ALP Express Pilot Program, 69529-69531 [2023-22171]

Download as PDF 69529 Rules and Regulations Federal Register Vol. 88, No. 193 Friday, October 6, 2023 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. action corrects the names and definitions of the two spot markets. List of Subjects in 7 CFR Part 27 Commodity futures, Cotton. For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 27 with the following technical amendment: Mexico counties of Union, Quay, Curry, Roosevelt, and Lea. * * * * * Melissa Bailey, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2023–22180 Filed 10–5–23; 8:45 am] BILLING CODE P DEPARTMENT OF AGRICULTURE PART 27—[Amended] SMALL BUSINESS ADMINISTRATION 1. The authority citation for 7 CFR part 27 continues to read as follows: [Docket No. SBA–2023–0012] Agricultural Marketing Service ■ 7 CFR Part 27 [Doc. No. AMS–CN–22–0061] Authority: 7 U.S.C. 15b, 7 U.S.C. 473b, 7 U.S.C. 1622(g). Redefining Bona Fide Cotton Spot Markets Agricultural Marketing Service, USDA. ACTION: Technical amendment. AGENCY: On August 1, 2023, the Agricultural Marketing Service (AMS) published a rule amending the regulation that redefines two of the seven designated spot markets and changing the names of the affected markets. The amendatory language in this rule did not provide instructions necessary to effectuate the changes in the Code of Federal Regulations. This action corrects the names and definitions of the two affected cotton spot markets. DATES: Effective October 6, 2023. FOR FURTHER INFORMATION CONTACT: Barbara Meredith, Division Director, Cotton Market News, Cotton & Tobacco Program, AMS, USDA, 3275 Appling Road, Room 10, Memphis, TN 38133. Telephone: (901) 384–3300, or Email: Barbara.Meredith@usda.gov. SUPPLEMENTARY INFORMATION: A final rule published in the Federal Register on August 1, 2023 (88 FR 49993) revised the regulations concerning bona fide spot market definitions, redefining which counties and states compose each of these spot markets. Specifically, the rule removed the terms ‘‘East Texas and Oklahoma’’ and ‘‘West Texas’’, and added the terms ‘‘East Texas and South Texas’’ and ‘‘West Texas, Kansas, and Oklahoma.’’ Furthermore, the rule removed the definitions of ‘‘East Texas and Oklahoma’’ and ‘‘West Texas’’ and added the definitions of ‘‘East Texas and South Texas’’ and ‘‘West Texas, Kansas, and Oklahoma’’ in their place. This lotter on DSK11XQN23PROD with RULES1 SUMMARY: VerDate Sep<11>2014 15:54 Oct 05, 2023 Jkt 262001 2. Amend § 27.93: ■ a. Revising the introductory paragraph of the extract; ■ b. By removing the definitions of ‘‘East Texas and Oklahoma’’ and ‘‘West Texas’’ and; ■ c. By adding the definitions of ‘‘East Texas and South Texas’’ and ‘‘West Texas, Kansas, and Oklahoma’’ in their place. The additions and revision read as follows: ■ § 27.93 Bona fide spot markets. The following markets have been determined, after investigation, and are hereby designated to be bona fide spot markets within the meaning of the act: Southeastern; North Delta; South Delta; East Texas and South Texas; West Texas, Kansas and Oklahoma; Desert Southwest; and San Joaquin Valley. Such markets will comprise the following areas: * * * * * East Texas and South Texas Texas counties east of and including Montague, Wise, Parker, Erath, Comanche, Mills, San Saba, Mason, Sutton, Edwards, Kinney, Maverick, Webb, Zapata, Star, and Hidalgo counties. West Texas, Kansas, and Oklahoma All counties in Kansas and Oklahoma, all Texas counties not included in the East Texas, South Texas, and Desert Southwest Markets, and the New PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 13 CFR Part 120 ALP Express Pilot Program U.S. Small Business Administration (SBA). ACTION: Notification of ALP Express Pilot Program. AGENCY: SBA is introducing a new pilot loan program (ALP Express Pilot) to provide to Certified Development Companies (CDCs) participating in the Accredited Lenders Program (ALP) increased delegated authority for 504 loans of $500,000 or less. These increased delegated authorities (ALP Express authority) were previously authorized under the Economic Aid to Hard-hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), but they expire on September 30, 2023. SBA will evaluate the use of the ALP Express Pilot and will make a recommendation to Congress as to whether these increased authorities should become permanent. SBA will limit the number of ALP Express Pilot loans to not more than fifteen percent (15%) of the total dollar amount of 504 loans made in any fiscal year. DATES: Availability date: The ALP Express Pilot is available on October 1, 2023, and will remain in effect for up to two years, but not to