Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements-Extension of Limited Safe Harbor With Respect to Certification Concerning Need for PPP Loan Request, 29845-29847 [2020-10649]
Download as PDF
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations
13563, and is considered a major rule
under the Congressional Review Act.
SBA, 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
SBA 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
SBA 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,
SBA has determined that this rule has
no federalism implications warranting
preparation of a federalism assessment.
Paperwork Reduction Act, 44 U.S.C.
Chapter 35
SBA has determined that this rule
will not impose new or modify existing
recordkeeping or reporting requirements
under the Paperwork Reduction Act.
Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (RFA)
generally requires that when an agency
issues a proposed rule, or a final rule
pursuant to section 553(b) of the APA or
another law, the agency must prepare a
regulatory flexibility analysis that meets
the requirements of the RFA and
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604. Specifically,
the RFA normally requires agencies to
describe the impact of a rulemaking on
small entities by providing a regulatory
impact analysis. Such analysis must
address the consideration of regulatory
options that would lessen the economic
effect of the rule on small entities. The
RFA defines a ‘‘small entity’’ as (1) a
proprietary firm meeting the size
standards of the Small Business
Administration (SBA); (2) a nonprofit
organization that is not dominant in its
field; or (3) a small government
jurisdiction with a population of less
than 50,000. 5 U.S.C. 601(3)–(6). Except
for such small government jurisdictions,
neither State nor local governments are
‘‘small entities.’’ Similarly, for purposes
of the RFA, individual persons are not
VerDate Sep<11>2014
17:20 May 18, 2020
Jkt 250001
small entities. The requirement to
conduct a regulatory impact analysis
does not apply if the head of the agency
‘‘certifies that the rule will not, if
promulgated, have a significant
economic impact on a substantial
number of small entities.’’ 5 U.S.C.
605(b). The agency must, however,
publish the certification in the Federal
Register at the time of publication of the
rule, ‘‘along with a statement providing
the factual basis for such certification.’’
If the agency head has not waived the
requirements for a regulatory flexibility
analysis in accordance with the RFA’s
waiver provision, and no other RFA
exception applies, the agency must
prepare the regulatory flexibility
analysis and publish it in the Federal
Register at the time of promulgation or,
if the rule is promulgated in response to
an emergency that makes timely
compliance impracticable, within 180
days of publication of the final rule. 5
U.S.C. 604(a), 608(b). Rules that are
exempt from notice and comment are
also exempt from the RFA requirements,
including conducting a regulatory
flexibility analysis, when among other
things the agency for good cause finds
that notice and public procedure are
impracticable, unnecessary, or contrary
to the public interest. SBA Office of
Advocacy guide: How to Comply with
the Regulatory Flexibility Act, Ch.1. p.9.
Accordingly, SBA is not required to
conduct a regulatory flexibility analysis.
Jovita Carranza,
Administrator.
[FR Doc. 2020–10658 Filed 5–18–20; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
[Docket Number SBA–2020–0026]
RIN 3245–AH41
Business Loan Program Temporary
Changes; Paycheck Protection
Program—Requirements—Extension
of Limited Safe Harbor With Respect to
Certification Concerning Need for PPP
Loan Request
U.S. Small Business
Administration.
ACTION: Interim final rule.
AGENCY:
On April 24, 2020, the U.S.
Small Business Administration (SBA)
posted an interim final rule relating to
promissory notes, authorizations,
affiliation, and eligibility in connection
with the implementation of a temporary
new program, titled the ‘‘Paycheck
Protection Program.’’ The Paycheck
SUMMARY:
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
29845
Protection Program was established
under the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act or
the Act). This interim final rule revises
the interim final rule posted on April
24, 2020, by extending the date by
which certain Paycheck Protection
Program borrowers may repay their
loans from May 7, 2020 to May 14, 2020,
in order to avail themselves of a safe
harbor with respect to a certification
required by the Act, and makes other
conforming changes. This interim final
rule supplements SBA’s implementation
of the Act and requests public comment.
DATES:
Effective date: This rule is effective
May 19, 2020.
Applicability date: This interim final
rule applies to borrowers who applied
for loans under the Paycheck Protection
Program.
Comment date: Comments must be
received on or before June 18, 2020.
ADDRESSES: You may submit comments,
identified by number SBA–2020–0026
through the Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
SBA 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
send an email to ppp-ifr@sba.gov.
Highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT: A
Call Center Representative at 833–572–
0502, or the local SBA Field Office; the
list of offices can be found at https://
www.sba.gov/tools/local-assistance/
districtoffices.
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 13, 2020, President Trump
declared the ongoing Coronavirus
Disease 2019 (COVID–19) pandemic of
sufficient severity and magnitude to
warrant an emergency declaration for all
States, territories, and the District of
Columbia. With the COVID–19
emergency, many small businesses
nationwide are experiencing economic
hardship as a direct result of the
Federal, State, tribal, and local public
health measures that are being taken to
minimize the public’s exposure to the
virus. These measures, some of which
are government-mandated, are being
implemented nationwide and include
the closures of restaurants, bars, and
E:\FR\FM\19MYR1.SGM
19MYR1
29846
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations
gyms. In addition, based on the advice
of public health officials, other
measures, such as keeping a safe
distance from others or even stay-athome orders, are being implemented,
resulting in a dramatic decrease in
economic activity as the public avoids
malls, retail stores, and other
businesses.
On March 27, 2020, the President
signed the Coronavirus Aid, Relief, and
Economic Security Act (the CARES Act
or the Act) (Pub. L. 116–136) to provide
emergency assistance and health care
response for individuals, families, and
businesses affected by the coronavirus
pandemic. The Small Business
Administration (SBA) received funding
and authority through the Act to modify
existing loan programs and establish a
new loan program to assist small
businesses nationwide adversely
impacted by the COVID–19 emergency.
Section 1102 of the Act temporarily
permits SBA to guarantee 100 percent of
7(a) loans under a new program titled
the ‘‘Paycheck Protection Program.’’
Section 1106 of the Act provides for
forgiveness of up to the full principal
amount of qualifying loans guaranteed
under the Paycheck Protection Program.
On April 24, 2020, the President signed
the Paycheck Protection Program and
Health Care Enhancement Act (Pub. L.
116–139), which provided additional
funding and authority for the PPP.
II. Comments and Immediate Effective
Date
This interim final rule is effective
without advance notice and public
comment because section 1114 of the
Act authorizes SBA to issue regulations
to implement Title I of the Act without
regard to notice requirements. In
addition, SBA has determined that there
is good cause for dispensing with
advance public notice and comment on
the ground that it would be contrary to
the public interest. Specifically, SBA, in
consultation with the Department of the
Treasury, intends to issue additional
guidance with regard to the safe harbor
and extending the safe harbor deadline
from May 7 to May 14 will afford
Paycheck Protection Program borrowers
time to review the forthcoming SBA
guidance and decide whether to avail
themselves of the safe harbor. SBA
previously announced this intended
extension in nonbinding guidance
published on May 5, 2020. Advance
notice and public comment would
defeat the purpose of this interim final
rule given the timeline for the existing
safe harbor and short-term, temporary
nature of this program. These same
reasons provide good cause for SBA to
dispense with the 30-day delayed
VerDate Sep<11>2014
17:20 May 18, 2020
Jkt 250001
effective date provided in the
Administrative Procedure Act.
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 18, 2020. SBA will consider
these comments and the need for
making any revisions as a result of these
comments.
III. Paycheck Protection Program
Requirements for Extension of Safe
Harbor With Respect to Certification
Concerning Need for PPP Loan Request
The CARES Act was enacted to
provide immediate assistance to
individuals, families, and organizations
affected by the COVID–19 emergency.
