New Stimulus Bill—What You Need To Know About A Second Stimulus Check, $200 Unemployment Benefits, PPP And More

On July 27, 2020, Republicans put forth their new stimulus package proposal of approximately $1 trillion called the HEALS Act (the Health, Economic Assistance Liability Protection & Schools Act). The Democrats had previously proposed a $3 trillion+ stimulus package under the “Heroes Act,” but Republicans had rejected it as too broad and too big.

There have been so many news stories and statements about a new stimulus package that it’s difficult to discern what will actually become law. This article describes what you need to know about the likely provisions of the next stimulus bill by answering the most important questions.

1. Will there be a second stimulus payment?

Yes, there will almost certainly be a second stimulus payment, although the specific details are in flux. The most likely result is a second stimulus payment similar to the first payment.

2. How much will the second stimulus payment be?

The second stimulus payment, as proposed by the Republicans on July 27, will likely be:

  • A one-time stimulus payment of $1,200 for each individual
  • A one-time stimulus payment of $2,400 for married or joint filers
  • A one-time stimulus payment of $500 for dependents, with no age restrictions (the CARES Act required dependents to be under 17 years of age)

3. What are the income requirements for eligibility for a second stimulus payment?

In order to qualify for the second stimulus payment, you will likely need to have earned (likely in 2019) less than $75,000 (for individuals) or $150,000 (for married/joint filers).

The original stimulus payment provided that if your income was higher than those limits, then the stimulus payment was reduced by 5% of your adjusted gross income above those limits. It is expected that the second stimulus payment will have a similar provision.

The Republicans initially proposed a $40,000 threshold instead of a $75,000 threshold, but that proposal appears abandoned. The Democrats had proposed a larger stimulus payment (of $2,000 a month) but that will likely not be included in the final package.

4. Will the $600 per week federal supplemental benefit for laid-off employees be extended?

The original CARES Act provided for a $600 per week federal supplemental unemployment benefit payments to laid-off employees. These supplemental benefits expired on July 25 or July 26, depending on the state.

The Democrats want to extend such benefits. The Republicans complained that the $600 is too high because it exceeds the wages of many workers, discouraging them from returning to work.

The Republican package proposed on July 27 offered instead a $200 a week temporary supplement to state unemployment payments. That $200 would then be replaced with a more complicated program that would pay workers 70% of the income they collected before they lost their job. Under the Republican proposal, the states would phase in the 70% formula within two months. Given how arduous it has been for states to handle the massive volume of unemployment claims, it is difficult to see how such an approach is feasible within a reasonable period of time.

This is probably the most contested issue; however, it is expected that some compromise will be reached in the next few weeks.

On July 27, certain California legislators indicated that they would move to pass legislation to fill any gaps in the $600 unemployment benefits if Congress approves a smaller amount, to help Californians during the economic downturn. Legislative leaders expressed the view that such an additional benefit would be crucial to prevent an economic collapse and ensure working families can keep their housing and pay for necessities.

5. Will independent contractors, freelancers, and gig workers continue to receive the extra $600 a week in benefits?

The Pandemic Unemployment Assistance (PUA) program contained in the original CARES Act provided federal aid of an extra $600 per week for independent contractors, freelancers, and gig workers adversely affected by Covid-19 and not otherwise eligible for standard unemployment insurance benefits. Under the CARES Act, this aid is scheduled to continue until December 31, 2020. But there is some uncertainty as to how independent contractors, freelancers, and gig workers will be treated, so we may need to wait for the final stimulus bill to alleviate the uncertainty.

 

6. Will the Payroll Protection Program (PPP) be extended or expanded?

The PPP loan program is due to expire on August 8, 2020, for any new loans. The PPP has been enormously helpful to small businesses by granting favourable forgivable loans.

The Republicans in their new stimulus package proposed expansion of the PPP, including a streamlined forgiveness process and a provision that would allow smaller businesses to take out second PPP loans.

