ABC-VA Blog

From monthly archives: April 2020

We are pleased to present below all posts archived in 'April 2020'. If you still can't find what you are looking for, try using the search box.

COVID-19 Daily Update: ABC Addresses New SBA and Treasury Guidance on PPP for Publicly Traded Companies

Helpful Tip of the Day – Employee Retention Tax Credit Guidance:

 

The IRS recently released additional guidance for the employee retention tax credit authorized under the CARES Act, which can be viewed here. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.NOTE: an Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a PPP loan that is authorized under the CARES Act. 

 

ABC Addresses New SBA and Treasury Guidance on PPP for Publicly Traded Companies:

 

As noted in previous updates, in response to larger public companies gaining access to PPP loans, the SBA and Treasury issues new guidance in a supplemental Interim Final Rule reminding borrowers to “carefully review the required certification on the Paycheck Protection Program Borrower Application . . . stating that ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.’”

 

In a related FAQ document, the SBA stated that borrowers “must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.” And “that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”

 

Further, Treasury Sec. Steve Mnuchin stated all loans of more than $2 million in a government relief program for small businesses will be audited to ensure they were justified after large public companies and big chains sparked outrage by taking funds. It is also important to note that the SBA has provided companies concerned about the accuracy of the certification a safe harbor: if they pay the loan back in full by May 7 the certification will be deemed to have been made in good faith.

 

Understandably, this new guidance raised concerns, but ABC believes that this guidance and action are geared towards publicly traded companies with access to capital markets. That being said, companies that received PPP loans should have a basis for their certification and need for the loan. Additional information is below and updates can be viewed at SBA.gov/PaycheckProtection and Treasury.gov/CARES, and ABC will continue to provide updates on any additional guidance.

 

California Counties Construction to Continue:

 

In a joint press release, six counties in the Bay Area of California announced that construction projects would be able to resume on Monday, May 4.The counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara released strict safety protocols that all jobsites will be required to follow. The safety protocols that were released vary from county to county and contractors performing work in the area will need to adhere to each jurisdictions guidelines. The Bay area joins the states of Michigan, New York, Pennsylvania, Washington and other localities who have announced in recent days the reopening dates for construction.

 

The Federal Reserve Releases New Guidance on Planned Main Street Lending Program:

 

Today, the Federal Reserve Board announced it is expanding the scope and eligibility for the Main Street Lending Program. The changes include:

 

  • Creating a third loan option, with increased risk sharing by lenders for borrowers with greater leverage;
  • Lowering the minimum loan size for certain loans to $500,000; and
  • Expanding the pool of businesses eligible to borrow.

 

The Fed also announced that a start date for the program will be announced soon. Additional PPP and Main Street Lending Program resources can be found on ABC’s new and improved Coronavirus webpage for members and their employees. You can view additional information and guidance on the program below:

 

Term sheet: Main Street New Loan Facility (PDF)

Term sheet: Main Street Priority Loan Facility (PDF)

Term sheet: Main Street Expanded Loan Facility (PDF)

              Main Street Lending Program Frequently Asked Questions (PDF)

Read the rest of entry »

COVID-19 Daily Update: NEW PPP Guidance and Reserved Loan Processing for Small Lenders

Helpful Tip of the Day – ABC Sample Resources for States:

SBA and Treasury Release Additional PPP Guidance & Reserved Loan Processing for Smaller Lenders:

 

This afternoon, starting at 4 p.m. today EDT through 11:59 p.m. EDT, the Small Business Administration announced that their systems will only accept loans from lending institutions with asset sizes less than $1 billion dollars. SBA stated that this action is to ensure access to the PPP loan program for the smallest lenders and their small business customers. This reserved processing time applies only today April 29, 2020, but SBA and Treasury stated they will evaluate whether to create a similar reserved time again in the future.

 

Also, last night SBA and Treasury released additional guidance regarding the Paycheck Protection Program:

 

 

For more information and updates, visit SBA.gov/PaycheckProtection and Treasury.gov/CARES.

 

Congress’s Return in Flux as Democrats Postpone Session and Senate Pledges to Return:

 

While both houses of Congress were set to return to D.C. on Monday, House Majority Leader Steny Hoyer (D-MD) changed gears Tuesday, indicating that the House would no longer return on May 4 as planned, citing safety concerns on advice of the Attending Physician. Today, though, Majority Leader Mitch McConnell (R-Ky.) on Wednesday pledged that the Senate will return next week.

 

Some Democrats are accusing McConnell of endangering the health of his fellow senators and Capitol staff; however, McConnell said the Senate will "practice proper safeguards" and "work safely," including the "proper spacing [and] masks where appropriate.” Further stating "We're going to modify routines in ways that are smart and safe, but we're going to honor our constitutional duty to the American people and conduct critical business, and we're going to do it in person."

 

House and Senate Look at Proxy Voting During Crisis:

 

The Senate Committee on Homeland Security & Governmental Affairs will hold an April 30 hearing on whether to allow remote voting in times of emergency. Such a plan has bipartisan backing from Senators Rob Portman (R-OH) and Dick Durbin (D-IL) who have sponsored a resolution (S. Res. 548) to permit remote voting if Senate leaders agree an emergency exists.

 

House Democratic leaders had planned to vote next week on a remote voting plan, regardless of whether they came to a deal with Republicans. It is not yet clear how the scheduling change will impact these plans.

 

Potential Phase Four Emergency Relief Agenda Items:

 

While Leader McConnell and other Republicans are advocating for a wait-and-see approach, Democrats and some Republicans have already begun discussions of different elements of what could make up the fourth phase of COVID-19 response. Below are some of the priorities that both parties have

floated.

 

  • Liability protection continues to be a significant issue Leader McConnell who has said Congress must pass liability protections for health care workers and businesses more broadly as the country begins to open up parts of the economy.

