[Congressional Record Volume 166, Number 138 (Tuesday, August 4, 2020)]
[Senate]
[Pages S4745-S4753]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2506. Mr. RUBIO (for himself and Ms. Collins) submitted an
amendment intended to be proposed by him to the bill S. 178, to condemn
gross human rights violations of ethnic Turkic Muslims in Xinjiang, and
calling for an end to arbitrary detention, torture, and harassment of
these communities inside and outside China; which was ordered to lie on
the table; as follows:
At the appropriate place, insert the following:
SEC. __. SMALL BUSINESS RECOVERY.
(a) Short Title.--This section may be cited as the
``Continuing Small Business Recovery and Paycheck Protection
Program Act''.
(b) Definitions.--In this section:
(1) Administration; administrator.--The terms
``Administration'' and ``Administrator'' mean the Small
Business Administration and the Administrator thereof,
respectively.
(2) Small business concern.--The term ``small business
concern'' has the meaning given the term in section 3 of the
Small Business Act (15 U.S.C. 632).
(c) Emergency Rulemaking Authority.-- Not later than 30
days after the date of enactment of this Act, the
Administrator shall issue regulations to carry out this
section and the amendments made by this section without
regard to the notice requirements under section 553(b) of
title 5, United States Code.
(d) Additional Eligible Expenses.--
(1) Allowable use of ppp loan.--Section 7(a)(36)(F)(i) of
the Small Business Act (15 U.S.C. 636(a)(36)(F)(i)) is
amended--
(A) in subclause (VI), by striking ``and'' at the end;
(B) in subclause (VII), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(VIII) covered operations expenditures, as defined in
section 1106(a) of the CARES Act (15 U.S.C. 9005(a));
``(IX) covered property damage costs, as defined in such
section 1106(a);
``(X) covered supplier costs, as defined in such section
1106(a); and
``(XI) covered worker protection expenditures, as defined
in such section 1106(a).''.
(2) Loan forgiveness.--Section 1106 of the CARES Act (15
U.S.C. 9005) is amended--
(A) in subsection (a)--
(i) by redesignating paragraphs (6), (7), and (8) as
paragraphs (10), (11), and (12), respectively;
(ii) by redesignating paragraph (5) as paragraph (8);
(iii) by redesignating paragraph (4) as paragraph (6);
(iv) by redesignating paragraph (3) as paragraph (4);
(v) by inserting after paragraph (2) the following:
``(3) the term `covered operations expenditure' means a
payment for any business software or cloud computing service
that facilitates business operations, product or service
delivery, the processing, payment, or tracking of payroll
expenses, human resources, sales and billing functions, or
accounting or tracking of supplies, inventory, records and
expenses;'';
(vi) by inserting after paragraph (4), as so redesignated,
the following:
``(5) the term `covered property damage cost' means a cost
related to property damage and vandalism or looting due to
public disturbances that occurred during 2020 that was not
covered by insurance or other compensation;'';
(vii) by inserting after paragraph (6), as so redesignated,
the following:
``(5) the term `covered supplier cost' means an expenditure
made by an entity to a supplier of goods pursuant to a
contract in effect before February 15, 2020 for the supply of
goods that are essential to the operations of the entity at
the time at which the expenditure is made;'';
(viii) by inserting after paragraph (8), as so
redesignated, the following:
``(9) the term `covered worker protection expenditure'--
``(A) means an operating or a capital expenditure that is
required to facilitate the adaptation of the business
activities of an entity to comply with requirements
established or guidance issued by the Department of Health
and Human Services, the Centers for Disease Control, or the
Occupational Safety and Health Administration during the
period beginning on March 1, 2020 and ending December 31,
2020 related to the maintenance of standards for sanitation,
social distancing, or any other worker or customer safety
requirement related to COVID-19;
``(B) may include--
``(i) the purchase, maintenance, or renovation of assets
that create or expand--
``(I) a drive-through window facility;
``(II) an indoor, outdoor, or combined air or air pressure
ventilation or filtration system;
``(III) a physical barrier such as a sneeze guard;
``(IV) an indoor, outdoor, or combined commercial real
property;
``(V) an onsite or offsite health screening capability; or
``(VI) other assets relating to the compliance with the
requirements or guidance described in subparagraph (A), as
determined by the Administrator in consultation with the
Secretary of Health and Human Services and the Secretary of
Labor; and
``(ii) the purchase of--
``(I) covered materials described in section 328.103(a) of
title 44, Code of Federal Regulations, or any successor
regulation;
``(II) particulate filtering facepiece respirators approved
by the National Institute for Occupational Safety and Health,
including those approved only for emergency use
authorization; or
[[Page S4746]]
``(III) other kinds of personal protective equipment, as
determined by the Administrator in consultation with the
Secretary of Health and Human Services and the Secretary of
Labor; and
``(C) does not include residential real property or
intangible property;''; and
(ix) in paragraph (11), as so redesignated--
(I) in subparagraph (C), by striking ``and'' at the end;
(II) in subparagraph (D), by striking ``and'' at the end;
and
(III) by adding at the end the following:
``(E) covered operations expenditures;
``(F) covered property damage costs;
``(G) covered supplier costs; and
``(H) covered worker protection expenditures; and'';
(B) in subsection (b), by adding at the end the following:
``(5) Any covered operations expenditure.
``(6) Any covered property damage cost.
``(7) Any covered supplier cost.
``(8) Any covered worker protection expenditure.'';
(C) in subsection (d)(8), by inserting ``any payment on any
covered operations expenditure, any payment on any covered
property damage cost, any payment on any covered supplier
cost, any payment on any covered worker protection
expenditure,'' after ``rent obligation,''; and
(D) in subsection (e)--
(i) in paragraph (2), by inserting ``payments on covered
operations expenditures, payments on covered property damage
costs, payments on covered supplier costs, payments on
covered worker protection expenditures,'' after ``lease
obligations,''; and
(ii) in paragraph (3)(B), by inserting ``make payments on
covered operations expenditures, make payments on covered
property damage costs, make payments on covered supplier
costs, make payments on covered worker protection
expenditures,'' after ``rent obligation,''.
(e) Lender Safe Harbor.--Subsection (h) of section 1106 of
the CARES Act (15 U.S.C. 9005) is amended to read as follows:
``(h) Hold Harmless.--
``(1) In general.--A lender may rely on any certification
or documentation submitted by an applicant for a covered loan
or an eligible recipient of a covered loan that--
``(A) is submitted pursuant to any statutory requirement
relating to covered loans or any rule or guidance issued to
carry out any action relating to covered loans; and
``(B) attests that the applicant or eligible recipient, as
applicable, has accurately verified any certification or
documentation provided to the lender.
``(2) No enforcement action.--With respect to a lender that
relies on a certification or documentation described in
paragraph (1)--
``(A) an enforcement action may not be taken against the
lender acting in good faith relating to origination or
forgiveness of a covered loan based on such reliance; and
``(B) the lender acting in good faith shall not be subject
to any penalties relating to origination or forgiveness of a
covered loan based on such reliance.''.
(f) Selection of Covered Period for Forgiveness.--Section
1106 of the CARES Act (15 U.S.C. 9005) is amended--
(1) by amending paragraph (4) of subsection (a), as so
redesignated by subsection (d) of this section, to read as
follows:
``(4) the term `covered period' means the period--
``(A) beginning on the date of the origination of a covered
loan; and
``(B) ending on a date selected by the eligible recipient
of the covered loan that occurs during the period--
``(i) beginning on the date that is 8 weeks after such date
of origination; and
``(ii) ending on December 31, 2020;''; and
(2) by striking subsection (l).
(g) Simplified Application.--Section 1106 of the CARES Act
(15 U.S.C. 9005), as amended by subsection (f) of this
section, is amended--
(1) in subsection (e), in the matter preceding paragraph
(1), by striking ``An eligible'' and inserting ``Except as
provided in subsection (l), an eligible'';
(2) in subsection (f), by inserting ``or the information
required under subsection (l), as applicable'' after
``subsection (e)''; and
(3) by adding at the end the following:
``(l) Simplified Application.--
``(1) Covered loans under $150,000.--
``(A) In general.--Notwithstanding subsection (e), with
respect to a covered loan made to an eligible recipient that
is not more than $150,000, the covered loan amount shall be
forgiven under this section if the eligible recipient--
``(i) signs and submits to the lender an attestation that
the eligible recipient made a good faith effort to comply
with the requirements under section 7(a)(36) of the Small
Business Act (15 U.S.C. 636(a)(36)); and
``(ii) for the 1-year period following submission of the
attestation under clause (i), retains records relevant to the
attestation that prove compliance with those requirements.
