December 21, 2020
Note: Lawmakers will vote on the giant Omnibus bill in two chunks. Four fiscal 2021 appropriations measures — including Defense, Commerce-Justice-Science, Homeland Security and Financial Services are in one bill, and the rest of the appropriations bills will be combined into a second package with coronavirus aid.
First, from the National Council we have this brief update re: the Omnibus package provisions (federal budget appropriations plus coronavirus provisions) of interest to mh and sud providers and care recipients:
– Mental Health Services Block Grant ($1.65B), of which, no less than 50% of funds shall be directed to behavioral health providers
– Substance Abuse and Prevention Treatment Block Grant ($1.65B)
– Certified Community Behavioral Health Clinics ($600M)
– Suicide Prevention Programs ($50M)
– Project AWARE ($50M) to support mental health once children return to school
– Emergency Grants to States ($240M)
– Tribes ($125M) out of the amounts above
Other Provisions of Interest to NYS Council members include (but are not limited to):
Health Resources and Services Administration (HRSA) – The bill includes $7.5 billion for HRSA, which is $151 million above the 2020 enacted level. The amount includes:
o $1.7 billion for the Health Centers program, an increase of $57 million.
o $2.4 billion, an increase of $35 million, for the Ryan White HIV/AIDS program.
o $102 million in Health Centers and $105 million in the Ryan White HIV/AIDS program to reduce new HIV infections by 90 percent in 10 years.
o $1.2 billion, an increase of $30 million, for HRSA’s Bureau of Health Professions programs to support the medical workforce.
o $975 million, an increase of $32 million, for programs to improve maternal and child health.
o $286 million for the Title X Family Planning program.
FCC Broadband Grants
- $300 million broadband deployment program to support broadband infrastructure deployment to areas lacking broadband, especially rural areas. The grants would be issued to qualifying partnerships between state and local governments and fixed broadband providers. Priority for grants would be given to networks that would reach the most unserved consumers.
FCC COVID-19 Telehealth program
Section 903 appropriates an additional $250 million to the FCC for its COVID-19 Telehealth Program authorized under the CARES Act. It also puts in place new transparency obligations for the program surrounding the FCC’s review of applications, and directs the Commission to ensure, to the extent feasible, that all states benefit from the program.
Extension of Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations.
Extends through March 14, 2021 a provision in the CARES Act which amended the Families First Coronavirus Response Act to provide federal support to cover 50% of the costs of unemployment benefits for employees of state and local governments and non-profit organizations.
The remainder of this document relates to the continuation of the Paycheck Protection Program and Other Small Business Support
Title I: Continuing the Paycheck Protection Program and Other Small Business Support
• Requires the SBA Administrator to establish regulations to carry out this title no later than 10 days after enactment of this title.
Section 304: Additional Eligible Expenses.
• Makes the following expenses allowable and forgivable uses for Paycheck Protection Program funds:
o Covered operations expenditures. Payment for any software, cloud computing, and other human resources and accounting needs.
o Covered property damage costs. Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
o Covered supplier costs. Expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
o Covered worker protection expenditure. Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.
Allows loans made under PPP before, on, or after the enactment of this act to be eligible to utilize the expanded forgivable expenses except for borrowers who have already had their loans forgiven.
Section 05: Hold Harmless.• Provides that a lender may rely on any certification or documentation submitted by a borrower for an initial or second draw PPP loan and that no enforcement action may be taken against the lender and the lender shall not be subject to any penalties relating to loan origination or forgiveness if (1) the lender acts in good faith relating to loan origination or forgiveness; and (2) all relevant federal, state, local and other statutory and regulatory requirements are satisfied.
Section 306: Selection of Covered Period for Forgiveness.• Allows the borrower to elect a covered period ending at the point of the borrower’s choosing between 8 and 24 weeks after origination.
Section 307: Simplified Application.
• Creates a simplified application process for loans under $150,000 such that:
o A borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the covered loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The borrower must also attest that borrower accurately provided the required certification and complied with Paycheck Protection Program loan requirements. SBA must establish this form within 24 days of enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Additionally, borrowers are required to retain relevant records related to employment for four years and other records for three years. The Administrator may review and audit these loans to ensure against fraud.
o At the discretion of the borrower, the borrowers may complete and submit demographic information for all PPP loans.
o The SBA must submit to the Senate and House Small Business Committees a report 45 days after enactment detailing their review and forgiveness audit plan to mitigate risk of fraud and provide monthly reviews and audit updates thereafter.
o Applies to loans made before, on, or after the date of enactment, including the forgiveness of the loan.
Section 308: Specific Group Insurance Payments as Payroll Costs.
Clarifies that other employer-provided group insurance benefits are included in payroll costs. This includes, group life, disability, vision, or dental insurance.
