Business Loan Program Temporary Changes; Paycheck Protection Program — Revisions to First Interim Final Rule

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Summary

An interim final rule of the U.S. Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection Program—Revisions to First Interim Final Rule, published in the Federal Register of June 16, 2020, Vol. 85, No. 116, under 13 CFR Part 120, Docket No. SBA-2020-0035, RIN 3245-AH49. It revises SBA's interim final rule published April 15, 2020 implementing sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act, to conform to the Paycheck Protection Program Flexibility Act of 2020 signed into law June 5, 2020. The rule changes provisions on loan maturity, deferral of loan payments and forgiveness, and makes conforming amendments to the use of PPP loan proceeds. Forgiveness and deferral provisions are effective March 27, 2020, the maturity provision June 5, 2020, and the rest June 12, 2020, with comments due July 16, 2020.

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36308 
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Rules and Regulations 
revising the TN Americas LLC 
NUHOMS® EOS Dry Spent Fuel Storage 
System listing within the ‘‘List of 
approved spent fuel storage casks’’ to 
include Amendment No. 1 to Certificate 
of Compliance No. 1042. Amendment 
No. 1 makes the following changes: 
Adds a new basket type (Type 4) to 
allow for the loading of intact, damaged, 
or failed fuel; adds another new basket 
type (Type 5); accepts fuel assemblies 
with a minimum two-year cooling time, 
in selected locations within the basket; 
and adds the NUHOMS® MATRIX 
design as an alternative to the EOS 
horizontal storage module design for the 
storage of spent fuel. Amendment No. 1 
also makes other additional revisions to 
the certificate of compliance and the 
technical specifications for consistency 
and clarity. 
DATES: 
Effective date: The effective date of 
June 17, 2020, for the direct final rule 
published April 3, 2020 (85 FR 18857), 
is confirmed. 
ADDRESSES: Please refer to Docket ID 
NRC–2019–0224 when contacting the 
NRC about the availability of 
information for this action. You may 
obtain publicly-available information 
related to this action by any of the 
following methods: 
• Federal Rulemaking Website: Go to 
https://www.regulations.gov and search 
for Docket ID NRC–2019–0224. Address 
questions about NRC dockets to Carol 
Gallagher; telephone: 301–415–3463; 
email: Carol.Gallagher@nrc.gov. For 
technical questions, contact the 
individuals listed in the FOR FURTHER 
INFORMATION CONTACT section of this 
document. 
• NRC’s Agencywide Documents 
Access and Management System 
(ADAMS): You may obtain publicly- 
available documents online in the 
ADAMS Public Documents collection at 
https://www.nrc.gov/reading-rm/ 
adams.html. To begin the search, select 
‘‘Begin Web-based ADAMS Search.’’ For 
problems with ADAMS, please contact 
the NRC’s Public Document Room (PDR) 
reference staff at 1–800–397–4209, 301– 
415–4737, or by email to pdr.resource@
nrc.gov. The proposed amendment to 
the certificate, the proposed changes to 
the technical specifications, and 
preliminary safety evaluation report are 
available in ADAMS under Accession 
No. ML19290H600. The final 
amendment to the certificate, final 
changes to the technical specifications, 
and final safety evaluation report can 
also be viewed in ADAMS under 
Accession No. ML20136A048. 
• Attention: The Public Document 
Room (PDR), where you may examine 
and order copies of public documents, 
is currently closed. You may submit 
your request to the PDR via email at 
PDR.Resource@nrc.gov or call 1–800– 
397–4209 between 8:00 a.m. and 4:00 
p.m. (EST), Monday through Friday, 
except Federal holidays. 
FOR FURTHER INFORMATION CONTACT: 
Christian Jacobs, Office of Nuclear 
Material Safety and Safeguards; 
telephone: 301–415–6825; email: 
Christian.Jacobs@nrc.gov or Nicole 
Fields, Office of Nuclear Material Safety 
and Safeguards, telephone: 630–829– 
9570; email: Nichole.Fields@nrc.gov. 
Both are staff of the U.S. Nuclear 
Regulatory Commission, Washington, 
DC 20555–0001. 
