COVID-19 UPDATE 8
The U.S. Senate passed the 3
rd
round of COVID-190 legislation titled the “Coronavirus Aid, Relief, and Economic Security” (CARES) Act. The $2 trillion legislation provides support to individuals, small businesses and sectors of the economy. The CARES Act mostly provides for direct payments to individuals and families in need due to the epidemic. For businesses, the measure provides $330 billion in supplemental federal spending and loan/grant support. Nearly a third of this amount is directed toward hospitals and other health care-related needs, while two-thirds is assistance for economically distressed industries and small businesses. Contained in the measure is that
NJ Transit will receive $1 billion from the Transit Infrastructure capital grant program!
Below is a general breakdown of the parts of the legislation that pertain to the business community.
Aid for Distressed Businesses
- Boosts the Small Business Administration Disaster Loan Program by $349 million to help businesses avert layoffs and meet payroll obligations.
- Those with fewer than 500 employees are eligible to apply.
- Loans may be used for employee salaries, paid or family medical leave, insurance premiums, mortgages, rent and utilities.
- Loans will be forgiven if payrolls are maintained.
- Waives withdrawal penalties for early withdrawals from retirement plans.
- Provides flexibility for loans from retirement plans for coronavirus-related expenditures.
- Provides a refundable payroll tax credit for up to 50 percent of wages paid by employers to employees who faced fully or partially suspended operations due to COVID-19 or if gross receipts declined more than 50 percent in comparison to prior years.
- Defers payment on employer payroll taxes with half due by Dec. 31, 2021 and the remainder due Dec. 31, 2022.
Transit
$25 billion for Transit Infrastructure Grants to support operations and capital expenses using existing Federal Transit Administration formulas. (
NEW JERSEY to receive $1 billion
)
- $1.018 billion for the national Amtrak network.
- $492 million in grants for the Northeast Corridor
- $526 million in National Network grants.
Airlines and Airports
- $9.4 billion for commercial airports to use for operating expenses to help offset the impacts of the coronavirus downturn in airport business.
- $100 million in aid for general aviation airports.
- $500 million to help airports meet their non-federal share requirements for their FY 2020 Airport Improvement Program capital investment grants.
Harbor Maintenance Trust Fund
- Budgetary provision that would deem future expenditures from the Harbor Maintenance Trust Fund (HMTF), up to the level of the previous year’s collected revenue, as “off-budget” or “mandatory” spending. This would ensure all future HMTF user fee revenues are invested in port, harbor, and waterway infrastructure improvements in a timely manner
The U.S. House is expected to move the bill tomorrow. Once the legislation is signed by President Trump, UTCA will provide a detailed analysis of all the different loan and grant assistance programs, with specific details on eligibility criteria, to our member firms.
If you have any questions concerning this notice, please contact the UTCA office at 732 292-4300.
