Key provisions in the coronavirus stimulus package
- Agriculture Provisions
The Office of the Secretary will receive $9.5 billion until expended to provide support for agricultural producers (e.g., producers of specialty crops, producers that supply local food systems, and livestock producers) impacted by COVID-19.
- Commodity Credit Corporation will receive $14 billion as a reimbursement for net realized losses not previously reimbursed.
- APHIS will receive an additional $55 million to prevent, prepare for and respond to coronavirus, including for necessary expenses for salary costs associated with the Agriculture Quarantine and Inspection Program.
- AMS will receive an additional $45 million for coronavirus efforts, including necessary expenses for salary costs associated with commodity grading, inspection and audit activities.
- FSIS will receive an additional $33 million for coronavirus related activities, specifically to support temporary and intermittent workers and the relocation of inspectors.
- Rural Development Programs: The Business and Industry Loan Guarantee Program will receive $20.5 million through September 30, 2021 to support loans to rural business owners.
The Distance Learning, Telemedicine, and Broadband Program will receive $25 million in additional funding to facilitate distance learning and telemedicine in rural areas.
Business Tax Provisions
- The Food and Drug Administration will receive an additional $80 million in funding to develop necessary medical countermeasures and vaccines, advance manufacturing for medical products, and monitor medical product supply chains in response to COVID-19.
Treatment of Losses
Certain changes to the loss provisions made by the Tax Cuts and Jobs Act (TCJA) are suspended in an effort to allow companies to utilize greater losses as well as to claim refunds for certain losses. Specifically, the CARES Act:
Limitation on Business Interest Expense
- Suspends the TCJA's 80% of taxable income limit on net operating loss (NOL) carryovers for three years, so that the limit would not apply to tax years beginning in 2018, 2019, and 2020;
- Allows NOLs arising in 2018, 2019, and 2020 to be carried back five years; and
- Suspends the limitations on excess farm losses and on the use of a pass-through business’ losses against non-business income for three years, so that the limits would not apply to tax years beginning in 2018, 2019, and 2020.
The CARES Act would temporarily increase the limitation on interest deductions imposed by the TCJA. Specifically, the Act would increase the 30% of adjusted taxable income (ATI) threshold to 50% of ATI, for tax years beginning in 2019 and 2020. (Special tax year 2019 rules would apply to partnerships.) It would also allow a taxpayer to elect to use tax year 2019 ATI in lieu of tax year 2020 ATI for the purpose of calculating its tax year 2020 limitation.
TCJA Technical Corrections
The CARES Act would adopt a few TCJA technical corrections, on a permanent basis:
- Qualified improvement property;
- Effective date of NOL provisions; and
- Technical corrections related to section 461(l).
Small Business Administration (Administration)
Disaster Loans Program Account
- The Administration will receive $562 million to cover the costs of and administrative expenses associated with the provision of Economic Injury Disaster Loans to businesses in need. Please note, agricultural cooperatives and businesses that rely on agricultural production are eligible for SBA lending, but historically individual agricultural producers have not been eligible. That said, the CARES Act provides delegated authority, allowing lenders to make determinations on borrower eligibility and creditworthiness without going through all of SBA’s channels. It’s unclear how this will impact agriculture, if at all.
Federal Highway Administration
Language to clarify that states can issue special permits for overweight vehicles and loads to allow for the free flow of critical relief supplies during the current coronavirus epidemic for the duration of the fiscal year. (This will be a patch work on weights as different states have decided to permit different weight.) States will issue the permits (waivers) just like they do under normal circumstances for heavier trucks. DOT has informed state DOT’s of this legislative change.
Department of the Interior
USDA (Forest Service)
- The Office of the Secretary will receive $158.4 million for equipment and supplies, cleaning, law enforcement and emergency personal, increased telework capacity, and other activities associated with the coronavirus outbreak. These funds will be split among the Interior bureaus (with the exception of the Bureau of Indian Affairs and the Office of Insular Affairs).
- The Bureau of Reclamation’s Water and Related Resources account will receive $12.5 million to support remote access, teleworking, cleaning and disinfection of facilities. These funds will be used for medical services and equipment related to coronavirus prevention, preparation, and response.
- The Bureau of Reclamation’s Policy and Administration account will receive $8.1 million to support remote access, teleworking, and cleaning and disinfection of facilities. These funds will be used for medical services and equipment related to coronavirus prevention, preparation, and response.
Forest Service Programs:
- Wildland Fires Management will receive an additional $7 million to cover the costs of personal protective equipment and baseline health testing for first responders.
- Capital Improvement and Maintenance will receive an additional $26.8 million for cleaning of Forest Service’s administrative facilities and other facilities needs related to the coronavirus outbreak.
- The National Forest System generally will receive $34 million for daily cleaning and disinfecting of recreation facilities, increased supply of personal protective equipment, and baseline testing for first responders.
- Forest and Rangeland Research will receive $3 million to re-establish scientific experiments impacted by travel restrictions, such as the Forest Inventory and Analysis program.