II 

116TH CONGRESS 

2D SESSION S. 4321 

To establish the Paycheck Protection Program Second Draw Loan and amend 

the 7(a) loan guaranty program for recovery sector business concerns, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2020 

Mr. RUBIO (for himself and Ms. COLLINS) introduced the following bill; which 

was read twice and referred to the Committee on Small Business and Entrepreneurship 

A BILL 

To establish the Paycheck Protection Program Second Draw 

Loan and amend the 7(a) loan guaranty program for 

recovery sector business concerns, and for other 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Continuing Small Business Recovery and Paycheck Pro6 tection Program Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Emergency rulemaking authority. 

TITLE I—PAYCHECK PROTECTION PROGRAM IMPROVEMENTS 

Sec. 101. Additional eligible expenses. 

Sec. 102. Lender safe harbor. 

Sec. 103. Selection of covered period for forgiveness. 

Sec. 104. Simplified application. 

Sec. 105. Group insurance payments as payroll costs. 

Sec. 106. Paycheck protection program second draw loans. 

Sec. 107. Continued access to the paycheck protection program. 

Sec. 108. Increased ability for paycheck protection program borrowers to request an increase in loan amount due to updated regulations. 

Sec. 109. Calculation of maximum loan amount for farmers and ranchers under 

the paycheck protection program. 

Sec. 110. Farm Credit System institutions. 

Sec. 111. Definition of seasonal employer. 

Sec. 112. Changes to the 7(a) loan guaranty program for recovery sector business concerns. 

Sec. 113. Eligibility of 501(c)(6) organizations for loans under the paycheck 

protection program. 

Sec. 114. Prohibition on use of loan proceeds for lobbying activities. 

Sec. 115. Effective date; applicability. 

Sec. 116. Bankruptcy provisions. 

Sec. 117. Conflicts of interest. 

TITLE II—SMALL BUSINESS PROGRAMS GENERALLY 

Sec. 121. Small business investment company program. 

TITLE III—APPROPRIATIONS 

Sec. 131. Commitment authority and appropriations. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) ADMINISTRATION; ADMINISTRATOR.—The 

4 terms ‘‘Administration’’ and ‘‘Administrator’’ mean 

5 the Small Business Administration and the Adminis6 trator thereof. 

7 (2) SMALL BUSINESS CONCERN.—The term 

8 ‘‘small business concern’’ has the meaning given the 

9 term in section 3 of the Small Business Act (15 

10 U.S.C. 632). 


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1 SEC. 3. EMERGENCY RULEMAKING AUTHORITY. 

2 Not later than 30 days after the date of enactment 

3 of this Act, the Administrator shall issue regulations to 

4 carry out this Act and the amendments made by this Act 

5 without regard to the notice requirements under section 

6 553(b) of title 5, United States Code. 

7 TITLE I—PAYCHECK PROTEC8 TION PROGRAM IMPROVE9 MENTS 

10 SEC. 101. ADDITIONAL ELIGIBLE EXPENSES. 

11 (a) ALLOWABLE USE OF PPP LOAN.—Section 

12 7(a)(36)(F)(i) of the Small Business Act (15 U.S.C. 

13 636(a)(36)(F)(i)) is amended— 

14 (1) in subclause (VI), by striking ‘‘and’’ at the 

15 end; 

16 (2) in subclause (VII), by striking the period at 

17 the end and inserting a semicolon; and 

18 (3) by adding at the end the following: 

19 ‘‘(VIII) covered operations ex20 penditures, as defined in section 

21 1106(a) of the CARES Act (15 

22 U.S.C. 9005(a)); 

23 ‘‘(IX) covered property damage 

24 costs, as defined in such section 

25 1106(a); 


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1 ‘‘(X) covered supplier costs, as 

2 defined in such section 1106(a); and 

3 ‘‘(XI) covered worker protection 

4 expenditures, as defined in such sec5 tion 1106(a).’’. 

6 (b) LOAN FORGIVENESS.—Section 1106 of the 

7 CARES Act (15 U.S.C. 9005) is amended— 

8 (1) in subsection (a)— 

9 (A) by redesignating paragraphs (6), (7), 

10 and (8) as paragraphs (10), (11), and (12), re11 spectively; 

12 (B) by redesignating paragraph (5) as 

13 paragraph (8); 

14 (C) by redesignating paragraph (4) as 

15 paragraph (6); 

16 (D) by redesignating paragraph (3) as 

17 paragraph (4); 

18 (E) by inserting after paragraph (2) the 

19 following: 

20 ‘‘(3) the term ‘covered operations expenditure’ 

21 means a payment for any business software or cloud 

22 computing service that facilitates business oper23 ations, product or service delivery, the processing, 

24 payment, or tracking of payroll expenses, human re25 sources, sales and billing functions, or accounting or 


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1 tracking of supplies, inventory, records and ex2 penses;’’; 

3 (F) by inserting after paragraph (4), as so 

4 redesignated, the following: 

5 ‘‘(5) the term ‘covered property damage cost’ 

6 means a cost related to property damage and van7 dalism or looting due to public disturbances that oc8 curred during 2020 that was not covered by insur9 ance or other compensation;’’; 

10 (G) by inserting after paragraph (6), as so 

11 redesignated, the following: 

12 ‘‘(5) the term ‘covered supplier cost’ means an 

13 expenditure made by an entity to a supplier of goods 

14 pursuant to a contract in effect before February 15, 

15 2020 for the supply of goods that are essential to 

16 the operations of the entity at the time at which the 

17 expenditure is made;’’; 

18 (H) by inserting after paragraph (8), as so 

19 redesignated, the following: 

20 ‘‘(9) the term ‘covered worker protection ex21 penditure’— 

22 ‘‘(A) means an operating or a capital ex23 penditure that is required to facilitate the adap24 tation of the business activities of an entity to 

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1 ance issued by the Department of Health and 

2 Human Services, the Centers for Disease Con3 trol, or the Occupational Safety and Health Ad4 ministration during the period beginning on 

5 March 1, 2020 and ending December 31, 2020 

6 related to the maintenance of standards for 

7 sanitation, social distancing, or any other work8 er or customer safety requirement related to 

9 COVID–19; 

10 ‘‘(B) may include— 

11 ‘‘(i) the purchase, maintenance, or 

12 renovation of assets that create or ex13 pand— 

14 ‘‘(I) a drive-through window fa15 cility; 

16 ‘‘(II) an indoor, outdoor, or com17 bined air or air pressure ventilation or 

18 filtration system; 

19 ‘‘(III) a physical barrier such as 

20 a sneeze guard; 

21 ‘‘(IV) an indoor, outdoor, or com22 bined commercial real property; 

23 ‘‘(V) an onsite or offsite health 

24 screening capability; or 


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1 ‘‘(VI) other assets relating to the 

2 compliance with the requirements or 

3 guidance described in subparagraph 

4 (A), as determined by the Adminis5 trator in consultation with the Sec6 retary of Health and Human Services 

7 and the Secretary of Labor; and 

8 ‘‘(ii) the purchase of— 

9 ‘‘(I) covered materials described 

10 in section 328.103(a) of title 44, Code 

11 of Federal Regulations, or any suc12 cessor regulation; 

13 ‘‘(II) particulate filtering face14 piece respirators approved by the Na15 tional Institute for Occupational Safe16 ty and Health, including those ap17 proved only for emergency use author18 ization; or 

19 ‘‘(III) other kinds of personal 

20 protective equipment, as determined 

21 by the Administrator in consultation 

22 with the Secretary of Health and 

23 Human Services and the Secretary of 

24 Labor; and 


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1 ‘‘(C) does not include residential real prop2 erty or intangible property;’’; and 

3 (I) in paragraph (11), as so redesig4 nated— 

5 (i) in subparagraph (C), by striking 

6 ‘‘and’’ at the end; 

7 (ii) in subparagraph (D), by striking 

8 ‘‘and’’ at the end; and 

9 (iii) by adding at the end the fol10 lowing: 

11 ‘‘(E) covered operations expenditures; 

12 ‘‘(F) covered property damage costs; 

13 ‘‘(G) covered supplier costs; and 

14 ‘‘(H) covered worker protection expendi15 tures; and’’; 

16 (2) in subsection (b), by adding at the end the 

17 following: 

18 ‘‘(5) Any covered operations expenditure. 

19 ‘‘(6) Any covered property damage cost. 

20 ‘‘(7) Any covered supplier cost. 

21 ‘‘(8) Any covered worker protection expendi22 ture.’’; 

23 (3) in subsection (d)(8), by inserting ‘‘any pay24 ment on any covered operations expenditure, any 

25 payment on any covered property damage cost, any 


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1 payment on any covered supplier cost, any payment 

2 on any covered worker protection expenditure,’’ after 

3 ‘‘rent obligation,’’; and 

4 (4) in subsection (e)— 

5 (A) in paragraph (2), by inserting ‘‘pay6 ments on covered operations expenditures, pay7 ments on covered property damage costs, pay8 ments on covered supplier costs, payments on 

9 covered worker protection expenditures,’’ after 

10 ‘‘lease obligations,’’; and 

11 (B) in paragraph (3)(B), by inserting 

12 ‘‘make payments on covered operations expendi13 tures, make payments on covered property dam14 age costs, make payments on covered supplier 

15 costs, make payments on covered worker protec16 tion expenditures,’’ after ‘‘rent obligation,’’. 

17 SEC. 102. LENDER SAFE HARBOR. 

18 Subsection (h) of section 1106 of the CARES Act 

19 (15 U.S.C. 9005) is amended to read as follows: 

20 ‘‘(h) HOLD HARMLESS.— 

21 ‘‘(1) IN GENERAL.—A lender may rely on any 

22 certification or documentation submitted by an ap23 plicant for a covered loan or an eligible recipient of 

24 a covered loan that— 


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1 ‘‘(A) is submitted pursuant to any statu2 tory requirement relating to covered loans or 

3 any rule or guidance issued to carry out any ac4 tion relating to covered loans; and 

5 ‘‘(B) attests that the applicant or eligible 

6 recipient, as applicable, has accurately verified 

7 any certification or documentation provided to 

8 the lender. 

9 ‘‘(2) NO ENFORCEMENT ACTION.—With respect 

10 to a lender that relies on a certification or docu11 mentation described in paragraph (1)— 

12 ‘‘(A) an enforcement action may not be 

13 taken against the lender acting in good faith re14 lating to origination or forgiveness of a covered 

15 loan based on such reliance; and 

16 ‘‘(B) the lender acting in good faith shall 

17 not be subject to any penalties relating to origi18 nation or forgiveness of a covered loan based on 

19 such reliance.’’. 

20 SEC. 103. SELECTION OF COVERED PERIOD FOR FORGIVE21 NESS. 

22 Section 1106 of the CARES Act (15 U.S.C. 9005) 

23 is amended— 

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

25 follows: 


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1 ‘‘(3) the term ‘covered period’ means the pe2 riod— 

3 ‘‘(A) beginning on the date of the origina4 tion of a covered loan; and 

5 ‘‘(B) ending on a date selected by the eligi6 ble recipient of the covered loan that occurs 

7 during the period— 

8 ‘‘(i) beginning on the date that is 8 

9 weeks after such date of origination; and 

10 ‘‘(ii) ending on December 31, 2020;’’; 

11 and 

12 (2) by striking subsection (l). 

13 SEC. 104. SIMPLIFIED APPLICATION. 

14 Section 1106 of the CARES Act (15 U.S.C. 9005), 

15 as amended by section 103 of this Act, is amended— 

16 (1) in subsection (e), in the matter preceding 

17 paragraph (1), by striking ‘‘An eligible’’ and insert18 ing ‘‘Except as provided in subsection (l), an eligi19 ble’’; 

20 (2) in subsection (f), by inserting ‘‘or the infor21 mation required under subsection (l), as applicable’’ 

22 after ‘‘subsection (e)’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(l) SIMPLIFIED APPLICATION.— 

25 ‘‘(1) COVERED LOANS UNDER $150,000.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding sub2 section (e), with respect to a covered loan made 

3 to an eligible recipient that is not more than 

4 $150,000, the covered loan amount shall be for5 given under this section if the eligible recipi6 ent— 

7 ‘‘(i) signs and submits to the lender 

8 an attestation that the eligible recipient 

9 made a good faith effort to comply with 

10 the requirements under section 7(a)(36) of 

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

12 636(a)(36)); and 

13 ‘‘(ii) for the 3-year period following 

14 submission of the attestation under clause 

15 (i), retains records relevant to the attesta16 tion that prove compliance with those re17 quirements. 

