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United States: President Signs Paycheck Protection Program and Health Care Enhancement Act

(Apr. 24, 2020) On April 24, 2020, President Donald Trump signed into law H.R. 266, alternatively referred to as the Paycheck Protection Program and Health Care Enhancement Act. This act provides $310 billion in supplemental appropriations to a Small Business Administration (SBA) loan program created through the CARES Act and earmarks $50 billion to bolster the SBA’s disaster loans program. Disaster loan recipients are also eligible for $10 billion in grants. The act additionally allocates funding to the Department of Health and Human Services to respond to the coronavirus, including $75 billion for related healthcare expenses and $25 billion to develop and deploy medical testing, with $11 billion directed to state and local governments and employers.

The CARES Act, enacted on March 27, 2020, originally allotted $349 billion for the SBA’s paycheck protection program, but that funding was depleted in mid-April. According to the SBA’s website, the loan program’s purpose is to incentivize employers to keep workers on their payroll. The website states that “SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.”

This is the fourth piece of emergency legislation enacted by the federal government in response to the coronavirus since early March. Among other relief, the other acts provided emergency funding to federal agencies, required certain employers to give paid sick leave to employees affected by the coronavirus, and dispensed stimulus checks to individuals and families below certain income thresholds.