Following the announcement Thursday that healthcare providers in 24 states had been added to the federal vaccine mandate roster, the Centers for Medicare & Medicaid Services (CMS) announced Friday that those workers must be fully vaccinated by March 15. The 24 states joined 25 others, Washington, D.C, and territories, whose workers must have at least one COVID-19 shot by January 27, and be fully vaccinated by February 28. The mandates are based on guidance issued December 28 and follow Thursday’s U.S. Supreme Court ruling removing an earlier injunction to the mandate issued by a lower federal court.

The sweeping mandate applies to workers at hospitals and other healthcare facilities, including nursing homes and other long-term care facilities, that participate in Medicare and Medicaid programs. “Regardless of clinical responsibility or resident contact, the policies and procedures must apply to … individuals who provide care, treatment, or other services for the facility and/or its residents, under contract or by other arrangement.”

The states included in the compliance memo are Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, and Wyoming. The mandate now extends to all U.S. states except Texas, where a preliminary injunction still applies.

The CMS memo warned that, “Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility … (including) plans of correction, civil monetary penalties, denial of payment, termination, etc.”

In a ruling today, the U.S. Supreme Court allowed a federal mandate requiring healthcare workers at facilities receiving federal money to be vaccinated. The 5-4 decision means a vaccine requirement for workers at all U.S. nursing homes and other federally funded healthcare facilities issued by the Biden administration can proceed. The mandate applies to workers at hospitals and other healthcare facilities that participate in the Medicare and Medicaid programs. It would affect more than 17 million workers, according to the administration. In a separate 6 to 3 vote, the Court blocked the administration from enforcing a vaccine-or-testing mandate for large employers.

As the pandemic has continued to unfold, so has legislation and guidance on the numerous COVID-19 relief options available. Today, as businesses and nonprofit organizations focus on pandemic recovery and other challenges, the requirements of these relief programs may no longer be at the forefront of leaders’ minds. However, these requirements are equally as important as when these organizations received their relief. The following summarizes the major federal COVID-19 relief options offered and their status as of November 15, 2021. Paid Leave Under the Families First Coronavirus Response Act (FFCRA) Status: Expired September 30, 2021 From April through December 2020, certain employers were required to provide employees with paid sick leave or expanded family leave for certain COVID-19 related absences. To receive reimbursement for the required time, employers could receive a dollar-for-dollar payroll tax credit for qualified wages (including certain contributions to health insurance), which was filed on Form 941 (or Form 941-X). Through two pieces of legislation (the Consolidated Appropriations Act and American Rescue Plan Act), the same tax credits were extended until September 30, 2021, although paid leave from January 1, 2021 through September 30, 2021 was not mandated. Employers who have not reflected this pay and claimed their associated credit on their Form 941 may still choose to do so via an amended Form 941-X. For additional information, including qualifications for leave, visit the US Department of Treasury. Economic Injury Disaster Loan for COVID-19 Disaster (EIDL) Status: Available until the Sooner of December 31, 2021 or the Depletion of Funding The EIDL is available to small businesses and nonprofit organizations located in the United States and its territories, all of which have been considered a disaster area due to COVID-19. This program is a loan of up to $2 million that must be repaid directly to the SBA during a 30 year term. For-profit businesses have a 3.75% fixed interest rate while private nonprofit organizations have a 2.75% interest rate. The low-interest, long-term loan is intended to help eligible organizations overcome the disaster (or pandemic) by providing working capital to meet operating expenses. In September, SBA updated the loan program as follows:

• Borrowers can obtain the full $2 million offered by the traditional EIDL program, rather than just $500,000 used for the COVID-19 related loan (presumably due to high demand).
• Payment and pre-payment of business non-federal debt was added as an eligible use of funds.
• The deferral period was extended to 24 months from the loan origination date for all loans.
• Affiliation requirements were simplified to businesses that owners control or in which they have 50% or more ownership.
• Certain size standards for select NAICS codes were edited to increase eligibility.

