II 

116TH CONGRESS 

2D SESSION S. 3814 

To establish a loan program for businesses affected by COVID–19 and to 

extend the loan forgiveness period for paycheck protection program loans 

made to the hardest hit businesses, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2020 

Mr. BENNET (for himself and Mr. YOUNG) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To establish a loan program for businesses affected by 

COVID–19 and to extend the loan forgiveness period 

for paycheck protection program loans made to the hardest hit businesses, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Reviving the Economy 

5 Sustainably Towards A Recovery in Twenty-twenty Act’’ 

6 or the ‘‘RESTART Act’’. 


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1 SEC. 2. EXTENSION OF COVERED PERIOD FOR LOAN FOR2 GIVENESS UNDER THE PAYCHECK PROTEC3 TION PROGRAM FOR THE HARDEST HIT BUSI4 NESSES. 

5 Section 1106 of the CARES Act (Public Law 116– 

6 136) is amended— 

7 (1) by amending subsection (a)(3) to read as 

8 follows: 

9 ‘‘(3) the term ‘covered period’ means— 

10 ‘‘(A) except as provided in subparagraph 

11 (B), the 8-week period beginning on the date of 

12 the origination of a covered loan; or 

13 ‘‘(B) the period beginning on the date of 

14 the origination of a covered loan and ending on 

15 the later of the date that is 16 weeks after the 

16 date of the origination of the covered loan and 

17 the date that is 8 weeks after the date of enact18 ment of the Reviving the Economy Sustainably 

19 Towards A Recovery in Twenty-twenty Act, if 

20 the eligible recipient of the covered loan— 

21 ‘‘(i) has less than 500 full-time equiv22 alent employees; and 

23 ‘‘(ii) makes a good faith certification 

24 to the Administrator that, during the 8- 

25 week period described in subparagraph 

26 (A), the eligible recipient suffered a decline 


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1 in gross receipts of not less than 25 per2 cent relative to a comparable 8-week pe3 riod— 

4 ‘‘(I) immediately preceding 

5 March 2, 2020; or 

6 ‘‘(II) during 2019;’’; and 

7 (2) in subsection (d)(2), by adding at the end 

8 the following: 

9 ‘‘(C) EXCEPTION.—This paragraph shall 

10 not apply with respect to an eligible recipient 

11 described in subsection (a)(3)(B).’’. 

12 SEC. 3. RESTART LOAN PROGRAM. 

13 (a) DEFINITIONS.—In this section: 

14 (1) ADMINISTRATION; ADMINISTRATOR.—The 

15 terms ‘‘Administration’’ and ‘‘Administrator’’ mean 

16 the Small Business Administration and the Adminis17 trator thereof, respectively. 

18 (2) COMMUNITY DEVELOPMENT FINANCIAL IN19 STITUTION.—The term ‘‘community development fi20 nancial institution’’ has the meaning given the term 

21 in section 103 of the Riegle Community Develop22 ment and Regulatory Improvement Act of 1994 (12 

23 U.S.C. 4702). 


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1 (3) COVERED LOAN.—The term ‘‘covered loan’’ 

2 means a loan made under this section during the 

3 covered period. 

4 (4) COVERED PERIOD.—The term ‘‘covered pe5 riod’’ means— 

6 (A) except as provided in subparagraph 

7 (B), and as determined by the eligible recipient 

8 of a covered loan, the 6-month period beginning 

9 on— 

10 (i) the date of the origination of the 

11 covered loan; 

12 (ii) the first day of the next scheduled 

13 pay period following the date of the origi14 nation of the covered loan; 

15 (iii) the first day of the first full 

16 month following the date of the origination 

17 of the covered loan; or 

18 (iv) April 15, 2020; or 

19 (B) with respect to an eligible recipient of 

20 a covered loan that suffered a decline in gross 

21 receipts of more than 80 percent in 2020 as 

22 compared to 2019 or in the 6-month period be23 ginning on the date of the origination of the 

24 covered loan as compared to a comparable pe25 riod in 2019, and as determined by the eligible 


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1 recipient of a covered loan, the 12-month period 

2 beginning on— 

3 (i) the date of the origination of the 

4 covered loan; 

5 (ii) the first day of the next scheduled 

6 pay period following the date of the origi7 nation of the covered loan; 

8 (iii) the first day of the first full 

9 month following the date of the origination 

10 of the covered loan; or 

11 (iv) April 15, 2020. 

12 (5) ELIGIBLE RECIPIENT.—The term ‘‘eligible 

13 recipient’’— 

14 (A) means an individual or entity that— 

15 (i) is eligible to receive a loan made 

16 under section 7(a)(36) of the Small Busi17 ness Act (15 U.S.C. 636(a)(36)); or 

18 (ii) has not more than 5,000 full-time 

19 employees; 

20 (B) includes— 

21 (i) a nonprofit organization that— 

22 (I) has not more than 5,000 full23 time employees; and 


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1 (II) is not more than 50 percent 

2 owned or controlled by a State, local, 

3 or Tribal government; 

4 (ii) a business concern that— 

5 (I) deals in rare coins and 

6 stamps; and 

7 (II) has not more than 5,000 

8 full-time employees; and 

9 (iii) a business concern that leases or 

10 finances equipment to other businesses, if 

11 the business concern— 

12 (I) has not more than 5,000 full13 time employees; and 

14 (II) is not— 

15 (aa) a mortgage lender; or 

16 (bb) a lender participating 

17 in the loan program under sec18 tion 7(a)(36) of the Small Busi19 ness Act (15 U.S.C. 636(a)(36)). 