7. Will the new stimulus package include a payroll tax cut?

No. President Trump previously insisted on a payroll tax cut as part of any new stimulus bill. But Treasury Secretary Mnuchin recently proclaimed that a payroll tax cut or payroll tax deferral would not be included initially, but could be added at a later date.

8. Will there be any new student loan forgiveness provisions in the next stimulus package?

While the Democrats included student loan forgiveness provisions as part of their proposed Heroes Act, the Republicans did not, and it is unlikely that any additional student loan forgiveness/deferral provisions will be contained in a final stimulus package.

9. Will there be a “return-to-work” bonus for employees?

Senator Rob Portman (R-OH) had proposed a “return-to-work” bonus, which would provide a financial incentive for people to return to work. The bonus proposed was $450 a week for some period of time if you returned to work by a designated date.

At the moment, it is uncertain as to whether the final stimulus package will include such a bonus.

10. Will there be an aid for states and cities in the new stimulus package?

Republicans and Democrats both recognize that states and cities have been significantly adversely affected by the Covid-19 pandemic.

Democrats have proposed approximately $1 trillion for state and local aid. The Republican proposal of July 27 did not offer state and local government any additional funds, but it does grant them more flexibility in using the existing federal assistance.

Some compromise will be reached on this issue, and thus there is likely to be a meaningful amount available to assist states and cities.

11. Will there be liability protection for litigation arising from the pandemic?

The July 27 Republican package proposes liability protection from lawsuits arising out of the pandemic for businesses, hospitals, and schools, for five years.

The protection would raise the burden of proof for plaintiffs in that they would have to prove that a defendant was “grossly negligent or engaged in willful misconduct,” and also that they violated state and local public health guidelines at the time.

Democrats have expressed opposition to this concept, so expect negotiations on this issue.

12. Will renters living in houses with federally backed mortgages still be protected from evictions for not paying rent?

The CARES Act provided for a moratorium on evictions for renters living in homes with federally backed mortgages, but that expired on July 25, 2020. Landlords, however, are still required to give 30 days’ notice before beginning eviction proceedings. With many courts closed because of the pandemic, eviction proceedings will likely take much longer than 30 days.

The new Republican stimulus package of July 27 proposed extending the moratorium but the extension date is unclear at the moment.

The Republican stimulus package does not provide help for tenants of buildings backed by privately issued mortgages.

13. Will there be funds allocated for testing of Covid-19?

The July 27 Republican proposal provides for $16 billion in new funding for coronavirus testing, as well as clarifying that $9 billion in previously approved funds under the CARES Act will be used for testing.

14. Will there be funds allocated for schools?

The July 27 Republican proposal allocates $100 billion towards schools, with $70 billion targeted for kindergarten through 12th-grade schools and $30 billion for colleges and universities. An additional $5 billion has been proposed to go to Governor’s funds to be allocated for education as the governors see fit.

The Democrats had previously proposed $430 billion for schools.

15. When will a new stimulus bill be passed into law and become effective?

The timing of a new stimulus bill is all dependent on the negotiations between the Democrats and Republicans resulting in a final bill, that is then signed by the president. The best estimate is early August.

The Senate is scheduled to go into recess on August 7. If a new stimulus bill can’t be passed by then or if there isn’t a delay in the recess, neither the House nor the Senate is scheduled to return until after Labor Day (September 7).

New York’s Century 21 Department Store Is No Stranger To Successfully Surviving A Crisis

There’s something distinctively different about Century 21 department stores. For almost six decades, the New York City retailer has consistently offered true designer merchandise at steep discounts. It’s beloved by its loyal customers but COVID-19 has complicated its successful business formula.

Century 21 is a retail theatre. Shoppers are willing to spend hours digging for bargains of high-end goods at up to 65% off. Vogue magazine has called Century 21 a place “where fashion’s hoi polloi and fashion’s intelligentsia search obsessively side by side.”

Unlike other retailers that have come and gone in the Big Apple, Century 21 remains a shopping destination. Trip Advisor recommends a visit to Century 21 as one of the “Top Things To Do in New York City.” Travel + Leisure has simply stated, “For the fashion-conscious, Century 21 is a shrine.”

Century 21 operates 11 locations throughout the New York City metropolitan area and its large Downtown Manhattan flagship store is almost as much a tourist attraction as it is a department store. But COVID-19 has dramatically curbed shopping excursions and tourist visits to the region.

Heather Feinmel, director of marketing and public relations for Century 21, acknowledges the challenges of doing business in New York City during COVID-19. “Our flagship store in Downtown Manhattan has been very challenged due to the decline in tourist traffic as well as local office workers in the area.”

In mid-March, all Century 21 stores were closed due to quarantine restrictions. However, over the past month, all locations have reopened as loyal customers cautiously return to in-store shopping. “We are optimistic about business, even though traffic remains tough, but we are extremely humbled by how many loyal customers did return to shop when we opened our doors, and continue to visit us now,” Feinmel says.

Because of the COVID-19 crisis, Century 21 has recently made some difficult decisions. In early June, the company permanently laid off over 1,000 employees, from corporate-level positions to the sales force.

“There’s no question that they’ve been successful up until COVID-19,” says retail consultant Jan Rogers Kniffen. “What we don’t know is can they get through the ditch? It’s not like they did anything wrong. I’m sure they’re just conserving cash.”

Kniffen feels that the current crisis might be especially hard felt at Century 21. As a company heavily invested in a ravaged COVID-19 area, “there’s just no business going on in New York City right now.” Century 21 also operates a Center City Philadelphia store, located within the former Strawbridge & Clothier flagship, and a store at South Florida’s massive Sawgrass Mills outlet centre. Both locations are in hard-hit areas and are extremely reliant on tourist dollars.

But Century 21 is no stranger to tragedy. The company’s flagship is located just opposite the World Trade Center on Cortlandt Street, located within the former East River Savings Bank building. On September 11, 2001, over 500 employees and customers were inside the store when the first plane hit the North Tower. All were quickly and safely evacuated and accounted for.

Though it was structurally sound, Century 21 spent $10 million to quickly repair the heavily damaged structure. The gutting and rebuilding the department store’s interior took less than six months. As the World Trade Center ruins remained visible just opposite of its main entrance, Century 21 reopened on February 28, 2002.

It took several years to rebuild the volume at its Downtown Manhattan flagship. Devoid of workers, buildings throughout the Financial District and many streets remained off-limits to pedestrians. Feinmel says, “The last time Century 21 Stores closed its doors was during 9/11 when our downtown store was severely damaged, and just like then, we know we will get through this period and come out even stronger.”

In 1961, Sonny and Al Gindi opened the first Century 21 department store in a modest 5,000-square-foot storefront and members of Gindi families remain in control of the business today. The name referenced the upcoming 1962 “Century 21 Exposition” to be held in downtown Seattle. The fair was intended to predict how humans would likely live, work and eat in the year 2000.

Century 21’s reputation as a reliable source for discounted one-of-a-kind fashionable merchandise might help it secure its future during this critical time. “Century 21 is the ‘Real Deal,’” says Kniffen. “It never changed its character. It’s been selling designer clothing at 65% off since 1961.”

Feinmel lists some changes and innovations that Century 21 is enacting to ensure customer safety in the new COVID-19 world. “The impact of COVID-19 has fast-tracked the need for a reimagined guest experience in-store. We are testing new programs, such as an in-store live stream. In addition, we will be hosting private shopping events, to help consumers feel at ease.”

Despite the challenges, Century 21 is cautiously optimistic about its future. “We are committed to doing the best we can during this challenging time to keep our business alive,” Feinmel says.

Kniffen may provide the best reason why Century 21 has a strong chance for future success. “New Yorkers know that shopping at Century 21 is not only cheap, but it’s also still cool.”

Los Angeles-To-Las Vegas High-Speed Train Wins $200 Million Nevada Bond Allocation

XpressWest, a high-speed rail line that will connect Southern California to Las Vegas, won $200 million of private activity bonds from Nevada, a critical final public allocation that allows the company owned by Wall Street investor Wes Edens to raise an additional $800 million for the project.