Among the provisions contained in the
CARES Act are provisions authorizing
SBA to temporarily guarantee loans
under the Paycheck Protection Program
(PPP). Loans under the PPP are 100
percent guaranteed by SBA, and the full
principal amount of the loans and any
accrued interest may qualify for loan
forgiveness. The Act requires each
applicant applying for a PPP loan to
certify ‘‘that the uncertainty of current
economic conditions makes necessary
the loan request to support the ongoing
obligations’’ of the applicant. On April
24, 2020, SBA posted on its website an
interim final rule (the Fourth PPP
Interim Final Rule), which also was
published in the Federal Register on
April 28, 2020 (85 FR 23450), to provide
relief to PPP borrowers who applied for
and received PPP loans based on a
misunderstanding or misapplication of
the required certification standard. The
Fourth PPP Interim Final Rule provides
that any borrower that applied for a PPP
loan and repays the loan in full by May
7, 2020, will be deemed by SBA to have
made the required certification in good
faith. SBA, in consultation with the
Department of the Treasury, will issue
additional guidance before May 14,
2020 concerning how SBA will review
the required certification to help PPP
borrowers evaluate whether they may
have misunderstood or misapplied the
statutory certification standard.1 Based
on this upcoming guidance, SBA, in
consultation with the Department of the
Treasury, determined that it is necessary
and appropriate to extend the safe
harbor deadline for repaying PPP loans
from May 7, 2020 to May 14, 2020.
1 This guidance is available at https://
www.sba.gov/sites/default/files/2020-05/PaycheckProtection-Program-Frequently-Asked-Questions_
05%2013%2020_2.pdf.
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
Limited Safe Harbor With Respect to
Certification Concerning Need for PPP
Loan Request
Consistent with section 1102 of the
CARES Act, the Borrower Application
Form requires PPP applicants to certify
that ‘‘[c]urrent economic uncertainty
makes this loan request necessary to
support the ongoing operations of the
Applicant.’’ Any borrower that applied
for a PPP loan and repays the loan in
full by May 14, 2020 will be deemed by
SBA to have made the required
certification in good faith. The
Administrator, in consultation with the
Secretary, determined that this safe
harbor is necessary and appropriate to
ensure that borrowers promptly repay
PPP loan funds that the borrower
obtained based on a misunderstanding
or misapplication of the required
certification standard.
The extension of the safe harbor
requires a corresponding date change to
the interim final rule that SBA posted
on its website on April 28, 2020, which
was published in the Federal Register
on May 4, 2020 (85 FR 26321), regarding
PPP loan disbursements. Specifically,
Part III.1.b. provides that Lenders must
electronically upload SBA Form 1502
information within 20 calendar days
after a PPP loan is approved or, for loans
approved before the availability of the
updated SBA Form 1502 reporting
process, by May 18, 2020. 85 FR 26321,
26323. Because of the extension of the
safe harbor deadline, SBA is extending
the deadline for the submission of the
initial SBA Form 1502 from May 18,
2020 to May 22, 2020.
Additional Information
SBA may provide further guidance, if
needed, through SBA notices that will
be posted on SBA’s website at
www.sba.gov. Questions on the
Paycheck Protection Program may be
directed to the Lender Relations
Specialist in the local SBA Field Office.
The local SBA Field Office may be
found at https://www.sba.gov/tools/
local-assistance/districtoffices.
Compliance With Executive Orders
12866, 12988, 13132, 13563, and 13771,
the Paperwork Reduction Act (44 U.S.C.
Ch. 35), and the Regulatory Flexibility
Act (5 U.S.C. 601–612).
Executive Orders 12866, 13563, and
13771
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.
SBA, however, is proceeding under the
emergency provision at Executive Order
E:\FR\FM\19MYR1.SGM
19MYR1
Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations
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
SBA 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
SBA 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,
SBA has determined that this rule has
no federalism implications warranting
preparation of a federalism assessment.
Paperwork Reduction Act, 44 U.S.C.
