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RECOVER Act

On April 18, 2007, the House passed the RECOVER Act (H.R. 1361), which overhauls the Small Business Administration's (SBA) Disaster Assistance Program. In response to SBA's disastrous performance after the 2005 Gulf State hurricanes, this bill provides numerous provisions to improve and strengthen the SBA disaster assistance program.  

Among its many provisions, the bill:

  • Requires the SBA to develop and implement a comprehensive, written disaster plan and regularly update its plan as its disaster program continues to evolve.
  • Creates a new disaster planning position within the SBA, with the individual to be appointed by the President.
  • Requires the SBA to maintain a 1,000-person “disaster reserve corps,” who receive annual training and, if possible, cross-training to perform more than one function relating to disaster response.
  • Contains numerous provisions to improve the manner in which SBA disaster loans are processed, approved, and disbursed, including:
    • Requiring the SBA to develop, implement, and maintain a comprehensive, centralized information system to track communications between the SBA and disaster victims.
    • Requiring the SBA to implement a revised disbursement process with increased minimum disbursement levels that better meet the needs of disaster victims.
    • Requiring the SBA to maintain a backup disaster processing operation in a separate geographic location from the primary processing operation.
  • Requires the SBA to much more closely coordinate with the Federal Emergency Management Agency (FEMA).
  • Charges the SBA Administrator with conducting a disaster simulation once per fiscal year.
  • Increases individual disaster loan limits from $1.5 million to $3 million.
  • Provides the SBA with more tools to respond to the diverse needs of small businesses in a community devastated by disaster, including establishing a bridge loan program to make immediate, short-term loans to small businesses damaged by disaster.
  • Authorizes the SBA Administrator to provide grants of up to $100,000 for certain small businesses that were victims of the 2005 Gulf Coast hurricanes and that are still trying to rebuild their businesses, have yet to receive assistance, and cannot benefit from the loan program; it's a narrowly tailored program, with less than 2,000 small businesses likely to be able to meet the tight eligibility requirements.