November 12, 2021
In this issue...
Legislators will vote on state budget next week
U.S. House approves bipartisan infrastructure legislation
U.S. House to vote on $1.85 trillion federal spending plan next week
Federal court temporarily halts OSHA vaccination requirement for large employers 
Nonprofits can help encourage children to be vaccinated for COVID-19
New law will prevent unemployment tax increase for some nonprofits
Legislators Will Vote on State Budget Next Week
After weeks of negotiations, state legislative leaders have been unable to reach an agreement with Governor Roy Cooper on the final version of the state budget for FY2021-23 (S.105). Instead of passing a consensus budget, the NC Senate and NC House of Representatives plan to vote on a final legislative budget next week. The details of the budget will likely be released on Monday, with the Senate voting on Tuesday and Wednesday and the House voting on Wednesday and Thursday. Presuming both chambers approve the budget, Governor Cooper will have three options: (1) sign the budget into law; (2) wait 10 days and allow it to become law without his signature; or (3) veto the budget.

If Governor Cooper vetoes the budget, it could still become law if three-fifths of the members of both the House and Senate agree to override his veto. If he vetoes it and the House or Senate is unable to override his veto, legislators could pass a series of mini-budgets to enact non-controversial parts of the spending plan. A full budget would be preferable to mini-budgets for many nonprofits, since mini-budgets would likely exclude much of the hundreds of millions of dollars of nonprofit funding that was included in the versions of the budget passed by the House and Senate this summer.
U.S. House Approves Bipartisan Infrastructure Legislation
Last Friday, the U.S. House of Representatives passed the Infrastructure Investment and Jobs Act. The U.S. Senate approved this $1 trillion bipartisan bill in August, and President Joe Biden plans to sign it into law on Monday. The legislation will provide about $8.7 billion of infrastructure funding for North Carolina, including $7.2 billion for highway projects, $457 million for bridge repairs, $911 million for public transit, $109 million for electric vehicle charging, and $100 million for broadband access. These infrastructure investments should improve transportation, Internet access, and availability of green energy resources for nonprofits and the communities they serve.

The bill also retroactively ends the Employee Retention Tax Credit (ERTC) on September 30, three months earlier than the scheduled expiration date under the American Rescue Plan Act. The early expiration of this refundable payroll tax credit could mean less financial relief for some nonprofits.
U.S. House to Vote on $1.85 Trillion Federal Spending Plan Next Week
Next week, the U.S. House of Representatives will vote on a spending plan to implement President Biden’s “Build Back Better” agenda. The $1.85 trillion plan would include a wide variety of investments in federal programs, including:
  • Continuing the expanded Child Tax Credit ($3,600 per child under age 6 and $3,000 per child aged 6-18) for one year, along with permanent refundability of the tax credit. 
  • Funding for universal pre-K for young children for the next six years.
  • Establishing four weeks of paid family and medical leave, which would be subsidized by the federal government, beginning in 2024. This provision was added last week.
  • Funding for Medicaid expansion in North Carolina and the other 10 states that have opted out of this provision of the Affordable Care Act. This would provide health coverage for more than half a million North Carolinians in the health care coverage gap (who make too much to qualify for Medicaid but not enough to receive health care subsidies).
  • Limiting child care costs to 7% of income for working families earning up to 250% of state median income for the next six years.
  • Expanding the earned income tax credit for childless workers extended for one year. 
  • Providing $3.2 billion in additional funding for national service programs, as well as $600 million for AmeriCorps.
  • Expanding Medicaid home care services for seniors and people with disabilities. 
  • Providing $150 billion toward public housing, rental assistance, down payment support, and "building more than 1 million new affordable rental and single-family homes." 
  • Investing $555 billion for climate programs, including $320 billion expanded tax credits for clean energy. 

The National Council of Nonprofits has a useful synopsis of key provisions in the legislation for nonprofits.

If the bill passes the House as expected, the Senate could take it up later this month. The House originally planned to vote on the bill last week but delayed the vote until congressional staff can provide an accurate estimate for the cost of the bill. Because the legislation is being passed using the budget reconciliation process, it only needs a simple majority vote in both the U.S. Senate and the U.S. House of Representatives, meaning it can pass with only Democrats in Congress voting for it.
Federal Court Temporarily Halts OSHA Vaccination Requirement for Large Employers
Last Saturday, a three-judge panel in a federal appellate court issued a temporary injunction stopping the implementation of the new U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard on COVID-19 vaccinations. The rule would require employers with 100 or more employees – including many large nonprofits – to require their employees to be vaccinated for COVID-19 or to be tested at least once a week. Yesterday, two federal agencies issued emergency rules that will require many nonprofits to require their employees to be fully vaccinated for COVID-19 by January 4, 2022.

OSHA is expected to challenge the injunction in court, so it is still quite possible that the rule could go into effect early next year. Last week, OHSA published a three-page summary of the new rule, along with FAQs for employers. If it is ultimately allowed to take effect, the newly published rule will apply to employers with 100 or more employees, regardless of whether some of these employees are part-time or work offsite. The OSHA rule would require unvaccinated employees (e.g., those with medical or religious exemptions) to wear masks in the workplace and to be tested weekly (if they are regularly in the workplace or in contact with others for work) or within seven days of returning to the workplace or being in contact with others for work (if they regularly work remotely). The National Council of Nonprofits has an analysis of the standard from the perspective of nonprofit employers.

Also last week, the Centers for Medicare & Medicaid Services (CMS) issued an Emergency Temporary Standard requiring workers in most Medicaid and Medicare reimbursed health care facilities, including hospitals and other nonprofit healthcare providers, to be vaccinated for COVID-19. CMS has also published FAQs for employers. The CMS rule does not require unvaccinated employees (e.g., those with medical or religious exemptions) to be tested weekly, although covered nonprofits can provide for testing requirements in their organizational COVID-19 vaccination policies. Ten states filed a lawsuit this week challenging the CMS regulation also.

Both the OSHA and CMS rules allow for exemptions for employees who can’t be vaccinated for medical reasons or because of sincerely held religious beliefs and for employees who work exclusively remotely.

With these new federal requirements, more nonprofits are asking whether they should require their staff to get vaccinations and, if so, how they should implement vaccination policies. To help your nonprofit answer these questions, the Center has an analysis of vaccination considerations for nonprofits, including tips to help your organization develop a COVID-19 vaccination policy for your employees.
Nonprofits Can Help Encourage Children to Be Vaccinated for COVID-19
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 spreading information about the availability, safety, and importance of vaccines and about the continuing importance of wearing masks and social distancing when in public.

Earlier this week, North Carolina opened vaccines to children between the ages of 5 and 11. Now is a great time for nonprofits that provide services to children and families to help encourage children to be vaccinated for COVID-19. The NC Department of Health and Human Services (DHHS) has developed tools that can help nonprofits spread the word about vaccines, including a search tool for local vaccination sites, talking points, and flyers.
New Law Will Prevent Unemployment Tax Increase for Some Nonprofits
On Wednesday, Governor Cooper signed into law a bill (S.311) that prevents increases in unemployment insurance (UI) costs for nonprofits and businesses that pay state unemployment tax (SUTA) next year. The new law keeps the base rate for SUTA at 1.9% for 2022. Without this change, the tax rate would have increased to 2.4% next 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.
The Center 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. Don’t miss out – become a member to ensure you continue receiving these updates along with many other valuable benefits.
Not a Center Member? Join now.

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.