Health and Fitness Recovery Act of 2020

To establish a $30,000,000,000 Health Club Recovery Fund to provide structured relief to health and fitness service establishments through December 31, 2020, and for other purposes. 1. Short title This Act may be cited as the Health and Fitness Recovery Act of 2020 2. Definitions In this Act: (1) Affiliated business The term affiliated business (2) Covered period The term covered period (3) Eligible entity The term eligible entity (A) subject to subparagraph (B), means a health club, health or fitness studio, fitness center, gym, or fitness or health spa; and (B) does not include an entity that is, or is part of, a governmental facility. (4) Fund The term Fund (5) Payroll costs The term payroll costs 15 U.S.C. 636(a)(36)(A) (6) Secretary The term Secretary 3. Health Club Recovery Fund (a) In general There is established in the Treasury of the United States a fund to be known as the Health Club Recovery Fund. (b) Appropriations (1) In general There is appropriated to the Fund, out of amounts in the Treasury not otherwise appropriated, $30,000,000,000, to remain available until December 31, 2020. (2) Remainder to Treasury Any amounts remaining in the Fund after December 31, 2020, shall be deposited in the general fund of the Treasury. (c) Use of funds The Secretary shall use amounts in the Fund to make grants described in section 4. 4. Health club recovery grants (a) In general The Secretary shall award grants to eligible entities to provide relief to such entities during the COVID–19 pandemic. (b) Application (1) In general An eligible entity desiring a grant under this section shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (2) Certification An eligible entity applying for a grant under this section shall make a good faith certification— (A) that the uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity; (B) acknowledging that funds will be used to retain workers and maintain payroll or for other allowable expenses described in subsection (e); (C) that the eligible entity does not have an application pending for a grant under subsection (a)(36) or (b)(2) of section 7 of the Small Business Act ( 15 U.S.C. 636 (D) that, during the covered period, the eligible entity has not received amounts under subsection (a)(36) or (b)(2) of section 7 of the Small Business Act ( 15 U.S.C. 636 (3) Hold harmless The Secretary shall not reduce the amount of a grant to an eligible entity under this section, or otherwise penalize such eligible entity, on the basis of the eligible entity having failed to hire or rehire employees contrary to assurances made by the eligible entity in its grant application, so long as the eligible entity is able to document— (A) an inability to rehire individuals who were employees of the eligible entity on February 15, 2020; and (B) an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020. (c) Priority in awarding grants (1) In general Subject to paragraph (2), the Secretary shall award grants to eligible entities under subsection (a) in the order in which completed applications are received by the Secretary in accordance with this section. (2) Priority During the initial 14-day period in which the Secretary awards grants under this section, the Secretary shall— (A) prioritize awarding grants to eligible entities serving marginalized and underrepresented communities, with a focus on women-, veteran-, and minority-owned and operated eligible entities serving such communities; and (B) only award grants to eligible entities with annual revenues of less than $1,500,000. (d) Grant amount (1) Aggregate maximum amount The aggregate amount of grants made to an eligible entity and any affiliate businesses of the eligible entity under this section shall not exceed the lesser of— (A) $10,000,000; or (B) 10 percent of the sum of the annual revenues of the eligible entity and all affiliate businesses of the eligible entity for the calendar year preceding the award of the grant. (2) Determination of grant amount (A) In general The amount of a grant made to an eligible entity under this section shall be based on the difference in revenues or estimated revenues of the eligible entity during a calendar quarter in 2020 selected by the eligible entity as compared to 95 percent of the revenues of the eligible entity in the same calendar quarter in 2019. (B) Verification An eligible entity shall submit to the Secretary such revenue verification documentation as the Secretary may require to determine the amount of a grant under subparagraph (A). (C) Repayment Any amount of a grant made under this section to an eligible entity based on estimated revenues in a calendar quarter in 2020 that is above the actual revenues of the eligible entity during that calendar quarter shall be converted to a loan that has— (i) an interest rate of 1 percent; and (ii) a maturity date of 10 years beginning on January 1, 2021. (3) No duplication of benefits An eligible entity that received a loan under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) (4) Limitation An eligible entity may not receive more than 1 grant under this section. (e) Use of funds (1) Allowable uses During the covered period, an eligible entity that receives a grant under this section may use the grant funds for— (A) payroll costs; (B) payments of principal or interest on any mortgage obligation; (C) rent payments, including rent under a lease agreement; (D) utilities; (E) maintenance expenses, including construction or reconfiguration to accommodate social distancing requirements; (F) supplies, including protective equipment and cleaning materials; (G) debt obligations to suppliers that were incurred before the covered period; and (H) any other expenses that the Secretary determines to be essential to maintaining the eligible entity. (2) Returning funds If an eligible entity that receives a grant under this section permanently ceases operations on or before December 31, 2020, the eligible entity shall return to the Treasury any funds that the eligible entity received through the grant and did not use for the allowable expenses under paragraph (1). (3) Conversion to loan Any grant amounts received by an eligible entity under this section that are unused after December 31, 2020, shall be immediately converted to a loan with— (A) an interest rate of 1 percent; and (B) a maturity date of 10 years. (f) Taxability For purposes of the Internal Revenue Code of 1986— (1) the amount of a grant awarded to an eligible entity under this section shall be excluded from the gross income of the eligible entity; (2) no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1); and (3) an eligible entity that receives a grant under this section shall not be eligible for the credit described in section 2301 of the CARES Act ( Public Law 116–136 (g) Regulations Not later than 15 days after the date of enactment of this Act, the Secretary shall issue regulations to carry out this section without regard to the notice and comment requirements under section 553 of title 5, United States Code. (h) Appropriations for staffing and administrative expenses (1) In general There is appropriated to the Secretary, out of amounts in the Treasury not otherwise appropriated, $200,000,000, to remain available until December 31, 2020, for staffing and administrative expenses related to administering grants awarded under this section. (2) Set aside Of amounts appropriated under paragraph (1), $60,000,000 shall be allocated for outreach to traditionally marginalized and underrepresented communities, with a focus on women-, veteran-, and minority-owned and operated eligible entities, including the creation of a resource center targeted toward these communities. 5. Emergency designation (a) In general The amounts provided by this Act are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) (b) Designation in Senate In the Senate, this Act is designated as an emergency requirement pursuant to section 4112(a) of H. Con. Res. 71 (115th Congress), the concurrent resolution on the budget for fiscal year 2018.

Summary: Health and Fitness Recovery Act of 2020 This bill establishes through December 31, 2020, and provides funding for the Health Club Recovery Fund, from which the Department of the Treasury shall make grants to eligible health and fitness facilities to provide relief during the COVID-19 (i.e.,coronavirus disease 2019) pandemic. For the grant program's initial period, Treasury must (1) prioritize awarding grants to entities serving marginalized and underrepresented communities, and (2) only award grants to eligible health and fitness facilities with annual revenues of less than $1.5 million. Further, an entity that received a loan under the Paycheck Protection Program established to support small businesses in response to COVID-19 may not apply for or use grant amounts for the same expenses for which it received the paycheck protection loan. Allowable uses for grant amounts include payroll costs, mortgage or rent payments, utilities, and maintenance expenses.