the Federal Government or by a program or project by a State or local government or public service entity, providing such government or public service entity has the authority to exercise the right of eminent domain on such program or project; and the purpose of a loan made pursuant to such project or program may, in the discretion of the Administration, include the purchase or construction of other premises whether or not the borrower owned the premises occupied by the business; 27 (4) to make such loans (either directly or in coop- Product diseration with banks or other lending institutions aster loans. through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to assist any small business concern in reestablishing its business if the Administration determines that such concern has suffered substantial economic injury as a result of the inability of such concern to process or market a product for human consumption because of disease or toxicity occurring in such product through natural or undetermined causes; 28 imposed by State laws. Federal or (5) to make such loans (either directly or in co- Structural operation with banks or other lending institutions operational through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to assist any small business concern in effecting additions to or alterations in its plant, facilities, or methods of operation to meet requirements imposed on such concern pursuant to any Federal law heretofore or hereafter enacted, any State law enacted in conformity therewith, or any regulation or order of a duly authorized, Federal, State, regional, or local agency issued in conformity with such Federal law, if the Administration determines that such concern is likely to suffer substantial economic injury without assistance under this paragraph: Provided, That the maximum loan made to any small business 27 Section 7 (b) (3) added by section 305 of PL 87-70, the Housing Act of 1961, approved June 30, 1961. (75 Stat. 167). The provision authorizing the purchase or construction of other premises whether or not the borrower owned the premises from which it was displaced was inserted by section 319 of PL 88-560, the Housing Act of 1964, approved September 2, 1964. (78 Stat. 794). Amended by section 31 of PL 90-495, the FederalAid Highway Act of 1968, approved August 23, 1968 (82 Stat. 835), to add coverage for a small business concern suffering economic injury because of location in general area of Federally aided construction and to broaden the loan purposes; physical displacement of concern was formely required. Section 402 of PL 95-89, August 4, 1977, broadened the economic injury assistance available to small business concerns by including economic injury caused by state or local government or public service entity with eminent domain authority. 28 Section 7(b) (4) added by section 1(b) of PL 88-264, approved February 5, 1964 (78 Stat. 7). A proviso was added by section 5 of PL 93-237, approved January 2, 1974 (87 Stat. 1023) as follows: "That loans under this paragraph include loans to persons who are engaged in the business of raising livestock (including but not limited to cattle, hogs, and poultry), and who suffer substantial economic injury as a result of animal disease". The proviso was deleted by section 112(d) of PL 94-305, approved June 4, 1976. (90 Stat. 663). Strategic arms limitation. Adjustment assistance for base closings. Businesses affected by the energy crisis. concern under this paragraph shall not exceed the maximum loan which, under rules or regulations prescribed by the Administration, may be made to any business enterprise under paragraph (1) of this subsection; 29 (6) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to assist, or to refinance the existing indebtedness of, any small business concern directly and seriously affected by the significant reduction of the scope or amount of Federal support for any project as a result of any international agreement limiting the development of strategic arms or the installation of strategic arms or strategic arms facilities, if the Administration determines that such concern is likely to suffer substantial economic injury without assistance under this paragraph; 30 (7) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to assist any small business concern in continuing in business at its existing location, in reestablishing its business, in purchasing a new business, or in establishing a new business if the Administration determines that such concern has suffered or will suffer substantial economic injury as the result of the closing by the Federal Government of a major military installation under the jurisdiction of the Department of Defense, or as a result of a severe reduction in the scope and size of operations at a major military installation; 31 (8) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to assist, or refinance the existing indebtedness of, any small busi 29 Section 7(b) (5) added by section 2 of PL 93-237, approved January 2, 1974. (87 Stat. 1023). It consolidated and expanded existing SBA authority to finance small businesses required to make structural, operational and other changes by Federal laws or State laws enacted in conformity therewith, to comply with environmental, consumer, pollution, and safety standards. The section consolidated three subsections of the Small Business Act into a single section the Coal Mine Health and Safety Act of 1969 (section 7(b) (5) of the Small Business Act), the Occupational Safety and Health Act of 1970 (section 7(b)(5)), and the Egg Product Inspection Act of 1970 which also extended eligibility to small firms affected by the Wholesome Meat Act of 1967 and the Wholesome Poultry Products Act of 1968 (section_7(b)(6)). The phrase "heretofore or hereafter enacted" was added by section 302 of PL 95-89, August 4, 1977. 30 Formerly section 7(b) (7), added by section 2(a) (2) of PL 92-385, approved August 16, 1972 (86 Stat. 554). Redesignated as section 7(b) (6) by section 2(b) (2) of PL 93-237, approved January 2, 1974. (87 Stat. 1023). See footnote 29. 