extend beyond September 30, 2025. Comment date: Send comments by December 5, 2023. ADDRESSES: You may submit comments, identified by SBA docket number SBA– 2023–0012, by any of the following methods: • Federal eRulemaking Portal: https://www.regulations.gov/. Follow the instructions for submitting comments. • Mail: Gregorius Suryadi, Office of Financial Assistance, U.S. Small SUMMARY: E:\FR\FM\06OCR1.SGM 06OCR1 69530 Federal Register / Vol. 88, No. 193 / Friday, October 6, 2023 / Rules and Regulations lotter on DSK11XQN23PROD with RULES1 Business Administration, 409 Third Street SW, Washington, DC 20416. • Hand Delivery/Courier: Gregorius Suryadi, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416. SBA will post all comments on https://www.regulations.gov. If you wish to submit confidential business information (‘‘CBI’’) as defined in the User Notice at https:// www.regulations.gov, please submit the information to Gregorius Suryadi, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416; or send an email to gregorius.suryadi@ 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 as to whether it will publish the information. FOR FURTHER INFORMATION CONTACT: Gregorius Suryadi, Office of Financial Assistance, U.S. Small Business Administration at (202) 205–6806 or gregorius.suryadi@sba.gov. The phone number above may also be reached by individuals who are deaf or hard of hearing, or who have speech disabilities, through the Federal Communications Commission’s TTYBased Telecommunications Relay Service teletype service at 711. SUPPLEMENTARY INFORMATION: 1. Background The 504 Loan Program is an SBA financing program authorized under title V of the Small Business Investment Act of 1958, as amended, 15 U.S.C. 695 et seq. (Small Business Investment Act). The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment, to facilitate the creation or retention of jobs and local economic development. Under the 504 Loan Program, loans are made to small business applicants by Certified Development Companies (‘‘CDCs’’), which are certified and regulated by SBA to promote economic development within their community. In general, a project in the 504 Loan Program (a ‘‘504 Project’’) includes: A loan obtained from a private sector lender with a senior lien covering at least 50 percent of the project cost; a loan obtained from a CDC (a ‘‘504 Loan’’) with a junior lien covering up to 40 percent of the total cost (backed by a 100 percent SBA guaranteed debenture); and a contribution from the Borrower of at least 10 percent equity. VerDate Sep<11>2014 15:54 Oct 05, 2023 Jkt 262001 There are three types of CDCs that participate in the 504 Loan Program. This notification relates to the temporary increased delegated authority that was granted, in accordance with section 328(b) of the Economic Aid Act, to CDCs that are approved by SBA to participate in the Accredited Lenders Program (hereafter ‘‘ALP CDCs’’), which is authorized under section 507(a) of the Small Business Investment Act. Under section 507(c) of the Small Business Investment Act, SBA is authorized to develop an expedited procedure for processing a loan application or servicing action submitted by ALP CDCs. 15 U.S.C. 697d. Prior to the Economic Aid Act, ALP CDCs were required to obtain SBA’s approval to make a 504 loan, including with respect to both the loan’s eligibility and creditworthiness. With respect to closing, ALP CDCs only had delegated authority to make certain ‘‘No Adverse Change’’ certifications prior to loan closing without SBA’s review and approval, and were authorized to close 504 loans under the expedited loan closing procedures applicable to a Priority CDC. Further, ALP CDCs were required to obtain SBA’s approval for most servicing actions. The ALP Express Pilot will temporarily provide increased delegated authority to ALP CDCs with respect to loans made under ALP authority (hereafter referred to as ‘‘ALP Express Pilot Loans’’). Although ALP CDCs have had the option to use these new delegated authorities since the publication of the interim final rule implementing section 328(b) of the Economic Aid Act, they expire on September 30. 2023. 