Small Business Debt Relief Extension Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 8376 To improve the debt relief program under the CARES Act, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 24, 2020 Mr. DELGADO introduced the following bill; which was referred to the Com- mittee on Small Business, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned A BILL To improve the debt relief program under the CARES Act, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Small Business Debt 4 Relief Extension Act of 2020’’. 5 SEC. 2. SUBSIDY FOR CERTAIN LOAN PAYMENTS. 6 (a) IN GENERAL.—Section 1112 of the CARES Act 7 (15 U.S.C. 9011) is amended— 8 (1) in subsection (c)— 9 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 8376 IH (A) in paragraph (1)— 1 (i) in the matter preceding subpara- 2 graph (A), by inserting ‘‘, without regard 3 to the date on which the covered loan is 4 fully disbursed and subject to availability 5 of funds’’ after ‘‘status’’; 6 (ii) by amending subparagraphs (A) 7 and (B) to read as follows: 8 ‘‘(A) with respect to a covered loan ap- 9 proved by the Administration before the date of 10 enactment of this Act and not on deferment— 11 ‘‘(i) except as provided in clauses (ii) 12 and (iii), for the 6-month period beginning 13 with the next payment due on the covered 14 loan after the covered loan is fully dis- 15 bursed; 16 ‘‘(ii) for the 11-month period begin- 17 ning with the next payment due on the 18 covered loan after the covered loan is fully 19 disbursed, with respect to a covered loan 20 that— 21 ‘‘(I) is described in subsection 22 (a)(1)(B) or is a loan guaranteed by 23 the Administration under section 7(a) 24 of the Small Business Act (15 U.S.C. 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 8376 IH 636(a)) other than a loan described in 1 clause (i) or (ii) of subsection 2 (a)(1)(A); and 3 ‘‘(II) is made to a borrower oper- 4 ating primarily in an industry other 5 than an industry that is assigned a 6 North American Industry Classifica- 7 tion System code beginning with 61, 8 71, or 72; and 9 ‘‘(iii) for the 18-month period begin- 10 ning with the next payment due on the 11 covered loan after the covered loan is fully 12 disbursed, with respect to— 13 ‘‘(I) a covered loan described in 14 paragraph (1)(A)(i) or paragraph (2) 15 of subsection (a); or 16 ‘‘(II) any covered loan made to a 17 borrower operating primarily in an in- 18 dustry that is assigned— 19 ‘‘(aa) a North American In- 20 dustry Classification System code 21 beginning with 61, 71, or 72; or 22 ‘‘(bb) the North American 23 Industry Classification System 24 Code 485510; 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 8376 IH ‘‘(B) with respect to a covered loan ap- 1 proved by the Administration before the date of 2 enactment of this Act and on deferment— 3 ‘‘(i) except as provided in clauses (ii) 4 and (iii), for the 6-month period beginning 5 with the next payment due on the covered 6 loan after the deferment period and after 7 the covered loan is fully disbursed; 8 ‘‘(ii) for the 11-month period begin- 9 ning with the next payment due on the 10 covered loan after the deferment period 11 and after the covered loan is fully dis- 12 bursed, with respect to a covered loan de- 13 scribed in subclause (I) or (II) of subpara- 14 graph (A)(ii); and 15 ‘‘(iii) for the 18-month period begin- 16 ning with the next payment due on the 17 covered loan after the deferment period 18 and after the covered loan is fully dis- 19 bursed, with respect to a covered loan de- 20 scribed in subclause (I) or (II) of subpara- 21 graph (A)(iii); and’’; and 22 (iii) in subparagraph (C)— 23 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 8376 IH (I) by striking ‘‘covered loan 1 made’’ and inserting ‘‘covered loan 2 approved by the Administration’’; 3 (II) by striking ‘‘6 months after’’ 4 and inserting ‘‘18 months after’’; 5 (III) by inserting ‘‘(or, for a cov- 6 ered loan made by an intermediary to 7 a small business concern using loans 8 or grants received under section 7(m) 9 of the Small Business Act (15 U.S.C. 10 636(m)) or guaranteed by the Admin- 11 istration under the Community Ad- 12 vantage Pilot Program of the Admin- 13 istration, for the 12-month period)’’ 14 after ‘‘6-month period’’; and 15 (IV) by inserting ‘‘after the cov- 16 ered loan is fully disbursed’’ after 17 ‘‘due on the covered loan’’; and 18 (B) by adding at the end the following: 19 ‘‘(4) ADDITIONAL PROVISIONS FOR NEW 20 LOANS.