Seasonal Business PPP Parity Act
Bill: S.1140 | Sponsor: Sen. King, Angus S., Jr. (I-ME)
Policy area: Commerce

Summary:
Seasonal Business PPP Parity Act
This bill increases the maximum loan amount for second draw loans under the Paycheck Protection Program, which was established to support small businesses in response to the COVID-19 pandemic.
Currently, program participants may receive second draw loans of up to $2 million. Under the program, certain small businesses (e.g., seasonal businesses) were eligible to receive increased amounts for first draw loans based on a revised calculation applicable to those businesses. However, a number of such businesses applied for and received loan forgiveness prior to the application of this revised calculation, which resulted in their receiving a lower amount than that to which they were entitled.
The bill allows businesses that received forgiveness for their first draw loan prior to the implementation of the revised calculation to take advantage of the new calculation in order to receive a larger amount for their second draw loan in addition to the standard loan amount of up to $2 million.

To amend the Small Business Act to alter the maximum amount of a second 
    draw loan under the Paycheck Protection Program, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Seasonal Business PPP Parity Act''.

SEC. 2. MAXIMUM AMOUNT OF SECOND DRAW LOAN.

    (a) In General.--Section 7(a)(37) of the Small Business Act (15 
U.S.C. 636(a)(37)) is amended by striking subparagraph (C) and 
inserting the following:
                    ``(C) Maximum loan amount.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subparagraph, the maximum 
                        amount of a covered loan made to an eligible 
                        entity is the sum of--
                                    ``(I) the lesser of--
                                            ``(aa) the product obtained 
                                        by multiplying--

                                                    ``(AA) at the 
                                                election of the 
                                                eligible entity, the 
                                                average total monthly 
                                                payment for payroll 
                                                costs incurred or paid 
                                                by the eligible entity 
                                                during the 1-year 
                                                period before the date 
                                                on which the loan is 
                                                made or calendar year 
                                                2019; by

                                                    ``(BB) 2.5; or

                                            ``(bb) $2,000,000; plus
                                    ``(II) with respect to a loan 
                                received under paragraph (36) for which 
                                the eligible entity received 
                                forgiveness under section 1106 of the 
                                CARES Act (as in effect before the date 
                                of enactment of this paragraph), the 
                                amount of an increase with respect to 
                                that loan that the eligible entity 
                                would have been eligible to receive 
                                under section 312 of the Economic Aid 
                                to Hard-Hit Small Businesses, 
                                Nonprofits, and Venues Act (title III 
                                of division N of Public Law 116-260) if 
                                the eligible entity had not received 
                                such forgiveness.
                            ``(ii) Seasonal employers.--The maximum 
                        amount of a covered loan made to an eligible 
                        entity that is a seasonal employer is the sum 
                        of--
                                    ``(I) the lesser of--
                                            ``(aa) the product obtained 
                                        by multiplying--

                                                    ``(AA) at the 
                                                election of the 
                                                eligible entity, the 
                                                average total monthly 
                                                payments for payroll 
                                                costs incurred or paid 
                                                by the eligible entity 
                                                for any 12-week period 
                                                between February 15, 
                                                2019 and February 15, 
                                                2020; by

                                                    ``(BB) 2.5; or

                                            ``(bb) $2,000,000; plus
                                    ``(II) with respect to a loan 
                                received under paragraph (36) for which 
                                the seasonal employer received 
                                forgiveness under section 1106 of the 
                                CARES Act (as in effect before the date 
                                of enactment of this paragraph), the 
                                amount of an increase with respect to 
                                that loan that the seasonal employer 
                                would have been eligible to receive 
                                under section 312 of the Economic Aid 
                                to Hard-Hit Small Businesses, 
                                Nonprofits, and Venues Act (title III 
                                of division N of Public Law 116-260) if 
                                the seasonal employer had not received 
                                such forgiveness.
                            ``(iii) New entities.--The maximum amount 
                        of a covered loan made to an eligible entity 
                        that did not exist during the 1-year period 
                        preceding February 15, 2020 is the sum of--
                                    ``(I) the lesser of--
                                            ``(aa) the product obtained 
                                        by multiplying--

                                                    ``(AA) the quotient 
                                                obtained by dividing 
                                                the sum of the total 
                                                monthly payments by the 
                                                eligible entity for 
                                                payroll costs paid or 
                                                incurred by the 
                                                eligible entity as of 
                                                the date on which the 
                                                eligible entity applies 
                                                for the covered loan by 
                                                the number of months in 
                                                which those payroll 
                                                costs were paid or 
                                                incurred; by

                                                    ``(BB) 2.5; or

                                            ``(bb) $2,000,000; plus
                                    ``(II) with respect to a loan 
                                received under paragraph (36) for which 
                                the eligible entity received 
                                forgiveness under section 1106 of the 
                                CARES Act (as in effect before the date 
                                of enactment of this paragraph), the 
                                amount of an increase with respect to 
                                that loan that the eligible entity 
                                would have been eligible to receive 
                                under section 312 of the Economic Aid 
                                to Hard-Hit Small Businesses, 
                                Nonprofits, and Venues Act (title III 
                                of division N of Public Law 116-260) if 
                                the eligible entity had not received 
                                such forgiveness.
                            ``(iv) NAICS 72 entities.--The maximum 
                        amount of a covered loan made to an eligible 
                        entity that is assigned a North American 
                        Industry Classification System code beginning 
                        with 72 at the time of disbursal is the sum 
                        of--
                                    ``(I) the lesser of--
                                            ``(aa) the product obtained 
                                        by multiplying--

                                                    ``(AA) at the 
                                                election of the 
                                                eligible entity, the 
                                                average total monthly 
                                                payment for payroll 
                                                costs incurred or paid 
                                                by the eligible entity 
                                                during the 1-year 
                                                period before the date 
                                                on which the loan is 
                                                made or calendar year 
                                                2019; by

                                                    ``(BB) 3.5; or

                                            ``(bb) $2,000,000; plus
                                    ``(II) with respect to a loan 
                                received under paragraph (36) for which 
                                the eligible entity received 
                                forgiveness under section 1106 of the 
                                CARES Act (as in effect before the date 
                                of enactment of this paragraph), the 
                                amount of an increase with respect to 
                                that loan that the eligible entity 
                                would have been eligible to receive 
                                under section 312 of the Economic Aid 
                                to Hard-Hit Small Businesses, 
                                Nonprofits, and Venues Act (title III 
                                of division N of Public Law 116-260) if 
                                the eligible entity had not received 
                                such forgiveness.''.
    (b) Effective Date; Applicability.--The amendments made by 
subsection (a) shall be effective as if included in the Economic Aid to 
Hard-Hit Small Businesses, Nonprofits, and Venues Act (title III of 
division N of Public Law 116-260) and shall apply to any loan made 
pursuant to section 7(a)(37) of the Small Business Act (15 U.S.C. 
636(a)(37)) before, on, or after the date of enactment of this Act.
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