Weekly Legislative Update April 20, 2020

New FAQs on COVID-19 Related Sick Leave and Family Leave

 
Click here for a link to newly-revised IRS FAQs on COVID-Related Tax Credits for required paid leave for small and midsize businesses under the Families First Coronavirus Response Act.  
 
This revision is effective April 17, 2020 and replaces the previous version.

TIA Signs onto Paycheck Protection Program Letter

 
Dear Speaker Pelosi and Leaders McConnell, Schumer and McCarthy:
 
The undersigned organizations thank you for the prompt adoption of the Paycheck Protection Program (PPP) under the CARES Act and ask that you move quickly to authorize additional funding for the program. While there are many improvements that can and should be made to the PPP and some companies have not even applied yet due to difficulties with, or uncertainty about, the program there is unquestionably additional demand for this program that current funding cannot provide. Congress should act expeditiously to assure that the PPP will have the resources it needs to sustain America's small business economy through the COVID-19 pandemic.
 
In just a few weeks, the PPP has emerged as a central and effective response to the economic damage resulting from COVID-19. PPP loans are providing a vital source of liquidity to more than a million individually and family-owned businesses whose operations have been curtailed or shut-down by stay-home orders and other government actions taken in response to the virus. These businesses, in turn, are using the loans to keep millions of Americans employed.
 
According to the Small Business Administration, however, banks have already committed most of the $349 billion provided to capitalize the PPP, and it is likely the program will run out of money within the week, leaving millions of additional businesses without the funds necessary to keep their workers employed.
 
Please act now to authorize additional funding for the Paycheck Protection Program so that these vital loans can continue to ensure that additional workers are able to keep their jobs and small businesses are able to avoid bankruptcy.
 
Sincerely,
The Tire Industry Association and others. 

 

CARES Act of 2020 Amendments Necessary to Provide COVID-19 Disaster Relief for Critical Infrastructure Businesses to Preserve the U.S. Economy and Promote a Fully Functional Restart
 
The undersigned organizations represent the nation's automotive repair and maintenance service and supply businesses designated by the Department of Homeland Security as "critical infrastructure," the vast majority of which are small businesses. 
 
The CARES Act was a positive step in the right direction, and we are grateful for it. However, several critical aspects of the programs it provides either do not go far enough or miss key factors. Massive, permanent job losses due to employer bankruptcy will follow.
 
If you agree that all reasonable steps must be taken to revive America's economy as fast as possible, we urge you to support the following CARES Act relief plan upgrades.
 
  • The Paycheck Protection Program (PPP) is a bandage where stiches are ultimately required. We urge you to expand the PPP as follows:
  • Extend the maximum PPP loan amounts to include 3 months after each state's stay-home order is lifted so that small businesses can regain full operational patronage. Although automotive maintenance is a necessity for vehicle safety and longevity, many consumers are more frightened of COVID-19 than stalling on a highway. Some aren't
CARES Act of 2020 Amendments Necessary to Provide COVID-19 Disaster Relief for Critical Infrastructure Businesses to Preserve the U.S. Economy and Promote a Fully Functional Restart April 14, 2020 leaving home for anything. It may also take them months of post-stay-home order 
  • Increase the size of the PPP fund for forgivable loans to the current estimated need of $1 trillion and reinstate the $500 million gross revenue cap so that funding will be available for the small businesses that truly have no other way to cover costs.
  • Require the Small Business Administration to follow the PPP statutory loan repayment time limit of 10 years for unforgiven amounts versus the 2-year limit imposed in the PPP Interim Final Rule effective April 2, 2020. This change will make the difference between recovery and bankruptcy especially if congress fails to add significant coverage for business mortgage and lease payments (see below).
  • Add a "Workplace Preservation Program" to cover small business mortgage and lease costs thereby ensuring employees have a place to work during and after the COVID-19 crisis. Payroll is only one hurdle faced by the smallest small businesses. Many businesses like fast lubes, coffee shops, and dry cleaners, have much higher mortgage/lease impact because they require many small facilities with a small number of employees onsite. Their business models depend on streamlined services and convenient locations. The PPP, however, only allows up to 25% of the loan to be forgivable with regard to mortgage/rent. Having been created to focus on payroll protection, that makes sense, but we now need forgivable "Workplace Preservation Program" loans to cover mortgage/rent costs in order to stay in business so that covering payroll remains a relevant concern. No place of business, no business, no employees, no payroll.
  • Business Interruption Insurance must cover COVID-19 as a "dangerous condition" or other covered natural disaster. If that cannot be accomplished due to state contract law complications, impose a new federal fee on every insurance company with active policies claiming to provide "business interruption insurance" and/or currently selling or that in the future sells "business interruption insurance" in the United States, which will go to a Federal Pandemic Bailout Fund for businesses denied insurance coverage on paid policies for pandemic-related business interruption.
We thank you in advance for your attention to this crucial matter. 
 
Sincerely,
 
The Tire Industry Association and others.

TIA Signs onto SBLC PPP Additional Funding Letter

 
Dear Majority Leader McConnell and Democratic Leader Schumer: 

I am writing on behalf of the Small Business Legislative Council (SBLC) regarding the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. We strongly support, and sincerely appreciate, Congress' efforts to provide critical capital to help America's small businesses and their employees weather this unprecedented crisis. 

We have already seen real world examples of these programs helping businesses keep their employees on payroll and avoid defaulting on their debt obligations. However, on the other hand, we have also had reports from a significant number of small businesses that have struggled to access these loans - from locating a lending institution that will accept their application to navigating the application process itself. Additionally, the SBA has imposed limits to EIDL loan funding that are significantly below what was provided by statute - rendering the loans insufficient to provide meaningful help to the vast majority of small businesses. Finally, our members, most of which are 501(c)(6) organizations, have themselves been excluded from accessing the PPP funding, which is causing them hardship.

The funds appropriated for the PPP and EIDL programs are already exhausted. In the face of this, we urge Congress to take swift action to secure the vision and intent of the PPP and EIDL by authorizing additional funding for these programs and to expand PPP eligibility to 501(c)(6) organizations. 

America's small businesses and the groups that support them will play a critical role in stabilizing and rebuilding our economy when we emerge from this crisis. However, they can only do so if they have the resources to survive the next weeks and months. 

We thank you for your consideration of this matter and stand ready to provide any additional information or assistance that you or your staff may require.

USTMA Quick Reference Chart on State-Level Definitions of Essential Businesses 

 
USTMA launched a resources page to track state-level definitions of essential businesses. It is updated daily, and the most-current version is always available via this publicly-accessible link: