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Mar 16

March 16, 2021 TML Coronavirus Update #178

Posted on March 16, 2021 at 12:58 PM by TML Staff

Urgent Updates


You sent out lots of information last week regarding the federal stimulus bill. But we’re still not sure what limitations will be placed on how we spend our allocation?


At this time, neither are we. We do know that the stimulus bill – H.R. 1319, the American Rescue Plan Act of 2021 – has restrictions related to a state’s allocation. According to an article from the Center on Budget and Policy Priorities:


“[T]he American Rescue Plan Act does not stop states from cutting taxes. It says they can’t use federal dollars to do that, either directly or indirectly. If a state chooses to enact a net tax cut, it will forgo the equivalent amount of federal aid provided through the Act’s Coronavirus State Fiscal Recovery Fund. According to the Act:


(A) In general.—A State or territory shall not use the funds provided under this section or transferred pursuant to section 603(c)(4) to either directly or indirectly offset a reduction in the net tax revenue of such State or territory resulting from a change in law, regulation, or administrative interpretation during the covered period that reduces any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.


Again, states will receive $195 billion in direct fiscal aid, plus billions more in fiscal relief for schools, counties, and cities. If state lawmakers want to cut taxes, regardless of the impact on state services, they can do so...”


CBPP is a research institute with a focus on how government budget choices affect low-income Americans. The League isn’t endorsing any position in the article, but it does clearly explain the Act’s restriction on states.


The Act has no similar provision for the city allocations, but the United States Treasury Department may impose that condition (and perhaps others). In addition, it appears that the Texas Division of Emergency Management (TDEM) could be involved. (Remember that TDEM placed limitations on prior CARES Act funds.) 


Local allocations are governed by “Title IX, Subtitle M, Section 9901: Coronavirus State and Local Fiscal Recovery Funds (see page 225 of the bill).” The bill itself provides four eligible areas for a city’s use of its allocation:


1. to respond to the public health emergency with respect to COVID–19 or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;


2. to respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the local government who are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;


3. for the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year of the local government prior to the emergency; or


4. to make necessary investments in water, sewer, or broadband infrastructure.


The law firm of Carrington Coleman has prepared a short fact sheet about where things stand. 


The National League of Cities is still working with the Treasury Department to obtain more information as they further analyze the legislation. We will share that in the next Update as soon as we have it.


Further Updates


You’ve told us that the governor doesn’t plan to rescind the Open Meetings Act suspensions for some time. But are we required to continue holding virtual meetings?


As we reported last week, the governor, by continuing his COVID-19 disaster declaration for another 30 days, extended the Open Meetings Act suspensions for another 30 days. His office tells League staff that he should continue doing so for the foreseeable future. (Even if he decided to independently end the suspensions, his staff also assured us that we would have ample notice of that action.)


While the suspensions allow governmental bodies to conduct meetings by telephone or video conference, they don’t require such meetings. A city council or other governmental body that has a “normal” in-person meeting should follow the Texas Open Meetings Act requirements as they were prior to the suspensions. A city council that imposes some pandemic mitigation measure (e.g., social distancing) should do the same. Consult local legal counsel and/or the attorney general if you anticipate any locally-imposed mitigation measure (e.g. social distancing) may impact a person’s ability to attend an in-person meeting.


What’s the latest on vaccines?


Texans age 50 and older are now eligible to receive a COVID-19 vaccine. According to the Texas Department of State Health Services, “Expanding to ages 50 to 64 will continue the state’s priorities of protecting those at the greatest risk of severe outcomes and preserving the state’s health care system.”


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


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