FEDERAL LEGISLATION

FPLG COVID-19 RESPONSE

FEDERAL LEGISLATION

[UPDATE: August 30, 2020]

The HEROES Act, passed by the House in mid-May, has not yet been brought to the Senate Floor. Intermittent negotiations have repeatedly collapsed, and Congress remains on summer recess until after Labor Day. Two small standalone bills passed Congress and became law earlier in the summer. The first, the Protecting Nonprofits from Catastrophic Cash Flow Strain Act, provided a halfway fix to a problem for the many nonprofits that self-insure unemployment benefits. The second temporarily extended the PPP loan program. 

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[UPDATE: June 30, 2020]

The fifth major COVID-19 bill, the HEROES Act, passed by the House six weeks ago, remains trapped in the Senate without action so far. Any action on it will occur after the July 4th recess.

Otherwise, there was movement in early June by Congress to extend and fix some of the problems with the Payroll Protection Act (PPP). There was also last-minute action taken on June 30th to extend the program for new applicants until August 8th. Other confusion and uncertainty about the PPP remains.

When Congress returns, we may see action on a bipartisan push to extend the charitable deduction to all taxpayers as well as a solution to hardships created earlier under the CARES Act for those nonprofits who self-fund unemployment insurance.

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[UPDATE: May 19, 2020]

By the end of the third week of April 2020, Congress passed and the White House signed into law the fourth in a series of special legislative efforts to respond to the COVID-19 crisis. This $484-billion spending package restarts the small-business loan program that quickly ran out of funds. It also provides more money for health-care providers and for virus testing.

A fifth bill, the HEROES Act, has been passed by the House on May 15, 2020. It now moves to the Senate where it will likely face strong resistance. We’ll keep track of, and update, this developing story.

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[April 1, 2020]

To date, the federal response to COVID-19 has unrolled in three phases.

Phase 1, H.R. 6704, the Coronavirus Preparedness and Response Supplemental Appropriations Act [enacted March 6, 2020] is the necessary supplemental appropriations bill of $8.3 billion to start the process of a massive relief program.

Phase 2, H.R. 6201, the Families First Coronavirus Response Act, [enacted March 18, 2020] creates new workplace obligations for employers and gives expanded aid to individuals. It includes a complex set of temporary paid leave mandates and employer reimbursement provisions, along with funding for free coronavirus testing, food nutrition security, and an extension of unemployment benefits.

Phase 3, the The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) [enacted March 27, 2020] authorized more than $2 trillion in spending to inject cash into the economy through individuals, businesses, and nonprofits. It includes:

  • Mandated paid sick and family leave for employees and refundable payroll tax credits for employers
  • Three loan programs for organizations
  • Above-the-line deduction (universal, for all individual taxpayers) for charitable contributions made in 2020
  • Employee retention refundable tax credit
  • Expanded unemployment and enhanced funding for social support programs

As a result of intense lobbying, the nonprofit sector was included in the final bill. The Charitable Sector: COVID-19 Relief and Economic Stimulus Package (March 18, 2020) National Council of Nonprofits (with hundreds of organizations as signatories).

Speaker Nancy Pelosi has announced that her caucus is already working to draft a Phase 4 bill that, if passed, will significantly increase the amounts given to beleaguered states and local governments whose budgets are being crushed by the demands of the COVID-19 response. It also could include aid specifically designed to bolster the nonprofit sector. Nancy Pelosi Is Already Talking About the Next Stimulus Bill for Coronavirus Relief (March 30, 2020) Emily Cochrane, The New York Times; see also Bipartisan Bill Would Provide $60 Billion to Nonprofits (March 30, 2020) Dan Parks, Chronicle of Philanthropy.

Contact FPLG (619) 780.3839

… [T]he American people rely extensively on charitable nonprofits for important services and supports and [they] play a significant role in our nation’s economy as the third largest employer. [Previous COVID-19 relief laws] have been a lifeline for many nonprofits …. As you work on the next COVID-19 relief package …, the charitable nonprofit sector urges you to address four specific issues to ensure we can continue to provide frontline services to those in need, and are able to continue to help our communities recover.

— Nat’l Council of Nonprofits ltr to Congress co-signed by thousands of nonprofits (7/13/20)

The Senate’s passage and the President’s signing of the PPP Flexibility Act is a welcome rejection of the wait-and-see attitude that had threatened to halt consideration of crucial, bipartisan reforms that the nonprofit community and others need….However, looming deadlines for PPP borrowers were only one set of time-sensitive and significant challenges nonprofits face…. So while we can briefly smile with relief that this PPP reform measure finally broke through the House and Senate, we all still have much more work ahead to get Congress to act on urgent nonprofit priorities.

— Nat’l Council of Nonprofits  (6/9/20)

Many state and local governments are facing a June 30 deadline to adopt budgets. Without federal assistance, states, territories and local governments will be forced to make drastic cuts to the programs Americans depend on to provide economic security, educational opportunities and public safety, and the national economic recovery will be dramatically hampered.

— Nat’l Governors Ass’n. ( 5/20/20)

During this crisis, non-profits have stepped in to fulfill the needs of our communities. But like many, they are feeling the financial strain of this pandemic, while the need for their services continues to grow. One of the best things we can do to provide relief for our communities, is to help these organizations maintain the workforce needed to continue their services.

— Sen. Sherrod Brown, (D-OH) 5/15/20)

REFERENCES & RESOURCES

GO TO – EXECUTIVE BRANCH

Remote-Work Costs: Must Nonprofit Reimburse?

[June 5, 2020] Among the many adjustments that employers - including nonprofits - have had to make during the COVID-19 pandemic is the abrupt switch to remote work for some or all of their employees. That includes making sure that everyone in the workforce has needed hardware, software, and internet and phone connectivity.  California is among the jurisdictions that initiated early and mandatory stay-at-home orders for a large portion of the population and economy. There [...]

Filing Deadlines Extended for Nonprofit Organizations

[April 24, 2020] By the third week of March 2020, governments at all levels had begun to respond to the many questions and issues raised by the COVID-19 emergency, including - most notably - the curtailment or suspension of operations and activities by individuals and entities on account of new stay-at-home orders  and recommendations.  The necessary federal emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Act was made in mid-March. The [...]

UPDATE: The CARES Act and Nonprofits

[March 27, 2020] The third prong of the Congressional response to the COVID-19 pandemic - the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (S. 747) - is now before the House of Representatives, having passed the Senate on Wednesday. The House is expected to approve it today with overwhelming support; voting is expected to begin shortly.  It could be signed at the White House and in effect before the end of this weekend. [...]

Some Good News: Funders are Stepping Up

Ten days ago, we posted Funders Must Step Up - Right Now! (March 16, 2020).   That same morning, influential blogger Vu Le had posted Funders, this is the rainy day you have been saving up for. Mr. Le has long been a vocal critic of many foundations’ viewing the five percent payout figure in the tax code as a ceiling instead of what it is: a floor.  During that week, as most of us were [...]

Nonprofit Board Meetings in an Emergency

The devastating pandemic has brought sudden and profound challenges for all of us.  In What Nonprofit Board Members Should Be Doing Right Now to Address the COVID-19 Situation, (March 16, 2020), the experts from BoardSource write:  “As the world responds to the threats of COVID-19, many nonprofits and their boards are wrestling with difficult questions and decisions.”  A rewrite of that sentence may be in order; every nonprofit and its board is flying blind in [...]

The Charitable Sector: COVID-19 Relief and Economic Stimulus Package

America's charities request $60 billion infusion of support to help the most vulnerable March 18, 2020 The COVID-19 (Coronavirus) pandemic facing the country is having a profound impact on the economy and has greatly expanded the need for charitable organizations to provide additional services in an unprecedented manner. At the same time, the economic downturn will undoubtedly result in a contraction in contributions and other sources of revenue which are the lifeblood of many charitable [...]

Coronavirus and Nonprofits: Challenges & Resources

What a difference a week makes. Last week, the news media focused on the minutiae of the primary-election horse race. This week, Americans have been forced to confront the coronavirus (COVID-19) pandemic. For the nonprofit sector, the emergency becomes a double-barreled crisis: we are both victims and saviors. This is not an unfamiliar conundrum; there are frequent natural disasters that devastate one area or another. This nation’s charitable organizations - and, in particular, the social [...]

Funders Must Step Up – Right Now!

“Funders,” writes nonprofit blogger Vu Le, “this is the rainy day you have been saving up for.”  Recently, we wrote about Mr. Le’s earlier plea for America’s foundations to step up their payouts beyond the “five percent rule” in the federal tax code. In an article last summer, he characterized it as a moral imperative: The ethical argument for foundations to increase their annual payout rate beyond 5% (August 4, 2019). This morning, it’s a [...]

Small Business Association Disaster Loan Guidance and Resources

The U.S. Small Business Administration (SBA) has an existing program, the Economic Injury Disaster Loan program, that extends disaster relief loans to small businesses, including nonprofits, to help alleviate economic injury caused by disasters.  On Thursday, March 12, 2020, the SBA announced that the program will be available to claims arising from COVID-19.  The SBA will work with state officials to offer loans of up to $2 million.  “These loans may be used to pay [...]

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