Late last night, bipartisan Congressional leadership agreed to a roughly 900 billion-dollar COVID relief package. The COVID relief package is expected to be added to the government funding omnibus legislation and voted on as early as today to stave off a federal government shutdown. Although legislative text has not been released yet, we wanted to provide you with information as soon as possible about what is expected to be in the legislation. Below we have listed some of the most consequential legislative victories for Big “I” members and their clients — mainly pertaining to the Paycheck Protection Program (PPP). The Big “I” Government Affairs Team was extremely active throughout these negotiations and strongly advocated through letters, phone calls and zoom meetings to have many of the below issues included in the COVID relief legislation.
• The proposal would include roughly $325 billion in small business relief, including $284 billion for the PPP.
• This PPP funding includes money to allow the hardest-hit small businesses to receive a second forgivable PPP loan. PPP eligibility for a second loan would likely be limited to small businesses that have sustained a revenue loss of 25%-30% in any quarter of 2020.
• 501(c)(6) organizations such as local chambers of commerce, economic development organizations, and tourism offices, would become eligible for PPP loans. It is important to note that this provision is currently expected to have vague restrictions regarding “lobbying organizations” and its definition will be a critical factor in determining if state associations are eligible for PPP loans.
• The legislation makes clear that business expenses paid for with the proceeds of PPP loans, even when forgiven, are tax deductible, consistent with Congressional intent in the original CARES Act.
• The PPP loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less.
• The legislation includes a provision to increase the business meals deduction to 100% (it’s currently 50%) for 2021 and 2022.
In addition to the above issues that directly affect Big “I” members and their clients, the legislation also included a number of other important provisions. The package includes direct checks to individuals of $600 and a weekly unemployment boost of $300 for ten weeks. The deal would also include large sums of funding for vaccine development and distribution, education, transportation and health care among other things. Of note, the legislation did not include liability protections or money for state and local aid as lawmakers were unable to find a compromise on those two issues.
It is important to reiterate that legislative text has not yet been released and the above information is based on reports/unofficial summaries from the Hill. We will provide additional information as details continue to emerge and please be sure to read today’s Markets Pulse.
Information courtesy of Big I.