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CARES Act Support for State and Local Governments – Various Purpose Grant Programs

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) includes a number of resources for state and local governments to seek financial assistance due to the COVID-19 pandemic.  The following is a brief summary of certain significant various-purpose grant programs under the CARES Act benefitting state and local governments in their efforts to prevent, prepare for, and respond to COVID-19.

Various Purpose Grant Programs

Under the CARES Act, the following federal departments have received relief funds for the purpose of making grants:

  • Department of Commerce
    • $1.5 billion (less deductions of up to two percent of the funds for salaries and expenses related to administration and oversight activities and $3 million allocated to the Inspector General for related audits and investigations) to provide economic adjustment assistance grants through the Economic Development Administration.
    • Grant money may be used for development of public facilities, public services, business development (including funding of a revolving loan fund), planning, technical assistance, training, and any other assistance to alleviate long-term economic deterioration and sudden and severe economic dislocation and further economic adjustment objectives.
    • Eligible recipients for the grants include: (i) states, (ii) political subdivisions of states (including a special purpose unit of a state or local government engaged in economic or infrastructure development activities, or a consortium of political subdivisions), (iii) economic development districts; (iv) Indian tribes; (v) an institution or consortium of institutions of higher education; or (vi) a public or private nonprofit organization acting in cooperation with a political subdivision of a state.
  • Department of Housing and Urban Development (HUD)
    • $5 billion for community development grants, of which: (i) $2 billion is to be distributed pursuant to Section 106 of the Housing and Community Development Act of 1974 to grantees that received allocations pursuant to the same formula used in fiscal year 2020; (ii) $1 billion is reserved for direct distribution to states and insular areas to prevent, prepare for, and respond to COVID-19 within the state or insular area, including activities within entitlement and non-entitlement communities, based on public health needs, risk of transmission of COVID-19, number of COVID-19 cases compared to the national average, economic and housing market disruptions, and other factors, as determined by HUD; and (iii) $2 billion is reserved for direct distribution to state and local governments, at the discretion of HUD, based on a formula to be developed by HUD, prioritizing risk of transmission, number of cases compared to the national average and economic and housing market disruptions resulting from COVID-19.
  • Department of Justice
    • $850 million to be awarded pursuant to the allocation formula used in FY 2019 for the Edward Byrne Memorial Justice Assistance Grant program to assist state and local governments with law enforcement programs in response to COVID-19.
  • Department of Health and Human Services (HHS)
    • $250 million for grants and cooperative agreements with certain eligible entities (including states and political subdivisions of states) that are grantees or sub-grantees of the federal Hospital Preparedness Program authorized in Section 319C-2 of the Public Health Service Act or that meet other criteria prescribed by the HHS Secretary. Such entities may use the funds to improve surge capacity and enhance community and hospital preparedness for, and response to, public health emergencies.
    • $1.5 billion in Centers for Disease Control and Prevention (CDC) grants for state and local governments and tribal organizations to carry out COVID-19 preparedness and response activities, including grants for the rent, lease, purchase, acquisition, construction, alteration, or renovation of non-federally owned facilities to improve preparedness and response capability at the state and local level.
    • $1 billion to provide grants to states for a wide range of community-based activities under the Community Services Block Grant Act.
    • $100 billion for the Public Health and Social Services Emergency Fund for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care-related expenses or lost revenues attributable to COVID-19. “Eligible health care providers” means public entities, Medicare and Medicaid enrolled suppliers and providers, and such other for-profit entities and not-for-profit entities that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
  • Department of Agriculture
    • $8.8 billion in additional funding for Child Nutrition Programs.
  • Federal Transit Administration
    • $25 billion in Transit Infrastructure Grants to states for COVID-19-related projects. The grants will be provided in accordance with existing transportation grant programs, with funds allocated among the states in the same ratio as funds were provided in fiscal year 2020 appropriations.
