COVID-19 Texas News for Lobbyists

Texas Hospital Capacity

On Tuesday, June 16th, Governor Greg Abbott held a press conference to update Texans on the State’s coronavirus response and hospital capacity. Although there has been an uptick in cases, the Governor offered reassurances that Texas continues to maintain abundant hospital capacity.

“As we begin to open up Texas and Texans returns to their jobs, we remain laser-focused on maintaining abundant hospital capacity,” said Governor Abbott. He added that “the best way to contain the spread of this virus is by all Texans working together and following simple safety precautions. We all have a responsibility for our own health and for the health of our loved ones, friends, and neighbors. COVID-19 still exists in Texas, and if we are to contain the spread while getting Texans back to work, all Texans must do their part. That means making safe and smart decisions like wearing a mask, washing your hands, and socially distancing in public. The more Texans protect their own health, the safer our state will be and the more we will be able to open up for business.”

Following the Governor’s remarks, Doctor John Zerwas presented an in-depth update on hospital capacity in Texas. Doctor Zerwas’ presentation can be viewed here.

Local Mask Requirements

This week, several local leaders issued mandates on businesses to require face masks. Bexar and Hidalgo Counties led the way followed by the City of Austin. Austin’s ordinance mirrors Bexar County’s and will take effect June 22nd and run through August 15th. Businesses, not individuals, can be fined up to $1,000 for non-compliance.

Governor Abbott commented on these local ordinances with the following remarks: “Local governments can require stores and business to require masks. That’s what was authorized in my plan.” He added that “businesses … they’ve always had the opportunity and the ability, just like they can require people to wear shoes and shirts, these businesses can require people to wear face masks if they come into their businesses. Now local officials are just now realizing that that was authorized.”

Dallas and Harris Counties are expected to follow with similar mandates.

Paycheck Protection Program Flexibility Act Signed into Law

Congress passed the Paycheck Protection Program Flexibility Act of 2020 and President Donald Trump signed the Act into law on June 5th. The Act provides significant changes to key provisions of the Paycheck Protection Program (PPP) utilized by many business operators across the nation. The key changes in the Act include the following:

  1. Covered period: The Act now allows borrowers to spend PPP proceeds until the earlier of twenty-four (24) weeks from the loan origination date or December 31, 2020 to qualify for loan forgiveness. This is a significant expansion from the original CARES Act, which required borrowers to spend PPP proceeds within eight (8) weeks of the loan origination date to qualify for forgiveness.
  2. Loan expenditures: The Act now requires borrowers to spend at least 60% of PPP proceeds on payroll expenses to qualify for forgiveness as opposed to the original 75% requirement. With this change, borrowers can use the remaining 40% to pay for other eligible expenses (i.e., rent/lease obligations, utility payments, and mortgage interest).
  3. Workforce restoration:The Act now allows borrowers to restore their workforce and wages to “pre-pandemic” levels by the end of the newly expanded Covered Period (see point 1 above) as opposed to the original deadline of June 30, 2020. Additionally, the Act provides a safe harbor provision which protects a borrower’s eligible amount of loan forgiveness if restoration of the borrower’s workforce and wages cannot be adequately attained.
  4. Unforgiven proceeds loan term:The Act now allows borrowers to pay off any unforgiven loan amount over a five-year term as opposed to the original two-year maximum. The annual interest rate remains at 1%.
  5. Payroll tax deferment: The Act now allows businesses that took a PPP loan to delay payment of their payroll taxes, a practice that was originally prohibited under the CARES Act. Borrowers should, of course, work with directly with their CPA or other financial professional(s) to ensure compliance and maximize their total tax deferment amount and time period.

Texas HHS Names New Operating Officer

This week the Texas Health and Human Service Commission named Maurice McCreary, Jr it’s new Chief Operating Officer, effective July 20.

The chief operating officer is responsible for overseeing the agency’s information technology, procurement and contracting services and system support services.

McCreary most recently served as the interim chief executive officer of Hamad General Hospital, a 660-bed tertiary care facility in Qatar, where he led daily operations of the clinical and non-clinical support services departments and facilities management. McCreary also oversaw $344 million in state-of-the-art construction projects that included a new 20-room operating theater and a 300,000-square-foot trauma and emergency department.