PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act
Bill: S.1249 | Sponsor: Sen. Cardin, Benjamin L. (D-MD)
Policy area: Commerce

Summary:
PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act
This bill makes various changes to the Paycheck Protection Program (PPP) with respect to certain loans, loan applicants, and loan recipients.
First, the bill permits farming partnerships with gross farming income from self-employment to request a recalculation of the amount of their PPP loans based on the partners' distributive shares of gross income from the partnership. The recalculation is available retroactively for loans made on or before the date of enactment of this bill.
Additionally, applicants for PPP loans may calculate their maximum loan amount based on the applicant's Internal Revenue Service Form 1040, Schedule C (i.e., profit or loss from a business). This applies retroactively to PPP loans made or approved on or before December 27, 2020.
The bill also increases the maximum amount of a second draw PPP loan for individuals who received PPP loan forgiveness. The maximum second draw PPP loan amount for an eligible individual includes the increased PPP loan amount the individual would have received under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act had the individual not already received loan forgiveness. This applies retroactively to second draw loans made on for before the date of enactment of this bill.
The bill changes from a quarterly period to any contiguous 90-day period the calculation of revenue loss in determining eligibility for a second draw PPP loan.
The bill also extends certain dates with respect to the administration of the PPP.

To amend the Small Business Act to modify the maximum paycheck 
     protection program loan amount for farmers and ranchers, sole 
 proprietors, independent contractors, and self-employed individuals, 
                        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 ``PPP Flexibility for Farmers, 
Ranchers, and the Self-Employed Act''.

SEC. 2. 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.

SEC. 3. REVISIONS TO LOAN AMOUNT CALCULATION AND ELIGIBILITY.

    (a) Definitions.--In this section--
            (1) the term ``Administrator'' means the Administrator of 
        the Small Business Administration;
            (2) the term ``covered loan'' means a loan made under 
        paragraph (36) or (37) of section 7(a) of the Small Business 
        Act (15 U.S.C. 636(a));
            (3) the term ``eligible applicant'' means a taxpayer that 
        files Internal Revenue Service Form 1040, Schedule C; and
            (4) the term ``interim final rule'' means the interim final 
        rule of the Small Business Administration entitled ``Business 
        Loan Program Temporary Changes; Paycheck Protection Program - 
        Revisions to Loan Amount Calculation and Eligibility'', Docket 
        Number SBA-2021-0010.
    (b) Calculation of Maximum Loan Amount for Certain Applicants.--
            (1) In general.--An eligible applicant applying for a 
        covered loan may calculate the maximum amount of the covered 
        loan using the gross income of the eligible applicant, as 
        reported on the applicable Internal Revenue Service Form 1040, 
        Schedule C filed by the eligible applicant, that is not more 
        than $100,000.
            (2) Retroactive effect.--Notwithstanding any provision of 
        the interim final rule, paragraph (1) shall apply with respect 
        to any covered loan made to an eligible applicant that is 
        approved on or after the date of enactment of the Economic Aid 
        to Hard-Hit Small Businesses, Nonprofits, and Venues Act (title 
        III of division N of Public Law 116-260).
    (c) Recalculation.--
            (1) In general.--The Administrator shall create a process 
        to allow eligible applicants to request a recalculation of the 
        amount of a covered loan and receive additional amounts equal 
        to the difference between the amount of the covered loan 
        originally received by the eligible applicant and the amount of 
        the covered loan based on the application of this section.
            (2) Loan limitation.--For purposes of receiving additional 
        amounts under paragraph (1), section 7(a)(37)(F) of the Small 
        Business Act (15 U.S.C. 636(a)(37)(F)) shall not apply.
            (3) Effect of forgiveness.--Subject to rules issued by the 
        Administrator, an eligible applicant shall be eligible to 
        submit a request for a recalculated loan amount under paragraph 
        (1) without regard to whether the eligible applicant has sought 
        or received forgiveness with respect to the applicable covered 
        loan under section 7A of the Small Business Act (15 U.S.C. 
        636m).
            (4) Forgiveness of additional amounts.--For purposes of 
        this subsection, as soon as is practicable upon expenditure of 
        additional covered loan amounts provided under paragraph (1)--
                    (A) an eligible applicant shall attest to 
                compliance with applicable requirements under section 
                7(a)(37) of the Small Business Act (15 U.S.C. 
                636(a)(37)); and
                    (B) the additional loan amounts shall be forgiven 
                under section 7A of the Small Business Act (15 U.S.C. 
                636m).
            (5) Reimbursement for loan processing.--The Administrator 
        shall reimburse a lender for processing recalculation requests 
        under this subsection in an amount determined by the 
        Administrator.

