House Democrats have released a $3 trillion legislative package, which would be Congress’ fifth coronavirus response package. The 1,815-page bill, which was introduced yesterday as H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, would provide states and local governments with nearly $1 trillion that could be used to replace drastic revenue shortfalls. House leadership has said they plan to vote on the legislation as soon as this coming Friday, May 15.

PIA National is continuing to review the provisions in H.R. 6800. Even if it does not become law, many of its provisions could be included in a future bill more likely to become law. While not exhaustive, below are several items of note in the proposed legislation:

Changes to Paycheck Protection Program

The proposed legislation includes several amendments to the Paycheck Protection Program (PPP), which was created by the CARES Act. Perhaps the biggest change is that the period in which to apply for a PPP loan would be extended from June 30 to December 31, offering eligible businesses more time to learn about their financing options and make an informed decision about how, where, when, and whether to apply for a PPP loan.

Another noteworthy provision would expand the PPP to nonprofit organizations of any kind, including 501(c)(6) nonprofits. There had previously been a limit on the type and size of nonprofit entity eligible for loans under the PPP program.

The bill would also prevent the Small Business Administration (SBA), which runs the PPP, from limiting the percentage of the loan that can be spent on non-payroll costs, such as rent or mortgage payments, to remain eligible for loan forgiveness. Under the program’s current rules, businesses must use at least 75 percent of the forgivable amount of the loans on payroll expenses, which many businessowners have said unnecessarily limits the efficacy of the program as they struggle to pay rent or other overhead expenses.

The proposed legislation would give borrowers 24 weeks to spend the loan funds, rather than the current eight; it carves out 25 percent of the remaining PPP funds for businesses with 10 or fewer employees; and it includes $10 billion more for the Economic Injury Disaster Loan grants, which are also housed within the SBA. It does not provide further funding for the PPP itself.

Cannabis Safe Harbor for Agents and Carriers

H.R. 6800 also includes key aspects of the PIA-supported SAFE Banking Act, which prevents federal criminal prosecution of insurance agents and carriers for insuring cannabis-related businesses in states where cannabis is legal in some form. PIA views its position as respectful of state insurance laws and protective of independent agents who are at risk of criminal penalty for activity that, while legal at the state or local level, could be seen as a violation of federal law.

The SAFE Banking Act already passed the House of Representatives but stalled in the Senate.  PIA National has been engaged in advocating for a cannabis safe harbor for our members throughout this Congress, and we are pleased to see this language in the bill.

Outlook for H.R. 6800

Several GOP Senators have said that H.R. 6800 is dead on arrival in the Senate, and they’d prefer to put off considering additional coronavirus legislation until they see the impact of the last coronavirus relief bill, which, among other things, provided additional funding for the PPP. Senate leadership is also working on their own proposals, and staff has said they’d prefer another legislative push sometime later this spring or summer.