Small Business Administration Business Loan Program Temporary Changes; Paycheck Protection Program-Additional Criterion for Seasonal Employers, 23917-23919 [2020-09239]
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Federal Register / Vol. 85, No. 84 / Thursday, April 30, 2020 / Rules and Regulations
D. Assessment of Federal Regulations
and Policies on Families
The NCUA has determined that this
final rule will not affect family wellbeing within the meaning of Section 54
of the Treasury and General
Government Appropriations Act of
1999.
E. Small Business Regulatory
Enforcement Fairness Act
The Small Business Regulatory
Enforcement Fairness Act of 1996
(SBREFA) generally provides for
congressional review of agency rules. A
reporting requirement is triggered in
instances where the NCUA issues a final
rule as defined by section 551 of the
Administrative Procedure Act. An
agency rule, in addition to being subject
to congressional oversight, may also be
subject to a delayed effective date if the
rule is a ‘‘major rule.’’ The NCUA does
not believe this rule is a ‘‘major rule’’
within the meaning of the relevant
sections of SBREFA. As required by
SBREFA, the NCUA has submitted this
final rule to the OMB for it to determine
if the final rule is a ‘‘major rule’’ for
purposes of SBREFA. The NCUA also
will file appropriate reports with
Congress and the Government
Accountability Office so this rule may
be reviewed.
List of Subjects in 12 CFR Part 722
Appraisal, Appraiser, Credit unions,
Mortgages, Reporting and recordkeeping
requirements, Truth in lending.
By the National Credit Union
Administration Board on April 16, 2020.
Gerard Poliquin,
Secretary of the Board.
2. Amend § 722.3 by:
a. Revising paragraphs (b)(2) and
(c)(1); and
■ b. Removing paragraph (f).
The revisions read as follows:
■
■
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[FR Doc. 2020–08433 Filed 4–29–20; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF THE TREASURY
13 CFR Part 120
Small Business Administration
Business Loan Program Temporary
Changes; Paycheck Protection
Program—Additional Criterion for
Seasonal Employers
U.S. Department of the
Treasury.
ACTION: Interim final rule.
Authority: 12 U.S.C. 1766, 1789, and 3331
et seq. Section 722.3(a) is also issued under
15 U.S.C. 1639h.
§ 722.3 Appraisals and written estimates
of market value requirements for real
estate-related financial transactions.
*
*
*
*
(b) * * *
(2) The transaction is complex,
involves a residential real estate
transaction, and $400,000 or more of the
Jkt 250001
*
*
*
*
(c) Be subject to appropriate review
for compliance with the Uniform
Standards of Professional Appraisal
Practice.
*
*
*
*
*
AGENCY:
1. The authority citation for part 722
continues to read as follows:
■
16:15 Apr 29, 2020
Minimum appraisal standards.
*
RIN 1505–AC67
PART 722—APPRAISALS
VerDate Sep<11>2014
§ 722.4
[Docket Number TREAS–DO–2020–0009]
For the reasons discussed above, the
NCUA Board amends 12 CFR part 722
as follows:
*
transaction value is not insured or
guaranteed by a United States
government agency or United States
government sponsored agency.
(c) * * * (1) An appraisal performed
by a state-certified appraiser or a statelicensed appraiser is required for any
real estate-related financial transaction
not exempt under paragraph (a) of this
section in which the transaction is not
complex, involves a residential real
estate transaction, and $400,000 or more
of the transaction value is not insured
or guaranteed by a United States
government agency or United States
government sponsored agency.
*
*
*
*
*
■ 3. Amend § 722.4 by:
■ a. Redesignating paragraphs (c), (d),
and (e) as (d), (e), and (f), respectively;
■ b. Adding a new paragraph (c); and
■ c. In newly designated paragraph (e)
removing the text ‘‘§ 722.2(f)’’ and
adding in its place the text ‘‘§ 722.2’’.
The addition reads as follows:
SUMMARY: The Coronavirus Aid, Relief,
and Economic Security Act (the CARES
Act or the Act) authorizes the U.S.
Department of the Treasury (Treasury)
to issue regulations for the Paycheck
Protection Program (PPP) administered
by the Small Business Administration
(SBA), including regulations that allow
additional lenders to originate loans and
establish terms and conditions. In this
interim final rule, Treasury authorizes
all lenders eligible to originate loans
under the PPP to use an alternative
criterion for calculating the maximum
loan amount for PPP loans issued to
seasonal employers.
