Continuing Small Business Recovery and Paycheck Protection Program Act

II 116TH CONGRESS 2D SESSION S. 4321 To establish the Paycheck Protection Program Second Draw Loan and amend the 7(a) loan guaranty program for recovery sector business concerns, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 27, 2020 Mr. RUBIO (for himself and Ms. COLLINS) introduced the following bill; which was read twice and referred to the Committee on Small Business and En- trepreneurship A BILL To establish the Paycheck Protection Program Second Draw Loan and amend the 7(a) loan guaranty program for recovery sector business concerns, and for other pur- poses. 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Continuing Small Business Recovery and Paycheck Pro- 5 tection Program Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4321 IS Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Emergency rulemaking authority. TITLE I—PAYCHECK PROTECTION PROGRAM IMPROVEMENTS Sec. 101. Additional eligible expenses. Sec. 102. Lender safe harbor. Sec. 103. Selection of covered period for forgiveness. Sec. 104. Simplified application. Sec. 105. Group insurance payments as payroll costs. Sec. 106. Paycheck protection program second draw loans. Sec. 107. Continued access to the paycheck protection program. Sec. 108. Increased ability for paycheck protection program borrowers to re- quest an increase in loan amount due to updated regulations. Sec. 109. Calculation of maximum loan amount for farmers and ranchers under the paycheck protection program. Sec. 110. Farm Credit System institutions. Sec. 111. Definition of seasonal employer. Sec. 112. Changes to the 7(a) loan guaranty program for recovery sector busi- ness concerns. Sec. 113. Eligibility of 501(c)(6) organizations for loans under the paycheck protection program. Sec. 114. Prohibition on use of loan proceeds for lobbying activities. Sec. 115. Effective date; applicability. Sec. 116. Bankruptcy provisions. Sec. 117. Conflicts of interest. TITLE II—SMALL BUSINESS PROGRAMS GENERALLY Sec. 121. Small business investment company program. TITLE III—APPROPRIATIONS Sec. 131. Commitment authority and appropriations. SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) ADMINISTRATION; ADMINISTRATOR.—The 3 terms ‘‘Administration’’ and ‘‘Administrator’’ mean 4 the Small Business Administration and the Adminis- 5 trator thereof. 6 (2) SMALL BUSINESS CONCERN.—The term 7 ‘‘small business concern’’ has the meaning given the 8 term in section 3 of the Small Business Act (15 9 U.S.C. 632). 10 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4321 IS SEC. 3. EMERGENCY RULEMAKING AUTHORITY. 1 Not later than 30 days after the date of enactment 2 of this Act, the Administrator shall issue regulations to 3 carry out this Act and the amendments made by this Act 4 without regard to the notice requirements under section 5 553(b) of title 5, United States Code. 6 TITLE I—PAYCHECK PROTEC- 7 TION PROGRAM IMPROVE- 8 MENTS 9 SEC. 101. ADDITIONAL ELIGIBLE EXPENSES. 10 (a) ALLOWABLE USE OF PPP LOAN.—Section 11 7(a)(36)(F)(i) of the Small Business Act (15 U.S.C. 12 636(a)(36)(F)(i)) is amended— 13 (1) in subclause (VI), by striking ‘‘and’’ at the 14 end; 15 (2) in subclause (VII), by striking the period at 16 the end and inserting a semicolon; and 17 (3) by adding at the end the following: 18 ‘‘(VIII) covered operations ex- 19 penditures, as defined in section 20 1106(a) of the CARES Act (15 21 U.S.C. 9005(a)); 22 ‘‘(IX) covered property damage 23 costs, as defined in such section 24 1106(a); 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4321 IS ‘‘(X) covered supplier costs, as 1 defined in such section 1106(a); and 2 ‘‘(XI) covered worker protection 3 expenditures, as defined in such sec- 4 tion 1106(a).’’. 5 (b) LOAN FORGIVENESS.—Section 1106 of the 6 CARES Act (15 U.S.C. 9005) is amended— 7 (1) in subsection (a)— 8 (A) by redesignating paragraphs (6), (7), 9 and (8) as paragraphs (10), (11), and (12), re- 10 spectively; 11 (B) by redesignating paragraph (5) as 12 paragraph (8); 13 (C) by redesignating paragraph (4) as 14 paragraph (6); 15 (D) by redesignating paragraph (3) as 16 paragraph (4); 17 (E) by inserting after paragraph (2) the 18 following: 19 ‘‘(3) the term ‘covered operations expenditure’ 20 means a payment for any business software or cloud 21 computing service that facilitates business oper- 22 ations, product or service delivery, the processing, 23 payment, or tracking of payroll expenses, human re- 24 sources, sales and billing functions, or accounting or 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4321 IS tracking of supplies, inventory, records and ex- 1 penses;’’; 2 (F) by inserting after paragraph (4), as so 3 redesignated, the following: 4 ‘‘(5) the term ‘covered property damage cost’ 5 means a cost related to property damage and van- 6 dalism or looting due to public disturbances that oc- 7 curred during 2020 that was not covered by insur- 8 ance or other compensation;’’; 9 (G) by inserting after paragraph (6), as so 10 redesignated, the following: 11 ‘‘(5) the term ‘covered supplier cost’ means an 12 expenditure made by an entity to a supplier of goods 13 pursuant to a contract in effect before February 15, 14 2020 for the supply of goods that are essential to 15 the operations of the entity at the time at which the 16 expenditure is made;’’; 17 (H) by inserting after paragraph (8), as so 18 redesignated, the following: 19 ‘‘(9) the term ‘covered worker protection ex- 20 penditure’— 21 ‘‘(A) means an operating or a capital ex- 22 penditure that is required to facilitate the adap- 23 tation of the business activities of an entity to 24 comply with requirements established or guid- 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4321 IS ance issued by the Department of Health and 1 Human Services, the Centers for Disease Con- 2 trol, or the Occupational Safety and Health Ad- 3 ministration during the period beginning on 4 March 1, 2020 and ending December 31, 2020 5 related to the maintenance of standards for 6 sanitation, social distancing, or any other work- 7 er or customer safety requirement related to 8 COVID–19; 9 ‘‘(B) may include— 10 ‘‘(i) the purchase, maintenance, or 11 renovation of assets that create or ex- 12 pand— 13 ‘‘(I) a drive-through window fa- 14 cility; 15 ‘‘(II) an indoor, outdoor, or com- 16 bined air or air pressure ventilation or 17 filtration system; 18 ‘‘(III) a physical barrier such as 19 a sneeze guard; 20 ‘‘(IV) an indoor, outdoor, or com- 21 bined commercial real property; 22 ‘‘(V) an onsite or offsite health 23 screening capability; or 24 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4321 IS ‘‘(VI) other assets relating to the 1 compliance with the requirements or 2 guidance described in subparagraph 3 (A), as determined by the Adminis- 4 trator in consultation with the Sec- 5 retary of Health and Human Services 6 and the Secretary of Labor; and 7 ‘‘(ii) the purchase of— 8 ‘‘(I) covered materials described 9 in section 328.103(a) of title 44, Code 10 of Federal Regulations, or any suc- 11 cessor regulation; 12 ‘‘(II) particulate filtering face- 13 piece respirators approved by the Na- 14 tional Institute for Occupational Safe- 15 ty and Health, including those ap- 16 proved only for emergency use author- 17 ization; or 18 ‘‘(III) other kinds of personal 19 protective equipment, as determined 20 by the Administrator in consultation 21 with the Secretary of Health and 22 Human Services and the Secretary of 23 Labor; and 24 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4321 IS ‘‘(C) does not include residential real prop- 1 erty or intangible property;’’; and 2 (I) in paragraph (11), as so redesig- 3 nated— 4 (i) in subparagraph (C), by striking 5 ‘‘and’’ at the end; 6 (ii) in subparagraph (D), by striking 7 ‘‘and’’ at the end; and 8 (iii) by adding at the end the fol- 9 lowing: 10 ‘‘(E) covered operations expenditures; 11 ‘‘(F) covered property damage costs; 12 ‘‘(G) covered supplier costs; and 13 ‘‘(H) covered worker protection expendi- 14 tures; and’’; 15 (2) in subsection (b), by adding at the end the 16 following: 17 ‘‘(5) Any covered operations expenditure. 18 ‘‘(6) Any covered property damage cost. 19 ‘‘(7) Any covered supplier cost. 20 ‘‘(8) Any covered worker protection expendi- 21 ture.’’; 22 (3) in subsection (d)(8), by inserting ‘‘any pay- 23 ment on any covered operations expenditure, any 24 payment on any covered property damage cost, any 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 4321 IS payment on any covered supplier cost, any payment 1 on any covered worker protection expenditure,’’ after 2 ‘‘rent obligation,’’; and 3 (4) in subsection (e)— 4 (A) in paragraph (2), by inserting ‘‘pay- 5 ments on covered operations expenditures, pay- 6 ments on covered property damage costs, pay- 7 ments on covered supplier costs, payments on 8 covered worker protection expenditures,’’ after 9 ‘‘lease obligations,’’; and 10 (B) in paragraph (3)(B), by inserting 11 ‘‘make payments on covered operations expendi- 12 tures, make payments on covered property dam- 13 age costs, make payments on covered supplier 14 costs, make payments on covered worker protec- 15 tion expenditures,’’ after ‘‘rent obligation,’’. 