On Tuesday, after intense negotiations to garner just three Republican votes and to reconcile the House and Senate-passed bills, President Obama signed the final version of the "American Recovery and Reinvestment Act of 2009." This $787 billion stimulus act—including roughly 65% in spending and 35% in tax cuts—is an "unprecedented effort to jumpstart our economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century."

The following report outlines the relevant pars of the stimulus act, first with an overview of the act’s general provisions, and later, with an emphasis on specific areas of interest. If you have question regarding the grant programs relevant to you, please contact Capital Partnerships to ensure that your proposals receive consideration for funding. Only days after the act’s enactment, time is be of the essence to secure these grants and other funds.

Grant Distribution Overview:

To date, the application process for many of the stimulus funds remains unclear. The act funnels much money through already existing programs (e.g. the transportation formula funding), but other funds flow through newer vehicles (e.g. most of the broadband funds). To overcome these obstacles of ambiguity, we suggest a shotgun approach to applications to make sure that the all bases are covered. The following provides a survey of the possible locations for application:

• Application via the States: Because much of the stimulus act’s funds will be distributed by federal government agencies to states and state agencies, these local recipients have begun or will soon begin to have websites available for application.

• Ohio, for example, recently set up the "State of Ohio Federal Stimulus Initiative" website at http://www.recovery.ohio.gov/. At the website, applicants are encouraged to submit contact information and a brief project proposal statement (1,200 max). Highlighting the ambiguity of the process, the site notes that "gathering information on the form below to help make sure eligible applicants get information, when it's available, about where and how to apply for funds, but no applications are being submitted through this site at this time." The website also warns that, "[f]ailure to submit information through this website may diminish your ability to obtain funds."

• Virginia provides another example of a state setting up a stimulus website (http://www.stimulus.virginia.gov/), and if you are considering applying for funds in another state, be sure to find the website for that state or have Capital Partnerships assist you in the process.
  
  
• Providing an example of a state agency’s information and application website, the Ohio Department of Transportation ("ODOT") is anticipated to launch its stimulus site in the next few days.
  
  
• Finally, some of the funds flowing through the states will be applied to already existing programs, simply boosting the ability of states to finance more projects. Following the shotgun approach in such instances, one should "apply" through the state recovery website and submit a formal application to the state administrator of the program (e.g. the Drinking Water State Revolving Funds ("DWSRF")).
  

• Application via the Federal Government: While most of the grant-type funds will flow through the states or pre-set formulas, some applicants may have to (or at least, should) apply directly to the federal government (e.g. some of the broadband funds).

• The "Recovery.Gov" website, while focused mostly on stimulus transparency and accountability, also provides decent information regarding the various types of funding under the act and links readers to more specific information regarding applications.

• Providing the most specific information to date, the Recovery.Gov links readers to a recently released memorandum of the Office of Management and Budget ("OMB") (http://www.recovery.gov/?q=node/176). It lists specific information regarding the application and distribution of federal funds:
• "Within twenty (20) days after enactment of the Recovery Act, agencies shall post funding opportunity announcements (i.e., "synopses’) to Grants.gov."
• "Information about specific requirements (e.g., use of funds, certification, data reporting, performance measures, etc.) under the Recovery Act should be in the full funding announcement."
• "The Grants.gov synopsis shall link to the full announcement on the agency website within thirty (30) days of enactment. "
• "In the interim, the synopsis should link to an agency instruction on when the full announcement is expected to become available."
  
  
• The OMB memo highlights that three sources are of primary importance in the application for direct federal funds:
• The Grants.gov website—This website is easily searchable, and should soon provide information for stimulus funds available both through already existing and newly created programs.
• The GovLoans.gov website—According to the OMB, "[a]gencies shall use the GovLoans.gov web portal in conjunction with agency websites and existing agency marketing and outreach initiatives to assure public awareness of loan availability under the Recovery Act."
• The specific agency websites—Unless the funds are distributed through already existing programs, the information is unlikely to be available yet.
  
  
• Finally, the stimulus act itself dictates more requirements for certain grants and loans than others, meaning that the application dates could be sooner or later than the OMB memo indicates. If these considerations were laid out in the text of the act, they will be specifically outlined below.
  

