On May 15, 2020, the House of Representatives passed the $3 trillion HEROES Act, aimed at providing another round of financial relief for people and businesses impacted by the pandemic. Its narrow passage of 208 votes in favor to 199 against indicates the uphill battle it may face in a Republican-controlled Senate and at the desk of a president who has called it “dead on arrival.”
The HEROES Act would provide funding for a wide range of groups, a new stimulus check, funding for state and local governments, hazard pay for essential workers, and funding for coronavirus testing. The bill would revise the small business Paycheck Protection Program to remove the existing requirement that 75% of the loan be used on payroll and would allow SBA PPP loan participants to defer payment of eligible payroll taxes, even after the date of forgiveness. On the loan forgiveness side, this proposed bill would extend the covered period from eight weeks to 24 weeks, and from June 30, 2020, to December 31, 2020.
A new small and midsized business tax credit included in the HEROES Act would permit a payroll tax credit for each calendar quarter for employers with not more than 1,500 employees of up to 50% of qualified expenses including qualified rent, mortgage, utility expenses up to a maximum of $50,000 of such expenses (with limitations). The HEROES Act also includes a temporary elimination of the $10,000 state and local tax deduction cap, enhancements to the Employee Retention Tax Credit, limits on the CARES Act net operating loss provisions, and another round of individual stimulus checks among other tax changes.
Real estate specific provisions in the HEROES Act include a $100 billion Emergency Rental Assistance Fund, a $75 billion Homeowner Assistance Fund, an extension of the eviction and foreclosure moratorium to all renters and borrowers and, in-turn, making standardized mortgage forbearance available to all homeowners, and a Federal Reserve Facility for mortgage servicers and residential rental property owners.
(Contact: John Jones at jjones@nareit.com)