PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act

II 117TH CONGRESS 1ST SESSION S. 1249 To amend the Small Business Act to modify the maximum paycheck protec- tion program loan amount for farmers and ranchers, sole proprietors, independent contractors, and self-employed individuals, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 20, 2021 Mr. CARDIN (for himself, Mr. LANKFORD, Ms. BALDWIN, Ms. COLLINS, Mr. KING, Mr. PORTMAN, and Mr. MARSHALL) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To amend the Small Business Act to modify the maximum paycheck protection program loan amount for farmers and ranchers, sole proprietors, independent contractors, and self-employed individuals, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘PPP Flexibility for 4 Farmers, Ranchers, and the Self-Employed Act’’. 5 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 1249 IS SEC. 2. CALCULATION OF MAXIMUM PPP LOAN AMOUNT. 1 (a) IN GENERAL.—Section 7(a)(36)(V) of the Small 2 Business Act (15 U.S.C. 636(a)(36)(V)) is amended— 3 (1) by striking clause (i) and inserting the fol- 4 lowing: 5 ‘‘(i) DEFINITION.—In this subpara- 6 graph, the term ‘covered recipient’ means 7 an eligible recipient that— 8 ‘‘(I)(aa) operates as a sole pro- 9 prietorship, as an independent con- 10 tractor, or as a partnership with gross 11 farming income from self-employment; 12 or 13 ‘‘(bb) is an eligible self-employed 14 individual; 15 ‘‘(II) reports farm income or ex- 16 penses on a Schedule F (or any equiv- 17 alent successor schedule); and 18 ‘‘(III) was in business as of Feb- 19 ruary 15, 2020.’’; and 20 (2) by striking clause (iv) and inserting the fol- 21 lowing: 22 ‘‘(iv) PARTNERSHIPS WITH NO EM- 23 PLOYEES.—With respect to a partnership 24 without employees, the maximum covered 25 loan amount shall be equal to the sum of— 26 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 1249 IS ‘‘(I) the product obtained by mul- 1 tiplying— 2 ‘‘(aa) the gross income, lim- 3 ited to the amount attributable to 4 general partners as determined 5 by the sum of their distributive 6 shares of gross farming income 7 from self-employment, that is not 8 more than $100,000 per partner, 9 and no more than $500,000 in 10 total, divided by 12; and 11 ‘‘(bb) 2.5; and 12 ‘‘(II) the outstanding amount of 13 a loan under subsection (b)(2) that 14 was made during the period beginning 15 on January 31, 2020 and ending on 16 April 3, 2020 that the borrower in- 17 tends to refinance under the covered 18 loan, not including any amount of any 19 advance under the loan that is not re- 20 quired to be repaid. 21 ‘‘(v) RECALCULATION.— 22 ‘‘(I) IN GENERAL.—A lender that 23 made a covered loan before the date 24 of enactment of the PPP Flexibility 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 1249 IS for Farmers, Ranchers, and the Self- 1 Employed Act may, at the request of 2 the covered recipient— 3 ‘‘(aa) recalculate the max- 4 imum loan amount applicable to 5 that covered loan based on the 6 formula described in clause (ii), 7 (iii), or (iv), as applicable, if 8 doing so would result in a larger 9 covered loan amount; and 10 ‘‘(bb) provide the covered re- 11 cipient with additional covered 12 loan amounts based on that re- 13 calculation. 14 ‘‘(II) LOAN LIMITATION.—For 15 purposes of receiving a recalculated 16 loan amount related to a covered loan 17 under subclause (I), paragraph 18 (37)(F) shall not apply. 19 ‘‘(III) EFFECT OF FORGIVE- 20 NESS.—Subject to rules issued by the 21 Administrator, a covered recipient 22 shall be eligible to submit a request 23 for a recalculated loan amount related 24 to a covered loan under subclause (I) 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 1249 IS without regard to whether the covered 1 recipient has sought or received for- 2 giveness with respect to the applicable 3 covered loan under section 7A. 4 ‘‘(IV) FORGIVENESS OF RECAL- 5 CULATED LOAN AMOUNT.—For pur- 6 poses of this subparagraph, as soon as 7 is practicable upon expenditure of ad- 8 ditional covered loan amounts pro- 9 vided under subclause (I)— 10 ‘‘(aa) an eligible recipient 11 shall attest to compliance with 12 applicable requirements under 13 this paragraph; and 14 ‘‘(bb) the additional covered 15 loan amounts shall be forgiven 16 under section 7A. 17 ‘‘(V) REIMBURSEMENT FOR 18 LOAN PROCESSING.—The Adminis- 19 trator shall reimburse a lender for 20 processing recalculation requests 21 under this clause in an amount deter- 22 mined by the Administrator.’’