Treasury Department Provides Initial Guidance for the Distribution of $350 million in State and Local Aid

On Monday May 10, the U.S. Department of Treasury released guidance on the State and Local Coronavirus Fiscal Recovery Fund (Recovery Fund), as part of the American Rescue Plan Act. Included in the guidance is the flexibility to use Recovery Funds to invest in broadband infrastructure, services and programs to contain and mitigate the spread of COVID-19, including capital investments in public facilities, investments in housing and neighborhoods and other guidance counties advocated for. The U.S. Treasury also opened a new web portal that state and local governments must use to receive Fiscal Recovery Funds.

HOW TO REQUEST FUNDING

Eligible state, territorial, metropolitan city, county, and Tribal governments may now request their allocation of Coronavirus State and Local Fiscal Recovery Funds through the Treasury Submission Portal. Eligible local governments that are classified as non-entitlement towns, cities and counties – generally local governments with fewer than 50,000 residents — should expect to receive this funding through their state government — rather than Treasury and should not request funding through the Treasury Submission Portal.

Metropolitan city has the meaning given that term in section 102(a)(4) of the Housing and Community Development Act of 1974 (42 U.S.C. 5302(a)(4)) and includes cities that relinquish or defer their statues as a metropolitan city for purposes of receiving allocation under section 106of such Act (42 U.S.C. 5306) for fiscal year 2021.[1]

Nonprofit unit of local government means a “city,” as that term is defined in section 102(a)(5) of the Housing and Community Development Act of 1974 (42 U.S.C. 5302(a)(4)), that is not a metropolitan city.[2]

FUNDING AMOUNTS

Congress has allocated Coronavirus State and Local Fiscal Recovery Funds to tens of thousands of eligible state, local, territorial, and Tribal governments.  These allocations include:

Recipient:

Amount (Billions):

States & District of Columbia

$195.3

Counties

$65.1

Metropolitan Cities

$45.6

Tribal Governments

$20.0

Territories

$4.5

Non-Entitlement Units of Local Government

$19.5

 

DISTRIBUTION OF FUNDING

Local governments will receive funds in two tranches, with 50% provided beginning in May 2021 and the balance delivered approximately 12 months later. States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to their date of certification will receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches. U.S. territories will receive a single payment. Tribal governments will receive two payments, with the first payment available in May and the second payment, based on employment data, to be delivered in June 2021.

Additional Information on Split Payments to State Governments

USE OF FUNDING

The Coronavirus State and Local Fiscal Recovery Funds provide eligible state, local, territorial, and Tribal governments with significant funding to meet pandemic response needs and build a stronger, and more equitable economy as the country recovers. Recipients may use these funds to:

  • Support public health expenditures, by, for example, funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
  • Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector;
  • Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic;
  • Provide premium pay for essential workers, offering additional support to those who have and will bear the greatest health risks because of their service in critical infrastructure sectors; and
  • Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.

Within these overall categories, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities.

NARC will release more information on Treasury’s new guidance in the coming days.

______________

[1] Treasury Guidance. Interim Final Rule. Page 134

[2] Treasury Guidance. Interim Final Rule. Page 134

Biden Infrastructure Plan Summary

Biden Announces American Jobs Plan
Yesterday afternoon President Biden introduced his American Jobs Plan in Pittsburgh. This wide-ranging proposal would invest in transportation infrastructure of all types, affordable housing, public schools, colleges and childcare facilities, VA hospitals, water, electricity transmission, electric vehicles, broadband, workforce development and more. 

Plan Overview:
According to the initial outline released by the administration, the plans seeks to: create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China. The plan would put significant focus on targeting investment to traditionally underinvested areas, including neighborhoods bisected by interstate highway facilities, rural areas, and more. The plan also focuses heavily on revitalizing American manufacturing, research and development, and worker and workplace protections. 

The price tag for this initial proposal is estimated at $2 trillion, which represents an investment of approximately 1% of GDP per year for a period of eight years. This would be offset significantly by changes to the tax code, including increases in the taxes that businesses pay. 

An important note: the surface transportation funding contained in the bill is not for a reauthorization package but is above and beyond funding through the FAST Act authorization. In a call with stakeholders today, USDOT also indicated these funds would be performance-based and not distributed by formula. So the details on these proposals will be extremely important to understanding who might receive the funds and how they can be used. 

Below are the areas of focus of the plan and a brief outline of what the investment in each area would accomplish: 

Transportation: $571 billion 

  • Modernize 20,000 miles of highways, roads, and main-streets.  

  • Fix the ten most economically significant bridges in the country in need of reconstruction.

  • Repair the worst 10,000 smaller bridges.

  • Replace thousands of buses and rail cars, repair hundreds of stations, renew airports, and expand transit and rail into new communities.

  • Bridges, highways, roads and main streets: increase of $115 billion. These funds are in addition to and separate from FAST Act surface transportation authorization and likely will not be distributed by formula.

  • Road Safety: $20 billion, to improve road safety for all users, including increases to existing safety programs and a new Safe Streets for All program to fund state and local “vision zero” plans and other improvements to reduce crashes and fatalities, especially for cyclists and pedestrians. 

  • Transit: $85 billion, to modernize existing transit and help agencies expand their systems to meet rider demand.

  • Amtrak/Passenger Rail: $80 billion, to address Amtrak’s repair backlog; modernize the high traffic Northeast Corridor; improve existing corridors and connect new city pairs; and enhance grant and loan programs that support passenger and freight rail safety, efficiency, and electrification. 

  • Electric Vehicles: $174 billion, including for manufacturers, consumers, and state and local governments. Incentivizes the build-out of a national charging network and would replace 50,000 diesel transit vehicles and electrify at least 20 percent of our yellow school bus fleet through a new Clean Buses for Kids Program at the Environmental Protection Agency, with support from the Department of Energy.

