Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40775 

other than that specified in this section, 

DOE must publish a document in the 

Federal Register and the material must 

be available to the public. Standards can 

be obtained from the sources in this 

section. All approved material is 

available for inspection at the U.S. 

Department of Energy, Office of Energy 

Efficiency and Renewable Energy, 

Building Technologies Program, sixth 

Floor, 950 L’Enfant Plaza SW, 

Washington, DC 20024, (202) 586–2945, 

https://www.energy.gov/eere/buildings/ 

appliance-and-equipment-standardsprogram, and may be obtained from the 

other sources in this section. It is also 

available for inspection at the National 

Archives and Records Administration 

(NARA). For information on the 

availability of this material at NARA, 

email: fedreg.legal@nara.gov, or go to: 

www.archives.gov/federal-register/cfr/ 

ibr-locations.html. 

(b) CSA. Canadian Standards 

Association, Sales Department, 5060 

Spectrum Way, Suite 100, Mississauga, 

Ontario, L4W 5N6, Canada, 1–800–463– 

6727, or https://www.csagroup.org/ 

store. 

(1) CSA C747–09 (Reaffirmed 2014) 

(‘‘CSA C747–09’’), ‘‘Energy efficiency 

test method for small motors’’ as revised 

through August 2016, including Update 

No. 1; IBR approved for § 431.484. 

(2) [Reserved] 

(c) UL. Underwriters Laboratories, 333 

Pfingsten Road, Northbrook, IL 60062, 

(841) 272–8800, or go to https://

www.ul.com. 

(1) UL 1004–10 (1004–10:2020), 

‘‘Standard for Safety for Pool Pump 

Motors,’’ First Edition, Dated February 

28, 2020; IBR approved for §§ 431.481 

and 431.483. 

(2) [Reserved] 

§ 431.483 Definitions. 

The definitions applicable to this 

subpart are defined in Section 2 

‘‘Glossary’’ of UL 1004–10:2020 

(incorporated by reference, see 

§ 431.482). 

§ 431.484 Test procedure. 

(a) Scope. Pursuant to section 343(a) 

of EPCA, this section provides the test 

procedures for measuring the efficiency 

of dedicated-purpose pool pump 

motors. (42 U.S.C. 6314) For purposes of 

this part and EPCA, the test procedures 

for measuring the efficiency of 

dedicated-purpose pool pump motors 

shall be the test procedure specified in 

paragraph (b) of this section. 

(b) Testing and calculations. At such 

time as compliance is required with a 

labeling requirement or an energy 

conservation standard, the full-load 

efficiency of each dedicated-purpose 

pool pump motor model (inclusive of 

the drive, if the dedicated-purpose pool 

pump motor model is placed into 

commerce with a drive, or is unable to 

operate without the presence of a drive) 

is determined in accordance with CSA 

C747–09, Section 1.6 ‘‘Scope’’, Section 

3 ‘‘Definitions’’, Section 4 ‘‘General 

requirements’’, Section 5, ‘‘General test 

requirements’’, and Section 6 ‘‘Test 

method’’ (incorporated by reference, see 

§ 431.482). 

[FR Doc. 2021–15759 Filed 7–28–21; 8:45 am] 

BILLING CODE 6450–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 120 

RIN 3245–AH78 

Debt Refinancing in the 504 Loan 

Program 

AGENCY: U.S. Small Business 

Administration (SBA). 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This interim final rule 

implements section 328 of the Economic 

Aid to Hard-Hit Small Businesses, 

Nonprofits, and Venues Act, which 

revises the requirements for refinancing 

debt in the 504 Loan Program, 

including: For 504 debt refinancing 

involving expansions, increasing the 

amount of existing indebtedness that 

may be refinanced; and for 504 debt 

refinancing not involving expansions, 

removing two limitations on the 

program, reinstating an alternate job 

retention goal for the refinancing 

project, revising the definition of 

qualified debt, and removing the 

prohibition against Certified 

Development Companies (‘‘CDCs’’) 

participating in the Premier Certified 

Lenders Program using their delegated 

authority to make these loans. 

