Legislative Actions

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Federal Actions

Phase III (H.R. 748 – Legislative Vehicle for Coronavirus Aid, Relief, and Economic Security (CARES) Act)

Status: Signed into law March 27

CRE- / employer-related provisions

  • Provides a technical correction to the Qualified Improvement Property (QIP) depreciation drafting error from the 2017 Tax Cuts and Jobs Act (TCJA). The error resulted in a 39-year depreciation period for QIP, rather than the 15-year period – eligible for immediate expensing – that was intended. For real estate firms that elect out of business interest deduction limitations, the error results in a 40-year depreciation period for QIP, rather than the intended 20-year period.

  • Temporarily suspends the TCJA’s loss limitation rules, and allows a business’ Net Operating Loss (NOL) from 2018, 2019, and 2020 to be carried back 5 years. However, REIT income is not eligible for this benefit. 

  • Fixes another TCJA drafting error, related to NOLs, and ensures carryforward and carryback provisions would be effective for NOLs arising in tax years beginning – not ending – after December 31, 2017. (For firms with tax years not aligned with the calendar year, the original language imposed an 80 percent cap on NOL carryforwards for a year before the TCJA was enacted, contrary to the intent of Congressional tax writers.)

  • Authorizes $350 billion in federally-guaranteed Small Business Administration (SBA) 7(a) loans. Modifies the 7(a) loan program by allowing all or a portion of the loan to be forgiven if the business maintains its payroll; expands the eligibility requirements for loans to include businesses with 500 or fewer employees (or the number of employees per SBA’s size standards, if greater); increases the cap on 7(a) loans, from $2 million to $10 million (and creates a new formula that calculates loan eligibility based on payroll costs incurred); specifies that such loans may be used to cover payroll, mortgage payments, rent, utility costs, and other obligations; waives certain collateral and personal guarantee requirements; allows for the deferment of such loans for at least 6 months; and sets their maximum interest rate at 4 percent.

  • Excludes from income the cancellation of emergency small business loan debt, which would otherwise be taxable.

  • Increases the cap on the deductibility of interest expense, from 30 percent of EBITDA for taxable years beginning in 2019 and 2020, to 50 percent.

  • Allows employers to defer their share of payroll taxes through the end of the 2020 calendar year, with 50 percent of the deferred amount due in 2021, and the remainder in 2022.

  • Provides an employee retention credit (applied against the employer’s 6.2 percent share of payroll taxes) for businesses ordered by a governmental authority to partially or fully close. The credit covers wages up to $10,000 per employee, per quarter. However, employers who receive a small business interruption loan are not eligible for the credit.

  • Accelerates the ability of certain companies to recover Alternative Minimum Tax (AMT) credits, to more quickly obtain additional cash flow. The corporate AMT was repealed by the TCJA, but AMT credits were made available as refundable credits over several years.

Other provisions

  • In addition to the $350 billion in SBA loans outlined above, provides $250 billion for unemployment insurance; $500 billion for larger companies suffering economic damage (with $50 billion specifically directed to airlines); $150 billion for state and local governments; and $130 billion for hospitals, medical supplies, and other healthcare funding.

  • Issues payments to taxpayers in the amount of $1,200 per person, and $500 per child, (which begin to phase out at $75,000 and $150,000 for single and joint filers, respectively). Relaxes rules on retirement account withdrawals. Creates a new, $300 above-the-line charitable deduction, for those claiming the standard deduction.

Phase II (H.R. 6201 – Families First Coronavirus Response Act)

Status: Signed into law March 18, 2020

CRE- / employer-related provisions

  • Requires that businesses provide 12 weeks of protected leave to employees unable to work or telework because their child’s school or care provider has closed due to the public health emergency.

  • Deems all employees eligible for paid sick leave if unable to work due to one of several conditions related to COVID-19, including quarantine/isolation orders, or to care for an affected individual. Allows employees to use emergency paid sick leave to care for themselves, and sets minimum compensation figures, based on varying circumstances.

  • Establishes tax credits for businesses with affected employees, in the amount of up to $200 per day for each individual, and $10,000 total per quarter.

  • Note: these mandates apply to firms with fewer than 500 employees. Those with 50 or fewer employees may be exempt.

Other provisions

  • Allocates additional funding for nutrition and food assistance programs.

Phase I (H.R. 6074 – Coronavirus Preparedness and Response Supplemental Appropriations Act)

Status: Signed into law March 6, 2020

CRE- / employer-related provisions

  • Enables the Small Business Administration to issue an Economic Injury Disaster Loan declaration, which makes loans (up to $2 million per loan) available to small businesses in designated areas.

Other provisions

  • Allocates additional funding to federal health agencies, and allows for over-the-phone consultations between Medicare recipients and their providers

Federal Reserve Actions

March 3: Target rate for federal funds lowered 0.5 percentage points, to a target range of 1% to 1.25%.

March 15: Target rate for federal funds lowered by 1.0 percentage point, to a target range of 0% to 0.25%; FOMC announces increase of holdings of Treasury securities by at least $500 billion and holdings of agency mortgage-backed securities by at least $200 billion.

March 22: Regulatory agencies issue joint guidance encouraging financial institutions to work with borrowers affected by COVID-19

March 22: Unlimited expansion of bond purchasing programs announced (modifying March 15 announcement of the purchase of at least $500 billion of Treasury securities and $200 billion of mortgage-backed securities).

  • Two new lending facilities created to support credit to large employers: Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.

  • Third facility, the Term Asset-Backed Securities Loan Facility (TALF), created to enable the issuance of asset-backed securities (e.g. student, auto, and credit card loans, and loans guaranteed by the Small Business Administration).

  • Announcement of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses, complementing efforts by the SBA. That program is expected to be unveiled soon.

Other Regulatory Actions

March 13: The Treasury Department and Internal Revenue Service (IRS) announced relief for taxpayers amid the COVID-19 outbreak, by allowing federal income tax payments due April 15 to be postponed until July 15, 2020.

March 24: Further guidance released by Treasury and IRS clarifies the March 13 directive, and includes 24 questions and answers related to the filing deadline pushback. Notably, it states that only payments that are actually due on April 15 may be delayed (i.e. June 15 estimated tax payments are not postponed at this time).


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