COVID-19 Legislative Recap

It's hard to believe that only 21 days separate the President’s signatures of the first federal legislative package and the third phase, known as the “Coronavirus Aid, Relief and Economic Security Act” or the “CARES Act.” Somewhere in that three-week period, Iowans saw a suspension of the legislature. Both state and federal lawmakers have taken swift steps to provide resources for the stabilization of an economy that is struggling to balance those needs with those of individual health.

Before the Iowa Legislature suspended the 2020 legislative session on Tuesday, March 17, they passed a series of provisions to ensure continuity of state government and to provide flexibility during their absence. The following steps were taken:

• Supplemental appropriation to the State Hygienic Laboratory for additional testing
• Additional money for Medicaid, Hawk-I and the Glenwood Resource Center
• Increased flexibility for Governor Reynolds to move money between budget items
• Allow Governor Reynolds access to 10% of the Economic Emergency Fund for COVID-19 related needs
• Waive the 180-day school year requirement for the year
• Extend state funding through the first two months of FY 2021 if needed There have so far been three phases of Coronavirus aid passed and signed at the federal level. Altogether, the three pieces of legislation have appropriated more than $2 trillion to address the ongoing pandemic.

3 Phases of Coronavirus Legislation

Signed on Friday, March 6, the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074) appropriated $8.3 billion with the majority to support vaccine development, research and medical equipment stockpiles. The legislation also provided dollars for telehealth medicine and expanded capacity for existing loans through the Small Business Administration.

On Wednesday, March 18, President Trump signed the Families First Coronavirus Response Act (H.R.6201), which addressed or provided the following:

• $400 million for nutrition programs, with the majority going to the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
• $1 billion for unemployment benefits for those directly impacted by COVID-19 and provides relief to states that have exhausted unemployment benefits. Sole proprietors, self-employed and independent contractors were provided the option to apply for refundable tax credits if impacted directly by COVID-19.
• Requires employers with fewer than 500 employees to provide two weeks of paid sick leave for those in isolation or caring for someone in isolation or experiencing symptoms, covered by tax credits for the employers
• Ensures free testing for COVID-19

The third phase of legislative aid was signed on Friday, March 27. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) provided more than $1.8 trillion in funding to address the impacts of this global pandemic. Among other things, the following key provisions were included:

• Paycheck Protection Program: a new $349 billion loan program established to support and encourage employers to keep employees on the payroll to receive loan forgiveness. Businesses under 500 employees, including sole proprietors, self-employed, independent contractors and 501c3 organizations are eligible.
• Economic Injury Disaster Loans (EIDLs): this existing loan program is expanded to nonprofits, including 501(c)(6) organizations, for loans limited to $2 million and personal guarantee requirements waived for $200,000 or less. Includes an optional $10,000 forgivable cash advance and can be used for payroll, paid leave, continuation of health care benefits, operating costs such as utilities, mortgage and rent payments among other obligations that cannot be met due to revenue losses.
• Additional $17 billion for current SBA loans to cover six months of payment
• $500 billion for loan programs and Federal Reserve credit facilities, including but not limited to air carriers, air maintenance, cargo air carriers and business critical to national security. Businesses, states and municipalities that meet the requirements may be eligible.
• Direct payments to taxpayers equal to $1,200 per individuals ($2,400 join return) plus $500 per child, phased out for incomes above $75,000 ($150,000 joint).
• Extends unemployment insurance by 13 weeks and includes a four-month enhancement of benefits. States have the option to agree to an additional $600 per worker, per week unemployment compensation payment. Additionally, unemployment insurance benefits were extended to sole proprietors, self-employed and independent contractors.

The nearly 300-page bill includes modifications for tax provisions, including an employee retention credit, delay of payroll tax payments and a temporary excise tax exception for alcohol used to produce hand sanitizer through 2020. Modifications or delays related to pension contributions, banking relief, mortgage forbearance, credit reporting and student loans are included.

The CARES Act provides $150 billion to states and local governments and $340 billion in new federal spending for FY 2020. This is all in addition to the health care provisions. It may be confusing to know what programs apply to your business. It depends on the type of entity, which we’ve broken down for you here.

For summary information about the CARES Act, the following links provide excellent information for businesses and individuals looking for answers:

• U.S. Chamber of Commerce
• The Tax Foundation

The Greater Des Moines Partnership hosted the U.S. Chamber on an April 1 webinar to do an overview of all federal law changes. That webinar was recorded and can be found here.

As changes continue to be implemented by government at all levels, The Partnership is tracking the updates you need to know at DSMpartnership.com/covid-19 with a page decided specifically to policy updates.