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23917
DATES:
Effective Date: This rule is effective
April 30, 2020.
Comment Date: Comments must be
received on or before June 1, 2020.
ADDRESSES: You may submit comments,
identified by number TREAS–DO–
2020–0009 through the Federal
eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Treasury will post all comments on
www.regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.regulations.gov, please
highlight the information that you
consider to be CBI and explain why you
believe Treasury should hold this
information as confidential. Treasury
will review the information and make
the final determination whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT:
Jonathan Greenstein, Office of Domestic
Finance, 202–622–1408;
Jonathan.Greenstein@Treasury.gov.
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 27, 2020, the President
signed the CARES Act, Public Law 116–
136, to provide emergency assistance
and health care response for
individuals, families, and businesses
affected by the coronavirus pandemic.
Section 1102 of the Act establishes the
PPP as a temporary addition to the
SBA’s 7(a) loan program. The PPP is
designed to assist small businesses
nationwide adversely impacted by the
coronavirus pandemic. SBA has
published information about the PPP in
interim final rules available at 85 FR
20811 (April 15, 2020); 85 FR 20817
(April 15, 2020); 85 FR 21747 (April 20,
2020); and 85 FR 23450 (April 28, 2020).
Section 1109(b) of the Act authorizes
Treasury to establish criteria for insured
depository institutions, insured credit
unions, institutions of the Farm Credit
System chartered under the Farm Credit
Act of 1971 (12 U.S.C. 2001 et seq.), and
other lenders to participate in the PPP.
The SBA is required to administer the
program that Treasury establishes under
section 1109 of the Act, with guidance
from Treasury.
The Act authorizes Treasury to issue
regulations and guidance to implement
section 1109, including regulations that
establish ‘‘terms and conditions’’ for
PPP loans. See Section 1109(d)(2). The
terms and conditions established by
Treasury under section 1109 are not
required to be identical to those set forth
in section 1102. However, the Act
requires that terms and conditions that
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23918
Federal Register / Vol. 85, No. 84 / Thursday, April 30, 2020 / Rules and Regulations
Treasury establishes under section 1109
pertaining to certain criteria—the
maximum interest rate, maximum loan
amount, and other specified terms—
must be ‘‘consistent,’’ to ‘‘the maximum
extent practicable,’’ with those set forth
in section 1102. See Section 1109(d)(2).
In this rulemaking, Treasury is
addressing the needs of certain potential
borrowers that are seasonal employers
by allowing seasonal employers to use
an alternative base period for purposes
of calculating the loan amount for
which they are eligible under the PPP.
Section 1102 of the Act permits seasonal
employers to calculate their maximum
loan amount by using their monthly
average payments for payroll during
‘‘the 12-week period beginning February
15, 2019, or at the election of the
eligible [borrower], March 1, 2019, and
ending June 30, 2019.’’ Some seasonal
employers, however, have seasons that
occur later in the year. Without the
ability to use an alternative base period,
many summer seasonal businesses
would be unable to obtain funding on
terms commensurate with those
available to winter and spring seasonal
businesses. This interim final rule
addresses that disparity and ensures
consistency in program administration
by providing a seasonal employer the
option of using any consecutive 12week period between May 1, 2019 and
September 15, 2019 for determining its
maximum loan amount.
As required by section 1109(d)(2)(B),
Treasury has determined that this
alternative period for seasonal
employers is, to the ‘‘maximum extent
practicable,’’ consistent with the terms
applicable to the PPP in general. In
section 1102, Congress gave seasonal
employers the option to calculate their
maximum loan amount using alternative
base periods. By permitting seasonal
employers to calculate the maximum
loan amount using any consecutive 12
weeks within a specified 4.5-month
period, this interim final rule ensures
that seasonal employers affected by the
pandemic are treated even-handedly.
Other than this adjustment, the terms
and requirements applicable to PPP
loans under this rule are identical to the
terms and requirements that section
1102 and SBA regulations impose on
other PPP loans. As a result, a seasonal
borrower that elects to use the
alternative timing criterion under this
interim final rule may follow the same
processes and procedures applicable to
other PPP loans.
