An update on the American Rescue Plan Act

Dear Colleague,

This week, Congress is expected to pass the American Rescue Plan Act (ARPA), the latest measure from Washington in response to the ongoing COVID-19 public health and economic crisis. The $1.9 trillion bill includes many items which may be of interest to economic developers; a brief detail of the contents of the bill is included below.

While we do anticipate this legislation will be signed into law imminently, there will be a period of time before the Notice of Funding Opportunity(s) are posted and other administrative tasks are completed and funding begins to flow out to recipients. We recommend the following actions for EDOs:

• If you have not already begun discussing economic development uses for upcoming available funding with your local elected officials and stakeholders, you should do so immediately. Some funding will be through grants and will take time to move, while other funding will be in the form of direct assistance to state and local governments. $360 billion in state and local funding has been appropriated.

• EDA will receive an additional $3 billion in funding, bringing their total COVID-19-related appropriation to $4.5 billion. We expect the vast majority, if not all, of this latest appropriation to be distributed via competitive grants. We urge you to consider this as a major opportunity for your organization and community. Reach out to your regional office and state coordinators as soon as possible to begin discussing how you might successfully apply for these funds. EDA funding is among the most flexible federal economic development resources.

• The federal resources offered in this and previous bills could have aided your funding organizations, including public and private entities, or potential new funders. EDOs, including public, private and PPP entities, should consider looking and relooking at both public and private sources of funding and partnership as additional resources from Washington begin to reach your community.

IEDC is working on additional resources to help our members access these funds. Stay tuned for updates on a forthcoming webinar. 

Key provisions of the American Rescue Plan Act

State and Local Aid

The funding must be distributed quickly, though it will not all be disbursed at one time. Treasury and states are given 60 days to distribute funds in the first tranche, with additional funds to be made available in 1 year, pending TBD conditions are met. Funding in ARPA can be used to combat COVID-19 and also cover revenue shortfalls, as well as investments in infrastructure. Costs must be incurred by December 31, 2024, to be eligible.

• $195 billion for states and DC

• $130 billion for local governments

• $20 billion for tribal governments

• $4.5 billion for territories 

Unemployment 

The extension and amount of Federal Pandemic Unemployment Compensation was a contentious issue that almost tanked the bill. In the end, the Senate agreed to keep the supplemental payments at their current level and extended the program by an additional week.

• Federal supplemental UI: $300 per week through September 6, 2021 (were set to expire on March 14)

• Pandemic Unemployment Assistance (PUA) extended to 79 weeks from 50, which aids workers who otherwise do not qualify for UI

• Pandemic Emergency Unemployment Compensation extended to 53 weeks from 24 for workers who have exhausted all other benefits

• COBRA premiums are subsidized at 100%

SBA-related Initiatives 

• Restaurant Revitalization Fund established with $28.6 billion in funding for restaurants, caterers, food trucks, and bars

• Economic Injury Disaster Loans (EIDL) receive an additional $15 billion

• State-Small Business Credit Initiative (SSBCI) is revived with $10 billion in new funding, to be distributed by no later than September 30, 2030

• 501(c)(5) (unions), 501(c)(7) (social clubs), and 501(c)(8) (fraternal groups) are eligible for PPP loans, and the size of eligible 501(c)(3) groups has been increased to 500 employees; $7.5 billion in additional funding will be made available

Transportation

• $30 billion in grants for transit agencies

• $8 billion for airport authorities

• $3 billion for aviation manufactures; payroll support program with retention requirements; cannot have used other assistance, such as PPP

Education

• $40 billion for higher education

• $123 billion for K-12

• $135 million each for the National Endowment for the Arts and the National Endowment for the Humanities

IEDC will provide further updates as more details emerge from the final bill. Please contact Matt Mullin at mmullin@iedconline.org with any questions.

IEDC 2021 Leadership Summit is Virtual!

March 15 - 16, 2021