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Other Stuff in the COVID Bill

Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

Sarina did a good job of outlining what we know about the dairy-specific provisions of the recently passed and signed COVID Relief Bill. No doubt with 5,593 pages, which you can read here, new tidbits of interesting information will come out as analysis continues over the next days and weeks. But for today, we notice that Section 276 of the bill clarifies that forgiven Paycheck Protection Program (PPP) loans will not be included as taxable income and it clarifies that deductions for expenses paid with the proceeds of the PPP loans will be allowed, so that is a pretty big deal. This provision will also apply to any subsequent PPP loan that might occur as a result of passage of this bill. There is a second round of PPP that small business can access. You can find more detail about it here.

The bill also provides that 1% flavored milk can be offered in the school lunch program as long as it is consistent with the recommendations of the Dietary Guidelines Advisory Committee. Hard to believe this takes an act of Congress, but a court had thrown a monkey wrench into this issue some time ago and this bill was an opportunity to clear that up. (Makes you wonder what else is in this bill?)

Another big deal for the Central Valley is that the bill includes $206 million of federal funds for the repair of the Friant-Kern Canal. This very important surface water delivery facility gravity flows water 152 miles down the East side of the San Joaquin Valley from Millerton Lake above Fresno down to Bakersfield. There is a 30 mile stretch of the canal near Porterville that sunk creating a pinch point that has reduced the carrying capacity of the canal by about 50%. The effort to engineer a fix for this is complete and the nearly $500 million project is ready to go to construction, but funding is an issue. The $206 million will be combined with at least $175 million of local money that has been committed to get the project started. It will take several years to complete, but with this money in hand it is projected that construction will begin in a few months.

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