By Andrew Kragie

Law360 (May 15, 2020, 6:11 PM EDT) -- A bipartisan group of five senators has introduced a bill that would allow 16 weeks for recipients of forgivable small-business loans to rehire their workers and use the money for payroll and certain other expenses, doubling the current covered period of eight weeks.

The Paycheck Protection Program Deadline Extension Adjustment for Loans Act, or PPP Deal Act, would give more flexibility to employers who receive forgivable loans backed by the Small Business Administration. Under the CARES Act pandemic relief bill, business owners don't have to pay back PPP money used for eight weeks of payroll and certain other expenses, like rent. This bill would double that covered period to 16 weeks.

The proposal would also give employers 16 weeks after receiving the funds to rehire workers and remain eligible for loan forgiveness. Under current law, all workers must be rehired by June 30, regardless of when employers receive their loan.

The bill was introduced Wednesday by Sen. Joe Manchin, a moderate West Virginia Democrat who brought along a bipartisan quartet of cosponsors: Mitt Romney of Utah, the GOP's 2012 presidential nominee and a Small Business Committee member; Ron Wyden of Oregon, the top Democrat on the Finance Committee; Cory Gardner of Colorado, a Republican facing a tough reelection race this fall; and Patrick Leahy of Vermont, the top Democrat on the Appropriations Committee.

"While the PPP loans have been a useful resource for many small businesses, there is no way many of these small businesses can use this funding in eight weeks and rehire everyone by June 30," Manchin said in a statement Wednesday. "These arbitrary deadlines are causing stress for our mom-and-pop shops that aren't able to get their businesses back in full swing due to the different state reopening dates across the country."

The measure was referred to the Small Business Committee. The office of Chairman Marco Rubio, R-Fla., didn't immediately respond to a question Friday about his position on the measure. Regardless of committee consideration, some version of the proposal could make it into the next virus relief package, which is likely weeks away.

A Gibson Dunn & Crutcher LLP attorney who has advised clients about the loan program said the changes would help small businesses stay open or reopen and keep or rehire workers.

"As businesses reopen, doubling the amount of time available for loan forgiveness will alleviate stress for small businesses and will be a win for both owners and employees as it allows businesses the flexibility to rehire their employees and keep the loan forgiveness intact," Roscoe Jones Jr., a former Democratic congressional staffer, told Law360 in an email Friday.

It's impossible to handicap the proposal's odds of becoming law.

"Any standalone bill not in a larger coronavirus-related package will have difficulty getting over the finish line at this time," Jones said. But with bipartisan backing from influential senators, the provision could make it into a final deal that could be weeks away. House Democrats formalized their opening offer for bipartisan negotiations late Friday when they narrowly passed the $3 trillion Heroes Act.

There may be broad interest in modifying the Paycheck Protection Program to make it more flexible for employers. Earlier this month, a similar plan came from two other bipartisan senators: Michael Bennet of Colorado, a former Democratic presidential contender, and Sen. Todd Young of Indiana, who chairs the Republicans' campaign committee. They would also extend the covered period to 16 weeks, but only for businesses that are not publicly traded, have fewer than 500 employees and saw revenue drop by at least a quarter.

--Editing by Haylee Pearl.

Update: This article has been updated with Jones' comments.

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