Below are the highlights from the $2+ trillion package signed into law by President Trump to help tribes during the COVID-19 emergency crisis. The Indian Law & Policy team is currently assisting clients navigate the various federal department and agency requirements in order to access this funding. In addition to working with tribes and tribal businesses regarding the CARES Act, we are offering services on business interruption insurance claims and state gaming compact issues resulting from the emergency. Please contact us to see if we can help.
CARES Act Division A – Economic Relief Provisions and Indian Tribes Increasing Household Liquidity - Department of the Treasury
The CARES Act directs Treasury to issue one-time checks to households with taxpayers that filed federal tax returns in 2019, as follows:
- $1,200 to single filers making less than $75,000 annually;
- $2,400 to joint filers making less than $150,000 annually; and
- $500 per child.
Conceivably, then, a family of four could receive up to $3,400. There is no need to sign up at the Treasury to receive these benefits.
Federal Unemployment Insurance - Department of Labor
In addition to whatever states may provide in terms of unemployment insurance, the CARES Act requires an additional $600 of “Pandemic Unemployment Assistance” for individual employees. This program is dependent on whether an employer has unemployment insurance or not.
The “Paycheck Protection Program” - Small Business Administration
Title I of the CARES Act is the “Keeping American Workers Paid and Employed Act.” As part of the “Paycheck Protection Program,” small businesses with 500 or fewer employees are eligible for the $350 billion to guarantee Small Business Administration (“SBA”) loans provided by private banks and credit unions under section 7(a) of the “Small Business Act.” A “tribal business concern” is eligible for the Program and is defined as a small business concern:
- that is wholly owned by one or more Indian Tribal Governments, or by a corporation that is wholly owned by one or more Indian Tribal Governments; or
- that is owned in part by one or more Indian Tribal Governments, or by a corporation that is wholly owned by one or more Indian Tribal Governments, if all other owners are either United States citizens or small business concerns. 15 USC 657a(b)(2)(C). At this time, it is unclear whether tribal gaming enterprises with less than 500 employees will be eligible.
The loans are intended to incentivize eligible businesses to maintain their workforce and keep their employees paid during the coronavirus crisis. If the business retains its workforce, the “loan” essentially is converted into a grant and will be forgiven. A “covered small business concern” is defined as a small business that, as a result of the coronavirus outbreak, has experienced:
- Supply chain disruptions;
- Staffing challenges;
- A decrease in gross receipts or customers; or
- A closure.
- Loan amounts are determined by calculating 2.5 months of payroll (broadly defined), together with outstanding business debt or a maximum of $10 million.
- The terms of these loans are not to exceed more than 5 years and an interest rate of not more than 4%.
- The loan proceeds may be used to meet payroll, and to pay health care, paid leave (sick, family and medical), mortgage interest, rent, utilities, and interest on other debt incurred before January 2020.
- This provision is accompanied by a “Sense of the Senate” that priority should be given to underserved communities and rural markets, veterans, and small and socially disadvantaged businesses.
The “Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy Fund”
For businesses with more than 500 employees, Title IV of the CARES Act includes the “Coronavirus Economic Stabilization Act of 2020” to provide $500 billion in loans, loan guarantees and other forms of investment to “States and eligible businesses” to help them deal with “covered losses” as a result of the coronavirus.
- “Covered loss” is defined as “losses incurred directly or indirectly as a result of the coronavirus as determined by the Secretary;”
- “Eligible business” is defined as “a United States business that has not otherwise received adequate economic relief in the form of loans or loan guarantees provided under the Act;”
- “State” is defined to include Indian Tribes;
- $25 billion is available for the airline industry;
- $4 billion is available for cargo air carriers;
- $17 billion is available for businesses critical to maintaining national security; and
- $454 billion is available to the Federal Reserve to support liquidity and encourage lending to “eligible businesses, States, and municipalities.”
The Treasury Secretary has 10 days after enactment to publish procedures for applications. Applicants must be an “eligible business” with unavailable credit and intend that the debt is prudently incurred.
- Must be sufficiently secured or made at a rate reflecting the risk of the loan;
- The rate is not less than the market rate in the pre-coronavirus period;
- May not be for more than 5 years;
- May not be used for stock buybacks; and
- May not be used to provide dividends or capital distributions.
The borrower is required to commit to maintaining its employment levels as of March 24, 2020, with a maximum reduction of 10%. The loan agreement must certify that the borrower is created or organized under the laws of the United States, and has significant operations in, and a majority of employees in, the United States.
The borrower “must have incurred or is expected to incur covered losses such that the continued operations of the business are jeopardized as determined by the Secretary.”
The “Coronavirus Relief Fund”
The CARES Act also includes as Title VI, the “Coronavirus Relief Fund (“Fund”)” for “making payments to States, Tribal Governments, and units of local governments” in the amount of $150 billion. “Indian Tribe” is defined by reference to the definition in the Indian Self-Determination and Education Assistance Act, 25 USC 5304(e). The Fund carves out:
- $3 billion for Washington, D.C., Puerto Rico, and the Territories;
- $8 billion for Tribal Governments; and
- Not less than $1.25 billion for a State that is one of the 50 States.
