Title: Small Business Debt Relief Extension Act of 2020
Policy area: Commerce

Summary:
Small Business Debt Relief Extension Act of 2020
This bill extends the Small Business Debt Relief Program, under which the Small Business Administration (SBA), in response to COVID-19 (i.e., coronavirus disease 2019), was authorized to make six months of payments for certain SBA-backed loan products on behalf of the recipients of these loans.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4676 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 4676

 To improve the debt relief program under the CARES Act, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 23, 2020

 Mr. Coons (for himself, Mr. Cardin, Ms. Klobuchar, Mrs. Shaheen, Ms. 
Cantwell, Mr. Markey, Ms. Hirono, Mrs. Gillibrand, Mr. Van Hollen, and 
   Mr. King) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To improve the debt relief program under the CARES Act, 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 ``Small Business Debt Relief Extension 
Act of 2020''.

SEC. 2. SUBSIDY FOR CERTAIN LOAN PAYMENTS.

    (a) In General.--Section 1112 of the CARES Act (15 U.S.C. 9011) is 
amended--
            (1) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``, without regard to the 
                        date on which the covered loan is fully 
                        disbursed and subject to availability of 
                        funds'' after ``status'';
                            (ii) by amending subparagraphs (A) and (B) 
                        to read as follows:
                    ``(A) with respect to a covered loan approved by 
                the Administration before the date of enactment of this 
                Act and not on deferment--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), for the 6-month period beginning 
                        with the next payment due on the covered loan 
                        after the covered loan is fully disbursed;
                            ``(ii) for the 11-month period beginning 
                        with the next payment due on the covered loan 
                        after the covered loan is fully disbursed, with 
                        respect to a covered loan that--
                                    ``(I) is described in subsection 
                                (a)(1)(B) or is a loan guaranteed by 
                                the Administration under section 7(a) 
                                of the Small Business Act (15 U.S.C. 
                                636(a)) other than a loan described in 
                                clause (i) or (ii) of subsection 
                                (a)(1)(A); and
                                    ``(II) is made to a borrower 
                                operating primarily in an industry 
                                other than an industry that is assigned 
                                a North American Industry 
                                Classification System code beginning 
                                with 61, 71, or 72; and
                            ``(iii) for the 18-month period beginning 
                        with the next payment due on the covered loan 
                        after the covered loan is fully disbursed, with 
                        respect to--
                                    ``(I) a covered loan described in 
                                paragraph (1)(A)(i) or paragraph (2) of 
                                subsection (a); or
                                    ``(II) any covered loan made to a 
                                borrower operating primarily in an 
                                industry that is assigned--
                                            ``(aa) a North American 
                                        Industry Classification System 
                                        code beginning with 61, 71, or 
                                        72; or
                                            ``(bb) the North American 
                                        Industry Classification System 
                                        Code 485510;
                    ``(B) with respect to a covered loan approved by 
                the Administration before the date of enactment of this 
                Act and on deferment--
                            ``(i) except as provided in clauses (ii) 
                        and (iii), for the 6-month period beginning 
                        with the next payment due on the covered loan 
                        after the deferment period and after the 
                        covered loan is fully disbursed;
                            ``(ii) for the 11-month period beginning 
                        with the next payment due on the covered loan 
                        after the deferment period and after the 
                        covered loan is fully disbursed, with respect 
                        to a covered loan described in subclause (I) or 
                        (II) of subparagraph (A)(ii); and
                            ``(iii) for the 18-month period beginning 
                        with the next payment due on the covered loan 
                        after the deferment period and after the 
                        covered loan is fully disbursed, with respect 
                        to a covered loan described in subclause (I) or 
                        (II) of subparagraph (A)(iii); and''; and
                            (iii) in subparagraph (C)--
                                    (I) by striking ``covered loan 
                                made'' and inserting ``covered loan 
                                approved by the Administration'';
                                    (II) by striking ``6 months after'' 
                                and inserting ``18 months after'';
                                    (III) by inserting ``(or, for a 
                                covered loan made by an intermediary to 
                                a small business concern using loans or 
                                grants received under section 7(m) of 
                                the Small Business Act (15 U.S.C. 
                                636(m)) or guaranteed by the 
                                Administration under the Community 
                                Advantage Pilot Program of the 
                                Administration, for the 12-month 
                                period)'' after ``6-month period''; and
                                    (IV) by inserting ``after the 
                                covered loan is fully disbursed'' after 
                                ``due on the covered loan''; and
                    (B) by adding at the end the following:
            ``(4) Additional provisions for new loans.--With respect to 
        a loan described in paragraph (1)(C)--
                    ``(A) the Administrator may further extend the 18-
                month period described in paragraph (1)(C) if there are 
                sufficient funds to continue those payments; and
                    ``(B) during the underwriting process, a lender of 
                such a loan may consider the payments under this 
                section as part of a comprehensive review to determine 
                the ability to repay over the entire period of maturity 
                of the loan.
