[Federal Register Volume 63, Number 170 (Wednesday, September 2, 1998)]
[Rules and Regulations]
[Pages 46644-46645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23658]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 123
Disaster Loan Program
AGENCY: Small Business Administration.
ACTION: Final rule.
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SUMMARY: The Small Business Administration (SBA) adopts as a final
rule, without change, the provisions of an interim final rule amending
its disaster loan rules. This final rule continues to ensure that when
a legal business entity is engaged in both agricultural enterprises and
non-agricultural business ventures, SBA can provide physical disaster
business loans to the non-agricultural portion which has been damaged
by floods and other catastrophes.
DATES: This rule is effective September 2, 1998.
FOR FURTHER INFORMATION CONTACT: Bernard Kulik, Associate Administrator
for Disaster Assistance, (202) 205-6734.
SUPPLEMENTARY INFORMATION: Section 2(e) of the Small Business Act (15
USC S 631(e)) (``Act'') states that the policy of the Congress is that
the Government aid and assist ``victims'' of floods and other
catastrophes. Section 2(g) of the Act provides that in its
administration of the disaster loan program, pursuant to section 7(b)
of the Act, SBA shall provide, ``to the maximum extent possible,''
assistance and counseling to disaster ``victims.'' In administering the
disaster loan program, SBA is precluded, by section 7(b) of the Act,
from assisting agricultural enterprises. As defined in section 18(b)(1)
of the Act, an ``agricultural enterprise'' is a business engaged in the
production of food and fiber, ranching, and raising of livestock,
aquaculture, and all other farming and agricultural related industries.
SBA previously provided physical disaster business loan assistance
only to business entities which were adversely affected by floods and
other catastrophes when the primary activity of the business entity was
non-agricultural. Thus, if a person or a single business entity
operated both
[[Page 46645]]
agricultural and non-agricultural enterprises, SBA would not assist any
part of the business entity that suffered damage if the primary
activity of the total entity was agricultural.
SBA reconsidered the statutory language above and re-evaluated its
position with respect to the ``primary activity rule'' which it
administratively applied. The Act requires SBA to assist ``victims'' of
floods and other catastrophes, without regard to the primary activity
of a total business entity. If the victim of a flood or other
catastrophe is a non-agricultural business venture, SBA should assist
that victim regardless of whether such business is a part of a larger
business entity whose primary activity is agricultural. Thus, if the
total business operation is comprised of a retail store and a ranch,
and the retail store is destroyed by a flood, SBA should offer physical
disaster assistance to the retail store even if the ranching operation
generated more revenue.
Accordingly, SBA promulgates this final rule to continue to permit
SBA to provide physical disaster business loan assistance to a non-
agricultural business venture within the total business entity if the
non-agricultural business has been damaged by a flood or other
catastrophe, regardless of the primary activity of the total business
entity. The rule also makes clear that the business entity can be a
sole proprietorship, corporation, limited liability company, or
partnership.
Compliance With Executive Orders 12612, 12778, and 12866, the
Regulatory Flexibility Act (15 U.S.C. S601, et seq.), and the
Paperwork Reduction Act (44 U.S.C. Ch. 35)
SBA certifies that this rule is not a significant rule within the
meaning of Executive Order 12866; it is not likely to have annual
economic effect of $100 million or more, result in a major increase in
costs or prices, or have a significant adverse effect on competition or
the United States economy. SBA also certifies that this rule will not
have a significant economic impact on a substantial number of small
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C.
S601 et seq. This rule makes eligible for physical disaster loans only
nonagricultural businesses that are part of a business entity that is
primarily agricultural and, therefore, does not meet the substantial
number of small businesses criterion anticipated by the Regulatory
Flexibility Act.
For purposes of the Paperwork Reduction Act (44 U.S.C. Ch 35), SBA
certifies that this final rule contains no new reporting or
recordkeeping requirements.
For purposes of Executive Order 12612, SBA certifies that this rule
has no 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 standards set
forth in Section 2 of that Order.
An interim final rule was published in the Federal Register on July
1, 1997 (62 FR 35337). An open comment period was provided for
interested persons to respond to the interim final rule. Since the date
of publication of the interim final rule, no comments were received.
Accordingly, the interim final rule is adopted without change as final.
List of Subjects in 13 CFR Part 123
Disaster assistance, Loan programs-business, Small businesses.
Accordingly, the interim final rule amending 13 CFR part 123 which
was published at 62 FR 35337 on July 1, 1997, is adopted as a final
rule without change.
Dated: July 8, 1998.
Aida Alvarez,
Administrator.
[FR Doc. 98-23658 Filed 9-1-98; 8:45 am]
BILLING CODE 8025-01-P
