House "Skinny" HEROES Act Provisions
It has been many months since the last COVID relief package was signed into law, while the Senate, House, and White House have been in negotiations over the overall price tag and contents of a new COVID relief bill. After its initial release of the HEALS Act in July, Senate leadership released a slimmer version on September 10, and House leadership released an updated version of the HEROES Act that had originally passed the chamber in May. This new version, passed on October 1, includes several new elements that would provide relief for the nonprofit arts.
The National Council of Nonprofits prepared a preliminary analysis of the House HEROES 2.0 Act, and Independent Sector has summarized selected provisions that may be of relevance to nonprofit organizations.
Here are the highlights of the "skinny" HEROES Act provisions that would help the arts sector and nonprofits:
- A second round of Payroll Protection Program (PPP), loans of up to $2 million for certain hard-hit businesses; a set aside of 30 percent of PPP funds for nonprofits of all sizes and types to receive first-time PPP loans; and a streamlined loan forgiveness process with an expanded list of allowable uses for the funds that would qualify for forgiveness: Borrowers with loans of less than $50,000 would only be required to certify to the SBA that it followed the requirements of the loan and retain documentation in the event of an audit. Borrowers with loans of between $50,000 and $150,000 would only be required to certify to their lenders that they complied with the terms of their loan using a simplified application and retain documentation. Loans of more than $150,000 would follow the existing procedures. Careful attention should be paid to the details on eligibility requirements.
- Extension of weekly $600 Federal Pandemic Unemployment Compensation for W2 and Self-employed workers through January 31, 2021, and a provision to support "mixed earners".
- The bill would significantly expand the Employee Retention Tax Credit (ERTC) by raising the credit from 50% to 80% of wages, modify the phase in of the value of the credit beginning at reduced gross receipts of 10%, increase the value of the credit from $10,000/year to $15,000/quarter per employee for to 3 quarters, and expand the number of employees to which the credit applies, among other changes. The bill would also permit employers to take both PPP and ERTC by sequencing covered payroll periods.
- $8 billion added to the SBA's Emergency Injury Disaster Loan (EIDL) program.
- $135 million each for the National Endowment for the Arts, the National Endowment for the Humanities, and the Institute of Museum and Library Services for grants to support the general operations of recipients and language to permit the waiver of matching requirements. This would be the largest supplemental funding amount ever proposed for these cultural agencies.
- $10 billion for grants to live independent venue operators, including non-profit, government and for-profit owned or operated venues, modeled on the "Save Our Stages Act".
We continue to monitor the fluid situation and will send more information as it becomes available. Please click here for the full bill text, a section-by-section summary here, and a one-page summary here.
PPP Resource:
FMA has a PPP Toolbox which includes a number of different resources such as guidance on restricted funding, tools to calculate your FTEs, regular live clinics and a dedicated email helpdesk: FMACARES@fmaonline.net where you can send an FMA expert your PPP questions. You can complete FMA’s quick Forgiveness Check-In to share how you’re approaching forgiveness.
FMA has also recently launched the PPP Forgiveness Racial Equity Initiative – PPP FREI – prioritizing customized advisory support for organizations led by BIPOC-identified individuals as well as organizations where BIPOC-identified individuals are managing the PPP process.