This week’s Legislative Update is sponsored by:
April 3, 2020
No one likes to be told “hurry up and wait”, especially during a crisis, however, that is exactly what everyone had to tell themselves at the start of this week. One particularly powerful legislator lamented on a Monday morning call, “we could be doing things today that might mean nothing by Friday.” With hundreds of pages of legislation passed in the past two weeks triggering thousands of pages of regulations, some not even finalized, legislators and your chamber’s staff have a lot to digest and direct.
Legislators and administration officials need to balance acting quickly with ensuring the federal government pays for that action, or risk relief dollars being clawed back. There has been a great deal of overlapping legislation affecting employers in the last month, and to help make sense of it all, we’ve created this table.
This week saw a record of 6.64 million people on unemployment nationwide and the Vermont Department of Labor estimates that as many as 50,000 Vermonters filed claims in the last two weeks, with more expected.
In this week’s legislative update:
- SBA loan programs off to a rocky start
- Our comprehensive overview of the last 30-days of legislation
- Recordings of this week’s webinars on federal legislation
- Governor Scott orders lodging establishments to halt online reservations
- Legislation creating a moratorium on evictions
- Laundry List
CARES Act SBA Loans See Rocky Rollout
Applications for the Paycheck Protection Program are now live – so hurry to your SBA approved lender. The U.S. Department of Treasury was responsible for issuing rules for SBA lenders and borrowers, however, so far it was late to finalize them. What guidance the Department has given so far has created a great deal of confusion. The way Paycheck Protection Program loans work is that a bank will float the loan to the borrower, front-ending the money, and then SBA will apply it to the federally allocated money, however, current regulations may result in banks needing to borrow money at an interest rate greater than what the loan has.
The program started getting rolled out last night and as of this morning over $400 million has already been requested. There are worries that the $350 billion allocated to the PPP is an estimated 5% of the need in the country, so there is a great deal of anxiety about over-subscription to this program.
The good news is that SBA should have more capacity soon. They have outsourced their website to Rocket Mortgage and increased customer service using Marriott call centers for basic questions (24/7 now) and will be using FEMA to help with more specific questions (8 am to 8 pm). An important note, if you already applied for an EIDL loan, you will need to re-apply to get the up to $10,000 cash advance. Businesses will not lose their place in line.
LCRCC will be advocating to our congressional delegation that we need to have another stabilization package before Congress plans to meet again on April 20th.
LCRCC Hosts Webinars with Congressional Delegation and PF+C to Provide Clarity to Members
On Monday LCRCC hosted today a webinar with Congressman Peter Welch as well as staff from the offices of Senators Leahy and Sanders, to discuss recent federal legislation aimed at helping small businesses. You can find a recording of that webinar here.
On Thursday, LCRCC hosted a webinar with the law firm Paul, Frank, and Collins to help break down legislation passed in the last month and the new financial tools created for businesses to handle this crisis. You can find a recording of that webinar here.
Governor Scott signed an addendum to his Executive Order
On Monday, Governor Phil Scott signed an addendum to his original Executive Order to further restrict lodging establishments to take down their online reservation systems. The order was intended to prevent “non-essential” guests from booking with hotels during the state of emergency and funnel any potential guests only to the lodging establishment’s phone system to be triaged. LCRCC has been in communication with the Administration to convey that, while that is an understandable action, lodging establishments do have the ability to block out reservations for dates falling within this state of emergency in their online reservations systems and nothing should prevent them from allowing guests to book stays far off in the future.
LCRCC sent a letter with partner organizations today asking the Scott administration to allow future bookings after June 1st.
Unemployment or Continued Payroll?
With so much massive legislation passed in such a short amount of time, it’s not surprising that policy is in conflict. Much of the federal legislation is based on the premise that if employers maintain their payroll, it would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. However, some people were going to have to go on unemployment, and a large portion of the electorate in D.C. was going to make that as lucrative as possible. It would have been a difficult balance to strike in normal times and, needless to say, it wasn’t struck last week.
