S. 4676, Small Business Debt Relief Extension Act of 2020
Summary
S. 4676, the Small Business Debt Relief Extension Act of 2020, was introduced in the Senate on September 23, 2020, by Coons with Cardin, Klobuchar, Shaheen, Cantwell, Markey, Hirono, Gillibrand, Van Hollen and King and referred to the Committee on Finance. It improves the debt relief program under the CARES Act by amending section 1112 on the subsidy for certain loan payments. For a covered loan approved before enactment and not on deferment, the subsidy covers a 6-month period beginning with the next payment due after the covered loan is fully disbursed. A reporting provision calls for the names of lenders that have not submitted information on covered loans.
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“S. 4676, Small Business Debt Relief Extension Act of 2020.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/bills-bills-116s4676is-bills-116s4676is/
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II
116TH CONGRESS
2D SESSION
S. 4676
To improve the debt relief program under the CARES Act, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
SEPTEMBER 23, 2020
Mr. COONS (for himself, Mr. CARDIN, Ms. KLOBUCHAR, Mrs. SHAHEEN, Ms.
CANTWELL, Mr. MARKEY, Ms. HIRONO, Mrs. GILLIBRAND, Mr. VAN
HOLLEN, and Mr. KING) introduced the following bill; which was read
twice and referred to the Committee on Finance
A BILL
To improve the debt relief program under the CARES Act,
and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Small Business Debt
5 Relief Extension Act of 2020’’.
6 SEC. 2. SUBSIDY FOR CERTAIN LOAN PAYMENTS.
7 (a) IN GENERAL.—Section 1112 of the CARES Act
8 (15 U.S.C. 9011) is amended—
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9 (1) in subsection (c)—
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2
1 (A) in paragraph (1)—
2 (i) in the matter preceding subpara-
3 graph (A), by inserting ‘‘, without regard
4 to the date on which the covered loan is
5 fully disbursed and subject to availability
6 of funds’’ after ‘‘status’’;
7 (ii) by amending subparagraphs (A)
8 and (B) to read as follows:
9 ‘‘(A) with respect to a covered loan ap-
10 proved by the Administration before the date of
11 enactment of this Act and not on deferment—
12 ‘‘(i) except as provided in clauses (ii)
13 and (iii), for the 6-month period beginning
14 with the next payment due on the covered
15 loan after the covered loan is fully dis-
16 bursed;
17 ‘‘(ii) for the 11-month period begin-
18 ning with the next payment due on the
19 covered loan after the covered loan is fully
20 disbursed, with respect to a covered loan
21 that—
22 ‘‘(I) is described in subsection
23 (a)(1)(B) or is a loan guaranteed by
24 the Administration under section 7(a)
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25 of the Small Business Act (15 U.S.C.
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1 636(a)) other than a loan described in
2 clause (i) or (ii) of subsection
3 (a)(1)(A); and
4 ‘‘(II) is made to a borrower oper-
5 ating primarily in an industry other
6 than an industry that is assigned a
7 North American Industry Classifica-
8 tion System code beginning with 61,
9 71, or 72; and
10 ‘‘(iii) for the 18-month period begin-
11 ning with the next payment due on the
12 covered loan after the covered loan is fully
13 disbursed, with respect to—
14 ‘‘(I) a covered loan described in
15 paragraph (1)(A)(i) or paragraph (2)
16 of subsection (a); or
17 ‘‘(II) any covered loan made to a
18 borrower operating primarily in an in-
19 dustry that is assigned—
20 ‘‘(aa) a North American In-
21 dustry Classification System code
22 beginning with 61, 71, or 72; or
23 ‘‘(bb) the North American
24 Industry Classification System
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25 Code 485510;
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1 ‘‘(B) with respect to a covered loan ap-
2 proved by the Administration before the date of
3 enactment of this Act and on deferment—
4 ‘‘(i) except as provided in clauses (ii)
5 and (iii), for the 6-month period beginning
6 with the next payment due on the covered
7 loan after the deferment period and after
8 the covered loan is fully disbursed;
9 ‘‘(ii) for the 11-month period begin-
10 ning with the next payment due on the
11 covered loan after the deferment period
12 and after the covered loan is fully dis-
13 bursed, with respect to a covered loan de-
14 scribed in subclause (I) or (II) of subpara-
15 graph (A)(ii); and
16 ‘‘(iii) for the 18-month period begin-
17 ning with the next payment due on the
18 covered loan after the deferment period
19 and after the covered loan is fully dis-
20 bursed, with respect to a covered loan de-
21 scribed in subclause (I) or (II) of subpara-
22 graph (A)(iii); and’’; and
23 (iii) in subparagraph (C)—
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1 (I) by striking ‘‘covered loan
2 made’’ and inserting ‘‘covered loan
3 approved by the Administration’’;
4 (II) by striking ‘‘6 months after’’
5 and inserting ‘‘18 months after’’;
6 (III) by inserting ‘‘(or, for a cov-
7 ered loan made by an intermediary to
8 a small business concern using loans
9 or grants received under section 7(m)
10 of the Small Business Act (15 U.S.C.