18 ‘‘(B) DEMOGRAPHIC INFORMATION.—An 

19 eligible recipient of a covered loan described in 

20 subparagraph (A) may complete and submit 

21 any form related to borrower demographic in22 formation. 

23 ‘‘(C) AUDIT.—The Administrator may— 

24 ‘‘(i) review and audit covered loans 

25 described in subparagraph (A); and 


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1 ‘‘(ii) in the case of fraud, ineligibility, 

2 or other material noncompliance with ap3 plicable loan or loan forgiveness require4 ments, modify— 

5 ‘‘(I) the amount of a covered loan 

6 described in subparagraph (A); or 

7 ‘‘(II) the loan forgiveness amount 

8 with respect to a covered loan de9 scribed in subparagraph (A). 

10 ‘‘(2) COVERED LOANS BETWEEN $150,000 AND

11 $2,000,000.— 

12 ‘‘(A) IN GENERAL.—Notwithstanding sub13 section (e), with respect to a covered loan made 

14 to an eligible recipient that is more than 

15 $150,000 and not more than $2,000,000— 

16 ‘‘(i) the eligible recipient seeking loan 

17 forgiveness under this section— 

18 ‘‘(I) is not required to submit the 

19 supporting documentation described 

20 in paragraph (1) or (2) of subsection 

21 (e) or the certification described in 

22 subsection (e)(3)(A); 

23 ‘‘(II) shall retain all relevant 

24 schedules, worksheets, and supporting 

25 documentation for the 3-year period 


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1 following submission of the applica2 tion for loan forgiveness; and 

3 ‘‘(III) may complete and submit 

4 any form related to borrower demo5 graphic information; 

6 ‘‘(ii) review by the lender of an appli7 cation submitted by the eligible recipient 

8 for loan forgiveness under this section shall 

9 be limited to whether the lender received a 

10 complete application, with all fields com11 pleted, initialed, or signed, as applicable; 

12 and 

13 ‘‘(iii) the lender shall— 

14 ‘‘(I) accept the application sub15 mitted by the eligible recipient for 

16 loan forgiveness under this section; 

17 and 

18 ‘‘(II) submit the application to 

19 the Administrator. 

20 ‘‘(B) AUDIT.—The Administrator may— 

21 ‘‘(i) review and audit covered loans 

22 described in subparagraph (A); and 

23 ‘‘(ii) in the case of fraud, ineligibility, 

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1 plicable loan or loan forgiveness require2 ments, modify— 

3 ‘‘(I) the amount of a covered loan 

4 described in subparagraph (A); or 

5 ‘‘(II) the loan forgiveness amount 

6 with respect to a covered loan de7 scribed in subparagraph (A). 

8 ‘‘(3) AUDIT PLAN.— 

9 ‘‘(A) IN GENERAL.—Not later than 30 

10 days after the date of enactment of the Con11 tinuing Small Business Recovery and Paycheck 

12 Protection Program Act, the Administrator 

13 shall submit to the Committee on Small Busi14 ness and Entrepreneurship of the Senate and 

15 the Committee on Small Business of the House 

16 of Representatives an audit plan that details— 

17 ‘‘(i) the policies and procedures of the 

18 Administrator for conducting reviews and 

19 audits of covered loans; and 

20 ‘‘(ii) the metrics that the Adminis21 trator shall use to determine which covered 

22 loans will be audited for each category of 

23 covered loans described in paragraphs (1) 

24 and (2). 


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1 ‘‘(B) REPORTS.—Not later than 30 days 

2 after the date on which the Administrator sub3 mits the audit plan required under subpara4 graph (A), and each month thereafter, the Ad5 ministrator shall submit to the Committee on 

6 Small Business and Entrepreneurship of the 

7 Senate and the Committee on Small Business 

8 of the House of Representatives a report on the 

9 review and audit activities of the Administrator 

10 under this subsection, which shall include— 

11 ‘‘(i) the number of active reviews and 

12 audits; 

13 ‘‘(ii) the number of reviews and audits 

14 that have been ongoing for more than 60 

15 days; and 

16 ‘‘(iii) any substantial changes made to 

17 the audit plan submitted under subpara18 graph (A).’’. 

19 SEC. 105. GROUP INSURANCE PAYMENTS AS PAYROLL 

20 COSTS. 

21 Section 7(a)(36)(A)(viii)(I)(aa)(EE) of the Small 

22 Business Act (15 U.S.C. 636(a)(36)(A)(viii)(I)(aa)(EE)) 

23 is amended by inserting ‘‘and other group insurance’’ be24 fore ‘‘benefits’’. 


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1 SEC. 106. PAYCHECK PROTECTION PROGRAM SECOND 

2 DRAW LOANS. 

3 Section 7(a) of the Small Business Act (15 U.S.C. 

4 636(a)) is amended by adding at the end the following: 

5 ‘‘(37) PAYCHECK PROTECTION PROGRAM SEC6 OND DRAW LOANS.— 

7 ‘‘(A) DEFINITIONS.—In this paragraph— 

8 ‘‘(i) the terms ‘community financial 

9 institutions’, ‘credit union’, ‘eligible self10 employed individual’, ‘insured depository 

11 institution’, ‘nonprofit organization’, ‘pay12 roll costs’, ‘seasonal employer’, and ‘vet13 erans organization’ have the meanings 

14 given those terms in paragraph (36), ex15 cept that ‘eligible entity’ shall be sub16 stituted for ‘eligible recipient’ each place it 

17 appears in the definitions of those terms; 

18 ‘‘(ii) the term ‘covered loan’ means a 

19 loan made under this paragraph; 

20 ‘‘(iii) the terms ‘covered mortgage ob21 ligation’, ‘covered operating expenditure’, 

22 ‘covered property damage cost’, ‘covered 

23 rent obligation’, ‘covered supplier cost’, 

24 ‘covered utility payment’, and ‘covered 

25 worker protection expenditure’ have the 

26 meanings given those terms in section 


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1 1106(a) of the CARES Act (15 U.S.C. 

2 9005(a)); 

3 ‘‘(iv) the term ‘covered period’ means 

4 the period beginning on the date of the 

5 origination of a covered loan and ending on 

6 December 31, 2020; 

7 ‘‘(v) the terms ‘exchange’, ‘issuer’, 

8 and ‘security’ have the meanings given 

9 those terms in section 3(a) of the Securi10 ties Exchange Act of 1934 (15 U.S.C. 

11 78c(a)); 

12 ‘‘(vi) the term ‘eligible entity’— 

13 ‘‘(I) means any business concern, 

14 nonprofit organization, veterans orga15 nization, Tribal business concern, eli16 gible self-employed individual, sole 

17 proprietor, independent contractor, or 

18 small agricultural cooperative that— 

19 ‘‘(aa)(AA) with respect to a 

20 business concern, would qualify 

21 as a small business concern by 

22 the annual receipts size standard 

23 (if applicable) established by sec24 tion 121.201 of title 13, Code of 


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1 Federal Regulations, or any suc2 cessor regulation; or 

3 ‘‘(BB) if the entity does not 

4 qualify as a small business con5 cern, meets the alternative size 

6 standard established under sec7 tion 3(a)(5); 

8 ‘‘(bb) employs not more 

9 than 300 employees; and 

10 ‘‘(cc)(AA) except as provided 

11 in subitems (BB), (CC), and 

12 (DD), had gross receipts during 

13 the first or second quarter in 

14 2020 that are not less than 50 

15 percent less than the gross re16 ceipts of the entity during the 

17 same quarter in 2019; 

18 ‘‘(BB) if the entity was not 

19 in business during the first or 

20 second quarter of 2019, but was 

21 in business during the third and 

22 fourth quarter of 2019, had gross 

23 receipts during the first or sec24 ond quarter of 2020 that are less 

25 than 50 percent of the amount of 


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1 the gross receipts of the entity 

2 during the third or fourth quar3 ter of 2019; 

4 ‘‘(CC) if the entity was not 

5 in business during the first, sec6 ond, or third quarter of 2019, 

7 but was in business during the 

8 fourth quarter of 2019, had gross 

9 receipts during the first or sec10 ond quarter of 2020 that are less 

11 than 50 percent of the amount of 

12 the gross receipts of the entity 

13 during the fourth quarter of 

14 2019; or 

15 ‘‘(DD) if the entity was not 

16 in business during 2019, but was 

17 in operation on February 15, 

18 2020, had gross receipts during 

19 the second quarter of 2020 that 

20 are less than 50 percent of the 

21 amount of the gross receipts of 

22 the entity during the first quar23 ter of 2020; and 

24 ‘‘(II) does not include— 


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1 ‘‘(aa) an issuer, the securi2 ties of which are listed on an ex3 change registered a national se4 curities exchange under section 6 

5 of the Securities Exchange Act of 

6 1934 (15 U.S.C. 78f); 

7 ‘‘(bb) any entity that— 

8 ‘‘(AA) is a type of busi9 ness concern described in 

10 subsection (b), (c), (d), (e), 

11 (f), (h), (l) (m), (p), (q), (r), 

12 or (s) of section 120.110 of 

13 title 13, Code of Federal 

14 Regulations, or any suc15 cessor regulation; 

16 ‘‘(BB) is a type of busi17 ness concern described in 

18 section 120.110(g) of title 

19 13, Code of Federal Regula20 tions, or any successor regu21 lation, except as otherwise 

22 provided in the interim final 

23 rule of the Administration 

24 entitled ‘Business Loan Pro25 gram Temporary Changes; 


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1 Paycheck Protection Pro2 gram—Additional Eligibility 

3 Criteria and Requirements 

4 for Certain Pledges of 

5 Loans’ (85 Fed. Reg. 21747 

6 (April 20, 2020)); 

7 ‘‘(CC) is a type of busi8 ness concern described in 

9 section 120.110(i) of title 

10 13, Code of Federal Regula11 tions, or any successor regu12 lation, except if the business 

13 concern is an organization 

14 described in paragraph 

15 (36)(D)(vii); 

16 ‘‘(DD) is a type of 

17 business concern described 

18 in section 120.110(j) of title 

19 13, Code of Federal Regula20 tions, or any successor regu21 lation, except as otherwise 

22 provided in the interim final 

23 rules of the Administration 

24 entitled ‘Business Loan Pro25 gram Temporary Changes; 


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1 Paycheck Protection Pro2 gram—Eligibility of Certain 

3 Electric Cooperatives’ (85 

4 Fed. Reg. 29847 (May 19, 

5 2020)) and ‘Business Loan 

6 Program Temporary 

7 Changes; Paycheck Protec8 tion Program—Eligibility of 

9 Certain Telephone Coopera10 tives’ (85 Fed. Reg. 35550 

11 (June 11, 2020)) or any 

12 other guidance or rule 

13 issued or that may be issued 

14 by the Administrator; 

15 ‘‘(EE) is a type of busi16 ness concern described in 

17 section 120.110(n) of title 

18 13, Code of Federal Regula19 tions, or any successor regu20 lation, except as otherwise 

21 provided in the interim final 

22 rule of the Administration 

23 entitled ‘Business Loan Pro24 gram Temporary Changes; 

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1 gram—Additional Eligibility 

2 Revisions to First Interim 

3 Final Rule’ (85 Fed. Reg. 

4 38301 (June 26, 2020)) or 

5 any other guidance or rule 

6 issued or that may be issued 

7 by the Administrator; 

8 ‘‘(FF) is a type of busi9 ness concern described in 

10 section 120.110(o) of title 

11 13, Code of Federal Regula12 tions, or any successor regu13 lation, except as otherwise 

14 provided in any guidance or 

15 rule issued or that may be 

16 issued by the Administrator; 

17 or 

18 ‘‘(GG) is an entity that 

19 is organized for research or 

20 for engaging in advocacy in 

21 areas such as public policy 

22 or political strategy or other23 wise describes itself as a 

24 think tank in any public 

25 documents; 


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1 ‘‘(HH) is an entity that 

2 would be described in the 

3 subsections listed in 

4 subitems (AA) through (GG) 

5 if the entity were a business 

6 concern; or 

7 ‘‘(II) is assigned, or 

8 was approved for a loan 

9 under paragraph (36) with, 

10 a North American Industry 

11 Classification System code 

12 beginning with 52; 

13 ‘‘(cc) any business concern 

14 or entity primarily engaged in 

15 political or lobbying activities, 

16 which shall include any entity 

17 that is organized for research or 

18 for engaging in advocacy in areas 

19 such as public policy or political 

20 strategy or otherwise describes 

21 itself as a think tank in any pub22 lic documents; or 

23 ‘‘(dd) any business concern 

24 or entity— 


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1 ‘‘(AA) for which an en2 tity created in or organized 

3 under the laws of the Peo4 ple’s Republic of China or 

5 the Special Administrative 

6 Region of Hong Kong, or 

7 that has significant oper8 ations in the People’s Re9 public of China or the Spe10 cial Administrative Region 

11 of Hong Kong, owns or 

12 holds, directly or indirectly, 

13 not less than 20 percent of 

14 the economic interest of the 

15 business concern or entity, 

16 including as equity shares or 

17 a capital or profit interest in 

18 a limited liability company 

19 or partnership; or 

20 ‘‘(BB) that retains, as 

21 a member of the board of di22 rectors of the business con23 cern, a person who is a resi24 dent of the People’s Repub25 lic of China; and 


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1 ‘‘(vii) the term ‘Tribal business con2 cern’ means a Tribal business concern de3 scribed in section 31(b)(2)(C). 