While loans are still available, the Infrastructure Investment and Jobs Act, signed into law on November 15, rescinds $13.5 billion of funding from this program. In addition, the law rescinds over $17.5 billion from the Targeted EIDL Advance program, a grant program related to the EIDL for certain borrowers who were hit hardest by the pandemic. As a result, potential borrowers are encouraged to apply for loans or related increases to their loans as soon as possible as funding may not be available when the program expires on December 31, 2021. Paycheck Protection Program (PPP) Status: Lenders and SBA Accepting Applications for Forgiveness Borrowers with first draw PPP Loans likely have applied for forgiveness on those loans or have begun making payments. If a borrower has an outstanding first draw PPP loan, has not applied for forgiveness, and is eligible for forgiveness, it is not too late! Borrowers can apply for forgiveness on their loan balance at any time until the maturity date. Now, borrowers with second draw loans are likely considering how to obtain forgiveness. These borrowers are encouraged to review the SBA forgiveness applications and note key changes, including how to test potential reduction safe harbors and how to test for a wage reduction, given that the reference period has changed. Borrowers should also consider the documentation that they should maintain or submit, which may include resubmitting proof of their gross receipts decline that they used to prove their eligibility for their loan. Borrowers will once again use their lender’s PPP forgiveness portal to apply for loan forgiveness. With ten months from the end of the covered period to apply, Borrowers should not rush, but unlike the first draw, patience for more guidance is not likely needed. All anticipated guidance has been released and is available from the SBA and US Department of the Treasury. Employee Retention Credit (ERC) Status: Program Ended for Most, Filings Still Accepted The Infrastructure Investment and Jobs Act includes the retroactive termination of the ERC, meaning that qualified wages paid after October 1, 2021, are not eligible for the tax credit. However, this change is not applicable for Recovery Startup Businesses, who can continue to take the ERC on qualified wages paid through December 31, 2021. A Recovery Startup Business is defined as a business that began after February 15, 2020, earns average gross receipts of less than $1 million, and does not qualify for the ERC under the original test (which is only applicable through the third quarter of 2021). These businesses are limited to a $50,000 credit for each of the third and fourth calendar quarters of 2021. Eligible businesses who have not filed for the ERC can still do so by amending their Form 941 filings via a Form 941X for each quarter where they have paid qualified wages. As the ERC does affect income tax, it is recommended calendar year businesses calculate their ERC and file Form 941-X before the end of the calendar year. For more information about the program, visit the IRS website. Employer Payroll Tax Deferral Status: 50% Payment Coming Due 12/31/2021 From March 27, 2020 to December 31, 2020 employers had the option to defer the deposit and payment of the employer’s share of Social Security taxes and certain railroad retirement taxes. Half, or 50% of the deferred deposit, must then be deposited by December 31, 2021, and the remaining amount must be deposited by December 31, 2022 to be treated as a timely deposit. As the first deadline is quickly approaching, employers who deferred their payroll tax should ensure that they are ready to make their payment before December 31 approaches. Organizations that use a payroll processor are encouraged to contact their processor in advance to avoid any complications. For more information, visit the IRS website. Restaurant Revitalization Fund Status: Funding Depleted, Reporting due 12/31/2021 The Restaurant Revitalization Fund offered certain restaurants, bars, breweries, wineries, and similar businesses with a grant opportunity equal to revenue lost due to the COVID-19 pandemic. Many businesses that were eligible for the grants missed the opportunity due to a limited amount of funding that was quickly depleted. Those who received funds must report how much of their grant has been used against each expense category by December 31, 2021 using the Restaurant Revitalization Fund portal. Businesses unsure of eligible uses of funds can consult the Restaurant Revitalization Program Guide provided by the SBA. Shuttered Venue Operators Grant Status: Funding Depleted Live venue operators, theatrical producers, museum operators, talent representatives and other similar businesses may have applied for the Shuttered Venue Operators Grant, a grant program focused on the hard-hit entertainment industry. Depending on the award amount, businesses may be subject to certain reporting, monitoring, or auditing requirements. As a result, grant recipients should be aware of their individual requirements and ensure they fulfill them. In addition, recipients should ensure that they watch for communications from SBA, which may indicate the need for additional reporting. Grant recipients can also learn more by visiting the SBA Shuttered Venue Operators Grant relief page. Other Considerations Throughout the pandemic, many programs – at the federal, state, and local levels – became available to help businesses navigate the pandemic. Whether your business received funding from one of the listed programs or funding from any other source, consider refreshing yourself on program requirements. Many programs were implemented quickly and later evolved. Recipients must keep up to date with changing guidance and ensure they meet all requirements to obtain or retain such funding. In addition, as you spend funds, consider keeping detailed records of how each program is used. Each funding program has its own requirements, including how funds are spent. However, most prohibit a borrower or fund recipient from “double-dipping”. This means the same expense cannot be reimbursed by funds from two different COVID-19 relief programs. By reviewing program requirements and documenting the use of funds, organizations are prepared to show that their use of funds meets program requirements. For assistance with your COVID-19 relief, please contact your HBK Advisor.