SUPPLEMENTARY INFORMATION: On April 
3, 2020 (85 FR 18857), the NRC 
published a direct final rule amending 
its regulations in part 72 of title 10 of 
the Code of Federal Regulations by 
revising the TN Americas LLC 
NUHOMS® EOS Dry Spent Fuel Storage 
System listing within the ‘‘List of 
approved spent fuel storage casks’’ to 
include Amendment No. 1 to Certificate 
of Compliance No. 1042. Amendment 
No. 1 makes the following changes: 
Adds a new basket type (Type 4) to 
allow for the loading of intact, damaged, 
or failed fuel; adds another new basket 
type (Type 5); accepts fuel assemblies 
with a minimum two-year cooling time, 
in selected locations within the basket; 
and adds the NUHOMS® MATRIX 
design as an alternative to the EOS 
horizontal storage module design for the 
storage of spent fuel. Amendment No. 1 
also makes other additional revisions to 
the certificate of compliance and the 
technical specifications for consistency 
and clarity. 
In the direct final rule published on 
April 3, 2020, the NRC stated that if no 
significant adverse comments were 
received, the direct final rule would 
become effective on June 17, 2020. The 
NRC received and docketed two 
comments on the companion proposed 
rule (85 FR 18876; April 3, 2020). 
Electronic copies of these comments can 
be obtained from the Federal 
Rulemaking website https://
www.regulations.gov under Docket ID 
NRC–2019–0224, and are also available 
in ADAMS under Accession Nos. 
ML20118C707 and ML20126G364. 
The NRC evaluated the comments 
against the criteria described in the 
direct final rule and determined that 
they were not significant and adverse. 
Specifically, the comments were outside 
the scope of this rulemaking, did not 
oppose the rule, or did not propose a 
change to the rule, such that the rule 
would be ineffective or unacceptable 
without incorporation of the change. 
Therefore, the direct final rule will 
become effective as scheduled. 
Dated: May 26, 2020. 
For the Nuclear Regulatory Commission. 
Cindy K. Bladey, 
Chief, Regulatory Analysis and Rulemaking 
Support Branch, Division of Rulemaking, 
Environmental, and Financial Support, Office 
of Nuclear Material Safety and Safeguards. 
[FR Doc. 2020–11691 Filed 6–15–20; 8:45 am] 
BILLING CODE 7590–01–P 
SMALL BUSINESS ADMINISTRATION 
13 CFR Part 120 
[Docket No. SBA–2020–0035] 
RIN 3245–AH49 
Business Loan Program Temporary 
Changes; Paycheck Protection 
Program—Revisions to First Interim 
Final Rule 
AGENCY: U.S. Small Business 
Administration. 
ACTION: Interim final rule. 
SUMMARY: On April 2, 2020, the U.S. 
Small Business Administration (SBA) 
posted on its website an interim final 
rule relating to the implementation of 
sections 1102 and 1106 of the 
Coronavirus Aid, Relief, and Economic 
Security Act (CARES Act or the Act) 
(published in the Federal Register on 
April 15, 2020). Section 1102 of the Act 
temporarily adds a new product, titled 
the ‘‘Paycheck Protection Program,’’ to 
the U.S. Small Business 
Administration’s (SBA’s) 7(a) Loan 
Program. Subsequently, SBA issued a 
number of interim final rules 
implementing the Paycheck Protection 
Program. On June 5, 2020, the Paycheck 
Protection Program Flexibility Act of 
2020 (Flexibility Act) was signed into 
law, amending the CARES Act. This 
interim final rule revises SBA’s interim 
final rule published in the Federal 
Register on April 15, 2020, by changing 
key provisions, such as the loan 
maturity, deferral of loan payments, and 
forgiveness provisions, to conform to 
the Flexibility Act. SBA also is making 
conforming amendments to the use of 
PPP loan proceeds for consistency with 
amendments made in the Flexibility 
Act. Several of these amendments are 
retroactive to the date of enactment of 
the CARES Act, as required by section 
3(d) of the Flexibility Act. 
DATES: 
Effective Dates: The provisions in this 
interim final rule related to loan 
forgiveness and deferral periods for PPP 
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loans are effective March 27, 2020. The 
provision in this interim final rule 
relating to the maturity date of PPP 
loans is effective June 5, 2020. The 
remaining provisions in this interim 
final rule are effective June 12, 2020. 