4 ‘‘(B) LOANS.—Except as otherwise pro5 vided in this paragraph, the Administrator may 

6 guarantee covered loans to eligible entities 

7 under the same terms, conditions, and processes 

8 as a loan made under paragraph (36). 

9 ‘‘(C) MAXIMUM LOAN AMOUNT.— 

10 ‘‘(i) IN GENERAL.—Except as other11 wise provided in this subparagraph, the 

12 maximum amount of a covered loan made 

13 to an eligible entity is the lesser of— 

14 ‘‘(I) the product obtained by mul15 tiplying— 

16 ‘‘(aa) the average total 

17 monthly payment for payroll 

18 costs incurred or paid by the eli19 gible entity during the 1-year pe20 riod before the date on which the 

21 loan is made; by 

22 ‘‘(bb) 2.5; or 

23 ‘‘(II) $2,000,000. 

24 ‘‘(ii) SEASONAL EMPLOYERS.—The 

25 maximum amount of a covered loan made 


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1 to an eligible entity that is a seasonal em2 ployer is the lesser of— 

3 ‘‘(I) the product obtained by mul4 tiplying— 

5 ‘‘(aa) at the election of the 

6 eligible entity, the average total 

7 monthly payments for payroll 

8 costs incurred or paid by the eli9 gible entity— 

10 ‘‘(AA) for a 12-week 

11 period beginning February 

12 15, 2019 or March 1, 2019 

13 and ending June 30, 2019; 

14 or 

15 ‘‘(BB) for a consecutive 

16 12-week period between May 

17 1, 2019 and September 15, 

18 2019; by 

19 ‘‘(bb) 2.5; or 

20 ‘‘(II) $1,000,000. 

21 ‘‘(iii) NEW ENTITIES.—The maximum 

22 amount of a covered loan made to an eligi23 ble entity that did not exist during the 1- 

24 year period preceding February 15, 2020 

25 is the lesser of— 


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1 ‘‘(I) the product obtained by mul2 tiplying— 

3 ‘‘(aa) the quotient obtained 

4 by dividing— 

5 ‘‘(AA) the sum of the 

6 total monthly payments by 

7 the eligible entity for payroll 

8 costs paid or incurred by the 

9 eligible entity as of the date 

10 on which the eligible entity 

11 applies for the covered loan; 

12 by 

13 ‘‘(BB) the number of 

14 months in which those pay15 roll costs were paid or in16 curred; by 

17 ‘‘(bb) 2.5; or 

18 ‘‘(II) $2,000,000. 

19 ‘‘(iv) BUSINESS CONCERNS WITH

20 MORE THAN 1 PHYSICAL LOCATION.— 

21 ‘‘(I) IN GENERAL.—Any eligible 

22 entity that employs not more than 

23 300 employees per physical location of 

24 the eligible entity and that is assigned 

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1 tion System Code beginning with 72 

2 at the time of disbursal shall be eligi3 ble to receive a covered loan. 

4 ‘‘(II) LIMIT FOR MULTIPLE LO5 CATIONS.—With respect to an eligible 

6 entity with more than 1 physical loca7 tion, the total amount of all covered 

8 loans shall be not more than 

9 $2,000,000. 

10 ‘‘(v) LOAN NUMBER LIMITATION.—An 

11 eligible entity may only receive 1 covered 

12 loan. 

13 ‘‘(vi) 90 DAY RULE FOR MAXIMUM

14 LOAN AMOUNT.—The maximum aggregate 

15 loan amount of loans guaranteed under 

16 this subsection that are approved for an el17 igible entity (including any affiliates) with18 in 90 days of approval of another loan 

19 under this subsection for the eligible entity 

20 (including any affiliates) shall not exceed 

21 $10,000,000. 

22 ‘‘(D) EXCEPTION FROM CERTAIN CERTIFI23 CATION REQUIREMENTS.—An eligible entity ap24 plying for a covered loan shall not be required 


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1 to make the certification described in subclause 

2 (III) or (IV) of paragraph (36)(G)(i). 

3 ‘‘(E) FEE WAIVER.—With respect to a cov4 ered loan— 

5 ‘‘(i) in lieu of the fee otherwise appli6 cable under paragraph (23)(A), the Ad7 ministrator shall collect no fee; and 

8 ‘‘(ii) in lieu of the fee otherwise appli9 cable under paragraph (18)(A), the Ad10 ministrator shall collect no fee. 

11 ‘‘(F) ELIGIBLE CHURCHES AND RELIGIOUS

12 ORGANIZATIONS.— 

13 ‘‘(i) SENSE OF CONGRESS.—It is the 

14 sense of Congress that the interim final 

15 rule of the Administration entitled ‘Busi16 ness Loan Program Temporary Changes; 

17 Paycheck Protection Program’ (85 Fed. 

18 Reg. 20817 (April 15, 2020)) properly 

19 clarified the eligibility of churches and reli20 gious organizations for loans made under 

21 paragraph (36). 

22 ‘‘(ii) APPLICABILITY OF PROHIBI23 TION.—The prohibition on eligibility estab24 lished by section 120.110(k) of title 13, 

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1 cessor regulation, shall not apply to a cov2 ered loan. 

3 ‘‘(G) GROSS RECEIPTS FOR NONPROFIT

4 AND VETERANS ORGANIZATIONS.—For purposes 

5 of calculating gross receipts under subpara6 graph (A)(vi)(I)(cc) for an entity that is a non7 profit organization or a veterans organization, 

8 gross receipts— 

9 ‘‘(i) shall include proceeds from fund10 raising events, federated campaigns, gifts, 

11 donor-advised funds, and funds from simi12 lar sources; and 

13 ‘‘(ii) shall not include— 

14 ‘‘(I) Federal grants (excluding 

15 any loan forgiveness on loans received 

16 under paragraph (36) or this para17 graph; 

18 ‘‘(II) revenues from a supporting 

19 organization; 

20 ‘‘(III) grants from private foun21 dations that are disbursed over the 

22 course of more than 1 calendar year; 

23 or 

24 ‘‘(IV) any contribution of prop25 erty other than money, stocks, bonds, 


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1 and other securities, provided that the 

2 non-cash contribution is not sold by 

3 the organization in a transaction un4 related to the tax-exempt purpose of 

5 the organization. 

6 ‘‘(H) LOAN FORGIVENESS.— 

7 ‘‘(i) IN GENERAL.—Except as pro8 vided otherwise provided in this subpara9 graph, an eligible entity shall be eligible for 

10 forgiveness of indebtedness on a covered 

11 loan in the same manner as an eligible re12 cipient with respect to a loan made under 

13 paragraph (36), as described in section 

14 1106 of the CARES Act (15 U.S.C. 9005). 

15 ‘‘(ii) FORGIVENESS AMOUNT.—An eli16 gible entity shall be eligible for forgiveness 

17 of indebtedness on a covered loan in an 

18 amount equal to the sum of the following 

19 costs incurred or expenditures made during 

20 the covered period: 

21 ‘‘(I) Payroll costs. 

22 ‘‘(II) Any payment of interest on 

23 any covered mortgage obligation 

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1 ment of or payment of principal on a 

2 covered mortgage obligation). 

3 ‘‘(III) Any covered operations ex4 penditure. 

5 ‘‘(IV) Any covered property dam6 age cost. 

7 ‘‘(V) Any payment on any cov8 ered rent obligation. 

9 ‘‘(VI) Any covered utility pay10 ment. 

11 ‘‘(VII) Any covered supplier cost. 

12 ‘‘(VIII) Any covered worker pro13 tection expenditure. 

14 ‘‘(iii) LIMITATION ON FORGIVENESS

15 FOR ALL ELIGIBLE ENTITIES.—The for16 giveness amount under this subparagraph 

17 shall be equal to the lesser of— 

18 ‘‘(I) the amount described in 

19 clause (ii); and 

20 ‘‘(II) the amount equal to the 

21 quotient obtained by dividing— 

22 ‘‘(aa) the amount of the cov23 ered loan used for payroll costs 

24 during the covered period; and 

25 ‘‘(bb) 0.60. 


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1 ‘‘(I) LENDER ELIGIBILITY.—Except as 

2 otherwise provided in this paragraph, a lender 

3 approved to make loans under paragraph (36) 

4 may make covered loans under the same terms 

5 and conditions as in paragraph (36). 

6 ‘‘(J) REIMBURSEMENT FOR LOAN PROC7 ESSING AND SERVICING.—The Administrator 

8 shall reimburse a lender authorized to make a 

9 covered loan in an amount that is— 

10 ‘‘(i) 3 percent of the principal amount 

11 of the financing of the covered loan up to 

12 $350,000; and 

13 ‘‘(ii) 1 percent of the principal 

14 amount of the financing of the covered 

15 loan above $350,000, if applicable. 

16 ‘‘(K) SET ASIDE FOR SMALL ENTITIES.— 

17 Not less than $25,000,000,000 of the total 

18 amount of covered loans guaranteed by the Ad19 ministrator shall be made to eligible entities 

20 with not more than 10 employees as of Feb21 ruary 15, 2020. 

22 ‘‘(L) SET ASIDE FOR COMMUNITY FINAN23 CIAL INSTITUTIONS, SMALL INSURED DEPOSI24 TORY INSTITUTIONS, CREDIT UNIONS, AND

25 FARM CREDIT SYSTEM INSTITUTIONS.—Not less 


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1 than $10,000,000,000 of the total amount of 

2 covered loans guaranteed by the Administrator 

3 shall be made by— 

4 ‘‘(i) community financial institutions; 

5 ‘‘(ii) insured depository institutions 

6 with consolidated assets of less than 

7 $10,000,000,000; 

8 ‘‘(iii) credit unions with consolidated 

9 assets of less than $10,000,000,000; and 

10 ‘‘(iv) institutions of the Farm Credit 

11 System chartered under the Farm Credit 

12 Act of 1971 (12 U.S.C. 2001 et seq.) with 

13 consolidated assets of less than 

14 $10,000,000,000 (not including the Fed15 eral Agricultural Mortgage Corporation). 

16 ‘‘(M) PUBLICATION OF GUIDANCE.—Not 

17 later than 10 days after the date of enactment 

18 of this paragraph, the Administrator shall issue 

19 guidance addressing barriers to accessing cap20 ital for minority, underserved, veteran, and 

21 women-owned business concerns for the purpose 

22 of ensuring equitable access to covered loans. 

