SBA Disaster Loan Program Changes Interim Final Rule (2021)
Summary
Federal Register pages 50214 and 50215 from Vol. 86, No. 171, Wednesday, September 8, 2021, containing the Small Business Administration interim final rule Disaster Loan Program Changes, 13 CFR Parts 121 and 123, Docket Number SBA-2021-0016, RIN 3245-AH80. The summary states that for COVID EIDL applications SBA is changing the definition of affiliation, the eligible uses of loan proceeds and application of the size standard to certain hard-hit entities, and is establishing a maximum loan limit for borrowers in a single corporate group. The rule is effective September 8, 2021, with comments due on or before October 8, 2021. The pages also end a Federal Reserve Board amendment to Regulation D stating an IORB rate of 0.15 percent.
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
“SBA Disaster Loan Program Changes Interim Final Rule (2021).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/disaster-loan-program-changes-cd6ef31451/
, SHA-256 c50119fcfd7d6fb172df9e4cb22641fd55996eec5ca53eb09c1d082efdcfa28e.Full text
50214 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations
date provisions of the APA are Authority: 12 U.S.C. 248(a), 248(c), 461, the regulation at 13 CFR 123.303 apply
unnecessary, impracticable, or contrary 601, 611, and 3105. to COVID EIDL loan proceeds available
to the public interest with respect to ■ 2. Section 204.10 is amended by: on or after September 8, 2021, without
these final amendments to Regulation D. ■ a. Revising paragraph (b)(1); regard to the date such proceeds were
The rate change for IORB that is ■ b. Removing paragraphs (b)(4) and (5) received from SBA. The other changes
reflected in the final amendment to and (d)(5); and in this interim final rule apply to
Regulation D was made with a view ■ c. Redesignating paragraph (d)(6) as applications submitted under the
towards accommodating commerce and paragraph (d)(5). COVID EIDL Program on or after
business and with regard to their The revision reads as follows: September 8, 2021, through December
bearing upon the general credit situation 31, 2021, or until funds available for
of the country. Notice and public § 204.10 Payment of interest on balances. this purpose are exhausted, whichever
comment would prevent the Board’s * * * * * is earlier. Additionally, with the
action from being effective as promptly (b) * * * exception of the regulation at 123.304,
as necessary in the public interest and (1) For balances maintained in an this interim final rule applies to original
would not otherwise serve any useful eligible institution’s master account, applications under the COVID EIDL
purpose. Notice, public comment, and a interest is the amount equal to the Program that are submitted before but
delayed effective date would create interest on reserve balances rate (‘‘IORB approved on or after September 8, 2021.
uncertainty about the finality and rate’’) on a day multiplied by the total Comment date: Comments must be
effectiveness of the Board’s action and balances maintained on that day. The received on or before October 8, 2021.
undermine the effectiveness of that IORB rate is 0.15 percent. ADDRESSES: You may submit comments,
action. Accordingly, the Board has * * * * * identified by number SBA–2021–0016
determined that good cause exists to through the Federal eRulemaking Portal:
By order of the Board of Governors of the
dispense with the notice, public Federal Reserve System. http://www.regulations.gov. Follow the
comment, and delayed effective date instructions for submitting comments.
Ann Misback,
procedures of the APA with respect to SBA will post all comments on
this final amendment to Regulation D. Secretary of the Board. www.regulations.gov. If you wish to
[FR Doc. 2021–19280 Filed 9–7–21; 8:45 am] submit confidential business
IV. Regulatory Flexibility Analysis BILLING CODE 6210–01–P information (CBI) as defined in the User
The Regulatory Flexibility Act Notice at www.regulations.gov, please
(‘‘RFA’’) does not apply to a rulemaking send an email to COVIDEIDLHelp@
where a general notice of proposed SMALL BUSINESS ADMINISTRATION sba.gov. All other comments must be
rulemaking is not required.8 As noted submitted through the Federal
previously, the Board has determined 13 CFR Parts 121 and 123 eRulemaking Portal described above.
that it is unnecessary and contrary to [Docket Number SBA–2021–0016] Highlight the information that you
the public interest to publish a general consider to be CBI and explain why you
notice of proposed rulemaking for this RIN 3245–AH80 believe SBA should hold this
final rule. Accordingly, the RFA’s information as confidential. SBA will
Disaster Loan Program Changes
requirements relating to an initial and review the information and make the
final regulatory flexibility analysis do AGENCY: U.S. Small Business final determination whether it will
not apply. Administration (SBA). publish the information.
V. Paperwork Reduction Act ACTION: Interim final rule. FOR FURTHER INFORMATION CONTACT: An
SBA Disaster Customer Service
In accordance with the Paperwork SUMMARY: This interim final rule Representative at (800) 659–2955
Reduction Act (‘‘PRA’’) of 1995,9 the implements changes to the Disaster (individuals who are deaf or hard of
Board reviewed the final rule under the Loan Program regulations. For hearing may call (800) 877–8339), or a
authority delegated to the Board by the applications for COVID–19 Economic local SBA Field Office; the list of SBA
Office of Management and Budget. The Injury Disaster (COVID EIDL) loans, in field offices can be found at https://
final rule contains no requirements this rule SBA is changing the definition www.sba.gov/tools/local-assistance/
subject to the PRA. of affiliation, the eligible uses of loan districtoffices.
List of Subjects in 12 CFR Part 204 proceeds, and application of the size SUPPLEMENTARY INFORMATION:
standard to certain hard-hit eligible
Banks, Banking, Reporting and entities, and is establishing a maximum I. Background Information
recordkeeping requirements. loan limit for borrowers in a single Section 7(b)(2) of the Small Business
Authority and Issuance corporate group. In addition, for all Act authorizes SBA to make EIDL loans
disaster assistance programs, in this to eligible small businesses and
For the reasons set forth in the rule, SBA is changing which SBA nonprofit organizations located in a
preamble, the Board amends 12 CFR official may make the decision on the disaster area. 15 U.S.C. 636(b)(2). On
part 204 as follows: appeal of an application that has been March 6, 2020, Congress deemed
declined for a second time. COVID–19 to be a disaster in Title II of
PART 204—RESERVE
REQUIREMENTS OF DEPOSITORY DATES: the Coronavirus Preparedness and
INSTITUTIONS (REGULATION D) Effective date: The provisions of this Response Supplemental Appropriations
interim final rule are effective Act of 2020, Public Law 116–123, 134
jbell on DSKJLSW7X2PROD with RULES
■ 1. The authority citation for part 204 September 8, 2021. Stat. 146, 147, allowing SBA to declare
continues to read as follows: Applicability dates: The change to the disasters and make EIDL loans available
regulation at 13 CFR 123.13 applies to to small businesses and nonprofit
8 5 U.S.C. 603, 604. applications submitted under all of organizations suffering substantial
9 44 U.S.C. 3506; see 5 CFR part 1320, appendix SBA’s Disaster Loan Programs on or economic injury as a result of the
A.1. after September 8, 2021. The changes to COVID–19 pandemic. The Coronavirus
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50215
Aid, Relief, and Economic Security Act measures, such as keeping a safe to provide assistance to the restaurant
(CARES Act) Public Law 116–136, distance from others or stay-at-home industry, but within 21 days, SBA
expanded eligibility and waived certain orders, were implemented, resulting in received 278,304 applications seeking
rules and requirements for COVID EIDL a dramatic decrease in economic assistance in amounts totaling more
loans. Section 1110 of the CARES Act activity as the public avoided malls, than $72 billion, nearly three times the
permitted SBA to waive rules related to retail stores, and other businesses. On amount appropriated. Funding was
personal guaranties on COVID EIDL March 16, 2021, the SBA announced quickly exhausted, leaving 177,300
loans of not more than $200,000 and the that it would extend deferment periods businesses without assistance. Further,
requirement that an applicant be unable for all disaster loans, including COVID with the end of the Paycheck Protection
to obtain credit elsewhere. Section 1110 EIDL loans, until 2022. COVID EIDL Program, businesses and nonprofit
also provided SBA with the authority to loans made in calendar year 2020 will organizations that are still struggling
approve an applicant based solely on have the first payment due date will turn to the COVID EIDL program for
the credit score of the applicant or use extended from 12 months to 24 months long-term recovery. Thus, the COVID
alternative appropriate methods to from the date of the note. COVID EIDL EIDL program is more critical now than
determine an applicant’s ability to loans made in calendar year 2021 will it was before, because of the lack of
repay. On April 24, 2020, the Paycheck have the first payment due date resources available through these other
Protection Program and Health Care extended from 12 months to 18 months programs and because of the continuing
Enhancement Act (PPP Enhancement from the date of the note. On March 24, economic instability. Issuing this rule
Act) Public Law 116–139, provided 2021, the SBA announced that it would without advance notice and comment
additional funding for SBA to make increase the maximum amount that can will give small businesses, nonprofit
EIDL loans and further expanded EIDL be borrowed under the COVID EIDL organizations, qualified agricultural
eligibility to include agricultural program from $150,000 (6 months of businesses, and independent contractors
enterprises with not more than 500 economic injury) to $500,000 (24 affected by this interim final rule the
employees, which are typically not months of economic injury). maximum amount of time to apply for
eligible for SBA disaster assistance. II. Comments and Immediate Effective COVID EIDL loans, and will give SBA
Prior to the enactment of the PPP Date the maximum amount of time to process
Enhancement Act, SBA had an existing applications before the program ends in
$1.1 billion in credit subsidy funding, This interim final rule is being issued less than five months—on December 31,
without advance notice and public 2021. In addition, 13 CFR 123.1 reserves
which it used to support between $7
comment. SBA has determined that
billion and $8 billion in EIDL loans to to SBA authority to revise disaster
there is good cause for dispensing with
businesses affected by the COVID–19 regulations without advance notice, by
advance public notice and comment on
pandemic. The PPP Enhancement Act publishing interim emergency
the ground that it would be
provided an additional $50 billion in regulations in the Federal Register.
‘‘impracticable’’ and ‘‘contrary to the Finally, given the short duration of
loan credit subsidy to SBA. See 15
public interest.’’ 5 U.S.C. 553(b)(3)(B). this program and the unmet need for
U.S.C. 636(b) and 13 CFR 123.300(c). On The intent of the statutory COVID
December 27, 2020, the Economic Aid immediate assistance in key economic
financial assistance programs, including
to Hard-Hit Small Businesses, sectors, SBA has determined that it is
the COVID EIDL program, is that SBA
Nonprofits, and Venues Act (Economic impractical and not in the public
provide relief to America’s small
Aid Act), Public Law 116–260, was interest to provide a delayed effective
businesses expeditiously. This intent,
enacted as part of the Consolidated along with the continuing decrease in date. 5 U.S.C. 553(d). Limiting the
Appropriations Act, 2021. Section 332 economic activity in key economic availability of this program to a few
of the Economic Aid Act extended the sectors as compared to 2019 and the weeks, given the needs, would result in
authority to make COVID EIDL loans reimposition of mask requirements and significant avoidable economic losses—
through December 31, 2021, and further other public-health measures precisely the result that Congress was
modified the terms under which SBA throughout the country because of the trying to avoid in passing and amending
approves COVID EIDL loans, and variants (including Delta) of COVID–19, the COVID EIDL program. Therefore,
Section 331 provided SBA authority to provides good cause for SBA to SBA is of the view that delaying
make targeted EIDL advances. On March dispense with advance notice and issuance to conduct notice and
11, 2021, the American Rescue Plan Act comment rulemaking, which would take comment procedures would effectively
(ARPA), Public Law 117–2, was months. Given that this rule is issuing void the effectiveness of these reforms
enacted, establishing the Restaurant in August, new changes could not go to the COVID EIDL program, with
Revitalization Fund (RRF) through into effect until November, leaving just significant harms resulting. Although
Section 5003 to provide assistance to a few weeks to implement the new this interim final rule is effective
restaurants, beverage alcohol producers, program and take applications before immediately, comments are solicited
and other entities, and providing funding expires. This shortened from interested members of the public
authority to provide supplemental program timeframe would be on all aspects of the interim final rule.
Targeted Advances. problematic because SBA believes, with SBA will consider these comments and
In light of the COVID–19 emergency, basis, there is a tremendous demand the need for making any revisions as a
many small businesses nationwide have and need for this program. Other SBA result of these comments.
experienced economic hardship as a COVID relief programs have recently III. Disaster Loan Program Changes
direct result of the Federal, State, and ended or have exhausted their funding
local public health measures that have (including the Paycheck Protection 1. Definition of Affiliation for COVID
EIDL Loans
jbell on DSKJLSW7X2PROD with RULES
been taken to minimize the public’s Program and the Restaurant
exposure to the virus. These measures, Revitalization Fund), yet businesses and Based on continuing confusion and
some of which were government- nonprofit organizations are still in need burdensome analyses required by
mandated, were implemented across the of support. As evidence of unmet need, applicants and SBA, to simplify the
country. In addition, based on the the Restaurant Revitalization Fund program requirements of COVID EIDL
advice of public health officials, other received $28.6 billion in appropriations such that applicants can more easily
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
50216 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations
complete the affiliation analysis and to SBA is changing the appeals process to ARPA for additional assistance but may
expand the number of entities that will allow the Director, DAPDC, or the not have received funding due to
be eligible for COVID EIDL loans, SBA Director’s designee(s), to make the program deadlines or the exhaustion of
will align the definition of affiliation for decision on appeals for all Disaster Loan funds. As stated previously, the
COVID EIDL with the definition of Program loans. In addition, SBA is Restaurant Revitalization Fund (RRF)
‘‘affiliated business’’ set forth in section revising the regulation to clarify that the was unable to provide help to all
5003 of the ARPA for the Restaurant Administrator, solely within the eligible applicants due to a lack of
Revitalization Fund (RRF). Like the RRF Administrator’s discretion, has the funding, and many small businesses in
program, COVID EIDL is a program authority to review the matter and make that industry continue to suffer
where an applicant applies directly to the final decision. economic hardships caused by the
SBA, without an intermediary lender to Therefore, SBA is revising the pandemic. Most businesses eligible for
explain program rules and ensure regulation at 13 CFR 123.13, paragraphs RRF are in NAICS sector 72,
compliance. In SBA’s regular Business (e) and (f), to state that, if SBA declines Accommodation and Food Services;
Loan Programs, the applicant relies on an application a second time, the however, beverage manufacturers in
the lender intermediary to correctly Director, DAPDC, or the Director’s NAICS Industry Group 3121, such as
interpret and apply the affiliation rules designee(s), will make the decision. breweries, wineries, and distilleries
at 13 CFR 121.301, which require an Further, SBA is revising the regulation were also eligible for RRF funding.
