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From the PA Chamber of Business & Industry
The legislature passed and Gov. Tom Wolf quickly signed the first bill of the 2021-22 session last week. Act 1 of 2021 includes more than $900 million in financial aid to Pennsylvanians impacted by COVID-19, including small businesses.
Notably, Act 1 exempts from state taxation federal Paycheck Protection Program loans that were subsequently forgiven. Congress established the PPP as part of the CARES Act that was signed last April, and the program has helped employers financially withstand this difficult and uncertain time and, in particular, keep employees on payroll.
The legislation also creates a $145 million grant program to help businesses in the hospitality industry that have been financially impacted due to the pandemic. The program is funded by transferring money from the employer-funded Workers’ Compensation Security Fund, which provides workers’ compensation benefits in the event that an insurance carrier becomes insolvent. Local economic development agencies would administer the program and employers could be eligible for grants of up to $50,000.
In a memo sent to lawmakers, the PA Chamber expressed that, while the $145 million for the grant program would ideally have come from another source, the PA Chamber appreciated that the transfer was structured as a loan and requires replenishment of the fund with federal dollars should Congress appropriate additional funding to mitigate revenue shortfalls as a result of the pandemic.