Rule2024-27028
Disaster Assistance Loan Program Updates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 20, 2024
Effective
January 21, 2025
Issuing agencies
Small Business Administration
Abstract
This direct final rule amends the U.S. Small Business Administration's (SBA or Agency) regulations governing the SBA Disaster Loan Program by revising the definition of contiguous counties, clarifying the timeline for a governor's request to be delivered to an SBA Disaster Assistance Field Operations Center, and modernizing language for clarity and consistency.
Full Text
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<title>Federal Register, Volume 89 Issue 224 (Wednesday, November 20, 2024)</title>
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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Rules and Regulations]
[Pages 91536-91539]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27028]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 123
RIN 3245-AI20
Disaster Assistance Loan Program Updates
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
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SUMMARY: This direct final rule amends the U.S. Small Business
Administration's (SBA or Agency) regulations governing the SBA Disaster
Loan Program by revising the definition of contiguous counties,
clarifying the timeline for a governor's request to be delivered to an
SBA Disaster Assistance Field Operations Center, and modernizing
language for clarity and consistency.
DATES:
Effective date: This final rule is effective January 21, 2025
without further action. If significant adverse comment is received, SBA
will publish a timely withdrawal of the rule in the Federal Register.
Applicability date: This rule is applicable for disasters declared
on or after January 21, 2025.
Comment date: Comments must be received on or before December 20,
2024.
ADDRESSES: You may submit comments, identified by docket number SBA-
2024-0015 through the Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the instructions for submitting comments.
SBA will post all comments on <a href="http://www.regulations.gov">www.regulations.gov</a>. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at <a href="http://www.regulations.gov">www.regulations.gov</a>, please send an email to Eric Wall at
<a href="/cdn-cgi/l/email-protection#c9acbba0aae7bea8a5a589baaba8e7aea6bf"><span class="__cf_email__" data-cfemail="9ffaedf6fcb1e8fef3f3dfecfdfeb1f8f0e9">[email protected]</span></a> and highlight the information that you consider to be
CBI and explain why you believe SBA should hold this information as
confidential. All other comments must be submitted through the Federal
eRulemaking Portal described above. Highlight the information that you
consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review the information and make
the final determination whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Eric Wall, Office of Disaster Recovery
and Resilience, 409 3rd St. SW, Washington, DC 20416, (202) 205-6739.
SUPPLEMENTARY INFORMATION:
I. Background
The SBA's Disaster Loan Program provides critical assistance to
communities after a disaster. Pursuant to Section 7(b) of the Small
Business Act, 15 U.S.C. 636(b) (the Act), the SBA is authorized to make
direct loans to homeowners, renters, businesses, and non-profit
organizations that have been adversely affected by a disaster. Also
pursuant to the Act, the SBA may declare an Agency disaster in areas
demonstrating substantial physical or economic damage because of
natural or other disasters.
With natural disasters increasing in size, severity, and frequency
across the United States and its territories, SBA is expanding the
definition of contiguous counties, clarifying certain aspects of
disaster declaration requests, and simplifying language to ensure
consistency.
SBA believes these changes are necessary to:
<bullet> Increase efficiencies in the administration and delivery
of the disaster loan program to better achieve mission and improve
outcomes for economic recovery,
<bullet> Recognize the unique economic circumstances of island
chains,
<bullet> Clarify the timeline for Governor submissions of disaster
requests, and
<bullet> Ensure consistency and clarity of language within SBA
guidance documents.
II. Description of Regulatory Changes
SBA is amending the language in 13 CFR 123.2 (What are disaster
loans and disaster declarations?), 123.3 (How are disaster declarations
made?), and 123.4 (What is a disaster area and why is it important?) to
update the language from ``disaster victims'' to ``disaster
survivors.'' This update will modernize the language in the CFR to
reflect the strength of those who have survived a disaster. The change
will also align the regulations with the terminology currently used by
the SBA Disaster Loan Program.
SBA is amending 13 CFR 123.2 to subdivide the paragraph into two
separate paragraphs. This technical change separates the definition of
disaster loans and disaster declarations into a format easier to
comprehend.
