Finally, we have some federal relief after 8-months of negotiations. Not as much as anyone would have liked, not enough to help businesses that have already suffered unrecoverable loss, and likely not enough to ensure an economic rebound, however, it is here.
- State and Local Aid
- Business Relief
- Unemployment Insurance, Direct Payments, and EITC
- Testing, Tracing, and Vaccine Distribution
- Housing Assistance
- Education and Childcare
- Infrastructure, Transportation, and Energy
- Nutrition Assistance
We will update this document periodically as we learn more about what Vermont will receive due to each specific provision.
State and Local Aid
- The deal does not give states any more relief such as we experienced under the CARES Act besides additional dollars funneled through existing state programs or those sent to the state with specific coronavirus mitigating purposes as you will see in the sections on nutritional assistance, housing, testing, and education. It is estimated at this time that the cumulative impact of all that aid will be upwards of $1.4 billion allocated to Vermont (see here a VT JFO breakdown of estimates).
- The deal DOES give state and local governments an additional year to spend the $139 billion appropriated under the CARES Act. This will be of great help to Vermont, as the state has projects deploying the $1.25 billion appropriated to the state by CARES that would have had to stop ahead of the new year. See what is left of VT’s CRF funds here.
- The agreement revives and modifies the Paycheck Protection Program with $284 billion in funds;
- New loans terms – borrowers will need to show a 25% loss in revenue in one quarter capped at $2 million (notably down from $10 million in the first round).
- Set aside for businesses with 10 or fewer employees – for first-time borrowers $15 billion set aside and for the second draw there is $25 billion.
- Businesses under NAICS code 72 (accommodations and food service) are eligible for an increased loan amount, 3.5x average monthly payroll cost.
- PPP Second Draw – Businesses that already received a PPP loan will be eligible to get a second one under the new terms businesses will need to show a 25% loss in revenue in one quarter capped at $2 million (notably down from $10 million in the first round) and under 300 employees.
- Seasonal employers may calculate their maximum loan amount based on a 12-week period beginning Feb. 15, 2019, through Feb. 15, 2020.
- Adds PPE expenses, costs associated with outdoor dining, and supplier costs as eligible and forgivable expenses;
- PPP loans that are forgiven will be deductible – As stated in the bill “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph”
- Application for PPP Loan Forgiveness – loans under $150,000 from the first round, the submission will be as simple as a one-page application for forgiveness, however, all of the same rules apply. Despite this news, it is recommended that those looking for forgiveness fill out the long application before actually submitting the short application and keep the longer application with answers on file in case of a future audit. Loans between $150,000 and $2,000,000 have some criteria changes.
- EIDL Advance Grant and PPP interaction – repeal of the CARES Act provision which requires PPP borrowers to deduct their EIDL advance from the PPP loan forgiveness amount.
- $15 billion in dedicated funding for grants of up to $10 million to live venues, independent movie theaters, and cultural institutions administered through SBA. Grants can be used to cover expenses such as payroll costs, rent, utilities, and personal protective equipment. Two priority periods are established to ensure the hardest hit entities have dedicated access to assistance for the first 28 days of the program, while a reserve fund is made available to ensure that entities that are ineligible for the priority periods are able to receive assistance following the two 14-day priority periods. A set-aside of $2 billion is also reserved for entities with 50 or fewer employees. The program is authorized to make supplemental grants equal to 50% of the initial grant.
- $20 billion for new Economic Injury Disaster Loan Advance Grants for any small businesses or non-profits that received the advance previously are eligible to receive the difference between what they already received and $10,000 if they are in an area that is designated low income (this will likely follow the methodology of New Market Tax Credits – see a map of VT NMTC zones here).
- Debt Relief for 7(a) borrowers – the deal has $3.5 billion for principal and interest payments of new and existing borrowers for one year.
- The employee retention tax credit, a payroll tax credit created under CARES to encourage businesses to hold on to their workers, that was set to expire at the end of this year, was extended and increased from 50% to 70%. The bill clarifies that employers who receive PPP are still eligible for wages not paid for by the forgiven loan.
- Extended Support for Paid Sick Leave from FFCRA – As a result of a great deal of advocacy by organizations such as the Lake Chamber around issues of inadvertent triggers of FFCRA leave, it is no longer mandatory. However, the tax credit for employers offering paid sick leave under the Families First Coronavirus Response Act framework is extended through March 31, 2021. The benefit is also extended to self-employed employees.