31 Added by section 6 of PL 93-237, approved January 2, 1974. (87 Stat. 1023). ness concern seriously and adversely affected by a dislocation (9) to make such loans (either directly or in co- Economic operation with banks or other lending institutions loans. through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary to assist, or refinance the existing indebtedness of, any small business concern located in an area of economic dislocation. The Governor of a State may certify to the Administration (A) that small business concerns within the State have suffered substantial economic injury as a result of an economic dislocation, and (B) that such concerns are in need of financial assistance which is not available on reasonable terms. For the purposes of this paragraph, economic dislocation includes extraordinary, severe, and temporary natural conditions or other economic dislocations as determined by the Administration. Such economic dislocations must be of such magnitude that without the benefit of loans provided hereunder a significant number of otherwise financially sound small businesses in the impacted regions or business sectors would either become insolvent or be unable to return quickly to their formed level of operation. No loan made hereunder shall exceed $100,000, nor shall the proceeds thereof be used to reduce the exposure of any other lender. The Administration shall permit deferral of payment of principal and interest for one year on loans made hereunder.33 No loan under this subsection, including renewals and extensions thereof, may be made for a period or periods exceeding thirty years: Provided, That the Administrator may consent to a suspension in the payment of principal and interest charges on, and to an extension in the maturity of, the Federal share of any loan under this subsection for a period not to exceed five years, if (A) the borrower under such loan is a homeowner or a small business concern, (B) the loan was made to enable (i) such homeowner to repair or replace his home, or (ii) such concern to repair or replace plant or equipment which was damaged or destroyed as the result of a disaster meeting the requirements of clause (A) or (B) of 32 Added by section 9(a) of PL 93-386, the Small Business Amendments of 1974, approved August 23, 1974. (88 Stat. 742). 33 Added by section 404 of PL 95-89, August 4, 1977. Establishes a new nonphysical disaster loan program to provide SBA assistance necessitated by substantial economic injury caused by economic dislocation. Interest. paragraph (2) of this subsection, and (C) the Administrator determines such action is necessary to avoid severe financial hardship: Provided further, That the provisions of paragraph (1) of subsection (c) of this section shall not be applicable to any such loan having a maturity in excess of twenty years. Notwithstanding the provisions of any other law, the interest rate on the Administration's share of any loan made under subsection (b) shall not exceed the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the date of the loan and adjusted to the nearest one-eighth of 1 per centum plus one-quarter of 1 per centum: Provided, however, That the interest rate for loans made under paragraphs (1) and (2) hereof shall not exceed the rate of interest which is in effect at the time of the occurrence of disaster.34 In agreements to participate in loans on a deferred basis under this subsection, such participation by the Administration shall not be in excess of 90 per centum of the balance of the loan outstanding at the time of disbursement. Notwithstanding any other provision of law, the interest rate on the Administration's share of any loan made pursuant to paragraph (1) of this subsection to repair or replace a primary residence and/or replace or repair damaged or destroyed personal property, less the amount of compensation by insurance or otherwise, with respect to a disaster occurring on or after July 1, 1976, and prior to October 1, 1978, shall be: 1 per centum on the amount of such loan not exceeding $10,000, and 3 per centum on the amount of such loan over $10,000 but not exceeding $40,000. The interest rate on the Administration's share of the first $250,000 of all other loans made pursuant to paragraph (1) of this subsection, with respect to a disaster occurring on or after July 1, 1976, and prior to October 1, 1978, shall be 3 per centum. All repayments of principal on the Administration's share of any loan made under the above provisions shall first be applied to reduce the principal sum of such loan which bears interest at the lower rates provided in this paragraph. The principal amount of any loan made pursuant to paragraph (1) in connection with a disaster which occurs on or after April 1, 1977, but prior to January 1, 1978, may be increased by such amount, but not more than $2,000, as the Administration determines to be reasonable in light of the amount and nature of loss, damage, or injury sustained in order to finance the installation of insulation in 34 Section 114 of PL 94-305, approved June 4, 1976 (90 Stat. 663), established a uniform interest rate on SBA's share of all loans made under section 7(b). See section 9 of PL 93-24, approved April 20, 1973 (87 Stat. 24) which is superseded insofar as it covers the interest rates on loans under sections 7(b)(1), (2), and (4) but also provides that no portion of any such loans resulting from disasters occurring on or after April 20, 1973, is subject to cancellation. the property which was lost, damaged, or injured, if the uninsured, damaged portion of the property is 10 per centum or more of the market value of the property at the time of the disaster. Not later than June 1, 1978, the Administration shall prepare and transmit to the Select Committee on Small Business of the Senate, the Committee on Small Business of the House of Representatives, and the Committees of the Senate and House of Representatives having jurisdiction over measures relating to energy conservation, a report on its activities under this paragraph, including therein an evaluation of the effect of such activities on encouraging the installation of insulation in property which is repaired or replaced after a disaster which is subject to this paragraph, and its recommendations with respect to the continuation, modification, or termination of such activities.35 In the administration of the disaster loan program under paragraphs (1), (2), and (4) of this subsection, in the case of property loss or damage or injury resulting from a major disaster as determined by the President or a disaster as determined by the Administrator which occurs on or after January 1, 1971, and prior to July 1, 1973, the Small Business Administration, to the extent such loss or damage or injury is not compensated for by insurance or otherwise (A) may make any loan for repair, rehabilitation, or replacement of property damaged or destroyed without regard to whether the required financial assistance is otherwise available from private sources; (B) may, in the case of the total destruction or substantial property damage of a home or business concern, refinance any mortgage or other liens outstanding against the destroyed or damaged property if such property is to be repaired, rehabilitated, or replaced, except that (1) in the case of a business concern, the amount refinanced shall not exceed the amount of the physical loss sustained, and (2) in the case of a home, the amount of each monthly payment of principal and interest on the loan after refinancing under this clause shall be not less than the amount of each such payment made prior to such refinancing; (C) may, in the case of a loan made under clause (A) or a mortgage or other lien refinanced under clause (B) in connection with the destruction of, or substantial damage to, property owned and used as a residence by an individual who by reason of retirement, disability, or other similar circumstances relies for support on survivor, disability, or retirement benefits under a pension, insurance, or other 35 The interest rate changes made by section 405 of PL 95-89, August 4, 1977, are retro-> active and for a fixed term only. |