11 636(m)) or guaranteed by the Admin-
12 istration under the Community Ad-
13 vantage Pilot Program of the Admin-
14 istration, for the 12-month period)’’
15 after ‘‘6-month period’’; and
16 (IV) by inserting ‘‘after the cov-
17 ered loan is fully disbursed’’ after
18 ‘‘due on the covered loan’’; and
19 (B) by adding at the end the following:
20 ‘‘(4) ADDITIONAL PROVISIONS FOR NEW
21 LOANS.—With respect to a loan described in para-
22 graph (1)(C)—
23 ‘‘(A) the Administrator may further extend
24 the 18-month period described in paragraph
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1 (1)(C) if there are sufficient funds to continue
2 those payments; and
3 ‘‘(B) during the underwriting process, a
4 lender of such a loan may consider the pay-
5 ments under this section as part of a com-
6 prehensive review to determine the ability to
7 repay over the entire period of maturity of the
8 loan.
9 ‘‘(5) ELIGIBILITY.—Eligibility for a covered
10 loan to receive such payments of principal, interest,
11 and any associated fees under this subsection shall
12 be based on the date on which the covered loan is
13 approved by the Administration.
14 ‘‘(6) AUTHORITY TO REVISE EXTENSIONS.—
15 ‘‘(A) IN GENERAL.—As part of preparing
16 the reports under subsection (i)(5) that are re-
17 quired to be submitted not later than January
18 15, 2021, and not later than June 15, 2021,
19 the Administrator conduct an evaluation of
20 whether amounts made available to make pay-
21 ments under this subsection are sufficient to
22 make the payments for the period described in
23 paragraph (1).
24 ‘‘(B) PLAN.—If the Administrator deter-
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25 mines under subparagraph (A) that the
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1 amounts made available to make payments
2 under this subsection are insufficient, the Ad-
3 ministrator shall—
4 ‘‘(i) develop a plan to proportionally
5 reduce the number of months provided for
6 each period described in paragraph (1),
7 while ensuring all amounts made available
8 to make payments under this subsection
9 are fully expended; and
10 ‘‘(ii) before taking action under the
11 plan developed under clause (i), include in
12 the applicable report under subsection
13 (i)(5) the plan and the data that informs
14 the plan.
15 ‘‘(7) RULE OF CONSTRUCTION.—Nothing in
16 this subsection shall preclude a borrower from re-
17 ceiving full payments of principal, interest, and any
18 associated fees as authorized by subsection.’’;
19 (2) by redesignating subsection (f) as sub-
20 section (k); and
21 (3) by inserting after subsection (e) the fol-
22 lowing:
23 ‘‘(f) ELIGIBILITY FOR NEW LOANS.—For each indi-
24 vidual lending program under this section, the Adminis-
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25 trator may establish a minimum loan maturity period, tak-
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1 ing into consideration the normal underwriting require-
2 ments for each such program, with the goal of preventing
3 abuse under the program.
4 ‘‘(g) LIMITATION ON ASSISTANCE.—A borrower may
5 not receive assistance under subsection (c) for more than
6 1 covered loan of the borrower described in paragraph
7 (1)(C) of that subsection.
