26324 Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 

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. 2020–09398 Filed 5–1–20; 8:45 am] 

BILLING CODE P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 120 

[Docket Number SBA–2020–0023] 

RIN 3245–AH39 

Business Loan Program Temporary 

Changes; Paycheck Protection 

Program—Requirements—Corporate 

Groups and Non-Bank and NonInsured Depository Institution Lenders 

AGENCY: U. S. Small Business 

Administration. 

ACTION: Interim final rule. 

SUMMARY: 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 

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, 

and April 28, 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 

limiting the amount of PPP loans that 

any single corporate group may receive 

and provides additional guidance on the 

criteria for non-bank lender 

participation in the PPP, and requests 

public comment. 

DATES: 

Effective date: This rule is effective 

May 4, 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 3, 2020. 

ADDRESSES: You may submit comments, 

identified by number SBA–2020–0023 

through the Federal eRulemaking Portal: 

http://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 

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) 

(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 CARES 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 CARES 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 CARES 

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 Paycheck Protection 

Program. 

As described below, to preserve the 

limited resources available to the PPP 

program, this interim final rule limits 

the aggregate amount of PPP loans that 

any single corporate group may receive. 

This interim final rule also provides 

additional guidance regarding lenders 

eligible to make PPP loans. 

II. Comments and Immediate Effective 

Date 

The intent of the CARES Act is that 

SBA provide relief to America’s small 

businesses expeditiously. This intent, 

along with the dramatic decrease in 

economic activity nationwide, provides 

good cause for SBA to dispense with the 

30-day delayed effective date provided 

in the Administrative Procedure Act. 

Specifically, it is critical to meet 

lenders’ and borrowers’ need for clarity 

concerning program requirements as 

rapidly as possible because the last day 

eligible borrowers can apply for and 

receive a loan is June 30, 2020. 

This interim final rule supplements 

previous regulations and guidance on 

certain important, discrete issues. The 

immediate effective date of this interim 

final rule will benefit lenders so that 

they can swiftly close and disburse 

loans to small businesses. This interim 

final rule is effective without advance 

notice and public comment because 

section 1114 of the CARES Act 

authorizes SBA to issue regulations to 

implement Title I of the CARES Act 

without regard to notice requirements. 

This rule is being issued to allow for 

immediate implementation of this 

program. Although this interim final 

rule is effective immediately, comments 

are solicited from interested members of 

the public on all aspects of this interim 

final rule, including section III below. 

These comments must be submitted on 

or before June 3, 2020. SBA will 

consider these comments and the need 

for making any revisions as a result of 

these comments. 


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Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 26325 

1The Administrator has authority to issue ‘‘such 

rules and regulations as [the Administrator] deems 

necessary to carry out the authority vested in him 

by or pursuant to’’ 15 U.S.C. Chapter 14A, 

including authorities established under section 

1102 of the CARES Act. Section 1102 provides that 

the Administrator ‘‘may’’ guarantee loans under the 

terms and conditions set forth in section 7(a) of the 

Small Business Act, and those conditions specify a 

‘‘maximum’’—but not a minimum—loan amount. 

See 15 U.S.C. 636(a)(36)(B), (E); see also CARES Act 

section 1106(k) (authorizing SBA to issue 

regulations to govern loan forgiveness). To preserve 

finite appropriations for PPP loans and ensure 

broad access for eligible borrowers, the 

Administrator, in consultation with the Secretary, 

has determined that an aggregate limitation on 

loans to a single corporate group is necessary and 

appropriate. 

2For loans that have been partially disbursed, 

this limitation applies to any additional 

disbursement that would cause the total PPP loans 

to a single corporate group to exceed $20 million. 

3See Section 7(a)(36)(D)(iv) of the Small Business 

Act (15 U.S.C. 636(a)(36)(D)(iv), as added by the 

CARES Act; 13 CFR 121.103(b). 

