15 U.S.C. 636m, loan forgiveness (U.S. Code, 2024 edition)
Summary
The U.S. Code text of 15 U.S.C. § 636m, Loan forgiveness, in Title 15—Commerce and Trade, with notes. Subsection (a) defines a covered loan as a loan guaranteed under section 636(a)(36) and a covered mortgage obligation as debt that is a liability of the borrower, is a mortgage on real or personal property and was incurred before February 15, 2020. The covered period begins on the date of origination of a covered loan and ends on a date the eligible recipient selects between 8 weeks and 24 weeks after origination. Other definitions cover operations expenditures, property damage costs from public disturbances during 2020, supplier costs and worker protection expenditures related to COVID–19.
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§ 636m TITLE 15—COMMERCE AND TRADE Page 884
Editorial Notes (9) the term ‘‘covered worker protection ex-
CODIFICATION penditure’’—
(A) means an operating or a capital ex-
Section was enacted as part of the National Defense penditure to facilitate the adaptation of the
Authorization Act for Fiscal Year 2020, and not as part
business activities of an entity to comply
of the Small Business Act which comprises this chap-
ter. with requirements established or guidance
issued by the Department of Health and
§ 636m. Loan forgiveness Human Services, the Centers for Disease
(a) Definitions Control, or the Occupational Safety and
Health Administration, or any equivalent
In this section— requirements established or guidance issued
(1) the term ‘‘covered loan’’ means a loan by a State or local government, during the
guaranteed under section 636(a)(36) of this period beginning on March 1, 2020 and ending
title; the date on which the national emergency
(2) the term ‘‘covered mortgage obligation’’ declared by the President under the Na-
means any indebtedness or debt instrument tional Emergencies Act (50 U.S.C. 1601 et
incurred in the ordinary course of business seq.) with respect to the Coronavirus Disease
that— 2019 (COVID–19) expires related to the main-
(A) is a liability of the borrower; tenance of standards for sanitation, social
(B) is a mortgage on real or personal prop- distancing, or any other worker or customer
erty; and safety requirement related to COVID–19;
(C) was incurred before February 15, 2020; (B) may include—
(3) the term ‘‘covered operations expendi- (i) the purchase, maintenance, or renova-
ture’’ means a payment for any business soft- tion of assets that create or expand—
ware or cloud computing service that facili- (I) a drive-through window facility;
tates business operations, product or service (II) an indoor, outdoor, or combined air
delivery, the processing, payment, or tracking or air pressure ventilation or filtration
of payroll expenses, human resources, sales system;
(III) a physical barrier such as a sneeze
and billing functions, or accounting or track-
guard;
ing of supplies, inventory, records and ex-
(IV) an expansion of additional indoor,
penses;
outdoor, or combined business space;
(4) the term ‘‘covered period’’ means the pe- (V) an onsite or offsite health screen-
riod— ing capability; or
(A) beginning on the date of the origina- (VI) other assets relating to the com-
tion of a covered loan; and pliance with the requirements or guid-
(B) ending on a date selected by the eligi- ance described in subparagraph (A), as
ble recipient of the covered loan that occurs determined by the Administrator in con-
during the period— sultation with the Secretary of Health
(i) beginning on the date that is 8 weeks and Human Services and the Secretary
after such date of origination; and of Labor; and
(ii) ending on the date that is 24 weeks
after such date of origination; (ii) the purchase of—
(I) covered materials described in sec-
(5) the term ‘‘covered property damage cost’’ tion 328.103(a) of title 44, Code of Federal
means a cost related to property damage and Regulations, or any successor regula-
vandalism or looting due to public disturb- tion;
ances that occurred during 2020 that was not (II) particulate filtering facepiece res-
covered by insurance or other compensation; pirators approved by the National Insti-
(6) the term ‘‘covered rent obligation’’ tute for Occupational Safety and Health,
means rent obligated under a leasing agree- including those approved only for emer-
ment in force before February 15, 2020; gency use authorization; or
(7) the term ‘‘covered supplier cost’’ means (III) other kinds of personal protective
an expenditure made by an entity to a supplier equipment, as determined by the Admin-
of goods for the supply of goods that— istrator in consultation with the Sec-
(A) are essential to the operations of the retary of Health and Human Services
entity at the time at which the expenditure and the Secretary of Labor; and
is made; and (C) does not include residential real prop-
(B) is made pursuant to a contract, order, erty or intangible property;
or purchase order—
(i) in effect at any time before the cov- (10) the term ‘‘eligible recipient’’ means the
ered period with respect to the applicable recipient of a covered loan;
covered loan; or (11) the term ‘‘expected forgiveness amount’’
(ii) with respect to perishable goods, in means the amount of principal that a lender
effect before or at any time during the reasonably expects a borrower to expend dur-
covered period with respect to the applica- ing the covered period on the sum of any—
ble covered loan; (A) payroll costs;
(B) payments of interest on any covered
(8) the term ‘‘covered utility payment’’ mortgage obligation (which shall not include
means payment for a service for the distribu- any prepayment of or payment of principal
tion of electricity, gas, water, transportation, on a covered mortgage obligation);
telephone, or internet access for which service (C) payments on any covered rent obliga-
began before February 15, 2020; tion;
Page 885 TITLE 15—COMMERCE AND TRADE § 636m
(D) covered utility payments; istrator, a third party participant in the sec-
(E) covered operations expenditures; ondary market, may, report to the Adminis-
(F) covered property damage costs; trator an expected forgiveness amount on a
(G) covered supplier costs; and covered loan or on a pool of covered loans of
(H) covered worker protection expendi- up to 100 percent of the principal on the cov-
tures; and ered loan or pool of covered loans, respec-
(12) the terms ‘‘payroll costs’’ and ‘‘seasonal tively.