20 (6) MINORITY DEPOSITORY INSTITUTION.—The 

21 term ‘‘minority depository institution’’ has the 

22 meaning given the term in section 308 of the Finan23 cial Institutions Reform, Recovery, and Enforcement 

24 Act of 1989 (12 U.S.C. 1463 note). 


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1 (7) NONPROFIT ORGANIZATION.—The term 

2 ‘‘nonprofit organization’’ means an entity described 

3 in paragraph (3), (5), (6), (7) (related to housing), 

4 (12), (13), or (19) of section 501(c) of the Internal 

5 Revenue Code and that is exempt from taxation 

6 under section 501(a) of such Code. 

7 (8) PAYROLL COSTS.—The term ‘‘payroll costs’’ 

8 has the meaning given the term in section 

9 7(a)(36)(A) of the Small Business Act (15 U.S.C. 

10 636(a)(36)(A)), except that such costs shall not in11 clude— 

12 (A) qualified wages taken into account in 

13 determining the credit allowed under section 

14 2301(g) of the CARES Act (Public Law 116– 

15 136); or 

16 (B) any payments made to an independent 

17 contractor. 

18 (9) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of the Treasury. 

20 (10) UNDERSERVED BORROWER.—The term 

21 ‘‘underserved borrower’’ means any business concern 

22 that has traditionally had difficulty accessing fi23 nance, including— 

24 (A) business concerns that— 


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1 (i) have fewer than 25 employees and 

2 do not have a strong relationship with a 

3 bank; 

4 (ii) are owned or controlled by minori5 ties; 

6 (iii) are owned or controlled by 

7 women; 

8 (iv) are owned or controlled by vet9 erans, including service-disabled veterans 

10 (as those terms are defined in section 3(q) 

11 of the Small Business Act (15 U.S.C. 

12 632(q))); or 

13 (v) are located in low-income and 

14 rural communities, including those in areas 

15 eligible for assistance under section 45D of 

16 the Internal Revenue Code of 1986; and 

17 (B) Tribal business concerns. 

18 (b) ESTABLISHMENT.—The Administrator shall es19 tablish a program to guarantee loans made to eligible re20 cipients affected by COVID–19. 

21 (c) PARTICIPATION.—In an agreement to participate 

22 in a covered loan on a deferred basis, the participation 

23 by the Administration shall be 100 percent. 

24 (d) TERMS AND REQUIREMENTS.— 


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1 (1) DURATION.—Except as provided in para2 graph (4), the duration of a covered loan shall be for 

3 not more than 7 years. 

4 (2) AMOUNT.— 

5 (A) IN GENERAL.—The amount of a cov6 ered loan made to an eligible recipient shall be 

7 not more than the lesser of— 

8 (i) 45 percent of the 2019 gross re9 ceipts of the eligible recipient; and 

10 (ii) $12,000,000. 

11 (B) DUPLICATION OF ASSISTANCE.— 

12 (i) IN GENERAL.—An eligible recipient 

13 of a covered loan shall not use proceeds of 

14 the covered loan for the same expenses 

15 that are covered using funds received 

16 under subsection (a)(36) or (b)(2) of sec17 tion 7 of the Small Business Act (15 

18 U.S.C. 636) or section 1110 of the 

19 CARES Act (Public Law 116–136). 

20 (ii) REDUCTION BASED ON OTHER

21 SBA LOANS.—The amount of a covered 

22 loan for which an eligible recipient may re23 ceive under this section shall be reduced by 

24 the amount of any assistance received by 

25 the eligible recipient under subsection 


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1 (a)(36) or (b)(2) of section 7 of the Small 

2 Business Act (15 U.S.C. 636) or section 

3 1110 of the CARES Act (Public Law 116– 

4 136) that is intended to be used for the al5 lowable expenses described in subsection 

6 (g)(2) during the covered period. 

7 (3) INTEREST RATE.— 

8 (A) IN GENERAL.—Except as provided in 

9 paragraph (4), the interest rate on a covered 

10 loan shall be, as determined by the Adminis11 trator and the Secretary— 

12 (i) for the first 2 years of the covered 

13 loan, not less than 2 percent and not more 

14 than 4 percent; and 

15 (ii) for the third through seventh 

16 years of the covered loan, the Applicable 

17 Federal Rate plus 250 to 600 basis points 

18 based on the decline in gross receipts of 

19 the eligible recipient. 

20 (B) NO PAYMENTS FOR 12 MONTHS.—No 

21 payments shall be due on interest on a covered 

22 loan for the first 12 months of the covered loan. 

23 (4) SPECIAL PROVISIONS FOR NONPROFIT OR24 GANIZATIONS.—At the time of application for a covVerDate Sep 11 2014 04:35 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3814.IS S3814

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1 ered loan, a nonprofit organization described in sub2 section (a)(5)(B) shall make an election— 

3 (A) for a covered loan with a maturity of 

4 not more than 10 years and an interest rate of 

5 not more than 2 percent for the first 4 years 

6 of a covered loan, with no eligibility for forgive7 ness of the covered loan under subsection (j); or 

8 (B) for a covered loan with the maturity 

9 and interest rate terms described in paragraphs 

10 (1) and (3), respectively, with the ability to ob11 tain forgiveness of the covered loan if the non12 profit organization qualifies under subsection 

13 (j)(2). 

