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Mar 26

March 26, 2020 TML Coronavirus Update #9

Posted on March 26, 2020 at 4:15 PM by TML Staff

Urgent Updates

 

What is the status of the federal COVID-19 stimulus legislation?

 

Late in the evening on Wednesday, March 25, the United States Senate unanimously approved the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The bill now goes to the U.S. House of Representatives for approval before heading to the President’s desk to be signed into law. The House is tentatively expected to vote on the CARES Act on Friday, March 27.

 

As approved by the Senate, the CARES Act provides over $2 trillion in emergency relief funds to help mitigate the financial harm caused by the coronavirus pandemic in the United States. The legislation includes, among many other things, direct payments to adults below a certain income threshold, funding for loan programs for businesses, expanded unemployment insurance, and increased funding for hospitals and medical equipment capacity.

 

Of specific importance to cities, the CARES Act currently provides for the following:

 

·     Roughly $139 billion for states and local governments under the Coronavirus Relief Fund. This funding is allocated to states based on population, with estimates showing Texas receiving $11.24 billion. Local governments in Texas with populations exceeding 500,000 may apply directly to the federal government for their share of funding. (Note: total funding to these local governments may not exceed 45 percent of state allotment.) Other cities will need to apply for grants from the state for this funding. Revenue received under this fund may only be used to cover expenditures that: (1) were necessary expenditures incurred due to COVID-19; (2) were not accounted for in the budget most recently approved by the governmental entity; and (3) were incurred between March 1, 2020 and December 30, 2020.

·     Establishment of a $500 billion dollar lending fund for eligible businesses, states, and municipalities to mitigate losses incurred as the result of coronavirus.

·     $45 billion for the FEMA Disaster Relief Fund.

·     $4.3 billion for CDC-Wide Activities and Program Support, a portion of which must be used for grants and cooperative agreements with state and local governments for certain preparedness and response activities.

·     $25 billion for Transit Infrastructure Grants distributed using fiscal year 2020 apportionment formulas.

·     $400 million for Election Security Grants to prevent, prepare for, and respond to coronavirus for the 2020 federal election cycle.

·     $850 million for state and local law enforcement assistance awarded pursuant to the formula allocation used in fiscal year 2019 for the Edward Byrne Memorial Justice Assistance Grant program.

·     $10 billion for Grants-In-Aid for Airports

·     $4 billion for Homeless Assistance Grants available through HUD Emergency Solutions Grant program.

·     $5 billion for Community Development Block Grants.

·     $1 billion for certain programs under the Community Services Block Grant Act.

 

TML will continue to work with the National League of Cities to monitor and improve the CARES Act and will report on new developments as information becomes available.

 

Has the White House issued information on the coronavirus?

 

Yes. The White House sent the following information this afternoon, which is shown here without edits.

 

Coronavirus Guidelines for America: The White House Coronavirus Task Force issued guidelines – 15 Days to Slow the Spread (Español)– to help protect all Americans during the global Coronavirus outbreak. Even if you are young and otherwise healthy, you are at risk—and your activities can increase the risk of contracting the Coronavirus for others. Everyone can do their part. The recommendations are simple to follow but will have a resounding impact on public health. Find the guidelines here:

 

-Up-To-Date Information: The most up-to-date, verified information and guidance can be found via the Centers for Disease Control and Prevention Coronavirus Disease 2019 website – www.coronavirus.gov.

-Disaster Response and Recovery Primer: Response and recovery efforts are locally executed, state managed, and federally supported. It is important that requests for assistance, including for critical supplies, get routed through the proper channels as soon as possible. Learn more about the response and recovery process via this important resource – Coronavirus (COVID-19) Pandemic: Response and Recovery Through Federal-State-Local-Tribal Partnership. FEMA’s public assistance guidance for COVID-19 response efforts can be found here.

-Coronavirus Fact vs. Myth: Rumors can easily circulate within communities during a crisis. FEMA setup a website to help the public distinguish between rumors and facts regarding the response to the coronavirus pandemic.

-Social Media Resources: Follow the White House on Twitter and Facebook. Also follow HHS (Twitter/Facebook) and CDC (Twitter/Facebook) You can also find informational videos from Coronavirus Task Force members on mitigation, social distancing, etc. on the White House’s YouTube page.

-Fraud & Scam Protection: The Department of Justice is remaining vigilant in detecting, investigating, and prosecuting wrongdoing related to the crisis. Find out how you can protect yourself and helpful resources on DOJ’s Coronavirus Fraud Prevention website. The Federal Trade Commission has also established a website with helpful information to help consumers avoid coronavirus-related scams.

-Administration Actions and Federal Agency Resources: USA.gov is cataloging all U.S. government activities related to coronavirus. From actions on health and safety to travel, immigration, and transportation to education, find pertinent actions here. Each federal agency has also established a dedicated coronavirus website, where you can find important information and guidance. They include: Health and Human Services (HHS), Centers of Medicare and Medicaid (CMS), Food and Drug Administration (FDA), Department of Education (DoED), Department of Agriculture (USDA), Small Business Administration (SBA), Department of Labor (DOL), Department of Homeland Security (DHS), Department of State (DOS), Department of Veterans Affairs (VA), Environmental Protection Agency (EPA), Department of the Interior (DOI), Department of Energy (DOE), Department of Commerce (DOC), Department of Justice (DOJ), Department of Housing and Urban Development (HUD), Department of the Treasury (USDT), Office of the Director of National Intelligence (ODNI), and U.S. Election Assistance Commission (EAC).

