Sec. 3. Hard Hit Industries Award Program

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In this section: The term Administrator means the Administrator of the Small Business Administration. The term affiliated business means a business in which an eligible entity— has an equity or right to receive not less than 50 percent of the profit distributions of such business; or has, on or before March 13, 2020, contractual authority to control the business. The term award means a financial assistance payment that an eligible applicant receives directly from the Small Business Administration.

The term covered period means the period beginning on February 15, 2020, and ending on the later of— March 31, 2023; or a date to be determined by the Administrator that is not later than 2 years after the date of enactment of this section. The term eligible entity — means a small business concern that— employs not more than 200 employees; and suffered a pandemic-related revenue loss of 40 percent or greater; and does not include a small business concern that— is a State or local government-operated business; has received a grant under— section 324 of the Economic Aid to Hard Hit Small Businesses, Nonprofits, and Venues Act ( 15 U.S.C. 9009a ); or section 5003 of the American Rescue Plan Act of 2021 ( Public Law 117–2 ); is a publicly-traded company; is an entity that is owned or operated by a private equity fund; or has a wage violation at the time of application.

The term eligible self-employed individual has the meaning given in section 7002(b) of the Families First Coronavirus Response Act ( 26 U.S.C. 1401 note). The terms exchange , issuer , and security have the meanings given those terms, respectively, in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ). The term pandemic-related revenue loss means, subject to subparagraph

(B)and with respect to an eligible entity— except as provided in clauses

(ii)and (iii), the average annual gross receipts during 2020 and 2021, as established using such verification documentation as the Administrator may require, of the eligible entity subtracted from the gross receipts of the eligible entity in 2019, if such sum is greater than zero; if the eligible entity was not in operation for the entirety of 2019— the difference between— the product obtained by multiplying the average monthly gross receipts of the eligible entity in 2019 by 12; and the product obtained by multiplying the average monthly gross receipts of the eligible entity in 2020 and 2021 by 12; or an amount based on a formula determined by the Administrator; or if the eligible entity began operations during the period beginning on January 1, 2020, and ending on the day before the date of enactment of this section, an amount based on a formula determined by the Administrator. For purposes of this paragraph, the pandemic-related revenue losses for an eligible entity calculated under subparagraph

(A)shall be reduced by the sum of— any amount received from a covered loan made under paragraph

(36)or

(37)of section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) ) in 2020 or 2021; any amount received as a grant under section 1110 of the Coronavirus Aid, Relief, and Economic Security Act ( 15 U.S.C. 9009 ); and any amount received as a grant under section 331 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act ( 15 U.S.C. 9009b ). For the purposes of determining the percentage of pandemic-related revenue loss under this subsection, the percentage shall be equal to— in the case of an eligible entity for which subparagraph (A)(i) applies, the product obtained by multiplying— the quotient obtained by dividing the pandemic-related revenue losses for such eligible entity by the gross receipts of the eligible entity in 2019; and 100; in the case of an eligible entity for which subparagraph (A)(ii)(I) applies, the product obtained by multiplying— the quotient obtained by dividing the pandemic-related revenue losses for such eligible entity by the product obtained by multiplying the average monthly gross receipts of the eligible entity in 2019 by 12; and 100; and in the case of an eligible entity for which clauses (ii)(II) or

(iii)applies, an amount based on a formula determined by the Administrator. The term payroll costs has the meaning given the term in section 7(a)(36)(A) of the Small Business Act ( 15 U.S.C. 636(a)(36)(A) ), except that such term shall not include— qualified wages, as defined in section 2301(c) of the CARES Act ( 26 U.S.C. 3111 note), taken into account in determining the credit allowed under such section 2301; or premiums taken into account in determining the credit allowed under section 6432 of the Internal Revenue Code of 1986. The term private equity fund has the meaning given the term in section 225.173(a) of title 12, Code of Federal Regulations, or any successor regulation. The term publicly-traded company means an entity that is majority owned or controlled by an entity that is an issuer, the securities of which are listed on a national securities exchange under section 6 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78f ). The term small business concern has the meaning given under section 3 of the Small Business Act ( 15 U.S.C. 632 ) and includes— individuals who operate under a sole proprietorship, as an independent contractor, or as an eligible self-employed individual; and small business concerns described in subparagraphs (B), (C), and

(D)of section 31(b)(2) of the Small Business Act ( 15 U.S.C. 657a(b)(2) ). The terms covered mortgage obligation , covered operations expenditure , covered rent obligation , covered supplier cost , covered utility payment , and covered worker protection expenditure have the meanings given, respectively, in section 7A of the Small Business Act ( 15 U.S.C. 636m ). From amounts made available under this Act, the Administrator shall establish a program to be known as the Hard Hit Industries Award Program , under which the Administrator shall make awards to eligible entities that submit an application under paragraph (2). An eligible entity shall submit to the Administrator an application for an award under this subsection. In such application, the eligible entity shall make a good faith certification that— the uncertainty of current economic conditions makes necessary the award request to support the ongoing operations of the eligible entity; and the eligible entity has no pending application for and has not received a grant under— section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act ( 15 U.S.C. 9009a ); or section 5003 of the American Rescue Plan Act of 2021 ( 15 U.S.C. 9009c ). The Administrator shall use tax records or other reliable sources, such as certified accounting statements, with respect to an applicant for an award under this section to determine— the eligibility of the applicant for that award; and the amount of that award to the applicant. Not later than 120 days after the date of the enactment of this Act, the Administrator shall begin accepting applications for an award under this subsection. The Administrator shall prioritize eligible entities that have experienced significant pandemic-related revenue loss to receive an award under this section as follows: First priority to eligible entities that experienced a pandemic-related revenue loss of at least 80 percent. Second priority to eligible entities that experienced a pandemic-related revenue loss of at least 60 percent. Within each category of eligible entities described in subclauses

(I)through

(III)of clause (i), the Administrator may prioritize awards to eligible entities with 50 employees or fewer. Within each category of eligible entities described in subclauses

(I)through

(III)of clause (i), the Administrator may prioritize awards to eligible entities that did not receive a covered loan made under paragraph

(36)or

(37)of section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) ) in 2020 or 2021. The aggregate maximum amount of awards made to an eligible entity and any affiliated businesses of the eligible entity under this subsection may not exceed $1,000,000. Except as provided in this paragraph, the amount of an award made to an eligible entity under this subsection shall be equal to the pandemic-related revenue loss of the eligible entity. Any amount of an award made under this subsection to an eligible entity described in clause

(ii)or

(iii)of subsection (a)(8)(A) that is greater than the average annual gross receipts of the eligible entity in 2020 and 2021 shall be returned to the Treasury. After selecting award recipients in accordance with paragraph (2)(D) and before disbursing any awards under this section, if the Administrator determines that the amounts made available under this Act for making awards under this section are insufficient to make awards to each eligible entity that submits an application under paragraph

(2)in the amount described under subparagraphs

(A)and (B), the Administrator may make awards with the available amounts such that the amount of the award that each eligible entity would have otherwise received under those subparagraphs and in accordance with paragraph (2)(D) is reduced by a percentage, except that the Administrator may establish an aggregate maximum amount for awards made under this subparagraph and in accordance with paragraph (2)(D) to ensure that smaller eligible entities receive awards in the amounts provided under those subparagraphs. During the covered period, an eligible entity that receives an award under this subsection may use the award for the following expenses incurred as a direct result of, or during, the COVID–19 pandemic: Payroll costs. Payments to independent contractors, as reported on Form 1099–MISC, except that each such payment may not exceed $100,000. Scheduled payments of interest or principal on any covered mortgage obligation (which may not include any prepayment of principal on a covered mortgage obligation). Payments on any covered rent obligation and common area maintenance charges under a lease agreement. Covered utility payments. Maintenance expenses. Covered worker protection expenditures. Supplies, including protective equipment and cleaning materials. Expenses that were within the scope of the normal business practice of the eligible entity before the covered period. Covered supplier costs. Covered operational expenses. Paid sick leave. Capital expenditures (or expenses required under any Federal, State, or local law) relating to implementing social distancing measures. Any other essential expenses of the eligible entity, as determined by the Administrator. If an eligible entity that receives an award under this section fails to use all of the award on or before the last day of the covered period or permanently ceases operations on or before the last day of the covered period, the eligible entity shall return to the Administrator any funds that the eligible entity did not use for the allowable expenses under paragraph (4). The Administrator shall— in carrying out this section, maintain regular communication with applicants and representatives of such applicants, including by— hosting regularly scheduled information sessions with those persons; and providing opportunities to those persons to submit and receive answers to questions regarding awards made under this section; on a weekly basis until the amounts made available under this section are fully expended, publish data that shows, for the period beginning on the date of enactment of this Act and ending on the date on which the information is published— with respect to applications for awards under this section, the number of those applications— that the Administrator has received; that the Administrator has reviewed or is in the process of reviewing; and with respect to which the Administrator has made a decision; and the number and dollar amount of payments awarded and disbursed under this section; on a weekly basis until the amounts made available to carry out this section are fully expended, publish, for the period beginning on the date of enactment of this Act and ending on the date on which the information is published— the name and location of each eligible entity to which an award has been made under this section; and the amount of such award; with respect to an applicant that applies for an award under this section and is denied by the Administrator— make available to the applicant a brief explanation regarding the denial which shall include, where applicable, a citation to the statute, regulation, or guidance with which the applicant failed to comply and that was the basis for the denial; and establish a reconsideration process through which the applicant may— submit to the Administrator additional information the applicant determines to be relevant to whether the applicant is eligible for the grant; and receive a review of the application and such additional information submitted under clause (i). For the purposes of the Internal Revenue Code of 1986— no award made under this section shall be included in the gross income of the eligible entity that receives an award; no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by subparagraph (A); and in the case of a partnership or S corporation that receives an award under this section— any amount excluded from income by reason of subparagraph

