Paycheck Protection Program and Health Care Enhancement Act
By: Timothy Lynn
The Paycheck Protection Program and Health Care Enhancement Act (H.R. 266) passed the Senate on April 21, 2020, and is pending in the House. The following is subject to both passage in the House and signature by the President. A summary of the Act:
The amount appropriated for loans under the Paycheck Protection Program will be increased from $349 billion to $659 billion. The amount appropriated for the total costs of the program is increased from $349 billion to $670,335,000,000.
An additional $10 billion will be added to the appropriation for the EIDL grants (the up to $10,000 advance on 7(b) loan applications).
$50 billion is added to the appropriation for 7(b) Disaster Relief Loans. These loans are the ordinary statutory disaster relief loans made available in areas that are declared national disaster areas. The funds have already been depleted under ordinary appropriations.
The Act requires that $30 billion of the Paycheck Protection Program loans are dedicated to banks and credit unions with between $10 billion and $50 billion in assets.
Another $30 billion is set aside for Community Financial Institutions and banks and credit unions with less than $10 billion in assets. Community Financial Institutions include the following: community development financial institutions, minority depository institutions, development companies certified under Title V of the Small Business Investment Act of 1958, and intermediaries as defined in the Small Business Act.
Agricultural Enterprises that qualify under Section 18(b) of the Small Business Act that have no more than 500 employees are added as eligible borrowers under the Paycheck Protection Program.
Coronavirus Response Funding:
The Act appropriates $75 billion to reimburse health care providers for expenses or lost revenues attributable to coronavirus. Eligible providers include: public entities, Medicaid or Medicare enrolled providers, and other for-profit or not-for-profit as HHS designates that provide diagnoses, testing or care for persons with possible or actual cases of COVID-19. These grants are made on a rolling basis.
Permissible uses include building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased work force and trainings, emergency operation centers, retrofitting facilities, and surge capacity.
The Act appropriates $25 billion to COVID-19 test development and manufacture (both to test for active infection and prior infection), testing and tracing. Of these funds, at least $11 billion is designated for states and local governments.