Congress is working on legislation that will make changes to the Paycheck Protection Program (PPP).
Here’s what we know:
Yesterday afternoon (Thursday, May 21), Senators Marco Rubio (R-FL), Ben Cardin (D-MD), Susan Collins (R-ME) and Jeanne Shaheen (D-NH) agreed on legislation that would make changes to the PPP.
Their bill would:
• Extend the deadline to apply for a PPP loan from June 30, 2020, to December 31, 2020.
• Allow borrowers 16 weeks to use their loan funds, instead of 8 weeks.
• Allow borrowers to use loan funds to purchase personal protective equipment for employees and to pay for adaptive investments needed to reopen safely. Adaptive investments include modifications to commercial property to comply with public health guidelines from the CDC and other relevant federal agencies.
• Clarify that borrowers who have maintained payroll for 8 weeks will not lose loan forgiveness due to the extension of the program to 16 weeks; and,
• Ensure that lenders are not held liable for the borrower certification and documentation they provide when applying for a PPP and subsequent forgiveness. Also, lenders who followed PPP guidance released by SBA/Treasury are not held liable for doing so if that guidance changed.
The bill sponsors are attempting to “hotline” this proposal through the Senate, a procedure that allows for quick consideration of legislation. The Senate adjourned late yesterday with no action being taken, so they are likely to take this bill up when senators get back from their Memorial Day recess on June 1.
House of Representatives
Next week, the House of Representatives is expected to vote on H.R. 6886, The Paycheck Protection Act, that will make several changes to the PPP. It is sponsored by Representatives Chip Roy (R-TX) and Dean Phillips (D-MN).
Their bill would:
• Allow forgiveness for expenses beyond the 8-week covered period.
• Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds.
• Eliminate restrictions that limit loan terms to 2 years.
• Ensure full access to payroll tax deferment for businesses that take PPP loans.
• Extend the rehiring deadline to offset the effect of enhanced Unemployment Insurance.
If the bills the House and Senate pass are different, they will have to be reconciled. We will continue to keep you informed on the progress of each of these proposals.
Source: National Association of Professional Employer Organizations (NAPEO)
Important Reminder: The information in this article is current only as of the date of the posting. The situation is rapidly evolving. Please check our website frequently for the latest guidance.