II 

116TH CONGRESS 

2D SESSION S. 4308 

To amend the Social Security Act to include special districts in the 

coronavirus relief fund, to direct the Secretary to include special districts 

as an eligible issuer under the Municipal Liquidity Facility, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 23, 2020 

Ms. SINEMA (for herself, Mr. CORNYN, and Ms. HARRIS) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Social Security Act to include special districts 

in the coronavirus relief fund, to direct the Secretary 

to include special districts as an eligible issuer under 

the Municipal Liquidity Facility, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Special Districts Pro5 vide Essential Services Act’’. 


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1 SEC. 2. INCLUSION OF SPECIAL DISTRICTS IN THE 

2 CORONAVIRUS RELIEF FUND. 

3 (a) IN GENERAL.—Section 601(a) of the Social Secu4 rity Act (42 U.S.C. 801(a)) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(3) FUNDS FOR SPECIAL DISTRICTS.—If an 

7 amount in excess of $150,000,000,000 is appro8 priated for payments made under this section, spe9 cial districts shall be eligible for payments from the 

10 portion of such excess amount paid to States in ac11 cordance with subsection (c)(6).’’. 

12 (b) AMOUNT FOR SPECIAL DISTRICTS.—Section 

13 601(c) of the Social Security Act (42 U.S.C. 801(c)) is 

14 amended— 

15 (1) by redesignating paragraphs (6) through 

16 (8) as paragraphs (8) through (10), respectively; 

17 and 

18 (2) by inserting after paragraph (5) the fol19 lowing new paragraphs: 

20 ‘‘(6) SPECIAL DISTRICTS.— 

21 ‘‘(A) IN GENERAL.—If a portion of any ex22 cess amount described in subsection (a)(3) is 

23 paid to a State, the State shall allocate at least 

24 5 percent of such portion for distributing pay25 ments to special districts in the State that sub26 mit to the Governor of the State or the entity 


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1 designated by the Governor to distribute such 

2 payments (referred to in this paragraph as the 

3 ‘designated payment entity’) a request for a 

4 payment during the COVID–19 emergency and 

5 information described in subparagraph (B) 

6 demonstrating the need for the payment, which 

7 the Governor of the State or the designated 

8 payment entity has determined, on the basis of 

9 a good faith effort, is accurate. 

10 ‘‘(B) INFORMATION DESCRIBED.—Infor11 mation described in this subparagraph is writ12 ten documentation demonstrating with respect 

13 to a comparable period before the COVID–19 

14 emergency that the special district has experi15 enced or is likely to experience during the 

16 COVID–19 emergency— 

17 ‘‘(i) reduced revenue or operational 

18 funding derived from provided services, 

19 taxes, fees, or other sources of revenue; 

20 ‘‘(ii) reduced indirect funding from 

21 the Federal Government, the State, or a 

22 unit of general government below the State 

23 level; or 


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1 ‘‘(iii) as a result of the COVID–19 

2 emergency, increased expenditures nec3 essary to continue operations. 

4 ‘‘(C) AMOUNT OF PAYMENT.— 

5 ‘‘(i) IN GENERAL.—Subject to clauses 

6 (ii) and (iii), the amount of the payment 

7 for a special district shall be determined by 

8 the Governor or the State or the des9 ignated payment entity, taking into consid10 eration the extent of a projected budget 

11 shortfall for the special district during the 

12 COVID–19 emergency and the need of the 

13 special district to supplement projected 

14 revenue. 

15 ‘‘(ii) LIMITATION.—Except as pro16 vided in clause (iii), the amount paid to a 

17 special district shall not exceed the amount 

18 of expenditures made by the special district 

19 for any quarter of calendar year 2019. 

20 ‘‘(iii) EXCEPTION FOR PROVIDERS OF

21 ESSENTIAL CRITICAL INFRASTRUCTURE

22 SECTOR SERVICES.—If a special district 

23 provides essential critical infrastructure 

24 sector services (as defined by the Cyberse25 curity and Infrastructure Security Agency 


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1 of the Department of Homeland Security), 

2 the amount paid to the special district may 

3 exceed the limit applicable under clause 

4 (ii). 

5 ‘‘(iv) RULE OF CONSTRUCTION.— 

6 Nothing in the preceding clauses of this 

7 subparagraph shall be construed as requir8 ing payment of an amount sufficient to 

9 provide a special district with full oper10 ational funding during the COVID–19 

11 emergency. 

12 ‘‘(D) RESPONSIBLE AUTHORITY FOR

13 RECOUPMENT.—If it is determined that a pay14 ment made to a special district did not comply 

15 with the requirements of the preceding subpara16 graphs, or was otherwise fraudulent or im17 proper, the special district shall be liable for the 

18 debt owed to the Federal Government under 

19 subsection (f), unless all or a part of the basis 

20 for such determination is that the determina21 tion required under subparagraph (A) regarding 

22 the accuracy of the information demonstrating 

23 the need for the payment was not made in good 

24 faith, in which case the State shall be liable for 


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1 all or a part of such debt, as the Secretary de2 termines appropriate. 

