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S. 3805Senate116th Congress (2019-2021)In Committee

Paycheck Protection Program Flexibility Act of 2020

Sponsored by Angus S. King Jr.Sen. Angus S. King Jr. (I-ME)
Introduced May 21, 2020

AI-Generated Summary

Updated April 14, 2026 at 12:34 PM UTC

The Paycheck Protection Program Flexibility Act of 2020 updates PPP rules to give small businesses more leeway in loan forgiveness and repayment. It extends the period during which payroll costs count toward forgiveness, lets borrowers defer payroll taxes, and changes loan maturity requirements. The changes apply to any PPP loan made under the Small Business Act or the CARES Act.

Key Provisions

  • Extend the PPP covered period for forgiveness from June 30, 2020 to December 31, 2020, and allow an additional 8‑week extension for loans made before the law’s enactment.
  • Set a minimum loan maturity of five years before the maximum maturity can apply.
  • Allow forgiveness to be calculated without reducing employee counts if the business cannot rehire or return to pre‑COVID activity levels.
  • Permit borrowers to defer employer payroll tax payments on forgiven loan amounts.
  • Prohibit the administrator from limiting the non‑payroll portion of a forgivable loan.

Legislative Activity

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1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

May 21, 2020

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SenateIntro Referral

Introduced in Senate

May 21, 2020

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

May 21, 2020

Bill Text

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Introduced in SenateIssued May 21, 2020

II

116th CONGRESS

2d Session

S. 3805

IN THE SENATE OF THE UNITED STATES

May 21, 2020

Mr. King (for himself, Mr. Daines, Mr. Kaine, Mr. Tillis, Ms. Stabenow, and Mr. Gardner) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

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.

1.

Short title

This Act may be cited as the Paycheck Protection Program Flexibility Act of 2020.

2.

Maturity for loans with remaining balance after application of forgiveness

Section 7(a)(36)(K)(ii) of the Small Business Act (15 U.S.C. 636(a)(36)(K)(ii)) is amended by inserting minimum maturity of 5 years and a before maximum maturity.

3.

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 amended—

(1)

in subsection (a), by striking paragraph (3) and inserting the following:

(3)

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)—

(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:

(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 reduction in the number of full-time equivalent employees if an eligible recipient—

(A)

is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;

(B)

is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or

(C)

is able to demonstrate an inability to return to the same level of business activity as the eligible recipient was operating at before February 15, 2020.

(8)

No limitations

In carrying out this section, the Administrator may not limit the non-payroll portion of a forgivable covered loan amount;

; 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.

.

4.

Delay of payment of employer payroll taxes

Section 2302(a) of the CARES Act (Public Law 116–136) is amended by striking paragraph (3).

5.

Effective date; applicability

The amendments made by this Act 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 (Public Law 116–136).