President Trump Signs the Consolidated Appropriations Act of 2021 Into Law, Allocating Billions of Dollars for Use by Local Educational Agencies and Institutions of Higher Education
On December 27, 2020, President Trump signed H.R. 133, the Consolidated Appropriations Act of 2021 (the “Act”), into law. President Trump had threatened to veto H.R. 133 following its passage through Congress on December 21, 2020, but ultimately changed course, avoiding a government shutdown.
The Act is nearly 5,600 pages long and provides spending allocations for the federal government for fiscal year 2021, as well as over $900 billion in COVID-19 related aid. (The text of the entire Act is available here.) Two provisions of the Act (Divisions M and N) provide for billions of dollars in aid for childcare and educational purposes relating to the Coronavirus pandemic and are discussed in detail below.
DIVISION M—The Coronavirus Response and Relief Supplemental Appropriations Act of 2021
As part of a $900 billion package of COVID-19 specific aid, the Act provides for $82 billion to be allocated to the Education Stabilization Fund (available through September 30, 2022) to prevent, prepare for and respond to the ongoing COVID-19 pandemic. The $82 billion has been earmarked for specific purposes, as identified below:
- Up to 5% of the total $82 billion is to be allocated to the governors of each state through the Governor’s Emergency Education Relief Fund, and may be used for the following purposes:
- To provide emergency support through grants to LEAs that the State educational agency (i.e. the California Department of Education) deems have been most significantly impacted by COVID-19 to support the ability of those LEAs to continue to provide educational services to their students and support ongoing functionality of LEAs.
- To provide emergency support through grants to institutions of higher education serving students within the State that the Governor determines have been most significantly impacted by COVID-19 to support the ability of higher education institutions to continue to provide educational services and support the overall functionality of the institution;
- To provide support to any other institution of higher education, LEA, or education related-entity within the state that the Governor deems essential for carrying out emergency educational services to students for authorized activities, the provision of child care and early childhood education, social and emotional support, and protection of education-related jobs.
- Up to 67% of the total $82 billion is to be reserved for supplemental elementary and secondary school emergency relief grants to each State educational agency with an approved application under the CARES Act. Under this provision, each state must allocate at least 90% of these grant funds as subgrants to LEAs (including charter schools that are LEAs) in the state in proportion to the amount of funds each LEA and charter school received under Part A of Title I of the Elementary and Secondary Education Act (ESEA) in the most recent fiscal year. LEAs have been directed, to the greatest extent possible, to continue to pay their employees and contractors using these funds. Additionally, funds may be used for the following activities (note: this is not an exhaustive list):
- The coordination of preparedness and response efforts of LEAs with state, local, tribal and territorial public health departments, and other relevant agencies, to improve coordinated responses among these entities to prevent, prepare and respond to coronavirus;
- Providing principals and other school leaders necessary resources to address individual school needs;
- Activities to address needs of low-income children, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth;
- Training and professional development for staff of LEAs on sanitation and minimizing spread of infectious diseases;
- Purchasing supplies to sanitize and clean facilities of LEAs;
- Purchasing educational technology (i.e. hardware, software and connectivity, assistive technology or adaptive equipment) for students served by the LEA;
- Providing mental health services and supports;
- School facility repairs and improvements to reduce risk of virus transmission and exposure to environmental health hazards; and
- Addressing learning loss among students.
- Up to 28% of the total $82 billion is to be allocated to institutions of higher education to prevent, prepare for, and respond to the ongoing pandemic. Allowable uses of such funds include the following:
- Covering expenses associated with COVID-19 (e.g. lost revenue, reimbursement for expenses already incurred, technical costs associated with transition to distance education, faculty and staff trainings, and payroll)
- Carrying out student support activities to address student needs related to COVID-19
- Providing financial aid grants to students, which may be used for any component of a student’s cost of attendance or for emergency costs arising due to COVID-19 (i.e. tuition, food, housing, healthcare, or child care).
Of note, the funds identified above are to be made available to requesting states within 30 calendar days, with the exception of certain monies earmarked for higher education (which must be made available within either 60 or 120 calendar days, as applicable).
Separately, $10 billion has been earmarked specifically for the purpose of providing assistance to both families and child care providers who have been negatively impacted by COVID-19. These funds may be used as payments directly to families for tuition and expenses for child care, or as payments to child care providers who have experienced decreased enrollment or closures on account of COVID-19.
DIVISION N—Additional Coronavirus Response and Relief
Division N of the Act largely concerns the extension of tax credits to both employers and individuals under applicable Internal Revenue Service laws and regulations. Significant tax credits impacting students and employees include, but are not limited to, the following:
- Certain payroll taxes have been further deferred under Internal Revenue Service Notice 2020-65 (entitled “Relief with Respect to Employment Tax Deadlines Applicable to Employers Affected by the Ongoing Coronavirus (COVID-19) Disease 2019 Pandemic) for an additional eight months.
- Educators may claim personal protective equipment, disinfectant and other supplies used for the prevention of the spread of COVID-19 as “educator expenses,” so long as they were purchased after March 12, 2020.
- Students who received emergency financial aid grants are not required to report such grants as income.
- Employers are no longer required to provide leave under the Families First Coronavirus Relief Act (FFCRA) after December 31, 2020, though private sector employers who continue to provide such leave will be permitted to take tax credits through March 31, 2021.
In addition to these tax credits, Division N also extends the availability of Supplemental Nutrition Assistance Program (SNAP) emergency funds to LEAs (for the time period between January 1, 2021 to June 30, 2021), expands access to SNAP for certain students at institutions of higher learning who participate in work study programs, and creates a pilot program designed to expand broadband internet access to institutions of higher education serving “minority communities” as defined in the Act.
If you have any questions regarding this Alert, you can contact the authors or your regular attorney at Atkinson, Andelson, Loya, Ruud & Romo.
This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
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