E6-18246. Administration and Disaster Loan Program

AGENCY:

Small Business Administration (SBA).

ACTION:

Direct final rule.

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: [phone]; (3) E-mail: [e-mail]; 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; [phone]; fax [phone]; or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

A. Background

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

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

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

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.

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

§ 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

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

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

§ 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. * * *

5. Amend § 123.13 by revising paragraphs (c), (e), and (f) to read as follows:

§ 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.