``(B) Demographic information.--An eligible recipient of a
covered loan described in subparagraph (A) may complete and
submit any form related to borrower demographic information.
``(C) Audit.--The Administrator may--
``(i) review and audit covered loans described in
subparagraph (A); and
``(ii) in the case of fraud, ineligibility, or other
material noncompliance with applicable loan or loan
forgiveness requirements, modify--
``(I) the amount of a covered loan described in
subparagraph (A); or
``(II) the loan forgiveness amount with respect to a
covered loan described in subparagraph (A).
``(2) Covered loans between $150,000 and $2,000,000.--
``(A) In general.--Notwithstanding subsection (e), with
respect to a covered loan made to an eligible recipient that
is more than $150,000 and not more than $2,000,000--
``(i) the eligible recipient seeking loan forgiveness under
this section--
``(I) is not required to submit the supporting
documentation described in paragraph (1) or (2) of subsection
(e) or the certification described in subsection (e)(3)(A);
``(II) shall retain all relevant schedules, worksheets, and
supporting documentation for the 3-year period following
submission of the application for loan forgiveness; and
``(III) may complete and submit any form related to
borrower demographic information;
``(ii) review by the lender of an application submitted by
the eligible recipient for loan forgiveness under this
section shall be limited to whether the lender received a
complete application, with all fields completed, initialed,
or signed, as applicable; and
``(iii) the lender shall--
``(I) accept the application submitted by the eligible
recipient for loan forgiveness under this section; and
``(II) submit the application to the Administrator.
``(B) Audit.--The Administrator may--
``(i) review and audit covered loans described in
subparagraph (A); and
``(ii) in the case of fraud, ineligibility, or other
material noncompliance with applicable loan or loan
forgiveness requirements, modify--
``(I) the amount of a covered loan described in
subparagraph (A); or
``(II) the loan forgiveness amount with respect to a
covered loan described in subparagraph (A).
``(3) Audit plan.--
``(A) In general.--Not later than 30 days after the date of
enactment of the Continuing Small Business Recovery and
Paycheck Protection Program Act, the Administrator shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives an audit plan that
details--
``(i) the policies and procedures of the Administrator for
conducting reviews and audits of covered loans; and
``(ii) the metrics that the Administrator shall use to
determine which covered loans will be audited for each
category of covered loans described in paragraphs (1) and
(2).
``(B) Reports.--Not later than 30 days after the date on
which the Administrator submits the audit plan required under
subparagraph (A), and each month thereafter, the
Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the
review and audit activities of the Administrator under this
subsection, which shall include--
``(i) the number of active reviews and audits;
``(ii) the number of reviews and audits that have been
ongoing for more than 60 days; and
``(iii) any substantial changes made to the audit plan
submitted under subparagraph (A).''.
(h) Group Insurance Payments as Payroll Costs.--Section
7(a)(36)(A)(viii)(I)(aa)(EE) of the Small Business Act (15
U.S.C. 636(a)(36)(A)(viii)(I)(aa)(EE)) is amended by
inserting ``and other group insurance'' before ``benefits''.
(i) Paycheck Protection Program Second Draw Loans.--Section
7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended
by adding at the end the following:
``(37) Paycheck protection program second draw loans.--
``(A) Definitions.--In this paragraph--
``(i) the terms `community financial institutions', `credit
union', `eligible self-employed individual', `insured
depository institution', `nonprofit organization', `payroll
costs', `seasonal employer', and `veterans organization' have
the meanings given those terms in paragraph (36), except that
`eligible entity' shall be substituted for `eligible
recipient' each place it appears in the definitions of those
terms;
``(ii) the term `covered loan' means a loan made under this
paragraph;
``(iii) the terms `covered mortgage obligation', `covered
operating expenditure', `covered property damage cost',
`covered rent obligation', `covered supplier cost', `covered
utility payment', and `covered worker protection expenditure'
have the meanings given those terms in section 1106(a) of the
CARES Act (15 U.S.C. 9005(a));
``(iv) the term `covered period' means the period beginning
on the date of the origination of a covered loan and ending
on December 31, 2020;
``(v) the term `eligible entity'--
``(I) means any business concern, nonprofit organization,
veterans organization, Tribal business concern, eligible
self-employed individual, sole proprietor, independent
contractor, or small agricultural cooperative that--
[[Page S4747]]
``(aa)(AA) with respect to a business concern, would
qualify as a small business concern by the annual receipts
size standard (if applicable) established by section 121.201
of title 13, Code of Federal Regulations, or any successor
regulation; or
``(BB) if the entity does not qualify as a small business
concern, meets the alternative size standard established
under section 3(a)(5);
``(bb) employs not more than 300 employees; and
``(cc)(AA) except as provided in subitems (BB), (CC), and
(DD), had gross receipts during the first or second quarter
in 2020 that are not less than 35 percent less than the gross
receipts of the entity during the same quarter in 2019;
``(BB) if the entity was not in business during the first
or second quarter of 2019, but was in business during the
third and fourth quarter of 2019, had gross receipts during
the first or second quarter of 2020 that are less than 35
percent of the amount of the gross receipts of the entity
during the third or fourth quarter of 2019;
``(CC) if the entity was not in business during the first,
second, or third quarter of 2019, but was in business during
the fourth quarter of 2019, had gross receipts during the
first or second quarter of 2020 that are less than 35 percent
of the amount of the gross receipts of the entity during the
fourth quarter of 2019; or
``(DD) if the entity was not in business during 2019, but
was in operation on February 15, 2020, had gross receipts
during the second quarter of 2020 that are less than 35
percent of the amount of the gross receipts of the entity
during the first quarter of 2020;
``(II) includes an organization described in subparagraph
(D)(vii) of paragraph (36) that is eligible to receive a loan
under that paragraph and that meets the requirements
described in items (aa) and (cc) of subclause (I); and
``(III) does not include--
``(aa) an issuer, the securities of which are listed on an
exchange registered a national securities exchange under
section 6 of the Securities Exchange Act of 1934 (15 U.S.C.
78f);
``(bb) any entity that--
``(AA) is a type of business concern described in
subsection (b), (c), (d), (e), (f), (h), (l) (m), (p), (q),
(r), or (s) of section 120.110 of title 13, Code of Federal
Regulations, or any successor regulation;
``(BB) is a type of business concern described in section
120.110(g) of title 13, Code of Federal Regulations, or any
successor regulation, except as otherwise provided in the
interim final rule of the Administration entitled `Business
Loan Program Temporary Changes; Paycheck Protection Program--
Additional Eligibility Criteria and Requirements for Certain
Pledges of Loans' (85 Fed. Reg. 21747 (April 20, 2020));
``(CC) is a type of business concern described in section
120.110(i) of title 13, Code of Federal Regulations, or any
successor regulation, except if the business concern is an
organization described in paragraph (36)(D)(vii);
``(DD) is a type of business concern described in section
120.110(j) of title 13, Code of Federal Regulations, or any
successor regulation, except as otherwise provided in the
interim final rules of the Administration entitled `Business
Loan Program Temporary Changes; Paycheck Protection Program--
Eligibility of Certain Electric Cooperatives' (85 Fed. Reg.
29847 (May 19, 2020)) and `Business Loan Program Temporary
Changes; Paycheck Protection Program--Eligibility of Certain
Telephone Cooperatives' (85 Fed. Reg. 35550 (June 11, 2020))
or any other guidance or rule issued or that may be issued by
the Administrator;
``(EE) is a type of business concern described in section
120.110(n) of title 13, Code of Federal Regulations, or any
successor regulation, except as otherwise provided in the
interim final rule of the Administration entitled `Business
Loan Program Temporary Changes; Paycheck Protection Program--
Additional Eligibility Revisions to First Interim Final Rule'
(85 Fed. Reg. 38301 (June 26, 2020)) or any other guidance or
rule issued or that may be issued by the Administrator;
``(FF) is a type of business concern described in section
120.110(o) of title 13, Code of Federal Regulations, or any
successor regulation, except as otherwise provided in any
guidance or rule issued or that may be issued by the
Administrator; or
``(GG) is an entity that is organized for research or for
engaging in advocacy in areas such as public policy or
political strategy or otherwise describes itself as a think
tank in any public documents;
``(HH) is an entity that would be described in the
subsections listed in subitems (AA) through (GG) if the
entity were a business concern; or
``(II) is assigned, or was approved for a loan under
paragraph (36) with, a North American Industry Classification
System code beginning with 52;
``(cc) any business concern or entity primarily engaged in
political or lobbying activities, which shall include any
entity that is organized for research or for engaging in
advocacy in areas such as public policy or political strategy
or otherwise describes itself as a think tank in any public
documents; or
``(dd) any business concern or entity--
``(AA) for which an entity created in or organized under
the laws of the People's Republic of China or the Special
Administrative Region of Hong Kong, or that has significant
operations in the People's Republic of China or the Special
Administrative Region of Hong Kong, owns or holds, directly
or indirectly, not less than 20 percent of the economic
interest of the business concern or entity, including as
equity shares or a capital or profit interest in a limited
liability company or partnership; or
``(BB) that retains, as a member of the board of directors
of the business concern, a person who is a resident of the
People's Republic of China;
``(vi) the terms `exchange', `issuer', and `security' have
the meanings given those terms in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); and
``(vii) the term `Tribal business concern' means a Tribal
business concern described in section 31(b)(2)(C).
