House Passes Bill Providing Greater Flexibility for Paycheck Protection Program Loans
On Thursday, the House passed the Paycheck Protection Flexibility Act (H.R. 7010) by a vote of 417-1. This legislation makes several changes to the Paycheck Protection Program (PPP) including: (1) extending the expense forgiveness period from eight weeks to twenty-four weeks; (2) reducing the minimum amount that must be spent on payroll to 60 percent from 75 percent; (3) allowing payroll tax deferment for PPP recipients; and (4) extending the June 30 deadline to rehire employees to December 31, 2020.
Passage of H.R. 7010 in the House came after House Democrats scaled the bill back an initial version of the bill—H.R. 6886 that we notified you of last week—to address objections from labor leaders who believed the bill would have given business less incentive to hire back employees.
Despite the overwhelming support in the House, however, technical issues with H.R. 7010 may prevent the Senate from taking up and quickly sending the bill to the President when that chamber returns next week. Specifically, H.R. 7010 states that to in order receive loan forgiveness a business "shall use at least 60 percent" of the loan amount for payroll costs. This provision has raised concerns that, instead of giving flexibility to businesses as intended, this measure would stop them from having any portion of their loans forgiven if they do not meet the 60 percent requirement. Senate Small Business Committee Chairman Marco Rubio (R-FL) raised concerns that this provision, as well as a section that would change requirements for rehiring employees, could “create an unintended disincentive to rehiring [workers].”
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