Keeping the Lights On Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6799 To provide a payroll credit for certain fixed expenses of employers subject to closure by reason of COVID-19. IN THE HOUSE OF REPRESENTATIVES MAY 12, 2020 Mr. THOMPSON of California (for himself, Mr. KELLY of Pennsylvania, Mr. KIND, Mr. PANETTA, and Mr. HORSFORD) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned A BILL To provide a payroll credit for certain fixed expenses of employers subject to closure by reason of COVID-19. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Keeping the Lights 4 On Act of 2020’’. 5 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 6799 IH SEC. 2. PAYROLL CREDIT FOR CERTAIN FIXED EXPENSES 1 OF EMPLOYERS SUBJECT TO CLOSURE BY 2 REASON OF COVID-19. 3 (a) IN GENERAL.—In the case of an eligible em- 4 ployer, there shall be allowed as a credit against applicable 5 employment taxes for each calendar quarter an amount 6 equal to 50 percent of the qualified fixed expenses paid 7 or incurred by such employer during such calendar quar- 8 ter. 9 (b) LIMITATIONS AND REFUNDABILITY.— 10 (1) LIMITATION.—The qualified fixed expenses 11 which may be taken into account under subsection 12 (a) by any eligible employer for any calendar quarter 13 shall not exceed the least of— 14 (A) the qualified fixed expenses paid by the 15 eligible employer in the same calendar quarter 16 of calendar year 2019, 17 (B) $50,000; or 18 (C) the greater of— 19 (i) 25 percent of the wages paid with 20 respect to the employment of all the em- 21 ployees of the eligible employer for such 22 calendar quarter; or 23 (ii) 6.25 percent of the gross receipts 24 of the eligible employer for calendar year 25 2019. 26 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 6799 IH (2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 1 TAXES.—The credit allowed by subsection (a) with 2 respect to any calendar quarter shall not exceed the 3 applicable employment taxes for such calendar quar- 4 ter (reduced by any credits allowed under sub- 5 sections (e) and (f) of section 3111 of such Code, 6 sections 7001 and 7003 of the Families First 7 Coronavirus Response Act, section 2301 of the 8 CARES Act, and sections 101, 102, and 304 of this 9 division, for such quarter) on the wages paid with 10 respect to the employment of all the employees of 11 the eligible employer for such calendar quarter. 12 (3) REFUNDABILITY OF EXCESS CREDIT.— 13 (A) IN GENERAL.—If the amount of the 14 credit under subsection (a) exceeds the limita- 15 tion of paragraph (2) for any calendar quarter, 16 such excess shall be treated as an overpayment 17 that shall be refunded under sections 6402(a) 18 and 6413(b) of the Internal Revenue Code of 19 1986. 20 (B) TREATMENT OF PAYMENTS.—For pur- 21 poses of section 1324 of title 31, United States 22 Code, any amounts due to an employer under 23 this paragraph shall be treated in the same 24 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 6799 IH manner as a refund due from a credit provision 1 referred to in subsection (b)(2) of such section. 2 (c) DEFINITIONS.—For purposes of this section— 3 (1) APPLICABLE EMPLOYMENT TAXES.—The 4 term ‘‘applicable employment taxes’’ means the fol- 5 lowing: 6 (A) The taxes imposed under section 7 3111(a) of the Internal Revenue Code of 1986. 8 (B) So much of the taxes imposed under 9 section 3221(a) of such Code as are attrib- 10 utable to the rate in effect under section 11 3111(a) of such Code. 12 (2) ELIGIBLE EMPLOYER.— 13 (A) IN GENERAL.—The term ‘‘eligible em- 14 ployer’’ means any employer— 15 (i) which was carrying on a trade or 16 business during calendar year 2020; 17 (ii) which had either— 18 (I) not more than 1,500 full-time 19 equivalent employees (as determined 20 for purposes of determining whether 21 an employer is an applicable large em- 22 ployer for purposes of section 23 4980H(c)(2) of the Internal Revenue 24 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 6799 IH Code of 1986) for calendar year 2019; 1 or 2 (II) not more than $41,500,000 3 of gross receipts in the last taxable 4 year ending in 2019; and 5 (iii) with respect to any calendar 6 quarter, for which— 7 (I) the operation of the trade or 8 business described in clause (i) is fully 9 or partially suspended during the cal- 10 endar quarter due to orders from an 11 appropriate governmental authority 12 limiting commerce, travel, or group 13 meetings (for commercial, social, reli- 14 gious, or other purposes) due to the 15 coronavirus disease 2019 (COVID– 16 19); or 17 (II) such calendar quarter is 18 within the period described in sub- 19 paragraph (B). 