``(B) Loans.--Except as otherwise provided in this
paragraph, the Administrator may guarantee covered loans to
eligible entities under the same terms, conditions, and
processes as a loan made under paragraph (36).
``(C) Maximum loan amount.--
``(i) In general.--Except as otherwise provided in this
subparagraph, the maximum amount of a covered loan made to an
eligible entity is the lesser of--
``(I) the product obtained by multiplying--
``(aa) at the election of the eligible entity, the average
total monthly payment for payroll costs incurred or paid by
the eligible entity during--
``(AA) the 1-year period before the date on which the loan
is made; or
``(BB) calendar year 2019; by
``(bb) 2.5; or
``(II) $2,000,000.
``(ii) Seasonal employers.--The maximum amount of a covered
loan made to an eligible entity that is a seasonal employer
is the lesser of--
``(I) the product obtained by multiplying--
``(aa) at the election of the eligible entity, the average
total monthly payments for payroll costs incurred or paid by
the eligible entity--
``(AA) for a 12-week period beginning February 15, 2019 or
March 1, 2019 and ending June 30, 2019; or
``(BB) for a consecutive 12-week period between May 1, 2019
and September 15, 2019; by
``(bb) 2.5; or
``(II) $2,000,000.
``(iii) New entities.--The maximum amount of a covered loan
made to an eligible entity that did not exist during the 1-
year period preceding February 15, 2020 is the lesser of--
``(I) the product obtained by multiplying--
``(aa) the quotient obtained by dividing--
``(AA) the sum of the total monthly payments by the
eligible entity for payroll costs paid or incurred by the
eligible entity as of the date on which the eligible entity
applies for the covered loan; by
``(BB) the number of months in which those payroll costs
were paid or incurred; by
``(bb) 2.5; or
``(II) $2,000,000.
``(iv) Limit for multiple locations.--With respect to an
eligible entity with more than 1 physical location, the total
amount of all covered loans shall be not more than
$2,000,000.
``(v) Loan number limitation.--An eligible entity may only
receive 1 covered loan.
``(vi) 90 day rule for maximum loan amount.--The maximum
aggregate loan amount of loans guaranteed under this
subsection that are approved for an eligible entity
(including any affiliates) within 90 days of approval of
another loan under this subsection for the eligible entity
(including any affiliates) shall not exceed $10,000,000.
``(D) Exception from certain certification requirements.--
An eligible entity applying for a covered loan shall not be
required to make the certification described in subclause
(III) or (IV) of paragraph (36)(G)(i).
``(E) Fee waiver.--With respect to a covered loan--
``(i) in lieu of the fee otherwise applicable under
paragraph (23)(A), the Administrator shall collect no fee;
and
``(ii) in lieu of the fee otherwise applicable under
paragraph (18)(A), the Administrator shall collect no fee.
``(F) Eligible churches and religious organizations.--
``(i) Sense of congress.--It is the sense of Congress that
the interim final rule of the Administration entitled
`Business Loan Program Temporary Changes; Paycheck Protection
Program' (85 Fed. Reg. 20817 (April 15, 2020)) properly
clarified the eligibility of churches and religious
organizations for loans made under paragraph (36).
``(ii) Applicability of prohibition.--The prohibition on
eligibility established by section 120.110(k) of title 13,
Code of Federal Regulations, or any successor regulation,
shall not apply to a covered loan.
``(G) Gross receipts for nonprofit and veterans
organizations.--For purposes of calculating gross receipts
under subparagraph (A)(v)(I)(cc) for an eligible entity that
is a nonprofit organization, a veterans organization, or an
organization described in subparagraph (A)(v)(II), gross
receipts--
``(i) shall include proceeds from fundraising events,
federated campaigns, gifts, donor-advised funds, and funds
from similar sources; and
``(ii) shall not include--
``(I) Federal grants (excluding any loan forgiveness on
loans received under paragraph (36) or this paragraph);
``(II) revenues from a supporting organization;
[[Page S4748]]
``(III) grants from private foundations that are disbursed
over the course of more than 1 calendar year; or
``(IV) any contribution of property other than money,
stocks, bonds, and other securities, provided that the non-
cash contribution is not sold by the organization in a
transaction unrelated to the tax-exempt purpose of the
organization.
``(H) Loan forgiveness.--
``(i) In general.--Except as otherwise provided in this
subparagraph, an eligible entity shall be eligible for
forgiveness of indebtedness on a covered loan in the same
manner as an eligible recipient with respect to a loan made
under paragraph (36), as described in section 1106 of the
CARES Act (15 U.S.C. 9005).
``(ii) Forgiveness amount.--An eligible entity shall be
eligible for forgiveness of indebtedness on a covered loan in
an amount equal to the sum of the following costs incurred or
expenditures made during the covered period:
``(I) Payroll costs.
``(II) Any payment of interest on any covered mortgage
obligation (which shall not include any prepayment of or
payment of principal on a covered mortgage obligation).
``(III) Any covered operations expenditure.
``(IV) Any covered property damage cost.
``(V) Any payment on any covered rent obligation.
``(VI) Any covered utility payment.
``(VII) Any covered supplier cost.
``(VIII) Any covered worker protection expenditure.
``(iii) Limitation on forgiveness for all eligible
entities.--The forgiveness amount under this subparagraph
shall be equal to the lesser of--
``(I) the amount described in clause (ii); and
``(II) the amount equal to the quotient obtained by
dividing--
``(aa) the amount of the covered loan used for payroll
costs during the covered period; and
``(bb) 0.60.
``(I) Lender eligibility.--Except as otherwise provided in
this paragraph, a lender approved to make loans under
paragraph (36) may make covered loans under the same terms
and conditions as in paragraph (36).
``(J) Reimbursement for loan processing and servicing.--The
Administrator shall reimburse a lender authorized to make a
covered loan in an amount that is--
``(i) 3 percent of the principal amount of the financing of
the covered loan up to $350,000; and
``(ii) 1 percent of the principal amount of the financing
of the covered loan above $350,000, if applicable.
``(K) Set aside for small entities.--Not less than
$25,000,000,000 of the total amount of covered loans
guaranteed by the Administrator shall be made to eligible
entities with not more than 10 employees as of February 15,
2020.
``(L) Set aside for community financial institutions, small
insured depository institutions, credit unions, and farm
credit system institutions.--Not less than $10,000,000,000 of
the total amount of covered loans guaranteed by the
Administrator shall be made by--
``(i) community financial institutions;
``(ii) insured depository institutions with consolidated
assets of less than $10,000,000,000;
``(iii) credit unions with consolidated assets of less than
$10,000,000,000; and
``(iv) institutions of the Farm Credit System chartered
under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)
with consolidated assets of less than $10,000,000,000 (not
including the Federal Agricultural Mortgage Corporation).
``(M) Publication of guidance.--Not later than 10 days
after the date of enactment of this paragraph, the
Administrator shall issue guidance addressing barriers to
accessing capital for minority, underserved, veteran, and
women-owned business concerns for the purpose of ensuring
equitable access to covered loans.
``(N) Standard operating procedure.--The Administrator
shall, to the maximum extent practicable, allow a lender
approved to make covered loans to use existing program
guidance and standard operating procedures for loans made
under this subsection.
``(O) Prohibition on use of proceeds for lobbying
activities.--None of the proceeds of a covered loan may be
used for--
``(i) lobbying activities, as defined in section 3 of the
Lobbying Disclosure Act of 1995 (2 U.S.C. 1602);
``(ii) lobbying expenditures related to a State or local
election; or
``(iii) expenditures designed to influence the enactment of
legislation, appropriations, regulation, administrative
action, or Executive order proposed or pending before
Congress or any State government, State legislature, or local
legislature or legislative body.''.
(j) Continued Access to the Paycheck Protection Program.--
(1) In general.--Section 7(a)(36)(E)(ii) of the Small
Business Act (15 U.S.C. 636(a)(36)(E)(ii)) is amended by
striking ``$10,000,000'' and inserting ``$2,000,000''.