III. Paycheck Protection Program 

Requirements for Corporate Groups 

and Non-Bank and Non-Insured 

Depository Institution Lenders 

Overview 

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 will be 100 

percent guaranteed by SBA, and the full 

principal amount of the loans and any 

accrued interest may qualify for loan 

forgiveness. Additional information 

about the PPP is available in SBA’s first 

PPP interim final rule (85 FR 20811) 

(the First Interim Final Rule), second 

interim final rule (85 FR 20817), third 

interim final rule (85 FR 21747), and 

fourth interim final rule (85 FR 23450), 

in an interim final rule issued by the 

Department of the Treasury, which was 

posted on April 28, 2020, and in SBA’s 

fifth interim final rule, which was 

posted on April 28, 2020. 

1. Can a single corporate group receive 

unlimited PPP loans? 

No. To preserve the limited resources 

available to the PPP program, and in 

light of the previous lapse of PPP 

appropriations and the high demand for 

PPP loans, businesses that are part of a 

single corporate group shall in no event 

receive more than $20,000,000 of PPP 

loans in the aggregate.1 For purposes of 

this limit, businesses are part of a single 

corporate group if they are majority 

owned, directly or indirectly, by a 

common parent. This limitation shall be 

immediately effective with respect to 

any loan that has not yet been fully 

disbursed as of April 30, 2020.2

It is the responsibility of an applicant 

for a PPP loan to notify the lender if the 

applicant has applied for or received 

PPP loans in excess of the amount 

permitted by this interim final rule and 

withdraw or request cancellation of any 

pending PPP loan application or 

approved PPP loan not in compliance 

with the limitation set forth in this rule. 

Failure by the applicant to do so will be 

regarded as a use of PPP funds for 

unauthorized purposes, and the loan 

will not be eligible for forgiveness. A 

lender may rely on an applicant’s 

representation concerning the 

applicant’s compliance with this 

limitation. 

The Administrator, in consultation 

with the Secretary, determined that 

limiting the amount of PPP loans that a 

single corporate group may receive will 

promote the availability of PPP loans to 

the largest possible number of 

borrowers, consistent with the CARES 

Act. The Administrator has concluded 

that a limitation of $20,000,000 strikes 

an appropriate balance between broad 

availability of PPP loans and program 

resource constraints. 

SBA’s affiliation rules, which relate to 

an applicant’s eligibility for PPP loans, 

and any waiver of those rules under the 

CARES Act, continue to apply 

independent of this limitation. 

Businesses are subject to this limitation 

even if the businesses are eligible for the 

waiver-of-affiliation provision under the 

CARES Act or are otherwise not 

considered to be affiliates under SBA’s 

affiliation rules.3

This rule has no effect on lender 

obligations required to obtain an SBA 

guarantee for PPP loans. 

2. Non-Bank and Non-Insured 

Depository Institution Lenders 

a. Can a non-bank lender or noninsured depository institution be 

approved to be a lender in the PPP if it 

has originated, maintained, or 

serviced—but not performed all three of 

these functions for—more than $50 

million in business loans or other 

commercial financial receivables during 

a 12-month period in the past 36 

months? 

Yes. The First Interim Final Rule 

provides that a non-bank lender or noninsured depository institution may be 

eligible to be a lender in the PPP if the 

lender has originated, maintained, and 

serviced more than $50 million in 

business loans or other commercial 

financial receivables during a 12-month 

period in the past 36 months, in 

addition to satisfying certain other 

requirements. To ensure broad and 

diverse lender participation, SBA and 

the Department of the Treasury have 

also determined that such lenders may 

be approved to make PPP loans if the 

lender has performed the required 

volume of any one of these three 

functions (originating, maintaining, or 

servicing). 

b. Can a non-bank lender that does 

not meet the $50 million threshold in 

the First Interim Final Rule for 

originating, maintaining, and servicing 

loans or receivables apply to be a lender 

in the PPP? 