employer’’ have the meanings given those (B) Purchase
terms in section 636(a)(36) of this title. Such
payroll costs shall not include qualified wages The Administrator shall purchase the ex-
taken into account in determining the credit pected forgiveness amount described in sub-
allowed under section 2301 of the CARES Act, paragraph (A) as if the amount were the
qualified wages taken into account in deter- principal amount of a loan guaranteed under
mining the credit allowed under subsection (a) section 636(a) of this title.
or (d) of section 303 of the Taxpayer Certainty (C) Timing
and Disaster Relief Act of 2020, or premiums
Not later than 15 days after the date on
taken into account in determining the credit
which the Administrator receives a report
allowed under section 6432 of title 26. Such
under subparagraph (A), the Administrator
payroll costs shall not include qualified wages
shall purchase the expected forgiveness
taken into account in determining the credit
amount under subparagraph (B) with respect
allowed under subsection (a) or (d) of section
to each covered loan to which the report re-
303 of the Taxpayer Certainty and Disaster
lates.
Tax Relief Act of 2020.1
(b) Forgiveness (d) Limits on amount of forgiveness
An eligible recipient shall be eligible for for- (1) Amount may not exceed principal
giveness of indebtedness on a covered loan in an The amount of loan forgiveness under this
amount equal to the sum of the following costs section shall not exceed the principal amount
incurred and payments made during the covered of the financing made available under the ap-
period: plicable covered loan.
(1) Payroll costs.
(2) Any payment of interest on any covered (2) Reduction based on reduction in number of
mortgage obligation (which shall not include employees
any prepayment of or payment of principal on (A) In general
a covered mortgage obligation).
(3) Any payment on any covered rent obliga- The amount of loan forgiveness under this
tion. section shall be reduced, but not increased,
(4) Any covered utility payment. by multiplying the amount described in sub-
(5) Any covered operations expenditure. section (b) by the quotient obtained by di-
(6) Any covered property damage cost. viding—
(7) Any covered supplier cost. (i) the average number of full-time
(8) Any covered worker protection expendi- equivalent employees per month employed
ture. by the eligible recipient during the cov-
(c) Treatment of amounts forgiven ered period; by
(1) In general (ii)(I) at the election of the borrower—
(aa) the average number of full-time
Amounts which have been forgiven under equivalent employees per month em-
this section shall be considered canceled in- ployed by the eligible recipient during
debtedness by a lender authorized under sec- the period beginning on February 15, 2019
tion 636(a) of this title. and ending on June 30, 2019; or
(2) Purchase of guarantees (bb) the average number of full-time
For purposes of the purchase of the guar- equivalent employees per month em-
antee for a covered loan by the Administrator, ployed by the eligible recipient during
amounts which are forgiven under this section the period beginning on January 1, 2020
shall be treated in accordance with the proce- and ending on February 29, 2020; or
dures that are otherwise applicable to a loan (II) in the case of an eligible recipient
guaranteed under section 636(a) of this title. that is seasonal employer, as determined
(3) Remittance by the Administrator, the average number
Not later than 90 days after the date on of full-time equivalent employees per
which the amount of forgiveness under this month employed by the eligible recipient
section is determined, the Administrator shall during the period beginning on February
remit to the lender an amount equal to the 15, 2019 and ending on June 30, 2019.
amount of forgiveness, plus any interest ac- (B) Calculation of average number of employ-
crued through the date of payment. ees
(4) Advance purchase of covered loan
For purposes of subparagraph (A), the av-
(A) Report
erage number of full-time equivalent em-
A lender authorized under section 636(a) of ployees shall be determined by calculating
this title, or, at the discretion of the Admin- the average number of full-time equivalent
employees for each pay period falling within
1 So in original. a month.
§ 636m TITLE 15—COMMERCE AND TRADE Page 886
(3) Reduction relating to salary and wages duction in the salary or wages of such
(A) In general employees; or
The amount of loan forgiveness under this (iii) in which the events described in
section shall be reduced by the amount of clause (i) and (ii) occur.
any reduction in total salary or wages of any (6) Exemptions
employee described in subparagraph (B) dur- The Administrator and the Secretary of the
ing the covered period that is in excess of 25 Treasury may prescribe regulations granting
percent of the total salary or wages of the de minimis exemptions from the requirements
employee during the most recent full quar- under this subsection.
ter during which the employee was employed
(7) Exemption based on employee availability
before the covered period.