applicant to consider affiliation based to state that the Administrator, solely Based on publicly available industry
on ownership, stock options, within the Administrator’s discretion, research and input from industry trade
convertible securities, agreements to may choose to review the matter and groups, SBA believes these beverage
merge, management, identity of interest, make the final decision. Such manufacturers continue to require
and franchise and license agreements. discretionary authority of the additional help.
Congress mandated more simple Administrator does not create additional Under Section 1110 of the CARES
affiliation rules in ARPA for RRF. Given rights of appeal on the part of an Act, COVID EIDL loans are available to
the lack of intermediaries in the COVID applicant not otherwise specified in ‘‘small business concerns, private
EIDL program, SBA has determined that SBA regulations. The changes to this nonprofit organizations, and small
it is appropriate to use the same regulation apply to all SBA Disaster agricultural cooperatives,’’ as defined in
affiliation rules that Congress mandated Loan Programs. SBA’s size standards in 13 CFR 121.201,
for RRF. or businesses that have 500 or fewer
3. Eligible Entities for COVID EIDL
Therefore, SBA is revising 13 CFR employees. To provide assistance to a
Loans
121.301, ‘‘What size standards and greater number of businesses in the
affiliation principles are applicable to The Administrator has determined hard-hit industries described above,
financial assistance programs?’’, to add that, due to the extended duration and SBA is defining ‘‘small business
a new paragraph (g) to state that for scope of the COVID–19 pandemic, as concern’’ for purposes of the COVID
COVID EIDL loans, an affiliated well as due to mandatory Federal, state, EIDL program to extend eligibility to
business or affiliate is ‘‘a business in and local shut down and social businesses in those industries that have
which an eligible entity has an equity distancing orders, businesses in certain 500 or fewer employees per physical
interest or right to profit distributions of sectors of the North American Industry location. SBA is revising 13 CFR
not less than 50 percent, or in which an Classification System (NAICS) continue 123.300, ‘‘Is my business eligible to
eligible entity has the contractual to suffer from significant economic apply for an economic injury disaster
authority to control the direction of the hardship. Specifically, the NAICS loan?’’, by adding a new paragraph (e)
business, provided that such affiliation sectors and subsectors identified in to state that certain hard-hit businesses
shall be determined as of any Section 1112 of the CARES Act, as identified by specific NAICS
arrangements or agreements in existence amended by section 325 of the classifications will be able to qualify as
as of January 31, 2020.’’ The new Economic Aid Act, continue to need eligible small business concerns for
paragraph (g) also will include a cross substantial help. These include Sector COVID EIDL loans based on the number
reference to the exceptions to affiliation 61, Educational Services; Sector 71, of employees per physical location.
set forth in 13 CFR 121.103(b), which Arts, Entertainment and Recreation; Consistent with the standard in RRF,
continue to apply to COVID EIDL loans. Sector 72, Accommodation and Food businesses using the per-physical
In addition to simplifying the program Services; Subsector 213, Support location eligibility standard must,
requirements for COVID EIDL loans, this Activities for Mining; Subsector 315, together with affiliates, have no more
change will streamline the application Apparel Manufacturing; Subsector 448, than 20 locations.
process for SBA and facilitate the Clothing and Clothing Accessories This rule merely provides an added
review of such applications prior to the Stores; Subsector 451, Sporting Good, basis of eligibility for COVID EIDL
deadline of December 31, 2021. This Hobby, Book, and Music Stores; assistance. It does not make any entity
streamlining will expand the flow of Subsector 481, Air Transportation; that is eligible for COVID EIDL
funds to businesses and nonprofit Subsector 485, Transit and Ground assistance on another basis ineligible for
organizations that still need relief from Passenger Transportation; Subsector such assistance. For example, a business
the COVID–19 pandemic. 487, Scenic and Sightseeing that has more than 20 business
Transportation; Subsector 511, locations, but has fewer than 500
2. Second Decline of Loan Application Publishing Industries (except internet); employees in the aggregate of all of its
The regulation at 13 CFR 123.13, Subsector 512, Motion Picture and business locations is currently eligible
‘‘What happens if my loan application Sound Recording Industries; Subsector for COVID EIDL loans because it meets
jbell on DSKJLSW7X2PROD with RULES
is denied?’’, requires that applicants 515, Broadcasting (except internet); the 500-employee size standard.
appeal a second decline of a loan Subsector 532, Rental and Leasing Although this rule allows a business
application directly to the Director, Services; and Subsector 812, Personal concern to be eligible for COVID EIDL
Disaster Assistance Processing and and Laundry Services. assistance if it employs not more than
Disbursement Center (DAPDC). To Additionally, certain industries were 500 employees per physical location as
enable timely consideration of appeals, identified in Section 5003(a)(4) of the long as it (together with its affiliates) has
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50217
no more than 20 locations, that flow to service debt obligations. Despite Given the changes in the COVID EIDL
provision does not change the current several short-term emergency programs maximum loan amount, eligibility, and
eligibility of a business concern that in the CARES Act and other statutes, increased outreach to industries that
meets the general 500-employee size many small businesses have not been have been particularly hard hit by the
standard. For example, a business with able to return to normal operations, and pandemic (for example, restaurants,
25 locations and 15 employees per now struggle with deferred debt, past hotels, gyms, travel and tourism), SBA
location would not be ineligible, due payments, and insufficient cash expects an increase in the number of
because the total number of employees flow. With the expectation that the applications submitted and average loan
is 375. pandemic would not last for the size. The Administrator determined that
This rule also does not change the duration that it has, many businesses limiting the amount of COVID EIDL
applicable size standards. The size took on short-term debt, often with loans that a single corporate group may
standard itself remains at 500 unfavorable repayment terms, or receive will promote the availability of
employees (together with affiliates), as negotiated deferments in debt payments COVID EIDL loans to the largest
authorized by Section 1110(a)(2) of the in order to avoid default. In order to possible number of borrowers. The
CARES Act, or the size standard maximize relief from the debt burden Administrator has concluded that a
established in 13 CFR 121.201. Instead, businesses and nonprofit organizations limitation of $10,000,000 strikes an
the rule changes how the agency defines have accrued, SBA is expanding COVID appropriate balance between broad
the term ‘‘business concern’’ for EIDL eligible uses of proceeds to availability of COVID EIDL loans and
purposes of COVID EIDL assistance. The include payments on all forms of program resource constraints. SBA’s
Small Business Act provides SBA with business debt, including loans owned affiliation rules, which relate to an
broad authority to define a ‘‘small by a Federal agency (including SBA) or applicant’s eligibility for COVID EIDL
business concern.’’ 15 U.S.C. 632(a)(2). a Small Business Investment Company loans, continue to apply independent of
By regulation, SBA generally defines a (SBIC) licensed under the Small this limitation.
concern to be a business entity, Business Investment Act. COVID EIDL
although there are exceptions. 13 CFR loan proceeds may be used to make debt 6. Additional Information
121.105. SBA applies its size standards payments including monthly payments, SBA may provide further information
to determine whether a concern is a deferred interest, and pre-payment of through guidance that will be posted on
small business eligible for SBA business debt, except that pre-payments SBA’s website at www.sba.gov, if
assistance, and, because of the general will not be permitted on any debt needed. Questions may be directed to an
definition, the size standards generally owned by a Federal agency (including SBA Disaster Customer Service
apply at the entity level. In this interim SBA) or an SBIC. COVID EIDL loan Representative at 1–800–659–2955
final rule, based on how SBA applied proceeds may be used to pay debt (individuals who are deaf or hard of
the PPP’s size standard at the per- incurred both before and after hearing may call 1–800–877–8339), or a
physical location level for NAICS submitting the COVID EIDL loan local SBA Field Office; the list of local
sector-72 businesses and other application. SBA Field Offices may be found at
industries, SBA is adopting a program- Therefore, SBA is revising the https://www.sba.gov/tools/local-
specific definition of ‘‘business regulation at 13 CFR 123.303, ‘‘How can assistance/districtoffices.
concern’’ as covering each individual my business spend my economic injury
physical location for industries in disaster loan?’’, to permit COVID EIDL Compliance With Executive Orders, the
certain hard-hit economic sectors. As working capital loan proceeds to be Congressional Review Act, Paperwork
such, SBA will apply the program’s size used to pay any type of business debt, Reduction Act, and the Regulatory
standards at the physical-location level including loans owned by a Federal Flexibility Act
for the identified industries. This does agency (including SBA) or an SBIC. SBA Executive Orders 12866 and 13563
not change the size standards that apply also is revising the regulation to clarify
to the COVID EIDL loan program. that COVID EIDL loan proceeds may be OMB’s Office of Information and
Instead, this program-specific provision used to make debt payments including Regulatory Affairs (OIRA) has
changes the level at which the size monthly payments, payments of determined that this interim final rule is
standard applies—for businesses in deferred interest, and pre-payments, economically significant for the
certain sectors—i.e., to each physical except that pre-payments will not be purposes of Executive Orders 12866 and
location, rather than to each entity in permitted on debt that is owned by a 13563. SBA, however, is proceeding
the aggregate. Federal agency (including SBA) or an under the emergency provision at
SBIC. Executive Order 12866 section
4. COVID EIDL Uses of Proceeds 6(a)(3)(D), based on the need to move
Currently, the EIDL program only 5. Limits of COVID EIDL Loans to a expeditiously to mitigate the current
permits loan proceeds to be used for Single Corporate Group economic hardships and conditions
working capital necessary to carry the SBA is adding a new regulation to arising from the COVID–19 emergency.
