Trump signs $2 trillion CARES Act into law

By Erin Voegele | March 30, 2020

President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27. The bill aims to provide American families, workers and small businesses with financial assistance during the COVID-19 pandemic.

The $2 trillion CARES Act includes funding for a wide variety of purposes, from direct payments to individuals to funding for hospitals, small businesses, housing programs, school systems and government agencies. While the bill doesn’t provide dedicated relief to those in the biofuels and bioenergy industries, many bioenergy companies should qualify for relief the bill provides to small businesses. Many employees should also qualify for direct COVID-19 relief payments.

The CARES Act is the third COVID-19 stimulus package approved by Congress and signed by Trump so far. Additional legislation could soon be in the works that would offer more direct help for renewable fuel producers.

The CARES Act provides $367 billion in forgivable loans for small businesses who employ under 500 employees for the purpose of helping to cover payroll, rent, and utilities. This resource is available to small businesses who keep their payrolls steady through the COVID-19 crisis. Small businesses that pledge to keep workers would can also receive cash-flow assistance structured as federally guaranteed loans. If the employer continues to pay its workers for the duration of the COVID-19 crisis, those loans would be forgiven.

The legislation also provides for direct payments of $1,200 per adult and $500 per child to American workers making less than $75,000 per person, or to households making $150,000 or less annually. To obtain this federal funding, Americans need to have filed their taxes, or must file immediately.

In addition, the CARES Act expands unemployment insurance to include extended benefits for 13 weeks, plus and extra $600 per week. Eligibility is also expanded to include gig workers, self-employed Americans and contractors.

Brian Jennings, CEO of ACE, said he expects the small business provisions of the CARES Act to benefit ethanol plants and other renewable fuel producers. “I do think that it’s going to be helpful for a lot of producers,” he said. Depending on the size of plants operations and its payroll, the CARES Act could provide $1 million to $2 million in financial assistance that is essentially in the form of a grant, Jennings said, noting some companies may also be eligible for economic injury loans provided through the Small Business Administration. The employee retention provisions of the CARES Act will also be valuable for plants that have had to shut down and send some of their workforce home, Jennings added.

ACE is encouraging producers to look into the funding options being offered by the federal government and get their hands on financial resources that can help them get through this unprecedented time, Jennings said.

He also noted the possibility of a fourth stimulus bill. While Congress is in recess into late April, Jennings said congressional staff is hard at work putting together another stimulus bill. “Frankly speaking, there were some provisions and we and others tried to get into the CARES Act that would have directed the USDA to make direct payments to ethanol plants through the [USDA Commodity Credit Corp.],” he said. “We didn’t quite get the language we were looking for in the CARES Act.” Jennings said he thinks there is a strong likelihood that Congress will take up a fourth COVID-19 stimulus package in late April or early May. “We’re going to be looking at that opportunity to provide some additional assistance to renewable fuel producers,” he said.

John Fuher, vice president of government affairs at Growth Energy, also said the CARES Act should provide help to biofuel producers. “In these uncertain times, the CARES Act was an important step forward in giving American businesses and citizens—including biofuel producers—some much-needed relief to keep going. We’ve been reviewing this law and communicating to our members how they can utilize different provisions, whether its through Small Business Administration loans, tax incentives, pandemic unemployment assistance, and more.”

Both ACE and Growth Energy are planning to hold webinars to help their members navigate the possible relief measures included in the CARES Act.

Additional information, including a full copy of the bill, is available on the Congress.gov website.