(2) Applicability of maximum loan amount calculation.--
(A) Definitions.--In this paragraph, the terms ``covered
loan'' and ``eligible recipient'' have the meanings given
those terms in section 7(a)(36) of the Small Business Act (15
U.S.C. 636(a)(36)).
(B) Applicability.--The amendment made by paragraph (1)
shall apply only with respect to a covered loan applied for
by an eligible recipient on or after the date of enactment of
this Act.
(k) Increased Ability for Paycheck Protection Program
Borrowers to Request an Increase in Loan Amount Due to
Updated Regulations.--
(1) Definitions.--In this subsection, the terms ``covered
loan'' and ``eligible recipient'' have the meanings given
those terms in section 7(a)(36) of the Small Business Act (15
U.S.C. 636(a)(36)).
(2) Increased amount.--Notwithstanding the interim final
rule issued by the Administration entitled ``Business Loan
Program Temporary Changes; Paycheck Protection Program--Loan
Increases'' (85 Fed. Reg. 29842 (May 19, 2020)), an eligible
recipient of a covered loan that is eligible for an increased
covered loan amount as a result of any interim final rule
that allows for covered loan increases may submit a request
for an increase in the covered loan amount even if--
(A) the initial covered loan amount has been fully
disbursed; or
(B) the lender of the initial covered loan has submitted to
the Administration a Form 1502 report related to the covered
loan.
(l) Calculation of Maximum Loan Amount for Farmers and
Ranchers Under the Paycheck Protection Program.--
(1) In general.--Section 7(a)(36) of the Small Business Act
(15 U.S.C. 636(a)(36)), as amended by subsection (j) of this
section, is amended--
(A) in subparagraph (E), in the matter preceding clause
(i), by striking ``During'' and inserting ``Except as
provided in subparagraph (T), during''; and
(B) by adding at the end the following:
``(T) Calculation of maximum loan amount for farmers and
ranchers.--
``(i) Definition.--In this subparagraph, the term `covered
recipient' means an eligible recipient that--
``(I) operates as a sole proprietorship or as an
independent contractor, or is an eligible self-employed
individual;
``(II) reports farm income or expenses on a Schedule F (or
any equivalent successor schedule); and
``(III) was in business during the period beginning on
February 15, 2019 and ending on June 30, 2019.
``(ii) No employees.--With respect to covered recipient
without employees, the maximum covered loan amount shall be
the lesser of--
``(I) the sum of--
``(aa) the product obtained by multiplying--
``(AA) the gross income of the covered recipient in 2019,
as reported on a Schedule F (or any equivalent successor
schedule), that is not more than $100,000, divided by 12; and
``(BB) 2.5; and
``(bb) the outstanding amount of a loan under subsection
(b)(2) that was made during the period beginning on January
31, 2020 and ending on April 3, 2020 that the borrower
intends to refinance under the covered loan, not including
any amount of any advance under the loan that is not required
to be repaid; or
``(II) $2,000,000.
``(iii) With employees.--With respect to a covered
recipient with employees, the maximum covered loan amount
shall be calculated using the formula described in
subparagraph (E), except that the gross income of the covered
recipient described in clause (ii)(I)(aa)(AA) of this
subparagraph, as divided by 12, shall be added to the sum
calculated under subparagraph (E)(i)(I).
``(iv) Recalculation.--A lender that made a covered loan to
a covered recipient before the date of enactment of this
subparagraph may, at the request of the covered recipient--
``(I) recalculate the maximum loan amount applicable to
that covered loan based on the formula described in clause
(ii) or (iii), as applicable, if doing so would result in a
larger covered loan amount; and
``(II) provide the covered recipient with additional
covered loan amounts based on that recalculation.''.
(m) Farm Credit System Institutions.--
(1) Definition of farm credit system institution.--In this
subsection, the term ``Farm Credit System institution''--
(A) means an institution of the Farm Credit System
chartered under the Farm Credit Act of 1971 (12 U.S.C. 2001
et seq.); and
(B) does not include the Federal Agricultural Mortgage
Corporation.
(2) Facilitation of participation in ppp and second draw
loans.--
(A) Applicable rules.--Solely with respect to loans under
paragraphs (36) and (37) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), Farm Credit Administration
regulations and guidance issued as of July 14, 2020, and
compliance with such regulations and guidance, shall be
deemed functionally equivalent to requirements referenced in
section 3(a)(iii)(II) of the interim final rule of the
Administration entitled ``Business Loan Program Temporary
Changes; Paycheck Protection Program'' (85 Fed. Reg. 20811
(April 15, 2020)) or any similar requirement referenced in
that interim final rule in implementing such paragraph (37).
(B) Applicability of certain loan requirements.--For
purposes of making loans under paragraph (36) or (37) of
section 7(a) of the Small Business Act (15 U.S.C. 636(a)) or
[[Page S4749]]
forgiving those loans in accordance with section 1106 of the
CARES Act (15 U.S.C. 9005) and subparagraph (H) of such
paragraph (37), sections 4.13, 4.14, and 4.14A of the Farm
Credit Act of 1971 (12 U.S.C. 2199, 2202, 2202a) (including
regulations issued under those sections) shall not apply.
(C) Risk weight.--
(i) In general.--With respect to the application of Farm
Credit Administration capital requirements, a loan described
in clause (ii)--
(I) shall receive a risk weight of zero percent; and
(II) shall not be included in the calculation of any
applicable leverage ratio or other applicable capital ratio
or calculation.
(ii) Loans described.--A loan referred to in clause (i)
is--
(I) a loan made by a Farm Credit Bank described in section
1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)) to
a Federal Land Bank Association, a Production Credit
Association, or an agricultural credit association described
in that section to make loans under paragraph (36) or (37) of
section 7(a) of the Small Business Act (15 U.S.C. 636(a)) or
forgive those loans in accordance with section 1106 of the
CARES Act (15 U.S.C. 9005) and subparagraph (H) of such
paragraph (37); or
(II) a loan made by a Federal Land Bank Association, a
Production Credit Association, an agricultural credit
association, or the bank for cooperatives described in
section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C.
2002(a)) under paragraph (36) or (37) of section 7(a) of the
Small Business Act (15 U.S.C. 636(a)).
(D) Reservation of loan guarantees.--Section 7(a)(36)(S) of
the Small Business Act (15 U.S.C. 636(a)(36)(S)) is amended--
(i) in clause (i)--
(I) in subclause (I), by striking ``and'' at the end;
(II) in subclause (II), by striking the period at the end
and inserting ``; and''; and
(III) by adding at the end the following:
``(III) institutions of the Farm Credit System chartered
under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)
with consolidated assets of not less than $10,000,000,000 and
less than $50,000,000,000.''; and
(ii) in clause (ii)--
(I) in subclause (II), by striking ``and'' at the end;
(II) in subclause (III), by striking the period at the end
and inserting ``; and''; and
(III) by adding at the end the following:
``(IV) institutions of the Farm Credit System chartered
under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)
with consolidated assets of less than $10,000,000,000.''.
(n) Definition of Seasonal Employer.--
(1) PPP loans.--Section 7(a)(36)(A) of the Small Business
Act (15 U.S.C. 636(a)(36)(A)) is amended--
(A) in clause (xi), by striking ``and'' at the end;
(B) in clause (xii), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(xiii) the term `seasonal employer' means an eligible
recipient that--
``(I) does not operate for more than 7 months in any
calendar year; or
``(II) during the preceding calendar year, had gross
receipts for any 6 months of that year that were not more
than 33.33 percent of the gross receipts of the employer for
the other 6 months of that year.''.
(2) Loan forgiveness.--Paragraph (12) of section 1106(a) of
the CARES Act (15 U.S.C. 9005(a)), as so redesignated by
subsection (d)(2) of this section, is amended to read as
follows:
``(12) the terms `payroll costs' and `seasonal employer'
have the meanings given those terms in section 7(a)(36) of
the Small Business Act (15 U.S.C. 636(a)(36)).''.
