NAA Analysis of Senate's Latest COVID-19 Relief Package

On Monday, July 27, 2020, Senate Republicans released multiple legislative proposals in response to the COVID-19 emergency, collectively referred to as the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act. The more than $1 trillion package contains a series of priorities intended to mitigate the adverse effects of COVID-19 and is a starting point in ongoing negotiations to finalize what will likely be the final phase of COVID-19 relief before the elections in November. Following is a detailed summary of the most pertinent provisions of the legislation.

Safe To Work Act

• Congress’ effort to establish federal protection against any COVID-19 related medical liability for businesses, schools and healthcare facilities.
• Acknowledges the unpredictability of state liability protection laws alone as the economy reopens.
• Grants liability protection to businesses that have undertaken reasonable efforts to comply with mandatory safety guidelines available at the time of exposure. Also includes similar safe harbors for businesses in jurisdictions without mandatory guidelines.
• Creates a narrow cause of action under which individual claims may be brought forward against businesses due to exposure. Gross negligence remains an allowable cause of action.
• Protects employers that follow applicable government standards and guidance from lawsuits brought forward under federal labor and employment law.
• Shields businesses from enforcement actions due to the refusal to make public accommodations under the Americans with Disabilities Act and Civil Rights Act of 1964, so long as they can demonstrate doing so would be a substantial risk to public health or the health of employees.
• Applies to claims brought forward after December 1, 2019 and prior to October 1, 2024.

American Workers Families and Employer Assistance Act

• Replaces $600 per week unemployment insurance (UI) with $200 per week UI through September.
  
  • Beginning in October, UI will be replaced by a state payment of up to $500 that would replace 70% of lost wages.
  • Payment is determined by the formula proposed in the bill or by state alternative.
  • If unable to supplement this second form of payment, states may apply for a Department of Labor waiver and continue paying a fixed amount for two months.
• Requires states, thirty days after the passage of this bill, to notify workers and employers of the state’s return to work requirements, the individual’s rights to refuse to return to work or to refuse suitable work, and the process to contest the denial of a claim as a result of these requirements.
• Contains additional recovery rebate “stimulus checks” for individuals and families.
  
  • A sum of $1,200 to individuals with a gross income of less than $75,000 and $2,400 to married couples with gross income of less than $150,000 combined.
  • Qualifying families would now receive an additional $500 for dependents of any age.
• Includes heavy revisions to the Employee Retention Tax Credit (ERTC).
  
  • Changes the amount of the ERTC to equal 65% of certain wages paid to employees. The maximum amount of qualified wages has increased from $10,000 per year to $10,000 per quarter (limited to $30,000 per calendar year).
  • Allows employers to qualify for the ERTC if they can demonstrate a full or partial suspension of operation due to COVID-19 and can reflect a decline in gross receipts by 25%.
  • This provision increased the 100-employee threshold to 500 employees, expanding eligibility for employers. Businesses under this threshold may apply the wages of all employees, while those over may only apply the wages of those employees who cannot work.
• This bill establishes a safe and healthy workplace tax credit equal to 50% of an employer’s qualified employee protection expenses.
  
  • These expenses are defined as: Employee and customer COVID-19 testing; personal protective equipment (PPE) including masks, gloves and disinfectants; cleaning products or services to prevent the spread of COVID-19; and amounts paid to design and reconfigure areas of regular employee and customer use to prevent the spread of COVID-19 between March 13, 2020 and January 1, 2021.
  • Expenses may not exceed the cap based on average number of employees. The cap starts at $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.
  • Sole proprietors, self-employed individuals and independent contractors are also eligible for this tax credit.
• New changes will also allow use of Paycheck Protection Program loans simultaneously with the ERTC with limitations in place to prevent double benefits.

Continuing Small Business Recovery and Paycheck Protection Program Act

• Despite minimal changes to eligibility, the Paycheck Protection Program (PPP) faces major upheaval that will impact the lending program’s reach and operation.
  
  • Payments for any human resource or accounting software, property damage not covered by insurance, goods essential to current operations, and PPE expenditure would be considered eligible for forgiveness.
  • Borrowers may select any 8-week period between their loan origination and December 31, 2020 to qualify for forgiveness.
  • Simplified loan application standards for borrowers of loans under $150,000 and loans between $150,000 and $2 million.
• This bill creates the $190 billion PPP Second Draw loan program available to borrowers who have already received a PPP loan.
  
  • Borrowers must meet the SBA’s revenue size standard, employee fewer than 300 employees, and demonstrate a 50% reduction in gross receipts in the first or second quarter of 2020 relative to 2019.
  • Further eligibility criteria reflect the regulations prescribed under the original PPP and excludes those multifamily firms under PPP Second Draw.
  • Loan terms mimic those under the original PPP.
• Furthermore, 501(c)(6) organizations would be made eligible under this bill based on certain criteria.
  
  • The organization does not receive more than 10% of receipts from lobbying activities.
  • Lobbying activities do not comprise more than 10% of receipts.
  • The organization has fewer than 300 employees.

Appropriations

• $2.2 billion in Tenant-Based Rental Assistance (TBRA) until expended. Specifically, these funds would be used to provide additional funding for Public Housing Agencies (PHAs) to maintain normal operations during the period significantly impacted by coronavirus. Of these amounts:
  
  • $500 million would be available for both administrative expenses and other expenses of PHAs for their Section 8 programs, including Housing Choice and Mainstream vouchers.
    • An important note is that any amounts provided for administrative expenses and other expenses of PHAs, including Housing Choice and Mainstream vouchers, under both the CARES Act and this Act, will be available for Housing Assistance Payments.
  • $1.7 billion would be used for adjustments in the calendar year 2020 and 2021 Section 8 renewal funding allocations, including Housing Choice and Mainstream vouchers, for agencies that experience a significant increase in voucher per-unit costs.
  • The Secretary maintains broad waiver authority for dealing with circumstances related to coronavirus but must notify the public of the use of such waiver authority.
• $1 billion to the Public Housing Operating Fund until September 30, 2022, which will provide PHAs with additional operating assistance to make up for reduced tenant rent payments, as well as to help contain the spread of coronavirus in public housing properties.
• $113.4 million to the Rural Development Rental Assistance Program until September 30, 2021, which will be used for necessary expenses related to the temporary adjustment of loss of wage income losses for residents of housing financed or assisted under Section 514, 515 or 516.