U.S. Department of the Treasury, Paycheck Protection Program: "Interim Final Rule on Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Reques"
Summary
An interim final rule of the U.S. Small Business Administration published in the Federal Register on Tuesday, May 19, 2020 (Docket Number SBA–2020–0026), on extension of the limited safe harbor with respect to certification concerning need for a PPP loan request. It extends from May 7, 2020 to May 14, 2020 the date by which a borrower that repays a PPP loan in full will be deemed by SBA to have made the required certification in good faith. Because of that extension, SBA moves the deadline for the initial SBA Form 1502 submission from May 18, 2020 to May 22, 2020. The rule is effective May 19, 2020, with comments due on or before June 18, 2020, and the page also carries the rule's compliance statements on Executive Orders and the Regulatory Flexibility Act.
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“U.S. Department of the Treasury, Paycheck Protection Program: ‘Interim Final Rule on Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Reques.’”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-paycheck-protection-program-interim-fin-5fe24de304/
, SHA-256 d798561c2893219ec669a3601df6adb4757a0ce9c18fe513103415224a3432f3.Full text
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 29845
13563, and is considered a major rule small entities. The requirement to Protection Program was established
under the Congressional Review Act. conduct a regulatory impact analysis under the Coronavirus Aid, Relief, and
SBA, however, is proceeding under the does not apply if the head of the agency Economic Security Act (CARES Act or
emergency provision at Executive Order ‘‘certifies that the rule will not, if the Act). This interim final rule revises
12866 Section 6(a)(3)(D) based on the promulgated, have a significant the interim final rule posted on April
need to move expeditiously to mitigate economic impact on a substantial 24, 2020, by extending the date by
the current economic conditions arising number of small entities.’’ 5 U.S.C. which certain Paycheck Protection
from the COVID–19 emergency. This 605(b). The agency must, however, Program borrowers may repay their
rule’s designation under Executive publish the certification in the Federal loans from May 7, 2020 to May 14, 2020,
Order 13771 will be informed by public Register at the time of publication of the in order to avail themselves of a safe
comment. rule, ‘‘along with a statement providing harbor with respect to a certification
the factual basis for such certification.’’ required by the Act, and makes other
Executive Order 12988
If the agency head has not waived the conforming changes. This interim final
SBA has drafted this rule, to the requirements for a regulatory flexibility rule supplements SBA’s implementation
extent practicable, in accordance with analysis in accordance with the RFA’s of the Act and requests public comment.
the standards set forth in section 3(a) waiver provision, and no other RFA DATES:
and 3(b)(2) of Executive Order 12988, to exception applies, the agency must Effective date: This rule is effective
minimize litigation, eliminate prepare the regulatory flexibility May 19, 2020.
ambiguity, and reduce burden. The rule analysis and publish it in the Federal Applicability date: This interim final
has no preemptive or retroactive effect. Register at the time of promulgation or, rule applies to borrowers who applied
Executive Order 13132 if the rule is promulgated in response to for loans under the Paycheck Protection
an emergency that makes timely Program.
SBA has determined that this rule compliance impracticable, within 180 Comment date: Comments must be
will not have substantial direct effects days of publication of the final rule. 5 received on or before June 18, 2020.
on the States, on the relationship U.S.C. 604(a), 608(b). Rules that are ADDRESSES: You may submit comments,
between the National Government and exempt from notice and comment are identified by number SBA–2020–0026
the States, or on the distribution of also exempt from the RFA requirements, through the Federal eRulemaking Portal:
power and responsibilities among the including conducting a regulatory http://www.regulations.gov. Follow the
various layers of government. Therefore, flexibility analysis, when among other instructions for submitting comments.
SBA has determined that this rule has things the agency for good cause finds SBA will post all comments on
no federalism implications warranting that notice and public procedure are www.regulations.gov. If you wish to
preparation of a federalism assessment. impracticable, unnecessary, or contrary submit confidential business
Paperwork Reduction Act, 44 U.S.C. to the public interest. SBA Office of information (CBI) as defined in the User
Chapter 35 Advocacy guide: How to Comply with Notice at www.regulations.gov, please
the Regulatory Flexibility Act, Ch.1. p.9. send an email to ppp-ifr@sba.gov.
SBA has determined that this rule
Accordingly, SBA is not required to Highlight the information that you
will not impose new or modify existing
conduct a regulatory flexibility analysis. consider to be CBI and explain why you
recordkeeping or reporting requirements
under the Paperwork Reduction Act. believe SBA should hold this
Jovita Carranza,
information as confidential. SBA will
Regulatory Flexibility Act (RFA) Administrator.
review the information and make the
[FR Doc. 2020–10658 Filed 5–18–20; 8:45 am]
The Regulatory Flexibility Act (RFA) final determination whether it will
BILLING CODE P publish the information.
generally requires that when an agency
issues a proposed rule, or a final rule FOR FURTHER INFORMATION CONTACT: A
pursuant to section 553(b) of the APA or SMALL BUSINESS ADMINISTRATION Call Center Representative at 833–572–
another law, the agency must prepare a 0502, or the local SBA Field Office; the
regulatory flexibility analysis that meets 13 CFR Part 120 list of offices can be found at https://
the requirements of the RFA and www.sba.gov/tools/local-assistance/
[Docket Number SBA–2020–0026] districtoffices.
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604. Specifically, RIN 3245–AH41 SUPPLEMENTARY INFORMATION:
the RFA normally requires agencies to
describe the impact of a rulemaking on Business Loan Program Temporary I. Background Information
small entities by providing a regulatory Changes; Paycheck Protection On March 13, 2020, President Trump
impact analysis. Such analysis must Program—Requirements—Extension declared the ongoing Coronavirus
address the consideration of regulatory of Limited Safe Harbor With Respect to Disease 2019 (COVID–19) pandemic of
options that would lessen the economic Certification Concerning Need for PPP sufficient severity and magnitude to
effect of the rule on small entities. The Loan Request warrant an emergency declaration for all
RFA defines a ‘‘small entity’’ as (1) a AGENCY: U.S. Small Business States, territories, and the District of
proprietary firm meeting the size Administration. Columbia. With the COVID–19
standards of the Small Business ACTION: Interim final rule. emergency, many small businesses
Administration (SBA); (2) a nonprofit nationwide are experiencing economic
organization that is not dominant in its SUMMARY: On April 24, 2020, the U.S. hardship as a direct result of the
field; or (3) a small government Small Business Administration (SBA) Federal, State, tribal, and local public
jurisdiction with a population of less posted an interim final rule relating to health measures that are being taken to
than 50,000. 5 U.S.C. 601(3)–(6). Except promissory notes, authorizations, minimize the public’s exposure to the
for such small government jurisdictions, affiliation, and eligibility in connection virus. These measures, some of which
neither State nor local governments are with the implementation of a temporary are government-mandated, are being
‘‘small entities.’’ Similarly, for purposes new program, titled the ‘‘Paycheck implemented nationwide and include
of the RFA, individual persons are not Protection Program.’’ The Paycheck the closures of restaurants, bars, and
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29846 Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations
gyms. In addition, based on the advice effective date provided in the Limited Safe Harbor With Respect to
of public health officials, other Administrative Procedure Act. Certification Concerning Need for PPP
measures, such as keeping a safe Although this interim final rule is Loan Request
distance from others or even stay-at- effective immediately, comments are Consistent with section 1102 of the
home orders, are being implemented, solicited from interested members of the CARES Act, the Borrower Application
resulting in a dramatic decrease in public on all aspects of the interim final Form requires PPP applicants to certify
economic activity as the public avoids rule, including section III below. These that ‘‘[c]urrent economic uncertainty
malls, retail stores, and other comments must be submitted on or makes this loan request necessary to
businesses. support the ongoing operations of the
before June 18, 2020. SBA will consider
On March 27, 2020, the President
these comments and the need for Applicant.’’ Any borrower that applied
signed the Coronavirus Aid, Relief, and
making any revisions as a result of these for a PPP loan and repays the loan in
Economic Security Act (the CARES Act
comments. full by May 14, 2020 will be deemed by
or the Act) (Pub. L. 116–136) to provide
SBA to have made the required
emergency assistance and health care III. Paycheck Protection Program certification in good faith. The
response for individuals, families, and Requirements for Extension of Safe Administrator, in consultation with the
businesses affected by the coronavirus Harbor With Respect to Certification Secretary, determined that this safe
pandemic. The Small Business Concerning Need for PPP Loan Request harbor is necessary and appropriate to
Administration (SBA) received funding
The CARES Act was enacted to ensure that borrowers promptly repay
and authority through the Act to modify
existing loan programs and establish a provide immediate assistance to PPP loan funds that the borrower
new loan program to assist small individuals, families, and organizations obtained based on a misunderstanding
businesses nationwide adversely affected by the COVID–19 emergency. or misapplication of the required
impacted by the COVID–19 emergency. Among the provisions contained in the certification standard.
