In response to the economic fallout from the COVID-19 pandemic, the US government has taken a number of steps to provide emergency funding for businesses and stimulate the economy. Most recently, on December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (H.R. 133), which includes the much awaited US$900 billion Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA). After some delay, the President signed the legislation into law on December 27, 2020.


A product of months of negotiations, CRRSAA represents the federal government's most recent response to the devastating COVID-19 pandemic. The sweeping aid package provides much-needed relief to millions of businesses and individuals, including a number of economic stimulus programs to support private businesses. Two of CRRSAA's key components extend relief programs created under previous legislation, as the law allocates US$284 billion to expand Paycheck Protection Program (PPP) loans, and US$16 billion for airlines and contractors to bring back furloughed workers. It also introduces new relief efforts, such as allocating funds for eligible live venue operators.

As with the previous COVID-19 legislation, CRRSAA's stimulus programs come with various strings attached. Companies and individuals interested in obtaining the newly-minted aid should critically assess their situation and consider the oversight implications before enrolling in any of CRRSAA's programs. Indeed, regulators have already prosecuted a slew of cases related to previous aid programs, and have signaled that fraud and abuse related to pandemic aid will remain a priority for the foreseeable future.

Below we provide a summary of some of the larger programs included in CRRSAA, particularly those actions that provide opportunities for companies to seek favorable loans and other forms of relief. The Norton Rose Fulbright team is monitoring these developments carefully, and is able to assist clients in thinking strategically about how to leverage these opportunities to manage the current economic circumstances. These summaries are not intended to provide a comprehensive overview of the CRRSAA or its component programs. This document is current through December 28, 2020.

For further information, please contact: Samuel R. Ramer.

The Paycheck Protection Program

Almost one-third of the US$900 billion CRRSAA is dedicated to expanding the Paycheck Protection Program created by the CARES Act earlier this year. See our prior coverage. The Act directly appropriates an additional US$284.45 billion for initial and second draw PPP loans. Eligible businesses can receive up to US$10 million for an initial PPP loan, and up to US$2 million for a second draw loan. They can use the loan money to cover operating expenditures, pay supplier contracts necessary for the business, buy personal protective equipment for employees, buy adaptive equipment to comply with COVID-19 health and safety guidelines and repair property damage incurred during the 2020 public disturbances. Businesses are prohibited from using any PPP loan money for lobbying activities.

Eligible businesses

Initial PPP loan eligibility is governed by the same requirements from the CARES Act, and loans are generally available to businesses that have been in operation since at least February 15, 2020, with fewer than 500 employees, and that certify the loan is needed to maintain operations during COVID-19 and to maintain the same average number of employees employed before the pandemic.

Second draw loans are available to businesses in operation since at least February 15, 2020, that employ 300 or fewer employees, have used or will use the full amount of their initial PPP loan, and that can demonstrate at least a 20 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to that same quarter in 2019.

Business exclusions

Publicly-traded companies are specifically prohibited from receiving PPP loans, except for publicly-traded news organizations that certify the loan will be used to support locally focused or emergency content.

Loan forgiveness

Initial loans and second draw loans used on covered expenditures are forgiven between 8 and 24 weeks after origination, but forgiveness is proportionately reduced for employee salaries that are reduced by more than 25 percent during the COVID-19 emergency. Borrowers can only obtain partial forgiveness if they use more than 40 percent of the loan for non-payroll expenses.

CRRSAA also provides a simplified process for loans under US$150,000, providing that the borrower "shall" receive forgiveness if they sign and submit a certification to the lender that the borrower complied with PPP loan requirements, including a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount.

Lender hold harmless

CRRSAA protects PPP lenders from any enforcement actions or penalties relating to loan origination and forgiveness and allows them to rely on borrower certifications and documents for PPP loans so long as the lender 1) acts in good faith relating to loan origination or forgiveness, and 2) that all other relevant federal, state, and local rules are followed.

Other small business relief

Live venue operators

CRRSAA provides for US$15 billion in grants for eligible live venue operators and related entities that demonstrate a 25 percent reduction in revenues, with US$2 billion set aside for eligible entities that employ 50 or fewer employees. Eligible entities can receive up to a US$10 million grant, along with a supplemental grant that is equal to 50 percent of the initial grant. For the first 14 days of the program, grants will only be awarded to eligible entities that have faced 90 percent or greater revenue loss, and for the following 14 days grants will only be awarded to eligible entities that have faced 70 percent or greater revenue loss. Only after this 28-day period will grants be made available for other eligible entities.