The pandemic has dealt a blow to many industries and businesses, but few could say they have been as negatively impacted as long-term care. Occupancy rates are at all-time lows and operating costs at all-time highs, and everyone is relying on stimulus money to survive. What are you doing to ensure your facilities survive this “great recession”?

It is time to take a deep dive into your operations and relationships to ensure your facilities remain open in 2022 and beyond. Some basic data analytics—for example, a simple analysis comparing your per diem rate to your competitors, state or county—can be used to identify areas you need to address, not only to stay in business, but to make a profit.

Grow your bottom line

Following are five ideas for increasing your revenues:

1. How is your relationship with your pharmacy and therapy providers? Do you own these services, or partner in one of them? Small to medium-size institutional pharmacies are willing to give price breaks or minority ownership for long-term contracts with facilities. Therapy companies are willing to do joint ventures or enter into management agreements to provide their services to a facility. Managing PDPM and pharmacy is vital to operating an efficient and profitable facility. Getting in bed with your providers is a sure way to increase your bottom line.

2. Labor shortages are common, and the cost of agency is through the roof. Consider buying or starting your own hiring agency or setting up a training center to feed labor to your facilities. Maintaining your current workforce is just as important as recruiting new talent. Use analytics to identify your best and worst employees. For example, analytics allow you to identify the employees who are documenting encounters properly and those who are not. You can identify which employees create risk. Develop programs to keep the best and let the worst go.

3. Have you identified the highest paying residents in your state? Setting up specialty wings to take care of vent and dialysis patients can multiply revenues. A typical Medicare patient might pay $350 a day; a vent patient could generate $1,000. Dialysis can be done via mobile units and set up in virtually any available space in the facility, saving on transportation costs and allowing you to keep vent patients that need dialysis in your facility.

4. Keep your residents out of the hospital and in their rooms. Offer wound care services and other care options to identify and address problems before they lead to hospital visits. Offering alternative care in the facility can generate ancillary revenue and maintain your occupancy levels. Consider setting up your own ambulate service to transport disabled individuals.

5. Take advantage of the Employee Retention Credit (ERC). It is not too late, and you probably qualify. The requirements of the 2021 version of the ERC have opened the door for almost any group of facilities. Don’t fall victim to the 20 percent fee that so-called ERC specialty companies are charging. The credit can be calculated and documented for a reasonable fee.

Get the right kind of financial support

Does you accountant know your industry? Working with an industry-savvy accountant is important to any business, but it is vital to healthcare organizations. We can, for example, help you set up more complex, more productive facility-specific analytics than most LTC facility providers can do on their own.

HBK Healthcare Solutions is a dedicated team of physician practice and living assistance facility subject matter experts within HBK CPAs & Consultants, an Accounting Today Top 100 CPA firm. We have worked with healthcare providers since our founding in 1949, and our current clients include assisted living, long-term care, skilled nursing and rehabilitation single-facility and multi-facility, multi-jurisdictional enterprises. For more information or to schedule a free consultation, call me at 330-758-8613 or email me at jzarlenga@hbkcpa.com.

The U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is making $25.5 billion in new funding in COVID-19 relief available to healthcare providers. This funding includes $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients, and an additional $17 billion for Provider Relief Fund (PRF) Phase 4 for a broad range of providers who can document revenue loss and expenses due to the pandemic.

Provider Relief Fund Phase 4 payments will be based on lost revenues and expenditures between July 1, 2020, and March 31, 2021. In line with a Biden-Harris Administration commitment to supporting providers with greater needs, the PRF Phase 4 funding will reimburse smaller providers for their lost revenues and COVID-19 expenses at a higher rate than larger providers. PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP, and/or Medicare patients. According to the HHS, these bonus payments will be issued at the generally higher Medicare rates “to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.”

Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP, and/or Medicare services they provide to patients who live in rural areas, HHS noted in its September 10 release.

