Coronavirus Update
May 7, 2020
Information and resources on federal responses to the coronavirus crisis for towns and townships
Federal Response
The Senate is in session this week. The House may return to Washington as soon as next week.

House Democrats are expected to unveil a package of priorities for the next coronavirus aid package by the end of this week. We expect additional aid to state and local governments to be included in the package. On Monday evening, House Appropriations Committee Chairwoman Nita Lowey (D-NY) sent a letter to her colleagues outlining how House Democratic leadership plans on allocating additional funding to county and local governments in the next package.

Republican leaders who have resisted efforts to provide additional aid to state and local governments are coming under increasing pressure as more Republican Senators and Members of Congress express support for providing relief to state and local governments. Members requested additional financial aid and increased flexibility for the funds already provided by the CARES Act Coronavirus Relief Fund. (See the “Bills and Letters of Interest” section for more details.)

Major points of contention expected to arise during debate on future coronavirus legislation include President Trump’s call for a payroll tax cut , limitations on employer liability for coronavirus infections, the amount of funding, and eligible uses.

Capitol Hill. Senate Democrats sent a letter to President Trump calling for the Administration to develop a comprehensive national plan by May 24 to ensure states have sufficient testing before safely re-opening. 

Top Congressional tax writers sent a letter to Treasury Secretary Mnuchin urging his Department to allow businesses to deduct expenses associated with Paycheck Protection Program (PPP) loans that are ultimately forgiven. This letter comes after the Internal Revenue Service determined that those expenses are not deductible. Additionally, a bipartisan group of 19 senators sent Secretary Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza a letter urging them to permit recipients of PPP loans to spend more of the loan funds on non-payroll expenses without penalty. A PPP loan can be converted to a grant if at least 75 percent of it is used to keep employees on payroll; the Senators asked Treasury and SBA to reduce the threshold to 50 percent to accommodate the high cost of rent, mortgage, and utility payments. 

Bills and Letters of Interest

A large volume of bills and initiatives were introduced since our last Update; some may be included in the next round of coronavirus relief. 

Local Government Relief:
  • S. 3608 (Sen. John Kennedy (R-LA)) allows states and local governments to use CARES Act funding for operating expenses unrelated to the coronavirus. This measure was blocked this afternoon by Sen. Rick Scott (R-FL).
  • H.R. 6700,S. 3614 (Rep. Mike Thompson (D-CA), Sen. Kamala Harris (D-CA)) allows the Federal government to cover 100 percent of the cost of disaster-related expenses to states and localities, instead of the typical 75 percent.
  • H.R. 6705 (Rep. Cindy Axne (D-IA)) creates a new program funded with $500 billion to issue grants to state and local governments to offset lost revenue.
  • Sen. Tim Scott (R-SC) sent a letter to the Treasury Department and Internal Revenue Service asking that the Department provide coronavirus relief for Opportunity Zones.
  • S. 3623 (Sen. Martin Heinrich (D-NM)) provides $250 billion in stabilization funds geared towards localities with populations under 500,000. The funds could be used for costs including, but not limited to, lost revenue, reimbursement for expenses already incurred, and increases in costs reasonably believed to have been caused or as a result of the coronavirus pandemic.
  • S. 3632 (Sen. Kirsten Gillibrand (D-NY)) creates a plan to provide local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the coronavirus pandemic.
  • S. 3638 (Sen. Dan Sullivan (R-AK)) allows Coronavirus Relief Fund payments to be used to replace revenue shortfalls resulting from coronavirus. 

Business Relief:
  • H.R. 6696 (Rep. Sharice Davids (D-KS)) creates a $100 million grant program for small businesses that shift their production to manufacture personal protective equipment and testing supplies for the coronavirus.
  • H.R. 6697 (Rep. Chris Pappas (D-NH)) expands PPP eligibility to include 501(c)(6) organizations with 300 or fewer employees. 

Healthcare/First Responders/Testing:
  • H.R. 6698 (Rep. Jan Schakowsky (D-IL)) increases infection control and prevention, testing, and personal protective equipment for the hardest hit nursing homes.
  • H.R. 6699 (Rep. Ann Kuster (D-NH)) provides $25,000 in either student loan debt relief or educational benefits to essential workers and their family members.
  • H.R. 6709 (Rep. Matt Cartwright (D-PA)) provides federal hazard pay to health care professionals and other essential workers.
  • H.R. 6719 (Rep. Ro Khanna (D-CA)) provides an additional $75 billion for the federal government to purchase or manufacture personal protective equipment; ventilators; testing reagents and compounds; approved vaccines, therapeutics, diagnostics, pharmaceuticals; and any other medical supplies or hospital infrastructure that are necessary. 
  • S. 3595, H.R. 6701 (Sen. Jacky Rosen (D-NV),Rep. Anna Eshoo (D-CA)) directs the National Institutes of Health to conduct a longitudinal study on cases of COVID-19.
  • Sens. Rosen (D-NV), Richard Blumenthal (D-CT), and Tim Kaine (D-VA) sent a letter to Senate leadership calling for increased funding for a CDC data modernization initiative. 

Administration. The White House announced it would wind down the COVID-19 Task Force but then explained the Task Force would be refocused rather than dismantled. "I thought we could wind it down sooner," Trump told reporters on Wednesday. "But I had no idea how popular the task force is until actually yesterday when I started talking about winding down... It is appreciated by the public."

The Department of Housing and Urban Development announced it will allocate $685 million through the Public Housing Operating Fund to help low-income Americans residing in public housing. HUD will also allocate $380 million in coronavirus administrative fee funding to all Public Housing Authorities.
The Treasury Department released an updated FAQ document providing additional guidance for state and local governments receiving direct allocations from the CARES Act’s Coronavirus Relief Fund, including eligible expenditures and the administration of fund payments.

FEMA announced $200 million in supplemental funding allocations to local jurisdictions to supplement local service organizations that provide critical resources to people in economic emergencies, which includes homeless populations. 

The EDA is accepting applications from eligible grantees for CARES Act supplemental funds intended to help communities prevent, prepare for, and respond to the coronavirus.
The American Hospital Association released a report estimating $202.6 billion in losses resulting from coronavirus expenses and lost revenues for hospitals and health systems March 1 – June 30.

NLC launched the Cities Are Essential Campaign to help secure funding in the next coronavirus relief package for cities, towns, and villages. The campaign seeks $500 billion in federal aid over the next two years.

MultiState Associates released a “COVID-19 State Reopening Guide” to monitor and compare state and local government reopening strategies throughout the country.