[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7562 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 7562
To amend the Internal Revenue Code of 1986 to provide for youth sports,
to amend the Small Business Act to establish a loan program for youth
sports providers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 9, 2020
Mr. Rose of New York (for himself, Mr. Fitzpatrick, Mr. Gottheimer, Mr.
Cisneros, Ms. Clarke of New York, Mrs. Davis of California, Ms. Norton,
Mr. Gonzalez of Texas, Mr. Michael F. Doyle of Pennsylvania, Ms.
Scanlon, Mr. Veasey, Mr. Raskin, Ms. Schakowsky, and Ms. Sewell of
Alabama) introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on Small
Business, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for youth sports,
to amend the Small Business Act to establish a loan program for youth
sports providers, 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 ``COVID-19 Youth Sports and Healthy
Working Families Relief Act''.
SEC. 2. MODIFICATION OF CHILD AND DEPENDENT CARE TAX CREDIT.
(a) Allowance of Expenses for Youth Physical Activities.--Section
21(b)(2)(A) of the Internal Revenue Code of 1986 is amended by striking
``and'' at the end of clause (i), by striking the period at the end of
clause (ii) and inserting ``, and'', and by inserting after clause (ii)
the following:
``(iii) expenses for youth physical
activities (within the meaning of section
223(d)(5)).''.
(b) Exception to Camp Rule.--Section 21(b)(2)(A) of such Code (as
amended by subsection (a)) is amended by striking ``Such term'' and
inserting ``Except as provided by clause (iii), such term''.
(c) Dollar Limitations.--Section 221(c) of such Code is amended to
read as follows:
``(c) Dollar Limit on Amount Creditable.--The amount of the
employment-related expenses incurred during any taxable year which may
be taken into account under subsection (a) shall not exceed--
``(1) if there is 1 qualifying individual with respect to
the taxpayer for such taxable year, the sum of--
``(A) $3,000 of so much of employment-related
expenses as are described in clauses (i) and (ii) of
subsection (b)(2)(A), and
``(B) $6,000 of so much of employment-related
expenses as are described in clause (iii) of subsection
(b)(2)(A), or
``(2) if there are 2 or more qualifying individuals with
respect to the taxpayer for such taxable year, the sum of--
``(A) $6,000 of so much of employment-related
expenses as are described in clauses (i) and (ii) of
subsection (b)(2)(A), and
``(B) $12,000 of so much of employment-related
expenses as are described in clause (iii) of subsection
(b)(2)(A).
The amounts determined under subparagraphs (A) and (B) of paragraph (1)
or (2) (whichever is applicable) shall each be reduced by the aggregate
amount for the same categories of expenses excludable from gross income
under section 129 for the taxable year.''.
(d) Refundable.--Section 21(e) of such Code is amended by adding at
the end the following:
``(11) Credit refundable for 2020.--In the case of a
taxable year beginning in calendar year 2020, the credit
allowed under subsection (a) (determined without regard to this
paragraph and section 26(a)) shall be treated as a credit
allowable under subpart C (and not allowed under subsection
(a)).''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2019.
SEC. 3. INCREASE IN DOLLAR AMOUNT OF ELECTION FOR DEPENDENT CARE
FLEXIBLE SPENDING ARRANGEMENTS.
(a) In General.--Section 125 of the Internal Revenue Code of 1986
is amended by redesignating subsections (k) and (l) as subsections (l)
and (m) and inserting after subsection (j) the following:
``(k) Limitation on Dependent Care Flexible Spending
Arrangements.--
``(1) In general.--For purposes of this section, if a
benefit is provided under a cafeteria plan through employer
contributions to a dependent care flexible spending
arrangement, such benefit shall not be treated as a qualified
benefit unless the cafeteria plan provides that an employee may
not elect for any taxable year to have salary reduction
contributions in excess of $10,000 made to such arrangement for
each dependent under such arrangement.
``(2) Single parent.--In the case that the employee is an
individual who is not married as of the beginning of the
taxable year for which the employee elects to participate in
the arrangement, paragraph (1) shall be applied by substituting
`$12,000' for `$10,000'.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2019.
SEC. 4. YOUTH AND FAMILY PHYSICAL ACTIVITIES.