DATES: Effective Date: This rule is 

effective July 29, 2021. 

Comment Date: Comments must be 

received on or before September 27, 

2021. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AH78, through 

the Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

SBA will post all comments on http:// 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 

please submit the information via email 

to 504refi@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: 

Linda Reilly, Chief, 504 Program 

Branch, Office of Financial Assistance, 

Small Business Administration, 409 3rd 

Street SW, Washington, DC 20416; 

telephone: (202) 604–5032; email: 

linda.reilly@sba.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

The 504 Loan Program is an SBA 

financing program authorized under 

title V of the Small Business Investment 

Act of 1958, 15 U.S.C. 695 et seq. 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, in an effort 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 SBAguaranteed debenture); and a 

contribution from the Borrower of at 

least 10 percent equity. 

In addition, the 504 Loan Program 

may be used to refinance debt under 

two options authorized under section 

502(7)(B) and (C) of the Small Business 

Investment Act of 1958. First, if a 504 

Project involves the expansion of the 

small business, any amount of existing 

indebtedness that does not exceed 50 

percent of the project cost of the 

expansion may be refinanced and added 

to the project’s cost (Debt Refinancing 

with Expansion) under the conditions 

set forth in section 502(7)(B) and the 

implementing regulations. See 13 CFR 

120.882(e) and (f). Second, debt 

refinancing is available for a 504 Project 

that does not involve the expansion of 

the small business under the 

requirements set forth in section 

502(7)(C) and 13 CFR 120.882(g) (Debt 

Refinancing without Expansion). 

Section 328(a) of the Economic Aid to 

Hard-Hit Small Businesses, Nonprofits, 

and Venues Act (Economic Aid Act), 


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40776 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 

enacted December 27, 2020, Public Law 

116–260, revises the conditions and 

requirements for refinancing debt in the 

504 Loan Program as follows: 

(1) With respect to Debt Refinancing 

with Expansion, 13 CFR 120.882(e), the 

Economic Aid Act increases the amount 

of existing indebtedness that may be 

refinanced as part of a 504 Project from 

not more than 50 percent of the project 

cost of the expansion to not more than 

100 percent of the project cost; 

(2) With respect to Debt Refinancing 

without Expansion, 13 CFR 120.882(g), 

the Economic Aid Act: 

(a) Eliminates the condition that this 

program shall only be in effect in any 

fiscal year during which the cost to the 

Federal Government of making 

guarantees under 13 CFR 120.882(g) and 

under the 504 Loan Program is zero; 

(b) Eliminates the requirement that a 

CDC limit its financing under the 504 

Loan Program so that, during any 

Federal fiscal year, new financings 

under 13 CFR 120.882(g) do not exceed 

50% of the dollars the CDC loaned 

under the 504 Loan Program, including 

under 13 CFR 120.882(g), during the 

previous fiscal year, unless otherwise 

waived; 

(c) Eliminates the prohibition against 

Premier Certified Lender Program 

(PCLP) CDCs using delegated authority 

to approve loan applications for Debt 

Refinancing without Expansion; 

(d) Reinstates an alternate job 

retention standard that was previously 

removed from the Debt Refinancing 

without Expansion Program by section 

521 of division E of the Consolidated 

Appropriations Act, 2016, Public Law 

114–113, enacted on December 18, 

2015; 

(e) Revises the definition of ‘‘qualified 

debt’’ to mean debt that was incurred 

not less than 6 months before the date 

of application instead of 2 years before 

the date of application; 

(f) Removes from the definition of 

‘‘qualified debt’’ the condition that the 

debt not be subject to a guarantee by a 

Federal agency; and 

(g) Eliminates from the definition of 

‘‘qualified debt’’ the requirement that 

the borrower be current on all payments 

for not less than 1 year before the date 

of the application for refinancing. 

