Summary of Senate COVID-19 Relief Proposal
December 15, 2020
On December 14, the bipartisan $908 billion Senate COVID-19 relief package was introduced as two separate bills.
STATE AND LOCAL SUPPORT AND SMALL BUSINESS PROTECTION ACT
The first piece of legislation would provide aid funding for state and local governments and business liability protections.
State and Local Funding: The first measure would provide $160 billion for state and local governments to be distributed based on population and revenue losses, with $91.2 billion designated for states; $30.4 billion to counties; $30.4 billion to cities; and $8 billion to tribes.
The funding would be distributed (via the state) through the Coronavirus Relief Fund (CRF). Two-thirds of the state/local funding (approximately $101.34 billion) would be allocated based on the proportion of each state’s revenue losses, and the other third (about $50.66 billion) would be allocated based on population. It should be noted that each state would be entitled to a minimum payment of $500 million. In addition, each state’s allocation is broken down amongst the different levels of government – 60 percent for the state (with up to 5 percent for special districts), 20 percent for counties within the state, and 20 percent for municipalities.
The funding would be distributed in three tranches:
- First tranche: Within 30 days of enactment, $50.66 billion from the population-based funding would be disbursed to states. In addition, needs-based funding (that tracks actual revenue losses incurred by state/local governments from April 1, 2020 to September 30, 2020 relative to the same period in 2019) would also be disbursed within 30 days of enactment. The expectation is that nearly 60 percent (approximately $90 billion) of the $152 billion in funding for state/local governments would be distributed in this tranche.
- Second tranche: Needs-based funding that tracks revenue losses incurred between October 1, 2020 and March 31, 2021 would be disbursed no later than June 1. It’s expected that an additional $52 billion would be allocated as part of this tranche. Funding would be distributed proportionately to states based on revenue loss to ensure that at least $10 billion in funding is still available for the third tranche.
- Third tranche: At least $10 billion would be set aside for the third and final tranche. This is also a needs-based allocation that would provide the remaining funding based on the proportional revenue losses of each state from April 1, 2021 to June 30, 2021.
Governors would be required to distribute funding to local governments no later than 30 days after receipt of the funds and would have a limited set of options to determine the best method to meet the specific needs of their state. Whatever method the Governor chooses, it would need to be applied consistently across the state. The three options for the distribution formula include: proportional population, proportional revenue loss, or a combination of both.
CRF: Pursuant to the legislation, CRF funding could be used to cover expenditures incurred due to COVID-19, including any funds necessary to meet the non-Federal share of any public assistance provided under the Stafford Act. The costs must be incurred between March 1, 2020 and December 31, 2021. Specifically, CRF funds could be used for expenditures in calendar year 2020 or 2021 that the local government would otherwise be unable to make because of decreased or delayed revenues. It also would cover expenditures associated with the distribution, storage, or administration of a COVID–19 vaccine.
In addition, the new measure would extend the deadline for spending CRF funding authorized by the CARES Act from December 30, 2020 to December 31, 2021. It would also expand CRF eligibility to cover decreased or delayed revenues in calendar years 2020 and 2021 and for expenditures associated with the distribution, storage, or administration of a COVID-19 vaccine. The legislation also includes guardrails to ensure that funds are not used to cover enhanced pension obligations. States also would be prohibited from expanding public pension benefits while receiving funds.
Business Liability Protections: The bill establishes a nationwide gross negligence standard for COVID-19 exposure, medical malpractice, and workplace testing claims. Employers would not be subject to liability under federal employment law in COVID-19 exposure cases or change in working conditions related to COVID-19 if the employer was trying to conform to public health standards and guidance.
COVID-19 EMERGENCY RELIEF ACT
The other piece of the agreement would provide $748 billion in emergency assistance for:
Rental Assistance: $25 billion for emergency rental assistance and an extension of the national eviction moratorium from December 31, 2020 to January 31, 2021. At least 90 percent of the funds must be used for payment of rent, rental arrears, utilities and home energy costs, utility and home energy arrears, and related housing expenses; and up to 10 percent of the funds are available for housing stability services. There are also specific guardrails to ensure support for the most in-need households, with a preference for households with 50 percent of area median income and below. Support could cover up to 18 months of arrears and prospective assistance, with prospective assistance limited to no more than 12 months.
Unemployment Insurance: Extends all pandemic unemployment insurance programs (that are set to expire at the end of the year) by 16 weeks and provides an expanded federal benefit of $300 per week over that same time.
Paycheck Protection Program (PPP): $300 billion for a second round of small business assistance, limited to small businesses with 300 or fewer employees that have sustained a 30 percent revenue loss in any quarter of 2020. The bill expands PPP eligibility to include 501(c)(6) organizations (i.e., local chambers of commerce, economic development organizations, and tourism offices) that have 150 employees or fewer.
Agriculture and Fisheries: $13 billion to provide funding to address COVID-related impacts on farmers, ranchers, growers, and fisheries.
Student Loans: Extension of student loan forbearance created in the CARES Act, from January 31, 2021 to April 1, 2021.
Test and Trace: $7 billion for testing and tracing, including $3.5 billion in direct grants to state and local governments, an additional $2.32 billion for testing and tracing to hot spots, and $827.5 million to be used at the HHS Secretary’s discretion to states.
Vaccines: $3.42 billion in direct grants for state and local governments for vaccine development and distribution. The measure would allow states to use funds for tracking systems and data modernization.
Addiction and Mental Health: $3.15 billion to SAMHSA programs for the Substance Abuse Prevention and Treatment Block Grant, the Community Mental Health Services Block Grant, tribal programs, emergency relief, and peer recovery programs and suicide prevention efforts at the CDC. An additional $1.3 billion would be set aside for to the State Opioid Response Grants
Child Care: $10 billion for a new Child Care Stabilization Fund grants program at HHS to provide grants for child care providers.
Nutrition: $13 billion for emergency food assistance, including increased SNAP benefits (by 15 percent) for four months and funding to support food banks and food pantries. It also would expand the Pandemic-EBT program to cover families with children in child care. In addition, the bill includes funding for school and child care meal programs, WIC, senior nutrition services.
Broadband: $10 billion for broadband, including $6.25 billion for State Broadband Deployment and Broadband Connectivity grants; $3 billion for an Emergency Educational Connectivity Fund to provide E-Rate support to educational and distance learning providers to provide hotspots, devices, and other connected devices, and advance digital equity/inclusion; $200 million to the Institute of Museum and Library Services to purchase and distribute Internet-connected devices to libraries in low-income and rural areas; $475 million to the FCC’s COVID-19 Telehealth Program to support efforts of healthcare providers to address coronavirus, including a 20 percent set aside for small, rural health providers.
Low-Income Communities: $12 billion in Community Development Financial Institution (CDFI)/Minority Depository Institution (MDI) targeted emergency investments to help low-income and minority communities withstand the economic impact of the COVID-19 pandemic.
USPS: The bill also eliminates the requirement for USPS to repay the $10 billion loan included in the CARES Act.