General Application Considerations:

• Shovel Ready:

• As with the prior House and Senate versions, the final act emphasizes the "obligation" or assigning of grants in a very quick timeframe. These timeframes vary by specific loans or grants, but those distributing the funds (including states and federal agencies) will be highly attuned to applicants’ assurances of quick use for fear of the act’s tough "use-it-or-lose-it" provisions.

• In addition to the specific timeframes for individual grants, even the preamble of the act emphasizes that "the President and the heads of Federal departments and agencies shall manage and expend the funds made available in this Act so as to achieve the purposes specified in subsection (a), including commencing expenditures and activities as quickly as possible consistent with prudent management."
  
  
• Generally, recipients of most grants awarded through federal agencies (to states or municipalities) must have half of the funds contracted within one year after enactment and all of the funds within two years.
  

• Oversight Controls:

• Distributors and recipients of funds will be subject to heavy scrutiny, generally with an eye to public benefit. Much of this scrutiny will come through transparency controls, including disclosure requirements on the Recovery.Gov website.

• The act specifically requires quarterly reports by both the issuing agencies and the fund recipients, all of which will be made available on the Recovery.Gov website. The various reports and fund distributions will be subject to further review by the Inspector General, the General Accounting Office, and other federal agencies.
  
  
• Fortunately, the act stipulates that "[f]ederal agencies, coordination with the [OMB], shall provide for user-friendly means for recipients of covered funds to meet the [act’s reporting requirements]."

Broadband Funds:

The final act reduced broadband funding from the Senate-passed version to $7.2 billion from the proposed $9 billion, and it also altered the funding mechanisms. The largest chunk of the funds ($4.5 billion) still flows through the National Telecommunications and Information Administration ("NTIA"), a division of the Commerce Department, and most of the remaining grants ($2.5 billion) go through the Rural Utilities Service, a sub-part of the Department of Agriculture ("USDA").

• USDA’s Distance Learning, Telemedicine and Broadband Program

• $2.5 billion is USDA for rural broadband development in the form of "broadband loans and loan guarantees, as authorized by the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) and for grants (including for technical assistance)." The division of the funds between loans and grants is not yet clear.

• 75% of the area to be served by a project receiving funds will be in a rural area without sufficient access to high speed broadband service to facilitate rural economic development, as determined by USDA.
  
  
• Priority Considerations in Funding:
• for broadband systems that will deliver end users a choice of more than one service provider
• for projects that provide service to the highest proportion of rural residents that do not have access to broadband (unserved areas)
• for project applications from borrowers or former borrowers under title II of the Rural Electrification Act of 1936
• for projects that demonstrate that, if the application is approved, all project elements will be fully funded and completed
• for activities that can commence promptly following approval
• no area of a project funded with USDA funds may receive funding from NTIA (Commerce) funds.
  
  
• USDA must submit a report on planned spending and actual obligations of the funds on or before 90 days after the date of enactment of this Act and at quarterly intervals until all the funds are obligated.
  

• NTIA’s Broadband Technology Opportunities Program

• $4.7 billion in grants will be distributed as follows:
• $4.35 for standard grants, subject to the following minimum requirements:
• $200 million for competitive grants for expanding public computer center capacity, including at community colleges and public libraries
• $250 for competitive grants for innovative programs to encourage sustainable adoption of broadband service
• $10 million for auditing of the program by the Inspector General
• $350 million for the purposes of developing and maintaining a national broadband inventory map
• The Federal Communications Commission ("FCC") may be granted power over some of the funds and will be consulted in development of the program
• Priority Considerations in Funding:
• for service to consumers in unserved and underserved areas
• for the targeting of broadband to specific populations and projects:
• to schools, libraries, medical and healthcare providers, community colleges and other institutions of higher education, and other community support organizations and entities
• to low-income, unemployed, aged, and otherwise vulnerable populations
• to job-creating strategic facilities located within a State-designated economic zone, Economic Development District designated by the Department of Commerce, Renewal Community, or Empowerment Zone designated by the Department of Housing and Urban Development, or Enterprise Community designated by the Department of Agriculture
• public safety agencies
• to stimulate the demand for broadband, economic growth, and job creation
• The NTIA may consult with States in determining the allocation of funds to these target zones
• Funds should be distributed by the end of fiscal year 2010
• Recipients must make assurances that their projects will be timely and will not exceed 2 years for completion
• NTIA must submit quarterly reports on fund obligations and must require ongoing reporting requirements from grant recipients
• A recipient must be a state or political subdivision, a nonprofit entity, or any other entity, including a broadband service or infrastructure provider, that NTIA finds by rule to be in the public interest.
• NTIA must require the submission of detailed information that an applicant will adhere to the general purposes of the grants.
• The federal share of any project may not exceed 80% except by specifically approved waiver

