State and Federal Legislative Update: March 26, 2020 Part II

State Legislative Update

The Minnesota House and Senate met today to take up HF 4531, a bill that addresses the COVID-19 crisis. Lawmakers in both bodies followed CDC safety recommendations, and many members were sitting in the balcony, alcoves or hallway. The House passed the bill by a vote of 99-4, followed by the Senate passage at 5:25 this afternoon by a vote of 67-0.

Article 1 of the bill establishes a temporary $200 million COVID-19 Minnesota fund and appropriates additional money to issue drivers’ license and identification cards, award child care grants, provide financial assistance to military veterans or their surviving spouses, distribute additional funding to food banks and food shelves, increase housing support payment rates, and provide services and shelter to the homeless.

Article 2 modifies various state programs, including those that authorize disaster recovery loans to farmers, prescribe fees for drug manufacturers and wholesalers, limit drug prescriptions, prescribe allowable evidence of residency for drivers’ licenses, concern the provision of health care to incarcerated individuals placed on conditional medical release, authorize placement of certain persons in county jails or detention centers, concern industries and professions regulated by the Department of Commerce, apply to work study and other higher education assistance programs, establish state procurement requirements, determine the distribution of food shelf support, concern property taxes payable in 2020, establish pesticide applicator license requirements, and concern eligibility for unemployment assistance.

In regards to higher education, the bill addresses the State Grant program, loans and work study requirements in Article 2. Specifically, the bill aligns State and Federal Work Study guidelines to allow payments of State Work Study funds to students during declared disasters or a Peacetime Declaration/State of Emergency, in alignment with the federal program rules.

The bill also temporarily suspends SELF Loans to be able to provide flexibility to administer the loan program to meet the needs of students, borrowers and cosigners; and the bill also includes language that covers the State Grant, Teacher Candidate Grants, Grants for Students with Intellectual and Developmental Disabilities, Childcare Grants, MN Reconnect, Safety Officers Grant, and Indian Scholarships, and will hold students harmless in the case of falling below a certain enrollment level. The Minnesota Office of Higher Education will be provided flexibility for schools that are working to help students complete the term in which they are currently enrolled.

The specific language related to higher education and the above provisions can be found in Article 2, Section 13, starting on line 23.8 of the bill as well as below:

Sec. 13. OFFICE OF HIGHER EDUCATION.

Subdivision 1. Applicability. The powers granted in this section apply beginning on

the date a peacetime public health emergency is declared by the governor pursuant to

Minnesota Statutes, section 12.31, in response to a potential or actual outbreak of COVID-19. The powers expire 60 days after the declaration of the peacetime public health emergency expires. For purposes of this section, “peacetime public health emergency” means any peacetime emergency declared by the governor in an executive order that relates to the infectious disease known as COVID-19.

Subd. 2. Temporary powers granted; limitations. The commissioner of the Office of

Higher Education is granted temporary powers described and limited by this section to

protect the financial stability and academic standing of students, grantees, and borrowers. The temporary powers granted to the commissioner in this section may only be used to:

(1) prepare for, prevent, or respond to an outbreak of COVID-19; or

(2) preserve access to programs and services provided by the Office of Higher Education.

Subd. 3. Authority to modify or waive rules. The commissioner may modify or waive

statutory requirements or administrative rules relating to:

(1) work study programs under Minnesota Statutes, sections 136A.231 to 136A.233,

and accompanying rules under Minnesota Rules, chapter 4830;

(2) the SELF loan and other lending programs under Minnesota Statutes, sections 136A.15 to 136A.1787, and accompanying rules under Minnesota Rules, chapter 4850;

(3) the state grant program under Minnesota Statutes, section 136A.121, and

accompanying rules under Minnesota Rules, chapter 4830; or

(4) student grants, aid, and scholarships under Minnesota Statutes, sections 136A.1215 to 136A.1275, and accompanying rules under Minnesota Rules, chapter 4830.

Subd. 4. Fiscal impact. If action taken by the commissioner under this section will result in a fiscal impact that the Office of Higher Education cannot absorb, the commissioner shall first seek and receive legislative approval for any fiscal impact to the state.

Subd. 5. Consultation. The commissioner shall consult with the chairs and ranking

minority members of the legislative committees with jurisdiction over higher education

issues, when possible, before exercising the temporary powers granted under this section.

Subd. 6. Report. Within 90 days of the expiration of the declaration of the peacetime

public health emergency, the commissioner shall submit a report to the members of the

legislative committees with jurisdiction over higher education issues regarding the temporary powers that were exercised under this section, including but not limited to any statutes or administrative rules that were modified or waived. The report must also include a timeline as to when temporary powers were exercised and an explanation as to why the exercise of temporary powers was necessary.

EFFECTIVE DATE. This section is effective retroactively for any emergency declaration covered by this section. Except as necessary to comply with the reporting requirements in subdivision 6, this section expires the later of December 31, 2020, or 60 days after the end of a peacetime public health emergency declared before December 31, 2020. 

After House members passed the bill, House Majority Leader Ryan Winkler, DFL-Golden Valley, said the House has a long body of work ahead of them and they are working to create opportunities for the public to engage in the working group process they created. The House is encouraging the public to reach out to members by phone or email. House legislative activity during this time can be found on the COVID 19 House web page.

The House and Senate are both adjourned until April 14, 2020 or otherwise determined.

Federal Legislative Update

As reported this morning in today’s first Legislative Update, late last night the U.S. Senate passed the $2 trillion COVID 19 relief package titled the CARES Act (Coronavirus Aid, Relief and Economic Security). The bill provides additional funds to America’s health systems, a number of financial tools to private businesses, as well as direct financial assistance to most Americans. The House is expected to approve the bill tomorrow (Friday, March 27, 2020).

Below is a summary of the two major portions of the bill: Division A, which largely deals with the health care system and economic stabilization efforts; and Division B, which provides $340 billion in emergency appropriations to government agencies.

As a reminder, below is how the funding breaks down for higher education:

Education Stabilization Fund: $30,750,000,000

2% to Secretary to Bureau of Indian Education: $615,000,000

Total: $30,135,000,000

Education Distribution: $30,135,000,000

9.8% to Governor’s Emergency Education Relief Fund: $2,953,230,000

43.9% to K-12 Education: $13,229,265,000

46.3% to Higher Education: $13,952,505,000

Higher Education Allocation: $13,952,505,000

90% to all Qualifying Institutions

(with a 75% based on Pell FTE and 25% on non-Pell FTE): $12,557,254,500

At least 50% to students: $6,278,627,250

Maximum funds for Institutions: $6,278,627,250

10% to Minority Serving Institutions and Title VII: $1,395,250,500

7.5% to Minority Serving Institutions: $1,046,437,875

2.5% to Title VII FIPSE: $348,812,625

DIVISION A

Small Business Provisions

Increases the government guarantee of loans made for the Payment Protection Program to 100 percent through December 31, 2020.

Specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments.

Authorizes Small Business Administration to provide additional financial awards to resource partners (Small Business Development Centers and Women’s Business Centers) to provide counseling, training, and education on SBA resources and business resiliency to small business owners affected by COVID-19.

This section appropriates funds for the following uses:

  • $349 billion for loan guarantees
  • $675 million for Small Business Administration salaries and expenses
  • $25 million for the Office of Inspector General
  • $240 million for small business development centers and women’s business centers for technical assistance for businesses
  • $25 million for resource partner associations to provide online information and training
  • $10 million for minority business centers for technical assistance 
  • $10 billion for emergency EIDL grants
  • $17 billion for loan subsidies
  • $25 million for Department of Treasury salaries and expenses
  • $100 billion for secondary market guarantee sales.

Assistance to American Families

Creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, those with limited work history, and others) who are unable to work as a direct result of the Coronavirus public health emergency.

Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.

All U.S. residents with adjusted gross income up to $75,000 ($150,000 for married couples) are eligible for the full $1,200 ($2,400 if married) rebate. In addition, they are eligible for an additional $500 per child. This will be done using 2019 tax returns if already filed; otherwise, 2018 tax returns will be used. 

Provides a refundable Employee Retention payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis.

Addressing Medical Supply Shortages

Clarifies that the Strategic National Stockpile can stockpile medical supplies, such as the swabs necessary for diagnostic testing for COVID-19.

Requires the Food and Drug Administration (FDA) to prioritize and expedite the review of drug applications and inspections to prevent or mitigate a drug shortage.