The Nevada State Board of Finance’s approval for the project, a unit of Edens’ Florida-based Brightline passenger rail service, comes after California awarded it $600 million of private activity bonds in April. XpressWest can sell four times the value of the awards as tax-exempt bonds to private investors, meaning it’s now lined up $3.2 billion of funding from the two states. Including a $1 billion U.S. Department of Transportation allocation in March, XpressWest has lined up $4.2 billion of the 170-mile rail line’s total $5 billion construction cost.

“This plan creates jobs without using taxpayer dollars and without impacting our state’s ability to finance future projects, and will allow a new, convenient mode of transportation between Nevada and California,” Nevada Governor Steve Sisolak said. XpressWest says the project will create a total of 30,000 construction jobs and 1,000 permanent jobs in the neighbouring states once the line is up and running in a few years.

Brightline operates the only privately owned U.S. passenger rail line, currently connecting West Palm Beach to Miami, and is building an extension to Orlando. Edens’ has told Forbes he sees a big opportunity in the U.S. for rapid trains links between middle-distance cities that are too close to fly but a little too far to drive, modelled on the Paris-to-London Eurostar and other private European trains.

The company estimates its West Coast and Florida rail projects will cost a combined $9 billion build but Edens says they will eventually generate “spectacular” profits. Brighten estimates the two projects may haul nearly 20 million passengers in 2026, generate annual revenue of $1.6 billion and operating profit of almost $1 billion a year.

“The lack of passenger travel by train in this country is a travesty,” Edens told Forbes early this year. “It’s a gigantic opportunity.”

The XpressWest line will be built near Interstate-15 and operate electric trains travelling at speeds up to 200 miles an hour to move people between Southern California and Las Vegas in 85 minutes. Construction is to start late this year and the company estimates it will attract 10 million riders annually.

“Large-scale construction projects are a critical piece of rebuilding our economy, and private activity bonds are a perfect mechanism to incentivize the private sector to deliver public benefits,” said Sarah Watterson, chief development officer for XpressWest.

Currently, the California terminus for the XpressWest line is Apple Valley, a high desert community about 90 minutes from Los Angeles, but the project is in talks to extend it to Rancho Cucamonga, a Los Angeles suburb that’s connected to downtown LA via the Metrolink commuter rail service.

Private activity bonds, created by the federal government for high-cost infrastructure projects, are tax-exempt but do not use public funds.

Senate CARES Act 2.0 Includes More Stimulus Checks, Unemployment Benefits

In March of 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. It was bigger than the original Senate proposal but smaller than the subsequent House proposal. Eventually, the two reconciled and the CARES Act became law.

In May of 2020, the House introduced and passed a new COVID-19 economic relief proposal. The bill, known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, was not taken up by the Senate. At the time, Senate Majority Leader Mitch McConnell (R-KY) suggested that the timing was not right for another bill. But with just a few days to go before federal unemployment benefits run out, that appears to have changed.

You might be looking for the “HEALS Act” (Health, Economic Assistance, Liability Protection, and Schools Act) being put together under Sen. McConnell’s watch. So far, there is no single bill, but rather a series of proposals. Various committee chairs have drafted their proposals and introduced them separately on the Senate floor.

This article focuses on the American Workers, Families and Employers Assistance Act introduced by Sen. Chuck Grassley (R-IA) targeting well, workers, families and employers assistance. It’s a much smaller proposal than the full CARES Act (and the HEROES Act), weighing in at just 168 pages – but remember, it’s just a piece of the overall package. A supplemental proposal, led by Sen. Marco Rubio (R-FL) and Sen. Susan Collins (R-ME), tackles the Paycheck Protection Program (PPP) and business tax incentives (I’ll have more on that separately).

Here’s what Sen. Grassley’s proposal provides:

Unemployment Benefits. The $600/week federal supplement for unemployment is slated to end on July 31, 2020, under the CARES Act. The House HEROES Act would extend it through January 31, 2021, and expand other unemployment-related benefits. The Senate proposal would continue payments up through October 5, 2020, but at a reduced rate of $200/week. However, beginning in October, under the Senate bill, the payments would increase so that, when combined with the state unemployment payment, it would represent 70% of lost wages. If an individual state cannot bring the total to 70%, the state can suggest an alternative and get a waiver from the Secretary of Labor. Also, beginning in October, the additional payment would be considered income for determining eligibility for other benefits.

State Funding. The proposal would provide funding to reimburse states for 80% of their increased costs of providing cash assistance and other short-term help through the Temporary Assistance for Needy Families (TANF) program, up to a cap of $2 billion. TANF provides families with financial assistance and related support services. State-administered programs may include childcare assistance, job preparation, and work assistance.

Stimulus Checks. Under the CARES Act, U.S. citizens and residents with adjusted gross income up to $75,000, or $150,000 for married couples (subject to phaseouts), who are not a dependent of another taxpayer and have a work-eligible Social Security number (SSN), were eligible for stimulus checks worth $1,200 per adult and $500 per dependent. As before, there is no “bottom,” so those folks who have no income are eligible. And as before – but in breaking with the HEROES Act – anyone with an ITIN is ineligible; any person with an SSN married who files jointly with a person who has an ITIN remains ineligible. The Senate proposal largely mirrors the CARES Act with some exceptions:

  • Under the CARES Act, for purposes of getting the $500 per child, the law used the same definition for a child as you’d use for the child tax credit. The sticking point for most parents for this purpose was the age: the child must be under age 17 at the end of the tax year. That meant that taxpayers were not entitled to receive the $500 additional payment for a child above the age of 16, even if they lived with you, ate your food, spent your money and slept in your house. A change was included in the House HEROES Act and the Senate proposal to allow taxpayers with dependents of any age to receive checks.
  • As with the HEROES Act, the Senate proposal would make clear that payments should be automatic for those receiving Social Security retirement or disability benefits (SSDI), Supplemental Security Income (SSI), RRB, or VA benefits
  • The CARES Act provided that checks were generally not subject to offset except for past due child support payments. As in the HEROES Act, the Senate proposal would clarify that the checks are protected from bank garnishment or levy by private creditors or debt collectors. This protection would also be applied retroactively to the CARES Act checks (in keeping with this Senate bill) although it remains unclear how the retroactive provisions would work; as before, I assume it will only apply to any CARES stimulus checks which have not yet been paid out, as well as new checks.
  • And even though Congress didn’t include any language in the CARES prohibiting the payment of checks to decedents and prisoners – and Treasury decided to take those payments away anyway – this time, the Senate proposal did include such language. Under the Senate proposal, any decedent who died before January 1, 2020, any person in jail at the time Treasury processes the check or any individual in prison for all of 2020, may not receive a check. This language is also retroactive to the CARES Act checks.
  • One of the points of confusion under the CARES Act was whether representative payees of Social Security (SSA), Veterans Affairs (VA), and Railroad Retirement Board (RRB) benefits could accept payment. As in the HEROES Act, the Senate proposal clarifies that a representative payee may accept a check provided that the representative payee used the payment for the beneficiary.

Payroll Tax Credits & Deferrals. Employers would be allowed a payroll tax credit equal to the applicable percentage of the qualified pandemic-related employee benefit expenses. The amount allowed as a credit under the Employee Retention Credit (ERC) is 50% of wages. The Senate proposal would boost that to 65% (as compared to 80% in the HEROES Act), and the $10,000 cap for all quarters would be increased to $10,000 per quarter, with a cap of $30,000 for the year (the limit was $45,000 in the HEROES Act); phase-ins would also apply for the credit reduction. A similar credit would apply to self-employed persons, but at the other end, the credit was figured differently for employers with more than 100 full-time employees: the Senate proposal would boost that cap to 500. Under the HEROES Act and the Senate proposal, a credit would be allowable for fixed expenses. Payroll tax deferrals would be allowed for recipients of Paycheck Protection Program (PPP) loans so long as there is no double-dipping.

