Sec. 6. Paycheck protection program second draw loans

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Section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) ) is amended by adding at the end the following: In this paragraph— the terms community financial institutions , credit union , eligible self-employed individual , insured depository institution , nonprofit organization , payroll costs , seasonal employer , and veterans organization have the meanings given those terms in paragraph (36), except that eligible entity shall be substituted for eligible recipient each place it appears in the definitions of those terms; the term covered loan means a loan made under this paragraph; the terms covered mortgage obligation , covered operating expenditure , covered property damage cost , covered rent obligation , covered supplier cost , covered utility payment , and covered worker protection expenditure have the meanings given those terms in section 1106(a) of the CARES Act ( 15 U.S.C. 9005(a) ); the term covered period means the period beginning on the date of the origination of a covered loan and ending on December 31, 2020; the terms exchange , issuer , and security have the meanings given those terms in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ); the term eligible entity — means any business concern, nonprofit organization, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that— with respect to a business concern, would qualify as a small business concern by the annual receipts size standard (if applicable) established by section 121.201 of title 13, Code of Federal Regulations, or any successor regulation; or if the entity does not qualify as a small business concern, meets the alternative size standard established under section 3(a)(5); employs not more than 300 employees; and except as provided in subitems (BB), (CC), and (DD), had gross receipts during the first or second quarter in 2020 that are not less than 35 percent less than the gross receipts of the entity during the same quarter in 2019; if the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first or second quarter of 2020 that are less than 35 percent of the amount of the gross receipts of the entity during the third or fourth quarter of 2019; if the entity was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, had gross receipts during the first or second quarter of 2020 that are less than 35 percent of the amount of the gross receipts of the entity during the fourth quarter of 2019; or if the entity was not in business during 2019, but was in operation on February 15, 2020, had gross receipts during the second quarter of 2020 that are less than 35 percent of the amount of the gross receipts of the entity during the first quarter of 2020; and does not include— an issuer, the securities of which are listed on an exchange registered a national securities exchange under section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78f ); any entity that— is a type of business concern described in subsection (b), (c), (d), (e), (f), (h),

(l)(m), (p), (q), (r), or

(s)of section 120.110 of title 13, Code of Federal Regulations, or any successor regulation; is a type of business concern described in section 120.110(g) of title 13, Code of Federal Regulations, or any successor regulation, except as otherwise provided in the interim final rule of the Administration entitled Business Loan Program Temporary Changes; Paycheck Protection Program—Additional Eligibility Criteria and Requirements for Certain Pledges of Loans (85 Fed. Reg. 21747 (April 20, 2020)); is a type of business concern described in section 120.110(i) of title 13, Code of Federal Regulations, or any successor regulation, except if the business concern is an organization described in paragraph (36)(D)(vii); is a type of business concern described in section 120.110(j) of title 13, Code of Federal Regulations, or any successor regulation, except as otherwise provided in the interim final rules of the Administration entitled Business Loan Program Temporary Changes; Paycheck Protection Program—Eligibility of Certain Electric Cooperatives (85 Fed. Reg. 29847 (May 19, 2020)) and Business Loan Program Temporary Changes; Paycheck Protection Program—Eligibility of Certain Telephone Cooperatives (85 Fed. Reg. 35550 (June 11, 2020)) or any other guidance or rule issued or that may be issued by the Administrator; is a type of business concern described in section 120.110(n) of title 13, Code of Federal Regulations, or any successor regulation, except as otherwise provided in the interim final rule of the Administration entitled Business Loan Program Temporary Changes; Paycheck Protection Program—Additional Eligibility Revisions to First Interim Final Rule (85 Fed. Reg. 38301 (June 26, 2020)) or any other guidance or rule issued or that may be issued by the Administrator; is a type of business concern described in section 120.110(o) of title 13, Code of Federal Regulations, or any successor regulation, except as otherwise provided in any guidance or rule issued or that may be issued by the Administrator; or is an entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents; is an entity that would be described in the subsections listed in subitems

(AA)through

(GG)if the entity were a business concern; or is assigned, or was approved for a loan under paragraph

