To amend the Small Business Act and the CARES Act to establish a program for second draw loans and make other modifications to the paycheck protection program, and for other purposes.

I 116TH CONGRESS 2D SESSION H. R. 8265 To amend the Small Business Act and the CARES Act to establish a program for second draw loans and make other modifications to the paycheck protection program, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 16, 2020 Mr. CHABOT introduced the following bill; which was referred to the Com- mittee on Small Business, and in addition to the Committee on the Judi- ciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Small Business Act and the CARES Act to establish a program for second draw loans and make other modifications to the paycheck protection program, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. ADDITIONAL ELIGIBLE EXPENSES. 3 (a) ALLOWABLE USE OF PPP LOAN.—Section 4 7(a)(36)(F)(i) of the Small Business Act (15 U.S.C. 5 636(a)(36)(F)(i)) is amended— 6 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8265 IH (1) in subclause (VI), by striking ‘‘and’’ at the 1 end; 2 (2) in subclause (VII), by striking the period at 3 the end and inserting a semicolon; and 4 (3) by adding at the end the following: 5 ‘‘(VIII) covered operations ex- 6 penditures, as defined in section 7 1106(a) of the CARES Act (15 8 U.S.C. 9005(a)); 9 ‘‘(IX) covered property damage 10 costs, as defined in such section 11 1106(a); 12 ‘‘(X) covered supplier costs, as 13 defined in such section 1106(a); and 14 ‘‘(XI) covered worker protection 15 expenditures, as defined in such sec- 16 tion 1106(a).’’. 17 (b) LOAN FORGIVENESS.—Section 1106 of the 18 CARES Act (15 U.S.C. 9005) is amended— 19 (1) in subsection (a)— 20 (A) by redesignating paragraphs (6), (7), 21 and (8) as paragraphs (10), (11), and (12), re- 22 spectively; 23 (B) by redesignating paragraph (5) as 24 paragraph (8); 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8265 IH (C) by redesignating paragraph (4) as 1 paragraph (6); 2 (D) by redesignating paragraph (3) as 3 paragraph (4); 4 (E) by inserting after paragraph (2) the 5 following: 6 ‘‘(3) the term ‘covered operations expenditure’ 7 means a payment for any business software or cloud 8 computing service that facilitates business oper- 9 ations, product or service delivery, the processing, 10 payment, or tracking of payroll expenses, human re- 11 sources, sales and billing functions, or accounting or 12 tracking of supplies, inventory, records and ex- 13 penses;’’; 14 (F) by inserting after paragraph (4), as so 15 redesignated, the following: 16 ‘‘(5) the term ‘covered property damage cost’ 17 means a cost related to property damage and van- 18 dalism or looting due to public disturbances that oc- 19 curred during 2020 that was not covered by insur- 20 ance or other compensation;’’; 21 (G) by inserting after paragraph (6), as so 22 redesignated, the following: 23 ‘‘(7) the term ‘covered supplier cost’ means an 24 expenditure made by an entity to a supplier of goods 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 8265 IH pursuant to a contract in effect before February 15, 1 2020, for the supply of goods that are essential to 2 the operations of the entity at the time at which the 3 expenditure is made;’’; 4 (H) by inserting after paragraph (8), as so 5 redesignated, the following: 6 ‘‘(9) the term ‘covered worker protection ex- 7 penditure’— 8 ‘‘(A) means an operating or a capital ex- 9 penditure that is required to facilitate the adap- 10 tation of the business activities of an entity to 11 comply with requirements established or guid- 12 ance issued by the Department of Health and 13 Human Services, the Centers for Disease Con- 14 trol, or the Occupational Safety and Health Ad- 15 ministration during the period beginning on 16 March 1, 2020, and ending December 31, 2020, 17 related to the maintenance of standards for 18 sanitation, social distancing, or any other work- 19 er or customer safety requirement related to 20 COVID–19; 21 ‘‘(B) may include— 22 ‘‘(i) the purchase, maintenance, or 23 renovation of assets that create or ex- 24 pand— 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 8265 IH ‘‘(I) a drive-through window fa- 1 cility; 2 ‘‘(II) an indoor, outdoor, or com- 3 bined air or air pressure ventilation or 4 filtration system; 5 ‘‘(III) a physical barrier such as 6 a sneeze guard; 7 ‘‘(IV) an indoor, outdoor, or com- 8 bined commercial real property; 9 ‘‘(V) an