Business Loan Program Temporary Changes; Paycheck Protection Program — Requirements — Extension of Limited Safe Harbor With Respect to Certification Concerning

Record facts

Summary

An interim final rule issued by the U.S. Small Business Administration extending the limited safe harbor for the certification concerning need for a Paycheck Protection Program loan request, published in the Federal Register of May 19, 2020 (Vol. 85, No. 97) under Docket Number SBA-2020-0026. The rule revises the interim final rule posted April 24, 2020 by moving from May 7, 2020 to May 14, 2020 the date by which a borrower must repay its loan in full to be deemed to have made the required certification in good faith. It states that SBA, in consultation with the Department of the Treasury, will issue further guidance before May 14, 2020 on how it will review the certification. The rule makes a conforming date change to the disbursement rule published May 4, 2020, is effective May 19, 2020, and invites comments by June 18, 2020.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

29845 
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 
13563, and is considered a major rule 
under the Congressional Review Act. 
SBA, however, is proceeding under the 
emergency provision at Executive Order 
12866 Section 6(a)(3)(D) based on the 
need to move expeditiously to mitigate 
the current economic conditions arising 
from the COVID–19 emergency. This 
rule’s designation under Executive 
Order 13771 will be informed by public 
comment. 
Executive Order 12988 
SBA has drafted this rule, to the 
extent practicable, in accordance with 
the standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, to 
minimize litigation, eliminate 
ambiguity, and reduce burden. The rule 
has no preemptive or retroactive effect. 
Executive Order 13132 
SBA has determined that this rule 
will not have substantial direct effects 
on the States, on the relationship 
between the National Government and 
the States, or on the distribution of 
power and responsibilities among the 
various layers of government. Therefore, 
SBA has determined that this rule has 
no federalism implications warranting 
preparation of a federalism assessment. 
Paperwork Reduction Act, 44 U.S.C. 
Chapter 35 
SBA has determined that this rule 
will not impose new or modify existing 
recordkeeping or reporting requirements 
under the Paperwork Reduction Act. 
Regulatory Flexibility Act (RFA) 
The Regulatory Flexibility Act (RFA) 
generally requires that when an agency 
issues a proposed rule, or a final rule 
pursuant to section 553(b) of the APA or 
another law, the agency must prepare a 
regulatory flexibility analysis that meets 
the requirements of the RFA and 
publish such analysis in the Federal 
Register. 5 U.S.C. 603, 604. Specifically, 
the RFA normally requires agencies to 
describe the impact of a rulemaking on 
small entities by providing a regulatory 
impact analysis. Such analysis must 
address the consideration of regulatory 
options that would lessen the economic 
effect of the rule on small entities. The 
RFA defines a ‘‘small entity’’ as (1) a 
proprietary firm meeting the size 
standards of the Small Business 
Administration (SBA); (2) a nonprofit 
organization that is not dominant in its 
field; or (3) a small government 
jurisdiction with a population of less 
than 50,000. 5 U.S.C. 601(3)–(6). Except 
for such small government jurisdictions, 
neither State nor local governments are 
‘‘small entities.’’ Similarly, for purposes 
of the RFA, individual persons are not 
small entities. The requirement to 
conduct a regulatory impact analysis 
does not apply if the head of the agency 
‘‘certifies that the rule will not, if 
promulgated, have a significant 
economic impact on a substantial 
number of small entities.’’ 5 U.S.C. 
605(b). The agency must, however, 
publish the certification in the Federal 
Register at the time of publication of the 
rule, ‘‘along with a statement providing 
the factual basis for such certification.’’ 
If the agency head has not waived the 
requirements for a regulatory flexibility 
analysis in accordance with the RFA’s 