(o) Changes to the 7(a) Loan Guaranty Program for Recovery
Sector Business Concerns.--Section 7(a) of the Small Business
Act (15 U.S.C. 636(a)), as amended by subsection (i) of this
section, is amended by adding at the end the following:
``(38) Recovery sector loans.--
``(A) Definitions.--In this paragraph--
``(i) the term `covered loan' means a loan made under this
paragraph;
``(ii) the term `covered population census tract' means a
population census tract for which--
``(I) in the case of a tract that is not located within a
metropolitan area, the median income does not exceed 80
percent of the statewide (or, with respect to a possession or
territory of the United States, the possession- or territory-
wide) median family income; or
``(II) in the case of a tract that is located within a
metropolitan area, the median family income does not exceed
80 percent of the greater of the statewide (or, with respect
to a possession or territory of the United States, the
possession- or territory-wide) median family income and the
metropolitan area median family income;
``(iii) the term `covered seasonal employer' means a small
business concern that--
``(I) is a seasonal employer, as defined in paragraph (36);
and
``(II) during the preceding calendar year--
``(aa) had gross receipts as described in paragraph
(36)(A)(xiii)(II); and
``(bb) employed not more than 250 employees during not
fewer than 5 months out of that year;
``(iv) the term `eligible entity'--
``(I) means any small business concern that--
``(aa) except with respect to a covered seasonal employer,
employs not more than 500 employees;
``(bb)(AA) except as provided in subitems (BB), (CC), and
(DD), had gross receipts during the first or second quarter
in 2020 that are less than 50 percent of the gross receipts
of the business concern during the same quarter in 2019;
``(BB) if the small business concern was not in business
during the first or second quarter of 2019, but was in
business during the third and fourth quarter of 2019, had
gross receipts during the first or second quarter of 2020
that are less than 50 percent of the amount of the gross
receipts of the small business concern during the third or
fourth quarter of 2019;
``(CC) if the small business concern was not in business
during the first, second, or third quarter of 2019, but was
in business during the fourth quarter of 2019, had gross
receipts during the first or second quarter of 2020 that are
less than 50 percent of the amount of the gross receipts of
the small business concern during the fourth quarter of 2019;
or
``(DD) if the small business concern was not in business
during the first or second quarter of 2020, had gross
receipts during any 2-month period during 2020 that are less
than 50 percent of the amount of the gross receipts of the
small business concern during any other 2-month period during
2020; and
``(cc)(AA) is a covered seasonal employer seeking a covered
loan of not more than $2,000,000; or
``(BB) is a small business concern the principal place of
business of which is in, and not less than 50 percent of the
total gross income of which is derived from the active
conduct of the business concern within, a small business low-
income census tract; and
``(II) does not include--
``(aa) an entity described in paragraph (37)(A)(v)(II);
``(bb) any entity that received a loan under paragraph
(37); or
``(cc) any entity that received a loan under paragraph (36)
after the date of enactment of this paragraph; and
``(v) the term `small business low-income census tract'--
``(I) means--
``(aa) a covered population census tract for which the
poverty rate is not less than 20 percent; or
``(bb) an area--
``(AA) that is not tracted as a population census tract;
``(BB) for which the poverty rate in the equivalent county
division (as defined by the Bureau of the Census) is not less
than 20 percent; and
``(CC) for which the median income in the equivalent county
division (as defined by the Bureau of the Census) does not
exceed 80 percent of the statewide (or, with respect to a
possession or territory of the United States, the possession-
or territory-wide) median income; and
``(II) does not include any area or population census tract
with a median family income that is not less than 120 percent
of the median family income in the United States, according
to the most recent American Communities Survey data from the
Bureau of the Census.
``(B) Loans.--Except as otherwise provided in this
paragraph, the Administrator may guarantee covered loans made
to eligible entities--
``(i) under the same terms, conditions, and processes as a
loan made under this subsection; and
``(ii) to meet working capital needs, acquire fixed assets,
or refinance existing indebtedness while recovering from the
COVID-19 pandemic.
``(C) Maximum loan amount.--The maximum amount of a covered
loan made to an eligible entity shall be the lesser of--
``(i) $10,000,000; or
``(ii) the amount equal to 200 percent of the average
annual receipts of the eligible entity.
``(D) Loan number limitation.--An eligible entity may only
receive 1 covered loan.
``(E) 90 day rule for maximum loan amount.--The maximum
aggregate loan amount of loans guaranteed under this
subsection that are approved for an eligible entity
(including any affiliates) within 90 days of approval of
another loan under this subsection for the eligible entity
(including any affiliates) shall not exceed $10,000,000.
``(F) Application deadline.--An eligible entity desiring a
covered loan shall submit an application not later than
December 31, 2020.
``(G) Fee waiver.--With respect to a covered loan--
``(i) in lieu of the fee otherwise applicable under
paragraph (23)(A), the Administrator shall collect no fee;
and
``(ii) in lieu of the fee otherwise applicable under
paragraph (18)(A), the Administrator shall collect no fee.
``(H) Loan terms.--
``(i) In general.--In order to receive a covered loan, an
eligible entity shall not be required to show that the
eligible entity is unable to obtain credit elsewhere.
``(ii) Maturity and interest rate.--A covered loan shall--
``(I) have a maturity of 20 years; and
``(II) bear an interest rate of equal to the sum of--
``(aa) the Secured Overnight Financing Rate in effect for
each of the days in the relevant quarter that interest is
charged, as compiled and released by the Federal Reserve Bank
of New York; and
``(bb) 300 basis points.
[[Page S4750]]
``(iii) Guarantee.--In an agreement to participate in a
covered loan on a deferred basis, the participation by the
Administration shall be 100 percent of the covered loan.
``(iv) Subsidy for interest payments.--
``(I) In general.--The Administrator shall pay the amount
of interest that is owed on a covered loan in regular
servicing status for the maturity of the loan such that the
interest rate paid by the eligible entity is, at all times,
equal to a rate of 1 percent.
``(II) Timing of payment.--The Administrator shall--
``(aa) begin making payments under subclause (I) not later
than 30 days after the date on which the first such payment
is due; and
``(bb) make payments without regard to the payment deferral
described in clause (iv).
``(III) Application of payment.--Any payment made by the
Administrator under subclause (I) shall be applied to the
covered loan such that the eligible entity is relieved of the
obligation to pay that amount.
``(v) Payment deferral.--
``(I) In general.--No payment of principal or interest
shall be due on a covered loan for the first 2 years of the
covered loan.
``(II) Additional deferral.--After the 2-year deferral
period under subclause (I), the Administrator may grant not
more than an additional 2 years of principal deferral to the
eligible entity if the eligible entity is certified by the
Administrator and the Secretary as economically distressed
based on publicly available criteria established by the
Administrator.
``(vi) Limitation on changes in terms.--Notwithstanding any
other provision of this subsection, for a covered loan, the
Administrator shall not approve any increase in loan amount
or change in guaranty percentage, interest rate, interest
accrual method, or maturity, except for such changes as may
be necessary for prepayment and the deferment of payment
under clause (v).
``(I) Prohibition on use of proceeds for disaster loans.--
An eligible entity shall not use the proceeds of a covered
loan to refinance any loan made under subsection (b).
``(J) Secondary market.--In order to increase the liquidity
of the secondary market for covered loans, the Administrator
shall, not later than 60 days after the date of enactment of
this paragraph, substantially reduce barriers to the sale of
covered loans on the secondary market.
``(K) Lender eligibility.--In order to increase access to
and the equitable distribution of covered loans, the
Administrator shall establish a process by which a lender
approved to make loans under paragraph (36) may make covered
loans.
``(L) Reimbursement for loan processing and servicing.--The
Administrator shall reimburse a lender authorized to make a
covered loan in an amount that is--
``(i) 3 percent of the principal amount of the financing of
the covered loan up to $350,000; and
``(ii) 1 percent of the principal amount of the financing
of the covered loan above $350,000, if applicable.
``(M) Standard operating procedure.--The Administrator
shall, to the maximum extent practicable, allow a lender
approved to make covered loans to use existing program
guidance and standard operating procedures for loans made
under this subsection.''.
(p) Eligibility of 501(c)(6) Organizations for Loans Under
the Paycheck Protection Program.--Section 7(a)(36)(D) of the
Small Business Act (15 U.S.C. 636(a)(36)(D)) is amended--
(1) in clause (v), by inserting ``or whether an
organization described in clause (vii) employs not more than
150 employees,'' after ``clause (i)(I),'';
(2) in clause (vi), by inserting ``, an organization
described in clause (vii),'' after ``nonprofit
organization''; and
(3) by adding at the end the following:
``(vii) Eligibility for certain 501(c)(6) organizations.--
``(I) In general.--Except as provided in subclause (II),
any organization that is described in section 501(c)(6) of
the Internal Revenue Code and that is exempt from taxation
under section 501(a) of such Code (excluding professional
sports leagues and organizations with the purpose of
promoting or participating in a political campaign or other
activity) shall be eligible to receive a covered loan if--
``(aa) the organization does not receive more than 10
percent of its receipts from lobbying activities;
``(bb) the lobbying activities of the organization do not
comprise more than 10 percent of the total activities of the
organization; and
``(cc) the organization employs not more than 150
employees.