SBA is amending the first sentence in 13 CFR 123.3(a)(3)(i), How
are disaster declarations made?, to replace the word U.S. possession
with ``territory'' to
[[Page 91537]]
ensure the language is updated with current use and meaning. SBA is
also eliminating the word possession in Sec. 123.2(a)(6).
SBA is amending 13 CFR 123.3(a)(3)(iii), How are disaster
declarations made?, to include the Chief Executive of an Indian tribal
government as an authority that can request an SBA physical disaster
declaration. This change clarifies what is already permitted,
correcting the previous oversight and aligning with current practice.
SBA is amending the regulatory language in 13 CFR 123.3(a)(5), How
are disaster declarations made?, to ensure the language is consistent
with the current language in 13 CFR 123.3(a)(3)(iii). This change
grants SBA the flexibility to extend the timeframe for submitting
declaration requests to the Field Operations Center serving the
jurisdiction.
SBA is amending the regulatory definition of ``contiguous
counties'' in 13 CFR 123.4, What is a disaster area and why is it
important?, to increase the mileage between counties geographically
separated by a minor body of water from one mile to five miles. The
geographic separation between counties is being extended to encompass
those counties that are separated by minor bodies of water but that
have physical and economic connections and commerce needs with the
primary county. SBA reviewed disaster areas separated by water and
determined that the current one-mile limit is too restrictive.
Increasing the geographic separation between counties to 5 miles will
enable disaster assistance to reach a broader area. The additional
mileage removes the barriers created by wide rivers, such as the
Arkansas, Colorado, Columbia, Mississippi, Missouri, Neuse, Ohio,
Platte, Red, St. Lawrence, Susquehanna, Tennessee, and Yellowstone
rivers. This increase also removes the barriers created by other bodies
of water such as smaller lakes and bays.
This rule also revises the definition of ``contiguous'' to state
that individual islands of geographically isolated island chains are
contiguous to each other. These islands are unique, because they are
isolated from the mainland and other direct commerce hubs. The revised
definition states that contiguous island chains include, but are not
limited to, Hawai'i, the U.S. Virgin Islands, and the Commonwealth of
the Northern Mariana Islands. Under the current regulation, these
islands are not considered contiguous to each other because the
separation between them is more than one mile. However, all of the
counties within these island chains are economically reliant on each
other for trade and commerce and all are affected by a disaster that
impacts one particular island/county.
III. Justification for Direct Final Rule
In general, SBA publishes a rule for public comment before issuing
a final rule in accordance with the Administrative Procedure Act. 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule without prior public participation. 5 U.S.C.
553(b)(B). The good cause requirement is satisfied when prior public
participation is impracticable, unnecessary, or contrary to the public
interest. Agencies typically utilize direct final rulemakings for
routine, non-controversial regulatory actions that are unlikely to
receive adverse comments. In direct final rulemaking, an agency
publishes a final rule with a statement that the rule will go into
effect unless the agency receives significant adverse comment within a
specified period. Significant adverse comments are comments that
provide strong justifications why the rule should not be adopted or for
changing the rule. If the agency receives no significant adverse
comment in response to the direct final rule, the rule will go into
effect without further action. If the agency receives significant
adverse comment, the agency will withdraw the direct final rule and may
instead issue a proposed rulemaking. SBA has determined that the
regulatory changes addressed in this direct final rulemaking are
routine, non-controversial, and not likely to result in significant
adverse comments.
Compliance With Executive Orders 12866, 12988, 13132, 13175, 13563,
14094 the Congressional Review Act (5 U.S.C. 801-808), Paperwork
Reduction Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act
(5 U.S.C. 601-612)
Executive Orders 12866, 13563 and 14094
SBA is issuing this direct final rulemaking in conformance with
Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and
13563 direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, reducing costs, harmonizing
rules, and promoting flexibility. Executive Order 14094 reaffirms,
supplements, and updates Executive Order 12866 and further directs
agencies to solicit and consider input from a wide range of affected
and interested parties through a variety of means. The Office of
Management and Budget has determined that this rule does not constitute
a significant regulatory action under Executive Order 12866, as amended
by Executive Order 14094. SBA has developed this rule in a manner
consistent with these requirements and thoroughly examined the costs
and benefits as well as availability of regulatory alternatives
associated with its implementation.
