SCGA Public Affairs

Update: Federal Covid-19 Relief Package

Tuesday, December 22, 2020

As all are now aware, Congress has passed a $900 billion relief bill that awaits only President Trump’s signature in order to take effect. The vote on the final compromise package was lopsided with 359 of the 435 House members and 92 of the Senators in favor.

In very brief, the generic particulars are as follows:

  • Provides $284.5 billion to reopen and strengthen the Paycheck Protection Program (PPP) for first and second-time borrowers.
    • Allows small businesses to receive a second PPP loan if the business has less than 300 employees and can demonstrate a revenue reduction of 25 percent.
    • Increases the PPP loan amount for Restaurants and Hotels from 2.5x payroll to 3.5x, providing an extra month’s worth of payroll support.
    • Codifies rules for faith-based organizations and churches to ensure they keep their eligibility.
    • Expands PPP eligibility to include 501 (c) (6)’s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations.
    • Simplifies the PPP loan forgiveness application for loans under $150,000.
    • Allows employers to deduct PPP related business expenses and expands list of eligible expenses to include:
      • Software, cloud computing, and other human resources and accounting needs
      • PPE
      • Covered supplier costs
  • Repeals a provision from the CARES Act requiring PPP recipients to deduct their EIDL advance from their PPP loan forgiveness amount.
  • Adds $20 billion to the Economic Injury Disaster Grant/Loan (EIDL) program.
  • Extends the repayment period of deferred payroll taxes through December 31, 2021. Penalties and interest on deferred unpaid tax liability will not accrue until January 1, 2022.
  • $600 stimulus checks per individual/child ($1200 per married couple).
    • Capped at $75,000 gross adjusted income per individual ($150,000 for married couples)
    • Must have a valid social security number to qualify
    • Eligibility for stimulus checks will be determined using 2019 tax information.
  • Unemployed individuals receive an additional $300/week from Dec. 26, 2020 to March 14, 2021.
  • Provides $25 billion of assistance to tenants in arrears on their rent and extends until January 31, 2021 a federal eviction program.

There are a number of other features in the bill, including monies for vaccines, testing and tracing, as well as specific industries such as airlines, banks, entertainment venues, farms, and mass transit.

With respect to golf, there is one thing of significant consequence in the bill and three things of consequence that are not. In the bill this time is PPP eligibility for 501 (c) (6) corporations, which is the tax status of virtually all of the game’s nonprofit institutions – e.g., state/regional golf associations, PGA Sections, GCSAA Chapters. Not in the bill are the following: 1) PPP eligibility for 501 (c) (7) corporations, the tax status of the nation’s private golf clubs, albeit they continue to be eligible for participation in the EIDL program; 2) COVID-19 liability protection/insulation for businesses; and 3) monies for the nation’s cash strapped and struggling state and local governments. All three exclusions affect the golf community to varying degrees of impact.

For those interested in the specifics of 501 (c) (6) eligibility in the PPP, please click here to read those specifics drawn verbatim from the 5,600-page bill.

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Under the terms of the state’s “stay at home” order, Region 5 (Southern California) comes up for its initial 3-week review Monday. The Regional “stay at home” orders have a mandatory 3-week lifespan, after which they can be lifted only if the ICU capacity in a subject Region is projected to exceed 15% four weeks out. From the actual order, “the order will remain in effect until the region’s projected ICU capacity is equal or greater than 15%,” an assessment that is to be made “approximately” twice per week after the initial 3-week mandatory period.

It doesn’t take a genius to know that Region 5 will fail this test miserably next Monday and is likely to fail it well into January. But we share the “test” with you now, because we don’t understand and we doubt that anyone understands whether the order as written requires a Region to remain under the order for a set period of time following the initial calculation or whether the restrictions can be lifted as soon as projections come in above the established threshold. We suspect the former, if for no other reason than to avoid yet another flip-flop injurious to business, but it’s just not clear. And we would hope that at least one lesson the state has learned since March is the importance of clarifying these kinds of questions well before the moment comes to construe the language that raises them.

Having written all of that, we will stand by our previously issued conclusion that the form of limited recreational golf now being played across Southern California’s 10 counties is highly likely to hold for the duration of the “stay at home” order. And the best way to ensure that we are proven right is for golf facilities and golfers to pay scrupulous heed to the social distancing and common touch strictures in place under all applicable state and county orders.

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Just as normative medical emergencies don’t take holidays to accommodate pandemics, the matters of relevance to the golf community over and above the matters associated with COVID-19 also don’t take holidays.

This week the U.S Drought Monitor reports that areas of extreme drought have expanded in Southern California. The region has received only 25% of its normal rainfall after last year’s low precipitation year. Ninety-five percent (95%) of California is in at least a condition of moderate drought. The Sierra snowpack is at only 38% of normal for mid-December, and the areas of the Colorado Basin contiguous to California (Southern Nevada and Arizona) are in a state of “exceptional drought.”

Given that Southern California is dependent upon both the Sierra snowpack and the Colorado River Basin for much of its water, we could use some rain and snow in the 1st quarter of 2021. There is no reason to panic; December is often a poor harbinger of a year’s precipitation totals. But if those rains and more importantly those Sierra snows don’t materialize, our emergence from the COVID crisis will be met by yet another in an increasingly long series of droughts. The good news: Droughts have become more nuisance than crisis as the game has evolved effective coping mechanisms. The bad news: If a drought is severe and/or long-lasting enough, all bets are off.

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New Year’s wish: Fewer of these “Updates,” because there’s so much less to update!

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