Tracking RESTAURANTS & HEROES Act Updates
If you’re a restaurant operator who needs economic relief to keep your business afloat due to the coronavirus pandemic, the good news is that there’s still a possibility of assistance from the federal government. But tracking the status of the RESTAURANTS Act and HEROES Act isn't easy when you're preparing your actual restaurant for what's already shaping up to be a winter of big COVID-19 spikes.
That's where we come in. We've broken down the key facts you need to know about the coronavirus relief measures making their way through the U.S. federal legislature, and will be updating this article with new developments as they become available. So stay safe—and stay tuned.
What are the HEROES and RESTAURANTS Acts?
The HEROES Act is the U.S. House of Representatives' omnibus proposal for stimulus relief to offset the economic damage wrought by the coronavirus pandemic. HEROES stands for "Health and Economic Recovery Omnibus Emergency Solutions." There are two versions of the HEROES Act; version 1.0 is a $3.4 trillion package, while version 2.0 is a pared-back $2.2 trillion package.
The RESTAURANTS Act is an earmark within HEROES Act 2.0 that would designate economic relief funds for restaurants. RESTAURANTS stands for "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive." The provision would grant $120 billion to bring relief specifically to the restaurant industry.
What's the current status of coronavirus relief for restaurants?
The HEROES Act 2.0 (which includes the RESTAURANTS Act) passed the U.S. House of Representatives in October. To become a law, it must be passed by the Republican-majority Senate. The U.S. Senate returns in session in December but some observers are not optimistic that there will be any relief before late January, though. "Though both sides are calling for compromise, neither seems willing to budge on its stance, so it remains unclear if new legislation will be passed before the Jan. 20 inauguration of President-elect Joe Biden," reported CNET on November 18.
How has federal coronavirus relief progressed so far?
How did we get here? Good question. In April, the Democrat-controlled House of Representatives passed the $3.4 trillion HEROES Act, which would have offered relief for restaurants and other small businesses. The House also passed another round of $1,200 stimulus checks, pay raises for frontline workers, and continued $600-a-week unemployment benefits through January 2021. The small business aid portion of the HEROES act did not pass in the Senate.
In September, House Democrats presented their second attempt at a coronavirus relief act, this time with a reduced price tag of $2.2 trillion. Part of this second HEROES Act is extremely relevant to our interests: This new HEROES Act has earmarked $120 billion in grants intended to bring relief specifically to the restaurant industry. Named the "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive" Act (aka the RESTAURANTS Act), this is intended to provide financial assistance for, you guessed it, bars and restaurants.
Here's the good news: The big difference between this new RESTAURANTS Act and the PPP loans from the spring is that the new act has been designed specifically and exclusively to help locally-owned restaurants, not large chains. The funds can only be accessed by restaurants with fewer than 20 locations.
Just as importantly, the act also focuses on communities that are especially vulnerable in this moment. For the first 14 days, it will “prioritize awarding grants to marginalized and underrepresented communities, with a focus on women- and minority-owned, and women- and minority-operated eligible entities." Additionally, restaurants that make over $1.5 million annually are not eligible for those first couple of weeks. The act can't come a moment too soon—as of September, more than 100,000 restaurants closed nationwide over the six months prior. The Independent Restaurant Coalition declared in September: "Congress must quickly pass this COVID-19 relief proposal and give America's 500,000 independent restaurants a fighting chance to survive."
So who gets the money, and how? Eligibility will be based on the difference between your 2019 revenue and your estimated 2020 revenues for each quarter. This time, should the act pass, grants will be awarded to restaurants that are struggling and need the funds.
Though the HEROES Act 2.0 passed the House in October, the Republican-majority Senate has yet to take it up. Democrats believe that the best chance for greater relief packages is for Democrats to eke out a Senate majority in 2021. Thus the January runoff elections for Georgia's two U.S. Senate seats might delay the passing of the act.
The HEROES Act is most likely to change from now until it passes but it is being positioned by both Senate Minority Leader Charles Schumer and House Speaker Nancy Pelosi as the starting point for new Covid-19 relief legislation.
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