This week the Senate and House passed the Paycheck Protection Program and Health Care Enhancement Act (“PPP Enhancement Act”). The PPP Enhancement Act, once signed by the President, provides additional funding for the Paycheck Protection Program originally implemented by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to assist businesses affected by the COVID‑19 pandemic. The PPP Enhancement Act also increases funding for Disaster Loans and Grants, and appropriates funds for hospitals, states and localities to increase COVID‑19 testing capacity.
Below is a summary of the PPP Enhancement Act and its related appropriations.
DIVISION A – SMALL BUSINESS PROGRAMS
The PPP Enhancement Act increases funding for several federal programs created by the CARES Act and amends existing programs that could assist businesses impacted by the COVID‑19 pandemic with their day-to-day operating expenses.
Increased Paycheck Protection Program Funds. The PPP Enhancement Act amends the CARES Act to increase funding for Paycheck Protection Loans from $349 billion to $659 billion. Additionally, the PPP Enhancement Act increases funding for Emergency Economic Injury Disaster Loan (EIDL) Grants under the CARES Act from $10 billion to $20 billion.
Agricultural Businesses. The PPP Enhancement Act adds agricultural enterprises with fewer than 500 employees to the definition of entities eligible for EIDL grants.
Banks and Credit Unions. A portion of the new funds provided by the PPP Enhancement Act is reserved for small lenders. The PPP Enhancement Act reserves $30 billion for loans made by community financial institutions, banks and credit unions with consolidated assets less than $10 billion. According to the PPP Enhancement Act, a “community financial institution” is a community development financial institution, a minority depository institution, a development company certified under the Small Business Investment Act, or an intermediary. An additional $30 billion in funding is reserved for loans made by banks and credit unions with consolidated assets between $10 billion and $50 billion.
DIVISION B – ADDITIONAL EMERGENCY APPROPRIATIONS FOR CORONAVIRUS RESPONSE
TITLE I – DEPARTMENT OF HEALTH AND HUMAN SERVICES
Public Health and Social Services Emergency Fund. Under the PPP Enhancement Act, $75 billion will be appropriated to the Public Health and Social Services Emergency fund for coronavirus response and for necessary expenses to reimburse eligible health care providers for health care expenses or lost revenues attributable to coronavirus. However, these funds cannot be used to reimburse providers for losses already reimbursed, and those providers reimbursed must submit reports and keep documentation subject to inspection by the Department of Health and Human Services. Funds under this provision may be used to build temporary structures, retrofit facilities, provide workforce training, and purchase personal protective equipment and testing supplies, among other uses.
Unlike the appropriations that were made available under the CARES Act Provider Relief Fund, to be eligible to receive funds under this Title I of the PPP Enhancement Act, health care providers must submit an application to the Secretary of the Department of Health and Human Services that includes an explanation for why the provider needs payment.
Increased Funding for Testing. The PPP Enhancement Act provides an additional $25 billion to increase health care providers’ testing capacities. Of the $25 billion, $11 billion is specifically reserved for state and local governments to increase testing for active infection, prior exposure and contact tracing capabilities. The PPP Enhancement Act specifies a formula for how states, localities and tribes will divide the funds. Within 30 days of passage of the PPP Enhancement Act, states and localities receiving funds must submit a plan for COVID‑19 testing, including number of tests required, monthly estimates of testing capacity and a description of how state and local resources will be used. Funds appropriated under this section may be used to fund grants to rent, construct or renovate facilities to improve state and local capacity for COVID‑19 testing.
Funds not allocated to states and localities are appropriated as follows:
Increased CDC Funding. The Centers for Disease control and Prevention will receive $1 billion to assist with COVID‑19 surveillance and contact tracing.
Increased NIH Funding. The National Institute of Health will receive funding for several of its divisions, including:
- $306 million to the National Cancer Institute.
- $500 million to the National Institute of Biomedical Imaging and Bioengineering.
- $1 billion to the Office of the Director.
BARDA Funding. The Biomedical Advanced Research and Development Authority will receive $1 billion to research and develop COVID‑19-related testing or supplies.
FDA Funding. The Food and Drug Administration will receive $22 million to pay for additional salaries to support COVID‑19 testing research.
Federally Qualified Healthcare Center Grants. The Health Resources and Services Administration will receive $600 million to provide grants under the Health Centers program and to provide grants to federally qualified health centers. $225 million is set aside for rural health clinics (as defined in the Social Security Act) to provide grants for COVID‑19 testing and other expenses.
Related Agencies and Additional FDA Funding. The Food and Drug Administration will receive an additional $80 million, until expended, to develop necessary medical countermeasures and vaccines. In addition, monies will be used to advance manufacturing for medical products and monitor the supply chain of medical products.
Testing the Uninsured. Up to $1 billion is reserved to cover the cost of COVID‑19 testing for the uninsured.
TITLE II – INDEPENDENT AGENCIES
The PPP Enhancement Act appropriates funds to several independent agencies as follows:
Small Business Administration (SBA). The PPP Enhancement Act provides an additional $2.1 billion to pay SBA salaries and expenses.
Disaster Loans Program. The Disaster Loans Program Account will receive $50 billion to cover the cost of direct loans authorized by Section 7(b) of the SBA. The funds will remain available until expended to prevent, prepare for and respond to COVID‑19.
Emergency EIDL Grants. Emergency EIDL Grants will receive an additional $10 billion to cover the cost of EIDL grants authorized under the CARES Act. Such funds will remain available until expended to prevent, prepare for and respond to COVID‑19.
TITLE III - GENERAL PROVISIONS
The PPP Enhancement Act specifies the following key general provisions:
- No funds under the PPP Enhancement Act are available beyond the current fiscal year, unless otherwise noted.
- Funds appropriated by the PPP Enhancement Act are only to be used to respond to coronavirus and prevent future outbreaks.