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United States Senator Kyrsten Sinema, D-Ariz., and Senator John Cornyn, R-Texas, introduced Thursday S.4308, a Senate companion to H.R. 7073, the Special Districts Provide Essential Services Act. Senator Kamala Harris is an original cosponsor.

The bipartisan deal was reached after months of CSDA advocacy efforts and weeks of negotiations, which closely involved California United States Senator Dianne Feinstein. The bill introduction comes following Senator Feinstein’s gracious withdrawal of original co-sponsorship to resolve a political impasse between Republicans and Democrats leading the negotiations. Senator Feinstein’s efforts hastened the introduction of the Senate version of the Special Districts Provide Essential Services Act and CSDA appreciates her support leading to a milestone in special districts advocacy for greater access to federal COVID-19 relief funding.

The newly introduced Senate bill uses text from H.R. 7073, but adds greater flexibility for states with less reliance on special districts within their communities and offers states guidance on how to distribute the five percent they must direct of future Coronavirus Relief Fund appropriations. Overall, the bill would:

• Require states to distribute five percent of future Coronavirus Relief Fund allocations to special districts within 60 days of receiving funds from the U.S. Treasury.
• Allow special districts to submit information to their state demonstrating the degree to which they have experienced or anticipate they will experience COVID-19-related revenue loss, grant/inter-governmental revenue loss, or increased COVID-19-releated expenditures.
• Limit allocations such that a special district may not receive funding that exceeds the amount the district expended in any quarter of 2019. Special districts providing services the federal Cybersecurity and Infrastructure Security Agency deems to be within a “critical infrastructure sector” would be exempt from limitations.
• Provide flexibility for states with excess funds reserved for special districts that make a good faith effort to distribute funds to districts within the state. States could file a waiver with U.S. Treasury after 60 days demonstrating how the state distributed its special districts funding. If approved, the state may use the balance of the funds for other COVID-19 response purposes.
• Define “Special district” as a “political subdivision of a State, formed pursuant to general law or special act of the State, for the purpose of performing one or more governmental or proprietary functions.”
• Direct the U.S. Department of Treasury to consider special districts as eligible issuers to take advantage of the Municipal Liquidity Facility (MLF), as established in the CARES Act, for access to capital during the current financial downturn.

CSDA will continue working with the National Special Districts Coalition (NSDC) and a group of California and national special districts stakeholders to advocate for the Senate legislation to be included in the Senate’s COVID-19 relief package, which would likely be negotiated with the House of Representative’s HEROES Act.

Learn more about CSDA’s state and federal Coronavirus relief advocacy, and download a sample letter of support to send to your representatives at csda.net/take-action.

For questions on federal COVID-19 advocacy, please contact Cole Karr, CSDA Public Affairs Field Coordinator, at colek@csda.net.