Almost a year to the day after all Colorado restaurants were told to shut down their dining rooms, the U.S. House of Representatives gave its final approval to the American Rescue Plan, the $1.9 trillion COVID relief package that includes over $28 billion set aside for the hospitality industry as part of the Restaurant Revitalization Fund (which is a pared-down version of last year’s RESTAURANTS Act). That means the bill will be signed by President Biden on Friday, March 12, and a grant program will be created specifically for independent bars and restaurants.
Restaurants, brewpubs, tasting and taprooms, and caterers that have less than 20 locations and aren’t publicly traded will be eligible for grants (which do not have to be repaid) of up to $5 million. Restaurants that opened in 2019 and 2020 will also be eligible for funding, and $5 billion will be set aside for the smallest of the small, restaurants that had under $500,000 in receipts in 2019. And early on in the application process, priority will be given to businesses owned by veterans and women, plus socially and economically disadvantaged businesses.
Operators can spend grants on a wider range of expenses than the PPP loans, including payroll and benefits, mortgage or rent payments, utilities, maintenance, supplies (including protective equipment and cleaning materials), food, operational expenses, and sick leave.
Here’s a cheat sheet on the restaurant bailout put together by the Independent Restaurant Coalition (IRC), which had a major hand in the development of the RESTAURANTS Act (we covered the organization and the bill last October) and in shepherding it through the legislative process. Rep. Earl Blumenauer (D-OR, pictured above in a jazzy mustard bow tie), a co-sponsor of 2020’s bipartisan RESTAURANTS Act, said, “Working with IRC has been awe-inspiring….This bill would not look like it does without the IRC. There are a host of groups out there, but they weren’t fighting for independent restaurants.”
A proposal to increase the national minimum wage to $15 per hour was previously removed from the American Rescue Plan. Under the plan, federal unemployment benefits will also be extended through September 6, 2021 at the rate of $300 per week, instead of the $400 per week originally proposed.
The Small Business Administration (SBA) will be administering the grant program, so here’s hoping the application and funding processes will be smoother than the first round of the SBA-administered PPP loans. The SBA will still need several weeks to develop program rules.
In case you’re keeping track of who voted against the fund (and you should be) note that not a single Republican legislator in either the House of Representatives or Senate voted for the package—which also includes $1,400 in direct stimulus payments to individuals making under $75,000 per year.
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