Senate Republicans Introduce HEALS Act for Coronavirus Pandemic Relief
On Monday, Senate Majority Leader Mitch McConnell (R-KY) announced the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, backed by Senate Republicans as their proposed follow-up relief legislation to the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted on March 27th. Majority Leader McConnell’s news release provides insights on how he plans to message and negotiate in the coming days.
This chart from National Council of Nonprofits compares the Senate’s $1 trillion HEALS Act with the House-passed $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) the House passed on May 15 as they relate to policy priorities of the charitable nonprofit community. Neither bill is expected to be enacted in its original form. All provisions are subject to ongoing negotiations and should not be considered final until a relief bill is enacted.
Following are more details about the HEALS Act and MANP will continue to keep Maine’s nonprofit sector aware of the status of this next federal relief and recovery package.
Appropriations: The spending plan calls for $300 billion in new appropriations, $235 billion of which would go to health and education programs. $105 billion in new federal spending on education, including $70 billion for K-12 schools, $29 billion for colleges, $1 billion for the Bureau of Indian Education and outlying areas, as well as $5 billion for governors to spend on education. Two-thirds would be available only to help schools with additional costs of reopening for in-person instruction. Summary; Bill Text.
Liability Protections: The bill would temporarily limit liability for personal injuries arising from alleged COVID-19 exposure at a school, college, nonprofit, church, or business. In order to qualify, entities must (1) have made reasonable efforts to comply with applicable public health guidelines, and (2) not engage in willful misconduct or grossly negligent behavior. Summary; Bill Text.
Tax Provisions: The bill would extend but reduce unemployment benefits; provide another round of checks to residents with income up to $75,000 ($150,000/couple) and dependents; temporarily extend the Work Opportunity Tax Credit; and extend the time period and expand uses of Coronavirus Relief Fund resources made available to state and local governments under the CARES Act. Summary; Bill Text
Unemployment: 75% federal coverage of unemployment costs of self-insured employers (up from 50%) [Sec. 102]
Expanded Employee Retention Tax Credit [Sec. 211]: Similar to the HEROES Act, the bill would increase the CARES Act refundable payroll tax credit to 65% of wages (up from 50%) of up to $10,000 per quarter (currently per year), meaning the value per employee would be $19,500 rather $5,000 under current law. The bill also would allow employers to claim the credit for every employee up to 500 workers (current law cap is 100 employees). Regarding eligibility, the bill would lower the amount of the decline in gross receipts required to qualify as an eligible employer from a 50- percent decline to a 25-percent decline compared to the same calendar quarter in the previous year.
Safe and Healthy Workplace Tax Credit [Sec. 213]: Would create a refundable payroll tax credit to reduce the costs incurred for COVID-19 testing, personal protective equipment (PPE), disinfecting, extra cleaning, and reconfiguring workspaces. The credit would apply at a rate of 50%, capped at $1,000 per employee (up to 500 employees), $750 (between 501 and 1,000 employees), and $500 (more than 1,000 employees). The credit could be applied retroactively to qualified expenses going back to March and forward through December.
Small Business Provisions:
- PPP Improvements: The bill would expand the types of expenses that are forgivable [Sec. 101], give borrowers the choice of which eight-week period to use for seeking forgiveness [Sec. 103], ease the application process [Sec. 104], and ensure that group insurance costs count as payroll costs for forgiveness purposes [Sec. 105].
- PPP Second Draw Loans [Sec. 106]: Allows borrowers a second round of a PPP loan, so long as the nonprofit has 300 or fewer employees and experienced reduced gross receipts in the first or second quarter of 2020 compared to the same quarter of 2019. Loans would again be based on 2.5 times average monthly payroll, but would be capped at $2 million. Borrowers that received more than that amount in the first round would not be eligible for a second draw. [Sec. 107]
- Other Provisions: Would expand access to loans to 501(c)(6) organizations [Sec. 113] and provide that PPP loan proceeds cannot be used for lobbying [Sec. 114]
- Appropriations: The bill calls for rescinding $100 billion previously authorized under the CARES Act and authorizes $190 billion for the PPP and the PPP Second Draw Loans.