The COVID-19 Relief Bill is Expected to Become Law

The bill, known as the American Rescue Plan Act, H.R. 1316, was sent back to the House of Representatives due to Senate changes made to the legislation, originally approved by the House. After some debate, the House passed the bill on Wednesday, March 10, 2021. President Joe Biden is expected to sign the bill into law on Friday, March 12, 2021, days before the important unemployment aid programs expire on Sunday, March 14, 2021.

The American Rescue Plan Act of 2021 is the latest stimulus package to be considered by Congress during the COVID-19 pandemic and follows in the wake of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and the $900 billion stimulus included in the Consolidated Appropriates Act of 2021, which passed in December 2020. The act extends some aspects of those bills while also creating new recovery stratagems.

The Senate bill does not change most of the tax provisions in the House bill. Under the Senate bill eligibility for the recovery, however, rebate credits (to be paid to most taxpayers in advance as economic impact payments) would phase out more quickly than it did in the two previous rounds. For single taxpayers, the phaseout would begin at an adjusted gross income of $75,000 and, for married taxpayers who file jointly, the phaseout would begin at an adjusted gross income of $150,000.

In addition, the bill provides financial support for COVID-19 vaccines and testing, aid to state and local governments, help for schools and the airline industry and subsidies for health insurance. Unemployment benefits of $300 per week would be extended through September 6, 2021. The current moratoriums on evictions and foreclosures, which end March 31st, would likely not change under the plan, but additional funding would provide relief to those behind on mortgage, rent and utility bills. The legislation includes $30 billion in emergency rental assistance and $10 billion for mortgage assistance.

The American Result Plan Act also sets forth a new program for restaurants and bars, allocating $25 billion in pandemic assistance grants. The grants can provide up to $10 million per company with a limit of $5 million per physical location to be used to cover payroll, rent, utilities and other expenses. The Paycheck Protection Program would receive an additional $7.25 billion and more non-profits now would be allowed to apply for forgivable loans to help cover payroll and other operating expenses.

Notable for employers, this bill does not extend the employer obligation to provide paid leave. Instead, the legislation merely extends the tax credit for voluntary provision of leave through September 30, 2021, and makes related changes, including the following:

• Extends the tax credits available for employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021.
• Provides that the tax credits available for paid sick leave and paid family leave provided for the additional following qualifying reasons:
  • The employee is obtaining immunization (vaccination) related to COVID-19; or
  • The employee is recovering from any injury, disability, illness or condition related to such vaccination.
• Adds non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees or employees on the basis of tenure with the employer. This provision appears designed to compel employers who make the decision to voluntarily provide leave to do so in a uniform manner, without discriminating against certain categories of workers. In essence, such a provision would add to the list of potential damages and financial risk to a company when making decisions related to their employees.

The bill includes $15 billion for the Targeted Economic Injury Disaster Loan (EIDL) Advance program designed to provide economic relief to businesses that currently are experiencing a temporary loss of revenue due to COVID-19. Like the PPP, the EIDL program is administered through the SBA to help qualifying businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. The bill directs the SBA to make any remaining funding available for supplemental grants to “severely impacted” small businesses that have suffered a loss of at least 50%; are located in a low-income census tract as defined by section 45D(e) of the Internal Revenue Code and have 10 employees or fewer.

The relief bill further includes an additional $1.25 billion for the Shuttered Venue Operators Grant (SVOG) program, which had previously appropriated $15 billion in the December 2020 stimulus package. Eligible entities for the SVOG include live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators and talent representatives.

The Coronavirus Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the COVID-19 situation develops.

Author Lee Moylan is a partner in the litigation department at Klehr Harrison.