As described in the section-by-section 

analysis below, SBA is issuing this 

interim final rule to conform the current 

rules to the requirements of the 

Economic Aid Act. 

II. Comments and Immediate Effective 

Date 

This interim final rule is effective 

without the advance notice and public 

comment required by section 553 of the 

Administrative Procedure Act (APA), 5 

U.S.C. 553(b)(3)(B), because section 303 

of the Economic Aid Act authorizes 

SBA to issue regulations to implement 

the amendments described above 

without regard to notice requirements. 

In addition, pursuant to section 

553(d)(1), this rule is exempt from the 

APA’s 30-day delayed effective date 

requirement on the basis that it is a 

substantive rule that relieves restrictions 

relating to the debt refinancing options 

available to small businesses. SBA has 

also determined that, pursuant to 

section 553(d)(3), there is good cause for 

dispensing with the 30-day delayed 

effective date on the grounds that it 

would be contrary to the public interest. 

To meet the immediate debt refinancing 

needs of small businesses impacted by 

the COVID–19 pandemic, it is essential 

to be able to implement the statutory 

changes to the refinancing programs as 

expeditiously as possible. 

Although this rule is being published 

as an interim final rule, comments are 

solicited from interested members of the 

public. These comments must be 

submitted on or before the deadline for 

comments stated in this rule. SBA will 

consider any comments it receives and 

the need for making any amendments as 

a result of the comments. 

III. Section-by-Section Analysis 

Section 120.882(e). This provision 

currently states that the amount of 

existing indebtedness that may be 

refinanced is limited to no more than 50 

percent of the project cost of the 

expansion. Section 328(a)(2)(A) of the 

Economic Aid Act amends section 

502(7)(B) of the Small Business 

Investment Act to increase the 

percentage and, accordingly, SBA is 

revising this provision to increase the 

amount of existing indebtedness that 

may be refinanced to no more than 100 

percent of the project cost. 

Section 120.882(g)(3). This section 

currently provides that the approval of 

a Refinancing Project is subject to the 

requirement that the cost to the Federal 

Government of making guarantees under 

13 CFR 120.882(g) and under the 504 

Loan Program is zero during the fiscal 

year in which the guarantee is made. 

Section 328(a)(1) of the Economic Aid 

Act repeals this statutory requirement 

and, therefore, SBA is removing this 

requirement. 

In its place, this provision will set 

forth the conditions and requirements 

that will apply to the refinancing of a 

loan that is subject to a guarantee by a 

Federal agency or department. As 

indicated above, the Economic Aid Act 

removes the prohibition against 

refinancing a loan that is subject to a 

guarantee by a Federal agency or 

department. Although these loans may 

now be refinanced in the Debt 

Refinancing without Expansion 

program, the rule will provide that they 

must comply with SBA’s policies 

related to the refinancing of existing 504 

and 7(a) loans, including that: 

(1) For an existing 504 loan, either 

both the Third Party Loan and the 504 

loan must be refinanced, or the Third 

Party Loan must have been paid in full; 

and 

(2) for an existing 7(a) loan, the CDC 

must verify in writing that the present 

lender is either unwilling or unable to 

modify the current payment schedule. 

In addition, in the case of same 

institution debt, if the Third Party 

Lender or the CDC affiliate as 

authorized under 13 CFR 120.820 is the 

7(a) lender, the loan will be eligible for 

504 refinancing only if the lender is 

unable to modify the terms of the 

existing loan because a secondary 

market investor will not agree to 

modified terms. 

In addition, the rule will require that 

the refinancing of any Federallyguaranteed loan will provide a 

substantial benefit to the borrower. 

‘‘Substantial benefit’’ will mean that the 

portion of the new installment amount 

attributable to the debt being refinanced 

must be at least 10 percent less than the 

existing installment amount(s). 