87 FR 37979 (June 27, 2022). The ALP Express Pilot’s new delegated authorities represent a continuation of the ALP Express authority provided by the Economic Aid Act, which themselves are the most substantial changes to an ALP CDC’s authority to approve, authorize, close and service loans made under ALP authority since the onset of the Accredited Lender’s Program, while also incorporating new elements. For the ALP Express Pilot SBA has declined to include the prohibition in section 328(b) of the Economic Aid Act against making loans with ALP Express authority to a borrower in an industry with a high rate of default (defined as an industry that for the past 5 fiscal years has 50 or more approvals per year and an annualized default rate of 5% or above) because SBA has determined there are no industries with a high rate of default in the 504 program based on prior SBA 504 portfolio performance. Further, as of May 11, 2023, SBA instituted a PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 technology compliance check on all loans, including those with ALP Express authority, and streamlined the affiliation policy guidance that reduces the amount of paperwork required for submitting loan packages. As these changes are recent the ALP Express Pilot will enable SBA to season the ALP Express Pilot and observe the impact of these recent changes. Under the ALP Express Pilot, SBA will delegate to ALP CDCs the authority to make the final decision with respect to the applicant’s creditworthiness on ALP Express Pilot Loans. SBA continues to be responsible for reviewing each loan to ensure that it meets all Loan Program Requirements for program eligibility. SBA will delegate to ALP CDCs the authority to approve certain servicing actions after closing on ALP Express Pilot Loans. ALP CDCs must promptly notify the appropriate SBA servicing center of their approval of any servicing action on ALP Express Pilot Loans. SBA will consider prompt notification to be within five (5) business days of approval. Finally, SBA will delegate to ALP CDCs the responsibility to undertake all actions necessary to close the ALP Express Pilot Loan and Debenture in accordance with the expedited loan closing procedures applicable to a Priority CDC and with 13 CFR 120.960. In their own discretion, ALP CDCs may decide not to exercise their delegated authority with respect to an ALP Express Pilot Loan and may instead submit the loan to SBA under nondelegated procedures. ALP CDCs may not use their ALP Express authority to service a loan that was approved under non-delegated authority that could have been made as an ALP Express Pilot Loan. In addition, PCLP CDCs may decide to process an ALP Express Pilot Loan under their status as an ALP CDC instead of as a PCLP CDC, thereby not requiring the CDC to comply with Loan Loss Reserve Fund requirements for that loan. In making, closing, servicing, or liquidating an ALP Express Pilot Loan, CDCs must follow all Loan Program Requirements under the 504 Loan Program. This includes the loan closing and disbursement procedures in SOP 50 10 7 and the servicing and liquidation requirements in 13 CFR 120.535, 120.536, 120.540, 120.842 and 120.960, as well as SOP 50 55. To implement this ALP Express Pilot Program, SBA is relying on 13 CFR 120.3, which permits the SBA suspend, modify, or waive rules for a limited period of time to test new programs or ideas. SBA wishes to implement this E:\FR\FM\06OCR1.SGM 06OCR1 Federal Register / Vol. 88, No. 193 / Friday, October 6, 2023 / Rules and Regulations pilot to evaluate the use of this increased delegated authority by ALP CDCs and to identify opportunities for further modification. For further guidance on ALP Express authority, see the Economic Aid Act and the ALP Express Pilot Program Guide. 2. Application Terms and Conditions and Forms CDCs must use the application forms required for current 504 loan processing and execute an SBA Terms and Conditions document for each ALP Express Pilot Loan, as set forth in SOP 50 10 7. For further guidance on the SBA Terms and Conditions and the required forms, see SOP 50 10 7 and the ALP Express Pilot Program Guide. Reporting Requirements CDCs must document on SBA Form 1244 (by checking the ALP Express box on page 12) whether the ALP CDC is using its ALP Express authority when submitting an application for an ALP Express Pilot Loan. This will allow SBA to track ALP CDCs’ use of this increased delegated authority. CDCs must also continue to comply with the reporting requirements in 13 CFR 120.830. lotter on DSK11XQN23PROD with RULES1 Lender Oversight ALP CDC oversight procedures shall follow the requirements set forth in 13 CFR part 120—Subpart I and SOPs 50 53 (Lender Supervision and Enforcement) and 51 00 (On-Site Lender Reviews and Examinations). The SOPs can be found at: https://archive.sba.gov/ tools/resourcelibrary/sops/. ALP CDCs will be monitored both for performance and other risk characteristics as well as for compliance with the requirements of the ALP Express Pilot Program. The ALP CDC must maintain compliance with the requirement that it only makes ALP Express Pilot Loans in an amount of $500,000 or less, along with all other Loan Program