Borrower Appeals — SBA Loan Review Decisions (Federal Register, Vol. 86, No. 177, September 16, 2021)
Summary
This Federal Register final rule from the Small Business Administration, published September 16, 2021, adopts with changes portions of the interim final rule on appeals of SBA loan review decisions under the Paycheck Protection Program. It sets procedures for borrower appeals to the SBA Office of Hearings and Appeals (OHA) of certain final SBA loan review decisions, and is effective September 14, 2021. SBA states that it received 16 comments on the interim final rule. Days for filing an appeal will be counted only after the borrower has received the actual final SBA loan review decision document, which gives the borrower 30 calendar days to formulate its arguments.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Borrower Appeals — SBA Loan Review Decisions (Federal Register, Vol. 86, No. 177, September 16, 2021).”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-the-treasury-final-rule-on-borrower-appeals-of-final-sba-d7b2d1ba53/
, SHA-256 8bd426ba6cb51f321388d17c6817d85ed16dfc13e49b1e682bd6812e0db031ba.Full text
51589
Rules and Regulations Federal Register
Vol. 86, No. 177
Thursday, September 16, 2021
This section of the FEDERAL REGISTER States, territories, and the District of (85 FR 33010) (Loan Review interim
contains regulatory documents having general Columbia. With the COVID–19 final rule (IFR)). The rule stated that
applicability and legal effect, most of which emergency, many small businesses SBA would be issuing a separate interim
are keyed to and codified in the Code of nationwide have experienced and final rule addressing the process for
Federal Regulations, which is published under continue to experience economic appealing certain SBA loan review
50 titles pursuant to 44 U.S.C. 1510.
hardship as a direct result of the decisions under the PPP. On June 5,
The Code of Federal Regulations is sold by Federal, State, tribal, and local public 2020, the Paycheck Protection Program
the Superintendent of Documents. health measures that have been taken to Flexibility Act of 2020 (Pub. L. 116–142)
minimize the public’s exposure to the (Flexibility Act) was signed into law,
virus. These measures, some of which amending the CARES Act. On June 22,
SMALL BUSINESS ADMINISTRATION are government-mandated, have been 2020, SBA and Treasury posted an
implemented nationwide and include interim final rule that in part revised the
13 CFR Part 134 the closures of and restrictions on Loan Review IFR to incorporate the
[Docket Number SBA–2020–0042] restaurants, bars, gyms, and other relevant Flexibility Act amendments,
businesses. In addition, based on the address revisions to the Loan
RIN 3245–AH55
advice of public health officials, other Forgiveness Application (SBA Form
Borrower Appeals of Final SBA Loan measures, such as keeping a safe 3508), and include a new alternative
Review Decisions Under the Paycheck distance from others or even stay-at- Loan Forgiveness Application (SBA
Protection Program home orders, were being and continue Form 3508EZ) (85 FR 38304) (Second
to be implemented, resulting in a Loan Review IFR).
AGENCY: U.S. Small Business dramatic decrease in economic activity On July 4, 2020, Public Law 116–147
Administration (SBA). as the public avoids malls, retail stores, extended the authority for SBA to
ACTION: Final rule. and other businesses. guarantee PPP loans to August 8, 2020.
On March 27, 2020, the President On August 11, 2020, SBA and Treasury
SUMMARY: This final rule adopts with signed the Coronavirus Aid, Relief, and posted an interim final rule on Appeals
changes portions of the previously Economic Security Act (the CARES Act) of SBA Loan Review Decisions Under
issued interim final rule published in (Pub. L. 116–136) to provide emergency the Paycheck Protection Program (85 FR
the Federal Register on August 27, assistance and health care response for 52883) (OHA Appeal IFR), inviting the
2020, on Appeals of SBA Loan Review individuals, families, and businesses public to submit comments on or before
Decisions Under the Paycheck affected by the coronavirus pandemic. September 28, 2020.
Protection Program. This final rule The Small Business Administration On October 8, 2020, SBA and
provides procedures for appeals of (SBA) received funding and authority Treasury posted an interim final rule
certain final SBA loan review decisions through the CARES Act to modify which made additional revisions to the
under the Paycheck Protection Program, existing loan programs and establish a Loan Review IFR and Second Loan
which is a temporary SBA 7(a) loan new loan program to assist small Review IFR (85 FR 66214) (Third Loan
program, authorized by, inter alia, the businesses nationwide adversely Review IFR). The Third Loan Review
Coronavirus Aid, Relief, and Economic impacted by the COVID–19 emergency. IFR provided additional guidance
Security Act and the Economic Aid to Section 1102 of the CARES Act concerning the forgiveness and loan
Hard-Hit Small Businesses, Nonprofits temporarily permitted SBA to guarantee review processes for PPP loans of
and Venues Act. 100 percent of 7(a) loans under a new $50,000 or less and, for PPP loans of all
DATES: program titled the ‘‘Paycheck Protection sizes, lender responsibilities with
Effective date: This rule is effective Program’’ (PPP) under Section 7(a)(36) respect to review of borrower
September 14, 2021. of the Small Business Act. Section 1106 determinations of eligible costs for
Applicability date: This final rule of the CARES Act provides for forgiveness in excess of a borrower’s
applies to all appealable final SBA loan forgiveness of up to the full principal PPP loan amount.
review decisions under the Paycheck amount of qualifying loans guaranteed On December 27, 2020, the President
Protection Program. The rule applies to under the PPP. signed the Economic Aid to Hard-Hit
all appeals filed after the effective date On April 2, 2020, SBA posted its first Small Businesses, Nonprofits and
of the rule and to those appeals filed PPP interim final rule (85 FR 20811) Venues Act (Economic Aid Act) (Pub. L.
before the effective date for which a (the First Interim Final Rule). 116–260), which, among other things,
Notice and Order has not been issued. Subsequently, SBA issued a number of reauthorized lending under the PPP
FOR FURTHER INFORMATION CONTACT: An other interim final rules implementing through March 31, 2021, authorized
SBA Office of Hearings and Appeals the PPP. On April 24, 2020, the second draw PPP loans under Section
(OHA) Representative at 202–401–8200. President signed the Paycheck 7(a)(37) of the Small Business Act,
SUPPLEMENTARY INFORMATION: Protection Program and Health Care modified PPP provisions relating to
Enhancement Act (Pub. L. 116–139), forgiveness of PPP loans, and codified
I. Background Information which provided additional funding and Section 1106 of the CARES Act under
On March 13, 2020, President Trump authority for the PPP. Section 7A of the Small Business Act.