Prepayment penalties, financing fees, 

and other financing costs must be added 

to the amount being refinanced in 

calculating the percentage reduction in 

the new installment payment. The 

portion of the new installment amount 

attributable to Eligible Business 

Expenses will not need to be included 

in this calculation. The rule will also 

allow the Director, Office of Financial 

Assistance (D/FA) or designee to 

approve an exception to the 10 percent 

reduction requirement for good cause, 

and will not allow PCLP CDCs to use 

their delegated authority to approve a 

loan requiring this exception. 

Section 120.882(g)(11). This section 

currently states that PCLP CDCs may not 

use delegated authority to approve 

refinancing under 13 CFR 120.882(g). 

Section 328(a) of the Economic Aid Act 

removes this statutory prohibition and, 

accordingly, SBA is removing the 

current language. In its place, the rule 

will state that PCLP CDCs may not 

approve the refinancing of same 

institution debt under their delegated 

authority and must submit the loan to 

SBA for approval. This requirement is 

consistent with SBA’s long-standing 

policy of prohibiting its participating 

lenders from using their delegated 

authority to approve the financing of 


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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40777 

same institution debt due to the 

potential conflict of interest and the risk 

of the 504 loan proceeds being used to 

shift to SBA a potential loss from the 

existing debt. 

Section 120.882(g)(15). SBA is 

redesignating the current paragraph 

(g)(15), Definitions, as paragraph (g)(16), 

and adding a new paragraph (g)(15) to 

set forth the alternate job retention 

standard that is reinstated by section 

328(a) of the Economic Aid Act. Under 

this alternate job retention standard, the 

Agency may provide a 504 loan in the 

amount that is not more than the 

product obtained by multiplying the 

number of employees of the borrower by 

$75,000. The Economic Aid Act 

provides that the number of employees 

of a borrower is equal to the sum of: 

(1) The number of full-time 

employees of the borrower on the date 

on which the borrower applies for a 

loan under this subparagraph; and 

(2) the product obtained by 

multiplying: 

(a) The number of part-time 

employees of the borrower on the date 

on which the borrower applies for a 

loan under this subparagraph, by 

(b) the quotient obtained by dividing 

the average number of hours each parttime employee of the borrower works 

each week by 40. 

An example of how this standard is 

calculated is included in the text of the 

rule. 

Section 120.882(g)(16). As stated 

above, SBA is redesignating the current 

paragraph (g)(15), Definitions, as 

paragraph (g)(16) and is making five 

changes to the definition of ‘‘Qualified 

debt’’. First, under the current language 

of paragraph (i), the debt must not have 

been incurred less than 2 years before 

the date of the application for 

refinancing. However, section 328(a) of 

the Economic Aid Act has shortened 

this period to 6 months before the date 

of the application for refinancing. 

Accordingly, SBA is revising this 

paragraph by replacing 2 years with 6 

months. 

Second, paragraph (i) currently allows 

a loan that was refinanced within the 2 

years before the date of application (the 

most recent loan) to be deemed incurred 

not less than 2 years before the date of 

the application provided that the effect 

of the most recent loan was to extend 

the maturity date without advancing 

any additional proceeds. With the 

minimum age of the qualified debt 

shortened from 2 years to 6 months, 

SBA believes that it is no longer 

necessary to address this situation and 

is, therefore, removing the second and 

third sentences of paragraph (i). 

Third, paragraph (ii) currently 

excludes debt that is subject to a 

guarantee by a Federal agency or 

department. As stated above, section 

328(a) of the Economic Aid Act no 

longer includes this statutory exclusion 

and SBA is removing this paragraph and 

renumbering the remaining paragraphs 

accordingly. The conditions and 

requirements that will apply to the 

refinancing of a loan that is subject to 

a Federal guarantee will be set forth in 

paragraph (g)(3). 

Fourth, under the current paragraph 

(vi), the definition of qualified debt 

excludes a Third Party Loan that is part 

of an existing 504 Project. However, 

under the new paragraph (g)(3), an 

existing 504 loan may be refinanced 

when both the Third Party Loan and the 

504 loan are being refinanced. 

