[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7061 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7061
To provide loans and other financial assistance to small businesses
affected by the wildfires on Maui, and for other purpose.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 22, 2024
Mr. Case introduced the following bill; which was referred to the
Committee on Small Business, and in addition to the Committees on Ways
and Means, and Financial Services, 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 provide loans and other financial assistance to small businesses
affected by the wildfires on Maui, and for other purpose.
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 ``Healing and Economic Advancement for
Local businesses in Maui Act'' or the ``HEAL Maui Act''.
SEC. 2. EMERGENCY EIDL GRANTS.
(a) Definitions.--In this section--
(1) the term ``covered entity'' means--
(A) a business with not more than 500 employees;
(B) any individual who operates under a sole
proprietorship, with or without employees, or as an
independent contractor;
(C) a cooperative with not more than 500 employees;
(D) an ESOP (as defined in section 3 of the Small
Business Act (15 U.S.C. 632)) with not more than 500
employees; or
(E) a tribal small business concern, as described
in section 31(b)(2)(C) of the Small Business Act (15
U.S.C. 657a(b)(2)(C)), with not more than 500
employees;
(2) the term ``covered period'' means the period beginning
on August 8, 2023, and ending on May 10, 2024;
(3) the term ``eligible entity'' means a covered entity the
principal office of which is located on Maui and not fewer than
35 percent of the employees of which reside on Maui; and
(4) the term ``Hawai'i Wildfires'' means wildfires
occurring in Hawai'i during the period beginning on August 1,
2023, and ending on September 30, 2023.
(b) Eligible Entities.--During the covered period, in addition to
small business concerns, private nonprofit organizations, and small
agricultural cooperatives, an eligible entity shall be eligible for a
loan made under section 7(b)(2) of the Small Business Act (15 U.S.C.
636(b)(2)).
(c) Terms; Credit Elsewhere.--With respect to a loan made under
section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) during
the covered period in response to the Hawai`i Wildfires, the
Administrator shall waive--
(1) any rules related to personal guarantee on advances and
loans of not more than $200,000 during the covered period for
all applicants;
(2) the requirement that an applicant needs to be in
business for the 1-year period before the disaster, except that
no waiver may be made for a business that was not in operation
on August 8, 2023; and
(3) the requirement in the flush matter following
subparagraph (E) of section 7(b)(2) of the Small Business Act
(15 U.S.C. 636(b)(2)) that an applicant be unable to obtain
credit elsewhere.
(d) Approval and Ability To Repay for Small Dollar Loans.--With
respect to a loan made under section 7(b)(2) of the Small Business Act
(15 U.S.C. 636(b)(2)) during the covered period in response to the
Hawai`i Wildfires, the Administrator may--
(1) approve an applicant based solely on the credit score
of the applicant and shall not require an applicant to submit a
tax return or a tax return transcript for such approval; or
(2) use alternative appropriate methods to determine an
applicant's ability to repay.
(e) Emergency Grant.--
(1) In general.--During the covered period, an entity made
eligible for a loan under section 7(b)(2) of the Small Business
Act (15 U.S.C. 636(b)(2)) by subsection (b) of this Act,
including small business concerns, private nonprofit
organizations, and small agricultural cooperatives, that
applies for a loan under such section 7(b)(2) in response to
the Hawai`i Wildfires may request that the Administrator
provide to such entity an advance that is, subject to paragraph
(4), in the amount requested by such entity.
(2) Timing.--The Administrator shall provide an advance
under this subsection to the entity requesting such advance not
later than three days after the Administrator receives from
such entity an application for a loan under section 7(b)(2) of
the Small Business Act (15 U.S.C. 636(b)(2)) in response to the
Hawai`i Wildfires, a request for such advance, and the self-
certification required by paragraph (3).
(3) Verification.--
(A) In general.--An entity seeking an advance under
this subsection shall submit to the Administrator,
under penalty of perjury pursuant to section 1746 of
title 28, United States Code, a self-certification that
such entity is an eligible entity.
(B) Timing.--The Administrator may not disburse any
amounts under this subsection to an entity before such
entity submits a self-certification under subparagraph
(A).
(4) Amount.--The amount of an advance provided under this
subsection shall be not more than $15,000.
