State and local governments would be allowed to use a portion of their unspent COVID-19 relief funds for infrastructure and disaster relief under a bipartisan bill the Senate passed unanimously last week.
The National Association of Counties sent a letter to House Speaker Nancy Pelosi and Republican Leader Kevin McCarthy on Oct. 22, urging them to support the bill and saying it would provide crucial flexibility for the use of American Rescue Plan Act funds.
“This bill would ensure additional flexibility for recipients to address funding they feel would best support their communities and residents,” said Eryn Hurley, deputy director for NACo’s Government Affairs Department. NACo is working with House members “to demonstrate the benefit that passing this type of bill would have on counties across the country," Hurley said.
The bill began as an amendment to the $1.1 trillion Infrastructure Investment and Jobs Act, which could be up for vote as soon as tomorrow, before evolving into its own legislation. Sens. John Cornyn, R-Texas and Alex Padilla, D-Calif., sponsored the legislation, called The State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act.
Passed in March, ARPA provided $350 billion of relief funds for states, local governments, territories and tribes. The use of the funds is restricted by guidance that, on the infrastructure side, permits the dollars to be used mainly for maintenance, pay-go spending for new infrastructure or water and sewer projects.
S. 3011 would broaden that to transportation, infrastructure and government services. Newly eligible uses would include a wide variety of surface transportation projects ranging from national highway programs, the TIFIA loan program, nationally significant freight and highway projects and the Territorial and Puerto Rico Highway Program. The funds could also be used for a variety of transit-related projects, Community Development Block Grants, and disaster relief, according to NACo.
"There's a lot of flexibility in this bill," Hurley said.
The bill would cap the amount of funds that a recipient could use for the newly eligible activities at the greater of $10 million or 30% of a government’s ARPA allocation.
“This legislation is especially significant for rural areas, which account for nearly 70% of America’s counties,” NACo said in its leader to the House leaders. “County officials in those areas often have a wide variety of responsibilities that do not align with currently allowable uses of the Recovery Funds.”
Cities are eager for the passage of the bill too.
“Local governments know their community's needs best, and S.3011 opens up new flexibility for federal recovery funds so communities can use them to best serve their residents,” said Brittney Kohler, the National League of Cities’ Legislative Director for Infrastructure and Transportation. “S.3011 was initially going to be a part of IIJA, and it looks like it just might catch up to IIJA in the House with enough support.”
