A bill to modify the maximum paycheck protection program loan amount for farmers and ranchers, sole proprietors, independent contractors, and self-employed individuals.
Bill: S.1232 | Sponsor: Sen. Baldwin, Tammy (D-WI)
Policy area: Commerce

Summary:
This bill modifies the calculation of loan amounts for partnerships with no employees (e.g., self-employed farmers) under the Paycheck Protection Program, which was established to support small businesses in response to COVID-19.
Specifically, the bill allows such individuals to apply for a loan in the amount of the difference between their gross and net income loan amounts, even if they have already received a loan based on their net income and received forgiveness for that loan.

To modify the maximum paycheck protection program loan amount for 
 farmers and ranchers, sole proprietors, independent contractors, and 
                       self-employed individuals.

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

SECTION 1. CALCULATION OF MAXIMUM PPP LOAN AMOUNT.

    (a) In General.--Section 7(a)(36)(V) of the Small Business Act (15 
U.S.C. 636(a)(36)(V)) is amended--
            (1) by striking clause (i) and inserting the following:
                            ``(i) Definition.--In this subparagraph, 
                        the term `covered recipient' means an eligible 
                        recipient that--
                                    ``(I)(aa) operates as a sole 
                                proprietorship, as an independent 
                                contractor, or as a partnership with 
                                gross farming income from self-
                                employment; or
                                    ``(bb) is an eligible self-employed 
                                individual;
                                    ``(II) reports farm income or 
                                expenses on a Schedule F (or any 
                                equivalent successor schedule); and
                                    ``(III) was in business as of 
                                February 15, 2020.''; and
            (2) by striking clause (iv) and inserting the following:
                            ``(iv) Partnerships with no employees.--
                        With respect to a partnership without 
                        employees, the maximum covered loan amount 
                        shall be equal to the sum of--
                                    ``(I) the product obtained by 
                                multiplying--
                                            ``(aa) the gross income, 
                                        limited to the amount 
                                        attributable to general 
                                        partners as determined by the 
                                        sum of their distributive 
                                        shares of gross farming income 
                                        from self-employment, that is 
                                        not more than $100,000 per 
                                        partner, and no more than 
                                        $500,000 in total, divided by 
                                        12; and
                                            ``(bb) 2.5; and
                                    ``(II) the outstanding amount of a 
                                loan under subsection (b)(2) that was 
                                made during the period beginning on 
                                January 31, 2020 and ending on April 3, 
                                2020 that the borrower intends to 
                                refinance under the covered loan, not 
                                including any amount of any advance 
                                under the loan that is not required to 
                                be repaid.
                            ``(v) Recalculation.--
                                    ``(I) In general.--A lender that 
                                made a covered loan before the date of 
                                enactment of the PPP Flexibility for 
                                Farmers, Ranchers, and the Self-
                                Employed Act may, at the request of the 
                                covered recipient--
                                            ``(aa) recalculate the 
                                        maximum loan amount applicable 
                                        to that covered loan based on 
                                        the formula described in clause 
                                        (ii), (iii), or (iv), as 
                                        applicable, if doing so would 
                                        result in a larger covered loan 
                                        amount; and
                                            ``(bb) provide the covered 
                                        recipient with additional 
                                        covered loan amounts based on 
                                        that recalculation.
                                    ``(II) Loan limitation.--For 
                                purposes of receiving a recalculated 
                                loan amount related to a covered loan 
                                under subclause (I), paragraph (37)(F) 
                                shall not apply.
                                    ``(III) Effect of forgiveness.--
                                Subject to rules issued by the 
                                Administrator, a covered recipient 
                                shall be eligible to submit a request 
                                for a recalculated loan amount related 
                                to a covered loan under subclause (I) 
                                without regard to whether the covered 
                                recipient has sought or received 
                                forgiveness with respect to the 
                                applicable covered loan under section 
                                7A.
                                    ``(IV) Forgiveness of recalculated 
                                loan amount.--For purposes of this 
                                subparagraph, as soon as is practicable 
                                upon expenditure of additional covered 
                                loan amounts provided under subclause 
                                (I)--
                                            ``(aa) an eligible 
                                        recipient shall attest to 
                                        compliance with applicable 
                                        requirements under this 
                                        paragraph; and
                                            ``(bb) the additional 
                                        covered loan amounts shall be 
                                        forgiven under section 7A.
                                    ``(V) Reimbursement for loan 
                                processing.--The Administrator shall 
                                reimburse a lender for processing 
                                recalculation requests under this 
                                clause in an amount determined by the 
                                Administrator.''.
    (b) Effective Date; Applicability.--The amendments made by 
subsection (a) shall be effective as if included in the CARES Act 
(Public Law 116-136) and shall apply to any loan made pursuant to 
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) 
before, on, or after the date of enactment of this Act.
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