Senate Introduces $1 Trillion COVID-19 Relief Package
Last night, Senate Majority Leader Mitch McConnell (R-KY) released the Senate Republican's COVID-19 (coronavirus) relief package entitled the “HEALS Act”.
The HEALS Act combines 8 bills seeking to provide relief to combat the coronavirus by providing $1 trillion into the economy to fight this pandemic, to help schools reopen, and to provide liability protection to businesses, schools, non-profit organizations, and health care providers. Furthermore, the bills provide additional money and flexibility to the Paycheck Protection Program (PPP) and it allows businesses to apply for and receive a second PPP loan. Finally, the bill authorizes an additional direct payment of $1,200 to individuals and it extends the current unemployment rules while reducing the $600 per week additional unemployment benefits down to $200. The Senate is expected to begin negotiations with House and Senate Democrats this week in hopes of agreeing to a relief package before the August recess.
Of particular interest to TRALA members, is the PPP section which allows for greater flexibility in how businesses may use their PPP loans and language allowing for companies to apply for and receive a second PPP loan. Specifically, the PPP section authorizes long-term loans to recovery sector businesses which are businesses with 500 or fewer employees that have seen a 50% reduction in their gross revenues. The loans would be the lesser of $10 million or 2 years of annual revenue and would be paid back over 20 years with a 1% interest rate. The bill also authorizes $190 billion for PPP loans and a second draw of PPP loans for businesses with 300 or fewer employees that have seen a 50% reduction in their gross revenue. These loans would be for 2.5 times the monthly income the small business generated before the pandemic with a maximum of $2 million, and businesses that received a previous PPP loan may not receive another one if it aggregates to more than $10 million. Finally, the PPP section makes additional business expenses eligible to be covered by PPP funds. This includes group insurance, covered supplier costs, covered worker protection costs, and covered operations costs.
After a strong push by the business community, the HEALS Act includes long sought-after liability protection for businesses, schools, non-profit organizations, and health providers. Specifically, the bill would require all personal injury and medical malpractice lawsuits related to the coronavirus to be under the jurisdiction of the federal courts. Furthermore, the bill requires workers, customers, or patients, in order to receive a financial judgment, to establish that the defendant was grossly negligent or engaged in willful misconduct and that the defendant failed to make reasonable efforts to follow public health guidelines. Additionally, the bill places limits on non-economic damages like pain and suffering, and it gives plaintiffs 1 year from the date of actual, alleged, or fear of exposure to the coronavirus to file a civil action. The liability protection is retroactive to December 1, 2019 and is in effect until October 1, 2024 or when the public health emergency is over, whichever is later. Other requirements of plaintiffs include an attestation of claims by a medical expert, a list of every place a plaintiff visited 14 days prior to the date of showing symptoms and a list of people the plaintiff was in contact with, and a “loser pays” provision which allows the defendant to seek compensatory and punitive costs if a claim is ruled meritless. TRALA has worked with the Chamber of Commerce and many other business organizations to push for strong liability protection for businesses and TRALA is pleased that the Senate included this language in the bill.
Finally, the Senate Finance Committee included several tax provisions to help employers. Specifically, the bill expands the Employee Retention Tax Credit (ERTC) included in the CARES Act from 50% of an employee's salary to 65%. Under the CARES Act, employers are eligible for the ERTC if their (1) operations were fully or partially suspended due to a COVID-19-related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year. This section lowers the amount of the reduction in gross receipts required to qualify as an eligible employer from a 50-percent decline to a 25-percent decline compared to the same calendar quarter in the previous year. The credit is based on the amount of qualified wages paid by the employer. The CARES Act limited the amount of qualified wages taken into account per employee to $10,000 for the year. This section increases the limitation on qualified wages accounted per employee to $10,000 per quarter (limited to $30,000 for the calendar year). Additionally, the bill establishes a refundable payroll tax credit equal to 50 percent of an employer's “qualified employee protection expenses,” such as testing for COVID-19, protective personal equipment, cleaning supplies, “qualified workplace reconfiguration expenses,” including modifications to workspaces for the purpose of protecting employees and customers from the spread of COVID-19, and “qualified workplace technology expenses,” including contactless point-of-sale systems and other technology to track employee interactions with customers. Qualified workplace reconfiguration expenses and qualified workplace technology expenses must have a primary purpose of preventing the spread of COVID-19 among other requirements. An employer's qualified employee protection expenses, qualified workplace reconfiguration expenses, and qualified workplace technology expenses are limited based on the employer's average number of employees. In each calendar quarter, qualified expenses cannot exceed a cap based on the average number of employees. The cap is equal to $1,000 for each of the first 500 employees, plus $750 for each employee between 500 and 1000, plus $500 for each employee that exceeds 1,000.
While this bill includes several significant provisions to help businesses stay afloat during the coronavirus pandemic and begin the process of reopening, it faces serious opposition from Democrats in the Senate and particularly the House. Specifically, the bill is completely different from the $3 trillion HEROES Act passed by the House earlier this summer, which House Democrats continue to push as their relief package. Additionally, Democrats have been calling for no cuts to unemployment benefits, bailouts for state and local governments, and they are likely to oppose the liability protection language to protect trial lawyers. Senator McConnell has set the liability protection language as a ”red-line” in any negotiations on a final relief package, meaning that he will not support any bill which does not include liability protection for businesses, schools, non-profit organizations, and health care providers. This could set up a scenario where no bill is passed before the August recess and the additional $600 in unemployment benefits included in the CARES Act will expire at the end of July.
You may view the Continuing Small Business Recovery and Paycheck Protection Program Act by clicking here
You may view a one page summary of the Small Business Recovery and Paycheck Protection Program Act by clicking here
You may view the Restoring Critical Supply Chains and Intellectual Property Act by clicking here
You may view the TRUST Act by clicking here
You may view the Safe to Work Act by clicking here
You may view the Safely Back to School and Back to Work Act by clicking here
You may view the Coronavirus Response Additional Appropriations Act by clicking here
You may view a summary of the Coronavirus Response and Additional Appropriations Act by clicking here
You may view the Supporting America's Restaurant Workers Act by clicking here
You may view the American Workers, Families, and Employers Assistance Act by clicking here
If you have any questions regarding the HEALS Act please do not hesitate to contact Jake Jacoby at firstname.lastname@example.org or Andrew Stasiowski at email@example.com.