  • Airports: $25 billion, including funding for the Airport Improvement Program, upgrades to FAA assets that ensure safe and efficient air travel, and a new program to support terminal renovations and multimodal connections for affordable, convenient, car-free access to air travel.

  • Inland waterways, coastal ports, land ports of entry, and ferries: $17 billion, including a Healthy Ports program to mitigate the cumulative impacts of air pollution on neighborhoods near ports.

  • Equity and Access: $20 billion, for a new program that will reconnect neighborhoods cut off by historic investments and ensure new projects increase opportunity, advance racial equity and environmental justice, and promote affordable access.

  • Large Projects: $25 billion, for a dedicated fund to support ambitious projects that have tangible benefits to the regional or national economy but are too large or complex for existing funding programs.

Resilience: $50 billion 

  • Dedicated investments to improve infrastructure resilience, including investments in FEMA’s Building Resilient Infrastructure and Communities program, HUD’s Community Development Block Grant program and investments in nature-based infrastructure, climate-smart technologies, and water efficiency and recycling.

Water: $111 billion 

  • Replace 100 percent of the nation’s lead pipes and service lines and upgrade and modernize America’s drinking water, wastewater, and stormwater systems, tackle new contaminants, and support clean water infrastructure across rural America.

Broadband: $100 billion 

  • Build high-speed broadband infrastructure to reach 100 percent coverage and reduce the cost of broadband internet service and promote more widespread adoption.

Electric Grid: $100 billion  

  • Build a more resilient electric transmission system and incentivize investment in clean electricity.  

  • $16 billion for plugging orphan oil and gas wells and cleaning up abandoned mines.

  • $5 billion for remediation and redevelopment of Brownfield and Superfund sites.

  • $10 billion for public land conservation, including development of a Civilian Climate Corps.

  • Invests in Economic Development Agency’s Public Works program (while lifting the cap of $3 million on projects) and in “Main Street” revitalization efforts through HUD and USDA.

  • Specifically targets investments in the development of new markets and new industries. 

Affordable Housing: $213 billion 

  • Produce, preserve, and retrofit more than two million affordable and sustainable homes, including a plan to eliminating state and local exclusionary zoning laws; build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers.

  • $20 billion in tax credits through the Neighborhood Homes Investment Act (NHIA).

  • $40 billion to improve the infrastructure of the public housing system in America.

  • Upgrade homes through block grant programs, the Weatherization Assistance Program, and by extending and expanding home and commercial efficiency tax credits.

  • $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation.

Public schools: $100 billion 

  • Upgrade and build new public schools, through $50 billion in direct grants and an additional $50 billion leveraged through bonds.

Colleges: $12 billion 

  • Community college infrastructure.

Child Care Facilities: $25 billion 

  • Upgrade childcare facilities and increase the supply of childcare in areas that need it most.

  • Child Care Growth and Innovation Fund for states to build a supply of infant and toddler care in high-need areas.

  • Expanded tax credit to encourage businesses to build childcare facilities at places of work (employers receive 50 percent of the first $1 million of construction costs per facility).

VA Hospitals: $18 billion 

  • Modernization of Veterans Affairs hospitals and clinics.

Federal Buildings: $10 billion 

  • Modernization, sustainability, and resilience of federal buildings.

  • Federal Capital Revolving Fund to support investment in a major purchase, construction or renovation of Federal facilities.

Care Economy: $400 billion  

  • Expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities by expanding access to long-term care services under Medicaid.

R&D and New Technologies: $180 billion 

  • $50 billion in the National Science Foundation (NSF), creating a technology directorate that will collaborate with and build on existing programs across the government.

  • $30 billion in additional funding for R&D that spurs innovation and job creation, including in rural areas.

  • $40 billion in upgrading research infrastructure in laboratories.

  • $35 billion for climate science innovations, including ARPA-C to develop new methods for reducing emissions and building climate resilience.

  • $5 billion increase in funding for other climate-focused research.

  • $15 billion in demonstration projects for climate R&D priorities.

  • $10 billion R&D investment at HBCUs and other MSI.

  • $15 billion in creating up to 200 centers of excellence that serve as research incubators at HBCUs and other MSIs.

Manufacturing and Small Businesses: $300 billion 

  • $50 billion to create a new office at the Department of Commerce dedicated to monitoring domestic industrial capacity and funding investments to support production of critical goods.

  • $50 billion in semiconductor manufacturing and research, as called for in the bipartisan CHIPS Act. 

  • $30 billion over 4 years to create U.S. jobs and prevent the severe job losses caused by pandemics through major new investments in medical countermeasures manufacturing; research and development; and related biopreparedness and biosecurity.

  • $46 billion to jumpstart clean energy manufacturing through federal procurement.

  • $20 billion in regional innovation hubs and a Community Revitalization Fund, including at least ten regional innovation hubs to leverage private investment to fuel technology development, link urban and rural economies, and create new businesses in regions beyond the current handful of high-growth centers. The Community Revitalization Fund will support innovative, community-led redevelopment projects that can spark new economic activity, provide services and amenities, build community wealth, and close the current gaps in access to the innovation economy for communities of color and rural communities that have suffered from years of disinvestment.

  • $14 billion for NIST to bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness.

  • Quadruple support for the Manufacturing Extensions Partnership.

  • $52 billion in domestic manufacturers.

