[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR123.3]



[Page 343-344]

 

                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



[[Page 344]]



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 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]