(5) Prioritization.--
(A) In general.--The Administrator shall prioritize
providing advances under this subsection to eligible
entities that experienced economic loss of not less
than 30 percent.
(B) Economic loss defined.--In this paragraph, the
term ``economic loss'' means, with respect to an
eligible entity--
(i) the amount by which the gross receipts
of the eligible entity declined during an 8-
week period between August 8, 2023, and May 10,
2024, relative to a comparable 8-week period
between January 1, 2022, and August 7, 2023; or
(ii) if the eligible entity is a seasonal
business concern, such other amount determined
appropriate by the Administrator.
(6) Use of funds.--An advance provided under this
subsection may be used to address any allowable purpose for a
loan made under section 7(b)(2) of the Small Business Act (15
U.S.C. 636(b)(2)), including--
(A) maintaining payroll to retain employees during
business disruptions or substantial slowdowns;
(B) paying increased costs to obtain materials due
to disruptions to supply chains;
(C) making rent or mortgage payments; and
(D) repaying obligations that cannot be met due to
revenue losses.
(7) Repayment.--
(A) In general.--An entity shall not be required to
repay any amounts of an advance provided under this
subsection, even if subsequently denied a loan under
section 7(b)(2) of the Small Business Act (15 U.S.C.
636(b)(2)).
(B) Tax treatment.--For purposes of the Internal
Revenue Code of 1986--
(i) no amount shall be included in the
gross income of the eligible recipient by
reason of subparagraph (A),
(ii) no deduction shall be denied, no tax
attribute shall be reduced, and no basis
increase shall be denied, by reason of the
exclusion from gross income provided by clause
(i), and
(iii) in the case of an eligible recipient
that is a partnership or S corporation--
(I) any amount excluded from income
by reason of clause (i) shall be
treated as tax exempt income for
purposes of sections 705 and 1366 of
title 26, and
(II) except as provided by the
Secretary of the Treasury (or the
Secretary's delegate), any increase in
the adjusted basis of a partner's
interest in a partnership under section
705 of title 26 with respect to any
amount described in subclause (I) shall
equal the partner's distributive share
of deductions resulting from costs paid
in accordance with paragraph (6) using
amounts from an advance provided under
this section.
(8) Subsequent loan grant.--If an entity that receives an
advance under this subsection transfers into, or is approved
for, the loan program under paragraph (38) of section 7(a) of
the Small Business Act (15 U.S.C. 636(a)), the advance amount
shall be reduced from the loan forgiveness amount for a loan
for payroll costs made under such paragraph (38).
(9) Authorization of appropriations.--There is authorized
to be appropriated to the Administration $1,000,000,000 to
carry out this subsection.
(10) Termination.--The authority to make advances under
this subsection shall terminate on May 10, 2024.
(f) Appropriations.--There is appropriated, out of amounts in the
Treasury not otherwise appropriated, for the fiscal year ending
September 30, 2023, to remain available until September 30, 2024, for
additional amounts $1,000,000,000 under the heading ``Small Business
Administration--Emergency EIDL Grants'' for carrying out this section.
SEC. 3. MAUI WILDFIRE PAYCHECK PROTECTION PROGRAM.
(a) 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 new
subparagraph:
``(G) Participation in the maui wildfire paycheck
protection program.--In an agreement to participate in
a loan on a deferred basis under paragraph (38), the
participation by the Administration shall be 100
percent.''; and
(2) by adding at the end the following new paragraph:
``(38) Maui wildfire paycheck protection program.--
``(A) Definitions.--In this paragraph--
``(i) the terms `appropriate Federal
banking agency', `insured depository
institution', `eligible self-employed
individual', `insured credit union', `nonprofit
organization', `payroll costs' and `veterans
organization' have the meanings given such
terms under paragraph (36)(A);
``(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 August 8, 2023, and ending
on May 10, 2024; and
``(iv) the term `eligible recipient' means
an individual or entity that is eligible to
receive a covered loan.
``(B) Maui wildfire paycheck protection program.--
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.
``(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 title 26)
assigned to the borrower.
``(D) Increased eligibility for certain small
business and organizations.--
``(i) 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 determined
necessary by the Administrator and the
Secretary, to establish the applicant
as eligible.
