• TWCA Staff

What TWCA Members Need to Know About the CARES Act

By Lauren Kalisek and Cole Ruiz, Lloyd Gosselink Rochelle & Townsend, P.C.

President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act,”or the “Act”) last Friday, March 27, 2020. The CARES Act seeks to provide economic stimulus and financial relief to individuals, businesses (including non-profits), state and local governments, and hospitals in response to the economic distress caused by the coronavirus (“COVID-19”) pandemic by appropriating $2 trillion toward economic relief and preparedness measures.The Act will inevitably impact the majority of the nation’s businesses and people, as well as every state and many local governments. Although the Act does not include significant measures directly targeted to the water industry, its provisions should be of general interest to TWCA’s members and some discreet pieces of the legislation do directly related to water utilities and water resources as detailed below.  

CARES ACT Top TWCA Takeaways

1. Appropriates $349 billion for the Paycheck Protection Program, which can benefit small businesses, including 501(c)(3) nonprofits. These loans, which also cover payments for water utility bills, are forgivable. Therefore, this program could help sustain revenue flow to water utilities from small businesses. This program is being administered through the SBA and further information on the application process can be found here.

2. Appropriates $10 billion for Emergency Economic Injury Disaster loans and grants, while expanding eligibility to nonprofits and agricultural cooperatives. The loan approval process has been streamlined by implementing a self-certification process, and waiving certain red tape rules. Applicants are eligible for an advance of $10,000, which does not have to be paid back—even if the applicant is ultimately denied the loan. This program is being administered through the SBA and information on self-certification and other requirements can be found here. 3. Expands eligibility and funding for unemployment insurance and provides people with an additional $600 per week on top of the unemployment amount determined by each state. 4. Provides for the distribution of $1,200 directly to Americans making $75,000 or less ($150,000 in the case of joint-filers, and $112,500 for heads of household) and $500 for each child, to be paid “as rapidly as possible.” 5. Appropriates $500 billion for assistance to businesses, states, and municipalities, with no more than $46 billion to support passenger air carriers, air cargo carriers, and businesses important to maintaining national security. The remaining $454 billion is dedicated to support lending to eligible businesses, states, and municipalities. 6. Appropriates $150 billion in a Coronavirus Relief Fund for states, tribal governments, and local general governments to help cover costs incurred as a result of COVID-19. Early estimates suggest Texas will receive $11.24 billion, of which about $3.2 billion will go directly to local governments with populations of 500,000 or more. How much, if any, funding will be available to local governments with populations less than 500,000 and/or that are not in the category of “general” is unclear and will need to be sorted out through guidance as the program is implemented. Interested TWCA members should monitor the Texas Division of Emergency Management’s website for expected updates as well as the U.S. Treasury Department for clarification of availability of the fund to different types of local governmental entities. 7. Provides the Secretary of the Treasury with the authority to make loans or loan guarantees to states, municipalities, and eligible businesses and loosens a variety of regulations prior legislation imposed through the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Economic Stabilization Act of 2008, and others. 8. Appropriates funds to help the Federal government respond to the coronavirus pandemic, including $12.5 million to the Bureau of Reclamation for “water and related resources.” The funds are intended to be used to prevent, prepare for, and respond to coronavirus, domestically or internationally. $500,000 of $12.5 million are specifically designated to the Central Utah Project Completion Account, related to the Central Utah Project which moves water from the Colorado River Basin in eastern Utah to the western portion of the state. It is unknown at this time whether this appropriation has any application to projects in Texas. As regulations and procedures are put in place by various agencies to implement these programs, TWCA members impacted by COVID-19 should be tracking the additional expenses they have incurred. For local governments, these should be expenses that were not included in their current fiscal year budgets. Once the programs are established in the coming days and weeks, and clarification provided regarding the extent of coverage, having such information readily available will help in determining whether any of these programs are available to provide relief.

Further program details can be found here.

For more information, contact Lauren Kalisek or Cole Ruiz.

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