DC Tax Flash: Bill To Improve Paycheck Protection Program Clears Senate
The Senate this evening waived through a House-passed bill (H.R. 7010) that would modify and make more flexible the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses to retain and pay workers idled by the coronavirus outbreak.
The Paycheck Protection Program Flexibility Act cleared the Senate by unanimous consent. It now goes to the White House and is expected to be signed into law by the president.
As summarized by the Congressional Research Service, the bill would:
- Extend the PPP loan forgiveness covered period from eight weeks after the loan's origination date to the earlier of 24 weeks after the loan's origination date or December 31, 2020;
- Provide borrowers who received a PPP loan prior to the date of enactment the option to use the CARES Act's loan forgiveness covered period of eight weeks after the loan's origination date;
- Replace the 75 percent/25 percent rule on the use of PPP loan proceeds for loan forgiveness purposes to at least 60 percent for payroll costs and up to 40 percent for covered mortgage interest, rent, and utility payments;
- Provide borrowers a "safe harbor" from the loan forgiveness rehiring requirement if the borrower is unable to rehire an individual who was an employee of the recipient on or before February 15, 2020, or if the borrower can demonstrate an inability to hire similarly qualified employees on or before December 31, 2020;
- Establish a minimum PPP loan maturity of five years for loans made on or after the date of enactment; and
- Eliminate the exception in the CARES Act preventing taxpayers who receive PPP.
The eight-page text of H.R. 7010 is posted here.
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