# Disaster Loan Program > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A97-30847 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** November 25, 1997 - **Citation:** 62 FR 62707 ## Text SMALL BUSINESS ADMINISTRATION 13 CFR Part 123 Disaster Loan Program AGENCY: Small Business Administration (SBA). ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: Under this proposed rule, an SBA disaster loan borrower could request an increase in a disaster loan within two years after the loan was approved. The increase must be used to cover eligible damages resulting from events that occurred after the loan was approved and were beyond the borrower's control. Under the proposed rule, the SBA Associate Administrator for Disaster Assistance could waive the two year limit because of extraordinary circumstances. DATES: Comments must be submitted on or before December 26, 1997. ADDRESSES: Comments should be mailed to Bernard Kulik, Associate Administrator for Disaster Assistance, Small Business Administration, 409 Third Street, S.W., Washington, D.C. 20416. FOR FURTHER INFORMATION CONTACT: Bernard Kulik, 202/205-6734. SUPPLEMENTARY INFORMATION: SBA makes thousands of physical and economic injury disaster loans to repair or replace damaged property or to help a business recover from economic injury. Borrowers must use such loans only to help them recover from the effects of a specific disaster. Borrowers may request increases in their loans after the initial disaster loans were made and, where appropriate, SBA will approve the request. Under this proposed rule, SBA is defining the circumstances under which a borrower can request an increase and limiting the time period for the request to two years. The SBA Associate Administrator for Disaster Assistance (AA/DA) would have the authority to waive the two year limit for extraordinary and unforeseeable circumstances. Under the proposed rule, a borrower of a disaster loan (whether physical or economic injury) could request an increase in the loan amount if the eligible cost of repair or replacement of damages increases because of events occurring after the loan approval that were beyond the borrower's control. For example, a borrower can request an increase of a physical disaster loan before the repair, renovation or reconstruction is completed if hidden damage is discovered or if official building codes changed since SBA approved the physical disaster loan. With respect to economic injury disaster loans, borrowers could request an increase in working capital if they could not resume business activity as quickly as planned because of events beyond their control. These examples, while not all inclusive, would support a borrower's request for an increase in the amount of a disaster loan. These kinds of events usually will be apparent within two years after SBA approves a disaster loan. However, in extraordinary circumstances, the proposed rule would permit the AA/DA to waive the two year limitation. Compliance With Executive Orders 12612, 12778, and 12866, the Regulatory Flexibility Act (5 U.S.C. 601, et seq.), and the Paperwork Reduction Act (44 U.S.C. Ch. 35) SBA certifies that this proposed rule does not constitute a significant rule within the meaning of Executive Order 12866 and 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. 601 et seq. It is not likely to have an annual economic effect of $100 million or more on the economy, result in a major increase in costs or prices, or have a significant adverse effect on competition or the United States economy. For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA certifies that this proposed rule contains no new reporting or recordkeeping requirements. For purposes of Executive Order 12612, SBA certifies that this proposed 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 the standards set forth in section 2 of that Order. (Catalog of Federal Domestic Assistance Programs, No. 59.012 and 59.008) List of Subjects in 13 CFR Part 123 Disaster assistance, Loan programs-business, Small Businesses. Accordingly, pursuant to the authority contained in section 5(b)(6) of the Small Business Act (15 U.S.C. 634(b)(6)), SBA proposes to amend part 123, chapter I, title 13, Code of Federal Regulations, as follows: PART 123--DISASTER LOAN ASSISTANCE 1. The authority citation for Part 123 would continue to read as follows: Authority: 15 U.S.C. 634(b)(6), 636(b), 636(c) and 636(f); Pub. L. 102-395, 106 Stat. 1828, 1864; and Pub. L. 103-75, 107 Stat. 739. 2. Sections 123.18, 123.19 and 123.20 would be added to read as follows: Sec. 123.18 Can I request an increase in the amount of a physical disaster loan? SBA will consider your request for an increase in your loan if you can show that the eligible cost of repair or replacement of damages increased because of events occurring after the loan approval that were beyond your control. An eligible cost is one which is [[Page 62708]] related to the disaster for which SBA issued the original loan. For example, if you discover hidden damage within a reasonable time after SBA approved your original disaster loan and before repair, renovation, or reconstruction is complete, you may request an increase. Or, if applicable building code requirements were changed since SBA approved your original loan, you may request an increase in your loan amount. Sec. 123.19 Can I request an increase in the amount of an economic injury loan? SBA will consider your request for an increase in the loan amount if you can show that the increase is essential for your business to continue and is based on events occurring after SBA approved your original loan which were beyond your control. For example, delays may have occurred beyond your control which prevent you from resuming your normal business activity in a reasonable time frame. Your request for an increase in the loan amount must be related to the disaster for which the SBA economic injury disaster loan was originally made. Sec. 123.20 How long do I have to request an increase in the amount of a physical disaster loan or an economic injury loan? You should request a loan increase as soon as possible after you discover the need for the increase, but not later than two years after SBA approved your physical disaster or economic injury loan. After two years, the SBA Associate Administrator for Disaster Assistance (AA/DA) may waive this limitation after finding extraordinary and unforeseeable circumstances. Dated: November 14, 1997. Aida Alvarez, Administrator. [FR Doc. 97-30847 Filed 11-24-97; 8:45 am] BILLING CODE 8025-01-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-30847. Public record. Not legal advice.