Disaster Response and Mutual Aid

Coronavirus relief bill passed by Senate include additional $900 mil for LIHEAP

The U.S. Senate on March 25 voted 96-0 to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other things, the bill provides an additional $900 million for the Low Income Home Energy Assistance Program (LIHEAP).

As Congress moves to respond to the COVID-19 pandemic, additional funding for LIHEAP has been a key priority for the American Public Power Association.

Representatives and Senators recently argued that the allocation of additional funding for LIHEAP was warranted, given that the pandemic is expected to result in widespread financial distress and a spike in unemployment.

The CARES Act also provides an additional $45 billion for the Federal Emergency Management Agency’s Disaster Relief Fund to provide for the immediate needs of state, local, tribal, and territorial governments to protect citizens and help them recovery from the overwhelming effects of COVID-19. Reimbursable activities may include medical response, personal protective equipment, National Guard deployment, coordination of logistics, safety measures, and community services nationwide.

Another section of the bill would provide $350 billion for loan forgiveness grants to small businesses and non-profits to maintain existing workforce and help pay for other expenses like rent, mortgage, and utilities.

The legislation also provides governmental employers a reprieve on unemployment benefits expenses. Most nonprofits, Indian Tribes, and governmental entities do not pay per-worker unemployment taxes and instead have “reimbursable arrangements” with state unemployment programs, which require them to reimburse the state for 100 percent of the cost of unemployment compensation paid to their furloughed or laid off workers. Under the CARES Act, during the period of the COVID-19 national emergency, the federal government will pay 50 percent of the reimbursement for those workers so that their employers could follow public health recommendations. This provision will remain in effect through December 31, 2020.

The bill also provides at least $454 billion for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities. The legislation also includes language to encourage the Federal Reserve to open a loan facility specifically for state and local governments under this program.

In addition, the legislation offers $150 billion in direct aid to states, territories, and tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.

However, the bill does not allow state and local government employers to qualify for the payroll tax credit provided in the Families First Coronavirus Response Act. This credit was intended to offset the cost of providing emergency paid sick leave and paid family medical leave, but governmental employers are specifically excluded from benefiting. Gaining access to this credit was a top priority for APPA and had been included in a House Democratic version of the bill.

The House of Representatives is expected to take up the bill on March 27 and pass it by voice vote.