  • Federal Aviation Administration
    • $9.4 billion for commercial service airports (meaning a public airport receiving scheduled passenger aircraft service, with funds allocated based on the number of passenger boardings per year) to prevent, prepare for, and respond to COVID-19.
      • A “public airport” means an airport used or intended to be used for public purposes (A) that is under the control of a public agency and (B) of which the area used or intended to be used for landing, taking off, or surface maneuvering of aircraft is publicly-owned.
    • $500 million to pay a federal share of 100% of the costs for which a grant is made under the Further Consolidated Appropriations Act of 2020.
  • Election Assistance Commission
    • $400 million to states to prevent, prepare for, and respond to COVID-19 during the 2020 federal election cycle.
  • Department of Education
    • Education Stabilization Fund – Consists of $30.750 billion to be distributed among states, state educational agencies, local educational agencies, higher education institutions and other entities providing educational services impacted by COVID-19; provided, however, that recipients of such funds must, to the greatest extent practicable, continue to pay their employees and contractors during the period of any disruptions or closures related to COVID-19. After deductions for certain other education-related programs, the funds will be allocated as follows:[1]
      • Approximately $3 billion in grants to states to: (i) provide emergency support to local educational agencies and higher education institutions serving students within the state that have been most significantly affected by COVID-19, (ii) provide support to any other higher education institution, local educational agency, or education-related entity within the state deemed essential for carrying out emergency educational services.
      • Approximately $13.2[2] billion in grants to state educational agencies (with 90% of the grant funds allocated by the state educational agencies as subgrants to local educational agencies) to: (i) support activities authorized by the Elementary and Secondary Education Act of 1965; (ii) coordinate preparedness and response efforts; (iii) provide principals and other school leaders with necessary resources; (iv) address the needs of low-income students, children with disabilities, English learners, racial and ethnic minorities, homeless students, and students in foster care; (v) develop and implement procedures and systems to improve preparedness and response efforts; (vi) fund training and professional development on sanitation procedures; (vii) purchase cleaning and sanitization supplies; (viii) plan for and coordinate educational services during long-term closures; (ix) purchase educational technology for students; (x) provide mental health services; (xi) plan and implement activities related to summer learning and supplemental afterschool programs; and (xii) other activities that are necessary to maintain the operation of and continuity of services in local educational agencies and continuing to employ existing staff.
      • Approximately $14 billion to higher education institutions to: (i) defray expenses incurred relative to COVID-19 (including lost revenue, reimbursement of expenses already incurred, technology costs associated with the transition to distance learning, faculty and staff trainings and payroll), and (ii) otherwise cover costs associated with significant changes to the delivery of instruction due to COVID-19; provided, however, that with respect to this subpart (ii), not less than fifty percent (50%) of such funds is used to provide financial aid grants to students for expenses related to the disruption of campus operations.
    • Safe Schools and Citizenship Education – $100 million in aid to elementary, secondary and postsecondary schools to supplement funds otherwise available for “Project SERV” (Project School Emergency Response to Violence), including to help clean and disinfect affected schools, and assist in counseling and distance learning and associated costs.

As noted above, the foregoing is only a brief summary of certain of the various-purpose grant programs established under the CARES Act.  In applying for such a grant, applicants should work with their counsel to ensure that they meet each of the conditions for participation set forth not only in the CARES Act, but also in the underlying enabling legislation governing the particular grant program.  If you have any questions regarding these provisions of the CARES Act, please contact Neal Pandozzi at npandozzi@apslaw.com or Jonathan Cabot at jcabot@apslaw.com.

[1] Approximate amounts are based on the allocations provided in Section 18001(b) of the CARES Act.

About The Authors

Jonathan L. Cabot

Jonathan is a member of the firm’s Public Finance and Business & Corporate Law Groups.  His practice involves mergers and acquisitions,… Read More

Neal R. Pandozzi

Neal Pandozzi is Co-Chair of the firm’s Public Finance group.  He has served as bond counsel, disclosure counsel, borrower’s counsel, underwriter’s… Read More

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