Print Friendly, PDF & Email

Congress Passes and President Signs into Law Coronavirus 3.5 Relief Package

Late last night, the House sent the latest iteration of a federal COVID-19 relief package, H.R. 266, Paycheck Protection Program and Health Care Enhancement Act, to the President’s desk to be signed into law. Dubbed the coronavirus 3.5 relief package, H.R. 266 builds off of the CARES Act Congress passed last month. This new package provides a total of $484 billion to provide a new installment of funds to the Small Business Administration’s exhausted Paycheck Protection Program, assist hospitals, and support national testing initiatives. Specifically, the package delivers $321 billion to the PPP, of which $60 billion is set-aside for small business economic disaster loans, $75 billion for hospitals and health care systems, and $25 billion for testing efforts.

The bill does not provide supplemental funding to support States and local governments, nor does it provide funding eligibility to Special Districts. H.R. 266 passed the Senate by voice vote and the House approved the package on a roll call vote of 388-5. A brief summary of the key provisions within the bill can be accessed here.

Passing COVID-19 3.5, Congress Begins Discussions and Setting Legislative Markers on Phase IV

Enactment of the COVID-19 3.5 relief package is ushering in what appears likely to be a Washington debate of biblical proportions. On the heels of Senate Majority Leader Mitch McConnell and Republican Leaders in the House comments demanding a more traditional legislative process (in-person debates and voting), coupled with the recommendation that states and local governments should just declare bankruptcy, the prospect for an overwhelming bipartisan next package of assistance seems less likely. Nonetheless, House Speaker Pelosi and Democratic Senate Leader Chuck Schumer have signaled a priority to address state and local economic needs in the next package, including economic assistance for communities with populations under 500,000, ratepayer assistance to help utilities offset losses, and tax credits for the provision of mandatory leave. Perhaps one of the more important assistance issues will involve replenishing a Treasury fund to support all local governments, including special districts, to meet their economic needs because of the revenue losses attributable to the economic impacts of the virus.

In addition to the next round of assistance, the prospect of an infrastructure package looms. Whether it becomes part of the next debate or is reserved for follow-on legislative actions in the summer is unclear. What is clear is the desire, as Treasury Secretary Mnuchin stated, to address infrastructure like roads, bridges and broadband. In the past few weeks, the President has also noted addressing water infrastructure as a matter of interest. The congressional Democrats’ priority seems to be coalescing around the infrastructure framework entitled Moving America and the Environment Forward that was unveiled at the end of January. This framework seeks to jump-start the economy with an invest of almost a trillion dollars targeting support in the form of grants and loans to the nation’s water, transit, roads, airports, railroads, ports, clean energy, and broadband infrastructure needs among other areas.

Treasury Releases Guidance for Coronavirus Relief Fund

On Thursday, the U.S. Department of the Treasury released guidance for State, Territorial, Local, and Tribal Governments regarding the Coronavirus Relief Fund (Title VI of the CARES Act). The guidance provides clarification and examples of eligible and ineligible expenditures of the $150 billion Coronavirus Relief Fund.

Key elements of the Coronavirus Relief Fund guidance include:

Allowable Uses

  • Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency.
  • Expenses for public safety measures undertaken in response to COVID-19
  • Funds may be used to respond directly to the emergency as well as respond to second-order effects of the emergency, such as by providing economic support to those suffering from unemployment or business interruptions due to COVID-19-related business closures.

A key clarification in the guidance is that a state can transfer payments to local governments provided the transfer qualifies as a necessary expenditure incurred due to the public health emergency and meets the other criteria of section 601(d).

Ineligible Uses:

  • Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute.
  • Payroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-19 public health emergency.

Senate Committee Releases Draft Water Infrastructure Bills

This week, the Senate Committee on Environment and Public Works’ Chairman John Barrasso (R-WY) and Ranking Member Tom Carper (D-DE) unveiled the America’s Water Infrastructure Act of 2020 (AWIA 2020) and the Drinking Water Infrastructure Act of 2020 (DWIA 2020) draft bills. The two drafts represent the first iteration of the Senate’s Water Resources Development Acts (WRDA) for 2020 that will deliver a comprehensive federal approach to address the nation’s water infrastructure needs.

