Washington Update

House Passes HEROES Act
Last Friday, the House passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The legislation, totaling more than $3 trillion, would provide support for local and state governments, K-12 and institutions of higher education, and other sectors impacted by the COVID-19 pandemic. A detailed analysis of the bill can be found here.

Upon House passage, APLU released a statement expressing support for the legislation but noted in particular the need for improving funding for research as the legislative process proceeds. APLU also joined the higher education community on a letter to House leadership conveying areas of support and a desire to work with members to advance mutual priorities.

Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) continue to remain at odds over timing for the next relief package. Leader McConnell said he does not want to push another bill through the Senate until the impact of the CARES Act (Phase III) has been fully assessed.

Senators Durbin and Smith Introduce Legislation to Fix Paid Leave Tax Credit
Senators Dick Durbin (D-IL) and Tina Smith (D-MN) introduced a legislative fix that would help state and local governments and public universities offset expenses of paid leave. As noted above, the House-passed HEROES Act would also provide a legislative fix.

The Families First Coronavirus Response Act (FFCRA) requires many public and private employers to provide paid leave for workers affected by the coronavirus pandemic. That law provides tax credits to private-sector employers to cover the costs of paid leave, but the package did not extend those tax credits to public-sector employers. This is putting a financial strain on institutions at a time when many are grappling with additional costs brought on by the coronavirus pandemic.

Along with Senators Durbin and Smith, the Supporting State and Local Leaders Act is also cosponsored by Senators Amy Klobuchar (D-MN), Michael Bennet (D-CO), Chris Van Hollen (D-MD), Tim Kaine (D-VA), and Dianne Feinstein (D-CA). APLU developed a policy brief memo explaining the dynamics on the issue.

Department of Education Issues Revised Distance Education Guidance
On May 15, the Department of Education released updated guidance for interruptions of study related to COVID-19. The guidance extends distance education through December 31, 2020.

Although the guidance does not address flexibility for academic calendars, it covers a range of other topics including financial statement and compliance audit requirements, institutional eligibility and change of ownership, student workers and loan eligibility for the paycheck protection program, and more.

The Department is expected to release further guidance on student eligibility of the emergency grant portion of the Higher Education Emergency Relief Funds, and the application process for additional Historically Black Colleges and Universities, Minority Serving Institutions, and Strengthening Institutions Program funds.

Philadelphia Fed Reserve President Explores Aid for Colleges
The president and CEO of the Federal Reserve Bank of Philadelphia delivered remarks on the economic outlook amid COVID-19. In his remarks, he specifically highlighted the stress this crisis is causing colleges and universities and noted that the Fed is considering setting up additional facilities to help the higher education sector. As he stated, the Fed’s goal is to “use our vast lending powers to maintain our underlying economic infrastructure by making sure that every sector of the economy has access to liquidity.”

While the current Fed programs—specifically the Main Street Lending Program and Municipal Liquidity Facility—have not been changed to benefit colleges and universities, it is clear that higher education’s engagement with the Federal Reserve is having a real impact on how officials are thinking about the path to recovery and additional programs that they need to stand up.

IRS Clarifies Taxability of Emergency Grant Aid
The Internal Revenue Service (IRS) released a new FAQ on student emergency grant aid provided through the CARES Act. Officials have clarified that the aid should be treated as a “qualified disaster relief payment” and therefore is not subject to taxation. The FAQ also notes that because these funds are not considered as a part of a student’s gross income, funds spent cannot be claimed as a tax deduction or counted toward the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC).

APLU staff drafted a memo outlining this issue in mid-April, noting that these funds should be treated as qualified disaster relief. APLU President Peter McPherson issued a statement commending Treasury for addressing this concern. Last month, APLU joined with other associations in the higher education community on a letter calling for the Department of Treasury to clarify that student emergency funds would not be treated as taxable income.

Republicans Urge Suspension of H-1B Visas and OPT
Top Republican members of the House and Senate sent letters to President Trump urging the administration to suspend all guest worker visas until unemployment returns to “normal levels.” The members specifically take aim at H-1B visas, arguing that unemployed Americans and recent graduates should not have to compete against H-1B workers. The letter also calls for the suspension of the Optional Practical Training (OPT) program because, the lawmakers argue, it impedes on American citizens’ opportunities for job placements.

The administration’s proclamation issued last month excluded nonimmigrant visas but directed the Departments of Homeland Security, Labor, and State to review nonimmigrant programs within 30 days of the proclamation and make recommendations to the president on measures to stimulate the U.S. economy.

Last week, APLU sent a letter to the departments mentioned in the executive order urging the agencies to exclude nonimmigrant visas from future executive orders issued by the administration. We are in further contact with the administration to defend the importance of OPT.

Associations Oppose EPA Transparency Rule
APLU, the Association of American Universities, the Association of American Medical Colleges and the Council on Governmental Relations sent a letter opposing the Environmental Protection Agency (EPA)’s Strengthening Transparency in Regulatory Science proposed rule and supplemental notice, better known as the Secret Science rule. In addition, APLU signed on to a letter circulated by the American Association for the Advancement of Science (AAAS) voicing similar concerns.

The rule would prevent EPA from using scientific studies in rulemaking or “influential science information” processes that do not make their raw data and code publicly available. This would be especially problematic for public health studies that shield personally identifiable information (PII), including where universities and PIs are legally bound by study participants to protect health information and privacy.

AAAS recently published an overview of the issue. EPA first released the “secret science” rule in 2018. APLU along with the other associations wrote a letter in opposition.

Congressional Members Push Bipartisan Support for Scientific Research
Senate Minority Leader Chuck Schumer (D-NY), Senator Todd Young (R-IN), Representative Ro Khanna (D-CA), and Representative Mike Gallagher (R-WI) published an op-ed in USA Today calling for bipartisan support for scientific research following the coronavirus pandemic. The article argues that the United States’ underinvestment in science and research has contributed to our inability to prevent, respond, and recover from the pandemic, and requests renewed investment in the research infrastructure to aid the U.S. in regaining its position as the global leader for research and development.

The authors of the op-ed propose the Endless Frontiers Act, which calls for “national investment in public research and development to strengthen our nation’s innovation ecosystem now and into the future.” The bill would provide specific investments to address urgent research to combat COVID-19, sustain the U.S. global leadership in science and technology, and “pair federal investments in research and development with public- and private-partner investments in scientific and technical moonshots.” Minority Leader Schumer has been working on this proposal since last fall and plans to introduce the legislation soon.