Title: Paycheck Security Act
Policy area: Taxation

Summary:
Paycheck Security Act
This bill modifies and increases the employee retention tax credit, allows a refundable payroll tax credit for the operating costs of employers, and provides a rebate in 2020 for certain small businesses and other business entities.
The bill also authorizes additional appropriations to carry out the provisions of this bill and to provide for oversight by the Inspector General for Tax Administration of the Department of the Treasury. The Government Accountability Office must report on the effectiveness of the operative provisions of this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3793 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3793

 To amend the CARES Act to modify the employee retention tax credit to 
 secure the paychecks and benefits of workers, to provide a refundable 
 credit against payroll taxes for the operating costs of employers, to 
  amend the Internal Revenue Code of 1986 to provide a small business 
                    rebate, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2020

 Mr. Warner (for himself, Mr. Sanders, Mr. Jones, Mr. Blumenthal, Ms. 
   Klobuchar, Ms. Warren, Mrs. Feinstein, Mr. Reed, and Mr. Merkley) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the CARES Act to modify the employee retention tax credit to 
 secure the paychecks and benefits of workers, to provide a refundable 
 credit against payroll taxes for the operating costs of employers, to 
  amend the Internal Revenue Code of 1986 to provide a small business 
                    rebate, 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, ETC.

    (a) Short Title.--This Act may be cited as the ``Paycheck Security 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, etc.
                       TITLE I--EMPLOYER CREDITS

Sec. 101. Paycheck security credit.
Sec. 102. Credit for employer operating expenses.
Sec. 103. Advance payments of credits.
Sec. 104. Administration.
Sec. 105. Public disclosure.
Sec. 106. Employee notification.
                    TITLE II--SMALL BUSINESS REBATE

Sec. 201. Small business rebate.
                      TITLE III--OTHER PROVISIONS

Sec. 301. Additional appropriations for Department of Treasury.
Sec. 302. GAO report.

                       TITLE I--EMPLOYER CREDITS

SEC. 101. PAYCHECK SECURITY CREDIT.

