Bill Overview
Title: A bill to ensure that no cost reduction or cash refund is due under certain transportation cost-reimbursement contracts on the basis of the forgiveness of certain covered loans, and for other purposes.
Description: This bill exempts until June 30, 2025, certain contractors that receive federal highway or public transportation funding from having to adjust costs associated with their contracts to account for loan forgiveness through the Paycheck Protection Program (PPP). (The PPP provided small businesses with loans for payroll and other costs to respond to the COVID-19 emergency with loan forgiveness under certain conditions.) Under current law, a contractor with a cost-reimbursable contract must reduce costs or provide cash refunds to the Department of Transportation (or a state department of transportation) if the contractor receives or accrues any income, rebate, allowance, or other credit relating to an allowable contract cost, which includes PPP loan forgiveness.
Sponsors: Sen. Braun, Mike [R-IN]
Target Audience
Population: Contractors receiving federal highway or public transportation funding with PPP loan forgiveness
Estimated Size: 300000
- The legislation affects contractors that receive federal highway or public transportation funding, meaning these contractors are primarily in the United States.
- It concerns contractors that have benefited from PPP loan forgiveness; hence, the businesses involved range from small to mid-sized enterprises operating in the transportation infrastructure sector.
- According to a report by SBA, approximately 5.2 million PPP loans were approved in the U.S. by the end of the program in May 2021, suggesting the potential scale of businesses initially affected.
- Given the nature of public infrastructure, the impact extends only to a subset of PPP loan recipients who engage in transportation relevant contracting.
Reasoning
- The number of contractors who received PPP loan forgiveness and are involved in federal highway or public transportation projects may be a small subset of all PPP recipients. This allows the policy to potentially stay within budget while providing relief to impacted contractors.
- Contractors may have varying impacts depending on their size, dependency on public contracts, and the amount of PPP loan forgiveness they received.
- The policy would directly impact contractors with PPP loans by removing the requirement to adjust costs or provide refunds. For smaller contractors, this could mean increased cash flow, while larger ones might see less impact relative to their overall operations.
- While the direct beneficiaries (contractors) might experience tangible benefits, secondary stakeholders like employees and nearby communities could indirectly benefit from continued operations and projects.
Simulated Interviews
Project Manager (Albuquerque, NM)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- This policy really helps streamline our budgeting process.
- The PPP loan forgiveness benefit lets us reinvest more directly into our projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Small Business Owner (Springfield, IL)
Age: 37 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 6/20
Statement of Opinion:
- This exemption is a financial relief during a competitive time.
- I’m grateful for the support but worry what happens when it ends.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 3 |
Financial Officer (Austin, TX)
Age: 54 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 4/20
Statement of Opinion:
- For us, it's more about less administrative burden than cash flow.
- We were prepared to comply with old requirements, so the impact is minor.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Contractor (Bozeman, MT)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- This means I can keep more of my earnings without impact on the refund side.
- I hope this exemption can extend longer, it's a big help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Retired Engineer (Columbus, OH)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 3/20
Statement of Opinion:
- I see the practical side in reducing bureaucratic burden for contractors.
- I'm not directly affected, but I appreciate how it helps others in the sector.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Business Consultant (Memphis, TN)
Age: 41 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- This policy will help maintain momentum on projects without financial hiccups.
- Some of my clients might experience more stability with this bill passed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Subcontractor (Miami, FL)
Age: 32 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- This ensures stable employment for me as my company can focus resources better.
- I hope more policies like this extend beyond 2025.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Entrepreneur (Seattle, WA)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- This policy helps by reducing complex accounting during the transition to normal business post-COVID.
- The impact is more pronounced in our cash flow management.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Contractor (Tucson, AZ)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- It’s a great relief that we don’t have to adjust costs for now.
- Helps us build a strategic cash reserve for uncertainties ahead.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Policy Analyst (Denver, CO)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 3/20
Statement of Opinion:
- This policy makes administrative processes less burdensome for beneficiaries.
- The broader economic ripple might be more positive and stimulate local economies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $80000000 (Low: $60000000, High: $100000000)
Year 2: $80000000 (Low: $60000000, High: $100000000)
Year 3: $80000000 (Low: $60000000, High: $100000000)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The bill's effects are temporary until June 30, 2025, limiting any long-term fiscal impact.
- The exempted amounts depend heavily on the volume and value of contracts involving PPP loan forgiveness across affected contractors.
- The broader economic environment, including ongoing impacts from the COVID-19 pandemic, may influence business operations in the public transportation contracting sector.