GAO-02-210R

United States General Accounting Office

Washington, DC 20548

B-289278

November 16, 2001

The Honorable John F. Kerry

Chairman

The Honorable Christopher S. Bond

Ranking Minority Member

Committee on Small Business and Entrepreneurship

United States Senate

The Honorable Donald A. Manzullo

Chairman

The Honorable Nydia M. Velázquez

Ranking Minority Member

Committee on Small Business

House of Representatives

Subject: Small Business Administration: Disaster Loan Program

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a

major rule promulgated by the Small Business Administration (SBA), entitled

“Disaster Loan Program” (RIN: 3245-AE82). We received the rule on November 5,

2001. It was published in the Federal Register as an “interim final rule with request

for comments” on October 22, 2001. 66 Fed. Reg. 53329.

The interim rule allows SBA to make economic disaster loans to eligible small

business concerns outside the declared disaster areas that suffered substantial

economic injury as a direct result of the destruction of the World Trade Center,

New York, New York, or the damage to the Pentagon on September 11, 2001, or as a

direct result of any related federal action taken between September 11, 2001, and

October 22, 2001.

Enclosed is our assessment of the SBA’s compliance with the procedural steps

required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.

Our review indicates that the SBA complied with the applicable requirements.
Page 2 GAO-02-210R

If you have any questions about this report, please contact James W. Vickers,

Assistant General Counsel, at (202) 512-8210. The official responsible for GAO

evaluation work relating to the subject matter of the rule is Thomas McCool,

Managing Director, Financial Markets and Community Investments. Mr. McCool can

be reached at (202) 512-8678.

signed

Kathleen E. Wannisky

Managing Associate General Counsel

Enclosure

cc: Nina D. Levine

Acting Deputy General Counsel

Small Business Administration
GAO-02-210R

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE

ISSUED BY THE

SMALL BUSINESS ADMINISTRATION

ENTITLED

"DISASTER LOAN PROGRAM"

(RIN: 3245-AE82)

(i) Cost-benefit analysis

SBA estimates that approximately $852 million will be loaned to small businesses as

a result of the interim final rule and that while the subsidy cost of this lending will be

approximately $250 million, the economic benefits will be significant. The survival

of the affected small businesses presents a potential net increase to the economy and

will prevent additional costs to the government through increased payments in

entitlement programs and reduced revenues.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,

607, and 609

Since the interim final rule did not follow the issuance of a notice of proposed

rulemaking, SBA was not required to prepare a regulatory flexibility analysis.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform

Act of 1995, 2 U.S.C. §§ 1532-1535

The interim final rule does not contain either an intergovernmental or private sector

mandate, as defined in title II, of more than $100 million in any one year.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

In view of the emergency nature of the interim final rule, SBA has found “good

cause” under the Administrative Procedure Act to forgo public comment and to

make the rule effective upon publication in the Federal Register. 5 U.S.C.

553(b)(3)(B) and 553(d)(3). However, SBA is accepting public comments on the

interim final rule for 30 days.

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The interim final rule does not contain any new information collections that are

subject to review by the Office of Management and Budget (OMB) under the

Paperwork Reduction Act.
Page 2 GAO-02-210R

Statutory authorization for the rule

The interim final rule is promulgated under the authority contained at 15 U.S.C.

633(d) and 636(b)(2).

Executive Order No. 12866

The interim final rule was reviewed by OMB and found to be an “economically

significant” regulatory action.

Executive Order No. 13132 (Federalism)

SBA has determined that the interim final rule does not have sufficient federalism

implications to warrant the preparation of a federalism assessment.