Paycheck Protection Small Business Forgiveness Act

Paycheck Protection Small Business Forgiveness Act

This bill modifies loan forgiveness under the Paycheck Protection Program established to support small businesses in response to COVID-19 (i.e., coronavirus disease 2019).

Specifically, the bill provides for automatic forgiveness of a paycheck protection loan that is not more than $150,000 if the recipient submits a one-page form. Such form must allow a recipient to submit specified demographc and expenditure information, and certain individuals (e.g., the President, the Vice President, or the head of an executive department) are not eligible for such forgiveness.

Further, the bill prohibits any enforcement or other action against a lender relating to loan origination, forgiveness, or guarantee based on the lender's reliance on certifications or documentation submitted by a loan applicant or recipient.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7777 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7777

To provide automatic forgiveness for paycheck protection program loans 
                under $150,000, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 24, 2020

Ms. Houlahan (for herself, Mr. Upton, Mr. Flores, Mr. Fitzpatrick, Mr. 
Welch, Mr. Kustoff of Tennessee, Mr. Palazzo, Mr. Evans, Mr. Carter of 
  Texas, Mr. Rouda, Mr. Barr, Mr. Ferguson, Mr. Guest, Mr. Budd, Mr. 
  Wilson of South Carolina, Mr. Williams, Mr. Lucas, Mr. Cooper, Mr. 
McCaul, Mr. David P. Roe of Tennessee, Mr. Thompson of Mississippi, Mr. 
Balderson, Mr. Gibbs, Mr. Curtis, Mr. Bishop of North Carolina, and Mr. 
Roy) introduced the following bill; which was referred to the Committee 
                           on Small Business

_______________________________________________________________________

                                 A BILL


 
To provide automatic forgiveness for paycheck protection program loans 
                under $150,000, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Paycheck Protection Small Business 
Forgiveness Act''.

SEC. 2. LOAN FORGIVENESS FOR PPP LOANS UNDER $150,000.

    Section 1106 of the CARES Act (Public Law 116-136) is amended--
            (1) in subsection (e), in the matter preceding paragraph 
        (1), by striking ``An eligible'' and inserting ``Except as 
        provided in subsection (m), an eligible'';
            (2) in subsection (f), by inserting ``or the information 
        required under subsection (m), as applicable'' after 
        ``subsection (e)'';
            (3) by striking subsection (h) and inserting the following:
    ``(h) Hold Harmless.--
            ``(1) In general.--A lender may rely on all certifications 
        and documentation submitted by an applicant or eligible 
        recipient pursuant to any requirement in statute regarding 
        covered loans, or rules or guidance promulgated to carry out 
        any action relating to covered loans, from an applicant or 
        eligible recipient attesting that the applicant or eligible 
        recipient has accurately verified all documentation provided to 
        the lender.
            ``(2) No enforcement action.--With respect to a lender that 
        relies on the certifications and documentation described in 
        paragraph (1)--
                    ``(A) no enforcement or other action may be taken 
                against the lender relating to loan origination, 
                forgiveness, or guarantee based on such reliance, 
                including claims under--
                            ``(i) the Small Business Act (15 U.S.C. 631 
                        et seq.);
                            ``(ii) sections 3729 through 3733 of title 
                        31, United States Code (commonly known as the 
                        `False Claims Act');
                            ``(iii) the Financial Institutions Reform, 
                        Recovery, and Enforcement Act (Public Law 101-
                        73);
                            ``(iv) section 21 of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1829b), chapter 2 of 
                        title I of Public Law 91-508 (12 U.S.C. 1951 et 
                        seq.), and subchapter II of chapter 53 of title 
                        31, United States Code (collectively known as 
                        the `Bank Secrecy Act'); or
                            ``(v) any other Federal, State, or other 
                        criminal or civil law or regulation; and
                    ``(B) the lender shall not be subject to any 
                penalties relating to loan origination, forgiveness, or 
                guarantee based on such reliance.''; and
            (4) by adding at the end the following:
    ``(m) Forgiveness for Covered Loans Under $150,000.--
            ``(1) In general.--Notwithstanding subsection (e), with 
        respect to a covered loan made to an eligible recipient that is 
        not more than $150,000, the covered loan amount shall be 
        forgiven under this section if the eligible recipient submits 
        to the lender a one-page online or paper form, to be 
        established by the Administrator, that attests that the 
        eligible recipient complied with the requirements under section 
        7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)). 
        Covered individuals (defined under section 4019 of this Act) 
        are not eligible for forgiveness under this subsection.
            ``(2) Hold harmless.--With respect to a lender that relies 
        on an attestation submitted by an eligible recipient under 
        paragraph (1), no enforcement action may be taken against the 
        lender for any falsehoods contained in the attestation.
            ``(3) Demographic information.--The online or paper form 
        established by the Administrator under paragraph (1) shall 
        include a means by which an eligible recipient may, at the 
        discretion of the eligible recipient, submit demographic 
        information of the owner of the eligible recipient, including 
        the sex, race, ethnicity, and veteran status of the owner.
            ``(4) Expenditure information.--The form established by the 
        Administrator under paragraph (1) shall include a process by 
        which an eligible recipient may elect to submit information 
        about the use of the covered loan, including indication of 
        whether the eligible recipient--
                    ``(A) used 60 percent or more of the covered loan 
                amount for payroll costs as defined in section 7(a)(36) 
                of the Small Business Act (15 U.S.C. 636(a)(36));
                    ``(B) used less than 60 percent of the covered loan 
                amount for payroll costs but is able to document an 
                inability to hire or rehire employees as described 
                under subsection (d)(7)(A); or
                    ``(C) used less than 60 percent of the covered loan 
                amount for payroll costs but is able to document an 
                inability to return to the same level of business 
                activity as described under subsection (d)(7)(B).
    ``(n) Enforcement Action Against Borrowers.--An eligible recipient 
of a covered loan may only be subject to an enforcement action or 
penalty relating to loan origination, forgiveness, or guarantee of the 
covered loan if the eligible recipient commits fraud or expends covered 
loan proceeds on expenses that are not allowable under section 
7(a)(36)(F) of the Small Business Act (15 U.S.C. 636(a)(36)(F)).''.
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