On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, setting in motion the distribution of funds and other relief mechanisms to counteract the economic fallout from the coronavirus (COVID-19) pandemic. The legislation contains several provisions to address the unique and disproportionate impacts of the pandemic in Indian country. These involve a number of measures that include Indian tribes within the range of entities eligible for relief (e.g., the $454 billion of authorized spending by the Treasury Department for loans, loan guarantees, and other investments to benefit distressed businesses, states, municipalities, and Tribal nations). More specifically, however, are provisions that set aside a specific amount of funding to support Tribal governments as they respond to and manage the significant costs and related impacts associated with COVID-19. The following discussion identifies the current status of implementation efforts related to these measures and important considerations to keep in mind due to oversight requirements in the CARES Act.
Coronavirus Relief Funds for Tribal Governments
Title V of the Act provides for $150 billion in aid to States, Tribal governments, and units of local government. Of that amount, $8 billion in aid is expressly dedicated for payments to Tribal governments, with such funds to be disbursed not later than 30 days after the date of enactment.1 There are 573 federally recognized Indian Tribes in the United States and the amount available for each Tribe is still to be determined. On this point, the Act states that the amounts paid will be determined by the Secretary of the Treasury in consultation with the Secretary of the Interior and Indian Tribes. Treasury and Interior have initiated consultation sessions with Tribes and are taking input until April 13, 2020 on the methodology to be used in allocating the $8 billion.2 In accordance with the Act, the funding is to be distributed by April 26, 2020.
The Act specifies that the use of Title V funding is for necessary expenditures that were (1) incurred to address the COVID-19 public health emergency; (2) not accounted for in the budget; and (3) incurred during between March 1 and December 30, 2020. In making its determination on allocating available funds, key issues include (1) the formula that is the basis for the allocation; (2) the means for allocating the funds so that Tribes can receive and use them as soon as possible; and (3) whether any guidance is provided on qualifying expenditures under the Act. On this last point, as sovereign governments addressing the pandemic on many levels, Tribes should have broad discretion to define necessary expenditures under the Act. Nonetheless, as set forth in an earlier alert (March 30 Alert on CARES Act Oversight), the CARES Act has strong oversight authorities. Specifically, Title V includes a section authorizing recoupment of distributed funds if the Treasury Department’s Inspector General determines that they were not used consistent with the Act’s definition of qualifying expenditures. Tribal governments need to be cognizant of these authorities in developing their expenditure plans.
Emergency Appropriations for the Bureau of Indian Affairs
The CARES Act also provides supplemental emergency appropriations to federal agencies to effectively respond to COVID-19. This includes an appropriation of $453 million to the Bureau of Indian Affairs (BIA) for operating Indian programs, which represents a 30% increase in the amounts available to BIA in the 2020 Omnibus Appropriations bill. The funding is available through the end of fiscal year 2021 for the purpose of addressing direct Tribal needs related to preparing for and responding to the coronavirus. Interior has not publicly disclosed how it intends to distribute these funds, but the Act specifically authorizes distribution through tribal priority allocations in the budget and references the use of existing self-determination contracts and compacts under the Indian Self-Determination and Education Assistance Act (ISDEAA). Unlike the coronavirus relief funds, there are no specific oversight and recoupment provisions related to the emergency appropriations. Nonetheless, the general oversight provisions identified in the March 30 alert apply.
Emergency Appropriations for the Indian Health Service
In addition to BIA, the CARES Act provides supplemental appropriations to the Indian Health Service (IHS) in the amount of $1.032 billion. This money is available through the end of fiscal year 2021 for preparing for and responding to the coronavirus outbreak. This funding is in addition to approximately $214 million made available to the IHS and the Centers for Disease Control and Prevention in the prior COVID-19 relief bills3 to support tribes and tribal organizations as they respond to coronavirus in American Indian and Alaska Native communities.
According to an April 3, 2020 letter from the Principal Deputy Director of the IHS to Tribal leaders, distribution decisions have already been made for $600 million of the CARES Act supplemental appropriations, as follows: (1) $30 million for Urban Indian Organizations (UIOs) pursuant to existing Indian Health Care Improvement Act contracts; and (2) $570 million to IHS federal health programs (i.e., IHS-operated service units) and Tribal Health Programs (THPs) through existing ISDEAA agreements. Of the remaining $432 million, IHS will use $65 million for electronic health-record stabilization and support as contemplated in the Act and will allocate the remaining $367 million by late April following consideration of comments provided by tribal leaders and UIOs. With respect to oversight, IHS has made clear that the funds provided to THPs must be used consistent with the purposes for which they were appropriated, and that those THPs should immediately notify IHS if they are unable to comply.
As guidance is developed and decisions made on allocating CARES Act funding over the next several weeks, WilmerHale’s team of experienced lawyers and policy professionals is available to assist Tribal governments and organizations navigate, comply, and defend decisions made in support of their planning, response, and long-term recovery actions associated with the coronavirus pandemic.