23 ‘‘(N) STANDARD OPERATING PROCE24 DURE.—The Administrator shall, to the max25 imum extent practicable, allow a lender apVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 proved to make covered loans to use existing 

2 program guidance and standard operating pro3 cedures for loans made under this subsection. 

4 ‘‘(O) COMPLIANCE WITH OVERSIGHT RE5 QUIREMENTS.— 

6 ‘‘(i) IN GENERAL.—Except as pro7 vided in clause (ii), on and after the date 

8 of enactment of this paragraph, the Ad9 ministrator shall comply with any data or 

10 information requests or inquiries made by 

11 the Comptroller General of the United 

12 States or the Inspector General of any 

13 agency not later than 30 days (or such 

14 later date as the Comptroller General or 

15 Inspector General, as applicable, may 

16 specify) after receiving the request or in17 quiry. 

18 ‘‘(ii) EXCEPTION.—If the Adminis19 trator is unable to comply with a request 

20 or inquiry described in clause (i) within the 

21 30-day period or, if applicable, later period 

22 described in that clause, the Administrator 

23 shall, during that 30-day (or later) period, 

24 submit to the Committee on Small Busi25 ness and Entrepreneurship of the Senate 


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1 and the Committee on Small Business of 

2 the House of Representatives a notification 

3 that includes a detailed justification for the 

4 inability of the Administrator to comply 

5 with the request or inquiry. 

6 ‘‘(P) PROHIBITION ON USE OF PROCEEDS

7 FOR LOBBYING ACTIVITIES.—None of the pro8 ceeds of a covered loan may be used for lob9 bying activities, as defined in section 3 of the 

10 Lobbying Disclosure Act of 1995 (2 U.S.C. 

11 1602).’’. 

12 SEC. 107. CONTINUED ACCESS TO THE PAYCHECK PROTEC13 TION PROGRAM. 

14 (a) IN GENERAL.—Section 7(a)(36)(E)(ii) of the 

15 Small Business Act (15 U.S.C. 636(a)(36)(E)(ii)) is 

16 amended by striking ‘‘$10,000,000’’ and inserting 

17 ‘‘$2,000,000’’. 

18 (b) APPLICABILITY OF MAXIMUM LOAN AMOUNT

19 CALCULATION.— 

20 (1) DEFINITIONS.—In this subsection, the 

21 terms ‘‘covered loan’’ and ‘‘eligible recipient’’ have 

22 the meanings given those terms in section 7(a)(36) 

23 of the Small Business Act (15 U.S.C. 636(a)(36)). 

24 (2) APPLICABILITY.—The amendment made by 

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1 ered loan applied for by an eligible recipient on or 

2 after the date of enactment of this Act. 

3 SEC. 108. INCREASED ABILITY FOR PAYCHECK PROTEC4 TION PROGRAM BORROWERS TO REQUEST 

5 AN INCREASE IN LOAN AMOUNT DUE TO UP6 DATED REGULATIONS. 

7 (a) DEFINITIONS.—In this section, the terms ‘‘cov8 ered loan’’ and ‘‘eligible recipient’’ have the meanings 

9 given those terms in section 7(a)(36) of the Small Busi10 ness Act (15 U.S.C. 636(a)(36)). 

11 (b) INCREASED AMOUNT.—Notwithstanding the in12 terim final rule issued by the Administration entitled 

13 ‘‘Business Loan Program Temporary Changes; Paycheck 

14 Protection Program—Loan Increases’’ (85 Fed. Reg. 

15 29842 (May 19, 2020)), an eligible recipient of a covered 

16 loan that is eligible for an increased covered loan amount 

17 as a result of any interim final rule that allows for covered 

18 loan increases may submit a request for an increase in 

19 the covered loan amount even if— 

20 (1) the initial covered loan amount has been 

21 fully disbursed; or 

22 (2) the lender of the initial covered loan has 

23 submitted to the Administration a Form 1502 report 

24 related to the covered loan. 


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1 SEC. 109. CALCULATION OF MAXIMUM LOAN AMOUNT FOR 

2 FARMERS AND RANCHERS UNDER THE PAY3 CHECK PROTECTION PROGRAM. 

4 (a) IN GENERAL.—Section 7(a)(36) of the Small 

5 Business Act (15 U.S.C. 636(a)(36)), as amended by sec6 tion 107 of this Act, is amended— 

7 (1) in subparagraph (E), in the matter pre8 ceding clause (i), by striking ‘‘During’’ and inserting 

9 ‘‘Except as provided in subparagraph (T), during’’; 

10 and 

11 (2) by adding at the end the following: 

12 ‘‘(T) CALCULATION OF MAXIMUM LOAN

13 AMOUNT FOR FARMERS AND RANCHERS.— 

14 ‘‘(i) DEFINITION.—In this subpara15 graph, the term ‘covered recipient’ means 

16 an eligible recipient that— 

17 ‘‘(I) operates as a sole propri18 etorship or as an independent con19 tractor, or is an eligible self-employed 

20 individual; 

21 ‘‘(II) reports farm income or ex22 penses on a Schedule F (or any equiv23 alent successor schedule); and 

24 ‘‘(III) was in business during the 

25 period beginning on February 15, 

26 2019 and ending on June 30, 2019. 


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1 ‘‘(ii) NO EMPLOYEES.—With respect 

2 to covered recipient without employees, the 

3 maximum covered loan amount shall be the 

4 lesser of— 

5 ‘‘(I) the sum of— 

6 ‘‘(aa) the product obtained 

7 by multiplying— 

8 ‘‘(AA) the gross income 

9 of the covered recipient in 

10 2019, as reported on a 

11 Schedule F (or any equiva12 lent successor schedule), 

13 that is not more than 

14 $100,000, divided by 12; 

15 and 

16 ‘‘(BB) 2.5; and 

17 ‘‘(bb) the outstanding 

18 amount of a loan under sub19 section (b)(2) that was made 

20 during the period beginning on 

21 January 31, 2020 and ending on 

22 April 3, 2020 that the borrower 

23 intends to refinance under the 

24 covered loan, not including any 

25 amount of any advance under the 


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1 loan that is not required to be re2 paid; or 

3 ‘‘(II) $2,000,000. 

4 ‘‘(iii) WITH EMPLOYEES.—With re5 spect to a covered recipient with employ6 ees, the maximum covered loan amount 

7 shall be calculated using the formula de8 scribed in subparagraph (E), except that 

9 the gross income of the covered recipient 

10 described in clause (ii)(I)(aa)(AA) of this 

11 subparagraph, as divided by 12, shall be 

12 added to the sum calculated under sub13 paragraph (E)(i)(I). 

14 ‘‘(iv) RECALCULATION.—A lender that 

15 made a covered loan to a covered recipient 

16 before the date of enactment of this sub17 paragraph may, at the request of the cov18 ered recipient— 

19 ‘‘(I) recalculate the maximum 

20 loan amount applicable to that cov21 ered loan based on the formula de22 scribed in clause (ii) or (iii), as appli23 cable, if doing so would result in a 

24 larger covered loan amount; and 


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1 ‘‘(II) provide the covered recipi2 ent with additional covered loan 

3 amounts based on that recalcula4 tion.’’. 

5 SEC. 110. FARM CREDIT SYSTEM INSTITUTIONS. 

6 (a) DEFINITION OF FARM CREDIT SYSTEM INSTITU7 TION.—In this section, the term ‘‘Farm Credit System in8 stitution’’— 

9 (1) means an institution of the Farm Credit 

10 System chartered under the Farm Credit Act of 

11 1971 (12 U.S.C. 2001 et seq.); and 

12 (2) does not include the Federal Agricultural 

13 Mortgage Corporation. 

14 (b) FACILITATION OF PARTICIPATION IN PPP AND

15 SECOND DRAW LOANS.— 

16 (1) APPLICABLE RULES.—Solely with respect to 

17 loans under paragraphs (36) and (37) of section 

18 7(a) of the Small Business Act (15 U.S.C. 636(a)), 

19 Farm Credit Administration regulations and guid20 ance issued as of July 14, 2020, and compliance 

21 with such regulations and guidance, shall be deemed 

22 functionally equivalent to requirements referenced in 

23 section 3(a)(iii)(II) of the interim final rule of the 

24 Administration entitled ‘‘Business Loan Program 

25 Temporary Changes; Paycheck Protection Program’’ 


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1 (85 Fed. Reg. 20811 (April 15, 2020)) or any simi2 lar requirement referenced in that interim final rule 

3 in implementing such paragraph (37). 

4 (2) APPLICABILITY OF CERTAIN LOAN RE5 QUIREMENTS.—For purposes of making loans under 

6 paragraph (36) or (37) of section 7(a) of the Small 

7 Business Act (15 U.S.C. 636(a)) or forgiving those 

8 loans in accordance with section 1106 of the CARES 

9 Act (15 U.S.C. 9005) and subparagraph (H) of such 

10 paragraph (37), sections 4.13, 4.14, and 4.14A of 

11 the Farm Credit Act of 1971 (12 U.S.C. 2199, 

12 2202, 2202a) (including regulations issued under 

13 those sections) shall not apply. 

14 (3) RISK WEIGHT.— 

15 (A) IN GENERAL.—With respect to the ap16 plication of Farm Credit Administration capital 

17 requirements, a loan described in subparagraph 

18 (B)— 

19 (i) shall receive a risk weight of zero 

20 percent; and 

21 (ii) shall not be included in the cal22 culation of any applicable leverage ratio or 

23 other applicable capital ratio or calculation. 

24 (B) LOANS DESCRIBED.—A loan referred 

25 to in subparagraph (A) is— 


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1 (i) a loan made by a Farm Credit 

2 Bank described in section 1.2(a) of the 

3 Farm Credit Act of 1971 (12 U.S.C. 

4 2002(a)) to a Federal Land Bank Associa5 tion, a Production Credit Association, or 

6 an agricultural credit association described 

7 in that section to make loans under para8 graph (36) or (37) of section 7(a) of the 

9 Small Business Act (15 U.S.C. 636(a)) or 

10 forgive those loans in accordance with sec11 tion 1106 of the CARES Act (15 U.S.C. 

12 9005) and subparagraph (H) of such para13 graph (37); or 

14 (ii) a loan made by a Federal Land 

15 Bank Association, a Production Credit As16 sociation, an agricultural credit associa17 tion, or the bank for cooperatives described 

18 in section 1.2(a) of the Farm Credit Act of 

19 1971 (12 U.S.C. 2002(a)) under para20 graph (36) or (37) of section 7(a) of the 

21 Small Business Act (15 U.S.C. 636(a)). 

22 (4) RESERVATION OF LOAN GUARANTEES.— 

23 Section 7(a)(36)(S) of the Small Business Act (15 

24 U.S.C. 636(a)(36)(S)) is amended— 

25 (A) in clause (i)— 


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1 (i) in subclause (I), by striking ‘‘and’’ 

2 at the end; 

3 (ii) in subclause (II), by striking the 

4 period at the end and inserting ‘‘; and’’; 

5 and 

6 (iii) by adding at the end the fol7 lowing: 

8 ‘‘(III) institutions of the Farm 

9 Credit System chartered under the 

10 Farm Credit Act of 1971 (12 U.S.C. 

11 2001 et seq.) with consolidated assets 

12 of not less than $10,000,000,000 and 

13 less than $50,000,000,000.’’; and 

14 (B) in clause (ii)— 

15 (i) in subclause (II), by striking 

16 ‘‘and’’ at the end; 

17 (ii) in subclause (III), by striking the 

18 period at the end and inserting ‘‘; and’’; 

19 and 

20 (iii) by adding at the end the fol21 lowing: 

22 ‘‘(IV) institutions of the Farm 

23 Credit System chartered under the 

24 Farm Credit Act of 1971 (12 U.S.C. 


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•S 4321 IS

1 2001 et seq.) with consolidated assets 

2 of less than $10,000,000,000.’’. 

