13 - Authorizing necessary documents to pursue the Coronavirus Relief Fund created by the CARES ActItem No. 13
TO: Mayor & City Council
FROM: Grayson Path, City Manager
Gene Anderson, Finance Director
SUBJECT: CORONAVIRUS RELIEF FUND (CRF)
CARES ACT
DATE: June 8, 2020
BACKGROUND:
The United States Congress approved the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, signed in to law by President Trump. This funding is designed to help governments,
businesses, and individuals who are responding to the CoVid-19 pandemic. The State of Texas
was given $11.24 billion as its share of this funding. From this, 55% will go to the State of Texas
with a portion of the remaining 45% going to local governments. The funding was initially
dedicated for Cities and Counties with populations in excess of 500k, but with the coordination of
the Texas Municipal League (TML), Mayors across the State (including Mayor Clifford) sent the
Governor a request that a portion of this funding come to smaller local governments as well.
Governor Abbott, via the attached letter dated May 11, 2020, agreed to set aside about $1.85 billion
for smaller local governments.
The City of Paris has been allocated a maximum amount of $55 per capita which is $1,393,150.00.
The City of Paris would be allocated 20% of this immediately upon signing the attached
agreements ($278,630.00) and the remainder will be available as reimbursement as we submit
requests.
The Texas Department of Emergency Management (TDEM) has been tasked with administering
these funds. They are further working with the Texas A&M AgriLife Extension to assist TDEM
through this process.
As can be seen in the Terms and Conditions for the CRF, there are restrictions for use of these
funds. This will be discussed below.
STATUS OF ISSUE:
In order for the City of Paris to access these funds, the City must:
1. Approve of the attached Resolution
2. Agree to the Terms and Conditions
3. Sign the Certification Form
The Resolution will address all of this.
Upon reading the Tenns and Conditions, it is clear that as with all other Federal Funding, the City
will need to comply with numerous grant assurances (Exhibit A), record keeping, reporting,
compliance, etc. This is common for all federal funding. To this point, the work time needed to
do this can become involved and so the City has in the past contracted out with a third -party
administrator to administer these grants on behalf of the City. This takes the burden off of the City
Staff. In addition, the listed consequences for errors, mistakes, etc. are quite serious, thus it is
highly recommended that a third -party administrator be pursued. It is City Staff's plan to procure
this service unless City Council tonight requests a different route. An agreement with the third -
party administrator will be brought back at a future meeting.
Per the Terms and Conditions, this programming is retroactive to expenses incurred from March
1, 2020 and will extend to December 30, 2020. In addition, City Staff have been instructed to
gather all necessary documentation to support reimbursement (with the assumption that this is
approved tonight). Given these actions in motion, we are not pressed for time, but we will start
the process of procuring a third -party administrator right away. In addition, pursuant to Section
5.7, the City has 90 days beyond December 30, 2020 to submit all final requests for
reimbursements.
BUDGET:
To this point, the City has been absorbing all CoVid-19 expenses within its normal budget. Up
until the Governor agreed to slice off a portion of the CARES funding for smaller local
governments, there was no known support coming to municipalities. Departments have though
been tracking expenses just in case funding became available. With this, it was not until we saw
the Ten -ns and Conditions that we had clues towards which specific items would be eligible. We
now have that and have started to adjust our data to identify eligible expenses. I do not have a
total for you as of today, but we will be able to report on this after we begin our reporting.
Pursuant to the agreement, the City will receive 20% of the total funding, thus $278,630.00, upfront
upon signing this agreement. This is to immediately help reimburse the City for expenses since
March 1, 2020. Further drawdowns will be based on reimbursement. If authorized, a third -party
administrator will assist the City in overseeing the administration of this funding and drawdowns.
This individual will work directly with Gene Anderson, Finance Director. It is our understanding
that this Administrator's expense will also come from the funding.
Please see section 1.5 for the limitations on the funding as well as eligible expenses. In short, it
has to be a CoVid-19 expense, have occurred from 3/1 —12/30, and was not planned in our budget.
Specifics are medical expenses, public health expenses, and payroll expenses. There are additional
eligible expenses, but those are limited to no more than 25% of the allotted amount and further
clarification and research needs to occur to properly understand these items. The funding is further
conditioned on the expenses must have been substantially different than what our normal
operations would have been (ex: We do not believe an EMS call is covered as that is our normal
duty, but the time spent cleaning the ambulance due to CoVid-19 after the call would. Another
example would be Parks Department cleaning the playground equipment as the manner and degree
we are doing this is strictly because of CoVid-19.). We do foresee a sizable amount of eligible
expenses such as the Antibody test kits, extra EMS staff due to calls and cleaning requirements,
chemicals to clean Fire Station and Playground Equipment, OT covering for employees absent due
to Quarantine, reimbursement to City for leave time employees took due to the FFCRA (two weeks
of FMLA authorized under the FFCRA), etc.
OPTIONS:
1. Authorize the attached Resolution which authorizes the signing of the Terms and
Conditions, Certificates, and other necessary documents to pursue the CRF Program
Funding.
2. Request edits to the Resolution, documents, etc.
3. Request additional information to be brought back at a future City Council meeting.
4. Reject the Resolution.
RECOMMENDATION:
Authorize the attached Resolution which authorizes the signing of the Terms and Conditions,
Certificates, and other necessary documents to pursue the CRF Program Funding.
If this is approved, the City Staff will pursue procuring a third -party administrator for
administrating the program. The agreement will be brought back to the City Council.
SUMMARY OF AGREEMENT:
The Terms and Conditions are summarized as follows:
1.1 This agreement shall constitute the entire agreement for overseeing this program.
1.2 City Council shall approve a Resolution to authorize the signing of this agreement.
1.3 The Notice received is open and available until agreement is signed (or until 12/30/20 hits).
1.4 Reimbursement of expenses limited to period between March 1, 2020 to December 30, 2020.
This is a reimbursement -based program.
1.5 Expenses must be directly related to CoVid-19. Primary focus is medical expenses, public
health expenses, and payroll expenses. Note — there are other eligible expenses, but Staff need
to research these more to better understand how they might be implemented, if at all. We are
responsible for using the funds correctly, responsibly, and in compliance with this agreement.
1.6 Amendments to this agreement must be approved by both parties in writing.
1.7 TDEM authorizes the City and County to share funds if that becomes a possibility..
1.8 Bound to Texas Public Information Act.
1.9 Lengthy list of consequences if City fails to comply with this agreement.
1.10 Consequences for false information including criminal repercussions.
1.11 Language regarding conflicts of interest.
1.12 Language regarding fraud, waste and abuse.
1.13 Basic termination clause.
1.14 Basic limitation of liability clause.
1.15 Basic dispute resolution language — will attempt to settle in good faith first; then submit a
claim to the Chief of TDEM; followed by lawsuit in Travis County Court.
1.16 City is an independent contractor from TDEM.
1.17 Refers you to Exhibit A which has a lengthy series of Grant Assurances that the City must
adhere to. This is the primary body of items we must be held accountable to in order to have
access to federal funds. There are a wide variety of items including conflicts due to
relationships to vendors, public information, child support, compliance of our Law
Enforcement to Texas Commission rules, reporting of child abuse, non-discrimination, Davis -
Bacon Act, Hatch Act, FLSA, various environmental Acts, etc. These are items that having a
third -party administrator on board helps to keep us in adherence with.
1.18 We will only work with entities that are not debarred from SAM.
1.19 — 1.32 All these section involve standard contract language on notices, force majeure,
severability, E -Verify (which we will start doing), etc.
2.1 Any equipment we purchase using these funds must be in compliance with the purpose of this
funding (section 1.5). We must also inventory and keep an accounting of this equipment.
2.2 Language for obtaining third party administrator — their compensation cannot exceed 5% of
the grant funding.
2.3 We must follow Federal and State Procurement — again, a third party administrator will help
in this area for whenever Federal differs from the State laws we use.
2.4 Any contracts we award using this funding must include the provisions laid out in this section.
3.1 We will cooperate with State Auditors.
3.2 If we spend in excess of $750k in federal funds this year, we will have our financial auditors
perform a specific audit in compliance with the Single Audit Circular.
3.3 If the audit finds problems, we will work with TDEM to correct those problems.
3.4 We will maintain these records for at least seven years.
4.1 List of prohibited costs — the most important one being we cannot use this funding to replace
lost revenue.
4.2 This funding cannot be used to finance any political or lobbying activity.
5.1 Funding will be sent via direct deposit.
5.2 Payments to the City must be in compliance with the Grant Agreement. Will receive the 20%
upon signing this agreement. Our requests must be supported and documented.
5.3 Must submit quarterly financial reports on our progress.
5.4 TDEM is obligated to pay us the funding that is eligible and meets requirements.
5.5 If we are overpaid, must refund balance.
5.6 TDEM has the right to recapture funds that were spent incorrectly.
5.7 We have 90 days following 12/30/2020 to submit our final requests for reimbursement.
5.8 There will be a final close out of this program once the deadline hits and the last payouts have
been processed.
RESOLUTION
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS,
AUTHORIZING THE SIGNING OF THE TERMS AND CONDITIONS,
CERTIFICATES AND OTHER NECESSARY DOCUMENTS TO PURSUE THE
CORONAVIRUS RELIEF FUND (CRF) CREATED BY THE CARES ACT;
AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS TO
PURSUE THE FUNDING; MAKING OTHER FINDINGS RELATED TO THE
SUBJECT; DECLARING AN EFFECTIVE DATE.
WHEREAS, the United States Congress approved the Coronavirus Aid, Relief, and
Economic Security (CARES) Act to help governments, businesses and individuals who are
responding to the COVID-19 pandemic; and
WHEREAS, the City of Paris has been allocated a maximum amount of $55.00 per
capita ($1,393,150.00), of which 20x/0 ($278,630.00) will be allocated immediately upon
signing the agreements attached hereto and incorporated herein by reference as Exhibit A,
with the remainder of the funds available as reimbursement as the city submits requests;
and
WHEREAS, this program is retroactive to expenses incurred from March 1, 2020 and
will extend to December 30, 2020; and
WHEREAS, eligible expenses must be COVID-19-related expenses incurred from
March 1 to December 30, 2020 and not planned as a part of the city's budget, such expenses
including but not limited to cleaning playground equipment, extra EMS staff due to calls and
cleaning requirements, COVID-19 test kits, reimbursement to the City for employee leave
time due to FFCRA; and
WHEREAS, in order for the City to access these funds, the city must approve this
resolution, agree to the Terms and Conditions of the grant, and sign the Certification Form
attached herewith as Exhibit A; and
WHEREAS, due to the numerous grant assurances, record keeping, reporting
compliance, etc. and the work time needed to do so, it is highly recommended that we use a
third -party administrator; and
WHEREAS, upon City Council approval, City Staff will pursue procuring a third -party
administrator for administrating the program; and
WHEREAS, it is necessary and in the best interests of the City of Paris to apply for
funding under the Coronavirus Relief Fund (CRF);
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
1 N-3 a 21A M Ef �m N 0]
Section 2. That the City Council directs and designates the City Manager as the City's
Chief Executive Officer and Authorized Representative to act in all matters in connection
with this application to apply for the CRF Funding as set forth in the Terms and Conditions
in Exhibit A attached hereto and to sign any and all documents, cercations, and
applications related thereto.
Section 3. That the City Council authorizes City Staff to procure a third party company
to administer the funding under the program.
