134 Stat. 641 (Pub. L. 116-142, Paycheck Protection Program Flexibility Act of 2020)
Summary
Public Law 116–142, the Paycheck Protection Program Flexibility Act of 2020, an Act of the 116th Congress approved June 5, 2020 (H.R. 7010) and printed beginning at 134 STAT. 641. It amends the Small Business Act to set a minimum maturity of 5 years for loans with a remaining balance after forgiveness, and replaces June 30, 2020 with December 31, 2020 in the covered period provisions. It amends section 1106 of the CARES Act so that the covered period ends the earlier of 24 weeks after origination or December 31, 2020. It adds a rule that an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs to receive loan forgiveness. The legislative history records passage in the House on May 28 and in the Senate on June 3.
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“134 Stat. 641 (Pub. L. 116-142, Paycheck Protection Program Flexibility Act of 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/134-stat-641-pub-l-116-142-paycheck-protection-program-flexibility-act-5f354ff709/
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PUBLIC LAW 116–142—JUNE 5, 2020 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 June 5, 2020
allow recipients of loan forgiveness under the paycheck protection program to [H.R. 7010]
defer payroll taxes, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, Paycheck
Protection
SECTION 1. SHORT TITLE. Program
Flexibility Act
This Act may be cited as the ‘‘Paycheck Protection Program of 2020.
Flexibility Act of 2020’’. 15 USC 631 note.
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 matu-
rity of 5 years and a’’ before ‘‘maximum maturity’’.
(b) EFFECTIVE DATE; APPLICABILITY.—The amendment made 15 USC 636 note.
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 pro-
hibit 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. AMENDMENTS TO PAYCHECK PROTECTION PROGRAM LOAN Time periods.
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 amended— Ante, p. 297.
(1) in subsection (a), by striking paragraph (3) and inserting
the following:
‘‘(3) the term ‘covered period’ means, subject to subsection Definition.
(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 origi-
nation; or
whamilton on LAP1Z6H6L3PROD with STATUTES
‘‘(B) December 31, 2020;’’;
(2) in subsection (d)—
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134 STAT. 642 PUBLIC LAW 116–142—JUNE 5, 2020
(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:
Determination. ‘‘(7) 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 oper-
ating at before February 15, 2020, due to compliance with
requirements established or guidance issued by the Sec-
retary of Health and Human Services, the Director of the
Centers for Disease Control and Prevention, or the Occupa-
tional Safety and Health Administration during the period
beginning on March 1, 2020, and ending December 31,
2020, related to the maintenance of standards for sanita-
tion, social distancing, or any other worker or customer
safety requirement related to COVID–19.
‘‘(8) LIMITATION ON FORGIVENESS.—To receive loan forgive-
ness 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
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section 1106 of the CARES Act is remitted to the lender.’’;
and
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PUBLIC LAW 116–142—JUNE 5, 2020 134 STAT. 643
(3) by adding at the end the following new clause:
‘‘(v) RULE OF CONSTRUCTION.—If an eligible Deadline.
recipient fails to apply for forgiveness of a covered Effective date.
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 prin-
cipal, 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) EFFECTIVE DATE; APPLICABILITY.—The amendments made 15 USC 636 note.
by this section shall be effective as if included in the CARES
Act (Public Law 116–136) and shall apply to any loan made pursu-
ant 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 amended by striking paragraph (3). Ante, p. 351.
(b) EFFECTIVE DATE; APPLICABILITY.—The amendments made 26 USC 3111
by this section shall be effective as if included in the CARES note.
Act (Public Law 116–136) and shall apply to any loan made pursu-
ant 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 des-
ignated 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:
CONGRESSIONAL RECORD, Vol. 166 (2020):
May 28, considered and passed House.
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June 3, considered and passed Senate.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2020):
June 5, Presidential statement.
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