II. Comments and Immediate Effective
Date
Congress intended that the PPP
provide relief to America’s small
VerDate Sep<11>2014
16:15 Apr 29, 2020
Jkt 250001
businesses expeditiously. Given this
intent and the dramatic decrease in
economic activity nationwide, there is
good cause for Treasury to dispense
with the 30-day delayed effective date
provided in the Administrative
Procedure Act. This interim final rule
provides an alternative criterion for
calculating the maximum loan amount
for PPP loans issued to seasonal
employers. Seasonal employers need
timely additional guidance concerning
the maximum loan available under the
interim final rule because the last day to
apply for and receive a loan is June 30,
2020. The immediate effective date of
this interim final rule will benefit
seasonal employers by providing a full
understanding of loan terms and
conditions. Although this interim final
rule is effective immediately, comments
are solicited from interested members of
the public on all aspects of the interim
final rule, including section III below.
These comments must be submitted on
or before June 1, 2020. Treasury will
consider these comments and the need
for any revisions as a result of these
comments.
III. Paycheck Protection Program—
Alternative Criterion for Seasonal
Employers
Overview
The SBA administers the PPP to
provide immediate assistance to small
businesses affected by the coronavirus
pandemic. Under section 1109 of the
CARES Act, Treasury is authorized to
issue regulations that allow lenders to
originate PPP loans under terms and
conditions established by the Secretary.
Through this interim final rule,
Treasury is exercising its section 1109
authority to address the needs of certain
potential borrowers that are seasonal
employers. The SBA will administer
this rule as part of the PPP, with
guidance from Treasury, until the date
on which the national emergency
declared by the President under the
National Emergencies Act (50 U.S.C.
1601 et seq.) with respect to the
Coronavirus Disease 2019 (COVID–19)
expires. Except as modified in this
interim final rule, PPP regulations,
guidance, forms, and processes apply
fully to PPP loans for seasonal
employers utilizing the base period
calculation option set forth in this rule.
1. General
This interim final rule supplements
the SBA’s rules for the PPP by
establishing an alternative criterion for
calculating the maximum loan amount
for seasonal employers.
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2. What does this interim final rule
apply to?
This rule applies to PPP loans issued
to seasonal employers.
3. How does this rule affect the
calculation of the maximum loan
amount for seasonal employers?
Under section 1102 of the CARES Act,
a seasonal employer may determine its
maximum loan amount for purposes of
the PPP by reference to the employer’
average total monthly payments for
payroll ‘‘the 12-week period beginning
February 15, 2019, or at the election of
the eligible [borrower], March 1, 2019,
and ending June 30, 2019.’’ Under this
interim final rule issued pursuant to
section 1109 of the Act, a seasonal
employer may alternatively elect to
determine its maximum loan amount as
the average total monthly payments for
payroll during any consecutive 12-week
period between May 1, 2019 and
September 15, 2019.
4. If a seasonal business was dormant or
not fully operating as of February 15,
2020, is it still eligible?
Yes, in evaluating eligibility, a
seasonal business will be considered to
have been in operation as of February
15, 2020, if the business was in
operation for any 8-week period
between May 1, 2019 and September 15,
2019. This approach aligns with
guidance previously provided by the
Small Business Administration
concerning other seasonal businesses
under section 1102. See Treasury,
Paycheck Protection Program Loans:
Frequently Asked Questions (FAQs),
FAQ 9 (posted April 6, 2020) (https://
home.treasury.gov/policy-issues/cares/
assistance-for-small-businesses).
6. Are any other SBA rules or guidance
for the PPP affected by Treasury’s
interim final rule?
No. This interim final rule only
provides certain employers with an
alternative means of calculating the
maximum loan amount. All other terms
and conditions in the PPP remain
unchanged. All PPP applicants,
borrowers, and lenders should continue
to use existing SBA forms and follow all
requirements set forth in the CARES Act
and SBA regulations, except for the
alternative approach described above for
calculating the maximum loan amount.
7. What lenders are authorized to offer
terms in Treasury’s interim final rule to
seasonal employers?
All lenders authorized to originate
PPP loans may offer the terms under
this interim final rule to eligible
applicants and borrowers. PPP loans
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Federal Register / Vol. 85, No. 84 / Thursday, April 30, 2020 / Rules and Regulations
under this interim final rule are eligible
for an SBA guarantee to the same extent
as PPP loans based on existing PPP
rules.
Compliance With Executive Orders
12866, 12988, 13132, 13563, and 13771,
the Paperwork Reduction Act (44 U.S.C.
Ch. 35), and the Administrative
Procedure Act (5 U.S.C. 553)
Executive Orders 12866, 13563, and
13771
The Office of Management and Budget
has determined that this interim final
rule is economically significant for the
purposes of Executive Orders 12866 and
13563, and is considered a major rule
under the Congressional Review Act.
Treasury, however, is proceeding under
the emergency provision at Executive
Order 12866 Section 6(a)(3)(D) based on
the need to move expeditiously to
mitigate the current economic
conditions arising from the COVID–19
emergency. This rule’s designation
under Executive Order 13771 will be
informed by public comment.
Executive Order 12988
Treasury has drafted this rule, to the
extent practicable, in accordance with
the standards set forth in section 3(a)
and 3(b)(2) of Executive Order 12988, to
minimize litigation, eliminate
ambiguity, and reduce burden. The rule
has no preemptive or retroactive effect.
Executive Order 13132
Treasury has determined that this rule
will not have substantial direct effects
on the States, on the relationship
between the National Government and
the States, or on the distribution of
power and responsibilities among the
various layers of government. Therefore,
Treasury has determined that this rule
has no federalism implications
warranting preparation of a federalism
assessment.
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Paperwork Reduction Act, 44 U.S.C.
Chapter 35
Treasury has determined that this rule
will not impose new or modify existing
recordkeeping or reporting requirements
under the Paperwork Reduction Act.
Inapplicability of Notice and Delayed
Effective Date
The Administrative Procedure Act
(APA) requirements in 5 U.S.C. 553
govern agency rulemaking procedures.
Section 553(b) of the APA generally
requires notice and public comment
before issuance of a final rule. In
addition, section 553(d) of the APA
requires that a final rule have a 30-day
delayed effective date. The APA,
however, provides exceptions from the
VerDate Sep<11>2014
16:15 Apr 29, 2020
Jkt 250001
prior notice and public comment
requirement and the delayed effective
date requirements, when an agency for
good cause finds that such procedures
are impracticable, unnecessary, or
contrary to the public interest. 5 U.S.C.
553(b)(B), (d)(3). Treasury finds that
prior notice and comment are
impracticable and contrary to the public
interest and that good cause exists to
issue this interim final rule
immediately.
The ongoing unprecedented situation
related to COVID–19 is having a
nationwide impact, as demonstrated by
the declaration of a national emergency
by the President. See Proclamation 9994
of March 13, 2020, 85 FR 15337 (Mar.
18, 2020). The interim final rule
supports seasonal employers affected by
COVID–19 in obtaining PPP loans to
maintain their businesses and keep
people employed. To protect our public
interests during the ongoing national
emergency, Treasury concludes,
pursuant to 5 U.S.C. 553(b)(B), that
there is good cause to dispense with
prior public notice and the opportunity
to comment on this rule before issuing
this interim final rule. For the same
reasons, Treasury has determined,
consistent with section 553(d)(3) of the
APA, that there is good cause to make
this temporary final rule effective
immediately.
Michael Faulkender,
Assistant Secretary for Economic Policy.
[FR Doc. 2020–09239 Filed 4–28–20; 4:15 pm]
BILLING CODE P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Part 1
[Docket No. FDA–2020–D–1304]
Temporary Policy Regarding
Accredited Third-Party Certification
Program Onsite Observation and
Certificate Duration Requirements
During the COVID–19 Public Health
Emergency: Guidance for Industry;
Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notification of availability.
SUMMARY: The Food and Drug
Administration (FDA, Agency, or we) is
announcing the availability of a final
guidance for industry entitled
‘‘Temporary Policy Regarding
Accredited Third-Party Certification
Program Onsite Observation and
PO 00000
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23919
Certificate Duration Requirements
During the COVID–19 Public Health
Emergency.’’ Given the public health
emergency presented by COVID–19, this
guidance document is being
implemented without prior public
comment because FDA has determined
that prior public participation is not
feasible or appropriate, but it remains
subject to comment in accordance with
the Agency’s good guidance practices.