    (a) Amount of Credit.--Section 2301(a) of the CARES Act is 
amended--
            (1) by striking ``In the case of'' and inserting the 
        following:
            ``(1) Allowance of credit.--In the case of'',
            (2) by striking ``an amount equal to 50 percent'' and 
        inserting ``an amount equal to the sum of--
                    ``(A) 100 percent'',
            (3) by striking the period at the end and inserting ``, 
        plus
                    ``(B) in the case of an eligible employer for which 
                the average number of full-time employees (within the 
                meaning of section 4980H of the Internal Revenue Code 
                of 1986) employed by such eligible employer during 2019 
                was not greater than 100, 50 percent of all other wages 
                with respect to each employee of such employer for the 
                calendar quarter.'', and
            (4) by adding at the end the following new paragraph:
            ``(2) Phaseout.--In the case of an eligible employer for 
        which the gross receipts for the calendar quarter exceed 80 
        percent of gross receipts for the same calendar quarter in the 
        prior year, the amount of credit allowed under paragraph (1) 
        (determined without regard to this paragraph) shall be reduced 
        (but not below zero) by an amount that bears the same ratio to 
        such amount of credit as--
                    ``(A) the excess of--
                            ``(i) 85 percent, over
                            ``(ii) the percentage by which the 
                        taxpayer's gross receipts for the calendar 
                        quarter exceed the taxpayer's gross receipts 
                        for the same calendar quarter in the prior 
                        year, bears to
                    ``(B) 5 percent.''.
    (b) Modification of Limitation.--Section 2301(b)(1) of the CARES 
Act is amended by striking ``for all calendar quarters shall not exceed 
$10,000'' and inserting ``shall not exceed--
                    ``(A) $22,500 for any calendar quarter, or
                    ``(B) $90,000 for all calendar quarters.''.
    (c) Definition of Eligible Employer.--Section 2301(c)(2) of the 
CARES Act is amended to read as follows:
            ``(2) Eligible employer.--
                    ``(A) In general.--The term `eligible employer' 
                means any employer--
                            ``(i) which was carrying on a trade or 
                        business during calendar year 2020,
                            ``(ii) which meets the requirements of 
                        subparagraph (B),
                            ``(iii) with respect to any calendar 
                        quarter, for which the gross receipts (within 
                        the meaning of section 448(c) of the Internal 
                        Revenue Code of 1986) for the calendar quarter 
                        are less than 85 percent of gross receipts for 
                        the same calendar quarter in the prior year.
                    ``(B) Requirements.--An employer meets the 
                requirements of this subparagraph if such employer--
                            ``(i) did not have gross receipts for the 
                        last taxable year ending in 2019 of more than 
                        $1,000,000,000, and
                            ``(ii) did not have on hand on March 1, 
                        2020, cash and cash equivalents of more than an 
                        amount equal to 150 percent of the wages paid 
                        by the employer during calendar year 2019.
                    ``(C) Tax-exempt organizations.--In the case of an 
                organization which is described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code--
                            ``(i) subparagraph (A)(i) shall apply to 
                        all operations of such organization, and
                            ``(ii) any reference in this section to 
                        gross receipts shall be treated as a reference 
                        to gross receipts within the meaning of section 
                        6033 of such Code.
                    ``(D) Exceptions.--The term `eligible employer' 
                shall not include--
                            ``(i) any employer that is a debtor in a 
                        case under chapter 7 of title 11, United States 
                        Code, during the calendar quarter, or
                            ``(ii) any covered entity (as defined in 
                        section 4019).''.
    (d) Determination of Qualified Wages.--
            (1) In general.--Section 2301(c)(3) of the CARES Act is 
        amended to read as follows:
            ``(3) Qualified wages.--
                    ``(A) In general.--The term `qualified wages' means 
                wages paid with respect to any period during the 
                calendar quarter in which an employee is not providing 
                services. Such term shall not include any wages taken 
                into account under section 7001 or section 7003 of the 
                Families First Coronavirus Response Act.
                    ``(B) Limitation.--Qualified wages paid or incurred 
                by an eligible employer with respect to an employee for 
                any period described in subparagraph (A) may not exceed 
                the greater of--
                            ``(i) $600 per week, or
                            ``(ii) the amount such employee would have 
                        been paid (including tips which would have been 
                        deemed to be paid by the employer under section 
                        3121(q)) for working an equivalent duration 
                        during the 30 days immediately preceding such 
                        period.''.
            (2) Health plan expenses.--Section 2301(c)(5) of such Act 
        is amended to read as follows:
            ``(5) Wages.--
                    ``(A) In general.--The term `wages' means wages (as 
                defined in section 3121(a) of the Internal Revenue Code 
                of 1986) and compensation (as defined in section 
                3231(e) of such Code).
                    ``(B) Allowance for certain health plan expenses.--
                            ``(i) In general.--Such term shall include 
                        amounts paid or incurred by the eligible 
                        employer to provide and maintain a group health 
                        plan (as defined in section 5000(b)(1) of the 
                        Internal Revenue Code of 1986), but only to the 
                        extent that such amounts are excluded from the 
                        gross income of employees by reason of section 
                        106(a) of such Code.
                            ``(ii) Allocation rules.--For purposes of 
                        this section, amounts treated as wages under 
                        clause (i) shall be treated as paid with 
                        respect to any employee (and with respect to 
                        any period) to the extent that such amounts are 
                        properly allocable to such employee (and to 
                        such period) in such manner as the Secretary 
                        may prescribe. Except as otherwise provided by 
                        the Secretary, such allocation shall be treated 
                        as properly made if made on the basis of being 
                        pro rata among periods of coverage.''.
    (e) Certain Governmental Employees Eligible for Credit.--
            (1) In general.--Section 2301(f) of the CARES Act is 
        amended to read as follows:
    ``(f) Certain Governmental Employers.--
            ``(1) In general.--The credit under this section shall not 
