[Federal Register Volume 71, Number 210 (Tuesday, October 31, 2006)]
[Rules and Regulations]
[Pages 63674-63676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-18246]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 101 and 123

RIN 3245-AF42


Administration and Disaster Loan Program

AGENCY: Small Business Administration (SBA).

ACTION: Direct final rule.

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SUMMARY: The purpose of this direct final rule is to amend SBA 
regulations to reflect the new structure of the Office of Disaster 
Assistance (ODA) following an office reorganization. This rule amends 
the regulation to name and list five disaster centers, four that serve 
the public (disaster assistance customer service center, disaster 
assistance processing and disbursement center, disaster assistance 
field operations center east, disaster assistance field operations 
center west) and one that provides personnel and administrative 
services to the other disaster centers and also houses the Disaster 
Credit Management System (DCMS) operations center, the field inspection 
team headquarters, and the administrative law function (disaster 
assistance personnel and administrative services center). This rule 
also amends the regulation by making conforming amendments to existing 
regulations on SBA's Disaster Loan Program.

DATES: This rule is effective November 30, 2006 without further action, 
unless adverse comment is received on or before the effective date. If 
adverse comment is received, SBA will publish a timely withdrawal of 
the rule in the Federal Register.

ADDRESSES: You may submit comments identified by RIN 3245-AF42 by any 
of the following methods (1) Mail/Hand Delivery: James E. Rivera, 
Deputy Associate Administrator for Disaster Assistance, 409 3rd Street, 
SW., Washington, DC 20416; (2) Fax: (202) 205-7728; (3) E-mail: 
[email protected]; or Federal eRulemaking Portal: http://www.regulations.gov, following the specific instructions for submitting 
comments.

FOR FURTHER INFORMATION CONTACT: James E. Rivera, Deputy Associate 
Administrator for Disaster Assistance, 409 3rd Street, SW., Washington, 
DC 20416; (202) 205-6734; fax (202) 205-7728; or e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    Prior to the office reorganization, ODA was comprised of four 
disaster

[[Page 63675]]

area offices located in Niagara Falls, NY, Sacramento, CA, Atlanta, GA, 
and Fort Worth, TX. Disaster area offices were managed by Area 
Directors who reported to the Deputy Associate Administrator for 
Disaster Assistance at SBA Headquarters in Washington, DC. Each area 
office responded to declared disasters in a defined geographic area of 
the country primarily by providing loan services to disaster victims. 
Each area office was a full-service loan processing facility with 
electronic and paper-based systems operated and monitored by staff in 
each office. Those systems were not web-enabled or integrated. As a 
result, the Disaster area offices may have adopted varying standards 
and procedures for processing loans.

B. Office Reorganization

    In 2004, following the introduction of a 5-year strategic plan and 
the development of a paperless, web-enabled loan processing system, 
known as the DCMS system, ODA began to study the best methods of 
program delivery given the benefits the new loan processing system 
would bring to bear. Following the year and a half study of ODA's 
program, its processes and organization, SBA decided to reorganize the 
office and realign its employees and space to operate more efficiently 
and better serve its customers, the disaster victims. The 
reorganization is substantially complete, and SBA aims to fully 
complete it by the end of fiscal year 2006. ODA is maintaining offices 
in its four current locations to take full advantage of the existing 
infrastructure in each location, and the existing personnel resources 
(the Niagara Falls, NY disaster area office relocated to Buffalo, NY). 
Those four disaster centers are: disaster assistance customer service 
center, disaster assistance processing and disbursement center, 
disaster assistance field operations center east, and disaster 
assistance field operations center west. There is a fifth center 
located in Herndon, VA which serves as a personnel and administrative 
services center for the other disaster centers. As part of the 
reorganization, SBA is also implementing DCMS, a fully web-enabled 
technology, which allows ODA to process disaster loans anywhere at any 
time. DCMS ensures continuity of ODA's loan processing capabilities 
even if operations at the disaster assistance processing and 
disbursement center in Ft. Worth are disrupted.

C. Five Disaster Centers

    The location of each center and general descriptions of their 
functions are listed below. Each center will be managed by a Center 
Director who reports to the Deputy Associate Administrator for Disaster 
Assistance at SBA Headquarters.

1. Customer Support Center

    The customer support center located in Buffalo, NY performs the 
following functions: tele-registration (referrals from Federal 
Emergency Management Agency (FEMA)), mail-out (distribution of 
application materials to disaster victims), and customer support 
(telephonic and electronic contact for disaster victims nationwide to 
obtain application and loan status information). This will eliminate 
the need for four independent phone banks, four sets of technology 
supporting them, and four sets of customer support personnel operating 
them.

2. Processing and Disbursement Center

    All loan processes, including application entry and scanning, loan 
processing, and loan closing and disbursement, previously performed 
independently by the four area offices, are now performed in one 
central processing and disbursement center located in Ft. Worth, TX. 
SBA anticipates that this new approach will achieve efficiencies of 
scale, consistency in the loan processing, closing and disbursement 
functions, consistent application of SBA policy, and the elimination of 
varying processing approaches and standards.

3. Field Operations Centers East and West

    Field operations centers east and west, located in Atlanta, GA and 
Sacramento, CA respectively, manage and coordinate ODA field response 
and all field resources necessary to implement the disaster loan 
program. They also respond to congressional inquiries and perform 
public information functions. Additionally, they respond to requests by 
State governors for SBA disaster declarations. Such requests are to be 
submitted to the field operations center serving the jurisdiction in 
which the disaster occurred. The addresses, phone numbers, and 
jurisdictions served by the field operations centers are published in 
the Federal Register. Establishing two field operations centers will 
result in greater efficiencies and economies of scale by stabilizing 
the workload that, due to the intermittent nature of disaster field 
work, had been variable and uneven under the old structure.

4. Personnel and Administrative Support Center

    This center, located in Herndon VA, provides administrative, 
personnel, and administrative law functions for the Disaster Assistance 
Program. It also houses the Disaster Credit Management System 
operations center and the Field Inspection Team headquarters. This 
center consolidates functions which were performed separately in the 
four areas, thus leading to greater efficiencies and economies of 
scale.

D. Amendments to SBA Regulations

    SBA is amending Part 101 to name and list the five disaster 
centers, four that serve the public, and one that provides personnel, 
administrative, computer operations, and other services to the other 
disaster centers. SBA is amending Part 123 by making conforming 
amendments to existing regulations on SBA's Disaster Loan Program.

E. Direct Final Rule

    SBA is publishing this regulation as a direct final rule because it 
believes the rule is non-controversial since the changes are largely 
transparent to the public and few external parties will be affected. In 
addition, the costs of the transformation are expected to be offset by 
the savings in overhead and travel costs. SBA believes that this rule 
will not elicit any significant adverse comments.

Compliance With Executive Orders 13132, 12988 and 12866, the Regulatory 
Flexibility Act (5 U.S.C. 601-612), and the Paperwork Reduction Act (44 
U.S.C. Ch.35)

    This direct final rule will not have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government. Therefore, for the purposes of Executive 
Order 13132, SBA determines that this direct final rule has no 
federalism implications warranting preparation of a federalism 
assessment.
    The Office of Management and Budget (OMB) has determined that this 
rule does not constitute a ``significant regulatory action'' under 
Executive Order 12866.
    This direct final rule 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. 
This rule does not have retroactive or preemptive effect.

[[Page 63676]]

    SBA has determined that this direct final rule does not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act, 44 U.S.C., Chapter 35.
    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires 
administrative agencies to consider the effect of their actions on 
small entities, small non-profit enterprises, and small local 
governments. Pursuant to the RFA, when an agency issues a rulemaking, 
the agency must prepare a regulatory flexibility analysis which 
describes the impact of the rule on small entities. However, section 
605 of the RFA allows an agency to certify a rule, in lieu of preparing 
an analysis, if the rulemaking is not expected to have a significant 
economic impact on a substantial number of small entities. Within the 
meaning of RFA, SBA certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule is only changing the designations of the agency's disaster 
offices and making conforming amendments to existing regulations on 
SBA's Disaster Loan Program.

List of Subjects in 13 CFR Parts 101 and 123

13 CFR Part 101

    Authority delegations, Organization and function.

