The federal CARES Act was signed into law on Friday, March 27, 2020. It provides relief to individuals and businesses negatively impacted by the COVID-19 crisis. Below are some highlights and Arizona specific information, compiled by the Arizona State House of Representatives Democratic Policy staff.
Federal CARES Act Summary – Highlights
Analysis by AZ House Democratic Staff
Coronavirus Relief Fund
- Creates a $150 billion Coronavirus Relief Fund (CRF) for states, territories, local and tribal governments to use for expenditures on the COVID-19 response, allocated by population proportions.
- Arizona is slated to receive a total of $2.8 billion, of which Arizona state government would receive $1.55 billion and local governments would receive $1.27 billion. Funds can be used for costs that are necessary expenditures incurred due to COVID-19; were not accounted for in the budge most recently approved as of the date of enactment of H.R. 748; and were incurred between March 1, 2020 and December 30, 2020.
Direct Payments for Individuals and Couples
- Directs one-time payments of $1,200 for most individuals and $2,400 for married couples, based on income criteria. For every qualifying child under the age of 16, the payment would be an additional $500.
- Payments phase out for individuals with adjusted gross incomes over $75,000 ($150,000 for couples). Anyone making over $99,000, or married couples who have no children making more than $198,000 would not receive a payment.
- The payments are expected to sent out by April 6, 2020.
Unemployment Insurance (UI) Benefits ($260 billion for unemployment insurance programs)
- Expands unemployment insurance from three months to four months, and provides temporary employment compensation of $600 per week, which is in addition to and at the same time as regular state and UI benefits (Arizona’s max current benefit is $250 per week).
- Part-time, self-employed and gig economy workers are also granted access to UI benefits.
- The expanded coverage would be available to workers who were newly eligible for unemployment benefits for weeks starting on January 27, 2020 through December 31, 2020.
- Employers are also allowed to receive an advance tax credit from the U.S. Treasury instead of being reimbursed on the back end.
- Provides $360 million for Department of Labor to invest in programs that provide training and supportive services for dislocated workers, seniors, migrant farmworkers and homeless veterans. Includes funding for implementing new paid leave and unemployment insurance benefits.
Emergency Relief & Businesses
- Establishes a $500 billion lending fund for businesses, cities and states.
- Authorizes the Secretary of the Treasury to make loans, loan guarantees and other investments to support of eligible businesses, states and municipalities that do not exceed the aggregate amount above.
- Provides $10 billion to the Small Business Administration (SBA) for emergency grants of up to $10,000 to provide immediate relief for operating costs for businesses with fewer than 500 employees.
- Provides $17 billion to SBA to cover six months of payments for small businesses with existing SBA loans. Rent, mortgage and utility costs are now eligible for SBA loan forgiveness. Maximum loan for small businesses is 2.5 times monthly payroll cost, not to exceed $10 m. A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan: Payroll costs (using the same definition of payroll costs used to determine loan eligibility); Interest on the mortgage obligation incurred in the ordinary course of business; Rent on a leasing agreement; Payments on utilities (electricity, gas, water, transportation, telephone, or internet); For borrowers with tipped employees, additional wages paid to those employees The loan forgiveness cannot exceed the principal.
- Provides $1.5 billion to the Economic Development Administration (EDA) for economic adjustment assistance to revitalize local communities after the COVID-19 pandemic.
Federal Emergency Management Agency (FEMA)
- Provides $45 billion for a disaster relief fund for immediate state, local, tribal and territorial governments to protect citizens and help them respond/recover to the effects of COVID-19. Reimbursable activities may include medical response, personal protective equipment (PPE), National Guard deployment, coordination of logistics, safety measures and community services.
- These disaster relief dollars are made available to the states via the March 13 national emergency declaration and subsequent state declaration requests.
Provides $30.75 billion for an education stabilization fund for states, school districts and institutions of higher education for costs related to COVID-19. Distributions are as follows:
- $13.5 billion is available for formula grants to states based on the same proportion that each state receives under ESEA Title IA. States distribute 90% of the funds to local education agencies (LEAs) based on their proportional allocation. State education agencies can reserve up to 10% of the funds for emergency needs. It appears Arizona may receive up to $286 million under its grant amount.
- Each state will receive a share of $3 billion for Governors to allocate at their discretion as emergency grants to local education agencies and higher education institutions. 60% of the funds are to be distributed based on the relative number of 5 to 24-year-olds in the state and 40% of the funds are distributed based on the relative number of children younger than 21. It appears Arizona may receive up to $69 million under its grant amount.
- $14.25 billion is allocated for emergency relief for institutions of higher education. At least 50% of institutional funds must provide emergency financial grants to students that can cover eligible expenses under a student's cost of attendance, such as food, housing, course materials, technology, health care and child care.
Health and Human Services
Provides $140.4 billion to the federal Department of Health and Human Services (DHHS).
$127 billion is allocated to the Public Health and Social Services Emergency Fund.
- $100 billion is for grants to hospitals, public entities, not-for-profit entities and Medicare- and Medicaid-enrolled suppliers and institutional providers. Would cover unreimbursed healthcare expenses or lost revenue as a result of COVID-19.
- $16 billion is for the strategic national stockpile to help procure PPE, ventilators and other medical supplies.
- $11 billion is for vaccine, diagnostic and other medical needs.
- $4.3 billion is for the Centers for Disease Control (CDC) to assist with agency efforts on public health preparedness and response including funding to local and state health responders and reimbursements. $500 million is designated to invest in public health data surveillance and for infrastructure modernization to help states in developing COVID-19 tools.
- $250 million is dedicated to improve the capacity of medical facilities in order to respond to medical events.
- $275 million is provided to expand services and capacity for rural hospitals, telehealth, poison control centers and the Ryan White HIV/AIDS program through the Health Resources and Services Administration (HRSA).
- $425 million is allocated for substance abuse and mental health disorders as a result of the COVID-19 pandemic, of which certified community behavioral health clinics will received $250 million.
- $200 million is dedicated to the Centers for Medicare and Medicaid Services (CMS), of which $100 million is to support additional infection control surveys for housing facilities that serve high risk populations.
- $127 billion is allocated to the Public Health and Social Services Emergency Fund.
- Provides $5 billion for the Community Development Block Grant (CDBG) program to enable states, counties and cities to respond to the economic and housing impacts of COVID-19, including the expansion of community health facilities, child care centers, food banks, and senior services.
- Provides $453 million for the Bureau of Indian Affairs to prepare for and respond to the coronavirus, including for public safety and justice programs, welfare assistance and social services programs, and other tribal government assistance.
- Secures an additional $300 million for Native American housing, which includes $200 million for the Indian Housing Block Grant Program and $100 million for imminent threats to health and safety.
- Provides $400 million in election security grants to prevent, prepare for and respond to coronavirus in the 2020 federal election cycle. States must provide an accounting to the Election Assistance Commission on how the funds were spent within 20 days of any 2020 election.
Defense / Homeland Security
- Provides $10.5 billion for the Department of Defense, of which notably $1.4 billion is for the deployment of the National Guard. The level of funding is estimated to sustain 20,000 National Guard members, under the direction of the state Governors, for the next six months to support state and local response efforts.
- Requires the Department of Homeland Security (DHS) to extend the Real ID deadline for full implementation by the states to from October 1, 2020 to the following year, October 1, 2021.