8 ‘‘(h) TAXABILITY.—For purposes of the Internal
9 Revenue Code of 1986—
10 ‘‘(1) any payment made under subsection (c)
11 shall be treated as paid by the person on whose be-
12 half such payment is made,
13 ‘‘(2) no amount shall be included in the gross
14 income of the borrower by reason of a payment
15 made under subsection (c), and
16 ‘‘(3) no deduction shall be denied or reduced,
17 no tax attribute shall be reduced, and no basis in-
18 crease shall be denied, by reason of the exclusion
19 from gross income provided by paragraph (2).
20 ‘‘(i) REPORTING AND OUTREACH.—
21 ‘‘(1) UPDATED INFORMATION.—
22 ‘‘(A) IN GENERAL.—Not later than 7 days
23 after the date of enactment of the Small Busi-
24 ness Debt Relief Extension Act of 2020, the
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25 Administrator shall make publicly available in-
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1 formation regarding the modifications to the as-
2 sistance provided under this section under the
3 amendments made by such Act.
4 ‘‘(B) GUIDANCE.—Not later than 14 days
5 after the date of enactment of the Small Busi-
6 ness Debt Relief Extension Act of 2020, the
7 Administrator shall issue guidance on imple-
8 menting the modifications to the assistance pro-
9 vided under this section under the amendments
10 made by such Act.
11 ‘‘(2) PUBLICATION OF LIST.—Not later than 14
12 days after the date of enactment of the Small Busi-
13 ness Debt Relief Extension Act of 2020, the Admin-
14 istrator shall transmit to each lender of a covered
15 loan a list of each borrower of a covered loan that
16 includes the North American Industry Classification
17 System code assigned to the borrower, based on the
18 records of the Administration, to assist the lenders
19 in identifying which borrowers qualify for an exten-
20 sion of payments under subsection (c).
21 ‘‘(3) EDUCATION AND OUTREACH.—The Ad-
22 ministrator shall provide education, outreach, and
23 communication to lenders, borrowers, district offices,
24 and resource partners of the Administration in order
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25 to ensure full and proper compliance with this sec-
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1 tion, encourage broad participation with respect to
2 covered loans that have not yet been approved by the
3 Administrator, and help lenders transition borrowers
4 from subsidy payments under this section directly to
5 a deferral when suitable for the borrower.
6 ‘‘(4) NOTIFICATION.—Not later than 30 days
7 after the date of enactment of the Small Business
8 Debt Relief Extension Act of 2020, the Adminis-
9 trator shall mail a letter to each borrower of a cov-
10 ered loan that includes—
11 ‘‘(A) an overview of assistance provided
12 under this section;
13 ‘‘(B) the rights of the borrower to receive
14 that assistance;
15 ‘‘(C) how to seek recourse with the Admin-
16 istrator or the lender of the covered loan if the
17 borrower has not received that assistance; and
18 ‘‘(D) the rights of the borrower to request
19 a loan deferral from a lender, and guidance on
20 how to do successfully transition directly to a
21 loan deferral once subsidy payments under this
22 section are concluded.
23 ‘‘(5) MONTHLY REPORTING.—Not later than
24 the 15th of each month beginning after the date of
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25 enactment of the Small Business Debt Relief Exten-
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1 sion Act of 2020, the Administrator shall submit to
2 Congress a report on assistance provided under this
3 section, which shall include—
4 ‘‘(A) monthly and cumulative data on pay-
5 ments made under this section as of the date of
6 the report, including a breakdown by—
7 ‘‘(i) the number of participating bor-
8 rowers;
9 ‘‘(ii) the volume of payments made for
10 each type of covered loan; and
11 ‘‘(iii) the volume of payments made
12 for covered loans made before the date of
13 enactment of this Act and loans made
14 after such date of enactment;
15 ‘‘(B) the names of any lenders of covered
16 loans that have not submitted information on
17 the covered loans to the Administrator during
18 the preceding month; and
19 ‘‘(C) an update on the education and out-
20 reach activities of the Administration carried
21 out under paragraph (3).’’.
22 (b) EFFECTIVE DATE.—The amendments made by
23 this section shall apply as if included in the enactment
24 of section 1112 of the CARES Act (15 U.S.C. 9011).
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