declared the ongoing Coronavirus On May 22, 2020, SBA and Treasury On January 19, 2021, SBA and Treasury
Disease 2019 (COVID–19) pandemic of posted an interim final rule on Loan posted an interim final rule to
sufficient severity and magnitude to Review Procedures and Related consolidate prior rules related to
warrant an emergency declaration for all Borrower and Lender Responsibilities forgiveness and reviews of PPP loans
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
51590 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations
and incorporate changes made by the Administrative Procedure Act’s advance clarity and fairness, SBA will no longer
Economic Aid Act (86 FR 8283) (Fourth notice-and-comment requirements. begin counting days to file an appeal
Loan Review IFR). SBA has found that there is good based on when an appellant receives
On March 11, 2021, the American cause to dispense with the 30-day notification from the lender that a final
Rescue Plan Act of 2021 (American delayed effective date provided in the SBA loan review decision has been
Rescue Plan Act) was enacted to, among Administrative Procedure Act. The issued without actually receiving the
other things, expand eligibility for first intent of the CARES Act is to afford SBA final loan review decision document
and second draw PPP loans and revise the flexibility to provide relief to detailing the reasons for the decision.
the exclusions from payroll costs for America’s small businesses Instead, the clock for counting days will
purposes of loan forgiveness. On March expeditiously. This intent, along with begin only after the borrower has
18, 2021, SBA and Treasury posted an the need to provide lenders and received the actual final SBA loan
interim final rule on PPP to incorporate borrowers with certainty regarding PPP review decision document. This will
the American Rescue Plan Act’s loan forgiveness (if any), provides good provide the borrower with 30 calendar
amendments to the PPP, as well as other cause for immediate implementation of days to formulate its arguments as to
changes (86 FR 15083). On March 30, changes to the OHA appeal feature of why the decision is clearly erroneous.
2021, the PPP Extension Act of 2021 this program. Specifically, it is critical See 13 CFR 134.1202(a).
(Pub. L. 117–6) was enacted, extending to meet lenders’ and borrowers’ need for Two of the comments raised issue
SBA’s PPP program authority through clarity concerning the OHA appeal with the inability of the borrower to file
June 30, 2021. On July 30, 2021, SBA process as rapidly as possible. arguments after the administrative
published an interim final rule on PPP Borrowers have been applying for loan record has been transmitted to OHA.
establishing a direct borrower forgiveness, lenders have been issuing Although OHA’s general rules of
forgiveness process for loans of loan forgiveness decisions to SBA, and procedure found at 13 CFR 134.206(e)
$150,000 or less, among other changes SBA has been reviewing PPP loans in allows for a party to request leave to
(86 FR 40921). connection with those forgiveness reply to a response, this final rule
applications and decisions. SBA explicitly directs a party to seek leave to
As described below, this final rule
currently has pending final SBA loan file a reply or supplemental pleading.
sets forth procedures for PPP borrowers
review decisions that are ready to be (13 CFR 134.1208(e).) Also, an appellant
and Lenders on the process for a PPP
issued and is continuing to conduct is given 30 calendar days after the
borrower to appeal certain final SBA
loan reviews and make final SBA loan issuance of the Notice and Order to file
loan review decisions under the PPP to
review decisions that will need to be any objections to the administrative
the SBA Office of Hearings and Appeals
issued. Borrowers and lenders are record, should the appellant find the
(OHA). The interim final rule
expecting these decisions to be issued in administrative record is incomplete. See
supplemented the interim final rule on accordance with the statutory and 13 CFR 134.1207(e).
Loan Review Procedures and Related regulatory timelines requiring SBA to One comment proposed that the time
Borrower and Lender Responsibilities remit the appropriate forgiveness to file an objection to the administrative
posted on SBA’s and Treasury’s amount to the lender (if any), within 90 record should be extended to 15
websites on May 22, 2020 (published on days of the lender issuing its decision to calendar days. The commenter reasoned
June 1, 2020, in the Federal Register), SBA, subject to any SBA review of the that a non-attorney may have difficulty
as revised by the interim final rules loan or the loan application. This final understanding the role of the
posted on SBA’s and Treasury’s rule will allow SBA to immediately administrative record, what documents
websites on June 22, 2020, October 8, issue such decisions and provide are included and excluded from the
2020, and January 19, 2021 (published certainty around the appeals process to record, and the applicable privileges.
on June 26, 2020, October 19, 2020, and these potential appellants without Because the appellant will have
February 5, 2021, respectively), and as further delay. Because this final rule participated in the process of providing
further amended. also provides increased accessibility to documents submitted by the lender to
II. Notice and Comment and Immediate borrowers in response to comments SBA during the loan forgiveness process
Effective Date previously received by the public, and the loan review process, the
allowing the borrowers that receive an appellant should be familiar with the
This rule revises subpart L, as added appealable final SBA loan review documents included in the
by the interim final rule posted on the decision to immediately appeal under administrative record, making 30
websites of the SBA and the U.S. the final rule is in the best interests of calendar days from the issuance of the
Department of the Treasury on August the borrowers. Notice and Order (where the
11, 2020 (published in the Federal administrative record is due 20 calendar
Register on August 27, 2020), to reflect III. Summary of Comments Received days after issuance of the Notice and
SBA’s responses to public comments on The comment period for the OHA Order) a sufficient time to assert an
the interim final rule. The revision to Appeal IFR was open from August 27, objection. The Notice and Order that
§ 134.102, Jurisdiction of OHA, is 2020, to September 28, 2020, and SBA will be issued under 13 CFR 134.1206
adopted without change. received 16 comments. This section will provide a description of the
This final rule adopts with changes includes a description of the comments documents included in the
portions of the previously-published and SBA’s response. administrative record and will note the
interim final rule on Appeals of SBA Two of the comments received appellant’s ability to object to the
Loan Review Decisions Under the proposed an extension of time to file an administrative record by the due date.
Paycheck Protection Program. This rule appeal to account for appellants who The appellant can also avail itself of 13
revises 13 CFR part 134, subpart L, as may be unfamiliar with the appeals CFR 134.1207, which provides more
added by the interim final rule, to process. In the interest of efficiency and detail on the administrative record and
reflect SBA’s responses to public to ensure a speedy resolution of appellant’s ability to object to the
comments on the interim final rule, as disputes concerning final SBA loan administrative record. Appellant will
detailed in Part III below. This final rule review decisions, the 30-calendar day also have the ability to request leave to
has accordingly satisfied the requirement will remain. To promote file a supplementary pleading after
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations 51591
review of the SBA’s appeal response, deprives appellants of due process. A commenter’s inaccurate understanding
should one be filed, and administrative number of commenters asserted that the of the administrative process, stating
record under 13 CFR 134.1208(e) and Administrator’s review of OHA’s that OHA is reviewing a lender’s
134.211 (Motions), which is decision is a circular review process decision and is not reviewing the
incorporated into subpart L. since the commenters believed that the decision of a public officer, i.e., an SBA
One comment proposed that the SBA Administrator would issue the final official. This is incorrect, as OHA’s
should disclose that the appellant may SBA loan review decision. The jurisdiction is limited to reviewing final
object to the administrative record at the Administrator will not be issuing the SBA loan review decisions as provided
time of the transmission of the final SBA loan review decision. The for in 13 CFR 134.1201(b). Further, the
administrative record. Such notice is decision will be made by the regulation establishing OHA’s
included in 13 CFR 134.1207 and will appropriate SBA official in accordance jurisdiction explicitly states that it will
be provided to the appellant in the with published delegations of authority. not accept an appeal based solely on a
Notice and Order under 13 CFR Additionally, various commenters lender’s decision. See 13 CFR
134.1206, which SBA deems sufficient asserted that OHA’s ability to render an 134.1201(c). One commenter suggested
notice of the ability to object to the independent decision on a final SBA a de novo review of the final SBA loan
administrative record. loan review decision is in question review decision due to the lack of
Two comments were received because OHA is a subordinate office to guidance on the loan review process.
regarding the need for simplicity of the the Administrator. Although SBA Another commenter voiced concern
appeals process as there is a large disagrees with the assertions in those with the use of the preponderance of the
number of appellants who will be filing comments, SBA has determined to evidence standard in conjunction with
their appeals without the assistance of remove the requirement for a borrower the requirement to establish clear error
an attorney. Overall, the commenters to request a review by the SBA on the part of SBA. The commenter
requested a more simplified process in Administrator before any further appeal found issue with the preponderance of
light of the information appellant is because of the limited resources within the evidence standard because such a
required to submit to OHA at the time the Office of the Administrator to render standard is usually required at the
of the appeal. One commenter suggested a decision on the anticipated high initial review level, and the commenter
that pro se litigants should disclose number of requests for review. In disagreed with the use of the clear error
their status so that OHA will assist the addition, SBA believes that it is standard in light of the lack of guidance
appellant throughout the appeals appropriate, consistent with due process on the loan review process. The
process and construe their filings requirements, and most efficient for commenters also stated the appellant
liberally, taking into consideration their borrowers to be able to seek relief in will be completely deprived of the
non-attorney status. The rules, policies, Federal district court, without requiring opportunity to review any evidence.
and procedures of OHA are tailored to review by the Administrator. Therefore, SBA has determined that it will
address and accommodate all borrowers have the option to either (1) remove the burden of proof requirement
appellants, regardless of whether they request reconsideration by the presiding of preponderance of the evidence.
are represented by an attorney. The OHA judge under 13 CFR 134.1211(c) However, a decision by an SBA official
information an appellant is required to and then appeal the final decision to is entitled to the deference afforded by
file with an appeal is minimal, but Federal district court under 13 CFR the clear error standard. Therefore, it is
necessary for the Judge to render a 134.1211(g); or (2) appeal a final appropriate and reasonable for OHA to
decision based on the relevant facts and decision directly to the appropriate assess the final SBA loan review
law. In furtherance of OHA’s Federal district court under 13 CFR decision using a clear error standard. An
commitment to ensure the appeals 134.1211(g). appellant will not be completely
process is accessible to all appellants, In lieu of the provision requiring the deprived of the opportunity to review
OHA has reduced the information borrower to request review by the the evidence. An appellant will be
required to file an appeal. See 13 CFR Administrator and in order to vest provided with a copy of the final SBA
134.1204. OHA will also provide reviewable discretion with the loan review decision that will set forth
appellants with an electronic case appropriate SBA official, SBA will add the reasons for the decision prior to
management system (https:// a provision giving the SBA filing an appeal, and an appellant
appeals.sba.gov) that will provide a Administrator the option to review or should be familiar with the documents
simple electronic way to file, process, reverse an initial OHA decision or a included in the administrative record
and track the appeal before OHA, reconsidered initial OHA decision, in because the appellant will have
including the automation of serving the Administrator’s sole discretion. participated in the process of providing
parties, and accessing appeal documents Although the Administrator has the documents submitted by the lender to
and the administrative record. discretion to review or reverse such SBA during the loan forgiveness process
Four comments were received decisions, borrowers may not request, and the loan review process. In
regarding the exhaustion of remedies and are not required to request, a review addition, an appellant has the
requirement under 13 CFR 134.1216 from the Administrator in order to opportunity to review and object to the
that required an appellant to request exhaust administrative remedies before administrative record as provided for in
review by the SBA Administrator before appealing to the appropriate Federal 13 CFR 134.1207(e).
appealing an OHA decision to Federal district court. See 13 CFR 134.1211(d). Three comments were received
district court. One comment suggested Three comments were received regarding the inability of appellants to
that OHA should provide language in regarding the standard of review and request discovery, while allowing SBA
the decision disclosing an appellant’s burden of proof for PPP appeals. One to request discovery. SBA has
ability to request review of OHA’s commenter stated that OHA should determined that an OHA decision
decision by the SBA Administrator. The remove the requirement that the should be based on a review of the
commenters also argued that this appellant establish a clear error of fact administrative record, the appeal
exhaustion of administrative remedies or law by SBA and only require petition, any response, any reply or
requirement was in violation of the appellant to establish error. The supplemental pleading, and filings
Administrative Procedures Act and suggestion, however, is based on the related to objection to the administrative
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
51592 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations
record. See 13 CFR 134.1209(c). Thus, funding-programs/loans/covid-19-relief- 1110(e)(6) requiring SBA to deduct the
neither discovery nor oral hearings will options/paycheck-protection-program EIDL advance; explicitly stating that a
be permitted for appellant or SBA. See and https://home.treasury.gov/policy- borrower cannot directly file an appeal
13 CFR 134.1209(b). issues/coronavirus/assistance-for-small- of a decision by a lender concerning a
One comment received suggested that businesses/paycheck-protection- PPP loan to OHA (13 CFR 134.1201(c));
OHA provide a description of the OHA program. SBA has issued sufficient informing an appellant that they must
procedural rules incorporated into guidance for the loan forgiveness first file an appeal of the final SBA loan
subpart L in addition to citing to those process and the issuance of final SBA review decision with OHA before
rules. SBA agrees that such a change is loan review decisions. SBA received a appealing to Federal district court (13
minimal and promotes clarity and few other comments which CFR 134.1201(d)); and incorporating
guidance. Thus, this final rule provides recommended changes to the loan provisions from OHA’s General Rules of
a description of each rule incorporated forgiveness application process. Such Practice into this section with
into subpart L at 13 CFR 134.1201(h). comments are not relevant to this final descriptions of those provisions (13 CFR
One comment received proposed a rule and need not be addressed here. 134.1201(h)).
change in the rule to account for Five comments received stated that This final rule makes a procedural
borrowers who may have been acquired the requirement to repay the loans change to require appellants to use the
by another entity between the time the should be held in abeyance pending OHA Case Portal to file and manage
initial PPP loan was issued and the appeal. SBA has determined that, in their appeals (13 CFR 134.1202(a)); this
filing of a PPP appeal. The rule now order to avoid the potential provision also establishes
includes language to address both administrative burden of having to ‘‘Commencement of Appeals of Final
borrowers and their legal successors reverse implementation of the final SBA SBA Loan Review Decisions’’ to outline
under 13 CFR 134.1203. loan review decision, including the the process of how and when an appeal
Six commenters argued that SBA refund of borrower payments by the must be filed (13 CFR 134.1202); and
should have regulations which Lender and the processing of removes the requirement that timeliness
formalize the procedures for final SBA forgiveness payments by SBA, a timely of the appeal could be based on a
loan review decisions. They assert that appeal by a PPP borrower of a final SBA notification by the lender of a final SBA
the existing interim final rules are too loan review decision should extend the loan review decision rather than actual
broad and lacking in specifics about the deferment period of the PPP loan. receipt of the final SBA loan review
process and have no criteria for making Payment of the PPP loan will be decision (13 CFR 134.1202(a)).
the decisions or compiling the deferred until there is a final decision SBA has also simplified the
administrative record. One commenter on an appeal under 13 CFR 134.1211. In information required to file an appeal by
also requested that more information be addition, SBA believes that allowing for eliminating a requirement to provide a
continued deferment is in the best basis for jurisdiction and relief sought;
provided on the loan forgiveness
interest of the borrower.7 This decision only requiring the borrower to produce
process. As to the administrative record,
has been added to the regulation at 13 a final SBA loan review decision (and
this final rule sets forth what should be
CFR 134.1202(d).8 not merely a description of a final SBA
included in the administrative record at
SBA also received some comments loan review decision) and the date it
13 CFR 134.1207. As to the criteria for
from borrowers that sought relief from was received to determine timeliness of
making final SBA loan review decisions
SBA for a PPP loan application that was the appeal; removing requirements that
and the loan forgiveness process, SBA
denied by a Lender. Such comments are the appellant provide tax documents;
has issued various rules and guidance
not relevant to this final rule and cannot and removing the requirement that a
on the process for SBA loan reviews
be addressed here. Further, the rule, at borrower include a certificate of service
including, but not limited to, the Loan 13 CFR 134.1201(c), provides that a with its appeal or any other subsequent
Review IFR; 1 Second Loan Review borrower cannot directly file an appeal documents filed with OHA. (13 CFR
IFR; 2 Third Loan Review IFR; 3 Fourth of a decision made by a lender 134.1204). This rule also requires
Loan Review IFR; 4 SBA Procedural concerning a PPP loan to OHA. borrowers to provide their lender with
Notice: Procedures for Lender a copy of their appeal in order for the
Submission of Paycheck Protection IV. Technical Amendments
lender to extend the deferment period of
Program Loan Forgiveness Decisions to This rule makes technical the PPP loan until a final decision is
SBA and SBA Forgiveness Loan amendments to ensure efficiency, issued under § 134.1211. (13 CFR
Reviews; 5 and SBA Procedural Notice: transparency, and consistency 134.1202(b)).
PPP Borrower Resubmissions of Loan throughout the appeals process. This This rule also specifies that lenders
Forgiveness Applications Using Form includes: Removal of the deduction of and individual owners of a borrower
3508S, Lender Notice Responsibilities to any Economic Injury Disaster Loan entity do not have standing to file an
PPP Borrowers, and Offset of (EIDL) advance (located in the OHA appeal. (13 CFR 134.1203). The new
Remittances to Lenders for Lender Appeal IFR at 13 CFR 134.1201(b)(3)) to provision, titled ‘‘Notice and Order,’’
Debts.6 Additional information is be consistent with Section 333 of the now provides an overview of the
available at https://www.sba.gov/ Economic Aid Act which repealed the information that will be included within
CARES Act provision at section the Notice and Order (13 CFR 134.1206).
1 85 FR 33010 (June 1, 2020).
2 85 FR 38304 (June 26, 2020).
This rule provides for the deadline to
3 85 FR 66214 (October 19, 2020).
7 Interest will continue to accrue on the PPP loan
produce the Administrative Record
during the deferment period. See, Interim Final within the ‘‘Administrative Record’’
4 86 FR 8283 (February 5, 2021).
Rule on Business Loan Program Temporary
5 See https://www.sba.gov/document/procedural- Changes; Paycheck Protection Program as Amended provision (13 CFR 134.1207(a)); clarifies
notice-5000-20038-procedures-lender-submission- by Economic Aid Act (86 FR 3692, 3703, January that SBA may, but is not required to,
paycheck-protection-program-loan-forgiveness- 14, 2021). respond to an appeal and, if SBA does
decisions-sba-sba. 8 See also, Interim Final Rule on Business Loan
not respond it will not be construed
6 See https://www.sba.gov/document/procedural- Program Temporary Changes; Paycheck Protection
notice-5000-20077-ppp-borrower-resubmissions- Program—COVID Revenue Reduction Score, Direct
against SBA (13 CFR 134.1208);
loan-forgiveness-applications-using-form-3508s- Borrower Forgiveness Process, and Appeals provides that a response to an appeal is
lender-notice. Deferment (86 FR 40921, 40925, July 30, 2021). due 45 calendar days from the date of
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations 51593
the Notice and Order instead of from the Review IFR, and Fourth Loan Review the final SBA loan review decision to
appeal filing date (13 CFR 134.1208(b)); IFR and as further amended. Subpart L OHA. Individual owners of a borrower
removes language making final further provides that any decision by a entity and lenders do not have standing
decisions precedential (13 CFR lender concerning a PPP loan, including to appeal a final SBA loan review
134.1211 (b) & (e)); discloses that final a borrower’s PPP loan application or a decision.
decisions rendered under this section borrower’s PPP loan forgiveness Section 134.1204, The appeal
may be published by OHA within its application, may not be appealed petition, provides that an appeal
discretion with any necessary directly to OHA. In addition, this petition must include the following
redactions (13 CFR 134.1211(f)); and section sets forth other types of information: (1) A copy of the final SBA
removes language pertaining to decisions and determinations that are loan review decision that is being
protective orders, as the only parties not covered by subpart L, and makes appealed and the date it was received;
involved in PPP appeals are the clear that subpart C, Rules of Practice (2) a full and specific statement as to
appellant and SBA, both of which will for Appeals From Size Determinations why the final SBA loan review decision
already have access to all documents and NAICS Code Designations, is not is alleged to be erroneous, together with
that will not be accessible to the public; applicable to appeals from final SBA all factual information and legal
and adds language in 13 CFR 134.1207 loan review decisions. This section sets arguments supporting the allegations;
to provide for a non-waiver provision. forth the specific provisions from and (3) the name, address, telephone
subpart B, OHA’s general Rules of number, email address and signature of
V. Borrower Appeals of Final SBA Loan the appellant or its attorney. This
Practice, that are applicable to subpart
Review Decisions Under the Paycheck section makes clear that a Notice of
L. Other provisions from subpart B that
Protection Program Paycheck Protection Program
are not specifically referenced in
This final rule adopts with changes subpart L do not apply to subpart L. As Forgiveness Payment does not provide a
portions of the previously-issued stated above, a timely appeal by a PPP borrower with a right to appeal to OHA.
interim final rule on Appeals of SBA borrower of a final SBA loan review This section further provides that an
Loan Review Decisions Under the decision will extend the deferment appeal petition that does not include the
Paycheck Protection Program. This final period of the PPP loan until a final above may be dismissed by the Judge
rule does not make any changes to 13 decision is issued pursuant to and permits SBA to move for a motion
CFR 134.102(w) regarding OHA’s § 134.1211. However, if SBA remits to for more definite statement or otherwise
jurisdiction over PPP appeals, and the the lender the PPP loan forgiveness comply with the requirements of this
current provision in the Code of Federal amount set forth in the decision issued section.
Regulations will remain the same. This by the lender to SBA, the borrower may Section 134.1205, Dismissal, provides
final rule revises the authority citation not file an OHA appeal, and the that the Judge must dismiss the appeal
for subpart L to incorporate 15 U.S.C. borrower must begin repayment of any if: (1) The appeal is beyond OHA’s
636(a)(37) and 15 U.S.C. 636m, which remaining balance of its PPP loan. This jurisdiction as set forth under
were included in the Economic Aid Act. section makes clear that a borrower § 134.1201; (2) the appeal is untimely
This final rule also revises subpart L as must file an appeal with OHA on a final under § 134.1202; (3) the appellant lacks
set forth in the prior interim final rule. SBA loan review decision before standing to appeal under § 134.1203; or
Section 134.1201, Scope of rules in appealing to the appropriate Federal (4) is premature because SBA has not
this subpart, provides a process for district court. yet made a final SBA loan review
appeal to OHA of certain final SBA loan Section 134.1202, Commencement of decision. This section also provides that
review decisions under the PPP and any appeals of final SBA loan review the Judge may dismiss the appeal if,
other PPP matter referred to OHA by the decisions, provides that an appellant among other things, the appeal does not,
Administrator. PPP loans include first must file its appeal with OHA within 30 on its face, allege specific facts that if
draw PPP loans made under Section calendar days of receipt of the final SBA proven to be true, warrant reversal or
7(a)(36) of the Small Business Act and loan review decision and references remand of the final SBA loan review
second draw PPP loans made under OHA’s website, where an appellant will decision.
Section 7(a)(37) of the Small Business be able to file and manage its appeal Section 134.1206, Notice and Order,
Act. Subpart L provides that an using the OHA Case Portal. By utilizing provides that upon receipt of an appeal
appealable final SBA loan review the OHA Case Portal, an appellant’s challenging a final SBA loan review
decision is an official written decision appeal will automatically be served decision, OHA will assign the matter to
by SBA, after SBA completes a review upon the Associate General Counsel for either an Administrative Law Judge or
of a PPP loan, that a borrower (1) was Litigation at OLITService@sba.gov. The an Administrative Judge in accordance
ineligible for a PPP loan; (2) was section also provides specific with § 134.218. Unless the appeal will
ineligible for the PPP loan amount information on how to calculate days. In be dismissed under § 134.1205, the
received or used the PPP loan proceeds addition, this section makes clear that a Judge will issue a Notice and Order
for unauthorized uses; (3) is ineligible timely appeal by a PPP borrower of a establishing a deadline for production of
for PPP loan forgiveness in the amount final SBA loan review decision extends the administrative record and specifying
determined by the lender in its full the deferment period of the PPP loan the deadline by which SBA may
approval or partial approval decision until a final decision is issued pursuant respond to the appeal.
issued to SBA; and/or (4) is ineligible to § 134.1211. This section also requires Section 134.1207, The administrative
for PPP loan forgiveness in any amount an appellant to provide the lender with record, provides that the administrative
when the lender has issued a full denial a copy of its appeal in order for the record is due 20 calendar days after
decision to SBA. lender to extend the deferment period of issuance of the Notice and Order. The
Subpart L applies to loan review the PPP loan until a final decision is administrative record shall include non-
decisions made by SBA after SBA issued pursuant to § 134.1211. privileged, relevant documents that SBA
completes a review of a PPP loan as set Section 134.1203, Standing, provides considered in making its decision or
forth in Part III.1 and Part III.2c. of the that only the borrower on a loan for that were before SBA at the time of the
Loan Review IFR, as amended by the which SBA has issued a final SBA loan decision. The administrative record
Second Loan Review IFR, Third Loan review decision has standing to appeal need not, however, contain all
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
51594 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations
documents pertaining to the appellant. for such findings and conclusions, and information, that information is not
SBA will file the administrative record any relief ordered. The decision will be available to the public pursuant to the
with OHA and serve it on appellant served upon appellant and SBA Freedom of Information Act (FOIA), 5
utilizing the OHA Case Portal. This utilizing the OHA Case Portal. The U.S.C. 552.
provision states that in the event that Judge’s decision on the appeal is an
Compliance With Executive Orders
privileged or confidential information is initial decision. However, unless a
12866, 12988, 13132, and 13563, the
disclosed in the administrative record, request for reconsideration is filed
Congressional Review Act, Paperwork
such disclosure shall not operate as a pursuant to paragraph (c) of § 134.1211
Reduction Act (44 U.S.C. Ch. 35), and
waiver of any claim of privilege or or the Administrator, solely within the
the Regulatory Flexibility Act (5 U.S.C.
confidentiality by SBA. This section Administrator’s discretion, decides to
601–612)
permits the appellant to object to the review or reverse the initial decision
absence of any document from the pursuant to paragraph (d) of § 134.1211, Executive Orders 12866 and 13563
administrative record that the appellant an initial decision shall become the OMB’s Office of Information and
believes should have been included in final decision of SBA 30 calendar days Regulatory Affairs (OIRA) has
the administrative record. Generally, after its service and is thereafter determined that this final rule is
such objections must be filed with OHA appealable to the appropriate Federal economically significant for the
and served on SBA no later than 30 district court. This section allows for a purposes of Executive Orders 12866 and
calendar days after issuance of the request for reconsideration pursuant to 13563 SBA, however, is proceeding
Notice and Order utilizing the OHA paragraph (c) of § 134.1211 by SBA or under the emergency provision at
Case Portal. The Judge will rule upon appellant. This section also provides the Executive Order 12866 Section
such objections and may direct or Administrator, solely within the 6(a)(3)(D) based on the need to move
permit that the administrative record be Administrator’s discretion, with the expeditiously to mitigate the current
supplemented. right to review or reverse an initial OHA economic conditions arising from the
Section 134.1208, Response to an decision or a reconsidered initial OHA COVID–19 emergency.
appeal petition, prescribes that only decision pursuant to paragraph (d) of
SBA, though not required, may respond § 134.1211. Such discretionary authority Executive Order 12988
to an appeal. In addition, OHA can of the Administrator does not create SBA has drafted this rule, to the
request SBA to respond for good cause additional rights of appeal on the part extent practicable, in accordance with
shown by OHA. The response should of an appellant not otherwise specified the standards set forth in section 3(a)
set forth the relevant facts and legal in SBA regulations. This section also and 3(b)(2) of Executive Order 12988, to
arguments to the issues presented on provides that decisions rendered by minimize litigation, eliminate
appeal. If SBA elects not to respond to OHA under subpart L are not ambiguity, and reduce burden. The rule
the appeal, such election shall not be precedential. This section provides that has no preemptive or retroactive effect.
