Congressional Action on Coronavirus: Resources for All Industries Impacted

The more things change, the more they stay the same

As we enter week 10 of the COVID-19 pandemic, there are hopeful signs our nation is moving in the right direction. At the same time, there is significant need for another influx of emergency relief funding, particularly by state and local governments. The Democrat-controlled House of Representatives has responded in kind, passing the fourth emergency supplemental bill since the start of the pandemic. HR 6800, The Heroes Act, includes an additional $3 trillion in relief. Notably absent from the bill are provisions related to liability protections – a must-have for Senate Republicans. For certain, another battle is brewing between the two chambers, a battle made a tad more complicated by the fact that the House and Senate are trying to manage how to conduct business under the new normal of social distancing. With nothing settled on proxy and remote voting, schedules for regular fiscal year 2021 appropriations bills have also slipped. It is too early to know if this will mean another year of agencies operating under continuing resolutions but the prognosis for regular order and 12 bills signed into law by Oct. 1 is beginning to look a little sketchy. But there’s still hope – so stay tuned! Details on the Heroes Act, the fiscal year 2021 appropriations cycle, and remote voting can all be found below.

5.15.2020. COVID-19 Legislative Update

Legislation
Supplemental IV – The Heroes Act (HR 6800)
Timeline/Process/Politics: On Friday evening, the House passed the Heroes Act by a vote of 208-199, with 14 Democrats voting against and one Republican (Rep. Peter King) voting for the bill. Earlier today, Congressional Progressive Caucus Co-Chair Pramila Jayapal announced that she would be voting no but would not be whipping votes against the bill. The majority of Democratic votes against the bill came from moderate Democrats. However, nine members of the Congressional Progressive Caucus (including Jayapal) voted against the rule for the bill.

Leader McConnell has continued to assert that he does not see the need for moving forward with another relief package until CARES funding has been fully disbursed. However, Republican governors, local officials, and even the Chair of the Federal Reserve have urged Congress to pass a robust bill and move quickly with fiscal relief. With House passage of the bill, the ball is now in the Senate’s court, though it’s unclear how quickly it will move. After votes on the House bill, Leader Hoyer said the House will return for votes on May 27, adding pressure to finalize a deal before then.

Policy: House Democrats introduced the long-awaited Heroes Act earlier this week and voted on the bill this evening. Notably absent was any provisions regarding liability protections for businesses. Leader McConnell is moving forward with drafting liability protection language. All liability protection issues are now flowing through Sen. Cornyn’s office, as his staff has begun to draft language.

See text (as of 5/12/2020) here. Section by section here. One pager here. State and Local one pager here. NCAI’s summary on tribal provisions here.

Democrats made some changes to the bill through a manager’s amendment yesterday in Rules Committee. Manager’s amendment here. House Rules Committee report here. See below for a summary of the changes the manager’s amendment made.

  • Adds $39 million for rental assistance in rural areas.
  • Provides greater flexibility for certain Labor and Health and Human services funding items.
  • Adds a risk mitigation program within HHS.
  • Adds a non-discrimination provision for applicants for coronavirus relief legislation.
  • Prohibits the use of Paycheck Protection Program (PPP) funding to be used for lobbyists salaries.
  • Removes eligibility to PPP and Main Street Lending Facility for 501(c)4s that have engaged in election and campaign activities.
  • Expands the forgiveness safe harbor for PPP.
  • Allows use of PPP funds for and and forgiveness of expenses for PPE/other equipment necessary to protect the safety of employees.
  • Makes student debt cancellation provisions more targeted. Would provide $10,000 in student debt cancellation for “economically distressed borrowers”, defined as those who (as of March 12, 2020):
    • Had a monthly payment of $0 under income-based repayment;
    • Was in default;
    • Had a payment that was 90 days or more past due;
    • Payment was already suspended due to forbearance options already available like economic hardship, unemployment, or cancer treatment.
  • Reduces the additional amount for Railroad Unemployment Insurance Act benefits from $1 billion to $750 million, extends benefits for railroad workers to June 30, 2021.
  • Reduces the amount for grants to community financial institutions from $1 billion for $250 million.
  • Creates a wildlife-borne diseases epidemiology grant program through the Fish and Wildlife Service. Grants will go to States, Territories, Tribes, and DC.
  • Includes employers of domestic workers in the employee retention credit.
  • Alters treatment of DC to be treated as a county with regard to receiving local government relief funding.
  • Require the Director of National Science Foundation to conduct a study on the spread of COVID-19-related disinformation.
  • Requires every federal agency that funds or oversees scientific research to develop, adopt, and enforce a scientific integrity policy (Scientific 2 Integrity Act – Title XVI).