Chapter 35
SBA has determined that this rule
will not impose new or modify existing
recordkeeping or reporting requirements
under the Paperwork Reduction Act.
Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (RFA)
generally requires that when an agency
issues a proposed rule, or a final rule
pursuant to section 553(b) of the APA or
another law, the agency must prepare a
regulatory flexibility analysis that meets
the requirements of the RFA and
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604. Specifically,
the RFA normally requires agencies to
describe the impact of a rulemaking on
small entities by providing a regulatory
impact analysis. Such analysis must
address the consideration of regulatory
options that would lessen the economic
effect of the rule on small entities. The
RFA defines a ‘‘small entity’’ as (1) a
proprietary firm meeting the size
standards of the Small Business
Administration (SBA); (2) a nonprofit
organization that is not dominant in its
field; or (3) a small government
jurisdiction with a population of less
than 50,000. 5 U.S.C. 601(3)–(6). Except
for such small government jurisdictions,
neither State nor local governments are
‘‘small entities.’’ Similarly, for purposes
of the RFA, individual persons are not
small entities. The requirement to
conduct a regulatory impact analysis
does not apply if the head of the agency
‘‘certifies that the rule will not, if
VerDate Sep<11>2014
17:20 May 18, 2020
Jkt 250001
promulgated, have a significant
economic impact on a substantial
number of small entities.’’ 5 U.S.C.
605(b). The agency must, however,
publish the certification in the Federal
Register at the time of publication of the
rule, ‘‘along with a statement providing
the factual basis for such certification.’’
If the agency head has not waived the
requirements for a regulatory flexibility
analysis in accordance with the RFA’s
waiver provision, and no other RFA
exception applies, the agency must
prepare the regulatory flexibility
analysis and publish it in the Federal
Register at the time of promulgation or,
if the rule is promulgated in response to
an emergency that makes timely
compliance impracticable, within 180
days of publication of the final rule. 5
U.S.C. 604(a), 608(b). Rules that are
exempt from notice and comment are
also exempt from the RFA requirements,
including conducting a regulatory
flexibility analysis, when among other
things the agency for good cause finds
that notice and public procedure are
impracticable, unnecessary, or contrary
to the public interest. SBA Office of
Advocacy guide: How to Comply with
the Regulatory Flexibility Act, Ch.1. p.9.
Accordingly, SBA is not required to
conduct a regulatory flexibility analysis.
Jovita Carranza,
Administrator.
[FR Doc. 2020–10649 Filed 5–18–20; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 120 and 121
[Docket Number SBA–2020–0029]
RIN 3245–AH43
Business Loan Program Temporary
Changes; Paycheck Protection
Program—Eligibility of Certain Electric
Cooperatives
U.S. Small Business
Administration.
ACTION: Interim final rule.
AGENCY:
On April 2, 2020, the U.S.
Small Business Administration (SBA)
posted an interim final rule announcing
the implementation of the Coronavirus
Aid, Relief, and Economic Security Act
(CARES Act). The CARES Act
temporarily adds a new program, titled
the ‘‘Paycheck Protection Program,’’ to
the SBA’s 7(a) Loan Program. The
CARES Act also provides for forgiveness
of up to the full principal amount of
qualifying loans guaranteed under the
Paycheck Protection Program (PPP). The
PPP is intended to provide economic
SUMMARY:
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
29847
relief to small businesses nationwide
adversely impacted by the Coronavirus
Disease 2019 (COVID–19). SBA posted
additional interim final rules on April 3,
2020, April 14, 2020, April 24, 2020,
April 28, 2020, April 30, 2020, May 5,
2020, and May 8, 2020, and the
Department of the Treasury posted an
additional interim final rule on April
28, 2020. This interim final rule
supplements the previously posted
interim final rules by providing
guidance on additional eligibility
requirements for certain electric
cooperatives, and requests public
comment.
DATES:
Effective date: This rule is effective
May 19, 2020.