3 ‘‘(E) DEADLINE FOR DISTRIBUTION OF

4 FUNDS.—Payments to special districts in a 

5 State shall be distributed not later than 60 

6 days after the State receives a payment from 

7 any excess amount described in subsection 

8 (a)(3). 

9 ‘‘(F) COVID–19 EMERGENCY.—For pur10 poses of this paragraph, the term ‘COVID–19 

11 emergency’ means the public health emergency 

12 declared by the Secretary of Health and 

13 Human Services pursuant to section 319 of the 

14 Public Health Service Act on January 31, 

15 2020, entitled ‘Determination that a Public 

16 Health Emergency Exists Nationwide as the 

17 Result of the 2019 Novel Coronavirus’ and in18 cludes any renewal of such declaration pursuant 

19 to such section 319. 

20 ‘‘(7) EXCESS FUNDS WAIVER.— 

21 ‘‘(A) IN GENERAL.—If a State has allo22 cated funds from a payment to the State de23 scribed in paragraph (6) to special districts in 

24 that State, but has not met the 5 percent allo25 cation requirement of that paragraph, the GovVerDate Sep 11 2014 03:59 Aug 10, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4308.IS S4308

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1 ernor of the State may submit to the Secretary, 

2 in writing, a request for an excess funds waiver 

3 to exempt the State from having to make addi4 tional allocations from such funds to make up 

5 the remainder of such 5 percent requirement, 

6 and to allow the State to use the funds remain7 ing in accordance with this section. 

8 ‘‘(B) REQUIREMENTS.—A waiver request 

9 submitted under subparagraph (A) shall pro10 vide— 

11 ‘‘(i) information regarding how funds 

12 from the payment to the State described in 

13 paragraph (6) were allocated to special dis14 tricts in the State and otherwise used; and 

15 ‘‘(ii) an explanation why the require16 ment for the State to meet the 5 percent 

17 allocation requirement of paragraph (6) 

18 should be waived. 

19 ‘‘(C) DEADLINES.— 

20 ‘‘(i) WAIVER REQUEST.—A request 

21 for an excess funds waiver shall be sub22 mitted to the Secretary not later than 60 

23 days after the State receives a payment de24 scribed in paragraph (6). 


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1 ‘‘(ii) APPROVAL OR DISAPPROVAL.— 

2 The Secretary shall approve or disapprove 

3 a waiver request submitted under subpara4 graph (A), in writing, not later than 14 

5 days after the Secretary receives the re6 quest.’’. 

7 (c) DEFINITION OF SPECIAL DISTRICT.—Section 

8 601(g) of the Social Security Act (42 U.S.C. 801(g)) is 

9 amended— 

10 (1) by redesignating paragraphs (4) through 

11 (5) as paragraphs (5) through (6), respectively; and 

12 (2) by inserting after paragraph (3) the fol13 lowing new paragraph: 

14 ‘‘(4) SPECIAL DISTRICT.—The term ‘special dis15 trict’ means a political subdivision of a State, 

16 formed pursuant to general law or special act of the 

17 State, for the purpose of performing one or more 

18 governmental or proprietary functions.’’. 

19 (d) TREASURY IG OVERSIGHT AUTHORITY.—Section 

20 601(f)(2) of such Act (42 U.S.C. 801(f)(2)) is amended— 

21 (1) by inserting ‘‘or that a special district or 

22 State has not complied with the requirements of 

23 paragraph (6) or (7) of subsection (c) (as applica24 ble),’’ after ‘‘subsection (d),’’; and 


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1 (2) by striking ‘‘such subsection’’ and inserting 

2 ‘‘subsection (d) or paragraph (6) or (7) of sub3 section (c) (as applicable)’’. 

4 (e) UPDATE TO GUIDANCE.—The Secretary of the 

5 Treasury shall update any guidance issued with respect 

6 to the Coronavirus Relief Fund established under section 

7 601 of the Social Security Act (42 U.S.C. 801) to reflect 

8 the inclusion of special districts as eligible for payments 

9 from amounts appropriated under such section, to the ex10 tent such amounts exceed $150,000,000,000. 

11 SEC. 3. INCLUDING SPECIAL DISTRICTS IN THE MUNICIPAL 

12 LIQUIDITY FACILITY. 

13 The Board of Governors of the Federal Reserve Sys14 tem shall include special districts, as defined in section 

15 601(g)(4) of the Social Security Act (42 U.S.C. 801(g)(4)) 

16 (as added by section 2(c)), as eligible issuers in the Munic17 ipal Liquidity Facility program authorized under section 

18 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)). 

Æ 


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