U.S. Department of the Treasury, Paycheck Protection Program: "Interim Final Rule on Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan"
Summary
An interim final rule of the U.S. Small Business Administration in the Federal Register of Tuesday, May 26, 2020 (Docket Number SBA–2020–0031), on a second extension of the limited safe harbor with respect to certification concerning need for a PPP loan request. It extends from May 14, 2020 to May 18, 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, citing guidance posted on SBA's website on May 13, 2020. It also requires lenders to upload SBA Form 1502 reporting information by the later of May 29, 2020 or 10 calendar days after disbursement or cancellation of a PPP loan. The rule is effective May 26, 2020, comments are due on or before June 25, 2020, and the signature block names Jovita Carranza, Administrator.
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“U.S. Department of the Treasury, Paycheck Protection Program: ‘Interim Final Rule on Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan.’”
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-e82bddd2c7/
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31357
Rules and Regulations Federal Register
Vol. 85, No. 101
Tuesday, May 26, 2020
This section of the FEDERAL REGISTER SBA will post all comments on Section 1102 of the Act temporarily
contains regulatory documents having general www.regulations.gov. If you wish to permits SBA to guarantee 100 percent of
applicability and legal effect, most of which submit confidential business 7(a) loans under a new program titled
are keyed to and codified in the Code of information (CBI) as defined in the User the ‘‘Paycheck Protection Program.’’
Federal Regulations, which is published under Notice at www.regulations.gov, please Section 1106 of the Act provides for
50 titles pursuant to 44 U.S.C. 1510.
send an email to ppp-ifr@sba.gov. forgiveness of up to the full principal
The Code of Federal Regulations is sold by Highlight the information that you amount of qualifying loans guaranteed
the Superintendent of Documents. consider to be CBI and explain why you under the Paycheck Protection Program.
believe SBA should hold this On April 24, 2020, the President signed
information as confidential. SBA will the Paycheck Protection Program and
SMALL BUSINESS ADMINISTRATION review the information and make the Health Care Enhancement Act (Pub. L.
final determination whether it will 116–139), which provided additional
13 CFR Part 120 publish the information. funding and authority for the PPP.
[Docket Number SBA–2020–0031] FOR FURTHER INFORMATION CONTACT: A II. Comments and Immediate Effective
RIN 3245–AH45 Call Center Representative at 833–572– Date
0502, or the local SBA Field Office; the
This interim final rule is effective
Business Loan Program Temporary list of offices can be found at https://
without advance notice and public
Changes; Paycheck Protection www.sba.gov/tools/local-assistance/
comment because section 1114 of the
Program—Second Extension of districtoffices.
Act authorizes SBA to issue regulations
Limited Safe Harbor With Respect to SUPPLEMENTARY INFORMATION:
to implement Title I of the Act without
Certification Concerning Need for PPP regard to notice requirements. In
I. Background Information
Loan and Lender Reporting addition, SBA has determined that there
On March 13, 2020, President Trump
AGENCY: U.S. Small Business is good cause for dispensing with
declared the ongoing Coronavirus
Administration. advance public notice and comment on
Disease 2019 (COVID–19) pandemic of
ACTION: Interim final rule.
