Advocacy / Coronavirus
March 23, 2020
ACEC Advocacy Team Gives Updates on the CARES Act
Over the weekend, ACEC’s advocacy department updated members on the status of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Senate is expected to continue its work considering the bill today with a vote on passage to follow. The following bill summary and analysis was posted to the Coronavirus Resource page on Sunday March 22, 2020. Visit the resource page for up-to-date news and analysis as this story develops.
3/22/20: Senate to Act on CARES Act (the Coronavirus Aid, Relief, and Economic Security Act)
Updated at 4:00PM:
The following is a summary of key the provisions of the CARES Act. Note that the business tax provisions are new, building on the refundable tax credits included in the previous assistance package (which is now law) with the goal of addressing cash flow concerns. Senate Majority Leader Mitch McConnell has indicated that he will begin floor proceedings this evening, although that will hinge on negotiations with Senate Democrats. The House also isn’t on board yet, but for now the action appears to be centered in the Senate. We will send you additional information as final language becomes available.
Read the CARES Act summary released by the Senate Majority’s office: here
Title I: Small Business Loans/Assistance
Small Business Assistance – the proposal provides for $349B in SBA 7(a) loans to be used for payroll costs and other obligations including rent, mortgage, utilities, with potential loan forgiveness based on employee retention, for firms with fewer than 500 employees.
Small Firm Federal Contracting Assistance – the agreement includes language to extend contract deadlines for small firms, exclusive of mission critical contracts, as well as language to facilitate payment for contract terms that have been delayed due to COVID-19 response measures.
Title II: Business Tax Relief Provisions
Employers and self-employed individuals can defer paying the employer share of the Social Security payroll tax (6.2%) over the following two years – half due by December 31, 2021 and the other half due by December 31, 2022.
Expanded use of net operating losses by removing the taxable income limitation and including the ability to carryback net operating losses for 5 years for corporations and non-corporate businesses (pass throughs and sole proprietors).
Temporary increase in interest deducibility for businesses from 30 percent to 50 percent for 2019 and 2020.
Title II: Health Care/Labor Provisions
Clarifies the limits on paid emergency sick leave in the Families First Coronavirus Response Act (HR 6201).
Expands the authority of the Department of Labor to exempt firms with fewer than 50 employees from the paid leave requirements in HR 6201.
Allows employers and the self-employed to receive an advance tax credit from Treasury for emergency paid leave and sick leave under HR 6201instead of having to be reimbursed on the back end.
Title IV: Economic Stabilization
Establishes $500 billion Treasury Department program of loans, loan guarantees, and other financial investments for distressed industries.
$50 billion for passenger airlines
$8 billion for cargo airlines
$17 billion for businesses essential to national security
$425 billion for the Federal Reserve to bolster liquidity in the financial system to support lending to continue operations of businesses in jeopardy.
Suspends federal aviation taxes.
The Senate has released the bill language for the latest COVID-19 response package, the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act)
The CARES Act includes the five elements listed below:
Small business retention loans that would give employers additional cash flow coverage to keep workers on the payroll.
A one-time cash payment to families, with an average check of about $3,000 for a family of four.
Enhanced unemployment insurance benefits for those who lose jobs as a result of the coronavirus.
A “broad-based lending program” through the Federal Reserve that would leverage up to $4 trillion in liquidity to help businesses big and small “get through the next 90 to 120 days as we win this war.”
New money for hospitals and other medical facilities that could amount to about $110 billion.
ACEC National is reviewing the legislation and will provide updates as more news becomes available. Please note – these updates are based on the best information available at the moment. If details of the legislation need to be changed as the story develops, we will note that in our coverage.
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