July 31, 2020
Senate Republicans Put Down Markers with Coronavirus Relief Bills
Senate Republicans introduced a series of bills that collectively make up their proposals for the next coronavirus response package. The measures were made public after a week’s delay due to intra-party disagreements on the elements that should be included in the bills. The proposals follow comprehensive bills proposed by House and Senate Democrats and mark the start of intense negotiations on a final package. Now that there are markers from the House and Senate, negotiators can begin to work out a deal before the August recess, scheduled to begin August 7.
Key provisions contained in the proposals include:
Higher Education Emergency Relief Fund
While there are differences between the House, Senate Democratic, and Senate Republican proposals for higher education relief, they are all supportive of increased funding for higher education, ensuring that students can pay for tuition and other emergency needs, and providing institutions flexibility in how they can use federal funds to respond to the coronavirus. It is good news that all three bills include the same language stating that institutions may use funds to:
The Senate Republicans’ Health, Economic Assistance, Liability Protection and Schools (HEALS) Act includes $105 billion for education, of which $29 billion is allotted to higher education. Institutions would receive $24.65 billion using a formula based on 90 percent Pell full-time equivalent (FTE) and 10 percent non-Pell FTE. Additional funds of $2.9 billion are available for Historically Black Colleges and Universities and Minority-Serving Institutions and $1.45 billion is set aside for institutions that otherwise do not qualify for a grant or that have significant need because of COVID-19.
However, for institutions that paid the endowment tax in 2019, the bill limits their funding to half of what the formula would otherwise allot to them and requires those funds to be used only for student grants. Because the endowment tax only applies to private colleges and universities, this limitation would also only apply to private institutions, constituting a direct attack on the private, nonprofit sector.
Congress will now need to find agreement on funding levels among the three proposals from Senate and House Democrats and Senate Republicans, which range from $29 billion to $132 billion, the formula to determine distribution (headcount or FTE), and how to address student eligibility.
Liability Protection
As part of their package of stimulus proposals, Senate Republicans also introduced the SAFE TO WORK Act, which would establish coronavirus liability protections for health care providers and businesses, including educational institutions. Senate Republicans are expected to push for inclusion of the SAFE TO WORK Act in any final stimulus package that emerges.
Under the bill, institutions would be shielded from personal injury suits unless the plaintiff proves by clear and convincing evidence that the institution: (1) was not making reasonable efforts to comply with applicable government standards; and (2) engaged in gross negligence or willful misconduct. Plaintiffs would also have to establish that the actual exposure to coronavirus caused the personal injury.
In addition, the bill would preempt state laws, unless such laws impose stricter limits on liability or damages for personal injury suits related to coronavirus. The bill also includes provisions that would place limits on compensatory and punitive damages, discovery, and frivolous claims related to coronavirus.
The liability safe harbor in the Senate proposal would apply retroactively to allegations of personal injury that occurred on or after December 1, 2019, and would expire October 1, 2024. Although many Democrats remain opposed to limiting coronavirus liability, Senate Majority Leader Mitch McConnell (R-KY) has made clear that he will not agree to a final stimulus package without the inclusion of a liability shield for businesses, health care, and schools. Reportedly, the Trump Administration continues to favor inclusion of liability protections in the final package, but is willing to drop the liability provisions in order to secure a deal.
Employer Provisions
Another GOP bill, the Safely Back to School and Back to Work Act, includes a number of provisions focused on employers and employees that are important to higher education. One of the provisions is a new refundable Safe and Healthy Workplace payroll tax credit for up to 50 percent of an employer’s qualified protection expenses (testing, equipment, cleaning supplies) for protecting employees from the spread of the disease.
Qualified expenses can’t exceed a cap based on the number of employees. The cap is equal to $1,000 for each of the first 500 employees, plus $750 for each employee between 500 and 1,000, plus $500 for each employee over 1,000. The bill would also provide increased unemployment relief for nonprofits and governmental entities to address those who self-insure. The CARES Act intended to provide payments to states to cover 50 percent of reimbursements to nonprofits, government entities, and native tribes that self-insure. The Senate GOP bill increases the percentage to 75 percent.
Related to this, the Protecting Nonprofits from Catastrophic Cash Flow Act that passed in the House and Senate several weeks ago and is awaiting the President’s signature, will reverse the Department of Labor guidance requiring states to bill nonprofits for 100 percent of their unemployment insurance costs, by allowing states to waive 50 percent of the initial billing amounts. This would allow states to bill 50 percent, and then nonprofits can request reimbursement for the same amount.