During the period beginning on February 15,
(B) Employees described
2020, and ending on December 31, 2020 (or, with
An employee described in this subpara- respect to a covered loan made on or after De-
graph is any employee who did not receive, cember 27, 2020, ending on the last day of the
during any single pay period during 2019, covered period with respect to such covered
wages or salary at an annualized rate of pay loan), the amount of loan forgiveness under
in an amount more than $100,000. this section shall be determined without re-
(4) Tipped workers gard to a proportional reduction in the num-
An eligible recipient with tipped employees ber of full-time equivalent employees if an eli-
described in section 203(m)(2)(A) of title 29 gible recipient, in good faith—
may receive forgiveness for additional wages (A) is able to document—
(i) an inability to rehire individuals who
paid to those employees.
were employees of the eligible recipient on
(5) Exemption for re-hires February 15, 2020; and
(A) In general (ii) an inability to hire similarly quali-
In a circumstance described in subpara- fied employees for unfilled positions on or
graph (B), the amount of loan forgiveness before December 31, 2020 (or, with respect
under this section shall be determined with- to a covered loan made on or after Decem-
out regard to a reduction in the number of ber 27, 2020, on or before the last day of the
full-time equivalent employees of an eligible covered period with respect to such cov-
recipient or a reduction in the salary of 1 or ered loan); or
more employees of the eligible recipient, as (B) is able to document an inability to re-
applicable, during the period beginning on turn to the same level of business activity as
February 15, 2020 and ending on the date such business was operating at before Feb-
that is 30 days after March 27, 2020. ruary 15, 2020, due to compliance with re-
(B) Circumstances quirements established or guidance issued
by the Secretary of Health and Human Serv-
A circumstance described in this subpara-
ices, the Director of the Centers for Disease
graph is a circumstance—
Control and Prevention, or the Occupational
(i) in which—
Safety and Health Administration during
(I) during the period beginning on Feb-
the period beginning on March 1, 2020, and
ruary 15, 2020 and ending on the date
ending December 31, 2020 (or, with respect to
that is 30 days after March 27, 2020, there
a covered loan made on or after December
is a reduction, as compared to February
27, 2020, ending on the last day of the covered
15, 2020, in the number of full-time equiv-
period with respect to such covered loan), re-
alent employees of an eligible recipient;
lated to the maintenance of standards for
and
sanitation, social distancing, or any other
(II) not later than December 31, 2020
worker or customer safety requirement re-
(or, with respect to a covered loan made
lated to COVID–19.
on or after December 27, 2020, not later
than the last day of the covered period (8) Limitation on forgiveness
with respect to such covered loan), the To receive loan forgiveness under this sec-
eligible employer has eliminated the re- tion, an eligible recipient shall use at least 60
duction in the number of full-time equiv- percent of the covered loan amount for payroll
alent employees; costs, and may use up to 40 percent of such
amount for any payment of interest on any
(ii) in which—
covered mortgage obligation (which shall not
(I) during the period beginning on Feb-
include any prepayment of or payment of prin-
ruary 15, 2020 and ending on the date
cipal on a covered mortgage obligation), any
that is 30 days after March 27, 2020, there
payment on any covered rent obligation, any
is a reduction, as compared to February
payment on any covered operations expendi-
15, 2020, in the salary or wages of 1 or
ture, any payment on any covered property
more employees of the eligible recipient;
damage cost, any payment on any covered sup-
and
plier cost, any payment on any covered worker
(II) not later than December 31, 2020
protection expenditure, or any covered utility
(or, with respect to a covered loan made
payment.
on or after December 27, 2020, not later
than the last day of the covered period (e) Application
with respect to such covered loan), the Except as provided in subsection (l), an eligi-
eligible employer has eliminated the re- ble recipient seeking loan forgiveness under this
Page 887 TITLE 15—COMMERCE AND TRADE § 636m
section shall submit to the lender that is serv- guidance related to initial or second draw
icing the covered loan an application, which PPP loan, including under paragraph (36) or
shall include— (37) of section 636(a) of this title and under
(1) documentation verifying the number of this section; and
full-time equivalent employees on payroll and (B) attests that the applicant, eligible re-
pay rates for the periods described in sub- cipient, or eligible entity, as applicable, has
section (d), including— accurately provided the certification or doc-
(A) payroll tax filings reported to the In- umentation to the lender in accordance with
ternal Revenue Service; and the statutory requirements, regulations, and
(B) State income, payroll, and unemploy- guidance described in subparagraph (A).
