March 26, 2021
Note: The North Carolina Center for Nonprofits typically provides Nonprofit Policy Update each week as a benefit to its nonprofit members. However, to help all North Carolina nonprofits respond to the COVID-19 pandemic, we're temporarily providing this newsletter to non-member nonprofits.
In this issue...
NC House passes legislation to modernize nonprofit remote meeting laws
U.S. Senate approves bill to extend PPP loan applications through May 31
Governor Cooper releases budget proposal
Many nonprofits eligible for Employee Retention Tax Credit
American Rescue Plan includes significant funding that could assist nonprofits
Take action: Help eligible community members get vaccinated 
NC House approves improvements to unemployment laws
NC House bill would amend state constitution to create independent redistricting process
Remind your community: Don’t miss out on federal stimulus payments 
Governor Cooper eases some COVID-19 restrictions on businesses and nonprofits
New NC House bill would allow employers to offer exclusive provider benefit plans
NC House Passes Legislation to Modernize Nonprofit Remote Meeting Laws
Yesterday, the NC House of Representatives approved bill (H.B 320) that would make several changes to the NC Nonprofit Corporation Act to make it easier for nonprofits with members to conduct meetings remotely and for nonprofit board members to use email to take action by unanimous written consent. Under current law, nonprofits with members must conduct meetings in person (although this requirement has been temporarily suspended during the pandemic, as described below), and nonprofits need board approval (typically in a provision in the nonprofit’s bylaws) to use email or other means of electronic communication for unanimous written consent votes of boards.

The proposed changes are based on recommendations from the Center, thanks to input we have received from nonprofits during the COVID-19 pandemic. The Center is appreciative of Representative Destin Hall (R-Caldwell) for introducing this bill and for working with the Center and other nonprofits on legislative language that will be helpful for a wide range of nonprofit organizations.

Throughout the past year, Governor Roy Cooper has issued a series of executive orders giving nonprofit boards the flexibility to allow membership meetings to take place by remote communication and through remote voting during the pandemic, even if these types of remote meetings are not expressly authorized in the nonprofit’s articles of incorporation or bylaws. Governor Cooper’s most recent action – Executive Order No. 198 – extends this temporary authorization through May 10, 2021.
U.S. Senate Approves Bill to Extend PPP Loan Applications through May 31
The deadline for nonprofits and businesses to apply for PPP loans is currently set for March 31. Yesterday, the U.S. Senate approved a bill (H.R. 1799) to extend the deadline through May 31 and to allow the Small Business Administration (SBA) to continue to process loan applications through June 30. Senators Richard Burr (R-NC) and Thom Tillis (R-NC) both voted for the bill. The House of Representatives approved the bill last week, and President Biden is expected to sign it into law in the next few days.
Governor Cooper Releases Budget Proposal
On Wednesday, Governor Cooper released his proposal for the state budget for FY2021-23. Overall, Governor Cooper recommended spending $27.3 billion for FY2021-22 and $28.6 billion for FY2022-23. This would be a significant increase from the $24.8 billion that the state is spending this year. Some highlights of Governor Cooper’s proposal include:
  • Pay raises for public school teachers, other public school workers, and state employees;
  • Tax cuts for low-income North Carolinians through the re-enactment of a refundable state earned income tax credit and the creation of a non-refundable state tax credit for child and dependent care expenses;
  • Funding for two new positions at the NC Office of Volunteerism and Community Service to support increased volunteerism in North Carolina;
  • Additional funding for the NC Department of Health and Human Services Healthy Opportunities Pilot program, which invests in organizations working on the social determinants of health;
  • A recommendation that the state provide health coverage for about 500,000 North Carolinians with incomes up to 138% of the federal poverty level by expanding Medicaid coverage as allowed under the Affordable Care Act;
  • $11 million per year in additional funding for financial aid at North Carolina’s nonprofit private colleges;
  • Significant reductions in funding for the Opportunity Scholarship program, which provides financial assistance for private (mostly nonprofit) K-12 schools;
  • Additional funding for domestic violence agencies and sexual assault agencies;
  • $20 million per year in additional funding for early childhood nonprofits;
  • $1 million per year in additional funding for grassroots arts grants;
  • $1 million per year in additional funding for nonprofit science museums; and
  • Additional support for community-based violence intervention and re-entry grants.

Governor Cooper’s proposal sets the stage for the NC General Assembly to develop its state budget. The Senate is planning to vote on its version of the budget in late April, and the House will then develop its version in May. The legislative budget will likely be quite different from Governor Cooper’s proposal. Legislators are planning to include larger and more widespread tax cuts and significantly less spending. Once the House and Senate agree on a final legislative version of the budget, they will likely need to negotiate with Governor Cooper (who will probably veto the legislative budget) on areas of disagreement.
Many Nonprofits Eligible for Employee Retention Tax Credit
One of the significant changes in the COVID-19 relief bill that Congress approved in December was the extension and expansion of the Employee Retention Tax Credit (ERTC). The ERTC is a refundable tax credit (translation: nonprofits are eligible for it) that organizations can take if:
  • They partially or fully shut down operations when pandemic restrictions went into place; or
  • They had a decline in revenue. For 2020, nonprofits must have had a 50% drop in revenue for any quarter compared to the same quarter in the previous year. For 2021, nonprofits can access the ERTC if they had a 20% drop in revenue.

Note: this is a correction to last week’s policy update that indicated nonprofits must have met both of these criteria to be eligible for the ERTC. In fact, nonprofits can claim the ERTC if they meet either of these criteria.

Another significant change is that organizations that receive a PPP loan can now also claim ERTC as long as the credits are applied to payroll and operating expenses different from those covered by the PPP loan. Organizations can claim both through the extended December 31, 2021 deadline. Also, the ERTC is now a much larger tax credit, covering up to $7,000 per employee per quarter. The National Council of Nonprofits has an excellent analysis of the ways the ERTC could help nonprofits.
American Rescue Plan Includes Significant Funding that Could Assist Nonprofits
The American Rescue Plan Act, which President Joe Biden signed into law earlier this month includes $350 billion in federal aid for state and local governments. This includes $5.3 billion in support for the state of North Carolina and $3.8 billion for local governments throughout the state. State and local governments must spend this money; they can’t use it for tax cuts or put it in reserve funds. Notably, the American Rescue Plan allows state and local governments to use some of this money to provide financial assistance to nonprofits that have suffered economic harm due to COVID-19.

In his budget proposal, Governor Cooper recommended prioritizing state American Rescue Plan funds for:
  • Expanding high-speed internet access;
  • Investing in water, sewer, and housing infrastructure;
  • Promoting economic stability, inclusion, and growth in the public and private sectors (presumably this could include support for nonprofits); and
  • Supporting vulnerable populations (which could include investment in the work of nonprofits serving vulnerable populations).

State legislators are likely to come up with a plan to spend North Carolina’s share of this federal aid later this spring or summer. The Center is developing plans to advocate for legislators to use some of this money to invest in jobs in the nonprofit sector. A recent report from the Center for Civil Society Studies at Johns Hopkins University found that nonprofit employment has declined by 7.4% since February 2020 and estimates that it will take nearly two years for nonprofit employment to return to pre-pandemic levels. Look for more information and calls to action in the coming weeks.

For more information on key nonprofit provisions in the American Rescue Plan Act, check out the Center’s blog post.
Take Action: Help Eligible Community Members Get Vaccinated
Nonprofits are trusted messengers, and many North Carolinians are more likely to take important public health actions if the message comes from a familiar nonprofit organization rather than a government official. Your nonprofit can make a big difference in fighting the COVID-19 pandemic by sharing information about the availability, safety, and importance of vaccines and about the continuing importance of wearing masks and social distancing when in public. 

Yesterday, Governor Cooper announced that all North Carolina adults will be eligible to receive the COVID-19 vaccine beginning on April 7. Currently, North Carolina is vaccinating individuals with high-risk medical conditions, individuals living in group settings (including people experiencing homelessness and people living in correctional facilities), frontline essential workers (including social workers, public health workers, clergy, homeless shelter staff, veterinarians, college and university instructors and support staff, and workers in stores that sell groceries and medicine), educators, school personnel, child care workers, health care workers, long-term care staff and residents, and people 65 and older.

The NC Department of Health and Human Services (DHHS) has partnered with the NC Counts coalition to create the Healthier Together initiative to promote COVID-19 vaccine equity in North Carolina. Among other things, Healthier Together will provide grants to community-based nonprofits to help promote and facilitate vaccinations among individuals who are Black, Indigenous, and People of Color (BIPOC) and from other historically marginalized populations.

DHHS is also encouraging nonprofits and other community organizations to help promote the federally-supported mass vaccination site in Greensboro and to help schedule individuals from historically marginalized populations and communities of color for vaccine appointments there. Specifically, nonprofits can:

1. Promote the COVID-19 call center and other methods for scheduling appointments. 
  • COVID-19 Call Center: Appointments for the Greensboro Four Seasons location may be scheduled by phone (888-675-4567) through the COVID-19 Help Center in English and Spanish. Call center agents can also answer common questions about the vaccine.  
  • Hispanic Federation: Hispanic Federation can help Spanish speakers from historically marginalized populations schedule their appointments at the Greensboro Four Seasons location by phone in Spanish (844-432-9832), from 9 am to 5 pm, Monday to Friday.  

