Debt Refinancing in the 504 Loan Program (rule, 86 FR 40775, July 29, 2021)
Summary
An interim final rule with request for comments from the U.S. Small Business Administration (SBA), published in the Federal Register on July 29, 2021 (Vol. 86, No. 143), on debt refinancing in the 504 Loan Program. It implements section 328 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, which revises the requirements for refinancing debt in the program. For refinancing involving expansions, it increases the amount of existing indebtedness that may be refinanced. For refinancing not involving expansions, it removes two limitations, reinstates an alternate job retention goal and revises the definition of qualified debt. The rule is effective July 29, 2021.
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Cite this document
“Debt Refinancing in the 504 Loan Program (rule, 86 FR 40775, July 29, 2021).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/debt-refinancing-in-the-504-loan-program-rule-86-fr-40775-july-29-2021-5be0b4cc43/
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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40775
other than that specified in this section, pool pump motor model (inclusive of and explain why you believe SBA
DOE must publish a document in the the drive, if the dedicated-purpose pool should hold this information as
Federal Register and the material must pump motor model is placed into confidential. SBA will review the
be available to the public. Standards can commerce with a drive, or is unable to information and make the final
be obtained from the sources in this operate without the presence of a drive) determination whether it will publish
section. All approved material is is determined in accordance with CSA the information.
available for inspection at the U.S. C747–09, Section 1.6 ‘‘Scope’’, Section FOR FURTHER INFORMATION CONTACT:
Department of Energy, Office of Energy 3 ‘‘Definitions’’, Section 4 ‘‘General Linda Reilly, Chief, 504 Program
Efficiency and Renewable Energy, requirements’’, Section 5, ‘‘General test Branch, Office of Financial Assistance,
Building Technologies Program, sixth requirements’’, and Section 6 ‘‘Test Small Business Administration, 409 3rd
Floor, 950 L’Enfant Plaza SW, method’’ (incorporated by reference, see Street SW, Washington, DC 20416;
Washington, DC 20024, (202) 586–2945, § 431.482). telephone: (202) 604–5032; email:
https://www.energy.gov/eere/buildings/ [FR Doc. 2021–15759 Filed 7–28–21; 8:45 am] linda.reilly@sba.gov.
appliance-and-equipment-standards- BILLING CODE 6450–01–P SUPPLEMENTARY INFORMATION:
program, and may be obtained from the
other sources in this section. It is also I. Background Information
available for inspection at the National SMALL BUSINESS ADMINISTRATION The 504 Loan Program is an SBA
Archives and Records Administration financing program authorized under
(NARA). For information on the 13 CFR Part 120 title V of the Small Business Investment
availability of this material at NARA, Act of 1958, 15 U.S.C. 695 et seq. The
email: fedreg.legal@nara.gov, or go to: RIN 3245–AH78
core mission of the 504 Loan Program is
www.archives.gov/federal-register/cfr/ Debt Refinancing in the 504 Loan to provide long-term financing to small
ibr-locations.html. Program businesses for the purchase or
(b) CSA. Canadian Standards improvement of land, buildings, and
Association, Sales Department, 5060 AGENCY: U.S. Small Business major equipment, in an effort to
Spectrum Way, Suite 100, Mississauga, Administration (SBA). facilitate the creation or retention of jobs
Ontario, L4W 5N6, Canada, 1–800–463– ACTION: Interim final rule with request and local economic development. Under
6727, or https://www.csagroup.org/ for comments. the 504 Loan Program, loans are made
store. to small business applicants by Certified
(1) CSA C747–09 (Reaffirmed 2014) SUMMARY: This interim final rule
Development Companies (‘‘CDCs’’),
(‘‘CSA C747–09’’), ‘‘Energy efficiency implements section 328 of the Economic which are certified and regulated by
test method for small motors’’ as revised Aid to Hard-Hit Small Businesses, SBA to promote economic development
through August 2016, including Update Nonprofits, and Venues Act, which within their community. In general, a
No. 1; IBR approved for § 431.484. revises the requirements for refinancing project in the 504 Loan Program (a ‘‘504
(2) [Reserved] debt in the 504 Loan Program, Project’’) includes: A loan obtained from
(c) UL. Underwriters Laboratories, 333 including: For 504 debt refinancing a private sector lender with a senior lien
Pfingsten Road, Northbrook, IL 60062, involving expansions, increasing the covering at least 50 percent of the
(841) 272–8800, or go to https:// amount of existing indebtedness that project cost; a loan obtained from a CDC
www.ul.com. may be refinanced; and for 504 debt (a ‘‘504 Loan’’) with a junior lien
(1) UL 1004–10 (1004–10:2020), refinancing not involving expansions, covering up to 40 percent of the total
‘‘Standard for Safety for Pool Pump removing two limitations on the cost (backed by a 100 percent SBA-
Motors,’’ First Edition, Dated February program, reinstating an alternate job guaranteed debenture); and a
28, 2020; IBR approved for §§ 431.481 retention goal for the refinancing contribution from the Borrower of at
and 431.483. project, revising the definition of least 10 percent equity.
(2) [Reserved] qualified debt, and removing the In addition, the 504 Loan Program
prohibition against Certified may be used to refinance debt under
§ 431.483 Definitions.
Development Companies (‘‘CDCs’’) two options authorized under section
The definitions applicable to this participating in the Premier Certified
subpart are defined in Section 2 502(7)(B) and (C) of the Small Business
Lenders Program using their delegated Investment Act of 1958. First, if a 504
‘‘Glossary’’ of UL 1004–10:2020 authority to make these loans.
(incorporated by reference, see Project involves the expansion of the
DATES: Effective Date: This rule is small business, any amount of existing
§ 431.482).
effective July 29, 2021. indebtedness that does not exceed 50
§ 431.484 Test procedure. Comment Date: Comments must be percent of the project cost of the
(a) Scope. Pursuant to section 343(a) received on or before September 27, expansion may be refinanced and added
of EPCA, this section provides the test 2021. to the project’s cost (Debt Refinancing
procedures for measuring the efficiency ADDRESSES: You may submit comments, with Expansion) under the conditions
of dedicated-purpose pool pump identified by RIN 3245–AH78, through set forth in section 502(7)(B) and the
motors. (42 U.S.C. 6314) For purposes of the Federal eRulemaking Portal: http:// implementing regulations. See 13 CFR
this part and EPCA, the test procedures www.regulations.gov. Follow the 120.882(e) and (f). Second, debt
for measuring the efficiency of instructions for submitting comments. refinancing is available for a 504 Project
dedicated-purpose pool pump motors SBA will post all comments on http:// that does not involve the expansion of
shall be the test procedure specified in www.regulations.gov. If you wish to the small business under the
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paragraph (b) of this section. submit confidential business requirements set forth in section
(b) Testing and calculations. At such information (CBI) as defined in the User 502(7)(C) and 13 CFR 120.882(g) (Debt
time as compliance is required with a Notice at http://www.regulations.gov, Refinancing without Expansion).
