COVID-19 Stimulus Funding for Transportation in the CARES Act and Other Supplemental Bills
Three appropriations bills have been passed by Congress to provide emergency funding due to the coronavirus 2019 (COVID-19):
*The second stimulus bill, the Consolidated Appropriations Act, 2021, was an omnibus bill encompassing $2.3 trillion in spending. The Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act 2021 was a part of that omnibus bill and provided $900.0 billion in COVID-19 relief spending, of which $45.0 billion went to transportation.
As part of the omnibus bill, the $1.4 trillion in other appropriations included transportation funding as well. But, because it is not dedicated as COVID-19 emergency relief, it is not covered in this report. This is the only bill of the three that is omnibus, the CARES Act and the ARP Act are exclusive COVID-19 stimulus bills.
The Coronavirus Aid, Relief and Economic Security (CARES) Act
The CARES Act was signed into law March 27, 2020. It encompassed $2.0 trillion in economic relief and stimulus including direct payments to citizens, unemployment insurance, small business loans, funding for healthcare systems, state and local government funds, and relief for the transportation systems.
Transportation modes received approximately $114.8 billion in relief:
- Air transportation received the largest amount of funds at approximately $88.3 billion in loans, loan guarantees, and grants to airports and air carriers;
- Transit agencies received $25.0 billion;
- Rail received $1.5 billion for employee assistance programs and grants to the National Railroad Passenger Corporation (also known as Amtrak);
- Approximately $4.1 million went to maritime transportation;
- $1.8 million went to the Office of the Secretary of Transportation; and
- The Federal Motor Carrier Administration received $150,000.
The full text of the CARES Act can be found on the Congressional website.
Additional Provisions in the CARES Act
The CARES Act also included a suspension of excise taxes on kerosene from March 1, 2020 to January 1, 2021 for commercial aviation.
Air carriers or contractors accept this CARES Act funding under the condition that they will refrain from involuntary furloughs or reducing pay rates and benefits until September 30, 2020. Air carriers or contractors also agree they will not pay dividends or make other capital distributions with respect to the common stock of the air carrier or contractor through September 30, 2021.
In accepting the grant money, airports agree to continue to employ at least 90% of the number of individuals employed by the airport as of the March 27, 2020 through December 31, 2020. These workforce retention requirements may be waived by the Secretary of Transportation if they are seen to produce undue economic hardship. These workforce retention requirements do not apply to non-hub airports or nonprimary airports. Non-hub or nonprimary airports are airports who have scheduled passenger service and between 2,500 and 10,000 annual enplanements.
The rail grants that were delegated to the National Railroad Passenger Corporation (Amtrak) stipulate that the National Railroad Passenger Corporation must notify the House and Senate Committees if they conduct any employee furloughs as a result of efforts to prevent, prepare for, and respond to COVID-19. If the National Railroad Passenger Corporation performs furloughs, they must provide the employees an opportunity to be recalled when the passenger rail service is restored to March 1, 2020 levels.
'Other' refers to grants to the Office of the Secretary of Transportation for salaries and expenses to prevent, prepare for, and respond to COVID-19. In addition to these funds, the Office of the Secretary of Transportation received further funds to help cover administrative expenses for financial assistance to air carriers as well as funding for essential air services and rural improvements which this report categorized as funding for the air mode.
These amounts do not include the small business loans provided to private transportation companies through the Paycheck Protection Program (PPP). For more information on PPP loans, visit the Treasury's PPP page or to take a deeper look at the data visit the Treasury's loan level data page.
Consolidated Appropriations Act, 2021
The Consolidated Appropriations Act, 2021, was signed into law on December 27, 2020. The Consolidated Appropriations Act, 2021 was an omnibus spending bill, meaning it included appropriations and amendments on a wide variety of topics, in addition to COVID-19 relief spending.
This report focuses solely on the COVID-19 relief spending within the larger bill. The Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act 2021 is found in Division M of the bill as well as Division N. The Consolidated Appropriations Act, 2021 was a $2.3 trillion spending bill combining approximately $900.0 billion in COVID-19 stimulus relief from the CRRSA Act and $1.4 trillion in other appropriations.
Transportation modes received approximately $45.0 billion in the CRRSA Act:
- Air received $18.0 billion in grants to airports, air carriers, and contractors;
- Transit received the next largest portion at $14.0 billion;
- Highway grants totaled $10.0 billion;
- Rail received $1.0 billion in grants to the National Railroad Passenger Corporation; and
- $2.0 billion went to other transportation services.
Full text of the Consolidated Appropriations Act can be found on the Congressional website.
Additional Provisions in the CRRSA Act
All airports receiving these funds must continue to employ at least 90% of the number they employed as of March 27, 2020, through February 15, 2021. This may be waived if the Secretary of Transportation believes this is causing undue economic hardship to the airports.
Air Carriers and contractors receiving this money agree they will refrain from conducting involuntary furloughs or reducing pay rate and benefits until March 31, 2021, if they are an air carrier, and if they are a contractor, until March 31, 2021, or the date that the contractor expends the financial assistance - whichever is later.
Additionally, if air carriers or contractors received CARES Act funding and performed any layoffs or furloughs between October 1, 2020 and the date they received these supplemental funds, they must recall those employees involuntarily furloughed and must compensate returning employees for lost pay and benefits between December 1, 2020 and the date they receive the supplemental funds.
If passenger air carriers or contractors did not receive financial assistance from the CARES Act, they must recall employees who were involuntarily furloughed between March 27, 2020 and the date they receive the supplemental funds, and compensate returning employees for lost pay and benefits from December 1, 2020 to the date they receive the supplemental funds.