Work Opportunity Tax Credit (WOTC) Addition. The WOTC credit is available to employers who hire individuals from certain targeted groups who have consistently faced significant employment barriers. Those targeted groups currently are TANF recipients, qualified veterans, qualified ex-felons, designated community residents; vocational rehabilitation referrals; SNAP recipients, SSI recipients, long-term family assistance recipients, and qualified long-term unemployment recipients. The Senate proposal would add a new group: 2020 qualified COVID-19 unemployment recipients. A 2020 qualified COVID-19 unemployment recipient is defined as someone who had been receiving unemployment compensation before the hiring date and who begins work after the date the bill becomes law (if it happens), but before January 1, 2021. The Senate proposal also increases the credit amount applicable to the new targeted group to 50% of the first $10,000 of qualified first-year wages (for most target groups, the maximum wages that are eligible for WOTC credit are $6,000, and the credit is 40%).

Safe & Healthy Workplace Tax Credit. The Senate proposal would introduce a new, refundable payroll tax credit equal to 50% of an employer’s “qualified employee protection expenses” for the period beginning March 12, 2020, and through January 1, 2021. Those expenses would include COVID-19 testing, protective personal equipment (PPE), cleaning supplies, qualified workplace reconfiguration expenses (like those plexiglass shields that are popping up), and “qualified workplace technology expenses (like contactless point-of-sale (POS) systems). The expenses would be capped each quarter based on the average number of employees: $1,000 for each of the first 500 employees, plus $750 for each of the next 500 and 1000 employees, and $500 for each employee over 1,000. Self-employed persons would also qualify.

Assistance For Independent Contractors. Typically, the assistance provided to workers can be used as evidence of control (and thus risk converting an independent contractor into an employee) The Senate proposal would allow businesses to offer tax-free assistance – including financial aid and health care expenses – to independent contractors without jeopardizing that status.

Temporary Carryover For Flexible Spending Arrangements (FSAs). Mirroring relief found in the HEROES Act, the Senate proposal would allow taxpayers to carry amounts from FSAs forward into 2021. This would apply to FSAs for health care and dependent care.

State Tax Certainty. One of the concerns raised during the pandemic was how to assess state and local taxes for workers working remotely. The Senate proposal would allow employees who perform employment duties in multiple states to only be subject to income tax in their state of residence and any jurisdiction where the employee is present and performing employment duties for more than 30 days during the calendar year (90 days for frontline health-care and other workers). This provision would apply through 2024. And sorry, Phillies, this won’t apply to professional athletes, professional entertainers, qualified approved film, television or other commercial video production employees, or certain public figures.

 

PPP Expansion & Fixes Part Of Senate Stimulus Bill

In March of 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. It was bigger than the original Senate proposal but smaller than the subsequent House proposal. Eventually, the two reconciled, and the CARES Act became law.

In May of 2020, the House introduced a new COVID-19 economic relief proposal. The bill, known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, was not taken up by the Senate. At the time, Senate Majority Leader Mitch McConnell (R-KY) suggested that the timing was not right for another bill. But with just a few days to go before federal unemployment benefits run out, that appears to have changed.

You might be looking for the “HEALS Act” (Health, Economic Assistance, Liability Protection, and Schools Act) being put together under Sen. McConnell’s watch. So far, there is no single bill, but rather a series of proposals. Various committee chairs have drafted their proposals and introduced them separately on the Senate floor.

This article focuses on the Continuing Small Business Recovery and Paycheck Protection Program Act introduced by Sen. Marco Rubio (R-FL) and Sen. Susan Collins (R-ME). It’s just 92 pages long.

Here are some highlights of what the Rubio/Collins proposal, which focuses almost exclusively on the Paycheck Protection Program (PPP), includes:

Additional PPP Expenses. One of the criticisms of the PPP was that it was limited. Of course, that was also the intent (to get folks back on the payroll), but as businesses remain closed due to COVID-19, there has been a clamour to increase the pool of expenses to qualify for forgiveness. The Senate proposal would extend those expenses to pay for any software, cloud computing, human resources, payroll, billing and accounting; costs related to “property damage and vandalism or looting due to public disturbances” that occurred during 2020 not covered by insurance; supplier costs; and worker protection related to social distancing, sanitation or other safety requirements.