Steven J. Clifford, M.D., Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
STATE OF TEXAS
May 11, 2020
Dear County and City Leaders:
Thank you for your continued work to combat the coronavirus and address the ancillary effects
of that fight in your communities. These are tremendously difficult times for all Texans. Please
know that the elected representatives in your state government are working continuously to
protect the health and safety of this state, mitigate the economic ramifications of COVID-19, and
build a path towards recovery.
As you are keenly aware, Congress passed the Coronavirus Aid, Relief, and Economic Security
(CARES) Act to provide much needed resources to help governments, businesses, and
individuals respond to the current pandemic. President Trump signed the CARES Act into law
and his administration continues to provide guidance on the numerous avenues of federal
funding the legislation provides. Within the CARES Act, the Coronavirus Relief Fund (CRF)
was created to provide financial resources to state and local governments. As it relates to the
CRF, Texas has received approximately $11.24 billion from the United States Department of
Treasury (Treasury) for direct coronavirus related expenses based on the funding formula
provided in the CARES Act.
Consistent with the CARES Act, 45 percent of the total $11.24 billion state allocation—
approximately $5.06 billion—will be made available to local governments. Of that $5.06 billion,
Treasury has directly sent just over $3.2 billion to the six cities and 12 counties in Texas with a
population greater than 500,000. That leaves approximately $1.85 billion that the state can make
available to the cities and counties in the rest of the state.
Counties below 500,000 population and the Cities within them
The 242 counties, and each of the cities within those counties, that did not receive direct
allocations from Treasury are eligible to apply to the state for a per capita allocation from the
$1.85 billion. Cities with a population less than 500,000 located in counties with a population
exceeding 500,000 are addressed later in this letter. County allocations will be calculated based
on the population in the unincorporated areas of the county. We encourage cities and counties to
work together to address expenses that cross jurisdictional lines.
County and City Leaders
May 11, 2020
Page 3
The first allocation from the $1.85 billion in local funds will be made available to these cities and
counties on a $55 per capita allotment. Twenty percent of each jurisdiction's allocation will be
available immediately upon certification to the State that grant terms will be followed.
Importantly, Treasury has provided strict guidelines for local governments to receive funds.
Treasury affirmed that the State can transfer funds to local governments "provided that the
transfer qualifies as a necessary expenditure incurred due to the public health emergency and
meets the other criteria of section 601(d) of the Social Security Act. Such funds would be
subject to recoupment by the Treasury Department if they have not been used in a manner
consistent with section 601(d) of the Social Security Act." Treasury has also instructed that
"funds may not be used to fill shortfalls in government revenue to cover expenditures that would
not otherwise qualify as an eligible expenditure." Also, all costs must be incurred before
December 30, 2020, to qualify for funding.
Once jurisdictions provide documentation on the initial funding, they will then be able to access
the remainder of their allocation on a reimbursement basis. The unallocated funds will be
reserved for local expenses as future outbreaks and the long-term impacts of COVID-19 are
better known.
Cities below 500,000 population within Counties exceeding 500,000 population
The direct Treasury disbursements to the 12 counties were calculated based on their population,
less the total population inside cities larger than 500,000 that reside within those counties. In the
same way that cities and counties across the rest of the state will be provided funding on a per
capita basis, and are encouraged to work together to address expenses that cross jurisdictional
lines, the 12 counties that received direct funding from Treasury based on the total number of
residents in their counties (excluding those in the six largest cities) are expected to use their
funds to address expenses incurred by incorporated areas with a population less than 500,000
that are located in those counties as well as the needs of residents in unincorporated areas of
those counties. Each of the incorporated areas located in a county that received a direct
allocation from Treasury should seek funding for COVID-19 expenses directly from that county.
How to Apply
The Texas Division of Emergency Management (IDEM) will administer the reimbursement
process for the CRF. IDEM is partnering with Texas A&M AgriLife Extension to provide
individual assistance to each of you throughout the process, and that work is already underway.
All of the information to apply for the CRF, as well as guidance about eligible uses, can be found
at the following website: ww_w.tdem.texas. gov/crf. Questions can also be emailed to IDEM at
CRF(atdem.texas ov.
May 11, 2020
[-'age 3
Thank you again for your work on behalf of your residents. All Texans expect government to
work in a unified fashion to address this unprecedented situation, and we will continue to do so.
We understand there will be numerous questions, and we are committed to working through
them with you. In the meantime, please refer to the IDEM website for guidance.
Sincerely,
�J
Governor Greg Abbott Lt. Governor Dan Patrick Speaker Dennis Bonnen
C A*4AOYL,
Senator Jane Nelson
Chair, Senate Finance Committee
Senator Juan Chuy Hinojosa
Vice -Chair, Senate Finance Committee
�e
Representative Giovanni Capriglione
Chair, House Appropriations Committee
Representative Oscar Longoria
Vice -Chair, House Appropriations Committee
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MAY 111, 2020
About This Document
In this document, grantees will find the terms and conditions applicable to payments distributed in the
form of grants to local units of governments from the Coronavirus Relief Fund established within section
601 of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief, and Economic
Security Act ("CARES Act").
These requirements are in addition to those that can be found within the Grant Management System
(GMS), to which grantees agreed to when accepting the grant. Other state and federal requirements and
conditions may apply to your grant, including but not limited to: 2 CFR Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards; Chapter 783 of the Texas
Government Code; the Uniform Grant Management Standards (UGMS) developed by the Comptroller of
Public Accounts; the state Funding Announcement or Solicitation under which the grant application was
made; and any applicable documents referenced in the documents listed above.
To the extent the terms and conditions of this grant agreement do not address a particular circumstance
or are otherwise unclear or ambiguous, such terms and conditions are to be construed consistent with the
general objectives, expectations and purposes of this grant agreement and in all cases, according to its fair
meaning. The parties acknowledge that each party and its counsel have reviewed this grant agreement
and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this grant agreement. Any vague, ambiguous or
conflicting terms shall be interpreted and construed in such a manner as to accomplish the purpose of the
grant agreement.
J 23
�1�4ble of Contet its
AboutThis Document...............................................................................................................................2
1 Grant Agreement Requirements and Conditions......................................................................................5
1.1
Applicability of Grant Agreement and Provisions.........................................................................5
1.2
Legal Authority to Apply...............................................................................................................
5
1.3
Grant Acceptance..........................................................................................................................5
1.4
Project Period................................................................................................................................5
1.5
General Responsibility..................................................................................................................
5
1.6
Amendments and Changes to the Grant Agreement...................................................................6
1.7
Jurisdictional Cooperation............................................................................................................7
1.8
Public Information and Meetings.................................................................................................7
1.9
Remedies for Non-Compliance.....................................................................................................
7
1.10
False Statements by Grantee........................................................................................................8
1.11
Conflict of Interest Safeguards......................................................................................................8
1.12
Fraud, Waste, and Abuse..............................................................................................................8
1.13
Termination of the Agreement.....................................................................................................
9
1.14
Limitation of Liability.....................................................................................................................9
1.15
Dispute Resolution......................................................................................................................10
1.16
Liability for Taxes........................................................................................................................10
1.17
Required State Assurances.........................................................................................................10
1.18
System for Award Management (SAM) Requirements...............................................................10
1.19
No Obligation by Federal Government.......................................................................................11
1.20
Notice..........................................................................................................................................11
1.21
Force Majeure.............................................................................................................................11
1.22
Debt to State...............................................................................................................................11
1.23
Franchise Tax Certification..........................................................................................................11
1.24
Severability..................................................................................................................................12
1.25
E-Verify........................................................................................................................................12
1.26
Compliance with Federal Law, Regulations, and Executive Orders............................................12
1.27
Clean Air Act................................................................................................................................12
1.28
Federal Water Pollution Control Act...........................................................................................12
1.29
Suspension and Debarment........................................................................................................12
1.30
Energy Conservation...................................................................................................................13
1.31
Procurement of Recovered Materials.........................................................................................13
1.32
Terminated Contracts.................................................................................................................13
2 Property
and Procurement Requirements..............................................................................................13
2.1 Property Management and Inventory........................................................................................13
2.2 Consulting Contracts...................................................................................................................14
2.3 Procurement Practices and Policies............................................................................................14
2.4 Contract Provisions Under Federal Awards................................................................................14
3 Audit and Records Requirements............................................................................................................14
3.1 Cooperation with Monitoring, Audits, and Records Requirements...........................................14
3.2 Single Audit Requirements..........................................................................................................15
3.3 Requirement to Address Audit Findings.....................................................................................15
123
3.4 Records Retention.......................................................................................................................15
4 Prohibited and Regulated Activities and Expenditures...........................................................................16
4.1 Prohibited Costs..........................................................................................................................16
4.2 Political Activities........................................................................................................................16
5 Financial Requirements............................................................................................................................17
5.1 Direct Deposit.............................................................................................................................17
5.2 Payments and Required Documentation....................................................................................17
5.3 Financial Reporting.....................................................................................................................17
5.4 Reimbursements.........................................................................................................................18
5.5 Refunds and Deductions.............................................................................................................18
5.6 Recapture of Funds.....................................................................................................................18
5.7 Liquidation Period.......................................................................................................................18
5.8 Project Close Out........................................................................................................................18
EXHIBIT A - State of Texas Assurances.............................................................................................................19
EXHIBIT B— CARES ACT CORONAVIRUS RELIEF FUND ELIGIBILITY CERTIFICATION.........................................21
EXHIBIT C -CERTIFICATION REGARDING LOBBYING........................................................................................22
rare Agreement Re it nts and Conditions
The Grant Agreement is subject to the additional terms, conditions, and requirements of other laws, rules,
regulations and plans recited herein and is intended to be the full and complete expression of and
constitutes the entire agreement between the parties hereto with respect to the subject matter hereof
and all prior and contemporaneous understandings, agreements, promises, representations, terms and
conditions, both oral and written, are superseded and replaced by this Grant Agreement.
Notwithstanding any expiration or termination of this Grant Agreement, the rights and obligations
pertaining to the grant close-out, cooperation and provision of additional information, return of grant
funds, audit rights, records retention, public information, and any other provision implying survivability
shall remain in effect after the expiration or termination of this Grant Agreement.
.2.2 Legal A, ut horhy to Apply
The grantee certifies that it possesses legal authority to apply for the grant. A resolution, motion or similar
action has been or will be duly adopted or passed as an official act of the applicant's governing body,
authorizing the filing of the application, including all understandings and assurances contained therein,
and directing and authorizing the person identified as the official representative, or their designee of the
organization to act in connection with the application and to provide such additional information as may
be required.
1. ' Grant Aci::eptance
The Notice of Subrecipient Grant Award remains an offer until the fully executed copy of this Grant
Agreement is received by the Texas Division of Emergency Management (TDEM).
1.4 Pr°r:ject PeiJod
Funding has been authorized for eligible expenditures incurred between March 1, 2020 and December 30,
2020. The specific performance period for this grant is listed on the Notice of Subrecipient Grant Award.
All expenditures must be incurred, and all services must be received within the performance period. TDEM
will not be obligated to reimburse expenses incurred after the performance period. A cost is incurred
when the responsible unit of government has expended funds to cover the cost.
Per the CARES Act, CRF grant funds may only be used to cover expenses that —
1. are necessary expenditures incurred due to the public health emergency with respect to
the Coronavirus Disease 2019 (COVID-19)
2. were not accounted for in the budget most recently approved as of March 27, 2020 for the
state or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 30,
2020.