14 (5) PAYMENT DEFERRAL.— 

15 (A) IN GENERAL.—No payment of prin16 cipal shall be due on a covered loan for the first 

17 2 years of the covered loan. 

18 (B) ADDITIONAL DEFERRAL.—After the 2- 

19 year deferral period described in subparagraph 

20 (A), the Administrator may grant not more 

21 than an additional 2 years of principal deferral 

22 to an eligible recipient of a covered loan if the 

23 eligible recipient is certified by the Adminis24 trator and the Secretary as economically dis25 tressed based on publicly available criteria esVerDate Sep 11 2014 04:35 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3814.IS S3814

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1 tablished by the Administrator and the Sec2 retary. 

3 (6) ORIGINATION FEES.— 

4 (A) IN GENERAL.—The origination fee for 

5 a covered loan shall be as follows: 

6 (i) 3.75 percent for a covered loan of 

7 not more than $100,000. 

8 (ii) 3.5 percent for a covered loan of 

9 more than $100,000 and not more than 

10 $250,000. 

11 (iii) 3.25 percent for a covered loan of 

12 more than $250,000 and not more than 

13 $500,000. 

14 (iv) 3 percent for a covered loan of 

15 more than $500,000 and not more than 

16 $750,000. 

17 (v) 2.75 percent for a covered loan of 

18 more than $750,000 and not more than 

19 $1,000,000. 

20 (vi) 2.5 percent for a covered loan of 

21 more than $1,000,000 and not more than 

22 $1,500,000. 

23 (vii) 2.25 percent for a covered loan of 

24 more than $1,500,000 and not more than 

25 $1,750,000. 


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1 (viii) 2 percent for a covered loan of 

2 more than $1,750,000 and not more than 

3 $2,000,000. 

4 (ix) 1.75 percent for a covered loan of 

5 more than $2,000,000 and not more than 

6 $2,500,000. 

7 (x) 1.5 percent for a covered loan of 

8 more than $2,500,000 and not more than 

9 $3,000,000. 

10 (xi) 1.25 percent for a covered loan of 

11 more than $3,000,000 and not more than 

12 $3,500,000. 

13 (xii) 1 percent for a covered loan of 

14 more than $3,500,000 and not more than 

15 $4,000,000. 

16 (xiii) 0.75 percent for a covered loan 

17 of more than $4,000,000 and not more 

18 than $12,000,000. 

19 (B) PAYMENT BY FEDERAL GOVERN20 MENT.—The Administrator shall— 

21 (i) for any covered loan that is made 

22 to an eligible recipient with not more than 

23 500 full-time employees, pay the applicable 

24 origination fee described in subparagraph 

25 (A); and 


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1 (ii) for any covered loan of not more 

2 than $10,000,000 that is made to an eligi3 ble recipient with more than 500 full-time 

4 employees, pay 50 percent of the amount 

5 of the applicable origination fee described 

6 in subparagraph (A). 

7 (C) PAYMENT BY ELIGIBLE RECIPIENT.— 

8 After any applicable payments by the Adminis9 trator under subparagraph (B), the eligible re10 cipient of a covered loan— 

11 (i) shall be responsible for paying the 

12 remainder of any applicable origination fee 

13 under subparagraph (A); and 

14 (ii) may finance the amount of the ap15 plicable origination fee as part of the cov16 ered loan amount, with such origination 

17 fee amount not counting toward the limita18 tion on covered loan amounts described in 

19 paragraph (2)(A). 

20 (7) STREAMLINED PROCEDURES.—The Admin21 istrator and the Secretary shall establish streamlined 

22 application and loan approval procedures for eligible 

23 recipients with not more than 500 full-time employ24 ees, including by allowing an eligible recipient to use 

25 an existing application submitted to a lender for the 


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1 loan program under section 7(a)(36) of the Small 

2 Business Act (15 U.S.C. 636(a)(36)) and update the 

3 application as necessary for purposes of applying for 

4 a covered loan. 

5 (8) APPLICATION.— 

6 (A) AVAILABILITY.—The Administrator 

7 shall make available the application for a cov8 ered loan in the 10 most commonly spoken lan9 guages, other than English, in the United 

10 States, which shall include Spanish, Mandarin, 

11 Cantonese, Japanese, and Korean. 

12 (B) GUIDANCE.—Not later than 15 days 

13 after the date of enactment of this Act, the Ad14 ministrator and the Secretary shall issue guid15 ance to allow lenders to receive applications for 

16 covered loans. 

17 (C) DEADLINE FOR RESPONSE.—A lender 

18 that receives an application for a covered loan 

19 shall— 

20 (i) not later than 2 days after submis21 sion of the application to the Adminis22 trator, notify the applicant that the lender 

23 submitted the application and provide the 

24 confirmation number; and 


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1 (ii) not later than 15 days after ap2 proving the application, disburse the funds 

3 to the applicant. 

4 (D) FORMAT.—The application for a cov5 ered loan shall be similar to the application 

6 used for a loan made under section 7(a)(36) of 

7 the Small Business Act (15 U.S.C. 636(a)(36)), 

8 with additional details requested by the Admin9 istrator as necessary. 

10 (E) APPLICATION WINDOWS.—The Admin11 istrator shall make efforts to ensure that under12 served borrowers that are eligible recipients re13 ceive covered loans, including by establishing 

14 exclusive application windows for those eligible 

15 recipients. 