Yes. As described in the First Interim 

Final Rule, a non-bank lender may be 

eligible to be a lender in the PPP if the 

lender has originated, maintained, and 

serviced more than $50 million in 

business loans or other commercial 

financial receivables during a 12-month 

period in the past 36 months, in 

addition to satisfying certain other 

requirements. In addition, SBA and the 

Department of the Treasury have 

determined that a non-bank lender 

meets the criteria to be a PPP lender and 

may be approved to make PPP loans if 

it has originated, maintained, or 

serviced more than $10 million in 

business loans or other commercial 

financial receivables during a 12-month 

period in the past 36 months, if the nonbank lender is (1) a community 

development financial institution (other 

than a federally insured bank or 

federally insured credit union) or (2) a 

majority minority-, women-, or veteran/ 

military-owned lender. Consistent with 

the First Interim Final Rule, a lender is 

ineligible if it currently is designated in 

Troubled Condition by its primary 

federal regulator or is subject to a formal 

enforcement action with its primary 

federal regulator that addresses unsafe 

or unsound lending practices. An 

applicant that meets this $10 million 

threshold but does not meet the $50 

million threshold that is otherwise 

applicable should leave blank the 

attestation on CARES Act Section 1102 

Lender Agreement—Non-Bank and NonInsured Depository Institution Lenders 

(SBA Form 3507) related to the $50 

million threshold and instead include 

with its application an attestation 

stating: ‘‘Lender attests that it has 

originated, maintained, or serviced more 

than $10 million in business loans or 

other commercial financial receivables 

during a consecutive 12 month period 

in the past 36 months.’’ 

3. Additional Information 

SBA may provide further guidance, if 

needed, through SBA notices that will 

be posted on SBA’s website at 


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26326 Federal Register / Vol. 85, No. 86 / Monday, May 4, 2020 / Rules and Regulations 

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 

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. 2020–09576 Filed 5–1–20; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Parts 21, 61, 63, 65, 91, 107, 

125, and 141 

[Docket No.: FAA–2020–0446; Amdt. No(s). 

Amendment numbers 21–102, 61–145, 63– 

43, 65–60, 91–357, 107–3, 125–69, and 141– 

21] 

RIN 2120–AL63 

Relief for Certain Persons and 

Operations During the Coronavirus 

Disease 2019 (COVID–19) Outbreak 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: This Special Federal Aviation 

Regulation (SFAR) provides regulatory 

relief to persons who have been unable 

to comply with certain training, recent 

experience, testing, and checking 

requirements due to the Coronavirus 

Disease 2019 (COVID–19) outbreak. This 

relief allows operators to continue to 

use pilots and other crewmembers in 

support of essential operations during 

this period. Additionally, this SFAR 

provides regulatory relief to certain 

persons and pilot schools unable to 

meet duration and renewal 

requirements due to the outbreak. This 

rule also allows certain air carriers and 

operators to fly temporary overflow 

aircraft, a need resulting from the 

outbreak, to a point of storage pursuant 

to a special flight permit with a 

continuing authorization. 

DATES: Effective April 30, 2020 through 

March 31, 2021. 

ADDRESSES: For information on where to 

obtain copies of rulemaking documents 

and other information related to this 

final rule, see ‘‘How to Obtain 

Additional Information’’ in the 

SUPPLEMENTARY INFORMATION section of 

this document. 

FOR FURTHER INFORMATION CONTACT: For 

technical questions concerning this 

action for pilots, contact Craig Holmes, 

General Aviation and Commercial 

Division; Federal Aviation 

Administration, 800 Independence 

Avenue SW, Washington, DC 20591; 

telephone (202) 267–1100; email 9-AVSAFS800-COVID19-Correspondence@

faa.gov. For technical questions 

concerning this action for mechanics 

and special flight permits, contact Kevin 

Morgan, Aircraft Maintenance Division; 

Federal Aviation Administration, 800 

Independence Avenue SW, Washington, 

DC 20591; telephone (202) 267–1675; 

email Kevin.Morgan@faa.gov. For 


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