Title: Paycheck Protection Program Flexibility Act of 2020
Policy area: Commerce

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3805 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3805

  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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2020

Mr. King (for himself, Mr. Daines, Mr. Kaine, Mr. Tillis, Ms. Stabenow, 
 and Mr. Gardner) introduced the following bill; which was read twice 
                and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  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.

    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 ``Paycheck Protection Program 
Flexibility Act of 2020''.

SEC. 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)) is amended by inserting ``minimum maturity of 5 
years and a'' before ``maximum maturity''.

SEC. 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)) is amended by 
striking ``June 30, 2020'' and inserting ``December 31, 2020''.
    (b) Forgiveness.--Section 1106 of the CARES Act (Public Law 116-
136) is amended--
            (1) in subsection (a), by striking paragraph (3) and 
        inserting the following:
            ``(3) the term `covered period' means, subject to 
        subsection (l), the period beginning on the date of the 
        origination of a covered loan and ending the earlier of--
                    ``(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'' each place it appears and inserting ``December 
                31, 2020''; and
                    (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.''.

SEC. 4. DELAY OF PAYMENT OF EMPLOYER PAYROLL TAXES.

    Section 2302(a) of the CARES Act (Public Law 116-136) is amended by 
striking paragraph (3).

SEC. 5. EFFECTIVE DATE; APPLICABILITY.

    The amendments made by this Act shall be effective as if included 
in the CARES Act (Public Law 116-136) and shall apply to any loan made 
pursuant to section 7(a)(36) of the Small Business Act (15 U.S.C. 
636(a)(36)) or section 1109 of the CARES Act (Public Law 116-136).
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