Federal Stimulus Package Becomes Law in Last Act of 2020 for Washington DC

After the typical wrestling match that Washington D.C. has become in the last decade, Congress and President Trump finally agreed upon a $900 B federal stimulus legislation that appropriated $1.4 T through the reappropriation of previous funds. Targeted industry and economic development highlights of the federal stimulus package includes:

Arts & Entertainment Industry.  Authorizes $15 B for the SBA to make grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25 percent reduction in revenues. The legislation creates a set-aside of $2 billion for eligible entities that employ not more than 50 full-time employees, and any amounts from this set-aside remaining after sixty days from the date of implementation of this program shall become available to all eligible applicants under this section. The SBA may make an initial grant of up to $10 million dollars to an eligible person or entity and a supplemental grant that is equal to 50 percent of the initial grant. In the initial 14-day period of implementation of the program, grants shall only be awarded to eligible entities that have faced 90 percent or greater revenue loss. In the 14-day period following the initial 14-day period, grants shall only be awarded to eligible entities that have faced 70 percent or greater revenue loss. After these two periods, grants shall be awarded to all other eligible entities. Such grants shall be used for specified expenses such as payroll costs, rent, utilities, and personal protective equipment.

Broadband.  The legislation provides $7 B to expand broadband access for students, families and unemployed workers. It includes: a new $3.2 billion Emergency Broadband Benefit that will provide $50 per month for broadband for low-income families; $300 million for rural broadband; $250 million for Federal Communications Commission’s telehealth program; $285 million to fund a pilot program to assist with broadband issues for historically Black colleges and universities; $1.9 billion for “rip and replace” efforts related to Huawei and ZTE equipment in U.S. networks; $1 billion in grants for tribal broadband programs; and $65 million to improve broadband mapping.

Education.  The federal stimulus legislation provides $82 billion for an Education Stabilization Fund to remain available through Sept. 30, 2022. $54.3 billion of this funding for the Elementary and Secondary School Emergency Relief Fund. Schools can use the relief to address learning loss, improve school facilities and infrastructure to reduce the risk of transmitting the coronavirus, and purchase education technology. States must distribute at least 90% of funds to local education agencies based on their proportional share of ESEA Title I-A funds. States have the option to reserve 10% of the allocation for emergency needs as determined by the state to address issues responding to the COVID-19 pandemic. $4.1 billion is for the Governors Emergency Education Relief Fund to use for education-related pandemic assistance. $2.75 billion would be set aside for private schools. Funds are limited to COVID-related needs and cannot be used for vouchers or scholarships for parents. $22.7 billion is for the Higher Education Emergency Relief Fund. $20.2 billion to be allocated to public and private non-profit institutions. This allocation formula is a change from the CARES Act, which used only full-time equivalent (FTE) enrollment in its allocation formula: 37.5% based on FTE enrollment of Federal Pell Grant recipients; 37.5% based on headcount enrollment of Pell recipients; 11.5% based on FTE enrollment of non-Pell recipients; 11.5% based on headcount enrollment of non-Pell recipients; 1% based on the relative share of full-time equivalent enrollment of students who were Federal Pell Grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency; 1% based on the relative share of the total number of students who were Federal Pell grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency. The legislation provides $680.9 million to for-profit colleges to provide financial aid grants to students, $1.7 billion to historically black colleges and universities (HBCU), tribal colleges and minority-serving institutions. $113 million for institutions with the greatest unmet need related to the pandemic or those not served by the primary formula, such as independent graduate students. Institutions can use the stimulus money for lost revenue, reimbursement for expenses, technology costs due to the shift to online learning, financial aid for students and more. The bill directs schools to prioritize grants for students with exceptional need. Colleges and universities cannot use the funds for recruitment activities, athletics facilities, religious instruction or senior administrator salaries or bonuses. States must maintain spending on both K-12 and higher education in FY 2022 at least at the proportional levels of such state’s support for elementary and secondary education and for higher education relative to such state’s overall spending, averaged over FY 2018, FY 2019, and FY 2020. The MOE can be waived by the secretary of Education. Schools that receive funding would have to continue to pay their employees and contractors during any closures, to the greatest extent practicable.