The US Department of Treasury (Treasury) provided additional guidance on the permissible use of grant
funds, including nonexclusive examples of eligible expenses in the following categories:
1. Medical expenses,
2. Public health expenses,
3
3. Payroll expenses for public safety, public health, health care, human services, and similar
employees whose services are substantially dedicated to mitigating or responding to the
COVID-19 public health emergency,
4. Expenses of actions to facilitate compliance with COVID-19-related public health measures,
5. Expenses associated with the provision of economic support in connection with the COVID-
19 public health emergency, and
6. Any other COVID-19-related expenses reasonably necessary to the function of government
that satisfy the Fund's eligibility criteria.
Further explanation of these categories and examples can be found at the following link:
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The subrecipient agrees that a minimum of 75% of its allotment will be spent in the categories of medical
expenses, public health expenses and payroll expenses for employees substantially dedicated to mitigating
or responding to the public emergency. The remainder of the allotment may be spent in any of the categories
provided within the Treasury guidance.
The grantee certifies compliance with these eligible expenses by executing the CARES Act Coronavirus Relief
Fund Eligibility Certification Form in Exhibit E, which is attached hereto and incorporated for all purposes.
The grantee is responsible forthe integrity of the fiscal and programmatic management of the grant project;
accountability for all funds awarded; and compliance with TDEM administrative rules, policies and
procedures, and applicable federal and state laws and regulations.
The grantee will maintain an appropriate grant administration system to ensure that all terms, conditions
and specifications of the grant are met.
1.6 Amndmeetand Changes to the Grczr t Agreerne^nt
TDEM and the grantee may agree to make adjustments to the grant. Adjustments include, but are not
limited to, modifying the scope of the grant project, adding funds to previously un -awarded cost items or
categories changing funds in any awarded cost items or category, deobligating awarded funds or changing
grant officials.
The grantee has no right or entitlement to reimbursement with grant funds. TDEM and grantee agree that
any act, action or representation by either Party, their agents or employees that purports to waive or alter
the terms of the Grant Agreement or increase the maximum liability of TDEM is void unless a written
amendment to this Grant Agreement is first executed and documented in GMS. The grantee agrees that
nothing in this Grant Agreement will be interpreted to create an obligation or liability of TDEM in excess of
the "Maximum Liability of the TDEM" as set forth in the Notice of Subrecipient Grant Award.
Any alterations, additions, or deletions to the terms of this Grant Agreement must be documented in GMS
to be binding upon the Parties. Notwithstanding this requirement, it is understood and agreed by Parties
hereto, that changes in local, state and federal rules, regulations or laws applicable hereto, may occur during
the term of this Grant Agreement and that any such changes shall be automatically incorporated into this
Grant Agreement without written amendment hereto, and shall become a part hereof as of the effective
date of the rule, regulation or law.
A municipality may yield any portion of its allocated funds to the county within which it exists or a county
may yield any portion of its allocated funds to a municipality within its footprint for eligible expenses. This
may be accomplished in one of the following ways:
1. By a grant amendment, as described in section 1.6, where by funds are deobligated from the original
subrecipient and then added to previously un -awarded costs items or categories of the receiving
jurisdiction's grant award.
2. A subrecipient may use funds pursuant to this agreement to subcontract with another political
subdivision within its jurisdiction for eligible and necessary expenditures incurred due to the public
health emergency. The subrecipient is responsible for ensuring subcontractor eligibility and
maintaining all required documentation.
Notwithstanding any provisions of this Grant Agreement to the contrary, the grantee acknowledges that
the State of Texas, TDEM, and this Grant Agreement are subject to the Texas Public Information Act, Texas
Government Code Chapter 552 (the "PIA"). The grantee acknowledges that TDEM will comply with the
PIA, as interpreted by judicial opinions and opinions of the Attorney General of the State ofTexas.
The grantee acknowledges that information created or exchanged in connection with this Grant
Agreement, including all reimbursement documentation submitted to TDEM, is subject to the PIA,
whether created or produced by the grantee or any third party, and the grantee agrees that information
not otherwise excepted from disclosure under the PIA, will be available in a format that is accessible by
the public at no additional charge to TDEM or State of Texas. The grantee will cooperate with TDEM in the
production of documents or information responsive to a request for information.
1,9 Remedies fnr Non- Compfiance
If TDEM determines that the grantee materially fails to comply with any term of this grant agreement,
whether stated in a federal or state statute or regulation, an assurance, in a state plan or application, a
notice of award, or any other applicable requirement, TDEM, in its sole discretion may take actions
including:
1. Temporarily withholding cash payments pending correction of the deficiency or more severe
enforcement action by TDEM;
2. Disallowing or denying use of funds for all or part of the cost of the activity or action not in
compliance;
3. Disallowing claims for reimbursement;
4. Wholly or partially suspending or terminating thisgrant;
5. Requiring return or offset of previous reimbursements;
6. Prohibiting the grantee from applying for or receiving additional funds for other grant programs
administered by TDEM until repayment to TDEM is made and any other compliance or audit finding
is satisfactorily resolved;
7. Reducing the grant award maximum liability of TDEM;
8. Terminating this Grant Agreement;
9. Imposing a corrective action plan;
7 1 '2
10. Withholding further awards; or
11. Taking other remedies or appropriate actions.
The grantee costs resultingfrom obligations incurred during a suspension or after termination of this grant
are not allowable unless TDEM expressly authorizes them in the notice of suspension or termination or
subsequently.
TDEM, at its sole discretion, may impose sanctions without first requiring a corrective action plan.
By acceptance of this grant agreement, the grantee makes all the statements, representations, warranties,
guarantees, certifications and affirmations included in this grant agreement. If applicable, the grantee will
comply with the requirements of 31 USC § 3729, which set forth that no grantee of federal payments shall
submit a false claim for payment.
If any of the statements, representations, certifications, affirmations, warranties, or guarantees are false
or if the grantee signs or executes the grant agreement with a false statement or it is subsequently
determined that the grantee has violated any of the statements, representations, warranties, guarantees,
certifications or affirmations included in this grant agreement, then TDEM may consider this act a possible
default under this grant agreement and may terminate or void this grant agreement for cause and pursue
other remedies available to TDEM under this grant agreement and applicable law. False statements or
claims made in connection with TDEM grants may result in fines, imprisonment, and debarment from
participating in federal grants or contract, and/or other remedy available by law, potentially including the
provisions of 38 USC §§ 3801-3812, which details the administrative remedies for false claims and
statements made.
1.11 Cotiflictofintei-estSofcquard�,
The grantee will establish safeguards to prohibit its employees from using their positions for a purpose that
constitutes or presents the appearance of personal or organizational conflict of interest or personal gain,
whether for themselves or others, particularly those with whom they have family, business, or other ties.
The grantee will operate with complete independence and objectivity without actual, potential, or apparent
conflict of interest with respect to its performance under this Grant Agreement. The grantee certifies as to
its own organization, that to the best of their knowledge and belief, no member of The A&M System or The
A&M System Board of Regents, nor any employee, or person, whose salary is payable in whole or in part by
a member of The A&M System, has direct or indirect financial interest in the award of this Grant Agreement,
or in the services to which this Grant Agreement relates, or in any of the profits, real or potential, thereof.
The grantee understands that TDEM does not tolerate any type of fraud, waste, or misuse of funds
received from TDEM. TDEM's policy is to promote consistent, legal, and ethical organizational behavior,
by assigning responsibilities and providing guidelines to enforce controls. Any violations of law, TDEM
policies, or standards of ethical conduct will be investigated, and appropriate actions will be taken. The
grantee understands and agrees that misuse of award funds may result in a range of penalties, including
suspension of current and future funds, suspension or debarment from federal and state grants,
recoupment of monies provided under an award, and civil and/or criminal penalties.
In the event grantee becomes aware of any allegation or a finding of fraud, waste, or misuse of funds
received from TDEM that is made against the grantee, the grantee is required to immediately notify TDEM
of said allegation or finding and to continue to inform TDEM of the status of any such on-going
investigations. The grantee must also promptly refer to TDEM any credible evidence that a principal,
8 IJ 23
employee, agent, grantee, contractor, subcontractor, or other person has -- (1) submitted a claim for
award funds that violates the False Claims Act; or (2) committed a criminal or civil violation of laws
pertaining to fraud, conflict of interest, bribery, gratuity, or similar misconduct involving award funds.
Grantees must also immediately notify TDEM in writing of any misappropriation of funds, fraud, theft,
embezzlement, forgery, or any other serious irregularities indicating noncompliance with grant
requirements. Grantees must notify the local prosecutor's office of any possible criminal violations.
Grantees must immediately notify TDEM in writing if a project or project personnel become involved in
any litigation, whether civil or criminal, and the grantee must immediately forward a copy of any demand,
notices, subpoenas, lawsuits, or indictments to TDEM.
TDEM may, at its sole discretion, terminate this Grant Agreement, without recourse, liability or penalty
against TDEM, upon written notice to grantee. In the event grantee fails to perform or comply with an
obligation or a term, condition or provision of this Grant Agreement, TDEM may, upon written notice to
grantee, terminate this agreement for cause, without further notice or opportunity to cure. Such
notification of Termination for Cause will state the effective date of such termination, and if no effective
date is specified, the effective date will be the date of the notification.
TDEM and grantee may mutually agree to terminate this Grant Agreement. TDEM in its sole discretion will
determine if, as part of the agreed termination, grantee is required to return any or all of the disbursed
grant funds.
Termination is not an exclusive remedy, but will be in addition to any other rights and remedies provided
in equity, by law, or under this Grant Agreement, including those remedies listed at 2 C.F.R. 200.207 and
2 C.F.R. 200.338 — 200.342. Following termination by TDEM, grantee shall continue to be obligated to
TDEM for the return of grant funds in accordance with applicable provisions of this Grant Agreement. In
the event of termination under this Section, TDEM's obligation to reimburse grantee is limited to allowable
costs incurred and paid by the grantee prior to the effective date of termination, and any allowable costs
determined by TDEM in its sole discretion to be reasonable and necessary to cost-effectively wind up the
grant. Termination of this Grant Agreement for any reason or expiration of this Grant Agreement shall not
release the Parties from any liability or obligation set forth in this Grant Agreement that is expressly stated
to survive any such termination orexpiration.
1.14 Limitation of Liability
TO THE EXTENT ALLOWED BY LAW, THE GRANTEE SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE
STATE OF TEXAS AND AGENCY, AND/OR THEIR OFFICERS, REGENTS, AGENTS, EMPLOYEES, REPRESENTATIVES,
CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS,
OR SUITS, AND ALL RELATED COSTS, ATTORNEY FEES, AND EXPENSES ARISING OUT OF, OR RESULTING FROM
ANY ACTS OR OMISSIONS OF RESPONDENT OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER
FULFILLERS, OR SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE OF THE CONTRACT
AND ANY PURCHASE ORDERS ISSUED UNDER THE CONTRACT. THE DEFENSE SHALL BE COORDINATED BY
RESPONDENT WITH THE OFFICE OF THE TEXAS ATTORNEY GENERAL WHEN TEXAS STATE AGENCIES ARE
NAMED DEFENDANTS IN ANY LAWSUIT AND RESPONDENT MAY NOT AGREE TO ANY SETTLEMENT WITHOUT
FIRST OBTAINING THE CONCURRENCE FROM THE OFFICE OF THE TEXAS ATTORNEY GENERAL. RESPONDENT
AND AGENCY AGREE TO FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM.