``(ii) Business concerns with more than 1
physical location.--During the covered period,
any business concern that employs not more than
500 employees per physical location of the
business concern and that is assigned a North
American Industry Classification System code
beginning with 72 at the time of disbursal
shall be eligible to receive a covered loan.
``(iii) Waiver of affiliation rules.--
During the covered period, the provisions
applicable to affiliations under section
121.103 of title 13, Code of Federal
Regulations, or any successor regulation, are
waived with respect to eligibility for a
covered loan for--
``(I) any business concern with not
more than 500 employees that, as of the
date on which the covered loan is
disbursed, is assigned a North American
Industry Classification System code
beginning with 72;
``(II) any business concern
operating as a franchise that is
assigned a franchise identifier code by
the Administration; and
``(III) any business concern that
receives financial assistance from a
company licensed under section 301 of
the Small Business Investment Act of
1958 (15 U.S.C. 681).
``(iv) Affiliation.--The provisions
applicable to affiliations under section
121.103 of title 13, Code of Federal
Regulations, or any successor thereto, shall
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.--During the covered
period, with respect to a covered loan, the maximum
loan amount shall be the lesser of--
``(i)(I) the sum of--
``(aa) the product obtained by
multiplying--
``(AA) the average total
monthly payments by the
applicant for payroll costs
incurred during the 1-year
period before the date on which
the loan is made, except that,
in the case of an applicant
that is seasonal employer, as
determined by the
Administrator, the average
total monthly payments for
payroll shall be for any 12-
week period selected by the
seasonal employer that is
between August 8, 2023, and May
10, 2024 and ends before the
date on which the loan is made;
by
``(BB) 2.5; and
``(bb) the outstanding amount of a
loan under subsection (b)(2) that was
made during the period beginning on
August 8, 2023, and ending on the date
on which covered loans are made
available to be refinanced under the
covered loan; or
``(II) if requested by an otherwise
eligible recipient that was not in business
during the period beginning on August 8, 2022,
and ending on May 10, 2023, the sum of--
``(aa) the product obtained by
multiplying--
``(AA) the average total
monthly payments by the
applicant for payroll costs
incurred during the period
beginning on May 11, 2023, and
ending on August 8, 2023; by
``(BB) 2.5; and
``(bb) the outstanding amount of a
loan under subsection (b)(2) that was
made during the period beginning on
August 8, 2023, and ending on the date
on which covered loans are made
available to be refinanced under the
covered loan; or
``(ii) the costs, expenses, and
expenditures described in subclauses (I)
through (XI) of subparagraph (F)(i) that were
incurred by the applicant during the covered
period with respect to employees of the
applicant on Maui, up to $10,000,000.
``(F) Allowable uses of covered loans.--
``(i) In general.--During the covered
period, an eligible recipient may, in addition
to the allowable uses of a loan made under this
subsection, use the proceeds of the covered
loan for any of the following costs, expenses,
or expenditures incurred with respect to
employees, property, or operations of the
eligibility recipient on Maui:
``(I) Payroll costs.
``(II) Costs related to the
continuation of group health care
benefits during periods of paid sick,
medical, or family leave, and insurance
premiums.
``(III) Employee salaries,
commissions, or similar compensations.
``(IV) Payments of interest on any
mortgage obligation (which shall not
include any prepayment of or payment of
principal on a mortgage obligation).
``(V) Rent (including rent under a
lease agreement).
``(VI) Utilities.
``(VII) Interest on any other debt
obligations that were incurred before
the covered period.
``(VIII) Covered operations
expenditures, as defined in section
4(a) of the Healing and Economic
Advancement for Local businesses in
Maui Act.
``(IX) Covered property damage
costs, as defined in such section.
``(X) Covered supplier costs, as
defined in such section.
``(XI) Covered worker protection
expenditures, as defined in such
section.
``(ii) Delegated authority.--
``(I) In general.--For purposes of
making covered loans for the purposes
described in clause (i), 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.
``(II) Considerations.--In
evaluating the eligibility of a
borrower for a covered loan with the
terms described in this paragraph, a
lender shall consider whether the
borrower--
``(aa) was in operation on
August 8, 2023; and
``(bb)(AA) had employees
for whom the borrower paid
salaries and payroll taxes; or
``(BB) paid independent
contractors, as reported on a
Form 1099-MISC.