labeling requirement or an energy please submit the information via email Section 328(a) of the Economic Aid to
conservation standard, the full-load to 504refi@sba.gov. Highlight the Hard-Hit Small Businesses, Nonprofits,
efficiency of each dedicated-purpose information that you consider to be CBI and Venues Act (Economic Aid Act),
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40776 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations
enacted December 27, 2020, Public Law Administrative Procedure Act (APA), 5 guarantee by a Federal agency or
116–260, revises the conditions and U.S.C. 553(b)(3)(B), because section 303 department. Although these loans may
requirements for refinancing debt in the of the Economic Aid Act authorizes now be refinanced in the Debt
504 Loan Program as follows: SBA to issue regulations to implement Refinancing without Expansion
(1) With respect to Debt Refinancing the amendments described above program, the rule will provide that they
with Expansion, 13 CFR 120.882(e), the without regard to notice requirements. must comply with SBA’s policies
Economic Aid Act increases the amount In addition, pursuant to section related to the refinancing of existing 504
of existing indebtedness that may be 553(d)(1), this rule is exempt from the and 7(a) loans, including that:
refinanced as part of a 504 Project from APA’s 30-day delayed effective date (1) For an existing 504 loan, either
not more than 50 percent of the project requirement on the basis that it is a both the Third Party Loan and the 504
cost of the expansion to not more than substantive rule that relieves restrictions loan must be refinanced, or the Third
100 percent of the project cost; relating to the debt refinancing options Party Loan must have been paid in full;
(2) With respect to Debt Refinancing available to small businesses. SBA has and
without Expansion, 13 CFR 120.882(g), also determined that, pursuant to (2) for an existing 7(a) loan, the CDC
the Economic Aid Act: section 553(d)(3), there is good cause for must verify in writing that the present
(a) Eliminates the condition that this dispensing with the 30-day delayed lender is either unwilling or unable to
program shall only be in effect in any effective date on the grounds that it modify the current payment schedule.
fiscal year during which the cost to the would be contrary to the public interest. In addition, in the case of same
Federal Government of making To meet the immediate debt refinancing institution debt, if the Third Party
guarantees under 13 CFR 120.882(g) and needs of small businesses impacted by Lender or the CDC affiliate as
under the 504 Loan Program is zero; the COVID–19 pandemic, it is essential authorized under 13 CFR 120.820 is the
(b) Eliminates the requirement that a to be able to implement the statutory 7(a) lender, the loan will be eligible for
CDC limit its financing under the 504 changes to the refinancing programs as 504 refinancing only if the lender is
Loan Program so that, during any expeditiously as possible. unable to modify the terms of the
Federal fiscal year, new financings Although this rule is being published existing loan because a secondary
under 13 CFR 120.882(g) do not exceed as an interim final rule, comments are market investor will not agree to
50% of the dollars the CDC loaned solicited from interested members of the modified terms.
under the 504 Loan Program, including public. These comments must be In addition, the rule will require that
under 13 CFR 120.882(g), during the submitted on or before the deadline for the refinancing of any Federally-
previous fiscal year, unless otherwise comments stated in this rule. SBA will guaranteed loan will provide a
waived; consider any comments it receives and substantial benefit to the borrower.
(c) Eliminates the prohibition against the need for making any amendments as ‘‘Substantial benefit’’ will mean that the
Premier Certified Lender Program a result of the comments. portion of the new installment amount
(PCLP) CDCs using delegated authority attributable to the debt being refinanced
III. Section-by-Section Analysis must be at least 10 percent less than the
to approve loan applications for Debt
Refinancing without Expansion; Section 120.882(e). This provision existing installment amount(s).
(d) Reinstates an alternate job currently states that the amount of Prepayment penalties, financing fees,
retention standard that was previously existing indebtedness that may be and other financing costs must be added
removed from the Debt Refinancing refinanced is limited to no more than 50 to the amount being refinanced in
without Expansion Program by section percent of the project cost of the calculating the percentage reduction in
521 of division E of the Consolidated expansion. Section 328(a)(2)(A) of the the new installment payment. The
Appropriations Act, 2016, Public Law Economic Aid Act amends section portion of the new installment amount
114–113, enacted on December 18, 502(7)(B) of the Small Business attributable to Eligible Business
2015; Investment Act to increase the Expenses will not need to be included
(e) Revises the definition of ‘‘qualified percentage and, accordingly, SBA is in this calculation. The rule will also
debt’’ to mean debt that was incurred revising this provision to increase the allow the Director, Office of Financial
not less than 6 months before the date amount of existing indebtedness that Assistance (D/FA) or designee to
of application instead of 2 years before may be refinanced to no more than 100 approve an exception to the 10 percent
the date of application; percent of the project cost. reduction requirement for good cause,
(f) Removes from the definition of Section 120.882(g)(3). This section and will not allow PCLP CDCs to use
‘‘qualified debt’’ the condition that the currently provides that the approval of their delegated authority to approve a
debt not be subject to a guarantee by a a Refinancing Project is subject to the loan requiring this exception.
