Tribal Provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES)
OverviewPODCAST | COVID-19: Tribal + CARES Act
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748, the largest economic relief package in U.S. history. This third round of COVID-19 legislation provides $2 trillion in economic stimulus funds to individuals and entities nationwide, including $8 billion in provisions targeted to assist Indian Tribes and Tribal communities struggling with the effects of this pandemic.
Tribal Government Relief Fund. The Act establishes an $8 billion Tribal Government Relief Fund that will provide Tribes with direct access to resources for economic recovery and allow Tribes to continue providing governmental services to Tribal members and Tribal communities. This funding is critical for Tribes that have closed their casinos and will be without that important revenue stream to pay staff salaries and provide governmental services.
The Relief Fund will be administered by the Department of the Treasury, which together with the Department of the Interior is engaging in consultation with Tribal leaders to develop a model for distributing the funding and guidance regarding what will qualify as necessary expenditures incurred in responding to COVID-19. In addition to teleconferences with Interior representatives on April 9, Tribal governments can submit written comments to firstname.lastname@example.org and email@example.com no later than Monday, April 13, 2020.
Small Business Administration (SBA) Section 7(a) Loan Program. The CARES Act amended the Small Business Act to establish the Paycheck Protection Program, a $349 billion loan guarantee program. Under the Paycheck Protection Program, the federal government guarantees 100 percent of loans of up to $10 million made from February 15, 2020, through June 30, 2020, to cover payroll, employment-related, and certain operational and debt costs for up to two months. The loans will be forgiven as long as businesses keep paying their workers.
The SBA issued interim eligibility rules at the beginning of April, 13 CFR 120.110, that caused some confusion, including concerns that Tribal casinos that would otherwise qualify as small businesses by virtue of their size would be ineligible because they are gambling enterprises. Paragraph (g) of that section deems businesses deriving more than one-third of their gross annual revenue from legal gambling from gaming activities ineligible. Also ineligible are government-owned entities, except for businesses owned or controlled by a Tribe. 13 CFR 120.110(j).
Arguably, the exception of Tribes from the prohibition against loans to government-owned entities would also apply to Tribally-owned gaming operations. Tribal governments are strongly encouraged to submit written comments on the SBA interim rules during the consultation period to get clarity on the rule and provide for eligibility of Tribal casinos, which employ more than 700,000 people directly and indirectly, and generated more than $37 billion in 2017.
Healthcare. The Act allocates over $1 billion to the Indian Health Service, including an increase to Tribal shares and urban Indian organizations that receive funding through Indian Self-Determination contracts and compacts (638 Contracts) with the federal government. The CARES Act includes $125 million in grants from the Centers for Disease Control and Prevention to Tribes to prevent, prepare for, and respond to the coronavirus. An additional $15 million is available to Tribes, Tribal organizations, urban Indian health organizations, or Tribal health or behavioral health service providers and another $15 million is allocated to Tribes under the Public Health and Social Services Emergency Fund’s COVID-19 response.
Nutrition. The Food Distribution Program for Indian Reservations through the U.S. Department of Agriculture will receive $100 million to provide USDA commodity foods to low-income households, including the elderly, living on Indian reservations. Another $50 million is authorized for costs relating to food purchases, and an additional $50 million is reserved for facilities improvements and equipment upgrades.
The CARES Act provides $20 million for the delivery of nutrition services to American Indians, Alaska Natives, and Native Hawaiian elders under the Older Americans Act, and mandatory funding for the Special Diabetes Program for Indians is extended through November 2020 at FY2020 levels ($150 million per year).
Education. The Bureau of Indian Education operates Indian schools nationwide and provides direct financial support to Tribes in the operation of their own K-12 schools, colleges, and universities. The CARES Act sends an additional $69 million to the Bureau of Indian Education (BIE) to support COVID-19 response, including the payment of salaries, transportation, and information technology, and provides a $153.75 million set-aside to BIE-funded programs.
Tribal Government. Many Tribal governmental services in Indian Country are funded through 638 Contracts from the Bureau of Indian Affairs. In addition to the Tribal Government Relief Fund discussed above, the Act adds $453 million to funds available to Tribes under aid to Tribal government provisions in 638 Contracts.
We know that we are all in this together. Schwabe has created a COVID-19 Task Force to help clients navigate these uncertain times, and we are constantly updating our COVID-19 Resources page. Our Indian Law group stands ready to help you.
- Connie Sue MartinIndustry Group Leader