37308 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

it gives a service provider access to that

information. The credit union should

exercise appropriate due diligence in

managing and monitoring its outsourcing

arrangements to confirm that its service

providers have implemented an effective

information security program to protect

member information and member

information systems consistent with these

Guidelines.

[FR Doc. 00–14783 Filed 6–13–00; 8:45 am]

BILLING CODE 7535–01–P

SMALL BUSINESS ADMINISTRATION

13 CFR Parts 121 and 123

Pre-Disaster Mitigation Loans

AGENCY: Small Business Administration

(SBA).

ACTION: Proposed rule.

SUMMARY: With this rule SBA proposes

to amend its Pre-Disaster Mitigation

Loan Program (program) regulations.

This rule proposes amendments that

will clarify program requirements and

procedures. The Pre-Disaster Mitigation

Loan Program is a pilot program that

was authorized by Congress in 1999. It

allows SBA to make low interest, fixed

rate loans to small businesses for the

purpose of implementing mitigation

measures to protect their property from

disaster related damage. The PreDisaster Mitigation Loan Program was

developed in support of Project Impact,

a formal mitigation program established

by the Federal Emergency Management

Agency (FEMA).

DATES: Submit comments on or before

July 14, 2000.

ADDRESSES: Written comments should

be sent to Bernard Kulik, Associate

Administrator, Office of Disaster

Assistance, U.S. Small Business

Administration, 409 3rd Street, SW.,

Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:

Bernard Kulik, Associate Administrator,

Office of Disaster Assistance, 202–205–

6734.

SUPPLEMENTARY INFORMATION: SBA

proposes to amend its regulations

dealing with the Pre-Disaster Mitigation

Loan Program (program). This proposed

rule would clarify the application and

loan approval processes and will make

plain language edits to support the

Administration’s efforts to communicate

clearly with the public.

The Pre-Disaster Mitigation Loan

Program is a pilot program authorized

by Congress at a level of 15 million

dollars for each of 5 fiscal years from

2000 through 2004. The program allows

SBA to make low interest, fixed rate

loans to small businesses for the

purpose of implementing mitigation

measures that will protect the small

business from disaster related damage.

The Pre-Disaster Mitigation Loan

Program was developed in support of

Project Impact, a formal mitigation

program established by FEMA. These

initiatives encourage preparedness

rather than rely solely on a response and

recovery approach to emergency

management.

Compliance With Executive Orders

12866, 12988, and 13132, the

Regulatory Flexibility Act (5 U.S.C.

601–612), and the Paperwork

Reduction Act (44 U.S.C. Ch. 35)

SBA has determined that this

proposed rule is a significant rule

within the meaning of Executive Order

12866. However, it is not likely to have

an 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 U.S. economy.

SBA has determined that this

proposed 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. 601–612. Given that

Congress has limited the funding level

for this pilot program, the program can

only serve a limited number of small

businesses. With a maximum loan

amount of $50,000, the number of small

businesses affected under this program

would be 300. Even if the loan amounts

did not reach the maximum level, and

amounted to only $25,000 per loan, the

number of small businesses affected

would only be 600. This is not

substantial, in view of the fact that there

are some 13–16 million small

businesses across the country.

For the purposes of the Paperwork

Reduction Act, 44 U.S.C. Ch. 35, SBA

has submitted the Pre-Disaster

Mitigation Small Business Loan

Application (application) to the Office

of Management and Budget (OMB) for

review. SBA is requesting that OMB

approve or disapprove of this collection

of information within 30 days of

submission. This application will allow

small businesses to apply for predisaster mitigation loans and will

provide SBA with the information

necessary to evaluate applicants. The

application will request such

information as name, address, location

and type of mitigation project, type of

business, management information,

organization type, and financial

information to permit SBA to determine

repayment ability. The applicant will

have to complete an application each

time it applies for a pre-disaster

mitigation loan. SBA estimates that the

time necessary to complete an

application for the Pre-Disaster

Mitigation Loan Program will average 2

hours.