. 23 (b) EFFECTIVE DATE; APPLICABILITY.—The amend- 24 ments made by subsection (a) shall be effective as if in- 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 1249 IS cluded in the CARES Act (Public Law 116–136) and shall 1 apply to any loan made pursuant to section 7(a)(36) of 2 the Small Business Act (15 U.S.C. 636(a)(36)) before, on, 3 or after the date of enactment of this Act. 4 SEC. 3. REVISIONS TO LOAN AMOUNT CALCULATION AND 5 ELIGIBILITY. 6 (a) DEFINITIONS.—In this section— 7 (1) the term ‘‘Administrator’’ means the Ad- 8 ministrator of the Small Business Administration; 9 (2) the term ‘‘covered loan’’ means a loan made 10 under paragraph (36) or (37) of section 7(a) of the 11 Small Business Act (15 U.S.C. 636(a)); 12 (3) the term ‘‘eligible applicant’’ means a tax- 13 payer that files Internal Revenue Service Form 14 1040, Schedule C; and 15 (4) the term ‘‘interim final rule’’ means the in- 16 terim final rule of the Small Business Administra- 17 tion entitled ‘‘Business Loan Program Temporary 18 Changes; Paycheck Protection Program – Revisions 19 to Loan Amount Calculation and Eligibility’’, Docket 20 Number SBA–2021–0010. 21 (b) CALCULATION OF MAXIMUM LOAN AMOUNT FOR 22 CERTAIN APPLICANTS.— 23 (1) IN GENERAL.—An eligible applicant apply- 24 ing for a covered loan may calculate the maximum 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 1249 IS amount of the covered loan using the gross income 1 of the eligible applicant, as reported on the applica- 2 ble Internal Revenue Service Form 1040, Schedule 3 C filed by the eligible applicant, that is not more 4 than $100,000. 5 (2) RETROACTIVE EFFECT.—Notwithstanding 6 any provision of the interim final rule, paragraph (1) 7 shall apply with respect to any covered loan made to 8 an eligible applicant that is approved on or after the 9 date of enactment of the Economic Aid to Hard-Hit 10 Small Businesses, Nonprofits, and Venues Act (title 11 III of division N of Public Law 116–260). 12 (c) RECALCULATION.— 13 (1) IN GENERAL.—The Administrator shall cre- 14 ate a process to allow eligible applicants to request 15 a recalculation of the amount of a covered loan and 16 receive additional amounts equal to the difference 17 between the amount of the covered loan originally 18 received by the eligible applicant and the amount of 19 the covered loan based on the application of this sec- 20 tion. 21 (2) LOAN LIMITATION.—For purposes of receiv- 22 ing additional amounts under paragraph (1), section 23 7(a)(37)(F) of the Small Business Act (15 U.S.C. 24 636(a)(37)(F)) shall not apply. 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 1249 IS (3) EFFECT OF FORGIVENESS.—Subject to 1 rules issued by the Administrator, an eligible appli- 2 cant shall be eligible to submit a request for a recal- 3 culated loan amount under paragraph (1) without 4 regard to whether the eligible applicant has sought 5 or received forgiveness with respect to the applicable 6 covered loan under section 7A of the Small Business 7 Act (15 U.S.C. 636m). 8 (4) FORGIVENESS OF ADDITIONAL AMOUNTS.— 9 For purposes of this subsection, as soon as is prac- 10 ticable upon expenditure of additional covered loan 11 amounts provided under paragraph (1)— 12 (A) an eligible applicant shall attest to 13 compliance with applicable requirements under 14 section 7(a)(37) of the Small Business Act (15 15 U.S.C. 636(a)(37)); and 16 (B) the additional loan amounts shall be 17 forgiven under section 7A of the Small Business 18 Act (15 U.S.C. 636m). 19 (5) REIMBURSEMENT FOR LOAN PROC- 20 ESSING.—The Administrator shall reimburse a lend- 21 er for processing recalculation requests under this 22 subsection in an amount determined by the Adminis- 23 trator. 24 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 1249 IS SEC. 4. MAXIMUM AMOUNT OF SECOND DRAW LOAN. 1 (a) IN GENERAL.—Section 7(a)(37) of the Small 2 Business Act (15 U.S.C. 636(a)(37)) is amended by strik- 3 ing subparagraph (C) and inserting the following: 4 ‘‘(C) MAXIMUM LOAN AMOUNT.— 5 ‘‘(i) IN GENERAL.