ment insurance filings; (3) No enforcement action
(2) documentation, including cancelled With respect to a lender that relies on a cer-
checks, payment receipts, transcripts of ac- tification or documentation described in para-
counts, purchase orders, orders, invoices, or graph (2) related to an initial or second draw
other documents verifying payments on cov- PPP loan, an enforcement action may not be
ered mortgage obligations, payments on cov- taken against the lender, and the lender shall
ered rent obligations, payments on covered op- not be subject to any penalties relating to
erations expenditures, payments on covered loan origination or forgiveness of the initial or
property damage costs, payments on covered second draw PPP loan, if—
supplier costs, payments on covered worker (A) the lender acts in good faith relating
protection expenditures, and covered utility to loan origination or forgiveness of the ini-
payments; tial or second draw PPP loan based on that
(3) a certification from a representative of reliance; and
the eligible recipient authorized to make such (B) all other relevant Federal, State, local,
certifications that— and other statutory and regulatory require-
(A) the documentation presented is true ments applicable to the lender are satisfied
and correct; and with respect to the initial or second draw
(B) the amount for which forgiveness is re- PPP loan.
quested was used to retain employees, make
interest payments on a covered mortgage (i) Tax treatment
obligation, make payments on a covered For purposes of title 26—
rent obligation, make payments on covered (1) no amount shall be included in the gross
operations expenditures, make payments on income of the eligible recipient by reason of
covered property damage costs, make pay- forgiveness of indebtedness described in sub-
ments on covered supplier costs, make pay- section (b),
ments on covered worker protection expend- (2) no deduction shall be denied, no tax at-
itures, or make covered utility payments; tribute shall be reduced, and no basis increase
and shall be denied, by reason of the exclusion
(4) any other documentation the Adminis- from gross income provided by paragraph (1),
trator determines necessary. and
(3) in the case of an eligible recipient that is
(f) Prohibition on forgiveness without docu- a partnership or S corporation—
mentation (A) any amount excluded from income by
No eligible recipient shall receive forgiveness reason of paragraph (1) shall be treated as
under this section without submitting to the tax exempt income for purposes of sections
lender that is servicing the covered loan the 705 and 1366 of title 26, and
documentation required under subsection (e) or (B) except as provided by the Secretary of
the certification required under subsection (l), the Treasury (or the Secretary’s delegate),
as applicable. any increase in the adjusted basis of a part-
(g) Decision ner’s interest in a partnership under section
Not later than 60 days after the date on which 705 of title 26 with respect to any amount de-
a lender receives an application for loan forgive- scribed in subparagraph (A) shall equal the
ness under this section from an eligible recipi- partner’s distributive share of deductions re-
ent, the lender shall issue a decision on the an 1 sulting from costs giving rise to forgiveness
application. described in subsection (b).
(h) Hold harmless (j) Rule of construction
(1) Definition The cancellation of indebtedness on a covered
In this subsection, the term ‘‘initial or sec- loan under this section shall not otherwise mod-
ond draw PPP loan’’ means a covered loan or ify the terms and conditions of the covered loan.
a loan under paragraph (37) of section 636(a) of (k) Regulations
this title. Not later than 30 days after March 27, 2020, the
(2) Reliance Administrator shall issue guidance and regula-
A lender may rely on any certification or tions implementing this section.
documentation submitted by an applicant for (l) Simplified application
an initial or second draw PPP loan or an eligi- (1) Covered loans up to $150,000
ble recipient or eligible entity receiving ini-
tial or second draw PPP loan that— (A) In general
(A) is submitted pursuant to all applicable With respect to a covered loan made to an
statutory requirements, regulations, and eligible recipient that is not more than
§ 636m TITLE 15—COMMERCE AND TRADE Page 888
$150,000, the covered loan amount shall be (iii) in the case of fraud, ineligibility, or
forgiven under this section if the eligible re- other material noncompliance with appli-
cipient— cable loan or loan forgiveness require-
(i) signs and submits to the lender a cer- ments, modify—
tification, to be established by the Admin- (I) the amount of a covered loan de-
istrator not later than 24 days after De- scribed in subparagraph (A); or
cember 27, 2020, which— (II) the loan forgiveness amount with
(I) shall be not more than 1 page in respect to a covered loan described in
length; and subparagraph (A).