Requirements. ALP CDCs also will be subject to 13 CFR 120.1400 through 120.1600 and the provisions of SOP 50 53 concerning supervision and enforcement. Evaluation Criteria for ALP Express Pilot SBA is reviewing the following data related to ALP CDCs and their use of ALP Express authority and will use the same evaluation criteria for the ALP Express Pilot: (1.) Did the number and/or percentage of 504 loans in the portfolio under $500,000 increase as a result of the availability of ALP Express authority? (2.) How do the default rates of ALP Express loans compare with similarly VerDate Sep<11>2014 15:54 Oct 05, 2023 Jkt 262001 sized loans not processed and serviced using this authority? (3.) Did ALP Express loan approvals and servicing turn times improve, resulting in enhanced customer service? For data collections to evaluate the effectiveness of this pilot, SBA will use ETran, SBA’s electronic system for loan submission and servicing. Authority: 13 CFR 120.3. Isabella Casillas Guzman, Administrator. [FR Doc. 2023–22171 Filed 10–5–23; 8:45 am] BILLING CODE 8026–09–P DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 102 RIN 0991–AC34 Annual Civil Monetary Penalties Inflation Adjustment Office of the Assistant Secretary for Financial Resources, Department of Health and Human Services. ACTION: Final rule. AGENCY: The Department of Health and Human Services (HHS) is updating its regulations to reflect required annual inflation-related increases to the civil monetary penalty (CMP) amounts in its regulations, under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and adds references to new penalty authorities. DATES: Effective date: This final rule is effective October 6, 2023. Applicability date: The adjusted civil monetary penalty amounts apply to penalties assessed on or after the date of publication to the Federal Register, if the violation occurred on or after November 2, 2015. FOR FURTHER INFORMATION CONTACT: Katrina Brisbon, Deputy Assistant Secretary, Office of Acquisitions, Office of the Assistant Secretary for Financial Resources, Room 536–H, Hubert Humphrey Building, 200 Independence Avenue SW, Washington DC 20201; (202)260–6677. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (section 701 of Pub. L. 114–74) (the ‘‘2015 Act’’) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101–410, 104 Stat. 890 (1990)), which is intended to improve PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 69531 the effectiveness of CMPs and to maintain the deterrent effect of such penalties, requires agencies to adjust the CMPs for inflation annually. HHS lists the CMP authorities and the amounts administered by all of its agencies in tabular form in 45 CFR 102.3, which was issued in an interim final rule published in the September 6, 2016, Federal Register (81 FR 61538). Annual adjustments were subsequently published on February 3, 2017 (82 FR 9175), October 11, 2018 (83 FR 51369), November 5, 2019 (84 FR 59549), January 17, 2020 (85 FR 2869), November 15, 2021 (86 FR 62928), and March 17, 2022 (87 FR 15100). II. Calculation of Annual Inflation Adjustment and Other Updates The annual inflation adjustment for each applicable CMP is determined using the percent increase in the Consumer Price Index for all Urban Consumers (CPI–U) for the month of October of the year in which the amount of each CMP was most recently established or modified. In the December 15, 2022, Office of Management and Budget (OMB) Memorandum for the Heads of Executive Agencies and Departments, M–23–05, ‘‘Implementation of Penalty Inflation Adjustments for 2023, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,’’ OMB published the multiplier for the required annual adjustment. The cost-of-living adjustment multiplier for 2023, based on the CPI–U for the month of October 2022, not seasonally adjusted, is 1.07745. The multiplier is applied to each applicable penalty amount that was updated and published for fiscal year (FY) 2022 and is rounded to the nearest dollar. In addition to the inflation adjustments for 2023, this final rule updates the table in 45 CFR 102.3 to add references to new, applicable CMP authorities that were established or implemented since the publication of the March 17, 2022, update and that are being updated in this rule. First, in the final rule, ‘‘Medicare and Medicaid Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model’’ final rule with comment period (86 FR 63548, November 16, 2021), the Centers for Medicare & Medicaid Services (CMS) finalized a new provision, effective January 1, 2022, at 45 CFR 180.90(c)(ii) to increase the CMP amounts associated with a hospital’s noncompliance with E:\FR\FM\06OCR1.SGM 06OCR1

Agencies

SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 88, Number 193 (Friday, October 6, 2023)]
[Rules and Regulations]
[Pages 69529-69531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22171]


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SMALL BUSINESS ADMINISTRATION

[Docket No. SBA-2023-0012]

13 CFR Part 120


ALP Express Pilot Program

AGENCY: U.S. Small Business Administration (SBA).

ACTION: Notification of ALP Express Pilot Program.

-----------------------------------------------------------------------

SUMMARY: SBA is introducing a new pilot loan program (ALP Express 
Pilot) to provide to Certified Development Companies (CDCs) 
participating in the Accredited Lenders Program (ALP) increased 
delegated authority for 504 loans of $500,000 or less. These increased 
delegated authorities (ALP Express authority) were previously 
authorized under the Economic Aid to Hard-hit Small Businesses, 
Nonprofits, and Venues Act (Economic Aid Act), but they expire on 
September 30, 2023. SBA will evaluate the use of the ALP Express Pilot 
and will make a recommendation to Congress as to whether these 
increased authorities should become permanent. SBA will limit the 
number of ALP Express Pilot loans to not more than fifteen percent 
(15%) of the total dollar amount of 504 loans made in any fiscal year.

DATES: 
    Availability date: The ALP Express Pilot is available on October 1, 
2023, and will remain in effect for up to two years, but not to extend 
beyond September 30, 2025.
    Comment date: Send comments by December 5, 2023.

ADDRESSES: You may submit comments, identified by SBA docket number 
SBA-2023-0012, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/. 
Follow the instructions for submitting comments.
     Mail: Gregorius Suryadi, Office of Financial Assistance, 
U.S. Small

[[Page 69530]]

Business Administration, 409 Third Street SW, Washington, DC 20416.
     Hand Delivery/Courier: Gregorius Suryadi, Office of 
Financial Assistance, U.S. Small Business Administration, 409 Third 
Street SW, Washington, DC 20416.
    SBA will post all comments on https://www.regulations.gov.
    If you wish to submit confidential business information (``CBI'') 
as defined in the User Notice at https://www.regulations.gov, please 
submit the information to Gregorius Suryadi, Office of Financial 
Assistance, U.S. Small Business Administration, 409 Third Street SW, 
Washington, DC 20416; or 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 as to whether 
it will publish the information.

FOR FURTHER INFORMATION CONTACT: Gregorius Suryadi, Office of Financial 
Assistance, U.S. Small Business Administration at (202) 205-6806 or 
[email protected]. The phone number above may also be reached 
by individuals who are deaf or hard of hearing, or who have speech 
disabilities, through the Federal Communications Commission's TTY-Based 
Telecommunications Relay Service teletype service at 711.

