Restaurants Act reintroduced in Congress, here's why that matters for the industry

A renewed glimmer of hope dawned on the restaurant industry Friday after the RESTAURANTS Act receieved overwhelming bipartisan support in the Senate. The legislation was crafted to provide long-term relief to the hard-hit establishments.

On Friday, Sens. Roger Wicker, R-Miss., Kyrsten Sinema, D-Ariz., and representatives Earl Blumenauer of Oregon, and Brian Fitzpatrick, of Pennsylvania, formally introduced the RESTAURANTS Act in the 117th Congress following a 90-10 vote in the Senate supporting a budget amendment that will establish a dedicated restaurant relief fund.

The new legislation is modeled after the act that was introduced last Congress in June. The 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.

The legislation comes on the heels of a new January jobs report from the Department of Labor that showed 19,000 more restaurant and bar workers lost their jobs in the first month of 2021, despite gains across the economy.

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The food and beverage industry has seen monumental loss due to COVID-19. Nearly 2.5 million jobs were lost in the past year, far more than any other industry, and more than one in four people out of work from the pandemic worked in a restaurant or bar. Of the eateries across the country that have closed their doors since March, at least 110,000 have closed for good.

"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," Erika Polmar, executive director of the Independent Restaurant Coalition, said in response to the news. "The RESTAURANTS Act is a crucial step to putting millions of Americans back to work and stimulating the vast network of local businesses powered by restaurants and bars."

The grassroots network of restaurant operators, suppliers and allies have worked throughout the pandemic to educate both political leaders and the public about the challenges facing the industry, and pushes for bipartisan support for targeted relief.

"Business operators 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," according to the IRC.

Operators who secure a grant could use the funds for payroll, benefits, mortgage, rent, utilities, building maintenance, construction of outdoor facilities, PPE supplies, food, operational expenses, paid sick leave, debt obligations to suppliers and other essential expenses.

There are additional provisions in the new legislation to help ensure the integrity of the program including: award calculation based on annual loss from the 2020 calendar year vs. quarterly; grant eligibility for new restaurants that opened after Jan. 1, 2020; paid sick leave as an eligible expense; and ensuring "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."

Mitchell Moore, owner of Campbell’s Bakery in Madison, Mississippi, told the IRC they used to bake wedding cakes every week. "Now we’re lucky if we get one every month. It is just not sustainable and we need help," Moore said.

He continued, "Campbell’s is all I have left and we’re hanging on by a thread. We need a plan to ensure more restaurants and bars don’t meet the same fate as mine. This is a vibrant industry and Sen. Wicker and the Independent Restaurant Coalition are giving us hope that we can get back on our feet. It’s been a long year, and a longer winter but I am hopeful Congress will pass the RESTAURANTS Act and prevent this employment crisis from continuing for years to come."

According to the IRC, an economic analysis of the proposal revealed that the proposed $120 billion in grants could potentially create $271 billion in economic benefits to the U.S. economy.