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GENfR- of THiE: UNITE. sTATES
CCAMI|]NGl 31, e .R. ;E b
February 6, 1980
B1949 78
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T1se ilonorable John P. ,urttha
Hlouse of Represenitatives
V%-- - mmiir )thil
Dear r , '
TPhis is n respolse, to your resuest for a loaat opiMAor
rh in the attepts by the Syourlusiness Administration (SIIA)
to recover funds it loaned to individuals who sufered flood danage
a .yPentsvlvIla in July 1971.
ilt e. johnstown ar s-, -- . ... . ct ( 5 -S C
Pursuant to section 7(b)(1) of tlte Small Busiless Act (5 U.S.C,
§ 636(b)(1) (1976)), SB is auLhoriZed to make loans thrat t
determines to be necssarY or approPrite hccause of floods, riots,
or viidiotd~tor other catastropbh~s$ As a result of a
' rot e cttile Adminietra o
or ciVil, diso rde cirsio'$*11 -UV 1v1h7
prsidential disaster de lar ctiOesWnl ,Ju ily 21 1971,theAM 14
of SBA dtetlnined that several counties within Pennsylania,h
had been esignated i)y the rederal Dsat n r AssistancCe Admilittifo
(FDMb)e constituted a disaster area becufe of damage resulting from
seve tozorms and flooding leginning abot July 19, 19771. 42 Fed.
sever, 21 1977), Inaccordance With thlat darclarntioll,
Reg, 39173 (August 2 97.i cCOr, re - ith tfrot
SwA approved many applicationhl for disAst je if loat fo
individUsllb ,withiln hedisanster area*,4.
-.k---CflnnnVIfifl inenact'
Subs thUCIY Stote oL -
l .gtlf u ty, on April 28 1978-teGov o o. make4 WraLSt of up to $4,000
touany peCrslwho ilfrtle overnor to o, d,..UCtdon of nontbussneSS
lislation autilora r uctonofnob -c
leg ... - sffered tie damn Re or. ^,deaL uly1977 flood*
to any person wh 1 o ropett as the result Of e July 1977 flod.
PA. avfll 18orsonial proped April 28, 1978. tt appears that at 1'.
Fome of tle State grants ,ade pursuat to thi d an SBA iYae
gone to indivioli hohadpreviOUtY received an S difite saSte
gon . ... fl 315 of the Dlsnt.
at is SBA'to positionhtlusu1o2 13-,..
Relict, Act of i 974 (Ful. L. No. 93-288, approved May 22, 1974, 42 US.A
§ 5155 (1976)), all individtals who received )oL tl a Stnte grant and an
SEA di'aSt7 loan must promply repaY that portlB of the disastr loan
51hA divsdet ~ loa nupryoii pcatcd by , the later State grant.
---j- A .t,, h+ve bee1 , pic t d b
th t is determinec u t r qtl d o....oa.r ci ie t
You suggest tlat SBs attempts to requite disaster loan recipint
who inter received a State grant to make an it. date lunpisum loan
repayment to SBA of te amount of the State grant, eVen though the
loan w 3s not delinquent, are not justifAltd You stte
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