[Federal Register Volume 85, Number 44 (Thursday, March 5, 2020)]
[Proposed Rules]
[Pages 12875-12876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04465]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 85, No. 44 / Thursday, March 5, 2020 /
Proposed Rules
[[Page 12875]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 109
RIN 3245-AH15
Regulatory Reform Initiative: Intermediary Lending Pilot Program
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The U.S. Small Business Administration (SBA) is proposing to
remove three regulations governing the application and selection
process for Intermediary Lending Pilot (ILP) program Intermediaries.
These regulations are no longer necessary because SBA is no longer
authorized to select new ILP Intermediaries. The removal of these
regulations will assist the public by simplifying SBA's regulations.
SBA is also proposing to make two conforming amendments to avoid
confusion.
DATES: Comments must be received on or before May 4, 2020.
ADDRESSES: You may submit comments, identified by RIN: 3245-AH15, by
any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail or Hand Delivery/Courier: Daniel Upham, Chief,
Microenterprise Development Division, Office of Financial Assistance,
U.S. Small Business Administration, 409 Third Street SW, Washington, DC
20416.
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 to Daniel Upham, Chief, Microenterprise Development
Division, Office of Financial Assistance, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416, or send an
email to [email protected]. Highlight the information that you
consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review the information and make
the final determination on whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Daniel Upham, Chief, Microenterprise
Development Division, Office of Financial Assistance, (202) 205-7001 or
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
A. Part 109, Intermediary Lending Pilot Program
The Intermediary Lending Pilot (ILP) program was authorized by
Congress as a 3-year pilot program in the Small Business Jobs Act of
2010, Public Law 111-240, enacted September 27, 2010. Under the ILP
program, SBA provided loans to selected nonprofit intermediaries (ILP
Intermediaries) for the purpose of providing loans to small businesses.
Currently, there are 33 lenders participating in the ILP program. SBA
was authorized to make loans to ILP Intermediaries in fiscal years
2011, 2012, and 2013. This rule proposes to remove three regulations
from the Code of Federal Regulations (CFR) that are no longer necessary
because SBA is no longer authorized to select new ILP Intermediaries.
B. Executive Order 13771
On January 30, 2017, President Trump signed Executive Order 13771,
Reducing Regulation and Controlling Regulatory Costs, which, among
other objectives, is intended to ensure that an agency's regulatory
costs are prudently managed and controlled so as to minimize the
compliance burden imposed on the public. For every new regulation an
agency proposes to implement, unless prohibited by law, this Executive
Order requires the agency to (i) identify at least two existing
regulations that the agency can cancel; and (ii) use the cost savings
from the cancelled regulations to offset the cost of the new
regulation.
C. Executive Order 13777
On February 24, 2017, the President issued Executive Order 13777,
Enforcing the Regulatory Reform Agenda, which further emphasized the
goal of the Administration to alleviate the regulatory burdens placed
on the public. Under Executive Order 13777, agencies must evaluate
their existing regulations to determine which ones should be repealed,
replaced, or modified. In doing so, agencies should focus on
identifying regulations that, among other things: Eliminate jobs or
inhibit job creation; are outdated, unnecessary, or ineffective; impose
costs that exceed benefits; create a serious inconsistency or otherwise
interfere with regulatory reform initiatives and policies; or are
associated with Executive Orders or other Presidential directives that
have been rescinded or substantially modified. SBA has engaged in this
process and has identified the regulations in this rulemaking as
appropriate for removal in accordance with Executive Order 13777.
II. Section by Section Analysis
A. Section 109.200, Application To Become an ILP Intermediary.
This section describes the application process to become an ILP
Intermediary, including publication of a Notice of Funds Availability
(NOFA) in the Federal Register to announce the availability of funds
for the program and specify any special rules, procedures, and
restrictions for a particular funding round. This section also includes
the requirements for an ILP Intermediary application.
B. Section 109.210, Evaluation and Selection of ILP Intermediaries.
This section describes the process by which SBA evaluates ILP
Intermediary applications. The rule specifies that SBA will make loans
to not more than 20 selected ILP Intermediaries in each fiscal year for
which funding was available, and that applications will be evaluated
and scored based on the criteria specified in the NOFA.
C. Section 109.220, Loan Limits--Loans to ILP Intermediaries.
Section 109.220 states that no ILP Intermediary may receive more
than $1 million in ILP Loans.
SBA's authority to make loans to ILP Intermediaries has expired;
therefore, SBA is not accepting any new ILP Intermediary applications.
Since the program no longer allows for new ILP Intermediaries, the
removal of these three regulations will reduce confusion and regulatory
burden. Requirements for current ILP Intermediaries are found in the
remaining provisions of part 109.