``(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 August 8, 2023, 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 (i) or
(iv).
``(G) Certification.--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) acknowledging that funds will be
used to retain workers and maintain payroll or
make mortgage payments, lease payments, and
utility payments;
``(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 covered period, that the
eligible recipient has not received amounts
under this subsection for the same purpose and
duplicative of amounts applied for or received
under a covered loan.
``(H) Fee waiver.--With respect to a covered loan--
``(i) in lieu of the fee otherwise
applicable under paragraph (23)(A), the
Administrator shall collect no fee; and
``(ii) in lieu of the fee otherwise
applicable under paragraph (18)(A), the
Administrator shall collect no fee.
``(I) Credit elsewhere.--During the covered period,
the requirement that a small business concern is unable
to obtain credit elsewhere, as defined in section 3(h),
shall not apply to a covered loan.
``(J) Waiver of personal guarantee requirement.--
With respect to a covered loan--
``(i) no personal guarantee shall be
required for the covered loan; and
``(ii) no collateral shall be required for
the covered loan.
``(K) Maturity for loans with remaining balance
after application of forgiveness.--With respect to a
covered loan that has a remaining balance after
reduction based on the loan forgiveness amount under
section 4 of the Healing and Economic Advancement for
Local businesses in Maui Act--
``(i) the remaining balance shall continue
to be guaranteed by the Administration under
this subsection; and
``(ii) the covered loan shall have a
maximum maturity of 10 years from the date on
which the borrower applies for loan forgiveness
under that section.
``(L) Interest rate requirements.--A covered loan
shall bear an interest rate not to exceed 4 percent,
calculated on a non-compounding, non-adjustable basis.
``(M) Loan deferment.--
``(i) Definition of impacted borrower.--
``(I) In general.--In this
subparagraph, the term `impacted
borrower' means an eligible recipient
that--
``(aa) was in operation on
August 8, 2023; and
``(bb) has an application
for a covered loan that is
approved or pending approval on
or after the date of the
enactment of this paragraph.
``(II) Presumption.--For purposes
of this subparagraph, an impacted
borrower is presumed to have been
adversely impacted by the Hawai'i
Wildfires.
``(ii) Deferral.--During the covered
period, the Administrator shall--
``(I) consider each eligible
recipient that applies for a covered
loan to be an impacted borrower; and
``(II) require lenders under this
subsection to provide complete payment
deferment relief for impacted borrowers
with covered loans for a period of not
less than 6 months, including payment
of principal, interest, and fees, and
not more than 1 year.
``(iii) Secondary market.--During the
covered period, with respect to a covered loan
that is sold on the secondary market, if an
investor declines to approve a deferral
requested by a lender under clause (ii), the
Administrator shall exercise the authority to
purchase the loan so that the impacted borrower
may receive a deferral for a period of not less
than 6 months, including payment of principal,
interest, and fees, and not more than 1 year.
``(iv) Guidance.--Not later than 30 days
after the date of enactment of this paragraph,
the Administrator shall provide guidance to
lenders under this paragraph on the deferment
process described in this subparagraph.
``(N) Secondary market sales.--A covered loan shall
be eligible to be sold in the secondary market
consistent with this subsection. The Administrator may
not collect any fee for any guarantee sold into the
secondary market under this subparagraph.
``(O) Regulatory capital requirements.--
``(i) Risk weight.--With respect to the
appropriate Federal banking agencies or the
National Credit Union Administration Board
applying capital requirements under their
respective risk-based capital requirements, a
covered loan shall receive a risk weight of
zero percent.
``(ii) Temporary relief from tdr
disclosures.--Notwithstanding any other
provision of law, an insured depository
institution or an insured credit union that
modifies a covered loan in relation to Hawai`i
Wildfire-related difficulties in a troubled
debt restructuring on or after August 8, 2023,
shall not be required to comply with the
Financial Accounting Standards Board Accounting
Standards Codification Subtopic 310-40
(`Receivables - Troubled Debt Restructurings by
Creditors') for purposes of compliance with the
requirements of the Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.), until such time
and under such circumstances as the appropriate
Federal banking agency or the National Credit
Union Administration Board, as applicable,
determines appropriate.