The guidance communicates the
Agency’s intention not to enforce
certain requirements for the onsite
monitoring activities and certificates for
the currently recognized accreditation
bodies (ABs) and accredited third-party
certification bodies (CBs) in the
Accredited Third-Party Certification
Program for human and animal food in
certain circumstances. Because travel
restrictions and advisories related to
COVID–19 may impact the ability of
recognized ABs and accredited CBs to
conduct onsite activities, this guidance
provides temporary flexibility so that
recognized ABs can maintain the
accreditations of their CBs, and so that
already-issued certifications need not
lapse, in certain circumstances.
The announcement of the
guidance is published in the Federal
Register on April 30, 2020.
DATES:
You may submit either
electronic or written comments on
Agency guidances at any time as
follows:
ADDRESSES:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
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]]>Agencies
[Federal Register Volume 85, Number 84 (Thursday, April 30, 2020)]
[Rules and Regulations]
[Pages 23917-23919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09239]
=======================================================================
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DEPARTMENT OF THE TREASURY
13 CFR Part 120
[Docket Number TREAS-DO-2020-0009]
RIN 1505-AC67
Small Business Administration Business Loan Program Temporary
Changes; Paycheck Protection Program--Additional Criterion for Seasonal
Employers
AGENCY: U.S. Department of the Treasury.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: The Coronavirus Aid, Relief, and Economic Security Act (the
CARES Act or the Act) authorizes the U.S. Department of the Treasury
(Treasury) to issue regulations for the Paycheck Protection Program
(PPP) administered by the Small Business Administration (SBA),
including regulations that allow additional lenders to originate loans
and establish terms and conditions. In this interim final rule,
Treasury authorizes all lenders eligible to originate loans under the
PPP to use an alternative criterion for calculating the maximum loan
amount for PPP loans issued to seasonal employers.
DATES:
Effective Date: This rule is effective April 30, 2020.
Comment Date: Comments must be received on or before June 1, 2020.
ADDRESSES: You may submit comments, identified by number TREAS-DO-2020-
0009 through the Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments.
Treasury will post all comments on www.regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.regulations.gov, please highlight the information that
you consider to be CBI and explain why you believe Treasury should hold
this information as confidential. Treasury will review the information
and make the final determination whether it will publish the
information.
FOR FURTHER INFORMATION CONTACT: Jonathan Greenstein, Office of
Domestic Finance, 202-622-1408; [email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 27, 2020, the President signed the CARES Act, Public Law
116-136, to provide emergency assistance and health care response for
individuals, families, and businesses affected by the coronavirus
pandemic. Section 1102 of the Act establishes the PPP as a temporary
addition to the SBA's 7(a) loan program. The PPP is designed to assist
small businesses nationwide adversely impacted by the coronavirus
pandemic. SBA has published information about the PPP in interim final
rules available at 85 FR 20811 (April 15, 2020); 85 FR 20817 (April 15,
2020); 85 FR 21747 (April 20, 2020); and 85 FR 23450 (April 28, 2020).
Section 1109(b) of the Act authorizes Treasury to establish
criteria for insured depository institutions, insured credit unions,
institutions of the Farm Credit System chartered under the Farm Credit
Act of 1971 (12 U.S.C. 2001 et seq.), and other lenders to participate
in the PPP. The SBA is required to administer the program that Treasury
establishes under section 1109 of the Act, with guidance from Treasury.
The Act authorizes Treasury to issue regulations and guidance to
implement section 1109, including regulations that establish ``terms
and conditions'' for PPP loans. See Section 1109(d)(2). The terms and
conditions established by Treasury under section 1109 are not required
to be identical to those set forth in section 1102. However, the Act
requires that terms and conditions that
[[Page 23918]]
Treasury establishes under section 1109 pertaining to certain
criteria--the maximum interest rate, maximum loan amount, and other
specified terms--must be ``consistent,'' to ``the maximum extent
practicable,'' with those set forth in section 1102. See Section
1109(d)(2).