The extension of the safe harbor
Section 1102 of the Act temporarily CARES Act are provisions authorizing
requires a corresponding date change to
permits SBA to guarantee 100 percent of SBA to temporarily guarantee loans
the interim final rule that SBA posted
7(a) loans under a new program titled under the Paycheck Protection Program
on its website on April 28, 2020, which
the ‘‘Paycheck Protection Program.’’ (PPP). Loans under the PPP are 100
Section 1106 of the Act provides for was published in the Federal Register
percent guaranteed by SBA, and the full
forgiveness of up to the full principal on May 4, 2020 (85 FR 26321), regarding
principal amount of the loans and any
amount of qualifying loans guaranteed PPP loan disbursements. Specifically,
accrued interest may qualify for loan
under the Paycheck Protection Program. Part III.1.b. provides that Lenders must
forgiveness. The Act requires each
On April 24, 2020, the President signed electronically upload SBA Form 1502
applicant applying for a PPP loan to
the Paycheck Protection Program and information within 20 calendar days
certify ‘‘that the uncertainty of current
Health Care Enhancement Act (Pub. L. after a PPP loan is approved or, for loans
economic conditions makes necessary
116–139), which provided additional approved before the availability of the
the loan request to support the ongoing
funding and authority for the PPP. updated SBA Form 1502 reporting
obligations’’ of the applicant. On April
process, by May 18, 2020. 85 FR 26321,
II. Comments and Immediate Effective 24, 2020, SBA posted on its website an
26323. Because of the extension of the
Date interim final rule (the Fourth PPP
safe harbor deadline, SBA is extending
Interim Final Rule), which also was
This interim final rule is effective the deadline for the submission of the
published in the Federal Register on
without advance notice and public initial SBA Form 1502 from May 18,
April 28, 2020 (85 FR 23450), to provide
comment because section 1114 of the 2020 to May 22, 2020.
relief to PPP borrowers who applied for
Act authorizes SBA to issue regulations and received PPP loans based on a Additional Information
to implement Title I of the Act without misunderstanding or misapplication of
regard to notice requirements. In SBA may provide further guidance, if
the required certification standard. The needed, through SBA notices that will
addition, SBA has determined that there Fourth PPP Interim Final Rule provides
is good cause for dispensing with be posted on SBA’s website at
that any borrower that applied for a PPP www.sba.gov. Questions on the
advance public notice and comment on loan and repays the loan in full by May
the ground that it would be contrary to Paycheck Protection Program may be
7, 2020, will be deemed by SBA to have directed to the Lender Relations
the public interest. Specifically, SBA, in made the required certification in good
consultation with the Department of the Specialist in the local SBA Field Office.
faith. SBA, in consultation with the The local SBA Field Office may be
Treasury, intends to issue additional Department of the Treasury, will issue
guidance with regard to the safe harbor found at https://www.sba.gov/tools/
additional guidance before May 14, local-assistance/districtoffices.