13 CFR Part 123

    Disaster assistance, Loan programs--business, Small businesses.

0
For the reasons stated in the preamble, the Small Business 
Administration amends parts 101 and 123 of title 13 of the Code of 
Federal Regulations as follows:

PART 101--ADMINISTRATION

0
1. The authority citation for part 101 continues to read as follows:

    Authority: 5 U.S.C. 552 and App. 3, secs. 2, 4(a), 6(a), and 
9(a)(1)(T); 15 U.S.C. 633, 634, 687; 31 U.S.C. 6506; 44 U.S.C. 3512; 
E.O. 12372 (July 14, 1982), 47 FR 30959, 3 CFR, 1982 Comp., p. 197, 
as amended by E.O. 12416 (April 8, 1983), 48 FR 15887, 3 CFR, 1983 
Comp., p. 186.


0
2. Revise Sec.  101.104(d) to read as follows:


Sec.  101.104  What are the functions of SBA's field offices?

* * * * *
    (d) Disaster assistance offices. The Office of Disaster Assistance 
maintains five permanent field offices which are named according to the 
particular functions they perform in the disaster loan making process. 
The office names are: Disaster Assistance Customer Service Center, 
Disaster Assistance Processing and Disbursement Center, Disaster 
Assistance Field Operations Center East, Disaster Assistance Field 
Operations Center West, and the Disaster Assistance Personnel and 
Administrative Services Center. Each office is managed by a Center 
Director who reports to the Deputy Associate Administrator for Disaster 
Assistance. The offices provide loan services to victims of declared 
disasters, or support the efforts of the other offices to do so. 
Temporary disaster offices may be established in areas where disasters 
have occurred.
* * * * *

PART 123--DISASTER LOAN PROGRAM

0
3. The authority citation for part 123 continues to read as follows:

    Authority: 15 U.S.C. 634(b)(6), 636(b), 636(c); Pub. L. 102-395, 
106 Stat. 1828, 1864; and Pub. L. 103-75, 107 Stat. 739; and Pub. L 
106-50, 113 Stat. 245


0
4. Amend Sec.  123.3 by revising paragraphs (a)(3)(iii) and (a)(5) to 
read as follows:


Sec.  123.3  How are disaster declarations made?

    (a) * * *
    (3) * * *
    (iii) The Governor of the State in which the disaster occurred 
submits a written request to SBA for a physical disaster declaration by 
SBA (OMB Approval No. 3245-0121). This request should be delivered to 
the Disaster Assistance Field Operations Center serving the 
jurisdiction within 60 days of the date of the disaster. The addresses, 
phone numbers, and jurisdictions served by the field operations centers 
are published in the Federal Register.
    (4) * * *
    (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 must be delivered (with 
supporting documentation) to the Disaster Assistance Field Operations 
Center serving the jurisdiction within 120 days of the disaster 
occurrence. * * *
0
5. Amend Sec.  123.13 by revising paragraphs (c), (e), and (f) to read 
as follows:


Sec.  123.13  What happens if my loan application is declined?

* * * * *
    (c) Any request for reconsideration must be received by SBA's 
Disaster Assistance Processing and Disbursement Center (DAPDC) within 
six months of the date of the decline notice. After six months, a new 
loan application is required.
    (d) * * *
    (e) If SBA declines your application a second time, you have the 
right to appeal in writing to the Director, Disaster Assistance 
Processing and Disbursement Center. All appeals must be received by the 
processing center within 30 days of the decline action. Your request 
must state that you are appealing, and must give specific reasons why 
the decline action should be reversed.
    (f) The decision of the Director, DAPDC, is final unless:
    (1) The Director, DAPDC, does not have the authority to approve the 
requested loan;
    (2) The Director, DAPDC, refers the matter to the AA/DA; or
    (3) The AA/DA, upon a showing of special circumstances, requests 
that the Director, DAPDC, forward the matter to him or her for final 
consideration. Special circumstances may include, but are not limited 
to, policy considerations or alleged improper acts by SBA personnel or 
others in processing the application.

    Dated: October 24, 2006.
Steven C. Preston,
Administrator.
[FR Doc. E6-18246 Filed 10-30-06; 8:45 am]
BILLING CODE 8025-01-P