HEAL Maui Act

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.

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)).

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.

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.

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.

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).

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.

The Administrator may not disburse any amounts under this subsection to an entity before such entity submits a self-certification under subparagraph (A).

The amount of an advance provided under this subsection shall be not more than $15,000.

The Administrator shall prioritize providing advances under this subsection to eligible entities that experienced economic loss of not less than 30 percent.

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.

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.

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)).

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.

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).

There is authorized to be appropriated to the Administration $1,000,000,000 to carry out this subsection.

The authority to make advances under this subsection shall terminate on May 10, 2024.

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.

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:; and

In an agreement to participate in a loan on a deferred basis under paragraph (38), the participation by the Administration shall be 100 percent.

(2) by adding at the end the following new paragraph:

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.

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.

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.

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.

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.

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.

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).

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.

During the covered period, with respect to a covered loan, the maximum loan amount shall be the lesser of—

(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.

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.

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.

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

(AA) had employees for whom the borrower paid salaries and payroll taxes; or

(BB) paid independent contractors, as reported on a Form 1099–MISC.

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.

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.

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).

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.

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.

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.

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.

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.

A covered loan shall bear an interest rate not to exceed 4 percent, calculated on a non-compounding, non-adjustable basis.

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.

For purposes of this subparagraph, an impacted borrower is presumed to have been adversely impacted by the Hawai’i Wildfires.

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.

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.

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.

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.

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.

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.

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.

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.

A reimbursement described in clause (i) shall be made not later than 5 days after the disbursement of the covered loan.

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.

Notwithstanding any other provision of law, there shall be no prepayment penalty for any payment made on a covered loan.

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.

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.

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)).

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).

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.

In this section:

The term Administration means the Small Business Administration.

The term Administrator means the Administrator of the Small Business Administration.

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).

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.

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)).

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.

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.

The term covered rent obligation means rent obligated under a leasing agreement in force before August 8, 2023.

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.

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.

The term eligible recipient means the recipient of a covered loan.

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.

The term Hawai’i Wildfires has the meanings given such term in section 2(a).

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)).

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.

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.

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.

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.

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.

Amounts which have been forgiven under this section shall be considered canceled indebtedness by the lender.

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)).

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.

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.

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.

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)).

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.

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.

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.

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.

No eligible recipient shall receive forgiveness under this section without submitting the documentation required under subsection (d).

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.

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).

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.

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.

The cancellation of indebtedness on a covered loan under this section shall not otherwise modify the terms and conditions of the covered loan.

Not later than 30 days after the date of enactment of this Act, the Administrator shall issue guidance and regulations implementing this section.