(a) In General.--Paragraph (1) of section 213(d) of the Internal
Revenue Code of 1986 is amended by striking ``or'' at the end of
subparagraph (C), by striking the period at the end of subparagraph (D)
and inserting ``, or'', and by inserting after subparagraph (D) the
following new subparagraph:
``(E) for qualified sports and fitness expenses.''.
(b) Qualified Sports and Fitness Expenses.--Subsection (d) of
section 213 of the Internal Revenue Code of 1986 is amended by adding
at the end the following new paragraph:
``(12) Qualified sports and fitness expenses.--
``(A) In general.--The term `qualified sports and
fitness expenses' means amounts paid exclusively for
the sole purpose of participating in a physical
activity including--
``(i) for membership at a fitness facility,
``(ii) for participation or instruction in
physical exercise or physical activity, or
``(iii) for equipment used in a program
(including a self-directed program) of physical
exercise or physical activity.
``(B) Overall dollar limitation.--The aggregate
amount treated as qualified sports and fitness expenses
with respect to any taxpayer for any taxable year shall
not exceed $1,000 ($2,000 in the case of a joint return
or a head of household (as defined in section 2(b))).
``(C) Fitness facility.--For purposes of
subparagraph (A)(i), the term `fitness facility' means
a facility--
``(i) which provides instruction in a
program of physical exercise, offers facilities
for the preservation, maintenance,
encouragement, or development of physical
fitness, or serves as the site of such a
program of a State or local government,
``(ii) which is not a private club owned
and operated by its members,
``(iii) which does not offer golf, hunting,
sailing, or riding facilities,
``(iv) the health or fitness component of
which is not incidental to its overall function
and purpose, and
``(v) which is fully compliant with the
State of jurisdiction and Federal anti-
discrimination laws.
``(D) Treatment of exercise videos, etc.--Videos,
books, and similar materials shall be treated as
described in subparagraph (A)(ii) if the content of
such materials constitutes instruction in a program of
physical exercise or physical activity.
``(E) Limitations related to sports and fitness
equipment.--Amounts paid for equipment described in
subparagraph (A)(iii) shall be treated as qualified
sports and fitness expenses only--
``(i) if such equipment is utilized
exclusively for participation in fitness,
exercise, sport, or other physical activity,
``(ii) in the case of amounts paid for
apparel or footwear, if such apparel or
footwear is of a type that is necessary for,
and is not used for any purpose other than, a
specific physical activity, and
``(iii) in the case of amounts paid for any
single item of sports equipment (other than
exercise equipment), to the extent such amounts
do not exceed $250.
``(F) Programs which include components other than
physical exercise and physical activity.--Rules similar
to the rules of paragraph (6) shall apply in the case
of any program that includes physical exercise or
physical activity and also other components. For
purposes of the preceding sentence, travel and
accommodations shall be treated as a separate
component.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 5. YOUTH SPORT PROVIDERS LOAN PROGRAM.
(a) Definitions.--In this section, the terms ``Administration'' and
``Administrator'' mean the Small Business Administration and the
Administrator thereof, respectively.
(b) In General.--Section 7(a) of the Small Business Act (15 U.S.C.
636(a)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), in the matter preceding
clause (i), by striking ``and (F)'' and inserting
``(F), and (G)''; and
(B) by adding at the end the following:
``(G) Participation in the youth sports provider
loan program.--In an agreement to participate in a loan
on a deferred basis under paragraph (37), the
participation by the Administration shall be 100
percent.''; and
(2) by adding at the end the following:
``(37) Youth sports provider loan program.--
``(A) Definitions.--In this paragraph--
``(i) the terms `appropriate Federal
banking agency' and `insured depository
institution' have the meanings given those
terms in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813);
``(ii) the term `covered loan' means a loan
made under this paragraph during the covered
period;
``(iii) the term `covered period' means the
period beginning on March 1, 2020, and ending
on December 31, 2020;
``(iv) the term `eligible recipient' means
an individual or entity that is a youth sports
provider and is eligible to receive a covered
loan;
``(v) the term `eligible self-employed
individual' has the meaning given the term in
section 7002(b) of the Families First
Coronavirus Response Act (Public Law 116-127);
``(vi) the term `high priority area' means
a geographic area for which an eligible
recipient is a small business concern owned and
controlled by socially and economically
disadvantaged individuals, a small business
concern owned and controlled by women, or a
