Feb 05 2021
Bipartisan, Bicameral Proposal Would Support Hard-Hit Restaurants Through New Revitalization Fund
WASHINGTON – U.S. Senators Roger Wicker, R-Miss., and Kyrsten Sinema, D-Ariz., and Representatives Earl Blumenauer, D-Ore., and Brian Fitzpatrick, R-Pa., today introduced the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (RESTAURANTS) Act of 2021. The bipartisan, bicameral legislation is an updated proposal to establish a $120 billion revitalization fund to support independent restaurants and small franchisees as they deal with the long-term structural challenges facing the industry because of COVID-19.
“The coronavirus pandemic continues to threaten the existence of many of America’s restaurants and the suppliers that support them,” Wicker said. “Without additional targeted relief, many restaurants, especially small and independent establishments, may not survive the year because of state indoor dining restrictions. The RESTAURANTS Act would provide support to help these small businesses adapt their operations and keep their employees on the payroll as our nation works to finish the fight against COVID-19.”
“Arizona restaurants fuel jobs across our state, and these employers need support now more than ever. Establishing a restaurant rescue plan will get Arizonans back to work and ensure local Arizona restaurants can keep their doors open as we continue to fight the ongoing pandemic and lay the groundwork for a full economic recovery,” said Sinema.
“Time is running out for local restaurants. The Paycheck Protection Program was a short-term lifeline for millions of businesses, but it wasn’t designed for restaurants, who need a tailored long-term solution like the direct cash grants outlined in our RESTAURANTS Act. For hundreds of thousands of restaurants, diners, coffee shops, and bars to have a fighting chance of staying in business, Congress must immediately take up this legislation which has already passed the House and has the support of more than half the Senate,” said Blumenauer.
“Our independent, local restaurants continue to be hit especially hard by the COVID-19 pandemic. Forced to continuously reimagine operations in response to each new, ambiguous state dining restriction thrown their way, and often limited to utilizing solely take-out and delivery services, many family-operated restaurants in my community and across our great nation have lost thousands of dollars in potential income and have resorted to unprecedented adaptive measures,” said Rep. Fitzpatrick. “The mom and pop diners and delis on Main Street need our help. Our bipartisan, bicameral RESTAURANTS ACT will provide local businesses and their hardworking employees with the hope and support to survive this pandemic."
The RESTAURANTS Act of 2021 is modeled after legislation the authors introduced last Congress. Their new proposal would create a $120 billion Restaurant Revitalization Fund to provide relief to food service or drinking establishments that are part of a group of up to 20 facilities. Owners could apply for grants of up to $10 million to cover eligible expenses retroactively to February 15, 2020, and ending eight months after the legislation is signed into law.
Grants could be used to support payroll, benefits, mortgage, rent, utilities, building maintenance and construction of outdoor facilities, supplies (including protective equipment and cleaning materials), food, operational expenses, paid sick leave, debt obligations to suppliers, and any other essential expenses.
The legislation also includes several new provisions to help restaurants and their employees and ensure the integrity of the program. These provisions would:
- Update the award calculation based on annual loss from calendar year 2020 rather than quarterly.
- Provide grant eligibility for new restaurants that opened after January 1, 2020.
- Provide paid sick leave as an eligible expense for employees and provides a bonus amount to cover the cost of voluntarily providing 10 days of sick leave to employees.
- Provide Treasury the discretion to help reduce waste, fraud, and abuse.
- Impose reporting obligations on the Department of the Treasury to share who gets loans and demographic information about the recipients.
- Ensure that restaurants can use both the Employee Retention Tax Credit and the RESTAURANTS Act grant program, so long as they are not used for the same expenses.
For a full summary of the legislation, click here.
The legislation is supported by the Independent Restaurant Coalition (IRC) and the National Restaurant Association (NRA).
“Ensuring the 11 million people employed by restaurants and bars can continue to earn a living is vital to rebuilding our economy after this pandemic," said Erika Polmar, Executive Director of the Independent Restaurant Coalition. “The RESTAURANTS Act is a crucial step to putting millions of Americans back to work and stimulating the vast network of other local businesses powered by restaurants and bars. Our grassroots network of restaurant operators, suppliers, and allies worked hard throughout the pandemic educating members of Congress and the public about our industry, securing bipartisan support for targeted relief from 90 Senators. Sens. Wicker and Sinema, and Reps. Blumenauer and Fitzpatrick have been fierce advocates for independent restaurants and bars and this industry is grateful for their continued efforts to deliver this lifeline to our community.”
“The RESTAURANTS Act of 2021 places independent, chain, and franchise restaurants on a path to economic survival. In an era when agreement in Congress is rare, we appreciate the strong bipartisan leadership from Senators Roger Wicker and Kyrsten Sinema and Representatives Earl Blumenauer and Brian Fitzpatrick. Our members desperately need this legislation, and we look forward to working together with Congress as we continue our efforts to advance the recovery of the entire restaurant industry,” said Tom Bené, President & CEO of the National Restaurant Association.
Restaurants have been uniquely affected by COVID-19. Restaurants finished 2020 with sales losses of more than $240 billion and 2.5 million jobs below its pre-pandemic level. More than 1 in 6 restaurants are closed permanently or long-term, and open restaurants are grappling with decreased revenues because of reduced capacity and social distancing requirements.
Before the pandemic began, there were over one million restaurant locations in the United States, including bars, independent restaurants, chain restaurants, and social caterers. The restaurant industry also supports a network of farmers, fishermen, truck drivers, and other suppliers in the food supply chain.
Small independent and franchise restaurants are at greater risk of permanently going out of business amid the pandemic because consumer spending at these establishments has been disproportionately affected and owners often lack sufficient access to capital markets. On the whole, the recovery fund is expected to generate at least $183 billion in primary benefits and $65 billion in secondary benefits – more than double the amount of the proposed grants.