``(II) Destination marketing organizations.--
Notwithstanding subclause (I), during the covered period, any
destination marketing organization shall be eligible to
receive a covered loan if--
``(aa) the destination marketing organization does not
receive more than 10 percent of its receipts from lobbying
activities;
``(bb) the lobbying activities of the destination marketing
organization do not comprise more than 10 percent of the
total activities of the organization;
``(cc) the destination marketing organization employs not
more than 150 employees; and
``(dd) the destination marketing organization--
``(AA) is described in section 501(c) of the Internal
Revenue Code and is exempt from taxation under section 501(a)
of such Code; or
``(BB) is a quasi-governmental entity or is a political
subdivision of a State or local government, including any
instrumentality of those entities.''.
(q) Prohibition on Use of Loan Proceeds for Lobbying
Activities.--Section 7(a)(36)(F) of the Small Business Act
(15 U.S.C. 636(a)(36)(F)) is amended by adding at the end the
following:
``(vi) Prohibition.--None of the proceeds of a covered loan
may be used for--
``(I) lobbying activities, as defined in section 3 of the
Lobbying Disclosure Act of 1995 (2 U.S.C. 1602);
``(II) lobbying expenditures related to a State or local
election; or
``(III) expenditures designed to influence the enactment of
legislation, appropriations, regulation, administrative
action, or Executive order proposed or pending before
Congress or any State government, State legislature, or local
legislature or legislative body.''.
(r) Effective Date; Applicability.--The amendments made to
paragraph (36) of section 7(a) of the Small Business Act (15
U.S.C. 636(a)) and title I of the CARES Act (Public Law 116-
136) under this section shall be effective as if included in
the CARES Act and shall apply to any loan made pursuant to
section 7(a)(36) of the Small Business Act (15 U.S.C.
636(a)(36)).
(s) Bankruptcy Provisions.--
(1) In general.--Section 364 of title 11, United States
Code, is amended by adding at the end the following:
``(g)(1) The court, after notice and a hearing, may
authorize a debtor in possession or a trustee that is
authorized to operate the business of the debtor under
section 1183, 1184, 1203, 1204, or 1304 of this title to
obtain a loan under paragraph (36) or (37) of section 7(a) of
the Small Business Act (15 U.S.C. 636(a)), and such loan
shall be treated as a debt to the extent the loan is not
forgiven in accordance with section 1106 of the CARES Act (15
U.S.C. 9005) or subparagraph (H) of such paragraph (37), as
applicable, with priority equal to a claim of the kind
specified in subsection (c)(1) of this section.
``(2) The trustee may incur debt described in paragraph (1)
notwithstanding any provision in a contract, prior order
authorizing the trustee to incur debt under this section,
prior order authorizing the trustee to use cash collateral
under section 363, or applicable law that prohibits the
debtor from incurring additional debt.
``(3) The court shall hold a hearing within 7 days after
the filing and service of the motion to obtain a loan
described in paragraph (1).''.
(2) Allowance of administrative expenses.--Section 503(b)
of title 11, United States Code, is amended--
(A) in paragraph (8)(B), by striking ``and'' at the end;
(B) in paragraph (9), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(10) any debt incurred under section 364(g)(1) of this
title.''.
(3) Confirmation of plan for reorganization.--Section 1191
of title 11, United States Code, is amended by adding at the
end the following:
``(f) Special Provision Related to COVID-19 Pandemic.--
Notwithstanding section 1129(a)(9)(A) of this title and
subsection (e) of this section, a plan that provides for
payment of a claim of a kind specified in section 503(b)(10)
of this title may be confirmed under subsection (b) of this
section if the plan proposes to make payments on account of
such claim when due under the terms of the loan giving rise
to such claim.''.
(4) Confirmation of plan for family farmers and
fishermen.--Section 1225 of title 11, United States Code, is
amended by adding at the end the following:
``(d) Notwithstanding section 1222(a)(2) of this title and
subsection (b)(1) of this section, a plan that provides for
payment of a claim of a kind specified in section 503(b)(10)
of this title may be confirmed if the plan proposes to make
payments on account of such claim when due under the terms of
the loan giving rise to such claim.''.
(5) Confirmation of plan for individuals.--Section 1325 of
title 11, United States Code, is amended by adding at the end
the following:
``(d) Notwithstanding section 1322(a)(2) of this title and
subsection (b)(1) of this section, a plan that provides for
payment of a claim of a kind specified in section 503(b)(10)
of this title may be confirmed if the plan proposes to make
payments on account of such claim when due under the terms of
the loan giving rise to such claim.''.
(6) Effective date; sunset.--
(A) Effective date.--The amendments made by paragraphs (1)
through (5) shall--
(i) take effect on the date on which the Administrator
submits to the Director of the Executive Office for United
States Trustees a written determination that, subject to
satisfying any other eligibility requirements, any debtor in
possession or trustee that is authorized to operate the
business of the debtor under section 1183, 1184, 1203, 1204,
or 1304 of title 11, United States Code, would be eligible
for a loan under paragraphs (36) and (37) of section 7(a) of
the Small Business Act (15 U.S.C. 636(a)); and
(ii) apply to any case pending on or commenced on or after
the date described in clause (i).
(B) Sunset.--
(i) In general.--If the amendments made by this subsection
take effect under subparagraph (A), effective on the date
that is 2
[[Page S4751]]
years after the date of enactment of this Act--
(I) section 364 of title 11, United States Code, is amended
by striking subsection (g);
(II) section 503(b) of title 11, United States Code, is
amended--
(aa) in paragraph (8)(B), by adding ``and'' at the end;
(bb) in paragraph (9), by striking ``; and'' at the end and
inserting a period; and
(cc) by striking paragraph (10);
(III) section 1191 of title 11, United States Code, is
amended by striking subsection (f);
(IV) section 1225 of title 11, United States Code, is
amended by striking subsection (d); and
(V) section 1325 of title 11, United States Code, is
amended by striking subsection (d).
(ii) Applicability.--Notwithstanding the amendments made by
clause (i) of this subparagraph, if the amendments made by
paragraphs (1), (2), (3), (4), and (5) take effect under
subparagraph (A) of this paragraph, such amendments shall
apply to any case under title 11, United States Code,
commenced before the date that is 2 years after the date of
enactment of this Act.
(t) Oversight.--
(1) Compliance with oversight requirements.--
(A) In general.--Except as provided in subparagraph (B), on
and after the date of enactment of this Act, the
Administrator shall comply with any data or information
requests or inquiries made by the Comptroller General of the
United States not later than 30 days (or such later date as
the Comptroller General may specify) after receiving the
request or inquiry.
(B) Exception.--If the Administrator is unable to comply
with a request or inquiry described in subparagraph (A)
within the 30-day period or, if applicable, later period
described in that clause, the Administrator shall, during
that 30-day (or later) period, submit to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a
notification that includes a detailed justification for the
inability of the Administrator to comply with the request or
inquiry.
(2) Testimony.--Not later than the date that is 30 days
after the date of enactment of this Act, and every quarter
thereafter until the date that is 2 years after the date of
enactment of this Act, the Administrator and the Secretary of
the Treasury shall testify before the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives regarding
implementation of this section and the amendments made by
this section.
(u) Conflicts of Interest.--
(1) Definitions.--In this subsection:
(A) Controlling interest.--The term ``controlling
interest'' means owning, controlling, or holding not less
than 20 percent, by vote or value, of the outstanding amount
of any class of equity interest in an entity.
(B) Covered entity.--
(i) Definition.--The term ``covered entity'' means an
entity in which a covered individual directly or indirectly
holds a controlling interest.
(ii) Treatment of securities.--For the purpose of
determining whether an entity is a covered entity, the
securities owned, controlled, or held by 2 or more
individuals who are related as described in subparagraph
(C)(ii) shall be aggregated.
(C) Covered individual.--The term ``covered individual''
means--
(i) the President, the Vice President, the head of an
Executive department, or a Member of Congress; and
(ii) the spouse, child, son-in-law, or daughter-in-law, as
determined under applicable common law, of an individual
described in clause (i).
(D) Executive department.--The term ``Executive
department'' has the meaning given the term in section 101 of
title 5, United States Code.
(E) Member of congress.--The term ``Member of Congress''
means a Member of the Senate or House of Representatives, a
Delegate to the House of Representatives, and the Resident
Commissioner from Puerto Rico.
(F) Equity interest.--The term ``equity interest'' means--
(i) a share in an entity, without regard to whether the
share is--
(I) transferable; or
(II) classified as stock or anything similar;
(ii) a capital or profit interest in a limited liability
company or partnership; or
(iii) a warrant or right, other than a right to convert, to
purchase, sell, or subscribe to a share or interest described
in clause (i) or (ii), respectively.
(2) Requirement.--The principal executive officer and the
principal financial officer, or individuals performing
similar functions, of an entity seeking to enter a
transaction made under paragraph (36), (37), or (38) of
section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
added and amended by this section, shall, before that
transaction is approved, disclose to the Administrator
whether the entity is a covered entity.