(II) shall only require the eligible re- (2) Covered loans of more than $150,000
cipient to provide—
(aa) a description of the number of (A) In general
employees the eligible recipient was With respect to a covered loan in an
able to retain because of the covered amount that is more than $150,000, the eligi-
loan; ble recipient shall submit to the lender that
(bb) the estimated amount of the is servicing the covered loan the documenta-
covered loan amount spent by the eli- tion described in subsection (e).
gible recipient on payroll costs; and (B) Demographic information
(cc) the total loan value;
The process for submitting the documenta-
(ii) attests that the eligible recipient tion described in subsection (e) shall include
has— a means by which an eligible recipient may,
(I) accurately provided the required at the discretion of the eligible recipient,
certification; and submit demographic information of the
(II) complied with the requirements owner of the eligible recipient, including the
under section 636(a)(36) of this title; and sex, race, ethnicity, and veteran status of
(iii) retains records relevant to the form the owner.
that prove compliance with such require- (3) Forgiveness audit plan
ments— (A) In general
(I) with respect to employment
records, for the 4-year period following Not later than 45 days after December 27,
submission of the form; and 2020, the Administrator shall submit to the
(II) with respect to other records, for Committee on Small Business and Entrepre-
the 3-year period following submission of neurship of the Senate and the Committee
the form. on Small Business of the House of Rep-
resentatives an audit plan that details—
(B) Limitation on requiring additional mate- (i) the policies and procedures of the Ad-
rials ministrator for conducting forgiveness re-
An eligible recipient of a covered loan that views and audits of covered loans; and
is not more than $150,000 shall not, at the (ii) the metrics that the Administrator
time of the application for forgiveness, be shall use to determine which covered loans
required to submit any application or docu- will be audited.
mentation in addition to the certification (B) Reports
and information required to substantiate
forgiveness. Not later than 30 days after the date on
which the Administrator submits the audit
(C) Records for other requirements plan required under subparagraph (A), and
Nothing in subparagraph (A) or (B) shall be each month thereafter, the Administrator
construed to exempt an eligible recipient shall submit to the Committee on Small
from having to provide documentation inde- Business and Entrepreneurship of the Senate
pendently to a lender to satisfy relevant and the Committee on Small Business of the
Federal, State, local, or other statutory or House of Representatives a report on the for-
regulatory requirements, or in connection giveness review and audit activities of the
with an audit as authorized under subpara- Administrator under this subsection, which
graph (E). shall include—
(D) Demographic information (i) the number of active reviews and au-
dits;
The certification established by the Ad- (ii) the number of reviews and audits
ministrator under subparagraph (A) shall in- that have been ongoing for more than 60
clude a means by which an eligible recipient days; and
may, at the discretion of the eligible recipi- (iii) any substantial changes made to the
ent, submit demographic information of the audit plan submitted under subparagraph
owner of the eligible recipient, including the (A).
sex, race, ethnicity, and veteran status of
the owner. (Pub. L. 85–536, § 2[7A], formerly Pub. L. 116–136,
div. A, title I, § 1106, Mar. 27, 2020, 134 Stat. 297;
(E) Audit authority Pub. L. 116–142, § 3(b), June 5, 2020, 134 Stat. 641;
The Administrator may— renumbered Pub. L. 85–536, § 2[7A], and amended
(i) review and audit covered loans de- Pub. L. 116–260, div. N, title II, § 276(a)(1), title
scribed in subparagraph (A); III, §§ 304(b)(1)(A), (B), (2), 305(a), 306, 307(a),
(ii) access any records described in sub- 311(b)(1), 315(b), div. EE, title II, § 206(c)(1), title
paragraph (A)(iii); and III, § 303(g), Dec. 27, 2020, 134 Stat. 1979, 1993, 1994,
Page 889 TITLE 15—COMMERCE AND TRADE § 636m
1996–1998, 2006, 2011, 3060, 3079; Pub. L. 117–2, title taken into account in determining the credit allowed
V, § 5001(c)(1), Mar. 11, 2021, 135 Stat. 84.) under section 2301 of the CARES Act or qualified wages
taken into account in determining the credit allowed
Editorial Notes under subsection (a) or (d) of section 303 of the Tax-
payer Certainty and Disaster Relief Act of 2020.’’