  • $31 billion in programs that give small businesses access to credit, venture capital, and R&D dollars, including funding for community-based small business incubators and innovation hubs to support the growth of entrepreneurship in communities of color and underserved communities 

  • $5 billion for a new Rural Partnership Program to help rural regions, including Tribal Nations, build on their unique assets and realize their vision for inclusive community and economic development and will empower rural regions by supporting locally-led planning and capacity building efforts, and providing flexible funding to meet critical needs. 

Workforce Development: $100 billion 

  • $40 billion investment in a new Dislocated Workers Program and sector-based training.

  • $12 billion investment for workforce development opportunities in underserved communities.

  • $5 billion over eight years in support of evidence-based community violence prevention programs.

  • $48 billion in American workforce development infrastructure and worker protections, including registered apprenticeships and pre-apprenticeships and strengthening the pipeline for more women and people of color to access these opportunities and supporting community college partnerships that build capacity to deliver job training programs based on in-demand skills.

  • Worker Protections: $10 billion for enforcement of provisions related to workplace safety and health rules.

NARC Letter Concerning Potential MSA Changes

In response to a Federal Register notice that proposes to raise the population threshold for the designation of a Metropolitan Statistical Area (MSA), NARC has submitted comment to the Office of Management and budget opposing the change. Comments on this notice are due by March 19, 2021. NARC members are encouraged to utilize this language for their own purposes if that is helpful for you.

Read the letter here.

Regional Councils Urge Congress to Include Relief for Transit in COVID-19 Stimulus Bill

Twenty-one NARC-member regional councils have written to congressional leadership requesting critical funding for transit agencies to maintain operations as the COVID-19 pandemic continues to strain their resources.

Click here to view the letter.

The agencies call for $32 Billion in emergency federal funds to be included in an upcoming stimulus package to be passed before the end of 2020. This figure has been identified by the American Public Transportation Association (APTA) as what is needed to ensure that transit agencies “can survive and help our communities and the nation recover from the economic fallout of the pandemic.”

COVID-19 has caused massive drops in transit ridership and lost revenue has forced transit agencies across the country to consider service and personnel cuts. With relief funds from the CARES Act running out soon, transit agencies will be forced to make these proposed cuts and layoffs unless further funding is provided to cover the budget gaps created by this year’s lost revenues. 

In the letter, the agencies emphasize how important it will be to have a strong transportation network in order to recover from the shutdowns and other impacts of the COVID-19 pandemic. They also highlight the danger presented by letting transit systems fail or face significant cutbacks; service and maintenance could take years to recover. 

Problem Solvers Caucus Release Language on New COVID-19 Relief Package

Late yesterday afternoon, the bipartisan Problem Solvers Caucus released the long-awaited bill text for their $908 billion coronavirus relief package. The legislation  is a two-part stimulus plan: a $748 billion package focusing on areas of agreement and a separate $160 billion bill that includes the most controversial provisions for lawmakers — additional funding for state and local government and liability protections. It’s important to keep in mind that while many lawmakers see this bill as the most concrete and realistic compromise on COVID-19 relief we have seen in months, House and Republican leadership see it as a marker for broader negotiations and not a final vehicle for aid. Critics of this two-part approach, especially those that are pushing for state and local-directed aid, have pointed out that it defeats the purpose of negotiations to pass contested legislation when it’s not tied to the un-controversial provisions. 

Here is a breakdown of the distribution formula for state, local, and tribal assistance in the proposed Bipartisan State and Local Support and Small Business Protection Act of 2020: 

  • $152 billion in state and local aid through the Coronavirus Relief Fund 
    • 1/3rd would be distributed based on state population in proportion to the U.S. population. 
    • 2/3rd would be distributed based on the proportion of each state’s revenue loss relative to the total revenue losses of all U.S. states. 
  • Each state will receive at least $500 million.  
  • $8 million in funding for Tribes, allocated by 60% population and 40% based on the number of employees for each Tribal entity. 
  • Governors must distribute 40% of the state’s funding to local government but choose how from the following: 
    • Proportional population 
    • Proportional revenue loss 
    • Combination of both. 
  • There are no population thresholds, so every county and municipality would be eligible for funding regardless of size.  
  • Extend the deadline for spending CARES Act Coronavirus Relief Fund (CRF) aid on COVID-related expenses through December 31, 2021.  
  • State funding would be distributed in three tranches.  

NARC HEALS Act Summary

Senate Majority Leader Mitch McConnell (R-KY) took to the Senate floor last week to introduce the HEALS Act, the Senate Republicans’ plan for a coronavirus relief package that would follow up the CARES Act passed earlier this year. “Our nation stands now at an important crossroads in this battle,” McConnell said. “We have one foot in the pandemic and one foot in the recovery. The American people need more help. They need it to be comprehensive. And they need it to be carefully tailored to this crossroads.”

The HEALS Act, an acronym that stands for Health, Economic Assistance, Liability Protection and Schools, would extend and modify several CARES Act provisions as well as provide new support for areas of critical need. The plan comes with a price tag around $1 trillion, noticeably smaller than the $3 trillion HEROES Act proposal passed by the House back in May.

Structurally, the plan is a composite of several different pieces of legislation, each targeting a different priority area, including unemployment benefits, liability protection, Paycheck Protection Program (PPP) continuation, funding for schools, and the development of “Rescue Committees,” among others. Below are links to the text of the individual bills that make up the HEALS Act plan:

The HEALS Act notably does not provide additional aid for state and local governments. However, it would provide some flexibility for previously allocated CARES Act dollars, allowing these funds to be spent past the original December 30, 2020 deadline and expanding allowable uses of relief payments to include lost revenue.

NARC will continue to advocate for regional priorities in upcoming coronavirus legislation. Most recently, NARC joined with local partners at the Association of Metropolitan Planning Organizations (AMPO) and the National Association of Development Organizations (NADO) on a letter urging congressional leaders to include local transportation funding needs in upcoming COVID-19 relief legislation. The full letter can be read here.

Below is a bill-by-bill summary highlighting the most significant items in each piece of the HEALS Act plan:

The American Workers, Families, And Employers Assistance Act

Key items: Unemployment extension, stimulus checks, and state and local funding flexibility

This bill, sponsored by Senate Finance Committee Chair Chuck Grassley (R-IA), would extend the current unemployment supplement provided by the CARES Act but at a lower benefit level. The bill would reduce the previous $600-per-week supplement down to $200 per week while states work on implementing a new supplement system that would be calculated to provide workers with no more than 70% of their previous wages.

The bill would also provide another round of stimulus checks in a manner like those distributed following the CARES Act. Those with incomes under $75,000 per year would receive a $1,200 direct payment and couples making less than $150,000 per year would receive a $2,400 payment. Additionally, those with dependents would receive $500 for each dependent regardless of that dependent’s age. Payments for those with higher incomes would be reduced, with payments phasing out for those making more than $99,000 as individuals and $198,000 as couples. Phaseouts would be set higher for those with dependents.

The bill would also provide some flexibility for state and local governments to spend previously allocated funds provided through the $150 billion Coronavirus Relief Fund (CRF) in the CARES Act. The HEALS Act does not provide additional aid for state and local governments.The provisions for increased flexibility of CRF funds include extending the date for these funds to be spent from December 30, 2020 to 90 days after the last day of the governments’ fiscal year 2021 as well as expanding allowable uses of relief payments to include lost revenue (up to 25% of their CRF allocation.)

For more information, check out the full text of the bill as well as the section-by-section summary.

The Safeguarding America’s Frontline Employees To Offer Work Opportunities Required To Kickstart The Economy Act (SAFE TO WORK Act)

Key item: Liability protections

This bill, led by Senator John Cornyn (R-TX), would provide businesses, schools, and healthcare providers that follow certain guidelines with a five-year liability shield against lawsuits regarding coronavirus. Republicans have indicated that they view liability protections as a critical inclusion in the next aid package while Democrats have voiced opposition on the grounds that this type of measure prioritizes protection for employers and corporations.

For more information, check out the bill text.

Continuing Small Business Recovery and Paycheck Protection Program Act

Key item: PPP continuation

Senate Committee on Small Business and Entrepreneurship Chairman Marco Rubio (R-FL) and Senator Susan Collins (R-ME) have introduced the Continuing Small Business Recovery and Paycheck Protection Program Act, which would permit some small businesses to receive another round of forgivable Paycheck Protection Program loans. The bill would streamline the forgiveness process and would create a $60 billion working capital fund for the hardest hit businesses.

For more information, check out the bill’s full text and its section-by-section summary.

Safely Back to School and Back to Work Act 

Key item: Funding for schools and childcare

This bill from Senate Health and Education Committee Chairman Lamar Alexander (R-TN) would offer relief for some student loan borrowers (although it would not provide an extension for the student loan deferral provided by the CARES Act). Senator Alexander’s proposal also provides additional funding for schools and childcare providers including $105 billion for schools, $15 billion for childcare, $16 billion for testing, and $40 billion for vaccines and other health research. A section-by-section summary of the proposal can be found here.

Time to Rescue United States’ Trusts (TRUST) Act

Key item: Creation of Rescue Committees

This part of the HEALS Act comes from a bill that was initially proposed in 2019 by Senator Mitt Romney (R-UT) and is now being resurrected with some minor changes. The legislation would create “Rescue Committees” to research changes needed to ensure the solvency of government trust funds with outlays greater than $20 billion, including those for highways, Medicare hospital insurance, Social Security Disability Insurance, and Social Security Old-Age and Survivors Insurance.

A note on the Highway Trust Fund: Since the Highway Trust Fund has more than $20 billion in outlays it would be a recipient of a “rescue committee.” The bipartisan committee would be comprised of 12 members of the House and Senate and would work to create a strategy and accompanying legislation to put the trust fund on a path to solvency by June 1, 2021.

A one pager of the legislation is available here, text of the legislation is available here, and a section-by-section of the legislation is available here.

The Coronavirus Response Additional Supplemental Appropriations Act, 2020

Key item: Funding for a range of health and economic aid programs

Senate Appropriations Chairman Richard Shelby (R-AL) sponsored this $306 billion spending proposal that would allocate funds for a variety of federal agencies and programs. There is some overlap between this funding proposal and some of the other elements of the HEALS Act plan, such as the $105 billion in funding for elementary, secondary, and post-secondary education.

Below are some of the largest funding recipients as well as other items of note for regions:

  • $105 billion for elementary, secondary and post-secondary education
  • $16 billion for COVID-19 testing
  • $25 billion for hospitals
  • $15 billion for childcare, including $5 billion through the Child Care and Development Block Grant (CCDBG) and $10 billion in a new flexible grant program
  • $10 billion for airports
  • $1.5 billion for the Low-Income Home Energy Assistance Program (LIHEAP), which is administered by county governments in 13 states
  • $2.2 billion for Tenant-Based Rental Assistance (Section 8 vouchers)

The Restoring Critical Supply Chains and Intellectual Property Act

Key item: Support for domestic PPP production

Senator Lindsey Graham (R-SC) introduced this proposal, which aims to move personal protection equipment (PPE) production to the United States from China using a $7.5 billion tax credit.

For more information read the full text of the bill.

Supporting America’s Restaurant Workers Act

Key item: Business meal tax deduction increase

This bill proposed by Senator Tim Scott (R-SC) would increase the tax deduction for business meals from 50% to 100%.

The bill’s full text can be found here.