—With respect to a loan described in para- 21 graph (1)(C)— 22 ‘‘(A) the Administrator may further extend 23 the 18-month period described in paragraph 24 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 8376 IH (1)(C) if there are sufficient funds to continue 1 those payments; and 2 ‘‘(B) during the underwriting process, a 3 lender of such a loan may consider the pay- 4 ments under this section as part of a com- 5 prehensive review to determine the ability to 6 repay over the entire period of maturity of the 7 loan. 8 ‘‘(5) ELIGIBILITY.—Eligibility for a covered 9 loan to receive such payments of principal, interest, 10 and any associated fees under this subsection shall 11 be based on the date on which the covered loan is 12 approved by the Administration. 13 ‘‘(6) AUTHORITY TO REVISE EXTENSIONS.— 14 ‘‘(A) IN GENERAL.—As part of preparing 15 the reports under subsection (i)(5) that are re- 16 quired to be submitted not later than January 17 15, 2021, and not later than June 15, 2021, 18 the Administrator conduct an evaluation of 19 whether amounts made available to make pay- 20 ments under this subsection are sufficient to 21 make the payments for the period described in 22 paragraph (1). 23 ‘‘(B) PLAN.—If the Administrator deter- 24 mines under subparagraph (A) that the 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 8376 IH amounts made available to make payments 1 under this subsection are insufficient, the Ad- 2 ministrator shall— 3 ‘‘(i) develop a plan to proportionally 4 reduce the number of months provided for 5 each period described in paragraph (1), 6 while ensuring all amounts made available 7 to make payments under this subsection 8 are fully expended; and 9 ‘‘(ii) before taking action under the 10 plan developed under clause (i), include in 11 the applicable report under subsection 12 (i)(5) the plan and the data that informs 13 the plan. 14 ‘‘(7) RULE OF CONSTRUCTION.—Nothing in 15 this subsection shall preclude a borrower from re- 16 ceiving full payments of principal, interest, and any 17 associated fees as authorized by subsection.’’; 18 (2) by redesignating subsection (f) as sub- 19 section (k); and 20 (3) by inserting after subsection (e) the fol- 21 lowing: 22 ‘‘(f) ELIGIBILITY FOR NEW LOANS.—For each indi- 23 vidual lending program under this section, the Adminis- 24 trator may establish a minimum loan maturity period, tak- 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 8376 IH ing into consideration the normal underwriting require- 1 ments for each such program, with the goal of preventing 2 abuse under the program. 3 ‘‘(g) LIMITATION ON ASSISTANCE.—A borrower may 4 not receive assistance under subsection (c) for more than 5 1 covered loan of the borrower described in paragraph 6 (1)(C) of that subsection. 7 ‘‘(h) TAXABILITY.—For purposes of the Internal 8 Revenue Code of 1986— 9 ‘‘(1) any payment made under subsection (c) 10 shall be treated as paid by the person on whose be- 11 half such payment is made; 12 ‘‘(2) no amount shall be included in the gross 13 income of the borrower by reason of a payment 14 made under subsection (c); and 15 ‘‘(3) no deduction shall be denied or reduced, 16 no tax attribute shall be reduced, and no basis in- 17 crease shall be denied, by reason of the exclusion 18 from gross income provided by paragraph (2). 19 ‘‘(i) REPORTING AND OUTREACH.