interpreted to be an admission or waiver final decisions rendered under this
of any allegation of law or fact. Except section may be published by OHA Executive Order 13132
for good cause shown, a response filed within its discretion with any necessary SBA has determined that this rule
after the close of record established by redactions of confidential business and will not have substantial direct effects
the Judge will not be considered. If SBA financial information or personally on the States, on the relationship
elects to respond, SBA must file its identifiable information. Lastly, this between the National Government and
response with OHA and serve a copy of section provides that final decisions the States, or on the distribution of
the response upon the appellant may be appealed to the appropriate power and responsibilities among the
utilizing the OHA Case Portal. No reply Federal district court only. various layers of government. Therefore,
to a response will be permitted unless Section 134.1212, Effects of the SBA has determined that this rule has
the Judge directs otherwise. decision, provides that OHA may affirm, no federalism implications warranting
Section 134.1209, Evidence beyond reverse, or remand a final SBA loan preparation of a federalism assessment.
the record, discovery and oral hearings, review decision. If remanded, OHA no
provides that, generally, the Judge may longer has jurisdiction over the matter Paperwork Reduction Act, 44 U.S.C.
not admit evidence beyond the written unless a new appeal is filed as a result Chapter 35
administrative record. Neither discovery of a new final SBA loan review SBA has determined that this final
nor oral hearings will be permitted in decision. rule does not impose additional
appeals from final SBA loan review Section 134.1213, Equal Access to reporting or recordkeeping requirements
decisions. All appeals under subpart L Justice Act (EAJA), provides that a under the Paperwork Reduction Act.
will be decided solely on a review of the prevailing appellant is not entitled to
Congressional Review Act
written administrative record, the recover attorney’s fees. Appeals to OHA
appeal petition, any response, any reply, from final SBA loan review decisions OIRA has also determined that this
and filings related to objection to the under the PPP are not proceedings that rule is a major rule under Subtitle E of
administrative record. are required to be conducted by an the Small Business Regulatory
Section 134.1210, Standard of review, Administrative Law Judge under Enforcement Fairness Act of 1996 (also
provides that the standard of review is § 134.603. known as the Congressional Review Act
whether the final SBA loan review Section 134.1214, Confidential or CRA), 5 U.S.C. 804(2). If a rule is
decision was based on clear error of fact information, provides that if a filing or deemed major, the CRA generally
or law. The appellant has the burden of other submission made pursuant to an provides that the rule may not take
proof. appeal in subpart L contains effect until at least 60 days following its
Section 134.1211, Decision on appeal, confidential business and financial publication unless the agency for good
provides that the Judge will issue his or information; personally identifiable cause finds that notice and public
her decision within 45 calendar days information; source selection sensitive procedure are impracticable,
after the close of record, as practicable. information; income tax returns; unnecessary, or contrary to the public
The decision will contain findings of documents and information covered interest. 5 U.S.C. 808. For the reasons
fact and conclusions of law, the reasons under § 120.1060; or any other exempt discussed in Section II above, SBA finds
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations 51595
that there is good cause to dispense with Subpart L—Borrower Appeals of Final 7(a) loans (see part 120 of this chapter)
the CRA effective date requirement. The SBA Loan Review Decisions other than PPP loans.
agency believes that delaying the (g) The Rules of Practice for Appeals
effective date of this final rule would be Sec. From Size Determinations and NAICS
134.1201 Scope of the rules in this subpart. Code Designations in subpart C of this
contrary to the public interest.
134.1202 Commencement of appeals of part do not apply to appeals of final
Regulatory Flexibility Act (RFA) final SBA loan review decisions.
134.1203 Standing.
SBA loan review decisions or to the
134.1204 The appeal petition. PPP.
The Regulatory Flexibility Act (RFA) (h) In addition to the provisions in
generally requires that when an agency 134.1205 Dismissal.
134.1206 Notice and Order. subpart B of this part specifically
issues a proposed rule, or a final rule referenced in this subpart, the following
134.1207 The administrative record.
pursuant to section 553(b) of the APA or 134.1208 Response to an appeal petition. regulations from subpart B of this part
another law, the agency must prepare a 134.1209 Evidence beyond the record, also apply to this subpart: §§ 134.207
regulatory flexibility analysis that meets discovery, and oral hearings. (Amendments and supplemental
the requirements of the RFA and 134.1210 Standard of review. pleadings); 134.208 (Representation in
publish such analysis in the Federal 134.1211 Decision on appeal. cases before OHA); 134.209
Register. 5 U.S.C. 603, 604. Rules that 134.1212 Effects of the decision. (Requirement of signature); 134.211
are exempt from notice and comment 134.1213 Equal Access to Justice Act.
134.1214 Confidential information.
(Motions); 134.212 (Summary
are also exempt from the RFA judgment); 134.217 (Settlement);
requirements, including conducting a § 134.1201 Scope of the rules in this 134.218 (Judges); 134.219 (Sanctions);
regulatory flexibility analysis, when subpart. and 134.220 (Prohibition on ex parte
among other things the agency for good (a) The rules of practice in this communications). Other provisions
cause finds that notice and public subpart apply to appeals to OHA from from subpart B of this part that are not
procedure are impracticable, certain final SBA loan review decisions specifically referenced in this subpart
unnecessary, or contrary to the public under the Paycheck Protection Program do not apply to this subpart.
interest. SBA Office of Advocacy guide: (PPP) as described in paragraph (b) of
How to Comply with the Regulatory § 134.1202 Commencement of appeals of
this section, and to any other PPP matter final SBA loan review decisions.
Flexibility Act, Ch. 1. p. 9. Since this referred to OHA by the Administrator of
rule finalizes an interim final rule that (a) An appeal petition must be filed
SBA. The PPP was established as a
was exempt from notice and comment with OHA within 30 calendar days after
temporary program under section 1102
and did not require an initial regulatory the appellant’s receipt of the final SBA
of the Coronavirus Aid, Relief, and loan review decision. To file and
flexibility analysis, SBA is likewise not Economic Security Act (CARES Act)
required to conduct a regulatory manage an appeal of a final SBA loan
(Pub. L. 116–136), as amended. PPP review decision with OHA, refer to the
flexibility analysis. loans include first draw PPP loans made OHA Case Portal at https://
List of Subjects in 13 CFR Part 134 under Section 7(a)(36) of the Small appeals.sba.gov. An appellant is
Business Act and second draw PPP required to use the OHA Case Portal to
Administrative practice and loans made under Section 7(a)(37) of the file and manage their appeal.
procedure, Claims, Equal access to Small Business Act. (b) Appellant must provide their
justice, Lawyers, Organization and (b) A final SBA loan review decision lender with a copy of the timely appeal
function (Government agencies). that is appealable under this subpart is petition upon filing in order for the
an official written decision by SBA, lender to extend the deferment period of
For the reasons stated in the after SBA completes a review of a PPP
preamble, the Small Business the PPP loan until a final decision is
loan, that finds a borrower: issued under § 134.1211.
Administration interim rule amending (1) Was ineligible for a PPP loan;
13 CFR part 134, which was published (c)(1) Do not count the day the time
(2) Was ineligible for the PPP loan period begins, but do count the last day
at 85 FR 52883 on August 27, 2020, is amount received or used the PPP loan
adopted as final with the following of the time period.
proceeds for unauthorized uses; (2) If the last day is Saturday, Sunday,
changes: (3) Is ineligible for PPP loan or a Federal holiday, the time period
forgiveness in the amount determined ends on the next business day.