Further Reading

For more reading on HEALS Act provisions regarding local government, check out the following resources from NARC and other local government partners:

Summer Federal Appropriations Update

As we approach the dog days of summer, the federal appropriations process is finally heating up. This follows several months of being on hold as Congress tried to address the growing coronavirus pandemic, the staggering drop in unemployment, and cries for action regarding racial injustice and police brutality.

With Election Day less than four months away, several critical questions remain. Will Congress finish its consideration of all twelve appropriations bills before the September 30th fiscal year (FY) 2021 deadline? What are the chances of a continuing resolution and what length will it be? And what impact will the election results have on how the appropriation process plays out? We will consider these questions and more below.

What is happening in the House?

After months on hold because of the focus on coronavirus and police reform packages, the House is now pushing through their appropriations markups at lightning speed. The full Committee passed their FY 2021 302(b) subcommittee allocations last week along with five appropriations bills: Agriculture-Rural Development-FDA, Interior-Environment, Military Construction-VA, Legislative Branch, and State-Foreign Operations. The Committee wrapped up their consideration and approval of the remaining seven bills this week: Commerce-Justice-Science, Defense, Energy-Water Development, Financial Services-General Government, Homeland Security, Labor-HHS-Education, Transportation-HUD.

Initial reports are saying that Agriculture-Rural Development-FDA, Interior-Environment, Military Construction-VA, and State-Foreign Operations bills will be combined into a minibus package and considered on the floor late next week. House Majority Leader Steny Hoyer (D-MD) indicated that he wants the House to approve all twelve bills on the floor by the end of July. However, the Homeland Security bill might be held back because of concerns from progressive Democrats about funding levels for customs and border protection and immigrations and customs enforcement.

It is worth noting that these bills will probably be passed mostly or entirely along party lines. Since the Senate must reach a 60-vote threshold to end debate on appropriations bills, whereas the House only needs a majority vote, the Senate has to forge bills that are more bipartisan. This means that these more partisan House bills are likely to sit and not be taken up by the upper chamber for serious consideration.

What is happening in the Senate?

Unlike in the House, crickets can be heard in the Senate Appropriations Committee. The Committee has held just two hearings since March, and both were on issues unrelated to the FY 2021 appropriations process.

It was reported several weeks ago that partisan disagreements on police reform and COVID-19 spending is to blame for the delay of Senate appropriation bill markups. Ranking Member Patrick Leahy (D-VT), noting that offering amendments was a key concern for Democrats, said “There is bipartisan agreement that we need to address the COVID-19 pandemic. And if we want to truly address the issues of racial injustice that George Floyd’s tragic death has brought to the surface… we need to appropriate money for programs that advance these issues.” Committee Republicans, led by Chairman Richard Shelby (R-AL), felt that these issues should be addressed outside of the appropriations process.

Markup notices for their appropriations bills were reportedly postponed due to these disagreements. While it is very likely that most of their bills are already drafted, we probably will not see any markups until the Committee leadership can agree to move forward in a bipartisan way.

What is going to happen next?

There is one thing that is all but guaranteed: there will be a continuing resolution (CR) to keep the federal government open past the September 30th deadline. Between the upcoming August recess and the desire of members to be home to campaign for competitive races, there are not a lot of congressional workdays left on the calendar.

This continuing resolution will likely be a short-term, stopgap solution just to get Congress through the FY 2021 deadline and election season. Although a specific date is hard to determine, it would likely extend current federal funding levels to at least early to mid-December.

The election outcome is also likely to influence how the federal appropriations wraps up. History tells us that during an election year, lawmakers are likely to hold an average of seven appropriations bills over until the next calendar year. They say to the victor goes the spoils – as well as the incentive to shape the final bills once the winning party takes control. If the Democrats win the presidency and/or the Senate, we can certainly expect them to punt the bills into 2021 when they will have more influence over the process.  

Stay tuned to eRegions, Transportation Thursdays and the Regions Lead blog for the latest federal appropriations updates.

NARC’s Heroes Act Summary

This past Friday, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (Heroes Act). The 1,815-page legislation would provide a $3 trillion follow-up to the $2.2 trillion CARES Act aid passed into law in March.

The HEROES Act, developed by House Democrats, includes a variety of Democratic priority items and passed the House with only one Republican vote. While the bill has little chance at passage in the Republican-controlled Senate and has already drawn a veto threat from the White House, it creates a foundation for coronavirus-aid negotiations to move forward.

Particularly significant for regions is the focus that the bill puts on state and local funding, which was an advocacy priority for NARC and other local partners. The bill would provide $915 billion for state, local, tribal, and territorial funding, with $375 billion of that funding going to local governments.

The bill also includes a variety of other provisions including $435 billion for another round of direct payments to households and $100 billion to provide emergency assistance for low-income renters at risk of eviction.

Continue reading below for a further breakdown of the bill’s contents, with a focus on key items for regions including transportation and economic development provisions:

Local & State Budgetary Relief

SALT Deduction – Eliminates the limitation on the deduction for state and local taxes for taxable years beginning on or after January 1, 2020 and on or before December 31, 2021.

Local Fiscal Relief – $375 billion in funding to assist local governments with the fiscal impacts from the public health emergency caused by the coronavirus.

Tribal Fiscal Relief – $20 billion in funding to assist Tribal governments with the fiscal impacts from the public health emergency caused by the coronavirus.

CARES Act Coronavirus Relief Fund Repayment to DC – Provides an additional $755 million for the District of Columbia to assist with the fiscal impacts from the public health emergency caused by the coronavirus.

State Fiscal Relief – $500 billion in funding to assist state governments with the fiscal impacts from the public health emergency caused by the coronavirus.

Elections – $3.6 billion for grants to States for contingency planning, preparation, and resilience of elections for Federal office.

