[Federal Register Volume 85, Number 44 (Thursday, March 5, 2020)]
[Rules and Regulations]
[Pages 12862-12864]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03657]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 123
RIN 3245-AH12
Regulatory Reform Initiative: Disaster Loan Program
AGENCY: U. S. Small Business Administration.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is removing from
the Code of Federal Regulations (CFR) 20 regulations that are no longer
necessary because the programs they govern are no longer in effect. The
rule will remove all regulations applicable to two subparts: Pre-
Disaster Mitigation Loans and Economic Injury Disaster Loans as a
Result of the September 11, 2001 Terrorist Attacks. The removal of
these regulations will assist the public by simplifying SBA's
regulations in the CFR.
DATES: This rule is effective on June 3, 2020 without further action,
unless significant adverse comment is received by May 4, 2020. If
significant 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-AH12 by any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail or Hand Delivery/Courier: Jerome Edwards, Director,
Program Policy and Evaluation, Office of Disaster Assistance, Small
Business Administration, 409 Third Street SW, Washington, DC 20416.
SBA will post all comments on http://www.regulations.gov. If you
wish to submit confidential business information (CBI), as defined in
the User Notice at http://www.regulations.gov, please submit the
information to Jerome Edwards, Director, Program Policy and Evaluation,
Office of Disaster Assistance, Small Business Administration, 409 Third
Street SW, Washington, DC 20416, or send an email to
[email protected]. 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 on whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Jerome Edwards, Director, Program
Policy and Evaluation, (202) 205-6734, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
A. Pre-Disaster Mitigation Loans, Part 123, Subpart E
Pre-disaster mitigation loans were authorized by Congress in 1999
to encourage disaster preparedness rather than reliance on response and
recovery. The program was authorized for five fiscal years (2000-2004).
During that time, SBA made four loans under the program. SBA published
regulations implementing the Pre-Disaster Mitigation Loan program on
October 7, 2002 (67 FR 62337). SBA is now removing those regulations as
the program is no longer authorized.
B. Economic Injury Disaster Loans as a Result of the September 11, 2001
Terrorist Attacks, Part 123, Subpart G
In response to the September 11, 2001, terrorist attacks, SBA
published regulations authorizing economic injury disaster loans
outside the declared disaster areas to small businesses that suffered
economic injury as a direct result of the attacks or any related
Federal action following the attacks. The rule, published on October
22, 2001 (66 FR 53331), outlined the eligibility criteria and loan
terms. On June 24, 2002, SBA extended the deadline for businesses to
apply for the loans from May 22, 2002 to September 30, 2002 (67 FR
42594). SBA made 4,996 loans under the program. SBA is now removing
these regulations as they are now obsolete.
C. Executive Order 13771
On January 30, 2017, President Trump signed Executive Order 13771,
Reducing Regulation and Controlling Regulatory Costs, which, among
other objectives, is intended to ensure that an agency's regulatory
costs are prudently managed and controlled so as to minimize the
compliance burden imposed on the public. For every new regulation an
agency proposes to implement, unless prohibited by law, this Executive
order requires the agency to (i) identify at least two existing
regulations that the agency can cancel; and (ii) use the cost savings
from the cancelled regulations to offset the cost of the new
regulation.
D. Executive Order 13777
On February 24, 2017, the President issued Executive Order 13777,
Enforcing the Regulatory Reform Agenda, which further emphasized the
goal of the Administration to alleviate the regulatory burdens placed
on the public. Under Executive Order 13777, agencies must evaluate
their existing regulations to determine which ones should be repealed,
replaced, or modified. In doing so, agencies should focus on
identifying regulations that, among other things: Eliminate jobs or
inhibit job creation; are outdated, unnecessary or ineffective; impose
costs that exceed benefits; create a serious inconsistency or otherwise
interfere with regulatory reform initiatives and policies; or are
associated with Executive orders or other Presidential directives that
have been rescinded or substantially modified. SBA has engaged in this
process and has identified the regulations in this rulemaking as
appropriate for removal in accordance with Executive Order 13777.
II. Section by Section Analysis
A. Pre-Disaster Mitigation Loans, Part 123, Subpart E
SBA is removing subpart E from part 123 of SBA's regulations
because the regulations are no longer necessary. The regulations at 13
CFR 123.400 through 123.412 describe eligibility requirements,
allowable uses of proceeds, loan terms, and application procedures for
Pre-Disaster Mitigation Loans. Specifically, the provisions to be
removed are: (1) Sec. 123.400 What is the Pre-Disaster Mitigation Loan
Program?; (2) Sec. 123.401 What types of mitigation measures can your
business include in
[[Page 12863]]
an application for a pre-disaster mitigation loan?; (3) Sec. 123.402
Can your business include its relocation as a mitigation measure in an
application for a pre-disaster mitigation loan?; (4) Sec. 123.403 When
is your business eligible to apply for a pre-disaster mitigation loan?;
(5) Sec. 123.404 When is your business ineligible to apply for a pre-
disaster mitigation loan?; (6) Sec. 123.405 How much can your business
borrow with a pre-disaster mitigation loan?; (7) Sec. 123.406 What is
the interest rate on a pre-disaster mitigation loan?; (8) Sec. 123.407
When does your business apply for a pre-disaster mitigation loan and
where does your business get an application?; (9) Sec. 123.408 How
does your business apply for a pre-disaster mitigation loan?; (10)
Sec. 123.409 Which pre-disaster mitigation loan requests will SBA
consider for funding?; (11) Sec. 123.410 Which loan requests will SBA
fund?; (12) Sec. 123.411 What if SBA determines that your business
loan request meets the selection criteria of Sec. 123.409 but SBA is
unable to fund it because SBA has already allocated all program funds?;
and (13) Sec. 123.412 What happens if SBA declines your business' pre-
disaster mitigation loan request?