``(P) Reimbursement for processing.--
``(i) In general.--The Administrator shall
reimburse a lender authorized to make a covered
loan at a rate, based on the balance of the
financing outstanding at the time of
disbursement of the covered loan, of--
``(I) the lesser of 50 percent of
such balance or $2,500 for a covered
loan of not more than $50,000;
``(II) 5 percent for a covered loan
of more than $50,000 and not more than
$350,000;
``(III) 3 percent for a covered
loan of more than $350,000 and less
than $2,000,000; and
``(IV) 1 percent for a covered loan
of not less than $2,000,000.
``(ii) Fee limits.--An agent that assists
an eligible recipient to prepare an application
for a covered loan may not collect a fee in
excess of the limits established by the
Administrator. If an eligible recipient has
knowingly retained an agent, such fees shall be
paid by the eligible recipient and may not be
paid out of the proceeds of a covered loan. A
lender shall only be responsible for paying
fees to an agent for services for which the
lender directly contracts with the agent.
``(iii) Timing.--A reimbursement described
in clause (i) shall be made not later than 5
days after the disbursement of the covered
loan.
``(Q) Duplication.--Nothing in this paragraph shall
prohibit a recipient of an economic injury disaster
loan made under subsection (b)(2) during the period
beginning on August 8, 2023, and ending on the date on
which covered loans are made available that is for a
purpose other than paying payroll costs or any other
purpose described in subparagraph (F) from receiving
assistance under this paragraph.
``(R) Waiver of prepayment penalty.--
Notwithstanding any other provision of law, there shall
be no prepayment penalty for any payment made on a
covered loan.''.
(b) Set-Asides for Insured Depository Institutions, Credit Unions,
and Community Financial Institutions.--
(1) Insured depository institutions and credit unions.--In
making loan guarantees under paragraph (38) of section 7(a) of
the Small Business Act (15 U.S.C. 636(a)), the Administrator of
the Small Business Administration shall guarantee not less than
$30,000,000,000 in loans made by--
(A) insured depository institutions with
consolidated assets of not less than $10,000,000,000
and less than $50,000,000,000; and
(B) credit unions with consolidated assets of not
less than $10,000,000,000 and less than
$50,000,000,000.
(2) Community financial institutions, small insured
depository institutions, and credit unions.--In making loan
guarantees under paragraph (38) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), the Administrator of the Small
Business Administration shall guarantee not less than
$30,000,000,000 in loans made by--
(A) community financial institutions;
(B) insured depository institutions with
consolidated assets of less than $10,000,000,000; and
(C) credit unions with consolidated assets of less
than $10,000,000,000.
(3) Definitions.--In this subsection, the terms ``community
financial institution'', ``credit union'', and ``insured
depository institution'' have the meanings given such terms in
section 7(a)(36)(A) of the Small Business Act (15 U.S.C.
636(a)(36)(A)).
(c) Commitments for 7(a) Loans.--During the period beginning on
August 8, 2023, and ending on May 10, 2024--
(1) the amount authorized for commitments for loans
authorized under paragraph (38) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), as added by subsection (a) of
this section, shall be $400,000,000,000; and
(2) the amount authorized for commitments for general
business loans under the heading ``Business Loans Program
Account'' in title V of the Financial Services and General
Government Appropriations Act, 2023 (division E of Public Law
117-328) shall not apply with respect to the loans described in
paragraph (1).
(d) Express Loans.--Section 7(a)(31)(D) of the Small Business Act
(15 U.S.C. 636(a)(31)(D)) is amended by striking ``$500,000'' and
inserting ``$1,000,000''.
SEC. 4. LOAN FORGIVENESS.
(a) Definitions.--In this section:
(1) Administration.--The term ``Administration'' means the
Small Business Administration.
(2) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(3) Covered loan.--The term ``covered loan'' means--
(A) a loan of more than $500 made under paragraph
(1) or (2) of section 7(b) of the Small Business Act
(15 U.S.C. 636(b)) during the period beginning on
August 8, 2023, and ending on May 10, 2024 in response
to the Hawai'i Wildfires; or
(B) a loan guaranteed under paragraph (38) of
section 7(a) of such Act (15 U.S.C. 636(a)), as added
by section 3(a).