Executive Order 12988
This action meets applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have preemptive effect or retroactive effect.
Executive Order 13132
This rule does not have federalism implications as defined in
Executive Order 13132. It will not have substantial direct effects on
the States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in the Executive Order. As
such it does not warrant the preparation of a federalism assessment.
Executive Order 13175
This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian Tribes, on the relationship between the Federal Government and
Indian Tribes, on the distribution of power and responsibilities
between the Federal Government and Indian Tribes and no substantial
direct compliance costs on Indian Tribal governments nor any rules with
Tribal implications that preempts Tribal law.
Congressional Review Act
This rule has been determined not to meet the criteria set forth in
5 U.S.C. 804(2). SBA will submit the rule to Congress and the
Government Accountability Office consistent with
[[Page 91538]]
the Congressional Review Act's requirements.
Paperwork Reduction Act, 44 U.S.C. Ch. 35
SBA has determined that this rule does not impose additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act, 44 U.S.C., Chapter 35.
Regulatory Flexibility Act, 5 U.S.C. 601
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, generally
requires that when an agency issues a proposed rule, or a final rule
pursuant to section 553(b) of the APA or another law, the agency must
prepare a regulatory flexibility analysis that meets the requirements
of the RFA and publish such analysis in the Federal Register. 5 U.S.C.
603, 604.
Rules that are exempt from notice and comment are also exempt from
the RFA requirements, including conducting a regulatory flexibility
analysis, such as when--among other exceptions--the agency for good
cause finds that notice and public procedure are impracticable,
unnecessary, or contrary to the public interest. SBA Office of Advocacy
Guide: How to Comply with the Regulatory Flexibility Act, Ch.1. p.9.
Since this rule is exempt from notice and comment, SBA is not required
to conduct a regulatory flexibility analysis.
List of Subjects in 13 CFR Part 123
Disaster assistance, Loan mitigation, Loan programs--physical
disaster (home, business) and economic injury disaster (business).
For the reasons set forth in the preamble, the SBA amends 13 CFR
part 123 as follows:
PART 123--DISASTER LOAN PROGRAM
0
1. The authority citation for part 123 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 636(d), 657n, and
9009.
0
2. Revise Sec. 123.2 to read as follows:
Sec. 123.2 What are disaster loans and disaster declarations?
(a) SBA offers low interest, fixed rate loans to disaster
survivors, enabling them to repair or replace property damaged or
destroyed in declared disasters. It also offers such loans to affected
small businesses to help them recover from economic injury caused by
such disasters. SBA also offers interim guaranteed disaster loans, in
participation with financial institutions, to affected small businesses
(``IDAP loans'').
(b) Disaster declarations are official notices recognizing that
specific geographic areas have been damaged by floods and other acts of
nature, riots, civil disorders, or industrial accidents such as oil
spills. These disasters are sudden events which cause severe physical
damage, and do not include slower physical occurrences such as
shoreline erosion or gradual land settling. However, for purposes of
economic injury disaster loans only, they do include droughts and below
average water levels in the Great Lakes or on any body of water in the
United States that supports commerce by small businesses. Sudden events
that cause substantial economic injury may be disasters even if they do
not cause physical damage to a survivor's property. Past examples
include ocean conditions causing significant displacement (major ocean
currents) or closure (toxic algae blooms) of customary fishing waters,
as well as contamination of food or other products for human
consumption from unforeseeable and unintended events beyond the control
of the survivors.
0
3. Amend Sec. 123.3 by revising (a)(3)(i) and (iii), (a)(5), (a)(6)
introductory text, and (b) to read as follows:
Sec. 123.3 How are disaster declarations made?
(a) * * *
(3) * * *
(i) In any county or other smaller political subdivision of a State
or U.S. territory, at least 25 homes or 25 businesses, or a combination
of at least 25 homes, businesses, or other eligible institutions, each
sustain uninsured losses of 40 percent or more of the estimated fair
replacement value or pre-disaster fair market value of the damaged
property, whichever is lower; or
* * * * *
(iii) The Governor of the State or the Chief Executive of the
Indian Tribal government in which the disaster occurred submits a
written request to SBA for a physical disaster declaration by SBA. This
request should be delivered to the Disaster Assistance Field Operations
Center serving the jurisdiction within 60 days of the date of the
disaster.