Health Care.  The federal stimulus legislation provides for a one-time, one-year increase in the Medicare physician fee schedule of 3.75% to support physicians and other professionals in adjusting to changes in the Medicare physician fee schedule during 2021, and to provide relief during the COVID-19 public health emergency and provides an extension of temporary suspension of Medicare sequestration- provides for a three-month delay of the Medicare sequester payment reductions through March 31, 2021. The legislation provides $4.5 billion for state, local, territorial, and tribal public health departments; $300 million for a targeted effort to distribute and administer vaccines to high-risk and underserved populations, including racial and ethnic minority populations and rural communities. In addition, funds will support medical product supply chain monitoring and other public health research and response investments; $25.4 billion to the Public Health and Social Services Emergency Fund to support testing and contact tracing to effectively monitor and suppress COVID-19, as well as to reimburse for health care-related expenses or lost revenue attributable to the coronavirus, including: $22.4 billion for testing, contact tracing, and other activities necessary to effectively monitor and suppress COVID-19, including $2.5 billion for a targeted effort to improve testing capabilities and contact tracing in high-risk and underserved populations, including racial and ethnic minority populations and rural communities. $3 billion in additional grants for hospital and health care providers is provided to cover reimbursement costs for health care-related expenses or lost revenue directly attributable to the public health emergency resulting from coronavirus, along with direction to allocate not less than 85% of unobligated funds in the Provider Relief Fund through an application-based portal to reimburse health care providers for financial losses incurred in 2020.   $4.25 billion is provided for Substance Abuse and Mental Health Services Administration (SAMHSA) to provide increased mental health and substance abuse services and support, including: $1.65 billion for the Substance Abuse and Prevention Treatment Block Grant; $1.65 billion for the Mental Health Services Block Grant; $600 million for Certified Community Behavioral Health Clinics; $50 million for suicide prevention programs; $50 million for Project AWARE to support school-based mental health for children; $240 million for emergency grants to states; $10 million for the National Child Traumatic Stress Network; and $125 million of funds provided to the SAMHSA must be allocated to tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes across a variety of programs. 

Small Business Support.  The legislation provides $325 billion in small business funds. This funding includes: $284.5 billion for first and second forgivable Paycheck Protection Program (PPP) loans and outlines that a small business can receive a second PPP loan if they have less than 300 employees and can demonstrate a revenue reduction of 25%, sets a maximum loan amount reduced to $2 million, businesses that received PPP loans would be able to take tax deductions for the expenses covered by forgiven loans, and expands PPP eligibility for 501 (C)(6) nonprofits, including local newspapers, radio, and television broadcasters, and destination marketing organizations. It provides $20 billion for new Economic Injury Disaster Loan Grants for businesses in low-income communities, $3.5 billion for continued Small Business Administration debt relief payments, $2 billion for enhancements to Small Business Administration lending, and provides $12 billion for Community Development Financial Institutions and Minority Depository Institutions that provide credit and financial services to low-income and minority communities.

Transportation.  The federal stimulus legislation allocates $9.8 billion to state departments of transportation (DOT); Surface Transportation Block Grant Program (STBGP) funds are available until Sept. 30, 2024. Beyond STBGP eligibilities, funds are also available for preventive maintenance, routine maintenance, operations, personnel, including salaries of employee (including those employees who have been placed on administrative leave) or contractors, debt service payments, availability payments, and coverage for other revenue losses. Approximately, 14% of these highway funds are sub-allocated only to localities over 200,000 in population. State funds can also be transferred to public tolling and ferry agencies. $15 billion in transit aid primarily destined for local governments with about $13.3 billion for urbanized areas and $1 billion for rural areas, a program run by state DOTs.