The grantee agrees that no provision of this Grant Agreement is in any way intended to constitute a waiver
by TDEM as an agency of the State of Texas, its officers, regents, employees, agents, or contractors or the
State of Texas of any privileges, rights, defenses, remedies, or immunities from suit and liability that TDEM
or the State of Texas may have by operation of law.
1, 15 Dispute Resolution
The Parties' representatives will meet as needed to implement the terms of this Grant Agreement and will
make a good faith attempt to informally resolve any disputes.
Notwithstanding any other provision of this Grant Agreement to the contrary, unless otherwise requested or
approved in writing by TDEM, the grantee shall continue performance and shall not be excused from
performance during the period any breach of Grant Agreement claim or dispute is pending.
The dispute resolution process provided in Chapter 2260, Texas Government Code, and the related rules
adopted by the Texas Attorney General pursuant to Chapter 2260, shall be used by TDEM and grantee to
attempt to resolve any claim for breach of contract made by the grantee that cannot be resolved in the
ordinary course of business. Grantee shall submit written notice of a claim of breach of contract under this
Chapter to the Chief of TDEM, who shall examine the grantee's claim and any counterclaim and negotiate
with grantee in an effort to resolve the claim.
The laws of the State of Texas govern this Grant Agreement and all disputes arising out of or relating to this
Grant Agreement, without regard to any otherwise applicable conflict of law rules or requirements. Venue
for any grantee -initiated action, suit, litigation or other proceeding arising out of or in any way relating to
this Grant Agreement shall be commenced exclusively in the Travis County District Court orthe United States
District Court, Southern District of Texas - Houston Division. Venue for any TDEM-initiated action, suit,
litigation or other proceeding arising out of or in any way relating to this Grant Agreement may be
commenced in a Texas state district court or a United States District Court selected by TDEM in its sole
discretion.
The grantee hereby irrevocably and unconditionally consents to the exclusive jurisdiction of the courts
referenced above forthe purpose of prosecuting and/or defending such litigation. The grantee hereby waives
and agrees not to assert by way of motion, as a defense, or otherwise, in any suit, action or proceeding, any
claim that the grantee is not personally subject to thejurisdiction of the above-named courts; the suit, action
or proceeding is brought in an inconvenient forum; and/or the venue is improper.
1.16 Liability or faxes
The grantee agrees and acknowledges that grantee is an independent contractor and shall be entirely
responsible for the liability and payment of grantee's and grantee's employees' taxes of whatever kind,
arising out of the performances in this Grant Agreement. The grantee agrees to comply with all state and
federal laws applicable to any such persons, including laws regarding wages, taxes, insurance, and workers'
compensation. TDEM and/or the State of Texas shall not be liable to the grantee, its employees, agents, or
others for the payment of taxes or the provision of unemployment insurance and/or workers' compensation
or any benefit available to a state employee or employee of TDEM.
1.17 iiequire i late slur aces
The grantee must comply with the applicable State Assurances included within the State Uniform Grant
Management Standards (UGMS), Section III, Subpart B, _.14, which are attached hereto and incorporated
for all purposes as Exhibit A.
1.1.8 System for Award t 4onagement (SAM) Requirements
A. The grantee agrees to comply with applicable requirements regarding registration with the System for
Award Management (SAM) (or with a successor government -wide system officially designated by OMB
and, if applicable, the federal funding agency). These requirements include maintaining current
registrations and the currency of the information in SAM. The grantee will review and update
information at least annually until submission of the final financial report required under the award or
receipt of final payment, whichever is later, as required by 2 CFR Part 25.
The grantee will comply with Executive Orders 12549 and 12689 that requires "a contract award (see
2 CFR 180.220) must not be made to parties listed on the government -wide exclusions in the System
for Award Management (SAM)", in accordance with the OMB guidelines at 2 CFR 180 that implement
Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235),
"Debarment and Suspension." SAM Exclusions contains the names of parties debarred, suspended, or
otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory
authority. The grantee certifies it will verify each vendor's status to ensure the vendor is not debarred,
suspended, otherwise excluded or declared ineligible by checking the SAM before doing/renewing
business with thatvendor.
C. The grantee certifies that it and its principals are eligible to participate in this Grant Agreement and
have not been subjected to suspension, debarment, or similar ineligibility determined by any federal,
state or local governmental entity and the grantee is in compliance with the State of Texas statutes
and rules relating to procurement and that the grantee is not listed in the federal government's
terrorism watch list as described in Executive Order 13224.
L 9 Afo Obl Barg runs by ?? Yerail e!wW:°rnmenl
The Parties acknowledge and agree that the federal government is not a party to this Grant Agreement
and is not subject to any obligations or liabilities to either Party, third party or subcontractor pertaining to
any matter resulting from this Grant Agreement.
Notice may be given to the grantee via GMS, email, hand -delivery, or United States Mail. Notices to the
grantee will be sent to the name and address supplied by grantee in GMS.
1.2.E Force Mrijeure
Neither the grantee norTDEM shall be required to perform any obligation under this Grant Agreement or be
liable or responsible for any loss or damage resulting from its failure to perform so long as performance is
delayed by force majeure or acts of God, including but not limited to strikes, lockouts or labor shortages,
embargo, riot, war, revolution, terrorism, rebellion, insurrection, pandemic, flood, natural disaster, or
interruption of utilities from external causes. Each Party must inform the other in writing, with proof of
receipt, within three (3) business days of the existence of such force majeure, or otherwise waive this right
as a defense.
22 Debt to State
The grantee certifies, to the extent grantee owes any debt (child support or other obligation) or delinquent
taxes to the State of Texas, any payments grantee is owed under this Grant Agreement may be applied by
the Comptroller of Public Accounts toward any such debt or delinquent taxes until such debt or delinquent
taxes are paid in full.
1.2.E Franchise is 7"rix CerQflcation
If grantee is a taxable entity subject to the Texas Franchise Tax (Chapter 171, Texas Tax Code), then grantee
certifies that it is not currently delinquent in the payment of any franchise (margin) taxes or that grantee is
exempt from the payment of franchise (margin) taxes.
1,, 24 , 'e verabifif p
If any provisions of this Grant Agreement are rendered or declared illegal for any reason, or shall be invalid
or unenforceable, such provision shall be modified or deleted in such manner so as to afford the Party for
whose benefit it was intended the fullest benefit commensurate with making this Grant Agreement, as
modified, enforceable, and the remainder of this Grant Agreement and the application of such provision
to other persons or circumstances shall not be affected thereby, but shall be enforced to the greatest extent
permitted by applicable law.
.1.25 E -Verify
By entering into this Grant Agreement, grantee certifies and ensures that it utilizes and will continue to
utilize, for the term of this Grant Agreement, the U.S. Department of Homeland Security's e -Verify system
to determine the eligibility of (a) all persons employed during the contract term to perform duties within
Texas; and (b) all persons (including subcontractors) assigned by the grantee pursuant to the Grant
Agreement.
26 Complimu,e with Federal l.aww, Regulations, and Executive Orders
Grantee acknowledges that federal financial assistance funds will be used to fund the Grant Agreement.
Grantee will comply with all applicable federal law, regulations, executive orders, policies, procedures, and
directives.
.1.2 7 Cleaan it Act
The following is only applicable if the amount of the contract exceeds $150,000.
a. Grantee agrees to comply with all applicable standards, orders or regulations issued pursuant to
the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.
b. Grantee agrees to report each violation to TDEM and understands and agrees that TDEM will, in
turn, report each violation as required to assure notification to the Federal Emergency
Management Agency, and the appropriate Environmental Protection Agency Regional Office.
c. Grantee agrees to include these requirements in each subcontract exceeding $150,000 financed
in whole or in part with federal assistance provided by this Grant Agreement.
1.28 Federal Water Pollution Control ,pct
a. Grantee agrees to comply with all applicable standards, orders, or regulations issued pursuant to
the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.
b. Grantee agrees to report each violation to TDEM and understands and agrees that TDEM will, in
turn, report each violation as required to assure notification to the Federal Emergency
Management Agency, and the appropriate Environmental Protection Agency Regional Office.
c. Grantee agrees to include these requirements in each subcontract exceeding $150,000 financed
in whole or in part with federal assistance provided by this Grant Agreement.
1,29 .Stislaei?sion and Debarrra��ri
a. This Grant Agreement is a covered transaction for purposes of 2 C.F.R. pt 180 and 2 C.F.R. pt.
3000. Grantee certifies that grantee, grantee's principals (defined at 2C.F.R. Sec. 180.995), or its
1222
affiliates (defined at 2 C.F.R. Sec. 180.905) are excluded (defined at 2 C.F.R. Sec. 180.940) or
disqualified (defined at 2 C.F.R. Sec. 180.935).
b. Grantee must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C and must
include a requirement comply with these regulations in any lower tier covered transaction it
enters into.
c. This certification is a material representation of fact relied upon by TDEM. If it is later determined
that grantee did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, in addition to
remedies available to TDEM, the Federal Government may pursue available remedies, including
but limited to suspension and/or debarment.
1.30 E-nergy Conservation
If applicable, grantee agrees to comply with mandatory standards and policies relating to energy efficiency
which are contained in the state energy conservation plan issued in compliance with the Energy Policy and
Conservation Act.
1.3 irwcrcrrre ent of Reco ei^ Pd c-te sats
a. In the performance of this Grant Agreement, grantee shall make maximum use of products
containing recovered materials that are EPA -designated items unless the product cannot be
acquired —
(i) Competitively within a timeframe providing for compliance with the contract
performance schedule;
(ii) Meeting contract performance requirements; or
(iii) At a reasonable price.
b. Information about this requirement, along with the list of EPA -designated items, is available at
EPA's Comprehensive Procurement Guidelines web site,
232 TorminotedContracts
The grantee has not had a contract terminated or been denied the renewal of any contract for
noncompliance with policies or regulations of any state or federally funded program within the past five (5)
years nor is it currently prohibited from contracting with a governmental agency. If the grantee does have
such a terminated contract, the grantee shall identify the contract and provide an explanation for the
termination. The grantee acknowledges that this Grant Agreement may be terminated and payment withheld
or return of grant funds required if this certification is inaccurate or false.
Property and Procurement Requirements
2,1 rop rt"y�Manog'ei`ne?,,' and lrwer,ntury
The grantee must ensure equipment purchased with grant funds is used for the purpose of the grant and
as approved by TDEM. The grantee must develop and implement a control system to prevent loss, damage
or theft of property and investigate and document any loss, damage or theft of property funded under
this Grant.
The grantee must account for any real and personal property acquired with grant funds or received from
13 I 23
the Federal Government in accordance with 2 CFR 200.310 Insurance coverage through 200.316 Property
trust relationship and 200.329 Reporting on real property. This documentation must be maintained by the
grantee, according to the requirements listed herein, and provided to TDEM upon request, if applicable.
When original or replacement equipment acquired under this award by the grantee is no longer needed
for the original project or program or for other activities currently or previously supported by the federal
awarding agency or TDEM, the grantee must make proper disposition of the equipment pursuant to 2 CFR
200.
