Senate releases phase 4 COVID-19 relief package

By Erin Voegele | July 27, 2020

The U.S. Senate released a COVID-19 relief package, referred to as the HEALS Act, on July 27 that could provide relief to biofuel producers. It would also reduce and extend supplemental unemployment insurance (UI) payments, provide another stimulus payment to most Americans, and allow some companies to access a second Paycheck Protection Program loan.

The legislative package includes a $306 billion emergency appropriations bill introduced by Senate Appropriations Committee Chairman Richard Shelby, R-Ala., that aims to aid American families and businesses suffering from the COVID-19 pandemic. While the bill does not provide dedicated relief for biofuel producers, one provision of the bill provides $20 billion of additional funding to the USDA to support agricultural producers, growers and processors impacted by COVID-19.

That $20 billion funding would provide support for agricultural producers, growers, and processors impacted by COVID-19, including producers, growers and processors of specialty crops, non-specialty crops, dairy, livestock and poultry. Biofuel producers would be considered eligible entities under the program.

Growth Energy expressed optimism that the funding could support ethanol producers, but said more clarity is needed. “This is a good first step towards healing the damage wrought by COVID-19, but falls short of providing the necessary clarity that would have been provided in Senators Ernst, Grassley and Klobuchar's proposed language," said Emily Skor, CEO of Growth Energy. "The next critical step in a final agreement between House and Senate is to provide additional certainty around the nature of biofuel industry relief to ensure our producers have access to this much needed assistance. Our fight is far from over, especially with the number of retroactive refinery exemption applications continuing to rise and COVID-19 depressing trade to our key ethanol markets abroad. It’s encouraging to know that we have House and Senate leaders in our corner who understand that protecting America’s biofuel workforce now is vital to rebuilding our nation’s agricultural supply chain and markets for American farmers.”

The American Coalition for Ethanol also called for more clarification, urging lawmakers to include more specific language confirming aid for ethanol producers. “We are grateful Senate leaders have responded to our request for economic relief to biofuel producers in the phase four stimulus, however, Congress gave USDA the flexibility to provide relief for renewable fuel producers in the last package and USDA declined to exercise it,” said Brian Jennings, CEO of ACE.  “While Senator McConnell’s bill is more specific about processors of ag commodities, it still leaves discretion to USDA which has so far failed to use the authority to support our industry.

“As I stated in my recent letter to Senators McConnell and Schumer, direct aid for biofuel producers is long overdue,” Jennings added. “That is why we support and urged inclusion of the Grassley-Klobuchar bill which makes direct assistance certain. Ethanol producers have acted as an economic bridge for U.S. farmers when they purchased corn before the extent of the pandemic was known. It is only fair to aid the ethanol industry which has fronted cash to farm economies.

“We will continue to urge for more specific language in the final bill,” he said.” Fortunately, momentum appears to be in our favor since both the House-passed Heroes Act and Senate proposal contain relief provisions. Now we need to ensure the legislative details are correct as there should be no reason direct assistance for ethanol producers doesn’t make it in the final phase four bill.

“ACE urges grassroots advocates to contact their lawmakers and ask them to include biofuel producer relief in the final coronavirus relief package and to get it done before the August recess,” Jennings said.

Other components of the phase four COVID-19 relief package could also offer benefits to ethanol producers and their employees.

A bill introduced by Chairman of the Senate Committee on Small Business and Entrepreneurship Marco Rubio, F-Fla., and Sen. Susan Collins, R-Maine, a senior member of the Senate Committee on Appropriations and Committee on Health, Education, Labor and Pensions, would allow some small businesses to receive a second forgivable loan under the Paycheck Protection Program.

Under the bill, small employers that have seen their revenues decline by 50 percent or more in the first or second quarter of this year when compared with the same quarter of last year would be eligible to receive a second PPP loan. The bill would limit these second forgivable loans to entities with 300 or fewer employees and create an additional set of funds for businesses with 10 or fewer employees. The bill includes a $10 billion set aside for community lenders to access second draw funds.

Data released by the U.S. Department of Treasury in early July shows that many fuel ethanol plants have accessed the PPP program. According to that data, approximately 70 businesses categorized under NAICS Code 325193 received PPP loans ranging in value from $150,000 to $2 million. Companies identified by NAICS Code 325193 are primarily engaged in the manufacturing of nonpotable ethyl alcohol. Fuel ethanol production falls under the category.

A separate bill released by Senate Finance Committee Chairman Chuck Grassey, R-Iowa, would provide further relief for workers affected by COVID-19; assistance to individuals, families, and employers to reopen the economy; support for patients, nursing home residents, providers and foster youth in responding to COVID-19; additional flexibility and accountability for coronavirus relief fund payments and state tax certainty for employers and employees.

One section of that bill, would reduce and extend supplemental the unemployment insurance payment that were authorized under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law in March. The CARES Act provides a $600 per week supplemental employment payment through the end of July. The supplemental payment currently expires on July 31. The new legislation would extend that supplement payment, but reduce it to $200 per week through September. Starting in October, the payment would be replaced with a payment of up to $500, that when combined with the state unemployment insurance payment, would replace 70 percent of lost wages.

Another section of the bill would create a second recovery rebate payment of $1,200 to all U.S. citizens and U.S. residents with adjusted gross income up to $75,000. For married couples with gross income up to $150,000, the payment would be $2,400. An additional rebate of $500 per dependent would be available. The amount of the rebate would phase out completely for single filers that exceed $99,000 and joint filers with no children and income over $198,000.