Borrower Appeals of Final SBA Loan Review Decisions Under the Paycheck Protection Program

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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
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SMALL BUSINESS ADMINISTRATION 
13 CFR Part 134 
[Docket Number SBA–2020–0042] 
RIN 3245–AH55 
Borrower Appeals of Final SBA Loan 
Review Decisions Under the Paycheck 
Protection Program 
AGENCY: U.S. Small Business 
Administration (SBA). 
ACTION: Final rule. 
SUMMARY: This final rule adopts with 
changes portions of the previously 
issued interim final rule published in 
the Federal Register on August 27, 
2020, on Appeals of SBA Loan Review 
Decisions Under the Paycheck 
Protection Program. This final rule 
provides procedures for appeals of 
certain final SBA loan review decisions 
under the Paycheck Protection Program, 
which is a temporary SBA 7(a) loan 
program, authorized by, inter alia, the 
Coronavirus Aid, Relief, and Economic 
Security Act and the Economic Aid to 
Hard-Hit Small Businesses, Nonprofits 
and Venues Act. 
DATES: 
Effective date: This rule is effective 
September 14, 2021. 
Applicability date: This final rule 
applies to all appealable final SBA loan 
review decisions under the Paycheck 
Protection Program. The rule applies to 
all appeals filed after the effective date 
of the rule and to those appeals filed 
before the effective date for which a 
Notice and Order has not been issued. 
FOR FURTHER INFORMATION CONTACT: An 
SBA Office of Hearings and Appeals 
(OHA) Representative at 202–401–8200. 
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 have experienced and 
continue to experience economic 
hardship as a direct result of the 
Federal, State, tribal, and local public 
health measures that have been 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 and restrictions on 
restaurants, bars, gyms, and other 
businesses. 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, were being and continue 
to be 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) 
(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 CARES 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 CARES Act 
temporarily permitted SBA to guarantee 
100 percent of 7(a) loans under a new 
program titled the ‘‘Paycheck Protection 
Program’’ (PPP) under Section 7(a)(36) 
of the Small Business Act. Section 1106 
of the CARES Act provides for 
forgiveness of up to the full principal 
amount of qualifying loans guaranteed 
under the PPP. 
On April 2, 2020, SBA posted its first 
PPP interim final rule (85 FR 20811) 
(the First Interim Final Rule). 
Subsequently, SBA issued a number of 
other interim final rules implementing 
the PPP. 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 May 22, 2020, SBA and Treasury 
posted an interim final rule on Loan 
Review Procedures and Related 
Borrower and Lender Responsibilities 
(85 FR 33010) (Loan Review interim 
final rule (IFR)). The rule stated that 
SBA would be issuing a separate interim 
final rule addressing the process for 
appealing certain SBA loan review 
decisions under the PPP. On June 5, 
2020, the Paycheck Protection Program 
Flexibility Act of 2020 (Pub. L. 116–142) 
(Flexibility Act) was signed into law, 
amending the CARES Act. On June 22, 
2020, SBA and Treasury posted an 
interim final rule that in part revised the 
Loan Review IFR to incorporate the 
relevant Flexibility Act amendments, 
address revisions to the Loan 
Forgiveness Application (SBA Form 
3508), and include a new alternative 
Loan Forgiveness Application (SBA 
Form 3508EZ) (85 FR 38304) (Second 
Loan Review IFR). 
On July 4, 2020, Public Law 116–147 
extended the authority for SBA to 
guarantee PPP loans to August 8, 2020. 
On August 11, 2020, SBA and Treasury 
posted an interim final rule on Appeals 
of SBA Loan Review Decisions Under 
the Paycheck Protection Program (85 FR 
52883) (OHA Appeal IFR), inviting the 
public to submit comments on or before 
September 28, 2020. 
On October 8, 2020, SBA and 
Treasury posted an interim final rule 
which made additional revisions to the 
Loan Review IFR and Second Loan 
Review IFR (85 FR 66214) (Third Loan 
Review IFR). The Third Loan Review 
IFR provided additional guidance 
concerning the forgiveness and loan 
review processes for PPP loans of 
$50,000 or less and, for PPP loans of all 
sizes, lender responsibilities with 
respect to review of borrower 
determinations of eligible costs for 
forgiveness in excess of a borrower’s 
PPP loan amount. 
On December 27, 2020, the President 
signed the Economic Aid to Hard-Hit 
Small Businesses, Nonprofits and 
Venues Act (Economic Aid Act) (Pub. L. 
116–260), which, among other things, 
reauthorized lending under the PPP 
through March 31, 2021, authorized 
second draw PPP loans under Section 
7(a)(37) of the Small Business Act, 
modified PPP provisions relating to 
forgiveness of PPP loans, and codified 
Section 1106 of the CARES Act under 
Section 7A of the Small Business Act. 
On January 19, 2021, SBA and Treasury 
posted an interim final rule to 
consolidate prior rules related to 
forgiveness and reviews of PPP loans 
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and incorporate changes made by the 
Economic Aid Act (86 FR 8283) (Fourth 
Loan Review IFR). 
On March 11, 2021, the American 
Rescue Plan Act of 2021 (American 
Rescue Plan Act) was enacted to, among 
other things, expand eligibility for first 
and second draw PPP loans and revise 
the exclusions from payroll costs for 
purposes of loan forgiveness. On March 
18, 2021, SBA and Treasury posted an 
interim final rule on PPP to incorporate 
the American Rescue Plan Act’s 
amendments to the PPP, as well as other 
changes (86 FR 15083). On March 30, 
2021, the PPP Extension Act of 2021 
(Pub. L. 117–6) was enacted, extending 
SBA’s PPP program authority through 
June 30, 2021. On July 30, 2021, SBA 
published an interim final rule on PPP 
establishing a direct borrower 
forgiveness process for loans of 
$150,000 or less, among other changes 
(86 FR 40921). 
As described below, this final rule 
sets forth procedures for PPP borrowers 
and Lenders on the process for a PPP 
borrower to appeal certain final SBA 
loan review decisions under the PPP to 
the SBA Office of Hearings and Appeals 
(OHA). The interim final rule 
supplemented the interim final rule on 
Loan Review Procedures and Related 
Borrower and Lender Responsibilities 
posted on SBA’s and Treasury’s 
websites on May 22, 2020 (published on 
June 1, 2020, in the Federal Register), 
as revised by the interim final rules 
posted on SBA’s and Treasury’s 
websites on June 22, 2020, October 8, 
2020, and January 19, 2021 (published 
on June 26, 2020, October 19, 2020, and 
February 5, 2021, respectively), and as 
further amended. 
II. Notice and Comment and Immediate 
Effective Date 
This rule revises subpart L, as added 
by the interim final rule posted on the 
websites of the SBA and the U.S. 
Department of the Treasury on August 
11, 2020 (published in the Federal 
Register on August 27, 2020), to reflect 
SBA’s responses to public comments on 
the interim final rule. The revision to 
§ 134.102, Jurisdiction of OHA, is 
adopted without change. 
This final rule adopts with changes 
portions of the previously-published 
interim final rule on Appeals of SBA 
Loan Review Decisions Under the 
Paycheck Protection Program. This rule 
revises 13 CFR part 134, subpart L, as 
added by the interim final rule, to 
reflect SBA’s responses to public 
comments on the interim final rule, as 
detailed in Part III below. This final rule 
has accordingly satisfied the 
Administrative Procedure Act’s advance 
notice-and-comment requirements. 