Lender Safe Harbor. Another concern raised in the PPP focused on those certifications. The Senate proposal clarifies that lenders may rely on loan certification or documentation submitted by borrowers. No enforcement action will be taken against a lender who, in good faith, relied on that documentation.

Covered Period For Forgiveness. Previously, the covered period time frame was fixed and inflexible. The Senate proposal would extend the covered period and allow the borrower to elect a covered period between eight weeks after origination and December 31, 2020.

PPP Second Draw Loans. Some businesses have claimed that they have exhausted their funds because they didn’t know how much they would be affected by the COVID crisis. The Senate proposal would allow the hardest-hit small business owners to receive a second PPP loan – and still qualify for forgiveness. Under the proposal, an eligible business must have 300 or fewer employees and demonstrate at least a 50% reduction in gross receipts in the first or second quarter of 2020 relative to the same quarter in 2019.

Businesses that would not qualify include publicly-traded companies, those businesses which are excluded under 13 CFR 120.110 except for those otherwise made eligible by statute or guidance, businesses in financial services which have already received a PPP loan, and entities affiliated with entities in the People’s Republic of China.

Businesses can borrow up to 2.5 times the average monthly payroll costs in the one year before the loan, up to $2 million (new businesses can figure 2.5x the sum of total monthly payments divided by the total number of months in which payments were made).

Businesses who borrow under a second PPP loan would be eligible for loan forgiveness equal to the sum of their payroll costs, mortgage, rent, utility payments, operations expenditures, property damage costs, supplier costs, and worker protection expenses incurred through 2020. The 60/40 split between payroll and non-payroll for forgiveness still applies.

And in a clear nod to complaints that small businesses didn’t get a fair shot, the Senate proposal will set aside $25 billion companies employing 10 or fewer employees. 

PPP Loan Caps, Generally. Worried about those caps moving again? The Senate proposal officially reduces the maximum amount borrowers may receive under the first round of PPP funding from $10 million to $2 million.

Ch-Ch-Changes. One of the clear frustrations about PPP loans has been continually changing – and unpredictable – guidance. The Senate proposal allows borrowers eligible for a bigger loan as a result of “any interim final rule that allows for covered loan increases” to ask for an increase even if the initial covered loan amount has been fully disbursed, or if the lender has already submitted a Form 1502 report related to the covered loan.

PPP Targets. The Senate proposal creates specific PPP loan calculations for certain farmers and ranchers, allowing lenders to recalculate previously approved loans. It would also enable Farm Credit System Institutions to make PPP loans, and it would improve terms of 7(a) loans for seasonal businesses and businesses located in small business low-income census tracts.

501(c)(6) Organizations. Section 501(c)(6) organizations are business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues, not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual. The Senate proposal would expand eligibility to include 501(c)(6) organizations – with some restrictions, generally related to size and lobbying. (And if you’re scratching your head trying to remember, yes, the National Football League (NFL) used to be a 501(c)(6) organization but gave it up in 2015.)

Lobbying Restrictions. The Senate proposal doubles down on lobbying, banning any borrower from using PPP loans for lobbying.

Conflicts of Interest. Many taxpayers weren’t happy to learn that PPP loans went to companies with ties to members of Congress and the Executive Branch. The Senate proposal would require the President, Vice President, the head of an Executive department, or a Member of Congress and their respective spouses, children, sons and daughters-in-law to make disclosures. That’s not as far as the HEROES Act would go, which would ban some kinds of related loans altogether.

And that’s a general summary of the Rubio/Collins proposal. Remember, this is just a proposal: it’s not guidance, interim, final or otherwise. Keep checking back for details.

Three Reasons Democrats Won’t Pass The HEALS Act

Senate Republicans Monday unveiled their proposal for the next round of federal coronavirus aid—the Heath, Economic Assistance, Liability Protection and Schools (HEALS) Act—but they still need to come to an agreement with Democrats on the package. Here’s where negotiations might get stuck.

