As the COVID-19 pandemic continues, Congress is considering a 4th stimulus bill to help businesses and families. The latest version of this legislation is the “Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act”, introduced last week by the Senate Republican leadership. The question is whether Senate Republicans can reconcile their differences with the House Democrats - who have already passed their own legislation (the “HEROES Act”) - in order to get a bill to the President’s desk for signature.
Here is a breakdown of those provisions in the HEALS Act that will have the largest impact on golf course management and golf course superintendents.
The Paycheck Protection Program
Since its creation in the CARES Act, the Paycheck Protection Program (PPP) has provided a lifeline to help small businesses keep their doors open. The PPP's low interest loans are fully forgivable if 60% of the loan amount is applied to keeping employees on payroll. However, the paperwork burdens and other terms of the program have made it inaccessible to a number of golf facilities, including 501c7 private clubs, as well as to 501c6 trade organizations, including the GCSAA. The HEALS Act simplifies the PPP forgiveness application process for smaller loans of $150,000 or less (PPP loans of $150,000 and under account for 86 percent of total PPP recipients). It expands eligibility to include 501c6 organizations with 300 or fewer employees and whose lobbying activities do not comprise more than 10 percent of receipts. It does not include 501c7 organizations as eligible for funding, however, the House-passed HEROES Act does make them eligible. As the House and the Senate reconcile their differences, GCSAA will continue to lobby for the inclusion of 501c7 orgs as eligible PPP recipients in the final bill to reach the President’s desk. Finally, small businesses that have received PPP funding can apply for additional loans under the HEALS Act, provided they have at least a 50 percent reduction in gross revenues.
Employee Retention Tax Credit
The HEALS Act increases the applicability of the employee retention tax credit, which rewards employers who retain employees in spite of having their operations either fully or partially suspended as a result of a government order (including a shutdown order by a mayor or governor). It does so by increasing the percentage of qualified wages eligible for credit, from the current 50% to 65% (wages include salaries plus health plan costs). It also decreases the reduction in gross receipts necessary in order to be eligible, from 50% to 25% (comparing the same quarters for consecutive years). This also tracks similar language in the House-passed HEROES Act.
Additional payments to individuals
The HEALS Act provides a second rebate of up to $1,200 individual ($2,400 married) that is gradually phased out when incomes reach $99,000 individual ($198,000 married). The HEROES Act provides a similar $1,200/$2,400 payment, but taxpayers would also receive $1,200 for each dependent, up to three dependents. So the largest payment would be $6,000 for a married couple with three or more dependents.
Sticking points include greater unemployment benefits and legal liability protections
Outstanding issues that divide Congress include what to do about the additional $600 weekly unemployment benefit provided by CARES that expired July 31st. Democrats in the House and Senate want the funding to continue. Senate Republicans want to replace it with a payment up to $500 that when combined with state unemployment insurance payments would replace 70 percent of lost wages. Senate Republicans also want to create a federal cause of action – with a higher burden of proof - for lawsuits related to coronavirus that would make federal courts the only venue in which to sue. Democrats do not support this as it would make coronavirus-related lawsuits harder to file or succeed. Regarding aid to state and local governments, the HEALS Act provides no new funding. It does provide additional flexibility to state and local governments to what is left of the $150 billion in relief funds provided by CARES. The HEROES Act, by comparison, provides a total of $540 billion in new funding for states, tribes, and territories. It also provides $375 billion to local governments.
What happens next?
Congress is set to adjourn for a month-long recess on August 7th. That may provide sufficient urgency to come to a consensus on a bill. GCSAA’s CEO, Rhett Evans, has co-signed a letter to the House and Senate leadership, outlining golf’s priorities for the Paycheck Protection Program, Employee Retention Tax Credit, and State and Local Aid. This letter was co-signed by Henry Wallmeyer, President and CEO of the National Club Association; Jeff Morgan, President & CEO of the Club Management Association of America; Jay Karen, CEO of the National Golf Course Owners Association; and Seth Waugh, CEO of the PGA of America. It can be found here. GCSAA will continue to lobby federal decision-makers to ensure golf’s voice is being heard as negotiations continue.