[116th Congress Public Law 142]
[From the U.S. Government Publishing Office]
[[Page 134 STAT. 641]]
Public Law 116-142
116th Congress
An Act
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 protection program to defer payroll taxes, and for other
purposes. <<NOTE: June 5, 2020 - [H.R. 7010]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Paycheck
Protection Program Flexibility Act of 2020. 15 USC 631 note.>>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Paycheck Protection Program
Flexibility Act of 2020''.
SEC. 2. MATURITY FOR LOANS WITH REMAINING BALANCE AFTER
APPLICATION OF FORGIVENESS.
(a) In General.--Section 7(a)(36)(K)(ii) of the Small Business Act
(15 U.S.C. 636(a)(36)) is amended by inserting ``minimum maturity of 5
years and a'' before ``maximum maturity''.
(b) <<NOTE: 15 USC 636 note.>> Effective Date; Applicability.--The
amendment made by this section shall take effect on the date of the
enactment of this Act and shall apply to any loan made pursuant to
section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) on or
after such date. Nothing in this Act, the CARES Act (Public Law 116-
136), or the Paycheck Protection Program and Health Care Enhancement Act
(Public Law 116-139) shall be construed to prohibit lenders and
borrowers from mutually agreeing to modify the maturity terms of a
covered loan described in subparagraph (K) of such section to conform
with requirements of this section.
SEC. 3. <<NOTE: Time periods.>> AMENDMENTS TO PAYCHECK PROTECTION
PROGRAM LOAN FORGIVENESS.
(a) Extension of Covered Period.--Section 7(a)(36)(A)(iii) of the
Small Business Act (15 U.S.C. 636(a)(36)(A)(iii)) is amended by striking
``June 30, 2020'' and inserting ``December 31, 2020''.
(b) Forgiveness.--Section 1106 of the CARES Act (Public Law 116-136)
is <<NOTE: Ante, p. 297.>> amended--
(1) in subsection (a), by striking paragraph (3) and
inserting the following:
``(3) <<NOTE: Definition.>> the term `covered period'
means, subject to subsection (l), the period beginning on the
date of the origination of a covered loan and ending the earlier
of--
``(A) the date that is 24 weeks after such date of
origination; or
``(B) December 31, 2020;'';
(2) in subsection (d)--
[[Page 134 STAT. 642]]
(A) in paragraph (5)(B), by striking ``June 30,
2020'' each place it appears and inserting ``December
31, 2020''; and
(B) by adding at the end the following new
paragraphs:
``(7) <<NOTE: Determination.>> Exemption based on employee
availability.--During the period beginning on February 15, 2020,
and ending on December 31, 2020, the amount of loan forgiveness
under this section shall be determined without regard to a
proportional reduction in the number of full-time equivalent
employees if an eligible recipient, in good faith--
``(A) is able to document--
``(i) an inability to rehire individuals who
were employees of the eligible recipient on
February 15, 2020; and
``(ii) an inability to hire similarly
qualified employees for unfilled positions on or
before December 31, 2020; or
``(B) is able to document an inability to return to
the same level of business activity as such business was
operating at before February 15, 2020, due to compliance
with requirements established or guidance issued by the
Secretary of Health and Human Services, the Director of
the Centers for Disease Control and Prevention, or the
Occupational Safety and Health Administration during the
period beginning on March 1, 2020, and ending December
31, 2020, related to the maintenance of standards for
sanitation, social distancing, or any other worker or
customer safety requirement related to COVID-19.
``(8) Limitation on forgiveness.--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.''; and
(3) by adding at the end the following new subsection:
``(l) Application to Certain Eligible Recipients.--An eligible
recipient that received a covered loan before the date of enactment of
this subsection may elect for the covered period applicable to such
covered loan to end on the date that is 8 weeks after the date of the
origination of such covered loan.''.
(c) Extension of Deferral Period.--Section 7(a)(36)(M) of the Small
Business Act (15 U.S.C. 636(a)(36)(M)) is amended--
(1) in clause (ii)(II), by striking ``for a period of not
less than 6 months, including payment of principal, interest,
and fees, and not more than 1 year.'' and inserting the
following: ``, including payment of principal, interest, and
fees, until the date on which the amount of forgiveness
determined under section 1106 of the CARES Act is remitted to
the lender.'';
(2) in clause (iii), by striking ``for a period of not less
than 6 months, including payment of principal, interest, and
fees, and not more than 1 year.'' and inserting the following:
``, including payment of principal, interest, and fees, until
the date on which the amount of forgiveness determined under
section 1106 of the CARES Act is remitted to the lender.''; and
[[Page 134 STAT. 643]]
(3) by adding at the end the following new clause:
``(v) <<NOTE: Deadline. Effective date.>>
Rule of construction.--If an eligible recipient
fails to apply for forgiveness of a covered loan
within 10 months after the last day of the covered
period defined in section 1106(a) of the CARES
Act, such eligible recipient shall make payments
of principal, interest, and fees on such covered
loan beginning on the day that is not earlier than
the date that is 10 months after the last day of
such covered period.''.
(d) <<NOTE: 15 USC 636 note.>> Effective Date; Applicability.--The
amendments made by this section shall be effective as if included in the
CARES Act (Public Law 116-136) and shall apply to any loan made pursuant
to section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) or
section 1109 of the CARES Act.
SEC. 4. DELAY OF PAYMENT OF EMPLOYER PAYROLL TAXES.
(a) In General.--Section 2302(a) of the CARES Act (Public Law 116-
136) is <<NOTE: Ante, p. 351.>> amended by striking paragraph (3).
(b) <<NOTE: 26 USC 3111 note.>> Effective Date; Applicability.--The
amendments made by this section shall be effective as if included in the
CARES Act (Public Law 116-136) and shall apply to any loan made pursuant
to section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) or
section 1109 of the CARES Act.
SEC. 5. EMERGENCY DESIGNATION.
(a) In General.--This Act is designated as an emergency requirement
pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 (2
U.S.C. 933(g)).
(b) Designation in Senate.--In the Senate, this Act is designated as
an emergency requirement pursuant to section 4112(a) of H. Con. Res. 71
(115th Congress), the concurrent resolution on the budget for fiscal
year 2018.
Approved June 5, 2020.
LEGISLATIVE HISTORY--H.R. 7010:
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CONGRESSIONAL RECORD, Vol. 166 (2020):
May 28, considered and passed House.
June 3, considered and passed Senate.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2020):
June 5, Presidential statement.
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