SBA is seeking comments on: (a)

Whether the information SBA proposes

to collect on the application is necessary

for the proper performance of this

program, (b) the accuracy of the burden

estimate (time estimated to complete the

application), (c) ways to minimize the

burden estimate, and (d) ways to

enhance the quality of the information

being collected. Please send comments

regarding this proposed collection to

Bernard Kulik, Associate Administrator,

Office of Disaster Assistance, 409 3rd

Street, SW., Washington, DC 20416, and

to David Rostker, Office of Management

and Budget, Office of Information and

Regulatory Affairs, 725 17th Street,

NW., Washington, DC 20503.

For purposes of Executive Order

13132, SBA has determined that this

proposed rule has no federalism

implications.

For purposes of Executive Order

12988, SBA certifies that this proposed

rule is drafted, to the extent practicable,

to be in accordance with the standards

set forth in section 3 of that Order.

List of Subjects

13 CFR Part 121

Government procurement,

Government property, Grant programs—

business, Loan programs—business,

Small businesses.

13 CFR Part 123

Disaster assistance, Loan programs—

business, Reporting and recordkeeping

requirements, Small businesses.

For the reasons stated in the

preamble, SBA proposes to amend 13

CFR parts 121 and 123 as follows:

PART 121—SMALL BUSINESS SIZE

REGULATIONS

1. The authority citation for part 121

is revised to read as follows:

Authority: 15 U.S.C. 632(a), 634(b)(6),

636(b), 636(c), 637(a), 644(c); 42 U.S.C.

13556; and Sec. 601 et. seq., Pub. L. 105–135,

111 Stat. 2592.

2. In § 121.302, remove the last

sentence of paragraph (c) and add two

new sentences in its place to read as

follows:

§ 121.302 When does SBA determine the

size status of an applicant?

* * * * *

(c) * * * For pre-disaster mitigation

loans, size status is determined as of the

date SBA accepts a complete PreVerDate 11<MAY>2000 19:36 Jun 13, 2000 Jkt 190000 PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 E:\FR\FM\14JNP1.SGM pfrm02 PsN: 14JNP1
Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37309

Disaster Mitigation Small Business Loan

Application for processing. Refer to

§ 123.408 of this chapter to find out

what SBA considers to be a complete

Pre-Disaster Mitigation Small Business

Loan Application.

* * * * *

PART 123—DISASTER LOAN

PROGRAM

1. The authority citation for part 123

is revised to read as follows:

Authority: 15 U.S.C. 634(b)(6), 636(b), and

636(c).

2. Designate the undesignated center

headings, Overview, Home Disaster

Loans, Physical Disaster Business

Loans, Economic Injury Disaster Loans,

and Pre-Disaster Mitigation Loans and

the sections under each as Subparts A,

B, C, D, and E respectively.

Subpart A—Overview

3. Redesignate § 123.107 as § 123.21,

and transfer it to newly designated

Subpart A, and revise it as follows:

§ 123.21 What is a mitigation measure?

A mitigation measure is something

done for the purpose of protecting real

and personal property against disaster

related damage. You may implement

mitigation measures after a disaster

occurs, to protect against recurring

disaster related damage, or before a

disaster occurs (pre-disaster), to protect

against future disaster related damage.

Sections 123.400 through 123.413

specifically address pre-disaster

mitigation. Examples of mitigation

measures include retaining walls, sea

walls, grading and contouring land,

elevating flood prone structures,

relocating utilities, retrofitting

structures to protect against high winds,

earthquakes, flood, wildfires, or other

natural disasters.

4. Add § 123.22 to Subpart A to read

as follows:

§ 123.22 How much can your business

borrow for mitigation?

For mitigation measures implemented

after a disaster has occurred your

business can borrow the lesser of the

cost of mitigation measure, or 20

percent of the amount of your approved

physical disaster loan to repair or

replace your damaged primary

residence, personal property, and

business property. To find out how

much your business can borrow for predisaster mitigation measures, see

§ 123.405.