SBA has found that there is good 
cause to dispense with the 30-day 
delayed effective date provided in the 
Administrative Procedure Act. The 
intent of the CARES Act is to afford SBA 
the flexibility to provide relief to 
America’s small businesses 
expeditiously. This intent, along with 
the need to provide lenders and 
borrowers with certainty regarding PPP 
loan forgiveness (if any), provides good 
cause for immediate implementation of 
changes to the OHA appeal feature of 
this program. Specifically, it is critical 
to meet lenders’ and borrowers’ need for 
clarity concerning the OHA appeal 
process as rapidly as possible. 
Borrowers have been applying for loan 
forgiveness, lenders have been issuing 
loan forgiveness decisions to SBA, and 
SBA has been reviewing PPP loans in 
connection with those forgiveness 
applications and decisions. SBA 
currently has pending final SBA loan 
review decisions that are ready to be 
issued and is continuing to conduct 
loan reviews and make final SBA loan 
review decisions that will need to be 
issued. Borrowers and lenders are 
expecting these decisions to be issued in 
accordance with the statutory and 
regulatory timelines requiring SBA to 
remit the appropriate forgiveness 
amount to the lender (if any), within 90 
days of the lender issuing its decision to 
SBA, subject to any SBA review of the 
loan or the loan application. This final 
rule will allow SBA to immediately 
issue such decisions and provide 
certainty around the appeals process to 
these potential appellants without 
further delay. Because this final rule 
also provides increased accessibility to 
borrowers in response to comments 
previously received by the public, 
allowing the borrowers that receive an 
appealable final SBA loan review 
decision to immediately appeal under 
the final rule is in the best interests of 
the borrowers. 
III. Summary of Comments Received 
The comment period for the OHA 
Appeal IFR was open from August 27, 
2020, to September 28, 2020, and SBA 
received 16 comments. This section 
includes a description of the comments 
and SBA’s response. 
Two of the comments received 
proposed an extension of time to file an 
appeal to account for appellants who 
may be unfamiliar with the appeals 
process. In the interest of efficiency and 
to ensure a speedy resolution of 
disputes concerning final SBA loan 
review decisions, the 30-calendar day 
requirement will remain. To promote 
clarity and fairness, SBA will no longer 
begin counting days to file an appeal 
based on when an appellant receives 
notification from the lender that a final 
SBA loan review decision has been 
issued without actually receiving the 
final loan review decision document 
detailing the reasons for the decision. 
Instead, the clock for counting days will 
begin only after the borrower has 
received the actual final SBA loan 
review decision document. This will 
provide the borrower with 30 calendar 
days to formulate its arguments as to 
why the decision is clearly erroneous. 
See 13 CFR 134.1202(a). 
Two of the comments raised issue 
with the inability of the borrower to file 
arguments after the administrative 
record has been transmitted to OHA. 
Although OHA’s general rules of 
procedure found at 13 CFR 134.206(e) 
allows for a party to request leave to 
reply to a response, this final rule 
explicitly directs a party to seek leave to 
file a reply or supplemental pleading. 
(13 CFR 134.1208(e).) Also, an appellant 
is given 30 calendar days after the 
issuance of the Notice and Order to file 
any objections to the administrative 
record, should the appellant find the 
administrative record is incomplete. See 
13 CFR 134.1207(e). 
One comment proposed that the time 
to file an objection to the administrative 
record should be extended to 15 
calendar days. The commenter reasoned 
that a non-attorney may have difficulty 
understanding the role of the 
administrative record, what documents 
are included and excluded from the 
record, and the applicable privileges. 
Because the appellant will have 
participated in the process of providing 
documents submitted by the lender to 
SBA during the loan forgiveness process 
and the loan review process, the 
appellant should be familiar with the 
documents included in the 
administrative record, making 30 
calendar days from the issuance of the 
Notice and Order (where the 
administrative record is due 20 calendar 
days after issuance of the Notice and 
Order) a sufficient time to assert an 
objection. The Notice and Order that 
will be issued under 13 CFR 134.1206 
will provide a description of the 
documents included in the 
administrative record and will note the 
appellant’s ability to object to the 
administrative record by the due date. 
The appellant can also avail itself of 13 
CFR 134.1207, which provides more 
detail on the administrative record and 
appellant’s ability to object to the 
administrative record. Appellant will 
also have the ability to request leave to 
file a supplementary pleading after 
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review of the SBA’s appeal response, 
should one be filed, and administrative 
record under 13 CFR 134.1208(e) and 
134.211 (Motions), which is 
incorporated into subpart L. 
One comment proposed that the SBA 
should disclose that the appellant may 
object to the administrative record at the 
time of the transmission of the 
administrative record. Such notice is 
included in 13 CFR 134.1207 and will 
be provided to the appellant in the 
Notice and Order under 13 CFR 
134.1206, which SBA deems sufficient 
notice of the ability to object to the 
administrative record. 
Two comments were received 
regarding the need for simplicity of the 
appeals process as there is a large 
number of appellants who will be filing 
their appeals without the assistance of 
an attorney. Overall, the commenters 
requested a more simplified process in 
light of the information appellant is 
required to submit to OHA at the time 
of the appeal. One commenter suggested 
that pro se litigants should disclose 
their status so that OHA will assist the 
appellant throughout the appeals 
process and construe their filings 
liberally, taking into consideration their 
non-attorney status. The rules, policies, 
and procedures of OHA are tailored to 
address and accommodate all 
appellants, regardless of whether they 
are represented by an attorney. The 
information an appellant is required to 
file with an appeal is minimal, but 
necessary for the Judge to render a 
decision based on the relevant facts and 
law. In furtherance of OHA’s 
commitment to ensure the appeals 
process is accessible to all appellants, 
OHA has reduced the information 
required to file an appeal. See 13 CFR 
134.1204. OHA will also provide 
appellants with an electronic case 
management system (https://
appeals.sba.gov) that will provide a 
simple electronic way to file, process, 
and track the appeal before OHA, 
including the automation of serving 
parties, and accessing appeal documents 
and the administrative record. 
Four comments were received 
regarding the exhaustion of remedies 
requirement under 13 CFR 134.1216 
that required an appellant to request 
review by the SBA Administrator before 
appealing an OHA decision to Federal 
district court. One comment suggested 
that OHA should provide language in 
the decision disclosing an appellant’s 
ability to request review of OHA’s 
decision by the SBA Administrator. The 
commenters also argued that this 
exhaustion of administrative remedies 
requirement was in violation of the 
Administrative Procedures Act and 
deprives appellants of due process. A 
number of commenters asserted that the 
Administrator’s review of OHA’s 
decision is a circular review process 
since the commenters believed that the 
Administrator would issue the final 
SBA loan review decision. The 
Administrator will not be issuing the 
final SBA loan review decision. The 
decision will be made by the 
appropriate SBA official in accordance 
with published delegations of authority. 