16 (9) LIMITATION ON NUMBER OF LOANS.—An 

17 eligible recipient may receive not more than 2 cov18 ered loans, the requested aggregate amount of which 

19 shall not exceed the limitation on covered loan 

20 amounts described in paragraph (2)(A). 

21 (10) WAIVER OF PREPAYMENT PENALTY.—Not22 withstanding any other provision of law, there shall 

23 be no prepayment penalty for any payment made on 

24 a covered loan. 


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1 (11) UNITED STATES OPERATIONS.—A covered 

2 loan may only be used for expenses related to the 

3 operations of an eligible recipient carried out in the 

4 United States, including any territory or possession 

5 of the United States and operations carried out off 

6 of the United States coastline. 

7 (e) LENDERS.— 

8 (1) EXISTING PPP LENDERS.—A lender that is 

9 approved to make loans under section 7(a)(36) of 

10 the Small Business Act (15 U.S.C. 636(a)(36)) and 

11 is approved by the Administrator and the Secretary 

12 may make and approve covered loans. 

13 (2) ADDITIONAL LENDERS.—The authority to 

14 make covered loans shall be extended to additional 

15 lenders determined by the Administrator and the 

16 Secretary to have the necessary qualifications to 

17 process, close, disburse, and service loans made with 

18 the guarantee of the Administration. 

19 (3) LENDERS SERVING UNDERSERVED BOR20 ROWERS.—In approving lenders to make covered 

21 loans, the Administrator and the Secretary shall give 

22 priority to lenders that are community development 

23 financial institutions with lower lending volumes, mi24 nority depository institutions, mission-based non25 profit lenders, nonbank lenders, and other financial 


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1 institutions that disproportionately serve under2 served borrowers. 

3 (4) RESALE OF LOANS.—A lender of a covered 

4 loan may sell the covered loan to a third party. 

5 (5) SALE OF PARTICIPATION IN COVERED

6 LOANS.—A lender of a covered loan may sell a par7 ticipation in the covered loan to a non-authorized 

8 lender in an amount that is not more than 85 per9 cent of the covered loan. 

10 (6) AGENT DISCLOSURE.—In order to be eligi11 ble to obtain a fee, any agent shall be disclosed to 

12 the lender and the Administrator at the time of ap13 plication for a covered loan. 

14 (7) CAPITAL AND LIQUIDITY REQUIREMENTS.— 

15 Until December 31, 2021, the amount of a covered 

16 loan made by a lender shall be disregarded by Fed17 eral regulators for the purpose of calculating regu18 latory capital and liquidity requirements. 

19 (f) BORROWER REQUIREMENTS.— 

20 (1) CERTIFICATION.—An eligible recipient ap21 plying for a covered loan shall submit a good faith 

22 certification that the eligible recipient suffered a de23 cline in gross receipts of not less than 25 percent— 

24 (A) during an 8-week period during the pe25 riod beginning on February 15, 2020, and endVerDate Sep 11 2014 04:35 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S3814.IS S3814

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1 ing on July 31, 2020, relative to a comparable 

2 8-week period during— 

3 (i) the period beginning on January 1, 

4 2020, and ending on March 31, 2020; or 

5 (ii) 2019; or 

6 (B) during a calendar or fiscal quarter 

7 during the period beginning on February 15, 

8 2020, and ending on July 31, 2020, relative to 

9 the same calendar or fiscal quarter in 2019. 

10 (2) ACCOUNTING METHOD.—An eligible recipi11 ent may calculate the decline in gross receipts de12 scribed in paragraph (1) using the cash or accrual 

13 accounting method. 

14 (3) ADJUSTMENTS.—The Administrator, in 

15 consultation with the Secretary, shall provide guid16 ance on appropriate adjustments to the terms under 

17 this subsection for eligible recipients seeking a cov18 ered loan that are fiscal year taxpayers or seasonal 

19 businesses. 

20 (4) RESTRICTIONS.— 

21 (A) IN GENERAL.—The Administrator may 

22 enter into agreements to guarantee covered 

23 loans made to eligible recipients only if the Ad24 ministrator determines that the agreement pro25 vides that, until the date that is 12 months 


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1 after the date on which the covered loan is no 

2 longer outstanding— 

3 (i) the eligible recipient or an affiliate 

4 of the eligible recipient shall not purchase 

5 an equity security that is listed on a na6 tional securities exchange of the eligible re7 cipient or any parent company of the eligi8 ble recipient, except to the extent required 

9 under a contractual obligation in effect as 

10 of the date of enactment of this Act; 

11 (ii) the eligible recipient shall not pay 

12 dividends or make other capital distribu13 tions with respect to the common stock of 

14 the eligible recipient; and 

15 (iii) the restrictions on certain em16 ployee compensation described in section 

17 4004(a) of the CARES Act (Public Law 

18 116–136) apply to officers and employees 

19 of the eligible recipient. 

20 (B) EXCEPTIONS.— 

21 (i) DIVIDENDS.—Subparagraph 

22 (A)(ii) shall not apply to any eligible re23 cipient that is a real estate investment 

24 trust (as defined under section 856 of the 

25 Internal Revenue Code of 1986) for the 


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1 taxable year in which the distribution is 

2 made to the extent that such entity distrib3 utes no more than 100 percent of real es4 tate investment trust taxable income (as 

5 defined in section 857(b)(2) of such Code, 

6 determined without regard to the deduc7 tion for dividends paid (as defined in sec8 tion 561 of such Code)) during such tax9 able year. 