In this rulemaking, Treasury is addressing the needs of certain
potential borrowers that are seasonal employers by allowing seasonal
employers to use an alternative base period for purposes of calculating
the loan amount for which they are eligible under the PPP. Section 1102
of the Act permits seasonal employers to calculate their maximum loan
amount by using their monthly average payments for payroll during ``the
12-week period beginning February 15, 2019, or at the election of the
eligible [borrower], March 1, 2019, and ending June 30, 2019.'' Some
seasonal employers, however, have seasons that occur later in the year.
Without the ability to use an alternative base period, many summer
seasonal businesses would be unable to obtain funding on terms
commensurate with those available to winter and spring seasonal
businesses. This interim final rule addresses that disparity and
ensures consistency in program administration by providing a seasonal
employer the option of using any consecutive 12-week period between May
1, 2019 and September 15, 2019 for determining its maximum loan amount.
As required by section 1109(d)(2)(B), Treasury has determined that
this alternative period for seasonal employers is, to the ``maximum
extent practicable,'' consistent with the terms applicable to the PPP
in general. In section 1102, Congress gave seasonal employers the
option to calculate their maximum loan amount using alternative base
periods. By permitting seasonal employers to calculate the maximum loan
amount using any consecutive 12 weeks within a specified 4.5-month
period, this interim final rule ensures that seasonal employers
affected by the pandemic are treated even-handedly.
Other than this adjustment, the terms and requirements applicable
to PPP loans under this rule are identical to the terms and
requirements that section 1102 and SBA regulations impose on other PPP
loans. As a result, a seasonal borrower that elects to use the
alternative timing criterion under this interim final rule may follow
the same processes and procedures applicable to other PPP loans.
II. Comments and Immediate Effective Date
Congress intended that the PPP provide relief to America's small
businesses expeditiously. Given this intent and the dramatic decrease
in economic activity nationwide, there is good cause for Treasury to
dispense with the 30-day delayed effective date provided in the
Administrative Procedure Act. This interim final rule provides an
alternative criterion for calculating the maximum loan amount for PPP
loans issued to seasonal employers. Seasonal employers need timely
additional guidance concerning the maximum loan available under the
interim final rule because the last day to apply for and receive a loan
is June 30, 2020. The immediate effective date of this interim final
rule will benefit seasonal employers by providing a full understanding
of loan terms and conditions. Although this interim final rule is
effective immediately, comments are solicited from interested members
of the public on all aspects of the interim final rule, including
section III below. These comments must be submitted on or before June
1, 2020. Treasury will consider these comments and the need for any
revisions as a result of these comments.
III. Paycheck Protection Program--Alternative Criterion for Seasonal
Employers
Overview
The SBA administers the PPP to provide immediate assistance to
small businesses affected by the coronavirus pandemic. Under section
1109 of the CARES Act, Treasury is authorized to issue regulations that
allow lenders to originate PPP loans under terms and conditions
established by the Secretary. Through this interim final rule, Treasury
is exercising its section 1109 authority to address the needs of
certain potential borrowers that are seasonal employers. The SBA will
administer this rule as part of the PPP, with guidance from Treasury,
until the date on which the national emergency declared by the
President under the National Emergencies Act (50 U.S.C. 1601 et seq.)
with respect to the Coronavirus Disease 2019 (COVID-19) expires. Except
as modified in this interim final rule, PPP regulations, guidance,
forms, and processes apply fully to PPP loans for seasonal employers
utilizing the base period calculation option set forth in this rule.
1. General
This interim final rule supplements the SBA's rules for the PPP by
establishing an alternative criterion for calculating the maximum loan
amount for seasonal employers.
2. What does this interim final rule apply to?
This rule applies to PPP loans issued to seasonal employers.
3. How does this rule affect the calculation of the maximum loan amount
for seasonal employers?
Under section 1102 of the CARES Act, a seasonal employer may
determine its maximum loan amount for purposes of the PPP by reference
to the employer' average total monthly payments for payroll ``the 12-
week period beginning February 15, 2019, or at the election of the
eligible [borrower], March 1, 2019, and ending June 30, 2019.'' Under
this interim final rule issued pursuant to section 1109 of the Act, a
seasonal employer may alternatively elect to determine its maximum loan
amount as the average total monthly payments for payroll during any
consecutive 12-week period between May 1, 2019 and September 15, 2019.
