On March 27, 2020, President Trump signed "phase 3" COVID-19 relief legislation carrying an unprecedented $2 trillion price tag, which is larger than the federal government’s entire annual budget for discretionary spending and is roughly one-tenth the size of the American economy. Included in this package is $13.5 billion in grants to states for K-12 schools, part of a broader "Education Stabilization Fund."

The law requires equitable services to be provided to private schools under this program.

The legislation lists twelve categories of permissible uses of the funds here . State Educational Agencies (SEAs) and Local Educational Agencies (LEAs) should not begin making plans for the dispersal of these funds until the US Department of Education releases guidance on implementation of the new law, which is expected in the coming days.

The Education Stabilization Fund in the phase 3 bill, or "CARES Act," also includes $3 billion for governors to provide emergency support to schools most impacted by coronavirus. The law requires equitable services to be provided to private schools under this program as well. USDE guidance is forthcoming, but in the meantime, private schools should work with their State CAPEs to ensure that governors are aware of their needs.

One piece of the CARES Act that is receiving a tremendous amount of attention is its Paycheck Protection Program. The new law provides $350 billion for federally guaranteed loans to small employers (under 500 employees), nonprofits are eligible. The portion of the loan used for maintaining payroll has the potential to be forgiven.

According to the Small Business Administration (SBA): "You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Lenders may begin processing loan applications as soon as April 3, 2020." It is expected that loans will be disbursed on a first come, first served basis. A sample application form can be found here.

Since passage of the CARES Act, private school advocates have argued that Small Business Administration guidance is needed to clarify:

1) Whether use of these loans will lead to recipient of "federal financial assistance" status and the obligations that come with that;

2) Whether these loans can be used to pay the salaries of teachers involved in religious instruction; and

3) In the case of Catholic schools, whether the 500 employee limit will be based on the number of employees at a particular school or the number of employees in the diocese.

On April 2, the Treasury Department released guidance which references certain religious liberty protections (see pages 27-28) and announces that further guidance on religious liberty will be released "promptly."

Congress expanded the already existing Economic Injury Disaster Loan program to include a $10,000 advance. According to the Small Business Administration, "In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid."

In the past, religious organizations have not been eligible for the EIDL program. SBA guidance is needed on this question, as well as whether acceptance of these funds will lead to recipient of "federal financial assistance" status.

This Sherman & Howard one-pager may be of help in distinguishing between the PPL and EIDL programs.

The CARES Act includes emergency unemployment insurance benefits for individuals affected by the pandemic. If a nonprofit fully participates in its state’s unemployment benefits program, its employees will be eligible for $600 per week in addition to regular unemployment compensation under state law, as well a possible extension of time for provision of unemployment benefits.

If a nonprofit does not pay state unemployment insurance tax, but reimburses the state for unemployment benefits paid upon the termination of an employee, it will be eligible to receive 50% of the amount reimbursed to the state. Its employees will also be eligible for the additional $600 per week, as well as a possible extension of time for provision of unemployment benefits.

If a nonprofit neither pays state unemployment insurance tax nor reimburses the state for unemployment benefits paid upon the termination of an employee, the nonprofit does not receive any benefits under the CARES Act, but its laid-off employees will be eligible to receive Pandemic Unemployment Assistance from the federal government at no cost to the employer.

The CARES Act permits a deduction of up to $300 for cash contributions to charitable organizations, whether taxpayers itemize their deductions or not.

On March 18, 2020, the president signed Congress' "phase 2" coronavirus relief bill, the Families First Coronavirus Response Act. It creates a national paid sick leave law and expands the Family and Medical Leave Act (FMLA). The Association of Christian Schools International (ACSI), a CAPE member organization, has posted this very helpful explanation of the new paid sick leave and FMLA provisions.