Although the House of Representatives narrowly passed the HEROES Act last Friday evening, Senate Republicans have no immediate plans to advance another relief package. The Senate adjourned for the long Memorial Day week and will return on June 1 to consider a handful of appointments, work on the re-authorization of the Land and Water Conservation Fund and address reforms to the Paycheck Protection Program (funds for the Paycheck Protection Program will likely be exhausted in late May or June, which may put pressure on both houses of Congress to develop and enact some secondary relief package).

On Monday, Senator Bill Cassidy (R-Louisiana) and Senator Robert Menendez (D-New Jersey) formally introduced the State and Municipal Assistance for Recovery and Transition (SMART) Act (S. 3752). This legislation provides an additional $500 billion in aid to state and local governments, territories and tribes to deal with the COVID-19 pandemic, with the smallest communities in line for a direct slice of the money. It eliminates the current 500,000 resident population threshold, allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance. Additionally, the SMART Fund targets funding to areas of greatest need based upon infection rates and revenue losses and overturns the U.S. Treasury’s guidance on how state and local governments could use the CARES stabilization funding.

Under the new bill, $16 billion would be set aside for Native American tribes. The remaining $484 billion would be allocated to states, territories, the District of Columbia, counties and municipalities as follows:

  • One-third of the $484 billion would be distributed based on each state or territory's percentage of the U.S. population. Counties and municipalities would each get one-sixth of the state allocation, in proportion to their share of the state's population.
  • One-third would be distributed according to each share of nationwide COVID-19 infections, with counties and municipalities again getting one-sixth of their state's money based on population.
  • The final third would be parceled out based on each state's revenue losses as a percentage of combined state losses over the course of this year. Counties and municipalities again would get their one-sixth share, based on their revenue losses in proportion to overall losses in their state.

Each state would receive at least $2 billion from the first two tranches — up from $1.25 billion in the CARES Act — on top of any money they receive from revenue losses in the third tranche. The funds could be used for pandemic-related costs occurring in 2020 through the end of 2022, or to replace lost revenue during that period.

Senators Cassidy and Menendez first unveiled their proposal in late April. Since then, they made a key change by eliminating the floor in their original plan that would have limited aid to cities and counties with 50,000 or more residents.

On Tuesday, Congresswoman Sherrill introduced H.R. 6954 to amend title VI of the Social Security Act to establish a Coronavirus Local Community Stabilization Fund. With bipartisan support from nine co-sponsors so far, the bill has been referred to the House Committee on Oversight and Reform.

Late this week, RCRC expressed to Congressional leaders the need to enact further federal assistance to states and counties. Read the letter here.