Passed Legislation
New Implementation Information and Guidance

  • 5/14 – Treasury issued a data request to disburse the second round of funding for tribes in the Coronavirus Relief Fund. The data request includes information on employees and expenditures. Portal will likely open sometime next week. More information here.
  • 5/15 – Treasury released the loan forgiveness application for businesses that have received loans under the Paycheck Protection Program. Application here.

Previously Reported Implementation Information and Guidance
Small Business Loans & Treasury Main Street Lending

  • 5/11 – SBA released updated PPP statistics, including recent state by state information here.
  • 5/8 – SBA’s Inspector General released a report on the implementation of the Paycheck Protection Program. The report found the Administration’s administration of the program did not align with the law in four ways: prioritization of underserved/rural markets, loan proceeds eligibility for forgiveness, guidance on loan deferment, and registration of loans. Report here.
  • 5/7 — The Washington Post reported that the SBA has imposed a new loan limit on the department’s Economic Injury Disaster Loans (EIDL), moving the loan limit from $2 million to $150,000. The department also announced that it would only be accepting applications from agricultural businesses onward.
  • 5/6 – Treasury released an updated FAQ for the Paycheck Protection Program. FAQ here.
  • 5/3 – Treasury and SBA released a data set for the most recent tranche of P3 funds. Data here.
  • 4/30 – The IRS issued guidance that most expenses funded by forgiven Paycheck Protection Program (PPP) loans are non-deductible for federal income tax purposes.
  • 4/30 – The Federal Reserve released the term sheets and other information relating to its expansion of scope and eligibility of the Main Street Lending Program. Term sheets and other information here. Other information on other facilities and programs here.
  • 4/29 – SBA announced that from 4:00-11:49pm on 4/29, SBA systems would only accept loans from lending institutions with asset sizes less than $1 billion dollars. The move was aimed at ensuring access to the PPP loan program for smaller lenders and their customers.
  • 4/28 – SBA announced it would no longer accept PPP loan applications submitted by robotic processing systems.
  • Treasury released an interim final rule for the Paycheck Protection Program on how lenders will calculate loan amounts for employers with seasonal employees. Rule here.
  • 4/24 – SBA issued a procedural guidance on participation sales here.
  • 4/24 – SBA released an interim final rule on requirements for Promissory Notes, Authorizations, Affiliation, and Eligibility. Interim Final Rule here. Additional eligibility criteria and requirements for certain loans here.
  • 4/24 – Data on Economic Injury Disaster Loans here, EIDL Advance here.
  • 4/23 – The Treasury Department asked all publicly traded companies that received funds under the program to return the funds within two weeks.
  • The Treasury Department released an interim final rule on the small business provisions in the bill. See here for a memo Cornerstone put together on the interim final rule.
  • Treasury FAQs on the Paycheck Protection Program
    • Top-line overview of the program here
    • Lender information here, Borrower information here, borrower application here

Individual and Business Tax Relief

  • IRS guidance on deferral of payroll taxes here
  • House Ways and Means factsheet on Economic Impact Rebate portal here
  • IRS’s FAQ page on individual economic relief here
  • Treasury Guidance on Employee Retention Tax Credit here
  • Treasury FAQ on Employee Retention Tax Credit here (updated 4/29)

Public Health Systems, Education, and Healthcare

  • 5/13 – HRSA announced the winners of $15 million in telehealth grants that were authorized through the CARES Act. Press release here. Awards here.
  • 5/1 – As part of the $100 billion dedicated to hospitals and health providers in CARES, HHS is distributing funding to “hotspot” hospitals and providers. HHS will be distributing $12 billion to 395 hospitals who provided inpatient care for 100 or more COVID-19 patients through April 10, 2020. $2 billion of the funding will be distributed based on low-income/uninsured data (Medicare and Medicaid disproportionate share and uncompensated care payments).
  • 4/27 – Outline of the Provider Relief Fund with additions from COVID 3.5 here.
  • 4/27 – Education Sec. Betsy DeVos announced that more than $300 million in discretionary grant funds will be available for states to use to create adaptable, innovative learning opportunities for K-12 and postsecondary learners in response to COVID-19. The grants will be funded through the Education Stabilization Fund (ESF), authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
  • 4/26 – CMS announced that it is reevaluating the amounts that will be paid under its Accelerated Payment Program (AAP) and suspending its Advance Payment Program to Part B suppliers effective immediately. Press release here.
    • The announcement came as a surprise to Democrats, who were actively negotiating with the department officials on modifying the program.
  • 4/23 – As part of negotiations on 3.5, the Administration made commitments on how the next $60 billion in the health relief fund will be distributed. HHS has committed that it will send out an additional $60 billion dollars in the coming weeks, much of it coming within the next 10 days.
  • 4/23 – As part of negotiations on 3.5, the Administration made commitments on changes to Medicare advance payment policies. The administration committed that, by the end of this week, Secretary Mnuchin and Chief of Staff Meadows will release a letter stating that they will:
    • Use their administrative authority to reduce the interest rate down from what is currently 10.25 percent to a rate that is more in line with a traditional federal interest rate.
    • Use their administrative authority to extend the repayment period beyond 12 months.
    • Work with Congress and support legislation in Corona 4 that will place the liability for these payments in Treasury’s General Revenue fund, rather than the Medicare Hospital Insurance and Supplemental Medical Insurance Trust Funds. The expansion of these programs must not adversely affect Medicare’s solvency or result in premium increases for seniors.
  • 4/22 – CARES Act Provider Relief Fund overview here. State by state breakdown of first payment here.
  • 4/9 – Secretary DeVos indicated that she would be moving to “immediately distribute” the $6 billion in CARES for emergency financial aid grants to college students. The grants can be used by college students for technology, course materials, food, housing, and healthcare. DeVos distributed the funding to colleges, which are meant to then distribute the aid among students. See here for the specific allocations for each college.