“In order to expedite and streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application,” the HHS release noted. “HRSA will use existing Medicaid, CHIP, and Medicare claims data in calculating payments. The application portal will open on September 29, 2021.”

In addition, HHS announced a “final” 60-day grace period for providers who fail to meet the September 30, 2021 deadline for the first PRF Reporting Time Period. While the deadlines to use funds and the Reporting Time Period do not change, “HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during the grace period.”

“We are staying abreast of developments and keeping our clients up to date, even as we await more information from HHS on these newly announced relief measures,” noted Michael DeLuca, director of HBK Healthcare Solutions. “We have worked with our healthcare practices and facilities throughout the pandemic, on their Paycheck Protection Program applications and reporting, their Employee Retention Credits filings, their access to various HHS relief programs, and their daily operational and financial challenges that have been exacerbated by the pandemic. We will remain steadfast in our commitment to serving our healthcare clients as they address the unprecedented and ongoing pandemic-related challenges.”

Highlights from the July 27 HBK webinar featuring Ben DiGirolamo, CPA, JD, HBK Principal; Donald Trummer, CPA, HBK Senior Manager and Tax Specialist; Amy Reynallt, MBA, Manager, HBK Manufacturing Solutions

Employee Retention Credits

The Employee Retention Credits (ERC) relief program has been updated twice since it was first introduced as part for the 2020 CARES Act, first by the Consolidated Appropriations Act, then under the American Rescue Plan.

• The ERC is available to employers for most of 2020 and all of 2021. It can be very valuable to your business.
• Eligibility: Qualified organizations include businesses or tax-exempt organizations that fully or partially suspended operations during any calendar quarter in 2020 or 2021 due to orders from a government authority limiting commerce, travel, or group meetings due to COVID-19, or experienced a decline in gross receipts during the calendar quarter compared to same quarter in 2019. The IRS has issued FAQs on what it means to be fully or partially shutdown.
• For 2020, gross receipts must be 50 percent less than in the comparable 2019 quarter and the benefit continues until a return to 80 percent of those receipts. For 2021, gross receipts must only be less than 80 percent of what they were in the 2019 quarter, and credits continue until receipts recover to 80 percent.
• The declines do not have to be COVID-related, just a qualifying reduction.
• The 2021 trailing test works to allow your qualification to be based on a prior quarter. If you qualify for one quarter you’re generally going to qualify for at least two.

Qualified Wages

For 2020, the ERC equals half of qualified wages, capped at $10,000 per employee. For 2021 it’s 70% of wages up to $10,000 per employee per quarter—up to $28,000 for the year. Wages paid during the entire quarter qualify.

• For businesses qualifying due to government shutdown, qualifying wages are those wages paid during the period of the shutdown.
• For 2020, if more than 100 full-time-equivalent (FTE) employees in 2019, only wages paid to those not working qualify. For 2021, if over 500 FTE employees, only wages paid to those not working qualify.

PPP & ERC

• Recipients of Paycheck Protection Program (PPP) loans can now also take advantage of the ERC.
• Organizations with 100 to 500 employees are no longer restricted to wages only of employees not working, but all employees.
• Wages and healthcare costs substantiating ERC can now be used to support PPP loan forgiveness.
• Employers can elect not to include wage and healthcare cost in computing ERC in order to maximize PPP forgiveness. You can satisfy your forgiveness requirements then maximize ERC. And if portions of your PPP loan are not forgiven, you can apply related wages to recalculate ERC.
• For the vast majority of applicants, PPP was the better option over ERC. But that changes due to the Consolidated Appropriations Act. Now you can maximize PPP expenses and free up wages over your loan amount to use with ERC.

Claiming the credit

You can amend your 2020 payroll tax returns to claim ERC or additional ERC for up to the next five years.

• For 2021, you can reduce your payroll tax deposits by the anticipated credit or wait to claim the credit.
• By administering the credit through payroll, Congress gave organizations the opportunity to first reduce the anticipated payroll tax deposit and if the anticipated credit exceeds the deposit file for a refund.

Common Issues

How to determine to file for businesses separately or aggregated? Might tie businesses together to maximize ERC, given qualifying via the single employer test. Must ensure there is no double dipping on wages and how the qualification rules apply for aggregating businesses.