SUPPLEMENTARY INFORMATION:

1. Background

    The 504 Loan Program is an SBA financing program authorized under 
title V of the Small Business Investment Act of 1958, as amended, 15 
U.S.C. 695 et seq. (Small Business Investment Act). The core mission of 
the 504 Loan Program is to provide long-term financing to small 
businesses for the purchase or improvement of land, buildings, and 
major equipment, to facilitate the creation or retention of jobs and 
local economic development. Under the 504 Loan Program, loans are made 
to small business applicants by Certified Development Companies 
(``CDCs''), which are certified and regulated by SBA to promote 
economic development within their community. In general, a project in 
the 504 Loan Program (a ``504 Project'') includes: A loan obtained from 
a private sector lender with a senior lien covering at least 50 percent 
of the project cost; a loan obtained from a CDC (a ``504 Loan'') with a 
junior lien covering up to 40 percent of the total cost (backed by a 
100 percent SBA guaranteed debenture); and a contribution from the 
Borrower of at least 10 percent equity.
    There are three types of CDCs that participate in the 504 Loan 
Program. This notification relates to the temporary increased delegated 
authority that was granted, in accordance with section 328(b) of the 
Economic Aid Act, to CDCs that are approved by SBA to participate in 
the Accredited Lenders Program (hereafter ``ALP CDCs''), which is 
authorized under section 507(a) of the Small Business Investment Act. 
Under section 507(c) of the Small Business Investment Act, SBA is 
authorized to develop an expedited procedure for processing a loan 
application or servicing action submitted by ALP CDCs. 15 U.S.C. 697d.
    Prior to the Economic Aid Act, ALP CDCs were required to obtain 
SBA's approval to make a 504 loan, including with respect to both the 
loan's eligibility and creditworthiness. With respect to closing, ALP 
CDCs only had delegated authority to make certain ``No Adverse Change'' 
certifications prior to loan closing without SBA's review and approval, 
and were authorized to close 504 loans under the expedited loan closing 
procedures applicable to a Priority CDC. Further, ALP CDCs were 
required to obtain SBA's approval for most servicing actions.
    The ALP Express Pilot will temporarily provide increased delegated 
authority to ALP CDCs with respect to loans made under ALP authority 
(hereafter referred to as ``ALP Express Pilot Loans''). Although ALP 
CDCs have had the option to use these new delegated authorities since 
the publication of the interim final rule implementing section 328(b) 
of the Economic Aid Act, they expire on September 30. 2023. 87 FR 37979 
(June 27, 2022). The ALP Express Pilot's new delegated authorities 
represent a continuation of the ALP Express authority provided by the 
Economic Aid Act, which themselves are the most substantial changes to 
an ALP CDC's authority to approve, authorize, close and service loans 
made under ALP authority since the onset of the Accredited Lender's 
Program, while also incorporating new elements. For the ALP Express 
Pilot SBA has declined to include the prohibition in section 328(b) of 
the Economic Aid Act against making loans with ALP Express authority to 
a borrower in an industry with a high rate of default (defined as an 
industry that for the past 5 fiscal years has 50 or more approvals per 
year and an annualized default rate of 5% or above) because SBA has 
determined there are no industries with a high rate of default in the 
504 program based on prior SBA 504 portfolio performance. Further, as 
of May 11, 2023, SBA instituted a technology compliance check on all 
loans, including those with ALP Express authority, and streamlined the 
affiliation policy guidance that reduces the amount of paperwork 
required for submitting loan packages. As these changes are recent the 
ALP Express Pilot will enable SBA to season the ALP Express Pilot and 
observe the impact of these recent changes.
    Under the ALP Express Pilot, SBA will delegate to ALP CDCs the 
authority to make the final decision with respect to the applicant's 
creditworthiness on ALP Express Pilot Loans. SBA continues to be 
responsible for reviewing each loan to ensure that it meets all Loan 
Program Requirements for program eligibility.
    SBA will delegate to ALP CDCs the authority to approve certain 
servicing actions after closing on ALP Express Pilot Loans. ALP CDCs 
must promptly notify the appropriate SBA servicing center of their 
approval of any servicing action on ALP Express Pilot Loans. SBA will 
consider prompt notification to be within five (5) business days of 
approval. Finally, SBA will delegate to ALP CDCs the responsibility to 
undertake all actions necessary to close the ALP Express Pilot Loan and 
Debenture in accordance with the expedited loan closing procedures 
applicable to a Priority CDC and with 13 CFR 120.960.
    In their own discretion, ALP CDCs may decide not to exercise their 
delegated authority with respect to an ALP Express Pilot Loan and may 
instead submit the loan to SBA under nondelegated procedures. ALP CDCs 
may not use their ALP Express authority to service a loan that was 
approved under non-delegated authority that could have been made as an 
ALP Express Pilot Loan. In addition, PCLP CDCs may decide to process an 
ALP Express Pilot Loan under their status as an ALP CDC instead of as a 
PCLP CDC, thereby not requiring the CDC to comply with Loan Loss 
Reserve Fund requirements for that loan.
    In making, closing, servicing, or liquidating an ALP Express Pilot 
Loan, CDCs must follow all Loan Program Requirements under the 504 Loan 
Program. This includes the loan closing and disbursement procedures in 
SOP 50 10 7 and the servicing and liquidation requirements in 13 CFR 
120.535, 120.536, 120.540, 120.842 and 120.960, as well as SOP 50 55.
    To implement this ALP Express Pilot Program, SBA is relying on 13 
CFR 120.3, which permits the SBA suspend, modify, or waive rules for a 
limited period of time to test new programs or ideas. SBA wishes to 
implement this

