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Jun 4, 2020

Emerging Technologies Washington Update

This week: Coronavirus response; Senators unveil first bipartisan COVID-19 data privacy bill; USTR expands investigation into digital services taxes.

Coronavirus Response

The Latest

Last night, the Senate passed the bipartisan Paycheck Protection Program Flexibility Act by unanimous consent, sending it to the President for his signature. The bill extends the covered period for which Paycheck Protection Program (PPP) expenses will be forgiven beyond the current eight weeks to 24 weeks or December 31, whichever comes first. While lawmakers were able to agree on this tailored fix to a coronavirus relief program, Democrats and Republicans remain at odds on what a Phase 4 package will look like as Senate Republicans prepare to release their proposal, likely later this month.

On Tuesday, the Senate Banking Committee held a remote hearing on “Implementation of Title IV of the CARES Act.” The Senate Finance Committee held a hearing on “COVID-19 and Beyond: Oversight of the FDA’s Foreign Drug Manufacturing Inspection Process” and the Senate Judiciary Committee convened a hearing on “Examining Best Practices for Incarceration and Detention During COVID-19.” On the other side of the Capitol, Governors Jared Polis (D-CO), Gretchen Whitmer (D-MI), and Asa Hutchinson (R-AR) appeared before the House Energy and Commerce Subcommittee on Oversight and Investigations for a remote hearing entitled “On the Front Lines: How Governors are Battling the COVID-19 Pandemic.”

On Wednesday, a Senate Small Business Committee a hearing examined “Perspectives from Main Street: COVID-19’s Impact on Small Businesses and the Senate Commerce Committee held a hearing on “The State of Transportation and Critical Infrastructure: Examining the Impact of the COVID-19 Pandemic.” The House Budget Committee heard from two former Congressional Budget Office (CBO) Directors during a virtual hearing on “Addressing the Economic Impacts of COVID-19.” A House Judiciary Committee hearing examined “Protecting the Right to Vote During the COVID-19 Pandemic” and the House Financial Services Subcommittee on Consumer Protection and Financial Institutions convened a virtual hearing on “Promoting Inclusive Lending During the Pandemic.”

Today, the Senate Health, Labor, Educations, and Pensions (HELP) Committee held a hearing on “COVID-19: Going Back to College Safely” and the Senate Environment and Works Committee convened a hearing to examine “Infrastructure: The Road to Recovery.” Centers for Disease Control and Prevention (CDC) Director Dr. Robert Redfield also appeared before a House Appropriations subcommittee hearing on “COVID-19 Response.”

Elsewhere, the President and federal agencies continue to take other steps to respond to the outbreak, including, but not limited to:

  • President Trump hosted a roundtable with industry executives on economic reopening.
  • The President signed a Memorandum on Governors’ Use of the National Guard to Respond to COVID-19 to Facilitate Economic Recovery extending the deployment of National Guard troops supporting coronavirus response efforts through August 21.
  • The Small Business Administration updated its report on Paycheck Protection Program (PPP) approvals through May 30.
  • The Federal Reserve announced it is expanding the number and type of entities eligible to use the Municipal Liquidity Facility (MLF) and published an updated term sheet, FAQs, and limits per state.
  • The Department of Health and Human Services (HHS) announced a $628 million contract to advance manufacturing capabilities and capacity for a potential COVID-19 vaccine and therapeutics. HHS also announced it is providing an additional $250 million in CARES Act funding to healthcare systems to support pandemic response efforts.
  • The Food and Drug Administration (FDA) published a voluntary Emergency Use Authorization (EUA) template for at-home sample collection kits in line with its revised Policy for COVID-19 Tests During the Public Health Emergency.
  • The Department of Transportation (DOT) said in an Order that it will ban passenger flights to the United States on Chinese airlines effective June 16. The Civil Aviation Authority of China has so far not approved several US airlines’ requests to resume service to China amid the pandemic.