        be allowed to the Federal Government or any agency or 
        instrumentality thereof.
            ``(2) Exception.--Paragraph (1) shall not apply to any 
        organization described in section 501(c)(1) of the Internal 
        Revenue Code of 1986 and exempt from tax under section 501(a) 
        of such Code.
            ``(3) Special rules.--In the case of any State government, 
        Indian tribal government, or any agency, instrumentality, or 
        political subdivision of the foregoing--
                    ``(A) clauses (i) of subsection (c)(2)(A) shall 
                apply to all operations of such entity, and
                    ``(B) clauses (ii) and (iii) of subsection 
                (c)(2)(A) shall not apply.''.
            (2) Coordination with application of certain definitions.--
                    (A) In general.--Section 2301(c)(5)(A) of the CARES 
                Act, as amended by the preceding provisions of this 
                Act, is amended by adding at the end the following: 
                ``For purposes of the preceding sentence (other than 
                for purposes of subsection (b)(2)), wages as defined in 
                section 3121(a) of the Internal Revenue Code of 1986 
                shall be determined without regard to paragraphs (1), 
                (5), (6), (7), (8), (10), (13), (18), (19), and (22) of 
                section 3212(b) of such Code (except with respect to 
                services performed in a penal institution by an inmate 
                thereof).''.
                    (B) Conforming amendments.--Sections 2301(c)(6) of 
                the CARES Act is amended by striking ``Any term'' and 
                inserting ``Except as otherwise provided in this 
                section, any term''.
    (f) Coordination With Paycheck Protection Program.--
            (1) Amendment to paycheck protection program.--Section 
        1106(a)(8) of the Cares Act is amended by inserting ``, except 
        that such costs shall not include qualified wages taken into 
        account in determining the credit allowed under section 2301 of 
        this Act'' before the period at the end.
            (2) Amendments to employee retention tax credit.--
                    (A) In general.--Section 2301(g) of the CARES Act 
                is amended to read as follows:
    ``(g) Election To Not Take Certain Wages Into Account.--
            ``(1) In general.--This section shall not apply to 
        qualified wages paid by an eligible employer with respect to 
        which such employer makes an election (at such time and in such 
        manner as the Secretary may prescribe) to have this section not 
        apply to such wages.
            ``(2) Coordination with paycheck protection program.--The 
        Secretary, in consultation with the Administrator of the Small 
        Business Administration, shall issue guidance providing that 
        payroll costs paid or incurred during the covered period shall 
        not fail to be treated as qualified wages under this section by 
        reason of an election under paragraph (1) to the extent that a 
        covered loan of the eligible employer is not forgiven by reason 
        of a decision under section 1106(g). Terms used in the 
        preceding sentence which are also used in section 1106 shall 
        have the same meaning as when used in such section.''.
                    (B) Conforming amendment.--Section 2301 of the 
                CARES Act is amended by striking subsection (j).
    (g) Denial of Double Benefit.--Section 2301(h) of the CARES Act is 
amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) Denial of double benefit.--Any wages taken into 
        account in determining the credit allowed under this section 
        shall not be taken into account as wages for purposes of 
        sections 45A, 45B, 45P, 45S, 51, and 1396 of the Internal 
        Revenue Code of 1986.'', and
            (2) by redesignating paragraph (3) as paragraph (2).
    (h) Recapture and Advancement of Credit.--Section 2301 of the CARES 
Act is amended by redesignating subsections (l) and (m) as subsections 
(o) and (p), respectively, and by inserting after subsection (k) the 
following:
    ``(l) Recapture.--
            ``(1) In general.--In any case in which an eligible 
        employer which has been allowed a credit under this section for 
        any calendar quarter takes any action described in paragraph 
        (2) during the 1-year period beginning on the day after the end 
        of such calendar quarter, the tax imposed by chapter 21 or 22 
        of the Internal Revenue Code of 1986 (whichever is applicable) 
        for the calendar quarter in which such action occurs shall be 
        increased by the amount of the credit so allowed.
            ``(2) Actions described.--The following actions are 
        described in this paragraph:
                    ``(A) Returns of capital.--The eligible employer 
                purchases its own stock or otherwise distributes 
                capital (including through a dividend).
                    ``(B) Labor negotiations.--The eligible employer--
                            ``(i) abrogates a collective bargaining 
                        agreement, or
                            ``(ii) does not remain neutral in any union 
                        organizing effort.
                    ``(C) Payroll.--The eligible employer pays any 
                officer or employee a salary in an amount that is 
                greater than 50 times the median salary of employees 
                during the period lasting one year after the end of the 
                calendar quarter in which credit is claimed.
            ``(3) Limitation.--The amount of tax imposed under 
        paragraph (1) with respect to any calendar quarter for all 
        actions described in paragraph (2) shall not exceed the amount 
        allowed as a credit under this section with respect to such 
        calendar quarter.
    ``(m) Coordination With Advance Refunds of Credit.--
            ``(1) In general.--The amount of credit which would (but 
        for this subsection) be allowed under this section shall be 
        reduced (but not below zero) by the aggregate refunds and 
        credits made or allowed to the taxpayer under section 103 of 
        the Paycheck Security Act by reason of this section. Any 
        failure to so reduce the credit shall be treated as arising out 
        of a mathematical or clerical error and assessed according to 
        section 6213(b)(1) of the Internal Revenue Code of 1986.
            ``(2) Excess advance payments.--If the advance payments to 
        a taxpayer under section 103 of the Paycheck Security Act by 
        reason of this section for a calendar quarter exceed the credit 
        allowed by this section (determined without regard to paragraph 
        (1)), the tax imposed by chapter 21 or 22 of the Internal 
        Revenue Code of 1986 (whichever is applicable) for the calendar 
        quarter shall be increased by the amount of such excess.''.
    (i) Regulations and Guidance.--Section 2301(o) of the CARES Act, as 
redesignated by subsection (h), is amended--
            (1) by striking paragraphs (1), (2), and (3), and inserting 
        the following:
            ``(1) to require employers allowed a credit under this 
        section to report information relevant to actions described in 
        subsection (l)(2),''.
            (2) by redesignating paragraphs (4) and (5) as paragraphs 
        (2) and (3), respectively, and
            (3) in paragraph (3), as so redesignated, by striking 
        ``subparagraphs (A)(ii) and (B) of subsection (c)(2)'' and 
        inserting ``subsections (a)(2) and (c)(2)(A)(iv)''.
    (j) Effective Date.--The amendments made by this section shall 
apply to wages paid in calendar quarters beginning after the date of 
the enactment of this Act.

SEC. 102. CREDIT FOR EMPLOYER OPERATING EXPENSES.

    (a) In General.--
            (1) Allowance of credit.--In the case of an eligible 
        employer, there shall be allowed as a credit against applicable 
        employment taxes for each calendar quarter an amount equal to 
        the lesser of--
                    (A) 5 percent of the qualifying gross receipts of 
                the eligible employer, or
                    (B) $500,000.
            (2) Phaseout.--In the case of an eligible employer for 
        which the gross receipts for the calendar quarter exceed 80 
        percent of gross receipts for the same calendar quarter in the 
        prior year, the amount of determined under paragraph (1)(A) 
        (determined without regard to this paragraph) shall be reduced 
        (but not below zero) by an amount that bears the same ratio to 
        such amount as--
                    (A) the excess of--
                            (i) 85 percent, over
                            (ii) the percentage by which the taxpayer's 
                        gross receipts for the calendar quarter exceed 
                        the taxpayer's gross receipts for the same 
                        calendar quarter in the prior year, bears to
                    (B) 5 percent.
    (b) Limitations and Refundability.--
            (1) Credit limited to employment taxes.--The credit allowed 
        under subsection (a) with respect to any calendar quarter shall 
        not exceed the applicable employment taxes (reduced by any 
        credits allowed under subsections (e) and (f) of section 3111 
        of the Internal Revenue Code of 1986, sections 7001 and 7003 of 
        the Families First Coronavirus Response Act, and section 2301 
        of the CARES Act) on the wages paid with respect to the 
        employment of all the employees of the eligible employer for 
        such calendar quarter.
            (2) Refundability of excess credit.--
                    (A) In general.--If the amount of the credit under 
                subsection (a) (determined without regard to paragraph 
                (1)) exceeds the limitation of paragraph (1) for any 
                calendar quarter, such excess shall be treated as an 
                overpayment that shall be refunded under sections 
                6402(a) and 6413(b) of the Internal Revenue Code of 
                1986.
                    (B) Treatment of payments.--For purposes of section 
                1324 of title 31, United States Code, any amounts due 
                to the employer under this paragraph shall be treated 
                in the same manner as a refund due from a credit 
                provision referred to in subsection (b)(2) of such 
                section.
    (c) Definitions.--For purposes of this section--
            (1) Applicable employment taxes.--The term ``applicable 
        employment taxes'' means the following:
                    (A) The taxes imposed under section 3111(a) of the 
                Internal Revenue Code of 1986.
                    (B) So much of the taxes imposed under section 
                3221(a) of such Code as are attributable to the rate in 
                effect under section 3111(a) of such Code.
            (2) Eligible employer.--The term ``eligible employer'' 
        means an employer which--
                    (A) is an eligible employer (as defined in section 
                2301(c)(2) of the CARES Act, determined without regard 
                to subparagraph (A)(ii) thereof), and
                    (B) with respect to any calendar quarter, meets the 
                gross receipts test of section 448(c) (determined by 
                substituting ``$41,500,000'' for ``$25,000,000'' in 
                paragraph (1) thereof) for the taxable year that 
                includes the first day of the calendar quarter.
        For purposes of subparagraph (B), in the case of any taxpayer 
        which is not a corporation or a partnership, the gross receipts 
        test of section 448(c) shall be applied in the same manner as 
        if such taxpayer were a corporation or partnership.
            (3) Qualifying gross receipts.--The term ``qualifying gross 
        receipts'' means the aggregate gross receipts of the eligible 
        employer for the last taxable year ending before the date of 
        the enactment of this Act.
            (4) Gross receipts.--
                    (A) In general.--The term ``gross receipts'' has 
                the meaning given such term under section 448(c) of the 
                Internal Revenue Code of 1986.
                    (B) Tax-exempt organizations.--In the case of an 
                organization which is described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code, any reference in 
                this section to gross receipts shall be treated as a 
                reference to gross receipts within the meaning of 
                section 6033 of the Internal Revenue Code of 1986.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
    (d) Other Rules.--For purposes of this section--
            (1) Aggregation rule.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52 of the 
        Internal Revenue Code of 1986, or subsection (m) or (o) of 
        section 414 of such Code, shall be treated as one employer.
            (2) Certain governmental employers.--This credit shall not 
        apply to the Government of the United States, the government of 
        any State or political subdivision thereof, or any agency or 
        instrumentality of any of the foregoing.
            (3) Election not to have section apply.--This section shall 
        not apply with respect to any eligible employer for any 
        calendar quarter if such employer elects (at such time and in 
        such manner as the Secretary may prescribe) not to have this 
        section apply.
            (4) Third-party payors.--Any credit allowed under this 
        section shall be treated as a credit described in section 
        3511(d)(2) of such Code.
    (e) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--There are hereby appropriated to the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal Disability Insurance 
Trust Fund established under section 201 of the Social Security Act (42 
U.S.C. 401) and the Social Security Equivalent Benefit Account 
established under section 15A(a) of the Railroad Retirement Act of 1974 
(45 U.S.C. 14 231n-1(a)) amounts equal to the reduction in revenues to 
the Treasury by reason of this section (without regard to this 
subsection). Amounts appropriated by the preceding sentence shall be 
transferred from the general fund at such times and in such manner as 
to replicate to the extent possible the transfers which would have 
occurred to such Trust Fund or Account had this section not been 
enacted.
    (f) Treatment of Deposits.--The Secretary shall waive any penalty 
under section 6656 of the Internal Revenue Code of 1986 for any failure 
to make a deposit of any applicable employment taxes if the Secretary 
determines that such failure was due to the reasonable anticipation of 
the credit allowed under this section.
    (g) Recapture.--
            (1) In general.--In any case in which an eligible employer 
        which has been allowed a credit under this section for any 
        calendar quarter takes any action described in section 
        2301(l)(2) of the CARES Act during the 1-year period beginning 
        on the day after the end of such calendar quarter, the tax 
        imposed by chapter 21 or 22 of the Internal Revenue Code of 
        1986 (whichever is applicable) for the calendar quarter in 
        which such action occurs shall be increased by the amount of 
        the credit so allowed.
            (2) Limitation.--The amount of tax imposed under paragraph 
        (1) with respect to any calendar quarter for all actions 
        described in section 2301(l)(2) of the CARES Act shall not 
        exceed the amount allowed as a credit under this section with 
        respect to such calendar quarter.
    (h) Coordination With Advance Refunds of Credit.--The amount of 
credit which would (but for this subsection) be allowed under this 
section shall be reduced (but not below zero) by the aggregate refunds 
and credits made or allowed to the taxpayer under section 103 by reason 
of this section. Any failure to so reduce the credit shall be treated 
as arising out of a mathematical or clerical error and assessed 
according to section 6213(b)(1) of the Internal Revenue Code of 1986.
    (i) Credit Treated as Income.--For purposes of the Internal Revenue 
Code of 1986, the amount allowed as a credit under this section for any 
calendar quarter shall be included in income of the employer for the 
taxable year that includes the last day of the calendar quarter.
    (j) Regulations and Guidance.--The Secretary shall issue such 
forms, instructions, regulations, and guidance as are necessary--
            (1) to require employers allowed a credit under this 
        section to report information relevant to actions described in 
        subsection (g)(1),
            (2) with respect to the application of the credit under 
        subsection (a) to third party payors (including professional 
        employer organizations, certified professional employer 
        organizations, or agents under section 3504 of the Internal 
        Revenue Code of 1986), including regulations or guidance 
        allowing such payors to submit documentation necessary to 
        substantiate the eligible employer status of employers that use 
        such payors, and
            (3) for application of subsections (a)(2) in the case of 
        any employer which was not carrying on a trade or business for 
        all or part of the same calendar quarter in the prior year.
    (k) Application.--This section shall only apply to calendar 
quarters beginning after the date of the enactment of this Act and 
before January 1, 2020.