Air
carriers and contractors also agree not to purchase any equity security of the
passenger air carrier or contractor or parent company or pay dividends or make
other capital distributions; air carriers agree not to make these purchases
through March 31, 2022 and contractors agree not to make these purchases through March 31, 2022 or the date on which the contract is up, whichever is later.
The rail grants to the National Railroad Passenger Corporation should be used to prevent further employee furloughs and to prevent further reductions to the frequency of rail service and on any long-distance route. If the National Railroad Passenger Corporation does conduct employee furloughs, they must provide employees with the opportunity to be recalled to work based on seniority and classification of work, regardless of their service time, as intercity passenger rail service is restored. The National Railroad Passenger Corporation is prohibited from contracting out any scope-covered work conducted by an employee who was furloughed through reductions in the workforce unless contracting was in place prior to March 1, 2020.
The transit infrastructure grants specify that to the maximum extent possible, these funds should be directed to payroll and operations of public transit, including payroll and expenses of private providers of public transportation, unless the recipient certifies that they have not furloughed any employees.
Highway grants refer to grants to states, territories, Puerto Rico, or Indian Tribes to prevent, prepare for, and respond to COVID-19. These grants flow through and are administered by the Federal Highway Administration.
The 'other' section refers to grants to providers of transportation services. Providers of transportation services are defined as having significant operations and a majority of employees in the U.S., was in operation on March 1, 2020, and operates a vessel of the United States (including a passenger vessel, small passenger vessel, or pilotage services vessel), a company providing transportation services using a bus (including local and intercity fixed-route service, commuter service, and charter or tour services), a company providing transportation services using a school bus, or other passenger transportation services company.
The providers of transportation services must certify that they have experienced a revenue loss of 25% or more on an annual basis as a direct or indirect result of COVID-19. Providers would have had 500 or fewer full-time, part-time or temporary employees on March 1, 2020 and have not received assistance from previous sections of the CARES act.
In accepting these funds, providers agree to maintain expenditures on payroll costs for all employees and they may not impose any involuntary furlough or any reduction in pay rates or benefits for any nonexecutive employees from the date of this act through March 31, 2021. They must also recall or rehire any employees laid off, furloughed, or terminated after March 27, 2020.
American Rescue Plan Act of 2021
The American Rescue Plan (ARP) Act of 2021 was signed into law March 11, 2021. It encompassed $1.9 trillion in economic relief and stimulus including direct payments to citizens, unemployment insurance, small business loans, funding for healthcare systems, state and local government funds, and relief for the transportation systems.
Transportation received approximately $58.4 billion in economic relief from COVID-19:
- Transit received the most funding in this bill with $30.5 billion in grants to transit agencies;
- Air transportation received $26.0 billion in grants to airports, air carriers, and aviation manufacturers; and
- Rail received approximately $1.9 billion in grants to the National Railroad Passenger Corporation and help to rail workers.
The full ARP Act text can be found on the Congressional website.
Additional Provisions in the ARP Act
The relief for airports funds must be used for purposes directly related to the airport and may not be provided to any airport that was allocated more than 4 years of operating funds to prevent, prepare for, and respond to COVID-19 in FY 2020. As a condition of receiving the funds, an airport must continue to employ, through September 30, 2021, at least 90% of the number of individuals employed by the airport as of March 27, 2020 (after adjusting for retirements or voluntary employee separations).
In accepting the grant money, air carriers agree to refrain from involuntary furloughs or reducing pay rates and benefits until September 30, 2021 or the date which assistance is exhausted, whichever is later. They must also refrain from purchasing equity security of the air carrier or parent company through September 30, 2022 and refrain from paying dividends through September 30, 2022.
To be eligible for aviation manufacturing job protection funds, a employee must be engaged in manufacturing activities including actively manufacturing an aircraft, aircraft engine, propeller, or component, part, or systems of an aircraft or aircraft engine, performing maintenance, repair, and overhaul of aircraft, aircraft engines, components or propellers; or operations related to design, development, or provision of an aviation product or service including a part, component or assembly. The manufacturing services must be established in the U.S. and have significant operations in, and a majority of its employees engaged in, aviation manufacturing activities and services or maintenance, repair, and overhaul activities and services based in the U.S.
Eligible companies must have involuntarily furloughed or laid off at least 10% of their workforce in 2020 as compared to 2019 or experienced at least 15% decline in 2020 revenues as compared to 2019. In accepting this funding, the manufacturing company agrees to refrain from conducting involuntary layoffs or furloughs or reducing pay rates and benefits for the eligible employee group until September 30, 2021.
The rail grants to the National Railroad Passenger Corporation stipulates that in accepting the long-distance funds, the National Railroad Passenger Corporation agrees to restore the frequency of rail service on long-distance routes to levels before July 1, 2020. They must also recall employees who were furloughed on or after October 1, 2020 within 90 days of this act.
The transit grants further specify that the funds can be used for reimbursement for payroll of public transportation, operating costs to maintains services due to lost revenue as a result of COVID-19, and paying the administrative leave of operations or contractor personnel due to restrictions in service. These funds should be directed to payroll and operations of public transportation unless the recipient has not furloughed any employees.
Summary of Emergency Funding to Provide COVID-19 Relief to Transportation by Bill and Its Designations
The Department of Treasury maintains more detailed accounts on where and how this money is delegated. The Treasury website has more information about which air carriers or other businesses received loans from the CARES Act and which air carriers and contractors have received any payroll support funding in the payroll support program of the CARES Act (PSP1), its extension in the CRRSA Act (PSP2) and the extension in the ARP Act (PSP3). Additionally, the FAA created a map of which airports have received CARES Act funding.
The Federal Transit Administration provides more details about what they are doing with their CARES Act grants, their CRRSA Act grants, and their ARP Act grants on their website.
Related Measures
