COVID-19

Government Resources: Federal Level

   

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NPMA continues to monitor the situation in the US and Canada to provide updates on any legislation or regulations that could affect our industry. If you have any questions on federal activity, please contact Ashley Amidon, NPMA's VP of Public Policy.
 

United States

 

COVID Legislative Update: Senate Releases New Version of S. 178
Posted 9/8/20

 

The Senate Republicans have released a new version of S. 178, The Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act. The initial version was released in August (NPMA’s summary is here).

Significant back and forth has occurred between Democrats and Republicans since then; the initial S. 178 was only about $1 trillion and the Democrats are pushing for north of $3 trillion. The White House came out last week saying they would be open to a $1.5 trillion package, which was seen as a willingness to negotiate. The Senate GOP have now released a new version of S. 178 and are planning on voting this week. Passage is not certain as Senate Democrats are not in favor of a bill this small (and rejected it before text was even out.)

 

SENATE GOP BILL, REVISED S. 178

S. 178 Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act is an updated version of the S. 178 released last month, which was itself a truncated version of the longer Senate GOP bill (HEALS Act) released in July. This smaller package focuses on several areas that need immediate attention from the perspective of the Senate Republicans: USPS, PPP, limiting liability and extending unemployment. Updates are provided in red below from the initial S. 178 text.

 

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Individuals

Businesses

Workplace and Individual: Health, Safety and Paid Leave Changes

Miscellaneous Provisions of Interest

What’s Next?

 

Individuals

Unemployment insurance extension: the additional money provided to those receiving unemployment insurance (UI) would be both lowered and extended. Those on UI were receiving an additional $600 through July 31, 2020. S. 178 would extend UI additional payments through December 27, 2020 but with only a $300 per week addition instead of $600. The text appears to indicate this would be retroactive (i.e., if you were receiving UI from August 1 till whenever this passes, you would be owed that $300 per week.)

9.8 version: This provision remains unchanged.

NEW Charitable Giving: The bill would create a onetime $300 deduction for charitable giving that taxpayers can claim for 2020.

Businesses

501(c)(6) Orgs eligible for PPP: A 501(c)(6) organization employing 150 people or less would now be eligible for PPP loans. The organization would not be eligible if more than 10% of the activities of the organization are composed of lobbying. How the proportion of activities would be decided is not defined – would it be by hours worked or number of programs? More clarity will be needed on that aspect. In a change from the HEALS Act, there is not cap on the loan size for 501(c)(6) organizations, and it appears as though they would also be eligible for the second draw loans proposed below. Money is prohibited for use on any lobbying or grassroots activities.

9.8 version: This provision remains unchanged.

 

PPP & Lobbying: PPP money cannot be using for lobbying (local, state or federal) or any grassroots actions. So, for example if you have activities related to advocating for changes to laws and regulations, those expenses cannot be paid for using PPP money.

9.8 version: This provision remains unchanged. As a clarification, prohibited expenditures in both bills are defined as those “designed to influence the enactment of legislation, appropriations, regulation, administrative action, or Executive order proposed or pending before Congress or any State government, State legislature, or local legislature or legislative body.’’ This would impact state associations who do any outreach to elected officials.

Changes in PPP Eligible expenses: S. 178 would allow additional expenses to be considered “covered” (meaning they could be forgiven.) Those expenses would now include the following:

  • operations expenditures: payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.
  • property damage costs: costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.
  • supplier costs: expenditures made by an entity to a supplier of goods pursuant to a contract in effect before February 15, 2020 for the supply of goods that are essential to the operations of the entity at the time at which the expenditure is made.
  • worker protection expenditures: expenditures that are required to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by HHS, CDC or OSHA between 23 March 1, 2020 and December 31, 2020 related to the maintenance of standards for sanitation, social distancing, or any other work related to COVID.

9.8 version: This provision remains unchanged.

 

PPP Loan Forgiveness: the bill would make changes in how loan forgiveness will be handled based on the size of the loan.

  • Loans of $150,000 or less: the recipient must maintain all records for a year after the loan period, submit a form to the lender that a good faith effort was made to comply with all requirements, then the loan is forgiven. An audit can be done.

9.8 version: Records on employment must be maintained for 4 years, all other records for 3.

  • Loans between $150,000 and $2 million: must maintain all records for 3 years after the loan period, will complete a form related to borrower demographic information, and will submit a form for loan forgiveness to the lending institution who shall pass on to SBA. An audit or review can be done.

9.8 version: Records on employment must be maintained for 4 years, all other records for 3.

PPP Second Draw Loans: The HEALS Act laid out a plan for a company to take a second PPP loan under a new Second Draw program. Anyone eligible for a PPP loan who wants a second loan would need to show that the first or second quarter of 2020 shows at least a 35% reduction compared to the same quarter in 2019. The loan amount is created by multiplying the average total monthly payroll cost by 2.5, not to exceed $2 million. New entities and seasonal employers have their own formulas. The maximum amount of both the first and second loan can not exceed $10 million and loans must be at least 90 days apart. Loan forgiveness will work the same as outlined above.

The following business are not eligible:

  • One of the business types listed here (A, Non-profits are excluded and would be eligible)
  • Entities organized for research or for engaging in advocacy in areas such as public policy or political strategy, or otherwise describing itself as a think tank in any public document
  • Financial institutions
  • Any organization that has a member of the board of directors who is a resident of China.

9.8 version: This provision remains unchanged except for an additional prohibition on companies which are created/organized under the laws of China or Hong Kong and/or has “significant” operations in either location and/or owns or holds, directly or indirectly at least 20% stake in a business interest in either location.