business until resumption of normal state that entities that are part of a single This rule is necessary to provide
operations and for expenditures corporate group shall in no event economic relief to small businesses and
necessary to alleviate the specific receive more than $10,000,000 of private nonprofit organizations
economic injury and does not permit COVID EIDL loans in the aggregate. For nationwide adversely impacted by
payments on Federal debt or purposes of this limit, entities are part COVID–19. As evidence of unmet need,
prepayment of non-Federal existing debt of a single corporate group if they are the Restaurant Revitalization Fund
even if the debt has a balloon payment majority owned, directly or indirectly, (RRF) received $28.6 billion in
jbell on DSKJLSW7X2PROD with RULES
due. Prior to the pandemic, businesses, by a common parent. Businesses are appropriations and in 21 days, received
in the ordinary course of their subject to this limitation even if the 278,304 RRF applications totaling more
operations, managed debt payments businesses are in certain hard-hit sectors than $72 billion, which resulted in
through cash flows of the business. Due and able to use the per-physical location 177,300 businesses without assistance.
to mandatory COVID–19 closures, some application of the size standard as set Further, with the end of the Paycheck
businesses did not have sufficient cash forth in 13 CFR 123.300(e)(5). Protection Program (PPP), businesses
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
50218 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations
and nonprofit organizations that are still resources and the continuing economic that when an agency issues a proposed
struggling will turn to the COVID EIDL instability. An immediate effective date rule, or a final rule pursuant to section
program for long-term recovery. For will give small businesses, nonprofit 553(b) of the Administrative Procedure
these reasons, SBA anticipates that this organizations, qualified agricultural Act or another law, the agency must
rule will result in substantial benefits to businesses, and independent contractors prepare a regulatory flexibility analysis
small businesses, nonprofit affected by this interim final rule the that meets the requirements of the RFA
organizations, their employees, and the maximum amount of time to apply for and publish such analysis in the
communities they serve. loans and SBA the maximum amount of Federal Register. 5 U.S.C. 603, 604.
time to process applications before the
Executive Order 12988 Rules that are exempt from notice and
program ends on December 31, 2021.
SBA has drafted this rule, to the Given the short duration of this comment are also exempt from the RFA
extent practicable, in accordance with program, SBA has determined that it is requirements, including conducting a
the standards set forth in section 3(a) impractical and not in the public regulatory flexibility analysis, such as
and 3(b)(2) of Executive Order 12988, to interest to provide a delayed effective when, among other exceptions, the
minimize litigation, eliminate date. agency for good cause finds that notice
ambiguity, and reduce burden. The rule and public procedure are impracticable,
has no preemptive or retroactive effect. Paperwork Reduction Act, 44 U.S.C. unnecessary, or contrary to the public
Chapter 35 interest. SBA Office of Advocacy Guide:
Executive Order 13132 SBA has determined that this rule How To Comply with the Regulatory
SBA has determined that this rule will require revisions to the COVID–19 Flexibility Act, Ch.1. p.9. Since this rule
will not have substantial direct effects Economic Injury Disaster Loan is exempt from notice and comment,
on the States, on the relationship Application information collection SBA is not required to conduct a
between the National Government and (OMB Control Number 3245–0406). The regulatory flexibility analysis.
the States, or on the distribution of application form will be revised to
power and responsibilities among the require the disclosure of the NAICS List of Subjects
various layers of government. Therefore, code for the applicant in order to
13 CFR Part 121
SBA has determined that this rule has determine the size of the applicant on
no federalism implications warranting a per-physical location basis and to add Loan programs—business, Reporting
preparation of a federalism assessment. an option to identify the eligible entity and recordkeeping requirements, Small
as a business that is assigned a NAICS business.
Congressional Review Act
code beginning with 61, 71, 72, 213,
OIRA has determined that this is a 3121, 315, 448, 451, 481, 485, 487, 511, 13 CFR Part 123
major rule for purposes of subtitle E of 512, 515, 532, or 812, employs not more
the Small Business Regulatory than 500 employees per physical Loan Program—disaster loan program.