and extending the safe harbor deadline
2020 concerning how SBA will review
from May 7 to May 14 will afford Compliance With Executive Orders
the required certification to help PPP
Paycheck Protection Program borrowers 12866, 12988, 13132, 13563, and 13771,
borrowers evaluate whether they may
time to review the forthcoming SBA the Paperwork Reduction Act (44 U.S.C.
have misunderstood or misapplied the
guidance and decide whether to avail Ch. 35), and the Regulatory Flexibility
statutory certification standard.1 Based
themselves of the safe harbor. SBA Act (5 U.S.C. 601–612).
on this upcoming guidance, SBA, in
previously announced this intended
consultation with the Department of the Executive Orders 12866, 13563, and
extension in nonbinding guidance
Treasury, determined that it is necessary 13771
published on May 5, 2020. Advance
and appropriate to extend the safe
notice and public comment would This interim final rule is
harbor deadline for repaying PPP loans
defeat the purpose of this interim final economically significant for the
from May 7, 2020 to May 14, 2020.
rule given the timeline for the existing purposes of Executive Orders 12866 and
safe harbor and short-term, temporary 1 This guidance is available at https://
13563, and is considered a major rule
nature of this program. These same www.sba.gov/sites/default/files/2020-05/Paycheck-
under the Congressional Review Act.
reasons provide good cause for SBA to Protection-Program-Frequently-Asked-Questions_ SBA, however, is proceeding under the
dispense with the 30-day delayed 05%2013%2020_2.pdf. emergency provision at Executive Order
VerDate Sep<11>2014 17:20 May 18, 2020 Jkt 250001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM 19MYR1
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 29847
12866 Section 6(a)(3)(D) based on the promulgated, have a significant relief to small businesses nationwide
need to move expeditiously to mitigate economic impact on a substantial adversely impacted by the Coronavirus
the current economic conditions arising number of small entities.’’ 5 U.S.C. Disease 2019 (COVID–19). SBA posted
from the COVID–19 emergency. This 605(b). The agency must, however, additional interim final rules on April 3,
rule’s designation under Executive publish the certification in the Federal 2020, April 14, 2020, April 24, 2020,
Order 13771 will be informed by public Register at the time of publication of the April 28, 2020, April 30, 2020, May 5,
comment. rule, ‘‘along with a statement providing 2020, and May 8, 2020, and the
the factual basis for such certification.’’ Department of the Treasury posted an
Executive Order 12988 additional interim final rule on April
If the agency head has not waived the
SBA has drafted this rule, to the requirements for a regulatory flexibility 28, 2020. This interim final rule
extent practicable, in accordance with analysis in accordance with the RFA’s supplements the previously posted
the standards set forth in section 3(a) waiver provision, and no other RFA interim final rules by providing
and 3(b)(2) of Executive Order 12988, to exception applies, the agency must guidance on additional eligibility
minimize litigation, eliminate prepare the regulatory flexibility requirements for certain electric
ambiguity, and reduce burden. The rule analysis and publish it in the Federal cooperatives, and requests public
has no preemptive or retroactive effect. Register at the time of promulgation or, comment.
Executive Order 13132 if the rule is promulgated in response to DATES:
an emergency that makes timely Effective date: This rule is effective
SBA has determined that this rule compliance impracticable, within 180 May 19, 2020.
will not have substantial direct effects days of publication of the final rule. 5 Applicability date: This interim final
on the States, on the relationship U.S.C. 604(a), 608(b). Rules that are rule applies to applications submitted
between the National Government and exempt from notice and comment are under the Paycheck Protection Program
the States, or on the distribution of also exempt from the RFA requirements, through June 30, 2020, or until funds
power and responsibilities among the including conducting a regulatory made available for this purpose are
various layers of government. Therefore, flexibility analysis, when among other exhausted.