16 SEC. 102. LENDER SAFE HARBOR. 17 Subsection (h) of section 1106 of the CARES Act 18 (15 U.S.C. 9005) is amended to read as follows: 19 ‘‘(h) HOLD HARMLESS.— 20 ‘‘(1) IN GENERAL.—A lender may rely on any 21 certification or documentation submitted by an ap- 22 plicant for a covered loan or an eligible recipient of 23 a covered loan that— 24 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 4321 IS ‘‘(A) is submitted pursuant to any statu- 1 tory requirement relating to covered loans or 2 any rule or guidance issued to carry out any ac- 3 tion relating to covered loans; and 4 ‘‘(B) attests that the applicant or eligible 5 recipient, as applicable, has accurately verified 6 any certification or documentation provided to 7 the lender. 8 ‘‘(2) NO ENFORCEMENT ACTION.—With respect 9 to a lender that relies on a certification or docu- 10 mentation described in paragraph (1)— 11 ‘‘(A) an enforcement action may not be 12 taken against the lender acting in good faith re- 13 lating to origination or forgiveness of a covered 14 loan based on such reliance; and 15 ‘‘(B) the lender acting in good faith shall 16 not be subject to any penalties relating to origi- 17 nation or forgiveness of a covered loan based on 18 such reliance.’’. 19 SEC. 103. SELECTION OF COVERED PERIOD FOR FORGIVE- 20 NESS. 21 Section 1106 of the CARES Act (15 U.S.C. 9005) 22 is amended— 23 (1) by amending subsection (a)(3) to read as 24 follows: 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 4321 IS ‘‘(3) the term ‘covered period’ means the pe- 1 riod— 2 ‘‘(A) beginning on the date of the origina- 3 tion of a covered loan; and 4 ‘‘(B) ending on a date selected by the eligi- 5 ble recipient of the covered loan that occurs 6 during the period— 7 ‘‘(i) beginning on the date that is 8 8 weeks after such date of origination; and 9 ‘‘(ii) ending on December 31, 2020;’’; 10 and 11 (2) by striking subsection (l). 12 SEC. 104. SIMPLIFIED APPLICATION. 13 Section 1106 of the CARES Act (15 U.S.C. 9005), 14 as amended by section 103 of this Act, is amended— 15 (1) in subsection (e), in the matter preceding 16 paragraph (1), by striking ‘‘An eligible’’ and insert- 17 ing ‘‘Except as provided in subsection (l), an eligi- 18 ble’’; 19 (2) in subsection (f), by inserting ‘‘or the infor- 20 mation required under subsection (l), as applicable’’ 21 after ‘‘subsection (e)’’; and 22 (3) by adding at the end the following: 23 ‘‘(l) SIMPLIFIED APPLICATION.— 24 ‘‘(1) COVERED LOANS UNDER $150,000.— 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 12 •S 4321 IS ‘‘(A) IN GENERAL.—Notwithstanding sub- 1 section (e), with respect to a covered loan made 2 to an eligible recipient that is not more than 3 $150,000, the covered loan amount shall be for- 4 given under this section if the eligible recipi- 5 ent— 6 ‘‘(i) signs and submits to the lender 7 an attestation that the eligible recipient 8 made a good faith effort to comply with 9 the requirements under section 7(a)(36) of 10 the Small Business Act (15 U.S.C. 11 636(a)(36)); and 12 ‘‘(ii) for the 3-year period following 13 submission of the attestation under clause 14 (i), retains records relevant to the attesta- 15 tion that prove compliance with those re- 16 quirements. 17 ‘‘(B) DEMOGRAPHIC INFORMATION.—An 18 eligible recipient of a covered loan described in 19 subparagraph (A) may complete and submit 20 any form related to borrower demographic in- 21 formation. 22 ‘‘(C) AUDIT.—The Administrator may— 23 ‘‘(i) review and audit covered loans 24 described in subparagraph (A); and 25 VerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321 pamtmann on DSKBC07HB2PROD with BILLS 13 •S 4321 IS ‘‘(ii) in the case of fraud, ineligibility, 1 or other material noncompliance with ap- 2 plicable loan or loan forgiveness require- 3 ments, modify— 4 ‘‘(I) the amount of a covered loan 5 described in subparagraph (A); or 6 ‘‘(II) the loan forgiveness amount 7 with respect to a covered loan de- 8 scribed in subparagraph (A). 9 ‘‘(2) COVERED LOANS BETWEEN $150,000 AND 10 $2,000,000.— 11 ‘‘(A) IN GENERAL.—Not [Text truncated for display. 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