SAN LUIS VALLEY — Last Friday, Senator Hickenlooper, along with U.S. Senators Roger Marshall (R-KS) and Joni Ernst (R-IA), introduced legislation that would get more PPP money into the hands of farmers and ranchers at a time when assistance is greatly needed. Essentially, the purpose of the legislation is to ensure farmers and ranchers categorized as partnerships or LLCs – the very small businesses COVID relief is designed to assist – are able to use gross income when applying for Paycheck Protection Program (PPP) funds. Without this straightforward and vital fix, a number of farmers and ranchers are prevented from having full access to the funding the PPP program was created to provide.
As Hickenlooper describes it, “Family farmers and ranchers have had limited ability to access the Paycheck Protection Program because of a legislative technicality.”
That “legislative technicality” is related to PPP as it was administered prior to Hickenlooper being sworn into office. Before last December, PPP loan payments to farmers were based on their net income, a number that is often low or negative due to the amount of depreciation farmers claim on equipment.
Then, in December, Congress addressed the problem and made the much-needed change, allowing farmers to use gross income in calculating their PPP loan amount – a change that has been of significant benefit to the agriculture industry.
However, certain farm and ranch partnerships were left out of those improvements in December, essentially preventing them from accessing more generous loan amounts now enjoyed by others in their same industry.
Although Congress intended to include partnerships in the December changes, the SBA’s interpretation of the recent statute is preventing that from happening. In fact, SBA has made it clear that, short of legislation specifically adding partnerships, the agency will not include that category of operation in the changes mandated by Congress in December.
The Marshall-Hickenlooper-Ernst bill calls for this crucial fix to be passed, finally allowing those farmers categorized as a partnership (which includes LLPs, S-Corps and others) to utilize gross income and access critical assistance that is being held up by nothing more than SBA’s interpretation.
Companion legislation was introduced in the House of Representatives by Congressman Jim Hagedorn (R-MINN.)