Clarifies that all testing for COVID-19 is to be covered by private insurance plans without cost sharing, including those tests without an EUA by the FDA. For COVID-19 testing covered with no cost to patients, requires an insurer to pay either the rate specified in a contract between the provider and the insurer, or, if there is no contract, a cash price posted by the provider.

Allows the Biomedical Advanced Research and Development Authority (BARDA) to more easily partner with private sector on research and development, which includes helping to scale up manufacturing as appropriate, by removing the cap on other transaction authority (OTA) during a public health emergency.

Education

Waives the institutional matching requirement for campus-based aid programs. Allows institutions to transfer unused work-study funds to be used for supplemental grants.

Allows institutions to issue work-study payments to students who are unable to work due to work-place closures as a lump sum or in payments similar to paychecks.

Exclusion from Federal Pell Grant Duration Limit for students who dropped out of school as a result of COVID -19.

Requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans.

Provides local workforce boards with additional flexibility to use funds received under the Workforce Innovation and Opportunity Act for administrative costs, including for online resources.

Labor

Provides that applications for unemployment compensation and assistance with the application process, to the extent practicable, be accessible in two ways: in person, by phone, or online.

Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer.

Amends Section 518 of ERISA to provide the Department of Labor the ability to postpone certain ERISA filing deadlines for a period of up to one year in the case of a public health emergency.

Provides single employer pension plan companies with more time to meet their funding obligations by delaying the due date for any contribution otherwise due during 2020 until January 1, 2021.

Medicare, Medicaid, and Public Health

Extends the Medicaid Money Follows the Person demonstration that helps patients transition from the nursing home to the home setting through November 30, 2020.

Delays scheduled reductions in Medicaid disproportionate share hospital payments through November 30, 2020.

Extends the Medicaid Community Mental Health Services demonstration that provides coordinated care to patients with mental health and substance use disorders, through November 30, 2020.

Extends mandatory funding for community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education Program at current levels through November 30, 2020.

Extends mandatory funding for the Special Diabetes Program for Type I Diabetes and the Special Diabetes Program for Indians at current levels through November 30, 2020.

Provides $1.32 billion in supplemental funding to community health centers on the front lines of testing and treating patients for COVID-19.

Economic Stabilization

Provides $500 billion to Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees, and other investments, distributed as follows:

  • $25 billion for passenger air carriers
  • $4 billion for cargo air carriers
  • $17 billion for businesses important to maintaining national security
  • $454 billion for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities

Waives for a two-year period the requirement for a separate act of Congress to authorize certain projects exceeding $50 million and the requirement that any amounts unused in the Defense Production Act Fund at the end of the fiscal year that exceed $750 million be swept and returned to the Treasury’s General Fund.

Prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020. Provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency.

For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to evict the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is federally assisted.

Coronavirus Relief Fund

Provides $150 billion to States, Territories, and Tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.

Within a state, only “units of local governments” with populations that exceed 500,000 are eligible to receive direct funding from the federal government as a portion of the state’s allocation.

DIVISION B – EMERGENCY APPROPRIATIONS

Agriculture

Provides $9.5 billion in emergency COVID-19 response funding to support agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers.

Provides $8.8 billion for Child Nutrition Programs and $15.5 billion for SNAP to cover new waiver authorities and anticipated increases in participation as a result of coronavirus.

Provides $450 million in additional funding for the Emergency Food Assistance Program for commodities and distribution of emergency food assistance through community partners, including food banks.

Homeland Security

$178 million for necessary personal protection equipment for Department personnel including gloves, garments, goggles, hand sanitizer, respirators, and surgical masks for six months.

$100 million for increased cleaning and sanitization at TSA operations at airports and other facilities, overtime and travel costs required to maintain operations while infected employees are quarantined, and additional explosive detection materials that must be disposed of after a single use to prevent the spread of coronavirus.

$45.4 billion to FEMA, including $45 billion to continue FEMA’s entire suite of response and recovery activities and reimbursements provided to states and localities nationwide by the Disaster Relief Fund for emergency and major disaster declarations, as well as funding for FEMA facilities and information technology required to support FEMA’s lead role in coordinating federal response activities.

The bill also includes $400 million for FEMA grants that can be disbursed in a timely manner for firefighters, emergency managers, and providers of emergency food and shelter.

