Your Congress in Action: Vol. 19

12/22/2020 1:51 PM | ACRAsphere Blog Team

Your Congress in Action is a series that highlights the Capitol Hill news that affects CRM firms the most. Be sure to subscribe to the ACRAsphere to ensure you don't miss an update.

As a year none of us will forget (try as we might) comes to an end, a flurry of activity in Washington and Wilmington, DE, carries a mix of good and not-so-good news for the CRM industry.

In DC, Congress has reached agreement on a $908 billion COVID relief package, which both chambers passed on Monday, sending it to the President. The good news: the plan includes $325 billion in small business relief with a new round of Paycheck Protection Program (PPP) loans. And it sets aside $12 billion for minority-owned and very small businesses. The plan also would provide $600 stimulus checks to many individuals and children and a $300 weekly unemployment insurance boost.

More good news: The bill also blocks an inadvertent tax increase on small business in 2021. When Congress created the PPP last spring, they allowed for loan forgiveness if certain conditions were met; they also specified that the proceeds from forgiven loans would be exempt from gross income. But the IRS subsequently ruled that business expenses made via a forgiven loan would not be tax deductible like other ordinary business expenses. What’s more, the IRS said that businesses could not deduct 2020 expenses even if they had yet to receive loan forgiveness, but expected to in 2021.

The practical effect of the IRS decision would be that millions of companies could face as much as a 37-percent tax increase when they file their 2020 taxes – including many firms that had their PPP loans forgiven without knowing their expenses would not be deductible. A nasty tax surprise like that would hit companies right as COVID-related lockdowns and work stoppages threaten to increase as coronavirus infection rates climb.

As ACRA President Nathan Boyless and Society of American Archaeology President Joe Watkins said in a letter to Hill lawmakers last week, “As the pandemic continues to exact a toll on the nation’s economy, small businesses need additional support, not a massive tax bill that runs counter to the original intent of Congress in creating the PPP loans.”

Thankfully, Congress listened to ACRA, SAA and a host of other business groups, and the COVID relief package clarifies that expenses incurred via PPP loans that are forgiven will still be tax deductible.

The emerging package is not all good news, however. Plans to provide additional financial relief to state and local governments was dropped, due to disagreements between the parties on liability protections for companies. The lack of state and local relief means that governments across the country will face potential budget crunches without any additional federal help. For State Historic Preservation Offices, tight state budgets can mean layoffs or cutbacks, which in turn hurts their states’ ability to facilitate Section 106 reviews, support sites on the National Register of Historic Places and the Historic Tax Credit Program. State and federal aid will have to wait until next year.

The COVID relief package is being welded to a $1.4 billion bill to fund government agencies and operations for the remainder of the current fiscal year, which runs until next September. That plan also carries some good news for preservation: the Historic Preservation Fund, which underwrites a range of preservation activities, including supporting State and Tribal Historic Preservation Offices, will receive more than $25 million than in the previous fiscal year. The Fund is paid for by royalties from oil and natural gas on the federally owned lands; while the Fund can legally receive up to $150 million per year, Congress normally provides less. In fiscal 2021, Congress will provide $144 million, closer to the full amount than ever before. Lobbying efforts by ACRA and other historic preservation advocates has made an enormous difference.

Meanwhile, a short Amtrak ride from the nation’s capital, President-elect Joe Biden continues to fill out his Cabinet and senior positions. On Thursday, it was revealed that he has selected New Mexico Congresswoman Deb Haaland as his Secretary of the Interior.

Haaland would make history as the first Native American head of the Cabinet agency that oversees, among other things, programs relating to Native Americans, Alaska Natives, Native Hawaiians, and territorial affairs. Haaland is a member of the Laguna Pueblo people, and she has long advocated for the preservation of historic and sacred land. As NBC News reported, “In 2016, when she was the chair of the New Mexico Democratic Party, she traveled to the protests against the Dakota Access pipeline near the Standing Rock Indian Reservation in North Dakota to show solidarity with the demonstrators. She also led an effort as her state's party chair to divest the party from investments in Wells Fargo, over the bank's ties to the pipeline.”

Haaland became one of the first two Native American women ever to serve in the House (along with Rep. Sharice Davids (D-KS) when first elected in 2018. In the House, Haaland served as Chair of the National Parks, Forests and Public Lands Subcommittee and was a member of the Historic Preservation Caucus. If confirmed she will take over an agency that has faced numerous challenges in recent years, including low staff morale due to personnel decisions that have forced some longtime staff to relocate or leave government service.

As 2020 comes to a merciful end, federal policymakers confront a long to-do list in the new year, including ensuring speedy distribution of the COVID vaccines, reviving the economy, addressing the climate crisis, coming to grips with racial inequality and lowering the temperature on the country’s partisan passions. Last week’s negotiations on the COVID relief package show that, even in a difficult political climate, it’s still possible to get some things done. And that may be the best news we can get.

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