SDAO, along with National Special District Coalition members, led a letter to congressional leadership in support of the Special Districts Provide Essential Services Act, urging them to include the bill’s language in future COVID-19 relief packages aiding state and local government. SDAO now calls on its members to take action and send support letters to their members of Congress as well as U.S. Senators Ron Wyden and Jeff Merkley to share why the legislation is important for special districts and their constituents.
U.S. Representative John Garamendi, D-Calif., and U.S. Senator Kyrsten Sinema, D-Ariz., re-introduced landmark special districts legislation on January 28 to provide special districts with certain access to future local government pandemic relief (H.R. 535, S. 91).
SDPESA would establish a federal definition for “special district”. It would require states to direct at least 5 percent of future Coronavirus Relief Fund (CRF) allocations to their special districts. States would have the discretion to establish their own programs to disburse the funds to special districts demonstrating pandemic-related need for relief. States would have flexibility to use excess funds, should the U.S. Treasury permit, after 60 days should special districts’ declared needs be met. The bills would also codify districts’ access to the Federal Reserve’s Municipal Liquidity Facility.
The CRF was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020. The $150 billion fund is eligible to state, territorial, tribal, county and city governments to reimburse certain expenditures made in response to the pandemic. Municipalities with populations greater than 500,000 received direct allocations from the U.S. Treasury, accounting for 45 percent of the total CRF. State received the remaining 55 percent, of which a portion is eligible to be granted to municipalities with populations fewer than 500,000. Unfortunately, language defining local governments’ eligibility for CRF in the CARES Act was exclusive of special districts. Per U.S. Treasury’s CRF guidelines, states, counties and cities can grant CRF allocations to constituent governments, which encompasses special districts. The Special Districts Provide Essential Services Act provides a solid solution to this problem.
Both House and Senate bills are identical to the 116th Congress’ S. 4308, which was bipartisan introduced by Sinema in coordination with Senator John Cornyn, R-Texas. Altogether, legislative efforts last year garnered 43 House cosponsors and five Senate cosponsors.
We will update members with more as this effort develops.