Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 29845 

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. 2020–10658 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 

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: 

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 

29846 Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 

1This guidance is available at https://

www.sba.gov/sites/default/files/2020-05/PaycheckProtection-Program-Frequently-Asked-Questions_

05%2013%2020_2.pdf. 

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 

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. 

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 

Federal Register / Vol. 85, No. 97 / Tuesday, May 19, 2020 / Rules and Regulations 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] 

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 

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, 

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: 

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