Applicability date: This interim final
rule applies to applications submitted
under the Paycheck Protection Program
through June 30, 2020, or until funds
made available for this purpose are
exhausted.
Comment date: Comments must be
received on or before June 18, 2020.
ADDRESSES: You may submit comments,
identified by number SBA–2020–0029
through the Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
SBA 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
send an email to ppp-ifr@sba.gov.
Highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT: A
Call Center Representative at 833–572–
0502, or the local SBA Field Office; the
list of offices can be found at https://
www.sba.gov/tools/local-assistance/
districtoffices.
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 13, 2020, President Trump
declared the ongoing Coronavirus
Disease 2019 (COVID–19) pandemic of
sufficient severity and magnitude to
warrant an emergency declaration for all
States, territories, and the District of
Columbia. With the COVID–19
emergency, many small businesses
nationwide are experiencing economic
hardship as a direct result of the
Federal, State, tribal, and local public
health measures that are being taken to
minimize the public’s exposure to the
virus. These measures, some of which
E:\FR\FM\19MYR1.SGM
19MYR1
Agencies
[Federal Register Volume 85, Number 97 (Tuesday, May 19, 2020)]
[Rules and Regulations]
[Pages 29845-29847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10649]
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
[Docket Number SBA-2020-0026]
RIN 3245-AH41
Business Loan Program Temporary Changes; Paycheck Protection
Program--Requirements--Extension of Limited Safe Harbor With Respect to
Certification Concerning Need for PPP Loan Request
AGENCY: U.S. Small Business Administration.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: On April 24, 2020, the U.S. Small Business Administration
(SBA) posted an interim final rule relating to promissory notes,
authorizations, affiliation, and eligibility in connection with the
implementation of a temporary new program, titled the ``Paycheck
Protection Program.'' The Paycheck Protection Program was established
under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act
or the Act). This interim final rule revises the interim final rule
posted on April 24, 2020, by extending the date by which certain
Paycheck Protection Program borrowers may repay their loans from May 7,
2020 to May 14, 2020, in order to avail themselves of a safe harbor
with respect to a certification required by the Act, and makes other
conforming changes. This interim final rule supplements SBA's
implementation of the Act and requests public comment.
DATES:
Effective date: This rule is effective May 19, 2020.
Applicability date: This interim final rule applies to borrowers
who applied for loans under the Paycheck Protection Program.
Comment date: Comments must be received on or before June 18, 2020.
ADDRESSES: You may submit comments, identified by number SBA-2020-0026
through the Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. SBA 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 send an email to [email protected]. Highlight
the information that you consider to be CBI and explain why you believe
SBA should hold this information as confidential. SBA will review the
information and make the final determination whether it will publish
the information.
FOR FURTHER INFORMATION CONTACT: A Call Center Representative at 833-
572-0502, or the local SBA Field Office; the list of offices can be
found at https://www.sba.gov/tools/local-assistance/districtoffices.
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 13, 2020, President Trump declared the ongoing Coronavirus
Disease 2019 (COVID-19) pandemic of sufficient severity and magnitude
to warrant an emergency declaration for all States, territories, and
the District of Columbia. With the COVID-19 emergency, many small
businesses nationwide are experiencing economic hardship as a direct
result of the Federal, State, tribal, and local public health measures
that are being taken to minimize the public's exposure to the virus.
These measures, some of which are government-mandated, are being
implemented nationwide and include the closures of restaurants, bars,
and
[[Page 29846]]
gyms. In addition, based on the advice of public health officials,
other measures, such as keeping a safe distance from others or even
stay-at-home orders, are being implemented, resulting in a dramatic
decrease in economic activity as the public avoids malls, retail
stores, and other businesses.
On March 27, 2020, the President signed the Coronavirus Aid,
Relief, and Economic Security Act (the CARES Act or the Act) (Pub. L.