Transportation

  • Federal Highway Administration: $15 billion for Federal Highway Administration programs ($14.775B for States and District of Columbia, $150M for Tribal Transportation Program, $60M for Puerto Rico Highway Program, $15M for Territorial Highway Program) apportioned in the same ratio as under fiscal year 2020 appropriations legislation
    • Suballocation: A portion of funds to states are further suballocated to areas with population greater than 200,000 in the same ratio that funds were suballocated to these areas in fiscal year 2020 approprations
    • Eligible Uses: All funds (for States and the suballocated portion) can be used for:
      • Activities allowed under the Surface Transportation Block Grant Program;
      • administrative and operations expenses;
      • information technology needs; and
      • availability payments.
    • 100 Percent Federal Share: Funds obligated under this act and any funds subject to obligations limitations in the FY2020 transportation appropriations that are obligated after the date of passage of this legislation are eligible for a federal share of costs up to 100 percent.
  • Federal Transit Administration: $15.75 billion for Public Transportation Emergency Relief ($11.75B for grants to urbanized areas with population over 3M; $4.0B for grants to transit agencies that require significant additional assistance due to coronavirus)

Economic and Community Development

Community Development Block Grant –$5 billion for coronavirus response and to mitigate the impacts in our communities to be distributed by formula to current grantees.

Homeless Assistance Grants – $11.5 billion for Emergency Solutions Grants to address the impact of coronavirus among individuals and families who are homeless or at risk of homelessness and to support additional homeless assistance, prevention, and diversion activities to mitigate the impacts of the pandemic.

Emergency Rental Assistance – $100 billion to provide emergency assistance to help low income renters at risk of homelessness avoid eviction due to the economic impact of the coronavirus pandemic.

Housing for the Elderly – $500 million to maintain operations at properties providing affordable housing for low income seniors and to ensure housing providers can take the necessary actions to prevent, prepare for, and respond to the coronavirus pandemic. To ensure access to supportive services for this vulnerable population, this includes $300 million for service coordinators and the continuation of existing congregate service grants for residents of assisted housing projects.

Housing for Persons with Disabilities – $200 million to maintain operations at properties providing affordable housing for low income persons with disabilities, and to ensure housing providers can take the necessary actions to prevent, prepare for, and respond to the coronavirus pandemic.

Census Bureau, Periodic Censuses, and Programs – $400 million for expenses due to delays in the 2020 Decennial Census in response to the coronavirus.

Census Bureau, Current Surveys, and Programs – $10 million for expenses incurred as a result of the coronavirus.

Supplemental Nutrition Assistance Program (SNAP) – Provides $10 billion to support anticipated increases in participation and to cover program cost increases related to flexibilities provided to SNAP by the Families First Coronavirus Response Act.

Broadband – $1.5 billion to close the homework gap by providing funding for WiFi hotspots and connected devices for students and library patrons, and $4 billion for emergency home connectivity needs.

Assisting Small Businesses – $10 billion in grants to small businesses that have suffered financial losses as a result of the coronavirus outbreak.

Indian Health Service – $2.1 billion to address health care needs related to coronavirus for Native Americans.

Department of Labor – $3.1 billion to support workforce training and worker protection activities related to coronavirus, including:

  • $2 billion to support worker training;
  • $25 million for migrant and seasonal farmworkers, including emergency supportive services;
  • $925 million to assist States in processing unemployment insurance claims;
  • $15 million for the federal administration of unemployment insurance activities;
  • $100 million for the Occupational Safety and Health Administration for workplace protection and enforcement activities in response to coronavirus, including $25 million for Susan Harwood training grants that protect and educate workers;
  • $6.5 million for the Wage and Hour Division to support enforcement and outreach activities for paid leave benefits; and
  • $5 million for the Office of the Inspector General.

Centers for Disease Control and Prevention – $2.1 billion to support federal, state, and local public health agencies to prevent, prepare for, and respond to the coronavirus, including:

  • $2 billion for State, local, Territorial, and Tribal Public Health Departments; and
  • $130 million for public health data surveillance and analytics infrastructure modernization.

Administration for Children and Families – $10.1 billion to provide supportive and social services for families and children through programs including:

  • $7 billion for Child Care and Development Block Grants;
  • $1.5 billion for the Low Income Home Energy Assistance Program (LIHEAP);
  • $1.5 billion to support paying water bills for low income families$50 million for Family Violence Prevention and Services;
  • $20 million for Child Abuse Prevention and Treatment Act (CAPTA) State Grants; and
  • $20 million for Community Based Child Abuse Prevention Grants.

Administration for Community Living – $100 million to provide direct services such as home delivered and prepackaged meals, and supportive services for seniors and disabled individuals, and their caregivers.

Economic Development Administration:

  • Application of Law: Temporarily waives prohibition on using federal funds to pay for consultants or counsel to allow EDA grantees to pay consultants to help develop grant applications for funds under the CARES Act.
  • Federal Share: Temporarily waives matching fund requirements due to plummeting local government revenues for grants funded under the FY 19 disaster supplemental, CARES Act supplemental funding, and FY 20 appropriations.
  • Disaster Recovery Office: Grants EDA disaster hiring authority, which it currently does not have, and defederalizes the EDA revolving loan funds, which are vital lifelines to small, family owned businesses.

Additional Recovery Rebates to Individuals & Families

Provides a $1,200 refundable tax credit for each family member that shall be paid out in advance payments, similar to the Economic Impact Payments in the CARES Act. The credit is $1,200 for a single taxpayer ($2,400 for joint filers), in addition to $1,200 per dependent up to a maximum of 3 dependents. The credit phases out starting at $75,000 of modified adjusted gross income ($112,500 for head of household filers and $150,000 for joint filers) at a rate of $5 per $100 of income.

