On September 28, 2020, Democrats in the U.S. House of Representatives unveiled an updated coronavirus relief stimulus bill (the updated Heroes Act) that includes the RESTAURANTS Act.  The text of the bill is over 2,100 pages.

Section 607 of the proposed bill incorporates the RESTAURANTS Act, which establishes a $120 billion program administered by the Treasury Department to provide restaurants, bars, food trucks, taprooms, taverns, caterers, taprooms and similar businesses.  

The grant amount would reflect the difference between the business’s 2019 revenues and estimated 2020 revenues for each quarter. Grants would be limited to businesses with 20 locations or less. Grants could be used to pay payroll costs, mortgage payments, utilities, maintenance, food, beverage, and operational exceptions, debt obligations to suppliers and supplies.

During the first fourteen days of program administration, the Treasury Department would be required to prioritize grants to women-owned and minority-owned entities, and businesses with annual revenues of less than $1.5 million.

Although the program is set up as grant funding, restaurants would need to use those funds by June 30, 2021, or the loans would be converted into a ten year loan with a 1% interest rate. The section also allows restaurants to request additional funds to provide 10 paid sick days for their employees.

If a restaurant receives a grant and then goes out of business before June 30, 2021, the entity would be required to return any unspent funds to the Treasury Department.

Another section of the stimulus bill, Section 203 clarifies that expenses paid or incurred with proceeds from the RESTAURANTS Act and other COVID-19 relief bills such as Payment Protection Program loans and EIDL grants do not result in a denial of any deduction or basis of any asset for federal tax purposes.

A detailed summary of the complete bill is available here.