Senate Passes Bipartisan Padilla Bill to Allow Unspent COVID Relief Dollars to be Used for Critical Infrastructure Projects and Disaster Relief

WASHINGTON, D.C. — Today, U.S. Senators Alex Padilla (D-Calif.) and John Cornyn (R-Texas)’s “State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act” to expand the eligible uses of unspent COVID-19 relief dollars to include several categories of infrastructure and disaster relief passed the Senate. The bill would also extend the deadline to utilize relief funding if budgeted for eligible infrastructure projects. The legislation was supported by Senators Lisa Murkowski (R-Ark.), Ron Wyden (D-Ore.), John Kennedy (R-La.), Patty Murray (D-Wash.), Mark Kelly (D-Ariz.), Jeanne Shaheen (D-N.H.), Rick Scott (R-Fla.), and Dan Sullivan (R-Ark.).

The bill would provide flexibility for roughly $14.5 billion in federal relief funding provided to the State of California and California local governments, and additional flexibility for the funds allocated to more than 100 tribal governments in California.

“Each region of the country has unique local challenges in responding to the COVID-19 pandemic. This bill will provide state, local, tribal, and territorial governments the flexibility they need to better use federal resources to care for and serve their residents. This will ultimately help strengthen our response to the continued fight against COVID,” said Senator Padilla.

“In 2020, states and cities across the country delayed or canceled transportation improvement projects totaling about $12 billion,” said Senator Cornyn. “This bill puts decision-making power at the local level and gives these leaders more flexibility to invest in the most critical projects for their communities, whatever those might be. This will give communities in Texas, and all other states the ability to use pandemic relief funding when and where it’s needed most. I want to thank Senators on both sides of the aisle who have worked with Senator Padilla and myself on this bill.”

“The coronavirus pandemic and subsequent economic downturn have impacted critical infrastructure projects across California. This bill would give local governments the flexibility they need to make the best spending decisions for their communities and increase critical investments at the local level. Now more than ever, flexibility is needed for American cities to rebuild our nation’s critical infrastructure to build back better from the COVID-19 pandemic,” said Carolyn M. Coleman, Executive Director and CEO, League of California Cities.

“Providing additional support for supporting transportation infrastructure is critical and especially important since the COVID-19 variants now impose an additional threat to the health and well-being of Native people which may require adjustments in spending. In addition, there are additional considerations with subsequent resources allocated to tribal governments for similar purposes which brings additional compliance and planning obligations. The pandemic has also shown that the historic lack of funding provided to tribal governments over the last decade has left tribal communities to suffer some of the highest infections rates in the country. Providing additional flexibility to utilize this funding for transportation will help provide stronger physical infrastructure to access health care, provide vaccinations, and provide elder care,” said Dante Desidero, Chief Executive Officer, National Congress of American Indians.

Background:

Given that the American Rescue Plan Act made water, wastewater, and broadband infrastructure eligible for COVID funds, the bill would provide additional flexibility for state, local, tribal, and territorial (SLTT) governments to spend their allocations of the Coronavirus State and Local Fiscal Recovery Funds. It gives state and local officials additional flexibility to responsibly spend their own funds. There is a cap—the greater of $10 million or 30% of the funds—on how much of the COVID money can be spent on these new purposes, including transportation and community development (though the previous ARP set asides for water, wastewater, and broadband remain unrestricted). The bill also allows these funds to be used to provide emergency relief from natural disasters or the negative economic impacts of natural disasters. Additionally, the bill creates a $10 million minimum allowance for each jurisdiction to spend on the provision of government services. This bill does not place spending mandates on recipients of COVID funding and does not reclaim any distributed funding.

Endorsees: The California State Association of Counties, California League of Cities, National Governors Association, National Congress of American Indians, the U.S. Conference of Mayors, the National League of Cities, American Road & Transportation Builders Association, National League of Cities, Association of Metropolitan Planning Organizations, American Association of State Highway and Transportation Officials, American Public Transportation Association, Associated General Contractors of America, National Association of Development Organizations, Associated Equipment Distributors, American Subcontractors Association, American Highway Users Alliance, Government Finance Officers Association, Design-Build Institute of America, National Association of Surety Bond Producers, National Stone, Sand and Gravel Association, American Traffic Safety Services Association, American Public Works Association, American Concrete Pipe Association, National Ready Mixed Concrete Association, National Association of County Engineers, American Concrete Pavement Association, American Foundry Society, and National Association of Regional Councils.

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