FURTHER READING

For more information on the CARES Act check out these other resources:

NARC Analysis: CARES Act

This afternoon, the House of Representatives passed The Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) following an earlier vote this week by the Senate. The bill is intended to provide the country with $2.3 trillion of aid to counter the physical and economic effects of the COVID-19 pandemic. This legislation is the third COVID-19 bill to be developed by Congress, following the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074) and the Families First Coronavirus Response Act (H.R. 6201).

The CARES Act, the single largest economic stimulus package in American history, faced a brief challenge in the House when Representative Thomas Massie (R-KY) attempted to force a recorded roll call vote on the bill. Congressmembers from both sides of aisle traveled quickly to Washington to establish a quorum, denying Massie’s attempt and passing the legislation with a voice vote.

Following the successful House vote, the bill will now be sent to the President, who is expected to quickly sign it into law.

Below are key items from the CARES Act, including a table of top-level figures, and summaries of the legislation’s primary areas of support, including support for state and local government, transportation, individuals, and businesses.

Top Level Funding Figures (~$2.3 Trillion Total)

SUPPORT FOR STATE AND LOCAL GOVERNMENT

State & Local Government Support (New Coronavirus Relief Fund) ($150 Billion)

The legislation provides $150 billion specifically for states, tribes, territories, and some local areas. And provides $8 billion for Tribes and $3 billion for territories (including, oddly, the District of Columbia, which is normally treated as a state for such purposes). Of the remaining $139 billion, funds are distributed to each state based on the state’s population relative to the population of the nation as a whole.

Of the amount each state receives, up to 45% of funds are available to “units of local governments,” which is defined as a county, municipality, town, township, village, parish, borough, or other unit of general government below the State level with a population of 500,000 or greater. A local area would qualify to receive a portion of funding that is equivalent to the proportion the local government’s population bears to the population of the state as a whole.

SNAP, Family Services and Housing ($42 Billion)

$25 billion in additional funding will be provided for the Supplemental Nutrition Assistance Program (SNAP) and for other child nutrition programs to support states and localities in meeting growing need for food assistance as a result of coronavirus.

$4 billion in Homelessness Assistance Grants would be provided to state and local governments to address coronavirus among the homeless population. 

CDBG ($5 Billion)

The bill provides $5 billion through the Community Development Block Grant Program (CDBG) for services for senior citizens, the homeless, and public health services. This includes $2 billion distributed using the normal CDBG formula; $1 billion to states based on a formula developed by HUD for COVID-19; and $2 billion to states and localities based on a formula to be developed by HUD within 30 days.

FEMA Disaster Relief Funding ($45 Billion)

$45 billion is being provided in funding for FEMA with $25 billion going to areas with major disaster declarations, like Washington State and New York State. The remaining $15 billion will be used for all purposes allowed under the Stafford Act.

EDA Funding ($1.5 Billion)

The bill allocates $1.5 billion to the Economic Development Administration through September 30, 2022. This will help regions mitigate the local economic crisis and rebuild impacted industries such as tourism or manufacturing supply chains.

USDA-Rural Development Programs ($145.5 million)

The stimulus package provides an additional $20.5 million for the Rural Business Program under the Rural Business Cooperative Service to support loans for rural business development programs. It allocates $25 million for the Distance Learning and Telemedicine Program which helps provide broadband services to rural communities to support vital distance learning and telemedicine. The bill also provides $100 million in grants to the ReConnect pilot program to provide broadband services to rural areas to meet the Federal Communications Commission speed standards of 10 Mbps downstream and 1 Mbps upstream.

Dislocated Workers National Reserve ($345 million)

The bill provides $345 million for dislocated workers (through September 30, 2022) to prepare for and respond to layoffs resulting from the COVID-19 pandemic.

Homeless Assistance Grants ($4 billion)

The stimulus package provides $4 billion to enable state and local governments to provide effective, targeted assistance to contain the spread of COVID-19 among homeless individuals. It will also provide homelessness prevention funding for individuals and families who would otherwise become homeless because of the coronavirus pandemic.

Project-Based and Tenant-Based Rental Assistance ($2.25 billion)

The package provides $1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus. $1.25 billion for tenant-based rental assistance will be provided to preserve Section 8 vouchers for seniors, the disabled, and low-income working families.

Section 202 Housing for the Elderly ($50 million)

This $50 million in funds will help maintain housing stability and services for low-income seniors.

Section 811 Housing for Persons with Disabilities ($15 million)

The bill provides $15 million to make up for reduced tenant payments as a result of the coronavirus pandemic.

SUPPORT FOR TRANSPORTATION

In total, the bill provides $114 billion for transportation-related purposes, $88 billion of which for aviation-related grants (as well as industry loans and loan guarantees). Of the remaining $26 billion, most of that goes to transit ($25 billion) and Amtrak ($1+ billion).

Transit ($25 Billion)

The bill provides $25 billion for “Transit Infrastructure Grants” to allow transit agencies to “prevent, prepare for, and respond to coronavirus.” These funds are treated as if they are provided under 49 U.S.C. 5307 (Urbanized Area Formula Grants) and 49 U.S.C. 5311 (Formula Grants for Rural Areas), but are distributed in the same proportion as the funds in fiscal year 2020 appropriations under 5307, 5311, 5337 (State of Good Repair Grants) and 5340 (Apportionments based on growing States and high density States formula factors). Funds under 5337 are added to 5307 funds and administered under 5307.

