Paycheck Protection Program Flexibility Act of 2020

To amend the Small Business Act and the CARES Act to modify certain provisions related to the forgiveness of loans under the paycheck protection program, to allow recipients of loan forgiveness under the paycheck protection program to defer payroll taxes, and for other purposes. 1. Short title This Act may be cited as the Paycheck Protection Program Flexibility Act of 2020 2. Maturity for loans with remaining balance after application of forgiveness Section 7(a)(36)(K)(ii) of the Small Business Act ( 15 U.S.C. 636(a)(36)(K)(ii) minimum maturity of 5 years and a maximum maturity 3. Amendments to paycheck protection program loan forgiveness (a) Extension of covered period Section 7(a)(36)(A)(iii) of the Small Business Act ( 15 U.S.C. 636(a)(36)(A)(iii) June 30, 2020 December 31, 2020 (b) Forgiveness Section 1106 of the CARES Act ( Public Law 116–136 (1) in subsection (a), by striking paragraph (3) and inserting the following: (3) the term covered period (A) the date that is 24 weeks after such date of origination; or (B) December 31, 2020; ; (2) in subsection (d)— (A) in paragraph (5)(B), by striking June 30, 2020 December 31, 2020 (B) by adding at the end the following: (7) Exemption based on employee availability During the period beginning on February 15, 2020, and ending on December 31, 2020, the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees if an eligible recipient— (A) is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020; (B) is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or (C) is able to demonstrate an inability to return to the same level of business activity as the eligible recipient was operating at before February 15, 2020. (8) No limitations In carrying out this section, the Administrator may not limit the non-payroll portion of a forgivable covered loan amount; ; and (3) by adding at the end the following new subsection: (l) Application to certain eligible recipients An eligible recipient that received a covered loan before the date of enactment of this subsection may elect for the covered period applicable to such covered loan to end on the date that is 8 weeks after the date of the origination of such covered loan. . 4. Delay of payment of employer payroll taxes Section 2302(a) of the CARES Act ( Public Law 116–136 5. Effective date; applicability The amendments made by this Act shall be effective as if included in the CARES Act ( Public Law 116–136 15 U.S.C. 636(a)(36) Public Law 116–136

Summary: Paycheck Protection Program Flexibility Act of 2020 This bill modifies provisions related to the forgiveness of loans made to small businesses under the Paycheck Protection Program implemented in response to COVID-19 (i.e., coronavirus disease 2019). Specifically, the bill establishes a minimum maturity of five years for a paycheck protection loan that has a remaining balance after the application of forgiveness. The bill also extends the covered period during which the recipient of a paycheck protection loan may use such funds for certain expenses while remaining eligible for forgiveness of the loan. Further, the bill prohibits the Small Business Administration from limiting the non-payroll portion of a forgivable covered loan amount. Currently, only 25% of a paycheck protection loan may be allocated to non-payroll expenses such as rent and utilities. The bill extends the period of time in which an employer may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a paycheck protection loan. However, the forgivable amount must be determined without regard to a reduction in the number of employees if the recipient is (1) unable to rehire an employee, (2) able to demonstrate an inability to hire a similarly qualified employee, or (3) able to demonstrate an inability to return to the same level of business activity. Lastly, the bill eliminates a provision that makes a paycheck protection loan recipient who has such indebtedness forgiven ineligible to defer payroll tax payments.