waiver provision, and no other RFA 
exception applies, the agency must 
prepare the regulatory flexibility 
analysis and publish it in the Federal 
Register at the time of promulgation or, 
if the rule is promulgated in response to 
an emergency that makes timely 
compliance impracticable, within 180 
days of publication of the final rule. 5 
U.S.C. 604(a), 608(b). Rules that are 
exempt from notice and comment are 
also exempt from the RFA requirements, 
including conducting a regulatory 
flexibility analysis, when among other 
things the agency for good cause finds 
that notice and public procedure are 
impracticable, unnecessary, or contrary 
to the public interest. SBA Office of 
Advocacy guide: How to Comply with 
the Regulatory Flexibility Act, Ch.1. p.9. 
Accordingly, SBA is not required to 
conduct a regulatory flexibility analysis. 
Jovita Carranza, 
Administrator. 
[FR Doc. 2020–10658 Filed 5–18–20; 8:45 am] 
BILLING CODE P 
SMALL BUSINESS ADMINISTRATION 
13 CFR Part 120 
[Docket Number SBA–2020–0026] 
RIN 3245–AH41 
Business Loan Program Temporary 
Changes; Paycheck Protection 
Program—Requirements—Extension 
of Limited Safe Harbor With Respect to 
Certification Concerning Need for PPP 
Loan Request 
AGENCY: U.S. Small Business 
Administration. 
ACTION: Interim final rule. 
SUMMARY: On April 24, 2020, the U.S. 
Small Business Administration (SBA) 
posted an interim final rule relating to 
promissory notes, authorizations, 
affiliation, and eligibility in connection 
with the implementation of a temporary 
new program, titled the ‘‘Paycheck 
Protection Program.’’ The Paycheck 
Protection Program was established 
under the Coronavirus Aid, Relief, and 
Economic Security Act (CARES Act or 
the Act). This interim final rule revises 
the interim final rule posted on April 
24, 2020, by extending the date by 
which certain Paycheck Protection 
Program borrowers may repay their 
loans from May 7, 2020 to May 14, 2020, 
in order to avail themselves of a safe 
harbor with respect to a certification 
required by the Act, and makes other 
conforming changes. This interim final 
rule supplements SBA’s implementation 
of the Act and requests public comment. 
DATES: 
Effective date: This rule is effective 
May 19, 2020. 
Applicability date: This interim final 
rule applies to borrowers who applied 
for loans under the Paycheck Protection 
Program. 
Comment date: Comments must be 
received on or before June 18, 2020. 
ADDRESSES: You may submit comments, 
identified by number SBA–2020–0026 
through the Federal eRulemaking Portal: 
http://www.regulations.gov. Follow the 
instructions for submitting comments. 
SBA will post all comments on 
www.regulations.gov. If you wish to 
submit confidential business 
information (CBI) as defined in the User 
Notice at www.regulations.gov, please 
send an email to ppp-ifr@sba.gov. 
Highlight the information that you 
consider to be CBI and explain why you 
believe SBA should hold this 
information as confidential. SBA will 
review the information and make the 
final determination whether it will 
publish the information. 
FOR FURTHER INFORMATION CONTACT: A 
Call Center Representative at 833–572– 
0502, or the local SBA Field Office; the 
list of offices can be found at https://
www.sba.gov/tools/local-assistance/ 
districtoffices. 
SUPPLEMENTARY INFORMATION: 
I. Background Information 
On March 13, 2020, President Trump 
declared the ongoing Coronavirus 
Disease 2019 (COVID–19) pandemic of 
sufficient severity and magnitude to 
warrant an emergency declaration for all 
States, territories, and the District of 
Columbia. With the COVID–19 
emergency, many small businesses 
nationwide are experiencing economic 
hardship as a direct result of the 
Federal, State, tribal, and local public 
health measures that are being taken to 
minimize the public’s exposure to the 
virus. These measures, some of which 
are government-mandated, are being 
implemented nationwide and include 
the closures of restaurants, bars, and 
VerDate Sep<11>2014 
17:20 May 18, 2020
Jkt 250001
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
E:\FR\FM\19MYR1.SGM
19MYR1

