Paycheck Protection Program Second Chance Act

Paycheck Protection Program Second Chance Act

This bill requires specified treatment of certain criminal violations under the Paycheck Protection Program established to support small businesses in response to COVID-19 (i.e., coronavirus disease 2019).

Specifically, the bill provides that an entity shall not be ineligible for a paycheck protection loan if certain owners have prior arrests or convictions, unless the owner (1) is incarcerated as of the date of the loan application, or (2) has been convicted of a felony of financial fraud or deception during the five-year period prior to the loan application.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3865 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3865

 To provide for the treatment of certain criminal violations under the 
          paycheck protection program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 2, 2020

  Mr. Portman (for himself, Mr. Cardin, Mr. Lankford, and Mr. Booker) 
introduced the following bill; which was read twice and referred to the 
            Committee on Small Business and Entrepreneurship

_______________________________________________________________________

                                 A BILL


 
 To provide for the treatment of certain criminal violations under the 
          paycheck protection program, 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 Program Second 
Chance Act''.

SEC. 2. TREATMENT OF CERTAIN CRIMINAL VIOLATIONS UNDER THE PAYCHECK 
              PROTECTION PROGRAM.

    (a) In General.--Section 7(a)(36) of the Small Business Act (15 
U.S.C. 636(a)(36)) is amended by adding at the end the following:
                    ``(T) Treatment of certain criminal violations.--
                            ``(i) Arrests or convictions.--Except as 
                        provided in clause (ii), an entity that is a 
                        business, organization, cooperative, or 
                        enterprise shall be an eligible recipient 
                        notwithstanding an arrest or conviction under 
                        Federal, State, or Tribal law of an owner of 
                        not less than 20 percent of the equity of the 
                        entity, unless the owner is incarcerated on the 
                        date on which the entity applies for a covered 
                        loan.
                            ``(ii) Financial fraud or deception.--
                        Notwithstanding clause (i), an entity that is a 
                        business, organization, cooperative, or 
                        enterprise may not receive a covered loan if, 
                        during the 5-year period preceding the date on 
                        which the entity applies for a covered loan, an 
                        owner of not less than 20 percent of the equity 
                        of the entity has been convicted of a felony of 
                        financial fraud or deception under Federal, 
                        State, or Tribal law.
                            ``(iii) Waiver.--The Administrator may 
                        waive the requirements under clause (ii).''.
    (b) Rulemaking.--Not later than 15 days after the date of enactment 
of this Act, the Administrator of the Small Business Administration 
shall make necessary revisions to any rules of the Administration to 
carry out the amendment made by subsection (a).
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