REFERENCES IN TEXT Pub. L. 116–260, div. N, § 315(b), amended par. (12) gen-
The National Emergencies Act, referred to in subsec. erally. Prior to amendment, par. (12) read as follows:
(a)(9)(A), is Pub. L. 94–412, Sept. 14, 1976, 90 Stat. 1255, ‘‘the term ‘payroll costs’ has the meaning given that
which is classified principally to chapter 34 (§ 1601 et term in paragraph (36) of section 636(a) of this title, as
seq.) of Title 50, War and National Defense. For com- added by section 1102 of this Act.’’
plete classification of this Act to the Code, see Short Pub. L. 116–260, div. N, § 304(b)(2)(A)(i), redesignated
Title note set out under section 1601 of Title 50 and Ta- par. (8) as (12).
bles. Subsec. (b)(5) to (8). Pub. L. 116–260, div. N,
Section 1102 of this Act, referred to in subsec. (a)(12), § 304(b)(2)(B), added pars. (5) to (8).
means section 1102 of div. A of Pub. L. 116–136. Subsec. (c). Pub. L. 116–260, div. N, § 304(b)(1)(B)(ii),
Section 2301 of the CARES Act, referred to in subsec. made technical amendment to references in original
(a)(12), is section 2301 of Pub. L. 116–136, which is set out act which appear in text wherever appearing as ref-
as a note under section 3111 of Title 26, Internal Rev- erences to section 636(a) of this title.
enue Code. Subsec. (d)(5)(B)(i)(II), (ii)(II). Pub. L. 116–260, div. N,
Section 303 of the Taxpayer Certainty and Disaster § 311(b)(1)(A), inserted ‘‘(or, with respect to a covered
Relief Act of 2020, referred to in subsec. (a)(12), is sec- loan made on or after December 27, 2020, not later than
tion 303 of div. EE of Pub. L. 116–260, Dec. 27, 2020, 134 the last day of the covered period with respect to such
Stat. 3075. Subsec. (d)(3)(C) of section 303 of the Act covered loan)’’ after ‘‘December 31, 2020’’.
amended provisions set out as notes under section 3111 Pub. L. 116–142, § 3(b)(2)(A), substituted ‘‘December 31,
of Title 26, Internal Revenue Code. Subsecs. (a) to (c) 2020’’ for ‘‘June 30, 2020’’.
and the rest of subsec. (d) of section 303 of the Act are Subsec. (d)(7). Pub. L. 116–260, div. N, § 311(b)(1)(B), in
not classified to the Code. introductory provisions and subpar. (B) inserted ‘‘(or,
with respect to a covered loan made on or after Decem-
CODIFICATION ber 27, 2020, ending on the last day of the covered period
Section was formerly classified to section 9005 of this with respect to such covered loan)’’ after ‘‘December 31,
title prior to renumbering by section 304(b)(1)(A) of 2020’’ and in subpar. (A)(ii) inserted ‘‘(or, with respect
title III of div. N of Pub. L. 116–260. to a covered loan made on or after December 27, 2020,
on or before the last day of the covered period with re-
AMENDMENTS spect to such covered loan)’’ after ‘‘December 31, 2020’’.
2021—Subsec. (a)(12). Pub. L. 117–2, § 5001(c)(1)(B), Pub. L. 116–142, § 3(b)(2)(B), added par. (7).
which directed insertion of ‘‘, or premiums taken into Subsec. (d)(8). Pub. L. 116–260, div. N, § 304(b)(2)(C), in-
account in determining the credit allowed under sec- serted ‘‘any payment on any covered operations ex-
tion 6432 of title 26’’ before the period at the end of par. penditure, any payment on any covered property dam-
(12), was executed by making the insertion before the age cost, any payment on any covered supplier cost,
period at end of the penultimate sentence, to reflect any payment on any covered worker protection expend-
the probable intent of Congress and the addition of a iture,’’ after ‘‘rent obligation,’’.
Pub. L. 116–142, § 3(b)(2)(B), added par. (8).
duplicative final sentence by section 303(g) of Pub. L.
Subsec. (e). Pub. L. 116–260, div. N, § 307(a)(1), sub-
116–260. See 2020 Amendment note below.
Pub. L. 117–2, § 5001(c)(1)(A), substituted ‘‘CARES stituted ‘‘Except as provided in subsection (l), an eligi-
Act,’’ for ‘‘CARES Act or’’. ble’’ for ‘‘An eligible’’ in introductory provisions.
2020—Subsec. (a)(1). Pub. L. 116–260, div. N, Subsec. (e)(2). Pub. L. 116–260, div. N, § 304(b)(2)(D)(i),
§ 304(b)(1)(B)(i), substituted ‘‘section 636(a)(36) of this inserted ‘‘purchase orders, orders, invoices,’’ after
title’’ for ‘‘paragraph (36) of section 636(a) of this title, ‘‘transcripts of accounts,’’ and substituted ‘‘covered
as added by section 1102’’. rent obligations, payments on covered operations ex-
Subsec. (a)(3). Pub. L. 116–260, div. N, § 304(b)(2)(A)(v), penditures, payments on covered property damage
added par. (3). Former par. (3) redesignated (4). costs, payments on covered supplier costs, payments on
Pub. L. 116–142, § 3(b)(1), added par. (3) and struck out covered worker protection expenditures,’’ for ‘‘covered
former par. (3) which read as follows: ‘‘the term ‘cov- lease obligations,’’.