SEC. 4. 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.

SEC. 5. ELIGIBILITY FOR PAYCHECK PROTECTION PROGRAM SECOND DRAW LOANS.

    Section 7(a)(37)(A)(iv)(I)(bb) of the Small Business Act (15 U.S.C. 
636(a)(37)(A)(iv)(I)(bb)) is amended to read as follows:
                                            ``(bb)(AA) except as 
                                        provided in subitems (BB), (CC) 
                                        and (DD), had gross receipts 
                                        during any contiguous 90-day 
                                        period in 2020 that demonstrate 
                                        not less than a 25 percent 
                                        reduction from the gross 
                                        receipts of the entity during 
                                        the same period in 2019;
                                            ``(BB) if the entity was 
                                        not in business during the 
                                        entirety of 2019, but was in 
                                        business for not fewer than 90 
                                        contiguous days during 2019, 
                                        had gross receipts during any 
                                        contiguous 90-day period in 
                                        2020 that demonstrate not less 
                                        than a 25 percent reduction 
                                        from the gross receipts of the 
                                        entity during the same 
                                        contiguous 90-day period during 
                                        2019;
                                            ``(CC) if the entity was 
                                        not in business for the 
                                        entirety of 2019 and was not in 
                                        business for 90 contiguous days 
                                        during 2019, had gross receipts 
                                        during any contiguous 90-day 
                                        period in 2020 that demonstrate 
                                        not less than a 25 percent 
                                        reduction from the gross 
                                        receipts of the entity during a 
                                        contiguous 90-day period 
                                        beginning on the date the 
                                        business began operations in 
                                        2019; and
                                            ``(DD) if the entity was 
                                        not in business during 2019, 
                                        but was in business for not 
                                        fewer than 90 contiguous days 
                                        during 2020, had gross receipts 
                                        during any contiguous 90-day 
                                        period in 2020 that demonstrate 
                                        not less than a 25 percent 
                                        reduction from the gross 
                                        receipts of the entity during 
                                        an earlier contiguous 90-day 
                                        period in 2020;''.

SEC. 6. ELIGIBILITY FOR RELIEF UNDER THE PAYCHECK PROTECTION PROGRAM 
              AND THE RESTAURANT REVITALIZATION FUND.

    Section 5003 of the American Rescue Plan Act (Public Law 117-2) is 
amended--
            (1) in subsection (a)(7)--
                    (A) in subparagraph (A), by inserting ``and 
                subsection (c)(7)'' after ``(D)''; and
                    (B) by striking the flush text following 
                subparagraph (D)(ii); and
            (2) in subsection (c), by adding at the end the following:
            ``(7) Reduction in pandemic-related revenue loss.--
                    ``(A) Definition.--In this paragraph, the term 
                `covered loan' means a loan made under paragraph (36) 
                or (37) of section 7(a) of the Small Business Act (15 
                U.S.C. 636(a)).
                    ``(B) Reduction.--For purposes of this section--
                            ``(i) the pandemic-related revenue loss for 
                        an eligible entity shall be reduced by any 
                        amounts received from a covered loan in 2020 or 
                        2021; and
                            ``(ii) if an eligible entity receives a 
                        covered loan after submitting an application 
                        for assistance under this section, the 
                        otherwise applicable amount of an award under 
                        this section shall be reduced by the total 
                        amount of the covered loan received by the 
                        eligible entity.
                    ``(C) Ineligibility for covered loan.--If an 
                eligible entity has applied for a covered loan and is 
                approved for an award under this section before the 
                Administrator issues a loan number for the covered 
                loan--
                            ``(i) the eligible entity is ineligible for 
                        the covered loan; and
                            ``(ii) acceptance by the eligible entity of 
                        any loan proceeds of the covered loan is an 
                        unauthorized use of the covered loan.''.

SEC. 7. EXTENSION.

    (a) Salaries and Expenses.--The matter under the heading ``salaries 
and expenses'' under the heading ``Small Business Administration'' 
under the heading ``INDEPENDENT AGENCIES'' in title II of division B of 
the Paycheck Protection Program and Health Care Enhancement Act (Public 
Law 116-139) is amended by striking ``September 30, 2021'' and 
inserting ``September 30, 2023''.
    (b) Modification of Set-Asides.--Section 323(d)(2)(B)(iii) of the 
Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act 
(title III of division N of Public Law 116-260) is amended by striking 
``March 31, 2021'' and inserting ``June 30, 2021''.
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