The Legislation’s Key Provisions for Public Agencies and Local Governments

Today, the U.S. House of Representatives passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, and it was signed into law by the President. This legislation is the third major legislative action Congress has signed into law to address the COVID-19 crisis. Information about the earlier measures can be found here. This legislation is the third major legislative action Congress has signed into law to address the COVID-19 crisis. Information about the earlier measures can be found here.

Below are key provisions for public agencies and local governments:

• $500 billion for loans and assistance to companies and state and local governments. Along with this funding, the bill directs the Treasury Department to endeavor to establish a program that provides liquidity to the financial system that supports lending to states and municipalities.
• $150 billion for the Coronavirus Relief Fund for states and local governments for “necessary expenditures incurred due to the public health emergency with respect to” COVID-19. The State of California and its local governments, with populations of 500,000 or more, are eligible to receive roughly $15.3 billion from this fund.
• $45 billion for the FEMA Disaster Relief Fund, which FEMA draws on to provide public and individual assistance for major disasters. Major Disaster Declarations have been approved in at least a dozen states, with more expected. State emergency management agencies are setting their own timelines for submitting Requests for Public Assistance, a key step in becoming eligible for FEMA reimbursement. California is currently requesting submission of these requests by April 17.
• $100 billion for a new program at the Department of Health and Human Services to provide grants to hospitals, public entities, nonprofits and Medicare and Medicaid enrolled suppliers and institutional providers. The program is to cover unreimbursed health care-related expenses or lost revenues attributable to the public health emergency resulting from the coronavirus to hospitals and health care providers.
• $25 billion to the Federal Transit Administration for grants to public transit agencies.
• $14.25 billion to institutions of higher education for emergency relief to defray expenses, for lost revenue, technology to transfer to distance education, and grants to students.
• $13.5 billion in formula grants to states, which will distribute 90 percent to local elementary and secondary educational agencies for coronavirus response activities, such as implementing long-term closures and purchasing technology for online learning. There is an additional $3 billion to governors for emergency support grants to local educational agencies most impacted by coronavirus.
• $10 billion to the Department of Transportation to help publicly owned commercial airports address the impacts of the COVID-19 crisis.
• $5 billion for Community Development Block Grants. Of that, $2 billion will be allocated to states and local governments who received an allocation under the fiscal year 2020 formula. (This adds roughly 58.8 percent to each city’s fiscal year 2020 allocation.) $1 billion will go directly to states, and $2 billion will be allocated to states, cities, counties and local governments based on the prevalence of risk of COVID-19 and related economic and housing disruption.
• $4 billion for homeless assistance grants to state and local governments. (This adds roughly 6.89 times a cities' fiscal year 2020 allocation.)
• $3.5 billion for a Child Care Development Block Grant program to support child care and early education programs.
• $3 billion for housing providers to assist renters in the Department of Housing and Urban Development’s Section 8 and other rental assistance programs.
• $1.5 billion to the Centers for Disease Control and Prevention for state and local preparedness and response grants.
• $1.5 billion to the Economic Development Administration for economic adjustment assistance for communities.
• $1 billion for the Community Services Block Grant Program to help low-income communities address the economic consequences of the coronavirus response.
• $850 million to the Department of Justice for state and local law enforcement assistance grants from the Byrne-Justice Assistance Grant Program. (This adds roughly 2.385 times a recipient’s fiscal year 2020 allocation.)
• $685 million for public housing operating funds.
• $400 million for grants to help states prepare for the 2020 elections.

This is an unprecedented level of funding that can support public agencies and local governments in addition to the payments to individual taxpayers, $600 per week in additional unemployment benefits, and $349 billion in Small Business Administration loans that could be partially forgiven.

The CARES Act also makes adjustments to clarify the payment caps for the new paid sick leave requirements in the Families First Coronavirus Response Act that was enacted on March 18. The Families First’s new paid leave requirements begin on April 1 for all public employers, and for private employers with up to 500 employees.

The situation regarding COVID-19 is changing daily, and it is expected that the actions summarized here will not be the last that the federal government takes to address the effects of COVID-19. As additional developments arise, Best Best & Krieger will provide additional updates.

[View source.]