20 (B) SIGNIFICANT DECLINE IN GROSS RE- 21 CEIPTS.—The period described in this subpara- 22 graph is the period— 23 (i) beginning with the first calendar 24 quarter beginning after December 31, 25 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 6799 IH 2019, for which gross receipts (within the 1 meaning of section 448(c) of the Internal 2 Revenue Code of 1986) for the calendar 3 quarter are less than 80 percent of gross 4 receipts for the same calendar quarter in 5 the prior year; and 6 (ii) ending with the calendar quarter 7 following the first calendar quarter begin- 8 ning after a calendar quarter described in 9 clause (i) for which gross receipts of such 10 employer are greater than 80 percent of 11 gross receipts for the same calendar quar- 12 ter in the prior year. 13 (C) TAX-EXEMPT ORGANIZATIONS.—In the 14 case of an organization which is described in 15 section 501(c) of the Internal Revenue Code of 16 1986 and exempt from tax under section 501(a) 17 of such Code— 18 (i) clauses (i) and (iii)(I) of subpara- 19 graph (A) shall apply to all operations of 20 such organization; and 21 (ii) any reference in this section to 22 gross receipts shall be treated as a ref- 23 erence to gross receipts within the meaning 24 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 6799 IH of section 6033 of the Internal Revenue 1 Code of 1986. 2 (D) PHASE-IN OF CREDIT WHERE BUSI- 3 NESS NOT SUSPENDED AND REDUCTION IN 4 GROSS RECEIPTS LESS THAN 50 PERCENT.— 5 (i) IN GENERAL.—In the case of any 6 calendar quarter with respect to which an 7 eligible employer would not be an eligible 8 employer if subparagraph (B)(i) were ap- 9 plied by substituting ‘‘50 percent’’ for ‘‘80 10 percent’’, the amount of the credit allowed 11 under subsection (a) shall be reduced by 12 the amount which bears the same ratio to 13 the amount of such credit (determined 14 without regard to this subparagraph) as— 15 (I) the excess gross receipts per- 16 centage point amount; bears to 17 (II) 30 percentage points. 18 (ii) EXCESS GROSS RECEIPTS PER- 19 CENTAGE POINT AMOUNT.—For purposes 20 of this subparagraph, the term ‘‘excess 21 gross receipts percentage point amount’’ 22 means, with respect to any calendar quar- 23 ter, the excess of— 24 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 6799 IH (I) the lowest of the gross re- 1 ceipts percentage point amounts de- 2 termined with respect to any calendar 3 quarter during the period ending with 4 such calendar quarter and beginning 5 with the first calendar quarter during 6 the period described in subparagraph 7 (B); over 8 (II) 50 percentage points. 9 (iii) GROSS RECEIPTS PERCENTAGE 10 POINT AMOUNTS.—For purposes of this 11 subparagraph, the term ‘‘gross receipts 12 percentage point amount’’ means, with re- 13 spect to any calendar quarter, the percent- 14 age (expressed as a number of percentage 15 points) obtained by dividing— 16 (I) the gross receipts (within the 17 meaning of subparagraph (B)) for 18 such calendar quarter; by 19 (II) the gross receipts for the 20 same calendar quarter in calendar 21 year 2019. 22 (3) QUALIFIED FIXED EXPENSES.— 23 (A) IN GENERAL.—The term ‘‘qualified 24 fixed expenses’’ means the payment or accrual 25 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 6799 IH of any covered mortgage obligation, covered 1 rent obligation, or covered utility payment. 2 Such term shall not include the prepayment of 3 any obligation for a period in excess of a month 4 unless the payment for such period is custom- 5 arily due in advance. 6 (B) APPLICATION OF DEFINITIONS.—The 7 terms ‘‘covered mortgage obligation’’, ‘‘covered 8 rent obligation’’, and ‘‘covered utility payment’’ 9 shall each have the same meaning as when used 10 in section 1106 of the CARES Act. 11 (4) SECRETARY.—The term ‘‘Secretary’’ means 12 the Secretary of the Treasury or the Secretary’s del- 13 egate. 14 (5) WAGES.— 15 (A) IN GENERAL.—The term ‘‘wages’’ 16 means wages (as defined in section 3121(a) of 17 the Internal Revenue Code of 1986) and com- 18 pensation (as defined in section 3231(e) of such 19 Code). For purposes of the preceding sentence 20 (other than for purposes of subsection (b)(2)), 21 wages as defined in section 3121(a) of such 22 Code shall be determined without regard to 23 paragraphs (1), (8), (10), (13), (18), (19), and 24 (22) of section 3121(b) of such Code. 25 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 6799 IH (B) ALLOWANCE FOR CERTAIN HEALTH 1 PLAN EXPENSES.