29846 
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 
1 This guidance is available at https://
www.sba.gov/sites/default/files/2020-05/Paycheck- 
Protection-Program-Frequently-Asked-Questions_
05%2013%2020_2.pdf. 
gyms. In addition, based on the advice 
of public health officials, other 
measures, such as keeping a safe 
distance from others or even stay-at- 
home orders, are being implemented, 
resulting in a dramatic decrease in 
economic activity as the public avoids 
malls, retail stores, and other 
businesses. 
On March 27, 2020, the President 
signed the Coronavirus Aid, Relief, and 
Economic Security Act (the CARES Act 
or the Act) (Pub. L. 116–136) to provide 
emergency assistance and health care 
response for individuals, families, and 
businesses affected by the coronavirus 
pandemic. The Small Business 
Administration (SBA) received funding 
and authority through the Act to modify 
existing loan programs and establish a 
new loan program to assist small 
businesses nationwide adversely 
impacted by the COVID–19 emergency. 
Section 1102 of the Act temporarily 
permits SBA to guarantee 100 percent of 
7(a) loans under a new program titled 
the ‘‘Paycheck Protection Program.’’ 
Section 1106 of the Act provides for 
forgiveness of up to the full principal 
amount of qualifying loans guaranteed 
under the Paycheck Protection Program. 
On April 24, 2020, the President signed 
the Paycheck Protection Program and 
Health Care Enhancement Act (Pub. L. 
116–139), which provided additional 
funding and authority for the PPP. 
II. Comments and Immediate Effective 
Date 
This interim final rule is effective 
without advance notice and public 
comment because section 1114 of the 
Act authorizes SBA to issue regulations 
to implement Title I of the Act without 
regard to notice requirements. In 
addition, SBA has determined that there 
is good cause for dispensing with 
advance public notice and comment on 
the ground that it would be contrary to 
the public interest. Specifically, SBA, in 
consultation with the Department of the 
Treasury, intends to issue additional 
guidance with regard to the safe harbor 
and extending the safe harbor deadline 
from May 7 to May 14 will afford 
Paycheck Protection Program borrowers 
time to review the forthcoming SBA 
guidance and decide whether to avail 
themselves of the safe harbor. SBA 
previously announced this intended 
extension in nonbinding guidance 
published on May 5, 2020. Advance 
notice and public comment would 
defeat the purpose of this interim final 
rule given the timeline for the existing 
safe harbor and short-term, temporary 
nature of this program. These same 
reasons provide good cause for SBA to 
dispense with the 30-day delayed 
effective date provided in the 
Administrative Procedure Act. 
Although this interim final rule is 
effective immediately, comments are 
solicited from interested members of the 
public on all aspects of the interim final 
rule, including section III below. These 
comments must be submitted on or 
before June 18, 2020. SBA will consider 
these comments and the need for 
making any revisions as a result of these 
comments. 
III. Paycheck Protection Program 
Requirements for Extension of Safe 
Harbor With Respect to Certification 
Concerning Need for PPP Loan Request 
The CARES Act was enacted to 
provide immediate assistance to 
individuals, families, and organizations 
affected by the COVID–19 emergency. 
Among the provisions contained in the 
CARES Act are provisions authorizing 
SBA to temporarily guarantee loans 
under the Paycheck Protection Program 
(PPP). Loans under the PPP are 100 
percent guaranteed by SBA, and the full 
principal amount of the loans and any 
accrued interest may qualify for loan 
forgiveness. The Act requires each 
applicant applying for a PPP loan to 
certify ‘‘that the uncertainty of current 
economic conditions makes necessary 
the loan request to support the ongoing 
obligations’’ of the applicant. On April 
24, 2020, SBA posted on its website an 
interim final rule (the Fourth PPP 
Interim Final Rule), which also was 
published in the Federal Register on 
April 28, 2020 (85 FR 23450), to provide 
relief to PPP borrowers who applied for 
and received PPP loans based on a 
misunderstanding or misapplication of 
the required certification standard. The 
Fourth PPP Interim Final Rule provides 
that any borrower that applied for a PPP 
loan and repays the loan in full by May 
7, 2020, will be deemed by SBA to have 
made the required certification in good 
faith. SBA, in consultation with the 
Department of the Treasury, will issue 
additional guidance before May 14, 
2020 concerning how SBA will review 
the required certification to help PPP 
borrowers evaluate whether they may 
have misunderstood or misapplied the 
statutory certification standard.1 Based 
on this upcoming guidance, SBA, in 
consultation with the Department of the 
Treasury, determined that it is necessary 
and appropriate to extend the safe 
harbor deadline for repaying PPP loans 
from May 7, 2020 to May 14, 2020. 
Limited Safe Harbor With Respect to 
Certification Concerning Need for PPP 
Loan Request 
Consistent with section 1102 of the 
CARES Act, the Borrower Application 
Form requires PPP applicants to certify 
that ‘‘[c]urrent economic uncertainty 
makes this loan request necessary to 
support the ongoing operations of the 
Applicant.’’ Any borrower that applied 
for a PPP loan and repays the loan in 
full by May 14, 2020 will be deemed by 
SBA to have made the required 
certification in good faith. The 
Administrator, in consultation with the 
Secretary, determined that this safe 
harbor is necessary and appropriate to 
ensure that borrowers promptly repay 
PPP loan funds that the borrower 
obtained based on a misunderstanding 
or misapplication of the required 
certification standard. 
The extension of the safe harbor 
requires a corresponding date change to 
the interim final rule that SBA posted 
on its website on April 28, 2020, which 
was published in the Federal Register 
on May 4, 2020 (85 FR 26321), regarding 
PPP loan disbursements. Specifically, 
Part III.1.b. provides that Lenders must 
electronically upload SBA Form 1502 
information within 20 calendar days 
after a PPP loan is approved or, for loans 
approved before the availability of the 
updated SBA Form 1502 reporting 
process, by May 18, 2020. 85 FR 26321, 
26323. Because of the extension of the 
safe harbor deadline, SBA is extending 
the deadline for the submission of the 
initial SBA Form 1502 from May 18, 
2020 to May 22, 2020. 
Additional Information 
SBA may provide further guidance, if 
needed, through SBA notices that will 
be posted on SBA’s website at 
www.sba.gov. Questions on the 
Paycheck Protection Program may be 
directed to the Lender Relations 
Specialist in the local SBA Field Office. 
The local SBA Field Office may be 
found at https://www.sba.gov/tools/ 
local-assistance/districtoffices. 
Compliance With Executive Orders 
12866, 12988, 13132, 13563, and 13771, 
the Paperwork Reduction Act (44 U.S.C. 
Ch. 35), and the Regulatory Flexibility 
Act (5 U.S.C. 601–612). 
Executive Orders 12866, 13563, and 
13771 
This interim final rule is 
economically significant for the 
purposes of Executive Orders 12866 and 
13563, and is considered a major rule 
under the Congressional Review Act. 
SBA, however, is proceeding under the 
emergency provision at Executive Order 
VerDate Sep<11>2014 
17:20 May 18, 2020
Jkt 250001
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
E:\FR\FM\19MYR1.SGM
19MYR1

29847 
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 
12866 Section 6(a)(3)(D) based on the 
need to move expeditiously to mitigate 
the current economic conditions arising 
from the COVID–19 emergency. This 
rule’s designation under Executive 
Order 13771 will be informed by public 
comment. 
Executive Order 12988 
SBA has drafted this rule, to the 
extent practicable, in accordance with 
the standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, to 
minimize litigation, eliminate 
ambiguity, and reduce burden. The rule 
has no preemptive or retroactive effect. 
Executive Order 13132 
SBA has determined that this rule 
will not have substantial direct effects 
on the States, on the relationship 
between the National Government and 
the States, or on the distribution of 
power and responsibilities among the 
various layers of government. Therefore, 
SBA has determined that this rule has 
no federalism implications warranting 
preparation of a federalism assessment. 
Paperwork Reduction Act, 44 U.S.C. 
Chapter 35 
SBA has determined that this rule 
will not impose new or modify existing 
recordkeeping or reporting requirements 
under the Paperwork Reduction Act. 
Regulatory Flexibility Act (RFA) 
The Regulatory Flexibility Act (RFA) 
generally requires that when an agency 
issues a proposed rule, or a final rule 
pursuant to section 553(b) of the APA or 
another law, the agency must prepare a 
regulatory flexibility analysis that meets 
the requirements of the RFA and 
publish such analysis in the Federal 
Register. 5 U.S.C. 603, 604. Specifically, 
the RFA normally requires agencies to 
describe the impact of a rulemaking on 
small entities by providing a regulatory 
impact analysis. Such analysis must 
address the consideration of regulatory 
options that would lessen the economic 
effect of the rule on small entities. The 
RFA defines a ‘‘small entity’’ as (1) a 
proprietary firm meeting the size 
standards of the Small Business 
Administration (SBA); (2) a nonprofit 
organization that is not dominant in its 
field; or (3) a small government 
jurisdiction with a population of less 
than 50,000. 5 U.S.C. 601(3)–(6). Except 
for such small government jurisdictions, 
neither State nor local governments are 
‘‘small entities.’’ Similarly, for purposes 
of the RFA, individual persons are not 
small entities. The requirement to 
conduct a regulatory impact analysis 
does not apply if the head of the agency 
‘‘certifies that the rule will not, if 
promulgated, have a significant 
economic impact on a substantial 
number of small entities.’’ 5 U.S.C. 
605(b). The agency must, however, 
publish the certification in the Federal 
Register at the time of publication of the 
rule, ‘‘along with a statement providing 
the factual basis for such certification.’’ 
If the agency head has not waived the 
requirements for a regulatory flexibility 
analysis in accordance with the RFA’s 
waiver provision, and no other RFA 
exception applies, the agency must 
prepare the regulatory flexibility 
analysis and publish it in the Federal 
Register at the time of promulgation or, 
if the rule is promulgated in response to 
an emergency that makes timely 
compliance impracticable, within 180 
days of publication of the final rule. 5 
U.S.C. 604(a), 608(b). Rules that are 
exempt from notice and comment are 
also exempt from the RFA requirements, 
including conducting a regulatory 
flexibility analysis, when among other 
things the agency for good cause finds 
that notice and public procedure are 
impracticable, unnecessary, or contrary 
to the public interest. SBA Office of 
Advocacy guide: How to Comply with 
the Regulatory Flexibility Act, Ch.1. p.9. 
