[Federal Register Volume 60, Number 88 (Monday, May 8, 1995)]
[Rules and Regulations]
[Pages 22495-22496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11155]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 123
Disaster--Waiver of Judgment Lien Restriction
AGENCY: Small Business Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule applies only to disaster loan assistance. It
will enable SBA to waive, for good cause shown, the restriction in the
Federal Debt Collection Procedures Act of 1990 prohibiting debtors on
whose property the United States has an outstanding judgment lien from
receiving disaster loan assistance from the Federal Government.
EFFECTIVE DATE: This regulation is effective on May 8, 1995.
FOR FURTHER INFORMATION CONTACT:
Bernard Kulik at 202/205-6734, Associate Administrator for Disaster
Assistance, U.S. Small Business Administration, 409 Third Street SW.,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The Federal Debt Collection Procedures Act
of 1990 (28 U.S.C. 3201(e)) provides that a debtor who owns property
which is subject to a judgment lien for a debt owed to the United
States shall not be eligible to receive any grant or loan which is
made, insured, guaranteed or financed directly or indirectly by the
United States. It also provides that such debtor shall not be eligible
to receive funds directly from the Federal Government in any program,
except funds to which the debtor is entitled as beneficiary, until the
judgment is paid in full or otherwise satisfied. However, the statute
permits any agency responsible for such grants or loans to promulgate
regulations to allow for waivers of this restriction. As an agency
authorized to provide several forms of assistance proscribed by this
restriction, including disaster loan assistance and other types of
direct and guaranteed loans, SBA also has the waiver authority
conferred by the statute.
SBA recognizes that disaster losses may strain the financial
resources of responsible debtors to such extent as to prevent them from
meeting their financial obligations to the United States. Such losses
also may prevent debtors who have been complying with agreements to
satisfy one or more judgments in favor of the United States from
continuing to comply with the terms of those agreements. Therefore, by
publication in the Federal Register on June 29, 1994, 59 FR 33456, SBA
proposed to issue a regulation permitting it to waive the restriction
on eligibility for physical and economic injury disaster assistance
provided under section (7)(b) (1) and (2) of the Small Business Act, 15
U.S.C. 636(b) (1) and (2), where there exists good cause to do so.
The proposed regulation applied to applicants for disaster
assistance who have outstanding judgment liens in favor of SBA or in
favor of other agencies. It identified two nonexclusive instances in
which good cause will ordinarily be found to exist, both of them
involving adverse circumstances occasioned by the disaster for which
the assistance is sought.
Waivers would be granted denying the eligibility review of an
application for either physical or economic injury disaster assistance,
but only upon a demonstration of good cause by the applicant. Examples
of good cause include, but are not limited to: (1) Delinquencies
leading to a judgment lien, which are caused by a disaster, whether the
original debt was incurred prior to or after the disaster, and (2)
defaults in any agreement to satisfy a judgment lien, which are caused
by a disaster, whether the agreement has been made with SBA, another
creditor agency, or any other Federal entity holding the lien, such as
the Resolution Trust Corporation or the Federal Deposit Insurance
Corporation. In the case of agreements with other agencies, SBA will
not waive the restriction on eligibility until the appropriate Federal
entity has certified that the debtor had made adhering satisfactorily
to the terms of the agreement prior to the commencement date of the
disaster.
The proposed regulation contemplates that SBA's Associate
Administrator for Disaster Assistance, or his/her designee, will make
the determination as to whether good cause for waiving the restriction
has been demonstrated by the applicant. Although such determinations
are subject to the provisions of Sec. 123.12 governing requests for
reconsideration, no appeal from an adverse determination is
contemplated.
SBA received no comments from the public in response to the June
29, 1994, Notice of Proposed Rulemaking. Therefore, by this
publication, SBA is finalizing the rule as proposed.
Compliance With Executive Orders 12866, 12612 and 12778; the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq.; and The Paperwork Reduction Act,
44 U.S.C. CH 35
SBA submitted this final rule to the Office of Management and
Budget for purposes of Executive Order 12866. [[Page 22496]]
For purposes of Executive Order 12612, SBA certifies that this
final rule would not have Federalism implications warranting the
preparation of a Federalism assessment.
For purposes of Executive Order 12778, SBA certifies that the final
rule is drafted, to the extent practicable, in accordance with the
standards set forth in section 2 of that Order.
For purposes of the Regulatory Flexibility Act, SBA certifies that
this final rule will not have a significant economic effect on a
substantial number of small entities because, even though it would
render previously ineligible applicants eligible for disaster loan
assistance, SBA does not expect the number of affected applicants to be
significant.
For purposes of the Paperwork Reduction Act, SBA certifies that
this final rule will not impose a new recordkeeping or reporting
requirement.
List of Subjects in 13 CFR Part 123
Disaster, Physical disaster and economic injury loans.
Pursuant to the authority conferred in section 5(b)(6) of the Small
Business Act (15 U.S.C. 634(b)(6)), SBA amends Part 123, Chapter I,
Title 13, Code of Federal Regulations, as follows:
PART 123--DISASTER--PHYSICAL DISASTER AND ECONOMIC INJURY LOANS
1. The authority citation for part 123 is revised to read as
follows:
Authority: 15 U.S.C. 634(b)(6), 636(b), (c), (f).
2. Section 123.2 is amended by adding the following text at the end
to read as follows:
Sec. 123.2 Introduction.
* * * Under the Federal Debt Collection Procedures Act of 1990 (28
U.S.C. 3201(e)), a debtor who owns property which is subject to an
outstanding judgment lien for a debt owed to the United States is not
eligible to receive certain assistance from the Federal Government,
including physical and economic injury disaster loans covered by this
part. This restriction against receiving disaster loans may be waived
by SBA's Associate Administrator for Disaster Assistance or his/her
designee (deciding official) upon a demonstration of good cause by the
applicant for assistance. Good cause may be demonstrated by a credible
representation under oath, which convinces the deciding official that
it is more likely than not that the disaster for which such assistance
is requested caused the delinquency upon which the judgment is based,
whether the debt was incurred before or after the commencement date for
such disaster; or such disaster prevented the debtor from adhering to
the terms of an agreement to satisfy the judgment lien, made with SBA
or another agency in whose favor the judgment was entered or with any
other Federal Government entity as may be appropriate, provided that
such agency or entity certifies that, prior to the commencement date
for the disaster, the debtor had been adhering satisfactorily to the
terms of its agreement; or such other circumstances exist as may
demonstrate good cause sufficient to waive the statutory prohibition.
Subject to the provisions of Sec. 123.12 concerning requests for
reconsideration, a determination of the Associate Administrator for
Disaster Assistance or his/her designee under this section is a final,
nonappealable decision of the SBA.
Dated: March 14, 1995.
Philip Lader,
Administrator.
[FR Doc. 95-11155 Filed 5-5-95; 8:45 am]
BILLING CODE 8025-01-M