[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR123.3]

[Page 324-325]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 123--DISASTER LOAN PROGRAM--Table of Contents
 
                           Subpart A--Overview
 
Sec. 123.3  How are disaster declarations made?

    (a) There are four ways in which disaster declarations are issued 
which make SBA disaster loans possible:
    (1) The President declares a Major Disaster, or declares an 
emergency, and authorizes Federal Assistance, including individual 
assistance (Assistance to Individuals and Households Program).
    (2) If the President declares a Major Disaster limited to public 
assistance only, a private nonprofit facility which provides non-
critical services under guidelines of the Federal Emergency Management 
Agency (FEMA) must first apply to SBA for disaster loan assistance for 
such non-critical services before it could seek grant assistance from 
FEMA.
    (3) SBA makes a physical disaster declaration, based on the 
occurrence of at least a minimum amount of physical damage to buildings, 
machinery, equipment, inventory, homes and other property. Such damage 
usually must meet the following tests:
    (i) In any county or other smaller political subdivision of a State 
or U.S. possession, at least 25 homes or 25 businesses, or a combination 
of at least 25 homes, businesses, or other eligible institutions, each 
sustain uninsured losses of 40 percent or more of the estimated fair 
replacement value or pre-disaster fair market value of the damaged 
property, whichever is lower; or
    (ii) In any such political subdivision, at least three businesses 
each sustain uninsured losses of 40 percent or more of the estimated 
fair replacement value or pre-disaster fair market value of the damaged 
property, whichever is lower, and, as a direct result of such physical 
damage, 25 percent or more of the work force in their community would be 
unemployed for at least 90 days; and
    (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 SBA Disaster Area Office serving the region where the disaster 
occurred within 60 days of the date of the disaster.
    (4) SBA makes an economic injury disaster declaration in response to 
a determination of a natural disaster by the Secretary of Agriculture.
    (5) SBA makes an economic injury declaration in reliance on a state 
certification that at least 5 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 
subdivisions in which the disaster occurred, and must be delivered (with 
supporting documentation) to the servicing SBA Disaster Area Office 
within 120 days of the disaster occurrence. The Administrator may, in a 
case of undue hardship, accept such request after 120 days have expired.
    (b) SBA publishes notice of any disaster declaration in the Federal 
Register. The published notice will identify the kinds of assistance 
available, the date and nature of the disaster, and

[[Page 325]]

the deadline and location for filing loan applications. Additionally, 
SBA will use the local media to inform potential loan applicants where 
to obtain loan applications and otherwise to assist victims in applying 
for disaster loans. SBA will accept applications after the announced 
deadline only when SBA determines that the late filing resulted from 
substantial causes beyond the control of the applicant.

[61 FR 3304, Jan. 31, 1996, as amended at 64 FR 13667, Mar. 22, 1999; 67 
FR 64518, Oct. 21, 2002]