While COVID-19 has stopped a lot of legislative efforts, it has also brought in new issues, many of them being fast tracked to help deal with the current issues. Here’s a brief legislative update:
CARES Act and PPP: While many documents have been put out on this, and endless webinars have been done around the forgiveness of the PPP loans, the latest from the Small Business Administration (SBA) was released on May 28, in form of the “Paycheck Protection Program Interim Final Rule – Requirements – Loan Forgiveness”. That document can be found here.
But, before we go into great detail on this, Congress is looking at modifying those requirements, primarily to provide borrowers with more flexibility. H.R.7010, the Paycheck Protection Program Flexibility Act of 2020 passed the House on a 371-1 vote this week. It now moves to the Senate, where it should have broad support, but may get some amendments. A companion bill, S.3805, has also been introduced in the Senate.
Key aspects of H.R.7010 are as follows:
- Allow loan forgiveness for expenses beyond the eight-week period.
- Allows recipients who received their loans during the original eight weeks the option to extend the forgiveness period to 24 weeks.
- Expands the loan terms to 5 years.
- Eliminates the limits on non-payroll expenses.
- Provides a forgiveness safe harbor for borrowers that can demonstrate they were unable to rehire employees.
We will keep you up to date on the progress of this legislation and required actions needed, and any other changes to PPP.
California Senate Bill 939, Emergencies: COVID-19: commercial tenancies: evictions. This legislation would put limits on evictions from commercial properties during the COVID-19 pandemic state of emergency in California and could force lease renegotiations because of new restrictions imposed by the state. AAFD did write a letter in support of this bill. This legislation passed the Senate Judiciary Committee last week and moves forward. There is a lot of action on this bill, as landlords try to protect their interests. This bill faces an uphill battle, as with emergency legislation, it must pass floor votes by a 2/3 majority. We will keep our California franchisees informed as needed for them to take action.
Town Hall Calls: We hope many of you were able to enjoy the two Town Hall calls featuring special guests. The first, on April 17, featured Senator Catherine Cortez Masto (NV) who has become an advocate for franchisees. The recording of that call can be found here, the Senator joins the call at 35:05. The second, on May 15, featured Federal Trade Commission Commissioner Rohit Chopra. Commissioner Chopra has taken a great interest into the franchise industry to protect prospective and current franchisees. The recording of that call can be found here, with the Commissioner joining the call at 12:45. We look forward to future AAFD Town Hall calls with featured guests as appropriate. Our May 29 Town Hall included an update regarding the business client in the pandemic impacted commercial world, and we heard from special guest, Mike Wales, from the AAFD’s new supplier member, Paychex, who expounded on loan forgiveness applications under the Federal Paycheck Protection Program. The recording is linked here.
The AAFD’s next scheduled Town Hall is next Friday, June 12, 2020 regarding “The Joint Employer Conundrum” which will be jointly presented by AAFD Chairman, Bob Purvin, and AAFD Director of Public Affairs, Keith Miller. To register click here.