Federal Relief Package Approved; Coronavirus Relief Fund Deadline Extended

January 8, 2021

Congress passed a fifth COVID-19 relief package on December 21, and the President signed the legislation into law on December 27. While the legislation does not include additional direct assistance to local governments, it does extend the deadline for expending the Coronavirus Relief Funds previously provided to states and localities until December 31, 2021. Secretary of Finance Aubrey L. Layne issued a December 30 memorandum to local governments announcing the state’s intention to extend its deadlines for local governments that received distributions from the state. Further guidance from the state is expected to be forthcoming.

Below is an overview of additional elements of the legislation of interest to local governments.

  • Provides $82 billion for the Education Stabilization Fund, which was established under the CARES Act, including:
    • $54.3 billion for the Elementary and Secondary School Relief Fund for distribution to local education agencies in accordance with the Title I formula. Media reports indicate that Virginia is expected to receive approximately $939 million through this funding source. Funds may be used to address learning loss and to make school facility improvements, such as HVAC enhancements to improve air quality, in addition to other COVID-19 response needs authorized under the CARES Act.
    • $4.5 billion for the Governor’s Relief Fund, which may be used to provide emergency support through grants to local school divisions and institutions of higher education as well as support for early child care and education. $2.75 billion is set aside for assistance to non-public schools. Virginia is expected to receive $76 million.
      $22.7 billion for the Higher Education Relief Fund (Virginia is expected to receive $488 million).
  • Provides $8.75 billion for vaccine development and distribution, of which $4.5 billion will be distributed to states, localities, and tribal governments. Media reports indicate that Virginia is expected to receive approximately $102 million for vaccine distribution, which may enable the state to repurpose the approximately $90 million in state General Funds that the Governor included in his introduced budget in December for this purpose.
  • Provides $10 billion for Child Care and Development Block Grants, to be used to supplement state general funds for child care assistance for low-income families and supporting child-care providers. Authorizes funds to be used to provide child care assistance to essential employees without regard to income eligibility requirements.
  • Provides $250 million for Head Start.
  • Provides $10 billion for highway infrastructure programs, to be provided to state departments of transportation for costs related to maintenance, operations, personnel, debt service, and coverage for revenue losses. States may transfer funds to entities that own or operate certain tolled facilities.
  • Provides $14 billion for operating assistance to transit agencies.
  • Extends Pandemic Unemployment Assistance (which covers self-employed and “gig” workers and others who are not eligible for traditional unemployment insurance benefits) to March 14, 2021 (and through April 5 under certain circumstances).
  • Extends Pandemic Emergency Unemployment Compensation (which provides extended unemployment benefits to individuals who have exhausted their eligibility for regular unemployment insurance benefits) to March 14, 2021 (and through April 5 under certain circumstances).
  • Reinstates the Pandemic Unemployment Compensation supplement to state and federal unemployment benefits (the supplement is set at $300 per week from December 26 through March 14).
  • Provides additional recovery rebates for individuals at $600 per taxpayer, in addition to $600 per eligible child.
  • Expands eligible expenses for Paycheck Protection Program funds to include certain operations expenditures, property damage costs, and worker protection expenditures. Establishes and funds the “PPP second draw” loan program for certain small businesses that have used or will use their initial loan funds and demonstrate reductions in gross receipts.
  • Provides $15 billion for grants to certain live venues, such as performing arts organizations, museums, and movie theaters, experiencing revenue losses meeting a certain threshold. Grants may be used to cover expenses such as payroll costs, rent or mortgage payments, and utilities.
  • Provides additional $20 billion for the Economic Injury Disaster Loan Advance program (which provides emergency economic relief to small businesses experiencing a loss of revenue); funding is to be targeted toward businesses located in low-income communities.
  • Provides $25 billion for state and local governments for rental assistance. Funds will be distributed to states and localities with populations to 200,000 or more. Funds must generally be used for payment of rent, utilities, and related housing expenses. Media reports indicate that Virginia’s share of this funding is $568 million. Extends the eviction moratorium issued by the Centers for Disease Control and Prevention until January 31, 2021.
  • Provides for a 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits through June 30, 2021; provides $100 million for state administrative costs; allows states to issue Pandemic EBT benefits (which provide temporary emergency nutrition benefits for children who would have received free or reduced price school meals if their schools were providing in-person learning) for children under the age of 6 who live in households receiving SNAP benefits and live in areas in which schools or child care facilities are closed or operating in a reduced capacity.
  • Provides $175 million for nutrition services provided through the Older Americans Act.
  • Provides $65 million to the Federal Communications Commission (FCC) to fund required improvements to data collection on broadband availability.
  • Provides $3.2 billion to the FCC to provide stipends to assist eligible households with costs for internet service during the pandemic.
  • Provides $300 million to expand broadband access in underserved areas via partnerships between states or localities and providers of fixed broadband service, with priority given to projects serving the greatest number of households and cost-effective projects in rural areas.

VACo Contact: VACo Legislative Team

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