COVID–19 Youth Sports and Healthy Working Families Relief Act

I 116TH CONGRESS 2D SESSION H. R. 7562 To amend the Internal Revenue Code of 1986 to provide for youth sports, to amend the Small Business Act to establish a loan program for youth sports providers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 9, 2020 Mr. ROSE of New York (for himself, Mr. FITZPATRICK, Mr. GOTTHEIMER, Mr. CISNEROS, Ms. CLARKE of New York, Mrs. DAVIS of California, Ms. NORTON, Mr. GONZALEZ of Texas, Mr. MICHAEL F. DOYLE of Pennsyl- vania, Ms. SCANLON, Mr. VEASEY, Mr. RASKIN, Ms. SCHAKOWSKY, and Ms. SEWELL of Alabama) introduced the following bill; which was re- ferred to the Committee on Ways and Means, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to provide for youth sports, to amend the Small Business Act to establish a loan program for youth sports providers, 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 ‘‘COVID–19 Youth 4 Sports and Healthy Working Families Relief Act’’. 5 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7562 IH SEC. 2. MODIFICATION OF CHILD AND DEPENDENT CARE 1 TAX CREDIT. 2 (a) ALLOWANCE OF EXPENSES FOR YOUTH PHYS- 3 ICAL ACTIVITIES.—Section 21(b)(2)(A) of the Internal 4 Revenue Code of 1986 is amended by striking ‘‘and’’ at 5 the end of clause (i), by striking the period at the end 6 of clause (ii) and inserting ‘‘, and’’, and by inserting after 7 clause (ii) the following: 8 ‘‘(iii) expenses for youth physical ac- 9 tivities (within the meaning of section 10 223(d)(5)).’’. 11 (b) EXCEPTION TO CAMP RULE.—Section 12 21(b)(2)(A) of such Code (as amended by subsection (a)) 13 is amended by striking ‘‘Such term’’ and inserting ‘‘Ex- 14 cept as provided by clause (iii), such term’’. 15 (c) DOLLAR LIMITATIONS.—Section 221(c) of such 16 Code is amended to read as follows: 17 ‘‘(c) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The 18 amount of the employment-related expenses incurred dur- 19 ing any taxable year which may be taken into account 20 under subsection (a) shall not exceed— 21 ‘‘(1) if there is 1 qualifying individual with re- 22 spect to the taxpayer for such taxable year, the sum 23 of— 24 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7562 IH ‘‘(A) $3,000 of so much of employment-re- 1 lated expenses as are described in clauses (i) 2 and (ii) of subsection (b)(2)(A), and 3 ‘‘(B) $6,000 of so much of employment-re- 4 lated expenses as are described in clause (iii) of 5 subsection (b)(2)(A), or 6 ‘‘(2) if there are 2 or more qualifying individ- 7 uals with respect to the taxpayer for such taxable 8 year, the sum of— 9 ‘‘(A) $6,000 of so much of employment-re- 10 lated expenses as are described in clauses (i) 11 and (ii) of subsection (b)(2)(A), and 12 ‘‘(B) $12,000 of so much of employment- 13 related expenses as are described in clause (iii) 14 of subsection (b)(2)(A). 15 The amounts determined under subparagraphs (A) and 16 (B) of paragraph (1) or (2) (whichever is applicable) shall 17 each be reduced by the aggregate amount for the same 18 categories of expenses excludable from gross income under 19 section 129 for the taxable year.’’. 20 (d) REFUNDABLE.—Section 21(e) of such Code is 21 amended by adding at the end the following: 22 ‘‘(11) CREDIT REFUNDABLE FOR 2020.—In the 23 case of a taxable year beginning in calendar year 24 2020, the credit allowed under subsection (a) (deter- 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7562 IH mined without regard to this paragraph and section 1 26(a)) shall be treated as a credit allowable under 2 subpart C (and not allowed under subsection (a)).’’. 3 (e) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2019. 6 SEC. 3. INCREASE IN DOLLAR AMOUNT OF ELECTION FOR 7 DEPENDENT CARE FLEXIBLE SPENDING AR- 8 RANGEMENTS. 9 (a) IN GENERAL.—Section 125 of the Internal Rev- 10 enue Code of 1986 is amended by redesignating sub- 11 sections (k) and (l) as subsections (l) and (m) and insert- 12 ing after subsection (j) the following: 13 ‘‘(k) LIMITATION ON DEPENDENT CARE FLEXIBLE 14 SPENDING ARRANGEMENTS.— 15 ‘‘(1) IN GENERAL.—For purposes of this sec- 16 tion, if a benefit is provided under a cafeteria plan 17 through employer contributions to a dependent care 18 flexible spending arrangement, such benefit shall not 19 be treated as a qualified benefit unless the cafeteria 20 plan provides that an employee may not elect for 21 any taxable year to have salary reduction contribu- 22 tions in excess of $10,000 made to such arrange- 23 ment for each dependent under such arrangement. 