Paycheck Protection Program Flexibility Act of 2020

II 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 protec- tion 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 protec- tion program to defer payroll taxes, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Paycheck Protection 4 Program Flexibility Act of 2020’’. 5 VerDate Sep 11 2014 02:14 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3805.IS S3805 kjohnson on DSK79L0C42PROD with BILLS 2 •S 3805 IS SEC. 2. MATURITY FOR LOANS WITH REMAINING BALANCE 1 AFTER APPLICATION OF FORGIVENESS. 2 Section 7(a)(36)(K)(ii) of the Small Business Act (15 3 U.S.C. 636(a)(36)(K)(ii)) is amended by inserting ‘‘min- 4 imum maturity of 5 years and a’’ before ‘‘maximum matu- 5 rity’’. 6 SEC. 3. AMENDMENTS TO PAYCHECK PROTECTION PRO- 7 GRAM LOAN FORGIVENESS. 8 (a) EXTENSION OF COVERED PERIOD.—Section 9 7(a)(36)(A)(iii) of the Small Business Act (15 U.S.C. 10 636(a)(36)(A)(iii)) is amended by striking ‘‘June 30, 11 2020’’ and inserting ‘‘December 31, 2020’’. 12 (b) FORGIVENESS.—Section 1106 of the CARES Act 13 (Public Law 116–136) is amended— 14 (1) in subsection (a), by striking paragraph (3) 15 and inserting the following: 16 ‘‘(3) the term ‘covered period’ means, subject to 17 subsection (l), the period beginning on the date of 18 the origination of a covered loan and ending the ear- 19 lier of— 20 ‘‘(A) the date that is 24 weeks after such 21 date of origination; or 22 ‘‘(B) December 31, 2020;’’; 23 (2) in subsection (d)— 24 VerDate Sep 11 2014 02:14 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3805.IS S3805 kjohnson on DSK79L0C42PROD with BILLS 3 •S 3805 IS (A) in paragraph (5)(B), by striking ‘‘June 1 30, 2020’’ each place it appears and inserting 2 ‘‘December 31, 2020’’; and 3 (B) by adding at the end the following: 4 ‘‘(7) EXEMPTION BASED ON EMPLOYEE AVAIL- 5 ABILITY.—During the period beginning on February 6 15, 2020, and ending on December 31, 2020, the 7 amount of loan forgiveness under this section shall 8 be determined without regard to a reduction in the 9 number of full-time equivalent employees if an eligi- 10 ble recipient— 11 ‘‘(A) is unable to rehire an individual who 12 was an employee of the eligible recipient on or 13 before February 15, 2020; 14 ‘‘(B) is able to demonstrate an inability to 15 hire similarly qualified employees on or before 16 December 31, 2020; or 17 ‘‘(C) is able to demonstrate an inability to 18 return to the same level of business activity as 19 the eligible recipient was operating at before 20 February 15, 2020. 21 ‘‘(8) NO LIMITATIONS.—In carrying out this 22 section, the Administrator may not limit the non- 23 payroll portion of a forgivable covered loan 24 amount;’’; and 25 VerDate Sep 11 2014 02:14 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3805.IS S3805 kjohnson on DSK79L0C42PROD with BILLS 4 •S 3805 IS (3) by adding at the end the following new sub- 1 section: 2 ‘‘(l) APPLICATION TO CERTAIN ELIGIBLE RECIPI- 3 ENTS.—An eligible recipient that received a covered loan 4 before the date of enactment of this subsection may elect 5 for the covered period applicable to such covered loan to 6 end on the date that is 8 weeks after the date of the origi- 7 nation of such covered loan.’’. 8 SEC. 4. DELAY OF PAYMENT OF EMPLOYER PAYROLL 9 TAXES. 10 Section 2302(a) of the CARES Act (Public Law 116– 11 136) is amended by striking paragraph (3). 12 SEC. 5. EFFECTIVE DATE; APPLICABILITY. 13 The amendments made by this Act shall be effective 14 as if included in the CARES Act (Public Law 116–136) 15 and shall apply to any loan made pursuant to section 16 7(a)(36) of the Small Business Act (15 U.S.C. 17 636(a)(36)) or section 1109 of the CARES Act (Public 18 Law 116–136). 19 Æ VerDate Sep 11 2014 02:14 Jun 13, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S3805.IS S3805 kjohnson on DSK79L0C42PROD with BILLS