Public Health and Social Services Emergency Fund

Reimbursement to Hospitals & Healthcare Providers: $100 billion to ensure healthcare providers continue to receive the support they need for COVID-19 related expenses and lost revenue.

Strategic National Stockpile: $16 billion to procure personal protective equipment, ventilators, and other medical supplies for federal and state response efforts.

Vaccine, Therapeutics, Diagnostics, and other Medical or Preparedness Needs: $11 billion, including at least $3.5 billion to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery to the American people.

Hospital Preparedness: Not less than $250 million to improve the capacity of healthcare facilities to respond to medical events.

Health Resources and Services Administration: $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program. Language is also included to allow Community Health Centers to use FY2020 funding to maintain or increase staffing and capacity to address the coronavirus.

Centers for Disease Control and Prevention

State and Local Preparedness Grants: $1.5 billion in designated funding for state and local preparedness and response activities.

Global Health Security: $500 million to continue CDC’s global health efforts that are critical to the health and security of the United States.

Public Health Data Surveillance and Infrastructure Modernization: $500 million to invest in better COVID19 tools and build state and local public health data infrastructure.

Infectious Disease Fund: $300 million to give HHS flexibility to respond to pandemic threats.

Other Health and Human Services Agencies

$945.5 million for the National Institutes of Health for vaccine, therapeutic, and diagnostic research to increase our understanding of COVID-19, including underlying risks to cardiovascular and pulmonary conditions.

$425 million for the Substance Abuse and Mental Health Services Administration to address mental health and substance use disorders as a result of the coronavirus pandemic, including $250 million for Community Behavioral Health Clinics, $50 million for suicide prevention, and $100 million for SAMHSA Emergency Response Grants.

$200 million for the Centers for Medicare and Medicaid Services, including $100 million to support additional infection control surveys for facilities with populations vulnerable to severe illness from coronavirus.

Education

Elementary and Secondary Education: $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, support distance education, and make up for lost learning time.

Higher Education: $14.25 billion in funding to institutions of higher education to directly support students facing urgent needs related to coronavirus, and to support institutions as they cope with the immediate effects of coronavirus and school closures. This provides targeted formula funding to institutions of higher education, as well as funding for minority serving institutions and HBCUs.

State Flexibility Funding: $3 billion in flexible formula funding to be allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education.

Transportation

Federal Aviation Administration, Airport Improvement Program (AIP) – $10 billion to maintain operations at our nation’s airports that are facing a record drop in passengers. AIP funds will be distributed by formula.

Essential Air Service (EAS) – $56 million provided to maintain existing air service to rural communities. This funding is necessary to offset the reduction in overflight fees that help pay for the EAS program.

Federal Highway Administration – Language to clarify that states can issue special permits for overweight vehicles and loads to allow for the free flow of critical relief supplies during the current coronavirus epidemic for the duration of the fiscal year.

Federal Transit Administration (FTA), Transit Infrastructure Grants – $25 billion for transit providers, including states and local governments across the country, for operating and capital expenses. Funding will be distributed using existing FTA formulas.

Housing and Urban Development

Community Development Block Grant (CDBG) – $5 billion. CDBG is a flexible program that provides communities and states with funding to provide a wide range of resources to address COVID-19, such as services for senior citizens, the homeless, and public health services. Funding will be distributed using formula.

Homeless Assistance Grants – $4 billion. These funds will enable state and local governments to address coronavirus among the homeless population. These grants, in combination with additional waiver authority, will provide effective, targeted assistance to contain the spread of coronavirus among homeless individuals. These grants will also provide state and local governments with homelessness prevention funding for individuals and families who would otherwise become homeless due to coronavirus.

Tenant-Based Rental Assistance – $1.25 billion. These funds will preserve Section 8 voucher rental assistance for seniors, the disabled, and low-income working families, who will experience loss of income from the coronavirus.

Public Housing Operating Fund – $685 million. These funds will provide Public Housing Agencies with additional operating assistance to make up for reduced tenant rent payments, as well as to help contain the spread of coronavirus in public housing properties.

Section 202 Housing for the Elderly – $50 million. These funds will maintain housing stability and services for low-income seniors. Seniors are particularly at risk from the coronavirus.

Section 811 Housing for Persons with Disabilities – $15 million. This additional funding will make up for reduced tenant payments as a result of coronavirus.

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