the ground that it would be contrary to
sufficient severity and magnitude to
the public interest. Specifically, SBA, in
warrant an emergency declaration for all
SUMMARY: On May 8, 2020, the U.S. consultation with the Department of the
States, territories, and the District of
Small Business Administration (SBA) Treasury, issued additional guidance
Columbia. With the COVID–19
posted an interim final rule relating to with regard to the safe harbor posted on
emergency, many small businesses
the extension of a safe harbor with SBA’s website on May 13, 2020. See
nationwide are experiencing economic
respect to a certification required by the FAQ 46 (posted May 13, 2020).1 SBA, in
hardship as a direct result of the
Coronavirus Aid, Relief, and Economic consultation with the Department of the
Federal, State, tribal, and local public
Security Act (CARES Act or the Act) in Treasury, determined that extending the
health measures that are being taken to
connection with the implementation of safe harbor deadline from May 14, 2020
minimize the public’s exposure to the
a temporary new program, titled the to May 18, 2020 would afford Paycheck
virus. These measures, some of which
‘‘Paycheck Protection Program.’’ This Protection Program borrowers time to
are government-mandated, are being
interim final rule revises the interim review SBA’s May 13, 2020 guidance
implemented nationwide and include
final rule posted on May 8, 2020, and and decide whether to avail themselves
the closures of restaurants, bars, and
published in the Federal Register on of the safe harbor. SBA previously
gyms. In addition, based on the advice
May 19, 2020, by extending the date by announced this intended extension in
of public health officials, other
which certain Paycheck Protection nonbinding guidance published on May
measures, such as keeping a safe
Program (PPP) borrowers may repay 13, 2020. See FAQ 47 (posted on May
distance from others or even stay-at-
their loans from May 14, 2020 to May 13, 2020).2 SBA, in consultation with
home orders, are being implemented,
18, 2020, in order to avail themselves of the Department of the Treasury,
resulting in a dramatic decrease in
a safe harbor with respect to the determined that the immediate effective
economic activity as the public avoids
certification required by the Act, and by date of this interim final rule would
malls, retail stores, and other
extending the timeframe for submission benefit lenders by allowing them to
businesses.
of the initial SBA Form 1502 report for On March 27, 2020, the President swiftly close and disburse loans to small
PPP loans. This interim final rule signed the Coronavirus Aid, Relief, and businesses and fulfill associated
supplements SBA’s implementation of Economic Security Act (the CARES Act reporting requirements. Advance notice
the Act and requests public comment. or the Act) (Pub. L. 116–136) to provide and public comment would defeat the
DATES: emergency assistance and health care purpose of this interim final rule given
Effective date: This rule is effective response for individuals, families, and the existing May 22, 2020 deadline for
May 26, 2020. businesses affected by the coronavirus lenders to submit the initial SBA Form
Comment date: Comments must be pandemic. The Small Business 1502 report for PPP loans, which this
received on or before June 25, 2020. Administration (SBA) received funding interim final rule extends to the later of
and authority through the Act to modify (1) May 29, 2020; or (2) 10 calendar days
ADDRESSES: You may submit comments,
identified by number SBA–2020–0031 existing loan programs and establish a 1 https://www.sba.gov/sites/default/files/2020-05/
through the Federal eRulemaking Portal: new loan program to assist small Paycheck-Protection-Program-Frequently-Asked-
http://www.regulations.gov. Follow the businesses nationwide adversely Questions_05%2013%2020_2.pdf.
instructions for submitting comments. impacted by the COVID–19 emergency. 2 Id.
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31358 Federal Register / Vol. 85, No. 101 / Tuesday, May 26, 2020 / Rules and Regulations
after disbursement or cancellation of a made the required certification in good PPP loan disbursements (the May 4
PPP loan. These same reasons provide faith. On May 5, 2020, SBA, in Interim Final Rule), as amended by the
good cause for SBA to dispense with the consultation with the Department of the interim final rule that SBA posted on its
30-day delayed effective date provided Treasury, issued additional guidance to website on May 8, 2020 (the May 8
in the Administrative Procedure Act. extend the safe harbor deadline from Interim Final Rule). Specifically, Part
Although this interim final rule is May 7, 2020 to May 14, 2020. See FAQ III.1.b. of the May 4 Interim Final Rule
effective immediately, comments are 43 (posted May 5, 2020) and SBA’s provided that lenders must
solicited from interested members of the interim final rule on Extension of electronically upload SBA Form 1502
public on all aspects of the interim final Limited Safe Harbor with Respect to reporting information within 20
rule, including section III below. These Certification Concerning Need for PPP calendar days after a PPP loan is
comments must be submitted on or Loan Request, posted May 8, 2020, and approved or, for loans approved before
before June 25, 2020. SBA will consider published in the Federal Register on the availability of the updated SBA
these comments and the need for May 19, 2020 (85 FR 29845). SBA, in Form 1502 reporting process, by May
making any revisions as a result of these consultation with the Department of the 18, 2020. 85 FR 26321, 26323. The May
comments. Treasury, issued additional guidance on 8 Interim Final Rule extended the
May 13, 2020 concerning how SBA will deadline for the submission of the
III. Paycheck Protection Program review the required good-faith initial SBA Form 1502 reporting
Requirements for Second Extension of certification to help PPP borrowers information from May 18, 2020 to May
Limited Safe Harbor With Respect to evaluate whether they may have 22, 2020 because of the extension of the
Certification Concerning Need for PPP misunderstood or misapplied the safe harbor deadline to May 14, 2020.
