Banking and Business Monthly – December 2020

A.       Congress Passes $900 Billion Pandemic Relief Bill

Congress has reached an agreement on a new $900 billion COVID-19 pandemic relief package. The Consolidated Appropriations Act, 2021 expands and extends several critical provisions of the CARES Act to deal with the emerging financial and health care crisis. The final bill includes neither the funding for state and local governments that Democrats sought nor the corporate liability protection from COVID-19-related lawsuits that Republicans favored. Below is a summary of key provisions for individuals, businesses and employers:

Individuals

• Individuals are to receive direct stimulus payments of $600. Eligible families would receive an additional $600 per child. The payments start phasing out for individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not receive anything. The income thresholds would be doubled for couples. The amounts will be based on 2019 incomes. Those who filed their 2019 tax returns will receive their money automatically, as well as Social Security recipients and those who uploaded their bank account information using the IRS’ online portal to receive their first payments. ndocumented immigrants who don't have Social Security numbers remain ineligible for the payments. But in a change from the first round, their spouses and children are now eligible as long as they have Social Security numbers.

• An additional $300 per week in unemployment benefits, including for the self-employed, gig-economy workers and others in nontraditional employment, through March 14, 2021, with the maximum period for state-paid benefits extended to 50 weeks.

• $25 billion for rental assistance and an eviction moratorium extension to January 31.

• $10 billion to support child care providers.

Businesses / Employers

• New funding for first-time and so-called “second draw” forgivable loans to eligible businesses under the Paycheck Protection Program (PPP), with dedicated set-asides for very small businesses and lending through community-based financial institutions. The second loans would be limited to those with fewer than 300 employees that have seen drops of at least 25% of their revenue during the first, second or third quarter of 2020. It would also reduce the amount a borrower can receive from $10 million to $2 million.

• Expanded PPP-eligible expenses (for example, certain operating expenses, property damage costs, supplier costs and worker protection expenses).

• Expanded PPP eligibility for nonprofits, local newspapers, and TV and radio broadcasters.

• Clarifies tax treatment of PPP loans (allowing for deductibility of expenses paid with PPP proceeds), certain loan forgiveness and other financial assistance under COVID-19 legislation.

• Simplifies the forgiveness of PPP loans under $150,000.

• New targeted Economic Injury Disaster Loan grants from the Small Business Administration (SBA) for businesses in low-income communities.

• Continued SBA debt relief payments.

• Dedicated $15 billion funding for live venues, independent movie theaters and cultural institutions that have lost at least 25% of their revenues. The initial grant can total up to $10 million per eligible business. A second grant, worth half the amount of the first, may also be available.

• An extended and expanded retention tax credit for eligible employers that continue to pay employee wages during COVID-19 closures or after experiencing reduced revenue.

• Extended tax credits for paid sick and family leave.

• Extended mandatory paid sick and family leave for qualifying COVID-19-related reasons.

• 100% business meals tax deduction for 2021 and 2022 for food purchased from restaurants.

• Extended repayment period for deferred payroll taxes.

The foregoing is just a quick summary of the existing bill. If you have questions regarding it, please call us at (847) 705-7555 or visit www.lavellelaw.com and follow the online instructions to speak to one of our attorneys.

B.       Illinois Supreme Court Issues New Order for Eviction Cases

On December 22, 2020, the Illinois Supreme Court issued a new order in eviction cases.  The order is a follow-up to the order the Court issued in May setting forth the requirements for any landlord seeking to evict a tenant from a dwelling unit covered by the CARES Act.

While certain provisions of the CARES Act eviction moratorium have sunset (but see above regarding a possible extension), Governor Pritzker’s most recent executive moratoriums departed from previous orders and changed the parameters for the state’s eviction moratorium. This new order is intended to clarify how courts should handle the commencement of eviction actions while the Governor’s moratorium is in effect. The new order sets forth the process for eviction actions during this time and includes a certification form that all landlords must append to any eviction complaint filed until the moratorium expires. If the judge determines that the complaint does not meet the requirements of the moratorium, the eviction complaint will be dismissed without prejudice, the court file will be sealed, and any future refiling fee will be waived. This protects tenants from erroneous filings and allows landlords to correct any errors by permitting them to refile without incurring court costs.

The order also states that the Court makes no ruling regarding the validity of the Governor’s moratorium and presumes its constitutionality absent a successful legal challenge. It is effective immediately and is available with the certification form here.

Happy Holidays to all!