Similar to PPP loans, these grants can only be used for certain specified expenses, such as payroll, utilities, and personal protective equipment. These grants also come with increased oversight from the Small Business Administration to ensure the proper use of the grants.

Business tax provisions

Payroll tax deferral

CRRSAA extends the repayment period for payroll taxes deferred under the President's August 8, 2020 Executive Order, providing that penalties and interest on unpaid payroll taxes will not begin to accrue until January 1, 2022.

PPP loans

CRRSAA clarifies that PPP loans that are forgiven do not qualify as gross income, and will therefore not result in negative tax consequences for borrowers. Businesses can also continue to deduct otherwise deductive expenses that are paid for with proceeds of a PPP loan that is forgiven.

Payroll support for airline industry

CRRSAA includes US$15 billion in grants for airline carriers and US$1 billion in grants for airline contractors, to be used to extend the Payroll Support Program established under the CARES Act. The funds will be distributed in amounts proportional to the amounts received under the CARES Act, or, if the entity did not participate in the CARES Act, modified proportions based on similar metrics. The Secretary of the Treasury is required to begin making payments within 10 days after CRRSAA is enacted.

In order to receive funding, CRRSAA requires an airline carrier or contractor to certify that it will:

  • Refrain from conducting involuntary layoffs or furloughs or reducing pay or benefits until March 21, 2021;
  • Refrain from purchasing an equity security of the entity or the direct or indirect parent company of the applicant that is listed on a national security exchange until March 31, 2022 (note that this requirement also applies to any affiliate of the carrier or contractor); and
  • Refrain from paying dividends or making other capital distributions with respect to common stock until March 31, 2022.

The airline carrier or contractor will also be required to:

  • Recall involuntarily furloughed workers;
  • Provide backpay to returning employees; and
  • Restore all rights and protections to returning employees as if they had never been involuntarily furloughed.

For carriers and contractors that participated in the CARES Act Payroll Support Program, the provisions related to rehiring workers apply to those employees who were furloughed between October 1, 2020 and the date that the air carrier/contractor enters into a new agreement with the Treasury Secretary pursuant to CRRSAA. For those that did not participate in the CARES Act program, the provisions apply to employees who were furloughed between March 27, 2020 and the date of the new agreement.

Carriers or contractors must also agree to limit, during the two-year period from October 1, 2020 through October 1, 2022, "total compensation" (which includes salary, bonuses, stock awards, and other financial benefits) for certain employees:

  • Total compensation would be frozen for individuals who earned between US$425,000 and US$3 million in 2019 (except for employees whose compensation is determined through a pre-existing collective bargaining agreement). This group would also be prohibited from receiving severance or other exit payments exceeding twice the amount earned in 2019.
  • Individuals who earned over US$3 million in 2019 would be limited to an annual total compensation of US$3 million plus half of the amount of total compensation exceeding US$3 million that was earned in 2019.

CRRSAA authorizes (but does not require) the Transportation Secretary to require air carriers that receive payroll support to maintain certain scheduled air transportation services (to any point served by that carrier before March 1, 2020).

Lastly, CRRSAA authorizes (but does not require) the Treasury Secretary to receive financial instruments issued by the recipients (e.g., warrants, options, preferred stock, debt securities, or notes), which, in the Secretary's discretion, "provide appropriate compensation to the Federal Government for the provision of the financial assistance."

Additional appropriations of note

Airport grants

CRRSAA provides US$2 billion in grants for the operations and personnel cost of airports, including relief for airport retailers and assistance to communities with small airports.

Agricultural assistance

CRRSAA provides over US$11 billion to the Secretary of Agriculture to make available to prevent, prepare for, and respond to the coronavirus by supporting agricultural producers, growers, and processors. Of this US$11 billion, at least US$1.5 billion will be used to purchase food and agricultural products, including seafood. The same fund is also available to make loans and grants to small and mid-sized food processors or distributors, seafood processing facilities and vessels, farmers markets, and producers to respond to COVID-19, including measures to protect workers.



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