(4) Covered mortgage obligation.--The term ``covered
mortgage obligation'' means any indebtedness or debt instrument
incurred in the ordinary course of business that--
(A) is a liability of the borrower;
(B) is a mortgage on real or personal property; and
(C) was incurred before August 8, 2023.
(5) Covered operations expenditure.--The term ``covered
operations expenditure'' has the meaning given such term in
section 7A(a) of the Small Business Act (15 U.S.C. 636m(a)).
(6) Covered period.--The term ``covered period'' means the
period--
(A) beginning on the date of the origination of a
covered loan; and
(B) ending on a date selected by the eligible
recipient of the covered loan that occurs during the
period--
(i) beginning on the date that is 8 weeks
after such date of origination; and
(ii) ending on the date that is 24 weeks
after such date of origination.
(7) Covered property damage cost.--The term ``covered
property damage cost'' means a cost related to property damage
and vandalism or looting due to public disturbances that
occurred during the period beginning on August 8, 2023, and
ending on May 10, 2024 that was not covered by insurance or
other compensation.
(8) Covered rent obligation.--The term ``covered rent
obligation'' means rent obligated under a leasing agreement in
force before August 8, 2023.
(9) Covered supplier cost.--The term ``covered supplier
cost'' means an expenditure made by an entity to a supplier of
goods for the supply of goods that--
(A) are essential to the operations of the entity
at the time at which the expenditure is made; and
(B) is made pursuant to a contract, order, or
purchase order--
(i) in effect at any time before the
covered period with respect to the applicable
covered loan; or
(ii) with respect to perishable goods, in
effect before or at any time during the covered
period with respect to the applicable covered
loan.
(10) Covered utility payment.--The term ``covered utility
payment'' means payment for a service for the distribution of
electricity, gas, water, transportation, telephone, or internet
access for which service began before August 8, 2023.
(11) Eligible recipient.--The term ``eligible recipient''
means the recipient of a covered loan.
(12) Expected forgiveness amount.--The term ``expected
forgiveness amount'' means--
(A) with respect to a covered loan described in
paragraph (3)(A), the amount of principal of such loan
that a lender reasonably expects a borrower to expend
during the covered period on costs payable using such
covered loan under section 7(b) of the Small Business
Act (15 U.S.C. 636(b)); and
(B) with respect to a covered loan described in
paragraph (3)(B), the amount of principal of such
covered loan that a lender reasonably expects a
borrower to expend during the covered period on the sum
of any--
(i) payroll costs;
(ii) payments of interest on any covered
mortgage obligation (which shall not include
any prepayment of or payment of principal on a
covered mortgage obligation);
(iii) payments on any covered rent
obligation;
(iv) covered utility payments;
(v) covered operations expenditures;
(vi) covered property damage costs; and
(vii) covered supplier costs.
(13) Hawai'i wildfires.--The term ``Hawai'i Wildfires'' has
the meanings given such term in section 2(a).
(14) Payroll costs; seasonal employer.--
(A) In general.--Except as provided in subparagraph
(B), the terms ``payroll costs'' and ``seasonal
employer'' have the meanings given those terms in
section 7(a)(36)(A) of the Small Business Act (15
U.S.C. 636(a)(36)(A)).
(B) Payroll costs exclusions.--The term ``payroll
costs'' shall not include qualified wages taken into
account in determining the credit allowed under section
2301 of the CARES Act (26 U.S.C. 3111 note), qualified
wages taken into account in determining the credit
allowed under subsection (a) or (d) of section 303 of
the Taxpayer Certainty and Disaster Relief Act of 2020
(Public Law 116-260; 134 Stat. 3075), or premiums taken
into account in determining the credit allowed under
section 6432 of the Internal Revenue Code of 1986.
(15) Private school.--The term ``private school'' means an
institution of higher education (as such term is defined in
section 101(a) of the Higher Education Act of 1965 (20 U.S.C.
1001(a)) that is not a public institution.