 

  • Governors are also seeking an additional $500 billion to address budget shortfalls for state and local governments and Senator Bill Cassidy (R-LA) joined with Senator Bob Menendez (D-NJ) to release a proposal that would create a $500 billion stabilization fund to aid state and local governments.

 

  • President Trump has thrown his support behind an increase in infrastructure spending, and some Republicans have echoed this call, notably Senators Dan Sullivan (R-AK), Richard Shelby (R-AL), and John Barrasso (R-WY). However, Leader McConnell told Republican lawmakers on a private call that he doesn’t support including an infrastructure package in a coronavirus relief bill, according to people familiar with the call. “We need to keep the White House in the box,” Mr. McConnell said, referring to any infrastructure package. “The Democrats and the White House need to get the message.”

 

  • Despite the recent replenishment of the PPP, the program is set to run dry again soon. In a Phase Four package, Congress may decide to re-supply the popular program, or un-cap it entirely.

 

  • An important Democratic priority is to provide funding to assist states transition to vote-by-mail programs for the November presidential elections. The CARES Act provided $400 million, but Pelosi has said that $4 billion may be needed.

 

Michigan Announces Construction Reopening and Illinois Workers Compensation Committee Repeals Proposal:

 

Yesterday, Michigan Governor Gretchen Whitmer announced that construction, which has been widely shut down in the state the last six weeks, would be allowed to resume on May 7. Further details and guidance have yet to be released, but the scheduled restart for construction will occur a week before the statewide stay at home order is set to expire on May 15. The governor hinted on Monday that a restart for the industry could be coming in the next week or two, saying that construction and other outdoor businesses are at a lower risk of spreading the virus.

 

The Illinois Workers Compensation Commission formally repealed a proposal that would have made workers’ compensation benefits available to essential employees, which would have covered the construction industry as well, who contracted COVID-19 without having to prove the illness was contracted at the workplace. Proponents of the rule change, including the AFL-CIO, vowed to push legislatively for the rule change when the state’s legislative session resumes. Reminder, ABC National has developed this resource on changes to the applicability of workers compensation coverage in order to brief chapters on this issue. In response to the coronavirus pandemic, over 50 bills have been introduced around the country in state legislatures that would make changes to the state’s workers compensation system.

 

Mnuchin Floats Additional Aid for Mid-size Businesses:

 

Treasury Secretary Steven Mnuchin said he’s open to adding more money to the Federal Reserve’s lending program for mid-size businesses should it prove popular. Mnuchin made the comments this afternoon on a video conference with reporters.

 

Congress directed the Fed to create the Main Street Lending Program for mid-size businesses as part of a $2.2 trillion economic rescue package, signed into law last month. However, the Fed hasn’t yet launched the program.

Read the rest of entry »

COVID-19 Daily Update: Looking Towards Phase 4 Recovery Package

As the interim funding for the Paycheck Protection Program launched yesterday morning, Congress and the White House look towards additional relief efforts for health and economic aid.  

 

Discussions Continue on Phase 4 Recovery Package

 

The U.S. House of Representatives was originally scheduled to return next week, but without a firm deal in place to pass an additional recovery bill House Democrats have delayed their plans to return to D.C. while Congress and the Administration continue discussions surrounding the next package to address the ongoing health and economic crisis.

 

As we noted in yesterday’s update, a bipartisan group of U.S. Senators are pushing for the expansion of the Paycheck Protection Program to include 501(c)(6) organizations in the next recovery package. If you’re Senator supported this effort, please take the time to thank them through ABC’s Action Alert here.

 

Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Kevin McCarthy (R-Calif.) and a number of other Republicans have indicated they want to wait and assess the implementation of current programs before proceeding with additional deficit spending. However, Speaker Pelosi and Senate Minority Leader Chuck Schumer (D-NY) have already begun working on Democrat demands for a Phase Four package that would likely seek to include additional aid to state and local governments, social safety net expansion, including unemployment benefits and nutritional assistance; expanded workplace safety protections for front-line workers; a “Heroes Fund” to provide hazard pay to front-line workers; additional health care funds; and additional direct payments to individuals. White House economic adviser Kevin Hassett said the administration is weighing the idea of more aid to individuals, possibly adding to the first stimulus package’s $1,200 direct payment per qualified person.

 

On Sunday, Secretary Steven Mnuchin also said the Trump administration is considering government loans to help out the oil and gas industry, which has undergone severe economic damage during the pandemic. Congress so far has declined to provide the funding due to opposition from Democrats who oppose aiding the oil industry; however, Treasury still has roughly $250 billion in untapped funds allotted from the CARES Act that can be used in conjunction with the Federal Reserve to provide liquidity with the Secretary’s broad discretion.

 

Majority Leader McConnell Addresses Liability Issue for Employers:

 

While construction and other businesses deemed essential during this crisis are committed to serving the needs of their communities, there are concerns about unfounded lawsuits targeting the businesses that stayed open during COVID-19. While ABC members are taking precautions to protect employees and provide a safe and healthy workplace, they could face exorbitant civil suits.

 

Addressing previous concerns about state and local government budget shortfalls after a bipartisan group of the nation’s governors called for $500 billion from the federal government to help address this crisis, on Monday, Senate Majority Leader Mitch McConnell said it’s “highly likely” the next coronavirus response bill will aid local governments whose budgets have been decimated by lockdowns and now face spiraling deficits. But to unlock that money, McConnell said he will "insist" Congress limit the liabilities of health care workers, business owners and employees from lawsuits as they reopen in the coming weeks and months.