The Treasury Secretary has 30 days to expend the funds.
For Tribal Governments:
“[t]he amount paid shall be the amount the Secretary shall determine, in consultation with the Secretary of the Interior and Indian Tribes, that is based on incurred expenses of each such Tribal Government (or a tribally-owned entity of such Tribal Government) relative to the aggregate expenditure in fiscal year 2019 by the Tribal Government and determined in such a manner as the Secretary determines appropriate to ensure that all amounts available…for fiscal year 2020 are distributed to Tribal Governments.”
A Tribal Government must use the funds provided “to cover only those costs of the Tribal Government” that are:
- Necessary expenditures incurred due to the public health emergency caused by the coronavirus outbreak;
- Not accounted for in the budget most recently approved as of the date of enactment; and
- Incurred between March 1, 2020, and December 30, 2020.
CARES Act Division B – Emergency Appropriations – Tribal Provisions
Department of Agriculture
Supplemental Nutrition Assistance Program (“SNAP”)
$100 million - for food distribution program on Indian reservations
- Funded through Section 4(b) Food and Nutrition Act, 7 U.S.C. 2013 and Section 4(a) Agriculture and Consumer Protection Act, 7 U.S.C. 1431
- $50 million for facility improvements and equipment upgrades, and
- $50 million for food purchases
Department of the Interior
Bureau of Indian Affairs - Operation of Indian Programs $453 million available for:
- Public Safety and Justice Programs
- Deep Cleaning of Facilities
- Purchase of Personal Protection Equipment (“PPE”)
- Information Technology for Teleworking
- Welfare Assistance and Social Services - including to individuals
- Assistance to Tribal Governments
- Welfare assistance under this Act shall not be included in the statutory maximums under P.L. 116-94
$400 million to meet direct needs of tribes and is available through tribal priority allocations for tribal response and capacity building for the COVID-19 emergency.
Bureau of Indian Education and Department of Education
Transfer of 1/2 of one percent from the Department of Education to the Bureau of Indian Education - Total is $69 million.
- $23 million to tribal colleges and universities
- Distributed proportionally
- $46 million to BIE operated and tribally controlled schools to address operational needs
- Enhance online distance learning for students, IT hardware capacity, and Wi-Fi connectivity and other support
Department of Health and Human Services Indian Health Service
$1.032 billion total to be used for:
- Public Health Support
- Electronic Health Record Modernization
- Telehealth and Other IT Upgrades
- Purchased/Referred Care
- Catastrophic Health Emergency Fund
- Urban Indian Organizations
- Tribal Epidemiology Centers
- Community Health Representatives
- Other Activities to Protect Patients and Staff
$65 million set-aside for electronic health record stabilization and planning for tribal consultation $450 million set-aside to be distributed to:
- IHS directly operated programs
- Tribes and tribal organizations under ISDEAA
- Contracts or grants with Urban Indian Organizations under Title V of the Indian Health Care Improvement Act
- Any remainder to be distributed at the discretion of the Director of IHS
$125 million may be merged with Indian Health Service/Indian Health Facility appropriations at the discretion of the IHS Director.
Please note that the total for the set-asides are a minimum and add up to only $640 million. That leaves a balance of $392 million.
Centers for Disease Control (“CDC”)
$4.3 billion over the next 4 years total
$1.5 billion available through grants and cooperative agreements with:
- Tribal Organizations
- Urban Indian Health Organizations
- Health Service Providers to Tribes
Funding can be used for:
- Carry-out Surveillance
- Laboratory Capacity
- Infection Control
If an entity received a 2019 Public Emergency Health Awareness Grant, they are automatically awarded the same amount under this program.
$125 million minimum set-aside for:
- Tribal Organizations
- Urban Indian Health Organizations
- Health and Service Providers for Tribes
Substance Abuse and Mental Health Services Administration
$15 million set-aside for behavioral health services to:
- Tribal Organizations
- Urban Indian Health Organizations
- Health or Behavioral Health Providers for Tribes
Public Health and Social Services Emergency Fund
$15 million set-aside for tribes for the purchase of:
- Medical Supplies
Housing and Urban Development Office of Public and Indian Housing
$5 million for Tribal Program offices
Native American Programs
$300 million total
- $200 million for Native American Housing Title I Block Grants - must be used for increased need due to COVID-19.
- $100 million added to the Indian Community Block Grant Program
Note: The federal agencies involved in administering the programs and funds established in the CARES Act are in the process of issuing guidance for eligibility and how to access the assistance discussed above. Therefore, the information we are providing is subject to change. Please check back periodically for updates.
This is a fluid and rapidly changing situation and these resources are current only as of the date of publication. We recommend that you contact your local Quarles & Brady attorney regarding the most up-to-date information or with any other questions regarding this subject matter, or contact Thomas Springer: (608) 283-2674 / [email protected].