small business concern owned and controlled by
veterans--
``(I) working in or attracting
youth participants from low income,
underserved, or rural communities
(based on ZIP code);
``(II) working with populations
disproportionately affected by COVID-19
(based on ZIP code); and
``(III) working with populations of
youth that already have low access to
quality sports programs;
``(vii) the term `insured credit union' has
the meaning given the term in section 101 of
the Federal Credit Union Act (12 U.S.C. 1752);
``(viii) the term `nonprofit organization'
means an organization that is described in
section 501(c)(3) of the Internal Revenue Code
of 1986 and that is exempt from taxation under
section 501(a) of such Code;
``(ix) the term `operating losses' means
regular operating expenses accrued since
January 1, 2020, through the date of the loan
application since January 1, 2020, minus
revenue generated over that period;
``(x) the term `regular operating
expenses'--
``(I) means expenses incurred in
the regular operations of business and
includes--
``(aa) payroll costs (as
defined in paragraph (36));
``(bb) other expenses
relating to workforce support,
including 1099-MISC contractors
and volunteers, such as
contractor fees for services,
training, background
screenings, or insurance;
``(cc) regular or necessary
facilities maintenance and
upkeep;
``(dd) supplies or
materials that due to their
nature are unusable at a future
date and maintain only a
nominal value;
``(ee) overhead expenses
for events or programs
cancelled due to COVID-19 that
are not reimbursable through
insurance or other means, such
as nonreimbursable deposits and
cancellation fees;
``(ff) rent (including rent
under a lease agreement);
``(gg) payments of interest
or mandatory principal payment
on any mortgage obligation
(which shall not include any
prepayment of principal or
interest on a mortgage
obligation);
``(hh) utilities;
``(ii) interest or
mandatory principal payment on
any other debt obligations that
were incurred before the
covered period (which shall not
include any prepayment of
principal or interest on a debt
obligation);
``(jj) marketing;
``(kk) insurance; or
``(ll) any other
operational expenses, including
program fee refunds, costs for
referees or sports officials,
software and technology,
equipment, and supplies or
materials that due to their
nature are unusable at a future
date and maintain only a
nominal value; and
``(II) does not include--
``(aa) expenses permitted
to be reimbursed under contract
or otherwise reimbursable;
``(bb) expenses
reimbursable under currently
held insurance; or
``(cc) any compensation of
an employee whose principal
place of residence is outside
of the United States;
``(xi) the term `youth sports provider'--
``(I) means any entity or
organization that has a primary purpose
to provide direct sports programming or
sports events to youth 18 and under,
including--
``(aa) sports-based youth
development organizations;
``(bb) interscholastic
sports programs;
``(cc) youth sports
providers such as coaches,
trainers, and instructors; and
``(dd) youth sport league,
camp, or event providers; and
``(xii) the term `veterans organization'
means an organization that is described in
section 501(c)(19) of the Internal Revenue Code
that is exempt from taxation under section
501(a) of such code.
``(B) Covered loans.--
``(i) Youth sports provider loans.--Except
as otherwise provided in this paragraph, the
Administrator may guarantee covered loans under
the same terms, conditions, and processes as a
loan made under this subsection.
``(ii) Delegated authority.--For purposes
of making covered loans under this paragraph, a
lender approved to make loans under this
subsection shall be deemed to have been
delegated authority by the Administrator to
make and approve covered loans, subject to the
provisions of this paragraph.
``(iii) Additional lenders.--The authority
to make loans under this paragraph shall be
extended to additional lenders determined by
the Administrator and the Secretary of the
Treasury to have the necessary qualifications
to process, close, disburse, and service loans
made with the guarantee of the Administration.
``(iv) Refinance.--A loan made under
subsection (b)(2) during the period beginning
on January 31, 2020, and ending on the date on
which covered loans are made available may be
refinanced as part of a covered loan.
``(v) Nonrecourse.--Notwithstanding the
waiver of the personal guarantee requirement or
collateral under subparagraph (J), the
Administrator shall have no recourse against
any individual shareholder, member, or partner
of an eligible recipient of a covered loan for
nonpayment of any covered loan, except to the
extent that such shareholder, member, or
partner uses the covered loan proceeds for a
purpose not authorized under clause (ii).
``(C) Registration of loans.--Not later than 15
days after the date on which a loan is made under this
paragraph, the Administration shall register the loan
using the TIN (as defined in section 7701 of the
Internal Revenue Code of 1986) assigned to the
borrower.