• Must use the same accounting method used for your tax returns.
• Can include employer and spouse in qualifying wages but not other family members.
• Maximize non-payroll expenses and non-qualifying ERC payroll when applying for PPP loan forgiveness.
• The quickest way to get an ERC refund is by reducing payroll tax deposits.
• The ERC interacts with other tax credits. You can’t double dip on wages. Generally the ERC will deliver a better benefit dollar for dollar.

PPP

Round 1 forgiveness: Borrowers have 10 months from the end of their 24-week covered periods to submit their applications or will have to being interest and principal payments to their lenders. If your deadline is passed, you can still apply for forgiveness for the unexpired part of the loan.

• Some lenders have imposed earlier deadlines, so follow the guidance from your PPP lender. Some lenders are also re-testing originally provided loans to ensure forgiveness only on the amount of loan that accommodates the rules.
• As of July 9, the Small Business Administration is no longer requiring Loan Necessity Question Forms.
• Round 2 is governed by generally the same rules as round 1. There are some minor differences in wage calculation, and the cap for owner compensation in terms of a different time period for reference than round 1. Additional eligibility documentation is also required.
• If you’re coordinating round 2 with your ERC, it may be beneficial to at least wait until end of the 24 week period to apply wages to the program most beneficial to you.

Updates for other relief programs:

• Economic Injury Disaster Loan – Proof of hazard insurance is being requested or of the approval of the loans by the board of directors. Emails are also being sent regarding targeted EIDL grants, and some regarding loan increases of up to $500,000.
• The Restaurant Revitalization Fund is closed. More than 100,000 grants were issued and $29 billion in funding was awarded. There was controversy over the program as intended grants were rescinded. Watch for updates or new legislation.
• Shuttered Venues Operators Grant – Nearly 9000 grants totaling 6.8 billion were awarded. The SBA has been reaching out to organizations suffering 70 percent or more revenue loss in their most recent calendar quarter about supplemental grants. Program has awarded more than 99 percent of its funds.
• Families First Coronavirus Response Act COVID-19 Sick Leave – Expands eligible leave time to include COVID-19 diagnostic testing and receiving or recovering from the vaccine as of April 1, 2021.

While guidance for the Paycheck Protection Program (PPP) has slowed significantly in 2021, some updates continue to affect borrowers, particularly those applying for loan forgiveness. Borrowers should consider five key updates:

1. If you haven’t submitted your first round PPP’s forgiveness application, consider your timeline to apply.

   All Borrowers must apply for loan forgiveness, regardless of their loan size, by submitting an application for forgiveness to their PPP lender. Borrowers have ten months from the completion of the Covered Period to submit their PPP forgiveness applications, or those borrowers will begin to make principal and interest payments on their loans. All borrowers should understand when they must apply for forgiveness, as the ten month deferral period for early loan recipients may have ended or may be ending soon.

   As of now, second draw PPP loan recipients (as well as recipients of first draw PPP loans received in 2021) will have the same timeline to apply. In determining when to apply for forgiveness, Borrowers may consider their deadlines, coordination with other COVID-19 relief programs, individual business circumstances, and any instructions provided by their lender. Some lenders may not open their PPP forgiveness portals for 2021 loans until later in the year.



2. SBA drops the controversial Loan Necessity Questionnaires.

   On July 9, the SBA withdrew their requirement for the loan necessity questionnaires by notifying lenders that the loan necessity review for borrowers of loans $2 million or greater would be eliminated. These forms, Form 3509 (for for-profit borrowers) and Form 3510 (for non-profit borrowers) should no longer be requested, and form requests in progress should be closed. SBA committed to providing additional guidance, which has yet to be released.



3. All loans, regardless of size, can be reviewed.

   Borrowers should be aware that all loans, regardless of loan size, can be reviewed by SBA. Borrowers will be notified if they are reviewed, and additional documentation may be requested. All borrowers should be aware of the documentation requirements for their PPP loan. A list of documents to submit with forgiveness applications and to maintain (but that are not required to be submitted) are available on the SBA Loan Forgiveness Application Form.



4. Rumors persist regarding a direct to SBA PPP forgiveness portal.

   Several news outlets are reporting that the SBA is expected to release an online portal for PPP loan forgiveness applications, where borrowers submit their forgiveness applications direct to the SBA. For a business to use the portal, it is expected that the business’s lender must opt into the SBA platform. Until more information is available, borrowers should continue following their lenders’ processes to apply for loan forgiveness. More information is expected as early as August.



