May 28, 2020
By Mark Valentini, Director of Legislative Affairs
- It is a comprehensive $3 trillion piece of legislation that, for the most part, spells out the legislative priorities for House Democrats. It includes $1 trillion for states to fight COVID, additional economic stimulus for individuals and couples, extended unemployment benefits, $200 billion for essential workers, etc.
- It is meant to start debate on the next, and likely last, phase of COVID legislation for the remainder of the year.
The legislation as a whole is dead on arrival in the Senate. Senate Republicans see no urgency to rush to pass the next bill; they want to assess the economic impact of the CARES Act and its supplemental, and, when they are ready to negotiate the next package, it must include liability protection for businesses against COVID-related litigation. Republicans had to swallow a pretty big pill on family and medical leave with the passage of the Families First Coronavirus Response Act (FFCRA), and liability protection is the issue where Democrats should be prepared to reciprocate.
The HEROES Act includes provisions that PHCC would support and could very well be included in a final package, which is expected to come early- to mid-June. Those provisions include:
- Reducing the 75% minimum threshold required for payroll expenses in order to have the loan forgiven and letting small businesses spend more on qualified overhead expenses such as rent, mortgage interest deduction, and utilities.
- Allowing businesses that have taken a PPP loan to defer payroll taxes for FY2020. Businesses that took a PPP loan currently are prohibited from deferring payroll taxes under the CARES Act.
- Ensuring that forgiven portions of PPP loans used for qualified expenses are not taxed by any means. According to guidance released by the IRS on April 30, forgiven portions of the loan are not taxable as business income, but expenses paid with non-taxable forgiven revenue are not deductible expenses effectively, acting as a tax on the loan.
- Allowing any 501(c) with 500 or fewer employees to apply for a PPP loan. Payroll calculations must exclude the salaries of anyone who is a registered federal lobbyist.
- Increasing employee retention credit from 50% to 80%.
- Additional funds for workforce investment. The proposal would provide $2 billion through June 2021 to Workforce Investment and Opportunity Act (WIOA) grants to state and local workforce boards for employment training while expanding eligibility for participation in the program.
Mark Valentini is the Director of Legislative Affairs for PHCC—National Association. A seasoned professional with more than 20 years of experience on Capitol Hill and with several national trade associations, Valentini applies his expertise in public policy, workforce and training, and insurance and tax matters to advocate on behalf of all PHCC members.