—Except as other- 6 wise provided in this subparagraph, the 7 maximum amount of a covered loan made 8 to an eligible entity is the sum of— 9 ‘‘(I) the lesser of— 10 ‘‘(aa) the product obtained 11 by multiplying— 12 ‘‘(AA) at the election of 13 the eligible entity, the aver- 14 age total monthly payment 15 for payroll costs incurred or 16 paid by the eligible entity 17 during the 1-year period be- 18 fore the date on which the 19 loan is made or calendar 20 year 2019; by 21 ‘‘(BB) 2.5; or 22 ‘‘(bb) $2,000,000; plus 23 ‘‘(II) with respect to a loan re- 24 ceived under paragraph (36) for which 25 the eligible entity received forgiveness 26 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 1249 IS under section 1106 of the CARES Act 1 (as in effect before the date of enact- 2 ment of this paragraph), the amount 3 of an increase with respect to that 4 loan that the eligible entity would 5 have been eligible to receive under sec- 6 tion 312 of the Economic Aid to 7 Hard-Hit Small Businesses, Non- 8 profits, and Venues Act (title III of 9 division N of Public Law 116–260) if 10 the eligible entity had not received 11 such forgiveness. 12 ‘‘(ii) SEASONAL EMPLOYERS.—The 13 maximum amount of a covered loan made 14 to an eligible entity that is a seasonal em- 15 ployer is the sum of— 16 ‘‘(I) the lesser of— 17 ‘‘(aa) the product obtained 18 by multiplying— 19 ‘‘(AA) at the election of 20 the eligible entity, the aver- 21 age total monthly payments 22 for payroll costs incurred or 23 paid by the eligible entity 24 for any 12-week period be- 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 1249 IS tween February 15, 2019 1 and February 15, 2020; by 2 ‘‘(BB) 2.5; or 3 ‘‘(bb) $2,000,000; plus 4 ‘‘(II) with respect to a loan re- 5 ceived under paragraph (36) for which 6 the seasonal employer received for- 7 giveness under section 1106 of the 8 CARES Act (as in effect before the 9 date of enactment of this paragraph), 10 the amount of an increase with re- 11 spect to that loan that the seasonal 12 employer would have been eligible to 13 receive under section 312 of the Eco- 14 nomic Aid to Hard-Hit Small Busi- 15 nesses, Nonprofits, and Venues Act 16 (title III of division N of Public Law 17 116–260) if the seasonal employer 18 had not received such forgiveness. 19 ‘‘(iii) NEW ENTITIES.—The maximum 20 amount of a covered loan made to an eligi- 21 ble entity that did not exist during the 1- 22 year period preceding February 15, 2020 23 is the sum of— 24 ‘‘(I) the lesser of— 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 1249 IS ‘‘(aa) the product obtained 1 by multiplying— 2 ‘‘(AA) the quotient ob- 3 tained by dividing the sum 4 of the total monthly pay- 5 ments by the eligible entity 6 for payroll costs paid or in- 7 curred by the eligible entity 8 as of the date on which the 9 eligible entity applies for the 10 covered loan by the number 11 of months in which those 12 payroll costs were paid or 13 incurred; by 14 ‘‘(BB) 2.5; or 15 ‘‘(bb) $2,000,000; plus 16 ‘‘(II) with respect to a loan re- 17 ceived under paragraph (36) for which 18 the eligible entity received forgiveness 19 under section 1106 of the CARES Act 20 (as in effect before the date of enact- 21 ment of this paragraph), the amount 22 of an increase with respect to that 23 loan that the eligible entity would 24 have been eligible to receive under sec- 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 1249 IS tion 312 of the Economic Aid to 1 Hard-Hit Small Businesses, Non- 2 profits, and Venues Act (title III of 3 division N of Public Law 116–260) if 4 the eligible entity had not received 5 such forgiveness. 6 ‘‘(iv) NAICS 72 ENTITIES.—The max- 7 imum amount of a covered loan made to 8 an eligible entity that is assigned a North 9 American Industry Classification System 10 code beginning with 72 at the time of dis- 11 bursal is the sum of— 12 ‘‘(I) the lesser of— 13 ‘‘(aa) the product obtained 14 by multiplying— 15 ‘‘(AA) at the election of 16 the eligible entity, the aver- 17 age total monthly payment 18 for payroll costs incurred or 19 paid by the eligible entity 20 during the 1-year period be- 21 fore the date on which the 22 loan is made or calendar 23 year 2019; by 24 ‘‘(BB) 3.5; or 25 VerDate Sep 11 2014 19:13 May 15, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S1249.IS S1249 pbinns on DSKJLVW7X2PROD with BILLS 14 •S 1249 IS ‘‘(bb) $2,000,000; plus 1 ‘‘(II) with respect to a loan re- 2 ceived under paragraph (36) for which 3 the eligible entity received forgiveness 4 under section 1106 of the CARES Act 5 (as in effect before the date of enact- 6 ment of this paragraph), the amount 7 of an increase with respect to that 8 loan that the eligible entity would 9 have been eligi [Text truncated for display. 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