— 20 ‘‘(1) UPDATED INFORMATION.— 21 ‘‘(A) IN GENERAL.—Not later than 7 days 22 after the date of enactment of the Small Busi- 23 ness Debt Relief Extension Act of 2020, the 24 Administrator shall make publicly available in- 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 8376 IH formation regarding the modifications to the as- 1 sistance provided under this section under the 2 amendments made by such Act. 3 ‘‘(B) GUIDANCE.—Not later than 14 days 4 after the date of enactment of the Small Busi- 5 ness Debt Relief Extension Act of 2020, the 6 Administrator shall issue guidance on imple- 7 menting the modifications to the assistance pro- 8 vided under this section under the amendments 9 made by such Act. 10 ‘‘(2) PUBLICATION OF LIST.—Not later than 14 11 days after the date of enactment of the Small Busi- 12 ness Debt Relief Extension Act of 2020, the Admin- 13 istrator shall transmit to each lender of a covered 14 loan a list of each borrower of a covered loan that 15 includes the North American Industry Classification 16 System code assigned to the borrower, based on the 17 records of the Administration, to assist the lenders 18 in identifying which borrowers qualify for an exten- 19 sion of payments under subsection (c). 20 ‘‘(3) EDUCATION AND OUTREACH.—The Ad- 21 ministrator shall provide education, outreach, and 22 communication to lenders, borrowers, district offices, 23 and resource partners of the Administration in order 24 to ensure full and proper compliance with this sec- 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 8376 IH tion, encourage broad participation with respect to 1 covered loans that have not yet been approved by the 2 Administrator, and help lenders transition borrowers 3 from subsidy payments under this section directly to 4 a deferral when suitable for the borrower. 5 ‘‘(4) NOTIFICATION.—Not later than 30 days 6 after the date of enactment of the Small Business 7 Debt Relief Extension Act of 2020, the Adminis- 8 trator shall mail a letter to each borrower of a cov- 9 ered loan that includes— 10 ‘‘(A) an overview of assistance provided 11 under this section; 12 ‘‘(B) the rights of the borrower to receive 13 that assistance; 14 ‘‘(C) how to seek recourse with the Admin- 15 istrator or the lender of the covered loan if the 16 borrower has not received that assistance; and 17 ‘‘(D) the rights of the borrower to request 18 a loan deferral from a lender, and guidance on 19 how to do successfully transition directly to a 20 loan deferral once subsidy payments under this 21 section are concluded. 22 ‘‘(5) MONTHLY REPORTING.—Not later than 23 the 15th of each month beginning after the date of 24 enactment of the Small Business Debt Relief Exten- 25 VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 8376 IH sion Act of 2020, the Administrator shall submit to 1 Congress a report on assistance provided under this 2 section, which shall include— 3 ‘‘(A) monthly and cumulative data on pay- 4 ments made under this section as of the date of 5 the report, including a breakdown by— 6 ‘‘(i) the number of participating bor- 7 rowers; 8 ‘‘(ii) the volume of payments made for 9 each type of covered loan; and 10 ‘‘(iii) the volume of payments made 11 for covered loans made before the date of 12 enactment of this Act and loans made 13 after such date of enactment; 14 ‘‘(B) the names of any lenders of covered 15 loans that have not submitted information on 16 the covered loans to the Administrator during 17 the preceding month; and 18 ‘‘(C) an update on the education and out- 19 reach activities of the Administration carried 20 out under paragraph (3).’’. 21 (b) EFFECTIVE DATE.—The amendments made by 22 this section shall apply as if included in the enactment 23 of section 1112 of the CARES Act (15 U.S.C. 9011). 24 Æ VerDate Sep 11 2014 02:53 Oct 18, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H8376.IH H8376 kjohnson on DSK79L0C42PROD with BILLS