faced by homeowners who
applied for SBA disaster assistance due to a complete lack of
information and disclosure in the loan process. This bill will help
those who did not even have the opportunity to obtain or file a loan
application due to SBA's serious incompetence and disorganization.
As the Government Accountability Office (GAO) reported, SBA missed
its timeliness goals by a longshot and is likely still unprepared for
another large-scale disaster. SBA was plagued by missed deadlines,
decision backlogs, computer systems failures, and insufficient
personnel training--problems that should not have come as a surprise in
the aftermath of SBA's abysmal response to Hurricane Katrina. Further,
GAO found SBA could once again ``be unprepared for a large volume of
applications to be submitted quickly following future disasters, which
may result in delays in loan funds for disaster victims.''
These failures cannot continue. Here we are more than two and a half
years following Sandy, still correcting failures that have slowed the
recovery process. In May, the Federal Emergency Management Agency
(FEMA) reopened all Sandy-related flood insurance claims due to
widespread fraud and a complete lack of oversight of the National Flood
Insurance Program (NFIP). These issues were completely foreseeable but
were not addressed, and Sandy victims continue to suffer as a result.
In addition to reopening the loan application process, H.R. 208 will
reduce delays in closing and disbursement on loans, allow the
construction of safe rooms, modify collateral requirements, increase
transparency, establish new performance measures, and require disaster
plan improvements, among other commonsense changes. I commend Ms.
Velazquez and Chairman Chabot for their leadership on this issue, and
look forward to working with them to further address necessary reforms
to the SBA Disaster Loan Program.
Mr. COLE. Mr. Speaker, I rise today in support of H.R. 208,
Superstorm Sandy Relief and Disaster Loan Program Improvement Act of
2015. I appreciate the support and assistance of both Chairman Chabot
and Ranking Member Velazquez to include my legislation, H.R. 2397, the
Tornado Family Safety Act of 2015 as part of this legislation.
The Small Business Administration is currently afforded the authority
to issue physical disaster loans for 120 percent of the value of
property destroyed but not covered by insurance. The purpose of the
additional 20 percent is so that individuals and business can modify
structures to reduce damage from future disasters. In Oklahoma, the
threat of tornadoes is ongoing, and we are always in between tornadoes.
Planning is essential in order to militate against damage and loss of
life.
It is for this reason that Section 4 is necessary. It reinforces the
intent of Congress that already exists in statute--the SBA should
already be including the construction of safe rooms as a use for
physical disaster loans because it is mitigating measure. The SBA's
existing interpretation of existing language in the Small Business Act
is incorrect.
Because of misinterpretation of this section previously, the SBA
should now understand that physical disaster loans can also be used for
other types of storm shelters as well, including, but not limited to
structures that protect occupants from not only tornadoes, but from
other natural disasters such as hurricanes, floods and wildfires.
It is important to note that loans may not be used to upgrade homes
or make additions unless as required by local building codes and
secondary or vacation homes are not eligible for these loans. The SBA
does not duplicate insurance claim payments. Generally, loans are made
over 30 years and interest rates are not more than 4 percent for those
cannot obtain credit elsewhere and for those that can
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obtain alternative credit, the rate does not exceed 8 percent for the
loan.
While local and state governments have an obligation to meet the
increase in shelter demand, the construction of the shelters is
expensive. Under guidelines from the Federal Emergency Management
Agency (FEMA) and the International Code Council (ICC), a safe room
should withstand 250 mph winds and the impact of a 15-pound plank
hitting a wall at 100 mph, according to the Insurance Institute for
Business and Home Safety.
Safe rooms designed to the FEMA and ICC standards are recommended for
both tornadoes and hurricanes. For individual homes, a safe room could
range anywhere from $3,000 to $12,000.
For anyone who has experienced Mother Nature's most indiscriminate
and unpredictable terrors, you can truly understand the extent to which
they devastate lives and property.
Again, Mr. Speaker, I support Superstorm Sandy Relief and Disaster
Loan Program Improvement Act of 2015. As I have stated before on the
floor of the House, I hope every Member reflects on the situation of
our fellow Americans during a time of crisis or disaster. While we may
hope that our communities remain peaceful and safe from crisis; we
certainly must support those that do not escape such natural and man-
made calamities.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Chabot) that the House suspend the rules and
pass the bill, H.R. 208, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
The title of the bill was amended so as to read: ``A bill to improve
the disaster assistance programs of the Small Business
Administration.''.
A motion to reconsider was laid on the table.
____________________