The statutory authority for Pre-Disaster Mitigation Loans expired
in 2004; therefore, SBA is no longer making these loans. There are no
outstanding loans.
B. Economic Injury Disaster Loans as a Result of the September 11, 2001
Terrorist Attacks, Part 123, Subpart G
SBA is also removing subpart G from part 123 of SBA's regulations
because the regulations are no longer necessary. The regulations at 13
CFR 123.600 through 123.606 describe eligibility requirements,
allowable uses of proceeds, loan terms, and application procedures for
economic injury disaster loans made under Subpart G. Specifically, the
provisions to be removed are: (1) Sec. 123.600 Are economic injury
disaster loans under this subpart limited to the geographic areas
contiguous to the declared disaster areas?; (2) Sec. 123.601 Is my
business eligible to apply for an economic injury disaster loan under
this subpart?; (3) Sec. 123.602 When would my business not be eligible
to apply for an economic injury disaster loan under this subpart?; (4)
Sec. 123.603 What is the interest rate on an economic injury disaster
loan under this subpart?; (5) Sec. 123.604 How can my business spend
my economic injury disaster loan under this subpart?; (6) Sec. 123.605
How long do I have to apply for a loan under this subpart?; and (7)
Sec. 123.606 May I request an increase in the amount of an economic
injury disaster loan under this subpart?
This loan program was intended to specifically address the unique
injury caused by the September 11, 2001 terrorist attacks. Since the
deadline for businesses to apply for the loans was September 30, 2002
(67 FR 42594), SBA is no longer making these loans. Therefore, the
regulations are no longer necessary. There are approximately 478
outstanding loans; existing borrowers can refer to their loan documents
for information on loan terms.
C. Conforming Amendment
SBA is removing regulatory text that cross-references the
regulations being removed by this rule. Specifically, this conforming
change removes the text in Sec. 123.21 that references pre-disaster
mitigation loans.
D. Administrative Procedure Act--Direct Final Rule
SBA is publishing this rule as a direct final rule because SBA
views this action as a non-controversial administrative action that
relates solely to expired SBA programs. This rule will be effective on
the date shown in the DATES section unless SBA receives any significant
adverse comments on or before the deadline for comments set forth in
the DATES section. Significant adverse comments are comments that SBA
determines provide strong justifications for why the rule should not be
adopted or for changing the rule. If SBA receives any significant
adverse comments, SBA will publish a document in the Federal Register
withdrawing this rule before the effective date.
III. Compliance With Executive Orders 12866, 13771, 12988, and 13132,
the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612)
A. Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule does not constitute a significant regulatory action for purposes
of Executive Order 12866 and is not a major rule under the
Congressional Review Act, 5 U.S.C. 801, et seq.
B. Executive Order 13771
This direct final rule is an Executive Order 13771 deregulatory
action with an annualized net savings of $45,245 and a net present
value of $646,355, both in 2016 dollars. This rule will remove
information, which will save potential applicants time in reading and
inquiring about these obsolete programs and reduce confusion around
whether applications are being accepted.
Approximately 109,131 applicants apply for SBA disaster assistance
loans per year on average, based on data from 2014-2018. These
calculations assume 3% of disaster loan applicants read the regulations
per year (or approximately 3,300 applicants) and that the removal of
these obsolete regulations would save each applicant 30 minutes of time
otherwise spent reviewing or inquiring about non-existent programs.
This time is valued at $28.80 per hour--the median wage of a full-time
working adult based on 2018 Bureau of Labor Statistics (BLS) data,
adding 30% more for benefits. The removal of these regulations produces
a total savings per year of $47,145 in current dollars.
C. 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 retroactive or preemptive effect.
D. 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.
E. Paperwork Reduction Act
The SBA has determined that this final rule does not affect any
existing collection of information.
F. Regulatory Flexibility Act
When an agency issues a rule, the Regulatory Flexibility Act (RFA)
requires the agency to prepare a final regulatory flexibility analysis
(FRFA), which describes whether the rule will have a significant
economic impact on a substantial number of small entities. However,
Section 605 of the RFA allows an agency to certify a rule, in lieu of
preparing a FRFA, if the rulemaking is not expected to have a
significant economic impact on a substantial number of small entities.
This direct final rule is removing descriptions of obsolete
programs in the current regulations, which will reduce confusion and
the time required to read and/or inquire about obsolete programs.
Approximately 109,131 applicants apply for SBA disaster assistance
loans per year, on average based on data from
[[Page 12864]]
2014-2018. The net savings to potential disaster loan applicants is
$47,145 per year in current dollars, or less than a dollar per
applicant.
Therefore, SBA hereby certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
List of Subjects in 13 CFR Part 123
Disaster assistance, Loan programs-business, Small businesses,
Terrorism.
Accordingly, for the reasons stated in the preamble, SBA is
amending 13 CFR part 123 as follows:
PART 123--DISASTER LOAN PROGRAM
0
1. The authority citation for part 123 is revised to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 636(d), and 657n.
Sec. 123.21 [Amended]
0
2. Amend Sec. 123.21 by removing the last sentence.
Subpart E--[Removed and Reserved]
0
3. Remove and reserve subpart E, consisting of Sec. Sec. 123.400
through 123.412.
Subpart G--[Removed and Reserved]
0
4. Remove and reserve subpart G, consisting of Sec. Sec. 123.600
through 123.606.
Dated: February 11, 2020.
Jovita Carranza,
Administrator.
[FR Doc. 2020-03657 Filed 3-4-20; 8:45 am]
BILLING CODE 8025-01-P