Disaster Response and Mutual Aid

House passes $3 trillion COVID-19 response proposal

The House of Representatives on May 15 passed by a vote of 208 to 199 the “Health and Economic Recovery Omnibus Emergency Solutions Act” or the “HEROES Act,” a $3 trillion proposal in response to the COVID-19 pandemic.

The next stop for the bill is the Senate, where it is expected to face significant opposition from Republicans.

The largest portion of the HEROES Act is direct aid to states, local government, tribes, and territories. This assistance is specifically intended to help with revenue losses directly associated with the pandemic and economic downturn it has caused.  

The bill calls for the following funding:

  • State Fiscal Relief: $500 billion in funding to assist state governments with the fiscal impacts from the public health emergency caused by the coronavirus.
  • 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.
  • Fiscal Relief for Territories: $20 billion in funding to assist governments of the Territories with the fiscal impacts from the public health emergency caused by the coronavirus.

Proposal would also appropriate an additional $1.5 billion for LIHEAP

The proposal would also appropriate an additional $1.5 billion for the Low Income Home Energy Assistance Program (LIHEAP).

In addition, section 120403 of the proposal clarifies that for purposes of meeting income eligibility thresholds, states may accept proof of job loss or severe income loss dated after February 29, 2020, such as a layoff or furlough notice or verification of application for unemployment benefits, as sufficient to demonstrate lack of income for an individual or household.

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.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in late March by President Trump included $900 million for LIHEAP to help low-income households pay their utility bills during the crisis.

But the National Energy Assistance Directors Association (NEADA) on April 6 said that due to the depth of the crisis, “this funding only scratches the surface of what families will need to stay afloat.”

Payroll tax credit

The bill also provides to all employers a 30 percent refundable payroll tax credit for expenses reimbursed or paid for the benefit of an employee for reasonable and necessary personal, family, living, or funeral expenses incurred as a result of the presidentially declared disaster related to COVID-19.

The credit percentage is 50 percent for expenses paid to employees if a substantial portion of the services performed by the employee is essential work, as defined for pandemic premium pay reimbursable from the COVID-19 Heroes Fund. No credit is allowed if the expenses are provided in a manner that discriminates in favor of highly compensated employees.

Renters and homeowners

In addition, the bill authorizes $100 billion in Housing and Urban Development grants under the Emergency Solutions Grants program to be used for providing short- or medium-term assistance with rent and rent-related costs (including tenant-paid utility costs, utility- and rent-arrears, fees charged for those arrears, and security and utility deposits).

It also authorizes $75 billion in grants to states, territories, and tribes to address the ongoing needs of homeowners struggling to afford their housing due directly or indirectly to the impacts of the pandemic by providing direct assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.

Municipal Liquidity Facility

The bill also requires the Federal Reserve to expand its Municipal Liquidity Facility. It requires the facility to purchase debt of up to 10 years, rather than two years and to remain in operation through 2021, rather than 2020. Additionally, the facility would be open to any political subdivision of a state with a population of more than 50,000. Also, the Municipal Liquidity Facility would no longer be limited to serving as a lender of last resort.  

APPA on May 11 asked the Federal Reserve System Board of Governors to expand eligibility to participate in the Fed’s Municipal Liquidity Facility to include public power utilities.

The Fed on April 27 said it was “considering expanding the MLF to allow a limited number of governmental entities that issue bonds backed by their own revenue to participate directly in the MLF as eligible issuers.”

“APPA strongly encourages the Fed to do so and, as such, to include public power utilities as eligible issuers,” wrote Joy Ditto, President and CEO of APPA, in comments submitted to the Fed.

Bill also includes debt collection and moratoria on utility shutoffs language

The legislation also includes language drafted by the House Financial Services Committee on debt collection and moratoria on utility shutoffs and by the House  Energy and Commerce Committee that conditions the receipt of aid to “the maximum extent practicable,” to the suspension of electric, natural gas, or water power shutoffs during the COVID-19 national emergency.

A number of public power utilities have proactively taken steps to help customers facing financial difficulties tied to the pandemic including suspending disconnects for non-payment.