- House bill passed yesterday would extend the 8-week period to 24 weeks; also amend 75% rule
- Senate marking up its own bill that would extend the 8-week period to 16 weeks
- The two bills set to clash next week as the two chambers will try to find a compromise
The House of Representatives fell one vote shy of a unanimously passing its Paycheck Protection Program Flexibility (PPP) Act yesterday as Congress begins the process to amend the popular relief program it created in April. The bill, which passed 417-1, seeks to provide small business owners with increased flexibility as it relates to how they spend the funds distributed to them as part of the PPP. Among numerous changes, the PPP Flexibility Act proposes to change the length of the Forgiveness Period from 8 weeks to 24 weeks as well as relax the 75% rule, which states that business owners must spend at least 75% of the funds on payroll and payroll-related costs in order to achieve forgiveness, to 60%. The bill would also push back the deadline to rehire workers from June 30 to December 31 and extend the two-year term for the loans to five years.
The bill from the Democratically-controlled House is set to face opposition in the Republican-led Senate, where Senators, led by Marco Rubio, have their own version of a PPP extension bill that overlaps in general terms but differs sharply in specifics. For example, the Senate bill proposes extending the Forgiveness Period to 16 weeks, rather than 24. Additionally, while the Senate bill does not specifically address the 75% rule, it proposes to include personal protective equipment (PPE) for employees in the list of forgivable expenses that business owners would be allowed to purchase with PPP funds. The clash is set to begin next week, as the Senate failed to pass its bill prior to recessing for the week. While general components in each bill have wide, bipartisan support, both members of Congress and outside advocacy groups remain skeptical if the two chambers can come to a timely compromise for the $660 billion program.
As the PPP coffers continue to be depleted, small business owners wait with bated breath to see what the terms of the final bill will look like. Visit the DSJCPA COVID-19 Information Center to stay current on the updates coming out of Congress or to speak with a member of our Coronavirus Response Team (CRT).
Chief Business Officer, Disaster Relief Consultant
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