WELLSVILLE AREA CHAMBER OF COMMERCE: Follow-up from Congressman Reed

By Press release submission

Apr 7, 2020

Wellsville Area Chamber of Commerce issued the following announcement on April 1

Good afternoon,

Thank you to those who joined us during our call today. We appreciate the continued communication and feedback with regards to what you are all facing, and we appreciate everything that you are doing to help our communities through this crisis. As a follow-up, I wanted to provide additional information regarding the Department of Treasury and the Small Business Administration’s effort to implement the Paycheck Protection Program, as well as a brief summary of the CARES Act that was signed into law last week.

Shortly after our call, the Treasury Department released this press release regarding implementation of the Paycheck Protection Program with information for lenders available here. Additional information, including an application for borrowers, can be found here.

We also wanted to provide you with local SBA contacts as a resource if needed.

Syracuse District Office (Elmira Branch Office)

Bernard J. Paprocki, District Director (Bernard.Paprocki@sba.gov)

333 E. Water Street 4th Floor

Elmira, NY 14901

Phone: 607-734-8130

Buffalo District Office

Franklin J. Sciortino, District Director (Franklin.sciortino@sba.gov)

130 S. Elmwood Avenue Suite 540

Buffalo, NY 14202

716-551-4301

Buffalo District Office (Rochester Branch Office)

Virginia Smith, Rochester Branch Manager (Virginia.smith@sba.gov)

100 State Street Room 410

Rochester, NY 14614

585-263-6700

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

Business Tax Provisions

• Employee Retention Tax Credit: a refundable payroll tax credit equal to 50% of employee’s wages on the first $10,000 of compensation, including health benefits. The credit is limited to wages paid or incurred from March 13, 2020 to Dec. 31, 2020. This credit is also limited to employers whose businesses were fully or partially suspended due to COVID-19, or whose gross receipts declined by more than 50% when compared to the same quarter last year. It also does not apply to small businesses taking a loan under the Paycheck Protection Program.

• As a hypothetical scenario purely for the sake of illustration. Individual cases will be determinate upon individual factors: an employer has 20 employees, each making $5,000 per month including health benefits. The employer can take a $2,500 per month credit for each employee for a total monthly credit of $50,000. In this scenario, the employees will hit the $10,000 cap after the second month. Therefore, the employer can take this credit for two months for a total benefit of $100,000.

• Delays Payroll Tax Payments for Employers: Employers would be able to delay the payment of their 2020 payroll taxes until 2021 and 2022, leading to approximately $300 billion of extra cash flow for businesses.

• Restores Supports for Businesses Suffering Losses: The bill also allows businesses to carry back losses from 2018, 2019, and 2020 to the previous 5 years, which will allow businesses access to immediate tax refunds.

• Encourages Businesses to Invest in Improvements: The bill would fix cost recovery for investments in Qualified Improvement Properties, which will allow businesses that made these investments in 2018 and 2019 and receive tax refunds now.

Small Business Provisions

• Paycheck Protection: Forgiveness For Small Business Loans for Keeping Employees: Through the SBA’s existing 7(a) loan program, the bill creates a Paycheck Protection Program for small employers, self-employed individuals, and “gig economy” workers, with $350 billion to help prevent workers from losing their jobs and small businesses from going under due to economic losses caused by the COVID-19 pandemic. The “Paycheck Protection Program” would provide 8 weeks of cash-flow assistance through 100% federally guaranteed loans to small employers who maintain their payroll during this emergency. If the employer maintains payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. This proposal would be retroactive to February 15, 2020, to help bring workers who may have already been laid off back onto payrolls.

• Flexibility with Disaster Loans: Businesses that have already taken advantage of the SBA’s Economic Injury Disaster Loans will have the opportunity to “re-finance” those loans into the Paycheck Protection Program.

• Debt Relief: For six months, SBA is required to pay all principal, interest and fees on all existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs for six months.

Economic Stabilization

• $454 billion for loans, loan guarantees, and investments in support of lending facilities established by the Federal Reserve for the purpose of providing liquidity to businesses, states, or municipalities through purchasing obligations or other interests directly from issuers of such obligations or other interests.

• The bill cuts red tape to ensure that banks have room to provide the resources businesses need.

• Authorizes the FDIC to fully guarantee both noninterest-bearing transaction accounts, and debt of solvent insured depositories and depository institution holding companies. NCUA is given authority to temporarily increase share insurance coverage for noninterest-bearing transaction accounts.

• Temporarily aligns the exemption to the OCC’s lending limits for financial institutions and nonbank financial companies, and temporarily authorizes the Comptroller of the Currency to exempt any transaction from the lending limits, if the exemption is in the public interest.

• Requires the Federal banking agencies to temporarily reduce the Community Bank Leverage Ratio (CBLR) for qualifying community banks from 9% to 8% and provide for a reasonable grace period if a community bank’s CBLR falls below the prescribed level.

• A financial institution or federally-insured credit union may temporarily elect to suspend requirements under U.S. GAAP for loan modifications related to the coronavirus pandemic, and suspend any such determination regarding loans modified as a result of the effects of the coronavirus.

• Optional temporary delay of the Current Expected Credit Losses (CECL) standard.

• Temporarily enhances access to the Central Liquidity Facility (CLF), including for corporate credit unions, to meet liquidity needs and also increases resources available to meet liquidity needs through the Facility.

• Requires that furnishers to credit reporting agencies who agree to account forbearance, or agree to modified payments with respect to an obligation or account of a consumer that has been impacted by COVID-19, report such obligation or account as “current” or as the status reported prior to the accommodation during the period of accommodation unless the consumer becomes current.

Contact information:

Tom Reed

tjwreed@yahoo.com

607-684-1963

David Bridges

David.Bridges@mail.house.gov

202-870-7330

Alison M. Hunt

District Director

Congressman Tom Reed

89 West Market Street

Corning, NY 14830