July 29, 2020

FEDA Members Urged to Contact Legislators to Support COVID-19 Relief Package Provisions

Summarized from Jade West, National Association of Wholesaler-Distributors

On July 27, Senate Republicans released a series of bills covering a broad range of issues that they will now combine into the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act. This is the Senate’s long-awaited $1 trillion CARES 2 Coronavirus response legislation.

To pass, this bill will have to get 60 votes, and that outcome is not certain since there is intense Democratic opposition and some opposition from Senate Republicans as well. Negotiations are now underway on the Senate bill, and if it passed it will have to be reconciled with the HEROES Act, which was passed by the House in June, before something can be sent to the president.

The HEALS Act includes numerous provisions that NAW has strongly advocated for, such as: 

  • Additional funding and structural changes for the Paycheck Protection Program (PPP);
  • Limited and targeted liability protection from COVID-related claims;
  • Extension of the unemployment insurance program but with a reduced pandemic bonus payment;
  • Expansion of the Employee Retention Tax Credit, including making PPP borrowers eligible for the ERTC with limits to prevent overlap; and
  • Stimulus payments to individuals.

One notable omission the NAW expected in the bill was language to reverse the IRS ruling that otherwise-deductible expenses paid with forgiven PPP loan proceeds are not tax-deductible. A strong effort will be made to fix this problem.

Politico published a story last evening that summarizes the legislation and gives a good account of the political situation in Congress and the challenges ahead as they try to negotiate a final bill. You can read that story here.

Also, the Littler Law firm published a report on some of the key provisions in the bill. You can view the firm’s report here.

Section-by-section of Finance/tax provisions

Legislative text of Finance provisions (including ERTC)

Liability legislative text

Small business section-by-section

Small Business provisions legislative text

Legislative text for Restaurant aid

FEDA urges members to reach out to their legislators and ask them to work toward the passage of another COVID-19 relief package the would include the above provisions. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner. 
 

July 29, 2020

PLUS Act Take Action Alert

With the introduction of the HEALS Act this week, it is unclear whether measures left out of the GOP recovery package or the Democrats’ alternative HEROES Act will have momentum in the coming weeks. One such proposal is the Providing Liquidity for Uncollectible Sales (PLUS) Act, which would provide a 100 percent tax credit to wholesale distributors that sell to food and beverage operators that were forced to close for at least 30 days because of the COVID-19 pandemic.

FEDA is asking members to contact their legislators to urge them to support the PLUS Act and ensure the tax credit is made available to the foodservice equipment and supplies industry. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner.
 

July 20, 2020

Potential Defense Amendment Would Burden Small Businesses

The National Federation of Independent Businesses (NFIB) has authored a letter to congressional representatives opposing a new regulation that would require small businesses to disclose information about their beneficial owners to the Financial Crimes Enforcement Network.

The language of the Corporate Transparency Act of 2019, which includes the reporting requirement, could be added to the National Defense Authorization Act for Fiscal Year 2021, the NFIB reports, despite having little to do with the defense bill.

“This amendment would saddle America’s smallest businesses with 131.7 million new paperwork hours at a cost of $5.7 billion, and treats small business owners as criminals by threatening them with jail time and oppressive fines for paperwork violations,” the NFIB wrote.

FEDA previously signed on to a letter to Senate leaders opposing  the Corporate Transparency Act, in part because it would shift reporting requirements from large banks to small businesses that were not well-equipped to handle the additional workload the new paperwork would create. NFIB members appear to share those concerns, as 80 percent of them oppose the idea of Congress requiring small business owners to file paperwork with the Treasury Department each time they form or change ownership.

“While large businesses and financial institutions may have access to teams of lawyers, accountants, and compliance experts to gather beneficial ownership information and report it to the government, small business owners do not,” the NFIB said. “Small business owners have difficulty affording accounting and legal experts to help them understand and comply with federal reporting requirements. And small business owners lack the time to track and gather information to fill out yet more forms for the government.”

Further, the NFIB expressed concerns that the new requirement would lead to the establishment of a publicly accessible federal registry, which could be used to name and shame small business owners.

The full letter is available to read here.

FEDA urges its member to contact their legislatures and ask them to oppose the Corporate Transparency Act of 2019. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner.
 

July 20, 2020

Proposed Bill Would Simplify PPP Forgiveness

In an effort to uncomplicate the Paycheck Protection Program’s loan forgiveness process, 14 senators have cosponsored S. 4117, a bill that would provide automatic forgiveness for loan amounts less than $150,000. The bill would additionally prohibit any enforcement action against a lender relating to loan origination, forgiveness, or guarantee based on the lender’s reliance on documents submitted by the loan applicant.

During a hearing of the House Committee on Small Business Friday, July 17, U.S. Treasury Secretary Steven Mnuchin said he believed automatic or simplified forgiveness for the smallest borrowers should be considered as part of the next COVID-19 relief package.

The bill, dubbed The Paycheck Protection Program Small Business Forgiveness Act, is intended to help PPP applicants more easily receive loan forgiveness. FEDA encourages member companies to contact their representatives to support S. 4117. The Consumer Bankers Association has developed a list of talking points businesses can use when discussing the issue with their legislators.

The current PPP forgiveness application and guidance issued by Treasury and SBA outlining the forgiveness process is overly complex.

  • It is apparent that the process will be unnecessarily burdensome for many businesses, particularly the smallest of small businesses that do not have the administrative support needed to complete the form.
  • In order to help these businesses, Congress should pass S. 4117, “The Paycheck Protection Program Small Business Forgiveness Act” sponsored by Senators Cramer, Menendez, Tillis and Sinema.
  • This legislation forgives PPP loans of less than $150,000 upon the borrower’s completion of a simple, one-page forgiveness document.
  • This threshold would account for 86 percent of total PPP recipients, but less than 27 percent of PPP loan dollars. Lenders would continue to meet the PPP requirements provided by SBA for these loans, but the loan forgiveness process would be faster for these small businesses.
  • Small businesses and their employees are the backbone of our nation’s economy and communities. Their time and resources would be better focused on getting the economy safely back up and running, not processing overly complicated paperwork.

To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner.
 

May 21, 2020

Amendment Would Add Flexibility to PPP Terms

As FEDA described in Wednesday's mid-week COVID-19 legislative update, there is a push to make amendments to the CARES Act that would give employers added flexibility on how they use Paycheck Protection Program (PPP) loans and how their forgiveness is calculated.

The House version of the bill, H.R. 6886, was introduced by Chip Roy (R-TX) on May 15 and is expected to be considered next week. Roy has provided a thorough summary of the amendment, which can be read here.

The Senate may consider those alterations as early as today, according to the U.S. Chamber of Commerce. FEDA encourages members to reach out to their legislators and ask them to support the amendment. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner.