Members of the North Carolina General Assembly made their way back to Raleigh this week to discuss how the state should spend the approximately $3.5 billion sent to North Carolina by the federal government through the CARES Act. Lawmakers in both the House and Senate decided not to appropriate the full amount sent to the state at this time, acknowledging that work would continue over the next few months, and the state would need to develop a round two funding package. Legislators in both chambers also agreed that the money used to fund the items in their proposed legislation would only come from the dollars provided by the federal government, staying away from using the dollars in the General Fund at this time. With the House and Senate passing their own versions of a relief bill, negotiations between the two chambers continue. However, a vote on the compromise proposal is expected later this afternoon.  

As of Thursday morning, in the state of North Carolina, there were 10,509 confirmed cases of COVID-19, 128,036 completed tests, 378 deaths, 546 current hospitalizations, and 98 of the state's 100 counties had seen confirmed coronavirus cases. As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.

For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.

Senate Spending Bill

Senate lawmakers passed their version of a COVID-19 relief package Wednesday evening after a two-part hearing in the appropriations committee earlier in the day. SB 704: COVID-19 Recovery Act. would establish a Coronavirus Relief Reserve to administer the funds provided to the state as well as a Department of Transportation (DOT) and Local Government Coronavirus Relief Reserve. Both the DOT and the local government relief funds would only receive their appropriations if they experience a revenue shortfall and the federal CARES Act guidance is amended to allow the use of federal dollars for revenue replacement purposes. If the guidance is amended, $300 million would be transferred to the DOT Coronavirus Relief Reserve and $150 million would go to the Local Government Coronavirus Relief Reserve. In total, the Senate's COVID-19 Recovery Act appropriates $1.2 billion to meet immediate needs throughout the state, including:

• $50 million to the Department of Public Safety (DPS) to be used for purchasing personal protective equipment (PPE) and other supplies and equipment needed to maintain health and safety. The funds would be sent to the North Carolina Healthcare Foundation, the North Carolina Senior Living Association, the North Carolina Medical Society, the State Highway Patrol, and the North Carolina National Guard.

• $6 million to be distributed equally among all six of the state’s food banks.

• $5 million would go to the North Carolina Community Health Centers Association to be distributed among its member health centers to cover the cost of health services provided during the COVID-19 emergency.

• $25 million would go to the Community College System Office to be allocated to community colleges across the state. The funds would cover the costs of moving to online education for students, facility cleanings, and other necessary expenses related to services needed to respond to the crisis.

• $42.4 million to the UNC System to cover the costs of moving coursework online, facility sanitation, and other services related to the impact of the crisis on institutional operations.

• $20 million and $15 million to Wake Forest University and Duke University, respectively, to conduct COVID-19-specific research, such as vaccine and antibody testing.

• $70 million to be used for the continuity of state government operations.

• $250 million would go to the Department of Information Technology (DIT) to purchase mobile Wi-Fi gateway router devices for tier one and tier two counties. 
• $70 million would go to the Department of Public Instruction (DPI).

• $9 million to DIT to fund the Growing Rural Economies with Access to Technology Fund, or G.R.E.A.T. Program.

• $25 million would go to the Department of Health and Human Services (DHHS) to be spent on testing, tracing, and trend analysis needs.

• $100 million would be distributed among each county that did not already receive funding directly from the Coronavirus Relief Fund (CRF) established through the CARES Act.

• $61 million to support rural and underserved communities that have been hit especially hard by the pandemic.

• $22 million to continue school nutrition programs across the state while students remain at home for the remainder of the school year.

The bill would also provide $125 million to fund a small business bridge loan program, similar to the bridge loan program set up by a coalition of the Golden LEAF Foundation and small business lenders including the Carolina Small Business Development Fund and the Rural Center back in March. The dollars would go to the Golden LEAF Foundation to assist in the coalition's work. The small business loans will have an interest rate of up to 4% for the first six months, a term length of 66 months, and require the businesses to submit in writing that the loan will be used for employee compensation and critical operating expenses. The maximum dollar amount for a loan would be $50,000.

SB 704 passed the Senate through an unanimous 48-0 vote. 

Senate Bill Policy Provisions

In addition to the $1.2 billion in funding, SB 704: COVID-19 Recovery Act includes a series of policy revisions aimed at reducing the regulatory burden felt by many throughout the state, and makes adjustments to current law to meet the changing, and unprecedented, needs of schools, businesses, and health care providers, just to name a few. 

The proposed Senate bill makes a number of changes to the state's education policies, including: 

• Provides a waiver for end-of-grade and end-of-course testing.

• Waives the requirement for the calculation and display of school report cards.

• Waives the requirement for the State Board of Education (SBE) to identify new low-performing schools and new continually low-performing schools for the 2019-2020 school year. The bill also waives the requirement to select a new school for the Innovative School District.

• Directs each public school unit to develop a Remote Instruction Plan for the upcoming 2020-2021 school year and submit it to the SBE by July 20.

• Moves the school year start date up one week to August 17.

• Modifies the minimum admission requirements for Educator Preparation Programs (EPPs) as well as clinical internship and pedagogy assessment requirements.

Regulatory flexibilities provided through SB 704 would include:

• Extends the validity of credentials issued by the DMV for six months, such as driver’s licenses, handicapped placards, and vehicle registrations.

• Allows notaries to use emergency video notarization.

• Extends the franchise, corporate income, and individual income tax payment deadline from April 15 to July 15.

• Allows employers to file attached claims for unemployment benefits, waives the week-long waiting period for unemployment applicants, and increases the weekly benefit to $400.

To help meet the needs of the state's healthcare providers and system, the bill would:

• Allow flexibility to the North Carolina Medical Board and the North Carolina Board of Nursing for Quality Improvement Plans to reduce the number of meetings required between a physician and a physician assistant or nurse practitioner.

• Give the State Treasurer the authority to defer State Health Plan premium or debt payments during the state of emergency.

• Provide Medicaid coverage to uninsured individuals for COVID-19 testing during the declared nationwide public health emergency.

• Provide immunity from civil liability to health care providers and health care facilities across the state during the COVID-19 public health emergency.

House Spending Package

After a full day of committee meetings Wednesday, House lawmakers combined a handful of individual policy and funding bills into one 98-page proposal that would provide modifications to current law and a variety of funding allocations in response to the COVID-19 pandemic. Originally, the proposal was divided up into five individual bills: HB 1034: Small Business Emergency Loans, HB 1035: Education Omnibus/COVID-19, HB 1037: COVID-19 Health Care Working Group Policy Rec., and HB 1038: Omnibus COVID-19 Response Funds. After passing through the appropriate policy committees and a hearing in the rules committee, the bills were combined into the final proposal, HB 1043: Pandemic Response Act. The provisions that make up the final $1.71 billion proposal include: 

• $80 million to DPI to fund school nutrition services to students while they remain home for the rest of the school year.

•  Approximately $73 million to provide electronic devices and increased internet connectivity to students and school personnel throughout the sate.

• $35 million to DPI to be used for school support personnel to provide students with additional physical and mental health services.

• $70 million to fund supplemental summer learning programs.

• $25 million would go to the Community College System Office to be allocated to community colleges across the state to cover the costs of moving to online education for students. It would also help cover facility cleanings and other necessary expenses related to services needed to respond to the crisis.

• Over $48 million to the UNC System to cover the costs of moving coursework online, facility sanitation, and other services related to the impact of the crisis on institutional operations.

• $25 million each to Duke University Human Vaccine Institute, the UNC Gillings School of Global Public Health, the ECU Brody School of Medicine, and the Wake Forest School of Medicine to conduct COVID-19-specific research such as vaccines and antibody testing.

• $6 million would be allocated equally among all six of the state’s food banks.

• $25 million to DHHS to provide support for behavioral health services.

• $40 million to cover additional costs related to the Medicaid program that have been incurred during the pandemic.

• $50 million to be allocated to DHHS and the Division of Emergency Management to purchase PPE and other supplies and equipment needed to protect public health and safety.

• $25 million to DHHS to be spent on testing, tracing, and trend analysis.

• $25 million to DHHS to support rural and underserved communities hit especially hard by the COVID-19 pandemic.

• $19 million to be used to provide food, safety, shelter and child care.

• $1.5 million to DHHS to provide a directed grant to NC MedAssist.

• $25 million to establish the COVID-19 Teaching Hospitals Relief Fund and another $25 million to establish the COVID-19 General Hospitals Relief Fund.

• $350 million to be allocated among each county that did not already receive funding directly from the Coronavirus Relief Fund established through the CARES Act.

• $80 million to be used for the continuity of state government operations.

The bill also allocates $75 million to fund a small business bridge loan program through the Golden LEAF Foundation's coalition of small business lenders. While the total funding amount differs between the House and the Senate proposals, both use similar language and criteria such that the dollars would go to the Golden LEAF Foundation to assist in the coalition's work. The small business loans will have an interest rate of up to 4% for the first six months, a term length of 66 months, and require the businesses to submit in writing that the loan will be used for employee compensation and critical operating expenses. The maximum dollar amount for a loan is $50,000.

The House passed HB 1043 Thursday afternoon with overwhelming bipartisan support by a 117-0 vote. 

House Bill Policy Provisions

Just as the Senate included policy changes and law modifications in their relief package, the House did as well. The proposed HB 1043: Pandemic Response Act would provide the following changes to the state's education policies in light of the coronavirus pandemic: 

• Waives end-of-grade and end-of-course testing requirements.

• Waives the requirement for calculation and display of school report cards.

• Waives the requirement for the State Board of Education to identify new low-performing schools, new continually low-performing schools, and new low-performing local school administrative units for the 2019-2020 school year, and waives the requirement to select a new school for the Innovative School District.

• Directs each public school unit to develop a Remote Instruction Plan for the upcoming 2020-2021 school year and submit the plan to the SBE by July 20.

• Moves the school year start date up one week to August 17 and maintains a closing date of June 11, 2021.

• Delays the reduction of K-3 class size for one school year.

• Modifies the minimum admission requirements for EPPs as well as clinical internship and pedagogy assessment requirements, similar to the Senate’s package. 

The House bill would also allow for a number of regulatory flexibilities and changes, including: 

• Allows notaries to use emergency video notarization.
• Allows the chair of the ABC Commission to allow restaurants and retail stores to sell mixed beverages to-go, so long as the beverage is packaged in a container with a secure lid preventing consumption with the lid secured, sold only with the purchase of food, and is limited to two servings per meal ordered.
• Extends the validity of credentials issued by the DMV for six months, such as driver’s licenses, handicapped placards, and vehicle registrations.
• Delays the DMV headquarters move from being completed by October 1, 2020, to beginning the process of moving by October 1, 2020.
• Allows a one-year carry-forward of drivers education funds.
• Lowers DOT's required cash floor to $125 million. 

To provide assistance to the healthcare industry, from patients to providers, hospitals to insurers, the bill would: 

• Direct the Division of Public Health and the Division of Health Service Regulation to work with the Division of Emergency Management to develop a plan to establish and maintain a strategic state stockpile of PPE and testing supplies.

• Require DHHS and the Division of Emergency Management to consider North Carolina companies first when creating mobile response units.

• Allow flexibility to the North Carolina Medical Board and the North Carolina Board of Nursing for Quality Improvement Plans to reduce the number of meetings required between a physician and a physician assistant or nurse practitioner. The provision would expire 60 days after Executive Order 116 is rescinded or December 31, 2020.

• Create a pandemic health care workforce study and direct the North Carolina Area Health Education Center to study the issues impacting health care delivery and health care providers during a pandemic. The study must include input from a variety of stakeholders, including colleges and universities, licensing boards, DHHS, DPS, urban and rural hospitals, nursing homes, and so on.

• Provide immunity from civil liability to health care providers and health care facilities across the state during the COVID-19 public health emergency.

• Direct all healthcare providers to administer a COVID-19 diagnostic or antibody test to individuals prior to a nonemergency surgery and report the results, both positive and negative, to the Commission for Public Health and the Division of Public Health.

• Waive the requirement that all childcare providers complete a fingerprint-based criminal background check every three years.

• Provide Medicaid coverage to uninsured individuals for COVID-19 testing during the declared nationwide public health emergency.

• Authorize DHHS to provide temporary, targeted Medicaid coverage to individuals with incomes 200% below the federal poverty level for the purposes of prevention, testing, or treatment of COVID-19.

• Require insurers and the State Health Plan to cover telehealth or virtual health services and reimburse providers for telehealth services at the same rate they do for in-person care.

• Direct DHHS to increase the fee-for-service Medicaid rates paid to all provider types by 5%.

• Give the State Treasurer the authority to defer State Health Plan premiums or debate payments during the state of emergency.