Enforcement and Fairness Act of 1996 location, and together with affiliates has For the reasons stated in the
(also known as the Congressional no more than 20 locations. In addition, preamble, SBA amends 13 CFR parts
Review Act or CRA), 5 U.S.C. 804(2) et to simplify and streamline the process 121 and 123 as follows:
seq. Under the CRA, a major rule takes for applicants, SBA has consolidated
effect 60 days after the rule is published Forms 3501 (COVID–19 Economic PART 121—SMALL BUSINESS SIZE
in the Federal Register. 5 U.S.C. Injury Disaster Loan Application), 3502 REGULATIONS
801(a)(3). (Economic Injury Disaster Loan
Notwithstanding this requirement, the Supporting Information), and 3503 ■ 1. The authority citation for 13 CFR
CRA allows agencies to dispense with (Self-Certification for Verification of part 121 continues to read as follows:
the requirements of section 801 when Eligible Entity for Economic Injury
the agency for good cause finds that Disaster Loan) into one form. This will Authority: 15 U.S.C. 632, 634(b)(6),
such procedure would be reduce the burden on applicants as they 636(a)(36), 662, and 694a(9); Pub. L. 116–136,
‘‘impracticable, unnecessary, or contrary will only need to enter certain Section 1114.
to the public interest,’’ and provides information once. SBA also added ■ 2. Amend § 121.301 by adding
that the rule shall take effect at such questions related to entity type and paragraph (g) to read as follows:
time as the Federal agency promulgating types of business activity to assist
the rule determines. 5 U.S.C. 808(2). borrowers in making the eligibility § 121.301 What size standards and
Pursuant to section 808(2), SBA for good certification. Further, SBA revised the affiliation principles are applicable to
cause finds that a 60-day delay to questions related to the calculation of financial assistance programs?
provide public notice would be economic injury for clarity and to aid in * * * * *
impracticable, unnecessary, and automating the review process. Finally,
contrary to the public interest. Likewise, (g) For COVID–19 Economic Injury
SBA made additional technical edits to
for the same reasons, SBA for good the form for clarity. SBA has obtained Disaster (COVID EIDL) loans, an
cause finds that there are grounds to emergency approval of the revisions, ‘‘affiliated business’’ or ‘‘affiliate’’ is a
waive the 30-day effective date delay including waiver of public comment business in which an eligible entity has
under the Administrative Procedure notices. The collection is approved for an equity interest or right to profit
Act. 5 U.S.C. 553(d)(3). use until February 28, 2022. SBA will distributions of not less than 50 percent,
Other SBA COVID–19 relief programs take the necessary steps to solicit or in which an eligible entity has the
have recently ended or exhausted the comments and revise the information contractual authority to control the
direction of the business, provided that
jbell on DSKJLSW7X2PROD with RULES
funding provided for the program collection, if necessary, before approval
(including PPP and RRF), yet businesses expires. such affiliation shall be determined as
and nonprofit organizations are still in of any arrangements or agreements in
need of support. The COVID EIDL Regulatory Flexibility Act (RFA) existence as of January 31, 2020. For
program is more critical now than it was The Regulatory Flexibility Act (RFA), exceptions to affiliation, see
before because of the lack of these other 5 U.S.C. 601–612, generally requires § 121.103(b).
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50219
PART 123—DISASTER LOAN agency or entity that currently has an DEPARTMENT OF TRANSPORTATION
PROGRAM effective ruling letter from the Internal
Revenue Service (IRS) granting tax Federal Aviation Administration
■ 3. The authority citation for 13 CFR exemption under sections 501(c), (d), or
part 123 is revised to read as follows: (e) of the Internal Revenue Code of 14 CFR Part 39
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 1954, or satisfactory evidence from the [Docket No. FAA–2021–0463; Project
636(d), and 657n; Section 1110, Pub. L. 116– State that the non-revenue-producing Identifier 2018–SW–050–AD; Amendment
136, 134 Stat. 281; and Section 331, Pub. L. organization or entity is a non-profit one 39–21698; AD 2021–17–15]
116–260, 134 Stat. 1182. organized or doing business under State
RIN 2120–AA64
■ 4. Amend § 123.13 by revising the first law, or a faith-based organization;
sentence of paragraph (e) and paragraph (4) Are a business, cooperative, Airworthiness Directives; Leonardo
(f) to read as follows: agricultural enterprise, Employee Stock S.p.a. Helicopters
Ownership Plan (as defined in 15 U.S.C.
§ 123.13 What happens if my loan AGENCY: Federal Aviation
632), or tribal small business concern
application is denied? Administration (FAA), DOT.
(as described in 15 U.S.C. 657a(b)(2)(C)),
* * * * * with not more than 500 employees; or ACTION: Final rule.
