On May 12, House Speaker Nancy Pelosi (D-Calif.) and House Democrats introduced the "Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act" (H.R. 6800) to address the evolving impact of the coronavirus (COVID-19) pandemic on Americans.

The HEROES Act creates new state and local Coronavirus Relief Funds (CRF) through the U.S. Department of the Treasury to help first responders, frontline health workers, transit employees, teachers and other workers providing vital services. The House of Representatives was scheduled to vote on this bill on Friday, May 15. It is expected that the Senate will begin moving a package forward in the coming weeks.

This Holland & Knight memo briefly summarizes provisions of importance to local governments included in the HEROES Act.

Local Government Funding

Local Governments – $375 billion available

  • $250 billion awarded within 30 days of bill enactment to all municipalities and counties.
    • $125 billion to counties based on population.
    • $125 billion to municipalities using a modified Community Development Block Grant (CDBG) formula, including:
      • $87.5 billion awarded to entitlement municipalities (generally defined as those with populations of at least 50,000).
      • $37.5 billion to non-entitlement municipalities (generally defined as those with populations of less than 50,000). These funds will be awarded to states, which must make awards to non-entitlement cities based solely on population within 30 days of receipt.
  • $125 billion awarded one year after date of bill enactment to all municipalities and counties, including:
    • $62.5 billion to municipalities using a modified CDBG formula.
      • $43.75 billion to entitlement municipalities (generally defined as those with populations of at least 50,000).
      • $18.75 billion to non-entitlement municipalities (generally defined as those with populations of less than 50,000). These funds will be awarded to states, which must make awards to non-entitlement cities based solely on population within 30 days of receipt.
    • $62.5 billion to counties based on population.
  • Funds can be used for COVID-19-related expenses, to replace foregone revenues not projected on Jan. 31, 2020, or to respond to negative economic impacts of COVID-19.Includes amendment to retroactively allow CRF from CARES Act to be used to address lost revenue not projected on Jan. 31, 2020.
  • Includes amendment to retroactively allow CRF from CARES Act to be used to address lost revenue not projected on Jan. 31, 2020.

States – $500 billion available

  • $250 billion awarded within 30 days of enactment to the 50 states and the District of Columbia
    • $51 billion divided equally among 50 states and District of Columbia.
    • $49 billion awarded based on the state's share of COVID-19 cases.
    • $150 billion awarded based on the state's share of population.
  • $250 billion awarded by May 3, 2021, to the 50 states and District of Columbia
    • $51 billion divided equally among 50 states and District of Columbia.
    • $199 billion based on the state's share of unemployed individuals.

Housing and Homelessness

  • Authorizes $100 billion for an Emergency Rental Assistance (ERA) program that would allocate funding to states, territories, counties and cities to help renters pay their rent and utility bills during the COVID-19 pandemic, and help rental property owners of all sizes continue to cover their costs.
    • Provides $75 billion to states, territories and tribes to address the ongoing needs of homeowners struggling to afford their housing, directly or indirectly, because of the impacts of the COVID-19 pandemic by providing direct assistance with mortgage payments, property taxes, property insurance, utilities and other housing-related costs.
    • Protects renters and homeowners from evictions and foreclosures:
      • Extends and expands the eviction moratorium and foreclosure moratorium in the CARES Act to include all renters and homeowners, improves the forbearance provided under the CARES Act, and specifies the loan modifications and loss mitigation that should be available to homeowners following a moratorium to prevent any homeowner from facing a lump sum payment that they cannot afford.
    • Community Development Block Grants (CDBG):
      • Authorizes $5 billion in CDBG funding to provide states and local governments with additional flexible resources to mitigate and address the health and economic impacts of COVID-19. Continues waiver of the public services cap and provides additional waiver for duration of rental assistance beyond three months.
    • Public Housing and Tenant-Based Rental Assistance
      • Authorizes $2 billion for the public housing operating fund and $3 billion for the Housing Choice Voucher program, including $500 million for administrative fees 3 to help public housing authorities (PHAs) absorb reductions in tenant rent contributions and mitigate other costs associated with the COVID-19 pandemic.

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Originally published 16 May, 2020

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