State and Federal Legislative Update: March 20, 2020

State Legislative Update

Minnesota House and Senate legislative activity

Minnesota Senate Republican leadership announced yesterday that they intend for the Senate to come back into session and pass legislation to respond to the COVID-19 pandemic. Additionally, Senate Republicans are questioning the constitutionality of at least one of the executive orders the governor has issued.

Senate Majority Leader Paul Gazelka, R-Nisswa, released the following statement outlining his caucus’s plans:

“We are in extraordinary times with difficult decisions about how to operate the Senate in light of the COVID-19 virus. There are real risks related to the virus, and real risks to our economy as a result of how we’re handling the virus. Senate Republicans are ready to come back into session and pass important and timely legislation to respond to the COVID-19 virus. We are trying to figure out how to operate within our constitutionally mandated responsibilities, and as much as possible, protect the health of our members and staff.

While we understand the necessity of Governor Walz to lead in this time of crisis, that leadership should not be unilateral and unchecked. For example, the Governor’s action to unilaterally change Minnesota statutes regarding unemployment insurance does not appear to pass constitutional standards. Senate Republicans would prefer to work with the Governor within the legislative process where we can facilitate testimony, oversight and ultimately approval of his actions. 

To that end, we intend to begin holding limited committee hearings in the Senate. We are working with healthcare experts on strict guidelines regarding how we gather, how we protect members and staff and how we allow for public testimony. Senate Republicans want Minnesotans to know we are here and ready to do our jobs.”

Members of the Minnesota House are temporarily working from outside the Minnesota State Capitol, engaging in telework. House Majority Leader Ryan Winkler, DFL-Golden Valley, said in a statement: “While we follow the guidelines from the Minnesota Department of Health to keep people safe, we are convening informal working groups to discuss emergency measures related to COVID-19 and to the mission-critical work of the Legislature this session. We are working to develop opportunities for members of the public to weigh in and offer their feedback in a way that is protective of their health.”

According to the Minnesota DFL statement, representatives are working on measures that include:

• ensuring hourly workers and contract workers at schools get paid
• ensuring workers get paid time off for COVID-19-related illness or business closure
• licensing extensions and flexibility for businesses
• preventing evictions and foreclosures during the pandemic
• forgiveness for expired driver’s licenses
• giving the human services commissioner authority to keep long-term care and disability services running
• child care provider support
• local jobs and projects bill
• abatement of penalties for late income and property tax filings

As a reminder, the Legislature recently passed, and Governor Walz signed into law, funding for emergency health care preparedness and response:

• Initial $21 million for the Public Health Response Contingency Account
• Additional $50 million for the Public Health Response Contingency Account
• $150 million in grant funding for our health care providers for costs related to planning, preparing, and responding to the COVID-19 outbreak

Walz orders health care providers to postpone elective surgeries and procedures

Yesterday,Governor Tim Walz signed Executive Order 20-09, ordering health care providers to postpone elective surgeries and procedures, including non-emergent elective dental procedures, to focus health care capacity and equipment on responding to COVID-19 cases and other emergencies.

This order complies with guidance issued on March 17, 2020, from the Centers on Disease Control and Prevention (CDC), as well as similar guidance from the Centers for Medicare and Medicaid Services issued on March 18, 2020, to delay elective surgeries and procedures, both to conserve health care resources and to reduce contact between patients and providers.

Elective surgeries and procedure must be postponed indefinitely beginning at 5:00 pm on March 23. The executive order clarifies that a non-essential surgery or procedure is defined as a surgery or procedure that can be delayed without undue risk to the current or future health of a patient. Surgeries and procedures that prevent loss of life, permanent dysfunction of an organ or extremity, or risk of metastasis or progression of staging for non-COVID-19 patients should not be postponed under this order.

Senate Health and Human Services Finance and Policy Committee Chair Michelle Benson, R-Ham Lake, issued a statement agreeing with the governor’s decision. “I know the Executive Order today will impact hospital services not related to COVID, but it is necessary to make staff and supplies available to keep our health care system stable if predictions about the COVID spread are accurate. The health care workers, hospital staff, and administrators deserve our gratitude and utmost appreciation for the tireless service and care,” Senator Benson said.

Below are previous actions taken by Governor Walz:

March 18: The Governor took action to support businesses affected by COVID-19 by announcing a 30-day Sales and Use Tax grace period for businesses identified in Executive Order 20-04.

March 18: Executive Order 20-08 clarifying the types of businesses and places of public accommodation subject to closure per Executive Order 20-04. The executive order clarifies that the closure order applies to salons, barbershops, and other similar establishments.

March 17: Executive Order 20-07 providing paid leave for state employees who are not able to work for reasons related to COVID-19 and suspended the waiting period for insurance coverage for new employees.

March 17: Executive Order 20-06 to exempt vehicles and drivers providing direct assistance for emergency relief efforts in response to COVID-19 from certain regulations including provisions on weight and hours of service.

March 17: Governor Walz signed Ch. 70 S.F. 4334 into law, allocating $200 million toward an emergency and long-term grant program to respond to the needs of health care and long-term care facilities during the COVID-19 pandemic.