Federal agency; and requirement that the cost to the Federal Section 120.882(g)(11). This section
(g) Eliminates from the definition of Government of making guarantees under currently states that PCLP CDCs may not
‘‘qualified debt’’ the requirement that 13 CFR 120.882(g) and under the 504 use delegated authority to approve
the borrower be current on all payments Loan Program is zero during the fiscal refinancing under 13 CFR 120.882(g).
for not less than 1 year before the date year in which the guarantee is made. Section 328(a) of the Economic Aid Act
of the application for refinancing. Section 328(a)(1) of the Economic Aid removes this statutory prohibition and,
As described in the section-by-section Act repeals this statutory requirement accordingly, SBA is removing the
analysis below, SBA is issuing this and, therefore, SBA is removing this current language. In its place, the rule
interim final rule to conform the current requirement. will state that PCLP CDCs may not
rules to the requirements of the In its place, this provision will set approve the refinancing of same
Economic Aid Act. forth the conditions and requirements institution debt under their delegated
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that will apply to the refinancing of a authority and must submit the loan to
II. Comments and Immediate Effective loan that is subject to a guarantee by a SBA for approval. This requirement is
Date Federal agency or department. As consistent with SBA’s long-standing
This interim final rule is effective indicated above, the Economic Aid Act policy of prohibiting its participating
without the advance notice and public removes the prohibition against lenders from using their delegated
comment required by section 553 of the refinancing a loan that is subject to a authority to approve the financing of
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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40777
same institution debt due to the of the most recent loan was to extend Loan, see § 120.882(g)(13), and, thus, the
potential conflict of interest and the risk the maturity date without advancing current definition of ‘‘same institution
of the 504 loan proceeds being used to any additional proceeds. With the debt’’ references only the Third Party
shift to SBA a potential loss from the minimum age of the qualified debt Lender. With the requirement in
existing debt. shortened from 2 years to 6 months, § 120.882(g)(11) that PCLP CDCs cannot
Section 120.882(g)(15). SBA is SBA believes that it is no longer use their delegated authority to approve
redesignating the current paragraph necessary to address this situation and the refinancing of same institution debt
(g)(15), Definitions, as paragraph (g)(16), is, therefore, removing the second and in the Debt Refinancing without
and adding a new paragraph (g)(15) to third sentences of paragraph (i). Expansion program, SBA is revising the
set forth the alternate job retention Third, paragraph (ii) currently definition of ‘‘Same institution debt’’ to
standard that is reinstated by section excludes debt that is subject to a also mean the debt of the CDC (or its
328(a) of the Economic Aid Act. Under guarantee by a Federal agency or affiliates) that is providing funds for the
this alternate job retention standard, the department. As stated above, section refinancing.
Agency may provide a 504 loan in the 328(a) of the Economic Aid Act no
amount that is not more than the longer includes this statutory exclusion Compliance With Executive Orders
product obtained by multiplying the and SBA is removing this paragraph and 12866, 12988, 13132, and 13563, the
number of employees of the borrower by renumbering the remaining paragraphs Congressional Review Act (5 U.S.C.