The grantee will maintain specified equipment management and inventory procedures for equipment
(including replacement equipment), whether acquired in whole or in part with grant funds, until
disposition takes place, with a per-unit cost of $5,000 or greater. The equipment and inventory procedures
include:
A. The grantee must keep an inventory report on file containing equipment purchased with any grant
funds during the grant period. The inventory report must agree with the approved grant budget
and the final Financial Status Report and shall be available to TDEM at all times upon request.
B. The grantee must maintain property/inventory records which, at minimum, include a description
of the property, a serial number or other identification number, the source of property, who holds
title, the acquisition date, the cost of the property, the percentage of Federal participation in the
cost of the property, the location, use and condition of the property, and any ultimate disposition
data including the date of disposal and sale price ofthe property.
C. The grantee shall permanently identify all such equipment by appropriate tags or labels affixed to
the equipment Exceptions to this requirement are limited to items where placing of the marking
is not possible due to the nature of the equipment.
Pre -approval of costs related to consulting contracts is required and the value of consulting contracts
entered into by the grantee may not exceed 5% of the total funds received by the local unit of government.
2_3 Procurement Practices and Policies
The grantee must follow applicable federal and state law, federal procurement standards specified in
regulations governing federal awards to non-federal entities, their established policy, and best practices for
procuring goods or services with grant funds. Procurement activities must follow the most restrictive of
federal, state and local procurement regulations. Contracts must be routinely monitored for delivery of
services or goods.
All contracts made by a grantee under a federal award must contain the provisions outlined in 2 CFR 200
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
Appendix II to Part 200 Contract Provisions for Non -Federal Entity Contracts Under Federal Awards.
Audit and Records IIIC u ire iiirne Pit
i 1 ,+,,,00fl," Pation v4lh Moniti°ti"ff"$g, l^ii;did6ds, and Records i'?}S:"qfdliG.'r9"d "A°ds
All records and expenditures are subject to, and grantee agrees to comply with, monitoring and/or audits
conducted by the United States Department of Treasury's Inspector General (DOTIG), TDEM, and the State
14 i 23
Auditor's Office (SAO) or designee. The grantee shall maintain under GAAP or GASB, adequate records that
enable DOTIG, TDEM, and SAO to ensure proper accounting for all costs and performances related to this
Grant Agreement.
3_2 Sin& Audit Requhements
Any grantee expending $750,000 or more in federal funds in a fiscal year may be subject to Single Audit
Requirements in 2 CFR, Part 200, Subpart F —Audit Requirements, at
...............
I�kE, f l'=��-`t �Y�.2(Ya",l, ��r�, a.�,✓.��`,:.hi.fl�1 �BI�I E,e`.i�ti.
The grantees expending more than $750,000 in state funds in a fiscal year are subject to the requirements
in the Texas Single Audit Circular, at e, The audit
must be completed and the data collection and reporting package described in 2 CFR 200.512 must be
submitted to the Federal Audit Clearinghouse (FAC) within 30 calendar days after receipt of the auditor's
report(s), or nine months after the end of the audit period, whichever is earlier.
33 Requirement to A�Idress Audit Findings
If any audit, monitoring, investigations, review of awards, or other compliance review reveals any
discrepancies, inadequacies, or deficiencies which are necessary to correct in order to maintain
compliance with this Grant Agreement, applicable laws, regulations, or the grantee's obligations
hereunder, the grantee agrees to propose and submit to TDEM a corrective action plan to correct such
discrepancies or inadequacies within thirty (30) calendar days after the grantee's receipt of the findings.
The grantee's corrective action plan is subject to the approval ofTDEM.
The grantee understands and agrees that the grantee must make every effort to address and resolve all
outstanding issues, findings, or actions identified by DOTIG, TDEM, or SAO through the corrective action
plan or any other corrective plan. Failure to promptly and adequately address these findings may result in
grant funds being withheld, other related requirements being imposed, or other sanctions and penalties.
The grantee agrees to complete any corrective action approved by TDEM within the time period specified
by TDEM and to the satisfaction of TDEM, at the sole cost of the grantee. The grantee shall provide to
TDEM periodic status reports regarding the grantee's resolution of any audit, corrective action plan, or
other compliance activity for which the grantee is responsible.
34 Reco?ds lei�fion
A. The grantee shall maintain appropriate audit trails to provide accountability for all expenditures of
grant funds, reporting measures, and funds received from TDEM under this Grant Agreement. Audit
trails maintained bythe grantee will, at a minimum, identify the supporting documentation prepared
by the grantee to permit an audit of its accounting systems and payment verification with respect to
the expenditure of any funds awarded under this Grant Agreement.
B. The grantee must maintain fiscal records and supporting documentation for all expenditures
resulting from this Grant Agreement pursuant to 2 CFR 200.333 and state law.
1. The grantee must retain these records and any supporting documentation for a minimum of
seven (7) years from the later of the completion of this project's public objective, submission of
the final expenditure report, any litigation, dispute, or audit.
2. Records related to real property and equipment acquired with grant funds shall be retained for
seven (7) years after final disposition.
3. TDEM may direct a grantee to retain documents for longer periods of time or to transfer certain
records to TDEM or federal custody when it is determined that the records possess long term
i 5 � 23
retention value.
ProIhibited and l eg laActivities &rid Expenditures
A. Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not
otherwise qualify under the statute. Revenue replacement is not a permissible use of these grant
funds. In accordance with Section 3.1 all record and expenditures are subject to review.
B. Damages covered by insurance.
C. Payroll or benefits expenses for employees whose work duties are not substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
D. Duplication of benefits including expenses that have been or will be reimbursed under any other
federal program.
E. Reimbursement to donors for donated items or services.
F. Workforce bonuses other than hazard pay or overtime.
G. Severance pay.
H. Legal settlements.
Grant funds may not be used in connection with the following acts by agencies or individuals employed by
grant funds:
A. Unless specifically authorized to do so by federal law, grant recipients or their grantees or
contractors are prohibited from using grant funds directly or indirectly for political purposes,
including lobbying or advocating for legislative programs or changes; campaigning for, endorsing,
contributing to, or otherwise supporting political candidates or parties; and voter registration or
get -out -the -vote campaigns. Generally, organizations or entities which receive federal funds by
way of grants, contracts, or cooperative agreements do not lose their rights as organizations to
use their own, private, non-federal resources for "political" activities because of or as a
consequence of receiving such federal funds. These recipient organizations must thus use private
or other non-federal money, receipts, contributions, or dues for their political activities, and may
not charge off to or be reimbursed from federal contracts or grants for the costs of such activities.
B. Grant officials or grant funded employees may not use official authority or influence or permit the
use of a program administered by the grantee agency of which the person is an officer or employee
to interfere with or affect the result of an election or nomination of a candidate or to achieve any
other political purpose.
C. Grant -funded employees may not coerce, attempt to coerce, command, restrict, attempt to
restrict, or prevent the payment, loan, or contribution of anything of value to a person or political
organization for a political purpose.
D. Grant funds may not be used to employ, as a regular full-time or part-time or contract employee,
a person who is required by Chapter 305 of the Government Code to register as a lobbyist.
Furthermore, grant funds may not be used to pay, on behalf of the agency or an officer or
employee of the agency, membership dues to an organization that pays part or all of the salary of
a person who is required by Chapter 305 of the Government Code to register as a lobbyist.
E. As applicable, the grantee and each contracting tier will comply with 31 USC § 1352, which
provides that none of the funds provided under an award may be expended by the grantee to pay
any person to influence, or attempt to influence an officer or employee of any agency, a Member
of Congress, an officer of employee of Congress, or an employee of a Member of Congress in
connection with any Federal action concerning the award or renewal. Grantee shall file the
required certification attached hereto and incorporated for all purposes as Exhibit F. Each
contracting tier shall also disclose any lobbying with non-federal funds that takes place in
connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up
to the recipient.
5 Financial Requirements
A completed direct deposit form from the grantee must be provided to TDEM prior to receiving any
payments. The direct deposit form is currently available at I?r
5.2 Payments and Required Documentatior
Funding forthis Grant Agreement is appropriated under the Coronavirus Aid, Relief, and Economic Security
Act, 2020 (Public Law 116-136) enacted on March 27, 2020, as amended, to facilitate protective measures
for and recovery from the public health emergency in areas affected by COVID-19, which are Presidentially -
declared major disaster areas under Title IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.). All expenditures under this Grant Agreement must be made in
accordance with this Grant Agreement and any other applicable laws, rules or regulations. Further, grantee
acknowledges that all funds are subject to recapture and repayment for non-compliance pursuant to
Section 5.7 below.
Payment of funds on projects may be initiated by the grantee through a Request for Reimbursement
(RFR) in GMS.
Grantee may initiate an Advance of Funds Request (AFR) through GMS for an initial cash advance to cover
actual costs incurred or up to 20% of their total allocation, whichever is larger.
Additional advances or reimbursement requests may be requested following full reporting to TDEM of
expenses incurred and applied against the initial and/or any subsequent advance payments.
If sufficient progress is not made towards expenditure of advanced funds and/or the grantee fails to meet
financial reporting obligations, TDEM may implement sanctions as necessary up to and including grant
termination.
All documentation for expenditures paid during the project period must be submitted to TDEM on or
before the grant liquidation date.
53 Financial Reporling
Financial reports must be submitted to TDEM on a quarterly basis via GMS but can be submitted more
often as necessary to draw down funds.
The final financial report must be submitted to TDEM on or before the grant liquidation date or the grant
funds may lapse and TDEM will provide them as grants to other eligible jurisdictions.
� � 2
5,4 Re in'�bua"see`n ent"°,
TDEM will be obligated to reimburse the grantee for the expenditure of actual and allowable allocable
costs incurred and paid by the grantee pursuant to this Grant Agreement. TDEM is not obligated to pay
unauthorized costs or to reimburse expenses that were incurred by the grantee prior to the
commencement or after the termination of this Grant Agreement.
5, "p &,fun& and Deductions
If TDEM determines that the grantee has been overpaid any grant funds under this Grant Agreement,
including payments made inadvertently or payments made but later determined to not be actual and
allowable allocable costs, the grantee shall return to TDEM the amount identified by TDEM as an
overpayment. The grantee shall refund any overpayment to TDEM within thirty (30) calendar days of the
receipt of the notice of the overpayment from TDEM unless an alternate payment plan is specified by TDEM.
Refunds may be remitted to: Texas Division of Emergency Management, P.O. Box 15467, Austin, Texas
78761.
56 a
t'
.„ .. apture cy Funds
The discretionary right of TDEM to terminate for convenience under Section 1.13 notwithstanding, TDEM
shall have the right to terminate the Grant Agreement and to recapture, and be reimbursed for any
payments made by TDEM: (i) that are not allowed under applicable laws, rules, and regulations; or (ii) that
are otherwise inconsistent with this Grant Agreement, including any unapproved expenditures.
5,7 thluidation Period
Grant funds will liquidate 90 calendar days following the project period end date or on December 30, 2020,
whichever is earlier. Funds not obligated by the end of the grant period and not expended by the
liquidation date will revert to TDEM.
5,8 Pr.o�ect C'los'e Out
TDEM will close-out the grant award when it determines that all applicable administrative actions and all
required work of the grant have been completed by the grantee.
The grantee must submit all financial, performance, and other reports as required by the terms and
conditions of the grant award.
The grantee must promptly refund any balances of unobligated cash that TDEM paid in advance or paid and
that are not authorized to be retained by the grantee for use in other projects.
