The following provides an overview on bills that have either passed or been introduced in Congress. Jewelers of America and our legislative counsel in D.C. will continue to monitor what’s out there and make changes as needed. JA members can use our action alert to reach out to lawmakers and push for measures that will help the industry.

New Legislation


(Updates as of 3/15/2021)

More Funds for Small Businesses

The passage of the $1.9 trillion American Rescue Act adds another $50 billion in funding to support small businesses, along with $1,400 stimulus checks for most Americans, extension of unemployment benefits, funds toward vaccination efforts and support for schools and local governments. Unlike prior relief bills, the legislation did not receive bipartisan support from Republicans. It was signed by President Joe Biden on Thursday, March 11, 2021.

In addition to broader support toward fully re-opening the economy, key provisions that could impact retailers and small businesses include:
  • An additional $7.25 billion to fund loans through the Paycheck Protection Program (PPP). While it did not extend the deadline of PPP loans past March 31, 2021 and businesses should still plan to apply by then, lawmakers have introduced bipartisan legislation to extend the program. If passed, it would extend the PPP application period until May 31 and provide an extra 30-day period for the Small Business Administration (SBA) to process applications.
  • The Employee Retention Tax Credit has been extended again, this time through the end of 2021. The provision allows eligible employers to claim a credit for paying qualified wages to employees. Businesses are eligible for the tax credit if their operations were fully or partially suspended due to a government order related to COVID-19 or if they experienced a significant decline in receipts. Following changes made with passage of the $900 billion COVID relief package in December, the credit is worth different amounts for 2020 and 2021.
    • For wages paid from March 12, 2020 until December 31, 2020 the grant can be applied to 50 percent of qualifying wages per employee up to $10,000 annually.
    • The December bill had upped the percentage to 70 percent of qualifying wages per employee up to $10,000 per quarter through July 1, 2021.
    • The new legislation extends that change for the third and fourth quarters of 2021. Eligibility has also been extended to include businesses opened after February 15, 2020 as a “recovery startup business” if they have had less than $1 million in gross receipts.
Jewelers of America recommends businesses review their eligibility for 2020 and 2021 credits with their tax advisors or payroll companies. Even businesses that experienced a strong recovery after the initial shutdowns could qualify based on periods of mandated closures. Furthermore, businesses that took PPP loans can still qualify for the credit if they are applied to different payroll costs.
  • Tax credits for employers providing paid sick and family leave under the Families First Coronavirus Response Act have been extended to September 30, 2021. The amount of covered wages also increased to a maximum of $12,000 per employee and now includes time for an employee to get a COVID-19 vaccine or to recover from one. While the tax credits still exist, leave is no longer mandated.
  • Additional $15 billion in funding toward targeted Economic Injury Disaster Loans (EIDLs), which are tax-free grants of up to $10,000 to small businesses located in low-income areas that can demonstrate a 30 percent or greater economic impact. Of the additional funds, $5 billion has been earmarked to fund $5,000 supplemental grants for businesses with ten or fewer employees that have suffered an economic impact of at least 50 percent.
For further information on business relief from the SBA, click here. Jewelers of America will continue to update and share information with members on legislation that could impact their businesses.

(Updates as of 2/25/2021)

Smallest Businesses Get New Window for PPP Loans

President Joe Biden has announced changes to the federal Paycheck Protection Program loans designed to make them more accessible to small independent businesses.

The latest changes include an exclusive window for the smallest businesses to apply for the loans. Starting on Wednesday, February 24, 2021, the Small Business Administration began offering PPP loans only to businesses with fewer than 20 employees and sole proprietors. The period – which is meant to give the businesses time to compile the necessary paperwork and for lenders to focus on them – ends on Wednesday, March 10, 2021. All businesses that qualify for a PPP loan will still have the chance to apply until March 31.

The PPP program was established as part of the first round of COVID-19 relief legislation. It offers forgivable loans to small businesses to help get through the coronavirus pandemic. The program had been closed since August 2020 but reopened in January following passage of the most recent COVID-focused legislation.

Biden also announced a change in how loan amounts are calculated to provide more help for sole proprietors, independent contractors, and self-employed individuals. Many of these businesses – which include contractors and small independent retailers -- only received small amounts of PPP funding due to the structure of the program. The Biden Administration stated it will “revise the loan calculation formula for these applicants so that it offers more relief.”