Limiting liability: Similar to The HEALS Act, S. 178 would limit the liability that schools, businesses, health care institutions and practitioners would be liable for. It would be applicable from December 1, 2019 through October 1, 2024 and would only apply to COVID exposure or COVID related medical liability claim. Like the HEALS Act, this bill would not allow states to impose higher penalties or stricter standards and creates a one of year statute of limitations. In order to qualify for this liability safe harbor, an individual or business must make reasonable efforts to comply with applicable government standards and guidance (whether mandatory or not). For example, if the state or locality your business is located in mandates that masks must be worn by all employees and patrons, and you tell your employees not to wear masks or they will be fired and one of them catches COVID at work, you likely would not qualify for this safe harbor. Additional limitations are also provided on the liability health care provides can bear. This bill does delve more into the legal procedure used for juries in any trials occurring under this section, so in that way it does differ from the HEALS Act. This provision caps the damages to economic losses sustained as a result of the infection unless gross negligence is proven in which case punitive damages may then be awarded. The limitations on liability comprise over 60 pages of a 168-page bill, so clearly this continues to be a serious GOP priority.

9.8 version: This provision remains unchanged. It’s worth noting this will be a sticking point going forward. The GOP has this as a “must have” and the Democrats have generally held it as a non-starter.

 

Workplace and Individual: Health, Safety and Paid Leave Changes

Worker Notifications under the WARN Act: Under the WARN Act employers who employ 100 or more employees and decide to make a mass layoff (50 or more employees) or close a plant are required to give 60 days notification to affected employees. This bill would provide an exception if the layoff is COVID related, so that those notifications are not required.

9.8 version: This provision remains unchanged.

Miscellaneous Provisions of Interest

  • USPS will be given $10 billion if they have less than $8 billion cash on hand

9.8 version: This provision remains unchanged.

  • $29 billion for vaccines, therapeutics, diagnostics, medical supplies etc. related to  COVID.

9.8 version: this is now $31 billion.

  • $105 billion to Dept of Education for state grants, the majority of which are funneled to states where students are learning in person rather than online.

9.8 version: This provision remains unchanged.

  • NEW Educational Changes: Due to pressure from several Senate Republicans, a section has been added providing funding for “qualified education expenses” like private school tuition and home-schooling expenses. It would allow parents of students in K-12 to use 529 funds for schooling expenses as a result of COVID.

 

What’s Next?

Senate GOP leadership is pushing for a vote this week but is reportedly struggling to ensure all GOP votes are in favor. Because Democrats have generally rejected a bill with a price tag below $3 trillion, it’s unlikely any Democrats will vote to pass. The outcome in the Senate is very unclear.

However, even if it squeaks out of the Senate on a party line vote, it is DOA in the House. This should not be viewed as a final offer, but rather a step towards a possible deal. Significant changes would have to be made to pass muster in the House, so while there are several provisions that would be helpful to individuals and businesses in our industry, it is almost certain not to be signed into law as-is.

Democrats and Republicans both continue to talk about the need for another COVID package, but with only a handful of legislative days left before the election and several other expiring or more pressing needs on the docket (highway reauthorization, a continuing resolution/appropriations, etc) it is unclear what the path to passage is for any COVID package.

 

 

 

Canada

5.4.20 Canadian Federal Update

The Canadian Government has created helpful links and guides to provide direction to businesses affected by COVID-19. 

Support for Businesses: collection of resources available here.

These links cover avoiding layoffs and rehiring employees as well as access to credit. Support is provided to both small and medium sized enterprises, with specific support also available for self-employed individuals.

Guidance Documents for Businesses

Coronavirus disease (COVID-19): For businesses and employees: For both employers and employees who want guides to their rights and responsibilities under COVID specific legislation and regulation.

Risk-informed decision-making for workplaces/businesses during the COVID-19 pandemic: For businesses that are considered essential and are therefore still operating as well as for businesses who will reopen in the short term.

Support for Individuals: collection of resources here.

These links cover items including additional funds for individuals to cover pay loss, extension of tax deadlines, mortgage payment deferral and others programs.

 

3.26 Canada & COVID: C-13 Becomes Law

Wednesday, March 25 Bill C-13 became law in Canada after extensive last-minute negotiations. The bill provides funding for individuals and businesses hurt by COVID-19 and expands the government’s ability to support those affected in the future.

There were multiple concerns that this package drastically expanded the power of the government and so became very contentious this week. Several problematic proposals were changed at the 11th hour to allow passage, including the removal of a provision that would have let the finance minister raise taxes without parliamentary approval.

Included are several important provisions on oversight and spending:

  • Cabinet ministers can spend any amount of money they deem needed in a public health emergency through Sept. 30, 2020.
  • The Finance Minister will begin biweekly reporting to Parliament starting next week to provide a status update on how the funding is being used.

Support for Individuals: Last week two different emergency benefits were announced and through this bill have puttied together and renamed The Canada Emergency Response Benefit (CERB).

Under the program, individuals can receive up to $2,000 a month for the next four months, with an online portal up for applications on or about April 6th, which checks received within 10 days of applying. This benefit will apply to any Canadian out of work due to reasons related to COVID-19, including for sickness, quarantine, caregiving, staying home to take care of children, furloughed workers, those who are still technically employed but not receiving income. The benefit would cover wage-earners, contract workers, self-employed and gig industry individuals. This would apply whether an individual is eligible for unemployment insurance or not. This is a taxable benefit.

Support for Small & Medium Sized Businesses

Formed earlier in March this year, the Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.  This program will allow BDC and EDC to work with private lenders and help individual businesses. Companies interested in taking part can get more information here and can contact their lending institutions to get started.

C-13 also provides eligible small employers a temporary wage subsidy for a period of three months (March 18, 2020 through June 19, 2020) based on a formula within the legislation.

Click here for the latest information on Canadian Government actions surrounding COVID-19.

 

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