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SBA Loan Form

Members of Congress seek SBA rule delay

SBA asked to extend comment period for interim rule to provide more time to better understand potential impact on poultry industry.

Rep. Trent Kelly (R., Miss.) led a letter signed by 54 members of Congress that was sent to Small Business Administration (SBA) administrator Jovita Carranza requesting a delay from March 11 to Oct. 1, 2020, in the effective date of an interim final rule (IFR) addressing poultry lending the agency is seeking to finalize prior to the end of a comment period. Additionally, Sens. Tom Cotton (R., Ark.) and John Boozman (R., Ark.) led a similar effort sent signed by 11 senators.

On Feb. 10, SBA released an IFR establishing a review process whereby SBA would review farmer contracts and make an “affiliation” determination – whether that farmer was “affiliated” with a chicken processing company and, thus, ineligible for SBA assistance through loan guarantees – based on a set of criteria newly announced in the IFR.

Importantly, the comment period for the IFR closes on April 10, 2020, but the effective date of the poultry-related provisions goes live on March 11.

“Access to capital is one of the most significant barriers to entry for farming, which is why Congress specifically included agriculture in the SBA’s mandate. Unfortunately, the interim final rule, as currently written, could adversely affect many independent, small, family farmers that raise broiler chickens and turkeys across the country,” Cotton and Boozman wrote. “Our constituent farmers deserve to have their voices heard prior to the implementation of a rule that will result in a significant impact on their livelihood. With the current state of the farm economy in mind, we urge SBA to take the necessary time to consider the potential significant impacts this rule would have on the sustainability of our family farm operations.”

Because SBA chose to finalize the affiliation provisions of the IFR before stakeholders even have the opportunity to provide comment, the National Chicken Council sent a letter Feb. 26 to the director of the 7(a) Loan Program and to the SBA administrator requesting a delay of the effective date of the IFR until Oct. 1, 2020, when the remainder of the rule’s provisions become final.

Both the House and Senate letters mirror this request for a delay in the effective date. This would provide stakeholders with the opportunity to comment and SBA with the opportunity to consider those comments before finalizing the rule.


TAGS: Policy
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