10 (ii) DISTRIBUTIONS.—Notwithstand11 ing subparagraph (A), during the period 

12 described in that subparagraph an eligible 

13 recipient that is an S-corporation or a lim14 ited liability company may provide a dis15 tribution to pay income taxes. 

16 (5) EMERGENCY RELIEF FUNDS.— 

17 (A) IN GENERAL.—Except as provided in 

18 subparagraph (B), an eligible recipient applying 

19 for a covered loan may not receive or have re20 ceived any assistance under 4003 of the 

21 CARES Act (Public Law 116–136) for any 

22 purpose. 

23 (B) RETURN OF FUNDS.—An eligible re24 cipient that received assistance under section 

25 4003 of the CARES Act (Public Law 116–136) 


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1 may apply for a covered loan if the eligible re2 cipient returns the funds received under such 

3 section 4003. 

4 (6) BUSINESS CONCERNS WITH MORE THAN 1

5 PHYSICAL LOCATION.—A business concern that em6 ploys not more than 500 full-time employees per 

7 physical location of the business concern and that is 

8 assigned a North American Industry Classification 

9 System code beginning with 72 at the time of dis10 bursal shall be eligible to receive a covered loan if 

11 the number of full-time employees, in the aggregate, 

12 does not exceed 5,000. 

13 (7) WAIVER OF AFFILIATION RULES.—The pro14 visions applicable to affiliations under section 

15 121.103 of title 13, Code of Federal Regulations, or 

16 any successor regulation, are waived with respect to 

17 eligibility for a covered loan for— 

18 (A) any eligible recipient with not more 

19 than 500 employees that is assigned a North 

20 American Industry Classification System code 

21 beginning with 72; 

22 (B) any eligible recipient operating as a 

23 franchise; 

24 (C) any eligible recipient that receives fi25 nancial assistance from a company licensed 


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1 under section 301 of the Small Business Invest2 ment Act of 1958 (15 U.S.C. 681); and 

3 (D) any eligible recipient with not more 

4 than 500 full-time employees that is not more 

5 than 50 percent owned or controlled by another 

6 entity. 

7 (8) CALCULATION OF FULL-TIME EMPLOY8 EES.—For purposes of determining the number of 

9 full-time employees of an eligible recipient as of Feb10 ruary 15, 2020— 

11 (A) any employee working not fewer than 

12 30 hours per week shall be considered a full13 time employee; and 

14 (B) any employee working not fewer than 

15 10 hours and fewer than 30 hours per week 

16 shall be counted as one-half of a full-time em17 ployee. 

18 (9) CREDIT ELSEWHERE.—During the covered 

19 period, an eligible recipient is not required to show 

20 that the eligible recipient is unable to obtain credit 

21 elsewhere, as defined in section 3(h) of the Small 

22 Business Act (15 U.S.C. 632(h)). 

23 (10) SUBORDINATION.—Any covered loan made 

24 to an eligible recipient shall be subordinate to any 


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1 liability incurred by the eligible recipient before Feb2 ruary 15, 2020. 

3 (11) RESTRICTIONS FOR PRIOR BANK4 RUPTCY.—A lender may deny an application for a 

5 covered loan submitted by an eligible recipient if, 

6 during the 7-year period preceding the date of the 

7 application, the eligible recipient or a person that 

8 owns or controls the eligible recipient filed a petition 

9 for bankruptcy under chapter 7 or 13 of title 11, 

10 United States Code. 

11 (g) USE OF FUNDS.— 

12 (1) IN GENERAL.—An eligible recipient of a 

13 covered loan may use the proceeds for allowable ex14 penses described in paragraph (2). 

15 (2) ALLOWABLE EXPENSES.—The expenses de16 scribed in this paragraph are— 

17 (A) payroll costs for employees and fur18 loughed employees, including— 

19 (i) costs for continuation coverage 

20 provided pursuant to part 6 of subtitle B 

21 of title I of the Employee Retirement In22 come Security Act of 1974 (other than 

23 under section 609), title XXII of the Pub24 lic Health Service Act, section 4980B of 

25 the Internal Revenue Code of 1986 (other 


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1 than subsection (f)(1) of such section inso2 far as it relates to pediatric vaccines), or 

3 section 8905a of title 5, United States 

4 Code, or under a State program that pro5 vides comparable continuation coverage, 

6 other than coverage under a health flexible 

7 spending arrangement under a cafeteria 

8 plan within the meaning of section 125 of 

9 the Internal Revenue Code of 1986; or 

10 (ii) any other non-cash benefit; 

11 (B) rent; 

12 (C) utilities; 

13 (D) mortgage interest payments on exist14 ing mortgages as of February 15, 2020; 

15 (E) scheduled interest payments on other 

16 scheduled debt as of February 15, 2020; 

17 (F) costs related to personal protective 

18 equipment; 

19 (G) payments of principal on outstanding 

20 loans; 

21 (H) payments made to independent con22 tractors, as reported on Form–1099 MISC; 

23 (I) other ordinary and necessary business 

24 expenses, including— 


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1 (i) settling existing debts owed to ven2 dors and replenishing inventory; 

3 (ii) franchise fees; 

4 (iii) hotel management fees; 

5 (iv) maintenance expenses; 

6 (v) administrative costs; 

7 (vi) taxes; 

8 (vii) operating leases; and 

9 (viii) any other capital expenditure or 

10 expense required under any State, local, or 

11 Federal law or guideline related to social 

12 distancing. 

