Senate Passes Kelly-Backed Bill to Allow Unspent COVID Relief Dollars for Infrastructure, Disaster Relief

Last night, the Senate passed the State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act, legislation co-sponsored by Arizona Senator Mark Kelly to make several categories of infrastructure investments and disaster relief eligible for unspent COVID-19 relief dollars. The legislation also extends the deadline to utilize relief funding if budgeted for eligible infrastructure projects. 

“Arizona mayors know what is best for their communities which is why I co-sponsored this legislation to give our cities and towns the flexibility to use relief funds for much-needed infrastructure investments. This bill will help put our local economies on a stronger path to recovery,” said Sen. Kelly.

“In 2020, states and cities across the country delayed or canceled transportation improvement projects totaling about $12 billion,” said Sen. Cornyn. “This legislation 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.”

“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 flexibility will help strengthen our response to the continued fight against COVID,”said Sen. Padilla.

The legislation was led by Senators John Cornyn (R-TX) and Alex Padilla (D-CA) and supported by Senators Lisa Murkowski (R-AK), Ron Wyden (D-OR), John Kennedy (R-LA), Patty Murray (D-WA), Jeanne Shaheen (D-NH), Rick Scott (R-FL), and Dan Sullivan (R-AK). The legislation was also previously offered as an amendment to the bipartisan infrastructure bill.

Background: Given that the American Rescue Plan Act made water, wastewater, and broadband infrastructure eligible for COVID funds, the State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act would provide additional flexibility for States, Tribes, and units of local government 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 (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 and creates a process for local officials to decline funds if their jurisdictions did not suffer budget shortfalls during COVID, an option not currently available to them under the American Rescue Plan. Text of the bill is available here.

It does not place spending mandates on recipients of COVID funding and does not reclaim any distributed funding.

Endorsees: The 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.