Accordingly, SBA is not required to 
conduct a regulatory flexibility analysis. 
Jovita Carranza, 
Administrator. 
[FR Doc. 2020–10649 Filed 5–18–20; 8:45 am] 
BILLING CODE P 
SMALL BUSINESS ADMINISTRATION 
13 CFR Parts 120 and 121 
[Docket Number SBA–2020–0029] 
RIN 3245–AH43 
Business Loan Program Temporary 
Changes; Paycheck Protection 
Program—Eligibility of Certain Electric 
Cooperatives 
AGENCY: U.S. Small Business 
Administration. 
ACTION: Interim final rule. 
SUMMARY: On April 2, 2020, the U.S. 
Small Business Administration (SBA) 
posted an interim final rule announcing 
the implementation of the Coronavirus 
Aid, Relief, and Economic Security Act 
(CARES Act). The CARES Act 
temporarily adds a new program, titled 
the ‘‘Paycheck Protection Program,’’ to 
the SBA’s 7(a) Loan Program. The 
CARES Act also provides for forgiveness 
of up to the full principal amount of 
qualifying loans guaranteed under the 
Paycheck Protection Program (PPP). The 
PPP is intended to provide economic 
relief to small businesses nationwide 
adversely impacted by the Coronavirus 
Disease 2019 (COVID–19). SBA posted 
additional interim final rules on April 3, 
2020, April 14, 2020, April 24, 2020, 
April 28, 2020, April 30, 2020, May 5, 
2020, and May 8, 2020, and the 
Department of the Treasury posted an 
additional interim final rule on April 
28, 2020. This interim final rule 
supplements the previously posted 
interim final rules by providing 
guidance on additional eligibility 
requirements for certain electric 
cooperatives, and requests public 
comment. 
DATES: 
Effective date: This rule is effective 
May 19, 2020. 
Applicability date: This interim final 
rule applies to applications submitted 
under the Paycheck Protection Program 
through June 30, 2020, or until funds 
made available for this purpose are 
exhausted. 
Comment date: Comments must be 
received on or before June 18, 2020. 
ADDRESSES: You may submit comments, 
identified by number SBA–2020–0029 
through the Federal eRulemaking Portal: 
http://www.regulations.gov. Follow the 
instructions for submitting comments. 
SBA will post all comments on 
www.regulations.gov. If you wish to 
submit confidential business 
information (CBI) as defined in the User 
Notice at www.regulations.gov, please 
send an email to ppp-ifr@sba.gov. 
Highlight the information that you 
consider to be CBI and explain why you 
believe SBA should hold this 
information as confidential. SBA will 
review the information and make the 
final determination whether it will 
publish the information. 
FOR FURTHER INFORMATION CONTACT: A 
Call Center Representative at 833–572– 
0502, or the local SBA Field Office; the 
list of offices can be found at https://
www.sba.gov/tools/local-assistance/ 
districtoffices. 
SUPPLEMENTARY INFORMATION: 
I. Background Information 
On March 13, 2020, President Trump 
declared the ongoing Coronavirus 
Disease 2019 (COVID–19) pandemic of 
sufficient severity and magnitude to 
warrant an emergency declaration for all 
States, territories, and the District of 
Columbia. With the COVID–19 
emergency, many small businesses 
nationwide are experiencing economic 
hardship as a direct result of the 
Federal, State, tribal, and local public 
health measures that are being taken to 
minimize the public’s exposure to the 
virus. These measures, some of which 
VerDate Sep<11>2014 
17:20 May 18, 2020
Jkt 250001
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
E:\FR\FM\19MYR1.SGM
19MYR1

File and source

File

2020-05-19_2020-10649.pdf

Size

206,520 bytes

SHA-256

4f72dd6598b493304580ba170924630d28b67e14fc9c405aa985928000e15c5b

Our copy

2020-05-19_2020-10649.pdf

Original

www.federalregister.gov