[Congressional Record (Bound Edition), Volume 161 (2015), Part 8]
[House]
[Pages 11385-11388]
[From the U.S. 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.--

[[Page 11386]]

       ``(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 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.

[[Page 11387]]

  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.
  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

[[Page 11388]]

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 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.

                          ____________________