President Trump signed a $484 billion interim supplemental bill on Friday that provides additional emergency funding to aid the COVID-19 response. The bill amends some portions of the CARES Act that was passed in late March and established the Paycheck Protection Program (PPP), expanded small business loans, assistance to hospitals, and funding for public health agencies. This new piece of legislation replenishes the Paycheck Protection Program and small business loans, and also provides additional funding to boost COVID-19 testing capacity.
The $484 billion aid package includes:
- $321 billion in additional lending authority for the Paycheck Protection Program, with some funds set aside to support loans issued by smaller lenders;
- $10 billion for additional economic impact disaster loans to small businesses;
- $75 billion for hospitals and health care providers; and
- $25 billion for virus testing.
Additional funding for hospitals and providers
$75 billion has been provided for reimbursement to hospitals and health care providers to support the need to reimburse COVID-19 related expenses and lost revenue. This funding is in addition to the $100 billion provided in the CARES Act. Funds will be distributed under the same terms as the third package—based on providers’ share of Medicare fee-for-service and directly deposited into providers’ bank accounts via paper checks.
Additional COVID-19 testing provisions
$25 billion is provided to support COVID-19 testing to detect active infection and to determine previous exposure. Funds can be used to research, develop, validate, manufacture, purchase, administer, and expand COVID-19 testing.
The $25 billion includes:
- $11 billion directed towards states, localities, territories, and American Indian tribes to support their COVID-19 responses based on their relative number of cases;
- $1 billion to CDC for surveillance, epidemiology, contract tracing, and other activities to support testing;
- $1.8 and $1 billion to NIH and the Biomedical Advanced Research and Development Authority (BARDA) respectively to accelerate point-of-care and rapid diagnostic techniques;
- $22 million to FDA to support approval of point-of-care and rapid diagnostic techniques;
- $600 million for Community Health Centers to support COVID-19 testing;
- $225 million for rural health clinics to support COVID-19 testing; and
- Up to $1 billion to cover the cost of tests for the uninsured.
Funds for independent laboratory tests will be distributed through states and localities — not from the federal government. The bill requires that no later than 30 days after the enactment of the Act, the Governor, or other designee receiving the funds, should submit a COVID-19 testing plan to HHS including:
- The number of tests needed, month-by-month, to include diagnostic, serological, and other tests as appropriate;
- Month-by-month estimates of laboratory and testing capacity, including workforce, equipment and supplies, and available tests;
- A description of how the State, locality, territory, or tribal organization will use its resources for testing, including as it relates to easing any COVID-19 community mitigation policies.
PPP and Economic Injury Disaster Loan funds replenished
The bill also authorizes an additional $321.3 billion in loans to small businesses through the PPP. This program, which was originally funded at $349 billion, allows businesses with up to 500 full or part-time employees to receive loans from the Small Business Administration to cover payroll, employee salaries, and certain other costs incurred between Feb. 15 and June 30 up to a maximum of $10 million.
These loans are subject to forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan, subject to a reduction based on the reduction in the number of employees or the reduction of wages paid in excess of 25 percent. Of the additional $321 billion, $60 billion is reserved for loans made by smaller financial institutions, including those with less than $50 billion in assets.
The bill also authorizes an additional $10 billion for economic injury disaster loans (EIDL) for eligible businesses with up to 500 employees. Small businesses may be able to receive an emergency advance of $10,000 under this program that does not need to be paid back, even if the subsequent loan application is denied.