S.300 - Disaster Loan Accountability and Reform Act; DLARA (119th Congress)
Summary
S.300, the Disaster Loan Accountability and Reform Act (DLARA), aims to improve accountability and oversight of the Small Business Administration's (SBA) disaster loan program. The bill introduces measures such as enhanced monthly reporting requirements, budget request specifications, and limitations on loan forgiveness. It also mandates reports from the Government Accountability Office (GAO) and the SBA Inspector General to assess the program's effectiveness and financial management.
Expected Effects
The DLARA is likely to result in more transparent and responsible management of disaster loan funds. This includes more detailed reporting to Congress and stricter controls on loan disbursements when funding is low. The changes aim to prevent funding shortfalls and ensure that disaster assistance is targeted effectively.
Potential Benefits
- Improved Transparency: Monthly reports will provide more detailed information on loan obligations and expenditures.
- Enhanced Budget Oversight: Separate budget statements will clarify the costs associated with SBA disaster loans and COVID-EIDL loans.
- Limitations on Loan Forgiveness: Restrictions on loan forgiveness will ensure that debts are properly managed and referred to the Treasury for collection.
- Early Warning System: The requirement to notify Congress when funding falls below 10% will allow for timely action to prevent shortfalls.
- Increased Accountability: GAO and Inspector General reports will provide independent assessments of the program's performance and financial management.
Potential Disadvantages
- Potential Delays: Increased reporting requirements could create administrative burdens and slow down the disbursement of loans.
- Limited Loan Forgiveness: Restrictions on loan forgiveness may place additional burdens on disaster victims.
- Collateral Requirements: Limiting loans to only those with collateral when funding is low could exclude some eligible applicants.
- Sunset Provision: The sunset provision on certain amendments could create uncertainty about the long-term impact of the reforms.
- Rulemaking Prohibition: The prohibition on rules that increase program costs may limit the SBA's flexibility to adapt to changing circumstances.
Constitutional Alignment
The bill aligns with the constitutional principle of congressional oversight and control over federal spending, as outlined in Article I, Section 9, Clause 7, which requires regular statements and accounts of the receipts and expenditures of all public money. The reporting requirements and limitations on loan forgiveness promote fiscal responsibility and accountability, consistent with the general welfare clause of the Constitution. The emphasis on transparency and oversight also supports the principle of government accountability to the people.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).