To learn about these and other changes to the PPP loans and get information on applying, visit the SBA’s PPP portal.

(Updates as of 1/6/2021)

Year End COVID-19 Relief

After months of bill introductions and negotiations that went nowhere, Congress has passed a $900 billion COVID-19 relief package, the “Coronavirus Response and Relief Supplemental Appropriations Act,” as part of a $2.3 trillion catchall package that included $1.4 trillion to fund the government through the end of the fiscal year on September 30, 2021. Both the House and Senate passed the bill late on Monday, December 21, 2020. President Trump signed the bill on December 27, 2020.

The bipartisan legislation represents  major compromises on both sides. It includes significantly less than what House Democrats pushed for earlier in the year with the HEROES Act and no direct funding for states and cities, while the Republican-controlled Senate did not get the pandemic-related business liability protections sought by lawmakers and had to loosen the purse strings enough to reach the agreement. Further legislation could be introduced once the new Administration and Congress take over in January.

The Act comes at a time when many businesses and families continue to struggle and COVID-19 cases surge, even as the distribution of effective and approved vaccines has begun.

The Act is designed to boost the economy and includes a new round of stimulus checks, with eligible households receiving $600 for each adult and $600 for each dependent; additional unemployment benefits ($300 weekly) through March 14, 2021; rental assistance; and funds toward the COVID-19 response including vaccines, testing, and tracing.

For small businesses – many of which have faced new rounds of shut-downs  -- it includes provisions to aid them through the ongoing crisis.

These include:

Paycheck Protection Program Version 2.0
Launched in early April, the Paycheck Protection Program (PPP), administered by the Small Business Administration (SBA), initially gave out $522 billion in forgivable loans between April and when it expired in early August. Congress has revised the program as part of the $325 billion in relief funds included in the package.

Key updates to the revised program include:

  • $284 billion in additional funding toward first- and second-time borrowers.
  • Businesses with less than 300 employees with a revenue reduction of at least 25 percent in a 2020 quarter compared to the same quarter in 2019 can apply for a second PPP loan.
  • Businesses can also re-apply for the PPP loan if they have returned all or part of their loan and have not received loan forgiveness yet. Additionally, a borrower that would have gotten a larger loan under the new legislation can reapply for the difference.
  • A key provision allows PPP recipients to deduct payroll costs and other expenses covered by the forgivable loans, even though the loans themselves are tax-free income. An earlier ruling by the Treasury Department had denied deductions.

Updates to Loan Forgiveness Process and What’s Forgivable:

  • The new legislation provides a simplified forgiveness application process for loans up to $150,000.
  • Small businesses can get loan forgiveness if they spend at least 60 percent of their PPP second draw loan on payroll costs for the covered period.
  • Businesses can use the loans toward additional covered expenses including software, cloud computing resources, HR, and accounting needs. The loans can also be used for property damage costs due to public disturbances that were not covered by insurance, supplier costs and the purchase of personal protective equipment.
  • The new bill repeals a CARES Act provision that required small businesses to deduct any Economic Injury Disaster Loans from PPP loan forgiveness.
  • It also clarifies that group insurance payments count as payroll costs, including group life, disability, vision, and dental insurance.

Focus on Underserved Small Businesses:

  • In an effort correct earlier problems with the loans – which in some cases went to large restaurant chains and big businesses while the smallest businesses got shut out -- the agreement includes dedicated PPP set-asides for very small businesses and lending through community-based lenders like Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs).
  • The bill also earmarks a portion of the PPP funding for both first- and second-time borrowers with 10 or fewer employees and loans of less than $250,000 in low-income areas.
  • The new legislation prohibits publicly traded companies from accessing the PPP.

With the ink still drying on the massive relief package more details – including updated guidance on the PPP from the SBA and Treasury  Department – is expected in the coming days.