13 (3) PROHIBITED EXPENSES.—An eligible recipi14 ent may not use the proceeds of a covered loan— 

15 (A) to purchase real estate; 

16 (B) for payments of interest or principal 

17 on loans originated after February 15, 2020; 

18 (C) to invest or re-lend funds; 

19 (D) for contributions or expenditures to, or 

20 on behalf of, any political party, party com21 mittee, or candidate for elective office; or 

22 (E) for any other use as may be prohibited 

23 by the Administrator. 

24 (h) LOAN DISBURSAL.— 


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1 (1) INITIAL DISBURSAL.—During the initial 14- 

2 day period in which lenders make and approve cov3 ered loans, the lenders shall be limited to making 

4 covered loans to eligible recipients— 

5 (A) with fewer than 50 full-time employees 

6 for the first 7-day period; and 

7 (B) with fewer than 500 full-time employ8 ees for the second 7-day period. 

9 (2) REPORT.—Not later than the later of the 

10 date that is 180 days after the date on which 

11 amounts made available to carry out this Act are ex12 pended or July 31, 2021, the Inspector General of 

13 the Administration shall submit to Congress a report 

14 evaluating whether small business concerns (as de15 fined in section 3 of the Small Business Act (15 

16 U.S.C. 632)), minority-owned eligible recipients, and 

17 other underserved borrowers are treated fairly in the 

18 process of making and approving covered loans. 

19 (i) MATURITY FOR LOANS WITH REMAINING BAL20 ANCE AFTER APPLICATION FOR FORGIVENESS.—With re21 spect to a covered loan that has a remaining balance after 

22 a reduction based on the loan forgiveness amount under 

23 subsection (j)— 


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•S 3814 IS

1 (1) the remaining balance shall continue to be 

2 guaranteed by the Administration under this section; 

3 and 

4 (2) the covered loan shall have a maximum ma5 turity of 78 months from the date on which the bor6 rower applies for loan forgiveness under that sub7 section. 

8 (j) LOAN FORGIVENESS.— 

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this subsection, an eligible recipient of a 

11 covered loan that is not a nonprofit organization 

12 shall be eligible for forgiveness for expenses de13 scribed in subparagraphs (A) through (F) of sub14 section (g)(2) incurred during the covered period 

15 using proceeds of the covered loan in an amount 

16 equal to the product obtained by multiplying— 

17 (A) the product obtained by multiplying— 

18 (i) the percentage decline in revenues 

19 of the eligible recipient— 

20 (I) if the covered period does not 

21 extend past March 31, 2021, between 

22 the total revenue received by the busi23 ness during calendar year 2020 and 

24 the total revenue received by the busi25 ness during calendar year 2019; or 


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1 (II) between the total revenue 

2 during the 6-month period following 

3 the date of the origination of the cov4 ered loan and the total revenue during 

5 a comparable 6-month period during 

6 the 12-month period preceding the 

7 date of the origination of the covered 

8 loan; and 

9 (ii) .90; and 

10 (B)(i) for an eligible recipient with not 

11 more than 500 employees, the sum of the ex12 penses of the eligible recipient described in sub13 paragraphs (A) through (F) of subsection 

14 (g)(2) paid during the covered period; or 

15 (ii) for an eligible recipient with more than 

16 500 and not more than 5,000 employees, the 

17 sum of— 

18 (I) the benefits described in clauses 

19 (i) and (ii) of subsection (g)(2)(A) of this 

20 section and the payments described in 

21 subitems (CC) through (GG) of section 

22 7(a)(36)(A)(viii)(I)(aa) of the Small Busi23 ness Act (15 U.S.C. 

24 636(a)(36)(A)(viii)(I)(aa)) that were paid 

25 during the covered period; and 


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1 (II) the expenses described in sub2 paragraphs (B) through (F) of subsection 

3 (g)(2) that were paid during the covered 

4 period. 

5 (2) LOAN FORGIVENESS FOR SMALL NON6 PROFITS.—A nonprofit organization described in 

7 subsection (a)(5)(B) with not more than 500 full8 time employees that is an eligible recipient of a cov9 ered loan shall be eligible for forgiveness for ex10 penses described in subparagraphs (A) through (F) 

11 of subsection (g)(2) using, at the election of the non12 profit organization— 

13 (A) the amount obtained using the formula 

14 described in paragraph (1), except that gross 

15 receipts shall not include donations, grants, 

16 dues, and investment income; or 

17 (B) the amount obtained using the formula 

18 described in paragraph (1), except that the 

19 number in subparagraph (A)(ii) of such para20 graph shall be— 

21 (i) .7 for a nonprofit organization 

22 with not more than 50 full-time employees; 

23 and 


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1 (ii) .2 for a nonprofit organization 

2 with not fewer than 50 and not more than 

3 500 full-time employees. 

4 (3) PROHIBITION ON FORGIVENESS.—Any cov5 ered loan made to an eligible recipient that is pub6 licly traded, is a nonprofit organization described in 

7 section 501(c)(7) of the Internal Revenue Code, or 

8 is an eligible recipient described in subsection 

9 (f)(7)(D) shall not be eligible for loan forgiveness 

10 under this subsection. 

