The American Rescue Plan Act is Signed Into Law, Providing Another $1.9 Trillion in COVID-19 Relief
On March 11, 2021, President Biden signed the American Rescue Plan Act (H.R. 1319 or “the Act”) into law, providing another $1.9 trillion in COVID-19 related relief to Americans through direct individual payments, tax cuts and financial aid to the states. Among the monies earmarked, local educational agencies (LEA) and institutions of higher education are set to receive billions of dollars in aid designed to mitigate learning loss and amplify existing educational opportunities. Also of note, H.R. 1319 significantly augments funding available under the Affordable Care Act. Relevant provisions of H.R. 1319 are summarized below.
Title II, Subsection A – Matters Affecting LEAs and Institutions of Higher Education
Portions Applicable to LEAs
In addition to aid previously provided to the Education Stabilization Fund in H.R. 133 (the most recent economic stimulus package signed into law at the end of President Trump’s term), the Act provides for approximately $122 billion to be allocated to the Education Stabilization Fund (to remain available through September 30, 2023) to respond to the effects of the COVID-19 pandemic. This $122 billion has been earmarked for specific purposes as identified below:
- $800 million is to be allocated to the states for the purpose of identifying homeless children and youth and providing those homeless children and youth with wrap-around services in light of the challenges of COVID-19 and other assistance needed to enable homeless children and youth to attend school and participate fully in school activities.
- The remaining amount of aid is to be provided to states as grants. Each state must allocate at least 90% of that aid to LEAs to be used in the following manner:
- At least 20% is to be allocated by the LEA to address learning loss through the implementation of evidenced-based interventions and ensure that such interventions respond to students’ academic, social, and emotional needs. These evidence-based interventions shall address the disproportionate impact of the coronavirus on the student subgroups described in section 1111(b)(2)(B)(xi) of the Elementary and Secondary Education Act of 1965, students experiencing homelessness, and children and youth in foster care.
- The remaining funds allocated to each LEA may be used for any of the following:
- Any activity authorized by the Elementary and Secondary Education Act of 1965, the Individuals with Disabilities Education Act, the Adult Education and Family Literacy Act, or the Carl D. Perkins Career and Technical Education Act of 2006;
- 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;
- Activities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth;
- Developing and implementing procedures and systems to improve the preparedness and response efforts of LEAs;
- Training and professional development for staff of LEAs on sanitation and minimizing the spread of infectious disease;
- Purchasing supplies to sanitize and clean the facilities of LEAs;
- Planning for, coordinating, and implementing activities during long-term closures;
- Purchasing educational technology (including hardware, software, and connectivity) for students served by the LEA;
- Providing mental health services and supports;
- Planning and implementing activities related to summer learning and supplemental afterschool programs;
- Addressing learning loss among students;
- School facility repairs and improvements to reduce the risk of virus transmission and exposure to environmental hazards;
- Inspection, testing, maintenance, repair, replacement, and upgrade projects to improve the indoor air quality in LEA facilities; and
- Developing strategies and implementing public health protocols in line with guidance from the Centers for Disease Control and Prevention for the reopening and operation of LEA facilities.
- Any funds not allocated for the activities listed above must be used in the following manner:
- At least 5% of the total amount of grant funds awarded to the state shall be used to carry out activities to address learning loss by supporting the implementation of evidence-based interventions and ensure that such interventions respond to students’ academic, social, and emotional needs. These evidence-based interventions shall address the disproportionate impact of the coronavirus on the student subgroups described in section 1111(b)(2)(B)(xi) of the Elementary and Secondary Education Act of 1965, students experiencing homelessness, and children and youth in foster care
- At least 1% of the total amount of grant funds are allocated for the implementation of evidence-based summer enrichment programs;
- At least 1% of the total amount of grant funds are allocated for the implementation of evidence-based afterschool programs;
- No more than 0.5% of the total amount of grant funds are allocated for administrative costs and the remainder for emergency needs as determined by the State education agency
Of note, the Act requires that LEAs receiving funds must develop and make available on their websites a plan for the safe return to in-person instruction and continuity of services within 30 days after receiving the allocation of funds. Many LEAs are likely to be in compliance (or in the process of complying) with this requirement under California law for the purpose of returning to in-person instruction under California Department of Health guidance and Senate Bill/Assembly Bill 86.