(3) Applicability.--The requirement under paragraph (2)--
(A) shall apply with respect to any transaction made under
paragraph (36), (37), or (38) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), as added and amended by this
section, on or after the date of enactment of this Act; and
(B) shall not apply with respect to--
(i) any transaction described in subparagraph (A) that was
made before the date of enactment of this Act; or
(ii) forgiveness under section 1106 of the CARES Act (15
U.S.C. 9005) or any other provision of law of any loan
associated with any transaction described in subparagraph (A)
that was made before the date of enactment of this Act.
(v) Small Business Investment Company Program.--
(1) In general.--Part A of title III of the Small Business
Investment Act of 1958 (15 U.S.C. 681 et seq.) is amended--
(A) in section 302(a) (15 U.S.C. 682(a))--
(i) in paragraph (1)--
(I) in subparagraph (A), by striking ``or'' at the end;
(II) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(III) by adding at the end the following:
``(C) $20,000,000, adjusted every 5 years for inflation,
with respect to each licensee authorized or seeking authority
to sell bonds to Administration as a participating investment
company under section 321.''; and
(B) by adding at the end the following:
``SEC. 321. SMALL BUSINESS AND DOMESTIC PRODUCTION RECOVERY
INVESTMENT FACILITY.
``(a) Definitions.--In this section:
``(1) Eligible small business concern.--The term `eligible
small business concern'--
``(A) means a small business concern that--
``(i) meets the revenue reduction requirements established
by paragraph (37)(A)(v)(I)(cc) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a));
``(ii) is a manufacturing business that is assigned a North
American Industry Classification System code beginning with
31, 32, or 33 at the time at which the small business concern
receives an investment from a participating investment
company under the facility; or
``(iii) is located in a small business low-income census
tract; and
``(B) does not include an entity described in paragraph
(37)(A)(v)(II) of such section 7(a).
``(2) Facility.--The term `facility' means the facility
established under subsection (b).
``(3) Fund.--The term `Fund' means the fund established
under subsection (h).
``(4) Participating investment company.--The term
`participating investment company' means a small business
investment company approved under subsection (d) to
participate in the facility
``(5) Protege investment company.--The term `protege
investment company' means a small business investment company
that--
``(A) is majority managed by new, inexperienced, or
otherwise underrepresented fund managers; and
``(B) elects and is selected by the Administration to
participate in the pathway-protege program under subsection
(g).
``(6) Small business concern.--The term `small business
concern' has the meaning given the term in section 3(a) of
the Small Business Act (15 U.S.C. 632(a)).
``(7) Small business low-income census tract.--The term
`small business low-income census tract' has the meaning
given the term in section 7(a)(38)(A) of the Small Business
Act.
``(b) Establishment.--
``(1) Facility.--The Administrator shall establish and
carry out a facility to improve the recovery of eligible
small business concerns from the COVID-19 pandemic, increase
resiliency in the manufacturing supply chain of eligible
small business concerns, and increase the economic
development of small business low-income census tracts by
providing financial assistance to participating investment
companies that facilitate equity financings to eligible small
business concerns in accordance with this section.
``(2) Administration of facility.--The facility shall be
administered by the Administrator acting through the
Associate Administrator described in section 201.
``(c) Applications.--
``(1) In general.--Any small business investment company
may submit to the Administrator an application to participate
in the facility.
``(2) Requirements for application.--An application to
participate in the facility shall include the following:
``(A) A business plan describing how the applicant intends
to make successful equity investments in eligible small
business concerns.
``(B) Information regarding the relevant investment
qualifications and backgrounds of the individuals responsible
for the management of the applicant.
``(C) A description of the extent to which the applicant
meets the selection criteria under subsection (d)(2).
``(3) Exceptions to application for new licensees.--Not
later than 90 days after the date of enactment of this
section, the Administrator shall reduce requirements for
applicants applying to operate as a participating investment
company under this section in order to encourage the
participation of new small business investment companies in
the facility under this section, which may include the
requirements established under part 107 of title 13, Code of
Federal Regulations, or any successor regulation, relating
to--
``(A) the approval of initial management expenses;
``(B) the management ownership diversity requirement;
[[Page S4752]]
``(C) the disclosure of general compensatory practices and
fee structures; or
``(D) any other requirement that the Administrator
determines to be an obstacle to achieving the purposes
described in this paragraph.
``(d) Selection of Participating Investment Companies.--
``(1) Determination.--
``(A) In general.--Except as provided in paragraph (3), not
later than 60 days after the date on which the Administrator
receives an application under subsection (c), the
Administrator shall--
``(i) make a final determination to approve or disapprove
such applicant to participate in the facility; and
``(ii) transmit the determination to the applicant in
writing.
``(B) Commitment amount.--Except as provided in paragraph
(3), at the time of approval of an applicant, the
Administrator shall make a determination of the amount of the
commitment that may be awarded to the applicant under this
section.
``(2) Selection criteria.--In making a determination under
paragraph (1), the Administrator shall consider--
``(A) the probability that the investment strategy of the
applicant will successfully repay any financial assistance
provided by the Administration, including the probability of
a return significantly in excess thereof;
``(B) the probability that the investments made by the
applicant will--
``(i) provide capital to eligible small business concerns;
or
``(ii) create or preserve jobs in the United States;
``(C) the probability that the applicant will meet the
objectives in the business plan of the applicant, including
the financial goals, and, if applicable, the pathway-protege
program in accordance with subsection (g); and
``(D) the probability that the applicant will assist
eligible small business concerns in achieving profitability.
``(3) Approval of participating investment companies.--
``(A) Provisional approval.--
``(i) In general.--Notwithstanding paragraph (1), with
respect to an application submitted by an applicant to
operate as a participating investment company under this
section, the Administrator may provide provisional approval
for the applicant in lieu of a final determination of
approval and determination of the amount of the commitment
under that paragraph.
``(ii) Purpose.--The purpose of a provisional approval
under clause (i) is to--
``(I) encourage applications from investment companies with
an investment mandate from the committed private market
capital of the investment company that does not conform to
the requirements described in this section at the time of
application;
``(II) allow the applicant to more effectively raise
capital commitments in the private markets by referencing the
intent of the Administrator to award the applicant a
commitment; and
``(III) allow the applicant to more precisely request the
desired amount of commitment pending the securing of capital
from private market investors.
``(iii) Limit on period of the time.--The period between a
provisional approval under clause (i) and the final
determination of approval under paragraph (1) shall not
exceed 12 months.
``(e) Commitments and SBIC Bonds.--
``(1) In general.--The Administrator may, out of amounts
available in the Fund, purchase or commit to purchase from a
participating investment company 1 or more accruing bonds
that include equity features as described in this subsection.
``(2) Bond terms.--A bond purchased by the Administrator
from a participating investment company under this subsection
shall have the following terms and conditions:
``(A) Term and interest.--
``(i) In general.--The bond shall be issued for a term of
not less than 15 years and shall bear interest at a rate
determined by the Administrator of not more than 2 percent.
``(ii) Accrual of interest.--Interest on the bond shall
accrue and shall be payable in accordance with subparagraph
(D).
``(iii) Prepayment.--The bond shall be prepayable without
penalty after the end of the 1-year period beginning on the
date on which the bond was purchased.
``(B) Profits.--
``(i) In general.--The Administration shall be entitled to
receive a share of the profits net of any profit sharing
performance compensation of the participating investment
company equal to the quotient obtained by dividing--
``(I) one-third of the commitment that the participating
investment company is approved for under subsection (d); by
``(II) the commitment approved under subsection (d) plus
the regulatory capital of the participating investment
company at the time of approval under that subsection.
``(ii) Determination of percentage.--The share to which the
Administration is entitled under clause (i)--
``(I) shall be determined at the time of approval under
subsection (d); and
``(II) without the approval of the Administration, shall
not be revised, including to reflect subsequent distributions
of profits, returns of capital, or repayments of bonds, or
otherwise.
``(C) Profit sharing performance compensation.--
``(i) Receipt by administration.--The Administration shall
receive a share of profits of not more than 2 percent, which
shall be deposited into the Fund and be available to make
commitments under this subsection.
``(ii) Receipt by managers.--The managers of the
participating investment company may receive a maximum profit
sharing performance compensation of 25 percent minus the
share of profits paid to the Administration under clause (i).
``(D) Prohibition on distributions.--No distributions on
capital, including profit distributions, shall be made by the
participating investment company to the investors or managers
of the participating investment company until the
Administration has received payment of all accrued interest
on the bond committed under this section.