5. Add § 123.23 to Subpart A to read

as follows:

§ 123.23 Can you request a loan increase

to use for mitigation measures?

Yes, you can request a loan increase

to use for mitigation measures by

sending SBA a written request before

the final disbursement of your original

disaster loan. The written request must

detail the nature and expected cost of

the mitigation measure. If you send a

written request for a loan increase after

the final disbursement of your original

disaster loan, SBA will only accept this

request if, as a part of the request, you

demonstrate that the request was late

because of substantial reasons beyond

your control.

6. Revise newly designated Subpart E

to read as follows:

Subpart E—Pre-Disaster Mitigation

Loans

Sec.

123.400 What is the Pre-Disaster Mitigation

Loan Program?

123.401 What types of mitigating measures

can your business include in an

application for a pre-disaster mitigation

loan?

123.402 Can your business include its

relocation as a mitigation measure in an

application for a pre-disaster mitigation

loan?

123.403 When is your business eligible to

apply for a pre-disaster mitigation loan?

123.404 When is your business ineligible to

apply for a pre-disaster mitigation loan?

123.405 How much can your business

borrow with a pre-disaster mitigation

loan?

123.406 What is the interest rate on a predisaster mitigation loan?

123.407 When does your business apply for

a pre-disaster mitigation loan and where

does your business get the application?

123.408 How does your business apply for

a pre-disaster mitigation loan?

123.409 Which pre-disaster mitigation loan

requests will SBA consider for funding?

123.410 When will SBA make funding

decisions?

123.411 Which loan requests will SBA

fund?

123.412 What if SBA determines that your

business loan request meets the selection

criteria of § 123.409 but SBA is unable to

fund it because SBA has already

allocated all program funds?

123.413 What happens if SBA declines your

business’ pre-disaster loan request?

Subpart E—Pre-Disaster Mitigation

Loans

§ 123.400 What is the Pre-Disaster

Mitigation Loan Program?

The Pre-Disaster Mitigation Loan

Program allows SBA to make low

interest, fixed rate loans to small

businesses for the purpose of

implementing mitigation measures to

protect their commercial real property

(building) or leasehold improvements

from disaster related damage. This

program supports Project Impact, a

formal mitigation program established

by the Federal Emergency Management

Agency (FEMA). This pilot program is

authorized for 5 fiscal years (October—

September), from 2000 through 2004,

and has approved only limited program

funding. Therefore, approved loan

requests are funded on a first come, first

serve basis up to the limit of program

funds available (see § 123.411).

§ 123.401 What types of mitigation

measures can your business include in an

application for a pre-disaster mitigation

loan?

To be included in a pre-disaster

mitigation loan application, each of

your business’ mitigation measures

must satisfy the following criteria:

(a) The mitigation measure, as

described in the application, must serve

the purpose of protecting your

commercial real property (building) or

leasehold improvements from damage

that may be caused by future disasters,

and

(b) The mitigation measure must

conform with the priorities and goals of

the Project Impact community in which

the business subject to the measure is

located. To show that this factor is

satisfied your business must submit to

SBA, as a part of your complete

application, a letter from your business’

local Project Impact coordinator

confirming this fact. Contact your

regional FEMA office for a list of Project

Impact coordinators or visit the FEMA

Website at www.fema.gov.

§ 123.402 Can your business include its

relocation as a mitigation measure in an

application for a pre-disaster mitigation

loan?

Yes, you may request a pre-disaster

mitigation loan for the relocation of

your business if: (a) Your commercial

real property (building) is located in a

SFHA (Special Flood Hazard Area), and

(b) your business relocates outside the

SFHA but remains in the same Project

Impact community. Contact your

regional FEMA office for a listing of

Project Impact Communities and SFHAs

or visit the FEMA Website at

www.fema.gov.

§ 123.403 When is your business eligible

to apply for a pre-disaster mitigation loan?

