CARES Act: Historic Supplemental Funding for Key Community Action Programs

On Friday, March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) into law. The historic legislation supports Community Action Agencies (CAAs) with significant supplemental funding to respond to the effects of the coronavirus in their communities. The CARES Act also extends various forms of aid to qualifying nonprofit organizations, including emergency forgivable loans, payroll tax credits, and an extension of 2020 employer payroll tax deadlines. Below is a summary of supplemental CSBG, Head Start, CCDBG, and LIHEAP funding provided under the CARES Act.

CAPLAW is analyzing the rest of the Act and will provide additional guidance on provisions that could benefit organizations in the Community Action network.

CSBG

The CARES Act appropriates $1 billion in supplemental FY 2020 CSBG funds. This funding will be allocated according to existing CSBG funding formulas. States must distribute at least 90% of their allocation directly to CAAs, and may retain 10% in discretionary funding, up to 5% (or $55,000, whichever is greater) of which the state may use for its own administrative costs. Unlike regular FY 2020 CSBG funding, CAAs may carry over any unused supplemental CSBG funding into the next two fiscal years (i.e., through the end of FY 2022).

A key difference with supplemental CSBG funding is that it can be used to serve individuals and families with annual incomes up to 200% of the federal poverty line (up from 125%). Note that this expansion of CSBG eligibility applies only to supplemental CSBG funding under the CARES Act. Eligibility for regular FY 2020 CSBG appropriations remains at 125% of the federal poverty line.

Head Start

The CARES Act also appropriates $750 million in supplemental Head Start funds. The funds will be allocated according to the proportion of the number of children enrolled in a grantee’s Head Start program as compared to the total number of children enrolled in all Head Start programs. Up to $500 million of this additional funding will be for operating supplemental summer programs through non-competitive grants to existing grantees identified by the Office of Head Start. Head Start grantees should note that any supplemental funds they receive will not be considered part of their base grant in subsequent fiscal years.

CCDBG

The CARES Act also provides an additional $3.5 billion in Child Care and Development Block Grant (CCDBG) funding, which may be used to enable child care providers experiencing decreased enrollment or closures related to coronavirus to maintain operations, including paying the salaries and wages of staff. States, territories, and tribes are also authorized to use supplemental CCDBG funding to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other workers deemed essential during the response to coronavirus by public officials, without regard to the income eligibility requirements of the CCDBG Act. Supplemental CCDBG funding may be used through the end of FY 2022.

LIHEAP

Finally, the CARES Act appropriates an additional $900 million in funding to operate the LIHEAP program. The supplemental appropriations will be fully available for expenditure through September 30, 2021 (i.e., LIHEAP’s 10% carryover limit will not apply to supplemental LIHEAP funds).

For additional COVID-19 information and guidance from funding sources and the national partners, please visit CAPLAW’s Coronavirus Updates for the Community Action Network page.

If you have additional questions, please feel free to contact CAPLAW for assistance.

This News Flash is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.

The contents of this news flash are intended to convey general information only and do not constitute legal advice. Any communication through this publication or through CAPLAW’s website does not constitute or create an attorney-client relationship. If you need legal advice, please contact CAPLAW or another attorney directly.