3 SEC. 111. DEFINITION OF SEASONAL EMPLOYER. 

4 (a) PPP LOANS.—Section 7(a)(36)(A) of the Small 

5 Business Act (15 U.S.C. 636(a)(36)(A)) is amended— 

6 (1) in clause (xi), by striking ‘‘and’’ at the end; 

7 (2) in clause (xii), by striking the period at the 

8 end and inserting ‘‘; and’’; and 

9 (3) by adding at the end the following: 

10 ‘‘(xiii) the term ‘seasonal employer’ 

11 means an eligible recipient that— 

12 ‘‘(I) does not operate for more 

13 than 7 months in any calendar year; 

14 or 

15 ‘‘(II) during the preceding cal16 endar year, had gross receipts for any 

17 6 months of that year that were not 

18 more than 33.33 percent of the gross 

19 receipts of the employer for the other 

20 6 months of that year.’’. 

21 (b) LOAN FORGIVENESS.—Paragraph (12) of section 

22 1106(a) of the CARES Act (15 U.S.C. 9005(a)), as so 

23 redesignated by by section 101(b) of this Act, is amended 

24 to read as follows: 


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1 ‘‘(12) the terms ‘payroll costs’ and ‘seasonal 

2 employer’ have the meanings given those terms in 

3 section 7(a)(36) of the Small Business Act (15 

4 U.S.C. 636(a)(36)).’’. 

5 SEC. 112. CHANGES TO THE 7(A) LOAN GUARANTY PRO6 GRAM FOR RECOVERY SECTOR BUSINESS 

7 CONCERNS. 

8 Section 7(a) of the Small Business Act (15 U.S.C. 

9 636(a)), as amended by section 106 of this Act, is amend10 ed by adding at the end the following: 

11 ‘‘(38) RECOVERY SECTOR LOANS.— 

12 ‘‘(A) DEFINITIONS.—In this paragraph— 

13 ‘‘(i) the term ‘covered loan’ means a 

14 loan made under this paragraph; 

15 ‘‘(ii) the term ‘covered population cen16 sus tract’ means a population census tract 

17 for which— 

18 ‘‘(I) in the case of a tract that is 

19 not located within a metropolitan 

20 area, the median income does not ex21 ceed 80 percent of the statewide (or, 

22 with respect to a possession or terri23 tory of the United States, the 

24 possession- or territory-wide) median 

25 family income; or 


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1 ‘‘(II) in the case of a tract that 

2 is located within a metropolitan area, 

3 the median family income does not ex4 ceed 80 percent of the greater of the 

5 statewide (or, with respect to a pos6 session or territory of the United 

7 States, the possession- or territory8 wide) median family income and the 

9 metropolitan area median family in10 come; 

11 ‘‘(iii) the term ‘covered seasonal em12 ployer’ means a small business concern 

13 that— 

14 ‘‘(I) is a seasonal employer, as 

15 defined in paragraph (36); and 

16 ‘‘(II) during the preceding cal17 endar year— 

18 ‘‘(aa) had gross receipts as 

19 described in paragraph 

20 (36)(A)(xiii)(II); and 

21 ‘‘(bb) employed not more 

22 than 250 employees during not 

23 fewer than 5 months out of that 

24 year; 

25 ‘‘(iv) the term ‘eligible entity’— 


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1 ‘‘(I) means any small business 

2 concern that— 

3 ‘‘(aa) except with respect to 

4 a covered seasonal employer, em5 ploys not more than 500 employ6 ees; 

7 ‘‘(bb)(AA) except as pro8 vided in subitems (BB), (CC), 

9 and (DD), had gross receipts 

10 during the first or second quarter 

11 in 2020 that are less than 50 

12 percent of the gross receipts of 

13 the business concern during the 

14 same quarter in 2019; 

15 ‘‘(BB) if the small business 

16 concern was not in business dur17 ing the first or second quarter of 

18 2019, but was in business during 

19 the third and fourth quarter of 

20 2019, had gross receipts during 

21 the first or second quarter of 

22 2020 that are less than 50 per23 cent of the amount of the gross 

24 receipts of the small business 


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1 concern during the third or 

2 fourth quarter of 2019; 

3 ‘‘(CC) if the small business 

4 concern was not in business dur5 ing the first, second, or third 

6 quarter of 2019, but was in busi7 ness during the fourth quarter of 

8 2019, had gross receipts during 

9 the first or second quarter of 

10 2020 that are less than 50 per11 cent of the amount of the gross 

12 receipts of the small business 

13 concern during the fourth quar14 ter of 2019; or 

15 ‘‘(DD) if the small business 

16 concern was not in business dur17 ing the first or second quarter of 

18 2020, had gross receipts during 

19 any 2-month period during 2020 

20 that are less than 50 percent of 

21 the amount of the gross receipts 

22 of the small business concern 

23 during any other 2-month period 

24 during 2020; and 


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1 ‘‘(cc)(AA) is a covered sea2 sonal employer seeking a covered 

3 loan of not more than 

4 $1,000,000; or 

5 ‘‘(BB) is a small business 

6 concern the principal place of 

7 business of which is in, and not 

8 less than 50 percent of the total 

9 gross income of which is derived 

10 from the active conduct of the 

11 business concern within, a small 

12 business low-income census tract; 

13 and 

14 ‘‘(II) does not include— 

15 ‘‘(aa) an entity described in 

16 paragraph (37)(A)(vi)(II); 

17 ‘‘(bb) any entity that re18 ceived a loan under paragraph 

19 (37); or 

20 ‘‘(cc) any entity that re21 ceived a loan under paragraph 

22 (36) after the date of enactment 

23 of this paragraph; and 

24 ‘‘(v) the term ‘small business low-in25 come census tract’— 


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1 ‘‘(I) means— 

2 ‘‘(aa) a covered population 

3 census tract for which the pov4 erty rate is not less than 20 per5 cent; or 

6 ‘‘(bb) an area— 

7 ‘‘(AA) that is not 

8 tracted as a population cen9 sus tract; 

10 ‘‘(BB) for which the 

11 poverty rate in the equiva12 lent county division (as de13 fined by the Bureau of the 

14 Census) is not less than 20 

15 percent; and 

16 ‘‘(CC) for which the 

17 median income in the equiv18 alent county division (as de19 fined by the Bureau of the 

20 Census) does not exceed 80 

21 percent of the statewide (or, 

22 with respect to a possession 

23 or territory of the United 

24 States, the possession- or 


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1 territory-wide) median in2 come; and 

3 ‘‘(II) does not include any area 

4 or population census tract with a me5 dian family income that is not less 

6 than 120 percent of the median family 

7 income in the United States, accord8 ing to the most recent American Com9 munities Survey data from the Bu10 reau of the Census. 

11 ‘‘(B) LOANS.—Except as otherwise pro12 vided in this paragraph, the Administrator may 

13 guarantee covered loans made to eligible enti14 ties— 

15 ‘‘(i) under the same terms, conditions, 

16 and processes as a loan made under this 

17 subsection; and 

18 ‘‘(ii) to meet working capital needs, 

19 acquire fixed assets, or refinance existing 

20 indebtedness while recovering from the 

21 COVID–19 pandemic. 

22 ‘‘(C) MAXIMUM LOAN AMOUNT.—The max23 imum amount of a covered loan made to an eli24 gible entity shall be the lesser of— 

25 ‘‘(i) $10,000,000; or 


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1 ‘‘(ii) the amount equal to 200 percent 

2 of the average annual receipts of the eligi3 ble entity. 

4 ‘‘(D) LOAN NUMBER LIMITATION.—An eli5 gible entity may only receive 1 covered loan. 

6 ‘‘(E) 90 DAY RULE FOR MAXIMUM LOAN

7 AMOUNT.—The maximum aggregate loan 

8 amount of loans guaranteed under this sub9 section that are approved for an eligible entity 

10 (including any affiliates) within 90 days of ap11 proval of another loan under this subsection for 

12 the eligible entity (including any affiliates) shall 

13 not exceed $10,000,000. 

14 ‘‘(F) APPLICATION DEADLINE.—An eligi15 ble entity desiring a covered loan shall submit 

16 an application not later than December 31, 

17 2020. 

18 ‘‘(G) FEE WAIVER.—With respect to a cov19 ered loan— 

20 ‘‘(i) in lieu of the fee otherwise appli21 cable under paragraph (23)(A), the Ad22 ministrator shall collect no fee; and 

23 ‘‘(ii) in lieu of the fee otherwise appli24 cable under paragraph (18)(A), the Ad25 ministrator shall collect no fee. 


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1 ‘‘(H) LOAN TERMS.— 

2 ‘‘(i) IN GENERAL.—In order to receive 

3 a covered loan, an eligible entity shall not 

4 be required to show that the eligible entity 

5 is unable to obtain credit elsewhere. 

6 ‘‘(ii) MATURITY AND INTEREST

7 RATE.—A covered loan shall— 

8 ‘‘(I) have a maturity of 20 years; 

9 and 

10 ‘‘(II) bear an interest rate of 

11 equal to the sum of— 

12 ‘‘(aa) the Secured Overnight 

13 Financing Rate in effect for each 

14 of the days in the relevant quar15 ter that interest is charged, as 

16 compiled and released by the 

17 Federal Reserve Bank of New 

18 York; and 

19 ‘‘(bb) 300 basis points. 

20 ‘‘(iii) GUARANTEE.—In an agreement 

21 to participate in a covered loan on a de22 ferred basis, the participation by the Ad23 ministration shall be 100 percent of the 

24 covered loan. 


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1 ‘‘(iv) SUBSIDY FOR INTEREST PAY2 MENTS.— 

3 ‘‘(I) IN GENERAL.—The Admin4 istrator shall pay the amount of inter5 est that is owed on a covered loan in 

6 regular servicing status for the matu7 rity of the loan such that the interest 

8 rate paid by the eligible entity is, at 

9 all times, equal to a rate of 1 percent. 

10 ‘‘(II) TIMING OF PAYMENT.—The 

11 Administrator shall— 

12 ‘‘(aa) begin making pay13 ments under subclause (I) not 

14 later than 30 days after the date 

15 on which the first such payment 

16 is due; and 

17 ‘‘(bb) make payments with18 out regard to the payment defer19 ral described in clause (iv). 

20 ‘‘(III) APPLICATION OF PAY21 MENT.—Any payment made by the 

22 Administrator under subclause (I) 

23 shall be applied to the covered loan 

24 such that the eligible entity is relieved 

25 of the obligation to pay that amount. 


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1 ‘‘(v) PAYMENT DEFERRAL.— 

2 ‘‘(I) IN GENERAL.—No payment 

3 of principal or interest shall be due on 

4 a covered loan for the first 2 years of 

5 the covered loan. 

6 ‘‘(II) ADDITIONAL DEFERRAL.— 

7 After the 2-year deferral period under 

8 subclause (I), the Administrator may 

9 grant not more than an additional 2 

10 years of principal deferral to the eligi11 ble entity if the eligible entity is cer12 tified by the Administrator and the 

13 Secretary as economically distressed 

14 based on publicly available criteria es15 tablished by the Administrator. 

16 ‘‘(vi) LIMITATION ON CHANGES IN

17 TERMS.—Notwithstanding any other provi18 sion of this subsection, for a covered loan, 

19 the Administrator shall not approve any 

20 increase in loan amount or change in guar21 anty percentage, interest rate, interest ac22 crual method, or maturity, except for such 

23 changes as may be necessary for prepay24 ment and the deferment of payment under 

25 clause (v). 


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1 ‘‘(I) PROHIBITION ON USE OF PROCEEDS

2 FOR DISASTER LOANS.—An eligible entity shall 

3 not use the proceeds of a covered loan to refi4 nance any loan made under subsection (b). 

5 ‘‘(J) SECONDARY MARKET.—In order to 

6 increase the liquidity of the secondary market 

7 for covered loans, the Administrator shall, not 

8 later than 60 days after the date of enactment 

9 of this paragraph, substantially reduce barriers 

10 to the sale of covered loans on the secondary 

11 market. 

12 ‘‘(K) LENDER ELIGIBILITY.—In order to 

13 increase access to and the equitable distribution 

14 of covered loans, the Administrator shall estab15 lish a process by which a lender approved to 

16 make loans under paragraph (36) may make 

17 covered loans. 

