Paycheck Protection Program Flexibility Act of 2020

Floor Speech

BREAK IN TRANSCRIPT

Mr. McCONNELL. 7010, which was received from the House.

BREAK IN TRANSCRIPT

Mr. McCONNELL. Mr. President, I appreciate the good faith efforts of Senator Johnson to make sure the terms of the program and its legislative intent are properly understood. In addition, I commend his leadership in looking at the program overall, and making suggestions about reforms should Congress determine that additional money is needed in the future for the program. The program was designed intentionally to get money into the hands of small businesses quickly as government took the extraordinary and unprecedented step of shutting down the economy because of the pandemic. However, should we need to replenish the fund, he is absolutely correct that we should ensure that money flows to small businesses and enterprises that truly need it. I look forward to working with him and our colleagues on reforms to the program should Congress make the decision to extend it.

7010

We, the undersigned Members of Congress, would like to clarify the congressional intent for H.R. 7010, the Paycheck Protection Program Flexibility Act of 2020. The Paycheck Protection Program (PPP) was authorized by Congress under the CARES Act as a short-term solution to help businesses make ends meet and continue to pay their employees during the initial shocks of the COVID-19 pandemic. Under the CARES Act, authorized funds for the program are set to expire on June 30, 2020, allowing for no new loans to be issued after this date.

H.R. 7010 amends the CARES Act to provide businesses with greater flexibility for their use of PPP loans. Section 3(a) of H.R. 7010 changes the definition of the ``covered period'' defined by section 1102(a) of the CARES Act to be from February 15, 2020 to December 31, 2020 instead of from February 15, 2020 to June 30, 2020, as under current law. We wish to clarify the congressional intent of this extension of the covered period to December 31, 2020, and our expectations about how the amended program will operate.

The CARES Act requires that PPP loans may only be spent on allowable uses during the covered period. In addition to the uses otherwise allowed by section 7(a) of the Small Business Act, the CARES Act authorizes as allowable uses ``payroll costs; costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; employee salaries, commissions, or similar compensations; payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation); rent (including rent under a lease agreement); utilities; and interest on any other debt obligations that were incurred before the covered period.'' The intention of the extension of the covered period in H.R. 7010 is to allow borrowers who received PPP loans before June 30, 2020 to continue to make expenditures for allowable uses until December 31, 2020. The extension of the covered period does not authorize the Small Business Administration (SBA) to issue any new PPP loans after June 30, 2020, as this date remains fixed by section 1102(b) of the CARES Act.

The extension of the covered period defined in section 1102(a) of the CARES Act should not be construed so as to permit the SBA to continue accepting applications for loans after June 30, 2020. Our intent and understanding of the law is that, consistent with the CARES Act as amended by H.R. 7010, when the authorization of funds to guarantee new PPP loans expires on June 30, 2020, the SBA and participating lenders will stop accepting and approving applications for PPP loans, regardless of whether the commitment level enacted by the Paycheck Protection Program and Health Care Enhancement Act has been reached. Mike Lee,

United States Senator. Marco Rubio,

United States Senator. Dean Phillips,

Member of Congress. Ron Johnson,

United States Senator. Benjamin L. Cardin,

United States Senator. Chip Roy,

Member of Congress.
BREAK IN TRANSCRIPT

Mr. McCONNELL. I know of no further debate on the bill.
BREAK IN TRANSCRIPT

Source