President Signs Coronavirus Response Legislation

President Signs Coronavirus Response Legislation

The President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act after it was passed by the U.S. House of Representatives, following a 96-0 approval in the Senate. The legislation includes roughly $2.2 trillion in spending and other forms of relief for individuals and organizations in a vast range of areas. Notably, it includes a $1,200 cash rebate that will be received by most adults ($500 for children), expanded eligibility for unemployment benefits, and improvements in the length and amount of unemployment benefits.

A number of important provisions directly affect legal services organizations and staff. An emergency supplemental appropriation of $50 million was included for the Legal Services Corporation to prevent, prepare, and respond to coronavirus. NLADA and its Corporate Advisory Committee had last week sent a letter to House and Senate leadership that LSC be included in this package. Information about the distribution of that funding is forthcoming from LSC.

Programs that expect to experience serious budgetary and revenue concerns should also be aware that the bill creates a "paycheck protection program" designed to prevent small businesses from terminating the employment of members of their staff due to reduced revenue during the public health emergency. Nonprofit organizations with 501(c)(3) status are eligible to participate in this program. Organizations with fewer than 500 staff will be eligible to apply for a forgivable loan equal to the average payroll costs (covering annual salaries up to $100,000) of the organization multiplied by 2.5, up to a maximum of $10 million. The loan would be forgiven in its entirety if the organization does not terminate employees during the loan period and produces documentary evidence that the funds were used for a covered purpose. The legislation also provides for grants through the Economic Injury Disaster Loan (EIDL program).

The CARES Act also provides temporary relief to individuals currently in repayment on federal student loans through the suspension of all payments due on Federal Direct and Federal Family Education Loans through September 30. Note that for the purposes of any loan forgiveness program, each month for which a loan payment is suspended will be considered as though the borrower had made a payment. The payment suspension will therefore not prevent borrowers who have Direct loans from accumulating qualifying "payments" under the Public Service Loan Forgiveness program.

In addition to funding for LSC, the legislation provided additional appropriations for many programs that support clients of civil legal aid, including programs related to nutrition assistance, homelessness, Community Development Block Grants, and others. NLADA will provide further analysis about this and information about the implementation of the CARES Act as it becomes available.