18 ‘‘(L) REIMBURSEMENT FOR LOAN PROC19 ESSING AND SERVICING.—The Administrator 

20 shall reimburse a lender authorized to make a 

21 covered loan in an amount that is— 

22 ‘‘(i) 3 percent of the principal amount 

23 of the financing of the covered loan up to 

24 $350,000; and 


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1 ‘‘(ii) 1 percent of the principal 

2 amount of the financing of the covered 

3 loan above $350,000, if applicable. 

4 ‘‘(M) STANDARD OPERATING PROCE5 DURE.—The Administrator shall, to the max6 imum extent practicable, allow a lender ap7 proved to make covered loans to use existing 

8 program guidance and standard operating pro9 cedures for loans made under this subsection.’’. 

10 SEC. 113. ELIGIBILITY OF 501(C)(6) ORGANIZATIONS FOR 

11 LOANS UNDER THE PAYCHECK PROTECTION 

12 PROGRAM. 

13 Section 7(a)(36)(D) of the Small Business Act (15 

14 U.S.C. 636(a)(36)(D)) is amended— 

15 (1) in clause (v), by inserting ‘‘or whether an 

16 entity described in clause (vii) employs not more 

17 than 300 employees,’’ after ‘‘clause (i)(I),’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(vii) ELIGIBILITY FOR CERTAIN

20 501(C)(6) ORGANIZATIONS.— 

21 ‘‘(I) IN GENERAL.—Except as 

22 provided in subclause (II), any organi23 zation that is described in section 

24 501(c)(6) of the Internal Revenue 

25 Code and that is exempt from taxVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 ation under section 501(a) of such 

2 Code (excluding professional football 

3 leagues and organizations with the 

4 purpose of promoting or participating 

5 in a political campaign or other activ6 ity) shall be eligible to receive a cov7 ered loan if— 

8 ‘‘(aa) the organization does 

9 not receive more than 10 percent 

10 of its receipts from lobbying ac11 tivities; 

12 ‘‘(bb) the lobbying activities 

13 of the organization do not com14 prise more than 10 percent of the 

15 total activities of the organiza16 tion; and 

17 ‘‘(cc) the organization em18 ploys not more than 300 employ19 ees. 

20 ‘‘(II) DESTINATION MARKETING

21 ORGANIZATIONS.—Notwithstanding 

22 subclause (I), during the covered pe23 riod, any destination marketing orga24 nization shall be eligible to receive a 

25 covered loan if— 


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1 ‘‘(aa) the destination mar2 keting organization does not re3 ceive more than 10 percent of its 

4 receipts from lobbying activities; 

5 ‘‘(bb) the lobbying activities 

6 of the destination marketing or7 ganization do not comprise more 

8 than 10 percent of the total ac9 tivities of the organization; 

10 ‘‘(cc) the destination mar11 keting organization employs not 

12 more than 300 employees; and 

13 ‘‘(dd) the destination mar14 keting organization— 

15 ‘‘(AA) is described in 

16 section 501(c) of the Inter17 nal Revenue Code and is ex18 empt from taxation under 

19 section 501(a) of such Code; 

20 or 

21 ‘‘(BB) is a quasi-gov22 ernmental entity or is a po23 litical subdivision of a State 

24 or local government, includVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 ing any instrumentality of 

2 those entities.’’. 

3 SEC. 114. PROHIBITION ON USE OF LOAN PROCEEDS FOR 

4 LOBBYING ACTIVITIES. 

5 Section 7(a)(36)(F) of the Small Business Act (15 

6 U.S.C. 636(a)(36)(F)) is amended by adding at the end 

7 the following: 

8 ‘‘(vi) PROHIBITION.—None of the pro9 ceeds of a covered loan may be used for 

10 lobbying activities, as defined in section 3 

11 of the Lobbying Disclosure Act of 1995 (2 

12 U.S.C. 1602).’’. 

13 SEC. 115. EFFECTIVE DATE; APPLICABILITY. 

14 The amendments made to paragraph (36) of section 

15 7(a) of the Small Business Act (15 U.S.C. 636(a)) and 

16 title I of the CARES Act (Public Law 116–136) under 

17 this title shall be effective as if included in the CARES 

18 Act and shall apply to any loan made pursuant to section 

19 7(a)(36) of the Small Business Act (15 U.S.C. 

20 636(a)(36)). 

21 SEC. 116. BANKRUPTCY PROVISIONS. 

22 (a) IN GENERAL.—Section 364 of title 11, United 

23 States Code, is amended by adding at the end the fol24 lowing: 


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1 ‘‘(g)(1) The court, after notice and a hearing, may 

2 authorize a debtor in possession or a trustee that is au3 thorized to operate the business of the debtor under sec4 tion 1183, 1184, 1203, 1204, or 1304 of this title to ob5 tain a loan under section 7(a)(36) of the Small Business 

6 Act (15 U.S.C. 636(a)(36)), and such loan shall be treated 

7 as a debt to the extent the loan is not forgiven under sec8 tion 1106 of the CARES Act (15 U.S.C. 9005) with pri9 ority equal to a claim of the kind specified in subsection 

10 (c)(1) of this section. 

11 ‘‘(2) The trustee may incur debt described in para12 graph (1) notwithstanding any provision in a contract, 

13 prior order authorizing the trustee to incur debt under this 

14 section, prior order authorizing the trustee to use cash col15 lateral under section 363, or applicable law that prohibits 

16 the debtor from incurring additional debt. 

17 ‘‘(3) The court shall hold a hearing within 7 days 

18 after the filing and service of the motion to obtain a loan 

19 described in paragraph (1).’’. 

20 (b) ALLOWANCE OF ADMINISTRATIVE EXPENSES.— 

21 Section 503(b) of title 11, United States Code, is amend22 ed— 

23 (1) in paragraph (8)(B), by striking ‘‘and’’ at 

24 the end; 


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1 (2) in paragraph (9), by striking the period at 

2 the end and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(10) any debt incurred under section 

5 364(g)(1) of this title.’’. 

6 (c) CONFIRMATION OF PLAN FOR REORGANIZA7 TION.—Section 1191 of title 11, United States Code, is 

8 amended by adding at the end the following: 

9 ‘‘(f) SPECIAL PROVISION RELATED TO COVID–19 

10 PANDEMIC.—Notwithstanding section 1129(a)(9)(A) of 

11 this title and subsection (e) of this section, a plan that 

12 provides for payment of a claim of a kind specified in sec13 tion 503(b)(10) of this title may be confirmed under sub14 section (b) of this section if the plan proposes to make 

15 payments on account of such claim when due under the 

16 terms of the loan giving rise to such claim.’’. 

17 (d) CONFIRMATION OF PLAN FOR FAMILY FARMERS

18 AND FISHERMEN.—Section 1225 of title 11, United 

19 States Code, is amended by adding at the end the fol20 lowing: 

21 ‘‘(d) Notwithstanding section 1222(a)(2) of this title 

22 and subsection (b)(1) of this section, a plan that provides 

23 for payment of a claim of a kind specified in section 

24 503(b)(10) of this title may be confirmed if the plan pro25 poses to make payments on account of such claim when 


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1 due under the terms of the loan giving rise to such 

2 claim.’’. 

3 (e) CONFIRMATION OF PLAN FOR INDIVIDUALS.— 

4 Section 1325 of title 11, United States Code, is amended 

5 by adding at the end the following: 

6 ‘‘(d) Notwithstanding section 1322(a)(2) of this title 

7 and subsection (b)(1) of this section, a plan that provides 

8 for payment of a claim of a kind specified in section 

9 503(b)(10) of this title may be confirmed if the plan pro10 poses to make payments on account of such claim when 

11 due under the terms of the loan giving rise to such 

12 claim.’’. 

13 (f) EFFECTIVE DATE; SUNSET.— 

14 (1) EFFECTIVE DATE.—The amendments made 

15 by subsections (a) through (e) shall— 

16 (A) take effect on the date on which the 

17 Administrator of the Small Business Adminis18 tration submits to the Director of the Executive 

19 Office for United States Trustees a written de20 termination that, subject to satisfying any other 

21 eligibility requirements, any debtor in posses22 sion or trustee that is authorized to operate the 

23 business of the debtor under section 1183, 

24 1184, 1203, 1204, or 1304 of title 11, United 

25 States Code, would be eligible for a loan under 


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1 section 7(a)(36) of the Small Business Act (15 

2 U.S.C. 636(a)(36)); and 

3 (B) apply to any case pending on or com4 menced on or after the date described in sub5 paragraph (A). 

6 (2) SUNSET.— 

7 (A) IN GENERAL.—If the amendments 

8 made by this section take effect under para9 graph (1), effective on the date that is 2 years 

10 after the date of enactment of this Act— 

11 (i) section 364 of title 11, United 

12 States Code, is amended by striking sub13 section (g); 

14 (ii) section 503(b) of title 11, United 

15 States Code, is amended— 

16 (I) in paragraph (8)(B), by add17 ing ‘‘and’’ at the end; 

18 (II) in paragraph (9), by striking 

19 ‘‘; and’’ at the end and inserting a pe20 riod; and 

21 (III) by striking paragraph (10); 

22 (iii) section 1191 of title 11, United 

23 States Code, is amended by striking sub24 section (f); 


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1 (iv) section 1225 of title 11, United 

2 States Code, is amended by striking sub3 section (d); and 

4 (v) section 1325 of title 11, United 

5 States Code, is amended by striking sub6 section (d). 

7 (B) APPLICABILITY.—Notwithstanding the 

8 amendments made by subparagraph (A) of this 

9 paragraph, if the amendments made by sub10 sections (a), (b), (c), (d), and (e) take effect 

11 under paragraph (1) of this subsection, such 

12 amendments shall apply to any case under title 

13 11, United States Code, commenced before the 

14 date that is 2 years after the date of enactment 

15 of this Act. 

16 SEC. 117. CONFLICTS OF INTEREST. 

17 (a) DEFINITIONS.—In this section: 

18 (1) CONTROLLING INTEREST.—The term ‘‘con19 trolling interest’’ means owning, controlling, or hold20 ing not less than 20 percent, by vote or value, of the 

21 outstanding amount of any class of equity interest in 

22 an entity. 

23 (2) COVERED ENTITY.— 

24 (A) DEFINITION.—The term ‘‘covered enti25 ty’’ means an entity in which a covered indiVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 vidual directly or indirectly holds a controlling 

2 interest. 

3 (B) TREATMENT OF SECURITIES.—For the 

4 purpose of determining whether an entity is a 

5 covered entity, the securities owned, controlled, 

6 or held by 2 or more individuals who are related 

7 as described in paragraph (3)(B) shall be ag8 gregated. 

9 (3) COVERED INDIVIDUAL.—The term ‘‘covered 

10 individual’’ means— 

11 (A) the President, the Vice President, the 

12 head of an Executive department, or a Member 

13 of Congress; and 

14 (B) the spouse, child, son-in-law, or daugh15 ter-in-law, as determined under applicable com16 mon law, of an individual described in subpara17 graph (A). 

18 (4) EXECUTIVE DEPARTMENT.—The term ‘‘Ex19 ecutive department’’ has the meaning given the term 

20 in section 101 of title 5, United States Code. 

21 (5) MEMBER OF CONGRESS.—The term ‘‘Mem22 ber of Congress’’ means a Member of the Senate or 

23 House of Representatives, a Delegate to the House 

24 of Representatives, and the Resident Commissioner 

25 from Puerto Rico. 


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1 (6) EQUITY INTEREST.—The term ‘‘equity in2 terest’’ means— 

3 (A) a share in an entity, without regard to 

4 whether the share is— 

5 (i) transferable; or 

6 (ii) classified as stock or anything 

7 similar; 

8 (B) a capital or profit interest in a limited 

9 liability company or partnership; or 

10 (C) a warrant or right, other than a right 

11 to convert, to purchase, sell, or subscribe to a 

12 share or interest described in subparagraph (A) 

13 or (B), respectively. 

14 (b) REQUIREMENT.—The principal executive officer 

15 and the principal financial officer, or individuals per16 forming similar functions, of an entity seeking to enter 

17 a transaction made under paragraph (36), (37), or (38) 

18 of section 7(a) of the Small Business Act (15 U.S.C. 

