[Congressional Record Volume 166, Number 101 (Monday, June 1, 2020)]
[Extensions of Remarks]
[Page E507]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          PAYCHECK PROTECTION PROGRAM FLEXIBILITY ACT OF 2020

                                 ______
                                 

                               speech of

                             HON. CHIP ROY

                                of texas

                    in the house of representatives

                         Thursday, May 28, 2020

  Mr. ROY. Mr. Speaker, I would like to clarify the intent of some of 
the language in H.R. 7010, and especially the language in the Bill as 
to loan forgiveness.
  Section 3 adds new paragraph 8 (Limitation on Forgiveness) that 
states that:

       To receive loan forgiveness under this section, an eligible 
     recipient shall use at least 60 percent of the covered loan 
     amount for payroll costs, and may use up to 40 percent of 
     such amount for any payment of interest on any covered 
     mortgage obligation (which shall not include any prepayment 
     of or payment of principal on a covered mortgage obligation), 
     any payment on any covered rent obligation, or any covered 
     utility payment.

  The intent of this provision is to reduce the portion of the 
forgivable amount that must be spent on payroll cost, to provide 
employers more flexibility to bring back and retain employees in a 
manner that allows compliance with state and local reopening 
restrictions and the business reality of individual borrowers.
  The SBA, as set forth in the ``Interim Final Rule 1'' issued on April 
2, 2020, has determined that the forgivable portion of the loan (that 
which is spent during the covered period) must be allocated at least 75 
percent to payroll costs. In the event a borrower is unable to spend in 
that ratio during the covered period, the loan is eligible for partial 
forgiveness.
  The IFR in section 2(o) states clearly that a PPP loan can ``be 
forgiven in whole or in part.''

       o. Can my PPP loan be forgiven in whole or in part?
       Yes. The amount of loan forgiveness can be up to the full 
     amount of the full principal amount of the loan and any 
     accrued interest . . . The actual amount of loan forgiveness 
     will depend, in part, on the total amount [of payroll and 
     non-payroll costs] . . . over the eight-week period following 
     the loan . . . However, not more than 25 percent of the loan 
     forgiveness amount may be attributable to non-payroll 
     costs[.]

  The overall spending of the loan is similarly limited in a 75/25 
ratio. Section 2(r) states ``at least 75 percent of the PPP loan 
proceeds shall be used for payroll costs.''
  The intent of this Bill is to retain the existing structure set forth 
by the SBA, but to amend the ratios in both IFR sections from 75/25 to 
60/40 (along with extension of covered period, maturity date and other 
changes) to preserve borrower flexibility and the ability to obtain 
partial or proportional forgiveness of the loan if less than 60 percent 
of covered period expenditures are payroll costs, provided that the 
borrower must spend overall loan proceeds subject to the 60/40 ratio.

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