24 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7562 IH ‘‘(2) SINGLE PARENT.—In the case that the 1 employee is an individual who is not married as of 2 the beginning of the taxable year for which the em- 3 ployee elects to participate in the arrangement, 4 paragraph (1) shall be applied by substituting 5 ‘$12,000’ for ‘$10,000’.’’. 6 (b) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to taxable years beginning after 8 December 31, 2019. 9 SEC. 4. YOUTH AND FAMILY PHYSICAL ACTIVITIES. 10 (a) IN GENERAL.—Paragraph (1) of section 213(d) 11 of the Internal Revenue Code of 1986 is amended by strik- 12 ing ‘‘or’’ at the end of subparagraph (C), by striking the 13 period at the end of subparagraph (D) and inserting ‘‘, 14 or’’, and by inserting after subparagraph (D) the following 15 new subparagraph: 16 ‘‘(E) for qualified sports and fitness ex- 17 penses.’’. 18 (b) QUALIFIED SPORTS AND FITNESS EXPENSES.— 19 Subsection (d) of section 213 of the Internal Revenue 20 Code of 1986 is amended by adding at the end the fol- 21 lowing new paragraph: 22 ‘‘(12) QUALIFIED SPORTS AND FITNESS EX- 23 PENSES.— 24 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7562 IH ‘‘(A) IN GENERAL.—The term ‘qualified 1 sports and fitness expenses’ means amounts 2 paid exclusively for the sole purpose of partici- 3 pating in a physical activity including— 4 ‘‘(i) for membership at a fitness facil- 5 ity, 6 ‘‘(ii) for participation or instruction in 7 physical exercise or physical activity, or 8 ‘‘(iii) for equipment used in a pro- 9 gram (including a self-directed program) of 10 physical exercise or physical activity. 11 ‘‘(B) OVERALL DOLLAR LIMITATION.—The 12 aggregate amount treated as qualified sports 13 and fitness expenses with respect to any tax- 14 payer for any taxable year shall not exceed 15 $1,000 ($2,000 in the case of a joint return or 16 a head of household (as defined in section 17 2(b))). 18 ‘‘(C) FITNESS FACILITY.—For purposes of 19 subparagraph (A)(i), the term ‘fitness facility’ 20 means a facility— 21 ‘‘(i) which provides instruction in a 22 program of physical exercise, offers facili- 23 ties for the preservation, maintenance, en- 24 couragement, or development of physical 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7562 IH fitness, or serves as the site of such a pro- 1 gram of a State or local government, 2 ‘‘(ii) which is not a private club owned 3 and operated by its members, 4 ‘‘(iii) which does not offer golf, hunt- 5 ing, sailing, or riding facilities, 6 ‘‘(iv) the health or fitness component 7 of which is not incidental to its overall 8 function and purpose, and 9 ‘‘(v) which is fully compliant with the 10 State of jurisdiction and Federal anti-dis- 11 crimination laws. 12 ‘‘(D) TREATMENT OF EXERCISE VIDEOS, 13 ETC.—Videos, books, and similar materials 14 shall be treated as described in subparagraph 15 (A)(ii) if the content of such materials con- 16 stitutes instruction in a program of physical ex- 17 ercise or physical activity. 18 ‘‘(E) LIMITATIONS RELATED TO SPORTS 19 AND FITNESS EQUIPMENT.—Amounts paid for 20 equipment described in subparagraph (A)(iii) 21 shall be treated as qualified sports and fitness 22 expenses only— 23 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7562 IH ‘‘(i) if such equipment is utilized ex- 1 clusively for participation in fitness, exer- 2 cise, sport, or other physical activity, 3 ‘‘(ii) in the case of amounts paid for 4 apparel or footwear, if such apparel or 5 footwear is of a type that is necessary for, 6 and is not used for any purpose other 7 than, a specific physical activity, and 8 ‘‘(iii) in the case of amounts paid for 9 any single item of sports equipment (other 10 than exercise equipment), to the extent 11 such amounts do not exceed $250. 12 ‘‘(F) PROGRAMS WHICH INCLUDE COMPO- 13 NENTS OTHER THAN PHYSICAL EXERCISE AND 14 PHYSICAL ACTIVITY.—Rules similar to the rules 15 of paragraph (6) shall apply in the case of any 16 program that includes physical exercise or phys- 17 ical activity and also other components. For 18 purposes of the preceding sentence, travel and 19 accommodations shall be treated as a separate 20 component.’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to taxable years beginning after 23 the date of the enactment of this Act. 24 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 7562 IH SEC. 5. YOUTH SPORT PROVIDERS LOAN PROGRAM. 1 (a) DEFINITIONS.—In this section, the terms ‘‘Ad- 2 ministration’’ and ‘‘Administrator’’ mean the Small Busi- 3 ness Administration and the Administrator thereof, re- 4 spectively. 5 (b) IN GENERAL.—Section 7(a) of the Small Busi- 6 ness Act (15 U.S.C. 636(a)) is amended— 7 (1) in paragraph (2)— 8 (A) in subparagraph (A), in the matter 9 preceding clause (i), by striking ‘‘and (F)’’ and 10 inserting ‘‘(F), and (G)’’; and 11 (B) by adding at the end the following: 12 ‘‘(G) PARTICIPATION IN THE YOUTH 13 SPORTS PROVIDER LOAN PROGRAM.—In an 14 agreement to participate in a loan on a deferred 15 basis under paragraph (37), the participation 16 by the Administration shall be 100 percent.’’; 17 and 18 (2) by adding at the end the following: 19 ‘‘(37) YOUTH SPORTS PROVIDER LOAN PRO- 20 GRAM.— 21 ‘‘(A) DEFINITIONS.—In this paragraph— 22 ‘‘(i) the terms ‘appropriate Federal 23 banking agency’ and ‘insured depository 24 institution’ have the meanings given those 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 7562 IH terms in section 3 of the Federal Deposit 1 Insurance Act (12 U.S.C. 1813); 2 ‘‘(ii) the term ‘covered loan’ means a 3 loan made under this paragraph during the 4 covered period; 5 ‘‘(iii) the term ‘covered period’ means 6 the period beginning on March 1, 2020, 7 and ending on December 31, 2020; 8 ‘‘(iv) the term ‘eligible recipient’ 9 means an individual or entity that is a 10 youth sports provider and is eligible to re- 11 ceive a covered loan; 12 ‘‘(v) the term ‘eligible self-employed 13 individual’ has the meaning given the term 14 in section 7002(b) of the Families First 15 Coronavirus Response Act (Public Law 16 116–127); 17 ‘‘(vi) the term ‘high priority area’ 18 means a geographic area for which an eli- 19 gible recipient is a small business concern 20 owned and controlled by socially and eco- 21 nomically disadvantaged individuals, a 22 small business concern owned and con- 23 trolled by women, or a small business con- 24 cern owned and controlled by veterans— 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 7562 IH ‘‘(I) working in or attracting 1 youth participants from low income, 2 underserved, or rural communities 3 (based on ZIP code); 4 ‘‘(II) working with populations 5 disproportionately affected by 6 COVID–19 (based on ZIP code); and 7 ‘‘(III) working with populations 8 of youth that already have low access 9 to quality sports programs; 10 ‘‘(vii) the term ‘insured credit union’ 11 has the meaning given the term in section 12 101 of the Federal Credit Union Act (12 13 U.S.C. 1752); 14 ‘‘(viii) the term ‘nonprofit organiza- 15 tion’ means an organization that is de- 16 scribed in section 501(c)(3) of the Internal 17 Revenue Code of 1986 and that is exempt 18 from taxation under section 501(a) of such 19 Code; 20 ‘‘(ix) the term ‘operating losses’ 21 means regular operating expenses accrued 22 since January 1, 2020, through the date of 23 the loan application since January 1, 2020, 24 minus revenue generated over that period; 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 7562 IH ‘‘(x) the term ‘regular operating ex- 1 penses’— 2 ‘‘(I) means expenses incurred in 3 the regular operations of business and 4 includes— 5 ‘‘(aa) payroll costs (as de- 6 fined in paragraph (36)); 7 ‘‘(bb) other expenses relat- 8 ing to workforce support, includ- 9 ing 1099–MISC contractors and 10 volunteers, such as contractor 11 fees for services, training, back- 12 ground screenings, or insurance; 13 ‘‘(cc) regular or necessary 14 facilities maintenance and up- 15 keep; 16 ‘‘(dd) supplies or materials 17 that due to their nature are un- 18 usable at a future date and main- 19 tain only a nominal value; 20 ‘‘(ee) overhead expenses for 21 events or programs cancelled due 22 to COVID–19 that are not reim- 23 bursable through insurance or 24 other means, such as nonreim- 25 VerDate Sep 11 2014 06:36 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H7562.IH H7562 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 7562 IH bursable deposits and cancella- 1 tion fees; 2 ‘‘(ff) rent (including rent 3 under a lease agreement); 4 ‘‘(gg) payments of interest 5 or mandatory principal payment 6 on any mortgage obligation 7 (which shall not include any pre- 8 pa [Text truncated for display. 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