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

Summary

A Small Business Administration interim final rule, "Paycheck Protection Program-Additional Revisions to First Interim Final Rule", published in the Federal Register, Vol. 85, No. 118, on Thursday, June 18, 2020, under 13 CFR Part 120, RIN 3245–AH50, docket number SBA–2020–0036. It revises SBA's interim final rule published in the Federal Register on April 15, 2020 by changing the eligibility requirement related to felony convictions of applicants or owners of the applicant. It states that the rule is effective without advance notice and public comment because section 1114 of the CARES Act authorizes SBA to issue regulations implementing Title I of the Act without regard to notice requirements.

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Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations 36717

1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Highlight the information that you funding and authority for the PPP. On
Comp., p. 215, as modified by E.O. 12731, 55 consider to be CBI and explain why you June 5, 2020, the President signed the
FR 42547, 3 CFR, 1990 Comp., p. 306. believe SBA should hold this Paycheck Protection Program Flexibility
§ 2635.204 [Amended] information as confidential. SBA will Act of 2020 (Flexibility Act) (Pub. L.
review the information and make the 116–142).
■ 5. In § 2635.204, in paragraph final determination whether it will
(g)(3)(iv) and examples 1 and 4 II. Comments and Immediate Effective
publish the information.
following paragraph (g)(6), remove the Date
FOR FURTHER INFORMATION CONTACT: A
dollar amount ‘‘$390’’ and add in its This interim final rule is effective
Call Center Representative at 833–572–
place ‘‘$415’’ wherever it occurs. without advance notice and public
0502, or the local SBA Field Office; the
[FR Doc. 2020–12357 Filed 6–17–20; 8:45 am] list of offices can be found at https:// comment because section 1114 of the
BILLING CODE 6345–03–P www.sba.gov/tools/local-assistance/ CARES Act authorizes SBA to issue
districtoffices. regulations to implement Title I of the
Act without regard to notice
SUPPLEMENTARY INFORMATION:
SMALL BUSINESS ADMINISTRATION requirements. In addition, SBA has
I. Background Information determined that there is good cause for
13 CFR Part 120 dispensing with advance public notice
On March 13, 2020, President Trump
and comment on the grounds that that
[Docket No. SBA–2020–0036] declared the ongoing Coronavirus
it would be contrary to the public
RIN 3245–AH50 Disease 2019 (COVID–19) pandemic of
interest. Specifically, advance public
sufficient severity and magnitude to
notice and comment would defeat the
Business Loan Program Temporary warrant an emergency declaration for all
purpose of this interim final rule given
Changes; Paycheck Protection states, territories, and the District of
that SBA’s authority to guarantee PPP
Program—Additional Revisions to First Columbia. With the COVID–19
loans expires on June 30, 2020. These
Interim Final Rule emergency, many small businesses
same reasons provide good cause for
nationwide are experiencing economic
AGENCY: U.S. Small Business SBA to dispense with the 30-day
hardship as a direct result of the
Administration. delayed effective date provided in the
Federal, State, and local public health
ACTION: Interim final rule. Administrative Procedure Act. Although
measures that are being taken to
this interim final rule is effective on or
minimize the public’s exposure to the
SUMMARY: On April 2, 2020, the U.S. before date of filing, comments are
virus. These measures, some of which
Small Business Administration (SBA) solicited from interested members of the
are government-mandated, have been
posted on its website an interim final public on all aspects of the interim final