``(D) Eligibility for certain small businesses and
organizations.--
``(i) In general.--During the covered
period, any youth sports provider business
concern, nonprofit organization, veterans
organization, or Tribal business concern
described in section 31(b)(2)(C) shall be
eligible to receive a covered loan if the youth
sports provider concern or organization employs
not more than 500 full-time employees. An
eligible recipient applying for a covered loan
shall make a good faith certification--
``(I) that the uncertainty of
current economic conditions makes
necessary the loan request to support
the ongoing operations of the eligible
recipient;
``(II) that the eligible recipient
provides direct sports programming or
sports events to youth 18 and under;
``(III) that the eligible recipient
does not have an application pending
for a loan under this subsection for
the same purpose and duplicative of
amounts applied for or received under a
covered loan; and
``(IV) during the period beginning
on February 15, 2020, and ending on
December 31, 2020, that the eligible
recipient has not received amounts
under this subsection for the same
purpose that when added to the applied
for loan amount under this program will
exceed $2 million.
``(ii) Inclusion of sole proprietors,
independent contractors, and eligible self-
employed individuals.--
``(I) In general.--During the
covered period, individuals who operate
under a sole proprietorship or as an
independent contractor and eligible
self-employed individuals shall be
eligible to receive a covered loan.
``(II) Documentation.--An eligible
self-employed individual, independent
contractor, or sole proprietorship
seeking a covered loan shall submit
such documentation as is necessary to
establish such individual as eligible,
including payroll tax filings reported
to the Internal Revenue Service, Forms
1099-MISC, and income and expenses from
the sole proprietorship, as determined
by the Administrator and the Secretary.
``(iii) Payroll protection program
eligibility.--No youth sports provider that
received a covered loan under paragraph (36)
shall be deemed ineligible for a covered loan
under this paragraph.
``(iv) Employee.--For purposes of
determining whether a youth sports provider
business concern, nonprofit organization,
veterans organization, or Tribal business
concern described in section 31(b)(2)(C)
employs not more than 500 employees under
clause (i)(I), the term `employee' includes
individuals employed on a full-time basis.
``(v) Affiliation.--The provisions
applicable to affiliations under section
121.103 of title 13, Code of Federal
Regulations, or any successor thereto, shall
not apply with respect to a nonprofit
organization and a veterans organization in the
same manner as with respect to a small business
concern.
``(E) Maximum loan amount.--
``(i) Allocation.--During the covered
period, with respect to a covered loan, the
maximum loan amount shall not exceed $2,000,000
and be the greater of--
``(I) gross receipts in 2019; or
``(II) 85 percent of regular
operating expenses accrued since
January 1, 2020, minus revenue
generated over that period.
``(ii) Disbursement.--Priority
consideration in the loan disbursement shall be
given to nonprofits representing youth sports
providers serving high priority areas. This
consideration may include designating a
specific amount of the loan funding allocated
to be used exclusively for nonprofit providers
serving high priority areas.
``(F) Allowable uses of covered loans.--During the
covered period, an eligible recipient may use the
proceeds of the covered loan for regular operating
expenses.
``(G) Loan forgiveness.--
``(i)(I) Forgiveness.--An eligible
recipient shall be eligible for forgiveness of
indebtedness on a covered loan in an amount
equal to percentage forgiveness multiplied by
the loan amount.
``(II) Eligible expenses.--Up to 50 percent
of forgiveness shall be granted for use for the
eligible expenses enumerated above.
``(III) Additional forgiveness.--Additional
forgiveness of the remaining 50 percent shall
be prorated based on the number of youth
participants in the program participating in
some capacity (i.e. virtual) by December 2021
(as compared to participation rates over a
comparable period in 2019). Criteria shall be
developed to define this standard and take into
account factors that would limit or reduce
participation, such as continuing COVID-19
concerns.
``(IV) Treatment of amounts forgiven.--
``(aa) In general.--Amounts which
have been forgiven under this section
shall be considered cancelled
indebtedness by a lender authorized
under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)).
``(bb) Purchase of guarantees.--For
purposes of the purchase of the
guarantee for a covered loan by the
Administrator, amounts which are
forgiven under this section shall be
treated in accordance with the
procedures that are otherwise
applicable to a loan guaranteed under
section 7(a) of the Small Business Act
(15 U.S.C. 636(a)).
``(cc) Remittance.--Not later than
90 days after the date on which the
amount of forgiveness under this
section is determined, the
Administrator shall remit to the lender
an amount equal to the amount of
forgiveness, plus any interest accrued
through the date of payment.''.