March 16: Executive Order 20-05 to strengthen Minnesota’s Unemployment Insurance Trust Fund and ensure that workers who are not able to work as a result of COVID-19 have benefits available. Specifically, this Executive Order waives the employer surcharge and allows the Minnesota Department of Employment and Economic Development to pay unemployment benefits immediately, providing fast relief to employees who need it.

March 16: Executive Order 20-04 to order the temporary closure of Minnesota restaurants and bars to dine-in customers. He also ordered the temporary closure of other places of public accommodation and amusement, including theaters, museums, fitness centers, and community clubs.

March 16: Executive Order 20-03 to prevent the spread of COVID-19 in Minnesota’s Veterans Homes. This executive order allows Veterans Homes to protect residents and staff by temporarily restricting visitors, reducing the risk of COVID-19 spread among residents.

March 15: Executive Order 20-02 authorizing the temporary closure of Minnesota K-12 public schools to students in order for school administrators and teachers to make long-term plans for the continuity of education and essential services during the COVID-19 pandemic.

March 13: Executive Order 20-01 declaring a peacetime emergency in Minnesota and unveiled legislative proposals to prepare for the COVID-19 pandemic.

Federal Legislative Update

Federal COVID-19 Response: Federal Family Medical Leave expansion; paid sick leave

President Trump signed into law expanded protection under the Family Medical Leave Act as well as paid sick leave related to the COVID-19 pandemic (Phase II). Below is a summary of these laws, which take effect no later than April 1.

Emergency Paid Family and Medical Leave Expansion

• Employers with fewer than 500 employees must provide 12 weeks of Family and Medical Leave Act (FMLA) leave for all employees who have been employed for 30 days for a “qualifying need related to a public health emergency.”
• A “qualifying need” means the employee is unable to work (or telework) due to a need for leave to care for a child whose school or place of care has been closed or childcare provider is unavailable due to a public health emergency.
• The first 10 days may be unpaid. Employees may use accrued leave (vacation, sick, PTO) during the 10 days but cannot be required to do so.
• After 10 days, employers must continue paid FMLA leave at a rate of no less than 2/3 of the employee’s regular rate of pay with a cap of $200 per day and $10,000 total.
• Employers of an employee who is a health care provider or emergency responder may elect to exclude such employees from this leave entitlement.
• The Secretary of Labor may issue regulations to exempt small businesses with fewer than 50 employees where the imposition of these requirements would threaten the viability of the business.

Emergency Paid Sick Leave

• Employers with fewer than 500 employees are required to provide full-time employees 2 weeks (80 hours) of paid sick leave for circumstances related to COVID-19, including self-quarantine (subject to a federal, state, or local quarantine or isolation order, or per the advice of a health care provider); obtaining a medical diagnosis or care for COVID-19; providing care for a family member who has been diagnosed or is in quarantine; or caring for a child whose school or day care has closed due to coronavirus.
• “Full pay” compensation up to 80 hours is capped at $511 per day per employee and $5,110 in the aggregate for personal sick leave and $200 per day and $2,000 in the aggregate.
• Part-time employees receive paid sick time for the number of hours equal to the average number of hours they work over a 2-week period.
• Employees shall be paid at their normal rate, except that they are paid at 2/3 their regular rate for providing caregiving to a family member or to care for a child whose school has closed or childcare provider is unavailable due to COVID-19.
• Employers with similar existing paid leave policies are required to provide workers with the emergency paid sick time. An employer cannot require a worker to use any other available paid leave before using the sick time
• The bill does not preempt existing state or local paid sick leave entitlements.
• Emergency paid leave does not carry over and expires on December 31, 2020.
• Employers who are health care providers or emergency responders are not required to comply.
• Government employers and union workers who are part of a ‘multi-employer’ agreement.
• An employer may not require employees to find a replacement employee to cover the hours during which the employee is using paid sick time, and my not discriminate against employees who take leave under this act.
• Paid sick time if available immediately, regardless of how long the employee has been employed.
• Employers are required to post a notice prepared or approved by the Secretary of Labor, which will be publicly available within 7 days of enactment of this Act.

IRS delays tax-filing date to July 15, matching payment deadline

Tax forms and payments will not be due to the Internal Revenue Service until July 15 this year, Treasury Secretary Steven Mnuchin said this morning. “We are moving Tax Day from April 15 to July 15,” Mnuchin said. “All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

The announcement follows an earlier decision to move the payment deadline, but not the filing deadline, to July 15 in response to the coronavirus pandemic. Tax professionals and lawmakers of both parties have said it could confuse taxpayers to have forms and payments due on separate days. The change gives individuals and corporations an additional three months to file before they would owe interest and penalties for filing late.

Secretary Mnuchin is encouraging taxpayers who are due a refund to go ahead and file despite the delay so they can get their checks more quickly. The IRS recommends filing electronically and opting for direct deposit to get the money within about three weeks.

