Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations 30835 

restriction on receipt of funds under 

CFAP but only as to beneficiaries who, 

as a condition of the waiver, agree to 

apply the CFAP payments to reduce the 

amount of the judgment lien. 

(g) In addition to any other Federal 

laws that apply to CFAP, the following 

laws apply: 15 U.S.C. 714; 18 U.S.C. 

286, 287, 371, 1001; and 31 U.S.C. 1001. 

(h) This part applies to applications 

submitted under CFAP through August 

28, 2020, or until funds made available 

for CFAP are exhausted. 

§ 9.8 Perjury. 

In either applying for or participating 

in CFAP, or both, the producer is 

subject to laws against perjury and any 

penalties and prosecution resulting 

therefrom, with such laws including but 

not limited to 18 U.S.C. 1621. If the 

producer willfully makes and represents 

as true any verbal or written declaration, 

certification, statement, or verification 

that the producer knows or believes not 

to be true, in the course of either 

applying for or participating in CFAP, or 

both, then the producer is guilty of 

perjury and, except as otherwise 

provided by law, may be fined, 

imprisoned for not more than 5 years, or 

both, regardless of whether the producer 

makes such verbal or written 

declaration, certification, statement, or 

verification within or without the 

United States. 

Stephen L. Censky, 

Vice Chairman, Commodity Credit 

Corporation, and Deputy Secretary, U.S. 

Department of Agriculture. 

[FR Doc. 2020–11025 Filed 5–20–20; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

7 CFR Part 1951 

[Docket No. RHS–20–CF–0011] 

Notification of Direct Loan Payment 

Deferrals for the Community Facilities 

Direct Loan Program 

Correction 

In rule document 2020–08429 

beginning on page 22009 in the issue of 

Tuesday, April 21, 2020, make the 

following correction: 

On page 22009, in the DATES section, 

‘‘May 12, 2020’’ should read ‘‘April 21, 

2020’’. 

[FR Doc. C1–2020–08429 Filed 5–20–20; 8:45 am] 

BILLING CODE 1301–00–D 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 120 and 121 

[Docket Number SBA–2020–0030] 

RIN 3245–AH44 

Business Loan Program Temporary 

Changes; Paycheck Protection 

Program—Treatment of Entities With 

Foreign Affiliates 

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, May 8, 2020, May 13, 2020, and 

May 14, 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 related to 

entities with foreign affiliates, and 

requests public comment. 

DATES:

Effective date: This rule is effective 

May 21, 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 22, 2020. 

ADDRESSES: You may submit comments, 

identified by number SBA–2020–0030 

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 (PPP). On April 24, 

2020, the President signed the Paycheck 

Protection Program and Health Care 

Enhancement Act (Pub. L. 116–139), 

30836 Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations 

1Section 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, waives SBA’s affiliation rules for (1) any 

business concern with not more than 500 

employees that, as of the date on which the loan 

which provided additional funding and 

authority for the PPP. 

Under the CARES Act, an entity is 

eligible for a PPP loan if it is (1) a small 

business concern, or (2) a business 

concern, nonprofit organization 

described in section 501(c)(3) of the 

Internal Revenue Code, veterans 

organization described in section 

501(c)(19) of the Internal Revenue Code, 

or Tribal business concern described in 

section 31(b)(2)(C) of the Small Business 

Act that employs not more than the 

greater of 500 employees, or, if 

applicable, SBA’s employee-based size 

standard for the industry in which the 

entity operates. Under existing SBA 

regulations, an entity is generally 

considered together with its affiliates for 

purposes of determining the entity’s 

eligibility for SBA loans. See 13 CFR 

121.301. SBA issued an interim final 

rule on affiliation (posted April 4, 2020) 

stating that PPP applicants are subject to 

the affiliation rules set forth in 13 CFR 

121.301. See 85 FR 20817 (April 15, 

2020). Those rules deem entities to be 

affiliates based on factors including 

stock ownership, overlapping 

management, and identity of interest. Of 

relevance here, SBA’s affiliation rules 

provide that in determining an entity’s 

number of employees, employees of the 

entity ‘‘and all of its domestic and 

foreign affiliates’’ are included. As a 

result, in most cases, a borrower is 

considered together with its U.S. and 

foreign affiliates for purposes of 

determining eligibility for the PPP. 

Based on that methodology, the 

borrower application form (SBA Form 

2483), which all applicants must 

complete and submit, includes a 

certification that the applicant ‘‘employs 

no more than the greater of 500 or 

employees or, if applicable, the size 

standard in number of employees 

established by the SBA in 13 CFR 

121.201 for the Applicant’s industry.’’ 

To provide further clarification of this 

methodology, SBA issued guidance on 

May 5, 2020 (FAQ 44) stating that an 

applicant must count all of its 

employees and the employees of its U.S. 

and foreign affiliates, absent a waiver of 

or an exception to the affiliation rules. 