Unemployment Insurance, Direct Payments, and EITC
- This deal includes $166 billion for another round of direct payments of $600 per adult and child to those making under $75,000 a year. Couples filing jointly making under $150,000 will be eligible for $1,200 and $600 per child. There are changes for this round to make them more accessible for immigrant families. These payments could be processed much faster than last time; as early as next week. This will inject about $306 million into Vermont households.
- If eligible individuals were unable to receive their first or second economic impact payment they can claim it when they file their 2020 taxes.
- The agreement stands back up (with $120 billion) a few expiring CARES Act programs relating to unemployment insurance which will collectively deliver about $470 million in benefits to Vermonters;
- Pandemic Unemployment Assistance – the program that made benefits available to the self-employed, sole-proprietors, and gig-economy workers. The number of eligible weeks is extended from 39 to 50;
- Pandemic Emergency Unemployment Compensation (PEUC) – the program which provided additional weeks of benefits was extended for 11-weeks (through March 14).
- Those on UI will receive an additional $300 enhancement on their benefits through the Federal Pandemic Unemployment Compensation (FPUC). Workers who rely on multiple jobs, one of which is self-employment, and have lost income will also be eligible for a weekly $100 boost.
- It will likely take 3-weeks for the Vermont DOL to stand up these changes and get people who fell off benefits back on them. More information can be found on the Department of Labor website.
- Recipients of the child tax credit and earned-income tax credit can qualify via a special “lookback” for the 2020 credits based on their 2019 incomes, if that is better for them, so that they may avoid a situation in which the decline in income shrinks a low-income household’s tax credits.
Testing, Tracing, and Vaccine Distribution
- The agreement includes $20 billion for the purchase of vaccines, $9 billion for vaccine distribution, $20 billion in extra federal relief for health-care providers, $20 billion for states to conduct testing, tracing, and other mitigation measures. Vermont will see about $211 million of this allocation.
- Extension of the eviction moratorium that is set to expire at the end of the year through the end of January.
- $25 billion for rental assistance to families facing eviction with similar language to the compromise $908 billion relief proposal. Vermont is expected to receive about $200 million in rental assistance.
- Includes an enhancement of the Low Income Housing Tax Credit to increase the supply for affordable housing construction.
Education and Childcare
- $10 billion for childcare assistance aimed at getting parents back into the workforce through Community Development Block Grants, of which Vermont will receive $4.4 million.
- $82 billion (VT’s share will be about $157 million) for colleges (VT to receive $39 million) and schools for assistance in re-opening and mitigation efforts, including HVAC repair and replacement.
- Expansion of Pell Grants to allow 500,000 people to become new recipients of the grants and 1.5 million students to get the maximum benefit.
Infrastructure, Transportation, and Energy
- $7 billion for broadband access with $300 billion for rural buildout. The legislation also includes an Emergency Broadband Benefit of $50 a month targeted at students and low-income families.
- $45 billion for transportation; state highways ($10 billion, of which VT will receive $50 million it can use to cover shortfalls in the T-fund), Amtrak $1 billion), airports ($2 billion, of which VT will receive $3.9 million), struggling transit agencies ($14 billion, of which Vermont will receive $29 million), and airlines ($16 billion).
- Delay of the phaseout schedule for the renewable and investment tax credits, with the PTC extended for one year and the ITC extended for two years.
- The package includes nearly $35.2 billion in research and development spending authorizations over the next decade in a clean energy innovation bill.
- $13 billion to Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps and referred to in Vermont as 3SquaresVT) for a 15% increase in SNAP benefits, however, does not expand eligibility for the program.
- Language requires the secretary of Agriculture to provide reports on participation rates and unspent funding balances.
Register Today – LCC Legislative Breakfast Series
Register Today for the LCC legislative Breakfast series. We look forward to providing you with virtual access to the decision-makers in Vermont.
- Monday, January 25, 2021 – 7:30 a.m. to 9:00 a.m.
- Monday, March 15th, 2021 – 7:30 a.m. to 9:00 a.m.
Thank you to our 2021 Legislative Breakfast Series Sponsor: