State and Federal Legislative Update: April 22, 2020

State Legislative Update

Senate Finance Committee passes bill creating COVID-19 relief account

Yesterday Senate Finance committee members passed SF 4486, a bill sponsored by Sen. Julie Rosen, R-Vernon Center, which would create a state COVID-19 relief account for the $2.17 billion funds Minnesota receives through the federal CARES Act. Senate Majority Leader Paul Gazelka, R-Nisswa, said on the Senate floor Monday that this is a priority for the Senate Republican caucus before session ends May 18. Gazelka said he thinks the Senate and House should have oversight over the federal funding so the governor doesn’t decide how to spend unilaterally.

Committee members also heard from Minnesota Management and Budget (MMB) officials regarding a May budget projection so that lawmakers can make any necessary budget decisions prior to the end of session. MMB said the updated budget projection will include new projections of income, sales, and corporate taxes, as well as any incomes sensitive to the pandemic. MMB said that the projection will also focus on large expenditures and other economic variables, but that the level of uncertainty with this budget projection is much higher than usual, as the U.S. economic outlook is highly volatile and data is unclear or delayed. Commissioner Myron Frans said that the May budget projection will be the first step in an ongoing process to assess and solve the economic damage that the pandemic has caused.

**Please note the below schedule. The contract ratification bill will be discussed in the House State Government Finance Committee Thursday at 8:00 a.m.; and on Tuesday, April 28, Minnesota State will provide an update on COVID-19 impact to both the House and Senate higher education committees.**

Federal Legislative Update

Senate passes additional COVID-19 interim emergency legislation

On Tuesday evening, the U.S. Senate passed the Paycheck Protection Program and Health Care Enhancement Act. This bipartisan interim emergency legislation comes as a result of the Paycheck Protection Program (PPP), created under the CARES Act, running out of funds last week. The House of Representatives is expected to pass the bill tomorrow.

The bill includes $484 billion in new pandemic relief funds to bolster the PPP, pay for additional coronavirus testing, and help hospitals. The bill does not include additional funding for states and local governments, however, Congress is working on a “Stimulus 4 Package” which is expected to include these funds as agreed upon by Democrats and the Administration during the negotiations on this bill.

A summary of the bill can be found below:

Paycheck Protection Program

The third coronavirus response package, the CARES Act, provided $349 billion for the Paycheck Protection Program, which offers low-interest loans guaranteed by the Small Business Administration (SBA). Loans can be forgiven for borrowers that pay eligible payroll expenses or rehire workers over eight weeks.

The newest legislation increases the amount available to businesses by $310 billion, bringing the combined total to $659 billion.

Disaster Loans

The CARES Act provided $10 billion to expand the SBA’s Economic Injury Disaster Loan (EIDL) program to cover businesses, cooperatives, employee stock ownership plans, and tribal businesses with 500 or fewer employees, as well as sole proprietors and independent contractors. This bill would provide another $10 billion to replenish the disaster loan program. It would also provide $50 billion for additional SBA guarantees under its broader disaster loan program.

Hospital Funding

The bill would provide $75 billion for health-care providers through the Public Health and Social Services Emergency Fund. The money could be used to reimburse providers for coronavirus-related expenses and lost revenue. Funds would be distributed under the same terms as the CARES Act, which provided $100 billion for those purposes.

Virus Testing

The bill would provide $25 billion for COVID-19 testing, including for active infections and previous exposure, through the Public Health and Social Services Emergency Fund. The funding would include $11 billion for states, localities, territories, and tribes and would distribute at least $4.25 billion directly to those entities based on their relative number of COVID-19 cases.

Other Spending

The Paycheck Protection Program and Health Care Enhancement Act includes the following additional spending measures:

$1 billion for the Centers for Disease Control and Prevention for activities such as surveillance, contact tracing, and lab capacity expansion.

$1 billion for the National Institutes of Health to develop testing and accelerate research on rapid testing, plus $500 million for the National Institute of Biomedical Imaging and Bioengineering and $306 million for the National Cancer Institute.

$1 billion for the Biomedical Advanced Research and Development Authority for research, manufacturing, and purchasing tests.

$600 million for community health centers and federally qualified health centers, as well as $225 million for rural health clinics.

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Legislative Schedule

All hearings can be viewed remotely by clicking HERE.

Thursday, April 23

8:00 a.m.

House State Government Finance Division

Room: Remote

Chair: Rep. Michael V. Nelson

Agenda:Continued discussion of HF 3499 (Nelson) Help America Vote Act appropriation purpose transferred, and money appropriated.

Amendments 3499A1 and 3499A3 (see links posted below) have already been adopted and will be reflected in the DE Amendment.

Testimony: The Honorable Steve Simon, Minnesota Secretary of State

Ms. Debby Erickson, Representing Minnesota Association of County Officers (Available to respond to questions)

Amendment A1: https://www.house.leg.state.mn.us/comm/docs/2f891696-a15d-4e0a-8c65-56712b7d0e93.pdf

Amendment A3: https://www.house.leg.state.mn.us/comm/docs/308cee3c-e190-48cf-a2e9-8606957a36b7.pdf

HF 2768 (Nelson) Please Note: the substance of HF 3732 (Lillie) – Labor agreements and compensation plan ratified – will be substituted for the language of HF 2768 by a DE amendment (see below). HF 2768 will be taken up no later than 8:45 a.m.

Testimony: Representative of Minnesota Management and Budget

11:00 a.m.

Senate in Session

1:00 p.m.

State Government Finance and Policy and Elections

Room: Remote

Chair: Sen. Mary Kiffmeyer

Agenda: COVID-19 operations update with the Dept of Admin, Minnesota Management and Budget, and Minnesota Department of Revenue

Cosmetology Examiners Board update

Friday, April 24

9:00 a.m.

House Jobs & Economic Development Finance Division

Room: Remote

Chair:Rep. Tim Mahoney

Agenda:

The House Jobs & Economic Development Finance Division will meet to discuss legislation to provide additional funding for the Emergency Loan Program. Bill language will be posted to the committee website and emailed to the committee’s listserv when it becomes available.

Presentation from the Minnesota Department of Employment and Economic Development on federal and state efforts thus far to help businesses.

Tuesday, April 28

12:00 p.m.

House in Session

1:00 p.m.

Senate Higher Education Finance and Policy

Room: Remote

Chair: Sen. Paul Anderson

Agenda: Informational update on the fiscal impact of COVID-19 on Higher Education institutions, actions taken to address financial challenges, and CARES Act funding distribution.

     -Joan Gabel, President, University of Minnesota

     -Devinder Malhotra, Chancellor, Minnesota State

     -Bill Maki, Chief Financial Officer, Minnesota State

2:30 p.m.

House Higher Education Policy & Finance Division

Room: Remote

Chair: Rep. Connie Bernardy

Agenda:

Presentation from Private Colleges & Universities on effects of COVID-19 & discussion on budget reserves

Presentation from Minnesota State on effects of COVID-19 & discussion on budget reserves Presentation from U of M on effects of COVID-19 & discussion on budget reserves

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