Comment Date: Comments must be 
received on or before July 16, 2020. 
ADDRESSES: You may submit comments, 
identified by number SBA–2020–0035, 
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, 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, have been 
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, have been 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. 
A more detailed discussion of sections 
1102 and 1106 of the Act is found in 
section III below. 
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. On 
June 5, 2020, the President signed the 
Paycheck Protection Program Flexibility 
Act of 2020 (Flexibility Act) (Pub. L. 
116–142), which changes key provisions 
of the Paycheck Protection Program, 
including provisions relating to the 
maturity of PPP loans, the deferral of 
PPP loan payments, and the forgiveness 
of PPP loans. Section 3(d) of the 
Flexibility Act provides that the 
amendments relating to PPP loan 
forgiveness and extension of the deferral 
period for PPP loans shall be effective 
as if included in the CARES Act, which 
means that they are retroactive to March 
27, 2020. Section 2 of the Flexibility Act 
provides that the amendment relating to 
the extension of the maturity date for 
PPP loans shall take effect on the date 
of enactment (June 5, 2020). Under the 
Flexibility Act, the extension of the 
maturity date for PPP loans is applicable 
to PPP loans made on or after that date, 
and lenders and borrowers may 
mutually agree to modify PPP loans 
made before such date to reflect the 
longer maturity. 
II. Comments and Retroactive/ 
Immediate Effective Date 
This interim final rule is effective 
without advance notice and public 
comment because section 1114 of the 
CARES 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 grounds that that 
it would be contrary to the public 
interest. Specifically, advance public 
notice and comment would defeat the 
purpose of this interim final rule given 
that SBA’s authority to guarantee PPP 
loans expires on June 30, 2020, and that 
many PPP borrowers can now apply for 
loan forgiveness following the end of 
their eight-week covered period. 
Providing borrowers and lenders with 
certainty on both loan requirements and 
loan forgiveness requirements following 
the enactment of the Flexibility Act will 
enhance the ability of lenders to make 
loans and process loan forgiveness 
applications, particularly in light of the 
fact that most of the Flexibility Act’s 
provisions are retroactive to March 27, 
2020. Specifically, small businesses that 
have yet to apply for and receive a PPP 
loan need to be informed of the terms 
of PPP loans as soon as possible, 
because the last day on which a lender 
can obtain an SBA loan number for a 
PPP loan is June 30, 2020. Borrowers 
who already have applied for and 
received a PPP loan need certainty 
regarding how loan proceeds must be 
used during the covered period, as 
amended by the Flexibility Act, so that 
they can maximize the amount of loan 
forgiveness. 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 on or before date of filing, 
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 July 16, 2020. 
The SBA will consider these comments, 
comments received on the interim final 
rule posted on SBA’s website April 2, 
2020 (the First Interim Final Rule) and 
published in the Federal Register on 
April 15, 2020, and the need for making 
any revisions as a result of these 
comments. 
III. Paycheck Protection Program— 
Revisions to First Interim Final Rule 
(85 FR 20811) 
Overview 
The CARES Act was enacted to 
provide immediate assistance to 
individuals, families, and businesses 
affected by the COVID–19 emergency. 
Among the provisions contained in the 
CARES Act are provisions authorizing 
SBA to temporarily guarantee loans 
under a new 7(a) loan program titled the 
‘‘Paycheck Protection Program.’’ Loans 
guaranteed under the Paycheck 
Protection Program (PPP) will be 100 
percent guaranteed by SBA, and the full 
principal amount of the loans may 
qualify for loan forgiveness. The 
Flexibility Act amends the CARES Act 
and amends provisions relating to loan 
terms and loan forgiveness. The purpose 
of this interim final rule is to make 
changes to the First Interim Final Rule, 
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1 See https://www.sba.gov/document/support-- 
faq-lenders-borrowers. 
2 See https://www.sba.gov/funding-programs/ 
loans/coronavirus-relief-options/paycheck- 
protection-program. 
3 Under section 3(b)(1) of the Flexibility Act, the 
loan forgiveness covered period of any borrower 
will end no later than December 31, 2020. 
posted on SBA’s website on April 2, 
2020, and published in the Federal 
Register on April 15, 2020 (85 FR 
20811). The First Interim Final Rule, as 
amended by this interim final rule, 
should be interpreted consistent with 
the frequently asked questions (FAQs) 
regarding the PPP that are posted on 
SBA’s website 1 and the other interim 
final rules issued regarding the PPP.2 
1. Changes to the First Interim Final 
Rule 
a. Covered Period for PPP Loans 
Section 3(a) of the Flexibility Act 
amended the definition of ‘‘covered 
period’’ for a PPP loan from ‘‘the period 
beginning on February 15, 2020 and 
ending on June 30, 2020’’ to ‘‘the period 
beginning on February 15, 2020 and 
ending on December 31, 2020.’’ 
Therefore, Part III.2.g.iii. of the First 
Interim Final Rule (85 FR 20811, 20813) 
is revised by striking ‘‘June 30, 2020’’ 
and replacing it with ‘‘December 31, 
2020’’. Section 3(d) of the Flexibility 
Act provides that this amendment shall 
be effective as if included in the CARES 
Act, which was signed into law on 
March 27, 2020. 
This amendment by the Flexibility 
Act applies to the definition of ‘‘covered 
period’’ that appears in section 1102 of 
the CARES Act, governing loan use, 
loan eligibility, and related 
requirements. It does not alter the 
meaning of ‘‘covered period’’ that 
appears in section 1106 of the CARES 
Act governing loan forgiveness, which is 
addressed by a different provision of the 
Flexibility Act. 
b. Maturity Date for PPP Loans 
Section 2(a) of the Flexibility Act 
amended the CARES Act to provide a 
minimum maturity of five years for all 
PPP loans made on or after the date of 
enactment of the Flexibility Act. 
Therefore, Part III.2.j. of the First 
Interim Final Rule (85 FR 20811, 20813) 
is revised to read as follows: 
j. What will be the maturity date on 
a PPP loan? 
For loans made before June 5, 2020, 
the maturity is two years; however, 
borrowers and lenders may mutually 
agree to extend the maturity of such 
loans to five years. For loans made on 
or after June 5, the maturity is five years. 
Section 2 of the Paycheck Protection 
Program Flexibility Act of 2020 
(Flexibility Act) amended the CARES 
Act to provide a minimum maturity of 
5 years for all PPP loans made on or 
after its enactment. The Administrator, 
in consultation with the Secretary, 
determined that the date SBA assigns a 
loan number to the PPP loan provides 
an efficient, transparent, and auditable 
means of determining when a PPP loan 
is ‘‘made’’ that provides certainty to 
lenders. While the CARES Act provides 
that a loan will have a maximum 
maturity of up to ten years from the date 
the borrower applies for loan 
forgiveness, the Administrator, in 
consultation with the Secretary, 
determined that a five-year loan term is 
sufficient in light of the temporary 
economic dislocations caused by the 
coronavirus. Specifically, the 
considerable economic disruption 
caused by the coronavirus is expected to 
abate well before the five-year maturity 
date such that borrowers will be able to 
resume business operations and pay off 
any outstanding balances on their PPP 
loans. 
c. Deferral Period for PPP Loans 
Section 3(c) of the Flexibility Act 
extended the deferral period on PPP 
loans. Therefore, Part III.2.n. of the First 
Interim Final Rule (85 FR 20811, 20813) 
is revised to read as follows: 
n. When will I have to begin paying 
principal and interest on my PPP loan? 
If you submit to your lender a loan 
forgiveness application within 10 
months after the end of your loan 
forgiveness covered period, you will not 
have to make any payments of principal 
or interest on your loan before the date 
on which SBA remits the loan 
forgiveness amount on your loan to your 
lender (or notifies your lender that no 
loan forgiveness is allowed). 
Your ‘‘loan forgiveness covered 
period’’ is the 24-week period beginning 
on the date your PPP loan is disbursed; 
however, if your PPP loan was made 
before June 5, 2020, you may elect to 
have your loan forgiveness covered 
period be the eight-week period 
beginning on the date your PPP loan 
was disbursed.3 Your lender must notify 
you of remittance by SBA of the loan 
forgiveness amount (or notify you that 
SBA determined that no loan 
forgiveness is allowed) and the date 
your first payment is due. Interest 
continues to accrue during the 
deferment period. 
