Washington Snapshot: The Senate passed The Paycheck Protection Flexibility Act of 2020
In This Week's Edition of Snapshot...
News from the Council
From Council President & CEO Kathleen Enright:
"Our country is broken. The Covid-19 pandemic has laid bare the devastating disparities in our society. But these inequities are not new – they have existed and persisted for centuries. The systems and leaders we all depend on continue to fail us."
Read her full statement responding to the tragic events taking place in our nation on our blog.
News from the Hill
- Paycheck Protection Program (PPP): The Senate passed The Paycheck Protection Flexibility Act of 2020 on Wednesday to ease restrictions on emergency small business loans intended to avert mass layoffs during the pandemic. The bill is the first major overhaul of the program and now goes to President Donald Trump for his signature. The legislation, passed by unanimous consent, would relax rules under the $670 billion Paycheck Protection Program to give borrowers 24 weeks instead of eight weeks to use the money and would lower to 60% instead of 75% the amount they must spend on payroll to qualify for full loan forgiveness. The House passed the bill last week in a 417-1 vote.
- Deliberations continue in the Senate about the next coronavirus relief bill. Politico reports that top GOP tax writers like Senate Finance Chairman Chuck Grassley (R-IA) and Rep. Kevin Brady (R-TX), the top Republican on Ways and Means, have been publicly supportive of the employee retention credit as a way to help businesses and employees stay on the job. Any bill is not expected before the end of June.
- The House Judiciary Committee will hold a hearing on police brutality next week, and Speaker Nancy Pelosi (D-CA) and Democratic leaders are looking to have a police reform package considered on the floor of the House by the end of the month.
Executive & Regulatory Affairs
Department of Agriculture
The Rural Development Office has taken several immediate actions to help rural residents, businesses, and communities affected by the COVID-19 outbreak.
The Federal Reserve
The New York Federal Reserve Bank will be supporting the development of technical assistance workshops and peer learning for the new grantees of the new Puerto Rico Nonprofit Capacity Building Network, a collaboration among Enterprise Community Partners (Enterprise), NeighborWorks America (NeighborWorks) and Fundación Comunitaria de Puerto Rico (FCPR), the latter a member of the Council on Foundations. On June 4, six Puerto Rico nonprofits were selected for the inaugural cohort of the Puerto Rico Leadership Development Initiative. Each will receive a $35,000 grant, technical assistance, one-to-one staff mentoring, peer learning with other grantees and help with capacity building to ensure they are prepared to support their communities over the long term.
Department of Housing and Urban Development
A new Opportunity Zones Toolkit: Volume 2: A Guide to Local Best Practices and Case Studies has been published by HUD. It builds on the roadmap laid out in Volume 1 and provides more detailed information and illustrative examples to guide local leaders as they develop strategic plans for Opportunity Zones. This Toolkit provides tips, resources, and examples of best practices to assist local leaders in developing and implementing strategies to leverage their Opportunity Zone designations for new investment and long-term economic development in their communities. Undertaking effective planning will help communities align resources, establish incentives, and build partnerships in a way that attracts the desired private capital investment.
Department of Health and Human Services
On June 2, HHS announced that it is providing an additional $250 million in CARES Act funding to aid U.S. health care systems treating patients and responding to the COVID-19 pandemic. The funds will support hospitals and other health care entities to train workforces, expand telemedicine and the use of virtual healthcare, procure supplies and equipment, and coordinate effectively across regional, state and jurisdictional, and local health care facilities to respond to COVID-19. Additionally, this funding will advance the mission of the National Special Pathogen System to enhance national capacity and capability to respond to highly infectious diseases now and in the future.
Department of Homeland Security
Federal Emergency Management Agency
Beginning July 1, FEMA will host a month-long virtual series to help stakeholders understand the goals and key aspects of the new Building Resilient Infrastructure and Communities (BRIC) program. The BRIC program is intended to support states, local communities, tribes and territories undertaking hazard mitigation projects reducing risks from disasters and natural hazards. BRIC is a new program that replaces the existing Pre-Disaster Mitigation (PDM) program. Through BRIC, FEMA is shifting the federal focus away from reactive disaster spending toward research-supported, proactive investment in community resilience. FEMA anticipates BRIC funding projects that demonstrate innovative approaches to partnerships that may bring multiple funding sources or in-kind resources from a range of private and public sector stakeholders or offer multiple benefits to a community in addition to the benefit of risk reduction. The Notice of Funding Opportunity (NOFA) is expected mid-summer and the applications period will open in the fall of 2020.
Department of Transportation
The Federal Transit Administration (FTA) has published a notice in the June 3 Federal Register about its priorities for programs in Fiscal Year (FY) 2020, announcing the full-year apportionments and allocations for grant programs, information about contract authority, and plans for several competitive programs.
Among the topics addressed:
- Technical Assistance and Workforce Development
- Rural Opportunities to Use Transportation for Economic Success (ROUTES)
- Opportunity Zones
- Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program
- Formula Grants for Rural Areas Program
- Rural Transportation Assistance Program
- Appalachian Development Public Transportation Assistance Program
- Public Transportation on Indian Reservations Program
- Public Transportation Innovation
Department of the Treasury
On May 28, Treasury published an updated FAQ document on the Coronavirus Relief Fund (CRF). The CARES Act established the new $150 billion CRF for state, county and municipal governments with populations over 500,000 to address necessary expenditures incurred due to the COVID-19 public health emergency.
The IRS has announced that people who normally don't file income taxes have until October 15 to register for economic stimulus payments provided by the CARES Act. Of the payments already distributed, 120 million were sent by direct deposit, 35 million by check and four million through prepaid debit cards.
Happening in the States
Exclusive from our colleagues at the National Council of Nonprofits.
State and Local, Public and Private Funding for Nonprofits
The CARES Act appropriated $150 billion for a Coronavirus Relief Fund (CRF) for state, territorial, local, and tribal governments. It is unclear to many officials from those governments and nonprofits whether any of these funds can be used to support nonprofit operations. Congress directed that moneys from the fund are to be used to cover costs that are necessary expenditures incurred due to COVID-19, were not accounted for in the budget most recently approved by such government, and were incurred between March 1 and December 30, 2020. Guidance from U.S. Treasury further explains that the funds may be used to respond directly to the emergency and address medical or public health needs as well as economic support for employment or business interruptions, including governments share of unemployment costs and payments to the state unemployment insurance fund. However, the funds may not be used to fill budget gaps, for revenue replacement, or for a cost not accounted for in the most recent budget.
Many programs and services nonprofits provide are listed as permissible expenses, such as food delivery, distance learning, and caring for homeless populations. Some state and local governments have created state and local funds under the CRF to provide economic support for small businesses and nonprofits (Alaska, District of Columbia, Hawaii, Idaho, Montana, and New Hampshire). Others, however, have indicated funds cannot be used for nonprofit services, contradicting the Guidance and FAQs, or purposely excluded nonprofits.
Separate state and local funds have been created through state appropriations and private philanthropy and donations, as well as through community foundations. For example, grantmakers in Illinois and South Carolina have established programs through private funding. Elsewhere, some nonprofits have successfully advocated to be eligible recipients of fund grants and loans from public sources (Massachusetts, North Dakota, and Utah). Other policymakers and officials overseeing other funds (North Carolina and Wyoming) specifically denied including access for nonprofits.
State Budget Outlook Dismal, States Need Flexibility
Most state fiscal years begin July 1, and state budget revenue projections anticipate shortfalls in nearly half of the states. Three states (California, Colorado, and New Mexico) are expecting revenue declines greater than 20 percent. Other states are beginning or finishing their legislative sessions with large gaps. North Carolina anticipates a $4.2 billion shortfall, about 15 percent of the state’s budget, and Kentucky is looking at budget cuts of 12.5 percent. The Senate President of Florida recently released a general revenue collection report stating tax collections were down $598.2 million. Policymakers will be forced to make budget decisions and fill gaps through spending cuts and new revenues unless Congress appropriates funds to help fill the gaps (see related article, above). During past recessions, state legislators have made steep cuts to programs performed by nonprofits in an effort to reduce budget gaps. State and local officials similarly have acted to give the appearance of fiscal stability by delaying payments on contracts for services performed or imposing more burdens without additional pay. Local leaders, facing budget shortfalls, often turn on their longstanding nonprofit partners and make demands for payments in lieu of taxes, payments that the elected officials do not have the legal authority to demand.
