Attorney General Charity Clark announced on Mar. 3 that she has joined a coalition of 20 attorneys general to oppose an interim final rule from the U.S. Small Business Administration (SBA) that would preempt state and local permitting requirements after declared disasters.
The attorneys general say the new SBA rule could undermine established health and safety standards by allowing contractors to self-certify compliance with local building, health, and safety codes when using funds from the SBA’s Disaster Loan Program. They argue this change is unlawful under federalism principles and may create confusion and safety risks for communities recovering from natural disasters.
According to the announcement, the SBA’s Disaster Loan Program was created under the Small Business Act of 1958 to help survivors repair or replace property damaged in Presidentially-declared disasters. The current controversy began after President Trump signed Executive Order 14377 on January 23, 2026, which criticized California and Los Angeles County governments for delays in wildfire recovery efforts. Six days later, the SBA issued its interim final rule without advance notice or public comment.
Clark said that regulation of construction has traditionally been managed by state and local governments for public health, safety, and welfare reasons. She added that Congress did not grant authority to override these laws through federal programs like those administered by the SBA.
The attorneys general also argue there is no evidence that state or local permits are causing significant delays in disaster recovery funding or rebuilding efforts. Instead, they point to other factors such as insurance payout issues or high out-of-pocket costs as more likely causes of delay. Local agencies have reportedly accelerated permit approvals following recent disasters.
A copy of the coalition’s comment letter opposing the interim final rule is available on Attorney General Clark’s website.