A complete overview of both congressional and Administrative response efforts is available here and updated daily.

What’s Next

Senate Republicans are expected to release their Phase 4 proposal later this month. Liability protections will be a cornerstone of the proposal, which will likely be under $1 trillion, in stark contrast to the House Democrats’ HEROES Act, which totals over $3 trillion.

Next Tuesday, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing on “Evaluating the Federal Government’s Procurement and Distribution Strategies in Response to the COVID-19 Pandemic,” the Senate Judiciary Committee will examine “COVID-19 Fraud: Law Enforcement's Response to Those Exploiting the Pandemic,” and a Senate Energy and Natural Resources Committee hearing will focus on “Wildfire Management in the Midst of COVID-19.” The Senate Finance Committee will hold a hearing on “Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance During the Pandemic.” A House Energy and Commerce subcommittee will also convene a hearing on “Pollution and Pandemics: COVID-19’s Disproportionate Impact on Environmental Justice Communities” and the House Transportation and Infrastructure Committee will hold a hearing entitled “On the Front Lines: The Impacts of COVID-19 on Transportation Workers.” 

On Wednesday, Treasury Secretary Mnuchin and SBA Administrator Carranza will testify before the Senate Small Business Committee during a hearing on “Implementation of Title I Of the CARES Act” and the Senate Health, Education, Labor, and Pensions Committee will hold a hearing on “COVID-19: Going Back to School Safely.” The House Oversight and Reform Committee will hold a hearing entitled “No Worker Left Behind: Supporting Essential Workers.” The House Financial Services Committee has also scheduled a series of COVID-focused hearings throughout June.

Relevant Resources

In Other News

Senators Unveil First Bipartisan COVID-19 Data Privacy Bill

On June 2, a bipartisan group of senators released the Exposure Notification Privacy Act, which would require consumer consent for COVID-19-related tracking apps. The bill is sponsored by Senate Commerce Committee Ranking Member Maria Cantwell (D-WA) and Senators Bill Cassidy (R-LA) and Amy Klobuchar (D-MN) and is the first COVID-related privacy bill to garner bipartisan support. In addition to the consent requirement, the legislation would limit the scope of data collection to only the data necessary for the purpose of the app, prohibit any commercial use of the data, and allow consumers the right to deletion of their data. Further, the legislation would establish safeguards against discrimination in places of public accommodation based on information provided to the app or a consumer’s refusal to participate. Finally, the bill would allow enforcement by federal and state authorities to prosecute violations. For more on the Republican and Democratic proposals released last month, click here.

USTR Expands Investigation Into Digital Services Taxes

On Tuesday, the United States Trade Representative (USTR) announced it is launching investigations into Digital Services Taxes (DSTs) that have been adopted or are being considered by the European Union, the United Kingdom, the Czech Republic, India, Italy, Turkey, Indonesia, Austria and Brazil. The investigations will be conducted under Section 301 of the 1974 Trade Act, which gives the USTR broad authority to investigate and respond to a foreign country’s action which may unfairly affect U.S. commerce. The Trump administration argues that DSTs unfairly discriminate against large U.S.-based tech companies.

Last July, France was the first major economy to legislate a digital service tax. However, after the United States threatened retaliatory tariffs on French exports, the French government decided to delay collecting the tax until the end of 2020.

Since then, the Organization for Economic Cooperation and Development (OECD) has worked with its members towards reaching a consensus-based solution to reform the international tax framework to address the digitalization of the economy. Although the OECD plans to announce an agreement by the end of the year, it is unclear what impact the pandemic will have on that timeline. Failure to reach an agreement by 2020 may drive individual countries to act unilaterally to impose digital taxes.

USTR’s investigations prod the OECD to move forward with deliberations. Absent a multilateral agreement, the United States might move to impose new retaliatory tariffs, which would further stoke global tensions. According to a Federal Register notice, USTR is soliciting public comments regarding the investigations by July 15, 2020.


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