19 636(a)), as added and amended by this title, shall, before 

20 that transaction is approved, disclose to the Administrator 

21 whether the entity is a covered entity. 

22 (c) APPLICABILITY.—The requirement under sub23 section (b)— 

24 (1) shall apply with respect to any transaction 

25 made under paragraph (36), (37), or (38) of section 


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1 7(a) of the Small Business Act (15 U.S.C. 636(a)), 

2 as added and amended by this title, on or after the 

3 date of enactment of this Act; and 

4 (2) shall not apply with respect to— 

5 (A) any transaction described in paragraph 

6 (1) that was made before the date of enactment 

7 of this Act; or 

8 (B) forgiveness under section 1106 of the 

9 CARES Act (15 U.S.C. 9005) or any other pro10 vision of law of any loan associated with any 

11 transaction described in paragraph (1) that was 

12 made before the date of enactment of this Act. 

13 TITLE II—SMALL BUSINESS 

14 PROGRAMS GENERALLY 

15 SEC. 121. SMALL BUSINESS INVESTMENT COMPANY PRO16 GRAM. 

17 (a) IN GENERAL.—Part A of title III of the Small 

18 Business Investment Act of 1958 (15 U.S.C. 681 et seq.) 

19 is amended— 

20 (1) in section 302(a) (15 U.S.C. 682(a))— 

21 (A) in paragraph (1)— 

22 (i) in subparagraph (A), by striking 

23 ‘‘or’’ at the end; 


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1 (ii) in subparagraph (B), by striking 

2 the period at the end and inserting ‘‘; or’’; 

3 and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(C) $20,000,000, adjusted every 5 years 

7 for inflation, with respect to each licensee au8 thorized or seeking authority to sell bonds to 

9 Administration as a participating investment 

10 company under section 321.’’; and 

11 (2) by adding at the end the following: 

12 ‘‘SEC. 321. SMALL BUSINESS AND DOMESTIC PRODUCTION 

13 RECOVERY INVESTMENT FACILITY. 

14 ‘‘(a) DEFINITIONS.—In this section: 

15 ‘‘(1) ELIGIBLE SMALL BUSINESS CONCERN.— 

16 The term ‘eligible small business concern’— 

17 ‘‘(A) means a small business concern 

18 that— 

19 ‘‘(i) meets the revenue reduction re20 quirements established by paragraph 

21 (37)(A)(vi)(I)(cc) of section 7(a) of the 

22 Small Business Act (15 U.S.C. 636(a)); 

23 ‘‘(ii) is a manufacturing business that 

24 is assigned a North American Industry 

25 Classification System code beginning with 


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1 31, 32, or 33 at the time at which the 

2 small business concern receives an invest3 ment from a participating investment com4 pany under the facility; or 

5 ‘‘(iii) is located in a small business 

6 low-income census tract; and 

7 ‘‘(B) does not include an entity described 

8 in paragraph (37)(A)(vi)(II) of such section 

9 7(a). 

10 ‘‘(2) FACILITY.—The term ‘facility’ means the 

11 facility established under subsection (b). 

12 ‘‘(3) FUND.—The term ‘Fund’ means the fund 

13 established under subsection (h). 

14 ‘‘(4) PARTICIPATING INVESTMENT COMPANY.— 

15 The term ‘participating investment company’ means 

16 a small business investment company approved 

17 under subsection (d) to participate in the facility. 

18 ‘‘(5) PROTE ́GE ́ INVESTMENT COMPANY.—The 

19 term ‘prote ́ge ́ investment company’ means a small 

20 business investment company that— 

21 ‘‘(A) is majority managed by new, inexperi22 enced, or otherwise underrepresented fund man23 agers; and 


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•S 4321 IS

1 ‘‘(B) elects and is selected by the Adminis2 tration to participate in the pathway-prote ́ge ́

3 program under subsection (g). 

4 ‘‘(6) SMALL BUSINESS CONCERN.—The term 

5 ‘small business concern’ has the meaning given the 

6 term in section 3(a) of the Small Business Act (15 

7 U.S.C. 632(a)). 

8 ‘‘(7) SMALL BUSINESS LOW-INCOME CENSUS

9 TRACT.—The term ‘small business low-income cen10 sus tract’ has the meaning given the term in section 

11 7(a)(38)(A) of the Small Business Act. 

12 ‘‘(b) ESTABLISHMENT.— 

13 ‘‘(1) FACILITY.—The Administrator shall estab14 lish and carry out a facility to improve the recovery 

15 of eligible small business concerns from the COVID– 

16 19 pandemic, increase resiliency in the manufac17 turing supply chain of eligible small business con18 cerns, and increase the economic development of 

19 small business low-income census tracts by providing 

20 financial assistance to participating investment com21 panies that facilitate equity financings to eligible 

22 small business concerns in accordance with this sec23 tion. 

24 ‘‘(2) ADMINISTRATION OF FACILITY.—The fa25 cility shall be administered by the Administrator actVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 ing through the Associate Administrator described in 

2 section 201. 

3 ‘‘(c) APPLICATIONS.— 

4 ‘‘(1) IN GENERAL.—Any small business invest5 ment company may submit to the Administrator an 

6 application to participate in the facility. 

7 ‘‘(2) REQUIREMENTS FOR APPLICATION.—An 

8 application to participate in the facility shall include 

9 the following: 

10 ‘‘(A) A business plan describing how the 

11 applicant intends to make successful equity in12 vestments in eligible small business concerns. 

13 ‘‘(B) Information regarding the relevant 

14 investment qualifications and backgrounds of 

15 the individuals responsible for the management 

16 of the applicant. 

17 ‘‘(C) A description of the extent to which 

18 the applicant meets the selection criteria under 

19 subsection (d)(2). 

20 ‘‘(3) EXCEPTIONS TO APPLICATION FOR NEW

21 LICENSEES.—Not later than 90 days after the date 

22 of enactment of this section, the Administrator shall 

23 reduce requirements for applicants applying to oper24 ate as a participating investment company under 

25 this section in order to encourage the participation 


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1 of new small business investment companies in the 

2 facility under this section, which may include the re3 quirements established under part 107 of title 13, 

4 Code of Federal Regulations, or any successor regu5 lation, relating to— 

6 ‘‘(A) the approval of initial management 

7 expenses; 

8 ‘‘(B) the management ownership diversity 

9 requirement; 

10 ‘‘(C) the disclosure of general compen11 satory practices and fee structures; or 

12 ‘‘(D) any other requirement that the Ad13 ministrator determines to be an obstacle to 

14 achieving the purposes described in this para15 graph. 

16 ‘‘(d) SELECTION OF PARTICIPATING INVESTMENT

17 COMPANIES.— 

18 ‘‘(1) DETERMINATION.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 paragraph (3), not later than 60 days after the 

21 date on which the Administrator receives an ap22 plication under subsection (c), the Adminis23 trator shall— 


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1 ‘‘(i) make a final determination to ap2 prove or disapprove such applicant to par3 ticipate in the facility; and 

4 ‘‘(ii) transmit the determination to the 

5 applicant in writing. 

6 ‘‘(B) COMMITMENT AMOUNT.—Except as 

7 provided in paragraph (3), at the time of ap8 proval of an applicant, the Administrator shall 

9 make a determination of the amount of the 

10 commitment that may be awarded to the appli11 cant under this section. 

12 ‘‘(2) SELECTION CRITERIA.—In making a de13 termination under paragraph (1), the Administrator 

14 shall consider— 

15 ‘‘(A) the probability that the investment 

16 strategy of the applicant will successfully repay 

17 any financial assistance provided by the Admin18 istration, including the probability of a return 

19 significantly in excess thereof; 

20 ‘‘(B) the probability that the investments 

21 made by the applicant will— 

22 ‘‘(i) provide capital to eligible small 

23 business concerns; or 

24 ‘‘(ii) create or preserve jobs in the 

25 United States; 


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1 ‘‘(C) the probability that the applicant will 

2 meet the objectives in the business plan of the 

3 applicant, including the financial goals, and, if 

4 applicable, the pathway-prote ́ge ́ program in ac5 cordance with subsection (g); and 

6 ‘‘(D) the probability that the applicant will 

7 assist eligible small business concerns in achiev8 ing profitability. 

9 ‘‘(3) APPROVAL OF PARTICIPATING INVEST10 MENT COMPANIES.— 

11 ‘‘(A) PROVISIONAL APPROVAL.— 

12 ‘‘(i) IN GENERAL.—Notwithstanding 

13 paragraph (1), with respect to an applica14 tion submitted by an applicant to operate 

15 as a participating investment company 

16 under this section, the Administrator may 

17 provide provisional approval for the appli18 cant in lieu of a final determination of ap19 proval and determination of the amount of 

20 the commitment under that paragraph. 

21 ‘‘(ii) PURPOSE.—The purpose of a 

22 provisional approval under clause (i) is 

23 to— 

24 ‘‘(I) encourage applications from 

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1 ment mandate from the committed 

2 private market capital of the invest3 ment company that does not conform 

4 to the requirements described in this 

5 section at the time of application; 

6 ‘‘(II) allow the applicant to more 

7 effectively raise capital commitments 

8 in the private markets by referencing 

9 the intent of the Administrator to 

10 award the applicant a commitment; 

11 and 

12 ‘‘(III) allow the applicant to more 

13 precisely request the desired amount 

14 of commitment pending the securing 

15 of capital from private market inves16 tors. 

17 ‘‘(iii) LIMIT ON PERIOD OF THE

18 TIME.—The period between a provisional 

19 approval under clause (i) and the final de20 termination of approval under paragraph 

21 (1) shall not exceed 12 months. 

22 ‘‘(e) COMMITMENTS AND SBIC BONDS.— 

23 ‘‘(1) IN GENERAL.—The Administrator may, 

24 out of amounts available in the Fund, purchase or 

25 commit to purchase from a participating investment 


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1 company 1 or more accruing bonds that include eq2 uity features as described in this subsection. 

3 ‘‘(2) BOND TERMS.—A bond purchased by the 

4 Administrator from a participating investment com5 pany under this subsection shall have the following 

6 terms and conditions: 

7 ‘‘(A) TERM AND INTEREST.— 

8 ‘‘(i) IN GENERAL.—The bond shall be 

9 issued for a term of not less than 15 years 

10 and shall bear interest at a rate deter11 mined by the Administrator of not more 

12 than 2 percent. 

13 ‘‘(ii) ACCRUAL OF INTEREST.—Inter14 est on the bond shall accrue and shall be 

15 payable in accordance with subparagraph 

16 (D). 

17 ‘‘(iii) PREPAYMENT.—The bond shall 

18 be prepayable without penalty after the 

19 end of the 1-year period beginning on the 

20 date on which the bond was purchased. 

21 ‘‘(B) PROFITS.— 

22 ‘‘(i) IN GENERAL.—The Administra23 tion shall be entitled to receive a share of 

24 the profits net of any profit sharing per25 formance compensation of the participating 


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1 investment company equal to the quotient 

2 obtained by dividing— 

3 ‘‘(I) one-third of the commitment 

4 that the participating investment com5 pany is approved for under subsection 

6 (d); by 

7 ‘‘(II) the commitment approved 

8 under subsection (d) plus the regu9 latory capital of the participating in10 vestment company at the time of ap11 proval under that subsection. 

12 ‘‘(ii) DETERMINATION OF PERCENT13 AGE.—The share to which the Administra14 tion is entitled under clause (i)— 

15 ‘‘(I) shall be determined at the 

16 time of approval under subsection (d); 

17 and 

18 ‘‘(II) without the approval of the 

19 Administration, shall not be revised, 

20 including to reflect subsequent dis21 tributions of profits, returns of cap22 ital, or repayments of bonds, or other23 wise. 

24 ‘‘(C) PROFIT SHARING PERFORMANCE

25 COMPENSATION.— 


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1 ‘‘(i) RECEIPT BY ADMINISTRATION.— 

2 The Administration shall receive a share of 

3 profits of not more than 2 percent, which 

4 shall be deposited into the Fund and be 

5 available to make commitments under this 

6 subsection. 

