Yesterday, Congress announced a bipartisan agreement on a third legislative package to respond to the impacts of the novel coronavirus (COVID-19). Last night, the Senate passed the bill, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (H.R. 748) unanimously, by a vote of 96-0. The House of Representatives is expected to consider the bill on Friday. It will then go to the President for his signature. APTA has aggressively worked to ensure that Congress include emergency aid to public transportation agencies and Amtrak to help offset their extraordinary costs and lost revenue related to COVID-19.
Public Transit—$25 Billion
The CARES Act (Title XII of Division B) includes $25 billion for public transit formula operating and capital grants to prevent, prepare for, and respond to COVID-19. The bill provides that the Federal Transit Administration (FTA) distribute the transit funds proportionally based on the ratio of funding of four specific programs: urbanized area formula grants (49 U.S.C. § 5307); rural area formula grants (49 U.S.C. § 5311); state-of-good-repair (SOGR) formula grants (49 U.S.C. § 5337); and growing/high-density states formula grants (49 U.S.C. § 5340).
The CARES Act provides almost three times (280 percent) the FY 2020 appropriations for each of these programs; and distributes the funds proportionally based on the ratio of funding for these formula programs in the FY 2020 apportionments.
CARES Act Formula Program Distribution
|Program||FY 2020||CARES Act||Total|
|Urban Formula (§ 5307)||$4.93 billion||$13.79 billion||$18.72 billion|
|Rural Formula (§ 5311)||$713 million||$2.0 billion||$2.71 billion|
|SOGR Formula (§ 5337)||$2.68 billion||$7.51 billion||$10.19 billion|
|G/HD States Formula (§ 5340)||$610 million||$1.71 billion||$2.32 billion|
|Total||$8.94 billion||$25.0 billion||$33.93 billion|
However, it is important to note that CARES Act funds are only eligible for grants to prevent, prepare for, and respond to COVID-19. Under the bill, the funds are eligible for COVID-19 impacts as if they were made available under urbanized area grants (§ 5307) or rural area grants (§ 5311).
The bill requires the FTA to apportion these funds (using FY 2020 apportionment formulas) within seven days of the date of enactment. The federal share of the costs for grants made available under the bill is 100 percent (at the option of the recipient).
In general, transit law requirements (Chapter 53 of Title 49) apply to these operating and capital grants. However, notwithstanding transit law limitations, these funds are expressly available for operating expenses to prevent, prepare for, and respond to COVID-19 beginning on January 20, 2020. These funds are available to reimburse public transit agencies for operating costs to maintain service and lost revenue due to the coronavirus public health emergency, including the purchase of personal protective equipment and paying administrative leave of operations personnel due to reduction in service. Although these specific operating expenses are outlined in the bill, other operating costs may also be eligible. These operating expenses are not required to be part of state-wide or metropolitan transportation improvement programs or state-wide or long-range transportation plans.
The bill prohibits FTA from waiving the prevailing wage and transit labor standards (49 U.S.C. § 5333) for these formula grants.
To view APTA’s Legislative Update PowerPoint slides from the March 25, 2020 APTA webinar on the legislation, please click here.
The CARES Act (Title XII of Division B) also provides more than $1 billion for Amtrak grants to prevent, prepare for, and respond to COVID-19. The bill provides:
§$492 million for the Northeast Corridor grants; and
§$526 million for the National Network grants.
The bill provides that States shall not be required to pay Amtrak more than 80 percent for use of Amtrak facilities pursuant to section 209 of the Passenger Rail Investment and Improvement Act (PRIIA) (P.L. 110-432, Division B). It sets aside $239 million of these funds to be available to Amtrak in lieu of these State-supported route payments.
Finally, the CARES Act includes important provisions for businesses and other employers.
First, the bill allows employers to defer payment of employer payroll taxes until December 31, 2021, and December 31, 2022.
Second, the CARES Act includes relief for small businesses, including a Paycheck Protection Program that provides $350 billion in guaranteed loans to employers with fewer than 500 employees who maintain their payroll during the COVID-19 emergency. Loans can be used to pay for covered payroll costs, including employee group health benefits, interest on mortgage obligations, rent, and utilities, among others. These loans may be forgiven under certain circumstances.
The proposal is retroactive to February 15, 2020, to bring workers who may have already been furloughed back onto an employers’ payroll. The bill also requires the Small Business Administration (SBA) to pay all principal, interest, and fees on all existing SBA loan products.
Third, the bill includes a $500 billion loan program for businesses and nonprofits that employ between 500 and 10,000 employees. This program includes several limitations, such as limits on executive compensation, to be eligible for the program.
To view a fact sheet on the SBA loan provisions from the U.S. Senate Committee on Small Business & Entrepreneurship, please click here