SEC. 103. ADVANCE PAYMENTS OF CREDITS.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall establish a program under which an employer may elect 
to receive an advance payment of--
            (1) the credit allowable under section 2301 of the CARES 
        Act, and
            (2) the credit allowable under section 102.
The employer shall designate the amount of any advance payment made 
under this section which is made by reason of each credit described in 
the preceding sentence.
    (b) Limitations.--
            (1) Limitation on amount of payment.--The aggregate amount 
        of advance payments under this section with respect to any 
        calendar quarter shall not exceed the deemed credit amount.
            (2) Limitation on number of advances.--An employer may not 
        make an election under the program established under subsection 
        (a) with respect to more than 2 calendar quarters in any 
        calendar year.
    (c) Deemed Credit Amount.--For purposes of this section--
            (1) In general.--The term ``deemed credit amount'' means 
        the sum of--
                    (A) the average quarterly wages (as defined in 
                section 2301 of the CARES Act) paid by the taxpayer in 
                calendar year 2019, plus
                    (B) 5 percent of the qualifying gross receipts (as 
                defined in section 102(c)(3)) of the taxpayer.
            (2) Special rule for seasonal employers.--In the case of 
        any employer who employs seasonal workers (as defined in 
        section 45R(d)(5)(B) of the Internal Revenue Code of 1986), the 
        employer may elect to use the wages (as defined in section 2301 
        of the CARES Act) for the calendar quarter in 2019 which 
        corresponds to the calendar quarter to which the election 
        relates in lieu of the amount descried in paragraph (1)(A).

SEC. 104. ADMINISTRATION.