[EXHIBITS AND SIGNATURE PAGE FOLLOWS]
EXHIBIT A - State of Texas Assurances
As the duly authorized representative of Grantee, I certify that Grantee:
1. Shall comply with Texas Government Code, Chapter 573, by ensuring that no officer, employee, or member of the grantee's governing
body or of the grantee's contractor shall vote or confirm the employment of any person related within the second degree of affinity or the
third degree of consanguinity to any member of the governing body or to any other officer or employee authorized to employ or supervise
such person. This prohibition shall not prohibit the employment of a person who shall have been continuously employed for a period of
two years, or such other period stipulated by local law, prior to the election or appointment of the officer, employee, or governing body
member related to such person in the prohibited degree.
2. Shall insure that all information collected, assembled, or maintained by the grantee relative to a project will be available to the public
during normal business hours in compliance with Texas Government Code, Chapter 552, unless otherwise expressly prohibited by law.
3. Shall comply with Texas Government Code, Chapter 551, which requires all regular, special, or called meetings of governmental bodies
to be open to the public, except as otherwise provided by law or specifically permitted in the Texas Constitution.
4. Shall comply with Section 231.006, Texas Family Code, which prohibits payments to a person who is in arrears on child support payments.
5. Shall not contract with or issue a license, certificate, orpermit to the owner, operator, or administrator of a facility if the grantee is a health,
human services, public safety, or law enforcement agency and the license, permit, or certificate has been revoked by another health and
human services agency or public safety or law enforcement agency.
6. Shall comply with all rules adopted by the Texas Commission on Law Enforcement pursuant to Chapter 1701, Texas Occupations Code,
or shall provide the grantor agency with a certification from the Texas Commission on Law Enforcement that the agency is in the process
of achieving compliance with such rules if the grantee is a law enforcement agency regulated by Texas Occupations Code, Chapter 1701.
7. Shall follow all assurances. When incorporated into a grant award or contract, standard assurances contained in the application package
become terms or conditions for receipt of grant funds. Administering state agencies and grantees shall maintain an appropriate contract
administration system to insure that all terms, conditions, and specifications are met. (See UGMS Section _.36 for additional guidance on
contract provisions).
8. Shall comply with the Texas Family Code, Section 261.101, which requires reporting of all suspected cases of child abuse to local law
enforcement authorities and to the Texas Department of Child Protective and Regulatory Services. Grantee shall also ensure that all
program personnel are properly trained and aware of this requirement.
9. Shall comply with all federal statutes relating to nondiscrimination. These include but are not limited to: (a) Title VI of the Civil Rights
Act of 1964 (P.L. 88-352), which prohibits discrimination on the basis of race, color, or national origin; (b) Title IX of the Education
Amendments of 1972, as amended (20 U.S.C. §§ 1681-1683, and 1685-1686), which prohibits discrimination on the basis of sex; (c) Section
504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. §794), which prohibits discrimination on the basis of handicaps and the
Americans with Disabilities Act of 1990 including Titles I, II, and III of the Americans with Disability Act which prohibits recipients from
discriminating on the basis of disability in the operation of public entities, public and private transportation systems, places of public
accommodation, and certain testing entities, 44 U.S.C. §§ 12101-12213; (d) the Age Discrimination Act of 1974, as amended (42 U.S.C.
§§6101-6107), which prohibits discrimination on the basis of age; (e) the Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as
amended, relating to nondiscrimination on the basis of drug abuse; (f) the Comprehensive Alcohol Abuse and Alcoholism Prevention,
Treatment, and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to the nondiscrimination on the basis of alcohol abuse or
alcoholism; (g) §§523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. §§290dd-3 and 290ee-3), as amended, relating to
confidentiality of alcohol and drug abuse patient records; (h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§3601 et seq.), as
amended, relating to nondiscrimination in the sale, rental, or financing of housing; (i) any other nondiscrimination provisions in the specific
statute(s) under which application for Federal assistance is being made; and 0) the requirements of any other nondiscrimination statute(s)
which may apply to this Grant.
10. Shall comply, as applicable, with the provisions of the Davis -Bacon Act (40 U.S.C. §§276a to 276a-7), the Copeland Act (40 U.S.C.
§276c and 18 U.S.C. §874), and the Contract Work Hours and Safety Standards Act (40 U.S.C. §§327-333), regarding labor standards for
federally assisted construction subagreements.
11. Shall comply with requirements of the provisions of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (P.L.
91-646), which provide for fair and equitable treatment of persons displaced or whose property is acquired as a result of Federal or federally
assisted programs. These requirements apply to all interests in real property acquired for project purposes regardless of Federal participation
in purchases.
12. Shall comply with the provisions of the Hatch Political Activity Act (5 U.S.C. §§7321-29), which limit the political activity of employees
whose principal employment activities are funded in whole or in part with Federal funds.
13. Shall comply with the minimum wage and maximum hours provisions of the Federal Fair Labor Standards Act and the Intergovernmental
Personnel Act of 1970, as applicable.
19 1 23
EXHIBIT A
14. Shall insure that the facilities under its ownership, lease, or supervision which shall be utilized in the accomplishment of the project are
not listed on the Environmental Protection Agency's (EPA) list of Violating Facilities and that it will notify the Federal grantor agency
of the receipt of any communication from the Director of the EPA Office of Federal Activities indicating that a facility to be used in the
project is under consideration for listing by the EPA (EO 11738).
15. Shall comply with the flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973, Public Law
93-234. Section 102(a) requires the purchase of flood insurance in communities where such insurance is available as a condition for the
receipt of any Federal financial assistance for construction or acquisition proposed for use in any area that has been identified by the
Secretary of the Department of Housing and Urban Development as an area having special flood hazards.
16. Shall comply with environmental standards which may be prescribed pursuant to the following: (a) institution of environmental quality
control measures under the National Environmental Policy Act of 1969 (P.L. 91-190) and Executive Order (EO) 11514; (b) notification
of violating facilities pursuant to EO 11738; (c) protection of wetlands pursuant to EO 11990; (d) evaluation of flood hazards in
floodplains in accordance with EO 11988; (e) assurance of project consistency with the approved state management program developed
under the Coastal Zone Management Act of 1972 (16 U.S.C. §§1451 et seq.); (f) conformity of federal actions to State (Clear Air)
hnplementation Plans under Section 176(c) of the Clear Air Act of 1955, as amended (42 U.S.C. §§7401 et seq.); (g) protection of
underground sources of drinking water under the Safe Drinking Water Act of 1974, as amended (P.L. 93-523); and (h) protection of
endangered species under the Endangered Species Act of 1973, as amended (P.L. 93-205).
17. Shall comply with the Wild and Scenic Rivers Act of 1968 (16 U.S.C. §§1271 et seq.) related to protecting components or potential
components of the national wild and scenic rivers system.
18. Shall assist the awarding agency in assuring compliance with Section 106 of the National Historic Preservation Act of 1966, as amended
(16 U.S.C. §470), EO 11593 (identification and protection of historic properties), and the Archaeological and Historic Preservation Act
of 1974 (16 U.S.C. §§469a-1 et seq.).
19. Shall comply with the Laboratory Animal Welfare Act of 1966 (P.L. 89-544, as amended, 7 U.S.C. §§2131 et seq.) which requires the
minimum standards of care and treatment for vertebrate animals bred for commercial sale, used in research, transported commercially, or
exhibited to the public according to the Guide for Care and Use of Laboratory Animals and Public Health Service Policy and Government
Principals Regarding the Care and Use of Animals.
20. Shall comply with the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. §§4801 et seq.) which prohibits the use of lead-based paint
in construction or rehabilitation of residential structures.
21. Shall comply with the Pro -Children Act of 1994 (Public Law 103-277), which prohibits smoking within any portion of any indoor facility
used for the provision of services for children.
22. Shall comply with all federal tax laws and are solely responsible for filing all required state and federal tax forms.
23. Shall comply with all applicable requirements of all other federal and state laws, executive orders, regulations, and policies governing
this program.
24. And its principals are eligible to participate and have not been subjected to suspension, debarment, or similar ineligibility determined by
any federal, state, or local governmental entity and it is not listed on a state or federal government's terrorism watch list as described in
Executive Order 13224. Entities ineligible for federal procurement have Exclusions listed at https://www.sam.gov/portal/public/SAM/.
25. Shall adopt and implement applicable provisions of the model HN/AIDS work place guidelines of the Texas Department of Health as
required by the Texas Health and Safety Code, Ann., Sec. 85.001, et seq.
26. Shall comply with the Drug -Free Workplace Rules established by the Texas Worker's Compensation Commission effective April 17,
1991.
',I
EXHIBIT A
EXHIBIT B — CARES ACT CORONAVIRUS RELIEF FUND ELIGIBILITY CERTIFICATION
I, , am the County Judge, Mayor or City Manager of
("County"/"Municipality"), and I certify that:
1. 1 have the authority on behalf.of County/Municipality to request grant payments from the State of
Texas ("State") for federal funds appropriated pursuant to section 601 of the Social Security Act, as
added by section 5001 of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136,
div. A, Title V (Mar. 27, 2020).
2. 1 understand that the State will rely on this certification as a material representation in making grant
payments to the County/Municipality.
3. 1 acknowledge that County should keep records sufficient to demonstrate that the expenditure of
funds it has received is in accordance with section 601(d) of the Social Security Act.
4. 1 acknowledge that all records and expenditures are subject to audit by the United States Department
of Treasury's Inspector General, the Texas Division of Emergency Management, and the Texas State
Auditor's Office, or designee.
S. I acknowledge that County has an affirmative obligation to identify and report any duplication of
benefits. I understand that the State has an obligation and the authority to deobligate or offset any
duplicated benefits.
6. 1 acknowledge and agree that County/Municipality shall be liable for any costs disallowed pursuant to
financial or compliance audits of funds received.
7. 1 acknowledge that if County has not used funds it has received to cover costs that were incurred by
December 30, 2020, as required by the statute, those funds must be returned to the United States
Department of the Treasury.
8. 1 acknowledge that the County/Municipality's proposed uses of the funds provided as grant payments
from the State by federal appropriation under section 601 of the Social Security Act will be used only
to cover those costs that:
a. are necessary expenditures incurred due to the public health emergency and
governor's disaster declaration on March 13, 2020 with respect to the Coronavirus
Disease 2019 (COVID-19);
b. were not accounted for in the budget most recently approved as of March 27, 2020,
for County/Municipality; and
c. were incurred during the period that begins on March 1, 2020 and ends on December
30, 2020.
in addition to each of the statements above, I acknowledge on submission of this certification that my jurisdiction
has incurred eligible expenses between March 1, 2020 and the date noted below.
By:
Signature:
Title:
Date:
WN:II11127
21 1 23
EXHIBIT C - CERTIFICATION REGARDING LOBBYING
Certification for Contracts, Grants, Loans, and Cooperative Agreements
The undersigned grantee, ...„mmµ mww� certifies, to the best of his or her knowledge that:
1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to
any person for influencing or attempting to influence an officer or employee of an agency, a Member
of Congress, an officer or employee of Congress, or an employee of a Member of Congress in
connection with the awarding of any Federal contract, the making of any Federal grant, the making of
any Federal loan, the entering into of any cooperative agreement, and the extension, continuation,
renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for
influencing or attempting to influence any officer or employee of any agency, a Member of Congress,
an officer or employee of Congress, or an employee of a Member of Congress in connection with this
Federal contract, grant, loan or cooperative agreement, the undersigned shall complete and submit
Standard Form — LLL, "Disclosure Form to Report Lobbying,” in accordance with its instructions.