First, the GOP plan doesn’t include any new federal relief funds for state and local governments—a major priority for Democrats, who proposed spending more than $1 trillion in additional state aid as part of the Heroes Act passed by the House (but rejected by the Senate) in May.

Instead, the proposal offers more flexibility in spending the $150 billion already allotted to states and municipalities by the CARES Act in March.

Second, the HEALS Act would eliminate the extra $600 per week in federal unemployment benefits, which expires at the end of the week, and replace it with a program that would subsidize 70% of workers’ lost wages; part of that plan would involve reducing the checks to $200 per week until states can make the shift. After the shift, the payment would be capped at $500 or 70%, whichever is lower.

Democrats are highly focused on maintaining comprehensive unemployment benefits during the pandemic and are concerned that overwhelmed state unemployment offices will not be able to switch over to the new plan; House Speaker Nancy Pelosi (D-Calif.) said maintaining the $600 benefits will be her starting point in negotiations with the GOP, according to the Washington Post.

Third, the HEALS Act will also include a five-year liability shield to protect businesses, healthcare providers, and schools from lawsuits brought by workers and employees related to the coronavirus.

CRUCIAL QUOTE

Senate Minority Leader Chuck Schumer (D-N.Y.) took particular issue with the GOP unemployment plan on the Senate floor on Monday, calling it “unworkable” because it would cut federal unemployment aid by 30%.

TANGENT

The HEALS Act also includes several elements Democrats generally support, including a second round of stimulus checks and more aid for small businesses through the Paycheck Protection Program.

KEY BACKGROUND

The GOP’s proposal comes after a week of tense negotiations with the Trump Administration and two months after the Democratic-led House of Representatives passed its own relief proposal, the Heroes Act, in May. With just days until Congress breaks for its August recess and several key benefits of the CARES Act on the brink of expiration, lawmakers are struggling to come to a compromise on what the next phase of federal relief should look like. Meanwhile, some 30 million people are unemployed and dependent on federal assistance.

‘Jerry Maguire’ actress Kelly Preston, wife of John Travolta, dies of breast cancer in 57

Preston’s husband, actor John Travolta, composed an emotional article on Instagram Sunday night, verifying his wife of 28 years had expired.

“It’s with an extremely heavy heart that I tell you that my wife Kelly has dropped her two-year struggle with breast cancer,” Travolta wrote. “She fought a brave fight with all the support and love of many.”

“Kelly’s life and love will always be remembered,” Travolta composed, saying he intended to take some time off” to be there for the kids who’ve lost their mom. So forgive me beforehand if you don’t hear from us for a short time. But please be aware that I will sense your outpouring of love from the months and weeks ahead as we cure.”

Ella Travolta paid tribute to her mum on Instagram.

“I’ve never met anyone as brave, powerful, beautiful, and loving as possible,” she wrote. “You have a glow and a light which never ceases to glow which makes anybody around you feel immediately pleased. Thanks for your love. Thanks for your help and thank you for creating this planet a better location. You’ve made life so amazing and I know you will keep doing so always. I adore you, mama.”

A household statement to People magazine stated that Preston had picked to maintain” she struggles private”

“She was undergoing medical care for a while, supported by her closest family and friends,” the announcement said. “She was a bright, beautiful, and loving soul who cared deeply about others who brought life to what she touched. Her family asks to your comprehension of the need for privacy at this moment.”

Preston’s final movie role was in 2018’s”Gotti,” playing Victoria Gotti, the spouse of Mafia boss John Gotti. It was a family affair since Travolta depicted John Gotti.

Back in September, Travolta and Preston celebrated 28 decades of marriage.

“Happy Anniversary for my fantastic spouse,” Travolta, 65, composed on Instagram., together with a photograph of this couple embracing.

Shortly after, Preston clarified on Instagram how much Travolta supposed to her.

“In my dearest Johnny, the wonderful person I understand,” she wrote. “You’ve given me hope when I’ve felt lost, adored me, and unconditionally… made me laugh harder than every other human being potential… shared with the most gorgeous highs and occasional lows.”