Additionally, various commenters 
asserted that OHA’s ability to render an 
independent decision on a final SBA 
loan review decision is in question 
because OHA is a subordinate office to 
the Administrator. Although SBA 
disagrees with the assertions in those 
comments, SBA has determined to 
remove the requirement for a borrower 
to request a review by the SBA 
Administrator before any further appeal 
because of the limited resources within 
the Office of the Administrator to render 
a decision on the anticipated high 
number of requests for review. In 
addition, SBA believes that it is 
appropriate, consistent with due process 
requirements, and most efficient for 
borrowers to be able to seek relief in 
Federal district court, without requiring 
review by the Administrator. Therefore, 
borrowers have the option to either (1) 
request reconsideration by the presiding 
OHA judge under 13 CFR 134.1211(c) 
and then appeal the final decision to 
Federal district court under 13 CFR 
134.1211(g); or (2) appeal a final 
decision directly to the appropriate 
Federal district court under 13 CFR 
134.1211(g). 
In lieu of the provision requiring the 
borrower to request review by the 
Administrator and in order to vest 
reviewable discretion with the 
appropriate SBA official, SBA will add 
a provision giving the SBA 
Administrator the option to review or 
reverse an initial OHA decision or a 
reconsidered initial OHA decision, in 
the Administrator’s sole discretion. 
Although the Administrator has the 
discretion to review or reverse such 
decisions, borrowers may not request, 
and are not required to request, a review 
from the Administrator in order to 
exhaust administrative remedies before 
appealing to the appropriate Federal 
district court. See 13 CFR 134.1211(d). 
Three comments were received 
regarding the standard of review and 
burden of proof for PPP appeals. One 
commenter stated that OHA should 
remove the requirement that the 
appellant establish a clear error of fact 
or law by SBA and only require 
appellant to establish error. The 
suggestion, however, is based on the 
commenter’s inaccurate understanding 
of the administrative process, stating 
that OHA is reviewing a lender’s 
decision and is not reviewing the 
decision of a public officer, i.e., an SBA 
official. This is incorrect, as OHA’s 
jurisdiction is limited to reviewing final 
SBA loan review decisions as provided 
for in 13 CFR 134.1201(b). Further, the 
regulation establishing OHA’s 
jurisdiction explicitly states that it will 
not accept an appeal based solely on a 
lender’s decision. See 13 CFR 
134.1201(c). One commenter suggested 
a de novo review of the final SBA loan 
review decision due to the lack of 
guidance on the loan review process. 
Another commenter voiced concern 
with the use of the preponderance of the 
evidence standard in conjunction with 
the requirement to establish clear error 
on the part of SBA. The commenter 
found issue with the preponderance of 
the evidence standard because such a 
standard is usually required at the 
initial review level, and the commenter 
disagreed with the use of the clear error 
standard in light of the lack of guidance 
on the loan review process. The 
commenters also stated the appellant 
will be completely deprived of the 
opportunity to review any evidence. 
SBA has determined that it will 
remove the burden of proof requirement 
of preponderance of the evidence. 
However, a decision by an SBA official 
is entitled to the deference afforded by 
the clear error standard. Therefore, it is 
appropriate and reasonable for OHA to 
assess the final SBA loan review 
decision using a clear error standard. An 
appellant will not be completely 
deprived of the opportunity to review 
the evidence. An appellant will be 
provided with a copy of the final SBA 
loan review decision that will set forth 
the reasons for the decision prior to 
filing an appeal, and an appellant 
should be familiar with the documents 
included in the administrative record 
because the appellant will have 
participated in the process of providing 
documents submitted by the lender to 
SBA during the loan forgiveness process 
and the loan review process. In 
addition, an appellant has the 
opportunity to review and object to the 
administrative record as provided for in 
13 CFR 134.1207(e). 
Three comments were received 
regarding the inability of appellants to 
request discovery, while allowing SBA 
to request discovery. SBA has 
determined that an OHA decision 
should be based on a review of the 
administrative record, the appeal 
petition, any response, any reply or 
supplemental pleading, and filings 
related to objection to the administrative 
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1 85 FR 33010 (June 1, 2020). 
2 85 FR 38304 (June 26, 2020). 
3 85 FR 66214 (October 19, 2020). 
4 86 FR 8283 (February 5, 2021). 
5 See https://www.sba.gov/document/procedural- 
notice-5000-20038-procedures-lender-submission- 
paycheck-protection-program-loan-forgiveness- 
decisions-sba-sba. 
6 See https://www.sba.gov/document/procedural- 
notice-5000-20077-ppp-borrower-resubmissions- 
loan-forgiveness-applications-using-form-3508s- 
lender-notice. 
7 Interest will continue to accrue on the PPP loan 
during the deferment period. See, Interim Final 
Rule on Business Loan Program Temporary 
Changes; Paycheck Protection Program as Amended 
by Economic Aid Act (86 FR 3692, 3703, January 
14, 2021). 
8 See also, Interim Final Rule on Business Loan 
Program Temporary Changes; Paycheck Protection 
Program—COVID Revenue Reduction Score, Direct 
Borrower Forgiveness Process, and Appeals 
Deferment (86 FR 40921, 40925, July 30, 2021). 
record. See 13 CFR 134.1209(c). Thus, 
neither discovery nor oral hearings will 
be permitted for appellant or SBA. See 
13 CFR 134.1209(b). 
One comment received suggested that 
OHA provide a description of the OHA 
procedural rules incorporated into 
subpart L in addition to citing to those 
rules. SBA agrees that such a change is 
minimal and promotes clarity and 
guidance. Thus, this final rule provides 
a description of each rule incorporated 
into subpart L at 13 CFR 134.1201(h). 
One comment received proposed a 
change in the rule to account for 
borrowers who may have been acquired 
by another entity between the time the 
initial PPP loan was issued and the 
filing of a PPP appeal. The rule now 
includes language to address both 
borrowers and their legal successors 
under 13 CFR 134.1203. 
Six commenters argued that SBA 
should have regulations which 
formalize the procedures for final SBA 
loan review decisions. They assert that 
the existing interim final rules are too 
broad and lacking in specifics about the 
process and have no criteria for making 
the decisions or compiling the 
administrative record. One commenter 
also requested that more information be 
provided on the loan forgiveness 
process. As to the administrative record, 
this final rule sets forth what should be 
included in the administrative record at 
13 CFR 134.1207. As to the criteria for 
making final SBA loan review decisions 
and the loan forgiveness process, SBA 
has issued various rules and guidance 
on the process for SBA loan reviews 
including, but not limited to, the Loan 
Review IFR; 1 Second Loan Review 
IFR; 2 Third Loan Review IFR; 3 Fourth 
Loan Review IFR; 4 SBA Procedural 
Notice: Procedures for Lender 
Submission of Paycheck Protection 
Program Loan Forgiveness Decisions to 
SBA and SBA Forgiveness Loan 
Reviews; 5 and SBA Procedural Notice: 
PPP Borrower Resubmissions of Loan 
Forgiveness Applications Using Form 
3508S, Lender Notice Responsibilities to 
PPP Borrowers, and Offset of 
Remittances to Lenders for Lender 
Debts.6 Additional information is 
available at https://www.sba.gov/ 
funding-programs/loans/covid-19-relief- 
options/paycheck-protection-program 
and https://home.treasury.gov/policy- 
issues/coronavirus/assistance-for-small- 
businesses/paycheck-protection- 
program. SBA has issued sufficient 
guidance for the loan forgiveness 
process and the issuance of final SBA 
loan review decisions. SBA received a 
few other comments which 
recommended changes to the loan 
forgiveness application process. Such 
comments are not relevant to this final 
rule and need not be addressed here. 
Five comments received stated that 
the requirement to repay the loans 
should be held in abeyance pending 
appeal. SBA has determined that, in 
order to avoid the potential 
administrative burden of having to 
reverse implementation of the final SBA 
loan review decision, including the 
refund of borrower payments by the 
Lender and the processing of 
forgiveness payments by SBA, a timely 
appeal by a PPP borrower of a final SBA 
loan review decision should extend the 
deferment period of the PPP loan. 
Payment of the PPP loan will be 
deferred until there is a final decision 
on an appeal under 13 CFR 134.1211. In 
addition, SBA believes that allowing for 
continued deferment is in the best 
interest of the borrower.7 This decision 
has been added to the regulation at 13 
CFR 134.1202(d).8 
SBA also received some comments 
from borrowers that sought relief from 
SBA for a PPP loan application that was 
denied by a Lender. Such comments are 
not relevant to this final rule and cannot 
be addressed here. Further, the rule, at 
13 CFR 134.1201(c), provides that a 
borrower cannot directly file an appeal 
of a decision made by a lender 
concerning a PPP loan to OHA. 
IV. Technical Amendments 
This rule makes technical 
amendments to ensure efficiency, 
transparency, and consistency 
throughout the appeals process. This 
includes: Removal of the deduction of 
any Economic Injury Disaster Loan 
(EIDL) advance (located in the OHA 
Appeal IFR at 13 CFR 134.1201(b)(3)) to 
be consistent with Section 333 of the 
Economic Aid Act which repealed the 
CARES Act provision at section 
1110(e)(6) requiring SBA to deduct the 
EIDL advance; explicitly stating that a 
borrower cannot directly file an appeal 
of a decision by a lender concerning a 
PPP loan to OHA (13 CFR 134.1201(c)); 
informing an appellant that they must 
first file an appeal of the final SBA loan 
review decision with OHA before 
appealing to Federal district court (13 
CFR 134.1201(d)); and incorporating 
provisions from OHA’s General Rules of 
Practice into this section with 
descriptions of those provisions (13 CFR 
134.1201(h)). 
This final rule makes a procedural 
change to require appellants to use the 
OHA Case Portal to file and manage 
their appeals (13 CFR 134.1202(a)); this 
provision also establishes 
‘‘Commencement of Appeals of Final 
SBA Loan Review Decisions’’ to outline 
the process of how and when an appeal 
must be filed (13 CFR 134.1202); and 
removes the requirement that timeliness 
of the appeal could be based on a 
notification by the lender of a final SBA 
loan review decision rather than actual 
receipt of the final SBA loan review 
decision (13 CFR 134.1202(a)). 
SBA has also simplified the 
information required to file an appeal by 
eliminating a requirement to provide a 
basis for jurisdiction and relief sought; 
only requiring the borrower to produce 
a final SBA loan review decision (and 
not merely a description of a final SBA 
loan review decision) and the date it 
was received to determine timeliness of 
the appeal; removing requirements that 
the appellant provide tax documents; 
and removing the requirement that a 
borrower include a certificate of service 
with its appeal or any other subsequent 
documents filed with OHA. (13 CFR 
134.1204). This rule also requires 
borrowers to provide their lender with 
a copy of their appeal in order for the 
lender to extend the deferment period of 
the PPP loan until a final decision is 
issued under § 134.1211. (13 CFR 
134.1202(b)). 
This rule also specifies that lenders 
and individual owners of a borrower 
entity do not have standing to file an 
appeal. (13 CFR 134.1203). The new 
provision, titled ‘‘Notice and Order,’’ 
now provides an overview of the 
information that will be included within 
the Notice and Order (13 CFR 134.1206). 
This rule provides for the deadline to 
produce the Administrative Record 
within the ‘‘Administrative Record’’ 
provision (13 CFR 134.1207(a)); clarifies 
that SBA may, but is not required to, 
respond to an appeal and, if SBA does 
not respond it will not be construed 
against SBA (13 CFR 134.1208); 
provides that a response to an appeal is 
due 45 calendar days from the date of 
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the Notice and Order instead of from the 
appeal filing date (13 CFR 134.1208(b)); 
removes language making final 
decisions precedential (13 CFR 
134.1211 (b) & (e)); discloses that final 
decisions rendered under this section 
may be published by OHA within its 
discretion with any necessary 
redactions (13 CFR 134.1211(f)); and 
removes language pertaining to 
protective orders, as the only parties 
involved in PPP appeals are the 
appellant and SBA, both of which will 
already have access to all documents 
that will not be accessible to the public; 
and adds language in 13 CFR 134.1207 
to provide for a non-waiver provision. 
V. Borrower Appeals of Final SBA Loan 
Review Decisions Under the Paycheck 
Protection Program 
This final rule adopts with changes 
portions of the previously-issued 
interim final rule on Appeals of SBA 
Loan Review Decisions Under the 
Paycheck Protection Program. This final 
rule does not make any changes to 13 
CFR 134.102(w) regarding OHA’s 
jurisdiction over PPP appeals, and the 
current provision in the Code of Federal 
Regulations will remain the same. This 
final rule revises the authority citation 
for subpart L to incorporate 15 U.S.C. 
636(a)(37) and 15 U.S.C. 636m, which 
were included in the Economic Aid Act. 
This final rule also revises subpart L as 
set forth in the prior interim final rule. 
Section 134.1201, Scope of rules in 
this subpart, provides a process for 
appeal to OHA of certain final SBA loan 
review decisions under the PPP and any 
other PPP matter referred to OHA by the 
Administrator. PPP loans include first 
draw PPP loans made under Section 
7(a)(36) of the Small Business Act and 
second draw PPP loans made under 
Section 7(a)(37) of the Small Business 
Act. Subpart L provides that an 
appealable final SBA loan review 
decision is an official written decision 
by SBA, after SBA completes a review 
of a PPP loan, that a borrower (1) was 
ineligible for a PPP loan; (2) was 
ineligible for the PPP loan amount 
received or used the PPP loan proceeds 
for unauthorized uses; (3) is ineligible 
for PPP loan forgiveness in the amount 
determined by the lender in its full 
approval or partial approval decision 
issued to SBA; and/or (4) is ineligible 
for PPP loan forgiveness in any amount 
when the lender has issued a full denial 
decision to SBA. 
Subpart L applies to loan review 
decisions made by SBA after SBA 
completes a review of a PPP loan as set 
forth in Part III.1 and Part III.2c. of the 
Loan Review IFR, as amended by the 
Second Loan Review IFR, Third Loan 
Review IFR, and Fourth Loan Review 
IFR and as further amended. Subpart L 
further provides that any decision by a 
lender concerning a PPP loan, including 
a borrower’s PPP loan application or a 
borrower’s PPP loan forgiveness 
application, may not be appealed 
directly to OHA. In addition, this 
section sets forth other types of 
decisions and determinations that are 
not covered by subpart L, and makes 
clear that subpart C, Rules of Practice 
for Appeals From Size Determinations 
and NAICS Code Designations, is not 
applicable to appeals from final SBA 
loan review decisions. This section sets 
forth the specific provisions from 
subpart B, OHA’s general Rules of 
Practice, that are applicable to subpart 
L. Other provisions from subpart B that 
are not specifically referenced in 
subpart L do not apply to subpart L. As 
stated above, a timely appeal by a PPP 
borrower of a final SBA loan review 
decision will extend the deferment 
period of the PPP loan until a final 
decision is issued pursuant to 
§ 134.1211. However, if SBA remits to 
the lender the PPP loan forgiveness 
amount set forth in the decision issued 
by the lender to SBA, the borrower may 
not file an OHA appeal, and the 
borrower must begin repayment of any 
remaining balance of its PPP loan. This 
section makes clear that a borrower 
must file an appeal with OHA on a final 
SBA loan review decision before 
appealing to the appropriate Federal 
district court. 
Section 134.1202, Commencement of 
appeals of final SBA loan review 
decisions, provides that an appellant 
must file its appeal with OHA within 30 
calendar days of receipt of the final SBA 
loan review decision and references 
OHA’s website, where an appellant will 
be able to file and manage its appeal 
using the OHA Case Portal. By utilizing 
the OHA Case Portal, an appellant’s 
appeal will automatically be served 
upon the Associate General Counsel for 
Litigation at OLITService@sba.gov. The 
section also provides specific 
information on how to calculate days. In 
addition, this section makes clear that a 
timely appeal by a PPP borrower of a 
final SBA loan review decision extends 
the deferment period of the PPP loan 
until a final decision is issued pursuant 
to § 134.1211. This section also requires 
an appellant to provide the lender with 
a copy of its appeal in order for the 
lender to extend the deferment period of 
the PPP loan until a final decision is 
issued pursuant to § 134.1211. 
Section 134.1203, Standing, provides 
that only the borrower on a loan for 
which SBA has issued a final SBA loan 
review decision has standing to appeal 
the final SBA loan review decision to 
OHA. Individual owners of a borrower 
entity and lenders do not have standing 
to appeal a final SBA loan review 
decision. 
Section 134.1204, The appeal 
petition, provides that an appeal 
petition must include the following 
information: (1) A copy of the final SBA 
loan review decision that is being 
appealed and the date it was received; 
(2) a full and specific statement as to 
why the final SBA loan review decision 
is alleged to be erroneous, together with 
all factual information and legal 
arguments supporting the allegations; 
and (3) the name, address, telephone 
number, email address and signature of 
the appellant or its attorney. This 
section makes clear that a Notice of 
Paycheck Protection Program 
Forgiveness Payment does not provide a 
borrower with a right to appeal to OHA. 
This section further provides that an 
appeal petition that does not include the 
above may be dismissed by the Judge 
and permits SBA to move for a motion 
for more definite statement or otherwise 
comply with the requirements of this 
section. 
Section 134.1205, Dismissal, provides 
that the Judge must dismiss the appeal 
if: (1) The appeal is beyond OHA’s 
jurisdiction as set forth under 
§ 134.1201; (2) the appeal is untimely 
under § 134.1202; (3) the appellant lacks 
standing to appeal under § 134.1203; or 
(4) is premature because SBA has not 
yet made a final SBA loan review 
decision. This section also provides that 
the Judge may dismiss the appeal if, 
among other things, the appeal does not, 
on its face, allege specific facts that if 
proven to be true, warrant reversal or 
remand of the final SBA loan review 
decision. 
Section 134.1206, Notice and Order, 
provides that upon receipt of an appeal 
challenging a final SBA loan review 
decision, OHA will assign the matter to 
either an Administrative Law Judge or 
an Administrative Judge in accordance 
with § 134.218. Unless the appeal will 
be dismissed under § 134.1205, the 
Judge will issue a Notice and Order 
establishing a deadline for production of 
the administrative record and specifying 
the deadline by which SBA may 
respond to the appeal. 
Section 134.1207, The administrative 
record, provides that the administrative 
record is due 20 calendar days after 
issuance of the Notice and Order. The 
administrative record shall include non- 
privileged, relevant documents that SBA 
considered in making its decision or 
that were before SBA at the time of the 
decision. The administrative record 
need not, however, contain all 
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documents pertaining to the appellant. 
SBA will file the administrative record 
with OHA and serve it on appellant 
utilizing the OHA Case Portal. This 
provision states that in the event that 
privileged or confidential information is 
disclosed in the administrative record, 
such disclosure shall not operate as a 
waiver of any claim of privilege or 
confidentiality by SBA. This section 
permits the appellant to object to the 
absence of any document from the 
administrative record that the appellant 
believes should have been included in 
the administrative record. Generally, 
such objections must be filed with OHA 
and served on SBA no later than 30 
calendar days after issuance of the 
Notice and Order utilizing the OHA 
Case Portal. The Judge will rule upon 
such objections and may direct or 
permit that the administrative record be 
supplemented. 
Section 134.1208, Response to an 
appeal petition, prescribes that only 
SBA, though not required, may respond 
to an appeal. In addition, OHA can 
request SBA to respond for good cause 
shown by OHA. The response should 
set forth the relevant facts and legal 
arguments to the issues presented on 
appeal. If SBA elects not to respond to 
the appeal, such election shall not be 
interpreted to be an admission or waiver 
of any allegation of law or fact. Except 
for good cause shown, a response filed 
after the close of record established by 
the Judge will not be considered. If SBA 
elects to respond, SBA must file its 
response with OHA and serve a copy of 
the response upon the appellant 
utilizing the OHA Case Portal. No reply 
to a response will be permitted unless 
the Judge directs otherwise. 
Section 134.1209, Evidence beyond 
the record, discovery and oral hearings, 
provides that, generally, the Judge may 
not admit evidence beyond the written 
administrative record. Neither discovery 
nor oral hearings will be permitted in 
appeals from final SBA loan review 
decisions. All appeals under subpart L 
will be decided solely on a review of the 
written administrative record, the 
appeal petition, any response, any reply, 
and filings related to objection to the 
administrative record. 
Section 134.1210, Standard of review, 
provides that the standard of review is 
whether the final SBA loan review 
decision was based on clear error of fact 
or law. The appellant has the burden of 
proof. 
Section 134.1211, Decision on appeal, 
provides that the Judge will issue his or 
her decision within 45 calendar days 
after the close of record, as practicable. 
The decision will contain findings of 
fact and conclusions of law, the reasons 
for such findings and conclusions, and 
any relief ordered. The decision will be 
served upon appellant and SBA 
utilizing the OHA Case Portal. The 
Judge’s decision on the appeal is an 
initial decision. However, unless a 
request for reconsideration is filed 
pursuant to paragraph (c) of § 134.1211 
or the Administrator, solely within the 
Administrator’s discretion, decides to 
review or reverse the initial decision 
pursuant to paragraph (d) of § 134.1211, 
an initial decision shall become the 
final decision of SBA 30 calendar days 
after its service and is thereafter 
appealable to the appropriate Federal 
district court. This section allows for a 
request for reconsideration pursuant to 
paragraph (c) of § 134.1211 by SBA or 
appellant. This section also provides the 
Administrator, solely within the 
Administrator’s discretion, with the 
right to review or reverse an initial OHA 
decision or a reconsidered initial OHA 
decision pursuant to paragraph (d) of 
§ 134.1211. Such discretionary authority 
of the Administrator does not create 
additional rights of appeal on the part 
of an appellant not otherwise specified 
in SBA regulations. This section also 
provides that decisions rendered by 
OHA under subpart L are not 
precedential. This section provides that 
final decisions rendered under this 
section may be published by OHA 
within its discretion with any necessary 
redactions of confidential business and 
financial information or personally 
identifiable information. Lastly, this 
section provides that final decisions 
may be appealed to the appropriate 
Federal district court only. 