Economic Stabilization

  • 4/30 – Transportation Secretary Elaine Chao announced the FAA will begin awarding the AIP and other discretionary grants funding through the CARES Act. Press release here. Complete list of grants here. Map of airports receiving funding here.
  • 4/10 – Treasury Q&A on Loans to Air Carriers and Eligible Businesses and National Security Businesses here. Loan application here.
  • 3/30 – The Treasury Department released guidance on payroll support to airline industry employees, and on loans to the airline industry and businesses critical to national security. Guidance for payroll support here. Guidance on procedures and minimum requirements for loans here. Treasury press release here.

State, Local, and Tribal Government Funding

  • 5/14 – Treasury issued a data request to disburse the second round of funding for tribes in the Coronavirus Relief Fund. The data request includes information on employees and expenditures. Portal will likely open sometime next week. More information here.
  • 5/12 – Treasury released its list of payments to states and qualifying localities for the Coronavirus Relief Fund. List here.
  • 5/8 – Treasury still has a remaining $3.2 billion to distribute among tribes and plans plans to submit a new data request soon, with a portal open soon after. The next round of funding will be based on employment and expenditure data of Tribes and tribally-owned entities.
  • 5/5 – Treasury released distribution details regarding the tribal portion of the Coronavirus Release Fund. The first 60% of the fund will be distributed to tribes based on population used in the Indian Housing Block Grant (IHBG) and will include a floor of $100,000. The remaining 40% will be distributed based on the number of individuals employed by the Tribe, including employees of tribally owned entities. Treasury still needs to collect and verify employment data before distributing the second round of funding. Amounts for ANCs will not be distributed, as litigation is still pending. Press release here. Details here.
    • More than a dozen tribes have sued the Treasury Department over its guidance identifying Alaska Native Corporations (ANCs) as eligible entities for the fund. Last Wednesday, Secretary Mnuchin said that the department would not be releasing funding until Tuesday, April 28 – two days after the deadline outlined in the CARES Act. The court on Monday preliminarily enjoined Treasury from disbursing funds to ANCs.
  • 5/5 – Treasury released an updated FAQ regarding distribution of CARES Act state/local funds. FAQ here.
  • 4/27 – USDA announced that Kansas and Virginia have been approved to operate Pandemic Electronic Benefit Transfer (EBT), authorized by the Families First Coronavirus Response Act (FFCRA), which provides assistance to families of children eligible for free or reduced-price meals dealing with school closures.
  • 4/22 – Treasury issued guidance on the state/local/tribal governments fund here. The guidance further defines what expenses qualify as “necessary expenditures” and provides examples as well as examples of ineligible expenses.
  • 4/13 – Treasury launched its web portal for payments to state, local, and tribal governments. Treasury announced that eligible government entities must provide required information by Friday, April 17 to receive payment within the 30-day window allowed under CARES and those that miss that deadline may not receive funding. Submission page here. Some highlights from the announcement below:
    • Funds are only allowed to be used for expenses which
      • Are necessary expenses during the coronavirus emergency,
      • Were not accounted in the most recent budget (as of March 27, 2020), and
      • Were incurred between 3/1/2020 – 12/30/2020.
    • Eligible local governments are those below the state level (county, municipality etc.) with a population higher than 500,000. See here for data sources and the distribution methodology.  See here for a list of eligible local government units.
    • Amounts paid to governments will be based on population and the amounts allocated to states will be reduced by the total amount provided to local governments in the state.