 

New Paycheck Protection Program Guidance Addresses Concerns over Large Companies Benefiting from Loans:

 

Last week, with the enactment of the second round of funding for the program, the U.S. Treasury issued additional guidance on the PPP that provides notable clarifications including:

  • Hedge funds and private equity firms are deemed to be ineligible – this was never in doubt, based on underlying SBA rules, but recent news cycles and negative attention likely precipitated a more explicit clarification.
  • Private equity portfolio companies are to apply SBA affiliation rules “in the same manner as any other business subject to outside ownership or control.”
  • The guidance further states that otherwise-eligible portfolio companies should “carefully review” the required certification related to the necessity of the loan.
  • Companies who are themselves, or whose owners are, debtors in bankruptcy proceedings are ineligible -- “…[P]roviding PPP loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans.”

 

The guidance also codifies a limited “safe harbor” for companies that return PPP loans by May 7, 2020 -- “Any borrower that applied for a PPP loan prior to the issuance of this regulation and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.”

  • This safe harbor in the interim final rule ups the ante from a related FAQ update (last updated, Sunday, April 26) which addressed whether larger companies were eligible for PPP loans.
  • Notably, the FAQ sent an unmistakable signal to public companies to steer clear: “It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”
  • The suggestion of potential SBA audit weeks into the program’s launch, with nothing in the statute and little in the way of other guidance, raised significant questions and concerns among larger recipients, and the safe harbor is meant to address these concerns.

 

Construction Reopening in Washington State and Pennsylvania

 

Gov. Jay Inslee in Washington announced on Friday his plans for a phased-in reopening of the economy, and construction has been included in the first phase of that reopen. Construction that is considered “low risk” that can be performed in accordance with proper safety and virus mitigation standards, including distancing and jobsite density requirements, jobsite sanitation techniques and facial coverings is allowed. Similarly, Gov. Tom Wolf has rolled out his plan for a gradual reopening, which includes permission that construction that can be performed in accordance with those same safety and mitigation standards can resume on Friday, May 1.

Read the rest of entry »

COVID-19 Daily Update: Second Round of PPP Funding Launches with New Guidance

This morning the U.S. Small Business Administration resumed accepting Paycheck Protection Program applications from participating lenders.

 

Bipartisan Group of Lawmakers Urge PPP Expansion for 501(c)(6) Organizations:

 

As ABC continues to advocate for the expansion of PPP to 501(c)(6) organizations such as our state and local chapters, today a bipartisan group of lawmakers wrote to Senate Leadership and the heads of the Senate Small Business Committee to endorse the expansion of access to the Paycheck Protection Program in forthcoming legislation to 501(c)(6)s. You may view the letter here, and ABC will continue to provide updates on any progress made to expand this critical program to help ABC chapters across the country.

 

Helpful Tips of the Day – ABC’s Coronavirus Update webpage has a new look and Reminder – ABC Daily COVID-19 Blog:

 

Check out the new resources and layout for ABC’s Coronavirus Update webpage here.

 

Also a reminder that ABC National has rolled out a new feature on National Connections, the Daily COVID-19 Update. Each afternoon new articles are posted to keep members aware and up to date on Federal and State matters as they pertain to COVID-19. We encourage chapters to take advantage of this feature which include links to agency updates, webinars, and state and local stay at home orders. The COVID-19 Update can be found here.

 

$310 Billion for Paycheck Protection Program Loans Starts Today:

 

Last week, additional guidance was issued by the SBA and Treasury on the second round of funding for the popular program:

 

 

The Small Business Administration has also limited how much individual banks can lend under the PPP due to the program's high demand among businesses seeking relief from effects of the coronavirus pandemic. Individual banks and lenders will now be limited to 10 percent of the program's overall funding, or $60 billion. The cap is intended is to help all lenders have equal access for their small business clients, the SBA said.

 

For more information and updates, visit Treasury.gov/CARES and SBA.gov/PaycheckProtection.

 

Check out the new Construction Industry Safety Coalition COVID-19 Resource:

 

ABC is on the Steering Committee of CISC, which finalized an update to the COVID-19 Prevention, Preparedness, and Response Plan for Construction.  The updates in Version 2 of the plan include some important changes and additions as more data have become available on the spread of COVID-19, including:

 

  • New guidance on the use of face coverings, including masks and cloth coverings (bandanas, etc.);
  • A new section, Guidance for Critical Infrastructure Employers, based on new CDC guidance;
  • Specific procedures for screening and allowing visitors onto job sites;
  • An appendix on the procedures for monitoring the temperature of workers, including next steps if a high fever is found; and
  • Additional guidance on ride sharing, and the use of common drinking and eating sources.

 

The updated and additional language is shown in RED font. 

 

Version 2 can be found here.

 

Webinar this Wednesday – Engaging with State Administrations on Reopening Construction:

 

States are beginning to engage industries on reopening certain sectors of the economy, and as construction is one of the top industries being considered, many chapters are being consulted by governor’s administrations and other officials. Panelists, including chapter presidents and chapter and national government affairs staff, will share their strategies and best practices for communicating with state decision makers about how to effectively reopen construction and what contractors are doing to mitigate the virus on jobsites. Register for the webinar here.

 

Also, a reminder of this resource distributed last week that is a template for these communications. There will be other examples of similar packages from chapters added to the collection of ABC COVID-19 resources this week.

 

Construction Industry Eyed for Reopening in New York:

 

On Sunday, New York Governor Andrew Cuomo said that construction and manufacturing could be the first industries allowed to resume as part of a phased approach to opening sectors of the state’s economy. The governor said the plan will be implemented in phases and will be based on regional analysis and determinations. The phased reopening could begin as soon as the state’s stay at home order expires on May 15.

 

CDC Drafts Plan for Reopening U.S. Economy:

White House officials and coronavirus task force members received draft guidelines late last week on a phased reopening of schools and camps, child-care programs, some workplaces, houses of worship, restaurants, and mass transit, Washington Post reports, citing unnamed Trump administration officials.

  • The CDC-written guidance, which could still change, is likely to be released within next seven days
  • The 17-page proposal says all decisions should be made locally
  • Contentious issues include guidelines for religious communities and restaurants

President Trump Issues Temporary Immigration Ban:

Last Wednesday, the president signed an executive order restricting certain categories of immigrants from entering the United States for 60 days; however, the measure contains broad exceptions and will not apply to immigrants who already are living and working in the United States and are seeking to become legal permanent residents. Medical professionals, farmworkers and others who enter on temporary “nonimmigrant” visas are also unaffected, and the suspension also exempts the spouses and underage children of U.S. citizens.

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COVID-19 Daily Update: Second Round of PPP Funding Launching Monday

This afternoon, President Trump signed the bipartisan deal into law to extend an additional $310 billion for PPP loans. You can view a statement from ABC’s VP of Legislative & Political Affairs Kristen Swearingen on the bill’s passage here.

 

Helpful Tip of the Day

ABC National has rolled out a new feature on National Connections, the Daily COVID-19 Update. Each afternoon new articles are posted to keep members aware and up to date on Federal and State matters as they pertain to COVID-19. We encourage chapters to take advantage of this feature which include links to agency updates, webinars, and state and local stay at home orders. The COVID-19 Update can be found here.

 

Additional $310 Billion for Paycheck Protection Program Launching Monday:

The second round of funding will be launching on Monday morning, according to a joint SBA and Treasury statement, and will also include funds from some publicly traded companies that were awarded PPP loans in the first round but have since returned or announced that they would be returning their loans to the federal government after new guidance was issued by the SBA. Note that while 501(c)(6) organizations were not included in this extension, ABC continues to advocate for additional aid to address the needs of our state and local chapters affected by this crisis.

 

Companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding, the SBA said. By definition, public companies have access to the capital markets, for instance, Shake Shack returned the $10 million it got through the PPP after it sold $150 million in new shares. The owner of Ruth’s Chris Steak House chain also said Thursday that it would refund the $20 million it received.

 

SBA indicated that large public companies who tapped the PPP before the rule change can avoid scrutiny by returning the relief loans in the next two weeks.

 

Reminder – New State Resources Available:

 

ABC’s state affairs team and chapters have put together a preliminary package or resources to help with your efforts as you begin to provide reopening recommendations to state officials on behalf of your members. This document can be viewed here.  

 

A new workers compensation rule issued in Illinois would have shifted the burden of proof to employers and assumed that any worker who contracted COVID-19 was exposed through the workplace. Multiple business groups filed a lawsuit against the rule and yesterday a judge issued a temporary restraining order blocking the rule. On this issue, ABC’s state affairs team released this resource to brief and prepare chapters for similar changes to workers compensation rules in their states.  

 

Stay at Home Orders Updates in Montana and New Mexico:

 

Montana Governor Steve Bullock announced a gradual and phased reopening of the state beginning April 26 for individuals, and extending to non-essential businesses on April 27. The Directive and its Appendix with reopening guidelines are posted online at covid19.mt.gov. Construction was considered “essential infrastructure" in the Governors Stay at Home Directive issued in March.

 

New Mexico Governor Michelle Lujan Grisham announced that the state would be extending all public health orders through May 15. Gov. Grisham appointed 15 representatives from various industries, including construction, to the economic recovery council in order to make health-driven decisions about safe reopening procedures.

 

Roundup of Recent OSHA COVID-19 Related Actions:

April 21 - COVID-19 Guidance for the Construction Workforce (Spanish PDF)

April 17 - ABC Asks OSHA for Guidance on Reporting of COVID-19 Cases, Social Distancing and Face Coverings

April 16 - OSHA Offers Relief to Employers for Their Non-Coronavirus-Related Obligations (Littler Mendelson)

April 13 - OSHA Issues Interim Enforcement Response Plan for COVID-19 Outbreak

April 10 - OSHA Guidance on COVID-19 Recording Requirements Provides Clarification for Contractors

April 8 - OSHA Expands Temporary Guidance for Respirator Fit Testing During COVID-19 Outbreak

April 3 - OSHA Issues Enforcement Policies on Respiratory Protection

March 24 - ABC Writes to OSHA Regarding the Recordability of COVID-19 Cases

 

More OSHA information is available at: https://www.osha.gov/SLTC/covid-19/

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COVID-19 Daily Update: New SBA Guidance on Second Round of PPP & New Resources Available on Construction Reopening and Workers Comp

Tonight, the House is set to pass the bipartisan agreement that will provide more than $310 billion in additional funding for the Paycheck Protection Program loans to small businesses and the President has stated he will sign the bill into law.

 

PPP Extension Set to Pass in the House as SBA Issues New Guidance on Next Round of Funding:

 

The $484 billion deal includes $321 billion to replenish the small business Paycheck Protection Program, which allocates $11 billion in administrative costs for the program. A view of the bill text can be found here, with section by section of the small business provisions here, and the hospital and testing provisions here.

 

To help ensure these new funds are provided to those small businesses most in need, the Small Business Administration issued new guidance today in its FAQs that makes it “unlikely” that big publicly traded companies can access the next round of funding for the U.S. government’s small business relief program.

 

Companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding, the SBA said. By definition, public companies have access to the capital markets, for instance, Shake Shack returned the $10 million it got through the PPP after it sold $150 million in new shares. SBA also indicated that large public companies who tapped the PPP before the rule change can avoid scrutiny by returning the relief loans in the next two weeks. 

 

New Resources Available on Construction Reopening and Workers Compensation:

 

ABC National’s state affairs team is collecting a list of chapter staff that have been invited to participate in statewide and local task forces/councils on reopening sectors of the economy in their areas. If you or anyone else at your chapter are participating in these conversations, whether formally or informally, please notify Ben, Brandon or Nick to be added to the group and connected with ABC colleagues involved in these efforts.

 

To that end, ABC ‘s state affairs team has also put together a preliminary package to help with your efforts as you begin to provide reopening recommendations to state officials on behalf of your members. This document can be viewed here and is a resource meant to serve as an example of what can be put together, and to be tailored with your specific recommendations based on the realities on the ground in your state(s). It also includes an example of a safety plan put together by ABC of PA’s COVID-19 Construction Safety Task Force. Our team is happy to dig in deeper with you, and we have an arsenal of resources and information at our disposal to help craft the best message to stakeholders and demonstrate what member contractors are doing to safely carry out their essential work on jobsites.

 

Additionally, ABC’s state affairs department is closely monitoring rapid developments in the states related to the expanded requirements for workers compensation coverage. For more background on this trend, and general guidance on how to respond to this potential threat in your state, reach out to Brandon, Nick, or Ben, and view a one pager on this issue which is available here.  

 

Free Webinar: Coping with COVID-19: Financial Tools and Resources to Help Small Businesses and Non-Profits Survive

Join Lender Relations Specialist Rod Johnson of the U.S. Small Business Administration, as he and DC SCORE conduct a follow-up session to last week's webinar on the financial tools and resources being made available to help small businesses and non-profits navigate today's unprecedented economic crisis.

The Washington DC Chapter of SCORE invites you to join them on Friday, April 24 from 1:00 p.m. to 2:30 p.m. for a free webinar with the SBA’s Washington Metropolitan Area District Office. Register here.

 

OSHA Issues New Alert for Construction Workforce:

 

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has issued an alert listing safety tips employers can follow to help protect construction workers from exposure to the coronavirus. ABC will continue to provide updates on critical guidance from our federal agencies to support a safe and health construction workforce.  

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COVID-19 Daily Update: Senate Passes PPP Funding & House Set to Vote Today

The $484 billion deal includes $321 billion to replenish the small business Paycheck Protection Program, which allocates $11 billion in administrative costs for the program. The bill also includes $60 billion for the Economic Injury Disaster Loan program, $75 billion for the nation’s hospitals, and $25 billion for testing for COVID-19. Of that testing money, $11 billion will go to states.

 

A view of the bill text can be found here, with section by section of the small business provisions here, and the hospital and testing provisions here.

 

The concern now is how long these new funds will last. With the original $349 billion expended in just 14 days, lawmakers and economic experts believe that these new funds could expire even quicker and could run out by next week due to a more swift approval process since the roll out, more approved lenders, and thousands of applications at the ready. While not all small businesses are in need of assistance at this time, the country has approximately 30 million small businesses. The SBA has approved only 1.6 million PPP loans, and it is unclear how many have applied. 

 

Additional Federal Government Response Remains in Question:

 

Senate Majority Leader Mitch McConnell (R-Ky.) said several important things following the Senate passage of the interim funding deal, stating that he will not begin considering another phase of coronavirus stimulus until the Senate is back in session, which is scheduled for the May 4th week, and that “We need to see how things are working, see what needs to be corrected, and I do think that the next time we pass a coronavirus rescue bill we need to have everyone here and everyone engaged.” Further, McConnel expressed some concerns with the amount of money Congress is spending, stating “We've allocated a stunning amount of money -- $2.2 trillion -- knowing full well that that probably wouldn't be enough. ... I think it's also time to begin to think about the amount of debt that we're adding to our country and the future impact of that.”

 

Also at issue remains a request from the nation’s governors to provide $500 billion in aid to deal with the crisis caused by the coronavirus pandemic as tax revenue falls and demands for resources escalate.

 

Reports have indicated that Treasury Sec. Steve Mnuchin, who has been key to the White House’s and Republican’s negotiations in the previous bipartisan relief packages, believes that any additional relief package bill ‘will most likely’ be all the U.S. needs if economy reopens. Mnuchin listed Infrastructure (roads, bridges broadband), incentives for restaurants, sports, entertainment, payroll tax cut, and money for states among these top priorities.

 

Florida, Tennessee Announce Groups Focused on Re-Opening Economies:

 

Florida Governor Ron DeSantis announced the creation of the Re-Open Florida Task Force. In addition, he announced the members of the Re-Open Task Force Industry Working Group on Tourism, Construction, Real Estate, Recreation, Retail and Transportation. The announcement and members participating on the task force can be found here.

 

Tennessee Governor Bill Lee has announced the creation of the Economic Recovery Group, a joint effort between state departments, members of the legislature and leaders from the private sector to build guidance to safely reboot Tennessee’s economy. ABC Greater Tennessee Chapter President Clay Crownover was appointed to the group and will serve alongside 14 other industry representatives, state legislators and agency officials to draft recommendations, according to a press release from the governor’s office.

 

CARES Act Tax Provisions for Businesses:

 

We have received some questions on the tax provisions included in the CARES Act so below is a brief overview of these provisions that were included in the bill. You can also learn more about these provisions from the IRS here.

 

To prevent double dipping into these relief efforts, businesses that receive an SBA loan through the Paycheck Protection Program cannot also benefit from the bill’s tax provisions including the retention tax credit and deferment of payroll taxes. 

 

  • Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000 during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50 percent or more when compared to the same quarter last year. The credit is available for employees retained but not currently working due to the crisis for firms with more than 100 employees, and for all employee wages for firms with 100 or fewer employees. FAQs on this credit can be found here.

 

  • Employer-side Social Security payroll tax payments may be delayed until January 1, 2021, with 50 percent owed on December 31, 2021 and the other half owed on December 31, 2022. The Social Security Trust Fund will be backfilled by general revenue in the interim period.

 

  • Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80 percent of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses, and makes a technical correction to the treatment of NOLs for the 2017 and 2018 tax years.

 

  • Firms with tax credit carryforwards and previous alternative minimum tax (AMT) liability can claim larger refundable tax credits than they otherwise could. 

 

  • The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30 percent of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50 percent of EBITDA for 2019 and 2020. This will help businesses increase liquidity if they have debt or must take on more debt during the crisis.

 

  • Amends the Internal Revenue code to make qualified improvement property (QIP) eligible for bonus depreciation by granting it a recovery period of a 15-years (fixing the “retail glitch”)

 

Reminder – ABC Hosts COVID-19 Job Site Safety Stand Down on April 23:

 

ABC is encouraging individual employers to talk directly to workers about coronavirus safe work practices and protocols on construction jobsites by hosting COVID-19 Safety Stand-downs on Thursday, April 23. Hosting a stand-down is a vital opportunity for employers and workers in construction to ensure their behavior keeps them safe and slows the spread of the virus, especially since many jurisdictions are allowing construction work to continue. Learn more here.

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COVID-19 Daily Update: Paycheck Protection Program Deal Emerging

A deal is emerging to extend the Paycheck Protection Program to continue the forgivable loan program for the nation’s small businesses.

 

PPP Deal Emerging in Congress:

After negotiations continued through the weekend, it appears that a deal is close to being finalized to provide an additional $300 billion to replenish the small business Paycheck Protection Program, which is nearly $50 billion more than the initial proposal that Senate Republicans tried to pass last week. While the deal will hopefully be approved by mid-week any single member can slow down efforts to fast-track a vote. It is likely that the Senate moves first with passage hopefully set for today and the House has already notified members that votes could be held as early as Wednesday.

The deal is also reported to include $50 billion for the Economic Injury Disaster Loan (EIDL) program, that has also lapsed in appropriations and been under scrutiny over the past weeks for its performance. $75 billion for hospitals is also expected to be included in the interim package along with $25 billion for COVID-19 testing. While the deal is not yet finalized it appears that additional money for states and local governments, which governors have requested will not be included, though the President stated “that will be in our next negotiation.” ABC has also urged Congress to include 501(c)(6) organizations in the next phase of COVID-19 relief.

 

CISA Issues New Guidance for Essential Services, Benefitting Construction:

On 4/17, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) released version 3.0 of its guidance. Overall, it appears version 3.0 is good news for the construction industry, especially for members operating in states that follow CISA guidance in their essential worker policies, as it lends additional support for arguments that construction is essential.

 

  • In the Public Works and Infrastructure Support Services portion of the guidance (p. 13), two new bullets were added and listed first, giving construction services related to critical infrastructure a broad green light:
    • Workers who support the construction, maintenance, or rehabilitation of critical infrastructure.
    • Workers supporting construction materials production, testing laboratories, material delivery services, and construction inspection.

 

  • In the Commercial Services bucket (p. 18), this bullet was added, which is of interest to ABC member contractors performing maintenance and construction of commercial buildings:
    • Workers supporting the operations of commercial buildings that are critical to safety, security, and the continuance of essential activities, such as on-site property managers, building engineers, security staff, fire safety directors, janitorial personnel, and service technicians (e.g., mechanical, HVAC, plumbers, electricians, and elevator).

  

  • In the Residential/Shelter Facilities and Services bucket (p. 19), guidance was edited to clarify role of housing and commercial construction related activities:

 

 

  • In the Energy bucket (p. 9), construction was highlighted as essential broadly (see below), as well as specifically mentioned in the electricity (p. 9), petroleum (p. 10) and natural gas (p. 11) sections of the energy bucket:

 

 

Also of note, in the Considerations for Government and Business section (p. 3) there is significant new language an discussion about OSHA and CDC.

 

President Issues Guidelines to Ramp Up Federal Government Operations:

 

While last week the Trump administration released its "Opening Up America Again" guidelines to reopen the U.S. economy, today the White House released guidelines to the heads of executive agencies on preparing to “ramp back up” government operations to the maximum extent possible, and ordered federal agencies to begin preparing to return workers to offices, telling them to align their reopening plans with those of the states and municipalities where they’re located. The guidance for the federal agencies can be viewed here.

 

Indiana Extends Stay at Home Order; Boston Develops New Construction Safety Protocols:

 

Indiana Governor Eric Holcomb has extended the state’s Stay at Home order, which was originally set to expire on April 20, through May 1. A list of essential business and operations allowed to continue in the state can be found here.

 

The City of Boston has developed new draft safety protocols for construction sites allowed that were allowed to remain open while the city has paused non-essential construction. Mayor Marty Walsh noted that the protocols will be expanded to all construction projects when all construction is reopened in the city. The draft policy, which is set to go into effect April 27, can be viewed here. Please consult this sheet and local officials for further guidance on the operating status of construction in each jurisdiction.

                                                                                            

Reminder – ABC Hosts COVID-19 Job Site Safety Stand Down on April 23:

 

ABC is encouraging individual employers to talk directly to workers about coronavirus safe work practices and protocols on construction jobsites by hosting COVID-19 Safety Stand-downs on Thursday, April 23. Hosting a stand-down is a vital opportunity for employers and workers in construction to ensure their behavior keeps them safe and slows the spread of the virus, especially since many jurisdictions are allowing construction work to continue. Learn more here.

 

Reminder – Weekly government affairs webinar for ABC chapter presidents and government affairs directors scheduled for Tuesday, 4/21 at 11 a.m. – 11:30 a.m. EDT:

 

Join members of ABC National’s government affairs team to discuss the latest on COVID-19 policies, FAQs and advocacy best practices and strategies as we continue our weekly series of interactive updates for ABC chapter presidents and government affairs staff: https://attendee.gotowebinar.com/register/8156046819245045006

 

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COVID-19 Daily Update: President Announces Guidance on Reopening U.S. Economy

As ABC works with the White House and other industry groups to safely reopen the economy, ABC is also working to ensure that our construction companies are able to remain in business and receive critical assistance through this health crisis.

 

Helpful Hint of the Day – New ABC members-only webinar, ABC National Government Affairs Team Insights on COVID-19, announced for Monday, 4/20, 3 p.m. – 4:15 p.m. EDT:

Join a panel of ABC National’s general counsel and government affairs team as they discuss the latest government responses and policies related to COVID-19. Learn how ABC is fighting for ABC members and construction industry interests before federal, state and local lawmakers as the panel addresses FAQs, new policies, safety measures, loan programs and public policy debates in the COVID-19 era. Click here to register.

 

President Announces Guidance on Reopening U.S. Economy:

Last night, the Trump administration released its "Opening Up America Again" guidelines. The guidance says that before states and employers move to phases of reopening, they first need to see evidence of a downward trajectory of documented cases and influenza-like illnesses within a 14-day period. It also says they need to see a robust testing program in place for at-risk healthcare workers, and the ability to treat all patients without crisis care. The document adds the recommendations are "implementable on statewide or county-by-county basis at governors' discretion." 

 

The document also says the three-phase approach is "based on up-to-date data and readiness, mitigates risk of resurgence, and protects the most vulnerable."
 

In a call with the Nation’s governors yesterday, President Trump added that the work of the federal and state governments helped curb the potential death toll, which he said was at 2.2 million in the initial estimates. "Nobody has to hang their head, because you've all worked really hard and we have made the best out of a horrible situation and I'm very proud to have worked with you and we're going to continue to work together.”

 

Ohio Governor Mike DeWine said his state will reopen "in phases," starting May 1. "I am an optimist and am confident that Ohioans will also live up to the challenge of doing things differently as we open back up beginning on May 1st," DeWine Tweeted

 

Action Alert Calling on Congress to Provide Additional Funds to the Paycheck Protection Program:

 

As of 12pm EDT, 1089 ABC members have sent 3300+ messages to 94 Senators and 286 Representatives. With the SBA no longer accepting applications and PPP funding exhausted, ABC urges members to contact their U.S. lawmakers in support of a clean funding bill to authorize an additional $251 billion. Please click here to take action and urge Congress to support additional small businesses relief. ABC encourages its members to share the alert with fellow employees.

 

PPP Expires, Interim Funding Stuck in Limbo:

 

At this time, the Paycheck Protection Program is no longer accepting applications due to lack of funds. ABC National is urging Congress to support a clean funding interim bill to extend an additional $251 billion to PPP, and to further ensure that our ABC members have the resources they need to remain in business through this crisis. You can view the latest update on PPP loans disbursed here.

 

Additionally, House Republican Whip Steve Scalise (R-La.) has created an online portal for small businesses to share their story if they are unable to apply for a PPP loan now that the program has run out of funds. The portal can be accessed here. If a member company has expressed difficulty obtaining a PPP loan, please don’t hesitate to let us know at ABC National.

 

Democratic Senators Kyrsten Sinema (D-Ariz.) and Tina Smith (D-Minn.) are the only two to side with Republicans so far in moving forward with a clean funding bill. At the end of the day Thursday, President Trump said his administration was negotiating with Democrats and that he expected “something’s going to be happening."

 

While the bipartisan program is expected to be extended, it is a matter of timing and concerns remain about small businesses ability to make it another two or three weeks without renewed funding to the program. The Senate and the House, outside of an emergency need, are not scheduled to be back in DC until May 4th. ABC has stressed to lawmakers that PPP is a vital lifeline to our members and that additional PPP funding is needed immediately to effectively keep small businesses intact and employees on payroll.

 

ABC has also urged Congress to include 501(c)(6) organizations in the next phase of COVID-19 relief.

 

Main Street Lending Program:

 

The comment period for the Fed program, which is geared toward small and midsize businesses, ended April 16. The Main Street Lending Program will function more like a traditional loan, and the central bank estimates that the program, which is open to companies with as many as 10,000 employees and will be run directly through lenders, will support up to $600 billion in new loans. 

 

ABC is also waiting for additional guidance to be issued on the program, but hopefully lending will be available by next week and the term sheet can be viewed here. The Fed has also said that firms that have taken advantage of the PPP may also take out Main Street Lending loans. However, there are some key differences between the programs:

 

  • The interest rates borrowers can expect to pay on Main Street loans are variable and right now range from 2.5 percent to 4 percent. The PPP loans offer a 1 percent fixed interest rate.
  • The repayment term for Main Street loans is four years. PPP loans have two-year terms.
  • The smallest loan amount for Main Street loans is $1 million. There's no minimum loan amount for PPP loans. There are upward limitations on both programs, however. For PPP loans, the maximum loan amount is $10 million. Main Street loan sizes vary on the basis of which Main Street Lending facility for which you apply. There are two: one for new loans and one for borrowers who have an existing loan through a given lender.
  • While PPP loans may be fully or partially forgiven if companies apportion at least 75 percent of their loan proceeds to pay employees' salary, rent, and some utilities, Main Street loans may not be forgiven.

 

Since there's no minimum company size requirement for eligibility for Main Street loans, sole proprietors, self-employed business owners, and companies with fewer than 500 employees may apply. Businesses that are concerned with the ability to repay these loans should stay apprised of the status of the forgivable loan PPP and other small business provisions included in the CARES Act.