Unemployment benefits are incredibly lucrative until July 31st with the addition of $600 on top of the state benefit a person receives. Many problems stem from this; we covered last week how the confluence of expanding UI eligibility and the extra benefit might incentivize workers in essential businesses to leave the workforce. LCRCC is aware of the potential issues resulting from the combination of unprecedented changes to unemployment law made at the federal and state level. It is important to note that the Vermont legislature passed H.742 prior to the finalization of the CARES Act at the Federal level. LCRCC has raised these potential issues since they were created.
- LCRCC raised these concerns with the Governor’s before his signing of H.742 and is continuing to relay our concerns.
- LCRCC will be advocating that the guidance created by the VT Department of Labor address the concerns of our employers, especially our “essential” employers whose ability to serve essential needs could be compromised.
- LCRCC is raising these concerns with legislators as there may be a need for potential legislative fixes.
- We ask that you share your concern with your legislators and the Governor’s office as well.
Another potential quandary for many employers and employees alike is, “which path do I take?” Should I lay off my employees to take these supreme benefits or do I utilize the tools laid out in recent federal legislation to keep people on my payroll? The answer is really not clear and will be different for each employer’s needs, employee’s salary levels, the benefits packages offered, how much the business is still able to operate, and if the business is essential.
Legislation Creating Moratorium on Evictions Moving
The Senate Committee on Economic Development, Housing, and General Affairs hoped to pass a bill this week that would institute a moratorium on evictions during the COVID-19 state of emergency, however, it looks like it will need to wait until Monday. The House Committee on General, Housing, and Military Affairs is looking at similar language.
The moratorium would apply to individuals who are unable to work because of their own illness, illness of a member of his or her household, isolation required by his or her employer, isolation required by State or local government authorities or isolation required by his or her primary care provider or another health official. The moratorium would stay in effect through the state of emergency declared by the Governor arising from the spread of COVID-19 and until 60 days after the Governor terminates the state of emergency and shall apply to any individual. The order would apply to rental properties as well as housing lenders and utility companies provided the occupant provides notice.
The committee has an interest in addressing commercial leases, however, it does not feel it has enough information at this time to get it in this bill in a timely manner, suggesting they will follow up with another piece of legislation in the near future. Please reach out to our team.
This bill would also appropriate an uncertain amount of money from the General Fund to the Department of Children and Families for emergency housing-related assistance. The House bill would appropriate $5 million while the Senate is unlikely to be prescriptive with the dollar amount.
Finally, the bill seeks to broaden unpaid Family and Medical Leave during the state of emergency to provide job protection. LCRCC is monitoring the situation to ensure that changes do not run afoul of the federally passed Families First Coronavirus Response Act in a way that would prevent a federal clawback or employers not being eligible for the associated tax credits for paid leave or sick time.
Our Comprehensive Overview of the Last 30-Days of Legislation
Last Updated April 2, 2020 at 5:07 PM. You can find a PDF of this summary here.
Below is a summary of recent federal and state legislation in response to the COVID-19 pandemic. This summary is primarily focused on items relevant to the finances of businesses and individuals. Items that will be of help to individuals are highlighted in green, to businesses are highlighted in blue, and to state finances in grey.
The information contained in this graphic is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
The Laundry List
The Agency of Commerce and Community Development rolled out a very comprehensive resource center with information specific to businesses, individuals, and communities. It can be found here.
The Vermont Department of Housing and Community Development will host a virtual public hearing on April 13, 2020, from 3:00 pm – 4:00 pm to gather comments on the COVID-19 recovery needs of communities, and how federal Community Development Block Grants may help respond to those needs. The federal CARES Act includes $5 billion in funding for these grants and Vermont’s share will result in more than $4.7 million to assist communities across the state recover from COVID-19. Please register here to participate in the virtual Public Hearing.
The legislature has pulled together a Joint Small Business Solutions Committee to help navigate the layers of programs and requirements small businesses are faced with to respond to COVID-19. Members of the committee are Rep. Michael Marcotte (Co-Chair), Sen. Michael Sirotkin (Co-Chair), Sen. Randy Brock, Sen. Alison Clarkson, Rep. Stephanie Jerome, and Rep. Charlie Kimbell.
If you have not visited it yet, LCRCC has a COVID-19 resource page here.
Concerned or need to learn more about anything in this newsletter? Email our team at [email protected].
We look forward to working with you this session.
The Lake Champlain Regional Chamber of Commerce Advocacy Team