II 117th CONGRESS 1st Session S. 1249 IN THE SENATE OF THE UNITED STATES April 20, 2021 Mr. Cardin (for himself, Mr. Lankford , Ms. Baldwin , Ms. Collins , Mr. King , Mr. Portman , and Mr. Marshall ) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL 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.

1. Short title This Act may be cited as the PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act . 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. 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. 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. 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; . 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. . 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 .