implemented nationwide and include
rule relating to the implementation of rule, including section III below. These
the closures of restaurants, bars, and
sections 1102 and 1106 of the comments must be submitted on or
gyms. In addition, based on the advice
Coronavirus Aid, Relief, and Economic before July 20. 2020. The SBA will
of public health officials, other
Security Act (CARES Act or the Act) consider these comments, comments
measures, such as keeping a safe
(published in the Federal Register on received on the interim final rule posted
distance from others or even stay-at-
April 15, 2020). Section 1102 of the Act on SBA’s website April 2, 2020 (the
home orders, have been implemented,
temporarily adds a new product, titled First Interim Final Rule) and published
resulting in a dramatic decrease in
the ‘‘Paycheck Protection Program,’’ to in the Federal Register on April 15,
economic activity as the public avoids
the U.S. Small Business 2020, and the need for making any
malls, retail stores, and other
Administration’s (SBA’s) 7(a) Loan revisions as a result of these comments.
businesses.
Program. Subsequently, SBA issued a On March 27, 2020, the President III. Paycheck Protection Program—
number of interim final rules signed the Coronavirus Aid, Relief, and Additional Revisions to First Interim
implementing the Paycheck Protection Economic Security Act (the CARES Act Final Rule (85 FR 20811)
Program. This interim final rule revises or the Act) (Pub. L. 116–136) to provide
SBA’s interim final rule published in Overview
emergency assistance and health care
the Federal Register on April 15, 2020 response for individuals, families, and The CARES Act was enacted to
by changing the eligibility requirement businesses affected by the coronavirus provide immediate assistance to
related to felony convictions of pandemic. The Small Business individuals, families, and businesses
applicants or owners of the applicant. Administration (SBA) received funding affected by the COVID–19 emergency.
DATES: and authority through the Act to modify Among the provisions contained in the
Effective date: The provisions in this existing loan programs and establish a CARES Act are provisions authorizing
interim final rule are effective June 16, new loan program to assist small SBA to temporarily guarantee loans
2020. businesses nationwide adversely under a new 7(a) loan program titled the
Comment date: Comments must be impacted by the COVID–19 emergency. ‘‘Paycheck Protection Program.’’ Loans
received on or before July 20, 2020. Section 1102 of the Act temporarily guaranteed under the Paycheck
ADDRESSES: You may submit comments, permits SBA to guarantee 100 percent of Protection Program (PPP) will be 100
identified by number SBA–2020–0036, 7(a) loans under a new program titled percent guaranteed by SBA, and the full
through the Federal eRulemaking Portal: the ‘‘Paycheck Protection Program.’’ principal amount of the loans may
http://www.regulations.gov. Follow the Section 1106 of the Act provides for qualify for loan forgiveness. The
instructions for submitting comments. forgiveness of up to the full principal purpose of this interim final rule is to
SBA will post all comments on amount of qualifying loans guaranteed make changes to the First Interim Final
www.regulations.gov. If you wish to under the Paycheck Protection Program. Rule, posted on SBA’s website on April
submit confidential business On April 24, 2020, the President 2, 2020, and published in the Federal
information (CBI) as defined in the User signed the Paycheck Protection Program Register on April 15, 2020 (85 FR
Notice at www.regulations.gov, please and Health Care Enhancement Act (Pub. 20811). The First Interim Final Rule, as
send an email to ppp-ifr@sba.gov. L. 116–139), which provided additional amended, should be interpreted

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36718 Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations

consistent with the frequently asked Compliance With Executive Orders these amendments, conforming changes
questions (FAQs) regarding the PPP that 12866, 12988, 13132, 13563, and 13771, will be made to Question 6 of Form
are posted on SBA’s website 1 and the the Paperwork Reduction Act (44 2483, Borrower Application Form, and
other interim final rules issued U.S.C. Ch. 35), and the Regulatory Section H of Form 2484, Lender
regarding the PPP.2 Flexibility Act (5 U.S.C. 601–612) Application Form. SBA will submit the
revisions to these forms to the Office of
1. Changes to the First Interim Final Executive Orders 12866, 13563, and Management and Budget for approval.
Rule 13771
This interim final rule is Regulatory Flexibility Act (RFA)
Eligibility Requirements
economically significant for the The Regulatory Flexibility Act (RFA)
The First Interim Final Rule provided, purposes of Executive Orders 12866 and generally requires that when an agency
among other things, that a PPP loan will 13563, and is considered a major rule issues a proposed rule, or a final rule
not be approved if an owner of 20 under the Congressional Review Act. pursuant to section 553(b) of the APA or
percent or more of the equity of the SBA, however, is proceeding under the another law, the agency must prepare a
applicant has been convicted of a felony emergency provision at Executive Order regulatory flexibility analysis that meets
within the last five years. After further 12866 Section 6(a)(3)(D) based on the the requirements of the RFA and
consideration, the Administrator, in need to move expeditiously to mitigate publish such analysis in the Federal
consultation with the Secretary of the the current economic conditions arising Register. 5 U.S.C. 603, 604. Specifically,
Treasury (the Secretary), has determined from the COVID–19 emergency. This the RFA normally requires agencies to
that a shorter timeframe for felonies that rule’s designation under Executive describe the impact of a rulemaking on
do not involve fraud, bribery, Order 13771 will be informed by public small entities by providing a regulatory
embezzlement, or a false statement in a comment. impact analysis. Such analysis must
loan application or an application for This rule is necessary to implement address the consideration of regulatory
federal financial assistance is more Sections 1102 and 1106 of the CARES options that would lessen the economic
consistent with Congressional intent to Act and the Flexibility Act in order to effect of the rule on small entities. The
provide relief to small businesses and provide economic relief to small RFA defines a ‘‘small entity’’ as (1) a
also promotes the important policies businesses nationwide adversely proprietary firm meeting the size
underlying the First Step Act of 2018 impacted under the COVID–19 standards of the Small Business
(Pub. L. 115–391). Therefore, Part Emergency Declaration. We anticipate Administration (SBA); (2) a nonprofit
III.2.b.iii. of the First Interim Final Rule that this rule will result in substantial organization that is not dominant in its
(85 FR 20811, 20812) is revised to read benefits to small businesses, their field; or (3) a small government
as follows: employees, and the communities they jurisdiction with a population of less
b. Could I be ineligible even if I meet serve. However, we lack data to estimate than 50,000. 5 U.S.C. 601(3)–(6). Except
the eligibility requirements in (a) above? the effects of this rule. for such small government jurisdictions,
You are ineligible for a PPP loan if, for neither State nor local governments are
example: Executive Order 12988 ‘‘small entities.’’ Similarly, for purposes
* * * * * SBA has drafted this rule, to the of the RFA, individual persons are not
iii. An owner of 20 percent or more extent practicable, in accordance with small entities.
of the equity of the applicant is the standards set forth in section 3(a) The requirement to conduct a
incarcerated, on probation, on parole; and 3(b)(2) of Executive Order 12988, to regulatory impact analysis does not
presently subject to an indictment, minimize litigation, eliminate apply if the head of the agency ‘‘certifies
criminal information, arraignment, or ambiguity, and reduce burden. The rule that the rule will not, if promulgated,
other means by which formal criminal has no preemptive effect but does have have a significant economic impact on
charges are brought in any jurisdiction; a limited retroactive effect consistent a substantial number of small entities.’’
or has been convicted of a felony with section 3(d) of the Flexibility Act. 5 U.S.C. 605(b). The agency must,
involving fraud, bribery, embezzlement, however, publish the certification in the
Executive Order 13132 Federal Register at the time of
or a false statement in a loan application
or an application for federal financial SBA has determined that this rule publication of the rule, ‘‘along with a
assistance within the last five years or will not have substantial direct effects statement providing the factual basis for
any other felony within the last year; or on the States, on the relationship such certification.’’ If the agency head
between the National Government and has not waived the requirements for a
* * * * * regulatory flexibility analysis in
the States, or on the distribution of
2. Additional Information power and responsibilities among the accordance with the RFA’s waiver
various layers of government. Therefore, provision, and no other RFA exception
SBA may provide further guidance, if
SBA has determined that this rule has applies, the agency must prepare the
needed, through SBA notices which will
no federalism implications warranting regulatory flexibility analysis and
be posted on SBA’s website at
preparation of a federalism assessment. publish it in the Federal Register at the
www.sba.gov. Questions on the
time of promulgation or, if the rule is
Paycheck Protection Program may be Paperwork Reduction Act, 44 U.S.C. promulgated in response to an
directed to the Lender Relations Chapter 35 emergency that makes timely
Specialist in the local SBA Field Office. SBA has determined that this rule compliance impracticable, within 180
The local SBA Field Office may be will require modification to the existing days of publication of the final rule. 5
found at https://www.sba.gov/tools/ PPP information collection that is U.S.C. 604(a), 608(b).
local-assistance/districtoffices. approved under OMB Control Number Rules that are exempt from notice and
3245–0407 as an emergency request comment are also exempt from the RFA
1 See https://www.sba.gov/document/support—
until October 31, 2020. As discussed requirements, including conducting a
faq-lenders-borrowers.
2 See https://www.sba.gov/funding-programs/ above, this rule amends the PPP regulatory flexibility analysis, when
loans/coronavirus-relief-options/paycheck- eligibility requirements regarding among other things the agency for good
protection-program. certain felony charges. As a result of cause finds that notice and public

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Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations 36719

procedure are impracticable, Circular A–119: Federal Participation in SUPPLEMENTARY INFORMATION:
unnecessary, or contrary to the public the Development and Use of Voluntary
Background
interest. Small Business Consensus Standards and in Conformity
Administration’s Office of Advocacy Assessment Activities, and a ‘‘standards The Bureau of Industry and Security
guide: How to Comply with the organization,’’ is the equivalent of a (BIS) has continued to receive questions
Regulatory Flexibility Act, Ch.1. p.9. ‘‘voluntary consensus standards body’’ regarding the applicability of the Export
Accordingly, SBA is not required to as defined in Office of Management and Administration Regulations (15 CFR
conduct a regulatory flexibility analysis. Budget (OMB) Circular A–119: Federal 730–774) (EAR) in the context of
Participation in the Development and standards setting or development in
Authority: 15 U.S.C. 636(a)(36);
Use of Voluntary Consensus Standards light of the addition of Huawei
Coronavirus Aid, Relief, and Economic
Security Act, Pub. L. 116–136, Section 1114. and in Conformity Assessment Technologies Co., Ltd. (Huawei) and its
Activities. This interim final rule does 114 non-U.S. affiliates to the Entity List
Jovita Carranza, not change the assessment of whether (Supplement No. 4 to part 744 of the
Administrator. ‘‘technology’’ is subject to the EAR. BIS EAR) (see 84 FR 22961 (May 21, 2019)
[FR Doc. 2020–13130 Filed 6–16–20; 2:00 pm] is requesting comments on the impact of and 84 FR 43493 (August 21, 2019)) and
BILLING CODE 8026–03–P these revisions. the Temporary General License (TGL).
The TGL was published on May 22,
DATES: This rule is effective June 18,
2019 (84 FR 23468), extended and
2020. Submit comments on or before
DEPARTMENT OF COMMERCE amended through a final rule published
August 17, 2020.
on August 21, 2019 (84 FR 43487), and
ADDRESSES: You may submit comments,
Bureau of Industry and Security is currently extended through August
identified by docket number BIS 2020– 13, 2020 in a final rule published on
0017 or RIN 0694–AI06, through the May 18, 2020 (85 FR 29610). On August
15 CFR Parts 744 and 772 Federal eRulemaking Portal: http:// 19, 2019, BIS posted a ‘‘General
[Docket No. 200611–0158] www.regulations.gov. Follow the Advisory Opinion Concerning
instructions for submitting comments. Prohibited Activities in the Standards
RIN 0694–AI06 All filers using the portal should use Setting or Development Context When a
the name of the person or entity Listed Entity Is Involved’’ to the BIS
Release of ‘‘Technology’’ to Certain
submitting comments as the name of website that addressed the applicability
Entities on the Entity List in the
their files, in accordance with the of § 734.7 of the EAR (Published) (15
Context of Standards Organizations
instructions below. Anyone submitting CFR 734.7) to certain types of releases.
AGENCY: Bureau of Industry and business confidential information With publication of this rule, that
Security, Commerce. should clearly identify the business advisory opinion is rescinded, and BIS
ACTION: Interim final rule; request for confidential portion at the time of has removed the guidance from its
comments. submission, file a statement justifying website. This rule removes certain
nondisclosure and referencing the license requirements imposed by the
SUMMARY: Huawei Technologies Co., specific legal authority claimed, and original listing, removing the need to
Ltd. (Huawei) and 114 of its foreign provide a non-confidential version of determine the application of controls to
affiliates were added to the Entity List the submission. those releases.
by the Bureau of Industry and Security For comments submitted The assessment of whether
(BIS) in 2019, but continue to electronically containing business ‘‘technology’’ is subject to the EAR is
participate in many important confidential information, the file name the same regardless of whether a person
international standards organizations in of the business confidential version on the Entity List is a member of, or
which U.S. companies also participate. should begin with the characters ‘‘BC.’’ participates in, the standards setting or
As international standards serve as the Any page containing business development group or body. Because of
building blocks for product confidential information must be clearly the importance of U.S. participation and
development and help ensure marked ‘‘BUSINESS CONFIDENTIAL’’ leadership in standards organizations,
functionality, interoperability, and on the top of that page. The and in view of the consistent concerns
safety of the products, it is important to corresponding non-confidential version expressed with Huawei’s participation
U.S. technological leadership that U.S. of those comments must be clearly therein, this rule revises the Entity List
companies be able to work in these marked ‘‘PUBLIC.’’ The file name of the to authorize certain releases of
bodies in order to ensure that U.S. non-confidential version should begin technology without a license.
standards proposals are fully with the character ‘‘P.’’ The ‘‘BC’’ and Specifically, technology subject to the
considered. Since Huawei’s addition to ‘‘P’’ should be followed by the name of EAR that is designated as EAR99 or
the Entity List, organizations have the person or entity submitting the controlled on the Commerce Control
consequently sought clarity about U.S. comments or rebuttal comments. All List only for anti-terrorism (AT) reasons
industry participation in standards filers should name their files using the may be released to members of a
development. BIS is amending the name of the person or entity submitting standards organization without a
Export Administration Regulations the comments. Any submissions with license, including Huawei, if released
(EAR) to authorize the release of certain file names that do not begin with a ‘‘BC’’ for the purpose of contributing to the
technology to Huawei and its affiliates or ‘‘P’’ will be assumed to be public and revision or development of a standard.
on the Entity List without a license if will be made publicly available through This interim final rule adopts in § 772.1
such release is made for the purpose of http://www.regulations.gov. (Definitions) the definitions of
contributing to the revision or FOR FURTHER INFORMATION CONTACT: ‘‘standard’’ and ‘‘standards
development of a ‘‘standard’’ in a Susan Kramer, Regulatory Policy organization’’ from the Office of
‘‘standards organization.’’ For the Division, Bureau of Industry and Management and Budget (OMB)
purpose of this interim final rule, a Security, Department of Commerce. Circular A–119: Federal Participation in
‘‘standard’’ is as defined in Office of Phone: (202) 482–2440; Fax (202) 482– the Development and Use of Voluntary
Management and Budget (OMB) 3355; Email: Susan.Kramer@bis.doc.gov. Consensus Standards and in Conformity

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