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Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Rules and Regulations the Notice and Order instead of from the appeal filing date 13 CFR 134.1208b;
removes language making final decisions precedential 13 CFR
134.1211 b & e; discloses that final decisions rendered under this section may be published by OHA within its discretion with any necessary redactions 13 CFR 134.1211f; and removes language pertaining to protective orders, as the only parties involved in PPP appeals are the appellant and SBA, both of which will already have access to all documents that will not be accessible to the public;
and adds language in 13 CFR 134.1207
to provide for a non-waiver provision.
V. Borrower Appeals of Final SBA Loan Review Decisions Under the Paycheck Protection Program This final rule adopts with changes portions of the previously-issued interim final rule on Appeals of SBA
Loan Review Decisions Under the Paycheck Protection Program. This final rule does not make any changes to 13
CFR 134.102w regarding OHAs jurisdiction over PPP appeals, and the current provision in the Code of Federal Regulations will remain the same. This final rule revises the authority citation for subpart L to incorporate 15 U.S.C.
636a37 and 15 U.S.C. 636m, which were included in the Economic Aid Act.
This final rule also revises subpart L as set forth in the prior interim final rule.
Section 134.1201, Scope of rules in this subpart, provides a process for appeal to OHA of certain final SBA loan review decisions under the PPP and any other PPP matter referred to OHA by the Administrator. PPP loans include first draw PPP loans made under Section 7a36 of the Small Business Act and second draw PPP loans made under Section 7a37 of the Small Business Act. Subpart L provides that an appealable final SBA loan review decision is an official written decision by SBA, after SBA completes a review of a PPP loan, that a borrower 1 was ineligible for a PPP loan; 2 was ineligible for the PPP loan amount received or used the PPP loan proceeds for unauthorized uses; 3 is ineligible for PPP loan forgiveness in the amount determined by the lender in its full approval or partial approval decision issued to SBA; and/or 4 is ineligible for PPP loan forgiveness in any amount when the lender has issued a full denial decision to SBA.
Subpart L applies to loan review decisions made by SBA after SBA
completes a review of a PPP loan as set forth in Part III.1 and Part III.2c. of the Loan Review IFR, as amended by the Second Loan Review IFR, Third Loan
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Review IFR, and Fourth Loan Review IFR and as further amended. Subpart L
further provides that any decision by a lender concerning a PPP loan, including a borrowers PPP loan application or a borrowers PPP loan forgiveness application, may not be appealed directly to OHA. In addition, this section sets forth other types of decisions and determinations that are not covered by subpart L, and makes clear that subpart C, Rules of Practice for Appeals From Size Determinations and NAICS Code Designations, is not applicable to appeals from final SBA
loan review decisions. This section sets forth the specific provisions from subpart B, OHAs general Rules of Practice, that are applicable to subpart L. Other provisions from subpart B that are not specifically referenced in subpart L do not apply to subpart L. As stated above, a timely appeal by a PPP
borrower of a final SBA loan review decision will extend the deferment period of the PPP loan until a final decision is issued pursuant to 134.1211. However, if SBA remits to the lender the PPP loan forgiveness amount set forth in the decision issued by the lender to SBA, the borrower may not file an OHA appeal, and the borrower must begin repayment of any remaining balance of its PPP loan. This section makes clear that a borrower must file an appeal with OHA on a final SBA loan review decision before appealing to the appropriate Federal district court.
Section 134.1202, Commencement of appeals of final SBA loan review decisions, provides that an appellant must file its appeal with OHA within 30
calendar days of receipt of the final SBA
loan review decision and references OHAs website, where an appellant will be able to file and manage its appeal using the OHA Case Portal. By utilizing the OHA Case Portal, an appellants appeal will automatically be served upon the Associate General Counsel for Litigation at OLITService@sba.gov. The section also provides specific information on how to calculate days. In addition, this section makes clear that a timely appeal by a PPP borrower of a final SBA loan review decision extends the deferment period of the PPP loan until a final decision is issued pursuant to 134.1211. This section also requires an appellant to provide the lender with a copy of its appeal in order for the lender to extend the deferment period of the PPP loan until a final decision is issued pursuant to 134.1211.
Section 134.1203, Standing, provides that only the borrower on a loan for which SBA has issued a final SBA loan review decision has standing to appeal
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the final SBA loan review decision to OHA. Individual owners of a borrower entity and lenders do not have standing to appeal a final SBA loan review decision.
Section 134.1204, The appeal petition, provides that an appeal petition must include the following information: 1 A copy of the final SBA
loan review decision that is being appealed and the date it was received;
2 a full and specific statement as to why the final SBA loan review decision is alleged to be erroneous, together with all factual information and legal arguments supporting the allegations;
and 3 the name, address, telephone number, email address and signature of the appellant or its attorney. This section makes clear that a Notice of Paycheck Protection Program Forgiveness Payment does not provide a borrower with a right to appeal to OHA.
This section further provides that an appeal petition that does not include the above may be dismissed by the Judge and permits SBA to move for a motion for more definite statement or otherwise comply with the requirements of this section.
Section 134.1205, Dismissal, provides that the Judge must dismiss the appeal if: 1 The appeal is beyond OHAs jurisdiction as set forth under 134.1201; 2 the appeal is untimely under 134.1202; 3 the appellant lacks standing to appeal under 134.1203; or 4 is premature because SBA has not yet made a final SBA loan review decision. This section also provides that the Judge may dismiss the appeal if, among other things, the appeal does not, on its face, allege specific facts that if proven to be true, warrant reversal or remand of the final SBA loan review decision.
Section 134.1206, Notice and Order, provides that upon receipt of an appeal challenging a final SBA loan review decision, OHA will assign the matter to either an Administrative Law Judge or an Administrative Judge in accordance with 134.218. Unless the appeal will be dismissed under 134.1205, the Judge will issue a Notice and Order establishing a deadline for production of the administrative record and specifying the deadline by which SBA may respond to the appeal.
Section 134.1207, The administrative record, provides that the administrative record is due 20 calendar days after issuance of the Notice and Order. The administrative record shall include nonprivileged, relevant documents that SBA
considered in making its decision or that were before SBA at the time of the decision. The administrative record need not, however, contain all
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