• Increases the value of the employee retention credit from the current 50 percent of $10,000 to a maximum of 80 percent of $15,000 for up to three quarters, i.e. from a maximum of $5,000 to a maximum credit of $36,000. It would make it clear that the cost of health care is covered even if wages are not paid during the period. (Sec. 20211)

• Modifies the existing gross receipts requirement (triggered by a decline of 50 percent) to allow a partial credit, phased in for a decline in gross receipts (calculated by nonprofits using Form 990, Line G) between 10 percent and 50 percent compared to the same calendar quarter of the previous year. (Sec. 20211)

• Changes retroactive to the effective date of the CARES Act. (Sec. 20211)

• Also would provide a 50 percent refundable payroll tax credit for qualified fixed costs, including rent, mortgage, and utility payments, which are defined the same as under Sec. 1106 of the CARES Act, relating to forgiveness of Paycheck Protection Program loans. This provision is limited to employers with 1,500 or fewer employees or gross receipts (calculated using Form 990, Line G) of no more than $41,500,000 in 2019. (Sec. 20212)

• NOTE: With these changes, the Employee Retention refundable credit may be a better deal for some nonprofits than the Paycheck Protection Program.

• This fixes the issue of nonprofits having to reimburse and then waiting to get reimbursed for their reimbursement, effectively overriding the bad guidance issued by US DOL on April 27.

• The provision does not raise the reimbursement rate to 100 percent, meaning that nonprofits will still be charged for half the costs of basic unemployment benefits received by their former employees.

• Extends the covered period from June 30 to December 31, 2020.

• Makes critical access hospitals and nonprofit news outlets eligible for PPP loans

• Expands PPP to nonprofits of all sizes and types
• Removes the 500-employee cap
• Includes all 501(c) employers as eligible, e.g., social welfare, unions, chambers
• Removes nonprofits from the affiliation rule that was intended to block Planned Parenthood from access to PPP loans.

• Corrects Treasury/SBA Interim Final Rule by 
• Setting minimum maturity at 5 years (up from 2 years in Rule)
• Banning forgiveness limits on non-payroll expenses – the 75%/25% rule (Sec. 90004)
• Mandating deferment of principal and interest for 1 year (up from 6 months) (Sec. 90008)

• Creates 25 percent set-aside for PPP funding for nonprofits
• Half for nonprofits with 500 or fewer employees
• Half for nonprofits with more than 500 employees

• Sets aside 25 percent of PPP funding for eligible employers with 10 or fewer employees, and for community financial institutions the bill would set aside the lesser of 25 percent or $10 billion from remaining funds under the interim funding bill passed in April.

• Loan Forgiveness Changes (Sec. 90004)
• Expands covered period from 8 weeks to the earlier of 24 weeks or December 31, 2020. It also extends the rehire exemption from June 30 to December 31, 2020.
• Makes technical corrections to expressly allow forgiveness of payments on interest on pre-existing debt.
• Alters application forms to require demographic information and reporting of full-time equivalents on Feb. 15, 2020, at date of application, and upon application for loan forgiveness.

• Mandates that SBA provide reports on loan approval and disbursement to nonprofits, provided on a state, congressional district, industry, and loan size. (Sec. 90016)

• Mandates creation of a low-cost loan program for nonprofits, one that includes the ability to defer payments. (Sec. 110604)

• For nonprofits that are ineligible for Paycheck Protection Program loans and that predominately serve low-income communities, loan forgiveness along the lines of CARES Act Sec. 1106 shall be granted. NOTE: This forgiveness provision was unexpected BUT the changes to the PPP, discussed above, would make all nonprofits eligible, potentially disqualifying nonprofits from forgiveness under this loan program. (Sec. 110604)

• Only gives the Federal Reserve five days from date of enactment to implement the nonprofit lending program. (Sec. 110604)

• Also mandates that the Federal Reserve ensures that at least one loan option for which small nonprofits and small businesses are eligible has no minimum loan size. (Sec. 110605)

• Extends the paid leave provisions under the Families First Coronavirus Response Act to nonprofits and other employers with more than 500 employees. Applying the paid leave provision only to smaller employers was a last-minute change to the Families First Act back in March. (Secs. 120104 and 120117)

• Funding Nonprofit Work in Communities: Senators Klobuchar (D-MN), Brown (D-OH), and Oregon’s own Ron Wyden (D-OR) are introducing the Work Opportunities and Resources to Keep Nonprofit Organizations Well Act (the WORK NOW Act). The bill seeks to inject $50 billion into frontline nonprofits over the next 6 months to generate employment for laid-off workers and to address the skyrocketing needs in communities for COVID-19 relief and recovery. NAO is endorsing this bill, as are national organizations and other state associations. Please consider sending a letter of endorsement to Senator Wyden’s office for this important bill!

• Republican Support for Expanding Nonprofit PPP Eligibility: Yesterday, Senator Kelly Loeffler (R-GA) introduced a bill to remove the 500-employee cap on nonprofit eligibility for PPP loans. The bill also repeals the nonprofit-specific affiliation restriction in the CARES Act and replaces it with an express prohibition on PPP loans to entities that provide abortions. The bill’s title is the Limiting Infant Fatality and Empowering Nonprofit Organization Workforces (LIFE NOW) Act. Senators Cramer (R-ND), Lankford (R-OK), and Rounds (R-SD) are co-sponsors.