Oversight

  • 5/7 – The remaining members of the House Select Committee on Coronavirus Crisis were named. Minority Whip Scalise’s priorities for the committee here. Full Committee membership below:
    • Chair Jim Clyburn (D-SC) – Chair
    • Maxine Waters (D-CA)
    • Carolyn Maloney (D-NY)
    • Nydia Velázquez (D-NY)
    • Bill Foster (D-IL)
    • Jamie Raskin (D-MD)
    • Andy Kim (D-NJ)
    • Steve Scalise (R-LA) – Ranking Member
    • Rep. Jim Jordan (R-OH)
    • Rep Blaine Luetkemeyer (R-MO)
    • Rep. Jackie Walorski (R-IN)
    • Rep. Mark Green (R-TN)
  • 4/29 – Speaker Pelosi announced the Democratic members of the House Select Committee on the Coronavirus Crisis, to be chaired by Majority Whip Jim Clyburn.

Supplemental 3.5 – Interim Emergency Coronavirus Relief, formally titled “Paycheck Protection Program and Health Care Enhancement Act” (HR 266)
The President signed the bill into law on April 24. Text here. Section by section here. Summary of hospital and testing provisions here. DPCC one pager here. Senate Democrats summary of health provisions. Overview of commitments regarding health funding and Medicare advance payments the Administration made as part of negotiations.

Supplemental III – Coronavirus Aid, Relief, and Economic Security (CARES) Act
After a unanimous vote by the Senate, the House passed the bill on March 27 and the President signed the bill into law shortly after. Final text here. Democratic summary here. Republican section by section here.

Supplemental II – Families First Coronavirus Response Act (HR 6201)
The Senate passed the House bill on March 18 and the President signed the bill into law that evening. Bill text here. Fact sheet here. Bill section by section here. A summary of paid leave provisions, incorporating changes made by technical correction, is here.

Supplemental I – Coronavirus Supplemental
Signed by the President March 6. Text here, summary here.

Congress
Session: The Senate returned last week and the House has planned votes on Friday. After the vote, Leader Hoyer said the House would return to vote on FISA legislation and possibly coronavirus-related legislation the week of May 27.

Hearings and Meetings: The Senate held the first in-person hearings last week, with limited attendance and required social distancing protocols.

Appropriations: While there is no specific markup schedule set, the House Appropriations Committee (HAC) still hopes to begin markups this month. The plan remains to move through COVID Phase 4 before turning to FY21. The bills are almost all of the way there and each subcommittee is due to give final briefs to the full committee front office this week, starting Wednesday. We still expect a rapid-fire markup process. The hope is that all 12 subcommittees can go through subcommittee markups over the course of a week – whenever the markups begin – with most of the full committee markups in the following week. Both majority and minority committee staff would like to rely minimally on remote procedures and are planning to do markups in larger than normal hearing rooms (Cannon Caucus Room or CVC theater) to accommodate proper social distancing. The expected order is the following: LHHS; AG; CJS; SFOPs; E&W; DOD; MilCon; FSGG; Interior; THUD; Homeland; and Leg Branch. HAC-D will be limited in marking up the classified portion of the bill, as staff cannot do so remotely and will need to complete it upon return to their offices.

The FY21 Senate Appropriations schedule has officially slipped. They are no longer saying bills will be marked up prior to July 4, and the timing is likely delayed a minimum of 3 weeks. Chairman Shelby late last week said he’d like to start marking up bills in June, but that the Homeland Security and VA/MILCON bills might not be marked up due to no agreement on 302b allocations. As for caps, Senate Republicans have reached an agreement among themselves to support exempting a Veterans Affairs health care program from budget caps. The agreement still needs sign off from the White House. This move could free up $11 billion for other non-defense discretionary spending priorities.

NDAA: HASC intends to schedule the markup once the House schedule is clear. Both HASC and SASC are looking to markup NDAA 2021 the week of June 8, with the goal to have a bill to floor before the 4th of July recess. Dates could slip depending on availability of floor time. No SASC hearings are expected until after NDAA markup. HASC finished drafting the Chairman’s Mark two weeks ago and SASC finished drafting last week. Both are reviewing the draft and will be making final tweaks over next two weeks.

Remote voting/virtual protocols: This evening, the House passed the McGovern-Lofgren resolution (H.Res 965) to allow proxy voting and remote hearings and markups. The House passed the bill by a party line vote (217-189). House Republicans have not been enthusiastic about the prospect of remote markups and Floor action.

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Cornerstone Government Affairs, a bipartisan consulting firm founded in 2002, includes a formidable team of homeland security and national security experts. Cornerstone’s Homeland Security Practice Group includes GTSC Senior Advisor Michelle Mrdeza, former DHS and DoD official Connie LaRossa, former House Committee on Homeland Security professional staff Charles Carithers, former House Permanent Select Committee on Intelligence minority staff director Heather Molino, and former House Committee on Appropriations staff director Will Smith.

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