November 5, 2021
In this issue...
New federal rules will require many nonprofit employees be vaccinated for COVID-19
U.S. House of Representatives set to vote on $1.85 trillion federal spending plan 
U.S. House could pass infrastructure bill today
Governor Cooper and legislators continue state budget negotiations
New state legislative and congressional districts could diminish nonprofits’ influence on public policy
Take 2 minutes to share information about job vacancies at your nonprofit
State legislative subcommittee to explore use of federal COVID-19 funds in North Carolina
NC General Assembly approves bill to prevent unemployment tax increase for some nonprofits
Learn more about exclusive provider organization health plans
New Federal Rules Will Require Many Nonprofit Employees Be Vaccinated for COVID-19
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:
  1. The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard requiring 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. OSHA also published a three-page summary of the new rule, along with FAQs for employers. The newly published rule applies to employers with 100 or more employees, regardless of whether some of these employees are part-time or work offsite. The OSHA rule requires 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 drafted an analysis of the standard from the perspective of nonprofit employers.
  2. The Centers for Medicare & Medicaid Services (CMS) issued an Emergency Temporary Standard requiring workers in most Medicaid and Medicare reimbursed health care facilities, including at hospitals and other nonprofit healthcare providers, to be vaccinated for COVID-19. CMS also has 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.

Both 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. Both rules are open for public comment through January 4, 2022. 

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 published an analysis of vaccination considerations for nonprofits, which includes tips to help your organization develop a COVID-19 vaccination policy for your employees.
U.S. House of Representatives Set to Vote on $1.85 Trillion Federal Spending Plan
Later today, the U.S. House of Representatives is scheduled to 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:
  • Continuation for one year of 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.
  • Four weeks of paid family and medical leave, beginning in 2024. This provision was added this 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.
  • Expansion of 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 prepared 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. Because it 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.
U.S. House Could Pass Infrastructure Bill Today
The U.S. House of Representatives is also planning to vote on the Infrastructure Investment and Jobs Act later today. The U.S. Senate approved this $1 trillion bipartisan bill in August. The bill would 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. It also would retroactively end 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.
Governor Cooper and Legislators Continue State Budget Negotiations
This week, state legislative leaders have continued negotiating with Governor Roy Cooper on the final version of the state budget for FY2021-23 (S.105). The main areas of disagreement between the Governor and legislative leadership appear to be funding for public schools, Medicaid expansion, individual and corporate income tax cuts, and pay raises for teachers and state employees. Legislative leaders said this week that the General Assembly could vote on a budget as soon as next week, regardless of whether they reach a compromise with Governor Cooper. 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. Otherwise, legislators could pass a series of mini-budgets to enact non-controversial parts of the spending plan.

The new budget could provide several million dollars in new funding for nonprofits. The Center has prepared a chart comparing various appropriations and provisions affecting nonprofits in the House-approved budget and the Senate-approved version. If legislators wind up using mini-budgets instead of passing a full budget, they likely will exclude much of the funding for nonprofits.
New State Legislative and Congressional Districts Could Diminish Nonprofits’ Influence on Public Policy
This week, the NC Senate and NC House of Representatives approved the maps that North Carolina will use for its congressional and state legislative districts for elections between 2022 and 2030. The House, Senate, and congressional maps were all approved in party-line votes. Under the state constitution, the Governor does not need to approve of redistricting legislation (meaning Governor Roy Cooper can’t veto the bills), so they become law immediately and will be used for the 2022 election. Redistricting analysts have noted that the vast majority of the new congressional and legislative districts will be non-competitive. In the past, the Center has expressed concerns that this type of gerrymandering (i.e. overly partisan redistricting plans) diminishes nonprofits’ influence on public policy because it tends to create non-competitive congressional and legislative districts and makes elected officials more responsive to their partisan political donors than to the nonpartisan nonprofits providing services in their districts.

The redistricting plans are likely to be challenged in both federal and state court in the near future. In fact, two nonprofits filed a lawsuit last Friday challenging the maps before they were even finalized.
Take 2 Minutes to Share Information About Job Vacancies at Your Nonprofit
Nonprofits in North Carolina and around the country are struggling to fill vacancies at their organizations. To help learn more about the sources of these problems and to try to develop policy solutions, the National Council of Nonprofits has launched a brief survey on the nonprofit workforce shortage. Please take two minutes to complete the survey.
State Legislative Subcommittee to Explore Use of Federal COVID Funds in North Carolina
Next Wednesday, a new subcommittee of the Joint Legislative Committee on Governmental Operations will hold its first meeting to discuss the use and distribution of federal COVID funding in North Carolina. State legislators and Governor Cooper have used a significant amount of the state’s funding from the CARES Act to support nonprofits’ programs and operations, and they are also likely to invest a significant portion of the state’s American Rescue Plan Act funding in the work of nonprofits. Potentially, the subcommittee will provide nonprofits an opportunity to share with policymakers what has worked and what could be improved about the prioritization and distribution of federal COVID funds to North Carolina nonprofits. The Center will keep you posted when there are opportunities for your nonprofit to make your voice heard.
NC General Assembly Approves Bill to Prevent Unemployment Tax Increase for Some Nonprofits
On Wednesday, both the NC Senate and NC House of Representatives unanimously approved 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 bill 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.
Learn More About Exclusive Provider Organization Health Plans
A new law that took effect this month allows North Carolina nonprofits and businesses to offer exclusive provider organization (EPO) health plans. EPO plans, which typically cost about 15% less than traditional health insurance, allow participants to receive medical services from a limited pool of health care providers. Some nonprofits that haven’t been able to afford health coverage for their employees in the past may be interested in considering offering EPO plans. Last week, NC Health News, a nonprofit news service, wrote an excellent overview of EPO plans, including clear explanations of how they differ from other types of health insurance plans and potential advantages and disadvantages of EPO plans for nonprofits and their employees. The Center encourages nonprofits that might be interested in EPO plans to read the article to get a better sense of whether this is the right type of arrangement for their organizations.
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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.