Accordingly, SBA is revising this 

paragraph, which will be newly 

designated as paragraph (v), to 

incorporate this exception to the general 

prohibition against a qualified debt 

including a Third Party Loan. 

Fifth, the current paragraph (vii) 

reflects the statutory requirement that, 

for the debt to qualify for refinancing, 

the applicant must be current on all 

payments due for not less than one year 

preceding the date of application. 

Section 502(7)(C) of the Small Business 

Investment Act, as amended by section 

328(a) of the Economic Aid Act, no 

longer includes this requirement and, 

accordingly, SBA is removing this 

paragraph from the regulations. In 

accordance with prudent lending 

standards, SBA expects CDCs to 

consider whether the applicant is 

current on all payments due, and the 

applicant’s history of delinquency, in its 

credit analysis. 

Section 120.882(g)(16). The phrase 

‘‘Same institution debt’’ is currently 

used in connection with the Debt 

Refinancing without Expansion program 

only in reference to the Third Party 

Loan, see § 120.882(g)(13), and, thus, the 

current definition of ‘‘same institution 

debt’’ references only the Third Party 

Lender. With the requirement in 

§ 120.882(g)(11) that PCLP CDCs cannot 

use their delegated authority to approve 

the refinancing of same institution debt 

in the Debt Refinancing without 

Expansion program, SBA is revising the 

definition of ‘‘Same institution debt’’ to 

also mean the debt of the CDC (or its 

affiliates) that is providing funds for the 

refinancing. 

Compliance With Executive Orders 

12866, 12988, 13132, and 13563, the 

Congressional Review Act (5 U.S.C. 

801–808), Paperwork Reduction Act (44 

U.S.C., Ch. 35), and the Regulatory 

Flexibility Act (5 U.S.C. 601–612) 

Executive Orders 12866 and 13563 

The Office of Management and Budget 

(OMB) has determined that this rule 

constitutes a ‘‘significant regulatory 

action’’ for purposes of Executive 

Orders 12866 and 13563. 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 conditions arising from the 

COVID–19 pandemic. 

As shown in the table below, during 

the five-year period spanning FY 2016 

and FY 2020, a total of 31,248 504 loans 

were approved for a total gross approval 

amount as of May 31, 2021 of 

$25,720,047,200. In addition, during 

this five-year period, SBA approved 202 

debt refinance with expansion loans on 

average per year with an average annual 

dollar volume of $237,880,000, and 

approved 209 debt refinance without 

expansion loans on average per year 

with an average annual dollar volume of 

$203,339,000. Of the debt refinance 

with expansion loans, only 16 

refinanced a debt that equaled 50 

percent of the expansion costs; if these 

borrowers had been able to refinance 

100 percent of the expansion costs 

instead of 50 percent, and assuming that 

all these borrowers did so, these 

borrowers would have been able to 

borrow $15 million more over five 

years, or about $3 million more 

annually. 

TABLE 1—504 LOAN ACTIVITY FY 2016–FY 2020 

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 

Total Number of 504 Loans ....................................... 5,938 6,218 5,874 6,099 7,119 

Total Dollar Volume of 504 Loans Approved ............ $4,840,820,000 $5,111,480,700 $4,844,181,000 $5,042,010,500 $5,881,555,000

Number of 504 Debt Refi With Expansion ................ 193 219 181 181 236 

Dollar Volume of 504 Debt Refi With Expansion ...... $230,987,000 $244,499,000 $215,311,000 $197,484,000 $301,159,000 

Number of 504 Debt Refi Without Expansion ........... 45 266 181 166 386 


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40778 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 

TABLE 1—504 LOAN ACTIVITY FY 2016–FY 2020—Continued 

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 

Dollar Volume of 504 Debt Refi Without Expansion $41,598,000 $289,491,000 $154,745,000 $156,114,000 $374,749,000 

Data as of 5/31/2021, total dollar 

volume is lifetime gross approval 

amount including increases. 

