This week, NCSL will intensify efforts to secure more flexible resources for states. Congress is looking to adopt a package to provide additional funds to the Paycheck Protection Program and hospitals as early as Wednesday. NCSL is working to expand the allowable uses of the Coronavirus Relief Fund to include lost revenue.
NCSL in D.C.
NCSL Intensifies Advocacy for Aid to Address State Revenue Shortfalls
Last week, NCSL redoubled efforts to secure additional, flexible funds for states to mitigate the catastrophic economic effects of the Coronavirus (COVID-19) outbreak. In a letter to congressional leadership, NCSL urged Congress to provide states with $300 billion in direct, flexible assistance to mitigate drastic declines in revenues and avoid disruptions in essential citizen services. Additional resources are critical to compensate for the 15-20% projected revenue losses in every state and to help leaders invest in an eventual economic recovery. With three substantial COVID-19 response packages already enacted and one in the implementation process—Congress is developing parameters for a fourth measure that would continue to stimulate the broader economy and provide relief to citizens as containment measures for the virus remain in place. This recent request to Congress follows an earlier letter by NCSL urging leaders to amend the Coronavirus Aid, Relief, and Economic Security (CARES) Act to allow the $150 billion state fund currently in statute to be explicitly used for revenue losses. While the time frame for legislative activity on the next response package or the CARES Act remains unclear, there is bipartisan momentum to achieve consensus on these measures by early May.
COVID-19 Pandemic Disrupts FY 2021 Appropriations Schedule
As expected, the COVID-19 outbreak has dominated all congressional activity, including what was already expected to be a chaotic appropriations schedule. With Congress on leave at least until May 4, any progress on funding for agency operations will have to be addressed in periodic spurts. Both chambers are considering holding agency hearings in virtual formats to make progress ahead of scheduled recesses in August for national political conventions and the November general elections. Funding for FY 2021 must be addressed by Sept. 30 to avoid a government shutdown. Other expirations requiring funding include surveillance authorities that lapsed on March 15, federal health programs now due to expire on Nov. 30, many pandemic response programs due to expire by the end of the year, and tax extenders, which expire Dec.31.
First $30 billion of CARES Act Provider Relief Funds Goes Out
Health and Human Services (HHS) announced $30 billion in funding to support providers for health-care-related expenses or lost revenue due to COIVD-19. The funding is part of a $100 billion relief fund for hospitals that was included in the CARES Act. HHS worked with UnitedHealth group to distribute funds to eligible providers. These rapid payments are not loans and will not need to be repaid. The payment distribution was determined by a formula that is based on a share of total Medicare fee-for-service (FFS) reimbursements in 2019. Total FFS payments were $484 billion in 2019.
Eligibility Criteria Included:
- Facilities and providers that received Medicare FFS reimbursements in 2019.
- Providers that agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have to pay an in-network provider.
- Providers heavily impacted by COVID-19 and who have had issues with operations due to delaying care for healthy patients and canceling elective services.
- Those who ceased operation as a result of the pandemic if they provided diagnoses, testing or care for those with COVID-19, along with other essential care.
The agency also pointed out this funding is different than Center for Medicare and Medicaid Service’s Accelerated and Advance Payment Program, which is for providers and suppliers to get the resources they need for the pandemic, but are advanced payment loans that need to be paid back. The agency is working on further guidance and information on how the remaining $70 billion will be allocated.
USDA Releases Initial Details of CARES Act Aid for Farmers
The United States Department of Agriculture (USDA) announced the creation of the $19 billion Coronavirus Food Assistance Program (CFAP) as part of the $23.5 billion funding the agency received in the CARES Act. The CFAP makes use of a combination of the funding and authorities provided in the CARES Act and the Families First Coronavirus Response Act, as well as the other USDA existing authorities. The combination of direct payments to farmers and bulk government purchases of commodities parallels the approach the administration has used as part of the $28 billion it has provided in response to retaliatory tariffs over the past two years.
First, the CFAP will provide $16 billion for direct support for agricultural producers, $9.6 billion of which has been allocated for the livestock industry, which is further divided with $5.1 billion for cattle, $2.9 billion for dairy and $1.6 billion for hogs. Also included is $3.9 billion for row crop producers, $2.1 billion for specialty crops producers and $500 million for others crops.
Second, the CFAP will partner with regional and local distributors to purchase $3 billion in fresh produce, dairy and meat. Purchases will be made in increments of $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products and $100 million per month in meat products. Distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy and meat products to food banks, community and faith-based organizations, and other non-profits. The president also announced that the USDA will make use of other sources to provide $14 billion in additional aid in July.
FEMA Releases a Disaster Financial Management Guide
On April 16, the Federal Emergency Management Agency released a Disaster Financial Management Guide. The guide identifies the capabilities and activities necessary to successfully implement disaster financial management in a cost-effective way. This includes:
- Information on how to track, calculate and justify the costs of an emergency.
- Supports for local reimbursement reconciliation.
- How to avoid deobligation of grant funding.
- How to effectively fund and implement recovery projects and priorities.
The guide is intended to support jurisdictions in identifying the resources needed to support their community, increase the efficiency of recovery efforts, and reduce the likelihood of audits and financial penalties for the jurisdiction.
Census Bureau Delays Collection Operations
PL 94-171, enacted by Congress in 1975, requires census data be given to the states no later than one year from Census Day, or April 1, 2021. Due to COVID-19, the Census Bureau has delayed collection operations and has extended the deadline for dissemination of redistricting data to the states to July 31, 2021. This extension, in turn, will force many states with firm redistricting deadlines to amend their laws, as only six states do not require that census data be used for redistricting. NCSL will be working with the Census Bureau and members of Congress to determine the best course of action moving forward.
DHS and USDA Announce New Flexibilities for Farm Guest-Worker Program
The Department of Homeland Security and the USDA announced significant changes to the H-2A program, which has resulted in closing many international borders across the world in response to the current COVID-19 pandemic. The H-2A program allows U.S. employers or U.S. agents who meet specific regulatory requirements to bring foreign nationals to the United States to fill temporary agricultural jobs. Specifically, the changes will allow employers to employ certain foreign workers who are currently in H-2A rather than those having to apply from outside the United States. Additionally, current H-2A workers can remain in the U.S. for the three-year maximum allowable period.
EPA Rescinds Legal Justification for MATS Final Rule
The Environmental Protection Agency (EPA) withdrew the “appropriate and necessary” finding for the Mercury and Air Toxics Standards (MATS) final rule. The rule sets limits on emissions of mercury and other harmful air toxins from new and existing coal- and oil-fired power plants, but does not rescind the rule itself.
The history is that in 2012, the EPA finalized the MATS final rule, which found it “appropriate and necessary” to regulate these pollutants under the Clean Air Act. In 2015, the Supreme Court held 5-4 in Michigan v. EPA that the EPA acted unreasonably in failing to consider cost when deciding whether regulating mercury emissions from power plants is “appropriate and necessary.” In 2016, the EPA responded by issuing a final rule explaining how the EPA had taken cost into account in evaluating whether it is appropriate and necessary to set standards for emissions of air toxins from coal- and oil-fired power plants. In 2017, under a new administration, the EPA proposed to withdraw the appropriate and necessary finding. The current action by the EPA finalizes that action.
Education Department Announces Streamlined Waiver Process for State and District Funding Flexibilities
State education agencies can now apply for waivers that grant additional flexibilities on state and district funding using a streamlined waiver form. Among the new flexibilities, states can allow districts to carry over more than 15% of their federal FY 2019 Title I funds to the next fiscal year. States can receive a waiver to extend the period of availability of FY 2018 funds for many Elementary and Secondary Education Act categorical programs (including Title I A-D, Title II, and Title IV A-B) until Sept. 30, 2021. The waiver also allows states to grant districts flexibility within allowed uses of Title IV-A funds, including waiving the 15% limit of use of funds to purchase technology infrastructure and teacher training on distance learning. These additional flexibilities were authorized by the CARES Act and complement previously announced waivers on federal state assessment and accountability provisions.
Federal Deficit Expected to Increase by $1.6 Trillion due to COVID-19 Stimulus Packages
As a result of the federal government’s stimulus packages to help citizens and businesses endure the health and financial effects of the COVID-19 outbreak, the deficit is expected to increase by $1.6 trillion, according to Congressional Budget Office’s most recent report. Based on projections for a $1 trillion deficit before the onset of the pandemic, the new gap is expected to equal more than 10% of gross domestic product, or the largest since World War II. For this year, the CARES Act will cost more than $1 trillion of outlays, while reducing revenue by $571 billion.
The Reading Room
- Vehicle Fuel Economy and Greenhouse Gas Standards (CRS, April 17, 2020)
- Report Underscores Role of State Policy in Broadband Expansion (Pew, April 13, 2020)
- Four Steps to Reduce the Harm of State Fiscal Distress (Pew, April 9, 2020)
- Budget Stress Testing Helps States Prepare for Fiscal Distress (Pew, April 9, 2020)
- Rainy Day Funds Help States Weather Fiscal Downturns (Pew, April 9, 2020)
- Department of Defense Counter-Unmanned Aircraft Systems (CRS, April 7, 2020)
- Federal Traffic Safety Programs: In Brief (CRS, April 6, 2020)
- Small Business Administration (SBA) Funding: Overview and Recent Trends (CRS, April 6, 2020)
The Reading Room: CARES Act Specific
- Federal Reserve: Emergency Lending in Response to COVID-19 (CRS, April 17, 2020)
- The Federal Judiciary and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (CRS, April 17, 2020)
- COVID-19 and Direct Payments to Individuals: Summary of the 2020 Recovery Rebates/Economic Impact Payments in the CARES Act (P.L. 116-136) (CRS, April 17, 2020)
- Six Ways New Federal Health IT Rules Improve Both Care and Public Health (Pew, April 17, 2020)
- HR 748, CARES Act, Public Law 116-136 (CBO, April 16, 2020)
- CARES Act Elementary and Secondary Education Provisions (CRS, April 16, 2020)
- 2020 Census Fieldwork Delayed by COVID-19 (CRS, April 16, 2020)
- Federal Student Loan Debt Relief in the Context of COVID-19 (CRS, April 16, 2020)
- Department of Justice’s Coronavirus Emergency Supplemental Funding Program (CRS, April 16, 2020)
- Banning Religious Assemblies to Stop the Spread of COVID-19 (CRS, April 16, 2020)
- SBA’s Paycheck Protection Program (PPP) Loans and Self-Employed Individuals (CRS, April 16, 2020)
- COVID-19 and Direct Payments to Individuals: Federal Tax Offset for Past-Due Child Support (CRS, April 15, 2020)
- Tax Treatment of Net Operating Losses (NOLs) in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (CRS, April 15, 2020)
- The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Allocations (CRS, April 14, 2020)
- Mortgage Provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (CRS, April 14, 2020)
- Bank Exposure to COVID-19: Mortgages and Consumer Loans (CRS, April 14, 2020)
- As Coronavirus Cases Rise, FDA Acts Against Businesses Selling Fraudulent Treatments (Pew, April 14, 2020)
- CARES Act Assistance for Employers and Employees—The Paycheck Protection Program, Employee Retention Tax Credit, and Unemployment Insurance Benefits: Assessment of Alternatives (Part 2) (CRS, April 13, 2020)
- Treasury’s Exchange Stabilization Fund and COVID-19 (CRS, April 10, 2020)
- State and Local Government Debt and COVID-19 (CRS, April 10, 2020)
- Federal Reserve: Emergency Lending in Response to COVID-19 (CRS, April 10, 2020)
- CARES Act Assistance for Employers and Employees—The Paycheck Protection Program, Employee Retention Tax Credit, and Unemployment Insurance Benefits: Overview (Part 1) (CRS, April 10, 2020)
- The CARES Act: Implications for Tribes (CRS, April 9, 2020)
- Unemployment Insurance Provisions in the CARES Act (CRS, April 9, 2020)
- Small Businesses and COVID-19: Relief and Assistance Resources (CRS, April 9, 2020)
- COVID-19: The Drug Enforcement Administration’s Regulatory Role (CRS, April 9, 2020)
- Occupational Safety and Health Administration (OSHA): Emergency Temporary Standards (ETS) and COVID-19 (CRS, April 8, 2020)
- The PREP Act and COVID-19: Limiting Liability for Medical Countermeasures (CRS, April 8, 2020)
- CARES Act Eviction Moratorium (CRS, April 7, 2020)
- CARES Act Higher Education Provisions (CRS, April 7, 2020)
- Funding for HUD in the CARES Act (CRS, April 7, 2020)
- The CARES Act (P.L. 116-136): Provisions Designed to Help Banks and Credit Unions (CRS, April 7, 2020)
- Recovery Rebates and Unemployment Compensation under the CARES Act: Immigration-Related Eligibility Criteria (CRS, April 7, 2020)
- Department of Defense Counter-Unmanned Aircraft Systems (CRS, April 7, 2020)
- Federal Medical Assistance Percentage (FMAP) Increase Available for Title IV-E Foster Care and Permanency Payments (CRS, April 6, 2020)
- State Broadband Initiatives: Selected State and Local Approaches as Potential Models for Federal Initiatives to Address the Digital Divide (CRS, April 6, 2020)
- Small Business Administration 7(a) Loan Guaranty Program (CRS, April 6, 2020)
- COVID-19 Stimulus Assistance to Small Businesses: Issues and Policy Options (CRS, April 6, 2020)
- Community Development Block Grants and the CARES Act (CRS, April 6, 2020)
- Interaction of International Tax Provisions with Business Provisions in the CARES Act (CRS, April 6, 2020)
- Are Start-ups Eligible for the SBA’s New Paycheck Protection Program (PPP) Loans? (CRS, April 6, 2020)
Read the April 6 Capitol to Capitol.
NCSL's Advocacy in Washington
NCSL’s Washington staff advocates on behalf of state legislatures before Congress, the White House and federal agencies in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies' positions, NCSL is recognized as a formidable lobbying force in state-federal relations.
NCSL Staff in Washington, D.C.
- Molly Ramsdell | 202-624-3584 | Director
- Erlinda Doherty | 202-624-8698 | Budgets and Revenue
- Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
- Abbie Gruwell 202-624-3569 | Commerce and Financial Services
- Ben Husch | 202-624-7779 | Natural Resources and Infrastructure
- Jon Jukuri | 202-624-8663 | Labor, Economic Development and International Trade
- Haley Nicholson | 202-624-8662 | Health and Human Services
- Austin Reid | 202-624-8678 | Education