Loan Request and Lender Reporting statutory certification standard. See Because of the extension of the safe
Overview FAQ 46 (posted May 13, 2020). This harbor deadline from May 14, 2020 to
guidance included an additional safe May 18, 2020 and to promote the
The CARES Act was enacted to harbor providing that any PPP borrower, administrability of the PPP, SBA is
provide immediate assistance to together with its affiliates, that received further extending the timelines for
individuals, families, and organizations PPP loans with an original principal reporting Form 1502 information, such
affected by the COVID–19 emergency. amount of less than $2 million will be that lenders must electronically upload
Among the provisions contained in the deemed to have made the required SBA Form 1502 reporting information
CARES Act are provisions authorizing certification concerning the necessity of by the later of: (1) May 29, 2020, or (2)
SBA to temporarily guarantee loans the loan request in good faith. Based on 10 calendar days after disbursement or
under the Paycheck Protection Program this guidance, SBA, in consultation with cancellation of a PPP loan.
(PPP). Loans under the PPP are 100 the Department of the Treasury, As noted in the May 4 Interim Final
percent guaranteed by SBA, and the full determined that it is necessary and Rule, lenders must disburse PPP loans
principal amount of the loans and any appropriate to further extend the safe within 10 calendar days of loan
accrued interest may qualify for loan harbor deadline for repaying PPP loans approval; a loan is considered approved
forgiveness. Additional information from May 14, 2020 to May 18, 2020. See when the loan is assigned a loan
about the PPP is available in interim FAQ 47 (posted May 13, 2020). number by the SBA. Loans for which
final rules published by SBA and the Second Extension of Limited Safe funds have not been disbursed because
Department of the Treasury in the Harbor with Respect to Good-Faith a borrower has not submitted required
Federal Register (85 FR 20811, 85 FR Certification Concerning Need for PPP loan documentation within 20 calendar
20817, 85 FR 21747, 85 FR 23450, 85 FR Loan Request. Consistent with section days of loan approval shall be cancelled
23917, 85 FR 26321, 85 FR 26324, 85 FR 1102 of the CARES Act, the Borrower by the lender. These two requirements
27287, 85 FR 29845, 85 FR 29842, 85 FR Application Form requires PPP remain unchanged.
29847, and 85 FR 30835) (collectively, applicants to certify in good faith that The extension of the safe harbor and
the PPP Interim Final Rules). ‘‘[c]urrent economic uncertainty makes administrative convenience also require
1. Second Extension of Limited Safe this loan request necessary to support an identical corresponding date change
Harbor With Respect to Certification the ongoing operations of the to the interim final rule that SBA posted
Concerning Need for PPP Loan Request Applicant.’’ Any borrower that applied on May 13, 2020, regarding PPP loan
for a PPP loan and repays the loan in increases. Specifically, that interim final
The Act requires each applicant full by May 18, 2020 will be deemed by rule states, in Parts III and III.2.b., that
applying for a PPP loan to certify in SBA to have made the required SBA Form 1502 reporting information is
good faith ‘‘that the uncertainty of certification in good faith. The required to be submitted within 20
current economic conditions makes Administrator, in consultation with the calendar days after a PPP loan is
necessary the loan request to support Secretary, determined that this safe approved or, for loans approved before
the ongoing obligations’’ of the harbor is necessary and appropriate to availability of the updated SBA Form
applicant. On April 24, 2020, SBA ensure that borrowers promptly repay 1502 reporting process, by May 22,
posted on its website an interim final PPP loan funds that the borrower 2020. As described above, SBA is
rule (the Fourth PPP Interim Final obtained based on a misunderstanding further extending timelines for reporting
Rule), which also was published in the or misapplication of the statutory Form 1502 information, such that
Federal Register on April 28, 2020 (85 certification standard. lenders must electronically upload SBA
FR 23450), to provide relief to PPP Form 1502 reporting information by the
borrowers that applied for and received 2. Lender Reporting later of: (1) May 29, 2020, or (2) 10
PPP loans based on a misunderstanding The extension of the safe harbor and calendar days after disbursement or
or misapplication of the required good- administrative convenience necessitate cancellation of a PPP loan.
faith certification standard. The Fourth a corresponding date change to the The Administrator, in consultation
PPP Interim Final Rule provides that interim final rule that SBA posted on its with the Secretary, believes that
any borrower that applied for a PPP loan website on April 28, 2020, which was clarifying timelines for lender reporting
and repays the loan in full by May 7, published in the Federal Register on will enable lenders to swiftly close and
2020, will be deemed by SBA to have May 4, 2020 (85 FR 26321), regarding disburse loans and will enhance the
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Federal Register / Vol. 85, No. 101 / Tuesday, May 26, 2020 / Rules and Regulations 31359
administrability of key program Regulatory Flexibility Act (RFA) 9. Accordingly, SBA is not required to
components by enabling lenders and conduct a regulatory flexibility analysis.
SBA to process data regarding loan The Regulatory Flexibility Act (RFA)
generally requires that when an agency Jovita Carranza,
disbursements and cancelations in a
streamlined manner. issues a proposed rule, or a final rule Administrator.
pursuant to section 553(b) of the APA or [FR Doc. 2020–11292 Filed 5–22–20; 8:45 am]
Additional Information another law, the agency must prepare a BILLING CODE P
SBA may provide further guidance, if regulatory flexibility analysis that meets
needed, through SBA notices that will the requirements of the RFA and
be posted on SBA’s website at publish such analysis in the Federal DEPARTMENT OF TRANSPORTATION
www.sba.gov. Questions on the Register. 5 U.S.C. 603, 604. Specifically,
Paycheck Protection Program may be the RFA normally requires agencies to Federal Aviation Administration
directed to the Lender Relations describe the impact of a rulemaking on
Specialist in the local SBA Field Office. 14 CFR Part 39
small entities by providing a regulatory
The local SBA Field Office may be
impact analysis. Such analysis must [Docket No. FAA–2020–0064; Project
found at https://www.sba.gov/tools/
local-assistance/districtoffices. address the consideration of regulatory Identifier 2019–SW–096–AD; Amendment
options that would lessen the economic 39–21132; AD 2020–11–07]
Compliance With Executive Orders effect of the rule on small entities. The RIN 2120–AA64
12866, 12988, 13132, 13563, and 13771, RFA defines a ‘‘small entity’’ as (1) a
the Paperwork Reduction Act (44 proprietary firm meeting the size Airworthiness Directives; MD
U.S.C. Ch. 35), and the Regulatory standards of the Small Business Helicopter Inc., Helicopters
Flexibility Act (5 U.S.C. 601–612) Administration (SBA); (2) a nonprofit
AGENCY: Federal Aviation
Executive Orders 12866, 13563, and organization that is not dominant in its Administration (FAA), DOT.
13771 field; or (3) a small government
ACTION: Final rule.