Job Training and Workforce Development Funds:

Most of these funds seem to be available through already established formulas and federal programs, but education centers might be eligible for some of the training and equipment grants.

• Funding under the Workforce Investment Act ("WIA") and Other Training

• $3.95 billion is allocated under the House bill for various job training programs under the Department of Labor

• These include both formula and discretionary grants to States for adult, youth, and dislocated worker services
  
  
• Under the WIA formula programs, the distributions will be as follows:
• $500 million for services for adults within the state formula grant programs
• $1.2 billion for youth services to stimulate summer employment of youth, with money available to those up to the age of 24
• $2.95 billion for states to provides training and reemployment services

• Other Discretionary Funding under the Secretary of Labor:

• Dislocated Workers Assistance National Reserve: $200 million is available to alleviate worker dislocations, with emphasis on areas of high unemployment or poverty

• Dislocated Worker Services: 1.25 billion for support services, including job training
• YouthBuild: $50 million is available to expand this current program for at-risk youth
• High Growth and Emerging Industry Sectors: $750 million is allocated for a new program of competitive grants for worker training
• $500 million of these funds are dedicated to projects that prepare workers for green jobs in renewable energy sectors
• The remaining $250 million is prioritized for training in the health care sector

• Training for Primary Care Physicians and Nurses

• $500 million is available under the Department of Health and Human Services for health profession training.

• $300 million is specifically allocated for the National Health Service Corps recruitment and field activities
• $200 million of the remaining funds are available for the following:
• for all the disciplines trained through the primary care medicine and dentistry program, the public health and preventive medicine program, and scholarship and loan repayment programs
• for grants to training programs for equipment
• to foster cross-State licensing agreements for healthcare specialists

Health and Technological Research Funds:

While the act provides a large amount of funds for research and development, much of these grants are reserved for non-profit organizations such as universities and federally designated research facilities.

• Research Science Building Construction Grants

• $360 million will be available under the Department of Commerce’s National Institute of Standard and Technology through a competitive construction grant program for research science buildings.

• $180 million of these funds will be for a competitive construction grant program for research science buildings.
• The grants are awarded to colleges, universities, and other nonprofit, science research organizations on a merit basis.

• National Science Foundation Research and Related Activities

• $2.5 billion will be available through the National Science Foundation ("NSF") for various research and related activities
• $300 million is provided for the Major Research Instrumentation ("MRI") program.
• $200 million is provided for academic facilities renovation.
• This program increases research and training in institutions of higher education, museums and science centers, and non-profit organizations.
• The $300 million MRI funds assist with the acquisition and development of shared research instrumentation that is, in general, too costly and/or not appropriate for support through other NSF programs.
• The $200 million is to restart the NSF facilities program covering physical and other sciences and engineering at the Nation’s institutions of higher education, museums and science centers, and non-profit organizations
• Much of the remainder of the funds is for other NSF projects, including renovations of research spaces at academic institutions and other capital plans

• Construction and Development of Major Research Equipment and Facilities

• $400 million will be provided under the NSF to accelerate the construction and development of major research facilities that provide unique capabilities at the cutting edge of science.

• The funding will be used for previously approved investments and those nearing their completed design reviews.

Aviation Funds:

Funds for aviation are primarily administered through the FAA and its already existing programs. Also, the final act doubled the previously proposed airport security funding provided.

• FAA Supplemental Funding for Facilities and Equipment

• These funds include $200 million as proposed by the Senate and not included in the House-passed version.

