Legislature to Discuss Getting Coronavirus Relief Funds to Cities

June 15, 2020

A new bill would distribute $841 million to cities, counties, and townships for pandemic-related expenses.

Note: There is updated information on this topic. Read the latest article.

SF 47 (Sen. Julie Rosen, R-Vernon Center), a bill to distribute federal funds to local units of government for pandemic-related expenses, has been introduced in the Senate.

The Legislature’s regular session ended without an agreement on how federal funds provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act would be distributed to local governments. Discussions have been ongoing to reach an agreement that could be approved in a special session. Gov. Tim Walz called the Legislature into special session beginning on June 12.

SF 47 is a hybrid of the House and Senate bills discussed at the end of the regular session. The House version of the bill will be introduced this week, and initial action on the legislation is also expected this week in the House and Senate.

Under the bill, the Department of Revenue (DOR) would distribute $841 million of the state’s allocation from the Coronavirus Relief Fund to cities, counties, and townships. The funds may be used for pandemic-related costs that occur between March 1, 2020, and Dec. 30, 2020.

The U.S. Treasury Department has developed guidance and a frequently asked questions (FAQs) document for the uses of the funds. The guidance and FAQ documents have been regularly updated to clarify the allowable uses to include broader categories of costs and employees presumed to be performing work related to the pandemic or having work impacted by pandemic considerations.

—Access the U.S. Treasury guidance

Distributions under the Senate bill

Under SF 47, cities with populations equal to or greater than 200 will be eligible to receive a distribution from the DOR of $75.34 per capita. Distributions would be made by June 30 for certification requests made by cities by June 22.

—See a list of city distribution amounts (pdf)

Cities under 200 population will not see a direct distribution but will be eligible to receive a distribution from their county if they apply to the county before Sept. 1. Distributions would be made before Sept. 20.

Townships with a population of at least 200 will be eligible to receive a distribution from the DOR of $25 per capita unless their population is greater than 4,999, in which case they will be eligible to receive a distribution equal to the city per capita allocation of $75.34. Townships with populations under 200 are eligible to receive distributions from their counties under the same process for small cities.

Counties (except Hennepin and Ramsey, which received direct allocations from the U.S. Treasury) will receive $121.28 per capita plus an additional amount for cities and townships under 200 in population. Counties will be required to allocate funds to cities and townships under 200 in population through an application process and will also have to set aside at least 10% of their allocation for emergency financial assistance to individuals or for economic support for businesses.

Local units of government would be allowed to enter into collaborative agreements with other units of government to share aid distributions to cover COVID-related costs.

Unused funds

If a city, county, or township does not use all of the distribution by Nov. 15, 2020, those unused funds would be returned to the home county for reuse on eligible pandemic costs except that cities in Hennepin and Ramsey counties would return unused funds to the Hennepin County Medical Center (HCMC) and Regions Hospital for reuse. Any remaining aid amounts unspent by counties, HCMC, or Regions Hospital by Dec. 15, 2020, must be returned to the commissioner of Revenue.

Unlike the regular session House proposal, the special session bill does not set aside any of the allocation to local units of government for undefined future uses. The regular session House bill had set aside $100 million for future uses.

Certification process

Under the bill, the DOR will be required to develop and employ a “certification process,” whereby a local unit of government will be required to submit a request for funding and acknowledge that it understands the restrictions on uses of the funds. The DOR has suggested this may be done via email or a web portal. More information on the process is expected to be available soon.