[[Page 69531]]

pilot to evaluate the use of this increased delegated authority by ALP 
CDCs and to identify opportunities for further modification.
    For further guidance on ALP Express authority, see the Economic Aid 
Act and the ALP Express Pilot Program Guide.

2. Application Terms and Conditions and Forms

    CDCs must use the application forms required for current 504 loan 
processing and execute an SBA Terms and Conditions document for each 
ALP Express Pilot Loan, as set forth in SOP 50 10 7. For further 
guidance on the SBA Terms and Conditions and the required forms, see 
SOP 50 10 7 and the ALP Express Pilot Program Guide.

Reporting Requirements

    CDCs must document on SBA Form 1244 (by checking the ALP Express 
box on page 12) whether the ALP CDC is using its ALP Express authority 
when submitting an application for an ALP Express Pilot Loan. This will 
allow SBA to track ALP CDCs' use of this increased delegated authority. 
CDCs must also continue to comply with the reporting requirements in 13 
CFR 120.830.

Lender Oversight

    ALP CDC oversight procedures shall follow the requirements set 
forth in 13 CFR part 120--Subpart I and SOPs 50 53 (Lender Supervision 
and Enforcement) and 51 00 (On-Site Lender Reviews and Examinations). 
The SOPs can be found at: https://archive.sba.gov/tools/resourcelibrary/sops/. ALP CDCs will be monitored both for 
performance and other risk characteristics as well as for compliance 
with the requirements of the ALP Express Pilot Program. The ALP CDC 
must maintain compliance with the requirement that it only makes ALP 
Express Pilot Loans in an amount of $500,000 or less, along with all 
other Loan Program Requirements. ALP CDCs also will be subject to 13 
CFR 120.1400 through 120.1600 and the provisions of SOP 50 53 
concerning supervision and enforcement.

Evaluation Criteria for ALP Express Pilot

    SBA is reviewing the following data related to ALP CDCs and their 
use of ALP Express authority and will use the same evaluation criteria 
for the ALP Express Pilot:
    (1.) Did the number and/or percentage of 504 loans in the portfolio 
under $500,000 increase as a result of the availability of ALP Express 
authority?
    (2.) How do the default rates of ALP Express loans compare with 
similarly sized loans not processed and serviced using this authority?
    (3.) Did ALP Express loan approvals and servicing turn times 
improve, resulting in enhanced customer service?
    For data collections to evaluate the effectiveness of this pilot, 
SBA will use ETran, SBA's electronic system for loan submission and 
servicing.

    Authority: 13 CFR 120.3.

Isabella Casillas Guzman,
Administrator.
[FR Doc. 2023-22171 Filed 10-5-23; 8:45 am]
BILLING CODE 8026-09-P

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