This rule is necessary to implement 

the Economic Aid Act and provide 

economic relief to small businesses 

adversely impacted by COVID–19. SBA 

anticipates that the changes to the 504 

debt refinancing programs will result in 

benefits to small businesses by 

providing greater flexibility to 

restructure debt. 

Congressional Review Act 

OMB’s Office of Information and 

Regulatory Affairs has determined that 

this rule is not a major rule under 

Subtitle E of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (also known as the Congressional 

Review Act), 5 U.S.C. 804(2). 

Executive Order 12988 

This action meets applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. The action does not have 

preemptive effect or retroactive effect. 

Executive Order 13132 

This rule does not have Federalism 

implications as defined in Executive 

Order 13132. It 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 

levels of government, as specified in the 

Executive order. As such it does not 

warrant the preparation of a Federalism 

Assessment. 

Paperwork Reduction Act 

In order to implement the Act, SBA 

has determined that it is necessary to 

modify SBA Form 1244, Application for 

Section 504 Loans, which is currently 

approved under OMB Control Number 

3245–0071, to conform the form to the 

revised requirements for debt 

refinancing loans. The changes do not 

add any new burdens for the 

respondents, rather, in some instances, 

the revisions will result in reduced 

burden as applicants and CDCs no 

longer have to submit certain 

information. 

Summary of Rule Revisions 

(a) The information collection 

currently requires PCLP CDCs to process 

all applications for debt refinancing 

without expansion through the 

Sacramento Loan Processing Center 

(SLPC) and not through the PCLP CDC’s 

delegated authority. As discussed above, 

this requirement was removed by the 

Economic Aid Act and, accordingly, 

SBA is removing it from the information 

collection. This revision does not 

change the information the PCLP CDC is 

required to collect, only how the 

application is processed. In addition, 

consistent with the changes made by 

this rulemaking, SBA is adding two 

questions to clarify that, for debt 

refinancing without expansion, PCLP 

CDCs must process applications through 

the SLPC when the application involves 

the refinancing of same institution debt 

or, in cases involving the refinancing of 

Federally-guaranteed debt, the CDC is 

requesting an exception to the 

requirement that the new installment 

payment be at least 10% less than the 

existing installment amount. 

(b) With respect to the question 

regarding whether the Applicant creates 

or retains the required number of jobs 

per debenture amount, an option has 

been added for the Applicant to indicate 

whether the project is eligible under the 

504 debt refinance alternate job goal 

established by the Economic Aid Act. 

(c) Of the exhibits that are required, 

Exhibit 20 currently requires that, if the 

debt was previously refinanced within 

two years of the date of application, 

non-PCLP CDCs must submit with the 

application (and PCLP CDCs must retain 

in the loan file) copies of the current 

debt and lien instruments as well as 

copies of the debt and lien instruments 

for the debt that was replaced by the 

current debt. With the minimum age of 

the qualified debt shortened from 2 

years to 6 months by the Economic Aid 

Act, SBA is revising the form to remove 

the requirement that these debt and lien 

instruments be included as part of 

Exhibit 20. 

In addition to the changes resulting 

from this rule, SBA is making the 

following technical corrections and 

clarifying changes to Form 1244: (1) 

SBA is adding two questions, consistent 

with the current regulations, to clarify 

when PCLP CDCs must submit 

applications for refinancing with 

expansion to the SLPC instead of 

approving the application under their 

delegated authority; (2) SBA is 

correcting the description of which 

exhibits are to be retained and which 

are to be submitted with the loan 

application; (3) SBA is adding a separate 

entry to facilitate disclosure of the use 

of refinancing proceeds involving land 

purchases only (the current format of 

‘‘Land/Building’’ does not clearly 

indicate how information is to be 

reported); and (4) under the list of 

economic development objectives met 

by the project, SBA is adding references 

to ‘‘base closures’’ and ‘‘minority-owned 

business’’. 