(b) Forgiveness and Waivers.--
(1) Payroll loans.--A recipient of a covered loan described
in subsection (a)(3)(B) shall be eligible for forgiveness of
indebtedness on such covered loan in an amount equal to the sum
of the following costs incurred and payments made during the
covered period:
(A) Payroll costs.
(B) Any payment of interest on any covered mortgage
obligation (which shall not include any prepayment of
or payment of principal on a covered mortgage
obligation).
(C) Any payment on any covered rent obligation.
(D) Any covered utility payment.
(E) Any covered operations expenditure.
(F) Any covered property damage cost.
(G) Any covered supplier cost.
(2) Disaster loans.--
(A) In general.--Except as provided by subparagraph
(B), a recipient of a covered loan described in
subsection (a)(3)(A) shall, at the election of the
recipient, be eligible for--
(i) forgiveness of indebtedness on such
covered loan in amount equal to the lesser of--
(I) the amount by which such
covered loan exceeds $500; and
(II) $1800; or
(ii) a waiver of interest charges on such
covered loan, except that--
(I) the total amount of interest
waived under such waiver may not exceed
$1800; and
(II) such waiver may last not more
than three years.
(B) Private schools.--A recipient of a covered loan
described in subsection (a)(3)(A) that is a private
school shall, at the election of the recipient, be
eligible for--
(i) forgiveness of indebtedness on such
covered loan as described in subparagraph
(A)(i); or
(ii) a waiver of interest and principal
charges on such covered.
(c) Treatment of Amounts Forgiven and Waived.--
(1) In general.--Amounts which have been forgiven under
this section shall be considered canceled indebtedness by the
lender.
(2) 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)).
(3) Remittances.--
(A) Forgiven amounts.--Not later than 90 days after
the date on which the amount of forgiveness under this
section is determined with respect to a covered loan
described in subsection (a)(3)(B), and not later the
two weeks after the date on which the amount of
forgiveness under this section is determined with
respect to a covered loan described in subsection
(a)(3)(A), the Administrator shall remit to the lender
an amount equal to the amount of forgiveness, plus any
interest accrued through the date of payment.
(B) Interest waived.--During the period interest
charges are waived under subparagraphs (A)(ii) or
(B)(ii) of subsection (b)(2) on a covered loan in which
any individual or entity other than the Administrator
is participating, the Administrator shall pay to each
individual and entity participating in the covered loan
the interest that, but for such subsection, would be
owed to such individual or entity at the time such
interest would be due.
(4) Advance purchase of covered loans.--
(A) Report.--A lender authorized under subsections
(a) or (b) of section 7 of the Small Business Act (15
U.S.C. 636), or, at the discretion of the
Administrator, a third party participant in the
secondary market, may, report to the Administrator an
expected forgiveness amount on a covered loan or on a
pool of covered loans of up to 100 percent of the
principal on the covered loan or pool of covered loans,
respectively.
(B) Purchase.--The Administrator shall purchase the
expected forgiveness amount described in subparagraph
(A) as if the amount were the principal amount of a
loan guaranteed under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)).
(C) Timing.--Not later than 15 days after the date
on which the Administrator receives a report under
subparagraph (A), the Administrator shall purchase the
expected forgiveness amount under subparagraph (B) with
respect to each covered loan to which the report
relates.
(d) Application.--
(1) 7(a) loans.--An eligible recipient seeking loan
forgiveness with respect to a covered loan described in
subsection (a)(3)(B) under this section shall submit to the
lender that is servicing the covered loan an application, which
shall include--
(A) documentation verifying the number of full-time
equivalent employees on payroll and pay rates to
support such loan forgiveness, including--
(i) payroll tax filings reported to the
Internal Revenue Service; and
(ii) State income, payroll, and
unemployment insurance filings;
(B) documentation, including cancelled checks,
payment receipts, transcripts of accounts, purchase
orders, orders, invoices, or other documents verifying
payments on covered mortgage obligations, payments on
covered rent obligations, payments on covered
operations expenditures, payments on covered property
damage costs, payments on covered supplier costs,
payments on covered worker protection expenditures, and
covered utility payments;
(C) a certification from a representative of the
eligible recipient authorized to make such
certifications that--
(i) the documentation presented is true and
correct; and
(ii) the amount for which forgiveness is
requested was used to retain employees, make
interest payments on a covered mortgage
obligation, make payments on a covered rent
obligation, make payments on covered operations
expenditures, make payments on covered property
damage costs, make payments on covered supplier
costs, make payments on covered worker
protection expenditures, or make covered
utility payments; and
(D) any other documentation the Administrator
determines necessary.
