The U.S. House of Representatives overwhelmingly passed the AGC-backed Paycheck Protection Program Flexibility Act (H.R. 7010), which would make substantial improvements to the Paycheck Protection Program (PPP). Now, the Senate must take action and pass this important legislation to save construction jobs.
The PPP has proven to be a popular and significant relief measure for construction firms during the COVID-19 pandemic. However, the Associated General Contractors of America has identified a number of problems with the program, and this bill addresses several of those concerns by providing greater flexibility to PPP loan recipients for both loan forgiveness and repayment, as well as allowing PPP loan recipients to defer payroll taxes through the end of 2020.
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Without these changes, the recent, confusing guidance from the Trump Administration and inflexible rules written by Congress threaten the ability of construction businesses to access, hold onto and use Paycheck Protection Program (PPP) loans to protect construction jobs.
Specifically, H.R. 7010 would improve the PPP by:
- Extending the amount of time that loan recipients can spend PPP funds, and qualify for loan forgiveness, from eight to 24 weeks;
- Revise the uses of loan funds eligible for forgiveness from 75 percent in payroll costs/25 percent in non-payroll costs to 60 percent/40 percent, respectively;
- Create a safe harbor for employers that made a good faith effort to hire or re-hire qualified employees;
- Extend the maturity of PPP loans from two to five years; and
- Allow PPP loan recipients to defer payroll taxes through the end of 2020.
Collectively, these legislative changes will go a long way to address several of the concerns that AGC has raised about PPP as it currently exists, improve the program, save construction jobs, and provide greater relief for the many construction firms struggling to survive the COVID-19 pandemic.
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