To amend the Small Business Act to make disaster loans available for damages caused by prolonged power outages, and for other purposes.

Bill Number

H.R. 2897

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Commerce

Status

Introduced

Latest Action

2025-04-10: Referred to the House Committee on Small Business.

Last Updated

2025-09-27T08:06:08Z

AI-Generated Summary

Purpose

This bill (H.R. 2897) aims to expand access to federal disaster loans under the Small Business Act by including prolonged power outages as a qualifying "disaster." It seeks to help small businesses and homeowners recover from damages caused by such outages, including through investments in energy resilience technologies and replacement of spoiled food and drinks.

Key Provisions

• Expansion of Disaster Definition: Prolonged power outages are now classified as a "disaster" for two types of Small Business Administration (SBA) loans:
• Physical disaster loans (for repairing or replacing damaged property): Applies when an outage causes at least 25 homes, businesses, or other eligible recipients in a county or smaller area to suffer uninsured losses equal to at least 40% of the property's estimated replacement or pre-disaster market value (whichever is lower).
• Economic injury loans (for working capital needs during recovery): Applies when at least 25 homes, businesses, or other eligible recipients in a county or smaller area lose power simultaneously for 48 hours or more.
• Allowable Loan Uses: Borrowers can use these loans not only for standard repairs but also to:
• Purchase "energy resilience systems," such as generators, solar panels, wind turbines, microgrids (small-scale power grids), fuel cells, batteries, or similar technologies that generate or store electricity to handle future power disruptions.
• Replace food and drinks that were lost, destroyed, or made unsafe due to the outage (e.g., from refrigeration failure).
• Administrative Details: The bill redesignates an existing paragraph in the law (on loan time limits) and adds a new paragraph (18) to incorporate these changes.

Significant Changes to Existing Law

• Previously, SBA disaster loans under Section 7(b) of the Small Business Act covered events like hurricanes, floods, or earthquakes but did not explicitly include power outages unless tied to a broader declared disaster.
• This amendment directly adds prolonged power outages as a standalone qualifying event, broadening eligibility without needing a separate presidential or state declaration in all cases.
• It introduces specific, flexible uses for loan funds focused on resilience and immediate needs like food replacement, which were not previously outlined for power-related issues.

Potential Impacts

• On Government Agencies: The SBA may see an increase in loan applications and processing demands, requiring updated guidelines for evaluating power outages and approving resilience technologies. This could strain resources but also promote long-term grid stability through encouraged investments.
• On Citizens: Homeowners and small business owners in outage-prone areas (e.g., due to storms, cyberattacks, or aging infrastructure) gain easier access to low-interest loans for recovery, potentially reducing financial hardship and encouraging adoption of sustainable energy solutions.
• On International Relations: Minimal direct impact, though it could indirectly support U.S. energy security by boosting domestic resilience tech, which might influence trade in renewable energy components.

Main Stakeholders Affected

• Small Businesses: Primary beneficiaries, as they can access loans for operational recovery and upgrades to prevent future losses.
• Homeowners and Residents: Eligible for physical disaster loans to repair homes and replace essentials like food.
• SBA and Federal Government: Responsible for implementing and funding the expanded program.
• Energy and Tech Providers: Companies selling generators, solar systems, or batteries may see increased demand from loan-funded purchases.
• Local Governments: In affected counties or subdivisions, which could experience faster community recovery but also more federal involvement in disaster assessments.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens the SBA's role in disaster relief by clarifying power outages as disasters, potentially reducing legal disputes over eligibility. No new enforcement mechanisms are added, relying on existing SBA authority.
• Constitutional: Aligns with Congress's spending power under Article I to support economic recovery; no apparent conflicts with federalism, as it applies uniformly to states, territories, and possessions.
• Political: Could appeal to bipartisan interests in disaster preparedness amid rising climate risks and grid vulnerabilities, but might spark debates on federal spending priorities or the definition of "prolonged" outages if thresholds (e.g., 48 hours) are seen as too narrow or broad. Promotes environmental goals by incentivizing clean energy tech without mandates.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Stevens, Haley M. [D-MI-11]

Cosponsors (6)

Rep. Bergman, Jack [R-MI-1], Rep. Scholten, Hillary J. [D-MI-3], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. Barrett, Tom [R-MI-7], Rep. Smith, Adam [D-WA-9], Rep. Nunn, Zachary [R-IA-3]

Recent Actions

• 2025-04-10: Referred to the House Committee on Small Business.
• 2025-04-10: Introduced in House
• 2025-04-10: Introduced in House

Bill Versions

• To amend the Small Business Act to make disaster loans available for damages caused by prolonged power outages, and for other purposes. — issued 2025-04-10 — PDF (4 pages)