Brian Dake

On April 21, the Senate passed the Paycheck Protection Program and Health Care Enhancement Act. The bill—a $484 billion package dubbed “Phase 3.5″—will replenish the Small Business Administration’s (SBA) loan and grant programs; provide support to hospitals and medical facilities; and expand federal, state, and local coronavirus testing efforts. The House is scheduled to vote on the legislation today after which President Trump is expected to sign it into law.

Specifically, in an effort to provide some relief to the nation’s small businesses, the deal reached by Congressional leaders and President Trump includes:

• An additional $310 billion for the SBA’s Paycheck Protection Program, with $60 billion specifically allocated for loans made by small lenders and community-based institutions;
• An extra $50 billion for the SBA’s Economic Injury Disaster Loan (EIDL) program;
• An extra $10 billion for the SBA’s Emergency Economic Injury Grant program;
• A clarification that agricultural enterprises with 500 or fewer employees are eligible to receive EIDLs and emergency grants; and
• An additional $2.1 billion for the SBA’s administrative expenses.

The Wisconsin Legislature filed a lawsuit directly with the Wisconsin Supreme Court on Tuesday challenging DHS Secretary-Designee Andrea Palm’s authority to keep Wisconsin’s economy closed and its residents locked down indefinitely – when even Gov. Tony Evers does not have that power.

The lawsuit accuses the Department of Health Services (DHS) Secretary-Designee of violating state law by extending the governor’s emergency rules, exceeded her authority by closing businesses and locking down individuals, acting “arbitrarily and capriciously” in her order, and usurping the legislature’s oversight powers. The lawsuit seeks a temporary injunction.

“The governor has denied the people a voice through this unprecedented administrative overreach. Unfortunately, that leaves the legislature no choice but to ask the Supreme Court to rein in this obvious abuse of power,” Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald wrote in a joint statement. “Wisconsinites deserve certainty, transparency, and a plan to end the constant stream of executive orders that are eroding both the economy and their liberty even as the state is clearly seeing a decline in COVID infections.”

Evers’ issued a shelter-in-place order that went into effect on March 25, he calls “Safer at Home.” It shutdown businesses and organizations he deemed “non-essential,” and banned all gatherings of any number outside of a single family unit. That order was originally scheduled to end on April 24, but Evers has the ability to extend it up to May 10. That’s the day his emergency powers expire and he needs legislative approval to continue his original state of emergency.

Yesterday, Governor Tony Evers announced Wisconsin’s “Badger Bounce Back” plan which outlines important criteria for Wisconsin to be able to reopen its economy in phases and includes steps to make sure workers and businesses are prepared to reopen as soon as it is safe to do so.

The Badger Bounce Back plan is informed in part by the President’s Guidelines for Opening Up America Again that was issued by the White House on April 16, 2020. Currently, Wisconsin does not meet the criteria the White House established to start reopening our state. The Badger Bounce Back plan takes important steps to get the state of Wisconsin there.

The goal of the Badger Bounce Back plan is to decrease cases and deaths to a low level, and increase capacity in our healthcare system so the phased reopening of businesses is possible.

The Badger Bounce Back plan is available here. The Wisconsin Economic Development Corporation’s portion of the Badger Bounce Back plan aimed at helping to ensure workers and businesses are prepared and ready to bounce back is available here.

The Senate is scheduled for a pro forma session Monday, but no vote has been set.

The House announced it could meet as soon as Wednesday for a vote on the pending package, according to a schedule update from Majority Leader Steny Hoyer, D-Md.

With small-business owners reeling during a coronavirusoutbreak that has shuttered much economic activity, Treasury Secretary Steven Mnuchin said he was hopeful of a deal that could pass Congress quickly and get the Small Business Administration program back up by midweek.

“I’m hopeful that we can get that done,” Mnuchin said Sunday.

Senate Minority Leader Chuck Schumer, D-N.Y., also said he believed a deal could be reached. “We still have a few more details to deal with,” he said.

The emerging accord links the administration’s effort to replenish a small-business with Democrats’ demands for more money for hospitals and virus testing. It would provide $300 billion for small-business payroll program, and $50 billion would be available for small business disaster fund. Additionally, it would bring $75 billion for hospitals and $25 billion for testing, according to those involved in the talks.

On a conference call Sunday afternoon that included Trump, Mnuchin and Republican senators, Senate Majority Leader Mitch McConnell, R-Ky., indicated the only remaining item for discussion involved the money for testing, according to a Senate GOP leadership aide who spoke on condition of anonymity to discuss a private call.

Yesterday, Governor Tony Evers directed Wisconsin Department of Health Services (DHS) Secretary-designee Andrea Palm to extend the Safer at Home order from April 24, 2020 to 8 a.m. Tuesday, May 26, 2020, or until a superseding order is issued.

The order implements some new measures to ensure safety and support the progress we’ve made in containing COVID-19, but also allows certain activities to start up again. The order is available here.

The extension of the Safer at Home order includes a few changes. Some changes allow more businesses and activities to open back up, while other changes help make businesses safer for employees and customers.

If you have questions, a Frequently Asked Questions (FAQ) document is available here for your review.

Governor Evers signed the bill Wednesday just one hour after it passed the Senate 32-0 and a day after it passed the Assembly on a 97-2 vote.

It lifts a one-week waiting period for unemployment insurance in Wisconsin and requires health insurers to cover COVID-19 testing. It also bars insurers from discriminating against people who have or have had the virus.

The new law will also clear the way for Wisconsin to qualify for additional federal Medicaid funding made possible by the $2 trillion U.S. CARES Act that passed Congress last month.

“My pen has been waiting for weeks to sign legislation that guarantees Wisconsin will capture our fair share of federal dollars under the CARES Act and ensures workers experiencing unemployment and underemployment won’t be forced to wait an extra week for needed benefits to kick in,” Evers said in a statement Wednesday. “This bill is finally a step in the right direction, but there is much more work to be done.”

Senators debated the bill briefly Wednesday morning during a virtual session of the Senate. Most lawmakers participated over webcams, either from home or from their Capitol offices.

“This bill isn’t perfect and it might be the first bill of a number that we are going to have to pass in the Legislature, but it is timely, and I think it’s been well thought out and I think it will help,” said Sen. Majority Leader Scott Fitzgerald, R-Juneau. “Wisconsinites have endured great sacrifice and the measures that we have taken and that the governor has taken so far are working.

To help dispel rumors, officials with the Wisconsin Counties  Association (WCA) and Wisconsin Department of Transportation (DOT) want to clarify that state roadways and borders remain open to in-state and out-of-state travelers.

Under Governor Tony Evers’ Safer at Home order, motorists are asked to avoid “non-essential” travel throughout the public emergency period. State Patrol and county sheriff’s departments continue to enforce traffic laws as usual, but are not pulling over vehicles with out-of-state plates or other motorists just to ask about the purpose of their trip.

“For the Wisconsin State Patrol and county sheriff’s departments, public safety remains the top priority,” WisDOT Secretary-designee Craig Thompson said. “State troopers and sheriff’s deputies are working every day enforcing traffic laws to help ensure safe travel. As always, the emphasis is on public education and voluntary compliance.” Wisconsin State Patrol Superintendent Anthony Burrell clarified in a recent video that state borders and roadways remain open to travel.

In an April 7, 2020 memo to sheriff’s departments and other county government officials, WCA explained that counties do not have the legal authority to ban out-of-state travelers (or second home/seasonal homeowners) from visiting a county during the COVID-19 pandemic.

The Wisconsin Department of Revenue announced that more filing and payment deadline dates will conform with recently released IRS Notice 2020-23, which makes it easier for taxpayers to comply. This notice  automatically moves deadlines for filings and payments due between April 1, 2020 and July 15,2020 to July 15, 2020.