Applies to loans made before, on, or after the date of enactment, including the forgiveness of the loan.
Section 309: Demographic Information.
Section 310: Clarification of and Additional Limitations on Eligibility.
Clarifies that a business or organization that was not in operation on February 15, 2020 shall not be eligible for an initial PPP loan and a second draw PPP loan.
Prohibits eligible entities that receive a grant under the Shuttered Venue Operator Grants from obtaining a PPP loan.
Section 311: Paycheck Protection Program Second Draw Loans.
Creates a second loan from the Paycheck Protection Program, called a “PPP second draw” loan for smaller and harder-hit businesses, with a maximum amount of $2 million.
Eligibility. In order to receive a Paycheck Protection Program loan under this section, eligible entities must:o Employ not more than 300 employees;
o Have used or will use the full amount of their first PPP; and
o Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Provides applicable timelines for businesses that were not in operation in Q1, Q2, and Q3, and Q4 of 2019. Applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020.
Eligible entities must be businesses, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.
Ineligible entities include: entities listed in 13 C.F.R. 120.110 and subsequent regulations except for entities from that regulation which have otherwise been made eligible by statute or guidance, and except for nonprofits and religious organizations; entities involved in political and lobbying activities including engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public document, entities affiliated with entities in the People’s Republic of China; registrants under the Foreign Agents Registration Act; and entities that receive a grant under the Shuttered Venue Operator Grant program.
• Loan terms. In general, borrowers may receive a loan amount of up to 2.5X the average monthly payroll costs in the one year prior to the loan or the calendar year. No loan can be greater than $2 million.
o Seasonal employers may calculate their maximum loan amount based on a 12-week period beginning February 15, 2019 through February 15, 2020.o New entities may receive loans of up to 2.5X the sum of average monthly payroll costs.
o Entities in industries assigned to NAICS code 72 (Accommodation and Food Services) may receive loans of up to 3.5X average monthly payroll costs.
o Businesses with multiple locations that are eligible entities under the initial PPP requirements may employ not more than 300 employees per physical location.
o Waiver of affiliation rules that applied during initial PPP loans apply to a second loan.
o An eligible entity may only receive one PPP second draw loan.
o Fees are waived for both borrowers and lenders to encourage participation.
o For loans of not more than $150,000, the entity may submit a certification attesting that the entity meets the revenue loss requirements on or before the date the entity submits their loan forgiveness application and non-profit and veterans organizations may utilize gross receipts to calculate their revenue loss standard.
Loan forgiveness. Borrowers of a PPP second draw loan would be eligible for loan forgiveness equal to the sum of their payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the covered period. The 60/40 cost allocation between payroll and non-payroll costs in order to receive full forgiveness will continue to apply.
Lender eligibility. A lender approved to make loans under initial PPP loans may make covered loans under the same terms and conditions as the initial loans.
Lender compensation. The Administrator is authorized to reimburse a lender by a tiered structure: For loans up to $50,000, the lender processing fee will be the lesser of 50 percent of the principal amount or $2,500. For loans between $50,000 and $350,000, the lender fee will be five percent. For loans $350,000 and above, the lender fee will be three percent.
Guidance to prioritize underserved communities. Directs the Administrator to issue guidance addressing barriers to access to capital for underserved communities no later than 10 days after enactment.
Standard Procedures. Directs the SBA to allow lenders to approve loans made under this paragraph utilizing existing program guidance and standard operating procedure, to the maximum extent possible, as the standard SBA 7(a) program.
Churches and religion organizations. Expresses the sense of Congress that the Administrator’s guidance clarifying the eligibility of churches and religious organizations was proper and prohibits the application of regulations otherwise rendering ineligible businesses principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs. Codifies that the prohibition on eligibility in 13 CRF 120.110(k) shall not apply for initial and second draw loans.
Application of Exemption Based on Employee. Extends existing safe harbors on restoring FTE and salaries and wages. Specifically, applies the rule of reducing loan forgiveness for the borrower reducing the number of employees retained and reducing employees’ salaries in excess of 25 percent. Allows the SBA and Treasury Department to jointly modify any date in section 7A(d) consistent with the purposes of the Paycheck Protection Program.
Section 312: Increased Ability for Paycheck Protection Program Borrowers to Request an Increase in Loan Amount Due to Updated Regulations.
• Requires the Administrator to release guidance to lenders within 17 days of enactment that allows borrowers who returned all or part of their PPP loan to reapply for the maximum amount applicable so long that they have not received forgiveness. Additionally, this section allows borrowers whose loan calculations have increased due to changes in interim final rules to work with lenders to modify their loan value regardless of whether the loan has been fully disbursed, or if Form 1502 has already been submitted.