To be eligible to apply for a predisaster mitigation loan your business

must meet each of the following criteria:

(a) Your business, which is the subject

of the pre-disaster mitigation measure,

must be located in a Project Impact

community. Each State, the District of

Columbia, Puerto Rico, and the Virgin

Islands have at least one Project Impact

37310 Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules

community. Contact your regional

FEMA office to find out the locations of

Project Impact communities or visit the

FEMA Website at www.fema.gov.

(b) If your business is proposing a

mitigation measure that protects against

a flood hazard, the location of your

business which is the subject of the

mitigation measure must be located in a

Special Flood Hazard Area (SFHA).

Contact your FEMA regional office to

find out the locations of SFHAs or visit

the FEMA Website at www.fema.gov.

(c) As of the date your business

submits a complete Pre-Disaster

Mitigation Small Business Loan

Application to SBA (see § 123.408 for

what SBA considers to be a complete

application), your business, along with

its affiliates, must be a small business

concern as defined in part 121 of this

chapter. The definition of small

business concern encompasses sole

proprietorships, partnerships,

corporations, limited liability

companies, and other legal entities

recognized under State law.

(d) Your business, which is the

subject of the mitigation measure, must

have operated as a business in its

present location for at least one year

before submitting its application.

(e) Your business, along with its

affiliates and owners, must not have the

financial resources to fund the proposed

mitigation measures without undue

hardship. SBA makes this determination

based on the information your business

submits as a part of its application.

(f) If your business is owning and

leasing out real property, the mitigation

measures must be for protection of a

building leased primarily for

commercial rather than residential

purposes (SBA will determine this

based upon a comparative square

footage basis).

§ 123.404 When is your business ineligible

to apply for a pre-disaster mitigation loan?

Your business is ineligible to apply

for a pre-disaster mitigation loan if your

business (including its affiliates)

satisfies any of the following conditions:

(a) Any of your business’ principal

owners is presently incarcerated, or on

probation or parole following conviction

of a serious criminal offense, or has

been indicted for a felony or a crime of

moral turpitude;

(b) Your business’ only interest in the

business property is in the form of a

security interest, mortgage, or deed of

trust;

(c) The building, which is the subject

of the mitigation measure, was newly

constructed or substantially improved

on or after February 9, 1989, and

(without significant business

justification) is located seaward of mean

high tide or entirely in or over water;

(d) Your business is an agricultural

enterprise. Agricultural enterprise

means a business primarily engaged (see

§ 121.107) in the production of food and

fiber, ranching and raising of livestock,

aquaculture and all other farming and

agriculture-related industries.

Sometimes a business is engaged in both

agricultural and non-agricultural

business activities. If the primary

business activity of your business is not

an agricultural enterprise, it may apply

for a pre-disaster mitigation loan, but

loan proceeds may not be used, directly

or indirectly, for the benefit of the

agricultural enterprises;

(e) Your business is engaged in any

illegal activity;

(f) Your business is a government

owned entity (except for a business

owned or controlled by a Native

American tribe);

(g) Your business presents live

performances of a prurient sexual nature

or derives directly or indirectly more

than de minimis gross revenue through

the sale of products or services, or the

presentation of any depictions or

displays, of a prurient sexual nature;

(h) Your business engages in lending,

multi-level sales distribution,

speculation, or investment (except for

real estate investment with property

held for commercial rental);

(i) Your business is a non-profit or

charitable concern;

(j) Your business is a consumer or

marketing cooperative;

(k) Your business derives more than

one-third of its gross annual revenue

from legal gambling activities;

(l) Your business is a loan packager

that earns more than one-third of its

gross annual revenue from packaging

SBA loans;

(m) Your business principally engages

in teaching, instructing, counseling, or

indoctrinating religion or religious

beliefs, whether in a religious or secular

setting; or

(n) Your business is primarily

engaged in political or lobbying

activities.

§ 123.405 How much can your business

borrow with a pre-disaster mitigation loan?

Your business, together with its

affiliates, may borrow up to $50,000

each fiscal year. This loan amount may

be used to fund only those projects that

were a part of your business’ approved

loan request. SBA will consider

mitigation measures costing more than

$50,000 per year if your business can

identify, as a part of its Pre-Disaster

Mitigation Small Business Loan

Application, sources that will fund the

cost above $50,000.

