[Federal Register Volume 60, Number 113 (Tuesday, June 13, 1995)]
[Proposed Rules]
[Pages 31121-31122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14372]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 60, No. 113 / Tuesday, June 13, 1995 /
Proposed Rules
[[Page 31121]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 123
Disaster--Physical Disaster and Economic Injury Loans
AGENCY: Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The Small Business Administration (SBA) is proposing to amend
its regulations governing both physical and economic injury disaster
assistance to make clear that businesses primarily engaged in
agriculture are not eligible for such assistance and that such
assistance may not be used to further the alleviation of physical or
economic injury to property associated with agricultural enterprise
caused by a disaster.
DATES: SBA will accept public comments on this proposal through July
13, 1995.
ADDRESSES: Comments should be submitted to Bernard Kulik, Associate
Administrator for Disaster Assistance, Small Business Administration,
409 Third Street, SW., 6th Floor, Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT:
Bernard Kulik, Office of Disaster Assistance, (202) 205-6734.
SUPPLEMENTARY INFORMATION: In 1986 section 7(b) of the Small Business
Act (Act) (15 U.S.C. 636(b)) was amended to provide that physical and
economic injury disaster loan assistance provided by the Small Business
Administration (SBA) under that section should not be available to
agricultural enterprises. The term agricultural enterprise is defined
elsewhere in the Act to mean a business engaged in the production of
food and fiber, ranching, and raising of livestock, aquaculture, and
all other farming and agricultural related industries. See section
18(b)(1) of the Act, 15 U.S.C. 647(b)(1). SBA has historically
interpreted this provision in a manner that contemplates that this
definition is intended to cover small businesses primarily engaged in
the prescribed activities. This position is consistent with SBA's size
standards related definition of a small business for purpose of
eligibility for disaster assistance. (See 13 CFR 121.802). However, the
word ``primarily'' is absent from the present regulatory definition of
agricultural enterprise in the SBA regulations governing disaster
assistance. (See 13 CFR 123.17). This proposed rule, if adopted, would
conform the definition of agricultural enterprise with existing policy
and with regulations governing size standards by requiring that a
concern be primarily engaged in the prescribed activities in order to
be construed as an agricultural enterprise.
The effect of this change would be to make clear that a small
business which is engaged in multiple activities, including those
relevant to agricultural enterprise would be ineligible for disaster
assistance under section 7(b) of the Act if its primary activity as
judged under the criteria imposed by 13 CFR 123, et seq., is
agricultural enterprise. If its primary activity as judged under this
standard is an eligible activity and is not agricultural activity, a
business would be eligible for disaster assistance.
This proposed regulation, if adopted, would also amend 13 CFR
Secs. 123.3 and 123.41 to make clear that it is SBA's position that the
proceeds of disaster assistance made to eligible small businesses may
not be used in conjunction with repair or replacement or alleviation of
economic injury relevant to real or personal property used in the
production of food and fiber, ranching and raising of livestock,
aquaculture and all other farming and agricultural related industries.
This change would literally prohibit proceeds of SBA disaster
assistance made to otherwise eligible businesses from being used for
purposes associated with agricultural enterprise with which it might be
secondarily engaged. Thus a business eligible for disaster assistance
which is primarily engaged in eligible activity and secondarily engaged
in agricultural enterprise would be prohibited under this regulation,
if adopted, from using the proceeds of such assistance for purposes
relevant to the agricultural enterprise.
Compliance With Executive Orders 12612, 12778, and 12866, the
Regulatory Flexibility Act and the Paperwork Reduction Act
For purposes of Executive Order 12866, SBA certifies that this rule
will not have an annual economic effect in excess of $100 million,
result in a major increase in costs for individuals or governments, or
have a significant adverse effect on competition and, therefore, would
not constitute a major or significant rule.
For purposes of Executive Order 12612, SBA certifies that this rule
will not have federalism implications warranting the preparation of a
Federalism assessment.
For purposes of Executive Order 12778, SBA certifies that this 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 rule will not have a significant economic effect on a substantial
number of small entities for the same reason that it is not a major or
significant rule.
For purposes of the Paperwork Reduction Act, SBA certifies that
this rule will not impose a new recordkeeping or reporting requirement.
(Catalogue of Federal Domestic Assistance Programs, Nos. 59.002,
59.008)
Lists of Subjects in 13 CFR Part 123
Disaster assistance, Loan programs--business, Small businesses.
For the reasons set out above, pursuant to sections 5(b)(6),
7(b)(1), and 7(c)(6) of the Small Business Act, Title 13, Part 123 of
the Code of Federal Regulations, is amended to read as follows:
1. The authority citation for Part 123 would continue to read as
follows:
Authority: Sections 5(b)(6), 7(b), (c), (f) of the Small
Business Act; Pub. L. 102-395, 106 Stat. 1828, 1864; and Pub. L.
103-75, 107 Stat. 739 (15 U.S.C. 634(b)(6), 636(b), (c), (f).
2. Section 123.17 would be amended by inserting the term
``primarily'' before the term ``engaged'' in the first sentence.
3. Section 123.3 would be amended by adding a new paragraph (b)(8)
in the definition of ``eligible physical loss'' to read as follows:
Sec. 123.3 Definitions.
* * * * * [[Page 31122]]
Eligible Physical Loss:
* * * * *
(b) ***
(8) If the property damaged is property used in the production of
food and fiber, ranching and raising livestock, aquaculture and all
other farming and agricultural related industries.
* * * * *
4. Section 123.41 would be amended by adding the following sentence
at the end of paragraph (g)(1) to read as follows:
Sec. 123.41 General provisions.
* * * * *
(g) Use of Proceeds. (1) *** Proceeds of loans under this subpart
shall not be used for the purpose of alleviating economic injury or
providing working capital in conjunction with real or personal property
used in the production of food and fiber, ranching and raising
livestock, aquaculture and all other farming and agricultural related
industries.
* * * * *
Dated: May 2, 1995.
Philip Lader,
Administrator.
[FR Doc. 95-14372 Filed 6-12-95; 8:45 am]
BILLING CODE 8025-01-M