7 ‘‘(ii) RECEIPT BY MANAGERS.—The 

8 managers of the participating investment 

9 company may receive a maximum profit 

10 sharing performance compensation of 25 

11 percent minus the share of profits paid to 

12 the Administration under clause (i). 

13 ‘‘(D) PROHIBITION ON DISTRIBUTIONS.— 

14 No distributions on capital, including profit dis15 tributions, shall be made by the participating 

16 investment company to the investors or man17 agers of the participating investment company 

18 until the Administration has received payment 

19 of all accrued interest on the bond committed 

20 under this section. 

21 ‘‘(E) REPAYMENT OF PRINCIPAL.—Except 

22 as described in subparagraph (F), repayments 

23 of principal of the bond of a participating in24 vestment company shall be— 


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1 ‘‘(i) made at the same time as returns 

2 of private capital; and 

3 ‘‘(ii) in amounts equal to the pro rata 

4 share of the Administration of the total 

5 amount being repaid or returned at such 

6 time. 

7 ‘‘(F) LIQUIDATION OR DEFAULT.—Upon 

8 any liquidation event or default, as defined by 

9 the Administration, any unpaid principal or ac10 crued interest on the bond shall— 

11 ‘‘(i) have a priority over all equity of 

12 the participating investment company; and 

13 ‘‘(ii) be paid before any return of eq14 uity or any other distributions to the inves15 tors or managers of the participating in16 vestment company. 

17 ‘‘(3) AMOUNT OF COMMITMENTS AND PUR18 CHASES.— 

19 ‘‘(A) MAXIMUM AMOUNT.—The maximum 

20 amount of outstanding bonds and commitments 

21 to purchase bonds for any participating invest22 ment company under the facility shall be the 

23 lesser of— 


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1 ‘‘(i) twice the amount of the regu2 latory capital of the participating invest3 ment company; or 

4 ‘‘(ii) $200,000,000. 

5 ‘‘(4) COMMITMENT PROCESS.—Commitments by 

6 the Administration to purchase bonds under the fa7 cility shall remain available to be sold by a partici8 pating investment company until the end of the 

9 fourth fiscal year following the year in which the 

10 commitment is made, subject to review and approval 

11 by the Administration based on regulatory compli12 ance, financial status, change in management, devi13 ation from business plan, and such other limitations 

14 as may be determined by the Administration by reg15 ulation or otherwise. 

16 ‘‘(5) COMMITMENT CONDITIONS.— 

17 ‘‘(A) IN GENERAL.—As a condition of re18 ceiving a commitment under the facility, not 

19 less than 50 percent of amounts invested by the 

20 participating investment company shall be in21 vested in eligible small business concerns. 

22 ‘‘(B) EXAMINATIONS.—In addition to the 

23 matters set forth in section 310(c), the Admin24 istration shall examine each participating in25 vestment company in such detail so as to deterVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 mine whether the participating investment com2 pany has complied with the requirements under 

3 this subsection. 

4 ‘‘(f) DISTRIBUTIONS AND FEES.— 

5 ‘‘(1) DISTRIBUTION REQUIREMENTS.— 

6 ‘‘(A) DISTRIBUTIONS.—As a condition of 

7 receiving a commitment under the facility, a 

8 participating investment company shall make 

9 all distributions to the Administrator in the 

10 same form and in a manner as are made to in11 vestors, or otherwise at a time and in a manner 

12 consistent with regulations or policies of the 

13 Administration. 

14 ‘‘(B) ALLOCATIONS.—A participating in15 vestment company shall make allocations of in16 come, gain, loss, deduction, and credit to the 

17 Administrator with respect to any outstanding 

18 bonds as if the Administrator were an investor. 

19 ‘‘(2) FEES.—The Administrator may not 

20 charge fees for participating investment companies 

21 other than examination fees that are consistent with 

22 the license of the participating investment company. 

23 ‘‘(3) BIFURCATION.—Losses on bonds issued by 

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1 set by fees or any other charges on debenture small 

2 business investment companies. 

3 ‘‘(g) PROTE ́GE ́ PROGRAM.—The Administrator shall 

4 establish a pathway-prote ́ge ́ program in which a prote ́ge ́

5 investment company may receive technical assistance and 

6 program support from a participating investment company 

7 on a voluntary basis and without penalty for non-partici8 pation. 

9 ‘‘(h) LOSS LIMITING FUND.— 

10 ‘‘(1) IN GENERAL.—There is established in the 

11 Treasury a fund for making commitments and pur12 chasing bonds with equity features under the facility 

13 and receiving capital returned by participating in14 vestment companies. 

15 ‘‘(2) USE OF FUNDS.—Amounts appropriated 

16 to the Fund or deposited in the Fund under para17 graph (3) shall be available to the Administrator, 

18 without further appropriation, for making commit19 ments and purchasing bonds under the facility and 

20 expenses and payments, excluding administrative ex21 penses, relating to the operations of the Adminis22 trator under the facility. 

23 ‘‘(3) DEPOSITING OF AMOUNTS.— 

24 ‘‘(A) IN GENERAL.—All amounts received 

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1 vestment company relating to the facility, in2 cluding any moneys, property, or assets derived 

3 by the Administrator from operations in con4 nection with the facility, shall be deposited in 

5 the Fund. 

6 ‘‘(B) PERIOD OF AVAILABILITY.—Amounts 

7 deposited under subparagraph (A) shall remain 

8 available until expended. 

9 ‘‘(i) APPLICATION OF OTHER SECTIONS.—To the ex10 tent not inconsistent with requirements under this section, 

11 the Administrator may apply sections 309, 311, 312, 313, 

12 and 314 to activities under this section and an officer, di13 rector, employee, agent, or other participant in a partici14 pating investment company shall be subject to the require15 ments under such sections. 

16 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

17 is authorized to be appropriated for the first fiscal year 

18 beginning after the date of enactment of this part 

19 $10,000,000,000 to carry out the facility. Amounts appro20 priated pursuant to this subsection shall remain available 

21 until the end of the second fiscal year beginning after the 

22 date of enactment of this section.’’. 

23 (b) APPROVAL OF BANK-OWNED, NON-LEVERAGED

24 APPLICANTS.—Section 301(c)(2) of the Small Business 


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1 Investment Act of 1958 (15 U.S.C. 681(c)(2)) is amend2 ed— 

3 (1) in subparagraph (B), in the matter pre4 ceding clause (i), by striking ‘‘Within’’ and inserting 

5 ‘‘Except as provided in subparagraph (C), within’’; 

6 and 

7 (2) by adding at the end the following: 

8 ‘‘(C) EXCEPTION FOR BANK-OWNED, NON9 LEVERAGED APPLICANTS.—Notwithstanding 

10 subparagraph (B), not later than 45 days after 

11 the date on which the Administrator receives a 

12 completed application submitted by a bank13 owned, non-leveraged applicant in accordance 

14 with this subsection and in accordance with 

15 such requirements as the Administrator may 

16 prescribe by regulation, the Administrator 

17 shall— 

18 ‘‘(i) review the application in its en19 tirety; and 

20 ‘‘(ii)(I) approve the application and 

21 issue a license for such operation to the 

22 applicant if the requirements of this sec23 tion are satisfied; or 


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1 ‘‘(II) disapprove the application and 

2 notify the applicant in writing of the dis3 approval.’’. 

4 (c) ELECTRONIC SUBMISSIONS.—Part A of title III 

5 of the Small Business Investment Act of 1958 (15 U.S.C. 

6 681 et seq.), as amended by subsection (a) of this section, 

7 is amended by adding at the end the following: 

8 ‘‘SEC. 322. ELECTRONIC SUBMISSIONS. 

9 ‘‘The Administration shall permit any document sub10 mitted under this title, or pursuant to a regulation car11 rying out this title, to be submitted electronically, includ12 ing by permitting an electronic signature for any signature 

13 that is required on such a document.’’. 

14 TITLE III—APPROPRIATIONS 

15 SEC. 131. COMMITMENT AUTHORITY AND APPROPRIA16 TIONS. 

17 (a) COMMITMENT AUTHORITY.— 

18 (1) CARES ACT AMENDMENTS.—Section 

19 1102(b) of the CARES Act (Public Law 116–136) 

20 is amended— 

21 (A) in paragraph (1)— 

22 (i) in the paragraph heading, by in23 serting ‘‘AND SECOND DRAW’’ after 

24 ‘‘PPP’’; 


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1 (ii) by striking ‘‘August 8, 2020’’ and 

2 inserting ‘‘December 31, 2020’’; 

3 (iii) by striking ‘‘paragraph (36)’’ and 

4 inserting ‘‘paragraphs (36) and (37)’’; and 

5 (iv) by striking ‘‘$659,000,000,000’’ 

6 and inserting ‘‘$749,000,000,000’’; and 

7 (B) by amending paragraph (2) to read as 

8 follows: 

9 ‘‘(2) OTHER 7(A) LOANS.—During fiscal year 

10 2020, the amount authorized for commitments for 

11 section 7(a) of the Small Business Act (15 U.S.C. 

12 636(a)) under the heading ‘Small Business Adminis13 tration—Business Loans Program Account’ in the 

14 Financial Services and General Government Appro15 priations Act, 2020 (division C of Public Law 116– 

16 193) shall apply with respect to any commitments 

17 under such section 7(a) other than under para18 graphs (36), (37), and (38) of such section 7(a).’’. 

19 (2) RECOVERY SECTOR LOANS.—During the pe20 riod beginning on the date of enactment of this Act 

21 and ending on December 31, 2020, the amount au22 thorized for commitments under paragraph (38) of 

23 section 7(a) of the Small Business Act (15 U.S.C. 

24 636(a)), as added by this title, shall be 

25 $100,000,000,000. 


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1 (b) DIRECT APPROPRIATIONS.— 

2 (1) RESCISSION.—With respect to unobligated 

3 balances under the heading ‘‘ ‘Small Business Ad4 ministration—Business Loans Program Account, 

5 CARES Act’’ as of the day before the date of enact6 ment of this Act, $100,000,000,000 shall be re7 scinded and deposited into the general fund of the 

8 Treasury. 

9 (2) NEW DIRECT APPROPRIATIONS.—There is 

10 appropriated, out of amounts in the Treasury not 

11 otherwise appropriated, for the fiscal year ending 

12 September 30, 2020— 

13 (A) to remain available until September 

14 30, 2021, for additional amounts— 

15 (i) $190,000,000,000 under the head16 ing ‘‘Small Business Administration— 

17 Business Loans Program Account, CARES 

18 Act’’ for the cost of guaranteed loans as 

19 authorized under paragraph (36) and (37) 

20 of section 7(a) of the Small Business Act 

21 (15 U.S.C. 636(a)), as amended and added 

22 by this Act; and 

23 (ii) $57,700,000,000 under the head24 ing ‘‘Small Business Administration—Re25 covery Sector Loans’’ for the cost of guarVerDate Sep 11 2014 01:21 Jul 28, 2020 Jkt 099200 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 E:\BILLS\S4321.IS S4321

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1 anteed loans as authorized under para2 graph (38) of section 7(a) of the Small 

3 Business Act (15 U.S.C. 636(a)), as added 

4 by this Act; and 

5 (B) to remain available until September 

6 30, 2023, $10,000,000,000 under the heading 

7 ‘‘Small Business Administration—SBIC’’ to 

8 carry out part D of title III of the Small Busi9 ness Investment Act of 1958 (15 U.S.C. 681 et 

10 seq.), as added by this Act. 

11 (c) EMERGENCY DESIGNATION.— 

12 (1) IN GENERAL.—The amounts provided under 

13 this section are designated as an emergency require14 ment pursuant to section 4(g) of the Statutory Pay15 As-You-Go Act of 2010 (2 U.S.C. 933(g)). 

16 (2) DESIGNATION IN SENATE.—In the Senate, 

17 this section is designated as an emergency require18 ment pursuant to section 4112(a) of H. Con. Res. 

19 71 (115th Congress), the concurrent resolution on 

20 the budget for fiscal year 2018. 

Æ 


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