5. More simplifications for select borrowers are possible.

   News outlets are also reporting that the SBA is working to further simplify the PPP loan forgiveness process for borrowers with loans between $150,000 and $2 million. Since the program was introduced via the enactment of the CARES Act in March 2020, SBA has released nearly 100 Frequently Asked Questions, as well as over thirty Interim Final Rules and several Procedural Notices. Borrowers should continue to watch for guidance, and be prepared to follow any guidance available that may affect their loan or forgiveness.

For questions about your PPP loan, its forgiveness, or other COVID-19 relief programs, contact a member of HBK’s COVID-19 Response Team or your HBK Advisor.

Governor DeWine and Lieutenant Governor Jon Husted announced the launch of four new grant programs to help small and medium sized business recover from the economic impacts of the COVID-19 pandemic.

Food and Beverage Establishment Grant:

Eligible Businesses:

Grants will be available for eligible businesses with a NAICS code starting 722, who are considered a food service contractor, caterer, mobile food service, drinking place (bar, tavern, nightclub, etc.), full-service restaurant, limited-service restaurant, fraternal organization, coffee shop, cafeteria, buffet, snack and nonalcoholic beverage bar, or business that does not otherwise qualify for the Entertainment Venues Grant due to earning more than 50% of revenue from the sale of food and/or beverage. Eligible business must have had a decline in revenue of at least 10% as a result of COVID-19 to be eligible for the grant.

All businesses must have been in continuous operation since at least December 1, 2019 (except for interruptions caused by COVID-19 public health orders), have at least one physical location in Ohio, have a valid vendor’s licenses, food services operations licenses, and/or liquor permit, and be in good standing to be considered for the grant.

Funding Awards:

Grants of $10,000, $20,000 or $30,000 will be available to eligible businesses based on the business’s loss of revenue in 2020.

Use of Funds:

Funds can be used for personal protective equipment or other measures to protect employees, customers, or clients from COVID-19, mortgage or rent payments, utility payments, salaries, wages, or compensation (including the employer’s share of health insurance) and business supplies or equipment. Funds may not be used for tax obligations, non-business purposes, political purposes, bonuses or increased compensation for business owners, or costs incurred for which the business has or will receive reimbursement from another source.

Additional information, including additional eligibility criteria, funding details, and application information can be found at:

https://businesshelp.ohio.gov/pdf/06232021-TC-Food-and-Beverage-Establishment-Grant.pdf

https://businesshelp.ohio.gov/pdf/06242021-food-beverage-establishment-grant.pdf

https://businesshelp.ohio.gov/pdf/06212021-FAQ-Food-and-Beverage-Establishment-Grant.pdf

Entertainment Venue Grant:

Eligible Businesses:

Grants will be available for eligible businesses with a NAICS code starting 711, 712, and 713 (except for gambling venues), who are considered a theatre or dining theatre, movie theatre, indoor and/or outdoor music venue, comedy club, concert hall, spectator sports venue, museum, arts center/gallery, historical site, zoo or botanical garden, amusement or theme park, family fun center, trampoline or adventure park arcade, golf course, sports center, skiing facility, marina, recreational sports center or bowling center. Eligible businesses must have had a decline in revenue of at least 10% as a result of COVID-19 to be eligible for the grant.

All businesses must have been in continuous operation since at least December 1, 2019 (except for interruptions caused by COVID-19 public health orders), have at least one physical location, have a valid vendor’s license, food services operations license, and/or liquor permit, and be in good standing to be considered for the grant.

Funding Awards:

Grants of $10,000, $20,000 or $30,000 will be available to eligible businesses based on the business’s loss of revenue in 2020.

Use of Funds:

Funds can be used for personal protective equipment or other measures to protect employees, customers, or clients from COVID-19, mortgage or rent payments, utility payments, salaries, wages, or compensation (including the employer’s share of health insurance) and business supplies or equipment. Funds may not be used for tax obligations, non-business purposes, political purposes, bonuses or increased compensation for business owners, or costs incurred for which the business has or will receive reimbursement from another source.