$75,000. The Economic Aid Act accordingly. The conditions and 801–808), Paperwork Reduction Act (44
provides that the number of employees requirements that will apply to the U.S.C., Ch. 35), and the Regulatory
of a borrower is equal to the sum of: refinancing of a loan that is subject to Flexibility Act (5 U.S.C. 601–612)
(1) The number of full-time a Federal guarantee will be set forth in
Executive Orders 12866 and 13563
employees of the borrower on the date paragraph (g)(3).
on which the borrower applies for a Fourth, under the current paragraph The Office of Management and Budget
loan under this subparagraph; and (vi), the definition of qualified debt (OMB) has determined that this rule
(2) the product obtained by excludes a Third Party Loan that is part constitutes a ‘‘significant regulatory
multiplying: of an existing 504 Project. However, action’’ for purposes of Executive
(a) The number of part-time under the new paragraph (g)(3), an Orders 12866 and 13563. SBA, however,
employees of the borrower on the date existing 504 loan may be refinanced is proceeding under the emergency
on which the borrower applies for a when both the Third Party Loan and the provision at Executive Order 12866,
loan under this subparagraph, by 504 loan are being refinanced. section 6(a)(3)(D), based on the need to
(b) the quotient obtained by dividing Accordingly, SBA is revising this move expeditiously to mitigate the
the average number of hours each part- paragraph, which will be newly current conditions arising from the
time employee of the borrower works designated as paragraph (v), to COVID–19 pandemic.
each week by 40. incorporate this exception to the general
An example of how this standard is prohibition against a qualified debt As shown in the table below, during
calculated is included in the text of the including a Third Party Loan. the five-year period spanning FY 2016
rule. Fifth, the current paragraph (vii) and FY 2020, a total of 31,248 504 loans
Section 120.882(g)(16). As stated reflects the statutory requirement that, were approved for a total gross approval
above, SBA is redesignating the current for the debt to qualify for refinancing, amount as of May 31, 2021 of
paragraph (g)(15), Definitions, as the applicant must be current on all $25,720,047,200. In addition, during
paragraph (g)(16) and is making five payments due for not less than one year this five-year period, SBA approved 202
changes to the definition of ‘‘Qualified preceding the date of application. debt refinance with expansion loans on
debt’’. First, under the current language Section 502(7)(C) of the Small Business average per year with an average annual
of paragraph (i), the debt must not have Investment Act, as amended by section dollar volume of $237,880,000, and
been incurred less than 2 years before 328(a) of the Economic Aid Act, no approved 209 debt refinance without
the date of the application for longer includes this requirement and, expansion loans on average per year
refinancing. However, section 328(a) of accordingly, SBA is removing this with an average annual dollar volume of
the Economic Aid Act has shortened paragraph from the regulations. In $203,339,000. Of the debt refinance
this period to 6 months before the date accordance with prudent lending with expansion loans, only 16
of the application for refinancing. standards, SBA expects CDCs to refinanced a debt that equaled 50
Accordingly, SBA is revising this consider whether the applicant is percent of the expansion costs; if these
paragraph by replacing 2 years with 6 current on all payments due, and the borrowers had been able to refinance
months. applicant’s history of delinquency, in its 100 percent of the expansion costs
Second, paragraph (i) currently allows credit analysis. instead of 50 percent, and assuming that
a loan that was refinanced within the 2 Section 120.882(g)(16). The phrase all these borrowers did so, these
years before the date of application (the ‘‘Same institution debt’’ is currently borrowers would have been able to
most recent loan) to be deemed incurred used in connection with the Debt borrow $15 million more over five
not less than 2 years before the date of Refinancing without Expansion program years, or about $3 million more
the application provided that the effect only in reference to the Third Party annually.