• The funds will be distributed as follows:
• $50 million will upgrade the FAA’s power systems.
• $50 million will modernize aging en route air traffic control centers
• $80 million will replace air traffic control towers and TRACONs
• $20 million will be used to install airport lighting, navigation and landing equipment

• Airport Improvement Grants (AIP)

• The final act reduced this funding to $1.1 billion, compared to the $3 billion proposed by the House.
• Funds will be distributed by the FAA to repair and improve airport infrastructure under the already existing "Grants-in-aid for Airports" program.
• These funds are to be awarded on a discretionary basis for ready-to-go projects.
• For the funding, all of the usual restrictions and requirements of subchapter 1 of chapter 417 of title 49 U.S.C. apply.
• The FAA faces strict deadlines to ensure quick distribution of the funds.

• Aviation Security

• $1 billion, as opposed to the $500 million proposed by the House plan, is allocated under the Department of Homeland Security for airport safety.
• This money will be used to install Aviation Explosive Detection Systems and to advanced checkpoint screening technologies at the nation’s airports.
• Funds are competitively awarded based on security risks at airports.
• As part of the $1 billion investment, TSA will be able to accelerate the procurement of next generation passenger screening technologies.

Transportation Funds:

The final act provides a little over $48 billion for transportation, representing an increase over both the House and Senate-passed versions and 6% of the total stimulus act funds. While the House had $30 billion for highways and none for discretionary grants, the Senate proposed $27 billion for highways (with increased project eligibility) and $5.5 billion for discretionary grants. Compromise on these proposals resulted in a final $27.5 billion for highways (with increased project eligibility) and $1.5 billion for discretionary grants. Also, funding was greatly increased for freight and passenger rail, and especially high-speed rail.

• $27.5 Million Formula Funds:

• The funds are distributed half via STP and the other half under the same percentages as the distribution formula obligation limitation for states in fiscal year 2008. Functionally, the STP and formula obligation requirements mean that any project that is STP eligible (23 U.S.C. 133(b)) is eligible for the funds.
• In a big change from the House version, the Senate and final act versions allow for projects including "passenger and freight rail transportation and port infrastructure," not just road and bridges.
• "Use-it-or-lose-it" deadlines imposed on the states are 120 days for the first half of the funds and 1 year for the remaining funds. This rule does not apply to the 30% of funds ($8 billion) distributed on the basis of population.
• All funds have a 100% federal share and require not state or local matching funds.
• The funds are to be apportioned to states within 21 days of enactment.
• The state apportionments are divided into three pots:
• 67% of the money ($17.86 billion) goes directly to state DOTs for discretionary spending (including rail).
• Half must be obligated within 120 days or it will be redistributed to other states.
• The remaining funds must be obligated within 1 year.
• 30% ($8 billion) is sub-allocated based on population.
• These funds are placed under MPO control.
• The funds must be obligated within one year or they will be redistributed to other states.
• 3% ($3 billion) goes to a transportation set-asides for enhancements (bike paths, beautification, etc.).
• Ohio, for example, is slated for the following funds:
• $935,677,000 total
• $627 million is for ODOT’s discretion (the 67% pot)
• $281 million is allocated by population to the MPOs (the 30% pot)
• $28 million is for transportation enhancements (the 3% pot)

• $1.5 Billion Discretionary Grants

• The DOT Secretary can select projects for highways, brides, mass transit, passenger or freight rail, port infrastructure, or some combination of these modes.
• The federal cost share is 100%.
• Minimum grants sizes are $20 million (with options for waiver) and the maximums is $300 million.
• No one state can receive more than $300 million.
• The DOT Secretary can use up to $200 million for the funds for credit assistance as under the TIFIA innovative finance program.
• The Secretary has 90 days from the date of enactment to publish criteria regarding the selection process.
• Preference is to be given to geographically diverse projects and those that can be completed within 3 years.
• Applicants must submit projects within 180 days of enactment and must have funds obligated by September 30, 2011.