Another interesting effect of receiving funds under the Act concerns pupil spending and staffing in the coming years. Under the Act, LEAs receiving funds from the Education Stabilization Fund must not, in the fiscal year 2022 or 2023, do either of the following:
- Reduce per-pupil funding for any high-poverty school by an amount that exceeds the total reduction in LEA funding for all schools served by the LEA divided by the number of children enrolled in all schools by the LEA; or
- Reduce per-pupil, full-time equivalent staff in any high-poverty school by an amount that exceeds the total reduction in full-time equivalent staff in all schools served by the LEA divided by the number of children enrolled in all schools served by the LEA
Portions Applicable to Institutions of Higher Education
The Act additionally provides almost $40 billion to institutions of higher education (to remain available through September 30, 2023) in accordance with the same terms and conditions as in section 314 of the Coronavirus Response and Relief Supplemental Appropriations Act, which was signed into law on December 27, 2020, provided that at least 50% of the funds must be used to provide emergency financial aid grants to students. Institutions of higher education are required to prioritize emergency grants for students with exceptional need (i.e. Pell grant recipients). The Act leaves it up to the Department of Education to determine whether DACA or international students are eligible to receive emergency financial aid grants. We expect the Department of Education to issue guidance in the coming weeks. Under the Act, an institution of higher education must use a portion of these funds to implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines, and conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student, or other circumstances, such as medical or dental expenses not covered by insurance, unusually high child care costs, or changes in a family’s income or assets.
Title II, Subsection C – Human Services and Community Supports
In addition to amounts otherwise available, the Act allocates $14.99 billion to carry out the program authorized under section 658C of the Child Care and Development Block Grant Act of 1990. States are authorized to use such funds 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. These funds are available without regard to the income eligibility requirements of the Child Care and Development Block Grant Act.
The Act also appropriates $23.975 billion for grants in accordance with the Development Block Grant Act. From these funds, state lead agencies are earmarked to receive a child care stabilization grant. A lead agency for a state that receives a child care stabilization grant shall reserve 10% or less of the grant funds received to administer subgrants, provide technical assistance and support for applying for and accessing the subgrant opportunity, publicize the availability of the subgrant, carry out activities to increase the supply of child care, and provide technical assistance to help child care providers. The lead agency shall use the remainder of the grant funds awarded to make subgrants to qualified child care providers, regardless of a provider’s previous receipt of other federal assistance, to support the stability of the child care sector during and after the COVID-19 public health emergency. A qualified child care provider that receives funds through such a subgrant shall use the funds for at least one of the following:
- Personnel costs, including payroll and salaries or similar compensation for an employee;
- Rent or payment of a mortgage obligation;
- Personal protective equipment, cleaning, and sanitization supplies to respond to the COVID-19 public health emergency;
- Goods and services necessary to maintain or resume child care services;
- Mental health supports for children and employees.
Other Relevant Portions of the Act
Title VII — Committee on Commerce, Science, & Transportation
In addressing consumer needs, the Act requires the development of regulations providing for reimbursement to “eligible schools or libraries” from the Emergency Connectivity Fund for purchases made during the COVID-19 emergency period of eligible equipment or advanced telecommunications and information technology. This includes the purchases of Wi-Fi hotspots, modems, routers, devices that combine a modem and a router, and connected devices.
Title IX — Committee on Finance
The Act permits involuntarily laid-off and reduced hour employees who did not have COBRA coverage prior to March 1, 2021 to now elect COBRA coverage under its continuation coverage provisions, beginning on April 1, 2021 and ending on September 30, 2021. The extended COBRA coverage features 100% premium payments directly by the federal government. The Act also requires employers to provide certain new notices under the Act concerning COBRA coverage. The notices are required to address the availability of these new subsidies and the extended period to enroll in COBRA continuation coverage, provide options to enroll in different coverage (if available), and the expiration of premium assistance. Federal officials are required to provide model notices within the next 45 days to assist employers with these new requirements.
The Act also provides greater assistance to individuals who purchase qualified healthcare coverage under the Affordable Care Act. Previously, individuals making above 400% of the federal poverty line could be required to pay up to 9.8% of their income towards insurance premiums for healthcare plans. The Act temporarily (for 2021 and 2022) eliminates the 400% cap and lowers the maximum payment to 8.5% of income. The Act also requires that individuals making 150% or less of the federal poverty line pay nothing towards insurance premiums. It is estimated that this amendment will expand access to healthcare under the Affordable Care Act to more than one million additional Americans.
Title XI — Committee on Indian Affairs
The Act appropriates an additional $850 million to programs or activities operated or funded by the Bureau of Indian Education, Bureau-funded schools, and Tribal Colleges and Universities. Another $190 million is appropriated to the Department of Education for support of Tribal education activities, Native Hawaiian educational and community-based organizations, and to Alaska Native organizations for activities falling under the Elementary and Secondary Education Act of 1965.
Please feel free to reach out to the Authors of this Alert or your regular AALRR counsel if you have questions, or if you require assistance related to the American Rescue Plan Act.
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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