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News & Press: National Restaurant Association

CARES Deal Reached – Summary and Industry Impact

Thursday, March 26, 2020   (0 Comments)
Posted by: Lenza Jolley
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UPDATE: Friday, March 27, 2020

 

House Vote Timing in Flux House Republicans and Democrats had an agreement to allow for a voice vote on the Phase III recovery package tomorrow (Friday) morning. It appears that one Member of Congress is adamant in wanting to vote against the measure and insisting that the House cast a formal vote. There is now a scramble to ensure that at least 218 members can be present to cast their vote in support. This does not change the outcome, but it might change the timing. We still expect passage and signature tomorrow. But I would suggest some social distancing from your Representative if you see them back home for at least two weeks…

 

National Restaurant Association Shout-Out at Trump Presser Earlier today, I briefed a newspaper reporter about the economic impact on our industry and suggested some questions he might consider posing to President Trump during the White House press conference today. We are pleased to report the reporter followed through! A video of the White House exchange can be found here. (Hat tip: The reporter is a college friend Mike Whatley).

 

Upcoming Webinars:  

  • Tomorrow, we will host our first webinar on the Phase III legislation and its impact on restaurant owners. Presenting will be me, Shannon Meade, and Aaron Frazier from the Public Affairs team. We will do Q&A at the close.  
    • Friday, March 27, 3:00pm ET. Click here to register.  
    • Before you participate, I strongly urge you to review our formal analysis of the bill (attached).
  • Next Tuesday, we will host our second webinar on the Phase III legislation with a senior SBA official. We will do Q&A at the close.
    • Tuesday, March 31, 3:00pm ET. Registration link will be shared later.
  • A webinar on the Paid Sick Leave Mandate (Covid Phase II) is in the works. Details to come.

 

Friday Evening – Wine and Whine with Sean:  For those wrapping up a long week with a quiet evening and a nice glass of wine, I am happy to note that yours truly will be appearing live on C-Span to discuss coronavirus and the challenges to our industry. Feel free to call in to offer your enthusiastic support of restaurant recovery legislation…or to question the interior decorating choices of my living room. 8:00pm ET, Friday, March 27.

 

__________

 

Congressional leaders finally released the final text of their $2 trillion coronavirus rescue package. The agreement includes a dramatic expansion of unemployment insurance, a rescue fund for state and local governments, immediate cash for hospitals, and a huge pool of grants and loans for small businesses.

 

Passage in both chambers is all but assured – the only question is one of timing. The Senate is on a path to pass the bill this evening. Timing of a House bill remains murky. A vote Thursday night or Friday morning is likely. President Trump is likely to sign the bill very soon thereafter.

 

Our formal assessment of the bill is attached. Overall the bill is very strong, with many provisions that specifically reflect our Association’s asks from last week. Here are the highlights of the deal:

 

SBA Loans

The measure creates a $349 billion program for the SBA to offer unique loans to small businesses (500 or fewer employees). The loan amount is based on 250% of the borrower’s average monthly payroll cost for the preceding year (provisions for seasonal employers are included), up to $10 million. Collateral requirements are waived, and the “credit elsewhere” requirements (which have slowed down the process) have been waived as well. The loan is  or given if used for payroll costs, mortgage interest, or rent/utilities. 

 

  • An exception was made to the small business requirement for restaurants and hotels. The 500-employee number is based on the number of employees at each physical location. So a restaurant with 600 employees over five restaurant properties would qualify for these loans. This ensures that a number of larger independent restaurants and franchise owners can participate.

 

Tax Benefits

The agreement offers restaurant owners relief in the form of Net Operating Loss (NOL) carrybacks, delay of payment of employer payroll taxes, and an Employee Retention Tax Credit.

 

Qualified Improvement Property

At long last, restaurants can immediately write off costs associated with improving facilities. The QIP fix is complete.

 

Next Steps

  • Webinars from the Association for our membership outlining how to approach these benefits. We will offer briefings from our policy team, updates from our outside counsel, and specific sessions with representatives of key agencies like the SBA.
  • A new web portal for online access to briefings, updates, and links to key agencies.
  • This legislation will require regulatory action from the Administration. We are working to minimize disruption for our members and get recovery assistance out as quickly as possible.
  • Congress is likely to draft subsequent recovery bills. We are working on what industry-specific provisions should be included.

 

Thanks to You

In an era of chronic dysfunction in Washington, Congress broke modern speed records in developing comprehensive legislation to address a national pandemic that has devastated many businesses – particularly ours. Amidst the disruption of shuttered congressional offices and a cacophony of industries asking for assistance, the restaurant industry spoke with a clear, unified voice. Our membership, board members, and SRA partners achieved unprecedented levels of grassroots engagement at every level of government. Daily calls with the Advocacy Strategy Committee and our Board leadership provided ongoing counsel and perspective to rapidly-changing legislative proposals. Many of our members have their own contacts with Capitol Hill and amplified our advocacy efforts. We consistently advanced a media narrative that explained why restaurants were the most critically affected by this crisis and why we deserve relief from Washington.


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