Additional information, including additional eligibility criteria, funding details, and application information can be found at:

https://businesshelp.ohio.gov/pdf/06232021-TC-Entertainment-Venue-Grant.pdf

https://businesshelp.ohio.gov/pdf/06242021-entertainment-venue-grant.pdf

https://businesshelp.ohio.gov/pdf/06212021-FAQ-Entertainment-Venue-Grant.pdf

Lodging Grant:

Eligible Businesses:

Grants will be available for eligible businesses who are a hotel, motel, or bed and breakfast who experienced at least a 10% reduction in occupancy in 2020 as a result of COVID-19.

All businesses must have been in continuous operation since at least December 1, 2019 (except for interruptions caused by COVID-19 public health orders), have at least one physical location, have a valid hotel/motel license, and be in good standing to be considered for the grant.

Funding Awards:

Grants of $10,000, $20,000 or $30,000 will be available to eligible businesses based on the business’s decline in occupancy rate in 2020.

Use of Funds:

Funds can be used for personal protective equipment or other measures to protect employees, customers, or clients from COVID-19, mortgage or rent payments, utility payments, salaries, wages, or compensation (including the employer’s share of health insurance) and business supplies or equipment. Funds may not be used for tax obligations, non-business purposes, political purposes, bonuses or increased compensation for business owners, or costs incurred for which the business has or will receive reimbursement from another source.

Additional information, including additional eligibility criteria, funding details, and application information can be found at:

https://businesshelp.ohio.gov/pdf/06232021-TC-Lodging-Grant.pdf

https://businesshelp.ohio.gov/pdf/06242021-Lodging-grant.pdf

https://businesshelp.ohio.gov/pdf/06212021-FAQ-Lodging-Grant.pdf

New Small Business Grant

Grants will be available for eligible for-profit businesses that started operations at a physical location in Ohio between January 1, 2020 and December 31, 2020 and have at least 2 and no more than 25 Ohio employees paid via W2 wages as of January 1, 2021. Eligible business must be in good standing and have experienced a revenue loss or incurred unplanned costs substantially caused by COVID-19.

Funding Awards:

Grants of $10,000 will be available to eligible businesses.

Use of Funds:

Funds can be used for personal protective equipment or other measures to protect employees, customers, or clients from COVID-19, mortgage or rent payments, utility payments, salaries, wages, or compensation (including the employer’s share of health insurance) and business supplies or equipment. Funds may not be used for tax obligations, non-business purposes, political purposes, bonuses or increased compensation for business owners, or costs incurred for which the business has or will receive reimbursement from another source.

Additional information, including additional eligibility criteria, funding details, and application information can be found at:

https://businesshelp.ohio.gov/pdf/06232021-TC-New-Small-Business-Grant.pdf

https://businesshelp.ohio.gov/pdf/06242021-New-Small-business-grant.pdf

https://businesshelp.ohio.gov/pdf/06212021-FAQ-New-Small-Business-Grant.pdf

Applications

Applications for all programs will open on Tuesday, June 29, 2021 at BusinessHelp.Ohio.Gov. Businesses must have an Ohio Supplier ID to apply. Businesses who do not currently have a Supplier ID may request one at Supplier.Ohio.gov. Awards will be made on a first-come, first-served basis with funding allocated for each program and for each county in Ohio.

For support with your COVID-19 relief options, contact your HBK Advisor.

On April 17, SBA released guidance related to the Restaurant Revitalization Fund. This program, created by the American Rescue Plan Act (ARPA) that was enacted on March 11, 2021, aims to provide relief to restaurants, bars, and similar eligible businesses who were impacted by the COVID-19 pandemic.

General Overview

The Restaurant Revitalization Fund provides grants to eligible businesses, including restaurants, food stands, food trucks, food carts, caterers, bars, saloons, lounges, taverns, snack and nonalcoholic beverage bars, and licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products. In addition, bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries may be eligible if onsite sales to the public comprise at least 33% of gross receipts, and inns may be eligible if onsite sales of food and beverage to the public comprise at least 33% of gross receipts.

Grant Amount

For all applicants in operation as of January 1, 2019, grant amounts will be calculated by determining 2019 gross receipts minus 2020 gross receipts minus Paycheck Protection Program (PPP) loan amounts. Amounts will be capped to $5 million per location, not to exceed $10 million for the total applicant and its affiliated businesses. No awards will be made under $1,000.

When determining gross receipts, applicants should not include PPP loans, Economic Injury Disaster Loans (EIDL), EIDL Advances, Targeted EIDL Advances, state and local grants (via CARES Act or otherwise) or amounts paid on behalf of SBA loans through Section 1112 of the CARES Act.