SBA has requested emergency 

approval from OMB for the revised 

information collection to implement the 

Economic Aid Act as expeditiously as 

possible. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires administrative 

agencies to consider the effect of their 

actions on small entities, including 

small non-profit businesses, and small 

local governments. Pursuant to the RFA, 

when an agency issues a rule, the 

agency must prepare an analysis that 

describes whether the impact of the rule 

will have a significant economic impact 

on a substantial number of these small 

entities. However, the RFA requires 

such analysis only where notice and 

comment rulemaking is required. As 

discussed above, SBA is publishing this 

rule as an interim final rule without 

advance notice and public comment 

because section 303 of the Economic 

Aid Act authorizes SBA to issue 

regulations to implement the 

amendments in the Act without regard 

to notice requirements. This rule is, 

therefore, exempt from the RFA 

requirements. 

List of Subjects in 13 CFR Part 120 

Loan programs-business, Small 

businesses, Reporting and 

recordkeeping requirements. 

For the reasons stated in the 

preamble, SBA amends 13 CFR part 120 

as follows: 

PART 120—BUSINESS LOANS 

■ 1. The authority citation for 13 CFR 

part 120 is revised to read as follows: 


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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Rules and Regulations 40779 

Authority: 15 U.S.C. 634(b)(6), (b)(7), 

(b)(14), (h), and note, 636(a), (h), and (m), 

636m, 650, 687(f), 696(3), 697, 697a, and 

697e; Public Law 111–5, 123 Stat. 115; Public 

Law 111–240, 124 Stat. 2504; Public Law 

116–260, 134 Stat. 1182. 

■ 2. Amend § 120.882 as follows: 

■ a. Remove the number ‘‘50’’ in 

paragraph (e) introductory text and add 

the number ‘‘100’’ in its place. 

■ b. Revise paragraphs (g)(3) and (11); 

■ c. Redesignate paragraph (g)(15) as 

paragraph (g)(16); 

■ d. Add a new paragraph (g)(15); 

■ e. In the newly redesignated 

paragraph (g)(16): 

■ i. Remove the paragraph heading; 

■ ii. In the definition for the term 

Qualified debt: 

■ A. Redesignate paragraphs (i) through 

(vii) as paragraphs (A) through (G); 

■ B. Revise newly redesignated 

paragraph (A); 

■ C. Remove newly redesignated 

paragraphs (B) and (G) and further 

redesignate paragraphs (C) through (F) 

as paragraphs (B) through (E); 

■ D. In newly redesignated paragraph 

(B), remove ‘‘(iii)’’, ‘‘13 CFR 120.131 and 

13 CFR 120.870(b)’’, and ‘‘13 CFR 

120.131(b)’’ and add in their places 

‘‘(B)’’, ‘‘§§ 120.131 and 120.870(b)’’, and 

‘‘§ 120.131(b)’’, respectively; 

■ E. Add the word ‘‘and’’ at the end of 

newly redesignated paragraph (D); and 

■ F. Revise newly redesignated 

paragraph (E); and 

■ iii. Revise the definition for the term 

Same institution debt. 

The revisions and addition read as 

follows: 

§ 120.882 Eligible Project costs for 504 

loans. 

* * * * * 

(g) * * * 

(3) A loan that is subject to a 

guarantee by a Federal agency or 

department may be refinanced under 

the following conditions and 

requirements: 

(i) An existing 504 loan may be 

refinanced if both the Third Party Loan 

and the 504 Loan are being refinanced 

or the Third Party Loan has been paid 

in full. 

(ii) An existing 7(a) loan may be 

refinanced if the CDC verifies in writing 

that the present lender is either 

unwilling or unable to modify the 

current payment schedule. In the case of 

same institution debt, if the Third Party 

Lender or the CDC affiliate as 

authorized under § 120.820 is the 7(a) 

lender, the loan will be eligible for 504 

refinancing only if the lender is unable 

to modify the terms of the existing loan 

because a secondary market investor 

will not agree to modified terms. 