This interim final rule is jurisdiction with a population of less
economically significant for the than 50,000. 5 U.S.C. 601(3)–(6). Except SUMMARY: The FAA is adopting a new
purposes of Executive Orders 12866 and for such small government jurisdictions, airworthiness directive (AD) for MD
13563, and is considered a major rule neither State nor local governments are Helicopters Inc., (MDHI) Model 369D,
under the Congressional Review Act. ‘‘small entities.’’ Similarly, for purposes 369E, 369FF, 369H, 369HE, 369HM,
SBA, however, is proceeding under the of the RFA, individual persons are not 369HS, 500N, and 600N helicopters.
emergency provision at Executive Order small entities. The requirement to This AD was prompted by a report of
12866 Section 6(a)(3)(D), and the good conduct a regulatory impact analysis non-conforming main rotor (M/R) hub
cause exemption under 5 U.S.C. 809(2), does not apply if the head of the agency lead-lag bolts (bolts). This AD requires
based on the need to move ‘‘certifies that the rule will not, if removing certain bolts from service. The
expeditiously to mitigate the current promulgated, have a significant FAA is issuing this AD to address the
economic conditions arising from the economic impact on a substantial unsafe condition on these products.
COVID–19 emergency. This rule’s number of small entities.’’ 5 U.S.C. DATES: This AD is effective June 30,
designation under Executive Order 605(b). The agency must, however, 2020.
13771 will be informed by public publish the certification in the Federal The Director of the Federal Register
comment. Register at the time of publication of the approved the incorporation by reference
Executive Order 12988 rule, ‘‘along with a statement providing of certain publications listed in this AD
the factual basis for such certification.’’ as of June 30, 2020.
SBA has drafted this rule, to the
extent practicable, in accordance with If the agency head has not waived the ADDRESSES: For service information
the standards set forth in section 3(a) requirements for a regulatory flexibility identified in this final rule, contact MD
and 3(b)(2) of Executive Order 12988, to analysis in accordance with the RFA’s Helicopters, Inc., Attn: Customer
minimize litigation, eliminate waiver provision, and no other RFA Support Division, 4555 E. McDowell
ambiguity, and reduce burden. The rule exception applies, the agency must Rd., Mail Stop M615, Mesa, AZ 85215–
has no preemptive or retroactive effect. prepare the regulatory flexibility 9734; telephone 1–800–388–3378; fax
analysis and publish it in the Federal 480–346–6813; or at https://
Executive Order 13132 www.mdhelicopters.com. You may view
Register at the time of promulgation or,
SBA has determined that this rule if the rule is promulgated in response to this service information at the FAA,
will not have substantial direct effects an emergency that makes timely Office of the Regional Counsel,
on the States, on the relationship compliance impracticable, within 180 Southwest Region, 10101 Hillwood
between the National Government and Pkwy, Room 6N–321, Fort Worth, TX
days of publication of the final rule. 5
the States, or on the distribution of 76177. For information on the
U.S.C. 604(a), 608(b). Rules that are
power and responsibilities among the availability of this material at the FAA,
exempt from notice and comment are call 817–222–5110. It is also available
various layers of government. Therefore,
also exempt from the RFA requirements, on the internet at http://
SBA has determined that this rule has
including conducting a regulatory www.regulations.gov by searching for
no federalism implications warranting
preparation of a federalism assessment. flexibility analysis, when among other and locating Docket No. FAA–2020–
things the agency for good cause finds 0064.
Paperwork Reduction Act, 44 U.S.C. that notice and public procedure are
Chapter 35 impracticable, unnecessary, or contrary Examining the AD Docket
SBA has determined that this rule to the public interest. SBA Office of You may examine the AD docket on
will not impose new or modify existing Advocacy guide: How to Comply with the internet at https://
recordkeeping or reporting requirements the Regulatory Flexibility Act, Ch. 1. p. www.regulations.gov by searching for
under the Paperwork Reduction Act. and locating Docket No. FAA–2020–
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