April 23, 2020 House passes $484 billion interim coronavirus relief package Includes $310 billion for PPP, $60 billion for disaster loans, $100 billion for hospitals and testing On April 23, the House passed by a vote of 388-5 the "Paycheck Protection Program and Health Care Enhancement Act" (H.R. 266), a $484 billion interim coronavirus relief measure that would provide $310 billion for the Small Business Administration's (SBA) now-exhausted Paycheck Protection Program (PPP), $60 billion for disaster loans through the Economic Injury Disaster Loan (EIDL) program, and an additional $100 billion for the Department of Health and Human Services (HHS), which includes $75 billion for health care provider relief and $25 billion to ramp up coronavirus testing. President Trump is expected to sign the bill soon. See attached the bill text, along with section-by-section summaries of the health care and non-health care provisions. Additional detail on program funding and related provisions is provided below. Paycheck Protection Program The additional $310 billion authorized for the Small Business Administration's Paycheck Protection Program includes $60 billion dedicated to underserved communities such as minority and rural businesses. Of that $60 billion, $30 billion is set aside for banks and credit unions with assets between $10 billion and $50 billion. The other $30 billion is reserved for community banks, credit unions and "community financial institutions" with assets of less than $10 billion. The bill defines community financial institutions as "minority depository institutions, certified development companies, microloan intermediaries, and state or federal credit unions." The PPP was originally funded with $349 billion in the $2.2 trillion CARES Act that the President signed March 27. However, within two weeks of the program's opening on April 3, the program had maxed out its funding after approving nearly 1.7 million loans, with some critics faulting the program for lending tens of millions of dollars to larger restaurant chains. The program allows businesses with 500 or fewer employees (with an exception allowing more than 500 employees for certain industries) to secure loans of up to two months of their average monthly payroll costs, plus 25% of that amount, to a maximum of $10 million. The loans are forgiven if the company maintains its employee and compensation levels, and if the proceeds are used to cover payroll costs and most mortgage interest, rent and utility costs. No more than 25% of the loan may be used for non-payroll expenses. Economic Injury Disaster Loan program The bill authorizes an additional $60 billion for the Small Business Administration's Economic Injury Disaster Loan (EIDL) program, $10 billion of which is reserved for the EIDL Advance program, which provides $10,000 grants that don't have to be repaid for businesses hurt by the pandemic. The bill also allows agricultural enterprises (as defined by section 18(b) of the Small Business Act) with up to 500 employees to receive EIDL grants and loans. The SBA's EIDL, which is usually intended for victims of disasters like tornadoes and wildfires, was made available on March 12 to businesses hurt by the coronavirus pandemic. Under the program, businesses with fewer than 500 employees (with exceptions for certain larger companies) that were operating as of January 31, 2020 — including cooperatives, sole proprietors and private nonprofits — can apply for a working capital loan of up to $2 million, at a rate of 3.75% for businesses and 2.75% for nonprofits, with a term of up to 30 years. For loans related to the pandemic, payments are deferred for one year, approval can be based on a credit score only, and borrowers don't have to prove they cannot get credit elsewhere. In addition, under the EIDL Advance program, applicants can get a $10,000 emergency grant within three days of applying, which does not have to be repaid. The CARES Act funded the EIDL Advance program with $10 billion, but it was quickly flooded with over 3 million applications for a total of $372 billion in requested funds, according to Sen. Ben Cardin (D-MD), ranking member on the Senate Small Business Committee. Cardin also said the SBA's application system for EIDL Advance loans was so overwhelmed that instead of three days, applicants have waited for weeks for loan approvals. Health care provider relief The bill authorizes an additional $75 billion to the Public Health and Social Services Emergency Fund administered by HHS, to be distributed to hospitals and health care providers for related expenses or lost revenue attributable to the coronavirus. The bill language mirrors the language in the CARES Act and supplements the $100 billion provided through the Act, of which $30 billion has already been allocated based on providers' share of 2019 Medicare fee-for-service (FFS) billing. Democrats have expressed frustration with the disbursement of these initial funds by HHS, with Minority Leader Schumer and other top Democrats urging in a letter to HHS Secretary Alex Azar to send additional funding out in a "more targeted manner," including to those providers hardest-hit and on the frontlines of the pandemic. The Administration has indicated they will direct some of the remaining $70 billion in CARES Act funding to providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans. Funding for COVID-19 testing The bill also authorizes $25 billion to the Public Health and Social Services Emergency Fund administered by HHS for expenses to "research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID-19 tests." The language in the bill represents a compromise on differing approaches to testing, boiling down to whether the approach should be at the national level or state driven. Leader Schumer and other top Democrats released a testing roadmap last week calling on "centralized leadership that only the Executive Branch can provide" and outlining how the administration should "rapidly increase and optimize COVID-19 testing … to manage this crisis." In his tweets, President Trump said "States, not the Federal Government, should be doing the Testing - But we will work with the Governors and get it done." The Problem Solvers Caucus also released Monday (April 20) a plan calling for "rapid and ubiquitous" testing as part of a broader "back to work" checklist. The language in the bill divides responsibility between the states and HHS. The $25 billion includes:
The bill also requires states to submit plans outlining how they will use the testing resources, detailing goals for the remainder of calendar year 2020 including number of tests needed, estimates of laboratory and testing capacity, and a description of how the resources may relate to potential easement of COVID-19 community mitigation policies. It also requires the HHS Secretary to submit reports to Congress on COVID-19 testing, diagnosis, hospitalization and deaths, disaggregated by demographic characteristics, geography, and other relevant factors. Additionally, it requires that the Secretary develop and report on a COVID-19 strategic testing plan to assist states in increasing their understanding of testing, address new and emerging technologies, and increase domestic testing capacity, including addressing issues with testing supplies and testing disparities across communities. Funding for state and local governments Although Democrats did not secure a requested $150 billion in aid to state and local governments, it is likely to be priority for future packages. President Trump recently indicated his support despite some Republican resistance, saying "it's very important" and "will probably be our next negotiation." Senators Bill Cassidy, M.D. (R-LA) and Bob Menendez (D-NJ), both members of the Senate Finance Committee, also announced on Sunday (April 19) a bipartisan approach to create a $500 billion fund to "help states and local governments respond to the current public health and economic crisis, while maintaining essential services." National Governors Association Chair Maryland Governor Larry Hogan has also called on Congress to appropriate an additional $500 billion. ———————————————
——————————————— H.R. BAI20329
Paycheck Protection Program Increase Act of 2020
Summary Hospital and Testing
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