(A)shall be treated as tax exempt for purposes of sections 705 and 1366 of such Code; and the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe rules for determining a partner’s distributive share of any amount described in clause

(i)for purposes of section 705 of such Code. Paragraph

(1)shall apply to taxable years ending after the date of enactment of this Act. The Administrator may not require any eligible entity that applies for an award under this section to use the System for Award Management (or any successor system) with respect to that award. The Director of the Office of Management and Budget may, on an emergency basis and in order to expedite the processing and approval of applications for awards under this section, waive the requirements of part 200 of title 2, Code of Federal Regulations (or any successor regulations) with respect to an award made under this section, if— the Director finds that such a waiver will prevent eligible entities from failing or suffering undue hardship; and each eligible entity that receives an award under this section is still required to submit to the Administrator ongoing reports regarding the use by the eligible entity of the award amounts. In cooperation with the Director of the Office of Management and Budget, the Administrator shall establish an oversight and audit plan with respect to eligible entities receiving awards under this section, which shall include— documentation requirements that are consistent with the eligibility and other requirements under this section, including a requirement that an eligible entity that receives an award under this section retains records that demonstrate compliance with the requirements of this section; and reviews of the use, by eligible entities, of awards made under this section to ensure compliance with the requirements of this section, which shall include— a review and audit by the Administrator of awards made under this section; and in the case of fraud or other material noncompliance with respect to an award made under this section— a requirement that the applicable eligible entity repay to the Administrator the amount of the misspent funds; or legal action by the Administrator to collect the misspent funds. Not later than 30 days after the date of the enactment of this Act, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives the plan required under paragraph (1), which shall describe— the policies and procedures of the Administrator for conducting oversight and audits of awards made under this section; and the metrics that the Administrator will use to determine which awards made under this section will be audited under that plan. Not later than 60 days after the date of the enactment of this Act, once every 30 days thereafter until the date that is 180 days after the date on which all amounts made available to carry out this section have been fully expended, and upon request thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the oversight and audit activities of the Administrator under this subsection, which shall include— the total number of awards approved and disbursed under this section; the total amount of each award received by each eligible entity; the number of active investigations and audits of awards made under this section; the number of completed reviews and audits of awards made under this section, including a description of any findings of fraud or other material noncompliance with the requirements of this section; and a description of any substantial changes made to the plan required under paragraph (1). Not later than 90 days after the date of the enactment of this Act, the Administrator shall issue rules to carry out this section, without regard to the notice requirements under section 553(b) of title 5, United States Code. In addition to amounts otherwise available, there is appropriated for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $13,000,000,000, for the Hard Hit Industries Award Program established under this section, to remain available until expended, of which not more than $380,000,000 shall be for administrative expenses to carry out this section, of which— $2,500,000 shall be for the Inspector General of the Small Business Administration to prevent waste, fraud, and abuse with respect to funding made available for the Hard Hit Industries Award Program; $2,500,000 shall be for the Department of Justice for investigative and prosecutorial activities related to fraud and abuse, with respect to funding made available for the Hard Hit Industries Award Program; and $2,500,000 shall be for shall be for the Pandemic Response Accountability Committee with respect to funding made available for the Hard Hit Industries Award Program.

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