— 2 (i) IN GENERAL.—Such term shall in- 3 clude amounts paid or incurred by the eli- 4 gible employer to provide and maintain a 5 group health plan (as defined in section 6 5000(b)(1) of the Internal Revenue Code 7 of 1986), but only to the extent that such 8 amounts are excluded from the gross in- 9 come of employees by reason of section 10 106(a) of such Code. 11 (ii) ALLOCATION RULES.—For pur- 12 poses of this section, amounts treated as 13 wages under clause (i) shall be treated as 14 paid with respect to any employee (and 15 with respect to any period) to the extent 16 that such amounts are properly allocable to 17 such employee (and to such period) in such 18 manner as the Secretary may prescribe. 19 Except as otherwise provided by the Sec- 20 retary, such allocation shall be treated as 21 properly made if made on the basis of 22 being pro rata among periods of coverage. 23 (6) OTHER TERMS.—Except as otherwise pro- 24 vided in this section, any term used in this section 25 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 6799 IH which is also used in chapter 21 or 22 of the Inter- 1 nal Revenue Code of 1986 shall have the same 2 meaning as when used in such chapter. 3 (d) AGGREGATION RULE.—All persons treated as a 4 single employer under subsection (a) or (b) of section 52 5 of the Internal Revenue Code of 1986, or subsection (m) 6 or (o) of section 414 of such Code, shall be treated as 7 one employer for purposes of this section. 8 (e) DENIAL OF DOUBLE BENEFIT.—For purposes of 9 chapter 1 of such Code, the gross income of any eligible 10 employer, for the taxable year which includes the last day 11 of any calendar quarter with respect to which a credit is 12 allowed under this section, shall be increased by the 13 amount of such credit. 14 (f) CERTAIN GOVERNMENTAL EMPLOYERS.— 15 (1) IN GENERAL.—The credit under this section 16 shall not be allowed to the Federal Government, the 17 government of any State, of the District of Colum- 18 bia, or of any possession of the United States, any 19 tribal government, or any political subdivision, agen- 20 cy, or instrumentality of any of the foregoing. 21 (2) EXCEPTION.—Paragraph (1) shall not 22 apply to any organization described in section 23 501(c)(1) of the Internal Revenue Code of 1986 and 24 exempt from tax under section 501(a) of such Code. 25 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 6799 IH (g) ELECTION TO NOT TAKE CERTAIN EXPENSES 1 INTO ACCOUNT.— 2 (1) IN GENERAL.—If an eligible employer elects 3 (at such time and in such manner as the Secretary 4 may prescribe) to not take into account any amount 5 of qualified fixed expensees for purposes of deter- 6 mining the credit under this section, such amount of 7 qualified fixed expenses shall not be so taken into 8 account. 9 (2) COORDINATION WITH PAYCHECK PROTEC- 10 TION PROGRAM.—The Secretary, in consultation 11 with the Administrator of the Small Business Ad- 12 ministration, shall issue guidance providing that cov- 13 ered mortgage obligations, covered rent obligations, 14 and covered utility payments paid or incurred during 15 the covered period shall not fail to be taken into ac- 16 count as qualified fixed expenses for purposes of de- 17 termining the credit under this section by reason of 18 an election under paragraph (1) to the extent that 19 a covered loan of the eligible employer is not for- 20 given by reason of a decision under section 1106(g). 21 Terms used in the preceding sentence which are also 22 used in section 1106 shall have the same meaning 23 as when used in such section. 24 VerDate Sep 11 2014 04:32 May 27, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H6799.IH H6799 kjohnson on DSK79L0C42PROD with BILLS 13 •HR 6799 IH (h) TRANSFERS TO CERTAIN TRUST FUNDS.—There 1 are hereby appropriated to the Federal Old-Age and Sur- 2 vivors Insurance Trust Fund and the Federal Disability 3 Insurance Trust Fund established under section 201 of 4 the Social Security Act (42 U.S.C. 401) and the Social 5 Security Equivalent Benefit Account established under 6 section 15A(a) of the Railroad Retirement Act of 1974 7 (45 U.S. [Text truncated for display. 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