    (a) Priority.--In carrying out the provisions of section 2301 of 
the CARES Act and sections 3 and 4, the Secretary of the Treasury (or 
the Secretary's delegate) shall prioritize businesses with 100 or fewer 
employees.
    (b) Audits.--In enforcing the requirements section 2301 of the 
CARES Act and sections 3 and 4, the Secretary of the Treasury (or the 
Secretary's delegate) shall prioritize employers with gross receipts 
for the last taxable year ending in 2019 of $1,000,000,000 or more.

SEC. 105. PUBLIC DISCLOSURE.

    (a) Quarterly Reports.--Not later than 60 days after the date of 
the enactment of this Act, and once every calendar quarter thereafter, 
the Treasury Inspector General for Tax Administration shall make 
publicly available a report on the provisions of this Act, including--
            (1) A listing of each eligible employer that was allowed 
        the credit under section 2301 of the CARES Act and the number 
        of employees taken into account in determining the amount of 
        such credit.
            (2) A listing of each eligible employer that was allowed 
        the credit under section 102.
            (3) The aggregate amount of advance payments provided to 
        each eligible employer under section 103.
            (4) The aggregate amount of credits recaptured from each 
        eligible employer under each of the following provisions--
                    (A) Section 2301(l) of the CARES Act and section 
                102(g).
                    (B) Section 2301(m)(2) of the CARES Act.
    (b) Conforming Amendment.--Section 6103(l) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(23) Disclosure of return information relating to 
        paycheck security credits.--The Treasury Inspector General for 
        Tax Administration shall disclose to the public taxpayer 
        information required under section 105 of the Paycheck Security 
        Act.''.

SEC. 106. EMPLOYEE NOTIFICATION.

    (a) In General.--Each employer shall post and keep posted on its 
website (if any) and in conspicuous places on the premises of the 
employer where notices to employees are customarily posted, a notice, 
to be prepared or approved by the Secretary of Labor, of the credits 
allowed to employers under section 2301 of the CARES Act and section 
102.
    (b) Model Notice.--Not later than 7 days after the date of 
enactment of this Act, the Secretary of Labor shall make publicly 
available a model of notice that meets the requirements of subsection 
(a).

                    TITLE II--SMALL BUSINESS REBATE

SEC. 201. SMALL BUSINESS REBATE.

    (a) In General.--Subchapter B of chapter 65 of subtitle F of the 
Internal Revenue Code of 1986 is amended by inserting after section 
6428 the following new section:

``SEC. 6429. SMALL BUSINESS REBATE.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of a qualifying taxpayer, 
        there shall be allowed as a credit against the tax imposed by 
        subtitle A for the first taxable year beginning in 2020 an 
        amount equal to the lesser of--
                    ``(A) 30 percent of qualified gross profits of such 
                qualifying taxpayer for the applicable taxable year, or
                    ``(B) $75,000.
            ``(2) Phase-out for individuals.--In the case of a 
        qualifying taxpayer that is a qualified individual, the amount 
        of the credit determined under paragraph (1) (determined 
        without regard to this paragraph) shall be reduced (but not 
        below zero) by the amount which bears the same ratio to such 
        credit (as so determined) as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's adjusted gross income 
                        for the applicable taxable year, over
                            ``(ii) $100,000 ($200,000 in the case of a 
                        joint return), bears to
                    ``(B) $50,000 ($100,000 in the case of a joint 
                return).
            ``(3) Reduction for qualified organizations.--
                    ``(A) In general.--In the case of a qualifying 
                taxpayer that is a qualified organization, the amount 
                of the credit determined under paragraph (1) 
                (determined without regard to this paragraph) shall be 
                reduced by the total expenditures of the organization 
                described in section 162(e)(1) (other than expenditures 
                described in section 6033(e)(1)(B)(ii)).
                    ``(B) Exception.--This paragraph shall not apply to 
                any organization described in section 501(c)(3).
    ``(b) Qualifying Taxpayer.--For purposes of this section--
            ``(1) In general.--The term `qualifying taxpayer' means any 
        taxpayer that is a domestic C corporation, a qualified 
        organization, or a qualified individual that meets the gross 
        profits test under paragraph (4) for the applicable taxable 
        year.
            ``(2) Qualified organization.--The term `qualified 
        organization' means any organization which is described in 
        section 501(c) and exempt from tax under section 501(a).
            ``(3) Qualified individual.--The term `qualified 
        individual' means any individual who--
                    ``(A) is a United States citizen or resident, and
                    ``(B) materially participates (within the meaning 
                of section 469(h)) in one or more trades or businesses 
                (other than any trade or business consisting of the 
                performance of services by the taxpayer as an employee 
                (within the meaning of section 62(a)(1))).
            ``(4) Gross profits test.--
                    ``(A) In general.--A taxpayer meets the gross 
                profits test under this section if the qualified gross 
                profits of the taxpayer for the applicable taxable year 
                are not more than $1,000,000.
                    ``(B) Aggregation rules.--
                            ``(i) In general.--All qualifying taxpayers 
                        that are domestic C corporations or qualified 
                        organizations and that are treated as a single 
                        employer under subsection (a) or (b) of section 
                        52 or subsection (m) or (o) of section 414 
                        shall be treated as a single person for 
                        purposes of subparagraph (A).
                            ``(ii) Qualifying individuals.--All trades 
                        or businesses in which a qualified individual 
                        materially participates (within the meaning of 
                        section 469(h)) shall be treated as a single 
                        trade or business for purposes of subparagraph 
                        (A).
    ``(c) Qualified Gross Profits.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified gross profits' means the excess 
        of--
                    ``(A) the gross receipts of the taxpayer as 
                reported on the return of tax for the applicable 
                taxable year, reduced by
                    ``(B) returns and allowances and cost of goods sold 
                as reported on the return of tax for the applicable 
                taxable year.
            ``(2) Application to qualified organizations.--In the case 
        of a qualified organization--
                    ``(A) paragraph (1) shall be applied--
                            ``(i) by treating the reference to gross 
                        receipts as a reference to gross receipts 
                        within the meaning of section 6033, and
                            ``(ii) without regard to subparagraph (B) 
                        thereof, and
                    ``(B) in the case of an organization which, for all 
                applicable taxable years, is exempt from filing a 
                return pursuant to section 6033(a) or which is not 
                required to include in such return the information 
                necessary to determine the amount qualified gross 
                receipts, such organization may submit to the Secretary 
                (in such form and manner as is deemed appropriate by 
                the Secretary) any information required for purposes of 
                determining the amount of such gross receipts.
        For purposes of section 6104, any information submitted by an 
        organization under subparagraph (B) shall be deemed to be 
        information required to be furnished by such organization 
        pursuant to section 6033.
            ``(3) Application to qualified individuals.--
                    ``(A) In general.--In the case of a qualified 
                individual--
                            ``(i) gross receipts, returns and 
                        allowances, and cost of goods sold taken into 
                        account under paragraph (1) shall only include 
                        gross receipts from trades or businesses 
                        described in subsection (b)(3) in which the 
                        qualified individual materially participated, 
                        and
                            ``(ii) wages received from any such trade 
                        or business by the qualified individual shall 
                        not be taken into account under paragraph 
                        (1)(A).
                    ``(B) Treatment of amounts from partnerships and s 
                corporations.--In the case of any qualified individual 
                who materially participates (within the meaning of 
                section 469(h)) in a trade or business of a partnership 
                or S corporation in which such individual is a partner 
                or shareholder, the amount determined under paragraph 
                (1) with respect to such trade or business shall be 
                determined using--
                            ``(i) in the case of a partnership, the 
                        partner's distributive share of non-separately 
                        stated income, as reported on the return of tax 
                        for the applicable taxable year, and
                            ``(ii) in the case of an S corporation, the 
                        shareholder's pro rata share of non-separately 
                        stated income, as reported on the return of tax 
                        for the applicable taxable year.
                    ``(C) Treatment of amounts from farming 
                businesses.--In the case of a qualified individual who 
                materially participates (within the meaning of section 
                469(h)) in a farming business (as defined in section 
                263A(e)(4)), the amount of determined under paragraph 
                (1) shall be the gross income derived from such 
                business, as reported on the return of tax for the 
                applicable taxable year.
    ``(d) Applicable Taxable Year.--For purposes of this section, the 
term `applicable taxable year' means--
            ``(1) the first taxable year beginning in 2019, or
            ``(2) in any case in which the qualifying taxpayer did not 
        file a tax return for the taxable year described in paragraph 
        (1), the first taxable year beginning in 2018.
    ``(e) Treatment of Credit.--
            ``(1) In general.--The credit allowed by subsection (a) 
        shall be treated as allowed by subpart C of part IV of 
        subchapter A of chapter 1.
            ``(2) Credit included in gross income.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for purposes of subtitle A, the 
                amount of any credit allowed under this section shall 
                be included in gross income.
                    ``(B) Amounts not taken into account for purposes 
                of premium tax credit.--
                            ``(i) In general.--For purposes of 
                        determining modified adjusted gross income 
                        under section 36B(d)(2)(B), adjusted gross 
                        income shall not include any amount treated as 
                        income by reason of subparagraph (A).
                            ``(ii) Exception.--Paragraph (1) shall not 
                        apply to the extent such reduction results in 
                        an amount of household income (as defined in 
                        section 36B(d)(2)(A)) of a taxpayer that is 
                        less than 100 percent of the poverty line (as 
                        defined in section 36B(d)(3)) for a family of 
                        the size involved (as determined under the 
                        rules of section 36B(d)(1)).
    ``(f) Coordination With Advance Refunds and Credit for Employer 
Operating Expenses.--
            ``(1) Coordination with advance refunds of credit.--The 
        amount of credit which would (but for this subsection) be 
        allowable under this section shall be reduced (but not below 
        zero) by the aggregate refunds and credits made or allowed to 
        the taxpayer under subsection (g). Any failure to so reduce the 
        credit shall be treated as arising out of a mathematical or 
        clerical error and assessed according to section 6213(b)(1).
            ``(2) Coordination with credit for employer operating 
        expenses.--The amount of the credit allowed under this section 
        (determined without regard to this subsection) shall be reduced 
        (but not below zero) by the amount of any credit allowed under 
        section 102 of the Paycheck Security Act during the taxable 
        year.
            ``(3) Special rule for recapture of advanced refunds and 
        credits.--
                    ``(A) In general.--In the case of any qualifying 
                taxpayer who received a refund or credit by reason of 
                subsection (g) and who was allowed a credit under 
                section 102 of the Paycheck Security Act for any 
                quarter ending on or before the last day of the 
                taxpayer's first taxable year beginning in 2020, the 
                tax imposed by chapter 1 on the taxpayer to whom such 
                refund or credit was made or allowed shall be increased 
                for the taxable year by the lessor of--
                            ``(i) the refund or credit made or allowed 
                        to such taxpayer by reason of subsection (g), 
                        or
                            ``(ii) the amount of the credit allowed 
                        under section 102 of the Paycheck Security Act.
                    ``(B) Application to partnerships and s 
                corporations.--For purposes of applying subparagraph 
                (A), in the case of any partnership or S corporation 
                which was allowed a credit under section 102 of the 
                Paycheck Security Act, each partner of such partnership 
                shall be treated as having been allowed a credit under 
                such section equal to such partner's distributive share 
                of such credit and each shareholder of such S 
                corporation shall be treated as having been allowed a 
                credit equal to such shareholder's pro rata share of 
                such credit.
                    ``(C) Return requirement.--If the tax imposed by 
                chapter 1 for the taxable year is increased under this 
                paragraph, the taxpayer shall, notwithstanding section 
                6012, be required to file a return with respect to the 
                taxes imposed under subtitle A.
    ``(g) Advance Refunds and Credits.--
            ``(1) In general.--Any person which was a qualifying 
        taxpayer for such person's last taxable year ending before 
        January 1, 2020, shall be treated as having made a payment 
        against the tax imposed by chapter 1 for such taxable year in 
        an amount equal to the advance refund amount for such taxable 
        year, regardless of whether such tax would have been imposed on 
        such person.
            ``(2) Advance refund amount.--For purposes of paragraph 
        (1), the advance refund amount is the amount that would have 
        been allowed as a credit under this section for such taxable 
        year if this section (other than subsection (f) and this 
        subsection) had applied to such taxable year.
            ``(3) Timing of payments.--The Secretary shall, subject to 
        the provisions of this title, refund or credit any overpayment 
        attributable to this section as rapidly as possible. No refund 
        or credit shall be made or allowed under this subsection after 
        December 31, 2020.
            ``(4) No interest.--No interest shall be allowed on any 
        overpayment attributable to this section.
    ``(h) Regulations and Guidance.--The Secretary shall issue such 
forms, instructions, regulations, and guidance as are necessary, 
including guidance with respect to the application of subsection 
(f)(3)(B) to partners and partnerships with differing taxable years.''.
    (b) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``and 6428'' and inserting ``6428, 
        and 6429''.
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``6429,'' after ``6428,''.
            (3) The table of sections for subchapter B of chapter 65 of 
        subtitle F of the Internal Revenue Code of 1986 is amended by 
        inserting after the item relating to section 6428 the 
        following:

``Sec. 6429. Small business rebate.''.

                      TITLE III--OTHER PROVISIONS

SEC. 301. ADDITIONAL APPROPRIATIONS FOR DEPARTMENT OF TREASURY.

    (a) Internal Revenue Service.--There is authorized to be 
appropriated, and there is appropriated, to the Internal Revenue 
Service $1,000,000,000, to remain available until expended, to carry 
out the provisions of, and amendments made by, this Act.
    (b) Treasury Inspector General for Tax Administration.--There is 
authorized to be appropriated, and there is appropriated, to the 
Treasury Inspector General for Tax Administration $25,000,000, to 
remain available until expended, to carry out investigations, audits 
and other oversight activities with respect to the credits allowed 
under section 2301 of the CARES Act, and sections 102 and 201 of this 
Act, and the provisions of section 103 and 105 of this Act, as 
authorized under the Inspector General Act of 1978 (5 U.S.C. App.).

SEC. 302. GAO REPORT.

    Not later than 5 months after the date of enactment of this Act, 
the Comptroller General of the United States shall issue a report 
evaluating the effectiveness of the operative provisions of and 
amendments made by this Act. Such report shall include recommendations 
on extending the applicability of such amendments and provisions and 
how to transition workers after the expiration of such provisions and 
amendments.
                                 <all>