TABLE 1—504 LOAN ACTIVITY FY 2016–FY 2020
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
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Total Number of 504 Loans ....................................... 5,938 6,218 5,874 6,099 7,119
Total Dollar Volume of 504 Loans Approved ............ $4,840,820,000 $5,111,480,700 $4,844,181,000 $5,042,010,500 $5,881,555,000
Number of 504 Debt Refi With Expansion ................ 193 219 181 181 236
Dollar Volume of 504 Debt Refi With Expansion ...... $230,987,000 $244,499,000 $215,311,000 $197,484,000 $301,159,000
Number of 504 Debt Refi Without Expansion ........... 45 266 181 166 386
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40778 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations
TABLE 1—504 LOAN ACTIVITY FY 2016–FY 2020—Continued
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Dollar Volume of 504 Debt Refi Without Expansion $41,598,000 $289,491,000 $154,745,000 $156,114,000 $374,749,000
Data as of 5/31/2021, total dollar Summary of Rule Revisions expansion to the SLPC instead of
volume is lifetime gross approval (a) The information collection approving the application under their
amount including increases. currently requires PCLP CDCs to process delegated authority; (2) SBA is
This rule is necessary to implement all applications for debt refinancing correcting the description of which
the Economic Aid Act and provide without expansion through the exhibits are to be retained and which
economic relief to small businesses Sacramento Loan Processing Center are to be submitted with the loan
adversely impacted by COVID–19. SBA (SLPC) and not through the PCLP CDC’s application; (3) SBA is adding a separate
anticipates that the changes to the 504 delegated authority. As discussed above, entry to facilitate disclosure of the use
debt refinancing programs will result in this requirement was removed by the of refinancing proceeds involving land
benefits to small businesses by Economic Aid Act and, accordingly, purchases only (the current format of
providing greater flexibility to SBA is removing it from the information ‘‘Land/Building’’ does not clearly
restructure debt. collection. This revision does not indicate how information is to be
change the information the PCLP CDC is reported); and (4) under the list of
Congressional Review Act economic development objectives met
required to collect, only how the
application is processed. In addition, by the project, SBA is adding references
OMB’s Office of Information and to ‘‘base closures’’ and ‘‘minority-owned
Regulatory Affairs has determined that consistent with the changes made by
this rulemaking, SBA is adding two business’’.
this rule is not a major rule under
Subtitle E of the Small Business questions to clarify that, for debt SBA has requested emergency
Regulatory Enforcement Fairness Act of refinancing without expansion, PCLP approval from OMB for the revised
1996 (also known as the Congressional CDCs must process applications through information collection to implement the
Review Act), 5 U.S.C. 804(2). the SLPC when the application involves Economic Aid Act as expeditiously as
the refinancing of same institution debt possible.
Executive Order 12988 or, in cases involving the refinancing of Regulatory Flexibility Act
This action meets applicable Federally-guaranteed debt, the CDC is
requesting an exception to the The Regulatory Flexibility Act (RFA)
standards set forth in sections 3(a) and generally requires administrative
3(b)(2) of Executive Order 12988, Civil requirement that the new installment
payment be at least 10% less than the agencies to consider the effect of their
Justice Reform, to minimize litigation, actions on small entities, including
eliminate ambiguity, and reduce existing installment amount.
(b) With respect to the question small non-profit businesses, and small
burden. The action does not have local governments. Pursuant to the RFA,
regarding whether the Applicant creates
preemptive effect or retroactive effect. when an agency issues a rule, the
or retains the required number of jobs
Executive Order 13132 per debenture amount, an option has agency must prepare an analysis that
been added for the Applicant to indicate describes whether the impact of the rule
This rule does not have Federalism whether the project is eligible under the will have a significant economic impact
implications as defined in Executive 504 debt refinance alternate job goal on a substantial number of these small
Order 13132. It will not have substantial established by the Economic Aid Act. entities. However, the RFA requires
direct effects on the States, on the (c) Of the exhibits that are required, such analysis only where notice and
relationship between the National Exhibit 20 currently requires that, if the comment rulemaking is required. As
Government and the States, or on the debt was previously refinanced within discussed above, SBA is publishing this
distribution of power and two years of the date of application, rule as an interim final rule without
responsibilities among the various non-PCLP CDCs must submit with the advance notice and public comment
levels of government, as specified in the application (and PCLP CDCs must retain because section 303 of the Economic
Executive order. As such it does not in the loan file) copies of the current Aid Act authorizes SBA to issue
warrant the preparation of a Federalism debt and lien instruments as well as regulations to implement the
Assessment. copies of the debt and lien instruments amendments in the Act without regard
Paperwork Reduction Act for the debt that was replaced by the to notice requirements. This rule is,
current debt. With the minimum age of therefore, exempt from the RFA
In order to implement the Act, SBA the qualified debt shortened from 2 requirements.