11 (4) LIMITATION ON AMOUNT OF FORGIVE12 NESS.— 

13 (A) IN GENERAL.—The amount of all cov14 ered loans made to an eligible recipient that 

15 may be forgiven under this subsection shall not 

16 exceed the total losses incurred by the eligible 

17 recipient in the taxable year 2020. 

18 (B) APPLICATION OF RELATED PARTY

19 PAYMENTS.—The Secretary shall issue regula20 tions that provide that, for purposes of the loss 

21 calculation under subparagraph (A)— 

22 (i) with respect to an eligible recipient 

23 of a covered loan with not fewer than 500 

24 full-time employees, related party transVerDate Sep 11 2014 04:35 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S3814.IS S3814

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1 actions are prohibited from counting to2 ward the loss calculation; and 

3 (ii) with respect to an eligible recipi4 ent of a covered loan with not more than 

5 500 full-time employees, any related party 

6 payments made during the covered period 

7 cannot be greater than related party pay8 ments made during taxable year 2019. 

9 (C) CAPITAL LOSSES.—For purposes of 

10 the loss calculation under subparagraph (A), 

11 capital losses from the sale of assets or deduc12 tions for guaranteed payments to partners in 

13 partnerships or owners in S corporations shall 

14 not count toward the loss calculation. 

15 (D) LIMITATION ON PPE EXPENSES.—An 

16 eligible recipient may only receive forgiveness 

17 for personal protective equipment expenses de18 scribed in subsection (g)(2)(F) of not more 

19 than $5,000. 

20 (5) NO LIMITS BASED ON PERCENTAGE OF

21 FUNDS USED FOR CERTAIN EXPENSES.—The Ad22 ministrator or the Secretary shall not place limita23 tions on forgiveness under this subsection based on 

24 the percentage of covered loan proceeds that are 


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•S 3814 IS

1 used for specific expenses described in subsection 

2 (g)(2). 

3 (6) HOLD HARMLESS.—If a lender approved to 

4 make covered loans has received the required docu5 mentation under this section from an applicant at6 testing that the applicant has accurately verified the 

7 eligibility, gross receipts, and expenses of the appli8 cant during the covered period— 

9 (A) an enforcement action may not be 

10 taken against the lender under section 47(e) of 

11 the Small Business Act (15 U.S.C. 657t(e)) re12 lating to loan forgiveness for those expenses; 

13 and 

14 (B) the lender shall not be subject to any 

15 penalties by the Administrator relating to loan 

16 forgiveness for the expenses. 

17 (7) TREATMENT OF FORGIVEN AMOUNTS.— 

18 (A) IN GENERAL.—Section 108(a)(1) of 

19 the Internal Revenue Code of 1986 is amended 

20 by striking ‘‘or’’ at the end of subparagraph 

21 (D), by striking the period at the end of sub22 paragraph (E)(ii) and inserting ‘‘, or’’, and by 

23 adding at the end the following new subpara24 graph: 


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•S 3814 IS

1 ‘‘(F) the indebtedness discharged is a cov2 ered loan (as defined in section 4(a) of the RE3 START Act) discharged under section 4(j) of 

4 such Act.’’. 

5 (B) REDUCTION OF TAX ATTRIBUTES.— 

6 Section 108(b)(1) of such Code is amended by 

7 striking ‘‘or (C)’’ and inserting ‘‘, (C), or (F) 

8 (after application of subsection (j)(i))’’. 

9 (C) LIMITATION.—Section 108 of such 

10 Code is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(j) SPECIAL RULES FOR DISCHARGES OF COVERED

13 LOANS.— 

14 ‘‘(1) INCLUSION OF EXCESS AMOUNTS.— 

15 ‘‘(A) IN GENERAL.—In the case of any 

16 taxpayer to which subsection (a)(1)(F) applies, 

17 the gross income of such taxpayer for any tax18 able year in the applicable period shall be in19 creased by the product of— 

20 ‘‘(i) 20 percent, and 

21 ‘‘(ii) so much of the amount excluded 

22 under subsection (a)(1)(F) as exceeds 

23 $250,000. 

24 ‘‘(B) APPLICABLE PERIOD.—For purposes 

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•S 3814 IS

1 riod’ means the 5 taxable-year period beginning 

2 with the taxable year in which the discharge oc3 curs. 

4 ‘‘(2) APPLICATION TO TAX ATTRIBUTES.—For 

5 purposes of applying subsection (b), the amount 

6 taken into account as excluded from income under 

7 subsection (a)(1)(F) shall not exceed $250,000.’’. 

8 (D) EFFECTIVE DATE.—The amendments 

9 made by this paragraph shall apply to dis10 charges of indebtedness after the date of the 

11 enactment of this Act. 

12 (8) COORDINATION WITH EMPLOYEE RETEN13 TION TAX CREDIT.—Section 2301(g) of the CARES 

14 Act (Public Law 116–136) is amended to read as 

15 follows: 

16 ‘‘(g) ELECTION TO NOT TAKE CERTAIN WAGES

17 INTO ACCOUNT.— 

18 ‘‘(1) IN GENERAL.—This section shall not apply 

19 to qualified wages paid by an eligible employer with 

20 respect to which such employer makes an election 

21 (at such time and in such manner as the Secretary 

22 may prescribe) to have this section not apply to such 

23 wages. 