4. If a seasonal business was dormant or not fully operating as of
February 15, 2020, is it still eligible?
Yes, in evaluating eligibility, a seasonal business will be
considered to have been in operation as of February 15, 2020, if the
business was in operation for any 8-week period between May 1, 2019 and
September 15, 2019. This approach aligns with guidance previously
provided by the Small Business Administration concerning other seasonal
businesses under section 1102. See Treasury, Paycheck Protection
Program Loans: Frequently Asked Questions (FAQs), FAQ 9 (posted April
6, 2020) (https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses).
6. Are any other SBA rules or guidance for the PPP affected by
Treasury's interim final rule?
No. This interim final rule only provides certain employers with an
alternative means of calculating the maximum loan amount. All other
terms and conditions in the PPP remain unchanged. All PPP applicants,
borrowers, and lenders should continue to use existing SBA forms and
follow all requirements set forth in the CARES Act and SBA regulations,
except for the alternative approach described above for calculating the
maximum loan amount.
7. What lenders are authorized to offer terms in Treasury's interim
final rule to seasonal employers?
All lenders authorized to originate PPP loans may offer the terms
under this interim final rule to eligible applicants and borrowers. PPP
loans
[[Page 23919]]
under this interim final rule are eligible for an SBA guarantee to the
same extent as PPP loans based on existing PPP rules.
Compliance With Executive Orders 12866, 12988, 13132, 13563, and 13771,
the Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Administrative
Procedure Act (5 U.S.C. 553)
Executive Orders 12866, 13563, and 13771
The Office of Management and Budget has determined that this
interim final rule is economically significant for the purposes of
Executive Orders 12866 and 13563, and is considered a major rule under
the Congressional Review Act. Treasury, however, is proceeding under
the emergency provision at Executive Order 12866 Section 6(a)(3)(D)
based on the need to move expeditiously to mitigate the current
economic conditions arising from the COVID-19 emergency. This rule's
designation under Executive Order 13771 will be informed by public
comment.
Executive Order 12988
Treasury has drafted this rule, to the extent practicable, in
accordance with the standards set forth in section 3(a) and 3(b)(2) of
Executive Order 12988, to minimize litigation, eliminate ambiguity, and
reduce burden. The rule has no preemptive or retroactive effect.
Executive Order 13132
Treasury has determined that this rule will not have substantial
direct effects on the States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various layers of government. Therefore,
Treasury has determined that this rule has no federalism implications
warranting preparation of a federalism assessment.
Paperwork Reduction Act, 44 U.S.C. Chapter 35
Treasury has determined that this rule will not impose new or
modify existing recordkeeping or reporting requirements under the
Paperwork Reduction Act.
Inapplicability of Notice and Delayed Effective Date
The Administrative Procedure Act (APA) requirements in 5 U.S.C. 553
govern agency rulemaking procedures. Section 553(b) of the APA
generally requires notice and public comment before issuance of a final
rule. In addition, section 553(d) of the APA requires that a final rule
have a 30-day delayed effective date. The APA, however, provides
exceptions from the prior notice and public comment requirement and the
delayed effective date requirements, when an agency for good cause
finds that such procedures are impracticable, unnecessary, or contrary
to the public interest. 5 U.S.C. 553(b)(B), (d)(3). Treasury finds that
prior notice and comment are impracticable and contrary to the public
interest and that good cause exists to issue this interim final rule
immediately.
The ongoing unprecedented situation related to COVID-19 is having a
nationwide impact, as demonstrated by the declaration of a national
emergency by the President. See Proclamation 9994 of March 13, 2020, 85
FR 15337 (Mar. 18, 2020). The interim final rule supports seasonal
employers affected by COVID-19 in obtaining PPP loans to maintain their
businesses and keep people employed. To protect our public interests
during the ongoing national emergency, Treasury concludes, pursuant to
5 U.S.C. 553(b)(B), that there is good cause to dispense with prior
public notice and the opportunity to comment on this rule before
issuing this interim final rule. For the same reasons, Treasury has
determined, consistent with section 553(d)(3) of the APA, that there is
good cause to make this temporary final rule effective immediately.
Michael Faulkender,
Assistant Secretary for Economic Policy.
[FR Doc. 2020-09239 Filed 4-28-20; 4:15 pm]
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