PART 134—RULES OF PROCEDURE by the lender in its full approval or Example: On a Thursday, a borrower
GOVERNING CASES BEFORE THE partial approval decision issued to SBA; receives a final SBA loan review
OFFICE OF HEARINGS AND APPEALS and/or decision. The time period begins on
(4) Is ineligible for PPP loan Thursday, so the first day to count is
■ 1. The authority citation for part 134 forgiveness in any amount when the Friday. Because the 30th calendar day
is revised to read as follows: lender has issued a full denial decision after receipt of the decision is a
Authority: 5 U.S.C. 504; 15 U.S.C. 632, to SBA. Saturday, the appeal deadline extends
634(b)(6), 634(i), 637(a), 648(l), 656(i), 657t (c) A borrower cannot directly file an to the next business day, which is
and 687(c); 38 U.S.C. 8127(f); E.O. 12549, 51 appeal of a decision made by a lender Monday.
FR 6370, 3 CFR, 1986 Comp., p. 189. concerning a PPP loan with OHA. (3)(i) A Judge may modify any time
Subpart J issued under 38 U.S.C. (d) An appeal to OHA is an period or deadline, except:
8127(f)(8)(B). administrative remedy that must be (A) The time period governing
Subpart K issued under 38 U.S.C. exhausted before judicial review of a commencement of a case (i.e., when the
8127(f)(8)(A). final SBA loan review decision may be appeal petition may be filed); and
Subpart L issued under 15 U.S.C. sought in a Federal district court. (B) A time period established by
636(a)(36); 15 U.S.C. 636(a)(37); 15 U.S.C. (e) Any determination by SBA’s Office statute.
636m. of Inspector General concerning a PPP (ii) A party may move for an
loan is not appealable to OHA. extension of time pursuant to § 134.211.
■ 2. Subpart L is revised to read as (f) This subpart does not create any (d) A timely appeal by a PPP borrower
follows: right to appeal any SBA decision on any of a final SBA loan review decision
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
51596 Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations
extends the deferment period of the PPP definite appeal petition or otherwise of the Notice and Order, utilizing the
loan until a final decision is issued fails to comply with applicable OHA Case Portal. If additional time to
under § 134.1211. regulations in this subpart, the Judge file the administrative record was
may dismiss the petition with prejudice. requested and granted by a Judge,
§ 134.1203 Standing.
appellant will have 10 calendar days
Only the borrower on a loan, or its § 134.1205 Dismissal. from the date SBA is required to file the
legal successor in interest, for which (a) The Judge must dismiss the appeal administrative record under the judge’s
SBA has issued a final SBA loan review if: order granting an extension in which to
decision that makes a finding in (1) The appeal is beyond OHA’s file an objection to the administrative
§ 134.1201(b)(1) through (4) has jurisdiction as set forth under record.
standing to appeal the final SBA loan § 134.1201; (2) The appellant may object to the
review decision to OHA. Lenders and (2) The appeal is untimely under absence of any document from the
individual owners of a borrower entity § 134.1202; administrative record that the appellant
do not have standing to appeal a final (3) The appellant lacks standing to believes should have been included in
SBA loan review decision. appeal under § 134.1203; or the administrative record.
(4) The appeal is premature because (3) The Judge will rule upon such
§ 134.1204 The appeal petition.
SBA has not yet made a final SBA loan objections and may direct or permit that
(a) Content. The appeal petition must review decision.
include the following information: the administrative record be
(b) The Judge may dismiss the appeal supplemented.
(1) A copy of the final SBA loan
in accordance with § 134.1204(b) or
review decision that is being appealed § 134.1208 Response to an appeal petition.
(c)(3), or if the appeal does not, on its
and the date it was received by the
face, allege specific facts that if proven (a) Who may respond. SBA may
borrower. A Notice of Paycheck
to be true, warrant reversal or remand of respond to an appeal as determined in
Protection Program Forgiveness
the final SBA loan review decision. its discretion, but SBA is not required
Payment does not provide a borrower
to respond. If SBA elects not to respond,
with a right to appeal to OHA. § 134.1206 Notice and Order.
(2) A full and specific statement as to such election shall not be interpreted as
Upon receipt of an appeal challenging an admission or waiver of any allegation
why the final SBA loan review decision a final SBA loan review decision, OHA
is alleged to be erroneous, together with of law or fact. In addition, after review
will assign the matter to either an of the appeal petition, OHA may request
all factual information and legal Administrative Law Judge or an
arguments supporting the allegations. SBA to respond for good cause shown
Administrative Judge in accordance by OHA. Only SBA may respond. If
There is no required format for an with § 134.218. Unless the appeal is
appeal petition. However, the appeal filed, the response should set forth the
dismissed under § 134.1205, the Judge relevant facts and legal arguments to the
petition must meet the following
will issue a Notice and Order, utilizing issues presented on appeal.
requirements:
(i) The maximum length of an appeal the OHA Case Portal, establishing a (b) Time limit. If an SBA response is
petition (not including attachments) is deadline for production of the filed, it must be filed within 45 calendar
20 pages. A table of authorities is administrative record and specifying a days after issuance of the Notice and
required only for petitions citing more date by which SBA may respond to the Order.
than twenty cases, regulations, or appeal. (c) Close of record. The record will
statutes. close 45 calendar days from the
§ 134.1207 The administrative record.
(ii) Clearly label any exhibits and issuance of the Notice and Order, unless
(a) Time limits. The administrative the Judge decides otherwise. Generally,
attachments.
(3) The name, address, telephone record will be due 20 calendar days filings after the close of record will not
number, email address, and signature of after issuance of the Notice and Order be considered.
the appellant or its attorney. unless additional time is requested and (d) Service. If a response is filed, the
(b) Dismissal. An appeal petition that granted. SBA must file its response with OHA,
does not contain all of the information (b) Contents. The administrative and serve a copy of the response upon
required by paragraph (a) of this section record shall include non-privileged, the appellant or its attorney, as
may be dismissed, with or without relevant documents that SBA applicable by utilizing the OHA Case
prejudice, at the Judge’s own initiative, considered in making its final loan Portal.
or upon motion of SBA. review decision or that were before SBA (e) Reply to response. Generally, a
(c) Motion for more definite at the time of the final loan review reply to a response is not permitted
statement. (1) SBA may, no later than decision. The administrative record unless the Judge directs otherwise. See
five calendar days after receiving a need not, however, contain all § 134.206(e). However, upon motion
Notice and Order on an appeal petition, documents pertaining to the appellant. (see § 134.211), and under terms needed
move for an order to the appellant to (c) Non-waiver. In the event that to avoid prejudice to any non-moving
provide a more definite appeal petition privileged or confidential information is party, the Judge may permit the filing
or otherwise comply with this section. disclosed in the administrative record, and service of a supplemental pleading
A Judge may order a more definite such disclosure shall not operate as a after review of SBA’s response and/or
appeal petition on his or her own waiver of any claim of privilege or the administrative record. The proposed
initiative. confidentiality by SBA. supplemental pleading must be filed
(2) A motion for a more definite (d) Filing. SBA will file the and served with the motion utilizing the
appeal petition stays SBA’s time for administrative record with OHA and OHA Case Portal.
filing a response. The Judge will serve it on appellant utilizing the OHA
establish the time for filing and serving Case Portal. § 134.1209 Evidence beyond the record,
a response and will extend the close of (e) Objections. (1) Any objection to discovery, and oral hearings.
the record as appropriate. the administrative record must be filed (a) Generally, the Judge may not admit
(3) If the appellant does not comply with OHA and served on SBA no later evidence beyond the administrative
with the Judge’s order to provide a more than 30 calendar days after the issuance record.