24 ‘‘(2) COORDINATION WITH RESTART LOANS.— 

25 The Secretary, in consultation with the AdminisVerDate Sep 11 2014 04:35 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S3814.IS S3814

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1 trator of the Small Business Administration, shall 

2 issue guidance providing that payroll costs paid or 

3 incurred during the covered period shall not fail to 

4 be treated as qualified wages under this section by 

5 reason of an election under paragraph (1) to the ex6 tent that a covered loan of the eligible employer is 

7 not forgiven by reason of a decision under section 

8 3(j) of the RESTART Act. Terms used in the pre9 ceding sentence which are also used in section 3 of 

10 such Act shall have the same meaning as when used 

11 in such section.’’. 

12 (k) SPECIAL RULES FOR SEASONAL AND NEW BUSI13 NESSES.— 

14 (1) IN GENERAL.—The Administrator and the 

15 Secretary shall develop special rules and procedures 

16 for eligibility, calculation of full-time employees, loan 

17 terms, and loan forgiveness for— 

18 (A) covered loans made to eligible recipi19 ents that are seasonal that do not have suffi20 cient revenue to fully benefit from assistance 

21 provided under this section; and 

22 (B) covered loans made to eligible recipi23 ents formed after January 1, 2019, that do not 

24 have sufficient revenue to fully benefit from as25 sistance provided under this section. 


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1 (2) LOAN AMOUNT.—The Administrator and 

2 the Secretary shall develop terms with respect to the 

3 loan amount of a covered loan for the eligible recipi4 ents described in paragraph (1) to provide consistent 

5 support to those eligible recipients relative to an ex6 isting or a non-seasonal eligible recipient. 

7 (3) PROHIBITION.—An eligible recipient formed 

8 after January 1, 2019, shall not be eligible for loan 

9 forgiveness under this section. 

10 (l) TRANSPARENCY.— 

11 (1) REPORTING.—The Administrator shall col12 lect and publish information in searchable and 

13 downloadable format on eligible recipients of covered 

14 loans, including— 

15 (A) the name of each eligible recipient with 

16 not fewer than 50 full-time employees that re17 ceived a covered loan, which shall be published 

18 on a monthly basis; 

19 (B) aggregate demographic information of 

20 applicants that applied and applicants that were 

21 approved for a covered loan, which shall be pub22 lished on a weekly basis; 

23 (C) the number of loan applications re24 ceived and total loan amount requested, the 

25 number of loan applications awaiting disposition 


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•S 3814 IS

1 and the total loan amount awaiting disposition, 

2 the number of loan applications rejected and 

3 the total loan amount rejected, and the number 

4 of loan applications approved and the total loan 

5 amount approved by each lender, which shall be 

6 published on a weekly basis; 

7 (D) aggregate total loan volume approved 

8 broken down by industry and by State, which 

9 shall be published on a weekly basis; 

10 (E) details on the number of full-time 

11 equivalent employees, loan size, loan terms, in12 dustry, and headquarters location of each eligi13 ble recipient of a covered loan, which shall be 

14 published on a monthly basis; and 

15 (F) the name of and loan amount forgiven 

16 for each eligible recipient of a covered loan with 

17 not fewer than 50 full-time employees, with ag18 gregate loan amount forgiveness data provided 

19 for all eligible recipients of covered loans, which 

20 shall be published in a final report not later 

21 than December 31, 2022. 

22 (2) MULTIPLE APPLICATIONS.—To the extent 

23 possible, the Administrator should endeavor to de24 duplicate multiple applications for a covered loan 


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•S 3814 IS

1 submitted by the same applicant to different lenders 

2 for purposes of public reporting. 

3 (m) SEPARATION OF FUNDS AND BANKRUPTCY

4 TREATMENT.— 

5 (1) SEPARATION OF FUNDS.—An eligible recipi6 ent of a covered loan shall— 

7 (A) separately account for, and not com8 mingle with other funds, the proceeds of the 

9 covered loan; and 

10 (B) account in detail for the use of the 

11 proceeds. 

12 (2) BANKRUPTCY TREATMENT.— 

13 (A) IN GENERAL.—If an eligible recipient 

14 of a covered loan is a debtor in a case under 

15 chapter 7 or 13 of title 11, United States Code, 

16 and the covered loan is still outstanding on the 

17 date of the commencement of the case— 

18 (i) any interest of the eligible recipient 

19 in the proceeds of the covered loan shall 

20 not be included in the property of the es21 tate; and 

22 (ii) the amount of the proceeds of the 

23 covered loan that were not expended on al24 lowable expenses described in subsection 


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•S 3814 IS

1 (g)(2) or forgiven under subjection (j) shall 

2 be transferred to the Federal Government. 

3 (B) UNRECOVERED AMOUNTS ON COVERED

4 LOANS.—Nothing in subparagraph (A) shall 

5 preclude the Federal Government from pur6 suing a claim in a case under chapter 7 or 13 

7 of title 11, United States Code, with respect to 

8 the difference, if any, between the amount due 

9 to the Federal Government on a covered loan 

10 and the amount that was transferred under 

11 subparagraph (A)(ii). 

12 (n) AUTHORIZATION OF APPROPRIATIONS.—There is 

13 authorized to be appropriated to the Administration— 

14 (1) such sums as may be necessary to carry out 

15 this section, to remain available until December 31, 

16 2020; and 

17 (2) $150,000,000, to remain available until ex18 pended, for administrative purposes to update tech19 nologies to allow for digital case management, elec20 tronic submissions, and increased telecommuni21 cations related to the program under this section. 

Æ 


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