The committee separated U.S. Army Corps of Engineers (USACE) and clean water infrastructure provisions, and drinking water provisions into two bills. AWIA 2020 provides a total of $17 billion in new federal authorizations to support USACE and USEPA’s municipal wastewater, stormwater, and other clean water infrastructure needs, including $3 billion to support the SRF Program. DWIA 2020 provides a total of $2.5 billion to address the nation’s drinking water needs to support the SRF Program and PFAS cleanups.

Since the committee is unable to meet for public hearings due to the COVID-19 crisis, the committee is seeking electronic input from five invited organizations to comment on the two draft bills. Following the receipt of the input, the committee will accept committee member questions to the five witnesses by April 24. Responses from the invited speakers as well as input from others must be received by May 1.

Access to review the discussion drafts and section-by-section summaries of the drafts can be found below.

Congress Looks to Provide Relief for Rural Counties

This week, Members of Congress circulated Dear Colleague letters in support of a long-term solution for Payments in Lieu of Taxes (PILT) and Secure Rural Schools and Community Self-Determination Act (SRS) programs to help stabilize rural government funding. The long-term solution, not identified in the letters, would be to make funding for these programs permanent.

PILT payments to local governments help offset losses in property taxes due to nontaxable Federal lands and are used locally for roads and schools. The SRS program provides assistance to rural school districts affected by the decline in revenue from timber harvests on federal lands. Senators Dianne Feinstein (D-CA), Kamala Harris (D-CA) and Mike Crapo (R-ID) are leading the effort in the Senate. The House letter is being circulated Representatives Peter DeFazio (D-OR) and Cathy McMorris Rodgers (R-WA).

When is a Nonpoint Discharge Required to Have a Permit, Supreme Court Splits the Difference

On the same week that the U.S. Environmental Protection Agency (USEPA) issued its final decision on the Waters of the U.S. Rule (WOTUS), the U.S. Supreme Court handed down its decision on whether a discharge into a basin that migrates into a federally protected surface water body is subject to Clean Water Act regulation, voting 6-3 on the decision.

The case of County of Maui vs Hawaii Wildlife Fund focused on the County’s use of basins for discharges that migrated into federally protected surface waters. The decision appears to follow a middle course on deciding when such discharges are required to secure permits suggesting that decisions be made on a case-by-case basis. As noted in the opinion “…a permit is required when there is a dis­charge from a point source directly into navigable waters or when there is the functional equivalent of a direct discharge…”  The Court’s decision, as illustrated by this finding, explicitly rejected the logic that the Administration put forward that the Clean Water Act has no jurisdiction over groundwater supplies. As of this ruling, the issue of whether a Maui-like circumstance requires a permit, due to the migration of groundwater that is impacted by a point source discharge, will be subject to the administrative and judicial whims of each situation, until such time that further legislative clarifications occur.

A River Runs Through It and the Flotsam of Litigation Expected

Amidst the political wreckage of years of contention over the definition of which waters of the U.S. are subject to regulation under the Clean Water Act, the U.S. Environmental Protection Agency (USEPA) and the U.S. Army Corps of Engineers issued the final action to implement the definition of Waters of the United States (WOTUS) on April 21. The action came just hours before the 50th Anniversary of Earth Day. The publication follows the earlier effort in 2019 to finalize the rulemaking that was subsequently required to be subject to further review. With the action this week to implement the rulemaking issued in 2019, the debate over the definition of which waters of the U.S are subject to Clean Water Act regulation will now move to the courts.

Federal Agency COVID-19 Updates For The Week

Federal Emergency Management Agency

FEMA Whole-of-America Weekly Update – Provides a detailed account of FEMA’s and government-wide efforts to respond to the COVID-19 crisis to date.

FEMA PPE Recommendations – FEMA’s updated recommendations and suggestions for how to properly manage personal protective equipment (PPE), especially for those who have a shortfall in PPE supplies.

U.S. Department of the Treasury

State and Local Government Guidance on Eligible Relief Fund Uses – Outlines what eligible and ineligible uses of Coronavirus Relief Fund assistance. The guidance also provides a series of examples of such uses.

FAQs Document for State and Local Government on Eligible Relief Fund Uses – Brief summary of the frequently asked questions regarding the use of the Coronavirus Relief Fund assistance.

Stakeholder COVID-19 Updates For The Week

“Big Seven” Letter To Congress On Relief Package – Letter sent to Congress on Coronavirus 3.5 Relief Package by stakeholders representing various states and local governments interests advocating for specific policy provisions.