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1 1 (May 20, 2021)

handle is hein.crs/govedjx0001 and id is 1 raw text is: Congressional Research Service MaisaieInfo rring th e legislative d ebate since 1914 Updated May 20, 2021 SBA Restaurant Revitalization Fund Grants The Small Business Administration's (SBA's) $28.6 billion Restaurant Revitalization Fund Program (RRF) was authorized by P.L. 117-2, the American Rescue Plan Act of 2021. The RRF provides grants of up to $5 million per permanent physical business location (not to exceed $10 million per applicant and any affiliated businesses) to restaurants and other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink and which have experienced COVID-19-related revenue loss. Unlike most other SBA programs, there is no limit on the number of employees for businesses to qualify for a RRF grant. This Insight summarizes the statutory provisions enacted by P.L. 117-2 and SBA-issued guidance on the RRF. For more information, see the SBA's Restaurant Revitalization Funding Program Guide. Eligibility Rules RRF grants are designed to assist applicants in remaining open or reopening. Permanently closed businesses are not eligible and temporarily closed businesses must reopen soon, with eligible expenses incurred by March 11, 2021, at the latest. To qualify for the RRF, for-profit businesses (together with their affiliated businesses) may not have owned or operated more than 20 locations as of March 13, 2020, regardless of whether those locations do business under the same or multiple names. P.L. 117-2 provides that, for the purposes of the RRF, a business is affiliated with another if it has an equity or right to profit distributions of not less than 50% or if an eligible entity has the contractual authority to control the direction of the business. Other entities not eligible for the RRF include state or local government-operated businesses, an entity that has received or has a pending application for the SBA's Shuttered Venue Operators Grant program, nonprofit organizations, and publicly traded companies. Certain businesses that have filed for bankruptcy are also ineligible. Although further SBA guidance could be necessary, it would appear that franchises could be eligible for the RRF as long as they meet the affiliated business limit of 20 locations and the franchises, themselves, are not publicly traded. The SBA also requires that a RRF applicant certify that, current economic uncertainty makes this funding request necessary to support the ongoing or anticipated operations. This certification, which was first required on applications for SBA's Paycheck Protection Program (PPP) loans, has been subject to evolving agency guidance. In the PPP context, SBA requires that the borrower pass a business activity assessment and a liquidity assessment, each of which require detailed responses on SBA Form 3059. Grant Amounts P.L. 117-2 requires the SBA to set aside $5 billion for applicants with 2019 gross receipts of not more than $500,000 and to distribute the remaining $23.6 billion in an equitable manner to applicants of different sizes based on annual gross receipts. To meet this latter directive, the SBA is setting aside an additional $4 billion for applicants with 2019 gross receipts from $500,001 to $1.5 million and an additional $500 million for applicants with 2019 gross receipts of not more than $50,000 to ensure that the smallest businesses and those in underserved communities receive funding. The SBA is also required to provide priority to small businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals and may award grants only to these prioritized groups during the initial 21 days that the program is operational. The SBA has announced that during this time period, it will accept applications from all eligible applicants, but will distribute funds only to applicants that self-certify their eligibility as a prioritized group. Thereafter, grants will be distributed in the order in which they are approved by the SBA. An applicant's grant award is equal to the amount of COVID-19-related revenue loss (up to the program's limits) the applicant experienced, as determined by formulas. In the SBA's RRF Program Guide, these formulas vary, in part, based on the date an eligible entity began operations (e.g., the date the entity started sales). Separate formulas determine grant amounts for applicants that began operations on or before January 1, 2019; partially through 2019; on or between January 1, 2020, and March 10, 2021; or have not yet opened for sales but, as of March 11, 2021, have incurred eligible expenses. The SBA's RRF Program Guide contains step-by-step calculation instructions. For example, entities that began operations on or before January 1, 2019, may receive the difference between their gross receipts as reported on their 2019 and 2020 federal income tax returns, excluding any amounts received from a list of specified sources (this includes the SBA's PPP, Economic Injury Disaster Loan (EIDL) Program, EIDL Advance Payment Program, Targeted EIDL Program, and debt relief payments). If the applicant received a PPP loan or EIDL, those amounts will be subtracted from the RRF grant amount. ittps://crsreports.conqross.gov

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