2. Schedule appointments for community members using the Acuity Scheduling Tool.  
For those interested in directly scheduling for community members, DHHS recommends developing a list of community members who are eligible and want to receive the vaccine to assure readiness for outreach and scheduling when appointments open up. Volunteers can use the Acuity Scheduling Tool to schedule eligible individuals from historically marginalized populations. 
  • The password to access the scheduling tool for appointments: Gu1lf0rdC0unty (0s are zeros).
  • DHHS recommends watching this recorded training on how to use the Acuity scheduling tool before you start contacting individuals to schedule appointments and to attempt to schedule the earliest available appointment that works for each individual.
NC House Approves Improvements to Unemployment Laws
Yesterday, the NC House of Representatives unanimously approved a bill (S.114) that would prevent increases in unemployment insurance (UI) costs for nonprofits and businesses that pay state unemployment tax (SUTA). The bill would keep the base rate for SUTA at 1.9% for 2021. Without this change, the tax rate would increase to 2.4% this year. Businesses and many nonprofits pay SUTA quarterly. Their tax rate is a combination of the base rate and their experience rating, which is based on the history of UI claims by their employees.

Unlike the version of the bill passed by the Senate earlier this month, the House version does not extend the period when employers’ accounts (including those of nonprofits that elect to reimburse the state for UI claims rather than pay SUTA) will not be charged for COVID-related UI claims. Legislators realized that this extension was unnecessary since Governor Cooper has already authorized it by executive order. Governor Cooper is expected to sign the bill into law within the next week.
NC House Bill Would Amend State Constitution to Create Independent Redistricting Process
A bill (H.B. 426) filed in the NC House of Representatives yesterday would place a state constitutional amendment on the November 2022 ballot to require an independent process for drawing North Carolina’s congressional and state legislative districts. The bill also would create a citizens commission to draw these districts every 10 years based on criteria including keeping counties, municipalities, and communities of interest together and keeping districts contiguous and compact. 

Currently, state legislators develop North Carolina’s congressional and state legislative districts. Legislators from both parties (when they have been in the majority) have used gerrymandering to create districts that are largely non-competitive and that favor politicians from their own political party. Gerrymandering typically makes elected officials more responsive to political donors (who fund their primary campaigns) and less responsive to constituents and nonpartisan nonprofits in their districts. The Center supports a change to an independent redistricting process, which would strengthen nonprofits’ voices in public policy advocacy.
Remind Your Community: Don’t Miss Out on Federal Stimulus Payments
As part of the COVID relief package that was approved in December, most Americans were eligible for Economic Impact Payments – or stimulus payments – in the amount of $600 for each person in their household. The IRS has made direct deposits or issued checks for these stimulus payments, but many North Carolinians – particularly those with low incomes who don't typically file federal income tax returns and those with children – may not have received these payments or may not have received the full amount they are due. The IRS has a tool for individuals to check the status of their stimulus payments.

Individuals and families that did not receive their stimulus payments are eligible for a Recovery Rebate Credit, which they can claim by filing IRS Form 1040 and using line 30. The IRS has extended the filing deadline for individual income taxes through May 17. The Center strongly encourages nonprofits – particularly those serving North Carolinians with low incomes and those serving children – to help spread the word to ensure that those who did not receive their full Economic Impact Payments file a Form 1040 and use line 30 to request their stimulus payments.
Governor Cooper Eases Some COVID-19 Restrictions on Businesses and Nonprofits
On Tuesday, Governor Roy Cooper issued Executive Order No. 204, which eases COVID-related limits on occupancy at a variety of venues. Under the new executive order, several types of venues may now operate at up to 50% of capacity. These include:
  • Meeting, reception, and conference spaces;
  • Performance venues;
  • Entertainment facilities; and
  • Sports arenas and fields.

Other types of facilities may now open at 50% capacity, including:
  • Fitness and physical activity facilities; and
  • Pools.

Some types of facilities may now open at 100% capacity, including:
  • Museums and aquariums; and 
  • Retailers, including nonprofit thrift stores.

Face covering and social distancing requirements remain in place for all of these types of venues. The executive order takes effect at 5 p.m. today and continues through April 30.
New NC House Bill Would Allow Employers to Offer Exclusive Provider Benefit Plans
A new bill (H.B.373) introduced in the NC House of Representatives on Tuesday would allow many North Carolina employers to offer exclusive provider benefit (EPO benefit) plans for their employees. EPO benefit plans are typically less expensive than other health insurance plans and allow participants to use a limited network of local health care providers while paying the full cost for any out-of-network health services other than emergency care. An identical bill (S.228) was introduced in the NC Senate earlier this month. The Center regularly hears from nonprofits seeking ways to provide more affordable health coverage for their employees. The Center is continuing to research whether this legislation would provide a meaningful and affordable health coverage option for some nonprofits. 
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Nonprofit Policy Update is a weekly newsletter for current members of the North Carolina Center for Nonprofits. We track state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities. For more information, contact David Heinen, Vice President for Public Policy and Advocacy.