onsite or offsite health 10 screening capability; or 11 ‘‘(VI) other assets relating to the 12 compliance with the requirements or 13 guidance described in subparagraph 14 (A), as determined by the Adminis- 15 trator in consultation with the Sec- 16 retary of Health and Human Services 17 and the Secretary of Labor; and 18 ‘‘(ii) the purchase of— 19 ‘‘(I) covered materials described 20 in section 328.103(a) of title 44, Code 21 of Federal Regulations, or any suc- 22 cessor regulation; 23 ‘‘(II) particulate filtering face- 24 piece respirators approved by the Na- 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 8265 IH tional Institute for Occupational Safe- 1 ty and Health, including those ap- 2 proved only for emergency use author- 3 ization; or 4 ‘‘(III) other kinds of personal 5 protective equipment, as determined 6 by the Administrator in consultation 7 with the Secretary of Health and 8 Human Services and the Secretary of 9 Labor; and 10 ‘‘(C) does not include residential real prop- 11 erty or intangible property;’’; and 12 (I) in paragraph (11), as so redesig- 13 nated— 14 (i) in subparagraph (C), by striking 15 ‘‘and’’ at the end; 16 (ii) in subparagraph (D), by striking 17 ‘‘and’’ at the end; and 18 (iii) by adding at the end the fol- 19 lowing: 20 ‘‘(E) covered operations expenditures; 21 ‘‘(F) covered property damage costs; 22 ‘‘(G) covered supplier costs; and 23 ‘‘(H) covered worker protection expendi- 24 tures; and’’; 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 8265 IH (2) in subsection (b), by adding at the end the 1 following: 2 ‘‘(5) Any covered operations expenditure. 3 ‘‘(6) Any covered property damage cost. 4 ‘‘(7) Any covered supplier cost. 5 ‘‘(8) Any covered worker protection expendi- 6 ture.’’; 7 (3) in subsection (d)(8), by inserting ‘‘any pay- 8 ment on any covered operations expenditure, any 9 payment on any covered property damage cost, any 10 payment on any covered supplier cost, any payment 11 on any covered worker protection expenditure,’’ after 12 ‘‘rent obligation,’’; and 13 (4) in subsection (e)— 14 (A) in paragraph (2), by inserting ‘‘pay- 15 ments on covered operations expenditures, pay- 16 ments on covered property damage costs, pay- 17 ments on covered supplier costs, payments on 18 covered worker protection expenditures,’’ after 19 ‘‘lease obligations,’’; and 20 (B) in paragraph (3)(B), by inserting 21 ‘‘make payments on covered operations expendi- 22 tures, make payments on covered property dam- 23 age costs, make payments on covered supplier 24 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 8265 IH costs, make payments on covered worker protec- 1 tion expenditures,’’ after ‘‘rent obligation,’’. 2 SEC. 2. LENDER SAFE HARBOR. 3 Subsection (h) of section 1106 of the CARES Act 4 (15 U.S.C. 9005) is amended to read as follows: 5 ‘‘(h) HOLD HARMLESS.— 6 ‘‘(1) IN GENERAL.—A lender may rely on any 7 certification or documentation submitted by an ap- 8 plicant for a covered loan or an eligible recipient of 9 a covered loan that— 10 ‘‘(A) is submitted pursuant to any statu- 11 tory requirement relating to covered loans or 12 any rule or guidance issued to carry out any ac- 13 tion relating to covered loans; and 14 ‘‘(B) attests that the applicant or eligible 15 recipient, as applicable, has accurately verified 16 any certification or documentation provided to 17 the lender. 18 ‘‘(2) NO ENFORCEMENT ACTION.—With respect 19 to a lender that relies on a certification or docu- 20 mentation described in paragraph (1)— 21 ‘‘(A) an enforcement action may not be 22 taken against the lender acting in good faith re- 23 lating to origination or forgiveness of a covered 24 loan based on such reliance; and 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 8265 IH ‘‘(B) the lender acting in good faith shall 1 not be subject to any penalties relating to origi- 2 nation or forgiveness of a covered loan based on 3 such reliance.’’. 4 SEC. 3. SELECTION OF COVERED PERIOD FOR FORGIVE- 5 NESS. 6 Section 1106 of the CARES Act (15 U.S.C. 9005) 7 is amended— 8 (1) by amending subsection (a)(4) (as redesig- 9 nated by section 1) to read as follows: 10 ‘‘(4) the term ‘covered period’ means the pe- 11 riod— 12 ‘‘(A) beginning on the date of the origina- 13 tion of a covered loan; and 14 ‘‘(B) ending on a date selected by the eligi- 15 ble recipient of the covered loan that occurs 16 during the period— 17 ‘‘(i) beginning on the date that is 8 18 weeks after such date of origination; and 19 ‘‘(ii) ending on December 31, 2020;’’; 20 and 21 (2) by striking subsection (l). 22 SEC. 4. SIMPLIFIED APPLICATION. 23 Section 1106 of the CARES Act (15 U.S.C. 9005), 24 as amended by section 3 of this Act, is further amended— 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 8265 IH (1) in subsection (e), in the matter preceding 1 paragraph (1), by striking ‘‘An eligible’’ and insert- 2 ing ‘‘Except as provided in subsection (l), an eligi- 3 ble’’; 4 (2) in subsection (f), by inserting ‘‘or the infor- 5 mation required under subsection (l), as applicable’’ 6 after ‘‘subsection (e)’’; and 7 (3) by adding at the end the following: 8 ‘‘(l) SIMPLIFIED APPLICATION.— 9 ‘‘(1) COVERED LOANS UNDER $150,000.— 10 ‘‘(A) IN GENERAL.—Notwithstanding sub- 11 section (e), with respect to a covered loan made 12 to an eligible recipient that is not more than 13 $150,000, the covered loan amount shall be for- 14 given under this section if the eligible recipi- 15 ent— 16 ‘‘(i) signs and submits to the lender 17 an attestation that the eligible recipient 18 made a good faith effort to comply with 19 the requirements under section 7(a)(36) of 20 the Small Business Act (15 U.S.C. 21 636(a)(36)); and 22 ‘‘(ii) for the 3-year period following 23 submission of the attestation under clause 24 (i), retains records relevant to the attesta- 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 8265 IH tion that prove compliance with those re- 1 quirements. 2 ‘‘(B) DEMOGRAPHIC INFORMATION.—An 3 eligible recipient of a covered loan described in 4 subparagraph (A) may complete and submit 5 any form related to borrower demographic in- 6 formation. 7 ‘‘(C) AUDIT.—The Administrator may— 8 ‘‘(i) review and audit covered loans 9 described in subparagraph (A); and 10 ‘‘(ii) in the case of fraud, ineligibility, 11 or other material noncompliance with ap- 12 plicable loan or loan forgiveness require- 13 ments, modify— 14 ‘‘(I) the amount of a covered loan 15 described in subparagraph (A); or 16 ‘‘(II) the loan forgiveness amount 17 with respect to a covered loan de- 18 scribed in subparagraph (A). 19 ‘‘(2) COVERED LOANS BETWEEN $150,000 AND 20 $2,000,000.— 21 ‘‘(A) IN GENERAL.—Notwithstanding sub- 22 section (e), with respect to a covered loan made 23 to an eligible recipient that is more than 24 $150,000 and not more than $2,000,000— 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 8265 IH ‘‘(i) the eligible recipient seeking loan 1 forgiveness under this section— 2 ‘‘(I) is not required to submit the 3 supporting documentation described 4 in paragraph (1) or (2) of subsection 5 (e) or the certification described in 6 subsection (e)(3)(A); 7 ‘‘(II) shall retain all relevant 8 schedules, worksheets, and supporting 9 documentation for the 3-year period 10 following submission of the applica- 11 tion for loan forgiveness; and 12 ‘‘(III) may complete and submit 13 any form related to borrower demo- 14 graphic information; 15 ‘‘(ii) review by the lender of an appli- 16 cation submitted by the eligible recipient 17 for loan forgiveness under this section shall 18 be limited to whether the lender received a 19 complete application, with all fields com- 20 pleted, initialed, or signed, as applicable; 21 and 22 ‘‘(iii) the lender shall— 23 ‘‘(I) accept the application sub- 24 mitted by the eligible recipient for 25 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 8265 IH loan forgiveness under this section; 1 and 2 ‘‘(II) submit the application to 3 the Administrator. 4 ‘‘(B) AUDIT.—The Administrator may— 5 ‘‘(i) review and audit covered loans 6 described in subparagraph (A); and 7 ‘‘(ii) in the case of fraud, ineligibility, 8 or other material noncompliance with ap- 9 plicable loan or loan forgiveness require- 10 ments, modify— 11 ‘‘(I) the amount of a covered loan 12 described in subparagraph (A); or 13 ‘‘(II) the loan forgiveness amount 14 with respect to a covered loan de- 15 scribed in subparagraph (A). 16 ‘‘(3) AUDIT PLAN.— 17 ‘‘(A) IN GENERAL.—Not later than 30 18 days after the date of enactment of this 19 subsectoin, the Administrator shall submit to 20 the Committee on Small Business and Entre- 21 preneurship of the Senate and the Committee 22 on Small Business of the House of Representa- 23 tives an audit plan that details— 24 VerDate Sep 11 2014 19:31 Sep 25, 2020 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H8265.IH H8265 pamtmann on DSKBC0 [Text truncated for display. Full text available on Congress.gov.]