has determined that it is necessary to years to 6 months by the Economic Aid List of Subjects in 13 CFR Part 120
modify SBA Form 1244, Application for Act, SBA is revising the form to remove
Section 504 Loans, which is currently the requirement that these debt and lien Loan programs-business, Small
approved under OMB Control Number instruments be included as part of businesses, Reporting and
3245–0071, to conform the form to the Exhibit 20. recordkeeping requirements.
revised requirements for debt In addition to the changes resulting For the reasons stated in the
refinancing loans. The changes do not from this rule, SBA is making the preamble, SBA amends 13 CFR part 120
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add any new burdens for the following technical corrections and as follows:
respondents, rather, in some instances, clarifying changes to Form 1244: (1)
the revisions will result in reduced SBA is adding two questions, consistent PART 120—BUSINESS LOANS
burden as applicants and CDCs no with the current regulations, to clarify
longer have to submit certain when PCLP CDCs must submit ■ 1. The authority citation for 13 CFR
information. applications for refinancing with part 120 is revised to read as follows:
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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40779
Authority: 15 U.S.C. 634(b)(6), (b)(7), (iii) The refinancing will provide a (E) That is not a Third Party Loan that
(b)(14), (h), and note, 636(a), (h), and (m), substantial benefit to the borrower. For is part of an existing 504 Project, except
636m, 650, 687(f), 696(3), 697, 697a, and purposes of this paragraph (g)(3)(iii), as allowed under paragraph (g)(3) of this
697e; Public Law 111–5, 123 Stat. 115; Public ‘‘substantial benefit’’ means that the section.
Law 111–240, 124 Stat. 2504; Public Law
116–260, 134 Stat. 1182.
portion of the new installment amount * * * * *
attributable to the debt being refinanced Same institution debt means any debt
■ 2. Amend § 120.882 as follows: must be at least 10 percent less than the of the CDC or the Third Party Lender,
■ a. Remove the number ‘‘50’’ in existing installment amount(s). or an affiliate of either, that is providing
paragraph (e) introductory text and add Prepayment penalties, financing fees, funds for the refinancing.
the number ‘‘100’’ in its place. and other financing costs must be added
■ b. Revise paragraphs (g)(3) and (11); to the amount being refinanced in Isabella Casillas Guzman,
■ c. Redesignate paragraph (g)(15) as calculating the percentage reduction in Administrator.
paragraph (g)(16); the new installment payment, but the [FR Doc. 2021–15975 Filed 7–28–21; 8:45 am]
■ d. Add a new paragraph (g)(15); portion of the new installment amount BILLING CODE 8026–03–P
■ e. In the newly redesignated attributable to Eligible Business
paragraph (g)(16): Expenses (as described in paragraph
■ i. Remove the paragraph heading; (g)(6)(ii) of this section) is not included DEPARTMENT OF TRANSPORTATION
■ ii. In the definition for the term in this calculation. Exceptions to the 10
Qualified debt: percent reduction requirement may be Federal Aviation Administration
■ A. Redesignate paragraphs (i) through approved by the Director, Office of
(vii) as paragraphs (A) through (G); Financial Assistance (D/FA) or designee 14 CFR Part 39
■ B. Revise newly redesignated for good cause. PCLP CDCs may not use [Docket No. FAA–2021–0605; Project
paragraph (A); their delegated authority to approve a Identifier AD–2021–00805–R; Amendment
■ C. Remove newly redesignated loan requiring the exception in this 39–21664; AD 2021–15–52]
paragraphs (B) and (G) and further paragraph (g)(3)(iii).
redesignate paragraphs (C) through (F) RIN 2120–AA64
* * * * *
as paragraphs (B) through (E); (11) PCLP CDCs may not approve the Airworthiness Directives; Various
■ D. In newly redesignated paragraph refinancing of same institution debt Restricted Category Helicopters
(B), remove ‘‘(iii)’’, ‘‘13 CFR 120.131 and under their delegated authority and
13 CFR 120.870(b)’’, and ‘‘13 CFR must submit the application to SBA for AGENCY: Federal Aviation
120.131(b)’’ and add in their places approval. Administration (FAA), DOT.