Some market participants have 

indicated that there may be uncertainty 

regarding whether PPP applicants must 

include employees of foreign affiliates 

in their employee counts, because SBA 

has previously issued guidance stating 

that an entity is eligible for a PPP loan 

if it has 500 or fewer employees whose 

principal place of residence is in the 

United States. See 85 FR 20811, 20812 

(April 15, 2020). As described above, 

the generally applicable 500-employee 

size standard is subject to the 

application of SBA’s affiliation rules, as 

well as numerous other eligibility 

requirements. See, e.g., 13 CFR 120.110 

(listing 18 types of ineligible 

businesses); SBA Form 2483 (including 

mandatory applicant representations 

regarding defaults on previous 

government loans or guarantees, Federal 

suspension or debarment, and criminal 

backgrounds). The reference in SBA 

guidance to employees whose principal 

place of residence is in the United 

States is relevant to a PPP applicant’s 

calculation of payroll for purposes of 

determining the PPP loan amount and to 

the calculation of loan forgiveness. The 

fact that an applicant might be eligible 

for a PPP loan if it has 500 or fewer U.S. 

employees does not mean that the 

applicant is not also subject to the other 

requirements applicable to the PPP. 

Instead, an applicant is eligible for a 

PPP loan only if it meets all applicable 

eligibility criteria. If an applicant, 

together with its domestic and foreign 

affiliates, does not meet the 500- 

employee or other applicable PPP size 

standard, it is not eligible for a PPP 

loan. 

II. Comments and Immediate Effective 

Date 

The intent of the 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 an 

important, discrete issue. 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 Act authorizes SBA 

to issue regulations to implement Title 

I of the 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 

the interim final rule, including section 

III below. These comments must be 

submitted on or before June 22, 2020. 

SBA will consider these comments and 

the need for making any revisions as a 

result of these comments. 

III. Paycheck Protection Program 

Additional Eligibility Criteria 

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 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 interim final rules published by SBA 

and the Department of the Treasury in 

the Federal Register (85 FR 20811, 85 

FR 20817, 85 FR 21747, 85 FR 23450, 

85 FR 23917, 85 FR 26321, 85 FR 26324, 

and 85 FR 27287) and posted on May 8, 

2020, May 13, 2020, and May 14, 2020 

(85 FR 29845, 85 FR 29842, and 85 FR 

29847) (collectively, the PPP Interim 

Final Rules). 

1. Treatment of Foreign Affiliates 

Are employees of foreign affiliates 

included for purposes of determining 

whether a PPP borrower has more than 

500 employees? 

Yes. The CARES Act specifies that an 

entity is eligible for a PPP loan only if 

it is (1) a small business concern, or (2) 

a business concern, nonprofit 

organization described in section 

501(c)(3) of the Internal Revenue Code, 

veterans organization described in 

section 501(c)(19) of the Internal 

Revenue Code, or Tribal business 

concern described in section 31(b)(2)(C) 

of the Small Business Act that employs 

not more than the greater of 500 

employees, or, if applicable, SBA’s 

employee-based size standard for the 

industry in which the entity operates. 

SBA’s affiliation regulations provide 

that to determine a concern’s size, 

employees of the concern ‘‘and all of its 

domestic and foreign affiliates’’ are 

included. 13 CFR 121.301(f). Therefore, 

to calculate the number of employees of 

an entity for purposes of determining 

eligibility for the PPP, an entity must 

include all employees of its domestic 

and foreign affiliates, except in those 

limited circumstances where the 

affiliation rules expressly do not apply 

to the entity.1 Any entity that, together 

Federal Register / Vol. 85, No. 99 / Thursday, May 21, 2020 / Rules and Regulations 30837 

is disbursed, is assigned a North American Industry 

Classification System code beginning with 72; (2) 

any business concern operating as a franchise that 

is assigned a franchise identifier code by the 

Administration; and (3) any business concern that 

receives financial assistance from a company 

licensed under section 301 of the Small Business 

Investment Act of 1958 (15 U.S.C. 681). SBA also 

applies affiliation exceptions to certain categories of 

entities. 13 CFR 121.103(b). 

2For purposes of this safe harbor, a borrower 

must include its affiliates to the extent required 

under the interim final rule on affiliates, 85 FR 

20817 (April 15, 2020). SBA’s affiliation exceptions 

in 13 CFR 121.103(b) apply to the PPP. 

with its domestic and foreign affiliates, 

does not meet the 500-employee or 

other applicable PPP size standard is 

therefore ineligible for a PPP loan. 

However, as an exercise of 

enforcement discretion due to 

reasonable borrower confusion based on 

SBA guidance (which was later resolved 

through a clarifying FAQ on May 5, 

2020), SBA will not find any borrower 

that applied for a PPP loan prior to May 

5, 2020 to be ineligible based on the 

borrower’s exclusion of non-U.S 

employees from the borrower’s 

calculation of its employee headcount if 

the borrower (together with its 

affiliates) 2 had no more than 500 

employees whose principal place of 

residence is in the United States. Such 

borrowers shall not be deemed to have 

made an inaccurate certification of 

eligibility solely on that basis. Under no 

circumstances may PPP funds be used 

to support non-U.S. workers or 

operations. 

2. 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 

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. 2020–10967 Filed 5–19–20; 11:15 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2019–0204; Project 

Identifier 2018–CE–042–AD; Amendment 

39–21129; AD 2020–11–04] 

RIN 2120–AA64 

Airworthiness Directives; Learjet Inc. 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Learjet Inc. Model 60 airplanes. This AD 

was prompted by a report of a reverse 

thrust command accelerating the 

airplane instead of decelerating the 

airplane. The acceleration with reverse 

thrust commanded occurred when the 

thrust reverser doors were in the stowed 

position instead of the deployed 

position. This AD requires installing a 

thrust reverser (T/R) Voice Command 

Warning System (VCWS) to alert the 

crew of a T/R malfunction. The FAA is