WASHINGTON — Companion bills introduced in the Senate and the House of Representatives that would provide assistance to small and independent restaurant owners continued to pick up bipartisan support. Senator Charles Schumer of New York, the Senate minority leader, on Aug. 13 became the twenty-eighth member of the Senate to join the ranks of cosponsors of the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive (RESTAURANTS) Act.
The RESTAURANTS Act, HR 7197, was introduced in the House of Representatives on June 15 by Representative Earl Blumenauer of Oregon, a Democrat, and has 182 cosponsors as of Aug. 26, including 179 Democrats and 3 Republicans. The bill was referred to the Financial Services, Ways and Means and Budget committees.
The Senate bill, S.4012, was introduced by Senator Roger F. Wicker of Mississippi, a Republican, and has 27 cosponsors, including 21 Democrats and 6 Republicans.
The bills aim to provide a lifeline to small and independent restaurants whose businesses cratered in mid-March and April and since have navigated an uncertain course as states and municipalities attempt to balance the need to reopen economic sectors, including restaurants against capacity and social-distancing restrictions required to protect public health.
The National Restaurant Association estimated that between March and June, the industry lost more than $145 billion in sales and may be on track to lose more than $240 billion in sales by the end of the year. An estimated 8 million persons working in the nation’s restaurants and taverns lost their jobs at the height of pandemic restrictions.
Both the House and Senate bills would require the Treasury Department to establish a $120 billion Restaurant Revitalization Fund to provide relief for foodservice and drinking establishments through Dec. 31, 2020.
The RESTAURANTS Act would direct the secretary of the treasury to award grants from the fund to eligible entities in the order in which they are received.
Food establishments applying for grants would be required to certify the requested funds would support ongoing operations and be used to retain workers, maintain payroll and for other allowable expenses.
The bills would require that the treasury secretary during the initial 14-day period during which grants are awarded to prioritize awarding grants to marginalized and underrepresented communities with a focus on women, veteran and minority-owned and operated eligible entities, and only award grants to such entities with annual revenues of less than $1.5 million.
Thereafter, the aggregate amount of grants made to an eligible entity or any affiliate business of an eligible entity would not exceed $10 million. The amount of a grant would be based on the difference in revenues or estimated revenues of the eligible entity during a calendar quarter in 2020 selected by the entity as compared with 95% of the revenues of the entity in the same calendar quarter in 2019.
An entity that received a grant but went out of business on or before Dec. 31 would be required to return to the Treasury any unused funds. Any grant amounts received by an entity that are unused by Dec. 31 shall be converted into a loan with an interest rate of 1% and a maturity date of 10 years.
The principal difference between the House and Senate versions of the bill relates to eligibility.
In the House bill, an eligible entity must not be part of a chain or franchise with 20 or more locations doing business under the same name, regardless of the type of ownership of the locations. Also excluded from eligibility would be an entity, including a subsidiary, that is publicly traded.
Eligibility under the Senate bill would be more inclusive. Entities that would be excluded from eligibility would be those that own or operate (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names.
The NRA favors the Senate bill, explaining, “The House bill denies access to any restaurant that is part of a larger chain — even if the operator owns only one and is facing the same economic roadblocks as an independent restaurant. The reality is that restaurants, irrespective of their business model, are all facing vast and long-term challenges.”