Key provisions contained in the proposals include:
Higher Education Emergency Relief Fund
While there are differences between the House, Senate Democratic, and Senate Republican proposals for higher education relief, they are all supportive of increased funding for higher education, ensuring that students can pay for tuition and other emergency needs, and providing institutions flexibility in how they can use federal funds to respond to the coronavirus. It is good news that all three bills include the same language stating that institutions may use funds to:
This language is a vast improvement over the more limited use of funds in the CARES Act. The bill would also allow institutions to distribute any unused CARES funds in accordance with the new bill’s language.“… defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff training, and payroll).”
The Senate Republicans’ Health, Economic Assistance, Liability Protection and Schools (HEALS) Act includes $105 billion for education, of which $29 billion is allotted to higher education. Institutions would receive $24.65 billion using a formula based on 90 percent Pell full-time equivalent (FTE) and 10 percent non-Pell FTE. Additional funds of $2.9 billion are available for Historically Black Colleges and Universities and Minority-Serving Institutions and $1.45 billion is set aside for institutions that otherwise do not qualify for a grant or that have significant need because of COVID-19.
However, for institutions that paid the endowment tax in 2019, the bill limits their funding to half of what the formula would otherwise allot to them and requires those funds to be used only for student grants. Because the endowment tax only applies to private colleges and universities, this limitation would also only apply to private institutions, constituting a direct attack on the private, nonprofit sector.
Congress will now need to find agreement on funding levels among the three proposals from Senate and House Democrats and Senate Republicans, which range from $29 billion to $132 billion, the formula to determine distribution (headcount or FTE), and how to address student eligibility.
Liability Protection
As part of their package of stimulus proposals, Senate Republicans also introduced the SAFE TO WORK Act, which would establish coronavirus liability protections for health care providers and businesses, including educational institutions. Senate Republicans are expected to push for inclusion of the SAFE TO WORK Act in any final stimulus package that emerges.
Under the bill, institutions would be shielded from personal injury suits unless the plaintiff proves by clear and convincing evidence that the institution: (1) was not making reasonable efforts to comply with applicable government standards; and (2) engaged in gross negligence or willful misconduct. Plaintiffs would also have to establish that the actual exposure to coronavirus caused the personal injury.
In addition, the bill would preempt state laws, unless such laws impose stricter limits on liability or damages for personal injury suits related to coronavirus. The bill also includes provisions that would place limits on compensatory and punitive damages, discovery, and frivolous claims related to coronavirus.
The liability safe harbor in the Senate proposal would apply retroactively to allegations of personal injury that occurred on or after December 1, 2019, and would expire October 1, 2024. Although many Democrats remain opposed to limiting coronavirus liability, Senate Majority Leader Mitch McConnell (R-KY) has made clear that he will not agree to a final stimulus package without the inclusion of a liability shield for businesses, health care, and schools. Reportedly, the Trump Administration continues to favor inclusion of liability protections in the final package, but is willing to drop the liability provisions in order to secure a deal.
Employer Provisions
Another GOP bill, the Safely Back to School and Back to Work Act, includes a number of provisions focused on employers and employees that are important to higher education. One of the provisions is a new refundable Safe and Healthy Workplace payroll tax credit for up to 50 percent of an employer’s qualified protection expenses (testing, equipment, cleaning supplies) for protecting employees from the spread of the disease.
Qualified expenses can’t exceed a cap based on the number of employees. The cap is equal to $1,000 for each of the first 500 employees, plus $750 for each employee between 500 and 1,000, plus $500 for each employee over 1,000. The bill would also provide increased unemployment relief for nonprofits and governmental entities to address those who self-insure. The CARES Act intended to provide payments to states to cover 50 percent of reimbursements to nonprofits, government entities, and native tribes that self-insure. The Senate GOP bill increases the percentage to 75 percent.
Related to this, the Protecting Nonprofits from Catastrophic Cash Flow Act that passed in the House and Senate several weeks ago and is awaiting the President’s signature, will reverse the Department of Labor guidance requiring states to bill nonprofits for 100 percent of their unemployment insurance costs, by allowing states to waive 50 percent of the initial billing amounts. This would allow states to bill 50 percent, and then nonprofits can request reimbursement for the same amount.
For more information, please contact:
Stephanie Giesecke