Fund Uses

Restaurant Revitalization Funds may be used for certain business payroll costs (including sick leave and group health care, life, disability, vision or dental insurance premiums), payments on business mortgage obligations, rent, principal and interest payments, utilities, maintenance expenses, construction of outdoor seating, business supplies (including personal protective equipment and cleaning materials), business food and beverage expenses (including raw materials), covered supplier costs as defined by the program, and business operating expenses as defined by the program. Awardees must use all funds by March 11, 2023 on eligible expenses incurred between February 15, 2020 and March 11, 2023. Unused funds must be returned.

Grant recipients will be asked to complete annual reporting submissions beginning no later than December 31, 2021 regarding their use of funds, until the funds have been depleted. SBA may ask for supporting documentation at any time.

Applications

Although the SBA has not announced when it will begin accepting applications, ARPA indicates that the SBA can only fund certain entities in the first 21 days of the application period. Specifically, applications from small businesses that are at least 51% owned by women, veterans, or socially and economically disadvantaged individuals will be considered for funding. Other entities may apply during this time, but their applications will not be considered for funding until the 21-day priority period ends. A sample application can be found at https://www.sba.gov/document/sba-form-3172-restaurant-revitalization-funding-application-sample.

Next Steps

As demand is expected to exceed funding availability, interested businesses should carefully review SBA guidance and confirm their eligibility. Eligible entities may wish to begin preparing documentation and the draft application, understanding that the application may be changed before the application portal goes live. SBA guidance can be found as follows:

• General Program Overview: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund
• Restaurant Revitalization Funding Program Guide: https://www.sba.gov/document/support-restaurant-revitalization-funding-program-guide
• Draft Application: https://www.sba.gov/document/sba-form-3172-restaurant-revitalization-funding-application-sample

For assistance or questions regarding the Restaurant Revitalization Fund, please contact your HBK Advisor.

On March 30, the New York State Assembly and State Senate both overwhelmingly passed the Marijuana Regulation & Taxation Act, decriminalizing the use of adult-use marijuana and establishing an office for the regulation of cannabis. The Act permits adults 21 and over to purchase marijuana and grow the plant in their home. By decriminalizing marijuana, the Act is being heralded as criminal justice reform. According to the bill’s sponsor, Senator Liz Kruger, “New York’s program will not just talk the talk on racial justice, it will walk the walk.” Other key provisions of the law include:

• 13 percent excise tax on retail sales: 9 percent to the state, 4 percent to the municipality
• 40 percent of cannabis tax revenues to be spent on education, 40 percent for community reinvestment grants for communities harmed by marijuana prohibition, and 20 percent to drug treatment and public education programs
• Marijuana arrests and convictions legalized under the law to be expunged, and law enforcement prevented from using the odor of marijuana as a pretext for a search
• The opportunity for New Yorkers currently working in the illegal market to obtain one of ten different licenses to work in the new cannabis economy

That new cannabis economy is projected to create $350 million in taxes each year as well as 30,000 to 60,000 jobs statewide.

“The New York approach is interesting and very smart, I think, in terms of taking an assertive criminal justice position as part of the deal,” noted Christopher T. Marrie, HBK Principal and National Co-director, HBK Cannabis Solutions. “That is an element missing in the federal position on legalizing cannabis. It’s going to be difficult to do it without tying it to criminal justice reform.”

Marrie pointed out that, “New York was a very tight market, allowing the sale of extracts only, not flower. It will be interesting to see how the transition unfolds.”

That is expected to take about 18 months, Marrie said. “In the meantime, the State has likely created a huge black market. It’s legalized but not regulated. That’s what happened in Michigan where it was legalized in 2008 but not regulated until 2017. It wound up being regulated differently in every municipality.

“New York City will be a huge market,” Marrie proposed. “Some retailers in the big cities, like Chicago and Philadelphia, are doing more than $25 million in annual sales.”

Marrie also said that he expects the tax rates in New York will increase as marijuana is commoditized. “I expect to see the tax rate rise to 20 or 21 percent,” he said.

The new law comes in response to what has become a huge issue in the state. According to reports, in the 1990s and early 2000s, more than 800,000 New Yorkers were arrested or ticketed for marijuana, more than anywhere else in the world.