§ 123.406 What is the interest rate on a

pre-disaster mitigation loan?

The interest rate on a pre-disaster

mitigation loan will be fixed at 4

percent per annum or less. The exact

interest rate will be stated in the Federal

Register notice announcing each filing

period (see § 123.407).

§ 123.407 When does your business apply

for a pre-disaster mitigation loan and where

does your business get an application?

At the beginning of each of 5 fiscal

years (October through September)

commencing in fiscal year 2000, SBA

will publish a notice in the Federal

Register announcing the availability of

pre-disaster mitigation loans. The notice

will designate a 30-day application

filing period with a specific opening

date and filing deadline, as well as the

locations for obtaining and filing loan

applications. In addition to the Federal

Register, SBA will use FEMA, and will

issue press releases to the local media

to inform potential loan applicants

where to obtain loan applications. SBA

will not accept any applications after

the filing deadline; however, SBA may

announce additional application

periods each year depending on the

availability of program funds.

§ 123.408 How does your business apply

for a pre-disaster mitigation loan?

To apply for a pre-disaster mitigation

loan your business must submit a

complete Pre-Disaster Mitigation Small

Business Loan Application (application)

within the announced filing period. The

complete application serves as your

business’ loan request. A complete

application supplies all of the filing

requirements specified on the

application form including a written

statement from the local Project Impact

coordinator confirming:

(a) The business that is the subject of

the mitigation measure is located within

the Project Impact community, and

(b) The mitigation measure is in

accordance with the specific priorities

and goals of the local Project Impact

community in which the business is

located.

§ 123.409 Which pre-disaster mitigation

loan requests will SBA consider for

funding?

SBA will consider a loan request for

funding if, after reviewing a complete

application, SBA determines that it

meets the following selection criteria:

(a) Your business satisfies the

requirements of §§ 123.401, 123.402 and

123.403,

(b) None of the conditions specified in

§ 123.404 apply to your business, its

affiliates, or principal owners,

Federal Register / Vol. 65, No. 115 / Wednesday, June 14, 2000 / Proposed Rules 37311

(c) Your business has submitted a

reasonable cost estimate for the

proposed mitigation measure and has

chosen to undertake a mitigation

measure that is likely to accomplish the

desired mitigation result (SBA’s

determination of this point is not a

guaranty that the project will prevent

damage in future disasters),

(d) Your business is credit worthy,

and

(e) There is a reasonable assurance of

loan repayment in accordance with the

terms of a loan agreement.

§ 123.410 When will SBA make funding

decisions?

SBA will not make funding decisions

until sixty calendar days after the

announced opening of the application

filing period (as published in the

Federal Register). SBA will notify you

in writing if your loan request doesn’t

meet the criteria specified in § 123.409.

§ 123.411 Which loan requests will SBA

fund?

SBA will date and time stamp each

application (loan request) when we

determine that it is complete. SBA will

fund loan requests meeting the selection

criteria specified in § 123.409 on a first

come, first served basis using this date

and time stamp. SBA will fund loan

requests in this order until it allocates

all program funds. SBA will notify you

in writing of its funding decision.

§ 123.412 What if SBA determines that

your business loan request meets the

selection criteria of § 123.409 but SBA is

unable to fund it because SBA has already

allocated all program funds?

If SBA determines that your business’

loan request meets the selection criteria

of § 123.409 but we are unable to fund

it because we have already allocated all

program funds, your request will be

given priority status, based on the

original filing date, once more program

funds become available. However, if

more than 6 months pass since SBA

determined to fund your request, SBA

may request updated or additional

financial information.

§ 123.413 What happens if SBA declines

your business’ pre-disaster mitigation loan

request?

If SBA declines your business’ loan

request, SBA will notify your business

in writing giving specific reasons for

decline. If your business disagrees with

SBA’s decision, it may respond in

accordance with § 123.13. If SBA

reverses its decision, SBA will use the

date it accepted your business’ request

for reconsideration or appeal as the

basis for determining the order of

funding.

Dated: May 25, 2000.

Aida Alvarez,

Administrator.

[FR Doc. 00–13812 Filed 6–13–00; 8:45 am]

BILLING CODE 8025–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–CE–29–AD]

RIN 2120–AA64

Airworthiness Directives; Raytheon

Aircraft Company Beech Models 1900,

1900C, and 1900D Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes to

adopt a new airworthiness directive

(AD) that would apply to certain

Raytheon Aircraft Company (Raytheon)

Beech Models 1900, 1900C, and 1900D

airplanes. The proposed AD would

require you to modify the cockpit voice

recorder (CVR) system. The proposed

AD is the result of instances where the

recording quality of the CVR in the

affected airplanes was so poor that the

information was practically

unrecoverable. The actions specified by

the proposed AD are intended to correct

substandard quality cockpit voice

recordings caused by the configuration

of the present CVR system, which could

affect air safety if important information

that the CVR provides is not available

after an accident. This information

helps determine the probable cause of

an accident and aids in developing

necessary corrective action or design

changes to prevent future accidents.

DATES: The Federal Aviation

Administration (FAA) must receive any

comments on this rule on or before

August 11, 2000.

ADDRESSES: Submit comments in

triplicate to FAA, Central Region, Office

of the Regional Counsel, Attention:

Rules Docket No. 2000–CE–29–AD, 901

Locust, Room 506, Kansas City,

Missouri 64106. Comments may be

inspected at this location between 8

a.m. and 4 p.m., Monday through

Friday, holidays excepted.

Service information that applies to the

proposed AD may be obtained from the

Raytheon Aircraft Company, PO Box 85,

Wichita, Kansas 67201–0085; telephone:

(800) 625–7043 or (316) 676–4556. This

information also may be examined at

the Rules Docket at the address above.

FOR FURTHER INFORMATION CONTACT: Mr.

Harvey E. Nero, Aerospace Engineer,

Wichita Aircraft Certification Office,

FAA, 1801 Airport Road, Mid-Continent

Airport, Wichita, Kansas 67209;

telephone: (316) 946–4137; facsimile:

(316) 946–4407.

SUPPLEMENTARY INFORMATION:

Comments Invited

The FAA invites comments on this

proposed rule. You may submit

whatever written data, views, or

arguments you choose. You need to

include the rule’s docket number and

submit your comments in triplicate to

the address specified under the caption

‘‘ADDRESSES.’’ The FAA will consider all

comments received on or before the

closing date. We may amend the

proposed rule in light of comments

received. Factual information that

supports your ideas and suggestions is

extremely helpful in evaluating the

effectiveness of the proposed AD action

and determining whether we need to

take additional rulemaking action.

The FAA is re-examining the writing

style we presently use in regulatory

documents, in response to the

Presidential memorandum of June 1,

1998. That memorandum requires

federal agencies to communicate more

clearly with the public. We are

interested in your comments on whether

the style of this document is clearer, and

any other suggestions you might have to

improve the clarity of FAA

communications that affect you. You

can get more information about the

Presidential memorandum and the plain

language initiative at http://

www.plainlanguage.gov.

The FAA specifically invites

comments on the overall regulatory,

economic, environmental, and energy

aspects of the proposed rule that might

suggest a need to modify the rule. You

may examine all comments we receive

before and after the closing date of the

rule in the Rules Docket. We will file a

report in the Rules Docket that

summarizes each FAA contact with the

public that concerns the substantive

parts of the proposed AD.

If you want us to acknowledge the

receipt of your comments, you must

include a self-addressed, stamped

postcard. On the postcard, write

‘‘Comments to Docket No. 2000–CE–29–

AD.’’ We will date stamp and mail the

postcard back to you.

Discussion

What Events Have Caused This

Proposed AD?

The FAA has received reports of six

instances where the recording quality of