Earlier this week, Senate Republicans introduced the $1 trillion Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, a new coronavirus stimulus package covering small business loans, unemployment insurance, and liability protections. The bill follows the June passage of the House of Representative’s $3 trillion HEROES Act, requiring Senate and House leaders to find a great deal of compromise. Below are some of the key provisions from the Senate bill:
The SAFE TO WORK Act establishes a 5-year liability shield to businesses, schools, colleges and universities, religious, philanthropic and other nonprofit institutions, and local government agencies from being sued over coronavirus-related issues, while also ensuring that those who contract coronavirus because of the gross negligence of others can recover for their injuries. It also protects health care providers from coronavirus-based claims, grants temporary labor and employment law protections, and clarifies already-existing products-liability protections.
Senate Majority Leader McConnell has stated that removing this language will not be considered in negotiation, though President Trump stated today that he seemed open to it.
Paycheck Protection Program
Senators Marco Rubio and Susan Collins introduced measures to improve the program introduced in the CARES Act including additional eligible expenses covered, simplifying the application and creating a second loan from which eligible businesses may draw. The Chamber was very pleased to see that 501c6 and destination marketing organizations with fewer than 300 employees are deemed eligible to apply for the program, allowing our non-profits to continue offering services to our communities.
Direct Economic Payments to Individuals
The HEALS act uses the same formula in the CARES Act to determine the economic impact payment amount each individual and or family will receive. The bill provides $1200 to individuals and heads of household making under $75,000 and $2400 for those married couples making under $150,000 and who file under married filing jointly. Economic impact payments will phase out at 5% per dollar of qualified income above $75,000 for single individuals, $112,500 for heads of households and $150,000 for married filing jointly. In addition, the bill expands the additional $500 payment to dependents beyond the age of 17.
Reduced Unemployment Benefits
The CARES Act offered unemployment benefits of $600 a week to those impacted by the pandemic, which are set to expire on July 31. The HEALS Act would reduce that to $200 a week of federal unemployment benefits through September of 2020.
Beginning in October, the $200 payment would be replaced with a payment up to $500 per week to match 70% of lost wages when added to state benefits. The bill also includes $2 billion to help states upgrade their Unemployment Insurance systems to deal with a possible surge in claims.
Employee Retention Tax Credit (ERTC)
The HEALS act provides a 65% refundable payroll tax credit (a 15% increase) on certain wages paid by employers to employees during the pandemic. Gross receipts threshold required to qualify would be reduced from 50% to 25% compared to the same calendar quarter in the previous year. In addition, the amount of wages employers can claim under the ERTC has increased from $10,000 per year to $30,000 per year but limited to $10,000 per quarter.
New Refundable Payroll Tax Credit for Coronavirus Expenses
The HEALS Act includes a new refundable payroll tax credit equal to 50% of an employer’s qualified employee protection expenses after March 12, 2020, and before January 1, 2021. Eligible expenses include PPE, coronavirus testing, and cleaning supplies. For the first 500 employees, qualified expenses are $1000 for each employee, $750 for each employee between 500 and 1,000, and $500 for each employee beyond 1,000.
Full Deduction for Business Meals
The HEALS Act allows a full deduction for business meals through December 31, 2020 to help incentivize people to purchase meals at restaurants.
Federal Funding for Schools
The HEALS Act includes $105 billion in emergency appropriations to help schools open safely this fall. Of the $105 billion, $70 billion is for K-12 Schools, $29 billion for higher education institutions and $5 billion for governors to distribute at their discretion.
Aid to State and Local Governments
The HEALS Act does not include any additional federal relief to state and local governments. The bill does allow local governments and states to use the remaining $150 million approved in the CARES Act with more flexibility. Local governments can use the funding to help cover budget shortfalls caused by the pandemic.
Your San Antonio Chamber of Commerce has already begun analyzing the bill and identifying key provisions that are important to our 1,850 business members. In coordination with our members, we will formulate a legislative strategy on this fourth stimulus package which we will share with our federal delegation.
If you have any questions about the HEALS Act, contact Martin Gutierrez, Assistant Vice President of Public Policy, by email at email@example.com or Belinda Garza Hartwig, Vice President of Economic Development at firstname.lastname@example.org.