Gibbons Law Alert

Gibbons Law Alert

Author: Jason J. Redd

American Rescue Plan Act of 2021 Includes Significant Mental Health Investment

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Posted in Federal Legislation

On March 18, 2021

Providers of mental health services may be eligible for funding, loans, and grants as detailed below. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021. One key component of the $1.9 trillion initiative is an investment of more than $3.5 billion toward behavioral and mental health services. This funding covers a variety of providers and mental health consumers. Section 2701 Funding for Block Grants for Community Mental Health Services $1.5 billion for carrying out certain aspects of the Public Health Service Act (“PHS Act”), as they relate to mental health: 42 U.S.C. 300x et seq. – block grants for states providing community mental health services for adults with serious mental illnesses and children with serious emotional disturbances 42 U.S.C. § 290aa-4(c) – behavioral and mental health statistics Section 3052 Funding for Block Grants for Prevention and Treatment of Substance Abuse $1.5 billion for carrying out certain aspects of the PHS Act, as they relate to mental health Block grants for states Section 2703 Funding for Mental and Behavioral Health Training for Healthcare Professionals, Paraprofessionals, and Public Safety Officers $80 million to award grants to health professional schools, academic health centers, state and local governments, and other appropriate public and private nonprofit entities, to plan, operate, or participate in trainings and...

More Help Available for Venues Impacted by COVID-19 (Shuttered Venue)

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Posted in Federal Legislation

On March 17, 2021

Relief may soon be available to artistic venues impacted by the COVID-19 pandemic. Under the Shuttered Venue Operators Grant (SVOG) program, venues affected by the pandemic may be eligible for grants equal to 45 percent of their gross earned revenue, with $10 million being the maximum amount available for a single grant award. The SVOG program was created in December 2020 as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260. The program was initially funded with $15 billion and will receive an additional $1.25 billion under the American Rescue Plan Act, H.R. 1319. Eligible entities covered under the program include: Live venue operators or promoters Theatrical producers Live performing arts organization operators Relevant museum operators, zoos, and aquariums that meet specific criteria Motion picture theater operators Talent representatives Each business entity owned by an eligible entity that also meets the eligibility requirements Qualified entities must also have been in operation as of February 28, 2020, and have applied for or received a loan under the Paycheck Protection Program on or after December 27, 2020. Grant funds may be used for expenses, which include: Payroll costs Rent payments Utility payments Scheduled mortgage payments (not including prepayment of principal) Scheduled debt payments (not including prepayment of principal) on any indebtedness...

Restaurants Receive Additional Support Under the American Rescue Plan of 2021

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Posted in Federal Legislation

On March 12, 2021

President Biden recently signed the $1.9 trillion American Rescue Plan Act of 2021, H.R. 1319 (the “Act”) into law on March 11, 2021. The Act will send aid to millions of Americans still recovering from the global COVID-19 pandemic. Of particular interest to the restaurant industry, the Act provides the industry with additional assistance through the $28.6 billion Restaurant Revitalization Fund (the “Fund”). Section 5003 (Support for Restaurants), Title IV (Committee on Small Business and Entrepreneurship) provides support to restaurants as follows: Fund: A total of $28.6 billion is appropriated for a new program at the Small Business Administration (SBA) offering assistance to restaurants and other food and drink establishments. Of this amount, $5 billion is set aside for businesses with less than $500,000 in 2019 annual revenue. Restaurant Revitalization Grants: Grants are available for up to $10 million per entity (and affiliates), with a limitation of $5 million per physical location up to 20 locations. Revitalization grants are calculated by subtracting 2020 revenue from 2019 revenue. During the first 21 days post enactment of the Act, priority will be given to applications from restaurants owned and operated by women, veterans, or socially and economically disadvantaged individuals. Revitalization grants may be used for a wide variety of expenses, including payroll, mortgage, rent, utilities, supplies, food...