The funds will be distributed in seven days based on FY2020 apportionment formulas. The limitation on the use of funds for operating expenses in urban areas is waved. All of the funds, regardless of which program the funds come through, is for “reimbursement for operating costs to maintain service and lost revenue due to the coronavirus public health emergency, including the purchase of personal protective equipment, and paying the administrative leave of operations personnel due to reductions in service.” These additional operating funds DO NOT need to appear in a TIP, STIP, or LRTP to quality.

Finally, the funds for this section are from General Treasury Funds, not the Highway Trust Fund, and they are not subject to any limitation on obligations. Eligible projects can be funded with 100% federal funds.

Harbor Maintenance Trust Fund

The bill contain a provision that impacts new receipts into the Harbor Maintenance Trust Fund, treating these funds as mandatory spending not subject to spending caps (and therefore making the funds easier to spend; previously, these funds would require a spending offset). This provision does not affect the spending down of the current HMTF balance (which is $9 billion or so), but does prevent the balance from continuing to grow. This provision will take effect on Jan. 1, 2021 or upon passage of the next Water Resource Development Act (WRDA).

Amtrak ($1 Billion)

Just over $1 billion is provided for Amtrak, including $492 for Northeast Corridor grants and $526 million for National Network grants. Reduces required payment from states for “State-Supported Routes” and sets aside $239 million from National Network grants in lieu of an increase in a state’s payment.

Aviation ($42 Billion [Excluding Loans & Loan Guarantees])

Much of the transportation-related funding in the bill is provided for aviation purposes, including $32 billion in direct grants, $46 billion for loans and loan guarantees (out of the $500 billion loan and loan guarantees program), $10 billion for airport grants, and suspension of collection of Airport and Airway Trust Fund excise taxes for the remainder of the calendar year. In addition, an additional $56 million is provided for Essential Air Service.

General Highway Provision

The bill temporarily allows truck weight limits on the Interstate system to be exceeded for trucks carrying emergency supplies, to be in place through September 30, 2020 so long as the disaster declaration remains in effect.

SUPPORT FOR INDIVIDUALS

Unemployment Benefits ($260 Billion)

The bill changes unemployment insurance benefits in several dramatic ways. The bill provides unemployed workers with their basic state unemployment benefits (about $300 per week) plus a federal supplement of $600 per week for up to four months. The bill also extends state benefits for 13 weeks.  This results in up to 39 weeks of benefits for many workers. In addition, the bill provides incentives for states to waive their waiting periods, and makes unemployment compensation available to part-time, self-employed, and gig workers as well.

Notably, this bill does not contain an amendment which was requested by many local government partners to remove a provision that requires states, local governments and their political subdivisions and instrumentalities to provide paid sick leave, while prohibiting these governmental entities from receiving the tax credits available to private employers.

Stimulus Checks ($290 Billion)

Checks will be sent to Americans in amounts of $1,200 per adult and $500 per child. Check eligibility will be phased out above $75,000 of income for individuals and $150,000 of income for couples.

Tax Reductions for Individuals ($20 Billion)

The bill would provide several tax reduction avenues for individuals including allowing HSA purchases of menstrual Products and temporarily waiving retirement minimum distribution rules.

SUPPORT FOR EDUCATION SYSTEMS

Education Spending ($32 billion)

An education stabilization fund for states, school districts, & higher education institutions will be provided $31 billion. Other Department of Education programs will receive approximately another $1 billion in funding.

SUPPORT FOR HEALTH SYSTEMS

Hospitals and Health Care ($180 Billion)

$100 billion of funding in the bill is being put toward hospitals responding to COVID-19. Other funding will go to drug access; CDC, FDA, NIH, IHS, & other health-related agencies; care for veterans; and the replenishing of the nation’s stockpile of medical supplies.

SUPPORT FOR BUSINESSES

Small Business Support ($377 Billion)

Small business funding will be provided in three ways:

$10 billion of funding is being provided for Economic Injury Disaster Loans (EIDL) for grants up to $10,000 to cover immediate operating costs for businesses.

$350 billion is allocated for the Small Business Administration (SBA) to provide loans of up to $10 million per business. Use of that money is flexible as long as businesses keep their workers employed through the end of June.

Lastly, $17 billion will be for the SBA to cover 6 months of payments for small businesses with existing SBA loans.

Large Business Support ($510 Billion)

A large portion of the bill will be used to provide loans and loan guarantees for large companies, particularly for those industries hardest hit by COVID-19 such as airlines.

Tax Reductions for Businesses ($280 Billion)

The bill would loosen caps imposed by the Tax Cuts & Jobs Act on interest deductibility & operating losses, provide payroll tax credits for businesses who retain workers at a loss, and delay employer payroll tax payments from 2020 to 2021 & 2022       $12. The bill would also introduce a very COVID-19-specific provision allowing liquor distillers to make hand sanitizer tax-free.        

FURTHER READING

For more information on the CARES Act check out these other resources:

2019 State of the Union Address: NARC Supports Call for Infrastructure Development

2019 State of the Union Address: NARC Supports Call for Infrastructure Development

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Among multiple 2019 initiatives mentioned during his Tuesday night State of the Union Address, President Donald Trump spoke of his desire to work with Congress to develop bipartisan legislation to “deliver new and important infrastructure investment.” Emphasizing the critical nature of these improvements, the President added, “this is not an option. This is a necessity.”

 “Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure. I know that the Congress is eager to pass an infrastructure bill — and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting edge industries of the future. This is not an option. This is a necessity.”

NARC strongly agrees that improvements to America’s infrastructure must be treated as a necessity rather than an option. Regions across the country critically need a wide range of improvements to infrastructure systems including transportation, water, energy, broadband, and public safety.

NARC looks forward to working with the Administration and Congress to develop a bipartisan infrastructure package in 2019.

Full text of the President’s remarks can be read here.