The stimulus package adds $27 billion to an emergency fund that could give a boost to dozens of projects by pharmaceutical companies and academic groups developing drugs and vaccines against coronavirus. The emergency fund received a smaller amount of funding under a coronavirus response act signed earlier in March. There is no Covid-19 vaccine, but dozens are in development.
The package allows the government to take steps to ensure that products developed with the emergency funding will be "affordable in the commercial market," but that these steps shouldn't delay development of the products.
The bill also includes provisions to increase reporting of potential shortages from drug manufacturers and companies that make active pharmaceutical ingredients, which are the building blocks of prescription drugs. Many of these raw materials are produced overseas and drawn more attention during the virus outbreak. Companies that make respirators and other medical devices would be required to report to the federal government potential supply chain interruptions.
--Peter Loftus and Jared S. Hopkins
The hotel industry last week asked the White House for a $150 billion financial-aid package, targeted specifically for hospitality companies. What it got instead from the stimulus bill is a patchwork of loans, grants and tax help, much of it through the $350 billion in loans and grants for small businesses. The majority of U.S. hoteliers qualify as businesses with fewer than 500 employees, making less than $35 million in annual revenue.
The lodging industry even scored a victory in getting language in the Senate bill that defined each individual hotel as its own business. Hotel owners with several properties had been concerned that they would not qualify as a small business because taken together, all their properties would have pushed them over the current Small Business Administration's definition.
The federal boost in unemployment insurance will help the many hotel employees who have been furloughed across the U.S. Larger hotel companies can apply for loans through the Treasury Department's economic stabilization fund. But few in the lodging industry expect travel to bounce back by late spring, or even soon after.
For larger movie theaters, many of which are expected to stay closed as long as government guidance limits the number of people who can gather in one place, the stimulus bill's loan guarantee fund could help major chains pay leases or mortgages that are still due for the closed operations, or pay suppliers with bills for everything from popcorn to custodial supplies, said Patrick Corcoran, spokesman for the National Association of Theatre Owners trade group.
Small and midsize chains are more likely to take advantage of the bill's provisions for small businesses, especially those looking to compensate workers not collecting a paycheck with the theater closed. A majority of the sector's 150,000 workers in the U.S. are hourly wage employees, Mr. Corcoran said.
The music industry stands to benefit from the bill's provisions that expand unemployment and small-business loans to independent contractors and sole proprietors. Now, session musicians, songwriters and gig workers at venues and on tours that were postponed or canceled will be eligible to apply for such benefits. Charitable organizations affiliated with the music business could also receive grants from the new funding for the National Endowment of the Arts.
"This is a huge lifeline for musicians right now," said Mitch Glazier, chief executive of the Recording Industry Association of America, a trade organization that lobbied on behalf of some 40 music industry companies. "For an independent contractor to get full unemployment benefits during a time of no work is the difference between them being able to stay a musician or not."
The financially strained U.S. Postal Service is getting a $10 billion Treasury loan to help the mail carrier during the pandemic. That should be welcome news for Amazon.com Inc., United Parcel Service Inc. and, to a lesser extent, FedEx Corp., which rely on postal workers for last-mile delivery in certain places. The Postal Service is only allowed by law to raise its net debt by $3 billion a year, so the bill loosens that restriction. But it does come with some strings attached. Mainly, the Postal Service can only use the financing for operating expenses and not to pay down outstanding debt. The bill also requires the Postal Service to prioritize medical shipments and allows temporary delivery points to protect workers and recipients of mail.
Private-equity firms will likely find it a challenge to get access to stimulus funds. Based on available details of the stimulus package, private-equity-owned businesses wouldn't be explicitly barred from receiving assistance. But government lending requirements could prevent them from unlocking the aid, say lawyers, lobbyists and regulatory experts. In most cases, "I don't think they should be thinking of this federal money as a savior," said Howard Glazer, a partner at Ropes & Gray LLP who advises private-equity firms.
National passenger railroad Amtrak secured about $1 billion to cover revenue losses related to the coronavirus. The railroad industry won enhanced unemployment benefits that account for its workers not being covered under traditional state-run unemployment programs. Railroad workers instead receive unemployment benefits under a program administered by the Railroad Retirement Board. The bill removes a seven-day waiting period to collect unemployment and provides $50 million to cover the benefits tied to that waiver. It also provides $425 million to double biweekly unemployment payments to $1,200 through July.
Retailers hastened a correction that was already in the works to a drafting error in the 2017 Tax Cuts and Jobs Act that required them to expense property improvements over 39 years, instead of in the first year as was initially intended. Because of the mistake, retailers, along with restaurants and hotels that made such improvements over the past two years, overpaid their taxes by as much as $30 billion, according to David French, the National Retail Association's senior vice president of government relations. The bill will allow that money to flow back to these companies. But the aid is far short of what designer Tory Burch and other retail CEOs had lobbied for, including direct cash infusions so that they can continue to pay workers while stores are closed, rent relief and the waiver of duties and tariffs.
Restaurant owners were encouraged that a range of operations were set to be eligible for small-business loans. Previous versions of the loan provision had capped the employee head count at 500, smaller than many franchised operations, trade groups said. Now, most franchisees should qualify for the program, they said.
"It's a pretty huge win for franchisees across the board," said Matthew Haller, senior vice president for government relations at the International Franchise Association.
Mitch Cohen, owner of three Jersey Mike's Subs shops in Suffolk County, N.Y., said the stimulus could help keep his business afloat, if it gets to business owners soon. "How fast are the funds going to come to the front lines, that's the next concern," said Mr. Cohen. Brandon Robertson, a Kansas-based owner of nine KFC restaurant locations, said his biggest hope is to get funding to keep all 140 of his employees. "We don't want to have to start over," said Mr. Robertson, a franchisee of the Yum Brands Inc. division.
The deal would allow businesses and nonprofits with up to 500 workers in a single location to apply through qualifying banks for loans backed by the Small Business Administration. The loans would convert into grants that don't have to be repaid for amounts spent on items such as payroll, rent or utilities, with the grants reduced when workers are laid off. The loans would be capped at $10 million and cover wages up to $100,000 a year.
PERSONAL FINANCE AND TAXES
The law ensures that people who file for bankruptcy don't have to use stimulus checks to repay past debt, and it extends the time that bankrupt people have to repay a portion of their debt as a condition to getting a fresh start. The current repayment time limit is five years; the bill extends the repayment time frame to seven years.
--Katy Stech Ferek
Consumers who fall behind on their debt payments won't necessarily take a hit on their credit reports. The bill requires lenders that allow struggling consumers to defer or skip loan payments to report the borrowers as current on their payments, even if they are not. Most consumers who were behind on their debts before the coronavirus crisis will continue to be reported as delinquent.
The bill requires companies that service federally backed mortgages to grant a forbearance of up to 360 days to borrowers who say they have been harmed by the coronavirus outbreak. Servicers are prohibited from initiating foreclosure and processing foreclosure-related evictions for 60 days beginning March 18. Owners of multifamily properties can request a forbearance of up to 90 days, during which tenants cannot be evicted for nonpayment of rent or other fees.
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