[[Page 12876]]
D. Conforming Amendments
In addition to removing the three regulations described above, SBA
also proposes to make two conforming amendments. First, SBA proposes to
revise the definition of ILP Intermediary in Section 109.20 to remove
reference to the competitive application process. Because the
regulations describing the application process (Sections 109.200 and
109.210) are proposed for removal, this revision is necessary to avoid
confusion. Second, SBA proposes to remove the cross-reference to
section 120.173, Lead-based paint, in Section 109.440. Section 109.440
states that loans made by an ILP Intermediary must comply with all
applicable laws, including SBA's Lead-based paint regulation in Section
120.173. In a separate rulemaking, SBA is proposing to remove Section
120.173 because it is no longer necessary--16 CFR part 1303 already
bans paint containing a concentration of lead in excess of 0.009% (90
parts per million) for use in residences, schools, hospitals, parks,
playgrounds, and public buildings or other areas where consumers will
have direct access to the painted surface. Therefore, SBA proposes to
remove the cross-reference in part 109 as well.
III. Compliance With Executive Orders 12866, 13771, 12988, and 13132,
the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612)
A. Executive Order 12866
The Office of Management and Budget has determined that this
proposed rule does not constitute a significant regulatory action for
purposes of Executive Order 12866 and is not a major rule under the
Congressional Review Act, 5 U.S.C. 801, et seq.
B. Executive Order 13771
This proposed rule is expected to be an Executive Order 13771
deregulatory action with an annualized net savings of $7,677 and a net
present value of $109,667 in savings, both in 2016 dollars. This rule
would remove information about applying to the ILP program which would
save potential applicants time in reading and researching/inquiring
about this obsolete program and reduce confusion around whether
applications are being accepted.
SBA is aware of approximately 500 nonprofit lenders that could
potentially research the ILP program application process. Assuming
that, each year, 20 percent of these nonprofit lenders would review
SBA's ILP program regulations and that each would save 1 hour of review
time due to removal of the regulations discussed in this rule, these
non-profits would be relieved of 100 burden hours. Valuing this time at
$79.99 per hour--the wage of a financial manager based on 2018 U.S.
Bureau of Labor Statistics (BLS) data and adding 30 percent more for
benefits--this produces total savings per year of $7,999 in current
dollars.
C. 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 retroactive or preemptive effect.
D. 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.
E. Paperwork Reduction Act
The SBA has determined that this proposed rule does not affect any
existing collection of information.
F. Regulatory Flexibility Act
When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (RFA) requires the agency to ``prepare and make
available for public comment an initial regulatory flexibility
analysis'' which will ``describe the impact of the proposed rule on
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an
agency to certify a rule, in lieu of preparing an analysis, if the
proposed rulemaking is not expected to have a significant economic
impact on a substantial number of small entities.
SBA is aware of approximately 500 nonprofit lenders that could
potentially search for and read about applying to the ILP program. The
removal of obsolete regulations related to the ILP program would reduce
confusion for these lenders and the time required to read and/or
inquire about obsolete regulations. The total annual savings to these
nonprofit lenders is estimated at $7,999 in current dollars, or about
$16 per nonprofit lender. More information on this estimate can be
found in the Executive Order 13771 discussion above.
Therefore, SBA hereby certifies that this proposed rule would not
have a significant economic impact on a substantial number of small
entities. The SBA invites comments from the public on this
certification.
List of Subjects in 13 CFR Part 109
Community development, Loan program--business, Reporting and
recordkeeping requirements, Small businesses.
Accordingly, for the reasons stated in the preamble, SBA proposes
to amend 13 CFR part 109 as follows:
PART 109--INTERMEDIARY LENDING PILOT PROGRAM
0
1. The authority citation for part 109 continues to read as follows:
Authority: 15 U.S.C. 634(b)(6), (b)(7), and 636(l).
Sec. 109.20 [Amended]
0
2. Amend Sec. 109.20 by revising the definition of ``ILP
Intermediary'' as follows:
* * * * *
ILP Intermediary means a private, nonprofit entity that has
received an ILP Loan.
* * * * *
Sec. Sec. 109.200, 109.210, and 109.220 [Removed and Reserved]
0
3. Remove and reserve Sec. Sec. 109.200, 109.210, and 109.220.
Sec. 109.440 [Amended]
0
4. Amend Sec. 109.440 by removing the words ``120.173 (Lead-based
paint),''.
Dated: February 18, 2020.
Jovita Carranza,
Administrator.
[FR Doc. 2020-04465 Filed 3-4-20; 8:45 am]
BILLING CODE P