House to Vote on Legislation Easing PPP Rules

The House of Representatives plans to vote next week on stand-alone legislation that would ease the rules for businesses taking advantage of the Paycheck Protection Program. 

While still encouraging the Senate to take up the massive $3 trillion HEROES Act passed by the House last week, House Speaker Nancy Pelosi (D-CA) at her weekly press conference indicated that the House next week will consider the bipartisan Paycheck Protection Flexibility Act (H.R. 6886). 

That legislation, introduced by Reps. Dean Phillips (D-MN) and Chip Roy (R-TX), would modify certain PPP provisions under the CARES Act by:

 

Rep. Roy notes that the purpose of PPP and the payroll tax deferment was to provide businesses with capital to weather the crisis, and that “receiving both should not be considered double-dipping.”  

 

“Unfortunately, for many of these business owners, particularly local restaurants, hotels, and those in the hospitality industry, the terms are too inflexible to provide the help they need to weather the economic storm,” Roy stated in announcing his legislation. “PPP cannot protect jobs if workers have no job to return to after state and local lockdowns are lifted.”

 

It was not immediately clear, however, whether this bill would reverse the IRS’ recent interpretation denying deductions for otherwise deductible expenses under the loan forgiveness of the PPP. 

This move by the House to consider the bill would appear to alleviate a current standoff with the Senate over the fate of the $3 trillion stimulus bill that Senate leaders called “dead on arrival” and allow crucial modifications to alleviate some of the existing limitations under the PPP to move forward. 

 

It also comes after Rep. Phillips was able to secure a commitment by Speaker Pelosi to consider the legislation he cosponsored with Rep. Roy in exchange for supporting the HEROES Act. Phillips noted that, while he has “registered deep reservations about the process by which we reached this point, I am pleased to have secured from Congressional leadership a commitment for a vote on H.R. 6886.”

 

While not certain, it’s possible the Senate may consider similar legislation that Sen. Marco Rubio (R-FL), chair of the Senate Small Business and Entrepreneurship Committee, reportedly is drafting.