GOP unveils $1.5 trillion Phase III Coronavirus Package

Senate Republican leaders released their Phase III bill to give hospitals and community health centers billions of dollars to help them fight the coronavirus as part of a massive economic stimulus. The $1.5 trillion package would give community health centers an added $1.32 billion and would lift Medicare “sequestration” payment cuts this year, among other measures. Those sequestration cuts in payments to hospitals and doctors would slash more than $15 billion from Medicare payments, just in fiscal year 2020.

The measure also proposes that Medicare offers hospitals an added payment for caring for coronavirus patients that amounts to a 15 percent bonus, and would allow for increasing telehealth services for Medicare patients at certain health centers and rural clinics during the outbreak. It would also waive a requirement for face-to-face visits between dialysis patients and doctors and would bolster some Medicare home-care services.

The centerpiece of the stimulus package is tax rebates to individuals of $1,200 and $2,400 for married couples. Rebates are completely phased-out for all taxpayers with incomes exceeding $99,000 for individuals or $198,000 for a couple. It also provides $208 billion worth of loans for businesses that are struggling due to the outbreak, including $58 billion for the airline sector, and $150 billion for various distressed areas of the economy.

Senate Majority Leader Mitch McConnell said he would immediately engage in negotiations with Democrats, whose votes will be needed in both the Senate and House to pass the legislation and get it to President Trump for his signature. “These are urgent discussions,” McConnell said. “The Senate is not going anywhere until we take action.”

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement that they would demand that any compromise legislation put its emphasis on workers and small businesses. On Thursday night they said, “We are beginning to review Senator McConnell’s proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers.”

Labor Department working on rules for virus-related paid leave

The Labor Department is planning to issue regulations to implement emergency paid sick and family leave requirements under the newly enacted coronavirus relief package. Cheryl Stanton, who heads the Department’s Wage and Hour Division, emailed staffers Thursday with a synopsis of the agency’s plans to carry out the law. The Families First Coronavirus Response Act provides some workers impacted by the virus with two weeks of paid sick leave and 10 weeks of partially paid family leave to care for a child.

Stanton said the department “intends to issue regulations” that will be ready “by the implementation date” of the new law, but stopped short of providing a precise deadline for when the rules would be completed or when they would take effect. The legislation’s new paid leave requirements will apply “from the effective date through December 31, 2020.”

The relief package, Phase II of Congress’ coronavirus response, is slated to take effect April 2. The Labor Department is likely to rely on an emergency exception to scuttle the traditional notice-and-comment period often required before regulations are finalized. It can, under certain circumstances, issue a direct final rule with subsequent public notice-and-comment.

Minnesota State communication to Congressional Delegation

Minnesota State has been communicating with members of the Minnesota Congressional Delegation regarding impacts of COVID-19. Today’s letter can be found below:

Dear Minnesota Congressional Delegation:

I want to begin by thanking you and your staff for your tireless work during this unprecedented time. As you continue your work on behalf of all Minnesotans, I want to bring to your attention the needs of our campuses to support our 350,000 students as campus leaders deal with COVID-19. It is vital that any financial relief legislation takes into account the impact on our colleges and universities.

Needless to say, the impact on our campus community has been profound. While moving as quickly as possible to create alternative academic delivery methods has been a necessary step in slowing the spread of the virus among students, faculty and staff, these shifts have caused massive disruption to students, institutional operations, and institutional finances. I have outlined several needs and their additional financial strains to our campuses.

The Minnesota State Colleges and Universities system, as of March 18, 2020, has made the following preliminary calculations for financial relief needs for the current academic year.

Emergency aid to students and support for institutions

Student Safety in Dorms: $17 million

Returning students’ room and board fees on a pro-rated basis so they can disburse to safer living conditions. This is to support the social distancing of as many students as possible. Schools have insufficient fund balances to absorb all these refunds while still maintain debt service needs.

Immediate Campus Safety: $530,000

Cleaning cost for dorms and other facilities that still need to be used. This is to enable students, faculty and staff that need to be on campus to work in a safe environment.

Student Support Services $3.2 million

Continuation of key support activities that students are not able to replace on their own; adding online support services. This is to provide needed assistance for students who are unable to leave campus or need continuation for other reasons. The most common needs projected are additional academic advising and personal counseling. We are also anticipating additional costs for having a small number of students will be place bound to our campuses because they unable to return to a permanent home.

Technology Implementation

Telecommuting Support costs: $5.3 million

Licenses and other costs to enable distance work for faculty and other staff. This is to provide necessary continuation of operations to complete core activities for the remainder of the semester.

Additional important initiatives include access to low-cost capital and temporary flexibility from many statutory and regulatory requirements. We, like most of the country, are dealing with a set of unknowns: the potential financial implications for our campuses both in the short and the long-term; and the possible effects this crisis will have on retention and enrollment. We urge you to ensure our campuses have the resources they need to work through this crisis and emerge in a way that enables them to continue their work producing the talent that Minnesota employers need. We continue to be in regular communication with our faculty, staff and students as this situation is changing quickly.

Sincerely,

Devinder Malhotra Chancellor