(c) Application.--An eligible recipient seeking loan
forgiveness under this section shall submit to the lender that
is servicing the covered loan an application, which shall
include--
(1) documentation verifying youth under the age of
18 participation numbers during the forgiveness
calculation periods;
(2) documentation showing expenditures of the
covered loan on allowed uses;
(3) a certification from a representative of the
eligible recipient authorized to make such
certifications that--
(A) the documentation presented is true and
correct; and
(B) the amount for which forgiveness is
requested was used to provide sports programing
and sports events for youth under the age of
18; and
(4) any other documentation the Administrator
determines necessary.
(d) Prohibition on forgiveness without documentation.--No
eligible recipient shall receive forgiveness under this section
without submitting, to the lender that is servicing the covered
loan, the documentation required under subsection (f).
(e) Decision.--Not later than 60 days after the date on
which a lender receives an application for loan forgiveness
under this section from an eligible recipient, the lender shall
issue a decision on the application.
(f) Hold harmless.--If a lender has received the
documentation required under this section from an eligible
recipient attesting that the eligible recipient has accurately
verified the payments for payroll costs, payments on covered
mortgage obligations, payments on covered lease obligations, or
covered utility payments during covered period--
(1) an enforcement action may not be taken against
the lender under section 47(e) of the Small Business
Act (15 U.S.C. 657t(e)) relating to loan forgiveness
for the payments for payroll costs, payments on covered
mortgage obligations, payments on covered lease
obligations, or covered utility payments, as the case
may be; and
(2) the lender shall not be subject to any
penalties by the Administrator relating to loan
forgiveness for the payments for payroll costs,
payments on covered mortgage obligations, payments on
covered lease obligations, or covered utility payments,
as the case may be.
(g) Taxability.--For purposes of the Internal Revenue Code
of 1986, any amount which (but for this subsection) would be
includible in gross income of the eligible recipient by reason
of forgiveness described in subsection (b) shall be excluded
from gross income.
(h) Rule of construction.--The cancellation of indebtedness
on a covered loan under this section shall not otherwise modify
the terms and conditions of the covered loan.
(i) Regulations.--Not later than 30 days after the date of
enactment of this Act, the Administrator shall issue guidance
and regulations implementing this section.
(j) Direct Appropriations.--There is appropriated, out of amounts
in the Treasury not otherwise appropriated, for the fiscal year ending
September 30, 2020, to remain available until September 30, 2021, for
additional amounts $8,500,000,000 under the heading ``Small Business
Administration--Business Loans Program Account, CARES Act'' for the
cost of guaranteed loans as authorized under paragraph (37) of section
7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section
5 of this Act.
(k) Emergency Rulemaking Authority.--Not later than 15 days after
the date of enactment of this Act, the Administrator shall issue
regulations to carry out this title and the amendments made by this
title without regard to the notice requirements under section 553(b) of
title 5, United States Code.
(l) Loan Education.--
(1) The SBA shall have authority to provide additional
financial awards to resource partners (Small Business
Development Centers, Women's Business Centers) to provide
counseling, training, and education to youth sports providers
on use of loans.
(2) The SBA or Treasury shall provide nonprofits
representing youth sports providers serving high priority areas
with grants to establish a training program on accessing
resources under the program, and general financial management.
(m) Fee Waiver.--During the covered period, with respect to a
covered loan--
(1) in lieu of the fee otherwise applicable under paragraph
(23)(A), the Administrator shall collect no fee; and
(2) in lieu of the fee otherwise applicable under paragraph
(18)(A), the Administrator shall collect no fee.
(n) Interest Rate Requirements.--A covered loan shall bear an
interest rate--
(1) for the first two years, and shall be no greater than 4
percent;
(2) for years 3 through 7, and shall have Applicable
Federal Rate (AFR) plus 250-450 base points (bps) as determined
by the Administrator based on revenue decline.
(o) Loan Deferment.--
(1) Definition of impacted borrower.--In this section, the
term ``impacted borrower'' means an eligible recipient that--
(A) is in operation on February 15, 2020; and
(B) has an application for a covered loan that is
approved or pending approval on or after the date of
enactment of this section.
(2) Presumption.--For purposes of this subsection, an
impacted borrower is presumed to have been adversely impacted
by COVID-19.
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