(36)with, a North American Industry Classification System code beginning with 52; any business concern or entity primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents; or any business concern or entity— for which an entity created in or organized under the laws of the People's Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People's Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or that retains, as a member of the board of directors of the business concern, a person who is a resident of the People’s Republic of China; and the term Tribal business concern means a Tribal business concern described in section 31(b)(2)(C). Except as otherwise provided in this paragraph, the Administrator may guarantee covered loans to eligible entities under the same terms, conditions, and processes as a loan made under paragraph (36). Except as otherwise provided in this subparagraph, the maximum amount of a covered loan made to an eligible entity is the lesser of— the product obtained by multiplying— 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; by 2.5; or $2,000,000. The maximum amount of a covered loan made to an eligible entity that is a seasonal employer is the lesser of— the product obtained by multiplying— at the election of the eligible entity, the average total monthly payments for payroll costs incurred or paid by the eligible entity— for a 12-week period beginning February 15, 2019, or March 1, 2019, and ending June 30, 2019; or for a consecutive 12-week period between May 1, 2019, and September 15, 2019; by 2.5; or $1,000,000. 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 lesser of— the product obtained by multiplying— 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 2.5; or $2,000,000. Any eligible entity that employs not more than 300 employees per physical location of the eligible entity and that is assigned a North American Industry Classification System Code beginning with 72 at the time of disbursal shall be eligible to receive a covered loan. With respect to an eligible entity with more than 1 physical location, the total amount of all covered loans shall be not more than $2,000,000. An eligible entity may only receive 1 covered loan. The maximum aggregate loan amount of loans guaranteed under this subsection that are approved for an eligible entity (including any affiliates) within 90 days of approval of another loan under this subsection for the eligible entity (including any affiliates) shall not exceed $10,000,000. An eligible entity applying for a covered loan shall not be required to make the certification described in subclause

(III)or

(IV)of paragraph (36)(G)(i). With respect to a covered loan— in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee. It is the sense of Congress that the interim final rule of the Administration entitled Business Loan Program Temporary Changes; Paycheck Protection Program (85 Fed. Reg. 20817 (April 15, 2020)) properly clarified the eligibility of churches and religious organizations for loans made under paragraph (36). The prohibition on eligibility established by section 120.110(k) of title 13, Code of Federal Regulations, or any successor regulation, shall not apply to a covered loan. For purposes of calculating gross receipts under subparagraph (A)(vi)(I)(cc) for an entity that is a nonprofit organization or a veterans organization, gross receipts— shall include proceeds from fundraising events, federated campaigns, gifts, donor-advised funds, and funds from similar sources; and shall not include— Federal grants (excluding any loan forgiveness on loans received under paragraph

(36)or this paragraph; revenues from a supporting organization; grants from private foundations that are disbursed over the course of more than 1 calendar year; or any contribution of property other than money, stocks, bonds, and other securities, provided that the non-cash contribution is not sold by the organization in a transaction unrelated to the tax-exempt purpose of the organization. Except as provided otherwise provided in this subparagraph, an eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in the same manner as an eligible recipient with respect to a loan made under paragraph (36), as described in section 1106 of the CARES Act ( 15 U.S.C. 9005 ). An eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred or expenditures made during the covered period: Payroll costs. Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation). Any covered operations expenditure. Any covered property damage cost. Any payment on any covered rent obligation. Any covered utility payment. Any covered supplier cost. Any covered worker protection expenditure. The forgiveness amount under this subparagraph shall be equal to the lesser of— the amount described in clause (ii); and the amount equal to the quotient obtained by dividing— the amount of the covered loan used for payroll costs during the covered period; and 0.60. Except as otherwise provided in this paragraph, a lender approved to make loans under paragraph

(36)may make covered loans under the same terms and conditions as in paragraph (36). The Administrator shall reimburse a lender authorized to make a covered loan in an amount that is— 3 percent of the principal amount of the financing of the covered loan up to $350,000; and 1 percent of the principal amount of the financing of the covered loan above $350,000, if applicable. Not less than $25,000,000,000 of the total amount of covered loans guaranteed by the Administrator shall be made to eligible entities with not more than 10 employees as of February 15, 2020. Not less than $10,000,000,000 of the total amount of covered loans guaranteed by the Administrator shall be made by— community financial institutions; insured depository institutions with consolidated assets of less than $10,000,000,000; credit unions with consolidated assets of less than $10,000,000,000; and institutions of the Farm Credit System chartered under the Farm Credit Act of 1971 ( 12 U.S.C. 2001 et seq.) with consolidated assets of less than $10,000,000,000 (not including the Federal Agricultural Mortgage Corporation). Not later than 10 days after the date of enactment of this paragraph, the Administrator shall issue guidance addressing barriers to accessing capital for minority, underserved, veteran, and women-owned business concerns for the purpose of ensuring equitable access to covered loans. The Administrator shall, to the maximum extent practicable, allow a lender approved to make covered loans to use existing program guidance and standard operating procedures for loans made under this subsection. Except as provided in clause (ii), on and after the date of enactment of this paragraph, the Administrator shall comply with any data or information requests or inquiries made by the Comptroller General of the United States or the Inspector General of any agency not later than 30 days (or such later date as the Comptroller General or Inspector General, as applicable, may specify) after receiving the request or inquiry. If the Administrator is unable to comply with a request or inquiry described in clause

(i)within the 30-day period or, if applicable, later period described in that clause, the Administrator shall, during that 30-day (or later) period, submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a notification that includes a detailed justification for the inability of the Administrator to comply with the request or inquiry. 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 ). .

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