H.R. 208, Superstorm Sandy Relief and Disaster Loan Program Improvement Act of 2015 (Senate amendment)

H.R. 208

Superstorm Sandy Relief and Disaster Loan Program Improvement Act of 2015 (Senate amendment)

Sponsor
Rep. Nydia M. Velazquez
Committee
Small Business

Date
November 16, 2015 (114th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Monday, November 16, 2015, the House will consider the Senate amendment to H.R. 208, the Superstorm Sandy Relief and Disaster Loan Program Improvement Act of 2015, under suspension of the rules.  H.R. 208 was introduced on January 8, 2015, by Rep. Nydia Velázquez (D-NY) and was referred to the Committee on Small Business, which ordered the bill reported, as amended, by voice vote, on June 10, 2015.  The House passed H.R. 208 by voice vote on July 13, 2015. The Senate then passed the bill, with an amendment, by unanimous consent, on October 21, 2015.

Bill Summary

H.R. 208 amends the Small Business Act so that individuals and businesses adversely affected by Superstorm Sandy (which made landfall in October 2012) and were denied the ability to file for disaster loans due to administrative backlogs created by the Small Business Administration (SBA) can file applications for such assistance.  The bill also makes technical corrections and modernizations to SBA’s Disaster Loan program to ensure SBA is more effective in helping disaster victims obtain loans.[1]  The bill also authorizes SBA to permit disaster loans to be used for the construction of safe rooms or storm shelters. Click here for the previous Legislative Digest on the House-passed version of H.R. 208.

The Senate amendment makes minor modifications to language in the House-passed bill and adds provisions of S. 1470, the Recovery Improvements for Small Entities (RISE) After Disaster Act of 2015, to the House-passed version.  The modifications to the House-passed bill include:

  • Changing the title of the bill to the RISE After Disaster Act of 2015;
  • Directing the Inspector General of the SBA to review controls for applicant eligibility for loans made under the bill; and,
  • Requiring safe rooms or similar storm shelters eligible for disaster loans under the bill to be constructed according to applicable standards issued by the Federal Emergency Management Agency.

According to Senator David Vitter (R-LA), Chairman of the Senate Committee on Small Business and Entrepreneurship, the provisions of the RISE After Disaster Act included in the Senate amendment:[2]

  • Provide long-term recovery loans to small businesses after SBA disaster assistance is no longer available;
  • Direct federal agencies to utilize local contractors for response and recovery efforts;
  • Address contractor malfeasance (such as the Chinese drywall crisis) by allowing homeowners and businesses to increase the size of their SBA disaster loans to remediate their property;
  • Provide incentives for innovative firms doing research and development to stay in the disaster-affected area, rather than move elsewhere; and,
  • Allow small businesses affected by major disasters to access surplus property from the federal government to aid in their recovery.

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[1] House Report 114-186 at 4.
[2] http://www.lis.gov/cgi-lis/query/D?r114:2:./temp/~r114pGwYJG::

Background

On October 29, 2012, a Category 1 hurricane, commonly referred to as Superstorm Sandy, made landfall near Atlantic City, New Jersey.  The storm caused “damage to hundreds of thousands of homes, forced tens of thousands of survivors into shelters and caused billions of dollars in damage to vital infrastructure systems. . .”[1]  Estimates to rebuild the infrastructure, homes and businesses in New York and New Jersey alone totaled nearly $80 billion.[2]

In response, President Obama declared a major disaster under the Stafford Act, which allows SBA to offer loans to homeowners and businesses.  There are two types of such loans:  physical disaster loans that enable reconstruction of residential and commercial property for damages not covered by insurance; and, economic injury disaster loans for small businesses that suffered monetary harm (but not physical damage) as a result of diminished commerce in the disaster area.[3]

The Government Accountability Office (GAO) found that, despite previous improvements made by Congress to the agency’s disaster loan programs, SBA was ill-prepared to deal with the 15,745 disaster loan applications from small businesses, most of which were filed by entities in the New York and New Jersey metropolitan area.  GAO found that SBA did not meet its own processing deadlines and that the backlog on decisions whether to issue a loan “grew rapidly.”  SBA exacerbated problems by the manner in which applications were handled, failing to have sufficient computer capabilities to handle the influx of applications, and not having sufficiently-trained personnel to review applications.[4]

H.R, 208 is designed to help those who were harmed by SBA’s insufficient response to Superstorm Sandy and prevent similar problems from occurring in the future.

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[1] House Report 114-186 at 4.
[2] Id.
[3] Id. at 5.
[4] Id.

Cost

A Congressional Budget Office (CBO) cost estimate is currently unavailable.

Additional Information

For questions or further information please contact Jerry White with the House Republican Policy Committee by email or at 5-0190.