116-136) to provide emergency assistance and health care response for
individuals, families, and businesses affected by the coronavirus
pandemic. The Small Business Administration (SBA) received funding and
authority through the Act to modify existing loan programs and
establish a new loan program to assist small businesses nationwide
adversely impacted by the COVID-19 emergency. Section 1102 of the Act
temporarily permits SBA to guarantee 100 percent of 7(a) loans under a
new program titled the ``Paycheck Protection Program.'' Section 1106 of
the Act provides for forgiveness of up to the full principal amount of
qualifying loans guaranteed under the Paycheck Protection Program. On
April 24, 2020, the President signed the Paycheck Protection Program
and Health Care Enhancement Act (Pub. L. 116-139), which provided
additional funding and authority for the PPP.
II. Comments and Immediate Effective Date
This interim final rule is effective without advance notice and
public comment because section 1114 of the Act authorizes SBA to issue
regulations to implement Title I of the Act without regard to notice
requirements. In addition, SBA has determined that there is good cause
for dispensing with advance public notice and comment on the ground
that it would be contrary to the public interest. Specifically, SBA, in
consultation with the Department of the Treasury, intends to issue
additional guidance with regard to the safe harbor and extending the
safe harbor deadline from May 7 to May 14 will afford Paycheck
Protection Program borrowers time to review the forthcoming SBA
guidance and decide whether to avail themselves of the safe harbor. SBA
previously announced this intended extension in nonbinding guidance
published on May 5, 2020. Advance notice and public comment would
defeat the purpose of this interim final rule given the timeline for
the existing safe harbor and short-term, temporary nature of this
program. These same reasons provide good cause for SBA to dispense with
the 30-day delayed effective date provided in the Administrative
Procedure Act.
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 18, 2020. SBA will consider these
comments and the need for making any revisions as a result of these
comments.
III. Paycheck Protection Program Requirements for Extension of Safe
Harbor With Respect to Certification Concerning Need for PPP Loan
Request
The CARES Act was enacted to provide immediate assistance to
individuals, families, and organizations affected by the COVID-19
emergency. Among the provisions contained in the CARES Act are
provisions authorizing SBA to temporarily guarantee loans under the
Paycheck Protection Program (PPP). Loans under the PPP are 100 percent
guaranteed by SBA, and the full principal amount of the loans and any
accrued interest may qualify for loan forgiveness. The Act requires
each applicant applying for a PPP loan to certify ``that the
uncertainty of current economic conditions makes necessary the loan
request to support the ongoing obligations'' of the applicant. On April
24, 2020, SBA posted on its website an interim final rule (the Fourth
PPP Interim Final Rule), which also was published in the Federal
Register on April 28, 2020 (85 FR 23450), to provide relief to PPP
borrowers who applied for and received PPP loans based on a
misunderstanding or misapplication of the required certification
standard. The Fourth PPP Interim Final Rule provides that any borrower
that applied for a PPP loan and repays the loan in full by May 7, 2020,
will be deemed by SBA to have made the required certification in good
faith. SBA, in consultation with the Department of the Treasury, will
issue additional guidance before May 14, 2020 concerning how SBA will
review the required certification to help PPP borrowers evaluate
whether they may have misunderstood or misapplied the statutory
certification standard.\1\ Based on this upcoming guidance, SBA, in
consultation with the Department of the Treasury, determined that it is
necessary and appropriate to extend the safe harbor deadline for
repaying PPP loans from May 7, 2020 to May 14, 2020.
---------------------------------------------------------------------------
\1\ This guidance is available at https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020_2.pdf.
---------------------------------------------------------------------------
Limited Safe Harbor With Respect to Certification Concerning Need for
PPP Loan Request
Consistent with section 1102 of the CARES Act, the Borrower
Application Form requires PPP applicants to certify that ``[c]urrent
economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant.'' Any borrower that applied for a
PPP loan and repays the loan in full by May 14, 2020 will be deemed by
SBA to have made the required certification in good faith. The
Administrator, in consultation with the Secretary, determined that this
safe harbor is necessary and appropriate to ensure that borrowers
promptly repay PPP loan funds that the borrower obtained based on a
misunderstanding or misapplication of the required certification
standard.
The extension of the safe harbor requires a corresponding date
change to the interim final rule that SBA posted on its website on
April 28, 2020, which was published in the Federal Register on May 4,
2020 (85 FR 26321), regarding PPP loan disbursements. Specifically,
Part III.1.b. provides that Lenders must electronically upload SBA Form
1502 information within 20 calendar days after a PPP loan is approved
or, for loans approved before the availability of the updated SBA Form
1502 reporting process, by May 18, 2020. 85 FR 26321, 26323. Because of
the extension of the safe harbor deadline, SBA is extending the
deadline for the submission of the initial SBA Form 1502 from May 18,
2020 to May 22, 2020.
Additional Information
SBA may provide further guidance, if needed, through SBA notices
that will be posted on SBA's website at www.sba.gov. Questions on the
Paycheck Protection Program may be directed to the Lender Relations
Specialist in the local SBA Field Office. The local SBA Field Office
may be found at https://www.sba.gov/tools/local-assistance/districtoffices.
Compliance With Executive Orders 12866, 12988, 13132, 13563, and 13771,
the Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612).
Executive Orders 12866, 13563, and 13771
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. SBA, however, is proceeding
under the emergency provision at Executive Order
[[Page 29847]]
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
SBA 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
SBA 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, SBA
has determined that this rule has no federalism implications warranting
preparation of a federalism assessment.
Paperwork Reduction Act, 44 U.S.C. Chapter 35
SBA has determined that this rule will not impose new or modify
existing recordkeeping or reporting requirements under the Paperwork
Reduction Act.
Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (RFA) generally requires that when
an agency issues a proposed rule, or a final rule pursuant to section
553(b) of the APA or another law, the agency must prepare a regulatory
flexibility analysis that meets the requirements of the RFA and publish
such analysis in the Federal Register. 5 U.S.C. 603, 604. Specifically,
the RFA normally requires agencies to describe the impact of a
rulemaking on small entities by providing a regulatory impact analysis.
Such analysis must address the consideration of regulatory options that
would lessen the economic effect of the rule on small entities. The RFA
defines a ``small entity'' as (1) a proprietary firm meeting the size
standards of the Small Business Administration (SBA); (2) a nonprofit
organization that is not dominant in its field; or (3) a small
government jurisdiction with a population of less than 50,000. 5 U.S.C.
601(3)-(6). Except for such small government jurisdictions, neither
State nor local governments are ``small entities.'' Similarly, for
purposes of the RFA, individual persons are not small entities. The
requirement to conduct a regulatory impact analysis does not apply if
the head of the agency ``certifies that the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' 5 U.S.C. 605(b). The agency must, however, publish
the certification in the Federal Register at the time of publication of
the rule, ``along with a statement providing the factual basis for such
certification.'' If the agency head has not waived the requirements for
a regulatory flexibility analysis in accordance with the RFA's waiver
provision, and no other RFA exception applies, the agency must prepare
the regulatory flexibility analysis and publish it in the Federal
Register at the time of promulgation or, if the rule is promulgated in
response to an emergency that makes timely compliance impracticable,
within 180 days of publication of the final rule. 5 U.S.C. 604(a),
608(b). Rules that are exempt from notice and comment are also exempt
from the RFA requirements, including conducting a regulatory
flexibility analysis, when among other things the agency for good cause
finds that notice and public procedure are impracticable, unnecessary,
or contrary to the public interest. SBA Office of Advocacy guide: How
to Comply with the Regulatory Flexibility Act, Ch.1. p.9. Accordingly,
SBA is not required to conduct a regulatory flexibility analysis.
Jovita Carranza,
Administrator.
[FR Doc. 2020-10649 Filed 5-18-20; 8:45 am]
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