(2) Disaster loans.--
(A) In general.--An eligible recipient seeking loan
forgiveness with respect to a covered loan described in
subsection (a)(3)(A) under this section shall submit to
the appropriate entity an application at such time, in
such manner, and containing such information as the
Administrator determines appropriate.
(B) Appropriate entity defined.--In this paragraph,
the term ``appropriate entity'' means--
(i) with respect to a covered loan
described in subsection (a)(3)(A) in which the
Administrator is participating on a guaranteed
basis, the lender that is servicing the covered
loan; and
(ii) in all other cases, the Administrator.
(e) Prohibition on Forgiveness Without Documentation.--No eligible
recipient shall receive forgiveness under this section without
submitting the documentation required under subsection (d).
(f) Decision.--Not later than 60 days after the date on which a
lender or the Administrator receives an application under subsection
(e) for loan forgiveness under this section from an eligible recipient,
the lender or the Administrator, as applicable, shall issue a decision
on the application.
(g) Hold Harmless.--
(1) Reliance.--A lender may rely on any certification or
documentation submitted by an applicant for a covered loan or
an eligible recipient or eligible entity receiving a covered
loan that--
(A) is submitted pursuant to all applicable
statutory requirements, regulations, and guidance
related to such covered loan, including under
subsections (a)(38), as added by section 3(a) of this
Act, and (b) section 7 of the Small Business Act (15
U.S.C. 636) and under this section; and
(B) attests that the applicant, eligible recipient,
or eligible entity, as applicable, has accurately
provided the certification or documentation to the
lender in accordance with the statutory requirements,
regulations, and guidance described in subparagraph
(A).
(2) No enforcement action.--With respect to a lender that
relies on a certification or documentation described in
paragraph (1) related to covered loan, an enforcement action
may not be taken against the lender, and the lender shall not
be subject to any penalties relating to loan origination or
forgiveness of the covered loan, if--
(A) the lender acts in good faith relating to loan
origination or forgiveness of the covered loan based on
that reliance; and
(B) all other relevant Federal, State, local, and
other statutory and regulatory requirements applicable
to the lender are satisfied with respect to the covered
loan.
(h) Tax Treatment.--For purposes of the Internal Revenue Code of
1986--
(1) no amount shall be included in the gross income of the
eligible recipient by reason of forgiveness of indebtedness or
waivers described in subsection (b),
(2) no deduction shall be denied, no tax attribute shall be
reduced, and no basis increase shall be denied, by reason of
the exclusion from gross income provided by paragraph (1), and
(3) in the case of an eligible recipient that is a
partnership or S corporation--
(A) any amount excluded from income by reason of
paragraph (1) shall be treated as tax exempt income for
purposes of sections 705 and 1366 of the Internal
Revenue Code of 1986, and
(B) except as provided by the Secretary of the
Treasury (or the Secretary's delegate), any increase in
the adjusted basis of a partner's interest in a
partnership under section 705 of the Internal Revenue
Code of 1986 with respect to any amount described in
subparagraph (A) shall equal the partner's distributive
share of deductions resulting from costs giving rise to
forgiveness described in subsection (b) or from charges
waived as described in such subsection.
(i) 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.
(j) Regulations.--Not later than 30 days after the date of
enactment of this Act, the Administrator shall issue guidance and
regulations implementing this section.
SEC. 5. MAUI WILDFIRE PAYCHECK PROTECTION PROGRAM LOAN FACILITY.
The Board of Governors of the Federal Reserve System shall, under
section 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)), establish
a Maui Wildfire Paycheck Protection Program Liquidity Facility to
provide loans to entities making loans guaranteed under the Maui
Wildfire Paycheck Protection Program. In establishing the requirements
for the Maui Wildfire Paycheck Protection Program, the Board of
Governors shall make the requirements as close as practicable to the
requirements applicable to the Paycheck Protection Program Liquidity
Facility.
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