3. The undersigned shall require that the language of this certification be included in the award
documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants,
loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction was
made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction
imposed by 31 U.S.C. Sec. 1352 (as amended by the Lobbying Disclosure Act of 119). Any person who fails to file
the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
The grantee, . ......... ...... ......................._._„ certifies or affirms the truthfulness and accuracy of each statement of its
certification and disclosure, if any. In addition, grantee understands and agrees that the provisions of 31 U.S.C.
Sec. 3801 etseq. apply to his certification and disclosure, if any.
By:
Signature:
Title:
Date:
EXHIBIT C
I° 3
Please initial by each Exhibit, acknowledging you have received them, understand them, and agree to abide by
them.
State of Texas Assurances, hereinafter referred to as "Exhibit A"
CARES Act Coronavirus Relief Fund Eligibility Certification, hereinafter referred to as "Exhibit B"
Certification Regarding Lobbying, hereinafter referred to as "Exhibit C'
Please sign below to acknowledged acceptance of the grant and all exhibits in this Grant Agreement, and to
abide by all terms and conditions.
By: m....._.
Signature:
Title:
Date:
SIGNATURE PAGE
30
Coronavirus Relief Fund
Frequently Asked Questions
Updated as of May 4, 2020
The following answers to frequently asked questions supplement Treasury's Coronavirus Relief Fund
("Fund") Guidance for State, Territorial, Local, and Tribal Governments, dated April 22, 2020,
("Guidance").' Amounts paid from the Fund are subject to the restrictions outlined in the Guidance and
set forth in section 601(d) of the Social Security Act, as added by section 5001 of the Coronavirus Aid,
Relief, and Economic Security Act ("CARES Act").
Eligible Expenditures
Are governments required to submit proposed expenditures to Treasury for approval?
No. Governments are responsible for making determinations as to what expenditures are necessary due to
the public health emergency with respect to COVID-19 and do not need to submit any proposed
expenditures to Treasury.
The Guidance says that funding can be used to meet payroll expenses for public safety, public health,
health care, human services, and similar employees whose services are substantially dedicated to
mitigating or responding to the COVID-19 public health emergency. How does a government
determine whether payroll expenses for a given employee satisfy the "substantially dedicated"
condition?
The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by
the COVID-19 public health emergency. For this reason, and as a matter of administrative convenience
in light of the emergency nature of this program, a State, territorial, local, or Tribal government may
presume that payroll costs for public health and public safety employees are payments for services
substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the
chief executive (or equivalent) of the relevant government determines that specific circumstances indicate
otherwise.
The Guidance says that a cost was not accounted for in the most recently approved budget if the cost is
for a substantially different use from any expected use of funds in such a line item, allotment, or
allocation. What would qualify as a "substantially different use"for purposes of the Fund eligibility?
Costs incurred for a "substantially different use" include, but are not necessarily limited to, costs of
personnel and services that were budgeted for in the most recently approved budget but which, due
entirely to the COVID-19 public health emergency, have been diverted to substantially different
functions. This would include, for example, the costs of redeploying corrections facility staff to enable
compliance with COVID-19 public health precautions through work such as enhanced sanitation or
enforcing social distancing measures; the costs of redeploying police to support management and
enforcement of stay-at-home orders; or the costs of diverting educational support staff or faculty to
develop online learning capabilities, such as through providing information technology support that is not
part of the staff or faculty's ordinary responsibilities.
Note that a public function does not become a "substantially different use" merely because it is provided
from a different location or through a different manner. For example, although developing online
1 li_i✓[�mmJ,(�
The Guidance is available at
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instruction capabilities may be a substantially different use of funds, online instruction itself is not a
substantially different use of public funds than classroom instruction.
May a State receiving a payment transfer funds to a local government?
Yes, provided that the transfer qualifies as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 601(d) of the Social Security Act. Such funds would be
subject to recoupment by the Treasury Department if they have not been used in a manner consistent with
section 601(d) of the Social Security Act.
May a unit of local government receiving a Fund payment transfer funds to another unit of
government?
Yes. For example, a county may transfer funds to a city, town, or school district within the county and a
county or city may transfer funds to its State, provided that the transfer qualifies as a necessary
expenditure incurred due to the public health emergency and meets the other criteria of section 601(d) of
the Social Security Act outlined in the Guidance. For example, a transfer from a county to a constituent
city would not be permissible if the funds were intended to be used simply to fill shortfalls in government
revenue to cover expenditures that would not otherwise qualify as an eligible expenditure.
Is a Fund payment recipient required to transfer funds to a smaller, constituent unit of government
within its borders?
No. For example, a county recipient is not required to transfer funds to smaller cities within the county's
borders.
Are recipients required to use other federal funds or seek reimbursement under other federal programs
before using Fund payments to satisfy eligible expenses?
No. Recipients may use Fund payments for any expenses eligible under section 601(d) of the Social
Security Act outlined in the Guidance. Fund payments are not required to be used as the source of
funding of last resort. However, as noted below, recipients may not use payments from the Fund to cover
expenditures for which they will receive reimbursement.
Are there prohibitions on combining a transaction supported with Fund payments with other CARES
Act funding or COTVID-19 relief Federal funding?
Recipients will need to consider the applicable restrictions and limitations of such other sources of
funding. In addition, expenses that have been or will be reimbursed under any federal program, such as
the reimbursement by the federal government pursuant to the CARES Act of contributions by States to
State unemployment funds, are not eligible uses of Fund payments.
Are States permitted to use Fund payments to support state unemployment insurance funds generally?
To the extent that the costs incurred by a state unemployment insurance fund are incurred due to the
COVID-19 public health emergency, a State may use Fund payments to make payments to its respective
state unemployment insurance fund, separate and apart from such State's obligation to the unemployment
insurance fund as an employer. This will permit States to use Fund payments to prevent expenses related
to the public health emergency from causing their state unemployment insurance funds to become
insolvent.
2
Are recipients permitted to use Fund payments to pay for unemployment insurance costs incurred by
the recipient as an employer?
Yes, Fund payments may be used for unemployment insurance costs incurred by the recipient as an
employer (for example, as a reimbursing employer) related to the COVID-19 public health emergency if
such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
The Guidance states that the Fund may support a "broad range of uses" including payroll expenses for
several classes of employees whose services are "substantially dedicated to mitigating or responding to
the COVID-19 public health emergency. " What are some examples of types of covered employees?
The Guidance provides examples of broad classes of employees whose payroll expenses would be eligible
expenses under the Fund. These classes of employees include public safety, public health, health care,
human services, and similar employees whose services are substantially dedicated to mitigating or
responding to the COVID-19 public health emergency. Payroll and benefit costs associated with public
employees who could have been furloughed or otherwise laid off but who were instead repurposed to
perform previously unbudgeted functions substantially dedicated to mitigating or responding to the
COVID-19 public health emergency are also covered. Other eligible expenditures include payroll and
benefit costs of educational support staff or faculty responsible for developing online learning capabilities
necessary to continue educational instruction in response to COVID-19-related school closures. Please
see the Guidance for a discussion of what is meant by an expense that was not accounted for in the budget
most recently approved as of March 27, 2020.
In some cases, first responders and critical health care workers that contract COVID-19 are eligible
for workers' compensation coverage. Is the cost of this expanded workers compensation coverage
eligible?
Increased workers compensation cost to the government due to the COVID-19 public health emergency
incurred during the period beginning March 1, 2020, and ending December 30, 2020, is an eligible
expense.
If a recipient would have decommissioned equipment or not renewed a lease on particular office space
or equipment but decides to continue to use the equipment or to renew the lease in order to respond to
the public health emergency, are the costs associated with continuing to operate the equipment or the
ongoing lease payments eligible expenses?
Yes. To the extent the expenses were previously unbudgeted and are otherwise consistent with section
601(d) of the Social Security Act outlined in the Guidance, such expenses would be eligible.
May recipients provide stipends to employees for eligible expenses (for example, a stipend to employees
to improve telework capabilities) rather than require employees to incur the eligible cost and submit for
reimbursement?
Expenditures paid for with payments from the Fund must be limited to those that are necessary due to the
public health emergency. As such, unless the government were to determine that providing assistance in
the form of a stipend is an administrative necessity, the government should provide such assistance on a
reimbursement basis to ensure as much as possible that funds are used to cover only eligible expenses.
May Fund payments be used for COVID-19 public health emergency recovery planning?
Yes. Expenses associated with conducting a recovery planning project or operating a recovery
coordination office would be eligible, if the expenses otherwise meet the criteria set forth in section
601(d) of the Social Security Act outlined in the Guidance.
Are expenses associated with contact tracing eligible?
Yes, expenses associated with contract tracing are eligible.
To what extent may a government use Fund payments to support the operations of private hospitals?
Governments may use Fund payments to support public or private hospitals to the extent that the costs are
necessary expenditures incurred due to the COVID-19 public health emergency, but the form such
assistance would take may differ. In particular, financial assistance to private hospitals could take the
form of a grant or a short-term loan.
May payments from the Fund be used to assist individuals with enrolling in a government benefit
program for those who have been laid off due to COVID-19 and thereby lost health insurance?
Yes. To the extent that the relevant government official determines that these expenses are necessary and
they meet the other requirements set forth in section 601(d) of the Social Security Act outlined in the
Guidance, these expenses are eligible.
May recipients use Fund payments to facilitate livestock depopulation incurred by producers due to
supply chain disruptions?
Yes, to the extent these efforts are deemed necessary for public health reasons or as a form of economic
support as a result of the COVID-19 health emergency.
Would providing a consumer grant program to prevent eviction and assist in preventing homelessness
be considered an eligible expense?
Yes, assuming that the recipient considers the grants to be a necessary expense incurred due to the
COVID-19 public health emergency and the grants meet the other requirements for the use of Fund
payments under section 601(d) of the Social Security Act outlined in the Guidance. As a general matter,
providing assistance to recipients to enable them to meet property tax requirements would not be an
eligible use of funds, but exceptions may be made in the case of assistance designed to prevent
foreclosures.
May recipients create a `payroll support program "for public employees?
Use of payments from the Fund to cover payroll or benefits expenses of public employees are limited to
those employees whose work duties are substantially dedicated to mitigating or responding to the
COVID-19 public health emergency.
May recipients use Fund payments to cover employment and training programs for employees that
have been furloughed due to the public health emergency?
Yes, this would be an eligible expense if the government determined that the costs of such employment
and training programs would be necessary due to the public health emergency.
4
May recipients use Fund payments to provide emergency financial assistance to individuals and
families directly impacted by a loss of income due to the COVID-19 public health emergency?
Yes, if a government determines such assistance to be a necessary expenditure. Such assistance could
include, for example, a program to assist individuals with payment of overdue rent or mortgage payments
to avoid eviction or foreclosure or unforeseen financial costs for funerals and other emergency individual
needs. Such assistance should be structured in a manner to ensure as much as possible, within the realm
of what is administratively feasible, that such assistance is necessary.
The Guidance provides that eligible expenditures may include expenditures related to the provision of
grants to small businesses to reimburse the costs of business interruption caused by required closures.
What is meant by a "small business, " and is the Guidance intended to refer only to expenditures to
cover administrative expenses of such a grant program?