ered period’ means the 8-week period beginning on the Subsec. (e)(3)(B). Pub. L. 116–260, div. N,
date of the origination of a covered loan;’’. § 304(b)(2)(D)(ii), inserted ‘‘make payments on covered
Subsec. (a)(4). Pub. L. 116–260, div. N, § 306(A), amend- operations expenditures, make payments on covered
ed par. (4) generally. Prior to amendment, par. (4) read property damage costs, make payments on covered sup-
as follows: ‘‘the term ‘covered period’ means, subject to plier costs, make payments on covered worker protec-
subsection (l), the period beginning on the date of the tion expenditures,’’ after ‘‘rent obligation,’’.
origination of a covered loan and ending the earlier of— Subsec. (f). Pub. L. 116–260, div. N, § 307(a)(2), inserted
‘‘(A) the date that is 24 weeks after such date of ‘‘or the certification required under subsection (l), as
origination; or applicable’’ after ‘‘subsection (e)’’.
‘‘(B) December 31, 2020;’’. Subsec. (h). Pub. L. 116–260, div. N, § 305(a), amended
Pub. L. 116–260, div. N, § 304(b)(2)(A)(iii), (iv), redesig- subsec. (h) generally. Prior to amendment, text read as
nated par. (3) as (4). Former par. (4) redesignated (6). follows: ‘‘If a lender has received the documentation re-
Subsec. (a)(5) to (11). Pub. L. 116–260, div. N, quired under this section from an eligible recipient at-
§ 304(b)(2)(A)(i)–(iv), (vi)–(viii), added pars. (5), (7), and testing that the eligible recipient has accurately
(9) and redesignated former pars. (4), (5), (6), and (7) as verified the payments for payroll costs, payments on
(6), (8), (10), and (11), respectively. Former par. (8) re- covered mortgage obligations, payments on covered
designated (12). lease obligations, or covered utility payments during
Subsec. (a)(11)(E) to (H). Pub. L. 116–260, div. N, covered period—
§ 304(b)(2)(A)(ix), added subpars. (E) to (H). ‘‘(1) an enforcement action may not be taken
Subsec. (a)(12). Pub. L. 116–260, div. EE, § 303(g), in- against the lender under section 657t(e) of this title
serted at end ‘‘Such payroll costs shall not include relating to loan forgiveness for the payments for pay-
qualified wages taken into account in determining the roll costs, payments on covered mortgage obliga-
credit allowed under subsection (a) or (d) of section 303 tions, payments on covered lease obligations, or cov-
of the Taxpayer Certainty and Disaster Tax Relief Act ered utility payments, as the case may be; and
of 2020.’’ ‘‘(2) the lender shall not be subject to any penalties
Pub. L. 116–260, div. EE, § 206(c)(1), inserted at end by the Administrator relating to loan forgiveness for
‘‘Such payroll costs shall not include qualified wages the payments for payroll costs, payments on covered
§ 637 TITLE 15—COMMERCE AND TRADE Page 890
mortgage obligations, payments on covered lease ob- ify any date in section 7A(d) of the Small Business Act
ligations, or covered utility payments, as the case [15 U.S.C. 636m(d)], as redesignated and transferred by
may be.’’ section 304 of this Act [probably means section 304 of
Subsec. (i). Pub. L. 116–260, div. N, § 276(a)(1), amended title III of div. N of Pub. L. 116–260], other than a dead-
subsec. (i) generally. Prior to amendment, text read as line established under an amendment made by para-
follows: ‘‘For purposes of title 26, any amount which graph (1) [amending this section], in a manner con-
(but for this subsection) would be includible in gross in- sistent with the purposes of the Paycheck Protection
come of the eligible recipient by reason of forgiveness Program to help businesses retain workers and meet fi-
described in subsection (b) shall be excluded from gross nancial obligations.’’
income.’’
Subsec. (l). Pub. L. 116–260, div. N, § 307(a)(3), added § 637. Additional powers
subsec. (l).
Pub. L. 116–260, div. N, § 306(1), struck out subsec. (l). (a) Procurement contracts; subcontracts to dis-
Text read as follows: ‘‘An eligible recipient that re- advantaged small business concerns; per-
ceived a covered loan before June 5, 2020, may elect for formance bonds; contract negotiations; defi-
the covered period applicable to such covered loan to nitions; eligibility; determinations; publica-
end on the date that is 8 weeks after the date of the tion; recruitment; construction subcontracts;
origination of such covered loan.’’ annual estimates; Indian tribes
Pub. L. 116–142, § 3(b)(3), added subsec. (l).