``(E) Repayment of principal.--Except as described in
subparagraph (F), repayments of principal of the bond of a
participating investment company shall be--
``(i) made at the same time as returns of private capital;
and
``(ii) in amounts equal to the pro rata share of the
Administration of the total amount being repaid or returned
at such time.
``(F) Liquidation or default.--Upon any liquidation event
or default, as defined by the Administration, any unpaid
principal or accrued interest on the bond shall--
``(i) have a priority over all equity of the participating
investment company; and
``(ii) be paid before any return of equity or any other
distributions to the investors or managers of the
participating investment company.
``(3) Amount of commitments and purchases.--
``(A) Maximum amount.--The maximum amount of outstanding
bonds and commitments to purchase bonds for any participating
investment company under the facility shall be the lesser
of--
``(i) twice the amount of the regulatory capital of the
participating investment company; or
``(ii) $200,000,000.
``(4) Commitment process.--Commitments by the
Administration to purchase bonds under the facility shall
remain available to be sold by a participating investment
company until the end of the fourth fiscal year following the
year in which the commitment is made, subject to review and
approval by the Administration based on regulatory
compliance, financial status, change in management, deviation
from business plan, and such other limitations as may be
determined by the Administration by regulation or otherwise.
``(5) Commitment conditions.--
``(A) In general.--As a condition of receiving a commitment
under the facility, not less than 50 percent of amounts
invested by the participating investment company shall be
invested in eligible small business concerns.
``(B) Examinations.--In addition to the matters set forth
in section 310(c), the Administration shall examine each
participating investment company in such detail so as to
determine whether the participating investment company has
complied with the requirements under this subsection.
``(f) Distributions and Fees.--
``(1) Distribution requirements.--
``(A) Distributions.--As a condition of receiving a
commitment under the facility, a participating investment
company shall make all distributions to the Administrator in
the same form and in a manner as are made to investors, or
otherwise at a time and in a manner consistent with
regulations or policies of the Administration.
``(B) Allocations.--A participating investment company
shall make allocations of income, gain, loss, deduction, and
credit to the Administrator with respect to any outstanding
bonds as if the Administrator were an investor.
``(2) Fees.--The Administrator may not charge fees for
participating investment companies other than examination
fees that are consistent with the license of the
participating investment company.
``(3) Bifurcation.--Losses on bonds issued by participating
investment companies shall not be offset by fees or any other
charges on debenture small business investment companies.
``(g) Protege Program.--The Administrator shall establish a
pathway-protege program in which a protege investment company
may receive technical assistance and program support from a
participating investment company on a voluntary basis and
without penalty for non-participation.
``(h) Loss Limiting Fund.--
``(1) In general.--There is established in the Treasury a
fund for making commitments and purchasing bonds with equity
features under the facility and receiving capital returned by
participating investment companies.
``(2) Use of funds.--Amounts appropriated to the Fund or
deposited in the Fund under paragraph (3) shall be available
to the Administrator, without further appropriation, for
making commitments and purchasing bonds under the facility
and expenses and payments, excluding administrative expenses,
relating to the operations of the Administrator under the
facility.
``(3) Depositing of amounts.--
``(A) In general.--All amounts received by the
Administrator from a participating investment company
relating to the facility, including any moneys, property, or
assets
[[Page S4753]]
derived by the Administrator from operations in connection
with the facility, shall be deposited in the Fund.
``(B) Period of availability.--Amounts deposited under
subparagraph (A) shall remain available until expended.
``(i) Application of Other Sections.--To the extent not
inconsistent with requirements under this section, the
Administrator may apply sections 309, 311, 312, 313, and 314
to activities under this section and an officer, director,
employee, agent, or other participant in a participating
investment company shall be subject to the requirements under
such sections.
``(j) Authorization of Appropriations.--There is authorized
to be appropriated for the first fiscal year beginning after
the date of enactment of this part $10,000,000,000 to carry
out the facility. Amounts appropriated pursuant to this
subsection shall remain available until the end of the second
fiscal year beginning after the date of enactment of this
section.''.
(2) Approval of bank-owned, non-leveraged applicants.--
Section 301(c)(2) of the Small Business Investment Act of
1958 (15 U.S.C. 681(c)(2)) is amended--
(A) in subparagraph (B), in the matter preceding clause
(i), by striking ``Within'' and inserting ``Except as
provided in subparagraph (C), within''; and
(B) by adding at the end the following:
``(C) Exception for bank-owned, non-leveraged applicants.--
Notwithstanding subparagraph (B), not later than 45 days
after the date on which the Administrator receives a
completed application submitted by a bank-owned, non-
leveraged applicant in accordance with this subsection and in
accordance with such requirements as the Administrator may
prescribe by regulation, the Administrator shall--
``(i) review the application in its entirety; and
``(ii)(I) approve the application and issue a license for
such operation to the applicant if the requirements of this
section are satisfied; or
``(II) disapprove the application and notify the applicant
in writing of the disapproval.''.
(3) Electronic submissions.--Part A of title III of the
Small Business Investment Act of 1958 (15 U.S.C. 681 et
seq.), as amended by paragraph (1) of this subsection, is
amended by adding at the end the following:
``SEC. 322. ELECTRONIC SUBMISSIONS.
``The Administration shall permit any document submitted
under this title, or pursuant to a regulation carrying out
this title, to be submitted electronically, including by
permitting an electronic signature for any signature that is
required on such a document.''.
(w) Commitment Authority and Appropriations.--
(1) Commitment authority.--
(A) CARES act amendments.--Section 1102(b) of the CARES Act
(Public Law 116-136) is amended--
(i) in paragraph (1)--
(I) in the paragraph heading, by inserting ``and second
draw'' after ``PPP'';
(II) by striking ``August 8, 2020'' and inserting
``December 31, 2020'';
(III) by striking ``paragraph (36)'' and inserting
``paragraphs (36) and (37)''; and
(IV) by striking ``$659,000,000,000'' and inserting
``$748,990,000,000''; and
(ii) by amending paragraph (2) to read as follows:
``(B) Other 7(a) loans.--During fiscal year 2020, the
amount authorized for commitments for section 7(a) of the
Small Business Act (15 U.S.C. 636(a)) under the heading
`Small Business Administration--Business Loans Program
Account' in the Financial Services and General Government
Appropriations Act, 2020 (division C of Public Law 116-193)
shall apply with respect to any commitments under such
section 7(a) other than under paragraphs (36), (37), and (38)
of such section 7(a).''.
(B) Recovery sector loans.--During the period beginning on
the date of enactment of this Act and ending on December 31,
2020, the amount authorized for commitments under paragraph
(38) of section 7(a) of the Small Business Act (15 U.S.C.
636(a)), as added by this section, shall be $100,000,000,000.
(2) Direct appropriations.--
(A) Rescission.--With respect to unobligated balances under
the heading `` `Small Business Administration--Business Loans
Program Account, CARES Act'' as of the day before the date of
enactment of this Act, $100,000,000,000 shall be rescinded
and deposited into the general fund of the Treasury.
(B) New direct appropriations.--There is appropriated, out
of amounts in the Treasury not otherwise appropriated, for
the fiscal year ending September 30, 2020--
(i) to remain available until September 30, 2021, for
additional amounts--
(I) $189,990,000,000 under the heading ``Small Business
Administration--Business Loans Program Account, CARES Act''
for the cost of guaranteed loans as authorized under
paragraph (36) and (37) of section 7(a) of the Small Business
Act (15 U.S.C. 636(a)), as amended and added by this section;
(II) $57,700,000,000 under the heading ``Small Business
Administration--Recovery Sector Loans'' for the cost of
guaranteed loans as authorized under paragraph (38) of
section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
added by this section; and
(III) $10,000,000 under the heading under the heading
``Department of Commerce--Minority Business Development
Agency'' for minority business centers of the Minority
Business Development Agency to provide technical assistance
to small business concerns; and
(ii) to remain available until September 30, 2023,
$10,000,000,000 under the heading ``Small Business
Administration--SBIC'' to carry out part D of title III of
the Small Business Investment Act of 1958 (15 U.S.C. 681 et
seq.), as added by this section.
(C) Availability of amounts appropriated for the office of
inspector general.--Section 1107(a)(3) of the CARES Act (15
U.S.C. 9006(a)(3)) is amended by striking ``September 20,
2024'' and inserting ``expended''.
(x) Emergency Designation.--
(1) In general.--The amounts provided under this section
are designated as an emergency requirement pursuant to
section 4(g) of the Statutory Pay-As-You-Go Act of 2010 (2
U.S.C. 933(g)).
(2) Designation in senate.--In the Senate, this section is
designated as an emergency requirement pursuant to section
4112(a) of H. Con. Res. 71 (115th Congress), the concurrent
resolution on the budget for fiscal year 2018.
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