Congress Reaches Agreement on Additional COVID-19 Relief

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Posted in Federal Legislation

On December 21, 2020

On Sunday, December 20, 2020, Congressional leaders announced an agreement on a fourth major COVID-19 response bill. Although the legislative language is being finalized, statements from the parties involved in negotiations indicate the agreement includes focused relief for businesses, individuals, and families. For businesses: Expansion of the Paycheck Protection Program (PPP). The proposal includes more than $284 billion for first and second forgivable PPP loans. PPP will now be accessible to nonprofits, local newspapers, TV, and radio broadcasters. Dedicated PPP set-aside for small businesses and lending through community-based lenders like Community Development Financial Institutions (and Minority Depository Institutions). $15 billion in dedicated funding for live venues, independent movie theaters, and cultural institutions. $20 billion for additional grants under the Economic Injury Disaster Loan Program. Provision of a tax credit to support employers offering paid sick leave. Extension and improvement of the Employee Retention Tax Credit. $82 billion in funding for colleges and schools, including support for HVAC repair and replacement to mitigate virus transmission and reopen classrooms. For individuals and families: A new round of direct payments worth up to $600 per adult and child. $25 billion in rental assistance for families and an extension of the eviction moratorium. Enhancement of the Low Income Housing Tax Credit to increase affordable housing construction and provide greater...

Significant Changes Coming To the Paycheck Protection Program

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Posted in Federal Legislation

On June 5, 2020

As of 6/3/20, over $100 billion in PPP funding was still available from SBA authorized participating lenders. Today, President Trump signed HR7010, the Paycheck Protection Program Flexibility Act of 2020. The bill changes specific loan forgiveness provisions of the Paycheck Protection Program (PPP). PPP was a part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed by Congress to mitigate the effects of COVID-19. Companies or organizations who secured PPP loans are cautioned and advised to review the new legislation very carefully, as detailed below. Under PPP, eligible businesses could apply for forgivable loans of 2.5 times their average monthly payroll or $10 million, whichever is the lesser amount. A recipient can have 100 percent of its PPP loan forgiven if it uses the proceeds of the loan on the following items during the eight weeks beginning on the date of loan origination: Payroll costs as defined by the CARES Act; Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation); Any payment on any covered rent obligation; and Any covered utility payment. Loan recipients were also required to spend at least 75 percent of the loan proceeds on payroll costs. The new law contains the following...

UPDATE: Federal Reserve Board Expands Main Street Lending Program

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Posted in Federal Legislation

On May 7, 2020

After receiving extensive public comment during the past month, the Federal Reserve announced on April 30, 2020 that it will expand the scope and eligibility of its Main Street Lending Program (“Program”). The Federal Reserve’s recent action follows the unprecedented steps taken by the Board of Governors of the Federal Reserve on April 9, 2020, to provide up to $2.3 trillion in credit facilities to households, employers, and state and local governments in response to the COVID-19 emergency’s impact on the U.S. economy. Gibbons previously covered these newly announced programs in a client alert. The Program facilitates lending to small and medium sized businesses. The Federal Reserve received 2,200 submissions relating to the Program, and on April 30, 2020 issued two updated Term Sheets and an initial Term Sheet, which are summarized as follows: The Program comprises the Main Street New Loan Facility (MSNLF), the Main Street Expanded Loan Facility (MSELF), and the new Main Street Priority Loan Facility (MSPLF). Below is a side-by-side comparison chart and additional details about the Program. Program Loan Options MSNLF MSPLF MSELF Term 4 years 4 years 4 years Minimum Loan Size $500,000 $500,000 $10,000,000 Maximum Loan Size Lesser of $25M or 4x 2019 adjusted EBITDA Lesser of $25M or 6x 2019 adjusted EBITDA Lesser of $200M, 35% of...

Third Phase of Federal Relief for Coronavirus: What Details We Know Right Now About the Legislation

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Posted in Federal Legislation

On March 25, 2020

While some companies have already begun to apply for relief from the Small Business Administration (SBA) and other government entities, others are waiting to see what additional programs may be on the horizon. While we do not know all the details of Phase III legislation in Congress, we do know it will include: Support for Businesses $10 billion for SBA emergency grants of up to $10,000 to provide immediate relief for small business operating costs $17 billion for SBA to cover six months of payments for small businesses with existing SBA loans A retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis SBA loan forgiveness eligibility for rent, mortgage, and utility costs Support for State and Local Government $150 billion for a state, tribal, and local Coronavirus Relief Fund $30 billion for the Disaster Relief Fund to provide financial assistance to state, local, tribal, and territorial governments, as well as private nonprofits providing critical and essential services $10 billion for the Indian Health Services and other tribal programs Support for Industries $150 billion increase in the Marshall Plan for our healthcare system $30 billion in emergency education funding $25 billion in emergency transit funding Support for Workers Increase in the maximum unemployment benefit by $600 per week Four...

Financial Disaster Relief for Start-Ups – Yes, It Is Possible!

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Posted in Corporations

On March 24, 2020

The specific challenge we are addressing here is for start-ups and other early-stage businesses. Gibbons attorneys are heavily involved in advising businesses in all industries and of all sizes on the full range of state and federal coronavirus disaster relief programs available to them. Start-ups and other early-stage companies face particular challenges in obtaining governmental relief. Gibbons understands this and is here to help. With our strong commitment to start-ups and other early-stage businesses, we recognize your dire need for funds for survival, as well as growth, at this critical period. We also recognize that the federal and state application requirements seem staggering. Founding teams are confronted with overwhelming requests for tax returns, current financial statements, monthly sales figures, and similar requirements. Which aid program(s) should you pursue? How do you decide? How does a pre-revenue or newly launched start-up demonstrate to federal and state agencies substantial economic injury? How do you determine the best route for disaster assistance with the highest chance of short-term success and without being overwhelmed by red tape? What is its most recent pre-coronavirus valuation, and how was it justified – for example, thought independent third party investments or a verified order pipeline? How much economic loss has now occurred due to the crisis? How do you complete the forms...

Budget Matters, Incentives, and Cannabis Will Be This Summer’s Hot Topics in Trenton

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Posted in State Government

On July 9, 2019

The Summer is here and the halls of the Legislature are quiet, but three topics that controlled much of the debate in Trenton this year are expected to drag into the Fall: the state budget, economic incentives, and cannabis. Fiscal Year 2020 Governor Murphy signed the Fiscal Year 2020 budget on June 30, avoiding a government shutdown, but not ending the debate on taxes and spending. After the Legislature sent the Governor a budget that did not include a millionaire’s tax, corporate responsibility fee, and tax on opioid manufacturers, the Governor line-item vetoed several appropriations and signed an Executive Order authorizing the State Treasury to place in reserve approximately $235 million in state appropriations. In 2016,Governor Christie took similar action when his Administration froze approximately $100 million in spending as the state health benefit plan design committees considered cost reductions. Prior to the July 4th holiday, the Murphy Administration announced the full list of spending items placed in reserve. The funds will only be released after the Treasurer certifies that certain revenue objectives are met, meaning this issue will linger for several months. Economic Incentives Also on June 30, the State’s two main economic incentive programs, the Grow NJ Assistance Program (GROWNJ) and the Economic and Redevelopment Growth Grant (ERGG) Program, expired and new applications...

Recap: IRS Convenes Public Hearing on Proposed Regulations for Opportunity Zones

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Posted in Development/Redevelopment

On February 25, 2019

Jason J. Redd, a Director in the Gibbons Government & Regulatory Affairs Department attended an overflowing public hearing on February 14 convened by the Internal Revenue Service for the purpose of obtaining input from stakeholders concerning the initial proposed regulations for Opportunity Zones (OZ) issued in October. The IRS is reviewing comments on the first round of proposed rules and is expected to issue the next round of proposed regulations in March, with the potential for final regulations to be issued in late spring. Witnesses at the packed hearing included state cabinet officials, as well as representatives from state economic development groups, small businesses, community reinvestment coalitions, investment funds, and technology and planning organizations, among others. Testimony focused on ensuring that program regulations maximize investment and economic growth by generating new development, capital, and jobs in the distressed communities where OZs are located. There was also a clear call, by all in attendance, for clarity and flexibility in the next round of rules. Suggestions included: (i) modifying the rules to provide more flexibility to investors when exiting Qualified Opportunity Fund (QOF) investments, which is currently limited to a sale of the QOF investment itself; (ii) minimizing sourcing and location rules for OZ business income; and (iii) allowing QOFs to reinvest interim gains within a reasonable...

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