If you do not submit to your lender a 
loan forgiveness application within 10 
months after the end of your loan 
forgiveness covered period, you must 
begin paying principal and interest after 
that period. For example, if a borrower’s 
PPP loan is disbursed on June 25, 2020, 
the 24-week period ends on December 
10, 2020. If the borrower does not 
submit a loan forgiveness application to 
its lender by October 10, 2021, the 
borrower must begin making payments 
on or after October 10, 2021. 
d. Loan Forgiveness 
Section 3(b) of the Flexibility Act 
amended the requirements concerning 
forgiveness of PPP loans to reduce the 
amount of PPP loan proceeds that must 
be used for payroll costs in order to be 
forgivable, and the law also created a 
new exemption for borrowers to avoid a 
reduction in loan forgiveness amount 
when they have a reduction in full-time 
equivalent employees. While the 
Flexibility Act provides that a borrower 
shall use at least 60 percent of the PPP 
loan for payroll costs to receive loan 
forgiveness, the Administrator, in 
consultation with the Secretary, 
interprets this requirement as a 
proportional limit on nonpayroll costs 
as a share of the borrower’s loan 
forgiveness amount, rather than as a 
threshold for receiving any loan 
forgiveness. This interpretation is 
consistent with the new safe harbor in 
the Flexibility Act. The new safe harbor 
provides that if a borrower is unable to 
rehire previously employed individuals 
or similarly qualified employees, the 
borrower will not have its loan 
forgiveness amount reduced based on 
the reduction in full-time equivalent 
employees. It would be incongruous to 
interpret the Flexibility Act’s 60 percent 
requirement as a threshold for receiving 
any loan forgiveness, because in some 
cases it would directly conflict with the 
flexibility provided by the new safe 
harbor. Further, the 60 percent 
requirement in the Flexibility Act was 
enacted against the backdrop of SBA’s 
existing rules governing the PPP, which 
Congress was aware of and which 
provided for proportional reductions in 
loan forgiveness for borrowers that used 
less than 75% of their loan amount 
during the eight-week covered period 
for payroll costs. In addition, this 
interpretation of the 60 percent 
requirement under the Flexibility Act is 
most consistent with Congress’s purpose 
in that legislation—namely, to increase 
the flexibility provided to borrowers 
related to PPP loan forgiveness. 
In addition, as noted in paragraph d. 
above, in seeking loan forgiveness, an 
eligible borrower whose loan was made 
before June 5, 2020 may elect to apply 
the original eight-week covered period 
under the CARES Act instead of the 24- 
week covered period referenced above. 
See Flexibility Act, section 3(b)(3). 
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SBA will be issuing revisions to its 
interim final rules on loan forgiveness 
and loan review procedures to address 
amendments the Flexibility Act made to 
the loan forgiveness requirements. SBA 
will also be issuing additional guidance 
on advance purchases of PPP loans, 
which will include any effect of the 
amendments made to the loan 
forgiveness requirements. For the 
reasons described above, Part III.2.o. of 
the First Interim Final Rule (85 FR 
20811, 20813) is revised to read as 
follows: 
o. Can my PPP loan be forgiven in 
whole or in part? 
Yes. The amount of loan forgiveness 
can be up to the full principal amount 
of the loan and any accrued interest. An 
eligible borrower will not be responsible 
for any loan payment if the borrower 
uses all of the loan proceeds for 
forgivable purposes as described below 
and employee and compensation levels 
are maintained or, if not, an applicable 
safe harbor applies. The actual amount 
of loan forgiveness will depend, in part, 
on the total amount of payroll costs, 
payments of interest on mortgage 
obligations incurred before February 15, 
2020, rent payments on leases dated 
before February 15, 2020, and utility 
payments for service that began before 
February 15, 2020, over the loan 
forgiveness covered period. However, to 
receive full loan forgiveness, a borrower 
must use at least 60 percent of the PPP 
loan for payroll costs, and not more than 
40 percent of the loan forgiveness 
amount may be attributable to 
nonpayroll costs. For example, if a 
borrower uses 59 percent of its PPP loan 
for payroll costs, it will not receive the 
full amount of loan forgiveness it might 
otherwise be eligible to receive. Instead, 
the borrower will receive partial loan 
forgiveness, based on the requirement 
that 60 percent of the forgiveness 
amount must be attributable to payroll 
costs. For example, if a borrower 
receives a $100,000 PPP loan, and 
during the covered period the borrower 
spends $54,000 (or 54 percent) of its 
loan on payroll costs, then because the 
borrower used less than 60 percent of its 
loan on payroll costs, the maximum 
amount of loan forgiveness the borrower 
may receive is $90,000 (with $54,000 in 
payroll costs constituting 60 percent of 
the forgiveness amount and $36,000 in 
nonpayroll costs constituting 40 percent 
of the forgiveness amount). 
e. Use of PPP Loan Proceeds 
For consistency with the amendments 
made in the Flexibility Act regarding 
the percentage of loan proceeds that 
must be used for payroll costs in order 
to be forgiven, discussed in paragraph 
2.e. above, Part III.2.r. of the First 
Interim Final Rule (85 FR 20811, 20814) 
is revised to read as follows: 
r. How can PPP loans be used? 
The proceeds of a PPP loan are to be 
used for: 
i. payroll costs (as defined in the Act 
and in 2.f.); 
ii. costs related to the continuation of 
group health care benefits during 
periods of paid sick, medical, or family 
leave, and insurance premiums; 
iii. mortgage interest payments (but 
not mortgage prepayments or principal 
payments); 
iv. rent payments; 
v. utility payments; 
vi. interest payments on any other 
debt obligations that were incurred 
before February 15, 2020; and/or 
vii. refinancing an SBA EIDL loan 
made between January 31, 2020 and 
April 3, 2020. If you received an SBA 
EIDL loan from January 31, 2020 
through April 3, 2020, you can apply for 
a PPP loan. If your EIDL loan was not 
used for payroll costs, it does not affect 
your eligibility for a PPP loan. If your 
EIDL loan was used for payroll costs, 
your PPP loan must be used to refinance 
your EIDL loan. Proceeds from any 
advance up to $10,000 on the EIDL loan 
will be deducted from the loan 
forgiveness amount on the PPP loan. 
At least 60 percent of the PPP loan 
proceeds shall be used for payroll costs. 
For purposes of determining the 
percentage of use of proceeds for payroll 
costs, the amount of any EIDL 
refinanced will be included. For 
purposes of loan forgiveness, however, 
the borrower will have to document the 
proceeds used for payroll costs in order 
to determine the amount of forgiveness. 
While the Act provides that PPP loan 
proceeds may be used for the purposes 
listed above and for other allowable 
uses described in section 7(a) of the 
Small Business Act (15 U.S.C. 636(a)), 
the Administrator believes that finite 
appropriations and the structure of the 
Act warrant a requirement that 
borrowers use a substantial portion of 
the loan proceeds for payroll costs, 
consistent with Congress’ overarching 
goal of keeping workers paid and 
employed. This percentage is consistent 
with the limitation on the forgiveness 
amount set forth in the Flexibility Act. 
This limitation on use of the loan funds 
will help to ensure that the finite 
appropriations available for these loans 
are directed toward payroll protection, 
as each loan that is issued depletes the 
appropriation, regardless of whether 
portions of the loan are later forgiven. 
f. Borrower Certifications 
For consistency with the changes 
discussed in paragraphs 2.e. and f. 
above, Parts III.2.t.iii., iv., and v. of the 
First Interim Final Rule (85 FR 20811, 
20814) are revised to read as follows: 
t. What certifications need to be 
made? 
* 
* 
* 
* 
* 
iii. The funds will be used to retain 
workers and maintain payroll or make 
mortgage interest payments, lease 
payments, and utility payments; I 
understand that if the funds are 
knowingly used for unauthorized 
purposes, the Federal Government may 
hold me legally liable such as for 
charges of fraud. As explained above, 
not more than 40 percent of loan 
proceeds may be used for nonpayroll 
costs. 
iv. Documentation verifying the 
number of full-time equivalent 
employees on payroll as well as the 
dollar amounts of payroll costs, covered 
mortgage interest payments, covered 
rent payments, and covered utilities for 
the loan forgiveness covered period for 
the loan will be provided to the lender. 
v. Loan forgiveness will be provided 
for the sum of documented payroll 
costs, covered mortgage interest 
payments, covered rent payments, and 
covered utility payments. As explained 
above, not more than 40 percent of the 
forgiven amount may be used for 
nonpayroll costs. 
* 
* 
* 
* 
* 
2. Additional Information 
SBA may provide further guidance, if 
needed, through SBA notices which 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) based on the 
need to move expeditiously to mitigate 
the current economic conditions arising 
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36312 
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Rules and Regulations 
from the COVID–19 emergency. This 
rule’s designation under Executive 
Order 13771 will be informed by public 
comment. 
This rule is necessary to implement 
Sections 1102 and 1106 of the CARES 
Act and the Flexibility Act in order to 
provide economic relief to small 
businesses nationwide adversely 
impacted under the COVID–19 
Emergency Declaration. We anticipate 
that this rule will result in substantial 
benefits to small businesses, their 
employees, and the communities they 
serve. However, we lack data to estimate 
the effects of this rule. 
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 effect but does have 
a limited retroactive effect consistent 
with section 3(d) of the Flexibility Act. 
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 modify existing recordkeeping or 
reporting requirements under the 
Paperwork Reduction Act. The 
amendments to the PPP made by the 
Flexibility Act and implemented in this 
interim final rule will require 
conforming revisions to the PPP 
Borrower Application Form (SBA Form 
2483), the PPP Lender Application Form 
(SBA Form 2484), and the PPP Loan 
Forgiveness Application (SBA Form 
3508). SBA will submit the modified 
forms to OMB for approval as a 
modification to the existing PPP 
information collection. This information 
collection is currently approved as an 
emergency request under OMB Control 
Number 3245–0407 until October 31, 
2020. 
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. Small Business 
Administration’s Office of Advocacy 
guide: How to Comply with the 
Regulatory Flexibility Ac. Ch.1. p.9. 
Accordingly, SBA is not required to 
conduct a regulatory flexibility analysis. 
Authority: 15 U.S.C. 636(a)(36); Paycheck 
Protection Program Flexibility Act of 2020, 
Pub. L. 116–142; Coronavirus Aid, Relief, 
and Economic Security Act, Pub. L. 116–136, 
Section 1114. 
Jovita Carranza, 
Administrator. 
[FR Doc. 2020–12909 Filed 6–12–20; 11:15 am] 
BILLING CODE P 
DEPARTMENT OF TRANSPORTATION 
Federal Aviation Administration 
14 CFR Part 39 
[Docket No. FAA–2020–0466; Project 
Identifier MCAI–2020–00504–A; Amendment 
39–21143; AD 2020–12–08] 
RIN 2120–AA64 
Airworthiness Directives; Embraer S.A. 
(Type Certificate Previously Held by 
Empresa Brasileira de Aerona´utica 
S.A.) Airplanes 
AGENCY: Federal Aviation 
Administration (FAA), DOT. 
ACTION: Final rule; request for 
comments. 
SUMMARY: The FAA is superseding 
airworthiness directive (AD) 2011–20– 
01 for certain Empresa Brasileira de 
Aerona´utica S.A. (now Embraer S.A.) 
Model EMB–505 airplanes. AD 2011– 
20–01 required replacing the bolts that 
attach the balance mass weights to the 
elevator structure. This AD requires 
inspections of the mass-balance weights 
of the elevators, ailerons, and rudder 
(flight control surfaces) and their 
attachment parts and corrective actions 
if necessary, and revising the 
airworthiness limitation section of the 
existing maintenance manual or 
instructions for continued airworthiness 
to incorporate new airworthiness 
limitations. This AD also adds airplanes 
to the applicability. This AD was 
prompted by reports of corrosion in the 
mass-balance weights of the flight 
control surfaces, and a determination 
that new airworthiness limitations are 
necessary. The FAA is issuing this AD 
to address the unsafe condition on these 
products. 
DATES: This AD is effective July 1, 2020. 
The Director of the Federal Register 
approved the incorporation by reference 
of a certain publication listed in this AD 
as of July 1, 2020. 
The FAA must receive any comments 
on this AD by July 31, 2020. 
ADDRESSES: You may send comments, 
using the procedures found in 14 CFR 
11.43 and 11.45, by any of the following 
methods: 
• Federal eRulemaking Portal: Go to 
https://www.regulations.gov. Follow the 
instructions for submitting comments. 
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