Summary of the new guidance:

• Extensions for Filing Returns – Income/franchise and pass-through withholding returns due on or after April 1, 2020, and before July 15, 2020 are extended to July 15, 2020

• Extensions for Return Payments – Income/franchise and pass-through withholding tax due on or after April 1, 2020, and before July 15, 2020, will not accrue interest or penalties until July 16, 2020

• Waiver of Underpayment Interest (UPI) on Estimated Payments –  UPI will not apply to income/franchise and pass-through withholding returns with a tax year ending on December 31, 2019, or returns that are due on or after April 1, 2020 and before July 15, 2020

• Extensions for Estimated Payments of Income/Franchise and Pass-Through Withholding Tax – Estimated payments due on or after April 1, 2020, and before July 15, 2020 are extended to July 15,2020. Note: 1st quarter estimated payments are generally due April 15, 2020, and 2nd quarter estimated payments are generally due June 15, 2020.

• Federal economic impact payments (stimulus payments) – Federal economic impact payments are not taxable for federal or Wisconsin income tax purposes. The IRS will not use the payment to pay federal or state tax debts but will use it to pay past due child support payments that the states have reported to the IRS (Treasury Offset Program Bulletin 2020-8).

Republican leaders are announcing plans to begin an extraordinary session of the Wisconsin State Legislature starting Tuesday, April 14th. Public notice is going out today that a ballot will be circulated amongst members of the legislature’s organizational committees on Monday in order to establish the session. Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald (R-Juneau) released the following statement:

“During these uncertain times, we are steadfast in our resolve to address the needs of the state. This legislation will allow Wisconsin to capture millions of federal dollars in addition to the $2 billion in coronavirus funding that will aid Wisconsin’s response to the COVID-19 crisis.

“We continue to work with members of the minority party on the legislation. We’re confident that this plan will make the necessary legislative changes to help Wisconsin deal with the extensive challenges from this public health crisis, while also protecting the integrity of our state budget.”

The extraordinary session is set to begin on Tuesday. It is still being determined which day each chamber will conduct a session.

Yesterday, the Department of Workforce Development (DWD) released the total number of new applications, weekly claims, and amount distributed for unemployment benefits for the time period of March 15 to April 6, 2020.

Between March 15 and April 6, 2020, the total number of new applications submitted for unemployment benefits was 313,068, with weekly claims reaching 589,616. The total amount in unemployment benefits distributed equaled $68,759,104.

By comparison, during the same period in 2019, the total number of new applications paled in comparison, 17,748, with weekly claims of 155,148. The total amount of unemployment benefits during this period was $39,597,111.

“The fact that initial claims ballooned by more than 1600% illustrates the unprecedented nature of this pandemic and its effect on our economy,” Secretary Caleb Frostman said. “The IT infrastructure of the UI division was not adequately modernized coming out of the Great Recession, which has forced DWD’s staff to work overtime, nights, and weekends to process unemployment claims to support out-of-work Wisconsinites. We are confident that our accelerated and expanded hiring, along with real-time telecom and IT improvements will help alleviate claimant backlogs.”

On top of the measures in additional staffing and technology, DWD is developing the application for Pandemic Unemployment Assistance (PUA), with the goal of taking the first applications the week of April 21, 2020. PUA was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on March 27, 2020. It temporarily expands UI eligibility to those who are otherwise ineligible for state UI benefits, including those who are self-employed, free lancers, independent contractors, and part-time workers impacted by COVID-19. Workers will be eligible for retroactive benefits (as far back as Feb. 2, 2020) and can receive benefits for up to 39 weeks.

The CARES Act also created the Federal Pandemic Unemployment Compensation (FPUC) program, which provides an additional $600 per week through July 31, 2020 to those who are eligible for UI and PUA benefits. Wisconsin hopes to be ready to start making these payments the week of April 26, 2020.