Title: Paycheck Protection Program Small Business Enhancement Act
Policy area: Commerce

Summary:
Paycheck Protection Program Small Business Enhancement Act
This bill extends the duration of, authorizes subsequent loans under, and otherwise modifies the Paycheck Protection Program established to support small businesses in response to COVID-19 (i.e., coronavirus disease 2019).
Specifically, the bill extends the Paycheck Protection Program through December 31, 2020. It also authorizes a recipient of a paycheck protection loan to apply for a subsequent loan made under the same terms, conditions, and process, and for which the recipient shall be eligible for forgiveness in the same manner, as an initial paycheck protection loan.
Further, the bill expands program eligibility to include (1) organizations such as business leagues and chambers of commerce, and (2) franchisors or franchisees that employ not more than 500 employees per physical location. The bill also prohibits the use of program amounts for lobbying activities and makes eligible expenses tax deductible. In addition, the bill provides for an abbreviated process for forgiveness of a paycheck protection loan that is not more than $150,000.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7894 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7894

 To require the Administrator of the Small Business Administration to 
  establish a program to provide certain borrowers with a second loan 
 under the paycheck protection program, to modify the eligibility and 
    forgiveness requirement of the program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2020

  Mr. Curtis (for himself, Mr. Roy, Mr. Van Drew, Mr. Meuser, and Ms. 
    Wild) introduced the following bill; which was referred to the 
 Committee on Small Business, and in addition to the Committee on Ways 
 and Means, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To require the Administrator of the Small Business Administration to 
  establish a program to provide certain borrowers with a second loan 
 under the paycheck protection program, to modify the eligibility and 
    forgiveness requirement of the 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 ``Paycheck Protection Program Small 
Business Enhancement Act''.

SEC. 2. EXTENDING AUTHORITY FOR COMMITMENTS FOR THE PAYCHECK PROTECTION 
              PROGRAM.

    Section 1102(b)(1) of title I of division A of the Coronavirus Aid, 
Relief, and Economic Security Act (Public Law 116-136) is amended by 
striking ``August 8, 2020'' and inserting ``December 31, 2020''.

SEC. 3. ELIGIBILITY OF FRANCHISES AND 501(C)(6) ORGANIZATIONS FOR THE 
              PAYCHECK PROTECTION PROGRAM.

    Section 7(a)(36)(D) of the Small Business Act (15 U.S.C. 
636(a)(36)(D)) is amended--
            (1) in subparagraph (A)(vii), by striking ``section 
        501(c)(3)'' and inserting ``paragraph (6) or (3) of section 
        501(c)''; and
            (2) in subparagraph (D)--
                    (A) in clause (iv)--
                            (i) in subclause (II), by striking ``and'' 
                        at the end;
                            (ii) in subclause (III), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(IV) any business concern that is 
                                a franchisor or franchisee as described 
                                in clause (vii)(II).''; and
                    (B) by adding at the end the following new clause:
                            ``(vii) Franchises and 501(c)(6) 
                        organizations.--During the covered period, the 
                        following shall be eligible to receive a 
                        covered loan:
                                    ``(I) Any organization that is 
                                described in section 501(c)(6) of the 
                                Internal Revenue Code and that is 
                                exempt from taxation under section 
                                501(a) of such Code.
                                    ``(II) Any business concern that is 
                                a franchisor or franchisee in a 
                                franchise (as defined in section 
                                436.1(h) of title 16, Code of Federal 
                                Regulations), regardless of whether the 
                                franchise is assigned a franchise 
                                identifier code by the Administration, 
                                if the business concern employs not 
                                more than 500 employees per physical 
                                location of the business concern.''.

SEC. 4. PROHIBITION ON USE OF LOAN PROCEEDS FOR LOBBYING ACTIVITIES.

    Section 7(a)(36)(F) of the Small Business Act (15 U.S.C. 
636(a)(36)(F)) is amended by adding at the end the following:
                            ``(vi) Prohibition.--None of the proceeds 
                        of a covered loan may be used for lobbying 
                        activities, as defined in section 3 of the 
                        Lobbying Disclosure Act of 1995 (2 U.S.C. 
                        1602).''.

SEC. 5. SUBSEQUENT LOANS UNDER THE PAYCHECK PROTECTION PROGRAM.