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations 51597
(b) Neither discovery nor oral show an error of fact or law material to OHA from final SBA loan review
hearings will be permitted in appeals the decision. SBA does not have to have decisions under the PPP are not
from final SBA loan review decisions. filed a response to the borrower’s appeal proceedings that are required to be
(c) All appeals under this subpart will petition to request reconsideration of conducted by an Administrative Law
be decided solely on a review of the the initial decision of the Judge. Judge under § 134.603.
administrative record, the appeal (2) The Judge may also reconsider a
petition, any response, any reply or decision on his or her own initiative § 134.1214 Confidential information.
supplemental pleading, and filings within 20 calendar days after service of If a filing or other submission made
related to objection to the administrative the Judge’s decision. pursuant to an appeal in this subpart
record. (3) A reconsidered initial OHA contains confidential business and
decision becomes the final decision of financial information; personally
§ 134.1210 Standard of review. SBA 30 calendar days after its service identifiable information; source
The standard of review is whether the unless the SBA Administrator, solely selection sensitive information; income
final SBA loan review decision was within the Administrator’s discretion, tax returns; documents and information
based on clear error of fact or law. The decides to review or reverse the covered under § 120.1060 of this
appellant has the burden of proof. reconsidered initial OHA decision chapter; or any other exempt
under paragraph (d) of this section. The information, that information is not
§ 134.1211 Decision on appeal.
discretionary authority of the available to the public pursuant to the
(a) Time limits and contents. The Freedom of Information Act (FOIA), 5
Administrator does not create any
Judge will issue his or her decision U.S.C. 552.
additional rights of appeal on the part
within 45 calendar days after the close
of an appellant not otherwise specified Isabella Casillas Guzman,
of record, as practicable. The decision
in SBA regulations in this chapter.
will contain findings of fact and Administrator.
(d) Administrator review. Within 30
conclusions of law, the reasons for such [FR Doc. 2021–19985 Filed 9–14–21; 11:15 am]
calendar days after the service of an
findings and conclusions, and any relief BILLING CODE 8026–03–P
initial OHA decision or a reconsidered
ordered. The decision will be served
initial OHA decision of a Judge, the SBA
upon appellant and SBA utilizing the
Administrator, solely within the
OHA Case Portal. DEPARTMENT OF TRANSPORTATION
Administrator’s discretion, may elect to
(b) Initial decision. The Judge’s
review and/or reverse an initial OHA
decision on the appeal is an initial Federal Aviation Administration
decision or a reconsidered initial OHA
decision. However, unless a request for
decision. In the event that the
reconsideration is filed pursuant to 14 CFR Part 39
Administrator elects to review and/or
paragraph (c) of this section or the SBA
reverse an initial OHA decision and a [Docket No. FAA–2021–0701; Project
Administrator, solely within the
timely request for reconsideration of a Identifier MCAI–2021–00365–T; Amendment
Administrator’s discretion, decides to 39–21704; AD 2021–18–03]
Judge’s initial decision is also filed by
review or reverse the initial decision
an appellant pursuant to paragraph (c) RIN 2120–AA64
pursuant to paragraph (d) of this
of this section, the Administrator will
section, an initial decision shall become
consider such request for Airworthiness Directives; Yaborã
the final decision of SBA 30 calendar
reconsideration. The Administrator’s Indústria Aeronáutica S.A. (Type
days after its service. The discretionary
decision will become the final decision Certificate Previously Held by Embraer
authority of the Administrator does not
of the SBA upon issuance. S.A.) Airplanes
create any additional rights of appeal on
(e) Precedent. Neither initial nor final
the part of an appellant not otherwise AGENCY: Federal Aviation
decisions rendered by OHA under this
specified in SBA regulations in this Administration (FAA), DOT.
subpart are precedential.
chapter. Any decision pursuant to this (f) Publication. Final decisions are ACTION: Final rule; request for
subpart applies only to the PPP and normally published without redactions comments.
does not apply to SBA’s 7(a) Loan on OHA’s website. PPP decisions will
Program generally or to any SUMMARY: The FAA is superseding
likely contain confidential business and
interpretation or application of the Airworthiness Directive (AD) 2020–26–
financial information and/or personally
regulations in part 120 or 121 of this 02, which applied to certain Yaborã
identifiable information. Therefore,
chapter. Indústria Aeronáutica S.A. (type
OHA, within its full discretion, may
(c) Reconsideration. An initial certificate previously held by Embraer
publish final decisions issued under
decision of the Judge may be S.A.) Model ERJ 190–400 airplanes. AD
this section with any necessary
reconsidered. If a request for 2020–26–02 required amending the
redactions.
reconsideration is filed and the SBA existing airplane flight manual (AFM) to
(g) Appeal to Federal district court.
Administrator does not exercise incorporate a new limitation and revise
Final decisions may be appealed to the
discretion to review or reverse the certain normal procedures. This AD
appropriate Federal district court only.
initial decision under paragraph (d) of retains those requirements and also
this section, OHA will decide the § 134.1212 Effects of the decision. requires upgrading the electronic engine
request for reconsideration and OHA’s OHA may affirm, reverse, or remand control (EEC) software, as specified in
decision on the request for a final SBA loan review decision. If an Agência Nacional de Aviação Civil
reconsideration is a reconsidered initial remanded, OHA no longer has (ANAC) AD, which is incorporated by
OHA decision. jurisdiction over the matter unless a reference. This AD was prompted by a
(1) Either SBA or appellant may new appeal is filed as a result of a new report of an in-flight shutdown (IFSD)
request reconsideration by filing with final SBA loan review decision. due in part to failure in the low-pressure
the Judge and serving a petition for compressor (LPC) rotor 1 during
reconsideration within 10 calendar days § 134.1213 Equal Access to Justice Act. operation in high altitude at high thrust
after service of the Judge’s decision. The A prevailing appellant is not entitled settings, and by the development of
request for reconsideration must clearly to recover attorney’s fees. Appeals to updated EEC software, which would
VerDate Sep<11>2014 16:05 Sep 15, 2021 Jkt 253001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 E:\FR\FM\16SER1.SGM 16SER1
File and source
- File
- department-of-the-treasury-final-rule-on-borrower-appeals-of-final-sba-loan-review-decisions-home-tr-0668a8e8e4.pdf
- Size
- 284,400 bytes
- SHA-256
- 8bd426ba6cb51f321388d17c6817d85ed16dfc13e49b1e682bd6812e0db031ba
- Original
- home.treasury.gov