Following heavy criticism of the Small Business Administration's response to Hurricane Katrina, the House on Wednesday approved a major overhaul to the agency's disaster-loan program.

The bill, which passed 267-158, doubles the disaster-loan limits for affected business owners to $3 million, while broadening the range of businesses that are eligible to apply.

It also requires the SBA to retain a team of 1,000 reserve workers in the event of a major disaster, while better coordinating its efforts with the Federal Emergency Management Agency.

Small-business owners across the Gulf Coast have complained of lengthy delays  in the wake of Katrina and other severe storms that hit the region in 2005.

"This legislation is a comprehensive solution to problems that have been plaguing Gulf Coast businesses for far too long now," Rep. Nydia Velazquez (D-N.Y.), the chairwoman of the House Small Business Committee, said in a statement.

Last week, SBA Administrator Steven Preston said the agency is taking steps to improve the program, which has included contacting up to 94,000 borrowers in the region to check the status of their loans, and stationing SBA officials in local court houses and record offices to help them find necessary documents.

As of April, only 75 loan applications remain to be processes out of 422,659 received by the agency since Katina slammed into the Gulf Coast in August 2005, Preston said. Of these, the agency has approved just over $7 billion in home and business loans and disbursed $5.5 billion, or roughly 78 percent, according to SBA figures.

"We are looking to make sure that control and fiscal responsibility issues are being tightened up if we're hit by another big one," Preston said in a conference call with reporters on Friday.

This summer, the SBA's inspector general is expected to release a series of critical reports on the agency's Gulf Coast relief efforts for small businesses.

The House bill will be taken up by the Senate in coming weeks.