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Boscola Bulletin

I stand with BusinesesOn the Road to Recovery…Helping Pennsylvania & Its Businesses Get Back on Their Feet…

As we look to re-start the Pennsylvania economy past the Covid-19 shutdown, we need to put in place tools that will help our small businesses recover. I have introduced legislation to assist Pennsylvania’s businesses on their road to recovery. Small businesses are the backbone of our economy and our communities. We need to help them. The sooner we put plans in place to assist with our recovery, the better small business owners can plan for their restart date.

Ease Restrictions for Liquor and Beer Purchases for Licensees
 

This legislation would allow bars, restaurants, hotels, golf courses, clubs, fire halls, etc. that have a liquor license the ability to purchase wines and spirits from state liquor stores and beer from distributors on a credit basis – full payment not required at the time of purchase.  Currently, that is not permitted in the liquor code.  The goal is simply to help our businesses build up their cash reserves and serve their customers.  My bill would start this process on June 1, 2020 and would run for the period of one year.  A liquor licensee would be able to purchase liquor from a state store on a line of credit, with a maximum of no more than 30 days accrual without any payment towards the balance.  This is needed flexibility for the restart of these businesses.  Additionally, during the same time frame, liquor license holders would be able to, with agreement by a licensed distributor, purchase beer without a payment on delivery.  Distributors could establish a line of credit for a licensee for beer sales, with a maximum of no more than 30 days accrual

   
Restaurant and Lodging Sales Tax Amnesty
 

This bill would provide a six-month period of sales tax amnesty for restaurants, bars and hotels.  Not many businesses have been hard hit harder by the stay-at-home order than our restaurant and lodging sector. Even in the phased re-opening of Pennsylvania’s economy, our restaurants and hotels will continue to see the impacts from Covid-19.  In an effort to provide an incentive for individuals to visit these crucial businesses, this bill would grant a sales tax amnesty from the time the emergency order is lifted and commence for six months.  This would mean that patrons to restaurants as well as those staying in hotels or lodgings would not be required to pay any sales taxes for these services.

   
Establishing PA Small Business Guarantee Program
 

Restaurants and Hotels are not the only small businesses significantly impacted by this crisis.  Most of our small businesses have been devastated as a result of needing to close down or greatly reduce operations.  Some of these small businesses are considered high risk loans for banks, so getting credit can be expensive and difficult.  Curtailing needed access to credit for working capital and inventory impairs a business’s ability to even re-open.  I recognize that small businesses will need some help to build up their inventories after the shut- down and direct loans from banks might be difficult to obtain.  But these businesses need our help.  

Establishing PA Small Business Guarantee Program
I am working on legislation that would create a state guarantee program to help small businesses through the re-opening period. My plan calls for the creation of a state guarantee program to help these businesses with needed capital for inventory to get back on their feet after the crisis stops.  This is not a loan program.  Rather we would work with our community banks, small business development centers and credit unions to stand behind credit given to these businesses in the months that follow the reopening of the state.  Essentially, acting as a backstop making the loans less risky for the bank and thereby less expensive for the business. 

By acting as a guarantor we will help these businesses develop needed credit worthy relationships with local providers and help create an atmosphere where banks would be willing to extend credit.  With so many small businesses looking for financial help because they were left out of the federal program and their business interruption claims were denied - they need help, security and stability to reopen. 

The funds would only need to be accessed should a business that entered the program close and be unable to pay back commercial loans offered through the program.  The fund would be targeted to small Pennsylvania businesses that employ between 1 and 250 people.  

   
Childcare Grants
 

One of my priorities is to establish a grant program in the amount of $100 million for daycare services and centers in the Commonwealth.  Another industry devastated by the stay at home orders.

Childcare GrantsAs we begin to resume normal, societal functions by returning to work and visiting friends and loved ones, child-care will be an issue for many Pennsylvanians.  We need affordable child-care alternatives for the working families of Pennsylvania.  Due to the schools being closed for the remainder of the year, many parents and families will have to find alternative plans well ahead of the summer schedule.

Under this bill, any licensed daycare facility or child care summer camp/center would be eligible to apply for grant money from the state.  Funds awarded from the grants can be used for general operations of the facility or payroll.   

This one-time grant will be able to help these centers quickly get back on there feet and operational.  A portion of the money will need to be used to help reduce tuition costs for families as they return to work.

   
Business Interruption Insurance
 

There have been many businesses across the Commonwealth impacted by the pandemic, and many businesses that had business-interruption insurance policies cannot collect on claims made on losses because of the virus.  These claims are denied.  Several legislative proposals in how to find relief or mandate payments by insurers are being considered.

My bill would require the Insurance Commissioner to establish a review task-force, to determine the number of businesses that filed business-interruption claims, how many were denied due to a viral pandemic, and what the total amount of claims would be paid out if they had been approved.

Each business under this criteria would also have to disclose if they applied for and received any other federal or state grants or loans as well as how much they received from these programs, and then would receive a percentage of the business-interruption claim that would be further reduced by funds received from other grant and assistance programs.

   
Unemployment Compensation Business Relief Charges
 

Unemployment Compensation Business Relief ChargesThis legislation provides another avenue for economic relief for businesses in the Commonwealth as well as those employees impacted in the long-term due to the pandemic.

The bill expands and extends the unemployment compensation charges that businesses have been exempted from paying for laid-off or furloughed employees due to the business shutdowns.  The extension of this grace period would last from the time of the emergency order through December 30, 2020.  This will allow businesses, particularly those in hospitality and restaurant service, to have some employees return while others would be able to still collect unemployment compensation without any penalty on the business for this.

The fact is, we do not know how well many of our bars, clubs and restaurants will fare, or how well they will do once they can reopen.  Many regular customers and patrons may not return or venture out as often in the months after the stay-at-home orders.  Businesses such as these are going to need flexibility and assistance, and this is one way the state can help them to recover, make better financial decisions to ensure their survival in the long run, and still maintain unemployment benefits for those that need it.

   
Personal Income Tax (PIT) Holiday
 

Personal Income Tax (PIT) HolidayProviding employers with a state PIT holiday would assist many small businesses locally.  Specifically, employers would be able to postpone remittance of state employee PIT withholdings for the first quarter of the fiscal year 2020/2021.  Over the period of the next three quarters of the fiscal year, those first quarter withholdings would be remitted to the department of revenue.

This small change may help businesses with some additional cash flow in order to pay other costs that may require extra capital, while still being able to keep their business going in the aftermath of any shutdown and keep people employed.

   
Johnstown Flood Tax Redistribution
 

To assist in funding the above programs, it is my hope that this bill would pass to allow redistribution of funds from the Johnstown Flood Tax on alcohol to where they would be needed in response & recovery from the COVID-19 pandemic.

A reminder that this is not a new tax, but a redistribution of funds - first enacted by the legislature in 1937 after a devastating flood, this 18% excise tax on alcoholic spirits brings in annual revenues over $200 million to the general fund.  While still a tax on the books bearing the name of a response to a natural disaster, we need to re-purpose this money to fight this current disaster and pay for recovery programs, tax incentives and research to fight the coronavirus.

I firmly believe that ANY recovery from COVID-19 needs to include programs & innovative funding solutions to allow small businesses to reopen and get back on their feet.  Crafting these bills was a common-sense, no-brainer solution in which I hope my colleagues on both sides of the aisle come together and join to help bring Pennsylvania BACK – and better than EVER!

If you have some ideas about what might help, please email me and I would love to hear about them.

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Offices of State Senator Lisa M. Boscola

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