• $6.9 Billion Transit Formula Funding

• Funds are for "capital assistance grants authorized under [49 U.S.C. § 5302(a)(1)]."
• Funds will remain available for obligation until September 30, 2010, and require no state or local matching funds.
• How the funds will be distributed:
• $100 million for "discretionary grants to public transit agencies for capital investments that assist in reducing the energy consumption or greenhouse gas emissions of their public transportation systems."
• $6.8 billion remaining is for transit agencies in states via three different formulas (half must be obligated within 180 days and the remainder, within 1 year of apportionment):
• $5.44 billion (80%) apportioned under the urbanized area formula (49 U.S.C. § 5307)
• $680 million (10%) apportioned under the fast-growth, high density state formula (49 U.S.C. § 5340), split between urbanized and non-urbanized apportionments
• $680 million (10%) apportioned under the non-urbanized area formula (49 U.S.C. § 5311)
• $750 million for fixed guideway modernization for "capital expenditures authorized under [49 U.S.C. § 5309(b)(2)]"
• Funds are eligible for obligation until September 30, 2010
• All funds are 100% federal share, requiring no state or local matching
• Ohio, for example, is scheduled to receive the following:
• $180 million total
• $137 million under the urbanized area formula
• $14 million under the rural formula
• $6.5 million under the fixed guideway formula

• $8 Billion in High-Speed Rail and Intercity Passenger Rail Funding

• The money funds and expands several programs approved in the latest Amtrak reauthorization bill, including:
• The high speed rail corridors, and
• The intercity passenger rail capital projects
• Congestion reduction grants
• The timelines for obligation of these funds is not specified.
• The President is expected to request an addition $1 billion per year starting in 2010.

• Reporting Requirements:

• Certification: The governor of each state must certify to DOT within 30 days of enactment that the state will maintain its funding efforts for already planned projects. If it does not maintain these efforts, future funds will be restricted.

• Accountability: Recipients are subject periodic reports, starting at 90 days after enactment and continuing until 3 years after enactment.

Green Transportation or Rail Funds:

The act does not provide grants specifically to manufacturers or other private entities to develop green technology in relation to energy efficient rail or transportation. However, under the transit funding ($6.9 billion total), $100 million will be distributed as discretionary grants to public transit agencies for "capital investments that will assist in reducing the energy consumption or greenhouse gas emissions of their public transportation systems." The program includes several key points:

• For these energy-related investment grants, priority shall be given to projects based on the total energy savings that are projected to result from the investment and projected energy savings as a percentage of the total energy usage of the public transit agency.
• The federal share of the costs for which any grant is made shall be, at the option of the recipient, up to 100%.
• The funds appropriated under this heading shall not be commingled with any prior year funds.

Presumably, a private entity seeking to "green" a public transit agency’s operations would be eligible for funding.

Water System Funds:

The final act maintained the House and Senate efforts to increase funding for the Drinking Water State Revolving Funds ("DWSRF") and the Clean Water State Revolving Funds ("CWSRF").

• The DWSRF received $2 billion.

• The program is administered by the U.S. Environmental Protection Agency ("USEPA") through state EPAs to provide municipalities with low-interest loans to improve local drinking water.
• Ohio previously received $25 million in annual funds could quickly see an increase to $50 or even $75 million.
• Consideration will primarily be given to projects on a state priority list.
• 20% of the funds will be designated for "green friendly" projects.
• While specific spending guidelines for these funds requires construction or at least contract for construction within 12 months of enactment.
• The act specifically waives the normal local share requirements for the DWSRF loans.
• It provides "states with the means to establish a revolving fund to provide low-cost loans to public water systems and other funding through set-asides."

Farming Funds:

Most of the agricultural funds in the stimulus act are limited and primarily go towards increased funding for USDA employees and facilities. Nonetheless, there are two potential sources of funding for farmers.

• Rural Business Loans

• $150 million is approved for rural business loans.
• These funds will support about $3 billion in rural business loans and grants.
• Of this amount, $2.99 billion is approved for guaranteed business and industry loans and $20million is for rural business enterprise grants.

• Trade Adjustment Assistance for Farmers s

• The stimulus act reauthorize the Trade Adjustment Assistance ("T AA"), to extend trade adjustment assistance to service workers, communities, firms, and farmers, and for other purposes
• The act expands the plan, allowing qualifying individuals to:
• Participate in an initial technical assistance course, and to receive cash benefits, not to exceed $10,000, based on their production and the decline in price for the commodity
• Where available, the producer may also attend more intensive technical assistance.
• To qualify to receive benefits, individual agricultural producers that are covered by a certified petition must show:
• that the individual producer produced the qualified commodity; and
• the net income of the producer has decreased
• Previously, recipients had to show a 20% decline in price, but now, they must only show a 15% decline in a given year.