(e) If SBA declines your application a
second time, you have the right to (5) Are a business that is assigned a
SUMMARY: The FAA is adopting a new
appeal in writing to the Director, North American Industry Classification
airworthiness directive (AD) for
Disaster Assistance Processing and System (NAICS) code beginning with
Leonardo S.p.a. Model AB139 and
Disbursement Center (DAPDC) or the 61, 71, 72, 213, 3121, 315, 448, 451, 481,
AW139 helicopters with certain main
Director’s designee(s). * * * 485, 487, 511, 512, 515, 532, or 812,
rotor blades installed. This AD was
(f) The decision of the Director, employs not more than 500 employees
prompted by a report of an in-flight loss
DAPDC or the Director’s designee(s), is per physical location, and together with
of a main rotor blade (MRB) tip cap.
final unless: affiliates has no more than 20 locations.
This AD requires inspecting the MRB
(1) The Director, DAPDC or the ■ 6. Amend § 123.303 by adding a tip cap for disbonding. The FAA is
Director’s designee(s), does not have the sentence to the end of paragraph (a) and issuing this AD to address the unsafe
authority to approve the requested loan; revising paragraph (b)(2) to read as condition on these products.
(2) The Director, DAPDC or the follows: DATES: This AD is effective October 13,
Director’s designee(s), refers the matter
§ 123.303 How can my business spend my 2021.
to the SBA Associate Administrator for
economic injury disaster loan? The Director of the Federal Register
Disaster Assistance (AA/DA);
(3) The AA/DA, upon a showing of approved the incorporation by reference
(a) * * * COVID EIDL loan proceeds of a certain document listed in this AD
special circumstances, requests that the also may be used to make debt
Director, DAPDC or the Director’s as of October 13, 2021.
payments including monthly payments,
designee(s), forward the matter to him payment of deferred interest, and pre- ADDRESSES: For service information
or her for final consideration; or payments on any business debts, except identified in this final rule, contact
(4) The SBA Administrator, solely pre-payments are not permitted on any Leonardo S.p.A. Helicopters, Emanuele
within the Administrator’s discretion, loans owned by a Federal agency Bufano, Head of Airworthiness, Viale
chooses to review the matter and make (including SBA) or a Small Business G.Agusta 520, 21017 C.Costa di
the final decision. Such discretionary Investment Company licensed under the Samarate (Va) Italy; telephone +39–
authority of the Administrator does not Small Business Investment Act. 0331–225074; fax +39–0331–229046; or
create additional rights of appeal on the at https://
(b) * * *
part of an applicant not otherwise customerportal.leonardocompany.com/
specified in SBA regulations. (2) Except for COVID EIDL loan en-US/. You may view the referenced
proceeds, make payments on loans service information at the FAA, Office
* * * * * owned by a Federal agency (including of the Regional Counsel, Southwest
■ 5. Amend § 123.300 by adding SBA) or a Small Business Investment Region, 10101 Hillwood Pkwy., Room
paragraph (e) to read as follows: Company licensed under the Small 6N–321, Fort Worth, TX 76177. For
§ 123.300 Is my business eligible to apply Business Investment Act; information on the availability of this
for an economic injury disaster loan? * * * * * material at the FAA, call (817) 222–
* * * * * ■ 7. Add § 123.304 to read as follows: 5110. It is also available at https://
(e) COVID–19 Economic Injury www.regulations.gov by searching for
Disaster (COVID EIDL) loans are § 123.304 Is there a limit on the maximum and locating Docket No. FAA–2021–
available if, as of the date of application, loan amount to a single corporate group for 0463.
you: COVID EIDL Loans?
Examining the AD Docket
(1) Are a business, including an Entities that are part of a single
agricultural cooperative, aquaculture corporate group shall in no event You may examine the AD docket at
enterprise, nursery, or producer receive more than $10,000,000 of https://www.regulations.gov by
cooperative (but excluding all other COVID EIDL loans in the aggregate. For searching for and locating Docket No.
agricultural enterprises), that is small purposes of this limit, entities are part FAA–2021–0463; or in person at Docket
under SBA Size Standards (as defined of a single corporate group if they are Operations between 9 a.m. and 5 p.m.,
in part 121 of this chapter); majority owned, directly or indirectly, Monday through Friday, except Federal
jbell on DSKJLSW7X2PROD with RULES
(2) Are an individual who operates by a common parent. holidays. The AD docket contains this
under a sole proprietorship, with or final rule, the European Aviation Safety
without employees, or as an Isabella Casillas Guzman, Agency (now European Union Aviation
independent contractor; Administrator. Safety Agency) (EASA) AD, any
(3) Are a private non-profit [FR Doc. 2021–19232 Filed 9–7–21; 8:45 am] comments received, and other
organization that is a non-governmental BILLING CODE 8026–03–P information. The street address for
VerDate Sep<11>2014 16:25 Sep 07, 2021 Jkt 253001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
File and source
- File
- 2021-09-08-disaster-loan-program-changes.pdf
- Size
- 254,953 bytes
- SHA-256
- c50119fcfd7d6fb172df9e4cb22641fd55996eec5ca53eb09c1d082efdcfa28e
- Original
- No public link identified.