Pennsylvania Pandemic Recovery Aid Bill Signed on February 5, 2021

Updated on February 8, 2021 to include PPP loan forgiveness state personal income tax exemption.

On January 27, 2021, the Pennsylvania Senate unanimously approved Senate Bill 109 to provide $912 million in aid for schools, hospitality-related businesses, and for rent and utility support. The bill went to the Pennsylvania House of Representatives, who approved it with the addition of legislation to exempt loans that are forgiven under the Paycheck Protection Program (PPP) from state personal income tax. While C-Corps follow federal, the legislation was needed for pass-through entities. The new version of the bill was approved by both chambers and signed by Governor Wolf on February 5, 2021.

The current breakdown of the funding distribution is:

  • Hospitality – $145 million
  • Landlords and Tenants – $570 million
  • Private Schools – $197 million

Hospitality Industry Recovery Program

The hospitality industry recovery program will be distributed through county block grants program, and the funding is disbursed based on county population.

The bill allocates funding by dividing the estimate of a county’s population by the sum of the population of all counties. The following are just approximate amounts based on what the bill currently states:

  • Adams County
    • 8% = $1,160,000
  • Cumberland County
    • 9% = $2,824,419
  • Dauphin County
    • 1% = $3,045,000
  • Lancaster County
    • 2% = $6,128,000
  • York County
    • 4% = $4,930,000

Based on the current bill, here are some highlights of distribution:

  • To qualify, applicants must be able to show revenue losses of at least 25% with priority given to those with more than a 50% loss in revenue.
  • Maximum grant amount per applicant is $50,000.
  • Counties will be distributing the funding through Certified Economic Development Organizations (CEDO), such as the Capital Region Economic Development Corporation, Cumberland Area Economic Development Corporation, York County Economic Development Corporation (YCEDC), and the EDC Finance Corporation.
  • Priority will be given to those who have not already received government pandemic aid.

The program is expected to rollout in March with counties contracting with CEDOs by March 1, 2021 and applications being accepted by March 15, 2021.

Disclaimer: This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our Firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.