Governor Kate Brown’s May 15 executive order (No. 20-25), “Reopening a Safe and Strong Oregon,” provides for a phased reopening of recreational and economic activity in Oregon on a county-by-county basis as certain threshold prerequisites are met. All Oregon counties, with the exception of Multnomah County, have achieved the prerequisites for a Phase I reopening. Phase I allows certain businesses to operate, provided each business is able to maintain social distancing and comply with other health and safety guidelines. A full list of the guidelines for different types of establishments can be found here. Continue Reading
Estimated Corporate Activity Tax Payments and Penalty Waivers
As previously reported, the Oregon Department of Revenue has not extended the filing or payment deadlines for the Oregon Corporate Activity Tax during the ongoing COVID-19 saga, but has been instructed not to impose penalties on taxpayers that can document that they have been negatively impacted by COVID-19 and are therefore unable to comply with their tax filing and payment obligations. Earlier this week, Governor Brown issued a letter outlining documentation that the Department would accept, including documentation showing:
- Their inability to pay a quarterly payment because of insufficient funds due to COVID-19.
- Their inability to reasonably calculate a quarterly payment or annual tax liability due to their business being impacted by COVID-19.
- That the taxpayer is unclear at this time whether the business will owe Corporate Activity Tax in April 2020 due to COVID-19 impacts, after taking into consideration exclusions and subtractions in the law.
Let’s Get Back to Work! Construction Industry Personnel Considerations and Resources Related to COVID-19
With the recent reopening of Phase 1 construction in Washington and the eagerly awaited resumption of projects throughout the Pacific Northwest, we thought it might be helpful to provide a quick snapshot of the key regulatory guidance and tailored Miller Nash resources that employers in the build community may find most helpful as they prepare to return to work. This is, of course, not intended to cover everything employers will need to consider, but does address three key personnel-related topics where COVID-19 has impacted the construction industry thus far.
Governor Inslee Greenlights Re-Opening of Construction Projects That Meet Social Distancing and Other Required Safety Measures
On April 24, 2020, Governor Inslee signed an order re-opening construction projects that meet detailed safety requirements across all sectors (residential, commercial, public, etc.). Under Governor Inslee’s 30-point plan, work may only be resumed on any given project if they follow requirements found here, which include:
- Social distancing of at least six (6) feet is maintained by every person at all times;
- A COVID-19 exposure control, mitigation, and recovery plan is developed and posted at the site;
- Detailed safety training requirements are met;
- Water and sanitation is provided;
- Daily attendance logs are kept;
- Worker temperature check requirements, symptom monitoring, and incident reporting plans are followed;
- Employer-provided personal protective equipment (PPE) is provided; and
- A site-specific COVID-19 supervisor is designated and present at all times.
Straight Talk for Managing Your Business When “Normal” Disappears
With businesses facing a barrage of daily challenges, it becomes important to focus on key decisions that can make a difference. We address three of these key issues in this post: your contractual obligations, keeping in mind added legal obligations that might arise to creditors if your business is closed and facing insolvency, and the liability risk that might exist as businesses reopen under the new normal. Continue Reading
COVID-19: Modifications to Loans May Have Unintended Tax Consequences
As we previously discussed, on March 22, 2020, federal banking regulators published the Interagency Guidance (“the Guidance”) to encourage lenders to, among other things, enter into short-term loan modifications (if prudent and appropriate) with borrowers impacted by the COVID-19 outbreak. Short-term loan modifications only include those effective for six months or less. The Guidance only applies to those loans that are current (less than 30 days past due) when the modification is implemented. Such modifications can include payment deferrals, fee waivers, repayment term extensions, or other “insignificant” delays.
Those intending to modify existing loans in accordance with the Guidance should keep in mind that modifications may have unintended federal income tax consequences. For tax purposes, a “significant modification” of an existing loan is treated as a deemed sale of the loan in exchange for a new loan bearing the modified terms. The deemed sale treatment could generate income tax for the lender if the lender acquired the loan at a discount from a third party, or could generate cancellation of indebtedness income for the borrower if the modified loan (treated as a new loan for tax purposes) bears interest at a rate that is less than the applicable federal rate.
“Significant modifications” include suspending interest and principal payments for more than half of the original loan term. Because the Guidance requires that short-term loan modifications only include those effective for six months or less, this deemed sale treatment could arise for underlying loans with a term of one year or less.
Oregon Imposes Statewide Moratorium on Commercial Evictions
In a recent post discussing strategies for commercial landlords to manage requests for rent relief during the COVID-19 pandemic, we highlighted the Seattle City Council’s resolution urging state and federal legislators to impose an immediate moratorium on commercial rent and mortgage payments. The Seattle City Council’s resolution came at the heels of state and municipal governments across the country issuing similar orders. Just yesterday, the State of Oregon fell in line when Governor Kate Brown issued Executive Order 20-13, which implements a 90-day moratorium on commercial evictions for non-payment.
Under Governor Brown’s order, landlords of non-residential properties in Oregon are prohibited from terminating any tenant’s lease or otherwise interfere with the tenant’s right to possession for reason of non-payment of rent, late charges, utility charges, or any other service charge or fee. To qualify, Tenants must, within 30 calendar days of unpaid rent being due, provide their landlord with evidence that such tenant’s inability to pay rent is “caused by, in whole or in part, directly or indirectly, the COVID-19 pandemic.” Continue Reading
EPA and States Issue Temporary Policies: Air and Water Permit Compliance During COVID-19
In light of the COVID-19 crisis, federal and state environmental agencies have issued temporary policies that affect regulated entities. This blog post is intended to help summarize these guidelines and highlights pertinent questions.
U.S. ENVIRONMENTAL PROTECTION AGENCY
Last week, the U.S. Environmental Protection Agency (EPA) released a public memorandum setting forth a “temporary policy” of using its “enforcement discretion” for noncompliance of certain legal obligations during the COVID-19 pandemic.
The new policy may provide some relief on civil enforcement of environmental permits. Many EPA air and water permits require sampling at regular intervals, and visual and other types of monitoring. The EPA’s temporary policy acknowledges that sampling and monitoring may be impossible without personnel being physically present due to state and local “stay-at-home” and “shelter-in-place” emergency orders. In addition, employee furloughs and layoffs may have significantly impacted the ability to comply with air and water permit conditions. In response to these unprecedented circumstances, the EPA will exercise “enforcement discretion” for regulated entities’ noncompliance with environmental permit requirements. Continue Reading
Strategies for Commercial Landlords to Manage Tenants in COVID-19 Distress
On Monday, the Seattle City Council passed Resolution 31940 calling on Governor Jay Inslee, federal legislators, and the Trump administration to impose an immediate moratorium on residential and commercial rent and mortgage payments. This resolution brings to boil an issue with which many commercial landlords (particularly of non-essential retail, restaurant, and office space) have grappled for weeks – how to provide practical relief to their tenants facing government-imposed restrictions on travel and business while continuing to meet their own financial and operational responsibilities. Below are strategies, from a general leasing perspective, that every commercial landlord should consider when navigating these uncharted waters. Continue Reading
CARES Act Provides Relief for Federally Backed Property Loans and Renters
On March 25, 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to address the COVID-19 emergency. Although the CARES Act is still subject to final approval by the House of Representatives and being signed by President Trump, it is expected that there will be little or no change to what has been approved by the Senate. The CARES Act includes three sections that will be of particular importance to real estate professionals, as follows. Continue Reading