* * * * *
(5) SBA makes an economic injury declaration in reliance on a state
certification that at least five small business concerns in a disaster
area have suffered substantial economic injury as a result of the
disaster and are in need of financial assistance not otherwise
available on reasonable terms. The state certification must be signed
by the Governor, must specify the county or counties or other political
subdivision in which the disaster occurred, and should be delivered
(with supporting documentation) to the Disaster Assistance Field
Operations Center serving the jurisdiction within 120 days of the
disaster occurrence. When a Governor certifies with respect to a
drought or to below average water levels, the supporting documentation
must include findings which show that conditions during the incident
period meet or exceed the U.S. Drought Monitor (USDM) standard of
``severe'' (Intensity level D-2 to D-4). The USDM may be found at
<a href="https://droughtmonitor.unl.edu/">https://droughtmonitor.unl.edu/</a>. With respect to below average water
levels, the supplementary information accompanying the certification
must include findings which establish long-term average water levels
based on recorded historical data, show that current water levels are
below long-term average levels, and demonstrate that economic injury
has occurred as a direct result of the low water levels. Not later than
30 days after SBA receives a certification by a Governor, it shall
respond in writing with its decision and its reasons.
(6) SBA makes a physical disaster declaration in a rural area
(rural disaster declaration) upon request from the Governor of the
State or the Chief Executive of the Indian Tribal government in which
the rural area is located. Rural area means any county or other
political subdivision of a State, the District of Columbia, or a
territory of the United States that is designated as a rural area by
the Bureau of the Census. The following conditions must be met:
* * * * *
(b) SBA publishes notice of any disaster declaration in the Federal
Register. The published notice will identify the kinds of assistance
available, the date and nature of the disaster, and the deadline and
location for filing loan applications. Additionally, SBA will use the
local media to inform potential loan applicants where to obtain loan
applications and otherwise to assist disaster survivors in applying for
disaster loans. SBA will accept applications after the announced
deadline only when SBA determines that the late filing resulted from
substantial causes beyond the control of the applicant.
0
4. Revise Sec. 123.4 to read as follows:
Sec. 123.4 What is a disaster area and why is it important?
Each disaster declaration defines the geographical areas affected
by the
[[Page 91539]]
disaster. Only those survivors located in the declared disaster area
are eligible to apply for SBA disaster loans. When the President
declares a major disaster, the Federal Emergency Management Agency
defines the disaster area. In major disasters, economic injury disaster
loans and IDAP loans may be made for survivors in contiguous counties
or other political subdivisions, provided, however that with respect to
major disasters which authorize public assistance only, SBA shall not
make economic injury disaster or IDAP loans in counties contiguous to
the disaster area. Except for rural disaster declarations (as defined
in Sec. 123.3), disaster declarations issued by SBA include contiguous
counties for both physical, economic injury and, in some cases IDAP
assistance. Rural disaster declarations do not include assistance for
contiguous counties. Contiguous counties or other political
subdivisions are those land areas which abut the land area of the
declared disaster area without geographic separation other than by a
minor body of water, not to exceed five miles between the land areas of
such counties. The individual islands of geographically isolated island
chains, including Hawai'i, the U.S. Virgin Islands, and the
Commonwealth of the Northern Mariana Islands, are also designated as
contiguous to each other. When SBA issues an economic injury disaster
declaration in response to a determination of an emergency involving
Federal primary responsibility by the President, the disaster area
shall include each State or subdivision thereof (including counties)
included in the President's emergency determination.
0
5. Revise Sec. 123.503 to read as follows:
Sec. 123.503 When can you apply for a Military Reservist EIDL?
Your small business can apply for a Military Reservist EIDL any
time beginning on the date the essential employee receives notice of
expected call-up and ending one year after the date the essential
employee is discharged or released from active service. The Associate
Administrator for the Office of Disaster Recovery and Resilience (AA/
ODR&R) or designee may extend the one-year limit by no more than one
additional year after finding extraordinary or unforeseeable
circumstances.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2024-27028 Filed 11-19-24; 8:45 am]
BILLING CODE 8026-09-P
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