Section 134.1212, Effects of the 
decision, provides that OHA may affirm, 
reverse, or remand a final SBA loan 
review decision. If remanded, OHA no 
longer has jurisdiction over the matter 
unless a new appeal is filed as a result 
of a new final SBA loan review 
decision. 
Section 134.1213, Equal Access to 
Justice Act (EAJA), provides that a 
prevailing appellant is not entitled to 
recover attorney’s fees. Appeals to OHA 
from final SBA loan review decisions 
under the PPP are not proceedings that 
are required to be conducted by an 
Administrative Law Judge under 
§ 134.603. 
Section 134.1214, Confidential 
information, provides that if a filing or 
other submission made pursuant to an 
appeal in subpart L contains 
confidential business and financial 
information; personally identifiable 
information; source selection sensitive 
information; income tax returns; 
documents and information covered 
under § 120.1060; or any other exempt 
information, that information is not 
available to the public pursuant to the 
Freedom of Information Act (FOIA), 5 
U.S.C. 552. 
Compliance With Executive Orders 
12866, 12988, 13132, and 13563, the 
Congressional Review Act, Paperwork 
Reduction Act (44 U.S.C. Ch. 35), and 
the Regulatory Flexibility Act (5 U.S.C. 
601–612) 
Executive Orders 12866 and 13563 
OMB’s Office of Information and 
Regulatory Affairs (OIRA) has 
determined that this final rule is 
economically significant for the 
purposes of Executive Orders 12866 and 
13563 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. 
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 final 
rule does not impose additional 
reporting or recordkeeping requirements 
under the Paperwork Reduction Act. 
Congressional Review Act 
OIRA has also determined that this 
rule is a major rule under Subtitle E of 
the Small Business Regulatory 
Enforcement Fairness Act of 1996 (also 
known as the Congressional Review Act 
or CRA), 5 U.S.C. 804(2). If a rule is 
deemed major, the CRA generally 
provides that the rule may not take 
effect until at least 60 days following its 
publication unless the agency for good 
cause finds that notice and public 
procedure are impracticable, 
unnecessary, or contrary to the public 
interest. 5 U.S.C. 808. For the reasons 
discussed in Section II above, SBA finds 
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that there is good cause to dispense with 
the CRA effective date requirement. The 
agency believes that delaying the 
effective date of this final rule would be 
contrary to the public interest. 
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. 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. Since this 
rule finalizes an interim final rule that 
was exempt from notice and comment 
and did not require an initial regulatory 
flexibility analysis, SBA is likewise not 
required to conduct a regulatory 
flexibility analysis. 
List of Subjects in 13 CFR Part 134 
Administrative practice and 
procedure, Claims, Equal access to 
justice, Lawyers, Organization and 
function (Government agencies). 
For the reasons stated in the 
preamble, the Small Business 
Administration interim rule amending 
13 CFR part 134, which was published 
at 85 FR 52883 on August 27, 2020, is 
adopted as final with the following 
changes: 
PART 134—RULES OF PROCEDURE 
GOVERNING CASES BEFORE THE 
OFFICE OF HEARINGS AND APPEALS 
■1. The authority citation for part 134 
is revised to read as follows: 
Authority: 5 U.S.C. 504; 15 U.S.C. 632, 
634(b)(6), 634(i), 637(a), 648(l), 656(i), 657t 
and 687(c); 38 U.S.C. 8127(f); E.O. 12549, 51 
FR 6370, 3 CFR, 1986 Comp., p. 189. 
Subpart J issued under 38 U.S.C. 
8127(f)(8)(B). 
Subpart K issued under 38 U.S.C. 
8127(f)(8)(A). 
Subpart L issued under 15 U.S.C. 
636(a)(36); 15 U.S.C. 636(a)(37); 15 U.S.C. 
636m. 
■2. Subpart L is revised to read as 
follows: 
Subpart L—Borrower Appeals of Final 
SBA Loan Review Decisions 
Sec. 
134.1201
Scope of the rules in this subpart. 
134.1202
Commencement of appeals of 
final SBA loan review decisions. 
134.1203
Standing. 
134.1204
The appeal petition. 
134.1205
Dismissal. 
134.1206
Notice and Order. 
134.1207
The administrative record. 
134.1208
Response to an appeal petition. 
134.1209
Evidence beyond the record, 
discovery, and oral hearings. 
134.1210
Standard of review. 
134.1211
Decision on appeal. 
134.1212
Effects of the decision. 
134.1213
Equal Access to Justice Act. 
134.1214
Confidential information. 
§ 134.1201
Scope of the rules in this 
subpart. 
(a) The rules of practice in this 
subpart apply to appeals to OHA from 
certain final SBA loan review decisions 
under the Paycheck Protection Program 
(PPP) as described in paragraph (b) of 
this section, and to any other PPP matter 
referred to OHA by the Administrator of 
SBA. The PPP was established as a 
temporary program under section 1102 
of the Coronavirus Aid, Relief, and 
Economic Security Act (CARES Act) 
(Pub. L. 116–136), as amended. PPP 
loans include first draw PPP loans made 
under Section 7(a)(36) of the Small 
Business Act and second draw PPP 
loans made under Section 7(a)(37) of the 
Small Business Act. 
(b) A final SBA loan review decision 
that is appealable under this subpart is 
an official written decision by SBA, 
after SBA completes a review of a PPP 
loan, that finds a borrower: 
(1) Was ineligible for a PPP loan; 
(2) Was ineligible for the PPP loan 
amount received or used the PPP loan 
proceeds for unauthorized uses; 
(3) Is ineligible for PPP loan 
forgiveness in the amount determined 
by the lender in its full approval or 
partial approval decision issued to SBA; 
and/or 
(4) Is ineligible for PPP loan 
forgiveness in any amount when the 
lender has issued a full denial decision 
to SBA. 
(c) A borrower cannot directly file an 
appeal of a decision made by a lender 
concerning a PPP loan with OHA. 
(d) An appeal to OHA is an 
administrative remedy that must be 
exhausted before judicial review of a 
final SBA loan review decision may be 
sought in a Federal district court. 
(e) Any determination by SBA’s Office 
of Inspector General concerning a PPP 
loan is not appealable to OHA. 
(f) This subpart does not create any 
right to appeal any SBA decision on any 
7(a) loans (see part 120 of this chapter) 
other than PPP loans. 
(g) The Rules of Practice for Appeals 
From Size Determinations and NAICS 
Code Designations in subpart C of this 
part do not apply to appeals of final 
SBA loan review decisions or to the 
PPP. 
(h) In addition to the provisions in 
subpart B of this part specifically 
referenced in this subpart, the following 
regulations from subpart B of this part 
also apply to this subpart: §§ 134.207 
(Amendments and supplemental 
pleadings); 134.208 (Representation in 
cases before OHA); 134.209 
(Requirement of signature); 134.211 
(Motions); 134.212 (Summary 
judgment); 134.217 (Settlement); 
134.218 (Judges); 134.219 (Sanctions); 
and 134.220 (Prohibition on ex parte 
communications). Other provisions 
from subpart B of this part that are not 
specifically referenced in this subpart 
do not apply to this subpart. 