 

Another Multi-state, Regional Coalition Formed & Stay at Home Orders Extended in Three States:

 

Yesterday, seven states across the Midwest formed a third multi-state coalition comprised of governors from the states of Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin. The announcement from Michigan Governor Gretchen Whitmer said the group of governors will evaluate reopening the economy based on four factors: sustained control of the rate of new infections and hospitalizations, enhanced ability to test and trace, sufficient health care capacity to handle resurgence and best practices for social distancing in the workplace. With this formation of the Midwest coalition, there are officially 17 states taking steps to formally reopen the economy through a regional approach.

 

Statewide “Stay at Home” orders were also extended in Mississippi through April 27, Missouri through May 3 and Wisconsin through May 24. Please consult this sheet and local officials for further guidance on the operating status of construction in each jurisdiction.

                                                                                            

Reminder – ABC Hosts COVID-19 Job Site Safety Stand Down on April 23:

ABC is encouraging individual employers to talk directly to workers about coronavirus safe work practices and protocols on construction jobsites by hosting COVID-19 Safety Stand-downs on Thursday, April 23. Hosting a stand-down is a vital opportunity for employers and workers in construction to ensure their behavior keeps them safe and slows the spread of the virus, especially since many jurisdictions are allowing construction work to continue. Learn more here.

Read the rest of entry »

Virginia Governor Recommends Delaying Legislation Requiring PLAs and Prevailing Wage on Public Works

Wednesday, April 15, 2020 2:04 PM -    -   ABC News -  

This weekend, Virginia Gov. Ralph Northam (D) signed into law and issued amendment recommendations for legislation impacting Virginia’s construction industry, including two bills permitting prevailing wage and project labor agreement requirements on taxpayer-funded public works projects.

ABC Virginia has led a coalition of construction industry associations and business organizations against the prevailing wage and PLA mandate bills, which were two of many measures opposed by the business community the General Assembly passed after Democrats won the majority for the first time since 1993.

As part of ABC’s campaign in opposition to these measures and in support of Virginia’s existing fair and open competition statute, last week, The Washington Post published an op-ed by ABC Virginia member Amber Peebles of Athena Construction, a small, women-, minority- and veteran-owned business. In addition, The Richmond Times-Dispatch published a letter to the editor by ABC Virginia Chapter President Pat Dean, and WRVA interviewed ABC’s Ben Brubeck.

The General Assembly is scheduled to reconvene on April 22 for the purpose of considering bills that have been returned by the governor with a veto or recommendations for their amendment where lawmakers will determine if these bills will take effect July 1, 2020, or May 1, 2021, as recommended by Gov. Northam.

“The prevailing wage and PLA bills were passed by the General Assembly prior to the economic crisis caused by the COVID-19 pandemic, which is in part why Gov. Northam recommended a delay,” said Brubeck. “While a delay is a modest victory for Virginia’s construction industry and small businesses already struggling to stay in business in the uncertain COVID-19 economy, taxpayers will end up paying an estimated 12% to 20% more for construction of Commonwealth schools, roads, bridges and affordable housing whenever these laws take effect.

“As always, ABC stands ready to oppose anti-competitive and costly prevailing wage and PLA requirements on future local and state public works projects,” said Brubeck. “When Virginia’s construction industry loses public works contracting opportunities to expensive out-of-state contractors and labor, voters must remember these fiscally irresponsible laws slowed the Commonwealth’s eventual economic recovery and needlessly increased costs to taxpayers.”

Prevailing Wage and Project Labor Agreement Legislation Of Concern
Introduced by Sen. Dick Saslaw (SB 182) and Del. Alfonso Lopez (HB 358), legislation that eliminates Virginia’s Fair and Open Competition statute restricting government-mandated project labor agreements will allow state and local governments to mandate PLAs on public works construction projects. Other bills already signed into law that were introduced by Sen. Scott Surovell (SB 995) and Del. Lopez (HB 1635) eliminate fair and open competition protections on Metrorail construction projects procured by the Washington Metropolitan Area Transit Authority, which would permit future PLA mandates on metro construction projects, similar to the controversial failed attempt to mandate a PLA on Phase 2 of the Silver Line.

When mandated by governments, PLAs discourage nonunion contractors and subcontractors—which employ 97.8% of Virginia's construction workforce—from competing to build and work on projects funded by taxpayer dollars. As a result, taxpayers can expect to pay 12% to 20% more on all government-mandated PLA projects.

In addition, legislation introduced by Sen. Saslaw (SB 8) and Del. Jennifer Carroll Foy (HB 833) would result in prevailing wage requirements on construction projects at non-market rates set by the U.S. Department of Labor, via the archaic 1931 Davis-Bacon Act. These bills require government-determined prevailing wages to be paid to construction workers on all state construction projects exceeding $250,000 and allow localities to pass an ordinance requiring prevailing wages on specific or multiple locally procured public works construction projects.

Research suggests prevailing wage regulations increase compliance and regulatory burdens on small businesses and raise construction costs from 10% to 25%.

Because of the anti-competitive and inflationary impact of prevailing wage requirements, 23 states—including neighboring West Virginia, Kentucky and North Carolina—have no prevailing wage laws, and a total of nine states have repealed or significantly reformed their laws since 2015, resulting in savings, increased contractor competition and additional investment in infrastructure. In fact, the last state to implement a new prevailing wage law was 47 years ago when Minnesota passed a prevailing wage law in 1973.

“The net impact of the prevailing wage and PLA mandate bills is that it is a lose-lose for Virginia’s economy,” said Brubeck “It will lead to tax hikes and/or fewer public works construction projects procured by the Commonwealth’s state and local governments, and it will needlessly increase construction costs and steer contracts to out-of-state businesses and workers at the expense of Virginia’s construction industry and small, women- and minority-owned businesses.”

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