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Revised HEROES Act Bill: Key Provisions for Nonprofits

by Sarah Skillin Woodard
After weeks of doubt that Congress would pass a relief bill this fall, there is some new momentum; the revised text of the House’s $2.2 Trillion COVID relief bill (The Heroes Act) was released last night and negotiations are underway this week. Our preliminary analysis of key provisions for nonprofits are below.
Virtual Press Conference: Friday, October 2nd at 10am. Federal relief dollars are urgently needed by Maine’s vital nonprofit sector, which is a cornerstone of both the economy and quality of life in our state and critical to how our communities survive and thrive after the pandemic. MANP and fellow nonprofit colleagues will highlight how crucial more federal relief dollars are to our sector and urge federal and state lawmakers to enact legislation that will support our work. The virtual press conference will be streamed live on YouTube here! To learn more, reach out to Sarah Skillin Woodard.

Key Provisions

Paycheck Protection Program (PPP)

  • Set Aside for Nonprofits: The bill sets aside 30% of loans for any and all nonprofits to receive first-time PPP loans.
  • Large 501(c)(3) nonprofits: Nonprofits with more than 500 employees could apply for PPP loans, but must show quarterly revenues losses of at least 25 %. Elsewhere, the bill would require the Federal Reserve to create a low-cost, but non-forgivable loan option tailored to the unique needs of nonprofit organizations, including ability to defer payments without capitalization of interest.
  • PPP Loan Forgiveness: Streamlines the loan forgiveness process. Borrowers with loans of less than $50,000 would only be required to certify to the SBA that it followed the requirements of the loan and retain documentation in the event of an audit. Borrowers with loans of between $50,000 and $150,000 would only be required to certify to their lenders that they complied with the terms of their loan using a simplified application. Loans of more than $150,000 would follow the existing procedures.
  • Second Round PPP Loans: Permits loans of up to $2 million to employers with less than 200 employees that can demonstrate quarterly revenues losses of at least 25%

Unemployment Relief for Nonprofits

  • State Loans: Extends for six months the moratorium on interest charged on loans taken out by states. The summary states, “the interest-free loans allow them to maintain sufficient trust fund balances to avoid triggering additional automatic employer tax increases.”
  • Reimbursing Employers: Extends for six months the 50% federal coverage of the costs of self-insured employers, but does not increase the coverage to 100% as sought by the nonprofit community.

Census Bureau

  • $410 million total appropriation
  • Extend the statutory reporting period and requirement that counting operations continue through Oct. 31

State and Local

  • States + DC – $238 billion, based on the number of unemployed workers
  • Local – $179 billion, split between municipalities and counties
  • Coronavirus Relief Fund – expands use for lost, delayed, or decreased revenue stemming from COVID and extends deadline for expenditure to Dec. 31, 2021.

Employee Retention Tax Credit (ERTC)

  • The bill would significantly expand the ERTC by raising the credit from 50% to 80% of wages, modify the phase in of the value of the credit beginning at reduced gross receipts of 10%, increase the value of the credit from $10,000/year to $15,000/quarter per employee for to 3 quarters, and expand the number of employees to which the credit applies, among other changes.

Take Action

You can make a difference today by encouraging our elected officials in Washington to pass the HEROES Act and sharing your story of how the pandemic has affected your work. For contact information, please visit this website.

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