Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements-Extension of Limited Safe Harbor With Respect to Certification Concerning Need for PPP Loan Request
Summary
A Small Business Administration interim final rule, "Paycheck Protection Program—Requirements—Extension of Limited Safe Harbor With Respect to Certification Concerning Need for PPP Loan Request", published in the Federal Register, Vol. 85, No. 97, on Tuesday, May 19, 2020, under 13 CFR Part 120, RIN 3245–AH41, docket number SBA–2020–0026. It revises the interim final rule posted on April 24, 2020 by extending the date by which certain PPP borrowers may repay their loans under the limited safe harbor. It states that the rule is effective immediately and that comments are solicited from interested members of the public.
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Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 29845 13563, and is considered a major rule small entities. The requirement to Protection Program was established under the Congressional Review Act. conduct a regulatory impact analysis under the Coronavirus Aid, Relief, and SBA, however, is proceeding under the does not apply if the head of the agency Economic Security Act (CARES Act or emergency provision at Executive Order ‘‘certifies that the rule will not, if the Act). This interim final rule revises 12866 Section 6(a)(3)(D) based on the promulgated, have a significant the interim final rule posted on April need to move expeditiously to mitigate economic impact on a substantial 24, 2020, by extending the date by the current economic conditions arising number of small entities.’’ 5 U.S.C. which certain Paycheck Protection from the COVID–19 emergency. This 605(b). The agency must, however, Program borrowers may repay their rule’s designation under Executive publish the certification in the Federal loans from May 7, 2020 to May 14, 2020, Order 13771 will be informed by public Register at the time of publication of the in order to avail themselves of a safe comment. rule, ‘‘along with a statement providing harbor with respect to a certification the factual basis for such certification.’’ required by the Act, and makes other Executive Order 12988 If the agency head has not waived the conforming changes. This interim final SBA has drafted this rule, to the requirements for a regulatory flexibility rule supplements SBA’s implementation extent practicable, in accordance with analysis in accordance with the RFA’s of the Act and requests public comment. the standards set forth in section 3(a) waiver provision, and no other RFA DATES: and 3(b)(2) of Executive Order 12988, to exception applies, the agency must Effective date: This rule is effective minimize litigation, eliminate prepare the regulatory flexibility May 19, 2020. ambiguity, and reduce burden. The rule analysis and publish it in the Federal Applicability date: This interim final has no preemptive or retroactive effect. Register at the time of promulgation or, rule applies to borrowers who applied Executive Order 13132 if the rule is promulgated in response to for loans under the Paycheck Protection an emergency that makes timely Program. SBA has determined that this rule compliance impracticable, within 180 Comment date: Comments must be will not have substantial direct effects days of publication of the final rule. 5 received on or before June 18, 2020. on the States, on the relationship U.S.C. 604(a), 608(b). Rules that are ADDRESSES: You may submit comments, between the National Government and exempt from notice and comment are identified by number SBA–2020–0026 the States, or on the distribution of also exempt from the RFA requirements, through the Federal eRulemaking Portal: power and responsibilities among the including conducting a regulatory http://www.regulations.gov. Follow the various layers of government. Therefore, flexibility analysis, when among other instructions for submitting comments. SBA has determined that this rule has things the agency for good cause finds SBA will post all comments on no federalism implications warranting that notice and public procedure are www.regulations.gov. If you wish to preparation of a federalism assessment. impracticable, unnecessary, or contrary submit confidential business Paperwork Reduction Act, 44 U.S.C. to the public interest. SBA Office of information (CBI) as defined in the User Chapter 35 Advocacy guide: How to Comply with Notice at www.regulations.gov, please the Regulatory Flexibility Act, Ch.1. p.9. send an email to ppp-ifr@sba.gov. SBA has determined that this rule Accordingly, SBA is not required to Highlight the information that you will not impose new or modify existing conduct a regulatory flexibility analysis. consider to be CBI and explain why you recordkeeping or reporting requirements under the Paperwork Reduction Act. believe SBA should hold this Jovita Carranza, information as confidential. SBA will Regulatory Flexibility Act (RFA) Administrator. review the information and make the [FR Doc. 2020–10658 Filed 5–18–20; 8:45 am] The Regulatory Flexibility Act (RFA) final determination whether it will BILLING CODE P publish the information. generally requires that when an agency issues a proposed rule, or a final rule FOR FURTHER INFORMATION CONTACT: A pursuant to section 553(b) of the APA or SMALL BUSINESS ADMINISTRATION Call Center Representative at 833–572– another law, the agency must prepare a 0502, or the local SBA Field Office; the regulatory flexibility analysis that meets 13 CFR Part 120 list of offices can be found at https:// the requirements of the RFA and www.sba.gov/tools/local-assistance/ [Docket Number SBA–2020–0026] districtoffices. publish such analysis in the Federal Register. 5 U.S.C. 603, 604. Specifically, RIN 3245–AH41 SUPPLEMENTARY INFORMATION: the RFA normally requires agencies to describe the impact of a rulemaking on Business Loan Program Temporary I. Background Information small entities by providing a regulatory Changes; Paycheck Protection On March 13, 2020, President Trump impact analysis. Such analysis must Program—Requirements—Extension declared the ongoing Coronavirus address the consideration of regulatory of Limited Safe Harbor With Respect to Disease 2019 (COVID–19) pandemic of options that would lessen the economic Certification Concerning Need for PPP sufficient severity and magnitude to effect of the rule on small entities. The Loan Request warrant an emergency declaration for all RFA defines a ‘‘small entity’’ as (1) a AGENCY: U.S. Small Business States, territories, and the District of proprietary firm meeting the size Administration. Columbia. With the COVID–19 standards of the Small Business ACTION: Interim final rule. emergency, many small businesses Administration (SBA); (2) a nonprofit nationwide are experiencing economic organization that is not dominant in its SUMMARY: On April 24, 2020, the U.S. hardship as a direct result of the field; or (3) a small government Small Business Administration (SBA) Federal, State, tribal, and local public jurisdiction with a population of less posted an interim final rule relating to health measures that are being taken to than 50,000. 5 U.S.C. 601(3)–(6). Except promissory notes, authorizations, minimize the public’s exposure to the for such small government jurisdictions, affiliation, and eligibility in connection virus. These measures, some of which neither State nor local governments are with the implementation of a temporary are government-mandated, are being ‘‘small entities.’’ Similarly, for purposes new program, titled the ‘‘Paycheck implemented nationwide and include of the RFA, individual persons are not Protection Program.’’ The Paycheck the closures of restaurants, bars, and VerDate Sep<11>2014 17:20 May 18, 2020 Jkt 250001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM 19MYR1 29846 Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations gyms. In addition, based on the advice effective date provided in the Limited Safe Harbor With Respect to of public health officials, other Administrative Procedure Act. Certification Concerning Need for PPP measures, such as keeping a safe Although this interim final rule is Loan Request distance from others or even stay-at- effective immediately, comments are Consistent with section 1102 of the home orders, are being implemented, solicited from interested members of the CARES Act, the Borrower Application resulting in a dramatic decrease in public on all aspects of the interim final Form requires PPP applicants to certify economic activity as the public avoids rule, including section III below. These that ‘‘[c]urrent economic uncertainty malls, retail stores, and other comments must be submitted on or makes this loan request necessary to businesses. support the ongoing operations of the before June 18, 2020. SBA will consider On March 27, 2020, the President these comments and the need for Applicant.’’ Any borrower that applied signed the Coronavirus Aid, Relief, and making any revisions as a result of these for a PPP loan and repays the loan in Economic Security Act (the CARES Act comments. full by May 14, 2020 will be deemed by or the Act) (Pub. L. 116–136) to provide SBA to have made the required emergency assistance and health care III. Paycheck Protection Program certification in good faith. The response for individuals, families, and Requirements for Extension of Safe Administrator, in consultation with the businesses affected by the coronavirus Harbor With Respect to Certification Secretary, determined that this safe pandemic. The Small Business Concerning Need for PPP Loan Request harbor is necessary and appropriate to Administration (SBA) received funding The CARES Act was enacted to ensure that borrowers promptly repay and authority through the Act to modify existing loan programs and establish a provide immediate assistance to PPP loan funds that the borrower new loan program to assist small individuals, families, and organizations obtained based on a misunderstanding businesses nationwide adversely affected by the COVID–19 emergency. or misapplication of the required impacted by the COVID–19 emergency. Among the provisions contained in the certification standard. The extension of the safe harbor Section 1102 of the Act temporarily CARES Act are provisions authorizing requires a corresponding date change to permits SBA to guarantee 100 percent of SBA to temporarily guarantee loans the interim final rule that SBA posted 7(a) loans under a new program titled under the Paycheck Protection Program on its website on April 28, 2020, which the ‘‘Paycheck Protection Program.’’ (PPP). Loans under the PPP are 100 Section 1106 of the Act provides for was published in the Federal Register percent guaranteed by SBA, and the full forgiveness of up to the full principal on May 4, 2020 (85 FR 26321), regarding principal amount of the loans and any amount of qualifying loans guaranteed PPP loan disbursements. Specifically, accrued interest may qualify for loan under the Paycheck Protection Program. Part III.1.b. provides that Lenders must forgiveness. The Act requires each On April 24, 2020, the President signed electronically upload SBA Form 1502 applicant applying for a PPP loan to the Paycheck Protection Program and information within 20 calendar days certify ‘‘that the uncertainty of current Health Care Enhancement Act (Pub. L. after a PPP loan is approved or, for loans economic conditions makes necessary 116–139), which provided additional approved before the availability of the the loan request to support the ongoing funding and authority for the PPP. updated SBA Form 1502 reporting obligations’’ of the applicant. On April process, by May 18, 2020. 85 FR 26321, II. Comments and Immediate Effective 24, 2020, SBA posted on its website an 26323. Because of the extension of the Date interim final rule (the Fourth PPP safe harbor deadline, SBA is extending Interim Final Rule), which also was This interim final rule is effective the deadline for the submission of the published in the Federal Register on without advance notice and public initial SBA Form 1502 from May 18, April 28, 2020 (85 FR 23450), to provide comment because section 1114 of the 2020 to May 22, 2020. relief to PPP borrowers who applied for Act authorizes SBA to issue regulations and received PPP loans based on a Additional Information to implement Title I of the Act without misunderstanding or misapplication of regard to notice requirements. In SBA may provide further guidance, if the required certification standard. The needed, through SBA notices that will addition, SBA has determined that there Fourth PPP Interim Final Rule provides is good cause for dispensing with be posted on SBA’s website at that any borrower that applied for a PPP www.sba.gov. Questions on the advance public notice and comment on loan and repays the loan in full by May the ground that it would be contrary to Paycheck Protection Program may be 7, 2020, will be deemed by SBA to have directed to the Lender Relations the public interest. Specifically, SBA, in made the required certification in good consultation with the Department of the Specialist in the local SBA Field Office. faith. SBA, in consultation with the The local SBA Field Office may be Treasury, intends to issue additional Department of the Treasury, will issue guidance with regard to the safe harbor found at https://www.sba.gov/tools/ additional guidance before May 14, local-assistance/districtoffices. and extending the safe harbor deadline 2020 concerning how SBA will review from May 7 to May 14 will afford Compliance With Executive Orders the required certification to help PPP Paycheck Protection Program borrowers 12866, 12988, 13132, 13563, and 13771, borrowers evaluate whether they may time to review the forthcoming SBA the Paperwork Reduction Act (44 U.S.C. have misunderstood or misapplied the guidance and decide whether to avail Ch. 35), and the Regulatory Flexibility statutory certification standard.1 Based themselves of the safe harbor. SBA Act (5 U.S.C. 601–612). on this upcoming guidance, SBA, in previously announced this intended consultation with the Department of the Executive Orders 12866, 13563, and extension in nonbinding guidance Treasury, determined that it is necessary 13771 published on May 5, 2020. Advance and appropriate to extend the safe notice and public comment would This interim final rule is harbor deadline for repaying PPP loans defeat the purpose of this interim final economically significant for the from May 7, 2020 to May 14, 2020. rule given the timeline for the existing purposes of Executive Orders 12866 and safe harbor and short-term, temporary 1 This guidance is available at https:// 13563, and is considered a major rule nature of this program. These same www.sba.gov/sites/default/files/2020-05/Paycheck- under the Congressional Review Act. reasons provide good cause for SBA to Protection-Program-Frequently-Asked-Questions_ SBA, however, is proceeding under the dispense with the 30-day delayed 05%2013%2020_2.pdf. emergency provision at Executive Order VerDate Sep<11>2014 17:20 May 18, 2020 Jkt 250001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM 19MYR1 Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 29847 12866 Section 6(a)(3)(D) based on the promulgated, have a significant relief to small businesses nationwide need to move expeditiously to mitigate economic impact on a substantial adversely impacted by the Coronavirus the current economic conditions arising number of small entities.’’ 5 U.S.C. Disease 2019 (COVID–19). SBA posted from the COVID–19 emergency. This 605(b). The agency must, however, additional interim final rules on April 3, rule’s designation under Executive publish the certification in the Federal 2020, April 14, 2020, April 24, 2020, Order 13771 will be informed by public Register at the time of publication of the April 28, 2020, April 30, 2020, May 5, comment. rule, ‘‘along with a statement providing 2020, and May 8, 2020, and the the factual basis for such certification.’’ Department of the Treasury posted an Executive Order 12988 additional interim final rule on April If the agency head has not waived the SBA has drafted this rule, to the requirements for a regulatory flexibility 28, 2020. This interim final rule extent practicable, in accordance with analysis in accordance with the RFA’s supplements the previously posted the standards set forth in section 3(a) waiver provision, and no other RFA interim final rules by providing and 3(b)(2) of Executive Order 12988, to exception applies, the agency must guidance on additional eligibility minimize litigation, eliminate prepare the regulatory flexibility requirements for certain electric ambiguity, and reduce burden. The rule analysis and publish it in the Federal cooperatives, and requests public has no preemptive or retroactive effect. Register at the time of promulgation or, comment. Executive Order 13132 if the rule is promulgated in response to DATES: an emergency that makes timely Effective date: This rule is effective SBA has determined that this rule compliance impracticable, within 180 May 19, 2020. will not have substantial direct effects days of publication of the final rule. 5 Applicability date: This interim final on the States, on the relationship U.S.C. 604(a), 608(b). Rules that are rule applies to applications submitted between the National Government and exempt from notice and comment are under the Paycheck Protection Program the States, or on the distribution of also exempt from the RFA requirements, through June 30, 2020, or until funds power and responsibilities among the including conducting a regulatory made available for this purpose are various layers of government. Therefore, flexibility analysis, when among other exhausted. SBA has determined that this rule has things the agency for good cause finds Comment date: Comments must be no federalism implications warranting that notice and public procedure are received on or before June 18, 2020. preparation of a federalism assessment. impracticable, unnecessary, or contrary ADDRESSES: You may submit comments, Paperwork Reduction Act, 44 U.S.C. to the public interest. SBA Office of identified by number SBA–2020–0029 Chapter 35 Advocacy guide: How to Comply with through the Federal eRulemaking Portal: the Regulatory Flexibility Act, Ch.1. p.9. http://www.regulations.gov. Follow the SBA has determined that this rule Accordingly, SBA is not required to instructions for submitting comments. will not impose new or modify existing conduct a regulatory flexibility analysis. SBA will post all comments on recordkeeping or reporting requirements under the Paperwork Reduction Act. www.regulations.gov. If you wish to Jovita Carranza, submit confidential business Regulatory Flexibility Act (RFA) Administrator. information (CBI) as defined in the User [FR Doc. 2020–10649 Filed 5–18–20; 8:45 am] The Regulatory Flexibility Act (RFA) Notice at www.regulations.gov, please BILLING CODE P send an email to ppp-ifr@sba.gov. generally requires that when an agency issues a proposed rule, or a final rule Highlight the information that you pursuant to section 553(b) of the APA or consider to be CBI and explain why you SMALL BUSINESS ADMINISTRATION another law, the agency must prepare a believe SBA should hold this regulatory flexibility analysis that meets 13 CFR Parts 120 and 121 information as confidential. SBA will the requirements of the RFA and review the information and make the [Docket Number SBA–2020–0029] final determination whether it will publish such analysis in the Federal Register. 5 U.S.C. 603, 604. Specifically, RIN 3245–AH43 publish the information. the RFA normally requires agencies to FOR FURTHER INFORMATION CONTACT: A describe the impact of a rulemaking on Business Loan Program Temporary Call Center Representative at 833–572– small entities by providing a regulatory Changes; Paycheck Protection 0502, or the local SBA Field Office; the impact analysis. Such analysis must Program—Eligibility of Certain Electric list of offices can be found at https:// address the consideration of regulatory Cooperatives www.sba.gov/tools/local-assistance/ options that would lessen the economic AGENCY: U.S. Small Business districtoffices. effect of the rule on small entities. The Administration. SUPPLEMENTARY INFORMATION: RFA defines a ‘‘small entity’’ as (1) a ACTION: Interim final rule. proprietary firm meeting the size I. Background Information standards of the Small Business SUMMARY: On April 2, 2020, the U.S. On March 13, 2020, President Trump Administration (SBA); (2) a nonprofit Small Business Administration (SBA) declared the ongoing Coronavirus organization that is not dominant in its posted an interim final rule announcing Disease 2019 (COVID–19) pandemic of field; or (3) a small government the implementation of the Coronavirus sufficient severity and magnitude to jurisdiction with a population of less Aid, Relief, and Economic Security Act warrant an emergency declaration for all than 50,000. 5 U.S.C. 601(3)–(6). Except (CARES Act). The CARES Act States, territories, and the District of for such small government jurisdictions, temporarily adds a new program, titled Columbia. With the COVID–19 neither State nor local governments are the ‘‘Paycheck Protection Program,’’ to emergency, many small businesses ‘‘small entities.’’ Similarly, for purposes the SBA’s 7(a) Loan Program. The nationwide are experiencing economic of the RFA, individual persons are not CARES Act also provides for forgiveness hardship as a direct result of the small entities. The requirement to of up to the full principal amount of Federal, State, tribal, and local public conduct a regulatory impact analysis qualifying loans guaranteed under the health measures that are being taken to does not apply if the head of the agency Paycheck Protection Program (PPP). The minimize the public’s exposure to the ‘‘certifies that the rule will not, if PPP is intended to provide economic virus. These measures, some of which VerDate Sep<11>2014 17:20 May 18, 2020 Jkt 250001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM 19MYR1
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