‘‘(B)’’, ‘‘§§ 120.131 and 120.870(b)’’, and ACTION: Final rule; request for
* * * * *
‘‘§ 120.131(b)’’, respectively; (15) Notwithstanding § 120.860, a comments.
■ E. Add the word ‘‘and’’ at the end of
debt may be refinanced under this SUMMARY: The FAA is adopting a new
newly redesignated paragraph (D); and paragraph (g) if it does not meet the job
■ F. Revise newly redesignated airworthiness directive (AD) for various
creation or other economic development restricted category helicopters originally
paragraph (E); and objectives set forth in § 120.861 or
■ iii. Revise the definition for the term manufactured by Bell Textron Inc. This
§ 120.862. In such case, the 504 loan AD was prompted by a fatal accident in
Same institution debt. may not exceed the product obtained by
The revisions and addition read as which an outboard main rotor hub strap
multiplying the number of employees of pin (pin) sheared off during flight,
follows: the Borrower by $75,000. The number of resulting in the main rotor blade and the
§ 120.882 Eligible Project costs for 504 employees of the Borrower is equal to
main rotor head detaching from the
loans. the sum of:
helicopter. This AD requires removing
(i) The number of full-time employees
* * * * * certain pins from service and prohibits
of the Borrower on the date of the
(g) * * * installing those pins on any helicopter.
application; and
(3) A loan that is subject to a (ii) The product obtained by The FAA previously sent an emergency
guarantee by a Federal agency or multiplying: AD to all known U.S. owners and
department may be refinanced under (A) The number of part-time operators of these restricted category
the following conditions and employees of the Borrower on the date helicopters and is now issuing this AD
requirements: of the application; by to address the unsafe condition on these
(i) An existing 504 loan may be (B) The quotient obtained by dividing products.
refinanced if both the Third Party Loan the average number of hours each part- DATES: This AD is effective August 13,
and the 504 Loan are being refinanced time employee of the Borrower works 2021. Emergency 2021–15–52, issued on
or the Third Party Loan has been paid each week by 40. July 8, 2021, which contained the
in full. Example to paragraph (g)(15): 30 full- requirements of this amendment, was
(ii) An existing 7(a) loan may be time employees and 35 part-time effective with actual notice.
refinanced if the CDC verifies in writing employees working 20 hours per week The FAA must receive comments on
that the present lender is either is calculated as follows: 30 + (35 × (20/ this AD by September 13, 2021.
unwilling or unable to modify the 40)) = 47.5. The maximum amount of ADDRESSES: You may send comments,
current payment schedule. In the case of the 504 loan would be 47.5 multiplied using the procedures found in 14 CFR
same institution debt, if the Third Party by $75,000, or $3,562,500. 11.43 and 11.45, by any of the following
Lender or the CDC affiliate as (16) * * * methods:
Qualified debt * * *
jbell on DSKJLSW7X2PROD with RULES
authorized under § 120.820 is the 7(a) • Federal eRulemaking Portal: Go to
lender, the loan will be eligible for 504 (A) That was incurred not less than 6 https://www.regulations.gov. Follow the
refinancing only if the lender is unable months before the date of the instructions for submitting comments.
to modify the terms of the existing loan application for refinancing available • Fax: (202) 493–2251.
because a secondary market investor under this paragraph (g). • Mail: U.S. Department of
will not agree to modified terms. * * * * * Transportation, Docket Operations,
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