 

In the event of conflicting orders from the governor’s office and local jurisdiction, which controls?

 

Depending on the subject matter, the answer to this question could get complicated. In any case, the Texas attorney general issued a letter yesterday providing that: (1) state agencies and their contractors are not subject to local declarations; and (2) the governor’s orders are superior to cities and counties.

 

Each city should consult local legal counsel with specific conflict-of-law questions. 

 

Has anyone prepared a national clearinghouse of city actions in relation to the coronavirus?

 

Yes. The National League of Cities and Bloomberg Philanthropies have teamed up to collect and share actions taken by local leaders in response to the COVID-19 Pandemic.

 

Are businesses still required to remit sales taxes despite the economic hardship caused by the coronavirus?

 

Yes. However, the comptroller has acknowledged the difficulty many businesses have in complying with remitting sales taxes. The comptroller recently announced that his office will be offering assistance to businesses struggling to pay the full amount of sales taxes collected in February, which were due to the comptroller on March 20, 2020. This assistance includes offering short-term payment agreements to businesses, and potentially waiving penalties and interest for late remittances.

 

Businesses struggling to make their February sales tax payments are encouraged to call the comptroller’s enforcement hotline at (800) 252-8880 to learn about their payment options. 

 

If a city moves a sales tax reauthorization election to the November uniform election date, does the dedicated sales tax expire even though the city initially planned to have the voters reauthorize the tax prior to its expiration on the May uniform election date?

 

The answer depends, in large part, on which dedicated sales tax is being reauthorized, and when the expiration will occur. Sales tax reauthorization elections are required for two types of dedicated city sales taxes: the street maintenance sales tax, and the sales tax for crime control and prevention districts.

 

For the street maintenance sales tax, state law authorizes the comptroller to delay the expiration date of tax to not later than the last day of the first calendar quarter occurring after the city sends notice to the comptroller of the scheduled expiration. See Tex. Tax Code § 327.007(d). Most cities that have their street maintenance sales tax expiring in 2020 have a scheduled expiration date of September 30, 2020. In accordance with the authority in Section 327.007(d) of the Tax Code, the comptroller has advised that these cities may request that the comptroller delay the expiration of their street maintenance sales tax to December 31, 2020. Doing so would allow the city to hold the reauthorization election on the November uniform election date without having the sales tax expire.

 

The comptroller’s office has advised TML that a city with a September 30, 2020 street maintenance sales tax expiration date that wishes to delay the expiration of the tax must send a copy of the resolution postponing the city’s election to November to Taxalloc.RevAcct@cpa.texas.gov. Once received, the comptroller’s office will notify the city in writing that the new expiration date of the street maintenance tax is December 31, 2020. This city is also required to submit the November election results to the comptroller’s Tax Allocation Section no later than November 20, 2020.

 

A few Texas cities have street maintenance sales taxes that are set to expire on June 30, 2020, unless reauthorized. The comptroller’s authority to delay the expiration date under Tax Code Sec. 327.007(d) only delays the expiration of these cities’ street maintenance sales taxes until September, still before the November uniform election date. Consequently, these cities would see their street maintenance sales taxes expire prior to a reauthorization election in November.

 

In addition to these cities, a small handful of Texas cities have crime control and prevention district sales taxes that will expire in 2020 unless reauthorized. The crime control and prevention district statute does not contain a provision similar to Tax Code Sec. 327.007(d), so the comptroller lacks the same authority to delay the expiration date of the crime control and prevention district sales taxes.

 

Cities that either have an expiring crime control and prevention district sales tax, or a street maintenance sales tax that expires in June 2020, are encouraged to continue working with their legislative delegations to request the governor to either extend the expiration dates or set a special emergency election for the reauthorization of those sales taxes prior to their expiration. These cities are also encouraged to reach out to Russell Gallahan with the comptroller’s office to discuss their options at Russell.Gallahan@cpa.texas.gov.

 

Further Updates

 

If a city decides to issue a shelter-in-place order, should certain businesses and activities be exempt from the order?

 

This question was originally addressed in the March 24, 2020, update. Certain “critical infrastructure” is typically exempted. That list from the U.S. Department of Homeland Security is fairly broad. In addition, others (some of which are already covered in the list) have reached out to the League asking that we share their information with city officials.  

 

The Railroad Commission has provided certain employees with a letter designating them as essential for the continued operation of critical infrastructure. This letter has gone to oil and gas field inspectors, pipeline inspectors, and some permitting staff. The letter informs law enforcement, should they detain an RRC employee who is performing RRC duties, that they are designated as essential for critical infrastructure operation. 

 

Where can I find archived issues of the TML Coronavirus Updates?

 

TML Coronavirus Updates are archived chronologically here and by subject here.