(1) It shall be the duty of the Administration
Statutory Notes and Related Subsidiaries and it is hereby empowered, whenever it deter-
mines such action is necessary or appropriate—
EFFECTIVE DATE OF 2021 AMENDMENT
(A) to enter into contracts with the United
Amendment by Pub. L. 117–2 applicable only with re- States Government and any department, agen-
spect to applications for forgiveness of covered loans cy, or officer thereof having procurement pow-
made under pars. (36) or (37) of section 636(a) of this ers obligating the Administration to furnish
title received on or after Mar. 11, 2021, see section
articles, equipment, supplies, services, or ma-
5001(c)(3) of Pub. L. 117–2, set out as a note under sec-
tion 636 of this title. terials to the Government or to perform con-
struction work for the Government. In any
EFFECTIVE DATE OF 2020 AMENDMENT case in which the Administration certifies to
Pub. L. 116–260, div. N, title II, § 276(a)(2), Dec. 27, 2020, any officer of the Government having procure-
134 Stat. 1979, provided that: ‘‘The amendment made by ment powers that the Administration is com-
this subsection [amending this section] shall apply to petent and responsible to perform any specific
taxable years ending after the date of the enactment of Government procurement contract to be let by
the CARES Act [Mar. 27, 2020].’’ any such officer, such officer shall be author-
Amendment by section 304(b)(1)(A), (B), (2) of div. N
ized in his discretion to let such procurement
of Pub. L. 116–260 effective as if included in Pub. L.
116–136 and applicable to any loan made pursuant to contract to the Administration upon such
section 636(a)(36) of this title before, on, or after Dec. terms and conditions as may be agreed upon
27, 2020, including forgiveness of such a loan, with pro- between the Administration and the procure-
visions relating to exclusion of loans already forgiven, ment officer. Whenever the Administration
see section 304(c) of Pub. L. 116–260, set out as a note and such procurement officer fail to agree, the
under section 636 of this title. matter shall be submitted for determination
Pub. L. 116–260, div. N, title III, § 305(b), Dec. 27, 2020, to the Secretary or the head of the appro-
134 Stat. 1997, provided that: ‘‘The amendment made by
priate department or agency by the Adminis-
subsection (a) [amending this section] shall be effective
as if included in the CARES Act (Public Law 116–136; trator. Not later than 5 days from the date the
134 Stat. 281) and shall apply to any loan made pursu- Administration is notified of a procurement
ant to section 7(a)(36) of the Small Business Act (15 officer’s adverse decision, the Administration
U.S.C. 636(a)(36)) before, on, or after the date of enact- may notify the contracting officer of the in-
ment of this Act [Dec. 27, 2020], including forgiveness of tent to appeal such adverse decision, and with-
such a loan.’’ in 15 days of such date the Administrator shall
Pub. L. 116–260, div. N, title III, § 307(b), Dec. 27, 2020, file a written request for a reconsideration of
134 Stat. 2000, provided that: ‘‘The amendments made
the adverse decision with the Secretary of the
by subsection (a) [amending this section] shall be effec-
tive as if included in the CARES Act (Public Law department or agency head. For the purposes
116–136; 134 Stat. 281) and shall apply to any loan made of this subparagraph, a procurement officer’s
pursuant to section 7(a)(36) of the Small Business Act adverse decision includes a decision not to
(15 U.S.C. 636(a)(36)) before, on, or after the date of en- make available for award pursuant to this sub-
actment of this Act [Dec. 27, 2020], including forgive- section a particular procurement requirement
ness of such a loan.’’ or the failure to agree on the terms and condi-
Amendment by section 315(b) of div. N of Pub. L. tions of a contract to be awarded noncompeti-
116–260 effective as if included in Pub. L. 116–136 and ap-
tively under the authority of this subsection.
plicable to any loan made pursuant to section 636(a)(36)
of this title before, on, or after Dec. 27, 2020, including Upon receipt of the notice of intent to appeal,
forgiveness of such a loan, see section 315(c) of Pub. L. the Secretary of the department or the agency
116–260, set out as a note under section 636 of this title. head shall suspend further action regarding
Except as otherwise provided, amendment by title III the procurement until a written decision on
of div. N of Pub. L. 116–260 effective on Dec. 27, 2020, and the Administrator’s request for reconsider-
applicable to loans and grants made on or after Dec. 27, ation has been issued by such Secretary or
2020, see section 348 of Pub. L. 116–260, set out as a note agency head, unless such officer makes a writ-
under section 636 of this title.
ten determination that urgent and compelling
MODIFICATION OF DATES circumstances which significantly affect inter-
Pub. L. 116–260, div. N, title III, § 311(b)(2), Dec. 27, ests of the United States will not permit wait-
2020, 134 Stat. 2007, provided that: ‘‘The Administrator ing for a reconsideration of the adverse deci-
[of the Small Business Administration] and the Sec- sion. If the Administrator’s request for recon-
retary of the Treasury may jointly, by regulation, mod- sideration is denied, the Secretary of the de-
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