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

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Summary

An interim final rule issued by the U.S. Small Business Administration providing a second extension of the limited safe harbor for the certification concerning need for a Paycheck Protection Program loan, and revising lender reporting, published in the Federal Register of May 26, 2020 (Vol. 85, No. 101) under Docket Number SBA-2020-0031. The rule revises the interim final rule posted May 8, 2020 by moving from May 14, 2020 to May 18, 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, giving borrowers time to review the guidance SBA issued May 13, 2020. It also extends the deadline for lenders to submit the initial SBA Form 1502 report from May 22, 2020 to the later of May 29, 2020 or 10 calendar days after disbursement or cancellation. The rule is effective May 26, 2020 and invites comments by June 25, 2020.

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This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations
Federal Register
31357 
Vol. 85, No. 101 
Tuesday, May 26, 2020 
1 https://www.sba.gov/sites/default/files/2020-05/ 
Paycheck-Protection-Program-Frequently-Asked- 
Questions_05%2013%2020_2.pdf. 
2 Id. 
SMALL BUSINESS ADMINISTRATION 
13 CFR Part 120 
[Docket Number SBA–2020–0031] 
RIN 3245–AH45 
Business Loan Program Temporary 
Changes; Paycheck Protection 
Program—Second Extension of 
Limited Safe Harbor With Respect to 
Certification Concerning Need for PPP 
Loan and Lender Reporting 
AGENCY: U.S. Small Business 
Administration. 
ACTION: Interim final rule. 
SUMMARY: On May 8, 2020, the U.S. 
Small Business Administration (SBA) 
posted an interim final rule relating to 
the extension of a safe harbor with 
respect to a certification required by the 
Coronavirus Aid, Relief, and Economic 
Security Act (CARES Act or the Act) in 
connection with the implementation of 
a temporary new program, titled the 
‘‘Paycheck Protection Program.’’ This 
interim final rule revises the interim 
final rule posted on May 8, 2020, and 
published in the Federal Register on 
May 19, 2020, by extending the date by 
which certain Paycheck Protection 
Program (PPP) borrowers may repay 
their loans from May 14, 2020 to May 
18, 2020, in order to avail themselves of 
a safe harbor with respect to the 
certification required by the Act, and by 
extending the timeframe for submission 
of the initial SBA Form 1502 report for 
PPP loans. This interim final rule 
supplements SBA’s implementation of 
the Act and requests public comment. 
DATES: 
Effective date: This rule is effective 
May 26, 2020. 
Comment date: Comments must be 
received on or before June 25, 2020. 
ADDRESSES: You may submit comments, 
identified by number SBA–2020–0031 
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 
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, issued additional guidance 
with regard to the safe harbor posted on 
SBA’s website on May 13, 2020. See 
FAQ 46 (posted May 13, 2020).1 SBA, in 
consultation with the Department of the 
Treasury, determined that extending the 
safe harbor deadline from May 14, 2020 
to May 18, 2020 would afford Paycheck 
Protection Program borrowers time to 
review SBA’s May 13, 2020 guidance 
and decide whether to avail themselves 
of the safe harbor. SBA previously 
announced this intended extension in 
nonbinding guidance published on May 
13, 2020. See FAQ 47 (posted on May 
13, 2020).2 SBA, in consultation with 
the Department of the Treasury, 
determined that the immediate effective 
date of this interim final rule would 
benefit lenders by allowing them to 
swiftly close and disburse loans to small 
businesses and fulfill associated 
reporting requirements. Advance notice 
and public comment would defeat the 
purpose of this interim final rule given 
the existing May 22, 2020 deadline for 
lenders to submit the initial SBA Form 
1502 report for PPP loans, which this 
interim final rule extends to the later of 
(1) May 29, 2020; or (2) 10 calendar days 
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Federal Register / Vol. 85, No. 101 / Tuesday, May 26, 2020 / Rules and Regulations 
after disbursement or cancellation of a 
PPP loan. 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 25, 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 Second Extension of 
Limited Safe Harbor With Respect to 
Certification Concerning Need for PPP 
Loan Request and Lender Reporting 
Overview 
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. Additional information 
about the PPP is available in interim 
final rules published by SBA and the 
Department of the Treasury in the 
Federal Register (85 FR 20811, 85 FR 
20817, 85 FR 21747, 85 FR 23450, 85 FR 
23917, 85 FR 26321, 85 FR 26324, 85 FR 
27287, 85 FR 29845, 85 FR 29842, 85 FR 
29847, and 85 FR 30835) (collectively, 
the PPP Interim Final Rules). 
1. Second Extension of Limited Safe 
Harbor With Respect to Certification 
Concerning Need for PPP Loan Request 
The Act requires each applicant 
applying for a PPP loan to certify in 
good faith ‘‘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 that applied for and received 
PPP loans based on a misunderstanding 
or misapplication of the required good- 
faith 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. On May 5, 2020, SBA, in 
consultation with the Department of the 
Treasury, issued additional guidance to 
extend the safe harbor deadline from 
May 7, 2020 to May 14, 2020. See FAQ 
43 (posted May 5, 2020) and SBA’s 
interim final rule on Extension of 
Limited Safe Harbor with Respect to 
Certification Concerning Need for PPP 
Loan Request, posted May 8, 2020, and 
published in the Federal Register on 
May 19, 2020 (85 FR 29845). SBA, in 
consultation with the Department of the 
Treasury, issued additional guidance on 
May 13, 2020 concerning how SBA will 
review the required good-faith 
certification to help PPP borrowers 
evaluate whether they may have 
misunderstood or misapplied the 
statutory certification standard. See 
FAQ 46 (posted May 13, 2020). This 
guidance included an additional safe 
harbor providing that any PPP borrower, 
together with its affiliates, that received 
PPP loans with an original principal 
amount of less than $2 million will be 
deemed to have made the required 
certification concerning the necessity of 
the loan request in good faith. Based on 
this guidance, SBA, in consultation with 
the Department of the Treasury, 
determined that it is necessary and 
appropriate to further extend the safe 
harbor deadline for repaying PPP loans 
from May 14, 2020 to May 18, 2020. See 
FAQ 47 (posted May 13, 2020). 
Second Extension of Limited Safe 
Harbor with Respect to Good-Faith 
Certification Concerning Need for PPP 
Loan Request. Consistent with section 
1102 of the CARES Act, the Borrower 
Application Form requires PPP 
applicants to certify in good faith 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 18, 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 statutory 
certification standard. 
2. Lender Reporting 
The extension of the safe harbor and 
administrative convenience necessitate 
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 (the May 4 
Interim Final Rule), as amended by the 
interim final rule that SBA posted on its 
website on May 8, 2020 (the May 8 
Interim Final Rule). Specifically, Part 
III.1.b. of the May 4 Interim Final Rule 
provided that lenders must 
electronically upload SBA Form 1502 
reporting 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. The May 
8 Interim Final Rule extended the 
deadline for the submission of the 
initial SBA Form 1502 reporting 
information from May 18, 2020 to May 
22, 2020 because of the extension of the 
safe harbor deadline to May 14, 2020. 
Because of the extension of the safe 
harbor deadline from May 14, 2020 to 
May 18, 2020 and to promote the 
administrability of the PPP, SBA is 
further extending the timelines for 
reporting Form 1502 information, such 
that lenders must electronically upload 
SBA Form 1502 reporting information 
by the later of: (1) May 29, 2020, or (2) 
10 calendar days after disbursement or 
cancellation of a PPP loan. 
As noted in the May 4 Interim Final 
Rule, lenders must disburse PPP loans 
within 10 calendar days of loan 
approval; a loan is considered approved 
when the loan is assigned a loan 
number by the SBA. Loans for which 
funds have not been disbursed because 
a borrower has not submitted required 
loan documentation within 20 calendar 
days of loan approval shall be cancelled 
by the lender. These two requirements 
remain unchanged. 
The extension of the safe harbor and 
administrative convenience also require 
an identical corresponding date change 
to the interim final rule that SBA posted 
on May 13, 2020, regarding PPP loan 
increases. Specifically, that interim final 
rule states, in Parts III and III.2.b., that 
SBA Form 1502 reporting information is 
required to be submitted within 20 
calendar days after a PPP loan is 
approved or, for loans approved before 
availability of the updated SBA Form 
1502 reporting process, by May 22, 
2020. As described above, SBA is 
further extending timelines for reporting 
Form 1502 information, such that 
lenders must electronically upload SBA 
Form 1502 reporting information by the 
later of: (1) May 29, 2020, or (2) 10 
calendar days after disbursement or 
cancellation of a PPP loan. 
The Administrator, in consultation 
with the Secretary, believes that 
clarifying timelines for lender reporting 
will enable lenders to swiftly close and 
disburse loans and will enhance the 
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Federal Register / Vol. 85, No. 101 / Tuesday, May 26, 2020 / Rules and Regulations 
administrability of key program 
components by enabling lenders and 
SBA to process data regarding loan 
disbursements and cancelations in a 
streamlined manner. 
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 
12866 Section 6(a)(3)(D), and the good 
cause exemption under 5 U.S.C. 809(2), 
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. 2020–11292 Filed 5–22–20; 8:45 am] 
BILLING CODE P 
DEPARTMENT OF TRANSPORTATION 
Federal Aviation Administration 
14 CFR Part 39 
[Docket No. FAA–2020–0064; Project 
Identifier 2019–SW–096–AD; Amendment 
39–21132; AD 2020–11–07] 
RIN 2120–AA64 
Airworthiness Directives; MD 
Helicopter Inc., Helicopters 
AGENCY: Federal Aviation 
Administration (FAA), DOT. 
ACTION: Final rule. 
SUMMARY: The FAA is adopting a new 
airworthiness directive (AD) for MD 
Helicopters Inc., (MDHI) Model 369D, 
369E, 369FF, 369H, 369HE, 369HM, 
369HS, 500N, and 600N helicopters. 
This AD was prompted by a report of 
non-conforming main rotor (M/R) hub 
lead-lag bolts (bolts). This AD requires 
removing certain bolts from service. The 
FAA is issuing this AD to address the 
unsafe condition on these products. 
DATES: This AD is effective June 30, 
2020. 
The Director of the Federal Register 
approved the incorporation by reference 
of certain publications listed in this AD 
as of June 30, 2020. 
ADDRESSES: For service information 
identified in this final rule, contact MD 
Helicopters, Inc., Attn: Customer 
Support Division, 4555 E. McDowell 
Rd., Mail Stop M615, Mesa, AZ 85215– 
9734; telephone 1–800–388–3378; fax 
480–346–6813; or at https://
www.mdhelicopters.com. You may view 
this service information at the FAA, 
Office of the Regional Counsel, 
Southwest Region, 10101 Hillwood 
Pkwy, Room 6N–321, Fort Worth, TX 
76177. For information on the 
availability of this material at the FAA, 
call 817–222–5110. It is also available 
on the internet at http://
www.regulations.gov by searching for 
and locating Docket No. FAA–2020– 
0064. 
Examining the AD Docket 
You may examine the AD docket on 
the internet at https://
www.regulations.gov by searching for 
and locating Docket No. FAA–2020– 
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