Governments have discretion to determine what payments are necessary. A program that is aimed at
assisting small businesses with the costs of business interruption caused by required closures should be
tailored to assist those businesses in need of such assistance. The amount of a grant to a small business to
reimburse the costs of business interruption caused by required closures would also be an eligible
expenditure under section 601(d) of the Social Security Act, as outlined in the Guidance.
The Guidance provides that expenses associated with the provision of economic support in connection
with the public health emergency, such as expenditures related to the provision ofgrants to small
businesses to reimburse the costs of business interruption caused by required closures, would
constitute eligible expenditures of Fund payments. Would such expenditures be eligible in the absence
of a stay-at-home order?
Fund payments may be used for economic support in the absence of a stay-at-home order if such
expenditures are determined by the government to be necessary. This may include, for example, a grant
program to benefit small businesses that close voluntarily to promote social distancing measures or that
are affected by decreased customer demand as a result of the COVID-19 public health emergency.
May Fund payments be used to assist impacted property owners with the payment of their property
taxes?
Fund payments may not be used for government revenue replacement, including the provision of
assistance to meet tax obligations.
May Fund payments be used to replace foregone utilityfees? If not, can Fund payments be used as a
direct subsidy payment to all utility account holders?
Fund payments may not be used for government revenue replacement, including the replacement of
unpaid utility fees. Fund payments may be used for subsidy payments to electricity account holders to the
extent that the subsidy payments are deemed by the recipient to be necessary expenditures incurred due to
the COVID-19 public health emergency and meet the other criteria of section 601(d) of the Social
Security Act outlined in the Guidance. For example, if determined to be a necessary expenditure, a
government could provide grants to individuals facing economic hardship to allow them to pay their
utility fees and thereby continue to receive essential services.
Could Fund payments be used for capital improvement projects that broadly provide potential
economic development in a community?
In general, no. If capital improvement projects are not necessary expenditures incurred due to the
COVID-19 public health emergency, then Fund payments may not be used for such projects.
However, Fund payments may be used for the expenses of, for example, establishing temporary public
medical facilities and other measures to increase COVID-19 treatment capacity or improve mitigation
measures, including related construction costs.
The Guidance includes workforce bonuses as an example of ineligible expenses but provides that
hazard pay would be eligible if otherwise determined to be a necessary expense. Is there a specific
definition of "hazard pay"?
Hazard pay means additional pay for performing hazardous duty or work involving physical hardship, in
each case that is related to COVID-19.
The Guidance provides that ineligible expenditures include "[p]ayroll or benefits expenses for
employees whose work duties are not substantially dedicated to mitigating or responding to the
C011ID-19 public health emergency. " Is this intended to relate only to public employees?
Yes. This particular nonexclusive example of an ineligible expenditure relates to public employees. A
recipient would not be permitted to pay for payroll or benefit expenses of private employees and any
financial assistance (such as grants or short-term loans) to private employers are not subject to the
restriction that the private employers' employees must be substantially dedicated to mitigating or
responding to the COVID-19 public health emergency.
May counties pre pay with CARES Act funds for expenses such as a one or two year facility lease,
such as to house staff hired in response to COVID-19?
A government should not make prepayments on contracts using payments from the Fund to the extent that
doing so would not be consistent with its ordinary course policies and procedures.
Questions Related to Administration of Fund Payments
Do governments have to return unspent funds to Treasury?
Yes. Section 601(f)(2) of the Social Security Act, as added by section 5001(a) of the CARES Act,
provides for recoupment by the Department of the Treasury of amounts received from the Fund that have
not been used in a manner consistent with section 601(d) of the Social Security Act. If a government has
not used funds it has received to cover costs that were incurred by December 30, 2020, as required by the
statute, those funds must be returned to the Department of the Treasury.
What records must be kept by governments receiving payment?
A government should keep records sufficient to demonstrate that the amount of Fund payments to the
government has been used in accordance with section 601(d) of the Social Security Act
May recipients deposit Fund payments into interest bearing accounts?
Yes, provided that if recipients separately invest amounts received from the Fund, they must use the
interest earned or other proceeds of these investments only to cover expenditures incurred in accordance
with section 601(d) of the Social Security Act and the Guidance on eligible expenses. If a government
deposits Fund payments in a government's general account, it may use those funds to meet immediate
cash management needs provided that the full amount of the payment is used to cover necessary
expenditures. Fund payments are not subject to the Cash Management Improvement Act of 1990, as
amended.
May governments retain assets purchased with payments from the Fund?
Yes, if the purchase of the asset was consistent with the limitations on the eligible use of funds provided
by section 601(d) of the Social Security Act.
What rules apply to the proceeds of disposition or sale of assets acquired using payments from the
Fund?
If such assets are disposed of prior to December 30, 2020, the proceeds would be subject to the
restrictions on the eligible use of payments from the Fund provided by section 601(d) of the Social
Security Act.
7
Coronavirus Relief Fund
Guidance for State, Territorial, Local, and Tribal Governments
April 22, 2020
The purpose of this document is to provide guidance to recipients of the funding available under section
601(a) of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief, and Economic
Security Act ("CARES Act'). The CARES Act established the Coronavirus Relief Fund (the "Fund")
and appropriated $150 billion to the Fund. Under the CARES Act, the Fund is to be used to make
payments for specified uses to States and certain local governments; the District of Columbia and U.S.
Territories (consisting of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and the Commonwealth of the Northern Mariana Islands); and Tribal governments.
The CARES Act provides that payments from the Fund may only be used to cover costs that -
1. are necessary expenditures incurred due to the public health emergency with respect to
the Coronavirus Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the
date of enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020, and ends on December 30,
2020.1
The guidance that follows sets forth the Department of the Treasury's interpretation of these limitations
on the permissible use of Fund payments.
Necessary expenditures incurred due to the public health emergency
The requirement that expenditures be incurred "due to" the public health emergency means that
expenditures must be used for actions taken to respond to the public health emergency. These may
include expenditures incurred to allow the State, territorial, local, or Tribal government to respond
directly to the emergency, such as by addressing medical or public health needs, as well as expenditures
incurred to respond to second -order effects of the emergency, such as by providing economic support to
those suffering from employment or business interruptions due to COVID-19-related business closures.
Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not
otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is
not a permissible use of Fund payments.
The statute also specifies that expenditures using Fund.payments must be "necessary." The Department
of the Treasury understands this term broadly to mean that the expenditure is reasonably necessary for its
intended use in the reasonable judgment of the government officials responsible for spending Fund
payments.
Costs not accounted for in the budget most recently approved as of March 27, 2020
The CARES Act also requires that payments be used only to cover costs that were not accounted for in
the budget most recently approved as of March 27, 2020. A cost meets this requirement if either (a) the
cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost
1 See Section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act.
is for a substantially different use from any expected use of funds in such a line item, allotment, or
allocation.
The "most recently approved" budget refers to the enacted budget for the relevant fiscal period for the
particular government, without taking into account subsequent supplemental appropriations enacted or
other budgetary adjustments made by that government in response to the COVID-19 public health
emergency. A cost is not considered to have been accounted for in a budget merely because it could be
met using a budgetary stabilization fund, rainy day fund, or similar reserve account.
Costs incurred during the period that begins on March 1, 2020, and ends on December 30, 2020
A cost is "incurred" when the responsible unit of government has expended funds to cover the cost.
Nonexclusive examples of eligible expenditures
Eligible expenditures include, but are not limited to, payment for:
1. Medical expenses such as:
• COVID-19-related expenses of public hospitals, clinics, and similar facilities.
• Expenses of establishing temporary public medical facilities and other measures to increase
COVID-19 treatment capacity, including related construction costs.
• Costs of providing COVID-19 testing, including serological testing.
• Emergency medical response expenses, including emergency medical transportation, related
to COVID-19.
• Expenses for establishing and operating public telemedicine capabilities for COVID-19-
related treatment.
2. Public health expenses such as:
• Expenses for communication and enforcement by State, territorial, local, and Tribal
governments of public health orders related to COVID-19.
• Expenses for acquisition and distribution of medical and protective supplies, including
sanitizing products and personal protective equipment, for medical personnel, police officers,
social workers, child protection services, and child welfare officers, direct service providers
for older adults and individuals with disabilities in community settings, and other public
health or safety workers in connection with the COVID-19 public health emergency.
• Expenses for disinfection of public areas and other facilities, e.g., nursing homes, in response
to the COVID-19 public health emergency.
• Expenses for technical assistance to local authorities or other entities on mitigation of
COVID-19-related threats to public health and safety.
• Expenses for public safety measures undertaken in response to COVID-19.
• Expenses for quarantining individuals.
3. Payroll expenses for public safety, public health, health care, human services, and similar
employees whose services are substantially dedicated to mitigating or responding to the COVID-
19 public health emergency.
2
4. Expenses of actions to facilitate compliance with COVID-19-related public health measures, such
as:
• Expenses for food delivery to residents, including, for example, senior citizens and other
vulnerable populations, to enable compliance with COVID-19 public health precautions.
• Expenses to facilitate distance learning, including technological improvements, in connection
with school closings to enable compliance with COVID-19 precautions.
• Expenses to improve telework capabilities for public employees to enable compliance with
COVID-19 public health precautions.
• Expenses of providing paid sick and paid family and medical leave to public employees to
enable compliance with COVID-19 public health precautions.
• COVID-19-related expenses of maintaining state prisons and county jails, including as relates
to sanitation and improvement of social distancing measures, to enable compliance with
COVID-19 public health precautions.
• Expenses for care for homeless populations provided to mitigate COVID-19 effects and
enable compliance with COVID-19 public health precautions.
5. Expenses associated with the provision of economic support in connection with the COVID-19
public health emergency, such as:
• Expenditures related to the provision of grants to small businesses to reimburse the costs of
business interruption caused by required closures.
• Expenditures related to a State, territorial, local, or Tribal government payroll support
program.
• Unemployment insurance costs related to the COVID-19 public health emergency if such
costs will not be reimbursed by the federal government pursuant to the CARES Act or
otherwise.
6. Any other COVID-19-related expenses reasonably necessary to the function of government that
satisfy the Fund's eligibility criteria.
Nonexclusive examples of ineligible expendituresz
The following is a list of examples of costs that would not be eligible expenditures of payments from the
Fund.
1. Expenses for the State share of Medicaid.3
2. Damages covered by insurance.
3. Payroll or benefits expenses for employees whose work duties are not substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
2 In addition, pursuant to section 5001(b) of the CARES Act, payments from the Fund may not be expended for an
elective abortion or on research in which a human embryo is destroyed, discarded, or knowingly subjected to risk of
injury or death. The prohibition on payment for abortions does not apply to an abortion if the pregnancy is the result
of an act of rape or incest; or in the case where a woman suffers from a physical disorder, physical injury, or
physical illness, including a life -endangering physical condition caused by or arising from the pregnancy itself, that
would, as certified by a physician, place the woman in danger of death unless an abortion is performed.
Furthermore, no government which receives payments from the Fund may discriminate against a health care entity
on the basis that the entity does not provide, pay for, provide coverage of, or refer for abortions.
'See 42 C.F.R. § 433.51 and 45 C.F.R. § 75.306.
4. Expenses that have been or will be reimbursed under any federal program, such as the
reimbursement by the federal government pursuant to the CARES Act of contributions by States
to State unemployment funds.
5. Reimbursement to donors for donated items or services.
6. Workforce bonuses other than hazard pay or overtime.
7. Severance pay.
8. Legal settlements.