The new legislation permits new and repeat borrowers to receive a PPP loan if they meet the requirements of an “eligible recipient.” This is defined as “any business concern, nonprofit organization, housing cooperative, veteran’s organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative” that meets the following three requirements:
  • Employs not more than 300 employees;
  • Has or will use the full amount of their first PPP loan; and
  • Can show a 25 percent gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

Borrowers who were not in business during the first, second or third quarter of 2019, but were in business during the fourth quarter of 2019, can compare gross receipts from the first, second or third quarter of 2020 to the fourth quarter of 2019 in determining the 25 percent reduction. If a business was not operating in 2019, but was in business by February 15, 2020, the borrower can compare their gross receipts during the second or third quarter of 2020 to the first quarter of 2020 to determine eligibility.

Costs eligible for loan forgiveness include payroll, rent, covered mortgage interest and utilities. The Act clarifies that group insurance payments count as payroll costs, including group life, disability, vision, and dental insurance.

The new PPP loans also makes the following potentially forgivable: 

  • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
  • Payments to suppliers that are essential at the time of purchase to the recipient’s current operations.
  • The loans can also be used for  property damage costs due to public disturbances that were not covered by insurance.
  • Covered operating costs such as software and cloud computing services and accounting needs.

To be eligible for full loan forgiveness, PPP borrowers will have to spend 60 percent of the funds on payroll over a covered period of either eight or 24 weeks.

PPP borrowers may receive loans of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, but the maximum loan amount has been cut from $10 million in the first round to $2 million maximum with the new PPP.

The loan application will be available at the SBA website here. Given that the bill just passed, SBA has not updated the site with information on the new loans. Under the Act, the SBA is required to establish regulations on small-business support no later than 10 days after the legislation is signed into law. Jewelers of America will update this Q&A as more details become available.
We recommend businesses follow similar steps to the first round of PPP loans. Businesses can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. The new Act also allocates $15 billion each to community lenders and small depository lenders to issue loans to reach businesses that may not have ties to traditional lenders. We recommend consulting with your current lender or a local lender to see if they are participating. Visit www.sba.gov for a list of SBA lenders. You can also contact your local SBA Development Center for more information.
 

Additional Provisions for Small Businesses


Economic Injury Disaster Loan Program
The Act provides $20 billion for new EIDL grants for businesses in low-income communities. Through the EIDL Advance fund, businesses suffering a substantial economic injury can apply for an advance that does not need to be repaid or up to $1,000 per employee limited to $10,000 total. 

Under the CARES Act the EIDL Advance received reduced PPP Loan Forgiveness, but the new Act repeals this provision so that if a business receives an EIDL Advance it will not impact PPP loan forgiveness. It is unclear how this will affect borrowers who already applied for and received loan forgiveness, but it is possible they will be able to amend their application to request repayment related to any EIDL Advance they received, since it would not reduce their forgiveness amount under the new rules.

Employee Retention Tax Credit
The new Act extends and expands the Employee Retention Tax Credit through July 1, 2021. The bill increases the refundable payroll tax credit from a maximum of $5,000 to $14,000 by changing the calculation from 50 percent of wages paid up to $10,000 to 70 percent of wages paid up to $10,000 for any quarter. The bill also clarifies that businesses will now be able to take the Employee Retention Tax Credit and participate in the PPP.


Legislation Passed in Early 2020


(updates as of 7/6/2020)

CARES Act

The $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by the president on Friday, March 27. We’re still following what’s happening in Congress and asking for Congress to do more to help businesses to get through this, you can use our action alert here to respond. The CARES Act includes the following major provisions to help businesses:

Paycheck Protection Program
Launched in early April, the Paycheck Protection Program (PPP), which is administered by the Small Business Administration (SBA), initially provided $350 billion to support emergency loans to help small businesses cover near-term costs during the most severe part of the coronavirus crisis, while giving them incentive to retain employees.

The program has had several hiccups since it was introduced and further legislation has been passed to support it.

First, it quickly ran out of funding, but got an infusion of $310 billion at the end of April with passage of the Paycheck Protection Program and Health Care Enhancement Act. The additional funds included a carve out of about $60 billion for “underbanked” businesses that had difficulty getting approved for loans during the first round of funding, reserving the fund for small banks, credit unions and non-profits.

Latest Updates to the PPP
Even with the additional funding, businesses continued to push for changes to make the program more accessible and flexible. After several failed attempts to move fixes forward, including as part of the expansive HEROES Act which passed the House, but faltered in the Senate, Congress passed the Paycheck Protection Program Flexibility Act of 2020, signed into law on June 5. It received near unanimous support, first passing in the House 417-1 and by unanimous consent in the Senate.

Highlights from the Act include:
  • Extends the covered period from June 30, 2020 to December 31, 2020, allowing businesses to use the loans toward covered expenses until the end of the year.
  • Allows loan forgiveness for expenses beyond the 8-week covered period to the earlier of 24 weeks after disbursement or to December 31, 2020.
  • Increases the current limitation on the use of loan proceeds for non-payroll expenses from 25 percent to 40 percent
  • Extends loan terms (payback) from two years to five years
  • Ensures full access to payroll tax deferment for businesses that take PPP loans

The PPP Flexibility Act also adds two new exemptions:
  • The forgiveness reduction will not apply if the borrower, in good faith, can document an inability to rehire the same or similar employees that were in place as of February 15, 2020.
  • The forgiveness reduction will not apply if the borrower, in good faith, can document an inability to return to the same level of business activity before February 15, 2020, due to COVID-related social distancing, sanitation, and other safety requirements or guidance from the Centers for Disease Control, Health and Human Services, or Occupational Safety and Health Administration issued between March 1, 2020, and December 31, 2020.

The following key details about the PPP have been updated to reflect changes from the PPP Flexibility Act – further guidance on the loans is also expected:
  • Businesses with 500 or fewer employees qualify and the program provides loans of up to $10 million to cover costs including payroll, rent, utilities and healthcare benefits.
  • Loans will be forgiven if the employer continues to employ its workers or rehires them when they reopen for business by December 31, 2020.
  • Loans will be available until the end of June through SBA-certified and other qualified lenders including banks, credit unions and other financial institutions.

CARES Act Tax Provisions
The bill includes tax provisions that offer retailers more liquidity to help offset costs during the economic crisis. These include:
  • Delay of payroll taxes due in 2020
  • 50 percent refundable payroll tax credit for employers whose businesses have been fully or partially suspended due to government limitation on commerce or whose businesses have experienced a 50% decline in gross receipts
  • Correction of an error in the 2017 Tax Act related to store improvements, that allow retailers to amend returns and get refunds for overpaid taxes in 2018 and 2019
  • Allowing businesses to carryback losses from 2018, 2019 and 2020 to previous 5 years and get refunds against taxes paid in profitable years
  • Allow greater deductibility of interest expenses incurred

Unemployment Insurance Provisions 
The CARES Act expanded unemployment benefits for a broad range of individuals, including self-employed workers and independent contractors. Covered individuals include those who are otherwise able to work and available for work based on State law, but are unable to do so related to COVID-19 for reasons such as caring for a sick family member, school closures, inability to reach place of employment or place of employment is closed. Coverage is for weeks of unemployment, partial unemployment, or inability to work due to COVID-19 beginning on or after January 27 and ending on or before December 31, 2020. Benefit amount is the individual state compensation (which varies) plus $600.

Family and Medical Leave Act (FMLA)
On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act. It expands the federal Family and Medical Leave Act (FMLA) on a temporary basis and includes new requirements for paid sick leave. Among the key changes, FMLA expands from covering employers with 50 or more employees to covering those with fewer than 500 employees and lowers the eligibility requirements for paid family and medical leave to any employee who has worked at least 30 days prior to the designated leave. It does, however, include language that allows the Secretary of Labor to exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business.

Changes to paid sick leave include covering up to two weeks for eligible employees (employers with 500 or fewer employees) who take sick leave because they are subject to a federal, state or local quarantine or isolation order related to the virus, are advised by a health care provider to self-quarantine, have symptoms and are seeking medical diagnosis, or are caring for someone who is subject to quarantine or isolation.

In order to offset the burden to small businesses, the Act provides a series of refundable tax credits for employers who are required to provide Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave.

The new requirements for the FMLA and paid sick leave will become effective on April 2 and will remain in effect until December 31, 2020.

Visit COVID-19 and the American Workplace for more information from the U.S. Department of Labor.

Additional Information/Resources

Please note that with the passage of the PPP Flexibility Act, we expect that the following resources will be updated to reflect the recent changes.
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