§ 134.1202
Commencement of appeals of 
final SBA loan review decisions. 
(a) An appeal petition must be filed 
with OHA within 30 calendar days after 
the appellant’s receipt of the final SBA 
loan review decision. To file and 
manage an appeal of a final SBA loan 
review decision with OHA, refer to the 
OHA Case Portal at https://
appeals.sba.gov. An appellant is 
required to use the OHA Case Portal to 
file and manage their appeal. 
(b) Appellant must provide their 
lender with a copy of the timely appeal 
petition upon filing in order for the 
lender to extend the deferment period of 
the PPP loan until a final decision is 
issued under § 134.1211. 
(c)(1) Do not count the day the time 
period begins, but do count the last day 
of the time period. 
(2) If the last day is Saturday, Sunday, 
or a Federal holiday, the time period 
ends on the next business day. 
Example: On a Thursday, a borrower 
receives a final SBA loan review 
decision. The time period begins on 
Thursday, so the first day to count is 
Friday. Because the 30th calendar day 
after receipt of the decision is a 
Saturday, the appeal deadline extends 
to the next business day, which is 
Monday. 
(3)(i) A Judge may modify any time 
period or deadline, except: 
(A) The time period governing 
commencement of a case (i.e., when the 
appeal petition may be filed); and 
(B) A time period established by 
statute. 
(ii) A party may move for an 
extension of time pursuant to § 134.211. 
(d) A timely appeal by a PPP borrower 
of a final SBA loan review decision 
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extends the deferment period of the PPP 
loan until a final decision is issued 
under § 134.1211. 
§ 134.1203
Standing. 
Only the borrower on a loan, or its 
legal successor in interest, for which 
SBA has issued a final SBA loan review 
decision that makes a finding in 
§ 134.1201(b)(1) through (4) has 
standing to appeal the final SBA loan 
review decision to OHA. Lenders and 
individual owners of a borrower entity 
do not have standing to appeal a final 
SBA loan review decision. 
§ 134.1204
The appeal petition. 
(a) Content. The appeal petition must 
include the following information: 
(1) A copy of the final SBA loan 
review decision that is being appealed 
and the date it was received by the 
borrower. A Notice of Paycheck 
Protection Program Forgiveness 
Payment does not provide a borrower 
with a right to appeal to OHA. 
(2) A full and specific statement as to 
why the final SBA loan review decision 
is alleged to be erroneous, together with 
all factual information and legal 
arguments supporting the allegations. 
There is no required format for an 
appeal petition. However, the appeal 
petition must meet the following 
requirements: 
(i) The maximum length of an appeal 
petition (not including attachments) is 
20 pages. A table of authorities is 
required only for petitions citing more 
than twenty cases, regulations, or 
statutes. 
(ii) Clearly label any exhibits and 
attachments. 
(3) The name, address, telephone 
number, email address, and signature of 
the appellant or its attorney. 
(b) Dismissal. An appeal petition that 
does not contain all of the information 
required by paragraph (a) of this section 
may be dismissed, with or without 
prejudice, at the Judge’s own initiative, 
or upon motion of SBA. 
(c) Motion for more definite 
statement. (1) SBA may, no later than 
five calendar days after receiving a 
Notice and Order on an appeal petition, 
move for an order to the appellant to 
provide a more definite appeal petition 
or otherwise comply with this section. 
A Judge may order a more definite 
appeal petition on his or her own 
initiative. 
(2) A motion for a more definite 
appeal petition stays SBA’s time for 
filing a response. The Judge will 
establish the time for filing and serving 
a response and will extend the close of 
the record as appropriate. 
(3) If the appellant does not comply 
with the Judge’s order to provide a more 
definite appeal petition or otherwise 
fails to comply with applicable 
regulations in this subpart, the Judge 
may dismiss the petition with prejudice. 
§ 134.1205
Dismissal. 
(a) The Judge must dismiss the appeal 
if: 
(1) The appeal is beyond OHA’s 
jurisdiction as set forth under 
§ 134.1201; 
(2) The appeal is untimely under 
§ 134.1202; 
(3) The appellant lacks standing to 
appeal under § 134.1203; or 
(4) The appeal is premature because 
SBA has not yet made a final SBA loan 
review decision. 
(b) The Judge may dismiss the appeal 
in accordance with § 134.1204(b) or 
(c)(3), or if the appeal does not, on its 
face, allege specific facts that if proven 
to be true, warrant reversal or remand of 
the final SBA loan review decision. 
§ 134.1206
Notice and Order. 
Upon receipt of an appeal challenging 
a final SBA loan review decision, OHA 
will assign the matter to either an 
Administrative Law Judge or an 
Administrative Judge in accordance 
with § 134.218. Unless the appeal is 
dismissed under § 134.1205, the Judge 
will issue a Notice and Order, utilizing 
the OHA Case Portal, establishing a 
deadline for production of the 
administrative record and specifying a 
date by which SBA may respond to the 
appeal. 
§ 134.1207
The administrative record. 
(a) Time limits. The administrative 
record will be due 20 calendar days 
after issuance of the Notice and Order 
unless additional time is requested and 
granted. 
(b) Contents. The administrative 
record shall include non-privileged, 
relevant documents that SBA 
considered in making its final loan 
review decision or that were before SBA 
at the time of the final loan review 
decision. The administrative record 
need not, however, contain all 
documents pertaining to the appellant. 
(c) Non-waiver. In the event that 
privileged or confidential information is 
disclosed in the administrative record, 
such disclosure shall not operate as a 
waiver of any claim of privilege or 
confidentiality by SBA. 
(d) Filing. SBA will file the 
administrative record with OHA and 
serve it on appellant utilizing the OHA 
Case Portal. 
(e) Objections. (1) Any objection to 
the administrative record must be filed 
with OHA and served on SBA no later 
than 30 calendar days after the issuance 
of the Notice and Order, utilizing the 
OHA Case Portal. If additional time to 
file the administrative record was 
requested and granted by a Judge, 
appellant will have 10 calendar days 
from the date SBA is required to file the 
administrative record under the judge’s 
order granting an extension in which to 
file an objection to the administrative 
record. 
(2) The appellant may object to the 
absence of any document from the 
administrative record that the appellant 
believes should have been included in 
the administrative record. 
(3) The Judge will rule upon such 
objections and may direct or permit that 
the administrative record be 
supplemented. 
§ 134.1208
Response to an appeal petition. 
(a) Who may respond. SBA may 
respond to an appeal as determined in 
its discretion, but SBA is not required 
to respond. If SBA elects not to respond, 
such election shall not be interpreted as 
an admission or waiver of any allegation 
of law or fact. In addition, after review 
of the appeal petition, OHA may request 
SBA to respond for good cause shown 
by OHA. Only SBA may respond. If 
filed, the response should set forth the 
relevant facts and legal arguments to the 
issues presented on appeal. 
(b) Time limit. If an SBA response is 
filed, it must be filed within 45 calendar 
days after issuance of the Notice and 
Order. 
(c) Close of record. The record will 
close 45 calendar days from the 
issuance of the Notice and Order, unless 
the Judge decides otherwise. Generally, 
filings after the close of record will not 
be considered. 
(d) Service. If a response is filed, the 
SBA must file its response with OHA, 
and serve a copy of the response upon 
the appellant or its attorney, as 
applicable by utilizing the OHA Case 
Portal. 
(e) Reply to response. Generally, a 
reply to a response is not permitted 
unless the Judge directs otherwise. See 
§ 134.206(e). However, upon motion 
(see § 134.211), and under terms needed 
to avoid prejudice to any non-moving 
party, the Judge may permit the filing 
and service of a supplemental pleading 
after review of SBA’s response and/or 
the administrative record. The proposed 
supplemental pleading must be filed 
and served with the motion utilizing the 
OHA Case Portal. 
§ 134.1209
Evidence beyond the record, 
discovery, and oral hearings. 
(a) Generally, the Judge may not admit 
evidence beyond the administrative 
record. 
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Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations 
(b) Neither discovery nor oral 
hearings will be permitted in appeals 
from final SBA loan review decisions. 
(c) All appeals under this subpart will 
be decided solely on a review of the 
administrative record, the appeal 
petition, any response, any reply or 
supplemental pleading, and filings 
related to objection to the administrative 
record. 
§ 134.1210
Standard of review. 
The standard of review is whether the 
final SBA loan review decision was 
based on clear error of fact or law. The 
appellant has the burden of proof. 
§ 134.1211
Decision on appeal. 
(a) Time limits and contents. The 
Judge will issue his or her decision 
within 45 calendar days after the close 
of record, as practicable. The decision 
will contain findings of fact and 
conclusions of law, the reasons for such 
findings and conclusions, and any relief 
ordered. The decision will be served 
upon appellant and SBA utilizing the 
OHA Case Portal. 
(b) Initial decision. The Judge’s 
decision on the appeal is an initial 
decision. However, unless a request for 
reconsideration is filed pursuant to 
paragraph (c) of this section or the SBA 
Administrator, solely within the 
Administrator’s discretion, decides to 
review or reverse the initial decision 
pursuant to paragraph (d) of this 
section, an initial decision shall become 
the final decision of SBA 30 calendar 
days after its service. The discretionary 
authority of the Administrator does not 
create any additional rights of appeal on 
the part of an appellant not otherwise 
specified in SBA regulations in this 
chapter. Any decision pursuant to this 
subpart applies only to the PPP and 
does not apply to SBA’s 7(a) Loan 
Program generally or to any 
interpretation or application of the 
regulations in part 120 or 121 of this 
chapter. 
(c) Reconsideration. An initial 
decision of the Judge may be 
reconsidered. If a request for 
reconsideration is filed and the SBA 
Administrator does not exercise 
discretion to review or reverse the 
initial decision under paragraph (d) of 
this section, OHA will decide the 
request for reconsideration and OHA’s 
decision on the request for 
reconsideration is a reconsidered initial 
OHA decision. 
(1) Either SBA or appellant may 
request reconsideration by filing with 
the Judge and serving a petition for 
reconsideration within 10 calendar days 
after service of the Judge’s decision. The 
request for reconsideration must clearly 
show an error of fact or law material to 
the decision. SBA does not have to have 
filed a response to the borrower’s appeal 
petition to request reconsideration of 
the initial decision of the Judge. 
(2) The Judge may also reconsider a 
decision on his or her own initiative 
within 20 calendar days after service of 
the Judge’s decision. 
(3) A reconsidered initial OHA 
decision becomes the final decision of 
SBA 30 calendar days after its service 
unless the SBA Administrator, solely 
within the Administrator’s discretion, 
decides to review or reverse the 
reconsidered initial OHA decision 
under paragraph (d) of this section. The 
discretionary authority of the 
Administrator does not create any 
additional rights of appeal on the part 
of an appellant not otherwise specified 
in SBA regulations in this chapter. 
(d) Administrator review. Within 30 
calendar days after the service of an 
initial OHA decision or a reconsidered 
initial OHA decision of a Judge, the SBA 
Administrator, solely within the 
Administrator’s discretion, may elect to 
review and/or reverse an initial OHA 
decision or a reconsidered initial OHA 
decision. In the event that the 
Administrator elects to review and/or 
reverse an initial OHA decision and a 
timely request for reconsideration of a 
Judge’s initial decision is also filed by 
an appellant pursuant to paragraph (c) 
of this section, the Administrator will 
consider such request for 
reconsideration. The Administrator’s 
decision will become the final decision 
of the SBA upon issuance. 
(e) Precedent. Neither initial nor final 
decisions rendered by OHA under this 
subpart are precedential. 
(f) Publication. Final decisions are 
normally published without redactions 
on OHA’s website. PPP decisions will 
likely contain confidential business and 
financial information and/or personally 
identifiable information. Therefore, 
OHA, within its full discretion, may 
publish final decisions issued under 
this section with any necessary 
redactions. 
(g) Appeal to Federal district court. 
Final decisions may be appealed to the 
appropriate Federal district court only. 
§ 134.1212
Effects of the decision. 
OHA may affirm, reverse, or remand 
a final SBA loan review decision. If 
remanded, OHA no longer has 
jurisdiction over the matter unless a 
new appeal is filed as a result of a new 
final SBA loan review decision. 
§ 134.1213
Equal Access to Justice Act. 
A prevailing appellant is not entitled 
to recover attorney’s fees. Appeals to 
OHA from final SBA loan review 
decisions under the PPP are not 
proceedings that are required to be 
conducted by an Administrative Law 
Judge under § 134.603. 
§ 134.1214
Confidential information. 
If a filing or other submission made 
pursuant to an appeal in this subpart 
contains confidential business and 
financial information; personally 
identifiable information; source 
selection sensitive information; income 
tax returns; documents and information 
covered under § 120.1060 of this 
chapter; or any other exempt 
information, that information is not 
available to the public pursuant to the 
Freedom of Information Act (FOIA), 5 
U.S.C. 552. 
Isabella Casillas Guzman, 
Administrator. 
[FR Doc. 2021–19985 Filed 9–14–21; 11:15 am] 
BILLING CODE 8026–03–P 
DEPARTMENT OF TRANSPORTATION 
Federal Aviation Administration 
14 CFR Part 39 
[Docket No. FAA–2021–0701; Project 
Identifier MCAI–2021–00365–T; Amendment 
39–21704; AD 2021–18–03] 
RIN 2120–AA64 
Airworthiness Directives; Yabora˜ 
Indu´stria Aerona´utica S.A. (Type 
Certificate Previously Held by Embraer 
S.A.) Airplanes 
AGENCY: Federal Aviation 
Administration (FAA), DOT. 
ACTION: Final rule; request for 
comments. 
SUMMARY: The FAA is superseding 
Airworthiness Directive (AD) 2020–26– 
02, which applied to certain Yabora˜ 
Indu´stria Aerona´utica S.A. (type 
certificate previously held by Embraer 
S.A.) Model ERJ 190–400 airplanes. AD 
2020–26–02 required amending the 
existing airplane flight manual (AFM) to 
incorporate a new limitation and revise 
certain normal procedures. This AD 
retains those requirements and also 
requires upgrading the electronic engine 
control (EEC) software, as specified in 
an Ageˆncia Nacional de Aviac¸a˜o Civil 
(ANAC) AD, which is incorporated by 
reference. This AD was prompted by a 
report of an in-flight shutdown (IFSD) 
due in part to failure in the low-pressure 
compressor (LPC) rotor 1 during 
operation in high altitude at high thrust 
settings, and by the development of 
updated EEC software, which would 
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