            ``(5) Eligibility.--Eligibility for a covered loan to 
        receive such payments of principal, interest, and any 
        associated fees under this subsection shall be based on the 
        date on which the covered loan is approved by the 
        Administration.
            ``(6) Authority to revise extensions.--
                    ``(A) In general.--As part of preparing the reports 
                under subsection (i)(5) that are required to be 
                submitted not later than January 15, 2021, and not 
                later than June 15, 2021, the Administrator conduct an 
                evaluation of whether amounts made available to make 
                payments under this subsection are sufficient to make 
                the payments for the period described in paragraph (1).
                    ``(B) Plan.--If the Administrator determines under 
                subparagraph (A) that the amounts made available to 
                make payments under this subsection are insufficient, 
                the Administrator shall--
                            ``(i) develop a plan to proportionally 
                        reduce the number of months provided for each 
                        period described in paragraph (1), while 
                        ensuring all amounts made available to make 
                        payments under this subsection are fully 
                        expended; and
                            ``(ii) before taking action under the plan 
                        developed under clause (i), include in the 
                        applicable report under subsection (i)(5) the 
                        plan and the data that informs the plan.
            ``(7) Rule of construction.--Nothing in this subsection 
        shall preclude a borrower from receiving full payments of 
        principal, interest, and any associated fees as authorized by 
        subsection.'';
            (2) by redesignating subsection (f) as subsection (k); and
            (3) by inserting after subsection (e) the following:
    ``(f) Eligibility for New Loans.--For each individual lending 
program under this section, the Administrator may establish a minimum 
loan maturity period, taking into consideration the normal underwriting 
requirements for each such program, with the goal of preventing abuse 
under the program.
    ``(g) Limitation on Assistance.--A borrower may not receive 
assistance under subsection (c) for more than 1 covered loan of the 
borrower described in paragraph (1)(C) of that subsection.
    ``(h) Taxability.--For purposes of the Internal Revenue Code of 
1986--
            ``(1) any payment made under subsection (c) shall be 
        treated as paid by the person on whose behalf such payment is 
        made,
            ``(2) no amount shall be included in the gross income of 
        the borrower by reason of a payment made under subsection (c), 
        and
            ``(3) 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 (2).
    ``(i) Reporting and Outreach.--
            ``(1) Updated information.--
                    ``(A) In general.--Not later than 7 days after the 
                date of enactment of the Small Business Debt Relief 
                Extension Act of 2020, the Administrator shall make 
                publicly available information regarding the 
                modifications to the assistance provided under this 
                section under the amendments made by such Act.
                    ``(B) Guidance.--Not later than 14 days after the 
                date of enactment of the Small Business Debt Relief 
                Extension Act of 2020, the Administrator shall issue 
                guidance on implementing the modifications to the 
                assistance provided under this section under the 
                amendments made by such Act.
            ``(2) Publication of list.--Not later than 14 days after 
        the date of enactment of the Small Business Debt Relief 
        Extension Act of 2020, the Administrator shall transmit to each 
        lender of a covered loan a list of each borrower of a covered 
        loan that includes the North American Industry Classification 
        System code assigned to the borrower, based on the records of 
        the Administration, to assist the lenders in identifying which 
        borrowers qualify for an extension of payments under subsection 
        (c).
            ``(3) Education and outreach.--The Administrator shall 
        provide education, outreach, and communication to lenders, 
        borrowers, district offices, and resource partners of the 
        Administration in order to ensure full and proper compliance 
        with this section, encourage broad participation with respect 
        to covered loans that have not yet been approved by the 
        Administrator, and help lenders transition borrowers from 
        subsidy payments under this section directly to a deferral when 
        suitable for the borrower.
            ``(4) Notification.--Not later than 30 days after the date 
        of enactment of the Small Business Debt Relief Extension Act of 
        2020, the Administrator shall mail a letter to each borrower of 
        a covered loan that includes--
                    ``(A) an overview of assistance provided under this 
                section;
                    ``(B) the rights of the borrower to receive that 
                assistance;
                    ``(C) how to seek recourse with the Administrator 
                or the lender of the covered loan if the borrower has 
                not received that assistance; and
                    ``(D) the rights of the borrower to request a loan 
                deferral from a lender, and guidance on how to do 
                successfully transition directly to a loan deferral 
                once subsidy payments under this section are concluded.
            ``(5) Monthly reporting.--Not later than the 15th of each 
        month beginning after the date of enactment of the Small 
        Business Debt Relief Extension Act of 2020, the Administrator 
        shall submit to Congress a report on assistance provided under 
        this section, which shall include--
                    ``(A) monthly and cumulative data on payments made 
                under this section as of the date of the report, 
                including a breakdown by--
                            ``(i) the number of participating 
                        borrowers;
                            ``(ii) the volume of payments made for each 
                        type of covered loan; and
                            ``(iii) the volume of payments made for 
                        covered loans made before the date of enactment 
                        of this Act and loans made after such date of 
                        enactment;
                    ``(B) the names of any lenders of covered loans 
                that have not submitted information on the covered 
                loans to the Administrator during the preceding month; 
                and
                    ``(C) an update on the education and outreach 
                activities of the Administration carried out under 
                paragraph (3).''.
    (b) Effective Date.--The amendments made by this section shall 
apply as if included in the enactment of section 1112 of the CARES Act 
(15 U.S.C. 9011).
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