SBA has determined that this rule has things the agency for good cause finds Comment date: Comments must be
no federalism implications warranting that notice and public procedure are received on or before June 18, 2020.
preparation of a federalism assessment. impracticable, unnecessary, or contrary ADDRESSES: You may submit comments,
Paperwork Reduction Act, 44 U.S.C. to the public interest. SBA Office of identified by number SBA–2020–0029
Chapter 35 Advocacy guide: How to Comply with through the Federal eRulemaking Portal:
the Regulatory Flexibility Act, Ch.1. p.9. http://www.regulations.gov. Follow the
SBA has determined that this rule
Accordingly, SBA is not required to instructions for submitting comments.
will not impose new or modify existing
conduct a regulatory flexibility analysis. SBA will post all comments on
recordkeeping or reporting requirements
under the Paperwork Reduction Act. www.regulations.gov. If you wish to
Jovita Carranza,
submit confidential business
Regulatory Flexibility Act (RFA) Administrator.
information (CBI) as defined in the User
[FR Doc. 2020–10649 Filed 5–18–20; 8:45 am]
The Regulatory Flexibility Act (RFA) Notice at www.regulations.gov, please
BILLING CODE P send an email to ppp-ifr@sba.gov.
generally requires that when an agency
issues a proposed rule, or a final rule Highlight the information that you
pursuant to section 553(b) of the APA or consider to be CBI and explain why you
SMALL BUSINESS ADMINISTRATION
another law, the agency must prepare a believe SBA should hold this
regulatory flexibility analysis that meets 13 CFR Parts 120 and 121 information as confidential. SBA will
the requirements of the RFA and review the information and make the
[Docket Number SBA–2020–0029] final determination whether it will
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604. Specifically, RIN 3245–AH43 publish the information.
the RFA normally requires agencies to FOR FURTHER INFORMATION CONTACT: A
describe the impact of a rulemaking on Business Loan Program Temporary Call Center Representative at 833–572–
small entities by providing a regulatory Changes; Paycheck Protection 0502, or the local SBA Field Office; the
impact analysis. Such analysis must Program—Eligibility of Certain Electric list of offices can be found at https://
address the consideration of regulatory Cooperatives www.sba.gov/tools/local-assistance/
options that would lessen the economic AGENCY: U.S. Small Business districtoffices.
effect of the rule on small entities. The Administration. SUPPLEMENTARY INFORMATION:
RFA defines a ‘‘small entity’’ as (1) a ACTION: Interim final rule.
proprietary firm meeting the size I. Background Information
standards of the Small Business SUMMARY: On April 2, 2020, the U.S. On March 13, 2020, President Trump
Administration (SBA); (2) a nonprofit Small Business Administration (SBA) declared the ongoing Coronavirus
organization that is not dominant in its posted an interim final rule announcing Disease 2019 (COVID–19) pandemic of
field; or (3) a small government the implementation of the Coronavirus sufficient severity and magnitude to
jurisdiction with a population of less Aid, Relief, and Economic Security Act warrant an emergency declaration for all
than 50,000. 5 U.S.C. 601(3)–(6). Except (CARES Act). The CARES Act States, territories, and the District of
for such small government jurisdictions, temporarily adds a new program, titled Columbia. With the COVID–19
neither State nor local governments are the ‘‘Paycheck Protection Program,’’ to emergency, many small businesses
‘‘small entities.’’ Similarly, for purposes the SBA’s 7(a) Loan Program. The nationwide are experiencing economic
of the RFA, individual persons are not CARES Act also provides for forgiveness hardship as a direct result of the
small entities. The requirement to of up to the full principal amount of Federal, State, tribal, and local public
conduct a regulatory impact analysis qualifying loans guaranteed under the health measures that are being taken to
does not apply if the head of the agency Paycheck Protection Program (PPP). The minimize the public’s exposure to the
‘‘certifies that the rule will not, if PPP is intended to provide economic virus. These measures, some of which
VerDate Sep<11>2014 17:20 May 18, 2020 Jkt 250001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 E:\FR\FM\19MYR1.SGM 19MYR1
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