(iii) The refinancing will provide a 

substantial benefit to the borrower. For 

purposes of this paragraph (g)(3)(iii), 

‘‘substantial benefit’’ means that the 

portion of the new installment amount 

attributable to the debt being refinanced 

must be at least 10 percent less than the 

existing installment amount(s). 

Prepayment penalties, financing fees, 

and other financing costs must be added 

to the amount being refinanced in 

calculating the percentage reduction in 

the new installment payment, but the 

portion of the new installment amount 

attributable to Eligible Business 

Expenses (as described in paragraph 

(g)(6)(ii) of this section) is not included 

in this calculation. Exceptions to the 10 

percent reduction requirement may be 

approved by the Director, Office of 

Financial Assistance (D/FA) or designee 

for good cause. PCLP CDCs may not use 

their delegated authority to approve a 

loan requiring the exception in this 

paragraph (g)(3)(iii). 

* * * * * 

(11) PCLP CDCs may not approve the 

refinancing of same institution debt 

under their delegated authority and 

must submit the application to SBA for 

approval. 

* * * * * 

(15) Notwithstanding § 120.860, a 

debt may be refinanced under this 

paragraph (g) if it does not meet the job 

creation or other economic development 

objectives set forth in § 120.861 or 

§ 120.862. In such case, the 504 loan 

may not exceed the product obtained by 

multiplying the number of employees of 

the Borrower by $75,000. The number of 

employees of the Borrower is equal to 

the sum of: 

(i) The number of full-time employees 

of the Borrower on the date of the 

application; and 

(ii) The product obtained by 

multiplying: 

(A) The number of part-time 

employees of the Borrower on the date 

of the application; by 

(B) The quotient obtained by dividing 

the average number of hours each parttime employee of the Borrower works 

each week by 40. 

Example to paragraph (g)(15): 30 fulltime employees and 35 part-time 

employees working 20 hours per week 

is calculated as follows: 30 + (35 × (20/ 

40)) = 47.5. The maximum amount of 

the 504 loan would be 47.5 multiplied 

by $75,000, or $3,562,500. 

(16) * * * 

Qualified debt * * * 

(A) That was incurred not less than 6 

months before the date of the 

application for refinancing available 

under this paragraph (g). 

* * * * * 

(E) That is not a Third Party Loan that 

is part of an existing 504 Project, except 

as allowed under paragraph (g)(3) of this 

section. 

* * * * * 

Same institution debt means any debt 

of the CDC or the Third Party Lender, 

or an affiliate of either, that is providing 

funds for the refinancing. 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2021–15975 Filed 7–28–21; 8:45 am] 

BILLING CODE 8026–03–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0605; Project 

Identifier AD–2021–00805–R; Amendment 

39–21664; AD 2021–15–52] 

RIN 2120–AA64 

Airworthiness Directives; Various 

Restricted Category Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for various 

restricted category helicopters originally 

manufactured by Bell Textron Inc. This 

AD was prompted by a fatal accident in 

which an outboard main rotor hub strap 

pin (pin) sheared off during flight, 

resulting in the main rotor blade and the 

main rotor head detaching from the 

helicopter. This AD requires removing 

certain pins from service and prohibits 

installing those pins on any helicopter. 

The FAA previously sent an emergency 

AD to all known U.S. owners and 

operators of these restricted category 

helicopters and is now issuing this AD 

to address the unsafe condition on these 

products. 

DATES: This AD is effective August 13, 

2021. Emergency 2021–15–52, issued on 

July 8, 2021, which contained the 

requirements of this amendment, was 

effective with actual notice. 

The FAA must receive comments on 

this AD by September 13, 2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 


jbell on DSKJLSW7X2PROD with RULES