    (a) In General.--An eligible business that received a covered loan 
under section 7(a)(36) of the Small Business Act may submit an 
application to the Administrator of the Small Business Administration 
for a subsequent loan made under the same terms, conditions, and 
processes as such covered loan.
    (b) Forgiveness.--
            (1) In general.--A subsequent loan made under subsection 
        (a) shall be eligible for forgiveness under section 1106 of the 
        CARES Act under the same terms, conditions, and processes as a 
        covered loan made under section 7(a)(36) of the Small Business 
        Act.
            (2) Additional forgivable expenses.--Amounts of a 
        subsequent loan used for covered worker protection expenditures 
        shall be eligible for forgiveness under such section 1106.
            (3) Covered period.--With respect to a subsequent loan, the 
        covered period (as defined in section 1106(a)(3) of the CARES 
        Act) shall begin on the date of disbursement of the subsequent 
        loan.
    (c) Safe Harbor.--
            (1) In general.--A lender may rely on any certification or 
        documentation submitted by an applicant for a covered loan or 
        an eligible recipient of a covered loan that--
                    (A) is submitted pursuant to any statutory 
                requirement relating to covered loans or any rule or 
                guidance issued to carry out any action relating to 
                covered loans; and
                    (B) attests that the applicant or eligible 
                recipient, as applicable, has accurately verified any 
                certification or documentation provided to the lender.
            (2) No enforcement action.--With respect to a lender that 
        relies on a certification or documentation described in 
        paragraph (1)--
                    (A) an enforcement action may not be taken against 
                the lender acting in good faith relating to origination 
                or forgiveness of a covered loan based on such 
                reliance; and
                    (B) the lender acting in good faith shall not be 
                subject to any penalties relating to origination or 
                forgiveness of a covered loan based on such reliance.
    (d) Definitions.--In this section:
            (1) Covered worker protection expenditure.--The term 
        ``covered worker protection expenditure''--
                    (A) means an operating or a capital expenditure, as 
                determined in accordance with generally accepted 
                accounting principles, that is required to facilitate 
                the adaptation of the business activities of an 
                eligible recipient to comply with requirements 
                established or guidance issued by the Department of 
                Health and Human Services, the Centers for Disease 
                Control, or the Occupational Safety and Health 
                Administration during the period beginning on March 1, 
                2020, and ending December 31, 2020, related to the 
                maintenance of standards for sanitation, social 
                distancing, or any other worker or customer safety 
                requirement related to COVID-19;
                    (B) may include--
                            (i) the purchase, maintenance, or 
                        renovation of assets that create or expand--
                                    (I) a drive-through window 
                                facility;
                                    (II) an indoor, outdoor, or 
                                combined air or air pressure 
                                ventilation or filtration system;
                                    (III) a physical barrier such as a 
                                sneeze guard;
                                    (IV) an indoor, outdoor, or 
                                combined commercial real property;
                                    (V) an onsite or offsite health 
                                screening capability; or
                                    (VI) other assets relating to the 
                                compliance with the requirements or 
                                guidance described in subparagraph (A), 
                                as determined by the Administrator in 
                                consultation with the Secretary of 
                                Health and Human Services and the 
                                Secretary of Labor;
                            (ii) expenses related to testing employees 
                        of an eligible business for COVID-19; and
                            (iii) the purchase of--
                                    (I) covered materials described in 
                                section 328.103(a) of title 44, Code of 
                                Federal Regulations, or any successor 
                                regulation;
                                    (II) particulate filtering 
                                facepiece respirators approved by the 
                                National Institute for Occupational 
                                Safety and Health, including those 
                                approved only for emergency use 
                                authorization; or
                                    (III) other kinds of personal 
                                protective equipment, as determined by 
                                the Administrator in consultation with 
                                the Secretary of Health and Human 
                                Services and the Secretary of Labor; 
                                and
                    (C) does not include residential real property or 
                intangible property.
            (2) Eligible business.--The term ``eligible business'' 
        means an eligible recipient as defined in section 7(a)(36)(A) 
        of the Small Business Act (15 U.S.C. 636(a)(36)(A)), but does 
        not include a nonprofit organization as defined in such 
        section--
                    (A) that experienced a reduction in gross receipts 
                of more than 20 percent during--
                            (i) the period between April 1, 2020, and 
                        June 1, 2020, as compared to the period between 
                        April 1, 2019, and June 1, 2019; or
                            (ii) the period between July 1, 2020, and 
                        September 1, 2020, compared to the period 
                        between July 1, 2019, and September 1, 2019; 
                        and
                    (B) that is able to document an inability to return 
                to the same level of business activity as such business 
                was operating at before February 15, 2020, due to 
                compliance with requirements established or guidance 
                issued by the Secretary of Health and Human Services, 
                the Director of the Centers for Disease Control and 
                Prevention, or the Occupational Safety and Health 
                Administration during the period beginning on March 1, 
                2020, and ending December 31, 2020, related to the 
                maintenance of standards for sanitation, social 
                distancing, or any other worker or customer safety 
                requirement related to COVID-19.

SEC. 6. CLARIFICATION OF TREATMENT OF BUSINESS EXPENSES.

    (a) In General.--Subsection (i) of section 1106 of the CARES Act 
(Public Law 116-136) is amended--
            (1) by striking ``1986, any amount'' and inserting ``1986--
            ``(1) any amount'';
            (2) by striking the period at the end and inserting ``, 
        and''; and
            (3) by adding at the end the following new paragraph:
            ``(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).''.
    (b) Effective Date.--The amendments made by this section shall 
apply as if included in the enactment of section 1106 of the CARES Act 
(Public Law 116-136).

SEC. 7. FORGIVENESS FOR COVERED LOANS UNDER $150,000.

    Section 1110 of the CARES Act (15 U.S.C. 9009) is amended by adding 
at the end the following new subsections:
    ``(m) Forgiveness for Covered Loans Under $150,000.--
            ``(1) In general.--Notwithstanding subsection (e), with 
        respect to a covered loan made to an eligible recipient that is 
        not more than $150,000, the covered loan amount shall be 
        forgiven under this section if the eligible recipient submits 
        to the lender a one-page online or paper form, to be 
        established by the Administrator not later than 7 days after 
        the date of enactment of this subsection, that attests that the 
        eligible recipient complied with the requirements under section 
        7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
            ``(2) Hold harmless.--With respect to a lender that relies 
        on an attestation submitted by an eligible recipient under 
        paragraph (1), no enforcement action may be taken against the 
        lender for any falsehoods contained in the attestation.
            ``(3) Demographic information.--The online or paper form 
        established by the Administrator under paragraph (1) shall 
        include a means by which an eligible recipient may, at the 
        discretion of the eligible recipient, submit demographic 
        information of the owner of the eligible recipient, including 
        the sex, race, ethnicity, and veteran status of the owner.
    ``(n) Enforcement Action Against Borrowers.--An eligible recipient 
of a covered loan may only be subject to an enforcement action or 
penalty relating to loan origination, forgiveness, or guarantee of the 
covered loan if the eligible recipient commits fraud or expends covered 
loan proceeds on expenses that are not allowable under section 
7(a)(36)(F) of the Small Business Act (15 U.S.C. 636(a)(36)(F)).''.
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